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Federal student loans never expire. Unlike private student loans, federal loans have no statute of limitations, which is the time limit creditors have to use legal means to collect on a debt. And while the clock technically can run out on private student loans, that doesn’t mean your student loans have vanished — lenders simply can no longer sue you to collect the debt. Plus, waiting it out will wreak havoc on your finances, anyway.

As such, waiting for student loans to expire is not a recommended tactic to manage student loans. Read on to learn more about why your student loans aren’t likely to expire and more effective ways to deal with student loan debt.

Why Federal Student Loans Don’t Expire

When does my student loan expire?

The answer to that question is “never” when it comes to federal loans. There’s no statute of limitations for collections on federal student loans. This means that if you stop making payments, your loan servicer or a debt collector can sue you to force repayment, regardless of how long it’s been since you last made a payment.

So what happens if you do stop paying your federal student loans altogether? First, your total balance will continue to increase. Whether or not you’re making any payments, interest will accrue, which means that every month your lender will add your new interest fees to your principal loan balance.

After at least 270 days of non-payment, your federal student loan will be in default. This can cause a number of things to happen, including loan acceleration (meaning your entire balance becomes due) and your loan getting sent to collections, which can damage your credit score and lead to additional fees from a collection agency.

Additionally, the federal government may decide to withhold your tax refund or even garnish wages directly from your paycheck. Your loan holder can also sue you to force you to pay up.

There is one temporary exception to this situation. Following the end of the federal student loan payment pause, which lasted from March 2020 to October 2023, the Biden administration instituted a special “on-ramp” period to protect financially vulnerable borrowers from experiencing the negative consequences of missing payments.

From Oct. 1, 2023 to Sept. 30, 2024, federal loan borrowers who miss one or more payments will not be considered delinquent or in default, have their missed payments reported to the credit bureaus, or have past-due loans referred to collections agencies. Any payments missed during this time will be due once the on-ramp period is over. And the normal process around loan default will resume Oct. 1, 2024.

Recommended: What Happens When Your Student Loans Go to Collections?

Why Private Student Loans May Expire

Unlike federal student loans, private student loans may be bound by a statute of limitations on collections. The statute of limitations varies by state and is generally between three and 10 years from the date you stopped paying your loans. Once the statute of limitations is up, the debt becomes “time-barred.”

Before you stop making your monthly payments, it’s important to know that a statute of limitations is not the same thing as an expiration date on your loans. A statute of limitations is merely a limit on the time that a lender or debt collector has to sue you in court to force you to pay back the loans.

Even if your debt is time-barred, you still technically owe the money, and failure to pay could lead to student loan default. When you default, you may face negative impacts to your credit score, and you may still end up dealing with collection agencies, plus any additional fees they may charge.

One Way You Can Get Rid of Student Loans

You can technically get rid of federal student loans in bankruptcy. However, doing so is extremely rare.

To potentially get your student loans (federal or private) discharged in bankruptcy, you would have to prove that paying your loans would cause you “undue hardship” (to borrow a phrase right from the U.S. Bankruptcy Code). Proving that paying your loans would cause undue hardship typically involves passing the Brunner test. This is a tool bankruptcy courts use that basically lays out ways in which you might claim undue hardship.

In short, it’s far from a sure thing, and the process is not especially clear-cut. But whether you’re 19 or 90 years old, your federal student loans will not just automatically expire after a period of non-payment — and failing to pay has some serious consequences.

Alternative Options to Manage Student Loan Debt

Just because federal student loans don’t expire doesn’t mean there aren’t other ways to manage your student loan debt. Here are a few other options you might explore.

Public Service Loan Forgiveness

Public Service Loan Forgiveness (PSLF) is available to professionals who work for qualifying employers in certain fields such as government, the nonprofit sector, and healthcare. This program is meant to encourage graduates to fill needed jobs in the public service sector without worrying about making enough money to pay off their student debt.

PSLF requires that you make 120 payments (the equivalent of 10 years, though they don’t need to be consecutive) while working full-time for a qualifying employer. Only payments made under certain repayment programs (such as income-driven repayment) count toward forgiveness. Still, federal loan forgiveness may be a good option for public servants with lots of debt left to pay.

Income-Driven Repayment

Income-driven repayment (IDR) plans reduce your payments to a percentage of your discretionary income. For borrowers who fall below certain income thresholds, payments could be as low as $0. There are four IDR plans available today:

•   Saving on a Valuable Education (SAVE), which replaced REPAYE

•   Pay As You Earn (PAYE)

•   Income-Based Repayment (IBR)

•   Income-Contingent Repayment (ICR)

In addition to reducing payments, these plans also extend the repayment term up to 25 years. Once the repayment period is up, any remaining debt is forgiven (but may be considered taxable income). For the SAVE plan, in particular, certain borrowers with smaller balances could have their loans forgiven after just 10 years of payments. In some sense, it might seem like the loans have “expired.” But really, the loans were repaid according to the terms of the IDR plan and the debt is considered satisfied.

Student Loan Refinancing

Another option to save money on your student loans is student loan refinancing. Loan refinancing doesn’t change the underlying amount that you owe. However, it may reduce the amount of money you spend on interest and help you secure better payment terms, which can add up to some serious cash over the life of your loan. When you refinance a federal student loan, you replace it with a private student loan.

Refinancing your federal and private loans based on your current credit score and income may allow you to score a brand new loan with a better interest rate or a shorter payoff term. To see how refinancing your loans could help you spend less money in interest, you can take a look at this student loan refinance calculator. Just know that if you’re working toward PSLF, refinancing with a private lender will disqualify your loans from this and any other federal program.

The Takeaway

If you’ve been waiting around for your federal student loans to expire, you’re out of luck — federal student loans don’t expire. While private student loans may expire due to their statute of limitations, your debt won’t just disappear when this happens. Your finances will also suffer in the meantime. This is why it’s important to look into other ways to manage your student loan debt, such as student loan refinancing or income-driven repayment.

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.

Americans currently owe a total of over $1.63 trillion in federal student debt, with the average student borrower graduating with $29,100 in loans to pay off, according to the College Board.

If you have student debt, refinancing is one way you can change your repayment terms, which may make it easier or more affordable to pay off your student loans.

Student loan refinancing is when your existing loans are paid off by a new loan from a private lender, such as a bank, online lender, or other financial institution. The new loan may have a new term, a better interest rate, and adjusted monthly payments.

But there are pros and cons of refinancing student loans. While it may save you money, you can lose access to federal loan benefits and protections if you refinance federal student loans. Here’s what to consider to decide if this option is right for you.

The Pros of Student Loan Refinancing

Refinancing student loans has a number of potential benefits that could make it easier to repay your student loan debt. Here are some of the most common pros of refinancing student loans.

Lowering Your Interest Rate

Perhaps the biggest benefit of refinancing student loans is the potential to secure a lower interest rate than the ones your loans currently have. If you’re paying a high interest rate, refinancing could be worth considering, especially in a low-rate environment

Rates vary by lender, but most offer the best rates to borrowers with strong credit and a steady source of income. If you’re earning a stable income and have a good FICO score of 670 or higher, you may qualify for a competitive student loan refinance rate.

And, when you refinance to a lower interest rate, you could end up reducing the amount of money you spend over the life of the loan. Lowering your rate can also result in a more affordable monthly payment.

Reducing Your Monthly Payment

When you refinance your existing student loans, you’re given the option to adjust your repayment term. You can often choose terms anywhere from five to 20 years, depending on the lender.

Extending the term of your loan could result in more affordable monthly payments. That said, you may pay more interest over the life of the loan if you refinance with an extended term. When choosing a new repayment term, try to strike a balance between a monthly payment you can afford and a repayment term that won’t rack up a burdensome amount in interest charges.


💡 Quick Tip: Ready to refinance your student loan? With SoFi’s no-fee loans, you could save thousands.

Getting a Single Monthly Payment

Paying your bills consistently and on time is key if you want to improve your credit or maintain good credit. Payment history is an important factor in your credit score so you don’t want to miss payments.

If you owe multiple student loans, refinancing can help you combine them into one, streamlining your bills to a single payment each month. With a single monthly student loan bill, it may be easier to stay organized, make your payments on time, and stick to your debt reduction plan.

Keep in mind that you don’t have to refinance multiple student loans. You can choose to refinance a single loan if it would yield you a better interest rate. And if you do owe several loans, you can cherry-pick which ones you would like to refinance (if any) and leave the others as they are — the choice is up to you.

What’s more, federal loan borrowers also have the option of federal loan consolidation, which involves combining federal loans into a single Direct consolidation loan. This process won’t lower your interest rate, but it will keep your loans federal and help simplify repayment. Note that private student loans are not eligible for federal loan consolidation.

Choosing Between Variable and Fixed Rate Loans

When you refinance your loans, you might have the option to choose a fixed or variable rate loan. If you prefer the security of a stable rate over a longer period of time, consider choosing a fixed rate loan.

If you plan on repaying your student loans ahead of the term, you might consider choosing a variable rate. Variable rates often start lower than fixed rates, but could increase over time.

Applying With a Cosigner — or Releasing One From Your Loan

If you’ve recently graduated and haven’t built up much credit, you may benefit from applying with a cosigner. A cosigner accepts legal responsibility for your loan in the event that you’re not able to pay it.

If your cosigner has better credit and a higher income than you do, they may look more favorable to the lender, which could ultimately help you qualify for a lower interest rate. Even if you aren’t required to borrow with a student loan cosigner, some lenders might still give you the option to have one on the loan.

On the flip side, refinancing also gives you the opportunity to release a cosigner from your existing student loan. Not all lenders allow you to remove a cosigner from your loan, and those that do often have a set of eligibility requirements in order to apply for one, such as a year or two of on-time payments, a credit check, or proof of employment.

If you can refinance a co-signed student loan in your own name, you can assume full responsibility for the loan and let your student loan cosigner off the hook. Some lenders also let students take over Parent PLUS loans from their parents through refinancing, if they can meet eligibility requirements on their own.


💡 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.

The Cons of Student Loan Refinancing

While refinancing your student loans might end up lowering your interest rate or making payments easier to manage, it’s not the right decision for everyone. As mentioned earlier, there are both pros and cons of refinancing student loans. Here are some of the possible disadvantages of refinancing student loans:

Losing Access to Federal Repayment Plans

When you refinance your federal student loans with a private lender, you lose access to federal repayment plans. This includes the Standard, Graduated, and Extended Repayment plans. This could be especially important if you are planning on taking advantage of any federal income-driven repayment plans, as you would no longer be eligible.

The government offers four income-driven plans: PAYE, Income-Based Repayment, Income-Contingent Repayment, and the new SAVE plan. The SAVE plan offers the most affordable structure for borrowers to date, and it’s worth exploring if you’re having trouble paying your student loan bills on your current plan.

Since refinancing federal student loans replaces them with a private loan, you’ll also lose the opportunity to qualify for programs such as the Public Service Loan Forgiveness program, which forgives the loans of graduates working in the public sector after 10 years. It’s important to review your student loans in detail and determine which federal plans you may want to take advantage of before you consider refinancing federal student loans.

No Longer Eligible for Federal Repayment Protections

If you refinance your federal student loans with a private lender, you won’t be eligible for repayment protections like student loan deferment or forbearance. Both deferment and forbearance might give you the opportunity to temporarily pause or lower your monthly payments.

When your loan is in deferment you may or may not be responsible for paying the accrued interest on the loan. However, if your loan is in forbearance you will be responsible for paying the accrued interest on the loan.

Starting in the spring of 2020, the Department of Education offered emergency forbearance at 0% interest on all federal student loans. However, that forbearance came to an end in the fall of 2023. President Biden’s federal loan forgiveness initiative was also struck down by the Supreme Court, so that offer is no longer an option for borrowers.

Losing Any Remaining Grace Periods

Most federal student loans have a grace period — usually the first six months after you graduate — where you don’t have to make any loan payments. If you refinance your loan shortly after graduation, you might lose out on that benefit if the private lender doesn’t honor existing grace periods.

Difficult to Qualify

Unlike most federal loans, you’ll need to show that you’re creditworthy to secure a student loan refinance with a private lender — or have a cosigner with good credit who is willing to take full responsibility for your loan if you’re not able to.

The better your credit history, the more likely you are to qualify for competitive interest rates. Eligibility requirements vary from lender to lender, so it’s a good idea to shop around and compare your options. SoFi, for example, evaluates factors including employment and/or income, credit score, and financial history.

Refinancing Can Cause Repayment to Take Longer

When you refinance a student loan, you can change the terms of your loan, such as the interest rate or the term of the loan. If you increase the term of your loan, it will take longer to repay it. And even though you may lower your monthly payments, you’ll likely pay more total interest over time.

Federal Student Loan Consolidation

Student loan consolidation is different from refinancing. A Direct Consolidation Loan allows you to combine multiple federal student loans into one federal loan, resulting in a single monthly payment.

When you consolidate your loans into a Direct Consolidation Loan, you won’t necessarily lower your interest rate. The new interest rate will be a weighted average of the interest rates on your previous loans, rounded up to the nearest one-eighth of 1%.

When you consolidate your federal loans through the federal government, however, you should still have access to most federal loan benefits like income-based repayment, deferment, and forbearance.

Student Loan Refinancing With SoFi

Everyone’s financial situation is different, and it’s important that you make the best decisions for your individual circumstances. When you refinance, lenders will review your current financial situation, earning potential, and credit score (among other financial factors) to determine your new interest rate.

If you decide to move forward with student loan refinancing, consider SoFi. When you refinance with SoFi, there are no origination fees or prepayment penalties. See what you could save by refinancing with the SoFi student loan refinance calculator.

FAQ

How hard is it to qualify for student loan refinancing?

Private lenders take into account a range of factors when considering eligibility for student loan refinancing, such as your credit history, debt-to-income ratio, and employment. Applying with a qualified cosigner can help you qualify or access better rates if you can’t meet a lender’s credit requirements on your own.

Do refinanced student loans have lower interest rates?

When you refinance your student loans, a private lender pays off your existing loans and issues you a new loan with new terms. One of the potential benefits of refinancing is that you may be able to secure a lower interest rate than your existing loans. The best rates typically go to borrowers with strong credit or a creditworthy cosigner.

Can you refinance student loans with a cosigner?

Applying for student loan refinance with a creditworthy cosigner may help you qualify if you don’t meet a lender’s eligibility requirements for refinancing. Having a cosigner may also help you secure a more competitive interest rate.

Can refinanced student loans still be forgiven?

No, refinanced student loans are not eligible for federal loan forgiveness programs. Once you refinance a federal student loan, you lose access to federal benefits and protections, such as forgiveness.

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.

Sometimes, life throws you a curveball. If you’re in college when that happens, you might find yourself dropping out of school. In some situations, you may have no other choice. At other times, you can weigh the pros and cons while deciding how to proceed.

What happens to student loans if you withdraw isn’t widely discussed. We’ll walk you through the consequences of dropping out when you’ve already incurred debt, and show you ways to pay off outstanding student loans.

Do I Have To Pay Back My Student Loans If I Drop Out of School?

Regulations dictate that if you leave college or drop below half-time enrollment, you have to start paying back your federal student loans. You may have a grace period (generally, six months) before your first payment is due. Even if payments aren’t due yet, interest may still accrue during the grace period, depending on the type of loans you have.

If you have private student loans, check with your lender to determine when you need to start paying back your loans.

If you’re currently still in school or left very recently before earning a degree, you may be able to request student loan exit counseling from your school, a service normally provided only to graduates. This can help you understand your options, including potential tuition reimbursement. Each school has a different refund policy.

What Happens If I Don’t Pay My Student Loans?

The consequences of late or “delinquent” payments vary by lender, but you can generally expect to be charged late fees each time you miss the due date. If a payment is late by 30 days or more, that information can be reported to the three credit bureaus—Experian, Equifax and TransUnion—which will negatively affect your credit score.

And if you stop paying your student loans for 270 days (about 9 months), your federal loans go from being delinquent to in default. When that happens, the balance is due in full, including accrued interest, collection agency fees, and any other fines, fees, and penalties. Student loans generally cannot be discharged during bankruptcy.

The government can go to great lengths to get their money back, including:

•   Garnishing your paycheck, up to 15% of wages after deductions

•   Withholding your tax refund

•   Going after co-signers for the amount due

•   Suing you in court for the outstanding amount, plus court fees and other expenses

Note on temporary exception: Following the reinstatement of student loan payments after a pause lasting more than three years, the Biden administration instituted a 12-month “on-ramp” period to ease the transition. From Oct. 1, 2023 to Sept. 30, 2024, the most financially vulnerable federal student loan borrowers are protected against the consequences of missing payments. During this period, missed payments will not lead to loans being considered delinquent or in default, will not be reported to the credit bureaus, and will not be referred to collections agencies.

However, once the on-ramp period is over, any missed payments will be due, and the normal rules surrounding student loan delinquency and default will be reinstated.

Private student loans generally go into default after 90 days (and don’t qualify for the on-ramp protections). Private lenders may also take you to a court or use collection agencies to recoup student loan debt. Defaulting can wreck your credit, making it challenging for you to obtain a mortgage loan, car loan, credit card, homeowners insurance, or new utilities.

💡 Quick Tip: Get flexible terms and competitive rates when you refinance your student loan with SoFi.

Way To Pay Off Student Loans If You Didn’t Finish School

Once you leave school, it’s a good idea to begin paying off your loans as quickly as you can, paying more than the minimum payment whenever possible. Before paying ahead, though, check to see if any of your student loans have a prepayment penalty. If so, paying early can cost you money.

Should you refinance your student loans? What about income-driven repayment programs? Below are the best options to help ease financial hardship and avoid default.

Income-Driven Repayment Plans

Income-driven repayment (IDR) plans reduce your monthly federal student loan payments based on your discretionary income and family size. They also extend the length of the repayment period up to 25 years. After that, any remaining loan balance is forgiven, though the canceled amount may be subject to income taxes.

The government offers four income-driven repayment plans:

•   Saving on a Valuable Education (SAVE): This plan replaces another IDR plan known as REPAYE. It cuts payments to just 5% to 10% of discretionary income, and forgives remaining debt as soon as 10 years into the plan, depending on your loan balance.

•   Pay As You Earn (PAYE): This plan caps payments at 10% of discretionary income, but never pay more than you would on the Standard Repayment Plan. Forgiveness is awarded after 20 years of payments under this plan.

•   Income-Based Repayment (IBR): For borrowers who took out their loans on or after July 1, 2014, monthly payments are capped at 10% of discretionary income and any remaining debt is forgiven after 20 years. Borrowers who took out their loans before this date have payments capped at 15% of income, and remaining debt is forgiven after 25 years. Again, payments are never more than they would be under the Standard Repayment Plan.

•   Income-Contingent Repayment (ICR): Under this plan, payments are capped at the lesser of 20% of your discretionary income, or what you’d pay under a 12-year repayment plan. Remaining debt is forgiven after 25 years. This is the only IDR plan that Parent PLUS loans qualify for, though they must first be consolidated into a Direct loan.

Enrolling in an income-driven repayment plan won’t have a negative impact on your credit score or history. However, income-driven plans aren’t always the lowest monthly payment option. And even when monthly payments are lower, you will pay more interest over time (longer loan terms mean more interest payments).

Borrowers must recertify their income each year. If they fail to do so, they’ll be returned to the standard 10-year amortizing plan.

Going Half-Time

Students who are enrolled at least half-time in an eligible college or career program may qualify for an in-school deferment. This type of deferment is generally automatic. If you find the automatic in-school deferment doesn’t kick in, you can file an in-school deferment request form.

Recommended: Refinancing Student Loans with Bad Credit

Refinancing Student Loans

While you’re still able to make your student loan payments and your credit is still good, consider refinancing. You can combine multiple loans into one payment and choose the payback timeline that will give you the lowest monthly payment possible. You can check the interest rate and terms you qualify for by using SoFi’s student loan refinance calculator.

As your financial situation improves, you can make additional payments (as long as you refinance with a company that doesn’t charge a prepayment penalty) or refinance again with a new term that will accelerate payoff and allow you to pay less interest over the lifetime of the loan. You can learn all the ins and outs of that path with this handy student loan refinancing guide.

It’s important to note that by refinancing your federal student loans, you will not be able to access federal programs like income-driven repayment plans, Public Service Loan Forgiveness (PSLF), and government deferment or forbearance. If you don’t need any of those benefits, a lower student loan interest rate gained by refinancing could be worthwhile.

What To Do If You Can’t Afford Any Student Loan Payments

In many cases, the SAVE program is your best bet for reducing student loan payments, since it lowers payments to the smallest portion of income out of all the IDR plans.

However if you’re leaving school because of a temporary financial hardship—for example, you are undergoing cancer treatment or lost your job—you can also request a deferment or forbearance on your federal student loans to give yourself time to address the situation.

Although deferment or forbearance can give you short-term financial relief, these plans will increase the amount of interest you’ll pay on the loans overall, and can extend the length of the loans.

Student Loan Deferment

Student loan deferment allows eligible borrowers to temporarily reduce loan payments or pause them for up to three years, depending on the type of loan. In most cases, borrowers seeking a deferment will need to provide their loan servicer with documentation that supports their eligibility.

Deferments are typically broken down into qualifying categories:

•   Unemployment. Borrowers receiving unemployment benefits or who are actively seeking and unable to find full-time work may qualify. This deferment is good for up to three years.

•   Economic Hardship. Individuals receiving merit-tested benefits like welfare, who work full-time but earn less than 150% of the poverty guidelines for their state of residence and family size, or who are serving in the Peace Corps may qualify. This deferment may be awarded for up to three years.

•   Military Service. Members of the U.S. military who are serving active duty may qualify. After a period of active duty service, there is a grace period of 13 months, during which borrowers may also qualify for federal student loan deferment.

•   Cancer Treatment. Borrowers who are undergoing treatment for cancer may qualify. There is a grace period of six months following the end of treatment.

Student Loan Forbearance

There are two types of federal student loan forbearance: general and mandatory. Private lenders sometimes offer relief when you’re dealing with financial hardship, but they aren’t required to, so check your loan terms.

General forbearance is sometimes called discretionary forbearance. That means the servicer decides whether or not to grant your request. People can apply for general forbearance if they’re experiencing financial problems, medical expenses, or employment changes.

General forbearance is only available for certain student loan programs, and is granted for up to 12 months at a time. After the 12 months are up, you are able to reapply if you’re still experiencing difficulty.

Mandatory forbearance means your servicer is required to grant it under certain circumstances. The Federal Student Aid website has a full list of criteria for mandatory forbearance. Reasons include:

•   Medical residency or dental internship

•   Participating in AmeriCorps

•   Teachers who qualify for teacher student loan forgiveness

•   National Guard duty

•   Monthly student loan payments that are 20% or more of your gross income

Similar to general forbearance, mandatory forbearance is granted for up to 12 months at a time, and you can reapply after each 12-month period. You still have to pay interest on all types of federal loans while they’re in forbearance.

If you’re pursuing federal student loan forgiveness, any period of forbearance probably will not count toward your forgiveness requirements.

The Takeaway

Should you unexpectedly need to drop out of school, you’ll still be responsible for paying back your student loans. If you’re able to work, you may want to enroll in an income-driven repayment plan — though keep in mind that these programs don’t always offer the lowest monthly payment possible.

If you are unable to work, see if you’re eligible for student loan deferment or forbearance. Finally, if you have a strong credit history, refinancing your student loans may save you money on interest while lowering your monthly payment. Just be aware that refinancing federal loans means losing access to federal protections and PSLF loan forgiveness.

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.

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Struggling to make your federal student loan payments? An income-based repayment plan may ease the burden. Previously, two of the primary income-based plans were Pay As You Earn (PAYE) and Revised Pay As You Earn (REPAYE). But the former is no longer taking new enrollees, and the latter has been replaced by a new program — the SAVE Plan. In all cases, the plans adjust your monthly loan payments based on your income and family size. In this article we’ll look at how SAVE compares to the old REPAYE, as well as to the PAYE Program.

PAYE vs REPAYE: An Overview

The former PAYE and REPAYE federal student loan payment plans were similar, but differed in a few key areas. Both plans had income-based repayment terms generally set at 10% of a borrower’s discretionary income.

Some borrowers didn’t qualify for PAYE because the initial enrollment step required partial financial hardship as determined by your annual discretionary income and family size. You couldn’t enroll into PAYE if your federal student loan monthly payment would be lower under the Standard Repayment Plan. You also cannot enroll into PAYE after June 30, 2024; however, current PAYE enrollees can remain on the plan after that date.

The 2023 debt ceiling bill officially ended the three-year Covid-19 forbearance, requiring federal student loan interest accrual to resume on Sept. 1, 2023, and payments to resume in October 2023 under any federal student loan repayment plan.

Here are the key differences between the former PAYE and REPAYE plans:

•   PAYE required partial financial hardship to sign up for first-time enrollment

•   No new PAYE enrollees are being accepted, but borrowers already enrolled in PAYE can continue repaying under that plan after July 1, 2024

•   REPAYE did not require low-income, moderate-income, or partial financial hardship to enroll

•   REPAYE no longer exists as a federal student loan repayment plan

SAVE vs REPAYE

Saving on a Valuable Education (SAVE) Plan is the federal income-driven repayment (IDR) plan that replaced REPAYE in July 2023. If you were enrolled on the REPAYE Plan at that time, you’ve been automatically enrolled into the SAVE Plan.

The SAVE Plan is essentially a major upgrade to the former REPAYE Plan, as shown in the table below:

SAVE vs PAYE

Both SAVE and PAYE are federal income-driven repayment plans not available to private student loan borrowers. New enrollments in PAYE ended in July 2024.

The below table highlights the key differences between SAVE and PAYE:

Depending on your original principal balance amount, student loan forgiveness on the SAVE Plan may occur after 10 to 25 years of monthly qualifying payments beginning in July 2024.

If you’re a federal student loan borrower working toward Public Service Loan Forgiveness, you may qualify for forgiveness of any remaining loan balance after 10 years of qualifying payments.

Recommended: Student Loan Forgiveness Programs


💡 Quick Tip: Ready to refinance your student loan? With SoFi’s no-fee loans, you could save thousands.

What Is the Interest Subsidy?

The SAVE Plan has a permanent interest subsidy, whereas the PAYE Plan offers a temporary interest subsidy to eligible borrowers.

If you’re on the SAVE Plan, 100% of your unpaid accrued interest is not charged if your monthly payment is less than the interest accruing. The effect of this permanent interest subsidy is that your loan balance won’t grow over time if your SAVE Plan monthly payment is less than the interest accruing.

Under the PAYE Plan, the U.S. Department of Education may provide an interest subsidy if your monthly payment is less than the interest accruing. This PAYE Plan interest subsidy is discontinued after the first three years of repayment and only applies to Direct Subsidized Loans and the subsidized portion of Direct Consolidation Loans.

Some borrowers on the PAYE Plan may see their loan balances grow over time. This can happen if you’re not covered by an interest subsidy when making a monthly payment that’s insufficient to pay the accrued interest. (Effective July 1, 2023, your unpaid accrued interest is not capitalized if you switch from PAYE to another repayment plan, fail to recertify your income, or no longer have a partial financial hardship.)

Recommended: Direct vs. Indirect Student Loans: What’s the Difference?

Answers to Common Questions

How do I apply for a federal IDR plan?

You only need to submit one application for any federal income-driven repayment plan and will need to supply financial information. It will take about 10 minutes. The Federal Student Aid Office also will recommend a repayment plan based on your input. Remember that private student loans are not eligible for federal IDR plans.

I want to apply for PAYE. How is partial financial hardship defined?

Unfortunately, there’s no option to apply for PAYE after July 1, 2024.

What if I’m in PAYE and no longer demonstrate hardship?

Your loan payments will stop being based on your income. Instead, your monthly payment will be based on the amount you would pay under the 10-year Standard Repayment Plan. Your maximum required payment in PAYE will never be higher than the 10-year standard payment amount.

What if I forget to recertify my income and family size?

If you’re on the SAVE Plan, failing to recertify your income and family size may switch you to an alternative repayment plan with a larger monthly payment.

If you’re on the PAYE Plan, failing to recertify by the annual deadline may give you a larger monthly payment resembling what you would pay under the Standard Repayment Plan.

Auto-recertification is available beginning in July 2024 if you agree to securely share your tax information with the U.S. Department of Education.

Does a Parent PLUS Loan qualify for SAVE?

No. Federal Parent PLUS Loans are not eligible for the SAVE plan.

Recommended: Types of Federal Student Loans

Income-Driven Repayment Alternatives

One of the alternatives to federal income-driven repayment is student loan refinancing. You can refinance your student loans — private and federal — with a private lender and potentially qualify for a lower interest rate. (Note: You may pay more interest over the life of the loan if you refinance with an extended term.)

The federal Direct Consolidation Loan program combines federal student loans into a single federal loan, but the interest rate is the weighted average of the original loans’ rates rounded up to the nearest eighth of a percentage point, which means the borrower usually does not save any money. Lengthening the loan term can decrease the monthly payment, but that means you may spend more on total interest.

Federal IDR plans like SAVE offer federal protections and benefits, such as access to the Public Service Loan Forgiveness program. Any loans you refinance with a private lender will not be eligible for PSLF, Teacher Loan Forgiveness, or federal IDR plans. A student loan refinancing calculator can help you determine whether student loan refinancing is right for you.

💡 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.

The Takeaway

The SAVE Plan is generally the most affordable federal student loan repayment plan. It replaced the former REPAYE Plan and offers a permanent interest subsidy, among other perks that you couldn’t get with PAYE.

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 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 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.

SOSL0923004

While on the road to repayment, there will likely be instances when you need to know your student loan account number (like if you want to change repayment plans or refinance). But you probably haven’t committed this number to memory. In fact, you might not even know how to find it.

If you need your student loan account number but don’t know how to get it, don’t worry. Read on to learn what a student loan account number is, why you need it, and how to find it.

What Is a Student Loan Account Number?

Your student loan account number is a unique 10-digit number that is given to you by your student loan provider and is used for identifying your federal student loan.

Students can use their student loan account number to look up their payments and see how much of their balance is left. This number is also used to verify a student’s identity when they are using services offered by the loan provider, such as mobile banking or trying to obtain previous statements.

Some financial institutions and banks may ask you for your student loan account number before allowing you to borrow money or open a new credit card. You’ll also need to know this number if you are considering refinancing those loans.

In addition, your student loan account number is used for tax purposes in order to verify that the student loan on a tax return is yours.

Students with private loans won’t have a federal student loan identification number associated with those loans. Instead, you’ll need to contact the lender directly in order to get account information. This includes any private student loans that were originally federal ones but were refinanced into a private loan, since those balances would now show in government records as $0.00.


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

How to Find Your Student Loan Account Number

The easiest place to find your student loan account number is on the monthly student loan statements sent by your loan provider. You should be able to find it on the upper right or left corner near your name, or somewhere in that vicinity. You can also check your e-mail account if you’re receiving your statements by e-mail.

If you don’t have access to any of your monthly statements, you can log into the Federal Student Aid website using your FSA (Federal Student Aid) ID to see your loan details. This will allow you to see your student loan account number, along with additional information about your loans.

Don’t have an FSA ID? Not to worry.

More About the FSA ID

The FSA ID replaced the Federal Student PIN in 2015, so students who haven’t taken out new student loans or haven’t logged into the Federal Student Aid website since 2015 might not have an FSA ID yet.

Students who don’t have an FSA ID can create one by visiting the who don’t have an FSA ID can create one by visiting the . Once you sign up for an FSA ID, the federal government will verify your information with the Social Security Administration. Once your information is verified, you will be able to use your FSA ID to obtain information about your federal student loans.

The site, managed by the U.S. Department of Education, can provide a convenient way to get a full picture of all your federal loans, including:

•   How many federal student loans you have

•   Their loan types

•   The original balance on each loan

•   Current loan balances

•   Interest rates on loans

•   Whether any loans are in default

•   Loan service provider’s names

•   Contact information of the loan service providers

Recommended: How Much Do I Owe in Student Loans?

Identifying Lenders

Federal student loans aren’t directly administered by the government. While the government is the lender, these loans are managed by a variety of loan servicers that take on administrative tasks such as sending bills to borrowers, creating repayment plans, and consolidating loans.

It’s important to know which servicers are overseeing your loans so you know where to send payments and who to reach out to if you have questions or need to discuss an alternative payment plan.

The U.S. Department of Education assigns loan to these companies:

•   Edfinancial : 1-855-337-6884

•   MOHELA : 1-888-866-4352

•   Nelnet : 1-888-486-4722

•   Aidvantage : 1-800-722-1300

•   ECSI : 1-866-313-3797

•   Default Resolution Group : 1-800-621-3115

As mentioned, you can find information about which entities are servicing your federal loans when logged on to StudentAid.gov. Another way to confirm a loan servicer is to call the Federal Student Aid Information Center (FSAIC)  at 1-800-433-3243.

As far as private student loans go, the lender is typically a bank, online lender, or other financial institution. Contact information should be available on the bills and other information sent to you. This private student loans guide can give you more information about how these loans work.

If these documents have been misplaced, the private lender’s information can typically be found on your credit reports. You can request a free credit report from each of the three reporting agencies — Equifax, Experian, and TransUnion — by visiting AnnualCreditReport.com. Through the end of 2023, you can receive a free copy of your reports weekly.

Finally another way to track down your private student loan lenders is by contacting your college’s financial aid office.

Paying Back Student Loan Debt

With federal student loans, there are multiple payment plans available:

•   Standard repayment plan: This is the default repayment plan, which lasts 10 years. Borrowers will typically pay less interest over time on the standard plan versus other repayment plans. However, it may not be a good choice if you’re interested in getting your loans discharged through Public Service Loan Forgiveness (PSLF).

•   Graduated repayment plan: With this plan, payments start low and increase every two years. This can help students who don’t earn a lot now but expect their income to increase. However, you’ll pay more interest over time with this plan than if you stuck with the standard repayment plan.

•   Extended repayment plan: Payments can be made during a period of up to 25 years. This can help lower monthly payment amounts, but students will pay back more interest over the life of the loan than those who use the standard or graduated repayment plans.

•   Income-driven repayment plan (IDR): There are four different IDR plans, which cap student loan payments at a percentage of the borrower’s income. These plans can be a good choice for borrowers who are seeking loan forgiveness, but they will typically pay more interest overall than under the standard plan.

To pay off student loans more quickly, one option is to put extra money toward student loans each month through larger or additional payments. By paying more toward the principal balance, you won’t just pay off your loan faster. You’ll also reduce the total amount of interest paid over the life of the loan, saving you money in the long run. It’s a good idea to contact the lender or loan servicer to ensure that any extra payments are applied to the principal as intended.

Alternatively, you could pursue certain loan forgiveness programs, such as PSLF or Teacher Loan Forgiveness.

Recommended: 7 Tips to Lower Your Student Loan Payments

Refinancing Student Loans – Pros and Cons

Another option to consider is to refinancing student loans. There are pros and cons to that strategy you’ll want to consider.

Advantages of refinancing student loans include the following:

•   Loans can be combined into one single loan and payment, which can be easier to manage.

•   You may get a lower interest rate. If you have good credit and a solid income, you may qualify for a better rate, which could help reduce what you pay over the life of the loan. You can see what you might save by using a student loan refinancing calculator.

•   Some private lenders, including SoFi, will consolidate federal and private student loans and refinance them into one loan.

•   The term length can be adjusted. A longer repayment term can help to lower the monthly payment (though you may pay more interest over the life of the loan if you refinance with an extended term), while a shorter one can help to reduce the total amount of interest paid back over the life of the loan.

Disadvantages of refinancing include:

•   Refinancing federal student loans with a private lender means that borrowers will lose access to benefits associated with federal student loans, including income-driven repayment options and loan forgiveness programs.

•   Other federal protections that will no longer apply, including deferment and forbearance, which allow payments to be temporarily reduced or paused.

•   Most federal student loans have a six-month grace period, during which you don’t have to make any loan payments. If you refinance your loan soon after graduation, you might lose out on that benefit if your private lender doesn’t offer a grace period.

The Takeaway

It’s important to know your student loan account number, which can be found on your federal loan statements or online.

This 10-digit number can be used to access loan information, use other lender services and apps, and help you figure out a payment plan.

You may also need your student loan account number when applying for a credit card or other loan, and if you decide to refinance your student loan.

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.