Question 1

What's the difference between federal and private student loans?

Accepted Answer

Federal student loans are issued by the U.S. Department of Education and offer fixed interest rates (currently around 8.5% for new undergraduates in 2026), income-driven repayment plans, loan forgiveness programs like Public Service Loan Forgiveness (PSLF), and borrower protections such as deferment and forbearance. Private student loans are issued by banks, credit unions, and online lenders and typically offer variable or fixed rates based on creditworthiness, usually require stronger credit scores (660+), have fewer repayment options, and lack forgiveness programs. Federal loans are generally better for those with financial hardship, while private loans may benefit borrowers with excellent credit seeking lower rates.

Question 2

How does the SAVE repayment plan work?

Accepted Answer

The Saving on a Valuable Education (SAVE) plan is an income-driven repayment option that caps monthly payments at 10% of your discretionary income (down from 10-15% under other plans). If you earn less than 225% of the federal poverty line, your monthly payment is $0. The SAVE plan also provides faster forgiveness—after 20 years of payments (instead of 25) if you originally borrowed less than $12,000. Importantly, any unpaid accrued interest is covered by the government, so your balance won't grow due to unpaid interest. SAVE is available to federal loan borrowers and generally offers the most affordable option for those with lower incomes.

Question 3

What is Public Service Loan Forgiveness (PSLF)?

Accepted Answer

PSLF forgives the remaining balance on your federal Direct Loans after you make 120 qualifying monthly payments (10 years) while working for a qualifying employer—typically government agencies or eligible nonprofits. Qualifying payments must be made under an income-driven repayment plan or the 10-year Standard Repayment Plan. As of 2026, approximately 877,000 borrowers have had over $153 billion in loans forgiven through PSLF. The Biden administration's PSLF waiver removed previous restrictions, making it easier to qualify. Public interest lawyers, teachers, nurses, firefighters, and military service members are common beneficiaries of this program.

Question 4

When should I refinance my student loans?

Accepted Answer

Refinancing makes sense when you have federal or private loans with higher interest rates and can secure a lower rate from a private lender. Ideal candidates typically have a credit score of 680+, stable income, and a debt-to-income ratio below 50%. You should NOT refinance federal loans if you value income-driven repayment options, PSLF eligibility, or federal borrower protections. Consider refinancing if: (1) your current rate is 2%+ higher than available rates, (2) you have strong credit and stable income, (3) you don't need federal protections, (4) you're comfortable with fewer repayment options. As of 2026, market rates range from 5.99% to 12.99% depending on credit and term length.

Question 5

What are Parent PLUS loans and should I take them?

Accepted Answer

Parent PLUS loans are federal loans available to parents of dependent undergraduate students. These loans have a fixed interest rate (currently 9.05% in 2026) and allow borrowing up to the full cost of attendance minus other financial aid. Parent PLUS loans offer no income limits, no credit score requirement (though adverse credit review occurs), and federal protections like deferment and forbearance. However, they lack access to income-driven repayment plans and require immediate interest accrual. Consider alternatives like having your child take unsubsidized federal loans first, or exploring private parent loan options. Only take Parent PLUS if you can afford the payments and have exhausted other federal options.

Question 6

How do income-driven repayment plans work?

Accepted Answer

Income-driven repayment (IDR) plans adjust your federal loan payments based on your income and family size. Four main plans exist: SAVE (10% of discretionary income), PAYE (10% for new borrowers), REPAYE (10%), and IBR (10-15% depending on loan type). Discretionary income is calculated as Adjusted Gross Income minus 225% of the federal poverty line (typically $33,975 for single filers in 2026). With IDR plans, any unpaid accrued interest is covered by the government under SAVE, preventing balance growth. After 20-25 years of payments, remaining balances are forgiven (and potentially taxable). IDR plans are ideal for lower-income borrowers and those pursuing PSLF, as qualifying payments count toward the 120-payment requirement.

Question 7

Can I deduct student loan interest on my taxes?

Accepted Answer

Yes, you can deduct up to $2,500 in student loan interest per year on your federal tax return if you meet income requirements. For 2026, the phase-out begins at Modified Adjusted Gross Income (MAGI) of $75,000 (single) or $155,000 (married filing jointly), with complete phase-out at $90,000 and $185,000 respectively. This deduction is available to the primary borrower even if claimed as a dependent. You must have paid qualified student loan interest during the tax year and have a valid Social Security number. Note that only interest payments qualify—principal payments don't count. This deduction can save eligible borrowers approximately $625 in taxes annually at the highest bracket.

Question 8

What's the current federal student loan interest rate for 2026?

Accepted Answer

As of 2026, federal undergraduate loan rates are 8.5% (fixed), down from 8.05% in 2025 but reflecting volatility in the market. Federal graduate loans are 10.45%, and Parent PLUS loans are 9.05%. These rates are set annually based on the 10-year Treasury note yield plus a fixed margin. All federal loans issued in a given academic year carry the same interest rate regardless of when you borrowed. These rates are significantly higher than the 3-4% rates available in 2021-2023, making refinancing more attractive for eligible borrowers with strong credit. Undergraduate federal loans are capped at 8.25%, while graduate loans cap at 9.5% and Parent PLUS loans at 10.5%.

Feature	Earnest	SoFi	Splash Financial	ELFI	Laurel Road
Fixed APR	5.99% - 11.99%Best	6.24% - 11.99%	6.00% - 12.49%	6.49% - 12.99%	6.99% - 11.99%
Variable APR	4.99% - 10.99%	5.34% - 10.66%Best	5.50% - 11.25%	5.99% - 10.99%	5.49% - 9.99%
Loan Amounts	$5,000 - $500,000	$5,000 - $500,000+	$5,000 - $500,000	$5,000 - $500,000	$5,000 - $500,000
Terms	5 - 20 years	5 - 20 years	5 - 20 years	5 - 20 years	5 - 20 years
Min Credit Score	680	670	660	650	700Best
Unique Features	Income verification flexibility, auto pay discount	Career coaching, unemployment protection, member benefits	Marketplace model, co-signer option, fast funding	Lower credit minimums, educational resources	Medical & legal professional specialization
Best For	Borrowers with strong credit seeking flexibility	All-in-one financial platform seekers	Borrowers needing co-signer options	Borrowers with fair credit	Healthcare and legal professionals

Navigate Student Loans with Confidence

Federal vs. Private Student Loans

Federal Loans

Private Loans

Top Student Loan Refinancing Lenders

Student Loan Repayment Strategies

Standard Repayment

Income-Driven Repayment

Refinancing

Forgiveness Programs

Monitor Your Credit Before Refinancing

Key Numbers to Know

Frequently Asked Questions