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If you have student debt and want to one day buy a home, you may wonder what to focus on first — paying off student loans or buying a house? If you wait until your student loans are paid off to buy a home, you may be renting for a very long time. If, on the other hand, you buy a house before you pay off your student loans, you may be stretching your finances too thin. Which goal should you focus on first?

There’s no one right answer for everyone. Whether you should pay off your student loans or buy a house first will depend on your priorities, time frame, and financial situation. Ideally, you want to work towards both goals at the same time, making progress on your debt while also saving up for a down payment on a home.

Here are some things to consider when deciding whether it’s better to pay off student loans or buy a house.

Reasons to Pay off Your Student Loans Before Buying a House

Depending on your financial situation, it may make sense to pay off your student loans before you buy a house. Here’s a look at some reasons why you might want to prioritize student loan repayment over saving for a down payment.

The Longer You Wait to Pay off Student Debt, the More Interest You’ll Pay

If you want to save money on interest, it’s a good idea to prioritize student loan repayment over buying a home. By paying more than the minimum payment each month, you can reduce the principal balance. This, in turn, will shorten the duration of the loan period — and the interest accrued. Just make sure that your lender puts any extra payments you make towards your principal (and not future payments).

Another way to speed up repayment is to refinance your student loans. Refinancing can fast forward repayment by helping you obtain a lower interest rate, a shorter repayment period, or both. You can refinance private or federal student loans. Just keep in mind that when you refinance federal student loans with a private lender, you forfeit certain federal benefits, such as forbearance and forgiveness programs.


💡 Quick Tip: Ready to refinance your student loan? You could save thousands.

Your Debt-to-Income Ratio Is High

When you apply for a mortgage, lenders will look at your debt-to-income (DTI) ratio, which shows how much of your monthly income goes toward debt repayment each month. The ratio is expressed as a percentage, and mortgage lenders use it to determine how well you manage monthly debts — and if you can afford to repay a loan.

To calculate your current DTI, simply add up all of your monthly debt payments, then divide that number by your monthly gross income (before taxes and deductions). Take that number and multiply by 100. This is your DTI.

Ideally, mortgage lenders like to see a debt-to-income ratio lower than 36%, with no more than 28% of that debt going towards a mortgage or rent payment. While some lenders will allow you to go up to 43% (and sometimes higher), this may not be wise, since it can stress your finances and make you “house poor.”

You Don’t Have Enough Saved for a Substantial Down Payment

A standard rule of thumb is to put at least 20% down on a home’s purchase price. While you may be able to get a conventional mortgage for as little as 3% down, making a smaller down payment on a home purchase generally means paying a higher interest rate on your mortgage. On top of that, you’ll likely need to buy private mortgage insurance (PMI).

Also consider that the more you put down on a home, the more equity you’ll have in your home right away — and the lower your monthly mortgage payment will be.

You Might Move Within the Next Five Years

Renting provides more flexibility than home ownership, as you aren’t necessarily tied down to your property. If you think you may want to relocate in the next five or so years, it may make sense to pay off student loans before buying a house.

A common rule of thumb is that it takes around five to seven years to break even on a house, meaning you have enough equity to recoup that amount of money you put in the house (including closing costs, mortgage payments, and maintenance expenses). That’s why experts typically caution against buying unless you plan to live in the home at least that long.

Reasons to Buy a House Before Paying off Student Loans

In some cases, it makes more sense to buy a home before you pay off student loans. Here are some arguments for putting any extra funds you have towards a down payment on a home over paying down your student debt.

Student Loan Debt Is Not as Bad as Other Types of Debt

Not all debt is created equal. Student loans generally have longer repayment terms and typically feature lower interest rates than many other types of debt, such as credit cards and auto loans. Since your down payment will lower the overall cost of your mortgage, it may be smarter to save up money for a home than to pay off a low-interest student loan.

If you have $12,000 in credit card debt, you would want to make paying that off as quickly as possible your priority, thanks to double-digit interest rates. If you have $12,000 in student loans with a low interest rate, it’s a different story. Paying only the minimum to free up funds to buy a home can be a sensible idea.

Also keep in mind that your student loans may entitle you to a valuable tax deduction — with the student loan interest tax deduction, you may be able to deduct $2,500 or the amount of interest you paid toward your loans, whichever is less.

Recommended: Which Debt to Pay Off First: Student Loan or Credit Card

You Have a Low DTI

If your DTI is 35% or less (meaning a max of 35% of your gross monthly income will go toward your overall monthly debts, including the new mortgage payment), it’s a sign that you can manage home ownership and student loan debt repayment at the same time. With a low DTI, you may be able to comfortably afford your mortgage, monthly student debt payments, and likely still have money available to put into savings and retirement each month.

You Have a Lot in Savings

You’ll need to have access to a sizable amount of cash to purchase a home. In addition to making a down payment, you’ll also need to have funds to cover closing costs and moving expenses. Also keep in mind that when you own a home, you’ll be responsible for all of the home’s maintenance and repair expenses. A general rule is to have1% to 4% of the home’s value set aside for upkeep and repairs.

If you have enough money saved in the bank to cover those costs, you’re in good shape and can likely afford to buy a house before you pay off your student loans.

Buying a Home Is a Top Priority

When deciding whether to buy a house before you pay off student loans, you’ll also want to consider your priorities and personal goals. For example, if you want to have children (or expand your family) in the near future, you may need a larger space. Or, if you’re working at home (or plan to transition to remote work), you might require a home that allows you to set up a dedicated office. Perhaps you want to get a pet, but your rental doesn’t allow them. In some cases, prioritizing a home purchase over paying off student debt may be important in terms of your quality of life.

Options to Consider for Those Trying to Manage Student Debt and Buy Property

If you’ve decided that you can manage paying down student loans while also saving for a home, here are some tips that can help you focus on both goals at the same time.

•   Take an inventory of your debts: A good first step is to write down all of your current debts, including student loans, car loans, credit cards, and any other debt you hold. Make note of the interest rate, remaining balance, and minimum payment for each.

•   Knock down high-interest loans: Next, you may want to funnel any extra money you have towards the debt with the highest interest rate, while continuing to pay the minimum on the rest. Once that debt is paid off, focus on the debt with the next-highest interest rate debt, and so on. Eliminating expensive debt frees up funds that go towards a mortgage payment. It can help improve your DTI, which is helpful when qualifying for a mortgage.

•   Open a dedicated savings account: Consider opening a high-yield savings account specifically for your down payment and home-buying expenses. This will help you track your progress and ensure you won’t spend the money on other things.

Recommended: Student Loan Debt Guide

Saving Strategies

The more you can put down on a home, the less you will need to borrow. A solid down payment can also help you qualify for a lower interest rate on a mortgage and lead to lower monthly payments. These tips can help you reach your down payment savings goals faster.

•   Pay yourself first: Consider setting up an automatic transfer from checking to savings each month to take place right after you get paid. This can help you get used to managing living expenses with what looks like a smaller paycheck, when actually you’re building up your own savings.

•   Take advantage of windfalls: If you receive a lump sum of money, such as a work bonus, gift check, or tax refund, consider funneling it right into your down payment savings account. This will help you meet your down payment goal faster.

•   Reduce expenses: Take a look at where your money is going each month and see if there are any places to cut back. You might decide to cook a few more times a week and spend less on take-out, get rid of a streaming service you rarely watch, or finally cut the cable cord. Anything money you free up can now go into savings.

•   Pick up a side gig: Income from a part-time job or freelance work can be dedicated to savings, helping you reach your goal quicker. You might also consider asking for a raise at your current job or volunteering to work overtime.

💡 Quick Tip: It might be beneficial to look for a refinancing lender that offers extras. SoFi members, for instance, can qualify for rate discounts and have access to financial advisors, networking events, and more — at no extra cost.

How Refinancing Could Potentially Help Prospective Homebuyers

Buying a home and paying off your student loans may seem like competing goals, but that’s not necessarily the case. You can pay down your debt and save for a down payment at the same time by putting more money into savings each month and looking for ways to lower your student loan payments.

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.

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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Federal Family Education Loan Program (FFELP) loans are federally backed loans that were originally funded by private companies. The FFEL Program ended in 2010 to pave the way for Federal Direct Loans, but many borrowers still have them. If you took out federal student loans prior to 2010, you may have a FFELP loan.

These older loans may have a high interest rate and don’t qualify for certain federal student loan benefits and forgiveness programs. As a result, you may want to consider consolidating or refinancing FFELP loans.

Read on to learn how you can find out if you have a FFELP loan and, if you do, what your options are in terms of repayment, forgiveness, consolidation, and refinancing.

Does the Federal Family Education Program Still Exist?

Congress discontinued FFELP loans in 2010 and no new loans have been issued under the program since July 1, 2010. At that time, FFELP was replaced by the Federal Direct Loan Program.

Even though no new FFELP loans are being issued, they are far from paid off. As of June 2023, there was a total of $191 billion in FFELP loans remaining with 8.5 million borrowers. Borrowers of these loans are still responsible for making these payments, lenders are required to service them, and the federal government still insures them.


💡 Quick Tip: Ready to refinance your student loan? You could save thousands.

What Are FFELP Student Loans?

FFEL Program loans are student loans that were issued by commercial lenders but guaranteed by the federal government. That means if a borrower defaulted, the government would pay the lender an interest subsidy to make up for the loss.

The FFEL Program included:

•   Subsidized Federal Stafford Loans

•   Unsubsidized Federal Stafford Loans

•   Federal PLUS Loans (also known as FFEL PLUS Loans)

•   Federal Consolidation Loans (also known as FFEL Consolidation Loans)

The federal government purchased some lenders’ FFELP portfolios during the Great Recession (2007-2009). As a result, some FFEL Program debt is owned by the government. However, the majority of FFELP loans are privately held.

All federal student loans issued now are from the Direct Loan Program, which includes the same types of loans listed above. However, there are big differences in how the program is administered. The federal government itself now draws on its own capital to directly lend to students, while several federal contractors take care of servicing the loans.

Borrowers with FFELP loans might have had different terms and benefits compared with Direct Loans.

Recommended: Private Student Loans vs Federal Student Loans

How Do I Know if I Have FFELP Loans?

If you have federal student loans from prior to July 2010, you probably have FFELP loans.

To find out if you have a FFEL Program loan, simply log in to your studentaid.gov
account. Under the “Loan Breakdown” section, select “View Loans” to see the list of loans you’ve received. If a loan has “FFEL” at the front of its listing, it’s a FFEL Program loan.

Understanding Your FFEL Loan

If you have a FFELP loan, the biggest difference from a Direct Loan is the source of the money — you received it from a private lender instead of the federal government. Within the FFELP, you can have one of these types of loans (which are no longer offered):

•   Subsidized Stafford Loan This is a loan for undergraduate students where interest is covered by the federal government while the student is in school at least half-time, and during grace or deferment periods.

•   Unsubsidized Stafford Loan This is a loan for undergraduate, graduate, and professional degree students where interest is charged during the entire life of the loan.

•   Federal PLUS Loan This is a loan for either parents of dependent undergraduate students or for graduate or professional students. Interest is charged for the entire loan period.

•   Federal Consolidation Loan This is a loan designed for borrowers to combine multiple federal student loans into a single loan with a single payment.

If you’re not sure what type of loan you have, one place to look is the National Student Loan Data System . This database houses everything you need to know about your federal student loans, including your interest rate, balances, and payment plans.

Are FFEL Loans Eligible for Forgiveness?

FFELP loans are eligible for Income-Driven Repayment (IDR) forgiveness. With this plan, your monthly payment is based on your income and family size and after making payments for 20 or 25 years, the remaining loan balance is forgiven. The only exception is FFELP loans for parents, which do not qualify for this repayment plan.

However, FFELP loans are not eligible for:

•   Public Service Loan Forgiveness (PSLF)

•   Pay As You Earn (PAYE)

•   Saving on a Valuable Education (SAVE) — formerly the REPAYE Plan

•   Income-Contingent Repayment (ICR)

To access these programs, you’ll have to consolidate FFELP loans into a federal Direct Consolidation Loan.

Can I Still Consolidate or Refinance My FFEL Loans?

Yes, you can still consolidate or refinance your FFEL loans.

Most types of FFELP loans can be consolidated into a Direct Consolidation Loan. If you choose to consolidate, you may become eligible for additional income-driven repayment plans that offer loan forgiveness after 20 or 25 years of repayment. You can repay a Direct Consolidation Loan using the PAYE, SAVE, or ICR repayment plans.

Consolidating your FFEL loans also opens up access to PSLF, which forgives your remaining loan balance after 120 payments while working in a public service job.

In addition, consolidating multiple federal student loans simplifies and streamlines repayment, since you’ll only have one monthly payment to make.

However, student loan consolidation involves some risks. These include losing previously earned PSLF and repayment plan forgiveness credit. (However, the federal government has waived this penalty for those who consolidate before the end of 2023.)

It’s also important to understand that consolidation most likely won’t save you any money. Your new interest rate will be the weighted average of your federal loans’ interest rates, rounded up to the next one-eighth of the percentage point. While consolidation may extend your repayment term (and lower your payment), an extended repayment term means paying more in interest in the long run.

You also have the option of refinancing your FFELP loans. This involves getting a new student loan with a private lender and using it to pay off your FFELP student loans (you can also fold in any other private or federal student loans you may have).

If you have excellent credit, student loan refinancing may allow you to qualify for a lower interest rate. This is especially true of older federal loans, which were made at higher interest rates. Just keep in mind that refinancing federal student loans with a private lender will cause the loans to lose federal protections, such as forbearance and forgiveness programs.


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

The Takeaway

The Federal Family Education Loan Program, or FFELP, was a loan program in which the U.S. Department of Education worked with private lenders to provide student loans that were backed by the federal government. The program ended on July 1, 2010, but if you have federal student loans from prior to that date, you may have a FFELP loan.

To become eligible for federal programs like PSLF and the new SAVE repayment plan, you’ll need to consolidate your FFEL loan into a Direct Consolidation Loan. If you’re looking to save money on your FFEL loan, you may want to explore refinancing the loan.

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.

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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Divorce is probably not the first word that comes to mind when you think about repaying your student loans.

But for married couples who are splitting up, debt — and who’s responsible for it — can be a very real factor in a divorce settlement. So how is student loan debt divided in divorce?

There isn’t one right answer to this question — it depends on countless factors, often including what state you live in and got married in, and whether you have a prenuptial agreement.

Before we start discussing how divorce impacts your student loans, we want to be clear that nothing in this article should be taken as financial or legal advice. This broad overview of student loan debt responsibility post-divorce doesn’t take your unique circumstances into consideration, which is why we recommend discussing the nitty-gritty details with a financial advisor or attorney.

That being said, let’s look at how divorce might impact student loans in various circumstances.

Addressing Separate Student Loans

When it comes to student loans, divorce can make things complicated. Separate loans are typically a little more straightforward, because if you’re the only name on the loan, you’re likely the only one responsible for repayment.

This is especially likely if the debt is in your name only and you took out the loan before you got married.

When you get a divorce, assets and debts are typically divided in part based on whether or not they are considered to be marital property (and this can vary by state, of course). You are typically responsible for loans taken out in your name before you were married, and likewise for your ex-spouse.

It can get a little bit more complicated if you or your spouse took out a student loan after marriage. These loans may be considered marital property, depending on state laws and the circumstances under which you took out the loans.

When addressing marital property, most states either use community property laws, which implies that property or debt taken on during a marriage is jointly owned, or equitable distribution laws, where the property or debt belongs solely to the spouse who initiated the purchase or debt withdrawal. In states with community property laws, marital assets and debts are split 50-50 between ex-spouses.

Most states have equitable distribution laws, which can make dividing assets or debt a touch more confusing. In these states, each spouse has a claim to an equitable share of marital property, which may not be split 50-50.

Courts have final say over what’s fair and equitable, and to determine that, they may look at a spouse’s earning potential, or the support one spouse provided while the other was in school, such as childcare or even the opportunity costs of putting their own education on hold. Furthermore, if, for example, you or your spouse took out loans that were used to support you both, that could also be a consideration in court.

Approaching Refinanced Loans

Here’s the thing: It’s not possible for a couple to combine their separate student loans into a joint, refinanced loan. However, you can refinance your own loans and have your spouse serve as your cosigner.

When might that happen? If, for example, one member of a couple wants to refinance their loans but doesn’t qualify, their spouse may decide to cosign the refinanced loan in order to help them qualify or secure a better rate.

When couples cosign on their partner’s loans, both spouses are on the hook for the debt. While this may work while a couple is together, it can make things complicated when your ex-spouse is the cosigner of your refinanced loan. This new loan is owned by the couple, and may be considered marital property subject to community property laws or equitable distribution laws.


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

Paying Your Part

In cases where debt is considered marital property, divorcing couples on good terms can decide how to divide student loan debt and have a court sign off on it. However, in some cases, ex-spouses may simply not be able to take charge of dividing things up, and the court can decide how the debt will be divided instead.

At this point, you’re losing the power of a combined income to pay off your loans, so you may need to consider strategies to help the newly single you afford your payments.

Refinance Your Student Loans

First, you may benefit from refinancing your loans to potentially secure a better rate or term. A better interest rate and shorter term might help you pay down your debt faster and could reduce the money you spend on interest over the life of the loan.

If you lengthen the term of your loan, you may be able to lower your monthly payments, which can help if your budget is strapped. However, longer terms typically mean you’ll end up paying more over the life of the loan.

Keep in mind that if you choose to refinance federal student loans with a private lender, you lose access to federal benefits, including income-driven repayment plans (discussed below) and student loan forgiveness.


💡 Quick Tip: When rates are low, refinancing student loans could make a lot of sense. How much could you save? Find out using our student loan refi calculator.

Use an Income-Driven Repayment Plan

Federal loans have income-driven repayment options that can also help you lower your monthly payments. These income-driven repayment plans have you pay a conservative percentage of your discretionary income, generally 10% to 20%, toward your student loans each month. And if you pay your loans off on one of the income-driven repayment plans for a period of 20 or 25 years, your remaining balance may be forgiven (though that forgiven balance will be taxed as income).

Remove Your Student Loan Cosigner, if Applicable

If you refinanced your student loans when you were married and your spouse was your cosigner, you could also consider refinancing a second time — as an individual. This could allow you to not only qualify for new loan terms or rates, but also ensure that your ex’s name is no longer tied to your student debt.

Staying on Top of Your Debt

Getting a divorce is rough, and having to deal with student debt at the same time can feel like adding insult to injury. The paperwork, lawyers, and courts involved with a divorce can make it easy for things to get lost in the shuffle. Trying to stay on top of your student loans and making regular payments is, of course, an important priority.

Whether you’re interested in refinancing in order to lower your payments and make some room in your budget for divorce fees, or you want to refinance without your spouse as a cosigner, SoFi can help. With just a single application, you can compare rates from top lenders in just a few minutes.

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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Sometimes, student loan debt can start to feel like it’s slowing you down. Maybe the interest rate is too high, you’re not happy with your loan terms, or you’re frustrated with the lender’s customer service. If so, you have the right to look for a new lender and transfer your debt to a different company.

However, you can’t simply ask a new lender to take on your debt with the same terms. To transfer your student loan, you generally need to take out a new loan with a new lender or servicer. The process of switching will be different depending on whether your student loans are private or federal, and may involve consolidating the loan or refinancing.

If you’re thinking about a loan transfer, keep in mind that there’s no guarantee you’ll end up in a more favorable situation just by switching lenders. Here’s what you need to know about student loan transfers.

How Do I Transfer Student Loans to Another Private Lender?

If you have private student loans, the main way to transfer your debt to another lender is to refinance. This involves taking out a new loan with a different lender and using it to pay off your current student loan(s). Moving forward, you only make payments on your new loan to your new lender.

If you have multiple private student loans, refinancing can simplify repayment by giving you only one monthly payment to manage. And, if your financial picture has improved since you took out your original private student loan(s), you may be able to qualify for a lower interest rate. Another perk of refinancing is the ability to lengthen your repayment timeline to reduce your monthly payment amount. Keep in mind, though, that a longer repayment will generally end up costing you more in the long run.

You’ll need to meet certain criteria to be eligible for private student loan transfer via refinancing. Most lenders have a minimum income threshold as well as a minimum credit score (often in the upper 600s). If you don’t meet the income or credit requirements, you may be able to qualify by adding a cosigner.

Many lenders offer prequalification, which lets you see what type of rates and terms you may be able to qualify for without impacting your credit score. To find the loan with the best rate, it can be a good idea to shop around and compare lenders through prequalifying. Once you find a lender you want to work with, you’ll need to officially apply for the student loan refinance.


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

Can I Transfer My Sallie Mae Loans to Another Lender?

Currently, Sallie Mae only offers private student loans. Prior to 2014, however, the lender serviced federal student loans. If you want to refinance a Sallie Mae loan you took out before 2014, you’ll need to check whether it’s federal or private before moving forward.

If you took out a Sallie Mae loan after 2014, it’s a private student loan, and you can refinance the loan with another private lender. This might be a good idea if you can qualify for a lower interest rate.

What’s the Difference between a Lender and a Loan Servicer?

While the terms lender and loan servicer are often used interchangeably, they are not the same thing. Here’s a look at how they differ.

Student Loan Lender

A lender is an institution or company that originates and funds the student loan. In other words, they’re the one lending you the money. For example, if you apply for a federal student loan, the federal government is your lender. If you apply for a private student loan, you can choose between a number of private lenders.

A Student Loan Servicer

A federal student loan servicer is the middleman between you and the federal government (the lender). Servicers collect your student loan bills and keep track of whether you pay them on time. They will help you if you’re having trouble with your repayment plan or need to change your address or other personal information. You do not get to pick your servicer.

During the course of your federal student loan, your servicer might change a few times. For example, if you had a loan with Great Lakes, it was likely transferred to Nelnet some time between March 2022 and June 2023. You’ll typically get notified of a student loan transfer two two weeks prior to your transfer date.

If you have a federal student loan and you’re not sure who your servicer is, you can log in to studentaid.gov to find out.

Can I Change My Student Loan Servicer?

You can’t change your federal student loan servicer directly. However, if you’re willing to do some legwork, there are two main ways to move your federal student debt to a new servicer or lender.

If you want to keep your federal loan status but switch to a different loan servicer, you can transfer your loans through consolidation. If your main objective is to save on interest, you may want to look into refinancing your student loans with a private lender. Read below to learn more about each scenario.

What about Consolidating My Student Loans?

One way to switch loan servicers is to consolidate your federal student loan(s). This allows you to transfer the debt to a different servicer but keep your federal student loan status, since the lender will still be the federal government.

The consolidation process lets you combine several federal student loans into a single, easier-to-manage Direct Consolidation Loan. While it does not reduce your interest rate, it can lower your payment by extending the term. The downside is that the extended term will mean you pay more in interest over time.

Since not all federal loans have the same interest rate, the interest rate on a new Direct Consolidation Loan will be a weighted average based on your current loan amounts and interest rates. Any unpaid interest is added to your principal balance. The combined amount will be your new loan’s principal balance. You’ll then pay interest on the new principal balance.

Consolidation can be a good option if you are unhappy with your servicer or have several servicers and want to simplify your student debt by having only one payment.

If you have Federal Family Education Program or parent PLUS loans, you need to consolidate to be eligible for income-driven repayment, public service loan forgiveness, and other relief programs.

You can complete a consolidation loan application at studentaid.gov.

What About Student Loan Refinancing?

Another way to change your federal student loan servicer is to refinance your federal student loans with a private lender. If you also have private student loans, you can refinance them together with federal loans, giving you a single loan payment each month.

Generally, refinancing federal student loans only makes sense if you can qualify for a lower interest rate. If you have higher-interest federal student loans, such as graduate PLUS loans or Direct Unsubsidized Loans, you may be able to get a lower rate by refinancing. To qualify for the best rates on a private student refinance, you generally need to have strong financials (or can recruit a cosigner who does).

It’s important to note that refinancing federal student loans with a private lender means losing federal protections, such as income-driven repayment plans, federal deferment and forbearance programs, and loan forgiveness options like Public Service Loan Forgiveness (PSLF).

If you’re interested in refinancing your federal loans, it’s a good idea to review offers from multiple lenders to find the best deal. Many private lenders will allow you to prequalify via a soft credit check so you can see your likely new interest rate without negatively impacting your credit score.


💡 Quick Tip: It might be beneficial to look for a refinancing lender that offers extras. SoFi members, for instance, can qualify for rate discounts and have access to financial advisors, networking events, and more — at no extra cost.

What About Transferring My Student Loan Balance to a Credit Card?

You generally can’t pay federal student loans with a credit card. If you have private loans, however, another option for student loan transfer is to move the balance onto a credit card and pay your monthly bills there. Some credit card issuers allow student transfers, but not all.

Generally speaking, this tactic only makes sense if you can qualify for a card with a 0% introductory rate and can pay off the entire balance before that promotional period expires (often 15-21 months). Otherwise, you could be left paying even more in interest than you would with the original loan.

To see if you can manage this repayment schedule, simply divide your loan balance by the number of months you would need to pay it off before interest applies. Also check to make sure the credit card offers a high enough credit limit to accommodate your loan, and find out if there are any transfer fees.

If you decide it’s a good deal and are confident you can make it work, you would apply for the credit card and, once approved, give your credit card account details to your loan servicer. Your credit card issuer would then pay off your private student loan debt and move the balance to your credit card account. Moving forward, you only make payments to the credit card issuer.

Is It Possible to Transfer Student Loans From Parent to Student?

The federal government does not offer a way to transfer Parent PLUS loans to the child. However, if you’re looking to have your Parent PLUS loans transferred to your child, refinancing the loans with a private lender allows you to do that.

To make this type of loan transfer, you’ll first need to identify Parent PLUS refinance lenders that allow loan transfers. After that, your child may want to prequalify with a few of these lenders to see where they can get the best rate.

If your child meets the lender’s qualifications on their own, you can fully transfer the loan to them. If they don’t, you can serve as a cosigner on the refinanced loan and work with them to meet the lender’s cosigner release requirements. Many lenders allow cosigner release after a set number of successful payments.

The Takeaway

If you’re interested in transferring your student loans to a new servicer or lender, you have some options. If you have federal student loans, you can consolidate your loans to get a different servicer. If you have federal, private, or a mix of both types of student loans, another option for loan transfer is to refinance your loans with a private lender.

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.

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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While a college education can help prepare students for life, taking advantage of the professional network college offers can help launch your career. Whether trying to land a summer internship, get that first job out of college, or apply to graduate school, a letter of recommendation from a professor can be helpful.

Although requesting this is common practice, it can still feel nerve wracking to broach the subject. Keep reading to learn helpful tips to receive a glowing letter of recommendation from a professor.

1. Asking a Professor Who Knows You and Your Work

There are several factors to consider when deciding who you’ll ask for a letter of recommendation. Taking stock of which professors actually know your interests and goals, not just your name, is something to consider right away.

A strong letter of recommendation can involve praising a student’s personal character and highlighting their goals and ambitions. For this reason, choosing a professor you’ve personally interacted with, whether through class discussions or during office hours, could be beneficial.

If you’ve taken several courses with a professor, they may be able to showcase how you’ve grown throughout your time in college.

Since a professor will also be attesting to your academic merit, it can be helpful to start by identifying who has seen samples of your strongest work throughout college. For example, a personal essay or in-person presentation that earned a strong grade might indicate that a professor valued your work.

2. Choosing a Professor Who Specializes in Your Field

Although a letter of recommendation is foremost about your own skills and attributes, also of benefit can be a professor’s own credentials within an industry or academic field you are targeting.

A letter of recommendation from an esteemed and notable professor could help you stand out in a competitive group of applicants.

Many professors have built up extensive networks from academic conferences and working with faculty at other universities and in the private sector.

Though they may not have contacts at the company, organization, or university you’re applying to, their advice and connections in a specific sector or academic discipline could prove valuable as you begin your job search. As academic professionals, they may have insight on the return on education for different graduate degrees and careers.

Often, jobs or graduate school applications require submitting more than one letter of recommendation. Choosing a combination of references who can highlight your strengths and character and carry respect in your desired field could further enhance your candidacy.

3. Asking in Person, if Possible

Given the importance of the request, asking in person can show that you’re serious about your future and respectful of a professor’s time.

For students currently enrolled in school, finding time to ask a professor for a letter of recommendation may be as simple as making an appointment during their office hours.

If you’re studying abroad or have already graduated, reaching out via email may be your only feasible option for starting the conversation. To further demonstrate your commitment, you might ask to arrange a phone or video call.

4. Making a Personalized and Specific Request

The average college has a student to faculty ratio of 14-to-1, so it’s not uncommon for professors to have several students ask for letters of recommendation each year. Still, that doesn’t mean every request is guaranteed a response or agreement to receive a recommendation.

Out of consideration for a professor’s busy schedule, making a request that’s tailored to them and clearly outlines what you need may increase your chances of success.

To personalize the request, consider reminding them which of their courses you took, a key project or assignment, and how they influenced your academic and career goals. Next, providing a concise explanation of the position or program you’re applying for and what it means to you is an opportunity to convey your own professionalism and passion.

Since writing a letter of recommendation is a favor, sending a courteous request that allows a professor to opt out could help avoid a lukewarm reference. A well-crafted request makes it easy for the professor to quickly decide if they have enough knowledge about you and the position to write a letter of recommendation.

5. Providing Information to Write the Recommendation

Even if you have a strong relationship with a professor, the quality of the recommendation can benefit from supplemental information. For instance, providing a resume, college transcripts, personal statement, and a sample of work can help jog their memory and give them a blueprint of your experience and accomplishments to draw from.

It can be helpful to include a job description or, for a graduate program, admissions information. This could help a professor connect your academic knowledge and experience to the job or program’s desired qualifications and skills.

This is also the time to provide information and guidance for submitting a letter of recommendation. Some typical considerations to include are where to send the letter, any relevant deadlines, and to whom it should be addressed.

6. Giving Plenty of Notice

Asking your professor several weeks, if not months, before the recommendation is due can convey respect and appreciation for their time and effort and help ensure submission deadlines are met. Also, it can give you time to regroup and consider other options if a professor or two declines.

7. Keeping Them Updated Though the Process

Professors typically have busy schedules, so probably won’t keep thinking about your job search or grad school application after the letter of recommendation has been written and sent. Letting them know when you have interviews and other updates can help them be prepared should they receive a call from an employer or admissions office.

8. Saying Thanks and Staying in Touch

Besides creating good karma, thanking a professor is another opportunity to foster a good relationship with them. They might become a mentor to you, especially if you’re pursuing a job or education in the same field.

You might apply to another job or a graduate program in the not-so-distant future and want to ask for another recommendation from the same professor.

Instead of starting from scratch each time you apply for a new job, you may want to periodically update academic and professional references along your career path and as your goals change.

Not only can this make for an easier request and stronger recommendation next time around, it may lead to more professional opportunities and meaningful relationships.

The Takeaway

Keeping up with former professors can be a pleasant way to reminisce about college years. Another not-so-pleasant reminder can be student loans.

Like many students, you may have taken out loans to pay for college and/or graduate school. Refinancing your student loans may be an option to help with repayment.

Keep in mind, however, refinancing federal student loans with a private loan means the borrower forfeits all federal loan benefits, such as income-driven repayment plans, loan forgiveness programs, access to deferment or forbearance, and other forms of federal student loan debt relief.

On the flip side, refinancing federal student loans might offer lower interest rates or a shorter term.

With SoFi, student loan refinancing could reduce the overall cost of your student loans and get you out of debt sooner when refinancing to a shorter term. Applying online is free and can be done in a matter of minutes.

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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