What Is the Student Loan Default Rate?

The average student loan borrower takes out $29,300 to pay for college, according to the College Board. At any given time, more than 6% of these student loans are in default, and within the first three years of repayment, 10.3% of borrowers will enter default.

Federal student loan default occurs when a borrower fails to make payments on their student loans for 270 days. This can lead to serious consequences, including wage garnishment, loss of eligibility for federal financial aid, and damage to credit scores.

Keep reading to learn more on student loan default, including the history and importance of the default rate, the average student loan default period, how to make your loans more affordable so you can avoid default, and more.

Key Points

•   The student loan default rate measures the percentage of borrowers who fail to make payments for 270 days or more.

•   As of recent data, the overall federal student loan default rate is around 6%, but it varies significantly by school type and borrower demographics.

•   Community colleges and for-profit institutions have higher default rates compared to public and private nonprofit colleges.

•   Defaulting can have severe financial consequences, including damaged credit, wage garnishment, and loss of eligibility for federal aid.

•   Ways to prevent student loan default include deferment, forbearance, income-driven repayment plans, and refinancing your student loans.

The History and Importance of the Default Rate

What’s known as the three-year default rate is a highly watched number because it’s the figure the U.S. Department of Education uses to determine if colleges and universities qualify to receive federal student aid. If a school’s default rate exceeds a certain benchmark three years in a row, it could lose eligibility for Title IV funding.

The student loan default rates have generally trended down over the last two decades. In March 2020, the Department of Education paused collections on most student loans in default. It also offered a Fresh Start program that allowed borrowers to easily get their loans out of default and back into good standing. As of October 2, 2024, the Fresh Start program has ended.

Recommended: 7 Tips to Lower Your Student Loan Payments

What Is the Average Student Loan Default Period?

The average student loan default period refers to the typical length of time it takes for a delinquent federal student loan to be classified as “in default.” For most federal loans, this period is 270 consecutive days — about nine months — of missed payments.

The federal government focuses on the three-year student loan default rate. Education Data Initiative finds that 10.3% of borrowers default within the first three years of when their repayment starts.

Students who were enrolled in private, for-profit colleges are the most likely to have student loans in default, data shows. In fact, within the first 12 years of repayment, more than 50% of those loans end up in default.

Don’t let your loans go into default.
See how student loan refinancing can help.


The Difference Between Defaulting on a Loan and Being Delinquent

Borrowers participating in the Federal Direct Loan program or the Federal Family Education Loan (FFEL) program are considered in default if they miss nine months or 270 days of payments. Borrowers can face a number of serious consequences if they default on a loan, including losing the opportunity to defer payments or choose a repayment plan.

It may also damage your credit, and your tax refunds may be withheld and applied to what you owe on your loans. The government could even garnish a portion of your wages to apply to your loan. Finally, your loan holder can sue you, and if that’s the case, you may be responsible for the court fees.

With a delinquency, you still have time to start making payments again and restore your relationship with your lender. You’re considered delinquent on federal student loans the day after you miss your first payment, and you’ll remain delinquent until you resume payments and make up the past due amount.

If it’s been 90 days since your last payment, the lender can report you to credit agencies, and those missed loan payments can go on your credit report, which can affect your ability to borrow in the future. With a bad credit report, you may have trouble getting credit cards, home loans, and even arranging for utilities or homeowner’s insurance.

What Options are Available to Make My Loans More Affordable?

To avoid becoming part of the student loan default rates, it’s important to take action. If you are delinquent on your student loans or think you may be heading that way, you can seek deferment or forbearance, which is a federal benefit to stop making payments for a period of time. However, interest may still accrue. You could also choose a federal income-based repayment program that bases your monthly payment on your income and family size.

Refinance Your Student Loans

Another option is to refinance your student loans with a private lender. With student loan refinancing, you may be able to get a lower interest rate or more favorable terms to help reduce your monthly payments. (Note: You may pay more interest over the life of the loan if you refinance with an extended term.)

Want to see how much you might save? You can use a student loan refinance calculator to see if refinancing makes sense to you.

Keep in mind that if you need access to federal protections and programs, such as income-driven repayment programs, refinancing federal student loans likely wouldn’t make sense for you. That’s because when you refinance federal loans, they become ineligible for these special benefits.

The Takeaway

The student loan default rate is a critical indicator of financial distress among borrowers, with significant variations based on school type and demographic factors. Understanding the risks and exploring preventive measures like deferment, forbearance, income-driven repayment plans, and student loan refinancing can help borrowers avoid the severe consequences of default.

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

What is the overall federal student loan default rate?

As of recent data, the overall federal student loan default rate is around 10%, though it can vary significantly depending on the type of school and borrower demographics.

How can you prevent student loan default?

To prevent student loan default, explore options like deferment, forbearance, and income-driven repayment plans. You can also look into refinancing your student loans for a better rate or terms, which may help reduce your monthly payment and prevent default.

What are the consequences of defaulting on student loans?

Defaulting on student loans can lead to damaged credit, wage garnishment, and loss of eligibility for federal financial aid.


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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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.


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.

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Your Guide to Handling High-Interest Debt

High-interest debt can feel like a heavy weight, keeping you from reaching your financial goals and constantly draining your resources. Even if you consistently make the minimum payments, a significant portion goes towards interest, making it difficult to make any progress on the principal — or original debt.

Fortunately, there are strategies and tools you can use to manage and pay off high-interest debt more efficiently. Below, we walk you through what qualifies as high-interest debt, how it impacts your finances, and practical methods to help you tackle it head-on.

Key Points

•   High-interest debt, such as credit cards, can significantly increase borrowing costs and hinder financial goals.

•   High balances and missed payments can negatively affect credit scores, leading to higher future interest rates.

•   Refinancing and balance transfers offer ways to reduce interest rates and pay off debt faster.

•   The avalanche payoff method targets high-interest debts first to minimize total interest paid.

•   The snowball payoff method focuses on smallest debts to build momentum and motivation.

What Is Considered High-Interest Debt?

High-interest debt generally refers to any loan or credit product with an interest rate significantly above average. While there’s no universally accepted definition of “high interest,” generally speaking, any annual percentage rate (APR) in the double-dibits is considered high.

The most common sources of high-interest debt include:

•   Credit card debt: As of May 2025, the average credit card interest rate was 22.25%, but you may see rates as high as 25%.

•   Payday loans: These are short-term, high-cost loans, typically for small amounts (often $500 or less), that are due on your next payday. Fees typically run around $15 per $100, which equates to an APR of almost 400%, according to the Consumer Financial Protection Bureau. This makes payday loans one of the most expensive forms of borrowing.

•   Store credit cards: Store-only credit cards charge an average of 30.24% APR, substantially higher than the average interest rate on general-purpose credit cards.

•   Personal loans for bad credit borrowers: Lenders typically charge higher interest rates — often 30% APR or higher — on personal loans for borrowers with poor credit primarily due to increased risk.

Unlike mortgages or student loans, which tend to have lower, fixed interest rates, high-interest debts can grow quickly if not managed, making them harder to pay off over time.

💡 Quick Tip: With low interest rates compared to credit cards, a personal loan for credit card consolidation can substantially lower your payments.

How High-Interest Debt Can Dent Finances

High-interest debt doesn’t just make it hard to stay on top of bills, but can have a ripple effect on nearly every aspect of your financial life. Here’s a look at the potential fallout:

•   Increased costs over time: The higher the interest rate, the more you pay in interest over the life of the loan or credit balance. For example, carrying a $5,000 credit card balance at a 22% APR and only making minimum payments could result in paying thousands of dollars in interest on top of what you originally borrowed.

•   Slower progress toward goals: When large chunks of your income go toward interest payments, there’s less money left for savings, investing, or major purchases like a car or a home. High-interest debt can delay financial goals such as building an emergency fund, starting a business, or saving for retirement.

•   Credit impacts: High balances relative to your credit limit can negatively affect your credit utilization ratio, a key factor in credit scoring. Missed or late payments can also damage your credit, which can lead to even higher interest rates in the future.

•   Emotional stress: Living under the constant pressure of unmanageable debt can lead to stress and anxiety. Financial insecurity can also negatively impact your relationships and overall well-being.

Personal Loan CalculatorPersonal Loan Calculator

How to Pay Off High-Interest Debt

Tackling high-interest debt takes commitment, planning, and sometimes a little help. Here are some effective tools and strategies to consider.

Refinancing

Refinancing involves replacing one loan with another, ideally one that has a lower interest rate. Two popular options for refinancing high-interest debt are:

•   Personal loans: Interest rates on personal loans are generally much lower than credit cards, especially if you have good credit. If you can qualify for a competitive rate on a personal loan for debt consolidation, and use it to pay off your high-interest debt, it could help you save money and potentially pay off your debt faster.

•   Home equity loans or lines of credit (HELOCs): If you own a home, borrowing against your equity can provide access to low-interest funds to pay off high-interest debt. Just keep in mind that these are secured loans, meaning your home is used as collateral. Should you run into trouble repaying your loan or credit line, you could risk losing your home.

To determine if refinancing is worth it, you’ll want to compare loan terms carefully and check for any fees or penalties, which can add to your costs. An online debt consolidation calculator can help you determine exactly how much you could save by refinancing high-interest debt with a lower-interest loan.

💡 Quick Tip: Before choosing a personal loan, ask about the lender’s fees: origination, prepayment, late fees, etc. One question can save you many dollars.

Balance Transfer

A balance transfer involves taking out a new credit card, ideally one with a 0% introductory APR, and using it to pay off your current credit card balances. This can be an excellent tool for saving on interest, if used wisely. However, there are a few caveats to keep in mind:

•  Balance transfer cards usually charge a 3.0% to 5.0% transfer fee on the transferred amount. So for every $1,000 you transfer, a 4.0% percent balance transfer fee would cost $40.

•  If you don’t pay off the balance within the promotional period (which can be anywhere from 12 to 21 months), the interest rate will jump, potentially undoing your progress.

•  You typically can’t transfer balances between cards from the same bank.

•  You generally need a good credit score to qualify for the best balance transfer offers.

Credit Counseling

Working with a nonprofit credit counseling agency can be a good way to get free or low cost help with managing high-interest debt.

General credit counseling and budgeting advice is often free. For a small fee, a counselor can also set up a debt repayment plan (DMP). If you sign up for a DMP, your counselor will negotiate with your creditors on your behalf to lower interest charges and fees, and come up to a manageable repayment plan. You then make a single monthly payment to the agency and they distribute payments to your creditors.

A DMP typically requires closing your credit accounts and you usually can’t access new credit during the plan.

Common Debt Repayment Strategies

If you want to tackle your debt on your own, it’s important to take a systematic approach. “Focus on paying off one debt at a time,” advises Brian Walsh, CFP® and Head of Advice & Planning at SoFi. “If you spread your money out over many debt payments, your progress may not be as fast as you want. But by focusing on one goal at a time, you can see success sooner — and that can keep your motivation up.”

Two popular debt payoff strategies — the avalanche and snowball methods — offer different psychological and financial benefits. Here’s how they work:

The Avalanche Method

With the avalanche method, you list your debts in order of interest rate then make extra payments on the debt with the highest rate, while continuing to pay the minimum on the rest. Once that debt is erased, you funnel your extra payments towards the debt with the next-highest interest rate, and so on. This approach helps you save money on interest over time, but it can take longer to see results.

The Snowball Method

With the debt snowball method, you list your debt in order of size, ignoring interest rates. You then focus extra payments on the debt with the smallest balance, while making minimum payments on the rest. Once that debt is paid off, you roll its monthly payment to the debt with the next-smallest debt, and so on, creating a “snowball” effect.

This strategy helps you build momentum and motivation as you eliminate entire debts faster, but may cost more in interest compared to the avalanche method.

The Takeaway

High-interest debt may be daunting, but it’s not unbeatable. With the right combination of tools, you can take control of your finances and move toward a debt-free future.

Whether you opt for refinancing, a balance transfer, credit counseling, or a DIY payoff approach, the key is to start now, stay committed to your plan, and remember that each payment moves you one step closer to financial freedom.

FAQ

What is an example of high-interest debt?

A common example of high-interest debt is credit card debt. Many credit cards carry annual percentage rates (APRs) topping 20%, especially for those with lower credit scores. Due to compounding interest, balances can keep growing if you only pay the minimum due each month. Payday loans and personal loans for bad credit borrowers are also considered high-interest debt. These loans often feature extremely steep rates that can trap borrowers in a cycle of ongoing payments.

How can I prioritize high-interest debt over other financial goals?

To prioritize high-interest debt, start by creating a budget that allocates extra funds toward these debts while covering essentials. Consider using the avalanche payoff method, which prioritizes paying off debts with the highest interest rates first. While saving and investing are important, aggressively tackling high-interest debt can free up more money in the long run and improve your financial stability.

Does consolidating high-interest debt hurt your credit score?

Debt consolidation can cause a temporary dip in your credit score due to a hard credit inquiry and the opening of a new credit account. However, if managed responsibly, it can have a net positive impact on your credit file over time. By simplifying payments and potentially lowering your interest rate, consolidation can help you build a positive payment history, a key factor in your credit score. The long-term effect on your score largely depends on how well you manage the new loan.

Are personal loans a good option for high-interest credit card debt?

Yes, personal loans can be a smart option for paying off high-interest credit card debt. They typically offer lower fixed interest rates and a set repayment term, making monthly payments more predictable. This can help you save on interest and potentially pay down debt faster. However, it’s important to compare lenders, watch for fees, and avoid racking up new credit card debt after consolidation. Success depends on disciplined repayment and budgeting habits.

How long does it take to pay off high-interest debt with a structured plan?

The time it takes to pay off debt with a structured plan varies based on your total debt, repayment strategy, and how much extra you can pay monthly. Using a formal debt management plan offered by a credit counseling agency, many people become debt-free in two to five years. Larger debts may take longer, especially if you’re only making minimum payments.



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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.


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.

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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Stock Market Fluctuations Explained

The stock market can go up or down based on a number of different factors, including consumer confidence, worries about inflation, and supply and demand. As an investor, it’s important to understand market fluctuation and how it works, and to know how much fluctuation is normal.

Why do stocks fluctuate? Read on to learn more about market volatility and stock fluctuation.

Key Points

•   Stock market fluctuations are generally driven by supply and demand, inflation, economic indicators, and company performance.

•   Annual stock market fluctuations are common, and vary year to year.

•   Market volatility may present opportunities to buy stocks at lower prices, but its possible prices could continue to decline.

•   Diversifying assets may help reduce risk during volatile market conditions.

•   Historical data shows 12 S&P 500 drops over 20% since World War II.

Top Causes of Stock Market Fluctuations

The stock market fluctuation definition is when stock prices rise or fall. So what causes this? The stock market can move up and down due to a variety of factors, including:

Supply and Demand

The prices of stocks depend on supply and demand. Supply is how much of a good — in this case, a share of stock — is available for sale. Demand is how much consumers want to buy that stock. Prices rise when the supply of shares of stock for sale is not enough to meet investors’ demands. When investors demand for shares falls, so does the price of the shares.

Overall, the stock market fluctuates because investors are buying and selling stocks in such a way, and in such volume, that stock prices make a large move in one direction or another.

Inflation

Concerns about inflation may cause investors to become bearish and stop buying stocks, which may make the market go down. That’s because during periods of inflation, consumer spending tends to slow, and corporate profits may suffer. Inflation can inject uncertainty and volatility into the market.

Economic Indicators

Economic indicators are data that analysts use to help judge the health of the economy. These indicators can, in turn, affect stock market fluctuation. They typically include such things as the Consumer Price Index, unemployment numbers, interest rates, and home sales. If prices, interest rates, and unemployment rise, chances are good that there may be stock fluctuation.

Company Performance

How well a company is doing can affect the price of its stock and potentially cause market fluctuations. If the company is expanding its operations and reporting a profit, for instance, investors’ demand for the stock may rise, along with the price of the stock. Conversely, if there are concerns about the company’s financial health, or it reports a loss, demand for the stock may drop, and so generally will the price.

Pros and Cons of Market Fluctuations

There are benefits and drawbacks to market fluctuations, and that may be particularly true for short-term traders to use volatility as an opportunity to generate returns. These are some of the advantages and disadvantages to consider when the market becomes volatile.

Market Fluctuations

Pros

Cons

May be able to purchase stocks at lower prices Could lose money by selling stocks at a loss
Opportunity to diversify assets Holdings could lose value

Pros of Market Fluctuations

Market fluctuations may be a good thing for some investors, in some instances.

•  Chance to purchase shares at lower prices. When stock prices go down, it may be a good opportunity for investors to buy shares for less. Investing in a down market could be beneficial.

•  Incentive to diversify your assets. When the market is volatile, it’s a prime time to look over your asset allocation and make any prudent changes. For instance, you may want to reduce some of your holdings in riskier assets and move them over to safer investments in case the market drops.

Cons of Market Fluctuations

Market fluctuations also have downsides including a potentially higher risk of seeing losses.

•  Might end up selling stocks at a loss. Instead of panicking, selling your shares, and losing money, you may be better off waiting out the fluctuations if you can. When the market goes back up, you may be able to recoup what you paid for the stock.

•  Holdings could lose value. Naturally, market fluctuations and volatility often mean that holdings lose value, and that may not be something that all investors can stomach.

Volatility Means the Stock Market Is Working

Although it’s difficult to watch the value of your portfolio drop, stock market volatility is a normal part of stock market investing. In fact, volatility is natural, and it shows that the stock market is working as it should.

Here’s why: The more investors weigh in — by actively buying and selling stocks — the more accurate the prices of stocks will ultimately be. Essentially, it’s a weighing of information about the “correct” price of a stock from many different investors.

It’s also helpful to remember that volatility doesn’t just relate to rising stock prices — it also refers to falling stock prices. When the stock market makes a surge upward, that is also considered stock market fluctuation.

What Is a Normal Amount of Stock Market Fluctuation?

Almost any amount of market fluctuation is possible.

The best guide for understanding what is normal (and what is not) is to look at what has happened in the past. While past performance is never a guarantee of future financial success, it’s helpful to look at the data.

The most commonly cited pool of data is the S&P 500. The S&P 500 can give a good historical gauge of stock market movement.

Since World War II — the “modern” stock market era, the S&P 500 has seen a dozen or so drops in the stock market of over 20%.

Peak (Start)

Return

May 29, 1946 -30%
August 2, 1956 -22%
December 12, 1961 -28%
February 9, 1966 -22%
November 29, 1968 -36%
January 11, 1973 -48%
November 28, 1980 -27%
August 25, 1987 -34%
July 16, 1990 -20%
March 27, 2000 -49%
October 9, 2007 -57%
February 19, 2020 33.93%
December 31, 2021 -28.5%

Source: Morningstar

You’ll notice that a big drop in the stock market happens somewhat regularly. And smaller fluctuations of 5% or 10% down happen much more frequently than that.


💡 Quick Tip: When you’re actively investing in stocks, it’s important to ask what types of fees you might have to pay. For example, brokers may charge a flat fee for trading stocks, or require some commission for every trade. Taking the time to manage investment costs can be beneficial over the long term.

What Does Stock Market Volatility Mean to You As an Investor?

How you deal with volatility as an investor depends on your tolerance for risk. What to know about risk is that if you can’t afford losses, volatility could be a time of fear and uncertainty for you. But if you have a higher tolerance for risk, you may see volatility as a potential opportunity.

Risk Tolerance in Investing

Risk tolerance is the amount of risk you’re willing to take with investments. Volatility in the market could directly affect your risk tolerance. For instance, if you have a higher risk tolerance, you may be willing to risk money for the possibility of high returns. If you have a lower risk tolerance, you’ll likely be looking for safer investments with more of a guaranteed return.

Your age, your financial goals, and the amount of money you have impact your risk tolerance. If you’re saving for retirement, and nearing retirement age, your risk tolerance will be lower. In this case, you’ll want to practice risk management with safer investments. If you’re in your 20s or 30s, however, you may have higher risk tolerance because you have more years to recoup any money you may lose.

The Takeaway

Choosing the right investment strategy depends on your goals, risk tolerance, and your personal situation. Every investor needs to manage their portfolio in a way that fits their needs during periods of market volatility and as well during times of stability.

Ready to invest in your goals? It’s easy to get started when you open an investment account with SoFi Invest. You can invest in stocks, exchange-traded funds (ETFs), mutual funds, alternative funds, and more. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).

¹Opening and funding an Active Invest account gives you the opportunity to get up to $3,000 in the stock of your choice.

FAQ

Why does the stock market fluctuate?

The stock market fluctuates for a number of different reasons, but the biggest overall factor is supply and demand. Prices of stocks rise when the supply of shares for sale is not enough to meet investors’ demands. When investors’ demand for shares falls, so does the price of the shares. This causes volatility.

What is the average market fluctuation?

Markets fluctuate fairly frequently. While the market, on average, returns around 10% annually, that can and does fluctuate year to year.

How long do market fluctuations last?

How long market fluctuations last depends on the reason for the fluctuations and how big the fluctuations are. Remember, it’s normal to have some periods of volatility in the stock market. Diversifying your portfolio may help you manage risk and stay on track with your investment goals during times of uncertainty.


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SoFi Invest is a trade name used by SoFi Wealth LLC and SoFi Securities LLC offering investment products and services. Robo investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser. Brokerage and self-directed investing products offered through SoFi Securities LLC, Member FINRA/SIPC.

For disclosures on SoFi Invest platforms visit SoFi.com/legal. For a full listing of the fees associated with Sofi Invest please view our fee schedule.

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.

S&P 500 Index: The S&P 500 Index is a market-capitalization-weighted index of 500 leading publicly traded companies in the U.S. It is not an investment product, but a measure of U.S. equity performance. Historical performance of the S&P 500 Index does not guarantee similar results in the future. The historical return of the S&P 500 Index shown does not include the reinvestment of dividends or account for investment fees, expenses, or taxes, which would reduce actual returns.
Investment Risk: Diversification can help reduce some investment risk. It cannot guarantee profit, or fully protect in a down market.

¹Claw Promotion: Probability of Member receiving $1,000 is a probability of 0.026%; If you don’t make a selection in 45 days, you’ll no longer qualify for the promo. Customer must fund their account with a minimum of $50.00 to qualify. Probability percentage is subject to decrease. See full terms and conditions.

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If you invest in Exchange Traded Funds (ETFs) through SoFi Invest (either by buying them yourself or via investing in SoFi Invest’s automated investments, formerly SoFi Wealth), these funds will have their own management fees. These fees are not paid directly by you, but rather by the fund itself. these fees do reduce the fund’s returns. Check out each fund’s prospectus for details. SoFi Invest does not receive sales commissions, 12b-1 fees, or other fees from ETFs for investing such funds on behalf of advisory clients, though if SoFi Invest creates its own funds, it could earn management fees there.
SoFi Invest may waive all, or part of any of these fees, permanently or for a period of time, at its sole discretion for any reason. Fees are subject to change at any time. The current fee schedule will always be available in your Account Documents section of SoFi Invest.


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The Ultimate Guide to Studying in College

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.

Recommended: 11 Strategies for Paying for College and Other Expenses

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.

Recommended: Using Student Loans for Living Expenses and Housing

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.

Recommended: 11 Strategies for Paying for College and Other Expenses

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.

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

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

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.




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. We encourage you to evaluate all your federal student aid options before you consider any private loans, including ours. Read our FAQs.

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

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.

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3 Benefits of Taking AP Classes in High School

Advanced placement, or AP, classes that are offered in high school can help a student prepare for college, be a more competitive applicant, and save money on tuition. Those are among the reasons that many students consider taking AP classes in high school.

Here’s a closer look at what AP classes are, what the benefits of taking them are, and how they can affect a student’s college experience.

Key Points

•  AP classes can save money on college tuition by earning credits through high scores on exams.

•  They make college applications more competitive by showing readiness for advanced coursework.

•  AP classes can prepare students for college by simulating college-level academic challenges.

•  Scholarships, grants, and federal and private student loans are additional college financing options.

•  Completing FAFSA is advised to assess eligibility for financial aid.

What Are AP Classes?

AP stands for “advanced placement,” and AP classes prepare students for college by giving them college-level work during high school. Their dedication is awarded accordingly, as they can earn college credit and placement by taking corresponding AP exams.

One of the primary motivators for enrolling in AP classes is they prepare students to take and pass AP exams. Students who earn qualifying AP scores on these exams can receive credits from most colleges and universities in the United States.

Depending on their high school’s offerings, students can enroll in one or more of the 40-plus AP classes that cover a variety of subject matters such as arts, languages, sciences, mathematics, and literature.

In order to enroll in an AP class, there may be prerequisite classes that you must take first. It’s recommended that even if students meet the required qualifications in order to take an AP class, that they consider carefully if they are prepared to take a college level course.

The three main benefits of taking AP classes in high school relate to saving money, becoming a more competitive college applicant, and preparing for success in college.

Benefit #1: Saving Money on College Tuition

AP classes will take up a lot of your time in high school but can also save time and money down the line in college. When you receive a high score on an AP exam, the college you attend in the future may give you credit that cancels out the need to take a similar college class.

Some schools may offer advanced placement instead, which allows you to effectively test out of introductory level courses in the specific subject, but may not be counted toward credit.

Policies vary by school, but the more AP exams you pass, the more credits you may be able to earn. These credits could allow you to skip classes which could save you a semester of attending an introductory English literature or Spanish class. Add up enough of these credits, and you could potentially shave off an entire semester or more of your time spent at college.

Note that the policy on AP scores will vary from school to school, and not all schools offer credit for AP classes. Some schools may require a four or five on the AP exam in order to qualify for credit, while others may accept a three. It’s wise to look for details on this kind of policy when conducting your college search.

Generally, you can use AP credits to your financial advantage in two ways. You can either graduate early, which will save money on tuition, fees, and living expenses. Or, you can take lighter course loads across a four year period and can make time to take a part-time job or could add a second major or minor.

At the very least, you may be able to avoid paying for textbooks or lab fees in classes in which you have already mastered the subject matter.

Benefit #2: Making Your College Application More Competitive

When you apply for college, you typically work hard to put your best foot forward and to prove that you will thrive once you land on campus in the fall. College admissions departments carefully comb through transcripts, test scores, and personal essays to see if students will not only be a good fit at their school but to ensure the student has every chance of succeeding once they enroll.

This is one of the reasons AP classes can be beneficial to high school students. When a student thrives in an AP class, they are essentially thriving in a college class. Before an AP student arrives at college, they will clearly understand what will likely be expected of them, how rigorous the course work can be, and what steps they need to take to succeed academically.

Alongside proving preparation, AP students could receive a bit of a grade point average (GPA) boost if they earn good grades. Some high schools, but not all, will give more weight to AP grades than normal ones. For example, receiving a B in an AP class may provide as many points towards your GPA as if you earned an A in the non-AP version of the class.

Recommended: 5 Ways to Start Preparing for College

Benefit #3: Prepare for College Better

Taking an AP course is akin to taking an actual college course, which can help you get a taste for college. If structured properly, an AP course should give you a preview of what skills you need to succeed in a college class and what the workload might look like.

Learning to manage time properly, developing strong research and analytic skills, and covering material more quickly in an AP class can be helpful preparation for the rigors of college life.

Taking AP classes can also help you identify your interests and passions which may lead you to the right college. Having a preview of what it would be like to study French, Psychology, or Chemistry in college can help guide you during the application process towards schools that have strong programs in your chosen area of interest.

College Financing Options

When it comes to paying for college, there are a lot of different options available to students, including scholarships, grants, and federal financial aid.

But figuring out what you qualify for and how to apply can be overwhelming. A great first step is to complete the Free Application for Federal Student Aid (FAFSA). This will let you know what financial aid you are eligible for. For students and parents that need extra help covering the cost of attending college, student loans are a potential option. There are two types of student loans, federal and private.

Federal loans come with a fixed interest rate. With a subsidized federal loan, you don’t pay any interest while you are in school at least half-time. With an unsubsidized federal loan, interest begins to accrue right away (though you don’t have to start making payments until six months after you graduate).

Private student loans are available through banks, credit unions, and online lenders. Interest rates can be fixed or variable and will depend on the lender. Students that have excellent credit (or have cosigners who do) tend to get the lowest rates. Just keep in mind that private student loans may not offer the same protections, like income-based repayment plans, that come with federal student loans.

The Takeaway

Advanced placement or AP classes can benefit students in three key ways. It can give them a taste of college-level work and prepare them for what’s ahead. It can make them a more competitive applicant since it shows colleges that a student has undertaken advanced work. And it can potentially help a student save on tuition since they may be able to opt out of introductory and prerequisite courses. If a student still needs help with tuition costs, scholarships, grants, federal, and private student loans are possible sources.

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

What is the benefit of taking an AP class in high school?

The AP Program allows students to pursue college-level work while in high school and receive college credit, advanced academic standing, or both when they attend college. This can save money on tuition.

Do colleges care if you take AP classes in high school?

Yes, colleges often want to see evidence that applicants were able to excel in challenging classes in high school. For this reason, it can be advisable to take AP classes if they are offered and you are qualified to take them.

What are the disadvantages of taking AP classes in high school?

There can be disadvantages of taking AP classes in high school. These include an increased workload, the potential for lower grades since the courses are more challenging, and the cost of taking the AP exams (currently $99 each for students in the U.S., U.S. territories, and Canada).


About the author

Jacqueline DeMarco

Jacqueline DeMarco

Jacqueline DeMarco is a freelance writer who specializes in financial topics. Her first job out of college was in the financial industry, and it was there she gained a passion for helping others understand tricky financial topics. Read full bio.



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. We encourage you to evaluate all your federal student aid options before you consider any private loans, including ours. Read our FAQs.

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

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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