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A Guide to Post Grad Internships

It’s a common misconception that internships are only available to students, but graduates can also apply for internships. Even after graduation it can be difficult to find a job, or maybe graduates aren’t sure exactly what type of work they’d like to do.

In either situation, getting an internship could help in narrowing down the type of work you want to do, gaining experience to add to your resume, and building up that postgrad network.

Benefits of a Postgraduate Internship

There are a lot of reasons why graduates might consider doing a post grad internship. Aiming to go right into a full-time job after graduating may be the right choice for some people, but there are some benefits to completing an internship first.

Doing a post graduation internship can allow graduates to explore their career options before making a long-term commitment.

Not every student is going to have an exact goal in mind for what job they’d like to have after graduating, and most degrees will give students more than one option to consider. Starting with an internship can give graduates the ability to test out a variety of jobs and also encourage them to live in different locations.

Another benefit to applying for internships instead of full-time jobs is that it may limit some of the stress of getting through the final semester.

Applying to full-time jobs could feel like a big commitment for graduates who are coping with the end of their college experience. It may feel like too big of a leap, and that’s okay!

Internships can make for a great in-between, stepping stone for graduates to use to get their feet wet and hopefully experience less stress during their final semester of college.

Internships also provide graduates with valuable hands-on experience and potentially a connection to their first full-time job. Getting a degree is important, but it isn’t the same as having previous experience in the field.

Doing a post grad internship can help recent graduates bulk up their skills and fill out their resume. Some internships will even transition into full-time jobs with the same company. For employers, it can be easier to hire someone they’ve already seen in action.

Lastly, getting an internship can also help recent graduates build up their network outside of college. Networking in college is important too, but developing relationships within the field of interest can benefit students when they start their job search after completing their internship.

So, What are Internships Like?

The first question most people are going to have when it comes to internships is, is it paid?

The answer to this question will vary by internship and by industry. For example, internships in banking, accounting, and government are often paid.

The determination for whether or not an internship will be paid is how much the student is benefitting from the experience vs. the company.

An unpaid internship is usually more learning based and it’s expected that the student will be gaining more from the internship than the company does.

Because internships are usually short-term commitments, most of them won’t provide the same benefits that full-time employees have. There may be other perks though, such as social events, vacation days, or covering the cost of relocation or housing.

How to Get an Internship

The work isn’t over post graduation, getting an internship will require some effort. One place to start is networking with professors, alumni, and utilizing the school’s career center.

Graduates can use platforms like LinkedIn or their school’s alumni database to find people in their chosen career fields to reach out to. Grads should get comfortable communicating with these people and being clear about what types of internships they’re looking for. These conversations can help open doors that otherwise may have been hard to find.

It’s also key to have a resume and cover letter ready to go. These may have to be tweaked for each internship, but if graduates are searching for internships in a specific field then they might be able to get away with making minimal changes.

Grads should get creative when listing their skills and experiences on their resume, even if they haven’t had a full-time job yet, they’ve probably picked up valuable skills at part-time jobs and in college.

Preparing for interviews will also help recent graduates snag an internship. It’s vital to do research on the company before the interview. Review things like the company’s mission, what their current projects are, and what the company culture is like. Having knowledge of the company can highlight the applicants excitement during the interview.

Preparation for interviews also includes studying common internship interview questions and prepping for those. The interview will be less nerve-racking when graduates know what to expect. It’s also helpful to prepare their own set of questions to ask the interviewer. This shows an interest in the company and commitment to learning more.

Repaying Your Student Loans

In addition to job (or internship) hunting, graduates will also have to face the reality of paying back their student loans. The exact timing for when repayments start will vary by the type of loan. Graduates should keep this in mind when applying for internships and full-time jobs.

For federal loans, there are a couple of different times that repayment may begin. Students who borrowed a Direct Subsidized, Direct Unsubsidized, or Federal Family Education Loan, have a six month grace period after graduation before they’re required to make payments.

When it comes to the PLUS loan, it depends on the type of student that’s taken one out. Undergraduates will be required to start repayment as soon as the loan is paid out. Graduate and professional students with PLUS loans will be on automatic deferment while they’re in school and up to six months after graduating.

With the repayment period coming up, graduates may consider refinancing their student loans. What does that mean? Well, refinancing student loans is when a lender pays off the existing loan with another loan that has a lower interest rate. Refinancing can potentially save graduates money, but this depends on a lot of factors.

Both federal and private student loans can be refinanced, but when federal student loans are refinanced by a private lender, they’ll lose their federal benefits like the grace period or loan forgiveness. Graduates will want to consider this before deciding to refinance any federal loans.

Refinancing student loans could help qualifying borrowers reduce their interest rate, saving them money over the life of the loan.

The Takeaway

Post grad internships can help students build their resume, expand their networks, and gain valuable job experience. Depending on factors like the company and industry, post graduate internships may or may not be paid. Students still exploring their career options may find value in pursuing a postgraduate internship.

After graduation, students will likely begin repayment on their student loans. Some students may consider refinancing.

The decision to refinance student loans is just one potentially money-saving tip that recent graduates can explore as they find their footing financially. And if the time isn’t right to refinance during a post grad internship, it may be an option students consider once that internship (hopefully) leads to a full-time job.

Thinking about refinancing your student loans? See what SoFi has to offer and get prequalified in just a few minutes.



SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC), and by SoFi Lending Corp. NMLS #1121636 , a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law (License # 6054612) and by other states. For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

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.
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 SEPTEMBER 1, 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.

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Paying for College 11 Scholarships for Women_780x440

Paying for College: 11 Scholarships for Women

It’s not a secret that attending college can get really pricey really fast. For women students looking for a bit of help in the funding department, there are tons of great grants and scholarships for women available that can help ease the financial burden of pursuing higher education and help lower student loan debt. While there are plenty of college scholarships and grants that women can apply to, the following programs are specifically designed for women applicants.

Women’s Independence Scholarship Program

The Women’s Independence Scholarship Program provides scholarship opportunities to female survivors of intimate partner abuse in order to help them regain their independence and self-sufficiency via higher education and employment.

This organization aims to support women who have been separated from an abusive partner for at least a year. Both full-time and part-time students with financial need may be eligible.

While the average award amount is about $2,000 per school term, there is no set amount for this award.

Women In Need

The Women in Need scholarship is intended for women who are completing their sophomore year of college to earn a Bachelor’s degree in accounting and are also the primary source of support for their family. The award amount is $2,000 per year for two years if renewed.

Financial need is taken into consideration as is evidence that the applicant has a goal of pursuing a degree in accounting in order to prepare for a career as an accounting or finance professional.

Moss Adams Foundation

The Moss Adams Foundation scholarship provides $1,000 graduate scholarships for women who intend to earn a bachelor’s degree in accounting and is available to minority women, women returning to school as current or re-entry juniors or seniors, and women who are pursuing their fifth year requirement through general studies or a graduate program.


Recipients must illustrate commitment to the goal of pursuing a degree in accounting in order to prepare for a career in the field and will need to provide evidence of continued commitment to this goal after they receive the award.

Jeannette Rankin Women’s Scholarship Fund

The Jeannette Rankin Women’s Scholarship Fund has scholarship opportunities and provides support for low-income women who are thirty-five or older so they can build better lives through post-secondary education.

Women who are low-income and pursuing a technical or vocational education, an associate’s degree, or a first bachelor’s degree may qualify for this scholarship.

Society of Women Engineers Scholarship Program

Women admitted to accredited baccalaureate or graduate programs that are preparing them for a career in engineering, engineering technology, or computer science can qualify for the Society of Women Engineers Scholarship Program . In 2018, the program distributed around approximately 238 scholarships that come to more than $830,000 worth of awards.

Applicants have to attend or plan to attend a school with ABET-accredited programs to qualify. Each year, these awards are available for freshmen through graduate students and award amounts from $1,000 to $16,000, some of which are renewable.

Go Girl! Grants

Education grants for women are also an option for some students looking for help paying for higher education. The Go Girl! Grants is one such example. The Girlfriend Factor has supported more than 147 local women in Coachella Valley, CA with over $500,000 in grants to help them pursue four year degrees or occupational certifications.

Applicants must be currently enrolled in school in at least two classes, 25 years of age or older, and live and go to school in Coachella Valley.

P.E.O. International Peace Scholarship Fund

If someone is looking for college scholarships for women that are international students, The Philanthropic Education Organization (P.E.O) hosts the International Peace Scholarship Fund which has been providing scholarships for women from other countries, who are pursuing graduate study in either the United States or Canada, since 1949. This scholarship is based on financial need and the maximum award amount is $12,500.

P.E.O. STAR Scholarship

The Philanthropic Education Organization also offers the P.E.O. STAR Scholarship , which was established in 2009, in order to provide scholarship opportunities to high school senior women who plan to attend an accredited postsecondary educational institution in the United States or Canada in the upcoming academic year.

This scholarship is non-renewable and offers awards of $2,500 that must be used in the academic year that directly follows high school graduation. These funds can be used for expenses like textbooks, tuition, fees, and room and board.

P.E.O. Program for Continuing Education

College grants for women are also available through P.E.O. who offers one-time need based grants to women completing a degree or certification needed to improve or gain skills that lead to employment. Recipients of the P.E.O. Program for Continuing Education must be citizens or legal permanent residents of the United States or Canada and the maximum grant is $3,000.

Soroptimist Live Your Dreams Award

Annually, Soroptimist distributes over $2.8 million in education awards to around 1,700 women from around the world, more than half of which are survivors of domestic violence, trafficking, or sexual assault. Recipients of the Soroptimist Live Your Dreams Award have overcome obstacles such as poverty, teen pregnancy, and drug or alcohol addiction.

The award is intended to help recipients offset costs associated with attaining a higher education. This includes costs like textbooks, childcare, tuition, and transportation.

Patsy Takemoto Mink Education Scholarship for Moms

Moms are in luck! There are specific scholarships for moms available. Mothers can apply for the Patsy Takemoto Mink Education Scholarship for Moms . Scholarship award availability and amounts can vary, but for reference, in 2020 the Patsy Mink Foundation offered five Education Support Awards at amounts of up to $5,000 per recipient in order to assist low-income women with children in pursuing higher education or training.

Managing Student Loan Debt that Scholarships Didn’t Cover

Hopefully there are some appealing gift aid options on this list that can help pay for higher education expenses! But even with the help of scholarships and grants, paying for college in full before graduation day can be challenging. Women with a lot of student loan debt may want to consider their student loan refinancing options to help lighten their load.

When a borrower refinances their student loans, they are taking out a new loan with a new interest rate and/or a new term. Ideally the new interest rate will be lower, making it easier and more affordable to pay off student loan debt.

It’s possible to refinance both federal and private student loans through SoFi student loan refinancing. Refinancing can be a good option for graduates who are struggling to pay down high-interest unsubsidized Direct Loans, Graduate PLUS loans, and/or private loans.

While there are some great benefits associated with refinancing student loans, it is worth noting that when a student refinances a federal loan into a private one, they lose access to certain federal protections such as public service forgiveness and economic hardship programs.

The Takeaway

Scholarships can be supremely helpful for students trying to pay for college. There are a variety of scholarships available specifically for women. In addition to the scholarships listed above, there may be opportunities available for women at a local level or, or at the college or university the student attends. Check the school’s financial aid website.

There are also online databases that can help students find scholarships to apply for.

Sometimes, paying for school entirely with scholarships isn’t possible. Students who borrowed student loans may be interested in refinancing them if they’re able to qualify for a lower interest rate or more competitive terms.

Learn more about potential refinancing rates today.



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.
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 SEPTEMBER 1, 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.

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Pros & Cons of Postbaccalaureate Programs

Often seen as a stepping stone between an undergraduate and graduate program, postbaccalaureate programs can help prepare students for a new or different area of study. But, more than just a leg up, a postbaccalaureate program can be a major financial commitment—anywhere between $15,000 and $45,000 a year.

So, just what is this program, and how can it benefit students? Read on to learn the benefits, drawbacks, and financing behind a postbaccalaureate degree.

What is a Postbaccalaureate Degree?

A postbaccalaureate degree or program is typically one or two years of study beyond a bachelor’s degree. Students may enroll in a postbaccalaureate program for a variety of reasons, including:

•   Completing a second bachelor’s degree.
•   Working towards a graduate certificate.
•   Taking prerequisite courses required for admission into a graduate program.

A postbaccalaureate program isn’t a graduate degree, but students may enroll in the one to two-year programs before heading off to a grad program.

Applying to a postbaccalaureate program will differ from school to school, but students can generally expect to submit their transcripts, as well as test scores, recommendations, and an essay.

Sometimes called post-bacc, these programs are popular among college graduates who hope to enroll in medical school. According to the American Association of Medical Colleges, postbaccalaureate medical programs focus on science, biology, and other subjects required before med school.

Here’s why post-bacc programs might help a student hoping to apply to medical school:

•   It offers the appropriate prerequisites. If a student wasn’t on a pre-med track in undergrad, but they decide they want to pursue a graduate program in medicine, a post-bacc program makes it easier to take all the required courses before applying to med school.

While a student may have studied the humanities in their undergrad and taken a few biology introduction courses, a post-bacc can help them take the advanced courses required before a student even enters med school.

•   It gives them an opportunity to improve their grades. If a pre-med student graduated with a low GPA, they might elect to retake some of the courses in a post-bacc program to boost their numbers. It gives them not only a chance to review material they might’ve missed but also a way to enhance their application with better grades.

Similarly, if someone is considering a career change into medicine, they may be required to take courses again before applying to med school. That’s because some schools have expiration dates on courses accepted. Other schools sometimes give preferential treatment to students who have completed their pre-reqs more recently.

•   It can help strengthen an application. If a student is reapplying to medical school, they might first attend a post-bacc program to get an edge up on the competition.

•   It can be a supporting supplement for students with weaker MCAT scores. If a student has taken the MCAT multiple times with borderline scores, getting strong marks in a post-bacc program can be a helpful ace up their sleeve in the application. It can show a commitment to the area of study, despite low test scores.

Going to a post-bacc program might be the right fit for some students looking to enter a medical graduate program, but it by no means is a requirement.

Pros of a Postbaccalaureate

A postbaccalaureate program can offer many benefits for the right student. Here are some of the pros they can expect on their way to a graduate program:

•   Flexible studying. Postbaccalaureate students have a lot of flexibility in the program. They can usually choose to study full time or part time while they work, based on their availability and schedule. Full time programs are typically a year long, and part time programs take closer to two years.

•   Linkage programs. Many postbaccalaureate programs are housed within a medical school . While participating in the school’s postbaccalaureate program won’t guarantee admission in its medical program, it could give a student a leg up in the application process.

•   MCAT prep. Some, but not all, postbaccalaureate programs include MCAT tutoring and prep in admission and pricing. For some students, this can be a great prep opportunity or way to raise test scores.

•   Networking and experience. In addition to courses, some postbaccalaureate programs will also offer speciality programming and networking opportunities for students. This can be an opportunity to learn more about medical specialties from events, or network with fellow students.

•   An introduction, without the long term commitment. A postbaccalaureate program can give students just a taste of what medical school might be like. However, instead of studying for years, it could be just a couple months or two years at most. If a student decides med school just isn’t for them during a postbaccalaureate program it’s less time and money spent.

Cons of a Postbaccalaureate

While a post-bacc program will offer many benefits, these programs do have their fair share of drawbacks. Consider these cons before attending a postbaccalaureate program:

•   Not all programs offer federal aid. Postbaccalaureate programs can be pricey, and when it comes to aid, some students will be on their own to find a way to pay . Some, but not all, post-bacc programs will have federal aid packages.

•   They could be overkill. While postbaccalaureates can be a great refresher on subjects for students, the demanding curriculum could be too demanding academically and financially. It helps to crunch the numbers. In some cases, students might choose simply to take a few prerequisite courses at a community college instead of paying for a post-bacc program.

•   Losing out on experience. Postbaccalaureate programs offer their own benefits and experience, but enrolling in could mean missing out on real-world experiences or work, especially if done full time.
•   Post-bacc programs aren’t all built the same. Students shouldn’t expect the same experience from every post-bacc program. Different schools will offer different focuses and programs. Some are more geared towards enhancing a student’s academic record, while others are actively seeking to engage economically disadvantaged or underrepresented students. The American Association of Medical Colleges has a full catalogue of programs across the country.

•   It doesn’t guarantee admission. Post-bacc med programs can give students a leg up when it comes to boosting their GPAs and MCAT prep, but they are not a guarantee that a student will gain admission to medical school. If a student is considering enrolling in a postbaccalaureate program solely for admissions purposes, they might want to rethink their motivation.

The Takeaway

Postbaccalaureate programs are programs beyond undergraduate school but do not result in a graduate degree. They are often used as a stepping stone for people who are making a career transition or are interested in pursuing higher education, such as medical school.

The choice to enroll in a post-bacc program is deeply personal, just like how a student decides to pay for school. Whether or not a person chooses to head straight into a postbaccalaureate program immediately after undergrad or not, keeping an eye on their student loans is important.

Depending on a student’s loan structure, students may be expected to make loan payments while enrolled in a post-bacc program.

Some students may find that refinancing student loan debt can help them reduce their interest rates. Refinancing federal student loans eliminates them from federal benefits like deferment so it’s not an appropriate option for everyone.

But for students interested in refinancing, SoFi offers flexible terms and no hidden fees.

Post-bacc or not, students shouldn’t be stuck with big monthly student loan payments. Learn more about refinancing with SoFi.



SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC), and by SoFi Lending Corp. NMLS #1121636 , a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law (License # 6054612) and by other states. For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

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.
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 SEPTEMBER 1, 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.

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Defaulting on Student Loans: What You Should Know

“Student loan default” might be about the scariest combination of words possible. More young people than ever are starting their careers with large amounts of student loan debt, and for some, figuring out how to make the required monthly payments can be a struggle.

Student loan default is basically just a term for when you completely stop paying your student loans. You get a bill, hide it under the mattress, and go back to binging true crime TV—and that pattern repeats for several months until your student loan provider turns your debt over to a collection agency.

To get more technical, defaulting on federal student loans is a process that takes place over a period of non-payment . When you first miss a payment, the loans are delinquent but not yet in default. At 90 days past due, your lender can report your missed payments to credit bureaus. And when you reach 270 days past due, your student loans are officially in default.

For private student loans, the terms for defaulting may be different. Private student loans generally go into default after three missed payments or 120 days. Private lenders may also place student loans in default if the borrower declares bankruptcy, passes away, or defaults on another loan. Terms may vary by lender, so if you have private student loans, double-check how they define default.

Defaulting on your student loans can have serious consequences, but there are ways to avoid defaulting on your student loans or recover if your loans are currently in default. If you’re worried about student loan default, the most important thing you can do is educate yourself on what it is, and how to avoid it.

What Happens When Your Student Loans Default

1. Collection Agencies Might Come Knocking

When a borrower defaults on student loans, the lender may eventually turn the debt over to a collection agency. The collection agency will then attempt to recover the payment, typically bombarding you with frequent letters and phone calls. Collection agencies also attempt to determine what other assets, including bank accounts or property, that would allow you to pay your debt. On top of dealing with regular calls from debt collectors, you will also be responsible for paying any additional fees the collection agency charges on top of your student loan balance.

2. Loan Forgiveness and Forbearance Options Are No Longer on the Table

Student loan default on federal loans means that the federal government can revoke your access to programs that might make it easier for you to pay your loans, including loan forgiveness or forbearance. This means that even if you qualify for something like the Public Service Loan Forgiveness program, you could be rendered ineligible if you let your loans go into default.

Additionally, borrowers in default lose eligibility for all future types of federal financial aid.

3. Your Credit Score Might Be Impacted

Once your student loans are in default, the lender or the collection agency will report your default to the three major credit bureaus. This means that your credit score could take a hit. A low credit score can make it harder for you to get a competitive interest rate when borrowing for other needs, like a car or home loan. But it’s worth noting that having loans in default can make it difficult to buy or sell assets like real estate at all.

4. You Might Have to Give up Your Tax Refund, or a Portion of Your Wages

If your lender or a collection agency can’t recover the amount owed, they can request that the federal government garnish your tax refund and even some of your income. For example, if you filed your taxes and were eligible for a refund, the government would instead take that refund money and apply it toward your defaulted student loan balance. On top of that, the government can garnish your wages, which means that they can take up to 15% of each paycheck to pay back your loans.

How Can You Get Student Loans Out of Default?

Just like you can’t ignore the check engine light for too long before you end up with smoke billowing out from under your hood, ignoring student loans in default is going to make things worse. The good news is that there are ways to get your student loans out of default.

First, stop avoiding those collection calls. If your student loan provider or a collection agency is calling, your best bet is to meet your lender or the agency head-on and take charge of the situation. The lender or the collection agency will be able to talk through the repayment options available to you based on your personal financial situation. They want you to pay, which means that they might be able to help find a payment plan that works for you.

The lender may be able to offer a variety of options tailored to your individual circumstances. Some of these options might include satisfying the debt by paying a discounted lump sum, setting up a monthly payment plan based on your income, consolidating your debts, or even student loan rehabilitation for federal loans. Don’t let your fear stop you from reaching out to your lender or the collection agency.

How to Avoid Defaulting on Student Loans

Of course, even if you can get yourself out of student loan default, the default can still impact your credit score and loan forgiveness options. That’s why it’s generally best to take action before falling into default. If the student loan payments are difficult for you to make each month, there are things you can do to change your situation before your loans go into default.

First, consider talking to your lender directly. The lender will be able to explain any alternate payment plans available to you. For federal loans, borrowers may be able to enroll in an income-driven repayment plan. These repayment plans aim to make student loan payments more manageable by tying them to the borrower’s income. This can make the loans more costly over the life of the loan, but the ability to make payments on time each month and avoid going into default are valuable.

Is Refinancing an Option?

Refinancing student loans could potentially help you avoid defaulting on your student loans by combining all your student loans into one, simplified new loan. When you refinance, qualifying borrowers may be able to secure a lower interest rate or loan terms that work better for their situation.

If a borrower is already in default, refinancing could be difficult. When a student loan is refinanced, a new loan is taken out with a private lender. As a part of the application and approval process, lenders will review factors including the borrower’s credit score and financial history among other factors.

Borrowers who are already in default may have already felt an impact on their credit score, which can influence their ability to get approved for a new loan. In some cases, adding a cosigner to the refinancing application could help improve a borrower’s chances of getting approved for a refinancing loan. Know that if federal student loans are refinanced they are no longer eligible for federal repayment plans or protections.

The Takeaway

Student loan default can have serious negative effects on your credit score and financial stability. If you’re worried about defaulting on your student loans, or you have already defaulted, consider taking immediate steps to remedy the situation before it gets worse. Contact your lender or servicer to learn about options available, and consider refinancing your loans to secure a lower interest rate or monthly payment.

If you’re ready to take control of your loans, learn more about how SoFi student loan refinancing may be able to help.



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SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC), and by SoFi Lending Corp. NMLS #1121636 , a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law (License # 6054612) and by other states. For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

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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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 SEPTEMBER 1, 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.

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
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What is Revolving Debt_780x440

What is Revolving Debt?

Although you have to pay back any money you owe, not all debt is created equal. There’s installment debt, like an auto loan, mortgage, or student loan, which is paid off in installments. Then there’s revolving debt, which applies to things like credit cards and home equity lines of credit.

Non-revolving and revolving debt affect your credit score differently and can affect your life differently—especially if you get in a hole of revolving debt that’s hard to get out of.

Americans averaged more than $1 trillion in outstanding revolving debt in the past few years, according to the Federal Reserve. The key to managing revolving debt? Understanding how it works and why it’s easy to take on too much.

A Closer Look at Revolving Debt

People often use the term “revolving debt” to mean a credit card balance that is carried over from month to month—and while a lot of revolving debt is carried over and not paid off in full, that isn’t technically the definition of revolving debt.

Revolving debt encompasses all debt that isn’t a set loan amount for a set period. Instead, the amount you owe, and minimum payment required, on, say, a credit card or home equity line of credit changes as you pay some off and take on more debt—like a revolving door.

You can choose to make the minimum payments required by the credit issuer, pay off the entire balance, or pay some amount between the minimum and the total balance. If you don’t pay off the full balance when it’s due, then you will ultimately end up paying more because your balance will accrue interest and finance charges.

For example, if you have a $3,000 balance on your credit card at a 16% interest rate and you make a $100 payment monthly, you’ll take 39 months to pay off the balance and ultimately pay $857 in interest.

Of course, if you continue to charge more to that credit card at the same time you pay only minimum monthly payments toward the existing debt, then it’ll take even longer to pay off.

That’s one of the quiet dangers of revolving debt: If you haven’t reached your limit, you can continue to borrow from your credit line while you still owe money, which adds to your debt and to the amount of interest you’ll have to pay.

And if you don’t pay off the balance in full when it’s due, the interest you owe will be added to your balance and accrue more interest.

What Is Installment Debt?

Installment debt is a loan for a set amount with set payments. Also called non-revolving credit, it can’t be used again when it’s paid off.

Once you pay off a home loan or car loan, for example, it’s closed, and you’d have to reapply for a new loan to borrow more.

When you take on installment debt, you agree to a set payment schedule and a fixed interest rate (or in some cases a variable interest rate that is established in your initial contract). You then make monthly payments until the loan is paid off.

Typically, secured installment debt is considered lower risk to the lender than revolving debt and therefore has lower interest rates. You’re also usually able to borrow larger amounts, depending on your credit history and income, because secured installment debt is often tied to the collateral that backs the loan, such as the car or house the loan is financing.

Installment debt may also affect your credit score differently.

How Each Kind of Debt Affects Your Credit Score

Both installment debt and revolving debt are factored into your credit score. In fact, your credit mix—meaning the different types of debt you carry—determines 10% of your FICO® score .

If you miss a payment on either installment or revolving debt, it could affect your credit score. (A late payment can’t be reported to the credit reporting bureaus until it is at least 30 days past due.)

Then there’s your credit utilization ratio —which means the amount of debt you owe in relation to the amount of credit available to you. If you’ve maxed out all your credit cards, for example, that could be a problem. However, using credit cards to take on small amounts of debt and then pay it all off can help build up your credit score.

Lenders consider revolving credit as much more reflective of how you manage money than installment loans. While having large existing loans can certainly affect the amount banks are willing to lend you, installment debt doesn’t affect your credit utilization ratio as much as revolving credit because there isn’t a larger line of credit tied to the loan.

That means that in order to maintain a healthy credit score, a borrower may choose to focus on paying off revolving debt and not taking on more in the meantime. If you’ve gotten into a revolving debt trap, with your existing credit cards accruing interest and adding to what you owe, then there are a few options to get out of revolving debt.

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Getting Out of Revolving Debt

Revolving debt can be hard to get out of because the interest and finance charges keep adding to your balance.

There are a few ways to ease revolving debt, however. The simplest, though in some ways the hardest, is to make a payoff plan. That requires you to plot out how much you can afford to pay each month and calculate how long it’ll take to pay off what you owe.

One strategy is to pay off the debt with the highest interest rate first and then perhaps consolidate remaining debt to a lower interest rate.

In order to consolidate credit card debt, or really any kind of revolving debt, at a lower interest rate, there are at least two options: balance transfer credit cards and personal loans. (Personal loans are unsecured, meaning they’re not tied to collateral like a house or car. Secured debt is, well, secured by an asset.)

Balance transfer credit cards, though, are simply another form of revolving debt and can reopen that cycle, whereas personal loans are a form of installment debt.

The Takeaway

Credit cards are one of the most common forms of revolving debt: You charge some, pay some or all off, and so on. But lots of people get caught in a revolving debt trap if they don’t pay balances off in full each month. A lower-interest personal loan is one possible escape route.

Seeking a SoFi credit card consolidation loan is straightforward. You can apply for an amount from $5,000 to $100,000 and use it for a variety of expenses—in this case, to pay down existing high-interest debt.

And a SoFi fixed-rate personal loan comes with no application fee, origination fee, or prepayment penalty.

It’s easy to find your rate.
 



SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC), and by SoFi Lending Corp. NMLS #1121636 , a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law (License # 6054612) and by other states. 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.
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.
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.
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
.

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