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Americans now hold a total of $1.77 trillion in student debt (including federal and private loans). For many people, educational loans are the biggest debt burden they’ll ever face, and the prospect of having to pay them off can seem overwhelming.

You may be concerned about how you will resume federal loan payments in October (after a three-year pause) or, if you’re or still in school, after you graduate. If your finances have changed, you may wonder if your current payment plan still makes the most sense or if you can qualify for a forgiveness or forbearance plan. If you’re still in the process of getting loans, you likely have questions about how you will manage repayment and when it willl start.

Figuring all this out can be hard on your own. Fortunately, there are counseling services available to help you navigate student debt no matter what stage of the process you are in.

For example, the federal government offers free “entrance counseling,” as do many loan servicers and lenders. In addition, there are a number of student loan counseling services now available that promise to help you manage your student loan repayment. Among them, nonprofit credit counseling agencies tend to be the most trustworthy and affordable (in fact, an initial consultation is often free).

Here’s a look at how student loan counseling works and how to determine the best path for managing student loan debt.

What Not to Do If You Need Student Loan Help

If you have questions or concerns about your student loans, ignoring them generally isn’t the answer, especially if that means falling behind on student loan payments. At any given time, roughly 7% of student loans are in default.

Defaulting has serious consequences, since it is a major hit to your credit score, and student loans can’t be discharged in bankruptcy. Instead, regardless of your current situation, a solid plan can help you tackle your student loans in a way that fits your circumstances and goals.

When you’re ready to get help, however, you’ll want to be careful where you turn. There are shady companies out there offering advice and too-good-to-be-true solutions for eliminating your debt. Some of these student loan scams offer to discharge your loans or warn that you need to take advantage of a forgiveness program before they’re discontinued.

Many charge for services that are free if you have federal student loans and take action yourself. A little homework can prevent getting caught up in a scam. Below are some legitimate options for getting student loan counseling.


💡 Quick Tip: Some lenders help you pay down your student loans sooner with reward points you earn along the way.

What Is Student Loan Entrance Counseling?

Student loan entrance counseling is a mandatory exercise designed to inform federal loan recipients of their loan terms and responsibilities as borrowers. More specifically, the session covers student loan interest rates, repayment options, and the repercussions for default.

The Department of Education’s online module includes five sections with a range of loan-specific and financial topics, while schools have some discretion in how they deliver counseling sessions.

This requirement has been in place since the Federal Direct Loan program was created in 1992 with the goal of reducing delinquency.

When Do I Go For Student Loan Counseling?

If you’re borrowing federal student loans for the first time, student loan entrance counseling is a prerequisite for accessing funds. Therefore, it’s important to complete the session before the first loan disbursement.

Borrowers with Direct Subsidized and Unsubsidized loans, as well as graduate students taking out Direct PLUS loans, are required to participate in student loan entrance counseling. Students may be obligated to take additional entrance counseling at their chosen school too, so be sure to check with the financial aid office.

When Do You Need to Go Through Student Loan Entrance Counseling?

If you’re borrowing federal student loans for the first time, student loan entrance counseling is a prerequisite for accessing funds. Therefore, it’s important to complete the session before the first loan disbursement.

Borrowers with direct subsidized and unsubsidized loans, as well as graduate students taking out direct PLUS loans, are required to participate in student loan entrance counseling. Students may be obligated to take additional entrance counseling at their chosen school too, so be sure to check with the financial aid office.

Where Do I Go for Student Loan Counseling?

Whether you have federal or private student loans, there are services available to help you with financial wellness, budgeting, and understanding your loans.

Federal Student Loan Counseling

Before federal loans are disbursed, the government requires borrowers to complete student loan entrance counseling to understand their rights and what’s expected of them. The process is automated and online, and it takes up to half an hour to complete.

Similarly, when students graduate or are enrolled less than half-time, they must complete exit counseling online. Don’t just do this to check the box. The student loan exit counseling is designed to help you establish a solid foundation for dealing with student loans.

Loan Servicers

The government contracts with several loan servicers to handle federal student loans. It should be relatively easy to get in touch with a servicer by phone, email, or even online chat. It’s in the companies’ best interest to make sure you make payments.

Their agents typically work with borrowers to help them understand their debt, figure out the best repayment plan, and process requests for deferment or forbearance. The quality of advice can vary, but this can be a helpful first step for getting answers to questions or getting on track with repayment.

National Foundation for Credit Counseling

Founded in 1951, this is a nonprofit organization that offers financial counseling on various issues, including student loan debt. The group’s certified credit counselors work with people to help them understand the benefits and drawbacks of various student loan repayment plans, how to make payments affordable, whether consolidation makes sense for you, and how to reduce the overall interest you pay.

Counselors offer to provide a comprehensive plan for managing student debt, taking an individual’s entire financial situation into account, rather than looking at student loans in a vacuum. Though NFCC doesn’t provide services for free, fees are typically low or based on how much you afford.

Clearpoint

This is a nonprofit agency that offers student loan counseling . Their counselors examine your overall financial situation and discuss the best way forward, including repayment plans, consolidation, or rehabilitation.

They say they may suggest a debt management program if you are also having difficulty with credit card debt. The debt management program costs up to $50 , and the group says it will remove or reduce fees for clients with financial hardship. Student loan counseling through Clearpoint costs $99.

GreenPath

GreenPath , another nonprofit, offers to review all your loans and provide an “unbiased assessment” and a customized plan based on your situation.

The initial consultation is free but they also offer a higher tier of service if you want more in-depth analysis, or if you want them to serve as your advocate by contacting the loan servicer on your behalf, for a fee.

Why is Student Loan Entrance Counseling Important?

Figuring out how to get a student loan is just the beginning. Repaying loans is a long-term responsibility not to be taken lightly. In fact, the average borrower takes around 20 years to pay off their student loans.

If you’re in the process of taking out student loans, you’ll want to make sure you fully understand what the total cost of the loan will be and what repayment will look like, including what your payments will be, when they will start, and how long they will last. Student loan entrance counseling unpacks how interest accrues over time and best practices for managing repayment. This can help you minimize the total interest paid over the life of the loan and steer clear of late fees or default.

Lenders can report delinquent payments of 90 days or more to the major credit bureaus, which remain on your credit report for seven years.

Making the most of student loan entrance counseling can help you avoid these consequences and joining the 21% of borrowers whose student loan balance increases over the first five years of repayment.


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

The Takeaway

Student loan entrance (and exit) counseling is required for all federal student loan borrowers and is designed to inform borrowers of how student loans work, with the goal of minimizing the number of students who default on their student loans.

In addition, there are a number of nonprofit agencies that offer student loan counseling to borrowers who would like help navigating the student loan repayment process. Many of these organizations will offer some general student loan counseling for free, while more in-depth help typically carries a fee. Many private lenders will also offer guidance on repayment free or charge.

If you already have student loans, you may find that student loan refinancing makes sense for your repayment strategy. If, on the other hand, you’re still in the process of financing for your education, you may want to explore tapping a variety of options, including federal financial aid and federal and 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.

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

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

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

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

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

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College can be expensive. According to the College Board, the average cost of tuition and fees at a four-year private nonprofit institution for the 2022-2023 school year was $39,400.

While that number may inspire sticker shock, there are options for students looking to make college more affordable. Some cost-cutting strategies include taking AP classes in high school (which may allow you to skip some intro-level courses and reduce your tuition), starting out at a community college, living at home to save on room and board, and applying for a variety of scholarships. Read on for a closer look at these (plus other) ways to cut expenses and save money on college.

Ways to Make College More Economical

1. Take Advantage of AP Credits

Taking Advanced Placement credits in high school could cut down on the overall cost of college. Here’s how: If you take an AP course and get a 3 or higher on the AP exam, colleges may count that class towards the overall credit hours you need to graduate.

Some colleges may require students to score a 4 or a 5 on the exam in order to get credit. You can take a look at the requirements at different schools and for different courses on the College Board website.

The average cost of one credit hour at a public four-year college is $309 (the average cost per course is $926). The more credits you enter college with, the fewer total credits you typically have to pay for, and the quicker you can jump into more advanced courses. Early graduation is one way to make college more affordable.

Of course, not all schools accept all AP credits. Some ultra-competitive schools may not let you use AP courses to reduce the total number of credits you’ll need to graduate or to skip introductory level courses.


💡 Quick Tip: You’ll make no payments on some private student loans for six months after graduation.

2. Start Out at a Community College

Where you choose to go to college can have a big influence on the overall cost. Some students may consider starting their college journey at a community college and then transferring to a four-year college or university to finish their degree.

One of the financial benefits of community college is that courses can be significantly less expensive than at a four year college. According to the College Board, the average cost for tuition and fees for a student attending a two-year, in-district public college was $3,860 during the 2022-2023 school year.

3. Attend an In-State University or College

If community college isn’t the right fit for you, you might consider attending an in-state college or university. Typically, in-state tuition is more affordable than out-of-state tuition or tuition at a private college.

According to the College Board, the cost of tuition and fees for in-state tuition at a four-year public institution averaged $10,950 for the 2022-2023 school year. For out-of-state students, that rose to $28,240. However, that is still significantly less than the average cost of tuition and fees for private four-year universities, which was $39,400.

4. Look into Regional Tuition Exchange Programs

Students who are attending a school in a nearby state can look into tuition reciprocity programs to see if their school offers anything. Reciprocal tuition is when states offer students from a partner state in-state tuition. For example, Minnesota and Wisconsin have a tuition reciprocity agreement. This is one avenue that allows out-of-state students to pay in-state tuition.

5. Commute to School and Live at Home

Room and board is another major expense for students living away from home. If you are attending a school near your home, you could consider living with your family a bit longer. Living at home can help students save a significant amount of money on college.

Recommended: How to Pay for College With No Money Saved

6. Live Off Campus

Living on-campus can have benefits like proximity to classes, friends, and extracurriculars. But on-campus living can be pricey. Depending on where your school is located and what the rental housing market is like, living off-campus may be less expensive than paying for on-campus housing.

Some schools might require first-year students, or even in some cases upper-classmen, to live on-campus. Others may not have these restrictions. Often, schools will publish information on what percentage of the study body lives on-campus vs. off-campus, which can help inform what popular living situations at that school are.

7. Apply for Financial Aid Early

Federal financial aid includes scholarships, grants, work-study, and federal student loans. Some aid is awarded on a first-come, first-served basis, so applying early could potentially help you qualify for more aid than if you had applied closer to the deadline.

To apply for federal financial aid, students are required to fill out the Free Application for Federal Student Aid (FAFSA) annually. Schools may also use the information provided on the FAFSA to determine scholarship awards.

8. Choose The Right Student Loan

There can be a lot to consider when picking a student loan. There are two broad categories of student loans — private and federal. Federal loans are awarded to students based on information in their FAFSA. Private student loans are borrowed from individual lenders, such as banks, credit unions, or other financial institutions.
When evaluating your financial aid package, make note of the type of federal student loans you are awarded. For undergraduates, there are two main federal loans: unsubsidized and subsidized loans.

On Direct Subsidized Loans, the federal government covers the interest that accrues while you are enrolled in school at least half-time and during the loan’s grace period. These are awarded based on financial need. While it can seem minor, not having to pay interest on the loan for four or so years can significantly reduce the total cost of the loan.

For a Direct Unsubsidized Loan, the borrower is responsible for paying all accrued interest. Financial need is not a factor in qualifying for a Direct Unsubsidized Loan.

If you are exploring private student loans as an option to pay for college, know that they don’t always offer the same options or borrower protections as federal student loans. Individual lenders can set their own rates and repayment terms, so be sure to read the fine print before borrowing. In general, private student loans are considered an option only after all other sources of funding, including federal student loans, have been evaluated.

While considering private student loans, it’s a good idea to look at a few different lenders to find the best rate and terms for your personal situation. When making lending decisions, lenders will generally evaluate a borrower’s (or their cosigner’s) credit score and history, among other factors.


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

9. Target Specific Scholarships

A scholarship is money awarded to students to help pay for school expenses, and it generally doesn’t need to be repaid. Because of this, applying for scholarships can go a long way in reducing the amount of money a student has to spend on college.

Scholarships can be awarded by the school, or by corporations, nonprofits or community organizations. Some scholarships are merit-based, while others may have non-academic criteria like a specific talent, heritage, gender, interest or field of study, or location.

There are websites, like FastWeb and Scholarships.com that aggregate information on scholarships and can make it easy to browse thousands of scholarships at a time and narrow them down to your specific interests. The application requirements may vary depending on the scholarship so be sure to read the application and expectations completely.

10. Spend Less on Textbooks

According to the Education Data Initiative, the average full-time undergraduate student at a four-year public university pays $1,226 for books and supplies in one academic year. Textbooks alone can cost over $100 each. While you may only use them for a few months, if they’re required by your professors it may be integral to passing your courses.

To save on textbooks, students have a few options. One is to buy a digital version of the book. Some textbook distributors offer e-versions of their books for a fraction of the price. Another way to save is to buy a used version of the textbook. Used books are often readily available at school bookstores or can be found online.

Some students may rent books. This is generally cheaper than buying a textbook, and when the class is done you can send the book back to the bookseller.

11. Opt Out of the Dining Plan

If you’re living off-campus and have a kitchen available to you, consider opting out of the meal plan offered by your school. These plans are often more expensive than buying and cooking your own food. Plus, if you are making your own meals, you have full control of what you eat.

Students who appreciate the convenience of the meal plan while living off-campus might opt for a less expensive plan. Schools generally offer different options for meal plans, such as unlimited plans and tiered plans based on meals per week.

The Takeaway

There are options to save money when it comes to paying for college. Before you even get to college, you might consider taking AP classes, which could potentially allow you to skip some intro level courses (and save on tuition). Another key factor in college affordability is the school you choose to attend. Some students may choose to go to an in-state school with a more affordable tuition. Other students may find that, thanks to a generous financial aid package, one of their other choices may be more affordable than they originally imagined.

The type of student loans you borrow can also impact the overall cost of your education. Federal loans offer benefits and borrower protections like flexible income-driven repayment plans. Students who still have gaps in funding can also apply for private student loans. These loans may come with higher interest rates but allow you to borrow more (typically up to the full cost of attendance) than you can access with federal loans.

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

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

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

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

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

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

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College is expensive, with the yearly cost of attendance at some private schools now topping $75,000. Looking at these numbers, you may wonder how you will ever possibly afford to send your kids to college.

But before you get too disheartened, it’s important to understand that a college’s published “sticker price” is often very different from what you actually have to pay (known as the net price). What’s more, just putting a small amount of money aside each month in a college fund can add up to a significant sum over time, especially if you take advantage of a tax-advantaged college savings account.

Read on to learn key things about how to save for college — from estimating how much you need to set aside to picking the right college saving fund.

Determining the Cost of College for Your Children

Tuition costs vary widely, depending on the type of school your child wants to attend, the type of degree they’ll earn (bachelor’s or associate), and even geographic location.

According to the College Board, the average annual college tuition costs for the 2022-23 school year were:

•   $10,940: public four-year in-state (a 1.8% increase from 2021-21)

•   $28,240: public four-year out-of-state (a 2.2% increase from 2021-22)

•   $39,400 : private nonprofit four-year (a 3.5% increase from 2021-22)

•   $3,860: public two-year in-district (a 1.6% increase from 2021-22)

The College Board also studied the annual, inflation-adjusted change in college tuition and fees over the last decade:

•   -1%: four-year public schools

•   -4%: two-year public schools

•   +6%: four-year private (nonprofit) schools

If your kids are young, you may wonder how much college will cost when it’s time for them to head off. Fortunately, there are many online calculators that can help you figure this out, taking factors like your child’s age, the type of school you expect your child to attend, and the expected rise in the cost of college into account.

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

Net Price vs. Sticker Price

Every college and university, private or public, lists a sticker price, which is also known as the cost of attendance (COA). This price includes tuition, fees, room and board, books, supplies, and miscellaneous expenses.

The net price, on the other hand, is what a student would actually pay, after factoring in any financial aid provided by the college and the federal government.

Financial aid is based on your family’s income, as well as the student’s academic achievement. Aid is offered in the form of grants, scholarships, work-study, and sometimes federal student loans. Schools offer aid based on financial need, a student’s “merit,” or a combination.

When you fill out the Free Application for Federal Student Aid (FAFSA), you will receive a Student Aid Index, or SAI. (Previously, this was called the Estimated Family Contribution, or EFC.) Colleges use this number to determine the amount of financial aid they award to accepted students. Typically, colleges come up with a financial aid package to help bridge the gap between the school’s sticker price and what your family can afford to pay.

Indeed, sometimes colleges with the highest sticker price end up costing less than a college with a much lower sticker price.

Recommended: How to Start Saving for Your Child’s College Tuition

Using a Net Price Calculator

Fortunately, you can get an idea of what the net price will be for a particular college before you apply by using the government’s net price calculator. This tool can help students and their families get a better idea of the cost of college, after subtracting scholarships, grants, and other financial aid.

Keep in mind, though, that the net price calculator is going to require specific details about your income and assets, so the more transparent you are regarding your personal finances, the more precise your calculation is likely to be.

When is a Good Time to Start Saving for Your Child’s Education?

Generally, the sooner the better. In fact, it can be wise to set up and start making small monthly contributions to a college savings fund soon after your child is born.

For some familes, however, it may not be possible to start saving that early. It’s equally important to pay attention to your other expenses and family’s needs. For example, you may want to prioritize building an emergency and paying off expensive credit card debt over saving for college. It’s also a good idea to make sure you’re on track with retirement savings. At the end of the day, students are able to get loans for an education but it’s not possible to take out loans to fund retirement.

Some Options for Saving

529 Plan

A 529 education savings plan is an investment account that can be used to save for the beneficiary’s qualified education expenses. The funds can be used to pay for higher education or private elementary or high schools. A 529 plan allows your savings to grow tax-free, and some states even offer a tax deduction on your contributions.

All 529 plans are set up at the state level. However, you don’t have to be a resident of a particular state to enroll in its plan.

If your child decides not to go to school, it’s possible to roll the account over into the name of another family member. If the funds aren’t used for education-related expenses, there may be taxes and penalties.

Family members and friends can also contribute to a child’s college savings plan. They may choose to make deposits to an existing 529 account or set up one themselves, naming a beneficiary of their choice.

Some 529 savings plans offer an age-based investment option to automatically adjust the risk of the investment strategy as the beneficiary gets older. This type of investment approach might be similar to how a target date fund works in your retirement plan.

Regular Savings Accounts

You can also save for your child’s college tuition using a savings account at a traditional bank, credit union, or online bank. Just keep in mind that interest rates, even for high-yield savings accounts, tend to be relatively low. Plus, savings accounts don’t offer the tax advantages you can get with some other college savings vehicles.

It may be difficult to reach education financing goals through a traditional savings account alone since the interest rate might not keep pace with the inflation of college expenses.

Roth IRAs

Although generally used for retirement savings, a Roth IRA can be used to pay for the cost of college. Contributions to a Roth IRA are made with after-tax dollars but earnings grow tax-free.

Generally, to withdraw the earnings from an IRA without paying a penalty (or taxes), the account holder needs to be at least 59 ½ years old. However, if you made the first contribution to your Roth IRA at least five years before, you can also withdraw the growth penalty-free for qualified education expenses, including tuition, books, and supplies.

Keep in mind that, while there may not be an early withdrawal fee, the earnings withdrawn may still be subject to income tax.

Other Options to Pay for College

Sometimes saving alone isn’t enough to cover the cost of college. In that case, there are other funding options available that could help students and their families pay for college.

Private Scholarships

Scholarships are essential free money for college because you don’t have to pay them back. Scholarships are typically merit-based and are offered through a variety of organizations and institutions, including nonprofits, corporations, and even directly from universities and colleges. In some cases, scholarships are awarded on the basis of nationality, ethnicity, or economic need. There are a number of searchable databases that compile different scholarship opportunities.

Federal Financial Aid

When you complete the FAFSA each year, you will become eligible for federal financial aid. This can include scholarships, grants, work-study, and federal student loans (which may be subsidized or unsubsidized).

Private Student Loans

If savings and financial aid aren’t enough to cover the full cost of college, you can fill in gaps using private student loans. These are available through private lenders, including banks, credit unions, and online lenders.

Loan limits vary from lender to lender, but you can often get up to the total cost of attendance, which gives you more borrowing power than with the federal government. Interest rates vary depending on the lender. Generally, borrowers (or cosigners) who have strong credit qualify for the lowest rates.

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

💡 Quick Tip: Parents and sponsors with strong credit and income may find much lower rates on no-fee private parent student loans than federal parent PLUS loans. Federal PLUS loans also come with an origination fee.

The Takeaway

College tuition can be a daunting expense. Setting up a dedicated account to save for college tuition can help make the process much more manageable. There are accounts, like 529 plans, that are designed specifically to pay for educational expenses.

In addition to savings, students and their families may rely on scholarships, grants, federal student loans, or even private student loans to pay for tuition and other educational expenses.

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

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

---

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

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

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

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

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.

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Student loan debt nationwide currently totals $1.774 trillion (including federal and private student loans). The average federal student loan debt balance is $37,717 while the total average balance (including private student loans) is estimated to be $40,505, according to EducationData.org.

Student loan debt is now the second highest consumer debt category in the country behind only housing debt. Around 54% of bachelor’s degree recipients from public and private nonprofit four-year colleges and universities graduate with debt, according to the College Board.

A recent report from EducationData.org details the average student loan debt per borrower (based on federal student loan only) in each state. Overall, residents of Washington, D.C., are the most likely of all U.S. residents to have student debt, averaging $54,945 per borrower. Hawaiians, on the other hand, are the least likely to have student loans outstanding, with just 8.4% of residents in debt.

Student Loan Debt in Each State

Read on for an overview of what student loan debt looks like across the country according to EducationData.org . Note that this data refers to federal student loan debt only; private student loans, which represent 7.2% of all student debt, are not reflected.

Alabama

Average borrower debt: $37,137

Total student loan debt: $23.5 billion

Everything you need to know about student loans & scholarships in Alabama

Alaska

Average borrower debt: $34,024

Total student loan debt: $23.5 billion

Everything you need to know about student loans & scholarships in Alaska

Arizona

Average borrower debt: $35,396

Total student loan debt: $31.4 billion

Everything you need to know about student loans & scholarships in Arizona

Arkansas

Average borrower debt: $33,333

Total student loan debt: $13.0 billion

Everything you need to know about student loans & scholarships in Arkansas

California

Average borrower debt: $37,084

Total student loan debt: $141.8 billion

Everything you need to know about student loans & scholarships in California

Colorado

Average borrower debt: $36,822

Total student loan debt: $28.5 billion

Everything you need to know about student loans & scholarships in Colorado

Connecticut

Average borrower debt: $35,162

Total student loan debt: $17.5 billion

Everything you need to know about student loans & scholarships in Connecticut

Delaware

Average borrower debt: $37,559

Total student loan debt: $4.8 billion

Everything you need to know about student loans & scholarships in Delaware

District of Columbia

Average borrower debt: $54,945

Total student loan debt: $6.5 billion

Everything you need to know about student loans & scholarships in Washington D.C.

Florida

Average borrower debt: $38,459

Total student loan debt: $100.9 billion

Everything you need to know about student loans & scholarships in Florida

Georgia

Average borrower debt: $41,639

Total student loan debt: $68.6 billion

Everything you need to know about student loans & scholarships in Georgia

Hawaii

Average borrower debt: $36,765

Total student loan debt: $4.5 billion

Everything you need to know about student loans & scholarships in Hawaii

Idaho

Average borrower debt: $33,012

Total student loan debt: $7.2 billion

Everything you need to know about student loans & scholarships in Idaho

Illinois

Average borrower debt: $37,757

Total student loan debt: $61.6 billion

Everything you need to know about student loans & scholarships in Illinois

Indiana

Average borrower debt: $32,874

Total student loan debt: $29.8 billion

Everything you need to know about student loans & scholarships in Indiana

Iowa

Average borrower debt: $30,464

Total student loan debt: $13.2 billion

Everything you need to know about student loans & scholarships in Iowa

Kansas

Average borrower debt: $32,578

Total student loan debt: $12.5 billion

Everything you need to know about student loans & scholarships in Kansas

Kentucky

Average borrower debt: $32,779

Total student loan debt: $19.7 billion

Everything you need to know about student loans & scholarships in Kentucky

Louisiana

Average borrower debt: $34,525

Total student loan debt: $22.5 billion

Everything you need to know about student loans & scholarships in Louisiana

Maine

Average borrower debt: $33,137

Total student loan debt: $6.2 billion

Everything you need to know about student loans & scholarships in Maine

Maryland

Average borrower debt: $42,861

Total student loan debt: $35.9 billion

Everything you need to know about student loans & scholarships in Maryland

Massachusetts

Average borrower debt: $34,146

Total student loan debt: $30.8 billion

Everything you need to know about student loans & scholarships in Massachusetts

Michigan

Average borrower debt: $36,116

Total student loan debt: $51.0 billion

Everything you need to know about student loans & scholarships in Michigan

Minnesota

Average borrower debt: $33,604

Total student loan debt: $26.5 billion

Everything you need to know about student loans & scholarships in Minnesota

Mississippi

Average borrower debt: $36,902

Total student loan debt: $16.2 billion

Everything you need to know about student loans & scholarships in Mississippi

Missouri

Average borrower debt: $35,397

Total student loan debt: $29.3 billion

Everything you need to know about student loans & scholarships in Missouri

Montana

Average borrower debt: $33,149

Total student loan debt: $4.2 billion

Everything you need to know about student loans & scholarships in Montana

Nebraska

Average borrower debt: $31,919

Total student loan debt: $7.9 billion

Everything you need to know about student loans & scholarships in Nebraska

Nevada

Average borrower debt: $33,743

Total student loan debt: $11.8 billion

Everything you need to know about student loans & scholarships in Nevada

New Hampshire

Average borrower debt: $34,085

Total student loan debt: $6.5 billion

Everything you need to know about student loans & scholarships in New Hampshire

New Jersey

Average borrower debt: $35,434

Total student loan debt: $42.5 billion

Everything you need to know about student loans & scholarships in New Jersey

New Mexico

Average borrower debt: $34,211

Total student loan debt: $7.8 billion

Everything you need to know about student loans & scholarships in New Mexico

New York

Average borrower debt: $37,678

Total student loan debt: $92.7 billion

Everything you need to know about student loans & scholarships in New York

North Carolina

Average borrower debt: $37,721

Total student loan debt: $49.2 billion

Everything you need to know about student loans & scholarships in North Carolina

North Dakota

Average borrower debt: $28,604

Total student loan debt: $2.5 billion

Everything you need to know about student loans & scholarships in North Dakota

Ohio

Average borrower debt: $34,721

Total student loan debt: $62.3 billion

Everything you need to know about student loans & scholarships in Ohio

Oklahoma

Average borrower debt: $31,525

Total student loan debt: $15.4 billion

Everything you need to know about student loans & scholarships in Oklahoma

Oregon

Average borrower debt: $37,017

Total student loan debt: $20.1 billion

Everything you need to know about student loans & scholarships in Oregon

Pennsylvania

Average borrower debt: $35,385

Total student loan debt: $64.5 billion

Everything you need to know about student loans & scholarships in Pennsylvania

Rhode Island

Average borrower debt: $32,056

Total student loan debt: $4.6 billion

Everything you need to know about student loans & scholarships in Rhode Island

South Carolina

Average borrower debt: $38,414

Total student loan debt: $28.1 billion

Everything you need to know about student loans & scholarships in South Carolina

South Dakota

Average borrower debt: $30,954

Total student loan debt: $3.6 billion

Everything you need to know about student loans & scholarships in South Dakota

Tennessee

Average borrower debt: $36,418

Total student loan debt: $31.4 billion

Everything you need to know about student loans & scholarships in Tennessee

Texas

Average borrower debt: $32,920

Total student loan debt: $120.0 billion

Everything you need to know about student loans & scholarships in Texas

Utah

Average borrower debt: $32,835

Total student loan debt: $10.1 billion

Everything you need to know about student loans & scholarships in Utah

Vermont

Average borrower debt: $37,516

Total student loan debt: $2.9 billion

Everything you need to know about student loans & scholarships in Vermont

Virginia

Average borrower debt: $39,165

Total student loan debt: $42.4 billion

Everything you need to know about student loans & scholarships in Virginia

Washington

Average borrower debt: $35,510

Total student loan debt: $28.0 billion

Everything you need to know about student loans & scholarships in Washington

West Virginia

Average borrower debt: $31,690

Total student loan debt: $7.2 billion

Everything you need to know about student loans & scholarships in West Virginia

Wisconsin

Average borrower debt: $31,894

Total student loan debt: $23.2 billion

Everything you need to know about student loans & scholarships in Wisconsin

Wyoming

Average borrower debt: $31,250

Total student loan debt: $1.7 billion

Everything you need to know about student loans & scholarships in Wyoming

The Takeaway

The average amount of debt held by borrowers varies from state to state. The five states with the highest average amount of student loan debt per borrower are: Washington D.C., Maryland, Georgia, Virginia, and Florida. The five states with the lowest average of student loans per borrower are: Wyoming, South Dakota, Iowa, North Dakota, and Puerto Rico. North Dakota is the only state where the average borrower owes less than $30,000.

For millions, student loans and student loan refinances are a necessary part of paying for college. When federal aid and savings aren’t enough to pay for school, some borrowers turn to private student loans. These are available from banks, credit unions, and online lenders. While private lenders are not required to offer the same benefits or protections as federal student loans, they can be helpful for borrowers who have tapped other resources and are looking to fill in gaps in funding.

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

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

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Photo credit: iStock/FangXiaNuo

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

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

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

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

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While college is a good option for many people, it isn’t for everyone — and not going to a four year college doesn’t mean you can’t have a meaningful career.

More people than ever before have a college degree, but a four-year program isn’t the only way to be successful. Even employers are realizing that there are many skills that can’t be captured in a degree program. In fact, some major tech companies, including Google and Apple, no longer require applicants to have a four-year degree for some of their positions.

There are certain jobs for which you need a college degree, like an electrical engineer, marketing manager, or teacher, but there are plenty of careers out there that don’t require additional degrees.

Reasons You Should Not Go To College

There are a number of valid reasons to delay college — or put it off entirely. Here are some to consider:

•   You’re not excited about your options. Maybe you didn’t get into the schools you expected to or you’re having second thoughts when you try to imagine yourself attending the schools you did get into. If the thought of college fills you with dread or doubt rather than excitement, taking a year off to reassess your options can be a good strategy.

•   You’re unsure what career you are interested in pursuing. You may want to explore different options by being exposed to college-level courses at a community college, or spend time volunteering, working, or traveling.

•   You’re already working. If you already have a job, you may be wanting to lean into your current job or save money to go to school in a few years.

•   You’re exploring non-degree avenues. There are many high-paying trades that don’t require a degree but may require on-the-job experience or an apprenticeship.

•   You have a plan for a gap year. Some people like to take a year to travel, work, or otherwise take a break in between high school and college to further explore their identity and what they want to do in the future.

•   You feel you’re going to college only to please your family. If you feel pressured to go to college, it may be a sign that college isn’t the right option for you, at least right now.

•   You have essential family obligations. Some students need to help their families and may not be able to take time off to go to school. These students may consider community college or a part-time degree program. Speaking with your current high school counselor may help you find ways to juggle multiple responsibilities.

•   You want to take time to pursue a talent. From sports to the performing arts to a creative path, some people choose to explore a talent more seriously, focusing time, energy, and resources prior to going to college. This can be a decision you make with the help of your family and any coaches or teachers.

Reasons You Should Go To College

College can be a great time to grow and learn and, for some, it’s a natural step. Here are some other reasons why college may make sense:

•   You’re excited and realistic about college. You recognize college may have ups and downs but feel confident that college feels “right” as your next step — not just something your family or teachers expect from you.

•   A college degree will help you achieve your career goals. You’ve done your research and/or talked with alums and people working in your targeted field and feel confident that college makes sense for your career goals.

•   College fits into your overall financial plan. You have a sense of how much college will cost and a plan for how you will pay for it, which might include a combination of financial aid, savings, and federal or private student loans. You also want to make sure you will be able to manage any student loan payments after you graduate.

•   You have a ‘Plan B’ in case you realize that college isn’t the right fit. Sometimes people realize one semester into school that college may not be what they need at that moment in their lives. It can be helpful to talk about what this may be, so that you don’t feel trapped if school doesn’t feel like it’s a good fit.

Source: National Center for Education Statistics

Alternatives to a College Degree

Just because you aren’t interested in a four-year degree doesn’t mean you need to forgo higher education entirely. Alternative educational models, like trade schools and community colleges, offer many practical certification and two-year associate degree programs that can help you get ahead.

It is important to know that even if you’re not planning to pursue a four-year degree, you still have options when it comes to creating a career that is right for you.


💡 Quick Tip: You’ll make no payments on some private student loans for six months after graduation.

Trade School

Sometimes known as technical or vocational schools, trade schools can prepare you for a specific job, such as a dental hygienist, electrician, cosmetologist, or web developer. These programs are normally much shorter than four years, and certain programs may allow you to finish in only a few months. There are both public and private trade schools.

Trade schools don’t award bachelor’s degrees. Instead, when you graduate from a trade school, you typically receive a diploma or certificate indicating that you are trained and certified to perform a specific job. Some trade school programs do offer associate degrees, which are the same type of degrees offered by many community colleges.

Recommended: How to Know if Trade School is Right for You

Community College

As mentioned above, community colleges usually offer two-year degrees called associate degrees. These degrees can either stand alone or be a stepping stone to obtaining a bachelor’s degree at a four-year school.

Indeed, many community colleges offer career preparation programs that are designed to help students jump into the workforce without the need for a bachelor’s degree.

Community college could also be a great way to test out college life and see if you want to continue pursuing higher education. They tend to be much less expensive than four-year universities, which means it won’t cost you an arm and a leg before you decide if higher education is right for you.

Apprenticeships

Apprenticeships are paid positions designed to teach the apprentice about a specific job or industry. They can help you learn how to use industry-specific tools and technologies and help you develop your skills over a period of time. This may be in fields as diverse as plumbing to transportation engineering to baking.

Apprenticeships can be a win-win for employers and employees because they allow those starting out to begin working (and earning a paycheck) immediately, and they help employers fill vacant jobs.

Recommended: A Complete Guide to Apprenticeships

Certificate Programs

Similar and sometimes overlapping with trade schools, certificate programs offer specialized training in a specific area. This may include coding, cybersecurity, yoga, fitness, getting a commercial driver’s license (CDL) or other areas where specialized knowledge may be a prerequisite. These certificates may also be helpful in making job seekers eligible for positions with higher starting salaries.

Recommended: Are Coding Bootcamps Worth the Money?

Taking a Gap Year

A gap year is when a student takes a year off between high school and college. Some colleges allow accepted students to defer for a year, holding a place for them in the next year’s incoming class. Some people create a travel itinerary, others may work or volunteer for the year. There are some gap year programs that create opportunities for students, but keep in mind that some programs may be costly.

Starting a Business

If you are already passionate about — and have a lot of knowledge about — a specific field or industry, you might consider skipping college altogether and jumping into that business.

Starting your own business takes a lot of hard work, but it could mean that you get to be your own boss and work in an industry you love. And because you could quickly become an expert on the products or services you provide, you aren’t necessarily at a disadvantage because you lack a degree.

If You Do Go the College Route

There are plenty of options if you choose not to attend a four-year college. However, there are also options within the world of college, including the type of college you choose, the major you decide to pursue, and how you pay for college.

There’s no denying that college can be expensive. In the 2022-2023 school year, the average cost for tuition and fees at an in-state college was $10,423, while the average sticker price for a private college was $39,723. And, these numbers don’t include room and board. This can be a big financial commitment, especially if you are on the fence about pursuing higher education.

That’s why it can be a good idea to begin creating a payment strategy early. A great first step is to fill out the Free Application for Federal Student Aid (FAFSA) to see how much federal aid — including scholarships, grants, work-study, and federal student loans — you qualify for.

Federal student loans do have limits on how much a student can borrow each year they are enrolled in school. Some students may need additional funds to bridge the gap. In that case, some may consider borrowing a student loan from a private lender, such as a bank or credit union, to help cover college costs.

In general, it can be a smart idea to tap all your federal loan and grant options before you consider private student loans. That’s because federal loans offer some protections, such as deferment options, that private loans may not. However, private loans can cover up to 100% of the cost of attendance, including money to pay for books, room and board, and personal expenses.


💡 Quick Tip: Parents and sponsors with strong credit and income may find much lower rates on no-fee private parent student loans than federal parent PLUS loans. Federal PLUS loans also come with an origination fee.

The Takeaway

College can lead students on a new career path, but depending on your goals and other factors, may not be necessary. Some students may choose to pursue a trade or vocational program instead of a four-year degree, while others may simply want to wait a year or so to earn and save more money to cover the cost of going to college.

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

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

---

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

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

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

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

SOIS0923012

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