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You’ve probably heard of “buyer’s remorse” — that sense of regret people experience after making a big purchase like a car. What you don’t hear so much about is borrower’s remorse, which is the dissatisfaction that car buyers sometimes feel when they realize the financing they got through the dealer is costing them more than they thought.

Even the toughest hagglers can miss things when they hit the dealership’s business office and begin negotiating loan terms. But that doesn’t mean you can’t pump the brakes, pull over, and try again. Refinancing a car loan certainly isn’t for everyone, but it could be a potential option as long as you understand how to refinance a car and what the implications are.

When Refinancing a Car Loan Might Make Sense

Refinancing a car loan is the process of getting a new loan that essentially replaces the existing loan. The process involves filing a new loan application, and lenders will generally evaluate potential borrowers based on factors like their credit score and history to determine their new loan terms and interest rate.

Generally, borrowers refinance to secure a better interest rate or more favorable terms. For example, a lower interest can help borrowers pay less in interest over the life of the loan. Sometimes, borrowers may extend their repayment term to secure lower monthly payments. This can make the loan payments more affordable on a monthly basis, though ultimately it makes the loan more expensive in the long run.

Now that you know you can refinance a car loan, let’s take a look at when doing so might make sense.

Recommended: Pros and Cons of Car Refinancing

You Think You Can Do Better Than That Dealer-Sourced Loan

When you finance your car through a dealer, it can feel as though you’re going through some mysterious selection process. After the fact, you may realize that you could’ve found a better deal on your loan. Or, you might just come to hate working with your current lender. In either case, it might make sense to look into refinancing your car loan.

Your Overall Financial Position Has Improved

Perhaps your car loan was offered to you at a time when your finances weren’t as solid as they are now. Maybe you’ve since gotten a better job, paid off some debts, or have been working on making consistent payments on debts. Borrowers who have seen improvement in their financial situation or credit score may want to consider refinancing.

In that scenario, you may be able to qualify for a personal loan at a better interest rate than your original auto loan. This could lead to savings on interest, potentially lowering your monthly payments. With SoFi’s personal loan calculator, you can compare what you’re currently paying to the estimated payments you might have with a new loan.

Interest Rates Have Improved Since You Borrowed the Original Loan

Another reason to consider refinancing a car loan is if interest rates have changed since you originally bought the car. Interest rates on auto loans are influenced by benchmark rates, like those set by the Federal Reserve.

If the Federal Reserve rate is low, interest rates for borrowers may also be lower. But as the Federal Reserve rate increases, the cost of borrowing money is also likely to increase.

An Alternative to Car Loan Refinancing: Personal Loans

In some situations, you might consider taking out a personal loan to pay off your auto loan rather than refinancing. In fact, debt consolidation is one of the common uses for personal loans. This option might make sense if you have an older car or a model or mileage that disqualifies you from refinancing, or if you’re underwater on your loan.

With an unsecured personal loan, which is the main type of personal loan you’ll come across, you can apply for the remaining amount of the car loan. Just keep in mind that lenders have minimum loan amounts — for example, SoFi’s minimum personal loan amount is $5,000 (and more in some states, due to legal requirements).

To decide if this option makes sense, you’ll want to see if you get your personal loan approved for a better interest rate than your auto loan. Because auto loans are secured (meaning they’re backed by collateral — in this case, your car) they tend to have lower rates than unsecured loans, though not always, depending on your financial specifics.

The Takeaway

Refinancing a car loan may make sense for borrowers who can secure a better interest rate or otherwise more preferable terms than they have on their existing car loan. If a borrower’s financial situation has improved, or if benchmark interest rates have fallen, they may consider looking into refinancing options.

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.

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.

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American students and their parents continue to take out student loans to pay for their undergraduate and graduate degrees.

People who are attending college are paying for tuition, room and board, books, and other necessities by taking out student loans or using credit cards.

Paying for college has become more expensive as tuition costs have continued to rise each year. For the 2022-2023 academic year, the tuition for full-time in-state students attending public colleges and universities was $10,950, according to the College Board. Tuition at private colleges and universities for the 2022-2023 academic year was $39,400.

The average federal student loan debt per person in 2023 is $37,338. Private student loan debt is almost $55,000 per borrower.

Americans now owe over $1.6 trillion in student loans. More than 43 million people, both graduates and their parents, have amassed a large amount of debt to pay for higher education.

Paying Down Student Debt Faster

Borrowers can maximize their financial resources and accelerate their repayment schedule in a few different ways.

Some options might include making extra payments by creating a budget, cutting expenses, getting a part-time gig, paying down other debt, and refinancing student loans.

Budgeting Effectively

Creating a budget can help borrowers see and understand all their expenses. A budget could make someone more aware of how much they are spending on eating out or entertainment each month.

Being able to refer to a budget can come in handy when you’re paying bills each month. There are plenty of options to choose from when it comes to budgeting and tracking spending.

After you have created a budget, examine your monthly expenses. One way to do this is to look at your expenses by different categories, such as bills, daily expenses such as parking, necessities such as groceries, and non-essential items such as entertainment.

Going through each category can help a consumer decide what is a priority. It can also help remind you of expenses you’re paying each month, but not using often such as a streaming movie or TV service.

Consider negotiating with the service provider, such as an internet or cable company, to see if there are less expensive options or if they are offering special deals currently.

Making Extra Payments

Making extra payments whenever borrowers can afford can help speed up the repayment process.

Neither federal or private student loans have prepayment penalties, which means borrowers won’t be penalized for making extra payments or paying their loan off ahead of schedule.

When making over payments, check in with the loan servicer to confirm how it will be applied to the loan or loans. For example, a borrower with multiple loans may choose to spread the extra payments evenly among each loan. Others may choose to concentrate on the loan with the highest balance or the highest interest rate.

Another note, lenders may first apply overpayments to the interest accrued on the loan. Borrowers may have to request the extra payment be applied to the principal balance of the loan. The important thing is to be sure you understand exactly where the payment is going.

Focusing on High Interest Debt

When it comes to students and debt, sometimes it’s more than just student loans. Paying down other debt, such as credit cards with higher interest rates or personal loans, can also lower your overall debt.

While some people prefer to pay off their debt with the lowest balance, other people prefer to start tackling the one with the highest interest rate.

Here are some ideas that could help someone pay off their credit cards or personal loans sooner.

•   Making more than the minimum payment. Even an extra $25 or $50 a month adds up.

•   Contacting the credit card company and asking for a lower interest rate.

•   Using automatic payments to avoid missing a payment and incurring a late fee.

•   Stopping using the credit card for additional purchases.

•   Obtaining another credit card with a lower interest rate and transferring all or a portion of the balance.

Some lenders may charge a prepayment penalty for some types of loans or credit, so double check the terms to be sure.

Getting a Second Job or Side Hustle

One way to help pay down student loans faster is to obtain a second part-time job. The additional income from the second job could go towards extra payments on the loan.

Finding a second job could be accomplished by asking your friends or co-workers for referrals. They might know of a small business or person who needs a helping hand or temporary work on a short-term project.

Depending on the gig, some of the work could be completed online or during weekends.

Checking job boards, social media, and with your current network could net you some temporary gigs such as babysitting, pet sitting dogs or cats, or running errands for a professional.

Another strategy is to sell any unused items that are sitting around in your home. Cleaning out your closet or garage could help people come up with some extra income that can be used to make an extra payment or two.

Selling musical instruments, electronics, clothing, or shoes online or at a resale shop is one way to sell the items quickly. Social media is another way to sell your unwanted guitar or electronic tablet that is just collecting dust.

Recommended: 23 Ways to Make Extra Income From Home

Making Lump Sum Payments

Sometimes, making consistent extra payments on a loan isn’t an option. In that case, consider making a lump sum payment whenever you get a larger amount of money from a tax refund, birthday gift, or bonus at work.

Apply all or a portion of the extra money to a payment. Making extra payments applied to the principal can help reduce the amount of interest paid in the long term.

Refinancing Student Loans

Making changes to your budget, slashing your expenses, and getting another gig could help you pay down your student loans faster. Focus on the improvements you have made and create both short-term and longer term financial goals. Refinancing is another option that could potentially help a borrower speed up their repayment.

Student loan refinancing could help qualified borrowers secure a lower interest rate, which also means that more of the money paid each month will go towards the amount that was originally borrowed — the principal value.

This could help students and their parents finish paying off their student loans sooner. A lower interest rate could also reduce the amount of money spent in interest over the life of the loan.

Refinancing can also help make monthly payments more affordable, which could be helpful to people with a tight budget.

However, getting a lower monthly payment when refinancing could be a result of extending the repayment term, which would ultimately mean the loan costs more in the long run.

Refinancing also allows borrowers with multiple loans to combine them into a single loan. This can help streamline the repayment process, since the borrower will be repaying a single loan with a single lender, instead of making multiple payments each month, sometimes to different lenders.

A student loan refinancing calculator can help give you an idea of the amount of your new monthly payments. Any extra money saved each month could be used to pay for other debt such as credit cards or towards your savings for an emergency, a down payment for a car or house, or other goals such as a vacation.

SoFi gives people the option to refinance both federal and private loans. Before you refinance your federal student loans, consider whether keeping the repayment benefits that they offer, such as forgiveness programs or income-driven repayment plans, could be useful to you in the future. When you refinance with a private lender like SoFi, those benefits are no longer available.

The application process at SoFi can be completed easily online and there are absolutely no hidden fees.

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.

The question of whether it’s worthwhile to obtain a Master’s in Business Administration—an advanced and versatile degree that can help people ascend into management analysis and/or strategy roles—is a highly personal one without a real single objective answer. As usual with financial and personal decisions, the answer tends to be “it depends.”

The last decade has seen the MBA go from becoming the most popular master’s degree in the U.S. to “being in crisis,” with overall applications declining. The COVID-19 pandemic resulted in many schools expanding their policies and modalities for distance learning, so it’s still anyone’s guess what impact that will have on the MBA’s popularity and employer demand. Either way, it’s never a bad idea to consider betting on your future—and an MBA is still a big commitment. Here are some things to consider when deciding to pursue an MBA.

The Pros and Cons of Getting an MBA

Getting an MBA won’t be right for everyone, but it could be one way to advance your career. Here are some things to consider as you weigh the pros and cons of getting an MBA.

Pros to Consider

Improved earning potential. The average anticipated salary for MBA graduates entering the workforce is $79,043 according to the National Association of Colleges and Employers. A recent grad’s expected salary may be even higher depending on where a student gets their MBA. According to US News & World Report, the average salary for 2019 MBA graduates at the top 129 full-time MBA programs was $106,757. For top 10 programs, the average salary and bonus was $173,960.

But if you’re wondering if it’s worth getting an MBA from a lower tier school, consider that the average MBA salary for graduates with a degree from the 10 schools where compensation was lowest was just $52,720 .

Expanded Network. Business school can be a great opportunity to make friends and network with like-minded individuals. In addition to your peers in the program, you’ll engage with faculty and be introduced to a (hopefully robust) alumni network.

Career Acceleration or Transition. Successful completion of an MBA program can improve an individual’s career mobility. Coursework is often designed to encourage management skills, critical thinking, and other specialized skills, which can help prepare people for the workforce.

Cons to Consider

The cost. According to US News & World Report , in 2020 the average cost of the top 10 business schools in the United States was over $140,000 for tuition in a two-year MBA program. The most recent data available from the National Center of Education Statistics indicates that during the 2015-16 school year, the average MBA student loan debt was $66,300 at the time of graduation.

There are ways to mitigate the cost or to at least lower sticker shock out of the gate by pursuing part-time programs or staggering your course load over a longer period of time so you can still be drawing a salary to offset the costs while you’re studying.

Time commitment. Getting an MBA in a full-time program can take two years. There are some accelerated programs that may allow students to complete their coursework in 12 to 16 months. Beyond the length of the program, MBA classes are no joke. The coursework requires commitment and diligence, so be sure you have the time to dedicate to classes.

Consider factoring in the application process when evaluating both time and cost. To apply, schools may require GMAT™ scores, letters of recommendation, and more. Meeting the application requirements may take both time and money if you still need to take the required standardized tests.

How to Decide If an MBA Is Worth It for You

While an MBA can offer great potential for career growth, it’s definitely not the right choice for everyone. Be honest with yourself about why you want to pursue an MBA. It can be an excellent opportunity for students who are interested in career growth but it can be a huge time and monetary commitment.

Take the time to really evaluate whether getting an MBA is in line with your career and personal goals. Also understand the types of schools you may be able to get into, as the earning potential for someone who attended a top-tier school isn’t the same as someone who is enrolled in a lower-tier program.

When sitting down to crunch the numbers and assess your goals, pay particular attention to long-term salary projections among graduates from the program you have in mind—assuming future earning potential is a primary motivator for getting an MBA. Debt may be offset by future salary. But because signing on for grad school is a big and expensive decision overall, it’s worth considering all angles.

How to Pay for an MBA

One approach to college programs is to first seek fellowships, scholarships, and grants—and to then pay for costs out of pocket or to seek a loan as a last resort. Unlike undergraduate scholarships, which may be based on financial needs, MBA fellowships and grants are often awarded on merit. That means rather than taking financial need into account, oftentimes programs will be looking at a student’s achievements, talents, abilities, and performance in spite of hardship.

Generally speaking, when trying for a merit-based award, it helps to apply early, really ponder how you’re distinct from your competition, and push yourself to craft your application specifically for the program. Admissions folks and fellowship committees spend a lot of time reading a ton of applications and can tell instantly when an essay has been rubber-stamped—spell check, read your application over repeatedly, and don’t rush any aspect of it.

When in doubt, consider calling the admissions office for guidance or for information on programs and awards that may not be fully described online. But many MBA programs, including, for example NYU Stern, clearly indicates that “about 20-25% of admitted full-time two-year MBA students receive a merit-based scholarship.” NYU Stern’s website runs down many of the possible scholarships and fellowships prospective students can try for and what’s required.

Review fellowship opportunities available at the college or university you are interested in attending. Fellowships can be highly competitive and rare but offer a chance to attend a program, earn a degree, and avoid incurring the full cost of tuition. Not all schools offer them, but the University of Florida’s Warrington College of Business and Arizona State University’s W.P. Carey School of Business are just two examples of ones that do.

It might sound like an incredible long shot to earn a full free ride or even a considerably discounted one via aid—but it’s always worth pursuing because you may be closer than you think.

Recommended: How To Pay For Grad School

Student Loans for Graduate School

Student loans are another option students can use to pay for graduate school. To apply for federal aid, students will need to fill out the Free Application for Federal Aid. It’s important to note that the federal loans available for graduate students vs undergraduate students are different. Importantly, graduate students are not eligible for subsidized loans.

While your search for aid often starts with the university’s website and making contact with real humans there—not just going off what’s online—it’s also worth getting on the phone to lenders and finance companies to shop around and get the lay of the land. SoFi offers options to help students refinance existing student loans or to take out a new one. According to The Fed, there is currently over $1.7T in student loan debt . Chances are anyone thinking about school would like to avoid personally contributing to that statistic. Note that refinancing eliminates federal loans from borrower protections like deferment or forbearance.

Recommended: The Lifetime Cost of an MBA Degree

Employer Tuition Reimbursement Programs

In addition to getting on the horn with the schools you’re considering, it’s worth talking to your employer. Some employers have programs where they will pay for all or part of your MBA if you commit to returning and staying with the company for a set number of years after you earn the degree.

A 2019 survey from the Graduate Management Admission Council found that 40% of companies offer education sponsorship . If you’re among the current majority of the 60% other companies, there may still be tuition reimbursement programs—it’s worth at least asking about.

You can also explore business school assistantship programs as a way to offset the cost of tuition. These are jobs that may require you to help school faculty with tasks like conducting research or grading papers, and can also help provide you with a stipend as well to help with personal expenses outside of the debt owed to the school you’re working to erode. Contact your school’s employment office for details—but know that like with every other option to minimize the bill for a degree, the competition is likely to be fierce.

Recommended: How Does Tuition Reimbursement Work?

The Takeaway

Even if you don’t have a few dream graduate schools in mind yet, it’s a good bet you know it’s a pricey proposition and not one to be pursued on a whim. In addition to this article, it would be worth reading our content on how today people are taking on a larger amount of debt for master’s, MBA, law, and medical programs than ever before.

Compared to undergrads, grad students are taking on more debt, taking out loans that come with higher interest rates, and there’s the additional opportunity cost of just time invested in your own life—later in life—that comes with pursuing another degree.

That doesn’t mean it isn’t worth getting an MBA necessarily, it just means before making the final decision about pursuing it, it’s helpful—necessary even—to sit down, do your homework, and really think it through to develop a strategy and identify where compromises might also be called for.

Like a Bachelor’s, an MBA is not a guarantee of anything in your future. Obtaining an MBA will not magically earn you a better salary, grant you access to a better network, or help you figure out your path in life. Like any degree, an MBA is a tool that might help you quickly pivot your career or “check a box” for earning a promotion with your current employer. Whether that’s worth it depends on your own specific situation and set of goals.

IF YOU ARE LOOKING TO REFINANCE FEDERAL STUDENT LOANS, PLEASE BE AWARE THAT THE WHITE HOUSE HAS ANNOUNCED UP TO $20,000 OF STUDENT LOAN FORGIVENESS FOR PELL GRANT RECIPIENTS AND $10,000 FOR QUALIFYING BORROWERS WHOSE STUDENT LOANS ARE FEDERALLY HELD. ADDITIONALLY, THE FEDERAL STUDENT LOAN PAYMENT PAUSE AND INTEREST HOLIDAY HAS BEEN EXTENDED TO DEC. 31, 2022. PLEASE CAREFULLY CONSIDER THESE CHANGES BEFORE REFINANCING FEDERALLY HELD LOANS WITH SOFI, SINCE THE AMOUNT OR PORTION OF YOUR FEDERAL STUDENT DEBT THAT YOU REFINANCE WILL NO LONGER QUALIFY FOR THE FEDERAL LOAN PAYMENT SUSPENSION, INTEREST WAIVER, OR ANY OTHER CURRENT OR FUTURE BENEFITS APPLICABLE TO FEDERAL LOANS. CLICK HERE FOR MORE INFORMATION.
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.

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

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

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.

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.

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Taking a break from financial obligations can offer some breathing room, but it’s important to understand how deferred payments may affect your credit score.

It didn’t take long after President Biden announced his student loan forgiveness program in August 2022 for the scammers to get up and running. The Better Business Bureau (BBB) and federal agencies have unearthed hundreds of ads, text messages, phone calls, and emails targeting student loan borrowers. Their purpose? To get consumers to divulge private financial information or to pay for unnecessary services. In response, the U.S. Department of Education issued warnings about the student loan forgiveness scams and advice on how to avoid them.

The ongoing student loan payment pause hasn’t slowed the scammers down. Keep reading to learn how student loan forgiveness program scams try to fool you, and how you can avoid getting duped.

Status of Biden’s Student Loan Forgiveness Plan

The student loan forgiveness plan would cancel up to $10,000 in federal student loan debt for single borrowers with an adjusted gross income of less than $125,000 a year, or less than $250,000 for married couples. Pell Grant recipients could have as much as $20,000 in student debt canceled. To refresh your memory, check out this story on the student debt relief plan.

The DOE officially began to accept applications for forgiveness on Oct. 17, 2022, but had to stop in November due to legal challenges to Biden’s program.

Meanwhile, the pause on federal student loan payments for all borrowers has been extended several times. Repayment could potentially resume as late as 60 days after June 30, 2023, when the U.S. Supreme Court is expected to release its decision on the challenges to President Biden’s student debt cancellation program.

While borrowers wait for updates, scammers are actively using phony government websites, false promises, and other criminal schemes to lure unsuspecting consumers. Here’s what you need to know to avoid student loan forgiveness scams.

Recommended: What Biden’s Student Loan Forgiveness Means for Your Taxes

Types of Student Loan Forgiveness Scams

Watchdogs have identified a variety of scams related to student loan forgiveness. Some are aimed at borrowers searching out information on the internet, and others directly target people who hold student loans. Fortunately, certain patterns are coming into focus. Here’s a rundown of what officials have seen so far.

Recommended: How Do Student Loans Work? Guide to Student Loans

False Deadline Warnings

These scams include texts, calls, and emails sent to borrowers conveying a false sense of urgency that they must take action before a certain date or miss out on forgiveness. In reality, the messages are designed to scare you into disclosing personal financial information, which criminals may then use for identity theft and other financial fraud. Be very wary of any “student loan forgiveness center” calls.

On Oct. 17, the DOE opened the official forgiveness application portal . The deadline for applications is the end of 2023, but you’ll want to apply a lot sooner if your payments will be resuming in January.

What’s more, for many borrowers who already have income information on file with the DOE, forgiveness will be automatic. No application — and no deadline — is necessary.

Fake Email Alerts

Especially while borrowers were waiting on an email from the DOE informing them that the forgiveness application was open, scammers are sending fraudulent emails that look as if they might be from the government in an effort to collect personal financial information. This and other fraudulent strategies are expected to continue.

To make sure you’re responding to a legitimate email, always check the address of the sender. The full address isn’t always obvious on a phone or other mobile device: That interface often shows only the name of the sender. Always click on the sender’s name to see the actual address.

The address is likely to be the real thing if it has a .gov ending, something not easy for fraudsters to imitate.

You can sign up for student loan forgiveness notifications and updates from this DOE webpage .

Help With the Student Loan Forgiveness Application

There are lots of offers on the internet and elsewhere to help borrowers claim their loan forgiveness — for a fee. While not all of the companies offering these services are illegitimate, the DOE has warned that it won’t be necessary to pay for help. They promise the application will be simple and quick to complete.

Predatory companies love to use webinars and videos explaining the details of the loan forgiveness program. The ending is always the same: a plea to sign up for their paid service, with the promise they’ll get you your debt relief. They may claim they can get you additional benefits, get your benefits faster, or get you to state tax breaks if you pay them upfront. In some cases, the outlaws charge hundreds of dollars for unnecessary service.

A real government agency will never ask for an advance processing fee. And legitimate student loan servicers will never charge a fee for providing information about your loans. You can check if a company works with the DOE at the Federal Student Aid site on avoiding scams .

Recommended: 9 Smart Ways to Pay Off Student Loans

What You Can Do to Avoid Scammers

To protect yourself from student loan forgiveness program scams, familiarize yourself with the following tips. They can help you avoid the threat of costly identity theft or financial fraud that can result from these schemes.

Never give out your FSA ID, student aid account information, or password. The DOE and the company that services your federal student loans will never call or email asking you for this information. Along the same lines, never give your personal or financial information — including your Social Security number and bank account information — over the phone or email. (That said, the beta version of the forgiveness application asks for your Social Security number but not your FSA ID.)

Avoid upfront fees. Think twice before paying anyone for help filling out the application. It is highly likely you won’t need help because the government is promising a free and easy-to-use application. Paying a fee before the application is even available is totally unnecessary.

Stay up-to-date. Having the most accurate and current student loan forgiveness information is the best defense against fraud. As mentioned above, sign up with the DOE for notifications and updates. And keep an eye on the Better Business Bureau and Federal Student Aid websites for the latest official information.

Update your contact information. To receive official notices related to student debt relief, make sure the government and your loan servicer have your most current contact information. If your income information is already on file at the DOE, qualifying borrowers will automatically receive loan forgiveness without having to apply. All borrowers, whether or not they have to apply, will be notified by the DOE when the application goes live.

To make sure you get these notices and other updates, sign up with StudentAid.gov to receive text alerts. If you don’t have a StudentAid.gov account, create one now .

You’ll also want to make sure your student loan servicer has your most recent contact information. You can find your federal student loan servicer’s contact information at Studentaid.gov/manage-loans/repayment/servicers

The Takeaway

Understanding how student loan forgiveness scammers work is an important step toward protecting yourself. Staying up to date on the latest official news and announcements can also help you bypass the onslaught of scams out there. Another important defense: Actively manage your student loan accounts and make sure all of your information is accurate and up to date.

SoFi can help. If you have more federal student debt than the new debt relief plan will forgive, or you don’t qualify for loan forgiveness, or you have private student loans, you may want to consider refinancing your debt before rates rise further.

If you do qualify for forgiveness and you refinance your federal student loans, you will no longer qualify for the new program. If you still wish to refinance, leave up to $10,000 unrefinanced ($20,000 for Pell Grant recipients) to receive your federal benefit. Remember: Good information is your best weapon when it comes to managing all aspects of student debt.

FAQ

What are common types of student loan forgiveness scams?

Look out for false email alerts claiming to be from the government and phony government websites. These schemes attempt to get you to divulge personal financial information, which can then be used for identity theft and other financial fraud. Other scammers are offering unnecessary forgiveness application help for a costly upfront fee.

How can I avoid falling victim to a student loan forgiveness scam?

Information is your best defense. Sign up for government alerts and notifications, and keep an eye on advice from official outlets. Also, make sure your contact information is current with both the government and your loan servicer.

Does everyone eligible to receive student loan forgiveness need to fill out an application?

No. If your income information is already on file with the Department of Education, you will not need to apply for student loan forgiveness. You’ll receive it automatically.

Photo credit: iStock/Pekic

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.