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Those looking to save on the price of higher education may decide to pursue community college as a path forward. What is a community college?

Community colleges are public colleges designed to make the cost of attending college more affordable for local students. While community colleges don’t offer four-year degrees, they have two-year degree programs and classes that can transfer to other colleges where students can obtain a four-year degree.

Keep reading for more insight into what a community college is and how these schools work, as well as how they compare to four year universities.

What Are Community Colleges?

Community colleges are colleges designed to serve the local community. Students live off campus (often at home with their families if they are young) and can pursue an Associate of Arts (AA) or Associate of Science (AS) degree, which typically only take two years to complete. Students have the option of taking courses that can transfer credits to a four year university so they can pursue a Bachelor of Science (BS) or Bachelor of Arts (BA) degree.

Community colleges may also have vocational and technical programs for those looking to pursue careers that don’t require a four-year degree, but that do require technical knowledge. If you’re considering trade school vs community college, review factors such as the programs offered, time to complete programs, and any other opportunities (such as professional development opportunities) available at the schools.

How Do Community Colleges Work?

Community colleges provide a flexible learning opportunity that can help students reach a variety of goals. While some students attend community college with a goal to transfer after earning some lower division credits, some attend with the goal of earning an Associates degree.

Other students aim to earn technical certificates (similar or the same as what technical schools offer) and some simply attend because they love learning and want to pick up a new language, take a film history course, or brush up on a favorite subject. Students can choose to take one class or can enroll full-time.

Do They Accept Everyone?

Community colleges generally accept all students. For example, in California community colleges don’t have any testing requirements and students don’t need to have a certain GPA to be accepted. A high school diploma isn’t required either, but for students that want to apply for federal financial aid, usually a GED or high school diploma is required.

Why Are They Cheaper?

Community colleges are funded by the government in order to offer an affordable education for students. The average cost of attending community college for a year is $3,800, but in many states students who meet certain eligibility requirements can qualify for free tuition. Not to mention, there is generally no on-campus housing option for community college students and many choose to save money by living with a family member such as a parent.

What Kinds of Degrees Are Available?

What are community colleges for and what do community colleges offer? As noted previously, community colleges are designed to help students afford the cost of attending college locally. They offer AA and AS degrees, as well as technical and vocational programs. Attending a community college can also make it possible to transfer credits to a four year university so that the student can spend less time and money at a more expensive school.

Pros and Cons of Attending Community College

Before attending community college, there are some advantages and disadvantages worth keeping in mind.

Pros

Pros of community college include affordability, flexibility, and the opportunity to live at home while attending school.

More Affordable

On average, the annual community college tuition is $3,570 versus $9,970 for attending an in-state and public four-year college. Attending a public college out of state or a private college can cost even more.

Can Live at Home

Because community colleges are designed to serve local students, it’s usually possible to live at home with family while attending community college which helps keep education costs down.

Easier Acceptance

Community colleges don’t require a certain high school GPA or test scores in order to be accepted.

Flexible Course Scheduling

Community colleges may have flexible course schedules that allow students to work while attending classes. Some programs may also offer online or hybrid class models.

Cons

There are also some disadvantages, worth considering before attending a community college.

Credits Don’t Always Transfer

Certain course credits only transfer to select colleges which can make the transfer process confusing. Some community college students end up taking courses they don’t end up getting credit for when they transfer. It can help to work closely with your advisor to ensure the courses you complete at community college will transfer to the universities you are interested in transferring to.

Instructors May Not Be Full-Time

Some community college instructors teach at multiple colleges, which could make them less accessible when it comes to office hours.

Less Social or Extracurricular Opportunity

Community colleges have less of an emphasis on social life and activities since students commute and don’t live on campus. Many students also juggle work, parenthood, and other commitments outside of attending community college which leaves little time for socializing.

The table below outlines a recap of the pros and cons of attending a community college.

Pros	Cons
•   More affordable •   Can live at home •   Easier acceptance	•   Credits don’t always transfer •   Instructors aren’t full-time •   Less Social or Extracurricular Opportunity

Differences Between Community Colleges and Universities

When evaluating community colleges vs. universities, major differences include degree types available, cost, time commitment to complete a degree, and the application process.

Community Colleges	Universities
•   Lower cost •   AA and AS degrees •   Vocational and technical training •   Smaller class sizes •   May offer guaranteed acceptance •   Can’t obtain a four year degree	•   More expensive tuition •   BA and BS degrees •   On campus housing and meal plans available •   Competitive application process •   Specific admittance requirements •   Better athletic and extracurricular opportunities

What Are the Job Prospects for Community College Graduates?

Attending community college can lead to many different job opportunities in the business and labor sectors. From automotive technology to culinary arts to childcare to marketing to sales — the list goes on.

Additionally, community college graduates can continue their education if they are interested in a career path that requires a Bachelor’s degree or more.

How to Pay for Community College

Even though community college is one of the more affordable higher education options available to students, some may still need help affording the cost of tuition, fees, and books, which can cost thousands of dollars a year. Here’s a few options students can pursue for paying for community college.

FAFSA

Each year, students can fill out the free Federal Application for Federal Student Aid (FAFSA®) to find out what types of federal grants, scholarships, and federal student loans they qualify for. After seeing what grants they qualify for, students can better determine how much they actually need to spend and if they’ll need to borrow money to afford the costs of attending community college.

Grants

Speaking of grants, this is a form of gift aid that students don’t need to pay back. This is why it’s so important to fill out the FAFSA each year to see what grants are available.

Scholarships

Scholarships are another form of gift aid that students don’t have to worry about paying back. Each school’s financial aid office can help students learn more about what scholarships they have available, but students can also apply for scholarships with external organizations. There are a variety of online databases and scholarship search tools that students can use to learn more about scholarship opportunities.

Federal Student Loans

Federal student loans come from the U.S. Department of Education and as a result tend to have better interest rates and protections (like deferment and access to forgiveness programs) than private student loans for undergraduates offer. When students complete the FAFSA, they’ll learn more about which types of federal loans they qualify for and how much they qualify for.

Private Student Loans

Private student loans come from financial institutions like banks, credit unions, and loan lenders. These loans tend to cost more and how each lender handles repayment and fees, and the rates they charge can vary greatly. Generally, it’s best to exhaust federal student loan options before applying for private ones.

One important thing to know before applying for private student loans is that lenders will evaluate the applicants credit score and history, as well as their income are taken into account. The better someone’s credit history is, the better interest rates and loan terms they can qualify for. This is why many young students find it beneficial to add a cosigner to their private student loan application.

The Takeaway

Attending community college can lead students down many different paths, including transfering to a university that offers BA and BS degrees. Community college is typically a more affordable education option for students (unless they qualify for a full-ride scholarship to a four-year university) looking to pursue higher education.

That being said, some students may find they need to take out loans to afford the cost of community college. This is where private student loans can step in.

With SoFi Private Student Loans, borrowers can apply online with a cosigner in just a few minutes. While SoFi’s loans aren’t available to community college students, they may be an option for those transferring to a four-year university. There are no fees and graduates can enjoy a six month grace period before they have to start the repayment process.

Private student loans from SoFi have no fees, offer flexible repayment plans, and an easy online application.

FAQ

How are community colleges and regular colleges different?

Community colleges offer a variety of technical and vocational programs, as well as two year Associate degree programs. Regular colleges offer four-year Bachelor’s degrees, as well as graduate school degrees.

What purpose do community colleges serve?

Community colleges make achieving a post-high school education more accessible and affordable to students. Students can live at home with their families while attending a local community college so they can save money on housing while accessing affordable tuition.

Why are community colleges so much cheaper than 4-year universities?

Community colleges are funded by the government to help make pursuing a college education or vocational training more affordable. Community colleges also lack some of the expensive bells and whistles that large universities come with, like on-campus housing and dining halls.

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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).

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.

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.

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.

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.

SOPS0322023

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Pursuing a four-year degree can lead to a lot of great career opportunities, but there are also many lucrative career opportunities that require a more technical education that a university can’t provide. To pursue certain careers, it may be necessary to attend a technical school.

What are technical schools? In short, technical schools are postsecondary institutions that teach students specialized skills designed to prepare them for a specific profession or trade.

Continue reading for more insight into what technical school is and what the advantages and disadvantages of this education option are.

What Is Technical School?

As briefly mentioned, a technical schools meaning is a school that provides students with education and training in a practical and specialized trade or profession. Technical schools don’t lead to bachelor’s degrees like a university and instead result in earning diplomas or certificates that generally take less than two years to qualify for.

Technical schools are a good fit for students who know what career path they want to pursue, because when a student attends a technical school they choose a specific program designed to prepare them for a certain career. Students who attend technical school don’t take general education classes, which means they are not required to learn more about different disciplines before they choose where to focus their efforts.

Technical school courses include instruction and studying course materials, but also provide hands-on training that helps students build the skills they need to pursue their chosen career. Often, students who attend technical schools are connected to internship opportunities that help them gain real world work experience.

How Is Technical School Different From Trade School?

Trade schools typically focus on more hands-on careers that require having either a certain amount of on-the-job supervised hours in order to pursue a career or a certification of some sort. Trade schools offer hands-on education and prepare students for labor-focused jobs like working as an electrician or carpenter and similar to technical schools, trade school costs are generally less than university degrees.

Technical schools have more classroom lectures and simulated job training and can lead to more creative career paths like floral design, graphic design, and cosmetology, as well as more labor-focused jobs. A recap of the comparison between trade school and technical school is in the below table.

Trade School	Technical School
•   Hands-on education and training •   Prepares students for labor-focused jobs •   Helps students achieve certificates or supervised working hours	•   Classroom education and simulated job training •   Prepares students for labor-focused jobs and creative careers •   Can earn diplomas and certificates

How Is Technical School Different From Vocational Training?

A vocational school is generally the same thing as a technical school and people often use these names interchangeably. Some four-year universities offer vocational degree programs, such as becoming a paralegal, but some vocational programs like cosmetology can only be found at technical or vocational schools.

How Is Technical School Different From Community College?

Community colleges focus more on general education, but also offer technical training, whereas technical schools don’t teach general education at all.

Community College	Technical School
•   Students can pursue a general education •   Credits can transfer to four year universities •   Can prepare students for technical careers or to pursue further academic education	•   Only offers technical coursework •   Credits don’t transfer to universities •   Prepares students for technical careers

How Is Technical School Different From University?

Universities and technical schools are very different. They offer different degree programs, costs, time commitments and more. The table below provides an overview on the differences.

University	Technical School
•   Can pursue a bachelor’s, master’s, or doctorate degree •   On-campus dorm •   Intramural sports •   Clubs and student activities •   Four-year degrees	•   Technical focus •   Less classroom learning •   Hands-on training •   Shorter programs

How Does Technical School Work?

The way that technical school works is students choose a specific program to pursue and then complete the required coursework to finish the program or earn a certificate that enables them to work in the career of their choice. Technical school involves hands-on instruction so students can learn valuable technical skills.

Getting Into Technical School

Generally, students need to have a high school diploma, state-issued GED, or to have passed a state-authorized equivalency exam in order to qualify for technical school, but students don’t have to compete for acceptance like they would at a four-year university.

Cost of Technical School

The cost of technical school can vary quite a bit based on factors including the school, its location, the program type and the length of the program.

What Can You Study in Technical School

A few examples of career paths technical school can lead to include:

•  Computer technology

•  Healthcare support

•  HVAC technology

•  Electrical installation and maintenance

•  Welding or plumbing

•  Hospitality/hotel and restaurant management

•  Culinary arts

•  Cosmetology

•  Floral design

•  Auto mechanics

•  Graphic design

•  Visual arts

•  Office administration

•  HVAC technology

•  Carpentry or construction

Pros and Cons of Attending Technical School

Now let’s look at some advantages and disadvantages associated with attending technical schools.

Pros	Cons
•   Only requires a one to two year commitment •   Some programs only last a few weeks •   Hands-on training for students who have chosen a career path	•   Limited program and course offerings •   Funnels into specific career paths which could feel limiting •   Academic credits don’t transfer to four-year universities

Technical High Schools

There are also technical high schools that prepare high school students for technical career paths while providing them with a more traditional high school education at the same time.

Financing Technical School

Students who are having trouble affording the cost of technical school or who want to save some money can pursue these options for helping them finance their education.

FAFSA

Filling out the Free Application for Federal Student Aid (FAFSA®) each year while attending school, will allow technical school students to learn if they qualify for any grants, scholarships, or federal student loans. Check in with the financial aid office at your technical school if you have any questions about whether or not they participate in the federal aid program.

Grants

Grants are a form of financial aid that students don’t have to pay back. Essentially, a grant gives students free money to pay for their school tuition, fees, and supplies.

Scholarships

Scholarships are another form of gift aid that students don’t have to pay back. It can be a good idea to apply for scholarships to help lower the cost of attending vocational school.

Private Student Loans

Students who don’t qualify for enough gift aid or federal student loans to cover the costs of attending vocational school can apply for a private student loan through a private lender such as a credit union, bank, or loan lender. Unlike federal student loans, private lenders will often evaluate an applicant’s credit score and history, among other factors, when making lending decisions.

Recommended: A Guide to Private Student Loans

Usually, private student loans come with higher interest rates and less perks than federal student loans, so they are generally considered an option after federal options and other funding sources have been exhausted.

Employer Sponsorship

If someone’s employer would benefit from the skills they would gain by attending technical school, then their employer may be willing to pay for them to attend technical school by offering tuition reimbursement or some other form of financial aid. It can’t hurt for employed students to see what support programs their employer has in place.

Job Prospects for Technical School Graduates

Because different technical schools focus on different training programs, students need to choose one that has a program that aligns with their goals. For example, students who want to attend technical school may be doing so to pursue a career as an auto mechanic, electrician, hair stylist, or chef.

Is Technical School Right for You?

There’s no one right path to take after high school or when deciding to switch careers, but some may find that attending technical school can help them pursue the career of their choice.
Consider your career goals and the requirements for pursuing that career path. If that career path would benefit or require the training offered by a technical school, then it may benefit the student to explore attending a technical school. In some cases, another education option may help them reach that goal more effectively and efficiently than technical school.

The Takeaway

Attending technical school can be a great option for those who want to pursue a career that requires a specialized skill set, yet which doesn’t require a college degree. Technical school takes less time than pursuing a four-year degree and can lead to many great career opportunities.

Some students may find they can’t afford to pay cash for technical school and need to borrow money in order to finance their education. This is where private student loans could help.

SoFi’s private student loans aren’t available to technical school students, but may be worth considering for students transferring to a university. With SoFi private student loans, it’s easy to apply online and borrowers don’t have to worry about expensive fees. After graduation, they can enjoy a six month grace period to give them time to start their career before having to pay back their student loans.

It takes just a few minutes to find out if you pre-qualify for a no fee SoFi private student loan.

FAQ:

How are technical schools and trade schools different?

What’s a technical school and how does it differ from a trade school? The main difference between trade schools and technical schools, is that technical schools offer more classroom and instructional education, whereas trade schools do more hands-on training (although technical schools offer this type of training as well, just not as much).

How is college different from a technical school?

At a college, it’s possible to pursue a bachelor’s degree, which usually takes four years to complete, whereas technical school helps students work towards certificates that take two years or less to pursue. Students who attend college usually focus on more academic disciplines, whereas technical school teaches specialized skills.

What can you study at a technical school?

It’s possible to study many different subjects at technical schools and the subjects each school teaches can vary. For example, students can enroll in programs focused on computer technology, healthcare support, HVAC technology, electrical installation and maintenance, and plumbing.

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About the author

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Photo credit: iStock/Laurence Dutton

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. 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).

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.

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.

SOPS0322024

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Student loans give many college students the opportunity to finance their education. Being well-informed on the nuts and bolts of student loans can make it easier to fund your education, while still keeping your eye on long-term goals like starting a career and saving for the future.

10 Student Loan Questions, Answered

There are many different types of student loans, with different loan amounts, costs, benefits, and repayment terms. In short, student loans are complicated. But don’t stress. We have answers to questions on everything from the difference between federal and private student loans to interest rates to when and how you’ll need to start repaying your loans. Let’s dive in.


💡 Quick Tip: You’ll make no payments on some private student loans for six months after graduation.

1. How Do I Apply for Federal Student Loans?

To apply for federal student loans, you’ll need to fill out the Free Application for Federal Student Aid (FAFSA®). This opens the door to many forms of financial aid, including grants, work-study, and federal student loans.

After you submit the FAFSA, you’ll receive a Student Aid Report (SAR) via email or regular mail. The report includes your responses to the FAFSA questions as well as your Student Aid Index (SAI), formerly called Expected Family Contribution (EFC). Your SAI is a number that is used to determine your eligibility for federal financial aid.

Schools that receive information from your FAFSA will be able to tell you if you qualify for federal student loans. Almost every American family qualifies for federal student loans. Direct Subsidized Loans (in which the government covers your interest while you are in school and for six months after you graduate) are awarded based on financial need. Direct Unsubsidized Loans (in which you are responsible for all interest that accrues on the loan) are not need-based.

2. How Do I Fill Out a FAFSA Form?

You can fill out the FAFSA online at StudentAid.gov . While the FAFSA is known for being a confusing and complex application to complete, the form was streamlined for the 2025-2026 award year. Applicants can now skip as many as 26 questions, and some applicants may be able to complete it in as little as ten minutes.

While the FAFSA is typically available starting on October 1 for the following academic year, the new 2025-2026 FAFSA will not be available until December 31, 2024.

The first step to filling out the FAFSA is to create an FSA ID through StudentAid.gov, which serves as an electronic signature. Both you and your parents will need to create your own unique FSA ID. You’ll then want to check what information you’ll need to fill out the FAFSA and gather it before you begin.

The online FAFSA is typically processed by the Department of Education within three to five days, and then the information is sent to the list of schools you provided (keep in mind that you can list schools that you have not yet applied to.) The colleges use your FAFSA information to determine financial aid eligibility.

3. What is the Difference Between Private Student Loans and Federal Ones?

Federal student loans are funded through the government and are strictly regulated. To qualify for them, students must fill out the FAFSA. Private student loans, by contrast, are funded by banks, credit unions, and other private lenders.

Federal student loans for undergraduates don’t require a credit check and rates are set by Congress each year. Federal student loans also come with guaranteed benefits and protections, including income-driven repayment plans, deferment and forbearance options, and forgiveness programs.

Private student loans do require a credit check and rates are set by individual lenders. Generally, borrowers (or their parent cosigners) who have strong credit qualify for the lowest rates. Loan limits vary by lender, but you can often get up to the total cost of attendance, which is more than you can borrow from the federal government.

Since private student loans generally have higher interest rates than federal student loans and lack the same protections, it’s generally recommended that you tap all forms of federal aid, including federal student loans, before applying for private student loans.

Recommended: Private vs Federal Student Loans

4. How Much Does College Cost?

The average cost of tuition and fees for the 2023-2024 school year is $42,162 at private colleges, $23,630 for out-of-state students at public universities, and $10,662 for in-state residents at public schools, according to U.S. News.

The actual amount you will pay for college will depend on where you choose to go and how much financial aid, including need-based and merit-based aid, the school awards you.

If you submitted the FAFSA, each school that accepts you will also send you a financial aid award letter, also known as the student aid package or school offer. This letter will include the annual total cost of attendance and a list of financial aid options. Typically, your financial aid package will be a mix of gift aid, meaning financial aid that doesn’t have to be repaid, and federal student loans, which you have to repay with interest. The award letter is specific to that university or college, so you’ll receive a different letter from every school that accepts you as an incoming student.

5. Is College Worth the Cost? What Are the Benefits?

College represents an investment in yourself and your future, and only you can decide how much that’s worth. So, we’ll focus instead on the potential benefits of going to college. The most obvious benefit is that, if you want to pursue certain careers, you’ll likely need the appropriate college education and training.

Studies show that college graduates earn significantly more money, accumulated over a lifetime, than those who did not attend. Earning your degree of choice requires a solid plan and commitment, and these are excellent strategies and skills to develop before entering the working world. Plus, people often make lifelong friendships at college, and many universities have a strong alumni network, which can be helpful on many levels as you begin your career.

6. What Can Student Loans Be Used For?

Funds from federal and private student loans can be used for a variety of education-related expenses, including tuition, fees, textbooks, computers/software, transportation to and from school, housing (on or off campus), meal plans or groceries, and housing supplies (e.g., sheets, towels, etc.).

Basically, if the expense is essential to your educational success — meaning it supports your living arrangements, basic daily needs, or attendance at school — it’s likely a permissible use of student loan funds.

Recommended: Using Student Loans for Housing and Living Expenses

7. What is a Grace Period for Student Loans?

For most federal student loans, after you graduate, leave school, or drop below half-time enrollment, you have a six-month grace period before you must begin making payments. Grade periods for private student loans can vary by individual lender.

The student loan grace period is designed to give students a chance to find employment before their monthly loan payments kick in.

You are not required to make interest or principal payments during the grace period. However, if your loan isn’t subsidized by the government, interest will still accumulate during the grace period and be added to your balance, or capitalized, if you don’t pay it before your first loan payment is due. Making at least interest-only payments even when it’s not required can save you a significant amount of money over the life of your student loans.

8. How Do I Repay Student Loans?

Repayment on federal student loans generally begins after the six-month grace period. The standard repayment plan for federal student loans is 10 years, but borrowers are able to select one of the other repayment plans at any time without incurring any costs.

Federal student loans also offer income-driven repayment plans, which tie the borrower’s monthly payment to their income. While this may make the loan more expensive in the long-term, it can make the monthly payments more affordable. When deciding on a repayment plan, you want to consider factors like your income, estimated monthly payments on the student loan, and your overall budget. Over time, you may find it helpful to reevaluate the payment plan you’ve selected as your financial situation may change.

To determine the repayment options available with a private student loan, check directly with the individual lender.

If you have higher-interest Direct Unsubsidized Loans, graduate PLUS loans, and/or private loans, you may be able to refinance your student loans after you graduate at a lower interest rate. This could lower the total cost of your loans and make repayment easier.

9. Can I Repay Student Loans Early?

Yes, you can generally pay off student loans, including federal student loans and private student loans, early without incurring prepayment penalties. You may want to reach out to your lender first to make sure they will apply your extra payments to your principal, rather than towards your next payment.

There are many benefits to paying off your student debt early. You will save on student loan interest and get out of debt faster. However, you’ll want to make sure you have enough income to cover a higher monthly payment. Paying too much toward your student loan could cause you to fall short on essential bills like rent or a car loan. It might also delay saving for other goals.

Recommended: 6 Strategies to Pay off Student Loans Quickly

10. How Can I Apply for a Private Student Loan?

If you decide to apply for a private student loan to help pay for college, it’s a good idea to shop around and compare lenders. Your school’s financial aid office may be able to provide you with a list of lenders that they work with. However, you’re not restricted to this list.

Before you choose a lender, it’s a good idea to review factors including interest rate, loan terms, any additional fees associated with the loan, and the repayment plans available at each lender. Many lenders will allow potential borrowers to get prequalified to find out how much they may qualify to borrow and at what rates.

Another thing that may be worth considering is if the lender has any sort of programs for borrowers who run into financial difficulties down the road and may have trouble making payments on their student loans. Some lenders offer unemployment protection that allows eligible borrowers to temporarily pause payments on their student loans should they lose their job through no fault of their own.


💡 Quick Tip: Need a private student loan to cover your school bills? Because approval for a private student loan is based on creditworthiness, a cosigner may help a student get loan approval and a lower rate.

The Takeaway

Student loans can be instrumental in helping you pay for college, but it’s important to understand how they work before borrowing. Broadly, there are both federal and private student loans. Federal student loans are backed by the federal government and come with unique benefits like income-driven repayment plans and forgiveness programs.

Private student loans are offered by private lenders and generally require potential borrowers to undergo a credit check during the application process. Since private student loans tend to have higher interest rates and lack federal protections, you generally want to consider federal loans first.

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.

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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. 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.

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.

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.

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If a student has goals of pursuing a career as a teacher, they may find that the Teacher Education Assistance for College and Higher Education (TEACH) Grant can help them meet their goals and reduce their educational expenses. The TEACH Grant is a form of federal financial aid that is focused on helping those pursuing a career in teaching pay for their college expenses.

As part of the TEACH Grant, recipients are required to complete a teaching service obligation in order to get the grant. If this obligation isn’t completed, the grant will be transitioned into a loan that will need to be repaid with interest.

Keep reading for more information on the TEACH Grant, including how it works, pros and cons of the TEACH Grant, and how to apply.

What Is a TEACH Grant?

The TEACH Grant is a federal financial aid program designed to help students pursuing teaching careers pay for college expenses. In order to receive a TEACH Grant, applicants have to agree to teach a subject that is considered “highly needed” in a low-income area with a shortage of specific subject teachers. These schools can be elementary and secondary schools.

Grant awards are up to $4,000 a year when the recipient is in school. Once they start working, they will be paid their normal salary without the addition of any grant funds.

TEACH Grants are eligible for multiple subject areas, including:

•   Bilingual education and English language acquisition

•   Foreign language

•   Mathematics

•   Reading specialist

•   Science

•   Special education

•   Any other field that has been identified as high-need by select governing agencies

After graduating, recipients have to teach at a low-income school or educational agency for a minimum of four years. This four-year teaching requirement must be completed within eight years of the recipient’s graduation.

Recommended: FAFSA Grants & Other Types of Financial Aid

TEACH Grant Eligibility

The TEACH Grant comes with certain eligibility requirements, including:

•   Student must be eligible for federal student aid programs

•   Student has to be an undergrad or graduate student

•   The recipient’s school has to participate in a TEACH Grant-eligible program of study

•   Student has to be enrolled in one of these eligible programs

•   Recipient must score above the 75th percentile on one or more portions of a college admissions test or has to maintain a cumulative grade point average of 3.25 or higher

How the TEACH Grant Works

Students who qualify for the TEACH Grant program may receive up to $4,000 a year in funding if they are in the process of completing — or one day plan to complete — the coursework required to start a teaching career.

In order to qualify for a TEACH Grant, the student has to sign a TEACH Grant agreement to work full-time as a teacher for four years at an elementary or secondary school or educational service agency that serves low-income students. They also need to teach in a high-need field and have to finish their teaching obligations within eight years after they graduate from or stop being enrolled at the institution of higher education where they received a TEACH Grant.

Do You Have to Pay It Back?

If the recipient fulfills all service obligations of the grant, they won’t have to repay their TEACH Grant. However, if they don’t fulfill the TEACH Grant requirements, then all TEACH Grants they received will be converted to Direct Unsubsidized Loans that they must repay in full. They will be charged interest starting from the day of their TEACH Grant disbursement.

Can It Be Used for Living Expenses?

The TEACH Grant is intended to fund coursework (up to $4,000 annually) for students who are in the process of or will one day complete the coursework required to begin a teaching career. Consider consulting with the financial aid department of the school the student is attending to see if these funds can also be used for living expenses.

Pros and Cons of a TEACH Grant

Like any program, the TEACH Grant has some unique advantages and disadvantages associated with it.

Pros	Cons
Up to $4,000 in funding each year to pursue the coursework required to become a teacher	Must work full-time as a teacher for four years at an elementary or secondary school or educational service agency that serves low-income students
If service obligation is fulfilled, the grant doesn’t need to be repaid	If the service obligation is not completed within eight years, the grant will need to be repaid in the form of a Direct Unsubsidized Loan

Applying for a TEACH Grant

The TEACH Grant application is a part of the Free Application for Federal Student Aid (FAFSA®). Students can apply for the TEACH Grant when they submit their FAFSA. Some grants may have limited funding, so it’s generally recommended that students submit the FAFSA earlier rather than later. When the student receives their financial aid offer, they’ll find out if they received a TEACH Grant.

Students must continue to apply for the TEACH Grant each year by submitting the FAFSA annually. They will also be required to complete TEACH Grant counseling and sign a new Agreement to Serve every year.

Not all schools participate in the TEACH Grant, so it’s helpful to contact the school’s financial aid office to find out if they participate in the program and to learn what specific areas of study are eligible for the program.

Alternative Forms of Funding

If a student doesn’t qualify for the TEACH Grant, finds it is not a good fit for their needs, or knows that they don’t want to complete the service obligations, these are some other options they may have for pursuing funding to help pay for college.

Scholarships

When a student receives a scholarship, they don’t have to repay those funds. It’s worth applying for multiple smaller scholarships, not just big ones. Those smaller scholarships can really add up.

Recommended: The Differences Between Grants, Scholarships, and Loans

Other Grants

Like scholarships, generally students don’t have to repay grants for college (unless the grant has obligations like the TEACH Grant). A student’s financial aid office can help point them in the direction of available grants and filling out the FAFSA annually can help them qualify for other federal grants, such as the Pell Grant.

Recommended: FAFSA Guide

Federal Student Loans

Federal student loans are funded by the U.S. Department of Education and there are a handful of different types of federal loans available to both undergraduate and graduate students. To qualify for federal student loans, students have to fill out the FAFSA each year. Federal student loans generally have better interest rates and terms than private student loans and they come with unique federal protections.

Private Student Loans

Students can borrow private student loans to help fill the gaps that scholarships, grants, and federal student loans leave behind. As mentioned, private student loans may not offer the same benefits as federal student loans, and for this reason, they are generally considered an option only after other funding resources have been exhausted.

Recommended: Guide To Private Student Loans 

Part-Time Work

If students are looking to avoid taking on student loan debt or want to lighten their student loan load, they could work part-time to help cover higher education costs and living expenses. There are often on-campus jobs designed to help college students balance their school work and their need to earn an income.

The Takeaway

Paying for college is expensive and a TEACH Grant can help soon-to-be teachers pay for the cost. That being said, the service obligations of this grant won’t appeal to all students and they may find they need to pursue alternative funding, including federal and private student loans.

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

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

FAQ

Is the TEACH Grant worth it?

Each individual needs to consider carefully if the service obligation attached to the TEACH Grant makes the $4,000 in financial assistance worth it to them. If they don’t want to live or teach in an area that services low-income students, they may find this program isn’t a good fit.

Do you have to pay back a TEACH Grant?

Recipients may have to pay back their TEACH Grant if they don’t meet the full requirements of their service obligation. If a recipient failed to meet these obligations, the grant funds they received through this program would be converted to Direct Unsubsidized Loans that have to be repaid in full with interest charges.

What does TEACH Grant stand for?

The acronym TEACH of TEACH Grant stands for Teacher Education Assistance for College and Higher Education (TEACH).

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Photo credit: iStock/Marcus Chung

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).

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

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

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

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Senior year in college is often filled with mixed emotions — excitement for all the fun you’re going to have with your friends, eagerness to be done (a.k.a., senioritis), and anxiety about what you’re going to do after you graduate and what the future holds.

While leaving your college years behind can be bittersweet, it’s important to remember that the fun doesn’t stop after you return your cap and gown. By making the most of your senior year, you’ll have the perfect ending for these incredible four years and be ready to tackle life’s next chapter.

Below are key things to keep in mind as you focus on graduation, next steps in building a career, and finally living out your dreams.

Dotting I’s and Crossing T’s

Early in the fall, it’s a good idea to meet with your college counselor to make sure you have all of your ducks in a row in order to graduate. A lot can happen in three years — switching majors, adding minors, and studying abroad — so it can’t hurt to double-check that all of your requirements will be met by the end of the year.

Failing to earn all your required credits can mean delayed graduation, even adding on an extra semester. The finish line is close, but you’ll want to make sure that you stay on track. Also keep in mind that your last year in college is a last chance to take any out-of-the-box classes you’ve always wanted to take but never had time. You may finally have room in your schedule to add some fun electives.

If you’re planning to attend graduate school, you’ll also need to focus on finishing up any required testing and meeting application deadlines. Much like senior year of high school, you’ll begin an anxious time as you wait for acceptance letters to arrive.


💡 Quick Tip: Ready to refinance your student loan? You could save thousands.

Getting a Jumpstart on a Job Search

Your senior year in high school was all about preparing for college. Your senior year in college is all about preparing for life after college, a.k.a the real world.

It’s no secret that college graduates flood the job market each June, so getting ahead of the pack can make your search a little easier. Applying for jobs as early as the fall can mean less competition and improve your chances of having a job lined up when you graduate.

Even if launching a full-blown job search during school isn’t possible, it’s a good idea to take some steps toward the professional world.

Consider stopping by the career center to see what resources it can provide. Part of your tuition goes to funding your college’s career services center, so why not get your money’s worth? Most career professionals are ready to help students prepare their resumes and perfect their cover letters, and they typically have job postings from companies looking to hire recent graduates.

Some career centers may offer mock interviews so students can hone those skills, or they may provide support when issues arise during a job search. Popping by between classes to see what services are offered will only take a few minutes.

In addition to your resume and cover letter, you’ll also want to start working on your LinkedIn profile and, if relevant, a portfolio of work samples. Having these resources in a good place during senior year can make it easy to start applying for jobs during school or right after graduation.

Recommended: Jobs that Pay for Your College Degree

Making Connections

As a student, building a professional network may feel impossible, but you’re likely building one in school without realizing it. One easy way to get a head start on a job search, without doing too much work during a hectic final year of school, is to tap into that network, namely your advisors or mentors.

Professors can be great resources to have as you prepare for the unknown of post-grad life. They can provide insights into what positions are available in your field, what you should look for in an employer, and good questions to ask in an interview. You might also ask a professor to look over your resume.

You might also look for a professional mentor through your college’s alumni network or mentor programs and set up an informational interview. Finding a mentor senior year of college can not only help you find your first job, but it can also pay career dividends for years to come.

Whether you start applying for positions while you’re still in school or right after graduation, you may need to provide a list of at least three references. These can be people like internship managers, your thesis professor, your part-time job supervisor, and others who can speak to your skills and work ethic. Now is a good time to reach out and ask potential referees if they would be willing to serve as references.

You may also want to attend and engage in networking at career fairs, career workshops, and other informational events taking place on campus.

Recommended: How to Get Involved on Campus in College

Paying Back Student Loans

Preparing to navigate life after college can be overwhelming, especially when it comes to finances. No one wants to think about student loan payments, but it can be helpful to start making repayment plans before graduation day.

You can begin the planning process by simply looking up the current balance for each student loan you hold, including both federal and private student loans. Take note of when the lender expects payment. Some or all of your student loans could have a six-month grace period before you need to start repaying. This is ideal because it gives you time to get a job after graduation and make sense of your income before you have a new bill to pay.

Lenders typically provide repayment information during the grace period, including repayment options.

With federal student loans, your servicer will automatically place you on the Standard Repayment Plan (a 10-year fixed payment repayment plan). However, you can request a different repayment plan at any time. Typically, you can pick from repayment plans that base your monthly payment on your income or that give you a fixed monthly payment over a set repayment period.

An income-driven repayment plan may be a smart choice if you’re looking to lower your payment. However, these plans also extend the payoff timeline to 20 or 25 years. The Federal Student Aid website has a loan simulator tool that lets you compare all the available repayment options and helps you choose the best one for your specific situation.

For private student loan repayment, it can be best to speak directly with the loan originator about repayment options. Many private student loans require payments while the borrower is still in school, but some offer deferred repayment. After the grace period, you will need to begin making principal and interest payments. Some lenders offer repayment programs with budget flexibility.

Whether you or your parents chose to take out federal or private student loans (or both) to cover school costs, reviewing all possible payment plan options can help make the transition to repayment easier.


💡 Quick Tip: Federal parent PLUS loans might be a good candidate for refinancing to a lower rate.

One Loan, One Monthly Payment

As you enter the repayment phase of your student loans, you might also consider refinancing or consolidating your student debt.

If you have federal student loans, you may qualify for a federal Direct Consolidation Loan after you graduate, leave school, or drop below half-time enrollment.

Consolidating multiple federal loans into one allows you to make just one loan payment each month. In some cases, the repayment schedule may be extended, resulting in lower payments. Keep in mind, though, that increasing the period of time to repay loans usually means making more payments and paying more total interest.

Refinancing, on the other hand, allows you to convert multiple loans — federal and/or private — into one new private loan with a new interest rate, repayment term, and monthly payment. Refinancing can potentially save you money, but generally only makes sense if you can qualify for a lower interest rate than you currently have. For example, refinancing might be a good solution for working graduates who have higher-interest federal loans, such as unsubsidized Direct Loans and Graduate PLUS loans, or who currently have a high-interest private student loan.

You’ll want to keep in mind, however, that refinancing federal student loans with a private lender means giving up federal protections, such as income-driven repayment plans, loan forgiveness for public service, and deferment options.

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.

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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).

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

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

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

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.

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