Student Loans Archives

Aug

2026

Student Loan Forgiveness Tax Bomb, Explained

Do You Have to Pay Taxes on Forgiven Student Loans?

By Jennifer Calonia | Fresh Out of School, Student Loans, student_loan | Comments Off

Table of Contents

Types of Student Loan Forgiveness Programs
Which Student Loan Cancellations Are Not Federally Taxed?
Which Student Loan Cancellations Are Federally Taxed?
Which States Tax Forgiven Student Loans?
How to Prepare for Taxes on Forgiven Student Loans
What If I Can’t Afford to Pay the Taxes?
FAQ

The Internal Revenue Service (IRS) generally requires that you report a forgiven or canceled debt as income for tax purposes. But tax on student loan forgiveness is a different matter.

The American Rescue Plan (ARP) Act specified that student loan debt forgiven from 2021 to 2025, and incurred for postsecondary education expenses, would not be counted as income and therefore would not incur a federal tax liability.

This included federal Direct Loans, Family Federal Education Loans (FFEL), Perkins Loans, and federal consolidation loans. Additionally, nonfederal loans such as state education loans, institutional loans direct from colleges and universities, and even private student loans may also have qualified.

Following the expiration of the ARP Act, the taxation of forgiven student loans varies by state, as some states still count canceled student loans as taxable income. Read on for more information about taxes on student loans, including which forgiven student debt is taxable and by whom.

Key Points

• Because of the American Rescue Plan Act, student loans forgiven between 2021 and 2025 were exempt from federal taxation.

• Five states — Arkansas, Indiana, Mississippi, North Carolina, and Wisconsin — still tax forgiven loans.

• Use a student loan forgiveness tax calculator to estimate potential state tax liability.

• Set aside monthly payments to save for potential tax bills on forgiven student loans after 2025.

• Explore the student loan interest deduction to help reduce federal taxable income.

Types of Student Loan Forgiveness Programs

Federal student debt can typically be canceled through an income-driven repayment plan (IDR) or forgiveness programs. However, recent changes have affected certain IDR plans, including the SAVE plan, which was terminated following a court order in March 2026. You can find out more about this situation on the Federal Student Aid (FSA) website.

Here are some common federal forgiveness programs and how they typically work.

Public Service Loan Forgiveness (PSLF)

If you’re employed full-time for the government or a nonprofit organization, you may be eligible for Public Service Loan Forgiveness for federal student loans such as federal Direct Loans.

After you make 120 qualifying payments under an income-driven repayment plan for an eligible employer, the PSLF program forgives the remaining balance on your federal student loans. You can get more details about PSLF on the FSA website.

Income-Driven Repayment (IDR) Forgiveness

IDR options generally offer loan forgiveness after borrowers make consistent payments for a certain number of years.

On an IDR plan, how much you owe each month is based on your monthly discretionary income and family size. These are the types of IDR plans:

• Repayment Assistance Plan (RAP): RAP is a new IDR option implemented in July 2026. It bases monthly payments on your adjusted gross income, ranging from 1% to 10%. Your monthly payment amount adjusts as your income changes, and any remaining balance after 30 years will be forgiven.

• Income-Based Repayment (IBR): With IBR, payments are generally about 10% of a borrower’s discretionary income, and any remaining balance is forgiven after 20 or 25 years.

• Pay As You Earn (PAYE): The monthly payment on PAYE is about 10% of a borrower’s discretionary income, and after 20 years of qualifying payments, the outstanding loan balance is forgiven. However, note that PAYE will be discontinued on July 1, 2028, after which borrowers will have to switch to another plan.

• Income-Contingent Repayment (ICR): The monthly payment amount on ICR is either 20% of a borrower’s discretionary income divided by 12 or the amount they would pay on a repayment plan with a fixed payment over 12 years, whichever is less. After 25 years of repayment, the remaining loan balance is forgiven. Like the PAYE plan, ICR will end on July 1, 2028.

To be eligible for each of these plans, besides RAP, you must not have received any new loan, including a new consolidation loan, on or after July 1, 2026.

Teacher Loan Forgiveness

With Teacher Loan Forgiveness (TLF), teachers who have been employed full-time for five consecutive years at an eligible school and meet certain other qualifications may be eligible to have up to $17,500 of their federal Direct Subsidized and Unsubsidized Loans and federal Stafford Loans forgiven.

Recommended: Do Student Loans Count as Income?

Which Student Loan Cancellations Are Not Federally Taxed?

When it comes to student loan forgiveness and taxes, under the provisions of the ARP Act, private or federal student debt for postsecondary education that was forgiven in the years of 2021 through 2025 was not federally taxed. This meant that these borrowers were not required to report their discharged loan amount as earned income, and the forgiven amount is not taxable.

Beyond the special five-year window of tax exemption provided by the ARP Act, participants in the Public Service Federal Loan program who receive forgiveness don’t have to pay taxes on their canceled loan amount. The PSLF program explicitly states that earned forgiveness through PSLF is not considered taxable income.

Which Student Loan Cancellations Are Federally Taxed?

Borrowers who receive loan cancellation after successfully completing an income-driven loan repayment plan can generally expect to pay taxes. However, those whose debt was discharged in the years 2021 through 2025 do not need to pay federal taxes on their forgiven loans due to the ARP Act.

Forgiven amounts that are taxable are treated as earned income during the fiscal year they were received. Your lender might issue tax Form 1099-C to denote your debt cancellation.

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

Which States Tax Forgiven Student Loans?

Typically, states follow the tax policy of the federal government. But some states have announced that their residents must include their forgiven or canceled student loan amount on their state tax returns.

As of 2026, the eight states that say certain forgiven loans are taxable are:

• Arkansas (except for loans forgiven through PSLF)

• Indiana (except for loans forgiven through PSLF, TLF, and certain other programs)

• Mississippi

• North Carolina

• Wisconsin (except for loans forgiven through PSLF and TLF)

Other states have varying tax laws, so it’s important to consult a qualified tax professional who is knowledgeable about forgiveness of student loans in your state to confirm the latest information on how much you owe.

How to Prepare for Taxes on Forgiven Student Loans

If you’re anticipating a tax liability after receiving loan forgiveness, there are a few steps you can take to get ready.

Step 1: Calculate Your Potential Tax Bill

The first step when preparing for a student loan forgiveness tax bill is calculating how much you might owe come tax season. This can be influenced by factors including the type of forgiveness you’re receiving and the forgiven amount.

To avoid sticker shock, you can use a student loan forgiveness tax calculator, such as the Loan Simulator on StudentAid.gov. It lets you see how much of your student loan debt might be forgiven based on your projected earnings.

Step 2: Choose the Right Plan

Although IDR plans are not currently accepting applications, they are designed to help keep borrowers’ monthly payments to a manageable amount while they’re awaiting loan forgiveness. All of these repayment plans calculate a borrower’s monthly payment based on their discretionary income and family size.

Step 3: Prioritize Saving

If you’re expecting loan forgiveness after 2025, it might be beneficial to start allocating extra cash flow to a dedicated tax savings fund now. Incrementally setting money aside over multiple years can ease the burden of a sudden lump-sum tax bill down the line.

Another way to potentially save some money is to take the student loan interest deduction on your taxes each year, if you qualify. The deduction, which is up to $2,500 annually, can reduce your taxable income.

You’ll need your student loan tax form to make sure you’re eligible for the deduction. The form should be sent to you by your loan servicer or lender. You’ll file the form with your taxes.

What If I Can’t Afford to Pay the Taxes?

If you can’t afford to cover an increased tax bill, contact the IRS to discuss your options. Inquire about payment plans that can help you pay smaller tax payments over a longer period of time. However, be aware that fees and interest may accrue on such plans.

The Takeaway

Thanks to a special law passed by Congress in 2021, post-secondary education loans forgiven from 2021 through 2025 did not count as earned income and weren’t federally taxed. That said, in 2026, state taxes may be due on forgiven loans, depending on where the borrower lives.

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

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

FAQ

Is loan repayment considered taxable income?

If your employer offers loan repayment assistance benefits, they would typically be considered taxable income. However, under the One Big Beautiful Bill Act, which expanded upon some terms of the Coronavirus Aid, Relief, and Economic Security Act that expired in 2025, employer assistance loan payments up to $5,250 made each year are tax-free.

Will refinancing my student loans help me avoid taxes?

Refinancing student loans does not involve taxes. However, the interest you pay on a refinanced student loan may qualify for the student loan interest deduction. If you’re eligible, you may be able to deduct up to $2,500, which could lower your taxable income.

Will student loan forgiveness be taxed after 2025?

The American Rescue Plan Act stipulates that forgiven student loans will not be taxed from 2021 through 2025. Currently, there are no plans to extend that tax relief beyond 2025.

Are state taxes different for forgiven student loans?

While states typically follow the federal tax policy, five states say that certain forgiven loans are taxable. Those five states are Arkansas (except for loans forgiven through Public Service Loan Forgiveness), Indiana (except for loans forgiven through PSLF, Teacher Loan Forgiveness, and certain other programs), Mississippi, North Carolina, and Wisconsin (except for loans forgiven through PSLF and TLF).

What steps should I take if I owe taxes on forgiven student loans?

If you owe taxes on forgiven student loans, calculate how much you’ll owe in taxes with the forgiven loan amount factored into your taxable income and start saving up to pay it. One way to do this is to put away the monthly amount you previously paid on your student loans to help offset the amount you owe. So if your student loan payment was $100 a month, deposit that amount monthly into a savings account and use it to help pay what you owe in taxes.

Photo credit: iStock/fizkes

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SOSLR-Q326-011

Aug

2026

Student Loan Repayment & Forgiveness for the Self-Employed

By Melissa Brock | Financial Topics, Student Loans | Comments Off

Table of Contents

Understanding Student Loan Repayment for the Self-Employed
Income-Driven Repayment Plans for the Self-Employed
Student Loan Forgiveness Programs for Self-Employed Borrowers
Tax Considerations for Self-Employed Borrowers
Strategies to Pay Off Student Loans Faster When Self-Employed
FAQ

Paying off student loans when you’re self-employed can be challenging. While being your own boss has its rewards, your income can be unpredictable, which can make it tough to make monthly student loan payments.

Fortunately, there are programs that can help entrepreneurs and freelancers, including loan repayment plans and student loan forgiveness for the self-employed. Read on to learn about the different options, plus strategies to help you pay off your student loans faster.

Key Points

• Student loan borrowers who are self-employed may be able to take advantage of loan repayment plans and student loan forgiveness options.

• Income-driven repayment plans that typically reduce monthly student loan payments for those who qualify are one option to explore.

• While self-employed individuals generally are not eligible for Public Service Loan Forgiveness, there may be forgiveness programs in their state they qualify for.

• Freelancers and other self-employed people may be able to take the student loan interest deduction of up to $2,500.

• Setting up a budget to help set aside money each month for student loan payments can be helpful to keep borrowers on track.

Understanding Student Loan Repayment for the Self-Employed

When you take out student loans, you sign a Master Promissory Note (MPN), a legal document in which you promise to repay your loans, plus interest and fees.

You can log into your account at StudentAid.gov and review your student loan balance and other loan information on your dashboard. There, you’ll also find the name and contact information for your loan servicer, which is the company that disburses your loan, handles billing and payments, and can help you choose the best repayment plan for your situation.

For example, if you have federal loans first disbursed before July 1, 2026, and you’re struggling with student loan debt, you might consider the Graduated Repayment Plan, where your payments start out low and rise approximately every two years.

Or, you could explore an income-driven repayment plan to help lower your student loan payments.

Income-Driven Repayment Plans for the Self-Employed

Income-driven repayment (IDR) plans base your monthly federal student loan payments on your discretionary income and family size. Beginning July 1, 2026, the federal student loan repayment system was significantly simplified. Existing borrowers generally have until July 1, 2028, to transition from certain older repayment plans to the new Repayment Assistance Plan (RAP) or another eligible repayment plan, depending on their loan type.

Current IDR options include:

• Income-Based Repayment (IBR): IBR remains available for eligible borrowers with loans made before July 1, 2026. Payments are generally about 10% of a borrower’s discretionary income on this plan, and any outstanding balance is forgiven after 20 or 25 years of qualifying payments.

• Repayment Assistance Plan (RAP): Available beginning July 1, 2026, RAP is the new congressionally authorized income-driven repayment plan. Monthly payments are based on adjusted gross income and the number of dependents rather than discretionary income. The plan also limits unpaid interest from growing and includes a principal-matching benefit for many borrowers. Any remaining balance is generally forgiven after 30 years of qualifying payments.

• Saving on a Valuable Education (SAVE): As of March 2025, the SAVE plan is no longer available after being ended by a federal court. Following federal court action and subsequent legislation, borrowers enrolled in SAVE must transition to another eligible repayment plan, such as RAP or IBR, according to the Department of Education’s transition timeline.

• Pay As You Earn (PAYE): PAYE is being phased out. No new loans made on or after July 1, 2026, are eligible for the plan, and borrowers currently enrolled must transition to another eligible repayment plan by July 1, 2028, unless they leave the plan earlier.

• Income-Contingent Repayment (ICR): ICR is also being phased out for most borrowers. Existing participants may remain in the plan temporarily but must transition to another eligible repayment plan, generally by July 1, 2028.

Student Loan Forgiveness Programs for Self-Employed Borrowers

There are no forgiveness programs specifically for borrowers who are self-employed or who work as freelancers. However, you might qualify for forgiveness under a broader federal plan or a state-based program.

Public Service Loan Forgiveness (PSLF) and Nonprofits

The Public Service Loan Forgiveness (PSLF) program forgives the remaining balance on a borrower’s federal Direct loans after they make 120 qualifying monthly payments under a qualified repayment plan while working for an eligible nonprofit or government agency. Unfortunately, self-employed individuals typically don’t qualify for PSLF because eligibility is based on working for a qualified employer.

As of 1 July, 2026, legislation updated the PSLF program, narrowing the definition of a qualifying employer while keeping its core requirements the same.

Income-Driven Repayment (IDR) Forgiveness

Typically, the remaining balances on eligible student loans are forgiven under IDR plans after a borrower makes a certain number of qualifying on-time payments. For borrowers enrolled in IBR, forgiveness is generally available after 20 or 25 years, depending on when the loans were first borrowed. The new RAP, which became available on July 1, 2026, provides forgiveness after 30 years (360 qualifying monthly payments). The SAVE, PAYE, and ICR plans are being phased out under the new law, with borrowers generally required to transition to another eligible repayment plan by July 1, 2028.

You can find out more and get updates about IDR and forgiveness on the Federal Student Aid website.

State-Based Loan Forgiveness Programs for Entrepreneurs

Many states offer self-employed student loan forgiveness programs, typically for public service fields such as health care, teaching, and law. Look into the relevant professional association in your state or check your state’s government website for more information about programs that are available.

For example, if you have a law degree and you’re self-employed with your own practice, you may be able to take advantage of statewide loan repayment assistance programs (LRAPs) in some states. You can reach out to your state’s bar association to learn more about specific loan forgiveness options you may be eligible for.

Recommended: Law & MBA Refinancing

Tax Considerations for Self-Employed Borrowers

As a student loan borrower and self-employed individual, you may be able to take the student loan interest deduction on your taxes. If you qualify for the full deduction, you can deduct student loan interest up to $2,500 or the total amount of interest you paid on your student loans, whichever is lower.

To be eligible for the deduction, you must meet the following criteria:

• You paid interest on a qualified student loan during the tax year.

• Your modified adjusted gross income (MAGI) is less than a specified amount that is set annually.

• Your filing status is anything except “married filing separately.”

• Neither you nor your spouse can be claimed as a dependent on someone else’s return.

• You are legally required to pay the interest on a student loan.

Strategies to Pay Off Student Loans Faster When Self-Employed

In addition to loan forgiveness for the self-employed, student loan repayment plans, and state-based programs you may be eligible for, there are also techniques that can help you repay your loans faster. Here are a few to consider.

Budgeting and Setting Aside Funds for Loan Payments

Creating a budget and dedicating a set amount each month toward your loan payments can help you stay on track to pay them off. Once you look at the amount of income you have coming in, you may even be able to direct additional money to your loan principal, which could help reduce the amount of interest you owe over the life of the loan.

Using Business Income to Cover Student Debt

Generally, student loan payments cannot be used as a business expense deduction on your taxes. However, as discussed, you may be eligible for the student loan interest deduction. Additionally, the more income your business earns, the more you may be able to pay yourself, which means you could direct more funds to your monthly student loan payments.

Refinancing Options for Entrepreneurs

You might also consider refinancing your student loans. With a student loan refinance, you trade your existing loans for a new loan from a private lender. Ideally, you might qualify for a lower interest rate or better loan terms.

You can refinance both private and federal student loans. For instance, you could refinance health care student loans if you decide to pursue that option. However, it’s important to understand that if you refinance federal student loans, you’ll lose access to benefits such as IDR plans. Make sure refinancing is right for you before you move forward with it.

💡 Quick Tip: Refinancing comes with a lot of specific terms. If you want a quick refresher, the Student Loan Refinancing Glossary can help you understand the essentials.

The Takeaway

There are repayment plans, student loan forgiveness, and loan assistance programs for those who are self-employed and working to repay their student loan debt. You can investigate income-driven repayment plans on the Federal Student Aid website and check with your state to find out about any forgiveness or loan assistance programs they offer to those in your field.

You can also consider options that may help you pay off your loans faster, such as paying extra toward your loan principal and exploring student loan refinancing.

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

FAQ

Can self-employed borrowers qualify for student loan forgiveness?

Self-employed borrowers may qualify for federal student loan forgiveness under income-driven repayment plans. Your state might also offer student loan forgiveness programs, especially if you are in health care, teaching, or law, among other professions. Compare available repayment options and apply online through StudentAid.gov, or check with the relevant professional association in your state and your state’s government website to find out more.

How does income verification work for self-employed repayment plans?

You must provide verification of your income to qualify for income-driven repayment plans. Proof of income includes your most recent federal income tax return or pay stubs.

What tax deductions are available for self-employed student loan payments?

As a self-employed person, you may qualify for the student loan interest deduction of up to $2,500 or the amount of interest you paid on your student loans during the year, whichever is less. Your modified adjusted gross income (MAGI) must be less than a specific amount that’s set annually, along with other eligibility requirements.

Are there any special loan repayment programs for entrepreneurs?

There are no special student loan repayment programs for entrepreneurs. However, your state may offer loan repayment or assistance programs you might qualify for. Check with any professional organizations you belong to for more information, as well as your state’s government website.

How can freelancers manage student loan payments without steady income?

Freelancers with inconsistent income can typically still take advantage of income-driven repayment plans, which can potentially lower your student loan payments. However, you will need to provide income verification, such as your most recent federal income tax return or paychecks, to see whether you qualify.

In addition, you can use other strategies to manage student loan payments, such as setting up a budget to help direct money to your monthly payments and claiming the student loan interest deduction on your taxes, if you qualify.

photo credit: iStock/Jacob Wackerhausen

SOSLR-Q326-014

Aug

2026

Student Loan Hardship Forgiveness Plan

By Jennifer Calonia | Financial Topics, Student Loans | Comments Off

Table of Contents

Understanding the Hardship Forgiveness Plan
Implementation Timeline
Legal and Political Considerations
Impact on Borrowers
Alternatives and Additional Support
FAQ

Student loan hardship forgiveness was a plan that could have offered relief to federal student loan borrowers who faced “persistent financial burdens” such as medical bills, natural disasters, and child care. Former President Biden sought to help relieve this financial burden through a hardship-based student loan forgiveness plan that he proposed while still in office.

The plan was ultimately pulled from consideration shortly before the Biden administration transitioned out of the White House. Here’s what to know about the proposed hardship forgiveness for student loans, plus other options for student loan borrowers dealing with financial hardship.

Key Points

• The Biden administration’s proposed student loan hardship forgiveness plan aimed to provide relief to federal student loan borrowers who were facing significant financial burdens.

• Automatic one-time forgiveness would have been offered to those with an 80% chance of default, based on financial indicators.

• An application-based forgiveness option would have allowed others to apply if not eligible for automatic relief.

• The plan was withdrawn in December 2024 due to operational challenges and limited time left in the administration’s term.

• Other student loan forgiveness options include income-based repayment plans and the Repayment Assistance Plan (RAP).

Understanding the Hardship Forgiveness Plan

In 2022, President Biden proposed a sweeping student loan cancellation plan that promised qualifying borrowers up to $20,000 in loan cancellation. The plan was blocked by the Supreme Court in 2023. Following the court’s decision, the student loan relief initiative was reworked by the administration into a student loan forgiveness plan, known as Plan B. The student loan hardship proposal was part of Plan B.

Overview of the Initiative

The student loan hardship forgiveness proposal was designed to offer relief to borrowers who were struggling with ongoing financial challenges. It enabled access to hardship forgiveness for student loans through two pathways:

• Automatic one-time forgiveness: In this pathway, if the Department of Education, using a “predictive assessment,” determined that a borrower had at least an 80% chance of defaulting on their student loan debt within two years, it may have automatically forgiven the loans on a one-time basis.

• Application-based forgiveness: If borrowers did not qualify for the automatic student loan hardship forgiveness, they could submit an application that would “holistically assess” how likely they were to default or experience severe and persistent financial hardship.

Eligibility Criteria

For a borrower to qualify for automatic forgiveness, an assessment of varying indicators would be done by the Secretary of Education. If the assessment determined that a borrower’s loans had at least an 80% likelihood of going into default in the following two years, they would qualify for hardship forgiveness under the proposed rule.

Some of the indicators used to assess automatic forgiveness included:

• Income

• Total debts owed

• High costs associated with medical bills

• Child care and other essential expenses

• Whether the borrower had qualified for a Pell Grant

Under application-based forgiveness, borrowers would need to demonstrate that they faced a high probability of loan default or other severe negative outcome if the hardship forgiveness wasn’t granted. The assessment also had to find that no other student loan payment options would adequately resolve the borrower’s hardship circumstances.

Application Process

Only borrowers experiencing an exceptional financial hardship who did not qualify for the automatic one-time forgiveness would need to complete a student loan hardship application for a holistic assessment.

However, since the hardship-based student loan forgiveness plan was withdrawn before its launch, no formal application was publicly available.

Implementation Timeline

The proposal for a student loan hardship forgiveness plan had been in the works for some time under the Biden administration. Here’s what to know about the proposal’s timeline.

Proposed Schedule

If the hardship forgiveness proposal had moved forward, the U.S. Secretary of Education in the Biden administration anticipated finalizing the new forgiveness plan and having it go into effect in 2025.

Legal and Political Considerations

The student loan hardship proposal would have given borrowers facing financial hardship tremendous relief. However, the proposed hardship-based student loan forgiveness plan, like many of the Biden administration’s forgiveness plans, had legal and political opposition.

Legal Challenges

Biden’s student loan hardship forgiveness initiatives were stymied by numerous legal challenges. First, the administration’s initial forgiveness plan that offered up to $20,000 in loan forgiveness was struck down by the Supreme Court in 2023. After that, different iterations of the proposal also faced legal hurdles.

For example, in 2024, seven states (Alabama, Arkansas, Florida, Georgia, Missouri, North Dakota, and Ohio) filed a lawsuit against the Biden administration, alleging that the proposed student loan hardship plan was an overstep of executive power.

Political Climate

In February 2025, the U.S. Court of Appeals for the 8th Circuit ruled that former President Biden’s student loan forgiveness plans were unconstitutional. With the Republican Party currently holding the majority in Congress and President Trump’s executive order in March 2025 to dismantle the Department of Education, a broad student loan hardship forgiveness plan appears unlikely to happen under the Trump administration.

Impact on Borrowers

Had Biden’s proposed hardship forgiveness for student loans been successful, an estimated eight million borrowers would have had their student loan balances erased.

Instead, these borrowers will need to repay their student loans through other alternatives, such as using another repayment plan or consolidating student loans.

Another option some borrowers might consider is student loan refinancing. When student loans are refinanced, the borrower’s current loans are replaced with a new loan from a private lender. Ideally, a borrower may be able to get better loan terms or a lower interest rate, if they qualify. You may pay more interest over the life of the loan if you refinance with an extended term.

If you decide to explore how to refinance student loans, just be aware that refinancing federal loans makes them ineligible for federal programs.

Recommended: Student Loan Refinancing Calculator

Financial Relief

When borrowers default on their student loans, the remaining balance becomes due upfront, which further compounds their financial challenges. The hardship forgiveness plan would have provided relief to federal student loan borrowers who are at the highest risk of defaulting on their debt.

Credit Implications

With the proposed hardship forgiveness plan, some borrowers in a dire financial situation might have been able to avoid the negative mark of student loan default on their credit record.

Here’s why: A student loan balance that’s forgiven shows up on a credit report as a closed account. This lowers borrowers’ debt-to-income (DTI) ratio, which can impact their access to new credit. A DTI ratio is a formula used by creditors to determine whether an applicant can reasonably make payments toward a new credit account. The lower this percentage is, typically the more favorable it is for borrowers.

Alternatives and Additional Support

For borrowers who are experiencing financial hardship, student loan forgiveness is usually accessible through other federal programs, such as income-driven repayment (IDR) plans and the Repayment Assistance Plan (RAP). You can find out more about this and get any updates on the Federal Student Aid (FSA) website.

In the meantime, here is more about these plans and how they typically work.

Income-Driven Repayment Plans

IDR plans offer student loan relief and ultimately forgiveness to borrowers who need lower student loan payments. These plans calculate your monthly payment based on your discretionary income and household size, which must be recertified annually. Depending on the plan, repayment terms are extended to up to 30 years, with payments set at 1% to 20% of your discretionary income. After successfully making all payments under your IDR plan, any remaining Direct Loan balance is forgiven.

There are technically four IDR plans, though several of them are no longer available:

• Saving on a Valuable Education (SAVE) Plan: This plan is no longer available to new borrowers after being blocked by a federal court.

• Pay As You Earn (PAYE) Repayment Plan: This plan is no longer available to new borrowers. Current borrowers can move into the Income-Based Repayment (IBR) plan.

• Income-Based Repayment (IBR) Plan

• Income-Contingent Repayment (ICR) Plan: This plan is no longer available to new borrowers. Existing borrowers can move to the IBR plan.

The application to change student loan repayment plans to an IDR option is available on the Federal Student Aid website.

The Takeaway

The Biden administration’s hardship-based student loan forgiveness plan would have forgiven student loan debt for an anticipated eight million federal student loan borrowers. However, the proposal was met with legal challenges and ultimately withdrawn by the administration in December 2024.

Although other federal loan forgiveness options, such as forgiveness through income-driven repayment, currently still exist, new applications for these plans are not currently available. Borrowers looking for help managing their student loan debt may want to consider other options.

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

FAQ

Will the forgiven loan amount be considered taxable income?

Whether a forgiven student loan amount is considered taxable income depends on the forgiveness program that granted the loan cancellation. Just be aware that some states impose a tax liability on forgiven student loans regardless.

How does the hardship plan differ from previous forgiveness initiatives?

The proposed student loan hardship forgiveness program was unique in that it offered two different pathways for student debt relief. The first was automatic forgiveness qualification for borrowers who demonstrated an 80% likelihood of defaulting on their student loans. The second was a holistic assessment of the borrower’s circumstances, in which forgiveness was to be assessed on a case-by-case basis after the borrower submitted an application.

What legal challenges could affect the plan’s implementation?

The Biden administration withdrew the student loan hardship plan in December 2024, citing operational challenges, and the plan is no longer moving forward. In February 2025, the 8th Circuit Court ruled that former President Biden’s overall student loan forgiveness efforts were unconstitutional.

Photo credit: iStock/Damir Khabirov

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

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, 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.

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.

SOSLR-Q326-012

Aug

2026

How Long Do You Have to Pay Off Student Loans?

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

Table of Contents

Understanding Student Loan Repayment Timelines
How Repayment Terms Affect Payoff Time
Standard Repayment Plan: 10-Year Term
Alternative Repayment Plans: Graduated and Extended Options
Income-Driven Repayment Plans
How to Choose the Right Student Loan Repayment Plan
How Private Student Loan Repayment Differs From Federal Loan Repayment
Ways to Pay Off Student Loans Faster
Pros and Cons of Long vs. Short Repayment Terms
Refinancing Options to Shorten Your Loan Term
FAQ

The standard time to pay off federal student loans is 10 years, but terms can range from five to more than 20 years, depending on the type of loan and repayment program. Your specific situation will also determine how long you have to pay off student loans, including the amount of student loan debt you have and how high a payment you can afford to make each month.

Here’s what you need to know about paying off student loans.

Key Points

• The standard repayment term for federal student loans is 10 years, but terms can range from five to over 20 years, depending on the repayment plan chosen.

• Longer repayment terms result in lower monthly payments but higher total interest costs.

• Shorter repayment terms lead to higher monthly payments but lower total interest costs.

• Refinancing may offer lower interest rates and potentially shorter repayment terms to borrowers who qualify.

• Paying extra toward student loans each month or making a lump sum payment could make it faster to reduce the total amount of debt and interest a borrower owes.

Understanding Student Loan Repayment Timelines

First, you may be wondering when to start paying student loans. You need to begin loan repayment after you graduate from college, withdraw, or drop below half-time enrollment. Most federal loans, including Direct Subsidized and Direct Unsubsidized Loans, and many private loans, come with a six-month grace period, meaning that your payments won’t be due for six months after leaving school.

When it comes time to pay back your student loans, one of the most important things you can do is keep track of student loan payment due dates to make sure your payments are on time each month. Late payments or failure to make payments can have serious consequences, including student loan default.

How Repayment Terms Affect Payoff Time

How long are student loan terms? It depends on the repayment plan you choose.

Once your loans become due, you can pick a student loan repayment plan. Student loan repayment options for federal loans disbursed before July 1, 2026 include the Standard Repayment Plan, Extended Repayment Plan, Graduated Repayment Plan, and income-driven repayment (IDR) plans. These various repayment options come with their own pros and cons, so it’s important to understand your needs to determine which one makes the most financial sense. Loans made after July 1, 2026 can be repaid using only the Standard Plan or the Repayment Assistance Program (RAP).

If you don’t make a choice, your federal loans will automatically be enrolled in the Standard Repayment Plan, where the length of your repayment period is set to 10 years.

With private student loans, your repayment period is the term you agreed to when you signed for the loan. These will vary by lender and your personal situation.

Standard Repayment Plan: 10-Year Term

You have 10 years to pay off your student loans under the Standard Repayment Plan. You’ll pay a set amount every month, and you may pay less overall for the student loan because of the relatively short term.

For most federal student loans, the standard option includes a six-month grace period that allows recent graduates to get a head start on finding a job. The clock starts ticking the moment you graduate, leave school, or fall below half-time enrollment. Loans that offer a student loan grace period include:

• Direct Subsidized Loans

• Direct Unsubsidized Loans

• Subsidized Federal Stafford Loans

• Unsubsidized Federal Stafford Loans

Just be aware that interest continues to accrue on unsubsidized loans during those six months, and it will be added back into the loan, increasing the principal. Direct Subsidized Loans do not accrue interest during the grace period.

Public Service Loan Forgiveness

The Standard Repayment Plan might not be a good choice for you if you’re trying to qualify for Public Service Loan Forgiveness (PSLF). Borrowers pursuing this program agree to work in underserved areas for a government entity or certain nonprofits and must meet specific requirements to have their loan forgiven after 120 qualifying payments. To be eligible for this program, you need to be enrolled in an income-driven repayment plan as opposed to the Standard Repayment Plan.

Direct Loan Consolidation

Combining your federal student loans on the Standard Repayment Plan into a Direct Consolidation Loan could open up several repayment options. Consolidation combines your federal loans into one loan with a single interest rate, which may simplify the repayment process. The interest rate is the weighted average of the loans you are consolidating, rounded up to the nearest one-eighth of a percentage.

Your loan term, ranging from 10 to 30 years, will depend on the amount of student loan debt you have. Extending your loan term may lower your monthly payment, but keep in mind that you’ll most likely end up paying more in interest over the life of the loan.

Recommended: Student Loan Repayment Calculator

Alternative Repayment Plans: Graduated and Extended Options

Graduated Repayment Plan: 10 to 30 Years

Generally, all federal loan borrowers can opt for the Graduated Repayment Plan. However, Direct Loans made after July 1, 2026 are not eligible. This plan could be an option for borrowers who expect their income to rise over time. It begins with low monthly payments that gradually increase at two-year intervals. The idea is that recent graduates’ salaries at entry-level positions may start off low but will rise over 10 years through promotions or job changes.

The downsides of the Graduated Repayment Plan are that you could be paying more over the life of the loan, and if your salary doesn’t increase as anticipated, the later payments can become burdensome.

So how long do you have to pay back your student loan under the Graduated Repayment Plan? Borrowers have 10 years to repay their loans, or 10 to 30 years if they have Direct Consolidation Loans.

Extended Repayment Plan: Up to 25 Years

The Extended Repayment Plan allows qualified applicants to extend the term of the loan to 25 years, making monthly payments smaller. Borrowers may end up paying more in interest over the longer loan term, but there are options for a fixed monthly payment or a graduated payment that will rise throughout the term.

The Extended Repayment Plan is geared toward borrowers who owe sizable sums. To qualify, you must owe $30,000 or more in federal student loan debt.

Neither the Graduated Repayment Plan nor the Extended Repayment Plan qualify for Public Service Loan Forgiveness. Direct Loans made after July 1, 2026 are also ineligible.

Income-Driven Repayment Plans

Income-driven repayment (IDR) plans are designed to make repayment easier if you can prove that paying back your student loans is a significant financial burden. Payments are based on factors including your discretionary income and family size.

As of July 2026, new borrowers will have just two options for repayment: the Standard Repayment Plan or the RAP, and existing loans can move into one of these programs. You can find out more about this and any new developments on the Federal Student Aid website.

Here is a quick look at how long borrowers have to pay back student loans under income-driven repayment plans. Each of the following plans has a different repayment period.

Typically, the remaining balances on eligible student loans are forgiven after making a certain number of qualifying on-time payments.

Saving On A Valuable Education (SAVE): 10 to 25 Years

As of July 2026, the SAVE plan, which replaced the Revised Pay As You Earn (REPAYE) program, is no longer available, and borrowers can move into the Standard Repayment Plan or the RAP.

Pay As You Earn (PAYE): 20 Years

A borrower’s monthly payment on PAYE is roughly 10% of their discretionary income, and they’ll make 20 years of payments. As of July 2026, this plan is no longer available for new borrowers. Existing borrowers can move into the Standard Repayment Plan or the RAP.

Income-Based Repayment (IBR): 20 or 25 Years

On this plan, borrowers’ monthly payments are about 10% of their discretionary income. They will have 20 years to pay back the loan if they’re a new borrower on or after July 1, 2014. If an individual borrowed student loans before that date, they will have 25 years to finish making payments.

It’s important to note that on the IBR plan, forgiveness after the 20- to 25-year repayment term has been met is still proceeding as of July 2026, since the IBR plan was separately enacted by Congress.

Income-Contingent Repayment (ICR): 25 Years

Under ICR, the monthly payment amount is either 20% of a borrower’s discretionary income divided by 12 or the amount they would pay on a repayment plan with a fixed payment over 12 years, whichever is less. As of July 2026, forgiveness is available after 25 years. This plan is not available to new borrowers, who must enroll in either an IDR plan or RAP.

How to Choose the Right Student Loan Repayment Plan

Choosing a student loan repayment plan is a personal decision that will depend on factors such as the amount of student loan debt you have, the industry you work in, your current income and expenses, your estimated future income, and your career goals.

For example, if you are working in a field in which starting salaries are low but income typically rises within a few years as you advance in your career, the Graduated Repayment Plan may make the most sense for you.

How Private Student Loan Repayment Differs From Federal Loan Repayment

Private student loans are not required to offer the same benefits or repayment plans as federal student loans. The term and repayment plan available to you will be determined by the private lender at the time you borrow the loan. This is based on your credit history, among other factors. If you have questions about the terms of your private student loans, you can contact your lender directly.

Ways to Pay Off Student Loans Faster

It is possible to fast-track your student loan payments. Here are some strategies to potentially pay off what you owe faster.

• Put extra money toward the loan principal. By paying extra on your student loans each month (or whenever you can), you can help shrink your debt and reduce the total amount of interest you’ll pay over the life of the loan. Just be sure to specify to your lender or loan servicer that the extra money you’re paying should be applied to the principal. Otherwise, they might deduct the money from next month’s payment, rather than the loan balance.

• Make a lump sum payment. Another option is to put a chunk of “found money” toward your student loans. This could be something like your tax refund or a bonus you get at work. Instead of spending the money, dedicate it to the principal on your student loans to help reduce your loan balance.

• Refinance your student loans. To pay off your loans faster, you can also refinance student loans and select a shorter loan term. Shortening the term of the loan can also decrease the total amount a borrower spends on interest over the life of the loan, especially if they also qualify for a lower interest rate.

However, keep in mind that refinancing federal loans means you are no longer eligible for federal protections or programs such as federal deferment. You may pay more interest over the life of the loan if you refinance with an extended term.

Pros and Cons of Long vs. Short Repayment Terms

When choosing a repayment option for your student loan, consider the benefits and drawbacks of long-term and short-term repayments. Then, compare all the pros and cons to see what repayment strategy is a better fit for your situation.

Pros of Long Repayment Terms:

• With a longer loan term, your monthly payments may be lower.

• If you’re struggling to pay your monthly expenses, smaller student loan payments may help free up extra money in your budget.

• Paying less on your student loans each month may help you work toward other financial goals, such as saving up for a car or a house.

Cons of Long Repayment Terms:

• A longer loan term means you may pay more in interest over the life of the loan.

• You’ll be in debt for a greater period of time with a longer loan term.

• Lenders consider longer loan terms riskier than shorter terms and they may charge higher interest rates for student loans with longer loan terms.

Pros of Short Repayment Terms:

• By paying off your student loans faster, you’ll repay your debt faster and free up your money for other purposes.

• You’ll likely pay less in total interest costs over the life of the loan.

• With a shorter repayment term on a private student loan, you might qualify for a lower interest rate on the loan if your credit is strong.

Cons of Short Repayment Terms:

• Your monthly payment will be higher with a shorter loan term.

• Larger payments mean your monthly budget will be tighter.

• If unexpected expenses arise, such as emergency car repairs or a surprise medical bill, you may have trouble paying them.

Refinancing Options to Shorten Your Loan Term

If you’re considering refinancing your student loans, you could opt for a shorter repayment term, if you qualify. With a shorter loan term, your monthly payments will be higher, but you can pay off your debt faster, which may help you save on total interest over the life of the loan.

Another option is to refinance to a loan with a shorter repayment term and a lower interest rate, if you qualify. That way, you’ll generally pay less in interest each month and overall, and you’ll also pay off your loan faster. But again, your monthly payments will be higher.

The Takeaway

How long you have to pay off student loans depends on the types of loans you have, the student loan repayment option you choose, and how large an amount you can afford to pay each month. Options for paying off student loans include the Standard Repayment Plan and the RAP. You can also choose to consolidate your federal loans into one loan with one monthly payment or refinance federal and/or private student loans into a new loan with a new interest rate.

If you choose to refinance your student loans, the benefits include the potential of a lower interest rate or a lower monthly payment. If you choose a shorter loan term, your monthly payment will be higher but you’ll likely pay less in interest over the life of the loan. A longer loan term will get you a lower monthly payment, but you’ll pay more in interest overall. Just remember that refinancing federal student loans makes them ineligible for federal benefits, and refinancing with a longer term can mean you pay more in interest over the life of the loan.

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

FAQ

Is there a time limit to pay off student loans?

There is a time limit for paying off student loans. The time limit is determined by the loan term and repayment plan selected by the borrower. For example, under the Standard Repayment Plan, borrowers repay their student loans over a period of 10 years. On the Extended Repayment Plan, the repayment period is extended up to 25 years.

Do student loans go away after 25 years?

Student loans don’t just go away after 25 years. However, for borrowers enrolled in an Income-Driven Repayment Plan, the remaining balance is forgiven or canceled at the end of the loan term, which may be 20 or 25 years. This forgiven balance may be considered taxable income by the IRS, so be sure to understand if that is the case for you.

Are student loans forgiven after 7 years?

No, student loans are not just forgiven after seven years. There are no federal programs offering loan forgiveness after seven years.

Can you switch repayment plans if your financial situation changes?

With federal student loans, you can change your repayment plan at any time by requesting a new plan from your loan servicer. You will likely have to submit an application. If you have private student loans, you may be able to change your loan repayment terms through student loan refinancing, if you qualify for new terms. You can also contact your current lender to see if they might be able to work with you to make your payments more manageable if you are struggling financially.

What happens if you pay off student loans early?

There are generally no penalties for paying off federal or private student loans early. In fact, lenders are banned by law from charging prepayment penalties on private or federal student loans. If you pay off your student loans early, you’ll typically save money by paying less in interest over the life of the loan and eliminate a source of monthly debt.

Terms and conditions apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. SoFi Private Student loans are subject to program terms and restrictions, such as completion of a loan application and self-certification form, verification of application information, the student's at least half-time enrollment in a degree program at a SoFi-participating school, and, if applicable, a co-signer. In addition, borrowers must be U.S. citizens or other eligible status, be residing in the U.S., Puerto Rico, U.S. Virgin Islands, or American Samoa, and must meet SoFi’s underwriting requirements, including verification of sufficient income to support your ability to repay. Not all repayment options may be available for all loans. Minimum loan amount is $1,000. See SoFi.com/eligibility for more information. Lowest rates reserved for the most creditworthy borrowers. SoFi reserves the right to modify eligibility criteria at any time. This information is current as of 3/2/2026 and is subject to change. SoFi Private Student loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org).

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.

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.

SOSLR-Q326-007

Aug

2026

Smart Medical School Loan Repayment Strategies

By Amanda Holden | Debt Payoff, Fresh Out of School, Student Loans, student_loan | No Comments

Table of Contents

Ways to Pay Off Medical School
FAQ

If you’re a doctor or studying to be one, chances are you have student loans. A typical medical school graduate has an average student loan debt of $216,659, according to the Education Data Initiative. That’s just over five times as much as the average college student owes.

Paying back the loans can be a challenge for doctors during residency and the early part of their career. But the good news is, the profession tends to pay well. In 2026, a typical entry-level doctor earned around $117,732 per year.

Key Points

• High medical school debt can be a challenge for many new doctors. The average medical school graduate holds an average of $216,659 in student loan debt.

• Income-driven repayment (IDR) plans can help manage and lower monthly payments based on discretionary income and family size.

• Public service loan forgiveness may be an option for those in qualifying public service roles.

• A Federal Direct Consolidation Loan allows borrowers to choose a new loan term, which could make payments more manageable.

• Student loan refinancing may result in lower interest rates for those who qualify and reduce monthly payments. But borrowers who refinance federal student loans lose access to federal benefits.

Ways to Pay Off Medical School

No matter how much you owe, it’s smart to have the right student loan repayment strategy in place. This can help ensure your monthly loan payments are manageable and your financial health is protected.

Let’s take a closer look at the various student loan payment options available.

Choose a Repayment Plan

When it comes to federal student loans, borrowers have four different repayment options. Fixed repayment plans give you a fixed monthly payment. Income-driven Repayment (IDR) plans base your monthly loan payment on your discretionary income and family size.

• Standard Repayment Plan: This fixed plan spreads out payments evenly for up to 10 years. For example, if you have a loan balance of $200,000 at 6.54%, your monthly payment will be about $2,275.

• Graduated Repayment Plan: With a graduated plan, your payments start out lower and then gradually increase over time, typically every two years. Repayment takes place over 10 years.

• Extended Repayment Plan: You can choose either fixed or graduated payments, and repayment takes place over 25 years. To qualify for this plan, you must have more than $30,000 in outstanding Direct Loans or Federal Family Education Loans (FFEL).

• Income-Driven Repayment Plans: There are several income-driven repayment plans: Income-Based Repayment (IBR), Pay As You Earn (PAYE), and the Repayment Assistance Plan (RAP). Repayment on these plans take place over 20 or 25 years, depending on your income and the plan you choose. At the end of the repayment period, the remaining balance may be forgiven, though this amount may be taxable.

As you weigh your options, think about the length of the repayment term and the monthly payment amount. With a longer repayment term, your monthly bill is lower, but the amount of interest you pay over the life of the loan is higher. With a shorter term, you pay less in interest over the life of the loan, but your monthly payment is higher. A student loan payoff calculator will give you an idea of your monthly payment for a different repayment term.

Loan Forgiveness Programs

Loan forgiveness programs can wipe out some or all of your medical student loan debt, provided you meet certain criteria. If you work for an eligible nonprofit or public service agency, for example, you may qualify for the Public Service Loan Forgiveness (PSLF) program. With this program, med school grads considering a job with a local, state, tribal, or federal government organization or a nonprofit organization could be eligible for federal Direct Loan forgiveness after 10 years of qualifying payments under an IDR plan.

You may also qualify for a federal or state loan repayment assistance program if you provide service to certain areas or segments of the population. For instance, the National Health Service Corps Loan Repayment program will erase as much as $75,000 of eligible student debt, tax-free, if you work full-time for at least two years in an approved medical facility.

Student loans from private lenders do not qualify for PSLF.

Student Loan Consolidation

If you’re paying off more than one federal loan, a Federal Direct Consolidation Loan may be an option worth exploring. Consolidation lets you combine different federal student loans into a single new loan with a fixed rate. The new rate is a weighted average of all your federal loan rates, rounded up to the nearest eighth of a percent. This may result in a slightly higher rate than you were paying before on some loans.

When you consolidate, you have the option to choose a new repayment plan that extends the life of the new loan up to 30 years. That can lower your monthly payment, but it may result in a longer loan repayment term and more interest overall. Keep in mind that you can’t include any private student loans in this type of consolidation loan.

Student Loan Refinancing

With student loan refinancing, you replace your current student loans with one new loan from a private lender. Ideally, the new loan will have a lower interest rate, if you qualify. This, in turn, could lower how much you pay in interest over the life of your loan. Refinancing can also make it easier to manage student loan payments. Instead of bills from different lenders, you get one bill each month from one lender.

You can choose a new length for your loan, which lets you adjust your monthly payments. This may be especially helpful if you choose to refinance during your residency.

It’s important to note, however, that refinancing federal student loans makes them ineligible for federal benefits such as income-driven repayment plans and forgiveness.

Recommended: A Guide to Private Student Loans

The Takeaway

Attending medical school isn’t cheap, and it’s common to graduate with significant student loan debt. The good news is, there are several repayment options that can help you tackle your debt more efficiently and protect your financial health. For example, under an income-driven repayment plan, your monthly payments are based on your discretionary income and family size. You may also qualify for a forgiveness program, which could erase part or all of your balance.

Other options for managing your student loan payments after medical school include federal Direct Loan Consolidation and student loan refinancing.

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

FAQ

What repayment options are available for medical school loans during residency?

Medical residents may have several repayment options, including income-driven repayment plans that base monthly payments on discretionary income and family size. These plans can help keep payments more manageable during lower-earning years and may count toward certain federal forgiveness programs, if you’re eligible.

How do doctors decide between income-driven repayment and refinancing?

The right approach depends on factors such as loan type, income stability, and long-term career plans. Income-driven repayment may be appropriate for borrowers who want to retain access to federal benefits, while refinancing may be considered by those looking to change their interest rate or repayment term. Refinancing federal loans removes eligibility for federal protections and forgiveness programs.

Are there forgiveness programs for medical school loans?

Some borrowers may qualify for federal or state loan forgiveness or repayment assistance programs. For example, Public Service Loan Forgiveness is available to eligible borrowers working for qualifying employers after meeting specific payment and employment requirements. Private student loans do not qualify for federal forgiveness programs.

What are some ways to reduce monthly medical school loan payments?

Borrowers may be able to reduce monthly payments by enrolling in an income-driven repayment plan, extending the repayment term through federal consolidation, or refinancing with a longer loan term. While these options can lower monthly payments, they may result in higher total interest paid over time.

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.

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

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

SOSLR-Q326-002