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When you’re in school, it can seem like all your money is going toward tuition and books. Still, it’s essential to learn how to budget as a college student.

You may not have a full-time job yet, or even know your major, but managing your money early on could help you save for spring break, uncover monthly savings, and avoid taking out additional student loans.

Here’s how to get started.

4 Steps to Create a Budget in College

Step 1: Calculate Your Income

When it comes to budgeting in college, a good first step is figuring out how much money you actually have to spend. To do this, add up your income. This may include student loans, scholarships, a part-time job, or contributions from your family.

It’s a smart idea to revisit your income regularly, such as at the start of each term. That way, if you’ve switched jobs, had a change in your financial aid package, or received a windfall from your parents, you can adjust the budget accordingly.


💡 Quick Tip: SoFi offers low fixed- or variable-interest rates. So you can get a private student loan that fits your budget.

Step 2: List Your Expenses

If you’re new to learning how to budget as a college student, there’s a little homework involved in figuring out your spending habits. If you’re game for this task, take an evening to list all of your college-related expenses and their cost each month. Then categorize each expense as either “necessary” or “fun.”

Necessary expenses are essentials, like rent, utilities, books, tuition, food, and gas. Fun expenses are related to entertainment — think dining out, bar tabs, tickets to athletic games, travel, or clothes.

You may also want to consider making room in the budget to build your savings. Double-check if any of your student loans have interest that needs to be paid immediately. Even if interest payments are deferred, it’s smart to start paying down student loan debt now. After all, every little bit helps.

Step 3: Choose a Budgeting Method

There’s no one-size-fit-all approach to budgeting for college students, and it may take some trial and error before you find the type that works for you. Here are some popular budgeting methods you may want to explore:

50/30/20 Budget

In the 50/30/20 budget, you allocate 50% of your after-tax dollars to “needs,” 30% to “wants,” and the remaining 20% to savings.

Recommended: See how your money is categorized using the 50/30/20 Monthly Budget Calculator.

The 70% Rule

The 70% rule is similar to the 50/30/20 budget. Here, you allocate 70% of your after-tax income to living expenses, 20% to paying down debt or — if you have no debt — to savings, and 10% to whatever you wish.

Zero-Sum Budget

The goal of a zero-sum budget is to assign a purpose to all of your monthly after-tax income. Start by assigning dollars to each of your required bills, like rent, groceries, or student loan payments. Then figure out how much is left over for discretionary spending and saving, and assign where exactly that money is going.

Pay Yourself First

The premise of “pay yourself first” is simple: Assign money for savings or other financial goals, and spend the remaining money however you wish.

Envelope Budget

With the envelope budgeting method, you take out a set amount of cash every month to spend in each budget category, such as “groceries” or “transportation.” The money is stored separately in different envelopes, which you draw from when needed. (You can also adapt this budgeting method to use your debit card — just be sure to keep track of your spending.)

Line-Item Budget

A line-item budget can help you keep track of monthly expenditures. Using a spreadsheet or a pencil and paper, simply list your income for the month (or school term, if you’d prefer). Then, list each expense you have during the month. This allows you to see your income and cash that’s flowing out. If you’d like to see how your current spending stacks up, you can include a list of past expenses.

Shared Cost Splitting

If you have a roommate or are living with a partner, you split shared monthly bills right down the middle (or whatever percentage you both agree on). Each person pays their part.

Recommended: How to Save Money in College

Step 4: Set Up a System to Track Your Budget

There are at least three good ways to help you budget in college:

•   Whiteboards

•   Budget-tracking apps

•   Spreadsheets

All three methods work similarly. You’ll record your income and expenses for the month. At the end of the month, you’ll look back at how much you brought in and how much you spent so you can make adjustments for the next month.

A whiteboard works particularly well if you have roommates and split your bills. It helps keep everyone accountable and serves as a good reminder to pay your bills on time. In the whiteboard scenario, you can record what you spent for the day, and update your totals every day. It’s best to put the whiteboard in a spot where you can see it, such as by your desk or on the fridge.

A budget-tracking app on your phone lets you take your budget on the go. Budget apps can link to your bank and credit card accounts, so every time you make a transaction, the app automatically records it.

You can set up your budget by adding new categories, and maybe allow notifications so you get a warning when you’re close to going over on your burrito budget.

You can also learn how to budget in college by making a simple spreadsheet. Build a virtual spreadsheet with Google Sheets or Excel, using a new tab for each month in the year so you can separate monthly expenses.

This method is more manual than an app, requiring you to look at your bank or credit card statements and manually record each transaction in your budget.

Tips for Sticking to Your College Budget

Managing your money as a college student doesn’t have to be overly complicated. Here are some ways you can live within your means:

•   Build a financial cushion into your budget.

•   Start an emergency fund.

•   Overestimate your expenses — and underestimate your income.

•   Take advantage of free events in your area.

•   Save on food by cooking your own meals.

•   Set financial goals each month or school term to help you stay focused and motivated.

💡 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 lower rate.

The Takeaway

If you’re in school and are new to taking financial ownership, you might not know how to track income and expenditures — or want to. But learning how to budget money in college could help you afford to eat more than ramen, lessen debt, and maybe even spot ways to save money.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

FAQ

How do I set up a basic budget?

To create a basic college student budget, start by listing all your monthly sources of income, including financial aid, earnings from a part-time job, and family contributions. Next, write down all your monthly necessary expenses, such as rent, transportation, and groceries. Subtract your fixed expenses from the monthly spending allotment. Whatever is left over can be used to cover non-essential expenses, like dining out, travel, and buying clothes.

What is a 50/30/20 budget for college students?

With the 50/30/20 budget, you assign 50% of your after-tax dollars to fixed expenses, such as rent, food, utilities, insurance, and car and student loan payments. Next, allocate 30% of your money to variable expenses, like travel, dining out, and entertainment. Finally, set aside the remaining 20% to savings.

What tools can college students use to manage their budget?

There is no shortage of options when it comes to tools to manage a budget. A budgeting app, spreadsheet, or even a pen and paper can all do the trick. Your bank may also offer budgeting tools.

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

This content is provided for informational and educational purposes only and should not be construed as financial advice.

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

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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Parent PLUS loan forgiveness provides financial relief to parents who borrowed money to cover the cost of their children’s college or career school. It isn’t always a quick fix, but there are certain federal and private programs that might offer the financial forgiveness needed.

Keep reading to learn more about the available student loan forgiveness possibilities for Parent PLUS loans.

Are Parent Plus Loans Eligible for Student Loan Forgiveness?

Parent PLUS loans are eligible for several of the same student loan forgiveness programs as federal student loans for students, including:

•   Borrower Defense Loan Discharge

•   Total and Permanent Disability (TPD) Discharge

•   Public Service Loan Forgiveness (PSLF)

That said, Parent PLUS loans generally have fewer repayment and forgiveness options. Parent PLUS loans do not directly qualify for most income-driven plans. And guidelines are strict for the programs that parent loans are eligible for.

Refinancing Parent PLUS loans is another option for borrowers. With refinancing, you apply for a new loan from a private lender that ideally has a lower interest rate.

It’s important to note that refinancing a PLUS loan will eliminate it from any federal repayment plans and benefits.

💡 Quick Tip: Some student loan refinance lenders offer a no-required-fees option, saving borrowers money.

Parent Student Loan Forgiveness Program

As mentioned above, a Parent PLUS loan may be eligible for parent student loan forgiveness through the Public Service Loan Forgiveness program. To qualify, the loan must be repaid under the Income-Contingent Repayment Plan (ICR). Other forgiveness options may also be available through a borrower’s state or in certain situations as outlined below.

Income-Contingent Repayment (ICR)

An Income-Contingent Repayment plan is the only income-driven repayment plan that’s currently available for Parent PLUS borrowers. In order to qualify, parent borrowers must first consolidate their loans into a Direct Consolidation Loan, then repay that loan under the ICR plan. Bear in mind:

Bear in mind:

•   A Parent PLUS loan that’s included in a Direct Consolidation Loan could be eligible for Income-Contingent Repayment.

•   A Parent PLUS loan that’s included in the Federal Direct Loan Program or the Federal Family Education Loan Program (FFELP) is also eligible for ICR if it’s included in the Federal Direct Consolidation Loan.

It’s important to be aware that as of July 1, 2026, the ICR plan will be changing, as a result of the big U.S. domestic policy bill that was passed in the summer of 2025. Parent PLUS loan holders must consolidate their loans before July 1, 2026 and enroll in ICR. Any Parent PLUS loans consolidated after that date will not be eligible for ICR.

The ICR plan is an income-driven repayment plan. Monthly payments are the lesser of what you would pay on a repayment plan with a fixed monthly payment over 12 years, adjusted based on your income, or 20% of your discretionary income. After a payment period of 25 years, any remaining loan balance will be forgiven.

Typically, the IRS considers canceled debt a form of taxable income, but the American Rescue Plan Act of 2021 made student loan forgiveness tax-free through 2025 on federal returns. Some states tax student loan forgiveness amounts; you can consult with a tax professional about your situation.

Public Service Loan Forgiveness (PSLF)

Qualified borrowers with Parent PLUS loans may be eligible for the Public Service Loan Forgiveness Program. In order to pursue that option, they must first consolidate the Parent PLUS loan into a Direct Consolidation Loan.

Then, after they’ve made 120 qualifying payments, borrowers may become eligible for the PSLF. The parent borrower (not the student) must be employed full-time in a qualifying public service job. PSLF also has strict requirements such as certifying employment, so it’s important to follow instructions closely if pursuing this option.

Student Loan Forgiveness for Death of Parent

Federal student loans qualify for loan “discharge” when the borrower dies. In the case of Parent PLUS loans, they are also discharged if the student who received the borrowed funds dies.

In order to qualify for federal student loan discharge due to death, borrowers must provide a copy of a death certificate to either the U.S. Department of Education or the loan servicer.

Some, but not all, private lenders discharge student loans after the student or loan holder dies.

Recommended: Can Student Loans Be Discharged?

State Parent PLUS Student Loan Forgiveness Programs

Many individual states offer some sort of student loan repayment assistance or student loan forgiveness programs for Parent PLUS loan borrowers.

For an overview of options available in different states, you can take a look at SoFi’s student loan forgiveness guide.

Disability

In the event of the borrower becoming totally and permanently disabled, a Parent PLUS loan may be discharged. To qualify for a Total and Permanent Disability (TPD) discharge, borrowers must complete and submit a TPD discharge application, as well as documentation showing that they meet the requirements for being considered totally and permanently disabled.

Note that in order to qualify for TPD, the parent borrower must be considered disabled. This type of forgiveness does not apply to Parent PLUS loans in the event that the student becomes disabled.

Bankruptcy

If a borrower can demonstrate that repaying a Parent PLUS loan would be an undue financial hardship on them, they might be able to have the loan discharged in bankruptcy. However, the process is complicated. First, the borrower must file an action known as an “adversarial proceeding.” They must also file for bankruptcy and show the bankruptcy court that undue hardship would be the result if they paid the loan.

Having student loans discharged in bankruptcy is challenging. Proving undue hardship varies depending on the court that’s granting it, but many rulings look at these criteria these criteria in order to discharge the student loan:

•  Maintaining a minimal standard of living for the borrower and their dependents is deemed impossible if they’re forced to repay their student loans.

•  The borrower’s current financial situation will likely continue for the majority of the repayment period.

•  The borrower has made a “good faith” effort to repay their student loans.

Closed School Discharge

For parent borrowers whose children attended a school that closed while they were enrolled or who withdrew from the school within 180 days before its closure, a Closed School Discharge is another available form of student loan forgiveness that may be an option.

If you meet the eligibility requirements for a discharge of loans you obtained for your child to attend a school that closed, your loan holder will automatically send you an application you can submit to your loan servicer.

Or you can contact your loan servicer for an application.

Borrower Defense

Borrower Defense Loan Discharge is potentially available to Parent PLUS borrowers whose children were misled by their college or university or whose college or university engaged in certain forms of misconduct or violation of state laws.

To make a case for borrower defense, the Parent PLUS borrower must submit a “materially complete” application that contains such information as what the school’s misconduct consisted of and when it occurred, how the misconduct affected your child’s decision to attend the school or your decision to take out the Parent PLUS loan, and a description of the harm experienced because of the misconduct.

💡 Quick Tip: Federal parent PLUS loans might be a good candidate for refinancing to a lower rate.

Alternatives to Parent Plus Student Loan Forgiveness

When it comes to Parent PLUS loans, there are a few ways to get out of student loan debt, including the scenarios outlined below.

Refinance Parent Plus Loans

Refinancing a Parent PLUS loan is another option that could provide some financial relief. However, in doing so, you’ll lose the government benefits associated with your federal loans, as briefly mentioned above, such as:

•   Forbearance options or options to defer your student loans

•   Income-driven repayment options

•   Student loan forgiveness

Refinancing a Parent PLUS loan into your child’s name is another option, which some borrowers opt for once their child has graduated and started working. Some private lenders offer this type of refinancing option to those who qualify, but not all do.

Transfer Parent Plus Student Loan to Student

Transferring Parent PLUS loans to a student can be complicated. There isn’t a federal loan program available that will conduct this exchange, and, as mentioned above, some private lenders don’t offer this option.

However, other private lenders, like SoFi, allow qualifying dependents to take out a refinanced student loan, which pays off the PLUS loan of their parent.

Explore Private Student Loan Options for Parents

Banks, credit unions, and online lenders typically offer private student loans for parents who want to help their children pay for college as well as refinancing options for parents and students.

Refinancing options will vary by lenders and some may be willing to refinance a Parent PLUS loan into a private refinanced loan in the student’s name. In addition to competitive interest rates and flexible terms, SoFi does allow students that qualify to take over their parent’s loan during the refinancing process. Interest rates and terms may vary based on individual criteria such as income, credit score, and history.

The Takeaway

Parent PLUS Loan forgiveness offers financial relief to parents who borrowed money to help their child pay for college. To receive federal relief for Parent PLUS loans, parent borrowers have options such as enrolling in the Income-Contingent Repayment plan, pursuing Public Service Loan Forgiveness, taking advantage of a state Parent PLUS student loan forgiveness program, or opting for student loan refinancing.

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 do I do if I can’t pay my Parent PLUS loans?

If you can’t pay your Parent PLUS loans, you have a few options. You may be able to qualify for Public Service Loan Forgiveness (you’ll need to consolidate the loans first); refinance the loans, which may lower your monthly payments; or consolidate them and repay them through the Income-Contingent Repayment Plan. You can also check to see if your state offers forgiveness programs for Parent PLUS loan borrowers.

Can I transfer my Parent PLUS loans to my child?

You cannot directly transfer your Parent PLUS loans to your child. However, some private lenders may allow you to do something similar through refinancing. Here’s how it works: As long as they meet the eligibility requirements, your child refinances the loan in their name, which pays off the original loan and transfers all financial responsibility to them. Just be aware that refinancing federal student loans makes them ineligible for federal benefits and protections.

Can a Parent PLUS loan be discharged due to disability?

Yes, a Parent PLUS loan may be discharged due to disability if the parent borrower (not the student) becomes totally and permanently disabled. This is called a Total and Permanent Disability (TPD) Discharge, and to qualify, the parent must submit a TPD discharge application along with the appropriate documentation showing they meet the requirements.

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 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).

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