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If you’ve taken out a Parent PLUS loan to help your child through college, you may be wondering if it’s possible to transfer the loan into your child’s name now that they have an income. While there are no federal loan programs that allow for this, there are other options that allow your child to take over the debt.

How to Transfer a Parent PLUS Loan to a Student

In order to transfer a Parent PLUS loan to a child or student, the student can apply for student loan refinancing through a private lender. With a student loan refinance, the child takes out a refinanced student loan and uses it to pay off the Parent PLUS loan. The student is then responsible for making the monthly payments and paying off the loan.

To get a student loan refinance and use the funds to pay off a Parent PLUS loan, simply have your child fill out a student loan refinancing application. Make sure to include the Parent PLUS loan information in the application.
If approved, the student can pay off the Parent PLUS loan with their new loan and begin making payments on the new loan.

Advantages of Refinancing a Parent PLUS Loan

The main advantage of refinancing a Parent PLUS loan is to get the loan out of the parent’s name and into the student’s. However, there are other potential advantages to refinancing student loans, including:

•   Lowering your interest rate

•   Reducing your monthly payments

•   Paying off your loan quicker

•   Allowing the student to build a credit history

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

Disadvantages of Refinancing a Parent PLUS Loan

While it may be beneficial to get the loan out of the parent’s name and into the student’s, there are some disadvantages that should be considered, such as:

•   Losing federal student loan benefits, including income-driven repayment, deferment options, and Public Service Loan Forgiveness

•   Possibly getting a higher interest rate, especially if the student has poor credit

•   The student is now responsible for the monthly payment, which might become a hardship if their income is low

If you do choose to refinance your Parent PLUS loan by means of a student loan refinance, you should note that this process is not reversible. Once your child signs on the dotted line and pays off the Parent PLUS loan, the debt is now theirs.

Parent PLUS Loan Overview

The Department of Education provides Parent PLUS loans that can be taken out by a parent to fund their child’s education. Before applying, the student and parent must fill out the Free Application for Federal Student Aid (FAFSA®). Then the parent can apply directly for a Parent PLUS loan, also known as a Direct PLUS Loan.

The purpose of a Parent PLUS loan is to fund the education of the borrower’s child. The loan is made in the parent’s name, and the parent is ultimately responsible for repaying the loan. Parent PLUS loans come with higher interest rates and origination fees than federal student loans made to students. Further, these loans are not subsidized, which means interest accrues on the principal balance from day one of fund disbursement.

Parents are eligible to take out a maximum of the cost of attendance for their child’s school, minus any financial aid the student is receiving. Payments are due immediately from the time the loan is disbursed, unless you request a deferment to delay payment. You can also opt to make interest-only payments on the loan until your child has graduated.

💡 Quick Tip: Federal parent PLUS loans might be a good candidate for refinancing to a lower rate.

Pros and Cons of Parent PLUS Loans

Parent PLUS loans allow you to help your child attend college without their accruing debt.

Pros of Parent PLUS loans include:

You can pay for college in its entirety. Parent PLUS loans can cover the full cost of attendance, including tuition, books, room and board, and other fees. Any money left over after expenses is paid to you, unless you request the funds be given directly to your child.

Multiple repayment plans available. As a parent borrower, you can choose from three types of repayment plans: standard, graduated, or extended. With all three, interest will start accruing immediately.

Interest rates are fixed. Interest rates on Parent PLUS loans are fixed for the life of the loan. This allows you to plan your budget and monthly expenses around this additional debt.

They are relatively easy to get. To qualify for a Parent PLUS loan, you must be the biological or adoptive parent of the child, meet the general requirements for receiving financial aid, and not have an adverse credit history. If you do have an adverse credit history, you may still be able to qualify by applying with an endorser or proving that you have extenuating circumstances, as well as undergoing credit counseling. Your debt-to-income ratio and credit score are not factored into approval.

Cons of Parent PLUS loans include:

Large borrowing amounts. Because there isn’t a limit on the amount that can be borrowed as long as it doesn’t exceed college attendance costs, it can be easy to take on significant amounts of debt.

Interest accrues immediately. You may be able to defer payments until after your child has graduated, but interest starts accruing from the moment you take out the loan. Subsidized loans, which are available to students with financial need, do not accrue interest until the first loan payment is due.

Can a Child Make the Parent PLUS Loan Payments?

Yes, your child can make the monthly payments on your Parent PLUS loan. If you want to avoid having your child apply for student loan refinance, you can simply have them make the Parent PLUS loan payment each month. However, it’s important to note that the loan will still be in your name. If your child misses a payment, it will affect your credit score, not theirs. Your child also will not be building their own credit history since the debt is not in their name.

Parent PLUS Loan Refinancing

As a parent, you may also be interested in refinancing your Parent PLUS loan. Refinancing results in the Parent PLUS loan being transferred to another lender. By transferring your loan, you may be able to qualify for a lower interest rate. Securing a lower interest rate allows you to pay less interest over the life of the loan — and if you also shorten your loan term, you can pay off the loan more quickly.

When you refinance Parent PLUS loans, you do lose borrower protections provided by the federal government. These include income-driven repayment plans, forbearance, deferment, and federal loan forgiveness programs. If you are currently taking advantage of one of these opportunities, it may not be in your best interest to refinance.

At SoFi, you can refinance federal Parent PLUS loans and qualified private student loans into one new loan with one convenient payment. You can do this on your own and keep the Parent PLUS loan in your name, or you can have your child apply for student loan refinancing and use that money to pay off your Parent PLUS loan. With SoFi, there are no application fees, no origination fees, and no prepayment fees.

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

What if I can’t pay my Parent PLUS loans?

If you are struggling to pay your Parent PLUS loan, we recommend getting in touch with your lender and asking for a deferment or forbearance to temporarily suspend your payments. Keep in mind, though, that interest will continue to accrue on your loan even if payments are postponed. You could also consider switching the repayment plan you are enrolled in to an extended repayment plan, or refinancing your loan in order to get a lower interest rate. If you’re able to consolidate your Parent PLUS loan with a federal Direct Consolidation loan, you can also make it eligible for the Income-Contingent Repayment plan. This plan adjusts your monthly payment to 20% of your discretionary income while extending your repayment terms to 25 years.

Can you refinance a Parent PLUS loan?

Yes, it is possible to refinance a Parent PLUS loan through a private lender. Doing so will make the loan ineligible for any federal borrower protections, but it might allow you to secure a more competitive interest rate or have the refinanced loan taken out in your child’s name instead of your own.

Is there loan forgiveness for parents PLUS loans?

It is possible to pursue Public Service Loan Forgiveness (PSLF) with a Parent PLUS loan. To do so, the loan will first need to be consolidated into a Direct Consolidation loan and then enrolled in an income-driven repayment plan. Then, you’ll have to meet the requirements for PSLF, including 120 qualifying payments while working for an eligible employer (such as a qualifying not-for-profit or government organization). Note that eligibility for PSLF depends on your job as the parent borrower, not your child’s job.

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

SoFi Student Loan Refinance
SoFi Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org). SoFi Student Loan Refinance Loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Public Service Loan Forgiveness, Income-Based Repayment, Income-Contingent Repayment, PAYE or SAVE. Additional terms and conditions apply. Lowest rates reserved for the most creditworthy borrowers. For additional product-specific legal and licensing information, see SoFi.com/legal.

A no-interest, or 0%, credit card means you won’t be charged any interest on your purchases for a certain period of time. In some cases, these cards also offer 0% interest on balance transfers for a set period of time.

But these cards also have some potential downsides. For one, the 0% annual percentage rate (APR) is only temporary. Once the promotional period ends, a potentially high APR will start accruing on any remaining balance you have on the card. In addition, you typically have to pay a fee to transfer your balance, which might negate any savings on interest.

Here are key things to know before signing up for a no-interest credit card.

Pros of No-Interest Credit Cards

Using a 0% APR credit card can create some breathing room within your budget. Here’s a look at some of the key perks, and how to make the most of them.

No Interest During the Promotional Period

Of course, one of the biggest advantages of a zero-interest card is that you’ll pay just that — zero interest — for a certain period of time, which may be anywhere from six to 18 months. If you use the card to make a large purchase and are able to pay it off in full before the end of the promotional period, it can be the equivalent of getting an interest-free loan.

Opportunity to Pay Down Debt Faster

In some cases, you also get the 0% APR on any balance you transfer over from another credit card. This can make a no-interest card a good option for consolidating and paying off high-interest credit card debt. If you have a plan in place to pay off the debt within the promotional period, a balance transfer could improve your financial situation.


💡 Quick Tip: A low-interest personal loan can consolidate your debts, lower your monthly payments, and help you get out of debt sooner.

Perks and Bonus Rewards

Some credit cards with 0% APR introductory rates on purchases and/or balance transfers also have additional rewards bonus programs. This might include a welcome offer and/or cash back or rewards points based on each dollar you spend. These extras can lead to even more savings.

For example, let’s say you want to purchase a new chair that costs $500. After some research, you find a credit card offering an introductory 0% APR for 15 months and a $200 rewards bonus after you spend $500 on purchases within the first three months of opening the account. You decide this will work for your financial situation, so you apply and are approved. After buying the chair with the new credit card, you pay the balance in full before the promotional period ends.

With this example, not only would you have paid nothing in interest, you would also have netted $200 in rewards cash.

Cons of No-Interest Credit Cards

Some might look at no-interest credit cards as too good to be true. That’s not necessarily the case, but there can be some drawbacks to them. Here are some potential pitfalls to be aware of.

Temporary Promotional Rate

Alas, that 0% APR doesn’t last forever. If you use the card for a large purchase but are unable to fully pay it off before the end of the promotional period, any balance will start accruing the card’s regular APR.

At that point, the card may not have any advantages over any other card. In fact, the card could have an APR that is higher than average. When comparing 0% rate cards, it’s important to look at what the rate will be when the promo period ends and exactly when it will kick in.

Also keep in mind that you could lose the 0% intro APR before the end of the promo period if you are late with a payment. Here again, it pays to read the fine print.

Fees for Balance Transfers

Some — but not all — no-interest credit cards also feature a 0% APR on balance transfers. However, you typically still have to pay a balance transfer fee, often around 3% to 5% of the transferred balance. If you’re transferring a large balance from another card, the balance transfer fee could actually be significant. You’ll want to do the math before making the switch to be sure it will work in your favor.

Interest May Apply Retroactively

Similar to a no-interest credit card, a deferred-interest credit offer is one that’s commonly used by individual retail stores. If you’ve been asked if you’d like to apply for a store’s credit card when you’re making a purchase, it might be one that comes with a deferred interest promotion.

Like no-interest credit cards, a deferred-interest card doesn’t charge interest as long as the balance is paid in full within a certain time period. The biggest difference between the two: If the balance is not paid in full before the promotional period ends, interest will be applied to the entire purchase — not just the remaining balance. And APRs on deferred-interest cards can be even higher than APRs charged by regular credit cards.

Can Credit Scores Be Affected by No-Interest Credit Cards?

Applying for a new credit card results in a hard inquiry on your credit report, which can have a minor, temporary negative impact on your credit scores. This is generally nothing to worry about.

However, repeatedly opening new credit cards and transferring balances to them can cause a lasting negative impact on your credit. That’s because too many hard inquiries too close together can lead lenders to believe you’re applying for more credit than you can pay back.

In some cases, a balance transfer can positively impact your credit by helping you pay off your debts faster than you would otherwise be able to. This lowers your credit utilization ratio, or how much of your available credit you are currently using, which is a key component of your credit score.


💡 Quick Tip: Swap high-interest debt for a lower-interest loan, and save money on your monthly payments. Find out why SoFi credit card consolidation loans are so popular.

The Takeaway

A 0% intro APR card can help you avoid paying interest on your purchases for a set period of time. It can also allow you to consolidate and pay down credit card debt faster.

Keep in mind, however, that cards with no interest often come with a balance transfer fee. Also be aware that your interest rate will likely be much higher when the intro APR offer ends if you haven’t paid off your balance by then.

No-interest credit cards aren’t the only option for paying off debt. You may also be able to pay off high-interest credit cards with a personal loan. A personal loan calculator can give you an idea of what your potential savings might be.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. Checking your rate takes just a minute.

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

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

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A Master of Business Administration (MBA) is a highly valued degree in the business world and can put you on a path to a successful, and high-paying, career. However, these degrees don’t come cheap. In fact, the average cost of a top MBA in the U.S. in 2022 was a whopping $225,605, including tuition, fees, supplies and living costs.

Is it worth it? The answer depends on myriad factors, including what B-school you go to, your financial situation, what financial aid you qualify for, and your future career goals. Read on for a closer look at the real costs and benefits of getting an MBA.

MBA School Costs

How much an MBA costs will depend on a variety of factors, such as school ranking, tuition structure, enrollment status, cost of living, and fees. MBA costs are also influenced by a student’s ability to qualify for financial aid, scholarships, and employer assistance.

It’s helpful to consider these factors and your chance of acceptance when evaluating MBA programs.


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

MBA School Requirements

To be accepted into an MBA program, students typically need to submit proof of a bachelor’s degree from an accredited institution, a personal statement, letters of recommendation, and a resume. Some schools require the GMAT or GRE and/or set GPA minimums for admission.

It’s worth noting that the acceptance rate at the top 10 business schools in 2022 averaged 22.2%. Working with an MBA application consultant could help fine-tune your writing and communication style to improve your candidacy for competitive programs.

Once enrolled, MBA students generally complete between 30 to 60 credits over two years of full-time study. Some accelerated MBA programs may be completed in as little as one year.

Private and Public MBA Tuition

Excluding scholarships and financial aid, public in-state tuition can be a student’s more cost-effective option for higher education. This rings true for prospective MBA students in certain states. For instance, the total MBA program cost for 2023-24 at the University of Washington’s Foster School of Business is $80,016 for in-state students, compared to $115,692 for out-of-state students.

However, the difference between in-state tuition and out-of-state or private tuition can be marginal at some high ranking public MBA programs. For example, 2023-24 tuition at the University of Michigan is $70,392 for in-state students vs. $75,392 for non-residents.

Total Cost of an MBA

The total cost of an MBA degree means more than just tuition expenses. Many MBA students will have to pay for textbooks, transportation, extracurricular activities, and other living expenses as part of their education. This more comprehensive expense list is used to calculate the cost of attendance.

A student’s enrollment status also impacts MBA cost. Studying part-time can allow students to pay per credit hour and continue working, though dropping below full-time enrollment status may impact eligibility for some scholarships.

To understand the true cost of an MBA, you also need to factor in the opportunity cost of not working, and not earning a salary, for the (typically) two years you are attending school full-time.

Recommended: Is Getting an MBA Worth It?

How Much Does an Online MBA Cost?

Relocating or commuting may not be feasible for all prospective MBA students. Choosing an online MBA program can offer more flexibility and a lower overall cost for some students.

Keep in mind that the cost of online MBA programs can vary greatly. Top ranking online MBA programs — UNC and Carnegie Mellon — cost over $125,000 and $140,000 in total tuition and fees, respectively. There are more affordable options, however. For example, an online MBA at Auburn University’s Harbert College of Business runs $35,100.

Recommended: The 14 Best Jobs for MBA Graduates

Cost-Benefit Analysis of Getting an MBA

At the lower end, tuition costs for business schools may come in around $52,000 a year (for an in-state student at a public university); at the higher end, it’s around $80,000 a year. Top schools like Yale and Duke University can leave students with over $104,000 in debt.

Even considering the increase in salary for those who went to prestigious programs — Yale graduates make a median base salary of $160,110 a year, plus a $30,000 signing bonus — those upfront costs of tuition can be intimidating. And let’s not forget, there are still costs that don’t factor into tuition.

Clubs, for instance, might be a necessary networking tool, and they come with a price tag that’s hard to factor in. And how about a trip to study in India? Traveling abroad pushes your costs up even further.

When weighing costs and benefits, you’ll want to also consider that many MBA programs offer scholarships, based both on merit and need. NYU reports awarding merit-based scholarships to up to 25% of students, while around 50% of MBA students at Stanford receive fellowship funds averaging $44,000 per year.

Keep scholarship availability in mind when researching schools, since aid varies widely. Stanford, for instance, has one of the highest costs of attendance (around $126,465 a year) but students can graduate with far less debt than most top tier MBA programs due to their need-based financial aid.

Ways to Pay for Your MBA

Assuming you don’t have six figures in savings you can tap to pay for business school, you may need to get creative to cover the costs. Beyond scholarships and fellowships, mentioned above, here are some other options to help pay for your MBA.

Employer Sponsorship

Sponsorship through a company is possible but relatively rare, and it can come with strings attached. For instance, you may be contractually obligated to stay with the company sponsoring you for a certain number of years, which may prove limiting if you don’t see a future with that company or in that field.

Many students choose to work summers, or even during the school year. However, some schools advise students not to take on part-time work due to the workload and the importance of extracurricular activities.

Student Loans

Depending on your financial situation, chances are it might be necessary to consider applying for MBA loans, whether private or federal, to pay for your MBA.

The interest rates for Federal Direct Plus Loans for graduate students disbursed between July 1, 2023, and July 1, 2024 is fixed at 8.05%.

Interest rates on private student loans may be fixed or variable and will vary depending on multiple factors, including the applicant’s credit history. These loans, which are available through banks, credit unions, and online lenders, are not need-based and generally require a credit check. Borrowers (or cosigners) with excellent credit tend to qualify for the lowest rates.

Keep in mind that private student loans may not offer the same borrower protections that federal student loans offer, such as Public Service Loan Forgiveness or income-driven repayment plans.


💡 Quick Tip: Master’s degree or graduate certificate? Private or federal student loans can smooth the path to either goal.

The Takeaway

In the business world, people with MBAs generally earn much higher salaries than those in comparable roles who don’t have an MBA. The median starting salary offered to 2022 MBA grads was $115,000. However, graduates from top business schools were offered significantly more — an average base salary and signing bonus of $193,159.

When thinking about whether the cost of an MBA is worth it, you’ll want to tally up all the expenses involved in attending a business school program, tap any sources of financial aid you are eligible for, plus do some research into how much graduates from your selected school tend to earn in the business world.

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

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

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

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

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

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Attending graduate school can help some students achieve their career goals, and may even be required in some fields. While applying to grad school is similar to applying to college, three are some key differences to keep in mind. Graduation school programs also tend to be more competitive than undergraduate degree programs.

If you’re thinking about going to grad school, read on. What follows are some simple strategies that can help you navigate the graduate school application process, including how to find the right program, create an application timeline, write an effective statement of purpose and personal statement, and make a plan for covering the cost of tuition and expenses.

4 Tips and Strategies to Prepare for the Grad School Application Process

Below are some simple steps that can make it easier to find and apply to the right graduate school program.

Choosing the Right Graduate School

It can be a good idea to apply to four to six graduate schools, and include both safety and reach schools.

If you’re still in the early stages of exploring schools and mulling over which graduate program to pursue, now’s the time to weigh your interests, skills, talents, and career goals to find a few options that may make sense to apply to.

Here are some questions to ask as you search for the right grad school:

•  Which degree path do you want to pursue?

•  Does your chosen career encourage a Ph.D. or a Master’s degree?

•  Do the schools you’re considering offer that program?

•  What is the cost of tuition?

•  Are scholarships available, either full-ride or partial?

•  Is the degree program accredited?

•  Does this school have excellent professors?

•  Will this degree facilitate your entry into the career of your choice?

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

Grad School Application Timeline

There’s plenty of prep work that must happen months before you start applying to graduate school. One way to alleviate some stress and make sure all of the necessary application requirements are met is to start early. Here’s a timeline to keep in mind.

Two Years Before Applying: Research Schools and Programs

Narrow down the programs of interest and your career goals about two years before you plan to apply.

One Year Before Applying

•  Prepare for any standardized tests required for admission. Some programs may require students to submit GRE scores, while others may require the GMAT. Law students will generally need to take the LSAT and future med school attendees can anticipate taking the MCAT.

•  Start gathering application materials. This could include things like college transcripts, letters of recommendation, and prepping for any personal statements that may be required (more tips on that to follow).

Year of Grad School

Generally, graduate school applications open up about nine months before a student would be expected to start classes. Some programs may accept applications on a rolling basis. It’s generally wise to apply as soon as all of your application materials are ready to go.

Refining Your Graduate School Statement of Purpose and Personal Statement

The statement of purpose for graduate school (sometimes called a letter of intent or a research statement) is where you detail your future plans and how the school you’re applying to can help you achieve those goals.

Students who are applying to multiple schools may need to tweak their statement of purpose slightly to meet different application requirements, but in general, there are a few common threads that are included in a statement of purpose. These include:

•  What do you want to study at graduate school?

•  Why do you want to study it?

•  What experience do you have in that field? How would you add value to the existing program?

•  What do you plan to do with your degree once you have it?

To craft a successful graduate school statement, you’ll want to create an outline and make sure you highlight your relevant experience and motivation for applying to this specific graduate school and program. You want your statement to stand out and target the school you are applying to; avoid writing the same statement of purpose for each school.

A personal statement, meanwhile, lets the admissions committees see you as a person, including your goals and passions and what you are hoping to get out of the program. Personal statements are generally more biographical in nature than a statement of purpose. It may highlight things like your passion for a particular field or help you demonstrate characteristics that will help you excel in grad school.

Recommended: Graduate Student Loan Limits: How Much Can You Get?

Options for Paying for Graduate School

There are a variety of ways to pay for graduate school.

Federal Aid

As a first step, fill out the Free Application for Federal Student Aid (FAFSA), which is used to determine what federal financial assistance students may qualify for. Often, people applying for graduate school are considered independent students on the FAFSA. Independent students are not required to include their parents’ financial information on their FAFSA application.

Submitting the FAFSA allows students to apply for all federal aid, including:

•  Federal student loans

•  Grants

•  Scholarships

•  Work-study program

Scholarships and Grants from Your University

Take a look at the aid options available specific to the school you will be attending (or the schools you are applying to). It may be possible to apply for additional scholarships, grants, and fellowships depending on the program.

Universities sometimes use the FAFSA to make financial aid determinations, but some have their own application process. Again, check the graduate school website to find out relevant deadlines and procedures.

Recommended: How to Become a Graduate Assistant

Possibilities Beyond Federal or University Aid

Other possibilities include employer tuition reimbursement plans, private scholarships, and private graduate student loans. Private student loans usually don’t have the borrower protections offered by federal student loans (things like deferment or forbearance, income-driven repayment plans, and Public Service Loan Forgiveness), so you may want to consider them only after you’ve exhausted other forms of aid.

After graduating, some students may consider student loan refinancing. Qualifying borrowers can often secure a competitive interest rate or preferable terms. Refinancing federal student loans, however, will mean they no longer qualify for any federal borrower protections or programs.

💡 Quick Tip: Master’s degree or graduate certificate? Private or federal student loans can smooth the path to either goal.

The Takeaway

Applying to graduate school doesn’t have to be overwhelming. Start by defining your career goals and determine which programs you want to apply to. From there, review the application requirements and set an application timeline. The steps involved in applying to graduate school include taking any required standardized tests, getting letters of recommendation, and writing a statement of purpose. Also consider how you will pay for the cost of graduate school. Options include federal student loans, scholarships, grants, and private student loans.

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

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

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

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

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Your borrowing power refers to how much credit you can get based on your financial history, including your credit history and score. Having strong borrowing power is essential if you ever want to get a mortgage, car loan, personal loan, or any other type of financing. It can also help you qualify for loans and credit cards with more favorable rates and terms. What follows are 10 effective strategies to boost your borrowing power and increase your financial opportunities.

How to Boost Your Borrowing Power

Whether you’re interested in borrowing money to make a major purchase or using a personal loan to consolidate high interest debt, here are some simple ways to increase your borrowing capacity.

1. Check Your Credit Reports

Lenders determine how much they will lend you (and if they will lend to you at all) primarily based on your credit score and history. So a great first step is to get copies of your three credit reports, and read each one over carefully. This allows you to see where you stand, as well as check for any mistakes or inaccuracies (like payments marked late when you paid on time or someone else’s credit activity mixed with yours).

You can request free copies of your credit reports from three major credit bureaus — Equifax, Experian, and TransUnion — through AnnualCreditReport.com . If you find any errors, you’ll want to file a dispute with the appropriate credit agency.

2. Be a Responsible Borrower

To show creditors that you are a safe bet, you’ll want to make sure you pay all of your bills on time. Also try to keep your credit card balances low — this impacts your credit utilization ratio (the percent of available credit you are actually using), which has a significant impact on your credit score. To calculate your credit utilization, add up all of your revolving credit balances and credit limits, divide your total balance from your total limit, and multiply that number by 100 (to get a percentage). Ideally, you want to keep credit utilization below 30%.

3. Show Financial Stability

Stability and consistency in your financial and employment history can bolster your borrowing power. Lenders generally prefer borrowers who maintain a consistent residence and have a steady job and a reliable income source. This showcases your reliability as a borrower and boosts your chances of getting approved for loans with favorable terms.

4. Consider a Co-Borrower

If your individual borrowing power is limited, using a co-borrower (such as a spouse or a family member) can significantly enhance your chances of loan approval. A co-borrower is a joint applicant who shares ownership of the loan and responsibility for payments. (This is in contrast to a cosigner, who is only liable for the loan if the primary borrower fails to make payments.) Depending on the co-borrower’s income, they may be able to help you qualify for a higher loan amount, as well as better rates and terms.

5. Shop Around

Lenders vary in terms of how much they loan out, and to whom, so it’s a good idea to explore multiple lenders, including traditional banks, online lenders, and credit unions, and compare loan options before making a decision. Some lenders will allow you to “prequalify” for a loan, which can give you a good idea of how much of a loan they will offer you and at what rate. This only requires a soft credit check and won’t impact your credit score.

6. Pay Down Existing Debt

Reducing your existing debts can have a positive impact on your credit score. Not only that, it enhances your debt-to-income (DTI) ratio, a key factor considered by lenders. Your DTI ratio measures how much of your monthly gross income goes toward debt payments. This gives lenders insight into your ability to make another monthly payment and how large a payment you could handle.

To calculate your DTI, add together your fixed monthly payments (like mortgage/rent, auto loans, credit cards, and other personal loans), then divide that number by your gross monthly income (the amount you earn before taxes and other deductions). As a rule of thumb, lenders prefer a DTI ratio of 36% and under to approve you for a loan.

7. Increase Your Income

Another way to improve your DTI is to increase your income. Even if you have a large amount of debt, a high enough income can often offset it. As long as you have enough money coming in to handle your current debt and take on a new loan, a lender may not cap how much you are able to borrow.

If you have some time before you need to apply for a loan, you might look into ways to bump up your income, such as taking on a side hustle, asking for a raise, or looking for a new job that pays a higher salary. This could help you qualify for a larger loan amount.

8. Don’t Leave Any Income Out

As mentioned above, your income plays a key role in how much you can borrow. So you want to be sure to include all sources of income, including:

•   Monthly salary

•   Alimony

•   Child support

•   Side-gig income

•   Rental income

•   Investment property income

Including all of your income can lower your DTI ratio, increasing your borrowing power.

9. Consider a Longer Loan Term

Generally, the longer your loan term, the lower your monthly payment. A longer loan term — and lower monthly payment — may allow you to borrow more money with less impact on your DTI ratio, giving you eligibility for a larger loan. However, you’ll want to keep in mind that extending the term of a loan typically means paying more in interest over the life of the loan, increasing your total borrowing cost.

10. Consider Offering Collateral

You may be able to borrow more with a secured vs. an unsecured loan. With a secured loan, you put up something valuable (such as property, a vehicle, or a savings account) as collateral. The lender can take possession of this collateral if you fail to pay back loan funds as agreed. This lowers risk for the lender and, as a result, they may be willing to offer you a larger loan and/or a lower rate. If you’re already offering collateral, offering something of more value might boost the amount you’re approved for.

The Takeaway

If you’re thinking about applying for a loan for a large purchase, to consolidate other debts, start a business, or for any other purpose, it’s a good idea to look into ways to improve your borrowing power. You can start doing this right away by reviewing your credit reports, staying on top of your bills, paying down debt, using only a portion of your credit card limits and, if possible, boosting your income.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. Checking your rate takes just a minute.

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

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

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