Nov
19
2019
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Average Teacher Salary Across The Nation

By | Building Your Career, Life & Career, student_loan | No Comments

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

Average Teacher Salary by State

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

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

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

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

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

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

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

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

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

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

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

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

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

Paying Off Your Student Loans as a Teacher

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

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

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

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

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

Teacher Loan Forgiveness

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

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

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

Public Service Loan Forgiveness (PSLF)

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

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

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

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

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

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

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

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

Refinancing Student Loans

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

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

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

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

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

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs. SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility-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 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.


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Aug
20
2019
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What Does Life Post MBA Look Like?

By | Building Your Career, Debt Payoff, Life & Career, Student Loans, student_loan | No Comments

Earning an MBA (Master of Business Administration) degree is no small feat. Between the work you did in undergrad, the application process, determining how to pay for your MBA education, and completing your studies, internship(s), and other work—you’ve done a lot. You should be proud of yourself!

But what comes next?

After all, you’ve taken a breadth of courses. According to The Princeton Review, core business school
courses (often taken in Year 1 of a two-year program) cover a range of topics: finance, management, accounting, decision science, organizational behavior, and economics. During Year 2, students may specialize their studies.

For example, Berkeley’s Haas School of Business offers courses including technology, health management, and corporate social responsibility. All these subjects are designed to help an MBA grad develop the skills to lead in a business setting.

According to a survey by the Association of International Graduate Admissions Consultants, about 57% of survey respondents reported wanting to acquire new business-related skills and knowledge.

Others hoped the degree would increase their job prospects, help them build a strong professional network, help them make a positive difference in the world and/or lead to an increased salary.

With these skills in hand, there are a number of avenues your post-MBA career can follow. Below, you’ll find some of the paths today’s MBA-holders are considering—and they may not be what you expect. And because MBA students leave school with an average of $70,000 in loans, we’ll dig into possible ways to tackle that debt, too.

Tech

According to the Graduate Management Admissions Council (GMAC), MBA grads are likely to find opportunities in the tech world . Major tech companies include Amazon, Microsoft, and Google—and their lesser known counterparts are hiring MBA grads, too. GMAC polled recruiters, and 89% said they were looking to employee people with a business degree.

MBA grads might be hired for work in strategy, product management, business development, finance, operations, or human resources. Depending on your undergraduate degree (computer science, engineering, etc), your previous work experience, and your specialization in grad school, some roles may be a better fit than others.

Sustainability

If you’re an MBA grad aiming to making a positive environmental or social impact, you may be leaning towards a job at the intersection of business and sustainability. You could work for a company devoted to green energy such as a solar power company, or an automobile brand that makes hybrid and electric cars.

You might also want to consider a company that aims to develop new green products, or that wants to make its current business practices more sustainable.

“Environmental issues like climate change and its impacts are going to profoundly affect businesses across almost every sector in coming decades,” said Katie Kross, managing director at the Center for Energy, Development, and the Global Environment (EDGE) at Duke’s Fuqua School of Business. “Today’s MBA students are launching their careers in a world where natural resource constraints have far-reaching implications for how businesses operate.”

See how refinancing could help
you pay off your MBA sooner.

Entrepreneurship

By definition, an entrepreneur is an innovator who launches and operates a business, often taking on most of the financial risk and reaping most of the rewards.

Business schools recruit future business leaders, so plenty of MBA students attend graduate school hoping to gather the skills necessary to create and run a successful company. Some even started companies before attending business school, gaining valuable experience, with specific questions about how to improve their business.

Cameron McCain is one such MBA grad . According to McCain, the biggest advantages to earning an MBA as an entrepreneur, for him, included building a network. One day, those people may be behind the doors you’re knocking on in your quest for capital. He also says that an MBA helps entrepreneurs fill in the gaps of their own business acumen. For McCain, that meant focusing on finance, an area in which he had less experience.

Entertainment

Fashion, entertainment, and sports companies likely need people with a business background. Take film and television companies, for instance. Like other businesses, they require market data analysis. Which products are succeeding? Which are failing? Being able to look at consumer data and then make strategic business moves is an MBA-taught skill set.

Entrepreneur Cara Withers Shaw , who got her MBA from Pepperdine University, worked for multiple entertainment companies (Disney, Twentieth Century Fox) before launching her own company. She says her time in business school helped her develop the quantitative and qualitative analytical skills she needed to study movie-going data.

But What About My Loans?

If you attended a two-year MBA program at a top business school and took out student loans in order to do so, chances are you’re looking at around $80,000 to over $100,000 in student loan debt.

This doesn’t mean your hard-earned degree isn’t worth it, financially speaking. Debt for B-School grads who attended Harvard, Stanford, or the University of Chicago ranges from $86,000 to $116,000; their average salary is about $161,000. That said, even with a hefty salary, grads’ loans may be overwhelming.

There are strategies that may make your monthly payments more manageable. First, once you know your income, you might spend some time making a new budget that factors your loan payments into your expenses. You might consider setting up automatic payments, which could ease your stress—and keep you from missing a payment.

And refinancing your student loans at a lower interest rate may help lessen the amount of interest you pay over time, potentially saving you money in the long haul. (Keep in mind that if you have federal loans, refinancing means losing access to benefits like student loan forgiveness, especially if you choose to work in the public sector.)

Regardless of the path you choose, your MBA likely played a large part in getting you there. And with a better handle on your student loans, you’ll likely have more energy and time to devote to making it count.

Thinking about refinancing your MBA loans? Find your interest rate with SoFi here.

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.

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.

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

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

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 Lending Corp. or an affiliate and its lending products are not endorsed by or directly affiliated with any college or university unless otherwise disclosed.

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Aug
06
2019
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How Public Service Jobs Can Help Your Student Debt

By | Building Your Career, Debt Payoff, Life & Career, Student Loans, student_loan | No Comments

If you get a job with a governmental agency or not-for-profit organization and you have federal student loan debt, you may be able to receive loan forgiveness under the Public Service Loan Forgiveness (PSLF) program.

Currently, if you qualify for this program, and make 120 payments under a qualifying repayment plan while working full time for an employer that falls within PSLF parameters, then the government will forgive the remaining balance of your Direct Loans.

List of Public Service Jobs

You may be asking: What is a public service job? What type of job would qualify me for PSLF?
According to the office of Federal Student Aid, the answer to those questions is that qualifying public service employment is not about your specific role, it’s about who employs you. Their list of public service organizations includes:

•  government organizations at any level (federal, state, local, or tribal)

•  not-for-profit organizations that are tax-exempt under Section 501(c)(3) of the Internal Revenue Code

•  other types of not-for-profit organizations that are not tax-exempt under Section

•  501(c)(3) of the Internal Revenue Code, if their primary purpose is to provide certain types of qualifying public services

•  serving as a full-time AmeriCorps or Peace Corps volunteer

Bullet point three mentions jobs that have a primary purpose of providing “certain types of qualifying public services.” To have the potential to qualify for the PSLF program under this option, you’d need to work for an employer that has at least one of the following as a primary purpose:

•  Emergency management

•  Military service

•  Public safety

•  Law enforcement (this includes “organizations that are publicly funded and whose principal purposes include crime prevention, control or reduction of crime, or the enforcement of criminal law”)

•  Public interest law services (this refers to “legal services provided by an organization that is funded in whole or in part by a local, state, federal, or tribal government”)

•  Early childhood education (this includes “licensed or regulated child care, Head Start, and state funded pre-kindergarten”)

•  Public service for individuals with disabilities

•  Public service for the elderly

•  Public health (this includes “organizations that employ nurses, nurse practitioners, nurses in a clinical setting, and full-time professionals engaged in health care practitioner occupations and health support occupations, as such terms are defined by the Bureau of Labor Statistics”)

•  Public education (this includes “services that provide educational enrichment or support directly to students or their families in a school or a school-like setting”)

•  Public library services

•  Other school-based services

There are a few types of employers whose employees do not qualify for PSLF. They are:

•  Labor unions

•  Partisan political organizations

•  For-profit organizations, including for-profit government contractors

•  Not-for-profit organizations that:

◦  Are not tax-exempt under Section 501(c)(3) of the Internal Revenue Code

◦  Do not provide a qualifying public service as their primary function

You can also use a tool provided by StudentLoans.gov to see if you potentially qualify for forgiveness under the PSLF program.

If PSLF doesn’t work for you,
check out student loan
refinancing with SoFi.

Why You Might Choose the Public Service Path

Working in public service can feel wonderful, knowing that you’re helping to make your community a better place.

Although you can accomplish that by working a for-profit job and also volunteering for a cause that matters, when you work in one of the public service jobs, this is what you’re doing as your vocation, full time—and you can still choose to volunteer for causes you care about on the side.

Pros and Cons of the PSLF Program

While there are advantages to going the public service route and potentially qualifying for PSLF, it is not a guarantee that you will qualify and that it will be worth it in the long run.

The main advantage to PSLF is that after a set time, the balance of your Direct Loans could be forgiven. And the forgiven amounts in this program aren’t typically considered income, which would mean you wouldn’t be taxed on the forgiven amount—that isn’t true of all of the loan forgiveness programs.

You may also pay less on your federal loans each month because you must use an income-driven repayment plan to be eligible to receive PSLF, and that can help with cash flow.

However, as we mentioned above, you may qualify only if you work for certain types of employers. And to take advantage of PSLF, you’ll need to work full-time for a qualifying employer for 10 years and make 120 qualifying payments—and make sure, every year (or if you switch employers), you submit an Employment Certification Form. You also may need to jump through additional hoops to qualify; PSLF is not awarded automatically.

It’s also worth considering that if you work for a for-profit employer, you might make more money than you would at a public service job, which could allow you to pay off your student loan debt more quickly. If you aggressively paid off your student loans in fewer than 10 years, it’s possible that you could pay less in interest than if you made 120 payments under this forgiveness program.

And, if you enroll in the program but then stop working for a qualifying employer, you could end up with a larger outstanding balance because of accumulated interest from the income-driven repayment plan (more loan payments means more interest payments).

A New York Times article, published in May 2018 (“Public Servants Do Get Student Loan Forgiveness. Meet One of the First.”) includes stories from people who struggled to first qualify for the program, and then to get “coherent status updates.”

One doctor mentioned in the article handed her paperwork off to her mother, an attorney, and neither of them could navigate the process successfully. Another person who is struggling to glean the benefits of the program is an attorney who actually works for the Department of Education, which administers the program.

Another challenge is that the PSLF program focuses only on federal student loans so, if you also have private ones, they aren’t eligible for PSLF, even if you work in one of the qualifying public service jobs. Getting loan forgiveness for private loans is highly unlikely, although you may be able to talk to your private lender to obtain more temporary relief measures, such as loan deferment or forbearance if necessary.

In fact, the only times when loan forgiveness seems to happen with private loans is typically under exceptionally dire circumstances, such as if the borrower becomes completely disabled or dies. Even then, there isn’t a formal process for forgiveness.

What to Do If PSLF Isn’t Right for You

So, what do you do if you don’t qualify for PSLF or if you have private loans? One option is to refinance your student loan debt. If you have a good credit history and solid income potential (among other important financial factors), then you might qualify for a lower interest rate, which can reduce the amount of money you’d pay over the life of the loan.

Some lenders, like SoFi, will consolidate federal and private student loans, and then refinance them into one loan. This means that your new lender would pay off all of your old loans, and then, based on terms you agree to, issue a brand new loan to you.

If you refinance your federal loans with a private lender, you would then lose the potential for any federal benefits, including PSLF and income-driven repayment plans, so it’s important to do your homework first: consider your short-term and long-term needs; make sure you’re getting the lowest rate possible; ensure that the lender has the loan programs (fixed/variable) and terms you need; check to see if you’ll have to pay any fees; see what benefits you can gain with your new lender; and find out if the lender you’re considering will first do a soft credit pull before you apply (so you can see what rates you qualify for) that won’t have the potential to affect your credit rating.

Student Loan Refinancing with SoFi

It’s important to remember that you should review all federal repayment options first before refinancing with a private lender. If you do choose to refinance with a private lender, consider SoFi.

At SoFi, you can consolidate federal student loans with private ones, refinancing them into one convenient loan. Plus, there are no hidden fees. And SoFi offers member discounts and career counseling, among other potential benefits. You can use SoFi’s student loan refinancing calculator for an estimate of how much you might save.

Learn more about SoFi student loan refinancing and find your rate today.

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

Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

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

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

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 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.

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Jun
20
2019
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Which Generation Has the Most Student Debt?

By | Debt Payoff, Financial Independence, Student Loans, student_loan | No Comments

Asked to picture the typical person struggling with student debt, you’d probably imagine a new-ish college graduate or working professional—maybe someone who’s trying to buy a home or who plans to start a family.

But according to recent college debt statistics , that person might just as likely be a parent or grandparent who’s trying to pay off a home or plan for retirement.

Turns out, student debt isn’t just for kids anymore. Even baby boomers, who are now in their mid-50s to early-70s are pressing pause on their dreams because they’re burdened with loans they haven’t paid off, a loan amount that has reached $16,100 for the typical Parent PLUS borrower .

Yes, millennials had their work cut out for them between high tuition rates and lower wages than they might have expected when they graduate.

But their parents and grandparents could be in it with them—sharing at least part of the financial burden. Even those who never borrowed a dime for their own education may have taken out loans or agreed to co-sign for their kids. Now they’re facing some of the same repayment problems—but with less time to bounce back financially.

Student Debt by Generation

According to the Consumer Financial Protection Bureau (CFPB), the number of consumers age 60 and older with student loan debt quadrupled between 2005 and 2015—from about 700,000 to 2.8 million. And the average amount they owe also dramatically increased—from $12,100 to $23,500.

Although most student loan borrowers are still young adults between the ages of 18 and 39, the CFPB says, older consumers are the fastest-growing age segment of the student loan market. In that same 10-year period, 2005 to 2015, the share of borrowers 60 and older increased from 2.7% to 6.4%.

When surveyed, the vast majority of older borrowers (73%) said their student debt was for a child or grandchild’s education. Twenty-seven percent said their loans were for their own education or for their spouse. And the CFPB estimates that 57% of all co-signers are age 55 and older.

Gen Xers, who are now in their late-30s and early-50s, are in a similar situation—except they often have more of their own student debt as well.

In the mid 1970s, boomers started using a combination of grants and student loans, which boosted college attendance, but cracks began to show as student loan debt skyrocketed. In 1986 , more than one quarter of student borrowers owed over $10,000; adjusting for inflation, that’s equivalent to over $21,000 today.

Now, they’re paying for their kids’ education—by taking out loans or contributing less to their retirement savings. Or both. The CFPB found that borrowers nearing retirement (ages 50 to 59) had a lower median amount in their retirement accounts than consumers without student loan debt.

Though financial advisors repeatedly warn parents not to short themselves while helping their kids, a report by the Association of Young Americans (AYA) and the AARP found student loan debt was holding up retirement savings for around a third of Gen X and boomer respondents.

Don’t let student loan debt hold you back.
Learn how refinancing can help.

About a quarter of Gen X parents and a third of boomer parents said college debt prevented or delayed them from buying a home. And about a quarter of Gen Xers and boomers said their debt burden was an obstacle in getting the health care they need.

Some overwhelmed borrowers put at least part of the blame on federal parent PLUS loans, which they say are too easy to get. (Parents with a qualified dependent undergraduate student need only prove they don’t have an “adverse credit history”) On average, parents now borrow nearly $15,880 per year in parent PLUS loans.

In March 2018, Federal Reserve Chairman Jerome Powell said that though he generally supports the idea of a vibrant education loan climate, borrowers need to be informed of the risks they’re taking. “You do stand to see longer-term negative effects on people who can’t pay off their student loans,” he said. “It hurts their credit rating, it impacts the entire half of their economic life.”

In general, a college degree is, of course, a worthwhile investment. The unemployment rate for those age 25 and older with a bachelor’s degree or more education was 2.1% in April 2018.

For workers age 25 and older who graduated from high school but did not attend college, the unemployment rate was 4.3%. And those workers are earning more, on average. According to the Pew Research Center , those ages 25 to 39 with at least a bachelor’s degree have, on average, higher family incomes—the individual’s income plus that of his or her spouse or partner—than those in that age range lacking a bachelor’s degree.

Next Steps Toward Tackling Debt

While policymakers look for broader solutions, borrowers are finding their own. For many, that means getting their payments under control with student loan refinancing.

If you have a good job and have maintained a solid credit history, refinancing your student loans may help in a few ways.

If you can get a lower interest rate, you’ll lower the total amount you’ll pay over time—depending on the loan term you choose, of course. And it can make paying off your debt much easier if you have only one payment to make every month.

If you’re a borrower who proudly supported your child or grandchild through college but ended up with more debt than expected, refinancing may be the answer. And if you’re a new-ish borrower who can’t meet your financial goals because your student loans are eating your income, a different payment plan may help you achieve those milestones. Just keep in mind that if you refinance federal student loans with a private lender, you lose some potential federal benefits, such as income-based repayment plans and forbearance options.

Either way, you don’t have to be stuck. And you don’t have to be a college loan statistic.

See if refinancing student loans with SoFi may be an option for you.

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.

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

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

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.

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Jun
17
2019
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Tips for Returning to College After Taking Time Off

By | Life & Career, Student Loans, student_loan | No Comments

If you’ve ever asked yourself the question, “if you withdraw from college, can you go back?” the simple answer is yes. But whether you left due to financial problems, family responsibilities, or other reasons, returning to college can be challenging.

Here are some things to know about going back to college after dropping out and how to help make the process go smoothly.

Having Some Ideas About Your Major

Regardless of how long it’s been since you left school, you’ll have to make up for lost time. At the same time, you may have had experiences during your time away from school that helped you solidify what you want to do with your life and career.

As a result, it’s a good idea to think about choosing a major. Whether it’s a bachelor’s or master’s degree, or a certificate program, knowing what subject you want to study and to what extent will help you finish your schooling faster.

If you’re still not sure about what you want to pursue, you can take some time to explore your options. Consider auditing a course or two to get a better idea about what you enjoy, if your first day back is still months away. The key is to do your due diligence before you return to campus, so you don’t feel like you’re spinning your wheels when you get there.

Carefully Considering Which College to Attend

In some cases, it makes sense to return to the college you originally attended. But it may also be worth checking out other universities to see if you can save money on tuition, or have a better college experience.

There are a few things to consider when making this decision. For example, each college has its own criteria as to what’s considered a required course versus an elective course. If you attend a different college, you may have to retake certain required courses.

Also, in some situations, it may make sense to find a less expensive college. Comparing colleges in your area can help make sure you get a good education without overspending. This is especially important if you had to leave college due to financial difficulties.

Easing Into It

Returning to college after a hiatus is different than returning to school after summer vacation. It may take some time to adjust to your new schedule and study requirements, and it’s possible that you’ve forgotten even some basic knowledge that you’ll need to brush up on.

If you have a desire to make up for lost time, you may consider trying to finish your degree or certificate program as quickly as possible. But as with any other activity, you may end up burning out if you spread yourself too thin.

Maybe instead of taking on a full workload your first semester back, you can take the minimum number of credits you need to be a full-time student, or maybe just a class or two. It can’t hurt to give yourself some time to get back into the swing of things, both mentally and emotionally.

There’s no right way to do this, so do regular check-ins with yourself and your loved ones to make sure you have enough capacity to accomplish your goals.

Building a Support System

Figuring how to get back into school after dropping out can be a draining process, especially if you’ve been away for a while. Maybe you have a family now, or you’re quitting your job to focus on school full time.

Regardless of your situation, it’s good to have support in your decision to further your education. Consider looking into your college’s mental health and career centers for additional resources and support.

You can speak with your partner, friends or family members about your decision to return to college. Help them understand your reasons and goals, especially if returning to college affects them.

The sooner you start building a support system, the easier it will likely be to make returning to college a smooth process.

Securing Financing

Even if you pick a relatively inexpensive university, a college education isn’t cheap. In an ideal scenario, you’ll be able to avoid student loans altogether. Scholarships, grants, and a full-time job can help you get through school without needing to borrow money.

But, if you do need some help to bridge the gap, you can start by filling out the Free Application for Federal Student Aid (FAFSAⓇ) form to see what you qualify for federal student aid (which could include grants, loans, and work-study). If you have a solid credit history and a good income, among other financial factors, private student loans might score you a lower interest rate.

Figuring Out What to Do With Your Existing Student Loans

If you still have student loans from your first stint in college, you don’t necessarily need to continue paying them when you return. The U.S. Department of Education and many private student lenders may allow you to defer your student loan payments while you’re in school at least half-time.

Keep in mind, though, that deferring your payments won’t stop the interest from accruing. If you don’t make interest-only payments while you’re enrolled, the unpaid interest will capitalize when you leave school and increase your overall debt.

If you’re generally unhappy with your existing student loans, another action to consider might be refinancing your student loans, especially if you qualify for a lower interest rate than on your original loans. You could also potentially extend your repayment term, lowering your monthly payment amount if you need to free up some near-term cash (but you’d pay more in interest overall).

Alternatively, if you’re in a more stable financial position, you might qualify to secure a shorter loan term, which could help pay off your loan more quickly and, therefore, make fewer interest payments.

But it’s important to note here that refinancing with a private lender would render you ineligible for programs and repayment plans extended to federal student loan holders like deferment, forbearance, and income-driven repayment. So you may wish to weigh your options carefully before considering refinancing.

Going back to college after dropping out isn’t easy, but it can be a stepping stone to get to where you want to be in life. As you consider returning to college, create a plan and allow yourself time to adjust to college life.

Also, make sure you have a good plan for your existing student loans. Whether it’s refinancing them and requesting a deferment, you can always look for opportunities to save yourself money as you try to finish up your degree or certificate.

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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