Which Student Loans to Accept or Turn Down

Which Student Loans to Accept or Turn Down

If you need financial aid to help pay for college, you’ll fill out the Free Application for Federal Student Aid (FAFSA®), which allows you to apply for federal unsubsidized student loans, subsidized student loans, work-study, and grants.

When your FAFSA has been processed, you’ll receive an aid offer that explains the types and amount of aid that a college is offering to you. If you’ve applied to multiple schools, you’ll receive an aid offer from each. You’ll be asked to tell them which forms of financial aid you would like to accept before they apply it to the amount you owe your school.

But you don’t have to accept all the aid on offer, including student loans, so consider your options carefully.

What Are Subsidized and Unsubsidized Loans?

There are two basic types of federal student loans: Direct Subsidized Loans and Direct Unsubsidized Loans. They help eligible students cover the cost of four-years colleges, community colleges, and trade, career, and technical schooling. Here are the major differences between unsubsidized versus subsidized student loans.

Direct Subsidized Loans are student loans for undergraduates with financial need. Your school will determine how much you can borrow, and that amount cannot be more than your financial need.

The government pays all interest on Direct Subsidized loans while you’re in school at least half-time, during the six month grace period after you leave school, and during periods of deferment.

Direct Unsubsidized Loans are available to undergraduates and graduate students. They are not awarded based on financial need.

Again, your school will determine how much you are able to borrow, and you are responsible for paying all interest on the loan amount at all times. If you choose not to pay interest while you’re in school, during the grace period, or if your loan is in deferment or forbearance, the interest will still accrue. At the end of the deferment period, the interest will be added to the principal of the loan.

Interest rates for each type of loan are fixed. For example, for loans disbursed before July 1, 2022, the interest rates for Direct Subsidized Loans and Direct Unsubsidized Loans is 3.73% for undergraduate borrowers. The interest rates for Direct Unsubsidized Loans is 5.28% for graduate or professional borrowers.

There are also limits to the amount of money that you can borrow, and the loan amount that you receive may be less than this limit. For dependent students, except those whose parents can’t receive PLUS loans, the aggregate loan limit is $31,000, of which no more than $23,000 can be in subsidized loans.

For dependent undergraduates whose parents can’t obtain PLUS loans, the limit is $57,500, of which no more than $23,000 can be in subsidized loans. For independent graduate students or professionals, the limit is $138,500, of which no more than $65,500 can be in subsidized loans.

When Might You Be Offered More Loans Than You Need?

You don’t have to accept all of the federal loans that are offered to you. To figure out if you’ve been offered more loans than you actually need, you’ll need to do a bit of budgeting.

Federal loans can only be applied to tuition, fees, housing and meal plans. These won’t be the only expenses you’ll need to cover, however. Consider other costs like transportation, travel, eating outside the dining hall, etc. Add up the costs to which your federal loan would apply and any extra expenses to get a sense of the total cost of going to school.

Now figure out your total funding sources, excluding the sources in your offer letter. This might include money from your parents, scholarships, grants, and any money you may have saved on your own. If your total expenses exceed your sources of funding, you may need to accept the federal loans on offer. However, if they don’t, you might not need to accept all the funding.

Which Loans Should You Accept?

If you don’t anticipate needing the amount of money offered to you through loans, you do not need to accept them. Schools will allow you to decline a loan, accept it, or even accept a portion of it.

That said, if you do decide to take on federal loans, it’s generally wise to accept subsidized loans first because they offer more benefits in the form of government interest payments.

Unsubsidized loans, on the other hand, put you on the hook for all of the interest that accrues on the loan. These loans however are still eligible for other federal benefits and borrower protections.

Can Your Return Unused Student Loans?

If you accept a loan and realize that you don’t need it, the good news is you can cancel the loan, or a portion of it, within 120 days of disbursement. By canceling the loan, you’ll return the money you received, and you won’t owe any interest or be charged any fees.

Alternatives to Federal Student Loans

Federal student loans aren’t the only way to help pay for schooling. Here’s a look at three alternatives:

Private Loans

Students can apply for private student loans which are offered by private institutions, such as banks and credit unions. These lenders will determine the amount you can borrow, interest rates, and terms largely based on financial factors such as your income and your credit score, or that of a cosigner if you need to have one.

Private student loans are not subject to the same loan limits imposed on federal loans, so students can potentially borrow more to cover costs. Though, this also means that private loans aren’t afforded the same borrower protections (like income-driven repayment plans) as federal student loans. For this reason, they are generally considered only after a student has thoroughly reviewed all of their other options.

Personal Loans

Personal loans are also provided by private lenders who, again, set the loan amount, interest rates and terms, based on a person’s financial history. The terms of the loan do not dictate how the money must be used, so they may be a way to cover expenses outside of tuition, fees, room, and board.

Financial Aid

There are a variety of types of financial aid available from public and private sources that can help you pay for school.

Grants and scholarships are money given to you that you don’t need to repay. Scholarships are often given based on academic merit or talent, or they’re given to students wishing to pursue a particular area of study.

The Federal Work-Study Program allows students to work part-time to earn money to pay for schooling.

The Takeaway

When you’re offered a student aid package by the federal government, it may include federal subsidized and unsubsidized student loans. You can accept or decline these loans, or even accept a small portion of them. Consider declining if your sources of funding exceed your expenses. Doing so may be cheaper in the long run, as it allows you to avoid making interest payments.

Private student loans are another potential source of funds to help you pay for school. To learn more about the options available to you to meet your student loan needs, visit SoFi.

FAQ

Is it better to accept subsidized or unsubsidized loans?

When choosing between subsidized and unsubsidized loans, consider accepting subsidized loans first, since the federal government will pay your interest while you are in school at least half-time, during the six month grace period after you leave school, and during periods of loan deferment.

Can you accept student loans and not use them?

You can accept student loans and not use them, but you’ll still be responsible for paying them back with interest. If you find you don’t need the loans, you can cancel them within 120 days of loan disbursement.

How are subsidized and unsubsidized loans different?

Subsidized and unsubsidized loans differ mainly in who they are available to and who must make interest payments. Subsidized loans are available to undergraduate students, and the government makes interest payments while you are in school at least half-time, during the six month grace period after you leave school, and during periods of loan deferment. Unsubsidized loans are available to undergraduate, graduate, and professional students, who are responsible for all loan payments.


SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC), and by SoFi Lending Corp. NMLS #1121636 , a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law (License # 6054612) and by other states. For additional product-specific legal and licensing information, see SoFi.com/legal.

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs. SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.

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

Paying for College With No Money in Your Savings

With the high cost of a college education, affording college with no money set aside might feel impossible. However, there are many forms of financial aid — whether from federal, state, school, or private organizations — that can help you pay for your college degree.

Learning how to pay for college with no money might require approaching your higher education costs from different angles. This includes cutting your college expenses, finding alternate financial aid sources, or both.

Average Cost of College

How much you can expect to pay for college varies, depending on the school you choose, your degree level, whether you’re a state resident, and other factors.

According to the CollegeBoard’s 2021 Trends in College Pricing and Student Aid report, the average tuition and fees for a full-time, in-state undergraduate student attending a public four-year school in 2021-22 is $10,780. Out-of-state students can expect to pay an average of $27,560 in tuition and fees for the same academic year. And students attending a nonprofit four-year private institution are charged an average $38,070 in tuition and fees.

Institution Type

Average Annual Tuition and Fees

Public Four-Year College, In-State Student $10,740
Public Four-Year College, Out-of-State Student $27,560
Private Four-Year College, Nonprofit $38,070

Keep in mind that these figures are exclusively for tuition and fees. This cost doesn’t account for additional expenses that college students often face, like textbooks, school supplies, housing, and transportation.

Ways to Pay for College

The cost of being a college student can seem overwhelming when you don’t have savings or out-of-pocket funds available to directly pay for school.

If you want to go to college but have no money or are a parent who’s helping your child pay for college, here are a few ideas on how to go to college with no money saved.

Fill Out FAFSA® to See if You Qualify for Financial Aid

The best way to pay for college with no money — and really, the first step you should always take — is submitting a Free Application for Federal Student Aid, also known as the FAFSA.

The FAFSA is the first step in finding out if you qualify for a federal financial aid program. For example, you can see if you’re eligible for the Pell Grant, Federal Work-Study, and Direct Loans. The information on your FAFSA is also commonly used to determine your eligibility for state, school, and other privately sponsored aid.

Grants

In addition to federal grants, search for grants from your state and school for additional funding. Grant funds generally don’t need to be repaid as long as you meet the grant program’s requirements.

Some organizations — nonprofit and for-profit — also host their own need- or merit-based grant programs for college students.

Scholarships

Scholarships are considered gift aid, meaning they typically don’t need to be repaid. There are a plethora of scholarship opportunities that are awarded due to financial need or merit.

You can search for scholarships online from various companies, organizations, community groups, and more. Ask your school’s financial aid office for help finding these advantageous sources of aid.

Negotiate With the College for More Aid

If your financial circumstances have changed since you submitted your FAFSA, request a professional judgment to have your school reevaluate your financial aid package.
Not all schools accept this request, but if yours does, this process gives you a chance to provide additional documentation that’s used to recalculate your financial need.

Start With Community College and Transfer

If you want to go to college but have no money, one option is to attend a community college for the first two years of your college education. According to the same CollegeBoard report, the average 2020-21 cost for tuition and fees at a local two-year college is $3,800 for a full-time undergraduate student.

After completing your general education courses at a junior college, you can then transfer to a four-year school.

Choose a Less Expensive University

The type of school you choose can also help you afford college if you don’t have money saved. As mentioned earlier, the cost of college varies widely between a public versus private institution.

Additionally, choosing a public school in your home state generally costs less than attending an out-of-state school. When reviewing cost, be sure to factor in the scholarships and grants you may qualify for.

Live at Home

Room and board is one of the largest expenses facing students. Instead of having to account for costs toward a dorm room or off-campus housing, living at home and commuting to school can help you keep expenses lower.

Talk with your parents about whether living at home while you earn your degree is an option.

Study Abroad

Some students may explore pursuing their degree abroad, as one solution to cut expenses. Thanks to government subsidies in some countries, attending university abroad can be less expensive than staying in the U.S. In some cases, American students may even qualify for free tuition.

Work-Study

The Federal Work-Study program allows you to earn financial aid with part-time work through an employer partner.

Federal Student Loans

If you need to borrow money for college, a federal student loan is the first choice for students. The Department of Education offers subsidized and unsubsidized federal loans to students. These loans need to be repaid.

Undergraduate students might be eligible for subsidized federal loans in which the government pays for accrued interest while you’re enrolled in school, during your grace period and while in deferment. These are awarded based on financial need.

Private Student Loans

After exhausting all of your federal student aid opportunities, students may apply for a private student loan if they need additional cash to pay for college.

Private student loan rates and terms differ from federal loans. Generally, private student loans don’t offer borrowers income-driven repayment plans, or flexible deferment or forbearance terms when you’re having trouble repaying your loan.

Also, loan details often differ between lenders. To find a competitive private student loan, compare rates from a handful of lenders before choosing one.

Working Part-Time

To supplement the financial aid you’ve received, consider working part-time while you’re enrolled in school. Funds from a part-time job can help you pay for day-to-day costs as a student, like groceries, transportation, or general living expenses while you’re studying for your degree.

Borrowing From Family Members

If you have a money gap between the financial aid you’ve received and your college expenses, an option is to ask a close family member if they’re willing to offer you a loan.

Depending on your family’s financial resources and your relationship with your parents or relatives, you might have access to this alternative low-interest financing option. When borrowing money from family, be clear about how much you need, how the funds will be used, and expectations regarding repayment after you leave school.

Is College Right for You?

Attending a degree-granting, four-year college isn’t the only choice you have for furthering your education and career prospects. Enrolling in a trade school or seeking vocational training can help you advance your skills for more job-focused opportunities.

Trade School

A trade school offers programs that teach students the hands-on skills for a technical or labor-based profession.

Vocational Training

Vocational schools provide students with the education to earn a certification or formal training quickly for service-oriented professions.

SoFi Private Student Loans

If you’ve decided that a traditional college education is for you, you might still need additional funds, despite exploring alternatives to afford college with no money. A SoFi private student loan can help by offering easy financing through a fast online process.

It provides competitive rates and flexible terms to suit your repayment needs. Plus, checking your rates can be done in just three minutes.

Interested in seeing how a private student loan from SoFi can help you pay for college? Learn more and find out if you pre-qualify in a few minutes.*

FAQ

Is there any way to go to college entirely for free?

Yes, but financial aid is highly variable and is determined based on your unique situation. Students might be eligible to enroll in college at no cost, depending on their financial need. Similarly, some students might be able to attend college for free based on merit, like with a full academic or athletic scholarship.

Is relying completely on student loans for college a good idea?

No, relying completely on student loans for college isn’t a good idea. To keep your student loan debt out of college as low as possible, it’s generally wise to seek out a mix of financial aid options. Prioritize aid that you don’t have to repay, like grants and scholarships, and use student loans as a last option when funding your college education.

Why is the cost of college so high in the US?

The high cost of college in the U.S. can be attributed to various factors. An increased demand for higher education, and unrestrained administrative and facility costs have been cited as reasons for the ongoing rise of college costs.


*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. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC), and by SoFi Lending Corp. NMLS #1121636 , a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law (License # 6054612) and by other states. For additional product-specific legal and licensing information, see SoFi.com/legal.

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs. SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Third-Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
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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Guide to FAFSA Income Requirements

Guide to FAFSA Income Requirements

Even the progeny of high earners, or grad students who make a lot, have nothing to lose by filling out the Free Application for Federal Student Aid. There are no FAFSA® income limits.

The FAFSA is meant to help families qualify for need-based financial aid, but the application determines non-need-based aid after considering eligibility for need-based aid.

Plus, some colleges won’t consider you for any of their merit scholarships until you’ve completed the FAFSA. And most schools and states use FAFSA information to award non-federal aid.

What Are FAFSA Income Limits?

There is no income maximum when you file the FAFSA as an undergraduate or graduate student to attend college or career school. In other words, any eligible student can fill out the online form, even if they hail from higher-income families.

What does “eligible student” mean? You’re eligible if you can claim U.S. citizenship, have a valid Social Security number, and are enrolled in or accepted for an eligible degree or certificate program. You must also show evidence of academic progress and certify that you aren’t in default on a federal student loan, do not owe money on a federal student grant, and will only use federal student aid for educational purposes.

You must also have a high school diploma or equivalent certificate, show evidence of completing a high school education in a homeschool setting approved under state law, or that you enrolled in a career pathway program.

How Are FAFSA Needs Calculated?

Your eligibility for scholarships, grants, work-study, and federal student loans depends on several factors, including expected family contribution (EFC), cost of attendance, and need-based financial aid.

Students who have divorced parents are to use the income information for the parent they have lived with most of the time for the past 12 months. If that parent has remarried, the financial information of the stepparent will also typically be required.

EFC

The expected family contribution is an index number that determines how much financial aid you can receive. It’s an estimate, not the exact number that your family must come up with in order to pay for college.

The EFC is calculated according to formulas established by law. Your family’s taxed and untaxed income, assets, and benefits (such as unemployment or Social Security) may all go into the EFC formula.

There are three regular formulas, and a simplified version of each, for dependent students, independent students “without dependents other than a spouse,” and independent students with dependents other than a spouse.

Two income thresholds based on 2020 adjusted gross income, to be used for the 2022-23 FAFSA, are built into the financial aid formula:

Automatic zero EFC. Dependent students whose parents’ income was $27,000 or under in 2020 and who meet other criteria may have their EFC automatically set to zero. The same holds true for independent students and their spouses if they have dependents.

Simplified needs test for dependent undergrads. If parents’ income was less than $50,000 and the student meets other criteria, their assets and their parents’ will be ignored on the FAFSA.

The “income protection allowance” also involves numbers. It’s the part of income that isn’t counted when financial need is calculated.

For dependent students, the student income protection allowance for 2022-23 is $7,040, meaning if they made $7,040 or less in yearly taxable and nontaxable income, nothing is counted toward their contribution.

For their parents, the income protection allowance depends on household size and number in college. For a family of four with one student in college, the income protection allowance for the 2022-2023 academic year is $30,190. Income above that figure, the family’s so-called discretionary income, is what counts toward their contribution.

On the FAFSA, the parent contribution from income is calculated on a scale, from 22% to 47% of discretionary income.

Cost of Attendance

The cost of attendance (COA) of a college or university refers to the estimated cost of a year of attendance at that school, including tuition, lodging, food, transportation, and personal expenses.

When financial aid staffers at a college or university calculate the amount of financial aid you can qualify for, they take their COA and subtract your EFC to determine your financial need.

COA – EFC = Financial Need

Need-Based Financial Aid

Once a school uses that formula to determine your financial need, it then determines how much need-based aid you can get.

Is there an exact formula to determine exactly how much need-based you’ll get? No, because every college, university, and career school has a different way of calculating how much financial aid you’ll receive. For example, depending on your amount of demonstrated need, you may receive $1,000 in work-study money to work at an on-campus job. Another student may receive $2,000, whereas another student may not receive any money at all.

What If You Demonstrate Financial Need, or Do Not?

If you do not demonstrate financial need, you may not be eligible for need-based financial aid. Here are a few federal grants and loans that require you to demonstrate financial need in order to qualify:

•   Federal Pell Grants

•   Federal Supplemental Educational Opportunity Grants

•   Federal Work-Study Program

•   Direct Subsidized Loans

In this case, if you or your parents meet a certain income threshold (depending on various factors), you may not qualify for these programs. However, there are still high-income financial aid recipients.

Different Kinds of Financial Aid

You may be eligible to receive different kinds of need-based financial aid as well as non-need-based aid, including Direct Unsubsidized Loans and Direct PLUS Loans for parents or graduate and professional students.

Undergraduate and graduate students received almost $235 billion 2020-2021 in financial aid through grants, federal student loans, tax credits, and federal work-study, according to the Trends in Student Aid report from the College Board. The average full-time student received $14,800 per undergraduate student and $26,920 per graduate student.

Pell Grants

The Federal Pell Grant award amount changes yearly. The maximum award is poised to be $6,895 for the 2022-2023 academic year.

The actual amount of Pell Grant you can receive depends on your EFC, the cost of attendance at your college or university, your status as a full-time or part-time student, and the amount of time that you will attend school during the academic year.

FSEOG

The Federal Supplemental Educational Opportunity Grant, which typically doesn’t have to be repaid (unless you don’t fulfill your end of the bargain by completing school), goes to students who demonstrate high need.

Financial aid offices can pull from their “pot of money” and award students $100 to $4,000 per year. The amount of money you can get also depends on when you apply, the amount of other aid you get, and how much your college or university can offer students.

Work-Study Programs

For undergraduate, graduate, and professional students who have financial need, the Federal Work-Study Program offers part-time jobs to help with college expenses. You must earn the money for the program through work on or off campus.

You can enroll on a full- or part-time basis, but your school must participate in the Federal Work-Study Program. To find out if your college participates, check with the professionals at your school’s financial aid office.

Direct Subsidized Loans

A Direct Subsidized Loan is a need-based loan granted by the federal government for students who need an undergraduate loan. You do not have to pay interest on the loan while you’re in school, during any deferment, or during the grace period.

In order to receive a Direct Subsidized Loan, you’ll complete entrance counseling, which goes over your obligation to repay the loan, and sign a master promissory note, which indicates that you agree to the loan terms.

The interest rate was 3.73% for Direct Subsidized Loans (for loans disbursed between July 1, 2021, and July 1, 2022), with a loan fee of 1.057%.

Direct Unsubsidized Loans

Like a Direct Subsidized Loan, a Direct Unsubsidized Loan comes from the federal government, but graduate and professional students can also receive these loans.

Direct Unsubsidized Loans are non-need based, unlike Direct Subsidized Loans, and the government does not pay the interest while you’re in school, during any deferment, and during the grace period. The loan, like all others, will accrue interest from the minute it’s disbursed.

The interest rate was 3.73% for Direct Unsubsidized Loans for undergraduates and 5.28% for graduate and professional students (for loans disbursed between July 1, 2021, and July 1, 2022), plus a loan fee of 1.057%.

It’s worth noting that for both types of Direct loans, you do not need to undergo a credit check in order to qualify. These types of loans have annual and aggregate loan limits .

Direct PLUS Loan

Parents of undergraduate students and graduate or professional students can receive a Direct PLUS Loan from a school that participates in the Direct Loan Program. Some schools call this loan type a parent PLUS loan or grad PLUS loan to differentiate the two.

Direct PLUS Loans carry an interest rate of 6.28% (for loans disbursed between July 1, 2021, and July 1, 2022) and a loan fee of 4.228% (for loans disbursed through Oct. 1, 2022). You’ll undergo a credit check as a parent or a graduate/professional student to look for adverse events, but eligibility does not depend on your credit scores.

You can obtain up to the full cost of attendance of the school minus any other financial aid you receive.

Alternatives to the FAFSA

Do you have to file the FAFSA? Many people think it’s required, but it’s not. However, remember that by not filing, you may lose out on federal benefits like income-driven repayment plans, federal deferment, and Public Service Loan Forgiveness.

But if you choose not to file the FAFSA, you can pay for school using your own savings, private student loans, grants, scholarships, part-time work, or a combination.

Savings

Some parents, and grandparents, prepare for the task of paying for college when and if they can. The advantage of tapping into savings is obvious: You don’t have to borrow.

Got a 529 college savings plan? Good. A Uniform Transfers to Minors Act or Uniform Gift to Minors Act custodial account also can be set up to pay any expense that benefits a minor.

Using retirement funds to pay for college isn’t always a good move, clearly, but some parents dip into retirement savings or use home equity to pay for college tuition bills as they come.

Private Student Loans

Private student loans come from a bank, credit union, or other private lender. You may want to consider exhausting all of your federal grant and loan options before you consider private student loans.

They remain a great option, though, for filling gaps in need.

The amount you can borrow depends on the costs of your degree, and eligibility depends on your credit score and income.

Learn more through this private student loan guide.

Grants

Grants, which are typically need-based, are a type of financial aid that students generally don’t have to repay (unless they fail to finish the semester or year in college). The U.S. Department of Education offers the following grants besides Pell Grants and Federal Supplemental Educational Opportunity Grants:

•   Iraq and Afghanistan Service Grants

•   Teacher Education Assistance for College and Higher Education (TEACH) Grants

A student can seek other grants from their state, their college or career school, or another organization.

Scholarships

Scholarships, like grants, are a type of financial aid that you don’t have to pay back. You can apply for scholarships anywhere — through professional organizations, your job or your parents’ jobs, local organizations, religious groups, your college or career school — the list goes on.

There are lots of scholarship finders online.

Part-Time Work

If you have the time and energy to pair a part-time job with your studies, you can consider doing so after classes or on the weekends. Part-time work can help you pay for school or additional expenses, such as rent or groceries.

Private Student Loans With SoFi

Still curious about FAFSA income limits? The sky’s the limit. No matter your income, it’s worth it to file the FAFSA and see what kind of federal financial aid you might get.

If the aid you’re offered falls short of cost of attendance, which is a long and weighty list of needs, that’s where a SoFi private student loan might come in handy.

SoFi Private Student Loans allow cosigners and have low rates, no fees, and flexible repayment options.

Curious? Check your rate on a private student loan.

FAQ

Can you get financial aid if your parents make over $100k?

The short answer is yes. While you may not receive certain grants and loans because of your parents’ income, it’s important to remember that some federal financial aid is not need-based. For example, Direct Unsubsidized Loans are not based on need.

How are FAFSA income limits different for divorced parents?

You’ll answer questions about the parent whom you lived with more over the course of the last 12 months. However, if your parents are separated but still live together, you’ll answer questions about both of them.

If the parent you’ve lived with the most has remarried, you must report your stepparent’s income information on the FAFSA. In that case, you do not report your noncustodial parent’s financial information.

Are FAFSA income limits different for independent students?

No. In general, there are no income limits for any applicant.

Your dependency status makes a difference as to which questions you answer on the FAFSA. You can qualify as an independent student if you are any of these:

•   At least 24 years old

•   Married

•   A graduate or professional student

•   A veteran

•   A member of the armed forces

•   An orphan or a ward of the court

•   Taking care of legal dependents


SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC), and by SoFi Lending Corp. NMLS #1121636 , a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law (License # 6054612) and by other states. For additional product-specific legal and licensing information, see SoFi.com/legal.

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs. SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Third-Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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How to Pay for Physical Therapist (PT) School

How Much PT School Costs and Ways of Paying for It

PT school costs in the U.S. can range between around $10,000 and $30,000 per year, depending on whether you live in the same state as the program you attend.

And when it comes to how to pay for PT school, there are several funding options for prospective students — from grants and scholarships to federal financial aid, work study programs, private student loans and more.

Keep reading to find out how much PT school costs and how to pay for physical therapy school.

Cost of Physical Therapy School

The cost of physical therapy school can vary vastly depending on the program you attend, your location, among other factors.

With that said, the average tuition and fees for PT programs in the U.S are $9,629 for in-state residents and $29,730 for out-of-state students for the academic year 2021-2022.

7 Ways to Pay for PT School

Now that you have an idea of how much PT school might cost, your next priority is likely figuring out how to pay for PT school once you’ve been accepted.

Below are seven different options you can look into to help cover the costs of attending PT school.

1. Grants

Physical therapists are in high demand these days, and there’s been a corresponding increase in the number of grants available to students who are pursuing a career in PT.

Grant funding that helps students with PT school costs is sponsored by a variety of sources, from the federal government to public and private colleges and universities, professional organizations and corporations.

It’s wise to kick off your search for grant funding with federally-backed programs that target PT majors. If you’re enrolled in a PT program from an accredited college or university, you may be eligible for the following federal grants.

The Federal Pell Grant

The Federal Pell Grant is available to undergraduate students with demonstrated financial need. The amount of awarded funding maxes out at $6,895 for the 2022-23 school year. The amount awarded can change yearly and is based on the student’s level of financial need, attendance status (full time or part time), and the cost of the program itself.

The Federal Supplemental Educational Opportunity Grant

The Federal Supplemental Educational Opportunity Grant (FSEOG) is available to eligible undergraduate students who have already qualified for a Pell Grant, still demonstrate financial need, and are enrolled in a participating college or university.

To apply for an FSEOG, you can work with your college’s financial aid office and learn if you’re eligible to receive anywhere from $100 – $4,000.

U.S. Department of Health and Human Services Aid

The U.S Department of Health and Human Services offers a variety of financial aid opportunities that are designed to assist students entering into the healthcare profession. One example is the The HRSA Scholarship for Disadvantaged Students , which is a campus-based grant program that provides financial assistance to students from disadvantaged backgrounds. Eligible recipients must be pursuing a degree in an approved healthcare field (PT being one of them) and the college or university the student is attending determines the eligibility and award amount.

Colleges and Universities

There are several campus-based grants and payment programs available to PT students to help cover PT school costs. Once you’ve whittled down a list of preferred PT programs, you can search for these grants and scholarships on the schools’ websites or speak to someone in their financial aid departments to get started.

Private Organizations

Private and professional organizations can be solid sources for grants, scholarships and fellowships that help aspiring physical therapists with how to pay for PT school.

In many cases, the funding is extended on a regional basis, so searching for state or local organizations is a great way to seek financial aid that’s relevant to PT in your particular area.

Here are a couple of examples of private and professional organizations that offer financial aid opportunities to physical therapy students. The American Physical Therapy Association (APTA) sponsors several grants and scholarships for PT students, including the Outstanding PT Student and PTA Student Awards or Orthopedic Section Outstanding PT/PTA Student Award, among others.

The Foundation for Physical Therapy (FTP) administers research grants for graduate level PT students in a variety of rehabilitation techniques, including pediatric and geriatric physical therapy. In addition, the FTP offers $5,000 in award funds from their Florence P. Kendall Doctoral Scholarship for high performing PTs and PT assistants pursuing doctoral studies at an accredited college or university.

2. Scholarships

When considering how to pay for physical therapy school with a scholarship, consider searching scholarship databases for “physical therapy” scholarships. Websites such as CollegeScholarships, Scholarships 360 or Scholarships.com all offer comprehensive lists of scholarships available specifically to students studying physical therapy.

In addition to course of study, factor in other talents or qualities that may help you qualify for a scholarship, such as where you grew up, your ethnicity, or gender.

Review the scholarships available at your specific school as well.

Recommended: Find Financial Aid Options for All 50 States

3. Federal Student Loans

To help physical therapy students offset their PT school costs, federal student loans are another prime way to secure financial aid.

Federal financial aid for physical therapy students can come in the form of various federal student loans . They cover the cost of attendance, living expenses, fees and more to help you pay for your physical therapy education.

On top of that, federal student loans offer specific perks and protections such as:

•   Deferment

•   Forbearance

•   Student Loan Forgiveness options

•   A six-month grace period for new grads

Most federal student loans (aside from PLUS loans), don’t require a credit check, so borrowers won’t need to add a cosigner to the loan. Undergraduate students may also qualify for Direct Subsidized Loans, which are awarded based on financial need. Students are not responsible for paying the interest that accrues on subsidized loans while they are actively enrolled or during qualifying periods of deferment, such as the grace period.

4. Private Student Loans

Private student loans can be obtained from private lenders like banks, credit unions or other financial institutions and can help bridge the gap when federal student loans aren’t enough to pay for physical therapy school. That said, it may be tricky for physical therapy students to qualify for private student loans without a cosigner, especially if they have a lower credit score or no credit at all.

In some cases, aspiring PT students may need to ask someone to cosign for a private student loan to help them obtain a lower interest rate and more favorable loan terms.

While private student loan borrowers aren’t afforded the same perks and protections as they are with federal student loans, there are still benefits to using private student loans to pay for PT school.

Here’s a guide to private student loans that can help you learn more about the available options.

5. Part-Time Work

Whether it’s a side-hustle or a sanctioned work-study program, there are other ways to pay for PT school that don’t involve a loan, grant or scholarship.

On Campus

An on-campus work-study program is typically offered by the college or university where a student is attending PT school.

In the case of the Federal Work-Study Program , students are eligible for part-time employment while enrolled in PT school if their college is a participating member of the program and the student meets the program’s eligibility requirements. Checking with the school’s financial aid office is the best way to determine whether or not they offer a Federal Work-Study Program.

Off Campus

The Federal Work-Study Program also offers off-campus employment for a private nonprofit organization or a public agency, typically for work that’s performed in the public interest.

That said, finding your own job on or off campus (that’s not tied to federal aid) is also a possibility. Whether it’s a part-time job at a local cafe, waiting tables at a restaurant, or becoming a nanny for a nearby family — there are other options for figuring out how to pay for physical therapy school.

6. FAFSA

If you’re thinking about using federal student aid to pay for PT school, the first step is filling out the Free Application for Federal Student Aid (FAFSA®) .

The FAFSA is a free form that’s completed by current and prospective PT students to determine their eligibility for federal financial aid like some of the loans, scholarships and programs mentioned above.

Take a look at this FAFSA guide for more information about what the FAFSA is, which types of financial aid you may be eligible for, the criteria that can be expected in order to receive funds, and important dates to know.

7. PSLF

Public Student Loan Forgiveness (PSLF) is a federally-backed program that forgives the remaining balance on a borrower’s Direct Loans after:

•   They’ve made 120 qualifying monthly payments

•   Under a qualifying repayment plan

•   While working full-time for a qualifying employer

The requirements for receiving PSLF are strict, so if you are pursuing this option be sure to read all the program instructions and paperwork closely.

When deciding how to pay for PT school, this is one reason many prospective students turn first to federal financial aid.

It’s Student Loan Forgiveness programs like these that are among the many perks and protections of federal student loans that can’t be accessed through private student loans.

How Much Can Physical Therapists Make?

While PT school costs can seem a bit steep, the compensation for recent PT grads can potentially justify the price tag for today’s typical physical therapy program.

Data from PayScale, Inc. indicates that an entry-level physical therapist can expect to bring in $68,025 a year on average.

And, in 2020, physical therapists made a median salary of $91,010, with the best-paid 25% bringing in $106,060 and the lowest-paid 25% making $75,360.

The Takeaway

When it comes to how to pay for physical therapy school, there are several ways aspiring students can receive financial aid — including grants, scholarships, work study programs, federal student loans through FAFSA and private student loans.

If you’re looking for PT school funding that’s flexible and free from fees, SoFi’s private student loans may be a solution for you. You can easily check your rate online, find a payment plan that fits your budget, and even get exclusive benefits that can help you with your classwork — so you can focus on the PT program that works for you.

Find out more about SoFi’s private student loans.

FAQ

What is the average student debt for a physical therapist after graduating?

According to a 2020 survey from APTA, the average debt for physical therapists is $116,183.

How much can PTs expect to make after graduating?

An entry-level physical therapist can expect to make nearly $67,000 per year on average and the median salary among all physical therapists was around $91,000 in 2020.

Will the military pay for physical therapy school?

Each branch of the U.S. Armed Forces has different programs and requirements for receiving financial assistance for physical therapy school. Visiting their individual websites is the best way to determine eligibility.


SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs. SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC), and by SoFi Lending Corp. NMLS #1121636 , a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law (License # 6054612) and by other states. For additional product-specific legal and licensing information, see SoFi.com/legal.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Third-Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
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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10 Benefits of Student Loans

10 Benefits of Federal Student Loans

There are many different types of college financial aid available to college-bound students, with student loans being an option that many students consider. According to StudentAid.gov, 43.4 million students have outstanding federal student loans.

Students who need additional financial aid can choose between federal student loans or private student loans. However, there are many benefits of federal student loans that private loans don’t always guarantee.

Main Benefits of Federal Student Loans

1. No Credit History Is Required

A significant advantage of federal student loans is that many government-owned student loans don’t require a credit history or credit check. The only federal student loan that requires a credit check to determine eligibility is a Direct PLUS Loan.

To see if you’re eligible for federal student loans, you’ll need to submit a completed Free Application for Federal Student Aid (FAFSA®).

Recommended: How Credit History can Impact Student Loans

2. No Cosigner Required

Private student loan lenders might require a cosigner for student borrowers who don’t have a credit history or credit score. However, students who haven’t established their credit are still eligible to apply for a federal loan without a cosigner.

Having no cosigner requirement is an additional step to lending that federal student loan borrowers can avoid.

3. Fixed Interest Rates

Fixed interest rates are among the notable benefits of student loans owned by the Department of Education.

Generally, private student loans allow borrowers to choose between fixed or variable interest rates. A fixed rate doesn’t increase or decrease throughout the loan term, making monthly payment amounts easier to anticipate.

Variable student loan rates can be advantageous during a low-rate environment, but borrowers risk their interest rate changing at any point during the repayment term. This variable feature can make it more challenging to predict how much money to budget toward monthly payments during repayment.

4. Low Interest Rates

A higher interest rate increases how much you’ll pay toward your college education overall. Generally, federal student loan rates are lower than private student loans or when using high-interest credit cards to pay for college expenses.

5. Interest Doesn’t Accrue During College

Federal Direct Subsidized Loans are designed so that borrowers aren’t responsible for paying back interest that accrues while in school.

Interest that accrues on loans from this federal program is paid by the government while the student is enrolled at an eligible school at least half-time. When you leave school, any interest that accrues on Direct Subsidized Loans is the borrower’s responsibility to repay. Students who borrow Direct Unsubsidized or PLUS Loans are responsible for repaying interest that accrues while they are in school. Subsidized federal loans are only available to undergraduates.

6. Forbearance and Deferment Options

Some private loan lenders offer forbearance and deferment options to borrowers who need to temporarily pause their student debt repayment. However, these options vary between lenders while some might not offer forbearance and deferment at all.

An advantage of federal student loans is that they offer extensive forbearance and deferment options for different situations. For example, eligible borrowers can request deferment while undergoing cancer treatment, during economic hardship, while enrolled in school, during unemployment, and more.

Federal student loans offer general or mandatory forbearance, depending on your situation. Borrowers who are eligible for forbearance can request it if they need to pause or reduce their monthly payment for a short period.

7. Repayment Grace Period

Another benefit of federal student loans is that they come with an automatic six-month grace period. The grace period kicks in when the student graduates, leaves school or drops below half-time enrollment.

This time frame gives federal loan borrowers additional time to get their financial situation ready, like securing an income or a job, in preparation for repayment.

8. Income-Driven Repayment Options

Borrowers who are unable to afford their monthly student loan payment may be able to enroll in an income-driven repayment plan.

Eligible federal student loan borrowers can choose among one of four income-driven repayment plans: Income-Based Repayment, Income-Contingent Repayment, Pay As You Earn Repayment, or Revised Pay As You Earn programs.

These repayment plans offer 20- or 25-year terms. Payment amounts are limited to 10% to 15% of a borrower’s discretionary income. Depending on a borrower’s situation, their payments might be as low as $0 per month.

9. Student Loans Can Be Discharged

Borrowers of federal student loans might not be required to repay their federal loans in certain circumstances. A federal loan discharge might apply when:

•   The school closes while the borrower is enrolled.

•   A borrower experiences total and permanent disability.

•   The borrower dies.

•   The borrower of a Perkins Loan works as a teacher or other eligible professional.

•   The borrower’s school affected the loan or the borrower’s education in some way.

•   A school falsely certifies the borrower’s loan eligibility.

•   The borrower who has withdrawn from school doesn’t receive a refund of the student loan funds from their servicer.

10. Student Loan Forgiveness

Access to student loan forgiveness is another advantage of federal student loans. Unlike student loan discharge which requires borrowers to have experienced an extraneous situation to qualify, student loan forgiveness is more accessible to borrowers.

The Department of Education offers loan forgiveness through IRS under certain situations.

Alternatives to Student Loans

Although federal loans offer borrowers many benefits, there are limits that mean not all students are able to finance their education entirely with student loans. Student loans are one type of financial aid, there are other financial aid alternatives for students who are looking for options pay for their education.

Grants

Grants can be need- or merit-based. They’re provided through the federal or state government, by the student’s school, or third-party organizations. Pell Grants and Teacher Education Assistance for College and Higher Education (TEACH) Grants are a couple types of federal grants.

Unlike student loans, recipients aren’t generally required to pay back grants for college.

Scholarships

Scholarships, like grants, aren’t repaid by the student after leaving school. Scholarships can be found through schools, private and nonprofit organizations, community groups, employers, and professional associations.

This aid option might be available based on students’ merit or need.

Private Student Loans

Federal student loans offer many benefits, but as briefly mentioned, there are annual and aggregate borrowing limits. For students who either don’t qualify for federal loans or have reached the maximum limit, applying for private student loans is another option.

Private student loans are available from state organizations, banks, credit unions, and online lenders. Borrowers must have qualifying credit, and loan features and terms of private student loans vary by lender. Again, it’s important to note that private student loans are not required to offer the same borrower benefits as federal student loans.

Applying for Private Student Loans

Federal student loans offer a variety of borrower benefits, including no credit score requirements, competitive, fixed-interest rates, and deferment and forbearance options for borrowers who face financial difficulty during repayment. However, students may need to rely on a variety of different finding sources to pay for college.

If you’re looking for a private student loan, consider a no fee SoFi private student loan. It offers competitive rates and up to four repayment terms so you have access to flexible repayment options. Checking your rate is easy and takes as little as three minutes online.

Learn more about SoFi’s private student loans. Check your private student loan rates.*

FAQ

What is the average student loan debt amount?

In 2021, the CollegeBoard reported that college graduates who pursued a four-year degree at a public institution borrowed an average of $26,700 in student loans.

Are student loans bad for your credit score?

Borrowers’ student loan payment status is reported to credit bureaus. Student loans can be advantageous toward building a credit history when payments are made on-time and in full.

However, making late payments or missing payments can adversely affect a borrower’s credit score.

What are the key advantages of federal over private student loans?

There are numerous benefits of student loans from the federal government, compared to private student loans. The main advantage being that federal loans offer multiple repayment options, including income-driven plans that can bring monthly payments as low as $0, and most federal student loans do not have a credit score or credit history requirement.

Additionally, federal borrowers receive automatic deferment during school, and an automatic grace period after leaving school.


*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. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC), and by SoFi Lending Corp. NMLS #1121636 , a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law (License # 6054612) and by other states. For additional product-specific legal and licensing information, see SoFi.com/legal.

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs. SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.

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.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s
website
.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Third-Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
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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