How Does a Block Trade Deal Work?

What Is a Block Trade?

A block trade is a single purchase or sale of a large volume of financial assets. Just how many shares are in a block trade deal? A block, as defined by the New York Stock Exchange’s Rule 127.10, is a minimum of 10,000 shares of stock. For bonds and penny stocks, a block trade usually involves at least $200,000 worth of a given fixed-income security.

Typically though, the number of shares in a block trade is far higher. Individuals typically don’t execute block trades. Rather, they most often come from institutional investors, such as mutual funds, hedge funds or other large-scale investors.

Why Block Trades Exist

These trades are often so large that they can move the market in a given security. If a pension fund manager, for example, plans to sell a million shares of a particular stock without sparking a broader market selloff, selling all those shares on a public market will take time.

During that time, the price of the shares the manager is selling will go down, simply as a result of the sale that they are making. Sometimes, the manager will sell even more slowly. But that creates the risk that other traders will identify the institution or the fund who’s selling. Then those investors might short the stock to take advantage of the manager’s selling.

Those same risks exist for a fund manager who is buying large blocks of a given security on a public market. The purchase itself can drive up the price. And if the trade attracts attention, other traders may front-run the manager’s purchases.

How Block Trades Are Executed

That’s why many large institutions conduct their block trades through block trade facilities, dark pools, or blockhouses. They all have expertise in both initiating and executing very large trades, without making a
major – and costly – impact on the price of a given stock or bond.

Every one of these non-public exchange services operates according to its own rules, but what they have in common is that they have a set of relationships with hedge funds and other large traders who can buy and sell large blocks of securities. By connecting these large buyers and sellers, blockhouses and dark pools offer the ability to make sometimes enormous trades without roiling the markets.

Investment banks and large brokerages often have a division known as a block house, which runs dark pools, which get their name because the public can’t see the trades until at least a day after they’ve been executed. Dark pools have been growing in popularity. In 2020, there were more than 50 dark pools registered with the Securities and Exchange Commission (SEC) in the United States. In June 2021, dark pools executed about 13% of all US equity trades, according to an analysis by Rosenblatt Securities.

Smaller Trades Are Used to Hide Block Trades

To help institutional traders conceal their block trades, blockhouses use a series of maneuvers to conceal the size of the trade being executed. At their most basic, these strategies involve breaking up the block into smaller trades. But they can be quite sophisticated, such as “iceberg orders,” in which the blockhouse will break block orders into a large number of limit orders.

By using an automated program to make the smaller limit orders, they can hide the actual number of orders at any given time. That’s where the “iceberg” in the name comes from, given that the limit orders that other traders can see are just the “tip of the iceberg.”

Taken together, these networks of traders who make block trades are often referred to as the “Upstairs Market,” because their trades occur off the trading floor.

Are Block Trades Good or Bad?

Neither. While they can move markets, block trades are not market manipulation. They’re simply a method used by large investors to adjust their asset allocation with the least market disruption and stock volatility possible.

Recommended: How Much Market Fluctuation is Normal?

However, institutional investors wouldn’t go to such lengths to conceal their block trades unless the information offered by a block trade was valuable. A block trade can offer clues about the short-term future movement and liquidity of a given security. Or it can indicate that market sentiment is shifting.

However, sometimes it’s hard to know what a block trade indicates. A large trade that looks like the tuning of the tide for a popular stock may just be a giant mutual fund making a minor adjustment.

So how can retail investors find information about block trades, and profit from it? There are a host of digital tools, some offered by mainstream online brokerages, that function like block trade indicators.

Many of these tools use Nasdaq Quotation Dissemination Service (NQDS), Level 2 – usually just called
Level 2 – data. This subscription service offers investors access to the NASDAQ order book in real time. Its data feed includes price quotes from the market makers who are registered to trade every NASDAQ and OTC Bulletin Board security, and is popular among investors who trade using market depth and market momentum.

Recommended: Using Technical Analysis to Research Stocks

Some blockhouses design their strategies, such as “iceberg orders,” to make them hard to detect on Level 2. But when combined with software filters, investors have a better chance of glimpsing these major trades before they show up later on the consolidated tape, which records all trades through blockhouses and dark pools – though often well after those trades have been fully executed.

These software tools vary widely in both sophistication and cost, but may be worth considering, especially for momentum investors, who buy securities that have been trending upwards, and sell ones that have begun to decline.

At the very least, using software to scan for block trades is a way to keep track of what large institutional investors and fund managers are buying and selling. Active traders may use the information to spot new trends.

Recommended: Day Trading Strategies: How to Day Trade

The Takeaway

It can be difficult for individual investors to detect block trades–giant position shifts by institutional investors–on their own. But these trades have some benefits for individual investors. The mutual funds and exchange-traded funds (ETFs) that most investors have in their brokerage accounts, IRAs, 401(k)s and 529 plans take advantage of the lower trading costs and volatility-dampening benefits of block trades every day, and pass along those advantages to their shareholders.

An easy way to start building a portfolio of exchange-trade funds and other investments like stocks and cryptocurrency is via the SoFi Invest® brokerage app. You can pick your own investments or use SoFi Invest’s automated investing solution that invests your money for you based on your goals and risk, without charging a management fee.

Photo credit: iStock/marchmeena29


SoFi Invest®
The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . 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 pre-qualification for any loan product offered by SoFi Lending Corp and/or its affiliates.
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Closed School Loan Discharge Eligibility

Closed School Loan Discharge Eligibility

The Department of Education allows federal student loan borrowers to seek a student loan discharge in certain circumstances. One such scenario involves a discharge related to permanent school cancellation.

If your college or university closes while you’re enrolled you may be wondering if you still have to repay loans you took out to fund your education. Closed school loan discharge can relieve you of the financial responsibility of repaying federal student loans.

There are certain eligibility requirements you need to meet to qualify for a closed school discharge. Understanding the guidelines, along with other options for student loan discharge, can help with managing your student debt.

What Is School Cancellation Loan Discharge?

The Department of Education can discharge up to 100% of federal student loans through the closed school discharge program.

The types of loans eligible for school closure discharge include:

• Federal Direct Loan Program loans (including Subsidized and Unsubsidized loans, consolidation loans, Parent PLUS loans and graduate PLUS loans)

Federal Family Education Loan Program (FFEL) loans

Federal Perkins loans

School cancellation discharge of eligible loans is not the same as loan forgiveness. Federal loan forgiveness programs, including the Public Service Loan Forgiveness program (PSLF) and Teacher Loan Forgiveness, have service and repayment requirements. With PSLF, you’re required to work in a public service job and make 120 qualifying payments toward your loans. Teacher Loan Forgiveness requires you to teach in a qualifying school for five consecutive years to be eligible for loan forgiveness.

A closed school loan discharge, on the other hand, imposes no requirements with regard to any minimum number of payments you need to make toward your loans or work service commitments. If you qualify, your obligation to make payments to your loans disappears.

Recommended: Types of Federal Student Loans

Who’s Eligible for Closed School Loan Discharge?

Borrowers may qualify for a school cancellation discharged if their school closed and they meet any of these conditions:

• They were enrolled at the time of the closure

• They were on an approved leave of absence when the closure occurred

• The closure occurred within 120 days of their withdrawal from the school and their loans were first disbursed before July 1, 2020

• The closure occurred within 180 days of their withdrawal from the school and the loans were first disbursed after July 1, 2020

Borrowers may not qualify for any discharge of student loans related to a school closure if:

• The student’s withdrawal happened outside the 120-day or 180-day windows allowed, based on the date of their first loan disbursement

• They are continuing education at another school

• They completed all coursework toward their degree before the school closed, even if they haven’t formally received a certificate or diploma

If any one of those things happens to be true then it’s possible a borrower won’t qualify for a closed school loan discharge.

How Does A Closed School Discharge Work?

If the school closes while a student is enrolled, they can apply for a federal student loan discharge. In general, students who meet the eligibility criteria will automatically receive an application from the Department of Education. The application is also available on their website.

Automatic Closed School Loan Discharge

School closure discharge is automatic if the school closed between November 1, 2013 and July 1, 2020 and the borrower hasn’t enrolled in another school within three years of the date of the closure. The Department of Education handles the closure for the borrower, there’s no need to complete the application. However, borrowers who would prefer to fill out the application, are able to do so.

Once your loans are discharged, the borrower is no longer responsible for paying anything toward them. But while an application for closed school discharge is under review it is important to continue making payments toward the loans as usual if they’re already in repayment. This can help avoid late payments.

Any discharged loans are removed from a borrower’s credit reports once the discharge is complete. That includes your entire payment history as well as negative items such as late payments.

Other Options for Discharging Student Loans

If you aren’t eligible to have your loans discharged because of school cancellation, there are some other scenarios that may allow it.

Disability Discharge

For example, you could apply for a discharge of your loans if you become totally and permanently disabled. The disability discharge option is available to eligible borrowers who owe:

• Federal Direct loans

• FFEL program loans

• Federal Perkins loans

It’s also open to TEACH Grant program recipients. In order to be eligible for a student loan disability discharge, you must be able to provide proof of your disability through a physician, the Social Security Administration, or the Department of Veterans Affairs. You’ll need to complete a separate application for this type of discharge and once approved, you’re subject to a three-year monitoring period to certify that you lack sufficient income to pay your loans.

Discharge in Death

Student loans can also be discharged due to the death of the borrower. That includes loans taken out by a student as well as Parent PLUS loans. In the case of Parent PLUS loans, discharge is an option if the parent who took out the loans passes away. To qualify for a death discharge of student loans, proof of death (i.e. a death certificate) must be submitted to the Department of Education.

In Rare Cases: Declaring Bankruptcy

Though it is rare, bankruptcy may be another option for discharging federal student loans, though it can be difficult to achieve. In order to have student loans discharged through bankruptcy, the borrower must be able to prove through an adversary proceeding that having to repay their loans would cause a sustained undue financial hardship for both themselves and their family.

Filing a bankruptcy case could result in all of the loans being discharged, some of them being discharged or none of them being discharged. Declaring bankruptcy adversely affects a person’s credit score and is generally a last resort. Always consult with a qualified and trusted financial advisor, accountant, or attorney before considering bankruptcy.

Other Options for Managing Student Loans

Federal student loan borrowers who are ineligible for other forms of discharge or student loan forgiveness may want to consider alternative options such as income-driven repayment options or student loan refinancing instead.

Income-driven repayment plans are offered to borrowers with federal student loans and consider a borrower’s discretionary income when determining their loan terms and payments. This can help make monthly payments more manageable but may make borrowing the loan more expensive over the life of the loan by extending the loan term.

Student loan refinancing may allow qualifying borrowers to secure a more competitive interest rate or loan terms. Though, keep in mind, refinancing any federal student loans will eliminate them from federal plans and protections, including income-driven repayment plans and closed school loan discharge.

Does School Closure Discharge Apply to Private Student Loans?

Federal closed school discharge applies to federal student loans only. Borrowers with private student loans wouldn’t be able to apply for a discharge through the Department of Education should their school close.

It may be possible to contact your private student loan servicer to see if any type of discharge option is available. Your lender may be able to offer a solution for handling private student loans if your school closed while you were enrolled and you have no plans to re-enroll elsewhere.

The Takeaway

Closed school loan discharge can help erase federal student loan debt, in the event a qualifying borrower’s school has closed. But if your school remains open or you have private student loans, you may need to consider other possibilities for keeping up with your payments.

Refinancing student loans could help borrowers secure a lower interest rate. Know that refinancing a federal student loan into a private loan eliminates it from federal student loan borrower protections, like income-driven repayment plans, deferment, and loan forgiveness options. So it may not be the best option for everyone.

If you’re considering student loan refinancing, take the time to look around for the best loan rates and repayment terms for you. SoFi, for example, offers competitive student loan refinancing rates with no hidden fees. Weighing student loan refinancing alongside other options can help make your loans more manageable.

Learn more about student loan refinancing with SoFi.

Photo credit: iStock/jacoblund


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 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 THE END OF JANUARY 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.

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.
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’s the Average Student Loan Interest Rate?

With college tuition on the rise, students may take out student loans as they pursue their education. Student loans come with interest and sometimes other loan fees. As you repay student loans, that interest can add up.

While there are options like scholarships, grants, and work-study, sometimes student loans can be necessary to help students fill the gaps as they finance their education. Before borrowing student loans, it’s important to understand how they work, what the average student loan interest rates are like, and how interest rates impact your loan.

What Is The Average Student Loan Interest Rate?

So, what is the average student loans interest rate?

The interest rate on a student loan varies based on the type of student loan. Federal student loans have a fixed interest rate, meaning it is set for the life of the loan. This interest rate is set annually by Congress. The current interest rates for federal student loans disbursed between July 1, 2021 and July 1, 2022 have been set at:

•  3.73% for Direct Subsidized Loans and Direct Unsubsidized Loans for undergraduate students

•  5.28% for Unsubsidized Loans for graduate or professional students

•  6.28% Direct PLUS loans for parents, graduate or professional students

Private student loan interest rates vary by lender and each have their own criteria for which rates you qualify for. Private lenders also may offer different interest rates if you have a cosigner on your student loan. Private student loans also may offer variable interest rates, meaning they can start lower than a fixed interest rate but then go up over time, based on market changes.

The interest rates on private student loans can vary anywhere from 1% to 13%, depending on the lender, the type of loan, and on individual financial factors including the borrower’s credit history.

Recommended: Types of Federal Student Loans

How Are Interest Rates Determined?

As mentioned previously, the interest rates on federal student loans are set annually by Congress. The rates are tied to the financial markets—Congress sets them based on the 10-year Treasury note. Since 2006, all federal student loans have fixed interest rates. Although federal student loans are serviced by private lenders selected by the federal government, the private lender has no say in the interest rate offered.

For private student loans, the lenders set their own rates, though they often take cues from federal rates. Each lender has their own algorithm and credit standards. The rates quoted for student loans vary based on each applicant’s individual situation—though generally the better a potential borrower’s financial history is, the better rate they may be able to qualify for. When considering a private student loan, shop around with a few different lenders to find the best rate and terms for your personal needs.

To learn more about private and federal student loans check out our student loan help center.

How Is Student Loan Interest Calculated?

The interest on federal student loans accrues daily. To calculate the interest as it accrue, the following formula can be used.

Interest amount = (outstanding principal student loan balance × interest rate factor) × days since last payment

In other words, you will multiply your outstanding loan balance by the interest rate factor. Then, multiply that result by the days since you last made a payment.

To calculate that interest rate factor you can divide the interest rate by the number of days of the year (365).
For example, let’s say you have an outstanding student loan balance of $10,000 and it’s been 30 days since your last payment. Here’s how to calculate your interest:

$10,000 x (3.73%/356)=1.02
1.02 x 30 days=$20.66

Interest amount $20.66

Many private student loans will also accrue interest on a daily basis, however, the terms will ultimately be determined by the lender. Review the lending agreement to confirm.

What to Look For In a Student Loan Interest Rate

When you take out a federal student loan, you’ll receive a fixed interest rate. This means that you’ll pay a set amount for the term of the student loan. In addition, all of the terms, conditions, and benefits are determined by the government. And, federal student loans provide some additional perks that you may not find with private lenders like income-driven repayment plans.

On the other hand, private loans tend to have higher interest rates since the lender sets them. Private lenders review your credit score, income, and other factors to determine the rate you receive. This way, they can ensure you’re financially stable and can repay your loan before loaning you the funds.

Because of the higher interest rates and potentially fewer perks, you should first take advantage of all federal student loans you qualify for before comparing private loan options.

Average Interest Rates for Student Loans FAQs

Here are some common questions about the average interest rates of student loans.

What Is a Good Fixed Interest Rate for Student Loans?

When it comes to cost, the lower the interest rate, the better. The lower the interest rate, the less a borrower will owe over the life of the loan, which could help individuals as they work on other financial goals. If you’re taking out federal loans, the student loan interest rate is set by federal law, so you don’t have a choice for what is and isn’t a reasonable interest rate.

When it comes to private student loans, it’s wise to shop around and compare your options to find the most suitable financing solution. Since every lender offers different terms, rates, and fees, getting quotes from multiple lenders may help you select the best option for your personal needs. But, keep in mind, private student loans do not have the same borrower protections as federal student loans, including income-driven repayment plans or deferment options, and should be considered only after all federal aid options have been exhausted.

Is 30k In Student Loans Bad?

If you owe $30,000 in student debt, you’re right in line with the outstanding balance of most borrowers. Roughly 42.9 million Americans have federal student loan debt, and each owes about $36,406.

Is a 4.75% Interest Rate Good?

With interest rates on private student loans ranging anywhere between 1% and 13%, a 4.75% interest rate is not too bad. But, when it comes to federal average student loan interest rates, you can expect to pay 3.73% for undergraduate direct subsidized loans and direct unsubsidized loans.

If you find a lower rate for student loan refinancing –
SoFi will match it AND give you $100.*


How Can I Reduce the Interest Rates on my Student Loans?

The interest rate on federal student loans, while fixed annually for the life of the loan, does fluctuate over time. For example, for the 2021-2022 school year, Direct subsidized and unsubsidized loans for undergraduates increased to 3.73% from 2.75% for the 2020-2021 school year.

To adjust the rate on an existing student loan, borrowers generally have two options. They can refinance or consolidate the loans with hopes of qualifying a lower interest rate.

Refinancing a federal loan with a private lender eliminates them from federal borrower protections such as income-driven repayment plans or Public Service Loan Forgiveness. The federal government does offer a Direct Consolidation loan, that allows borrowers to consolidate their federal loans into a single loan. This will maintain the federal borrower protections but won’t necessarily lower the interest rate. When federal loans are consolidated into a Direct Consolidation Loan, the new interest rate is a weighted average of your original federal student loans’ rates.

Refinancing student loans with a private lender may allow qualifying borrowers to secure a lower interest rate or preferable loan terms. Note that extending the repayment term will generally result in an increased cost over the life of the loan.

To see how refinancing could work for your student loans, take a look at the student loan refinance calculator.

The Takeaway

The average student loan interest rate varies depending on the type of loan. The interest rate for federal Direct Unsubsidized and Subsidized loans for undergraduate borrowers during the 2021-2022 school year is 3.73%. The interest rate on private student loans is determined by a variety of factors including the borrower’s credit history and may range anywhere from 1% to up to 13%.

Refinancing with a private lender may allow borrowers to qualify for a lower interest rate, which could help them save money over the life of the loan. Remember that choosing to refinance with a private lender means the borrower will lose the protections of a federal loan (such as Income Based Repayment, Income Contingent Repayment, or PAYE), but if you don’t think you will use those programs, refinancing may be an option to consider.

There are absolutely no fees when refinancing with SoFi. See your interest rate in just a few minutes—with no pressure to sign up.


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*Guaranteed Rate Match Offer: Your pre-qualified rate, and the rate match program itself, are conditional upon our verification of your application information, including verification of sufficient income to support an ability to repay. Eligible documentation of a competitor’s rate offer, issued within 30 days of your SoFi pre-qualified rate, will be determined at SoFi’s sole discretion and must be for the same loan amount and term. SoFi will only match rate offers for private student loan refinance products. The match will be on the rate, exclusive of all discounts. The $100 Rate Match Bonus is not available to residents of Ohio. To receive the $100 Rate Match Bonus, you must: (1) register and/or apply for a student loan refinance (2) provide documentation of an eligible competitive rate offer; (3) call at (855) 456-SOFI (7634) or chat on SoFi.com and follow the instructions to send in your proof of lower rate; (4) have and provide a valid US bank account to receive bonus; (5) complete Form W-9; (6) and meet SoFi’s underwriting criteria and book a student loan refinance with SoFi. Once conditions are met and the loan has been disbursed, you will receive your Rate Match bonus via automated clearing house (ACH) into your checking account within 30 calendar days. Bonuses that are not redeemed within 180 calendar days of the date they were made available to the recipient may be subject to forfeit. Bonus amounts of $600 or greater in a single calendar year may be reported to the Internal Revenue Service (IRS) as miscellaneous income to the recipient on Form 1099-MISC in the year received as required by applicable law. Recipient is responsible for any applicable federal, state or local taxes associated with receiving the bonus offer; consult your tax advisor to determine applicable tax consequences. Additional terms and conditions may apply. SoFi may discontinue this program at any time.
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 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 THE END OF JANUARY 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.

Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. A hard credit pull, which may impact your credit score, is required if you apply for a SoFi product after being pre-qualified.
External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.


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How Soon Can You Refinance Student Loans?

For most borrowers of college student loans, the soonest they can refinance is after graduating.

If you’re a graduate student with a good job, you might be able to refinance the loans you took out for your undergraduate degree. For others, refinancing debt with a cosigner may make sense.

Depending on your financial situation, the goal of refinancing may be to snag a lower interest rate or have lower monthly payments. If you find that refinancing one or more student loans will result in significant interest savings, every month you delay refinancing could be costing you money.

What Do Your Current Loans Look Like?

If the only time you’ve even thought about your student debt is when you took out the loans, you’ve got a little bit of homework to do and a few decisions to make.

You may want to do some digging to refresh your memory on interest rates and terms.

Contact Info for Most Federal Student Loans

The government assigns your loan to a loan servicer after it is paid out. To find your loan servicer, visit your account dashboard on studentaid.gov, find the “My Aid” section, and choose “View loan servicer details,” or call the Federal Student Aid Information Center at 800-433-3243.

Loans Not Owned by the Department of Education

If you have Federal Family Education Loan Program loans that are not held by the government, contact your servicer for details. Look for the most recent communication from the entity sending you bills.

If you have a Federal Perkins Loan that is not owned by the Education Department, contact the school where you received the loan for details. Your school may be the servicer for your loan.

If you have Health Education Assistance Loan Program loans and need to find your loan servicer, look for the most recent communication from the entity sending you bills.

Private Student Loans

If you’ve lost track of private loans, you can check your credit reports .

Consolidating vs. Refinancing Student Loans

The two words are sometimes used interchangeably, but they aren’t quite the same thing.

The Department of Education offers student loan consolidation, which allows you to combine your federal student loans into a single Direct Consolidation Loan that will have one monthly payment.

The interest rate is the weighted average of your prior loan rates, rounded up to the nearest one-eighth of one percentage point. You can’t include any private loans, so you’ll still have a separate payment for those if you have them.

If your loans are eligible for a Direct Consolidation Loan, you can apply right after you graduate , when you leave school, or when you drop below part-time enrollment.

Student loan refinancing refers to paying off current loans with a new loan from a private lender, preferably with a lower rate. You might be able to refinance private and federal student loans, ending up with one loan and one monthly payment.

You’ll want to know all your student loan repayment options—and the pros and cons of consolidating or refinancing your loans, which could make your life easier and your payments more manageable.

A refinancing calculator can come in handy when estimating savings—both monthly and over the life of your loan.

Weighing Perks and Interest Rates

Before deciding whether refinancing is right for you, it’s important to know that if you refinance your federal student loans with a private lender, those loans will no longer be eligible for programs like income-driven repayment plans and federal forbearance.

Refinancing also will take the Public Service Loan Forgiveness Program out of the equation.

But if you can get a lower interest rate, refinancing may be a good fit. Most refinancing lenders offer loan terms of five to 20 years. Shortening or elongating your loan term can affect your monthly payment and the total cost over the life of your loan.

Private lenders can have some pretty stringent criteria. Typically, you’ll need a good credit score and a history of on-time payments, a stable job and/or income—or a cosigner—and a solid debt-to-income ratio.

The Takeaway

When can you refinance student loans? As soon as you establish a financial foundation or bring a solid cosigner aboard. Should you refinance your student loans? If you can get a lower interest rate or lower your monthly payment, it might be a move worth considering.

SoFi offers student loan refinancing with a fixed or variable rate, no origination fee, and unemployment protection. A refi opens the door to SoFi membership, which entitles you to services that might help with your career and personal goals.

Look into SoFi Student Loan Refinancing in a few clicks.


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IF YOU ARE LOOKING TO REFINANCE FEDERAL STUDENT LOANS PLEASE BE AWARE OF RECENT LEGISLATIVE CHANGES THAT HAVE SUSPENDED ALL FEDERAL STUDENT LOAN PAYMENTS AND WAIVED INTEREST CHARGES ON FEDERALLY HELD LOANS UNTIL THE END OF JANUARY 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.
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What Is The Difference Between Bachelor of Arts and Bachelor of Science?

What Is The Difference Between Bachelor of Arts and Bachelor of Science?

When students are getting ready to go to college, they not only have to decide what they’re going to major in, but what degree they’re going to receive as well. They may be confused about whether they’ll get a bachelor of arts or a bachelor of science, as well as what each one entails.

By learning the difference between a bachelor of arts and a bachelor of science, students can figure out what path they want to take in college and how it will affect their future career prospects.

What’s the Difference Between a B.A. and a B.S.?

A bachelor of arts and a bachelor of science are both four-year undergraduate degree programs. Students completing either of these degrees will typically need to take similar general education requirements such as courses in English, mathematics, natural science, writing, history, and social science.

A B.A. focuses on traditional liberal arts subjects like history, literature, art, philosophy, the social sciences, and other topics in humanities. It will provide a student with a more diverse course of study and usually require fewer credits than a B.S. degree.

On the other hand, a B.S. program emphasizes science, engineering, technology, and math and is more focused on one subject. When looking into a B.A. vs. B.S., a student needs to decide what kind of job they want after graduation or what type of graduate program they would like to pursue.

For instance, a student could either earn a B.A. or a B.S. in psychology. If they eventually want to go into one-on-one counseling with patients, then they may go after a B.A. degree.

If they want to earn a Ph.D. and pursue a career in research, then a B.S. may be a better choice. Keep in mind that some colleges offer students the opportunity to earn a B.A. or a B.S. in the same major, while other colleges don’t offer that choice.

Which Degree Is Better?

When looking at a B.A. vs. a B.S., students may be wondering which one is better and more attractive to employers. In reality, it may not make much of a difference which one a student earns, as long as they have a bachelor’s degree in general.

Some employers may want graduates with a broader view of liberal arts topics, while others might prefer candidates who honed in on a particular subject. However, a candidate would probably not lose a job opportunity just because they had the “wrong” type of bachelor’s degree.

When prospective employers and graduate school admissions officers are looking at candidates, they’re going to care much more about factors like a student’s grades, the courses they took, the major they enrolled in, and which school they went to.

They may also care about whether or not a student completed internships and work-study programs related to their major.

Recommended: Return on Education for Bachelor’s Degrees

Finding a Good B.A. or B.S. Program

Instead of getting hung up on the difference between a bachelor of arts and a bachelor of science, a student should dive into the content and quality of the curriculum they could be studying for the next four years. A student can see if the curriculum sounds interesting to them and if it would be applicable to their future career.

They could also evaluate all the schools they want to apply to or they have gotten into before making a decision.

It’s a good idea to research a school’s reputation through a site like College Board® or Niche to determine how hard it is to get into, who the alumni are, what kinds of opportunities their graduates have pursued, and the strength of their programs.

Of course, it’s critical to investigate the location, enrollment size, and cost as well. It’s helpful for a student to create a shortlist of potential colleges/bachelor’s programs and then rank what’s most important to them.

For example, if they want to go to a competitive grad school, perhaps they will emphasize selectivity for their undergraduate program.

If cost is a huge deal, then they would look into programs that are less expensive or that tend to offer scholarships to students.

They can also research their options for private and federal student loans to pay for school.

If a student can afford it, then it may be worth it to visit a school more than once—or at least take a second virtual tour—and ask 10 to 15 detailed questions so they can learn more about it.

They could inquire about job connections, asking about the career center, job fairs, and on-campus interview opportunities, so they know they will have support and be set up for success after they graduate.

Recommended: How to Pay for College

Why Get a Bachelor’s Degree?

B.A. and B.S. degrees can be very similar. What matters in most cases is getting a bachelor’s degree. It can open students up to a broader range of professional opportunities, allowing them to fulfill their career goals as well as earn more money.

They can choose to go directly into the workforce following graduation and have an advantage over candidates who only have a high school diploma (or less), or they could choose to go to graduate school to earn an advanced degree.

The employment rate is highest for 25- to 34-year-olds with a bachelor’s degree (or a higher degree), at 87%. The employment rate for people who had not completed high school was only 57%. Those with bachelor’s degrees also earn more.

As of April 2021, the median usual weekly earnings for people with a bachelor’s degree is $1,426, while people with a high school diploma earn $792 per week.

There are a number of personal benefits as well. Many students find college to be very fulfilling because they gain valuable skills like teamwork and time management.

They also learn how to take on challenges, which can improve their self-esteem. People with college degrees are more likely to volunteer, donate to charitable organizations, vote, and overall contribute more to their communities.

The statistics don’t lie: 94% of people who have a bachelor’s degree or a higher degree say they are happy or very happy with their lives overall, while 89% of high school graduates reported the same.

Also, one study showed that adults with less than a high school education are more than twice as likely as people with a bachelor’s to report that they are not happy.

Recommended: 6 Reasons to Go to College

The Takeaway

A B.A. and a B.S. are both four-year undergraduate degrees that often require similar general education requirements, like math, English, and history. Broadly, B.A. degrees are generally more focused on liberal arts subjects (think, history and literature) while B.S. degrees usually emphasize subjects like math and science.

Some schools may offer a B.A. and B.S. in the same subject, but with slightly different degree requirements, such as a B.A. or a B.S. in chemistry or computer science. In general, the B.S. program typically has more required courses than the B.A. program.

You may be excited about going to college now that you know the difference between a B.A. and a B.S., but you aren’t sure how you’re going to pay for your degree.

SoFi’s private student loans could help. When it comes to paying for college, private student loans should be viewed as a last resort, after exhausting other avenues like federal aid and scholarships. Federal student loans offer borrower protections and benefits like deferment or income-driven repayment plans, that private student loans don’t offer. Consider other sources of aid like federal student loans, work-study, and any grants or scholarships before borrowing private student loans.

With SoFi, there are no origination, late, or insufficient funds fees, and borrowers can qualify for a 0.25% discount when they sign up for autopay. SoFi offers flexible repayment options as well, so you can find the loan that fits your budget.

To find out more about our private student loans, visit SoFi today and apply in a matter of minutes.

Photo credit: iStock/mangpor_2004


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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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