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Students applying for financial aid for graduate school are likely familiar with the process of applying for federal financial aid, but graduate students should be aware of the fact that they’re almost always considered independent, and many will want to learn the maximum amount they can borrow.

The lifetime graduate student aggregate loan limit for Subsidized and Unsubsidized federal loans is $138,500. Of this amount, no more than $65,500 can be in subsidized loans. This is the aggregate limit that includes loan amounts borrowers use to pay for undergraduate and graduate studies.

Students could also borrow private student loans, which could potentially increase the amount of student loans an individual could borrow. Continue reading for more details on the different types of student loan limits.

Federal Student Loan Limits

Students can apply for federal aid to help fund graduate school. Students are encouraged to fill out the FAFSA® (the Federal Application for Federal Student Aid) to see if they qualify for help. Graduate requirements of FAFSA are similar to those for undergraduate students. Eligibility for federal aid is based on a student’s income, among other factors, so not everybody will be eligible for all types of aid.

As mentioned, the lifetime aggregate limit for Subsidized and Unsubsidized student loans is $138,500 for graduate or professional students. Of this amount, no more than $65,500 can be in subsidized loans. This is the aggregate limit, so does include student loans borrowed during undergraduate study.

Recommended: High Income Financial Aid

If students want to take out more federal loans, they’ll have to pay off some of their debt first. Then they can borrow up to the limit again. There are also maximum borrowing limits in place for Direct Unsubsidized Loan and Direct PLUS Loans for graduate or professional students. These limits are outlined below.

Direct Unsubsidized Loans

Let’s look at direct subsidized vs. direct unsubsidized loans. Graduate students cannot receive direct subsidized loans. Those loans are only available to undergraduate students who show financial need. If students took out these loans as undergraduates, that amount will be included in the lifetime limit of federal loans they’re allowed to receive.

For direct unsubsidized loans, the annual limit is $20,500. All graduate or professional students are considered independent for this loan. Unsubsidized loans aren’t dependent on students demonstrating financial need. The schools will decide how much students receive based on their annual costs and how much aid they’re receiving from other sources.

Direct PLUS Loans

Graduate students with eligible credit can also take out Direct PLUS Loans, issued by the U.S. Department of Education. These loans have an annual limit of the cost of attendance, subtracting any other aid that is received.

Private Student Loan Limits

The maximum amount that students can borrow with a private student loan will depend on the lender. Usually, they won’t lend students more than it costs to attend school.

The cost of attendance is an estimate of tuition and fees, books and supplies, living expenses, transportation, and other miscellaneous expenses. The estimate can also include dependent care, study-abroad programs, and costs related to disabilities.

Recommended: Private Student Loan Guide

Graduate Student Loans vs Undergrad Student Loans

Undergraduate students may be eligible for Direct Subsidized Loans. The government covers the interest that accrues while a student is enrolled at least half-time in school. Graduate students are not eligible for this loan type.

Direct Unsubsidized Loans are available to both graduate and undergraduate students. The undergraduate student federal loan has a lower interest rate than the unsubsidized loan for graduate students. Undergrads have an interest rate of 5.50% for the 2023-2024 school year, while it is 7.05% for graduate students.

Direct PLUS Loans are available for graduate students. Only undergraduate students who are considered independent, or who are dependent undergraduate students whose parents are unable to obtain PLUS Loans may be eligible to borrow a PLUS loan.

Graduate School Resources

Be sure to fill out your grad school FAFSA to see if you qualify for federal aid including federal student loans. Some students will hit the max of federal aid but still need more. In that case, they have a couple of options. Students can try to pay off some of the loans and then borrow more, up to the limit, again. If they don’t want to or are unable to pay off some of their federal loans to take out more federal loans, they can opt for a private loan.

Grants and Scholarships

When students submit their FAFSA®, their eligibility for certain grants will be considered. The school may also have information on local or institutional-based grant programs.

Grad students also have the option of doing a graduate assistantship, where they teach or work on research under the supervision of a professor. Assistantships sometimes pay a stipend or provide benefits like housing. Students can check with their schools to see if that option is available to them.

Scholarships and fellowships are also available to help pay for graduate school. There are many ways students can go about finding and applying for grad school scholarships. Students can check with their school’s financial aid department, or even the department they’re studying under, to see what is available. There’s usually a wide variety of scholarships available from various sources, including schools, employers, companies, and nonprofit organizations. Scholarships can be either merit based or need based, so the eligibility will vary.

Recommended: Scholarship Search Tool

The Takeaway

The aggregate limit for Unsubsidized and Subsidized loans for graduate students is, as mentioned, $138,500, no more than $65,500 can be in subsidized loans. For the PLUS Loan, the annual borrowing limit is no more than the cost of school minus other forms of financial aid. Limits for private student loans may vary by lender but, generally, a private lender will not let you borrow more than the cost of attendance.

Private loans could be an option for students who have exhausted federal options and still need more to fund their education. SoFi offers student loans with competitive interest rates for qualifying borrowers and an easy, online application. Plus, as a SoFi member, you’ll be able to access additional benefits like career coaching.

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.

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

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

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Missing a credit card payment can happen to anyone. But a credit card late payment may also come with certain consequences, such as late fees, interest accrued on the credit card balance, and potential negative impacts to your credit score. The longer you go without paying your bill, the more consequences you may experience.

Here’s a look at what happens if you miss a credit card payment and solutions to help prevent this from happening in the first place.

When Is a Credit Card Payment Considered Late?

As soon as you fail to pay your credit card bill by the due date, it’s considered past due. Your credit card company may send you notices about it in the form of calls, emails, letters, or texts. You could also face some financial consequences for being late.

What Happens if You Make a Late Credit Card Payment?

The Credit Card Balance Could Increase

Even if you didn’t use the card to make new purchases during a particular billing cycle, making a late payment could still potentially increase your balance in a few different ways.

With even the first missed due date, the credit card company can charge a late fee of up to $30. If you miss another payment within the next six billing cycles, the late fee can go up to $41.

The silver lining here is that the late fee can’t be more than the minimum amount due on the account. So, for instance, if your minimum payment is $25, your late fee won’t exceed $25.

There’s also a chance the creditor could increase your interest rate if your payment is late by a certain number of days. Increasing your interest rate will also increase your total credit card balance because that new, higher rate (generally referred to as a “penalty APR”) will apply to the entire unpaid balance.

Not all credit card companies have penalty APRs for late payments, so check with your credit card company to verify.

Recommended: What Is APR on a Credit Card?

Your Credit Score Might Be Affected

Your credit score includes information about your credit history, such as your payment history and the standing of your accounts, so a late payment could have a negative impact.

Generally, creditors send information to credit bureaus using different codes to indicate if a payment is current or late. Since there is no credit code for payments that are one to 29 days late, they may use a “current” code.

Once the payment is more than 30 days late, however, creditors generally use the “late” code to denote that the payment is delinquent. But different creditors will send different codes at different times so there’s no way to know for sure when you will see the late payment reflected in your credit report.

Creditors may not report a late payment to credit bureaus until a full billing cycle has gone by with no repayment (typically 30 days). So, for example, if your payment’s due date was the 11th and you paid on the 13th, there’s a chance your credit won’t take a hit.

Although every situation is different, a late payment might end up staying on your credit report for several years. And because credit history is just one factor used to determine your credit score, it’s hard to predict exactly how a late payment will impact your overall score.

The Balance Could Be Charged Off

Another consequence of not paying your credit card bill is that the credit card company may not allow you to continue to use your card for other purchases until your account is in good standing.

What’s more, if your payment is 180 days past due, the credit card company can close your account and charge off the balance. “Charging off” means the credit card company will permanently close the account and write it off as a loss, but the debtor still owes the balance remaining.

Sometimes, credit card companies will attempt to recover what’s owed through their own collection department, but charged-off debts are sometimes sold to third-party collection agencies, which then attempt to get payment from the debtor.

Credit card companies do have leeway to work with their customers. Under FDIC regulations governing retail credit, the creditor can help customers who have had financial setbacks — like job loss or the death of a family member — get back on track.

This leniency is typically shown to people who are willing and able to repay their outstanding debt, and the FDIC encourages creditors to proceed with this step with a structured repayment plan and to monitor the progress of the plan.

How to Resolve a Credit Card Late Payment

Make a Payment Right Away

If the payment just slipped your mind, don’t panic. Paying the credit card balance in full immediately helps avoid accruing interest charges and potentially saves your credit score from dropping. Alternatively, you might want to ask your credit card company about arranging a payment plan to minimize the damage.

Negotiate Fees

Even though your credit score may not drop because of one missed payment, you may incur late fees or a penalty interest rate (or, more accurately, a penalty APR as mentioned above), which will likely increase your total balance.

However, sometimes credit card companies are willing to work with customers to waive those fees. Calling your credit card company to request a waiver of late fees could be a first step, especially if your account is up to date and you’re not a repeat offender.

If your credit card company seems unwilling to change your rate back to the original amount, you might consider asking if they will do so once you show responsible payment history.

Automate Your Credit Card Payments

To help prevent any late payments in the future, you may want to consider setting up autopay to cover the minimum payment on your credit cards.

This way, if a payment slips your mind, you shouldn’t face any late payment consequences. Setting your bill to be automatically paid in full a few days before the payment is due can ensure you pay your balance in time.

If you would prefer not to sign up for autopay, many credit card companies have an option to sign up for notifications that remind you when your payments are due.

Getting Out of Credit Card Debt

To avoid late credit card payments once and for all, you may want to consider solutions for getting out of credit card debt entirely. Strategies depend on your unique financial situation, of course, but here are some you might want to explore.

Budget to Get Out of Debt

Creating a budget can help you better manage your money so you know what you have coming in and going out. You can use either a simple spreadsheet or a spending tracker app to simplify your efforts.

Once you have a handle on how much extra money you can put toward your debt, you may want to select a debt repayment strategy, such as the snowball method or avalanche method.

With the snowball method, the focus is on paying off the smallest debt balance first and then moving on to the second smallest debt balance, and so on, while still making minimum payments on all debt. This type of method is meant to give a psychological boost.

The avalanche method tackles the debt with the highest interest rate. Since you’re starting with the most expensive debt, this strategy can be a big money saver in the long run.

Open a Balance Transfer Credit Card

If your credit is in good standing, opening a balance transfer credit card could be a solution. Usually, these types of credit cards come with low or 0% APRs for a certain period.

Some companies may offer up to 21 months of interest-free payments during the promotional period. But it’s important to note that while the introductory period might be interest-free, you may still have to pay a balance transfer fee between 2% and 5%.

Ideally, you would pay your credit card balance in full by the time the introductory period is over, which would allow you to avoid interest payments on the debt.

Keep in mind, however, many balance transfer credit cards have restrictions. For example, if you make a late payment, you may lose your introductory rate.

Another limitation may be that your introductory APR only applies to the transferred balance and all other transactions may have a higher rate.

Before taking out another line of credit, understand that it can impact your total credit score. Credit scores are calculated using several factors, including credit history and new credit, both of which could be affected when opening a new account.

Consolidate Debt with a Personal Loan

Another option may be to combine separate payments into one credit card consolidation loan, hopefully for a reduced interest rate. While a loan doesn’t erase your debt, it can help you focus on one monthly payment, which might enable you to pay down your debt faster.

As you compare rates, it’s important to understand how a new loan could pay off in the long run. If your monthly payment is lower because the loan term is longer, for example, it might not be a good strategy, because it means you may be making more interest payments and therefore paying more over the life of the loan. You can use an online personal loan calculator to get an idea of how much interest you could save by using a personal loan to pay off debt.

Recommended: 11 Types of Personal Loans & Their Differences

The Takeaway

Late credit card payments can happen to anyone, but unfortunately, they may come with consequences, like late fees, interest, or a temporary hit to your credit score. And the longer your bill goes unpaid, the more consequences you may experience. Fortunately, there are ways to resolve a late payment, starting with making a payment as soon as you realize one is overdue. If you incurred penalty fees, you can ask your credit card company for a one-time waiver and look into setting up automatic payments to ensure your future bills are paid on time.

Looking into ways to pay down your debt? Budgeting is one solution, as it helps you keep tabs on where your money is going. If combining multiple bills into one fixed monthly payment, at a potentially reduced interest rate, is part of your strategy, then a credit card consolidation loan may be an option to consider. (Debt management is a common use for a personal loan.)

If you are thinking about taking out a loan to consolidate your debt, 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

Can you go to jail for not paying credit card bills?

No, you can’t be arrested for not paying your credit card bills.

What happens if you never pay your credit card bill?

There are some serious potential ramifications for not paying your bills. The delinquency may be noted on your credit report, which can damage your credit score. You could even face a civil lawsuit if the debt goes unpaid.

Can my creditor garnish my wages for not paying my credit card?

Yes, if your credit card debt has been sold to a debt collector, and the collector has a court judgment, then they can garnish your bank account or wages.

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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 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.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

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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Medical school is an academically rigorous undertaking. Finding a way to pay for medical school can be another added challenge. Keep reading for more insight into how to pay for medical school.

What Is Medical School?

Medical school is typically a four-year educational program that leads to graduating students receiving an M.D., D.O. or N.D. degree. After medical school, graduates will generally continue onto a medical residency in the specialty of their choice.

Different Types of Medical School

There are three main types of medical school: allopathic, osteopathic, and naturopathic. All of these programs prepare students for careers as doctors, but they have different academic credentials. Let’s take a closer look at each of these programs.

Allopathic Medical School

Allopathic medicine is also known as conventional or traditional medicine. Allopathic medical schools provide students with a traditional curriculum and approach to medicine. Allopathic doctors rely on traditional methods such as x-rays, prescriptions medications, surgery to treat and diagnose an illness or medical issue, and treating an illness. If a student graduates from an allopathic program, they’ll receive a Doctor of Medicine (M.D.) degree.

Osteopathic Medical School

Osteopathic schools also cover standard medical sciences and practices but supplement those lessons with training on providing touch-based diagnosis and treatment of different health problems. Osteopathic doctors often take a more holistic approach to patient wellness and treatment. Students who attend an osteopathic medical school will end up with a Doctor of Osteopathic Medicine (D.O.) degree.

Naturopathic Medicine School

Naturopathic physicians (ND) or doctors of naturopathic medicine (NMD) attend naturopathic medical school where they study a similar science curriculum as they do in allopathic medical school. The difference with this program is, naturopathic students also study psychology, nutrition, and select complementary therapies such as homeopathy.

Recommended: Average Cost of Medical School

Financing Medical School

The cost of medical school is on the rise and finding a way to finance medical school can be a daunting task. There are quite a few options for medical students to get help doing so. From taking out student loans for medical school to gift aid, students have options.

Scholarships & Grants

A little bit of free money can really come in handy when a student has to pay for medical school and can help students avoid taking on more debt from medical school than they need to. Students can apply for need-based grants and merit scholarships through their medical school or outside sources. Their school’s financial aid office can walk them through their options.

Medical associations and nonprofit organizations also tend to have financial aid, grants for college, and scholarships that medical students can apply for. Again, a school’s financial aid office can help point medical students in the right direction, but they won’t know of every gift aid opportunity available outside of their school, so students may want to do their own research.

The following associations generally offer scholarships and grants for medical students.

•   American Medical Association. This professional group provides financial support through scholarship opportunities, as well as general support for medical students looking to learn more about how to pay for medical school and to prepare for residency.

•   American Medical Women’s Association. Medical students can peruse this association’s list of more than a dozen different scholarships, awards, and grants that they may be eligible to apply to.

•   American Podiatric Medical Association. Every year, the American Podiatric Medical Association gives out more than $200,000 worth of grants and scholarships.

Federal Student Loans

Medical students can apply for federal financial aid, including federal student loans, by <completing the Free Application for Federal Student Aid (FAFSA®). Medical students may qualify for three types of federal loans after they complete the FAFSA. The FAFSA may also qualify students for financial aid such as scholarships and grants from their state or school (if available).

•   Federal Direct Unsubsidized Loans. Also known as Stafford Loans, Federal Direct Unsubsidized Loans allow students to borrow money unsubsidized. When a loan is unsubsidized, this means that the borrower is responsible for paying all of the interest on the loan.

•   Federal Direct Graduate PLUS Loans. If a student still needs help financing medical school after taking out a Federal Direct Unsubsidized Loan, they can take out a Federal Direct Graduate PLUS Loan, which is also unsubsidized. These loans tend to have a higher interest rate than Federal Direct Unsubsidized Loans do and are credit-based.

•   Health Resources and Services Administration (HRSA) Primary Care Loan. Medical students with financial need, and who can demonstrate it, may qualify for this school-based program that offers a few different types of loans for medical students. Not all medical schools participate in this program, but students can check with their school’s financial aid office to see if their school does take part in it.

Recommended: Types of Federal Student Loans

Private Student Loans

After applying for federal student loans, students may be interested in supplementing their federal support with private medical school loans. Generally, private student loans for medical school are available through banks or credit unions. How much a student will pay in interest for a private student loan will depend on what their credit history is, amongst other factors. There are private student loans available at fixed and variable interest rates.

While private student loans can be a helpful option for borrowers, they don’t always offer the same borrower protections as federal student loans — such as income-driven repayment plans or the opportunity to pursue Public Service Loan Forgiveness. Because of this, students generally resort to private student loans only after depleting all other financing resources.

Recommended: Private Students Loans vs Federal Student Loans 

SoFi’s Private Student Loans

SoFi is also a provider of private student loans that can be used to pay for medical school. To apply, students don’t even need to leave their house. The application is done entirely online and it only takes a few minutes to apply, even if the student applies with a cosigner.

To make financing medical school less stressful, borrowers can repay their SoFi student loans in a way that works for them by choosing a monthly student loan payment and rate that fits their budget.

Borrowers never have to worry about fees because SoFi’s student loans are fee free. SoFi also offers borrower’s a six-month grace period after graduation so that they have time to get settled in their new job as a doctor before they need to start making monthly loan payments.

The Takeaway

Between scholarships, grants, and medical school student loans, medical students have some decent options at their disposal for financing medical school. While there’s no denying that medical school can be a stressful time in a person’s life, hopefully all of the hard work and sacrifices will lead to a fulfilling and rewarding career.

For help financing medical school, learn more about SoFi private student loans.

FAQ

What is the best way to pay for medical school?

If a student can secure scholarships and grants, that’s the best way to pay for medical school. Unlike student loans which must be paid back, gift aid is free money that medical students won’t have to pay back after graduation.

How do you get medical school paid for?

Medical students can apply for scholarships and grants to help cover the cost of medical school. After applying gift aid, students can take out federal or private student loans to cover the remaining costs of attending medical school. Paying in cash is also an option, but one that is understandably not within reach for a lot of people.

Is it hard to get loans for medical school?

There are both federal and private student loans available to medical students, so they generally have plenty of options that make it possible to get a loan for medical school.

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Photo credit: iStock/FatCamera

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.

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

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

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Figuring out how to pay for school can be stressful, so it’s important to compare financial aid vs student loans so that you can reduce your financial burden as much as possible and find out what’s right for you.

When college financial aid isn’t enough, people use federal or private student loans to help cover costs. Private student loans can also close gaps between what you qualify for and how much you need. We’ll compare student loans vs financial aid and explore some features that can help you determine what makes the most sense for your financial situation.

What Is Financial Aid?

Financial aid is funding that is available to students to help make college or career school more affordable. College financial aid comes in several forms and helps students pay for higher education expenses, including tuition and fees, room and board, books and supplies and transportation.

Here are several types of financial aid available to students:

•   Scholarships: A scholarship is a form of financial aid that’s awarded to students to help pay for school. Scholarships are typically awarded based on academic or athletic achievement, community involvement, job experience, field of study, financial need and more.

•   Grants: A grant is a form of financial aid that doesn’t have to be repaid and is generally based on financial need.

•   Federal work-study programs: The federal work-study program offers funds for part-time employment to help eligible college students in financial need.

•   Federal student loans: Student loans are borrowed money from the federal government or private lenders to help pay for college.

Financial aid can come from federal, state, school, and private sources. Federal Student Aid, a part of the U.S. Department of Education, is the largest provider of student financial aid in the U.S. Federal aid is distributed to 13 million students each year, totaling $120 billion.

Recommended: Am I Eligible for Work-Study?

What Are Student Loans?

A student loan is money borrowed from the government or a private lender to help pay for school with the expectation that you will pay it back. Like most other types of loans, the amount borrowed will accrue interest over time. Student loans can be used on school-related expenses including tuition, room and board, and other school supplies.

Loans are different from grants or scholarships and it’s essential that you understand the differences between financial aid vs student loans. If you receive a grant or a scholarship, you typically don’t have to pay that money back. Student loans are also different from work-study programs, where students in financial need to work part-time jobs to earn money to help pay for school.

It’s common for college students to take out student loans to finance their education, but you should first compare federal vs private student loans. Federal student loans offer some borrower benefits that make them preferable to private student loans.

Federal Student Loans

Federal student loans are loans that are backed by the U.S. government. Terms and conditions of the loan are set by the federal government and include several benefits, such as fixed interest rates and income-driven repayment plans. To qualify, students must fill out the Free Application for Federal Student Aid (FAFSA®) every year that they want to receive federal student loans. The FAFSA also allows students to apply for federal aid including scholarships, grants, and work-study. Colleges may also use the information provided on the FAFSA to determine school-specific aid awards.

There are four types of federal student loans available:

•  Direct Subsidized Loans are student loans for undergrads in financial need to help pay for expenses related to higher education. The government covers the accruing interest on this type of loan while the borrower is enrolled in school at least half-time and during the loan’s six month grace period after graduation.

•  Direct Unsubsidized Loans are made to eligible undergraduate, graduate and professional students. Eligibility is not based on financial need. Borrowers are responsible for all accrued interest on this type of loan.

•  Direct PLUS Loans are made to graduate or professional students, known as the Grad PLUS loan, or parents of dependent undergraduate students, known as the Parent PLUS loan. These loans are meant to help pay for education expenses not covered by other financial aid.

•  Direct Consolidation Loans allow students to combine all eligible federal student loans into a single loan.

Private Student Loans

Private student loans can also be used to help pay for college. Private student loans are offered by banks, credit unions, and online lenders. Understanding how private student loans work is essential before borrowing. While federal student loans are generally the first option potential student borrowers pursue, private student loans may be an option to consider for borrowers who are trying to pay for college without financial aid. Unlike federal student loans, which have terms and interest rates set by the federal government, private lenders set their own and conditions that vary from lender to lender.

Private student loans are also credit-based. The lender will review an applicant’s credit history, income and debt, and whether they’re enrolled in a qualified educational program. Applicants who may lack credit history, or have a less than glowing credit score may consider applying with a cosigner to improve their chances of approval.

Unlike federal student loans, interest rates can be fixed or variable. A fixed interest rate stays the same for the life of the loan but a variable interest rate may change. The interest rate a borrower qualifies for will also depend on the lender as well as the borrower’s creditworthiness.

Not all private student loans are the same. Because of this, it’s important that you understand the annual percentage rates (APRs) and repayment terms before taking on the loan.

Financial Aid vs Student Loans Compared

When comparing financial aid vs student loans, you need to be aware of the similarities and differences between financial aid vs student loans. Here are some key comparisons.

Similarities	Differences
They can both be used to help fund education-related expenses.	Financial aid doesn’t typically need to be repaid. Student loans must be repaid within a given loan term, plus interest.
FAFSA® must be filled out for financial aid and federal student loans.	Financial aid and student loans may be paid out differently.
Financial aid and student loans have certain eligibility requirements.	Some financial aid, like scholarships, may be awarded based on merit. Federal student loans can be both need and non-need based. Lending criteria on private student loans is determined by the lender.

Similarities

Financial aid and student loans are both used to help fund education-related expenses, like tuition, room and board, books and classroom supplies, and transportation. Financial aid and student loans backed by the federal government also require students to fill out FAFSA® for each year that they want to receive federal student loans or federal financial aid. Financial aid and student loans also have some sort of eligibility requirements, whether that be based on financial need, merit or creditworthiness.

Differences

The biggest difference between financial aid vs student loans is whether or not you need to pay back the money you are given to help pay for college. Financial aid is either money that doesn’t need to be paid back, known as gift aid, or earned through a federal work-study program.

Student loans must be repaid within a given loan term. Not only are students expected to pay back student loans, but there’s typically interest that accrues over the life of the loan.

There may also be differences in how financial aid and student loans are paid out to the student. Private student loans are usually paid in one lump sum at the start of each school year or semester; however, you may not receive the full amount of a scholarship award upfront. Government grants and loans are generally split into at least two disbursements and If you have a work-study job, you’ll be paid at least once a month.

Some private student loans may also come with greater flexibility and offer more money than financial aid.

Recommended: Gift Aid vs Self Help Aid For College

Pros and Cons of Financial Aid

Pros of Financial Aid

•  Money received through financial aid does not typically have to be repaid.

•  Potential to decrease future debt by minimizing the amount you have to borrow.

•  Opens up new opportunities for many students to attend a better school than they could without financial assistance.

•  Allows students to focus on their education instead of worrying about paying tuition.

Cons of Financial Aid

•  Most financial aid does not cover all school-related costs.

•  Scholarships, grants, and work-study programs can be highly competitive.

•  You may have to maintain certain standards to meet eligibility requirements during each semester.

•  There’s less flexibility on how you can spend funds.

Pros and Cons of Student Loans

Pros of Student Loans

•  Student loans offer financial support for those who would otherwise be unable to attend college.

•  You don’t need any credit history for federal student loans and you can use a creditworthy cosigner for private student loans.

•  Student loans can be used for things beyond tuition, room and board, and books.

•  Paying off student loans may help you build credit.

Cons of Student Loans

•  You start off with debt after graduating from college.

•  Student loans can be expensive.

•  Defaulting on student loans can negatively impact your credit score.

•  If you borrowed a private student loan, the interest rate may be variable.

Private Student Loans from SoFi

Financial aid and student loans financially support students by relieving some of the financial burden that’s often associated with higher education. When financial aid isn’t enough, students may seek private student loans to help cover their college costs. Although private student loans don’t come with as many perks as federal student loans, and are generally borrowers only as a last resort option as a result, they can help fill in the gaps between what you qualify for and how much you need.

Private student loans from SoFi can help serve as a supplement to federal aid. SoFi student loans offer plenty of benefits, such as no origination fees, no application fees, no late fees, and no insufficient fund fees. You can find out if you pre-qualify within minutes.

Learn more about private student loan options available with SoFi.

FAQ

Does FAFSA loan or grant money?

FAFSA is an application that you fill out in order to determine your eligibility for receiving a federal loan or federal student aid such as grants and scholarships. While a federal student loan is borrowed money that must be repaid after graduation, funds received through grants, scholarships, and work-study programs do not need to be repaid.

Can you get financial aid and student loans at the same time?

Yes. If you apply for financial aid at your school, you may be offered loans as part of your school’s financial aid offer to help cover the remaining costs.

Do scholarships count as financial aid?

Yes, scholarships are a type of financial aid that is considered gift aid and typically do not have to be repaid.

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Photo credit: iStock/Altayb

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.

Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

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.

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Juggling parenting, late-night studying, and possibly a job can wear on anyone, but time and money constraints can especially affect single parents. As a single parent, you may quickly realize that obtaining student loans will be an important factor in successfully completing your college journey.

So, how do you get that “single mom loan” or “single dad loan” to help you out? In this piece, we’ll spend some time comparing private and federal student loans and walk through options for student loans for single mothers and fathers. We’ll also cover the process that single parents can take toward getting private student loans and federal student loans.

What Are Student Loans?

Put simply, student loans allow you to borrow money from either the federal government or a private lender to help you pay for college costs. Student loans can help you cover tuition, fees, supplies, books, rent, living expenses, and other necessary school-related expenses.

Private vs. Federal Student Loans

Single parents can obtain both private and federal student loans. But before you get on the student loan bandwagon, it’s important to understand the whole picture — the amount you can get in private and federal loans as well as how much you can get in scholarships and grants, which are money you don’t have to repay. You may also want to pay for school by reserving a cache of funds from a current job or pulling from some funds you have in savings.

In the next two sections, we’ll walk through the definitions of both private and federal student loans.

Federal Student Loans

The U.S. Department of Education, through the William D. Ford Direct Loan Program (also called the Direct Loan program), offers federal student loans for borrowers who need to finance college or career school.

In order to get a federal student loan, you must file the FAFSA or Free Application for Federal Student Aid every year. The FAFSA lets colleges and universities know about your financial situation by asking you to input information about your savings and checking account balances, investments, and more. The FAFSA will also help you qualify for more than just loans — you could also qualify for scholarships through your institution, grants, and also for a work-study program. The federal work-study program allows you to work for your college or career school and earn up to a certain amount of money.

When you file the FAFSA, you receive a Student Aid Report (SAR) which also reports your Expected Family Contribution (EFC), an index number that colleges use to determine how much financial aid you can receive.

You can qualify for Direct Subsidized or Direct Unsubsidized Loans or Direct PLUS Loans — you can only get a Direct PLUS loan as long as you are an independent student (that is, nobody can claim you on their taxes) or if you are a graduate student.

Most types of federal student loans don’t require a credit check. Independent students may qualify for the following amounts and limits:

•  First-year undergraduate students: $9,500 (no more than $3,500 of this amount may be in subsidized loans)

•  Second-year undergraduate students: $10,500 (no more than $4,500 of this amount may be in subsidized loans)

•  Third-year and beyond undergraduate students: $12,500 (no more than $5,500 of this amount may be in subsidized loans)

•  Graduate or professional students: $20,500 (unsubsidized only)

The current interest rate for Direct Subsidized and Direct Unsubsidized loans is 5.50% for undergraduate students, and the rate for Direct Unsubsidized loans is 7.05% for graduate or professional students. The interest rates are fixed for the life of the loan.

Private Student Loans

The main difference between a private student loan and a federal loan is that you don’t get a private student loan from the federal government like you do a private student loan. You can get a private student loan from a bank, credit union, or another financial institution to finance college or career school.

In general, it’s a wise idea to exhaust all of your federal grant and loan options before you consider private loans because interest rates are usually higher for private student loans compared to federal student loans. The amount you can borrow depends on the costs of your degree, but also depends on personal financial factors (such as your credit score and income). Additionally, private student loans don’t have to offer the same borrower protections and benefits available to federal borrowers, such as income-driven repayment plans.

Student Loans for Single Parents

Single parents can get both private and federal student loans. We’ll also go over some specific financial aid ideas for single parents.

Private Student Loans for Single Parents

As a single parent, you may have a limited amount of time to research your private student loan options, but it’s to your advantage to do so because you can ensure that you choose the right type (and the right interest rate). Take a look at three to five different private student loan lenders and compare everything apples to apples — interest rates, fees, repayment terms, deferment, forbearance and discharge options, as well as in-school repayment options.

Then, walk through the next steps:

1.   Give yourself plenty of time to apply for private loans. The application and approval process can take longer than you might think. Remember that you’ll need to monitor your financial situation each semester to make sure you have enough loan money to carry you through the academic year.

2.   Gather your personal information. Before you apply, you’ll likely need to have the following handy: Social Security number, employment information (including a recent paycheck stub), gross annual income, assets, rent or mortgage information, as well as tax returns. Specific application requirements may vary by lender.

3.   Apply for a private student loan. You can apply on a private student loan lender’s website. The lender will ask for the personal information listed above and possibly more than that — it’s a good idea to be open to that possibility. You’ll submit information about your school, graduation date, and loan amount needed. You must also agree to the lender’s terms and conditions, which you’ll want to read carefully, and proceed with the application.

Your search for financial aid doesn’t have to end with filing the FAFSA or applying for private student loans. You may also want to look for single-parent grants or scholarships through organizations that include your school, state government, federal agencies, charitable foundations and professional associations.

Jumping on Google and searching for “single parent college scholarships” turns up a lot of scholarships, such as the Educational Foundation for Women in Accounting Scholarships and the Patsy Takemoto Mink Education Foundation Scholarships . However, it’s important to verify the validity of the scholarship and steer clear of scholarship scams.

One of the most important things you can do is to contact your school’s financial aid office and explain your situation as a single mother or father. Many colleges and universities offer endowed scholarships for students and may be able to offer you financial aid specifically for single-parent families.

Learn more: Private Student Loans Guide

Federal Student Loans for Single Parents

To obtain a federal student loan, you must demonstrate financial need, be a U.S. citizen or eligible noncitizen, have a valid Social Security number, enroll in an eligible degree or certificate program, show successful completion of a high school degree or GED, maintain satisfactory progress in school, and sign the certification on the FAFSA.

Undergraduate students who show evidence of financial need can qualify for a Direct Subsidized Loan. Undergraduate, graduate, and professional students can qualify for a Direct Unsubsidized Loan, but eligibility is not based on financial need. The government pays the interest for Direct Subsidized student loans while you’re in school but does not pay the interest on Direct Unsubsidized loans during that time.

Graduate or professional students may qualify for a Direct PLUS Loan. Eligibility is not based on financial need, but you will undergo a credit check. Borrowers who have an adverse credit history must meet additional qualifications.

Direct Consolidation Loans allow you to combine all of your eligible federal loans.

You must go through entrance counseling to make sure you understand your loan repayment obligations and you must sign a Master Promissory Note, which shows that you agree to the terms of the loan.

Above all else, in addition to learning more about single parents’ loans at your school, it’s also important to contact the financial aid office at the school you want to attend to fully understand the financial aid process at your college or career school.

Private Student Loans with SoFi

You may have mastered budgeting as a single parent but acknowledge that federal and private loans for single moms and dads will be key for your degree completion. It’s important to remember that loans for single parents aren’t out of your reach.

Why not choose a private student loan with low fixed or variable rates from SoFi? SoFi offers low fixed rates or variable interest rates on school loans for single moms and dads. SoFi can help you get a private student loan that fits your current and future financial budget.

The Takeaway

Affording higher education as a single parent can be a challenge, but there are student loans, grants, and scholarships available to help ease the burden. Single parents can apply for federal student loans by filling out the FAFSA each year. If this aid isn’t enough, some students may consider applying for private student loans.

Learn more about private student loans with SoFi.

FAQ

Do you get more financial aid if you are a single parent?

Schools award need-based financial aid based on demonstrated need. If you demonstrate financial need, you’ll more than likely receive some type of financial aid from the college or university that you plan to attend. It’s very important to file the FAFSA to qualify for federal student aid and also talk to the financial aid office of your college or university for more information about the financial aid opportunities available to you.

How can a single parent afford college?

There are a number of ways that a single parent can afford college, and it starts with open communication between you and your school’s financial aid office. A few excellent steps you can take include: filing the FAFSA, looking for scholarships and grants in your community and comparing private loan lenders for private loans that fit your needs.

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Photo credit: iStock/Geber86

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.

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

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

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