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Using an Offer Letter as Proof of Income for Graduate Student Loans

Typically, when you apply for a loan, the lender wants proof of income, aka proof that you can pay them back. For graduate students, this can pose a catch-22 since they are going to school in order to become gainfully employed. The customary workaround: having a cosigner on the private graduate student loan.

But some graduate students, perhaps MBA, law school, or computer science students about to start their final years, may have offer letters of employment for when they graduate. Wouldn’t it be great if they could submit those offer letters as proof of income — a practice used in mortgage lending?

How Common Is the Practice of Using an Offer Letter as Proof of Income?

Certainly, accepting offer letters as part of graduate students’ applications is not standard. Luckily, for graduate private student loans, SoFi now accepts an offer letter as a form of income for eligible borrowers.

When a loan applicant can submit an offer letter as proof of income, a cosigner may no longer be needed. Read on for more ways an offer letter may strengthen the loan application and empower the funding process for the student.

Using an Offer Letter as Proof of Income

Given how much a student likely already has on their plate, chances are they want the student loan application process to be as straightforward as possible. Needing to supply an additional document might sound like an extra hassle, but there can be plenty of benefits to using a job offer letter as proof of income on a student loan application.

Qualifying Without a Cosigner

A student loan cosigner is a second person who signs a loan along with the borrower and who is therefore also responsible for the debt should the borrower fail to repay. In the case of student loans, cosigners are often parents or guardians, though other relatives and even friends can be cosigners, as well.

In many cases, it can be hard for graduate students to qualify for additional student loans without a cosigner, particularly if they’re young and newly graduated from college — which probably means their credit histories are short and their income is limited.

Recommended: 10 Strategies for Building Credit Over Time

Because a job offer letter demonstrates the applicant’s individual earning potential, using one in a student loan application may empower students to be able to qualify without a cosigner (if the loan company doesn’t expressly require one).

Increasing Approval Chances

Even if a graduate school student loan applicant does still elect to have a cosigner, using an offer letter as proof of income may help increase the chances of approval. When it comes to borrowing large amounts of educational funding, every little bit of qualification can help.

Potentially Qualifying for a More Favorable Rate

With or without a cosigner, additional income validation in the form of a job offer letter may be able to qualify you for a more favorable interest rate, which may potentially mean savings over time. It is important to remember that this is just one of the many factors that lenders take into account when determining what rate you qualify for.

What’s the Process of Using a Job Offer Letter?

To use a job offer letter as part of your student loan application package, the applicant will need to include the letter in their application materials.

Depending on the loan company’s process, the letter may be uploaded directly online or a copy included in a mailed-in application. Offer letters typically include a start date and pre-tax pay rate so the lender can accurately assess how the offer augments the application.

Funding a Graduate Education with SoFi? Your Offer Letter Could Help

Students may already know that SoFi offers a range of private student loans for undergraduates, graduates, and parents. The loans carry competitive interest rates and are free of origination, late, or insufficient funds fees, and they’re getting even better.

SoFi now allows graduate, law, and MBA students to use a job offer letter as proof of income in addition to, or instead of, adding a cosigner to their application.

While students should exhaust all their federal student aid options before considering a private student loan, sometimes additional assistance is necessary to handle the expense of graduate or professional graduate programs.

SoFi members can also qualify for perks like rate discounts on additional loans, career services, financial advisors, and more. With competitive rates and multiple repayment options, SoFi Private Student Graduate Loans might be just the thing for you and your budget.

See if you prequalify for a private graduate loan with SoFi in just two minutes.


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

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.

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.
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4 Tips for Surviving Finals Week

There’s almost nothing as ominous as the phrase “finals week.” Cue the thoughts of cramming, sleep deprivation, and high anxiety. The stress the two words can induce is almost universal among college students.

However, students can both survive and succeed during finals week as long as they prepare. Here are four tips to help students get ready for finals week.

1. Get Organized

Getting organized is a great way to feel in control before finals begin. College finals week doesn’t have to blindside students, forcing them into all-nighters and sleepovers in the library. There are a couple of things students can do to get set up for finals week.

Memorize Your Finals Schedule

The dates for finals week are usually available from the beginning of a semester. This may vary by school, but students can sometimes find their finals information in their syllabus.

Memorizing the schedule and writing it down will ensure that students don’t forget to study for any exams and can budget enough time for each test.

Make a Study Plan

Once students have their finals schedule memorized, they can start mapping out their study strategy. Students can base their study tips on which finals will require the most studying and the dates they occur.

It is recommended that students avoid long cram sessions. Studying ahead of time in shorter increments helps to retain information. This is why mapping out a study plan ahead of time can be helpful.

When making a plan, there are different strategies students can use. They can create a schedule based on the difficulty level of the tests, choosing to set aside more time to study for the finals that will be the most challenging for them.

They can also plan their schedule based on the order of their finals, saving more time later on to study for the last exams.

Having a plan can help students avoid cramming, spending too much time studying for one final over another, or forgetting to study for one altogether.

Recommended: Do Grades Affect Student Loans?

2. Keep Your Body Healthy

As tempting as it is to stay in the library 24/7 living on ramen and coffee, staying physically healthy during finals week is important for bringing home those good grades.

Eating a balanced diet — yes, that means fruits and veggies too, before and during finals week — can help students stay focused and avoid getting sick during finals.

Drinking water is also a good idea when plotting to ace those finals. Dehydration can have many negative effects, like tiredness, headaches, reduced alertness, and diminished concentration, which could affect test performance. Even drinking water during an exam can lead to better performance.

Another important piece of staying healthy is getting enough sleep. It’s common to see students pulling all-nighters in the library during finals week, but a lack of sleep can result in a worse memory and therefore, an inability to remember what has been studied. Missing out on a full night’s sleep can be detrimental to students’ ability to pass their exams.

Exercising is also often deprioritized during finals week. Students are so focused on studying that it’s easy to skip that 30-minute workout. Exercise, though, needs to find a place in a hectic schedule because it will benefit a student during this stressful time. Exercise can both lower stress and maintain high-level brain functioning, leading to a better chance of crushing those exams.

3. Keep Your Mind Healthy

Maintaining good mental health during the school year may already be a challenge, but especially during finals week it’s important to pay attention to and take care of mental health.

Even students who don’t regularly have anxiety may experience it during finals week. There are many calming techniques available to ease anxiety, and each student should see what feels best. Here are a few techniques they can try.

•   Breathing. There are tons of breathing techniques out there that can help with anxiety or stress. Students should look up a few simple ones and see what works best for them.

•   Grounding. This is a technique where students focus on their senses, naming five things they can see, four things they can feel, three things they can hear, two things they can smell, and one thing they can taste. Doing this can reduce anxiety or panic and help students stay focused.

•   Meditation. Taking up a daily meditation practice before studying and before exams start could help a person stay calm during stressful events. There are lots of meditation apps available as well as guided meditations online.

Another piece of maintaining mental health during finals week is taking breaks. Breaks are beneficial both for studying ability and mental health. Taking a break to do something enjoyable can decrease stress and keep a student’s mind in a good place.

Anyone experiencing high levels of anxiety can reach out to school counselors and see about making an appointment. Students may also benefit from talking about their stress with friends, family members, or professors. Leaning on a social support network during this stressful time may alleviate some of the nervousness that comes with finals week.

Lastly, students should ask for help if they need it. Most colleges have mental health services on campus.

4. Team Up

Students should remember that they’re not going through finals alone. They have a whole class of students struggling right alongside them. This can be a huge asset come finals week.

Instead of studying alone, students can form study groups.Study groups can help students be better prepared for finals. There may be some in the class who understand the material better and can teach it to others.

This helps both the student struggling and the student teaching. The struggling student gets new explanations for tricky material that may be easier to understand. The teaching student solidifies the material in their memory even more by explaining it to others.

Being in a study group can also help with accountability, so students are less likely to slack off and stop studying.

Those who need further support during finals week can visit their professors during office hours or consider getting a tutor. Professors want to see their students succeed, and though they can’t give answers to exam questions, they can help explain parts of the material that someone is struggling with.

No Pay, No Gain

Wait, so college students are paying to suffer through finals week? Technically, yes, because college costs money, of course, and even if the nightmare of finals week is still far off, it’s never too soon for students to start sorting out how they’re going to finance their entire college education.

There’s more than one resource available to students when it comes to funding college expenses. Here are a few, broken down in an easy-to-understand way.

Federal Aid

Students already in college might be familiar with the Free Application for Federal Student Aid, commonly known as the FAFSA.® Eligibility for undergraduates is usually based on parents’ income. Federal aid can come in the form of grants or loans. Grants usually don’t need to be repaid, but loans do.

Federal loans usually come with benefits that private loans don’t, such as income-driven repayments and lower fixed rates. It’s recommended that if students need to take out loans, they use federal loans before turning to private loans.

Is the FAFSA® one and done? Not at all. You must complete the application every year that you attend school if you hope to gain federal aid, and on time.

Free Money

The world of scholarships is vast. Though it can take some digging to find scholarships that students are eligible for, it’s money that usually doesn’t need to be repaid.

Scholarships can be need based or merit based, with the eligibility requirements different for each one. Scholarships come from colleges, corporations, local community organizations, religious organizations, and more.

Students might want to check if their college has any information available on scholarships. Usually, schools have a scholarship office or information about scholarships at their financial aid office.

Another Option

Private student loans are another way to help fund the college experience, when federal aid doesn’t cover all the bases, a student doesn’t qualify for federal aid, or someone has reached a limit on federal direct loans.

The eligibility for private student loans is usually based on a student’s income and credit history, or that of a cosigner. Each lender will have its own terms, including the interest rate and repayment methods, which merit research.

SoFi offers private student loans with attractive fixed or variable rates, no fees, and a quick online application.

See if you prequalify with SoFi in just two minutes.


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

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.

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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Finding the Right College for Your Child

College is a time for students to learn and grow, both academically and in their personal development. As a parent, you want what’s best for your child, and that includes helping them pick the right college. But finding the right school for your child may require some time and research, and you’ll likely want to make sure you leave the final decision up to your child.

As you consider various factors, it’s important to zero in on the ones that matter the most for your student.

How to Find the Right College for Your Child

Depending on how much time you have to invest in the process, here are some tips that can help you and your child pick the right college for them.

1. Make a List

Start by creating a broad list of colleges for which you and your child might be a good fit. Consider both local and out-of-state colleges, and don’t be afraid to let your student dream big.

Every student is different, so it’s worth curating a diverse list of options to consider. Typically, various rules of thumb suggest students apply to a mix of “target,” “reach,” and “safety” schools. This could be a good way to organize your child’s initial list of schools.

As you work through the other steps in the process and learn more about each school, you can refine the list.

2. Talk About What They Want to Study

Your high schooler may not yet know what they want to be when they grow up, but they may already have an idea of what direction they want to go. It may be worth having an initial conversation with your child about choosing a major.

Once you have an idea of what they’re interested in, you can look at the colleges on your child’s list that excel in those areas of study. If there aren’t many, you could always consider adding more.

Recommended: The Most Rewarding Job in America

3. Consider the Cost

A college education can get expensive, and some universities charge much more than others. If your child already has an idea of which schools they want to apply for or have already received their admissions letters, a key step is to dig into the cost of attendance for each school.

This step is important regardless of whether you’re planning to help your child cover the cost of their education. Finding a college with good value can reduce how much your student may need to borrow in student loans during their stay.

The cost of attendance isn’t the only important cost factor, however. If your child has already received an admission letter, consider whether there’s a financial aid package included, including grants and scholarships. If there is, calculate the total amount you or your child would have to pay after applying that financial aid to get the net price.

4. Talk About Location

Discuss with your child about whether they would prefer a college close to home or far away. Each person is different in this regard, and your teen’s desires on the matter are important.

That said, sending a child off to college, especially out-of-state, can be a stressful experience for parents. It’s normal to feel anxious about this milestone in your child’s life, but avoid allowing your anxiety to dictate your role in the process.

Explore information about student loans,
grants, and scholarships per state.


5. Learn About the Environment

Finding the right college for your child isn’t just about the school itself; it’s also about the environment the school provides. This is where it can be worth making a trip to visit college campuses with your child to get a feel of the place — or at least to take virtual tours.

It may also be worthwhile to look into some of the extracurricular activities the schools provide. If your child is athletic, for instance, ask about intramural sports. If they want to study abroad, look into the quality of each school’s international programs.

Another factor to consider that can affect your child’s experience is classroom size. If you think your child may need more attention, a school where every class is in an auditorium with hundreds of other students may not be the right one.

6. Give Your Child Time

Picking a college may be easy for some students, but it can take time for others. If your teen is having a hard time, it can be a fine line between supporting them and annoying them. Finding the right balance can be tricky.

As a happy medium, consider choosing a night each week to discuss college plans with your teen. Ask about their thought process and offer help if they’re feeling stuck.

It can be frustrating to sit back and watch your child struggle, but allowing them to make the decision for themselves can help them develop the independence they’ll need in the coming months and years.

7. Be Supportive

No matter what your child decides, they need your support more than anything else. Remember that you’re finding the right college for your child, not for you.

And keep in mind that your child may choose to transfer at some point in the future if they decide the school is no longer a good fit.

Regardless of what happens, your support can give them the confidence they need to make their college experience a good one.

Financing Your Child’s College

Once your child has picked a college, talk about how they’re going to finance their education. If you’ve managed to set money aside in a 529 Plan or can help with your current income and savings, discuss the numbers and whether your teen will need to pick up some of the slack.

Also, talk about student loans and how to use them wisely, as well as how to reduce how much they’ll need to borrow. Ideas include applying for scholarships and grants, working part-time, and borrowing only what they need.

Recommended: Scholarship Search Tool

Other options to look into include federal Parent PLUS Loans, private parent student loans, or private undergraduate student loans to help fund their education. If all federal aid options have been exhausted, SoFi offers no-fee private student loans to help parents and students pay for school.

Prequalify for a private student loan with SoFi in just two minutes.


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

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.

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 Many College Students Are in Debt?

American students and their parents continue to take out student loans to pay for their undergraduate and graduate degrees.

People who are attending college are paying for tuition, room and board, books, and other necessities by taking out student loans or using credit cards.

Paying for college has become more expensive as tuition costs have continued to rise each year. For the 2022-2023 academic year, the tuition for full-time in-state students attending public colleges and universities was $10,950, according to the College Board. Tuition at private colleges and universities for the 2022-2023 academic year was $39,400.

The average federal student loan debt per person in 2023 is $37,338. Private student loan debt is almost $55,000 per borrower.

Americans now owe over $1.6 trillion in student loans. More than 43 million people, both graduates and their parents, have amassed a large amount of debt to pay for higher education.

Paying Down Student Debt Faster

Borrowers can maximize their financial resources and accelerate their repayment schedule in a few different ways.

Some options might include making extra payments by creating a budget, cutting expenses, getting a part-time gig, paying down other debt, and refinancing student loans.

Budgeting Effectively

Creating a budget can help borrowers see and understand all their expenses. A budget could make someone more aware of how much they are spending on eating out or entertainment each month.

Being able to refer to a budget can come in handy when you’re paying bills each month. There are plenty of options to choose from when it comes to budgeting and tracking spending.

After you have created a budget, examine your monthly expenses. One way to do this is to look at your expenses by different categories, such as bills, daily expenses such as parking, necessities such as groceries, and non-essential items such as entertainment.

Going through each category can help a consumer decide what is a priority. It can also help remind you of expenses you’re paying each month, but not using often such as a streaming movie or TV service.

Consider negotiating with the service provider, such as an internet or cable company, to see if there are less expensive options or if they are offering special deals currently.

Making Extra Payments

Making extra payments whenever borrowers can afford can help speed up the repayment process.

Neither federal or private student loans have prepayment penalties, which means borrowers won’t be penalized for making extra payments or paying their loan off ahead of schedule.

When making over payments, check in with the loan servicer to confirm how it will be applied to the loan or loans. For example, a borrower with multiple loans may choose to spread the extra payments evenly among each loan. Others may choose to concentrate on the loan with the highest balance or the highest interest rate.

Another note, lenders may first apply overpayments to the interest accrued on the loan. Borrowers may have to request the extra payment be applied to the principal balance of the loan. The important thing is to be sure you understand exactly where the payment is going.

Focusing on High Interest Debt

When it comes to students and debt, sometimes it’s more than just student loans. Paying down other debt, such as credit cards with higher interest rates or personal loans, can also lower your overall debt.

While some people prefer to pay off their debt with the lowest balance, other people prefer to start tackling the one with the highest interest rate.

Here are some ideas that could help someone pay off their credit cards or personal loans sooner.

•   Making more than the minimum payment. Even an extra $25 or $50 a month adds up.

•   Contacting the credit card company and asking for a lower interest rate.

•   Using automatic payments to avoid missing a payment and incurring a late fee.

•   Stopping using the credit card for additional purchases.

•   Obtaining another credit card with a lower interest rate and transferring all or a portion of the balance.

Some lenders may charge a prepayment penalty for some types of loans or credit, so double check the terms to be sure.

Getting a Second Job or Side Hustle

One way to help pay down student loans faster is to obtain a second part-time job. The additional income from the second job could go towards extra payments on the loan.

Finding a second job could be accomplished by asking your friends or co-workers for referrals. They might know of a small business or person who needs a helping hand or temporary work on a short-term project.

Depending on the gig, some of the work could be completed online or during weekends.

Checking job boards, social media, and with your current network could net you some temporary gigs such as babysitting, pet sitting dogs or cats, or running errands for a professional.

Another strategy is to sell any unused items that are sitting around in your home. Cleaning out your closet or garage could help people come up with some extra income that can be used to make an extra payment or two.

Selling musical instruments, electronics, clothing, or shoes online or at a resale shop is one way to sell the items quickly. Social media is another way to sell your unwanted guitar or electronic tablet that is just collecting dust.

Recommended: 23 Ways to Make Extra Income From Home

Making Lump Sum Payments

Sometimes, making consistent extra payments on a loan isn’t an option. In that case, consider making a lump sum payment whenever you get a larger amount of money from a tax refund, birthday gift, or bonus at work.

Apply all or a portion of the extra money to a payment. Making extra payments applied to the principal can help reduce the amount of interest paid in the long term.

Refinancing Student Loans

Making changes to your budget, slashing your expenses, and getting another gig could help you pay down your student loans faster. Focus on the improvements you have made and create both short-term and longer term financial goals. Refinancing is another option that could potentially help a borrower speed up their repayment.

Student loan refinancing could help qualified borrowers secure a lower interest rate, which also means that more of the money paid each month will go towards the amount that was originally borrowed — the principal value.

This could help students and their parents finish paying off their student loans sooner. A lower interest rate could also reduce the amount of money spent in interest over the life of the loan.

Refinancing can also help make monthly payments more affordable, which could be helpful to people with a tight budget.

However, getting a lower monthly payment when refinancing could be a result of extending the repayment term, which would ultimately mean the loan costs more in the long run.

Refinancing also allows borrowers with multiple loans to combine them into a single loan. This can help streamline the repayment process, since the borrower will be repaying a single loan with a single lender, instead of making multiple payments each month, sometimes to different lenders.

A student loan refinancing calculator can help give you an idea of the amount of your new monthly payments. Any extra money saved each month could be used to pay for other debt such as credit cards or towards your savings for an emergency, a down payment for a car or house, or other goals such as a vacation.

SoFi gives people the option to refinance both federal and private loans. Before you refinance your federal student loans, consider whether keeping the repayment benefits that they offer, such as forgiveness programs or income-driven repayment plans, could be useful to you in the future. When you refinance with a private lender like SoFi, those benefits are no longer available.

The application process at SoFi can be completed easily online and there are absolutely no hidden fees.

Find out if you prequalify to refinance with SoFi, and at what rate, in just a few 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.


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.

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

If advice for paying off student loans were as simple as “Just keep paying those monthly payments,” over 43 million borrowers would have no concerns about wiping away more than $1.7 trillion in student loan debt.

But of course, many do stress about it and wonder how they can pay off their college loans. It’s best to first figure out exactly what you owe and what your interest rates are. From there, you can come up with a game plan to get your student loan debt under control.

Tips to Pay off College Loans

1. Set a Budget

Rather than feeling helpless, it’s better to remember that the path to paying off college loans is, at its core, about making a budget and sticking with it.

It’s best to resist the urge to momentarily feel better through retail therapy. If you do happen to slip up with spending or are caught unprepared for a bill, though, realize that living within your means is a challenge for many adults and learning from your mistakes is better than fixating on them.

The important thing is to create a budget you can actually follow. Give yourself enough flexibility that you’ll be able to stick to your goals and spend your money on what you really want to spend it on.

Recommended: Budgeting and Spending App to Get Your Finances Under Control

2. Pay More than the Minimum

There’s more to paying off college loans than paying the lowest amount required every month. A big reason to pay more than the minimum each month is that student loan repayment is structured around amortization, which is where a portion of your fixed monthly payment goes to the costs associated with interest and another portion goes to reducing your loan balance.

With amortization loans, you typically pay more in interest than principal at the beginning and the ratio gradually reverses as you keep paying your loan. Paying more than the minimum monthly payment means you can accelerate the reduction of the total amount you owe rather than covering the interest.

One plan of attack is to consider signing up for automatic payments. You can customize the payment amount to be withdrawn on its own, and there can be a discount for doing so. If you have a Direct Loan, you can get an interest rate reduction for participating in automatic debits. (As a side note, many federal and private student loan servicers offer a discount for enrolling in autopay, so it can’t hurt to ask and get that discount, if it’s available to you.)

One final tip: Try to get in touch with your lender before you make additional payments so you can verify that your extra cash is going toward paying down the loan principal.

3. Refinance Your Student Loans

If it ever reaches a point where making real progress on repaying your loans feels nearly impossible, and income-driven repayment and forgiveness options either don’t apply or aren’t the right fit, then refinancing with a private lender might be a good option.

When you refinance federal and/or private student loans, you’re given a new — ideally, better — interest rate on a single new private loan. A lower rate translates to total interest savings over the life of the loan. Further, you may be able to lower your monthly payments with a longer term or pay your loan off faster (with higher monthly payments) if you decide to shorten your repayment term.

Recommended: Student Loan Refinancing Calculator

Don’t forget: Refinancing federal student loans with a private lender means you’re no longer eligible for federal repayment programs, forbearance, loan forgiveness programs, and other protections and benefits extended to federal student loan borrowers.

4. Apply for Forbearance or Deferment

If you’re struggling with your loan payments, it might be time to grit down, pick up the phone, and call the loan servicer. Quite a few banks and lenders have forbearance and deferment programs, although they are mostly dependent on the customer reaching out and asking for help.

Federal student loans also offer student loan forbearance and deferment options. Forbearance can allow for decreased or delayed payments for a specific period of time, often up to 12 months.

Some lenders may offer to reduce the interest rate being charged on the debt, but there are no federal guidelines for terms for forbearance agreements across all industries (with the exception of federal student loans).

On the surface, this sounds positive, but be forewarned that these options can significantly affect credit history and credit scores. The effects on credit depend on the type of loan and the lender, and whether forbearance or other payment or rate adjustments are available or chosen.

Here’s to Stability

You’ve paid down whatever you’ve managed so far on your college loans, so what are your plans now? Are you happy with your current interest rates? Do you like your lender and/or servicer?

As you get more established with a financial track record and the start of a career, know that refinancing or consolidating can help either pay things down more quickly or help secure terms that fit where you are in life right now — and where you’d like to be in the near future.

If you’re thinking about refinancing, consider SoFi. SoFi offers a fast, easy online application, competitive rates, and no origination fees.

Prequalify for a refinance loan with SoFi today.


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.


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.

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.
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