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Back when you signed up for your first federal student loan, you might have been grateful to learn you had 10 years or more to pay the money back. A longer loan term typically comes with smaller monthly payments — and that can be helpful when you’re just starting out and trying to make ends meet.

Once you’re feeling steadier on your feet financially, though, the idea of dumping that debt a little sooner than planned can be tempting. One way to do that is by adjusting the frequency of your student loan payments. You can make extra student loan payments each month beyond your minimum required payment.

Below we explore the merits of making weekly student loan payments vs. biweekly or monthly student loan payments.

How Do Weekly Student Loan Payments Work?

You can make weekly student loan payments through automated or manual payments every seven days. Both federal and private student loans typically require minimum monthly payments, but you can make extra payments above that amount if you wish.

If you’re required to pay $300 per month on student debt, for example, you could instead pay $100 each week. Paying at that rate would accelerate your loan payments, meaning you may pay your debt off faster and reduce your total interest costs over the life of the loan.

Here’s another example of how weekly student loan payments can work:

Let’s say a recent graduate has a monthly student loan payment of $400. That’s $4,800 a year. But now that she’s working, she realizes she can pay a little more every month. If she splits that $400 into $100 weekly student loan payments, over the course of the year she’ll pay $5,200 instead of $4,800. That’s equal to a whole extra payment for the year that can reduce her interest costs over the life of the loan.

What’s an Extra Student Loan Payment?

An extra student loan payment is when you pay more than the required amount due on your monthly billing statement. You can make extra student loan payments if you wish, but it’s important that everyone is on board regarding how those extra payments should be applied.

When you apply for student loans, you may take out multiple education loans to help cover your tuition and related expenses. You can instruct your lender to put extra payments toward principal reduction, not the next month’s payment. It may be possible to do this electronically by logging into your account and selecting how the extra amount should be allocated.

As a borrower, you can consider different repayment options. If you determine that making extra payments is right for you and your budget, you can ask your lender or loan servicer to allocate your extra payments to your higher interest loans first.

Student loan refinancing may be another way to reduce your total interest costs.

💡 Quick Tip: Ready to refinance your student loan? With SoFi’s no-fee loans, you could save thousands.

Are You Ready for Accelerated Payments?

Just about every financial strategy has pros and cons, and that applies to accelerated payments. There are a few scenarios when making extra loan payments wouldn’t necessarily be in a borrower’s best interest.

If a person is carrying $50,000 in high-interest credit card debt, for example, that debt may take priority over a student loan with a lower interest rate.

Another priority could be building an emergency fund first to handle unexpected costs — from car repairs to medical bills.

You have no obligation to pay extra, but borrowers are generally expected to repay their student loans when due. The 2023 debt ceiling bill officially ended the three-year Covid-19 forbearance, requiring federal student loan interest accrual to resume on Sept. 1 and payments to resume in October 2023.

Recommended: 6 Strategies to Pay off Student Loans Quickly

Benefits of Paying Student Loans Biweekly

Making loan payments biweekly instead of monthly can accelerate the payoff of the student debt and reduce your total interest costs over the life of the loan. Paying student loans biweekly may be right for you if you’re interested in paying more than your required amount due each month.

Aligning payment frequency with an employer’s payroll schedule (whether it’s weekly or biweekly) may help with budgeting and ensuring money is in the right bank account when your payment is due. If you’re making weekly or biweekly payments, it’s critical that you cover at least the required amount due by your scheduled due date to avoid any penalties.

If that seems like a lot of extra work and worry, autopay (also called direct debit) might be a solution to staying on top of payments. The U.S. Department of Education does not charge prepayment penalties on federal student loans, and federal law prohibits prepayment penalties on private student loans.

Whether you have federal or private student debt, paying off your education loans sooner rather than later can minimize your total interest costs without penalty.

Alternatives to Accelerated Payments

For those who aren’t quite ready to move into an accelerated payment plan, there are alternative methods that can help with getting ahead of student debt. To try a test run, you could divide your current monthly payment by 12 and add that amount to each payment whenever possible. For example, a $400 monthly payment would be about $33 extra a month. But when times are tight, you could send the regular amount.

Another approach might be to put lump sums of extra money toward loan payments spontaneously but whenever possible. (If you get a tax refund, for instance, or receive a bonus at work.)

You could also look at a federal Direct Consolidation Loan, which allows you to combine your federal education loans into a single loan with one payment. That can make repayment more manageable, but because it’s a government program, it doesn’t include private loans. And a federal consolidation loan usually increases the period of time the borrower has to repay the loans, which means one could end up paying more in interest.

If you have a stable income and solid credit, you might want to look at combining all of your student loans into a new loan with one manageable payment by refinancing with a private lender.

💡 Quick Tip: When refinancing a student loan, you may shorten or extend the loan term. Shortening your loan term may result in higher monthly payments but significantly less total interest paid. A longer loan term typically results in lower monthly payments but more total interest paid.

Income-Driven Repayment Plans

Making weekly or biweekly student loan payments may not be right for everyone. If you cannot afford voluntary extra payments on federal student loans, you may consider enrolling into a federal income-driven repayment (IDR) plan. Private student loans are not eligible for IDR plans.

All IDR plans can end with federal student loan forgiveness after 20 or 25 years, but some borrowers on the Saving on a Valuable Education (SAVE) Plan may have their loans forgiven much sooner. Borrowers with original principal balances under $12,000 can have their remaining federal loan balances canceled after 10 years under the SAVE Plan.

The SAVE Plan is the most affordable repayment plan for federal student loans, according to the U.S. Department of Education. Borrowers who earn less than 225% of the federal poverty guideline (or less than $32,805 for a single borrower and $67,500 for a family of four in 2023) don’t have to make any payments under the SAVE Plan.

For those who are required to pay, SAVE Plan enrollees beginning July 2024 will have payment amounts based on 5% of discretionary income for undergraduate loans, 10% for graduate loans, and a weighted average for borrowers who have both.

Pros and Cons of Student Loan Refinancing

Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.

With SoFi, refinancing is fast, easy, and all online. We offer competitive fixed and variable rates.

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SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Student Loan Refinance
SoFi Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org). SoFi Student Loan Refinance Loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Public Service Loan Forgiveness, Income-Based Repayment, Income-Contingent Repayment, PAYE or SAVE. Additional terms and conditions apply. Lowest rates reserved for the most creditworthy borrowers. For additional product-specific legal and licensing information, see SoFi.com/legal.

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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While on the road to repayment, there will likely be instances when you need to know your student loan account number (like if you want to change repayment plans or refinance). But you probably haven’t committed this number to memory. In fact, you might not even know how to find it.

If you need your student loan account number but don’t know how to get it, don’t worry. Read on to learn what a student loan account number is, why you need it, and how to find it.

What Is a Student Loan Account Number?

Your student loan account number is a unique 10-digit number that is given to you by your student loan provider and is used for identifying your federal student loan.

Students can use their student loan account number to look up their payments and see how much of their balance is left. This number is also used to verify a student’s identity when they are using services offered by the loan provider, such as mobile banking or trying to obtain previous statements.

Some financial institutions and banks may ask you for your student loan account number before allowing you to borrow money or open a new credit card. You’ll also need to know this number if you are considering refinancing those loans.

In addition, your student loan account number is used for tax purposes in order to verify that the student loan on a tax return is yours.

Students with private loans won’t have a federal student loan identification number associated with those loans. Instead, you’ll need to contact the lender directly in order to get account information. This includes any private student loans that were originally federal ones but were refinanced into a private loan, since those balances would now show in government records as $0.00.


💡 Quick Tip: Enjoy no hidden fees and special member benefits when you refinance student loans with SoFi.

How to Find Your Student Loan Account Number

The easiest place to find your student loan account number is on the monthly student loan statements sent by your loan provider. You should be able to find it on the upper right or left corner near your name, or somewhere in that vicinity. You can also check your e-mail account if you’re receiving your statements by e-mail.

If you don’t have access to any of your monthly statements, you can log into the Federal Student Aid website using your FSA (Federal Student Aid) ID to see your loan details. This will allow you to see your student loan account number, along with additional information about your loans.

Don’t have an FSA ID? Not to worry.

More About the FSA ID

The FSA ID replaced the Federal Student PIN in 2015, so students who haven’t taken out new student loans or haven’t logged into the Federal Student Aid website since 2015 might not have an FSA ID yet.

Students who don’t have an FSA ID can create one by visiting the who don’t have an FSA ID can create one by visiting the . Once you sign up for an FSA ID, the federal government will verify your information with the Social Security Administration. Once your information is verified, you will be able to use your FSA ID to obtain information about your federal student loans.

The site, managed by the U.S. Department of Education, can provide a convenient way to get a full picture of all your federal loans, including:

•   How many federal student loans you have

•   Their loan types

•   The original balance on each loan

•   Current loan balances

•   Interest rates on loans

•   Whether any loans are in default

•   Loan service provider’s names

•   Contact information of the loan service providers

Recommended: How Much Do I Owe in Student Loans?

Identifying Lenders

Federal student loans aren’t directly administered by the government. While the government is the lender, these loans are managed by a variety of loan servicers that take on administrative tasks such as sending bills to borrowers, creating repayment plans, and consolidating loans.

It’s important to know which servicers are overseeing your loans so you know where to send payments and who to reach out to if you have questions or need to discuss an alternative payment plan.

The U.S. Department of Education assigns loan to these companies:

•   Edfinancial : 1-855-337-6884

•   MOHELA : 1-888-866-4352

•   Nelnet : 1-888-486-4722

•   Aidvantage : 1-800-722-1300

•   ECSI : 1-866-313-3797

•   Default Resolution Group : 1-800-621-3115

As mentioned, you can find information about which entities are servicing your federal loans when logged on to StudentAid.gov. Another way to confirm a loan servicer is to call the Federal Student Aid Information Center (FSAIC)  at 1-800-433-3243.

As far as private student loans go, the lender is typically a bank, online lender, or other financial institution. Contact information should be available on the bills and other information sent to you. This private student loans guide can give you more information about how these loans work.

If these documents have been misplaced, the private lender’s information can typically be found on your credit reports. You can request a free credit report from each of the three reporting agencies — Equifax, Experian, and TransUnion — by visiting AnnualCreditReport.com. Through the end of 2023, you can receive a free copy of your reports weekly.

Finally another way to track down your private student loan lenders is by contacting your college’s financial aid office.

Paying Back Student Loan Debt

With federal student loans, there are multiple payment plans available:

•   Standard repayment plan: This is the default repayment plan, which lasts 10 years. Borrowers will typically pay less interest over time on the standard plan versus other repayment plans. However, it may not be a good choice if you’re interested in getting your loans discharged through Public Service Loan Forgiveness (PSLF).

•   Graduated repayment plan: With this plan, payments start low and increase every two years. This can help students who don’t earn a lot now but expect their income to increase. However, you’ll pay more interest over time with this plan than if you stuck with the standard repayment plan.

•   Extended repayment plan: Payments can be made during a period of up to 25 years. This can help lower monthly payment amounts, but students will pay back more interest over the life of the loan than those who use the standard or graduated repayment plans.

•   Income-driven repayment plan (IDR): There are four different IDR plans, which cap student loan payments at a percentage of the borrower’s income. These plans can be a good choice for borrowers who are seeking loan forgiveness, but they will typically pay more interest overall than under the standard plan.

To pay off student loans more quickly, one option is to put extra money toward student loans each month through larger or additional payments. By paying more toward the principal balance, you won’t just pay off your loan faster. You’ll also reduce the total amount of interest paid over the life of the loan, saving you money in the long run. It’s a good idea to contact the lender or loan servicer to ensure that any extra payments are applied to the principal as intended.

Alternatively, you could pursue certain loan forgiveness programs, such as PSLF or Teacher Loan Forgiveness.

Recommended: 7 Tips to Lower Your Student Loan Payments

Refinancing Student Loans – Pros and Cons

Another option to consider is to refinancing student loans. There are pros and cons to that strategy you’ll want to consider.

Advantages of refinancing student loans include the following:

•   Loans can be combined into one single loan and payment, which can be easier to manage.

•   You may get a lower interest rate. If you have good credit and a solid income, you may qualify for a better rate, which could help reduce what you pay over the life of the loan. You can see what you might save by using a student loan refinancing calculator.

•   Some private lenders, including SoFi, will consolidate federal and private student loans and refinance them into one loan.

•   The term length can be adjusted. A longer repayment term can help to lower the monthly payment (though you may pay more interest over the life of the loan if you refinance with an extended term), while a shorter one can help to reduce the total amount of interest paid back over the life of the loan.

Disadvantages of refinancing include:

•   Refinancing federal student loans with a private lender means that borrowers will lose access to benefits associated with federal student loans, including income-driven repayment options and loan forgiveness programs.

•   Other federal protections that will no longer apply, including deferment and forbearance, which allow payments to be temporarily reduced or paused.

•   Most federal student loans have a six-month grace period, during which you don’t have to make any loan payments. If you refinance your loan soon after graduation, you might lose out on that benefit if your private lender doesn’t offer a grace period.

The Takeaway

It’s important to know your student loan account number, which can be found on your federal loan statements or online.

This 10-digit number can be used to access loan information, use other lender services and apps, and help you figure out a payment plan.

You may also need your student loan account number when applying for a credit card or other loan, and if you decide to refinance your student loan.

Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.

With SoFi, refinancing is fast, easy, and all online. We offer competitive fixed and variable rates.

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SoFi Student Loan Refinance
SoFi Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org). SoFi Student Loan Refinance Loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Public Service Loan Forgiveness, Income-Based Repayment, Income-Contingent Repayment, PAYE or SAVE. Additional terms and conditions apply. Lowest rates reserved for the most creditworthy borrowers. For additional product-specific legal and licensing information, see SoFi.com/legal.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

Third-Party Brand Mentions: No brands, products, or companies 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.

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.

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If you borrow a student loan with a cosigner, you may want to officially remove them from the loan by applying for a cosigner release. The specific requirements for this can vary by lender but may include things like a minimum number of on-time monthly payments and a review of your credit history.

Borrowers will likely be required to file a formal application with their lender in order to release their cosigner from a student loan. Continue reading for a high-level rundown of what the process of cosigner release can look like and what other options might exist if a cosigner release is not available.

What Is a Cosigner?

The financial aid process typically begins with families filling out the Free Application for Federal Student Aid (FAFSA®) to see how much aid they’ll receive . Direct Subsidized and Unsubsidized federal loans don’t need a cosigner, but they don’t always cover the whole cost of your education. If you’re unable to get a student loan yourself, a cosigner — often a parent, relative, or close family friend — may be able to help secure funding.

Cosigners are just as responsible as the primary borrower to repay the loan. If the primary borrower doesn’t make a payment on time, the cosigner is legally required to make the payment. Late or missed payments can affect the credit score of both the primary borrower and the cosigner. If a debt goes into default and the lender hires a collection agency, that agency can pursue the cosigner to collect the debt.

Cosigners may choose to help their child or family member take out a loan when they are in college, but once the student graduates and gets a job, they may decide it’s time for them to take full responsibility for the loan.


💡 Quick Tip: Get flexible terms and competitive rates when you refinance your student loan with SoFi.

What Is a Cosigner Release, and How Do You Qualify?

A cosigner release is the process of removing a cosigner from a loan. Depending on the loan’s terms, the cosigner may be removed from the loan with a cosigner release after the student has graduated and met certain requirements as outlined by the lender. Here’s a list of the typical requirements that a primary borrower must have in order to remove a cosigner from their loan:

1. Minimum full monthly payments:

Typically, the primary borrower will have to show that they’ve made one to two years’ worth of full monthly payments, depending on the lender. Full payments include principal and interest rate payments, and they must be made on time.

2. Satisfactory credit:

The lender will generally check the primary borrower’s credit to make sure they can qualify for the loan on their own and meet minimum credit requirements. For example, they’ll be looking to make sure that the borrower doesn’t have any loans in default and that they have a good consumer credit report.

3. Employment:

Lenders may ask for proof of employment and determine whether a primary borrower is meeting minimum income requirements. Borrowers may be asked to prove income with recent paystubs, W-2s, or the borrower’s most recent tax return.

Depending on your lender, there may be other criteria you have to meet.

How to Apply for Cosigner Release

Before a lender will release a cosigner, primary borrowers must submit an application. Here is a step-by-step guide to applying for a cosigner release.

1. Check with Your Lender

First things first, if you’re unsure if the loan you have qualifies for a cosigner release, check in directly with your lender. Generally, lenders will have certain requirements that borrowers are required to meet before they can apply for a cosigner release. These may include things like making a minimum number of on-time monthly payments, establishing a strong credit history, and securing employment. Again, each lender is able to set their own criteria.

2. File an application

Once you’re confident you can meet the requirements, you will likely have to file a formal application with your lender to have the cosigner removed from your loan. Depending on the lender, you may be able to submit the application online or by mailing in a printed form. Read the application requirements thoroughly because some lenders may require supporting documentation, like a W-2 or recent pay stubs.

Once you have submitted an application with the information your lender requires, the lender might then issue a cosigner release.

Why Get a Cosigner Release?

A cosigner may want to be released from a student loan for a number of reasons, not the least of which is the flexibility they may gain from having that portion of their credit freed up.

First, their debt-to-income ratio will likely improve, which may make it easier to apply for new credit or get a new loan at a favorable interest rate. If a cosigner is looking to buy a car or get a mortgage, for example — or even cosign another loan — they may be able to do so with more favorable rates.

Cosigners with other children bound for college may want to be released from one child’s loan so they can turn their attention to funding their next child’s education.

Another reason to consider releasing a cosigner is that some private loans go into automatic default if the cosigner dies. Removing the cosigner protects the primary borrower from needing to worry that they may have to pay any remaining balance in full immediately if their cosigner dies.

Once the cosigner is released from the loan, they will no longer have to worry that their credit will be damaged if loan payments aren’t made on time, or that they may be responsible for payments should the primary borrower drop the ball.


💡 Quick Tip: Refinancing could be a great choice for working graduates who have higher-interest graduate PLUS loans, Direct Unsubsidized Loans, and/or private loans.

What Are the Limitations of Cosigner Releases?

Not all loans offer a cosigner release. And even for those that do, it can be difficult to obtain. For that reason, when you are on the hunt for an initial loan, you should read the fine print to see if the loan offers a cosigner release option. That way, you’ll know the possibility is there.

What Are the Alternatives to a Cosigner Release?

If your application for a release is rejected, there are other ways you may be able to relieve your cosigner.

One alternative that might be worth considering is refinancing your student loan(s).

When you refinance student loans, your new lender pays off your old loan (or loans) in full, replacing it with a new one. If the primary borrower can qualify for a new loan on their own, they won’t need to include the cosigner on the new loan.

If you do decide to go the refinance route, it’s worth spending a little bit of time shopping around for a lender that can help you manage your student loan debt better. For example, you could look for a lender that offers you lower interest rates, since this could cut your interest costs over the life of the loan and may save you money.

You will still need to apply for this type of loan as you would any other, demonstrating that you are capable of paying the debt off yourself. You’ll likely need to prove that you have a history of making on-time student loan payments, too. Lenders might look at your consumer credit report, debt-to-income ratio, and income, among other factors that will vary from lender to lender.

If you do qualify for a refinanced loan on your own, then only your name will be on the new loan. Then, your cosigner will no longer be responsible should you miss payments or default. Though the responsibility for repaying the loan will fall entirely on you now, being released from the old cosigned loan can be a big weight lifted off your cosigner’s shoulders.

The Takeaway

Applying for a cosigner release may require that the primary borrower meet certain lender requirements like having a full-time job and making a minimum number of on-time monthly payments. If approved, the cosigner on the loan will be officially removed and the primary borrower will be the sole borrower.

In the event that you aren’t approved for a cosigner release, you may be able to remove your cosigner by refinancing your loan. This entails applying for a new loan, potentially with a new lender. Refinancing won’t be the right choice for every borrower, and if you have federal student loans, you will forfeit any federal borrower protections, like income-based repayment plans, if you refinance them with a private lender. (Federal loans also don’t require a cosigner.) If you think refinancing might be a fit for your personal financial situation, consider SoFi. Refinancing at SoFi can be done entirely online and there are absolutely no hidden fees.

With SoFi, refinancing is fast, easy, and all online. We offer competitive fixed and variable rates.

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SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Student Loan Refinance
SoFi Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org). SoFi Student Loan Refinance Loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Public Service Loan Forgiveness, Income-Based Repayment, Income-Contingent Repayment, PAYE or SAVE. Additional terms and conditions apply. Lowest rates reserved for the most creditworthy borrowers. For additional product-specific legal and licensing information, see SoFi.com/legal.

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. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

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, products, or companies 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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In 2023, more than 43 million Americans collectively have over $1.76 trillion in student loan debt. If you are one of the millions with some form of student debt, you may have considered student loan consolidation, which allows you to combine all of your student loans into one loan with one monthly payment.

Simplifying the student loan repayment process might seem like a good idea, but there are a few things to consider before you consolidate your loans. In some cases, consolidating your loans may disqualify you from certain federal student loan repayment programs and forgiveness. But other times, consolidation can allow you to lower your interest rates or shorten the amount of time it takes you to pay off your loan.

Ahead, we review how student loan consolidation works and the pros and cons of the process.

Student Loan Consolidation Explained

Student loan consolidation is designed to combine some or all of your student loans and make repayment more manageable. There are both federal and private options when it comes to consolidating your student loans.

Private Student Loan Consolidation

Private student loan consolidation is when a lender pays off all or some of your student loan debt and creates a new loan, which you will then make payments on. This process is also known as student loan refinancing. If you consolidate or refinance through a private lender, the new loan will ideally have a lower interest rate and better terms than your previous student loans.

With a private lender, you can consolidate both federal and private loans. But if you refinance your federal loans with a private lender you will you lose access to federal student loan forgiveness programs, such as income-driven repayment plans. If you plan on using one of these programs now or at some point in the future, it’s best to hold off on consolidating federal loans through a private lender.

Federal Student Loan Consolidation

If you are hoping to consolidate federal loans only and want to keep access to federal forgiveness programs, you can consolidate with a Direct Consolidation Loan through the U.S. Department of Education.

Recommended: Types of Federal Student Loans

Consolidating through the federal student loan system doesn’t usually save you money; it simply combines multiple loans into one. Your new interest rate is a weighted average of all your loans’ interest rates, rounded up to the nearest eighth of a percentage point. Any unpaid interest on the loans you’re consolidating will be capitalized — that is, added to the principal of the new loan. There are no application fees for Direct Consolidation Loans, and the loans remain federal loans.

Consolidation may be particularly useful for borrowers who are pursuing federal student loan forgiveness or who are enrolled in one of the more flexible federal student loan repayment plans, such as an income-driven repayment plan.

You can also choose to just refinance your private loans and not consolidate both private and federal into a new private loan. If you go this route, you may be able to get the benefits of refinancing (lower interest rates, better terms) without losing the perks of having federal loans.

Before you consolidate or refinance your loans, you should consider the pros and cons of the process. Getting clarity on whether consolidation is right for you will help you make the right decision for your financial needs.


💡 Quick Tip: Get flexible terms and competitive rates when you refinance your student loan with SoFi.

Benefits of Consolidating Student Loans

There are a few reasons to consider student loan consolidation either with a Direct Consolidation Loan or refinancing through a private lender.

Simplified Repayment

Whether you choose a Direct Consolidation Loan or choose to refinance through a private lender, your loan repayment may be simplified. Managing multiple student loan payments may increase your chances of missing a payment. If you miss even one payment, you may risk damaging your credit score. Late payments may also stay on your credit profile for up to seven years.

Consolidating multiple loans into one may help eliminate some of the stress of juggling multiple loan payments and may make repayment more manageable.

Fixed Interest Rate

When you refinance your loans through a private lender, your interest rate and terms will be based on your credit score, payment history, type of loan you’re seeking, and other financial factors. While requirements may vary by lender, applicants who meet or exceed the lender’s criteria may qualify for better interest rates and terms, thus saving money over the life of the loan. Borrowers can also switch from a variable to a fixed interest rate when refinancing through a private lender.

With federal Direct Loan Consolidation, as mentioned earlier, a borrower’s interest rate is a weighted average of current loan rates rounded up to the nearest one-eighth of a percentage point, which means this doesn’t typically result in savings for the borrower. The borrower does, however, keep their access to federal loan forgiveness programs.

Flexible Loan Terms

Student loan consolidation may allow you to change the duration of your loan. If you currently have a 10-year repayment plan, for example, when you consolidate or refinance, you may choose to shorten or lengthen the term of your loan. Typically, lengthening the term of your loan will reduce your monthly student loan payment but add up to more total interest in the long run.

Drawbacks of Student Loan Consolidation

Even though there are benefits of student loan consolidation, there are also drawbacks. Here are a few considerations to be aware of before consolidating student loans.

You Can’t Lower Interest Rates on Federal Student Loans When Consolidating

If you choose the Direct Consolidation Loan, generally you won’t see any savings. Because your new interest rate is a weighted average of your current loans rounded up to the nearest one-eighth of a percentage point, you will probably pay around the same amount you would have paid if you didn’t consolidate. Further, any unpaid interest on the loan you’re consolidating will be capitalized — that is added to the loan principal.

If you extend your term, you may see your monthly payment decrease, but your total interest payments will increase.

On the other hand, if borrowers choose to refinance with a private lender, they may qualify for a lower interest rate, thus saving money over the term of the loan. They could also opt for lower monthly payments by extending their loan term. But as mentioned above, you may pay more interest over the life of the loan if you refinance with an extended term.

Possible Disqualification from Federal Repayment Programs

Refinancing federal student loans with a private lender disqualifies you from federal repayment programs, including the Public Service Loan Forgiveness Program (PSLF) and income-driven repayment plans.

Borrowers will also be disqualified from federal benefits such as forbearance and deferment options, which allow qualifying borrowers to pause payments in the event of financial hardship.

Some private lenders may have hardship programs in place, but policies are determined by individual lenders.

Private Lenders May Charge Refinancing Fees

While there is no application fee for the federal Direct Consolidation Loan, private lenders may charge a fee to refinance loans. Fees associated with refinancing student loans are determined by the lender.


💡 Quick Tip: Refinancing could be a great choice for working graduates who have higher-interest graduate PLUS loans, Direct Unsubsidized Loans, and/or private loans.

Refinancing vs Consolidation

Consolidating or refinancing student loans are terms that are thrown around interchangeably, but they actually apply to two different types of loans. A federal student loan consolidation is when you combine federal loans through a Direct Consolidation Loan. This is done by the U.S. Department of Education only. A student loan refinance, on the other hand, allows you to combine private and/or federal loans into one new loan and is done by a private lender; while this does effectively “consolidate” your loans, it’s different in some key ways from federal student loan consolidation. Below are some differences and similarities between refinancing and consolidating student loans.

Student Loan Refinancing vs Consolidation
Refinance	Consolidation
Combines multiple loans into one	Combines multiple loans into one
Can refinance federal and private loans	Can consolidate federal loans only
Private refinance lenders may charge a fee	No fees charged
Credit check required	No credit check needed
Interest rate could be lowered	Interest rate is a weighted average of prior loan rates, rounded up to nearest one-eighth of a percent
Term can be lengthened or shortened	Term can be lengthened or shortened
Will no longer qualify for federal forgiveness or repayment programs	Remain eligible for federal forgiveness and repayment programs
Saves money if interest rate is lowered	Typically not a money-saving option

Key Takeaways

Understanding the benefits and drawbacks of student loan consolidation — as well as the difference between federal student loan consolidation and private refinancing — can help you make an informed decision about repaying student loans.

If you decide to consolidate your loans via private student loan consolidation, you might want to consider evaluating a few options from different lenders, because requirements — as well as interest rates and loan terms — can vary from lender to lender.

Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.

With SoFi, refinancing is fast, easy, and all online. We offer competitive fixed and variable rates.

FAQ

Can your student loans still be forgiven if you consolidate them?

Possibly. If you consolidate your federal student loans with a Direct Loan Consolidation, you are still eligible for federal loan forgiveness programs. However, if you choose to consolidate your loans through a private lender, which is also known as refinancing, you will no longer be eligible for forgiveness programs and other federal student loan benefits.

When is consolidating student loans worth it?

Consolidating student loans is worth it if you’re looking to combine multiple student loan payments into one, or you’re looking to lower your interest rate. You can use a Direct Consolidation Loan for your federal loans and keep your access to federal benefits like income-based repayment programs or forgiveness. Another option is to refinance through a private lender, which may give you a lower interest rate and lower monthly payment, but you do lose access to federal loan benefits like forgiveness and income-driven repayment plans.

What are some advantages of consolidating student loans?

The biggest advantage of consolidating your student loans is that you combine them into one loan so you only have one payment every month. This makes it easier to track your loans. If you choose to refinance your loans with a private lender, you may also receive a lower interest rate, which can help you save money. But if you refinance federal loans with a private lender, you lose access to federal programs like forgiveness and forbearance. While people use the terms “consolidation” and “refinance” interchangeably, they are not the same thing.

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SoFi Student Loan Refinance
SoFi Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org). SoFi Student Loan Refinance Loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Public Service Loan Forgiveness, Income-Based Repayment, Income-Contingent Repayment, PAYE or SAVE. Additional terms and conditions apply. Lowest rates reserved for the most creditworthy borrowers. For additional product-specific legal and licensing information, see SoFi.com/legal.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

Third-Party Brand Mentions: No brands, products, or companies 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.

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.

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Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

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College is expensive, and for many families, it’s a group effort to pay tuition, fees, and other expenses. Both parents and children may choose to take out student loans. And in some cases, parents might also help pay off their child’s student loan debt after graduation. But before you take out your checkbook, there are some things to be considered.

Ahead, we look at ways parents can help their children pay off their loans as well as pros and cons of helping with such a big financial expense.

Things to Consider Before Paying Off Your Children’s Student Loans

While there are no rules restricting parents from paying back their children’s student loans, there are a few things to think about before you do.

1. Gift Taxes

If you choose to pay off your child’s student loan in a lump sum, you may need to file a gift tax return and pay any applicable gift tax . The person who makes the payment as a gift pays the tax, not the recipient, according to IRS guidelines. In 2023, a parent may gift their child up to $17,000 before the gift tax comes into play (or two parents could gift one child up to $34,000). Even once that threshold is reached however, a tax is not immediately triggered; rather, the excess gift is added to the lifetime gift tax exclusion, which in 2023 is set at $12.92 million. In other words, paying off your children’s student loans is unlikely to lead to tax liability on its own.

2. Retirement

Parents should consider how helping their child (or children) pay off student loans might affect their retirement plans. Because parents are closer to retirement age than their adult children, it is often difficult for parents to build back up their nest egg if they deplete some or all of it helping pay back their children’s student loans.

3. Home Equity

Some parents decide to avoid using their retirement funds by tapping their home equity line of credit instead. But before you sign on the dotted line, you might want to consider the repercussions. You will want to make sure you have the necessary time to pay back that line of credit. Many borrowers opt for a 10- or 15- year home equity loan, but that may be risky if you are only 10 years from retirement.


💡 Quick Tip: Enjoy no hidden fees and special member benefits when you refinance student loans with SoFi.

How Parents Can Help Their Children Pay Off Their Student Loans

There’s a lot of factors to consider if you want to help pay off your child’s college loans, especially if you’re nearing retirement. Here are several ways you may want to help your child repay their loan.

1. Making Small Payments During College

Although most student loans don’t need to be repaid until afer your child graduates, making small monthly payments — even as little as $25 a month — while your child is still in college may lower their debt by a few thousand dollars.

2. Making an Occasional Loan Payment as a Gift

When holidays and birthdays come around, instead of buying your child tickets to a concert or the shoes they’ve been coveting, consider making an extra payment on their student loan.

You can ask grandparents and aunts and uncles to do the same, if they are so inclined or have no idea what to give your child for their birthday or the holidays.

Any extra payments beyond the minimum monthly payment should be applied to the principal, not to their next monthly payment. By applying the payment to the loan’s principal balance, they may be able to save on interest payments in the long run. Most loan providers will allow you to make extra principal-only payments.

3. Paying Off Private Loans First

If your child has a mix of private and federal loans, you could offer to pay off the private loan while they continue to make monthly payments on their federal loan. Since private loans typically have higher interest rates, paying that loan off first might go a long way to helping your child pay back their loans quicker.

Not sure what your child’s monthly student loan payments will be? You can use our student loan calculator to estimate how much they could be paying each month. You can then decide if you want to give them money each month to go toward their payments, which in turn can help them pay off their student loans faster.

Furthermore, your child’s federal loans come with certain federal benefits such as income-driven repayment plans, deferment, forbearance, and access to certain loan forgiveness programs. Private loans don’t enjoy those same federal benefits, which may be another argument for paying off private loans first.

4. Helping with Other Expenses

If paying off your child’s student loans is too expensive, consider helping them with some of their other monthly expenses that aren’t as steep. Perhaps pay an unexpected medical bill for them, offer to buy a week’s worth of groceries, or maybe surprise them with dinner and a movie once a month.

5. Considering a Parent PLUS Loan

If your child is still in school, and you want to help them with tuition, you may want to consider a Parent PLUS loan, which is a federal student loan that is available to the parents of a dependent undergraduate student. The interest rate is 8.05% for a Parent PLUS loan disbursed between July 1, 2023, and before July 1, 2024.

While credit scores aren’t considered when determining eligibility for federal student loans, parents cannot typically qualify for these loans with “adverse credit history.”


💡 Quick Tip: Refinancing could be a great choice for working graduates who have higher-interest graduate PLUS loans, Direct Unsubsidized Loans, and/or private loans.

6. Applying for a Private Parent Loan

If you don’t qualify for a federal loan for parents, you may want to consider taking out a private loan to help fund your child’s education. Keep in mind that you will be the only borrower. This is very different from having your child named as the borrower, and you named as the cosigner.

Parents who take out loans need to be careful they aren’t taking on more debt than they can pay back in their lifetime.

7. Refinancing the Student Loans

If you have a Federal Parent PLUS loan, you might be able to save money and simplify your payments by refinancing your Parent PLUS loan.

Or you can help your child refinance their student loans by cosigning and potentially save them money over the life of the loan if you qualify for a lower interest rate. (This is usually true provided you do not extend the loan term.) Borrowers should keep in mind that refinancing their federal loans will disqualify them from all federal benefits, including income-based repayment plans and potential forgiveness.

Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.

With SoFi, refinancing is fast, easy, and all online. We offer competitive fixed and variable rates.

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SoFi Student Loan Refinance
SoFi Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org). SoFi Student Loan Refinance Loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Public Service Loan Forgiveness, Income-Based Repayment, Income-Contingent Repayment, PAYE or SAVE. Additional terms and conditions apply. Lowest rates reserved for the most creditworthy borrowers. For additional product-specific legal and licensing information, see SoFi.com/legal.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

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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