SoFi

It’s estimated that close to $100 million in scholarships go unclaimed each year and $2 billion in student grants go unclaimed. Typically, the money is not awarded due to lack of applicants. This is good news for students — as those that are willing to put in the time to search for scholarships and grants should be able to find at least a few to help pay their way through college.

The beauty of scholarships and grants is that you almost never need to pay them back. Who doesn’t love gifts? But acquiring them will take at least a little effort.

Where Do You Find Unclaimed Scholarships?

You don’t have to be a 4.0 student or a star athlete to receive scholarships. In fact, the average high school student is eligible for 50-100 different types of scholarships each year. But, scholarships aren’t just going to come to you. You have to be the one to put in the work to find scholarships you qualify for and apply for them.

One of the best ways to find scholarships you are eligible for is through a scholarship search. Scholarship searches are offered by a variety of companies and allow you to filter the scholarships based on your specific qualifications, including your state, area of study, background, ethnicity, and more. Scholarship searches are one of the quickest ways to find quality scholarships throughout the country.

Other ways to find unclaimed scholarships include asking your specific college or university what they offer, using the library’s recommendation section, reaching out to businesses in your field of study, speaking to your high school counselor, and asking religious organizations if they offer scholarships.

Regardless of which methods you use to find scholarships nobody applies for, the reality is they are out there waiting for students to apply for and claim them.

Recommended: Search Grants and Scholarships by State

Two Types of Aid to Lay Claim To

Financial aid can be need-based or merit-based.

Need-Based Aid

Federal need-based aid is determined by the Student Aid Index, or SAI (formerly called the Expected Family Contribution, or EFC) as calculated by the Free Application for Federal Student Aid (FAFSA®).

The Pell Grant, the Department of Education’s biggest grant program, is geared toward students who demonstrate significant financial need, but the total cost of attendance at a particular college also plays a role. The maximum Pell Grant amount for the 2023-2024 academic year is $7,395.

Any student who could use college financial aid has nothing to lose by filling out the FAFSA. And even if you are not eligible for federal aid, realize that most states and schools use FAFSA information to award nonfederal aid, too.

One way to find nonfederal financial aid is to fill out the CSS Profile, which determines eligibility for institutional awards and grants. The CSS Profile awards billions in nonfederal aid to college students each year and can be a great way to find unclaimed scholarships.

Recommended: How to Complete the FAFSA

Merit Aid

Merit scholarships are not based on financial need and are awarded by colleges, employers, individuals, businesses, nonprofits, states, religious groups, and professional and social organizations to academic or athletic achievers, as most of us are aware, but merit aid also may be determined by community involvement, level of dedication to a field of study, race, gender, teacher recommendations, and other criteria.

So who is the biggest source of “free money?” Colleges, according to a recent College Board Trends in Student Aid Report. The U.S. Department of Education awards $46 billion annually in scholarships, and thanks to competition to attract students, nearly every college and university in the country offers merit-based aid in some form.

To find unclaimed scholarships, you could start by thinking about all the ways you have, well, merit — making lists of opportunities and eligibility criteria, and pursuing only the scholarships you’re best qualified for.

Why Would Any Scholarships Go Unclaimed?

So is it true there are obscure scholarships left unclaimed? There is no database that can give precise answers, but it makes sense that when specific parameters exist around a particular scholarship, fewer students will qualify.

For example, scholarships exist for North Korean refugees who are permanently living in the United States. Applicants must have been born in North Korea or the child of someone born in North Korea.

Let’s say you don’t fit those parameters. Other unusual opportunities include the following:

•   If you dazzle your friends with your ability to make prom outfits using only duct tape, then you could win a $10,000 Stuck at Prom scholarship. Seriously.

•   Or maybe you have the best plan ever to survive the zombie apocalypse. If so, you could apply for the Zombie Apocalypse Scholarship offered by Unigo ($2,000).

•   If you live in the Phoenix area and you’re a tall graduating senior, you could be interviewed and measured for the chance to gain all of $250 through the CATS Tall Club program.

While you may not qualify for any of the above-mentioned scholarships, these are just examples of how many are actually out there. You may be surprised at what you find (and what you do actually qualify for!) when conducting your search.

Keeping an Eye Out for Scholarship Scams

Plenty of scholarship and grant money for college is out there waiting to be claimed. Unfortunately, though, there are also financial aid scams, including scholarships that aren’t legitimate. The Department of Education offers tips to protect yourself, including:

•   Know that you don’t need to pay to find scholarships or any other form of financial aid.

•   Check information about scholarship offers at a public library and/or online.

•   Talk to the financial aid department at your college of choice to verify legitimacy.

Also, before students begin a search, they may want to be aware of “scholarships” that are actually sweepstakes because their information may be sold to third parties.

The Takeaway

Finding unclaimed scholarships and grants is the ideal way to fund college because this money does not need to be repaid. To cover all the expenses of college, however, many students will then need to take out federal and/or private student loans.

Although private student loans do not carry the benefits and protections of federal student loans, they can fill gaps when you’ve considered all of your federal grant and loan options, but your expenses still exceed your means.

SoFi offers private student loans with competitive rates, flexible repayment options, and no fees. Loans do not need to be repaid while in school, and SoFi offers a six month grace period after graduation.

See if you prequalify for a private student loan with SoFi.

---

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs. SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility-criteria for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.

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

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

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.

SOSL0523004

Read more

Typically, it does not cost the borrower money to refinance student loans. Most lenders do not charge origination fees or application fees. However, you can end up paying fees if you don’t make your payments on time.

In the right circumstances, refinancing your student loans can help you save both time and money as you work to pay down your student debt, without costing you any money to do so.

Student Loan Refinancing Recap

Student loan refinancing is the process of paying off one or more existing student loans with one new one through a private lender. You can typically refinance both federal and private student loans, and depending on the terms of your current loans and your creditworthiness, you may be able to get a lower interest rate or lower monthly payment.

This process is different from federal student loan consolidation, which involves combining several eligible federal loans into one new loan with a federal loan servicer. While that process can simplify your repayment plan and help you maintain federal loan protections, it typically doesn’t help you save money.

Every situation is different, but with the right refinance loan, you could save hundreds or even thousands of dollars as you pay down your student debt.

That said, there are both benefits and drawbacks to consider before you pull the trigger.

Pros of Student Loan Refinancing

Can Save You Money

If you qualify for a lower interest rate than what you’re currently paying, refinancing your student loans could save you money on interest over the life of the loan. Keep in mind that this includes keeping the loan term the same. If you extend your loan term, you could end up paying more in interest, even with a lower rate.

If you don’t qualify for a lower rate on your own, you may be able to add a cosigner with solid creditworthiness to help improve your chances.

Can Give You More Flexibility

Student loan refinance lenders typically offer a range of repayment terms, allowing you to shorten or lengthen the amount of time you have to pay off your debt.

Simplifies Your Repayment Plan

If you have multiple student loans across more than one servicer or lender, refinancing them all into one new loan can make repayment a little easier.

Cons of Student Loan Refinancing

You’ll Lose Federal Benefits and Protections

If you have federal student loans, refinancing with a private lender will cause you to lose certain benefits and protections, such as access to income-driven repayment plans, federal loan forgiveness programs, and more.

It May Not Save You Money

If your current interest rates are already low, it may be tough to qualify for something even lower. Also, applying for a longer repayment period than what you already have could end up costing you more in interest over the life of the loan.

You May Get Less Help When You’re Struggling

Federal student loans allow you to apply for student loan deferment or forbearance if you’re struggling to make your payments. When you refinance with a private lender, you may not get these same benefits.

Deferment and forbearance options can vary by private lenders. With SoFi, for instance, you may qualify for a deferment if you return to graduate school on a half-time or full-time basis, undergo disability rehabilitation, or serve on active duty in the military.

How Much Does It Cost to Refinance Student Loans?

Refinancing student loans with a private lender typically does not come with any costs to the borrower. Most companies do not charge any fees associated with student loan refinancing. If you are being charged fees (see below), you may want to look elsewhere for your refinance.

Common Fees When Refinancing Your Student Loans

If a lender does charge fees for refinancing, these are some you may run into:

•   Application fee: This fee covers the cost of processing the application and is typically due when you submit your application.

•   Origination fee: Some lenders charge this fee to help cover the costs of processing your loan and disbursing the funds.

•   Late payment fee: Many lenders charge this fee if you miss a payment. Depending on the lender, you may get a grace period between your due date and when the fee is assessed.

•   Returned payment fee: If you try to make a payment but don’t have enough money in your checking account to cover it and no overdraft protection, some lenders may charge you a fee for the failed transaction.

In most cases, you won’t have to pay anything up front to refinance your student loans. With SoFi, there are no application fees, no origination fees, no late fees, and no prepayment penalties.

As you’re shopping around, make sure you read the fine print to understand the cost of refinancing student loans with that particular lender.

Reducing the Cost of Refinancing Student Loans

Because many student loan refinance lenders don’t charge upfront fees, shopping around with those costs in mind can help you improve your chances of finding a low- or no-costs lender.

Keep in mind, though, that some lenders may charge what are called “hidden fees.”

Instead of showing up in marketing material, these fees are often buried deep in the terms and conditions of the loan and can be tough to find if you’re not looking for them.

Taking the time to thoroughly read the terms and conditions before refinancing could help you avoid unexpected fees down the line.

If you get approved for the new loan, you might consider setting up automatic payments to help avoid missing a payment and getting charged a late fee. Some lenders, including SoFi, offer an interest rate discount to qualified borrowers using autopay.

Then, you might make it a goal to always have a buffer in your checking account or overdraft protection to ensure a payment doesn’t get returned.

Considering SoFi to Avoid Upfront and Hidden Costs

If you’re considering refinancing your student loans, shopping around can take time. When refinancing with SoFi, you don’t have to worry about paying upfront costs or hidden fees.

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.

With SoFi, refinancing is fast, easy, and all online. We offer competitive fixed and variable rates.

FAQ

Does it cost money to refinance loans?

No, it does not cost money to refinance student loans. Most student loan refinance lenders do not charge fees associated with refinancing — including application fees and origination fees. If you are being charged a fee to refinance, that could be a red flag and you may want to look elsewhere.

What is a finance charge on a student loan refinance?

On a student loan refinance, a finance charge is what you pay the lender beyond the principal balance. This would include interest and any fees associated with the loan.

How much does it cost to consolidate student loans?

If you want to consolidate your federal student loans, there is no application fee associated with a Direct Consolidation Loan. It does not cost the borrower anything to consolidate federal loans.

---

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.

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.

Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

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.

SOSL0122002

Read more

Editor's Note: For the latest developments regarding federal student loan debt repayment, check out our student debt guide.

If repayment of your student loans has started or interest is accruing, it might be high time to school yourself on managing your school debt. Refinancing is one option.

Sure, it’s not the most fun way to occupy a weekend, but taking a close look at your student loans and understanding the ways to repay them may save you money and angst.

When Might It Be a Good Idea to Refinance Student Loans?

There are many reasons it may be a good idea to refinance your student loans, including lowering your interest rate, lowering your payment, and combining multiple loans into one. You can refinance both federal and private student loans, but refinancing federal loans with a private lender will forfeit your eligibility for federal benefits and protections.

When It Would Save You Money

The main goal of refinancing with a private lender is to lower the interest rate on your student loans — federal and/or private — with one new loan with a new rate that pays off the existing loans.

When rates are low, refinancing student loans could make a lot of sense. How much could you save? This student loan refinancing calculator can be enlightening.

Refinancing could be a great choice for working graduates who have higher-interest Direct Unsubsidized Loans, graduate PLUS loans, and/or private loans.

Or, perhaps you need to lower your monthly payment to help save money right now. One way to do this is to refinance your student loans with a longer loan term. This will reduce your payment, but you may end up paying more in interest over the life of the loan due to the extended term. You could also lower your payment by qualifying for a lower interest rate, if you can, and keeping the term the same.

You Qualify for Refinancing

Your eligibility to refinance student loans depends on your financial history, employment, and monthly income vs. expenses. If you’ve spent time building your credit and have a stable job, you could qualify for the best student loan refinancing rates.

You can also consider applying for a student loan refinance with a cosigner. If your cosigner has a stronger credit profile than you or better debt-to-income ratio, you may be able to land a better rate on your refinance.

You can usually refinance student loans right after graduating, and as often as you want after that. Most lenders charge no fees to refinance.

You Want to Remove a Cosigner

Some lenders allow a cosigner to be released from any repayment obligation when student loans are refinanced.

Principal borrowers applying for cosigner release typically have to demonstrate that they are able to handle the loan on their own by meeting certain minimum requirements.

You Want to Switch to Fixed Interest

If you have student loans with variable rates, you may want to consider refinancing to lock in a fixed rate before rates rise.

Then again, if you’re willing to take on a risk to potentially save on interest — and will be able to pay off your student loans quickly — you might consider switching from a fixed rate to a variable rate. A variable-rate loan typically starts with a rate that’s 1-2% lower than a comparable fixed-rate loan.

But what if variable rates rise? Variable rates often will still save you money over the long term.

You Are Willing to Give Up Federal Benefits

If you have federal student loans, refinancing them into a private student loan will eliminate the ability to participate in income-driven repayment plans, Public Service Loan Forgiveness, and federal deferment and forbearance.

If you are using these benefits or plan to, it’s not recommended to refinance your student loans. Instead, you could consider a federal student loan consolidation. This combines multiple loans into one, with the interest rate being the weighted average of the loans you are consolidating rounded up to the nearest one-eighth of a percent.

Want to see if refinancing could be right for you? We’ve created a quick quiz that might help.

IMPORTANT: The projections or other information generated by this quiz regarding the likelihood of various outcomes are hypothetical in nature, do not reflect actual results, and are not guarantees of offers.

The Takeaway

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.

With SoFi, refinancing is fast, easy, and all online. We offer competitive fixed and variable rates.

FAQ

When is it a good time to refinance student loans?

You can refinance your student loans at any time, but a good time to refinance is if you’re looking for a lower interest rate or lower monthly payment, and you’re not using or planning on using federal benefits. To qualify for the best rates, you’ll need a solid credit profile and a stable income. You can also consider refinancing your student loans with a cosigner.

Can refinancing student loans reduce the cost of your total debt?

Yes, refinancing your student loans can reduce the amount of interest you pay over the life of the loan. You can do this by lowering your interest rate (and keeping your loan term the same) and/or shortening your loan term.

What credit score do you need to refinance student loans?

The minimum credit score needed to refinance student loans varies from lender to lender, but FICO states that a “good” credit score is 670 or higher. To get the best student loan refinance rates, you’ll want to have a good credit score and low debt-to-income ratio. If you don’t meet those requirements, you may want to consider refinancing with a cosigner.

---

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.

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.

Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

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.

SOSL0223005

Read more

According to the US Bureau of Labor Statistics, the job outlook for software developers is going to increase by 25% from 2021 to 2031. This represents a significantly higher projected growth than the average for all occupations. Median annual pay for software developers was $120,730 in May 2021 (the most recent government statistic available.)

But how do you pay for the training? These programs can be pricey, and not all students have enough cash on hand to cover the cost. Fortunately, there are ways to make coding bootcamp more affordable. Read on for a closer look at how these programs work, including average costs and payment options.

What Do Students Learn in Coding Bootcamp?

Students will learn a variety of programming languages, rather than focusing on just one, to be equipped for a dynamic job market. When students graduate, they may have a portfolio, a website, profiles on programming websites, as well as interviewing and job hunting skills.

These programs teach frameworks and programming languages like JavaScript, CSS, HTML, Ruby on Rails, Python on Django, and PHP. According to a Course Report study, 79% of Bootcamp graduates find jobs as programmers.

Coding bootcamps are intensive programs that teach skills like data science, cybersecurity, full-stack web development, and technical sales, among others. Typically, the average Bootcamp is around 14 weeks long but can range anywhere from six to 28 weeks. Courses are offered online or in-person and at dedicated coding Bootcamp facilities or at universities a Bootcamp program might partner with.

How Much Does Coding Bootcamp Cost?

The coding bootcamp cost varies depending on the program. While the average full-time coding bootcamp in the US costs $13,584, bootcamp tuition can range from $7,800 to $21,000. It’s a good idea to ask about costs for the programs you are interested in so you’ll have adequate information to compare programs. The cost of coding bootcamp might seem high, but paying for a college degree can be a much costlier investment.

If the cost seems out of reach, looking into free coding bootcamps might be an alternative. Some free programs are open to anyone, while others require passing one or more tests. There are also free coding programs targeted to women, girls, and residents of underserved neighborhoods. Some of the free programs offer just basic instruction in coding, while others are more comprehensive.

Recommended: Are Coding Bootcamps Worth the Money?

Paying for Coding Bootcamp

There are a variety of options to pay for coding Bootcamp.

Loans

One option might be taking out a coding bootcamp loan. Some coding bootcamps partner with lenders that offer various terms and interest rates depending on a variety of the student’s financial factors. Bootcamps might also offer their own financing, or students might choose to apply for a loan through a bank or credit union. It’s important, however, to read the fine print of any loan agreement to be sure you’re aware of any fees, such as an origination fee or early repayment fee, that could add to the cost of the financing.

Alternative Ways to Pay Tuition

Coding Bootcamps may also offer an income sharing agreement (ISA) or deferred tuition. Students who choose an ISA agree to pay a percentage of their income to the school for a certain period of time after they graduate and find a job. With deferred tuition, students will either pay no upfront tuition or they’ll pay a small deposit, and then begin paying tuition once they graduate and secure a job.

The terms of each ISA or deferred tuition program differ by program. For instance, The Grace Hopper Program does not require students to pay tuition if they are unable to secure a job within one year of graduating. GeneralAssembly does not require students to pay tuition if they don’t secure a job that pays $40,000 within eight years of graduating.

Recommended: Ways to Pay for Your Child’s Tuition

Employer Funded

If students are already working, they might consider asking their employer to fund part of or all of their boot camp education. By demonstrating to their employer that by increasing their skill set they’ll be able to contribute more to the company and boost their productivity, their employer might be willing to pay for some of the program cost.

Recommended: How Does Tuition Reimbursement Work?

Military Benefits

US military veterans may be able to pay for their coding Bootcamp using their GI Bill benefits. Another funding source for veterans to look into is the Veteran Employment Through Technology Education Courses (VET TEC) program . This educational assistance program funds education for qualified veterans in computer software and programming training, and data processing, information science, and media applications programs. Benefits include housing costs incurred during the training program as well as tuition for full-time students.

Paying Out-of-Pocket

Using personal savings to pay for a coding bootcamp program is an option some students might have. While it may be difficult to part with the money, the return might be worth it. The median starting salary for a coding bootcamp grad is between $77,030 and $120,730.

Recommended: Jobs that Pay for Your College Degree

Coding Bootcamp Scholarships

Students seeking scholarship funds won’t have far to look. Like scholarships for any other education program, these are available to students who meet a variety of qualifications, for instance, residence in certain geographic locations, students of diverse genders and cultural backgrounds, veterans, and military spouses, among many others.

Some scholarships might be need-based, while others will be based on merit. The amount of tuition and other costs that are covered will vary by scholarship.

Types of Jobs for Coders

After graduating from coding bootcamp, students will be qualified to work in a variety of jobs, including:

•   Software engineer: working with Ruby, HTML, CSS, and JavaScript.
•   Data scientist: discovering insights from massive amounts of data.
•   Back-end web developer: using PHP, Sql, Ruby, Python, or Java.
•   Front-end web developer: utilizing HTML, CSS, and JavaScript to design websites.
•   Full-stack developer: troubleshooting website design on the front and back end.
•   Mobile developer: building mobile apps.

There are many options, and students can look for a job that best suits their skills.

The Takeaway

If you want to be a part of the growing technology field, a coding bootcamp might be a route you can take. While the cost can be a deterrent, there are a number of ways to make the tuition more manageable, including scholarships, deferred tuition programs, tuition financing, and/or an employer-based tuition reimbursement plan.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. Checking your rate takes just a minute.

SoFi’s Personal Loan was named NerdWallet’s 2024 winner for Best Personal Loan overall.

---

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.

Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

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.

SOPL0623058

Read more

Editor's Note: For the latest developments regarding federal student loan debt repayment, check out our student debt guide.

Shopping around for the best value is tried and true advice that extends to most things you can sink money into. It can be especially true in the world of student loans — an economic ecosystem where there are approximately 45 million borrowers holding more than $1.7 trillion in debt, and payments to erode that debt have been slowing on the whole.

Reasons for choosing a different student loan lender than one previously used might include looking for better service, a lower interest rate, or better terms. Some borrowers may want to refinance their existing loans so they can minimize the number of lenders they work with and the number of payments they have to keep track of.

Borrowers who have federal student loans are encouraged to carefully consider refinancing those loans with a private lender, because in doing so they will no longer be eligible for deferment, forbearance, or other repayment or relief aid through the federal government.

How to Change Student Loan Lenders

There are many reasons to consider transferring student loans to another lender. But something important to understand about this change is it typically will mean seeking out a private student loan lender, even for your federal loans.

So, why would you want to change lenders in the first place? Private student loan lenders might offer better rates, terms, and repayment options that may work better for your financial situation. Some lenders may be a better fit for graduate students, others for refinancing, and others for cosigner flexibility. Benefits offered by private lenders might also be attractive to borrowers. For instance, SoFi offers members a discount on college prep classes and exclusive rate discounts for eligible members.

When shopping around for private student loan lenders, knowing what criteria are deal makers and also deal breakers for your unique situation is helpful. Borrowers might qualify for a higher loan amount from a private lender vs. a federal student loan, but terms and interest rate typically depend on an applicant’s credit and other financial factors. A private lender might offer a variable-rate loan, which means market changes could impact your monthly payments in unpredictable ways. With so many variables in the mix, it isn’t unusual for students to use both federal and private student loans to cover their college costs.

Recommended: Fixed vs. Variable Rates: What’s the Difference?

In most cases, though, federal student loans tend to offer better borrower protections—like loan forgiveness, deferment options, or income-driven repayment plans—than private student loans. Qualifying for federal student loans may also be easier than qualifying for a private student loan for some borrowers because federal student loans don’t typically require a credit check.

Lenders vs Servicers: What’s the Difference?

It might not seem like there is much of a difference between lenders and servicers, but the two play distinctly different parts in the business of borrowing money. Lenders actually make the loans, while servicers collect the payments from the borrowers.

The Department of Education, i.e., the federal government, is the lender of federal student loans. The companies who work on behalf of the government to collect student loan payments are the servicers. The Department of Education’s National Student Loan Data System Database gives borrowers a comprehensive look at their student aid. With the information all in one place, it might be easier to make a decision about making changes to student loans.

Private lenders also use loan servicers. Just like federal student loans, the company that makes the loan will be different from the company the borrower pays. The servicer and payment information is typically found on the most recent student loan statement. Payments can usually be made in a number of ways: online, by mail, by phone, or even through an app if the servicer has one.

Recommended: How to Find Out Who Your Student Loan Lender Is

Refinancing as Transferring

Refinancing student loan debt is just a way to turn an existing loan into a newer one, ideally in a way that will result in potentially lower interest rates or lower monthly payments. (Keep in mind that you may pay more interest over the life of the loan if you lower your payments by choosing an extended term.) Most student loans, like any other large consumer loan, are eligible for refinancing for qualifying applicants.

Borrowers who have only federal student loans may be interested in seeking a loan consolidation via a Direct Consolidation Loan, but as the ED warns, the trade-off here is a simpler payment but also the potential loss of some benefits, such as interest rate discounts.

Furthermore, a Direct Consolidation Loan doesn’t typically result in an interest rate savings — it has a fixed interest rate for the life of the loan, calculated as the weighted average of the interest rates on the loans being consolidated, rounded up to the nearest one-eighth of one percent. Consolidation is not usually a way to save money on interest payments, but is more an option to streamline repayment—one loan means only one payment to make each month.

Private lenders will typically do a credit check, which includes personal financial details like income and credit histories, and could be a potential drawback for students who may not have much of either. Students might have a tougher time qualifying for a loan on their own with that requirement, and a cosigner may be required on the loan.

Doing Your Homework

There are many moving parts to consider when thinking about using a different lender from one you’ve used in the past or transferring an existing loan to a new lender. What aspects of your student loans would benefit from transferring? What don’t you like about your current lender or servicer? What services or benefits would you like to get from a lender?

If you do decide to move forward with transferring your student loans to a new lender, also known as refinancing student loans, allow SoFi to help. SoFi offers an easy online application, competitive rates, and no origination fees.

See if you prequalify with SoFi in just two minutes.

---

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.

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.

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 .

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

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.

SOIS0523007

Read more