student_loan Archives

Jul

2025

Guide to Military Student Loan Forgiveness

By Jody McMaster | Debt Payoff, Fresh Out of School, Student Loans, student_loan | No Comments

Serving the country could serve your bottom line. The Army, Navy, Air Force, Coast Guard, and National Guard offer programs for repaying part or all of your student loans, if you qualify.

In this guide, you’ll learn about military student loan forgiveness and other repayment relief options.

Table of Contents

Does the Military Pay Off Your Student Loans?
Other Loan Forgiveness Programs for Military Personnel
Other Student Loan Benefits for People in the Military
FAQ

Key Points

• Military branches offer student loan repayment assistance programs that can cover significant portions of student loans for eligible members who commit to specific service terms.

• The Army, Navy, Air Force, Coast Guard, and National Guard have distinct programs, with potential repayments reaching up to $65,000 depending on the branch and commitment length.

• Various programs exist specifically for health professionals and certain military roles, providing substantial repayment assistance, sometimes exceeding $40,000 annually.

• Additional benefits for service members include interest rate caps and waivers on student loans while deployed in hazardous areas, enhancing financial relief during active duty.

• While military forgiveness options exist, some programs require careful navigation of eligibility criteria, and refinancing may impact access to federal repayment benefits.

Does the Military Pay Off Your Student Loans?

It might, but you must choose to work in specific military specialties, score at least 50 on the Armed Services Vocational Aptitude Battery, and commit to years of duty.

Here are repayment programs offered by the different military branches.

Military College Loan Repayment Program

Military enlistees, and some already enrolled members, can receive student loan repayment (LRP) assistance of up to $65,000 for a three- or six-year commitment. Federal student loans and even some private student loans may be forgiven.

To qualify for the LRP programs, you cannot have previous military experience. You must choose to work in one of the military occupational specialties that the military branch is seeking. And many of the programs will require withdrawal from the GI Bill program.

Army Student Loan Repayment: Active Duty

The Army’s Loan Repayment Program is offered to highly qualified applicants enlisting for at least three years. If you meet the eligibility requirements, the Army will pay up to 33.33% of your current principal balance, or $1,500, whichever is greater, per year served. The maximum in loan assistance is $65,000.

Army Reserve College Loan Repayment Program

For this Reserve repayment program, you must enlist for at least six years. The Army will repay 15% of your outstanding principal balance or $1,500, whichever is greater, after each year of service. The total can’t exceed $20,000.

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National Guard Student Loan Repayment Program

To qualify for the National Guard Student Loan Repayment Program, you must enlist for at least six years. You could earn up to $7,500 each year of the incentive term, or up to $50,000 in total student loan repayment.

Navy Student Loan Repayment Program

The Navy will pay 33.33% of the principal balance of a borrower’s federal student loans or $1,500, whichever is higher, for each year of service, up to three years.

The Navy Loan Repayment Program may pay up to $65,000 toward a service member’s student loans.

Coast Guard Loan Repayment Program

The Coast Guard offers new members who commit to three years of service up to $10,000 in loan repayment each year after the first year of active service. The maximum assistance is $60,000.

Health Professions Student Loan Repayment Program

This Army program eases the student debt of doctors, dentists, and other health care professionals who are on active duty or in the Army Reserve. Borrowers can get up to $40,000 of their student loans repaid annually. The maximum assistance is $120,000.

Then there’s the Air Force Financial Assistance Program, for medical and dental residencies. You may receive more than $45,000 for every year you participate in the program plus a stipend of more than $2,000 per month to cover living expenses. Upon completion of your residency, you will have a one-year obligation for each year of participation, plus one extra year.

Prior Service Soldier Loan Repayment Program

Members of the Army Reserve with prior military service who re-enlist in the Army National Guard may receive up to $50,000 for student loan repayment.

Air Force Judge Advocate General’s Corps Loan Repayment Program

Eligible judge advocate generals (JAGs) can apply for up to $65,000 in student loan repayment. After you have completed the first year as a JAG officer, payments are made directly to lenders for three years.

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Other Loan Forgiveness Programs for Military Personnel

National Defense Student Loan Discharge

Active-duty soldiers who have served in hostile fire or imminent danger pay areas for at least one year are eligible for cancellation of their federal Perkins Loans.

A borrower may see 100% of their loan principal, plus interest, canceled for a five-year term of service that began on or after Aug. 14, 2008.

Veterans Total and Permanent Disability Discharge (TPD)

If you are totally and permanently disabled, you may qualify for TPD discharge of your federal student loans or TEACH Grant service obligation.

Veterans can qualify by providing documentation from the VA that shows they received a VA disability determination.

Public Service Loan Forgiveness

In the Public Service Loan Forgiveness program, borrowers who serve full time in the military or who have gone on to other types of public service, including in government agencies, nonprofits, and public health organizations, may have federal student loan balance discharged after making 120 qualifying payments).

To be eligible, you must work for a qualifying employer and have eligible loans, including most federal Direct loans.

Other Student Loan Benefits for People in the Military

Interest Rate Cap

Under the Servicemembers Civil Relief Act, the interest rate on any debt incurred before enlisting in the military, including both federal and private student loans, is capped at 6% while you’re on active duty.

Interest Waiver for Those at Dangerous Posts

The Department of Education announced in late 2021 that Under the Higher Education Act, service members deployed to areas that qualify them for imminent danger or hostile fire pay would have no interest accrual on certain federal student loans that were first disbursed on or after Oct. 1, 2008.

The Takeaway

Military student loan forgiveness is possible if you clear a number of hurdles. But you might still need to pay at least a portion of your loans while you’re enlisted and after you resume civilian life.

For many people, refinancing student loans can be a way to get a lower interest rate or a lower monthly payment, especially with a solid credit and employment history. (Note: You may pay more interest over the life of the loan if you refinance with an extended term.)

Refinancing allows you to take out a new loan, with new terms, and use it to pay off your existing federal or private student loans. While doing so can have advantages, if you refinance federal; loans you lose access to federal programs like Public Service Loan Forgiveness and income-driven repayment plans, and some of the military-specific loan repayment assistance.

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

FAQ

Does the VA forgive student loans?

The Department of Veterans Affairs has a student loan repayment program for employees in certain occupations. You may be eligible to receive up to $10,000 per year, with a maximum of $60,000, toward the debt.

The VA also offers the Education Debt Reduction Program for health care providers who serve veterans. Up to $200,000 in student loan repayment is offered over a five-year period.

How much student loan debt will the military pay?

The exact amount the military will pay in student loan debt depends on the military branch a borrower is serving in. The Army and Navy repay up to $65,000. The Coast Guard pays up to $60,000 in student loan debt, while the National Guard pays up to $50,000.

Do 100% disabled veterans pay student loans?

A veteran who is declared totally and permanently disabled may be able to qualify for a TPD discharge with the proper documentation from the VA. After receiving the discharge, the borrower is typically not required to repay federal student loans.

SoFi Student Loan Refinance
Terms and conditions apply. SoFi Refinance Student Loans are private loans. When you refinance federal loans with a SoFi loan, YOU FORFEIT YOUR ELIGIBILITY FOR ALL FEDERAL LOAN BENEFITS, including all flexible federal repayment and forgiveness options that are or may become available to federal student loan borrowers including, but not limited to: Public Service Loan Forgiveness (PSLF), Income-Based Repayment, Income-Contingent Repayment, extended repayment plans, PAYE or SAVE. Lowest rates reserved for the most creditworthy borrowers. Learn more at SoFi.com/eligibility. SoFi Refinance Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).

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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.

SOSLR-Q325-008

Jul

2025

A Guide to Student Loan Settlements

By SoFi Editors | Debt Payoff, Student Loans, student_loan | No Comments

If you’re struggling with student loan debt, you may be considering the idea of pursuing a student loan settlement. But is it really possible to settle student loan debt for less than you owe?

In many cases, probably not. However, there are ways for some borrowers to get a student loan settlement if you’re in dire circumstances — though the risks might outweigh the rewards. Here’s what you need to know — plus other ways to help lower student loan payments.

Table of Contents

What Is a Student Loan Settlement?
Federal Student Loan Settlement
Settling Private Student Loans
Alternatives to Student Loan Settlements
Student Loan Refinancing
The Takeaway
FAQ

Key Points

• With a student loan settlement, borrowers settle their debt with lenders for less than they owe on it.

• Default is required for federal loan settlements, leading to negative credit impacts.

• Private lenders typically offer more flexible settlement terms than federal loans.

• Income-driven repayment plans and forgiveness programs provide alternatives to manage payments.

• Refinancing can lower payments but may result in loss of federal benefits.

What Is a Student Loan Settlement?

A student loan settlement is settling your debt for less than what you owe on it and then making affordable repayments.

Settlements probably aren’t an option for people who make on-time, minimum payments. A lender isn’t likely to accept a settlement for less than what you owe if they have reason to believe you will eventually be able to pay back the entirety of the loan.

Typically, you can consider a settlement if your student loans are in default. Once a federal student loan is in default, the entire balance comes due immediately, unlike loans in good standing, where you’ll have a minimum payment due each month.

Federal Student Loan Settlement

If you have student loans that you’re looking to settle, you first need to make sure you qualify to do so. You’ll need to currently be in default, which generally happens when you miss loan payments for 270 days. Default can negatively impact your credit score, making it difficult to obtain loans or credit, your wages may be garnished, and the lender may send your loan to collections.

A settlement for federal student loans is typically less common since the Department of Education can garnish your wages or offset your tax refunds to collect what you owe. When a settlement for a federal loan is possible — which typically occurs only after all other collection methods have been tried — it’s called a compromise. It means you’re making a deal to pay off your loan for less than what you borrowed.

This is different from student loan forgiveness, which cancels your loans under certain circumstances.

For a federal student loan settlement (or compromise), loan servicers typically have three potential options:

1. Waiver of fees. You’re now only responsible for the principal balance and interest, not the fees.

2. Half interest and fees waived. All your fees are waived, plus 50% of the interest. You’re only responsible for the other 50% of interest and the principal balance.

3. 10% of principal balance and fees waived. You’re responsible for 90% of the principal balance and remaining interest.

Settling Private Student Loans

If you have private student loans that you want to settle, your options are a bit different than federal loans. Your settlement will depend on your lender and what terms they are willing to accept. Each private lender is different, so you will have to contact them directly and ask their terms for settlement — if they accept settlements at all.

Alternatives to Student Loan Settlements

A student loan settlement is not without consequences. Your credit will likely take a hit when the loan is in default and also once it is settled. However, if your loans aren’t in default, there may still be other ways for you to avoid default and lower your monthly payments.

1. Income-driven repayment plans (IDR)

For federal student loans, you can see if you qualify for an income-driven repayment (IDR) plan. There are currently three options to choose from: Income-Based Repayment, Pay As You Earn (PAYE), and Income-Contingent Repayment. They all vary based on the details of your financial situation, like your discretionary income and family size.

Just be aware that IDR plans are scheduled to close in 2026. Beginning in summer 2026, borrowers will have only two repayment plans to choose from, including one new plan called the Repayment Assistance Program that is similar to an IDR plan.

2. Student loan forgiveness programs

There are ways federal student loans can be forgiven — if you qualify. With forgiveness, your loans are canceled, and you don’t have to pay off a balance, as you would with a settlement.

If you work in public service, education, healthcare, and some other sectors, you may be eligible for federal student loan forgiveness. To take advantage of certain federal programs, like Public Student Loan Forgiveness, you need to make 120 qualifying monthly payments under an eligible repayment plan and work for a qualifying employer to be eligible.

3. Discharging a loan

Getting your student loan discharged isn’t the same as forgiveness, but it does mean your loan may get partially or completely canceled. You may qualify if you’re permanently disabled, your school closed, or, possibly, you file for bankruptcy. If you’re a veteran with a service-related disability, you receive Social Security Disability Insurance, or your doctor has diagnosed your disability, you might qualify to have your loan discharged.

If you have federal loans, and you feel your school “misled” you, promising jobs or certain salaries after graduation, you may qualify to apply for Borrower Defense Discharge through the Department of Education. Although a federal court has issued an injunction against the borrower defense discharge program, delaying payments, borrowers can still submit an application.

Student Loan Refinancing

When you have a few different student loans, it can be overwhelming to pay them all on time every month. And with varying interest rates, it can get confusing.

Refinancing your student loans replaces all of your loans with one new one. You get new terms and a new interest rate. Your new interest rate is usually determined by your credit score; ideally if your credit is strong, you might qualify for a lower rate.

If you’re having trouble meeting the minimum requirements, you could consider trying to get a student loan cosigner.

Refinancing could be an option to consider if you’re struggling to make your payments on time every month. Refinancing may help you lower payments and possibly your interest rate, depending on your terms. (You may pay more interest over the life of the loan if you refinance with an extended term.) Check out our student loan refinance calculator to get an idea of how refinancing could help your student debt situation.

It’s important to note that refinancing federal loans with a private lender means you would lose out on any federal benefits, including access to income-driven repayment programs or potential student loan forgiveness.

The Takeaway

While student loan settlements are rare — especially for federal loans — there are other options for borrowers who are struggling to pay their loans. If you have federal loans, you can currently apply for an income-driven repayment program and in some extreme cases, you may qualify for your loan to be discharged. Another option you may want to consider is student loan refinancing.

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

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

FAQ

Can you negotiate a settlement on student loans?

Yes, it is possible to negotiate a settlement on student loans to pay off your loan for less than you borrowed. In general, private lenders have more flexibility to negotiate, though each one will determine the specific settlement terms they are willing to accept. Contact your lender to discuss your options.

A settlement for federal student loans is typically less common since the Department of Education can garnish your wages or offset your tax refunds to collect what you owe. A settlement typically only occurs only after all other collection methods have been tried, and it’s referred to as a compromise.

How is the student loan settlement figure calculated?

You’ll need to negotiate a private student loan settlement with your lender. For a federal student loan settlement (called a compromise), loan servicers typically have three potential options to offer: the borrower is only responsible for the principal balance and interest, not the fees; the borrower is only responsible for 50% of interest and 50% of the principal balance; and the borrower is responsible for 90% of the principal balance and remaining interest.

Is it possible to negotiate a lump-sum payoff of student loans?

It may be possible to negotiate a lump-sum payoff of student loans, but only after the loans have gone into default. To pursue this option, a borrower will typically need to negotiate with their loan servicer and demonstrate serious financial hardship. It’s generally easier to negotiate a lump-sum payoff of private student loans than federal student loans. Lump-sum payoffs for federal loans are fairly uncommon.

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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.

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

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.

SOSLR-Q325-007

Jul

2025

A woman on her computer doing a video interview for a job.

Finding Jobs That Pay Off Student Loans

By Kayla McCormack | Building Your Career, Fresh Out of School, Life & Career, Student Loans, student_loan | No Comments

Jobs that help pay off a portion of student loans have become more common and for a good reason. The average federal student loan borrower has over $38,000 in student loan debt, while borrowers with private student loans owe more than 41,000, on average, according to the Education Data Initiative.

Companies that help to repay a portion of student loans are still in the minority, however, so you may have to do some research to get student loan assistance as a benefit. To help you, here’s what to know about jobs that help pay off student loans, companies that offer this perk, and what you can do to try and negotiate for it.

Table of Contents

Types of Job-Based Student Loan Assistance Programs
Types of Jobs That Offer Student Loan Forgiveness
15 Major Companies that Repay Student Loans
How Is Student Loan Assistance Taxed?
Negotiating a Student Loan Repayment Benefit
Making Student Loan Repayment a Priority
FAQ

Key Points

• More and more companies in the U.S. are offering student loan assistance programs

• Some careers, such as healthcare, law, public service, and education offer repayment assistance programs or student loan forgiveness programs, typically in return for service commitments.

• A number of major companies offer employees help in repaying their student loans, including Hulu, New York Life, and SoFi.

• Student loan borrowers who receive student loan assistance may owe taxes on some canceled debt.

• When interviewing for a job that doesn’t offer student loan repayment assistance, individuals can try to negotiate the benefit into their total compensation.

Types of Job-Based Student Loan Assistance Programs

There are two types of student loan assistance you may receive through an employer: repayment assistance programs where your employer is a participant and repayment assistance benefits your employer offers funds to the employee or the employee’s loan servicer directly.

Repayment Assistance Programs

Depending on your career field, you may be eligible to receive student loan assistance or student loan forgiveness through a federal or state program. There are several programs for those working in public service careers, like the Public Service Loan Forgiveness (PSLF) and Teacher Loan Forgiveness programs, which cancel existing balances for eligible borrowers who meet certain requirements.

That said, these programs typically require you to commit to working in a specific job or a certain area (such as medicine, law, or military service, for example) for a set number of years, which can be challenging if you don’t enjoy the job or want to pursue a different career path somewhere else.

But if you fulfill your service obligation, you may get as much as your full student loan balance forgiven.

Repayment Assistance Benefits

According to data from the International Foundation of Employee Benefit Plans, 14% of employers in the U.S. offered student loan repayment assistance as a benefit in 2024 — up from 4% in 2019.

The terms of repayment assistance benefits can vary by employer. For example, some may offer to match a portion of the employee’s payments and others may simply pay a set amount toward an employee’s loan balance each month.

The amount you receive from a repayment assistance benefit may be less than what you might get through a government repayment assistance program. But you may not need to commit to a service obligation to qualify, and you may be able to negotiate how much you’ll receive.

Types of Jobs That Offer Student Loan Forgiveness

In order to qualify for certain types of loan forgiveness, borrowers may need to meet certain employment requirements. Here are some of the jobs that could potentially allow someone to qualify for federal student loan forgiveness programs.

1. Federal Agency Employee

The federal student loan repayment program exists for employees of the federal government, and allows a portion of their federal student loans to be paid off each year. The benefit permits for up to $10,000 in payments each calendar year, not to exceed a total of $60,000 for any one employee.

In order to qualify for this student loan repayment assistance, the employee is required to sign onto a minimum three-year contract with the agency. If they leave the agency early, they’ll need to repay any benefits received.

2. Public Service Worker

If you work full-time in the public service sector for a qualifying organization, such as the government or a non-profit, you may qualify for Public Service Loan Forgiveness (PSLF).

To pursue PSLF, borrowers need to have Direct loans and be enrolled in an income-driven repayment plan. (If you have other types of federal loans, such as Perkins loans, you’ll need to consolidate them into a Direct Consolidation Loan to qualify.) Forgiveness is awarded after making 120 qualifying payments and certifying all employers.

3. Medical Field

The Association of American Medical Colleges maintains a database with information on loan assistance programs for doctors by state.

Medical professionals who work in certain underserved areas may also qualify for loan forgiveness through the National Health Service Corps Loan Repayment Program. In this program, medical professionals must commit to working for at least two years at an NHSC-approved site in a Health Professional Shortage Area (HPSA).

Refinancing medical school student loans may be another option to consider for medical professionals who are not pursuing any loan forgiveness programs. Refinancing could potentially allow borrowers to secure a more competitive interest rate, if they qualify. Just be aware that refinancing federal loans makes them ineligible for federal forgiveness programs and other programs and protections.

4. Automotive Professionals

Professionals in the automotive industry may qualify for loan forgiveness through the Specialty Equipment Market Association (SEMA) Loan Forgiveness Program. To be eligible, you must work for a SEMA member business and have at least $2,000 in outstanding debt, among other qualifications.

5. Lawyer

In addition to PSLF, there are other lawyer-specific programs that provide assistance to lawyers paying off student loan debt. These include the Department of Justice Attorney Student Loan Repayment Program and the John R. Justice (JRJ) Program.

6. Teacher

Student loan forgiveness for teachers is available. Teachers who work in special education are considered highly qualified teachers or work in underserved areas may qualify for the Teacher Loan Forgiveness Program. The amount of loan forgiveness available is dependent on the teacher’s area of specialty and can be either up to $17,500 or up to $5,000.

7. Peace Corps

Peace Corps volunteers may be eligible to defer their loans or pursue PSLF. Additionally, while on a qualifying repayment plan, payments could be as low as $0 per month while volunteering.

8. Veterinarian

Veterinarians who work in underserved areas may qualify for up to $40,000 in student loan repayment assistance through the U.S. Department of Agriculture’s Veterinary Medicine Loan Repayment Program. Eligible veterinarians must agree to serve in a NIFA-designated veterinarian shortage situation for a period of three years to qualify.

15 Major Companies that Repay Student Loans

Hundreds of large and small employers offer jobs that pay off student loans, but it’s not always easy to find out which ones provide the benefit. To help you get started, here are 15 well-known companies that repay student loans.

1. Abbott Laboratories

The company’s Freedom 2 Save program functions a bit differently than other repayment assistance benefits in that it combines efforts to pay off student loan debt and save for retirement.

Full- and part-time employees who qualify for the company’s 401(k) plan and contribute at least 2% of their eligible pay toward student loan repayment will receive a 5% contribution to their 401(k) account. Employees aren’t required to contribute to their 401(k) to receive these funds.

2. Aetna

In addition to a tuition reimbursement program, healthcare company Aetna also matches student loan payments for eligible employees who meet certain requirements. For full-time employees, the program matches student loan payments up to $2,000 per year, with a lifetime maximum of up to $10,000 for qualifying loans.

3. Ally Financial

Financial services company Ally provides $100 per month toward student loan payments, with a lifetime maximum cap of $10,000. Employees also receive a monthly $100 contribution to a 529 plan with a $10,000 lifetime maximum.

4. Chegg

Education company Chegg has paid out more than $1 million toward employee student loan debt through its Equity for Education benefit. For entry-level employees through manager level, those who have worked at the company for at least 2 years receive up to $5,000 annually. Employees at the director or vice-president level can receive up to $3,000 annually.

5. Estee Lauder

The beauty company provides employees with $100 per month in student loan assistance, up to a lifetime maximum of $10,000.

6. Fidelity

As a full-time employee of the investment brokerage firm, you may be eligible to receive up to $15,000 toward your student loan payments.

7. Google

Google matches up to $2,500 in loan payments per employee each year.

8. Hulu

Streaming service Hulu pays up to $1,200 a year per employee who has been at the company for at least one year to help pay off their student loans, up to $6,000.

9. Live Nation

Entertainment company Live Nation Live Nation matches employee contributions of up to $100 per month, or $1,200 a year. The lifetime maximum is $6,000 in benefits. Employees must be employed with the company for at least six months to qualify.

10. New York Life

New York Life’s student loan assistance program contributes $170 per month toward student loans that are in good standing. Employees can receive up to $10,000 while enrolled in the program.

11. Nvidia

As a Nvidia employee, you can receive up to $350 a month toward your student loan payments. The lifetime cap is $30,000 in assistance. To be eligible, you must be a full-time or part-time U.S. employee working 20 hours or more per week.

12. Penguin Random House

Penguin Random House offers eligible employees $100 a month toward their student loans.

13. PricewaterhouseCoopers (PwC)

As a participating associate or senior associate, you can receive $1,200 in student loan payments each year with a maximum benefit of $7,200.

14. SoFi

As an employee with SoFi, you’ll get $200 each month in student loan repayment assistance.

15. Staples

Eligible employees for the Staples student loan assistance program include active, full-time U.S. associates with at least one outstanding loan obligation. Participants must also have obtained or are in the process of receiving a degree from an accredited institution. The company pays $100 per month toward loan principal for 36 months.

How Is Student Loan Assistance Taxed?

If you receive student loan assistance or cancellation, it’s important to understand the tax consequences. Depending on the situation, you could be responsible for a tax bill.

The IRS typically considers canceled debt to be taxable income. That includes most student loan debt forgiveness or discharge, except for PSLF. However, the American Rescue Plan Act of 2021 exempts borrowers who are working toward loan forgiveness from having their forgiven balances taxed if their loans were discharged between January 1, 2021, and December 31, 2025. This only applies to federal taxes, though, and some states may still require forgiven student loans to be taxed as income.

As for employer-sponsored assistance programs, a temporary pandemic-era provision allows employers to contribute up to $5,250 per year in tax-free funds toward qualified education costs for employees. Any contributions above that amount are considered taxable income for the employee. However, this special tax treatment expires December 31, 2025, after which any amount of employer payments or reimbursements for education expenses or student loan repayment will be taxed as income.

Negotiating a Student Loan Repayment Benefit

If you’re looking for a job, keep an eye out for companies that repay student loans as an employee benefit. If you can’t find one, you can still try to negotiate the benefit into your total compensation. Here are some ways to do it.

Doing Your Research

Resources such as Payscale and Glassdoor can help give you an idea of the salary and benefits that may be available from various companies. Look at what the company you’re interested in typically offers as well as what you might get with a similar position somewhere else.

If anything, this process can give you a better idea of what you’re worth. But it will also give you a benchmark that you can use to negotiate for student loan repayment benefits, along with other aspects of your compensation.

Making Your Interests Clear

Helping a potential employer understand why student loan repayment is important to you can help set the stage for the entire conversation.

In addition to salary, employers can consider several other factors to make up your total compensation. So knowing what’s most important to you can help them make a more attractive offer.

Asking for a Signing Bonus Instead of Monthly Payments

While a signing bonus isn’t specifically designed as a student loan repayment benefit, you can use it that way. In fact, making a lump sum payment toward your student loans could help you accelerate your student loan debt repayment timeline.

Recommended: How to Negotiate Your Signing Bonus

Asking for the Opportunity to Revisit the Request in the Future

If you can’t manage to persuade a potential employer to provide you with student loan assistance, that may not be the end of it. You could ask for the chance to talk about your compensation again in six months or a year.

During that time, you may be able to prove to your employer that it’s worth the investment on their part. Or you may have planted a seed for the employer to create a student loan repayment benefit for all employees.

Making Student Loan Repayment a Priority

Whether or not you can find jobs that pay off student loans, you can still make it a priority to eliminate your student debt as quickly as possible. A student loan repayment assistance benefit can help you achieve that goal, but it can’t do it on its own.

As such, it’s essential to consider other options to save money, such as refinancing your student loans. While refinancing can be a helpful option for some borrowers, it won’t make sense for everyone, however. If federal student loans are refinanced, they’ll lose eligibility for federal programs and benefits, such as PSLF or income-driven repayment plans.

If you qualify, you may be able to reduce your interest rate or your monthly payment. With a lower interest rate you could potentially save money over the life of your loan.

The Takeaway

Many companies offer student loan repayment assistance as a part of their employee benefits package. Some jobs might also offer the opportunity for the borrower to apply for student loan forgiveness. For example, there are programs available for medical professionals, teachers, and those that work in the government or non-profit sector.

Another opportunity for managing student loans is refinancing, which could allow qualifying borrowers to lower their interest rates — making the loan more affordable in the long run. If you’re interested in refinancing, consider the options available at SoFi.

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

FAQ

What careers pay off student loans fastest?

High-paying jobs may help borrowers repay their student loans quickly. However, some jobs may allow borrowers to pursue a loan forgiveness program. While these programs may not expedite the repayment process, they could help make student loan repayment more manageable.

What companies pay off student loans?

Companies including SoFi, Fidelity, Penguin Random House, and Nvidia all offer student loan repayment assistance programs. Specific benefits vary by company.

What kind of jobs qualify for student loan forgiveness?

The type of job that qualifies for student loan forgiveness may vary depending on the program. Jobs in the government or non-profit sector may qualify a borrower for Public Service Loan Forgiveness. Teachers may qualify for Teacher Student Loan Forgiveness programs. Some medical professionals may qualify for programs such as the National Health Service Corps Loan Repayment Program.

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.

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.

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

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

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.

SOSLR-Q325-005

Jul

2025

Bankruptcy and Student Loans: What You Should Know

Bankruptcy and Student Loans, Explained

By Maureen Shelly | Debt Payoff, Student Loans, student_loan | No Comments

If your bills are piling up, you might be considering bankruptcy. But can you declare bankruptcy on student loans?

While it has been technically possible for bankruptcy to clear student loans, it was difficult and rare. But in 2022, a streamlined process was created for borrowers with “undue hardship” which allows debtors to navigate the bankruptcy application system easier than previous years.

Read on to learn about the key requirements to have student loans released in bankruptcy.

Table of Contents

What Is Student Loan Bankruptcy?
Changes to the Student Loan Bankruptcy Process
Understanding Bankruptcy
Filing Bankruptcy on Student Loans
Alternatives to Declaring Bankruptcy
Is Refinancing an Option?
Starting the Bankruptcy Process
FAQ

Key Points

• A new process introduced in 2022 simplifies proving undue hardship for student loan discharge in bankruptcy.

• Borrowers must show inability to pay, good faith efforts to earn income and manage expenses, and a situation unlikely to improve.

• Chapter 7 cancels all debt, and borrowers must have a limited income in order to qualify.

• Chapter 13 reorganizes and lowers debt with a flexible repayment plan.

• Bankruptcy can harm credit scores, complicating future financial transactions and incurring costs.

What Is Student Loan Bankruptcy?

There is no targeted “student loan bankruptcy” process, but borrowers sometimes use the term when referring to being released from student loans after filing for bankruptcy. Although it’s possible to be absolved of student loan debt this way, the process has been complex and bankruptcy has serious consequences for your financial future.

If you’re still considering student loan bankruptcy, read on to find out when you can and can’t discharge student loans through bankruptcy, different types of bankruptcy, and the requirements needed to prove “undue hardship.”

Don’t miss our comprehensive Student Loan Forgiveness Guide.

When Can Student Loans Be Discharged Through Bankruptcy?

In bankruptcy, “discharge” is the legal term for clearing or releasing your debts. Student loan discharge requires that the debtor prove to the court that they will suffer from “undue hardship” if forced to repay. Until now, the burden of proof was typically greater for federal student loans than private loans.

The specific qualifications of undue hardship vary by state, but may include:

• You have become physically or mentally disabled.

• You have dependents that you support.

• You have a disabled dependent — such as a spouse or child — who requires 24-hour care.

• You are under- or unemployed, and can show a “foreclosure of job prospects” in your industry.

• You have made a good-faith effort to repay your loans over time.

• You have previously attempted to address your student loans through deferment or other protections.

• Your disposable income is not used for nonessential purchases, such as restaurant meals, brand-name clothes, and vacations.

• Your situation is unlikely to improve in the future.

When Can’t Student Loans Be Discharged Through Bankruptcy?

Historically, it has been extremely difficult to get out of federal student loans through bankruptcy. If that kind of legal loophole existed, the argument went, there would be nothing to stop people from completing college or grad school and then immediately declaring bankruptcy.

However, it will be almost impossible when:

• The debtor cannot prove any undue hardship.

• The individual’s only debt is student loans. (In fact, you won’t even be allowed to file for bankruptcy.)

• Someone is a recent grad. Not enough time may have elapsed to prove a history of hardship and a good-faith effort to repay loans.

💡 Quick Tip: Enjoy no hidden fees and special member benefits when you refinance student loans with SoFi.

Changes to the Student Loan Bankruptcy Process

In November 2022, the Department of Justice announced changes to the way student loans are handled in bankruptcy court. Under the new process, debtors complete a 15-page attestation form confirming that they meet the definition of undue hardship. The bankruptcy judge, under guidance from the Justice Department and Department of Education, will assess the request and make a decision to fully or partially discharge the debt.

Recommendations are guided by a new set of clearer, fairer, and more practical standards for “undue hardship”:

• Present ability to pay. Meaning the debtor’s expenses equal or exceed their income.

• Future ability to pay. Based on retirement age, disability or chronic injury, protracted unemployment, or similar facts.

• Good faith efforts. Referring to the debtor’s reasonable efforts to earn income, manage expenses, and repay their loan.

Debtors are no longer disqualified based on not enrolling in income-driven repayment.

Understanding Bankruptcy

Bankruptcy is a way of clearing your debts through the court system. Before granting bankruptcy, the court will sort through an individual’s assets and determine which debts to forgive. Some debts are more difficult to discharge than others, such as taxes, alimony, child support, criminal fines — and student loans.

People looking to discharge student loans are required to file either Chapter 7 or Chapter 13 bankruptcy before taking additional steps. If you file for bankruptcy but lose your student loan case, the rest of the bankruptcy will stand — you can’t undo it.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy, sometimes referred to as liquidation bankruptcy, is generally filed as a last resort. In this process, assets of the person filing for bankruptcy are “liquidated,” or sold, by the bankruptcy trustee. Some property is exempt — such as a primary residence and vehicle — but everything else will be unloaded. Generally, people who consider Chapter 7 are those with minimal assets and a lower income.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy is sometimes referred to as a “wage earner’s plan.” In this case, people filing bankruptcy can create a repayment plan to pay off their debts. Depending on someone’s financial situation, repayment may take place over three or five years.

Chapter 13 bankruptcy is more suited to individuals with valuable assets or who are earning considerable income. In order to file Chapter 13, total secured and unsecured debts must be $2,750,000 or less.

See the table for the main differences between Chapter 7 and Chapter 13 at a glance.

	Chapter 7	Chapter 13
Timeframe	Several months	3 to 5 years
Cost	Court filing fees, lawyer fees, plus assets given up	Court filing fees, lawyer fees, plus assets given up
Income requirement	Must be below the state median	Must have enough disposable income to pay down debts over 5 years
Credit consequences	Negative impact on credit report for 10 years	Negative impact on credit report for 7 years after discharge
Benefits	The court wipes select debts. Collections stopped.	Upon completion of payment plan, remaining balance may be discharged. Foreclosure and collections stopped.

Private Student Loans and Bankruptcy

In the few cases when a court approved the discharge of student loans, they were likely to be private student loans. Private loans do not have the same protections as federal loans in cases of financial hardship, and so borrowers were more inclined to file for bankruptcy. However, a borrower must file a kind of sub-lawsuit to have their student loan documents reviewed by the court.

If you have private student loans, you may be interested in this look at private student loan forgiveness options.

Federal Student Loans and Bankruptcy

Up to now, federal student loans were especially hard to discharge through bankruptcy. Even if you made it that far, the burden of proof was greater for federal student loans than private loans. The new process described above is meant to remedy this situation.

Federal student loans do come with built-in protections for struggling borrowers, like deferment, forbearance, and income-driven repayment plans. These options can provide relief to borrowers experiencing temporary financial setbacks. See below for details on these programs.

You might also be interested in this deep dive into the differences between federal vs. private student loans.

Filing Bankruptcy on Student Loans

While bankruptcy can provide some relief to individuals who are overwhelmed by immense debts, it also has serious consequences. Bankruptcy is generally a last resort and can have lasting impact on an individual’s credit score.

A low credit score can make it almost impossible to qualify for credit cards, a mortgage, or a car loan. It can also lower the chances of qualifying for a rental apartment and utilities.

To have a shot at a student loan bankruptcy discharge, an individual must first file for bankruptcy. They must then initiate a separate court filing, known as an “adversary proceeding.” This is essentially a request that the court find that repaying the student loans is an undue hardship to both the individual and their dependents.

Here is a brief overview of the process and its challenges:

Cost of Filing for Bankruptcy

The first step is to file for bankruptcy — likely Chapter 7. The cost of filing is fixed at $338, but the cost of an attorney varies depending on where you live, the attorney’s reputation and experience, and the complexity of your case.

The average cost of an attorney in Chapter 7 bankruptcy is about $2,400. Because of the complexity and challenges of getting student loan debt discharged, it’s recommended that you retain a student loan attorney to help you through the process.

If you are filing Chapter 13, the filing fee is $313, and the average attorney fee is $2,500 to 3,500.

Adversary Proceedings

While your bankruptcy case is still open, you’ll need to file a separate but related complaint, which will begin an additional lawsuit known as an “adversary proceeding,” or AP. The court will review the complaint and the circumstances of your undue hardship and make a decision.

There is a $350 AP filing fee, which may be waived in bankruptcy cases.

Undue Hardship

The last step is to prove in your AP lawsuit that repaying your student loans have and will continue to cause undue hardship. While this may feel like an accurate assessment of your situation, proving undue hardship means meeting the specific standards described above.

In the event that the court finds in your favor, there are a few different things that can happen:

• The loans might be fully discharged. This means that the borrower will not need to make any more loan payments. All activity from collections agencies will stop too.

• The loans may be partially discharged. In this case, the borrower will still be required to repay the portion of the debt that is not discharged.

• The loan terms may change. The borrower will still be required to repay the debt, but there will be new terms on the loan, such as a lower interest rate.

Alternatives to Declaring Bankruptcy

Fortunately, there are alternative options to declaring bankruptcy. To help you decide which path to take, you may want to consult with a credit counseling agency or a student loan attorney who can provide more personalized advice.

Note that some of the options below apply to either federal student loans or private student loans, but not both.

Student Loan Deferment and Forbearance

For short-term solutions for federal student loans, consider student loan deferment or forbearance. These options allow borrowers to temporarily pause their loan payments. Unlike declaring bankruptcy, federal student loans in deferment or forbearance generally don’t have a negative effect on your credit.

Income-Driven Repayment Plans

Another option for federal student loans is switching to an income-driven repayment plan, which ties your monthly payments to your discretionary income. If your income is low enough to meet the thresholds for these plans, this could bring payments down significantly — even to $0 — though interest will still continue to accrue.

Special Circumstances

In some cases, someone may qualify for automatic or administrative discharge of their federal student loans. In this case, the borrower isn’t required to appear in bankruptcy court.

Some circumstances that might necessitate an administrative discharge include:

• If the borrower is “totally and permanently disabled.”

• Death of the borrower.

• If the school closed while the borrower was enrolled or shortly thereafter.

• If the borrower was the victim of identity theft, and the loans are not really theirs.

• If the borrower withdrew and the school failed to properly reimburse their tuition.

• If the borrower was misled by the school — about certification, job prospects, etc.

Negotiating With Your Lender

Private student loan lenders may offer temporary assistance programs that can help borrowers who are struggling to make payments on a short-term basis.

It may also be worth negotiating: You may want to contact the loan servicer or lender and ask for additional repayment options. In general, servicers or lenders would rather receive a smaller sum of money from you than nothing, so it’s typically in their best interest to work with you.

Is Refinancing an Option?

If you’re looking for a long-term solution, refinancing your student loans may be worth looking into. Refinancing your student loans means transferring the debt to another lender, with new terms and new (ideally lower) interest rates.

Some borrowers may be able to qualify for a lower interest rate than the federal rate depending on their financial standing. But keep in mind that when federal student loans are refinanced, they lose eligibility for federal student loan borrower protections — like the deferment, forbearance, and income-driven repayment plans mentioned above.

If you’re looking to refinance, make sure you do your research and see if you can find competitive rates with a lender you trust.

Starting the Bankruptcy Process

If you are struggling with your student loan payments, they may be the least of your problems next to high-interest credit card debt. Your first step is to consult a debt counselor or financial advisor, who can lay out all your options. If they agree that bankruptcy is your best, or only, path forward, it’s time to find a bankruptcy attorney who has experience with student loans.

The Takeaway

Changes to the student loan bankruptcy process has streamlined the process, making it easier to navigate. However, declaring student loan bankruptcy is still fairly complex. In addition bankruptcy can be expensive and negatively impact your credit report for years.

Aside from bankruptcy, federal student loan borrowers who are struggling with their monthly payments may want to consider deferment, forbearance, or an income-driven repayment plan. And in some cases, refinancing may make sense. Getting a lower interest rate can lower your monthly payments. Just remember, when you refinance federal loans, you lose access to federal protections and benefits.

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

FAQ

Can you declare bankruptcy on student loans?

Historically, it was only in rare circumstances that someone could have their federal student loans discharged in bankruptcy. But a new streamlined process helps identify appropriate cases and support discharge. The aim is to help borrowers who meet the requirements for discharge but did not know it.

What happens if you file for bankruptcy on student loans?

As part of the new process, you will fill out an attestation form that the Department of Justice will use to determine if it will recommend that your debt or part of your debt be discharged. It’s ultimately up to the bankruptcy judge, but a recommendation from Department of Justice attorneys can go a long way.

Can private loans be discharged through bankruptcy?

Private student loans may be discharged through a complex process that starts with filing for bankruptcy. Your best bet is to contact a debt counselor or student loan attorney who can assess your situation and determine your odds of success.

How are Chapter 7 and 13 different for student loans?

Chapter 7 bankruptcy is generally for people with few assets and low incomes and it typically cancels all of a borrower’s debt. Filing Chapter 13 can help a borrower preserve their assets. It typically helps them reorganize and lower their debt. With Chapter 13, they mnay end up paying off their student loans on a more flexible schedule that can help them catch up.

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.

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.

This article is not intended to be legal advice. Please consult an attorney for advice.

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

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.

SOSLR-Q325-011

Jul

2025

How to Ask Someone to Cosign a Student Loan

By Kevin Brouillard | Student Loans, student_loan | Comments Off

Many students take out loans to pay for college. While federal student loans don’t require a credit check, private student loans typically do. And, since students often don’t have much credit history, they typically require a cosigner. A cosigner can be a parent, other family members, friends, or even mentors.

Since a cosigner will be responsible for paying back your loan in the event you’re unable to, it’s important to choose someone you feel comfortable entering a financial agreement with. A cosigner with good credit and high income could result in lower interest rates on your loans.

Read on for a simple, step-by-step guide on how to get someone to cosign your student loan.

Table of Contents

How to Ask Someone to Cosign Your Private Student Loan
Handling Potential Concerns and Objections
Formalizing the Cosigner Agreement
Repaying the Loan Responsibly
FAQ

Key Points

• Before asking someone to cosign, make sure they understand the significant financial responsibility they are taking on. A cosigner is equally liable for the loan and their credit score can be affected if payments are missed.

• Select a cosigner who has a strong credit history and a stable income. This increases the likelihood of loan approval and can help secure a lower interest rate.

• Clearly explain why you need a cosigner and how you plan to manage the loan. Provide a detailed budget and a repayment plan to show your commitment and financial responsibility.

• Highlight the benefits of cosigning, such as helping you build credit and gain access to better loan terms. Emphasize that their support can significantly impact your educational and financial future.

• Look for lenders that offer cosigner release options after a certain number of on-time payments. This can provide a way for the cosigner to be removed from the loan, reducing their long-term financial burden.

How to Ask Someone to Cosign Your Private Student Loan

You may have someone in mind who would make a good student loan cosigner. The problem is, how do you ask someone to cosign a loan? It’s a big ask, and approaching the topic can be intimidating.

What follows are some tips that can help ensure you come to the conversation prepared.

1. Research Your Financial Aid Options First

Before you ask someone to cosign a private student loan, it’s a good idea to explore all of your college funding options. Around 85% of students receive some form of financial aid to pay for college.

Filling out the Free Application for Federal Student Aid, or FAFSA®, will give you access to any federal student aid you may be eligible to receive. This might include grants, work-study, federal subsidized loans, federal unsubsidized student loans, and even private scholarships. Completing the FAFSA is free, and it’ll also show potential cosigners that you’ve done your due diligence and have tapped all your available options to pay for college before asking for help.

2. Explain Why You Need a Cosigner

Once you’ve decided who you want to ask to be your cosigner, it’s important to come to the table with a clear explanation of why you need a cosigner and what costs the loan will cover. You’ll want to be prepared to share details on your own savings, debts, and credit history. This shows a cosigner why you need help and what kind of risk they would be taking on.

Providing a clear picture of what you have and what you need demonstrates that you’re taking your education and financial goals seriously. Having followed tip #1, you’ll be in a position to show the funding gap between your own funds plus any aid you’ve received and the cost of attendance at your chosen college.

3. Outline Your Plan for Repaying the Loan

When asking someone to cosign a student loan, it’s a good idea to let them know that you have a plan for repayment and exactly what that plan is. Some private lenders allow you to defer making payments until after graduation, while others require you start making interest-only payments while still in school. Either way, you’ll want to have an idea for how you will make those payments on your own.

Failing to make payments on time each month will impact both you and your cosigner, so it’s a good idea to also make a backup plan in case something doesn’t work out. This might be getting a part-time job in any field if you find that it takes longer than expected to get hired in your chosen field.

Demonstrating your plan for repayment can help build your potential cosigner’s confidence and help them feel more comfortable about entering into a cosigner agreement with you.

4. Make Sure They Understand What They’re Agreeing To

Before moving forward to a written agreement, it’s a good idea to go over the requirements and responsibilities for being a cosigner. For starters, your cosigner must meet a minimum credit score and demonstrate a certain minimum monthly income. The exact requirements will depend on the lender.

You’ll also want to let them know that, as a cosigner, they have a legal obligation to make sure the loan is repaid, and that any late or missed payments on the loan can impact both your and their credit scores.

While these risks can feel intimidating to bring up, outlining your plan to avoid loan default can help address their concerns and show you’re taking the commitment seriously.

5. Make a Plan for a Cosigner Release

A cosigner release effectively removes a cosigner from a loan, freeing them from any continued responsibility for repayment of your loan. Private lenders may offer the option for a cosigner release if you, at a certain point down the road, meet certain credit requirements and have a strong track record of on-time payments.

Discussing a plan or timeline for when your cosigner will be released from their responsibilities shows that you’re being considerate of the risks of being a cosigner and the impact it can have on their finances. While you may not have the strongest qualifications as a borrower today, your creditworthiness can build over time as you consistently make on-time loan payments.

You might also have the option of refinancing your student loan and, in the process, releasing your cosigner from the original loan agreement.

6. Give Them Time to Think

Cosigning a loan is a serious commitment and whomever you ask may need some time to think over the decision. For this reason, it’s a good idea to approach your potential cosigner early on so you have plenty of time to talk through the agreement and, if necessary, pursue another option.

Handling Potential Concerns and Objections

Cosigners will likely have questions and potential concerns about how the agreement could impact their finances, as well as your relationship. After you’ve made your pitch, it’s important to hear them out and be open to their input to reach an agreement that works for you both.

If a cosigner has objections that you can’t resolve, it may be time to seek out a different cosigner.

Formalizing the Cosigner Agreement

If the person you ask to cosign your loan says “yes,” it’s time to find the right private student loan for your needs. It’s generally a good idea to shop around and compare rates and terms from different lenders, including banks, credit unions, and online lenders. Some lenders allow you to prequalify for a student loan online, without impacting your (or your cosigner’s) credit score. This allows you to compare offers, go over rates and terms with your cosigner, and decide which loan is the best fit.

When you officially apply for the loan, you and your cosigner will need to provide a number of financial documents to the lender, so be sure to give your cosigner time to gather all their paperwork.

Repaying the Loan Responsibly

When you take out a private student loan, you’ll typically have a choice of several repayment plans. Which one you choose can have a significant impact on both your monthly payment and total cost of the loan. Options may include:

• Immediate repayment: This means you make full monthly payments while still in school. Doing so will minimize the interest you pay, resulting in the greatest savings.

• Interest-only repayment: Here, you’ll pay only the interest on your loan while you’re still in school. Payments will be lower than immediate repayment, but you won’t chip away at your loan balance (or save as much on interest).

• Partial interest repayment: This involves making a fixed monthly payment while still in school that only covers part of the interest you owe. Payments will be lower than interest-only plans, but your loan balance will grow.

• Full deferment: Here, you’ll pay nothing while you’re enrolled in school. During this time, though, your loan balance grows.

Once you choose a plan, you’ll want to create a budget for the minimum payment you owe each month. It’s also a good idea to enroll in autopay, to ensure you never miss a payment. Some lenders also offer a rate discount if you enroll in autopay.

After you’ve graduated and your finances allow, you may be able to make extra principal-only payments — this can help lower the total interest you pay over the life of the loan.

The Takeaway

If you need a cosigner on your student loan, you have options. Whether you choose a parent, other family member, friend, or mentor, it’s important to be transparent about the requirements and risks that go into being a cosigner.

Coming to the conversation prepared can build trust and confidence with potential cosigners and put you on the path to funding your education.

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

How do you convince someone to cosign a loan?

You’ll want to be transparent, as well as fully prepared for the conversation. Explain how the loan will support your long-term educational and financial goals, how you plan to make future loan repayments, and why you are a trustworthy borrower.

Who can I ask to be my cosigner?

It’s common for students to use parents or family members as cosigners, but there are no rules stating that your cosigner must be a relative. You can also ask mentors or family friends who are invested in your success. Just keep in mind that a cosigner will need to meet the lender’s financial and credit requirements.

Can I hire someone to be a cosigner?

There are businesses that advertise online that they will cosign your student loans for a fee, but borrower beware. These are often scams in which the “cosigner” requests cash payment in advance, then disappears. Or, the business might be legitimate but will require you to give them a portion of the loan in exchange for cosigning. Generally, it’s not worth the risk or cost.

What percentage of student loans are cosigned?

Roughly 91% of undergraduate private loans are cosigned. About 43% of graduate school loans from private lenders require a cosigner.

How do I assess my creditworthiness before seeking a cosigner?

To assess your creditworthiness, you’ll want to check your credit score and take a look at your credit reports.

You can often access your credit score for free through your bank or credit card company (check your statements on log into your online account). You can access your credit reports from the three main consumer credit bureaus (Equifax®, Experian®, and TransUnion®) for free at AnnualCreditReport.com.

Photo credit: iStock/NoSystem images

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student loans are not a substitute for federal loans, grants, and work-study programs. We encourage you to evaluate all your federal student aid options before you consider any private loans, including ours. Read our FAQs.

Terms and conditions apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. SoFi Private Student loans are subject to program terms and restrictions, such as completion of a loan application and self-certification form, verification of application information, the student's at least half-time enrollment in a degree program at a SoFi-participating school, and, if applicable, a co-signer. In addition, borrowers must be U.S. citizens or other eligible status, be residing in the U.S., Puerto Rico, U.S. Virgin Islands, or American Samoa, and must meet SoFi’s underwriting requirements, including verification of sufficient income to support your ability to repay. Minimum loan amount is $1,000. See SoFi.com/eligibility for more information. Lowest rates reserved for the most creditworthy borrowers. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change. This information is current as of 4/22/2025 and is subject to change. SoFi Private Student loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

SOISL-Q325-018

Guide to Military Student Loan Forgiveness

Does the Military Pay Off Your Student Loans?

Military College Loan Repayment Program

Army Student Loan Repayment: Active Duty

Army Reserve College Loan Repayment Program

Refi now to pay off loans & reach your goals faster with a shorter term.

National Guard Student Loan Repayment Program

Navy Student Loan Repayment Program

Coast Guard Loan Repayment Program

Health Professions Student Loan Repayment Program

Prior Service Soldier Loan Repayment Program

Air Force Judge Advocate General’s Corps Loan Repayment Program

Other Loan Forgiveness Programs for Military Personnel

National Defense Student Loan Discharge

Veterans Total and Permanent Disability Discharge (TPD)

Public Service Loan Forgiveness

Other Student Loan Benefits for People in the Military

Interest Rate Cap

Interest Waiver for Those at Dangerous Posts

The Takeaway

FAQ

Does the VA forgive student loans?

How much student loan debt will the military pay?

Do 100% disabled veterans pay student loans?

A Guide to Student Loan Settlements

What Is a Student Loan Settlement?

Federal Student Loan Settlement

Settling Private Student Loans

Alternatives to Student Loan Settlements

1. Income-driven repayment plans (IDR)

2. Student loan forgiveness programs

3. Discharging a loan

Student Loan Refinancing

The Takeaway

FAQ

Can you negotiate a settlement on student loans?

How is the student loan settlement figure calculated?

Is it possible to negotiate a lump-sum payoff of student loans?

Finding Jobs That Pay Off Student Loans

Types of Job-Based Student Loan Assistance Programs

Repayment Assistance Programs

Repayment Assistance Benefits

Types of Jobs That Offer Student Loan Forgiveness

1. Federal Agency Employee

2. Public Service Worker

3. Medical Field

4. Automotive Professionals

5. Lawyer

6. Teacher

7. Peace Corps

8. Veterinarian

15 Major Companies that Repay Student Loans

1. Abbott Laboratories

2. Aetna

3. Ally Financial

4. Chegg

5. Estee Lauder

6. Fidelity

7. Google

8. Hulu

9. Live Nation

10. New York Life

11. Nvidia

12. Penguin Random House

13. PricewaterhouseCoopers (PwC)

14. SoFi

15. Staples

How Is Student Loan Assistance Taxed?

Negotiating a Student Loan Repayment Benefit

Doing Your Research

Making Your Interests Clear

Asking for a Signing Bonus Instead of Monthly Payments

Asking for the Opportunity to Revisit the Request in the Future

Making Student Loan Repayment a Priority

The Takeaway

FAQ

What careers pay off student loans fastest?

What companies pay off student loans?

What kind of jobs qualify for student loan forgiveness?

Bankruptcy and Student Loans, Explained

Refi now to pay off loans &
reach your goals faster with a shorter term.

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