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After all the work that goes into applying to college — researching schools, submitting transcripts, taking entrance exams, and writing essays — students probably welcome a feeling of relief once that application is officially submitted.

The relief may be instant, but also fleeting. The next phase of getting into college can be painstaking because it’s the waiting phase. Acceptance letters don’t have one standard date for being sent out. Admissions decisions can be delivered as early as December for early action or early decision applicants and as late as April for regular admission applicants.

Learn more on different types of college admissions applications and see how their submission deadlines and acceptance date periods differ.

Types of Applications

Just as there isn’t a standard date for acceptance letters to be sent out, there isn’t one standard submission date for applications, either. There are a few early submission options available, as well as regular submission and rolling admissions. The due date of the application will depend on which type of application is being submitted, and this will also determine when you receive the school’s decision.

Options for applying early include early decision, early action, and single-choice early action.

Early Decision

The early decision application is binding, meaning that students who are accepted are committed to enrolling. Because this application is binding, students can only apply to one school as an early decision. These applications are due in November and the decisions go out in December. If students decide to apply with this early decision option, this school should be their top choice and the one they’d prefer to go to over all others.

Early Action

The early action application is similar to the early decision in regard to the due date (due in November) and decision timeframe (decisions go out in December), but it differs in that it isn’t binding. It’s okay to apply to multiple schools via early action, and if you’re accepted you’re not required to enroll until the normal reply date of May 1.

Recommended: Early Action vs Early Decision

Single Choice Early Action

This option is similar to the early decision in that students can only apply to one school this way, but it’s not binding. If students choose to apply to a school via single-choice early action, it’s a way of saying they’re especially interested in attending that school. The deadline and acceptance period is the same as the other early options.

When it comes to applying early, no matter which type of early application you choose, the applications will usually be due in November and decisions will be sent out in December.

Regular Decision

Regular decision college applications are the most common of the application options. For these applications, the deadline is usually in January or February and the decision letters go out by April. The deadline for submitting your application will differ between schools, so make sure to check the website for each school and mark the dates on a calendar.

Recommended: Ultimate College Application Checklist

Rolling Admission

Rolling admission allows students to apply until the school runs out of space. Applications may be accepted until April or later. Students are encouraged to apply using the same deadline as the regular decision, though, to have a better chance of being accepted before the colleges run out of spaces.

Some colleges will also have differing numbers of spots open based on specific majors. If the major the student lists on an application is impacted at some schools, it might be better to apply by the deadline for regular applications since impacted majors are likely to have more students apply than there are spots available. The average turnaround for rolling admission is about four to six weeks, so the date that decisions are sent out will depend on when students submit their application.

Recommended: College Search – College Finder Tool

The Dreaded Waitlist

After waiting for one to two months to receive a school’s decision, it can be frustrating to open that letter or email and see that there’s more waiting to do. Being on the school’s waitlist isn’t necessarily bad, however.

There are many reasons that students end up on the waitlist. They may have met the academic criteria to get into the school, but the school might not have space yet for these students.

Most schools will require students to contact them and accept their spot on the waitlist to be considered for admission, so don’t forget that step.

Since the number of students that can be accepted from a waitlist depends on the number of students who choose to enroll, students on the waitlist won’t hear back until after decision day.

Decision day is May 1, and it’s the day that seniors are required to notify their school that they accept their admission and will enroll.

After the decision day, the schools will know how many students will enroll, and then they’ll be able to start accepting students from the waitlist if there’s space. This means students on the waitlist can expect to hear back from their school by the end of May, but sometimes it can take up until the fall semester starts to hear back.

Paying for College

Planning for college goes beyond getting accepted. Once accepted, students have to figure out how to pay for college, including tuition, books, and housing. Luckily, there are many good options for financing higher education, which can include financial aid from the government (grants and/or loans), scholarships, and private loans.

Recommended: Ca$h Course: A Student’s Guide to Money

Financial Aid

The Free Application for Federal Student Aid (FAFSA®) is the form students will need to complete as the first step in applying for student aid. Depending on a student’s Student Aid Index (SAI), they may be eligible for federal student loans, grants, or work-study.

Grants don’t usually have to be repaid, but loans do. The amount of aid students can receive from the federal government will depend on their financial need, so not everyone will be eligible.

Recommended: What Is the Student Aid Index?

Federal Student Loans

Federal student loans come with some benefits that are not guaranteed by private student loans, like lower fixed interest rates and flexible repayment options. Federal loans also offer borrower protections, such as deferment and forbearance, and student loan forgiveness programs for those that qualify.

Scholarships

Scholarships can be merit-based, meaning they’re awarded based on some kind of achievement, or need-based. There are many scholarships available, and it’s perfectly acceptable to apply to as many as possible to further the chances of receiving one — or more. Some scholarships are specific to a school or the local community, so check your school’s website for information.

Private Student Loans

Private student loans may be another option for paying for college. Since every financial institution is different, do some research and explore options available. Loan amounts and rates will depend on an applicant’s financial situation, including their credit history and income. Those with little of either may need a cosigner to be approved for a private loan.

Even if the cost of attendance might be covered by scholarships, grants, or federal student loans, there may be other costs of living a student might need assistance for. That’s where private student loans can be helpful when considered responsibly.To learn more about private student loans, college-bound students might want to check out this guide to private student loans.

Keep in mind, though, that private student loans do not offer the same protections as federal student loans, so it’s best to explore federal loans before relying on private ones.

The Takeaway

It can take a few weeks to a few months to hear back for a college admissions decision, depending on the type of application you submitted. Early applicants — such as early decision or early action — will generally hear back in December while regular decision applicants will receive their admission decision in April.

Taking some time to think about college costs and how to pay for the upcoming years of education can be a wise way to spend that time waiting for all of those acceptance letters to come rolling in. Options for paying for college include cash savings, grants and scholarships, federal student loans, 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 long does it take to hear back after applying to college?

It usually takes four to six weeks to hear back after applying to college, depending on the school’s admissions process and the type of application. Early decision applicants may receive a response in November or December, while regular decision applicants typically hear back between March and April.

What’s the difference between early decision and early action?

Early decision is a binding agreement where, if accepted, you must attend the college, while early action is non-binding, allowing you to apply to multiple schools and decide later.

Do colleges send rejection letters?

Yes, colleges send rejection letters to applicants who are not accepted. These letters are typically sent around the same time as acceptance letters, either by mail or email, depending on the school’s process.

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 .

SOISL-Q324-042

PT school costs in the U.S. can range between $9,000 and $35,000 per year, depending on whether you live in the same state as the program you attend.

And when it comes to how to pay for PT school, there are several funding options for prospective students — from grants and scholarships to federal financial aid, work study programs, private student loans, and more.

Keep reading to find out how much PT school costs and how to pay for physical therapy school.

Cost of Physical Therapy School

The cost of physical therapy school can vary vastly depending on the program you attend and your location.

With that said, the average tuition and fees for PT programs in the U.S are $9,832 for in-state residents and $35,258 for out-of-state students for the academic year 2023-2024.

7 Ways to Pay for Physical Therapy School

Now that you have an idea of how much PT school might cost, your next priority is likely figuring out how to pay for PT school once you’ve been accepted.

Below are seven different options you can look into to help cover the costs of attending PT school.

1. Grants

Physical therapists are in high demand, and there’s been a corresponding increase in the number of grants available to students who are pursuing a career in PT.

Grant funding that helps students with PT school costs is sponsored by a variety of sources, from the federal government to public and private colleges and universities, professional organizations, and corporations.

It’s wise to kick off your search for grant funding with federally-backed programs that target PT majors. If you’re enrolled in a PT program from an accredited college or university, you may be eligible for the following federal grants.

Recommended: Grants for College

The Federal Pell Grant

The Federal Pell Grant is available to undergraduate students with demonstrated financial need. The amount of awarded funding maxes out at $7,395 for the 2023-24 school year. The amount awarded can change yearly and is based on the student’s level of financial need, attendance status (full time or part time), and the cost of the program itself.

The Federal Supplemental Educational Opportunity Grant

The Federal Supplemental Educational Opportunity Grant (FSEOG) is available to eligible undergraduate students who have already qualified for a Pell Grant, still demonstrate financial need, and are enrolled in a participating college or university.

To apply for an FSEOG, you can work with your college’s financial aid office and learn if you’re eligible to receive anywhere from $100 – $4,000.

U.S. Department of Health and Human Services Aid

The U.S Department of Health and Human Services offers a variety of financial aid opportunities that are designed to assist students entering into the healthcare profession. One example is the HRSA Scholarship for Disadvantaged Students, which is a campus-based grant program that provides financial assistance to students from disadvantaged backgrounds. Eligible recipients must be pursuing a degree in an approved healthcare field (PT being one of them) and the college or university the student is attending determines the eligibility and award amount.

Colleges and Universities

There are several campus-based grants and payment programs available to PT students to help cover PT school costs. Once you’ve whittled down a list of preferred PT programs, you can search for these grants and scholarships on the schools’ websites or speak to someone in their financial aid departments to get started.

Private Organizations

Private and professional organizations can be solid sources for grants, scholarships, and fellowships that help aspiring physical therapists with how to pay for PT school.

In many cases, the funding is extended on a regional basis, so searching for state or local organizations is a great way to seek financial aid that’s relevant to PT in your particular area.

The American Physical Therapy Association (APTA) sponsors several grants and scholarships for PT students, including the Outstanding PT Student and PTA Student Awards or Orthopedic Section Outstanding PT/PTA Student Award, among others.

An example includes the Foundation for Physical Therapy (FTP), which administers research grants for graduate level PT students in a variety of rehabilitation techniques, including pediatric and geriatric physical therapy. In addition, the FTP offers $5,000 in award funds from their Florence P. Kendall Doctoral Scholarship for high performing PTs and PT assistants pursuing doctoral studies at an accredited college or university.

2. Scholarships

When considering how to pay for physical therapy school with a scholarship, consider searching scholarship databases for “physical therapy” scholarships. Websites such as CollegeScholarships, Scholarships 360 or Scholarships.com all offer comprehensive lists of scholarships available specifically to students studying physical therapy.

In addition to course of study, factor in other talents or qualities that may help you qualify for a scholarship, such as where you grew up, your ethnicity, or gender.

Review the scholarships available at your specific school, as well.

Recommended: Find Financial Aid Options for All 50 States

3. Federal Student Loans

To help physical therapy students offset their PT school costs, federal student loans are another prime way to secure financial aid.

Federal financial aid for physical therapy students can come in the form of various federal student loans. They cover the cost of attendance, living expenses, fees, and more to help you pay for your physical therapy education.

On top of that, federal student loans offer specific perks and protections such as:

•   Deferment

•   Forbearance

•   Student Loan Forgiveness options

•   A six-month grace period for new grads

Most federal student loans (aside from PLUS loans), don’t require a credit check, so borrowers won’t need to add a cosigner to the loan. Undergraduate students may also qualify for Direct Subsidized Loans, which are awarded based on financial need. Students are not responsible for paying the interest that accrues on subsidized loans while they are actively enrolled or during qualifying periods of deferment, such as the grace period.

4. Private Student Loans

Private student loans can be obtained from private lenders like banks, credit unions, or other financial institutions and can help bridge the gap when federal student loans aren’t enough to pay for physical therapy school. That said, it may be tricky for physical therapy students to qualify for private student loans without a cosigner, especially if they have a lower credit score or no credit at all.

In some cases, aspiring PT students may need to ask someone to cosign for a private student loan to help them obtain a lower interest rate and more favorable loan terms.

While private student loan borrowers aren’t afforded the same perks and protections as they are with federal student loans, there are still benefits to using private student loans to pay for PT school.

Here’s a guide to private student loans that can help you learn more about the available options.

5. Part-Time Work

Whether it’s a side hustle or a sanctioned work-study program, there are other ways to pay for PT school that don’t involve a loan, grant or scholarship.

On Campus

An on-campus work-study program is typically offered by the college or university where a student is attending PT school.

In the case of the Federal Work-Study Program , students are eligible for part-time employment while enrolled in PT school if their college is a participating member of the program and the student meets the program’s eligibility requirements. Checking with the school’s financial aid office is the best way to determine whether or not they offer a Federal Work-Study Program.

Off Campus

The Federal Work-Study Program also offers off-campus employment for a private nonprofit organization or a public agency, typically for work that’s performed in the public interest.

That said, finding your own job on or off campus (that’s not tied to federal aid) is also a possibility. Whether it’s a part-time job at a local cafe, waiting tables at a restaurant, or becoming a nanny for a nearby family — there are other options for figuring out how to pay for physical therapy school.

6. FAFSA

If you’re thinking about using federal student aid to pay for PT school, the first step is filling out the Free Application for Federal Student Aid (FAFSA®).

The FAFSA is a free form that’s completed by current and prospective PT students to determine their eligibility for federal financial aid, including loans, scholarships, and the programs mentioned above.

Take a look at this FAFSA guide for more information about what the FAFSA is, which types of financial aid you may be eligible for, the criteria that can be expected in order to receive funds, and important dates to know.

7. PSLF

Public Student Loan Forgiveness (PSLF) is a federally-backed program that forgives the remaining balance on a borrower’s Direct Loans after:

• They’ve made 120 qualifying monthly payments
• Under a qualifying repayment plan
• While working full-time for a qualifying employer

The requirements for receiving PSLF are strict, so if you are pursuing this option be sure to read all the program instructions and paperwork closely.

When deciding how to pay for PT school, this is one reason many prospective students turn first to federal financial aid.

It’s Student Loan Forgiveness programs like these that are among the many perks and protections of federal student loans that can’t be accessed through private student loans.

How Much Can Physical Therapists Make?

While PT school costs can seem a bit steep, the compensation for recent PT grads can potentially justify the price tag for today’s typical physical therapy program.

In 2023, physical therapists made a median salary of $99,710, with the top 10% bringing in more than $130,000 and the lowest 10% earning $72,260.

The Takeaway

When it comes to how to pay for physical therapy school, there are several ways aspiring students can receive financial aid — including grants, scholarships, work study programs, federal student loans through FAFSA 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

What is the average student debt for a physical therapist after graduating?

Physical therapists graduate with an average total student debt amount of just over $142,000, with roughly 80% of that being specifically from physical therapy school.

How much can PTs expect to make after graduating?

An entry-level physical therapist salary can range from $58,000 to $94,000 or higher per year and the median salary among all physical therapists was $99,710 in 2023.

Will the military pay for physical therapy school?

Each branch of the U.S. Armed Forces has different programs and requirements for receiving financial assistance for physical therapy school. Visiting their individual websites is the best way to determine eligibility.

Photo credit: iStock/marinesea

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 .

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.

SOISL-Q324-047

The question of how student loan forgiveness would be funded doesn’t have a clear-cut answer, and ideas about how it would be paid for can be heavily influenced by a person’s political leanings. One recent survey found that the majority of Democrats support canceling some or all student debt, while most Republicans oppose any cancelation. Read on to learn more about this important issue.

Who Pays for Student Loan Forgiveness?

There’s no easy answer in terms of how plans to cut student debt would be funded. Government finance is complex. Typically, the federal government would need to foot the bill for student loan forgiveness, and the government would have two options to pay for it: cut spending or raise taxes. Making the situation more complicated is the fact that forgiven loans may have already earned a profit, which could make reconciling the impact of writing off this debt even harder.

In addition, viewpoints on student loan debt are often divided by political affiliation. Democrats are more likely to support debt cancellation and hold the government and lenders responsible for the high levels of student debt. Republicans, on the other hand, usually are against the idea of student loan forgiveness and often feel the borrowers themselves should shoulder some of the blame for the situation.

Spending Cuts and/or Higher Taxes

If some or all student loans were to be forgiven, here’s a closer look at some potential paths:

•  Cutting spending, which can be challenging. Some financial and legal experts worry that cuts would wind up hurting education resources, such as universal pre-K and higher education initiatives. These could be trimmed to save money.

•  Raising taxes, which could involve increasing individual income tax rates or reducing tax deductions, such as mortgage interest, charitable contributions, medical expenses, IRA contributions, and more. The government could also opt to raise taxes on corporations and the wealthy.

•  A combination plan of the two methods: some tax cuts along with some tax hikes.

Neither Is Necessary

Another point of view to consider: Some pundits say that the cancellation of federal student loan debt won’t cost the government anything. They point to the fact that student loans were paid for by taxpayers when the funds were first disbursed.

They also hold that, over time, payments by borrowers of student loans to the Department of Education have almost been equal to the amount of money loaned out. In that way, they see the situation of forgiving loans as being close to break-even. One review found that the government collected about $85 billion a year in payments on about $95 billion a year in loans paid out. In terms of government spending, they believe forgiveness would not result in a major shortfall.

Proponents of this theory also say that records reveal that the Department of Education has been profiting on student loans over the years, and that gain can also be seen as an asset against which canceled federal loans can be compared.

Obviously, this is a complex issue with many different viewpoints regarding the best path forward.

💡 Quick tip: Some student loan refinance lenders offer no fees, saving borrowers money.

The Current State of Student Loan Forgiveness

It can be helpful to keep in mind the recent events surrounding student loan forgiveness.

•  The Biden administration announced a $441 billion federal student loan debt relief program for borrowers who earned less than $125,000 ($250,000 for married couples) in 2022. This was blocked by the Supreme Court in 2023.

In the wake of this decision, the Biden administration proposed new initiatives in April 2024 to forgive $7.4 billion in student debt, including waiving:

•  Accrued and capitalized interest for certain borrowers

•  Debt for those eligible for the Saving on a Valuable Education (SAVE) Plan, in the event of a closed school discharge, and other forgiveness programs

•  Student loan debt for those who entered loan repayment 20 years ago

•  Debt for those who enrolled in programs or institutions that provided low financial value

•  Debt for those who experience repayment hardship

In May, the U.S. Department of Education announced cancellation of $7.7 billion for certain borrowers under Public Service Loan Forgiveness Program (PSLF) and through the SAVE Plan, which offers borrowers a shortened forgiveness period. However, court orders recently halted the SAVE program after several states sued.

Where Does All the Canceled Debt Go?

It’s hard to say where all the canceled student debt would go, and it’s also difficult to forecast how much forgiving debt would cost the government, if anything. The government would at least have to adjust its revenue projections, even when the original principal has been paid off with interest.

One important note: Canceled student debt can have a positive impact on borrowers. It gives them more disposable income, which they can use in ways that stimulate the economy, from buying more consumer goods to taking out more mortgages.

Will My Taxes Increase if Student Loans Are Forgiven?

Many believe that federal student loan forgiveness, as planned, could transfer debt from borrowers who took out student loans to taxpayers, according to the U.S. House Budget Committee. This is a viewpoint that tends to be held by Republicans who are opposed to forgiveness for various reasons.

The Budget Committee has stated that approximately 87% of adults without student loans will wind up paying for the 13% of borrowers who borrowed for college and 56% of the student loan debt for graduate degree borrowers.

Currently, some estimates say that $1 trillion in federal student loan cancellation would mean an additional $2,500 tax bill for most Americans.

Another angle to consider: If borrowers’ debt is forgiven, it could be taxable. Borrowers would receive IRS Form 1099-C in this instance, and might need advice from a professional tax preparer.

Recommended: Guide to Student Loan Forgiveness

Will Private Student Loans Be Forgiven?

The Biden administration’s student loan forgiveness plans would not cancel private student loans, which come from private companies, including online banks. The forgiveness plans only apply to those with federal student loans, or loans that come from the U.S. Department of Education.

Unlike federal student loans, which borrowers apply for using the Free Application for Federal Student Aid (FAFSA), you can apply directly to the lender for a private loan. Unlike in the case of federal loans, you may need to undergo a credit check and may encounter less flexible repayment plans with private student loans.

However, private loan lenders may offer some benefits that are similar to those of federal student loans, including deferment (when borrowers can temporarily stop making payments and interest may not accrue), forbearance (when borrowers can temporarily stop making payments or make smaller payments and where interest does accrue), or unemployment protection.

It’s wise to check carefully with your lender to find out their exact policies.

Alternative Options for Paying Off Student Loans

Since the future of forgiveness is largely uncertain, borrowers can consider other ways to pay off student loan debt. They can take advantage of several alternative options, including putting extra toward principal, considering other repayment plans, making lump sum payments, and additional methods.

Here are several possible options:

•  Put extra toward the principal: Putting extra cash toward your principal student loan can result in a faster payoff than by simply making your usual monthly payment. Putting an extra $100 toward your principal every month, for example, can make a difference. You will typically not pay prepayment penalties on private or federal loans, which is a charge that penalizes you from paying off your student loans early.

•  Make lump-sum payments: If you have a lump sum, like a tax refund, a bonus, or other windfall money, you can put that toward your debt instead of spending it. If you can find extra money regularly (such as a couple of times a year), that could help you pay off your student loans. A side hustle can also help you make lump-sum payments as well.

You might also consider using the debt snowball method of taking care of your loans, which means you put money toward your smallest loan balance, then progress to larger loan balances after that.

•  Check with your employer: Your employer may offer a student loan repayment benefit. Learn whether your employer will help pay for qualified educational expenses, including your student loan balance.

•  Budget your money: Living on a budget is a great way to ensure you make on-time student loan payments. Though you’re shielded from penalties on late payments through September 2024 through an on-ramp period, it’s still good practice to avoid late payments so you don’t risk default later.

•  Refinance or consolidate student loans: Refinancing means changing one or more loans to private student loans with a new interest rate, term, and monthly payment. Securing a lower interest rate means you’ll pay less interest over time. However, it’s important to be aware that refinancing federal student loans in this way means you will forfeit the right to certain benefits and protections, such as deferment. Also, if you refinance for a longer term, you may well pay more interest over the life of the loan.

•  Consolidating federal student loans: This means pooling one or more federal student loans into a Direct Consolidation Loan with one monthly payment with one interest rate. You may save money over time when you consolidate, but check to be sure.

•  Repayment plans: Several repayment plan options exist for both federal and private student loans. For example, with federal loans, you may look into several income-driven repayment plans, such as the SAVE, Pay As You Earn (PAYE), income-based repayment (IBR), and Income-Contingent Repayment (ICR) plans as repayment options. Check with your loan servicer to determine which makes sense for you, whether you have a mix of federal and private loans or just federal loans.

Recommended: Are Student Loans Forgiven After 20 Years?

The Takeaway

There are different opinions about how federal student loan forgiveness will be paid for, if and when it’s enacted. Viewpoints often align with a person’s political beliefs, with Democrats tending to favor loan cancelation and Republicans being against it.

Regardless of the future of student loan forgiveness, there may still be options to help you manage your student debt, such as budgeting, considering alternate repayment plans, or refinancing.

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 will student loan forgiveness be funded?

Some experts claim that the government would need to cut spending or raise taxes to fund student loan forgiveness.

What impact will student loan forgiveness have on borrowers?

Pending legal blocks, borrowers could see some of their student loans disappear, providing relief for millions of borrowers. It’s also important to understand that student loan forgiveness may be subject to tax. You’d receive Form 1099-C to document it; consider checking with a tax professional to learn more about how tax applies in your situation.

What are the potential drawbacks of student loan forgiveness?

In addition to the potential for taxpayers to shoulder the debt, other downsides of debt forgiveness might include the forgiven amount being taxed, cuts to government educational spending, and overspending and increased debt for students who find themselves with more disposable income.

Photo credit: iStock/Drazen Zigic

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.

SOSL-Q224-1940128-V1

Federal student loans come from the government and offer perks like fixed interest rates and income-driven repayment plans, all set by law. Personal loans are issued by banks and other financial institutions with terms set by the lender, typically making them more expensive.

When it comes to paying for college, starting with federal loans is usually the most cost-effective option. However, if your federal loans aren’t enough, you still have options, from private student loans to scholarships and grants. While personal loans are a great resource for many large purchases, college tuition is not one of them.

Read on to understand the key differences between federal student loans and personal loans, including how they work and the purposes they’re best suited for.

What Are Student Loans?

A federal student loan is government-provided financial aid that covers educational expenses and requires repayment with interest. To apply, you must complete the FAFSA annually to assess your financial need. There is no credit check required for federal student loans.

Some federal student loans provide flexible repayment options, such as income-driven repayment plans that adjust payments according to post-college earnings, and forgiveness programs tied to specific occupations. Borrowers are free to modify their repayment plan after obtaining the loan.

There are several different federal student loan options, including:

•   Federal Direct Subsidized Loans: These loans are for undergraduates in need of financial assistance. The amount depends on college costs and family income, as determined by the FAFSA. The government usually covers interest while you’re in school.

•   Federal Direct Unsubsidized Loans: These are for undergraduates and graduate students. The amount you receive is determined by the cost of attending your school and not your financial need. Interest starts accruing immediately, and you can choose to pay it while in school or add it to your total repayment.

•   Parent PLUS Loans (Direct Parent Loans for Undergraduate Students): Allow parents to borrow on behalf of their undergraduate children. You must complete a separate application from other federal loans to qualify for these.

•   Grad PLUS Loans: Allow graduate and professional students to borrow money for education expenses.

What Are Personal Loans?

Personal loans are offered by banks and other individual lenders and can be used for just about anything. Common purposes include consolidating high-interest debt, home improvement, moving, family planning (think IVF or adoption costs), and major car repairs. Generally, a personal loan cannot be used for a down payment on a home, business expenses, investing, or college expenses. That’s right: Most lenders don’t allow borrowers to use personal loans to pay tuition and fees, or to pay down student loans. If you need funding for college outside of federal loans, it’s best to look into private student loans.

Personal loan lenders may offer variable or fixed interest rates, along with repayment periods typically ranging from one to seven years. To qualify for a personal loan, lenders review your financial history and credit score. It’s important to note that each lender has different terms and conditions, so it’s essential to understand the annual percentage rate (APR) and repayment terms before committing to a specific offer.

Student Loans vs Personal Loans: Key Differences

Purpose aside, here’s a breakdown of the key differences between student loans and personal loans.

Interest Rates

In general, federal student loans have fixed interest rates, meaning your rate remains the same throughout the entire loan term. For example, the average rate for Direct Subsidized and Unsubsidized Loans for undergraduates for the 2024-25 school year is 6.53%.

On the other hand, personal loans can have variable or fixed rates, and are often higher than federal student loan rates. Depending on the borrower’s creditworthiness, repayment term, principal amount, and the lender, personal loan rates vary widely, ranging from 7% to 36%.

Loan Forgiveness

With federal student loans, you may qualify for additional benefits, such as Public Service Loan Forgiveness (PSLF) and Teacher Loan Forgiveness (TLF). These programs can forgive your loan balance after a specific period or upon meeting certain criteria.

Personal loans, however, do not offer any loan forgiveness programs. Nonetheless, lenders may provide options to prevent default if you encounter difficulty making payments due to hardship.

Repayment Terms

Federal student loans provide several repayment plans ranging from 10 to 25 years, including options that allow you to lower your payments based on your income. Repayment can also be deferred while you’re enrolled at least half-time and immediately after graduation.

Personal loan lenders also offer different repayment terms, typically between five and 20 years, giving you the power to choose what works best for you.

Credit Requirements

Federal student loans are part of an overall financial aid package offered to students. To apply for these loans, you’ll need to fill out the FAFSA each year, typically between October and July. Federal loan approval is often based on financial need, and no credit check is required.

When applying for a personal loan, you’ll complete an application and undergo a credit check. Each lender sets its own criteria for approval, often requiring a credit score of at least 670. If you don’t meet the credit requirements independently, many private lenders allow you to apply with a cosigner. Having a cosigner with a strong credit history can improve your chances of approval.

Deferment and Forbearance Options

If you’re dealing with a short-term financial challenge, you might qualify for a deferment or forbearance on your federal student loans. During deferment, you can pause your payments temporarily. It’s important to note that subsidized loans won’t accrue interest, but unsubsidized loans will. This means any unpaid interest adds to your loan balance, increasing your debt. For forbearance, if you can’t make payments, interest continues to build on your loan balance.

Personal loans may also offer deferment and forbearance options, but each lender has different rules. Before taking out a personal loan, it’s important to understand these options in case you face financial difficulties.

When to Choose Student Loans

It’s a trick question to compare personal loans vs student loans for college expenses, since student loans are the only option. But even if personal loans were an alternative for college expenses, federal student loans make more sense due to their typically lower interest rate and additional borrower protections.

Those protections include income-driven repayment plans, loan forgiveness programs, and deferral and forbearance options, which can be really helpful if you hit a rough patch financially.

When to Choose Personal Loans

Personal loans are a good option if you have a major purchase coming up and want to avoid putting it on a high-interest credit card. Just be sure to compare personal loan options carefully to avoid piling up debt. To find the right loan and repayment choice, look for the one with the lowest overall cost by considering the loan amount, interest rate, term, and fees.

The Takeaway

When deciding between federal student loans vs. personal loans for funding college, personal loans are simply off the table due to lender restrictions. This shouldn’t pose a problem, though, because federal student loans offer a better deal for college students anyway, with fixed interest rates, income-based repayment plans, and forgiveness options. In the event that federal student loans don’t cover your total cost of attendance, consider a private student loan to bridge the gap.

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

Can I use both student and personal loans?

Most lenders don’t allow personal loans to be used for college expenses. However, if federal student loans don’t cover your full cost of attendance, you can apply for a private student loan to bridge the gap.

Do personal loans have borrowing limits for college?

Trick question! Personal loans can be used for just about anything, from home improvement to moving costs. However, there are a few exclusions, and college costs are one of them. Fortunately, private student loans exist for just that purpose, with borrowing limits up to your cost of attendance.

Are personal loan interest rates higher than student loans?

Personal loan interest rates are usually higher than federal student loan rates and private student loan rates.

Photo credit: iStock/Drazen Zigic

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 .

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Student loans are a type of financial aid option that lets you borrow a lump sum of money upfront that you’ll repay over time later, with interest. Some students are unclear whether a student loan is a secured or unsecured debt.

Both federal and private student loans are considered unsecured debt. Keep reading to learn more on secured loans versus unsecured loans, pros and cons of each, and why student loans are considered an unsecured form of debt.

What Are Secured Loans?

A secured loan is a type of debt that requires borrowers to provide the lender with an asset of value to back the loan. This asset is called collateral. Collateral could be your home, your car, other property that has monetary value, a savings account, jewelry, and more. The type of collateral you put up is stated in the loan agreement.

If a borrower defaults on their loan and doesn’t pay it back, the lender can take actions to seize possession of the collateral. It then uses the proceeds from the sale of the collateral to recover the unpaid debt.

Common types of secured loans include:

•   Mortgage loans

•   Home equity loans

•   Auto loans

•   Some personal loans

Lenders typically view secured loans as less risky to their bottom line since the promised collateral offers them at least some financial protection. In turn, secured loans might offer lower interest rates compared to unsecured loans.

Certain secured loans are also designed as accessible financing for individuals whose credit doesn’t qualify for an unsecured loan.

What Are Unsecured Loans?

An unsecured loan is an installment loan that doesn’t require an asset or collateral upfront to secure the debt. Since this type of loan doesn’t offer an asset-based guarantee to the lender, the borrower must demonstrate a strong likelihood that they’ll repay the debt.

A positive and extensive credit history, consistent and sufficient income, and low credit utilization are some markers that lenders use to determine how risky a borrower is for an unsecured loan. Additionally, since lenders don’t have access to collateral to fall back on in the event of default, unsecured loans generally have higher interest rates.

Credit cards, some personal loans, and private student loans are considered unsecured loans.

Pros and Cons of Secured vs Unsecured Loans

Secured and unsecured loans have their own advantages and downsides. Furthermore, some benefits are only for certain types of secured or unsecured loans. Before signing a loan agreement, it’s important to understand the pros and cons of each option.

How Federal Loans Differ From Typical Debt

Students often wonder whether federal student loans are secured or unsecured debt. Both federal loans and private education loans are unsecured debt. However, federal loans have significant perks and protections that private student loans don’t offer.

Unlike private student loans that require a minimum credit score or cosigner, most federal student loans don’t require a credit check or a cosigner to qualify for a loan. The Direct PLUS Loan is the only federal loan that requires a credit check, but borrowers with adverse credit can still access a Direct PLUS Loan by completing a few additional steps.

Federal loan rates are fixed, meaning your monthly payment won’t change throughout your repayment term. With federal subsidized Direct Loans, the Department of Education pays for interest that accrues while your loan is in deferment (e.g., while you’re in school). Conversely, other unsecured loans aren’t subsidized and might have variable interest rates that change throughout your repayment period, making it hard to anticipate your budget every month.

You’ll also have access to a range of repayment options, including income-driven repayment (IDR) plans, which are exclusive to federal student loans. Some borrowers qualify for a required payment of $0 per month while enrolled in an IDR plan. Finally, federal student loans are eligible for federal student loan forgiveness programs that cancel a portion of your student debt after meeting minimum program requirements.

Managing Your Student Loan Debt

Getting a handle on your unsecured student loan debt can feel challenging as you balance other areas of your life. Below are a few strategies to help you manage your student loans:

•   Make in-school interest-only payments. If you can afford to, consider paying off the monthly interest that accrues while your loan is on in-school deferment. This applies to both unsubsidized federal loans and private loans. Making these small but meaningful interest payments can help you avoid interest capitalization (i.e., paying interest on interest) later.

•   Track when your loan payments are due. Be aware of your loan due dates and minimum payments each month. Late payments or missing a payment altogether can have a negative effect on your credit score, since loan repayment history is reported to the major credit bureaus.

•   See if you qualify for loan forgiveness or loan repayment assistance. The Department of Education offers a few forgiveness and cancellation programs for eligible borrowers with qualifying loans, like the Public Service Loan Forgiveness program for government and nonprofit employees. Some states also offer loan repayment assistance programs to workers in certain professions, like health care, social work, and law.

•   Reach out to your loan servicer or lender. If you’re struggling to make your student loan payment, your loan servicer or lender is your best resource. They can guide you through relief options that are accessible to you, whether that’s getting on a different repayment plan or temporary forbearance.

The Takeaway

A student loan is unsecured debt. Having to put forward collateral to get a student loan is a roadblock that you fortunately don’t have to worry about.

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

Are student loans considered secured or unsecured?

Student loans are considered unsecured debt, meaning they don’t require collateral from you as a condition of securing the loan. Since there’s no collateral tied to the loan, if you default on the debt, the lender might choose to take you to court in an attempt to collect some or all of the debt.

Is it possible to get a secured student loan?

No. Student loans are a form of unsecured debt. No collateral is required to get a student loan, whether you’re borrowing a federal or private student loan.

How are federal student loans different from private?

Federal student loans are guaranteed and funded by the U.S. Department of Education. They offer exclusive fixed rates, established annual and aggregate loan limits, non-credit-based eligibility criteria, and access to income-based repayment plans and loan forgiveness.

Private student loans are provided by private financial institutions, like banks, credit unions, online lenders, and schools. Private lenders offer fixed or variable loan rates, which differ between lenders. Your eligibility for a private loan involves various factors, like your income and credit history, and repayment terms and plan options vary.

Photo credit: iStock/DNY59

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 .

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

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