Financial Topics Archives | Page 356 of 787

Jul

2023

Can You Get Student Loans for Community College?

By Kayla McCormack | Going to College, Student Loans, student_loan | No Comments

Community colleges offering two-year programs can be a wonderful option for students looking to gain a higher education in less time. It can also be a great option for those looking to save a little cash while bettering their current skills, prepping for a four-year university, or going for an associate’s degree.

Moreover, it can often save students thousands of dollars in the long run toward the career of their dreams too. Though community college can cost far less than a four-year school, it still isn’t free. Here are a few helpful ways to gain a little financial assistance for your personal education journey.

The Government Looks at Community College the Same Way It Does a Four-Year School

Federal student loans are available for both two- and four-year colleges. The process of applying for federal aid is the same, regardless of the school, as long as the Department of Education sees it as an “eligible degree or certificate program.” Vocational, career, trade, or online schools often offer federal loan options, but it’s not a guarantee. If you’re not sure whether your school participates in federal loan programs, you can confirm with your school before moving forward.

To apply for federal aid, including student loans, a potential student must fill out the Free Application for Federal Student Aid (FAFSA®). On the FAFSA, all would-be students will list the schools they are interested in attending using the Federal School Code. The schools listed will use the FAFSA application answers to determine the types and amounts of aid a student can receive.

After submitting the FAFSA, the applicant will receive an award letter from each school listed on the FAFSA application. This will tell you what aid you qualified for. If you plan on applying for federal aid to attend community college, consider applying as early as possible.

Some federal aid is determined on a first-come, first-served basis, so the earlier you submit your FAFSA, the better position you may be in to receive aid.

Those hoping to obtain a federal loan for community college can apply for one of three: Direct Subsidized, Direct Unsubsidized, and Direct Plus. Here’s how to determine which one of those may be the best fit for your education goals.

Direct Subsidized and Unsubsidized Loans for Community College

When it comes to borrowing federal student loans, the government offers both subsidized and unsubsidized loans to assist students in covering the cost of higher education. For both subsidized and unsubsidized loans, the school a potential student hopes to attend will determine how much a student is eligible to borrow.

Direct Subsidized Loans are based on financial need and they come with a major benefit — the U.S. Department of Education pays the interest while the student is still enrolled in school at least half-time and for the loan grace period (usually the first six months after leaving school).

Direct Unsubsidized Loans are similar to subsidized loans except that they are not based on financial need, they are based on your cost of attendance and other financial aid you receive. As such, the borrower would be responsible for all accrued interest on the loan. While not required to make payments as a student, there is an option to make interest-only payments on the unsubsidized loan.

When the interest on a Direct Unsubsidized Loan is not paid during periods of deferment, such as the grace period, the accrued interest will be capitalized. That means, when graduation day comes and the grace period ends, the interest that has accumulated on the loan will be added to the principal value of the loan and you’ll be responsible for paying off both. Interest will also continue to accrue based on that new principal.

There is an annual limit to how much money undergraduate students can borrow in Direct Subsidized and Unsubsidized Loans. For example, the limit for your first undergraduate year is $5,500 for dependent students (and $9,500 for independent students).

Direct PLUS Loans for Community College

There is another option from the government, known as the Direct PLUS Loan . This loan is available to parents of dependent students. Unlike both Direct Subsidized and Unsubsidized Loans, when a person borrows via a Direct PLUS Loan, he or she will be subject to a credit check. If the person has an adverse credit history, they may not be approved to borrow the loan.

If you are a parent of a dependent undergraduate student, you can receive a Direct PLUS Loan for the remainder of your child’s college costs not covered by other financial aid.

It’s important to note when a person borrows a Direct PLUS Loan, there are fees in addition to interest. With this loan, parents can borrow up to the cost of attendance (determined by the school) minus any other financial aid received. In order to obtain this loan, parents must qualify and their credit history will be checked. Interest will also accrue.

Private Student Loans

If a student does not receive enough aid through federal student loans or maxes out his or her eligibility for federal student loans, they can seek additional funding through private student loans. Private student loans can be borrowed from banks, credit unions, or other lenders.

Each institution has its own eligibility requirements so each borrower will have to check with individual lenders to see about qualifications. Like federal loans, there is usually a limit to the amount you can borrow with private loans, which can vary by lender. The limit might be the cost of tuition, less the amount of aid the student is already receiving, for example. However, the limit on some private loans may be higher than the federal loan limit.

Furthermore, government student loans come with deadlines to apply , while students may apply for private student loans at any time. But one major downfall of private student loans is the fact that they may also come with higher eligibility requirements, like a specific credit score, to even be considered. Additionally, private lenders aren’t required to offer the same borrower protections as federal student loans, such as a grace period or income-driven repayment plans. Because of this, private student loans are generally considered only after all other financing options have been thoroughly reviewed.

Other Options For Community College Student Loans

Federal and private student loans aren’t the only options. And this is where, as a student, you can really do some homework.

Several states also offer their own student loan programs to help students. To qualify for many of these loans, a student must be a resident of the state program you’re applying for, or an out-of-state student enrolled in a college or university within that particular state. Check out each state’s student loan offerings here .

Saving Post-Graduation

Even if you went to community college, you may still graduate with student loan debt. But, there’s a way you can save after graduation as well. Upon completion of your degree (or, if you’ve already finished school), you may want to consider looking into student loan refinancing with SoFi.

This way, you may be able to get a better interest rate than what you originally qualified for or change the terms of your loan to fit your post-grad life. And you can focus on earning and saving for your future thanks to your hard-earned education.

When you refinance with SoFi there are no prepayment penalties or origination fees. Plus you’ll gain access to benefits like community events, career coaching. To see what your student loans could look like after you refinance with SoFi, take a look at our easy to use student loan refinance calculator.

Private Student Loans With SoFi

Community college students have a variety of options available to them when paying for their education. In addition to some scholarships or grants, students may use student loans, either federal or private, to help pay for college.

Private student loans can be an option for students who are looking to fill in financing gaps. SoFi offers no fee student loans with competitive interest rates available for qualifying borrowers. SoFi student loans also allow borrowers to select one of four flexible repayment plans.

Find out more about the student loan options available from SoFi. You can get a quote from SoFi in just a few minutes.

FAQ

Will student loans pay for all of college?

Student loans can be used to pay for college expenses. There are borrowing limits depending on the loan type. For example, first-year dependent students may be eligible to borrow up to $5,500 in Direct Loans. Of this, no more than $3,500 can be subsidized loans. Students may look to alternatives like private student loans to fill in gaps. The borrowing limit for federal student loans is determined by the individual lender.

How much are student loans for an associate’s degree?

Student loans for community college are available, including for associate’s degrees. In order to borrow a federal student loan, potential borrowers must be enrolled in an eligible degree granting program, as defined by the U.S. Department of Education. These programs may include associate degree programs.

What do you do if you can’t afford college?

If you can’t afford college, consider evaluating the costs and programs available at different colleges. Consider factors like location and room and board, in addition to tuition. Also fill out the FAFSA form, which allows students to apply for federal financial aid including grants and scholarships (which don’t typically need to be repaid) and federal student loans (which do need to be repaid). Consider contacting the financial aid office at your school for more personalized information.

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.

SOSL19035

Jul

2023

What Is the Maximum Student Loan Amount for a Lifetime?

By Kayla McCormack | Fresh Out of School, Student Loans, student_loan | No Comments

It can sometimes seem like there are an endless amount of student loans, but there are borrowing caps in place. Students face both annual and lifetime borrowing limits for federal student loans. The lifetime aggregate limit for undergraduate students is $57,500, of which no more than $23,000 can be in subsidized loans. For graduate students, the lifetime borrowing limit is $138,500, of which, no more than $65,500 can be in subsidized loans.

Private lenders may also have lifetime and annual borrowing limits, though those limits will be set by the lender. It’s possible to hit the maximum amount of loans allowed before finishing school, so it’s helpful to understand how much you may be eligible to borrow.

What Is the Lifetime Limit for Student Loans?

Students have the option to borrow federal student loans, private student loans, or both. Depending on factors like your year in school, there are aggregate and lifetime limits for borrowing.

Federal Student Loan Lifetime Limits

Federal loans have both annual and lifetime limits. The limits can vary by student, depending on three factors, including:

• Your year in school

• The type of loan you are eligible to borrow choose (subsidized vs. unsubsidized)

• Your dependency status

Independent students, who the U.S. Department of Education considers to be on their own financially, can borrow more than dependent students who can typically get help from their parents.

Even if you’re financially independent of your parents, the definition of an independent student is fairly strict, and if you are under the age of 24, you’ll need to confirm you qualify as an independent student. If you’re not sure what you qualify as, see your guidance counselor or an admissions counselor who may be able to help.

If you’re not sure what you qualify as, see your guidance counselor or an admissions counselor who may be able to help. Here’s how the loan limits shake out depending on your status and year in school, straight from the U.S. Department of Education:

Year In School	Dependent Students^*	Independent Students^**
First-year undergraduate	$5,500 — no more than $3,500 can be subsidized	$9,500 — no more than $3,500 can be subsidized
Second-year undergraduate	$6,500 — no more than $4,500 can be subsidized	$10,500 — no more than $4,500 can be subsidized
Third-year and beyond undergraduate	$7,500 — no more than $5,500 can be subsidized	$12,500 — no more than $5,500 can be subsidized
Graduate and professional student annual limit	N/A (all graduate and professional degree students are considered independent)	$20,500 — none can be subsidized
Lifetime limit	$31,000 — no more than $23,000 can be subsidized	$57,000 for undergraduates — no more than $23,000 can be subsidized $138,500 for graduate and professional students — no more than $65,500 can be subsidized

^*Except students whose parents are unable to obtain PLUS Loans.

^**And dependent undergraduate students whose parents are unable to obtain PLUS Loans.

Note that the lifetime limit for graduate and professional students includes the amount in federal loans you borrowed during your undergraduate studies.

Private Student Loan Lifetime Limits

If you choose to borrow private student loans, know that the annual and lifetime limit may vary by lender. That said, the annual limits typically cannot exceed the cost of attendance at your school, less any financial aid you have already received.

The total cost of attendance is a number determined by your school and typically includes tuition and fees, on-campus room and board, books, supplies, transportation, and dependent care.

As for lifetime limits, it may depend on whether you’re an undergraduate student or a graduate student. Some private lenders may offer higher limits if you’re doing an MBA or going to law or medical school, for example.

Some lenders have just one limit for all loans. But in some cases, you may even see two-lifetime limits: one for loans through the private lender and one for total federal and private loans.

So, if you’re considering borrowing from a private lender, ask about their loan limits before applying to make sure you get the funding you need.

What to Do If You’ve Hit the Maximum Federal Student Loan Amount

If you’ve reached your lifetime limit for federal student loans or you’re close to it, it’s probably time to start thinking about how you’re going to repay your student loans. Here are some options if you’ve maxed out your options for federal loans.

Consider Student Loan Refinancing

One way to make progress toward paying off your student loans and potentially save money along the way is to refinance them with a private lender (provided you haven’t reached your limit with these loans, too). Student loan refinancing can allow you to replace your current loans with a new one.

In some cases, you may qualify for a lower fixed or variable interest rate than what you’re currently paying. You could also adjust your repayment schedule to pay off your student loans faster or take some more time to fit your budget better.

With a lower interest rate, you could reduce the amount of money you spend on interest over the life of the loan. If you lengthen the term of your loan you’d decrease your monthly payments but will pay more in interest over the life of the loan.

In other words, if you refinance your student loans, you may get more flexibility with your payments as you eliminate your debt. However, it is important to note that if you refinance your student loans with a private lender, you may forfeit eligibility for federal benefits, such as student loan forgiveness.

Check Out Federal Assistance Programs

If you’ve maxed out your federal student loans because your income isn’t where you’d like it to be, you may want to take a look at federal programs like income-driven repayment plans, deferment, or forbearance instead — all of which you’d give up access to if you refinance with a private lender.

Consider a Private Student Loan

If you’ve reached your limit on federal student loans but still need some assistance paying for your tuition, you might consider taking out a new private student loan. There are options for fixed or variable private student loans, and some lenders like SoFi offer flexible repayment options. Partial, deferred, or interest-only payments put a bit less strain on your budget.

The Takeaway

There are both annual and lifetime borrowing limits for federal student loans, the lifetime limit for undergraduate students is $57,550, of which no more than $23,000 can be in subsidized loans. Private lenders may also have borrowing limits, but they will be set by the lender. Generally speaking, private student loans are limited to the cost of attendance.

SoFi is one of the leading private student loan lenders and offers fee-free private student loans with competitive interest rates for qualifying borrowers. The simple application can be completed entirely online.

Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.

Jul

2023

What Are State Student Loan Programs?

By Krystal Ndoni | Going to College, Student Loans, student_loan | Comments Off

Congrats! Your school is offering you a scholarship and grant. And, your parents are pitching in. You’ve even been awarded some federal grant aid. But it doesn’t cover the entire bill.

If this is you, loans are an option. Taking on debt is not your first choice — but a college education can be an investment in your future. You can earn potentially 55% more with a bachelor’s degree than with only a high school diploma, according to National Center for Educational Statistics data from 2021.

State student loan programs are an option to consider. They are loans provided and guaranteed by state government agencies. The loan programs are unique to each state and require specific eligibility requirements, such as state residency, to qualify. Though the institutions are non-profits or state-run, the loans are considered private.

State Student Loan Programs, Explained

State student loans are offered by state government agencies. They generally have similar requirements and benefits to federal loans: low, fixed interest rates and flexible repayment plans. Some even offer subsidized (interest-free) loans and a deferred repayment plan. Though some states may waive a credit check, other lenders do require it. Students without a solid credit history may need to consider applying with a cosigner.

State student loans agencies are also unique because they are run not-for-profit and benefit the local community. As a local entity, they tend to be more mission-minded and offer more personable customer service.

These programs may offer a strong alternative for students who have exhausted financial aid and federal student loans.

Recommended: Types of Federal Student Loans

What Are State Student Loan Programs?

State student loan programs vary in scope by state and not all states offer this option. Typically, a state’s department of postsecondary education is responsible for managing the loan program.

Also, terms and eligibility requirements differ from state to state. For instance, Georgia state offers the “Student Access Loan” through the Georgia Student Finance Authority. It’s a 1% fixed rate loan offered exclusively to Georgia residents.

Eligibility is strict, however. Prospective or current students must be enrolled in an institution from one of three university systems in Georgia (University System of Georgia, Technical College System of Georgia or Private postsecondary institutions). A maximum of $8,000 can be awarded per year: up to $36,000 in a college career.

Applying for State Student Loan Programs

Many state student loans’ first step is filling out a Free Application for Federal Student Aid (FAFSA®). According to the U.S. Department of Education, some programs are first-come, first-serve — so it may help to apply early.

To get started, find your state’s department of postsecondary education. The U.S. Department of Education maintains a list of each state’s agency . These departments will be your direct sources of information on loan programs, eligibility, and how to apply. They can direct you to state student loan programs, if any are available.

It’s best to contact your department first for the latest programs. But the Education Finance Council has a comprehensive list of all participating state agencies. It may also be helpful to connect with your financial aid office, as they may have insight into state and college-specific aid opportunities.

If your state does not offer student loans — consider out-of-state agencies that accept out-of-state students like the Massachusetts Educational Financing Authority (MEFA). Massachusetts’ state legislature created MEFA in 1982 to provide low-cost finance alternatives for families and students. They offer undergraduate loans with fixed rates from 5.35% to 7.95% APR, as of July 2023.

Recommended: FAFSA 101: How to Complete the FAFSA

What Can State Student Loan Programs Be Used For?

Borrowers use state student loans for college programs, whether professional, undergraduate, or graduate.

Your “cost of attendance” (COA) is a federal term that defines expenses from your higher ed programs. They can include tuition, room, food, books, and supplies.

State student loans should not be used for sorority and fraternity dues, vacation travel, or non-discretionary dining. Generally, it’s wise to use the minimum required to pay for educational needs in order to pay lower interest fees after graduation.

Tuition

Tuition is the price of the actual education. It covers the cost of your classes and varies by the amount of credits required in your major. Charges will also vary depending on whether the school is public or private, or if students are in-state.

Room & Board

Room and board refers to housing and meals provided on a college campus. Types of housing include dorms or university-owned apartments.

Some students cut substantial costs by living at home and commuting to school. If living at home is not an option, off-campus rentals can also be covered by state student loans. This option may be cheaper, especially if roommates split the rent.

School Supplies & Equipment

Books, laptops, and other educational equipment are also part of COA. It can cover general school items such as pens and notebooks. And, equipment includes degree-specific equipment and gear, such as Adobe software for graphic design majors or cameras for photography students.

Consider buying second-hand books or renting e-books. E-books in general are cheaper than physical textbooks.

Transportation

If your classes are not walking distance — COA covers all local transportation costs such as car, taxi, and public transit. Examples are monthly train passes or gas for your car. Loans cannot be used to purchase a vehicle.

Personal Expenses

These expenses cover daily needs such as toiletries, groceries, laundry, haircuts, and other personal matters while a college student. They can also cover your phone and internet bill.

Dependent Care Expenses

Childcare is included in COA. This includes daycare or babysitters. Determine your aid amount by the number and age of dependents, as well as hours of care needed.

Other Costs Associated with Schooling

Miscellaneous expenses are covered too. Examples might include study abroad programs and special needs equipment. COA also covers general campus fees such as orientation fees, student social activity fees, health insurance fees, and more.

State Loan Programs vs Private Student Loans

State student loan programs have minor differences from private student loans.

Benefits to state student loans may include a more competitive interest rate or a deferred payment plan. Some programs offer one interest rate for everyone — regardless of credit score. This means everyone accepted into the program is charged the same interest rate regardless of credit history. Minnesota’s Office of Higher Education, for example, offers one 6.35% fixed rate or 2.2% variable rate for all borrowers. Furthermore, the Alaska Commission on Postsecondary Education allows borrowers to defer paying off student loans six months after graduation. Private lenders typically have higher interest rates that are generally determined based on the applicant’s credit history and income, among other factors. Also, private loans may not have deferred repayment plans.

State loan programs usually have a maximum borrowing amount for students. For instance, Georgia’s program awards a maximum of $8,000 per year — while Minnesota’s program awards up to $20,000 per year. Private lenders generally have no cap.

State college loan programs have more strict eligibility requirements for borrowers. The above-mentioned state agencies in Georgia and Minnesota lend only to in-state residents. Georgia has even stricter policies: the schools must be in-state. Alaska’s program however, allows Alaskan residents to use funds for out of state tuition.

Lastly, state student loan programs are not available in every state — whereas there are several private lenders to choose from nationally.

Explore Private Student Loans with SoFi

If you’re short on college cash with financial aid and family contributions, a private student loan can cover the difference. Because they lack the borrower protections offer to federal loan borrowers, such as deferment options, they may be an alternative to consider when all other options have been exhausted.

SoFi’s private student loans are available for undergraduate and graduate students, or their parents. Plus the loans have no fees. Borrowers are also able to choose from four flexible repayment plans.

Students can choose to defer payments up to six months after graduating school, make interest-only repayments, or pay immediately. And, we offer a unique feature that releases co-signers from loan obligations after 24 on-time payments.

Interested in financing your education with a SoFi private student loan? Find out if you qualify within minutes.

FAQ

What are state student loans?

State student loans are non-federal funds offered via U.S. state higher education offices. They generally offer lower interest rates and various benefits to residents. Some state agencies lend nationally.

Are state student loans offered through the government?

State student loans are offered through state-level government agencies — not national (federal) agencies.

Photo credit: iStock/Nelson_A_Ishikawa

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 Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs. SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility-criteria for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change. SoFi Bank, N.A. and its lending products are not endorsed by or directly affiliated with any college or university unless otherwise disclosed.

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.

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.

SOPS1221046

Jul

2023

What Percentage of Parents Pay for College?

By Kayla McCormack | Family Finances, Student Loans, student_loan | No Comments

If you’re a parent, you’ve likely already begun to worry about how you’re going to pay for your kid’s college tuition. But what percentage of parents pay for college? It may be less than you expect.

What Percent of Parents Pay for Their Children’s College Education?

87% of families pay for a portion of their child’s college tuition, according to Sallie Mae’s How America Pays for College 2022. The reality is, even a percentage of the total college bill can be tough for most families to pay.

How much exactly should parents be saving? Average yearly tuition and fees have risen to an average of $39,400 for private four year institutions and $10,940 for in-state residents at public four year colleges, for the 2022-23 academic year.

Add on living costs, and some students can expect to shell over $50,000 for one year of higher education. That means that even parents who only plan to pay for part of the costs of college still must save tens of thousands of dollars to help their kiddos with college.

What Student Loans Are Available to Parents?

Parents considering borrowing a student loan to pay for their child’s education can choose between a federal Parent PLUS Loan, or explore options available at private lenders.

According to the same Sallie Mae survey, parents’ income and savings account for nearly 43% of college costs. Other sources of funding include scholarships, grants, or student loans borrowed by the student. Parents can also borrow a loan to help their students pay for college. Approximately 41% of families borrowed to help fund their child’s education.

Parent PLUS Loans

Parent PLUS Loans, as mentioned, are a type of federal student loan available for parents of dependent undergraduate students.

To apply, parents or their students must first fill out the Free Application for Federal Student Aid (FAFSA®). Then, the parent can apply for the PLUS Loan directly on the federal aid website. There will be a credit check to review any adverse credit history, but approval won’t be dependent on factors like the applicant’s credit score or debt-to-income ratio.

Parent PLUS Loans have a fixed interest rate that is set annually by Congress. Direct PLUS Loans carry an origination fee. For the 2023-24 school year, the origination fee is 4.228%

Private Parent Loans

Private loans for parents are available from private financial institutions including banks and credit unions. These lenders generally review factors like the applicant’s credit score, income, and those for any cosigner. Private lenders determine their own interest rates, terms, and repayment plans.

Compare annual percentage rates among lenders to help you decide whether a fixed or variable interest rate would be best for your financial situation. Some private lenders charge an origination fee, while others do not.

Refi now to pay off loans &
reach your goals faster with a shorter term.

Saving for Future College Costs

It can seem insurmountable to even think about saving over $40,000 (per year) for college costs on top of all your other financial responsibilities. One recommendation is to pay off your own student loans before putting significant amounts of money into college savings. Some parents find that refinancing their own student loans if they haven’t yet paid them off may allow them to save money — giving them more financial wiggle room to start saving up for future educational expenses.

How can refinancing help you save on your student loans so you can start saving for your kids’ education? Student loan refinancing allows you to trade in all your student loans for one new loan with a potentially lower interest rate and more favorable repayment terms.

But should you refinance your student loans? Consider if the benefits outweigh any potential negatives. For example, you may be able to secure a more competitive interest rate, but refinancing federal loans will eliminate them from any borrower protections or benefits. So, if you are using one of these benefits — such as pursuing Public Service Loan Forgiveness — refinancing may not make sense. Read more in SoFi’s student loan refinancing guide.

When you refinance your student loans, the lender looks at your current financial situation, including your credit score, income, and future earning potential (among other factors) to calculate an interest rate that could potentially be lower than what you might be paying to the federal government or a private student loan lender. Decreasing the interest rate may allow you to save money over the life of your loan (provided your term remains the same or is shorter).

Refinancing Options

If you are interested in refinancing student loans with bad credit, know that it may be more challenging to secure a competitive interest rate. It’s possible to find a lender and refinanced loans that meet your needs, but you may need to shop around or consider adding a cosigner to your application. A student loan cosigner is someone who agrees to take on responsibility for the loan if you, the primary borrower, is unable to make payments in the future.

If you’re unable to add a cosigner or just want to focus on refinancing without a cosigner, you might want to take some time to focus on building your credit. A few tips on building credit include making monthly payments on-time, keeping your debt-to-income ratio low, and checking your credit report regularly to remove any errors.

On top of potentially saving on interest rates, refinancing your student loans can consolidate multiple student loan payments into one monthly payment.

Furthermore, if you’re able to shorten your loan term through student loan refinancing, you could pay off your student loans even faster, further reducing the amount of interest you’d pay over the course of your loan. Those savings can be converted into savings for your kiddo’s future education — hopefully saving them from having to take out too many student loans themselves.

See what refinancing could do for your student loans by using SoFi’s student loan calculator.

Tips for Saving for College

There are a few options to help parents maximize their savings. In fact, one of the main benefits of saving up for college while your child is still fairly little is that you have time on your side.

If you can sock away even small amounts of money over time, depending on where you put it, you give that money a chance to earn interest or dividends over time — and potentially increase the amount you’ll have to put toward your child’s tuition payments.

Once you’ve decided to start saving up a college fund, you’ll have to choose where exactly you want to save that money. While some parents choose to set aside cash in a regular savings account, the relatively low interest rates on most savings accounts mean that your money may not grow much over time.

Instead, many parents consider a government-sponsored savings program in order to net some serious tax benefits, or even to start investing in order to grow money over time.

When it comes to government savings plans, you can choose from a 529 college savings plan , which offers generous tax benefits, or a Coverdell Education Savings Account, which allows you to invest in stocks and bonds to cover educational expenses.

The Takeaway

While fewer and fewer parents are ready to take on the full cost of their child’s college education, starting to save today can help you save as much as possible for future educational expenses. If you have your own student loans from your college days, one option to create some wiggle room in your budget is to refinance those loans to a lower interest rate.

If you are considering refinancing as one strategy to help you save more for your child’s college fund, take a look at refinancing student loans with SoFi. At SoFi, refinanced loans offer competitive rates to qualifying borrowers with flexible repayment options. Plus, there are no fees and the application takes only a few minutes.

Private student loans with SoFi offer competitive interest rates and have zero fees.

We’ve Got You Covered

Need to pay
for school?

Learn more →

Already have
student loans?

Learn more →

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
If you are a federal student loan borrower, you should consider all of your repayment opportunities including the opportunity to refinance your student loan debt at a lower APR or to extend your term to achieve a lower monthly payment. Please note that once you refinance federal student loans you will no longer be eligible for current or future flexible payment options available to federal loan borrowers, including but not limited to income-based repayment plans or extended repayment plans.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

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.

SOSL0722003

Jul

2023

Can International Students Get Student Loans?

Guide to International Student Loans

By Kevin Brouillard | Going to College, Student Loans, student_loan | Comments Off

Put simply, yes. However, international students have fewer financing options than most borrowers and may face some additional hurdles to securing a loan.

Going to college in the U.S. can help international students advance their education and professional goals. It’s also a big undertaking financially. For the 2022-23 academic year, tuition and fees averaged $39,400 at private colleges, $10,940 for in-state students at public colleges, and $28,240 for out-of-state students at public colleges.

Read on to learn what type of student loans you might qualify for as an international student, and how to evaluate and compare options.

What Is an International Student Loan?

International student loans are a type of private loan available to the nearly one million foreign students studying in the U.S.

The U.S. Department of Education does not issue international student loans, as federal student loans are only available to U.S. citizens and eligible non-residents.

There are many lenders to choose from for international student loans. Loan terms and eligibility requirements can vary by lender. It’s generally recommended to exhaust any opportunities for scholarships, grants, and school-based financial aid before applying for an international student loan.

U.S. citizens looking to get an education overseas have options for student loans for studying abroad, too.

Loan Options If You Are an Eligible Noncitizen

Are federal loans for international students possible? In some cases, yes. To be eligible, noncitizens must fall into one of several categories.

• You are a U.S. national or green card holder.

• You hold an Arrival-Departure Record (I-94) showing “Refugee”, “Asylum Granted”, “Cuban-Haitan Entrant”, “Conditional Entrant” (if issued before April 1, 1980) and “Parolee” (with one year paroled minimum and proof that you’re in the U.S. for a non-temporary purpose and intended to become a U.S. citizen or permanent resident).

• You or your parents hold a T-1 nonimmigrant status.

• You or a parent are a battered immigrant-qualified alien.

Other noncitizens may be eligible for other forms of federal aid. For example, citizens from Palau can apply for Pell Grants, Federal Supplemental Educational Opportunity Grants, and Federal Work-Study.

There are additional student loan requirements eligible noncitizens must satisfy to qualify for federal loans, such as completing the Free Application for Federal Student Aid (FAFSA®) and attending school at least half-time.

Recommended: FAFSA 101: How to Complete the FAFSA

Loan Options If You Are Not Eligible for Federal Student Loans

When federal loans aren’t an option, private student loans may be needed to cover the cost of attending college in the U.S.

Private student loans are offered by banks and financial institutions and are credit-based — meaning the borrower’s ability to repay the loan will be evaluated by the lender based on factors such as the individual’s credit score and income, among others.

Some lenders may require an international student to apply with a cosigner who is a U.S. citizen or permanent resident, though there are lenders who offer specialized student loans for international students.

International students might also explore parent loans to pay for college. Instead of the student, a parent, relative, or trusted individual takes out a loan for their student’s education expenses.

It could be beneficial to ask your school’s financial aid office for a list of lenders to begin your search. Browsing online may also be helpful for understanding your options as a borrower and comparing loans and lenders.

Do International Students Need a Cosigner to Get a Student Loan?

A cosigner is someone who takes on a legal obligation to pay back a loan if the borrower is unable to. Having a cosigner for a student loan reduces the risk for the lender and can help the borrower obtain financing with better terms.

With private student loans, lenders may require a cosigner if a borrower’s income and credit aren’t enough — which is often the case. According to the Entreval Private Student Loan report, during the 2022-2023 school year, 90.78% of undergraduate student loans had a cosigner while 65.88% of student loans made for graduate students had a cosigner.

As briefly mentioned, for international students, applying for student loans often requires having a U.S. cosigner. Generally, cosigners are a relative or close friend since they are on the hook for paying the loan if a borrower fails to make loan payments or defaults.

But can international students apply for student loans without a cosigner in the U.S.? Applying for a student loan without a cosigner is possible, but a no cosigner loan will likely come with a higher interest rate.

After building up credit and making regular on-time payments post-graduation, borrowers may be able to get a cosigner release. This frees the cosigner from legal liability for the loan, which is especially important if another college-bound family member needs a cosigner.

Typical Requirements for International Student Loans

Many lenders require international students to have a cosigner and study at least half-time at an eligible college to obtain a loan. Here are some typical student loan requirements that could impact approval, as well as the loan amount and terms.

• Personal credit history and score in the U.S.

• Cosigner’s creditworthiness

• Live in the U.S. while attending school

• Qualify for a student or other temporary resident visa that does not expire within six months of graduation

• Personal financial information, such as bank statements and tax returns

• Estimated future earnings

• Employment and education history

Can international students get student loans without meeting all these requirements? Student loans have varying requirements, so it’s possible to qualify with one lender and not another.

International Student Loan Repayment Terms

A loan’s repayment term stipulates how long the borrower has to pay back the loan, the monthly payment amount, and conditions for when payment starts.

A longer repayment term translates to smaller monthly payments, and vice versa. Keep in mind that the longer the term, the more interest you’ll pay over the life of the loan.

Private student loans don’t offer the same repayment options as federal loans. Whereas the standard repayment plan for federal loans has a 10 year repayment term, international student loan terms may vary depending on the lender and could range from five to 20 years.

International student loans may come with a grace period of up to six months after graduation as long as you’re enrolled at least half-time in college. Alternatively, interest-only payments could be required while enrolled in college, or repayment may be required as soon as the loan is disbursed.

International Student Loan Interest Rates

Interest is the amount charged by the lender on top of the original loan amount. With international student loans, your creditworthiness is a major factor for determining the interest rate you’ll pay.

Lenders may offer either fixed or variable interest rates. The former remains constant over the life of the loan, while the latter can fluctuate over time based on market conditions.

The main benefit of fixed-rate loans is the predictable monthly payments. The loan terms outline how much interest you’ll pay each month and over the entire life of the loan.

Later on, refinancing international student loans could help secure a lower fixed interest rate.

On the other hand, variable-rate student loans can be advantageous if you qualify for a low-interest rate or expect to land a high-paying job after graduation. If you can make extra payments early on before variable rates rise, you could potentially reduce how much you pay in the long run.

What Can You Use an International Student Loan For?

How much you can borrow is determined by the school’s cost of attendance minus any other financial aid you receive, such as scholarships and grants. If you have money left over after tuition, international student loans could be used for other education-related and living expenses, including:

• Room and board

• Health insurance

• Textbooks, laptop, and supplies

• Equipment (e.g. lab equipment)

• Off-campus housing

• Transportation and commuting costs

Generally, lenders are not monitoring how borrowers spend their student loan funds once disbursed. The rationale to avoid using loans for unnecessary expenses is that you have to pay it back with interest.

Learn More about Private Student Loans for International Students

As an international student, attending college in the U.S. can come with challenges. Besides adjusting to a new culture, foreign students can’t receive federal aid or loans unless they qualify as eligible noncitizens.

Still, international students have several options for paying for college in the U.S., including scholarships, grants, and private student loans.

When exploring private international student loans, it’s important to compare interest rates, repayment terms, and if there are origination or late fees.

With SoFi, there are zero fees for private student loans. And flexible repayment options can help find a loan that works for your budget.

Looking to study in the U.S.? Find your rate with just a few clicks.

Photo credit: iStock/Anchiy

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.

SOPS1121036

Can You Get Student Loans for Community College?

The Government Looks at Community College the Same Way It Does a Four-Year School

Direct Subsidized and Unsubsidized Loans for Community College

Direct PLUS Loans for Community College

Private Student Loans

Other Options For Community College Student Loans

Saving Post-Graduation

Private Student Loans With SoFi

FAQ

Will student loans pay for all of college?

How much are student loans for an associate’s degree?

What do you do if you can’t afford college?

What Is the Maximum Student Loan Amount for a Lifetime?

What Is the Lifetime Limit for Student Loans?

Federal Student Loan Lifetime Limits

Private Student Loan Lifetime Limits

What to Do If You’ve Hit the Maximum Federal Student Loan Amount

Consider Student Loan Refinancing

Check Out Federal Assistance Programs

Consider a Private Student Loan

The Takeaway

What Are State Student Loan Programs?

State Student Loan Programs, Explained

What Are State Student Loan Programs?

Applying for State Student Loan Programs

What Can State Student Loan Programs Be Used For?

Tuition

Room & Board

School Supplies & Equipment

Transportation

Personal Expenses

Dependent Care Expenses

Other Costs Associated with Schooling

State Loan Programs vs Private Student Loans

Explore Private Student Loans with SoFi

FAQ

What are state student loans?

Are state student loans offered through the government?

What Percentage of Parents Pay for College?

What Percent of Parents Pay for Their Children’s College Education?

What Student Loans Are Available to Parents?

Parent PLUS Loans

Private Parent Loans

Refi now to pay off loans & reach your goals faster with a shorter term.

Saving for Future College Costs

Refinancing Options

Tips for Saving for College

The Takeaway

We’ve Got You Covered

Need to payfor school?

Already have student loans?

Guide to International Student Loans

What Is an International Student Loan?

Loan Options If You Are an Eligible Noncitizen

Loan Options If You Are Not Eligible for Federal Student Loans

Do International Students Need a Cosigner to Get a Student Loan?

Typical Requirements for International Student Loans

International Student Loan Repayment Terms

International Student Loan Interest Rates

What Can You Use an International Student Loan For?

Learn More about Private Student Loans for International Students

CATEGORIES

JOIN THE COMMUNITY

Student Loan Refinancing

Personal Loans

Online Investments

Other

Refi now to pay off loans &
reach your goals faster with a shorter term.

Need to pay
for school?

Already have
student loans?

Student Loan
Refinancing

Personal
Loans

Online
Investments