Common Student Loan Servicers

Common Student Loan Servicers

If you borrowed a federal student loan to pay for higher education costs, you won’t make payments directly to the government. There are a number of loan servicers who work with the U.S. Department of Education to oversee loan repayment for federal student loans.

Understanding who your loan servicer is, and what they do is essential for the loan repayment process.

What Are Student Loan Servicers?

Student loan servicers are companies that take care of the disbursement, billing, and customer service aspects of your federal student loans. They can help you figure out things like which repayment plan you should be on and whether to consolidate your student loans.

Need deferment or forbearance? They can also help you set that up. Loan servicers are basically a one-stop shop for everything you need to know or changes you need to make on your federal student loans.

List of Major Student Loan Servicers & Companies

Here are some of the major student loan servicers:

EdFinancial Services (HESC)

Address: P.O. Box 36008, Knoxville, TN 37930-6008
Phone: 1 (855) 337-6884
Website: www.edfinancial.com

Located in Knoxville, Tennessee, EdFinancial Services has been providing loan servicing for over 30 years. They work with both federal and private student loans, as well as schools that need help with things like financial aid processing.

MOHELA

Address: 633 Spirit Drive, Chesterfield, MO 63005-1243
Phone: 1 (888) 866-4352
Website: www.mohela.com

MOHELA is a student loan servicer headquartered in St. Louis, Missouri with offices in Columbia, Missouri and Washington, DC. They have been around for over 40 years and focus primarily on federal student loans.

Nelnet

Address: P.O. Box 82561, Lincoln, NE 68501-2561
Phone: 1 (888) 486-4722
Website: www.nelnet.com

Nelnet is one of the biggest student loan servicers in the country. Headquartered in Lincoln, Nebraska, they service federal and private student loans under their financial services division. They also own Great Lakes Educational Loan Services, began servicing student loans from FedLoans, and are a for-profit company listed on the New York Stock Exchange.

Aidvantage

Address: For general correspondence, P.O. Box 300001, Greenville, TX 75403-3001
Phone: 1 (800) 722-1300
Website: https://aidvantage.com/

Aidvantage, a branch of Maximus Education, LLC, is servicing either Direct or FFEL federal loans for the U.S. Department of Education. Aidvantage took over the loans that were formerly administered by Navient, a student loan servicer who stopped working with the U.S. Department of Education in September 2021.

ECSI

Address: For assistance requests, P.O. Box 1289, Moon Township, PA 15108
Phone: 1 (888) 549-3274
Website: https://heartland.ecsi.net/

Founded in 1972, ECSI stands for Educational Computer Systems, Inc. In addition to working as a student loan servicer for federal student loans, they also provide support with tax document services, tuition payment plans, and refund management.

Default Resolution Group

Address: Correspondence can be sent to P.O. Box 5609, Greenville, TX 75403-5609
Phone: 1 (800) 621-3115
Website: https://myeddebt.ed.gov/

Part of the U.S. Department of Education, this organization provides information and assistance for borrowers who have federal student loans in default or have received a grant overpayment. Grants, such as a Federal Pell Grant, may need to be partially repaid in the event the student receives an overpayment.

​​Private Student Loans With SoFi

The loan servicer on a private student loan is typically the lender. Private loans can be helpful for students looking to fill funding gaps when federal aid and scholarships aren’t enough to pay for tuition. They don’t always offer the same benefits as federal student loans, like options for deferment or the ability to pursue Public Service Loan Forgiveness, so they are generally considered only if a student has closely reviewed all other options.

SoFi provides private student loans for undergraduate and graduate students, or their parents. These loans have no fees and borrowers have the option of four flexible repayment plans. When you borrow a SoFi student loan, SoFi is your loan servicer. Borrowers are able to make payments directly in the SoFi app or online and have access to 24/7 customer service.



💡 Quick Tip: Get flexible terms and competitive rates when you refinance your student loan with SoFi.

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How to Find out Who Your Student Loan Servicer Is

You don’t get to pick your student loan servicer, since they’re assigned to you when your loan is disbursed. If you’re not sure who your loan servicer is, don’t worry. Finding your servicer is easy. You can look it up by visiting the Department of Education’s student aid website, which has all the information about your federal student loans and contact information for the loan servicers.

Additionally, in some cases, student loans may be transferred between servicers due to the company’s closure, the expiration of a government contract, and more. Should this happen, borrowers are supposed to be notified of the change.

Can You Change Your Student Loan Servicer?

While sometimes student loans can be transferred from one servicer to another, this usually doesn’t happen simply because a borrower requests it. The main way you can change servicers is if you refinance your student loans from federal loans to private student loans.

By refinancing, you can potentially cut interest costs over the life of the loan, if you’re able to qualify for a more competitive interest rate. Refinancing can also allow you to adjust the repayment term on the loan, though extending the loan’s repayment term may increase the interest costs over the life of the loan.

However, there are also some downsides. If you refinance your federal student loans with a private lender, you’ll no longer be eligible for income-based repayment plans, and you might lose other federal loan protections like the option for deferment or forbearance. This may be important if you are uncertain about your future income or you are struggling with your repayment.

The Takeaway

Student loan servicers are private companies that work with the U.S. Department of Education to administer federal student loans. They manage student loan payments, oversee deferment or forbearance applications, and provide assistance to borrowers with questions about their repayment plan or their student loans in general. Private student loans are generally managed by the lender.

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


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

FAQ

What is the most common student loan?

Federal student loans are the most common type of student loan borrowed to pay for higher education costs. Federal student loans include Direct Subsidized and Unsubsidized loans and PLUS Loans. Approximately 92% of student loans were federal as of July 2023.

Who are the main student loan servicers?

The U.S. Department of Education works with six student loan servicers who manage and administer all federal student loans. Private student loans are, for the most part, serviced by the lender who made the loan. In some cases, your loan servicer may change. If it does, you should receive a notice of the change.

What do loan servicers do?

Loan servicers are companies that manage the different facets of student loan repayment. They administer the loan, collect payments, can assist and can provide assistance to customers with questions related to their student loan repayment.


Student Loan Refinancing
If you are a federal student loan borrower you should take time now to prepare for your payments to restart, including the opportunity to refinance your student loan debt at a lower APR or to extend your term to achieve a lower monthly payment. (You may pay more interest over the life of the loan if you refinance with an extended term.) Please note that once you refinance federal student loans, you will no longer be eligible for current or future flexible payment options available to federal loan borrowers, including but not limited to income-based repayment plans, such as the SAVE Plan, or extended repayment plans.



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SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.


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-criteria 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.

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

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 Are Stock Delistings and Why Do They Occur?

What Are Stock Delistings and Why Do They Occur?

When a stock is delisted, that means it’s been removed from its exchange. All publicly traded stocks are listed on an exchange. In the United States, that typically means the New York Stock Exchange (NYSE) or the Nasdaq.

There are different reasons for delisting stock, it can occur voluntarily or involuntarily. Owning a delisted stock doesn’t mean you can no longer trade it, but it does change how trades take place. If you own a delisted stock, it’s important to understand what it may mean for your portfolio.

How Stock Listings Work

Before diving into stock delisting, it’s helpful to know more about how stocks get listed in the first place. Stock exchanges can either be physical or digital locations in which investors buy and sell stocks and other securities. The NYSE is an example of a physical exchange, while the Nasdaq is an electronic stock exchange.

To get listed on any stock exchange, companies must meet certain requirements. For example, Nasdaq-listed companies must meet specific guidelines relating to:

•   Pre-tax earnings

•   Cash flows

•   Market capitalization

•   Revenue

•   Total assets

•   Stockholder equity

•   Minimum bid price

Companies must also pay a fee to be listed on the exchange. The NYSE has its own requirements that companies must meet to be listed.

Once a stock is listed, it can be traded by investors. But being listed on an exchange doesn’t guarantee the stock will remain there permanently. Stocks get added to and removed from exchanges fairly regularly.


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What Does Delisting a Stock Mean?

When a stock is delisted, either the company itself or the exchange decides to remove the stock from the exchange.

Exchange-Initiated Stock Delisting

When an exchange delists a stock, it’s typically because it no longer meets the minimum requirements for listing or its failed to meet some regulatory requirement. Using Nasdaq-listed stocks as an example, a delisting can happen if a company’s pre-tax earnings, market capitalization, or minimum share price fall below the thresholds required by the exchange.

Exchanges set listing requirements to try and ensure that only high-quality companies are available to trade. Without stock listing requirements, it would be easier for financially unstable companies to find their way into the market. This could pose a risk to investors and the market as a whole.

In delisting stocks that don’t meet the basic requirements, exchanges can minimize that risk. When and if a company addresses the areas where it falls short, it can apply for relisting. Assuming it meets all the necessary requirements, it can once again trade on the exchange.

Exchanges typically give companies opportunities to rectify the situation before delisting stocks. For example, if a company is trading under the minimum bid price requirement, the exchange can send notice that this requirement isn’t being met and specify a deadline for improvement. That can help companies that experience temporary price dips only to have share prices rebound relatively quickly.

Company-Initiated Stock Delistings

A delisted stock can also reflect a decision on the part of the listed company. There are different reasons a company voluntarily delists itself. Scenarios include:

•   A move from public to private ownership

•   Merger with or acquisition by another company

•   Bankruptcy filing

•   Ceased operations

In some cases, a company may ask to be delisted as a preemptive measure if it’s aware that it’s in danger of being delisted by the exchange. For example, if the latest quarterly earnings report shows a steep decline in market capitalization below the minimum threshold, the company may move ahead with voluntary delisting.

What Happens If a Stock Is Delisted?

Once a stock has been delisted from its exchange, either voluntarily or involuntarily, it can still be traded. But trading activity now happens over-the-counter (OTC) versus through an exchange.

An over-the-counter trade is any trade that doesn’t take place on a stock exchange. Investors can trade both listed or delisted stock shares over-the-counter through alternative trading networks of market makers. The OTC Markets Group and the Financial Industry Regulation Authority (FINRA) are two groups that manage OTC trading activity.

Unless the company that issued a now-delisted stock cancels its shares for any reason, your investment doesn’t disappear. If you owned 500 shares of ABC company before it was delisted, for example, you’d still own 500 shares afterward. You could continue trading those shares, though you’d do so through an over-the-counter network.

What can change, however, is the value of those shares after the delisting. Again, this can depend on whether the exchange or the company initiated a delisting, and the reasoning behind the decision.

For example, if a stock is being delisted because the company is filing for bankruptcy its share price could plummet. That means when it’s time to sell them, you may end up doing so at a loss.

Even if a stock’s value doesn’t take a nosedive after delisting, it can still be a sign of financial trouble at the company. If you own delisted dividend-paying stocks, for instance, dividend payments may shrink or dry up altogether if the company begins making cutbacks to preserve capital or reduce expenses.

What to Do If a Stock You Own Is Delisted

If you own shares in a company that delists its stock, it’s important to consider how to manage that in your portfolio. Specifically, that means thinking about whether you want to hold on to your shares or sell them.

It helps to look at the bigger picture of why the reason for the delisting and what it might say about the company. If the company pulled its stock because a bankruptcy filing is in the works, then selling sooner rather than later might make sense to avoid a sharp drop in value.

Also, consider the ease with which you can later sell delisted stock if you decide to keep them. Some online brokerages allow you to trade over-the-counter but not all of them do. If you prefer to keep things as simple as possible when making trades, you may prefer to unload delisted stocks so you no longer have to deal with them.

Recommended: How to Open a New Brokerage Account

The Takeaway

When a stock becomes delisted, it’s removed from an exchange, either because it no longer met the requirements of the exchange, or because the company chose to delist for financial reasons. You can still trade a company after it’s delisted, but transactions occur over-the counter, rather than on an exchange.

Knowing about delisted stocks and companies can be helpful for investors of all types. It doesn’t necessarily mean that they need to invest in those companies, but broadening your knowledge about the markets is almost never a bad idea.

Ready to invest in your goals? It’s easy to get started when you open an investment account with SoFi Invest. You can invest in stocks, exchange-traded funds (ETFs), and more. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).

For a limited time, opening and funding an Active Invest account gives you the opportunity to get up to $1,000 in the stock of your choice.


Photo credit: iStock/wacomka

SoFi Invest®
The information provided is not meant to provide investment or financial advice. Also, past performance is no guarantee of future results.
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 . 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.
1) Automated Investing—The Automated Investing platform is owned by SoFi Wealth LLC, an SEC registered investment advisor (“Sofi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (“Sofi Securities).
2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.
3) Cryptocurrency is offered by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.
For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, please visit www.sofi.com/legal. Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform. Information related to lending products contained herein should not be construed as an offer or prequalification for any loan product offered by SoFi Bank, N.A.

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.

Claw Promotion: Customer must fund their Active Invest account with at least $10 within 30 days of opening the account. Probability of customer receiving $1,000 is 0.028%. See full terms and conditions.

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What Is Quantitative Easing?

Quantitative easing (QE) is a monetary policy tool in which a central bank attempts to stimulate growth in the economy by buying bonds or other financial assets in the open market.

When the central bank purchases assets, the money they’ve spent gets released into the market, increasing the money supply in an economy. QE is an unconventional monetary policy tool that’s usually used by a central bank when traditional tools — like lowering interest rates — are no longer effective or an option.

How Does Quantitative Easing Work?

Quantitative easing makes it easier for businesses to borrow money from banks, by essentially lowering the cost of borrowing money.

The Federal Reserve, or Fed, is the central bank of the United States. The Fed notably conducted multiple rounds of QE after the 2008 financial crisis. The U.S. central bank also embarked on a QE program in 2020 when quarantine measures were put in place due to the Covid-19 pandemic.

When the Federal Reserve purchases securities from other banks, it issues a credit to the bank’s reserves, thereby figuratively increasing the money supply. No funds actually change hands in a QE program. The funds used to purchase the securities are essentially created out of thin air as a credit. Hence, QE is often referred to as “printing money” since the central bank is boosting the fiat currency supply.

When the Fed purchases Treasuries from the government, this also keeps Treasury yields low by increasing the demand for them. When Treasury yields stay low, long-term interest rates remain low, which can make it easier for consumers to take out loans for a car, house, or other types of debt.

Banks are required to have a certain amount of money on hand each night when they close their books. This is called the bank reserve requirement. QE gives banks more than they need to hit this reserve requirement. When banks have extra money, they lend it out to other banks to make a profit. This can also help stimulate the economy.

In addition to making it easier for banks to give out loans, QE keeps the value of the U.S. dollar lower, which in turn lowers the cost of exports and makes stocks attractive to foreign investors. All of these factors can help to keep the economy running during challenging times.


💡 Quick Tip: Did you know that opening a brokerage account typically doesn’t come with any setup costs? Often, the only requirement to open a brokerage account — aside from providing personal details — is making an initial deposit.

When Low Interest Rates Aren’t Enough

While Congress controls government spending and tax rates — what’s known as fiscal policy — the Federal Reserve controls short-term interest rates, which are the main tool used to prevent or lower the impacts of a recession — a system known as monetary policy.

More specifically, the Fed adjusts the rate that banks have to pay to one another to loan money that is held in Fed accounts. If banks can borrow money at a lower rate, they in turn can lend money to their customers at a lower rate.

Central banks have long preferred to lower short-term interest rates to expand the economy and encourage more spending. Similarly, the Federal Reserve raises interest rates to slow inflation. But when interest rate cuts aren’t enough to stimulate the economy, as is now the case, quantitative easing is sometimes used as a last resort.

One limitation on interest rates is that they can’t practically be lowered to less than zero. Technically, negative interest rates are possible, but this would mean that banks would actually be paying people to borrow money, rather than the other way around.

When interest rates fall to near zero, and banks, corporations, and individuals hoard money, this results in a lack of liquidity in the market. Quantitative easing can help release money back into the market. The asset purchases will take place over the course of several months. The goal is to make sure that businesses have sufficient funds to lend to other businesses throughout the economic downturn.

Does Quantitative Easing Cause Inflation?

One of the biggest fears about quantitative easing is that it will cause too much inflation, or price increases. In such a scenario, inflation would occur because there’s a lot of money in the system.

Some economists argue that if the money supply increases quickly, it increases demand as more people have ample money to spend. That, in turn, can raise prices rapidly or encourage reckless financial decisions.

Some degree of inflation is healthy and normal. For instance, in the U.S., the Federal Reserve targets an inflation rate of 2%. But inflation rates that are too high can be painful for consumers. For instance, during the 1970s, the inflation rate averaged 7% and hit double-digit levels in 1974 and 1979, causing the prices of some goods — most notably oil — to skyrocket.

Past Examples of Quantitative Easing

A relatively new strategy, quantitative easing has been used a number of times over the past 20 years, with varying degrees of success.

Quantitative Easing in Japan

The first example of an advanced first-world country implementing a quantitative easing program was Japan in 2000-2006. Japan entered into a recession following the Asian Financial Crisis of 1997.

The Bank of Japan bought private debt and stocks through the QE program, but the program didn’t result in the stimulus they had hoped for. Japan’s GDP fell from $5.45 trillion to $4.52 trillion between 1995 and 2007. Japan also used QE in 2012 when Prime Minister Shinzo Abe was elected and sought to stimulate the economy.

Quantitative Easing in the US

A few rounds of quantitative easing took place throughout the financial crisis from 2008 to 2011.

The most successful example of QE was the $2 trillion stimulus enacted by the U.S. in 2008, despite the fact that it doubled the national debt from $2.1 trillion to $4.4 trillion in just a few years. Although many feel that the QE program helped get the U.S. and global economy through the recession following the financial crisis, this topic has been debated and is hard to quantify.

Some critics argue that banks actually held on to much of the excess money they received through the QE program rather than lending it out, so the program didn’t exactly have the desired effect. However, QE helped to remove subprime mortgages from bank balance sheets and bring the housing market back.

Quantitative Easing in Switzerland

During the 2008 financial crisis, the Swiss National Bank also implemented a QE program. In terms of its ratio to GDP, the Swiss program was the largest ever enacted in the world.

Despite this overwhelming effort that resulted in some economic growth, Switzerland didn’t reach its inflation targets after the use of QE.

Quantitative Easing in the UK

In 2016, the Bank of England launched a QE program worth £70 billion to help alleviate economic concerns about Brexit.

Between 2016 and 2018, business investment grew in the U.K., but it was still growing at a slower rate than it had been in previous years. Economists have not been able to confirm whether growth would have been even slower without the QE program.

Pros and Cons of Quantitative Easing

While QE programs can help stimulate a struggling economy, they have some downsides, and there are reasons they are used as a last resort.

Pros of Quantitative Easing

•   QE programs make it easier for businesses to take out loans.

•   The influx of money into the market can help keep the economy flowing and release liquidity traps.

•   Low interest rates make it easier for consumers to take out loans for cars, homes, and other borrowing needs.

•   QE can be an important tool during a financial crisis in order to avert recession, or even severe economic depression.

Cons of Quantitative Easing

•   Increasing the supply of money can lead to inflation.

•   Stagflation can occur if the QE money leads to inflation but doesn’t help with economic growth. The Fed can’t force banks to lend money out and it can’t force businesses and consumers to take out loans.

•   QE can devalue the domestic currency, which makes production and consumer costs higher.

•   As a relatively new economic concept, there isn’t data and consensus about whether QE is effective.

What If QE Doesn’t Work?

Previous QE programs implemented by Japan, Switzerland, and the U.K. have not managed to reach the stimulus goals they set out to achieve. However, the QE program enacted in the U.S. during the 2009 recession helped to revive the housing market, stimulate the economy, and restore trust in banks. It didn’t cause rampant inflation as many feared it would.

It’s unclear how effective it was following stimulus measures implemented during the COVID-19 pandemic, too. As a relatively new strategy, there isn’t enough data to confirm whether QE is effective. In fact, there isn’t even agreement about how exactly it’s supposed to work.

Flattening the Yield Curve

Economists have a theory that quantitative easing will work by flattening the yield curve, which is a graph curve that displays the variation of interest rates according to their term of maturity. When the Fed purchases long-term Treasuries, their yield goes down and their prices go up.

This results in the yields of corporate bonds and long-term mortgages going down as well. Lower rates encourage home construction, corporate investment, and other activities that stimulate the economy. Although this sounds good in theory, the issue in the current economy is that the yield curve is already pretty flat.

Losing Effectiveness

A QE program might stimulate the economy for a short amount of time, but it could also lose its effectiveness. If this happens, the government can also turn to fiscal policy, or government spending, to further put money into the economy.

Sometimes QE and government spending can blur together, if the Fed purchases government bonds that are issued to fund government spending.

Some economists also believe that by signaling to the world that the Fed is serious about stimulating the economy, this will help create economic growth and spending and make consumers confident about making purchases. Whether this is true is yet to be seen in the current global situation.

The Takeaway

Quantitative easing is an unconventional monetary policy tool that central banks can use when faced with weak or nonexistent growth. Central banks typically resort to measures like QE when more conventional monetary policy tools, such as lowering interest rates, are no longer effective or not enough to stimulate an economy.

QE is a relatively new phenomenon, but it became more common after the 2008 financial crisis, when multiple central banks around the world resorted to asset purchases to boost economic growth.

Ready to invest in your goals? It’s easy to get started when you open an investment account with SoFi Invest. You can invest in stocks, exchange-traded funds (ETFs), and more. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).

For a limited time, opening and funding an Active Invest account gives you the opportunity to get up to $1,000 in the stock of your choice.


SoFi Invest®
The information provided is not meant to provide investment or financial advice. Also, past performance is no guarantee of future results.
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 . 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.
1) Automated Investing—The Automated Investing platform is owned by SoFi Wealth LLC, an SEC registered investment advisor (“Sofi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (“Sofi Securities).
2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.
3) Cryptocurrency is offered by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.
For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, please visit www.sofi.com/legal. Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform. Information related to lending products contained herein should not be construed as an offer or prequalification for any loan product offered by SoFi Bank, N.A.

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.

Claw Promotion: Customer must fund their Active Invest account with at least $10 within 30 days of opening the account. Probability of customer receiving $1,000 is 0.028%. See full terms and conditions.

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Private Student Loan Forgiveness: What Is It & How Does It Work?

Editor's Note: For the latest developments regarding federal student loan debt repayment, check out our student debt guide.

Although the Biden-Harris Administration’s plan for widespread student loan forgiveness was ultimately shot down by the Supreme Court, all is not lost for the millions of borrowers hoping to have their loans canceled.

For instance, the administration established a new income-driven repayment plan known as the Saving on a Valuable Education (SAVE) plan. This program replaces another IDR plan — Revised Pay As You Earn (REPAYE) — in an attempt to improve some of its shortcomings and provide greater relief to struggling borrowers. SAVE extends the repayment timeline to 20-25 years and forgives any remaining balance after that period.

That said, student loan forgiveness options may be more limited for borrowers with private loans, who owe an average of $54,921 each.

Student Loan Breaks for Many but Not All

The Biden administration and the U.S. Department of Education have forgiven a large amount student loan debt so far via targeted relief efforts. It canceled $9.5 billion in student loans in 2021, mainly for federal student loan borrowers who are public servants or graduates of now-defunct schools. The administration also canceled federal student loans for borrowers who were defrauded by their institutions and who have total and permanent disabilities.

In August 2022, President Joe Biden announced a larger initiative to forgive up to $20,000 in federal student loans for those who met certain income requirements. However, the Supreme Court deemed that the President didn’t have constitutional power to implement such a plan. Either way, private student loan borrowers were not included in any of the relief.

Recommended: A Guide to Private Student Loans

Can Private Student Loans Be Forgiven?

Do lenders forgive private student loans? Unfortunately, that almost never happens.

However, many do offer student loan deferment or forbearance options for borrowers facing financial hardship. Interest typically accrues during these periods, regardless of whether the borrower is making payments.

Read your loan contract or disclosure statement for your loan, which contains information about terms, rates, fees, and penalties. Here, you’ll find information related to any hardship programs offered by the lender. You can also reach out directly and ask about your options.

Whatever you do, don’t miss a payment. Contact your lender immediately if you’re facing a hardship that will prevent you from making payments on time and in full. After a default on a private student loan, which can happen quickly, private lenders may hire a collection agency or file a lawsuit.


💡 Quick Tip: Enjoy no hidden fees and special member benefits when you refinance student loans with SoFi.

Take control of your student loans.
Ditch student loan debt for good.


Private Student Loan Debt Relief Options

Don’t assume that if you’re having trouble making your private student loan payments you don’t have any recourse. Here are a few moves you can consider.

1. Refinance Your Private Student Loans

Refinancing your student loans can offer several benefits. If you have a good credit history and solid income, or a cosigner, you may be able to qualify for a lower interest rate, reducing your monthly payments and the total interest you pay over the life of the loan.

Or you may be able to lengthen the term of your loan and decrease your monthly payments (but elongating the repayment term will usually increase the total interest paid). Give this student loan refinancing calculator a try.
When you refinance, the lender will pay off your old loans and issue you a new loan with a new rate and terms and with one payment.

A few lenders will refinance both federal and private loans. You’ll also be given a choice of a fixed or variable rate.

Even if interest rates rise, variable rates often save money over the long term.

Do your homework:

•  Be sure you’re getting the lowest rate possible with terms that fit your short- and long-term needs.

•  Although student loan refinancing almost never comes with any closing costs, it’s a good idea to find out if there are any fees involved. Keep in mind that you can refinance more than once.

•  If you plan to refinance any federal student loans, know that doing so will permanently forfeit all federal benefits and protections, including income-driven repayment plans, federal deferment and forbearance options, and forgiveness programs such as Public Service Loan Forgiveness (PSLF).

•  Consider lenders that initially do a soft credit pull before you actually apply with them to refinance your student loan. That way, shopping for interest rates will not affect your credit.

Recommended: Soft vs Hard Credit Inquiry: What You Need to Know

2. Talk to Your Lender

Talk to your lender about your options to repay your student debt. You aren’t the first (and you won’t be the last) to ask for help, and many private lenders offer some type of loan modification for borrowers who are financially struggling.

You may be able to negotiate a lower interest rate or a lower payment over a longer term, or set up a period during which you can make interest-only payments.

Be ready to answer questions about why you’ve fallen behind, what other debts you’re paying, and about your income prospects.

Always communicate with your lender to avoid student loan forgiveness scams. Some private companies that falsely offer debt relief may try to ask you to pay monthly costs or upfront fees, ask you for your identification, or promise immediate loan forgiveness. If you think you’re the victim of suspicious activity, contact the Federal Trade Commission.

3. Consider a Payment Pause

Some private lenders offer deferment or forbearance, which will allow you to postpone payments.

•  Deferment is sometimes available to borrowers who are planning to go back to school or who are entering military service.

•  Forbearance is typically available for those who have had an unexpected hardship that makes repayment difficult, such as an illness or a job loss.

Interest will still accrue during these private loan payment breaks.

As with federal loans, your employer may assist you with your private loans, especially if your skills are in demand. Also, many industries and professional associations offer student loan repayment assistance for firefighters, teachers, lawyers, and health care workers.

The Takeaway

Private student loan forgiveness is rare and has not been included in any sweeping moves to cancel student loan debt or provide relief. Borrowers of private student loans may be able to refinance and get a better rate or work with their lender if they’re struggling.

SoFi refinances both federal and private student loans. There is no cost or prepayment penalty. Deferment and forbearance plans are available.

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


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


Student Loan Refinancing
If you are a federal student loan borrower you should take time now to prepare for your payments to restart, including the opportunity to refinance your student loan debt at a lower APR or to extend your term to achieve a lower monthly payment. (You may pay more interest over the life of the loan if you refinance with an extended term.) Please note that once you refinance federal student loans, you will no longer be eligible for current or future flexible payment options available to federal loan borrowers, including but not limited to income-based repayment plans, such as the SAVE Plan, or extended repayment plans.



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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SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.


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

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Making Important Money Decisions in Marriage

Financial decisions are difficult enough on your own. But they can get even harder when you bring a significant other into the mix. After all, you both are coming from different life experiences and may have very different (often deep-seated) views on money, including how it should be spent and whether it should be saved.

Not surprisingly, money is a common cause of stress in relationships and, if left unaddressed, it can start impacting more things than just your bank account. Research consistently shows that financial problems and disagreements over money is a leading cause of divorce.

Considering how personal, and therefore complicated, each partner’s relationship with money can be, navigating money conversations can be tricky.

A great first step is to understand that financial decision-making as a couple may not come naturally, and that’s completely fine. These conversations take practice. What follows are a few strategies to try and ideas to keep in mind when making financial decisions with your partner.

8 Tips for Making Financial Decisions as a Couple

Just having a conversation about money with your significant other can be fraught. Coming to an agreement on how to manage your money is often even harder. Fortunately, these eight strategies can help.

💡 Quick Tip: Want to save more, spend smarter? Let your bank manage the basics. It’s surprisingly easy, and secure, when you open an online bank account.

1. Start Early

You don’t need to come into a first date armed with 20 questions about a person’s financial life. On the other hand, it may not be smart to wait until you’re married to talk about money either.

At the beginning stages, you might start with easy money topics, like who pays for dinner and whether or not you enjoy your jobs. With comfort and practice, you can begin to discuss weightier topics like debt and future financial goals.

The very fact that marriages are dissolving because of arguments over money makes the case for why it is so important to have these conversations early (and often). Not only are you able to practice without the stress of needing to take immediate action, but you can get a feel for how your partner navigates money decisions.

And if you find that you are with someone who holds wildly different values about money, it can be a good idea to address these issues before making any further commitments to this person.

Ready for a Better Banking Experience?

Open a SoFi Checking and Savings Account and start earning up to 4.50% APY on your cash!


2. Make a Date to Talk

Your instincts might tell you to dive headfirst into a big money talk in order to get it the heck out of the way. But this may not be your best strategy. Instead of bringing up the topic of money out of the blue, you might give your partner some notice.

No one is their best self when they feel caught off guard. A conversation about a tough financial decision will likely be more productive when there are two calm, prepared people at the table.

You might simply set a time to talk about the financial decision at hand. Or, you might want to make it into a “real” date and treat yourself to a coffee at the local shop or pick up your favorite take-out dinner.

No matter how you do it, the most important thing is that you have a designated time for the talk. This strategy can be applied to discussing one particular financial decision, or you can utilize it on a regular basis.

Recommended: How to Budget As a Couple and Why It’s Important

3. Write It Out

Sometimes, it’s simply hard to communicate how you feel. This is especially true for topics that affect us deeply and in confusing ways, like money. If you and your partner are people that like to put their feelings down in writing, consider writing each other a letter prior to your financial “date.”

In your letter, you might include some background on how you were raised to think about money, your money stressors, and your financial goals. Focus the letter on yourself and from where your financial beliefs stem.

Not only will this help your partner understand where you are coming from, but it can also provide you with some very useful introspection about money and your system of values.

Recommended: How Marriage Can Affect Your Student Loan Payments

4. Be Prepared to Listen

When making financial decisions, your main objective should not be to explain your point of view. To have a truly productive conversation, you must be committed to listening, too. This is good practice in all conversations with your partner and loved ones, but especially when talking about financial decisions.

Here’s the thing about making financial decisions: It’s rarely black and white and, generally, there is no right and no wrong. Being open to listening often translates into being open to learning.

Not only is your partner’s perspective important, but you might even be able to learn something from them. We’re all learning as we go anyway, and by listening, you have a chance to learn and evolve as a couple.

Recommended: Financial Planning Tips for Newlyweds

5. Be Communicative

One key to having a productive and healthy conversation regarding a financial decision with your partner is to communicate your feelings, thoughts, and fears. Something that seems obvious to you may not be obvious to them, so give your partner the benefit of explaining yourself in a calm and thorough way.

When you communicate, try to stick with talking about how you feel regarding a matter and avoid making declarations about what your partner has done in the past or what you’re hoping that they will do in the future.

Making comments about how a person is spending can quickly turn accusatory, putting them on the defensive. Even when having tough conversations, do your best to remove judgment from the equation.

Also, it’s best not to assume that just because you have explained something to your partner once, that they understand what you mean and where you are coming from. Don’t lose your cool if you have to remind your partner what’s important or a priority to you, especially if your priorities don’t align on this particular issue.

Recommended: Common Money Fights

6. Crunch the Numbers

Sometimes, the numbers help guide financial decision-making within a relationship. It can be worth taking the time to figure out exactly how each financial decision would play out over the short and long term.

By breaking big costs down into monthly numbers, you and your partner can see on paper what is possible (and what isn’t). The exercise may provide a new perspective altogether or, at the very least, get you on the same page regarding the different options with your money.

If you feel at a loss for what you should be focusing on or how to accomplish your goals, you may want to hire a financial expert, such as a credentialed financial planner. Some financial guidance from a person skilled in financial planning could be just what a couple needs to step up their money game.

7. Compromise

If you’re in a partnership, you already know that compromise is the name of the game. The good news is that with money, compromising is not only possible but often ideal. For example, you do not have to pick just one savings goal to work on at a time. Financial decisions don’t have to be “one or the other.”

Also, know that there is no perfect formula for how a couple makes financial decisions. Just because your best friend and her spouse divide their finances in a certain way or prioritize certain money goals over others doesn’t mean that you have to do it this way. Part of compromise with your partner is abandoning the idea that your partnership should work like anyone else’s.

8. Put Plans Into Action

Once you’ve hashed out your money goals and fears with your honey, and made some key financial decisions together, it’s a good idea to come up with an actionable plan to make your shared goals a reality.

If you’ve decided that you want to purchase a home in two years, for example, figure out how much of a downpayment you’ll need and, then, how much money you need to siphon into savings each month to reach your goal. You might then set up an automatic transfer from your checking account(s) and into your joint savings account each month.

A fringe benefit of making financial decisions as a couple is that you have a built-in accountability buddy to make sure you follow through on your plan and don’t spend that savings on something else.

💡 Quick Tip: If you’re saving for a short-term goal — whether it’s a vacation, a wedding, or the down payment on a house — consider opening a high-yield savings account. The higher APY that you’ll earn will help your money grow faster, but the funds stay liquid, so they are easy to access when you reach your goal.

Smart Money Decisions Couples Make

Here’s a look at some smart money moves you may want to make as a couple:

•   Opening joint accounts While some couples prefer to keep all of their money separate, having a joint bank account (or two) can simplify your finances and make it easier to work towards your shared goals.

•   Labeling your savings Having separate savings accounts for separate goals (even giving them labels, like a “downpayment” or “vacation” account) can help you stay on track and reach your goals sooner. Some savings accounts have a sub-savings account feature, which allows you to split funds in one primary savings account into separate categories.

•   Automate your savings It can be smart to set up recurring automated transfers from your checking account(s) to your savings and investment accounts based on your goals.

•   Increase your emergency reserve Your emergency fund should be large enough to cover living expenses — for both of you and any dependents — for anywhere from a few months to a year, depending on your situation.

Recommended: Survey Says: Couples That Pool Finances Are Happier

The Takeaway

Talking about money with your partner isn’t always easy, but having honest discussions about your financial situation and goals is critical. This can help you find common ground, make important financial decisions as a couple, and come up with a plan that can make your shared goals and dreams a reality.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.


Better banking is here with up to 4.50% APY on SoFi Checking and Savings.

FAQ

Should married couples make financial decisions together?

Even if you don’t merge all of your money, it can be a good idea to work together on some key financial decisions that will impact both of your futures. Making financial decisions together can have multiple benefits, including increased closeness and trust, less conflict over money, and better financial outcomes.

How should money be split in a relationship?

There are several methods couples can use when managing money and covering their living expenses. One option is to merge all or some of your funds in a joint bank account and use it to pay for shared expenses. Another is to keep separate accounts, but each make equal payments towards shared expenses.

A third approach you might consider is to split bills proportionally based on each partner’s income. So if one partner makes 70% of the total household income, they would then cover 70% of shared expenses, while the other partner would pay for 30%.

What are financial red flags in a relationship?

Financial red flags are money issues that are either currently causing problems in a relationship or have the potential to do so in the future. While they are not necessarily deal-breakers, they are harbingers of future relationship and financial strain. If you notice any of the following six signs, it’s important to deal with them promptly, ideally before your life is too intertwined with your partner’s.

•   Unwillingness to discuss money

•   Excessive credit card or other debt

•   Flaunting their wealth

•   Severe frugality

•   Using money to manipulate or shame

•   Keeping secrets or telling lies about money



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SoFi members with direct deposit activity can earn 4.50% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a deposit to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.

SoFi members with Qualifying Deposits can earn 4.50% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.50% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 8/9/2023. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.
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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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