Options for When You Can’t Afford Your Child’s College

These days, college is a pricey proposition. The average annual cost of attendance for a student living on campus at a public four-year college is $26,027 (in state) and $27,091 (out of state). The average cost of attending a private, nonprofit university is $55,840 per year.

If you’re worried about how you’ll cover the cost of sending your child to college, know that you’re not alone. Also know that you (and your student) have a number of funding options, including grants, scholarships, work-study, and student loans. Read on for tips on how to pay for college when your savings isn’t enough.

Steps to Take if You Can’t Afford College

Here’s a look at five things you can do to make sending your child to college more affordable.

Complete the FAFSA

The first thing every college-bound student is encouraged to do is fill out the Free Application for Federal Student Aid (FAFSA®). This automatically gives your student access to several types of financial aid, including grants, work-study, and federal student loans.

Even if you don’t think you’ll be eligible for federal student financial aid, it’s still a good idea to complete the FAFSA. Colleges often use the information from the form to determine eligibility for their own student financial aid, including merit aid.

Federal student financial aid can come in several forms:

•   Grants A grant is a form of financial aid that typically does not have to be repaid. Many grants, such as the Pell Grant, are awarded based on financial need. However, some are based on the student’s field of study, such as the Teacher Education Assistance for College and Higher Education (TEACH) Grant.

•   Work-Study Eligibility for Federal Work-Study is determined by information provided on the student’s FAFSA. Not all schools participate in the program, so check with a school’s financial aid office to see if it does. Work-study jobs can be on or off campus, and an emphasis is placed on the student’s course of study when possible.

•   Loans Federal student loan eligibility is another type of student aid determined by the FAFSA. There are three basic types of federal student loans : Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans. Direct Subsidized Loans are for eligible undergraduate students who have financial need. Direct Unsubsidized Loans are for eligible undergraduate, graduate, and professional students, but eligibility is not based on financial need. Direct PLUS Loans are for graduate or professional students, or parents of dependent undergraduate students, and eligibility is not based on need.



💡 Quick Tip: You can fund your education with a low-rate, no-fee private student loan that covers all school-certified costs.

Speak With the Financial Aid Office

Getting comfortable with the school’s financial aid office staff is a good thing. The office staff can be a font of knowledge for parents and students navigating the complex world of student financial aid. Not only can they help you understand what federal student financial aid you might be eligible for, they can also let you know what student aid is available through that particular school.

Financial aid office staff may also be able to point you toward other offices or departments on campus that may have job opportunities for students, or that offer emergency services for current students in the form of food or housing assistance.

Recommended: What Kind of Emergency Funding Is Available for College Students?

Let Your Student Take on a Part-time Job

Asking your child to work part-time while they are in school can help offset expenses. If Federal Work-Study isn’t a part of their financial aid package, they can still look for a job on or off campus to earn some money to put toward books and living expenses. Learning how to manage responsibilities is also an excellent out-of-the-classroom lesson.

Some ideas for jobs that may offer part-time, flexible hours for students include:

•   Babysitter or nanny

•   Coffee shop barista

•   Retail sales

•   Restaurant server or cook

•   Gym/fitness associate

Some part-time jobs might offer perks in addition to pay. Food service jobs might come with a discount on food during a shift, retail sales associates might get a discount on the store’s products, and working in a gym might come with a free gym membership. A visit to the campus career services office is often a good place to start looking for a part-time job.

Encourage a Gap Year

It’s not at all uncommon for a student to take a gap year between high school and college. Some students might not feel ready for college right out of high school. Others might want to have a specific experience, like travel or working in a specific field. Gap years can also allow students to earn money to pay for their future college expenses.

AmeriCorps is a federal program that pairs individuals with organizations that have a need. Volunteers can work in a variety of places and situations, from teaching to disaster relief to environmental stewardship, and more. Some AmeriCorps programs offer stipends, housing, or educational benefits like federal student loan deferment and forbearance, or a monetary award that can be used to pay for certain educational expenses.

Taking a gap year can give both you and your student time to build savings. It can also give your child an opportunity to gain work experience, or explore different professions. Of course, there can be drawbacks to taking a break from academics. It might be difficult to get back into the flow of studying after a year without that type of structure. Taking a year off without any structure or purpose might leave your child without a sense of accomplishment, so it’s generally a good idea to have a plan for how a gap year will be spent.

Consider a Less-Expensive College

Going to an in-state school vs. an out-of-state or private college is one obvious way to cut costs. Here are some other options to consider.

•   Community college Community colleges often charge much less tuition than their four-year counterparts. Choosing a community college close to home can also save on room and board. Your student might be able to start at a community college, then transfer to the college of their choice to complete their bachelor’s degree.

•   Tuition-free colleges There are some colleges that don’t charge tuition at all. Students at no-tuition schools may be required to maintain a certain grade point average, live in a certain region, or participate in a student work program. For example, service academies associated with branches of the U.S. military offer free tuition in exchange for a certain number of years of military enlistment.

•   Professional school Another option might be to bypass a traditional college degree for training in a specific career field instead. Training for non-degreed positions might last anywhere from a few months to a few years, depending on the job. For example, commercial airline pilots aren’t required to have a bachelor’s degree, but they are required to have a pilot’s license and pass exams specific to the airline they work for. Jobs in the construction industry generally don’t require a bachelor’s degree, either, but might have apprenticeship programs or on-the-job training lasting several years.



💡 Quick Tip: Would-be borrowers will want to understand the different types of student loans that are available: private student loans, federal Direct Subsidized and Unsubsidized loans, Direct PLUS loans, and more.

The Takeaway

Paying for college is a major expense, no matter how you look at it. Fortunately, there are a number of ways to cover the cost of higher education, including scholarships, grants, work-study, part-time jobs, and federal student loans.

If those options aren’t enough, you can also look into private student loans. These are available through banks, credit unions, and online lenders. Loan amounts vary but you can typically borrow up the full cost of attendance at your child’s school. Interest rates are set by individual lenders. Generally, students (or their parent cosigners) with excellent credit qualify for the lowest rates.

Just keep in mind that private loans don’t come with the same protections, like income-based repayment plans and forgiveness programs, that are offered by federal student loans.

If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.


Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.


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-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.


Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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

Third-Party Brand Mentions: No brands, 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.

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Are Student Loans Worth It?

If you’re thinking about taking out student loans to pay for college, you’re in good company: Nearly two-thirds of college graduates leave school with debt. Like most loans, student loans charge interest, which is the cost of borrowing money from a lender. Whether you take out federal or private student loans, you’ll end up paying back more than your original borrowed.

Is it worth it?

The answer depends on your degree, major, and the type and size of your debt. Read on to learn more about whether the current cost of college is worth it, different ways to pay for school, and when it makes sense to take out student loans.

College Costs Vary By School

It’s no secret that college costs have gone up over the years, causing more students to take on debt as a means to afford a college education. Indeed, student debt has more than doubled over the last two decades. As of March 2023, about 44 million U.S. borrowers collectively owed more than $1.7 trillion in federal and private student loans.

But not all schools cost the same amount. In fact, some colleges cost considerably less than others. According to Educationdata.org, the average cost of attendance for a student living on campus at a public four-year in-state college is $26,027 per year; out-of-state students pay $27,091 per year. The average cost of attending a private, nonprofit university, by contrast, is $55,840 per year.


💡 Quick Tip: You can fund your education with a low-rate, no-fee private student loan that covers all school-certified costs.

Factoring in Financial Aid

Financial aid is another factor that affects the cost of going to college. Some schools may have a high sticker price but offer a variety of need- and merit-based aid options to students, which can lower the actual cost of attendance.

Colleges and universities will frequently publish what percentage of their students receive financial aid and will sometimes also publish the average award amount. This can be helpful information for students applying to colleges.

When deciding where to apply and attend school, keep in mind that while the sticker price for College A is more expensive than College B, the financial aid package at College A may make it a more affordable option in the end.

Not All Majors Have the Same Income Potential

Another consideration when evaluating whether borrowing student loans is worth it is to factor in the earning potential based on your selected major, keeping in mind that not all majors offer the same income potential.

For example, undergraduate degrees in computer and information science and software engineering net recent grads a median salary over $127,000. Other majors, such as dance or drama, generally don’t offer as much consistent earning potential to graduates.

It’s a good idea to do some research on the future earning potential for the major and field you hope to pursue. This can be helpful in understanding how much you’d realistically stand to earn and, therefore, how long it may take to pay back student loans. Resources like the Payscale College Salary Report or the Bureau of Labor Statistics are two places to start.

How Much Should I Borrow for College?

A general rule of thumb is that students should limit what they borrow to what their potential career will reasonably allow them to repay. As a rough guideline, you may want to avoid borrowing anything more than you will likely be able to earn in your first year out of college.

Keep in mind that just because your financial aid package may include a certain amount in federal student loans, you are not required to borrow the maximum. Consider reviewing other sources of financial aid like private scholarships and grants. It can also be worth setting up an annual budget with anticipated costs for tuition, fees, room and board, and other expenses so you have an idea of how much you may actually want or need to borrow to pay for school.

College Graduates May Have More Financial Stability

In the long term, college graduates may have more financial stability. Research suggests that college graduates have both a higher median income than those without a college degree and earn more over their lifetimes.

Another factor, based on unemployment rates, is that people with a college degree tend to have greater career stability than those without a college degree.

This isn’t always true, however. As some recent studies suggest, certain career paths that don’t require a degree — such as construction inspectors or cardiovascular technicians — also offer significant earning potential.

Here’s What You Might Consider if You Choose to Take Out Student Loans

There are a number of factors to consider when deciding what type of student loan will best suit your particular needs, so it’s important to do your research beforehand.

Things like whether the loan is federal or private, what the current interest rates are, and how long it will take to pay off the loan could all contribute to how much student loan debt you ultimately find yourself in and are important considerations before taking out a loan.

Federal Loans vs Private Loans

There are two main types of student loans — federal loans and private loans. Federal loans are borrowed directly from the government, whereas private loans are borrowed from private lenders like banks, credit unions, and other financial institutions.

While the two loans serve the same purpose, there are some important distinctions. Because federal loans are made by the government directly, the terms and conditions are set by law. These loans also come with certain perks and protections, such as low fixed interest rates and income-driven repayment plans, that may not be offered with private loans.

Private loans are less standardized, since the terms and conditions are set by the lenders themselves. For example, some may offer higher interest rates than federal loans, and interest rates may be fixed or variable. It’s important to understand specific terms and conditions set by a private lender. Since private student loans may lack the borrower protections and benefits offered by federal loans, you generally want to tap financial aid and federal student loans first, then consider filling in any gaps with private student loans.

Understanding Interest Rates

Sometimes people fail to consider the interest rate on the student loan and how it will affect the amount of money they will end up owing.

Interest is calculated as a percentage of the unpaid principal amount (total sum of money borrowed plus any interest that has been capitalized).

Capitalization is when unpaid interest is added to the principal balance of a loan, and interest is calculated using this new, higher amount. You might have interest capitalization if, for example, you decide not to make interest payments on an unsubsidized federal loan or private student loan while you are in school. This unpaid interest will be added to your loan balance and interest will be charged on this new, higher balance.

For all federal student loans, interest rates are set by the government and are fixed, which means they won’t change over the life of the loan. With private student loans, it’s up to the lender to set the rate and terms. Generally students (or their parent cosigners) who have strong credit qualify for the best rates. If you are interested in borrowing private student loans, it’s a good idea to do some research and shop around so you can find the loan that best meets your needs.


💡 Quick Tip: Federal student loans carry an origination or processing fee (1.057% for Direct Subsidized and Unsubsidized loans first disbursed from Oct. 1, 2020, through Oct. 1, 2024). The fee is subtracted from your loan amount, which is why the amount disbursed is less than the amount you borrowed. That said, some private student loan lenders don’t charge an origination fee.

How Long Will it Take to Repay Your Loan?

Paying more money sooner can significantly reduce the amount of time it takes you to pay off a loan (as well as lower the cost). But that may not always be a feasible option. It’s important to consider the implications of different kinds of repayment plans when you take out a loan.

The standard term to repay a federal student loan is 10 years. However, depending on your income and other factors, you may need more or less time to pay back the money. The federal government offers a choice of payment plans, including fixed payment plans and plans that base your payment on your income. Private lenders also typically offer a choice of repayment options.

When choosing your loan term, keep in mind that a longer repayment term will lead to lower payments but a higher overall cost, since you’ll be paying interest for a longer period of time.

The Takeaway

Student loans can help open up doors to higher education for students, but borrowing responsibly is important. When deciding if student loans are worth it for you — and how much you should borrow — you’ll want to consider multiple factors, including your choice of major, future career path and earning potential, and the cost of the school you hope to attend after factoring in financial aid.

If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.


Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.


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-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.


Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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

Third-Party Brand Mentions: No brands, 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.

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Going Back to School at 30

Returning to school can help you advance in your current job, open you up to new professional opportunities, and increase your salary. But those potential benefits don’t come without costs.

If you’re thinking about going back to school at 30 (or any age), it’s a good idea to consider what you hope to gain out of more education, and whether it may increase your earning potential or improve your job (and overall life) satisfaction. You’ll then want to factor in how much the program will cost and how you’ll pay for it.

There’s no one simple formula to determine whether or not going back to school is worth it, but these tips can help you make an informed decision.

Determining Whether Going Back to School Is Worth It

Once you’re clear about what program you’d like to pursue and have a list of schools to consider, you may want to ask yourself the following:

•   Will the degree help me in my career path?

•   Is this degree necessary to continue on my career path?

•   Will this degree increase my job and overall life satisfaction?

•   Will my investment in this degree be worth the cost?

Here’s a look at how you can answer each one of these questions.

Will This Degree Help Me in My Career Path?

When going back to school as an adult, it’s important to position yourself for continued growth based upon the career progress you’ve made to date. Sometimes, your continuing education of choice will take you further on the same career path you’ve already established. Other times, you will be broadening your education to branch out into complementary fields.

Talk to Trusted Colleagues

To make sure that the program you’re choosing will help you to accomplish your career goals, consider talking to people whose judgment you trust, including those who have pursued the path you’re considering.

Review Linkedin

Another resource that might be worth checking out is LinkedIn. You can search the profiles of people who work for companies you admire or who are in a job position you’d like for yourself. What educational credentials have they listed? If they have a graduate degree, which one? Does this mesh with what you have in mind?

Recommended: 6 Ways to Save Money for Grad School

Evaluate Career Opportunities

Sometimes, of course, obtaining additional education is necessary to fulfill your career goals. This is true if you want to become a doctor, dentist, nurse, or lawyer. In other cases, you may not necessarily need additional education to get a job in a particular field, but you might need further education to rise up the career ladder, get a significant increase in pay, or work for a particularly prestigious company.

Obtaining an MBA, for instance, can provide you with skills that will suit you well in various fields. It can also position you to take on new career positions and boost your overall pay.

Is This Degree Necessary to Continue on My Career Path?

Sometimes, of course, obtaining additional education is necessary in order to fulfill your career goals. This is true if you want to become a doctor or a dentist, a nurse or a lawyer. And, in other cases, you may not necessarily need additional education to get a job in a particular field, but you might aspire to work for a company that requires further education from its professionals.

Obtaining an MBA, for instance, can provide you with skills that will suit you well in various fields. And companies are very interested in hiring MBA graduates: After a hiring slump due to the Covid-19 pandemic, companies planning to hire MBAs in 2021 has rebounded to the same level as pre-pandemic, according to The Graduate Management Admission Council . In other words, not only can getting an MBA increase your skill set, it also may set you up for greater career and financial success down the line.

Will This Degree Increase My Job and Overall Life Satisfaction?

Any time you invest significant resources into a decision, such as going back to school, you probably have desired outcomes in mind. If you’re thinking about going to college to finish your degree (or for the first time) or going to grad school, you may be hoping to receive a promotion or get a better or more satisfying job, which is reasonable. But, it’s also important to consider whether those accomplishments will really make you happier.

A lot of the things in work that make us happy are intangible: a work culture and community that aligns with your values, work-life balance, or a boss you work well with. Having said that, you might need an advanced degree to get into companies and positions that provide these essentials.

Keep this in mind when deciding if going back to school is the right decision to make.

Will My Investment in This Degree Be Worth the Cost?

To determine the answer to this question, you’ll want to try to calculate what your financial return on education (ROEd) might be. To do this, you’ll first need to research the salary potential for someone with the degree you’re considering. You can then look at the costs involved to determine if, and when, the investment will likely pay off.

According to data from the National Center for Education Statistics, workers aged 25 to 34 with bachelor’s degrees earn, on average, 55% percent more than those who completed high school; those with master’s or higher degrees earn around 21% more than those with bachelor’s degrees.

How to Finance Going Back to School as an Adult

If you decide going back to school is worth the cost, the next step is to figure out how to pay for the program of your choice.

Explore Private Scholarships

First, you can conduct a scholarship search and explore foundations and organizations that may provide funding to you based upon your professional credentials, your community, religious affiliation, and/or ethnicity, etc. Also, you could check to see if your employer offers tuition reimbursement or any scholarship or grant programs that can benefit you.

Federal Financial Aid

It’s also a good idea to fill out the Free Application for Federal Student Aid (FAFSA®). This will give you access to financial aid, including grants, scholarships, work-study, and federal student loans. If you’re looking into grad school, keep in mind that graduate or professional students are typically considered independent students for the purposes of completing the FAFSA form. This means you generally are not required to provide parent information.

Grants and scholarships are a form of gift aid and do not need to be paid back. Federal student loans need to be repaid, but come with benefits such as income-driven repayment plans and forgiveness programs.

Private Student Loans

If financial aid isn’t enough to cover the cost of going back to school, you might look into getting a private student loan. These are available through private lenders, including banks, credit unions, and online lenders. Loan limits vary from lender to lender, but you can often get up to the total cost of attendance for an undergraduate or graduate program. Interest rates vary but borrowers who have strong credit generally qualify for the lowest rates.

Keep in mind, though, that private loans may not offer the borrower protections — like income-based repayment plans and deferment or forbearance — that automatically come with federal student loans.


💡 Quick Tip: Master’s degree or graduate certificate? Private or federal student loans can smooth the path to either goal.

Refinancing Existing Student Loans

If you’re heading back to school and have existing student loans from your undergraduate degree, refinancing might allow you to qualify for a lower interest rate. This can either help you pay off the loan faster and/or decrease how much you pay each month. You can also lower your monthly payments by refinancing for a longer loan term. However, this will result in paying more interest overall.

You can refinance private or federal student loans. It’s important to note that when you refinance federal student loans with a private lender, you forfeit certain federal benefits, such as forbearance and forgiveness programs.

What Is Student Loan Entrance Counseling?

If you plan to go back to school as an adult and take out federal student loans, keep in mind that all federal borrowers must go through student loan entrance counseling. This is a short, online course that is designed to help ensure students understand the responsibilities and requirements that come with borrowing student loans. It highlights the terms and conditions of borrowing a loan, and also emphasizes borrower rights.

The federal government conducts student loan entrance counseling online. You can get details on the course by logging into your account on the Federal Student Aid website.

The Takeaway

When evaluating whether or not going back to school is worth the cost, you’ll want to factor in things like your career goals, the anticipated job market after graduation, typical program costs, and average salaries for the career you are pursuing with the degree.

Going back to school is a personal choice. While it typically comes with added expenses, you may decide that the potential returns make it well worth the investment.

If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.


Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.


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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-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.


Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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

Third-Party Brand Mentions: No brands, 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.

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Applying for No-Interest Student Loans

When you take out any type of loan, you typically pay interest. This is the cost of borrowing money from a lender. The interest you pay for many student loans starts growing from the day the funds are released and continues until you’ve fully paid off the loan. This is why you pay more for most student loans than the amount you originally borrowed.

No-interest loans or interest-free loans, also known as scholarship loans, don’t charge any interest, so you only pay back exactly what you borrowed. They are typically offered by nonprofit organizations, state governments, and universities.

While these loans are relatively rare, and amounts tend to lower than other types of student loans, no-interest student loans do exist and may be worth looking into for the potential savings. Read on to learn how interest-free student loans work and where to find them.

What Is a No-Interest Student Loan?

Interest-free student loans are loans that do not accrue interest. Unlike grants and scholarships, the loan amount must be repaid. Because there are no interest charges, however, the amount repaid by the borrower remains the same as the original amount borrowed. Traditional student loans, whether federal or private, all come with interest rates that are either fixed or variable.

The interest rates on federal student loans are fixed and are set annually by Congress. For the 2023-2024 school year, the interest rate on Direct Subsidized or Unsubsidized Loans for undergraduates is 5.50%, the rate on Direct Unsubsidized Loans for graduate and professional students is 7.05%, and the rate on Direct PLUS Loans for graduate students, professional students, and parents is 8.05%.

While federal student loan rates are the same for every borrower, private student loan rates range based on the lender, the type of interest rate (fixed or variable), and the borrower’s credit score. Interest on private loans can run anywhere from 4.42% to 16.99% APR.

Whatever the interest rate on a student loan, you will end up paying more than you borrow. No-interest student loans can be an attractive alternative. Here are some places to look for interest-free loans:

•   Schools Some colleges and universities offer no-interest loans for current students to cover emergency expenses.

•   States You may be able to find an interest-free student loan through your state’s education agency. For example, Massachusetts offers students who demonstrate financial need and attend a qualifying school in Massachusetts a no-interest loan for up to $4,000 each academic year.

•   Nonprofit organizations Some foundations and nonprofits offer no-interest student loans. These loans can be set up in different ways. In some cases, you can get a small loan amount; in others, the organization will pay your remaining cost of attendance. Some are awarded based on merit, while others are awarded based on financial need.



💡 Quick Tip: Make no payments on SoFi private student loans for six months after graduation.

Applying for Interest-Free Student Loans

The application process for most interest-free loans resembles the application process for grants or scholarships more closely than a traditional loan application.

It’s a good idea to fill out the Free Application for Federal Student Aid (FAFSA®), even if you want to focus on loans without interest. Some interest-free loans use the FAFSA to determine financial need. And while federal loans generally accrue interest, they typically have lower rates than private student loans. Federal student loans also come with benefits, such as income-based repayment and forgiveness programs, that private student loans and no-interest loans may not offer.

Interest-free student loans are often local and state-based, rather than national. They may require proof of residency in a certain state. Some may also have an essay requirement, as well academic requirements, and might even require an interview.

The process is usually more intense than a regular student loan because funds are limited. Some state agencies and philanthropic organizations use the term “scholarship loan” to refer to interest-free loans. Scholarship loans may also be repaid through public service.

Keep in mind though that those organizations are still separate from the government, and do not offer the same repayment plans as the loans offered through the U.S. Department of Education.

Subsidized Loans: No Interest Until After Graduation

Interest-free loans are relatively rare, so it’s possible that students will still need to rely on federal student aid. There are two types of federal Direct Loans available to undergraduate students: subsidized and unsubsidized.

Subsidized loans are available to undergraduates who demonstrate financial need. The U.S. Department of Education pays the interest accruing on the loans while you’re in school, during your six-month grace period, and when your loans are in deferment.

On the other hand, unsubsidized student loans are available to undergraduate and graduate students, and they don’t require that students demonstrate need in order to qualify. Interest accrues while you’re in school, and during grace periods, deferment, or forbearance — and you’re responsible for paying the interest.

Federal student loans also offer a few different payment plans, including income-driven repayment plans, so that borrowers can find the option that works best for them. There are also borrower protections like deferment or forbearance that can act as a safety net for borrowers who find themselves facing financial difficulties down the road.


💡 Quick Tip: Would-be borrowers will want to understand the different types of student loans that are available: private student loans, federal Direct Subsidized and Unsubsidized loans, Direct PLUS loans, and more.

The Takeaway

No-interest student loans, sometimes called scholarship loans or interest-free loans, are loans awarded to students that do not accrue interest at all. While not common, there are some nonprofits, state agencies, schools, corporations, and religious organizations that offer interest-free loans to students.

In case you’re not able to find or qualify for a no-interest loan, it’s a good idea to fill out the FAFSA to access other forms of financial aid, including grants, scholarships, and federal student loans.

Sometimes, financial aid and scholarships don’t provide enough funding to pay for college. In that case, you might want to look into private student loans. While private student loans can be helpful tools when it comes to paying for college, they do not have the same borrower protections as federal student loans, so you generally only want to consider them after all other aid options have been reviewed.

If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.


Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.



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-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.


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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5 Alternatives to Emergency Student Loans

You thought you had your college costs covered. Then something unexpected happened — a sudden job loss, unplanned expense, family emergency — and now you’re short on funds and wondering how you’ll make ends meet.

Fortunately, some schools offer emergency student loans to help students rebound from a financial set-back and manage the unexpected. While these tend to be smaller amounts, an emergency loan can help you get through a rough financial patch, allowing you to stay in school and complete your degree.

However, not every college and university offers emergency student loans, and those that do may have limited funds for emergency student loans and varying eligibility requirements.

Here are key things to know about emergency or fast student loans, plus other ways to access quick funds when you hit a set-back or unexpected college expense.

The Basics of Emergency Student Loans

The term emergency student loan generally refers to a loan offered to actively enrolled students in dire financial situations, typically by colleges and universities. If you have experienced an unexpected financial hardship, whether due to a job loss, a death in the family, or any life circumstance that results in immediate financial need, you may be eligible to apply.

Emergency loans are generally disbursed and repaid on rapid schedules. Repayment terms may be as short as 30 to 90 days. The amount you can borrow varies by school but the cap is typically between $500 to $1,500. Some emergency student loans are interest-free, while others charge a low interest rate.

Typically, you cannot use an emergency student loan to cover your tuition for the semester. However, you can use it to cover other expenses, like food, housing, childcare, and medical expenses.


💡 Quick Tip: Get flexible terms and competitive rates when you refinance your student loan with SoFi.

How to Get Emergency Student Loans

If you need an emergency or instant student loan, a good first step is to contact your school’s financial aid office. If your school offers emergency loans, you will likely need to:

•   Find out if you are eligible. You’ll want to check your school’s eligibility requirements to make sure you qualify before you go through the application process.

•   Fill out the emergency student loan application. You may be able to do this online or you might need to do it in person at the financial aid office. You’ll likely need to have your student ID and enrollment information. Your school may also ask for documentation of your financial emergency before it will approve the loan.

•   Make a plan to repay your loan on time. You may need to repay the loan within just a few months, so you’ll want to determine how you will make those payments. If you miss a payment, the school might charge fees and/or hold your academic records.

Are Emergency Student Loans a Good Idea?

While emergency student loans can be helpful, they may not be the right solution for everyone. For one, the loan might not offer enough money to help you out. For another, schools typically have strict qualification criteria for emergency student loans. For example, you typically need to have experienced an unexpected event that triggered a dire and sudden financial need, such as:

•   Loss of a parent

•   Dismissal from a job or unexpected reduction in income

•   Natural disaster

•   Significant crime or theft

Also keep in mind that an emergency loan is still a loan, so you’ll want to make sure you can handle more debt before you tap a fast student loan. Also be sure you can manage the short repayment period. Having a loan go into default may jeopardize your education and your eligibility for future financial aid. In other words, it’s a good idea to establish a plan before you borrow money.

Emergency Student Loan Alternatives

Emergency student loans can be a great resource for some students. However, they aren’t right for everyone. You may not qualify for your school’s emergency student loan program. Or, you might need a larger sum of money or a longer repayment timeline. Also, not all schools offer emergency loans. Luckily, there are other options on the table to help you through a cash crunch during college. Here are five you may want to explore.

1. Unused Federal Student Loans

If you’ve already submitted your Free Application for Federal Student Aid (FAFSA) but turned down some or all of the federal student loans you were offered, there is good news: It’s possible to change your mind. Once you have filed a FAFSA, you are allowed to accept the funds at any time during the academic year.

For example, you might have been offered $5,000 in federal loans but only claimed $2,000 of that money. If you find yourself in financial hardship later in the academic year, you could still claim the unused portion of federal student aid. You can use federal student loans to cover tuition as well as living expenses. Your financial aid office can help you figure out if this is an option for you.

Since you’ve already been approved for the loan, funding time will likely be much faster compared to the regular waiting time for federal aid. It shouldn’t take more than 14 days to receive the funds.

If you’ve had a major change in your financial situation, such as a job loss or the passing of a parent, you may want to resubmit your FAFSA to reflect your new situation. Depending on the changes, you might qualify for more aid.

2. University Grants and Scholarships

Some colleges and universities offer emergency aid in other forms besides loans. Emergency grants and scholarships work in a similar way to emergency student loans in that they’re meant to help cover unexpected financial hardships. However, unlike loans, grants don’t have to be repaid.

For example, some schools offer completion scholarships or grants, which can forgive a portion or all of the outstanding balance that might otherwise keep a student from advancing or graduating. Other schools have voucher programs to help with specific on-campus costs like books and dining hall meals.

You’ll need to get in touch with your financial aid office to see if you qualify for any emergency assistance grants, scholarships, or vouchers under your circumstances. The school may require proof of hardship or emergency.

Recommended: Finding Free Money for College

3. Private Student Loans

If you’ve tapped all of your federal aid options, you might turn to private student loans to help cover emergency expenses. These are loans offered by banks, credit unions, and online lenders.

Private student loans typically come with higher interest rates than federal student loans and don’t offer the same borrower protections (like forbearance and forgiveness programs). However, you can often borrow up to your school’s cost of attendance with a private student loan, giving you more borrowing power than you can get with the federal government. Depending on the lender, you may be able to take advantage of quick student loan approval and disbursement and use the money to pay for your emergency expenses.

Some lenders send the money straight to the school and, once tuition is covered, the school will typically give you the remainder of the loan to cover living expenses. In other cases, lenders will send the funds to you to make the appropriate payments.

4. Tuition Payment Extension

If you’re not sure you can pay your tuition on time due to a sudden emergency, it’s worth asking your financial aid office if they provide temporary payment extensions or payment plans.

Some colleges may be willing to grant you an extension on paying your tuition. For example, they might offer an emergency deferment plan which allows enrolled students to postpone payments through a specific date, such as the 90th day of the term. This might give you a bit of extra breathing room in your budget.

You might also explore tuition payment plans. Many schools allow you to spread out your tuition into affordable monthly or bi-monthly payments. Typically, schools don’t charge interest on thes plans. However, when exploring this alternative, it’s a good idea to ask about any fees or interest charges that might apply.

5. Food Pantries

The cost of food is high these days, and this may be particularly burdensome during an emergency. Your school may have an on-campus food pantry that can help reduce your expenses until you’re back on your feet. Also keep in mind that local churches and other charitable organizations in your area may also offer food at no cost to those in need. Feeding America is a helpful resource to find food banks near you.These food pantries can provide basics like canned foods, pastas, dried breakfast items and more.


💡 Quick Tip: Refinancing could be a great choice for working graduates who have higher-interest graduate PLUS loans, Direct Unsubsidized Loans, and/or private loans.

Where Can You Look for Other Forms of Emergency Student Aid and Assistance?

Outside of emergency student loans and grants, colleges and universities often offer additional resources that can help with unplanned costs during an emergency. You might find on-campus support in the form of housing opportunities, bus passes, or food pantries. Even if your school doesn’t offer emergency assistance directly, a financial aid administrator may know of off-campus organizations that will offer support.

You might also explore assistance from alumni-funded foundations or other nonprofit scholarships or grants that can provide emergency assistance. For example, the UNCF offers a “Just-in-time” emergency grant of up to $1,000 for students at risk of dropping out of college due to a financial hardship (like medical bills, a car repair, or a trip home to help a sick parent). Students must complete an online application form and show proof of financial hardship.

After You Graduate

If you took out federal or private student loans during college to cover expenses (both planned and unplanned) and you’re now in the repayment stage, you might want to look into refinancing. When you refinance your student loans, a lender pays off your existing loans with a new one, ideally at a lower interest rate. That can potentially save you money in the long run — and from the first payment you make.

Just keep in mind that if you refinance federal student loans with a private lender you forfeit federal protections, such as income-driven repayment plans and forgiveness programs.

Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.

Check out what kind of rates and terms you can get in just a few minutes.


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SoFi Student Loan Refinance
If you are a federal student loan borrower, you should consider all of your repayment opportunities including the opportunity to refinance your student loan debt at a lower APR or to extend your term to achieve a lower monthly payment. Please note that once you refinance federal student loans you will no longer be eligible for current or future flexible payment options available to federal loan borrowers, including but not limited to income-based repayment plans or extended repayment plans.


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.

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.


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.

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