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Medical school is a big commitment. Not only will students spend four years of their life working towards a medical degree, but they’ll pay a big chunk of change for it (financing medical school is a major undertaking and can lead to debt). Which is why choosing the right medical school is so important. Keep reading for insight into how to pick the right medical school and how to finance it.

What Is Medical School?

Medical school is a necessary step towards becoming a doctor and generally, it takes four years to complete in order to receive an M.D., N.D., or D.O. degree. After medical school, graduates will need to pursue a medical residency in their specialty before they can become practicing doctors.

Recommended: How to Pay for Medical School

Different Types of Medical Courses

One of the first steps potential medical students can take to find the right medical school for them, is to better understand the different types of medical courses there are. Once they know what type of medical courses they want to take, they can narrow their search to just medical schools that offer those courses.

Traditional Courses

Some medical students may be attracted to more traditional courses that have students finish two years of pre-clinical work before they move on to the three years of clinical work they need to complete to get their degree. Typically, pre-clinical work occurs in a classroom setting. This is where medical students can learn the key principles of medical science. Once they move on to the clinical work portion of their studies, they will need to work in hospitals or clinics with direct supervision, while attending lectures.

This combination educates students on medical practices while making sure they get the hands-on experience they need to use their pre-clinical knowledge in real life situations.

Integrated Courses

Integrated courses are becoming more and more popular at medical schools, as this style, of course, combines pre-clinical and clinical education. In an integrated course, medical students can expect to learn practical clinical skills and work through problem-based learning.

Often in integrated courses, a lot of the students’ work is self-directed and early patient contact is encouraged.

Intercalated Courses

Intercalated courses are unique, as they allow students to take a year out of medical school to earn a BSc or MSc in a related subject. It’s not a guarantee that every medical school will allow students to do this, but in some schools students have the option or are mandated to do intercalated courses.

Recommended: Making Sense of the Rising Cost of Medical School

How to Choose Your Medical School

Every medical student had to ask themself at one point, which medical school is right for me? Here’s a few factors medical students can take into consideration to make answering that very important question easier.

1. Cost

Med school tuition is pricey and it’s not uncommon for students to take on debt for medical school. On top of tuition, students will also need to pay additional costs such as service fees and textbooks.

While medical schools do offer financial aid such as grants and medical school scholarships to their students, it’s important to prepare for the cost of medical school as not everyone receives financial assistance.

Attending an in-state school could help medical students find a lower tuition cost than at out-of-state or private options. For example, at the University of Utah, tuition for medical school if the student lives in-state is about $40,000 a year, whereas out-of-state students can expect to pay closer to $77,000 a year on tuition at the same school.

Each school charges different tuition rates, but generally, staying in-state can save medical students a lot of money.

Recommended: Average Cost of Medical School

2. Programs Offered

Apart from their general MD program, medical schools typically have multiple programs to choose from that lead to different careers paths. Before applying to medical school, students can take into consideration how many different programs are offered, how many students are accepted to each program, how long their ideal program takes to finish, and how that program aligns with their career goals.

3. Admissions Criteria

One of the easiest ways to start a search for the right medical school is by looking for schools where the applicant meets the admissions criteria. Students can do some research on the admissions criteria for each school to make sure their qualifications lineup, as well as what they need to do to apply to each specific school.

4. Location

Location matters. The location of a medical school can affect how much it costs a student to attend, what their housing situation looks like, and what their lifestyles outside of school is like. By choosing a local school, students may be able to save money on tuition or be able to cut costs by living with a family member. Not to mention, some locations simply have a higher cost of living than others. Students can crunch the numbers on what it would cost them to live at each medical school they want to apply to, so they can get a better idea of what attending medical school will cost them as a whole.

5. Career Path Opportunities

There are a wide variety of career opportunities that can arise after medical school and not all of them involve working as a practicing doctor. Medical school graduates can pursue teaching, research, and business opportunities amongst other exciting career paths. Students can check what career path opportunities a school’s curriculum and counseling center support before they apply to get a feel for if that medical school can help them meet their unique career goals.

SoFi’s Private Student Loans For Medical School

Students that need to take out medical school student loans, may find that SoFi’s private student loans can meet their needs. It only takes minutes to apply online and borrowers can apply with a cosigner. Keep in mind that because private student loans don’t have to offer the same benefits or protections as federal student loans (like the opportunity to apply for Public Service Loan Forgiveness), they are generally considered by students only after they have thoroughly reviewed all other financing options.

Borrowers can repay their SoFi student loans in a way that works for them by choosing a monthly student loan payment and rate that fits their budget. Borrowers never have to worry about fees and can enjoy a six-month grace period after graduation so that they have time to get settled in their post-grad life before they need to start making monthly loan payments.

Recommended: Smart Medical School Loan Repayment Strategies

The Takeaway

Choosing medical schools to apply to is a lot of work, but that research is a key step students need to take to find the best medical school for them.

FAQ

Is 30 too old for med school?

No, 30 is not too old to attend medical school. Applicants that apply for medical school will be in their mid-thirties four years later whether or not they pursue a degree. It’s up to them if those four years make a difference in the scheme of things.

What makes a good med school?

A good medical school is one that meets the needs of the student, when it comes to location, finances, and program opportunities.

How do you compare med schools?

Potential medical students can take factors like cost, location, and areas of study into account to compare and contrast their different medical school options.

Photo credit: iStock/Courtney Hale

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

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

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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Considering the average published college tuition according to The College Board ranges from $3,800 for a public two-year institution to $38,070 at private nonprofit four-year institutions, college students need all of the financial help that they can get.

One option is to use scholarships, which are a form of financial aid awarded to students to help pay for tuition and other education expenses. Unlike student loans, scholarships don’t need to be repaid.

Below, you’ll find the answers to “what is a scholarship?” as well as where to get a scholarship and the different types of scholarships that may be available to you.

What Is a Scholarship?

A scholarship is a form of financial aid that’s awarded to students to help pay for school. Over the last 10 years, the number of scholarships awarded has increased by 45%, according to the National Scholarship Providers Association (NSPA). Each year, there’s an estimated $46 billion in grants and scholarship money awarded by the U.S. Department of Education, colleges, and universities and an additional $7.4 billion awarded through private scholarships and fellowships.

Scholarships can be delivered in a lump-sum payment or the scholarship award can be broken up into multiple payments that are sent out each semester or school year. Depending on the scholarship, funds can either be sent directly to the student or sent to the school and the student would pay any additional money owed for tuition, fees, room, and board.

Scholarships are awarded based on a number of different criteria, including academic achievement, athletic achievement, community involvement, job experience, the field of study, financial need, and more.

Unlike student loans, scholarships don’t need to be repaid. Scholarships are generally considered gift aid.

What Is a Full-Ride Scholarship?

A full-ride scholarship is an award that covers everything — tuition, books, fees, room, board, and sometimes even living expenses. Full ride scholarships mean no other additional aid is needed to pay for school.

Full-ride scholarships are highly sought after and some may have strict guidelines and requirements.

Different Types of Scholarships for College Students

There are various forms of gift aid that students can use to pay for college. While there are differences between them, they’re similar in the fact that they do not need to be repaid. Here are different types of scholarships for college students.

Federal Grants

Federal grants are need based financial aid from the U.S. government to help students pay for college. The Department of Education offers a variety of grants to students attending four-year colleges or universities, community colleges, and career schools.

Most federal grants are awarded to students based on financial need, the cost of attendance, and enrollment status. Students can start by submitting a Free Application for Federal Student Aid (FAFSA®) form annually to determine eligibility. Once FAFSA is submitted, your school will let you know how much you may receive and when you may receive it.

Here are grant programs provided by the federal government:

•   Federal Pell Grants

•   Federal Supplemental Educational Opportunity Grants (FSEOG)

•   Iraq and Afghanistan Service Grants

•   Teacher Education Assistance for College and Higher Education (TEACH) Grants

While grants don’t typically have to be repaid, there are circumstances that may require repayment, such as:

•   You withdrew from the program early

•   Your enrollment status changed that reduced your eligibility for the grant

•   You received outside scholarships or grants that reduced the need for federal student aid

•   You received a TEACH Grant but did not meet the requirements for the TEACH Grant service obligation

Recommended: Finding Free Money for College

State Grants and Scholarships

According to the National Association of Student Financial Aid Administrators (NASFAA), almost every state education agency has at least one grant or scholarship available to residents. Eligibility may be restricted to state residents attending an in-state college, but this isn’t always the case. Check what state financial aid programs may be available to you through your state education agency.

Scholarships and Grants From Schools

Institutional aid is awarded to students by the schools they plan to attend. Scholarships and grants from schools may be offered based on need or merit. For example, a student may be awarded a scholarship or grant through the school for strong academic or athletic performance.

It’s also important to read the requirements for scholarships and grants from schools. Some awards may demand that students maintain a minimum GPA throughout the year. Others may only be available for your freshman and sophomore years.

Private Scholarships

Private scholarships are financial aid awarded to students that are funded by foundations, civic groups, companies, religious groups, professional organizations, charities, and individuals. Most private scholarships have specific criteria required to qualify, according to the Massachusetts Educational Financing Authority (MEFA) , and it may take some extra effort to research the availability of private scholarships.

Most private scholarships are only awarded for a single year. Check with the scholarship’s agency to find out if the scholarship is renewable and any criteria you may need to meet.

Main Sources of Scholarships and Grants

The main sources of scholarships and grants are from the four types of scholarships and grants listed above. Here are the major sources of scholarships and grants for college students and the percentage of total grants and/or scholarships that comes from each source:

•   Federal grants: 47%

•   State grants and scholarships: 8%

•   Scholarships and grants from schools: 35%

•   Private scholarships: 10%

Recommended: A Guide to Unclaimed Scholarships and Grants

Reasons to Be Awarded With a Scholarship

Scholarships aren’t only awarded to those with a 4.0 GPA. There are many reasons to be awarded a scholarship and students should consider their skills, areas of interest, and past achievements or awards.

Need-Based

Need-based scholarships are typically awarded to students based on their household income. The school’s financial aid office may also determine how much financial aid the student is able to receive.

Schools subtract your Expected Family Contribution (EFC) from your Cost of Attendance (COA) to determine your financial need and how much need-based aid you can receive. Your COA is the cost to attend the school and your EFC is the number that financial aid staff uses to determine how much financial aid you would receive. Information provided on your FAFSA is used to calculate your EFC.

Academic performance may also be taken into consideration when awarding need-based scholarships.

Academic Scholarships

Academic scholarships, also known as merit scholarships, are awarded to students based on their GPA and SAT/ACT admissions test scores. Award committees may also take other factors into consideration, such as extracurricular activities and leadership qualities.

Athletic Scholarships

Athletic scholarships are awarded to students who show exceptional athletic abilities while also taking academic performance into consideration. The National Collegiate Athletic Association, a nonprofit organization that regulates student-athletes, has provided more than $3.6 billion in athletics scholarships annually to more than 180,000 student-athletes. Athletic scholarships are not available at Division III colleges. Only about 1% to 2% of high school athletes are awarded athletics scholarships to compete in college.

Recommended: Balancing Being a Student Athlete & Academics in College

Community Service Scholarships

There are also scholarship opportunities for students who volunteer in their local communities. For example, the Equitable Excellence Scholarship awards students who have made a positive impact on their communities through volunteer service. The scholarship provides renewable awards of $5,000 to students for a total of $20,000 per recipient as well as one-time $2,500 scholarships.

Scholarships for Hobbies and Extracurriculars

Certain hobbies, interests, or extracurricular activities may also provide scholarships. For example, members of Starfleet, the International Star Trek Fan Association, can be awarded scholarships up to $1,000 in the categories including medicine, engineering, performing arts, international studies, business, science, education, writing, law enforcement, and general studies.

Scholarships based on Identity or Heritage

Some scholarship programs offer funds to help support traditionally underrepresented students. Outside of identity, many of these scholarships may require a minimum GPA, a need for financial assistance, leadership potential or participation in community activities.

There are also scholarships for mothers. When dealing with the costs of child care, many single mothers face unique obstacles to getting their college degrees.

Employer or Military Scholarships

Students may also be able to find opportunities through the employer of a family member. Eligibility and award amounts vary by employer. A variety of scholarships are also available to the children and spouses of active duty, reserve, National Guard, or retired members of the U.S. military.

How Can You Spend a Scholarship for Student?

How you can spend a scholarship for students depends on that specific program. Some programs may send the check directly to the college’s financial aid office to apply the funds to your tuition bill. Funds that are sent to the student may be used for education-related expenses deemed necessary by the school, like tuition, books, supplies, and housing.

Make sure to check with the scholarship program for rules regarding how you can spend your award.

How to Get a Scholarship for Student

There are several ways for students to find and apply for scholarships. Students can contact the financial aid office at the school they wish to attend or use other free resources. Some of these include:

•   Your high school counselor

•   The U.S. Department of Labor’s scholarship search tool

•   Federal agencies

•   Your state grant agency

•   Your library

•   Foundations, religious or community organizations, local businesses or civic groups

•   Organizations related to your field of interest

•   Identity-based organizations

•   Your employer or your parents’ employers

Check with each program to see how to apply and the requirements. Make sure you apply by the deadline.

Scholarship Requirements

Scholarship requirements vary by program. However, you may notice some common criteria, such as:

•   A GPA minimum

•   Age and grade requirements

•   College enrollment requirement

•   An essay requirement

•   Financial requirements

•   Location requirement

•   Test score requirements

Depending on the program, there may be some requirements related to your major, ethnicity, gender, disability or military service. In some cases, applicants may be required to complete an interview. If you’re applying for scholarships, check with each program to be sure you fully understand the application requirements and eligibility criteria.

Recommended: I Didn’t Get Enough Financial Aid: Now What?

Alternative Funding Options for College Students

Outside of scholarships and grants, there are other ways for students to pay for college.

One option is to get a part-time job and send extra income aside to put towards tuition or other school-related expenses. While this will likely not cover everything, it could make your costs more manageable. If you have a 529 college savings plan, you can tap this savings account to pay for qualified education expenses on a tax-free basis.

Students can also turn to the federal government to see if they qualify for federal work-study jobs, federal student loans, aid for military families, aid for international students or certain tax benefits. According to the Department of Education, outstanding federal student aid totals $1.61 trillion, representing 43.4 million students. These are typically awarded based on financial need and students can see what they qualify for by filling out FAFSA each year.

Another option is to use private student loans to pay for college. These are nonfederal loans made by a lender, such as a bank, credit union, state agency, university or other institution. Private student loans can be an option to consider after you’ve exhausted all other forms of aid.

Unlike most federal student loans, private loans require a credit check and the loan’s interest rate will depend on the borrower’s creditworthiness, among other factors. Private student loans are not required to offer the same borrower protections as federal student loans, things like deferment options or income-driven repayment plans.

You can even apply for scholarships and grants to pay off student loans after you’ve already graduated. You may also be able to have your student loans forgiven through state or federal programs.

The Takeaway

Before taking on student loans, scholarships and grants can be used to supplement other forms of financial aid. Before you start applying for scholarships, make sure you read the program’s requirements and turn in the application before the deadline.

If you’ve taken out federal or private student loans, there’s always the option to refinance. By refinancing your student loans, you could potentially qualify for a lower interest rate that could help you pay off the principal faster and/or decrease how much you pay each month. Note that decreasing your monthly payments is often the result of extending your loan term, which can ultimately increase the cost of borrowing over the life of the loan. Refinancing any federal loans will eliminate them from federal protections or programs such as the option to apply for Public Service Loan Forgiveness.

You can refinance the student loan with SoFi. If a competitor offers a lower rate, SoFi will match it and give you $100 after funding the loan.

Photo credit: iStock/fizkes

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.

Student loan default rehabilitation is a one-time opportunity to clear the default on a federal student loan. It also allows you to regain eligibility for federal student aid after your loans have gone into default.

With student loan rehabilitation, you can work with lenders to create a new payment plan that is theoretically more reasonable and affordable. This can be advantageous if you follow payment deadlines moving forward, but there are some caveats to student loan rehabilitation programs.

What Is Student Loan Rehabilitation?

Student loan rehabilitation is a program that’s offered by the federal government. Borrowers who have a Direct Loan, Federal Family Education Loan (FFEL), or Federal Perkins Loan that is in default, and owned by the Department of Education, may request rehabilitation. Private student loans are not eligible for student loan rehabilitation.

A federal student loan is considered in default when a borrower has missed payments for 270 days. Prior to defaulting on a student loan, the loan may be considered delinquent as soon as you miss a payment. If you fail to make a payment for 90 days, those late payments may be reported to the credit bureaus.

The monthly payment required during the student loan default rehabilitation depends on your income and can be as low as $5 per month. After making the minimum number of voluntary, reasonable, and affordable payments, the defaulted loan is considered rehabilitated.

Recommended: Types of Federal Student Loans

How Student Loan Rehabilitation Works

If you already have a federal loan in default, you can submit a written request for student loan rehabilitation through your loan holder.

A calculation, called the 15% formula, is used to determine your reasonable and affordable monthly payment during the rehabilitation program. First, it determines how much of your Adjusted Gross Income exceeds 150% of the federal poverty guideline, based on your family size and state. Then, your loan holder will calculate 15% of that amount, divided by 12, to arrive at your monthly payment.

If you don’t agree to make voluntary payments at the amount that’s calculated under the 15% formula, you can ask your loan holder to calculate an alternative payment.

To do so, you must submit a “Loan Rehabilitation: Income and Expense Information” form. You’ll need to supply details regarding your monthly income and monthly expenses and certify your family size. This alternative amount might be higher or lower than the payment amount offered under the 15% formula.

Upon agreeing to the payment amount and signing the student loan rehabilitation agreement, you must make nine on-time monthly payments within a consecutive 10-month period. After the ninth payment is completed, your loan holder will contact the credit bureaus to request the removal of the default status on your student loan account.

Pros and Cons of Student Loan Rehabilitation

The student loan rehabilitation program can be beneficial for borrowers whose federal loans are in default. However, there are also a few caveats to consider before requesting student loan rehabilitation.

Pros of Student Loan Rehabilitation

There are a handful of advantages to student loan rehabilitation. Instead of making a lump sum payment to get a defaulted loan in good standing, rehabilitation allows you to make consistent, on-time installment payments at a reasonable amount.

After successfully rehabilitating your loans after nine consecutive payments, the defaulted mark on your loan account is removed from your credit record. This can potentially improve your credit score. Any involuntary payments, such as wage garnishment or Treasury offset, will cease upon successful loan rehabilitation.

Rehabilitating your loans also gives you access to federal aid; for example, if you want to get your master’s or your Ph.D., you’ll once again be eligible to receive loans from the federal government. You’ll also have access to federal benefits, like federal loan deferment and forbearance, and the option to enroll in income-driven repayment plans.

Recommended: Student Loan Deferment vs Forbearance

Cons of Student Loan Rehabilitation

Rehabilitation is a one-time opportunity. If you default again after your loans are rehabilitated, you can’t request a rehabilitation program again.

Another point to note is that involuntary payments, such as those collected by your loan holder through wage garnishment, don’t count toward the nine voluntary payments needed to rehabilitate your loan. This means you might potentially have two separate loan payments occur each month until some rehabilitation payments are made or your loans are fully out of default.

Upon successfully rehabilitating your loan account, the default is removed from your credit report, but the late student loan payments on the account remain on record.

Student Loan Rehabilitation vs Consolidation

Another way to address a defaulted federal loan is through a Direct Consolidation Loan.

Consolidating defaulted federal student loans, making it easier to keep up with one monthly payment instead of multiple. This means using a Direct Consolidation Loan with a new interest rate — generally the weighted average of your initial interest rates. To undergo a Direct Consolidation loan, you must either:

•   Make payments via an income-driven repayment plan or

•   Make three consecutive and voluntary on-time payments before initiating a Direct Consolidation Loan.

Although you can rehabilitate most federal loans, regardless of whether your student loans are in collections, there are special conditions and restrictions for Direct Consolidation Loans. For example, you can only consolidate an existing Direct Consolidation Loan that’s in default if you reconsolidate it with another eligible loan.

An important note: Consolidating only applies to your federal loans — you can’t roll private loans into a Direct Consolidation Loan.

Like rehabilitation, consolidating a defaulted loan through a Direct Consolidation Loan provides access to future federal aid, loan forgiveness programs, and federal benefits like deferment, forbearance, and an income-driven repayment plan.

Another notable factor that differentiates student loan rehabilitation vs. student loan consolidation is that the latter doesn’t remove a default from your credit history.

Recommended: Student Loan Consolidation vs Refinancing

Can Student Loan Rehabilitation Affect Your Credit?

Loan rehabilitation results in the defaulted loan status taken off of your credit report. Having a default removed from your record can potentially improve your credit score.

The record of late payments that resulted in the defaulted loan, however, will remain on your credit report. Late payments on your record are still considered a derogatory mark that could impact your credit for up to seven years.

What Happens After Student Loan Rehabilitation

After your defaulted loan is rehabilitated, your loan is sold or transferred to a new loan holder or lender. The loan holder will formally send a request to the three credit bureaus to have the default taken off of your credit report. Also, existing collection activity toward the rehabilitated loans will cease (e.g. wage garnishment or Treasury offset).

Once your loans are under a new loan holder, you’ll need to select a repayment plan, otherwise, a standard 10-year plan will apply.

To request a lower monthly payment, you might be able to enroll in an income-driven repayment plan which calculates your monthly payment based on your Adjusted Gross Income and family size.

This type of repayment option extends the term across 20 to 25 years, depending on the plan. In doing so, your monthly payment is limited to a percentage of your discretionary income, but you’ll pay more interest over time.

In addition to being eligible for new federal aid, you’ll again be eligible for federal benefits that were inaccessible when your loan was in default. These benefits include access to student loan forgiveness programs, and deferment and forbearance.

The Takeaway

Student loan rehabilitation might not completely erase all of the missteps you’ve had with regard to your federal loans, but it can be an option to get out of default. Another option for getting a federal student loan out of default is to consider a Direct Consolidation Loan.

Refinancing a defaulted student loan can be challenging, but if your student loans have been rehabilitated, and you’re now in good standing on your loans, student loan refinancing may be an option to consider. Refinancing lets you take out a brand-new loan with a new interest rate and new loan terms. If you qualify, refinancing could allow qualifying borrowers to secure a lower interest rate or lower monthly payments. Note that lower monthly payments are generally the result of extending your loan term, which can cost more in interest over the life of the loan.

While refinancing can help make loan repayment more affordable over the long-term for borrowers who are able to qualify for a more competitive interest rate, it will eliminate any federal loans from borrower protections – such as income-driven repayment plans, so it may not make sense for everyone. If you feel refinancing is an option for you, consider SoFi where there are no hidden fees and the application is completed entirely online.

FAQ

How long does it take to rehabilitate student loans?

It takes several months to complete a student loan rehabilitation program. Direct Loans, Federal Family Education Loan (FFEL), and Federal Perkins Loans require nine, full and on-time payments over 10 consecutive months to rehabilitate.

Can you rehabilitate student loans in collections?

Yes, you can rehabilitate student loans in collections. However, involuntary collection payments, such as those occurring as a result of wage garnishment, may continue while you make voluntary rehabilitation payments.

Is rehabilitation or consolidation of student loans better?

Deciding whether student loan rehabilitation or consolidation is best for you depends on your personal situation and goals.

Student loan rehabilitation takes longer than consolidation but by successfully rehabilitating your loans, you are able to remove the default from your credit history. So, if that is your primary goal, rehabilitation might make more sense. However, if your goal is to simplify repayment for your defaulted loans, and you want to enroll in an income-driven repayment plan as soon as possible, a Direct Consolidation Loan can be an option to consider.

Keep in mind that both student loan rehabilitation and Direct Loan Consolidation are only options for federal student loans.

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 you apply for federal or private loans, you’ll need to meet several student loan requirements to receive your funds. Those requirements can vary depending on what type of loan you want.

It’s important to know exactly what the requirements are before applying. Because while student loans are a popular way to help pay for college, getting approved isn’t a given. Read on to learn the requirements for different types of federal loans as well as private loans.

Federal Student Loan Requirements

There are four different types of federal student loans available to college students and their parents. Loans generally require:

•   Demonstrated financial need (for most programs)

•   U.S. citizen or eligible non-citizen

•   Social Security number

•   Enrollment in or acceptance to an eligible degree or certificate program

•   Attendance at least half-time

•   Maintenance of satisfactory academic progress

•   Completion of the Free Application for Federal Student Aid (FAFSA®) form

•   Agreement to use the loan for educational purposes only

•   You’re not in default on a federal student loan and don’t owe money on a federal grant

•   High school diploma or GED certificate, state-approved homeschool setting, or enrollment in an eligible career pathway program and “ability-to-benefit” alternative

Depending on the type of loan, though, there may be additional requirements that parents or students need to meet. Read on for a quick breakdown of some additional requirements by loan type.

Direct Subsidized Loans

With Direct Subsidized Loans, the federal government covers your interest costs while you’re still in school. To qualify, you need to be an undergraduate student enrolled at least half-time at a participating school that will lead to a degree or a certificate. And you must show financial need through the FAFSA form.

Direct Unsubsidized Loans

With a Direct Unsubsidized Loan, you do not need to demonstrate financial need, and you are responsible for paying interest on the loan from the time you take it out. To qualify, you must be an undergraduate, graduate, or professional student who is enrolled at a participating school at least half-time. Typically, the program must result in a degree or certificate.

Recommended: College Tuition Payment Plans

Direct PLUS Loans

You can apply for a Direct PLUS Loan if you’re a graduate or professional student, or a parent of an undergraduate student. You generally can’t have an adverse credit history, which means, as stated by the Department of Education (DOE), you may not qualify if you have any of the following on your credit report:

•   Accounts with a total outstanding balance over $2,085 that are 90 or more days delinquent, or that have been placed in collection or charged off within the last two years.

•   Default determination within the last five years.

•   Bankruptcy discharge within the past five years.

•   Repossession during the last five years.

•   Foreclosure within the last five years.

•   Charge-off / write-off of federal student loans during the last five years.

•   Wage garnishment within the last five years.

•   Tax lien within the past five years.

That being said, if you do have an adverse credit history, you may still be able to receive a Direct PLUS Loan if you meet either of the following requirements and also complete credit counseling:

•   You get an endorser who does not have an adverse credit history.

•   You demonstrate to the DOE that you have extenuating circumstances relating to your adverse credit history.

Recommended: How To Pay for Grad School

Direct Consolidation Loans

A Direct Consolidation Loan allows you to consolidate multiple federal loans into one loan. To qualify, you must have one or more eligible loans and meet other requirements, including:

•   The loans must be in repayment or in the six-month grace period after you leave school.

•   In general, you must have at least one loan that isn’t already a consolidated loan.

•   If one or more loans are in default, you must make at least three consecutive monthly payments or agree to repay the Direct Consolidation Loan under one of the available income-driven repayment plans.

•   If your wages are being garnished to make payments on a defaulted federal loan, you can’t consolidate it until the wage garnishment order has been lifted or the judgment has been vacated.

Private Student Loan Requirements

While federal student loans often have the same requirements across the board because the DOE is the lender on all of them, that isn’t the case with private student loans. With private loans, requirements vary by lender, which means you may qualify for a loan from one private student loan company and not with another.

The requirements for a private student loan can also depend on what type you’re applying for, such as an undergraduate loan, graduate loan, or specialized loan.

In general, all private student lenders require a credit check and a minimum annual income. This means that if you don’t have a credit history, you may need a cosigner with an established credit history and a solid income to apply for the loan with you.

Each lender has different requirements when it comes to student loans. Common requirements among major private student loan companies include:

•   U.S. citizen, permanent resident, or international student.

•   Social Security number (some don’t require this for international students).

•   International students generally must have a cosigner.

•   Attendance at an eligible school.

•   Enrollment in a degree program and attendance at least half-time (some allow you to be less than half-time).

Depending on the lender, there may be other student loan qualification requirements and limitations, so it’s important to shop around to compare lenders and read the terms to make sure you qualify.

Also, look for private student lenders that allow you to get prequalified with just a soft credit check. This can give you an idea of your approval chances and show you possible loan terms you might qualify for without dinging your credit score.

The Takeaway

There are a number of requirements you may have to meet in order to qualify for a student loan. The requirements for different types of federal student loans tend to have more overlap, as they all have the same lender. Some are administrative, such as having a Social Security number. Others are risk-related, like not being in default on any previous student loans. Requirements for private student loans vary from lender to lender.

If you’re getting ready to apply for a loan to fund your education, make sure to explore your options and compare terms and rates. SoFi offers private student loans with fixed or variable rates and a number of repayment options.

SoFi offers no-fee private student loans for undergraduate and graduate students or their parents.

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.

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

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

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

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There are several legitimate programs that federal student loan borrowers can utilize to have their federal student loans forgiven. Unfortunately, there are also student loan forgiveness program scams. Confusion surrounding loan forgiveness can create space for scammers to thrive. Most commonly, companies will promise something that cannot be done, or charge an upfront fee for something that can be done online for free.

The real trick for borrowers will be distinguishing between a company that is providing student loan counseling in a fair and legitimate way from a company that is trying to take advantage of unsuspecting students.

Is Student Loan Forgiveness a Scam?

There are millions of students paying college student loans and the idea of having those student loans forgiven can be very appealing. There are legitimate student loan forgiveness programs that are available to federal student loan borrowers who meet the program requirements.

These include programs like Public Services Loan Forgiveness or the Teacher Loan Forgiveness Program. There may be other options for forgiving student loans, depending on your background and program requirements.

What Is a Student Loan Forgiveness Scam?

A student loan forgiveness scam is when a service makes a promise that they cannot deliver on. For borrowers looking to get out of student loan debt quickly, these promises can seem promising. Unfortunately, scams may offer impossible promises like immediate loan forgiveness or may trick student loan borrowers into disclosing personal information.

Types of Student Loan Scams

Student loan scams can take many forms. Be wary of scams that come in the form of unsolicited calls, texts, or emails.

Student Loan Forgiveness Scam Calls

If you receive an unsolicited call asking you for information about your student loans, pay close attention. Some calls may present opportunities to cancel student loan debt. In general, any call offering a fast solution to pay off your student loans is a scam. The U.S. Department of Education offers legitimate forgiveness programs and opportunities to lower your student loan payments, all of which can be accessed at no cost to borrowers directly through their loan servicers.

The Federal Trade Commission (FTC) has a sample of what these calls might sound like, so you can be prepared.

Student Loan Forgiveness Text Scam

Texting is another avenue for scammers to contact student loan borrowers. These communications might include the need to “act immediately” or tout enrollment for debt relief is taking place on a first-come first-served in order to inspire a false sense of urgency.

Text scams are newer on the scamming spectrum, so consumers may not be expecting them. Instead of responding to the message, call your student loan servicer on the number listed on their website. In general, most student loan servicers will not conduct business via text messages.

Spotting Student Loan Scams

When it comes to student loan scams, the short rule of thumb is that anything that sounds too good to be true, probably is. For example, if a company claims that with an up-front fee that your loans will automatically be forgiven, it is a scam. No program exists where loans are “automatically” forgiven for a fee.

If you have a feeling that you might be getting scammed, do a thorough internet search for the company. More than likely, someone else has been in contact with, and possibly taken advantage of by, this company.

The problem with relying on an internet search to look for a scam? Not every scam will have been identified through an internet search, as they change their names and phone numbers often to avoid the background research a consumer might conduct. Here are a few common techniques used by student loan scammers.

Upfront Cost & Fees

Any student loan company offering to help you for an upfront fee is a scam. According to the FTC, it is illegal for companies to charge you before providing assistance. And importantly, borrowers can get help directly from their student loan servicer or Department of Education at no cost.

Immediate Student Loan Forgiveness

Another huge red flag — organizations offering to provide immediate or complete student loan forgiveness. Most government loan forgiveness programs require a record of qualifying payments and or employment certifications depending on the program.

Requesting Passwords

Broadly speaking, legitimate companies won’t ask you to verify personal details out of the blue. If you receive a call, email, or text asking you to disclose your passwords or any other sensitive personal information, think twice before responding. Sharing personal details could allow scammers to access your loan information, or other important accounts.

Avoiding Student Loan Scams

Attention to detail and diligence in communication can help you avoid some common student loan scams. Here are eight student loan scams to avoid.

1. A Promise of Immediate Forgiveness

Beware of any promise that seems too good to be true. Student loan forgiveness takes time, period. A company can only help you fill out paperwork for a forgiveness program; they cannot forgive your loans.

2. A Request for an Upfront Fee

Many scams rely on obtaining an upfront fee for something that either cannot be done (immediate loan forgiveness) or something that can be done for free, online (apply for a loan forgiveness program). You should only agree to payment once the company has completed the service in question.

3. Private Loan Refinancing

In general, only federal loans are eligible for loan forgiveness programs. Be cautious of any company that tells you that they can get your private loans forgiven. Private loans don’t typically offer forgiveness programs.

4. A Phone Call

Many scams start with a student loan forgiveness call. The Department of Education, who directs federal loan forgiveness programs, will never call you. If they need to correspond with you, they will by mail.

5. A Request to Pay Them and Not Your Lender

No company will ever make your student loan payments for you. You can pay them for a service, sure. But it is unwise to make your student loan payments to anyone except for who you owe.

6. A Request to Stop Making Student Loan Payments

No legit company will ever recommend you stop making your loan payments. A company working in your best interest will advise you to make all of your payments on the correct repayment plan so that you’re sure to qualify for any applicable loan forgiveness programs.

7. Asking for Your FSA ID

No one should ever ask for your Federal Student Aid ID. Your FSA ID allows you to log onto the government website where borrowers manage their federal student loans.

8. Official-Looking Insignias

Fraudsters do a good job of making their websites, seals, and paperwork look like official government branding. Just because something looks official does not mean it is official, so do your research.

Reporting Student Loan Scams

If you encounter any student loan scams, you can have a few different options for reporting them. You can report scams to the Department of Education through the Federal Student Aid website .

You can also report the business conducting the student loan scam to the Consumer Financial Protection Bureau . Anyone who has been contacted by what they believe to be a scam can also report it to the
FTC .

Looking for Safe Private Student Loans?

Not everyone qualifies for loan forgiveness. Others may not actually find that it makes the most sense for their own personal financial situation. (This may be especially true for loan forgiveness programs that require you to pay taxes on the forgiven balance, such as income-driven repayment.)

Those looking for a safe borrowing option may want to consider SoFi. Private student loans from SoFi have no fees and are available to undergraduate, graduate, and professional students, or their parents.

The Takeaway

Student loan scams rely on the borrower’s lack of understanding on how their loans, and loan forgiveness program works. Pay attention to texts, emails, or phone calls that over-promise on their ability to lower your monthly payments or have loans forgiven, as these are generally indicators that there is a scam, or other unfavorable business going on. If you have any doubt, contact your loan servicer directly to avoid falling into a scammer’s trap.

No matter what path you take with your student loans, always be sure to do adequate research. It’s hard to scam someone that understands their loans, and their options for repaying them.

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.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

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

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

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.

Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

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