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Can You Get Your Sallie Mae Loans Forgiven?

The reality is that — much like that red wine stain on the rug — Sallie Mae student loans aren’t likely to evaporate into thin air. That’s because Sallie Mae is a private lender now.

And despite what you may have heard — or hoped for based on some 2020 presidential campaign promises — currently there is no such thing as private student loan forgiveness.

Forgiveness is limited to federal education loans, and even then, the options are few. There are federal student loan forgiveness programs for those who go into public service or teaching. But other than that, it’s extremely difficult to cancel student loans.

Can Older Sallie Mae Loans Be Forgiven?

If you’re confused about whether your Sallie Mae loans are private or federal, it may be because the company has evolved over the years.

Though Sallie Mae, aka the SLM Corp., no longer services federal loans, that wasn’t always the case.

Sallie Mae was created in 1972 as the Student Loan Marketing Association, a government-sponsored enterprise that serviced federal education loans. Even though it became fully privatized in 2005, the company continued to service federal loans made under the Federal Family Education Loan (FFEL) Program until that program ended in 2010. Then, in 2014, Sallie Mae split into two companies: SLM Corp. and Navient Corp and shifted all its federal student loans to Navient.

So, if you have an older loan — one that originated before 2014 — it may have been a federal loan that started out with Sallie Mae and then moved on to Navient. And if that’s the case, you may be able to apply for Sallie Mae loan forgiveness.

Applying can be complicated, and you may have to consolidate your loans into a Federal Direct Consolidation Loan as part of the process.

You can see if your old debt is a federal education loan by visiting the Federal Student Aid website. If it is, and you want to seek loan forgiveness, you’ll eventually make your application to the government.

Keep in mind that Navient federal student loan accounts were to shift to Maximus after Navient cut ties with the Department of Education in late 2021.

You can contact your current loan servicer for information on how to get started.

What If You Don’t Qualify for Loan Forgiveness?

If federal student loan forgiveness seems a long shot for you, don’t despair — you also may want to look into deferment or forbearance. These strategies allow qualifying borrowers to temporarily reduce or stop their federal student loan payments. However, depending on the type of federal loan you have, interest may continue to accrue while payments are paused, which could increase the overall cost of the loan.

Looking for a more long-term solution? An income-based repayment plan can offer qualified applicants another way to lower federal student loan payments. The four options limit monthly payments based on family size and discretionary income (the difference between your annual income and 150% of the poverty guideline for your family size and state of residence).

You can contact your loan servicer for assistance with federal loan repayment. If you don’t know who your servicer is, you can find out by visiting your Federal Student Aid dashboard or calling 800-433-3243.

Are There Alternatives to Private Student Loan Forgiveness?

Although there currently is no such thing as Sallie Mae private student loan forgiveness, there are alternatives available to borrowers struggling to manage their private loans.

Private lenders don’t offer income-driven repayment plans. But if you feel comfortable calling Sallie Mae (or any lender) directly, you could ask about other repayment plans they might offer or what ideas they might have for your situation. At the very least, it doesn’t hurt to learn more about your loans.

And some lenders, including Sallie Mae, offer deferment and forbearance for those who qualify.

The timeline and cost for each of these programs may vary by lender. Sallie Mae, for example, may require a “good faith payment” to go into forbearance, and you can press pause on payments for only three months at a time, for a maximum of a year.

Something else to consider if you’re thinking about deferment or forbearance is that — just as with federal loans — even though the payments are paused, interest may continue to accrue. And this can increase the total cost of the loan.

Recommended: What Happens If You Just Stop Paying Your Student Loans

What About Refinancing?

If you can’t make any headway with your current repayment plan, you can always look into refinancing.

While Sallie Mae doesn’t offer loan consolidation and refinancing anymore, you could potentially reduce your interest rate by refinancing your student loans with a different private lender, especially if you have a good credit history and strong potential earnings.

If you’re approved, the new lender will pay off your old loans and issue you one new student loan — hopefully with a lower interest rate. A lower rate can save money on interest payments over the life of the loan, provided that the loan term isn’t extended.

Though you can’t combine federal and private student loans through a federal loan consolidation program, some private lenders will refinance both.

You could extend your loan term if you’re hoping to make your monthly payments more manageable, or you could opt for a shorter loan term to try to get out of debt sooner.

You’ve probably been warned that you could give up some important benefits if you refinance your federal student loans through a private lender, and it’s true. You’ll lose access to federal repayment programs.

But refinancing with a private lender makes sense for some borrowers.

Recommended: Student Loan Consolidation vs Refinancing

The Takeaway

Lender Sallie Mae used to offer federal student loans, and if you received one, you may be able to qualify for loan forgiveness. But federal student loan forgiveness can be hard to get — and if you have a private student loan through Sallie Mae, forgiveness is not available.

There are, however, repayment options, including refinancing. SoFi offers flexible terms and competitive rates for student loan refinancing, with no origination fee.

View your rate in two minutes.


SoFi Student Loan Refinance
IF YOU ARE LOOKING TO REFINANCE FEDERAL STUDENT LOANS PLEASE BE AWARE OF RECENT LEGISLATIVE CHANGES THAT HAVE SUSPENDED ALL FEDERAL STUDENT LOAN PAYMENTS AND WAIVED INTEREST CHARGES ON FEDERALLY HELD LOANS UNTIL THE END OF JANUARY 2022 DUE TO COVID-19. PLEASE CAREFULLY CONSIDER THESE CHANGES BEFORE REFINANCING FEDERALLY HELD LOANS WITH SOFI, SINCE IN DOING SO YOU WILL NO LONGER QUALIFY FOR THE FEDERAL LOAN PAYMENT SUSPENSION, INTEREST WAIVER, OR ANY OTHER CURRENT OR FUTURE BENEFITS APPLICABLE TO FEDERAL LOANS. CLICK HERE FOR MORE INFORMATION.
Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income-Driven Repayment plans, including Income-Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.

External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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What to Do After You Graduate From Law School

Life after law school can be an exciting time as you look forward to your new career. There are plenty of opportunities available to those with a JD. Some avenues to consider include practicing law at a firm, specializing as an attorney in a field like patents, contracts, immigration (and many more), working as general counsel in-house at a corporation, or even pursuing a career in government.

The path you choose depends on the type of law you studied, your interests, and past experiences. According to the Bureau of Labor Statistics (BLS), the median salary for lawyers in 2020 was $126,930 annually.

Once you find your first post-law school gig, you may also have to start thinking about repaying any law school loans.

Finding Jobs After Law School

After getting a law degree, what to do really depends on why you decided to go to law school in the first place. Did you have dreams of working at a major law firm, becoming a public defender, or going solo with your own practice?

Maybe you don’t even want to practice law and would rather apply your new skills to a relevant career, or, continue to further your education even more. If you are considering what to do after law school, you can start by examining what workplace environment you find the most exciting and attainable.

Landing at a Law Firm

A law firm is an obvious choice for where to work after getting your JD. But the size, location, and culture of the law firm can greatly impact your experience and job satisfaction. Attorneys working at smaller firms may offer stronger partnership prospects than larger law firms. However, depending on location, the pay could be comparatively lower, and your training may come in the form of on-the-job experience.

While the path to promotion may be longer at a larger firm, they may have more resources and higher salary. Depending on your preferences and career interests, a major law firm with a big name might be a better fit to help you find your specialty.

Considering a Clerkship

A clerkship is an important career milestone for many attorneys. Usually taking place under the guidance of a certain judge, a clerkship allows law school graduates to see the inner workings of the legal system. Many are considered prestigious resume boosters, and offer valuable first-hand experience working under a judge and a leg up on networking from the start.

There are federal and state court clerkships, but federal opportunities like with Supreme Court or circuit court judges can be more difficult to secure because of their prestige. But state clerkships can also be beneficial, especially if you plan on practicing in the local area.

Getting an Advanced Degree

If you have a desire to specialize in a specific field of law, staying in school to get a post-JD degree is another avenue to consider after getting a law degree.

You might want to pursue this type of degree after having some relevant work experience, which can help you first figure out what particular field of law you want to study. These specialty degrees range from Air and Space Law, Sports Law, Global Food Law, even Cannabis Law and more.

Alternative Careers Outside Law

Pivoting after law school to a different career is another option to consider when looking at jobs. If you, like many, have graduated with six-figures worth of student debt, you’ll obviously want to find a steady job so you can make regular student loan payments.

Other jobs that may fit with the skill set you curated in law school may include jobs such as: political advisor, journalist, lobbyist, and teacher.

Tackling Law School Debt

Depending on your earning potential and chosen career path, it might make sense for you to aggressively pay off your law school debt in 10 years or less, or try to maximize your law school loan forgiveness opportunities.

In order to make your degree count towards your personal and professional goals, figuring out how to approach your debt is a key part of what to do after law school.

Ready to tackle your law school debt?
Refinancing your student loans
could help you pay it off faster.


Making Payments While Still in School

While the government does not require you to make payments on most federal student loans while still in school, you could consider paying the amount of interest that builds up each month to help keep your student loan debt from growing.

Whether you need to pick up a side hustle or prioritize how much you save, making at least interest payments on your student loans while still in school can help reduce the amount of interest that will capitalize on your student loans. This can ultimately reduce the amount of interest that accrues, and help set you up for success after law school.

Sticking to Budget Basics

After your law degree, it can be wise to take stock of your budget and work to balance your goals for savings, emergency funds, credit card payments, and student loans. According to the American Bar Associations 2020 Law School Student Loan Debt Survey, 75% of students had at least $100,000 in student loan debt after graduation.

Ultimately, you’ll likely want to pick a student loan repayment plan that works for your personal budget, no matter what jobs after law school you are considering. You may decide to pay down debt while also building up a basic emergency fund as part of your financial foundation.

Recommended: How Much Money Should Be in Your Emergency Fund?

Refinancing Law School Loans

Refinancing your law school loans means that a private lender will issue one new loan that effectively pays off your existing student loans. This new loan comes with new terms, ideally with a lower interest rate or shorter repayment period. Instead of paying multiple student loans, such as from undergraduate and graduate school, there is only one new loan to pay off.

Refinancing federal student loans means that you will not be able to take advantage of benefits like income-driven repayment plans and Public Service Loan Forgiveness any longer. So it may not make sense if you are taking advantage of one of these benefits. But refinancing could be an option if you want to refinance private and federal loans, or are hoping to secure a lower interest rate on existing private student loans.

The Takeaway

Life after law school can mean something different for everyone. Whether you pursue a private practice, family law at a small firm, or corporate law at a large one, there are lots of career opportunities to pursue.

Law school may also mean taking on a significant amount of student loan debt. Refinancing could be an option that helps you spend less in interest over the life of the loan, if you’re able to qualify for a more competitive interest rate. If you’re interested in refinancing, consider SoFi. Refinancing with SoFi can be completed online and there are no application fees, origination fees, or prepayment penalties.

Learn more about refinancing your law school loans with SoFi.


SoFi Loan Products
SoFi loans are originated by SoFi Lending Corp. or an affiliate (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license # 6054612; NMLS # 1121636 . For additional product-specific legal and licensing information, see SoFi.com/legal.

SoFi Student Loan Refinance
IF YOU ARE LOOKING TO REFINANCE FEDERAL STUDENT LOANS PLEASE BE AWARE OF RECENT LEGISLATIVE CHANGES THAT HAVE SUSPENDED ALL FEDERAL STUDENT LOAN PAYMENTS AND WAIVED INTEREST CHARGES ON FEDERALLY HELD LOANS UNTIL THE END OF JANUARY 2022 DUE TO COVID-19. PLEASE CAREFULLY CONSIDER THESE CHANGES BEFORE REFINANCING FEDERALLY HELD LOANS WITH SOFI, SINCE IN DOING SO YOU WILL NO LONGER QUALIFY FOR THE FEDERAL LOAN PAYMENT SUSPENSION, INTEREST WAIVER, OR ANY OTHER CURRENT OR FUTURE BENEFITS APPLICABLE TO FEDERAL LOANS. CLICK HERE FOR MORE INFORMATION.
Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income-Driven Repayment plans, including Income-Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.

External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Third Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third party trademarks referenced herein are property of their respective owners.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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What Student Loan Repayment Plan Should You Choose? Take the Quiz

Federal student loans offer a set selection of repayment plans that borrowers can choose from. Federal student loan borrowers may be assigned a repayment plan when they begin loan repayment, but they can change their repayment plan at any time without any fees.

Choosing the right repayment plan may feel overwhelming, but understanding the repayment plans can help. In this article, we’ll review the repayment plans available to federal student loan borrowers, listed below, and student loan refinancing options.

Student loan repayment options for federal loans explored here include:

•   Standard Repayment Plan

•   Extended Repayment Plan

•   Graduated Repayment Plan

•   Income-driven repayment Plans

The Standard Repayment Plan is 10 years and usually has the highest monthly payments but allows borrowers to repay their loans in the shortest period of time, which may help the borrower pay less in accrued interest over the life of the loan.

The Extended Repayment plan stretches out the repayment period for up to 25 years. Payments can be either fixed or may increase gradually over time. This repayment plan may be worth considering for borrowers who cannot meet the monthly payments on the Standard Repayment Plan.

On the Graduated Repayment Plan, the repayment period is 10 years, but the monthly payments start out low and then increase every two years. This plan may be worth considering for borrowers who have a relatively low income now, but anticipate that their salary may increase substantially over time.

Income-driven repayment plans tie a borrower’s income to their monthly payments. These options may be worth considering for borrowers who are struggling to make payments under the other payment plans or who are pursuing Public Service Loan Forgiveness.

You can take this quiz to get a better understanding of each option and see example scenarios that could be similar to yours. Want to skip to the answers? Check out overviews of the different repayment plans below.

Student Loan Repayment Plan Options for Federal Student Loans

Standard Repayment Plan

The Standard Repayment Plan ​is essentially the default repayment plan for federal student loans. This plan extends repayment over up to 10 years and monthly payments are set at a fixed amount. The interest on the loan remains the same as when it was originally disbursed, because federal loans have fixed interest rates.

One of the benefits of the Standard Repayment plan is that it may save you money in interest over the life of your loan because, generally, you’ll pay back your loan in the shortest amount of time (10 years) compared to the other federal repayment plans (20 to 30 years).

A common challenge associated with the standard repayment plan is that payments can be too high for some borrowers to manage. Remember that this is the default option when it comes time to set up a repayment plan, so if you would prefer another option, you’ll need to choose one when the time comes to start repaying your loan(s).

Student Loans Eligible for the Standard Repayment Plan

The following federal loans are eligible for the Standard Repayment Plan:

•   Direct Subsidized Loans

•   Direct Unsubsidized Loans

•   Direct PLUS Loans

•   Direct Consolidation Loans

•   Subsidized Federal Stafford Loans

•   Unsubsidized Federal Stafford Loans

•   FFEL PLUS Loans

•   FFEL Consolidation Loans

Extended Repayment Plan

If payments are too high for you to manage on the standard 10-year repayment plan, you can choose the Extended Repayment Plan for your federal loans, where the term is up to 25 years and payments are generally lower than with the Standard and Graduated Repayment Plans. With this plan you can also choose between fixed or graduated payments.

If you’re eligible, an Extended Repayment Plan can provide significant relief if you are struggling to pay your monthly loan payments by lengthening your term and potentially lowering your monthly payments.

This can help keep you out of default (which is important!). But it is important to remember that lengthening your loan term usually means you will be paying significantly more interest over the life of the loan — because it will take you longer to pay off your loan — and it may not give you the lowest monthly payments, depending on your circumstances.

Student Loans Eligible for the Extended Repayment Plan

The following federal loans are eligible for the Extended Repayment Plan:

•   Direct Subsidized Loans

•   Direct Unsubsidized Loans

•   Direct PLUS Loans

•   Direct Consolidation Loans

•   Subsidized Federal Stafford Loans

•   Unsubsidized Federal Stafford Loans

•   FFEL PLUS Loans

•   FFEL Consolidation Loans

Graduated Repayment Plan

With this plan, you would still pay your federal student loans back over a 10- to 30-year period, with lower payments at the beginning of the term that gradually increase every two years.

The idea behind the Graduated Repayment Plan is that a borrower’s income will likely increase over time, but may not be much at the start of their career.

Of course, the income boost may not happen. With this plan, because interest keeps accruing on the outstanding principal balance over a longer period of time, even though you’re making payments, the longer you take to repay your loan(s), the more interest you’ll wind up paying in the end. (Remember, more payments with interest = more interest paid total.) More information about eligibility for the Graduated Repayment Plan may be found here .

Student Loans Eligible for the Graduated Repayment Plan

The following federal loans are eligible for the Graduated Repayment Plan:

•   Direct Subsidized Loans

•   Direct Unsubsidized Loans

•   Direct PLUS Loans

•   Direct Consolidation Loans

•   Subsidized Federal Stafford Loans

•   Unsubsidized Federal Stafford Loans

•   FFEL PLUS Loans

•   FFEL Consolidation Loans

Income-Driven Repayment Plans

Each of the three plans listed above (Standard, Extended, and Graduated) are considered traditional repayment plans. Income-Driven Repayment Plans , though, are different because the student loan payment amount is based upon the borrower’s income and family size.

To be eligible for an income-driven repayment plan, you’d need to go through a recertification process each year and, each year, your monthly payment could change (increase or decrease) based upon your current income and family size.

Maximum payments are set at 10% or 20% of what’s considered your discretionary income (the difference between 150% of the poverty guideline and your adjusted gross income), depending on the loan and the plan. And, there are multiple types of income-driven plans, including:

•   Income-Based Repayment Plan (IBR)

•   Pay As You Earn Repayment Plan (PAYE)

•   Revised Pay As You Earn Repayment Plan (REPAYE)

•   Income-Contingent Repayment Plan (ICR)

A significant advantage of using income-driven repayment plans is that your payment can be adjusted to accommodate a lower income. And, in most cases, if you choose one of these plans, any remaining balance after 20 or 25 years may be forgiven if repayment has been satisfactorily made.

Again, the longer you extend your loan term, the more payments (with interest) you’ll be making. Not all loans qualify for this type of program; you’ll need to be vigilant about recertifying for this repayment program and regularly provide updated info to the federal government and, if the remaining portion of the debt is forgiven, you may owe taxes on that dollar amount.

Visit the Federal Student Aid website to understand which federal loans are eligible for each type of Income-Driven Repayment Plan.

Another Option to Consider: Student Loan Refinancing

Refinancing student loans with a private lender, allows borrowers to consolidate (that is, combine) the loans. This can help make repayment convenient, because there will be just one monthly payment. And borrowers who qualify for a lower interest rate may be able to reduce the amount of money they spend in interest over the life of the loan.

You typically need a certain credit score to qualify, among other fairly standard lending qualifications (like income and employment verification, among other factors). Know that once federal student loans are refinanced with a private lender, they will become ineligible for federal repayment plans, programs like Public Service Loan Forgiveness and other borrower protections like deferment or forbearance.

Repayment Plans for Private Student Loans

The repayment plans for private student loans are set by the lender. If you have private student loans, review the loan terms or contact the lender directly to review the payment options available to you.

The Takeaway

Borrowers repaying federal student loans have three traditional repayment plans to choose from (Standard, Extended, and Graduated) and four Income-Driven Repayment Plans to choose from. When selecting a repayment plan, consider factors like your current income and expenses, potential future income, and career goals. For example, borrowers pursuing Public Service Loan Forgiveness will need to switch to an income-driven repayment plan.

At SoFi, potential borrowers may qualify for a lower interest rate on their student loans. Applicants who want to increase their cash flow, can select a longer term to lower their payments, keeping in mind that this may mean paying more in interest over the life of the loan. If the goal is to pay off debt more quickly and pay less back in interest overall, potential borrowers can pick a shorter term. Keep in mind that, as mentioned above, refinancing federal student loans eliminates them from federal borrower protections and benefits.

SoFi offers student loan refinancing options with absolutely no fees.

If you’ve decided to refinance your student loans, SoFi is here to help. Find out what rate you may pre-qualify for.


SoFi Loan Products
SoFi loans are originated by SoFi Lending Corp. or an affiliate (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license # 6054612; NMLS # 1121636 . For additional product-specific legal and licensing information, see SoFi.com/legal.

SoFi Student Loan Refinance
IF YOU ARE LOOKING TO REFINANCE FEDERAL STUDENT LOANS PLEASE BE AWARE OF RECENT LEGISLATIVE CHANGES THAT HAVE SUSPENDED ALL FEDERAL STUDENT LOAN PAYMENTS AND WAIVED INTEREST CHARGES ON FEDERALLY HELD LOANS UNTIL THE END OF JANUARY 2022 DUE TO COVID-19. PLEASE CAREFULLY CONSIDER THESE CHANGES BEFORE REFINANCING FEDERALLY HELD LOANS WITH SOFI, SINCE IN DOING SO YOU WILL NO LONGER QUALIFY FOR THE FEDERAL LOAN PAYMENT SUSPENSION, INTEREST WAIVER, OR ANY OTHER CURRENT OR FUTURE BENEFITS APPLICABLE TO FEDERAL LOANS. CLICK HERE FOR MORE INFORMATION.
Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income-Driven Repayment plans, including Income-Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. A hard credit pull, which may impact your credit score, is required if you apply for a SoFi product after being pre-qualified.
External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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Do You Have to Pay FAFSA Back?

If you’re wondering “do you have to pay back FAFSA® loans?,” what you really want to know is whether you have to pay back your federal student loans that you may be eligible for after filling out your FAFSA. In short, you will have to pay back loans you get through completing the Free Application for Federal Student Aid (FAFSA®), but other types of student aid you get through FAFSA likely don’t need to be repaid.

Aside from federal student loans, you can also use FAFSA to apply for grants and scholarships as well as work-study jobs, for which you’d get funds you usually wouldn’t need to pay back. If you have loans through FAFSA and need to pay them back though, read on for information on the three general types of federal student loans and your repayment options.

Direct Subsidized Loans

With Direct Subsidized Loans, the government (more specifically, the U.S. Department of Education) pays the interest while you are still in school at least half-time. That’s what makes them “subsidized.”

The maximum amount you can borrow depends on whether you are a dependent or an independent student, as well as what year of school you are in. However, it is ultimately up to your school how much you are eligible to receive each academic year.

Not everybody qualifies for a subsidized loan. You have to be an undergraduate (not a graduate student) demonstrating financial need and attending a school that participates in the Direct Loan Program. Additionally, the academic program in which you are enrolled must lead to a degree or certificate.

You also should check how your school defines the term “half-time,” as the meaning can vary from school to school. Contact your student aid office to make sure your definition and your school’s match completely. The status is usually based on the number of hours and/or credits in which you are enrolled.

Direct Unsubsidized Loans

You will have to pay back all the interest that accrues with Direct Unsubsidized Loans, because these loans are “unsubsidized.” That means the government doesn’t cover your interest while you’re in school like they do with a subsidized loan.

You do not have to prove a financial need in order to qualify for a Direct Unsubsidized Loan. Additionally, these loans are available to graduate students as well as undergraduate students. Again, you need to be enrolled at least half-time in a school that will award a degree or certificate.

Direct PLUS Loans

There are two types of Direct PLUS Loans:

•   Grad PLUS Loans: These are for graduate or professional degree students

•   Parent PLUS Loans: Parent PLUS Loans can be taken out by parents for as long as their qualifying child is a dependent or undergraduate student

Unlike most other loans, PLUS loans require a credit check, and you cannot have an adverse credit history . If you or your parents have bad credit, a cosigner on the loan application may be an option.

With Direct PLUS Loans, you can borrow as much as you need (subtracting the other financial aid you’re getting). However, the interest rate for PLUS loans is generally higher than it is for the other types of federal student loans.

Do I Get a Grace Period on My Federal Student Loan Repayment?

Whether you get a grace period — time after you graduate (or drop below half-time enrollment) during which you do not have to make loan payments — depends on what type of federal student loan you have, as not all federal student loans offer one. Direct Subsidized and Unsubsidized Loans offer a grace period of six months, whereas Direct PLUS loans don’t offer a grace period at all.

Grace periods are meant to give you time to find a job and organize your finances before you have to start making loan payments. They are usually one-time deals; in most cases, you often can’t get a second grace period ​once the initial one ends.

Additionally, not all grace periods are exactly alike. Different loans may offer different grace periods. Policies vary. Check with your loan servicer so that you know for sure when your grace period begins and ends.

Keep in mind that grace periods are usually not interest-free. Some loans accrue interest during grace periods, which means that the interest will “capitalize,” or be added to the principal when the grace period ends. Many students subscribe to the strategy of making interest payments even during the grace period. Doing this can ultimately lower the amount you owe, and interest payments are generally more affordable to handle than principal payments.

Also remember that loan servicers are paid by the Department of Education to handle billing and other services for federal loans. The government gives you a loan servicer; you don’t get to choose one yourself. The loan servicer you get is the one you should contact if you have questions regarding your loan.

Federal Student Loan Standard Repayment Plan

Once you graduate, your repayment plan will depend on various factors, but most of the time the government will place you on its Standard Repayment Plan . The general rule here is that you’re expected to pay off your loan over the course of a decade, and your payments will remain the same for the duration.

Before you are placed on that Standard Repayment Plan, the government gives you a chance to choose a few other repayment options (which we’ll discuss below). If you don’t choose one of those, you’ll automatically be placed on the Standard Repayment Plan.

Additional Repayment Options

Here are a couple of your other repayment options beyond the Standard Repayment Plan:

•   The Extended Repayment Plan: The Extended Repayment Plan can extend your term from the standard 10 years to up to 25 years. To qualify, you must have at least $30,000 in outstanding Direct Loans. As a result, your monthly payments are reduced, but you could be paying way more interest.

•   The Graduated Repayment Plan: Another option, the Graduated Repayment Plan lets you pay off your loan within 10 years, but instead of a fixed payment, your payments start low and increase over time. This may be a good option if your income is currently low but you expect it to increase over time.

Keep in mind that although you can choose these repayment options, you cannot refinance a federal student loan with the government on your own (you can, however, consolidate them). That’s because those interest rates are set by federal law , and they can’t be changed or renegotiated.

Difference Between Refinancing & Consolidating Student Loans

While you can’t refinance your federal loans with the government, you can do so with a private loan company. Before you consider refinancing, be sure to know the difference between refinancing and consolidating student loans:

•   Refinancing means taking out a brand new loan so that you can pay off your existing loans. To refinance, you’ll choose the loan company you feel is best, with (hopefully) better interest rates and repayment terms. Refinancing can be done via a private lender and can be used for both federal and private loans. Keep in mind that when you refinance federal loans with a private lender, you lose access to federal benefits and protections like loan forgiveness programs and repayment plans.

•   Consolidation means placing all of your current loans into one big loan. Doing this typically extends your loan term so that your monthly payment is lowered. The problem with consolidating student loans is that it could mean you wind up paying additional interest. This is because when you consolidate multiple federal student loans, you’re given a new, fixed interest rate that’s the weighted average of the rates from the loans being consolidated.

Refinancing (as opposed to consolidating) your school loans may be a good option if you have high-interest, unsubsidized Direct Loans, Graduate PLUS loans, and/or private loans. Refinancing your existing loans with a longer term can reduce your monthly payments. Alternatively, you may be able to lower your interest rate or shorten your term.

Before you apply for that refinancing plan, it’s a good idea to check your credit score, as it is an important factor that lenders consider. Many lenders require a score of 650 or higher. If yours falls below that, you may consider a cosigner on the loan.

Lenders typically offer fixed and variable interest rates, as well as a variety of repayment terms (which is often based on your credit score and many other personal financial factors). The loan you choose should ultimately help you save money over the life of the loan or make your monthly payments more manageable.

The Takeaway

If you only got grants, scholarships, or work-study funding through FAFSA, you don’t have to worry about paying FAFSA back, so to speak. But if you got federal student loans through filling out FAFSA, you will have to pay those loans back.

Luckily, you have a number of options to do so. If you have high-interest loans, consider looking into refinancing to see if you can reduce your monthly payments.

Whether you are looking to borrow for school or refinance your student loans, SoFi can help. See your interest rate in just a few minutes—with no pressure to sign up.


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SoFi Student Loan Refinance
IF YOU ARE LOOKING TO REFINANCE FEDERAL STUDENT LOANS PLEASE BE AWARE OF RECENT LEGISLATIVE CHANGES THAT HAVE SUSPENDED ALL FEDERAL STUDENT LOAN PAYMENTS AND WAIVED INTEREST CHARGES ON FEDERALLY HELD LOANS UNTIL THE END OF JANUARY 2022 DUE TO COVID-19. PLEASE CAREFULLY CONSIDER THESE CHANGES BEFORE REFINANCING FEDERALLY HELD LOANS WITH SOFI, SINCE IN DOING SO YOU WILL NO LONGER QUALIFY FOR THE FEDERAL LOAN PAYMENT SUSPENSION, INTEREST WAIVER, OR ANY OTHER CURRENT OR FUTURE BENEFITS APPLICABLE TO FEDERAL LOANS. CLICK HERE FOR MORE INFORMATION.
Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income-Driven Repayment plans, including Income-Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.

External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. A hard credit pull, which may impact your credit score, is required if you apply for a SoFi product after being pre-qualified.
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Strategies to Pay Back Federal Student Loans

The prospect of paying back your student loans may seem daunting, but there are strategies you can take to pay off your federal student loan debt. This includes choosing from the number of repayment plan options available or opting to refinance your student loans. Of course, before you start making payments, you’ll want to know when you need to pay off your loans — and how — so you can determine an appropriate plan of action.

Read on for a full explanation of the strategies that could help you when it comes time to start paying back federal student loans.

When Do You Have To Pay Back Federal Student Loans?

Before you start worrying about how to pay off your federal student loans, you should know when you have to pay them back. If you just graduated or left school, you may have some time before you’re required to start paying back your student loans.

New grads generally have a grace period of six months before they are required to start throwing their hard-earned cash at their federal student loans. The exact length of the grace period depends on the type of loan and your specific circumstances.

Direct Subsidized Loans, Direct Unsubsidized Loans, Subsidized Federal Stafford Loans, and Unsubsidized Federal Stafford Loans all have a six-month grace period. This means that if you graduate in the spring, you may not need to make federal student loan payments until around October, depending on the date you graduate. If you’re a winter grad, you can expect to start repayment around June.

Unfortunately for graduate students, Direct PLUS Loans don’t have a grace period, which means that you’re on the hook for making payments 60 days after your final loan disbursement (though you may be able to get a six-month deferment). You may also lose your grace period if you consolidate your federal student loans with the government during your grace period. One caveat — if you’re a member of the armed forces on active duty, you may be eligible to extend your grace period during a deployment.

Private student loans are a different story, as these are loans from private lenders that set their own terms when it comes to loan grace periods. This means that private student loans may not offer a grace period at all, or that it may be shorter or longer than the federal student loan grace period.

How Do I Pay Back My Federal Student Loans?

Even though you may not be required to start paying off your student loans while they’re in a grace period, you might want to think about starting payments early.

Why start making payments before they’re due? During a grace period, some loans may still be accruing interest. That means that every month you wait to start making payments is another month that the total loan amount grows larger. Starting loan payback as soon as possible may help save on those capitalizing interest costs.

Figuring out how to pay federal student loans can be confusing. Paying back federal student loans starts with getting to know your loan servicer. There are several different loan servicers throughout the country who are responsible for managing federal student loans. Luckily, most loan servicers have robust websites where you can manage your student loan payments.

Your loan servicer’s website should allow you to view your loans, choose a payment plan, and set up automatic payments. Generally, you can make payments directly through the website, which means that you can avoid having to write out a check and worrying that it will get lost in the mail on the way to your loan service provider.

Choosing a Loan Repayment Plan

One integral loan repayment strategy is choosing a student loan repayment plan. If you are paying off federal loans, you may be able to choose between a few different repayment plans depending on which best fits your financial situation, such as:

The Standard Repayment plan: The Standard Repayment plan is the default loan repayment plan for federal student loans. Under the Standard plan, you pay a fixed amount every month for up to ten years in order to pay off the full balance of your loan.

The Extended Repayment plan: Extended Repayment plans work similarly to the Standard Repayment plan, but the term of the loan is longer. Extended Repayment plans generally have terms up to 25 years. The longer term allows for lower monthly payments, but you may end up paying more over the life of your loan thanks to additional interest charges.

For qualified applicants, there are also loan repayment options that are tied to the amount of your discretionary income. With income-driven repayment plans , the amount you owe on your student loans is tied to the amount of money you make. Income-based repayment plans are generally capped at 20 or 25 years, and any remaining balance on your loan may be forgiven after that term.

While you’ll automatically be put onto the Standard Repayment Plan if you do nothing else, you may want to consider choosing a different repayment plan depending on your financial situation. For example, if you’re itching to pay off your student loans as soon as possible, the Standard Repayment plan may work for you, but if you’re worried about affording loan payments, you may decide that you’re more comfortable with an income-driven repayment plan.

Refinancing Student Loans

Another strategy you may consider for paying back federal student loans is student loan refinancing. For some grads, loan refinancing may help save money over the term of your loan.

What are the benefits of refinancing with a private lender instead of just paying off the federal loans you currently owe? Student loan refinancing combines all of your current federal and private student loans into one new loan from a private lender, hopefully with better terms.

This means that you may be able to snag a lower monthly payment or even a shorter repayment term, both of which could save some serious cash over the life of your loan — depending on the term you choose, of course.

There are downsides to refinancing though. If you refinance your federal loans, they will no longer be eligible for any federal repayment assistance, like the Public Service Loan Forgiveness Program or any federal repayment plan. You also won’t be eligible anymore for federal repayment protections and will lose any remaining grace periods.

The Takeaway

As you can see, you have a number of options for paying back your federal student loans. You will want to consider your financial situation and which options you’re eligible for in order to choose the repayment plan that makes the most sense for you.

If loan repayment plans don’t seem like the right path for you, refinancing your student loans could be an option worth exploring.

Finding the right strategy to pay off your student loans can help you take control of your finances. See if refinancing with SoFi is right for you.


SoFi Student Loan Refinance
IF YOU ARE LOOKING TO REFINANCE FEDERAL STUDENT LOANS PLEASE BE AWARE OF RECENT LEGISLATIVE CHANGES THAT HAVE SUSPENDED ALL FEDERAL STUDENT LOAN PAYMENTS AND WAIVED INTEREST CHARGES ON FEDERALLY HELD LOANS UNTIL THE END OF JANUARY 2022 DUE TO COVID-19. PLEASE CAREFULLY CONSIDER THESE CHANGES BEFORE REFINANCING FEDERALLY HELD LOANS WITH SOFI, SINCE IN DOING SO YOU WILL NO LONGER QUALIFY FOR THE FEDERAL LOAN PAYMENT SUSPENSION, INTEREST WAIVER, OR ANY OTHER CURRENT OR FUTURE BENEFITS APPLICABLE TO FEDERAL LOANS. CLICK HERE FOR MORE INFORMATION.
Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income-Driven Repayment plans, including Income-Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.

External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs. SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.

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