student_loan Archives

Sep

2025

Should You Make Weekly, Biweekly, or Monthly Student Loan Payments?

By Sulaiman Abdur-Rahman | Debt Payoff, Student Loans, student_loan | No Comments

Back when you signed up for your first federal student loan, you might have been grateful to learn you had 10 years or more to pay the money back. A longer loan term typically comes with smaller monthly payments — and that can be helpful when you’re just starting out and trying to make ends meet.

Once you’re feeling steadier on your feet financially, though, the idea of dumping that debt a little sooner than planned can be tempting. One way to do that is by adjusting the frequency of your student loan payments. You can make extra student loan payments each month beyond your minimum required payment.

Below we explore the merits of making weekly student loan payments vs. biweekly or monthly student loan payments.

Table of Contents

How Do Weekly Student Loan Payments Work?
What’s an Extra Student Loan Payment?
Are You Ready for Accelerated Payments?
Benefits of Paying Student Loans Biweekly
Alternatives to Accelerated Payments
Pros and Cons of Student Loan Refinancing
FAQ

Key Points

• Making weekly or biweekly student loan payments can help pay off debt faster and reduce total interest costs.

• Extra payments should be applied to the loan principal to maximize savings and avoid early payment being counted toward future minimums.

• Biweekly payments align with many payroll schedules and can result in an extra full payment each year.

• Alternative repayment strategies include adding small extra amounts monthly, making lump sum payments, or refinancing for better terms.

• Income-driven repayment plans may be a better option for those struggling with federal student loan payments.

How Do Weekly Student Loan Payments Work?

You can make weekly student loan payments through automated or manual payments every seven days. Both federal and private student loans typically require minimum monthly payments, but you can make extra payments above that amount if you wish.

If you’re required to pay $300 per month on student debt, for example, you could instead pay $100 each week. Paying at that rate would accelerate your loan payments, meaning you may pay your debt off faster and reduce your total interest costs over the life of the loan.

Here’s another example of how weekly student loan payments can work:

Let’s say a recent graduate has a monthly student loan payment of $400. That’s $4,800 a year. Now that she’s working, she realizes she can pay a little more every month. If she splits that $400 into $100 weekly student loan payments, over the course of the year she’ll pay $5,200 instead of $4,800. That’s equal to a whole extra payment for the year that can reduce her interest costs over the life of the loan.

What’s an Extra Student Loan Payment?

An extra student loan payment is when you pay more than the required amount due on your monthly billing statement. You can make extra student loan payments if you wish, but it’s important that everyone is on board regarding how those extra payments should be applied.

When you apply for student loans, you may take out multiple education loans to help cover your tuition and related expenses. You can instruct your lender to put extra payments toward principal reduction, not the next month’s payment. It may be possible to do this electronically by logging into your account and selecting how the extra amount should be allocated.

As a borrower, you can consider different repayment options. If you determine that making extra payments is right for you and your budget, you can ask your lender or loan servicer to allocate your extra payments to your higher interest loans first.

Student loan refinancing may be another way to reduce your total interest costs.

💡 Quick Tip: Ready to refinance your student loan? With SoFi’s no-fees-required loans, you could save thousands. Note that you may pay more interest over the life of the loan if you refinance with an extended term.

Are You Ready for Accelerated Payments?

Just about every financial strategy has pros and cons, and that applies to accelerated payments. There are a few scenarios when making extra loan payments wouldn’t necessarily be in a borrower’s best interest.

If a person is carrying $50,000 in high-interest credit card debt, for example, that debt may take priority over a student loan with a lower interest rate.

Another priority could be building an emergency fund first to handle unexpected costs — from car repairs to medical bills.

You have no obligation to pay extra, but borrowers are expected to repay their student loans when due. Missing payments could damage your credit score and eventually lead to default.

Recommended: How to Pay Off $100K in Student Loans

Benefits of Paying Student Loans Biweekly

Reduce Total Interest Costs

Making loan payments biweekly instead of monthly can accelerate the payoff of the student debt and reduce your total interest costs over the life of the loan. Paying student loans biweekly may be right for you if you’re interested in paying more than your required amount due each month.

You Can Align Payments with Your Paycheck

Aligning payment frequency with an employer’s payroll schedule (whether it’s weekly or biweekly) may help with budgeting and ensuring money is in the right bank account when your payment is due. If you’re making weekly or biweekly payments, it’s critical that you cover at least the required amount due by your scheduled due date to avoid any penalties.

You Can Rely on Autopay to Deduct Your Payment

If that seems like too much extra work and worry, autopay (also called direct debit) might be a solution to staying on top of payments. The U.S. Department of Education does not charge prepayment penalties on federal student loans, and federal law prohibits prepayment penalties on private student loans.

Whether you have federal or private student debt, paying off your education loans sooner rather than later can minimize your total interest costs without penalty.

Alternatives to Accelerated Payments

For those who aren’t quite ready to move into an accelerated payment plan, there are alternative methods that can help with getting ahead of student debt.

Pay More When You Can

To try a test run, you could divide your current monthly payment by 12 and add that amount to each payment whenever possible. For example, a $400 monthly payment would be about $33 extra a month, but when times are tight, you could send the regular amount.

Another approach might be to put lump sums of extra money toward loan payments spontaneously but whenever possible. (If you get a tax refund, for instance, or receive a bonus at work.)

Consolidate Your Loans

You could also look at a federal Direct Consolidation Loan, which allows you to combine your federal education loans into a single loan with one payment. That can make repayment more manageable, but because it’s a government program, it doesn’t include private loans. And a federal consolidation loan usually increases the period of time the borrower has to repay the loans, which means one could end up paying more in interest.

Refinance Your Loans

If you have a stable income and solid credit, you might want to look at combining all of your student loans into a new loan with one manageable payment by refinancing with a private lender. Note that refinancing federal loans means losing eligibility for federal repayment plans, forgiveness programs, and other benefits.

💡 Quick Tip: When refinancing a student loan, you may shorten or extend the loan term. Shortening your loan term may result in higher monthly payments but significantly less total interest paid. A longer loan term typically results in lower monthly payments but more total interest paid.

Use an Income-Driven Repayment Plan

Making weekly or biweekly student loan payments may not be right for everyone. If you cannot afford voluntary extra payments on federal student loans, you may consider enrolling into a federal income-driven repayment (IDR) plan. Private student loans are not eligible for IDR plans.

Your current options for income-driven repayment are the Income-Based Repayment (IBR) plan, Pay As You Earn (PAYE) plan, and Income-Contingent Repayment (ICR) plan. All these plans adjust your payments based on your income and extend your terms to 20 or 25 years.

The IBR plan can also end in loan forgiveness eventually. Due to recent legislation, the PAYE and ICR plans will shut down by July 2028. The IBR plan will remain an option for current borrowers. Current and new borrowers will also be able to access the new Repayment Assistance Plan starting in July 2026.

Pros and Cons of Student Loan Refinancing

Refinancing student loans has both pros and cons. Here are some potential advantages:

• Lower interest rate: The primary benefit is reducing your interest rate. This can reduce your monthly payment and lead to major savings over the life of your loan.

• New repayment terms: You can choose new terms, often between five and 20 years. A shorter term can accelerate repayment, while a longer term will make your monthly student loan bills more affordable (but probably increase your interest costs).

• Combining multiple loans into one: You can refinance multiple loans into a single new loan, which could simplify repayment.

Some potential downsides of refinancing include:

• Lose eligibility for federal repayment plans: Refinancing federal loans into a private loan means you’ll no longer qualify for federal repayment options like income-driven repayment.

• Forfeit access to federal loan forgiveness: If you refinance federal loans, you’ll also no longer be able to get forgiveness from an IDR plan or the Public Service Loan Forgiveness program.

• Pay more interest if you extend your loan term: If you add years to your repayment term, you’ll likely end up with higher interest charges in the long run.

Weigh the pros and cons of student loan refinancing carefully to determine whether it’s the right path for you.

The Takeaway

Choosing the right payment frequency for your student loan can significantly impact your financial well-being and the speed at which you pay off your debt. Whether you opt for weekly, biweekly, or monthly payments, the key is to find a schedule that aligns with your budget and financial goals.

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.

With SoFi, refinancing is fast, easy, and all online. We offer competitive fixed and variable rates.

FAQ

How can making weekly or biweekly payments benefit you?

Making weekly or biweekly payments can help you pay off your student loans faster and reduce the total interest you pay over the life of the loan. This is because you end up making the equivalent of one extra monthly payment each year, which can significantly decrease your loan balance.

Can making more frequent payments affect your credit score?

While making more frequent payments doesn’t directly impact your credit score, it can indirectly help build it by reducing your overall debt more quickly. This can lower your credit utilization ratio and demonstrate responsible financial behavior, which are positive factors for your credit score.

What should you consider when deciding on a payment frequency?

When deciding on a payment frequency, consider your budget, cash flow, and financial goals. Ensure that the chosen frequency is sustainable and doesn’t strain your finances. It’s also a good idea to check with your loan servicer to understand any specific requirements or benefits associated with different payment frequencies.

SoFi Student Loan Refinance
Terms and conditions apply. SoFi Refinance Student Loans are private loans. When you refinance federal loans with a SoFi loan, YOU FORFEIT YOUR ELIGIBILITY FOR ALL FEDERAL LOAN BENEFITS, including all flexible federal repayment and forgiveness options that are or may become available to federal student loan borrowers including, but not limited to: Public Service Loan Forgiveness (PSLF), Income-Based Repayment, Income-Contingent Repayment, extended repayment plans, PAYE or SAVE. Lowest rates reserved for the most creditworthy borrowers. Learn more at SoFi.com/eligibility. SoFi Refinance Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).

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

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

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

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.

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.

SOSLR-Q325-042

Sep

2025

Law School Loan Forgiveness and Repayment Options

By Maureen Shelly | Fresh Out of School, Student Loans, student_loan | No Comments

Pursuing a law degree involves a significant investment of time and money. The high cost of tuition, coupled with the financial strain of living expenses, can leave many law school graduates burdened with substantial student loan debt.

Fortunately, there are still some forgiveness and repayment options available to law school debt holders. Here’s what’s available.

Table of Contents

Loan Repayment Assistance Programs
5 Law School Loan Forgiveness and Repayment Programs
FAQ

Key Points

• Public Service Loan Forgiveness (PSLF) forgives remaining federal debt after 10 years of qualifying payments while working in public service or nonprofit law.

• Income-driven repayment (IDR) plans set monthly payments based on income and may lead to forgiveness after 20–25 years.

• State LRAPs offer forgiveness or assistance to lawyers working in public service or underserved areas, with varying benefits by state.

• Law school LRAPs provide aid to alumni in low-income or public interest roles, with specific income and debt requirements.

• The Department of Justice repayment program offers up to $6,000/year toward loans for attorneys who commit to at least three years at the Department of Justice.

Loan Repayment Assistance Programs

A Loan Repayment Assistance Program (LRAP) is one type of financial assistance provided to law school graduates in government and lower paying legal fields. LRAPs may be run by the state, state bar, federal government, or individual law schools.

In many cases, funds are provided via a forgivable loan that is canceled when the recipient’s service obligation is completed. These loans are structured in a way that they are not taxable income, unlike grants. If you receive loan repayment assistance, it’s important to find out if your funds are taxable. (Learn how to find your student loan tax form.)

An LRAP shouldn’t be confused with the repayment plan borrowers agree to when they first sign for their loans. Most people with federal student loans are on the Standard Repayment Plan, meaning they pay a fixed amount every month for up to 10 years.

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

5 Law School Loan Forgiveness and Repayment Programs

Below are the five most widely used law school student loan forgiveness and repayment programs. If you’re already receiving one or more of these benefits, remember that you may have to reapply each year.

You may apply to as many law school debt forgiveness programs as you qualify for. In some cases, you may even accept more than one grant or loan at a time, but check the fine print on your program applications.

Recommended: Can Private Student Loans Be Forgiven?

Public Service Loan Forgiveness (PSLF)

Best for: Lawyers who plan to work for the government or in the nonprofit sector

The Public Service Loan Forgiveness program may be the most well-known option in terms of loan forgiveness for lawyers. The premise is simple: If you work in a qualifying public service field, then the remainder of your direct student loans can be forgiven after you make 120 qualifying monthly payments over 10 years. However, many people attempting to meet those requirements can find the process confusing and difficult.

The first step to qualifying for public service loan forgiveness is filling out the employment certification form.

In order to earn loan forgiveness, you must work for a qualifying government organization or tax-exempt non-profit organization, and you must be enrolled in a qualifying repayment plan — generally a federal income-driven repayment plan.

The next step is to make your monthly loan payments promptly. If you meet all those requirements and payments, then at the end of 10 years, the remainder of your debt could be forgiven.

Income-driven Repayment (IDR) Plans

Best for: Lawyers with low incomes

An income-driven repayment plan sets your monthly student loan payment based on your income and family size. Most federal student loans are eligible for at least one income-driven repayment plan. If your income is low enough, your payment could be $0 per month. There are currently three income-driven repayment plans to choose from:

• Income-Based Repayment (IBR) Plan

• Pay As You Earn (PAYE) Plan

• Income-Contingent Repayment (ICR) Plan

Starting July 1, 2026, new borrowers will have just one income-driven plan, the new Repayment Assistance Plan (RAP).
The Repayment Assistance Plan (RAP) is based on borrowers’ adjusted gross income (AGI), with a $50 monthly reduction per dependent. The RAP plan provides cancellation after 30 years of payments.

The Federal Student Aid website breaks down the eligibility for each program. If you have Parent PLUS loans, you must consolidate your loans to become eligible for an IDR plan.

State Loan Repayment Assistance Programs

Best for: Lawyers who qualify for their state’s program

Most states have LRAPs providing a type of law school loan forgiveness if you work in that state — often in the public sector, for a qualifying nonprofit, or in underserved communities. Repayment assistance varies, so check the guidelines for your state. For instance, the District of Columbia offers one-year interest-free forgivable loans up to $12,000; in New York, forgivable loans of up to $10,000 per year are available for a maximum of three years or $30,000.

Law School-Based Loan Repayment Assistance Programs

Best for: Lawyers with low incomes or those who work in high-need areas

Many schools offer their own LRAPs for lawyers. Programs vary as far as minimum law school debt and income requirements. You’ll have to check with your law school’s financial aid office to learn their requirements and see if you meet them.

One program, for example, awards up to $5,600 each to around 125 new attorneys annually through an application process that opens in August.

Department of Justice Attorney Student Loan Repayment Program

Best for: Lawyers who work for the Department of Justice

The Department of Justice Attorney Student Loan Repayment program is a type of law school loan forgiveness aimed at encouraging newly minted attorneys to work for the Department of Justice. Applications for the program open in the spring (typically on March 1), however, the program is paused for 2025.

In return, you can receive up to $6,000 per year (for a maximum of $60,000 total) paid toward your student loans. It’s not exactly law school loan forgiveness, but it is law school loan repayment.

The fine print: You must commit to three years of full-time employment for the Department of Justice, and if you don’t fulfill your commitment then you could be on the hook for any loan payments made on your behalf. You must have at least $10,000 in eligible student loans, which includes Stafford Loans, PLUS loans, Perkins Loans, and a few other types of student loans. (All criteria information is available on the Department of Justice’s program website.)

Payments are made directly to the loan servicer and all loan repayments made by the Department of Justice ASLRP are considered taxable income. It’s also a highly competitive program, but if you’re looking at a career working for the DOJ, then it could be a great way to get your start and wipe out some debt.

💡 Quick Tip: It might be beneficial to look for a refinancing lender that offers extras. SoFi members, for instance, can qualify for rate discounts and have access to financial advisors, networking events, and more — at no extra cost.

The Takeaway

Law school loan forgiveness sounds great, but it can cost you money in the long run if you end up paying higher interest rates or don’t pursue the career you want in the hope of securing loan forgiveness. Other options may include loan consolidation or student loan refinancing.

With SoFi, refinancing is fast, easy, and all online. We offer competitive fixed and variable rates.

FAQ

What is law school loan forgiveness?

Law school loan forgiveness is a program designed to help law graduates reduce or eliminate their student loan debt. These programs are typically available to those who work in public service, nonprofit organizations, or other qualifying fields. The goal is to make legal education more accessible and to encourage graduates to pursue careers that serve the public interest.

Who is eligible for law school loan forgiveness?

Eligibility for law school loan forgiveness programs varies, but generally, you must be a law graduate working in a qualifying job. Common qualifying fields include public interest law, government positions, and nonprofit organizations. Some programs also require a certain number of years of service and may have specific income or loan type requirements.

What are the most common law school loan forgiveness programs?

Some of the most common law school loan forgiveness programs include the Public Service Loan Forgiveness (PSLF) program, which is federal and available to those working in public service, and various state and school-specific programs. Many law schools also offer their own loan forgiveness assistance programs for graduates working in public interest roles.

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

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

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.

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

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

SOSLR-Q325-038

Sep

2025

How to Calculate Student Loan Interest

By Sulaiman Abdur-Rahman | Fresh Out of School, Student Loans, student_loan | No Comments

Table of Contents

Step 1: Calculate Daily Interest
Step 2: Calculate Daily Costs
Step Three: Calculate Monthly Costs
Simple vs Compound Interest
When Does Interest Start on Student Loans?
What Is Interest Capitalization?
What Is Student Loan Amortization?
The Takeaway
FAQ

As with any loan, federal and private student loans come with interest charges. Federal Direct Loans use a daily simple interest formula, whereas some private student loans may use a compound interest formula.

A simple interest loan calculates interest on your principal balance. A compound interest loan, however, uses a different formula that typically results in higher interest charges than a simple interest formula.

In general, the terms of your student loan agreement will determine how much interest you pay over the life of your loan. Below we highlight how to calculate student loan interest.

Key Points

• Student loan interest starts accruing as soon as the loan is disbursed. It is calculated daily based on the outstanding principal balance and the interest rate of the loan.

• To calculate the daily interest on your student loan, use the formula: (Outstanding Principal Balance × Interest Rate) / 365.

• Interest on private student loans can compound, meaning that interest is added to the principal balance, and future interest is calculated on the new, higher balance.

• The length of your repayment period affects the total interest you will pay.

• Making extra payments, choosing a shorter repayment term, or refinancing your loans can help reduce the total interest you pay.

Step 1: Calculate Daily Interest

A student loan calculator can help you determine how much interest you may pay over the life of your loan. You can also calculate daily interest costs manually if you know your interest rate.

Say you have a $10,000 Federal Direct Unsubsidized Loan balance with a 5.50% fixed interest rate. You can use the following formula to calculate the daily amount of interest that would accrue on your $10,000 remaining loan balance:

(0.055 / 365) X $10,000 = $1.51

You can apply this formula by converting your 5.50% interest rate into a decimal (0.055) and dividing it by 365 days in a year to determine your interest rate factor. Then you multiply your interest rate factor by your $10,000 remaining loan balance. This calculates your daily interest charges as about $1.51.

Step 2: Calculate Daily Costs

Simple interest is charged as a percent of your outstanding principal. In student loan terminology, the interest typically accrues on a daily basis.

Using the above example of a $10,000 federal student loan balance with a 5.50% fixed rate, your lender would charge about $1.51 in daily interest on your $10,000 balance.

This means that every day that you continue to owe $10,000 on a simple interest loan with a 5.50% interest rate, you accrue $1.51 in interest, which is added to the principal amount you owe. In other words, it costs you about $1.51 per day in order to have your $10,000 loan balance still outstanding.

Step Three: Calculate Monthly Costs

Once you know how much you’re paying in interest every day, you can determine how much you’re paying in interest every month.

In order to figure out how much cash you’re shelling out monthly to pay your accruing interest, you multiply your daily interest cost by the amount of days between payments, which is usually 30 days, or one month. Here it is with our example numbers from above:

$1.51 x 30 = $45.30

This $45.30 estimate of student loan interest is the amount that may accrue over the course of a month.

In general, federal and private student loans are amortizing loans. Student loan payments may cover interest charges and some principal, but you’ll typically pay more in interest at the start of your repayment term. A greater portion of your payment may go toward principal as you pay down your loan balance over time.

Simple vs Compound Interest

Student loans from the Federal Direct Loan Program are daily simple interest loans. In addition to Direct Unsubsidized Loans, these loans include:

• Direct Subsidized Loans

• Direct PLUS Loans

• Direct Consolidation Loans

Some private student loans may charge compound interest, which is typically more costly than simple interest. What is compound interest? It’s when a lender charges interest on interest and principal.

Simple interest is charged as a percent of your outstanding principal, whereas compound interest is charged on your accumulated unpaid interest and principal balance combined. This is typically more costly than simple interest, because compound interest charges interest on the unpaid interest.

If you have private student loans, you can ask your lender whether the finance charges are based on simple interest or compound interest.

When Does Interest Start on Student Loans?

Federal and private student loans typically begin accruing interest when they’re disbursed. There are some exceptions, of course, so the exact timing of when student loan interest accrual starts may depend on your loan type.

The difference between private vs. federal student loans is that federal student loans are made, insured, or guaranteed by the federal government under Title IV of the Higher Education Act of 1965. The federal Department of Education does not guarantee private student loans, which typically come from banks, credit unions, fintech companies, and state-based nonprofits.

Private education loans, including refinance student loans, are not eligible for Public Service Loan Forgiveness, Teacher Loan Forgiveness, or federal income-driven repayment (IDR) plans.

Refinancing your student loans with a private lender may reduce your interest rate. You may pay more interest over the life of the loan if you refinance with an extended term.

💡 Quick Tip: Ready to refinance your student loan? With SoFi’s no-fees-required loans, you could save thousands.

What Is Interest Capitalization?

Interest capitalization is when unpaid interest accrues over time and gets added to your principal loan balance. Interest capitalization can occur with federal and private student loans, but the U.S. Department of Education eliminated most instances of federal student loan interest capitalization effective July 2023.

A federal student loan borrower who exits a period of deferment on an unsubsidized loan or who overcomes a partial financial hardship on the Income-Based Repayment (IBR) plan may face capitalized interest. Federal student loan interest capitalization can also occur upon loan consolidation.

Federal student loan borrowers on the IBR plan can consider switching to the Saving on a Valuable Education (SAVE) Plan. The SAVE Plan is the most affordable repayment plan for federal student loans, according to the Department of Education.

Borrowers who earn less than 225% of the federal poverty guideline (or less than $32,805 for a single borrower and $67,500 for a family of four in 2023) don’t have to make any payments under the SAVE Plan. Beginning July 2024, SAVE Plan payment amounts are based on 5% of discretionary income for undergraduate loans, 10% for graduate loans, and a weighted average for borrowers who have both.

What Is Student Loan Amortization?

As mentioned earlier, federal and private student loans are amortizing loans. That means you’ll typically pay more in interest at the start of your repayment term and less toward interest as you pay down your loan balance over time.

There are variable and fixed-rate student loans, but federal student loans issued after July 1, 2006, have a fixed rate. A variable rate can fluctuate with the market, whereas a fixed rate remains the same over the life of the loan. Amortization refers to the amount of principal and interest you pay each time you make a loan payment.

It’s possible for negative amortization to occur, which is when your monthly payment is low enough that it doesn’t cover the interest charges for that month. Negative amortization causes your loan balance to grow.

💡 Quick Tip: It might be beneficial to look for a refinancing lender that offers extras. SoFi members, for instance, can qualify for rate discounts and have access to financial advisors, networking events, and more — at no extra cost.

The Takeaway

Calculating student loan interest is a crucial step in understanding the true cost of your education and managing your debt effectively. By knowing how interest accrues and compounds, you can make informed decisions about repayment strategies, such as making extra payments or choosing a different repayment plan.

With SoFi, refinancing is fast, easy, and all online. We offer competitive fixed and variable rates.

FAQ

How does compound interest differ from simple interest on student loans?

Compound interest is charged on both the principal and any unpaid interest, while simple interest is charged only on the principal — making compound interest more costly over time.

What type of interest do private lenders charge?

Many private loans charge simple interest, but some use compound interest, so it’s important to check your loan terms with your lender.

What type of interest do most federal student loans use?

Federal student loans typically use daily simple interest, where interest is calculated only on the current principal — not on unpaid prior interest.

SOSLR-Q325-064

Sep

2025

7 Facts You Didn’t Know About Student Loan Debt

By SoFi Editors | Student Loans, student_loan | No Comments

Table of Contents

1. Americans currently owe over $1.8 trillion on their student loans.
2. The average student loan balance is more than $39,000.
3. Individual debts vary widely.
4. Current student debt varies widely by state and college.
5. Student loan debt disproportionately impacts women and borrowers of color.
6. Americans with student debt are likely to have multiple loans.
7. The number of borrowers defaulting on their student loans is in the seven figures.
The Takeaway
FAQ

These days, a college education is considered a luxury for many American families. For the 2024-25 school year, a full-time student could expect the annual tuition price for a public, four-year, in-state school to be $11,610, and for a private nonprofit school, the cost jumped to $43,350, according to the College Board’s latest data. Those figures reflect a year-over-year 2.7% and 3.9% jump respectively, before adjusting for inflation.

Multiply that by four years, add out-of-state or private school tuition, or pursue an advanced degree, and it’s easy to see why so many students and their parents have to borrow money to cover the cost of tuition and related school expenses. In fact, 42.5 million borrowers have federal student loans, which equates to about 93% of all student loan debt.

You might be one of them or have a family member or close friend who is. But how much do you really know about student debt? Here, we have the information and answers you need to know about the cost of college and student loan debt.

Key Points

• Americans owe over $1.81 trillion in student loan debt, making it the largest form of consumer debt after mortgages and HELOCs.

• The average balance is $39,075 for federal borrowers and higher for private loans, with Gen Xers carrying the largest average debt at $46,556.

• Debt levels vary widely — from under $1,000 to over $200,000 — and by state, school, and program, with Washington, D.C. averaging nearly $55,000 per borrower.

• Women and borrowers of color are disproportionately impacted: Black graduates owe $25,000 more on average than white peers, and women hold 64% of all student loan debt.

• An average of 6.24% of student loans are typically in default, underscoring the long-term financial risks of student loan debt.

1. Americans currently owe over $1.8 trillion on their student loans.

That was the cumulative student loan balance among American consumers as of August 2025. A decade ago, that figure was closer to $1.1 trillion. Student loans are now the largest form of consumer debt in the U.S. other than mortgages and HELOCs — exceeding car loans and credit card debt.

2. The average student loan balance is more than $39,000.

The average federal student loan borrower today owes $39,075. Borrowers with private loans owe even more: as high as $42,673, on average.

When divided up by generation, Generation X carries the highest average balance at $44,240. Baby Boomers come in second, with balances averaging $41,877. Millennials have the next-highest average balance of $40,438, followed by the Silent Generation at $31,106, and Gen Z with $22,948.

Recommended: Average Student Loan Debt

3. Individual debts vary widely.

The average debt is just that — the average. Recent figures show that student loan balances are as varied as age, state and program statistics. Total balances can range from less than $1,000 to more than $200,000, depending on the borrower.

This may not come as a surprise when compared to the total cost of attending college. For the 2024-25 school year, the University of Southern California (USC) topped the list of most expensive schools at $71,647 a year for tuition and fees, according to U.S. News and World Report. On the other hand, a handful of schools, including Berea College in Kentucky and College of the Ozarks in Missouri, offer free college tuition to students who qualify.

4. Current student debt varies widely by state and college.

While not technically a state, Washington, D.C. topped the list of states with the highest student debt, with an average of $54,561 — more than $10,000 higher than the next-highest state, Maryland, which averaged $43,781. The bottom of the list (or perhaps the top, depending on your point of view) includes North Dakota, Wyoming, and Iowa, all with less than $31,000.

Likewise, the program students pursue can have a huge impact on the amount of student debt facing graduates. The cost of graduate school can vary widely by program. Specialized degrees — medicine, law, or pharmacy, for example — could leave students facing even higher debt burdens, sometimes upwards of $100,000.

5. Student loan debt disproportionately impacts women and borrowers of color.

Student loan debt can have a number of devastating consequences for borrowers of all backgrounds. It’s shown to make major life milestones such as buying a home and starting a family less attainable. And for those who can’t afford their payments, student loan default can wreak havoc on their credit and overall finances.

However, certain borrowers are disproportionately burdened by student loan debt. For instance, Black college graduates owe an average of $25,000 more in student loan debt than white college graduates. And four years after graduation, Black students owe an average of 188% more than what white students borrowed.

Additionally, Hispanic and Latino borrowers were the most likely to delay getting married and having children due to student loan debt.

Further, 64% of student loan debt is held by women, with the highest average amount of debt belonging to Black women.

6. Americans with student debt are likely to have multiple loans.

The Department of Education currently contracts a few different loan servicers . The federal student loan will be assigned to a loan servicer when it is disbursed. For borrowers with multiple student loans, it is possible that they’d have multiple loan servicers. That could be a lot to juggle, and one reason borrowers may consider federal student loan consolidation.

7. The number of borrowers defaulting on their student loans is in the seven figures.

As of 2025, approximately six million borrowers are in default on their student loans. This represents over 10% of federal student loan balances that are either delinquent or in default, according to the New York Fed’s May 2025 report.

Risk factors for student loan default can include having other forms of debt, such as a credit card balance, car payment, or mortgage. And defaulting on loans can also put borrowers at risk for having other bills, such as medical expenses, end up in collections as well.

What’s to be done? Even if you just stop paying on your student loans, they won’t go away. And in the meantime, interest will continue to accrue and, in some cases, capitalize (along with penalties and other downsides to nonpayment, like being sent to collections).

One way to potentially lower monthly student loan payments is by refinancing student loans to extend your loan term, get a lower interest rate than what you currently have, or both. (Note that refinancing federal loans makes them ineligible for federal benefits and protections, such as income-driven repayment, Public Service Loan Forgiveness, and deferment and forbearance. Also, lengthening your loan term may mean paying more in interest over the life of the loan.)

The Takeaway

Student loan debt has topped $1.8 trillion in America today, making it the next-largest debt category after mortgages and HELOCs. Tens of millions of Americans have student loan debt, with the average amount hovering around $40,000. These figures aren’t being shared to scare you, but rather to encourage you to think early and often about how to manage any student loan debt you may carry. For instance, student loan refinancing may help you better manage repayment.

With SoFi, refinancing is fast, easy, and all online. We offer competitive fixed and variable rates.

FAQ

Which age group has the highest amount of student debt?

Currently, Gen X carries the most student debt per person, followed by Baby Boomers, Millennials, the Silent Generation, and Gen Z.

Who owes the most student debt?

According to the Education Data Initiative, Black students owe an average of 188% more than white students, according to data gathered four years after graduation.

How common is student debt?

Student debt is very common, with more than 40 million American adults carrying federal student loan debt. That means at least one in six people likely owe money for their education.

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.

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

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Sep

2025

A Guide to Student Loan Refinancing Without a Cosigner

By Ashley Kilroy | Fresh Out of School, Student Loans, student_loan | Comments Off

Table of Contents

What Does It Mean to Refinance Student Loans Without a Cosigner?
Benefits of Refinancing Student Loans Without a Cosigner
Downsides of Refinancing Student Loans Without a Cosigner
How to Refinance If You Can’t Find a Cosigner
Tips on Refinancing Student Loans Without a Cosigner
The Takeaway

Refinancing your student loans can be an excellent way to save money on interest, lower your monthly payment, or consolidate student loan debt. However, refinancing with a private lender makes it so you lose access to federal student loan benefits. This is true whether you choose to refinance with or without a cosigner.

A cosigner is someone who takes on loan repayment responsibility if the primary borrower falls behind on payments. If you want to refinance without a cosigner, you must meet the loan criteria and pay the debt on your own.

If refinancing seems like a reasonable course of action to make your student loans more manageable, here’s what you need to know.

Key Points

• Refinancing student loans without a cosigner requires meeting financial criteria like credit score and income.

• It provides financial independence and helps build credit.

• Drawbacks include potentially higher interest rates and loss of federal loan benefits.

• Consider lenders that use alternative credit checks if qualifying is tough.

• Compare lenders and prequalify to find the best refinancing terms.

What Does It Mean to Refinance Student Loans Without a Cosigner?

Refinancing your student loans means you take out another loan with a refinance lender to pay off your outstanding student debt balance. You then make monthly payments to the new refinance lender. The goal of refinancing is to save money by qualifying for a lower interest rate and.or more favorable terms. Be aware, though, that refinancing disqualifies you from federal student loan forgiveness programs. More specifically, you won’t be able to access such programs as income-driven repayment, deferment and forbearance, and Public Service Loan Forgiveness.

Like other types of credit, you can apply for a student loan refinance with a cosigner. Borrowers who can’t qualify independently for credit typically apply with a cosigner who can boost their application odds and help them qualify for the most competitive rates. Additionally, the cosigner takes on the responsibility of the debt. If you default on your loan payments, the cosigner will inherit the responsibility of repayment.

When you refinance your student loans without a cosigner, it means that you’re fully responsible for the loan. It also means that you must meet the approval requirements, such as having a good credit score and being in good financial standing.

Benefits of Refinancing Student Loans Without a Cosigner

Refinancing your student loans without a cosigner comes with a few benefits.

Financial Independence

Refinancing student loans without a cosigner is a good way to build financial confidence. Applying for and making payments on your refinance loan may give you a sense of accomplishment. The confidence you build from paying off your refinance loan can trickle into other aspects of your life and set you up for a financially secure future.

Not only that, but repaying student loans can help you build credit as long as you make your payments on time each month.

You’re Solely Responsible for the Debt

If you choose to refinance your student loans without a cosigner, you’re allowing yourself to build your credit and take full responsibility for your debt.

When you refinance with a cosigner, you’re both equally responsible for the debt. If you make your payments on time, this can be a good thing. However, you both may experience financial consequences if you default on your student loan payment. Since the cosigner is also responsible for the debt, default could hurt both of your credit scores and chances of getting new credit.

Damaging your cosigner’s credit could cause a rift in your relationship, and no one wants that. If you refinance without a cosigner, any financial distress will only impact your finances.

Downsides of Refinancing Student Loans Without a Cosigner

While refinancing your student loans without a cosigner can improve your financial confidence, there are also some drawbacks to not applying with a cosigner.

Potentially Higher Interest Rates

Your credit score helps lenders determine your interest rate. Usually, those with the highest credit scores get the most favorable rates. Because of that, including a cosigner with excellent credit on your loan application can be advantageous, even if you meet the eligibility criteria yourself. A cosigner can enhance your creditworthiness and reduce the perceived risk, making you a more attractive borrower. This could result in being offered a lower interest rate.

Remember, the lower the interest rate, the more money you can save on your loan.

Can Be Harder to Get Approved

Finding a loan can be challenging if you don’t meet a lender’s refinance eligibility requirements. While you can refinance your student loans without a cosigner, most lenders require a credit score of at least 670 and a debt-to-income ratio below 40% to qualify for the best rates.

Adding a cosigner helps improve your odds because they take on the risk of the debt, too.

You’ll Lose Access to Federal Benefits

When you refinance your student loans with a private lender, whether you use a cosigner or not, you lose access to federal protections. For example, if you’re struggling to pay your federal student loans, you can enroll in income-driven repayment. With this plan, your payment is based on your income and your family size, possibly bringing it down to zero. Make sure you don’t foresee yourself ever needing this or other federal benefits before deciding to refinance your student loans.

How to Refinance If You Can’t Find a Cosigner

When you refinance your student loans without a cosigner, you must provide essential information to prove your eligibility. Most lenders require borrowers to be 18 years or older, be employed or have income from another source, and have a decent credit score. Here are some other requirements it’s important to be aware of.

Qualifying With Your Own Credit Score

Lenders use various factors to determine what credit score makes you eligible for a refinance loan. The FICO® credit score scale ranges from 300 to 850, and those with the highest scores will qualify for the most competitive rates and terms.

Typically, lenders require primary borrowers to have at least a 670 credit score to qualify. If your credit score isn’t quite there yet, it may serve you best to refinance your student loans with a cosigner.

Debt-to-Income Ratio Requirements

Another factor lenders consider is your debt-to-income ratio, or DTI. This ratio informs lenders about the proportion of your monthly income utilized to repay debts compared to the amount of income that flows into your household.

To calculate your DTI, add up your monthly debt and then divide by your income before taxes (gross income). The lower your DTI, the lower the risk you’ll be to lenders. Ideally, you’ll want a DTI below 40%. If your DTI exceeds this amount, focus on paying down debt before you refinance student loans without a cosigner.

Employment Status and Income

To qualify for a student loan refinance without a cosigner, you must either:

• be presently employed,

• generate revenue from alternative sources,

• or have an employment offer scheduled to commence within the next 90 days.

But remember, all lenders use different employment criteria to determine eligibility. Make sure you check with your lender to find out what they require.

Length of Credit History

Lastly, your credit history plays a role in your refinance loan approval. Your credit history includes your total debt, credit accounts (past and present), and your payment history. In addition, your credit history helps lenders determine how responsible you are with credit.

💡 Recommended: Refinancing Private Student Loans

Tips on Refinancing Student Loans Without a Cosigner

It’s possible to refinance student loans without a cosigner. Here are a few tips to get you started.

Find a Lender With an Alternative Credit Check

If you’re struggling to obtain approval for a loan without a cosigner, you may consider searching for a lender that employs an alternative credit screening process. Some lenders, for example, might provide a different pathway to approval that involves assessing your academic achievements, area of study, likelihood of graduation, and projected income to ascertain whether you qualify for a loan or refinancing.

Note that if you choose to use a lender with an alternative credit check, it could result in a higher interest rate for your loan refinancing.

Build Your Credit Score

Your credit score is one of the most important driving factors of loan approval. Usually, lenders want to see a credit score that hovers around 670 to qualify for a student refinance loan. If your credit score is less than 670, you may not qualify for the loan or you could receive a higher interest rate, which would defeat the purpose of refinancing.

It’s a good idea to take the time to build your credit before refinancing. Making on-time payments and paying down debt are two ways to do so.

Then, once you build your credit score, you can apply for a refinance loan and likely receive a more favorable rate.

Ensure You Have a Stable Income

Another critical factor lenders look at to determine your refinance loan approval is your income. If you just graduated college or are looking for a new job, you may need to hold off applying for refinancing until you have a stable income and can afford the new monthly payment.

Recommended: Student Loan Refinancing Calculator

Compare Lenders Before Applying

Student refinance loan criteria vary by lender, so comparing your options can increase your chances of approval and help you secure the most favorable rates and terms.

Most lenders will first prequalify you for the loan, which allows you to review the projected interest rates and conditions without committing to the loan. Prequalification only requires the lender to complete a soft inquiry of your credit, meaning it won’t impact your credit score.

Get a Cosigner Release on Your Student Loans

Another option is to proceed with a cosigner and, after that, seek a cosigner release for your student loan. This release implies that the cosigner is discharged from the loan obligation if you meet specific criteria, such as fulfilling a minimum payment requirement.

After the release is approved, the cosigner is no longer held responsible for your debt if you default on your loan.

The Takeaway

It is possible to refinance student loans without a cosigner if you have solid financial credentials, such as a good credit score, income, and DTI. However, in some cases, it may be wise to have a cosigner. For instance, a cosigner with a strong credit score could help you qualify for a lower interest rate, saving you money over the life of the loan.

With SoFi, refinancing is fast, easy, and all online. We offer competitive fixed and variable rates.

FAQ

Does refinancing a student loan release the cosigner?

Yes. When you refinance, you can remove the existing cosigner from the previous loan.

Can you refinance student loans without a cosigner?

Yes. As long as you meet the approval requirements, such as being employed, having decent credit, and having an income source, you can refinance your student loans without a cosigner.

Is it more difficult to refinance student loans without a cosigner?

The difficulty of approval depends on your financial situation. You may be fine qualifying without a cosigner if you have excellent credit and steady income. On the other hand, if your credit needs work or you’re unemployed, you may not qualify without a cosigner.

About the author

Ashley Kilroy

Ashley Kilroy is a seasoned personal finance writer with 15 years of experience simplifying complex concepts for individuals seeking financial security. Her expertise has shined through in well-known publications like Rolling Stone, Forbes, SmartAsset, and Money Talks News. Read full bio.

Photo credit: iStock/fizkes

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.

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

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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