SoFi

It’s estimated that close to $100 million in scholarships go unclaimed each year and $2 billion in student grants go unclaimed. Typically, the money is not awarded due to lack of applicants. This is good news for students — as those that are willing to put in the time to search for scholarships and grants should be able to find at least a few to help pay their way through college.

The beauty of scholarships and grants is that you almost never need to pay them back. Who doesn’t love gifts? But acquiring them will take at least a little effort.

Where Do You Find Unclaimed Scholarships?

You don’t have to be a 4.0 student or a star athlete to receive scholarships. In fact, the average high school student is eligible for 50-100 different types of scholarships each year. But, scholarships aren’t just going to come to you. You have to be the one to put in the work to find scholarships you qualify for and apply for them.

One of the best ways to find scholarships you are eligible for is through a scholarship search. Scholarship searches are offered by a variety of companies and allow you to filter the scholarships based on your specific qualifications, including your state, area of study, background, ethnicity, and more. Scholarship searches are one of the quickest ways to find quality scholarships throughout the country.

Other ways to find unclaimed scholarships include asking your specific college or university what they offer, using the library’s recommendation section, reaching out to businesses in your field of study, speaking to your high school counselor, and asking religious organizations if they offer scholarships.

Regardless of which methods you use to find scholarships nobody applies for, the reality is they are out there waiting for students to apply for and claim them.

Recommended: Search Grants and Scholarships by State

Two Types of Aid to Lay Claim To

Financial aid can be need-based or merit-based.

Need-Based Aid

Federal need-based aid is determined by the Student Aid Index, or SAI (formerly called the Expected Family Contribution, or EFC) as calculated by the Free Application for Federal Student Aid (FAFSA®).

The Pell Grant, the Department of Education’s biggest grant program, is geared toward students who demonstrate significant financial need, but the total cost of attendance at a particular college also plays a role. The maximum Pell Grant amount for the 2023-2024 academic year is $7,395.

Any student who could use college financial aid has nothing to lose by filling out the FAFSA. And even if you are not eligible for federal aid, realize that most states and schools use FAFSA information to award nonfederal aid, too.

One way to find nonfederal financial aid is to fill out the CSS Profile, which determines eligibility for institutional awards and grants. The CSS Profile awards billions in nonfederal aid to college students each year and can be a great way to find unclaimed scholarships.

Recommended: How to Complete the FAFSA

Merit Aid

Merit scholarships are not based on financial need and are awarded by colleges, employers, individuals, businesses, nonprofits, states, religious groups, and professional and social organizations to academic or athletic achievers, as most of us are aware, but merit aid also may be determined by community involvement, level of dedication to a field of study, race, gender, teacher recommendations, and other criteria.

So who is the biggest source of “free money?” Colleges, according to a recent College Board Trends in Student Aid Report. The U.S. Department of Education awards $46 billion annually in scholarships, and thanks to competition to attract students, nearly every college and university in the country offers merit-based aid in some form.

To find unclaimed scholarships, you could start by thinking about all the ways you have, well, merit — making lists of opportunities and eligibility criteria, and pursuing only the scholarships you’re best qualified for.

Why Would Any Scholarships Go Unclaimed?

So is it true there are obscure scholarships left unclaimed? There is no database that can give precise answers, but it makes sense that when specific parameters exist around a particular scholarship, fewer students will qualify.

For example, scholarships exist for North Korean refugees who are permanently living in the United States. Applicants must have been born in North Korea or the child of someone born in North Korea.

Let’s say you don’t fit those parameters. Other unusual opportunities include the following:

•   If you dazzle your friends with your ability to make prom outfits using only duct tape, then you could win a $10,000 Stuck at Prom scholarship. Seriously.

•   Or maybe you have the best plan ever to survive the zombie apocalypse. If so, you could apply for the Zombie Apocalypse Scholarship offered by Unigo ($2,000).

•   If you live in the Phoenix area and you’re a tall graduating senior, you could be interviewed and measured for the chance to gain all of $250 through the CATS Tall Club program.

While you may not qualify for any of the above-mentioned scholarships, these are just examples of how many are actually out there. You may be surprised at what you find (and what you do actually qualify for!) when conducting your search.

Keeping an Eye Out for Scholarship Scams

Plenty of scholarship and grant money for college is out there waiting to be claimed. Unfortunately, though, there are also financial aid scams, including scholarships that aren’t legitimate. The Department of Education offers tips to protect yourself, including:

•   Know that you don’t need to pay to find scholarships or any other form of financial aid.

•   Check information about scholarship offers at a public library and/or online.

•   Talk to the financial aid department at your college of choice to verify legitimacy.

Also, before students begin a search, they may want to be aware of “scholarships” that are actually sweepstakes because their information may be sold to third parties.

The Takeaway

Finding unclaimed scholarships and grants is the ideal way to fund college because this money does not need to be repaid. To cover all the expenses of college, however, many students will then need to take out federal and/or private student loans.

Although private student loans do not carry the benefits and protections of federal student loans, they can fill gaps when you’ve considered all of your federal grant and loan options, but your expenses still exceed your means.

SoFi offers private student loans with competitive rates, flexible repayment options, and no fees. Loans do not need to be repaid while in school, and SoFi offers a six month grace period after graduation.

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

SoFi 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.

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

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

SOSL0523004

Typically, it does not cost the borrower money to refinance student loans. Most lenders do not charge origination fees or application fees. However, you can end up paying fees if you don’t make your payments on time.

In the right circumstances, refinancing your student loans can help you save both time and money as you work to pay down your student debt, without costing you any money to do so.

Student Loan Refinancing Recap

Student loan refinancing is the process of paying off one or more existing student loans with one new one through a private lender. You can typically refinance both federal and private student loans, and depending on the terms of your current loans and your creditworthiness, you may be able to get a lower interest rate or lower monthly payment.

This process is different from federal student loan consolidation, which involves combining several eligible federal loans into one new loan with a federal loan servicer. While that process can simplify your repayment plan and help you maintain federal loan protections, it typically doesn’t help you save money.

Every situation is different, but with the right refinance loan, you could save hundreds or even thousands of dollars as you pay down your student debt.

That said, there are both benefits and drawbacks to consider before you pull the trigger.

Pros of Student Loan Refinancing

Can Save You Money

If you qualify for a lower interest rate than what you’re currently paying, refinancing your student loans could save you money on interest over the life of the loan. Keep in mind that this includes keeping the loan term the same. If you extend your loan term, you could end up paying more in interest, even with a lower rate.

If you don’t qualify for a lower rate on your own, you may be able to add a cosigner with solid creditworthiness to help improve your chances.

Can Give You More Flexibility

Student loan refinance lenders typically offer a range of repayment terms, allowing you to shorten or lengthen the amount of time you have to pay off your debt.

Simplifies Your Repayment Plan

If you have multiple student loans across more than one servicer or lender, refinancing them all into one new loan can make repayment a little easier.

Cons of Student Loan Refinancing

You’ll Lose Federal Benefits and Protections

If you have federal student loans, refinancing with a private lender will cause you to lose certain benefits and protections, such as access to income-driven repayment plans, federal loan forgiveness programs, and more.

It May Not Save You Money

If your current interest rates are already low, it may be tough to qualify for something even lower. Also, applying for a longer repayment period than what you already have could end up costing you more in interest over the life of the loan.

You May Get Less Help When You’re Struggling

Federal student loans allow you to apply for student loan deferment or forbearance if you’re struggling to make your payments. When you refinance with a private lender, you may not get these same benefits.

Deferment and forbearance options can vary by private lenders. With SoFi, for instance, you may qualify for a deferment if you return to graduate school on a half-time or full-time basis, undergo disability rehabilitation, or serve on active duty in the military.

How Much Does It Cost to Refinance Student Loans?

Refinancing student loans with a private lender typically does not come with any costs to the borrower. Most companies do not charge any fees associated with student loan refinancing. If you are being charged fees (see below), you may want to look elsewhere for your refinance.

Common Fees When Refinancing Your Student Loans

If a lender does charge fees for refinancing, these are some you may run into:

•   Application fee: This fee covers the cost of processing the application and is typically due when you submit your application.

•   Origination fee: Some lenders charge this fee to help cover the costs of processing your loan and disbursing the funds.

•   Late payment fee: Many lenders charge this fee if you miss a payment. Depending on the lender, you may get a grace period between your due date and when the fee is assessed.

•   Returned payment fee: If you try to make a payment but don’t have enough money in your checking account to cover it and no overdraft protection, some lenders may charge you a fee for the failed transaction.

In most cases, you won’t have to pay anything up front to refinance your student loans. With SoFi, there are no application fees, no origination fees, no late fees, and no prepayment penalties.

As you’re shopping around, make sure you read the fine print to understand the cost of refinancing student loans with that particular lender.

Reducing the Cost of Refinancing Student Loans

Because many student loan refinance lenders don’t charge upfront fees, shopping around with those costs in mind can help you improve your chances of finding a low- or no-costs lender.

Keep in mind, though, that some lenders may charge what are called “hidden fees.”

Instead of showing up in marketing material, these fees are often buried deep in the terms and conditions of the loan and can be tough to find if you’re not looking for them.

Taking the time to thoroughly read the terms and conditions before refinancing could help you avoid unexpected fees down the line.

If you get approved for the new loan, you might consider setting up automatic payments to help avoid missing a payment and getting charged a late fee. Some lenders, including SoFi, offer an interest rate discount to qualified borrowers using autopay.

Then, you might make it a goal to always have a buffer in your checking account or overdraft protection to ensure a payment doesn’t get returned.

Considering SoFi to Avoid Upfront and Hidden Costs

If you’re considering refinancing your student loans, shopping around can take time. When refinancing with SoFi, you don’t have to worry about paying upfront costs or hidden fees.

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

Does it cost money to refinance loans?

No, it does not cost money to refinance student loans. Most student loan refinance lenders do not charge fees associated with refinancing — including application fees and origination fees. If you are being charged a fee to refinance, that could be a red flag and you may want to look elsewhere.

What is a finance charge on a student loan refinance?

On a student loan refinance, a finance charge is what you pay the lender beyond the principal balance. This would include interest and any fees associated with the loan.

How much does it cost to consolidate student loans?

If you want to consolidate your federal student loans, there is no application fee associated with a Direct Consolidation Loan. It does not cost the borrower anything to consolidate federal loans.

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