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The Health Education Assistance Loan (HEAL) program was created in 1978 to help medical students finance their degrees. The HEAL program worked by insuring loans made by participating lenders to help graduate students in various health care fields — including medicine, dentistry, and clinical psychology — cover the costs of their schooling.

HEAL loans are no longer available; the program was discontinued in 1998. However, there are a number of other ways medical students can finance a degree. In this guide, learn about options that can help borrowers cover the cost of medical school now, as well as what you should know if you’re still paying off HEAL student loan debt from years ago.

Overview of HEAL Student Loans

Getting a medical degree, which typically takes more than 10 years to earn, can be very expensive. The total average medical school debt of graduates is $243,483, according to the Education Data Initiative.

The cost of medical school continues to rise each year. For the class of 2024, four years of attendance at a public school is $276,006, while private school costs $374,476, according to the American Association of Medical Colleges.

Through the HEAL program, from 1978 to 1998, the U.S. Department of Health and Human Services insured loans made by lenders to graduate students in the health care field to help them pay for medical school. The loans were insured by the federal government against loss due to borrowers’ death, disability, bankruptcy, or default. The program was meant to ensure that funds would be available to future students who needed them.

Key Features of HEAL Student Loans

With HEAL loans, eligible students could borrow up to $80,000 to help pay their medical education costs. Interest accrued and compounded on the loans while the student was in school and during the nine-month grace period allowed by these loans afterward.

HEAL loans typically had variable compounding interest rates, though lenders could offer fixed rates if they chose. With compounding interest, interest is added to the loan balance, and future interest is calculated on the new higher balance.

Borrowers could take up to 33 years to repay their HEAL loans. Because of the long repayment term, HEAL borrowers may still be paying off their loans.

End of the HEAL Program and Current Status

The HEAL program ended on September 30, 1998. In 2014, outstanding HEAL loans were transferred from the U.S. Department of Health and Human Services to the Department of Education. Even though the program ended, borrowers who have outstanding HEAL loans must still repay them.

To simplify the payment process, borrowers who have more than one HEAL loan can consider consolidating their loans into a federal Direct Consolidation loan. Through this process, you pay off your old loans with one new Direct Consolidation loan. Under the new loan, you have one monthly payment. You may also qualify for federal benefits, like income-driven repayment.

If you’re struggling to make your HEAL payments, contact your student loan servicer. Defaulting on HEAL loans has serious repercussions. A borrower’s account can be sent to collections or they can be taken to court, among other consequences. HEAL loans are exempt from statute of limitation laws, so theoretically, a lender can indefinitely pursue a borrower who is in default to try to collect on the loans.

If you’re currently in default on your HEAL loans, contact the Department of Education’s HEAL Program Team at [email protected].

HEAL Loans vs. Current Federal Student Loans

While HEAL loans are no longer available, there are other types of student loans for health professionals, including federal student loans and private student loans.

Medical students can apply for federal financial aid by filling out the Free Application for Federal Student Aid (FAFSA). Although graduate students are not eligible for Direct subsidized loans, they may qualify for other types of federal loans. They can also apply for private student loans. Here’s more information on each loan type.

Direct unsubsidized loans. With these federal loans, medical students can borrow money unsubsidized. This means the borrower is responsible for paying all of the interest on the loan. The interest begins accruing immediately and continues to accrue while they’re in school. Certain medical graduates may take out up to $40,500 per academic year in Direct unsubsidized loans with an aggregate limit of up to $224,000.

Direct PLUS loans. Often called a graduate PLUS loan, the federal Direct PLUS loan covers the difference between the cost of attending school and any other sources of funding, including Direct unsubsidized loans. A credit check is required to get a Direct PLUS loan. These loans are also unsubsidized and they tend to have higher interest rates than Direct unsubsidized loans.

HRSA loans. The Health Resources and Services Administration (HRSA), an agency of the U.S. Department of Health and Human Services, offers loan programs to some schools; these institutions then offer several different types of low-interest loans to qualifying students in need who are pursuing certain health care degrees. Check with your school to see if they offer HRSA loans and whether you are eligible.

Private student loans. Students can supplement federal student loans with private loans to help pay for medical school. These loans are available from banks, credit unions, and online lenders. Private loans may have fixed or variable interest rates, and the interest rate you’re offered will depend in part on your credit history. If the rate you end up with is higher than you hoped for, you could choose to refinance medical school loans later on if you can qualify for a lower rate or more favorable terms.

Private loans typically don’t offer the same benefits as federal student loans, such as income-driven repayment plans and Public Service Loan Forgiveness. For that reason, students may wish to explore other forms of funding first.

The Takeaway

The HEAL Loan Program ended in 1998, but some medical professionals may still be repaying their HEAL loans. If you have outstanding HEAL loans, you might be able to consolidate them into a federal Direct Consolidation loan and potentially qualify for an income-driven repayment plan, which could make repayment easier. Check with your loan servicer for more information.

Current medical students have a variety of funding options today that could help cover the cost of school, including federal loans and private loans. Explore the different alternatives to decide which type of financing is best for you, and remember that it’s possible to refinance student loans in the future once your medical career is underway.

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 I still apply for a HEAL loan?

The HEAL program ended in 1998, and these loans are no longer available. However, there are other federal student loans for medical students, including Direct unsubsidized loans, Direct PLUS loans, and HRSA loans through the Health Resources and Services Administration. In addition, there are private student loans for those studying to become medical professionals.

Can HEAL loans be consolidated with other student loans?

Yes, you can consolidate HEAL loans with other federal student loans, including Direct unsubsidized loans, Direct PLUS loans, and Federal Family Education Loans (FFEL), into a Direct consolidation loan. This may allow you to take advantage of income-driven repayment plans and potentially, student loan forgiveness.

What should I do if I’m struggling to repay my HEAL loan?

Contact your loan servicer right away if you’re having trouble repaying your HEAL loan. The servicer can explain your payment options. Whatever you do, avoid missing payments. If you default on HEAL loans, the consequences can be serious. Your account can be sent to collections or you can be taken to court, among other repercussions. If you’re already in default, contact the Department of Education’s HEAL Program Team at [email protected].

Photo credit: iStock/FatCamera

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.

SOSLR-Q324-018

When you file the Free Application for Federal Student Aid (FAFSA), you’ll answer questions that will determine your status as a dependent or an independent student.

Most students under the age of 24 are considered dependent students. However, students in certain exceptional situations can apply for a dependency override for FAFSA from their school’s financial aid office. The override allows a student to be considered an independent student for financial aid purposes and to exclude parental information on the FAFSA form. This means that only the student’s income and assets will be reported on the FAFSA.

A dependency override can result in more financial aid for a student. Learn about the FAFSA dependency override, the criteria to qualify, and how to apply.

Understanding Dependency Status

A student’s dependency status determines the information they must report when filling out the FAFSA. As part of the steps to complete the FAFSA, dependent students include their parents’ information as well as their own information on the form. Independent students report only their own information on the FAFSA.

According to FAFSA requirements, a dependent student is someone who does not meet any of the criteria of an independent student.

Independent students must be at least one of following:

•   24 or older

•   Married

•   Graduate or professional student

•   Veteran

•   Member of the armed forces

•   An orphan

•   Ward of the court

•   In foster care

•   Someone with legal dependents other than a spouse

•   Emancipated minor

•   Homeless or at risk of becoming homeless

If you meet one or more of the conditions above you are considered an independent student and you’re not required to report information about your parents, including their income, on the FAFSA.

If you don’t meet any of the criteria, but you are unable to include your parents’ information on the FAFSA for very specific reasons, such as cases of abuse or neglect or a parent who is absent from your life or incarcerated, you can file for a FAFSA dependency override. In general, the requirements to qualify for an override are strict.

If you cannot get a dependency override, don’t be discouraged. There is other financial aid you may be eligible for through the FAFSA, including grants, scholarships, and federal student loans.

And keep this in mind: In the future, you can choose to refinance student loans if you can qualify for better rates and terms, which might help make it easier to repay your student loan debt. In other words, you have options.

Recommended: FAFSA Facts for Parents

Eligibility for Dependency Override

As mentioned, the criteria to determine eligibility for a FAFSA dependency override can be strict. That said, don’t be deterred from applying if you think you may qualify.

Qualifying Circumstances

A FAFSA dependency override might be granted to you by your school’s financial aid office if certain circumstances apply to your situation, including the following:

•   An abusive family environment, including sexual, physical, or mental abuse, or domestic violence

•   Abandonment or estrangement by your parents

•   Parents are incarcerated or institutionalized

•   Parents cannot be located

•   Parents are physically or mentally incapacitated

•   Parents are hospitalized for an extended period

What doesn’t qualify for dependency override? Circumstances that are not considered FAFSA dependency override qualifications include:

•   Parents who refuse to help pay for your education

•   Parents who are unwilling to provide information on the FAFSA

•   Parents who refuse to complete FAFSA verification

•   Parents who do not claim the student as a dependent on their taxes

•   Students who are self-supporting and live on their own

Recommended: FAFSA Guide

Documentation Required

Each school has different documentation requirements for the FAFSA dependency override, so it’s best to contact your school directly to find out exactly what’s needed. You may be asked to provide various types of documentation depending on your situation, including:

•   Parental incarceration information such as jail records and sentencing documents

•   Missing person’s reports or police reports for parents who can’t be located

•   Records from homeless shelters or homeless youth centers, and signed statements from counselors or teachers verifying that you’re experiencing homelessness

•   Police, court, medical, and child welfare records that indicate an abusive situation

It’s important to note that if you have been declared homeless or at risk of homelessness by a homeless youth Basic Center, an emergency shelter funded by the U.S. Department of Housing and Urban Development, or a school district homelessness liaison, you can qualify as an independent student without applying for a dependency override.

Likewise, if you were in foster care for even one day after the age of 13, you can also qualify as an independent student without applying for an override.

Applying for a Dependency Override

In addition to the FAFSA, your college or university will require you to submit additional information about your situation, including documents, letters, and proof that explains your situation as described above, to apply for a dependency override.

Here are the actions to take as well as some FAFSA tips:

On the FAFSA form, fill out Steps 1, 2, and 3. For Step 4, if you can’t provide parental information due to one of the qualifying circumstances above, leave the step blank and contact your school’s financial aid office immediately to explain your situation and find out how to proceed.

A financial aid officer will give you information about what’s required for the FAFSA dependency override, the documentation you need to provide, and a timeline of how long it might take for your application to be reviewed. Schools have up to 60 days after the student enrolls to make a decision.

It’s vital for students to contact their financial aid office about an override as soon as possible so as not to miss any deadlines for state or institutional aid. In some states and at some schools, the FAFSA must be fully completed in order to determine the student’s FAFSA amount and for students to be considered for these aid opportunities.

The Takeaway

A student may qualify for a FAFSA dependency override in certain situations such as having a parent who is incarcerated or incapacitated. The override allows students to exclude their parents’ information on the FAFSA form and helps determine the amount of financial aid they may receive from their school.

Dependency overrides have specific requirements and may be difficult to qualify for. If you are ineligible, the FAFSA can still help you access student aid, including federal student loans, grants and scholarships.

You can also take out private student loans to help pay for college. You could then refinance them later on if you can qualify for lower rates and better terms.

Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.

FAQ

What are the reasons for a FAFSA dependency override?

A dependency override for FAFSA can help students in exceptional situations qualify as independent and report only their own financial information, and not their parents’, on the FAFSA form. Students who come from situations of abuse or abandonment, or whose parents are incarcerated, hospitalized for an extended time, or institutionalized, among other situations, may qualify.

How often can you request a dependency override?

Thanks to the FAFSA Simplification Act, which went into effect in the 2024-2025 academic award year, students who qualify for the dependency override no longer need to request or recertify their status each year unless their situation changes. Students must still submit the FAFSA each year, however.

Can the dependency override decision be appealed?

If you’re denied a dependency override, these decisions are final at many colleges and cannot be appealed. However, reach out to your school’s financial aid office to find out if it’s possible to appeal. If it is, get specific instructions from them about how to proceed.

Photo credit: iStock/shapecharge

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.

SOSLR-Q324-017

There are approximately 53 million family caregivers in the U.S., according to the latest data. While caregiving is a labor of love, it can also involve some serious financial challenges. You might have to take time away from your job to care for your loved one, for instance, making it hard to pay your bills and student loans.

Fortunately, there are options that can help, including student loan forgiveness for caregivers. Read on to learn about ways to manage your student loans and get some debt relief.

Managing Student Loans as a Caregiver

Juggling student loan payments and other expenses with caregiving responsibilities can be difficult. Nearly two in 10 caregivers had to leave their job to care for a family member, and four in 10 had to reduce their hours, according to a survey from the Rosalynn Carter Institute for Caregivers. On top of a possible loss of income, many family caregivers are spending money to help their loved ones. Three-quarters of caregivers pay more than $7,200 in out-of-pocket expenses annually related to caregiving, according to a study by the AARP.

Caregivers who are struggling to make federal student loan payments can seek out help by contacting their loan servicer and exploring student loan repayment options and forgiveness programs to avoid missing payments and defaulting on their loans. Federal loan default occurs when you fail to make your scheduled loan payments for at least 270 days. If you go into default, you could suffer credit damage, wage garnishment, and have your tax refunds withheld.

For private student loans, you can contact your lender directly to see how they might be able to help. While private student loan forgiveness options are usually not available, there may be other types of loan modifications the lender might be willing to make.

Another option you may want to consider is to refinance your student loans. If you can qualify for more favorable rates and terms, that might make repayment easier.

Recommended: Student Debt Guide

Forgiveness Programs to Explore

Caregivers may be able to qualify for federal or state forgiveness programs that forgive or cancel the remaining balance of their student loans after a certain amount of time and other specific requirements are met. Here are some forgiveness programs to look into.

Public Service Loan Forgiveness (PSLF). PSLF forgives the remaining balance on your federal Direct loans if you’re employed full-time by the government or not-for-profit organization. To qualify, you need to repay your loans under an income-driven repayment plan or a 10-year standard repayment plan. You must make a total of 120 qualifying monthly payments.

In 2021, and again in 2023, a bill was introduced in Congress to make primary family caregivers for military veterans eligible for PSLF by expanding the definition of “public service job.” The bill is still working its way through Congress, but you may want to keep tabs on it if it applies to your caregiving situation.

Income-Driven Repayment (IDR). IDR offers a pathway to forgiveness. These plans base your monthly student loan payment amount on a percentage of your discretionary income and family size. If you repay your loans under an IDR plan, any remaining balance may be forgiven after 20 or 25 years.

State-specific forgiveness programs. A number of states offer student loan forgiveness programs, and yours may be one of them. For instance, your state may offer forgiveness programs to help certain individuals — particularly those in high-need locations and working in high-need occupations like health care and teaching — pay off some or all of their student loans. Some of these programs forgive both federal and private student loans. Check with your state department of education for more information about these opportunities.

Recommended: Student Loan Forgiveness Guide

Application Process and Documentation

To apply for Public Service Loan Forgiveness, you’ll need to submit a PSLF form by taking the following steps:

1. Make sure you qualify. To be eligible for PSLF, you must have federal Direct subsidized or unsubsidized loans, Direct PLUS loans, or Direct consolidated loans. You must also work full-time for a qualifying employer and be on an IDR plan.

2. Sign up for an IDR plan if you are not already on one. You can sign up at StudentAid.gov. You’ll need a Federal Student Aid (FSA) ID, as well as documentation such as financial information, tax forms, your mailing address, phone number, and email address.

3. Verify that your employer qualifies you for PSLF. The easiest way to do this is to use the PSLF Help Tool. This allows you to see if your employer is in the Department of Education’s database. If they aren’t, you can request that your employer’s eligibility be reviewed.

4. Send the PSLF form to your employer to sign and certify.

5. Sign and submit the fully completed PSLF form.

You’ll need to recertify your employment every year and any time you change jobs to continue to qualify for PSLF.

To apply for state-specific student loan forgiveness, follow the application steps outlined by each plan or program.

Alternatives to Forgiveness for Caregivers

Aside from caregiver student loan forgiveness, there are several other ways to get student loan debt relief. Here are three options to consider.

Deferment: In certain circumstances, including financial hardship, student loan deferment allows you to stop or reduce your payments on your federal student loans for up to three years if you qualify. If you have a subsidized federal loan, interest does not accrue during the deferment period. If you have an unsubsidized federal loan, interest will continue to accrue.

You need to apply for deferment. First, identify the type of deferment you’re requesting, such as economic hardship deferment. Next, fill out and submit a request form to your student loan servicer along with documentation to show that you’re eligible.

Private student loans may or may not offer deferment. Check with your lender.

Forbearance: Similar to deferment, student loan forbearance lets you temporarily stop or reduce your payments for your federal loans if you qualify. However, with forbearance, interest always accrues on your loans and forbearance periods are typically no longer than 12 months.

There are two types of federal forbearance, general and mandatory. To apply, you must identify which type you’re requesting. For family caregivers, general forbearance is likely the most applicable; you may be eligible for it due to financial difficulties, medical expenses, employment changes, or other reasons acceptable to your loan servicer. (Mandatory forbearance is for those serving in AmeriCorps or the National Guard, in a medical or dental internship or residency, or working as a teacher and qualifying for teacher loan forgiveness.) To apply for forbearance, fill out the form for the type of forbearance you’re requesting, and submit it along with documentation showing proof of your financial situation to your loan servicer.

Some private student loans may offer forbearance. Contact your lender to find out.

Student loan refinancing: Another option that might help some family caregivers with their student loans is refinancing. When you refinance, you take out a new loan from a private lender and use it to pay off your existing student loans. The new loan will have a new term and interest rate, which could help some borrowers if they can qualify for a lower rate. Keep in mind, however, that if you extend your loan term to help reduce your monthly payment, you may pay more interest over the life of the loan.

Another important consideration is that if you refinance federal loans, you will no longer qualify for federal benefits such as deferment, forbearance, or income-driven repayment programs. You’ll want to carefully weigh the pros and cons of refinancing.

The Takeaway

If you’re a family caregiver struggling to repay your student loans, there are options that may give you some relief. You might be eligible for Public Service Loan Forgiveness, a state-specific forgiveness program, or an income-driven repayment plan. You can also consider student loan deferment or forbearance to temporarily stop or reduce your payments, or refinance your student loans if you could qualify for more favorable rates or terms. Explore all the possibilities to determine which one can give you the help you need.

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

How long does it take to qualify for loan forgiveness?

It typically takes 10 years to qualify for Public Service Loan Forgiveness (PSLF) because you must make 120 qualifying monthly payments under an income-driven repayment (IDR) plan or the standard repayment plan while working for a qualified employer. At that point, your remaining balance is forgiven. If you instead pursue student loan forgiveness under an IDR plan, it takes 20 to 25 years to qualify for forgiveness, depending on the plan.

Can part-time caregivers qualify?

If you are a part-time caregiver who has federal Direct student loans and works full-time for a qualifying employer, you may be eligible for Public Service Loan Forgiveness. Under PSLF, working “full-time” means at least 30 hours a week or whatever your employer’s definition of a full-time job is. You could also pursue forgiveness under an IDR plan as a part-time caregiver. These plans base your monthly payment amount on a percentage of your discretionary income and family size.

What types of student loans are eligible for forgiveness?

Federal Direct student loans are eligible for Public Service Loan Forgiveness through income-driven repayment plans or the standard repayment plan. Various types of student loans —including, in some cases, private student loans — may be eligible for forgiveness through state forgiveness programs. Check with your state to find out.

Photo credit: iStock/urbazon

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.

SOSLR-Q324-014

If you’re married and struggling to pay off multiple debts, you might consider applying for a debt consolidation loan jointly with your spouse. This approach allows you to roll multiple loan payments into a single monthly payment, which can simplify your household finances, reduce stress, and potentially save money.

Depending on your — and your spouse’s — income and credit score, getting a debt consolidation for married couples could help you qualify for a lower rate and/or better terms compared to applying on your own. However, there are also some downsides to consolidating debt when you get married. Here’s what you need to know.

What Are Debt Consolidation Loans?

A debt consolidation loan allows you to combine your outstanding debt balances into one loan, leaving you with a single monthly payment. In other words, you take out a new loan and use the proceeds to pay off your existing debt.

You can use a debt consolidation loan to combine different types of debt, like credit cards, personal loans, and medical debt. It won’t erase your debts, but it can make things easier by simplifying your payments. If you can qualify for a debt consolidation loan with a lower interest than what you’re paying on your current debts, you could also save money.

Typically, debt consolidation loans are unsecured personal loans, meaning they don’t require collateral. However, some people choose to use secured loans, like a home equity loan, to consolidate debt. Either way, the goal is to reduce the complexity of managing multiple debts and, ideally, save on interest.

Benefits of Debt Consolidation for Married Couples

Debt consolidation offers several advantages for married couples looking to streamline their finances and reduce financial pressure. Here’s a look at the key benefits:

Simplified Financial Management

Managing multiple debts as a couple can be overwhelming, especially when you’re juggling other financial responsibilities like bills, savings, and investments. Consolidating your debts into one loan, and one monthly payment, can make it easier to stay on top of your monthly bills.

A simplified approach to paying off your combined debts can also reduce stress, make it easier to set (and stick to) a household budget, and enable you to work together to achieve your financial goals, whether it’s buying a home, building an emergency fund, or planning for retirement.

Potential for Lower Interest Rates

One of the reasons why many people consolidate debts is to save on interest. This not only saves you money over time but can also help you pay off your debt faster.

When you apply for a debt consolidation loan as a couple, the lender will use your combined income and credit profiles to determine if you qualify and, if so, what your interest rate will be. Applying with your spouse might help you qualify for a lower rate, especially if they have better credit than you. Reducing the overall interest rate on your combined debt can result in significant savings over time.

Recommended: Debt Payoff Guide

Types of Debt Consolidation Loans

There are several types of debt consolidation loans for married couples, each with its own benefits and drawbacks. The right choice will depend on your needs and financial situation.

Personal Loans

A personal loan is one of the most common forms of debt consolidation. These loans are typically unsecured, meaning they do not require collateral like a house or car. With a personal loan, individuals or couples can consolidate various types of debt into one loan with a fixed interest rate and a set repayment term.

A personal loan for debt consolidation can be a smart way to consolidate debt if you qualify for a low interest rate, enough funds to cover your combined debts, and a manageable repayment term. Because these loans are unsecured, your rate and terms will largely depend on your and your partner’s credit profile.

Recommended: How to Use a Personal Loan for Loan Consolidation

Home Equity Loan

If you and your spouse own your home and have built up significant equity, you might consider using a home equity loan to consolidate your debts as a couple. This allows you to borrow against the equity in your home and use the funds to pay off other loans and/or credit card balances.

Home equity is the difference between the appraised value of your home and how much you owe on your mortgage. Depending on the lender, you may be able to borrow up to 85% of the equity you own.

Since home equity loans are secured against the value of your home, lenders can often offer competitive interest rates, usually close to those of first mortgages. However, this type of debt consolidation loan is secured by your home. If you and your spouse are unable to keep up with payments, you could lose your home.

Student Loan Consolidation

In the past, the government allowed married borrowers to combine their federal student loans into one joint consolidation loan, but that program ended in 2006.

Currently, the only way to consolidate federal student loans with a spouse is by using a private lender. With private student loan consolidation or refinancing, you can combine your federal and/or private student loans into a single private student loan at a new interest rate.

If you apply jointly with your spouse, the lender will look at your combined household income and both of your credit scores. If your spouse has better credit or a higher income than you, refinancing with your spouse may allow you to qualify for a lower interest rate than you’d get on your own.

However, not all lenders offer spouse student loan consolidation, which can limit your options. Also keep in mind that refinancing federal loans with a private lender means giving up federal loan benefits and protections, including the ability to enroll in an income-driven repayment plan and eligibility for loan forgiveness programs.

Factors to Consider Before Consolidating Debt

Before committing to a debt consolidation loan as a married couple, it’s important to consider the potential complications and drawbacks of this decision.

Different Money Management Styles

When you take out a debt consolidation loan with your spouse, you’re both on the hook for the payments. So it’s worth thinking about how you handle money as a couple and if you’re okay sharing the debt. Are you both ready to commit to making monthly payments and following a budget together? If managing money together seems challenging, you might want to look into other options like consolidating your debts separately.

Marital Breakdown

If you take out a loan as co-borrowers, you’re both 100% legally responsible for paying it back, even if things don’t work out and you separate. It doesn’t matter if your partner has been paying the loan all along and agrees to continue. If you separate or divorce and that partner stops making payments, the lender will look to you to repay the debt.

Also keep in mind that you can’t remove your name from a joint loan without the lender’s permission. If approval was based on your joint personal loan application, the lender may not be willing to do that. Should your marriage break down, you might end up with payments you can’t afford to make.

Credit Score Impact

Even after you get married, you and your spouse still have separate credit reports. When you apply for a new loan as co-borrowers, the lender will do a hard credit pull on both of your credit reports, which can cause a small temporary dip in your scores. And if either of you misses a payment or falls behind on the loan, it can hurt both your credit scores — even if it’s not your fault.

If you handle repayment responsibly, however, a joint debt consolidation loan for married couples could positively influence your individual credit histories over time.

Irreversible Process

When you consolidate debts with a spouse, the process is permanent. You won’t have the opportunity to revert your former debts back to their original state. Once you use the proceeds of the new loan to pay off your existing loans, those accounts will be closed. This could be problematic if you consolidate federal student loans into a private consolidation loan, since you’ll lose your federal protections like forgiveness and forbearance.

Takeaway

Debt consolidation loans for married couples allow you and your spouse to combine multiple debts into one new loan. This can be an effective way to simplify your financial situation, reduce interest rates, and take control of your debt.

Before you jump in, however, it’s a good idea to discuss how a joint loan will affect your individual credit scores, who will make the payments, and how refinancing will impact your future financial goals.

Considering a personal loan to pay off credit card debt? With low fixed interest rates on loans of $5K to $100K, a SoFi Personal Loan for credit card debt could substantially decrease your monthly bills.

FAQ

Can a married couple consolidate their debt into one loan?

Yes, married couples can combine their debts into one loan if they qualify. The process typically involves applying for a personal loan or a home equity loan in both spouses’ names and using it to pay off one or both of their individual debts.

If your spouse has a stronger credit score than you, applying for a consolidation loan together could improve your chances of approval and potentially secure a better interest rate. However, both partners are equally responsible for repaying the loan, so it’s important to ensure that consolidating the debt benefits both parties.

How will debt consolidation affect credit scores?

Debt consolidation can impact credit scores in both positive and negative ways. Initially, applying for a new loan may result in a temporary dip in your credit scores due to a hard inquiry. However, if you use the loan to pay off high-interest credit card debt and make timely payments, it can improve your credit profile over time. Also, having just one payment can reduce the risk of missed payments, further benefiting your credit.

What are the alternatives to debt consolidation loans?

Alternatives to debt consolidation loans include:

•   Balance transfer credit cards: These cards may offer a low or 0% introductory interest rate for transferring existing credit card balances. This can help you save on interest if you are able to pay off the balance within the promotional period. Just be sure any transfer fees don’t negate the savings.

•   Debt snowball or avalanche methods: These strategies focus on paying off smaller debts first (snowball) or debts with the highest interest rates first (avalanche) without consolidating.

•   Debt management plans (DMPs): Offered by credit counseling agencies, DMPs help negotiate lower interest rates and consolidate payments without taking out a new loan.

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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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If you get midway through the college semester and realize you can’t meet your expenses, whether that’s due to unanticipated costs or underestimating how much you needed, don’t panic. You can take out more student loans to help cover the extra costs even when the semester is underway.

With the average cost of college reaching $38,270 per year, according to the Education Data Initiative, it’s no wonder that some students find they need extra money during the academic year. Fortunately, student loans and other funding options can help fill the gap if you’re coming up short during the semester.

Which Types of Student Loans Can You Take Out?

You can take out federal student loans and private student loans during the semester. But as you’re considering the options, you should be aware of some important factors.

Federal student loans come from the government, through the U.S. Department of Education, and they tend to offer better rates and terms. Your school determines the type of federal loans you can receive as well as the amount you can get, but there are caps on how much a student can borrow in federal loans per year. There are also deadlines to apply for federal student loans (more on that below).

Private student loans come from such entities as banks, credit unions, and online lenders. Each lender has their own criteria for eligibility, and the interest rate you get generally depends on your creditworthiness.

Here are some of the types of loans you may be eligible for, along with their requirements.

Federal Direct Subsidized Loans

Undergraduates with financial need may be eligible for Federal Direct Subsidized loans. The government pays the interest that accrues on these loans while you’re enrolled in school, during the six-month grace period after graduation, and during any student loan deferment. Direct Subsidized loans also offer fixed interest rates, which means the interest rate doesn’t change.

To qualify for a Direct Subsidized loan, you must file the Free Application for Federal Student Aid (FAFSA), which can help in making college more affordable, by the deadline. For the 2024-2025 academic year, the FAFSA must be submitted by June 30, 2025. Any updates to the form must be submitted by September 14, 2025. However, states and schools may have different deadlines, so be sure to check with yours.

It’s possible that you may have already used a Direct Subsidized loan to help pay your tuition. If so, check to see if you’ve reached the borrowing cap. For example, first-year undergraduate dependent students can take out a maximum of $3,500 in subsidized loans.

Federal Direct Unsubsidized Loans

You aren’t required to demonstrate financial need to get Federal Direct Unsubsidized loans, but you do need to file the FAFSA. With an unsubsidized loan, the interest begins accruing the day the loan is disbursed and continues the entire time you’re in college. That means you will likely end up with a higher loan balance after college than the amount you initially borrowed. Your first payment is due six months after you graduate.

First year undergraduates can take out a maximum total of $5,500 in subsidized loans and unsubsidized loans. That means if you’ve reached the max of $3,500 in subsidized loans, you can take out $2,000 in unsubsidized loans.

Direct PLUS and Parent PLUS Loans

Unlike Direct Subsidized and Unsubsidized loans, borrowers applying for PLUS loans need to undergo a credit check and must have a strong credit history in order to qualify. They must also file the FAFSA. In the case of the Parent PLUS loan, parents are expected to repay the loan — these loans do not transfer to the student.

Private Student Loans

Students may use private student loans to help fill the gap after they max out their federal student loans. There is no mandated limit on the amount you can borrow with private loans, and there is no application deadline. To qualify for a private student loan, you must have strong credit or apply with a cosigner, which is someone who has good credit and who will take over the loan if you default.

Private student loan interest rates may be fixed or variable, and the rates tend to be higher than those of federal loans — though you could consider refinancing student loans at some point if you can qualify for better terms. The interest on private student loans will generally begin to accrue the day the loan is disbursed. Another caveat: With private student loans, you cannot take advantage of income-driven repayment options and forgiveness programs.

How Much Can You Borrow During the Semester?

You can use federal and private loans to cover up to the full cost of college attendance. However, as mentioned, while there is no cap on how much you can borrow with private loans, there’s a limit to how much money you can receive with federal loans.

The amount you can take out in federal loans as a dependent student (meaning that your parents are supporting you) depends on your year in college. For your first year, you can receive up to $5,500 in federal loans, and $3,500 of that can be in subsidized loans. For your second year, the amount rises to a total of $6,500, with $4,500 in subsidized loans; and for your third and fourth years, the total amount you can borrow is $7,500, with $5,500 in subsidized loans.

If you’ve reached the annual limit on what you can borrow with federal loans, you can use a Parent PLUS loan and/or private loans to cover the gap — up to the full school-certified cost of attendance.

How Quickly Can You Get Student Loans Mid-Semester?

Although the time frame is different for each lender, it’s possible to get private student loan funds within a few business days after submitting your application.

Federal student loans generally require more time. Once your FAFSA is processed, the information will then be sent to your school. Each school has its own schedule for disbursing loans; check with your college’s financial aid office for more information.

Other Options if You Run Out of Student Loans

If financial aid isn’t enough to cover your college costs, you do have other options to help pay what you owe. Here are some ideas to look into.

Apply for Scholarships and Grants

While FAFSA typically matches you with any federal scholarships and grants you may be eligible for, there are many other types offered by states, cities, community groups, businesses, religious organizations, associations you or your family may be involved in, and more. Your college may even offer scholarships that you’re not aware of, so be sure to investigate. SoFi’s Scholarship Search Tool can also help you find scholarships that may be a good fit for you.

The best part: Scholarships and grants are considered ”gift aid” and usually don’t need to be repaid.

Reevaluate Your Circumstances

If your family’s financial situation changed over the last few months, you may want to consider appealing your financial aid and asking for more.

For example, if one of your parents lost their job, your parents got divorced or separated, or you faced a medical crisis, you may be able to get more funds. Speak with your college’s financial aid office and explain the situation to see what suggestions they may have. You’ll probably have to submit more documentation as part of the process, but it could be well worth it.

Get a Part-time Job

A part-time job can help you directly cover some of your college costs. You might qualify for a federal work-study job based on financial need as part of your financial aid package. The number of hours you can work at these jobs is determined by your school. Find out from your university’s financial aid office if you qualify for work-study and how many hours of work you’re eligible for.

If you don’t qualify for work-study, you can apply for a part-time job working for a local business, like a coffee shop or retail store.

Consider an Emergency Student Loan

Here’s one of the best-kept financial aid secrets: Some schools offer emergency student loans if you run into financial challenges. These short-term loans don’t cover school-related costs, and the borrowing amounts are usually small — around $500. They’re intended to cover things like food, medical expenses, and monthly bills. Ask your school’s financial aid office if they offer emergency loans, and find out what the interest rates and repayment terms are to see if it might be a good option for you.

Apply for Private Student Loans

Private student loans are another option to help cover your college expenses. Again, these loans have higher borrowing limits than federal student loans, and once you’re approved, the funds are generally disbursed quickly. But private student loans also tend to have higher interest rates, and they don’t give you access to forgiveness and income-driven repayment programs. You’ll need to weigh the pros and cons.

The Takeaway

If you discover that you need more money to cover your costs once the school semester is underway, don’t freak out. There are a number of options you can turn to for the money you need. You may be able to take out more federal student loans, get an emergency loan from your school, or qualify for a scholarship or grant. You could also get a part-time job to help pay the bills. And if you take out private student loans, which typically have higher interest rates, you may be able to refinance your loans at some point for a lower rate or better terms. In other words, there are many different ways to help cover the costs of college — just explore and investigate the options to find what works best for you.

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 you request more financial aid during the semester?

Yes, you can request more financial aid during the semester. For instance, you may be able to appeal the amount you were initially awarded, especially if your family circumstances have changed, such as a parent losing a job. Contact your college’s financial aid office to find out how the appeals process works.

Can you increase your student loan amount?

It is possible to increase your student loan amount. One way to do it is to appeal the amount you were awarded, especially if your family circumstances have changed (such as your parents getting divorced) or there was an error on your Free Application for Federal Student Aid (FAFSA). Contact your college’s financial aid office to find out more about this process.

Can I get student loans in the middle of the semester?

Yes, you can get student loans in the middle of the semester. Just be sure to fill out and submit the FAFSA by the deadline in order to qualify for federal student loans. And be aware that there is a limit to the amount you can get in federal loans depending on what year student you are.

You can also take out private student loans during the semester. There is no set limit on how much you can borrow with these loans and there’s no deadline to meet — you can take them out anytime. However, private student loans do typically have higher interest rates, and you’ll likely need a cosigner in order to qualify. Private loans also don’t offer federal protections and programs.

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