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Do you love volunteering, but feel held back by your student loans? Maybe you’ve taken on a new side gig to help manage your student debt payment, and now there’s just not enough time in the day. If this sounds like you, there’s good news—you could potentially help pay off your student loans by volunteering!

There are a number of organizations that will let you volunteer to pay off student loans. From teaching in an underserved area to helping out a local non-profit in need, you may be able to get cash to put towards your student loans while making the world a better place. That’s not just a great way to multitask, but it’s also a fun way to pay off your loans. Who doesn’t love helping people?

On top of that, it’s a fabulous way to gain work experience that can boost your resume and help you stand out in your post-graduation job search and beyond.

Many employers love to see volunteer work and many of the types of positions that help you repay your loans require you to take initiative and be a leader which will help you grow professionally.

Here are some ways to volunteer and possibly pay down your student loans:

AmeriCorps

AmeriCorps is a government initiative that has been around since 1965. Its goal is to help young people take on service positions where they’re able to learn important work skills, help local communities, and earn money towards their education or student loans.

In order to qualify, you need to be at least 17 years old. If you want to participate in the AmeriCorps VISTA program , you need to be 18 or older.

Participants in the program may qualify to have their qualified student loans put into forbearance while they’re working. After 12 months of full-time volunteering, you qualify for a Segal AmeriCorps Education
Award , which can be used to “pay educational expenses at eligible post-secondary institutions,” according to the program.

Those who volunteer for the VISTA program can get a cash stipend instead . While volunteering with the program, you will also get a living allowance and health benefits.

If you volunteer to pay off qualified federal student loans via the AmeriCorps program, your time in the program also counts towards the Public Service Loan Forgiveness program (PSLF).

Shared Harvest Fund

The Shared Harvest Fund has a goal to help repay $20 million in student debt by 2020. The organization was started by three physicians with the goal of reducing graduates’ student loan stress.

Each time you volunteer to reduce student loans with the Shared Harvest Fund, you earn Stipend Coins which you can cash in with your student loan lender. You can earn up to $1,000 per project.

To get started, simply log into their website and find a cause or a project that interests you. You’ll be able to refine your work skills while doing good in your community.

Some examples of organizations that they work with include UnCommon Law , which helps adults and children who are struggling within the criminal justice system, and the Elgin Foundation , which helps kids in rural Appalachia with dental care and literacy programs.

Peace Corps

The Peace Corps is a government-run program that was founded in 1961 by President John F. Kennedy. The program allows you to pay off student loans by volunteering around the world at a grassroots level. You gain work experience and become a global citizen while earning money that can help you repay your student debt.

The program is open to anyone over the age of 18, and while you are an active Peace Corps volunteer, you may qualify for deferment or forbearance on your federal student loans.

As a volunteer with student loans , you may also qualify for income-driven repayment. Since Peace Corps volunteers earn fairly low salaries, your payments could be as low as $0. If you hold a Perkins Loan, you could qualify for 15% to 70% forgiveness.

If you have a federal Direct Loan, you could qualify for the Public Service Loan Forgiveness. It’s important to thoroughly review the details of PSLF —for those who qualify, it could dramatically reduce the amount of time you spend repaying your student loans. Full-time AmeriCorps and Peace Corps volunteers can qualify for PSLF, but it requires 120 qualifying monthly payments made on an income-based repayment plan.

National Health Service Corps

If you’re a medical professional such as a doctor, dentist, or behavioral health professional, another way to pay off student loans by volunteering is via the National Health Service Corps .

You can get part of your student loans forgiven if you volunteer to work in an underserved area through the National Health Service Corps. The program helps ensure that those in impoverished, underserved, or remote areas have access to quality health care.

In addition to getting a regular paycheck from working in those areas, you’ll also get up to $50,000 to repay your student loans if you commit to working for two years, full-time, in one of those underserved areas. Also, it is not treated as income in the same way that other forms of student loan forgiveness are, so you won’t be taxed on it.

Not Able to Volunteer to Repay Your Loans?

Unfortunately, not everyone is able to volunteer to pay off student loans. It’s also important to consider whether it makes sense to volunteer to help reduce some of your student loans. For example, if you’re a doctor, you might have a much lower income working in a remote area and miss out on far more than just $50,000 worth of billings during those two years.

That money wouldn’t just give you more cash to repay your loans yourself, but it would also help you build an income that could have a long-term impact on your annual earnings. As with most things, volunteering as a way to repay your student loans has an opportunity cost.

Similarly, when you look at the volunteer opportunities available, you might want to look at how much you’re ‘earning’ for each hour you volunteer.

You might be better off getting a side hustle if you’re only looking to repay your student loans quickly.

If you don’t qualify to volunteer or are looking for an alternative to reducing your student loan debt burden, you could consider refinancing. When you refinance your student loans you could potentially qualify for a lower interest rate, which might cost you less in interest over the life of the loan, depending on the new term you choose. If you qualify to refinance with SoFi, there are no origination fees. You’ll be able to select a new term length and choose between a fixed or variable rate loan.

If you’re looking to simplify your repayment plan, refinancing could be great for you since you’ll only have to worry about one monthly payment. However, refinancing your student loans with a private lender means you’ll forfeit your access to federal student loan benefits.

For those interested in refinancing with SoFi, we offer member benefits like Unemployment Protection and Career Coaching. To see how refinancing could impact your student loans, take a look at SoFi’s easy-to-use student loan refinance calculator.

If volunteering isn’t an option to reduce your student loan debt, consider refinancing. You can get a rate quote from SoFi in just two minutes.

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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.

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.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
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Whether you’re taking out a personal loan or applying for a mortgage, chances are you’ll inevitably run into the term “prime interest rate.” And, there’s an even stronger chance that you may not know exactly what it means at first.

Here’s the deal—a prime rate is the interest rate at which banks charge their best customers. It’s the lowest rate offered to individuals and corporations that are considered low risk by banks—those with good credit history who aren’t likely to miss payments or default on their loan.

How Is the Prime Interest Rate Set?

Individual banks determine their prime interest rate. While the Federal Reserve has no direct role in setting the prime rate, many banks choose to set their prime rates based partly on the target level of the federal funds rate.

The federal funds rate is the rate that banks charge each other on an overnight basis and is established by the Federal Open Market Committee.

The banks lend each other money in order to meet the reserve requirement , which is also set by the Federal Reserve. This is the minimum amount of cash a bank must have in their vault or at the closest Federal Reserve bank. If one bank has excess cash, the bank has a financial incentive to lend that excess cash to a bank that has less than its federally mandated amount. The reserve requirement acts as a lending limit for banks and also ensures that they have enough cash on-hand for the start of business each day.

The federal funds rate is changed for a variety of reasons—to decrease inflation for instance, or stimulate growth. In 2008, the federal funds rate was lowered to 0.25%, in order to encourage bank lending and mitigate the growing financial crisis. The highest the federal funds rate has ever been was 20% in 1980.

Typically, the prime rate is set about three percentage points higher than the Federal Reserve’s rate. Since each bank sets its own prime rates, a popular measurement of the current prime rate is the Wall Street Journal’s prime interest rate . This is determined by polling 30 of the largest US banks. If 23 of the banks have changed their prime rates, the Wall Street Journal prime rate will change as well.

Because the prime interest rate is typically aligned with the federal funds rate, it’s highly susceptible to change—The Federal Open Market Committee meets eight times a year, so prime rates may change accordingly. A look at the history of the prime rate in the last thirty+ years will show you how much variation can occur. Over the past few years, the Federal Open Market Committee has been increasing the federal funds rate. It was increased once in 2015, once in 2016, three times in 2017, and four times in 2018 . Current projections anticipate the federal funds rate could be up to 3.1% in 2021 .

Why Is the Prime Interest Rate Important?

The prime interest rate impacts all kinds of loans, including interest rates for mortgages, credit cards, auto loans, and personal loans. Typically, banks and lenders will use the prime interest rate as a benchmark for setting interest rates for their customers.

This can be especially relevant to consumers who borrow variable rate loans. Changes in the federal funds rate and prime interest rate can impact variable rate credit cards, adjustable rate mortgages, home equity lines of credit, and more . The interest rate on variable loans are based on these market interest rates and therefore change over time. Variable interest rates, including those on credit cards, are often expressed as the prime rate plus a certain percentage .

Unlike fixed-rate loans, monthly payments on any variable loan could change considerably from month-to-month. This is why fixed-rate loans can be a more desirable alternative than variable loans for some borrowers.

Though rates are largely influenced by the Federal Reserve, borrowers have little control or way of predicting the rates from year to year. Even when the Federal Reserve predicts growth, interest rates can rise due to a variety of factors , causing your monthly bill to rise with it.

Beyond individual borrowers, the prime interest rate also influences the financial market as a whole. A low prime rate makes it easier and less expensive to borrow loans which increases liquidity in the market.

Historically, when the prime rate is low the economy grows, and when the prime rate is high economic growth slows down .

The prime rate isn’t the only benchmark that banks use to inform interest rates. Banks also often use the London Interbank Offer Rate (LIBOR). The LIBOR is the rate that banks charge each other for short-term loans . The federal funds rate, prime interest rate, and LIBOR rates generally fluctuate together . When the three rates are out of synch it can be an indicator of an issue with the financial markets .

Personal Loans with SoFi

An increase in the prime rate and federal funds rate can be an indicator that changes are ahead for consumers . Pay attention to interest rates on personal accounts , especially if they have variable rates, as the federal funds rates and prime rates fluctuate. When those benchmark rates change, it might means adjustments to interest rates are just around the corner.

If you are in need of a personal loan, know that a variable rate loan isn’t the only option. At SoFi, you can borrow a fixed-rate, unsecured personal loan, and complete the application entirely online. A personal loan could also be an option for consolidating credit card debt. It could mean the opportunity to eliminate a variable rate credit card and even potentially decrease the overall interest rate on the debt.

When you borrow a SoFi personal loan, there are no prepayment penalties or origination fees. You’ll also gain access to other member benefits like career counseling and unemployment protection, which could potentially allow you to temporarily pause your payments if you unexpectedly lose your job.

With a personal loan, you’ll have access to the money you need quickly, and depending on your credit score and other personal financial factors, usually at a lower interest rate than most credit cards.

Need to take out a personal loan? Check out SoFi’s personal loans to get money for that future project you’ve been saving for.

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External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
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The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . The umbrella term “SoFi Invest” refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
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 .
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The weather’s heating up, kids are out of school, and you’re thinking about how to spend the next three months until you begin business school. Perhaps you’re sweating at your day job, trying to decide when to give notice, or poring over spreadsheets, stressing about how to pay for graduate school in the fall. You might have plans to travel, intern, or volunteer.

The reality is, there’s no wrong way to get ready for business school. However, there are a few things you could consider and prepare before packing up to head to school in the fall.

Finding an Internship

Nearly half of all incoming business school students say they’re considering changing career paths. If you’re switching career tracks before starting your MBA, a pre-MBA internship might be ideal for you.

A pre-MBA internship is typically a four-to-six-week concentrated internship focused in fields like marketing, venture capital, private equity, or consulting.

An internship could mean getting ahead of your classmates in real life experience, but it also comes with a caveat. These internships might offer pay, however some of them don’t offer a salary . If you’re looking to make some extra dough before tuition bills in the fall, it might be smart to sit tight in your current job.

On the other hand, if you want a leg up and some professional experience in a field you haven’t worked in yet, a pre-MBA internship could provide some direction as to where you want to take your business school degree.

Sharpening Your Skills

Maybe you’re taking a few months off traveling, relaxing, or volunteering before starting your MBA. You can expect school to be rigorous in the fall, and with an internship likely next summer, this might be your only downtime for a while. Taking time off just might be the ticket for you.

However, while you’re chilling poolside or lugging a backpack across Europe, you might want to dedicate a little time to resharpening some skills before school starts. You could take some books along to prep for the first year—you can anticipate a lot of reading in the fall .

While you’re at it, you could grab a few math books or consider an online class to brush up on your quantitative skills . Your fall course load is filled with core curriculum, and if you think your math skills are rusty, it wouldn’t be a bad idea to start reading those textbooks early.

While you’re reading and relaxing, it wouldn’t hurt to squeeze in some networking. Business school is all about connections, and starting to cultivate a network through professional and personal contacts the summer before starting your MBA might be a great way to get ahead.

Quitting Your Job

You might be spending the summer working and possibly sweating about when to give your notice. You might be planning to work through the summer, but you could let your employer know as soon as you can about your plan for departure. Most career experts agree, giving ample notice about your decision to attend business school in the fall gives you a solid exit strategy.

While you’re letting your employer know you’re campus-bound in the fall, the notice doesn’t have to be the traditional two weeks. Instead, you could work with your manager or boss to create a more leisurely exit plan—perhaps lining up a replacement in the process. Since you quit for an MBA, as opposed to leaving for a competitor, there’s no reason your relationship with your current team should end on a negative note.

Banking a couple paychecks could potentially help with grad school expenses, but you might want to allow yourself time to prepare for school in the fall as well. Consider your timeline for relocation, preparation, and maybe a little time to unwind.

Considering the Essentials

No matter what you end up doing the summer before business school, you might want to take time to address how you will pay for your MBA.

Business MBAs can be some of the most expensive programs out there—the average business school student in America graduates with around $70,000 in debt.

Summer could be an opportunity to make some money for savings before starting school, but it’s also a time to review your payment plan. Will you go for federal loans, apply for grants, or take out private student loans?

On top of moving, orientation, and beginning your studies, you may want to take time before the semester starts to familiarize yourself with graduate school loans. While you’ve been through it before during undergrad, taking out loans for graduate school might be a totally different animal in terms of, for example, what financial aid you qualify for and how much you have to take out.

Don’t Take a Break on Your Finances During Summer Break

The summer before business school can be a time of relaxation, learning, preparation, or working—there’s no wrong way to spend it. No matter what you do, you might want to take time to consider and understand how you’re paying for your MBA.

That might mean research on refinancing your undergraduate student loans once you’re done with graduate school. Once you finish b-school and secure a great job, refinancing your grad school loans could be a way to potentially get you a lower interest rate or more favorable loan terms.

Keep in mind that refinancing your federal student loans means losing out on federal loan benefits, like income-driven repayment plans and deferment. So, for example, if you have federal loans from undergrad, and are hoping to defer them while getting your MBA, now might not be the right time to refinance.

However, you may consider refinancing those undergrad loans with your graduate school loans once you finish business school. (That way you’ll only have to worry about paying one loan off, instead of multiple.)

Learn more about SoFi student loan refinancing.

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External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

SoFi Student Loan Refinance
If you are looking to refinance federal student loans, please be aware 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.

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An estimated 95% of Americans own a cellphone, according to Pew Research Center . The vast majority of those little handheld devices now taking over the nation are considered a “smartphone” capable of connecting to the internet and capable of downloading apps.

Though these cellphones have most certainly ruined the dinner table experience forever, they have made many things exponentially easier. And that includes travel.

From planning a trip to packing, translating, and keeping track of your money on the go, cell phones—particularly the apps they can contain—can be a gamechanger. Here are 13 apps to download that can help you craft and take your next perfect vacation.

Planning Apps

App in the Air

If you only have room on your phone for one travel app make it App in the Air . The app acts as a personal travel assistant and keeps every piece of travel information all in one place.

Inside the app, users can store loyalty program information, boarding passes, check out departure times, as well as wait times at security, check-in, and baggage claim. Perhaps best of all, travelers can use the app’s virtual reality to measure their carry-on to ensure it will fit in the overhead compartment.

TripIt

For an alternative travel assistant app try TripIt . In the app, users can store their travel itineraries and documents. Travelers can also have all their reservations, including air and hotel, sent directly to the app so they can easily be found.

Beyond documents, the app also allows users to share their trip information with whoever is picking them up at their airport or train station so they can all stay on the same page.

Skyscanner

Every traveler wants to save money on airfare. And that’s exactly where an app like Skyscanner comes into play. In the app, users search for destinations and dates.

Then, the app does all the heavy lifting by searching thousands of flights to find the cheapest route. If travel dates are flexible it will even suggest the best dates and times to head out on a trip.

Packing Apps

Packing Pro

If overpacking is typically an issue for you, you could try solving the problem with Packing Pro . The app helps users organize their luggage before they set out on their journey by providing users with a checklist—breaking down every item they would need in every category.

With the app, users input their destination along with the predicted weather and any other relevant information, such as if they will have access to a washing machine or if they will need a bathing suit.

Then, the app offers a list to work off of so users can avoid ever overpacking again. It will even remind users if they need to renew their passports and if they need certain vaccines before traveling.

PackPoint

PackPoint is a lot like Packing Pro, only it takes things one step further by telling —rather suggesting — what to pack. Based on the length of your trip, the weather, and the activities travelers are taking part in, the app creates a list of things to put in their bag.

It will also allow users to plug in information such as if they’ll have access to laundry and just how many times you’ll have to wash each item to get the most wear.

Transportation Apps

Uber

Uber is one of the most ubiquitous ride-sharing apps in the world. And that fact makes it a must download app for traveling. On the app, users can hail a ride from the airport to their hotel and everywhere in between.

Uber is also increasing its security measures by sending users push alerts about their driver before they get in the car, making it one of the safest ways to get around a new destination too.

LoungeBuddy

If your travels include a long layover, you could try to mitigate the boredom with LoungeBuddy . The app gives users access to airport lounges around the globe. It even includes photos and a list of amenities users can expect in each space.

The app also explains restrictions, cost of lounge access, and more so you can plan your day in the airport accordingly.

At Your Gate

Nothing’s worse than getting hungry while waiting for your plane. Luckily At Your Gate exists. The app functions like Seamless and GrubHub, and allows users to order anything right to their gate.

And it’s not just food. The app also allows users to order retail products as well. The app is currently only available at a few major airports including JFK’s Terminal 7, but due to its ease of use and high ratings, it wouldn’t be a surprise to see it expand soon.

Language Apps

DuoLingo

Prior to taking an international vacation, it may be wise to learn a bit of the local language. Perhaps one of the easiest ways to learn a few words and phrases is with the DuoLingo app. The app comes preloaded with lessons on hundreds of different languages.

The app allows users to learn new words in minutes and reinforces the learnings through bite-sized follow-ups. The app also allows users to earn points during their lessons, challenge friends, and even shows users just how fluent they’ve become after each lesson.

Google Translate

If you haven’t had time to learn a new language by your next trip that’s okay, because Google Translate exists. The app can translate more than 100 languages when you have an internet connection, as well as several dozen languages in offline mode.

Beyond voice translation, the app also comes with an instant camera translation that allows users to snap a photo of street signs, menus, and more and have the text instantly translated. Users can also save frequent or favorite translations in the app to make getting around even easier.

Money Apps

SoFi Checking and Savings

Wherever you go, you can bring all your finances with you with the SoFi Checking and Savings® app. With SoFi Checking and Savings, users can have access to all their finances in one spot thanks to the mobile-first checking and savings account.

And, with the checking and savings account, users can pay bills, deposit checks, and send friends and family money, all through the app.

And with SoFi Checking and Savings, withdrawing cash is fee-free at 55,000+ ATMs worldwide.

XE Currency

Not sure how much something costs in a different country? Try the XE Currency app. The app quickly provides users with up-to-the-minute currency rates so you always know what you’re spending.

It also allows users to store and view the currency exchanges offline as well. This way, you never have to do currency exchange rates in your head again.

And One App For After Your Trip

Been

Now that you’re on the road it’s time to keep track of your travels. One of the most fun apps to download for travelers is Been . The app is simple and straightforward.

It allows you to check off which countries you’ve visited and which states you’ve been to. Download the app and start tracking your travels so you’re inspired to go on your next adventure with all your new apps too.

Heading out into the world? Download the SoFi Checking and Savings app to ensure your money is always just one click away.

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SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2022 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
SoFi Money® is a cash management account, which is a brokerage product, offered by SoFi Securities LLC, member
FINRA / SIPC . SoFi Securities LLC is an affiliate of SoFi Bank, N.A. SoFi Money Debit Card issued by The Bancorp Bank.
SoFi has partnered with Allpoint to provide consumers with ATM access at any of the 55,000+ ATMs within the Allpoint network. Consumers will not be charged a fee when using an in-network ATM, however, third party fees incurred when using out-of-network ATMs are not subject to reimbursement. SoFi’s ATM policies are subject to change at our discretion at any time.
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No one plans for their student loans to outlive them. We all expect to have paid off loans for college or graduate school long before middle age, let alone within our lifetimes. Most people prefer not to think about the grim topic of death at all.

But all of us should ask the question: “What happens to my student loans if I die?” Adults age 60 and over are the fastest-growing group of student loan borrowers, and 2.8 million Americans in that age group have at least one student loan. And the reality is, regardless of age, none of us can be certain about when our lives will come to an end.

Not knowing what happens to student loans when you die can cause you a lot of anxiety. Will the loan be wiped away? Will the burden fall on your parents or spouse? Will your estate be responsible? The answers can be complex and depend on what kinds of loans you have.

Knowing what happens to your student loans when you die can bring peace of mind to you and your family. It can also help you plan for that eventuality, perhaps by refinancing, saving, or taking out insurance to account for any costs your family could be left with. Regardless of the outcome, knowing the facts is a key jumping off point to taking control of your student debt. Here’s what can happen to your loans in a variety of scenarios.

(And before we dive in, we just want to say that this is an incredibly complex topic that we’re going to try our best to break down. But ultimately, this info is general in nature and does not take into account your specific objectives, financial situation, and needs; it should not be considered advice. SoFi always recommends that you speak to a professional about your unique situation.)

What Happens to Federal Student Loans?

If you took out student loans from the federal government, these will be discharged when you die . If a parent took out a PLUS loan for you, this will also be discharged if you die or if your parent dies. When a loan is discharged, the balance becomes zero and the government won’t try to collect on the loan. Note that at one point the Internal Revenue Service considered waived loans to be taxable in most cases.

Similarly, on a Parent PLUS Loan, if the student dies, the eliminated debt would have counted as part of the parent’s taxable income, increasing their tax obligations that year. However, that is no longer the case, as of the start of 2018. There is currently no tax burden once loans are discharged as a result of death. However, this is only true until 2025, at which point this tax code expires.

Family or friends would need to provide your loan servicer with documentation to confirm the death, usually an original or copy of your death certificate. They can call your loan servicer to ask about the specific requirements.

You’ll probably want to make sure that loved ones have the information they need now—at a minimum, the name of your loan servicer and, ideally, your loan ID numbers and your Social Security number. The bottom line is: If you have any kind of federal student loan, you don’t need to worry about your relatives being burdened with the debt if you pass away.

What Happens to Private Student Loans?

If you have private student loans, the answer is a bit murkier. Some private lenders will cancel your loans upon your death, but it typically depends on the type of loan and the laws in your state.

Make sure to read your loan agreement very carefully to see what protections your lender offers.

In the case that your lender doesn’t discharge your loans after death, the lender would first try to collect the money from your estate. If you don’t have an estate, they would turn to your student loan cosigner, if you have one.

If there isn’t one, then the lender would likely try to collect from your spouse. Whether your spouse would actually be liable depends on the state in which you live. If you live in a community property state, such as California, Texas, or Washington, and took out the student loan while you were married, your spouse could be responsible.

What Happens If You Have a Cosigner?

Federal student loans almost never involve a cosigner, but private loans often do (in order to improve a borrower’s access to credit or to qualify for better terms). According to the Consumer Finance Protection Bureau, more than 90% of private student loans were taken out with a cosigner in the 2016 to 2017 academic year, including 93% of loans to undergraduates and 60% of loans to graduate students.

A cosigner has agreed to pay the debt if you default, so they’re just as responsible for the loan as you are. If you die, a private lender will likely seek to collect payment from the cosigner. Some lenders may waive the remaining debt if the primary borrower (student) dies. (If you have a loan with a cosigner and want to take this burden off of them, you could consider trying to refinance the loan in only your name. This could be an option if your credit, income, and employment history have improved since you took out the loan, and you can now qualify on your own.)

It’s worth asking what happens if the situation is reversed: What if your cosigner dies? It used to be that, in some cases, your loan would go into “student loan auto-default,” meaning the lender would immediately require you to pay the full amount of the remaining loan, even if you’ve been making payments regularly until then.

However, following a 2018 amendment to the Truth in Lending Act, “auto-defaults” are no longer legal . This means that if your cosigner dies (or files for bankruptcy), your loan would not automatically go into default or wind up on an accelerated payoff timeline.

What Can You Do to Protect Loved Ones?

To ensure that your spouse or cosigner doesn’t end up with a large debt burden in the event of your death, one step you can take is to pay off your student loans faster.

You can do this by increasing the amount you pay every month, going above your minimum monthly payment, or shortening the payment term through refinancing, which could increase your monthly payment, but reduce the amount of interest you pay over the life of the loan and help you pay it off more quickly. Another option is to build a savings cushion that can be put toward your debt if you die.

How Student Loan Refinancing Can Help

Refinancing your student loans can be a good way to speed up repayment, leaving less of a potential obligation behind in case you die. When you refinance, your existing federal and private loans get combined into a single new loan. Particularly if you have a strong credit and employment history (among other factors), you may be able to qualify for a lower interest rate than on your current loans—or a shorter term to help pay down your loans faster.

With SoFi, you’ll have complimentary access to SoFi’s career coaches and wealth advisors. If you want to pay off your loans faster and protect your loved ones, look into whether refinancing can help.

Want to see if you can pay off your student loans faster? Consider refinancing with SoFi.

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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.
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