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Whether you’re attending college for the first time or returning to finish your degree, you may have the opportunity to choose online vs. in-person classes. Though online college has been a niche offering in higher education for over a decade, it has grown rapidly in popularity as technology advances and more students seek flexible learning options. Today, many institutions offer fully online or hybrid programs to meet the demand for remote learning.

Online school offers benefits like flexibility and convenience. On the other hand, online learning can make it difficult for students to connect with their peers. It can also make it harder to grasp concepts that require more hands-on learning. What follows is a closer look at the pros and cons of online school.

What is Online School?

Online school is a format of education where classes are conducted virtually. Some colleges are designed specifically for online learning. Other colleges and universities may offer both in-person and remote learning options for students. Depending on the program, classes may be offered synchronously, where students attend via an online forum at a specific time; asynchronously, where lectures are recorded and can be viewed at a student’s leisure; or a hybrid model of the two.

While detractors of online learning argue that it can’t fully replicate the in-person learning experience, there are several key advantages, including convenience and cost.

💡 Quick Tip: Fund your education with a low-rate, no-fee SoFi private student loan that covers all school-certified costs.

Pros of Online School

Online learning offers a variety of benefits that make it appealing to students with different needs, goals, and lifestyle. Here are some advantages to consider.

Cost May Be Lower

In many cases, online programs are more affordable than traditional in-person options. Because schools don’t need to maintain classroom space and physical campus resources for online students, tuition is often lower. In addition, students can save money on commuting, housing, and campus-related expenses like parking or meal plans.

That said, not all online degree programs are cheaper, especially at universities that prices online and in-person tuition the same. To get the best value, it’s worth looking at schools that specialize in online learning, as they typically build their pricing structure around remote education and pass those savings on to students.

Recommended: How to Pay For Online College

More Convenient

A huge benefit to online school is flexibility. Many programs are designed for students balancing school, work, and family responsibilities. Asynchronous classes allow learners to complete coursework on their schedule rather than attend lectures at fixed times.

That said, the time commitment required to succeed shouldn’t be underestimated — there will be deadlines, exams, and assignments to manage.

Self-Directed Course of Study

Online courses often give students more control over their learning experience. This independence can be empowering, allowing students to move at their own pace and tailor their schedules. However, this may mean you need to be more proactive about scheduling office hours with professors, blocking out time to study, and making sure that assignments are turned in on time.

Broader Access to Programs

One of the most appealing advantages of online learning is the ability to attend schools or programs located anywhere in the country – or even internationally — without having to relocate. This opens up far more educational options, allowing students to find the best program for their goals rather than being limited by geography.

Improved Technology Skills

Because online students use digital tools to attend lectures, collaborate, and submit assignments, they naturally build stronger technology skills and learn how to communicate effectively in remote environments. These abilities can be valuable in today’s increasingly digital workplace and may give graduates a competitive edge in the job market.

Cons of Online School

While some people thrive in an online environment, others may prefer to have in-person interaction. Here’s a look at some of the disadvantages of online school.

Limited Hands-On Experience

Bachelor’s degree programs with lab or clinical components can be difficult to replicate online. Some degrees offer virtual simulations, while others require in-person work. It’s a good idea to find out whether your desired degree can be completed fully online and to talk to current students in the program about their experiences.

Lack of Community

Some people find it challenging to make friends and connect with classmates in an online environment. Virtual discussions and group projects may feel less engaging than in-person interactions, which can lead to feelings of isolation.

Harder to Connect with Professors

Some professors maximize online interaction, while some may be harder to pin down and connect with. Heading to office hours, even if they are virtual, can help you build a connection and get to know the professor.

Limited Access to On-Campus Resources

If your online program is affiliated with a physical campus, there may still be valuable career services, tutoring, or networking opportunities available. However, access can vary. Be sure to check what resources are offered to online students before enrolling.

Requires Strong Self-Discipline

One of the biggest challenges of online school is staying motivated without the structure of a physical classroom. Students must manage their time effectively, avoid distractions, and hold themselves accountable — skills that not everyone naturally possesses.

Recommended: Can You Get Student Loans for Community College?

Additional Considerations for Online School

Being able to pursue higher education remotely can open up possibilities for many individuals. But it can be a good idea to consider how online school will mesh with your life. Here are some tips that can help you find your best fit.

Talk With Other Students

It can be helpful to speak with current students who are in a similar position as you. Talking with a student who is also juggling family or a career can help you see how the process plays out in real life.

Sit in on a Lecture

Will the program allow you to virtually sit in on the lecture or see some course materials? Doing so can help you see what online classes are really like.

Take an Online Course First

In some cases, online school can be an expensive undertaking. Prior to applying to an official degree program, consider signing up for a single course, either for fun or for credit hours. Taking a virtual course without the pressure of a degree can help you take stock of the pros and cons for yourself, and assess whether or not online learning is right for you.

Consider How You’ll Cover the Cost

If you’re working while studying, your employer might help pay for your education, especially if the program relates to your job.

You can also apply for financial aid (including scholarships, grants, and federal student loans) through the Free Application for Federal Student Aid (FAFSA®).

If you still have gaps in funding, you might explore using private student loans. These are available through banks, credit unions, and online lenders. Loan limits vary from lender to lender, but you can often get up to the total cost of attendance, which gives you more borrowing power than with the federal government. Interest rates vary depending on the lender. Generally, borrowers (or cosigners) who have strong credit qualify for the lowest rates.

Just keep in mind that private loans may not offer the borrower protections — like income-driven repayment or forbearance — that automatically come with federal student loans.

💡 Quick Tip: It’s a good idea to understand the pros and cons of private student loans and federal student loans before committing to them.

The Takeaway

Whether you choose online or in-person learning, pursuing a degree is a major decision. Weigh the pros and cons carefully — from flexibility and cost to motivation and interaction — to determine what type of program best suits your lifestyle and goals.

Talking with students and faculty, researching programs, and trying a course or two online can help you determine whether virtual learning is the right fit for your academic and professional future.

If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.

FAQ

What are the advantages and disadvantages of online education?

Online education offers several advantages, including increased flexibility and convenience, often lower costs, and broader access to diverse programs. However, it also has disadvantages, such as limited hands-on experience for certain subjects, potential lack of community and connection with peers and professors, and a greater need for strong self-discipline.

What is the biggest problem with online school?

The biggest challenge with online school is often the need for strong self-discipline and motivation. Without the traditional structure of a physical classroom and in-person interaction, students must be proactive in managing their time, staying organized, avoiding distractions, and holding themselves accountable for coursework and deadlines. This can be particularly difficult for individuals who thrive on external structure and immediate social interaction.

Is online school good or bad?

Online school can be both good and bad, depending on a student’s learning style and discipline. It can be beneficial for self-motivated learners who value flexibility, convenience, and access to diverse resources. However, it can be challenging for students who thrive on structure, in-person support, and social interaction. Success in online education largely depends on time management, motivation, and digital literacy. While it’s not ideal for everyone, it provides valuable opportunities when used effectively and responsibly.

Photo credit: iStock/insta_photos

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student loans are not a substitute for federal loans, grants, and work-study programs. We encourage you to evaluate all your federal student aid options before you consider any private loans, including ours. Read our FAQs.

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. 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 subject to change. This information is current as of 4/22/2025 and is subject to change. SoFi Private Student loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).

SoFi Bank, N.A. and its lending products are not endorsed by or directly affiliated with any college or university unless otherwise disclosed.

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.

SOISL-Q425-008

Student loans are considered installment loans, or loans that are repaid through regularly scheduled payments or installments.

Revolving options, like credit cards, let borrowers take out varying amounts of money each month, repay it, and take out more money as they go.

Read on to learn more about student loans, installment loans, and revolving credit — plus how student loans may affect your credit.

What Is Revolving Credit?

Revolving credit is an agreement between a lender and an account holder that allows you to borrow money up to a set maximum amount (or credit limit). The account holder can borrow what they need as they need it (up to their credit limit) and choose to pay off the balance in full or make minimum monthly payments on the account.

As the account holder makes repayments, the amount available to borrow is renewed. Account holders can continue to borrow up to the maximum amount through the term of the agreement. Examples of revolving credit include credit cards and home equity lines of credit (HELOCs).

What Is Installment Credit?

Installment credit is a type of credit that allows a borrower to receive a lump sum loan amount up front, then make fixed payments on the loan over a set period of time. Before the borrower signs an agreement for an installment loan, the lender will decide on the interest rate, fees, and repayment terms, which will determine how much the borrower pays each month.

Common examples of installment loans include federal student loans, private student loans, mortgages, auto loans, and personal loans.

And for borrowers who opt to refinance student loans, those loans are installment loans as well.

Revolving Credit vs Installment Credit

Now that you know student loans are installment and not revolving credit, it’s helpful to understand how these two types of credit compare.

Here’s a high level overview on the differences between installment loans vs. revolving credit.

Revolving Credit

Revolving credit is a more open-ended form of credit obligation. Let’s use the example of a credit card:

1.   The cardholder uses the card to make purchases as they please, pays them off either in-full or partially each month, and continues to make charges on the line of credit.

2.   The amount of money the cardholder spends is their decision (up to their credit limit), and the amount of money they repay each month isn’t set in advance by the lender.

3.   The cardholder can pay off the account balance in full each month, or they can opt to pay the minimum and “revolve” the balance over to the next month (though this will accrue interest on the account).

An important note: To avoid any late fees or potential dings to your credit score, it’s important to pay your monthly revolving bill on time. It’s also wise to keep your balances low, as your credit utilization rate is a major factor in your credit scores.

Installment Credit

Installment credit is less open-ended than revolving credit. Installment credit is a loan that offers a borrower a fixed amount of money over a predetermined period of time. When a borrower signs the loan agreement, they know what the monthly payments will be and how they will need to make payments.

Let’s use the example of a student loan:

1.   The student borrows a specific dollar amount. The lender specifies the interest rate and repayment terms. In the case of federal student loans, interest rates and terms are set by federal law.

2.   The predetermined loan amount is released to the borrower. Typically, the funds are released in a single lump sum payment.

3.   The borrower repays the loan based on the agreed upon terms. Terms will be set by the lender for private student loans, or by law for federal student loans.

An important note: If you only have revolving credit (such as a credit card), taking out an installment loan can diversify your credit mix, which is a factor in determining your credit scores. While an installment loan adds to your total debt, its balance does not factor into your credit utilization ratio (which is specific to revolving credit).

Pros and Cons of Installment Credit

Student loans for undergraduate school, as well as student loans that are refinanced, are considered installment loans, which means they come with a starting balance, are disbursed to the qualifying borrower up front and in full, and are repaid over a set amount of time through a fixed number of payments. There are advantages and disadvantages to taking out an installment loan, and it’s important to be aware of them:

Pros of Installment Credit

Here’s a closer look at two key advantages of installment credit:

Predictable Payments

Installment credit payments are made on a set schedule that’s determined by the lender. This makes them a predictable, long-term strategy for paying off debt, and also makes it easier to factor them into your budget, especially if the installment loan has fixed interest rates.

The monthly payment for an installment loan with a variable interest rate may occasionally change.

Lower Interest Rates

Installment loans often feature lower average interest rates than credit cards or other forms of revolving credit. This can result in significant savings on interest charges over time, especially for large loan amounts.

Cons of Installment Credit

But there are also disadvantages to installment credit. Two key drawbacks include:

Accumulation of Interest

While often lower than credit card rates, interest on an installment loan is paid over the entire life of the loan, which can add up to a significant amount of money over time, particularly for long-term loans.

Prepayment Penalty

Some loans impose prepayment penalties if a borrower pays their loan off early. This isn’t necessarily the case for all installment loans — as mentioned, student loans generally don’t have prepayment penalties. But it’s important to read the fine print in the loan agreement to determine whether a prepayment fee will be triggered if the loan is paid off early.

Recommended: How to Avoid Paying a Prepayment Penalty

How Student Loans Affect Your Credit Score

Student loans, like other loans, are noted on your credit report and they may affect your credit in both positive and negative ways.

On the plus side, making consistent, on-time payments, can help borrowers establish a positive payment history, which is the most significant factor (35%) in a FICO® credit score. Successfully managing an installment loan can also help diversify your credit mix, which can also have a positive impact on your credit profile.

However, failing to make your loan payments can negatively impact your credit. A federal student loan payment is considered delinquent even when your payment is just one day late. After 90 days of missed payments, your loan servicer will report the delinquency to the national credit bureaus. Late payments can stay on your credit report for up to seven years.

(After 270 days of missed payments, your loan will go into default, which can have very serious consequences for your credit and your financial situation in general. If you are having trouble repaying your student loans, reach out to your lender or loan servicer right away to see what your options are.)

If you apply for a private student loan or student loan refinancing, lenders will typically do a hard credit inquiry, which may temporarily lower your credit score. Most federal student loans do not require hard credit inquiries.

Ways to Pay for School

There are a variety of ways to pay for college, including student loans, savings, financial aid, and scholarships. Here’s a closer look at your options:

Federal Student Loans

Federal student loans are installment loans available to students. To apply, students fill out the Free Application for Federal Student Aid (FAFSA®) each year. Federal student loans have fixed interest rates that are set annually by Congress, offer different repayment options, and have some borrower protections and benefits such as deferment and the option to pursue Public Service Loan Forgiveness.

However, there are borrowing limits for federal student loans, and other changes are coming to the federal student loan program as of the summer of 2026, so students may need to review other sources of financing when determining how they’ll pay for college.

Private Student Loans

Private student loans are installment loans you can use to pay for a college education. Private student loans are offered by private lenders. To apply for them, borrowers can browse the offerings of individual lenders like banks, credit unions, and online lenders and decide which private student loan works best for their finances. As a part of the application process, lenders will generally review the applicant’s (or their cosigner’s) credit history and credit score among other factors.

Private student loans can help bridge funding gaps after other sources of financing — such as federal loans, grants, and scholarships — have already been exhausted. This is because private lenders are not required to offer the same borrower protections as federal student loans. If you think private student loans are an option for you, shop around to find competitive terms and interest rates, and be sure to read the terms and fine print closely.

As mentioned, a borrower may choose to refinance private student loans at a later date, especially if they can qualify for more beneficial terms or a lower interest rate. Federal student loans can also be refinanced, but if a borrower chooses this option, they will lose access to federal benefits and protections like federal deferment and forgiveness.

Personal Savings

Using personal savings to pay for college means less debt and more flexibility. Not only that, but it costs significantly more to borrow money to pay for college than it does to use personal savings.

Using personal savings to pay for college means less debt and more flexibility. Using savings also allows you to save money on interest, which can make college less expensive. That said, not everyone has enough savings to cover the full cost of attending college.

Grants

Unlike student loans, which require repayment, grants are a type of financial aid that doesn’t require repayment. Grants are typically based on financial need. Completing the FAFSA will put you in the running for federal, state, and institutional grants.

Recommended: The Differences Between Grants, Scholarships, and Loans

Scholarships

A scholarship is a lump sum of funds that can be used to help a student pay for school. Scholarships usually don’t have to be repaid, and can be need-based or merit-based. You can find out about scholarships through your high school guidance office, college’s financial aid office, or by using an online scholarship search tool.

Work-Study Programs

Federal work-study programs allow students with financial need to work on- or off- campus and earn money through part-time jobs. The program encourages students to do work related to their course of study or community service.

Work-study programs are funded by the federal government. Students may be awarded a certain work-study amount by filling out the FAFSA. Not all schools participate in federal work study, however, so if you are interested in this option, make sure your school offers it.

The Takeaway

Student loans are a common form of installment credit. This means they are dispersed as a lump sum and require making fixed, regular payments over a predetermined period. Unlike revolving credit such as credit cards, student loans offer predictable budgeting and often come with lower interest rates.

Managing student installment loans responsibly can positively impact your credit profile. However, late or missed payments can have serious negative consequences. Understanding the differences between installment and revolving credit, and exploring various funding options for education, can empower you to make informed financial decisions for your academic journey and beyond.

If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.

FAQ

Is a student loan an installment loan?

Yes, a student loan is an installment loan. This means you receive a lump sum of money up front and repay it over a set period with a predetermined number of regular payments.

Is a student loan a revolving loan?

No, a student loan is not a revolving loan. Revolving loans, like credit cards, allow you to borrow varying amounts up to a set credit limit, repay, and then borrow again. Student loans are installment loans, meaning you receive a lump sum and repay it with fixed, scheduled payments over a set period.

What are the benefits of an installment student loan?

The benefits of an installment student loan include predictable payments, which makes budgeting easier, and often lower interest rates compared to revolving credit. They also allow you to finance a major purchase like an education and can help diversify your credit mix.

Can student loans help build credit?

Yes, student loans can help build credit. Making regular, on-time payments on your student loan demonstrates responsible financial behavior, which contributes positively to your payment history — a major factor in your credit score. Successfully managing an installment loan like a student loan can also help diversify your credit mix, which can further enhance your credit profile.

What’s the difference between federal and private student installment loans?

Federal student loans generally offer lower rates and more borrower protections, such as income-driven repayment and potential for loan forgiveness. Also, they typically do not require a hard credit inquiry. Private student loans, offered by banks and other financial institutions, may have fewer borrower protections and repayment options, and usually require a credit check and potentially a cosigner. Interest rates and terms for federal loans are set by law, while private loan terms depend on the lender and borrower’s creditworthiness.

Photo credit: iStock/SDI Productions

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student loans are not a substitute for federal loans, grants, and work-study programs. We encourage you to evaluate all your federal student aid options before you consider any private loans, including ours. Read our FAQs.

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. 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 subject to change. This information is current as of 4/22/2025 and is subject to change. SoFi Private Student loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).

SoFi Bank, N.A. and its lending products are not endorsed by or directly affiliated with any college or university unless otherwise disclosed.

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.

SOISL-Q425-031

Staying on top of student loans and other financial obligations can be challenging. If you’re having trouble making monthly payments, or you’re concerned about how you’ll repay your loans down the road, you might be wondering what happens if you don’t pay your debt.

While you cannot be arrested or put in jail just for failing to pay your student loans, there are repercussions for missing student loan payments, including damage to your credit and wage garnishment.

Here’s a look at the potential legal and financial consequences of not paying debt, as well as tips for tackling student loan debt after you graduate.

Going to Jail for Debt

No matter how much or what type of outstanding debt you have, a debt collector cannot threaten to or have you arrested for that unpaid debt. Doing so is a violation of the Fair Debt Collection Practices Act and would be considered harassment.

A lender can, however, file a lawsuit against you to collect on an outstanding debt. If the court orders you to appear or to provide certain information, but you don’t comply, a judge may issue a warrant for your arrest. A judge can also issue a warrant for your arrest if you don’t comply with a court-ordered installment plan (such as child support).

Bottom line: You never want to ignore a court order, since doing could result in an arrest and, potentially, jail time.


💡 Quick Tip: Pay down your student loans faster with SoFi reward points you earn along the way.

Can You Go to Jail for Not Paying Student Loans?

No, you can’t be arrested or put in prison for not making payments on student loan debt. The police won’t come after you if you miss a payment. While you can be sued over defaulted student loans, this would be a civil case — not a criminal one. As a result, you don’t have to worry about doing any jail time if you lose.

As mentioned above, however, ignoring an order to appear in court could result in an arrest. And unless you want to deal with a long, messy legal process and added expenses on top of your debt (in the form of attorney and court fees), it’s in your best interest to do whatever you can to avoid defaulting on your student loans.

Statute of Limitations on Debt

In terms of debt collection, the statute of limitations refers to the amount of time that creditors have to sue borrowers for debt that’s past due.

Federal student loans don’t have a statute of limitations. This means that federal loan servicers can pursue collection of defaulted federal student loans indefinitely. Keep in mind that the federal government doesn’t have to sue you to start garnishing wages, tax refunds, and Social Security checks.

For other types of debt, including private student loans, many states have statutes of limitations between three and six years, while some are longer. The timeframe can vary based on the type of debt and the state law named in your credit agreement.

If you’re sued by a debt collector and the debt is too old, you may have a defense to the lawsuit. You may also have a claim against the collector for violating the Fair Debt Collection Practices Act, which prohibits suing or threatening to sue for a debt that is past the statute of limitations.

Recommended: Private Student Loans vs Federal Student Loans

What Are the Consequences of Not Paying Off Student Loan Debt?

The consequences of not paying your student loan debt differ depending on what type of student loans you have.

Federal Student Loans

Typically, with federal student loans, the loan becomes delinquent the first day after a payment is missed. If you don’t make a payment within 90 days, your loan servicer will report the delinquency to the three national credit bureaus.

If you don’t make a payment for 270 days (roughly nine months), the loan will typically go into default. A default can cause long-term damage to your credit score. You may also see your federal tax refund withheld or some of your wages garnished.

Once your federal student loan is in default, you can no longer receive deferment or forbearance or any additional federal student aid. Plus, you’re no longer eligible for an income-driven repayment plan, and your loan servicer can sue you for the money you owe.

Private Student Loans

If you don’t pay private student loans, the consequences will depend on the lender. Generally, however, this is what happens: As soon as you miss a payment, your loan will be considered delinquent. You’ll likely get hit with a late fee and, after 30 days, your lender can report your delinquency to major credit agencies.

After 90 days, your loan will typically go into default. At that point, your loan may be sold to a collections company. Your (and any cosigner’s) credit score will also take a hit. In addition, your lender can sue you for the money you owe. They may also be able to get a court order to garnish your wages. However, they can’t take any money from your tax refunds or Social Security checks.

Tips for Getting Out of Student Loan Debt

You won’t go to jail for not paying back your student loans, but you can still face some significant consequences for missing payments. Here are some ways to stay (or get back) on track.

1. Set up a Budget

It can be hard to manage your finances without a plan. Creating a monthly budget is a helpful way to keep your spending in check and make sure you have enough money for your loan payments. Once you write down everything you’re spending on each month, you may find some easy places to cut back, such as getting rid of streaming services you rarely watch or spending less on takeout and afternoon coffees. Any money you free up can then go towards loan repayment.

2. Increase Cash Flow

Reining in your spending with a budget is a good place to start, but it may not be enough for getting out of debt. Having some extra cash on hand can help manage debt payments and offer some breathing room within your monthly budget.

To boost your income, you might consider taking on more hours at your current job, getting some freelance work, or picking up a side gig (such as food delivery, dog walking, or babysitting). You don’t have to do this forever — just until your student debt is paid off, or at least well under control.

Recommended: Student Loan Debt Guide

3. Create a Debt Reduction Plan

If you have multiple debts, it’s a good idea to take an inventory of everything you owe and then set up a comprehensive debt reduction plan.

A popular system is the avalanche method, which calls for putting any extra cash toward the debt with the highest interest rate while making minimum payments on other balances. When that debt is paid off, you put your extra money towards the debt with the next-highest interest rate, and so on.

Another option is the snowball method, which focuses on ticking off debts in order of size, starting with the smallest debt balance, while still taking care of minimum payments on other debt.

4. Apply for an Income-Based Repayment Plan

If you have federal student loans, there are currently three income-driven repayment (IDR) plans you can apply for to make your monthly payments more manageable. These include:

•   Saving on a Valuable Education Plan (SAVE; replacing Revised Pay As You Earn)

•   Pay As You Earn

•   Income-Based Repayment Plan

•   Income-Contingent Repayment Plan

Monthly payments are a percentage of your discretionary income, usually 10% or 20%. What’s more, all plans forgive any remaining balance at the end of the 20- or 25-year repayment period. Note that the current IDR program will sunset for new borrowers starting July 1, 2026, as a result of changes to federal legislation.

Starting July 1, 2026, new federal student loan borrowers will only have access to the new Repayment Assistance Plan (RAP), which requires payment amounts of 1-10% of your annual adjusted gross income and offers forgiveness after 30 years.

5. Find Another Repayment Plan

Besides income-based repayment, current borrowers can explore a variety of other federal repayment plans to help pay off debt. For example, the graduated repayment plan helps recent college grads find their financial footing by setting smaller monthly payments at first before increasing every two years. (Note: Borrowers who take on a new loan after July 1, 2026 will only be eligible for a standard repayment plan or the RAP plan.)

Some private lenders also offer a choice of different repayment options.

6. Look Into Forgiveness Programs

The federal government offers student loan forgiveness to borrowers who meet certain eligibility criteria, such as working in a certain profession, having a permanent disability, or after making payments for a certain amount of time on an income-driven repayment plan. Similar programs are available at the state-level across the country, and generally base eligibility on specific professions or financial hardship. It’s worth contacting your state’s higher education department to see if you might qualify for a repayment assistance program.

The Rural Iowa Primary Care Loan Repayment Program, for instance, provides up to $200,000 toward repaying eligible student loans for doctors who commit to working five years in designated locations.

The NYS Get on Your Feet Loan Forgiveness Program, on the other hand, offers up to 24 months of debt relief to recent graduates in New York who are participating in a federal income-driven repayment plan.

7. Ask About Employer Tuition Reimbursement Programs

Besides health insurance and a 401(k), your employer may provide other benefits, including tuition reimbursement programs, to support and retain their employees.

Often, these programs are focused on annual tuition expenses that employees incur while studying and working concurrently. Still, employers may offer to contribute to student loan payments as well.


💡 Quick Tip: Master’s degree or graduate certificate? Private or federal student loans can smooth the path to either goal.

8. Explore Refinancing Your Student Loans

Student loan refinancing could help you save interest and make your monthly payments easier to manage. Generally, though, refinancing only makes sense if you can qualify for a lower interest rate.

Refinancing involves taking out a new loan with a private lender and using it to pay off your existing federal or private student loans. You can often shop around and “browse rates” without any impact to your credit scores (prequalifying typically involves a soft credit check). Just keep in mind that refinancing federal loans with a private lender means losing access to government protections like income-driven repayment, student loan forgiveness programs, and deferment and forbearance.

Also know that lenders typically require your loans to be in good standing before approving a refinance. That means you generally can’t refinance a student loan in default. You can, however, consider refinancing after recovering from a student loan default.

The Takeaway

Although you won’t go to jail for failing to pay your student loans, there are a number of negative consequences, like late fees, a damaged credit score, wage garnishment, and even being taken to court.

Whatever type of student loan you have, you can help the road to repayment go smoothly by setting up a budget that makes room for monthly loan payments, picking a repayment plan that fits your needs and budget, and investigating forgiveness options.

Finding a student loan with a competitive interest rate and flexible repayment terms can help avoid the stress and repercussions of not paying student loans down the line.

If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.

FAQ

Do student loans go away after 7 years?

No, student loans won’t disappear after seven years. Negative information about your student loans (such as late payments or defaulting on a loan) will be removed from your credit report after seven years, but that doesn’t remove your responsibility for paying back the loans. You’ll still owe the debt until you pay it back, it’s forgiven, or, in the case of private student loans, the statute of limitations runs out.

How long before student loans are forgiven?

The Public Service Forgiveness Program requires making the equivalent of 120 qualifying monthly payments under an accepted repayment plan (while working full-time for an eligible employer) for student loan forgiveness. With the currently offered federal income-based repayment plans, you need to make payments for 20 to 25 years to have the remaining balance forgiven. State programs may offer more rapid repayment assistance and forgiveness.

Can student loan lenders seize bank accounts?

Yes, but not right away. If you have federal student loans, your wages or bank accounts can be garnished only if you have officially defaulted on your loans (i.e., you haven’t made a payment for at least 270 days). The government does not need a court order or judgment to garnish your wages.

If you default on a private student loan, your creditor must first sue you to obtain a judgment and submit a court order to your employer before your wages can be garnished.

Photo credit: iStock/shadrin_andrey

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student loans are not a substitute for federal loans, grants, and work-study programs. We encourage you to evaluate all your federal student aid options before you consider any private loans, including ours. Read our FAQs.

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. 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 subject to change. This information is current as of 4/22/2025 and is subject to change. SoFi Private Student loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).

SoFi Bank, N.A. and its lending products are not endorsed by or directly affiliated with any college or university unless otherwise disclosed.

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.

SOISL-Q425-017

More than half of college students graduate with some debt. The average federal student loan debt balance is $39,075, while the total average balance (including private loan debt) may be as high as $42,673, according to the Education Data Initiative.

While those numbers may look daunting, keep in mind that you typically don’t need to start repaying your student loans until six months after you graduate. What’s more, lenders (both federal and private) generally offer a number of repayment options that can make managing student loan debt easier.

Here’s a look at nine tips and strategies that can make repaying your student loans as stress-free as possible.

1. Understand Your Total Debt

Before you can determine the best way to manage student loan debt, you’ll want to get a full picture of what you owe. You may graduate with several loans, both federal and private, and the interest rate may be different depending on when you took out the loan.

You can find your federal student loan balances by logging into your account at StudentAid.gov. For private student loan balances, you can contact your loan servicer or check your credit report (you can request a free credit report from AnnualCreditReport.com ).

💡 Quick Tip: With benefits that help lower your monthly payment, there’s a lot to love about SoFi private student loans.

2. Know Your Repayment Terms

In addition to your unpaid balances for each student loan, there are other repayment factors that impact your payoff strategy. This includes each loan’s:

•   Term Your repayment term is the amount of time until you get out of student loan debt, if you follow your original repayment plan.

•   Interest rates This is the cost of financing. While federal student loan rates are the same for every borrower, private student loan rates range based on the lender, the type of interest rate (fixed or variable), and the borrower’s credit score.

•   Grace period Many student loans offer a grace period, which is the length of time that you have after graduation before you need to start paying back your loans. Often the grace period is six months after you graduate or drop below half-time attendance.

Recommended: Average Student Loan Debt

3. Determine if You Qualify for Loan Forgiveness

If you have federal student loans, you could be eligible for certain debt forgiveness programs. These programs can wipe away all or a portion of your student debt after you’ve satisfied certain repayment and eligibility criteria. Some pathways to forgiveness include:

•   Public Service Loan Forgiveness (PSLF) Under PSLF, government and nonprofit workers may be eligible to see the remaining balance of their federal student loan debt forgiven after making 120 qualifying payments. You can use the government’s PSLF help tool to see whether you work for a qualifying employer and generate your PSLF form.

•   Income-driven repayment (IDR) An income-driven repayment plan sets your monthly student loan payment at an amount that is intended to be affordable based on your income. If your federal student loans aren’t fully repaid at the end of the repayment period (which may be 20, 25, or 30 years), any remaining loan balance is forgiven.

•   Teacher Loan Forgiveness Teachers who work full time for five consecutive academic years at a low-income school may be eligible for up to $17,500 in loan forgiveness. To qualify, you must meet the FSA’s requirements as a highly qualified teacher.

4. Select a Repayment Plan That Works for You

Depending on the type of student loan you have, you may be able to choose from a variety of different repayment plans. Loans in the federal system offer access to a set list of repayment options, while private loan repayment plans vary. Choosing a payment plan that works with your budget can make it much easier to deal with student loan debt.

Private Student Loan Repayment Options

When you take out a private student loan, you may be able to choose between several different repayment plans. These may include:

•   Immediate repayment This means you’ll make full monthly payments while you’re still in school.

•   Interest-only repayment Here, you’ll pay only the interest on your loan while you’re still in school.

•   Partial interest repayment With this plan, you’ll make a fixed monthly payment while you’re in school that only covers part of the interest you owe.

•   Full deferment If you go this route, you pay nothing while you’re enrolled in school. However, your loan balance will grow during that time due to accruing interest.

You may also be able to choose your loan repayment term, such as five, 10, or 15 years. Picking a shorter repayment term can help you save on interest (it may also help you qualify for a lower interest rate), but may mean a higher monthly payment.

Once you pick a repayment plan, you generally can’t change it after the fact. However, if you experience a financial hardship, the lender may agree to temporarily lower your payments, waive a payment, or shift to interest-only payments.

Federal Loan Repayment Options

All federal student loans are on the Standard Repayment Plan (which is a 10-year fixed payment repayment plan) by default. Borrowers who take out loans after July 1, 2026, will default to a revised Standard Repayment Plan, which spreads debt into fixed payments over one of four timeframes (ranging from 10 to 25 years), depending on what they owe.

Borrowers with loans taken out before July 1, 2026 can request to enroll in other payment plans, such as:

•   IDR Plan Income-driven repayment (IDR) plans base your monthly payment amount on how much money you make and your family size. Current options include: Pay As You Earn (PAYE), Income-Based Repayment (IBR), and Income-Contingent Repayment (ICR). Depending on the plan, your payment is reduced to 10% to 20% of your discretionary income. After satisfying a certain number of months of qualifying payments on an IDR plan, you can get the remaining balance of your loan forgiven. (Note: Those who take out new loans after July 1, 2026, will be able to enroll in only a new IDR plan called the “Repayment Assistance Plan,” or RAP.)

•   Graduated Repayment Plan With this option, payments are lower at first and then increase, usually every two years. Payment amounts are designed to ensure your loans are paid off within 10 years (or within 10 to 30 years for Consolidation Loans).

•   Extended Repayment Plan With this plan, your payments can be fixed or graduated and your loan term is stretched to 25 years.

5. Consider Consolidating or Refinancing Your Loans

If you have multiple federal student loans, even if they are with different loan servicers, you may be able to combine them into one loan with a single monthly payment through a Direct Consolidation Loan. This can simplify loan repayment and make it easier to manage student loan debt by giving you a single loan with one monthly bill.

Whether you have federal, private, or both types of loans, you might consider refinancing your student loans with one private student loan, ideally with a lower interest rate and/or better repayment terms. This can simplify repayment and could also help you save money. Just keep in mind that if you opt for a longer long term, you can end up paying more in total interest. Also be aware that if you refinance federal loans to private, you may lose some benefits, such as student loan forgiveness and income-driven repayment.

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

6. Ask Your Employer About Student Loan Assistance

Many employers are now offering student loan repayment assistance or tuition reimbursement as a way to recruit and retain top employees.

In addition, some employers will pair student loan repayment with contributions to a traditional 401(k) plan. With this relatively new benefit, an employer matches a worker’s student loan payments as if they were payments to a qualified retirement plan, even if they don’t contribute to the company’s retirement plan.

The upshot: It can be worth asking your employer if they have any repayment assistance — or are planning to offer it in the future.

Recommended: Jobs that Pay for Your College Degree

7. Explore Payoff Strategies

Whatever type of student loan repayment plan you have, there are steps you can take on your own to help manage your student loan debt, and even speed up repayment. Here are two effective strategies to consider:

•   Making extra payments toward principal If you have any extra cash to spare after you make your minimum monthly loan payment(s), consider putting it directly toward lowering your principal balance. Doing this can help you reduce the amount of debt you owe, pay off your loans faster, and save you money on interest over time. Just be sure to tell your lender in writing that your extra payment should go toward the principal and not toward future payments.

•   Avalanche repayment method This can be useful if you have multiple student loans. With this approach, you make minimum student loan payments on all your loans and then direct any extra money toward the loan with the highest interest rate. Once that loan is paid off, you funnel your extra funds to the loan with the next-highest rate until that debt is paid off, and so on until all your student debts are gone. This payoff method can speed up loan repayment and also save you money.

8. Take Advantage of Lender-Specific Benefits

Some student loan lenders offer certain benefits to their borrowers. For example, federal loan servicers, as well as many private lenders, offer a discount on the interest rate if you agree to set up your payments to be automatically withdrawn from your checking account each month.

In addition, some private lenders offer specific borrower perks, such as a one-time cash reward if you get above a certain GPA or the ability to earn reward points that you can then use to lower your monthly payments. It’s a good idea to learn about — and take advantage of — any repayment benefits your lender offers. This can make it easier to handle your student loan debt after you graduate.


💡 Quick Tip: Need a private student loan to cover your school bills? Because approval for a private student loan is based on creditworthiness, a cosigner may help a student get loan approval and a more competitive rate.

9. Budget Your Finances Accordingly

No matter the amount or type of student debt you have, a key way to manage repayment is to set up a basic budget. While that may sound complicated, it’s actually a relatively simple process.

The first step is to figure out how much money you have coming in each month (like your income after taxes and any help you may receive from your parents). Next, make a list of all your fixed monthly expenses, such as rent, utilities, phone/cable bill, food, and minimum payments due on loans, including your student loans.

You then subtract your fixed costs from your total income. Whatever is left is your disposable income — the money you have to spend on things like eating out, movies, other entertainment, and clothing.

Going through this exercise can help ensure you have enough funds to make your loan payments each month and avoid getting hit with late fees or, worse, defaulting on your student loans.

The Takeaway

There’s no one right way to handle student loan debt. Federal student loan borrowers have access to different student loan repayment strategies that can make paying off your debt more manageable. Private lenders typically also offer several different repayment options and sometimes even forbearance or deferment for borrowers who run into financial difficulty making payments.

No matter what type of student debt you have, you can utilize smart repayment strategies (such as making extra payments towards principal or using the avalanche repayment method) to pay off your loans faster and save money on interest.

If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.

FAQ

How do you pay off $70K in student loans?

There are many ways to pay off $70,000 in student loans, depending on the type of loans you have and repayment goals.

If you have federal student loans, you might sign up for an income-driven repayment (IDR) plan, which bases your payments on your income. In addition, you could have any remaining balance forgiven after 20 to 30 years, depending on the plan.

For any type of student loan (federal or private), you might consider refinancing. This involves taking out a new private student loan and using it to pay off your existing student loans. Depending on your credit, you might get a lower interest rate, which could save you money on interest. You might also be able to shorten your loan term, and pay off your loans faster. Just keep in mind that refinancing federal student loans with a private lender means losing federal benefits like income-based repayment and forgiveness options.

What is the best student loan repayment method?

The best repayment method for you depends on the type of student loans you have, your repayment goals, and your current financial situation.

If you’re looking to repay unsubsidized federal or private student loans as quickly as possible, you might consider paying interest while you’re in school and then, after you graduate, making extra payments toward the principal whenever you can. Another way to potentially pay off your loans faster is to refinance. This may allow you to lower your interest rate and/or shorten your repayment term. Just keep in mind that refinancing federal student loans with a private lender means losing federal benefits like income-based repayment and forgiveness options.

What age group holds the most student loan debt?

Borrowers between age 50 and 61 hold the most student debt, with an average student loan balance of $46,790, according to the Education Data Initiative.

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student loans are not a substitute for federal loans, grants, and work-study programs. We encourage you to evaluate all your federal student aid options before you consider any private loans, including ours. Read our FAQs.

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. 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 subject to change. This information is current as of 4/22/2025 and is subject to change. SoFi Private Student loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).

SoFi Bank, N.A. and its lending products are not endorsed by or directly affiliated with any college or university unless otherwise disclosed.

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.

SOISL-Q425-027

Your financial aid does not automatically increase every year — it can go up or down based on several factors, and you must reapply annually.

Your financial information is used to calculate the amount of financial aid you receive each year. If your financial circumstances change, you may be eligible for more or less need-based gift aid (the kind you don’t pay back) each year. The maximum amount you can take out in federal Direct Loans, however, does increase for each year you’re in school.

Here’s a closer look at how your financial aid is calculated each year you are in school and why it might go up or down after freshman year.

Do You Have to Apply for Financial Aid Every Year?

You must apply for financial aid each year by filling out the Free Application for Federal Student Aid (FAFSA®). Any changes in your family’s circumstances can affect the amount of need-based aid you are awarded. Need-based aid includes grants, scholarships, work-study, and subsidized federal student loans (in which the government pays your interest while you are in school and for six months after you graduate).

It’s a good idea to fill out your FAFSA soon after it becomes available. This ensures you’ll be considered for all types of federal financial aid, including state aid and financial aid funded directly by colleges and universities. Typically the FAFSA opens October 1 for the following academic year.

You’ll want to check the FAFSA filing deadline for your chosen school by going to their financial aid website. Some schools also require other applications for financial aid (such as the CSS profile).


💡 Quick Tip: You’ll make no payments on some private student loans for six months after graduation.

How Do You Fill Out the FAFSA?

You can fill out the FAFSA online at studentaid.gov. Here’s how:

1. Create an FSA ID. This is a username and password that you will need to complete the FAFSA (as well as take out loans and log in to all Federal Student Aid websites). Keep in mind that parents need to create their own account using their own unique email address and password.

2. Gather documents. You’ll find a list of the documents you need to complete the FAFSA right here.

3. Fill out the application. You’ll need to supply both personal and financial information. If you have any questions as you go along, you can go to the FAFSA Help page. You’ll also have the opportunity to list the schools you are interested in applying to, even if you have yet to apply. This list is not shared with the schools you list.

4. Review your FAFSA Submission Summary. Once your FAFSA has been submitted and processed, you’ll receive an email letting you know your FAFSA Submission Summary is ready to review on studentaid.gov. This contains a summary of the information you entered on the FAFSA and your Student Aid Index, or SAI (formerly called Expected Family Contribution, or EFC). Your SAI is used to determine your eligibility for federal financial aid programs. It’s sent to the colleges you listed on your FAFSA.

Does the Government Decide How Much Money You’ll Be Awarded?

No, the federal government doesn’t decide the exact amount of your financial aid; the financial aid office at your college does. After you complete the FAFSA, the school uses your Student Aid Index (SAI), cost of attendance, and other factors to determine your specific aid package, which can include federal, state, and institutional aid.

That said, the Department of Education does set certain limits on the amount of aid any student can get, which can change each year. For example, if you are a dependent student you can borrow up to $5,500 (no more than $3,500 of this amount may be in subsidized loans) for your first year in college. For your second year, you can borrow up to $6,500 (no more than $4,500 in subsidized loans). The amount increases each year.

What Role Does Your School of Choice Play?

The financial aid office at each college you apply to will determine how much financial aid you’re eligible to receive. How much you’ll receive depends on several factors, including your:

•   SAI (this number is an indicator of your financial need)

•   Enrollment status (full-time students are generally eligible for more aid than part-time students)

•   Cost of attendance at the school

The basic formula for distributing federal financial aid looks like this:

School’s cost of attendance – SAI = Financial need

Can You Keep Your Financial Aid Amount Consistent?

There are no guarantees that you’ll receive the same amount of federal student aid from year to year. But there are some things you can do to maintain your financial aid eligibility.

One is to make sure that you achieve Satisfactory Academic Progress (SAP) each year. Each school has an SAP policy for federal student aid purposes; to see your school’s, you can check your school’s website or ask someone at the financial aid office.

The other way to keep your financial aid as consistent as possible is to fill out the FAFSA each year. Financial aid eligibility does not carry over from one year to the next.

Can You Appeal Your Financial Aid?

If you receive a financial aid offer from a college you’d like to attend but it’s less than what you need, one option is to write an appeal letter. Your school may or may not change its decision, but it may be worthwhile to try, especially if you believe you have other information that they didn’t take into account, or if something significant has changed.

If, for example, one of your parents lost a job recently or someone in the family experienced a medical emergency, then an appeal letter might help. Tips that might help you to write a successful one include:

•  Look for a contact in your school’s financial aid office (ideally the person who has been assigned to your case) and address that person directly.

•  Be polite, professional, and respectful.

•  Be clear about what you’re requesting, including how much aid you need and why.

•  Be concise and compelling, keeping in mind that the financial aid office is likely busy.

•  Provide relevant documentation, such as a doctor’s note or eviction notice. Perhaps give them a breakdown of how you’d spend the money you’re requesting.

•  Carefully proofread your letter and ask a trusted friend or family member to do so, as well.

Paying for College If You Didn’t Receive Federal Financial Aid

If you didn’t receive the federal student aid you anticipated or hoped for, an appeal letter isn’t successful, or you don’t qualify for need-based aid, then other options for paying for college include:

•  Applying for additional scholarships There are smaller scholarships and grants available through private companies, community organizations, and nonprofits. Though each scholarship may be small, if you can cobble together a few, they can help make a dent in your college costs. You can talk to your school’s financial aid department for leads or use one of the many online scholarship search tools.

•  Tapping federal student loans Your financial aid package will tell you what federal student loans you qualify for. These may include Direct Subsidized Loans and/or Direct Unsubsidized Loans (in which students are responsible for all interest accrued). Federal student loans come with low interest rates and valuable protections, such as income-driven repayment and forbearance programs.

•  Private student loans If your financial aid package (including federal student loans) isn’t enough to cover all of your school costs, you may next want to look into private student loans. These are available through banks, credit unions, and private lenders. Loan limits vary by lender, but you can often get up to the total cost of attendance at your chosen school, minus any financial aid you received. Interest rates may be fixed or variable and are set by the lender. Generally, borrowers (or their parent cosigners) who have strong credit qualify for the lowest rates.

•  Part-time job Your financial aid package may include the opportunity to find a job through the Federal Work-Study program. This program funds part-time jobs for college students with financial need. Even if you don’t qualify for work-study, you can look for a job on or off campus to help cover your expenses.

💡 Quick Tip: It’s a good idea to understand the pros and cons of private student loans and federal student loans before committing to them.

The Takeaway

It is important to remember that financial aid does not automatically increase each year. To ensure you receive the aid you need, you must reapply annually by completing the FAFSA. Eligibility is calculated annually based on your financial situation, enrollment status, and the cost of attendance at your chosen school. Understanding how your financial aid is determined and taking proactive steps (like maintaining Satisfactory Academic Progress and appealing aid decisions when necessary) can help you manage your college costs effectively.

If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.

FAQ

Does your financial aid change every year?

Yes, your financial aid can change every year. It can go up or down based on changes in your family’s financial situation, your enrollment status, and the cost of your chosen school. You must reapply for aid annually by completing the FAFSA.

Do colleges recalculate financial aid every year?

Yes, colleges recalculate financial aid every year. When you submit your FAFSA annually, the financial aid office at your school will use the updated information, including your Student Aid Index (SAI) and their cost of attendance, to determine your new financial aid package. This means your aid can change from one year to the next.

Can financial aid be increased?

Yes, financial aid can be increased. If your financial circumstances change significantly after you’ve received your initial aid offer (such as a job loss or medical emergency), you can write an appeal letter to your school’s financial aid office. You’ll need to provide documentation to support your appeal and clearly state the amount of additional aid you’re requesting and why.

What is the #1 most common FAFSA mistake?

One of the most common FAFSA mistakes is not completing the form at all. Many students assume they won’t qualify for aid because of their family’s income or other factors, so they skip it. However, the FAFSA is used to determine eligibility for many types of aid, including low-interest federal loans (that are not need-based) and institutional merit aid. Even if you think you won’t get grants or scholarships, completing the FAFSA can open doors to other funding options.

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student loans are not a substitute for federal loans, grants, and work-study programs. We encourage you to evaluate all your federal student aid options before you consider any private loans, including ours. Read our FAQs.

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. 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 subject to change. This information is current as of 4/22/2025 and is subject to change. SoFi Private Student loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).

SoFi Bank, N.A. and its lending products are not endorsed by or directly affiliated with any college or university unless otherwise disclosed.

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.

SOISL-Q425-009