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It may seem as if droves of college students collect diplomas every year, but of the students who start college, how many actually graduate?

The most recent data from the National Student Clearinghouse (NSC) Research Center reports that the six-year graduation rate for bachelor’s-degree-seeking full-time undergraduate students who enrolled in fall 2019 was 61.1%.

The graduation rate refers to the percentage of students who complete their program within 150% of the published time for that program. The NSC Research Center’s averages include students who transferred institutions, but individual schools’ figures don’t include those students. It’s important not to confuse graduation rates with retention rates, which refer to the percentage of students who continued at a particular school the next year.

Here, we’ll walk you through what the college graduation rate can tell you about a school and why it’s important, as well as outline a good graduation rate. We’ll also break down graduation rates by state and college, discuss some reasons why students might not graduate, and let you know how to overcome some of those obstacles.

What Do College Graduation Rates Tell Us?

If you’re a prospective student, understanding the difference between graduation rates and retention rates leaves you better prepared to work out how the schools on your list compare. Checking out the graduation rate of your first-choice college gives you a definite indication of whether that school is better or worse than average at getting students to the finish line. Average graduation rates also tell you which types of institutions are best at that key task. Based on the available statistics, private, nonprofit institutions graduate students at the highest rate.

Why Is Knowing the Graduation Rate Important for Selecting a College?

When it comes to researching colleges, different things matter to different students. Athletes may want to know more about athletic programs. English majors may want to know how many professors are published writers.

However, among all the different factors you can research, the graduation rate remains one of the most important for all prospective students to understand.

Why? The graduation rate not only lets you know how many students graduate in a timely manner but also serves as a gauge of other important points, such as student satisfaction. Still, it’s not the only metric you’ll want to consider when you’re choosing a college. Other priority considerations include teacher-to-student ratio, retention rate, loan default rates (which could indicate low incomes after graduation), and selectivity.

Two trusted websites compile information on graduation rates for individual schools: College Navigator and College Results Online.

•   College Navigator: College Navigator compiles information from about 7,000 colleges and universities across the United States. The site breaks down both retention rates and graduation rates, and you can also filter rates by race/ethnicity and gender.

•   College Results Online: College Results Online also lists both graduation and retention rates for institutions. You can cross-index certain peer institutions against each other to compare rates.

What Is a Good Graduation Rate for a College?

The best graduation rates in the U.S. are over 90%, with many of the Ivy League schools falling into this bracket. For example, let’s take a look at a few graduation rates based on College Navigator data for the cohort that enrolled in fall 2017:

•   Harvard University: 97%

•   Yale University: 96%

•   Cornell University: 95%

You can also find high graduation rates within highly selective liberal arts colleges:

•   Claremont McKenna College: 95%

•   Amherst College: 93%

•   Davidson College: 92%

It’s important to remember that since these highly selective schools only admit students with top-tier credentials, they naturally attract some of the most driven students on the planet, resulting in a high graduation rate.

So, what’s a good graduation rate for a college? Do these figures mean that a college with a graduation rate in the 80s or even the 70s isn’t a good school or that it isn’t the right school for you? Absolutely not. As we mentioned above, there are other factors in the mix as well, including your personal preferences and interests. The right fit for you may be a school with a 70% graduation rate. The better the fit, the more likely you are to graduate on time.

Lowest College Graduation Rates in the United States

Unfortunately, the colleges with the lowest graduation rates in the U.S. aren’t highly publicized. However, if, during your own research, you see a school that graduates students at or below 60%, you may want to probe the admissions counselor at that college for the reasons why rates are so low and find out more about how the college plans to improve.

Average College Graduation Rates in the United States

If we dig a bit further into the 2025 NSC Research Center report, it states that the average college graduation rate for the fall 2019 cohort was:

•   70.9% at public four-year institutions

•   74.6% at private nonprofit institutions

•   35.9% at private for-profit four-year institutions

Overall, 58.1% of male students and 64.3% of female students graduated within six years, with female students having a higher graduation rate at the following types of institutions:

•   Public institutions (74.3% female versus 67.7% male)

•   Private nonprofit institutions (77.6% female versus 71.3% male)

The National Student Clearinghouse (NSC) Research Center calculates graduation rates by tracking cohorts of first-time, degree-seeking college students to compile its report. Using data from over 3,750 colleges, it considers completion the earning of a certificate, associate, or bachelor’s degree, which could be at the starting school or any other institution.

College Graduation Rates by State

Here are the college graduation rates for the fall 2019 cohort by state, according to the NSC Research Center:

Numbers of College Graduates in the 21st Century

In the past 20 or so years, the number of college graduates has increased by a huge amount. According to information published by the Education Data Initiative, in 2000, approximately 1.24 million students graduated from college with a bachelor’s degree. In 2025, that number reached nearly 2.17 million.

Reasons Why College Students Don’t Graduate

Let’s turn the tables a bit and take a look at a few reasons why students might not graduate. Depending on the student, these may include issues such as the high cost of tuition, trying to balance work and school, or poor academic performance.

Cost

Increasing price tags aren’t a new reason for students to drop out of school. When it gets too expensive, they may feel there’s no solution but to leave. The 2025 affordability report of the National College Attainment Network found that for the average in-state student in the 2022-2023 academic year, a little over a third of public bachelor’s-granting institutions were affordable. Researchers based this on total tuition and living costs and an emergency expenses constant measured against grants, federal loans, federal work study income, an estimated family contribution, and estimated summer wages.

Recommended: What Is the Average Cost of College Tuition?

Balancing Work and School

Many undergraduates work part-time jobs to help pay their way through college. A lot of them get stuck in the quagmire of trying to keep up with both work and school, which can be a challenging balancing act. Many seasonal jobs for college students exist, which means you may be able to get a job during the summer instead of working during the school year.

Recommended: 3 Summer Jobs Ideas for College Students

Transferring

Transferring colleges sometimes means credits can get lost in translation. When colleges force transfer students to retake classes, it not only costs those students more financially, but they also have to spend extra time pursuing their degree. This sometimes means that students can face difficulty getting enough credits to graduate.

Poor Grades

Sometimes, students simply can’t make the grade. Even if it happens during just one semester, it can cause them to shy away from college altogether. In particular, first-generation college students, low-income students, and minority students are vulnerable and may question whether they really belong in college.

Being Denied a Student Loan

Being denied a student loan or other types of financial aid can be a huge deterrent to continuing in college. If you haven’t secured enough financial aid, remember that there are ways around it — including seeking a loan through a different lender.

Overcoming the Obstacles as a College Student

What can you do to overcome these obstacles and successfully graduate from college? Let’s find out. Here are a few things you can do to help you stay the course:

•   Get organized with everything — schoolwork, athletics, homework, and anything else that takes your time and attention.

•   Get support from family and friends.

•   Create healthy habits. Eat nutrient-dense meals, get enough sleep, and stay healthy.

•   Carefully consider the best ways to pay for college, and focus on managing your money.

•   Get to know professors and academic support professionals at your college or university.

•   Work on your time management skills so you have the time you need for important assignments.

•   Take care of your mental health. If you’re struggling to balance the many priorities of being a college student, reach out to family or friends for help. If you need additional support, contact your campus’s health and wellness center to see what counseling resources are available to students.

•   If you’re attending community college to begin with, investigate transfer options early on so you know how to make the transition as smooth as possible.

Ways to Fund College

Making sure you have a concrete plan to pay for college is one of the best ways to make sure you successfully graduate. Let’s walk through a few tips to make sure you have all your ducks in a row.

•   Fill out the Free Application for Federal Student Aid (FAFSA®). This is the first step in applying for federal financial aid, including grants, scholarships, and low-interest-rate federal student loan options.

•   Search for scholarships. Ask the college or university you plan to attend about the scholarships they offer. Don’t forget to search around in your community as well.

•   Get a work-study job. If you qualify for work-study, this can be an opportunity to earn some money for college expenses. In this federal program, you work to earn money, and your school pays you for that work, which it must do at least monthly.

•   Look into private loans. If you need to fill the gap between scholarships, grants, and federal student loans, look into private loans to help you make it across the graduation stage. These may lack the borrower protections afforded to federal student loans (such as deferment options or income-driven repayment plans) and are therefore generally considered only after you’ve exhausted other financing sources.

The Takeaway

A school’s graduation rate reflects the percentage of students who graduate within 150% of the published time frame. This is different from a school’s retention rate, which measures the percentage of students who remain at that school from year to year. A school’s graduation rate can be an informative benchmark as you evaluate and compare schools during the application process.

If you are a current college student, you can do a lot to make sure you stay the course, including taking care of yourself, using scholarships and grants to your advantage, getting academic help, and making sure (if necessary) that you have the right private loans to make it all happen.

Ready to find private student loans to make sure you get to throw your cap at graduation? Visit SoFi and learn more about private student loans and the low rates we have to offer. Our friendly experts can also help you decide on your best course of action.

FAQ

What is the average college graduation rate in the U.S.?

According to the NSC Research Center Yearly Progress and Completion report published in December 2025, the average graduation rate for the 2019 U.S. cohort was 61.1%. This rate can help you evaluate prospective institutions, comparing individual college graduation rates to the national average.

Which schools have the best graduation rates?

Private nonprofit schools tend to have the highest graduation rates, followed closely by public schools. Private for-profit schools have lower rates, while Ivy League universities, such as Harvard and Yale, have particularly high rates.

How can students increase their chances of graduating?

Key reasons why students leave college without graduating include cost, academic difficulties, and administrative problems with transferred credits or loans. The best way to avoid these problems is to plan carefully and stay organized. Consider different colleges and their benefits, look at various options for funding, and build a network for practical and emotional support.

Photo credit: iStock/digitalskillet

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student loans are not a substitute for federal loans, grants, and work-study programs. We encourage you to evaluate all your federal student aid options before you consider any private loans, including ours. Read our FAQs.

Terms and conditions apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. SoFi Private Student loans are subject to program terms and restrictions, such as completion of a loan application and self-certification form, verification of application information, the student's at least half-time enrollment in a degree program at a SoFi-participating school, and, if applicable, a co-signer. In addition, borrowers must be U.S. citizens or other eligible status, be residing in the U.S., Puerto Rico, U.S. Virgin Islands, or American Samoa, and must meet SoFi’s underwriting requirements, including verification of sufficient income to support your ability to repay. Minimum loan amount is $1,000. See SoFi.com/eligibility for more information. Lowest rates reserved for the most creditworthy borrowers. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change. This information is current as of 4/22/2025 and is subject to change. SoFi Private 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.

SOISL-Q126-016

Attending college in the U.S. can be expensive. In addition to tuition and fees, students may need to cover the cost of room and board, along with other expenses, such as books and lab fees.

To help students going to college manage their budget, it’s important that they carefully weigh their options when it comes to public and private schools. In-state tuition at a public college can be far cheaper than out-of-state tuition or a private nonprofit school.

College Tuition in the United States

The United States has some of the world’s highest tuition costs, and prices have risen steeply over time, driven in part by increasing demand and the availability of loans. More recently, however, factors such as the increased availability of financial aid have kept average net tuition prices relatively stable.

Colleges have also added amenities to their campuses to help attract higher-paying students. While appealing to many students, this has a knock-on effect on the cost of attendance. Schools are also spending more on administration.

Average College Tuition Costs

The cost of college varies depending on whether students choose to attend public or private institutions. Public schools generally have different costs for in-state and out-of-state tuition.

The average tuition cost for 2025-2026 for an in-state student at a public four-year school is $9,750 per year. A student attending a public four-year program from out of state can expect to pay an average of $28,386 per year, according to the Education Data Initiative.

Students who wish to attend a private nonprofit four-year college will pay an average of $38,421 per year.

In addition to tuition and fees, students also have to cover other costs, such as room and board and transportation. These additional expenses will vary depending on whether you’re living on or off-campus, but they can add more than $10,000 to the annual cost of attending college. The average annual cost of attendance for students attending a public four-year in-state program is $27,146. Out-of-state students face an average of $45,708 per year. And for students attending a private nonprofit four-year program, the average annual cost of attendance is $58,628.

Recommended: What Is the Average Cost of College Tuition?

States With the Cheapest College Tuition

College tuition prices for public four-year institutions vary widely by state. Generally speaking, public colleges in the South and the West are the cheapest to attend. Colleges in the Northeast are the most expensive. Vermont has the most expensive in-state tuition and fees, topping out at an annual average of $19,223. New Hampshire is a close second at $18,839. To learn more, take a look at the annual study published by the College Board that tracks trends in college pricing and financial aid.

Here’s a look at the states with the cheapest in-state tuition and fees at four-year flagship university programs over the 2025-2026 school year.

Florida

University of Florida
In-state tuition and fees: $6,380
Out-of-state tuition and fees: $30,900

North Carolina

University of North Carolina at Chapel Hill
In-state tuition and fees: $7,020
Out-of-state tuition and fees: $43,152

Wyoming

University of Wyoming
In-state tuition and fees: $8,245
Out-of-state tuition and fees: $24,865

Montana

University of Montana
In-state tuition and fees: $9,188
Out-of-state tuition and fees: $34,312

Idaho

University of Idaho
In-state tuition and fees: $9,400
Out-of-state tuition and fees: $28,636

South Dakota

University of South Dakota
In-state tuition and fees: $9,687
Out-of-state tuition and fees: $13,299

Mississippi

University of Mississippi
In-state tuition and fees: $9,990
Out-of-state tuition and fees: $30,150

Utah

University of Utah
In-state tuition and fees: $10,004
Out-of-state tuition and fees: $31,748

Georgia

University of Georgia
In-state tuition and fees: $10,034
Out-of-state tuition and fees: $30,878

Nevada

University of Nevada, Reno
In-state tuition and fees: $10,309
Out-of-state tuition and fees: $28,941

Arkansas

University of Arkansas
In-state tuition and fees: $10,496
Out-of-state tuition and fees: $29,146

West Virginia

West Virginia University
In-state tuition and fees: $10,752
Out-of-state tuition and fees: $30,432

Paying for College

Because the price of college tuition, fees, and room and board can be so high, many students have to take out student loans and apply for grants and scholarships to make college affordable. Students may take out federal loans or private loans to help them pay for school. They’ll have to repay these loans through a series of monthly payments with interest.

The U.S. Education Department offers federal loans under the William D. Ford Federal Direct Loan Program. This program includes four types of federal loans:

•   Direct Subsidized Loans are available to undergrads who demonstrate financial need. The Education Department covers the interest on these loans while the students are enrolled in school at least half-time.

•   Direct Unsubsidized Loans are available to undergrads, graduate students, and professional students and are not based on need.

•   Direct PLUS Loans are for graduate and professional students and parents of dependent undergrads. Eligibility is not based on financial need. Effective July 1, 2026, new PLUS loans will no longer be available for grad and professional students. However, borrowers who already received a grad PLUS loan can continue borrowing under current terms through the 2028-2029 school year.

•   Direct Consolidation Loans allow students to combine federal loans into a single loan.

To apply for federal student loans and other forms of federal aid, students must fill out the FAFSA®, or Free Application for Federal Student Aid, each year.

Recommended: FAFSA Guide

Private student loans may be available through private lenders, such as banks and online lenders. These institutions set their own terms, interest rates, and loan amounts. When determining individual rates and terms, lenders will generally evaluate the applicant’s credit history, among other factors. Private student loans are typically considered a last resort when it comes to financing college because they aren’t required to include the same borrower benefits or protections (such as income-driven repayment options) as federal student loans.

There are also various sources of financial aid that can help students pay for school. This aid can come from federal, state, school, and private sources.

•   Grants, such as federal Pell Grants, are a form of financial aid that doesn’t need to be paid back, unlike student loans.

•   Scholarships are funds offered to students, often based on academic performance, an area of study, or special talents. Scholarships also do not generally need to be repaid.

•   Work-study programs allow students to earn money while they’re in school. Students may qualify for the federal work-study program based on financial need.

•   Many schools offer financial aid or scholarships.

The Takeaway

College can be a huge expense, but there are also a lot of benefits of a college education. As you’re considering schools, it’s important to evaluate all of your options and think seriously about choosing one that’s in your budget, as well as finding manageable ways to pay for it. That may mean attending a public school in the state you live in. And if you live in one of the states with the cheapest in-state tuition, you may pay less than $10,000 a year to go to school.

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

FAQ

How much does college cost on average in the US?

The estimated average cost of attendance for one year of college (living on campus) is $27,146 for in-state students at public four-year schools, $45,782 per year for out-of-state students at public four-year schools, and $58,628 for students at private nonprofit schools.

What state has the cheapest tuition?

States with the cheapest in-state tuition include Florida, Wyoming, and Montana. For out-of-state students, Florida, South Dakota, and North Dakota have some of the cheapest tuition.

What funding options are available?

By filling in the FAFSA, students can apply for federal loans. Direct Subsidized Loans are based on need, while Direct Unsubsidized Loans and Direct PLUS Loans are not need-based, and Direct Consolidation Loans allow students to combine federal loans. Further options may include grants, scholarships, work-study programs, and school-based financial aid.

Photo credit: iStock/Bet_Noire

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student loans are not a substitute for federal loans, grants, and work-study programs. We encourage you to evaluate all your federal student aid options before you consider any private loans, including ours. Read our FAQs.

Terms and conditions apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. SoFi Private Student loans are subject to program terms and restrictions, such as completion of a loan application and self-certification form, verification of application information, the student's at least half-time enrollment in a degree program at a SoFi-participating school, and, if applicable, a co-signer. In addition, borrowers must be U.S. citizens or other eligible status, be residing in the U.S., Puerto Rico, U.S. Virgin Islands, or American Samoa, and must meet SoFi’s underwriting requirements, including verification of sufficient income to support your ability to repay. Minimum loan amount is $1,000. See SoFi.com/eligibility for more information. Lowest rates reserved for the most creditworthy borrowers. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change. This information is current as of 4/22/2025 and is subject to change. SoFi Private 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.

SOISL-Q126-012

The average cost of college tuition varies widely based on location and whether the school is public or private. The average cost of college for in-state students at a four-year institution in 2024-25 is $11,610. Students at private nonprofit four-year institutions paid over $43,000, on average.

Read on for more information about average tuition costs and other expenses facing college students.

The Average Cost of College

According to the College Board’s annual “Trends in College Pricing” report, the average cost of attending a four-year college as an in-state student at a public university during the 2024-25 school year is $11,610. For an out-of-state student attending a public four-year college, the average rose to $30,780.

The average cost of attending a private four-year institution is $43,350. These averages are based on the published price at a college or university. This includes tuition, fees, and room and board.

Cost is a major factor for students deciding which school to attend. According to the annual Sallie Mae survey “How America Pays for College 2024,” 81% of parents and students eliminated a college based on cost.

Historical Average Cost of Tuition

The cost of tuition has increased dramatically over time. For the 2004-05 school year, the average cost of college tuition at a public four-year institution was $5,132 for a student receiving in-state tuition. In 20 years, tuition rose to $11,610 for the 2024-25 school year.

U.S. News reviewed tuition costs at 436 ranked National Universities, those universities included as part of the annual college rankings. According to their data, the average tuition and fees at private National Universities increased by 126% in 20 years from 2004 to 2024. During the same period, at four-year public National Universities, tuition for out-of-state students increased by 112%, and for in-state students it rose by 133%.

Average Total Cost of College

A traditional undergraduate college degree takes four years to complete, which means four years of tuition costs. According to EducationData.org, the cost of college has risen, on average, about 7.0% annually since 2000.

Year-over-year changes can fluctuate greatly, however, so it can be challenging to predict exactly how much a student will pay in tuition costs over the course of their degree. For example, the “Trends in College Pricing” report found that in-state tuition costs at public four-year institutions increased just 2.7% from the 2023-24 to the 2024-25 school year. For that same time period, tuition increased 3.9% at private nonprofit four-year institutions.

To get a rough estimate of how much college will cost in its entirety, you can take the current tuition rate and multiply it by four. Keep in mind this won’t account for any increase in the cost of tuition.

Average Additional College Expenses

Tuition generally makes up the majority of a student’s college expenses. But there are other fees and costs to factor in, including room and board, books, and other supplies. As you plan how to pay your tuition, students might also consider general living expenses.

What Is the Cost of Room and Board?

Some colleges charge “comprehensive fees,” which reflect the total for tuition, fees, and room and board. Other schools charge room and board separately from tuition and fees. The cost of room and board typically accounts for the cost of housing (i.e., a dorm room or on-campus apartment) and the meal plan.

The average cost of on-campus room and board for the 2024-25 school year is $12,917 for four-year public institutions for both in-state and out-of-state students, and $13,842 for four-year private nonprofit institutions.

The actual cost will vary depending on the type of housing you live in and the meal plan you choose. Housing can be another determining factor for students. About 73% of students attend college in their home state, and 36% live at home or with relatives to save on housing costs.

The Cost of Extra Classes

Tuition at some schools covers the cost of a certain number of credit hours. Your credit hours can vary each term depending on the classes you enroll in. If you exceed the number of credit hours covered by tuition, you may pay an additional fee.

Books and Supplies

On top of those expenses, don’t forget to budget for books and supplies. The average college student attending a public, four-year college spends $1,220 on textbooks per year.

Transportation

Transportation is another major category of expenses for college students. Will you have a car on campus? If so, plan to pay for gas, insurance, and a parking permit. How often do you plan to go home? Will a trip to visit your family require airfare?

Other Living Expenses

Then there are additional personal expenses like eating out, laundry, and your monthly cell phone bill. To get an idea of how much you’ll actually spend every month, it helps to review your current spending.

College may be the first time you’ve had to learn how to budget. Consider sitting down with your parents, an older sibling, or a trusted friend who has already navigated their first year of college to get an idea of the expenses you may encounter.

Paying for College

There are, of course, options available to help you finance your education. Whether you’re going to college for the first time or returning for further education, consider looking into the following options:

First Thing’s First: The FAFSA

A common first step for students interested in securing federal financial aid is to fill out the Free Application for Federal Student Aid (FAFSA®). As you get ready to apply, pay attention to deadlines, as they vary by school and state. After you fill out the FAFSA, you’ll receive an offer letter detailing the type of aid you qualify for. This may include scholarships and grants, work-study, and federal student loans.

Planning ahead is one way to set yourself up to successfully pay for college. If you’re not quite ready to fill out the FAFSA yet, you can use the Federal Student Aid Estimator at StudentAid.gov/Aid-Estimator/ to get an idea of how much aid you might qualify for.

Recommended: Important FAFSA Deadlines to Know

Scholarships and Grants

Scholarships and grants can be immensely helpful when it comes to paying for college, since that money doesn’t need to be repaid. In addition to filing the FAFSA, you can check to see if there are any other scholarships for which you may qualify. There are also online resources and databases that compile different scholarship opportunities.

The federal work-study program is another form of aid that can help students pay for college. If you are eligible for work-study and receive it in your financial aid award, you may still have to find your own employment at your university. Check with your school’s financial aid office to find out if your school participates and whether they will place you or if they have a work-study job board.

Of course, other jobs for college students are available, but students will have to pursue those on their own.

Recommended: Grants for College

Student Loans

Student loans offer another avenue for students to finance their college education. Unlike scholarships and grants, however, student loans must be repaid. There are two kinds of student loans — federal and private.

Federal Student Loans

Applying for student loans requires filling out the FAFSA. Federal loans for undergraduates can be either subsidized or unsubsidized. With a subsidized loan, borrowers won’t be responsible for paying the interest that accrues on the loan while they are actively enrolled in school at least half-time. With an unsubsidized loan, borrowers are responsible for paying the accrued interest during all periods.

Whether subsidized or unsubsidized, loan repayment generally doesn’t begin until after graduation (or a student drops below half-time) and a grace period.

Most grace periods for federal loans are six months. Interest rates on federal student loans are set by the government and are fixed for the life of the loan.

Federal loans aren’t guaranteed to cover your undergraduate or graduate school tuition costs. There are borrowing limits that restrict the amount of federal loans a student can take out each year. For example, a first year undergrad, dependent student is currently allowed to borrow $5,500 in federal loans. In some cases, private student loans may be used to fill in the gaps.

Private Student Loans

Private student loans are offered by banks, credit unions, and online lenders. Terms and conditions of a private student loan are set by the individual lender.

Private lenders will likely review a borrower’s credit history and other financial factors in order to determine what type of loan they may qualify for. If an applicant is applying with a cosigner, private student loan lenders will look at their financial background as well, which might include things like their credit score and current income.

While federal student loans come with fixed interest rates, private student loans can have fixed or variable interest rates. Variable interest rates may start lower than fixed rates, but they rise and fall in accordance to current market rates.

Private student loans don’t carry the same benefits and protections offered by federal student loans — such as income-driven repayment and loan deferment options. Some lenders may offer their own benefits, though.

The Takeaway

The average cost of college tuition for the 2024-25 school year was $11,610 for students paying in-state tuition at a four-year public institution. For out-of-state students, the average was $30,780. At a private four year institution it was $43,350. Paying for college usually requires a combination of financing options, including savings, scholarships, grants, work-study, federal student loans, and even private student loans.

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

FAQ

How much does four years of college cost on average?

The average cost for four years of college varies based on the institution type. As of 2024, attending an in-state public college averages around $108,000, including tuition, fees, and living expenses. Private colleges are significantly higher, averaging over $230,000 for four years. Costs can vary further by location and program.

How much has college tuition increased in 2024?

In the 2024-2025 academic year, average tuition and fees increased by 2.7% for in-state students at public four-year institutions and by 3.9% at private nonprofit four-year institutions. These increases are below the general inflation rate of 3.1% for the same period.

What are ways to save money on college expenses?

There are many ways to save money on college expenses, including by attending in-state public colleges, starting at a community college, or enrolling in accelerated degree programs. You can apply for scholarships, grants, and work-study opportunities, use tax-advantaged 529 savings plans, minimize textbook costs through rentals or e-books, and reduce living expenses by commuting or sharing housing.

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student loans are not a substitute for federal loans, grants, and work-study programs. We encourage you to evaluate all your federal student aid options before you consider any private loans, including ours. Read our FAQs.

Terms and conditions apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. SoFi Private Student loans are subject to program terms and restrictions, such as completion of a loan application and self-certification form, verification of application information, the student's at least half-time enrollment in a degree program at a SoFi-participating school, and, if applicable, a co-signer. In addition, borrowers must be U.S. citizens or other eligible status, be residing in the U.S., Puerto Rico, U.S. Virgin Islands, or American Samoa, and must meet SoFi’s underwriting requirements, including verification of sufficient income to support your ability to repay. Minimum loan amount is $1,000. See SoFi.com/eligibility for more information. Lowest rates reserved for the most creditworthy borrowers. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change. This information is current as of 4/22/2025 and is subject to change. SoFi Private Student loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).

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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.

SOISL-Q424-048

A Master Promissory Note (MPN) is a legally binding document that outlines your promise to repay borrowed funds, along with the terms and conditions that govern your student loans.

Understanding how an MPN works can help you avoid surprises and make more informed borrowing decisions. From how long the agreement remains valid to what responsibilities you’re agreeing to, knowing the details of an MPN ensures you’re fully prepared before accepting student loan funds.

What Is a Master Promissory Note?

A Master Promissory Note (MPN) is a legal document that contains the terms and conditions for federal student loans. When you sign an MPN, you are promising to repay your loan(s) and any accrued interest and fees to the U.S. Education Department.

Borrowers with federal student loans can typically sign just one MPN that covers multiple years of borrowing, rather than signing a new MPN each year. This means you are accepting the amount of each year’s new loans under the terms of the existing MPN.

There are two types of MPNs:

•   Direct Subsidized/Unsubsidized Loan MPN: A student borrower must complete and sign this MPN before a school can make the first disbursement of a Direct Subsidized or Direct Unsubsidized Loan.

•   Direct PLUS Loan MPN: A graduate/professional student borrower or parent borrower must complete and sign this MPN before a school can make the first disbursement of a Direct PLUS Loan. Keep in mind that as of July 1, 2026, new Grad PLUS Loans will no longer be available. Those that received one before June 30, 2026 may continue borrowing under current terms through the 2028-29 academic year.

Key Information to Review in Your MPN

A promissory note will provide you with a wealth of information about your student loan (or loans). Here’s a closer look at what you’ll find in a Master Promissory Note.

Repayment Options

Federal loans come with several options to help you manage your debt post-graduation, such as income-driven repayment plans and forgiveness programs. These options are all outlined in your MPN. You’ll want to take time to review them, especially as you enter the repayment phase of your borrowing journey.

If you have private student loans, your promissory note will also outline your repayment options and any borrower benefits you have access to (such as reduced-payment plans or forbearance). Before signing the contract, you’ll want to review the repayment details and make sure everything you have discussed with your lender is reflected in the promissory note.

Student loan refinancing is an alternative repayment strategy that allows borrowers to replace one or more existing student loans with a new loan from a private lender, ideally at a lower interest rate or with different terms. While refinancing can simplify repayment and reduce monthly payments or total interest costs, it also converts federal loans into private debt, meaning borrowers will give up any federal benefits. Refinancing replaces your original MPN with a new agreement.

Deferment Options

Student loan deferment lets you postpone payments on your student loans for a certain period of time. You won’t have to pay your student loan bills during a deferment, but interest might accrue during this time, depending on your loan type.

Federal loans offer deferment during a number of different situations, including being enrolled in school at least half-time (and for six months after you graduate), being unemployed, economic hardship, and active military service. Under Trump’s One Big Beautiful Bill, however, loans made after July 1, 2027 will no longer be eligible for deferments based on unemployment or economic hardship.

Like federal student loans, private student loans are typically placed into deferment while you’re enrolled at least half-time in school, and you may also have a six-month grace period after you graduate before you need to start making payments. Interest will generally accrue on private student loans during a period of deferment. Private loans may also offer other deferment options, but every lender is different, so you’ll need to check your promissory note.

Recommended: Do Student Loans Build Credit?

Interest Rate: Fixed vs Variable

Interest rates on student loans can be fixed or variable. With a fixed-rate loan, your interest rate will remain the same for the life of the loan. With a variable-rate loan, the interest rate on the loan fluctuates based on a market benchmark or index rate.

Federal student loans have fixed interest rates, which are set each year by federal law. To view current interest rates for federal student loans as well as previous years’ interest rates, visit the U.S. Education Department’s website.

Private student loans may give you a choice of fixed or variable rates. Your rate and whether it’s fixed or variable will be listed in your loan’s promissory note. If the rate is variable, it may start off lower than a fixed-rate option, but could rise over time leading to higher payments.

Student Loan Fees

Your promissory note will also detail any additional costs, such as any student loan fees. For example, federal student loans and some private student loans charge an origination fee, which is a percentage of your loan amount. This fee is typically taken from the loan before it is dispersed, which means you receive less than the full loan amount you accepted. Since the origination fee is included in the principal, you will also pay interest on it (even though you did not receive those funds).

Other student loan fees you may see listed on a promissory note include application fees, late payment fees, and collection agency fees (in the event you default on your loan and it goes to collections).

Borrower Rights and Responsibilities

When you sign a Master Promissory Note, you have the right to clear disclosure of your loan terms, including interest rates, fees, repayment options, and conditions for deferment or forbearance. You’re also entitled to information about loan servicing, access to income-driven repayment plans (for federal loans), and protections such as grace periods and cancellation or discharge options if you qualify.

Your responsibilities as a borrower include repaying the loan on time, keeping your contact information current, and using the funds for approved educational expenses.

Recommended: What Happens to Student Loans When You Drop Out?

When Is the Promissory Note Signed?

In general, borrowers will need to sign the promissory note for their loans before receiving any funds. Students who are borrowing federal student loans are able to sign their master promissory note online by logging into their federal student loan account. Typically, you’ll need to sign only one MPN for multiple subsidized and unsubsidized loans, and it will be good for up to 10 years of continuous education.

A private student loan lender may allow you to sign a promissory note online, or you may need to print it out, sign, and send it via regular mail.

What if a Promissory Note Is Not Signed?

For federal loans, a signed promissory note is required before the loan is disbursed. So, failing to sign the promissory note could mean you won’t receive your funds, or at least won’t receive them until the promissory note is signed.

A signed promissory note is also generally required for disbursement of a private student loan, though each lender will have their own requirements.

Do You Need a New Promissory Note Every Year?

Private lenders typically require students to sign promissory notes for each loan taken out, which means you may sign a new promissory note every year. Generally, federal student loan borrowers can sign a one-time Master Promissory Note that is good for up to 10 years of continuous education.

Recommended: How Do Student Loans Affect Your Credit Score?

Do Your Parents Need to Sign?

If you are borrowing a private student loan and a parent is acting as your student loan cosigner, they will likely need to sign the promissory note.

If you’re taking out a federal student loan for your undergraduate education, you are the only borrower and your parents do not need to sign your MPN.

If a parent is borrowing a Parent PLUS Loan to help pay for your college education, however, they will need to sign an MPN. As with a student MPN, a parent needs to sign only a single MPN once every 10 years. The government can provide multiple loans based on one parent MPN.

How Long Does the Master Promissory Note Process Take?

According to the Education Department, most people complete their Master Promissory Note online in less than 30 minutes. When you log into your account to fill out your MPN, keep in mind that the entire process must be completed in a single session, since you cannot save your progress.

Recommended: Financial Aid vs Student Loans

The Takeaway

A Master Promissory Note is a binding agreement that defines your responsibility as a student loan borrower. By understanding what the MPN covers and how long it remains valid, you can make informed decisions, borrow with confidence, and avoid unexpected issues as you manage your student loans.

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.

FAQ

Do you have to do a master promissory note every year?

No, you do not have to sign a Master Promissory Note (MPN) every year for federal student loans. Once signed, it’s typically valid for up to 10 years and allows you to borrow multiple loans under that same MPN. MPNs are also not school-specific so you can typically use the same MPN even if you transfer colleges.

How do you get your student promissory note?

For federal loans, you can complete your Master Promissory Note on the Federal Student Aid website. It takes about 30 minutes to fill out and two to three business days to process. You will then be able to access (and download) your student promissory note by logging into your account. For private loans, you may be able to sign your promissory note online or you may need to print it out, sign it, and mail it to the lender. You’ll receive a copy of your promissory note along with your other loan materials.

How long does it take for a master promissory note to process?

Once you submit the Master Promissory Note (MPN) online, it usually takes about one to two business days for processing. This time frame allows for the U.S. Education Department to verify your information and communicate with your school regarding the loan. After your MPN is processed, your school will credit the loan funds to your account, and you can check your loan status on the Federal Student Aid website.

How do I get a copy of the promissory note for my student loan?

You can get a copy of your signed Master Promissory Note (MPN) for federal student loans by logging into your account on StudentAid.gov using your FSA ID. Navigate to your loan documents to find the MPN. You can then view, download, or print a copy for your personal records.

With a private student loan, your lender will typically provide you with a copy of the promissory note, along with several other documents, when they finalize the loan. If you can’t locate a copy, you can reach out to your lender and ask them to send you one.

Do I have to pay my student loans if I drop out of college?

Yes, even if you drop out of college, you’re still required to repay your student loans. Once you’re no longer enrolled in school at least half-time, student loans typically enter a grace period, which is often six months. After that, repayment begins. Dropping out does not eliminate your obligation to repay the debt, and failure to make payments could lead to loan default.

Will a student loan affect my credit score?

Yes, student loans directly affect your credit score. Once you take out a student loan, it becomes part of your credit report and, like other types of loans, can impact your payment history, length of your credit history, and credit mix. Making timely payments can help you build a positive credit history. However, missed or late payments can negatively affect your credit and score.

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.