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One of the biggest student loan myths out there is that borrowers can’t combine federal student loans and private student loans into one refinanced loan.

It’s understandable why people may think that, since this wasn’t always an option. And consolidation through the Department of Education is only available for federal student loans.

But now you can choose to combine federal and private loans. So it’s important to understand whether combining federal student loans and private student loans is right for you.

Can I Consolidate Federal and Private Student Loans?

Yes, you can combine private and federal student loans by refinancing them with a private lender.

Through this process, you actually apply for a new loan (which is used to pay off your original loans) and obtain one with a new — ideally lower — interest rate.

Why would you want to do this? In addition to the advantages of loan consolidation (like having one, simplified monthly payment), refinancing student loans at a lower interest rate may lead to lower monthly payments. Note: You may pay more interest over the life of the loan if you refinance with an extended term.

Before you refinance federal student loans, there are a couple of things to think about. Here’s an easy decision tree to help you understand whether private student loan consolidation and refinancing federal loans is right for you:

Federal Student Loan Interest Rates

Some people assume that federal loans always offer the best rates, but this isn’t necessarily true.

Depending on loan type and disbursement date, new federal student loan interest rates are reassessed annually, every July. For the 2023-2024 school year, interest rates on new federal student loans range from 5.50% to 8.05% . Interest rates on federal student loans are determined by Congress and are fixed for the life of the loan.

Some borrowers — particularly those with established credit and a strong, stable income or who can find a cosigner with similar qualities — may be able to qualify for a private student loan with a rate lower than a federal loan. For example, grad school borrowers who have higher-interest-rate unsubsidized federal Direct Loans and borrowers with federal Direct PLUS loans may also be able to qualify for a private loan with a lower interest rate than those federal loans. Undergraduates are likely to find lower rates with federal student loans — without a cosigner or credit check.

When you apply to refinance, private lenders evaluate things like your credit history and credit score, in addition to other personal financial factors, in order to determine the interest rate and terms you may qualify for. This applies when you consolidate private student loans as well.

This means if you’ve been able to build credit during your time as a student, or your income has significantly improved, you may be able to qualify for a more competitive interest rate with a private lender when you refinance. (If you aren’t interested in or don’t qualify for student loan refinancing, a Direct Consolidation
Loan from the Department of Education might be worth a look — but you can’t combine federal and private loans into a Direct Consolidation Loan.) Private student loan consolidation is a different matter.

To get an idea of how much refinancing could potentially reduce the cost of interest on your loans, take a look at SoFi’s student loan refinancing calculator.

Federal Student Loan Benefits

When you refinance a federal student loan with a private lender, it becomes a private student loan. This means that the loan will no longer be eligible for federal benefits and protections.

Before you contemplate the idea of refinancing, consider taking a look at your loans to see if any of these federal loan benefits and programs apply to you — or whether you might want to take advantage of them in the future. Here are some to consider:

Student Loan Forgiveness

There are a few forgiveness programs available for borrowers with federal student loans. For example, under the Public Service Loan Forgiveness Program (PSLF), your Direct Loan balance may be eligible for forgiveness after 120 qualifying, on-time payments if you’ve worked for an eligible public sector entity that entire time.

Pursuing PSLF can require close attention to detail to ensure your loan payments and employer qualify for the program. The qualification requirements are clearly stated on the PSLF section of the Federal Student Aid website .

Similarly, the Teacher Loan Forgiveness Program is available for teachers who work in eligible schools that serve low-income families full time for five consecutive years. The total amount forgiven will depend on factors like the eligible borrower’s role and the subject they teach. The Federal Student Aid website has all the details of this program.

These forgiveness programs can be beneficial for people who choose careers in public service or education.

Income-Driven Repayment Plans

There are also a number of federal loan repayment plans that can ease the burden for eligible borrowers who feel their loan payments are higher than they can afford.

Under the student loan repayment plans and the other income-driven repayment options, monthly payments are calculated based on a certain percentage of the borrower’s discretionary income.

President Joe Biden’s Save on a Valuable Education (SAVE) Plan provides the lowest monthly payments of any IDR plan available to nearly all student borrowers.

But if your income is over a certain threshold, you likely won’t benefit from these programs.

And if you do qualify but you’re at the high end of the spectrum, your slightly lowered payments may come at a disproportionate price in the form of accumulating interest. Although the Department of Education says that if you make your monthly payment under the SAVE plan, your loan balance won’t grow due to unpaid interest.

Deferment or Forbearance

Life can be unpredictable — sometimes that means borrowers might have difficulty making payments on their student loans. When this happens, borrowers with federal student loans may qualify for deferment or forbearance.

President Biden proposed a federal student loan debt canceling of up to $20,000 for qualified loan holders but it was struck down by the Supreme Court in a ruling released in late June 2023.

The three-year-long pause on federal student loan payments due to Covid-19 lockdowns ends in the Fall of 2023. Student loan interest will resume starting on Sept. 1, 2023, and payments will be due starting in October.

For borrowers who can’t make payments, the DOE created a temporary on-ramp period through Sept. 30, 2024. This on-ramp period protects borrowers from having a delinquency reported to credit reporting agencies. And it prevents the worst consequences of missed, late, or partial payments.However, payments are still due, and interest will continue to accrue.

Also, there are ongoing deferment and forbearance options that allow borrowers to temporarily pause payments on their federal student loans in the event of economic hardship.

The biggest difference between the two is that with forbearance, the borrower is responsible for paying the interest that accrues on the loan during this time. Forbearance can have a major financial impact on a borrower, as any unpaid interest will be added to the original loan balance. With deferment, the borrower may or may not be responsible for paying the interest that accrues.

The type of loan you hold will determine whether or not you qualify for deferment or forbearance. Both options can be potentially helpful tools to borrowers going through a short period of financial difficulty, but both have important considerations .

Refinancing 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.

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.

The Debt Ceiling Bill signed into law in June 2023 finally brought an end to the federal student loan payment pause, with payments resuming on October 1, 2023 (and interest accrual resuming a month earlier). The result is that millions of federal student loan borrowers — at least, those not taking advantage of the student loan “on-ramp” — will need to begin making minimum payments again as of October 1. However, some borrowers may opt to make more than the student loan minimum payment so that they can expedite the repayment process on their loan.

What Is the Minimum Payment on Student Loans?

The minimum payment on student loans is the lowest amount of money a borrower can pay each month. The actual student loan minimum payment amount owed each month might be determined by factors including the loan type, interest rate, and the repayment plan. Generally, the minimum monthly payment includes the principal (the original amount borrowed), interest, and fees.

For federal student loans, the minimum monthly payment depends on the repayment plan a borrower is on, as follows:

Standard Repayment Plan: On this plan, your payments are a fixed minimum amount of at least $50 a month, and your loans are paid off within 10 years.

Saving on a Valuable Education (SAVE) Plan: With SAVE, a new income-driven repayment (IDR) plan introduced by President Biden in late June 2023, borrowers with undergraduate federal student loans will get the lowest monthly payments of any IDR plan. For those who are single and make $32,800 a year or less and for families of four who make $67,000 or less annually, the minimum monthly payment is $0 (meaning they owe no loan payment). Those who earn more than those amounts will save at least $1,000 a year on the SAVE plan compared to current IDR plans.

Pay As You Earn (PAYE) Plan: Under the PAYE plan, borrowers’ payments are 10% of their discretionary income and are also based on their family size. With PAYE, their payment could be as low as $0 per month, and they won’t owe more monthly than they would have on the Standard Repayment Plan.

Income-Based Repayment Plan: Borrowers on this plan need to have a high debt-to-income ratio in order to be eligible. Their monthly payments will be 10% to 15% of their discretionary income, and could be as low as $0. Borrowers won’t owe more monthly than they would have paid on the Standard Plan.

Income-Contingent Repayment Plan: Borrowers with Direct loans who are eligible for this plan will have monthly payments that are the lesser of 20 percent of their discretionary income or the amount they would pay on a fixed repayment plan over 12 years, adjusted for their income. Their payments may be as low as $0 a month.

Graduated Repayment Plan: With this plan, a borrower’s monthly payments are lower at first and then increase, usually every two years. The monthly amounts they will pay will be enough to repay their loans within 10 years.

Extended Repayment Plan: For those on the Extended plan, their payments may be fixed or graduated, and the amount they pay each month will be enough to ensure their loans are paid off in 25 years. Their payments will be lower on this plan than they would be on the Standard or Graduated plans.

You can use the Federal Student Aid’s Loan Simulator to help calculate how much you’ll owe and find the best repayment plan option for your situation.

Can I Pay More Than The Minimum on Student Loans?

It’s possible to make more than the minimum payment on student loans without being charged for any prepayment penalty fees. Both federal student loans and private student loans are required to allow borrowers to make extra payments and pay off their loan early without charging any additional fees.

Making extra payments can help decrease the interest paid and help reduce the overall cost of the loan. Typically, you can contact your lender to specify that the extra payment be applied to your highest interest loan and be applied to the principal value of the loan.

Making payments directly to the principal value of the loan can help speed up repayment. And, because most student loan interest is charged per day, making additional payments on the principal value of the loan can help reduce the amount you pay in interest over the life of the loan.


💡 Quick Tip: Often, the main goal of refinancing is to lower the interest rate on your student loans — federal and/or private — by taking out one loan with a new rate to replace your existing loans. Refinancing makes sense if you qualify for a lower rate and you don’t plan to use federal repayment programs or protections.

Why Would You Pay off Your Student Debt Sooner?

As with any debt, a primary motive for paying off student debt early is to more quickly remove debt that’s racking up interest. Prioritizing debt repayment could help lower your debt to income ratio and could help you reduce the amount of money you owe in interest over the life of the loan. Here are a few reasons you may want to pay off your student loans sooner rather than later.

Interest. Interest. Interest.

Interest continues to accrue for the life of most student loans. (Note: The timetable of when interest starts to accrue on your student loans depends on the type of student loans you’ve been awarded. Contact your lender for all the details.) The sooner you pay off your loans, the sooner you stop interest from accruing.

Student loan interest does qualify for a tax deduction. But only $2,500 of the interest can be deducted each year — less if your modified adjusted gross income is greater than $70,000 a year.

Your Debt-to-Income Ratio May Be Lowered

When borrowing a mortgage or a car loan, the lender will usually consider the applicant’s debt-to-income ratio. And the lower it is, the better it looks from a financial perspective. Do you need a new car? Want to buy a house? Start a family? The sooner you get your student loan debt paid off, the more money you will likely have to put toward those dreams being realized.

Your Credit Score Could Strengthen

Your FICO® credit score is a powerful component of your total financial picture; tend it like a garden, and it could grow. There’s something to be said for the fact that if you’re managing an open debt responsibly by making on-time payments, that may have a positive impact on your credit score. And a higher FICO® score can help you get a better interest rate on a loan you might need for a home or car.

It’s Easier to Save Money When You’re Not Paying Down Debt

The conventional wisdom is the less debt you have, the more money you likely have to save. Think of successfully managing and paying off debt as a necessary exercise routine, like working your core. As your financial “core” gets stronger, you’re likely to become better able to balance your finances and save more money.

When you’ve repaid your student loans, the money you were spending each month on loan payments can instead be used to help you reach financial goals like starting an emergency fund, saving for a down payment on a house, or more.


💡 Quick Tip: When refinancing a student loan, you may shorten or extend the loan term. Shortening your loan term may result in higher monthly payments but significantly less total interest paid. A longer loan term typically results in lower monthly payments but more total interest paid.

How to Accelerate Your Student Loan Payments

You may be able to pay off your student loan debt more quickly by setting reasonable goals, including payments larger than the student loan repayment minimum required. As mentioned, both federal and private student loans generally allow for penalty-free prepayment but be sure to contact your loan provider before doing so to ensure your prepayments are being applied in the way that you want them to be. Here is a checklist that may help you eliminate your student loan debt sooner.

Calculating Your Costs

Make a list or spreadsheet of all your student loans. You can use a student loan calculator to help determine how much you ultimately owe (including interest) and when, ideally, you’d like to complete your student loan payments.

Making a Budget

Track your spending and make a realistic budget of your monthly and annual expenses. And leave some wiggle room for unexpected expenditures. Be honest with yourself. If you feel you’re spending too much on unnecessary expenses, maybe it’s time to skip your next urge to splurge.

Setting Manageable Goals

Now that you know how much money you have coming in and where it’s going, it might be time to make some uncomfortable, but fair, spending decisions with the intention of eliminating your student loans by your goal date. That means you may want to sacrifice some unnecessary expenses. Cutting back on non-necessities isn’t fun, but it may make it easier for you to save.

Paying Beyond the Minimum Required

As we mentioned, you can accelerate your loan payoff by paying more than the minimum student loan payment required by your loan provider. It’s okay to start small — even an extra $25 a month can start to add up. Paying more each month can also save you money on interest. You can ask your loan provider to put that extra cash toward the principal.

Avoiding Late Fees

An easy way to help ensure you pay at the same time every month is to set up an auto-draft from your checking or savings account. Some lenders may even offer a rate discount to student loan borrowers who enroll in automatic payments.

Maximizing “Surprise” Money

Are you doing so well at work that you got a raise or bonus? Rather than splurging on something new, lighten the burden of your current reality by putting that money toward your student loan debt.

Finding Extra Work

Every little bit of extra income can help. A part-time job could get you closer to your goal more quickly. If fitting in an extra 15 or 20 scheduled hours a week isn’t feasible, try finding a side hustle where you can make your own hours. You can work as a dog walker, become a rideshare driver, or even recharge electric scooters — all through an app.

Recommended: What is the Average Student Loan Debt After College?

Refinancing Your Student Loans

Refinancing your student loans might offer yet another step closer to your goal. Student loan refinancing is when you borrow a new loan (which is used to pay off your original loans) at a new interest rate and/or a new loan term.

One potential benefit of refinancing is the possibility of securing a lower interest rate. You could also potentially shorten your loan repayment term. But opting to shorten your loan term generally means paying more each month.

If you have a combination of private and federal loans, it’s possible to roll them into a single refinanced loan, which means having one monthly payment instead of multiple payments to multiple lenders. This is what is known as loan consolidation.

However, it’s very important to understand that by refinancing your federal loans, you lose federal student loan protections such as deferment and forbearance, and access to income-driven repayment programs. Take this into very careful consideration before moving forward with student loan refinancing with a private lender.

The Takeaway

Making more than the minimum student loan payments each month can help borrowers speed up their loan repayment and spend less in interest over the life of their loan. Lenders generally do not charge any fees for prepayment. To make the most of your extra payments, contact your lender to be sure they are being made to the principal value of the loan.

Refinancing could be another option for some borrowers to consider if they are interested in securing a lower interest rate on their loan — and provided that they don’t need access to federal programs or protections.

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

FAQ

What happens if I only pay the minimum on my student loans?

Making the minimum monthly payments on your student loan will generally result in your loan being paid off according to the original terms of the loan.

Is it worth paying off student loans early?

Paying off student loans ahead of schedule can make borrowing less expensive, because the borrower will likely spend less in interest over the life of the loan. Repaying student loans early could also have benefits like improving an individual’s debt-to-income ratio. Without the burden of student loans, borrowers might also be able to focus on other financial goals.

What is the average minimum student loan payment?

A borrower’s average monthly minimum federal student loan payment depends on factors including the total amount they owe, their interest rate, and the type of payment plan they’re enrolled in. For instance, on the Standard Repayment Plan, your payments are a fixed minimum amount of at least $50 a month.

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.

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.

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

SoFi 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.

If your student loan payments seem overwhelming, you’re not alone. U.S. borrowers owe a combined $1.77 trillion in student loan debt, and one in ten Americans has defaulted on a student loan, according to the Education Data Initiative.

And now, for the first time in a long time, many student loan borrowers are faced with making payments again. The reason: The end of the three-year pause on federal student loan payments, which requires interest accrual to resume on September 1, 2023 and payments to resume on October 1, 2023. This resumption in federal student loan payments was part of the debt ceiling bill that President Biden signed into law in early June 2023.

In addition, the Supreme Court’s ruling against the President’s plan to forgive up to $20,000 in federal student loan debt means that student loan borrowers who may have been hoping for that forgiveness now don’t have that option.

You may be thinking, I haven’t paid my student loans in years – do I really have to start now? What happens if I just don’t pay?

The answer is that borrowers do indeed have to start paying their student loans again, and simply not paying can have consequences. Late or missed “delinquent” payments can make it harder to get a credit card, car loan, or apartment lease. And if you default on a loan, the balance of the loan will become immediately due, your wages may be garnished, and your tax refund can be withheld, among other serious consequences.

There are several options that can help you avoid defaulting on your student loan, such as deferment, forbearance, and income-driven repayment plans. Here’s what to know before you stop making payments on your student loans.

Do Student Loans Ever Go Away?

The short answer to the question of do student loans ever go away? is no, unless you’re part of the Public Service Loan Forgiveness Program. Unlike other forms of debt, such as home and auto loans, student loans generally cannot be discharged during bankruptcy. Borrowers are still required to repay student loans even if they don’t graduate or are struggling to find a job.

So what happens if you don’t pay student loans? In addition to the interest that accrues over time and increases in the amount you owe, failing to repay a student loan on time can result in additional fees if your debt gets moved into collections.

Because on-time payments account for a portion of a borrower’s credit score, failing to make payments can negatively impact a person’s credit score. Having a low credit score can impact your ability to get a mortgage, car loan, credit card, or apartment lease.

If you default on federal student loans, the government can take your tax refund or up to 15% of your wages. You can also be sued, though this is more common with private loans.


💡 Quick Tip: Often, the main goal of refinancing student loans is to lower the interest rate — federal and/or private — by taking out one loan with a new rate to replace your existing loans. Refinancing makes sense if you qualify for a lower rate and you don’t plan to use federal repayment programs or protections.

Is There a Student Loan Statute of Limitations?

There is no statute of limitations for federal student loans. That means you can be sued at any point for not paying your loans.

There is a statute of limitations for private student loans, which is set by individual states and generally ranges from three to 10 years. But even this limit just means the lender can’t sue you anymore — it doesn’t mean the loan goes away or they stop trying to collect what is owed.

Is Getting Out of Paying Student Loans Possible?

There are options that allow borrowers to temporarily stop making student loan payments. Here’s what happens if you don’t pay your student loans because you’ve been approved for one of these plans.

Relief for Federal Student Loans

If you have federal student loans, the end of the federal payment pause requires payments to resume on October 1, 2023. To help borrowers, the Department of Education is launching a 12-month “on-ramp” to repayment, running from October 1, 2023 to September 30, 2024, so that financially vulnerable borrowers who miss monthly payments during this period are not considered delinquent, reported to credit bureaus, placed in default, or referred to debt collection agencies.

Federal student loan borrowers can also temporarily pause payments by requesting a deferment or forbearance. You might qualify if you’re still in school at least part-time, unable to find a full-time job, facing high medical expenses, or dealing with another financial hardship. The type of loan held by the borrower will determine whether they can apply for a deferment or forbearance.

Federal student loans can be deferred for up to three years. There are two types of forbearance; general and mandatory. Borrowers facing financial difficulties can request a general forbearance, and their loan servicer determines whether they qualify. General forbearance is awarded in 12-month increments and can be extended for a total of three years.

You can temporarily pause payments on your federal loans by requesting a deferment or forbearance.

Loan servicers are required to award qualifying borrowers a mandatory forbearance. Qualifications include participating in AmeriCorps, National Guard duty, or medical or dental residency. The Federal Student Aid website has a full list of criteria for mandatory forbearance. Mandatory forbearances are also granted in 12-month increments but can be extended so long as the borrower still meets the criteria to qualify for mandatory forbearance.

Borrowers who enroll in an income-based repayment plan can qualify to have their loan balance forgiven after a certain amount of time; the amount of time depends on the plan. (Keep in mind, you’d still have to pay taxes on the amount forgiven.)

For instance, under President Biden’s new SAVE Plan, which is based on income and family size, qualifying federal student loan borrowers with undergraduate federal loans can get their monthly payments reduced by half — from 10% to 5% of their discretionary income.

In rare cases, certain loans can be canceled or discharged, if your school closes while you’re enrolled or you are permanently disabled. For obvious reasons, these aren’t options to count on, so you can assume your loans will be sticking with you.


💡 Quick Tip: When rates are low, refinancing student loans could make a lot of sense. How much could you save? Find out using our student loan refi calculator.

Consequences of Defaulting on Your Student Loans

As mentioned earlier, what happens when you stop paying student loans is that the loan is at risk of going into default. The national default rate was 2.3% for fiscal year 2019 (the most recent year for which numbers are available), according to the U.S. Department of Education. (Because of the pause on federal student loans payments during the pandemic, the default rate dropped significantly from 7.3% in 2018.)

There are serious financial repercussions for defaulting on a student loan.

For federal student loans, if a borrower fails to make payments for more than 270 days on a loan from the William D. Ford Federal Direct Loan Program or the Federal Family Education Loan Program, the loan will go into default. (For loans made under the Federal Perkins Loan Program, the loan can be declared in default after the first missed payment.)

At this point, the balance of your loan becomes due immediately through a process called “acceleration.” You’ll also lose eligibility for federal programs such as deferment, forbearance, income-driven repayment plays, and additional federal aid.

Recommended: Student Loan Refinancing Guide

Your wages may be garnished (meaning that your employer may be required to hold back a portion of your paycheck) and any tax refunds or federal benefit payments may be withheld.

Defaulting on a student loan will damage your credit rating and you may not be able to buy or sell certain assets, such as real estate. If your loan holder sues you, you may also be charged related expenses such as attorney fees.

Temporary Relief for Private Student Loans

Private lenders sometimes offer relief like forbearance when you’re dealing with financial hardship, but they aren’t required to. If you have a private student loan, check with your lender directly to see what temporary relief programs or policies they may have.

Private student loans generally go into default after 90 days. Private lenders may also take you to court or use collection agencies to collect your student loan debt. Whether you have federal or private student loans, contact your loan servicer immediately if your loan is delinquent so you can understand what options are available to you before your loan goes into default.

Recommended: Should You Refinance Your Student Loans?

The Takeaway

Because student loans don’t disappear, it’s important to stay on top of payments, especially with federal student loan payments resuming on October 1, 2023. Borrowers with federal student loans may be able to take advantage of the Department of Education’s 12-month on-ramp to repayment until September 30, 2024. Or they might qualify for deferment, forbearance, or income-based repayment options which can provide some temporary relief or help make monthly payments more manageable.

Options available for borrowers facing financial hardships with private student loans vary by lender.

For some borrowers, student loan refinancing may be a way to lower interest rates, reduce monthly payments, and combine all your loans into a single monthly payment. Reducing monthly student loan payments by extending the life of the loan may result in more interest over the life of the loan. If you qualify for a lower interest rate, you could save money over the life of the loan.

It’s also possible to refinance both federal or private loans, or a combination of the two. However, it’s very important to understand that if you refinance federal loans, you’ll lose access to federal benefits and protections, including deferment, forbearance, income-driven repayment, and loan forgiveness for public service, so it’s not recommended for borrowers who are planning to take advantage of those programs.

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.

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.

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.

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.

Dealing with substantial student loan debt can be overwhelming, especially if you find yourself struggling to make your payments.

Fortunately, there are some options that may help minimize the amount of money you pay back on your federal student loans, such as the Income-Driven Repayment (IDR) and Public Service Loan Forgiveness (PSLF) programs.

When trying to figure out how to get rid of student loans, it’s important to understand that you might be able to reduce your monthly payment with a student loan refinance. Or you may be able to temporarily postpone your federal loan payments through deferment or forbearance.

Options to Get Out of Repaying Student Loans Legally

1. Loan Forgiveness Programs

Depending on your eligibility, there are a few different federal loan forgiveness programs available to borrowers with federal student loans. These programs could help you get out of paying a portion of student loan debt as they forgive your loan balance after a certain number of years.

President Joe Biden proposed a federal student loan debt cancellation of up to $20,000 for those who met household income eligibility. However, the Supreme Court ruled against Biden’s plan, saying the president did not have the necessary authority to take such action. Since then, President Biden has announced various programs to provide relief for those carrying federal loans, along with calling attention to existing plans.

Each forgiveness program has different eligibility criteria.

Teacher Loan Forgiveness

This federal student loan forgiveness program forgives the loans of highly qualified teachers. Depending on the subject area they teach, teachers who meet the eligibility requirements may have up to $17,500 or up to $5,000. Teachers are eligible to apply for this loan forgiveness program after they have completed five years of service.

Recommended: Explaining Student Loan Forgiveness for Teachers

Public Service Loan Forgiveness

This program is designed for those working in public service. In order to qualify, applicants must meet the programs eligibility requirements, including:

•   Work for a qualified employer

•   Work full-time

•   Hold Direct Loans or have a Direct Consolidation Loan

•   Make 120 qualifying payments on an income-driven repayment plan

Borrowers who are interested in pursuing PSLF will have to follow strict requirements in order to qualify and have their loan balances forgiven.

2. Income-Driven Repayment Plans

Income-driven repayment plans for federal student loans tie a borrower’s monthly loan payments to their income and family size.

The repayment period for income-driven repayment plans varies from 20 to 25 years. While these plans help make loan payments more affordable for borrowers, extending the loan terms may result in accruing more interest over the life of the loan.

President Biden has announced the creation of the Saving on a Valuable Education (SAVE) Plan , which replaces the existing Revised Pay As You Earn (REPAYE) Plan. Borrowers on the REPAYE Plan will automatically get the benefits of the new SAVE Plan.

The SAVE Plan, like other income-driven repayment (IDR) plans, calculates your monthly payment amount based on your income and family size. According to the White House, the SAVE Plan provides the lowest monthly payments of any IDR plan available to nearly all student borrowers.

Starting next summer, borrowers on the SAVE Plan will have their payments on federal undergraduate loans cut in half (reduced from 10% to 5% of income above 225% of the poverty line).

A beta version of the updated IDR application was made available in early August 2023 and includes the option to enroll in the new SAVE Plan. The DOE says that if you apply for an IDR plan (such as the SAVE Plan) in the summer of 2023, your application will be processed in time for your first federal student loan payment due date.

Recommended: The SAVE Plan: What Student Loan Borrowers Need to Know About the New Repayment Plan

3. Disability Discharge

When working out how to get rid of student loans, take into account that It may be possible to have federal student loans discharged if you have a permanent disability. To be eligible for the disability discharge, you need to show the Department of Education that you are not able to earn an income now or in the future because of your disability.

To do so, you need to get an evaluation from a doctor, submit evidence from Veterans Affairs, or show that you are receiving Social Security Disability Insurance. You cannot apply for disability discharge until you have been disabled for 60 months unless a doctor writes a letter saying that your disability and inability to work will last at least 60 months.

4. Temporary Relief: Deferment or Forbearance

Federal student loan repayment was put on pause over three years ago due to the Covid-19 shutdown. As part of the agreement reached in the Debt Ceiling bill, the Department of Education’s student loan forbearance program ends in 2023, with interest resuming on September 1, 2023 and payments due beginning in October 2023.

However, in late June, President Biden announced the creation of the On-Ramp Program . The Department of Education is instituting a 12-month “on-ramp” to repayment of federal student loans, running from October 1, 2023 to September 30, 2024, so that “financially vulnerable borrowers” who miss monthly payments during this period are not considered delinquent, reported to credit bureaus, placed in default, or referred to debt collection agencies.

Apart from the On-Ramp Program, forbearance and deferment both offer borrowers the ability to pause their federal student loan payments if they qualify.

Depending on the type of loan you have, interest may continue to accrue even while the loan is in deferment or forbearance. However, applying for one of these options can help borrowers avoid missed payments and potentially defaulting on their student loans.

Note that private student loans don’t offer the same benefits as federal student loans, but some may offer their own benefits.

5. Student Loan Refinancing

This option won’t get rid of your student loans, but it could help make student loans more manageable. By refinancing your student loans, you can potentially qualify for a lower interest rate, which can possibly lower your monthly payments or save you money on interest over the life of your loan.

If you refinance with a private lender, you can also change the length of your student loan. While private lenders can refinance both your federal and private student loans, you do lose access to the protections that federal student loans provide, such as income-based repayment programs, on the amount that is refinanced.

6. Filing for Bankruptcy: A Last Resort

Bankruptcy is a legal option for the problems caused by people struggling with how to take out student loans. However, it is rare that student loans are eligible for discharge in bankruptcy. In some instances, if a borrower can prove “undue hardship,” they may be able to have their student loans discharged in bankruptcy.

Filing for bankruptcy can have long-term impact on an individual’s credit score and is generally a last resort. Before considering bankruptcy, review other options, such as speaking with a credit counselor or consulting with a qualified attorney who can provide advice specific to the individual’s personal situation.

Recommended: Bankruptcy and Student Loans: What You Should Know

The Takeaway

When you are learning how to take out student loans, the future debt may not be obvious. It can be challenging to pay student loan debt, but there are options that can temporarily reduce or eliminate your payment. It is only in extremely rare circumstances that student loans can be discharged in bankruptcy.

For federal student loans, some options that can help alleviate the burden of student loan debt include deferment or forbearance, which may be helpful to those who are facing short-term issues repaying student loans. Another avenue to consider may be income-driven repayment plans, which tie a borrower’s monthly loan payments to their income, helping make monthly payments more manageable.

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.

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.

When you’re in college, you may want — or need — to do more than study and socialize. Working at an on-campus job can be a great way to stay busy, meet new people, learn new skills, and make some extra money.

You can find on-campus jobs on your own or, if you’re eligible, through the Federal Work-Study program. Read on for a basic guide to working on campus, including how work-study differs from regular part-time jobs, the benefits of working on campus, and a listing of top student job options you may want to apply for.

Work-Study vs. Part-Time Jobs

The Federal Work-Study program offers part-time jobs for undergraduate as well as graduate students who have financial need so they can earn money to pay for their education. Completing the Free Application for Federal Student Aid (FAFSA) form is the first step in applying for this aid. Not all colleges and universities participate in the Federal Work-Study program, so it’s a good idea to check with the financial aid office at your school to see if it’s an option.

Work-study jobs are open to both part- and full-time students, and the program encourages those who are awarded this aid to find work related to their major. For example, a science major may be able to get a work-study job as a lab assistant in the chemistry department. These jobs may be either on- or off-campus, the former usually in a campus department and the latter typically at a non-profit organization or a public agency. Students will earn at least the federal minimum wage, and their work-study award will be based on when they apply, their level of financial need, and their school’s funding level.


💡 Quick Tip: Make no payments on SoFi private student loans for six months after graduation.

The Benefits of Having an On-campus Job

You can look for a regular part-time job on campus on your own. The pay will vary, and the job might not have anything to do with your major, but there are still benefits to working on campus. You can save money to pay for your education or any other expenses like food, transportation, and entertainment, plus you’ll get valuable work experience, no matter the field.

Both work-study jobs or regular part-time jobs that relate to your major can boost your skills, which you can list on your resume, potentially giving you a leg up in your post-college job search.

Jobs also offer socializing and networking opportunities. You can make new friends, as well as connections that might be helpful when you’re looking for internships during college and job after you graduate.

The Top On-Campus Jobs

1. Tour Guide

Being a campus tour guide through the admission’s office requires having great interpersonal skills and a willingness to commit a lot of facts and information about your school to memory. Campus tour guides take prospective students and their families on tours of campus while giving details about different majors, activities, events, and the many other things that their school has to offer.

2. Resident Assistant

A resident assistant, or RA, lives in a dorm on campus and supervises a group of students living in that dorm, often on the same hall. Their responsibility is to make sure students are following the dorm rules and to offer support if students need anything. Typically, an RA will get free or discounted housing.

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3. Tutor

Students who excel in a particular subject may want to consider becoming a tutor. This on-campus job allows students to teach others what they are good at and help their peers have a better understanding of the subject.

4. Campus Newspaper Editor

Students who love to write, edit, and manage a team of reporters will likely enjoy working as a campus newspaper editor. This is typically not a job that students can get right away. They may have to work their way up after holding other positions on the staff in their freshman, sophomore, and/or junior years.

5. Barista

Some schools have a café on campus where students can go to get caffeinated and study well into the night for their exams. Being a barista will teach student workers people skills and how to make the perfect Americano.

6. Library Assistant

Another one of the on-campus jobs that students can apply for is library assistant. They will re-shelve books as well as help other students find and check out the books they need.

7. Admissions Assistant

Being a tour guide isn’t the only job students can take on in the admission’s office. They can also assist with data entry, communicate with prospective students and families on the phone and through email, and help out with any other administrative work around the office. Learning administrative work can be useful, since it’s a necessary skill for many different kinds of jobs.

8. Mailroom Attendant

As a mailroom attendant, students will sort incoming mail and help other students retrieve their packages.

9. Dining Hall Server

Students might find on-campus jobs at the dining halls on their campuses. They can serve meals and maybe even get to take home free food at the end of the day.

10. Bookstore Associate

Campus bookstores tend to be busy places, especially just before classes start, when students buy their textbooks and other school supplies. The end of each semester can also be a busy time, due to returns and memorabilia shopping. As a bookstore associate, workers will typically need to stock shelves with books and merchandise and learn how to use a point-of-sale system.

11. Lifeguard

Schools with pools need lifeguards to keep students safe. Students with summer lifeguard experience in their hometown may be able to sign up for this on-campus job when they go back to school in the fall.

12. Research Assistant

Department faculty may need assistants to help them with research. Duties of a research assistant can vary, but might include data collection, putting together grant materials, managing email, or maintaining a department website.

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13. Fitness Center Attendant

If there is a gym on campus, students can apply to work there. They may scan student IDs at the check-in desk, wipe down equipment, sell healthy food and smoothies at the gym café, and organize the equipment when the gym closes for the day.

14. Administrative Assistant

Different offices on campus could be looking for administrative assistants. Tasks include everything from sorting mail to doing data entry and answering telephone calls and emails.

15. IT Assistant

Students who enjoy working with computers may find on-campus jobs in the IT department. They can help other students with computer issues, like not being able to connect to the school Wi-Fi or trouble using the campus printers.

16. Museum or Gallery Assistant

If a school has an art museum or gallery, they may employ students as assistants. Students majoring in art may enjoy this on-campus job, where they may give tours, work in the gift shop, and/or check-in visitors.

17. Marketing Assistant

College marketing departments create materials to promote the school. Students who are interested in marketing or communication may want to apply for one of these on-campus jobs and learn valuable skills like email marketing, social media marketing, and copywriting. They may write blog posts for the school website and create flyers for prospective students and families.

18. Lab Assistant

Students who are majoring in the sciences may be able to find on-campus jobs in their schools’ laboratories. They might help other students with lab experiments, set up and organize labs, and prepare chemical solutions.

19. Radio DJ

If a school has a radio station, students might have the opportunity to become radio DJs, playing music that they love and hosting different programs. Other duties may include ordering new equipment, securing rights to the music they play, and setting up and breaking down the station as necessary.

20. Endowment Office Assistant

Some schools might have internship or future job.


💡 Quick Tip: Even if you don’t think you qualify for financial aid, you should fill out the FAFSA form. Many schools require it for merit-based scholarships, too. You can submit it as early as Oct. 1.

Putting That Money to Work

Work-study students are paid directly by their school unless they request to have their earnings deposited into a bank account or applied to their school account (to cover things like tuition, fees, or room and board).

Whether you take on a work-study or regular part-time job, it’s a good opportunity to learn basic budgeting, putting most of your earnings towards necessities, some into savings, and spending some on fun. Earning money from a part-time job is a great opportunity to learn basic money management, which is an important life skill.

Even with income from a part-time job, however, you might still be stressed about money and how you will cover all of your college expenses. To be sure you’re getting all the financial aid you’re entitled to, make certain that you fill out the FAFSA every year. This will let you know if you’re eligible for grants, scholarships, work-study, and federal student loans (which may be subsidized or unsubsidized).

If you still have gaps in funding, you might also look into getting a private student loan. These are available through private lenders, including banks, credit unions, and online lenders. Loan limits vary from lender to lender, but you can often get up to the total cost of attendance, which gives you more borrowing power than with the federal government. Interest rates vary depending on the lender. Generally, borrowers (or cosigners) who have strong credit qualify for the lowest rates.

Keep in mind, though, that private loans may not offer the borrower protections — like income-based repayment plans and deferment or forbearance — that automatically come with federal 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.

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.

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

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.

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