AllSLR Archives

Sep

2025

When Do Student Loan Rates Increase?

By Pam O’Brien | Fresh Out of School, Student Loans, student_loan | No Comments

Table of Contents

Federal Student Loan Interest Rates Change Annually
Student Loan Rates for the 2025–2026 School Year
Private Student Loan Rates Can Change at Any Time
If Your Loan Has a Variable Interest Rate, Your Rate Could Rise
What to Do if You Have a Variable-Rate Loan
The Takeaway
FAQ

Federal student loan interest rates are set by Congress. Each spring, they determine the next school year’s interest rates based on the high yield of the last 10-year Treasury note auction in May. The new rates apply to loans disbursed between July 1 and June 30 of the next year.

For private student loans, the lender determines the interest rate, and it may vary depending on which financial institution you’re working with as well as your own financial profile. Unlike federal loans, the decision to change rates on a private student loan rate can happen more than once a year. A private lender might change rates monthly, quarterly, or annually — it’s up to them to decide.

If you already hold student loans, then the rates of those loans may or may not change. It depends on whether you have a federal or private loan, and if that loan has a variable or fixed interest rate.

Learn more here about the federal student loan interest rate in 2025-26, what’s being proposed for the future, and options you have if your loan has a variable interest rate.

Key Points

• Federal student loan rates change yearly, based on May’s 10-year Treasury note auction, and apply to new loans disbursed July 1–June 30.

• Rates are fixed for federal loans, meaning once issued, the rate won’t change unless you refinance or consolidate.

• Private loan rates vary by lender, and may change monthly, quarterly, or annually — especially if they are variable-rate.

• Variable-rate loans may rise if market rates increase, making them riskier during periods of economic uncertainty.

• Refinancing can lock in a fixed rate, but refinancing federal loans removes access to federal protections and forgiveness programs.

Federal Student Loan Interest Rates Change Annually

Under a law adopted by Congress in 1993, the federal government pegged federal student loan interest rates to the longer-term US Treasury rates, and those interest rates are adjusted annually for new federal student loans.

Your interest rate will also depend on the type of loan you take out. Direct Subsidized Loans and Direct Unsubsidized Loans tend to have the lowest rates, while Direct PLUS loans have the highest. Sometimes, Congress will lower interest rates. Here’s what rates have been in recent years for Direct loans:

• Loans disbursed between July 1, 2021 and June 30, 2022: 3.73%

• Loans disbursed between July 1, 2022 and June 30, 2023: 4.99%

• Loans disbursed between July 1, 2023 and June 30, 2024: 5.50%

• Loans disbursed between July 1, 2024 and June 30, 2025: 6.53%

• Loans disbursed between July 1, 2025 and June 30, 2026: 6.39%

Student Loan Rates for the 2025–2026 School Year

So what will student loan interest rates be in 2023?

For the 2025-2026 school year, the interest rate on Direct Subsidized or Unsubsidized loans for undergraduates is 6.39%, the rate on Direct Unsubsidized loans for graduate and professional students is 7.94%, and the rate on Direct PLUS loans for graduate students, professional students, and parents is 8.94%. The interest rates on federal student loans are fixed and are set annually by Congress.

In an effort to keep the interest rates on federal student loans from skyrocketing, Congress has set limits on how high-interest rates can go. Undergraduate loans are currently capped at 8.25%, graduate loans can’t go higher than 9.50%, and the limit on parental loans is capped at 10.50%. Since 2006, the highest interest rates reached for Direct Subsidized Loans and Subsidized Federal Stafford Loans was 6.80%.

Private Student Loan Rates Can Change at Any Time

Private student loans are from banks, credit unions, and other financial institutions, and they get to set the interest rates on the loans they disburse. These loans don’t offer the benefits of federal student loans, such as income-driven repayment, deferment and forbearance, and Public Service Loan Forgiveness.

Some private loans have fixed rates, which means you lock in an interest rate and it doesn’t change for the life of the loan. Other private loans have variable rates, which means the interest rate might go up and down over the course of the loan.

As of July 2023, financial institutions use Secured Overnight Financing Rate (SOFR) to help with pricing corporate and consumer loans, including business loans, student loans, mortgages, and credit cards.

Private lenders can raise or lower interest rates at any time, but any changes usually have to do with changes in the economy, such as the Federal Reserve deciding to raise or cut interest rates.

If Your Loan Has a Variable Interest Rate, Your Rate Could Rise

If you take out a federal student loan, the loan’s interest rate is fixed. This means the interest rate stays the same over the life of the loan. But since you need to re-apply for federal aid every year you attend college, you may end up with four loans with four different interest rates.

When you apply for a private student loan or refinance an existing loan, borrowers can typically choose between a fixed and variable interest rate.

When you take out a private student loan, the original rate depends on your credit score, employment history, and current income level — among other factors, which vary by lender.

If your private loan has a variable rate, the rate may fluctuate as the economy changes. In the past year, the Federal Reserve has increased benchmark interest rates numerous times to try to help control inflation. Rates may rise again, but it’s impossible to say for certain.

As of late 2025, it is unclear whether or how student loan interest rates may shift for the 2026-27 school year.

Recommended: Student Loan Refinancing Guide

What to Do if You Have a Variable-Rate Loan

If your private student loan has a variable interest rate and you’re worried that interest rates might increase, you may have some options. Student loan refinancing involves taking out a new loan with a new interest rate and/or new terms. By refinancing, borrowers have the opportunity to make only one monthly payment instead of balancing multiple payments, and they may be able to lock in a fixed rate so they no longer have to be concerned with rate hikes.

Individuals whose financial situation has improved and/or who have built their credit score since originally borrowing their loan(s) may qualify for a lower interest rate.

The Takeaway

If you have federal loans, you’ve already locked in a fixed interest rate so you don’t need to worry about interest rate changes. Plus, it’s important to remember that when federal student loans are refinanced, they are no longer eligible for federal borrower protections. But if you have a private loan with a variable interest rate, it may be worth exploring loan refinancing.

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

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

FAQ

How often do student loan interest rates change?

Federal student loan rates are fixed rates but are determined by a formula created by Congress, and this rate can change annually. For the 2025-26 school year, Direct undergraduate loans charge an interest rate of 6.39%. Private student loan rates tend to change more frequently, and they can be fixed or variable.

Did student loan interest rates go down?

The rate on Direct undergraduate loans dropped from 6.53% for the 2024-25 school year to 6.39% for the 2025-26 academic year.

Can you write off student loan interest on your taxes?

Yes, you can take a deduction on your taxes for the interest paid on student loans taken out for yourself, your spouse, or your dependent. This is true for all loans (not just federal student loans) used to pay for higher education expenses. Worth noting: The maximum deduction is $2,500 a year.

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

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

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

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

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

SOSLR-Q325-080

Aug

2025

20 of the Most Popular College Majors

By Emma Diehl | Student Loans, student_loan | Comments Off

Table of Contents

A Major List
Paying for College
The Takeaway
FAQ

Once you embark on your college years, one of the key challenges can be picking a major. Declaring a major is a personal process based on a student’s interests, strengths, and projected career track. But simply browsing the course catalog to search for the right major is enough to make even the most assured student’s head spin.

Researching the most popular majors can help undecided students narrow their selection and find the best majors for their interests and professional goals. Here, consider this list of 20 popular paths.

Key Points

• Knowing popular college majors can be helpful to undecided students.

• Common majors include business- and health-oriented majors, among others.

• Business and management are popular since they offer diverse postgrad options.

• Nursing faces a growing demand for qualified graduates, as do other health-related professions.

• Computer science is among the highest-paying majors.

A Major List

While popularity doesn’t need to drive which major you choose, diving into the data on popular college majors can illuminate trends and provide a jumping-off point for college students who just can’t decide how to declare.

Based on Niche’s top majors, ranked by the number of degrees awarded, here are some of the most popular topics that students are studying at U.S. colleges. In addition, you’ll learn which career tracks are likely after graduation.

Business and Management

Major Description: An all-encompassing term, business and management programs provide a baseline of business principles, which include critical thinking and analysis. Courses include Accounting, Business Ethics, Team Development, and Human Resources.

Job Opportunities: This broad major provides lots of postgrad directions. It can take graduates on an MBA track or can feed directly into the job market with roles in accounting, marketing, sales, account management, or financial analysis.

Nursing

Major Description: There are many pathways to a nursing education. From certifications to master’s degrees, nursing course loads include everything from Anatomy and Chemistry to Statistics and care for specific populations.

Job Opportunities: The demand for nurses is growing as the industry faces a shortage of qualified hires. Graduates with a nursing degree can choose from a variety of career tracks, from being a school nurse or research nurse to working on a cruise ship or in the emergency room.

Psychology

Major Description: Psychology is the deep dive into human behavior and what drives us. A degree in psychology can be a Bachelor of Science or a Bachelor of Arts, depending on the course load. Areas of study include learning, memory, development, addiction, and childhood development.

Job Opportunities: A bachelor’s degree in psychology could mean heading to a master’s program or a doctorate. It could also lead to immediate employment in fields like marketing, teaching, or human resources.

Biology

Major Description: Biology is the study of living things, so biology majors can expect to spend plenty of class time in the lab, learning everything from human anatomy to molecular biology. It’s a mix of math, science, chemistry, and, of course, biology.

Job Opportunities: Some biology majors may choose the medical school track after graduation, but that’s not the only path to employment. Biology majors can pursue careers in pharmaceuticals, research, genetics, medicine, and even finance (thanks to a background in math and research).

Engineering

Major Description: A degree in engineering means having the critical thinking skills to solve problems. Engineering majors, embodying a mix of math, science, and business, can choose specific areas of study, from the environment to structural mechanics and chemicals.

Job Opportunities: From the laboratory to a construction site or hospital, engineers have a wide variety of career tracks to choose from. Much of this will be informed by a student’s specific area of study. A structural or civil engineer might work on state building projects, while a chemical engineer is more likely to be found in the lab, perfecting everything from medicine to cosmetics.

Education

Major Description: A degree in education includes studying psychology, education, and often an area of expertise (what the student will teach after graduation).

Job Opportunities: A degree in education doesn’t always mean a teaching career. Besides teaching, graduates can go into a variety of industries that support the education system, including school administration, counseling, education policy, or student life.

Communications

Major Description: Communications is an umbrella term for the study of media and information, from journalism to social media and public relations. Classes a communications major might take are News Writing, Mass Communications, Film Studies, and Social Media.

Job Opportunities: What graduates will do with a communications degree will hinge on the type of media they studied in school. A student who concentrates in visual media might work as a video producer or camera operator. One who studied journalism might work in public relations or technical writing.

Finance and Accounting

Major Description: Finance and accounting deal with the scrutiny of numbers. Finance often focuses on the longer term — like financial planning and budgeting. Accounting can involve more short-term money matters, like analyzing financial statements. Both degrees involve studying math, business, finances, and investments.

Job Opportunities: With a degree in finance or accounting, it’s only natural to pursue a role that deals with math and/or money. Accounting majors can pursue careers in accounting, bookkeeping, or auditing. Finance can lead to roles as an advisor, planner, or analyst in the finance space.

Criminal Justice

Major Description: For those interested in the law, majoring in criminal justice might be a good fit. This major explores not only the legal system but also the psychological study of crime, sociology, and public policy.

Job Opportunities: After graduation, many criminal justice majors will pursue law school, but that’s not the only option. Graduates can also explore law enforcement or counseling.

Anthropology and Sociology

Major Description: Anthropology and sociology are inherently the study of people — the exploration of race, gender, and geography’s influence on societies, blending the study of history with modern analysis.

Job Opportunities: Graduates may work in the research field or medical anthropology. Additionally, they may find work at the federal level, where anthropologists are often required for major projects.

Computer Science

Major Description: Computer science is the study of data, engineering, and the systems surrounding computers. A major in computer science means a steady mix of math classes and software engineering or programming courses.

Job Opportunities: The Bureau of Labor Statistics anticipates the need for computer science jobs to grow by 26% percent from 2023 to 2033, much faster than the average for all occupations. The median annual salary for computer science jobs was $140,910 in 2023 (the most recent year they have data for). Graduates can explore software development, information technology, or network security.

English

Major Description: An English major explores everything about the written word, including genres of literature and interpretation. English majors also learn critical thinking and the ability to write, whether that be technical, creative, legal, or medical writing.

Job Opportunities: Because many jobs include a solid foundation in reading and writing, an English degree can apply across many fields. Graduates might go into teaching, writing (journalist, copywriter, author), communications, or public relations.

Economics

Major Description: Economics combines the study of people with statistics to learn how government and groups develop around resources, typically money. Students will study economic theory, the history of economics, and the math that’s behind much of the statistical monitoring.

Job Opportunities: Graduates can take a variety of roles, thanks to the analytic skills of their major. That, on top of learned communication skills, makes economics majors a good fit for roles like analysts, consultants, and actuaries.

Political Science

Major Description: Political science is the study of governing, including theory, history, and current practices. This area of study requires students to follow current events as well as analyze and research past actions.

Job Opportunities: Studying political science can lead to a job in politics, but there are other options as well. The critical thinking skills lend themselves well to PR and social media management, as well as policy work or analysis.

History

Major Description: History majors analyze the past. A core part of a liberal arts degree, studying history may be a good fit for students who want a generalist education.

Job Opportunities: History majors perfect a lot of skills that come in handy in the workplace. Strong writing, reading, and analytical skills make them a great fit for roles like analyst or consultant, or a career in politics.

Kinesiology/Physical Therapy

Major Description: Kinesiology is the study of physical activity. Specifically, it’s working with people to improve their health through exercising. A degree in kinesiology involves anatomy, hands-on work, and learning to work with patients.

Job Opportunities: For many, a degree in kinesiology is the foundation for a doctorate in physical therapy, but graduates can also apply their skills to careers in training, coaching, and some forms of therapy.

Health Professions

Major Description: This major will prepare students to work in the medical field, helping patients. They can expect to take classes in anatomy, chemistry, biology, public health, and medical ethics.

Job Opportunities: Graduates can find careers as health care aides, nursing assistants, and RNs.

Art

Major Description: Studying art creates the opportunity to both learn the history of a medium and create art. Students may choose a specific form of art or study movements and mediums in general.

Job Opportunities: Grads don’t have to turn to creating art full time unless they want to. They can work as art educators, in museums and art preservation, or try their hand in the work of gallery curation.

Math

Major Description: Students majoring in math will explore all math disciplines, in addition to theoretical and historical context around the subject.

Job Opportunities: A math degree is helpful in any career that deals with interpreting numbers daily: actuary, data scientist, teacher, or software developer.

Environmental Science

Major Description: Studying environmental science can be a great fit for generalists who want to explore many subjects around our surroundings and the science involved. They’ll study chemistry, biology, physics, and geography, among other subjects.

Job Opportunities: Graduates can pursue careers in research in fields including horticulture, oceanography, microbiology, and ecology.

Paying for College

Another major decision in the college process? Finding a way to pay for school.

Whatever you decide to major in (and whichever school you end up going to), a great first step to figure out college funding is to complete the Free Application for Federal Student Aid (FAFSA). This will let you know if you are eligible for any federal aid, which may include grants, scholarships, work-study, and federal student loans.

To fill in any gaps in funding, know that there are different types of student loans that can help you afford your education. For example, you may also want to explore private student loans. These are available through banks, credit unions, and online lenders. Rates and terms vary by lender, but borrowers (or cosigners) with excellent credit typically qualify for the lowest rates.

Just keep in mind that private student loans may not offer borrower protections, such as deferment and income-driven repayment plans, that come with federal student loans.

The Takeaway

Deciding on your college major can be a challenge. It can be helpful and inspiring to see what other students most commonly major in. These include business, economics, nursing, kinesiology, anthropology, and English, among others.

Another challenge can be affording a college degree. Looking into grants, scholarships, and federal and/or private student loans can help you fund your education.

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.

FAQ

What is the most popular college major?

Currently, the most popular college major in the U.S. is business. Many students opt for a business degree, which can lead to careers in fields like accounting, finance, and marketing.

What is the hardest major?

Which subject can be considered the hardest major varies depending on the student answering, but chemistry often rises to the top as the most challenging major in college.

Which college major makes the most money?

According to recent data, computer science and/or computer engineering tend to be the highest-paying majors.

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

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

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.

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 .

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.

SOISL-Q325-101

Aug

2025

How to Defer Student Loans When Going Back to School

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

Table of Contents

What Is Student Loan Deferment?
How Do You Qualify for Student Loan Deferment?
Requesting a Deferment
Pros and Cons of Student Loan Deferment
The Pros and Cons to Student Loan Refinancing
The Takeaway

If you’re facing financial hardship, going back to school, or running into another issue that makes it tough to pay your student loans, you may be looking for relief. One option may be student loan deferment, which allows you to temporarily pause your student loan payments. Note that the rules around student loan deferment will be changing for loans issued after July 1, 2027, which we’ll explain below. As with most financial decisions, there are pros and cons to deferring your student loans. Here’s more information about student loan deferment and what it could mean for your financial future.

Key Points

• Student loan deferment currently allows you to pause or reduce payments if you’re enrolled at least half-time, facing financial hardship, serving in the military, or in other qualifying situations.

• Deferment for economic hardship and unemployment won’t be available for loans issued after July 1, 2027.

• Subsidized loans do not accrue interest during deferment, while unsubsidized loans do, increasing overall repayment costs.

• Applying for deferment requires a request through your loan servicer, and some students may be granted deferment automatically.

• Deferment pros: Provides temporary relief from payments, especially during financial hardship or further education.

• Deferment cons: Interest accrues on unsubsidized loans, potentially increasing total loan costs over time.

What Is Student Loan Deferment?

Deferment is a program that allows you to temporarily stop making payments on your federal student loans or to temporarily reduce your monthly payments for a specified time period.

This is similar to another option known as forbearance. However, unlike forbearance, you may not be charged interest while your loan is in deferment. According to the Department of Education, if you hold one of the following types of loans, you will not be responsible for paying interest on your loan while it is in deferment:

• Direct Subsidized Loan

• Subsidized Federal Stafford Loan

• Federal Perkins Loan

• The subsidized portion of a Direct Consolidation Loan

• The subsidized portion of a Federal Family Education Loan (FFEL) Consolidation Loan

If you have one of the following types of loans, you will be responsible for paying the accrued interest on your loan while it is in deferment:

• Direct Unsubsidized Loan

• Unsubsidized Federal Stafford Loan

• Direct PLUS Loan

• FFEL PLUS Loan

• The unsubsidized portion of a Direct Consolidation Loan

• The unsubsidized portion of a FFEL Consolidation Loan

If you are responsible for paying interest on your student loans while they are in grad school deferment, you have two options: 1) you can make interest-only payments on the loans while they are in deferment; 2) if you choose not to make these interest-only payments, the accrued interest will capitalize (be added to the loan principal) when the deferment period is over.

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

How Do You Qualify for Student Loan Deferment?

In order to qualify for the current student loan deferment program, you must meet one of the following requirements:

• You’re enrolled at least part-time at a qualifying university

• You’re unemployed or unable to find employment (for up to three years)

• You’re experiencing an economic hardship

• You’re currently volunteering in the Peace Corps

• You’re on active-duty military service (or are in the 13 months following that service)

• You’re in an approved graduate fellowship program

• You’re in an approved rehabilitation program (for disabled students)

Due to recent legislation, deferment for unemployment and financial hardship will no longer be available for loans issued on or after July 1, 2027.

Requesting a Deferment

If you’re interested in deferring student loans to go back to school, you’ll need to apply for an in-school deferment. Most likely, you will request the deferment directly through your loan servicer—there is usually a form for you to fill out. When you request a deferment, you’ll also need to provide some sort of documentation to prove that you qualify for a deferment.

If you are enrolled in an eligible college or career school at least half-time, your loan may be placed in deferment automatically . If it is, your loan servicer will notify you that deferment has been granted. If you enroll at least half-time and do not automatically receive a deferment, you will need to contact the school in which you are enrolled. The school will then send the appropriate paperwork to your loan servicer, so that your loan can be placed in deferment.

Pros and Cons of Student Loan Deferment

The biggest benefit of student loan deferment is the ability to temporarily postpone student loan repayment. As of the second quarter of 2025, 3.5 million borrowers had their loans in deferment.

If you are deferring for extreme financial hardship, deferment allows you to free up money to pay off bills that require immediate attention like rent or electricity.

For students who have qualified for deferment through community service, like a stint in the Peace Corps, deferment gives them the opportunity to serve their community without any added stress from student loan payments.

While temporarily pausing loan repayment may seem like a blessing, it can come at a cost, especially if your student loans are not subsidized by the government. When in deferment, interest continues to accrue on your loan. And at the end of your deferment period, that interest will be capitalized on the loan. (This means that the accrued interest will be added to the principal balance of the loan. So ultimately, you’ll be paying interest on top of interest.)

This can mean you end up paying even more money over the life of the loan. To see how much deferring your student loans could cost, you can use an online calculator to get an estimate of how much interest will accrue while the loan is in deferment. If it’s too costly, you may consider alternative student loan repayment options.

Recommended: How to Pay Off Student Loans

The Pros and Cons to Student Loan Refinancing

If you have private loans that aren’t eligible for federal student loan deferment, refinancing your student loans is another option to consider. You may also want to think about refinancing when you’re done with your graduate degree to pay off your loans at a potentially lower interest rate.

When you refinance, your existing student loans are paid off with a new loan from a private lender. If you are refinancing private loans before going back to graduate school, you may be after a lower monthly payment, which you could potentially qualify for when refinancing your loans and extending the loan term. (You may pay more interest over the life of the loan if you refinance with an extended term.)

Alternatively, if you’re looking to refinance after graduate school, you could potentially qualify for a lower interest rate, which could reduce the amount of money you spend over the life of the loan. The lender will use your credit score and earning potential to determine what interest rate you’ll qualify for. And thanks to your new graduate degree, you could have significantly increased your earnings.

Another big benefit of student loan refinancing? You’re able to combine all of your student loan payments – for both federal and private loans – into one easy-to-manage payment.

If you hold only federal student loans, however, you could look into a Direct Consolidation Loan, which allows you to consolidate federal loans into one loan with a single monthly payment. The new interest rate will be the weighted average of your current interest rates (rounded to the nearest one-eighth of 1%), so unlike refinancing, when you consolidate your student loans, you won’t necessarily qualify for a lower interest rate.

If you are taking advantage of your federal loans’ flexible repayment plans or student loan forgiveness programs (or if you are planning to do so), refinancing might not be the best option for you. A major con of student loan refinancing is that you’ll lose access to federal loan benefits when refinancing with a private lender — including deferment and income-driven repayment plans.

The Takeaway

If you’re a student heading back to school, you may be able to temporarily pause your federal student loan payments through deferment. While subsidized loans won’t accrue interest during deferment, unsubsidized loans will, which could increase your total loan cost. You can apply for deferment through your loan servicer, and some students may even be granted it automatically if enrolled at least half-time.

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

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

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

SOSLR-Q325-076

Aug

2025

What Is College Like?

By Jacqueline DeMarco | Going to College, Student Loans, student_loan | Comments Off

Whether you’re leaving home for the first time or enrolling in your local community college, you might have a lot of misconceptions about the college experience.

So, what is college really like? Keep reading to learn about some of the myths and realities of being a college student.

Table of Contents

Common College Myths
Major College Realities
FAQ

Key Points

• A bachelor’s degree sometimes takes more than four years due to changes in major, minors, and study abroad.

• Your college major does not strictly determine your career path; skills are transferable.

• Living off-campus does not reduce the college experience; resources and activities are still available.

• Many students start at community college then transfer to a four-year institution to save on costs.

• Financial aid isn’t just for low-income students but accommodates a wide range of financial backgrounds.

Common College Myths

Pop culture has altered how we view the quintessential college experience, and though some of these myths are rooted in some level of truth, many don’t hold up nowadays.

College myths can stoke anxiety for incoming students. So let’s look for truths.

Myth 1: A Bachelor’s Degree Takes 4 Years

Although traditionally students head to college for a “four-year degree,” many of them take longer to graduate. In fact, a little over 22% of bachelor’s degree-earners take more than four years to complete their program, according to the Education Data Initiative.

There are lots of legitimate reasons it can take students more than four years to get a degree. Some may change their major and need extra classes to meet their new major requirements. Others may take on a minor or a double major that requires extra classes. Adventurous students might take time to study abroad, which could potentially slow their progress.

Others may decide to transfer schools or might have to work to pay their way through school, which could lead to finishing required classes at a slower pace.

A student may simply need more time to master the coursework. Taking your time to make sure you get the most value from your education and accomplish everything you want matters more than following a strict timeline.

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

Myth 2: Your Major Will Determine Your Career Path

Some students know exactly what career path they want to take and choose a major accordingly. Others may need more time to discover their passions and interests.

There is a misconception that you have to major in a subject that relates to your career path. Many degrees teach skills that can transfer to a variety of fields.

Philosophy and history degrees can teach perspective. English literature degrees can enhance the art of critical thinking. Majoring in graphic design may lead to a career in marketing.

The bottom line is, if you focus on the skills you learn while earning your degree more than the specific subject matter, you can apply those skills to many different career paths.

Myth 3: You Have to Live on Campus to Have the Full Experience

Here’s a fun fact for students who are debating whether or not they have to live on campus to get the full college experience: Only around 22% of university students live in on-campus dormitories. Living on campus can be convenient, but can also be expensive and a big step for students fresh out of high school.

Even if students don’t live on campus, they will still have access to on-campus resources and perks such as clubs, events, libraries, and gyms.

Choosing to live on campus is a personal decision and needs to be one made based on a student’s particular financial, social, and educational needs.

Recommended: University of Florida Tuition

Myth 4: No One Transfers From Community College

Around one-third of community college students end up transferring to a four-year school. Attending community college has multiple benefits worth considering. Students can receive a high-quality education for a fraction of the price by taking their general education classes at a community college. Taking these classes at a cheaper tuition price can give students more time and leeway to experiment with subject matter they are interested in.

For those who have their hearts set on prestigious universities, it can often be easier to transfer to one of those schools from community college than it is to be accepted straight out of high school.

Some community colleges have deals with local universities that can guarantee admission to your dream school if you meet certain qualifications. It’s known as a transfer admission guarantee, or TAG.

In California, six University of California campuses offer guaranteed admission to students from all California community colleges who have completed at least 60 semester units of UC-transferable credit.

And in Florida, state community college graduates with an associate degree are generally guaranteed admission to one of the 12 state universities.

Major College Realities

If you’re looking for a dose of reality before you start college, consider these tidbits. Knowledge is power, after all, so it can’t hurt to know what to expect.

Reality 1: Anyone Can Get Help Paying for School

Let’s start with some good news. Almost any student can find help paying for college, no matter what their financial background is.

While students from more privileged economic backgrounds may qualify for less federal student aid such as grants, both colleges and private businesses offer a variety of merit-based scholarships and grants that students can apply for.

Students can also access unsubsidized federal student loans, regardless of income. These loans come with relatively low fixed rates, income-based repayment, and borrower protections like forbearance.

If financial aid and federal loans aren’t enough to cover your full costs, you can also explore private student loans, which are offered by banks, credit unions, and other lenders. Rates can be fixed or variable and depend on the lender and your (or your cosigner’s) credit profile. Private loans don’t offer the same protections as federal loans, but can cover up to the full cost of attendance, giving you more borrowing power than you can get with the federal government.

💡 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.

Reality 2: Follow Your Passions

You’ve heard it from your teachers, you’ve heard it from your parents, and chances are you’ve heard it from countless other adults who like to reminisce about the good ol’ days: Your time spent in college will be some of the best years of your life.

College is a unique time when young adults can follow their passions. Even if you choose a major that doesn’t align with all of your interests, there are many elective classes you can take and clubs you can join that will help you foster your passions.

Learn Portuguese, take a class in 3D printing, hit the stage for some dramatic arts, or simply explore the library archives. Take advantage of this special time in your life to learn more about what interests you.

Reality 3: You Can Change Your Mind

You’ve known your whole life that you want to be a doctor. Or a lawyer. Or a beekeeper. Or so you thought. One of the many joys of college is that you have the time and space to learn and grow.

You may discover after two years of being a psychology major that the statistics classes you had to take were more interesting than your clinical psychology classes.

It’s never too late to switch majors (that extra year of sticking around campus will be worth it) or start interning in a new career field.

Some students may find that the college they chose while they were still in high school isn’t a good fit. Guess what? You can transfer to a new school if you wish. You can change your mind about what you want to study and what career path you want to take, too.

Reality 4: Partying Can Take a Toll

For some, college parties are a rite of passage. For others, they are stressful and distracting. If the party lifestyle is something you’re not interested in or is something you know you’ll get swept up in, it’s OK to stay home on a Friday night.

Focusing on your studies is why you’re at college, so don’t let peer pressure or societal expectations make you feel bad for prioritizing that.

The Takeaway

College isn’t a one-size-fits-all experience. It’s a mix of opportunities, challenges, and choices that look different for everyone. Whether you take four years or six, live on campus or commute, start at a community college or head straight to a university, your path is valid. What matters most is that you use your college years to learn, grow, and set yourself up for the future in a way that works for you.

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

FAQ

What is life like at college?

Life at college is a mix of independence, learning, and new experiences. Students manage classes, assignments, exams, while also exploring friendships, clubs, and activities. It’s often the first time many students live away from home, which can feel exciting and challenging. Balancing academics with social life teaches responsibility and time management. While routines vary, college offers opportunities for growth, self-discovery, and building future skills, making it a unique and often transformative chapter in life.

Is college fun or stressful?

College can be both fun and stressful, depending on how students handle the balance. The fun comes from making friends, joining activities, attending events, and enjoying newfound freedom. At the same time, academic demands, deadlines, and financial pressures can bring stress. Many students feel a mix daily. The key is finding balance — managing responsibilities while still finding time for relaxation, hobbies, and social life.

What is the hardest year at college?

The hardest year in college varies, but many students find junior year to be the most challenging. Junior year can be daunting with internships, heavier workloads, and sometimes research projects. That said, some find that freshman year is the toughest due to the adjustment to college life, while others find senior year to be hardest due to completing a capstone project and preparing for post-graduation. Each year has unique pressure, and the hardest one varies by individual.

About the author

Jacqueline DeMarco

Jacqueline DeMarco is a freelance writer who specializes in financial topics. Her first job out of college was in the financial industry, and it was there she gained a passion for helping others understand tricky financial topics. Read full bio.

SoFi Bank, N.A. and its lending products are not endorsed by or directly affiliated with any college or university unless otherwise disclosed.

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Aug

2025

What Is Student Loan Forbearance?

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

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.

Even though a payment reprieve through forbearance can bring short-term relief, it might be worth exploring alternatives, especially since the amount of time you can put your loans in forbearance will be shortened for loans issued after July 1, 2027 due to recent legislation.

Read on to learn how student loan forbearance works — and other options you may want to consider.

Table of Contents

What Does Student Loan Forbearance Mean?
Private Student Loan Forbearance
Who Should Use Student Loan Forbearance?
Is Student Loan Forbearance Bad?
Pros and Cons of Student Loan Forbearance
Alternatives to Forbearance
FAQ

Key Points

• Student loan forbearance allows borrowers a temporary break from repaying student loans during financial hardship.

• There are two main types of federal student loan forbearance: general and mandatory, with different eligibility criteria and duration.

• Interest accrues on nearly all federal student loans in forbearance and on all private student loans, potentially increasing the loan balance.

• Forbearance is a short-term solution, currently available for up to 12 months, and can be renewed if the borrower is still struggling to pay.

• Alternatives to forbearance include income-driven repayment and refinancing student loans, which may offer more sustainable long-term solutions.

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 currently 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.

If you borrow a loan after July 1, 2027, however, you can only use forbearance for up to nine months during any 24-month period.

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.

As mentioned, forbearance will be capped at nine months in any two-year period for loans issued after July 1, 2027.

💡 Quick Tip: Get flexible terms and competitive rates when you refinance your student loan with SoFi. Note that refinancing federal loans means losing access to federal programs. Also, you might pay more interest if you refinance with an extended term.

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. For loans issued after July 1, 2027, deferment for economic hardship and unemployment will no longer be available.

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.

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.

• For loans issued after July 1, 2027, forbearance will be capped at nine months in any 24-month period.

Alternatives to Forbearance

Income-Driven Repayment

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-driven repayment plan.

Monthly payments are determined by your income and family size. After 20 or 25 years of regular, on-time payments on the Income-Based Repayment plan, any remaining loan balance may be forgiven.

Starting in the summer of 2026, borrowers will have a new option, called the Repayment Assistance Plan (RAP). On this plan, your payments are based on your adjusted gross income (AGI). RAP will forgive any remaining balance after 30 years of payments.

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. However, you may pay more interest over the life of the loan if you refinance with an extended term.

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.

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

FAQ

How does student loan forbearance work?

Student loan forbearance is a temporary suspension of loan payments due to financial hardship. It allows borrowers to pause payments for a specified period, currently up to 12 months. For loans issued after July 1, 2027, forbearance will be capped at 9 months in any two-year period.

How does interest accrue during forbearance?

Interest accrues on nearly all federal student loans and all private student loans during forbearance, potentially increasing the loan balance when payments resume.

What are the alternatives to student loan forbearance?

Alternatives include income-driven repayment, which bases monthly payments on income and family size, and student loan refinancing, which may offer lower interest rates but requires giving up federal benefits.

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.

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