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Graduate school can help you pursue your academic and professional interests, expand your connections, improve your marketability, and increase your earnings. But it often comes with a high price tag.

If you’re thinking about investing in your future by attending graduate school, you may be wondering, does FAFSA cover graduate school?

In short, yes. Just like undergrads, graduate students can fill out the Free Application for Federal Student Aid (FAFSA) every year in order to qualify for federal grants, work-study, and federal student loans.

Read on to learn more about getting financial aid — and other types of funding — to help pay for graduate school.

Do You Have to Fill Out FAFSA for Graduate School?

While filling out the FAFSA is not required to attend graduate school, students who are interested in receiving federal student aid as graduate students will need to fill out and submit the form.

You may be familiar with the FAFSA from your years as an undergraduate student. The process of getting financial aid for graduate school is basically the same, with eligibility largely determined by financial need.

However, there is one notable difference: Graduate students are considered independent students for FAFSA purposes, so you aren’t required to provide any information about your parents’ finances. Another difference: For the 2025–26 FAFSA form, if you’re married, you’ll need to provide your spouse’s information.


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

Grad School Financial Aid Eligibility

To be eligible for financial aid in graduate school you must meet basic FAFSA requirements. These include being a U.S. citizen (or qualifying noncitizen) enrolled or accepted in an eligible degree or certificate program. If you have any criminal convictions, have previously defaulted on a student loan, or owe a Pell Grant overpayment, that could affect your eligibility for federal aid.

FAFSA doesn’t have a maximum income cutoff, so it’s worth applying even if you have a steady income. There is also no age cutoff for financial aid, so you can complete and submit the form whether you graduated college recently or many years ago.

Some financial aid is awarded on a first-come, first-served basis, so it’s generally a good idea to fill out the FAFSA as soon as possible after its release. Due to an overhaul of the form, the FAFSA for the 2025-26 academic year will be released in stages: The first group of students will get access on October 1, 2024, with the remaining applicants receiving access on or before December 1, 2024. Be sure to submit your FAFSA form by the earliest financial aid deadline of the schools to which you are applying, which is typically early February.

Here’s a look at what type of financial aid you may be eligible for as a graduate student.

Grants

Your financial aid package for graduate school may include federal and state grants based on your field of study, interest, or type of school.

For example, if you’re studying education, you might be eligible for the Teacher Education Assistance for College and Higher Education, or TEACH Grant. The TEACH grant provides up to $4,000 a year to education students who will teach in a low-income school or high-needs field after graduation.

Graduate students can also qualify for federal Fulbright Grants and Iraq and Afghanistan Service Grants. However, grad students are generally not eligible for the Pell Grant or Federal Supplemental Educational Opportunity Grant (FSEOG) Grant, which are largely reserved for undergraduates.

You can learn about state-based grant opportunities by contacting the department of education for your state, as well as the state where the graduate school is located.

Many graduate schools also offer grants based on financial need or academic excellence. These grants generally don’t need to be repaid, although there may be specific stipulations, such as maintaining a certain GPA.

Recommended: Grants For College – Find Free Money for Students

Work-Study

You may be familiar with work-study programs from your time as an undergraduate student. Graduate students are also eligible for the Federal Work-Study Program, which provides part-time jobs to students who demonstrate financial need.

Work-study is available to both full- and part-time students, though your graduate school must participate in the Federal Work-Study Program. Your school’s financial aid office can give you more details about the work-study program and the types of jobs available to you. Your program may also offer assistantships or teaching roles to help you pay for school (more on that below).

Federal Student Loans

The federal student loans you can access in graduate school are slightly different from those you can take out in undergraduate school. For example, you cannot take advantage of Direct Subsidized Loans, which are loans in which the government pays the interest while you are in college and during the six month grace period after you graduate. Direct Subsidized Loans are only available to undergraduate students with demonstrated need.

Here’s a look at the two types of federal loans available to grad students.

Direct Unsubsidized Loans

Federal Direct Unsubsidized Loans are loans made to eligible undergraduate, graduate, and professional students, but eligibility is not based on financial need. And, unlike a Direct Subsidized Loan (which is need-based), the government does not pay the interest while you’re in school or for six months after graduation. Interest will accrue while you are attending grad school and get added to your loan balance.

The interest rate is higher on Direct Unsubsidized student loans for graduate students than it is for undergraduate students.

If you are a graduate or professional student, you can borrow up to $20,500 each year in Direct Unsubsidized Loans. The interest rate is fixed at 8.08% for loans first disbursed between July 1, 2024, and July 1, 2025.

Grad PLUS Loans

If you need to borrow more than the annual limit for Direct Unsubsidized Loans to pay for grad school, you can also access a Federal Grad PLUS loan, which is also called a Direct PLUS Loan.

These federal loans are exclusively for graduate/professional students and parents of dependent undergraduate/professional students. Eligibility is not based on financial need, but a credit check is required. Borrowers who have an adverse credit history must meet additional requirements to qualify.

Grad Plus Loans are the most costly type of federal loan. For loans disbursed between July 1, 2024, and July 1, 2025, the interest rate is a fixed 9.08%. You’ll also pay a one-time disbursement fee of 4.228%.

Grad Plus Loans come with higher borrowing limits than other types of federal loans. You can borrow up to the cost of attendance of your graduate school program minus other financial assistance you get.

To apply for a Grad PLUS Loan, you need to fill out the Direct PLUS Loan Application.

Tips on Filling Out FAFSA as a Grad Student

Filling out the FAFSA as a graduate student is similar to filling out the form as an undergrad. However, your dependency status will differ because you’re no longer considered a dependent student. As a result, you typically do not need to input your parents’ information onto the FAFSA. You’ll only need to supply information about your (and if, you’re married, your spouse’s) income and assets, the graduate schools you want to receive your FAFSA information, and then sign and submit your form.

When Will You Hear Back?

It typically takes the education department three to five days to process the FAFSA if you submitted electronically; seven to 10 days if you mailed in a paper form.

If you provided a valid email address, you’ll receive an email notification that includes a link to your electronic Student Aid Report (SAR) at fafsa.gov. You’ll get a paper SAR through postal mail if you didn’t provide a valid email address. You’ll want to review your SAR carefully to make sure it’s complete and accurate and correct/update information if necessary.

The graduate schools you apply to will then review your FAFSA information and other documents and send you a financial aid award letter that details the scholarships, grants, and federal student loans you are eligible to receive. You may receive your financial aid award not long after you receive your acceptance letter to the graduate school. However, every school is different, so it’s a good idea to ask the admission or financial aid office of your school for more information.

Average Disbursed Amount

The average graduate student loan debt balance (from graduate school alone) is $78,118, according to the Education Data Initiative.

The maximum amount you can borrow under the Federal Direct Unsubsidized Loan program for graduate school is $20,500 a year, with a maximum lifetime limit of $138,500 (including undergraduate loans).

In comparison, a Grad PLUS Loan allows you to borrow up to the cost of attendance, minus any other financial aid received.

FAFSA for Grad School vs Undergrad

Graduate school financial aid is similar to undergraduate financial aid, but there are a few key differences. Here’s a look at how the two compare.

	Graduate Student Financial Aid	Undergraduate Student Financial
FAFSA Status	Independent	Dependent (typically)
Use financial information for	Student (and, if applicable, spouse)	Student and parents
Federal loans eligible for	Unsubsidized Direct Loans and Grad Plus Loans	Unsubsidized and Subsidized Direct Loans
Interest rate for Federal Direct Unsubsidized loans	8.08%	6.53%
Eligible for work-study?	Yes	Yes
Pell and FSEOG grant eligible?	No	Yes

Alternatives to Federal Aid

Federal aid isn’t the only way to pay for graduate school. Here’s a look at some other sources of funding.

Private Student Loans

Private student loans are offered by banks, credit unions, and online lenders. Unike federal student loans for graduate students (which come with fixed interest rates), private student loans may have fixed or variable rates.

Interest rates are set by the lender, so it can pay to shop around to find the best deal on a private student loan for grad school. Generally borrowers with excellent credit qualify for the lowest rates.

Similar to Grad Plus loans, you can usually borrow up to the full cost of attendance from a private lender. However, Grad Plus Loans come with a disbursement fee, while private lenders generally don’t charge this fee. If you have excellent credit (or can recruit a cosigner who does), you could potentially pay less with a private graduate student loan than a Grad Plus Loan. Keep in mind, though, that private student loans don’t offer the same protections (like access to forgiveness programs and income-based repayment plans) that come with federal student loans.


💡 Quick Tip: Master’s degree or graduate certificate? Private or federal student loans can smooth the path to either goal.

Grants and Scholarships

You’ll be eligible for federal, state, and institutional grants by filling out the FAFSA. However, there are also funding opportunities available outside this system. Many private organizations have created grants and scholarships to help graduates pursue an education in the fields they support.

Look for scholarships and grants from professional associations in your field. Your graduate school department or career department can often help you find scholarships based on your qualifications. There are also several scholarship websites to help you find money for graduate school, including Fastweb and Scholarships.com.

Fellowships and Assistantships

Graduate fellowships and assistantships can both help you pay for graduate school but they work in different ways.

A fellowship is like a scholarship that you can use for any costs you incur as a student. These programs are often available from professional organizations relating to your major. With a fellowship, you may perform research activities on campus or outside of your school.

An assistantship, on the other hand, is typically school-based and more likely to directly provide full or partial tuition waivers. Some assistantships also come with living stipends. An assistantship typically involves doing work on campus, usually related to your major. You might get a research job, which often entails assisting a tenured professor on an upcoming study, or you could secure a teaching job, which gives you the chance to serve as an assistant or professor at the school.

Employer Tuition Assistance

If you work for an employer that offers tuition assistance, your company may cover some or all of the costs of your graduate or professional education as long as you meet the program’s eligibility requirements.

You may even be able to access tuition assistance through a part-time job. Your human resources office will have details about tuition assistance, qualifications, and reimbursement procedures.

The Takeaway

Just like undergrads, grad students can qualify for financial aid to pay for school. Your grad school aid package might include grants, work-study, and federal loans.

As a grad student, you can take out more in federal loans than you could as an undergrad, which may make it easier to attend a more expensive school. It’s generally a good idea to tap lower-cost Direct Unsubsidized Loans before considering PLUS Loans.

Other sources of funding for grad school include: private grants, scholarships, fellowships, assistantships, and private student loans.

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

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

FAQ

How much can FAFSA disburse for graduate school?

As a graduate student, you can borrow up to $20,500 in unsubsidized federal loans each year. Grad PLUS Loans are also an option, and allow students to borrow up to the cost of attendance for graduate school.

Graduate students may also qualify for grants (which don’t need to be repaid) and work-study by filling out the FAFSA.

Is it harder to qualify for financial aid as a graduate student?

Not necessarily. While there are fewer need-based aid options for graduate students, your university or graduate program might provide merit- or research-based assistance. In addition, many private and nonprofit organizations offer scholarships and grants for graduate students.

Do you need to make a new FAFSA account for graduate school?

No, you do not need to make a new FAFSA account for graduate school. If you created an FSA ID as an undergraduate, you can use the same ID to apply for financial aid for graduate school.

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

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student loans are not a substitute for federal loans, grants, and work-study programs. We encourage you to evaluate all your federal student aid options before you consider any private loans, including ours. Read our FAQs.

Terms and conditions apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. SoFi Private Student loans are subject to program terms and restrictions, such as completion of a loan application and self-certification form, verification of application information, the student's at least half-time enrollment in a degree program at a SoFi-participating school, and, if applicable, a co-signer. In addition, borrowers must be U.S. citizens or other eligible status, be residing in the U.S., Puerto Rico, U.S. Virgin Islands, or American Samoa, and must meet SoFi’s underwriting requirements, including verification of sufficient income to support your ability to repay. Minimum loan amount is $1,000. See SoFi.com/eligibility for more information. Lowest rates reserved for the most creditworthy borrowers. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change. This information is current as of 4/22/2025 and is subject to change. SoFi Private Student loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).

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

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

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College tuition inflation since 1980 has been rising. In fact, widely cited statistics have consistently shown college tuition rising faster than inflation.

It’s no secret: College tuition is on the rise, and it has been for years. According to the most recent data from the National Center for Education Statistics, during the 2021-2022 academic year, tuition and fees costs at undergraduate institutions were:

•   $9,700 at public institutions

•   $17,800 at private for-profit institutions

•   $38,800 at private nonprofit institutions

Between 2008-2009 and 2018-2019, costs rose 28% at public institutions and 19% at private nonprofit institutions. However, the costs for private for-profit institutions have reduced 6% in 2018-2019 compared to 2008-2009.

In comparison, public institutions cost $9,100 in 2010-2011, private for-profit was $19,400, and nonprofit institutions cost $34,000 in the same year, according to NCES , a subagency of the U.S. Department of Education.

Why has college tuition outpaced inflation, anyway? We’ll walk you through a complete guide to understanding college tuition vs inflation and the reasons college tuition has outpaced inflation over time.

What Is the College Tuition Inflation Rate?

First of all, inflation refers to a decrease in how much individuals can purchase with their money, based on increases in the prices of goods and services. According to Macrotrends, the general U.S. inflation rate for 2022 was 8%. Inflation peaked at 13.55% in 1980, at its highest levels since 1960.

Each college has its own tuition rate increase per year, so to get an accurate measure of an individual college’s tuition inflation rate, you can use the Bureau of Labor Statistics (BLS) inflation rate calculator to calculate the current inflation of college tuition rate for each institution based on previous tuition costs.

Ultimately, the average cost of tuition has increased nearly 180% over the past 20 years, even after accounting for inflation.

How Does Inflation Affect College Tuition?

When the cost of goods goes up, colleges and universities offset the increased cost of operating by increasing tuition costs.

The Higher Education Price Index (HEPI), which measures the price changes of items that allow universities to stay afloat, doesn’t align exactly with the Consumer Price Index, which refers to what consumers pay for goods.

It can be difficult to make an apples-to-apples comparison between rising tuition at colleges and universities and changes in inflation because the HEPI is affected by more than just the cost of goods. For example, administrators, professors, financial aid professionals, admission counselors, and others also require salary increases on top of the miscellaneous expenses associated with keeping college and university facilities running.

Why Is the Cost of College Rising?

There are other reasons that cause tuition, room, board, and fees to increase from year to year. In the next section, let’s explore the reasons that it becomes more expensive to run a school. We’ll discuss state funding availability, demand, and financial aid.

Less State Funding

Declining state funding has influenced tuition costs at state universities as health care and pensions increase for state employees.

As a direct result of the last two economic recessions, education appropriations remain 6% and 14.6% below 2008 and 2001 levels, respectively, according to the 2022 State Higher Education Finance (SHEF) report produced by the State Higher Education Executive Officers Association (SHEEO).

However, state funding for financial aid has increased steadily for two decades. State and local funding reached $100 billion for higher education for the first time in fiscal 2019.

More Demand

As demand rises, costs increase as well. More than five million more students attended U.S. colleges in 2017 than in 2000, though between fall 2010 and fall 2021, total undergraduate enrollment decreased by 15% (from 18.1 million to 15.4 million students), according to the most recent data from NCES.

Despite recent statistics, it’s still evident that the demand for higher education has continued to increase over the past few decades. The dependence on a highly skilled workforce and growing wage differences between college and high school graduates means more students choose to attend college and drive up the demand for higher education. Higher education prices must increase in response to a growing student population.

More Federal Aid

The 1987 Bennett hypothesis (named after President Ronald Reagan’s secretary of education, William Bennett), stated that colleges will raise tuition when financial aid increases, especially subsidized federal loans that offer low interest rates. In other words, the theory was that colleges can raise prices because federal financial aid will cover the excess costs and students can offset the cost increase with federal student loans.

Is the Bennett hypothesis still a worry today?

The New York Federal Reserve compiled a 2015 study that supports that finding. It found that student credit expansion of the past fifteen years has risen with college and university tuition.

Why Has College Tuition Outpaced Inflation?

It’s not easy to pinpoint one single reason for the rise in college tuition — you might be quick to blame governments that face deep deficits and cannot subsidize the full costs of higher education. However, the truth is that the costs of outpaced inflation are multifaceted.

Colleges often attempt to raise tuition to appear competitive with similar institutions, increasing costs across the board. University presidents also face enrollment demands and increases in HEPI also inflate budgets. That’s why high school students, together with their families, may want to carefully plan for the costs of attending a particular institution.

Some options for students who are looking into financing their education might include finding work during the summer, applying for financial aid, or looking into payment tuition plans.

College Tuition Inflation Since 1985

According to data from the NCES, since 1985 the average college tuition at all institutions has increased nearly $20,000 from $4,885 to $24,623 during the 2018-2019 school year. That number is even higher when considering the cost of attending a four-year institution, which in 1985 was $5,504 and during the 2018-2019 school year increased to $28,123

College Tuition vs Inflation

The increase in college tuition and fees have outpaced the rise of inflation for decades. According to Forbes, the cost of attending a four-year college or university during the 2021-2022 school year was increasing at double the rate of inflation. The cost of attending a two-year community college is increasing a third faster than the rate of inflation.

However, in light of the COVID-19 pandemic, this has changed slightly. From the 2020-2021 school year and the 2021-2022 school year, tuition and fees increased by about 0.6% on average, while overall prices in the U.S. increased by 3.2%, according to Bloomberg based on data from the BLS.

The Takeaway

College tuition has increased dramatically — increasing by nearly 180% in the past 20 years. The reasons for such an rise in tuition can be attributed to a variety of factors including less state funding, an increase in demand, and even an increase in the amount of federal aid awarded.

Despite the seeming downsides to inflation and college costs, SoFi can offer some major perks to help you pay for school with our private student loans. Note because private student loans don’t offer the same benefits as federal student loans (like income-driven repayment options), private student loans are generally considered only after students have carefully reviewed all other sources of funding and financial aid.

But, if private student loans seem like an option, you can check your rates and apply in minutes and easily add a cosigner if you so choose.^* Borrowers can choose from four flexible repayment options and there are no fees.

Get a quote for a private student loan in just a few minutes.

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SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student loans are not a substitute for federal loans, grants, and work-study programs. We encourage you to evaluate all your federal student aid options before you consider any private loans, including ours. Read our FAQs.

Terms and conditions apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. SoFi Private Student loans are subject to program terms and restrictions, such as completion of a loan application and self-certification form, verification of application information, the student's at least half-time enrollment in a degree program at a SoFi-participating school, and, if applicable, a co-signer. In addition, borrowers must be U.S. citizens or other eligible status, be residing in the U.S., Puerto Rico, U.S. Virgin Islands, or American Samoa, and must meet SoFi’s underwriting requirements, including verification of sufficient income to support your ability to repay. Minimum loan amount is $1,000. See SoFi.com/eligibility for more information. Lowest rates reserved for the most creditworthy borrowers. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change. This information is current as of 4/22/2025 and is subject to change. SoFi Private Student loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).

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

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

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

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As your child enters the “getting into college” phase of their lives, there’s a lot to talk about, from whether it’s better to take the SAT or ACT to how many schools they should apply to. At the same time, it’s important to discuss how your family is going to pay for college and, if debt will be part of the equation, how student loans work.

For one reason, the topic is pretty complicated. For another, even if you plan to help repay any student loans, most qualified education loans are taken out in the student’s name, which means they are personally on the hook for repayment. Maybe your student-athlete or scholar is counting on a full ride. While confidence is a wonderful thing, full rides are exceedingly rare.

Here are six student loan concepts you can discuss with your aspiring college student.

1. Here’s What We Think We Can Contribute

It might be uncomfortable to talk frankly about your family finances, but they almost always determine the amount and types of financial aid your child may qualify for.

It can be important for parents to discuss what they’re able to contribute in order to help their young adults wrap their heads around the numbers, too. How much debt they may need to take on to pay for college could impact where they choose to apply to school, since tuition costs vary widely.


💡 Quick Tip: When shopping for a private student loan lender, look for benefits that help lower your monthly payment.

2. Let’s Forge Ahead With the FAFSA

The first step to hunt for financial aid is to complete the Free Application for Federal Student Aid (FAFSA). While this form has a reputation for being long and complex, a new streamlined FAFSA is being released for the 2024-25 academic year. The new form is scheduled to become available by Dec. 31, 2023 — a delay from the typical Oct. 1 release date.

Based on financial need, a college’s cost of attendance, and FAFSA information, schools put together a financial aid package that may be composed of scholarships and grants, federal student loans, and/or work-study.

Awards based on merit (scholarships) or need (grants) are considered “free money” for college. When they don’t cover the full cost of college, that’s where student loans can come in.

If your income is high, should you bother with the FAFSA? Sure, because there’s no income cutoff for federal student aid. And even if your student is not eligible for federal aid, most colleges and states use FAFSA information to award non-federal aid.

3. Interest Rates: Fixed or Variable

Your soon-to-be college student may not know that there are two types of interest rates for student loans: fixed and variable.

Fixed interest rates stay the same for the life of the loan. Variable rates go up or down based on market fluctuations.

You can explain that all federal student loans have fixed interest rates, which are set each year by the federal government, and that private student loan interest rates may be variable or fixed.

4. Federal vs Private Student Loans

Around now your young person is restless. But press on.

Anyone taking out student loans should learn that there are two main types: federal and private. All federal student loans are funded by the federal government. Private student loans are funded by banks, credit unions, and online lenders.

If your child is going to borrow money for college, it’s generally advised to start with federal student loans. Since federal student loans are issued by the government, they have benefits, including low fixed interest rates, forbearance and deferment eligibility, and income-based repayment options.

Private student loans have terms and conditions set by private lenders, and don’t offer the generous repayment options or loan forgiveness programs of federal loans, but some private lenders do offer specific deferment options.

Private student loans can be used to fill gaps in need, up to the cost of attendance, which includes tuition, books and supplies, room and board, transportation, and personal expenses. A student applicant often will need a cosigner.

5. Another Wrinkle: Subsidized vs Unsubsidized

Financial need will determine whether your undergraduate is eligible for federal Direct Subsidized Loans. Your child’s school determines the amount you can borrow, which can’t exceed your need.

The government pays the interest on Direct Subsidized Loans while your child is in college, during the grace period (the first six months after graduation or when dropping below half-time enrollment), and in deferment (postponing repayment).

With federal Direct Unsubsidized Loans, interest begins accruing when the funds are disbursed and continues during grace periods, and the borrower is responsible for paying it. Direct Unsubsidized Loans are available to both undergraduate and graduate students, and there is no requirement of financial need.

Borrowers are not required to pay the interest while in school, during grace periods, or during deferment (although they can choose to), but any accrued interest will be added to the principal balance when repayment begins.

There are annual and aggregate limits for subsidized and unsubsidized loans. Most dependent freshmen, for example, can borrow no more than $5,500, and no more than $3,500 of this amount may be in subsidized loans.


💡 Quick Tip: Parents and sponsors with strong credit and income may find much lower rates on no-fee private parent student loans than federal parent PLUS loans. Federal PLUS loans also come with an origination fee.

6. Soothing Words: Scholarships and Grants

It’s important to not overlook the non-loan elements of the financial aid package. They can (hooray) reduce the amount your student needs to borrow.

Scholarships and grants are essentially free money, since you are not required to pay the money back. While some schools automatically consider your student for scholarships based on merit or other qualifications, many scholarships and grants require applications.

You may want to assign a research project to your college-bound young adult to look into all of the scholarship options they may qualify for. There are numerous scholarship finders available online. They may also want to talk to their guidance counselor and the financial aid office of their chosen school to learn about opportunities.

The Takeaway

Debt isn’t the most thrilling parent-child topic, but college students who will need to borrow should know the ins and outs of student loans: interest rates, federal vs. private, subsidized vs. unsubsidized, and repayment options.

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

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

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About the author

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

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student loans are not a substitute for federal loans, grants, and work-study programs. We encourage you to evaluate all your federal student aid options before you consider any private loans, including ours. Read our FAQs.

Terms and conditions apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. SoFi Private Student loans are subject to program terms and restrictions, such as completion of a loan application and self-certification form, verification of application information, the student's at least half-time enrollment in a degree program at a SoFi-participating school, and, if applicable, a co-signer. In addition, borrowers must be U.S. citizens or other eligible status, be residing in the U.S., Puerto Rico, U.S. Virgin Islands, or American Samoa, and must meet SoFi’s underwriting requirements, including verification of sufficient income to support your ability to repay. Minimum loan amount is $1,000. See SoFi.com/eligibility for more information. Lowest rates reserved for the most creditworthy borrowers. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change. This information is current as of 4/22/2025 and is subject to change. SoFi Private Student loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).

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

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

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