Mar
13
2025
Are Student Loans Tax Deductible? What You Should Know About the Student Loan Interest Deduction

How the Student Loan Interest Deduction Works & Who Qualifies

By | Budgeting & Goals, Fresh Out of School, Student Loans, student_loan | No Comments

If you paid interest on your qualified student loans in the previous tax year, you might be eligible for the student loan tax deduction, which allows borrowers to deduct up to $2,500 in interest paid.

Here are some important things to know about the student loan interest deduction and whether you qualify.

Key Points

•   Borrowers can deduct up to $2,500 in student loan interest annually.

•   Eligibility requires being legally obligated to pay interest on a qualified student loan and not filing as married separately.

•   Income limits for full deduction are based on a borrower’s modified adjusted gross income (MAGI), and MAGI limits are typically changed annually.

•   Form 1098-E reports student loan interest a borrower paid over the year and is required for claiming the student loan interest deduction.

•   Other education-related tax benefits include 529 Plans, the American Opportunity Tax Credit, and the Lifetime Learning Credit.

How the Student Loan Tax Deduction Works

With the student loan tax deduction, a borrower can deduct a certain amount of interest they paid on their student loans during the prior tax year.

The interest applies to qualified student loans that were used for tuition and fees; room and board; coursework-related fees like books, supplies, and equipment, and other necessary expenses such as transportation.

So how much student loan interest can you deduct? If you qualify for the full deduction, you can deduct student loan interest up to $2,500 or the total amount of interest you paid on your student loans, whichever is lower. (You don’t need to itemize in order to get the deduction.)

Who Qualifies for the Student Loan Interest Deduction?

To be eligible to deduct student loan interest, individuals must meet the following requirements:

•   You paid interest on a qualified student loan (a loan for you, your spouse, or a dependent) during the tax year.

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

•   Your filing status is anything except married filing separately.

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

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

The student loans in question can be federal or private student loans, as well as refinanced student loans.

What Are the Income Requirements for Student Loan Tax Deduction?

The income requirements for the student loan tax deduction depend on your MAGI and your tax-filing status. The eligible MAGI ranges are typically recalculated annually.

For tax year 2024 (filing in 2025), the student loan interest deduction is worth up to $2,500 for a single filer, head of household, or qualifying widow/widower with a MAGI of $80,000 or less.

For those who exceed a MAGI of $80,000, the deduction begins to phase out. Once their MAGI reaches $95,000 or more, they are no longer able to claim the deduction.

For married couples filing jointly, the phaseout begins with a MAGI of more than $165,000, and eligibility ends at $195,000.

If you have questions about your eligibility, consider consulting a tax professional to make sure you can take advantage of the deduction.

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Other Tax Deductions for Students

In addition to the student loan interest rate deduction, there are other tax breaks that may be available to you if you’re a student, or you’re saving for college or paying for certain education expenses for yourself, a spouse, or a dependent. Here are three other tax benefits to consider:

529 Plans

A 529 college savings plan is a tax-advantaged plan that allows you to save for qualified education expenses — like tuition, lab fees, and textbooks — for yourself or your children. In 2024, you could contribute up to $18,000 per year without triggering gift taxes (the amount you can contribute in 2025 is $19,000), and other family members can contribute to the fund, as well.

Savings can be invested and grow tax free inside the account. And while the federal government doesn’t offer any tax deductions, some states provide tax benefits like deductions from state income tax. Withdrawals must be used to cover qualified expenses; otherwise you will face income taxes and a 10% penalty.

American Opportunity Tax Credit

The American Opportunity Tax Credit (AOTC) helps offset $2,500 in qualified education expenses per student per year for the first four years of higher education. Unlike a tax deduction, tax credits reduce your tax bill on a dollar-for-dollar basis. And if the credit brings your taxes to zero, 40% of whatever remains of the credit amount can be refunded to you, up to $1,000.

To be eligible for the AOTC, you must be getting a degree or another form of recognized education credential. And at the beginning of the tax year, you must be enrolled in school at least half time for one academic period, and you cannot have finished your first four years of higher education at the beginning of the tax year.

Lifetime Learning Credit

The Lifetime Learning Credit (LLC) helps pick up where the AOTC leaves off. While the AOTC only lasts for four years, the LLC helps offset the expense of graduate school and other continuing educational opportunities. The credit can help pay for undergraduate and graduate programs, as well as professional degree courses that help you improve your job skills. The credit is worth $2,000 per tax return, and there is no limit to the number of years you can claim it. Unlike the AOTC, it is not a refundable tax credit.

To be eligible, you, a dependent or someone else must pay qualified education expenses for higher education or pay for the expenses of an eligible student and an eligible educational institution. The eligible student must be yourself, your spouse or a dependent that you have listed on your tax return.

Recommended: Can You Deduct Your Child’s Tuition from Taxes?

Look for Form 1098-E

If you’re wondering how to get the student loan interest deduction, keep an eye out for Form 1098-E, which you will need to file with your tax return. It will be sent out by your loan servicer or lender if you paid at least $600 in interest on your student loans for the tax year in question.

On Form 1098-E, your loan provider reports information on the interest you paid on your student loans throughout the year. The form goes out to student loan borrowers when the tax year ends, typically by mid-February. You can also check for the form on your loan servicer’s website and download a copy.

Note that you won’t receive this student loan tax form if you paid less than $600 in interest on your loan during the tax year.

Calculating Your Student Loan Interest Deduction

To figure out how much of a student loan interest deduction you can claim, start with your MAGI. If your MAGI is in the range to qualify for the full deduction, you’ll be eligible for $2,500 or the amount you paid in interest on your student loans during the tax year, whichever amount is less. (As you are calculating your MAGI, if you’re wondering, do student loans count as income, no, they do not.)

However, if your MAGI falls into the range where student interest deduction is reduced (which is more than $80,000 for single filers and $165,000 for joint filers in 2024), you can generally follow the instructions on the student loan interest deduction worksheet in Schedule 1 of Form 1040 to figure out the amount of your deduction when filing your federal income taxes. Then you can enter the calculated interest amount on Schedule 1 of the 1040 under “Adjustments to Income.”

One thing to note: For loans made before September 1, 2024, loan origination fees and/or capitalized interest may not be included in the amount of interest Form 1098-E says you paid. In this case, Box 2 on the form will be checked. If that applies to you, to calculate the full value of the interest deduction, start with the amount of interest the form says you paid, and then add any interest you paid on qualified origination fees and capitalized interest. Just make sure these amounts don’t add up to more than the total you paid on your student loan principal.

You can consult IRS Publication 970 for more information about how to do this, or consult a tax professional.

Common Mistakes to Avoid

Taking the student loan interest deduction can be somewhat complicated because there are a number of requirements involved. These are some common mistakes to watch out for.

•   Misreporting your income. Be sure to calculate your modified adjusted gross income (MAGI) correctly. It’s critical to use the right MAGI when determining if you are eligible for the student loan interest deduction and how much you can claim.

•   Deducting too much. The deduction is capped at $2,500 a year, no matter how much you paid in interest.

•   Deducting interest paid by someone else. If another person made some of your student loan payments for you — your parents, say — you cannot deduct the interest they paid. You can only deduct the interest you paid.

•   Failing to take the deduction. If you are eligible for the student loan interest deduction, be sure to take it. It can sometimes be easy to overlook this deduction in the hustle to get your tax information together.

Strategies to Reduce Student Loan Payments and Interest

Tax credits and deductions are one way to help cover some of the cost of school. Finding ways to lower your student loan payments is another cost-saving measure. Here are a few potential ways to do that.

•   Put money toward student loans by making additional payments to pay down your principal. Doing this may help reduce the amount of interest you owe over the life of the loan. Just make sure your loan does not have any prepayment penalties.

•   Make interest-only payments while you’re still in school on loans for which interest accrues, such as unsubsidized federal loans.

•   Find out if your loan provider offers discounts if you set up automatic payment. Federal Direct Loan holders may be eligible for a 0.25% discount when they sign up for automatic payments, for example.

•   Consider refinancing student loans. When you refinance, you replace your current student loan with a new loan that ideally has a lower interest rate or more favorable terms.

While there are advantages of refinancing student loans, such as possibly lowering your monthly payments, there are disadvantages as well. One major caveat: If you refinance federal loans, they are no longer eligible for federal benefits or protections. Also, you may pay more interest over the life of the loan if you refinance with an extended term. Weigh the options to decide if refinancing is right for you.

The Takeaway

Qualified student loan borrowers can take a student loan interest deduction of up to $2,500 annually. This applies to federal and private student loans as well as refinanced student loans.

You should get a form 1098-E from your loan servicer if you paid at least $600 in interest on your qualified student loans. Before you file for the deduction, make sure you qualify for it, and then figure out whether you are eligible for a full or partial deduction, based on your MAGI.

Whether you qualify for the student loan interest deduction or not, there are a number of ways to lower your monthly student loan payments, including putting additional payments toward your loan principal, signing up for automatic payments, and refinancing your student loans.

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


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

FAQ

How much student loan interest can I deduct?

The amount of student loan interest you can deduct is the lesser of up to $2,500 annually or the amount of interest you paid on your student loans. However, to qualify for the full deduction in 2024, you must have a MAGI of $80,000 or less if you are a single filer, or $165,000 or less if you are filing jointly. You will be eligible for a partial deduction if your MAGI is less than $95,000 for single filers and less than $195,000 for joint filers. Keep in mind that the MAGI limits typically change yearly.

Do I need to itemize my deductions to claim the student loan interest deduction?

No, you do not need to itemize your deduction to claim the student loan interest deduction. The deduction is considered an adjustment to your income, according to the IRS, so there is no need to itemize. You can simply report the amount on Form 1040 when you file your taxes, and include a copy of your Form 1098-E, which shows the student loan interest you paid for the tax year.

Can parents deduct student loan interest if they pay for their child’s loans?

Parents who pay for their child’s student loans can deduct student loan interest only if they are legally obligated to repay the loan — meaning that the loan is in their name or they are a cosigner of the loan. However, if the loan is in the child’s name only, parents cannot take the deduction, even if they paid for their child’s loans. The rules can be confusing, so parents may want to consult a tax professional.

What happens if I refinance my student loans?

Refinanced student loans are eligible for the student loan tax deduction as long as the refinanced loan was used for qualified education expenses and your MAGI falls within the set limits.

Are private student loans eligible for the student loan interest deduction?

Yes, private student loans are eligible for the student loan tax deduction, as are federal loans and refinanced loans. As long as you paid interest on a qualified student loan, your MAGI is less than the specified limit for the year, your filing status is anything except married and filing separately, and you (or your spouse if applicable) can’t be claimed as a dependent on someone else’s return, you are eligible for the deduction as a private student loan borrower.

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 FOREFEIT YOUR EILIGIBILITY 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).

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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.

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.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax 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.

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Feb
26
2025
woman studying

How to Study for the MCATs

By | Building Your Career, Fresh Out of School, Life & Career, Student Loans, student_loan | Comments Off on How to Study for the MCATs

So you want to go to medical school and become a doctor? Then you know that the MCAT, a rigorous test, is likely in your future. Since it’s an important qualifying test for medical school and can be challenging, you likely want to arm yourself with info and prepare well for it.

Here, you’ll learn some of the most important information, such as:

•   What are the MCATs

•   How to start studying for the MCATs

•   How to pay for the MCATs and medical school.

Read on, and hey: You’ve got this!

Key Points

•   The MCAT is a challenging, standardized, multiple-choice exam taken to qualify for medical school admission.

•   A competitive MCAT score is 514 or above, which results in a 70% acceptance rate to medical school.

•   Preparing for the MCAT is important. The Association of American Medical Colleges (AAMC) offers free and paid practice tests for MCAT preparation.

•   The registration fee for the MCAT is $335, with extra fees for changes or late registration.

•   The cost of attending medical school is on the rise. The average debt for medical school graduates is $234,597.

What Are the MCATs?

MCAT stands for Medical College Admission Test® (MCAT®). The test, which the Association of American Medical Colleges (AAMC) creates and administers every year, is multiple-choice and standardized. Some important facts:

•   Medical schools have been utilizing it for more than 90 years to determine which students should gain admission.

•   Most medical schools in the United States and many in Canada will require that students take the MCATs. Every year, more than 85,000 prospective medical school students take it.

•   There are four sections to the MCATs:

◦   Critical analysis and reasoning skills

◦   Biological and biochemical functions of living systems

◦   Chemical and physical foundations of biological systems

◦   Psychological, social, and biological foundations of behavior.

•   Students will receive five scores: one for each section, and then one total score.

◦   In each section, they can get a score ranging from 118 to 132, and the total score ranges from 472 to 528.

◦   Generally, a competitive MCAT score is a total of 514 or above, which results in a 70% acceptance rate to medical school.

The average MCAT score for all medical school applicants is currently 506.3. Usually, students will receive scores 30 to 35 days after they take the exam.

Keep in mind that MCAT scores, while important, are just one part of a medical school application. Medical schools often review other factors, including things like:

•   Your GPA

•   Undergraduate coursework

•   Experience related to the medical field, including research and volunteer work

•   Letters of recommendation

•   Extracurricular activities

•   Personal statement.

Because of this array of inputs, If a student has a high GPA from a competitive undergraduate school, for instance, and they don’t score very high on the MCATs, they may still have a chance of getting into a medical school.

Getting a competitive score on the MCAT can give applicants an edge, especially when applying to ultra-competitive medical schools. One way students can help improve their chances of getting a desirable score on the MCAT is to learn how to study for the unique demands of this test.


💡 Quick Tip: Ready to refinance your student loan? You could save thousands.

Studying for the MCAT

One of the first things a student can do when determining how to prepare for the MCAT is to create a study plan. A well-crafted study plan will review what materials the student should review in order to prepare for the exam.

That said, there’s no one best way to prep for the MCAT. Consider these options; you might use one or a variety of techniques.

The AAMC Website

One great place to get started is the AAMC website, which provides an in-depth outline of the test on their website. Obviously, the same questions students will see on the actual exam won’t be listed, but sample questions that are similar to the real questions are. Students may find helpful tutorials and other content as well.

Online Resources

There are a variety of other online resources students can explore to help them review. For example, the AAMC currently recommends students take a look at Khan Academy’s MCAT Video Collection, where there are more than 1,000 videos as well as thousands of questions that students can use to review.

There are also MCAT study apps like MCAT Prep by MedSchoolCoach and MCAT Prep by Magoosh that students can download and use to study.

Books, Textbooks, and Class Resources

How else to prep for the MCATs? It may also help to buy or borrow books from the library that go into detail on the MCAT. One word of advice: Students should just make sure that the books they’re reading are up to date. Information (and the MCAT) get refreshed often; you don’t want to be studying yesterday’s medical data.

It can also be helpful to review class notes and study guides from courses you’ve taken that are related to MCAT materials. Some schools have study groups and other academic support resources for students who are studying for the MCAT. If you’re currently enrolled in classes, take a look to see what might be offered at your campus. You might luck out with some great ways to learn more.

Practice Tests

AAMC offers official sample MCAT practice exams online. You can access two for free, and others for a cost of $35 each. Taking practice tests can help students familiarize themselves with the exam. Taking practice tests can also be important in helping students understand the timing of each section.

Study Groups and Tutors

Here are other ideas for how to start studying for the MCAT:

•   Getting an MCAT tutor who has taken the test could also be helpful. A tutor will generally be able to provide guidance on what kind of questions a student can expect. Plus, they will likely have hands-on experience with effective methods and tips for studying.

If you decide that how to prep for the MCAT should involve a tutor, ask friends and fellow students who have taken the MCATs recently for recommendations. There are also test preparation companies that provide resources for students to find tutors online or in person. Do check reviews and references.

•   Study groups can also be a tool to help students who are preparing for the MCATs. Students can find others who are on the same path and work together to build proficiency. If possible, find a group where each student has a different strength and weakness. This can maximize students learning from one another.

•   It may help to use a shared calendar or another tool to make sure everyone is on the same page for dates, times, and locations for when the study group will meet.

•   Want to find a study group as part of how to prepare for the MCATs? Search engines, professors’ recommendations, school bulletin boards/online groups, and fellow students are good bets.



💡 Quick Tip: Refinancing could be a great choice for working graduates who have higher-interest graduate PLUS loans, Direct Unsubsidized Loans, and/or private loans.

Important Dates to Keep in Mind

Now that you know the ins and outs of preparing for the MCAT, what about taking the test itself? Students can take the MCATs numerous times throughout the year, from January through September. There are hundreds of test locations around the U.S. and Canada as well as select locations around the globe.

If a student’s preferred MCAT test date or location is not available, they can sign up for email notifications to see if it becomes available down the line.

Recommended: Refinancing Student Loans During Medical School

Paying for the MCATs and Medical School

As you explore the best way to prepare for the MCAT and plan your medical school journey, you’ll likely be keeping costs in mind and thinking about ways to pay for college. Here are details to note.

Paying for the MCATs

The registration fee for the MCAT exam is $335, and that includes distribution of scores. There may be additional fees for changes to a registration, a late registration, and for taking the test at international sites.

The AAMC does offer a Fee Assistance Program to students who are struggling to pay for the test and/or medical school applications. To be eligible for the Fee Assistance Program, students must meet the following eligibility requirements:

•   Be a US Citizen or Lawful Permanent Resident of the US.

•   Meet specific income guidelines for their family size.

Note that the Fee Assistance Program will review financial information of the student and the student’s parents, even if the student is considered independent.

Keep in mind that along with the MCAT fee, applying to medical school can be quite expensive. Most medical schools in the US utilize the AAMC’s American Medical College Application Service® (AMCAS®). To apply to medical schools, students will generally pay a first-time application fee of $175, as well as $46 for each additional school.

Some medical schools may require a secondary application, and those fees range depending on the school. Students may also need additional money to travel to and tour schools.

Recommended: Cash Course: A Student Guide to Money

Medical School Costs

The application process is just one portion of the expense of med school. After being accepted, there’s the cost of tuition, books, and more, and these medical school costs have been rising steeply lately.

•   The average cost per year of medical school at a public school is $53,845, which includes tuition, fees, and living expenses.

•   The average cost per year at a private medical school is $67,950. The average debt for medical school graduates is currently $234,597. Debt after medical school can go even higher when you add in undergraduate loans.

Obviously, that’s a significant number and can make you wonder how to pay for medical school. First, do remember that medical school is a path to a rewarding and challenging career, as well as potentially a lucrative one. The average medical school graduate earns more than $158,000, with high earners enjoying salaries above the $400K mark, according to ZipRecruiter data.

In addition, be sure to search for scholarships and grants you might be eligible for. This type of gift money generally doesn’t need to be repaid.

Paying for School with the Help of SoFi

Paying for the MCATs and medical school can be a challenge. SoFi understands this, which is why they offer students private student loans and the opportunity to refinance their current student loans.

Keep in mind, however, that if you refinance with an extended term, you may pay more interest over the life of the loan. Also note that refinancing federal student loans means forfeiting their benefits and protections, so it may not be the right choice for everyone.

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


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


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 FOREFEIT YOUR EILIGIBILITY 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.

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

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

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

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

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Feb
25
2025
graduates throwing caps

Student Loan Grace Period: How Long Is It?

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

As you prepare for life after graduation, one important step is figuring out whether you’re required to make monthly student loan payments right away or if you have what’s called a “grace period.”

Read on to learn what a grace period is, when it starts, and how you might extend yours. You’ll also find a simple financial to-do list to tackle before you start making student loan payments.

Key Points

•   Grace periods allow new graduates time to get settled before starting student loan payments.

•   Federal student loans typically have a six-month grace period; some Perkins loans have nine months.

•   Private student loans may or may not offer a grace period. Those that do typically offer a six-month grace period for undergraduates.

•   Interest accrues during the grace period for most federal and private student loans.

•   Making early payments can reduce interest costs and the principal balance of student loans.

What Is a Grace Period for Student Loans?

A student loan grace period is a window of time after a student graduates and before they must begin making loan payments. The intent of a grace period is to give new graduates a chance to get a job, get settled, select a repayment plan, and start saving a bit before their student loan payment due dates kick in. Most federal student loans have a grace period, and some private student loans do as well.

Grace periods also apply when a student leaves school or drops below half-time enrollment. Active members of the military who are deployed for more than 30 days during their grace period may receive the full grace period upon their return.

How Long Do Student Loan Grace Periods Last?

The grace period for federal student loans is typically six months. Some Perkins loans can have a nine-month grace period. When private lenders offer a grace period on student loans, it’s usually six months as well.

Keep in mind that, as noted above, not all student loans have grace periods.

Which Student Loans Have a Grace Period?

Whether you have a grace period depends on what kind of loans you have. Student loans fall into two main buckets: federal and private student loans.

Federal Student Loans

Most federal student loans have grace periods.

•   Direct Subsidized Loans and Direct Unsubsidized Loans have a six-month grace period.

•   Grad PLUS loans technically don’t have a grace period. But graduate or professional students get an automatic six-month deferment after they graduate, leave school, or drop below half-time enrollment.

•   Parent Plus loans also don’t have a grace period. However, parents can request a six-month deferment after their child graduates, leaves school, or drops below half-time.

Keep in mind: Borrowers who consolidate their federal loans lose their grace period. Once your Direct Consolidation Loan is disbursed, repayment begins approximately two months later. And if you refinance, any grace period is determined by your new private lender.

Private Student Loans

The terms of private student loans vary by lender. Some private loans require that you make payments while you’re still in school. When private lenders do offer a grace period, it’s usually six months for undergraduates and nine months for graduate and professional students.

At SoFi, qualified private student loan borrowers can take advantage of a six-month grace period before payments are due. SoFi also honors existing grace periods on refinanced student loans.

If you’re not sure whether your private student loan has a grace period, check your loan documents or call your student loan servicer.

Will Interest Accrue During the Grace Period?

For most federal and private student loans, interest is charged during the grace period — even though you aren’t making payments on the loan. In some cases, this interest is then added to your total loan balance (a process called capitalization), effectively leaving you to pay interest on your interest.

In 2023, federal regulations changed so that the interest that accrues during a borrower’s grace period is not capitalized. According to the federal student aid website, “the interest that accrues during your grace period will be added to the outstanding balance of your loan, but it will not be capitalized.”

Smart Ways to Use Your Student Loan Grace Period

If you are in a financially tight spot after you graduate or during your break from school, a student loan grace period can offer some much-needed breathing room. Here’s how you can put your grace period to good use.

Organize Your Finances Before Payments Begin

Take this time to create a new post-grad budget. Which approach you use is up to you: the 70-20-10 Rule, the envelope budget method, or zero-based budgeting. The important thing is to determine your monthly income and expenses, setting aside enough to pay down debts and save a little.

Enroll in Autopay to Avoid Late Fees

Missed student loan payments can incur penalties and hurt your credit score. Setting up autopay means one less thing you have to remember. Some student loan lenders (like SoFi!) will even discount your interest rate for setting up automatic payments.

Make Early Payments to Reduce Interest Costs

Just because you don’t have to make payments toward student loans during a grace period doesn’t mean you can’t. If you are in a financial position to make payments — even interest-only payments — during a grace period, you should. It can help keep your loan’s principal balance from growing on certain types of student loans and the accruing interest from potentially capitalizing during your grace period.

Explore Repayment Plan Options Before the Grace Period Ends

Once your grace period is over for your federal loan, you’ll be automatically enrolled in the Standard Repayment plan. However, if you’re concerned about making your payments, several income-driven repayment plans are available. These plans generally reduce your payment to a small percentage of your discretionary income.

Consider Consolidating or Refinancing Your Student Loans

These two terms are often used interchangeably, but there are important differences between them. Both consolidation and refinancing combine and replace existing student loans with a single new loan.

A Direct Consolidation Loan allows you to combine several federal student loans into one new federal loan. The resulting interest rate is the weighted average of prior loan rates, rounded up to the nearest ⅛ of a percent. However, as noted above, borrowers who consolidate their federal loans lose their grace period.

Student loan refinancing is when you consolidate your student loans with a private lender and receive new rates and terms. Your interest rate — which ideally would be lower — is determined by your credit history.

Can You Extend Your Student Loan Grace Period?

If your loan doesn’t qualify for a grace period or you want to extend your grace period, you have options. You may delay your federal student-loan repayment through deferment and forbearance.

What’s the difference? Both are similar to a grace period in that you won’t be responsible for student loan payments for a length of time. The difference is in the interest.

When a loan is in forbearance, loan payments are temporarily paused, but interest will accrue during the forbearance period. This can lead to substantial increases in what you’ll pay for your federal loans over time. You’ll want to consider forbearance very carefully, and look into other options that might be available to you, like income-driven repayment plans. (The good news is that for most types of loans, the interest that accrues during forbearance no longer capitalizes.)

During deferment, by contrast, interest will not accrue on Direct Subsidized Loans, Subsidized Federal Stafford Loans, Federal Perkins Loans, and subsidized portions of Direct Consolidation Loans or Federal Family Education Loan Program (FFEL) Consolidation Loans. Other types of federal loans may still accrue interest during deferment, and that interest will capitalize upon exiting deferment unless you were enrolled in an income-driven repayment plan.

While grace periods are automatic, you’ll need to request a student loan deferment or forbearance and meet certain eligibility requirements. In some cases — during a medical residency or National Guard activation, for example — a lender is required to grant forbearance.

Pros and Cons of Using Your Full Grace Period

A grace period can be beneficial since it gives you time to get your financial situation in order before you need to start repaying your loans. However, there are also disadvantages to a grace period. Here are some pros and cons to weigh as you’re thinking about when to start paying student loans.

Pros

•   A grace period gives you time to find a job after graduation and start earning a salary.

•   You can create a budget and start saving money to put toward your student loan payments.

•   For those with Direct Subsidized loans, interest does not accrue on these loans during the grace period

Cons

•   With many student loans, interest does accrue, which increases the overall amount you need to repay.

•   The interest may also capitalize and be added to the principal balance of your loan so that you’re effectively paying interest on the interest.

•   Having more debt to repay can increase your debt-to-income (DTI) ratio, which could impact your credit score and your ability to borrow money for other purposes, such as taking out a mortgage.

The Takeaway

Federal student loan grace periods are typically six months from your date of graduation, during which you don’t have to make payments. Most federal student loans have grace periods. Private student loan terms vary by lender. However, some lenders, like SoFi, match federal grace periods for undergrad loans.

During your grace period, you may want to make payments anyway, even interest-only payments, to prevent your balance from growing. The grace period is a good time to create a new budget, choose a repayment plan, and set up autopay.

If you have trouble making your payments, you have options, from income-driven repayment plans to loan consolidation to 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.


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

FAQ

How do I know if my student loan has a grace period?

To find out if your student loan has a grace period, check your loan documents. As part of the terms and conditions stated on the documents, you should find information about a grace period if there is one, including how long it is. If you can’t find your loan documents or you’re still not sure if your loan has a grace period, call your loan servicer.

Can I start making payments before my grace period ends?

Yes, you can start making payments before your grace period ends. If you can afford to do so, making early payments can help keep your principal balance from growing and interest from accruing and potentially capitalizing. Even if you make interest-only payments, it can help reduce the total interest you’ll pay on the loan.

What happens if I don’t make a payment after my grace period?

If you fail to make student loan payments after your grace period ends, your loan could eventually go into default. A student loan is considered in default once you are nine months late on your payments. This could damage your credit rating and your future ability to take out a loan. If you’re having trouble making your loan payments, contact your loan servicer right away to see what your options are. You may be able to apply for income-driven repayment, forbearance, or deferment.

Does refinancing affect my grace period?

Whether refinancing affects your grace period depends on the lender. Some private lenders, like SoFi, will honor your grace period, but with others, student loan repayment may begin right away. Check with your refinancing lender.

Are grace periods the same for federal and private student loans?

No, grace periods are not the same for federal and private student loans. Federal student loans typically have a six-month grace period, though some Perkins loans have a nine-month grace period. Not all private lenders offer a grace period. Those who do typically offer a six-month grace period for undergraduates, and nine months for graduate students.

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 FOREFEIT YOUR EILIGIBILITY 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., 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 04/24/2024 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.

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

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

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

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

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Feb
20
2025
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Average Student Loan Debt in 2025: What Borrowers Should Know

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

The average student loan debt for a graduate with a bachelor’s degree is $29,300, according to the latest data from the College Board.

The specific amount of student loan debt a borrower has depends on factors like the type of school they attended, whether or not they pursued an advanced degree, and any scholarships they may have received.

Read on for more details about the average student loan debt after graduation and information about repaying student loans.

Key Points

•   The average student loan debt for a bachelor’s degree graduate is $29,300.

•   Graduates of public four-year colleges owe $35,530; those who attend private nonprofit colleges owe $39,510; and grads of private for-profit schools owe $47,730.

•   Graduate students borrow more, averaging $17,240 a year in federal loans, compared to undergraduates, who averaged $3,900.

•   Average monthly student loan payments range from $200 to $299, but can vary by loan amount, interest rate, and repayment plan.

•   Student loan repayment plans include Standard, Graduated, Extended, and Income-Driven Plans, each with different terms and payment structures.

Average Student Loan Debt After College

As noted, the College Board found that the average student debt after four years of college was $29,300 per borrower for those graduating in 2023 (the latest statistics available). Forty-four percent of borrowers with undergraduate and graduate degrees have student loan debt, according to the most recent data from the Education Data Initiative (EDI).

As of February 2025, the total amount of student loan debt in the U.S. was approximately $1.77 trillion. According to EDI, 42.7 million borrowers have student loan debt.

How Student Loan Debt Has Changed Over the Last Decade

It’s no secret that college is expensive and has only gotten more costly in the last decade or so. According to data compiled by U.S. News & World Report, the cost of attending in-state public universities increased by nearly 133% from 2005 to 2025.

Student loan debt statistics are just as eye-opening. From 2014 to 2024, total outstanding student loan debt grew from $1.24 trillion to $1.77 trillion in order to cover those costs. This student loan debt is taking a financial toll on graduating students, potentially affecting their credit and home-buying prospects, among other things.

Student Loan Debt at Public vs. Private Colleges

According to the latest information from the Education Data Initiative, graduates of public four-year institutions had an average college debt of $35,530, compared to private, nonprofit school borrowers, who graduated with an average debt of $39,510.

Those who attended four-year private for-profit colleges had an average debt of $47,730. Students at for-profit schools tend to take out more in student loans.

Undergraduate vs. Graduate Student Loan Debt

There are also some significant differences in the student loan debt of undergraduate and graduate students. The College Board’s annual survey of student aid trends found that, on average, undergraduates took out $3,900 in federal student loans in the 2023-2024 school year. That same year, graduate students took out $17,240 in federal loans.

The Average Student Loan Debt for Borrowers Under 25

There are about 7.1 million people under the age of 24 with student loan debt. As a group, they owe just over $7.5 billion, according to Federal Student Aid, an office of the U.S. Department of Education.

Student Loan Debt by State: How Does It Compare?

Federal student loan debt totals average approximately $29.9 billion per state (including the District of Columbia and Puerto Rico), according to the Education Data Initiative.

The latest data from EDI show that the District of Columbia has the highest student loan debt, and North Dakota has the lowest — as well as the distinction of being the only state in which the average student debt ($29,647 per borrower) is less than $30,000.

These are the 10 states with the highest average student loan debt per borrower:

•   District of Columbia: $54,795

•   Maryland: $43,692

•   Georgia: $42,026

•   Virginia: $40,137

•   Florida: $39,262

•   Illinois: $39,055

•   South Carolina: $38,770

•   North Carolina: $38,695

•   New York: $38,690

•   Delaware: $38,683

The states with the lowest average student loan debt per borrower are:

•   Kansas: $33,119

•   Wisconsin: $32,628

•   Nebraska: $32,377

•   West Virginia: $32,358

•   Oklahoma: $32,103

•   Wyoming: $31,503

•   Puerto Rico: $32,022

•   South Dakota: $30,928

•   Iowa: $30,925

•   North Dakota: $29,647

What’s the Average Monthly Student Loan Payment?

Borrowers’ monthly student loan payment can vary depending on the amount of debt they carry and the type of repayment plan they choose. According to the latest data from the Federal Reserve, typical monthly payments for student loans can range from $200 to $299.

How Long It Takes to Pay Off Student Loans

The standard amount of time it takes to pay off federal student loans is 10 years, but repayment terms can range as long as 20 or 25 years, depending on the repayment plan a borrower opts for.

Options for student loan repayment plans include:

•   Standard Repayment Plan: This gives you 10 years to pay off your loans, and you pay a fixed amount each month. You may pay less overall under this plan because of the relatively short repayment term.

•   Graduated Repayment Plan: Borrowers who choose this plan pay lower monthly payments at the beginning, and the payments gradually increase at two-year intervals. The repayment term is 10 years (30 years for those with a Direct Consolidation Loan).

•   Extended Repayment Plan: Borrowers who owe more than $30,000 in federal student loans may be eligible for this plan. If you qualify, you can extend your loan term up to 25 years, which could make your monthly payments smaller. However, you may pay more in interest overall.

•   Income-driven Repayment (IDR) Plans: These plans base borrowers’ monthly loan payments on their discretionary income and family size. For many borrowers, this means their payments will be lower. The repayment terms for those on income-driven plans is 20 to 25 years. At the end of that time, any remaining balance you owe on your loans may be forgiven.

In general, the sooner a borrower pays off their student loans, the more they may save in the long run because they won’t be accruing interest for as long.

The interest rate on student loans also affects a borrower’s payments. If your student loan interest rate is higher than you’d like, you might want to consider student loan refinancing to see if you can qualify for a lower interest rate or more favorable terms.

Another option is loan consolidation. If you have federal student loans, a Direct Consolidation Loan allows you to combine them into one single loan. Although this may not save you money, it could simplify your payments since you’ll have just one bill to pay.

You can consider the pros and cons of student loan consolidation vs refinancing to determine if either option is right for you.

Refinancing Student Loans With SoFi

Those looking for options to manage student loan payments might consider student loan refinancing. This process involves replacing your current student loans with a new loan from a private lender. Ideally, you may qualify for a lower interest rate.
Borrowers who refinance may also be able to adjust their repayment term. Extending the term could lower your monthly payments, but you might also end up paying more over the life of the loan.

It’s possible to refinance both private and federal student loans. Just be aware that refinancing federal loans with a private lender means losing access to federal benefits like income-based repayment.

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

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

FAQ

Is $50,000 a lot of student debt?

Yes, $50,000 is a significant amount of student loan debt. According to data from the College Board, the average student loan debt in the U.S. for an undergraduate is $29,300.

How many people have student loan debt in the US?

In the U.S., 42.7 million borrowers have student loan debt, according to the Education Data Initiative.

What is the average someone pays a month for student loans?

The average monthly student loan payment is approximately $200 to $299, according to the latest date from the Federal Reserve. However, the amount a borrower pays per month will vary based on factors like their total loan amount, their interest rate, and the repayment plan they selected.

What is the total student loan debt in the U.S. in 2025?

The total amount of student loan debt in the U.S. is approximately $1.77 trillion, as of February 2025, according to the College Board.

How long does it take most borrowers to pay off student loans in 2025?

The time it takes borrowers to pay off their federal student loans typically ranges from 10 to 25 years, depending on their financial situation and the payment plan they’re on. The repayment terms for private student loans vary.

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 FOREFEIT YOUR EILIGIBILITY 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.

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

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

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

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Feb
12
2025
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Can You Get a Student Loan for Summer Classes?

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

Want to squeeze in a couple of classes this summer but not sure how to pay for them? You have several options, including federal and private student loans. The summer loan application process is generally the same as it is for the regular academic year. But the federal government limits how much you can borrow, so it’s important to consider your choice carefully.

Here’s what you need to know about paying for summer classes.

Key Points

•  Students can utilize federal loans like Direct Subsidized, Direct Unsubsidized, and Direct PLUS Loans to finance summer courses.

•  Completing the Free Application for Federal Student Aid (FAFSA) is essential, as it determines eligibility for federal aid applicable to summer sessions.

•  If federal aid doesn’t cover all expenses, private loans are an option, typically allowing borrowing up to the school’s certified cost of attendance.

•  Private student loans usually cover only one academic year, so a separate application may be necessary for summer term funding.

•  Student loans can be used not only for tuition and fees but also for living expenses during the summer term.

Costs of Going to School in the Summer

Tuition is one of the biggest costs associated with going to school in the summer. That said, some colleges offer summer courses at a reduced cost, or you may be able to take classes at a community college for a lower price and transfer the credits to your school. If you don’t plan on living at home, you’ll also need to budget for housing, food, transportation, and other personal expenses.

The short-term cost of going to school during the summer may be worth it in the long run, though. Taking extra classes can help you finish your degree — and start drawing income from a full-time job — faster.

Recommended: What Is the Average Cost of College Tuition?

Ways You Can Find and Get Money for Summer Classes

Just like during the fall or spring terms, financial aid is available during the summer. Let’s take a look at some common types of assistance.

Grants

Grants can help offset the cost of summer courses and typically don’t need to be repaid. One popular type of grant is the Pell Grant, which is awarded by the federal government and based on financial need. Qualifying students can receive Pell Grants for 12 semesters, and in certain circumstances, they may be eligible to receive additional funds for the summer term.

Some schools offer grants to students who are enrolling in summer classes. Contact the financial aid office to see if your school offers this option. Your state may also provide grants to help students cover the cost of summer classes. Visit the website of your state’s department of education to find out if this option is available to you.

Scholarships

Like grants, scholarships usually do not need to be repaid, and in general, you’re free to use the funds for a summer term. There are thousands of available scholarships based on financial need or merit offered by a variety of sources. Searching scholarship databases can help you narrow your options.

Recommended: What You Need to Know About Student Loans, Grants, and Scholarships

Work-Study

Federal Work-Study gives students with financial need part-time employment to help them earn extra money to pay for education expenses. Check with your college’s financial aid office to find out if the school participates in the program.

Student Loans

The loans you apply for to pay for the regular school year can also be used to cover summer courses. There are different types of federal student loans to explore: Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans.

Once you’ve exhausted federal aid options, you may consider private loans to pay for summer classes. Generally, lenders allow you to borrow up to the school-certified cost of attendance.

Federal vs Private Student Loans: How They Compare

Federal student loans are funded by the federal government and offer borrowers protections such as deferment, forbearance, and the option to pursue Public Service Loan Forgiveness. Most federal student loans do not require a credit check, and interest rates are fixed for the life of the loan. Students must fill out the FAFSA annually and be enrolled at least part-time to qualify for aid.

The federal government limits the amount of money students can borrow per academic year and in total, and this includes any aid you receive for summer classes. The limit is based on your dependency status and how long you’ve been in school. For example, in the 2024-25 academic year, a first-year dependent undergraduate may qualify for up to $5,500 in student loans, with a limit of $3,500 on what can be subsidized. An independent first-year undergraduate student may qualify for up to $9,500 in student loans, with a limit of $3,500 on what can be subsidized.

Private Loans

Private loans are offered by private lenders, such as banks, credit unions, and online lenders. Interest rates may be fixed or variable and are determined by the lender based on criteria including an applicant’s financial history and credit score. Many lenders require students to be enrolled in school at least part time.

Depending on the loan terms, borrowers may be required to make payments while they are enrolled in school, and they may or may not provide a grace period. Private student loans also lack the borrower protections afforded to federal student loans.

Students who take out the maximum amount of federal aid may consider private loans as an option to pay for summer classes. Generally, private lenders allow you to borrow up to the school-certified cost of attendance.

Recommended: A Complete Guide to Private Student Loans

When Applications Are Due

FAFSA applications for the following academic year are typically due around the end of June. The application requires borrowers to check the school year in which the funds will be used. If you’re submitting a FAFSA for the summer term, ask your school which year to check on the form and if any other forms are required. The sooner you submit the application, the more likely you are to receive funding, since many sources of aid are offered on a first-come, first-served basis.

What You’ll Need to Apply

To help the FAFSA application process go smoothly, it helps to have some information and a few documents on hand. This includes your Social Security number (or Alien Registration number if you’re an eligible noncitizen); your federal income tax returns, W-2s, and other records of income; bank statements and any record of investments; records of untaxed income, if applicable; and your FSA ID. Dependent students will need most of that information for their parents.

If you’re applying for a private student loan, you’ll apply directly with the lender. Applicants typically need to have a solid credit history, proof of income, be at least 18, and be a U.S. resident. Adding a cosigner to the loan may be an option that can help potential borrowers strengthen their application.

Recommended: Do I Need a Student Loan Cosigner?

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Understand Your Loan Options

When considering student loans for summer classes, it’s important to explore all available options. Federal student loans, such as Direct Subsidized and Unsubsidized Loans, may be available if you meet eligibility requirements and have remaining aid from the academic year.

If federal aid isn’t enough, private student loans can help fill the gap, offering flexible borrowing limits based on your school’s cost of attendance. However, private loans typically require a credit check and may have higher interest rates than federal options.

Comparing loan terms, interest rates, and repayment options will help you choose the best financial solution for your summer coursework.

How to Pay for Summer Classes

There are several ways to finance your summer coursework, depending on your financial situation and eligibility. Consider the following options to cover tuition and related expenses:

•  Federal student aid: Use remaining federal loans or apply for a Pell Grant if eligible.

•  Private student loans: Borrow from private lenders if federal aid isn’t sufficient.

•  Scholarships and grants: Search for summer-specific funding opportunities that don’t require repayment.

•  Work-study programs: Earn money through on-campus or part-time jobs while taking classes.

•  Personal savings or payment plans: Use savings or set up a tuition payment plan with your school.

Evaluating these options carefully can help you find the most cost-effective way to pay for your summer courses.

The Takeaway

If you’re considering enrolling in summer classes, financial aid can help you cover the bill. Grants, scholarships, work-study, internships, and part-time jobs are all options to explore, as are federal and private student loans.

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.


Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.

FAQ

Can federal student loans be used to pay for summer classes?

Yes, federal student loans, including Direct Subsidized, Direct Unsubsidized, and Direct PLUS Loans, can be applied toward summer courses. To determine eligibility, students should complete the Free Application for Federal Student Aid (FAFSA).

What should students do if federal aid isn’t sufficient to cover summer class expenses?

If federal aid doesn’t fully cover summer class costs, students might consider private student loans. Private lenders typically allow borrowing up to the school’s certified cost of attendance. It’s important to note that private loans usually cover only one academic year at a time, so a separate application may be necessary for summer term funding.

Are student loans applicable to expenses beyond tuition during the summer term?

Yes, student loans can be used to cover not only tuition and fees but also living expenses during the summer term. This includes costs such as housing, food, transportation, and other related expenses.

Photo credit: iStock/Prostock-Studio

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., 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 04/24/2024 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.

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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Terms and conditions apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or other eligible status, be residing in the U.S., and meet SoFi's underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates reserved for the most creditworthy borrowers. If approved, your actual rate will be within the range of rates at the time of application and will depend on a variety of factors, including term of loan, evaluation of your creditworthiness, income, and other factors. If SoFi is unable to offer you a loan but matches you for a loan with a participating bank, then your rate may be outside the range of rates listed above. Rates and Terms are subject to change at any time without notice. SoFi Personal Loans can be used for any lawful personal, family, or household purposes and may not be used for post-secondary education expenses. Minimum loan amount is $5,000. The average of SoFi Personal Loans funded in 2023 was around $33K. Information current as of 2/26/24. SoFi Personal Loans originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org). See SoFi.com/legal for state-specific license details. See SoFi.com/eligibility for details and state restrictions.

✝ To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

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