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Student loan borrowers with a good credit score generally have a better chance of qualifying for student loan refinancing. FICO®, the credit scoring model, considers a score of 670 to 739 to be good. Yet according to the most recent report by the Federal Reserve Bank of New York, the average credit score of student loan borrowers was 656, which falls short.

The higher your credit score, the more likely you are to be approved for refinancing, and also to get a lower interest rate and favorable loan terms. Here’s what you need to know about your credit score and student loan refinancing.

Understanding the Credit Score Requirement

Your credit score is important because it gives lenders a synopsis of your borrowing and repayment habits. It’s based on information from your credit report, which is a highly detailed record of activity on all of your credit accounts. A credit score tells lenders how well you’ve managed your credit and repayments thus far.

With student loan refinancing, many lenders are looking for a good credit score. That’s because a higher score generally indicates that you’re likely to repay your debts on time. FICO calls a credit score of 670 to 739 a good score, while VantageScore®, another commonly used credit scoring model, designates a good credit range as 661 to 780.

Some lenders have more flexible credit score requirements than others, and they may set what’s called a minimum credit score requirement. This is the lowest eligible credit score for which they’re willing to approve a borrower for student loan refinancing.
However, higher is usually better when it comes to a credit score for refinancing, regardless of the scoring model that’s used. If your credit score exceeds the good range, and is considered “very good” or “excellent,” you may be more likely to qualify for student loan refinancing. This also improves your chances of getting a lower interest rate and favorable terms, which are important when you’re refinancing student loans to save money.

Recommended: Guide to Refinancing Private Student Loans

Additional Requirements for Refinancing

In addition to your credit score for a student loan, lenders have other requirements you’ll need to meet, whether you’re refinancing private student loans or federal loans. These eligibility requirements include:

Income

Lenders look for borrowers with a stable income. This indicates that you consistently have enough money coming in to pay your bills. You will likely have to provide lenders with proof of your employment and income, such as pay stubs.

If you’re a contract worker or freelancer whose income is more sporadic, you may need to show a lender your tax returns or bank account statements to show that you have enough funds in your bank account.
Debt-to-Income Ratio

Your debt-to-income (DTI) ratio is a percentage that shows how much of your income is going to bills and other debts versus how much income is coming in each month. The lower your DTI, the better, because it indicates that you have enough money to pay your debts, making you less of a risk to lenders.

To calculate your DTI, add together your monthly debts and divide that number by your gross monthly income (your income before taxes). Multiply the resulting figure by 100 to get a percentage, and that’s your DTI.

Aim to get your DTI to below 50%, and pay off as much debt as you can before you apply for student loan refinancing.

Credit History

In addition to your credit score, lenders will also look at your credit history, which is the age of your credit accounts. Having some active older credit accounts shows that you have a solid pattern of borrowing money and repaying it on time.

Minimum Refinancing Amount

Lenders typically have minimum refinancing amounts. This is the outstanding balance on your loans that you want to refinance. For some lenders, the minimum refinancing amount is between $5,000 and $10,000. For others, it may be higher or lower. Lenders set minimums to ensure that they will earn enough interest on the loan.

Recommended: Student Loan Refinancing Calculator

Strengthen Your Credit Score for Refinancing

If your credit score isn’t high enough to meet a lender’s minimum score requirement, you can work on strengthening your score and apply for refinancing at a later date. The following strategies may help you build credit over time.

Make Timely Payments

Making full, on-time payments on your existing credit accounts is the most impactful way to improve your credit. This factor accounts for 35% of your FICO credit score calculation and is at the forefront of what lenders look at when evaluating your eligibility.

Lower Your Credit Utilization Ratio

This is the ratio of how much outstanding debt you owe, compared to your available credit. Credit utilization ratio accounts for 30% of your FICO score. Keeping your credit utilization low can be an indicator that, while you have access to credit, you’re not overspending.

Maintain Your Credit History

A factor that’s moderately important when it comes to your FICO score calculation is the age of your active accounts. Keeping older accounts active and in good standing shows that you’re a steady borrower who makes their payments.

Keep a Balanced Credit Mix

As you’re establishing credit, having revolving accounts such as credit cards, as well as installment credit like student loans or a car loan, shows you can handle different types of credit. This factor affects 10% of your credit score calculation.

Alternatives to Refinancing

If your credit isn’t strong enough for you to qualify for student loan refinancing, you have a few other options to help you manage your student loan payments. Some ideas to explore include:

•  Loan forgiveness programs. There are federal and state student loan forgiveness programs. For instance, the Public Service Loan Forgiveness (PSLF) program is for borrowers who work in public service for a qualifying employer such as a not-for-profit organization or the government. For those who are eligible, PSLF forgives the remaining balance on Direct loans after 120 qualifying payments are made under an IDR plan or the standard 10-year repayment plan.

  Individual states may offer their own forgiveness programs. Check with your state to find out what’s available where you live.

•  Income-driven repayment plans. You may be able to reduce your federal loan monthly payment with an income-driven repayment (IDR) plan, which bases your monthly student loan payments on your income and family size. Your monthly payments are typically a percentage of your discretionary income, which usually means you’ll have lower payments. At the end of the repayment period, which is 20 or 25 years, depending on the IDR plan, your remaining loan balance is forgiven.

•  Consolidation vs. refinancing: Which is right for you? Whether consolidation or refinancing is right for you depends on the type of student loans you have. If you have federal student loans, a federal Direct Consolidation loan loan allows you to combine all your loans into one new loan, which can lower your monthly payments by lengthening your loan term. The interest rate on the loan will not be lower — it will be a weighted average of the combined interest rates of all of your consolidated loans. Consolidation can simplify and streamline your loan payments, and your loans remain federal loans with access to federal benefits and protections. However, a longer loan term means you’ll pay more in interest over the life of the loan.

  If you have private student loans, or a combination of federal and private loans, student loan refinancing lets you combine them into one private loan with a new interest rate and loan terms. Ideally, depending on your financial situation, you might be able to secure a new loan with a lower rate and more favorable terms. If you’re looking for smaller monthly payments, you may be able to get a longer loan term. However, this means that you will likely pay more in interest overall since you are extending the life of the loan. On the other hand, if your goal is to refinance student loans to save money, you might be able to get a shorter term and pay off the loan faster, helping to save on interest payments.

Just be aware that if you refinance federal loans, they will no longer be eligible for federal benefits like federal forgiveness programs.

Understanding the Impact of Refinancing on Your Credit Score

Just as your credit score affects whether you qualify for refinancing, refinancing has an impact on your credit score.
When you fill out an application for refinancing, lenders do what’s called a hard credit check that usually affects your credit score temporarily. The impact is likely to be about five points of reduction to your score, which lasts up to 12 months, according to the credit bureau Experian.

After refinancing is complete, however, as long as you make on-time payments every month, your credit score might go up. Conversely, if you miss payments, or if you’re late with them, your score could be negatively affected.

It’s wise to keep your credit score as strong as possible before, during, and after refinancing. And watch out for common misconceptions about credit scores and student loan refinancing.

For instance, be sure to shop around for the best loan rates and terms. Checking to see what rate you can get on a student loan refinance, unlike filling out a formal loan application, typically involves a soft credit pull that won’t affect your credit score.

Also, if you choose to fill out refinancing applications with more than one lender, some credit scoring models may count those multiple applications as just one, as long as you apply during a short window of time, such as 14 to 45 days, which can lessen the impact to your credit.

Finally, keep paying off your existing student loans during the refinancing process. If you stop repaying them before refinancing is complete, your credit score may be negatively affected.

Making Informed Decisions About Student Loan Refinancing

As you’re considering refinancing, weigh the pros and cons of refinancing your student loans. Advantages of student loan refinancing include possibly getting a lower interest rate on your loan, adjusting the length of your payment term, and streamlining multiple loans and payments into one loan that’s easier to manage.

But remember: If you’re refinancing federal student loans, you will lose access to federal protections and programs like income-driven repayment plans. And refinancing may be difficult to qualify for on your own if you don’t have a good credit score and solid credit history, so you may need a student loan cosigner. Make the decision that’s best for your financial circumstances.

If you decide to move ahead with refinancing, be sure that your credit score is as strong as it can be. Then, shop around to compare lenders and find the best rates and terms. Once you’ve chosen a lender or two, submit an application. You’ll need to provide documentation of your income and employment, so be sure to have that paperwork on hand.

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

FAQS

Can I refinance with a 580 credit score?

You may be able to refinance student loans with a credit score of 580, depending on the requirements of the lender. While most lenders look for borrowers with a good credit score, which FICO® defines as 670 to 739, some lenders set a minimum credit score as low as 580. If you meet other eligibility requirements, such as having a steady income and a low debt-to-income ratio, a lender may consider you with a 580 credit score.

What is the minimum credit score for a refinance?

Each lender has its own specific requirements, including the credit score needed to refinance. While most lenders look for applicants with a good score, which starts at 670, according to FICO, some lenders set a minimum credit score, which may be as low as 580. Check with different lenders to see what their requirements are.

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

SOSLR-Q424-004

If you are a U.S. citizen but your parents are undocumented, you might wonder if their immigration status prevents you from submitting a Free Application for Federal Student Aid (FAFSA) form. The good news is that your parents’ immigration status does not impact your ability to submit a FAFSA or your eligibility for federal student aid. In fact, if you meet certain FAFSA requirements, you may qualify for college financial aid, despite having undocumented parents.

Dependent students must include information for at least one parent on the FAFSA. If your parent is a noncitizen, there are certain steps you can take to successfully complete your FAFSA. Read on to learn more about federal aid eligibility, and what to put on the FAFSA if your parents are undocumented.

Understanding FAFSA and Immigration Status

The FAFSA form is used by your school and other entities to determine whether you qualify for different sources of financial aid, including federal student aid, state-based aid, and potentially, aid from your college. Private student loans do not require you to fill out the FAFSA.

Because FAFSA delays for the 2024-2025 school year complicated the FAFSA process for many students and families, it’s wise to learn how to fill out a FAFSA with undocumented parents now so you’ll be ready when the time comes. Normally available in October, the form for 2025-2026 is currently expected to launch by December 1, 2024.

Your parent’s citizenship status, and whether they’re in the U.S. legally or illegally, has no bearing on your eligibility for federal aid. Instead, as a student applicant, you must satisfy certain FAFSA requirements for federal student aid.

Eligibility for Federal Student Aid

How college financial aid works is that to qualify for federal aid you will need to fulfill the following:

•   Provide proof of academic qualification. You must have a high school diploma, General Education Development (GED) certificate, or an equivalent academic credential to qualify for higher education or career school.

•   Be a U.S. citizen or eligible noncitizen. Eligible noncitizens include individuals with U.S. national status, those who are legal permanent residents, and students with a Citizenship and Immigration Services Arrival-Departure Record with a qualifying designation.

•   Have a Social Security number. Students filling out a FAFSA must have a valid Social Security number (SSN) to create a StudentAid.gov account and complete the form. Undocumented students who don’t have a Social Security number won’t be able to submit and sign a FAFSA, and they are ineligible for federal financial aid. Deferred Action for Childhood Arrivals (DACA) students who have been issued an SSN can complete a FAFSA form, but DACA students do not qualify for federal aid.

•   Meet enrollment criteria. The student must be accepted or enrolled in an eligible degree or certificate program at a school.

•   Demonstrate financial need. This applies to need-based federal student aid like the federal Pell Grant Program.

•   Consent to a federal tax return transfer. You must agree to have your federal tax return data transferred from the IRS into your online FAFSA form.

•   Sign and certify the certification statement on your FAFSA. Your signature is acknowledgment that you don’t owe the Department of Education money from past aid, like defaulting on a federal student loan or a grant that needs repayment, and that you’ll use the federal aid for educational purposes.

Recommended: Can DACA Recipients Apply for Student Loans?

Rights and Protections for Students

Whether you’re a student who’s a U.S. citizen with undocumented parents or an eligible noncitizen with parents who are undocumented, you have certain protections by law.

The DACA Program temporarily protects eligible students, called “Dreamers,” who arrived in the U.S. when they were children. The program provides deferred action from deportation on a renewable two-year basis so that Dreamers can follow their desired educational and professional pursuits.

On a broader scale, federal law prohibits schools from discriminating against students or denying enrollment on the basis of citizenship or immigration status. The federal government is generally limited in its ability to perform immigration enforcement — including interviews, surveillance, and arrests — on a school campus.

The Family Educational Rights and Privacy Act (FERPA) also generally requires schools to safeguard students’ private information, including that of undocumented students. An exception is if a court subpoenas the school to release your student records. If this occurs, in most cases, the school must notify you.

Preparing to Fill Out the FAFSA

One of the top FAFSA tips is to fill out the form online if you can, since this is typically the quickest and easiest way to submit your application. First, you must request your Federal Student Aid (FSA) ID. This will allow you to create a StudentAid.gov account to fill out the FAFSA form.

You must provide your personal information on the FAFSA form. You’ll also need to give your marital status, citizenship status, enrollment level, income details, and provide tax information. (If you’re submitting an online FAFSA, you must consent to a federal tax data transfer). You’ll need to list the names of the schools you’d like to receive your FAFSA, including their addresses and federal school codes.

If you’re married, your spouse must complete the designated spousal section. They will also need an FSA ID to create an account to fill out their portion of the FAFSA. They’ll have to provide their personal and contact information, federal tax return details, and income on the form.

Handling Parent Information on the FAFSA

Once you’ve started your online FAFSA form, you can invite one or both of your parents to provide their information as a contributor to your application. Including your parents’ information is only necessary if you’re a dependent student. You’ll need their name, date of birth, email address, and Social Security number if they have one to send them an invitation to contribute to the FAFSA.

Your parents must first create a StudentAid.gov account to add their information to your online FAFSA and sign their section. In the past, a Social Security number was required for parents to create a StudentAid.gov account and get an FSA ID. However, effective December 2023, the Department of Education made it easier for undocumented parents to complete this step. Now, undocumented parents can sign up for a StudentAid.gov account without being required to enter an SSN to complete their section of the FAFSA form.

After gaining access to your online FAFSA, your parents will provide the same information that’s required of a spouse. This includes consenting to a federal tax information transfer directly into the FAFSA regardless of whether they filed taxes, and signing their section.

Recommended: Guide to FAFSA Income Limits

Special Considerations for Undocumented Parents

It’s understandable for undocumented parents who are participating in your FAFSA to feel uneasy about the process. Students can help alleviate their parents’ worry by talking them through how their information will be used for verification.

First, it’s important for them to know that the FAFSA does not ask about parents’ immigration status. And the FAFSA Privacy Act Statement stipulates the rights and protections of all contributors on the FAFSA, including parents. Any information provided on the FAFSA is only used to determine federal, state, and school financial aid eligibility and how much money you can get with the FAFSA.

Alternative Options for Financial Aid

Whether you are a DACA recipient, an undocumented student who is ineligible for federal student aid, or a U.S. citizen with undocumented parents who didn’t receive enough federal aid to cover the cost of college, there are financial aid alternatives you can explore. These include:

•   State-specific aid programs. Some states offer their own student aid programs for resident students. For example, California’s Nonresident Tuition Exemption helps undocumented students avoid higher nonresident tuition fees at qualifying colleges, if the student meets certain requirements.

•   School-sponsored support. Your school might offer financial aid, like merit-based scholarships, grants, and student loans you may be eligible for. Speak to your financial aid administrator to learn more.

•   Private scholarships. You can also search for scholarship programs that aren’t affiliated with the government or your school. Use SoFi’s scholarship search tool to start exploring opportunities.

•   Private student loans: These loans are offered by banks, credit unions, and private lenders. Private student loans have fixed or variable rates, and the rate you may qualify for depends on your credit history, among other factors. In order to be approved for private student loans, a student may need a student loan cosigner who agrees to repay the loan if the borrower is unable to repay it. And keep in mind that, as a borrower, you could choose to refinance student loans in the future to get a lower rate or better terms if you’re eligible.

Additional Resources and Support

If, as a student with undocumented parents, you need additional help with completing the FAFSA, there are individuals and organizations you can turn to. Reach out to your high school counselor or the financial aid office at your college for assistance. You can also contact the Federal Student Aid Information Center at StudentAid.gov.

DACA students can find resources that may help them on the U.S. Citizenship and Immigration Services website.

The Takeaway

You can fill out the FAFSA if your parents are undocumented to help you potentially secure valuable financial aid. The 2025-2026 FAFSA application, expected to launch by December 1, 2024, will make it more straightforward for students to complete and submit a FAFSA despite their parents’ immigration status, and even if they don’t have a Social Security number, just like the 2024-2025 form did.

If, after you submit the FAFSA, you still need funds to help pay for school, you might want to consider private student loans. There’s also the possibility to refinance your private loans after graduation for better rates and terms, if you choose to.

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

FAQ

How do I report parental information if my parents are undocumented?

On the FAFSA, undocumented parents can give their personal and financial information without a Social Security number (SSN). They must have a studentaid.gov login to complete their portion of the FAFSA, but no SSN is required for the log-in or to fill out the form.

Will filling out the FAFSA affect my undocumented parents’ status?

The information on your FAFSA, including your parent’s information, is typically confidential. The FAFSA does not even ask about parents’ immigration status. And your parents don’t need a Social Security number to fill out the FAFSA.,

What alternative financial aid options exist for students with undocumented parents?

If you’re a student with undocumented parents, there are other sources of financial aid that can help you pay for school. Ask your college or university if it offers merit-based scholarships or grants, and check into state-specific student aid programs. In addition, you can explore the many scholarship and grant programs available from states, businesses, and organizations. You can also consider taking out private student loans to help you afford college.

photocredit: iStock/Richard Stephen

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

SOSLR-Q324-033

Around 200,000 holders of federal student loans who attended schools that they say defrauded or misled them filed a lawsuit known as Sweet v. Cardona in 2019. After the court ruled in their favor in 2022, these borrowers began receiving debt relief from the Department of Education (DOE) as part of a $6 billion settlement, including refunds of the payments they’d already made on their federal loans.

If your school was one of more than 150 institutions included in the Sweet v. Cardona debt settlement, but you didn’t apply to be included in the settlement before 2022, you are probably not going to be able to receive this form of debt relief.

However, help is still available. If you feel your school has misled you, violated state laws, or engaged in other misconduct that affected your decision to borrow federal student loans, you can apply for debt relief through a process called borrower defense. Read on to learn about Sweet v. Cardona and what it might mean for you.

Background of the Case

In Sweet v. Cardona, individuals were saddled with heavy student loan debt from certain educational institutions, many of them for-profit, that the loan holders say delivered a subpar education.

“For decades, the predatory for-profit college industry has exploited the promise of higher education,” says the Project on Predatory Student Lending, the legal advocate for defendants in Sweet v. Cardona. “Instead of providing the quality programs promised, these companies invest almost no money into meaningful career training, leaving thousands of students behind.”

The concept of “borrower defense” was created in 1994. It’s a federal process that allows students who say they have been defrauded by their college, university, or career school to seek student loan forgiveness for their federal loans.

The borrower defense process does not apply to those with private student loans.

Borrower defense was an obscure program until 2015, when the for-profit Corinthian Colleges, Inc. shut down and hundreds of thousands of its students were left with degrees of questionable value. This thrust the issue of exploitative education into the headlines. (After years of hearings and litigation, the DOE in 2023 announced it would discharge all remaining federal student loans borrowed to attend any campus owned or operated by Corinthian from 1995 to 2015. This resulted in 560,000 borrowers receiving $5.8 billion in full student loan discharge.)

The question of subpar education soon extended far beyond Corinthian. In a later court ruling, the DOE said that “there was an unprecedented surge in borrower defense applications.” Some of these applicants say that the DOE was making it difficult to get out of student loan debt and receive debt relief.

On June 25, 2019, the original seven plaintiffs in the Sweet v. Cardona case (originally called Sweet v. DeVos) filed their lawsuit in California federal district court, saying their claims for loan cancellation had been ignored by the DOE.

The case was certified as a class action in October 2019, and it grew to include thousands of borrowers who argued they’d been defrauded by more than 150 colleges, mostly for-profit. To find out If your school was one of the institutions included in the Sweet v. Cardona settlement, see this list.

Key Issues in Sweet v. Cardona

The Sweet v Cardona lawsuit was filed because of the difficulty borrowers had in obtaining debt relief even after establishing that the school defrauded students. The Project on Predatory Student Lending said that “students who experienced fraud should not be required to pay back federal loans. Since the Department of Education repeatedly ignored these students’ legal rights, the only way they could have their voices heard was through the courts.”

Borrower Defense to Repayment Claims

The Sweet vs. Cardona plaintiffs applied to discharge their student loans “under a statute authorizing discharges based on misrepresentations or other misconduct by the borrowers’ schools,” said the court.

After years of hearings and disputes over the plaintiffs’ claims, the court granted approval of a final settlement in the Sweet v. Cardona case on November 16, 2022.

Department of Education’s Handling of Claims

The DOE announced it would comply with the court’s settlement.

Education Secretary Miguel Cardona said in December 2022, “We are pleased with the borrower defense court decision approving the settlement, which will provide billions of dollars of relief to over 200,000 borrowers. It will also resolve plaintiffs’ claims in a fair and equitable manner.”

The settlement could result in discharge of a plaintiff’s outstanding loans and in refunds of any amount previously paid to the federal government toward those loans.

Plaintiffs who opted to refinance student loans with a private lender — specifically federal Direct loans and government-held FFEL loans — after they applied for borrower defense, are due to get a refund of the amount paid to the government by the private lender when they refinanced. They will owe the lender any remaining balance.

Recommended: Student Loan Payment Calculator

Timeline of Major Events

There have been some delays in the massive Sweet v Cardona settlement.

January 28, 2023: The Sweet v. Cardona settlement became effective and the Department of Education started to implement debt relief.

February 15, 2023: The court held a hearing on a motion by three schools to stay the settlement. On February 24, the district court granted a temporary stay of discharges and discharge requests related to the three schools that filed the motion: Lincoln Technical Institute; American National University; and Everglades College, Inc.

March 29, 2023: The Ninth Circuit Court of Appeals denied the intervenor schools’ motion to stay the settlement pending their appeals. This meant that settlement relief proceeded for class members from those three schools, and should continue on course for everyone else. The DOE was to complete implementation of the terms by the end of January 2024.

March 18, 2024: The Project on Predatory Student Lending said the DOE had not met the court-ordered deadline of providing debt relief to tens of thousands of people covered by Sweet v. Cardona.

“Many of these borrowers filed their borrower defense applications as early as 2015 and have been waiting nearly ten years for the relief they are owed,” said the Project on Predatory Student Lending.

April 26, 2024: A U.S. District judge granted the DOE extra time to deliver Sweet v. Cardona relief. Borrowers expected to learn about the schedule for their federal student loan relief by August 31, 2024.

September 26, 2024: The DOE reported that it is now in “substantial compliance” with the settlement provisions.

Implications for Student Loan Borrowers

The latest Sweet v. Cardona update is that the settlement amount should have reached the plaintiff’s bank account by now or it is being processed. The DOE is working its way toward providing relief settlements for all those who submitted a borrower defense application on or before June 22, 2022, and were approved.

The DOE said on its website: “Sweet class members who have pending borrower defense applications or have applications that have been approved but have loans that have not been fully discharged are not obligated to repay their loans. If you have been notified by the U.S. Department of Education (ED) that you are a member of the Sweet class and you receive a payment notice from your servicer, you are not obligated to make payments while your application or loan discharge is pending.”

Potential Debt Relief

The Sweet settlement impacts only individuals who attended one of the schools on the court-approved list and applied to be included on or before June 15, 2022. If you didn’t apply by that date, you are ineligible for Cardona v. Sweet but you can still learn more about borrower defense and whether to apply.

Changes to Borrower Defense Processes

The Sweet v. Cardona lawsuit was filed because people who successfully completed borrower defense to repayment applications said it was taking too long to get debt relief. The DOE says it has since improved and streamlined the borrower defense review process for these applications.

Current Status and Developments

The Sweet v. Cardona payments have been processed or are underway for plaintiffs with borrower defense applications filed on or before June 22, 2022, according to the DOE. The DOE will continue to process student loan relief provided by this legal settlement through 2025.

Recommended: Student Debt by Major

Scammers Pursue Sweet v. Cardona Plaintiffs

Sweet v. Cardona plaintiffs should be aware of student loan scams. The Federal Trade Commission (FTC) reports that scammers are attempting to take advantage of plaintiffs in the settlement by trying to extract money to supposedly expedite the claims.

The FTC website says, “Don’t pay anybody for anything related to your borrower defense claim. Nobody can move you up in line, give you special access, or guarantee a successful application. Not for free, and certainly not for money. And only scammers will ask. And if you spot a scam, tell the FTC: ReportFraud.ftc.gov.”

The Takeaway

The historic settlement of Sweet v. Cardona has underscored the importance of pursuing an education at a school that provides integrity and value and doesn’t over promise what they can deliver.

Individuals who borrowed federal student loans for a degree that ended up being subpar, or if their school defrauded or misled them, can apply for borrower defense from the Department of Education for relief from their loans. If they prove their case and their application is approved, they can receive debt relief.

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

FAQ

What is Sweet v. Cardona about?

Sweet v. Cardona is a settlement of a class action lawsuit filed by over 200,000 people who attended schools that they successfully argued defrauded them of an education. The landmark case grants $6 billion in relief from federal student loans.

Who qualifies for relief under the Sweet v. Cardona settlement?

People who attended one of the more than 150 schools included in the Sweet v. Cardona settlement, and who filled out an application by June 2022 that was approved, qualify for relief under the settlement. It is too late to join the class action suit now.

How does this case affect the borrower defense to repayment program?

The Sweet v. Cardona lawsuit was filed because individuals who successfully completed and submitted borrower defense to repayment applications said it was taking too long to get debt relief. The Department of Education says it has since made improvements to borrower defense and streamlined the process.

photocredit: iStock/gorodenkoff
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.

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This year, Federal Student Aid (FSA) estimates that filling out the Free Application for Federal Student Aid (FAFSA^®) takes less than one hour. Read on for the information you’ll need, the steps to take before going to the FAFSA site, and what to expect when filling out the application online.

Completing the FAFSA Application for Academic Year 2025-2026

If this is your first time submitting the FAFSA, you’ll be glad to know that it usually takes less time after the first time (yes, FAFSA is submitted annually.)

Not quite ready to submit your FAFSA, but want an estimate of your student aid package? You can fill out an abridged Federal Student Aid Estimator .

Recommended: 6 Reasons to Go to College

Docs You’ll Need to Fill Out FAFSA

Before you start the online FAFSA form, it’s useful to have the info you’ll need handy. That includes:

•   Your Social Security or alien registration ID

•   Federal income tax returns for 2023, W-2s and other financial documents for yourself (and your parents if you’re a dependent)

•   Most recent bank statements

•   Any untaxed income amounts

12 Steps to Filling Out the FAFSA

For the 2025-2026 academic year, the FAFSA opened November 21, 2024, and it closes June 30, 2026. (For the 2024-2025 academic year, the FAFSA opened in December 2023, and closes June 30, 2025.) That said, schools and state and scholarship programs have varying deadlines, so it’s a good idea to check and double-check the FAFSA deadlines for everything you are applying to.

Here are the steps to completing the online FAFSA form.

1. Creating Your FSA ID

The first step is creating a Federal Student Aid ID . This is simply the username and password you’ll use to log into FAFSA. Note that if your parents’ financial info is required to complete the application, a parent will also need to create a FSA ID.

2. Logging in

Now that you have a FSA ID, you’re ready to log into the online FAFSA form. Use this FAFSA tool to determine which parent should participate in your FAFSA form.

Once you’re in, you will be asked to accept or decline the disclaimer, which details how the site will use and monitor your data. You should then be prompted to start a FAFSA application for 2025-2026.

You’ll also be asked to create a save key, which is a temporary code in case you leave the site before you submit your application. In other words, if you don’t finish FAFSA in one sitting, you can enter your save key and pick up where you left off.

3. Filling in Your Personal Information

You (the student) will be asked to fill in the following info (you’ll be prompted to hit “Continue” several times):

•   Your Social Security number

•   Full name

•   Date of birth

•   Email address

•   Phone number

•   Mailing address

You’ll then need to answer questions about:

•   Your marital status

•   Whether you are a citizen

4. Filling in Your Student Information

Next, you’ll need to answer questions about your education and future plans. Specifically, you’ll be asked about:

•   Your college grade level at the beginning of the 2025-2026 academic year

•   The college degree or certificate you will be seeking to earn

Additionally, you’ll be asked to provide:

•   Information about your personal circumstances

•   Whether you’ve ever been in the foster care system

•   Any unusual circumstances regarding your parents, such as being unable to contact them

5. Filling in the College Search Section

To send your FAFSA information to schools you’re applying to, you’ll need to add the federal school code for each school. Doing so allows colleges to receive your FAFSA information and so use it to provide you a financial aid package. The online form will help you find the codes; you just input the school name, city, and state. You can add up to 10 colleges at a time.

Next, for each school, you’ll need to select your housing plan (on campus, with parent, or off campus).

Recommended: SoFi’s College Search Tool

6. Filling in Info That Helps Determine Your Dependency Status

Your answers in this section will determine whether you are an independent or dependent student— and so determine the financial information you and your parents will need to provide. Specifically, you’ll be asked about:

•   Whether you have children that you support

•   Whether you have other dependents who live with you and you support

•   Whether you are on active duty or a veteran of the U.S. armed forces, are an emancipated minor, whether someone other than a parent or stepparent has legal guardianship, and whether you have ever been in foster care or a ward of the court or both parents have died since you were 13.

•   Whether you were homeless or self-supporting and at risk of being homeless on or after July 1, 2024

7. Learning Your Dependency Status

The smart technology of the online FAFSA form determines whether you’re a dependent or not. If you are single, have no children or other dependents, and answered “none of the above” and “no” on the previous two screens, you are likely a dependent. As a result, your parents’ financial information will be needed in addition to yours to complete the form and calculate your expected family contribution (which will soon be replaced with the student aid index).

Please note that the rest of these steps assume you’re filing as a dependent. While the process of filing as an independent will be similar, you won’t be asked to provide information about your parents.

8. Filling in Your Parents’ Personal Information

You (the student) can answer the following questions about your parents:

•   Their marital status and whether they are separated, divorced, widowed, or remarried

•   Each parent’s name, Social Security number, date of birth, and email

•   State of parents’ residence and date they became a resident

•   Number of other dependent children and other dependents your parents have

9. Providing Your Parents’ Financials

You will need info about your parents’ tax return for 2023 to answer the following questions about:

•   Their tax return status

•   The type of tax return they filed (i.e., 1040 or something else)

•   Their tax filing status (e.g, married-filed joint return)

At this point, you can either use the IRS Data Retrieval Tool (DRT) that pulls their tax return information into the FAFSA form or enter their info manually. In addition to being more convenient, using DRT means you may not have to later provide IRS documentation. (As mentioned earlier, one of your parents will need to create and provide an FSA ID and password to use DRT.)

If you are manually entering your parents financial info, you will need to answer questions about:

•   Their adjusted gross income

•   Amount each parent earned

•   Amount they paid in federal taxes

•   Amounts of other income (such as college grants and tax-exempt interest income)

•   Amounts of child support paid, earnings from work under a Cooperative Education Program, and taxable earnings from need-based employment programs

•   Amounts of untaxed income (such as child support or payments to tax-deferred retirement savings plans)

•   Their assets (including the value of cash and bank accounts, investments, and owned businesses and investment farms)

10. Providing Your Financials

You’ll also need to provide your financial information. Basically, you will be asked for the same info about yourself that you provided in the previous step about your parents’ income and assets.

11. Checking for Errors

Once you’ve reached the end of the application, you’ll see a summary to review. Checking that all the information is accurate may help avoid having to file a FAFSA correction later.

You’ll also need to answer a few more questions that the federal government collects about gender, ethnicity, and race. This info has no impact on whether you will receive financial aid.

Recommended: How Much FAFSA Money Can I Expect?

12. Signing and Submitting

FAFSA requires you to accept or reject its agreement of terms. If your parent or parents provided information because you filed as a dependent, one of them will also need to accept these terms in order for you to submit the application. Both you and your parent will e-sign using your FSA ID. Once you’ve signed and submitted your application, your FAFSA is complete.

Downloadable FAFSA Form for 2025-2026

Here’s the FAFSA form for 2025-26 if you want to see it before logging in to fill it out — or if you want to print it, fill it out, and mail it in.

What’s Different About the 2025-26 FAFSA

The Department of Education says it has modernized the FAFSA process and improved the user experience and functionality in filling out the online form. They have also added more staff to address applicants’ questions, and expanded the hours to provide help. You can reach staff through the Federal Student Information Center and find answers to frequently asked questions about filling out the FAFSA form at the FAFSA Help Center.

Additionally, the 2023-24 form does not ask about Selective Service registration status or drug convictions.

A Few Extra Tips

Completing FAFSA can be an overwhelming process. It can also be tempting to skip it altogether, especially if you’re from a middle- or high-income family and you believe you aren’t eligible for aid. However, that’s an assumption that could mean leaving aid on the table. Here are three more helpful tips:

1.    Schools, states, and scholarships have varying deadlines. As stated earlier, FAFSA opened November 21, 2024, and closes June 30, 2026, for the 2025-2026 academic year. However, the schools and scholarships you’re applying to may require you to fill out your FAFSA before that time, so it’s best to check each school’s and program’s FAFSA deadlines to avoid losing out on aid.

2.    The IRS Data Retrieval Tool can help you avoid making mistakes. This tool auto-fills your (and your parents’) latest tax information from the IRS database. So instead of having to figure out what the adjusted or non-taxed income was on your parents’ tax return, you can let the tool do it for you.

3.    It doesn’t pay to guess. Not sure how to fill out a section or what the answer is? FAFSA offers helpful tips and clarifications throughout each section of the FAFSA form, so be sure to use the text and articles embedded on the form—just click on the question mark icon. Inaccurate answers can result in receiving less financial aid than you’re eligible for as well as needing to file corrections and send in supporting documentation.

Recommended: Navigating Your Financial Aid Package

The Takeaway

Filling out the FAFSA is a great first step to pay for your dream school. This is one of the best ways of getting scholarships and grants you won’t have to pay back or government-backed loans to help you pay for college-related costs. By learning how to properly fill out the FAFSA (and then actually doing so!), you can increase your odds of getting a bigger financial aid package.

However, if your financial aid package doesn’t cover all your college expenses, you may want to consider a private student loan. It’s important to note that private student loans don’t offer the same protections as federal student loans, like income-driven repayment plans or deferment options. For this reason, private student loans are generally considered only after other sources of funding have been considered.

SoFi’s private student loans are available for undergraduate and graduate students, as well as parents. In just a few minutes, you can apply online for student loans and be well on your way to financing your education.

SoFi private student loans offer competitive interest rates for qualifying borrowers, flexible repayment plans, and no fees.

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.

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.

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.

Header photo credit: iStock/Vladimir Sukhachev

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Student Loan Debt Statistics in 2024

Pursuing higher education is a worthwhile act no matter the cost, but the cost does play a role. Student loan debt statistics point to a total outstanding balance of $1.745 trillion.

Knowing how much student loan debt is potentially on the way can help students and their parents better prepare to manage the costs of higher education. So, how much student loan debt is normal? Let’s take a look at some statistics about student loan debt that can shed some light for potential borrowers.

Overview of Student Loan Debt in America

Before we dive into American student loan debt statistics, it’s important to note that these numbers are just averages. How much student loan debt someone stands to accumulate depends on many different factors such as school choice, living arrangements, and the type of student loan they take out.

Total Outstanding Student Loan Balance

Let’s start our examination of statistics on student loan debt in America by getting an idea of the bigger picture. As noted earlier, American borrowers amassed over $1.745 trillion worth of student loan debt as of June 2024, according to the Federal Reserve.

Average Student Loan Debt per Borrower

The College Board found that as of March 2023, 32% of federal loan borrowers had debt under $10,000. Another 21% held student loan balances between $10,000 and $19,999, and 22% held balances between $20,000 and $39,999.

Student Loan Debt by Education Level

The type of degree a student pursues can influence how much they spend on their education and how much they need to borrow. These statistics for student loan debt by degree can help students determine how far they want to take their education or how much they need to save to avoid student loan debt based on their degree goals.

Bachelor’s Degree Debt Statistics

Many students choose to start and stop their higher education journey with a bachelor’s degree.
For the 2021-22 school year, 51% of bachelor’s degree recipients from public and private nonprofit four-year institutions graduated with debt, averaging $29,400 per borrower.

Among public four-year institution graduates, 49% had federal loans with an average debt of $20,700, while 52% of private nonprofit institution graduates had federal loans, averaging $22,200.

The average private student loan debt is $34,600 per borrower at public four-year institutions and $44,600 at private nonprofit institutions.

Master’s Degree Debt Statistics

Once students choose to pursue a degree higher than a bachelor’s, the student loan debt begins to mount. For students in class of 2019-20, 13% of master’s degree recipients borrowed $100,000 or more to finance their undergraduate and graduate education.

Recommended: How to Live with Student Loan Debt

Doctoral Degree Debt Statistics

A doctoral degree is another option students have for continuing their college education. Like the master’s students, 13% of doctoral degree recipients needed to borrow $100,000 or more to cover the total costs of their college education.

Repayment Challenges and Delinquency Rates

Based on how much student loan debt borrowers have on average, it’s easy to see why some borrowers may struggle with repaying their student loans on time. A delay in payments can lead to delinquency. Student loan delinquency occurs when a borrower fails to make a scheduled payment on their loan by the due date. If the payment is late for an extended period, the loan can default, leading to more severe financial consequences, such as a hurt credit score or the debt entering collections.

Percentage of Borrowers in Delinquency

How many borrowers find themselves struggling with student loan payments? In October 2023, student loan payments that were paused during the pandemic resumed. According to the Department of Education, at that point about 30% of borrowers were past due on student loan payments (this accounts for about $290 billion in loans).

Factors Contributing to Delinquency

Avoiding delinquency is easier when the borrower understands what it means to be delinquent on a loan account. If a borrower fails to make payments on time (whether this is payment number one or the final one), the loan eventually falls into default.

Many borrowers struggle to keep up with student loan payments while juggling other important expenses like housing, groceries, and transportation. With federal student loans, it’s possible to sign up for a repayment plan based on your income (and to enjoy other perks like student loan forgiveness programs). These income-driven repayment plans can make it easier to stay on budget, as they tend to result in smaller monthly loan payments.

A word of warning — income-based repayment plans often mean a longer loan term, which leads to the borrower paying more in interest overall. Whenever possible, paying off a student loan early can lead to major interest savings.

Private student loan lenders tend to be less flexible when it comes to repayment, but if a borrower is struggling to make payments on time, it’s always a good idea to ask for support.

Impact of Student Loan Debt on Life Milestones

When a borrower has to manage student loan debt payments, their monthly budget has less room in it to support their other financial goals — many of which can affect when they can achieve certain important life milestones.

For example, the National Association of Realtors found that 40% of consumers with student loan debt don’t have an emergency fund of $500. It’s easy to see how that level of financial strain can push back meeting goals like buying a home or getting married.

Homeownership Rates

Speaking of buying a home, 46% of student loan borrowers delayed moving out of a family member’s home after college, and more than half (51%) put their goals of buying a home on hold.

Delayed Marriage and Children

Family planning in particular becomes more tricky when navigating repaying student loan debt. Because of their student loan debt burden, borrowers reported delaying:

•   Having a long-term partner (12%)

•   Getting married (12%)

•   Starting a family (14%)

•   Adding to their existing family (10%)

Retirement Savings and Planning

Retirement may feel eons away to college students and new graduates, but it’s never too soon to start saving for a happy retirement. Unfortunately, 26% of student loan borrowers reported they haven’t been able to afford to contribute to a retirement account at all.

The Takeaway

Student loan debt doesn’t need to scare anyone away from pursuing higher education if that is something they dream of pursuing. That being said, knowing what that debt burden can look like can help students make more strategic decisions about where they go to school, how much they borrow, and how they plan to pay it off.

If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.

What is the average student loan debt for bachelor’s degree holders?

Over half (51%) of bachelor’s degree recipients from public and private nonprofit four-year institutions have student loan debt, with an average debt of $29,400. Specifically, graduates from public four-year institutions had an average federal debt of $20,700, while those from private nonprofit institutions averaged $22,200.

Which degree level tends to have the highest student loan debt?

Borrowers who pursue a professional degree tend to borrow the most. According to the Education Data Initiative, the major with the largest median debt is Doctor of Pharmacy at $310,330.

How do student loan debt statistics vary by region or state?

Student loan debt statistics show significant variation by region and state. For instance, in New Hampshire, the average student loan debt is $39,928, with 70% of borrowers having debt, while in Utah, the average is $18,344, and 39% of borrowers carry debt.

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.

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.

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 .

photocredit: iStock/Visions
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