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Jobs that help pay off a portion of student loans are becoming more common and for a good reason. The average federal student loan borrower has over $37,000 in student loan debt, while borrowers with private student loans owe nearly $55,000, on average.

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

Types of Job-Based Student Loan Assistance Programs

There are two types of student loan assistance you may receive through an employer: repayment assistance programs where your employer is a participant and repayment assistance benefits your employer offers directly.

Repayment Assistance Programs

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

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

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

Recommended: A Guide to Military Student Loan Forgiveness

Repayment Assistance Benefits

At the start of 2022, about 7% of employers in the U.S. offered student loan repayment assistance as a benefit, according to the Society for Human Resource Management. The terms of repayment assistance benefits can vary by employer. For example, some may offer to match a portion of the employee’s payments and others may simply pay a set amount toward an employee’s loan balance each month.

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


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

Types of Jobs That Offer Student Loan Forgiveness

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

1. Federal Agency Employee

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

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

2. Public Service Worker

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

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

3. Medical Field

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

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

Refinancing medical school student loans may be another option to consider for medical professionals who are not pursuing any loan forgiveness programs. While refinancing would eliminate loans from any federal forgiveness programs, it could potentially allow borrowers to secure a more competitive interest rate.

4. Automotive Professionals

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

5. Lawyer

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

6. Teacher

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

7. Peace Corps

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

8. Veterinarian

Veterinarians who work in underserved areas may qualify for up to $25,000 in student loan repayment assistance through the U.S. Department of Agriculture’s Veterinary Medicine Loan Repayment Program. Eligible veterinarians must agree to serve in a NIFA-designated veterinarian shortage situation for a period of three years to qualify.

15 Major Companies that Repay Student Loans

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

1. Abbott Laboratories

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

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

2. Aetna

In addition to a tuition reimbursement program, healthcare company Aetna also matches student loan payments for eligible employees who meet certain requirements. For full-time employees, the program matches student loan payments up to $2,000 per year, with a lifetime maximum of up to $10,000 for qualifying loans. For part-time employees, the program matches up to $1,000 a year, with a lifetime maximum of $5,000.

3. Ally Financial

Financial services company Ally provides $100 per month toward student loan payments, with a lifetime maximum cap of $10,000. The company also reimburses tuition up to $10,000 per year to help employees keep educational debt to a minimum.

4. Chegg

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

5. Estee Lauder

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

6. Fidelity

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

7. Google

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

8. Hulu

Streaming service Hulu pays up to $1,200 a year per employee to match their student loan payments.

9. Live Nation

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

10. New York Life

New York Life’s student loan assistance program, Vault Pay, contributes $170 per month over five years toward student loans that are in good standing. In other words, employees can receive up to $10,200 while enrolled in the program.

11. Nvidia

If you’ve graduated within the last three years, Nvidia will match your student loan payments dollar for dollar up to $3500 per month. The lifetime cap is $30,000 in assistance. To be eligible, you must be a full-time or part-time U.S. employee working 20 hours or more per week.

12. Penguin Random House

New York Life’s student loan assistance program, Vault Pay, contributes $170 per month over five years toward student loans that are in good standing. In other words, employees can receive up to $10,200 while enrolled in the program.

13. PricewaterhouseCoopers (PwC)

As a participating associate or senior associate, you can receive $1,200 in student loan payments each year. The company estimates that this benefit can help to reduce student loan principal and interest by up to $10,000, and shorten loan payoff by up to three years.

14. SoFi

As an employee with SoFi, you’ll get $200 each month in student loan repayment assistance. The company also provides free financial classes.

15. Staples

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

How Is Student Loan Assistance Taxed?

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

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

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

💡 Quick Tip: Refinancing could be a great choice for working graduates who have higher-interest graduate PLUS loans, Direct Unsubsidized Loans, and/or private loans.

Negotiating a Student Loan Repayment Benefit

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

Doing Your Research

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

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

Making Your Interests Clear

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

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

Asking for a Signing Bonus Instead of Monthly Payments

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

Recommended: How to Negotiate Your Signing Bonus

Asking for the Opportunity to Revisit the Request in the Future

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

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

Making Student Loan Repayment a Priority

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

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

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

The Takeaway

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

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

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

FAQ

What careers pay off student loans fastest?

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

What companies pay off student loans?

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

What kind of jobs qualify for student loan forgiveness?

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

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.

Personal loans hold appeal with their capacity to wipe out debts in a single stroke. With student loan debt hovering at, it may appear at first glance that a personal debt is the answer to the problem.

However, using a personal loan to pay off student debt is widely seen as not the best idea. We will break down the process of taking out personal loans to pay off student loans and explain the serious drawbacks.

Can You Use a Personal Loan to Pay Off Student Loans?

While it may sound possible to use a personal loan to pay off your student loans, either federal or private, many lenders may not approve your application if they know you will be using the loan for this purpose.

A personal loan is a loan for which the borrower receives a one-time, lump sum amount of money and repays it, with interest, over a set amount of time in equal installments, typically monthly. Some common uses of personal loans are for debt management, home repairs and maintenance, vacation expenses, and wedding expenses.

Personal loan lenders dictate terms on the uses for the money. Many of these lenders prohibit the use of a personal loan for paying off student loan debt. And you are required to sign a loan agreement that says you will abide by the lender’s terms and forbidden uses.

If you use the money for a prohibited purpose and the lender learns this, you could be held responsible for paying back the full amount immediately. Also, knowingly providing false information on a loan application is considered fraud and is a crime.

For many people looking to replace their federal student loan with another type of repayment, student loan refinancing presents more attractive options than getting a personal loan. Using other loans to pay off student loans requires careful consideration.

Why Refinancing Your Student Loans Might Be a Better Plan

When it comes to either reducing your monthly payment on your loans or paying less in interest, you may want to consider refinancing your student loans with private student loans. (Note: You may pay more interest over the life of the loan if you refinance with an extended term.)

Refinancing your student loans means that you take out a new private student loan to pay off your existing student debt. When you do this, you might be able to save money if you qualify for a lower interest rate on your private student loan than on a personal loan. Interest rates vary but the average private student loan interest rate ranges from 4% to almost 15%. The national average on a personal loan was 11.48% in Q2 2023, according to the Federal Reserve.

You might also consider getting a longer-term private student loan with lower monthly payments. This will likely mean that you’ll pay more in interest over the life of your loan, but that could give your budget some breathing room. A student loan refinancing calculator can help show how much you may be able to save each month by refinancing your existing student loans.

While refinancing student loans may help students save money, refinancing federal student loans means forfeiting benefits that you might otherwise qualify for, such as deferment, forbearance, and income-driven repayment plans.

While private student loans don’t offer the same protections and benefits as federal student loans, some do offer deferment or forbearance in certain circumstances. Personal loans do not typically offer these benefits.

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

Pros of Using Personal Loans to Pay off Student Debt

Let’s say you have found a lender who doesn’t prohibit using a personal loan to pay off student debt and you want to go forward.

There are a few possible benefits in certain circumstances.

•  A potential reduction in the amount of interest that you’re paying if you manage to qualify for a lower rate on your personal loan than what you’re paying for the student loan.

•  You might qualify for a different loan term — or length — potentially reducing your monthly payments by spreading them out over a longer period of time.

•  It is difficult (though not impossible) to discharge a student loan in a bankruptcy. In some cases, it is easier to discharge a personal loan.

Cons of Using Personal Loans to Pay off Student Debt

There are some large drawbacks to consider. It doesn’t make much sense to trade in one loan for another with higher interest. The interest rate on a federal student loan is currently 5.5% for an undergraduate degree and 7% for a graduate degree. As stated above, the national average on a personal loan was 11.48% in Q2 2023, according to the Federal Reserve.

Here are other cons:

•  You’ll forfeit protections and benefits of federal student loans such as the six-month grace period after graduation and the ability to defer or forbear your loans.

•  If you have federal student loans, you also lose the opportunity to use income-driven repayment plans to repay your loans and to take part in any student loan forgiveness programs.

•  If you pursue a personal loan to pay for student loans even though the lender prohibits that use and it is discovered, the loan will be canceled if not yet disbursed, you may have to repay the full amount immediately, and you are open to criminal prosecution for fraud.

•  The lender will assess your creditworthiness, which typically includes checking your credit, during the approval process. A “hard check” usually deducts several points from your credit rating temporarily. Most federal student loans don’t require a hard credit check.

Starting to Repay Your Student Loan Debt

When you graduate from college, you don’t have to start repaying your federal student loans right away.

Some federal student loans have a student loan grace period of 6 months, but with some it can last as long as 9 months. Interest may accrue while your loans are in the grace period, so some people make interest-only payments so that the total loan balance does not increase.

If you’re unable to pay your federal student loans after the grace period ends, you may be able to defer your loans for a number of reasons including if you’re returning to school, are unemployed, or have recently been on active duty service in the military.

But what happens if you can’t afford your payments but don’t fit any of those criteria and don’t have any other help paying for school?

As your salary increases, you will likely be better financially able to pay your loans but, in the first few years after graduation your salary may not cover much more than basic expenses.

There are other ways you can lower your payments.

Recommended: Examining How Student Loan Deferment Works

Basing Student Loan Payments Off Your Monthly Income

After a three-year pause due to Covid-19 hardship, the Debt Ceiling Bill required federal student loan payments to resume, with interest accrual restarting on Sept. 1, 2023 and payments due starting in October.

If you’re struggling to cover your basic monthly living expenses, you might want to look into the “On-Ramp” created by President Joe Biden earlier this year. Running from October 1, 2023 to September 30, 2024, the plan specifies that financially vulnerable borrowers who miss monthly payments during this period are not considered delinquent, reported to credit bureaus, placed in default, or referred to debt collection agencies.

Another option is enrolling in an income-driven repayment program.

There are various repayment plans to choose from that allow you to limit your monthly payments to a percentage of your monthly discretionary income. That will often reduce your monthly payments to a more manageable level.

President Biden’s Saving on a Valuable Education (SAVE) Plan is replacing other IDR programs as the main offering of the Department of Education. Like other plans, it calculates your monthly payment amount based on your income and family size. The SAVE Plan provides the lowest monthly payments of any IDR plan available to nearly all student borrowers, says the DOE.

After 20 to 25 years of on-time student loan payments — or 10 years if you’re enrolled in the Public Service Loan Forgiveness Program — your loans may qualify to be forgiven under these repayment plans. If you’re interested in enrolling in one of these plans, contact your student loan servicer for information on how to do so.

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

The Takeaway

When deciding whether to use a personal loan or student loan refinancing to pay off existing student debt, there are many options to choose from. A good way to begin is to consider your current budget (how much money do you have to allocate toward student loan payments), what your goal is (e.g., lowering your interest rate, lowering your monthly payment, paying off the debt as soon as possible), and other overall financial goals.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. Checking your rate takes just a minute.

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.

SOSL0923024

After four (or more) years of classes, college students graduate into a new reality: employment and student loan payments. Navigating repayment may require planning and diligent budgeting, but with the right foundation, you can find a repayment plan that works for your personal needs.

As a general rule of thumb, the Consumer Financial Protection Bureau (CFPB) recommends limiting the total borrowed to no more than your expected starting annual salary when you leave school. But, when young students are selecting colleges and evaluating costs, it can be tough to understand or predict how much they’ll earn after graduating.

Here are some potential strategies for student loan repayment so you can determine what percentage of your income should go to paying student loans.

Calculate How Much Your Loan Costs Each Month

You’ll want to understand how much your loan costs each month. If you only have one student loan, this may be easy — the total would be your monthly loan payment.

If you have multiple loans with different lenders, you may have to do a bit more math to sum up the total amount you are spending on your loan payments monthly.

If, after calculating your monthly loan payments, you find you are spending a much higher percentage of your income on debt payments than you have outlined, you may want to adjust your budget, or see if you can adjust how much you are paying each month to your student loans.

Keep in mind that lengthening the loan term on your student loans may result in lower monthly payments, but may cost more in interest over the life of the loan.

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

Determining Your Student Loan Payment as a Percentage of Income

When it comes to repaying your student loans, your first goal might be to make, at the very least, the minimum monthly payment on each of your student loans. Failing to do so means your loan could become delinquent, and after 90 days of delinquency, your loan servicer can report the late or missed payments to the credit bureaus and your credit score may be affected.

If you don’t know what your monthly payments are, you can use our student loan calculator to get an estimate. It can give you a good idea of what you’ll pay each month.

To calculate the percentage of your income, divide your total monthly loan payment by your income. For example, if your monthly loan payment was $400 and your monthly income was $5,000, your loan payment would be 8% of your monthly income.

Consider the 50/30/20 Rule and Tweak it for Debt

The 50/30/20 budgeting rule outlines spending in the following categories:

•   50% of your income is budgeted toward needs

•   30% of your income is budgeted toward wants and discretionary expenses

•   20% of your income is allocated for savings and paying off debt

Using the general framework can help borrowers create a budget that makes sense for their lifestyle and needs, without being overly prescriptive. If you have a lot of student loan debt that you are focusing on repaying, you can adjust the percentage allocation so that you are funneling more money toward your debt.

Because on-time payments account for 35% of your FICO® score, setting up a budget that helps you make on-time payments each month is one of the best tips for building credit.

Income-Driven Repayment

If you have federal student loans and are struggling to make payments on the standard 10-year repayment plan, one alternative you could consider is income-driven repayment (IDR). On an income-driven repayment plan, your monthly payments are determined as a percentage of your income.

There are four options for income-driven repayment. Depending on the plan you enroll in, the repayment term is extended to 20-25 years and payments are capped at 10% to 20% of your income. More precisely, the payment amount is calculated as a percentage of your discretionary income — the income that is left after subtracting taxes and other mandatory living expenses.

The most recent addition to IDR options is the Saving on a Valuable Education (SAVE) program, which replaces the Revised Pay As You Earn (REPAYE) program. SAVE caps payments to 10% of discretionary income (that threshold will drop to 5% for undergraduates starting in July 2024) and shields more income from the payment calculation. Additionally, if your payments are too low to cover accrued interest charges, the government subsidizes the difference so that your balance doesn’t balloon over time.

While income-driven repayment plans might help make monthly payments more manageable, extending the length of the loan means you could end up paying more interest than you would on the standard repayment plan. The good news is that if you still have a balance at the end of the repayment term, your remaining debt is discharged (although it may be taxed).

Making Extra Payments Based on Your Monthly Income

If you want to accelerate your student loan repayment, consider paying an additional percentage of your income toward student loans. If you are using a 50/30/20 budget, but want to make monthly overpayments, you may instead choose to do a 50/25/25 budget, where you reduce your discretionary spending by 5% each month and apply those funds as an additional student loan payment instead.

Only you can determine where you want to focus your financial energy. An online student loan payoff calculator could help determine how much your overpayment could accelerate your loan payoff and save you in interest.

Recommended: 7 Tips to Lower Your Student Loan Payments

Additional Options for Accelerating Your Student Loan Repayment

If your budget is already lean and you don’t have the room to contribute extra income toward student loans every month, there are alternatives that could help you speed up your repayment plan.

Part-Time Job or Side Hustle

One idea is to pick up a part-time job or find a side hustle that allows you to bring in a little bit of extra cash. Then you could focus all of your side hustle income toward student loan repayment. It’s money you didn’t have before, so your budget won’t have to make any sacrifices.

Another option is to focus any unexpected or windfall money toward student loan repayment. When you receive a bonus at work or a birthday check from Aunt Edna, you could contribute that money to your student loans instead of spending it on a splurge expense for yourself.

Student Loan Refinancing

Finally, you can also improve your existing federal or private student loan situation. Student loan refinancing could help you secure a lower interest rate, which could mean spending less money over the life of the loan.

Recommended: Should You Refinance Your Student Loans?

As part of the refinancing process, you’ll be able to select a new repayment term. Shortening the repayment term could also mean you pay less in interest over the life of the loan. You also have the option to lengthen the loan term. If you do, you’ll spend more money in interest over that longer term, but it could mean a lower monthly payment if you need to free up some cash.

When you apply to refinance a student loan, lenders will review your credit history and employment history, among other factors. Refinancing student loans with bad credit, while possible, may be more challenging. Those with a low credit score or limited credit history may want to consider establishing credit before they apply for refinancing.

Another option for borrowers with a less-than-stellar credit score may be adding a cosigner to strengthen the application. A cosigner agrees to repay the loan if the primary borrower fails to do so. Refinancing without a cosigner may make sense for borrowers who have had time to establish credit. For more detailed information, visit SoFi’s student loan refinancing guide.

It is important to note that if you refinance your federal loans with a private lender, you will lose access to federal benefits such as loan forgiveness or income-driven repayment plans.

To find out how student loan refinancing could help improve your student loan repayment prospects, use SoFi’s student loan refinance calculator.

The Takeaway

There is no single answer for what percentage of your income should be allocated to paying off student loan debt. It’s important to make your monthly minimum payments to avoid delinquency or default. Beyond that, you may consider making overpayments to accelerate your student loan payoff.

When you refinance with SoFi, there are no origination fees or prepayment penalties and you’ll gain access community events. You can start the application online and find out what interest rate you pre-qualify for in just minutes.

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.

If you’ve taken out a Parent PLUS loan to help your child through college, you may be wondering if it’s possible to transfer the loan into your child’s name now that they have an income. While there are no federal loan programs that allow for this, there are other options that allow your child to take over the debt.

How to Transfer a Parent PLUS Loan to a Student

In order to transfer a Parent PLUS loan to a child or student, the student can apply for student loan refinancing through a private lender. With a student loan refinance, the child takes out a refinanced student loan and uses it to pay off the Parent PLUS loan. The student is then responsible for making the monthly payments and paying off the loan.

To get a student loan refinance and use the funds to pay off a Parent PLUS loan, simply have your child fill out a student loan refinancing application. Make sure to include the Parent PLUS loan information in the application.
If approved, the student can pay off the Parent PLUS loan with their new loan and begin making payments on the new loan.

Advantages of Refinancing a Parent PLUS Loan

The main advantage of refinancing a Parent PLUS loan is to get the loan out of the parent’s name and into the student’s. However, there are other potential advantages to refinancing student loans, including:

•   Lowering your interest rate

•   Reducing your monthly payments

•   Paying off your loan quicker

•   Allowing the student to build a credit history

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

Disadvantages of Refinancing a Parent PLUS Loan

While it may be beneficial to get the loan out of the parent’s name and into the student’s, there are some disadvantages that should be considered, such as:

•   Losing federal student loan benefits, including income-driven repayment, deferment options, and Public Service Loan Forgiveness

•   Possibly getting a higher interest rate, especially if the student has poor credit

•   The student is now responsible for the monthly payment, which might become a hardship if their income is low

If you do choose to refinance your Parent PLUS loan by means of a student loan refinance, you should note that this process is not reversible. Once your child signs on the dotted line and pays off the Parent PLUS loan, the debt is now theirs.

Parent PLUS Loan Overview

The Department of Education provides Parent PLUS loans that can be taken out by a parent to fund their child’s education. Before applying, the student and parent must fill out the Free Application for Federal Student Aid (FAFSA®). Then the parent can apply directly for a Parent PLUS loan, also known as a Direct PLUS Loan.

The purpose of a Parent PLUS loan is to fund the education of the borrower’s child. The loan is made in the parent’s name, and the parent is ultimately responsible for repaying the loan. Parent PLUS loans come with higher interest rates and origination fees than federal student loans made to students. Further, these loans are not subsidized, which means interest accrues on the principal balance from day one of fund disbursement.

Parents are eligible to take out a maximum of the cost of attendance for their child’s school, minus any financial aid the student is receiving. Payments are due immediately from the time the loan is disbursed, unless you request a deferment to delay payment. You can also opt to make interest-only payments on the loan until your child has graduated.

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

Pros and Cons of Parent PLUS Loans

Parent PLUS loans allow you to help your child attend college without their accruing debt.

Pros of Parent PLUS loans include:

You can pay for college in its entirety. Parent PLUS loans can cover the full cost of attendance, including tuition, books, room and board, and other fees. Any money left over after expenses is paid to you, unless you request the funds be given directly to your child.

Multiple repayment plans available. As a parent borrower, you can choose from three types of repayment plans: standard, graduated, or extended. With all three, interest will start accruing immediately.

Interest rates are fixed. Interest rates on Parent PLUS loans are fixed for the life of the loan. This allows you to plan your budget and monthly expenses around this additional debt.

They are relatively easy to get. To qualify for a Parent PLUS loan, you must be the biological or adoptive parent of the child, meet the general requirements for receiving financial aid, and not have an adverse credit history. If you do have an adverse credit history, you may still be able to qualify by applying with an endorser or proving that you have extenuating circumstances, as well as undergoing credit counseling. Your debt-to-income ratio and credit score are not factored into approval.

Cons of Parent PLUS loans include:

Large borrowing amounts. Because there isn’t a limit on the amount that can be borrowed as long as it doesn’t exceed college attendance costs, it can be easy to take on significant amounts of debt.

Interest accrues immediately. You may be able to defer payments until after your child has graduated, but interest starts accruing from the moment you take out the loan. Subsidized loans, which are available to students with financial need, do not accrue interest until the first loan payment is due.

Can a Child Make the Parent PLUS Loan Payments?

Yes, your child can make the monthly payments on your Parent PLUS loan. If you want to avoid having your child apply for student loan refinance, you can simply have them make the Parent PLUS loan payment each month. However, it’s important to note that the loan will still be in your name. If your child misses a payment, it will affect your credit score, not theirs. Your child also will not be building their own credit history since the debt is not in their name.

Parent PLUS Loan Refinancing

As a parent, you may also be interested in refinancing your Parent PLUS loan. Refinancing results in the Parent PLUS loan being transferred to another lender. By transferring your loan, you may be able to qualify for a lower interest rate. Securing a lower interest rate allows you to pay less interest over the life of the loan — and if you also shorten your loan term, you can pay off the loan more quickly.

When you refinance Parent PLUS loans, you do lose borrower protections provided by the federal government. These include income-driven repayment plans, forbearance, deferment, and federal loan forgiveness programs. If you are currently taking advantage of one of these opportunities, it may not be in your best interest to refinance.

At SoFi, you can refinance federal Parent PLUS loans and qualified private student loans into one new loan with one convenient payment. You can do this on your own and keep the Parent PLUS loan in your name, or you can have your child apply for student loan refinancing and use that money to pay off your Parent PLUS loan. With SoFi, there are no application fees, no origination fees, and no prepayment fees.

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

FAQ

What if I can’t pay my Parent PLUS loans?

If you are struggling to pay your Parent PLUS loan, we recommend getting in touch with your lender and asking for a deferment or forbearance to temporarily suspend your payments. Keep in mind, though, that interest will continue to accrue on your loan even if payments are postponed. You could also consider switching the repayment plan you are enrolled in to an extended repayment plan, or refinancing your loan in order to get a lower interest rate. If you’re able to consolidate your Parent PLUS loan with a federal Direct Consolidation loan, you can also make it eligible for the Income-Contingent Repayment plan. This plan adjusts your monthly payment to 20% of your discretionary income while extending your repayment terms to 25 years.

Can you refinance a Parent PLUS loan?

Yes, it is possible to refinance a Parent PLUS loan through a private lender. Doing so will make the loan ineligible for any federal borrower protections, but it might allow you to secure a more competitive interest rate or have the refinanced loan taken out in your child’s name instead of your own.

Is there loan forgiveness for parents PLUS loans?

It is possible to pursue Public Service Loan Forgiveness (PSLF) with a Parent PLUS loan. To do so, the loan will first need to be consolidated into a Direct Consolidation loan and then enrolled in an income-driven repayment plan. Then, you’ll have to meet the requirements for PSLF, including 120 qualifying payments while working for an eligible employer (such as a qualifying not-for-profit or government organization). Note that eligibility for PSLF depends on your job as the parent borrower, not your child’s job.

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.

Whether or not to go to college is a major decision. There are numerous factors to consider, including the cost of tuition, the time commitment involved, and the availability of financial aid and loans. And while the price of a college degree continues to increase, it’s an investment that can have major pay-offs, both financially and otherwise.

Going to college can open doors to new experiences, both during and after getting a degree. While the financial opportunities that college can bring are certainly worth considering, there are so many other advantages to getting an undergraduate degree. Here’s a look at some of the top benefits to becoming a college grad.

Explore Areas of Interest

Some students enter college already knowing what they want their major to be. Whether someone’s a star chemistry student going pre-med or a drama nerd ready to delve into theater, college can be a time to deepen the interests students have cultivated throughout their education.

Declaring a major sets a student up to explore a particular subject from all angles, becoming somewhat of an expert in their chosen field. A student will take numerous courses in their major, sometimes culminating in a thesis project on a specialized subject.

There are often clubs and activities in each major field, allowing students to develop communities with others who have shared interests, broadening the scope of their education.

College can also be a time to explore new areas, and can give students the chance to discover subjects they may not have known much about before.

College students are often encouraged to explore new subjects, especially in their freshman year, in order to experiment, and perhaps find a new and promising area of study.

Going to college can be a way to deepen one’s understanding of a particular subject, whether it’s something a student may have studied previously, or a completely new topic.

Either way, getting a degree is a way to open your mind and tap into a sense of intellectual curiosity in an environment conducive to rigorous and serious academic exploration.


💡 Quick Tip: You can fund your education with a low-rate, no-fee private student loan that covers all school-certified costs.

Increase Earnings

One of the most practical arguments for going to college is to improve your earning potential. The Association of Public and Land-Grant Universities reviewed the impact a college degree could have on someone’s earning potential and found that millennials with a high school diploma earned just 62% of what their counterparts with a college degree earned. And while actually achieving that college degree may cost a lot, a majority of college graduates believe it was worth it.

Like any investment, there has to be money put in up front, unless you get a full scholarship or a college loan. Ideally, that upfront investment of time and money will pay off in the long run.

Recommended: Return on Education for Bachelor’s Degrees

Open Up Potential Career Paths

While a college degree may have been a way to stand out from the crowd in the past, today it’s proving to be a prerequisite for most jobs. Research suggests that people with a Bachelor’s degree earn roughly 75% more than those with just a high school diploma, and that, generally, the higher the level of educational attainment, the larger the payoff.

While going to college can be a highly rewarding experience in itself, it can be wise to consider possible career paths while selecting courses and deciding on a major. However, there is nothing wrong with getting a liberal arts education. Employers may not necessarily be looking for a specific specialization when hiring, but often may appreciate someone with a well-rounded academic background.

Certain fields, however, like business and medicine, may require that students’ major field corresponds to their choice of career. When exploring different subjects during college, you might find out about a new area you want to pursue as a career, a huge benefit of getting an undergraduate degree as well.

Recommended: Is Getting A Degree In Marketing Worth It?

Expand Your Circle

College can be a time to build the relationships that will greatly affect your life — and possibly your career. Over the course of the four years it takes to complete a bachelor’s degree, there are countless opportunities to make new connections — from the people in your dorm, to your classmates, to those you meet through extracurriculars.

College can be a time to develop a wide and varied circle, or to simply grow several deep and lasting friendships. It can also be a time to meet a romantic partner, whether the relationship is short- or longer-term.

Having a wide circle can help out in a variety of ways. From finding post-grad roommates to knowing people in the field of work you’re trying to get into, college connections can be an invaluable resource in life.

Improve Critical Thinking and Communication

The so-called “soft skills” of being a good listener or critical thinking are also in high demand by employers, and college can be a prime time to develop them. These are skills that can be honed both in and outside the classroom, and college aims to give students a well-rounded experience that helps them develop both socially and academically.

Gain Independence

College is the first time many people live away from home, and it can be a nerve-racking experience. But once you’re over the hump, living on your own can be an extremely fun and rewarding experience.

College can be a chance to dip your toes in the waters of independence, experimenting with living alone, gaining some financial independence, maintaining a budget, and deciding what classes to take.

College can be the ideal stepping stone toward independence, and is a helpful way for young adults to see what adulthood can be like.


💡 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

While making the decision whether or not to go to college is not always easy, there are a host of good reasons to continue your education. The benefits can be financial, social, and intellectual, and can continue to be felt throughout your life.

The friends and connections you make during college can enrich your life and help you to network in your chosen field of work, while the financial security a college degree can offer is a major factor in the decision-making process as well. It’s important to make an informed decision, taking all of these points into consideration.

If the high cost of college is holding you back, keep in mind that there are a number of funding options that can help you manage the costs. To apply for financial aid, you simply need to fill out the Free Application for Federal Student Aid (FAFSA). This will tell you whether you are eligible for grants, scholarships, work-study programs, and federal student loans.

If you still have gaps in funding, you can also apply for a private student loan. Private student loans are available through private lenders, including banks, credit unions, and online lenders. Rates and terms vary, depending on the lender. Generally, borrowers (or cosigners) who have strong credit qualify for the lowest rates.

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

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

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

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

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

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