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Some students view summer as a time to rest and relax, while others see it as an opportunity to get ahead in their college coursework. Since many classes can be done at a community college, summer courses may also cost less than the classes you take during the fall and spring semesters.

If you’ve already sorted out your financing for the fall and spring semesters, you may wonder how you’ll cover the cost of a summer session. The good news is that the aid you get through the FAFSA can typically be used to pay for summer classes too. Here’s what you need to know.

When Can FAFSA Cover Summer Classes?

Filling out the Free Application for Federal Student Aid (FAFSA) gives you access to grants, federal student loans, and work-study funds. Whatever aid you qualify for can be used for any term — fall, spring, and/or summer — provided you’ll be enrolled at least half time.

However, you’ll have to reach out to your school’s financial aid to find out which FAFSA year applies to the summer session. For instance, your school may use the 2025-26 for summer 2026, or they may require the 2026-27 FAFSA.

The type of financial aid you can use to offset the cost of summer classes includes:

•  Grants This is a form of gift aid and generally does not need to be paid back. You may be eligible for federal, state, and school-specific grants.

•  Federal student loans These are fixed-interest-rate loans from the government. Students with financial need may qualify for subsidized student loans. This means the government covers your interest while you are in school and for six months after you graduate. Unsubsidized student loans are available to all eligible students, regardless of need.

•  Work-study This federal program provides part-time work, typically on campus, to help students with financial need earn money to help cover college-related expenses.

If you’re thinking of using financial aid to pay for summer classes, keep in mind that there is a maximum amount of aid (including federal student loans) you can get each year, regardless of when you take your classes. You can refer to your financial aid letter (which you likely received before the fall session started) to see the maximum amounts you have been granted. These annual limits stretch over fall, spring, winter, and summer sessions.


💡 Quick Tip: Make no payments on SoFi private student loans for six months after graduation.

Filling Out FAFSA for Summer Aid

The FAFSA is generally released each year on October 1. However, the 2026–27 FAFSA became available earlier, on September 24, 2025. Since some aid is awarded on a first-come, first-served basis, it’s a good idea to fill out the FAFSA soon after it’s released. This can potentially increase your chances of getting all the aid you qualify for.

If you already have a FAFSA on file for the previous fall/spring academic year, you may not need to file a new one for the summer session. However, as mentioned above, schools have varying rules on what academic year they belong in for financial aid purposes. Before submitting the FAFSA, contact your college’s financial aid office to see if you need to fill out a new FAFSA and which year you should select.

Filling out the FAFSA for summer aid is the same as filling out the FAFSA for any term. You’ll need to create an FSA ID and then complete and submit your form online at studentaid.gov. You can also print out and mail a paper form.

Alternatives to FAFSA

If you don’t qualify for financial aid or you used up the aid you were awarded during the fall and spring semesters, don’t stress. There are other ways to offset the cost of summer classes.

Summer Jobs

If work-study is not available, you might look for a part-time summer job either on or off-campus to help pay your summer tuition. Working during the summer can also give you valuable work experience and help you start building your resume.

Internships

A paid internship can be an ideal way to earn extra money as a college student. These positions often pay well and allow you to gain experience and connections that could help you find employment after you graduate. Your school’s career center may have leads on internships. You can also search job boards and tap your personal and professional network to find summer internships.

Summer Class Scholarships

Many organizations, companies, and schools offer scholarships (both need- and merit-based) to college students. Typically, there aren’t restrictions on what term students can use the scholarship for, so you can apply for scholarships and use the awards to pay for your summer classes. Private scholarship amounts tend to be small, but if you can cobble together several awards, it could make a significant dent in your summer tuition.

Your school’s financial aid office or career center may be able to help you find scholarships based on your qualifications. You can also use one of the many online scholarship search tools to find scholarships you may qualify for.

Summer Grant Programs

Some universities offer grants that are designed specifically for students looking to take classes during the summer. For instance, Hunter College in New York City offers a Summer Scholarship for undergraduates who take one summer class that counts towards their degree.

Many states also offer college grants that can be used for the summer term. The Pennsylvania Higher Education Assistance Agency, for example, allows eligible students to receive a Pennsylvania State grant for the summer term.

It can be worth reaching out to your school’s financial aid office to find out what summer funding programs may be available. Also visit the department of education for your state to see if there are any summer-specific state grants you might qualify for.

Private Student Loans

If you’ve reached your annual limit for federal student loans and need more funding to cover the cost of summer classes, you might consider applying for a private student loan.

These loans are offered by banks, credit unions, and online lenders and typically come with higher lending limits than federal student loans. In fact, you can usually borrow up to the full cost of attendance from a private lender, minus any financial aid. Interest rates vary by lender, so it’s a good idea to shop around. Generally borrowers (or cosigners) with excellent credit qualify for the lowest rates.

Keep in mind, though, that private student loans don’t offer the same protections (like access to forgiveness programs and income-based repayment) that come with 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.

Why Take Summer Classes?

Whether you choose to study at your current college or a local community college, summer classes offer a number of benefits.

You might opt to go to school in the summer to retake classes you struggled with in the past in order to boost your GPA. Or if you’re behind in your credits, you might use the summer term to catch up and make sure that you can graduate on time. You can also use a summer session to knock out core or elective course requirements in order to graduate early.

In addition, taking summer classes could lead to cost savings. Some schools offer reduced tuition for these classes. You also might be able to take classes at a local community college for a lower price and transfer those credits to your school.

Recommended: Can You Get a Student Loan for Summer Classes?

The Takeaway

FAFSA aid can typically be used for any college term — including the summer. Just keep in mind that there is an annual maximum you can take out in federal loans, which includes the summer semester. Grants also usually have annual limits.

Other sources of funding for summer classes include private scholarships, summer college grants, income from a part-time job or paid internship, 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

Do summer classes count as semesters for FAFSA?

Technically, yes. While there is no specific federal funding for summer classes, the aid you are eligible for can be applied to summer tuition. You can find out from your school’s financial aid office which FAFSA year will apply to summer classes.

Which year of FAFSA covers summer classes?

It depends on the college’s policy. For instance, your school might use the 2025-26 FAFSA for the 2026 summer session or require you to fill out the 2026-27 form. Before submitting the FAFSA, you’ll want to contact your college’s financial aid office to see which FAFSA year you should select.

Is there a maximum amount that you can receive from FAFSA overall?

Yes, there are annual limits on how much you can receive in federal financial aid, which includes grants, loans, and work-study programs. The limit for each type of aid varies by school, year, and other factors. You’ll want to be careful to plan your expenses and financing strategies with these limits in mind.

Photo credit: iStock/Yuricazac

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SOISL-Q425-002

It’s a common (and frustrating) experience to have to pay a fee when you access your cash at an out-of-network ATM. Especially considering how much ATM fees are.

While there are different ATM fees for different banks, currently, an ATM withdrawal will cost you $4.77 on average. When you are just trying to take out $20, that can be a lot! But no matter how much cash you are withdrawing, ATM fees can be costly.

To better understand ATM fees and avoid paying them, read on. You’ll learn typical costs and smart ways to avert those ATM charges and keep more of your hard-earned cash.

What Are the Different Types of ATM Fees?

Bank account holders typically pay no fees for using in-network ATMs. However, these machines may not always be conveniently located.

Indeed, approximately 60% of ATMs today are owned and serviced by independent operators and their affiliates — not banks. If you use an out-of-network ATM, you could end up paying a fee to your bank, as well as a fee to the ATM operator.

How much ATMs charge depends on the type of fees your bank and the owner of the ATM impose. Here are some typical charges for using an ATM:

The “Out-of-Network” Fee (From Your Bank)

This fee can be charged by your bank for using a non-branded or non-partner ATM. It’s kind of like going to a doctor that’s not on your insurance plan — you might be able to do it, but it could be more expensive.

On average, this charge accounts for about $1.58 of the total fee, according to Bankrate. The fee can apply to any type of transaction performed at an ATM, including withdrawals, transfers, and even balance inquiries. Typically, you will be told about such a fee — with a message that pops up on the screen — before you finalize your ATM transaction.

The Surcharge Fee (From the ATM Owner)

This one comes from the ATM owner, and can be thought of as a convenience charge for using an out-of-network ATM. The average ATM surcharge in the U.S. currently runs $3.19, according to Bankrate. However, surcharges can vary by state and venue, and you may encounter higher amounts in places where ATMs are in greater demand.

If you’re at an entertainment venue or theme park in a popular tourist destination, for instance, you could pay considerably more.

When using an ATM that isn’t part of your bank’s network of machines, the machine should notify you about a fee charged by the bank or company that operates the ATM.

International and Foreign Transaction Fees

Traveling overseas can come with even more fees to watch out for, such as foreign transaction fees on both purchases and ATM withdrawals.

When using an ATM in a foreign country, you can incur a fee of around 1% to 3% of the transaction amount. Some financial institutions, however, have no foreign transaction fees, and can be worth looking at if you frequently travel overseas.

💡 Quick Tip: Typically, checking accounts don’t earn interest. However, some accounts do, and online banks are more likely than brick-and-mortar banks to offer you the best rates.

How Much Are ATM Fees in 2025?

As mentioned above, ATM fees can take a bite out of your money. Here are specifics on how much ATMs charge, as of September 2025:

•  The average out-of-network fee that a bank charges its customers is $1.58.

•  The average surcharge by the ATM’s owner/operator when you use an out-of-network terminal is $3.19.

•  The total average out-of-network fee is approximately $4.77 per transaction.

Why Do Banks and ATM Owners Charge These Fees?

Banks and ATM owners typically charge these fees for several reasons, including to help cover the cost of operating ATMs and to process ATM transactions. For example, the surcharge fee charged by the ATM owner compensates them for the use of their machine. This fee typically goes for the operation and maintenance of the machines as well as to transaction processing costs. It also allows the ATM owner to make a profit.

If you use an out-of-network ATM, your bank may charge you for using an ATM that’s not in their network. This fee may also be a way to encourage you to use in-network ATMs.

💡 Quick Tip: The myth about online accounts is that it’s hard to access your cash. Not so! When you open the right online checking account, you’ll have ATM access at thousands of locations.

6 Smart Ways to Avoid or Minimize ATM Fees

If having to pay money to access your money frustrates you, there’s some good news — it is possible to avoid ATM fees or at least encounter them less frequently.

Here are some strategies to help you avoid these fees.

1. Use Your Own Bank’s Branded ATMs

Finding out where your financial institution’s ATMs are located in your area, or wherever you are traveling to, can save you money and hassle. These may be ATMs branded with the institution’s name and logo, or in a network of partner ATMs, such as Allpoint or Cirrus.

You can research this information on your bank’s website or app. For example, you can find fee-free ATMs via the SoFi app with just a few clicks on your phone.

Find a Bank With a Large Fee-Free ATM Network

When you’re choosing a bank, find out how big their ATM network is. The bigger the ATM network, the easier it should be to access an ATM, even when you’re traveling. For instance, SoFi makes it easy to find a fee-free ATM near you. When you open a SoFi checking account you have fee-free access to more than 55,000 ATMs worldwide.

3. Choose a Bank That Reimburses Out-of-Network Fees

Not all banks charge out-of-network ATM fees, so it can be in your best interest to shop around and compare ATM fees of different institutions. Look for a bank that doesn’t charge ATM fees, and/or a bank that refunds ATM fees charged by machine providers.

Online vs. traditional banks often have more lenient policies regarding ATM fees. They typically don’t have their own ATM networks, but will partner with large networks and may refund some fees charged by out-of-network ATM providers.

Another thing to consider as you’re choosing a bank is that some banks also charge fees for depositing cash at an ATM, especially out-of-network ATMs. Find out if any bank you’re considering does this, and search for an institution that doesn’t impose this fee. (While SoFi members are not able to deposit cash at ATMs, they can deposit money at participating retailers using the Green Dot Network. Just note that the retailers charge a small fee for this.)

4. Get Cash Back at the Point of Sale

Many retailers and convenience stores offer cash back when you make a purchase using a debit card. This can be a convenient way to get cash without paying an ATM fee. It can be a good idea, however, to make sure that neither the retailer, nor your bank, charges a cash-back fee.

That’s one difference between an ATM card vs. a debit card — with an ATM card you can only make ATM transactions, while a debit card allows you to make purchases at retailers and withdraw money at an ATM. However, you may still be charged ATM fees for withdrawing money with a debit card.

5. Use Peer-to-Peer Payment Apps to Pay People Directly

With a peer-to-peer (P2P) payment app like Venmo, PayPal, or Cash App — or a similar service offered by your financial institution — you can easily pay your friends via P2P transfers with just a few taps on your phone. That way you can avoid a trip to the ATM entirely.

Not only is sending money to friends online generally more convenient than having to go to the ATM, it also means you won’t have to carry sums of cash around.

6. Plan Ahead and Withdraw Larger Amounts Less Often

Fees are typically charged per transaction, so one way to avoid charges is to withdraw more cash than you need, whether you’re using your card or making a cardless withdrawal, whenever you go to the ATM. This can also yield significant savings when you are traveling overseas, where surcharges can be much higher than domestic ATM fees.

You may want to keep in mind, however, that there are usually some ATM withdrawal limits.

The Takeaway

ATM fees can be expensive and they can add up over time. Fortunately, there are ways to avoid these fees. Choose a bank with a large ATM network and use those in-network ATMs whenever you can. If your current bank charges ATM fees, consider switching to one that doesn’t, or look for a bank that reimburses you for these fees. A few simple steps like this can help you keep more of your cash.

FAQ

Do ATMs charge a fee just to check your balance?

ATMs may charge a fee to check your balance, especially if you use an out-of-network ATM. Before you check your balance at an ATM, find out if you will be charged for the service before proceeding.

Are ATM fees higher at airports?

ATM fees are often higher at busy locations like airports that get a lot of foot traffic. Since not all banks or ATM networks are located at airports, the ATMs that are there may charge higher fees for the convenience of using them.

Why do some ATMs have higher fees than others?

ATMs in popular areas that get a lot of traffic, such as airports or bars, for instance, may charge higher fees for the convenience and easy access they provide. Fees may also vary based on different operational costs ATMs or their networks might have.

How do I find in-network ATMs for my bank?

To find in-network ATMs for your bank, check your bank’s website or mobile app.Typically, there will be an ATM locator on the app or website where you can plug in your location and find in-network ATMs near you.

What Is the difference between a surcharge and an out-of-network fee?

A surcharge is a fee charged by an ATM owner when non-customers use their machines for transactions. An out-of-network fee is charged by banks when you use an ATM that’s not in their network.

Essentially, both fees are related to using an ATM out of your bank’s network. That’s why it’s a good idea to use in-network ATMs whenever you can.

SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. The SoFi® Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

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Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

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Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

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SOBNK-Q325-109

Paying off debt vs. saving money is a tough financial choice. Prioritizing debt repayment can help you repay what you owe faster, freeing up more money in your budget for saving. It can also help you spend less on interest charges.

But paying off debt and delaying saving might backfire. If you don’t have savings and you get hit with an unplanned expense, you could end up with even more high-interest debt.

Whether it makes sense to pay off debt or save depends largely on your financial situation. The right decision might be to try to do both.

The First Priority for Everyone: Build a Starter Emergency Fund

Without an emergency fund, an unplanned expense or loss of income could result in racking up even more debt, putting you further in the hole.

Financial professionals generally recommend building an emergency fund of three to six months’ worth of expenses. If you’re self-employed or work seasonally, you may want to aim closer to eight or even 12 months’ worth of expenses. An emergency fund calculator can help you figure out how much to save.

You could stash your emergency savings in a high-yield savings account. These accounts are designed to earn more interest than traditional savings accounts, which could potentially help your savings earn even more.

To figure out how quickly the balance in your savings account might grow, you can look at how frequently the interest compounds. (Compounding is when the interest is added to the principal in the account and then the total amount earns interest.) By plugging your information into an APY calculator, you can see the power of compound interest at work.

💡 Quick Tip: Are you paying pointless bank fees? Open a checking account with no account fees and avoid monthly charges (and likely earn a higher rate, too).

How to Decide What Comes Next: Compare Interest Rates

Once you’ve got your emergency fund in shape, you can focus on your debt. What’s important here is the kind of interest your debt has. Analyze all the debt you have — car loans, student loans, credit cards, and so on — and determine whether it’s high-interest debt or low-interest debt.

When to Aggressively Pay Down Debt (High-Interest Debt)

High-interest debt, such as credit card debt, can quickly accumulate and become overwhelming. The longer it takes to pay off, the more interest you’ll accrue, making it harder to escape the debt cycle. When you have high-interest debt, it makes sense to focus on paying off your debt first.

When to Prioritize Saving and Investing (Low-Interest Debt)

On the other hand, if you have debts with relatively low annual percentage rates (APRs) and you don’t feel unduly burdened by them, you could prioritize saving, while paying off your loans and other debts according to their payment schedules.

Recommended: Why Your Debt to Income Ratio Matters

The Best of Both Worlds: How to Pay Off Debt and Save Simultaneously

If you have high-interest debt under control and you also have an emergency fund, consider saving and paying down debt at the same time. Here are some tips to help you manage both.

•   Create a budget: A budget can help you track your income, expenses, and savings. The key is to allocate specific amounts for debt repayment and savings to ensure both are addressed every month.

•   Cut unnecessary expenses: Review your expenses and identify areas where you can cut back. Redirect these funds toward debt repayment and saving.

•   Automate saving: Once you have target monthly savings amounts, it’s a good idea to set up automatic transfers to your savings accounts. This ensures consistent saving without the temptation to spend the money.

While you’re at it, make sure you’re happy with your banking experience. You can compare bank accounts to get the best interest rates and customer service, for example.

•   Take advantage of your employer’s 401(k) match: If your employer offers a 401(k) plan with a company match, it’s a good idea to try to contribute at least enough to get the maximum employer match. This is essentially free money and it could help add to your retirement savings.

•   Increase income: You might also want to explore ways to boost your income, such as taking on a side gig, freelancing, or asking for a raise. You can then use the additional income to pay down debt faster and boost your savings.

•   Use windfalls wisely: If you receive a bonus, tax refund, or any unexpected sum of money, consider using it to pay down debt or boost your savings rather than going on a shopping spree.

Strategies to Pay Down Debt

Once you commit to paying down your debt, you’ll want to come up with a plan for how to do it. Here are some strategies to consider.

The Debt Snowball Method

With the snowball method, you list your debts in order of size. You then funnel extra money towards the smallest debt, while paying the minimum on the rest. When the smallest balance is paid off, you move on the next-smallest debt, and so on. This can provide psychological benefits by giving you quick wins and motivating you to continue.

As you’re paying down debt, be sure to monitor your checking account regularly to make sure you have enough money in it to cover your bill payments.

The Debt Avalanche Method

Another approach is the avalanche method. With this strategy, you list your debts in order of interest rate. You then direct any extra money toward the balance with the highest rate, while paying the minimums on the other debts. Once the highest-interest debt is paid off, you move to the next highest, and so on. The debt avalanche minimizes the amount of interest you pay over time.

Recommended: How to Set and Reach Your Savings Goals

The Takeaway

Saving and paying down debt is a balancing act. Which is more important? There’s no one-size-fits all answer. Generally speaking, you’ll want to fund your emergency savings account before you aggressively focus on debt payoff. After that, you can focus on saving and knocking down debt at the same time.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

What is considered high-interest debt?

While there is no one definition of high-interest debt, it is typically considered to be debt with a high interest rate, often in the double digits. For example, the average credit card interest rate as of August 2025 was 24.35%. Credit cards are considered high-interest debt, as are certain types of loans (such as personal loans) for borrowers whose credit is poor.

How much should I have in my emergency fund before aggressively paying down debt?

Before aggressively paying down debt, it’s a good idea to save three to six months’ worth of living expenses in an emergency fund. Otherwise, if you don’t have any savings to draw on to cover an unexpected expense or event, you might have to use high-interest credit cards to get by, which would compound your debt.

Should I use my savings to pay off my car loan or student loans early?

Whether you should use your savings to pay off your car loan or student loans early depends on your specific financial situation. Generally speaking, if you have additional savings beyond the recommended three to six months’ worth of money in an emergency savings fund, you might consider using some of that extra savings to pay off your car loan or student loans early. But it’s best not to use the money in your emergency fund for this, so that you’ll be covered if a surprise expense pops up.

Should I stop contributing to my 401(k) to pay off debt?

If your employer offers a 401(k) plan with matching employer funds, it’s wise to contribute at least enough to get the full employer match, if possible. This is essentially free money you would otherwise miss out on. Once you’ve received the 401(k) employer match, you could work on paying off your high-interest debt.

Does paying off debt or saving have a bigger impact on my credit score?

Paying off debt generally has a bigger impact on your credit score than saving does.That’s because paying off debt can reduce your credit utilization, which is the amount of credit you’re using compared to the amount of credit you have available. The lower your credit utilization, the better. A low credit utilization can have a significant positive impact on your credit score. In fact, credit utilization accounts for 30% of your FICO® Score.

About the author

Rebecca Lake

Rebecca Lake has been a finance writer for nearly a decade, specializing in personal finance, investing, and small business. She is a contributor at Forbes Advisor, SmartAsset, Investopedia, The Balance, MyBankTracker, MoneyRates and CreditCards.com. Read full bio.

SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. The SoFi® Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

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Paying student loans on time can have a positive effect on your credit score and help build a good credit history. On the flip side, when you have a late or missed student loan payment, that can be reflected on your credit report as well.

If you’re wondering how to remove student loans from a credit report, the answer is that it’s only an option if there’s inaccurate information on the report. Student loans are eventually removed from a credit report, however, after they’re paid off or seven years after they’ve been in default.

Here’s what to know about student loans on a credit report, what happens when you default on a loan, and how to remove student loans from a credit report if there’s inaccurate information.

What Is a Credit Report?

Before considering the impact of student loans on your credit report, it’s helpful to review what a credit report is. A credit report is a statement that includes details about your current and prior credit activity, such as your history of loan payments or the status of your credit card accounts.

These statements are compiled by credit reporting companies who collect financial data about you from a range of sources, such as lenders or credit card companies. Lenders use credit reports to make decisions about whether to offer you a loan or what interest rate they will give you. Other companies use credit reports to make decisions about you as well – for example, when you rent an apartment, secure an insurance policy, or sign up for internet service.


💡 Quick Tip: Ready to refinance your student loan? With SoFi’s no-fees-required loans, you could save thousands.

Defaulting on Student Loans

It’s also worth reviewing what happens when a student loan goes into default. One in 10 people in the United States has defaulted on a student loan, and 6.24% of total student loan debt is in default at any given time, according to the Education Data Initiative.

The point when a loan is considered to be in default depends on the type of student loan you have. For a loan made under the William D. Ford Federal Direct Loan Program or the Federal Family Education Loan (FFEL) Program, you’re considered to be in default if you don’t make your scheduled student loan payments for a period of at least 270 days (about nine months).

For a loan made under the Federal Perkins Loan Program, the holder of the loan may declare the loan to be in default if you don’t make any scheduled payment by its due date. The consequences of defaulting on student loans can be severe, including:

•   The entire unpaid balance of your student loans, including interest, could be due in full immediately.

•   The government can garnish your wages by up to 15%, meaning your employer is required to withhold a portion of your pay and send it directly to your loan holder.

•   Your tax return and federal benefits payments may be withheld and applied to cover the costs of your defaulted loan.

•   You could lose eligibility for any further federal student aid.

And you don’t have to default on your student loans to experience the consequences of nonpayment. Even if your payment is only a day late, your loan can be considered delinquent and you can be charged a penalty fee.

How Long Do Student Loans Remain on a Credit Report?

If you are delinquent on your student loans or go into default, that activity is reported to the credit bureaus. It will remain on your credit report for up to seven years from the original delinquency date.

The good news is that the more time that passes since your missed payment, the less impact it has on your credit score.

The exception to this is a Federal Perkins Loan, which is a low-interest federal student loan for undergraduate and graduate students who have exceptional financial need. This type of loan will remain on your credit report until you pay it off in full or consolidate it.

On the other hand, if you made timely payments on your loan and paid it off in full, it may appear on your credit report for up to 10 years as evidence of your positive payment history and can boost your credit score.

Recommended: How Do Student Loans Affect Your Credit Score?

How Do I Dispute a Student Loan on My Credit Report?

It’s a good habit to periodically check your credit report. You can request a free report from each of the three major credit reporting agencies — Equifax®, Experian®, and TransUnion® — by visiting AnnualCreditReport.com. The bureaus are required by law to give you a free report every 12 months.

There are three reasons your student loan might have been wrongly placed in default and reported to the credit bureaus by mistake, including:

1. If You Are Still in School

If you believe your loan was wrongly placed in default and you are attending school, contact your school’s registrar and ask for a record of your school attendance. Then call your loan servicer to ask about your record regarding school attendance.

If they have the incorrect information on file, provide your loan servicer with your records and request that your student loans be accurately reported to the credit bureaus.

2. If You Were Approved for Deferment or Forbearance

If you believe your loan was wrongly placed in default, and you were approved for (and were supposed to be in) a deferment or forbearance, there is a chance your loan servicer’s files aren’t up to date. You can contact the loan servicer and ask them to confirm the start and end dates of any deferments or forbearances that were applied to your account.

If the loan servicer doesn’t have the correct dates, provide documentation with the correct information and ask that your student loans be accurately reported to the credit bureaus. Under the Fair Credit Reporting Act, a borrower may appeal the accuracy and validity of the information reported to the credit bureau and reflected on their credit report.

Recommended: Student Loan Deferment vs Forbearance: What’s the Difference?

3. Inaccurate Reporting of Payments

If your loan has been reported as delinquent or in default to the credit bureaus, but you believe your payments are current, you can request a statement from your loan servicer that shows all the payments made on your student loan account, which you can compare against your bank records.

If some of your payments are missing from the statement provided by your loan servicer, you can provide proof of payment and request that your account be accurately reported to the credit reporting agencies.

In all three cases, if you believe there is any type of error related to your student loan on your credit report, it’s best practice to also send a written copy of your dispute to the credit bureaus so they are aware that you have reported an error.

Recommended: How to Build Credit Over Time

Why Your Student Loans Should Stay on Your Credit Report

You generally can’t have negative but accurate information removed from your credit report. However, you can dispute the student loans on your credit report if they are being reported incorrectly.

On the bright side, if you’re paying your student loans on time each month, that looks good on your credit report. It shows lenders that you are responsible and likely to pay loans back diligently.


💡 Quick Tip: When refinancing a student loan, you may shorten or extend the loan term. Shortening your loan term may result in higher monthly payments but significantly less total interest paid. A longer loan term typically results in lower monthly payments but more total interest paid.

When You’re Having Problems Paying Your Student Loans

If you’re having difficulty making regular payments on your federal or private student loans, there are things you can do before the consequences of defaulting kick in.

As mentioned above, you can apply for student loan deferment or forbearance. It’s also a good idea to contact your loan servicer to discuss adjusting your repayment plans. Other options include:

Income-Driven Repayment

If you’re having trouble paying your federal student loans on time, you may be able to make your loans more affordable through a federal income-driven repayment plan. These plans cap your payments at a small percentage of your discretionary income and extend the repayment term to 20-25 years. Once the repayment period is up, any remaining balance is forgiven (though you may be subject to income taxes on the canceled amount).

Due to Trump’s One Big Beautiful Bill, many income-driven repayment plans are closing. Currently, you may still enroll in the Income-Based Repayment (IBR). And a new plan — the Repayment Assistance Plan (RAP) — will become the main option for new borrowers in mid 2026. RAP payments will be based on a percentage of your adjusted gross income (AGI).

Student Loan Refinancing

Refinancing your student loans may also be an option — if you extend your term length, you may qualify for a lower monthly payment. Note that while these options provide short-term relief, they generally will result in paying more over the life of the loan.

When you start making your payments by the due date each month, you may see that your student loans can become a more positive part of your credit report. Again, while these options provide short-term relief, they generally will result in paying more over the life of the loan.

The Takeaway

While you generally can’t remove student loans from a credit report unless there are errors, it isn’t a bad thing if you make payments on time, as that can help build your credit profile. If a loan is delinquent, it will be removed from your credit report after seven years, though you will still be responsible for paying back the loan.

If you’re having trouble making loan payments, there are ways to make repayment easier. Borrowers with federal student loans can look into forgiveness, an income-driven repayment plan, or a change to the loan’s terms.

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.

FAQ

Is it illegal to remove student loans from a credit report?

There’s no legal way to remove student loans from a credit report unless the information is incorrect. If you think there’s an error on your credit report, you can contact your loan servicer with documentation and ask them to provide accurate information to the credit reporting agencies. It’s also a good idea to send a copy of the dispute to the credit bureaus as well.

How do I get a student loan removed from my credit report?

If you paid your student loan off in full, it may still appear on your credit report for up to 10 years as evidence of your positive payment history. It takes seven years to have a defaulted student loan removed from a credit report. Keep in mind you are still responsible for paying off the defaulted loan, and you won’t be able to secure another type of federal loan until you do.

How can I get rid of student loans legally?

If you have federal student loans, options such as federal forgiveness programs or income-driven repayment plans can help decrease the amount of your student loan that you need to pay back. If you have private or federal student loans, refinancing can help lower monthly payments by securing a lower interest rate and/or extending your loan term. If you refinance a federal loan, however, you will no longer have access to federal protections and benefits. And you may pay more interest over the life of the loan if you refinance with an extended term.

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).

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