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Pursuing a college education as a single mom can be both challenging and rewarding. With the added responsibilities of parenting, managing finances, and balancing schoolwork, finding the necessary resources to fund your education is essential. Fortunately, there are numerous scholarships specifically designed to support single mothers in achieving their academic goals.

Keep reading to learn various types of scholarships for single moms, their eligibility requirements, and how to apply, empowering you to pursue your educational dreams.

Eligibility Requirements

Eligibility requirements for scholarships for single moms differ from scholarship to scholarship. Carefully review the qualifications for each scholarship so you understand whether you’ll qualift. Beyond being a single parent, scholarship committees may impose other requirements, such as:

•   Citizenship

•   Where you live

•   Academic qualifications (grade point average/test scores)

•   Major in college

•   Credit hours in college

•   Financial qualifications; may require filing the Free Application for Federal Student Aid (FAFSA)

•   Essay requirement

•   High school or college transcripts

•   Letters of recommendation

•   Extracurricular activities

It can be tricky to keep all the eligibility requirements organized for each scholarship, so you may want to create a spreadsheet to keep it all straight.

How to Find Scholarships for Single Moms

Scholarship databases can help you find scholarships specifically geared toward single moms, and you can also look for scholarships based on keywords specific to your area, major, and more. For example, you may want to use the keywords “scholarships for single moms in medical school” or other criteria that will allow you to find scholarships for your situation.

Furthermore, you can also file the FAFSA to learn more about the types of scholarships you can apply for based on the school you want to attend.

Scholarships for Single Moms

Below is a list of scholarships for single mothers. Make sure to check out the requirements and deadlines for each.

•   The Colwell Law Group, LLC Single Parent Scholarship: To qualify for this $1,000 award, you must be enrolled in an undergraduate, graduate, or law program within the U.S., have a minimum GPA of a 3.0 on a 4.0 scale, and submit an up-to-date resume, current official or unofficial transcripts, and a 750-word essay about how being a single parent has impacted your life.

•   Women-in-Transition Scholarship: This scholarship offers $8,000 over two years to students pursuing a bachelor’s degree at a four-year college or university or $4,000 over two years for students pursuing an associate’s degree. Students must maintain a 3.0 GPA, enroll in an accredited school in the U.S., commit to an accounting or finance degree, and demonstrate financial need.

•   Patsy Takemoto Mink Education Foundation: The Patsy Takemoto Mink Education Foundation offers up to $5,000 for students at least 17 years of age pursuing a first degree at an accredited postsecondary institution. Individuals must demonstrate financial need to qualify for this scholarship.

•   ANSWER Scholarship: The ANSWER Scholarship, which typically ranges from $2,750 per year for associate’s degrees to $5,500 per year for bachelor’s degrees, goes to primary female caregivers with at least one school-age child. Applicants must be U.S. citizens and legal residents of Mecklenburg, Cabarrus, Catawba, Cleveland, Gaston, Iredell, Lincoln, Rowan, Stanly, or Union County in North Carolina or Lancaster or York County in South Carolina. They must also attend accredited institutions in those counties and plan to achieve specific degrees. Recipients must also participate in the Mentors for Mom Program, maintain satisfactory academic performance, as well as attend ANSWER luncheons and fundraisers.

•   Jeannette Rankin National Scholar Grant: National Scholar Grant applicants must be 35 or older, demonstrate financial need, and have a plan for reaching their goals. They must also be pursuing a technical or vocational education degree, an associate’s degree, or a first bachelor’s degree at an accredited institution. The award is worth up to $2,000 per year for up to five years.

•   Judith McManus Price Scholarship for Women and Minorities in Planning: This $5,000 scholarship is for women and minority students enrolled in Planning Accreditation Board (PAB)-approved programs who are citizens of the U.S. and who demonstrate need.

•   Beatrice F. Kroesche Memorial Scholarship: Applicants for this $1,000 to $2,000 scholarship for single parents must enroll in the College of Education or Department of English at the University of Utah. Applicants must carry at least 12 hours of study and maintain a 3.0 GPA or better.

•   Women With Promise Scholarship: Full- or part-time students who are residents of north Texas and plan to attend accredited institutions can apply for this scholarship. Students can receive between $250 and $5,000 for tuition, books, and fees.

These aren’t the only scholarships available. Search for other scholarships as well, and check for potential scholarships at your intended college or university.

Types of Scholarships Available for Single Moms

Single moms can tap into two main types of scholarships for moms: need-based and merit-based scholarships. What’s the difference between the two? Let’s dive into it below.

Need-Based Scholarships

Need-based scholarships are scholarships for women given to students based on financial need. In most cases, students qualify for financial need if they have a low income. Need-based aid often comes from the government, though nonprofit organizations and businesses may prioritize giving scholarships and awards to low-income students.

In many cases, students may also qualify for grants, which do not need to be repaid. For example, a student with high financial need might receive the Pell Grant after filing the FAFSA. For the 2024-25 school year, students can potentially receive a maximum Pell Grant award of $7,395. The Pell Grant amount adjusts every year.

Merit-Based Scholarships

Merit-based scholarships are not based on need, but rather a multitude of other factors, such as:

•   Academic achievements (such as GPA or test scores)

•   Extracurricular activities

•   Leadership

•   Community service

•   Talents and skills

They come from a wide variety of sources, such as colleges and universities, private organizations, and businesses. Check with the college or university you plan to attend to learn more about merit-based scholarships. In most cases, you’ll have to submit your application materials to the college or university to qualify for merit-based scholarships, which could include:

•   Transcripts

•   Recommendation letters

•   Resume

•   Essays

•   Interviews

•   Performance or display (such as in the case of theater, music, or art merit-based scholarships)

What happens if you don’t qualify for need-based or merit-based scholarships or grants? You can tap into private student loans or student loans for single parents.

Tips for Applying

To successfully apply for scholarships and increase your chances of getting selected, consider the following tips:

•   Meet application deadlines. One of the most important things you can do is to meet your application deadlines. Make sure to give yourself plenty of time to gather materials — including letters of recommendation — so the application doesn’t look rushed or messy.

•   Apply for everything. Apply for everything that fits your situation, even if the award amount is small. Smaller awards ($250 to $500) usually have less competition, so your odds are greater when it comes to being selected.

•   Write a good essay. The essay is your opportunity to showcase your situation and qualifications. If needed, hire a proofreader to ensure your essay is error-free.

•   Don’t get discouraged. If you get declined for a scholarship, there are thousands of others available. Consider all your qualifications, not just the ones that have to do with your single parent status.

•   Use our scholarship search tool. Our scholarship search tool, arranged in order of closest deadline, helps you see scholarships by keyword, award type, location, study level, and more. Learn more about our monthly $2,500 Scholarship Sweepstakes.

The Takeaway

Securing a scholarship can be a transformative experience for single moms pursuing higher education, providing both financial support and motivation to achieve academic and career goals. By understanding the various scholarships available, carefully reviewing eligibility requirements, and submitting strong applications, single moms can significantly reduce the cost of their education and focus more on their studies.

If scholarships aren’t enough to pay for the cost of college, you can rely on cash savings or federal and private student loans.

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.

FAQ

Is there a limit on how many scholarships you can apply for?

No, you can apply for as many scholarships as you want, but keep in mind that the college or university that you apply to may revoke some awards if you earn more in outside scholarships than the allowable limit. For example, if you receive a $10,000 outside scholarship, it may affect your financial aid award. Get in touch with the college or university of your choice to learn more.

Are there scholarships for single dads, too?

Absolutely! Use Google to search for scholarships for single dads, just like you would for scholarships or grants for single mothers. Ask your college or university for information about other scholarships and awards (including merit-based scholarships) you can apply for, as well.

Do I need to be a full-time student for single mom scholarships?

No, not necessarily. You can get grants and scholarships for single moms whether you are a part-time or full-time student. However, check the scholarship requirements. If it’s not clear, check with the scholarship committee for more information.

Photo credit: iStock/miniseries

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.

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SOISL-Q324-035

Distance learning can offer students the flexibility to balance coursework with working, taking care of family, and other responsibilities. The cheapest online colleges can help you minimize student loan debt while working toward a degree and career advancement.

Online colleges offer degrees across a wide range of academic disciplines. In 2022, around 26% of college students were taking online classes exclusively.

This guide will explore online college costs, the least expensive online colleges, and strategies to pay for an online degree.

Overview of Online College Costs

Whether studying in-person or online, college costs typically include more than just tuition.

Students taking online classes may have to pay technology fees and purchase books and materials depending on their area of study. The cost of an online degree can also vary by institution and in-state vs. out-of-state residency.

Here’s a closer look at the main cost considerations for online colleges.

Recommended: Guide to Paying for College

Tuition and Fees for Online Programs

Like traditional college, tuition and fees account for most of the cost of attending online college.

Tuition usually varies based on enrollment status or, in other words, whether you’re a full-time vs. part-time student. Part-time students pay per credit hour, whereas full-time students taking 12 to 18 credits per semester may pay a flat rate.

Online programs may also include fees on top of tuition, such as a technology or distance learning fee, to access virtual resources and technical support services.

Cost Comparison: Online vs. On-Campus

Students considering studying online vs. on-campus may ask which is cheaper. In short, it depends on the institution, degree program, and location, but studying on campus tends to be more expensive.

For example, a first-year, in-state undergrad at Penn State’s University Park campus would pay $19,672 in tuition and fees for the 2024-2025 academic year. Meanwhile, an online undergraduate student would be charged $7,678 per semester, or $15,356 for the academic year.

Looking at tuition and fees is just part of the cost comparison. The total cost of attendance for studying on campus could include transportation expenses, room and board, and a meal plan — all costs that may not be incurred with the cheapest online colleges.

In-State vs. Out-of-State Online Tuition

The cost of online college can vary based on where you live.

At public institutions, students with in-state residency may benefit from subsidized tuition, even for online degree programs. However, most private schools do not differentiate tuition costs between in-state and out-of-state students.

Recommended: In-State Tuition: A Look at Establishing Residency

10 Affordable Online Colleges to Consider

Looking for the cheapest accredited online colleges? Here’s a short list of affordable online colleges to consider.

Factors Contributing to Lower Online College Costs

Why are online colleges cheapest for earning a degree? For starters, traditional colleges with in-person learning offer a range of experiences and infrastructure for students that online colleges don’t.

With online college, students have a much wider range of institutions and degree programs to choose from, increasing their options for an affordable education. Taking classes from home also avoids having to relocate and pay for moving costs.

Here are some additional factors contributing to lower online college costs.

No Campus Facilities or Housing

Dormitories, campus quads, athletic facilities, and many other facilities that define a quintessential college campus require a considerable budget to maintain. Besides tuition, students taking classes in-person may be required to pay for on-campus housing and meal plans for a portion of the full duration of their enrollment.

Meanwhile, students enrolled in online college are typically spared from paying housing and campus facility costs, including parking and recreation fees.

Recommended: Cheapest States to Go to College in the United States

Lower Administrative Overhead

Besides teaching faculty, traditional colleges require onsite staff to support student life on campus. This may include health services, campus events, dining services, and other areas related to student well-being.

With less support staff, online colleges have comparatively less overhead cost to meet the needs of their students.

Technology and Course Delivery Methods

Online colleges may charge additional technology fees for students enrolled in distance learning. However, online students could save on the cost of books and materials if primarily using digital resources for their coursework.

Taking classes online vs. in-person lectures can save on transportation costs, too, which average $1,360 annually for students who commute to college.

Flexible Scheduling and Self-Paced Options

Self-paced online programs allow students to watch lectures and complete assignments at their own speed. This approach can make it possible to take online classes while working or juggling family commitments, helping to pay for school and save on childcare costs.

Additional Cost-Saving Strategies

Though online college can be more affordable, students might consider other options for lowering costs.

Wondering how to pay for college? Here are some additional ways to reduce the cost of going to online college.

Transfer Credits and Prior Learning

Students who previously attended another institution could save on their online education by transferring credits. Transferring college credits usually involves an application fee or enrollment fee, but that’s still cheaper than taking the credit hours anew.

Financial Aid and Scholarships

Around 87% of college students receive some form of financial aid. Most colleges with free tuition or income-based tuition are in-person institutions, though students enrolled in online programs may qualify for financial aid and scholarships to help cover the cost of tuition.

When browsing online programs, keep in mind that colleges and universities must be accredited for students to be eligible for federal student aid, such as Pell Grants and federal student loans. Online students may also leverage private student loans and state and institutional financial aid in the form of scholarships or grants.

Already in the workforce? There are jobs that pay for your degree through scholarships or tuition reimbursement that could be a fit for your academic and professional goals.

Recommended: How to Complete the FAFSA Step by Step

Accelerated or Competency-Based Programs

An online competency-based or accelerated program is another option for students to learn at their own pace instead of following a set semester schedule.

Generally, students can choose when to take an assessment to demonstrate they’ve mastered a competency, potentially earning their degree faster and at a reduced cost.

The Takeaway

The cheapest online colleges can make earning a college degree more affordable. Besides the cost of tuition and fees, financial aid and long-term career goals are important considerations when comparing schools and degree programs.

To pay for your online education, you can use cash savings, grants, scholarships, and student loans.

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.

FAQ

What is the cheapest accredited online college?

The cheapest accredited online college on our list is University of North Carolina at Pembroke. Note that the cheapest online college can differ based on a student’s chosen program, credit hours, and residency status.

Are cheap online degrees worth it?

A cheap online degree can offer a flexible and affordable path to higher education and career advancement. When evaluating online degrees, consider the program’s cost, curriculum, and reputation.

How can I maximize cost savings for an online degree?

You can save on online college by enrolling in a program offering cheaper in-state tuition or self-paced learning to earn a degree in less time.

Do employers value cheap online degrees?

Employers will value a cheap online degree the same as a traditional degree if it’s from an accredited institution and meets the same academic standards. Earning an online degree while working also demonstrates time management skills to potential employers.

Photo credit: iStock/DisobeyArt

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.

SOISL-Q324-033

Divorce brings about many challenges, one of which is figuring out how to finance your child’s college education. College tuition is a significant expense — approaching $40,000 per year, on average — and the financial dynamics between divorced parents can add complexity to an already difficult decision-making process.

Understanding your options, obligations, and available resources is crucial for ensuring your child’s educational future is secure. Here, we’ll explore how divorced parents can approach paying for college tuition, including understanding legal obligations, navigating financial aid, and collaborating together to achieve the best outcome for their child.

Understanding Legal Obligations for College Payment

It’s important to understand your legal obligations when it comes to paying for college, particularly in connection with child support and divorce decrees. It’s also important to note that the FAFSA® guidelines for divorced parents have changed. Rather than using the financial information of who the child lived with the most, the FAFSA will use the information from the parent who provided the most financial support. Let’s take a look.

Child Support and College Expenses

Divorce settlement agreements often address who will pay for college, which is separate from child support.

What exactly is child support? When parents get divorced, it’s common for the parent who does not have custody to pay child support, which usually translates to financial support for minor children. Parents can stop making child support payments when a child turns 18 and the child graduates from high school (unless the child is still in high school and cannot support themselves).

In some cases, one parent may also be required to pay for college, as well. Educational expenses typically get addressed during the divorce process, so you’ll know your exact responsibilities regarding your child’s college education. However, your obligation will depend on your state’s laws.

Some states may order divorced parents to help pay for college-related expenses, while others view them as conditional expenses. The following states allow courts to order non-custodial parents to help pay for college:

•   Alabama

•   Arizona

•   Colorado

•   Connecticut

•   Florida

•   Georgia

•   Hawaii

•   Illinois

•   Indiana

•   Iowa

•   Maryland

•   Massachusetts

•   Mississippi

•   Missouri

•   Montana

•   New Jersey

•   New York

•   North Dakota

•   Oregon

•   South Carolina

•   South Dakota

•   Utah

•   West Virginia

•   Washington

•   Washington, D.C.

Divorce Decrees and Education Provisions

A divorce decree refers to the legal paperwork that formalizes the end of a marriage and outlines the binding terms after a divorce. It outlines child support and other factors, including education provisions. A divorce decree should also identify who will pay for college preparation and college itself, which can include:

•   Standardized tests

•   Admission applications

•   College visits

•   Tuition

•   Room and board

•   Required college fees

For example, one parent may be required to pay for room and board, while the other parent may pay tuition. You may also want to consider an appropriate cap on these expenses, considering the rising costs of college and the length of time it can take students to complete their degrees.

Keep in mind, too, that parents are not required to pay for their child’s college education. College students can rely on cash savings, scholarships, and both federal and private student loans to cover the cost of college.

Recommended: Examining the Different Types of Student Loans

Strategies for Tuition Cost-Sharing Between Parents

Let’s take a look at some strategies for how to pay for college for divorced parents, from negotiating contributions to making proportional payments based on income.

Negotiating Contributions

It’s important to review your financial situation together, consider the resources each parent can draw from, and figure out which types of expenses to cover. It’s best to create a written plan using an attorney or mediator to outline how you’ll manage college costs. The financial situation of each party should dictate a customized plan.

It’s important to note that when splitting costs, you may not be able to divide costs right down the middle (though splitting it 50/50 might make sense if both parents have a similar income and educational values). For example, your ex may not agree on the necessity of studying abroad or expensive curtains for a dorm room. Since those expenses aren’t “necessary,” either the parent who wants to pay for them can, or the student can be responsible for paying for non-essential expenses on their own.

Proportional Payments Based on Income

Those undergoing divorce often agree to split college expenses based on income. If one partner has a significantly smaller income than the other, the income disparity may be taken into account. For example, if one parent makes 80% of the combined income, that parent would be responsible for 80% of college costs and expenses.

Maximizing Financial Aid Eligibility

To qualify for financial aid, students must fill out the Free Application for Federal Student Aid, or FAFSA. For divorced or separated parents, the FAFSA process may differ from that of married parents.

Reporting Divorced Parent Information

The FAFSA is a free application that students can use to apply for federal, state, and institutional aid. Every family should file the FAFSA, and how you fill it out depends on whether you and your ex live together or not.

You answer questions on the FAFSA about the parent who provided more financial support that year. If that parent has remarried, the stepparent’s financial information will also be required.

The parent’s income and assets are used to calculate the Student Aid Index (formerly the Expected Family Contribution), which determines the student’s eligibility for federal financial aid. The parent who provided the least financial support is not required to put their financial information on the FAFSA, but it may be needed for other financial aid applications, such as the CSS Profile, which some private colleges require.

If you’re divorced and live together, you’ll add “unmarried and both legal parents living together” and answer questions about both of them on the FAFSA. Note that if you are separated from your spouse but still live together, you’ll indicate your marital status as “married or remarried,” not “divorced or separated.”

Special Circumstances Considerations

If you get divorced during the middle of a school year, you may want to submit a special circumstances form through the financial aid office of the school your child attends. The financial aid office may take a divorce into consideration and readjust your child’s aid award due to your financial situation. Anytime you experience a change in income or assets, notify the admissions office immediately.

Loans and Financing Options for Divorced Parents

Even with financial aid, scholarships, and savings, many families find they still need additional funds to cover college costs. Several financing options are available to help bridge the gap, including:

•   Federal Parent PLUS Loans: Parent PLUS Loans are available to parents of dependent undergraduate students. They offer a fixed interest rate and flexible repayment options. However, they require a credit check, and parents are responsible for repayment.

•   Private Student Loans: These loans are offered by private lenders and can be used to pay for college costs not covered by financial aid. Interest rates and terms vary, and a cosigner may be required.

•   Home Equity Loans or Lines of Credit: If you own a home, you may be able to tap into your home’s equity to help pay for college. These loans often have lower interest rates than other types of loans, but they put your home at risk if you can’t repay.

•   Payment Plans: Many colleges offer payment plans that allow you to spread tuition payments over the course of the year. This can make payments more manageable without accruing interest.

Tax Implications and Benefits

Fortunately, there are tax benefits to paying for college, beginning with claiming your student as a dependent.

Claiming the Student as a Dependent

Claiming a student as a dependent can save you thousands on your taxes. You can claim a college student as a dependent on your tax return as long as the student is younger than you, under age 24, and a full-time student for at least five months of the year.

Education Tax Credits and Deductions

Worried you can’t afford a child’s college bills? Don’t forget that tax credits and other tax benefits can offset the qualified costs of college or career school (tuition, fees, books, supplies, equipment). These benefits include:

•   American Opportunity Credit: The American Opportunity Credit allows you to claim up to $2,500 per student per year for the first four years of school your child is in school.

•   Lifetime Learning Credit: The Lifetime Learning Credit allows you to claim up to $2,000 per student per year for tuition and fees, books, supplies, and equipment.

•   QTP/529 Plan: If you contribute to a QTP/529 plan to prepay or save for education expenses, you can withdraw the money you put in, tax-free.

•   IRA Withdrawals: If you take money from an individual retirement account (IRA), you owe federal income tax on the amount you withdraw, but not the withdrawal penalty.

Communicating and Collaborating with Your Ex

Effective communication with your ex-spouse is key to successfully navigating college financing. Even if your divorce was contentious, it’s important to set aside differences and focus on what’s best for your child. This includes discussing financial responsibilities, coordinating on financial aid applications, and agreeing on a plan for covering any remaining costs.

It’s also important to involve your child in discussions about financing their education. Be open about the costs, what you and your ex-spouse can contribute, and what they may need to cover through scholarships, work-study programs, or student loans. This helps set realistic expectations and encourages your child to take an active role in their financial future.

The Takeaway

Paying for college can be a daunting task for divorced parents, but with careful planning, communication, and collaboration, it’s possible to navigate the challenges successfully.

You should start by understanding the legal obligations and exploring all available financial aid options. Work together with your ex-spouse to create a plan that works for both of you, and involve your child in discussions about financing their education.

Options for paying for college as a divorced parent include splitting the cost with your ex based on each of your incomes, having your student apply for scholarships, and relying on both federal and private student loans.

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.

FAQ

How is the expected family contribution calculated for divorced parents?

The expected family contribution (EFC) has been revamped to become the Student Aid Index (SAI) through the FAFSA Simplification Act. The SAI evaluates the financial resources that a student may contribute toward educational expenses. Because of the FAFSA Simplification Act, the parent who provided the most financial support during the year is the income that will be used to determine the SAI.

What if one parent refuses to pay for college?

Parents — married or divorced — are not obligated to pay for college. Child support might terminate when the child reaches the age of majority (such as 18 or 21), and students enrolled in a postsecondary educational institution might have to access financial support through college. Check with a family law attorney licensed in your state to give you guidance about who may be obligated to pay for college.

Can stepparents be required to pay for college tuition?

Stepparents are usually not required to financially support stepchildren, but in a few instances, family court may require a stepparent to pay financial support for a stepchild. Various factors may come into play, including the length of the marriage, relationship between stepparent and stepchild, existing financial support, and more.

Photo credit: iStock/FG Trade

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.

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.

SOISL-Q324-031

All federal student loans and most private student loans have simple interest. With simple interest, borrowers pay interest only on the principal of the loan.

Loans with compound interest charge interest on the principal and on unpaid interest. This makes them more expensive than simple interest loans.

It’s important to understand how the interest on your student loans is calculated so that you know what you’re paying over the course of your loan term.

Understanding Simple and Compound Interest

The interest you pay on a student loan is the cost of borrowing the money. Here’s how simple vs. compound interest works.

Simple Interest Explained

Simple interest means you pay interest only on the principal balance. You do not accrue interest on any unpaid interest.

Simple interest is calculated using this formula: Principal x Interest Rate x Loan Term.

Compound Interest Defined

With compound interest, you pay more interest over time. The lender charges interest on your loan balance plus the unpaid interest that accrues.

How much compound interest you’ll pay depends on the number of compounding periods your loan has. The more compounding periods, the more the compound interest amount will be.

For example, if your loan compounds daily, the daily interest rate is applied to the principal along with any unpaid interest up until that point.

Over the life of the loan, compound interest will cost a borrower more.

Recommended: Student Loan Debt Guide

How Student Loan Interest Works

The way student loan interest works depends on the type of loan you have.

Federal Student Loan Interest

Federal student loans, which are backed by the U.S. Department of Education, have fixed interest rates, which means the interest rate never changes. While the interest on these loans begins accruing immediately, how the interest is handled depends on the type of loan you have.

With Federal Direct Subsidized loans, which are awarded based on financial need, borrowers do not pay interest while they are in school, during a six-month grace period after graduation, or during any deferment period. The government covers the interest payments during these times.

Direct Unsubsidized loans, which are not awarded based on financial need, work differently. Borrowers are responsible for paying the interest on these loans at all times. If they don’t pay the interest while they are in school, during the six-month grace period after graduation, or in times of student loan deferment, the interest will accrue and be added to the principal of the loan.

All Federal Direct loans are “daily interest” loans, which means interest adds up each day.

Private Student Loan Interest

Private student loans are offered by private lenders such as banks, credit unions, and online lenders. These loans may have either a fixed or variable interest rate.

The interest rates for private student loans are determined by the lender and are based largely on the borrower’s credit score and income.

Many private loans have simple interest, however, some use compound interest. Before taking out a loan, find what type of interest it has. This is one way to help manage student loan debt.

Check out our private student loan guide to learn more about how the interest works on these student loans.

Capitalization of Interest

When interest capitalizes, the unpaid interest is added to the principal amount of the student loan. This increases your loan’s principal balance, and interest is charged on the new, larger balance.

For instance, capitalization may happen during periods of deferment if you have Direct Unsubsidized loans. In that case, the interest may be added to the principal amount of the loan. This might increase your monthly payment and the overall cost of the loan.

Calculating Interest Costs on Student Loans

To calculate interest costs on student loans, first find out what kind of interest the loan has. In most cases, it will be simple interest. As discussed, all federal student loans and many private student loans have simple interest.

To determine how much the monthly simple interest would be, you first need to find out what the daily interest on the loan is. To calculate that, divide the interest rate by 365 and multiply that number by the principal amount.

For a $10,000 loan with a 6.00% interest rate, the calculation would look like this:

0.06/365 x 10,000 = $1.64

You’re paying $1.64 in daily interest. If your billing cycle is 30 days, multiply 1.64 x 30 = 49. That means you’re paying $49 a month in simple interest.

If the student loan has compound interest, the calculation is more complicated. As mentioned, the amount of compound interest you’ll pay depends on the number of compounding periods your loan has. For example, if your loan compounds daily, the interest rate is applied each day to the principal along with any unpaid interest up until that point.

So if your loan is $10,000 and your daily interest amount is $1.64, the next day, that interest is added to the principal and you’re charged interest on the new, higher amount of $10,001.64. The interest charges will continue to increase this way each day.

A student loan with compound interest can end up costing you more and result in your living with student loan debt over the long term.

Strategies to Minimize Student Loan Interest

Fortunately, there are ways to minimize student loan interest. Here are some steps that can help.

Making Interest-Only Payments

If you have Federal Direct Unsubsidized student loans or private student loans, making interest-only payments while you’re in school could save you money. These payments will help keep the interest from accruing and being added to your principal.

Refinancing for Lower Rates

When you refinance student loans, you take out a new private loan to cover the cost of your current loans. Refinancing may allow you to get a lower interest rate or better loan terms and help you simplify your loan payments. Using a student loan refinancing calculator can help you determine if you could benefit from refinancing.

It’s possible to refinance private and federal student loans. However, it’s important to note that if you refinance federal loans with a private lender you will no longer have access to federal programs and protections like income-driven repayment plans.

Paying Off High-Interest Loans First

Paying off your loans with the highest interest first could help you save you money over the long term because you’re paying off your costliest debt. To do it, make payments on all your loans when they’re due, but put any extra money you have toward the highest-interest loan.

After you pay off that loan, tackle the next-highest interest loan, and so on until your debt is paid off. This is commonly called the debt avalanche method of paying off debt.

Tax Implications of Student Loan Interest

It’s possible to get a tax deduction for the interest you pay on student loans. This is known as the student loan interest deduction and it allows you to potentially deduct up to $2,500, or the amount of interest you paid on your federal or private student loans — whichever amount is less — from your taxable income.

There are income phaseouts to this deduction based on your modified adjusted gross income (MAGI). Your MAGI must be below a certain limit, which typically changes each year, in order to claim the deduction.

The Takeaway

The interest on most student loans is simple interest and not compound interest. All federal student loans have simple interest and many private loans do as well.

Before you take out a student loan, make sure you understand what kind of interest it has and how the interest accrues. Depending on the type of loan it is, you may want to make interest payments while you’re in school to help manage your debt.

Refinancing your student loans may also be worth considering if you can qualify for a lower interest rate or better terms. You can shop around with different lenders for the best rates and terms for your situation.

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

Do federal student loans have simple or compound interest?

Federal student loans typically have simple interest, which is interest calculated only on the amount of money you borrowed (the loan principal). Many private student loans use simple interest as well, but some private student loans do use compound interest, in which interest is charged on your loan balance and on the unpaid interest that accrues.

Which type of interest is more expensive for borrowers?

Compound interest is more expensive than simple interest is for borrowers. That’s because compound interest is calculated on the accumulated interest as well as on your original principal. With compound interest, you end up paying more over time.

Can interest be deferred on student loans?

When you defer Direct subsidized federal student loans, the interest is deferred. However, interest continues to accrue on unsubsidized federal student loans during a deferment, and the unpaid interest will be capitalized and added to your loan principal when the deferment ends.

Photo credit: iStock/Rockaa

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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Administrative forbearance for student loans occurs when your payments are paused or reduced by your lender or loan servicer, often due to account management or technical issues. This means you’ll get a break from federal student loan payments and often from interest accrual as well until the forbearance ends. 

Keep reading to explore the ins and outs of administrative forbearance, how it can impact your financial future, and ways to manage your student loan debt.

Defining Administrative Forbearance

Administrative forbearance is when your federal student loan payments are temporarily paused or reduced by your lender. This relief can be given due to system glitches, billing errors, or even natural disasters. For example:

•   To tackle multiple issues with federal student loan servicing and repayment during the pandemic, the Biden administration opted for administrative forbearance. This paused payments for federal student loan borrowers and dropped their rates to 0% interest on student loans during the forbearance period. 

•   In late October 2023, the Department of Education (DOE) found that 2.5 million MOHELA borrowers received their billing statements late or with incorrect amounts, causing many to fall behind on their loan payments. To help, the DOE put these borrowers into administrative forbearance and withheld over $7.2 million from MOHELA, giving borrowers a chance to get back on track and keep their loans in good standing.

Administrative forbearance is usually applied automatically, so you don’t need to go through an approval process as with other types of forbearance. However, in some cases, you may need to contact your lender to opt in. 

Other Types of Student Loan Forbearance

Administrative forbearance isn’t the only type of relief available. Other types of student loan forbearance include:

•   General Forbearance: Also known as discretionary forbearance, this is when your loan servicer decides if you qualify for a break from payments when you can’t afford them. It’s available for Direct Loans, Federal Family Education Loan (FFEL) Program loans, and Perkins Loans, and lasts up to 12 months at a time. If you’re still having trouble after that, you can request another forbearance period.

•   Mandatory Forbearance: If you meet certain criteria, your loan servicer has to grant you forbearance on Direct, FFEL, and Perkins Loans. Specifically, this applies if you’re in a medical or dental residency, your loan payments are 20% or more of your income, or you’re completing qualifying teaching or military service. The forbearance lasts up to 12 months at a time and can be extended if you still qualify.

Keep in mind, forbearance is typically offered for federal student loans. If you have private loans (say, from a student loan refinance), your options will depend on your lender.

When Is Administrative Forbearance Granted?

Administrative forbearance is typically granted in situations like these:

•   You were given a deferment, but your lender later found out you weren’t eligible. 

•   There was a period in which payments were overdue before your deferment started.

•   There’s a gap between when you should start repaying and when your lender schedules your first payment.

•   Your loan is sold or transferred, and you’re less than 60 days behind on payments.

•   Your loan servicer needs time to determine if you qualify for a discharge, such as for bankruptcy or school closure.

•   There’s a delinquency period left after a deferment or mandatory forbearance before the next payment is due.

•   You’ve been affected by a natural disaster. 

Advantages and Disadvantages of Administrative Forbearance

Administrative forbearance offers both benefits and drawbacks. Here’s what you need to know.

Benefits of Temporary Relief

•   Administrative forbearance, while not under the borrower’s control, can provide unexpected financial relief when it occurs. 

•   Interest does not usually accrue during the period of administrative forbearance.

•   Typically, you will get credit toward income-driven repayment (IDR) forgiveness and Public Service Loan Forgiveness (PSLF) for months that your loan spends in administrative forbearance.

Downsides of Administrative Forbearance

•   During administrative forbearance, there is the possibility that your loan servicer might have interest accrue during the forbearance period or part of it. For instance, when the Covid student loan pause ended in August 2023, Nelnet advised borrowers that interest would accrue in the month of September (which was considered a month of administrative forbearance). Payments began to be due again in October. Though rare, this kind of scenario of interest accrual during forbearance could mean you owe more money.

•   In certain situations, there is no impact on loan forgiveness programs. That is, time spent in administrative forbearance may not count toward loan forgiveness. This is the case with income-driven repayment (IDR) and Public Service Loan Forgiveness (PSLF) during the SAVE plan’s pause (more on that below). In this situation, the time it takes to qualify for forgiveness could be extended. 

Recommended: Understanding Capitalized Interest on Student Loans

Applying for Forbearance

When a loan servicer grants administrative forbearance, it’s usually an automatic process. This means that if you’re eligible, your servicer will notify you of the forbearance, and your loan payments will be paused without your needing to do anything.

However, if you want to qualify for general or mandatory forbearance, you’ll usually need to contact your loan servicer and submit a request.

Required Documentation

To apply for general or mandatory forbearance, you’ll need to provide specific documentation. This can include proof of income, employment status, or financial hardship. In some cases, your loan servicer may request additional information. 

Notification and Approval Timeline

Once you’ve submitted your request for forbearance, your loan servicer will review your application and notify you of their decision, typically within seven to 10 days. If approved, you’ll receive information on the start date of your forbearance period.

It’s important to continue making payments until you receive a notification of forbearance approval with a start date. Failure to do so may result in loan default, which can impact your credit.

Duration and Renewal Process

Forbearance periods usually last up to 12 months at a time. If you need to pause your payments after the initial forbearance period ends, you can apply to extend forbearance. Make sure to contact your loan servicer before your current forbearance period expires to discuss your options and submit any necessary paperwork for renewal.

Alternatives to Forbearance

If student loan forbearance isn’t an option, there are a few other ways to ease the burden of your student loan debt if you’re facing financial challenges.

Income-Driven Repayment Plans

With an income-driven repayment plan, your student loan payments are tailored to your income and family size. In some cases, you might pay as little as $0 per month. Your monthly payments are usually calculated based on a percentage of your income.

To qualify, you must submit an application. Then every year after approval, you’ll need to update your income and family size, a process known as recertifying your IDR plan. Once your IDR plan term ends, usually after 20 to 25 years, any remaining student loan balance is typically forgiven. 

The DOE offers one active plan and one that is paused due to legal review:

•   Income-Based Repayment (IBR) Plan: Depending on when you borrowed your loan, this plan requires borrowers to pay between 10% and 15% of their discretionary income, with loan terms usually lasting 20 to 25 years.

•   Saving on a Valuable Education (SAVE) Plan (formerly REPAYE Plan): The SAVE plan was designed to set payments at 5% of income for undergraduate-only borrowers and between 5% and 10% for those with any graduate loans. Loan forgiveness was intended to kick in after 20 years for undergraduate loans and 25 years for graduate or professional loans. However, at this time, the plan has been paused while the Supreme Court considers lawsuits regarding the program. 

Deferment Options

Lenders automatically defer student loans while you’re enrolled in school and for six months after graduation. You may also request deferral for the reasons below. (A couple of points to keep in mind: Interest will likely accrue during a deferment period, and you may not make progress toward forgiveness while in deferment.)

Here are other types of deferment vs. forbearance you may qualify for:

•   Cancer treatment deferment

•   Economic hardship deferment

•   Graduate fellowship deferment

•   Military service and post-active duty student deferment

•   Parent PLUS borrower deferment

•   Rehabilitation training deferment

•   Unemployment deferment

Loan Consolidation or Refinancing

If you’re dealing with multiple federal student loans, you can combine them into a single Federal Direct Consolidation Loan. Just keep in mind, this typically won’t lower your interest rate — the new rate is a weighted average of your current rates, rounded up a bit.

Another option is to consider refinancing student loans, which might include federal and private student loans. This means you take out a new private loan to pay off all your existing student loans, rolling them into one payment. 

You can use a student loan refinance calculator to evaluate how this might help you save. You could potentially get a lower interest rate or a longer repayment period, making your payments more manageable. An important heads-up, however: If you choose to refinance your federal loans, you’ll lose access to federal benefits and protections. Also, if you extend your loan term, you may pay more interest over the life of the loan, increasing your overall borrowing costs.

The Takeaway

Administrative forbearance on student loans is an automatic pause that loan servicers place on your payments for various reasons, like if they made a mistake with your billing or a natural disaster has occurred. They might or might not stop interest accrual during this time. If you’re having trouble managing your student debt, you might want to consider student loan deferment, income-driven repayment, or refinancing to better manage your payments. 

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

Does administrative forbearance affect credit scores?

Your credit score usually won’t be affected when your loan is in administrative forbearance as long as you follow the agreement’s terms.

Can administrative forbearance be applied retroactively?

Yes, loan servicers can retroactively apply administrative forbearance to federal student loans. This can help cover past due amounts before you start a new repayment plan. It’s also useful if there are administrative or technical issues, like receiving incorrect or late billing statements, that prevent you from making payments.

What happens after administrative forbearance ends?

Once administrative forbearance ends, your payments will usually resume, and interest will begin to accrue again if it had been paused. It’s important to be prepared for these payments to ensure you stay on track with your loan repayment schedule as stated in your loan agreement. 

Photo credit: iStock/PeopleImages

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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