Braces can help correct dental alignment issues (like crowded, gapped, or crooked teeth) and give your child a beautiful smile. But if an orthodontist visit is in your future, prepare for sticker shock: Depending on the type of appliances they recommend and severity of the dental problem, kids’ braces can run well into the thousands of dollars. If you haven’t been saving up for this developmental milestone, you may be wondering: How do I pay for braces?
Fortunately, you do have some options, including payment plans, flexible spending accounts, and loans. Here’s a look at ways to make covering the high cost of braces more manageable.
What’s the Average Cost of Braces?
The cost of getting braces varies depending on the area, dentist, and type of braces, but you can expect to shell out anywhere from $3,000 to $10,000.
Here is a look at typical costs for different types of orthodontic treatment:
• Metal braces (traditional braces): $3,000 – $7,000
• Lingual braces (braces that go on the back surfaces of your teeth): $8,000 – $10,000
• Invisible braces (custom-made trays that straighten your teeth over time): $4,000 – $7,400
If you have dental insurance, it might partially cover a child’s orthodontic treatment. Policies vary but many dental plans will cover 50% of the cost of braces with a $1500 lifetime maximum per child. While this still leaves you on the hook for the remainder, it can make a significant dent in your total out-of-pocket expenses.
Also keep in mind that many practices offer a discount (often 5%) on your braces cost if you choose to pay for the treatment up front.
Here’s a look at some ways to make orthodontic treatment costs more manageable.
1. Asking Your Orthodontic Office About Payment Plans
Many orthodontic offices offer flexible payment plans that allow you to stretch the cost of braces over a specified period. One common scenario is interest-free financing that spreads payments across two years. This can make the payments (typically debited monthly from your checking or saving account) more manageable.
For example, an interest-free, 24-month payment plan, with no required down payment, would make a $5,000 orthodontic treatment cost about $209 per month, assuming you don’t have any insurance coverage. If your dental plan covers some of your costs, your monthly, of course, will be less.
Payment policies will vary from office to office, so it’s a good idea to ask about payment plans, including any interest or financing charges associated with the plan, as well as the duration of the payment period. By understanding the terms up front, you can make an informed decision about which practice you want to use and how you will pay for the braces.
2. Using a Flexible Spending Account or a Health Savings Account
Flexible spending accounts (FSAs) and health saving accounts (HSAs) are offered as a part of healthcare plans by some employers. Both allow you to set aside pre-tax dollars to be used toward eligible expenses, which often include orthodontic treatment.
With an FSA, you determine how much you want your employer to set aside for the year (up to the FSA limit). You then need to use the funds for qualified medical expenses before the end of the year, (though you may be able to roll over a certain amount to the following year.
To save to an HSA, you must enroll in a high-deductible health insurance plan, or HDHP (as defined by the government). Each year, you decide how much to contribute to your HSA, though you can’t exceed government-mandated maximums. If you have an HSA through your workplace, you can often set up automatic contributions directly from your paycheck. Typically, you get a debit card or checks linked to your HSA balance, and you can use the funds on eligible medical expenses.
Unlike an FSA, your HSA balance rolls over from year to year, so you never have to worry about losing your savings.
3. Taking out a Loan
If the above options aren’t available or sufficient to cover the cost of braces, you may want to consider getting a personal loan. These loans, available through banks, online lenders, and credit unions, are usually unsecured (meaning you don’t need to put up any collateral) and can be used for almost any type of expense, including your kid’s braces. In fact, healthcare costs are a common reason why people apply for a personal loan.
Financing braces, of course, comes with interest, which will add to the total cost of the treatment. However, personal loans generally have lower interest rates than credit cards. They also provide you with a lump sum up front, which might help you get a discount for paying in full (if your orthodontist offers that). Plus, you’ll get a set monthly payment you can budget for.
When exploring personal loans to pay for braces, it’s important to shop around and look for a loan that offers favorable rates and terms and fits within your budget.
The Takeaway
The cost of a child’s braces can seem daunting. Fortunately, there are several options available to help you manage the expense. Whether you choose a payment plan offered by your orthodontist, utilize a flexible spending account or health savings account, or opt for a loan, careful planning and research can help you to find a solution that works for your family’s financial situation.
If you’re interested in exploring personal loan options for braces, SoFi could help. SoFi personal loans offer competitive, fixed rates and a variety of terms. Checking your rate won’t affect your credit score, and it takes just one minute.
Pay for your kid’s braces — without taking on high-interest debt.
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Whether you need to pay for an emergency root canal or have unexpected home repairs, sometimes life can’t wait for your next paycheck.
If you’ve researched how to access cash quickly, you might wonder if online payday loans are the answer. Lenders that offer payday loans typically promise you things like quick applications, no credit checks, and expedited approvals. They may say you’ll get the cold hard cash you need the very next day.
It’s an easy solution, right? Not so fast.
How Do Payday Loans Work?
Payday loans are called that because they’re meant to be paid back the next time you get a paycheck. They’re generally for small amounts, and usually don’t require collateral or even necessarily a credit check.
The catch? Payday loans come at a price — and a high one, at that. They can have interest rates of more than 600%, depending on the lender you choose and which state you’re in. (Some states have stronger protective laws, including rate caps.)
Such high-interest rates and other associated fees can quickly lead to situations where you end up getting behind on the loan. You may end up having to borrow more and more in order to pay back the money you borrowed, especially since the loan might come due in only two weeks or a month. Soon you may be in a hole so deep you might not know how to get out. It can be costly, greatly damage your credit, or even lead to bankruptcy.
The short answer: a lot. But let’s look at an example.
Say you take out a $500 payday loan at an annual percentage rate (APR) of 300%. You would only pay that full 300% if you took a whole year to pay off the loan because the APR is what you would be charged in interest over 12 months.
However, even if you only borrow money for one month, you’d have to pay 1/12 of 300%, which translates to 25%. Here’s where the math gets ugly: 25% of $500 is $125, which means that when your loan comes due at the end of its very short term, you’ll owe $625. This amount might be tough to meet, especially if you’re in a situation where you needed a payday loan in the first place.
What Is a Direct Payday Loan?
Payday loans are offered by a wide variety of vendors, but for the most part, they break down into two categories: direct payday loans and those offered through a broker.
With direct payday loans, the entire loan process, from application to funding to repayment, is all managed by the same company. Although these can be slightly better than indirect loans — which may involve multiple fees, longer funding wait times, and harder-to-pin-down communication — they’re still generally considered a bad idea.
Why Is it Best To Avoid Payday Lending?
Other than the possibility that you can get money quickly if you have bad credit, there aren’t many benefits associated with payday loans. You’ll end up paying a significant amount in interest, and you’re usually expected to pay the money back in a very short period of time — usually within two weeks or so.
The interest on your loan can also compound daily, weekly, or monthly. This means that interest charges will start accumulating on the interest you already owe, which will inflate your loan balance even more.
Depending on how much you borrowed and your financial situation, compounding interest can make it incredibly difficult for you to pay back the loan. Many times borrowers end up taking out additional loans to pay off the payday loan, which can lock them into a seemingly endless cycle of debt.
You’re also unlikely to be able to borrow a large amount of money because payday and fast cash loan lenders typically have low maximum borrowing amounts.
What’s more, you won’t even be building your credit if you do manage to pay the loan back on time, because most of these lenders don’t report your behavior back to credit bureaus. In contrast, above-board lenders will report back to credit bureaus when you’re paying your bills on time and in full, and that can boost your credit score.
What Are Some Alternatives to Payday Loans?
In an ideal world, you’d avoid any kind of consumer debt. But sometimes it’s simply unavoidable. There are financially favorable alternatives to consider before you sign up for a risky payday loan.
Paycheck Advance
The best kind of money to borrow is money you’ve already earned. While not every employer offers it, a paycheck advance can be a relatively low-risk way to fund last-minute emergencies. An advance on your paycheck basically means getting paid earlier than you normally would, with the balance deducted from your future paycheck.
But tread carefully: Many employers offer paycheck advances through apps and platforms that may assess a one-time fee or even charge interest. While the rates may not be as astronomical as payday loan rates, it’s still worth taking a second look at the paperwork to ensure you understand what you’re signing up for ahead of time.
Another option is debt settlement, which is where you offer a creditor a lump sum payment on a delinquent debt — a lump sum that often ends up being far less than the original amount you owed.
However, doing this does require some negotiating, and sometimes even some legal know-how, which is why many people seek the help of professional debt settlement companies. This, too, is tricky, because scams abound, and some debt settlement companies may try to charge exorbitant fees to “eliminate your debt,” all without actually doing any work on your behalf. The Federal Trade Commission has more information on debt settlement and how to look for a reliable firm if you choose to go this route.
Personal Loans
Many types of personal loans are unsecured loans — meaning no collateral is involved — that can be used to pay for just about anything. And although they tend to have higher interest rates than secured loans, like mortgages or auto loans, those rates are still much lower than payday loans.
With its lower interest rate and longer-term, a personal loan will likely cost you less money than a payday loan in the long run. And some online personal loan lenders can process your application quickly and even get you the money you need in a matter of days.
Unlike payday loans, you have to go through a credit check to qualify and get approved for a personal loan. However, if you have a steady income and meet the lender’s eligibility requirements, you’re likely to qualify for a lower interest rate than you would if you used an online payday loan.
Your repayment timeline could also be less stressful if you opt for a personal loan rather than a payday loan. Personal loans come with the option of longer terms — a few years, for example, instead of a few months.
And because you can pay your loan off over a longer-term, your monthly payments might be more manageable than a payday loan. There also tend to be fewer fees attached to personal loans, and you might be able to borrow more because personal loans have higher loan maximums.
Personal loans aren’t much more difficult to apply for than payday or fast cash loans. You can typically get pre-qualified online by answering a few questions about your income, financial history, and occupation.
When you need money quickly, payday loans — and their promise of fast money — can be tempting. But you’ll want to proceed with caution. These loans generally come with very high interest rates and associated fees, and you may only have a couple of weeks or so to pay back the money you borrowed. There are less-risky alternatives to consider, including paycheck advance, debt settlement, or a personal loan.
If you are thinking about taking out a loan to help you repay debts on time, a SoFi personal loan may be a good option for your unique financial situation. SoFi personal loans offer competitive, fixed rates and a variety of terms. Checking your rate won’t affect your credit score, and it takes just one minute.
See if a personal loan from SoFi is right for you.
FAQ
What is a disadvantage of a payday loan?
Payday loans generally come with high interest rates and associated fees. What’s more, you typically have to pay back the money you borrowed on your next payday.
Are payday loans a good idea?
Payday loans are usually not the top choice when you need cash quickly. That’s because they often come with high interest rates and tight repayment timelines.
What is the catch to payday lending?
The catch to payday loans is that borrowers are typically charged very high fees and interest rates.
Are payday loans easy or hard to pay back?
With their high interest rates and fees and short repayment timelines, payday loans can be difficult for borrowers to pay back on time.
Can payday loans hurt your credit?
While payday loans are unlikely to help your credit score, they can hurt your credit if you don’t pay back your loan and your lender sends the debt to a debt collector.
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SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
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.
It may feel like there’s nothing easy about money. The older you get, the more obligations you may have. Between checking, savings, IRAs, 401(k)s, bills, loans, mortgages, and more — it can be a lot to keep track of and manage.
If thinking about your finances causes you to feel stressed and/or you find yourself putting off important financial decisions, it may be time to simplify. While streamlining your personal finances can take a little bit of time and effort in the short term, it can end up saving you time, effort, as well as money, over the long haul.
Here are seven simple moves that can help you manage your money more efficiently — and more effectively.
1. Automating Your Bills
One of the easiest ways to simplify your finances is to set up auto payment whenever possible. Putting all of your bills — including credit cards, utilities, insurance, loans, mortgage, and even rent — on autopilot can save you significant time and hassle each month. Plus, you won’t have to worry about late payments — or late fees.
You can often set up automatic payments for your bills by going to the website of the service provider and inputting your bank account information.
If a business doesn’t offer an automatic payment program, you may be able to set up a recurring payment through your bank by logging on to your checking account or using your bank’s mobile app.
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2. Going Paperless
A major culprit of personal finance-related headaches is paperwork. Keeping track of the many documents — all those receipts, investment reports, bank statements, tax returns — can be a struggle.
Many services allow you to opt-in to a paperless experience instead. You’ll typically have access to all of the documents when you log into your account. And, with everything just a click away, you won’t have to worry about finding misplaced paper documents.
If you’re interested in leveling up your organization, you could even set up a digitized archive of your important information and files on your computer or an external hard drive, so you never have to spend hours searching through file cabinets and miscellaneous envelopes.
You can also reduce physical — and mental — clutter by taking advantage of the many retailers and service providers that offer email, rather than paper, receipts. Or, you may want to consider getting an app that scans, organizes, and stores receipts, such as Smart Receipts .
You can also get an app for filing and organizing your paperless statements. Some not only capture receipts, but will also seek out your online statements and bills and automatically download and file them to the cloud.
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3. Consolidating Accounts
Whether you’re married with three kids or single with two Labradoodles, there’s a good chance that you have more financial accounts than you need. Consolidating multiple bank accounts into just a few can help simplify your financial life. In some cases, it can also help you save you money.
If you’ve done a lot of job hopping in your career, for example, you could have multiple 401(k)s floating around. When you leave a company but don’t roll over your 401(k), you’re often subject to fees that your employer may have been covering while you were employed.
By rolling your 401(k) into an IRA, you may be able to minimize fees. Another plus is that you’ll also have all of your funds in one spot. And, you may be able to select from a wider selection of funds and investments than the ones selected by your previous employer.
If you have more than one checking or savings account, you may want to see if you can pare it down to one of each, ideally under the same roof. Or, you might want to consider switching to a checking and savings account, which functions as both a spending and saving account in one product.
You may also want to look at bundling your insurance policies. Many companies offer substantial discounts if they write both your auto and homeowner’s policies.
4. Using One Credit Card
If you signed up for a variety of credit cards, chasing the promised rewards they offered, you may have racked up more than a few credit accounts.
To make it easier to keep track of your spending, you may want to pick the card that offers you the most in return, whether that’s cash back, travel rewards, or other perks, and focus on using only that credit card.
By putting everything on one card, you’ll only have one credit card bill to pay each month, a single statement to monitor for errors and fraud, and one rewards program to track. Plus, you won’t have to think about which card to pull out whenever you’re making a purchase.
Rather than canceling your other cards (which could negatively impact your credit score), you may want to just store them away in a secure place.
5. Knocking Down Debt
One of the most effective ways to reduce financial stress is to get rid of high interest debts.
Paying off even one sizable credit card or loan can not only ease worry, but can also reduce the number of financial obligations you have to deal with each month. It can also free up money that you can then put towards something else, whether that’s getting rid of other debts or something fun like a vacation.
Two common strategies for paying off debt are the debt snowball and debt avalanche method.
With the debt snowball method, you list your debts in order of size, then put any extra money you have towards the debt with the smallest balance, while paying the minimum on the others. When that debt is paid off, you tackle the next-smallest debt, and so on. Paying off debts in full can help you feel accomplished, simplify your life, and inspire you to continue crushing your debt.
With the debt avalanche method of paying off debt, you list your debts in order of interest rate, then focus on putting extra money towards the debt with the highest interest rate first, while paying the minimum on the rest. When that debt is paid off, you put extra money towards the debt with the next-highest interest rate. While it may take you longer to see progress on your loans, you’ll likely pay less money in interest over time using this method.
6. Putting Saving on Autopilot
The set-it-and-forget-it approach can be highly effective when it comes to saving money. For one reason, you don’t have to remember to transfer money from your checking to your savings each month. For another, the money will get whisked out of your checking account before you ever have a chance to spend it.
You can automate savings in just a few minutes by setting up a recurring transfer from your checking to your savings account for a set amount of money on the same day each month (perhaps the day after you paycheck clears).
Even if you can only afford to transfer a small amount each month, it can be worth automating this task. Since the savings will happen every month no matter what, your savings will gradually build over time.
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7. Focusing on Fewer Goals
It can be great to have financial goals. Many of us have plans to buy a home, put kids through college, and pay for our retirement. But if you set too many goals at one time, you can end up losing focus, and not making any progress on any of them.
A better approach can be to set just one or two goals to fully focus on at one time. Ideally, one should be saving for retirement, since the earlier you start saving for retirement, generally the easier it is to reach your goal.
The other goal might be paying off your credit card debt or student loans, saving for a down payment on a home, or putting money aside to help pay for your kids’ college education.
By focusing your energy on just one or two specific goals, you may be able to make real headway. Once you start seeing progress — or actually achieve the goal — you’ll likely be inspired to set, and accomplish, other goals.
The Takeaway
Simplifying your financial life may take a bit of legwork up front but, in the long run, it can help alleviate stress and also help you better plan for your financial future.
Strategies that can help you simplify your finances include paring down the number of accounts you have, crossing off debts, automating monthly tasks like paying bills and transferring money to savings, and focusing your efforts on just one or two financial goals at a time.
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SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.20% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.
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Community colleges offering two-year programs can be a wonderful option for students looking to gain a higher education in less time. It can also be a great option for those looking to save a little cash while bettering their current skills, prepping for a four-year university, or going for an associate’s degree.
Moreover, it can often save students thousands of dollars in the long run toward the career of their dreams too. Though community college can cost far less than a four-year school, it still isn’t free. Here are a few helpful ways to gain a little financial assistance for your personal education journey.
The Government Looks at Community College the Same Way It Does a Four-Year School
Federal student loans are available for both two- and four-year colleges. The process of applying for federal aid is the same, regardless of the school, as long as the Department of Education sees it as an “eligible degree or certificate program.” Vocational, career, trade, or online schools often offer federal loan options, but it’s not a guarantee. If you’re not sure whether your school participates in federal loan programs, you can confirm with your school before moving forward.
To apply for federal aid, including student loans, a potential student must fill out the Free Application for Federal Student Aid (FAFSA®). On the FAFSA, all would-be students will list the schools they are interested in attending using the Federal School Code. The schools listed will use the FAFSA application answers to determine the types and amounts of aid a student can receive.
After submitting the FAFSA, the applicant will receive an award letter from each school listed on the FAFSA application. This will tell you what aid you qualified for. If you plan on applying for federal aid to attend community college, consider applying as early as possible.
Some federal aid is determined on a first-come, first-served basis, so the earlier you submit your FAFSA, the better position you may be in to receive aid.
Those hoping to obtain a federal loan for community college can apply for one of three: Direct Subsidized, Direct Unsubsidized, and Direct Plus. Here’s how to determine which one of those may be the best fit for your education goals.
Direct Subsidized and Unsubsidized Loans for Community College
When it comes to borrowing federal student loans, the government offers both subsidized and unsubsidized loans to assist students in covering the cost of higher education. For both subsidized and unsubsidized loans, the school a potential student hopes to attend will determine how much a student is eligible to borrow.
Direct Subsidized Loans are based on financial need and they come with a major benefit — the U.S. Department of Education pays the interest while the student is still enrolled in school at least half-time and for the loan grace period (usually the first six months after leaving school).
Direct Unsubsidized Loans are similar to subsidized loans except that they are not based on financial need, they are based on your cost of attendance and other financial aid you receive. As such, the borrower would be responsible for all accrued interest on the loan. While not required to make payments as a student, there is an option to make interest-only payments on the unsubsidized loan.
When the interest on a Direct Unsubsidized Loan is not paid during periods of deferment, such as the grace period, the accrued interest will be capitalized. That means, when graduation day comes and the grace period ends, the interest that has accumulated on the loan will be added to the principal value of the loan and you’ll be responsible for paying off both. Interest will also continue to accrue based on that new principal.
There is an annual limit to how much money undergraduate students can borrow in Direct Subsidized and Unsubsidized Loans. For example, the limit for your first undergraduate year is $5,500 for dependent students (and $9,500 for independent students).
Direct PLUS Loans for Community College
There is another option from the government, known as the Direct PLUS Loan . This loan is available to parents of dependent students. Unlike both Direct Subsidized and Unsubsidized Loans, when a person borrows via a Direct PLUS Loan, he or she will be subject to a credit check. If the person has an adverse credit history, they may not be approved to borrow the loan.
If you are a parent of a dependent undergraduate student, you can receive a Direct PLUS Loan for the remainder of your child’s college costs not covered by other financial aid.
It’s important to note when a person borrows a Direct PLUS Loan, there are fees in addition to interest. With this loan, parents can borrow up to the cost of attendance (determined by the school) minus any other financial aid received. In order to obtain this loan, parents must qualify and their credit history will be checked. Interest will also accrue.
Private Student Loans
If a student does not receive enough aid through federal student loans or maxes out his or her eligibility for federal student loans, they can seek additional funding through private student loans. Private student loans can be borrowed from banks, credit unions, or other lenders.
Each institution has its own eligibility requirements so each borrower will have to check with individual lenders to see about qualifications. Like federal loans, there is usually a limit to the amount you can borrow with private loans, which can vary by lender. The limit might be the cost of tuition, less the amount of aid the student is already receiving, for example. However, the limit on some private loans may be higher than the federal loan limit.
Furthermore, government student loans come with deadlines to apply , while students may apply for private student loans at any time. But one major downfall of private student loans is the fact that they may also come with higher eligibility requirements, like a specific credit score, to even be considered. Additionally, private lenders aren’t required to offer the same borrower protections as federal student loans, such as a grace period or income-driven repayment plans. Because of this, private student loans are generally considered only after all other financing options have been thoroughly reviewed.
Several states also offer their own student loan programs to help students. To qualify for many of these loans, a student must be a resident of the state program you’re applying for, or an out-of-state student enrolled in a college or university within that particular state. Check out each state’s student loan offerings here .
Saving Post-Graduation
Even if you went to community college, you may still graduate with student loan debt. But, there’s a way you can save after graduation as well. Upon completion of your degree (or, if you’ve already finished school), you may want to consider looking into student loan refinancing with SoFi.
This way, you may be able to get a better interest rate than what you originally qualified for or change the terms of your loan to fit your post-grad life. And you can focus on earning and saving for your future thanks to your hard-earned education.
When you refinance with SoFi there are no prepayment penalties or origination fees. Plus you’ll gain access to benefits like community events, career coaching. To see what your student loans could look like after you refinance with SoFi, take a look at our easy to use student loan refinance calculator.
Private Student Loans With SoFi
Community college students have a variety of options available to them when paying for their education. In addition to some scholarships or grants, students may use student loans, either federal or private, to help pay for college.
Private student loans can be an option for students who are looking to fill in financing gaps. SoFi offers no fee student loans with competitive interest rates available for qualifying borrowers. SoFi student loans also allow borrowers to select one of four flexible repayment plans.
Find out more about the student loan options available from SoFi. You can get a quote from SoFi in just a few minutes.
FAQ
Will student loans pay for all of college?
Student loans can be used to pay for college expenses. There are borrowing limits depending on the loan type. For example, first-year dependent students may be eligible to borrow up to $5,500 in Direct Loans. Of this, no more than $3,500 can be subsidized loans. Students may look to alternatives like private student loans to fill in gaps. The borrowing limit for federal student loans is determined by the individual lender.
How much are student loans for an associate’s degree?
Student loans for community college are available, including for associate’s degrees. In order to borrow a federal student loan, potential borrowers must be enrolled in an eligible degree granting program, as defined by the U.S. Department of Education. These programs may include associate degree programs.
What do you do if you can’t afford college?
If you can’t afford college, consider evaluating the costs and programs available at different colleges. Consider factors like location and room and board, in addition to tuition. Also fill out the FAFSA form, which allows students to apply for federal financial aid including grants and scholarships (which don’t typically need to be repaid) and federal student loans (which do need to be repaid). Consider contacting the financial aid office at your school for more personalized information.
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs.
SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility-criteria for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.
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.
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
It can sometimes seem like there are an endless amount of student loans, but there are borrowing caps in place. Students face both annual and lifetime borrowing limits for federal student loans. The lifetime aggregate limit for undergraduate students is $57,500, of which no more than $23,000 can be in subsidized loans. For graduate students, the lifetime borrowing limit is $138,500, of which, no more than $65,500 can be in subsidized loans.
Private lenders may also have lifetime and annual borrowing limits, though those limits will be set by the lender. It’s possible to hit the maximum amount of loans allowed before finishing school, so it’s helpful to understand how much you may be eligible to borrow.
• The lifetime aggregate limit for undergraduate students on federal student loans is $57,500, with no more than $23,000 in subsidized loans.
• Graduate students face a lifetime borrowing cap of $138,500, which includes undergraduate loans, with a maximum of $65,500 in subsidized loans.
• Private lenders also set annual and lifetime borrowing limits, which generally do not exceed the cost of attendance minus any financial aid received.
• The total cost of attendance includes tuition, fees, room and board, books, supplies, and transportation.
• Students nearing their federal loan limits may need to seek additional funding through private loans or other financial resources.
What Is the Lifetime Limit for Student Loans?
Students have the option to borrow federal student loans, private student loans, or both. Depending on factors like your year in school, there are aggregate and lifetime limits for borrowing.
Federal Student Loan Lifetime Limits
Federal loans have both annual and lifetime limits. The limits can vary by student, depending on three factors, including:
Independent students, who the U.S. Department of Education considers to be on their own financially, can borrow more than dependent students who can typically get help from their parents.
Even if you’re financially independent of your parents, the definition of an independent student is fairly strict, and if you are under the age of 24, you’ll need to confirm you qualify as an independent student. If you’re not sure what you qualify as, see your guidance counselor or an admissions counselor who may be able to help.
If you’re not sure what you qualify as, see your guidance counselor or an admissions counselor who may be able to help. Here’s how the loan limits shake out depending on your status and year in school, straight from the U.S. Department of Education:
Year In School
Dependent Students*
Independent Students**
First-year undergraduate
$5,500 — no more than $3,500 can be subsidized
$9,500 — no more than $3,500 can be subsidized
Second-year undergraduate
$6,500 — no more than $4,500 can be subsidized
$10,500 — no more than $4,500 can be subsidized
Third-year and beyond undergraduate
$7,500 — no more than $5,500 can be subsidized
$12,500 — no more than $5,500 can be subsidized
Graduate and professional student annual limit
N/A (all graduate and professional degree students are considered independent)
$20,500 — none can be subsidized
Lifetime limit
$31,000 — no more than $23,000 can be subsidized
$57,000 for undergraduates — no more than $23,000 can be subsidized
$138,500 for graduate and professional students — no more than $65,500 can be subsidized
*Except students whose parents are unable to obtain PLUS Loans.
**And dependent undergraduate students whose parents are unable to obtain PLUS Loans.
Note that the lifetime limit for graduate and professional students includes the amount in federal loans you borrowed during your undergraduate studies.
Private Student Loan Lifetime Limits
If you choose to borrow private student loans, know that the annual and lifetime limit may vary by lender. That said, the annual limits typically cannot exceed the cost of attendance at your school, less any financial aid you have already received.
The total cost of attendance is a number determined by your school and typically includes tuition and fees, on-campus room and board, books, supplies, transportation, and dependent care.
As for lifetime limits, it may depend on whether you’re an undergraduate student or a graduate student. Some private lenders may offer higher limits if you’re doing an MBA or going to law or medical school, for example.
Some lenders have just one limit for all loans. But in some cases, you may even see two-lifetime limits: one for loans through the private lender and one for total federal and private loans.
So, if you’re considering borrowing from a private lender, ask about their loan limits before applying to make sure you get the funding you need.
What to Do If You’ve Hit the Maximum Federal Student Loan Amount
If you’ve reached your lifetime limit for federal student loans or you’re close to it, it’s probably time to start thinking about how you’re going to repay your student loans. Here are some options if you’ve maxed out your options for federal loans.
Consider Student Loan Refinancing
One way to make progress toward paying off your student loans and potentially save money along the way is to refinance them with a private lender (provided you haven’t reached your limit with these loans, too). Student loan refinancing can allow you to replace your current loans with a new one.
In some cases, you may qualify for a lower fixed or variable interest rate than what you’re currently paying. You could also adjust your repayment schedule to pay off your student loans faster or take some more time to fit your budget better.
With a lower interest rate, you could reduce the amount of money you spend on interest over the life of the loan. If you lengthen the term of your loan you’d decrease your monthly payments but will pay more in interest over the life of the loan.
In other words, if you refinance your student loans, you may get more flexibility with your payments as you eliminate your debt. However, it is important to note that if you refinance your student loans with a private lender, you may forfeit eligibility for federal benefits, such as student loan forgiveness.
Check Out Federal Assistance Programs
If you’ve maxed out your federal student loans because your income isn’t where you’d like it to be, you may want to take a look at federal programs like income-driven repayment plans, deferment, or forbearance instead — all of which you’d give up access to if you refinance with a private lender.
Consider a Private Student Loan
If you’ve reached your limit on federal student loans but still need some assistance paying for your tuition, you might consider taking out a new private student loan. There are options for fixed or variable private student loans, and some lenders like SoFi offer flexible repayment options. Partial, deferred, or interest-only payments put a bit less strain on your budget.
The Takeaway
There are both annual and lifetime borrowing limits for federal student loans, the lifetime limit for undergraduate students is $57,550, of which no more than $23,000 can be in subsidized loans. Private lenders may also have borrowing limits, but they will be set by the lender. Generally speaking, private student loans are limited to the cost of attendance.
SoFi is one of the leading private student loan lenders and offers fee-free private student loans with competitive interest rates for qualifying borrowers. The simple application can be completed entirely online.
Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs.
SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility-criteria for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
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.
