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Do I Need a Student Loan Cosigner? – A Guide

Imagine someone randomly asking you on the street to borrow $500. Do you think you’d oblige? Would it help if someone they knew could vouch for them? If they could guarantee that you’d get back that money this random person wanted to borrow?

When applying for private student loans (and some federal student loans), a lender might feel this way about a potential borrower. But, if that hopeful borrower can have someone vouch for them, in this case a cosigner, that might bolster their loan application.

Having a cosigner on a student loan is a little like a letter of recommendation to get into college. A cosigner can reassure the bank or lender that the applicant is capable of repaying the loan. Their financial history serves as an endorsement for the primary applicant’s financial inexperience.

But a cosigner is not always required for student loans, such as with most federal student loans. Depending on a student’s financial history, employment, and what type of loans they’re applying for, the likelihood of requiring a cosigner will vary.

Before we dive in, we want to point out that—as with any finance-, bankruptcy-, tax- or credit-related tips—your mileage may vary. The views in this article are very general in nature, and it’s likely each person’s situation will have all sorts of variables we can’t account for. Never rely on a blog post like this one for financial, legal, or tax decisions.

What Is a Student Loan Cosigner?

A cosigner is a person who agrees to repay the loan if a borrower defaults or is otherwise unable to pay their debt. A cosigner on a student loan could mean the opportunity to borrow at a lower interest rate, depending on the cosigner’s financial and credit history.

When a cosigner takes on a student loan with the borrower, they’re assuming equal responsibility to repay the loan.

Any negative actions on the loan, such as a late payment or defaulting, could harm the borrower’s credit, and if the cosigner becomes the primary after a default and then also defaults, it could harm their credit as well.

Read on and answer the questions below to see what factors can determine whether a student might need a cosigner on their private student loan.

Where to Begin?

Before deciding whether a student might need a cosigner on a loan, the first step is to fill out the Free Application Federal Student Aid (FAFSA®) to determine the amount that might not be covered by federal aid (including grants and scholarships).

Then, once all other options are exhausted, students could possibly look into private student loans and consider a cosigner.

What Type of Student Loans Are Being Considered?

The type of loans a person is applying for may affect their need for a cosigner.

Federal Student Loans

Most, but not all, federal loans don’t require a cosigner. Further, borrowers don’t need a credit check to be considered for most federal loans. If a student is applying for any of the following, they won’t need a cosigner:

•   Direct Subsidized Loans
•   Direct Unsubsidized Loans
•   Direct Consolidation Loans

However, if a student is applying for a Direct PLUS Loan, they may need an endorser for the same reasons they may need a cosigner for a private student loan: if their credit history and other financial factors are lacking.

A Direct PLUS Loan can help graduate students and parents of undergraduate students pay for the entire cost of school attendance, minus any other financial aid. Direct PLUS Loans are the only federal student loans that look at an applicant’s credit history, thus the potential need for an endorser.

An endorser is the equivalent of a cosigner—they agree to repay the Direct PLUS Loan if the borrower defaults or is delinquent on payments.

Private Student Loans

If an applicant doesn’t meet the lending requirements on their own, they might need a cosigner to obtain any private student loan. To qualify for a private student loan, applicants typically have to check more boxes regarding financial history than they would for a federal student loan.

According to a report by MeasureOne, 91% of private undergraduate student loans and 63% of private graduate student loans originated in 2019 had a cosigner.

Based on those numbers, when applying for a private student loan, a private student loan borrower is more likely to require a cosigner than not.

Both Federal and Private Student Loans

Once a student has the results from the FAFSA application, they can determine if federal student loans will cover the cost of their education or if they need to supplement the amount with a private student loan.

While the borrower might not need a cosigner for federal loans, they might require one for private student loans they might take out.

Is the Student an Undergraduate or Graduate Student?

The necessity of a cosigner may vary depending on whether a person is applying for graduate or undergraduate private student loans.

Undergraduate Student

Undergraduates are generally more likely to need a cosigner on their private student loans. That’s because undergraduates typically haven’t established a lengthy credit history.

For example, if a student applicant hasn’t had accounts open for long, lenders might perceive them to be someone with inadequate credit history.

That’s because they don’t have a track record, good or bad, of repaying loans or other debts on time. In addition, undergrads might not have a steady income, which can also affect whether they are approved for a loan without a cosigner.

Graduate Student

The type of schooling a person is pursuing won’t have an impact on the need for a cosigner. However, a person’s credit history and income will still factor into the decision.

What About Credit Score?

Most private lenders will look at an applicant’s credit score (among other factors) to determine eligibility. Having a lower credit score may make it harder to get a loan without a cosigner.

FICO® Scores (the most common credit scores used by lenders and financial institutions) range between 300 and 850.

If a person wants to simply check their score, many websites offer free credit scores or credit score monitoring (just be sure to read terms and conditions carefully).

If a person wants to see their full credit report, they can get a free credit report annually from AnnualCreditReport.com. It is important to note that this is not the only site where someone can request a free credit report. For example, they can get their credit report directly through the credit bureaus or on other online sites.

With a number in hand, it might be easier for an applicant to anticipate if they need a cosigner on their private student loan.

If a student is just finishing up high school, for example, they probably don’t have much of a credit history. Heck, they likely don’t even have a credit card, since that requires being 18 and having a steady income. But a lack of credit history might mean the student will need a cosigner when applying for a private student loan.

If the potential borrower is a graduate student with a less-than-stellar credit history, that might also mean they might need a cosigner. However, if a graduate student has spent their undergrad years building a positive credit history, they might have a score that would be favorable for a private student loan with no cosigner.

Ultimately, it’s up to each individual lender to consider the credit score and other financial factors before approving a loan, and every lender has different criteria.

What Is the Student’s Employment Status?

Consistent income is also considered when applying for a private student loan. The more income a person has, the rule of thumb goes, the more money they have to pay back debts, making them less likely to need a cosigner.

Employed Full Time

Generally, if a person is employed full time at a salaried job, it shows lenders they have the capability to repay the loan they’re borrowing. A person employed full-time with a salary will likely not need a cosigner . However, requirements at each lender varies.

Employed Part-Time

It’s more likely than not that a person working part-time may still require a cosigner on a private student loan. However, the applicant’s debt-to-income ratio will still come into play—that is, how much debt a person owes (credit cards, rent, other bills) divided by the income they earn before taxes and other deductions.

Of course, all lender requirements vary, but significant, consistent income can factor into whether the applicant will still need a cosigner.

Only a Student (Not Employed)

If an applicant has no employment or income to speak of, lenders have no way to ensure that they can repay the loan.

That’s one reason a cosigner may be required. Even if students intend to have a job after college, lenders might not be willing to take that risk. Many private student loans require borrowers to make payments while they are still enrolled in school.

With a cosigner, applicants can show there’s an income stream to pay back these loans.

Has the Student Declared Bankruptcy?

Lenders can and do consider all aspects of a person’s financial history before granting a loan, bankruptcy included. Declaring bankruptcy does have an effect on a person’s credit history, thus it typically plays a part in private student loan eligibility.

No

If a person hasn’t declared bankruptcy, they won’t have the mark on their credit report, and it won’t factor into whether they need a cosigner.

Yes

Declaring bankruptcy negatively affects a person’s credit score, which private lenders pay close attention to with a loan application. A bankruptcy filing can stay on a person’s credit history for a decade.

Bankruptcy filings can affect a credit score in a number of ways, and depending on how long ago it took place, the effects on a person’s score will vary.

However, with a low enough score, the applicant may need a cosigner to qualify for a private student loan for rates and terms they’d prefer.

How Long Is the Student’s Credit History?

How long a person’s had a credit card or various forms of debt gives lenders a better sense of their ability to pay on time, or ability to pay off debt in full. The length of a person’s credit history makes up about 15% of their FICO® Score.

Length of credit history is determined by Average Age of Accounts (AAoA). Lenders take the lifespan of a person’s accounts and divide by the number of accounts that person holds. A potential borrower can determine this number by figuring out how long they’ve had each account in their credit history, then dividing by the number of accounts.

If, say, a student has had a car loan for two years, a credit card for four years, and a second credit card for three years, the math to determine their AAoA is: (2+4+3) ፥ 3 = 3.

The real sweet spot for credit history comes at the seven-year mark. From that point, early negative marks on account might’ve faded away. It shows lenders that a borrower can pay loans and maintain accounts over time.

So the hypothetical borrower with an AAoA of three might need a cosigner, or they might not. Ultimately, other factors would come into play and it would be up to the lender.

Has the Student Defaulted on a Loan?

Defaulting on a loan translates into repeatedly missing monthly payments. Terms of every loan are different, but after a period of nonpayment, the loan enters default.

Defaulting on a loan stays with a person’s credit history for at least seven years and typically negatively affects their credit score.

If a person has defaulted on a previous loan, they’ll likely need a cosigner on their student loan to potentially bolster their lendability.

If a person hasn’t defaulted on a loan, then it won’t factor into a decision on whether a private lender will require a cosigner.

Has the Student Ever Missed a Payment?

Similar to defaulting on a loan, on-time payments each month shows lenders that a person is a responsible borrower.

Missing a payment or two negatively impacts a person’s eligibility for a loan consistently missing monthly payments and racking up late fees can tank a person’s FICO® Score and financial history.

As we mentioned above, payment history is the most heavily weighted item when calculating a FICO® Score, and a person can pay dearly for it.

Consistently missing payments that have affected a person’s FICO® Score might cause a potential lender to require a cosigner. It could also cause concern for a potential cosigner, so students might want to keep that in mind.

A solid history of on-time payments shows a lender that a person is a responsible candidate for a loan and might not need a cosigner.

Choosing a Cosigner

As stated near the beginning of this post, the majority of private student loan borrowers have a cosigner. But not all cosigners are built the same, and choosing the right person to cosign a loan could be as important as the terms of the loan itself.

A cosigner should not only have a strong financial history, but also a strong relationship with the applicant. A cosigner might be a parent or blood relation, but Sallie Mae reports that nearly 27% of cosigners on student loans are someone other than a parent.

A cosigner ideally has a stable financial history and a relationship to the applicant where they feel comfortable discussing money. After all, the cosigner will become obligated to pay the loan should the applicant default.

Asking Someone to Be a Cosigner

There’s a common misconception that cosigning on a loan is as easy as signing a contract, but it actually means more than that. When a person asks someone to be their cosigner, they shouldn’t shy away from discussing the challenging topic.

It may make sense to talk about worst-case scenarios with a cosigner, let them know it would be their responsibility to take on the payments if the borrower defaults. Discuss how the borrower could repay the cosigner in the event that the borrower can’t make payments.

Risks of Cosigning

Beyond the worst-case-scenario discussion, cosigners should know the additional risks they take on when cosigning a student loan:

•   Credit score. Cosigning a loan will affect a person’s credit score, since they’re taking on the debt as well. Even if the borrower makes on-time payments and doesn’t default, the cosigner will see a change in their credit score by taking on the additional debt, and it could even benefit their score.

•   Liability. If the borrower defaults on the loan, it becomes the cosigner’s responsibility to pay for it. A lender can come to collect from the cosigner, seizing assets and garnishing paychecks to cover missed payments.

However, the cosigner doesn’t need to stay tied to the loan forever. Many private student loans have a cosigner release policy in place. After a duration of on-time payments and additional paperwork, a lender may release the cosigner from the loan, leaving the borrower on their own.

It might sound easy, but a cosigner release isn’t a guarantee. Nearly 90% of cosigner release applications are rejected by the lender.

Private Student Loan Requirements Vary

Like every college application, each loan application is a little different. Certain aspects of a person’s credit history or employment might make them more compelling to a lender.

Other elements, like late payments or a limited credit history, might make a person less compelling to lend to.

Adding a cosigner to a private student loan is fairly common and can improve a person’s chance of approval, sometimes even with a lower interest rate than if they applied on their own. With a reliable cosigner in place, the student loan approval process might ease a student’s worry.

If a student has exhausted all of their federal student loan options, private student loans could be a good option to look into.

SoFi offers private student loans with no origination fees, no late fees, and no insufficient fund fees. Plus, SoFi offers flexible repayment options to help students find the loan that fits their budget.

Learn more about private student loans with SoFi.


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
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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.
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.
Third Party Brand Mentions: 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.
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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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DACA Financial Aid Options for Students

From multiple deadlines to a multitude of forms, going through the financial aid process can be daunting for any student. For students who are part of the Deferred Action for Childhood Arrivals program (DACA), sometimes spoken about in tandem with the DREAM Act, it can be even more challenging.

DACA is a government initiative that was launched by President Barack Obama in 2012 that allows undocumented immigrants who were brought to the United States as children under the age of 16 before 2007 (often called “DREAMers”) to remain in the United States for a period of two years without fear of deportation.

It’s the most current of a number of pathway to citizenship proposals that have come before Congress since the Development, Relief, and Education for Alien Minors (DREAM Act) was first introduced in 2001, but never passed.

And although DACA (the Obama-era version of the DREAM Act) doesn’t offer a way to gain permanent legal status, it does allow qualifying DREAMers to become eligible for employment.

Who Are The DREAMers?

In late 2019, around 675,000 active DACA recipients were living in the United States. The majority of recipients came to the US from Mexico and live in California, although immigrants from hundreds of other countries around the world also live in all 50 states, Washington, D.C., and US territories.

According to the Center for American Progress, around 250,000 US-born children have at least one parent who is a DACA recipient. As a population, DREAMers pay a collective $5.7 billion in federal taxes and $3.1 billion in state and local taxes each year.

Advocates say the program is having a positive effect on the DREAMers, with data showing that more than 90% of DACA recipients were employed, with 54% reporting that it was their first job and 68% reporting an increase in pay.

DACA in the News

In September 2017, the Trump administration rescinded the DACA program in line with its larger immigration policy, sparking political and legal battles that involved lawsuits in several states and even making its way to the US Supreme Court.

The program has been contentious since its inception, and the politics are complicated, to be sure. As of now the US Citizenship and Immigration Service (USCIS) must continue to accept DACA renewals, but are not accepting new applications.

Around 232,000 DACA permits were set to expire between Oct. 1, 2019, and June 30, 2020, when the Supreme Court’s decision on whether or not to continue DACA is expected. At the same time, DACA renewal fees increased 55% from $495 to $765.

But while DACA’s future remains in limbo, deadlines for financial aid, scholarships, and other tuition assistance are fast approaching. What does this mean for DACA financial aid?

The good news is, options still remain for DREAMers who want to start or continue college in the fall. Here’s a look at some ways that undocumented students can pay for college:

Financial Aid for DACA Students

Are DACA students eligible for federal financial aid? Yes and no. According to the US Department of Education, undocumented students (including DREAMers) are not eligible to complete the FAFSA® unless they have a Social Security number; without a Social Security number, they’re ineligible for any of the well-known federal loans and grants and other federal aid sources.

However, that doesn’t mean DREAMers are without options. The following 16 states, for example, allow undocumented students to qualify for in-state tuition rates:

•   California.
•   Colorado.
•   Connecticut.
•   Florida.
•   Illinois.
•   Kansas.
•   Maryland.
•   Minnesota.
•   Nebraska.
•   New Jersey.
•   New Mexico.
•   New York.
•   Oregon.
•   Texas.
•   Utah.
•   Washington.

Washington, D.C., also extends in-state tuition benefits to immigrant students, along with a number of state university systems, including the University of Hawaii Board of Regents and, with additional guidelines students must meet, the Ohio Department of Higher Education .

State Financial Aid

Almost every state has at least one financial aid package available for its student residents, and eligibility varies widely from state to state. DACA students may also be eligible for a regional tuition exchange program , in which students may attend out-of-state colleges for in-state tuition rates (as long as the state has its own version of the DREAM Act or DACA or other laws in place to aid DREAMers).

Some states, including California, Colorado, Minnesota, New Mexico, Oregon, Texas, and Washington have even gone a step further and created their own DACA-type programs, giving DREAMers access to state financial aid , whether from the state legislatures themselves or from specific universities.

Perhaps not surprisingly, California is one of the leading state advocates for allowing undocumented students access to higher education.

The California Dream Loan , passed in 2011, allows DREAMers to apply for a number of financial aid options including the California Dream Loan, one of the only subsidized loan programs for undergraduate undocumented students in the country.

Scholarships and Grants

For other states that have enacted their own version of DACA, financial aid more often comes in the form of scholarships or grants.

In Texas, home to the second-largest population of DACA recipients, students who fill out the Texas Application for State Financial Aid (TASFA) may be eligible for loans, scholarships, and grants, most of which are determined and disbursed by various universities.

The University of Houston Urban Experience Program , for example, offers DACA students not only grants and scholarship assistance, but mentoring, tutoring, and academic support.

Nationally, many students begin their scholarship search at scholarships.com , which offers a comprehensive database of state and national scholarships, including those for which DREAMers may qualify.

One of the largest scholarship programs specifically for DREAMers is TheDream.US , which has helped more than 6,000 undocumented students obtain a college degree via a partner network of more than 70 colleges across the country.

Its National Scholarship Award covers tuition and fees up to $14,500 for associate’s degree programs and $29,000 for bachelor’s degrees at one of 70 partner colleges. Recipients may also be eligible for an additional $1,000 annual stipend for books and supplies.

The Opportunity Scholarship focuses on students who live in what the organization calls a “locked-out state,” one in which the student doesn’t have access to college, either because of geography or state laws.

The scholarship offers up to $20,000 a year toward out-of-state tuition for a bachelor’s degree at a partner college.

Several minority advocacy groups also compile lists of scholarship opportunities that don’t ask for immigration status or Social Security numbers, including the Mexican American Legal Defense and Education Fund (MALDEF) , and the DREAMer’s Roadmap .

Private Student Loans

Unlike federal student loans, which have a fixed interest rate and many different repayment plans and protections, private student loans operate more like auto or personal loans (and don’t have the same repayment options and protections like federal student loans).

A potential borrower applies for private student loans via a private lender, and offers are based on factors like creditworthiness and current market rates. And, unlike federal student loans, private student loans can be applied for at any time during a student’s college career.

For DREAMers, one big advantage of a private student loan is that the FAFSA® isn’t required, which means not having a Social Security number may not be as big a hurdle. Credit history still matters, though, so one route students may take is to have a citizen co-signer guarantee the loan.

At SoFi, DACA recipients and other undocumented students are eligible to apply for a private student loan or apply to refinance their current student loans as long as they have a citizen co-signer. (Quick note: This type of loan application must be completed via telephone vs. online.)

SoFi is a leader in the student loan space—offering both private student loans to help pay your way through school, or refinancing options to help you pay off your existing loans faster.

Learn more today about financing your education or refinancing your current student loans through SoFi


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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. SoFi Lending Corp. and its lending products are not endorsed by or directly affiliated with any college or university unless otherwise disclosed.

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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-Driven Repayment plans, including 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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SoFi loans are originated by SoFi Lending Corp (dba SoFi), a lender licensed by the Department of Business Oversight under the California Financing Law, license # 6054612; NMLS # 1121636 . For additional product-specific legal and licensing information, see SoFi.com/legal.

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Should You Give up on Student Loan Forgiveness?

Public service loan forgiveness has been in the news a lot over the last year—and not for good reasons. There was the news that very few people have actually had their federal student loans forgiven.

Then there was the Public Service Loan Forgiveness (PSLF) news that the whole program might be cut . And now a lawsuit has been filed on behalf of a number of teachers who had their PSLF forgiveness denied, alleging mismanagement of the program.

What does this news mean for you? Should you still try to get your federal student loans forgiven, and how can you plan ahead for any more public service loan forgiveness updates?

What is Public Service Loan Forgiveness?

The public service loan forgiveness program is supposed to work in a fairly straight-forward way: After ten years of public service (and making payments on your loans), you can have the remainder of your student loans forgiven.

There are, of course, some requirements—and this is where it gets more complicated. To qualify for public service loan forgiveness you have to:

•   Work full-time in a qualifying public service job.
•   Make 120 monthly loan payments on a qualifying repayment plan, which is typically an income-driven repayment plan.
•   Have a federal Direct Student Loan.

For the majority of people who have their PSLF applications denied, it’s because they allegedly didn’t meet these requirements.

Most importantly, only federal Direct Student Loans qualify. Federal Family Education Loans (FFEL) or Perkins loans do not qualify—even though many of the federal loans when the loan forgiveness program was created in 2007 were FFEL loans.

You may still be able to qualify if you have one of those loans, but you would need to consolidate your federal loans into a Direct Consolidation Loan and none of the payments made before the consolidation would count.

You also need to be on a qualifying payment plan, which is either the standard ten-year repayment plan or an income-driven repayment plan. These determine how much you’re required to pay each month as a percentage of your income.

And you need to work for a qualifying employer. To verify that your public service job qualifies, fill out the public service loan forgiveness employer certification form .

Once you meet all these requirements, you still have to apply for loan forgiveness after your ten years of qualifying payments. It doesn’t happen automatically. This is where much of the public service loan forgiveness news comes in.

What Is the Latest Public Service Loan Forgiveness News?

Since the Public Service Loan Forgiveness program was launched in 2007, the first federal student loans became eligible for forgiveness in late 2017.

However, instead of a rash of loans being wiped clean, more and more news has come out about the number of applications being denied.

The latest data from the U.S. Department of Education found 73,554 borrowers have submitted applications for loan forgiveness, but only 864 have been approved. That’s not very many.

Over 2 million people also took the first step of having their employer certification approved. Since not all of those people followed through the rest of the process, critics argue it suggests there continues to be confusion around the requirements.

In fact, this was exactly why Congress approved the the Temporary Expanded Public Service Loan Forgiveness (TEPSLF) opportunity in 2018—which allows people who had their loan forgiveness applications initially denied because they were on the wrong repayment plan to get re-approved under the new requirements.

But the most recent numbers found only 442 of those TEPSLF applications had gotten their loans forgiven. That’s been frustrating for a lot of applicants and lawmakers. It’s even prompted a lawsuit from a number of teachers who’ve had their applications denied.

Even with all the distressing public service loan forgiveness news, many were still frustrated to hear the program was at risk of being eliminated in the most recent budget proposal .

What does all this mean for you?

Should You Still Try for PSLF Forgiveness?

Just because there’s been a lot of bad news for PSLF lately doesn’t mean you should necessarily give up on loan forgiveness.

Some of those applicants have been successful and, according to the data, the average amount of loan forgiven was $59,224. That’s worth following up on—even if it takes a lot of attention to detail.

The number-one reason applications were denied was because of qualifying payments—either not enough payments had been made yet or they weren’t made under a qualifying income-driven repayment plan.

That doesn’t mean those applications won’t eventually be approved, either after making additional payments or through the new temporary expanded program. (The average loan amount forgiven under the TEPSLF program was $39,723.) But it does mean you want to double-check all the requirements.

To do this, you may want to use the Department of Education’s PSLF Help Tool. Many who applied for loan forgiveness simply didn’t actually qualify for it in the first place.

It also means you should have a back-up plan and shouldn’t assume you’ll get your loans forgiven. Because employment gaps or payment forbearance periods (for instance, if you went to graduate school) can lead to delays in meeting the 120-month time requirement, you may want to plan ahead.

In this case, it may take an extra year or two to qualify for loan forgiveness. It also may take extra work on the application.

And if you’re working in a qualifying public service job just to get loan forgiveness, then you may want to consider your options if there are other jobs you’d want instead that might have a higher salary.

Regardless of the latest public service loan forgiveness news, you can always ask yourself: Is PSLF right for you?

How Can You Plan Ahead for Any Changes to Public Service Loan Forgiveness?

The good news is if you’re currently working towards Public Service Loan Forgiveness, then you could still qualify even if the program is cut. The proposal is only to eliminate loan forgiveness for students taking out new loans starting July 1, 2020, so it hopefully wouldn’t negate those already making qualifying payments.

It also may be true that federal loan forgiveness programs may yet get revised or amended to address the many rejections. But because these things can be uncertain, it may be a good idea to budget with the plan of paying your full student loans.

Ultimately, your goal is probably to save money and do good in the world. Public Service Loan Forgiveness is a great way to have any remaining loan balance after 10 years of payments wiped clean if you work in public service, and if you qualify, but it also has some drawbacks.

It means you have to stick to an income-driven repayment plan, which means your monthly payment amount will increase as your income increases. In that case, the loan could potentially be repaid in full before the standard 10-year repayment period ends, leaving no balance to be forgiven.

If you choose to consolidate federal loans that don’t qualify for PSLF without consolidating them, such as the Federal Perkins Loan and the Federal Family Education Loan (FFEL), keep in mind that the interest rate for the consolidation loan could be higher due to how the rate is calculated (and the interest rate of a Direct Consolidation Loan has no cap).

So, might you save money with the PSLF Program? The answer is a firm maybe. Another option, which would make you ineligible for loan forgiveness and other federal repayment benefits and protections, is to refinance your student loans at a lower interest rate or more ideal terms for your situation.

Refinancing is typically a better option for those who are in a stronger financial situation than when they graduated.

Through refinancing, borrowers consolidate their student loans into one new loan, ideally with rates and terms that work better for them.

For example, if you qualify for a lower interest rate that could help save money over the life of the loan and could allow you to pay off your student loans quicker— depending on the loan term you choose. You may want to weigh the pros and cons to consider what makes the most sense for you.

Find out what interest rate and terms you qualify for in just two minutes. Check out SoFi student loan refinancing today.


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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SoFi loans are originated by SoFi Lending Corp (dba SoFi), a lender licensed by the Department of Business Oversight under the California Financing Law, license # 6054612; NMLS # 1121636 . For additional product-specific legal and licensing information, see SoFi.com/legal.

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IF YOU ARE LOOKING TO REFINANCE FEDERAL STUDENT LOANS PLEASE BE AWARE OF RECENT LEGISLATIVE CHANGES THAT HAVE SUSPENDED ALL FEDERAL STUDENT LOAN PAYMENTS AND WAIVED INTEREST CHARGES ON FEDERALLY HELD LOANS UNTIL THE END OF SEPTEMBER DUE TO COVID-19. PLEASE CAREFULLY CONSIDER THESE CHANGES BEFORE REFINANCING FEDERALLY HELD LOANS WITH SOFI, SINCE IN DOING SO YOU WILL NO LONGER QUALIFY FOR THE FEDERAL LOAN PAYMENT SUSPENSION, INTEREST WAIVER, OR ANY OTHER CURRENT OR FUTURE BENEFITS APPLICABLE TO FEDERAL LOANS. CLICK HERE
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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-Driven Repayment plans, including 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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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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Navigating Your Financial Aid Package

Paying for college can be one of the most complicated financial decisions you have to make. The average cost keeps going up and affordability is one of the biggest factors in picking a school. For the 2019-20 school year , the average tuition and fees at a public in-state college was $10,116 and for private schools, it was a whopping $36,801.

Many students rely on a financial aid package for college in order to make those tuition payments. But sometimes students don’t get enough financial aid and sometimes it can be difficult to even know exactly what you’re being offered. There are acronyms and jargon and lots of different numbers.

This guide to college financial aid packages could help you as you navigate your offers so you can better understand your options.

The Steps to Getting a Financial Aid Package

In order to get any financial aid package for college, the first step is generally to fill out a Free Application for Federal Student Aid , commonly known as FAFSA®. The FAFSA for the 2020-21 school year became available on October 1, 2019 and the federal deadline to apply is June 30, 2020. Some states and colleges have separate deadlines for the FAFSA to determine aid. It can be worth double checking to confirm the deadline required by your state or school.

Filling out the FAFSA requires some basic financial and income information. If you’re a dependent student, then you’ll need your parents’ financial info as well. For higher income families or those in unique financial situations, this can be a little tricky.

All federal loans, both subsidized and unsubsidized, require a FAFSA in order to determine eligibility. And most colleges may also use the FAFSA to determine their own financial aid awards and packages, based on things like expected family contribution and financial need.

After you fill out the FAFSA, the Office of Federal Student Aid at the U.S. Department of Education will process your FAFSA and send you a Student Aid Report (SAR), which is essentially a summary of your information. It’s usually worth reviewing this information in detail to confirm that all of the information is accurate. If you find a mistake after reviewing your SAR, you’ll likely need to update or correct your FAFSA .

The SAR will include the calculated Expected Family Contribution (EFC), which is how much you and/or your family can be expected to contribute personally towards your education.

Then, colleges use this information to determine eligibility for university, local, state, and federal financial aid. Sometimes schools also ask for additional information, particularly if you are applying for school-specific scholarships.

The schools will then assemble a financial aid package that could be made up of grants, loans, work-study, and other waivers, and send you an “award letter.” Reviewing your award letter carefully can help you choose the financial aid mix that is right for you. Often these financial aid award letters come shortly after admissions decisions. Students typically have a deadline (often May 1, which is National College Decision Day) to make their decisions by.

That’s when it’s important to understand and compare the financial aid packages you’ve gotten from different colleges—even if that can be a little confusing. The key is to break down the jargon in order to help make an informed decision.

Understanding What’s in the Average Financial Aid Package

One study found that out of 455 college financial aid award letters there were 136 unique terms used for the same type of unsubsidized loan—some of which didn’t even include the word “loan.”

A majority of the financial aid package letters also didn’t clearly differentiate between types of aid. The same study found that loans were sometimes referred to as awards, making the packages appear more generous than they really were.

All the jargon and different terms can make it hard to decipher, but at its heart a financial aid package is a list of different amounts of money in different forms of loans, grants, work-study, or other tuition waivers that should add up to cover the cost of the college, minus your expected family contribution.

Yet, you may have to decode the language and research each of the line items. Sometimes, for example, instead of clearly identifying loans as such, they might be simply denoted with abbreviations like “L” or “LN” in the award letter. Here are the different types of financial aid you may see in your financial aid package:

•   Grants and scholarships: These don’t have to be repaid, so they are sometimes referred to as “gift aid.” These could be school, state, or federal scholarships and grants you qualified for and were awarded.

•   Work-study: This is part-time work you will do and be paid for. You’ll be paid at least the federal minimum wage, but depending on the job, you could earn more. Being granted work-study in your aid package does not always guarantee a job. Depending on the school you attend, you may be matched with a job or you may have to apply for and secure your own job.

•   Federal loans: Federal loans can be either subsidized or unsubsidized direct loans, usually have lower interest rates than private loans, and typically have a cap on how much you can borrow.

Subsidized loans are for undergrads and are awarded based on financial need; additionally, the government pays the interest on them while you’re in school at least half-time, during your grace period, or during periods of deferment.

Unsubsidized loans are available to undergraduate and graduate students and are not awarded based on financial need. This type of loan accrues interest while a student is enrolled at least half-time, during the loan’s grace period, or during other periods of deferment.

Borrowers have the option to make interest-only payments during this time, but are not required to do so. If the interest accrues, at the end of the deferment period it will be capitalized or added to the principal value of the loan.

There are also PLUS loans for parents and grad students, which are also unsubsidized.

Private student loans are not part of a federal financial aid package. Private student loans are loans from a private lender, which typically have more stringent financial qualifications and, like federal loans, must be paid back with interest. Typically, that interest also accrues while you’re in school.

Check the terms of any private students loans you’re considering and the interest rate being offered to get a sense of how they stack up to federal loans.

In order to make the decision that’s best for you, you’ll want to compare the total cost of college, how much gift aid is being awarded, what in your financial aid package has to be repaid and on what terms, and how much it will, in total, cost you.

The total cost of attendance may change over a student’s enrollment, so it generally needs to be calculated each year. Consider things like fluctuation in tuition rates, federal interest rates, and your financial aid award which, among other factors, have the potential to change.

Tips on How to Compare Financial Aid Packages

One of the most important things to look at when comparing financial aid packages for college is the net price. What that means is the actual cost to you, minus all awards. To find the net price you need to figure out the total cost for each college and then subtract the amount of grants and gift aid (e.g., not loans).

Factor in, then, how much and on what terms you can take out in loans. And then you can calculate how much each college will cost you additionally out-of-pocket.

Just because one school is giving you more in financial aid doesn’t mean it’s necessarily the best financial option if it ultimately will cost you more because the college is more expensive and, perhaps, the private loans you’d need to get to cover what your federal aid doesn’t cover have higher interest rates.

However, a financial aid package won’t always list the net price and many of the financial aid award letters don’t even necessarily tell you how much a specific college costs in total.

Some letters only outline the direct cost to the school—e.g., tuition and fees—but don’t include room and board or other expenses.

It can be helpful to make your own spreadsheet to ensure you’re comparing apples-to-apples. Figure out the total cost of attendance for each school you’re considering. Include tuition, fees, room and board, and you can even estimate expenses like books, supplies, and living expenses.

Note how much is being awarded in gift aid (grants and scholarships), how much you’re offered in private and federal loans, and how much it’ll cost you out-of-pocket.

The Institute for College Access and Success also suggests finding out if scholarships or grants will be awarded every year or if they’ll run out after freshman or sophomore year.

And note that you can take out less in loans than is listed in your package if you don’t need the full amount, which will likely help save you money in the long run.

The Consumer Financial Protection Bureau and the the College Board both have tools to more accurately compare financial aid packages and the costs of college.

If Your Financial Aid Package for College Isn’t Enough

Sometimes you do the math, compare all the costs, and feel like your financial aid package for college just isn’t adding up.

It is possible to appeal a financial aid package, particularly if you’ve had changed circumstances or if there was a gap between the cost and the award. While writing an appeal letter might be a first step if your financial aid package isn’t enough to cover the cost of college, it doesn’t guarantee your award will change.

It also might be the case that circumstances change and you lose your financial aid or portions of your award package. In these situations, there are options in addition to or besides appealing.

You can look into private scholarships, of course. These are different from the scholarships and grants awarded by the state or school. However, private scholarships considered non-need-based aid and will factor into the cost of attendance—and each school deals with that differently.

Another option is to look for more on-campus or part-time work. You could also consider private loans to make up the difference in cost.

SoFi offers private student loans with no origination fees and no late fees. There are also flexible repayment options and interest rate discounts for eligible SoFi members. You can find out what rate and terms you may pre-qualify for in just a few minutes.


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.

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.
SoFi Loan Products
SoFi loans are originated by SoFi Lending Corp (dba SoFi), a lender licensed by the Department of Business Oversight under the California Financing Law, license # 6054612; NMLS # 1121636 . For additional product-specific legal and licensing information, see SoFi.com/legal.

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College Visit Checklist for Parents

College visits can be a wonderful experience for families, as parents and high schoolers tour campuses of interest. These visits are the ideal time to consider which college would be the right fit for the student of the family, and this post will provide you with a checklist to help you get the most out of each experience.

How to Visit Colleges on Your Lists

Sometimes, students visit college campuses to decide whether or not to apply there. In other cases, they know that a particular college is a perfect match for their major and they want to investigate further.

Schedule Visits Strategically

Let’s assume your child has applied to—or is interested in applying to—eight colleges. At a basic level, you’ll need to make sure you have enough time to visit them, and how far they are located from your home will help to dictate how much time these visits will take. As part of this scheduling, you might ask yourself these questions:

•   Which of these campuses are most important to visit? Prioritize appropriately.
•   Which of these colleges are located closely to one another (at least relatively speaking)?
•   Do I want to have an informal visit or do I want to be part of an official open house? If the latter, check as early as possible to see when these events are being held. Are there scheduling conflicts?
•   How much time will each visit take?
•   How can I space out these visits so we can be efficient without rushing through them?
•   What is most important to see and do during each visit?

Pro tip: Once you know that you’ll be visiting a college, you can review its website and social media pages to gather intelligence ahead of time and gain key context.

When Do Virtual College Visits Make Sense?

Perhaps, as just one example, there is a college that is more challenging to visit than others on your list. In that case, consider going on a virtual tour.

By doing so, you may discover that this college isn’t as appealing as you’d originally thought (which might cause it to drop on your priority list) or it may make you realize that, yes, you need to make a physical tour happen.

One option is eCampusTours . Using this tool, you can receive 360° views of more than 1,300 different campuses at no cost. While there, students can register to win a $1,000 college scholarship. You can also visit the websites of colleges of interest to see what virtual tours they offer; here is one by Harvard University .

As a related resource, on YouTube EDU , you can find videos created by students as they share moving into their dorms, along with conversations with professors, classroom lectures, and more.

You can use the Rate My Professors tool, too, to find information about who teaches at a particular school, noting that ratings are subjective and can be used, as just one example, by students who aren’t happy with grades received.

What to Bring to a College Visit

During college visits, you’ll likely be flooded with information and visual impressions, plus with thoughts, ideas, conversations, and more. So, it makes sense to bring something to help you capture all of this information to review later, as needed.

In this quest, your smartphone can be a real asset. You can use it to take pictures of intriguing places on campus or to remind you to ask questions about it. Take videos in the same way and/or record explanations given by college officials. Before you leave for your college visits, determine what capabilities your smartphone or other mobile devices don’t have, and supplement accordingly.

And, wonderful as technological devices are, don’t forget to bring old-fashioned pen and paper. You might also want to bring along a college visit planner, one where you can list crucial dates and deadlines.

Depending upon how long you’ll stay, make sure you bring enough comfortable, weather-appropriate clothing—and, perhaps most important of all, comfy shoes! You may be doing a whole lot of walking. Will you need an umbrella?

A warmer coat than what you might need at home? Mittens? Or, will it be sunny and warm, requiring sunglasses and sunscreen? You’ll want to have these things on hand to make the visit as comfortable as possible. After all, you’re there to give your full attention to the tour—not your cold hands or soaked shoes.

Key Questions to Ask

Sometime during the tour, you’ll almost certainly be shown student housing options. Now is the time to ask about the range of dorm choices, how many students live on campus, what percentage of students live on campus versus off-campus, what apartment options exist for, say, juniors and seniors—and any other questions you or your child have about housing.

Other questions to consider:

•   How safe is this campus and the surrounding area?
•   What kind of security do you have?
•   What activities are available for students?
•   Who is allowed to have a car?
•   Where can they park?
•   What transportation options are available for students without a car?

You can also ask academic-related questions you have, ranging from sizes of classes, the use of teaching assistants, how much homework is assigned and how much time it typically take to complete assignments, and more. How easy is it for students to get the classes they need? Is there an honors program? What kind of tutoring services are available?

Other questions can focus on graduation records. These may include:

•   What is the four-year graduation rate at the college?
•   How many freshmen return for their sophomore year?
•   What internship opportunities are available? How easy are they to obtain?
•   How many students study abroad? What opportunities are available?
•   What career services do you offer?

Financial Issues to Explore

•   This is an ideal time to get information about typical financial aid packages offered at each college. These questions may include:
•   What financial aid can a typical freshman expect to receive at the college?
•   What mix of scholarships, grants, and loans can be expected, on average?
•   What work-study opportunities exist and how easy is it for a student to qualify?
•   If there is scholarship money set aside at a college for students, what are its parameters? Some, for example, may be set aside for female students or minority students.
•   How are the scholarships awarded?
•   What aid is available after your child’s freshman year?
•   How many students take, say, five years to graduate and why does that happen?
•   Are enough classes offered at flexible times to help students graduate in under four years (and therefore potentially save significant sums of money)?
•   If your child doesn’t qualify for federal work-study, what other jobs are available on campus? Off-campus?

Financing College

It isn’t unusual for students to need to borrow money to pay for their education. Scholarships and grants are available to help qualified students reduce college expenses and, sometimes, parents may help their children out financially.

Students can get jobs while in college and use their savings to help pay expenses, of course. But if that isn’t enough, many students typically end up borrowing money, with the two main sources being federal student loans (from the government) and private student loans (from private lenders).

To qualify for federal funding, you and your child must fill out the FAFSA®. (In the interest of complete transparency, SoFi believes you should explore all federal aid options before turning to private student loans.)

Parent Student Loans With SoFi

If you’re interested in obtaining private funding to help your child pay for college, then SoFi has a no fee, competitive-rate parent student loan. It’s fast and easy to apply online, and you could gain the peace of mind of knowing that SoFi can help to cover the full cost of your child’s college attendance with no fees and no fuss.

Discover more about SoFi’s parent student loans today.


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.
Third Party Brand Mentions: 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.
SoFi Loan Products
SoFi loans are originated by SoFi Lending Corp (dba SoFi), a lender licensed by the Department of Business Oversight under the California Financing Law, license # 6054612; NMLS # 1121636 . For additional product-specific legal and licensing information, see SoFi.com/legal.

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. SoFi Lending Corp. and its lending products are not endorsed by or directly affiliated with any college or university unless otherwise disclosed.

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