SoFi

For the 2024-25 school year, the average cost of tuition and fees for a four-year private college was $43,350, $30,780 for a public four-year college (out-of-state), and $11,610 for a public four-year college (in-state), according to the College Board.

Add in other living expenses and it’s no surprise that students and their families often rely on a combination of funding sources to pay for their education. Students may turn to savings, scholarships, grants, and student loans to find enough money to pay for college.

11 Ways to Pay for College and Other Expenses

Paying for college, plus living expenses, often requires a hodgepodge of funding sources. As mentioned, students rely on things like scholarships, grants, and student loans.

Students attending trade school or community college may also be able to use these sources of funding to pay for their education. Continue reading for details on different ways to pay for college.

1. Fill Out FAFSA and See What Aid You Qualify For

The Free Application for Federal Student Aid, better known as FAFSA®, is the application students will fill out if they are interested in securing any form of federal financial aid. This includes federal scholarships, grants, work-study, and loans. Many schools will also use information provided on the FAFSA to determine school-specific scholarships or grants.

Completing the FAFSA is free — it requires a bit of time, but that’s worth it if you qualify for much-needed funding to pay for schools.

Be sure to compare financial aid packages from each college to understand the net cost at each. Some colleges may have more expensive sticker prices, but offer more aid.

2. Applying for Scholarships

Many colleges and private organizations offer merit-based scholarships. This means money is awarded based on academic or athletic ability, not financial need. There are plenty of databases and scholarship search tools that can help students find scholarships.

Scholarships often have specific requirements, so read the criteria carefully. For instance, you might need to live in a certain state or major in a particular subject to qualify. If you’re unsure whether you qualify, contact the scholarship sponsor.

It may also benefit you to start researching scholarships early. Gather required documents and information to apply so that you are ready to meet any early deadlines. Many scholarships require you to submit a high school transcript, your standardized test scores, a financial aid form, and information about your family’s finances, including your parent’s tax returns from the previous year.

Many scholarships also require you to write an essay and provide at least one letter of recommendation. Be sure to follow all the directions carefully and to keep copies of your application.

Recommended: What Is a Scholarship & How to Get One?

3. Applying for Grants

Unlike scholarships, most grants are based on financial need, not academic achievement. The largest source of need-based grants is the federal government’s Pell Grant program, but there are other federal student grants available.

To qualify for a Pell Grant, you must be a U.S. citizen attending either a two- or four-year undergraduate program. If you have already earned a baccalaureate or professional degree, you won’t be eligible for a federal grant.

Pell Grant amounts are based on financial need, the cost to attend your college, and your enrollment status. The amount awarded will vary based on those factors, but the current maximum award is $7,395 for the 2024-25 academic year.

Many states also distribute grants. Check out SoFi’s financial aid database with state-by-state guides.

4. Asking the College for More Money

While it may seem like a bold move, one strategy for obtaining additional student aid might be asking the college to provide a larger financial aid package. Appealing a financial aid decision is a possibility, but there are no guarantees. Financial aid awards are usually based on information provided on the FAFSA, but in some cases, changes in financial circumstances can lead to an amended financial aid award. Some colleges and universities might also be willing to match a more competitive financial aid offer from a comparable school.

The appeals process might vary based on the school’s policies, so check in with the financial aid office or review the school’s website to determine the exact process.

Many schools will require a letter of explanation. Depending on the circumstances, documentation might be necessary to supplement the information detailed in the appeals letter.

5. Getting a Part-Time Job

Another way to pay for college is to look for a part-time job, either on or off campus. Campus career services offices may also have resources for students looking for part-time work and may even help with resume writing.

Students looking for part-time jobs may want to consider the following types:

Student Research Positions

Bolster your resume while working as a lab assistant or teaching assistant. Some colleges and universities may have research positions available for undergraduate students.

Jobs with Tuition Reimbursement

Some companies may offer tuition reimbursement or support to part-time employees. This means you could earn money to boost your income and also gain some extra funding to pay for your tuition. For example, at Starbucks, part-time employees may qualify for the company’s education assistance program.

Applying for Internships

Internships can be a good way to help you gain work experience and round out your resume. While some internships are unpaid, if you can secure a paid internship it could allow you to earn some extra money and build skills directly applicable to your future career.

Recommended: Top 20 On-campus Jobs for Students

6. Applying for a Tax Credit

Qualifying students — or their parents, if the student is a dependent — may claim the American Opportunity Tax Credit (AOTC) for up to $2,500 for each eligible child attending college. To be eligible, the student must:

•   Be enrolled in a degree program at least half time for one academic period.

•   Have not finished the first four years of higher education at the beginning of the tax year.

•   Have not claimed the AOTC (or the former Hope credit) for more than four tax years.

•   Have not had a felony drug conviction at the end of the tax year.

Another tax credit, the Lifetime Learning Credit (LLC), is also available for qualifying students, but cannot be claimed for the same student on an individual tax return. The maximum benefit of the LLC is $2,000 per tax return, and there is no limit on the number of tax years the credit can be claimed.

Requirements for either of these tax credits may change from year to year, so it’s recommended to check the most recent information before claiming the credit.

7. Federal Student Loans

The U.S. Department of Education oversees the Federal Direct Loan Program which offers a few different types of student loans. Undergraduate students may qualify for subsidized or unsubsidized loans.

Subsidized loans are awarded based on financial need. The interest accrued on a subsidized loan is covered by the Department of Education while the borrower is enrolled at least half-time, during the grace period, and during periods of deferment.

Unsubsidized loans don’t have a financial need requirement, and borrowers are responsible for paying the interest on an unsubsidized loan once it’s disbursed.

Parents of undergraduate students may also qualify for Direct PLUS Loans. Unlike other types of federal loans, a credit check is required for a Direct PLUS Loan.

8. Work-Study

Some students may have been awarded Federal Work-Study as part of their federal student financial aid package. This program is administered by individual colleges or universities, so check with the financial aid office to see if the school participates in the program.

If you are awarded work-study, you’ll still need to find a job that qualifies for the program. Many schools will run an on-campus job database for this sort of thing. Based on your financial aid award, you’ll be allowed to work a certain number of hours each week.

9. Private Student Loans

If you aren’t awarded a scholarship or grant and have exhausted your federal loan options, there are a variety of private student loans you can apply for to help pay for college.

Private loans are offered by banks, credit unions, and other financial institutions. They are not need-based or subsidized, and the lender will often review your credit score among other financial factors. In some cases, you may need to add a cosigner to your application to be approved.

Interest rates and terms vary from lender to lender, so compare loan options before committing.

💡 Quick Tip: New to private student loans? Visit the Private Student Loans Glossary to get familiar with key terms you will see during the process.

10. Use Your Savings

If you’re lucky enough to have money saved away for college, put it to work! Some students may have a 529 savings plan set up in their name. A 529 savings plan is a dedicated college fund that offers certain tax advantages. Money contributed to the plan is invested and can be withdrawn tax-free if it is used for qualified education expenses.

Using money saved up could help you take on less student loans or make it so you can work fewer hours at a part-time gig.

Recommended: Guide to Paying for College for Parents

11. Income-Share Agreements

Income share agreements are made between a student and the school they attend. The college or university lends the student money required to pay for their educational costs, and in exchange the student agrees to pay a share of their future earnings for a fixed amount of time after graduation.

Unlike a student loan where the amount you repay is determined by the interest rate on the loan, the amount you repay for an income share agreement can fluctuate based on how much you earn after you graduate.

Income share agreements can be helpful for students who have exhausted their federal loan options. A potential negative is that students who are high-earners after graduation may end up repaying more than they would if they had borrowed a more traditional loan.

The Takeaway

One place to start figuring out how to pay for college is by speaking with a guidance counselor and doing some research about financing college costs. Understanding the options available can help you and your family figure out what types of funding work best for your situation. Students can use a combination of funding — from student loans to grants and scholarships — to pay for their education.

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 anyone actually pay full price for college?

Some students pay the full sticker price for college. According to the Education Data Initiative, roughly 87% of first-time degree seeking students at four year universities received some form of financial aid.

Can you borrow from a 401(k) to pay for your child’s college?

It is possible to borrow a loan against your 401(k) to pay for your child’s college education. However, when you borrow against your 401(k), it can potentially limit growth in your retirement fund. There are also Parent PLUS Loans available from the federal government or private student loans for parents that could be considered to help pay for your child’s college education without requiring you to withdraw from or borrow against your 401(k). Consider speaking with a qualified financial professional for personalized advice.

Do student loans go away after 7 years or a set amount of time?

Repayment terms for federal student loans range from 10 to 25 years. Private student loan repayment terms may vary by lender.

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 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-Q225-032

The Free Application for Federal Student Aid (FAFSA®) is the first step in the process of obtaining government-provided student aid, including the Pell Grant, which is a need-based award that does not need to be repaid.

Although the Pell Grant vs. FAFSA serve different functions, they both have a role under the broader federal student aid program. The FAFSA provides students access to the Pell Grant, and Pell Grant eligibility is determined by the FAFSA.

What Is FAFSA?

The Free Application for Federal Student Aid is an all-in-one formal application to see if you’re eligible for federal financial aid. Through the FAFSA, students are able to apply for federal grants for college, like the Pell Grant, as well as scholarships, work-study opportunities, and federal student loans from the Department of Education.

As the name indicates, there is no cost to submit a FAFSA. Students will need to complete and submit a new FAFSA for every academic year they are requesting federal aid.

The FAFSA is generally available as early as October 1 for the upcoming academic year. The federal deadline to file the FAFSA is June 30 following the academic year. However, schools and states might have their own FAFSA deadlines to qualify for non-federal aid. Ask your school about its FAFSA deadline and be aware of your state’s deadline on StudentAid.gov.

Recommended: FAFSA Guide

How FAFSA Works

Each FAFSA is applicable to the upcoming academic year. To receive federal financial aid for multiple years of college, as mentioned, you’ll need to complete the FAFSA each year by the deadline.

A Federal Student Aid (FSA) ID is required to manage your federal student aid account, which includes signing your FAFSA digitally. You can create your FSA ID on StudentAid.gov.

Shortly after submitting the FAFSA, either digitally or a paper application, you’ll receive a Student Aid Report. This report is an overview of all the information you’ve provided on your FAFSA (e.g. your and your parents’ personal and financial information), and includes your Student Aid Index number (SAI; formerly called your Expected Family Contribution). At this stage, you’ll need to make any necessary corrections to your FAFSA by the deadline.

Your selected schools will then process your FAFSA and provide you with its financial aid offer. This notice will outline the types of aid you’re eligible for and the amount. It will also provide instructions on how to accept the aid offers you want. The accepted aid will then be sent automatically to your school.

Recommended: How College Financial Aid Works

What Is the Pell Grant?

A Pell Grant is a federal grant program that offers aid to students who show financial need on their FAFSA. Students are typically not required to repay money awarded in the form of the Pell Grant.

It’s generally available to undergraduate students who have not yet earned a bachelors, graduate, or professional degree. This grant program is not available to students who have been incarcerated in a federal or state institution.

When used for qualified educational expenses, Pell Grants are generally not considered taxable income.

How Pell Grants Work

The maximum Pell Grant award a student can receive may vary from year to year, and the amount you qualify to receive depends on your SAI. For the 2025-26 academic year, the maximum award is $7,395.

Pell Grant awards are also limited to 12 semesters (or the equivalent of six years) per student. For example, if you received a Pell Grant award for four years of your undergraduate degree, and return to school to complete a graduate program, you’ll only have two years of lifetime eligibility left to receive Pell Grant funding.

In certain situations, students may be required to repay all or a portion of their Pell Grant. One circumstance that may require repayment is a change in enrollment that may impact your eligibility, such as withdrawing from school. If you are required to repay all or a portion of your Pell Grant, you will be notified by your school.

Pell Grant vs FAFSA

When comparing the differences and similarities between the federal pell grant vs. FAFSA, you’ll find they share some broad attributes, but have significant differences.

The first notable difference is that the FAFSA isn’t a type of financial aid; instead, it’s a general application for multiple federal aid programs. A Pell Grant, on the other hand, is a type of federal aid program that uses the FAFSA to determine if a student is eligible.

Neither the Pell Grant or FAFSA have defined income limits for eligibility. Anyone can submit a FAFSA, regardless of their household income. However, only students who demonstrate financial need are eligible for certain federal aid programs, like the Pell Grant.

The government uses students’ SAI — which is calculated based on a number of factors — to decide Pell Grant eligibility. If your SAI is zero or less, you’ll receive the maximum Pell Grant amount.

Also, both undergraduate- and graduate-level students can submit a FAFSA, but Pell Grants are typically restricted to undergraduate students only.

Which Forms of Financial Aid Should You Prioritize?

If your financial aid award includes a Pell Grant and other types of aid offers, carefully decide which aid you want to accept, and how much.

To avoid graduating school with excessive student debt, consider prioritizing financial aid as follows:

•   Scholarships and grants, like the Pell Grant, which don’t need to be repaid after you graduate.

•   Earned financial aid, like participating in work-study opportunities. You can also consider taking on a part-time job while you’re enrolled in school.

•   Borrowed financial aid, like federal student loans. Federal student loans offer low, fixed rates and protections, like income-driven repayment plans and extended deferment and forbearance. Prioritize federal loans before borrowing private student loans, which don’t guarantee the same benefits.

Recommended: FAFSA Grants & Other Types of Financial Aid

What If You Don’t Qualify for Financial Aid?

Students who don’t qualify for federal financial aid still have options to help finance their college education.

Scholarships

Scholarships are a type of financial aid that doesn’t need to be repaid. They can be need- or merit-based, and are sponsored by nonprofit and private organizations, businesses, professional associations, and more.

Other Grants

Like scholarships, non-federal grants are provided to students based on need or merit. They don’t have to be repaid after graduation making them a good financial aid choice.

Recommended: The Differences Between Grants, Scholarships, and Loans

Private Student Loans

Students can also apply for private student loans. This form of aid must be repaid in full, plus interest. You can find them from private financial institutions, like online lenders, banks, and credit unions. Your school or state might also offer private student loan options.

One thing to know about private student loans, though, is that they lack borrower benefits afforded to federal student loans, and are therefore generally only considered as a last resort option.

Recommended: Guide to Private Student Loans 

The Takeaway

The FAFSA is an application that students must fill out if they are interested in applying for any federal student aid. This includes scholarships, work-study, grants, and federal student loans. A Pell Grant is a type of aid awarded to students who demonstrate exceptional financial need.

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

Can you get a Pell Grant without FAFSA?

No. Completing and submitting a FAFSA is a requirement to apply for a federal Pell Grant. The FAFSA is used by your school to determine your eligibility for Pell Grant aid, and the amount you can receive under this grant program.

Can you get a Pell Grant and other forms of financial aid?

Students who are eligible for a Pell Grant might also be offered other types of financial aid. If you’re eligible, you’ll receive the full Pell Grant amount you’re eligible for, regardless of other existing financial aid.

Do you have to repay a Pell Grant if you don’t graduate?

You might have to repay a portion of your “unearned” Pell Grant if you withdraw from school during the same academic year. Your school will calculate how much of your Pell Grant award you’ve earned based on your scheduled attendance, and tell you the amount you owe.

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 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.

Photo credit: iStock/Ridofranz
SOISL-Q225-033

After several years of interest hikes by the Federal Reserve, student loan refinancing rates aren’t what they used to be. While borrowers could lock in rock-bottom rates around 2.00% a few years ago, today’s rates start closer to 5.00%.

The good news is that rates around 5.00% may be lower than what you currently have, leading to lower monthly payments and long-term savings.

If you’re considering whether to refinance student loans, here’s a closer look at the current student loan refinance landscape so you can make sense of where interest rates stand today.

Understanding Today’s Student Loan Refinance Market

The interest rates in today’s student loan refinance market are higher than they were a few years ago. Around the start of the pandemic, you could find ultra-low refinancing rates around 2.00%. Now, rates start around 4.50% or 5.00% for well-qualified borrowers.

Although starting rates have more than doubled in the past few years, they could still be lower than your current student loan rates. For example, federal Direct Subsidized and Unsubsidized loans for undergraduates currently carry a fixed rate of 6.53%, while Direct PLUS loans for parents and graduate students are at 9.08%.

If your current rates are high, you may find savings through refinancing student loans even in a high interest environment. Just be aware that refinancing federal loans makes them ineligible for federal benefits such as income-driven repayment plans and federal deferment.

What Drives Student Loan Refinance Rates

Student loan refinancing rates are largely influenced by the federal funds rate, which is set by the Federal Reserve. The Fed hiked this rate multiple times over the past few years in an effort to curb inflation. Lenders adjusted their refinance rates in response, which made it more expensive to borrow money.

The good news is that rates have started to come down. The Federal Reserve dropped the federal funds rate a few times starting in September 2024, resulting in a rate decrease of a full percentage point. Currently, rates seem to be holding steady, though that could change in the coming year.

The interest rate you get when you refinance also depends on your financial profile. Lenders offer the lowest rates to borrowers with the strongest finances, which typically means a high credit score, stable income, and low debt-to-income (DTI) ratio.

💡 Recommended: Avergae Interest Rate for Student Loan

How to Know If Refinancing Still Makes Sense in a High Rate Climate

Refinancing student loans in a high-interest environment could still make sense if it would save you money. Although today’s rates are higher than they used to be, they may still be lower than your current rates. Even a decrease of one percentage point could lead to savings on your student debt.

Many lenders let you check your rates without impacting your credit score through prequalification. If you can find a better rate than you have now, refinancing may be worthwhile. Use a student loan refinancing calculator to crunch the numbers on your potential savings.

You may also refinance student loans to adjust your repayment timeline. You can typically choose terms between five and 15 or 20 years. A longer term could make your monthly payments more manageable — however, you may pay more interest over the life of the loan with an extended term. A shorter term could save you money and get you out of debt faster, though your monthly payments would likely be higher.

If you have federal student loans, you might also consider consolidating them and choosing a new repayment plan. Learn more about student loan consolidation vs. refinancing to decide which option might be the right choice for you.

Strategies to Navigate a High Rate Environment

A high-rate environment isn’t ideal, but there are strategies you can use to minimize interest costs and make informed decisions about your student loan debt.

Consider Waiting for Rates to Drop but With a Plan

If today’s rates are too high, you could wait for them to come down. While you wait, you could use this time to strengthen your financial profile. Take steps to strengthen your credit, pay down your debts, and build a stable income history. That way, you’ll be a stronger candidate for student loan refinancing when rates drop.

You might also start researching lenders and checking your rates through loan prequalification. Preparing now will help you hit the ground running when interest rates start to fall.

Locking in a Fixed Rate Now to Avoid Further Hikes

Interest rates can be unpredictable, and there’s always a chance they could climb again. If you have a variable rate on your student loans, it could go up over time, making your loans more expensive and the monthly payments unpredictable. Locking in a fixed rate now could protect you from this economic uncertainty.

Plus, you could always refinance again if rates drop. Many leading refinancing providers don’t charge fees to refinance student loans, so refinancing multiple times might be a smart move for some borrowers.

Exploring Shorter Loan Terms or Smaller Loan Amounts

Opting for a shorter loan term may also help you save on interest, though your monthly payments will typically be higher. Some lenders offer better student loan refinancing rates on shorter repayment terms.

Plus, a short term will help get you out of debt faster, limiting your overall interest charges. If you owe multiple student loans, you could consider refinancing only the high-rate loans that would benefit from refinancing now.

Benefits of Refinancing Despite Higher Rates

Refinancing student loans even when interest rates are high can have several potential benefits:

•   Save money: Refinancing student loans can save you money if you can get a better rate than you have now or pay off your debt faster.

•   Adjust repayment terms: A new repayment schedule could help you accelerate student loan repayment or cut your monthly payments if they’ve become unaffordable.

•   Combine multiple loans into one: If you have several student loans, you can combine them into one new loan, thereby simplifying repayment.

•   Transfer a parent loan to the student: Parent borrowers may want their child to refinance a student loan the parent took out in their own name to assume responsibility for the debt.

Risks of Refinancing During a Period of High Interest Rates

At the same time, refinancing student loans when interest is high has risks:

•   Lose federal protections: If you refinance federal loans, you’ll lose access to federal benefits, such as income-driven repayment plans, forbearance, and deferment.

•   Become ineligible for loan forgiveness: Refinancing federal loans means you’ll forfeit eligibility for federal forgiveness programs like Public Service Loan Forgiveness and Teacher Loan Forgiveness.

•   Have trouble getting approved: Lenders typically look for a strong credit score, stable income, and low DTI ratio. If your financial situation is shaky, you could end up with a high interest rate or have your refinancing application denied.

The Takeaway

A high-interest environment isn’t ideal, but it is still possible to reduce your current student loan rates through refinancing. If you’re considering whether now is a good time to refinance student loans, start by checking your rates through prequalification. Lenders like SoFi let you review offers with no commitment or impact on your credit score.

If you can get a good rate, you may want to consider refinancing. If not, focus on building your credit and financial profile so you’ll be a stronger candidate if rates drop in the future.

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.

FAQ

What is considered a high interest rate for student loan refinancing?

A high interest rate for student loan refinancing is one that’s higher than your current rates, as it could increase your costs of borrowing. Federal student loans currently carry rates between 6.53% and 9.08%, and private student loans start at about 5.00%, so a high refinancing rate would be one that’s even higher.

Should I refinance my student loans now or wait?

Whether to refinance student loans now depends on your situation. Refinancing now could make sense if you can qualify for a lower interest rate. You might also benefit from switching from a variable rate to a fixed rate through refinancing so your monthly payments and long-term loan costs are predictable. However, you might be better off waiting if you can’t qualify for a lower interest rate.

Can I refinance again if interest rates drop later?

Yes, you can refinance student loans again if interest rates drop in the future, as long as you meet a lender’s refinance loan approval requirements. Lenders look at your credit, income, debt-to-income ratio, and other factors when considering your application for student loan refinancing.

How do I know if I’m getting a good refinance rate right now?

You’re getting a good refinance rate if the rate is lower than your current rate and would save you money on your student loans. You can also check your rate against the lender’s current rate offerings to see if it falls on the low end of the range. Finally, you can shop around with different lenders to see if you might get a better rate with a new refinance loan from a new lender.

photo credit: iStock/gorodenkoff

SoFi Student Loan Refinance
Terms and conditions apply. SoFi Refinance Student Loans are private loans. When you refinance federal loans with a SoFi loan, YOU FORFEIT YOUR ELIGIBILITY FOR ALL FEDERAL LOAN BENEFITS, including all flexible federal repayment and forgiveness options that are or may become available to federal student loan borrowers including, but not limited to: Public Service Loan Forgiveness (PSLF), Income-Based Repayment, Income-Contingent Repayment, extended repayment plans, PAYE or SAVE. Lowest rates reserved for the most creditworthy borrowers. Learn more at SoFi.com/eligibility. SoFi Refinance Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).

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.