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Public service loan forgiveness has been in the news a lot over the last year—and not for good reasons. There was the news that very few people have actually had their federal student loans forgiven.

Then there was the Public Service Loan Forgiveness (PSLF) news that the whole program might be cut . And now a lawsuit has been filed on behalf of a number of teachers who had their PSLF forgiveness denied, alleging mismanagement of the program.

What does this news mean for you? Should you still try to get your federal student loans forgiven, and how can you plan ahead for any more public service loan forgiveness updates?

What is Public Service Loan Forgiveness?

The public service loan forgiveness program is supposed to work in a fairly straight-forward way: After ten years of public service (and making payments on your loans), you can have the remainder of your student loans forgiven.

There are, of course, some requirements—and this is where it gets more complicated. To qualify for public service loan forgiveness you have to:

•   Work full-time in a qualifying public service job.
•   Make 120 monthly loan payments on a qualifying repayment plan, which is typically an income-driven repayment plan.
•   Have a federal Direct Student Loan.

For the majority of people who have their PSLF applications denied, it’s because they allegedly didn’t meet these requirements.

Most importantly, only federal Direct Student Loans qualify. Federal Family Education Loans (FFEL) or Perkins loans do not qualify—even though many of the federal loans when the loan forgiveness program was created in 2007 were FFEL loans.

You may still be able to qualify if you have one of those loans, but you would need to consolidate your federal loans into a Direct Consolidation Loan and none of the payments made before the consolidation would count.

You also need to be on a qualifying payment plan, which is either the standard ten-year repayment plan or an income-driven repayment plan. These determine how much you’re required to pay each month as a percentage of your income.

And you need to work for a qualifying employer. To verify that your public service job qualifies, fill out the public service loan forgiveness employer certification form .

Once you meet all these requirements, you still have to apply for loan forgiveness after your ten years of qualifying payments. It doesn’t happen automatically. This is where much of the public service loan forgiveness news comes in.

What Is the Latest Public Service Loan Forgiveness News?

Since the Public Service Loan Forgiveness program was launched in 2007, the first federal student loans became eligible for forgiveness in late 2017.

However, instead of a rash of loans being wiped clean, more and more news has come out about the number of applications being denied.

The latest data from the U.S. Department of Education found 73,554 borrowers have submitted applications for loan forgiveness, but only 864 have been approved. That’s not very many.

Over 2 million people also took the first step of having their employer certification approved. Since not all of those people followed through the rest of the process, critics argue it suggests there continues to be confusion around the requirements.

In fact, this was exactly why Congress approved the the Temporary Expanded Public Service Loan Forgiveness (TEPSLF) opportunity in 2018—which allows people who had their loan forgiveness applications initially denied because they were on the wrong repayment plan to get re-approved under the new requirements.

But the most recent numbers found only 442 of those TEPSLF applications had gotten their loans forgiven. That’s been frustrating for a lot of applicants and lawmakers. It’s even prompted a lawsuit from a number of teachers who’ve had their applications denied.

Even with all the distressing public service loan forgiveness news, many were still frustrated to hear the program was at risk of being eliminated in the most recent budget proposal .

What does all this mean for you?

Should You Still Try for PSLF Forgiveness?

Just because there’s been a lot of bad news for PSLF lately doesn’t mean you should necessarily give up on loan forgiveness.

Some of those applicants have been successful and, according to the data, the average amount of loan forgiven was $59,224. That’s worth following up on—even if it takes a lot of attention to detail.

The number-one reason applications were denied was because of qualifying payments—either not enough payments had been made yet or they weren’t made under a qualifying income-driven repayment plan.

That doesn’t mean those applications won’t eventually be approved, either after making additional payments or through the new temporary expanded program. (The average loan amount forgiven under the TEPSLF program was $39,723.) But it does mean you want to double-check all the requirements.

To do this, you may want to use the Department of Education’s PSLF Help Tool. Many who applied for loan forgiveness simply didn’t actually qualify for it in the first place.

It also means you should have a back-up plan and shouldn’t assume you’ll get your loans forgiven. Because employment gaps or payment forbearance periods (for instance, if you went to graduate school) can lead to delays in meeting the 120-month time requirement, you may want to plan ahead.

In this case, it may take an extra year or two to qualify for loan forgiveness. It also may take extra work on the application.

And if you’re working in a qualifying public service job just to get loan forgiveness, then you may want to consider your options if there are other jobs you’d want instead that might have a higher salary.

Regardless of the latest public service loan forgiveness news, you can always ask yourself: Is PSLF right for you?

How Can You Plan Ahead for Any Changes to Public Service Loan Forgiveness?

The good news is if you’re currently working towards Public Service Loan Forgiveness, then you could still qualify even if the program is cut. The proposal is only to eliminate loan forgiveness for students taking out new loans starting July 1, 2020, so it hopefully wouldn’t negate those already making qualifying payments.

It also may be true that federal loan forgiveness programs may yet get revised or amended to address the many rejections. But because these things can be uncertain, it may be a good idea to budget with the plan of paying your full student loans.

Ultimately, your goal is probably to save money and do good in the world. Public Service Loan Forgiveness is a great way to have any remaining loan balance after 10 years of payments wiped clean if you work in public service, and if you qualify, but it also has some drawbacks.

It means you have to stick to an income-driven repayment plan, which means your monthly payment amount will increase as your income increases. In that case, the loan could potentially be repaid in full before the standard 10-year repayment period ends, leaving no balance to be forgiven.

If you choose to consolidate federal loans that don’t qualify for PSLF without consolidating them, such as the Federal Perkins Loan and the Federal Family Education Loan (FFEL), keep in mind that the interest rate for the consolidation loan could be higher due to how the rate is calculated (and the interest rate of a Direct Consolidation Loan has no cap).

So, might you save money with the PSLF Program? The answer is a firm maybe. Another option, which would make you ineligible for loan forgiveness and other federal repayment benefits and protections, is to refinance your student loans at a lower interest rate or more ideal terms for your situation.

Refinancing is typically a better option for those who are in a stronger financial situation than when they graduated.

Through refinancing, borrowers consolidate their student loans into one new loan, ideally with rates and terms that work better for them.

For example, if you qualify for a lower interest rate that could help save money over the life of the loan and could allow you to pay off your student loans quicker— depending on the loan term you choose. You may want to weigh the pros and cons to consider what makes the most sense for you.

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.

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

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

SOSL19101

Credit card debt is an increasingly severe problem in the U.S. As Americans become more dependent on their small plastic cards, the amount of debt seems to just get bigger. And bigger.

According to Experian , the average American has a credit card balance is almost $6,200. Along with individual and household debt, the total amount of credit card debt in the U.S. has reached its highest level ever.

Whether debt has got you down, or you’re wanting to consolidate your existing credit cards and opt for ones that have the best perks and benefits for your circumstances, the question of canceling a credit card can be an extremely sticky one.

Many of us find ourselves wondering the best course of action to reduce credit card debt without affecting credit score, and the concern is valid.

While closing an account may play a role in getting a better handle on any existing debt, it’s important to understand ways to cancel a credit card in a way that doesn’t end up setting you back even more.

Ahead are some common steps that are typically needed to be taken in order to fully cancel a card, including sending a written confirmation and keeping a watchful eye on your credit report after you’ve put through a cancelation request.

Do You Really Need to Cancel?

It can be tempting to cancel cards or close accounts when things get overwhelming. But sometimes this may not be the best option.

In many cases, canceling a credit card can actually damage one’s credit score. In fact, canceled accounts may remain on a credit history for several years after the date they are closed. (With a card in negative standing, it will remain on your credit history for up to seven years, and a cancelled card in positive standing typically remains for 10 years.)

It’s important to take the time and analyze your motivations behind canceling an account before you actually do. After all, it may be smarter to simply cut up or hide a credit card rather than officially canceling.

As always, the decision is up to you, but it’s helpful to take these considerations into account before finalizing a decision that may have a long-lasting impact on your credit health and your long-term financial future.

Closing One Account at a Time

If you’ve decided that canceling your card is the best way to go for you, there are some things you may want to keep in mind before getting started.

First of all, when it comes to canceling credit cards, it’s important to remember that not all of them are created equal.

Depending on the exact reasons that led you to wanting or needing to cancel a card, you may want to consider a few things before pulling the trigger.

For example, if you’re thinking of canceling a card, you may want to consider canceling new ones instead of old ones to avoid impacting your credit score.

In the world of credit, older, more established credit in good standing is looked upon more favorably than new, and so you may want to keep this in mind when choosing which card you would like to cut.

On top of this, some credit cards may offer more appealing rewards programs for your lifestyle than others, so you may want to take stock of the perks that come with each card before deciding which one you want to stop using.

Paying Off or Transferring Your Balance

Depending on the total amount of credit you have available, closing a card account with a high credit limit could run the risk of damaging one’s credit score.

If you are carrying high balances on other cards or have active loans, this damage could be especially noticeable, since your debt-to-credit ratio (also called your credit utilization ratio) may affect your credit score. (Typically, you’d want to stay at 30% or below.)

If you’re planning on canceling a credit card, you will likely want to ensure that you’ve paid off any remaining balances on that account. If you fail to do so, you may end up having to pay interest charges on any remaining balance.

If you normally carry a balance from one month to another, you may need to take extra care to pay the full statement balance before canceling a card in order to make sure there is no money left in your balance and avoid future interest charges.

You may also want to take some time to brush up on your knowledge of credit card utilization, as it can be important to understand when it comes to canceling your credit cards smartly.

In order to lessen the negative impact of closing one of your credit card accounts, you may want to pay off all of the balances you carry on all of your cards first.

If you cancel a card while carrying zero balances on all your cards, your credit utilization rate should stay at zero, so even if you cancel a card and remove its balance, your rate shouldn’t be impacted.

Contacting a Credit Card Company

Once you’ve paid off your credit card balance, you will want to contact your credit card company to put through your request to close your account.

Sometimes, you will be able to cancel a credit card without making a phone call. It may be helpful to look up how to cancel a particular credit card online to see if your credit card company offers this option.

In most cases, you will want to contact your credit card company by phone. Usually, your customer service number will be printed on your credit card.

From there, you’d inform your credit card company that you are canceling your card. Keep in mind that some companies require you to speak to a customer service representative in order to complete this process, while others are more flexible.

It’s helpful to know that credit card representatives may be trained to try to convince you to keep your account open. Remember that you have the right to close your account at any time.

Before you hang up the phone, you may want to ask your representative for their name so that you can include it along with your written notice of cancelation.

Sending Written Confirmation

Once you’ve called and canceled your card, you may choose to mail a written confirmation letter to your credit card company. This can be a good option in order to protect yourself generally, but also in the event that the customer service representative made a mistake while putting through your card cancelation request.

In the letter, you would write things like your name, phone number, address, and account number as well as the details from the call you had with your credit card representative. If you got their name, you may want to also include it here.

You might choose to also state that you’d like your credit report to show that the account was closed at your request.

If you choose to mail a letter, consider sending it via certified mail so that you can ensure the company receives it, and make sure to keep a copy for your records.

Keeping an Eye on Your Credit Score

When canceling credit cards, patience is key. From the moment you begin the process to the moment your credit card is officially canceled, it may take one month or even longer, depending on the company.

After your account has officially been canceled, you may wish to keep tabs on your credit report to ensure that your credit card has in fact been listed as closed.

If, for some reason, the card is still marked as open, you may need to get back in touch with your credit card representatives and, possibly, repeat some or all steps in this process.

Know that it can sometimes take several weeks for changes to show up on your credit card report. For this reason, it’s good practice to get into the habit of checking your credit score regularly, whether or not you’ve recently closed a card.

Of course, if you did just cancel a card, you may want to wait a month or so to see whether or not closing your account impacted your credit score.

Keep in mind that, every twelve months, you can get one free copy of your credit report online through AnnualCreditReport.com . Some credit card companies may also offer apps that allow you to check your score for free.

Destroying Your Card

Once you’ve confirmed that your card is canceled, then you’re almost done with the process.

If you’ve ensured that the account is in fact closed, then you can officially destroy your card in the manner of your choosing.

Though cutting up a credit card may provide a feeling of freedom and catharsis, it’s important to be careful to choose a method that makes sure the information on your card is not recoverable.

If you have access to a shredder, shredding your card may be the most efficient and secure way of destroying it.

If you’re using scissors, make sure that you properly cut up all the identifying pieces of information on the card, including your signature, the expiration date, CVV number, and the credit card number itself.

From there, ensure you properly dispose of the shards. For an added layer of security, consider throwing them away in more than one garbage can.

Maintaining a Healthy Relationship with Credit

Despite the array of credit card-related woes many Americans experience, it is possible to leverage credit cards in a healthy and productive way.

Depending on your needs and financial circumstances, finding ways to use credit to your advantage is a great way to ensure that you don’t wind up with more debt than you can handle.

A credit card cancelation can often offer an opportunity to take stock of the way you’re using credit, and establish better practices moving forward.

Once you’ve familiarized yourself with your credit utilization, and taken a look at the rewards you are currently signed up for, you may choose to go about things differently in the future.

One of the best ways to help you keep tabs on your credit is to build a practice of checking your balance and your credit score regularly.

This may look like downloading an app that lets you see all of your savings, checking, and credit card accounts in one place, or just getting into the practice of logging into all of your account on a regular basis.

Whichever way you choose to go about it, there are several strategies you can try out that may help you to keep your credit in check.

From leveraging balance transfers to using the snowball method to help pay off any debt balances you currently have, there are ways to help you get your credit card debt and finances under control—regardless of whether or not you decide to get rid of some of that seemingly precious plastic.

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.

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 .

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.

SOPL19079

You might have heard the phrase “there’s no such thing as free money.” You may also have heard that “money doesn’t grow on trees,” but we’re pretty sure money is still made of paper. While cash back from your credit card isn’t exactly free money, using credit wisely can be beneficial.

How Does a Cash Back Perk Work?

Cash back is the rebate of the credit card world. The money that you get back, depending on the card and the deal you’ve gotten, may come in the form of a check, statement credit, or deposit with your financial institution.

With points, you might end up with $10 off your next Starbucks purchase; but you might actually prefer The Coffee Bean and Tea Leaf, so a Starbucks card may hold no value for you. With a cash-back reward, you typically get to decide how you want to spend the money: your mortgage, your lunch, your boyfriend’s birthday present, or even your credit card debt.

While some credit card companies offer a flat cash-back rate, other cards offer some combination of a flat cash back rate, and a specialized cash back rate for certain categories (often ones you can choose).

Card holders may be eligible to receive varying amounts—typically a percentage of spending in a certain category, e.g., dining, hospitality, airlines, or groceries.

But choosing a cash-back card with the best rewards isn’t so simple. There are many different kinds of cash-back rewards which may be available.

What’s Available

•   Cash back on a monthly, quarterly, or annual basis.

•   The cash back could be for any kind of purchase or for particular purchases in certain categories like dining, gas, groceries, etc. Sometimes it might be a combination of these two with higher rates of return on certain categories.

•   Timed spending bonuses: If you spend a certain amount within a certain prescribed time you may be eligible for even more cash back than the base amount.

•   Certain cards might also offer non-cash benefits like flight upgrades or extended warranties on purchases made with that card.

Why Do Cash Back Rewards Even Exist?

How is this even possible? Getting paid to spend money sounds like the kind of job you invented when you were twelve—it couldn’t possibly be real.

It turns out that the money you’re getting back comes from some very real places. Of course, credit card companies will try to get you sign up with them instead of their competitors. It’s dog-eat-dog out there. Credit card companies have since come up with a variety of tools to attract customers, and cash back is a common reward.

But where does the money come from? If you’ve ever been asked to fulfill a credit card minimum purchase amount you know where it comes from. The $10 minimum at the cafe is not there entirely to keep you adding extra shots to your morning latte (although you’re totally going to anyway).

The Pros

With so many kinds of credit cards out there, why would you consider a cash-back card?

•   Credit cards with cash-back rewards might actually help you earn more money than a low-interest-rate checking account with a debit card. Some checking account interest rates can often be less than 1% APY. Getting 5%—or more—cash back on your purchases is a lofty difference. Credit card spending, though, is still spending—not saving—an important difference to keep in mind when making purchases. Buying within a budget is still an important consideration.

•   Some cash-back cards offer sign-up bonuses or bonuses for spending over a certain amount or in a certain categories. When used responsibly, these types of bonuses could be used for special purchases a buyer might not have been able to afford otherwise. Two tickets to Paris please!

•   Consumers with credit scores of 740 and higher are typically the ones who qualify for cards with the highest cash-back rewards, which could be up to 6% when purchasing items from designated categories. Yet another reason to pat yourself on the back for your high credit score.

The Cons

Okay, so maybe some of the maxims are correct. Nothing in life is free and money doesn’t grow on trees. Like anything good in life, there can be a downside (we’re looking at you, cupcakes).

•   Many cash-back programs actually come with a maximum on rewards. While it seems that the more you spend the more you get, eventually you might just be spending more.

•   Some cash-back credit cards have annual fees. While this may seem small compared to the money you’ll be getting back, it might be worth it to do the math and make sure the pros outweigh the cons before you are convinced that this card is worth your spending power. Some cards with hefty fees reward the cardholders with perks beyond the cash-back bonus.

•   Like any other credit card, if the balance due is not paid on time, there are typically interest charges and fees added to the principal balance. That amount may negate any cash-back rewards you earned during that statement cycle.

•   Perhaps the biggest con: Choosing and managing a credit card can be complicated. Lots of homework, (i.e., research online, with your bank, has to go into this one before you may feel ready to commit to this endeavor. With occasional fees and sometimes hard-to-acquire gains, your research is key to making sure you find one that works for your spending habits. Cash-back credit cards can pay off, but it might take some digging to find the right one.

Unfortunately, at the end of the day, there’s no free lunch. Credit card companies are in the business of making money and they rely on your debt to fund their businesses.

Using credit wisely—and reaping all the rewards—typically means paying the balance due in full each billing cycle. Getting to that point can take some time, though.

New and existing Checking and Savings members who have not previously enrolled in direct deposit with SoFi are eligible to earn a cash bonus when they set up direct deposits of at least $1,000 over a consecutive 25-day period. Cash bonus will be based on the total amount of direct deposit. The Program will be available through 12/31/23. Full terms at sofi.com/banking. SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC.

SoFi members with direct deposit can earn up to 4.00% annual percentage yield (APY) interest on Savings account balances (including Vaults) and up to 1.20% APY on Checking account balances. There is no minimum direct deposit amount required to qualify for these rates. Members without direct deposit will earn 1.20% APY on all account balances in Checking and Savings (including Vaults). Interest rates are variable and subject to change at any time. These rates are current as of 3/17/2023. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet

¹See Rewards Details at SoFi.com/card/rewards.


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.

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.

SOPL19062

Remember your kids as little ones, riding on their tricycles and grabbing fistfuls of Cheerios? Now they are soon off to college, and you might be feeling bittersweet. Your children can finally do their own laundry (hallelujah) and you get some much needed quiet time around the house.

Sending kids to college is not just a transition for your children, it’s also a big step in parenthood for you. You may be sending your first child to college, but what if you have another child headed off to educational pursuits not too far behind?

If you have two kids going to college at the same time, the double whammy can hurt right in the wallet. As you navigate college dorms, tuition, and how to make sure your kids know where all of their classes are, you might have a few questions on how to support them over the next four years. We’ve compiled a few tips that could help guide you through sending your kids to college.

Financing Your Kids’ Education the Debt-Free Way

If you are putting multiple kids through college, then you know how much tuition and other costs can beat down your budget. You might want to start by talking with your spouse or someone you trust about finding the cash to finance your children’s education.

There are several ways to get creative with saving for your child’s college tuition that might help you avoid going into massive debt.

Scholarships can also play a role in financing your children’s education. They can be especially helpful since you won’t need to pay them back after your child graduates, and they can be used to directly fund tuition. Scholarship hunting can be a daunting task though.

Your mini-mes are most likely overwhelmed with selecting their university, studying for college entrance exams, and finishing out their high school senior year.

You could band together on scholarship applications by helping them find scholarships they are eligible for and compile a list. Ultimately, it’s up to your child to make the effort to complete the requirements. Encouragement is key here!

A Borrower’s Way to Pay

If paying for tuition out-of-pocket is out of reach, it’s recommended to first apply for federal financial aid by filling out the Free Application for Federal Student Aid (FAFSA®) . You may be faced with several options here, including Federal Direct Loans, which can be either subsidized or unsubsidized, PLUS Loans work-study, or grants.

Federal Direct Subsidized and Unsubsidized loans are offered to students who are enrolled at least half-time in school. Each of your kids will need to fill out their own FAFSA—parents cannot take out these types of loans on behalf of their children. That’s where the Parent PLUS, or Direct PLUS, loan comes into play.

The Direct PLUS Loan allows parents of undergraduate students to take out a loan to pay for education expenses not covered by other financial aid. It’s helpful to have a strong credit history, as anything adversely affecting your credit could also affect your eligibility to receive a Direct PLUS Loan.

Are You Cashing In on Ramen and Mac ‘n’ Cheese?

Your kids might not be accustomed to fending for themselves when it comes to food. If you’re concerned about your child’s eating habits while in college, you could make clear what you will or will not be paying for in groceries.

If you want to help out your kiddos, you could send them food items to get them through the week. You might want to check with the college residence hall coordinator first about any rules on using a mini fridge. Or you could stick with items that can be stored in a plastic bin or inside a closet to make things easy.

Let Your Kids Spread Their Financial Wings

Tuition continues to rise, and so does the cost of living. Tuition and fees for full-time, in-state students attending four-year public colleges and universities saw a 2.6% increase between the 2018-19 academic year and 2019-20.

How will your children support themselves in school? There are several ways, and it might be advantageous to have a conversation with your kids early on about how they can take care of themselves financially.

Some universities offer work-study programs, which give student workers the opportunity to work a job that fits within their class schedule. Students would need to fill out the FAFSA to determine eligibility for federal work-study.

If your child qualifies, it will be noted in their financial aid award. If your child is awarded work-study, they will still be responsible for securing a job that fits within the program.

Your kids could also explore part-time opportunities off-campus, such as waiting tables or picking up a gig as a nanny.

Another alternative, if you have the ability, is to support your children financially. You could determine an appropriate amount to keep your child on the right path or consider offering cash incentives for good grades. If you have the funds to help throughout the year, this could help offset student loan debt.

You Come First

Sending your kids to college can be a priority, but you come first. You might want to prioritize your money goals first, such as retirement. You don’t want to be caught dumping all of your potential retirement savings into tuition if you are short on your retirement goals.

You could make a plan and ask yourself how much you want to contribute each month to retirement, regardless of other pressing expenses. Tuition can be covered in a variety of ways, but borrowing from your retirement stash or neglecting it could have an impact on your retirement goals.

They’re Off to College, but They Still Need You

Just because you successfully guided your offspring to college doesn’t mean that they don’t need you. You can probably expect to answer text messages (because we all know actual phone calls are a thing of the past with Gen Z’s) on how to make a pot of coffee or what that genie lamp light means on the dashboard of their car (hint: check your engine oil!). Remember, they may still lean on you for support as they transition into adulthood.

Then There’s the Whole Paying It Back Thing

Four years are going to fly by. When your kids are well on their way to their post-grad careers, you could check out how refinancing their student loans might help. Refinancing student loans with SoFi can create one monthly payment.

Your child could even reduce their interest rate when they refinance, depending on the terms of their existing financing. If they have federal loans, know that refinancing means they’ll no longer qualify for federal protections or repayment programs.

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.

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

SOSL19028

College is full of decisions: what school should I go to? What will my major be? Should I live on campus? Should I go full or part-time? It is easy to get overwhelmed trying to find all the answers, but when it comes to choosing between full and part-time, your choice could change things like the amount of work you’re doing every week to how much financial aid, including federal student loans, you may be eligible for.

Whether you’re a full or part-time student depends on how many credit hours you’re taking during the semester.

In general, most schools require that you take about 120 credit hours in order to graduate with a bachelor’s degree. Associate’s degrees and certificate programs require fewer credits.

This means that, typically, in order to graduate with a Bachelor’s degree in four years, you’ll need to take about 15 credits per semester. But what if you’re a night student, or are balancing classes with a full-time job? In that case, you may be a part-time student, taking less than a full load each semester.

Here’s what you need to know about the part-time versus full-time distinction and how the number of credits you take each semester could impact your education.

What Is a Full-Time Student?

Each college determines the exact number of credits that constitutes a full-time course load. But at its most basic, a full-time student is someone who is taking a “full-load” of college classes, as measured by the number of credit hours.

Each class you take is worth a certain amount of credits, depending on how much work is expected in the course. Your school determines how many credits each course is worth. For example, you might take a biology course worth four credits, a chemistry lab worth four credits, an English Lit class worth four credits, and a dance class worth two credits. Together, the total number of credits in your schedule determine whether you’re a full-time or part-time student.

What Is a Part-Time Student?

A part-time student is anyone who is taking some college credit hours but who is not taking the minimum number of college credit hours designated by the school as “full-time.”

This means that you might be a part-time college student if you’re taking a single two credit art class for fun after work, or if you’re taking a 10 credit course load when your school designates full time as 12 credits or more.

Differences in Finances for Full Time and Part-Time Students

One area where being a full or part-time student can make a big difference is when it comes to finances. Full and part-time student status could potentially impact factors like tuition costs and financial aid.

Tuition Costs

One big difference when it comes to full-time or part-time student status is tuition costs. Many degree programs charge tuition based on the number of credits you’re taking. Tuition policies and rates will vary by school, so it might be worth checking the specific policies at your school to determine how your enrollment might impact your tuition. If tuition is charged per credit hour, taking additional credits could make your semester more expensive.

Some students who are paying for their degree out of pocket opt to attend school part-time in order to pay less in tuition each semester and spread out the cost of their education over a longer period of time.

On the flip side, the cost-per-credit model can mean that students looking to max out the number of credits they take each semester in order to graduate as soon as possible, might face high costs when it comes to tuition.

And that’s not to mention books, as the more classes you take, the more books you’ll likely have to buy. For students facing high costs due to taking a high number of credits, and who have maxed out the federal aid available to them, a private student loan might help cover the increased costs of attendance that come with being a full-time student.

Available Tax Credits

Student status can also make a difference when it comes to your or your parents’ taxes. Tax credits like the American Opportunity Tax Credit (AOTC) and the Lifetime Learning Credit (LLC) may offer tax benefits to students.

The AOTC can be worth a maximum annual benefit of $2,500 per eligible student, but it is only available during the first four years at an eligible college or vocational school.

The LLC offers a maximum benefit of up to $2,000 per tax return for both graduate and undergraduate students, and has a slightly broader net, as it also allows for deductions taken by professional students who want to take courses to “maintain or improve job skills.”

In order to claim either the AOTC or the LLC, you need to meet certain qualifications . These include: 1) pay for qualified education expenses and 2) you’re enrolled at an eligible educational institution.
The good news is that because these tax credits only require enrollment at an “eligible educational institution,” they are available to both full-time and part-time students.

Federal Aid

When it comes to federal student loans, it is a different story. In order to qualify for most types of federal student aid, you must be enrolled at least half- time at a qualifying institution. Like full-time enrollment, half-time enrollment is determined by your school. Generally, it is around six credits per semester, but depends entirely on which school a student attends.

If a student falls below half-time enrollment, they could lose their eligibility for federal student aid. Some schools may also adjust financial aid awards depending on student enrollment. The financial aid office at your school should be able to provide information on your school’s policies.

This means that for students who are using federal student aid, it’s likely important to make sure your schedule has enough credits, or risk losing your student aid.

If you’re paying out of pocket and not relying on federal student aid, it might not be as important to maintain a schedule that keeps your credit hours at half-time, as fewer credits could equal lower tuition bills.

Paying for College

Whether you’re a full-time student, a half-time student, or a part-time student, it can still be a struggle to pay for college. There are things you can do to lower the cost of college, but many students end up taking out some type of loan to complete their degree.

Private student loans are one option that could help, whether you’re eligible for federal student aid or not.

Private student loans can be a backup plan to cover educational costs that go beyond what you’re able to meet with federal aid—provided, in most cases, you’re enrolled at least half-time.

It is important to consider private loans carefully, because private student loans don’t have the same repayment benefits and protections of federal student loans, including flexible repayment plans and the possibility of loan forgiveness.

If you’re looking for a way to fill in the gaps, however, a private student loan could be the answer you’re looking for.

Depending on the lender, private student loans might only be an option for students attending at least half-time. For example, at SoFi, borrowers must be attending school at least half-time in a qualifying degree granting program in order to qualify for a loan.

If you do decide to borrow a private student loan to cover educational costs, consider SoFi. There are absolutely no fees and borrowers can select from up to four flexible repayment plans. And with SoFi, you can apply online in just a few minutes—even if you’re using a co-signer.

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.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

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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.

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