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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.

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.

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

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.

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.

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.

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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Middle-class families today don’t make nearly enough money to afford full college tuition. In fact, many qualify for a significant amount of need-based financial aid.

This scenario is so common that some small, private colleges are beginning to “reset” their tuition prices to reflect what students actually end up paying after receiving financial aid, according to a New York Times report in Dec. 2022. For example, New Hampshire private school Colby-Sawyer dropped its published tuition from about $46,000 to $17,500.

Colby-Sawyer and other colleges are acknowledging what many parents and students already know. Plenty of middle-class kids who go to college don’t pay anywhere near the “sticker price.” Keep reading to learn how your family can maximize its financial aid with the help of a resource called the Common Data Set.

Stuck in the Middle

When you look at published tuition numbers, the cost of higher education has been rising at an astonishing pace over the past 20 years. But the amount that students actually pay is less than it was a decade ago, according to the College Board’s Trends in College Pricing report.

For the 2022-23 school year, students enrolled in private nonprofit colleges paid tuition and fees of $14,630 on average. Yet the sticker price for those institutions was much higher: around $39,400. Similarly, in-state tuition and fees at a public four-year college or university averaged $2,250 for 2022-23, compared to the published price of $10,950.

Even discounted college prices are substantial. Coming up with $60,000 for four years at a private college for one child is still a huge burden. Keep in mind that number includes tuition and fees only, not room and board.

Even with grants and other financial aid, many parents can’t afford the cost of college. At the same time, their earnings are too high to qualify for more need-based aid. College savings for kids can also be hampered by parents’ own federal and private student loans and other financial obligations, such as a mortgage or caring for aging grandparents.

If you’re feeling caught in the middle, know that resources are available to help make college tuition more affordable for your family. Here’s what to look for.

The First Step: Understanding Financial Aid

To maximize the amount of tuition help you get, you need to know how and when to apply for financial aid, the different types of aid, and especially how schools award that aid.

Financial aid can come from federal and state governments, colleges, and private organizations. Some help comes in the form of loans, which have to be paid back. Grants, scholarships and work-study programs do not have to be repaid.

Broadly, there are two types of financial aid: need-based and merit. Let’s take a closer look at both.

Need-Based Aid

Need-based aid is money students receive to help pay for college based on their financial situation.

How much need-based aid you get is largely determined by the information you submit on the Free Application for Federal Student Aid (FAFSA). Aid provided by the state and your college or university is also largely determined by FAFSA information.

Federal need-based aid includes subsidized government loans, Pell Grants, and work-study programs.

Then there’s need-based aid that colleges provide independently of federal financial aid. Many private colleges meet full financial need for admitted students without any loans. This aid is sometimes awarded to families with household incomes well over $100,000. Some colleges come very close to meeting full need, and many colleges will consider requests for more aid from admitted students.

Recommended: FAFSA Guide

How Colleges Calculate Your Need

Most colleges calculate aid based on the information you provide in the FAFSA each year. Factoring in your income and financial obligations, the government calculates your Expected Family Contribution, or EFC. (Starting with the 2023-24 academic year, the EFC will be renamed the Student Aid Index, or SAI.)

The EFC (or SAI) is the amount the government formula determines you can afford to pay for one year of college based on parent and student income, assets, number of dependents, number of children in college, and more. After you submit your FAFSA, you’ll see your EFC number in the confirmation email you receive.

Colleges use the EFC as a reference point, but are not obligated to stick to it. The colleges your student is accepted to may determine that your responsibility is higher than the EFC.

But need-based aid isn’t the only game in town. There’s also something called merit aid, or non-need aid, in the mix.

Recommended: FAFSA 101: How to Complete the FAFSA

What Is Merit Aid?

Merit aid consists of grants and scholarships that are awarded based on something other than financial need. It’s often given for academic, athletic, artistic, or other special interests. Merit aid does not need to be paid back, and it may or may not be renewed each year, depending on the award.

As you may guess, merit aid is far more subjective than need-based aid. During your student’s college search, it’s helpful to know these general trends in merit aid.

Which Schools Award Merit Aid?

Private and high-priced colleges usually award more merit aid than public state schools because of their larger endowments. One exception: Ivy League schools do not grant merit aid.

If your student plans to attend a public college or university out of state, you will likely face higher tuition. But attractive candidates may also be awarded more merit aid to help compensate for those extra costs.

Finally, state school honors programs can come with tuition discounts or academic scholarships.

Recommended: How To Get Merit Aid for College

What Is the Common Data Set and How Can You Use It?

One way to dispel the mystery around how colleges award financial aid is to understand the Common Data Set. The CDS is a standard set of data that schools collect about admissions, student demographics, faculty demographics, financial aid, academics, and campus life. Schools send the data to publications and organizations that rank colleges and universities.

The New York Times calls this data a “rich trove” about campus life and college finances. Most schools post their CDS on their website.

Not every school can meet every family’s full need for tuition. That’s where the CDS comes in: It can tell you how much need, on average, a school is able to meet and how many students receive need-based and merit aid. You and your student can then prioritize schools that either meet the most student need or award the most merit aid regardless of need.

How to Find the CDS

Most schools post their CDS data on their website. Often the best way to get to the data quickly is to type the name of the university and “Common Data Set” in your search engine. You’ll likely come up with a link to a PDF.

Try not to be overwhelmed by the length and less-than-reader-friendly format. As you scroll through, you’ll find lots of useful information on all aspects of admissions and campus life. If you’d like to get straight to the information about financial aid, skip to section H2. This will tell you how much need, on average, a school is able to meet and how many students receive all types of financial aid.

Why Some Schools Don’t Want You to See the CDS

You may discover in your search that some schools don’t post their CDS. That can be because they don’t want families to know they got a below-average aid offer, or they don’t want the public to know how many or few people are paying full price.

As efforts continue to encourage full disclosure and diversified, equitable student bodies across the country, the number of schools that don’t post this information is dwindling.

How You Can Fill the Gap

Even as savvy parents exhaust all sources of need-based and merit aid, you may find that you’ll still have to pay for some college costs. Here are some additional resources that may be available.

Scholarships

Scholarships are available for all types of students in virtually every area of study. Scholarship money, which does not have to be paid back, can be found through nonprofit groups, corporations, state governments, and community organizations, to name just a few. Start your search with SoFi’s scholarship search tool.

Federal Grants

•   Pell Grants. You do not have to pay back Pell Grants. They are awarded based on financial need to low-income families.

•   Work-study grants. As the name implies, these grants allow students to work at various part-time jobs at or around campus. You do not pay federal taxes on earnings from work-study programs.

Federal Student Loans

•   Subsidized Direct Loans. The government pays the interest on subsidized loans while you’re in school, during grace periods, and during periods of deferment. Interest rates are usually lower than private student loans, and there is usually a cap on how much you can borrow. You can learn more in our look at subsidized vs. unsubsidized loans.

•   Unsubsidized Direct Loans. These are not awarded based on financial need, but students with need often use them. Because the loan is “unsubsidized,” the principal will accrue interest while you’re in school. You may make interest-only payments during that time, but you’re not required to do so. If you don’t, the interest that accrued is added to the principal amount of your loan.

•   PLUS loans. Direct PLUS loans are fixed-interest rate loans available to parents of undergraduate, graduate, and professional degree students to help pay for tuition. They are not subsidized.

Private Student Loans

Once you’ve exhausted need-based and merit aid, you may find you still have some costs of attendance to cover. That’s where private student loans come in. The details vary, because terms and criteria will depend on the individual lenders and borrowers. SoFi offers no-fee private student loans for a variety of situations. You can find out more in our look at private vs. federal student loans.

The Takeaway

Middle-class families can often feel “caught in the middle” of the college financing situation. They earn too much to qualify for enough need-based aid but not enough to pay for all college costs. To maximize your financial aid award, it helps to know how and when colleges award their aid. First, use the Common Data Set to help you prioritize schools that award more need-based or merit-based aid. Then complete the FAFSA each year your student is in school. Also make sure to search for state and private scholarships that are not tied to the FAFSA.

SoFi private student loans can help families fill the gap between financial aid and the cost of attendance. There are never any fees: no origination fees, no late fees, and no insufficient-funds fees. And the application process takes just 3 minutes online.

FAQ

What income qualifies for need-based financial aid?

There’s no income cap for financial aid. Your need is determined by information you provide in the Free Application for Federal Student Aid (FAFSA) about your assets and financial obligations. Many families making six figures qualify for need-based aid.

Can middle-class families get financial aid?

Absolutely. It’s not unusual for families with annual income above $100,000 to receive financial aid.

Photo credit: iStock/jacoblund

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 Bank, N.A. and its lending products are not endorsed by or directly affiliated with any college or university unless otherwise disclosed.

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.

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.

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If your application for a federal Parent PLUS Loan was denied, you and your child still have options to help pay for their college. Below, we’ll explain some reasons why a Parent PLUS loan application might be denied, what you can do if yours is rejected, and alternatives to consider.

What Is the Parent PLUS Loan Program?

Parent PLUS Loans are federally funded Direct PLUS Loans taken out by parents to help their child pay for college. To apply, students or their parents must first fill out the Free Application for Federal Student Aid. Then a parent applies for a Parent PLUS Loan on the Federal Student Aid site. Most schools require this to be done online, though some have a different application process. Unlike other types of federal student loans, these loans require a credit check.

Why a Parent PLUS Loan Might Be Denied

If your Parent PLUS Loan was rejected, it may be because you don’t meet the credit requirements. PLUS borrowers can’t have an adverse credit history, such as being at least 90 days overdue in making a debt payment or completing bankruptcy in the last five years.

Your application may also be denied if you or your child don’t meet other PLUS loan requirements. For instance, your child must be enrolled at least half-time at an eligible school, and you must meet the general eligibility criteria for federal student aid.

What Parents Can Do

In the event that your application for a Parent PLUS Loan is rejected, you may want to consider these options.

Appeal the Decision

If you had extenuating circumstances that led to an adverse credit event, you can ask the U.S. Department of Education to reconsider your application. You’ll need to provide documentation that proves that extenuating circumstances led to the adverse credit. The DOE will decide whether to approve the appeal. Check its website for a list of potentially acceptable appeals and the supporting documentation needed.

If your appeal is approved, you’ll be required to complete PLUS Credit Counseling before your loan is disbursed. Counseling takes between 20 and 30 minutes and can be done online.

Find an Endorser

You may want to consider having someone else endorse the Parent PLUS loan. An endorser is essentially a cosigner without an adverse credit history. In the event that you are unable to repay the loan, the endorser would be responsible.

An endorser must complete an addendum online. They should be prepared to provide personal information such as their mailing address and phone number and their employer’s information, plus two references. Once the endorser is approved, they’ll need to complete PLUS Credit Counseling before the funds are disbursed.

Your Child May Qualify for More Aid

If your Parent PLUS loan is rejected, there’s a chance your child may qualify for more federal student aid. They can contact their school’s financial aid office to see what can be done given that their parental contribution is now reduced.

It’s important to talk to your child about student loans so they understand how the loans work and how much they will cost upon graduation. It may be helpful to speak in terms of the expected monthly payment, so your student can compare that to their expected annual salary.

Scholarships

It’s likely not too late for your student to apply for scholarships. In fact, students should be searching for scholarships each and every year they’re in school.

While some types of scholarships may be limited to incoming freshmen, this is not always the case. In addition to looking at scholarships offered by your child’s school and the state, other local organizations may offer scholarships.

If your student is still in high school, their guidance counselor may be able to provide advice on ways to search for scholarships, including finding opportunities in your area.

Consider Other School Options

Depending on where you live, you may want to reconsider where your child goes to school. Switching to a state school or local community college could save thousands in tuition, room and board, and travel costs. Some community colleges even have transfer programs for getting students into four-year schools. Consider meeting with a counselor at the community college to see what the transfer process is like.

Private Student Loans After Parent PLUS Loan

Private student loans are another way to close the funding gap. Commercial banks, credit unions, online lenders, and other lending institutions offer these loans with varying terms and rates. Private student loans and private parent student loans are not backed by the federal government and therefore not subject to its qualification rules. They may also lack the borrower protections available to federal loans, such as deferment. Private student loans are often considered once all federal aid options have been explored.

Rates on private student loans are generally determined by your credit score and personal financial situation. Borrowers who did not qualify for a Parent PLUS loan may also have trouble qualifying for a private loan at a competitive rate. Still, it’s worth shopping around. In addition to comparing rates between lenders, you’ll want to factor in the costs associated with taking out a loan, such as origination fees, prepayment penalties, and more.

The Takeaway

Parent PLUS Loans are federal loans available to parents of students. There are credit-related requirements in order to qualify for a PLUS loan, so in some cases, it is possible to be denied for a Parent PLUS Loan. If your application is rejected, you still have options, including appealing the decision, adding an endorser to the loan, exploring scholarships, or looking into alternate schools.

If you’ve exhausted all your options, no-fee private parent college loans from SoFi can help you pay for your student’s education. The application process can be completed easily online, and you can see rates and terms in just a few minutes. Repayment plans are flexible, helping parents find an option that works for their financial plan and budget.

FAQ

How often can I take out a Parent PLUS Loan?

You can apply each year you want to receive a Parent PLUS loan. To do so, you must fill out a Direct PLUS Application.

When do Parent PLUS Loans need to be paid back?

Repayment begins 60 days after final disbursement for that academic year. If you’re approved for deferments each year, you may not need to begin repaying the loan until 6 months after your child graduates.

If I’m approved for a Parent PLUS Loan, where will the funds go?

Funds from Parent PLUS Loans are sent directly to your child’s school.

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 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.

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.

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.

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.

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