SpendSLR Archives

Q: How does being in debt affect the economy?

Being in debt can strain personal finances, reducing consumer spending and savings. This can slow economic growth, as consumer spending is a key driver. High levels of debt can also lead to increased default rates, affecting financial institutions and potentially causing broader economic instability.

Q: How many Americans have student loans?

Approximately 45 million Americans have student loans, collectively owing over $1.7 trillion. This widespread debt affects a significant portion of the population, impacting their financial decisions and economic contributions.

Aug

2025

The Impact of Student Loan Debt on the Economy

By Sarah Brooks | Debt Payoff, Student Loans, student_loan | Comments Off

Table of Contents

Understanding How Many Americans Have Student Loans
Demographics Most Affected by Student Loan Debt
Reviewing Effects of Student Loan Debt on the Economy
Paying Off Student Loans Can Benefit Individuals and the Economy
FAQ

Unpaid student loans can take a significant toll on personal finances. For millions of Americans, outstanding student debt means years of ongoing payments, often averaging hundreds of dollars per month. It can be hard to balance paying back what’s owed on student loans while meeting immediate expenses and pursuing long-term financial goals.

But the impact student loan debt has on the economy goes deeper than dinging individuals’ bank accounts — it impacts entire economic sectors. Here’s how student debt affects the economy, plus ways borrowers can pay off their loans faster.

Key Points

• Student loan debt limits the disposable income of borrowers, leading to decreased spending on goods and services, which can slow economic growth.

• High debt levels often delay homeownership, marriage, and starting a family, affecting long-term economic stability and consumer markets.

• Borrowers are less likely to save for retirement or emergencies, which can lead to financial vulnerability and reduced economic resilience.

• The burden of student loans can influence career decisions, pushing graduates towards higher-paying jobs rather than pursuing their passions or contributing to less lucrative but essential sectors.

• Ways to pay off student loans quickly include making more than the minimum payment due, pursuing loan forgiveness programs, or refinancing their student loans.

Understanding How Many Americans Have Student Loans

For a comprehensive view of student loan debt and the economy, it’s useful to know just how much money is owed by borrowers across the U.S. in educational debt. In 2025, the cumulative total of student loan debt in the U.S. is nearly $1.8 trillion.

This educational debt load affects tens of millions of Americans. More than 42 million borrowers have federal student loan debt, with an average balance per individual of $38,375. To obtain a bachelor’s degree, the average public university student takes out almost $32,000 in undergraduate student loans.

For those with master’s degrees, student loan debt is even higher. The average master’s degree holder’s student loan debt is $84,203, which is more than double the average student debt balance.

Given these massive amounts, it becomes clearer how the U.S. college student loan debt crisis and the economy are enmeshed.

Demographics Most Affected by Student Loan Debt

The amount of student loan debt a borrower has varies by a number of demographic factors, including the level of education they attain, with individuals with graduate student loans owing more, as well as their race, income level, and gender. For instance, more women than men have student loan debt and black student loan holders tend to owe more than white borrowers, according to the Education Data Initiative (EDI).

Age is also a factor that can significantly affect student loan debt.

Age Groups Carrying the Most Debt

Borrowers under age 40 owe 54.5% of student loan debt, the EDI reports. While those in their 30s owe 32.5% of the student loan debt (or $517.45 billion in loans), student loan borrowers ages 18 to 29 are the age group most likely to have debt: One in four borrowers in this group owes student loan debt.

Older adults are also struggling with debt from their college years. In fact, adults ages 50 to 61 have an average student loan debt of $46,790, which is the highest student loan debt per borrower.

Here’s how student loan debt breaks down among age groups:

Age	Average student loan debt
18 to 29	$23,795
30 to 39	$42,014
40 to 49	$44,798
50 to 61	$46,790

Reviewing Effects of Student Loan Debt on the Economy

If the total amount of student loan debt held by Americans sounds staggering, that’s because it is. That total — $1.777 trillion — is more than the GDP of countries such as Australia, Spain, and South Korea.

With these numbers in mind, let’s dive deeper into the impact this massive amount of educational debt has on the U.S. economy.

Does Student Loan Debt Hamper Spending?

For those paying off a student loan, the average student loan payment for bachelor’s degree-holders is $336. Those with a master’s degree pay $842 per month, on average. For many — especially those embarking on a career and earning an entry-level salary — this ongoing financial obligation can put a serious dent in funds they could otherwise spend elsewhere.

Student loan repayments can take a big chunk of the money that individuals have available each month for buying, investing, saving, or starting a business.

Here’s why: More money spent paying back student loans means less money for consumer spending and saving. Consumer-driven economies grow when people spend their hard-earned money. If people are struggling to pay off their student loans, they’ll have less money to spend on purchases that help fuel the economy, businesses, and the workforce. The more individuals there are who are struggling to pay off loans, the greater this economic dampening effect that occurs.

During periods that require economic resilience, such as in a recession, reduced spending can be especially harmful. On the flipside, consumer spending can help to stimulate a floundering economy, possibly mitigating or reversing sudden downturns in specific sectors.

When spending doesn’t happen during a downturn, it can take longer for the economy as a whole to bounce back. And for those with student debt, it can also be harder to weather a financial crisis, compounding the pain of higher unemployment and lower spending.

Recommended: How Do Student Loans Work?

How Do Student Loans Affect the Housing Market?

With less money to spend, it’s no surprise that people with student loans have fewer funds for big ticket items, such as buying a home. According to the EDI, 29% of borrowers with student loan debt say their debt has prevented them from owning a home, and 51% of those who are currently renting say their debt prevents them from buying a place of their own.

Because home ownership is a major driver of wealth accumulation, delaying homeownership can impact an individual’s net worth for decades to come.

How Do Student Loans Stifle Entrepreneurship?

Small businesses contribute to the economy in major ways. In fact, they’re responsible for 1.5 million jobs annually, accounting for 64% of all new jobs. Small businesses employ 61.7 million people, which is almost 46% of the private sector workforce.

Future business owners who are saddled with student loan debt may not be able to turn to traditional means of financing, such as small business loans. It can be harder to get approved for financing when your debt-to-income ratio is high due to loans.

And when an individual with student debt does become an entrepreneur, they’re at risk of falling behind on student loan payments if their income decreases as they work to launch their business.

Paying Off Student Loans Can Benefit Individuals and the Economy

When examining student loan debt and the economy, it may be helpful for borrowers to research additional ways to pay off existing student loans — both for their own financial well-being and the future growth of the U.S. economy as a whole.

Here are some strategies that could help those with outstanding student debt to pay down their student loans faster.

Paying More than the Minimum Due

Student loan interest generally accrues over time. In most cases, the longer student loan debt goes unpaid, the more the borrower will owe, as unpaid interest gets added to the base dollar amount that had been borrowed from the lender. This is called compounding, and most student loans compound their interest daily. Our student loan calculator can help you see exactly how much you’re spending on interest over the life of the loan.

Many lenders allow borrowers the option to submit a minimum payment. In the short term, paying a lower amount per month can free up some income or cash. But paying the minimum does little or nothing to tackle the outstanding loan balance — typically, the borrower is just paying the accruing interest.

Paying more than the minimum can help reduce the length of time it will take to pay off an existing student loan, shrinking the principal balance as well as the amount of interest paid during the life of the loan. You can ask your lender to apply the additional payment to the principle of the loan, which can help reduce the amount you pay in interest over the life of the loan.

While increasing monthly payments may not be manageable for every individual, paying a little extra when possible can help borrowers eliminate student debt faster. If nothing else, borrowers may want to apply occasional windfalls, such as a work bonus or tax refund, toward their outstanding student debt.

Applying for Loan Forgiveness

Under some circumstances, the government will forgive federal student loans, essentially canceling out the remaining debt after a specific set of conditions have been met.

Some teachers and public servants are among the groups that may be eligible for federal student loan forgiveness programs, such as Public Service Loan Forgiveness (PSLF). This program is available to qualifying federal student loan borrowers who work in public service for an eligible non-profit or government organization and who make a qualifying number of payments on an eligible repayment plan.

Some states and other organizations also offer forgiveness, especially for those in the healthcare field. There are also military forgiveness programs. Check to see what forgiveness programs are available that you might be eligible for.

Refinancing Student Loans

Refinancing student loans with a private lender may result in lower interest rates and/or the ability to pay off what’s owed in a shorter amount of time.

Student loan refinancing replaces outstanding student loans with a new loan. The new loan can have different terms and ideally, a lower interest rate.

However, it’s important to know that refinancing federal student loans with a private lender means that the borrower will forfeit federal benefits, such as access to income-driven repayment plans and federal public service forgiveness programs.

Budgeting and Financial Planning for Faster Repayment

Finally, to help pay off your student loans faster, examine your budget carefully. Track your spending and expenses and look for areas where you can cut back. For instance, maybe you can eat home more often to save on restaurant bills, or eliminate one of your streaming services — or both. You can then apply the money you save to your student loan payments.

Another step that could help: automating your monthly payments. That way, you can avoid any late fees. Plus, some lenders offer interest rate discounts to borrowers who enroll in auto pay.

The Takeaway

Student loan debt affects the economy in a number of different ways. Borrowers with student loan debt may have to reduce their consumer spending and delay buying a home or starting a business, for example, which can affect the broader economy.

Fortunately, there are methods borrowers can use to help manage student debt, such as paying more than the minimum amount due, budgeting for faster repayment, looking into student loan forgiveness programs, and considering student loan refinancing.

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

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

FAQ

How does student loan debt affect life?

Student loan debt can impact life significantly, affecting financial stability, mental health, and major life decisions. It may delay homeownership, marriage, and starting a family, and can cause stress and anxiety. High debt levels may also limit career choices and savings for retirement.

How does being in debt affect the economy?

Being in debt can strain personal finances and thus reduce consumer spending and savings. This can slow economic growth, as consumer spending is a key driver. High levels of debt can also lead to increased student loan default rates, affecting financial institutions and potentially causing broader economic instability.

How many Americans have student loans?

Almost 43 million million Americans have student loans, collectively owing over $1.7 trillion. This widespread debt affects a significant portion of the population, impacting their financial decisions and economic contributions.

What economic sectors are most impacted by student loan debt?

The economic sectors most impacted by student loan debt include consumer spending, since borrowers with high student loan debt may cut back on spending; housing, because student loan debt makes it more difficult for many student loan holders to save for a down payment or qualify for a mortgage; and entrepreneurship since those with student loan debt may have a tough time qualifying for financing, including small business loans.

Can widespread student loan forgiveness boost the economy?

It’s not known whether widespread student loan forgiveness could boost the economy and there is a lot of debate about the effect it might have. Some economists think widespread forgiveness could provide an economic boost because it would increase consumer spending, drive sales of housing, and help with the launch of new businesses. Other economists believe the impact might be small, that forgiving student loans would be a huge cost to the federal government, and that forgiveness would be unfair to borrowers who have already repaid their loans.

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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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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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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SOSLR-Q325-023

Aug

2025

Can Student Loans Be Discharged?

By Becca Stanek | Debt Payoff, Student Loans, student_loan | No Comments

Table of Contents

When You Can Discharge Student Loans
Alternatives to Discharging Student Loans
When to Refinance Your Student Loan Debt
The Takeaway

Student loans can be discharged in certain circumstances. When federal student loans are discharged, your requirement to pay back some or the entire remaining amount of your debt due is eliminated. However, this usually only happens in unique life situations, such as school closure, permanent disability, or death. However, because of a new student loans bankruptcy process, it may be possible to discharge student loans in bankruptcy.

Ahead, we explain who may qualify for student loan discharge, and other options for managing student loan debt.

When You Can Discharge Student Loans

Interested in discharging your student loans? Wondering when can student loans be discharged during bankruptcy? Here are details about some of the circumstances under which you may qualify for student loan discharge.

Total and Permanent Disability Discharge

To qualify for a federal student loan discharge due to disability, you must have a “total and permanent” disability that can be verified by the U.S. Department of Veterans Affairs, the Social Security Administration, or a qualified doctor. You also must complete a discharge application available at StudentAid.gov, which includes documentation showing you meet the government’s requirements for being considered disabled.

Veterans may be eligible for student loan discharge if they can provide paperwork from the VA demonstrating they either have a disability that is 100% disabling due to their service, or are totally disabled due to an individual unemployability rating.

For those borrowers who are eligible for Social Security Disability Insurance or Supplemental Security Income, you may also qualify for loan discharge by providing documentation of your Social Security award.

Not all private student lenders give you the option to discharge your loans if you’re permanently disabled. While you might be able to file an application to discharge your federal student loans because of disability, with private loans, you may have to consider legal action. You should speak to an attorney to determine if that’s the right course of action.

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

Student Loan Discharge Due to Death

Federal student loan discharge may also be granted if the borrower dies. Parents who have taken out Parent PLUS loans on behalf of a student may also have these loans forgiven if the student or parent dies.

Proof of death, such as an original death certificate or certified copy, must be submitted in order for the loans to be canceled.

Declaring Bankruptcy and Discharging Student Loans

Can student loans be discharged during bankruptcy? And does bankruptcy clear student loans? The answer is yes to both questions, but the process can be lengthy and somewhat complicated.

Until late 2022, it was challenging and rare for federal student loans to be discharged through bankruptcy. But a process unveiled by the Justice Department in November 2022 makes it easier. Those filing for bankruptcy must fill out what’s called an attestation form to verify that they fit the definition of “undue hardship.” Their request is then evaluated by the bankruptcy judge under new standards, and their debt may be fully or partially forgiven.

Borrowers must pass a three-part test to prove they qualify for “undue hardship” and should have their federal loans discharged:

1. Is the borrower able to maintain a minimal standard of living while paying their student loans?

2. Have they made a good faith effort to repay the loans?

3. Will they continue to struggle to make payments during the remaining term of their loan?

It’s important to understand that filing for bankruptcy can have serious consequences. For instance, bankruptcy will impact your credit for years. It’s best to consult with a qualified professional, such as an attorney specializing in bankruptcy law, before making any decisions.

Closed School Discharge of Loans

If your school closes, you may be eligible for a 100% discharge of certain loan types, including Direct Loans, FFEL, and Federal Perkins loans. However, for this to apply, you must meet one of the following criteria:

• You must have been enrolled at the time the school closed

• You must have been on an approved leave when the school closed

• Your school closed within 180 days after you withdrew

Only federal student loans can be discharged due to school closure and other circumstances. For private loans, you must contact your lender directly to see if you will qualify with them.

Loan Discharge Because You Were Misled By Your College

If you have federal loans, and you feel your school “misled” you — for instance, by promising you’d get certain jobs or certain salaries — you may qualify to apply for Borrower Defense Discharge through the Department of Education. Note that this program has been challenged in court, but borrowers can still submit an application.

The application process is lengthy and submitting an application does not guarantee that your loans will be canceled.

False Certification Discharge

In very rare circumstances, you may be eligible for a discharge if loans were issued but they should not have been given out to you in the first place. For instance, this may apply if:

• Your school falsely certified that you had a high school diploma or GED

• You had a disqualifying status, such as a physical or mental condition, criminal record or other circumstance, at the time of the school certified your eligibility

• Someone else or your school signed your name on the loan application or promissory note

In all of the above circumstances, your loans might be discharged.

Unpaid Refund Discharge

If you leave school after getting a loan, your school may also be required to return part of your loan money. You may be eligible for a partial discharge if you withdraw from school, and the college did not return the portion it was required to under the law.

In this case, only the amount of the unpaid refund would be discharged.

Alternatives to Discharging Student Loans

Since qualifying for a student loan discharge is only permitted under certain circumstances, it’s important to look at other options for federal loans. Here are some of the other choices you may have to help you pay off your student loan debt:

Forbearance: Forbearance temporarily allows you to stop making your federal student loan payments or reduce the amount you have to pay. You may qualify if you are unable to make monthly loan payments because of financial difficulties, medical expenses, or changes in employment. Usually interest will still accrue while your loan is in forbearance.

Deferment: You may be able to defer your loans in certain circumstances, such as going back to school. Depending on your loan type, your loans may still accrue interest while in deferment. However, if you qualify for deferment on federal subsidized loans, you generally will not be charged interest during deferment. Note that deferment for economic hardship or unemployment will no longer be an option for loans issued after July 1, 2027.

Income-based repayment: With income-driven repayment, you may be able to reduce your monthly student loan payments if you can’t afford your monthly payments on a Standard Loan Repayment plan. With an IDR plan, you’ll make monthly payments of 10% to 20% of your monthly discretionary income. The Income-Based Repayment plan will forgive your remaining balance after 20 or 25 years. Note that two current options, PAYE and ICR, are set to close in the coming years. Existing borrowers will still be able to use IBR or switch to the new Repayment Assistance Plan (RAP).

Cancellation: If you have a federal Perkins Loan, you may qualify for up to 100% cancellation if you served full-time in a public or nonprofit elementary or secondary school system as a teacher serving low income students or students with disability or teach in a certain field. In addition to teachers, the following jobs may qualify you for partial or whole Perkins Loan cancellation: early childhood education provider, employee at a child or family services agency, faculty member at a tribal college or university, firefighter, law enforcement officer, librarian with master’s degree at Title I school, military service, nurse or medical technician, professional provider of early intervention (disability) services, public defender, speech pathologist with master’s degree at Title I school, volunteer service (Americorps Vista or Peace Corps).

Forgiveness: For borrowers working certain qualifying public service jobs, student loan forgiveness may be an option. With this option, your remaining student loan balance will be forgiven after you make 120 qualifying monthly payments while working full-time for a qualifying employer, which can include government organizations and certain not-for-profit organizations.

When to Refinance Your Student Loan Debt

Unlike student loan forbearance or deferment, which are temporary, short-term solutions, student loan refinancing can be a long-term debt solution. If you don’t qualify for the options mentioned above, refinancing can help simplify your repayment process since all of your loans can be taken care of with one monthly payment. If you refinance with a private lender, you can also change the term length on your student loans.

Should you refinance your student loans? You’ll need to weigh the pros and cons. One very important consideration is that if you refinance your federal student loans with a private lender, you will forfeit your eligibility for federal loan benefits, including student loan forgiveness or deferment. Using a student loan refinance calculator can show you how much you might save.

Recommended: Student Loan Refinancing Guide

The Takeaway

As you can see, it is possible to discharge student loans, but only in unique life circumstances, such as disability or false certification. If you do qualify, you may not have to pay some or all of your student loans, though you may have to pay taxes on the discharged balance.

If you don’t qualify for student loan discharge or one of the alternatives programs, refinancing your student loans with a private lender like SoFi can help get you a potentially lower interest rate, or a lower monthly payment if you extend your loan term. (You may pay more interest over the life of the loan if you refinance with an extended term.) Refinancing federal student loans also means losing access to federal discharge programs and other benefits.

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

This article is not intended to be legal advice. Please consult an attorney for advice.

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

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SOSLR-Q325-037

Aug

2025

Examining How Student Loan Deferment Works

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

Federal loans allow you to stop or reduce your payments in some circumstances, such as by enrolling in grad school, for up to three years — which is known as deferment. Deferment on private student loans varies by lender, and not all lenders offer it.

One thing you generally don’t want to do is simply stop making payments on your student loan. Whether your loans are federal or private, this puts you at risk of default, which can have a number of negative consequences.

Read on to learn more about student loan deferment, including what it is, how it works, its pros and cons, plus some alternative ways to get student debt relief.

Table of Contents

What Is Student Loan Deferment?
How Does Student Loan Deferment Work?
Why Defer Student Loans
Why Not Defer Student Loans
Types of Student Loan Deferment
Consequences of Defaulting on Federal Student Loans
Consequences of Defaulting on Private Student Loans
Who Is Eligible for Student Loan Deferment?
What if You Have Private Student Loans?
The Limits of Student Loan Deferment
Other Options for Reducing Federal Student Loan Payments
The Takeaway
FAQ

Key Points

• Student loan deferment allows borrowers to temporarily pause or reduce payments for up to three years.

• Interest does not accrue on subsidized federal loans during deferment but does on unsubsidized loans.

• Eligibility includes financial hardship, unemployment, military service, in-school enrollment, or medical treatment.

• Deferment can provide financial relief but may increase total loan costs due to accruing interest.

• Alternatives include income-driven repayment plans, forbearance, or refinancing, depending on financial goals.

What Is Student Loan Deferment?

Student loan deferment allows qualified applicants to reduce or stop making payments on their loans for up to three years. If you have a subsidized federal loan, no interest accrues during the deferment period. If you have an unsubsidized federal loan, interest will accrue and will be added to the loan amount (or capitalized) at the end of the deferment period.

Deferments are available on federal loans including Direct Loans, FFEL Program loans, and Perkins Loans.

Private student loans may or may not offer deferment options to borrowers. If you have questions about your private student loan, you’ll want to check in with your lender directly.

How Does Student Loan Deferment Work?

If you have a federal student loan and are no longer in school at least half-time, you will need to apply to defer payments on your student loan. This usually involves submitting a request to your student loan servicer. You will also likely need to provide documentation to show that you meet the eligibility requirements for the deferment (more on eligibility requirements below).

If you have an unsubsidized federal student loan and are granted deferment, interest will continue to accrue during the deferral period. You will have the option to either pay the interest as it accrues or allow it to accrue and be capitalized (added to your loan principal balance) at the end of the deferment period.

Deferments are available on federal loans including Direct Loans, FFEL Program loans, and Perkins Loans.

If a private lender offers deferment, they will likely have their own forms and requirements.

Why Defer Student Loans

Applying for deferment may make sense if you are facing short-term difficulty paying your student loans, since a deferment can provide you with the opportunity you need to stay afloat financially. And, if you have a subsidized loan, deferment won’t make your loan any more expensive in the long run.

Deferring student loans also won’t directly impact your credit score.

Why Not Defer Student Loans

If you’re able to stay on top of your loan payments, then deferment likely doesn’t make sense. If you think that you may have long-term difficulty making your monthly loan payments, deferment may not be the best option, either.

If you have an unsubsidized federal loan, interest will continue to accrue during deferment. At the end of the deferment period, this interest will be capitalized on the existing loan amount (or the principal loan value). Moving forward, interest will be calculated based on this new total. So essentially, you are accruing interest on top of interest, which can significantly increase the amount of interest owed over the life of the loan.

Pros and Cons of Student Loan Deferment

Student loan deferment can help borrowers who are struggling financially, but it may not be the right choice for everyone. Here are some pros and cons to consider when evaluating deferment options for federal student loans.

Pros	Cons
Borrowers are able to temporarily suspend or lower the monthly payments on their student loans.	On most federal student loans, interest continues to accrue. This may significantly increase the total cost of borrowing over the life of the loan.
Borrowers may qualify for deferment for periods of up to three years.	Because interest may continue to accrue during deferment, other options — like income-driven repayment plans — may be more cost-effective in the long term.

Types of Student Loan Deferment

For federal student loans, there are a few different deferment options. Here are the details on some of the most common reasons borrowers apply for deferment.

In-School Deferment

Students who are enrolled at least half-time in an eligible college or career program may qualify for an in-school deferment. If you are enrolled in a qualifying program at an eligible school, this type of deferment is generally automatic. If you find the automatic in-school deferment doesn’t kick in when you are enrolled at least half-time in an eligible school, you can file an in-school deferment request form.

Unemployment Deferment

Those currently receiving unemployment benefits, or who are actively seeking and unable to find full-time work, may be able to qualify for unemployment deferment. Borrowers can receive this deferment for up to three years.

Note that under the new ‘Big, Beautiful Bill,” loans made after July 1, 2027 are no longer eligible for deferments based on unemployment hardship.

Economic Hardship Deferment

This type of deferment may be an option for borrowers who are receiving merit-tested benefits like welfare, who work full-time but earn less than 150% of the poverty guidelines for your state of residence and family size, or who are serving in the Peace Corps. Economic hardship deferments may be awarded for a period of up to three years.

Note that under the ‘Big, Beautiful Bill,’ loans made after July 1, 2027 are no longer eligible for deferments based on economic hardship.

Military Deferment

Members of the U.S. military who are serving active duty may qualify for a military service deferment. After a period of active duty service, there is a grace period in which borrowers may also qualify for federal student loan deferment.

Cancer Treatment Deferment

Individuals who are undergoing treatment for cancer may qualify for deferment. There is also a grace period of six months following the end of treatment.

Other Types of Deferment

There are other situations and circumstances in which borrowers might be able to apply for deferment. Some of these include starting a graduate fellowship program, entering a rehabilitation program, or being a parent borrower with a Parent PLUS Loan whose child is enrolled in school at least half-time.

Consequences of Defaulting on Federal Student Loans

If you simply stop making payments as outlined in your loan’s contract, you risk defaulting on your student loan. Default timelines vary for different types of student loans.

Most federal student loans enter default when payments are roughly nine months, or 270 days, past due. Federal Perkins Loans can default immediately if you don’t make any scheduled payment by its due date.

Consequences of defaulting on federal student loans includes:

• Immediately owing the entire balance of the loan

• Losing eligibility for forbearance, deferment, or federal repayment plans

• Losing eligibility for federal student aid

• Damage to your credit score, inhibiting your ability to qualify for a car or home loan or credit cards in the future

• Withholding of federal benefits and tax refunds

• Garnishing of wages

• The loan holder taking you to court

• Inability to sell or purchase assets such as real estate

• Withholding of your academic transcript until loans are repaid

Consequences of Defaulting on Private Student Loans

The consequences for defaulting on private student loans will vary by lender but could include repercussions similar to federal student loans, and more, including:

• Seeking repayment from the cosigners of the loan (if there are any cosigners)

• Calls, letters, and notifications from debt collectors

• Additional collection charges on the balance of the loan

• Legal action from the lender, such as suing the borrower or their cosigner

To avoid these negative consequences, it’s best to contact your lender as soon as you think you may miss a payment. Your lender may be more willing to work with you prior to your loan entering default.

Recommended: Private Student Loan Consolidation

Who Is Eligible for Student Loan Deferment?

To be granted a deferment on federal loans, borrowers need to meet certain criteria.

You may be eligible if you’re:

• Enrolled at least part-time in college, graduate school, or a professional school

• Unable to find a full-time job or are experiencing economic hardship

• On active military duty serving in relation to war, military operation, or response to a national emergency

• In the 13-month period following active duty

• Enrolled in the Peace Corps

• Taking part in a graduate fellowship program

• Experiencing a medical hardship

• Enrolled in an approved rehabilitation program for the disabled

Borrowers who re-enroll in college or career school part-time may find that their federal student loans automatically go into in-school deferment with a notification from their student loan provider.

Loans may also keep accruing interest during deferment — depending on what types of federal student loans the borrower holds. Borrowers are still responsible for paying interest if they have a:

• Direct Unsubsidized (Stafford) Loan

• Direct PLUS Loan

If you don’t pay the interest during the deferment period, the accrued amount is added to your loan principal, which increases what you owe in the end.

Recommended: Student Loan Deferment in Grad School

What if You Have Private Student Loans?

Private lenders aren’t required to offer deferment options, but some do. For example, some might allow you to temporarily stop making payments if you:

• Lose your job

• Experience financial hardship

• Go back to school

• Have been accepted into an internship, clerkship, fellowship, or residency program

• Face high medical expenses

Typically, even while a private student loan is in deferment, the balance will still accrue interest. This means that in the long term, the borrower will pay a larger balance overall, even after the respite of deferment.

In most cases, even with accrual of interest, deferment is preferable to defaulting. Borrowers with private loans could contact the lender to ask what options are available.

The Limits of Student Loan Deferment

Keep in mind that deferment is not a panacea. By definition, it’s temporary. Federal student loan borrowers will ultimately need to go back to making payments once they are no longer deferment-eligible. For example, a borrower’s deferral might end if they leave school, even if their ability to pay has not improved.

Federal loans can only be deferred for up to three years. With private loans, there may not be an option to defer at all, and if it is an option, the limit may be no more than a year.

Other Options for Reducing Federal Student Loan Payments

Besides student loan deferment, you have other choices if you can’t afford the total cost of your monthly payments. Here’s a look at some alternatives to deferment.

Income-Driven Repayments

For a longer-term solution, you may want to consider an income-driven repayment plan.

If you qualify, you may be able to reduce your monthly payment based on your income. Enrolling in an income-driven repayment plan won’t have a negative impact on your credit score or history. On certain income-driven repayment plans, student loan balances can be forgiven after 20 or 25 years, depending on the payment plan that the borrower is eligible for.

Starting on July 1, 2026, income-driven repayment plans PAYE, ICR, and SAVE will be replaced by a new Repayment Assistance Plan (RAP). The existing IDR plans will be eliminated by July 1, 2028. With RAP, payments range from 1% to 10% of adjusted gross income with terms up to 30 years. After the term is up, any remaining debt will be forgiven.

Forbearance

Student loan forbearance is another way to suspend or lower your student loan payments temporarily during times of financial stress, typically for up to nine months in a 24-month period under the new Repayment Assistance Plan. Generally, forbearance is not as desirable as deferment, since you will be responsible for accrued interest when the forbearance period is over no matter what type of federal loan you have.

When comparing deferment vs. forbearance, you’ll want to keep in mind that there are two types of forbearance for federal student loan holders: general and mandatory.

General student loan forbearance is sometimes called discretionary forbearance. That means the servicer decides whether or not to grant your request. People can apply for general forbearance if they’re experiencing:

• Financial problems

• Medical expenses

• Employment changes

General forbearance is only available for certain student loan programs, and is only granted for up to nine months at a time. At that point, you are able to reapply for forbearance if you’re still experiencing difficulty. General forbearance is available for:

• Direct Loans

• Federal Family Education Loan (FFEL) Program loans

• Perkins Loans

Mandatory forbearance means your servicer is required to grant it under certain circumstances. Reasons for mandatory forbearance include:

• Serving in a medical residency or dental internship

• The total you owe each month on your student loan is 20% or more of your gross income

• You’re working in a position for AmeriCorps

• You’re a teacher that qualifies for teacher student loan forgiveness

• You’re a National Guard member but don’t qualify for deferment

Similar to general forbearance, mandatory forbearance is granted for up to nine month periods, and you can reapply after that time.

Another Option to Consider: Refinancing

Depending on your personal financial circumstances, another long-term solution could be student loan refinancing. This involves applying for a new loan with a private lender and using it to pay off your current student loans. Qualifying borrowers may be able to secure a lower interest rate or the option to lengthen their loan’s term and reduce monthly payments. Note that lengthening the repayment period may lower monthly payments, but will generally result in paying more interest over the life of the loan.

Refinancing could be a good option for borrowers with strong credit and a solid income, among other factors. Unlike an income-driven repayment plan, your monthly payment wouldn’t change based on your income.

Either way, you’ll want to keep in mind that refinancing federal student loans with a private lender means you no longer have access to any federal borrower protections or payment plans. So, if you are taking advantage of things like income-driven payment plans or deferment, you likely don’t want to refinance. But for other borrowers, student loan refinancing might be a useful solution.

If you have more than one student loan, refinancing could also simplify your repayment process.

Recommended: A Guide to Refinancing Student Loans

The Takeaway

If you take out a federal student loan and at some point need to pause or reduce your payments, you may be able to qualify for deferment, forbearance, or an income-driven repayment plan. Each option has its pros and cons.

If you’re considering a private student loan (or refinancing your federal loans), keep in mind that private loans don’t come with government-sponsored protections like forbearance and deferment. However, private lenders may offer hardship and deferment programs of their own.

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

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

FAQ

How long can you defer student loans for?

Depending on the type of deferment you are enrolled in, federal loans can be deferred for up to three years. Private student loans may not offer an option to defer payments, and if they do, the limit will be set by the individual lender.

Why would you defer student loans?

Deferment can be helpful if you are facing a temporary financial hurdle because they allow you to pause or reduce your payments for a period of time.

Are there any reasons not to defer student loans?

Most loans will continue to accrue interest during periods of deferment. When the deferment is over, this accrued interest is then capitalized on the loan. This means it’s added to the existing value of the loan. Moving forward, interest is charged based on this new total. This can significantly impact the total amount of interest that a borrower has to pay over the life of a loan.

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.

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

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

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

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

SOISL-Q325-074

Aug

2025

The Ultimate Guide to Studying in College

By Julia Califano | Student Loans, student_loan | Comments Off

Table of Contents

Get Enough Sleep
Feed Your Brain
Get a Study Partner
Find a Quiet Space
Put on Some Focus Music
Don’t Wait Until the Last Minute
Get Organized
Shut Out Distractions
Put Together a Study Schedule
Take Breaks
Here’s to Hitting the Books

One way to help ensure you thrive in college is a no-brainer: to study. You may find, however, that your high school study habits aren’t highly effective in college, where the work load tends to be higher, teachers are less personally involved, classes are larger, and exams are tougher. On top of that, college life is full of distractions.

That doesn’t mean you won’t succeed in your college classes. You may, however, need to kick it up a notch. What follows are some of the best study strategies for college classes.

Key Points

• College requires effective study strategies due to increased workload and distractions compared to high school, emphasizing the need for improved habits.

• Prioritizing adequate sleep and nutritious food significantly enhances focus and overall health, which are crucial for academic success.

• Establishing a study schedule, organizing materials, and finding quiet study spaces help create a conducive learning environment for optimal concentration.

• Collaborating with a study partner can increase accountability and motivation, while taking regular breaks prevents burnout and maintains productivity.

• Implementing techniques to minimize distractions, such as logging out of social media and using focus music, can greatly improve study sessions.

Get Enough Sleep

Sleep is critical to a well-functioning brain and body. If you get enough sleep, you will generally find it easier to focus and feel healthier overall. Young people ages 18 to 25 need seven to nine hours of sleep a night, according to the National Sleep Foundation.

If you’re having trouble sleeping, try to go to bed and wake up around the same time every day, make sure your bed is comfortable, and avoid drinking caffeine or alcohol, especially in the evening. Also helpful: Doing some yoga or meditating before bed, using ear plugs if your dorm is noisy, and using room-darkening shades on your windows.

Feed Your Brain

Some foods, like candy and greasy dining hall pizza and french fries can make you feel good in the moment but may cause you to crash later or give you a stomachache. Instead, you’ll want to aim to eat nutritious foods that will power your brain.

Some of the best brain foods include fatty fish that contain omega 3s, dark chocolate, blueberries, pumpkin seeds, nuts, eggs, oranges, and green tea.

Drinking water and tea instead of soda and sugary fruit juices is also a good idea.

Get a Study Partner

It can be a good plan to make friends with a good study partner who can hold you accountable as well as keep you focused.

If you have a tough time sitting down and focusing on your studies on your own, you may find that learning with a study partner will force you to stick to a study schedule and may also help ensure that the information actually sticks.

Find a Quiet Space

Many people are unable to concentrate when they’re in a noisy environment. Unfortunately, a college dorm room can be loud because it’s where social gatherings often take place. Plus, there are so many students crammed into one area, nobody has any personal space. That’s why it can be a good idea to hunt for a quiet study space.

Quiet spaces on campus could include a library, where students might be able to reserve a private room; a secluded place outside; the campus cafe when it’s not busy; or an empty classroom.

If you have a car, you can drive off campus to a park, uncrowded eatery, or public library.

Put on Some Focus Music

Listening to music can be one of the best study tips for some college students. As long as the music isn’t distracting, you might find it helpful to pop in your earbuds when you study. Generally, the best types of music for focusing on work include nature sounds, songs without lyrics, songs played at medium volume, and songs with a specific tempo.

You might also like listening to your favorite upbeat bands that make you excited, as it may help you study and get your work done faster.

Don’t Wait Until the Last Minute

Practitioners of the fine art of procrastination often pay a price.

Procrastination can lead to bad grades, higher levels of stress, and negative feelings. Procrastinators are likely to not have a great study session because they are rushed.

To stop postponing the inevitable, you might want to put reminders on your phone that tell you when to study and when your assignments are due. A study partner can also help put feet to the fire.

If you procrastinate over and over again, perhaps it’s a sign that you are not interested in your studies and may want to pursue a different major.

Get Organized

If your papers are scattered everywhere, you won’t know where your important books or files are, or you may forget when your tests are scheduled.

If you could benefit from better organization, you might want to set up a Google Calendar and put every test, class, and appointment in there. You can also set reminders that will show up on your computer or phone when you need to study.

You could also clean your room at least once a week, filing papers in folders, putting books in a neat pile, and storing backpacks, clothes, and other items in closets. You might also want to purchase storage systems from places like IKEA and the Container Store so you have a place for everything.

In addition, it can help to create ongoing to-do lists and check off each task as you complete it. The night before you go to class or have to take a test, you can organize your backpack and put everything you need into it instead of rushing the morning of the test.

Shut Out Distractions

The noise in a dorm room or on a college campus can be distracting. Social media, text messages, and emails also take focus away from studying.

To buckle down, you may want to log out of social media and email and put your phone on do not disturb, only allowing emergency contacts to reach you.

If you are addicted to your phone or social media, you might want to install an app that turns off distractions and tracks how much time you’re spending on their phone.

Put Together a Study Schedule

Studying isn’t just going to happen. That’s why one of the most important study tips is to put together a study schedule that is realistic, while still having time to get involved on campus and have a social life.

For instance, if you like to go to bed at 2am, you can’t plan to study at 6am the day you have a test because you’ll be exhausted. Instead, you can plan to study the evening before the test.

You may also want to schedule a time when you can find a quiet place to study or when your dorm room is going to be less noisy. You will likely not be able to concentrate on a Friday or Saturday night in your dorm because of surrounding shenanigans. You could block out time on a calendar when the dorm is quieter and make sure you stick to it.

Take Breaks

Studying for hours without a break could lead to burnout. Instead, pause to walk around, get some fresh air, or grab a glass of water or a healthy snack.

Some research suggests that the most productive people focus on intense work for 52 minutes and then take a 17-minute break.

You don’t have to follow the rule of 52 and 17 to a T; instead, you might get up every 20 minutes or so, or at least once an hour, whenever you start to feel you’re losing focus or your body is cramping.

If you are studying by looking at a computer screen, you can shut off the screen and phone and look at something else during that break. Looking at a screen for too long can hurt your eyes and have a negative effect on focus.

Here’s to Hitting the Books

You might have to try different techniques, and most of them will require practice, but once you hit a groove, you should be well on your way to getting good grades — a stepping stone to a fulfilling career.

You may also find it easier to focus on your studies if you’re not worried about paying all of the costs associated with college. There are a variety of ways to cover your college tuition and expenses, including financial aid.

Federal student loans are one option, as are private student loans. Some students will find that a combination of these two funding sources helps them afford their educatiol costs.

Recommended: Private vs Federal Student Loans

The Takeaway

Studying is a key part of college, and good habits can help you thrive. These include healthy sleep and eating habits, having a study buddy, knowing when and where to study, and other strategies. Another key part of college is financing your education, which can involve scholarships, grants, and student loans, whether federal, private, or both.

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

FAQ

What is the most effective way to study in college?

One of the most effective study strategies can be to have a study partner to help you stay accountable and hit your marks with studying. Other tactics include finding quiet times and places to study, getting enough sleep and healthy nutrition, and avoiding procrastination.

How many hours a day should you study in college?

In general, the amount of time a college student spends studying will vary greatly by student, the school they are attending, and the courses they are taking. One rule of thumb is that a student must study 2-3 hours weekly beyond class time for every credit hour. That would equal 24-36 hours weekly for a 12-credit hour course, which means about 5-6 hours daily, depending on whether you study every day or six days per week.

What is the hardest year in college?

Often, junior year is the most challenging year of college. This is because students typically face increasingly difficult coursework and start planning for post-grad life, which can involve applying for internships and researching graduate programs and career opportunities.

About the author

Julia Califano

Julia Califano is an award-winning journalist who covers banking, small business, personal loans, student loans, and other money issues for SoFi. She has over 20 years of experience writing about personal finance and lifestyle topics. Read full bio.

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

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

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

SOISL-Q325-092

Aug

2025

Should You Hire an MBA Application Consultant?

By Ashley Kilroy | Student Loans, student_loan | Comments Off

Table of Contents

What Is an MBA Application Consultant?
Benefits of Working with a MBA Consultants
How Much Do MBA Admission Consultants Cost?
Should You Consider Hiring an MBA Admission Consultant?
Selecting the Right MBA Admissions Consultant

Getting into a top tier MBA program can be competitive. The top 10 programs have an average acceptance rate of around 20%. But the elite of the elite accept even fewer applicants. The acceptance rate at Stanford Graduate School of Business, one of the most challenging schools to get into, is just 6.9%.

With such low acceptance rates, any boost to an application can be advantageous to an MBA (or “B School”) candidate. To elevate an MBA application, some candidates choose to seek the assistance of an MBA application consultant.

MBA application consultants, also known as MBA admissions consultants, can help candidates finetune their application with the hopes of improving their chances of acceptance. If you’re considering applying for a top MBA school, here’s helpful information about the value an MBA application consultant could bring to the admission process.

Key Points

• MBA consultants can help applicants finetune their admissions package, typically hired when applying to highly competitive programs.

• These admission consultants can help clients showcase their strengths and optimize their applications.

• Consultants can help applicants write authentic, engaging essays and edit essays to fit strict word limits.

• International and STEM applicants may benefit from essay guidance.

• Costs for consulting services vary widely, from $195 per hour to $12,000 for a 3-school package.

What Is an MBA Application Consultant?

Since getting into an elite school can be a monumental task, some candidates may need additional support. An MBA admissions consultant, also known as a B School consultant, can offer candidates an advantage in the demanding world of the MBA admissions process. These consultants tend to be highly skilled communicators and have extensive knowledge about the MBA admissions process.

MBA application consultants provide services including program selection, essay brainstorming, essay review, resume review, interview preparation, and more.

Candidates can choose to work with MBA application consultants on an hourly basis or select a package approach to navigate the entire application process.

💡 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.

Benefits of Working with a MBA Consultants

There are certain circumstances where an MBA applicant may benefit from working with an application consultant. Most of the benefits surround highlighting the work that schools want to see and bringing the applicant’s personality to life.

A good MBA admissions consultant will go above and beyond suggesting and reviewing an application — they will help the applicant understand what they bring to the table.

In addition to helping an applicant brainstorm essay content, here are a few other ways they can add value to the application process.

Expressing Authenticity and Vulnerability in Application

When writing a strong essay, general recommendations suggest expressing authenticity through humor or vulnerability to let your personality shine through. Colleges, even business schools, often look at an applicant’s essay to get a deeper sense of who they are, what they value most, and any actions they’ve taken towards their beliefs.

While it’s unlikely you can get into an MBA program based on a stand-out essay alone, a strong piece of writing will be another valuable piece of your total application.

If writing is not your strong suit, an MBA admission advisor could help you overcome this hurdle and help schools see your personality.

Editing Short-Answer Essays

Currently, the MBA application trend is gearing toward more of a short essay format with restrictive word limits. For example, Columbia Business School has a 500-word limit on essays.

To help applicants meet these essay requirements, MBA admissions consultants can effectively edit down their writings. Many MBA candidates do not have college experience or training in advanced expository writing or editing. With this in mind, they may need the help of an admission consultant with advanced editing skills to meet the restrictive word count.

Addressing Communication Challenges

Those who haven’t taken a lot of coursework in writing, such as STEM (science, technical, engineering, or mathematics) students, may benefit from essay assistance. While STEM professionals may have higher GMAT scores, they may struggle to write a strong essay.

These challenges might be intensified for international applicants who have low English competency. Working with a consultant can help this group of candidates steer clear of any essay defects that could potentially disqualify them.

Recommended: Tips on How to Pay for MBA School

How Much Do MBA Admission Consultants Cost?

Cost is a significant consideration when deciding whether or not to hire an MBA admission advisor. One-on-one MBA application coaching can run around $195 per hour. For a three-school full package deal, you might pay $12,000 or more.

Although these costs can seem astronomical, you may want to consider the potential pay-off: The average starting salary for MBA graduates was $120,000 in 2024 (that’s significantly higher than the average starting salary for people who only have a bachelor’s degree).

Should You Consider Hiring an MBA Admission Consultant?

Here are several examples of groups of applicants that might benefit the most from an application consultant’s guidance.

• For applicants who want to apply at one of the most popular business schools, like the University of Pennsylvania’s Wharton School or the Harvard Business School, a consultant’s help may be valuable. Even if an applicant has a 3.9 GPA, a 750 GMAT score, and five years of experience working at one of the schools’ prestigious employers, such as McKinsey, competition can still be intense.

• Candidates who want to enroll at one of the top MBA programs such as Carnegie Mellon University’s Tepper School of Business or the Kelley School of Business at Indiana University, the aid of a consultant is useful.

• Candidates that have communication challenges but want to apply to a top 25 school, may need the assistance of a consultant. A consultant can help with their essay and interview performance.

For MBA candidates who only need useful resources and information to put together a concrete application for a top 50 school, a consultant might not be worth the cost. Some candidates might do just as well on their own or using an online application consulting platform (such as ApplicantLab ), which can cost considerably less.

On the other hand, candidates who want guidance, support, and help with their skills set may get value working with an MBA admissions consultant.

Selecting the Right MBA Admissions Consultant

Before comparing different MBA application consultants, it’s a good idea to first develop an idea of your needs and likelihood of acceptance. Maybe you need to focus on strategy and essay writing. In this case, you might want to make those areas the top priority when searching for a consultant.

When considering consultants, it’s important to have a clear understanding of the services they offer. For example, if a professional offers to write an essay for you, you may want to steer clear, since this isn’t an offering a consultant should provide. If the consultant is a member of an association, such as the Association of International Graduate Admissions Consultants (AIGAC), it shows that the consultant must uphold a professional standard.

It can also be wise to ask friends, family, and colleagues for referrals when beginning a search. They may have some experience working with an MBA admissions advisor or relevant firms.

As you contemplate getting your MBA, it’s also wise to delve into how to finance your education, including fellowship awards, which are similar to scholarships, since this is money that doesn’t need to be repaid. Other options are student loans, such as MBA student loans.

The Takeaway

If you are pursuing admission to an MBA program, an MBA application consultant can help you optimize your submission materials during the process. Depending on your particular situation, this may or may not be an effective path to follow. Regardless of whether you decide to work with an MBA admission consultant or not, you may need some help paying for your business education expenses. MBA funding options include federal loans, and private MBA student loans.

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

FAQ

Are MBA consultants worth it?

Deciding whether an MBA consultant is worth it is a highly personal decision. It can depend upon such factors as how prepared an applicant is, how competitive the program they are applying to is, how comfortable they are expressing themselves on an application, and whether they can afford the expense required to work with a consultant.

How much do MBA admissions consultants cost?

There is a wide range of prices for MBA admissions consulting. Currently, some figures say that the average cost is around $12,000 for a 3-school package. This is a considerable cost, but for students looking at financing a graduate degree and deriving a well-paying job from it, the amount may be worthwhile.

How much does an MBA application cost?

Prices for applying to an MBA program vary widely. Currently, the cost can be anywhere from about $30 to about $300 per application. There may be the opportunity to have fees waived for qualifying students.

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.

SOISL-Q325-093