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It doesn’t matter whether you’re the student or the parents wading through college application and tuition figures: Going to college is a huge life decision, almost always synonymous with huge sticker shock.

According to U.S. News & World Report, the average cost for tuition and fees to attend a private college for the 2022-2023 academic year was $39,723. The price tag for a public college was $10,423 as an in-state student and $22,953 as an out-of-state student. Tuition, it should be noted, does not include room and board and other living expenses.

Fortunately, there are financial aid systems in place for college students to help offset the high costs. Here’s what you need to know about college financial aid, including how it works, the different types of financial aid, and how to apply.

What Is Financial Aid?

Broadly speaking, the term “financial aid” refers to any funding that doesn’t come from the student’s (or their family’s) savings. It can be heartening to know that schools typically don’t expect enrollees to cover college costs from their savings and income alone.

Financial aid is available from a variety of sources, including federal and state agencies, colleges, high schools, community organizations, foundations, and corporations. It can be awarded in the form of loans, grants, scholarships, and work-study programs. The type of aid determines whether it will have to be repaid or not: federal grants don’t need to be repaid, for example, but a loan will.

You can generally use financial aid to cover a range of college-related costs, including tuition and fees, room and board, books and supplies, and transportation.

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

Federal Student Aid

To apply for federal financial aid, you simply need to fill out the Free Application for Federal Student Aid (FAFSA®). This form is required in order to be considered for federal aid as well as for most college and state assistance. (Some private colleges use a supplemental form called the College Scholarship Service Profile, or CSS, which is more detailed and can be more time-consuming to complete.)

The Federal Student Aid office advises filling out the FAFSA as soon as possible after it becomes available, even if you’re unsure whether or not you will qualify for any financial aid.

Some states award aid on a first come basis, so submitting a FAFSA application early could be helpful. A FAFSA application is also a prerequisite to be considered for federal grants like the Pell Grant, which is “usually awarded only to undergraduate students who display exceptional financial need and have not earned a bachelor’s, graduate, or professional degree.”

The FAFSA is also required to be considered for the federal work-study program, which provides part-time jobs to help pay for education expenses. Such programs usually encourage community service work and work related to the expected course of study.

State-Based Student Aid

Depending on where you live or choose to go to school, you’ll likely also have access to aid at the state level. Virtually every state education agency has at least one grant or scholarship available to residents, and many states have a long list of available student aid programs.

While eligibility for state-based financial aid is usually restricted to in-state residents, that’s not always the case. SoFi has a state-by-state breakdown of grants and scholarships available for college students.

Merit- vs Need-Based Financial Aid

Financial aid can generally be broken down into two types — need-based aid and merit-based aid.

Some federal aid is need-based — like the Pell Grant and Direct Subsidized Loans (more on this loan type below) — meaning eligibility is based solely on the assets and income of the prospective student and their family. Factors like test scores or athletic ability, for example, have no bearing here.

The opposite is true for merit-based scholarships, which are based on a student’s talents and interests, whether they are artistic, academic, or athletic. A student’s financial situation is not considered here.

To learn about both merit- and need-based aid programs that may be a good fit for you, it’s a good idea to talk to your high school guidance counselor, as well as the financial aid office at your selected school.

You’ll be automatically considered for many need-based aid programs just by filling out the FAFSA. However, you may also want to search for private scholarships (which can be merit- or need-based) online. While these awards tend to be small, you may be able to combine several scholarships, which could make a dent in your expenses.

Recommended: SoFi’s Scholarship Search Tool

Federal Student Loans

Most students’ federal financial aid packages include federal student loans, which are awarded based on financial need and the cost of attending college. These include Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans.

The advantages of federal student loans include low, fixed interest rates, no credit checks required, unique borrower protections (like forbearance and deferment), and repayment plans based on income and/or your commitment to eligible public service work post-graduation.

With Direct Subsidized Loans, the government pays the interest while the student is attending school at least half-time. These loans are awarded based on financial need.

Direct Unsubsidized Loans, on the other hand, are awarded regardless of financial need. However, interest starts accruing on these loans from the moment you get them, though you can defer making any payments until six months after you graduate.

Direct PLUS Loans are also unsubsidized, and are awarded to either eligible graduate students or parents of undergraduate students. They require a credit check to ensure there’s no “adverse credit history.” In short, that means they can be more difficult to qualify for as compared to Direct Unsubsidized Loans.

Note that there will be no new Direct PLUS loans for graduate and professional students after July 1, 2026. However, students who already received a Grad PLUS loan before that date can continue borrowing under current terms through the 2028-29 academic year.

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

Private Student Loans

If your federal student aid package and other forms of funding don’t quite cover your cost of attending college, there are also private student loans to consider.

Private student loans are offered by banks, credit unions, and online lenders. The interest rates may be fixed or variable, and are set by the lender. Unlike federal student loans, private student loans require a credit check. Students who have excellent credit (or who have cosigners who do) tend to qualify for the lowest rates.

An advantage of private student loans is that you may be able to borrow up to 100% of the cost of college tuition and living expenses. However, private loans don’t always offer the same protections, such as income-driven repayment plans, that come with federal loans.

The Takeaway

Navigating the world of college financial aid can seem daunting, but understanding the process is crucial for making higher education more accessible and affordable.

By familiarizing yourself with the different types of aid available, such as grants, scholarships, loans, and work-study programs, you can create a comprehensive plan to finance 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.

FAQ

What is the FAFSA, and why is it important for college financial aid?

The FAFSA (Free Application for Federal Student Aid) is a form that students and their families must complete to be eligible for federal financial aid, including grants, loans, and work-study programs. It is crucial because it helps determine the amount of aid a student can receive.

What are the main types of financial aid available for college students?

The main types of financial aid include grants, scholarships, loans, and work-study programs. Each type serves a different purpose and has its own eligibility criteria and application process.

What are some tips for maximizing financial aid opportunities?

To maximize financial aid opportunities, students should complete the FAFSA early, research and apply for additional scholarships and grants, consider work-study programs, and stay informed about their college’s financial aid policies and deadlines. Additionally, maintaining good academic performance can open up more merit-based aid options.

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

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

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

College planning is an exciting time for you and your child. But, as exciting as it may be, there is a lot of preparation involved.

So, whether your child is entering into their freshman year of high school or a few months away from graduation, there is no better time to start planning for college than the present.

From figuring out your financials to helping your child prepare for admission exams, this college planning checklist for parents can help streamline your child’s transition from high school to college.

Starting a Savings Plan

According to the Education Data Initiative, the average cost of college in the U.S. is $38,270 per year, including books, supplies, and daily living expenses. Indeed, the cost of going to college has more than doubled over the past two decades.

With this in mind, it’s wise to start saving for college. But, while many parents may have the best intention of helping their children pay for their college expenses, they often fail to prepare.

So, even if your child is just now entering high school, you can still start saving and preparing for college costs. It’s never too late to start setting money aside for your children’s education.

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

Paying Close Attention to Grades and Curriculum

Since grades and curriculum are crucial to getting an acceptance letter, you may want to keep close tabs on your student’s grades and study habits. From helping with studying to supporting homework expectations, getting involved with your kid’s coursework may help them perform better in school.

You may also want to encourage them to take Advanced Placement courses. Since AP courses allow you to tackle college-level material while your child is still in high school, your student may get ahead by taking some.

Recommended: ACT vs. SAT: Which Do Colleges Prefer?

Encouraging Involvement with the Community

While the top factors in admission decisions tend to be academics, the next most important factors typically include a student’s demonstrated interest and extracurricular activities.

Encouraging your child to get involved in the community could potentially help them write a solid college application, and even help them decide what they want to do with the rest of their lives.

For example, if your child loves to run, they may want to try out for the track team to round out their classes or volunteer as a track coach for a youth team. Or, if they prefer journalism instead of sports, they may want to try writing for the school newspaper.

Not only will getting involved help with their college application, but it will also help sharpen their skills. So, don’t be afraid to encourage them to explore their passions and get involved with the school and/or local community. You might even want to get involved with them.

Planning for the SAT and ACT

Another key component to receiving acceptance letters from colleges and universities is having acceptable SAT and ACT scores. Some schools require the Scholastic Aptitude Test, known as the SAT, while others may require the American College Testing, known as the ACT. Some schools will accept either one, but it’s a good idea to check the preference of the schools your child will apply to.

To help your child prepare, you can encourage them to sign up for an after-school prep class or practice at home by using online resources such as Khan Academy’s free SAT practice program in partnership with The College Board.

Recommended: How to Help Your Child with SAT Practice

Researching Schools

One of the most important components of college planning for your child is helping them decide which university or college is the right fit. Fortunately, there are plenty of options available to help you find a school that will fit your child’s education and experience needs.

To get started in the decision-making process, you may first want to help your child decide what degree they would like to achieve. If they know they want to be an engineer, for example, you may want to focus on schools with good engineering programs.

It’s also wise to consider factors such as location and the type of college experience your child wants to have. For example, if they want to go to a school close to home and commute to save money, that desire will limit the search parameters.

Remember, while you may be the voice of reason, the ultimate decision is up to your child — the student. Simply help them evaluate all of the key factors in making an informed decision.

Scheduling College Visits

College visits can be a big help when it comes to finding the right fit. With this in mind, you may want to help your child plan a college visit well in advance of making a decision. The College Board recommends scheduling your visits during your child’s junior year in the spring if you have already researched schools.

For seniors, it may be best to schedule visits in the fall through the winter months. This may help seniors narrow down their options.

Since you want your child to get a feel of the college experience, you’ll want to make sure classes are in session. Therefore, it’s also wise to avoid visits during holidays or break weeks.


💡 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.

Investigating Financial Aid Options

Even if you have saved for your child’s education, you may want or need to explore other funding options, which could include your child taking on some of the cost.

Completing a Free Application for Federal Student Aid (FAFSA®) is one of the first recommended steps to applying for student financial aid, whether that is in the form of grants, scholarships, federal loans, or work-study.

It’s recommended to complete the form as soon as possible because there are differing deadlines to be aware of, including for individual colleges as well as federal and state deadlines. The sooner you submit your FAFSA, generally, the better your chances of receiving aid will be.

Colleges and universities will use the information reported on the FAFSA to determine how much aid a student is eligible for. Even if your child has not applied to a school yet, they can list that school on the FAFSA, so encourage them to include their dream school as well as those they consider safety schools.

Comparing each financial aid award letter can help you and your child determine the financial obligation of attending each school. It is recommended to exhaust all federal aid options before considering a private loan, but if you are looking for supplemental funding for your child’s education, private student loans may be an option.

The Takeaway

College planning is a significant journey that requires careful preparation and support. By starting early, managing finances wisely, visiting campuses, organizing important documents, and providing emotional support, parents can help their children navigate this exciting transition with confidence and ease.

Parents and students can pay for college with cash savings, federal financial aid (including grants, scholarships, and 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.

FAQ

When should parents start planning for their child’s college journey?

Parents should start planning early, ideally during the child’s high school years, to ensure they are well-prepared for the entire college process, from applications to move-in day.

What are some important financial steps parents should take when planning for college?

Parents should create a budget, explore financial aid options like scholarships, grants, and student loans, and understand the costs associated with college to manage expenses effectively.

How can parents support their child’s emotional transition to college?

Parents can support their child’s emotional transition by providing encouragement, being a listening ear, and helping them feel confident and excited about their new college life.

About the author

Ashley Kilroy

Ashley Kilroy is a seasoned personal finance writer with 15 years of experience simplifying complex concepts for individuals seeking financial security. Her expertise has shined through in well-known publications like Rolling Stone, Forbes, SmartAsset, and Money Talks News. Read full bio.

When it comes time to repay your federal student loans, you have to decide what kind of payment plan you want to be on. All borrowers qualify for the Standard Repayment Plan, which currently ensures you pay off your loan within 10 years. Starting in the summer of 2026, a new Standard Repayment Plan will be introduced and will require fixed payments over 10 to 25 years, depending on your loan amount.

The Standard Plan isn’t the only option available, and it might not be the best choice for your financial needs. By learning more about the Standard Repayment Plan, you can decide if it’s the right choice for you or you want to go a different route.

What Is the Standard Repayment Plan for Student Loans?

Upon graduation from college or if you drop below half-time enrollment, you have a six-month grace period for the Direct Loan program (nine months for a federal Perkins Loan) when you don’t have to make payments.

Once that ends, you’ll begin the Standard Repayment Plan, the default for all federal student loan borrowers once they have left school. That’s unless you choose a different plan. Let’s start by looking at the standard plan, which currently sets your monthly payments at a certain amount so that you will have your loans paid off within 10 years.

Recommended: Getting to Know Your Student Loan Repayment Options

Standard Repayment Plan Eligibility

Unlike some other federal student loan repayment plans, all borrowers are eligible for the standard plan.

Loans That Are Eligible

Federal Family Education Loan (FFEL) Program loans and Direct Loans qualify for the Standard Repayment Plan. They include:

•   Direct Subsidized and Unsubsidized Loans

•   Direct PLUS Loans

•   Direct Consolidation Loans

•   FFEL consolidation loans

•   FFEL PLUS loans

Keep in mind that you will only be able to use the Standard Repayment Plan if you have federal student loans, not private student loans.


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

How Does the Standard Repayment Plan Work?

With the Standard Repayment Plan, borrowers currently pay fixed monthly payments for 10 years. Because the plan offers a relatively short repayment period and monthly payments don’t change, you will save more money in interest than longer repayment plans.

For example, if you just graduated with the average federal student loan debt of $39,075 at 6.39% interest, you’ll pay $13,905.58 in total interest. Expanding to 25 years at the same rate will lower your monthly payment by almost half, but you’ll end up paying $39,272.31 in total interest.

There’s a variation on the 10-year plan: the graduated repayment plan. Under this plan, repayments start low, and every two years, your payments increase. This is a good option for recent graduates who may have lower starting salaries but expect to see their pay increase substantially over 10 years.

Note that the Standard Repayment Plan will change for loans taken out on or after July 1, 2026. The refashioned plan will still have fixed payments, but the repayment term will be based on the loan amount, from 10 years for less than $25,000 to 25 years for more than $100,000.

Recommended: Student Loan Payment Calculator

Payments on the Standard Plan

What may make the Standard Repayment Plan less appealing to some borrowers is that payments will likely be higher than on any other federal repayment plan because of the short loan term.

For people with a large amount of student debt or high interest rates, the monthly payments can be daunting or unmanageable. You might face sticker shock when you receive your first bill after your grace period, so don’t let it come as a surprise.

To determine if the Standard Repayment Plan is a good option for you, you can use the federal Loan Simulator to calculate student loan payments. Or contact your loan servicer before your first payment is due to see how much you will owe each month.

Changing Your Repayment Schedule

If you want to change your repayment schedule or plan, call your loan servicer and see what they can do.

You’ll need to contact each loan servicer if you took out more than one loan and want to change repayment schedules. You can change your federal student loan repayment plan at any time, free of charge.

What Are the Pros and Cons of the Standard Repayment Plan?

There are upsides and downsides to weigh when considering the Standard Repayment Plan.

Pros

You will pay off your loans in less time than you would with other types of federal repayment plans, which may allow you to set aside money for things like purchasing a home.

You’ll save money on interest, since you’re paying your loan back faster than you would on other federal plans.

The plan offers predictability. Payments are the same amount every month.

You don’t need to recertify your loan every year to prove your eligibility.

Cons

Your monthly payments will probably be higher than payments made under other student loan repayment plans with extended repayment periods.

Your monthly payments are based on the number of years it will take you to repay the loan, not on how much you can afford, as with income-driven repayment plans.

With the Income-Based Repayment plan, your remaining balance will be forgiven after you make a certain number of eligible payments over 20 to 25 years.

The Takeaway

The federal Standard Repayment Plan of 10 years could be right for you if you’re able to keep up with payments and you want to pay off your debt quickly. (Be aware that the Standard Plan will be changing for loans taken out on or after July 1, 2026.)

Another option is to refinance your student loans to improve your interest rate and possibly change your loan term. Just realize that refinancing federal student loans into a private student loan means giving up federal benefits like income-driven repayment and loan forgiveness. Refinancing with an extended term could also increase your total interest charges.

If refinancing makes sense for you, it could save you money over the life of your loans and potentially allow you to pay your debt back faster.

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.

About the author

Kylie Ora Lobell

Kylie Ora Lobell is a personal finance writer who covers topics such as credit cards, loans, investing, and budgeting. She has worked for major brands such as Mastercard and Visa, and her work has been featured by MoneyGeek, Slickdeals, TaxAct, and LegalZoom. Read full bio.