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Are Student Loans Making Borrowers Delay Life Decisions?

Millions of Americans pursue college degrees in the hopes of creating a bright future for themselves. The goal is that after graduation, you’ll be gainfully employed and working toward a career that is both fulfilling and allows you to pay back your debts.

But as the cost of tuition across the country continues to skyrocket , the rosy picture of college allowing students to prosper after graduation may not be entirely accurate.

In America, the total student loan debt has reached $1.5 trillion , spread over 44 million borrowers. On average, students graduate with approximately $37,000 in student loan debt.

As a nation, we’re just beginning to understand how student loans affect the economy , and importantly—the lives of those holding the outstanding student debt.

America’s Student Debt Crisis

To understand how impactful the student loan debt crisis is, let’s put it into perspective. Consumer debt in the United States is measured by the Federal Reserve in five distinct categories—home, auto, credit card, student, and other debt.

Student loan debt was the smallest consumer debt category in 2003, at just 3.1% of the country’s total consumer debt. Fast forward 12 years to 2015 and student loan debt became the second largest category, accounting for 10.4% of the nation’s consumer debt. Since then household debt has continued to rise, with student loans accounting for 42% of all consumer debt in 2018.

How Does Student Loan Debt Affect Borrower’s Life Decisions

Given the demands of student loan debt, borrowers are delaying big life decisions. Things like buying a home or starting a family are happening later in life, for some, thanks to student loans and the financial implications they come with. Here are some of the areas affected by student loan debt:

Buying a Home

A 2017 study from the Federal Reserve Bank of New York found that while tuition has continued to rise , the increasing cost has not prevented students from pursuing higher education. Instead, students have accommodated the increasing tuition by taking on more debt to earn their degrees.

The study found that while rising tuition and debt accumulation had no impact on college enrollment or B.A. attainment rates, they did impact homeownership among millennials.

Researchers found that between 11% to 35% of the decrease in homeownership among 28 to 30-year-olds between the years of 2007 and 2015 could be attributed to tuition hikes and rising student debt. According to The New York Times, “homeownership among Americans in their 20s and 30s in 2018 is hovering near a three-decade low .”

The growing student debt impacts borrowers’ ability to buy a home in a few ways. When you apply for a mortgage, creditors look at your debt-to-income ratio, which is what you owe against how much you make. Nearly one-fifth of those who apply for a mortgage aren’t approved due to their debt-to-income ratio.

Another factor is your credit score. If you’ve missed payments on your loan or if the loan is delinquent or you’ve defaulted, your credit score could have been negatively impacted.

Possibly the biggest hurdle to homeownership when you hold student loans is saving for the down payment. Of those carrying student loan debt, 85% say that difficulty in saving has delayed their ability to buy a house.

Not only can student loan debt delay homeownership, it also can make it more likely that you will live with your parents after graduation.

Marriage (and Divorce)

Homeownership isn’t the only thing being delayed as a result of student loans. According to the Federal Reserve , one of the effects of student loan debt is borrowers delaying decisions about marriage and starting a family. A Consumer Reports survey found that 12% of respondents delayed getting married due to student debt.

Marriage can impact your student loan payments, depending on the types of loans you have and the repayment plan you are on. If you are on an income-based repayment plan, your monthly bill might change based on how much you and your spouse earn and how you file your taxes.

Starting your life together in debt can add stress to a marriage. In some cases, the financial stress of student loans led borrowers to divorce. A survey from Student Loan Hero found that 13% of respondents attribute student loan debt as a cause of their divorce. In addition, couples with student loan debt were more likely to delay divorce due to their student loans.

Starting a Family

In 2018, the fertility rate reached a record low. That same year, The New York Times conducted a survey in an attempt to discover why people are having fewer children.

The survey found that 64% delayed having children because child care was too expensive and 43% waited to have children due to financial instability. Of the people that didn’t plan to have children at all, 13% said it was as a result of student debt.

For women, having children can have a serious impact on their career and income. While there are a number of reasons Americans are having fewer children, student debt is becoming an increasingly impactful factor when it comes to deciding to delay starting a family. Especially when you consider that women hold more student loan debt than men and will earn less over their careers.

Pursuing Graduate School

If you have undergraduate student loan debt, you’re less likely to enroll in a graduate or professional degree program. Graduate school often means even more debt. The median debt for graduate students is $57,600 and one in four borrowers owes $100,000 or more, according to the New America Foundation .

An advanced degree can mean increased job opportunity, but it’s important to determine if taking out the debt is worth it when compared with your anticipated earning potential.

Saving for Retirement

One of the negative effects of debt on young adults is that their retirement savings can be impacted. According to a 2018 study by the Center for Retirement Research at Boston College , Millennials who never borrowed student loans saved twice as much for retirement by age 30 as college graduates who have student debt.

College graduates without debt at age 30 had saved approximately $18,200 for retirement as compared to just $9,100 for 30-year-olds with an average loan balance of $16,230.

The study also found that the actual amount of student loan debt alone wasn’t a factor in holding them back from saving for retirement. Instead, it found that any debt at all held borrowers back from saving.

Delaying retirement savings can mean playing catch up in your later years. Typically, the earlier you start saving for retirement, the more time your money will have to benefit from compound interest.

It can seem overwhelming to start saving for retirement while you’re still paying off student loan debt, but doing both at the same time can help you meet your financial goals in the future.

Managing Your Student Loans and Living Your Life

Student loans can impact almost every area of your life. But you don’t have to let student debt drag you down forever. There are alternate solutions that can help you manage your debt so you can work toward repayment. One option is student loan refinancing.

When you refinance your loans you take out a new loan with a private lender. Depending on your credit history and financial profile, you can qualify for a lower interest rate, which could substantially lower the amount of money you pay in interest over the life of the loan (depending on the term you select, of course).

At SoFi, you can refinance both private and federal student loans. If you’re enrolled in an income-based repayment plan or are working toward Public Service Loan Forgiveness, refinancing may not be for you, since you’ll no longer be eligible for those programs and other federal student loan protections.

But if you’re currently paying off a variety of loans with different loan servicers, refinancing could allow you to simplify your repayment plan, resulting in one monthly payment.

When you refinance with SoFi there are no origination fees or prepayment penalties. As a SoFi Member, you’ll have access to benefits including career counseling and unemployment protection, which could allow you to temporarily pause your student loan payments in the event that you lose your job through no fault of your own. To see how refinancing could help you manage your student loans, take a look at our student loan refinance calculator.

Don’t let student loans hold you back from living your life. Refinancing could potentially help you take control of your student debt, and you can get a quote from SoFi in just minutes.


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 Student Loan Refinance
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 MAY 1, 2022 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 FOR MORE INFORMATION.
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.

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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Can You Stop Student Loan Wage Garnishment?

While on the work grind at the office, you get an email from the HR department, inviting you down to pay them a visit. Uh-oh. What could possibly be up? You’re a rock star on the job, so you cannot imagine what the trouble could be.

The good news: you’re not getting fired. The bad news: they tell you that part of your wages are going to be garnished in order to pay back your outstanding school loans.

Student loan wage garnishment is a tough thing to face; what makes it doubly troublesome is the official letter from the U.S. Department of Education that notifies your employer that a percentage of your paycheck will now go directly to paying back your outstanding student loan balances.

This may be something that would be a big enough bummer when you’re the only one who knows about it. When your employer is let in on the secret, and ordered by the government to reconfigure your paycheck, the awkwardness knows no bounds.

Student loan wage garnishment does not make it easy for you or your employer . Your company’s payroll department generally executes (and sometimes calculates) the student loan garnishment amount, and forwards the payments to the correct agency or creditor. In some cases, your employer can be held liable for the full amount or a portion thereof for failure to comply with the garnishment. This can include interest, court fees, and legal costs.

If it’s any consolation, you would not be alone in this situation. Let’s start with the macro: according to
CNBC
, more than one million people default on their student loans each year. By the year 2023, nearly 40% of borrowers are expected to default on their student loans. Outstanding debt in the U.S. has tripled over the last decade and now exceeds $1.5 trillion. That number far exceeds the traditional debt of autos and credit cards.

Now for the micro: according to a study by the ADP Research Institute , 7.2% of employees had their wages garnished in 2013 (the latest research we could find on this). Of that total, 2.9% of those garnishments were from student loan and court-ordered consumer debt garnishment.

Defaulting on your student loan is not ideal. We’re going to share some details on federal student loan garnishment, and how you can avoid defaulting on your loans:

How Does Federal Student Loan Garnishment Work

First, let’s discuss how wage student loan garnishment works:

Your loan becomes delinquent the first day after you miss a payment, and it will remain delinquent until you pay that unpaid amount. That means even if you start making monthly payments again, you’re not off the hook. You’re still delinquent until that missed payment is paid. If you are more than 90 days delinquent on your payment, your loan servicer reports the lateness to the three national credit bureaus. This can affect your credit score.

If the situation does not resolve itself, the government may resort to contacting your employer and garnishing your wages. They can also take that sweet tax refund you’re expecting, by law, and without a court order. And they can legally garnish up to 15% of your disposable income.

How is disposable income defined ? Disposable income generally is calculated when your tax obligations and other withholdings such as social security, Medicare, state tax, city/local tax, health insurance premiums, involuntary retirement or pension plans are subtracted from your gross pay.

Anyone working in the United States or a U.S. territory can have their earnings garnished for almost any type of obligation that is authorized by federal or state laws.

Ways To Help Prevent Your Student Loan From Becoming Delinquent

If you are concerned about wage garnishment for your federal student loans, there are proactive options that you can consider to keep your account from becoming delinquent in the first place:

Scheduling automatic payments. You can have the monthly obligation automatically and electronically deducted from your checking or savings account.

Building an emergency savings fund. You can save at least six months of backup funds that you can use specifically to make your monthly payments. This may come in handy should you be without income for a time.

Ways To Help Prevent Your Student Loans From Going Into Default

Based on your financial circumstances, there are a few options available that may allow you to make your student loan payments more affordable or even put them on a temporary hold:

Income-Driven Repayment (IDR) Plans: With these plans, your student loan payments are adjusted based on your discretionary income . Depending on the plan you choose , the government typically extends your repayment terms and readjusts your monthly payment. The downside: You may pay more interest over the life of your loan(s).

Forbearance or Deferment: If making payments is becoming or has become nearly impossible, you can ask your lender to defer your payments or request forbearance. If they agree and you qualify, you can delay your payments and avoid default.

Learn more about avoiding delinquency and default at the Department of Education’s website.

Student Loan Refinancing vs Consolidation

If student loan wage garnishment is the nightmare that comes true, here are two options that may be able to stop it: consolidating or refinancing your student loans. First, know the difference between the two (and it’s a pretty big one):

When you refinance student loans, you’re actually paying off your existing loans with a new loan from a private lender. In this process, you can possibly reduce your payments and make them more affordable. Or you may be able to lower your interest rate. However, you also will lose out on certain benefits that come with federal student loans, like deferment and forbearance, and lose your eligibility for all other federal student loan programs.

When you consolidate your federal student loans with the federal government, you essentially “bind” them all together into one, big loan. Sounds like a plan, but there can be a few downsides; this could result in you paying more in interest over the life of your new, consolidated loan because the interest rate on your consolidated federal loan will be the weighted average of all your loans, rounded to the nearest eighth of 1%. You can also only consolidate your federal loans under a Direct Consolidation Loan , which has its own requirements if you’re already in default , and isn’t available for private student loans.

Consolidating a Defaulted Loan

According to the U.S. Department of Education , if you want to consolidate a defaulted loan, you must make “satisfactory repayment arrangements ” on the student loan with your current loan servicer before you consolidate.

If you want to consolidate a defaulted loan that is being collected through garnishment of your wages, or that is being collected in accordance with a court order after a judgment was obtained against you, you may only do so if the garnishment order has been lifted or the judgment has been vacated. (Get more details
here .)

Refinancing Your Student Loans

You may be able to combine your private and federal loans into one brand-new, private refinanced loan.

You may be a good candidate for student loan refinancing if you have a steady income, a consistent history of on-time debt payments, and you don’t have need for federal student loan benefits—among other important personal financial factors. (When you refinance your federal loans with a private lender, you can no longer access any federal loan benefits.)

A lender will most likely offer you a few choices for your refinanced student loan: fixed and variable interest rates, as well as a variety of repayment terms (this is often based on your credit history and current financial situation). If you qualify for refinancing, your new loan should (hopefully) come with a new interest rate or a new loan term that can lower your monthly payments.

Learn how refinancing your student loans with SoFi can help you manage your student loan debt.


SoFi Student Loan Refinance
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 MAY 1, 2022 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 FOR MORE INFORMATION.
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.

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
.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

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Home Buying Mistakes to Avoid

Buying a home is a big deal, both emotionally and financially. For many people, homeownership is still an essential part of the American dream. And, of course, it’s the biggest investment some will ever make.

But many times real-life home buying isn’t the same as the 1-2-3, in-and-out, fun-and-done experiences portrayed on reality TV shows.

In the midst of the thrill of the search and daydreaming of the perfect home and how your family will fit into it, some things can go wrong.

You could improve your chances of getting it right by taking a proactive approach from the beginning of your search to the day you sign on the dotted line. When you’re ready to take the leap, here are five home-buying mistakes you might want to avoid:

Not Getting Your Finances in Order

Before you start browsing online listings or get your heart set on a certain neighborhood, it might be a good idea to contact a lender (or lenders) to prequalify for a loan. You’ll provide basic information about your debt, income, assets, etc., and they can give you an idea of how much you can borrow.

Mortgage prequalification isn’t a commitment for the lender or buyer—it’s just a first step. If you appear to meet a lender’s standards, you could move on the pre-approval stage submitting income and asset documentation for a more in-depth review of your finances.

Once the lender approves your official loan application, you’ll receive a conditional commitment for a designated loan amount—called a pre-approval letter —and have a better idea of what your loan terms will be. Mortgage pre-approval can help demonstrate to sellers that you’ve completed the first step in getting a mortgage because your credit, income and assets have already been reviewed by an underwriter, and that could give you an edge.

Not Being Realistic about What You Can Afford

The lender you choose will tell you the maximum amount you’re approved to borrow for a home, but you don’t have to use every penny of that money. It’s important to keep other factors in mind, including:

Will your new mortgage payment fit comfortably into your monthly budget? You may have to make some tradeoffs—less travel, shopping, or dining out—if your new payment is higher than your current rent or mortgage payment. Not sure if you’re ready?

If you have some idea of what your new payment will be, you might want to try living with it for a few months before actually committing to a loan. You could put the difference between old and new into a savings account to see if the new payment is within your budget and, as a bonus, save some money in the meantime.

Your mortgage might not be the only expense that goes up. If you’re buying a bigger place, you may have to pay more for utilities—especially if you’ve been a renter and some of those costs were included every month. If the home has a lawn or pool, you might have to maintain them or pay someone else to do it. Or you may have a homeowner association (HOA) fee.

You’ll also have to purchase homeowner’s insurance and pay property taxes . You can get some idea of what those costs will be by searching for homes online—but you might want to hit some open houses as well. It may help you set some priorities (are you willing to give up a bathroom to get a bigger kitchen?), and you could talk to the Realtor to get information about HOA fees and other expenses.

Make your dream home a reality with
competitive rates and no hidden fees.


Digging Too Deep for a down Payment

If you have to drain your emergency savings to manage the down payment on a home, you might want to dial down the amount or wait and save up a bit more. Consider what could happen if the home needs a costly repair or, worse, if you or someone in your family suddenly has an expensive medical bill. That’s what an emergency fund is for.

The same thing holds for taking money from your retirement savings. The IRS allows first-time homebuyers (IRS defined as not owning a primary residence in the past 2 years) to withdraw money from an IRA penalty-free , but you’ll still pay federal and state income taxes on the money—and lose out on the growth you’d possibly have if you left those funds alone.

If you have a 401(k), you could take a loan against those funds, but again, there are consequences . There may be a provision in your plan that prohibits you from making additional contributions until the loan balance is repaid, you’ll miss out on any growth, and you may be required to pay back the loan immediately if you quit or lose your job . If that happens, the money you borrowed will become fully taxable and may be subject to a 10% early withdrawal penalty .

There are benefits to putting 20% down on a home: You’ll avoid paying private mortgage insurance (PMI) and your monthly payments will be lower. But 20% isn’t required. For example, The minimum down payment required for a conventional loan is 3%, and for an FHA loan, it’s 3.5%. According to the National Association of Realtors’ Profile of Homebuyers and Sellers , overall, buyers made a median 13% down payment in 2018, and first-time buyers put a median 7% down.

With all the other costs you could be looking at as you move into a home—closing costs, utility deposits, moving expenses, decorating, and more—your down payment amount is something to consider if you want to avoid getting in over your head.

Passing on a Full Inspection

It may be tempting to waive the home inspection when you’re trying to buy the home of your dreams—whether it’s to save on this extra expense or to make your offer more appealing to the sellers.

A quality home inspection might reveal critical information about the condition of a home and its systems—from electrical problems to hidden mold to a leaky roof. And your inspection report might serve as a useful negotiating tool: You could use it to ask for repairs or to work out a better price from the seller. And if you aren’t happy with the inspection results, you may be able to use it to cancel the offer to buy.

Letting Your Emotions Get The Better of You

Home buying can be a roller coaster, so it’s important to prepare yourself psychologically as well as financially. If you’ve ever talked to someone buying a house, you know there are potential pitfalls all through the purchasing process.

You might fall in love with the perfect house and find it’s way over your budget. You might get annoyed with the sellers or their realtor, especially during the negotiation process. You might disagree with your spouse or a co-buyer about priorities.

Loan Satisfaction is Important

When you’re ready to line up your financing, the loan terms you get could be nearly as significant as your home’s location as far as long-term satisfaction.

You might want to look at more than just your monthly payment and consider the interest rate, the length of the loan, and other factors that make one lender a better fit than another.

With a SoFimortgage loan, for example, the prequalification process is quick and easy—it takes just minutes and it costs nothing. And with SoFi, you can put as little as 10% down on a home, with no hidden fees.

Buying a home, whether it’s your first or your fifth, is seldom accomplished without a few stressful days and sleepless nights . But you might be able to make things easier if you do your research, work with professionals, and make sure your financial plan is in place before you throw yourself into a serious search.

If you’re thinking about buying a home, take a look at what a SoFi mortgage could do for you.


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. or an affiliate (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 Home Loans
Terms, conditions, and state restrictions apply. SoFi Home Loans are not available in all states. See SoFi.com/eligibility for more information.

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Marrying Someone With Student Loans

Getting married is a momentous occasion—you’re choosing to legally commit to your partner in sickness and in health. And that’s something to celebrate. But before you say “I do,” it is important to understand how your student loan obligations might change after your big day.

After all, you’re ready to share your life, but do you have to share your student loans? Here are five things to know about student loans and marriage.

Open and Honest Communication is Key

Let’s be real for a second: money is stressful. In fact, money is one of the most common topics of relationship stress. Whether you’re arguing about high student loan payments or how much you want to spend on eating out every month, money can cause relationship problems.

There is good news, though: couples who talk openly about money daily or weekly are more likely to have strong marriages. That means that learning how to talk about money before you get married is one great way to create a strong relationship from the get-go, especially if you’re marrying someone with student loan debt, or have student loan debt yourself.

In addition to figuring out your money and budgeting style, it can be helpful to hash out the basics before your marital bliss is interrupted by your next student loan bill. For starters, it may be helpful to discuss exactly how much each of you owe on your student loans. It is important that you both understand exactly how much is owed so you can plan for repayment together.

Once you’ve got the hard numbers down, it may also be helpful to share what type of current student loan repayment plan you are on, and what your repayment priorities are. After all, if your partner wants to pay off their law school debt right away but you’re happy on an income-driven repayment plan as a school teacher, it is important that you have a plan for navigating potential disagreements.

While every relationship is different, all relationships will require decision-making about money. Learning to talk about money now can help set you up for success down the road.

Who is Responsible For Repayment?

You’re not automatically on the hook for your spouse’s loans. If you or your spouse took our student loans prior to your marriage, you likely won’t be responsible for those loans if your spouse stops paying.

Of course, if you or your spouse takes on new loans while you’re married and you live in a community property state, you may end up responsible for a portion of that debt.

The law is complicated, so if you’re worried about dividing up your assets before you get married, it is always good to talk to a lawyer. Many young couples are even now considering pre-nups to protect themselves and set up expectations in advance.

Will My Monthly Payments Change?

So then when it comes to student loans, marriage doesn’t change anything? Not so fast. One often-overlooked aspect of marriage is that it can change your income—and this matters for many reasons, including determining your monthly income-driven loan payments.

For example, if you’re on a repayment plan that uses your household income to determine your monthly payment, and are married and filing jointly, your lender will take into account both you and your spouse’s income, which could lead to higher monthly payments.

Likewise, you may miss out on the student loan interest deduction when it comes time to file your taxes. P.S., talking to an accountant or tax attorney when when it comes to all things taxes and student loans could be a smart idea. When in doubt, definitely speak with a licensed professional.

Thinking About Refinancing Your Loans with Your Spouse

Just because your student debt doesn’t automatically become a joint obligation the moment you say “I do” doesn’t mean you can’t combine your debt and focus on paying it off together.

Many couples choose to combine their student loan debt through refinancing so they can pay off one bill together, rather than juggling multiple debt payments.

Student loan debt and marriage can be stressful, and student loan refinancing allows you to combine multiple loans into one (potentially with a lower interest rate).

Of course, refinancing isn’t for everyone. If you or your spouse is planning on taking advantage of income-driven repayment or other federal repayment programs, joint refinancing with a private company could make you ineligible.

It’s important to start your marriage off on a strong foot by making sure that you and your partner can talk honestly about money. Together, you can navigate anything—including student loan debt.

Learn more about refinancing your student loans with SoFi.



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.
SoFi Student Loan Refinance
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 MAY 1, 2022 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 FOR MORE INFORMATION.
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.

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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What Millennials Want From Their Bank

If you ask Baby Boomers, millennials have destroyed pretty much everything—napkins, Applebee’s, starter homes, even cereal. And while banking will likely always exist in some fashion, they may be in the process of killing conventional financial institutions, with branches and physical locations potentially on their way out.

Unlike their parents, Millennial don’t have faith in traditional financial services, due in part to the financial crisis of 2008, a deluge of scandals , and their general unhappiness with the banking status quo . They visit brick-and-mortar lenders less often—if they visit them at all.

At the same time, the rise of the digital economy is offering ,millennials other options. Without a doubt, America’s 73 million millennials are changing the entire mindset around how money should be managed, saved, and spent. But if millennials aren’t happy with what’s always been, what’s their new definition of normal?

Business Model Over Branches

According to a Kasasa study, 82% of millennials have no issue with switching banks , and one-third of them are open to switching banks within 90 days. Their lack of loyalty to a specific financial brand—which differs from their parents’ and grandparents’ generations—points to the possibility that millennials mostly see major banks as interchangeable and are looking for specific ways banks can help them.

Many are okay with a branchless, fully digital financial partner like SoFi, and would consider putting their money into non-financial service companies they already use regularly, such as Square or PayPal.

They’re much more likely to turn to the web in search of a lender focused on improving the lives of their customers, not their executives, which means financial institutions need to step up their game—both in digital prowess and real-life trust.

A Great App

More than one in three millennials say they’ve abandoned a mobile-banking process because it took too long. And just like their attitude toward the companies they trust with their money, millennials judge a good app by its capabilities first—speed, security, mobile deposit, customizable alerts, and quick access to human or AI customer service top their digital priority list.

They’re also likely to judge an app by its cover and are more likely to be drawn to one that not only works well, but looks great. Millennials also give big points to financial apps that intuit their needs based on account types, balances, and activity, and offer up personalized products and education. To find the perfect app for them, millennials will often turn to online ratings and reviews or recommendations from their peers.

Tools

Beyond an attractive design and a simple UX, extras like budgeting tools and wealth management are the keys to Millennial hearts and can be deal breakers, especially for those who face the huge financial challenge of mounting student loan debt, underemployment , or both.

In fact, a lender of the future may look more like a complete financial ecosystem that not only facilitates transactions, but also acts as a “digital concierge ” that makes relevant recommendations and even offers advice. For customers, it means bespoke solutions in real-time that help make their lives easier.

Engagement and Customer Service

Millennials seem to have more problems with their banks, and are less satisfied with the solutions they’re provided.

Even though they engage with their banks mainly digitally, they’re still looking for that person-to-person interaction, and want to know that the bank is listening to their problems and working to fix their issues—whether it’s a glitch with the app or something larger. Anticipating millennials’ concerns with finances and financial services will go a long way in maintaining their trust—and business.

Low Fees and High Interest

If there’s one thing different generations have in common, it’s the collective dismay over financial institutions charging high fees for everything, from opening accounts to overdrafting and making transfers. And beyond that, there’s the dissatisfaction that comes with accounts that offer tiny interest rates after the mountains of fees. This is an essential issue, especially because, according to Gallup , millennials were most likely to leave their current lender over an issue with fees.

Even forgiving a few fees would make a difference in retaining their customers. But thanks in large part to the rise of digital opportunities like SoFi Money, customers are able to keep more of their hard-earned money in their pockets than ever before.

Transparency and Truth

Finally, millennials just want their bank to be straight with them. To tell them about fees up front, to make information easy to find, and to be honest about their practices. They’re marketing savvy and read the fine print.

And, as previously mentioned, brand loyalty won’t supersede their dissatisfaction. Millennials are wary to gimmicks and obfuscation, and once their trust is lost, that’s it—there’s no going back.

Let’s be real here—the financial industry isn’t going anywhere. But in order to keep up with this generation’s needs—and the next’s—lenders need to truly hear what millennials are asking for, and then rise to the occasion.

SoFi Money: All of the Above

We hear you, millennials. And we want what you want. So we developed SoFi Money®, a new cash management account that has no account fees. With SoFi Money, withdrawing cash is fee-free at 55,000+ ATMs worldwide (fee structure is subject to change at any time).

Plus, you’ll gain access to the SoFi community—members like you, career coaches, credentialed financial planners, and special events.

Learn more about how SoFi Money is a great way to spend and save.


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 Money®
SoFi Money is a cash management account, which is a brokerage product, offered by SoFi Securities LLC, member FINRA / SIPC .
Neither SoFi nor its affiliates is a bank. SoFi Money Debit Card issued by The Bancorp Bank. SoFi has partnered with Allpoint to provide consumers with ATM access at any of the 55,000+ ATMs within the Allpoint network. Consumers will not be charged a fee when using an in-network ATM, however, third party fees incurred when using out-of-network ATMs are not subject to reimbursement. SoFi’s ATM policies are subject to change at our discretion at any time.

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