SoFi

Student loan protection for borrowers has been a long time coming.

Luckily, there’s a new bill making its way through California’s state legislature that, if passed, would establish new student loan protections for borrowers in the Golden State.

This would be welcome news to the students who have found themselves with high loan balances and unclear guidance on how to pay them back. (According to the bill , over 1 million borrowers in California defaulted on their student loans in 2017—three times the number who lost homes to foreclosure in the same period.)

The gravity of the student loan situation is reflected on both the national and the state level. Borrowers hold $1.49 trillion in student loan debt in the United States, with $125 billion of that debt in the hands of 3.7 million California residents, netting out to around $33,000 per borrower, on average.

$125 billion

And as if paying back a student loan isn’t hard enough, the student loan market has dealt with its fair share of predatory practices. California is hoping to lead the charge on student loan protections, setting a standard that other states can follow.

The Student Borrower Bill of Rights, Assembly Bill 376, aims to tighten protections for California borrowers from servicing abuses that could end up costing them. Here’s what you need to know.

What Is the California Student Loan Borrower Bill of Rights?

Brought to the California State Assembly by Assemblymember Mark Stone, this legislation would establish consumer protections against predatory practices within the student loan industry.

The bill is being co-sponsored by Consumer Reports and other advocacy groups such as NextGen California, Student Borrower Protection Center, Student Debt Crisis, and Young Invincibles. The bill passed through the Assembly and Senate and is currently in committee.

The Student Borrower Bill of Rights focuses on private loan servicers, who act as the primary point of contact for most borrowers.

If a borrower has a question about their loan, wants to make an additional payment to their loan, or wants to change their repayment plan as is allowed by federal plans, they contact their servicer. The service provider acts as a recordkeeper for the loan and as a result, is where borrowers go for information on their loans.

According to the bill, the Consumer Financial Protection Bureau (CFPB) has continued to find that borrowers encounter servicers that engage in practices such as discouraging borrower-friendly alternative payment plans, failing to respond to questions about loans, overturning known payment processing errors, and generally failing to provide sufficient information to borrowers regarding their loans.

In recent years, these companies have been the target of lawsuits for abusive practices and mismanagement. Says Suzanne Martindale for Consumer Reports : “Multiple investigations have shown that loan servicers routinely lose paperwork, misapply payments, provide borrowers inaccurate information, and even steer them into more costly repayment options with virtually no accountability.

“At a time when the U.S. Department of Education has refused to set loan servicing standards to help borrowers, it’s critical for states like California to lead the way and address these longstanding abuses.”

This won’t be the first student loan-related bill in California in recent history—in 2016, California passed the Student Loan Servicing Act , requiring all student loan servicers to obtain licenses to operate in California.

Servicers in the state are also subject to routine oversight by the Department of Financial Protection and Innovation. The current bill looks to build on the 2016 bill, establishing a standard of practice for student loan servicers.

AB 376 states that “the State of California has an opportunity and an obligation to act” and that “with the increasingly uncertain federal landscape, it is now more important than ever to ensure that California student loan borrowers will be given meaningful access to federal affordable repayment options and loan forgiveness benefits, reliable information, and quality customer service and fair treatment.”

What Does the Student Borrower Bill of Rights Hope to Accomplish?

Behind the legislation is the desire to promote meaningful access to the services promised by federal student loans: affordable repayment and loan forgiveness benefits for student loan borrowers, and the ability to rely on information about their loans from service reps.

One goal of AB 376 is to build upon the Student Loan Servicing Act of 2016. The bill would strengthen the state’s ability to protect borrowers by creating minimum standards for student loan servicing companies and helping to improve oversight within the industry for California residents. Here is an overview of key points outlined by the bill, according to Consumer Reports :

•  Ban “abusive” student loan servicing practices that take unreasonable advantage of borrowers’ confusion over loan repayment options

•  Create minimum loan servicing standards to ensure fair application of payments, improved record-keeping on borrower accounts, and proper staff training so borrowers are informed of more affordable payment options

•  Establish a Student Loan Advocate to review borrower complaints, gather data, and issue reports to the state legislature

•  Grant the Department of Financial Protection and Innovation additional “market monitoring” authorities to collect better data about the student loan servicing industry.

Ultimately, the bill’s creators hope it will be a guide for other states—or federal law. The text of the bill points to the lack of action by federal legislatures to combat widespread abuse, even though the Office of Inspector General at the United States Department of Education reported improper practices at each of the largest student loan servicers.

What Can Borrowers Do Now?

While the bill seems to be taking the necessary steps to protect borrowers from unscrupulous loan servicers, it does not solve the problem of nefarious loan servicing practices. Additionally, this bill does not seek to relieve any of the existing student debt burden held by borrowers, which is currently a topic of national conversation.

But that doesn’t mean there aren’t steps that borrowers can take to help make sure they’re set up for success. First, borrowers may find the simple act of identifying and organizing student loans could bring clarity.

You could list out each loan along with the student loan servicer, the interest rate, and the balance. It might be a good idea to learn as much as you can about your loans, including (and especially) the terms of your repayment.

If you have federal loans, you could make sure that you are using an appropriate repayment plan. If you don’t select another plan, most federal loans will be placed into the standard 10-year repayment plan, but there are other options.

For those borrowers struggling to make their monthly payments, moving to a more affordable income-driven repayment plan is generally a better option than missing loan payments.

If you do find yourself in a position where you need to miss a loan payment, you could contact your servicer to discuss your options as well.

If you have private loans, you are unlikely to have as many options for managing your student loan payments, such as income-driven repayment plans or options for deferment or forbearance.

Because the interest rates on student loans vary, borrowers who are looking to pay off their debt might want to focus on paying off the loans with the higher interest rates first, while also making minimum payments on any other debt.

It may also be possible to reduce the overall interest rate on student loans and consolidate loans through student loan refinancing. Refinancing is the process of paying off your old loans with a new loan through a private loan refinancing company like SoFi.

You can check your rates with SoFi in just a few minutes. There’s no obligation to sign up, and checking won’t affect your credit score1. For many borrowers, SoFi has been a breath of fresh air in an industry that hasn’t always felt friendly.

Check your rates with SoFi and see if student loan refinancing is right for you.

---

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 Student Loan Refinance
If you are looking to refinance federal student loans, please be aware that the White House has announced up to $20,000 of student loan forgiveness for Pell Grant recipients and $10,000 for qualifying borrowers whose student loans are federally held. Additionally, the federal student loan payment pause and interest holiday has been extended beyond December 31, 2022. Please carefully consider these changes before refinancing federally held loans with SoFi, since the amount or portion of your federal student debt that you refinance will no longer qualify for the federal loan payment suspension, interest waiver, or any other current or future benefits applicable to federal loans. If you qualify for federal student loan forgiveness and still wish to refinance, leave unrefinanced the amount you expect to be forgiven to receive your federal benefit.

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.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SOSL19087

Read more

Teachers in the U.S. are faced with underfunded classrooms and stagnant pay. In fact, the average teacher salary has actually decreased 4.5% over the last 10 years. However, the average teacher salary can vary greatly depending on your level of experience, location and cost of living, and grade level or subject you teach.

Average Teacher Salary by State

The national average salary for a first-year teacher in the 2017-18 school year was $39,249, according to the most recent data available from the National Education Association . This comes in far below the overall average starting salary of $50,944 for graduates with a bachelor’s degree employed across all fields of work.

But where a teacher decides to live and work has a huge impact on a starting salary. For instance, the state with the lowest average for new teachers is Montana, at only $31,418—almost $10,000 less than the national average. And in Washington state, first-year teachers averaged $42,240, the highest across the country.

For experienced teachers, the average salary is higher. According to the NEA , the average public school teacher salary in the U.S. was $60,477 in the 2017-18 school year.

As with first-year teacher salaries, there is still a wide range when it comes to state averages , with New York, California, and Massachusetts on the high end—all over $80,000—and Mississippi, West Virginia, and Oklahoma at the lower end—all between $44,000-$47,000.

Also, high school teachers tend to make, on average, more money than their colleagues in elementary or middle school. The national average high school teacher salary was $62,860 in 2017, according to U.S. News Best Jobs Rankings . Middle school teachers averaged $61,040, and elementary school teachers $60,830.

However, it’s important to note that most salary reports and rankings do not account for cost-of-living differences. NPR ran an analysis in 2018 , with the help of EdBuild, to adjust the 2016 rankings of teacher salaries by states for cost of living.

When discussing average salaries, usually those numbers have not been adjusted for regional differences on things like rents and mortgages or day-to-day spending like food and day care.

Those costs can vary widely depending on where you live. The adjustments NPR made to the 2016 NEA data meant that, for instance, while New York ranked first in average salary at $77,957, it dropped to 17th place after the adjustment.

Another interesting example is that while Indiana and California appear to be vastly different in average teacher salary, at $50,715 and $72,842 respectively, the cost-of-living adjustment brings them within $100 of each other.

In the past year, teachers across the country have been going on strike to protest everything from low education budgets to flat wages.

In South Carolina, where the average teaching salary in 2017-18 was only $50,182 (about $10,000 lower than the national average), NBC News reports many teachers are working extra jobs just to make ends meet.

The state has pushed back on several efforts to give teachers substantial raises, according to the report. Teachers are working on factory assembly lines, checking tickets at event venues, or in retail jobs in order to make up for not having a living wage from their day jobs as teachers.

So, when you are looking for the average teacher salary in your state, make sure you also take into account your years of teaching experience, type of school, location, and cost of living.

Paying Off Your Student Loans as a Teacher

The National Center for Education Statistics reported in April 2018 that for the 2015-16 school year, there were 3.8 million full- and part-time public school teachers in the U.S., split evenly between elementary and secondary school teachers.

The class of 2016 graduated with an average debt of about $28,500, according to the College Board . On a standard 10-year repayment plan with a 6% interest rate, the monthly payment for that average debt amount would be about $316 per month.

For the new public school teacher only making an average of $39,249, that’s almost 10% of their annual income just spent on student loan payments.

Teachers in many states are also required to maintain certification by continuing their education, and may even decide to pursue a graduate degree or further education to help advance in their careers, which could result in compounded debt.

For teachers who are hoping to pursue student loan forgiveness, there are a few possibilities when it comes to federal loans:

Teacher Loan Forgiveness

This program currently can forgive up to $5,000 or up to $17,500 in federal loans, depending on the subject you teach. In order to qualify, you must be a full-time teacher and complete five years in a row teaching at a qualifying school or educational service agency. The eligible loans are federal Direct Loans and Stafford Loans.

Highly qualified math or science teachers or special education teachers may be able to receive the maximum amount of up to $17,500 of their student loans forgiven. Teachers of other subjects may be able to get up to $5,000 of their loans forgiven. There are additional requirements for teachers who are new to the profession as well.

Teachers may be able to get loan forgiveness under both the Teacher Loan Forgiveness and Public Service Loan Forgiveness programs, just not for the same period of teaching service.

Public Service Loan Forgiveness (PSLF)

Under this program, qualifying public service employees, which can include teachers, may be eligible to have their loan balance forgiven on federal Direct Loans after making 120 on-time payments under a qualifying repayment plan.

Unlike the Teacher Loan Forgiveness program, teachers do not need to teach at a low-income school or in a certain subject when applying for the PSLF Program. The requirements include that you are employed by the government on a local, state or federal level or work for certain non-profit organizations.

The payments only count if you are a teacher employed full-time by a qualified public service employer. Private loans and non-Direct federal loans are not eligible for this program, but may be able to be consolidated into a Direct Consolidation Loan. However, keep in mind that consolidation will probably restart the repayment clock and previous payments might not count.

That’s why it’s important to be on the right repayment plan from the start. The Department of Education recommends an income-driven repayment plan, instead of the 10-Year Standard Repayment Plan, to get the best value from the program.

This will cap your payments based on your income, and if you’re on the lower end of the teacher pay scale that will likely mean that, after 120 payments, there will probably still be some amount of debt to be forgiven.

If you didn’t choose an income-driven repayment plan before choosing the PSLF program, you may have been placed on the standard 10-year repayment plan and, possibly, there would be nothing left to forgive.

Teachers with Perkins Loans may be able to have their loans entirely forgiven by serving full-time in a public or nonprofit elementary or secondary school as a:
•   Teacher in a school serving low-income students.
•   Special education teacher.
•   Math, science, foreign languages, or bilingual education teacher, or teacher in any field determined by a state education agency as having a shortage of qualified teachers in that area.

To qualify , you must teach for at least one year, and then the loan amount is cancelled in yearly increments until 100% is cancelled after five years. The federal Perkins Loan program ended in September 2017, but loans distributed through the program may still qualify.

Refinancing Student Loans

If you have other loans, such as private loans, that do not qualify for these federal loan forgiveness programs it might be worth considering refinancing your student loan debt. This may help make your loan payments more affordable and possibly offer you a lower interest rate.

If you qualify to refinance with a private lender, such as SoFi, you may also be able to change your student loan’s term length to help lower your monthly payments.

While private lenders like SoFi can refinance both your federal and private student loans, you should know that in doing so, you lose benefits that federal student loans provide like income-driven repayment programs and Teacher Loan Forgiveness programs.

Interested in finding out how much you can save by refinancing your student loans? Learn more about SoFi student loan refinancing today.

---

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs. SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility 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 Student Loan Refinance
If you are looking to refinance federal student loans, please be aware that the White House has announced up to $20,000 of student loan forgiveness for Pell Grant recipients and $10,000 for qualifying borrowers whose student loans are federally held. Additionally, the federal student loan payment pause and interest holiday has been extended beyond December 31, 2022. Please carefully consider these changes before refinancing federally held loans with SoFi, since the amount or portion of your federal student debt that you refinance will no longer qualify for the federal loan payment suspension, interest waiver, or any other current or future benefits applicable to federal loans. If you qualify for federal student loan forgiveness and still wish to refinance, leave unrefinanced the amount you expect to be forgiven to receive your federal benefit.

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.

SOSL19091

Read more

For four years you dreamt of the day you’d walk across that graduation stage. During late night study sessions and early morning classes, you couldn’t help but romanticize the moment you’d finally be homework free. But once you do graduate, a weird feeling may hit you.

What is your next step? Possibly for the first time in your life, there is no mandated path for you to take. No, “If you meet x requirements, y will happen.” It can be an overwhelming feeling to say the least. While you work on building your own path, consider these tips for navigating life after college. Hopefully you can make the transition smoother and a lot more fun.

Getting to Work

Hopefully you enjoyed a few weeks off post-grad to travel or kickback and relax after four years of hard work. When you’re ready to begin your job search, it can be a lot to process. Chances are you won’t be landing your dream job anytime soon, but now might be the time to focus on taking the baby steps towards building your career. If you haven’t graduated yet, then you’re ahead of the game and have extra time to think about what to do after graduating college.

First off, don’t let job searching stress you out. New grads are in luck. According to the 48th annual “Recruiting Trends” study conducted by Michigan State University & Collegiate Employment Research Institute at MSU in 2018, recent bachelor degree graduates can expect to see growth in the job market.

The study found that the college labor market continues to grow for the ninth consecutive year.

Over 3,000 employers participated in the study and amongst those employers there are plans to hire almost 63,500 new employees. Approximately 80% of those new hires will have received bachelor’s degrees.

With the unemployment rate at 3.7%, it is among the lowest it has been in nearly 50 years (the lowest being 3.4% for several months in 1969). This should give recent college grads job searching confidence.

But despite these very low unemployment numbers, six in 10 Americans aged 18 to 24 reported feeling financial pressure to accept the first job they receive, according to another 2018 survey, this time by ZipRecruiter .

It was also found that 64% of job seekers accepted the first salary offer they received at their current position. Not negotiating or comparing multiple offers can cause young workers to miss out on higher incomes.

Not sure what you should be earning? Research, research, research. One super helpful tool for learning what workers similar to you are making is Glassdoor’s Salary Calculator . You provide some basic info like your location and experience, and their tool tells you what the average salary for your desired role is. While this tool can only provide an estimate, it may help give you determine if you should be fighting for a higher salary.

Taking Your Health into Your Own Hands

Now that Mom and Dad aren’t in charge of scheduling your biannual dental appointments, it’s time to start navigating your healthcare on your own. Whether you’re still on your parent’s policy or you have your own policy, getting more familiar with the resources your healthcare plan provides is never a bad idea. It can help you stay on top of scheduling check ups, dental cleanings, and eye exams.

And you might want to start saving for any emergencies that may arise. According to a report by the Federal Reserve Board, 44% of people cannot cover an unexpected $400 emergency expense using cash alone, or would rely on borrowing or selling something to do so. Having an emergency fund at the ready can be an important step to financial wellness in this new chapter of your life.

Speaking of wellness—you may feel swamped by post-grad life, but it’s such an important time to prioritize your well-being. It might be helpful to make time to go the gym each week, cook healthy meals, and get a good night’s sleep!

Continuing Your Learning

It’s normal after college to need a little break from learning. For the first time in your life, there is no one telling you what to read or what classes you have to take. But once the dust has settled and you’ve had a rest from hitting the books, you might try to prioritize learning—because it can be a positive boon for your career.

For example, you could consider obtaining a professional license related to your career or industry. The Bureau of Labor Statistics estimates that 23% of workers have some sort of professional license. Having one may give you a competitive boost at work or while job searching. You can go the extra mile to develop more skills needed in your career through an online class or professional conference.

Not all of your learning efforts have to go towards career advancement, of course. Take that cool history of film class at your local community college. Join a book club or just load up your bookshelf with books you’re dying to read. Exploring your passions can help you feel motivated, fulfilled, and inspired. Now is the time in your life to open doors, not close them.

Getting Your Finances Organized

Once you graduate from college and join the working world, you may find you have a lot more cash at your disposal. Sounds fun right? But chances are, your living expenses just skyrocketed. One expense that may really be bringing you down is your student loan debt payments.

According to a 2018 report by the Institute for College Access & Success , about two in three American college students who graduated from college in 2017 had student loan debt. How much did they owe? On average, $28,650.

Student loan debt weighing you down? There are a few strategies you can use to help pay off your student loan debt quicker. You might start your journey to a student loan-free life by creating a monthly budget that can help you get out of debt.

To create a budget that can assist with paying off debt, it may behoove you to sit down and spend a few hours getting organized.

You could start by gathering all of your bills and recent receipts. Review exactly what you need to spend on necessary living expenses (rent, food, health insurance) then note any areas of your spending you can cut back on (travel, entertainment, clothing).

Compare the cost of your living expenses to your paystubs to see how much you can afford to pay towards debt each month. Creating a budget can help you not only pay off your debt, but avoid accumulating more debt in the future.

You may find that it makes sense to look into income-driven repayment plans for your student loans (if you have federal loans). Or, once you have your monthly budget under control, you might be considering refinancing your student loans. You may be able to lower your interest rate, lower your monthly payments by extending your repayment term, or release a co-signer from a previous loan.

Do note that lengthening your repayment term will usually lower your monthly payments, but can increase the interest you’ll pay throughout the life of your loan. If you shorten your repayment term or lower your interest rate, you may save money on interest and be able to get out of debt sooner—but your monthly payments would likely go up.

Refinancing comes with many benefits, but it’s not for everyone—you lose federal benefits and protections (like the income-driven repayment plans mentioned above) when you refinance the loan with a private lender.

But if you are not planning on taking advantage of these benefits, refinancing might be for you. If you’re considering refinancing your student loans, you may want to review SoFi’s student loan refinancing options.

See if you can refinance your student loans with SoFi. Check your rate online in minutes.

---

SoFi Student Loan Refinance
If you are looking to refinance federal student loans, please be aware that the White House has announced up to $20,000 of student loan forgiveness for Pell Grant recipients and $10,000 for qualifying borrowers whose student loans are federally held. Additionally, the federal student loan payment pause and interest holiday has been extended beyond December 31, 2022. Please carefully consider these changes before refinancing federally held loans with SoFi, since the amount or portion of your federal student debt that you refinance will no longer qualify for the federal loan payment suspension, interest waiver, or any other current or future benefits applicable to federal loans. If you qualify for federal student loan forgiveness and still wish to refinance, leave unrefinanced the amount you expect to be forgiven to receive your federal benefit.

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.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
SOSL19066

Read more

Here’s the short answer: No. Your financial aid may change from year to year, based upon numerous factors, ones both within and outside of your control—but it does not automatically increase each year. In fact, sometimes the amount may decrease.

As an undergraduate, currently what you can borrow annually in federal student loans maxes out between $5,500 and $12,500. As a graduate or professional student, the maximum you can borrow annually through Direct Unsubsidized Loans is $20,500. If you need more, you can apply for Direct PLUS Loans.

As far as private lenders go, each has its own parameters about what you can borrow annually for student loans, along with its own lending requirements and parameters for approval.

Let’s dig a little deeper.

Do You Have to Apply for Financial Aid Every Year?

If you’d like to get funding from federal student loans (and other federal financial aid, like grants and work-study), then you’ll need to fill out the Free Application for Federal Student Aid (FAFSA®) each year. For private student loans, you likely need to fill out an application each year with the lender of your choice, unless the lender offers a multiple-year approval option.

How Do You Fill Out the FAFSA?

Basically, you’ll need to:

•  Provide some personal demographic information.

•  List the schools you’re considering (or, if you’re already in school, which one you attend).

•  Determine your dependency status (if you’re under 24, you’re likely considered a dependent of your parents).

•  Provide your parents’ or guardians’ demographic information (unless the formula provided in the FAFSA process determines that you’re an independent student).

•  Share financial information—yours and, if you’re a dependent student, that of your parents.

•  Sign and submit.

There are a few scenarios where you may be found ineligible. These include (but are not limited to) if you owe a refund on a federal student grant from the past, are in default on federal student loans, or if you have a conviction for possession or sale of illegal drugs that occurred when you were a current recipient of federal student aid. With the last possibility, there is an eligibility worksheet that can guide you through other options.

Does the Government Decide How Much Money You’ll Be Awarded?

How much you’ll receive depends on several factors, including your:

•  Expected Family Contribution (EFC): This formula takes several things into account, including your family’s income (taxed and untaxed), assets, benefits (including unemployment benefits and Social Security), size, and the number of family members who will attend college or vocational school that year.

•  Enrollment status, either full-time or half-time.

•  Attendance costs of your school of choice.

The U.S. Department of Education doesn’t decide how much money you’ll receive in federal student loan funding, though. What they’re doing, through the information collected on your FAFSA, is determine your eligibility for federal student aid.

This information is then forwarded to the schools you’ve listed in your FAFSA. Note that, effective with the 2016-2017 academic year, colleges no longer can see the other schools, if any, that you’ve applied to.

What Role Does Your School of Choice Play?

Once the Department of Education determines that you’re eligible for federal financial aid, your information is forwarded to the schools you’ve listed on your application.

Then, the financial aid department in each of those schools will calculate what it will cost you to attend. Next, they look at your EFC, subtracting that from your cost of attendance (COA). This allows them to see your total amount of financial need, which shows how much need-based aid you can receive.

To determine how much non-need-based aid you can receive, each school will take your COA and subtract financial aid already awarded to you.

Your school may have scholarships and grants that you may also qualify for.

Can You Keep Your Financial Aid Amount Consistent?

There are no guarantees that you’ll receive the same amount of federal student aid from year to year. You may want to have a Plan B, which can include seeking out scholarships and grants and considering a private student loan to fill in the gaps.

If your parents are willing and eligible, they could look into a Parent PLUS Loan to help pay for your education. Other options include finding out if you qualify for federal work-study or finding a part-time job that can help pay for your expenses.

Writing a Financial Appeal Letter?

If you discover that you’ve been denied financial aid or you’ve received less than what you need, one option is to write an appeal letter. Your school may or may not change its decision, but it may be worthwhile to try, especially if you believe you have other information that they didn’t take into account, or if something significant has changed.

If, for example, one of your parents lost a job recently or someone in the family experienced a medical emergency, then an appeal letter might help. Tips that might help you to write a successful one include:

•  Look for a contact in your school’s financial aid office and address that person directly.

•  Be polite, professional, and respectful.

•  Be clear about what you’re requesting, including how much aid you need and why.

•  Be concise and compelling, keeping in mind that the financial aid office is likely busy.

•  Provide relevant documentation, such as a doctor’s note or eviction notice. Perhaps give them a breakdown of how you’d spend the money you’re requesting.

•  Carefully proofread your letter and ask a trusted friend or family member to do so, as well.

Paying for College If You Didn’t Receive Federal Financial Aid

If you didn’t receive the federal student aid you anticipated or hoped for, and if an appeal letter isn’t successful (or if you don’t qualify for need-based aid), then other options for paying for college include:

•  Seeking out scholarship and grant funding. You can talk to your school’s financial aid department for leads, and use the U.S. Department of Labor’s free scholarship search tool and this grant resource by the federal government. You may find opportunities that are need based, or merit based—or a combination of both.

•  Your financial aid package may include the opportunity to find a job through the Federal Work-Study program . This program focuses on funding part-time jobs for students that are awarded upon financial need. If you qualify, you typically get paid by the hour by the school, but you may want to apply for a relevant job. Opportunities may be limited, so you’ll want to start looking early.

•  If you don’t qualify for work-study or can’t find a position, you can still job hunt on your own. Your college may have job boards where you can find opportunities for part-time employment, and you can ask professors, counselors, friends, and family for ideas. You can also use online job boards.

•  You can also investigate private student loans offered by private lenders. If you do, then you may want to compare interest rates and terms, as lenders typically offer different programs. If you decide to go this route, you may need a cosigner, and you’ll want to read the terms carefully to understand what you’ll owe, when—and if you have to reapply every year or if you’re covered for your entire education.

Private Student Loans with SoFi

SoFi helps students pay for college with our no-fee private student loans. No fees = no origination fees, no late fees, no insufficient fund fees. No fees, no fuss.

It’s easy to apply, and you can add a cosigner to your application in just minutes. SoFi also offers flexible repayment options to help you find the loan that fits your budget, one that allows you to repay your way.

In the interest of total transparency, we recommend you fully explore your federal options first.

Discover more about your private student loan options at SoFi.

---

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.
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs. SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility 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.

SOPS19057

Read more

There’s nothing quite like the feeling of having your credit card balance paid in full. It’s like a breath of fresh air, a surge of pride, and a huge sigh of relief all rolled into one. But Americans have an on-going love affair with plastic.

Collectively we hold more than $1 trillion in credit card debt. When it comes to getting rid of credit card debt, baby steps can lead to big victories—even the possibility of getting those credit cards paid off in 2020.

To be clear, we’re not talking about being completely debt-free in 2020. Depending on how much you owe on all your debt in total, that could be a longer journey. But targeting your credit card debt can be a smart first-step since credit card debt can sometimes come with a high interest rate.

We’ve put together eight common strategies for how to get rid of credit card debt. But first, you’ll need to get your head in the game. Unless you suddenly receive an inheritance or win the powerball, unloading debt can be challenging.

If you truly want to try and eliminate credit card debt in the new year, it’s going to require a lot of budgeting, discipline, and will-power. You’ll likely have to make sacrifices and compromises. But if you can keep your eye on the prize, next year you could be looking at a nice, round zero.

1. Limit Your Use of Credit

No strategy for how to crush credit card debt is going to work if you continue to rely heavily on your credit cards. Pick one card to keep—ideally, one with good terms, like a low interest rate or a great rewards program —and put the rest away.

You can store them in a safe place or even cut them up so you’re not tempted to use them. If the card doesn’t carry a large annual fee, consider not canceling your credit card account, since losing that cards credit history or percentage of credit utilization could possibly have an affect on your credit score.

2. Take a Hard Look at Your Spending

Go through last month’s bank and credit card statements and add up all the money you spent eating out, or shopping for non-essentials. You may be surprised at what you find.

Review your spending closely and see if there is any room for you to cut back on unnecessary expenses. Then, create a budget that’s completely within your means.

The goal is to cut back on your discretionary spending so you can focus additional funds on paying off your credit card debt. Take a look at our tips for creating a better budget. Building a workable budget is one of the first steps in tackling your debt.

3. Create a Debt-Repayment Strategy and Stick to It

There are a few different schools of thought when it comes to eliminating your credit card debt, especially if you have debt spread over multiple credit cards. Regardless of the strategy you choose, make the minimum monthly payments on all of your debts.

One strategy is called the debt avalanche method. Using this method you’ll organize your credit card debt from highest interest rate to lowest interest rate.

Focus your efforts on repaying the debt with the highest interest rate first. Then as you pay off each credit card, you can contribute the money you were contributing to the next debt.

On average, Americans will pay more than $1,000 in interest this year, so tackling the highest interest rate first could be appealing. You can use our credit card interest calculator to see an estimate of how much interest you’ll accrue on your current track.

The other approach suggests you focus on the credit card with the smallest balance first. This is called the debt snowball method. The goal of this strategy is to encourage you to continue your debt repayments. Since you start with the smallest balance, you’ll start seeing the impact of your payments faster.

6. Transfer to a Balance Transfer Credit Card

This could help you toward your goal of eliminating your credit card debt but in order to do so it will require diligence to avoid common pitfalls.

A balance transfer credit card allows you to open a new low-interest or interest-free credit card and transfer your existing balance from a high-interest credit card, so you can pay off the debt. In theory, paying off the debt should be easier without a high APR.

The introductory APR on low or 0% transfers generally lasts anywhere from six to 18-months, so be sure you understand the terms and conditions. These can be a useful tool if you can repay your debt during the introductory period.

7. Consolidate Your Debt with a Personal Loan

A personal loan won’t eliminate your debt, but it could help you get out of the high-interest credit card game. Instead of a revolving door of debt, you can opt to pay one monthly fixed payment, possibly at a lower interest rate.

8. Pay More than You Owe, More Often than You Owe It

As you work toward paying your credit card debt, consider making more than the monthly minimum payments. This can help you pay off your debt faster and in doing so, could help you reduce the amount of money you spend in interest over the life of the debt. This can be helpful in both the avalanche and snowball methods of debt repayment.

Ready to see how consolidating your credit card debt with a personal loan could help you take control of your finances? SoFi can help. Use our personal loan calculator to compare your current debts with a personal loan.

When you take out a loan with SoFi there are no prepayment penalties or origination fees. You’ll also gain access to a community of like-minded savers.

Check your rate in just a few minutes.

---

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s
website .
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
SOPL19020

Read more