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Struggling to make your federal student loan payments? An income-based repayment plan may ease the burden. Previously, two of the primary income-based plans were Pay As You Earn (PAYE) and Revised Pay As You Earn (REPAYE). But the former is no longer taking new enrollees, and the latter has been replaced by a new program — the SAVE Plan. In all cases, the plans adjust your monthly loan payments based on your income and family size. In this article we’ll look at how SAVE compares to the old REPAYE, as well as to the PAYE Program.

PAYE vs REPAYE: An Overview

The former PAYE and REPAYE federal student loan payment plans were similar, but differed in a few key areas. Both plans had income-based repayment terms generally set at 10% of a borrower’s discretionary income.

Some borrowers didn’t qualify for PAYE because the initial enrollment step required partial financial hardship as determined by your annual discretionary income and family size. You couldn’t enroll into PAYE if your federal student loan monthly payment would be lower under the Standard Repayment Plan. You also cannot enroll into PAYE after June 30, 2024; however, current PAYE enrollees can remain on the plan after that date.

The 2023 debt ceiling bill officially ended the three-year Covid-19 forbearance, requiring federal student loan interest accrual to resume on Sept. 1, 2023, and payments to resume in October 2023 under any federal student loan repayment plan.

Here are the key differences between the former PAYE and REPAYE plans:

•   PAYE required partial financial hardship to sign up for first-time enrollment

•   No new PAYE enrollees are being accepted, but borrowers already enrolled in PAYE can continue repaying under that plan after July 1, 2024

•   REPAYE did not require low-income, moderate-income, or partial financial hardship to enroll

•   REPAYE no longer exists as a federal student loan repayment plan

SAVE vs REPAYE

Saving on a Valuable Education (SAVE) Plan is the federal income-driven repayment (IDR) plan that replaced REPAYE in July 2023. If you were enrolled on the REPAYE Plan at that time, you’ve been automatically enrolled into the SAVE Plan.

The SAVE Plan is essentially a major upgrade to the former REPAYE Plan, as shown in the table below:

SAVE vs PAYE

Both SAVE and PAYE are federal income-driven repayment plans not available to private student loan borrowers. New enrollments in PAYE ended in July 2024.

The below table highlights the key differences between SAVE and PAYE:

Depending on your original principal balance amount, student loan forgiveness on the SAVE Plan may occur after 10 to 25 years of monthly qualifying payments beginning in July 2024.

If you’re a federal student loan borrower working toward Public Service Loan Forgiveness, you may qualify for forgiveness of any remaining loan balance after 10 years of qualifying payments.

Recommended: Student Loan Forgiveness Programs


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

What Is the Interest Subsidy?

The SAVE Plan has a permanent interest subsidy, whereas the PAYE Plan offers a temporary interest subsidy to eligible borrowers.

If you’re on the SAVE Plan, 100% of your unpaid accrued interest is not charged if your monthly payment is less than the interest accruing. The effect of this permanent interest subsidy is that your loan balance won’t grow over time if your SAVE Plan monthly payment is less than the interest accruing.

Under the PAYE Plan, the U.S. Department of Education may provide an interest subsidy if your monthly payment is less than the interest accruing. This PAYE Plan interest subsidy is discontinued after the first three years of repayment and only applies to Direct Subsidized Loans and the subsidized portion of Direct Consolidation Loans.

Some borrowers on the PAYE Plan may see their loan balances grow over time. This can happen if you’re not covered by an interest subsidy when making a monthly payment that’s insufficient to pay the accrued interest. (Effective July 1, 2023, your unpaid accrued interest is not capitalized if you switch from PAYE to another repayment plan, fail to recertify your income, or no longer have a partial financial hardship.)

Recommended: Direct vs. Indirect Student Loans: What’s the Difference?

Answers to Common Questions

How do I apply for a federal IDR plan?

You only need to submit one application for any federal income-driven repayment plan and will need to supply financial information. It will take about 10 minutes. The Federal Student Aid Office also will recommend a repayment plan based on your input. Remember that private student loans are not eligible for federal IDR plans.

I want to apply for PAYE. How is partial financial hardship defined?

Unfortunately, there’s no option to apply for PAYE after July 1, 2024.

What if I’m in PAYE and no longer demonstrate hardship?

Your loan payments will stop being based on your income. Instead, your monthly payment will be based on the amount you would pay under the 10-year Standard Repayment Plan. Your maximum required payment in PAYE will never be higher than the 10-year standard payment amount.

What if I forget to recertify my income and family size?

If you’re on the SAVE Plan, failing to recertify your income and family size may switch you to an alternative repayment plan with a larger monthly payment.

If you’re on the PAYE Plan, failing to recertify by the annual deadline may give you a larger monthly payment resembling what you would pay under the Standard Repayment Plan.

Auto-recertification is available beginning in July 2024 if you agree to securely share your tax information with the U.S. Department of Education.

Does a Parent PLUS Loan qualify for SAVE?

No. Federal Parent PLUS Loans are not eligible for the SAVE plan.

Recommended: Types of Federal Student Loans

Income-Driven Repayment Alternatives

One of the alternatives to federal income-driven repayment is student loan refinancing. You can refinance your student loans — private and federal — with a private lender and potentially qualify for a lower interest rate. (Note: You may pay more interest over the life of the loan if you refinance with an extended term.)

The federal Direct Consolidation Loan program combines federal student loans into a single federal loan, but the interest rate is the weighted average of the original loans’ rates rounded up to the nearest eighth of a percentage point, which means the borrower usually does not save any money. Lengthening the loan term can decrease the monthly payment, but that means you may spend more on total interest.

Federal IDR plans like SAVE offer federal protections and benefits, such as access to the Public Service Loan Forgiveness program. Any loans you refinance with a private lender will not be eligible for PSLF, Teacher Loan Forgiveness, or federal IDR plans. A student loan refinancing calculator can help you determine whether student loan refinancing is right for you.

💡 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 SAVE Plan is generally the most affordable federal student loan repayment plan. It replaced the former REPAYE Plan and offers a permanent interest subsidy, among other perks that you couldn’t get with PAYE.

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

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

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While the National Retail Federation is expecting record spending this Halloween of nearly $103 per person, revelers might be planning to focus more on Halloween savings this year. Inflation is scarier than ghosts.

Luckily, creativity is one of the hallmarks of this spooky season, and savings are easy to achieve. Here are 31 ways to do it.

Get Creative with Costumes

Costumes may be the best part of Halloween. You can “be” anyone or anything for one night. But costumes don’t have to be expensive. In fact, with a little creativity you can have a great costume for almost nothing.

1. Rent, Don’t Buy

Sites like Halloweencostumes.com and Costume.com rent theater-level costume styles for a fraction of the purchase price.


💡 Quick Tip: When you have questions about what you can and can’t afford, a spending tracker app can show you the answer. With no guilt trip or hourly fee.

2. Make Your Own

Extend Halloween fun by making your own costume. The internet is full of innovative ideas — homemade costumes that turn the wearer into jellyfish or fairies, or that create illusions, like someone sitting on a flying carpet.

3. Hit the Thrift Store

Thrift stores and surplus stores can not only provide the materials for a costume, they can also give you ideas: buy a wedding dress and become a ghostly bride or purchase a lab coat and become a mad scientist. You also might spot great savings on fall fashions while you’re at it.

4. Swap Costumes with Friends

Swapping costumes with friends is a great way to save money. And your outfit from last year may be someone’s dream costume for this Halloween.

5. Look For Sales

You can shop online at Halloween retailers and regular discount stores that sell costumes. Some may have sales to boost early purchases, or to clear out inventory as Halloween gets closer.

Decorate on a Budget

You would think pumpkins would be a super cheap decoration, but that’s not always the case. There are, however, some easy ways to haunt your house magnificently and take advantage of Halloween savings at the same time.

6. Become a Prop Master

There are lots of videos online explaining how to make everything from real-looking spider webs to authentic tombstones and creepy candles. Want to be eco-friendly? You can substitute toxic chemicals and unsustainable materials like Styrofoam with more sustainable materials.

7. Repurpose Last Year’s Decorations

Rework the decorations you used last year to create a whole new look. Give that mummy a hat, or have the witch you made last year hide behind a bush this time. If you’re crafty, a bit of paint or touch of glue can give your decor a whole new look.

8. Hit Garage Sales

Check out local garage sales and estate sales for decorations other people are ready to discard. You can often find some cool vintage treasures!

9. Trade Decorations with Friends

Tired of your old skeleton? You can switch it for a pal’s ghoul or light-up graveyard. You can offer up your old decorations on social media or just have everyone gather and trade like Halloween market.

10. Try the Discount Stores

Super discount stores often have great decorations for almost nothing. Dollar stores, surplus stores, Spirit Halloween stores, and others can provide garlands, Jack o’ Lanterns, skeletons — you name it.

11. Scan Thrift Stores

A thrift store is like a treasure hunt inside a shopping trip. You never know what you’ll find at a thrift shop but you’re sure to find inspiration for decorations!

12. Don’t Forget the Lighting

Lighting changes everything. Put a green or purple bulb in a lamp and a basic room is automatically made spooky, especially if you’re lighting something from below.

13. Make Creepy Shadows

With nothing more than some paper and scissors you can make scary silhouettes for the windows: a werewolf looking in, or a dagger-wielding murderer, for example. Put in front of a flashlight, they can even create some large, scary shadows for a spooky wall.

14. Scary Music Makes Ambiance

The most ordinary scene can feel terrifying when you add scary music. You can look online for options from classical pieces like Dance Macabre to soundtracks from horror movies complete with howling winds, distant church bells, and crows calling. There are even spooky tracks available on streaming services like Spotify.

15. Look for Pumpkin Deals

Most Jack O’ Lantern pumpkins cost less than $10, but if you need more than just one, the pumpkin costs can mount quickly. Some retailers have special offers on pumpkins that can really squash your spending. One way to potentially spot good deals online is to follow retailers on social media.

16. Grow Your Own

It’s too late this year, but you can grow your own pumpkins next year. You may be able to grow other decorations to use for fall, like corn husks and twisted tree branches that can later be made into haunted forests and witches’ brooms.

17. Shop in November

Everything Halloween related goes on deep discount the day after Halloween to make room for the upcoming holidays. Many people take advantage of these closeout sales to save money while also stocking up on decor for the following year. Don’t forget about websites — there are often good deals to be found online.


💡 Quick Tip: Income, expenses, and life circumstances can change. Consider reviewing your budget a few times a year and making any adjustments if needed.

Low-Cost Ways to Celebrate Halloween

Haunted houses and ghost tours can cost as much as $50 per person, but there are a lot of ways to celebrate Halloween without spending a scary amount of money. Try hosting your own party, where you can save on food by shopping the sales, using coupons, and having potlucks.

18. Look for Coupons

Coupon sites offer discounts on haunted houses and other spooky activities. Just make sure you read the fine print. Some coupons may require you to visit during the week or might only be valid for specific shows.

19. Show a Scary Movie

Hold a movie marathon where your friends and family create the lineup by bringing their favorite scary films. Or tune in the Halloween classics on television. Serve popcorn and inexpensive Halloween candy. And if someone has a projector, you can show it outside and make it that much spookier.

20. Host a Costume Contest

Consider inviting the kids to dress up and compete to create the scariest, funniest, and even most creative costumes using items they already have at home. The prizes don’t need to be expensive, just something from a dollar store.

21. Carve Jack-O’-Lanterns

Have friends bring their own pumpkins and have a jack-o’-lantern carving party. You can even roast the seeds and serve them as a snack.

22. Host a Scary Makeup Party

Have a get-together where you paint your faces with inexpensive makeup to look like werewolves, vampires, and banshees. Watch some online tutorials for inspiration as you get into the Halloween spirit.

23. Tell Ghost Stories

This is a great activity to do in the dark, maybe even around a fire with some s’mores. Have everyone come with a ghost story to share.

24. Have a Seance

Also great to do in the dark near a glowing fire: Use a Ouija board or other tools to speak to the departed. It’s extra fun if one or two people hide out and make ghost noises.

25. Have a Haunted House

You needn’t put on a big production. Simple things can bring a lot of spooky fun like hanging old pictures and telling ghost stories about them while leading participants around darkened rooms. Play scary recordings and have someone hiding behind a few corners to jump out.

26. Check Out Local Haunts

Do you have a house, an old church or another place in town that’s known to be haunted? How about a neighborhood that really goes to town on the decorations? If so, Halloween is the perfect night to go visit.

27. Check Out Local Free Events

Look for local churches, malls, or schools that are putting on free Halloween parties or fall festivals for the community. Consider it ready-made fun.

Save on Treats

Halloween just isn’t Halloween without the candy. But you don’t have to spend a fortune to keep you and your trick-or-treaters happy.

28. Buy in Bulk

Get giant bags of candy from club stores like Costco or Sam’s Club. They can provide you with enough candy for the whole neighborhood — and a party at home.

29. Visit Low-Cost Retailers

Low-cost retailers like Walmart and Target often have special large bags of candy that may be on display in the holiday aisle rather than the regular candy aisle. If you can’t find it, ask for help.

30. Use Coupons

You can look for retailer coupons that give you a few dollars off your candy purchase, or even offer a buy one get one free deal.

31. Focus on the Fun

On Halloween, people are ready to be tricked, to be scared, and to believe the illusions that give them a little thrill of mystery. Instead of worrying about impressing others, focus on having good experiences and creating lasting memories.

The Takeaway

Halloween is about the kind of fear that gives you goosebumps, not sleepless nights. With today’s inflation, and a need to stretch dollars further than before, it might be a lot less scary, in a good way, to focus on your savings goals this year.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

Photo credit: iStock/Talaj

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

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

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

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While on the road to repayment, there will likely be instances when you need to know your student loan account number (like if you want to change repayment plans or refinance). But you probably haven’t committed this number to memory. In fact, you might not even know how to find it.

If you need your student loan account number but don’t know how to get it, don’t worry. Read on to learn what a student loan account number is, why you need it, and how to find it.

What Is a Student Loan Account Number?

Your student loan account number is a unique 10-digit number that is given to you by your student loan provider and is used for identifying your federal student loan.

Students can use their student loan account number to look up their payments and see how much of their balance is left. This number is also used to verify a student’s identity when they are using services offered by the loan provider, such as mobile banking or trying to obtain previous statements.

Some financial institutions and banks may ask you for your student loan account number before allowing you to borrow money or open a new credit card. You’ll also need to know this number if you are considering refinancing those loans.

In addition, your student loan account number is used for tax purposes in order to verify that the student loan on a tax return is yours.

Students with private loans won’t have a federal student loan identification number associated with those loans. Instead, you’ll need to contact the lender directly in order to get account information. This includes any private student loans that were originally federal ones but were refinanced into a private loan, since those balances would now show in government records as $0.00.


💡 Quick Tip: Enjoy no hidden fees and special member benefits when you refinance student loans with SoFi.

How to Find Your Student Loan Account Number

The easiest place to find your student loan account number is on the monthly student loan statements sent by your loan provider. You should be able to find it on the upper right or left corner near your name, or somewhere in that vicinity. You can also check your e-mail account if you’re receiving your statements by e-mail.

If you don’t have access to any of your monthly statements, you can log into the Federal Student Aid website using your FSA (Federal Student Aid) ID to see your loan details. This will allow you to see your student loan account number, along with additional information about your loans.

Don’t have an FSA ID? Not to worry.

More About the FSA ID

The FSA ID replaced the Federal Student PIN in 2015, so students who haven’t taken out new student loans or haven’t logged into the Federal Student Aid website since 2015 might not have an FSA ID yet.

Students who don’t have an FSA ID can create one by visiting the who don’t have an FSA ID can create one by visiting the . Once you sign up for an FSA ID, the federal government will verify your information with the Social Security Administration. Once your information is verified, you will be able to use your FSA ID to obtain information about your federal student loans.

The site, managed by the U.S. Department of Education, can provide a convenient way to get a full picture of all your federal loans, including:

•   How many federal student loans you have

•   Their loan types

•   The original balance on each loan

•   Current loan balances

•   Interest rates on loans

•   Whether any loans are in default

•   Loan service provider’s names

•   Contact information of the loan service providers

Recommended: How Much Do I Owe in Student Loans?

Identifying Lenders

Federal student loans aren’t directly administered by the government. While the government is the lender, these loans are managed by a variety of loan servicers that take on administrative tasks such as sending bills to borrowers, creating repayment plans, and consolidating loans.

It’s important to know which servicers are overseeing your loans so you know where to send payments and who to reach out to if you have questions or need to discuss an alternative payment plan.

The U.S. Department of Education assigns loan to these companies:

•   Edfinancial : 1-855-337-6884

•   MOHELA : 1-888-866-4352

•   Nelnet : 1-888-486-4722

•   Aidvantage : 1-800-722-1300

•   ECSI : 1-866-313-3797

•   Default Resolution Group : 1-800-621-3115

As mentioned, you can find information about which entities are servicing your federal loans when logged on to StudentAid.gov. Another way to confirm a loan servicer is to call the Federal Student Aid Information Center (FSAIC)  at 1-800-433-3243.

As far as private student loans go, the lender is typically a bank, online lender, or other financial institution. Contact information should be available on the bills and other information sent to you. This private student loans guide can give you more information about how these loans work.

If these documents have been misplaced, the private lender’s information can typically be found on your credit reports. You can request a free credit report from each of the three reporting agencies — Equifax, Experian, and TransUnion — by visiting AnnualCreditReport.com. Through the end of 2023, you can receive a free copy of your reports weekly.

Finally another way to track down your private student loan lenders is by contacting your college’s financial aid office.

Paying Back Student Loan Debt

With federal student loans, there are multiple payment plans available:

•   Standard repayment plan: This is the default repayment plan, which lasts 10 years. Borrowers will typically pay less interest over time on the standard plan versus other repayment plans. However, it may not be a good choice if you’re interested in getting your loans discharged through Public Service Loan Forgiveness (PSLF).

•   Graduated repayment plan: With this plan, payments start low and increase every two years. This can help students who don’t earn a lot now but expect their income to increase. However, you’ll pay more interest over time with this plan than if you stuck with the standard repayment plan.

•   Extended repayment plan: Payments can be made during a period of up to 25 years. This can help lower monthly payment amounts, but students will pay back more interest over the life of the loan than those who use the standard or graduated repayment plans.

•   Income-driven repayment plan (IDR): There are four different IDR plans, which cap student loan payments at a percentage of the borrower’s income. These plans can be a good choice for borrowers who are seeking loan forgiveness, but they will typically pay more interest overall than under the standard plan.

To pay off student loans more quickly, one option is to put extra money toward student loans each month through larger or additional payments. By paying more toward the principal balance, you won’t just pay off your loan faster. You’ll also reduce the total amount of interest paid over the life of the loan, saving you money in the long run. It’s a good idea to contact the lender or loan servicer to ensure that any extra payments are applied to the principal as intended.

Alternatively, you could pursue certain loan forgiveness programs, such as PSLF or Teacher Loan Forgiveness.

Recommended: 7 Tips to Lower Your Student Loan Payments

Refinancing Student Loans – Pros and Cons

Another option to consider is to refinancing student loans. There are pros and cons to that strategy you’ll want to consider.

Advantages of refinancing student loans include the following:

•   Loans can be combined into one single loan and payment, which can be easier to manage.

•   You may get a lower interest rate. If you have good credit and a solid income, you may qualify for a better rate, which could help reduce what you pay over the life of the loan. You can see what you might save by using a student loan refinancing calculator.

•   Some private lenders, including SoFi, will consolidate federal and private student loans and refinance them into one loan.

•   The term length can be adjusted. A longer repayment term can help to lower the monthly payment (though you may pay more interest over the life of the loan if you refinance with an extended term), while a shorter one can help to reduce the total amount of interest paid back over the life of the loan.

Disadvantages of refinancing include:

•   Refinancing federal student loans with a private lender means that borrowers will lose access to benefits associated with federal student loans, including income-driven repayment options and loan forgiveness programs.

•   Other federal protections that will no longer apply, including deferment and forbearance, which allow payments to be temporarily reduced or paused.

•   Most federal student loans have a six-month grace period, during which you don’t have to make any loan payments. If you refinance your loan soon after graduation, you might lose out on that benefit if your private lender doesn’t offer a grace period.

The Takeaway

It’s important to know your student loan account number, which can be found on your federal loan statements or online.

This 10-digit number can be used to access loan information, use other lender services and apps, and help you figure out a payment plan.

You may also need your student loan account number when applying for a credit card or other loan, and if you decide to refinance your student 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.

If you borrow a student loan with a cosigner, you may want to officially remove them from the loan by applying for a cosigner release. The specific requirements for this can vary by lender but may include things like a minimum number of on-time monthly payments and a review of your credit history.

Borrowers will likely be required to file a formal application with their lender in order to release their cosigner from a student loan. Continue reading for a high-level rundown of what the process of cosigner release can look like and what other options might exist if a cosigner release is not available.

What Is a Cosigner?

The financial aid process typically begins with families filling out the Free Application for Federal Student Aid (FAFSA®) to see how much aid they’ll receive . Direct Subsidized and Unsubsidized federal loans don’t need a cosigner, but they don’t always cover the whole cost of your education. If you’re unable to get a student loan yourself, a cosigner — often a parent, relative, or close family friend — may be able to help secure funding.

Cosigners are just as responsible as the primary borrower to repay the loan. If the primary borrower doesn’t make a payment on time, the cosigner is legally required to make the payment. Late or missed payments can affect the credit score of both the primary borrower and the cosigner. If a debt goes into default and the lender hires a collection agency, that agency can pursue the cosigner to collect the debt.

Cosigners may choose to help their child or family member take out a loan when they are in college, but once the student graduates and gets a job, they may decide it’s time for them to take full responsibility for the loan.


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

What Is a Cosigner Release, and How Do You Qualify?

A cosigner release is the process of removing a cosigner from a loan. Depending on the loan’s terms, the cosigner may be removed from the loan with a cosigner release after the student has graduated and met certain requirements as outlined by the lender. Here’s a list of the typical requirements that a primary borrower must have in order to remove a cosigner from their loan:

1. Minimum full monthly payments:

Typically, the primary borrower will have to show that they’ve made one to two years’ worth of full monthly payments, depending on the lender. Full payments include principal and interest rate payments, and they must be made on time.

2. Satisfactory credit:

The lender will generally check the primary borrower’s credit to make sure they can qualify for the loan on their own and meet minimum credit requirements. For example, they’ll be looking to make sure that the borrower doesn’t have any loans in default and that they have a good consumer credit report.

3. Employment:

Lenders may ask for proof of employment and determine whether a primary borrower is meeting minimum income requirements. Borrowers may be asked to prove income with recent paystubs, W-2s, or the borrower’s most recent tax return.

Depending on your lender, there may be other criteria you have to meet.

How to Apply for Cosigner Release

Before a lender will release a cosigner, primary borrowers must submit an application. Here is a step-by-step guide to applying for a cosigner release.

1. Check with Your Lender

First things first, if you’re unsure if the loan you have qualifies for a cosigner release, check in directly with your lender. Generally, lenders will have certain requirements that borrowers are required to meet before they can apply for a cosigner release. These may include things like making a minimum number of on-time monthly payments, establishing a strong credit history, and securing employment. Again, each lender is able to set their own criteria.

2. File an application

Once you’re confident you can meet the requirements, you will likely have to file a formal application with your lender to have the cosigner removed from your loan. Depending on the lender, you may be able to submit the application online or by mailing in a printed form. Read the application requirements thoroughly because some lenders may require supporting documentation, like a W-2 or recent pay stubs.

Once you have submitted an application with the information your lender requires, the lender might then issue a cosigner release.

Why Get a Cosigner Release?

A cosigner may want to be released from a student loan for a number of reasons, not the least of which is the flexibility they may gain from having that portion of their credit freed up.

First, their debt-to-income ratio will likely improve, which may make it easier to apply for new credit or get a new loan at a favorable interest rate. If a cosigner is looking to buy a car or get a mortgage, for example — or even cosign another loan — they may be able to do so with more favorable rates.

Cosigners with other children bound for college may want to be released from one child’s loan so they can turn their attention to funding their next child’s education.

Another reason to consider releasing a cosigner is that some private loans go into automatic default if the cosigner dies. Removing the cosigner protects the primary borrower from needing to worry that they may have to pay any remaining balance in full immediately if their cosigner dies.

Once the cosigner is released from the loan, they will no longer have to worry that their credit will be damaged if loan payments aren’t made on time, or that they may be responsible for payments should the primary borrower drop the ball.


💡 Quick Tip: Refinancing could be a great choice for working graduates who have higher-interest graduate PLUS loans, Direct Unsubsidized Loans, and/or private loans.

What Are the Limitations of Cosigner Releases?

Not all loans offer a cosigner release. And even for those that do, it can be difficult to obtain. For that reason, when you are on the hunt for an initial loan, you should read the fine print to see if the loan offers a cosigner release option. That way, you’ll know the possibility is there.

What Are the Alternatives to a Cosigner Release?

If your application for a release is rejected, there are other ways you may be able to relieve your cosigner.

One alternative that might be worth considering is refinancing your student loan(s).

When you refinance student loans, your new lender pays off your old loan (or loans) in full, replacing it with a new one. If the primary borrower can qualify for a new loan on their own, they won’t need to include the cosigner on the new loan.

If you do decide to go the refinance route, it’s worth spending a little bit of time shopping around for a lender that can help you manage your student loan debt better. For example, you could look for a lender that offers you lower interest rates, since this could cut your interest costs over the life of the loan and may save you money.

You will still need to apply for this type of loan as you would any other, demonstrating that you are capable of paying the debt off yourself. You’ll likely need to prove that you have a history of making on-time student loan payments, too. Lenders might look at your consumer credit report, debt-to-income ratio, and income, among other factors that will vary from lender to lender.

If you do qualify for a refinanced loan on your own, then only your name will be on the new loan. Then, your cosigner will no longer be responsible should you miss payments or default. Though the responsibility for repaying the loan will fall entirely on you now, being released from the old cosigned loan can be a big weight lifted off your cosigner’s shoulders.

The Takeaway

Applying for a cosigner release may require that the primary borrower meet certain lender requirements like having a full-time job and making a minimum number of on-time monthly payments. If approved, the cosigner on the loan will be officially removed and the primary borrower will be the sole borrower.

In the event that you aren’t approved for a cosigner release, you may be able to remove your cosigner by refinancing your loan. This entails applying for a new loan, potentially with a new lender. Refinancing won’t be the right choice for every borrower, and if you have federal student loans, you will forfeit any federal borrower protections, like income-based repayment plans, if you refinance them with a private lender. (Federal loans also don’t require a cosigner.) If you think refinancing might be a fit for your personal financial situation, consider SoFi. Refinancing at SoFi can be done entirely online and there are absolutely no hidden fees.

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

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

In 2023, more than 43 million Americans collectively have over $1.76 trillion in student loan debt. If you are one of the millions with some form of student debt, you may have considered student loan consolidation, which allows you to combine all of your student loans into one loan with one monthly payment.

Simplifying the student loan repayment process might seem like a good idea, but there are a few things to consider before you consolidate your loans. In some cases, consolidating your loans may disqualify you from certain federal student loan repayment programs and forgiveness. But other times, consolidation can allow you to lower your interest rates or shorten the amount of time it takes you to pay off your loan.

Ahead, we review how student loan consolidation works and the pros and cons of the process.

Student Loan Consolidation Explained

Student loan consolidation is designed to combine some or all of your student loans and make repayment more manageable. There are both federal and private options when it comes to consolidating your student loans.

Private Student Loan Consolidation

Private student loan consolidation is when a lender pays off all or some of your student loan debt and creates a new loan, which you will then make payments on. This process is also known as student loan refinancing. If you consolidate or refinance through a private lender, the new loan will ideally have a lower interest rate and better terms than your previous student loans.

With a private lender, you can consolidate both federal and private loans. But if you refinance your federal loans with a private lender you will you lose access to federal student loan forgiveness programs, such as income-driven repayment plans. If you plan on using one of these programs now or at some point in the future, it’s best to hold off on consolidating federal loans through a private lender.

Federal Student Loan Consolidation

If you are hoping to consolidate federal loans only and want to keep access to federal forgiveness programs, you can consolidate with a Direct Consolidation Loan through the U.S. Department of Education.

Recommended: Types of Federal Student Loans

Consolidating through the federal student loan system doesn’t usually save you money; it simply combines multiple loans into one. Your new interest rate is a weighted average of all your loans’ interest rates, rounded up to the nearest eighth of a percentage point. Any unpaid interest on the loans you’re consolidating will be capitalized — that is, added to the principal of the new loan. There are no application fees for Direct Consolidation Loans, and the loans remain federal loans.

Consolidation may be particularly useful for borrowers who are pursuing federal student loan forgiveness or who are enrolled in one of the more flexible federal student loan repayment plans, such as an income-driven repayment plan.

You can also choose to just refinance your private loans and not consolidate both private and federal into a new private loan. If you go this route, you may be able to get the benefits of refinancing (lower interest rates, better terms) without losing the perks of having federal loans.

Before you consolidate or refinance your loans, you should consider the pros and cons of the process. Getting clarity on whether consolidation is right for you will help you make the right decision for your financial needs.


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

Benefits of Consolidating Student Loans

There are a few reasons to consider student loan consolidation either with a Direct Consolidation Loan or refinancing through a private lender.

Simplified Repayment

Whether you choose a Direct Consolidation Loan or choose to refinance through a private lender, your loan repayment may be simplified. Managing multiple student loan payments may increase your chances of missing a payment. If you miss even one payment, you may risk damaging your credit score. Late payments may also stay on your credit profile for up to seven years.

Consolidating multiple loans into one may help eliminate some of the stress of juggling multiple loan payments and may make repayment more manageable.

Fixed Interest Rate

When you refinance your loans through a private lender, your interest rate and terms will be based on your credit score, payment history, type of loan you’re seeking, and other financial factors. While requirements may vary by lender, applicants who meet or exceed the lender’s criteria may qualify for better interest rates and terms, thus saving money over the life of the loan. Borrowers can also switch from a variable to a fixed interest rate when refinancing through a private lender.

With federal Direct Loan Consolidation, as mentioned earlier, a borrower’s interest rate is a weighted average of current loan rates rounded up to the nearest one-eighth of a percentage point, which means this doesn’t typically result in savings for the borrower. The borrower does, however, keep their access to federal loan forgiveness programs.

Flexible Loan Terms

Student loan consolidation may allow you to change the duration of your loan. If you currently have a 10-year repayment plan, for example, when you consolidate or refinance, you may choose to shorten or lengthen the term of your loan. Typically, lengthening the term of your loan will reduce your monthly student loan payment but add up to more total interest in the long run.

Drawbacks of Student Loan Consolidation

Even though there are benefits of student loan consolidation, there are also drawbacks. Here are a few considerations to be aware of before consolidating student loans.

You Can’t Lower Interest Rates on Federal Student Loans When Consolidating

If you choose the Direct Consolidation Loan, generally you won’t see any savings. Because your new interest rate is a weighted average of your current loans rounded up to the nearest one-eighth of a percentage point, you will probably pay around the same amount you would have paid if you didn’t consolidate. Further, any unpaid interest on the loan you’re consolidating will be capitalized — that is added to the loan principal.

If you extend your term, you may see your monthly payment decrease, but your total interest payments will increase.

On the other hand, if borrowers choose to refinance with a private lender, they may qualify for a lower interest rate, thus saving money over the term of the loan. They could also opt for lower monthly payments by extending their loan term. But as mentioned above, you may pay more interest over the life of the loan if you refinance with an extended term.

Possible Disqualification from Federal Repayment Programs

Refinancing federal student loans with a private lender disqualifies you from federal repayment programs, including the Public Service Loan Forgiveness Program (PSLF) and income-driven repayment plans.

Borrowers will also be disqualified from federal benefits such as forbearance and deferment options, which allow qualifying borrowers to pause payments in the event of financial hardship.

Some private lenders may have hardship programs in place, but policies are determined by individual lenders.

Private Lenders May Charge Refinancing Fees

While there is no application fee for the federal Direct Consolidation Loan, private lenders may charge a fee to refinance loans. Fees associated with refinancing student loans are determined by the lender.


💡 Quick Tip: Refinancing could be a great choice for working graduates who have higher-interest graduate PLUS loans, Direct Unsubsidized Loans, and/or private loans.

Refinancing vs Consolidation

Consolidating or refinancing student loans are terms that are thrown around interchangeably, but they actually apply to two different types of loans. A federal student loan consolidation is when you combine federal loans through a Direct Consolidation Loan. This is done by the U.S. Department of Education only. A student loan refinance, on the other hand, allows you to combine private and/or federal loans into one new loan and is done by a private lender; while this does effectively “consolidate” your loans, it’s different in some key ways from federal student loan consolidation. Below are some differences and similarities between refinancing and consolidating student loans.

Key Takeaways

Understanding the benefits and drawbacks of student loan consolidation — as well as the difference between federal student loan consolidation and private refinancing — can help you make an informed decision about repaying student loans.

If you decide to consolidate your loans via private student loan consolidation, you might want to consider evaluating a few options from different lenders, because requirements — as well as interest rates and loan terms — can vary from lender to 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.

FAQ

Can your student loans still be forgiven if you consolidate them?

Possibly. If you consolidate your federal student loans with a Direct Loan Consolidation, you are still eligible for federal loan forgiveness programs. However, if you choose to consolidate your loans through a private lender, which is also known as refinancing, you will no longer be eligible for forgiveness programs and other federal student loan benefits.

When is consolidating student loans worth it?

Consolidating student loans is worth it if you’re looking to combine multiple student loan payments into one, or you’re looking to lower your interest rate. You can use a Direct Consolidation Loan for your federal loans and keep your access to federal benefits like income-based repayment programs or forgiveness. Another option is to refinance through a private lender, which may give you a lower interest rate and lower monthly payment, but you do lose access to federal loan benefits like forgiveness and income-driven repayment plans.

What are some advantages of consolidating student loans?

The biggest advantage of consolidating your student loans is that you combine them into one loan so you only have one payment every month. This makes it easier to track your loans. If you choose to refinance your loans with a private lender, you may also receive a lower interest rate, which can help you save money. But if you refinance federal loans with a private lender, you lose access to federal programs like forgiveness and forbearance. While people use the terms “consolidation” and “refinance” interchangeably, they are not the same thing.

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.