Supporting Your Child in the College Application Process

The college application process can be an exciting and stressful time for both the student and their parents. For your child, it may be one of the first times he or she has had to take action and make decisions that could have a lasting impact on his or her life.

As a result, you want to help guide your child and keep them accountable, but don’t want to push them too hard or do the work for them. For help on how to prepare your kids for college, here is a parent’s guide to college planning so you can support your child during the college application process without making things worse.

A Parent’s Guide to College Planning

It can be hard to know how much is too much, but things can also go south if you’re not involved at all. Here are some things to consider when preparing kids for college.

Avoiding Taking Over the Process

It can be tempting to do what you’ve likely done countless times in your child’s life: step in and solve the problem for them. While there are certainly times in their life when that’s a good thing, it’s important to allow your child to take the helm.

On the flip side, avoid being completely hands-off. You know your child, possibly better than they know themselves. If they’re prone to procrastination or might have a hard time talking about their strengths in an essay, take the opportunity to give them some guidance and gentle reminders.

Listening to Your Child

While the ultimate goal is to get all their applications in on time, it’s important to remember that the process can be overwhelming. Your child is making some big decisions about their future and may need someone with whom they can talk things through.

Take the time to listen to your child and be empathetic about their stress, fear, and anxiety. If possible, share your own experience and show that they can depend on you for ongoing support.

Knowing the Deadlines

Applying for college is serious business, and it’s unlikely colleges are going to accept late entries. While it’s important for your child to know when their applications are due, it’s also a good idea for you to have them on your calendar.

That way, you can follow up as the deadlines get closer just in case your child forgot. That said, be careful to avoid nagging or bringing it up too often.

Avoiding Focusing on Just One School

Parents want the best for their children, and that may include wanting them to attend a specific school. Maybe you like the idea of having your child attend your alma mater, or you have your sights set on an Ivy.

It may not hurt to make a suggestion about which schools your child should consider. But having your child put all their eggs in one basket can make it difficult if they don’t get accepted or they want more options later on.

Visiting Campuses

If your child’s top schools are close by, take a day off of work to visit the school campuses and meet with an admissions counselor. Being there and taking it in may help your child make the right decision about which school is the best fit.

If a college is far away, consider making a vacation out of it. Before you go, check with the colleges to see if they offer campus tours or college fairs where your student can get a better idea of the full experience.

Encouraging Them to Work With a School Counselor

If your child has a designated counselor at school, encourage them to meet with their counselor and talk about the process. While you can give good advice, the counselor may be more in touch with which school might be a good fit based on what your child wants to study.

They may also be able to give your child a better idea of what college admissions officers are looking for in an application, which can give your child an advantage.

Letting Your Child Do the Talking

It can be tempting to try to set up an appointment or communicate with prospective colleges on your child’s behalf. But by encouraging your child to do those things instead, you allow them to show initiative and independence, two traits that can give them a leg up on other candidates.

It will also give your child good practice, because they’ll likely need to do a lot more on their own in the coming years, and may not have you nearby to help.

Talking About Finances

In addition to providing support during the application process, knowing how to prepare your kids for college costs is essential. If you’ve managed to save enough in a savings account or some other way, talk with your child about how far it will go and what they can use the money for.

Also, talk to them about student loans, both federal and private, and how to make good decisions about borrowing for education and living expenses.

Encourage them to apply for scholarships and/or grants first, and to work during school to help reduce how much they may need to borrow.

Putting Your Child’s Needs First

Preparing kids for college is no easy task, especially if you feel like they’re dragging their feet. As you try to find the best way to support your child, take a step back and think about their needs versus your desires, and try to focus your encouragement based on their needs.

Doing this may require some patience, but it can help turn the process into a bonding experience rather than an alienating one. And whatever you do, avoid skipping the money conversation.

Teaching your child about the cost of college, as well as discussing options to finance their education, can help set them up for success for years to come.

If you are thinking about taking out private student loans for college, learn more about SoFi.


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.

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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How to Set Up a College Fund

It’s no secret that college tuition is growing at exorbitant rates in the US, and it seems as if there is a near-constant stream of headlines shouting the latest updates in the rising cost (and debt) facing Americans.

The average cost of tuition varies depending on whether the school is private or public. According to the College Board , these were the average inflation-adjusted costs across school types since 1971, including both tuition costs and fees for room and board:

•   $48,510 at private, four-year, nonprofit schools
•   $37,430 at public, four-year, state schools for out-of-state students
•   $20,790 at public, four-year, state schools for in-state students
•   $12,320 at public, two-year schools

And typically, tuition costs and room and board aren’t the only expenses college students will usually need to cover. There are textbooks and other school supplies, the cost of traveling to and from school for breaks, and any additional living expenses.

As a parent, sometimes just thinking about the cost of college for your kid (or kids) can feel bleak. Thankfully, there’s no time like a bad time to start thinking about ways to save for your child’s education.

Saving for College: Getting Started

Common advice is, there’s no time like the present to start saving. Even starting with a small amount each paycheck could make a dent when you’re looking at a tuition bill 10 or 18 years down the line. If you are in the early stages of parenthood, college may feel far off now, but time can fly.

There are a few savings plans and investment accounts that are specifically designed to help people save for their child’s education expenses.

As you get serious about saving for your children’s education, which some suggest starting within the first six months of your child’s life, one of these accounts may be worth considering.

529 Plans

These accounts are named after an IRS code section and give parents the option to save for college in the name of a child while providing certain tax advantages. There are two kinds of 529 Plans, prepaid tuition plans and education savings plans.

Prepaid tuition plans let individuals buy future credits or course units at participating colleges or universities. These credits are used to help cover the cost of tuition for the beneficiary. Most prepaid tuition plans have residency requirements and are often sponsored by state governments.

Education savings plans are investment accounts that can be used to save for the beneficiary’s qualified education expenses. The funds can be used to pay for higher education or private elementary or high schools. Money is taxed when it is contributed to the account, but it can then grow tax-free.

You can’t contribute more money than necessary to cover education expenses, and there are no annual contribution limits set by individual states. There are, however, aggregate limits to 529 plan balances, which vary depending on the state.

California has the highest aggregate limit, at $529,000, and Georgia and Mississippi have the lowest, at $235,000. While there are no contribution limits, it is important to note that in certain circumstances there may be additional taxes involved if contributions to a single beneficiary are more than $15,000 during the year.

If the child decides not to go to school, the account can be rolled over into the name of another family member. If the funds aren’t used for education-related expenses, there may be taxes and penalties.

Generous family and friends can also contribute to a child’s college savings plan. They may choose to make deposits to an existing 529 account or set up one themselves, naming a beneficiary of their choosing.

Coverdell Education Savings Account

This account has more limitations but may offer more features for some. Individuals who have a modified gross adjusted income (MAGI) that falls below $110,000 ($220,000 if filing jointly) may be eligible to save for college using a Coverdell Education Savings account.

There can be up to $2,000 in contributions for a single beneficiary in a given year. Contributions are made after taxes and must be made in cash. Typically, the funds can be withdrawn without a fee to be used for qualified education expenses .

The Uniform Gift to Minors Act (UGMA) Account

This custodial account allows your child to own stocks (just like an adult!) and mutual funds. The custodian still controls the account until the minor reaches legal age. Note that it’s not tax-free. It also may reduce the amount of financial aid eligibility.

IRA Accounts

Although generally used for retirement savings, IRAs can at times be used to pay for the cost of college. There are two types of IRAs: traditional and Roth. The main difference between the two:

•   Roth IRA: The taxes on the account are paid up front and money withdrawn is retirement is generally tax-free.
•   Traditional IRA: Taxes are paid when the money is withdrawn.

Generally, to make fee-free withdrawals from an IRA, the account holder needs to be at least 59 ½ years old. But Roth IRAs can be used to pay for qualified education expenses including tuition, books, and supplies. Individuals can generally avoid the 10% early withdrawal fee if the account has been open for at least five years or if it is used for qualified education expenses.

Keep in mind that while there may not be an early withdrawal fee, the earnings withdrawn will still be subject to income tax.

Easing the Financial Burden

Even after years of diligent saving, paying the full cost of college tuition isn’t an option for some families. There are a few options to fill the gaps and help students pay for college.

Students getting ready to start college or those who are already enrolled could look into options like scholarships, grants, or private student loans.

Consider filling out the Free Application for Federal Student Aid (FAFSA®). This is the first step in qualifying for federal aid including scholarships and grants, work study, and federal student loans.

Scholarships

These can be a powerful asset when paying for college since it’s money that doesn’t have to be paid back.

Scholarships are typically merit-based and can be offered through a variety of different types of organizations like local nonprofits, corporations, or even sometimes directly from universities. There are a number of searchable databases that compile different scholarship opportunities.

Grants

These are also sources of funding that don’t need to be repaid. Unlike scholarships, grants are typically need-based.

The US Department of Education offers federal grants to students, including Pell Grants, Teacher Education Assistance for College and Higher Education (TEACH), and even Iraq and Afghanistan Service Grants .

Work-Study Programs

The federal work-study program provides part-time jobs for undergraduate, graduate, and professional students with financial need. These jobs allow them to earn money to help pay education expenses.

Student Loans

There are two types of student loans: federal and private. Federal student loans are awarded as a part of your financial aid package and can either be subsidized or unsubsidized.

Subsidized student loans are awarded to eligible undergraduate students based on need. The federal government covers the interest on these loans during the time the student is in school at least half-time, during the six-month grace period after leaving school, and during deferment periods.

Unsubsidized student loans are not awarded based on financial need, and are available to both undergraduate and graduate students. The borrower is responsible for paying the interest on a Direct Unsubsidized Loan from the time of disbursement. If the borrower chooses not to pay the interest while in school, during grace periods, or while in deferment, the interest will accrue and be added to the loan principal.

Private student loans are borrowed from a privately owned lending institution. Typically, to get a private student loan lenders will evaluate the borrower’s credit history, which isn’t the case with most federal student loans. This is why some borrowers rely on a co-signer to secure private student loans.

Typically, borrowers will be required to begin making payments on private student loans right away, even while they are currently attending school.

An Alternative Way to Finance College

Some parents might consider taking out a parent student loan to help their kids pay for college. The federal government makes Direct PLUS loans available to parents and graduate students. The current interest rate on a Direct PLUS loan is 7.08% and it’s fixed for the life of the loan. It’s recommended to exhaust all federal benefits first.

Saving for Yourself

Saving for your child’s education is important, but so are your other financial goals and priorities like setting up an emergency fund and saving for retirement. A realistic financial plan and budget could be a useful tool to help you as you work toward each of your goals.

Some private lenders, like SoFi, offer private parent student loans. SoFi’s parent student loans have flexible terms and offer a competitive interest rate to those who qualify. It takes just a few minutes to see the rates you pre-qualify for.

Learn more about SoFi’s parent loans.


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.

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.
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The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . The umbrella term “SoFi Invest” refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.

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SoFi loans are originated by SoFi Lending Corp (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation 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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Choosing a Student Loan Lender Outside Your Bank

When outlining your plans for how to pay for college, student loans may be part of the financial picture. According to information published by the Pew Research Center, roughly one-third of adults under age 30 have some student loan debt as higher education costs continue to climb.

If you’ve already qualified for federal student loans and have sourced other forms of financial aid but still need more funding for school, private student loans can help close the gap. When applying for private student loans, your current bank might be the first place you look. But there are some reasons to cast the net wider and compare other borrowing options.

Here’s some helpful information worth knowing about how to choose a student loan lender other than your current bank and why it might make sense to do so.

Pros and Cons of Getting Private Student Loans With Your Current Bank

Applying for private student loans with your current bank may seem like a natural choice. If you already have checking and savings accounts at the bank or other loans, then it is possible you may feel more comfortable borrowing from a financial institution you’re familiar with.

And that can have certain advantages. For example, some banks might offer an interest rate discount or reduction for private student loans if you have another account with the bank that is in good standing. Scheduling your student loan payments may also be easier if you can link your checking account to your loan account and see balances and payments in one place.

On the other hand, there are some benefits to getting private student loans with another bank or private lender. Banks and other lenders that offer private student loans can vary greatly when it comes to things like:

•   Minimum and maximum loan amounts
•   Interest rates
•   Loan fees
•   Repayment options

Looking for a private student loan with a different bank or lender could give you more options for a better interest rate, fewer fees, being able to borrow more money, or qualifying for more flexible repayment terms. These are important considerations which can impact student loan repayment.

Choosing a Lender for a Student Loan

Whether you’re borrowing a little or a lot, it’s important to find a bank or lender that matches up with what you need for private student loans. If you’re starting from square one with how to choose a lender for a student loan, these tips could help.

1. Considering Loan Limits

When comparing banks, credit unions, or other private student loan lenders one of the first things to look at is the lending limits at each institution.

Some private student loan lenders impose a minimum loan amount and cap on the total lifetime amount you can borrow to finance your education. Being aware of those thresholds matters for making sure that you can borrow what you need.

Keep in mind, however, that the actual amount you’re able to borrow may be lower than the total loan maximum advertised by the financial institution. The amount you ultimately qualify for (or don’t) can depend on many factors including state laws and your credit history. (More on that and other factors below.)

2. Looking at What’s Needed to Qualify

Every private student loan lender is different when it comes to their minimum qualifications to borrow. While thresholds vary from lender to lender, common criteria reviewed to make lending decisions might include:

•   Credit scores and credit history
•   Income
•   Enrollment status
•   Citizenship or permanent residency status

Also, be aware that you may not be able to qualify for a new private student loan if you have any existing loans that are in default. In that case, you’d need to bring your old loans current first before you could be approved for a new loan by most lenders.

3. Checking Co-Signer Requirements

Credit scores and credit history can play a big part in private student loan approval decisions. Borrowers with little or no credit history may need a qualifying co-signer to get approved for private student loans. Depending on the bank or lender, a qualifying co-signer could be a:

•   Parent
•   Grandparent
•   Sibling
•   Spouse
•   Other relative
•   Friend

For those who think they’ll need a co-signer to qualify for private student loans, there are a couple of things to remember.

First, it’s a solid idea to be upfront with the prospective student loan co-signer about the implications of signing off on the loans. As a co-signer, they’re equally responsible for the debt and all loan activity will show up on their credit report the same as it will on a primary borrower’s credit report. So if the borrower pays late or defaults, it could adversely affect both the co-signer and the primary borrower.

Second, you can check to see if the banks, credit unions, or private lenders you’re looking into offer a co-signer release. This allows the co-signer to be removed from the loans once certain conditions have been met. For example, you may be able to get a co-signer release after making a certain number of consecutive on-time monthly payments.

Going forward, then, only the primary borrower’s name would be listed on the loans. Each lender will have different requirements for co-signer release, and some lenders will not offer that option, so understand the policies at each institution before borrowing the loan.

4. Reviewing Repayment Options

Next, look at the different options a bank or lender offers for repaying private student loans. For example, do the loans come with five-year terms? 10 years? 15? Also, consider whether there is an option to make full payments or interest-only payments while in school or whether the lender offers a repayment deferment while enrolled.

Consider whether the lender offers any type of student loan grace period immediately after graduation in which no payments need to be made. And if a deferment or grace period is available, take note of what interest and/or fees accrue on your loan balances during that time.

5. Comparing Interest Rates and Fees

Cost is often one of the most important considerations for how to choose a student loan lender. After reviewing the other details of borrowing narrow the focus down to the interest rates and fees a private student loan lender charges.

Consider whether a bank offers variable rate loans, fixed rate loans, or both. On a variable rate loan, the interest rate is just that—variable. This means it can fluctuate over time, increasing or decreasing, depending on how the underlying benchmark rate moves. With fixed rate loans, the interest rate stays the same for the life of the loan.

Deciding which one to choose may depend on what’s happening with interest rates in general. With interest rates already low, a fixed rate loan option could make sense if you want reassurance that your rates won’t go up over time.

But if rates drop even further, a variable rate loan could allow you to capitalize on that and potentially save money on interest—provided rates don’t go back up again over time!

Other factors to consider when deciding between a fixed and variable rate loan include the length of the repayment term, and whether or not the borrower would be able to cover a higher monthly payment should the variable interest rate increase.

Aside from whether private student loan rates are fixed or variable, take time to compare the rates themselves across different lenders. If a lender offers a range of interest rates, look at how the high end and low end of that range lines up with what other banks or lenders are offering.

Remember, your credit score and history (or the credit score and history of your co-signer, if you need one) can play a big part in determining the rates you qualify for. But looking at how rates stack up overall can help with how to choose a lender for a student loan.

Banks and other lenders typically allow potential borrowers to see what rates they may qualify for. When getting rate quotes, double check that the lender is doing an initial “soft” credit pull. This won’t impact an individual’s credit score1, unlike a “hard” credit inquiry.

After you’ve compared rates, check out the fees a bank or lender charges as well. Some fees to consider include:

•   Loan origination fees
•   Late payment penalties
•   Returned payment fees

The good news is, there are plenty of lenders that don’t charge fees like origination fees for private student loans. These fees could add up, and if there is a fee for paying late or for unforeseen insufficient funds, it can be important to factor those costs in.

6. Asking About Loan Discounts or Other Benefits

Another item on the list of things to consider for how to choose a student loan lender are the “extras” a bank might offer. For instance, it’s not uncommon for lenders to cut you a break on interest when you enroll in automatic payments for your loans.

While the specifics vary by lender, some may offer a reduction of the interest rate when the loan is enrolled in autopay, which can help reduce the cost of interest over the life of the loan. Another consideration may be whether a bank offers things like hardship programs or forbearance options in case there are issues repaying the loan at some point.

Unlike federal student loans, private student loan lenders aren’t required to offer hardship deferment or forbearance programs, but some do. SoFi members, for example, may qualify to pause their payments temporarily through the Unemployment Protection Program.

And finally, look at whether a lender offers anything else that could make help make your life as a student loan borrower easier. That could include an easy-to-use mobile app for managing loans, free online educational resources to help you better understand student loans, or career counseling.

All of those features can add value when choosing a student loan lender that isn’t your primary bank or another lender.

Doing Your Homework Can Pay Off When Choosing a Student Loan Lender

When considering private student loans, it’s important to remember that all banks and lenders aren’t created equally. If you’re willing to spend some time researching loan options, it might become easier to find a lender that’s the best fit for your personal needs and budget.

While we believe exhausting your federal aid options first before taking on private student loans is wise, when looking for private student loans beyond your bank, consider adding SoFi to your list of potential lenders.

SoFi offers no-fee private student loans for undergraduate and graduate school and for parents, too, all with flexible repayment options and competitive interest rates.

Looking into borrowing a private student loan to pay for school? Learn more about how SoFi can help.


1Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. A hard credit pull, which may impact your credit score, is required if you apply for a SoFi product after being pre-qualified.
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 Loan Products
SoFi loans are originated by SoFi Lending Corp (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license # 6054612; NMLS # 1121636 . For additional product-specific legal and licensing information, see SoFi.com/legal.

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

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Ultimate College Application Checklist

In many ways, the college application process is like a final project before graduating from high school. It requires students to use the skills they’ve learned—and the hard work they’ve already put in—to build their case as a strong applicant. Once the application is filed, students receive a “grade”: accepted or denied.

Like with any project, it’s important to take a meticulous approach when putting together a college application. Any forgotten detail, even small details, could make the difference between a yes or a no—between getting into a safety school or a dream school.

Having a checklist of to-dos and action items can have a variety of benefits (like helping to reduce stress or improving time management). It creates a guideline for everything that needs to get done so you have an idea of what you still need to check off.

The college application process can be a doozy, and making a list could help keep the process streamlined. You can use these guidelines to develop a personalized checklist for the schools you are interested in applying to.

The College Application Checklist

If you’re looking for a handy-dandy section to print out and check off as you go, here’s where you can start. Then, you can read on for more details on how you might go about accomplishing these tasks.

•   Gather test scores (SAT®, ACT®, etc.) if prospective schools require them
•   Ask for reference letter(s)
•   Write personal essay (if needed)
•   Create a filing system for schools organized by the application deadline
•   Set reminders for application deadlines
•   Fill out the Free Application for Federal Student Aid (FAFSA®)
•   Research scholarships
•   Exercise patience (Okay, that doesn’t need to be checked off, but you might want to plan some fun activities that don’t involve watching your inbox for acceptance letters.)

Planning Ahead

Most college applications have a few major components. Some of the most common are test scores, references, and personal essays. These take time to put together and need to be planned for well in advance.

Admissions committees will also generally look at a student’s academic record and extracurricular activities. That volunteering you did as a sophomore at the animal shelter? That wasn’t just for the dogs.

Taking the Tests

Standardized tests like the SAT® and ACT®, which are required for most school applications, have set dates and deadlines that require students to register about a month in advance. (If you’re reading this around the date this post was originally published, SAT and ACT test dates have been delayed due to the pandemic, so be sure to check the testing websites for the latest news.)

For the SAT, it typically takes a couple weeks for scores to be distributed. Colleges typically receive scores 10 days after they are delivered to students. Similarly, the ACT has standard dates for delivering scores.

There are some schools that don’t require the SATs or have more flexible testing policies, so check with the schools you plan to submit applications to if you’re considering skipping a standardized test. Thanks to COVID-19, some universities are waiving their usual standardized testing requirements altogether.

Generally, however, if the college application deadline is in January , you should plan to take the SAT or ACT tests with enough time to receive and send your scores along with the application.

In addition, you might want to note the schedules for the tests and give yourself enough time to take the test again if the first round didn’t go so well. Work backward from each deadline and give yourself more time than you need.

Gathering Reference Letters

When asking for a reference letter, keep in mind that teachers and coaches are usually very busy and are also likely being asked by multiple students. If possible, give them at least a month to write a reference letter.

But really, the earlier the better. Some schools require recommendations from teachers in specific subjects, so be mindful of similar requirements.

Other Deadlines

You might want to consider other deadlines as well, such as applications for special dorms, department-level scholarships, registering for summer activities, and more. These things can end up coloring the college experience just as much as which university you get accepted to.

In many cases, dorms are available on a first-come, first-served basis, so applying early could mean getting the specific type of dorm you want, such as co-ed, separated by gender, or substance-free.

Staying Organized

Applying for college can be complicated and time-intensive. Creating a system to help keep you organized could help prevent important pieces from slipping through the cracks.

Before you start printing out forms and stashing away brochures, it could be helpful to create a folder for each school and make a list on the front with important information, such as:

•   College name
•   Application deadline
•   Type of deadline (early decision, early action, regular decision, or rolling admission)
•   Application fee
•   Application requirements (form, essay, references, etc.)

This could help you streamline your materials and monitor submission deadlines. Use one system to monitor submissions and deadlines, and make sure you and your parents can access that information.

One method of organization could be to organize the folders by deadline dates rather than school names to ensure you get all the information to each school on time.

You could keep copies of important documents, such as reference letters and student housing information, in each folder. Most early decision or early action deadlines are in November , while regular decision applications are usually due in January .

You might want to make a note of any schools that have extra forms, or a particular department within the college that has its own set of requirements. The university likely has a list of scholarship deadlines, which may be the same or different than its application deadline.

College application deadlines tend to be set in stone, and admission officers may even frown upon those who wait till the last minute to submit their applications—they might question your interest in attending if you wait so long to apply. It may be helpful to set reminders in your phone, computer, or on the kitchen calendar.

Schedule reminders for at least a month before the real deadline so there’s plenty of time to ask questions, make adjustments, and get your application in well before the deadline.

Consolidate tasks whenever possible. If you need a reference for an extracurricular activity, don’t ask the softball coach and the band conductor. Pick one and ask for a reference letter they can easily customize for both schools.

Even the simplest college application is made up of multiple forms. You can use a physical filing system or cloud-based storage to store forms, reference letters, and more. Divide everything into folders for each college and label PDFs accurately.

Applying for Financial Aid

While you’re gathering all the information for colleges, you might also want to be thinking about how to pay for it. Start with the Free Application for Federal Student Aid or FAFSA ®, the form that parents and students must fill out to be eligible for federal student loans and aid. Many colleges also use the FAFSA to decide if a student qualifies for its own grants and scholarships.

A university may offer both need-based and merit-based aid. Need-based aid is determined by a family’s income, while merit-based aid is determined by academics, athletics, and other talents. The FAFSA can help colleges determine how much need-based federal aid a student qualifies for.

The FAFSA application is generally available starting in October, and the due date varies by state . It can help to apply as early as possible since some financial aid is awarded on a first-come, first-served basis.

One common misconception is that the FAFSA is a one-time deal. In reality, the FAFSA must be filled out every year to account for any changes in income or other circumstances. For example, if one of your parents gets laid off from their job, you might qualify for more need-based aid.

For some students, federal aid (including federal student loans) isn’t enough to cover the full cost of attendance. If that’s the case, it may be time to look into some additional sources of funding.

Additional Funding Options

Some families are able to fill the gap in tuition costs with money they’ve saved up. Some parents may take out loans in their own name(s) to help their children pay for college as well.

Other students are able to pay for a portion of their tuition with scholarships or grants. Scholarships and grants may require those interested in applying to invest some time filling out an application (or writing an essay). They can be a useful way to cover education costs since they don’t need to be repaid.

There are quite a few scholarship databases to peruse to find some that may fit with your background and interests.

If you’ve exhausted your federal aid opportunities and are still looking to fill the gap, private student loans are an option to consider. While they don’t come with the same benefits as federal student loans (such as income-driven repayment plans and loan forgiveness options), they could be used to help pay for education expenses.

Unlike most federal student loans, the private student loan application process generally requires a credit check. Some students may find they need a co-signer, which is someone who would be held responsible for the loan in the event the primary borrower fails to make payments.

College can be a stressful time but financing it doesn’t have to be. SoFi offers private student loans with no fees and flexible repayment plans. The application process can be completed entirely online. If interested, start by finding the rates you could pre-qualify for (without it impacting your credit score).1

Learn more about private student loans with SoFi.


1Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. A hard credit pull, which may impact your credit score, is required if you apply for a SoFi product after being pre-qualified.
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.

SAT® is a trademark registered and/or owned by the College Board, which was not involved in the production of, and does not endorse, this product. ACT® is a registered trademark of ACT, Inc. which was not involved in the production of, and does not endorse, this product.
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SoFi loans are originated by SoFi Lending Corp (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation 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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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
website
.

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.
SoFi Loan Products
SoFi loans are originated by SoFi Lending Corp (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation 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.

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