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Oct

2024

What Is a Minor in College? A Comprehensive Guide

By Marcy Lovitch | Going to College, Student Loans, student_loan | Comments Off

All college students are required to declare a major, but what about a minor? This is a question many students find themselves asking halfway through their college curriculum.

Knowing about what a minor is, what it entails, and if it’s something that can bolster your career can help determine if it’s really right for you.

Keep reading to learn more about what a college minor is, how it differs from a major, and the pros and cons that come with it.

Defining a College Minor

A college minor, sometimes referred to as a “mini major,” is a group of courses you take in a certain discipline. Minors in college can complement your chosen college major or be totally unrelated.

While most colleges don’t require a student to declare a minor, some do. Schools may have a definitive criteria about your choice of minor. For instance, you may not be able to pursue a minor in the same department as your major.

For the most part a college minor is voluntary, and a student may not feel it’s important enough to take on the additional coursework in addition to their main area of study. Instead, they may want to have complete freedom to use those class credits for electives that may not be as labor intensive.

Differences Between a Major and Minor

Your major is the main area of specialty that determines the type of bachelor’s degree you’ll earn. It’s the field of study you’ve chosen based on your professional aspirations. One way to think of it is that your major is your primary job and your minor is more of a side gig.

When you’re finally awarded your college diploma, it will be for your major, not your minor. That’s because a college minor is typically considered optional and not a requirement for your core curriculum. Even if your school is one that does require you to choose a minor, it won’t be reflected on your degree unless your school is one with an exception to that rule. However, it will most likely be included in your college transcript.

Another key distinction between a college major and a minor is the amount of coursework you have to complete and how much it counts toward your final credits. Depending on your school, a major will make up one-third to one-half of the school’s credits needed to graduate, which is typically 120 credits for a four-year program.

In general, a college major will require you to complete at least 10 courses compared to five to seven classes for a minor. A minor typically requires anywhere between 16 and 30 credits.

Benefits of Pursuing a College Minor

There are many upsides to tacking on a college minor. If you’re wondering whether or not it’s worth pursuing, consider these pros:

Explore Complementary Interests

A college minor related to your major allows you to expand your expertise in that related field. For instance, if you’re a biology major and decide to minor in chemistry, you’re already familiar with the basics of science and look at things from a scientific perspective. There are similar analytical skills you can apply.

But even if your minor is in a different area, there are still ways it can positively impact your major. An example is if you’re majoring in political science, you may want to minor in public speaking, which can be helpful if you have any ambitions to run for elected office.

You may even find your minor is more exciting and decide to change your major to that area of interest, or decide to combine the two disciplines and pursue a double major.

However, before making any big changes, it’s a good idea to talk to your academic advisor. Depending on when you decide to do a change-up, it could add extra time toward getting your degree. This can translate into additional costs and more student debt.

Develop Secondary Skill Sets

Regardless of whether your minor directly corresponds to your major, you’re acquiring and polishing both hard and soft skills. Those more technical hard skills can be directly applied to the type of work your career requires. Soft skills, on the other hand, are more of a social and interpersonal nature. Both are important to employers and offer skills they want their prospective employees to have under their belt.

Enhance Marketability and Job Prospects

Homing in on a subject offers you the opportunity to develop more of an in-depth knowledge and expertise. A minor shows your well-roundedness, flexibility, and the ability to wear other hats. For example, a marketing major who minored in communications can be an asset in the areas of advertising, journalism, and public relations.

A complementary minor can also give you a more solid base and deeper understanding of some issues you may deal with in your occupation. If a nursing major chooses to minor in psychology, it can help them better understand patient behavior.

Overall, a minor shows a level of seriousness and willingness to challenge oneself. These are qualities that can go a long way and put you at an advantage when applying for your first job out of school, graduate school, or even for a college internship.

Recommended: 6 Ways to Save Money for Grad School

Popular College Minor Options

There are certain college minors that attract more students than others. Here are some popular ones:

STEM Minors

STEM, which stands for science, technology, engineering, and math, consists of natural, physical, and life sciences; computers; electronics and other types of tech; all kinds of engineering; mathematics; and areas that rely on the principles of math. Examples of STEM minors include computer science, kinesiology or exercise science, civil engineering, and statistics.

Deciding on a STEM subject for your minor can give you a leg up in the job market. According to the U.S. Bureau of Labor Statistics, job opportunities in the STEM field are expected to grow 7% by 2032, compared to 2% for all occupations.

Business Minors

With a business minor, you can take classes in accounting, marketing, human resources, and e-commerce. Choosing business as a minor allows you to learn the fundamentals of business, which can be extremely valuable and practical out in the real world.

Knowing more about how business is conducted and becoming more savvy about finance benefits you both professionally and personally. Career-wise, it can come in handy if you’re applying for a job that may require a deeper understanding of certain business practices. In your own life, you may even get a better handle on your own financial situation when it comes to managing private student loans and staying on top of how to pay for college.

Liberal Arts Minors

Liberal arts is a field with a broad range of disciplines, including creative arts, social sciences, humanities, and more. People who decide to minor in liberal arts may choose sub-studies in English, psychology, sociology, anthropology, philosophy, or communication.

For someone with a very demanding major, a liberal arts minor can offer a less taxing curriculum. Instead of being geared toward technical skills, liberal arts classes give students an opportunity to focus on critical thinking, collaboration, creativity, and verbal and written communication skills.

Language and Cultural Minors

Minors specializing in different aspects of cultural heritage and language can expose a student to different world views, beliefs, and practices.

A foreign language minor allows you the ability to become bilingual or multilingual, which is a huge asset in the workforce where there’s an increasing demand for people who speak other languages. You may want to expand on your high school language classes or minor in a completely new one.

A language minor may also be one in linguistics, which is the study of language structure, including phonetics, syntax, semantics, and the history of how language has changed over time. Students may also find there’s an option at their college to minor in American Sign Language.

Cultural studies minors are designed to study all types of cultures, their histories, and perspectives. These can include groups based on class, gender, ethnicity, race, religion, and geographical location. Classes in popular culture, women’s studies, world religions, and African-American or Asian studies are some examples of cultural studies minors.

Choosing a Complementary College Minor

Picking a minor in general adds extra knowledge and allows you to build more expertise in another subject. Minoring in a complementary course of study, however, shows you’re serious about exploring an area that closely aligns with your major.

Regardless of whether your minor directly corresponds to your major, you’ve decided to use a portion of your credits toward another group of required classes, and that indicates a commendable level of focus and commitment.

Potential Drawbacks of a College Minor

There are some cons that can come with declaring a minor. For one, a minor can take up a lot of time, so you’ll want to make sure it’s an area you’re genuinely curious about and have a real interest in. Consider the amount of work you’ll have to do, such as writing papers, studying, and taking exams. These additional classes could end up adding unnecessary stress to your major’s workload.

A minor could also end up costing you more money, especially if you declare a minor late in the game. You may not be able to get all the necessary classes before graduation, which means you may have to extend your education by a semester or more.

The Takeaway

A minor is, in most cases, an optional supplementary course of study that can broaden your knowledge, expand your skill set, and open up more career options after graduation. Having a college minor can also make your undergrad studies a lot more fun, especially if it’s a topic where you have a strong personal interest.

Ways to finance your minor include cash savings, scholarships, grants, and both federal and private student loans.

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

Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.

FAQ

What’s the difference between a minor and concentration?

A minor can be a secondary course of study in any area, while a concentration is a sub-group of structured classes that directly relate to your major. For example, if you’re an English major, your concentration may be in creative writing, made up of poetry, fiction, nonfiction prose, and dramatic writing classes.

Do minors appear on your diploma or transcript?

Minors will appear on your transcript, but the mass majority of colleges and universities don’t include it on your diploma. The standard practice is to list only the student’s major on their bachelor’s degree.

How late in your college career can you add a minor?

Most colleges ask students to choose their major by the end of sophomore year or beginning of their junior year, which can also be an ideal time to choose a minor. You could declare it before you start your senior year, but it’s important to consider the fact you’ll have to cram all of that minor’s classes into one year’s time. This could impact your graduation date if you need to carry your studies over to another semester in order to fulfill your minor’s requirements.

Do minors impact financial aid eligibility?

It depends. Federal financial aid rules mandate only courses required for your major and degree program are eligible. However, classes required for a minor may be eligible for financial aid if they also satisfy major, core, or elective requirements for your degree. Otherwise, financial aid will be reconfigured or removed to reflect eligibility based on qualifying courses.

Photo credit: iStock/Drazen Zigic

SOISL-Q324-034

Oct

2024

Student Loan Debt by Major

By Kim Franke-Folstad | Going to College, Student Loans, student_loan | Comments Off

There’s no question that furthering your education can be an expensive endeavor. But depending on what you study, students in some majors can expect to pay a significantly higher price than others.

If your goal is to study law, medicine, or veterinary medicine, for example, and you plan to get a graduate degree, you could end up owing five or six times more than the average person with a bachelor’s degree.

Whether you choose your major out of passion or for the potential paycheck — or both — only time will tell if you’ll get the outcome you’re hoping for. In the meantime, it can be a good idea to look at how much you might have to borrow to finance the course of study you’re considering.

Student Loan Debt in America

How much do student loan borrowers in the United States owe after college?

According to the Federal Reserve’s most recent numbers, outstanding U.S. student loan debt reached $1.74 trillion in the second quarter of 2024. That’s nearly triple what the Fed says Americans owed in 2006.

Gen Xers have the most student loan debt out of any other generation, with an average balance of $44,290 per borrower. Baby boomers have the second-largest amount at $42,520 per borrower, and millennials average $32,800 per borrower.

And the United States isn’t the only country with a high amount of student debt. In England, the value of outstanding loans reached £236 billion (approximately $261 billion in U.S. dollars) at the end of March 2024. The government there forecasts the value of outstanding loans will be around £500 billion (approximately $553 billion in U.S. dollars) by late 2040s.

While student loan forgiveness and other reforms are often discussed here and abroad, little is happening so far.

Recommended: Average Student Loan Debt: By Career

Average Student Loan Debt

According to the Education Data Initiative, the average federal student loan debt balance is $37,853 per borrower. And if you include private loan debt, the average balance may be as high as $40,681.

Of course, the amount you might borrow (or have borrowed) could vary significantly depending on your major and the degree required to pursue your chosen profession.

The average student loan debt for a borrower with a bachelor’s degree, for example, is about $30,500. But if your major moves you on to a graduate degree, the cost can move on, as well — to an average of $65,667 for the graduate degree only ($84,203 on average in total student loan debt). And if you’re thinking about a degree in law or medicine, your debt could be in the hundreds of thousands.

Federal student loan programs also allow graduate students to borrow more money than undergraduates. Though there’s a $31,000 cap on federal loans for undergraduate students who are dependents, graduate students may be eligible to borrow up to the full cost of attendance through the federal Grad Plus program.

Other factors that affect the amount students end up borrowing can include the cost of living in the state where the school is located, whether the school is public or private, and whether the student is paying in-state or out-of-state tuition.

Recommended: How to Pay for College

Student Loan Debt by Major

When you first start thinking about how to choose your college major, it’s likely you base your top choices on the academic subjects you’ve always been good at or things you’re interested in. Maybe you have a passion for a subject you feel destined to pursue.

If you’re a practical person, you also may have considered what career that degree might potentially lead to, and how much you’d earn if it became your profession.

What you may not have thought about — at least not at first — was how much it might cost you to major in one subject vs. another. Or if you might have to get an advanced degree in your major to actually get the job, or paycheck, of your dreams.

Here’s a look at the average student loan debt for some popular degrees:

Law Degree

$160,000 upon graduating

74% graduate in debt

Medical Degree

$243,483 upon graduating

73% have educational debt

Dental School

$296,500 upon graduating

82% take out student loans

Nursing

Associate Degree in Nursing (ADN): $23,302

Bachelor of Science in Nursing (BSN): $28,917

Master of Science in Nursing (MSN): $49,047

Almost 70% take out student loans.

Business Administration

$41,000 to $170,000 for MBA students

54% of MBA graduates take out loans

Architecture

$40,000 in debt

(% who borrow not available)

Veterinary Medicine

$179,505 on average

82% graduate with debt

Pharmacy

$167,711

82.2% take out student loans

Education/Teaching

$55,800

45% take out loans

Communication/Journalism

Bachelor’s degree: $31,651

Master’s degree: $27,911

(% with loans not available)

Associate Degree Debt by Major

Below is the average debt of students graduating with an associate degree based on major, per Education Data Initiative:

• Alternative and Complementary Medicine and Medical Systems: $38,533

• Computer Systems Analysis: $27,924

• Behavior Sciences: $21,859

• Construction Management: $19,423

• Marketing: $16,628

• Animal Sciences: $12,705

• Education, General: $11,035

• Engineering, General: $10,299

• Biological and Physical Sciences: $7,591

Bachelor’s Degree Debt by Major

Below is the average debt of students graduating with a bachelor’s degree based on major, per Education Data Initiative:

• Behavioral Sciences: $42,822

• Computer Programming: $28,586

• Education, General: $28,001

• Music: $26,600

• Architecture: $26,468

• Construction Engineering: $26,025

• Social Work: $24,863

• Accounting and Related Services: $24,086

• Economics: $20,700

• Human Biology: $17,994

• Science Technologies/Technicians, General: $9,529

Master’s Degree Debt by Major

Below is the average debt of students graduating with a master’s degree based on major, per Education Data Initiative:

• Advanced/Graduate Dentistry and Oral Sciences: $158,155

• General Sales: $104,650

• Real Estate Development: $97,023

• Landscape Architecture: $80,409

• International Business: $65,052

• Public Health: $48,726

• Engineering Science: $45,887

• Insurance: $43,408

• Construction Management: $37,620

• Engineering, General: $33,235

• Education, General: $29,434

Doctoral Degree Debt by Major

Below is the average debt of students graduating with a doctoral degree based on major, per Education Data Initiative:

• Pharmacy, Pharmaceutical Sciences, and Administration: $310,330

• Psychology, Other: $187,804

• Public Administration: $146,194

• Health and Medical Administration Services: $101,589

• Education, General: $82,131

• Biology, General: $42,879

Federal vs Private Student Loan Debt

As these student loan debt statistics show, the rising cost of attending college can be a heavy financial burden for many Americans. And because there are limits on how much students can borrow in federal loans each year, many turn to private student loans to help cover their education bills.

The national private student loan balance now exceeds $128 billion, according to EducationData.org, which says 88.93% of that balance is in undergraduate loans and 11.07% is in graduate student loans.

Private student loans are a pretty small piece of the overall outstanding student loan debt in the United States — about 8.84%. But the number of students taking out private loans is growing. Student loan borrowers owe 71% more in private student loan debt than they did a decade ago, the Student Borrower Protection Center reports.

The Takeaway

No matter what your major is, there’s a good chance you may have to take on some debt to get the education you need and want.

And the final bill could be substantial: The average federal loan debt balance is $37,843 per borrower, but if you choose a major that requires a graduate degree, it could be two or three times that amount, or more.

Most student borrowers use federal loans to help pay for their education. But a combination of federal and private loans may be necessary to cover all your costs.

Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.

FAQ

How much student loan debt is there in the United States?

According to the Federal Reserve’s most recent numbers, outstanding U.S. student loan debt reached $1.74 trillion in the second quarter of 2024.

What is the average U.S. student loan debt per student?

According to Education Data, the average federal student loan debt balance is $37,843 per borrower. If you include private loan debt, the average balance may be as high as $40,681.

Who owns the most student debt?

The federal government — or, more specifically, the U.S. Department of Education — owns about 92.5% of all student loan debt in America.

Photo credit: iStock/FabrikaCr

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SOISL-Q324-055

Oct

2024

Is the Average College Tuition Rising? 2024 Price of College

By Melissa Brock | Going to College, Student Loans, student_loan | Comments Off

Between 2000 and 2021, the average published tuition and fees increased from the following amounts, after adjusting for inflation, according to Best Colleges:

• $2,146 to $3,564 at public two-year schools

• $5,638 to $9,596 at public four-year schools

• $25,468 to $37,222 at private nonprofit four-year institutions

This article will cover the average cost of college tuition and fees in 2024, the increase in college tuition costs, the reasons for the rise of average college tuition, and college tuition options you may want to consider for yourself.

Average Cost of College in 2023-24

In 2023-24, the average published price for tuition and fees for full-time undergraduate students were as follows, according to the College Board’s Trends in College Pricing and Student Aid:

• $11,260 for public four-year in-state institutions, $270 higher than in 2022-2023

• $29,150 for public four-year out-of-state institutions, $850 higher than in 2022-2023

• $3,990 for public two-year in-district institutions (including average community college tuition), $100 higher than in 2022-2023

• $41,540 for private nonprofit four-year institutions, $1,600 higher than in 2022-2023

Recommended: Average Cost of College Tuition

Increase in College Tuition Cost Over the Last 10 Years

Generally speaking, tuition has increased in the past decade. According to data from the College Board, the average published tuition price at a four-year nonprofit university during the 2013-2014 school year was $30,094, while in 2023-2024 that number jumped to $41,540.

Reasons for the Rise of Average College Tuition

The rise of college tuition over the past few decades can be attributed to several key factors, including:

Reduced State Funding

One of the primary reasons for rising tuition costs, especially at public institutions, is the decline in state funding for higher education. As states allocate less money to colleges and universities, these institutions often compensate by increasing tuition to cover budget shortfalls.

Increased Administrative Costs

Colleges have expanded administrative staff and services, including student support, campus amenities, and compliance with federal regulations. This growth in administrative functions adds to overall expenses, which are often passed on to students in the form of higher tuition.

Expansion of Campus Facilities

Many colleges invest in new buildings, state-of-the-art facilities, and upgraded dormitories to attract prospective students and remain competitive. These capital expenditures are expensive and often lead to increased tuition to help finance the construction and maintenance of these facilities.

Rising Faculty Salaries and Benefits

The cost of faculty salaries and benefits, including health care and retirement plans, has risen steadily. As colleges strive to attract and retain top talent, these increased personnel costs contribute to higher tuition.

Student Demand for More Services

There is a growing demand from students for more comprehensive services, such as mental health counseling, career advising, and extracurricular activities. Providing these additional services requires funding, which often results in tuition hikes to cover these enhanced offerings.

Together, these factors create a complex landscape where college tuition continues to rise, making affordability a significant concern for many students and families.

Recommended: How to Pay for College

Total Cost of College Over Time

While the cost of tuition has increased over the years, the prices of room and board, books, school supplies, and other necessities have also risen. The cost of room and board has almost doubled since the 1960s, going from $6,700 to more than $12,000, according to Best Colleges.

On Campus vs. Off Campus

How much you spend on college will vary depending on whether you live at home, on campus, or off campus. The College Board found that the cost of living on campus has increased slightly faster than the cost of living off campus, such as in an apartment or house with friends.

Total Cost of College Over Time by School Type

Of course, the type of school you attend (public or private) will also affect the total cost of attendance. Over the last nearly 60 years, the average cost across all institutions has increased 135%. It increased the most at private institutions at 187% and the least at two-year colleges, at 69%.

College Financing Options

Numerous college financing options exist for students. Students can tap into various options to pay for costs. Undergraduate students received an average of $15,480 of financial aid 2022-2023, according to the College Board’s Trends in College Pricing and Student Aid.

Students may rely on scholarships, grants, work-study, and student loans, in addition to personal savings to pay for their education.

Scholarships

Scholarships refer to money received from colleges or other organizations that students don’t have to pay back. Only about 7% of students receive scholarships, with the average student who receives one getting $14,890 annually at a four-year institution.

Student Loans

Students can take advantage of federal or private loans. Federal loans are provided by the U.S. Department of Education. To apply for a federal student loan, students need to fill out the Free Application for Federal Student Aid (FAFSA®) each year.

Private student loans are provided by banks, credit unions, and other financial institutions. These are separate from any sort of federal aid, and as a result, lack the protections afforded to federal student loans — like income-driven repayment options or the ability to apply for Public Service Loan Forgiveness. For this reason, private student loans are generally considered by students only after they have reviewed and exhausted all other options for financing.

Recommended: How to Complete the FAFSA Step by Step

Grants

Students can tap into federal, state, or institutional grants. Grants can also come from employers or private sources. Like scholarships, grants typically do not need to be repaid. They are mostly awarded based on financial need, and students will generally need to complete the FAFSA to qualify for them.

Work-Study

Students can get a work-study award, which is money they must earn when they attend college. They must file the FAFSA in order to qualify for work-study and must work a job on campus to receive the money.

Personal Savings

According to Sallie Mae’s annual How America Pays for College 2024 report, 37% of students receive help from their parents to pay for college, and 11% use their own income and savings. Strategies for parents paying for college include things like setting up an account designed to help parents save for college or other educational expenses, putting work bonuses or tax refunds into savings, and setting aside funds each month to put toward college.

The Takeaway

The average college tuition continues to increase. In 2000, the college tuition at a private four-year institution was $15,470, and now in 2024 it’s $38,421. There are a number of reasons for increasing tuition rates, including factors like a decrease in state funding, lack of regulation, and an increase in operating costs at colleges and universities.

Many students rely on financial aid to pay for college. Financial aid includes federal student loans, certain grants and scholarships, and work-study programs.

Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.

FAQ

How much has college tuition increased since 2000?

Since 2000, college tuition has significantly increased, jumping about 65% between 2000 and 2021. This surge reflects growing education costs, which have outpaced inflation and wage growth, making higher education increasingly expensive and contributing to the student loan debt crisis faced by many graduates.

How much has the total cost of college increased over the last decade?

Over the last decade, the total cost of college, including tuition, fees, room, and board, has increased by about 10% at public institutions and around 19% at private institutions. This rise reflects growing expenses in education and living costs, making college significantly more expensive for students and families.

How much has college tuition increased in 2024?

In 2024, college tuition increased by 1.6% over the last 12 months. However, this number will vary depending on the institution and whether it is public or private. These increases are consistent with the ongoing trend of rising education costs, impacting students’ financial planning and contributing to higher student loan borrowing.

Photo credit: iStock/MicroStockHub

SOISL-Q324-056

Oct

2024

Understanding Your Student Loan Promissory Note

By Kayla McCormack | Student Loans, student_loan, Terminology | No Comments

A student loan promissory note is a legally binding contract that explains the terms of the loan and your rights and responsibilities for repaying the debt. It lays out important details you’ll need to know (both during school and after you graduate), including how you can spend the proceeds of the loan, when interest starts accruing, along with your deferment and repayment options.

If you’re a student loan borrower, it’s essential to understand what’s in your promissory note. Here, we walk you through the most common types of promissory notes for students.

Key Points

• A student loan promissory note is a legally binding document that outlines loan terms and repayment obligations.

• Federal student loans may use a Master Promissory Note (MPN) valid for up to 10 years.

• The promissory note includes details on interest rates, fees, and repayment options, and must be signed before loan disbursement.

• Deferment options allow postponement of payments, though interest may accrue depending on the loan type.

• You can get a copy of your student promissory note by logging into your account on StudentAid.gov or (for private loans) contacting your lender.

What Is a Student Loan Promissory Note?

Put simply, a student promissory note is your student loan contract. It details the terms and conditions of that loan, including what you owe; how interest is calculated and charged; available repayment plans; and any late fees or other charges you may have to pay. Both federal and private student loans typically require that you sign a promissory note.

If you’re close to graduation (or recently graduated) and have any questions about repaying your student loans, your student loan promissory note is the best place to look. You’ll also want to review your promissory note if you are thinking about refinancing your student loans.

What Is a Master Promissory Note?

A Master Promissory Note (MPN) is a legal document that contains the terms and conditions for federal student loans. When you sign an MPN, you are promising to repay your loan(s) and any accrued interest and fees to the U.S. Department of Education.

Borrowers with federal student loans can typically sign just one MPN that covers multiple years of borrowing, rather than signing a new MPN each year. This means you are accepting the amount of each year’s new loans under the terms of the existing MPN.

There are two types of MPNs:

• Direct Subsidized/Unsubsidized Loan MPN: A student borrower must complete and sign this MPN before a school can make the first disbursement of a Direct Subsidized or Direct Unsubsidized Loan.

• Direct PLUS Loan MPN: A graduate/professional student borrower or parent borrower must complete and sign this MPN before a school can make the first disbursement of a Direct PLUS Loan.

What to Look for on a Student Loan Promissory Note

A promissory note will provide you with a wealth of information about your student loan (or loans). Here’s a closer look at what you’ll find in a promissory note.

Federal vs Private Student Loan Promissory Note

For federal student loans, you may sign a Master Promissory Note that allows you to borrow more than one loan during a period of up to 10 years. Private student loan lenders, by contrast, typically require that you sign a new promissory note for each new loan borrowed. This typically means you’ll sign a new promissory note each year you’re in school. It’s important to review this contract carefully each time, since terms and conditions may have changed.

All MPNs follow the same basic form, while promissory notes for private lenders can vary. Another key difference between federal and private student promissory notes: A promissory note for a private loan will list your interest rate, while an MPN will not. This is because an MPN may cover multiple years and federal student loan interest rates change annually.

Repayment Options

Federal loans come with several options to help you manage your debt post-graduation, such as income-driven repayment plans and forgiveness programs. These options are all outlined in your MPN. You’ll want to take time to review them, especially as you enter the repayment phase of your borrowing journey.

Your private student loan promissory note will also outline your repayment options and any borrower benefits you have access to (such as reduced-payment plans or forbearance). Before signing the contract, you’ll want to review the repayment details and make sure everything you have discussed with your lender is reflected in the promissory note.

Deferment Options

Student loan deferment lets you postpone payments on your student loans for a certain period of time. You won’t have to pay your student loan bills during a deferment, but interest might accrue during this time, depending on your loan type.

Federal loans offer deferment during a number of different situations, including being enrolled in school at least half-time (and for six months after you graduate), being unemployed, economic hardship, and active military service.

Like federal student loans, private student loans are typically placed into deferment while you’re enrolled at least half-time in school, and you may also have a six-month grace period after you graduate before you need to start making payments. Interest will generally accrue on private student loans during a period of deferment. Private loans may also offer other deferment options, but every lender is different, so you’ll need to check your promissory note.

Recommended: Student Loan Payback Calculator

Interest Rate: Fixed vs Variable

Interest rates on student loans can be fixed or variable. With a fixed-rate loan, your interest rate will remain the same for the life of the loan. With a variable-rate loan, the interest rate on the loan fluctuates based on a market benchmark or index rate.

Federal student loans have fixed interest rates, which are set each year by federal law. The exact interest rate on your loan will not be listed in your MPN. To view current interest rates for federal student loans as well as previous years’ interest rates, visit the U.S. Department of Education’s website.

Private student loans may give you a choice of fixed or variable rates. Your rate and whether it’s fixed or variable will be listed in your loan’s promissory note. If the rate is variable, it may start off lower than a fixed-rate option, but could rise over time leading to higher payments.

Student Loan Fees

Your promissory note will also detail any additional costs, such as any student loan fees. For example, federal student loans and some private student loans charge an origination fee, which is a percentage of your loan amount. This fee is typically taken from the loan before it is dispersed, which means you receive less than the full loan amount you accepted. Since the origination fee is included in the principal, you will also pay interest on it (even though you did not receive those funds).

Other student loan fees you may see listed on a promissory note include: application fees, late payment fees, and collection agency fees (in the event you default on your loan and it goes to collections).

Federal student loan fees are set by law. Private student loan fees will vary by lender, so be sure to check your promissory note to understand the fee structure for your loan.

Prepayment Penalties

Prepayment penalties are fees for paying off a loan early and are designed to help lenders make money by recouping lost interest charges. Fortunately, neither federal nor private student loans have prepayment penalties. Because of this, you can typically save money on interest by paying your student loan off early.

Recommended: Student Loan Refinancing Calculator

Cosigner Requirements and Removal

Some lenders require a cosigner for student loans. This is someone, typically a parent or guardian, who has good credit and agrees to repay the loan if the student is unable to. The cosigner is equally responsible for the loan.

Federal student loans generally do not require a cosigner (or credit check). The only exception is a Direct PLUS loan, which may require an endorser (which is essentially a cosigner) if the borrower has an adverse credit history.

Private student loans, by contrast, typically do require a cosigner, since students often lack the income and credit history to qualify for a loan on their own. Your promissory note will indicate if your loan has a cosigner. It will also state whether you can eventually remove your cosigner from the loan and, if so, what the requirements for a cosigner release are (such as making a certain number of on-time payments on the loan).

How Funds Can Be Allocated

Your promissory note will stipulate what you can spend the proceeds of your student loan on. Whether you have federal or private student loans, this typically includes: tuition, fees, books/supplies, room and board, transportation, and some personal expenses. It generally does not include off-campus dining, entertainment, and non-school services.

If you have money left over after your school uses your loan to cover tuition, room and board, and fees, you’ll want to refer to your promissory note to see what else you can spend the money on.

When Is the Promissory Note Signed?

In general, borrowers will need to sign the promissory note for their loans before receiving any funds. Students who are borrowing federal student loans are able to sign their master promissory note online by logging into their federal student loan account. Typically, you’ll need to sign only one MPN for multiple subsidized and unsubsidized loans, and it will be good for up to 10 years of continuous education.

A private student loan lender may allow you to sign a promissory note online, or you may need to print it out, sign, and send it via regular mail.

Named a Best Private Student Loans
Company by U.S. News & World Report.

What if a Promissory Note Is Not Signed?

For federal loans, a signed promissory note is required before the loan is disbursed. So, failing to sign the promissory note could mean you won’t receive your funds, or at least won’t receive them until the promissory note is signed.

A signed promissory note is also generally required for disbursement of a private student loan, though each lender may have their own requirements.

Do You Need a New Promissory Note Every Year?

Private lenders typically require students to sign promissory notes for each loan taken out, which means you may sign a new promissory note every year. Generally, federal student loan borrowers can sign a one-time Master Promissory Note that is good for up to 10 years of continuous education.

Do Your Parents Need to Sign?

If you are borrowing a private student loan and a parent is acting as your cosigner, they will likely need to sign the promissory note.

If you’re taking out a federal student loan for your undergraduate education, you are the only borrower and your parents do not need to sign your MPN.

If a parent is borrowing a Direct PLUS Loan to help pay for your college education, however, they will need to sign an MPN. As with a student MPN, a parent needs to sign only a single MPN once every 10 years. The government can provide multiple loans based on one parent MPN.

How Long Does the Master Promissory Note Process Take?

According to the Department of Education, most people complete their Master Promissory Note online in less than 30 minutes. When you log into your account to fill out your MPN, keep in mind that the entire process must be completed in a single session, since you cannot save your progress.

The Takeaway

A student loan promissory note is a legally binding document in which the borrower agrees to repay the loan and any accrued interest and fees. The document also explains the terms and conditions of the loan, including fees, deferment options, and repayment plans. Federal student loan borrowers may be able to sign just one Master Promissory Note, which will cover all federal loans for a period of up to 10 years. Private lenders generally require a promissory note for each individual loan.

Understanding the terms and conditions laid out in your student promissory note will help you know what to expect when borrowing and ultimately repaying your student loans.

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

Do you have to do a master promissory note every year?

No, you do not have to sign a Master Promissory Note (MPN) every year for federal student loans. Once signed, it’s typically valid for up to 10 years and allows you to borrow multiple loans under that same MPN. MPNs are also not school-specific so you can typically use the same MPN even if you transfer colleges.

How do you get your student promissory note?

For federal loans, you can complete your Master Promissory Note on the Federal student aid website. It takes about 30 minutes to fill out and two to three business days to process. You will then be able to access (and download) your student promissory note by logging into your account.

For private loans, you may be able to sign your promissory note online or you may need to print it out, sign it, and mail it to the lender. You’ll receive a copy of your promissory note along with your other loan materials.

How long does it take for a master promissory note to process?

Once you submit the Master Promissory Note (MPN) online, it usually takes about two to three business days for processing. This time frame allows for the U.S. Department of Education to verify your information and communicate with your school regarding the loan. After your MPN is processed, your school will credit the loan funds to your account, and you can check your loan status on the Federal Student Aid website.

How do I get a copy of the promissory note for my student loan?

You can get a copy of your signed Master Promissory Note (MPN) for federal student loans by logging into your account on StudentAid.gov using your FSA ID. Navigate to your loan documents to find the MPN. You can then view, download, or print a copy for your personal records.

With a private student loan, your lender will typically provide you with a copy of the promissory note, along with several other documents, when they finalize the loan. If you can’t locate a copy, you can reach out to your lender and ask them to send you one.

Do I have to pay my student loans if I drop out of college?

Yes, even if you drop out of college, you’re still required to repay your student loans. Once you’re no longer enrolled in school at least half-time, student loans typically enter a grace period, which is often six months. After that, repayment begins. Dropping out does not eliminate your obligation to repay the debt, and failure to make payments could lead to loan default.

Federal loans do offer some borrower protections, however. Options like deferment, forbearance, or income-driven repayment plans may help if you experience difficulty repaying your loans after leaving school. Some private lenders also offer assistance for borrowers who hit challenging times.

Will a student loan affect my credit score?

Yes, student loans directly affect your credit score. Once you take out a student loan, it becomes part of your credit report and, like other types of loans, can impact your payment history, length of your credit history, and credit mix. Making timely payments can help you build a positive credit history. However, missed or late payments can negatively affect your credit and score.

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.

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.

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.

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Oct

2024

Pharmacy School Loans: Here’s What You Should Know

By LeeMarie Kennedy | Debt Payoff, Going to College, Student Loans, student_loan | Comments Off

Pharmacy school student loans are one way for potential pharmacists to subsidize some or all of the costs associated with attending pharmacy school. Knowing the pros and cons of pharmacy school loans can help you decide if this route is right for you.

Keep reading to learn how much it costs to attend pharmacy school, different ways to pay for it, what a pharmacy school loan covers, and the ins and outs of pharmacy school student loans.

Average Cost of Pharmacy School

The average cost of attending pharmacy school spans anywhere from $30,000 to $250,000.

It’s a wide range but, generally speaking, in-state, public schools are on the lower end of the scale, costing around $5,000 to $30,000 per year, while pharmacy programs at private institutions can run between $20,000 and $95,000 per year.

Average Student Loan Debt Pharmacy School

The American Association of Colleges of Pharmacy (AACP)’s 2023 survey of pharmacy school graduates found that 82.2% of PharmD degree holders had to borrow money to get through school.

And the average student loan debt for pharmacy graduates, according to that same report, is $167,711.

There’s good news, though: The return on investment can be promising for pharmacists, whose median pay is around $136,030 per year, according to the Bureau of Labor Statistics.

What Can You Use a Pharmacy School Student Loan on?

There are several ways a student loan can be used to cover the cost of a pharmacy school education:

Tuition

As evidenced above, tuition is one of the biggest pharmacy school expenses that can be covered by a pharmacy school student loan. Since it can cost upwards of $250,000 to complete a pharmacy program, student loans can be helpful in covering that cost.

Fees

The fees associated with attending pharmacy college vary based on the type of program the student attends, how many credit hours the student completes, and whether they’re an in-state or out-of-state student. In some cases, a pharmacy school may charge “comprehensive fees” that cover tuition, fees, and room and board.

Books and Supplies

Pharmacy school student loans can be used to pay for books, supplies, and other education-related expenses. To acquire the funds for books and supplies, pharmacy school student loans are first applied to a student’s tuition, required fees, and room and board bills. Then, any remaining funds get refunded to the borrower, either in the form of a check or through direct deposit. From there, the money can be used to pay for books and supplies.

Recommended: How to Pay for College Textbooks

Living Costs

Room and board is another expense that can be paid for with pharmacy school loans. Students can use their borrowed funds to pay for student housing — whether that’s in a dorm room or an off-campus apartment with roommates.

Pharmacy School Student Loans: Pros & Cons

Pros of Using Pharmacy School Student Loans	Cons of Using Pharmacy School Student Loans
Help people pay for pharmacy school when they don’t otherwise have the financial resources to do so.	Can be expensive to repay.
Open up more possibilities for the type of pharmacy school a person can attend, regardless of the cost.	Can put borrowers into substantial amounts of debt.
Cover a wide range of expenses — including tuition and fees, school supplies, and room and board.	Borrowers might have to forego other financial goals to pay off pharmacy school student loans.
Paying off pharmacy school student loans can help build credit.	Late payments or defaulting on a pharmacy school student loan can damage credit.

Pros of Using a Pharmacy School Student Loan

Using a pharmacy school loan comes with some pros, including:

Student Loans for Pharmacy School Can Be Forgiven

In terms of pharmacists student loan forgiveness, there are several options for newly graduated pharmacists who need some help paying off their pharmacy school loans.

Typically, these forgiveness programs are available on a state or federal level.

A few different pharmacy student loan forgiveness options include:

• Public Service Loan Forgiveness (PSLF)

• HRSA’s Faculty Loan Repayment Program

• National Institutes of Health Loan Repayment Programs

• Substance Use Disorder Workforce Loan Repayment Program

• State-based student loan forgiveness programs

Salary

As mentioned above, the median pay for a pharmacist is $136,030 per year. For a pharmacy school graduate with student loan debt, this salary range could mean the difference between paying off loans and still having money left in the budget for living expenses, an emergency fund, and other types of savings.

Credit Score

Paying off pharmacy school student loans can be one way for a borrower to build their credit score. When building credit history, making on-time payments is a prominent factor, which can potentially have a beneficial effect on a borrower’s credit score. Although their credit score could face a minor dip right after paying off the loan, it should subsequently level out and eventually rise.

Cons of Using a Pharmacy School Student Loan

Pharmacy school student loans can also come with cons, including:

Debt

Since a pharmacy school loan is an installment loan, it’s considered a form of debt. As such, potential pharmacists are signing a long-term contract to repay a lender for the money they borrow. Should they find themselves on uneven financial ground, they may end up missing a payment or defaulting on the loan altogether, which could have a damaging effect on their credit report.

Late Payment Penalties

Many pharmacy school student loan lenders dole out fees for late payments. The terms of the loan are outlined by the lender before the borrower signs the agreement, but it’s important to read the fine print. Loan servicers can charge a late payment penalty of up to 6% of the missed payment amount.

Interest Rates

Student loans for graduate and doctoral degrees like pharmacy school have some of the highest interest rates of any type of student loan.

Even federally subsidized Grad PLUS Loans have a fixed interest rate of 9.08% for the 2024-25 school year, which could cause a pharmacy school student loan balance to climb high over time.

Average Interest Rates for Pharmacy School Student Loans

Pharmacy students have a variety of student loan options available to them. This table details the interest rate on different types of federal student loans that might be used to pay for a portion of pharmacy school.

Loan Type	Interest Rate for the 2024-25 School Year
Direct Loans for Undergraduate Students	6.53%
Direct Loans for Graduate and Professional Students	8.08%
Direct PLUS Loans for Graduate Students	9.08%

Private student loans are another option that may help pharmacy students pay for their college education. The interest rates on private student loans are determined by the lender, based on factors specific to the individual borrower, such as their credit and income history.

Paying for Pharmacy School

Before looking into an undergraduate student loan option or a graduate student loan option, potential pharmacists might be able to secure other sources of funding to help them pay for pharmacy school.

Scholarships

Scholarships are funds used to pay for undergraduate or graduate school that do not need to be repaid to the provider.

They can be awarded based on many different types of criteria, including grade point average (GPA), athletic performance, community service, chosen field of study, and more. Scholarships might be offered by a college or university, organization, or institution.

For potential pharmacy school students, there are several available options for scholarships through their individual states and other providers. The American Association of Colleges of Pharmacy (AACP) is a great resource for finding a pharmacy school scholarship.

Grants

Unlike scholarships or loans, grants are sources of financial aid from colleges, universities, state/federal government, and other private or nonprofit organizations that do not generally need to be repaid.

The AACP breaks down grants and awards for health profession students and government subsidized grants for pharmacy school students on their website.

State Pharmacy School Loans

Some potential pharmacists may be eligible to participate in a state student loan program. The cost of attending a state pharmacy school will vary depending on whether or not the student lives in the same state as the school, so researching the accredited pharmacy programs by state can help them determine how much they’ll need to borrow.

Federal Pharmacy School Loans

The U.S. Department of Education offers Direct Subsidized and Unsubsidized Loans to undergraduate and graduate pharmacy school students. The school will determine the loan type(s) and amount a pharmacy school student can receive each academic year, based on information provided by the student on the Free Application for Federal Student Aid (FAFSA®) form.

PLUS Loans are another federal pharmacy school loan option, eligible to graduate and professional students through schools that participate in the federal Direct Loan Program.

Private Pharmacy School Loans

A private student loan is another way for students to pay for pharmacy school. When comparing private student loans vs. federal student loans, it’s important to note that because private loans are not associated with the federal government, interest rates, repayment terms, and benefits will vary. For this reason, private student loans are considered an option only after all other financing sources have been exhausted.

When applying for a private pharmacy school loan, a lender will usually review the borrower’s credit score and financial history, among other factors.

Income-Driven Repayment Plans

Income-driven repayment plans may help borrowers qualify for lower monthly payments on their pharmacy school loans if their total debt at graduation exceeds their annual income.

These plans aim to make payments more affordable by capping them at a percentage of discretionary income. After 20-25 years of qualifying payments, the remaining loan balance may be forgiven.

• Income-Based Repayment (IBR

• Pay As You Earn (PAYE)

• Revised Pay As You Earn (REPAYE)

• Income-Contingent Repayment (ICR)

The Takeaway

Roughly 82% of pharmacy school graduates have student loans, according to the AACP. Pharmacy school loans can be used to pay for tuition and fees, living expenses, and supplies like books and required lab equipment.

Federal student loans can be used in combination with any scholarships and grants the student may qualify for.

Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.

FAQ

How long does it take to pay off pharmacy school loans?

Depending on the type of pharmacy school loan you take out (private vs. federal) and when the funds were distributed, it can take between five and 25 years to repay a pharmacy school student loan.

How can I pay for pharmacy school?

There are several ways to pay for pharmacy school, including federal student loans, private pharmacy school loans, scholarships, grants, and personal savings.

What is the average student loan debt for pharmacy school?

According to the American Association of Colleges of Pharmacy, the average student loan debt for pharmacy graduates is $167,711.

Photo credit: iStock/Vaselena

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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-Q324-061