Oct
04
2023
How to Find Your Student Loan Account Number_780x440:

How to Find Your Student Loan Account Number

By | Debt Payoff, Student Loans, student_loan | Comments Off on How to Find Your Student Loan Account Number

While on the road to repayment, there will likely be instances when you need to know your student loan account number (like if you want to change repayment plans or refinance). But you probably haven’t committed this number to memory. In fact, you might not even know how to find it.

If you need your student loan account number but don’t know how to get it, don’t worry. Read on to learn what a student loan account number is, why you need it, and how to find it.

What Is a Student Loan Account Number?

Your student loan account number is a unique 10-digit number that is given to you by your student loan provider and is used for identifying your federal student loan.

Students can use their student loan account number to look up their payments and see how much of their balance is left. This number is also used to verify a student’s identity when they are using services offered by the loan provider, such as mobile banking or trying to obtain previous statements.

Some financial institutions and banks may ask you for your student loan account number before allowing you to borrow money or open a new credit card. You’ll also need to know this number if you are considering refinancing those loans.

In addition, your student loan account number is used for tax purposes in order to verify that the student loan on a tax return is yours.

Students with private loans won’t have a federal student loan identification number associated with those loans. Instead, you’ll need to contact the lender directly in order to get account information. This includes any private student loans that were originally federal ones but were refinanced into a private loan, since those balances would now show in government records as $0.00.


💡 Quick Tip: Enjoy no hidden fees and special member benefits when you refinance student loans with SoFi.

Take control of your student loans.
Ditch student loan debt for good.

How to Find Your Student Loan Account Number

The easiest place to find your student loan account number is on the monthly student loan statements sent by your loan provider. You should be able to find it on the upper right or left corner near your name, or somewhere in that vicinity. You can also check your e-mail account if you’re receiving your statements by e-mail.

If you don’t have access to any of your monthly statements, you can log into the Federal Student Aid website using your FSA (Federal Student Aid) ID to see your loan details. This will allow you to see your student loan account number, along with additional information about your loans.

Don’t have an FSA ID? Not to worry.

More About the FSA ID

The FSA ID replaced the Federal Student PIN in 2015, so students who haven’t taken out new student loans or haven’t logged into the Federal Student Aid website since 2015 might not have an FSA ID yet.

Students who don’t have an FSA ID can create one by visiting the who don’t have an FSA ID can create one by visiting the . Once you sign up for an FSA ID, the federal government will verify your information with the Social Security Administration. Once your information is verified, you will be able to use your FSA ID to obtain information about your federal student loans.

The site, managed by the U.S. Department of Education, can provide a convenient way to get a full picture of all your federal loans, including:

•   How many federal student loans you have

•   Their loan types

•   The original balance on each loan

•   Current loan balances

•   Interest rates on loans

•   Whether any loans are in default

•   Loan service provider’s names

•   Contact information of the loan service providers

Recommended: How Much Do I Owe in Student Loans?

Identifying Lenders

Federal student loans aren’t directly administered by the government. While the government is the lender, these loans are managed by a variety of loan servicers that take on administrative tasks such as sending bills to borrowers, creating repayment plans, and consolidating loans.

It’s important to know which servicers are overseeing your loans so you know where to send payments and who to reach out to if you have questions or need to discuss an alternative payment plan.

The U.S. Department of Education assigns loan to these companies:

•   Edfinancial : 1-855-337-6884

•   MOHELA : 1-888-866-4352

•   Nelnet : 1-888-486-4722

•   Aidvantage : 1-800-722-1300

•   ECSI : 1-866-313-3797

•   Default Resolution Group : 1-800-621-3115

As mentioned, you can find information about which entities are servicing your federal loans when logged on to StudentAid.gov. Another way to confirm a loan servicer is to call the Federal Student Aid Information Center (FSAIC)  at 1-800-433-3243.

As far as private student loans go, the lender is typically a bank, online lender, or other financial institution. Contact information should be available on the bills and other information sent to you. This private student loans guide can give you more information about how these loans work.

If these documents have been misplaced, the private lender’s information can typically be found on your credit reports. You can request a free credit report from each of the three reporting agencies — Equifax, Experian, and TransUnion — by visiting AnnualCreditReport.com. Through the end of 2023, you can receive a free copy of your reports weekly.

Finally another way to track down your private student loan lenders is by contacting your college’s financial aid office.

Paying Back Student Loan Debt

With federal student loans, there are multiple payment plans available:

•   Standard repayment plan: This is the default repayment plan, which lasts 10 years. Borrowers will typically pay less interest over time on the standard plan versus other repayment plans. However, it may not be a good choice if you’re interested in getting your loans discharged through Public Service Loan Forgiveness (PSLF).

•   Graduated repayment plan: With this plan, payments start low and increase every two years. This can help students who don’t earn a lot now but expect their income to increase. However, you’ll pay more interest over time with this plan than if you stuck with the standard repayment plan.

•   Extended repayment plan: Payments can be made during a period of up to 25 years. This can help lower monthly payment amounts, but students will pay back more interest over the life of the loan than those who use the standard or graduated repayment plans.

•   Income-driven repayment plan (IDR): There are four different IDR plans, which cap student loan payments at a percentage of the borrower’s income. These plans can be a good choice for borrowers who are seeking loan forgiveness, but they will typically pay more interest overall than under the standard plan.

To pay off student loans more quickly, one option is to put extra money toward student loans each month through larger or additional payments. By paying more toward the principal balance, you won’t just pay off your loan faster. You’ll also reduce the total amount of interest paid over the life of the loan, saving you money in the long run. It’s a good idea to contact the lender or loan servicer to ensure that any extra payments are applied to the principal as intended.

Alternatively, you could pursue certain loan forgiveness programs, such as PSLF or Teacher Loan Forgiveness.

Recommended: 7 Tips to Lower Your Student Loan Payments

Refinancing Student Loans – Pros and Cons

Another option to consider is to refinancing student loans. There are pros and cons to that strategy you’ll want to consider.

Advantages of refinancing student loans include the following:

•   Loans can be combined into one single loan and payment, which can be easier to manage.

•   You may get a lower interest rate. If you have good credit and a solid income, you may qualify for a better rate, which could help reduce what you pay over the life of the loan. You can see what you might save by using a student loan refinancing calculator.

•   Some private lenders, including SoFi, will consolidate federal and private student loans and refinance them into one loan.

•   The term length can be adjusted. A longer repayment term can help to lower the monthly payment (though you may pay more interest over the life of the loan if you refinance with an extended term), while a shorter one can help to reduce the total amount of interest paid back over the life of the loan.

Disadvantages of refinancing include:

•   Refinancing federal student loans with a private lender means that borrowers will lose access to benefits associated with federal student loans, including income-driven repayment options and loan forgiveness programs.

•   Other federal protections that will no longer apply, including deferment and forbearance, which allow payments to be temporarily reduced or paused.

•   Most federal student loans have a six-month grace period, during which you don’t have to make any loan payments. If you refinance your loan soon after graduation, you might lose out on that benefit if your private lender doesn’t offer a grace period.

The Takeaway

It’s important to know your student loan account number, which can be found on your federal loan statements or online.

This 10-digit number can be used to access loan information, use other lender services and apps, and help you figure out a payment plan.

You may also need your student loan account number when applying for a credit card or other loan, and if you decide to refinance your student loan.

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


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

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


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

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

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.

SOSL0823026

Read more
Oct
04
2023
female student in library

Applying for a Student Loan Cosigner Release

By | Debt Payoff, Fresh Out of School, Student Loans, student_loan | No Comments

If you borrow a student loan with a cosigner, you may want to officially remove them from the loan by applying for a cosigner release. The specific requirements for this can vary by lender but may include things like a minimum number of on-time monthly payments and a review of your credit history.

Borrowers will likely be required to file a formal application with their lender in order to release their cosigner from a student loan. Continue reading for a high-level rundown of what the process of cosigner release can look like and what other options might exist if a cosigner release is not available.

What Is a Cosigner?

The financial aid process typically begins with families filling out the Free Application for Federal Student Aid (FAFSA®) to see how much aid they’ll receive . Direct Subsidized and Unsubsidized federal loans don’t need a cosigner, but they don’t always cover the whole cost of your education. If you’re unable to get a student loan yourself, a cosigner — often a parent, relative, or close family friend — may be able to help secure funding.

Cosigners are just as responsible as the primary borrower to repay the loan. If the primary borrower doesn’t make a payment on time, the cosigner is legally required to make the payment. Late or missed payments can affect the credit score of both the primary borrower and the cosigner. If a debt goes into default and the lender hires a collection agency, that agency can pursue the cosigner to collect the debt.

Cosigners may choose to help their child or family member take out a loan when they are in college, but once the student graduates and gets a job, they may decide it’s time for them to take full responsibility for the loan.


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

What Is a Cosigner Release, and How Do You Qualify?

A cosigner release is the process of removing a cosigner from a loan. Depending on the loan’s terms, the cosigner may be removed from the loan with a cosigner release after the student has graduated and met certain requirements as outlined by the lender. Here’s a list of the typical requirements that a primary borrower must have in order to remove a cosigner from their loan:

1. Minimum full monthly payments:

Typically, the primary borrower will have to show that they’ve made one to two years’ worth of full monthly payments, depending on the lender. Full payments include principal and interest rate payments, and they must be made on time.

2. Satisfactory credit:

The lender will generally check the primary borrower’s credit to make sure they can qualify for the loan on their own and meet minimum credit requirements. For example, they’ll be looking to make sure that the borrower doesn’t have any loans in default and that they have a good consumer credit report.

3. Employment:

Lenders may ask for proof of employment and determine whether a primary borrower is meeting minimum income requirements. Borrowers may be asked to prove income with recent paystubs, W-2s, or the borrower’s most recent tax return.

Depending on your lender, there may be other criteria you have to meet.

How to Apply for Cosigner Release

Before a lender will release a cosigner, primary borrowers must submit an application. Here is a step-by-step guide to applying for a cosigner release.

1. Check with Your Lender

First things first, if you’re unsure if the loan you have qualifies for a cosigner release, check in directly with your lender. Generally, lenders will have certain requirements that borrowers are required to meet before they can apply for a cosigner release. These may include things like making a minimum number of on-time monthly payments, establishing a strong credit history, and securing employment. Again, each lender is able to set their own criteria.

2. File an application

Once you’re confident you can meet the requirements, you will likely have to file a formal application with your lender to have the cosigner removed from your loan. Depending on the lender, you may be able to submit the application online or by mailing in a printed form. Read the application requirements thoroughly because some lenders may require supporting documentation, like a W-2 or recent pay stubs.

Once you have submitted an application with the information your lender requires, the lender might then issue a cosigner release.

Why Get a Cosigner Release?

A cosigner may want to be released from a student loan for a number of reasons, not the least of which is the flexibility they may gain from having that portion of their credit freed up.

First, their debt-to-income ratio will likely improve, which may make it easier to apply for new credit or get a new loan at a favorable interest rate. If a cosigner is looking to buy a car or get a mortgage, for example — or even cosign another loan — they may be able to do so with more favorable rates.

Cosigners with other children bound for college may want to be released from one child’s loan so they can turn their attention to funding their next child’s education.

Another reason to consider releasing a cosigner is that some private loans go into automatic default if the cosigner dies. Removing the cosigner protects the primary borrower from needing to worry that they may have to pay any remaining balance in full immediately if their cosigner dies.

Once the cosigner is released from the loan, they will no longer have to worry that their credit will be damaged if loan payments aren’t made on time, or that they may be responsible for payments should the primary borrower drop the ball.


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

What Are the Limitations of Cosigner Releases?

Not all loans offer a cosigner release. And even for those that do, it can be difficult to obtain. For that reason, when you are on the hunt for an initial loan, you should read the fine print to see if the loan offers a cosigner release option. That way, you’ll know the possibility is there.

What Are the Alternatives to a Cosigner Release?

If your application for a release is rejected, there are other ways you may be able to relieve your cosigner.

One alternative that might be worth considering is refinancing your student loan(s).

When you refinance student loans, your new lender pays off your old loan (or loans) in full, replacing it with a new one. If the primary borrower can qualify for a new loan on their own, they won’t need to include the cosigner on the new loan.

If you do decide to go the refinance route, it’s worth spending a little bit of time shopping around for a lender that can help you manage your student loan debt better. For example, you could look for a lender that offers you lower interest rates, since this could cut your interest costs over the life of the loan and may save you money.

You will still need to apply for this type of loan as you would any other, demonstrating that you are capable of paying the debt off yourself. You’ll likely need to prove that you have a history of making on-time student loan payments, too. Lenders might look at your consumer credit report, debt-to-income ratio, and income, among other factors that will vary from lender to lender.

If you do qualify for a refinanced loan on your own, then only your name will be on the new loan. Then, your cosigner will no longer be responsible should you miss payments or default. Though the responsibility for repaying the loan will fall entirely on you now, being released from the old cosigned loan can be a big weight lifted off your cosigner’s shoulders.

The Takeaway

Applying for a cosigner release may require that the primary borrower meet certain lender requirements like having a full-time job and making a minimum number of on-time monthly payments. If approved, the cosigner on the loan will be officially removed and the primary borrower will be the sole borrower.

In the event that you aren’t approved for a cosigner release, you may be able to remove your cosigner by refinancing your loan. This entails applying for a new loan, potentially with a new lender. Refinancing won’t be the right choice for every borrower, and if you have federal student loans, you will forfeit any federal borrower protections, like income-based repayment plans, if you refinance them with a private lender. (Federal loans also don’t require a cosigner.) If you think refinancing might be a fit for your personal financial situation, consider SoFi. Refinancing at SoFi can be done entirely online and there are absolutely no hidden fees.

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

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

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


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

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

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

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

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.

SOSL0923002

Read more
Oct
03
2023
woman on computer in office

What Is Student Loan Forbearance?

By | Fresh Out of School, Student Loans, student_loan, Terminology | No Comments
Editor's Note: For the latest developments regarding federal student loan debt repayment, check out our student debt guide.

If you’re facing a financial squeeze, you may be able to get a temporary break on repaying a student loan with student loan forbearance. The catch is you could end up owing more.

That’s because interest accrues on nearly all federal student loans in forbearance and on all private student loans, if the private lender offers such a program. (Note: Previously, this accrued interest would be added to the loan principal following the period of forbearance — a process known as interest capitalization — but new rules issued by the Department of Education in July 2023 eliminated capitalization in this scenario.)

Even though a payment reprieve through forbearance can bring short-term relief, it might be worth exploring alternatives. Read on to learn how student loan forbearance works — and other options you may want to consider.

What Does Student Loan Forbearance Mean?

What is forbearance? It’s an approved period during which a borrower is allowed to temporarily suspend loan payments.

There are two main types of federal student loan forbearance: general and mandatory.

General Forbearance

With general forbearance, sometimes called discretionary forbearance, your loan servicer will decide whether or not to grant your request for forbearance if you are unable to afford your loan payments.

General forbearance is available for Direct Loans, Federal Family Education Loan (FFEL) Program loans, and Perkins Loans for up to 12 months at a time. Borrowers still experiencing hardship when the forbearance period expires can reapply and request another general forbearance.

Mandatory Forbearance

Your loan servicer is required to grant you forbearance if you meet certain criteria including:

•   You are serving in a medical or dental internship or residency program, and you meet certain requirements.

•   The total amount you owe each month for all federal student loans is 20% or more of your total monthly gross income, for up to three years.

•   You are serving in an AmeriCorps position for which you received a national service award.

•   You are performing a teaching service that would qualify you for teacher loan forgiveness.

•   You qualify for partial repayment of your loans under the Department of Defense Student Loan Repayment Program.

•   You are a member of the National Guard and have been activated by a governor, but you are not eligible for a military deferment.

Direct and FFEL loans qualify for mandatory forbearance for any of the above reasons. Perkins Loans also qualify if a borrower has a heavy student loan debt burden.

Mandatory forbearance is to be granted for no more than 12 months at a time, but it can be extended if you continue to meet eligibility requirements.


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

Private Student Loan Forbearance

What is forbearance for private student loans? Some private lenders offer this option.

If you’re having trouble making private student loans payments, contact your loan holder immediately. They might offer you interest-only payments, interest-free payments, or a change in interest rate. It’s important to get in touch with your loan provider before you miss a payment and risk your loan going into default.

Who Should Use Student Loan Forbearance?

Forbearance on federal student loans may be a good choice if you don’t qualify for deferment or an income-driven repayment plan, and your hardship is temporary.

What is student loan deferment? While both student loan deferment and forbearance offer the opportunity to press pause on your student loan payments, there’s a key difference: During deferment, you may not have to pay the interest that accrues on Direct Subsidized Loans, Federal Perkins Loans, and the subsidized portion of Direct Consolidation Loans or FFEL Consolidation Loans.

With private student loans, borrowers anticipating trouble making payments would be wise to contact their loan servicer to seek a solution. Whether the lender calls it deferment or forbearance, interest typically accrues and it is the borrower’s responsibility.

Is Student Loan Forbearance Bad?

As a stopgap measure, no.

Student loan forbearance certainly beats having late payments or a loan default on your credit reports. Most federal student loans enter default when payments are 270 days past due, but federal Perkins Loans and private student loans can go into default after just one missed payment.

If you default on a student loan, the entire balance of a federal student loan (principal and interest) becomes immediately due. (Note that federal borrowers are protected from default during the on-ramp period from October 2023 to September 2024.)

If your federal student loan is in collections, and you do not enter into a repayment agreement or you renege on the agreement, the collection agency can garnish your wages — up to 15% of your disposable pay.

As if that weren’t enough of a deterrent, borrowers in default can expect to have part or all of their tax refund taken and applied automatically to federal student loan debt.

Private student loans typically go into default after 90 days. The lender may hire a collection agency or file a lawsuit. Any collection fees are stated in the loan agreement.

Recommended: Private Student Loans Guide

Pros and Cons of Student Loan Forbearance

Postponing your student loan payments has its advantages and disadvantages.

Pros

•   Forbearance can help you avoid the negative financial impact of going into default, including the risk of having your wages garnished.

•   It does not affect your credit scores because the missed payments are not reported on your credit reports.

•   It can give you a chance to catch your breath when money is tight.

Cons

•   Interest will accrue during forbearance, which means you’ll likely have a larger loan balance waiting for you when you resume repayment.

•   If you’re pursuing federal student loan forgiveness, any period of forbearance probably will not count toward your forgiveness requirements.

•   It’s a short-term solution, typically 12 months, though you can renew if you’re still struggling to pay your loans.

Alternatives to Forbearance

Income-Driven Repayment Plans

If you’re having trouble making student loan payments because of circumstances that may continue for an extended period, or if you’re unsure when you’ll be able to afford to resume payments, one option is an income-based repayment plan.

Monthly payments are determined by your income and family size. After 20 or 25 years on regular, on-time payments, any remaining loan balance may be forgiven depending on the type of loan you have.

The Department of Education recently introduced the SAVE plan, a new income-driven repayment plan. Depending on your financial circumstances, if you qualify, your monthly payments could be as low as $0, and interest does not accrue. If you’re eligible, this is a better option than forbearance.

Student Loan Refinancing

Refinancing student loans with a private lender is another option to consider. You take out one new loan, hopefully with a lower interest rate, to pay off one or more old loans.

One of the other advantages of refinancing student loans is that you may also be able to change the length of the loan.

Borrowers eligible for student loan refinancing typically have a solid financial history, including a good credit score. It’s important to note that if you refinance federal student loans with a private lender, you give up federal benefits like income-driven repayment, loan forgiveness, and federal forbearance.

Recommended: Student Loan Refinancing Calculator

The Takeaway

What is student loan forbearance? Student loan forbearance is an option to temporarily suspend loan payments when you’re struggling to make them. But in almost all cases, interest will accrue and be added to the loan. Student loan deferment, income-driven repayment, or refinancing could make more sense for you.

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


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

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


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

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

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.

SOSL09230670

Read more
Oct
03
2023
man on phone with bicycle

Tips to Lower Your Student Loan Payments

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

Staying on top of student loan repayments is an important part of your overall financial health. If you’re concerned about making payments on time, or if you’re just reevaluating your budget, you may be wondering how to lower student loan payments.

Many borrowers may be eligible for options that can lower their student loan payments, from changing your repayment term (which may result in paying more interest over the life of the loan) to signing up for an income-driven repayment plan. Here are some tips you might want to consider if you’re looking to lower your loan repayment costs.

Can I Lower My Student Loan Payments?

While there’s no magic wand that can wipe away your student loans, there are some ways you may be able to lower your monthly payments. The Department of Education offers a number of income-driven repayment (IDR) plans. With an IDR plan, the amount you pay will be determined by your income, the size of your family, and where you live, and it won’t be more than 10 to 15% of your income.

You may also have the option to refinance your loans at a lower interest rate or with a longer loan term, both which may lower your monthly payments. (Note: You may pay more interest over the life of the loan if you refinance with an extended term.) There are many factors to consider before refinancing, but if you’re struggling with your monthly payments, it’s worth doing the research to see if it works for you.

Understanding Your Current Student Loan Payments

Before you can determine if you can lower your student loan payments, it’s important to know the type of loans you have since this can affect your repayment options.

If you have federal student loans from the U.S. Department of Education, you may be able to apply for federal plans that can help lower your monthly student loan payments. You can find all of your federal student loans and the individual loan servicers, by logging into My Federal Student Aid . If you have private student loans from a bank or another financial institution, there are fewer options available to lower your monthly payments.

Federal loans are placed by default in the Standard Repayment Plan, which sets your monthly payments at a static amount so you will have your loans paid off in 10 years, if not less. Some private loans also follow the 10-year repayment timeline, but it varies depending on your lender.

The next step is to assess how much debt you have in total. By calculating what you owe, you can get a better understanding of your current repayment plan and whether you want to consider changing it.

Once you have all of your loan information, you can use a student loan payoff calculator or contact your servicer to find your current payoff dates for your student loans. The calculator can also help you determine which repayment plans you qualify for. Keep in mind that if you change to a longer term to lower monthly student loan payments, you’ll need to take more time to pay off your loans, and you may end up paying more over the life of the loan, since interest will continue to accumulate.

If you only need temporary relief, consider contacting your loan servicer to see if you are eligible for student loan deferment or forbearance. Both options let borrowers temporarily pause or lower loan payments for reasons such as unemployment or being enrolled as a student. Depending on the type of loan you have, interest may still accrue during this time.

Recommended: What Student Loan Repayment Plan Should You Choose? Take the Quiz

How to Lower Student Loan Payments

1. Sign up for Automatic Payments to Stay on Time

Some student loan servicers offer incentives if you elect to make automatic payments, such as a 0.25 percent interest rate reduction. Auto payments can also help you incorporate your student loan payments into your budget as a fixed expense that must be accounted for every month. On-time payments may also help your overall credit score.

2. Contact Your Loan Servicer About Your Repayment Plan

If you’re interested in changing federal repayment plans to help lower student loan payments, contact your loan servicer to learn more about your options.

One option is the Graduated Repayment Plan, which can keep your payment timeline to 10 years (depending on how much you owe), but starts out with lower payments and then increases the payment amount over time (usually every two years).

If you have more than $30,000 in eligible outstanding student debt on most loans, you can also ask about the Extended Repayment Plan, which extends your loan repayment timeline to 25 years.


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

3. Apply for Income-Driven Repayment for Federal Loans

Most federal student loans are eligible for at least one income-driven repayment plan. If you’re on an income-driven repayment plan, and you need to defer your loans because of economic hardship or if you make so little you qualify to pay nothing toward your loans each month, the months when you’re in deferment or paying $0 still count toward your total repayment period.

On an IDR plan, how much you owe each month is based on your discretionary income, which the federal government defines as “the difference between your annual income and 150% of the poverty guideline for your family size and state of residence.” You can use the Department of Education’s Loan Simulator to get a better sense of how much you would owe with one of these plans and how long it will take you to pay them off.

All of the IDR options offer loan forgiveness after borrowers make consistent payments for a certain number of years, ranging from 10 to 25, depending on the type of program you qualify for. You may have to pay income tax on the amount that’s forgiven, though there’s a temporary tax rule that exempts any forgiven debt from federal income taxes through 2025.

Here are the four IDR plans offered by the Department of Education:

•   Income-Based: Payments are generally 10% or 15% of your discretionary income, depending on when you first received your student loans. Any outstanding balance is forgiven after 20 or 25 years, but you may have to pay income tax on the amount that’s forgiven. You must have a high federal student loan debt relative to your income to qualify.

•   Income-Contingent: Payments will be either 20% of your discretionary income, or the amount you would pay on a fixed 12-year repayment plan adjusted to your income, whichever is less. Many borrowers can qualify for this plan, including parents, who can access this option by consolidating their Parent PLUS loans into a Direct Consolidation Loan. Outstanding balances may be forgiven after 25 years.

•   Saving on a Valuable Education (SAVE) Plan: The SAVE Plan is the new name of the Revised Pay As You Earn (REPAYE) Repayment Plan. Payments are generally 10% of your discretionary income. (It will be dropping to 5% in July 2024.) Outstanding balances may be forgiven after 20 to 25 years, depending on whether the loans were for undergraduate or graduate study. There is no income requirement to qualify for the SAVE plan, and it’s available to all Direct Loan borrowers with eligible loan types.

•   Pay As You Earn: Also generally sets payments at 10% of your discretionary income and caps at 20 years for forgiveness, but never more than what you’d pay on the Standard 10-year plan. You must be a new borrower on or after Oct. 1, 2007 to qualify.

•   Income-Sensitive: This repayment plan is open to low-income borrowers who have Federal Family Education Loan (FFEL) Program loans. If you qualify for this program, your monthly loan payment will go up or down based on your annual income and will be discharged after 10 years.

These plans require borrowers to reapply every year. If you are employed by certain government agencies or a qualifying not-for-profit and are seeking Public Service Loan Forgiveness (PSLF) , you must repay your student loans under one of these income-driven repayment plans (there are other qualifying factors, too). Keep in mind, it’s always free to apply for these federal student loan assistance programs, and they are the easiest and best way to lower your monthly federal loan payments if you qualify.

4. Learn About Loan Repayment Assistance Programs

If you’re eligible, a Loan Repayment Assistance Program (LRAP) can provide funds to help you lower student loan payments. Since private loans are not eligible for the federal income-based repayment plans mentioned above, an LRAP could be helpful for those with private student loans.

LRAPs also often include a requirement that you work in your eligible job for a certain number of years, typically in public service — and the assistance may or may not count as taxable income. If your income after graduation is modest, an LRAP can help to repay loans, whether federal, private, or parent PLUS.

You may want to investigate limitations such as which of your loans are eligible and income caps. You can also research private grants that can help cover the cost of your student loans and lower loan payments after graduation.

5. Refinance Your Student Loans with a Private Lender

Refinancing is an option that may be most helpful if you have student loans with high interest rates or private student loans.

When you refinance a student loan, a lender pays off your existing loans and gives you a new loan with new terms. So you will have one private refinanced loan to pay back.

Refinancing could save you money in the long run if you get a lower interest rate, or you could change your term to get more time to pay off your loan and lower the cost of your monthly student loan payments (though you may pay more in interest in the long run).

Keep in mind, however, that if you refinance a federal student loan, you’ll lose access to federal benefits and protections, such as income-driven repayment plans or Public Service Loan Forgiveness.

You can choose to refinance just your private loans while putting your federal loans into an income-based repayment plan to get the best of all options.

What Happens if You Can’t Pay Your Student Loans

With most federal student loans, if you don’t make a payment in more than 270 days, you’ll default on the loan. Private loans are often placed in default as soon as after 90 days.

Defaulting can impact your credit score, and have other negative consequences, including losing eligibility for deferment, forbearance, and other valuable repayment options. Another consequence of default is loan acceleration, when the unpaid balance on your loan immediately comes due.

With the end of the student loan pause, the Department of Education is giving those whose loans are in default a chance at getting back on track with the Fresh Start program. Borrowers in default must apply for the Fresh Start program and then enroll in an income-based repayment plan. Their loans will be removed from “defaulted status” and the record of the default will be removed from their credit report.

Refinancing Student Loans With SoFi

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


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

FAQ

Can you negotiate student loans down?

You generally can’t negotiate student loans unless you’ve stopped making payments and your loans are delinquent or in default, a situation which has serious financial consequences, such as potentially damaging your credit score or having your wages garnished. There are other options to lower student loan payments, however. If you only need temporary relief, you can contact your loan servicer to see if you’re eligible for deferment or forbearance. If you have federal loans, you may be able to change your loan term or enroll in an income-driven repayment plan. Borrowers with private loans can explore refinancing student loans with a private lender.

How do I negotiate student loan payoff?

If your student loans are delinquent or in default, you may be able to negotiate a settlement for a lower amount, but this is generally seen as a last resort because of the negative financial consequences. Contact your lender to see what other options may be available to you.

What is average student loan debt?

The average student borrower has $37,338 in student loans to pay off, according to The Education Data Initiative.

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


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

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.

SOSL0923038

Read more
Oct
03
2023
woman reading documents in office

Law School Loan Forgiveness and Repayment Options

By | Fresh Out of School, Student Loans, student_loan | No Comments
Editor's Note: For the latest developments regarding federal student loan debt repayment, check out our student debt guide.

In June 2023, the Supreme Court announced its decision to reject the Biden-Harris Administration’s Student Debt Relief Program on the grounds that it required Congressional approval. Additionally, the debt ceiling bill officially ended the payment pause, requiring interest accrual to resume Sept. 1 and payments to resume Oct 1.

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

Loan Repayment Assistance Programs

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

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

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


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

5 Law School Loan Forgiveness and Repayment Programs

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

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

Recommended: Can Private Student Loans Be Forgiven?

Public Service Loan Forgiveness (PSLF)

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

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

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

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

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

Obviously, if you put all that time and money in and then it doesn’t pay off, it could cost you. Since the original Public Service Loan Forgiveness program went into effect in 2007, the first students eligible were set to have their loans discharged in October 2017.

However, the PSLF program was overhauled in Oct. 2021, and since then, $42 billion was approved for more than 615,000 borrowers. Additionally, borrowers who are still awaiting approval can now track their application’s status under the My Activity section of their StudentAid.gov account. This recently implemented feature can allow borrowers to see if their employers digitally signed their PSLF form and view when it was actually processed

Income-driven Repayment Plans (IDR)

Best for: Lawyers with low incomes.

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

•   Saving on a Valuable Education (SAVE Plan)

•   Pay As You Earn Repayment Plan (PAYE Plan)

•   Income-Based Repayment Plan (IBR Plan)

•   Income-Contingent Repayment Plan (ICR Plan)

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

Recommended: How To Avoid Student Loan Forgiveness Scams

State Loan Repayment Assistance Programs

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

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

Law School-Based Loan Repayment Assistance Programs

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

Many schools offer their own LRAPs for lawyers. Applicants for the 2023 funding cycle must have had at least $75,000 in eligible law school loans and a maximum income of $62,500 in most states.

The specifics of the loan repayment assistance programs vary from school to school, so you’ll have to check with your law school’s financial aid office. Here is a comprehensive list of law schools with LRAPs.

Up to $5,600 each is awarded to each of around 125 attorneys annually through an application process that opens in August.

Department of Justice Attorney Student Loan Repayment Program

Best for: Lawyers who work for the Department of Justice.

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

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

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

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

The Takeaway

Law school loan forgiveness sounds great, but it can cost you money in the long run if you end up paying higher interest rates or don’t pursue the career you want in the hope of securing loan forgiveness. Consolidating federal student loans is an option, but it can be complicated. Through the Direct Loan Consolidation program, your new interest rate is the weighted average of your existing loans’ rates.

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

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

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


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

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

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

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

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.

SOSL0923031

Read more

CATEGORIES

  • All
  • No categories
Close modal

See what SoFi can do for you and your finances.

Select a product below and get your rate in just minutes.

Student Loan
Refinancing

Personal
Loans

Online
Investments

Other

Terms and conditions apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or other eligible status, be residing in the U.S., and meet SoFi's underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates reserved for the most creditworthy borrowers. If approved, your actual rate will be within the range of rates at the time of application and will depend on a variety of factors, including term of loan, evaluation of your creditworthiness, income, and other factors. If SoFi is unable to offer you a loan but matches you for a loan with a participating bank, then your rate may be outside the range of rates listed above. Rates and Terms are subject to change at any time without notice. SoFi Personal Loans can be used for any lawful personal, family, or household purposes and may not be used for post-secondary education expenses. Minimum loan amount is $5,000. The average of SoFi Personal Loans funded in 2023 was around $33K. Information current as of 2/26/24. SoFi Personal Loans originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org). See SoFi.com/legal for state-specific license details. See SoFi.com/eligibility for details and state restrictions.

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

©2024 Social Finance, LLC All rights reserved.
TLS 1.2 Encrypted
Equal Housing Lender