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Dreaming of climbing the ladder at a prestigious finance institution? Or maybe you’re committed to starting a socially-responsible environmental consulting firm. The chances are that if you’re interested in the business world, you’ve considered getting an MBA.

An MBA, or Master’s in Business Administration, is a graduate level degree that confers grads with flexible and expansive knowledge about the business world, from business development to accounting. Internationally recognized, an MBA can set you up for a career in the United States or abroad, in the private sector or even in the NGO and non-profit sector.

Designed to help you hone critical business skills, MBA programs cover a wide variety of topics, from the basics of economic theory to practical seminars on topics like sustainable development. The flexibility of an MBA means that you will be able to tailor your graduate degree to your specific interests, whether that is learning how to rise to C-suite executive or learning how to manage an international non-profit staff.

If you’re wondering “what jobs can you get with an MBA?”—know that each MBA program has different specialties and electives that allow you to hone your business leadership skills in a context that will help push your career forward.

An MBA is one of the most lucrative master’s degrees . But as more and more students pursue graduate degrees, many students may wonder: is an MBA really worth it?

How Much Does an MBA Cost?

The biggest downside to getting an MBA? The cost. The cost of an MBA degree can vary widely by school and program, but many MBA programs will cost you a pretty penny out of pocket , even if you earn some scholarships.

MBA programs can be some of the most expensive master’s degrees out there, landing grads with more than $70,000 of debt, on average. Top schools, like the University of Pennsylvania and Columbia, can cost upwards of $100,000 in tuition alone. Add in the cost of living, and you’re looking at an even higher number.

Of course, there are more affordable MBA programs. For example, the highly ranked University of Wisconsin-Madison has an annual in-state tuition of $19,162. But regardless of which program you choose, you may be looking at taking out hefty student loans to cover the cost of attendance. If you’re going to invest that much money in your degree, you want to make sure that it will pay off.

Is Getting an MBA Worth the Cost?

Even though getting your MBA is expensive at the outset, it is essential to think about how much actual value having that MBA can add to your life and finances.

Your MBA degree sends an automatic signal that you are a professional and an expert. While many business leaders rise through the ranks without an MBA, having the degree is a bonus for employers showing them you are competent and ready for the business world.

Getting your MBA can come with a serious cost, but it can also have a beneficial impact on your earning potential. In fact, the average MBA salary for 2017 graduates was $105,146 .

It’s important to calculate the return on your investment because some MBA degrees might actually cost way more than you can expect to recover in the boost to your salary. Luckily, we’ve helped take some of the work out of it for you with our annual “No BS” MBA rankings, where we surveyed SoFi members to help break down the return on investment for top MBA programs. Picking an MBA program that could give you the most bang for your buck can help make an MBA worth it.

Of course, not all business professionals need or want an MBA. MBA programs typically take two years of full-time study, which can make them impractical for many people who don’t want to (or can’t) stop working for such a long time, especially if they are already moving up the ladder in the business world.

There are some alternatives to full-time MBA programs, some offer online-only classes, while others offer part-time programs that are designed to work with your schedule while you are still working full-time.

Can You Increase the Value of Your MBA?

The bottom line? Look for a program that fits your interests and offers a great debt-to-value ratio. In addition to choosing the right MBA program, you can help increase the value of your MBA degree by thinking smart when it comes to student loans.

One significant benefit of an MBA is that it can seriously boost your salary and your finances. If your financial picture has improved with things like a solid income and consistent credit history, you may be a good candidate for refinancing. Refinancing your student loans after obtaining an MBA can help you lower interest rates, which means that you could pay less interest on your student loans and voilà—that MBA becomes even more valuable.

When you refinance your student loans, you’re taking out a new loan with a private lender which will in effect pay off your existing loans. Refinancing gives you a new, hopefully lower, interest rate, a new term length, and new monthly payments.

Instead of paying multiple student loans, you end up with a straightforward loan payment, ideally with more favorable student loan repayment terms based on your current financial situation. That means that refinancing offers take into account your new degree, your new salary, and your new financial reality.

You can maximize the value of your MBA program by minimizing the amount of debt you take on through finding a high-value program and considering refinancing your loans after graduation. In the end, getting an MBA can help advance your career if you’re dedicated to pursuing a career in business.

Whether you need help paying for school or help paying off the loans you already have, SoFi offers competitive interest rates and great member benefits as well. See what you’re pre-qualified for in just a few minutes.

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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.
Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.
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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Geography matters. Where you live can have an impact on your income, expenses, and overall household budget. By extension, this can affect how much you have to put toward your student loans every month—and how quickly you’re able to pay them off.

Many Americans move around a lot, with the average person changing homes more than 11 times over his or her lifetime. Perhaps you’re contemplating a move to find a new job, be closer to family, pursue graduate school, or find a more affordable locale. When doing your research, it’s worth exploring which states boast conditions that may help you pay off your loans.

A state that lets you keep more of what you make is also likely to leave you with more funds to put toward your student loans.

A state that lets you keep more of what you make (e.g., low income or sales taxes) is also likely to leave you with more funds to put toward your student loans.

If you use extra disposable income to accelerate your student loan payments, as opposed to extra shopping or travel, your loans have a better chance of disappearing more quickly.

Other factors can also speed up loan repayment— increasing your payments, or shortening your term by refinancing your student loans—but living in a state that offers opportunities to increase your income or reduce your bills can be a boon.

Here are some of the top states to live in that may make it easier to pay off student loans quickly, based on the perks they offer. Even if you’re not moving anytime soon, it’s worth knowing how your state stacks up.

No or Low-Income Taxes

Every working American has to pay federal income taxes. But not having to pay anything, or much, in state income taxes can go a long way toward leaving you with more cash to pay your loans off with.

Seven states don’t make you pay any income tax at all. As of 2019, these states are Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming. New Hampshire and Tennessee come close: You only pay state income taxes on income from dividends and investments—not wages. In contrast, the highest personal income tax state is California, which charges 12.3%.

No Sales Tax

Even if you save on income taxes in certain states, you could end up paying more at the register through sales taxes . Five states don’t charge any sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. (Alaska and Montana do allow local—rather than state-level—sales taxes).

You may have noticed that Alaska also doesn’t charge income tax, so that’s double the savings in one state. In Colorado, the sales tax is just 2.9% .

Some states charge sales taxes no higher than 5%, which in 2018 included Alabama, Georgia, Hawaii, Louisiana, Missouri, New York, North Carolina, North Dakota, Oklahoma, South Dakota, Wisconsin, and Wyoming. The cash you save on sales tax can add up and help you pay off your student loans.

Lowest Cost of Living

Paying less for daily expenses, such as housing, transportation, food, and utilities, would potentially leave you with more cash for your student loans. According to a CNBC study from 2018 , the 10 states with the lowest cost of living are (starting with the most affordable): Mississippi, Arkansas, Oklahoma, Michigan, Tennessee, Missouri, Kansas, Alabama, Georgia, and Indiana.

The study took into account prices of housing, food, energy, and other goods. In the cheapest state, Mississippi, the average home costs $214,217 and the average doctor’s visit will set you back $87.58. With prices like those, you could have more room in your budget for paying down your student loans.

Highest Incomes

Earning more money is the obvious way to have more funds for student loans. Although incomes obviously vary by profession, level of education, and other factors, some states have higher-than-average salaries.

These states had median household incomes that were far higher than the 2016 national median of $58,552: Washington ($67,106), California ($67,739), Virginia ($68,114), New Hampshire ($70,936), Connecticut ($73,433), Hawaii ($74,511), Massachusetts ($75,297), New Jersey ($76,126), Alaska ($76,440), and Maryland ($78,945). Of course, high incomes can come with a high cost of living, as well.

Best Job Prospects

High median incomes don’t matter much to you if you’re having trouble finding a job in the first place. According to U.S. News & World Report , these are the 10 best states for employment based on a combination of having a low unemployment rate, high labor-force participation, and high job growth: Hawaii, North Dakota, Colorado, Utah, New Hampshire, Nebraska, Minnesota, Iowa, Massachusetts, and Wisconsin. You may notice that a few of those states overlap with with the highest-income rankings, so you could be more likely to find a job there that also pays well.

Best Cost-of-Living-to-Income Ratio

A high income can disappear quickly in a place with high living costs; conversely, a cheap state becomes less affordable if you can only earn a low income there. One way to gauge true affordability is to compare the “real income” in each state by taking the median household income and accounting for cost of living.

When Money Magazine did this, it found that the states with the highest real incomes were: Alaska ($69,465), Maryland ($69,203), New Hampshire ($66,955), Massachusetts ($66,069), Connecticut, ($65,636), North Dakota ($65,609), Minnesota ($65,183), Utah ($64,858), Virginia ($64,646), and the District of Columbia ($64,639). Some of these overlap with the highest-income states, but in others the cost of living makes a big difference in making incomes stretch further.

Another study revealed the cities that offer the best combination of high wages and affordable expenses. The highest-ranking city was Oklahoma City, where the average annual income is $72,385, while the median monthly rent is $1,070, and annual necessities cost an average of $18,701.

The other cities on the list, starting from the highest ranked, are: Kansas City, Missouri; Lexington, Kentucky; Phoenix, Arizona; Durham, North Carolina; Omaha, Nebraska; Bakersfield, California; Tampa, Florida; Dallas, Texas; and Charlotte, North Carolina. Living in states with the best cost-of-living-to-income ratio can help make your dollars go further.

Other Perks

Besides high incomes, affordability, and low taxes, some states offer other perks that can help you pay off your loans more quickly. Alaska pays each eligible resident a fixed amount of cash every year through the Permanent Fund Dividend, created to share revenues from the state’s oil reserves.

The amount was $1,600 per man, woman, or child in 2018 and could be used for anything, including paying off loans. Colorado and Kansas pay up to 4% of your first mortgage if you meet income and credit requirements.

Other states may help you pay off student loans if you enter certain fields. For example, the Washington Student Achievement Council repays up to $75,000 in student loans for health professionals in rural or disadvantaged areas, and New York repays up to $20,400 in loans for eligible residents working as public interest lawyers. The American Bar Association maintains a full list of state-level loan repayment assistance programs (LRAPs) for attorneys.

How Student Loan Refinancing Can Help

If you’re looking to pay off student loans more quickly, you don’t have to move across the country. Refinancing your student loans can also be a great way to potentially reduce your interest rate. When you refinance, you take out a new loan from a private lender, like SoFi, and use it to repay your existing federal or private loans.

The new loan may offer a lower monthly payment or lower interest rate, especially if you have a solid credit and employment history (among other factors). A lower interest rate can help you pay less in interest over the life of the loan.

If you qualify to refinance, you may also have the option to shorten the length of your loan term. This would likely mean higher monthly payments, but if you’re in a financial position to take on a higher monthly payment, that’s another way you could pay off your student loan debt more quickly.

At SoFi, you can apply for pre-qualification online and find out whether you qualify in two minutes. And keep in mind that if you pay off your refinanced student loan early, SoFi has no prepayment penalties.

Want to pay off your student debt more quickly? Check out whether refinancing your student loans with SoFi can help.

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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.
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.
Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.
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Almost 20 million students entered the American higher education system this year. And most of them are faced with yearly expenses averaging nearly $26,000 for in-state public colleges and up to double that for private schools.

Tuition, books, supplies, room and board, fees, and transportation can all contribute to the final bill, and seeing that total for the first time can lead to some serious sticker shock. But it doesn’t mean you have to hand over cash in order to enroll. There are a number of ways to help pay for college. But what’s the difference between grants, scholarships, and loans? Here’s what you need to know.
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Student Loans vs Scholarships

The biggest difference between student loans and scholarships is that loans do not reduce the cost of college, they just help you afford it upfront. Eventually, they need to be paid back. Scholarships , on the other hand, are need-based or merit-based awards that actually help make college more affordable because they go directly toward the cost of your education and you don’t need to pay them back. There are quite a few other differences between the two as well.

Getting the Money

If you take out a student loan, the total amount is divvied up by semester or year and that amount is typically disbursed to your school to cover your tuition.

The remaining money is often disbursed to you directly so you can cover costs like housing off campus, food, and school supplies.

Scholarships, on the other hand, are often paid straight from the college, or straight to the college in the case of third-party awards. Your scholarship money may go directly to your tuition or other school fees, or it may be sent to you directly (depending on the scholarship).

Restrictions and Qualifications

Both scholarships and student loans come with strings attached. Scholarships, whether merit-based or need-based, can come with GPA requirements or other academic qualifications. You can win scholarships from either the government, your school, or one of a large number of private organizations. (Here’s a giant scholarship database to aid your search.)

Even if you earn a scholarship that’s more lenient, it’s not the green light for a free for all. How you spend your scholarship money could affect everything from your taxes to your loan eligibility (definitely talk to a tax professional if you have any questions about that), so it’s important to ensure that scholarships are spent only on tuition or other school-related expenses.

Whether the student or the parents apply for federal loans, the process starts with a FAFSA® (Free Application for Federal Student Aid). Even if you don’t think you’ll qualify for a student loan or other financial aid, it’s still a good idea to fill out the FAFSA, because some states and schools use it to determine their awards as well.

The minimum qualifications for federal student aid include (but are not limited to) U.S. citizenship or eligible non-citizenship, a high school diploma or GED, and acceptance into an eligible degree or certificate program.

Beyond that, the FAFSA determines eligibility based on your financial situation, the school you’ll be attending, and other factors. Student loans are widely used to help pay for college. In fact, Americans currently share a student loan burden that’s over $1.5 trillion (with a T).

How Are Grants Different from Scholarships?

Like scholarships, grants help reduce the cost of higher education for the individual student because they don’t need to be repaid. They also have certain minimum requirements for maintaining your eligibility. The primary difference between the two is that grants are typically need-based, whereas scholarships are typically merit-based.

The largest provider of grants from the federal government is the Pell Grant program, which awards a fluctuating maximum (currently $6,095 for the 2018–19 award year) per year based on your financial circumstances. State governments may also fund grants for residents who attend in-state colleges or universities.

Can You Win a Scholarship and Still Take Out a Loan?

If you are awarded a grant or a scholarship, you can still apply for student loans. However, the money you receive from that grant or scholarship can affect your loan eligibility, sometimes in a big way.

For example, the schools or programs you applied to will use your completed FAFSA to determine your financial need , which is the difference between your total Cost of Attendance (COA) and your Expected Family Contribution (EFC) . Earning scholarships can reduce your costs, which in turn can leave you eligible for less financial aid—which includes both need-based and non need-based aid.

To complicate matters, some scholarships are awarded as “first-dollar ,” meaning they are made either according to set guidelines or without regard for any other aid you receive, and some are “last-dollar,” meaning they cover any remaining gaps after all your other aid has been applied. If you’re awarded several forms of student aid, be sure to do the overall math and determine if one is a better opportunity.

A Word About Work-Study

Another way some students choose to pay for college is the Federal Work-Study program , which provides part-time jobs for students while they are enrolled in classes. It’s available to students at all levels of higher education and aims to employ students in community service work or work related to their degree.

For students whose chosen career paths require lots of hands-on work, this can be an attractive option to not only help earn money for school, but gain real world experience at the same time. Check with your school’s financial aid office to see if they participate.

We want to help you focus on your degree, not your debt. Our mission is to help students get low-rate loans they can pay back on their own terms. Learn more.

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When the time comes, SoFi can help you refinance your student loans and potentially put more money back in your pocket.
Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.
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 about bankruptcy.
SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs.
SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.

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Direct Stafford Loan repayment can be one of the first harsh realities of modern adult life. But don’t worry, there are options that can help make your student loan repayment just a little less painful. First, let’s get some semantics straightened out: the name of your loans may not make much of a difference, but they can get confusing. In this case, the term “Direct Stafford Loans” and “Direct Loans” are used interchangeably.

Direct Stafford Loans were originally called the Federal Guaranteed Student Loan Program, but in 1988 they were renamed in honor of U.S. Senator Robert Stafford of Vermont, for his work on furthering the cause of higher education.

You have to repay your Direct Stafford Loan no matter what version of the loan you choose (more about this soon). Perhaps the most notable difference between the loan types is how you’ll be required to repay the interest (we’re going to show you).

So, When Do You Have to Pay Back Your Direct Stafford Loan?

The most direct answer is: after the grace period. We’ll explain: with each Direct Stafford Loan repayment plan, you are granted a little bit of time to sort out your life and get your act together. This stretch of rejuvenation, self-realization, and rebirth is perhaps euphemistically called a grace period.

The grace period for Direct Stafford Loan repayment begins the day you officially leave school. Also, if you change your student status to less than half-time enrollment, that earns you a grace period too.

Take note: educational institutions define “half-time enrollment” in different ways. The status is usually, but not always, based on the number of hours and credits in which you’re enrolled. Check with your school’s student aid office to make sure you are in sync with their official definition. Make sure everybody is on the same page before you assume that you are entitled to a grace period. The total timeframe of the Direct Stafford Loan repayment grace period: six months, and not a day more (with a handful of exceptions ).

Another thing to keep in mind about that grace period: you may want make the most of it by starting to pay back that loan in whatever way that you can. Even though grace periods are meant to give you time to reconfigure, the interest you’re being charged is still “capitalizing.” That means interest is still being added to the loan principal all during your grace period, and that’s not very graceful.

One quick thing to keep in mind while on the subject of grace periods: Make sure you know who your student loan servicer is in case you need to reach out to them. You don’t get to choose your own loan servicer. They’re assigned to you by the Department of Education to handle billing and other services. If you have questions regarding your loan, consider contacting your loan servicer.

What Are Direct Stafford Loans?

Direct Stafford Loans are divided into two types:

Subsidized Direct Stafford Loans

These loans are only available to undergraduate students and based on financial need. The government covers the interest payments during your time at school. During your six-month grace period or if you request a deferment, the government will also cover the interest accrued on the subsidized Direct Stafford Loan .

Calculating financial need can get tricky. Once your status is officially figured out, it’s called your “demonstrated financial need,” and it’s defined as the difference between total college costs and your family’s ability to pay. Ultimately, the final number is the amount of money your family needs for you to attend college.

Unsubsidized Direct Stafford Loans

These student loans are offered to undergraduate, graduate, and professional candidates, and are not based on financial need. So if you’re keeping score at home, this is in contrast to the subsidized Direct Stafford Loans, which are available to undergraduates only and based on financial need.

For Unsubsidized Direct Stafford Loans, the government does not cover your interest while you are in school, or if you request a deferment. During your six-month grace period, interest will continue to accrue, and you’ll be responsible for paying it once the grace period ends. As we mentioned earlier, you can also opt to pay the interest during this time, which will help reduce the debt of the loan later.

As with all Direct Stafford Loans, interest rates are fixed, which means that they stay at the same rate for the entire life of the loan. This could be a good thing, but it really depends on what the interest rate is at the time of signing the loan. Interest rates go up and down, so how “good” your rate is depends on how high or low the interest rate happens to be at the time you sign up for the loan.

Direct Stafford Loan Repayment Options

Here’s where you can get a handle on the whole Direct Stafford Loan repayment situation. The most important thing to remember is this: You. Have. Options. So don’t panic if your grace period is coming to an end.

One of your options is to refinance your student loans, which may be appealing if you’re in a financially stable place. Keep in mind that you can’t directly refinance government loans. However, you can refinance your Direct Stafford Loan by taking out a new loan with a private loan company at a hopefully lower interest rate. Doing this may give you some flexible repayment options.

Before you do, know the difference between refinancing and consolidating your loans. You can distinguish them as (broadly) two different strategies: completely starting over (refinancing) as opposed to merely reconfiguring (consolidation).

Refinancing lets you pay off the loans you already have with a brand-new loan from a private lender. This can be done with both federal and private loans. When you refinance, your existing loans get paid off completely, and you put those original creditors behind you forever. The new loan from a private company may allow you to breathe easier with better interest rates and repayment terms. You can also pick the private lender with the terms that best suit your needs. Don’t be afraid to comparison shop—and don’t forget that SoFi has no prepayment penalties or origination fees!

Consolidating student loans is simply gathering up all of the loans you currently have and piling them into one loan. You can typically only consolidate federal loans, and you do so with a Direct Consolidation Loan. With a Direct Consolidation Loan, your new interest rate is the weighted average of all your interest rates combined (rounded to the nearest eighth of 1%).
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Thinking of skipping a few student loan payments? Not a good idea. Your credit score may take a hit, and this could disqualify you from an opportunity to get a credit card, a car, or a mortgage. The days that pass before your loan goes into default: 270 . That may sound like a long time, but it can go by in a flash.

If you’re thinking about refinancing your Direct Stafford Loans with a private loan, you can shop around for the best rates and repayment terms, and choose the loan company that makes the most sense to you. Refinancing can be done with both federal and private loans.

Benefits of refinancing your Direct Stafford Loans could include lower monthly payments or lowering your interest rate. Your interest rate and refinancing terms will vary, based on your financial situation and credit history. If refinancing results in a lower monthly payment, you might have greater flexibility in your monthly budget, such as more savings or redirecting the additional cash to other debts.

You can also discover more options for refinancing your Direct Stafford loans with SoFi.

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Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.
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.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the
FTC’s website on credit.
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Now that you’ve graduated from college and started your career, you may have already received some student loan advice from well-meaning confidantes (or strangers, let’s be honest).

But something that worked well for a family member or friend may not work for you. With student loan payments looming, it’s wise to create a student loan repayment strategy based on your unique situation as soon as possible.

That includes understanding what type of student loans you have, what repayment options are available, and how to eliminate your debt as quickly as possible.

5 Pieces of Student Loan Advice to Help You Start Off On the Right Foot

Leaving college and entering the so-called “real world” can be overwhelming enough as it is. Knowing how you’re going to pay down your student loans can make everything else seem a little easier.

As you consider the right repayment strategy for your student loans, these tips might help. This stuff can get complicated, so of course we always recommend that you speak to a qualified financial advisor to help determine what’s best for you and your situation.

1. Know What Type of Student Loans You Have

There are two types of student loans: federal and private. The type of student loan you have can help determine what sort of repayment options are available to you and if you qualify for certain benefits, including student loan forgiveness and income-driven repayment plans. (Private lenders don’t typically offer flexible repayment options like these, so if your student loans are eligible for them they’re probably federal loans.)

If you don’t know what type of student loans you have, finding out should be easy. If you applied for student loans by filling out the Free Application for Federal Student Aid (FAFSA®), for example, you have federal loans. You can also use the National Student Loan Data System (NSLDS) to track down all of the information on your federal student loans.

If you applied with a private lender and underwent a credit check to get approved, you have private student loans. If you’re still not sure, check with your student loan servicer. You likely received an email or letter from your servicer encouraging you to open an online account. Find that message and either email or call your servicer and ask.

2. Know When Payments Start

If you haven’t already started making monthly payments, it’s a good idea to find out when they’re due and to set up your payment schedule.

In most cases, you’ll have a six-month grace period from the time you left school. Check with your servicer as soon as possible to find out exactly when your first bill is due is and how to make payments.

3. Understand Your Repayment Options

Depending on what type of student loans you have, you may have different repayment options. With federal loans, for instance, you typically start out with the default 10-year repayment plan.

To simplify things, you can consolidate your federal student loans through the Department of Education . But while this can replace several loans with one, you can end up with a higher interest rate overall.

That’s because the government takes the weighted average rates on all of your loans and rounds it up to the nearest one-eighth of a percent (0.125%).

If you can’t afford your monthly payments, however, you can apply for one of four income-driven repayment plans, including:

•  REPAYE Plan: Your monthly payments are generally 10% of your discretionary income, and your repayment term will be extended to 20 or 25 years.

•  PAYE Plan: Your monthly payments are generally 10% of your discretionary income, and your repayment term will be doubled to 20 years.

•  Income-Based Repayment (IBR) Plan: Your monthly payment will generally be 10% or 15% of your discretionary income, and your repayment term will be either 20 or 25 years.

•  Income-Contingent Repayment (ICR) Plan: Your monthly payment will be calculated as the lesser of 20% of your discretionary income or what you would pay on a 12-year repayment plan with fixed payments. Your repayment term will update to 25 years.

Anyone can apply for the REPAYE and ICR plans , but you need to demonstrate financial need to get approved for the PAYE and IBR plans.

With federal loans, you may also qualify for the Public Service Loan Forgiveness program. Through PSLF, you can qualify to have your loans forgiven after you’ve made 120 qualifying monthly payments on an income-driven repayment plan while working for an eligible employer.

Eligible employers include government organizations, tax-exempt not-for-profit organizations, and other not-for-profit organizations that provide qualifying public services.

Only Direct Loans are eligible for PSLF, so if you have a different type of federal loan —like a Federal Family Education Loan (FFEL) a Perkins Loan—you’ll need to consolidate it with a Direct Consolidation Loan.

Depending on your career choice, there may be loan forgiveness program options for you, such as through the military, schools, or hospitals.

If you have private student loans, your repayment term was determined by you and the lender when you first applied for your loans. Private student lenders typically don’t offer student loan forgiveness programs, such as SoFi.

4. Consider Refinancing Your Student Loans

Of all the student loan advice that you receive, this tip could make the biggest difference in eliminating your debt. Refinancing your student loans can save you thousands by reducing your interest rate, shortening your repayment term, or both.

Lenders like SoFi offer fixed and variable rates that can be lower than what you’re currently paying. If you qualify, SoFi will pay off your current loans with a new loan.

So, like federal loan consolidation, you can replace several loans with one. But if you qualify, you can also get a lower interest rate, which can reduce the amount of money you spend on interest over the life of your loan.

Remember, however, when you refinance your federal student loans with a private lender, you forfeit access to federal benefits like income-based repayment plans and student loan forgiveness.

5. Avoid Missing Payments and Defaulting

Whatever you do, avoid the temptation to just stop paying your student loans. You typically can’t get student loans discharged in bankruptcy like you can other debts, and defaulting on your student loans could damage your credit.

What’s more, the federal government can garnish your wages and tax refund for payment on federal loans, and private student loan companies can sue you.

In other words, repaying your student loans may not always be easy. But the alternative can be so much worse.

Finalizing Your Student Loan Repayment Strategy

After you consider these tips for paying off student loans, keep in mind that there’s no single right answer. Start by looking into federal loan consolidation, income-driven repayment, and student loan forgiveness.

But also look into refinancing your loans to see if you can save yourself both money and time. To see what your student loans could look like if you refinance with SoFi, take advantage of our easy to use student loan refinance calculator.

Regardless of how you choose to pay off your student loans, consider adding extra payments each month to pay down your debt even faster. This may require cutting back in other areas of your budget, but it can pay off in the long run.

And of course, we always recommend that you speak to a qualified financial advisor to help determine what’s best for you and your situation.

Looking for a way to make your student loans more manageable? Consider refinancing with SoFi.

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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.
No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third party trademarks referenced herein are property of their respective owners.
Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website on credit.
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