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Student loans give many college students the opportunity to finance their education. Being well-informed on the nuts and bolts of student loans can make it easier to fund your education, while still keeping your eye on long-term goals like starting a career and saving for the future.

10 Student Loan Questions, Answered

There are many different types of student loans, with different loan amounts, costs, benefits, and repayment terms. In short, student loans are complicated. But don’t stress. We have answers to questions on everything from the difference between federal and private student loans to interest rates to when and how you’ll need to start repaying your loans. Let’s dive in.


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

1. How Do I Apply for Federal Student Loans?

To apply for federal student loans, you’ll need to fill out the Free Application for Federal Student Aid (FAFSA®). This opens the door to many forms of financial aid, including grants, work-study, and federal student loans.

After you submit the FAFSA, you’ll receive a Student Aid Report (SAR) via email or regular mail. The report includes your responses to the FAFSA questions as well as your Student Aid Index (SAI), formerly called Expected Family Contribution (EFC). Your SAI is a number that is used to determine your eligibility for federal financial aid.

Schools that receive information from your FAFSA will be able to tell you if you qualify for federal student loans. Almost every American family qualifies for federal student loans. Direct Subsidized Loans (in which the government covers your interest while you are in school and for six months after you graduate) are awarded based on financial need. Direct Unsubsidized Loans (in which you are responsible for all interest that accrues on the loan) are not need-based.

2. How Do I Fill Out a FAFSA Form?

You can fill out the FAFSA online at StudentAid.gov . While the FAFSA is known for being a confusing and complex application to complete, the form was streamlined for the 2024-2025 award year. Applicants can now skip as many as 26 questions, and some applicants may be able to complete it in as little as ten minutes.

While the FAFSA is typically available starting on October 1 for the following academic year, the new 2024-2025 FAFSA will not be available until December 31, 2023.

The first step to filling out the FAFSA is to create an FSA ID through StudentAid.gov, which serves as an electronic signature. Both you and your parents will need to create your own unique FSA ID. You’ll then want to check what information you’ll need to fill out the FAFSA and gather it before you begin.

The online FAFSA is typically processed by the Department of Education within three to five days, and then the information is sent to the list of schools you provided (keep in mind that you can list schools that you have not yet applied to.) The colleges use your FAFSA information to determine financial aid eligibility.

3. What is the Difference Between Private Student Loans and Federal Ones?

Federal student loans are funded through the government and are strictly regulated. To qualify for them, students must fill out the FAFSA. Private student loans, by contrast, are funded by banks, credit unions, and other private lenders.

Federal student loans for undergraduates don’t require a credit check and rates are set by Congress each year. Federal student loans also come with guaranteed benefits and protections, including income-driven repayment plans, deferment and forbearance options, and forgiveness programs.

Private student loans do require a credit check and rates are set by individual lenders. Generally, borrowers (or their parent cosigners) who have strong credit qualify for the lowest rates. Loan limits vary by lender, but you can often get up to the total cost of attendance, which is more than you can borrow from the federal government.

Since private student loans generally have higher interest rates than federal student loans and lack the same protections, it’s generally recommended that you tap all forms of federal aid, including federal student loans, before applying for private student loans.

Recommended: Private vs Federal Student Loans

4. How Much Does College Cost?

The average cost of tuition and fees for the 2023-2024 school year is $42,162 at private colleges, $23,630 for out-of-state students at public universities, and $10,662 for in-state residents at public schools, according to U.S. News.

The actual amount you will pay for college will depend on where you choose to go and how much financial aid, including need-based and merit-based aid, the school awards you.

If you submitted the FAFSA, each school that accepts you will also send you a financial aid award letter, also known as the student aid package or school offer. This letter will include the annual total cost of attendance and a list of financial aid options. Typically, your financial aid package will be a mix of gift aid, meaning financial aid that doesn’t have to be repaid, and federal student loans, which you have to repay with interest. The award letter is specific to that university or college, so you’ll receive a different letter from every school that accepts you as an incoming student.

5. Is College Worth the Cost? What Are the Benefits?

College represents an investment in yourself and your future, and only you can decide how much that’s worth. So, we’ll focus instead on the potential benefits of going to college. The most obvious benefit is that, if you want to pursue certain careers, you’ll likely need the appropriate college education and training.

Studies show that college graduates earn significantly more money, accumulated over a lifetime, than those who did not attend. Earning your degree of choice requires a solid plan and commitment, and these are excellent strategies and skills to develop before entering the working world. Plus, people often make lifelong friendships at college, and many universities have a strong alumni network, which can be helpful on many levels as you begin your career.

6. What Can Student Loans Be Used For?

Funds from federal and private student loans can be used for a variety of education-related expenses, including tuition, fees, textbooks, computers/software, transportation to and from school, housing (on or off campus), meal plans or groceries, and housing supplies (e.g., sheets, towels, etc.).

Basically, if the expense is essential to your educational success — meaning it supports your living arrangements, basic daily needs, or attendance at school — it’s likely a permissible use of student loan funds.

Recommended: Using Student Loans for Housing and Living Expenses

7. What is a Grace Period for Student Loans?

For most federal student loans, after you graduate, leave school, or drop below half-time enrollment, you have a six-month grace period before you must begin making payments. Grade periods for private student loans can vary by individual lender.

The student loan grace period is designed to give students a chance to find employment before their monthly loan payments kick in.

You are not required to make interest or principal payments during the grace period. However, if your loan isn’t subsidized by the government, interest will still accumulate during the grace period and be added to your balance, or capitalized, if you don’t pay it before your first loan payment is due. Making at least interest-only payments even when it’s not required can save you a significant amount of money over the life of your student loans.

8. How Do I Repay Student Loans?

Repayment on federal student loans generally begins after the six-month grace period. The standard repayment plan for federal student loans is 10 years, but borrowers are able to select one of the other repayment plans at any time without incurring any costs.

Federal student loans also offer income-driven repayment plans, which tie the borrower’s monthly payment to their income. While this may make the loan more expensive in the long-term, it can make the monthly payments more affordable. When deciding on a repayment plan, you want to consider factors like your income, estimated monthly payments on the student loan, and your overall budget. Over time, you may find it helpful to reevaluate the payment plan you’ve selected as your financial situation may change.

To determine the repayment options available with a private student loan, check directly with the individual lender.

If you have higher-interest Direct Unsubsidized Loans, graduate PLUS loans, and/or private loans, you may be able to refinance your student loans after you graduate at a lower interest rate. This could lower the total cost of your loans and make repayment easier.

9. Can I Repay Student Loans Early?

Yes, you can generally pay off student loans, including federal student loans and private student loans, early without incurring prepayment penalties. You may want to reach out to your lender first to make sure they will apply your extra payments to your principal, rather than towards your next payment.

There are many benefits to paying off your student debt early. You will save on student loan interest and get out of debt faster. However, you’ll want to make sure you have enough income to cover a higher monthly payment. Paying too much toward your student loan could cause you to fall short on essential bills like rent or a car loan. It might also delay saving for other goals.

Recommended: 6 Strategies to Pay off Student Loans Quickly

10. How Can I Apply for a Private Student Loan?

If you decide to apply for a private student loan to help pay for college, it’s a good idea to shop around and compare lenders. Your school’s financial aid office may be able to provide you with a list of lenders that they work with. However, you’re not restricted to this list.

Before you choose a lender, it’s a good idea to review factors including interest rate, loan terms, any additional fees associated with the loan, and the repayment plans available at each lender. Many lenders will allow potential borrowers to get prequalified to find out how much they may qualify to borrow and at what rates.

Another thing that may be worth considering is if the lender has any sort of programs for borrowers who run into financial difficulties down the road and may have trouble making payments on their student loans. Some lenders offer unemployment protection that allows eligible borrowers to temporarily pause payments on their student loans should they lose their job through no fault of their own.


💡 Quick Tip: Need a private student loan to cover your school bills? Because approval for a private student loan is based on creditworthiness, a cosigner may help a student get loan approval and a lower rate.

The Takeaway

Student loans can be instrumental in helping you pay for college, but it’s important to understand how they work before borrowing. Broadly, there are both federal and private student loans. Federal student loans are backed by the federal government and come with unique benefits like income-driven repayment plans and forgiveness programs.

Private student loans are offered by private lenders and generally require potential borrowers to undergo a credit check during the application process. Since private student loans tend to have higher interest rates and lack federal protections, you generally want to consider federal loans first.

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.

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

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

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

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

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.

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If you’re exploring career options, pharmacy might have popped up on your radar — and for good reason. Not only can pharmacists command a good salary, they also have job security, as the pharmaceutical industry is one that won’t vanish any time soon.

That said, how much does a pharmacist make? Is it worth all the trouble of going through pharmacy school to become one? Let’s find out.

What Are Pharmacists?

You’ve likely picked up a prescription or two at a pharmacy, but maybe you didn’t give any thought to the person behind the counter. This individual is your local pharmacist, and it’s their job to prepare and dispense prescription medications.

Pharmacist Job Responsibility Examples

In addition to doling out prescription drugs, pharmacists also consult with patients, provide instructions for how to take medications, and help patients find low-cost medications. Some also give health screenings and immunizations.

Keep in mind, a pharmacist often needs to be outgoing, since their work involves speaking with patients throughout the day. If that’s not your personality, you may want to look into jobs for introverts.

💡 Quick Tip: We love a good spreadsheet, but not everyone feels the same. An online budget planner can give you the same insight into your budgeting and spending at a glance, without the extra effort.

How Much Is a Starting Pharmacist Salary?

As with most professions, pharmacists tend to earn more money as they gain more experience. But what is a good entry-level salary for pharmacists?

Pharmacists with less than a year of experience generally earn, on average, about $54 per hour. That’s $112,320 per year.

Of course, how much you actually can earn depends on where you live, what your duties are, and whether you work for an independent pharmacy or a chain. It can also help to research the highest-paying jobs by state.

Recommended: Is a $100,000 Salary Good?

What Is the Average Salary for a Pharmacist?

Now that you see what starting salaries are for pharmacists, let’s address the next question: How much money does a more experienced pharmacist make?

Generally speaking, pharmacists are usually paid by the hour. A pharmacist with 10 years of experience earns an average of $67.05 per hour. That adds up to $139,464 per year.

What Is the Average Pharmacist Salary by State for 2023?

The amount you make will depend on where you live, among other factors. Here’s a look at the average pharmacist salaries by state, from highest to lowest.

Recommended: Pros and Cons of Raising the Minimum Wage

Pharmacist Job Considerations for Pay & Benefits

Where you live is one factor that can determine how much you earn as a pharmacist. Your on-the-job responsibilities may also play a role. For example, there are different job titles, and each has its own set of responsibilities, requirements, and salary ranges. Examples include:

•   Staff pharmacist

•   Pharmacy specialist

•   Clinical pharmacist

•   Pharmacy manager

•   Director of pharmacy

Some pharmacists may have roles and responsibilities beyond filling prescriptions, such as offering immunizations and health screenings. Some may be in charge of hiring and managing other employees. Some may work in traditional pharmacies, while others may work for companies focusing on chemotherapy, nuclear pharmacy, or long-term care.

Recommended: 25 High-Paying Trade Jobs in Demand

Pros and Cons of Pharmacist Salary

While being a pharmacist can be a rewarding job, there are potential drawbacks to keep in mind. Let’s look at some pros and cons.

Pros of Being a Pharmacist

Naturally, the high salary pharmacists tend to command may be one reason to consider this career path. Because many pharmacists get paid by the hour, they’ll be compensated fairly for their time even if they work more than 40 hours a week.

Another perk is that you may have a flexible schedule that allows you to work part-time or during certain hours. There could even be opportunities to work remotely, which may be useful if you’re working in a rural area.

You might also be able to open your own pharmacy instead of working for someone else. This brings freedom and flexibility to you as a business owner.

Finally, you’ll be a valuable member of your community, since it’s your job to help people on their path to wellness.

Cons of Becoming a Pharmacist

If becoming a pharmacist was easy, everyone would do it! For starters, you’ll need to have about six years of education after high school. And the cost of pharmacy school can range anywhere from $5,000 to $30,000 a year for an in-state public college, or $20,000 to $95,000 a year for a private school.

Depending on your financial situation, this could require you to tap into savings or take out student loans. (Creating a budget while you’re in school or just starting out can help you keep track of where your money is going. A money tracker app can help make the job easier.)

Another possible drawback? Some pharmacies may not guarantee a certain number of hours a week, and in that case, being paid hourly may not come with the big paycheck you’d expect.

Also keep in mind that some pharmacists work long hours, which can have a negative impact on your health and mental wellbeing.

💡 Quick Tip: Income, expenses, and life circumstances can change. Consider reviewing your budget a few times a year and making any adjustments if needed.

The Takeaway

If you’re looking for a rewarding and potentially lucrative job, becoming a pharmacist might fit the bill. You’ll help your local community get healthier, and depending on where you live and your level of experience, you could earn competitive pay, too.

FAQ

What is the highest pharmacist salary?

The state where pharmacists tend to earn the most is California. The average annual income of a pharmacist there is $161,597.

Is it hard to be hired as a pharmacist?

Becoming a pharmacist requires six years of education after high school. The workload is challenging, and pharmacies looking to hire generally have high expectations of applicants.

Photo credit: iStock/ADragan
SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

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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A merit scholarship is a type of college financial aid that is awarded based on a student’s merits, which might be academic, athletic, artistic, leadership-related, or pertaining to a special interest. A merit scholarship does not take a student’s financial need into consideration.

Read on for a closer look at exactly what a merit scholarship is, the different types of merit scholarships available, and how to get merit aid to help you pay for college.

What Is a Merit Scholarship?

Merit scholarships, also known as merit aid, are a kind of college funding that is not based on financial need but, instead, on a student’s merits or achievements. Merit aid is often given to students that excel in academics, extracurricular activities, athletics, arts leadership, and other areas.

Merit aid is often funded by colleges and universities themselves, and can typically be redeemed for multiple semesters and years. This type of financial aid is often used as a way to lure top performing students to their school. It might be a few thousand dollars or it could cover a student’s entire tuition. Merit scholarships are also offered by organizations, like the National Merit Scholarship Corporation, and private companies.


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

Types of Merit Scholarships

Merit scholarships come from different types of institutions and are awarded for a variety of reasons. Here’s a look at the different kinds of merit scholarships that are available.

Colleges and Universities

Many colleges and universities have merit aid awards that are offered to students. Sometimes referred to as institutional aid, merit aid programs vary from school to school. Some schools may consider all students for a merit award without needing an additional application. In some cases, there may be an additional application required. Select merit aid awards may be designed to cover the full cost of tuition, while others will only cover a portion.

Academic Merit Scholarships

Academic merit scholarships award money to students who demonstrate significant academic achievement in high school. Often, academic merit scholarships may consider a student’s grade point average (GPA), standardized test scores, class rank, or other factors.

Depending on the school, you may not need to submit or do anything extra to be awarded a merit-based scholarship. Instead, the school may decide based on your application alone. Academic merit aid is often redeemable for multiple years if you uphold the scholarship qualifications (such as maintaining a certain GPA each semester).

Recommended: How Much Does GPA Matter When Applying to College?

Athletic Merit Scholarships

Like academic merit aid, athletic merit scholarships are typically funded by the college or university. If you’re interested in an athletic scholarship, keep in mind that getting recruited can be a time-intensive process. Depending on the sport you play, you may need a highlight reel or video that shows off your skills. Typically, schools will also want to see your academic records and SAT or ACT scores.

Athletic scholarships may be offered for each year you attend school, provided you meet certain requirements, such as attending a certain number of practices/games each week while also maintaining a certain GPA.

Arts Merit Scholarships

Many liberal arts colleges offer merit scholarships to students who excel in the arts, such as music, acting, painting, drawing, or graphic design. If you have talent in and have been focusing on any area of the arts, you may be able to get merit money by applying for a degree program in the arts at a particular college or university.

Merit Scholarship Options From Organizations

Some nonprofits and community organizations offer their own merit scholarships to standout students. These scholarships have varying requirements but will typically focus on an eligibility requirement that’s important to the organization, such as a student’s leadership qualities, chosen career path, or involvement in community service during high school.

For example:

•   The Daughters of the American Revolution (DAR) offers the Richard and Elizabeth Dean Scholarship to students who are pursuing an undergraduate degree in American Studies.

•   The Society of Women Engineers (SWE) offers a scholarship to applicants who are studying at an accredited university and pursuing a career path in engineering, engineering technology, or computer science.

•   The National Association of Flavors and Food-Ingredient Systems (NAFFS) offers an annual scholarship to outstanding food science students.

Private Companies

Another source of merit scholarships is private companies. Companies like Coca-Cola, Burger King, Google, and more have annual scholarships. Like many other scholarship opportunities, the application requirements and eligibility criteria will vary based on the company and/or scholarship. Below are a few examples.

Coca-Cola Scholars Program

The Coca-Cola Scholars Program
is an achievement-based scholarship awarded to students in their final year of high school. Students are recognized for their ability to lead and serve, as well as their commitment to making a significant impact on their schools and communities. In 2023, the program provided over 6,750 Coca-Cola Scholars with more than $81 million in educational support.

Burger King Scholars

The Burger King Scholars program provides scholarships ranging from $1,000 to $60,000 to high school students who stand out based on their GPA, work experience, extracurricular activities, and community service.

Generation Google Scholarship

The Generation Google Scholarship program is designed for students pursuing degrees in computer science. The scholarship is awarded based on the strength of each candidate’s commitment to diversity, equity, and inclusion; demonstrated leadership; and academic performance. Selected students can receive $10,000 for college.

National Merit Scholarship Corporation

The National Merit Scholarship Program is an annual academic competition among high school students for recognition and college scholarships run by the nonprofit National Merit Scholarship Corporation (NMSC). To enter the program, you simply need to take the Preliminary SAT/National Merit Scholarship Qualifying Test, generally during your junior year, and meet other program entry requirements. There are three types of awards: National Merit Scholarships of $2,500, corporate-sponsored scholarships, and college-sponsored merit scholarships.

Recommended: Finding Free Money for College

How to Apply for a Merit Scholarship

The process for applying to a merit scholarship can vary significantly from scholarship to scholarship. Merit scholarships offered by colleges and universities typically don’t require students to fill out any additional paperwork beyond their application to the school. However, some schools require that students submit the Free Application for Federal Student Aid (FAFSA) to be eligible. This allows students to maximize their federal and state need-based financial aid before receiving school awards. It’s a good idea to contact the financial aid department for each school and ask what their merit scholarship process is.

Applying for merit aid from a source other than your school can be more time-consuming and will likely vary depending on the organization offering the award. In addition to an application detailing basic personal information, students may be required to write an essay or personal statement, gather letters of recommendation or go through an interview process.

If you’re interested in applying for a private merit scholarship, check in with the organization directly so you can be sure that you understand exactly what the application requirements are.

Recommended: Grants For College — Find Free Money for Students

What Can Merit Scholarships Pay For?

Frequently, if the merit scholarship is offered by the school, the award will go directly to pay your tuition bills. If there is any money left over after tuition is paid for, it can be used to pay for other educational expenses including room and board, books, or other fees. Each school will have its own procedures for how merit aid is awarded to students, so confirm any questions directly with the financial aid office.

Merit Scholarships and Income Taxes

Generally speaking, merit scholarships are not taxed by the Internal Revenue Service (IRS). According to the IRS, scholarships and grants are considered tax-free so long as the following conditions are met:

•   The student is pursuing a degree at an educational institution; and

•   The award money is used to pay for tuition and fees or other expenses related requirements at the educational institution, such as fees, books, and supplies.

There are some situations in which a merit scholarship may be taxed. If a grant or scholarship meets the following criteria, it may be taxable, according to the IRS:

•   The scholarship is used to pay for incidental expenses such as room and board, travel, or optional equipment.

•   The scholarship is awarded as payment for teaching, research, or other services (though there are some exceptions).

If you have any questions about whether or not a scholarship you’ve received is considered taxable income, consider consulting with a tax professional who can provide advice specific to your personal circumstances.

Recommended: Are Scholarships Taxable?

Finding Merit Scholarships

Check in with your college or university to find out if there are any school-specific awards available and determine how to file an application (if an additional application is required). There are numerous online resources and databases that can help you identify merit-based scholarships across the U.S. For students who are pursuing graduate degrees, there are also some scholarships for graduate students.

It can be a good idea to make a running list or spreadsheet of all of the merit-based scholarships that you are interested in, so you can keep the specific due dates and application requirements organized. This can help make the application process feel less overwhelming.

Consider Starting Early

Many merit-based scholarships look for demonstrated excellence over the course of an applicant’s entire four years of high school. Therefore, it could be a good idea to start thinking about what types of merit scholarships you’re interested in applying for as early as possible.

Maintaining Your Scholarship

It is important to note that some merit-based scholarships require the scholarship recipient to maintain a certain GPA and/or require specific campus or community involvement to continue receiving consistent scholarship funding.

If you do decide to apply for a merit-based scholarship, it’s a good idea to be prepared to not only do the hard work to secure the scholarship but also maintain it once you get to campus.

Other Ways to Help Finance College Tuition

If you do not receive any merit aid or enough merit aid to fully cover your college costs, there are still many funding options available to you. Often, the first step for students looking to secure aid is to fill out the FAFSA. Students must fill this out in order to receive any federal aid, including federal grants and scholarships, work-study, and federal student loans.

The federal work-study program sets students up with part-time jobs where they can earn money to put towards their educational costs.

Federal student loans offer low fixed interest rates, flexible repayment options, and possible forgiveness programs. Depending on your level of need, you may qualify for either subsidized or unsubsidized federal student loans. With a subsidized loan (for undergrads only), the federal government pays for any accruing interest on your loans while you’re in school and for six months after you graduate; with an unsubsidized loan, you are responsible for paying all interest that accrues on the loan.

If federal aid and merit-based scholarships aren’t enough to cover the cost of college, you might consider getting a private student loan. These loans are offered by banks, credit unions, and online lenders. Students and their co-signers (if applicable) apply for private student loans as if they were applying for other types of loans, such as auto and home loans.

Private student lenders are able to determine their own term lengths, interest rates, and repayment plans. Because these loans don’t come with the same borrower protections as federal student loans (such as income-based repayment plans and generous forbearance and deferment programs), you generally only want to consider private student loans after you’ve fully tapped federal aid options, including federal student loans.


💡 Quick Tip: It’s a good idea to understand the pros and cons of private student loans and federal student loans before committing to them.

The Takeaway

Merit scholarships are awarded to students based on merit alone, which might be academic, athletic, artistic, or in another specialized area. This money typically does not need to be repaid by student recipients. Some sources for merit scholarships include your college or university, nonprofit organizations, private companies, and the National Merit Scholarship Corporation.

Other options for college funding include financial aid (which includes need-based grants and federal student loans) and private student loans.

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

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

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

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

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

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

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

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