It is no secret that the cost of education has increased dramatically over the last several decades. At the current rate, the cost of college doubles every nine years. The rapid increase in the cost of education has forced generations of Americans to rely on student loans to afford a degree. Unsurprisingly, almost 70% of students in the Class of 2019 took out student loans.
Since borrowing affects most students in the US, it is important to know how the student lending industry operates. In this article, we’ll break down everything you need to know about student loans.
A student loan is money borrowed from the government or a private lender, designated for educational purposes. Typically, these loans cover the cost of tuition, books, supplies, and room-and-board.
You should only take out student loans after you’ve exhausted grants, work-study, and scholarships.
While it is best to avoid debt, many financial professionals classify student loans as “good debt.” That’s because a college education is seen as an investment in yourself that helps increase your lifetime earning potential. In other words, the career earnings unlocked by a college degree are worth more than the loan. On average, college graduates earn more money and have better job security across their professional careers than those with only a high school diploma.
There are three main types of student loans:
Federal student loans are provided by the U.S. Department of Education, while private student loans and student loan refinancing are supported by banks, credit unions, non-profits, and other private lenders.
Of the three types of debt, federal loans usually have the lowest interest rates and most flexible repayment options. With that said, the particular loan that is best for you depends on your financial need, year in school, and credit history.
After you’ve exhausted grants, work-study, and scholarships, you should turn to federal student loans to pay for college.
In this section, we’ll break down:
If you want to skip pre-qualification and apply directly with a lender, you can do so by clicking Apply below.
To apply for federal student loans, you must fill out the Free Application for Federal Student Aid (FAFSA). The FAFSA is the go-to form that determines your eligibility for federal financial aid.
To receive federal support, you must be a U.S. citizen, have a valid social security number, have earned a high school diploma, and be enrolled at an eligible college or university.
The FAFSA is available starting Oct. 1 the year before a you plans to enroll. For example, if you are enrolling for the 2022-23 school year, the FAFSA will be available on Oct. 1, 2021.
The FAFSA is accepted, reviewed, and distributed on a rolling basis. You should complete the FAFSA form as early as possible. The earlier you apply, the better your chances are for receiving financial aid awards.
Federal student loans come with many benefits and protections that are not typically offered with private student loans. Designed to reduce the burden of repayment, these advantages include:
Federal student loans typically have lower interest rates than private loans. Rates for new federal loans are also fixed, meaning they’ll stay constant during the entire loan term.
Unlike private student loans, most federal loans do not require you to have credit history. The only type of federal loan that requires a credit check is Direct PLUS, which is available to graduate students and parents. This makes federal student loans the best option if you have a limited credit history.
Federal student loans do not require cosigners. This means you do not need to rely on a relative for financial help, making the process much easier for those legally and financially independent.
There is one exception: if you are a graduate student or parent applying for a Direct PLUS loan and have a poor credit history, you may not be eligible without an “endorser,” which is similar to a cosigner.
Federal student loans offer forbearance and deferment options if you face economic hardship. Forbearance and deferment allow you to postpone your student loan payments for up to three years.
Federal student loans offer a repayment plan that is based on your income. With income-driven repayment, you pay a percentage of your income each month — or $0 if you have no income.
The Public Service Loan Forgiveness program allows you to have loans forgiven after at least 10 years of public service and 120 qualifying monthly payments.
Loan forgiveness is also available after you have made qualifying monthly payments in an income-driven repayment plan for 20 to 25 years.
There are three types of federal student loans:
We’ll break down what you need to know about each of the loans below.
In order to qualify for Direct Subsidized loans, you must be an eligible undergraduate student who demonstrates financial need.
Your school determines the amount you can borrow based on your cost of attendance and other financial aid you receive.
The maximum amount you can borrow each academic year in Direct Unsubsidized loans ranges from $5,500 to $12,500 for undergraduates, depending on your year in school and your dependency status. Direct Unsubsidized loans have an annual limit of $20,500 for graduate or professional students.
The interest rate for Direct Unsubsidized loans is 5.28% for 2021-22.
Similar to Subsidized loans, when you take out a Direct Unsubsidized loan, you will be charged an origination fee — a fee meant to offset a lender’s cost for issuing a loan. The origination fee is deducted from the loan disbursement before you or the school receives the funds. Currently, the origination fee on Direct Unsubsidized loans is 1.057%, but it changes each year on October 1st.
So for example, if you borrow $20,000 in Direct Unsubsidized loan, 1.057% (or $211) will go to the federal government, while the remaining $19,789 will go to your school (and then you).
When you take out a Direct Unsubsidized loan, you have a 6 month grace period. Unlike with Direct Subsidized loans, however, you are responsible for all interest charges on unsubsidized loans, from the moment you take out the loan until the day you pay it off.
Direct Unsubsidized loans are a great choice for undergraduate who have exhausted their Direct Subsidized loans. They’re also the preferred option for graduate and professional degree students who need federal funding. That is because of the relatively low interest rate and higher borrowing limits.
With that said, if you meet the financial need requirements to qualify for subsidized loans, you’ll pay less over time than you would with unsubsidized loans. Unlike with Direct Subsidized loans, you are responsible for all interest charges on Unsubsidized loans, from the moment you take out the loan until the day you pay it off.
Subsidized
Unsubsidized
Qualification
Need-based
Merit-based
Annual borrowing limit
$5,500 – $12,500, depending on your year in school and dependency status
$5,500 – $12,500, depending on your year in school and dependency status
Interest while
in school
Government pays interest while you’re in school
Interest accrues while you’re in school that you must eventually pay
Eligible borrowers
Undergraduates only
Undergraduate and graduate or professional degree students
There are two types of Direct PLUS loans: Grad PLUS loans and Parent PLUS loans.
Grad PLUS loans allow graduate and professional students to borrow money to pay for their own education. You can use Grad PLUS loans to cover any costs not already covered by other financial aid or grants, up to the full cost of attendance.
Parent PLUS loans allow parents of dependent students to borrow money to cover any costs not already covered by the student’s financial aid package, up to the full cost of attendance. The program does not set a cumulative limit to how much parents may borrow. Parent PLUS loans are the financial responsibility of the parents, not the student.
While most federal student loans are need or merit-based, Direct PLUS loans are based on a credit check. If you have a poor credit history, you will have a harder time qualifying and might require an “endorser” (essentially a cosigner, who pledges to pay back the loan if the primary borrower cannot). Even if you have an adverse credit history, you may still be able to receive a PLUS loan if you meet additional requirements.
The maximum PLUS loan amount you can receive is the cost of attendance (determined by the school) minus any other financial aid received.
The interest rate for Direct PLUS loans is 6.28% for 2021-22.
Similar to Subsidized and Unsubsidized loans, when you take out a Direct PLUS Loan, you will be charged an origination fee — a fee meant to offset a lender’s cost for issuing a loan. The origination fee is deducted from the loan disbursement before you or the school receives the funds. Currently, the origination fee on Direct PLUS Loans is 4.228%, but it changes each year on October 1st.
So for example, if you borrow $12,500 in Direct PLUS Loan, 4.228% (or $528) will go to the federal government, while the remaining $11,971 will go to your school (and then you).
Direct PLUS loans are not subsidized, which means that interest accrues while you are enrolled in school. Direct PLUS loans also do not have a “grace period,” which means you must start repaying PLUS loans as soon as you or the school receives the loan funds.
Direct PLUS loans can be a good option for parents and grad students, alike.
If you’re a parent, you should take out PLUS loans if you need the safety net or want the benefits these loans offer, such as income-driven repayment plans and Public Service Loan Forgiveness.
If you’re a student, you should take out PLUS loans to pay for grad school only after you have maxed out the borrowing limit on lower-interest unsubsidized loans.
Loan Type
Borrower Type
Interest Rate
Origination Fee
Direct Subsidized Loans & Direct Unsubsidized Loans
Undergraduates
3.73%
1.057%
Direct Unsubsidized Loans
Graduate or Professional Students
5.28%
1.057%
Direct PLUS Loans
Parents and Graduate or Professional Students
6.28%
4.228%
Federal student loans offer several repayment options depending on the loan type. These options include:
Check out the information below for a complete breakdown of the different repayment options for federal student loans.
The standard payment plan is available to all borrowers and is great if you want to pay off your debt in the shortest period of time. With a standard student loan payment option, you would make equal monthly payments for 10 years. You’ll pay less interest and pay off your loans faster than you would on other plans.
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Shorter repayment period compares to other optionsLess interest over time
You may have higher monthly payments compared to the other optionsYour monthly payment would remain the same even if your income droppedThe graduated repayment plan allow you to start your payments off at a lower amount and gradually increase to the full payment over a 10-year period. This plan is ideal if you plan to start your career at a lower income level or do not plan to dive into full-time work immediately after graduation.
The 10 year repayment period allows you to pay off your loans faster compared to other plansYour payments might align better with the entry-level wages many new graduates take onYou would pay slightly more over time in comparison to the standard repayment plan since more interest would accrue while you’re making smaller paymentsYou could be in a tough spot if your income does not grow over time as you expectThe extended repayment plan is available to all borrowers except those with Federal Direct Loans or Federal Family Education Loans (FFEL) that owe less than $30,000. This option allows for either a fixed or graduated payment, leading to full repayment by the end of a 25 year period.
This option is ideal if you have a hefty total loan amount and need a smaller monthly payment.
Lower monthly payments relative to other plansYou have the option to choose either fixed or graduated paymentsThere is no option for loan forgiveness as with the income-driven repayment optionsThe longer repayment period would cause you to pay more interest over time in comparison to the other plansIncome-driven repayment plans use your income to set a monthly payment. This amount is typically 10-20% of your income and can be as low as $0 if you’re unemployed. With these plans, your loan term is extended, usually to around 12-25 years. When this term is up, the remaining balance you owe will sometimes be forgiven. However, you would be required to pay taxes on the forgiven amount, so you are not totally off the hook.
There are 5 different income-driven repayment options offered for federal student loans. Each of the income-driven repayment options has its own specific requirements in order to qualify, but they’re all ideal for people whose monthly income is too low to pay the standard monthly payment.
The PAYE plan makes your monthly payment 10% of your discretionary income. The payments are reevaluated every year and updated if your income changes for any reason or if your family size changes. If you have not repaid your loan in full after 20 years, the remaining balance will be forgiven.
The REPAYE plan makes your monthly payments 10% of your discretionary income and is recalculated every year in the same way the PAYE plan is. For undergraduate loans, your remaining balance will be forgiven after 20 years, and for graduate loans, 25 years.
An IBR plan sets monthly payments at either 10 or 15 percent of your discretionary income, neither amounting to more than what you would pay under the 10-year standard repayment plan. Payments are reevaluated every year based on changes in income and family size. Depending on when you received your first loan, your remaining balance will be forgiven after either 20 or 25 years. It is important to note that you may have to pay taxes on this forgiven amount.
The ICR plan sets monthly payments at whichever is lesser: 20% of discretionary income OR the monthly payment you’d have on a plan with a fixed payment over 12 years, adjusted to your income. Payments are reevaluated and updated based on changes in your income and family size. Outstanding balances are forgiven after 25 years.
The ISR plan sets monthly payments based on your annual income with the caveat that the loan is paid in full within 15 years.
Your monthly payments would likely be more affordableYour monthly payments would decrease if your income decreased, so you would not be locked into paying a certain amount each month even if you fall into economic hardshipYou may pay more in interest with a longer repayment periodThe total amount you pay could be more than the standard repayment plan depending on the plan you chooseYou must meet certain requirements in order to qualifyPrivate student loans can help you pay for college after you’ve exhausted scholarships, grants, and federal loans.
In this section, we’ll break down:
Private loans are made by private lenders such banks, credit unions, non-profits, and online lenders, and have terms and conditions that are set by the lender. Private student loans typically have higher interest rates and less flexible repayment options compared to federal student loans.
To qualify for a private student loan, you’ll need to attend an eligible school, as well as meet any age, education, or citizenship requirements. You’ll also need to meet a lender’s criteria for credit and income, or apply with a cosigner who does.
While most private student loans are credit-based, there are a handful of private student loans that are future-income-based. These are great for students who cannot meet the credit requirements and do not have access to a qualified cosigner.
Private student loans have a higher borrowing limit compared to federal loans. Private lenders allow you to borrow up to your school’s cost of attendance. With that said, it is wise to only borrow what you need — and what you can afford to repay.
The interest rate on your private student loan depends on a few main factors:
Most private student loans are credit-based. That means the lender looks at your history of borrowing money and paying it back on time. They want to know how creditworthy, or how responsible you are with credit, before approving your student loan application.
In general, a higher credit score leads to a lower interest rate. The reverse is also true — a lower credit score leads to a higher interest rate.
Most private lenders allow you to choose between a fixed and variable interest rate.
A fixed interest rate stays the same for the life of the loan. This means you’ll have a predictable student loan payment each month.
A variable interest rate fluctuates throughout the life of the loan depending on economic conditions. Variable interest rates often start out lower than fixed rates but can change, so your monthly student loan payments may vary considerably from month to month.
In general, fixed student loan interest rates are a better option than variable rates. That is because fixed rates always stay the same, so you will know exactly how much you need to pay each month. If you’re unsure which rate to choose, go with fixed; it is the safer option and allows you to budget accordingly. If you’re comfortable taking a risk to potentially save on interest, consider a variable rate.
Loan term, also called loan duration, is the length of time you’ll have to pay off your loan. Private student loan terms usually range between 5-20 years, with plenty of options in between. Keep in mind that the longer your loan term, the more time interest accrues — this leads to higher total cost.
A simple way to think about is:
The shorter the loan term, the higher the monthly payments. If you’re making high monthly payments, the faster the loan will be paid off and the lower the total cost, since interest has less time to accrue.
On the other hand, the longer the loan term, the lower the monthly payments.If you’re making low monthly payments, the slower the loan will be paid off and the higher the total cost, since interest has more time to accrue.
If you cannot qualify for a student loan on your own, most private lenders will encourage you to apply with a cosigner. A cosigner is a person – such as a parent, close family member, or friend – who pledges to pay back the loan if you do not. This can be a benefit both to you and your lender since many many college-bound high school students have not had time to build up their own credit. However, it is risky to be the cosigner because if the student is unable to pay the loan back, the cosigner is responsible to pay on their behalf.
While repayment options depend on the lender, most private lenders offer some variation of the repayment plans below.
Repayment Option
Terms
Pros
Cons
Immediate Repayment
Make full payments as soon as the loan is disbursed, while you’re still in school.
You will minimize the interest you pay, resulting in the greatest savings. Because you’re paying down both interest and principal while you’re still in school, you’ll already have made a good start on repaying your loan by the time you graduate.
For many students, it is not realistic to make full monthly payments while still enrolled in college.
Interest-Only Repayment
Pay only interest while you’re in school.
Your monthly payments will be more manageable, and your loan balance will not grow while you’re in school.
You will not make any progress paying down your loan balance while you’re a student. But at least you will not owe more than you borrowed when it is time to start making full payments.
Partial Repayment
Pay $25 per month while you’re in school to reduce accrued interest.
You can keep your loan balance in check, and reduce the total amount repaid.
You’ll still owe more than you borrowed when you graduate, but your loan balance will not grow as quickly.
Deferred Repayment
Do not make any payments while you’re in school. Begin repayment after graduation or 6 months after graduation.
You will not have to make payments while you’re in school.
You will likely pay the highest overall cost since unpaid interest will be added to your principal amount at the end of your grace period.
Many lenders allow you to get an interest rate reduction by signing up for automatic payments. The autopay discount generally starts at 0.25% but can go up to 2%, depending on the lender.
An origination fee is a you must pay to offset a lender’s cost for issuing a loan. Private loans rarely have an origination fee, but all federal loans do (although at different rates: 1.057% for federal subsidized and unsubsidized and 4.228% for Federal PLUS).
A prepayment penalty is a fee you would have to pay if you want to repay your loans early. It is not allowed on any student loans, federal or private.
There is generally no cost to apply for private student loans.
Student loan refinancing is when a lender pays off your existing loans and gives you a new one with a lower interest rate or repayment plan. In the long run, this saves you money since you’ll be paying less interest.
Refinancing could look like this [note: this is a very basic example]:
Loan 1: $10,000 at 7.5% interest rate
Loan 2: 13,000 at 8.25% interest rate
~insert magical refinancing here~
New Loan: $23,000 at 5.25% interest rate
Notice that the new loan is for the same amount of total debt, however, the interest rate is lower. This would save you money in the long run since less interest would accrue.
To contextualize this information, let’s look at an example. Let’s say you took out a student loan of $36,405 at an interest rate of 4.66% during undergrad and you plan on paying it off over the next 10 years at a monthly rate of around $380. By the time you finish paying it off, you will have actually paid $45,614.52–the original $36,405 plus $9,208.42 in interest. On the other hand, if you refinance for an interest rate of 2.59% over the same ten-year period, you can reduce your monthly payments to $344.69, and pay only $4,956.52 in interest, saving $4,251.50 over the lifetime of the loan.
Generally, you need a strong credit score (mid-high 600s), a stable income, or a qualified cosigner to refinance.
You should refinance your loans if it will save money. Generally, a lower interest rate and shorter repayment plan will lead to extra savings.
Ascent Funding, LLC products are made available through Bank of Lake Mills or DR Bank, each Member FDIC. Subject to credit approval. Loan products may not be available in certain jurisdictions. Certain restrictions, limitations, terms and conditions may apply for Ascent’s Terms and Conditions please visit AscentFunding.com/Ts&Cs. Annual Percentage Rates (APRs) displayed above are effective as of 06/01/2026 and reflect an Automatic Payment Discount (ACH). The ACH discount consists of 0.25% on credit-based college student loans submitted prior to 6/1/2025, a 0.5% discount for on credit-based college student loans submitted on or after 6/1/2025 and a 1.00% discount on outcomes-based loans when you enroll in automatic payments. Loans subject to individual approval, restrictions and conditions apply. Loan features and information advertised are intended for college student loans and are subject to change at any time. For more information, see repayment examples or review the Ascent Student Loans Terms and Conditions. The final amount approved depends on the borrower’s credit history, verifiable cost of attendance as certified by an eligible school and is subject to credit approval and verification of application information. Lowest interest rates require full principal and interest (Immediate) payments, the shortest loan term, a cosigner, and are only available for our most creditworthy applicants and cosigners with the highest average credit scores. Actual APR offered may be higher or lower than the examples above, based on the amount of time you spend in school and any grace period you have before repayment begins. Variable rates may increase after consummation.1% Cash Back Graduation Reward subject to terms and conditions. For details on Ascent borrower benefits, visit AscentFunding.com/BorrowerBenefits. Ascent applicants and borrowers that agree to the AscentUPTerms of Service and Privacy Policy, as well as students associated with an Ascent parent loan application, have access to the AscentUP platform.
Ascent’s undergraduate and graduate student loans are funded by Bank of Lake Mills or DR Bank, each Member FDIC. Subject to credit approval. Loan products may not be available in certain jurisdictions. Certain restrictions, limitations, terms and conditions may apply for Ascent’s Terms and Conditions please visit AscentFunding.com/Ts&Cs.
Annual Percentage Rates (APRs) displayed are effective as of 06/1/2026 and reflect an Automatic Payment Discount (ACH). The ACH discount consists of 0.25% on credit-based college student loans submitted prior to 6/1/2025, a 0.5% discount for on credit-based college student loans submitted on or after 6/1/2025 and a 1.00% discount on outcomes-based loans when you enroll in automatic payments. Loans subject to individual approval, restrictions, and conditions apply. Loan features and information advertised are intended for college student loans and are subject to change at any time.
The final amount approved depends on the borrower’s credit history, verifiable cost of attendance as certified by an eligible school and is subject to credit approval and verification of applicatio_n information. Lowest interest rates require full principal and interest (Immediate) payments, the shortest loan term, a cosigner, and are only available for our most creditworthy applicants and cosigners with the highest average credit scores. Actual APR offered may be higher or lower than the examples above, based on the amount of time you spend in school and any grace period you have before repayment begins. Variable rates may increase after consummation. 1% Cash Back Graduation Reward subject to terms and conditions. For details on Ascent borrower benefits, visit AscentFunding.com/BorrowerBenefits. Ascent applicants and borrowers that agree to the AscentUP Terms of Service and Privacy Policy, as well as students associated with an Ascent parent loan application, have access to the AscentUP platform.
The following examples for a $10,000 loan show a 48-month in-school period plus 9 months of grace prior to a full repayment term for 60-months (variable rate), with examples of (i) Interest Only payments, (ii) $25 Minimum payments, (iii) Deferred repayment, and (iv) Immediate Repayment options.
* Interest Only Repayment: 5.99% APR, with 57 payments of $49.92 while in-school/grace, 60 payments of $193.3 during the repayment term, and a total cost of $14,444.39.
* $25 Minimum Payment: 6.60% APR, with 57 payments of $25.00 while in-school/grace, 60 payments of $235.46 during the repayment term, and a total cost of $15,553.03.
* Deferred Repayment: 6.79% APR, with no payment while in-school/grace, 60 payments of $271.69 during the repayment term, and a total cost of $16,267.27.
* Immediate Repayment: 3.99% APR, with 60 payments of $184.13, and a total cost of $11,047.62.
The following examples for a $10,000 loan show a 48-month in-school period plus 9 months of grace prior to a full repayment term for 180-months (highest variable rate), with examples of (i) Interest Only payments, (ii) $25 Minimum payments, (iii) Deferred repayment, and (iv) Immediate Repayment options.
* Interest Only Repayment: 15.40% APR, with 57 payments of $128.25 while in-school/grace, 180 payments of $142.67 during the repayment term, and a total cost of $32,996.72.
* $25 Minimum Payment: 13.95% APR, with 57 payments of $25.00 while in-school/grace, 180 payments of $230.08 during the repayment term, and a total cost of $42,842.24.
* Deferred Repayment: 14.20% APR, with no payment while in-school/grace, 180 payments of $263.35 during the repayment term, and a total cost of $46,603.55.
* Immediate Repayment: 15.15% APR, with 180 payments of $140.97, and a total cost of $25,376.92.
Ascent Funding, LLC products are made available through Bank of Lake Mills or DR Bank, each Member FDIC. Subject to credit approval. Loan products may not be available in certain jurisdictions. Certain restrictions, limitations, terms and conditions may apply for Ascent’s Terms and Conditions please visit AscentFunding.com/Ts&Cs. Annual Percentage Rates (APRs) displayed above are effective as of 06/01/2026 and reflect an Automatic Payment Discount (ACH). The ACH discount consists of 0.25% on credit-based college student loans submitted prior to 6/1/2025, a 0.5% discount for on credit-based college student loans submitted on or after 6/1/2025 and a 1.00% discount on outcomes-based loans when you enroll in automatic payments. Loans subject to individual approval, restrictions and conditions apply. Loan features and information advertised are intended for college student loans and are subject to change at any time. For more information, see repayment examples or review the Ascent Student Loans Terms and Conditions. The final amount approved depends on the borrower’s credit history, verifiable cost of attendance as certified by an eligible school and is subject to credit approval and verification of application information. Lowest interest rates require full principal and interest (Immediate) payments, the shortest loan term, a cosigner, and are only available for our most creditworthy applicants and cosigners with the highest average credit scores. Actual APR offered may be higher or lower than the examples above, based on the amount of time you spend in school and any grace period you have before repayment begins. Variable rates may increase after consummation.1% Cash Back Graduation Reward subject to terms and conditions. For details on Ascent borrower benefits, visit AscentFunding.com/BorrowerBenefits. Ascent applicants and borrowers that agree to the AscentUPTerms of Service and Privacy Policy, as well as students associated with an Ascent parent loan application, have access to the AscentUP platform.
Ascent’s undergraduate and graduate student loans are funded by Bank of Lake Mills or DR Bank, each Member FDIC. Subject to credit approval. Loan products may not be available in certain jurisdictions. Certain restrictions, limitations, terms and conditions may apply for Ascent’s Terms and Conditions please visit AscentFunding.com/Ts&Cs.
Annual Percentage Rates (APRs) displayed are effective as of 06/1/2026 and reflect an Automatic Payment Discount (ACH). The ACH discount consists of 0.25% on credit-based college student loans submitted prior to 6/1/2025, a 0.5% discount for on credit-based college student loans submitted on or after 6/1/2025 and a 1.00% discount on outcomes-based loans when you enroll in automatic payments. Loans subject to individual approval, restrictions, and conditions apply. Loan features and information advertised are intended for college student loans and are subject to change at any time.
The final amount approved depends on the borrower’s credit history, verifiable cost of attendance as certified by an eligible school and is subject to credit approval and verification of applicatio_n information. Lowest interest rates require full principal and interest (Immediate) payments, the shortest loan term, a cosigner, and are only available for our most creditworthy applicants and cosigners with the highest average credit scores. Actual APR offered may be higher or lower than the examples above, based on the amount of time you spend in school and any grace period you have before repayment begins. Variable rates may increase after consummation. 1% Cash Back Graduation Reward subject to terms and conditions. For details on Ascent borrower benefits, visit AscentFunding.com/BorrowerBenefits. Ascent applicants and borrowers that agree to the AscentUP Terms of Service and Privacy Policy, as well as students associated with an Ascent parent loan application, have access to the AscentUP platform.
The following examples for a $10,000 loan show a 48-month in-school period plus 9 months of grace prior to a full repayment term for 60-months (variable rate), with examples of (i) Interest Only payments, (ii) $25 Minimum payments, (iii) Deferred repayment, and (iv) Immediate Repayment options.
* Interest Only Repayment: 5.99% APR, with 57 payments of $49.92 while in-school/grace, 60 payments of $193.3 during the repayment term, and a total cost of $14,444.39.
* $25 Minimum Payment: 6.60% APR, with 57 payments of $25.00 while in-school/grace, 60 payments of $235.46 during the repayment term, and a total cost of $15,553.03.
* Deferred Repayment: 6.79% APR, with no payment while in-school/grace, 60 payments of $271.69 during the repayment term, and a total cost of $16,267.27.
* Immediate Repayment: 3.99% APR, with 60 payments of $184.13, and a total cost of $11,047.62.
The following examples for a $10,000 loan show a 48-month in-school period plus 9 months of grace prior to a full repayment term for 180-months (highest variable rate), with examples of (i) Interest Only payments, (ii) $25 Minimum payments, (iii) Deferred repayment, and (iv) Immediate Repayment options.
* Interest Only Repayment: 15.40% APR, with 57 payments of $128.25 while in-school/grace, 180 payments of $142.67 during the repayment term, and a total cost of $32,996.72.
* $25 Minimum Payment: 13.95% APR, with 57 payments of $25.00 while in-school/grace, 180 payments of $230.08 during the repayment term, and a total cost of $42,842.24.
* Deferred Repayment: 14.20% APR, with no payment while in-school/grace, 180 payments of $263.35 during the repayment term, and a total cost of $46,603.55.
* Immediate Repayment: 15.15% APR, with 180 payments of $140.97, and a total cost of $25,376.92.
Loan products, terms, and benefits may be modified or discontinued by participating lenders at any time without notice. Rates displayed are reserved for the most creditworthy consumers who enroll to make automatic monthly payments. Your initial rate will be determined after a review of your application and credit profile. Variable rates may increase after consummation. You must be either a U.S. citizen or Permanent Resident in an eligible state and from an eligible school, and meet the lender’s credit and income requirements to qualify for a loan. Certain membership requirements (including the opening of a share account, a minimum share account deposit, and the payment of any applicable association fees in connection with membership) may apply in the event that an applicant wishes to apply with, and accept a loan offered from, a credit union lender. If you are not a member of the credit union lender, you may apply and become a member during the loan application process if you meet the lender’s eligibility criteria. Applying with a creditworthy cosigner may result in a better chance of loan approval and/or lower interest rate. Loans for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not available via LendKey.com.
Some lenders participating on LendKey.com may offer the benefit of cosigner release. Cosigner release is subject to lender approval. In order to qualify, the borrower, alone, must meet the following requirements: (1) Make the required number of consecutive, on-time full principal and interest payments as indicated in the borrower’s credit agreement during the repayment period (excluding interest-only payments) immediately prior to the request. Any period of forbearance will reset the repayment clock; (2) The account cannot be in delinquent status; (3) The borrower must provide proof of income indicating that he/she meets the income requirements and pass a credit review demonstrating that he/she has a satisfactory credit history and the ability to assume full responsibility of loan repayment; (4) No bankruptcies or foreclosures in the last sixty months; and (5) No loan defaults.
Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments.
Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised APR is only available for loan terms of 10 years and is reserved for the highest qualified applicants, taking into consideration the applicant’s credit and other factors.
Loan products, terms, and benefits may be modified or discontinued by participating lenders at any time without notice. Rates displayed are reserved for the most creditworthy consumers who enroll to make automatic monthly payments. Your initial rate will be determined after a review of your application and credit profile. Variable rates may increase after consummation. You must be either a U.S. citizen or Permanent Resident in an eligible state and from an eligible school, and meet the lender’s credit and income requirements to qualify for a loan. Certain membership requirements (including the opening of a share account, a minimum share account deposit, and the payment of any applicable association fees in connection with membership) may apply in the event that an applicant wishes to apply with, and accept a loan offered from, a credit union lender. If you are not a member of the credit union lender, you may apply and become a member during the loan application process if you meet the lender’s eligibility criteria. Applying with a creditworthy cosigner may result in a better chance of loan approval and/or lower interest rate. Loans for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not available via LendKey.com.
Some lenders participating on LendKey.com may offer the benefit of cosigner release. Cosigner release is subject to lender approval. In order to qualify, the borrower, alone, must meet the following requirements: (1) Make the required number of consecutive, on-time full principal and interest payments as indicated in the borrower’s credit agreement during the repayment period (excluding interest-only payments) immediately prior to the request. Any period of forbearance will reset the repayment clock; (2) The account cannot be in delinquent status; (3) The borrower must provide proof of income indicating that he/she meets the income requirements and pass a credit review demonstrating that he/she has a satisfactory credit history and the ability to assume full responsibility of loan repayment; (4) No bankruptcies or foreclosures in the last sixty months; and (5) No loan defaults.
Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments.
Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised APR is only available for loan terms of 10 years and is reserved for the highest qualified applicants, taking into consideration the applicant’s credit and other factors.
Actual rate and available repayment terms will vary based on your financial profile. Fixed annual percentage rates (APR) range from 3.04% to 16.74% (2.79% – 16.49% with Auto Pay discount). Variable annual percentage rates (APR) range from 5.24% to 17.10% (4.99% – 16.85% with Auto Pay discount). Earnest variable interest rate student loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent plus a margin and will change on the 1st of each month. The rate will not increase more than once a month, but there is no limit on the amount that the rate could increase at one time. Our lowest rates are only available for our most credit qualified borrowers and requires selection of our shortest term offered, full principal and interest payment while in school, and enrollment in our 0.25% Auto Pay discount from a checking or savings account. Enrolling in Auto Pay is not required as a condition for approval. Interest rates are subject to change. Rates include enrollment in Auto Pay discount. You can take advantage of the Auto Pay interest rate reduction by setting up and maintaining active and automatic ACH withdrawal of your loan payment from a checking or savings account. The interest rate reduction for Auto Pay will be available only while your loan is enrolled in Auto Pay. Interest rate incentives for utilizing Auto Pay may not be combined with certain private student loan repayment programs that also offer an interest rate reduction. For multi-party loans, only one party may enroll in Auto Pay. It is important to note that the 0.25% Auto Pay discount is not available when loan payments are deferred during the interim period as a result of selecting the deferred repayment option. Earnest Private Student Loans are made by FinWise Bank, Member FDIC. FinWise Bank, 756 East Winchester, Suite 100, Murray, UT 84107. Earnest student loans are serviced by Earnest Operations LLC, 300 Frank H. Ogawa Plaza, Suite 340, Oakland, CA 94612. NMLS #1204917, with support from Higher Education Loan Authority of the State of Missouri (MOHELA) (NMLS# 1442770). FinWise Bank and Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by agencies of the United States of America.
1. Repayment terms and repayment options available vary based on loan type.
2. Available interest rates are subject to change. Interest rates as of 03/19/2026. Earnest’s Loan Cost Examples:
1.) These examples provide estimates based on principal and interest payments beginning immediately upon loan disbursement. Variable annual percentage rate (“APR”): A $10,000 loan with a 15-year term (180 monthly payments of $152.84) and a 16.85% interest rate without Auto Pay (16.85% APR) would result in a total estimated payment amount of $27,511.20. For a variable loan, after your starting rate is set, your rate will then vary with the market. Fixed APR: A $10,000 loan with a 15-year term (180 monthly payments of $150.30) and a 16.49% interest rate without Auto Pay (16.49% APR) would result in a total estimated payment amount of $27,054.10.
2.) These examples provide estimates based on interest-only payments while in school. Variable interest rate: A $10,000 loan with a 15-year term (180 monthly payments of $152.84) and a 16.85% interest rate without Auto Pay (16.85% APR) would result in a total estimated payment amount of $35,515.14. For a variable loan, after your starting rate is set, your rate will then vary with the market. Your actual repayment terms may vary. Other repayment options are available. The calculation assumes that the “in-school” period is 4 years (48 months) and includes our 9 month grace period, during which the monthly payment will be $140.42 for 57 months. Fixed interest rate: A $10,000 loan with a 15-year term (180 monthly payments of $150.30) and a 16.49% interest rate without Auto Pay (16.49% APR) would result in a total estimated payment amount of $34,886.94. Your actual repayment terms may vary. Other repayment options are available. The calculation assumes that the “in-school” period is 4 years (48 months) and includes our 9 month grace period, during which the monthly payment will be $137.42 for 57 months.
3.) These examples provide estimates based on fixed $25 payments while in school. Variable interest rate: A $10,000 loan with a 15-year term (180 monthly payments of $253.39) and a 16.85% interest rate without Auto Pay (14.92% APR) would result in a total estimated payment amount of $47,035.20. For a variable loan, after your starting rate is set, your rate will then vary with the market. Fixed interest rate: A $10,000 loan with a 15-year term (180 monthly payments of $246.61) and a 16.49% interest rate without Auto Pay (14.65% APR) would result in a total estimated payment amount of $45,814.80. Your actual repayment terms may vary. Other repayment options are available. The calculation assumes that the “in-school” period is 4 years (48 months) and includes our 9 month grace period, during which the monthly payment will be $25.00.
4.) These examples provide estimates based on deferred payments. Variable interest rate: A $10,000 loan with a 15-year term (180 monthly payments of $275.17) and a 16.85% interest rate without Auto Pay (14.67% APR) would result in a total estimated payment amount of $49,530.60. For a variable loan, after your starting rate is set, your rate will then vary with the market. Fixed interest rate: A $10,000 loan with a 15-year term (180 monthly payments of $268.03) and a 16.49% interest rate without Auto Pay (14.39% APR) would result in a total estimated payment amount of $48,245.40. Your actual repayment terms may vary. Other repayment options are available. It is important to note that the 0.25% Auto Pay discount is not available when the deferred repayment option has been selected and the loan is in the interim period. The calculation assumes that the “in-school” period is 4 years (48 months) and includes our 9 month grace period, during which the monthly payment will be $0.
3. Nine-month grace period is not available for borrowers who choose our Principal and Interest Repayment plan while in school.
4. Earnest clients may skip a payment through a single, one-month forbearance during a 12 month period. Your first request to skip a pay can be made once you’ve made at least 6 months of consecutive on-time full principal and interest payments, and your loan is in good standing. The interest accrued during the skipped month will result in an increase in your remaining minimum payment. The final payoff date on your loan will be extended by the length of the skipped payment periods. Any unpaid accrued interest may capitalize (added to the principal balance) at the end of the forbearance period by adding unpaid accrued interest to the outstanding principal as permitted by law and the terms of the loan agreement. Please note that skipping a payment is not guaranteed and is at Earnest’s discretion. Your monthly payment and total loan cost may increase as a result of postponing your payment and extending your term.
5. Earnest does not charge fees for origination, late payments, returned check, or prepayments. Florida Stamp Tax: For Florida residents, Florida documentary stamp tax is required by law, calculated as $0.35 for each $100 (or portion thereof) of the principal loan amount, the amount of which is provided in the Final Disclosure. Lender will add the stamp tax to the principal loan amount. The full amount will be paid directly to the Florida Department of Revenue. Certificate of Registration No. 78-8016373916-1.
6. Residents of Hawaii must request a loan of at least $1,501.
7. To qualify for automatic cosigner release, the outstanding principal balance of your loan must be paid down to 50% or less of the original principal balance. The primary borrower must have made 36 months of required payments after the end of the Interim Period. The primary borrower must meet our eligibility and minimum credit requirements. Additional terms and conditions may apply. To request cosigner release, the primary borrower must have made 12 consecutive, monthly on-time principal and interest payments (or an amount equal thereto) immediately preceding the cosigner release application. The primary borrower must satisfy certain eligibility and credit criteria at the time of application. Additional terms and conditions may apply.
Actual rate and available repayment terms will vary based on your financial profile. Fixed annual percentage rates (APR) range from 3.04% to 16.74% (2.79% – 16.49% with Auto Pay discount). Variable annual percentage rates (APR) range from 5.24% to 17.10% (4.99% – 16.85% with Auto Pay discount). Earnest variable interest rate student loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent plus a margin and will change on the 1st of each month. The rate will not increase more than once a month, but there is no limit on the amount that the rate could increase at one time. Our lowest rates are only available for our most credit qualified borrowers and requires selection of our shortest term offered, full principal and interest payment while in school, and enrollment in our 0.25% Auto Pay discount from a checking or savings account. Enrolling in Auto Pay is not required as a condition for approval. Interest rates are subject to change. Rates include enrollment in Auto Pay discount. You can take advantage of the Auto Pay interest rate reduction by setting up and maintaining active and automatic ACH withdrawal of your loan payment from a checking or savings account. The interest rate reduction for Auto Pay will be available only while your loan is enrolled in Auto Pay. Interest rate incentives for utilizing Auto Pay may not be combined with certain private student loan repayment programs that also offer an interest rate reduction. For multi-party loans, only one party may enroll in Auto Pay. It is important to note that the 0.25% Auto Pay discount is not available when loan payments are deferred during the interim period as a result of selecting the deferred repayment option. Earnest Private Student Loans are made by FinWise Bank, Member FDIC. FinWise Bank, 756 East Winchester, Suite 100, Murray, UT 84107. Earnest student loans are serviced by Earnest Operations LLC, 300 Frank H. Ogawa Plaza, Suite 340, Oakland, CA 94612. NMLS #1204917, with support from Higher Education Loan Authority of the State of Missouri (MOHELA) (NMLS# 1442770). FinWise Bank and Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by agencies of the United States of America.
1. Repayment terms and repayment options available vary based on loan type.
2. Available interest rates are subject to change. Interest rates as of 03/19/2026. Earnest’s Loan Cost Examples:
1.) These examples provide estimates based on principal and interest payments beginning immediately upon loan disbursement. Variable annual percentage rate (“APR”): A $10,000 loan with a 15-year term (180 monthly payments of $152.84) and a 16.85% interest rate without Auto Pay (16.85% APR) would result in a total estimated payment amount of $27,511.20. For a variable loan, after your starting rate is set, your rate will then vary with the market. Fixed APR: A $10,000 loan with a 15-year term (180 monthly payments of $150.30) and a 16.49% interest rate without Auto Pay (16.49% APR) would result in a total estimated payment amount of $27,054.10.
2.) These examples provide estimates based on interest-only payments while in school. Variable interest rate: A $10,000 loan with a 15-year term (180 monthly payments of $152.84) and a 16.85% interest rate without Auto Pay (16.85% APR) would result in a total estimated payment amount of $35,515.14. For a variable loan, after your starting rate is set, your rate will then vary with the market. Your actual repayment terms may vary. Other repayment options are available. The calculation assumes that the “in-school” period is 4 years (48 months) and includes our 9 month grace period, during which the monthly payment will be $140.42 for 57 months. Fixed interest rate: A $10,000 loan with a 15-year term (180 monthly payments of $150.30) and a 16.49% interest rate without Auto Pay (16.49% APR) would result in a total estimated payment amount of $34,886.94. Your actual repayment terms may vary. Other repayment options are available. The calculation assumes that the “in-school” period is 4 years (48 months) and includes our 9 month grace period, during which the monthly payment will be $137.42 for 57 months.
3.) These examples provide estimates based on fixed $25 payments while in school. Variable interest rate: A $10,000 loan with a 15-year term (180 monthly payments of $253.39) and a 16.85% interest rate without Auto Pay (14.92% APR) would result in a total estimated payment amount of $47,035.20. For a variable loan, after your starting rate is set, your rate will then vary with the market. Fixed interest rate: A $10,000 loan with a 15-year term (180 monthly payments of $246.61) and a 16.49% interest rate without Auto Pay (14.65% APR) would result in a total estimated payment amount of $45,814.80. Your actual repayment terms may vary. Other repayment options are available. The calculation assumes that the “in-school” period is 4 years (48 months) and includes our 9 month grace period, during which the monthly payment will be $25.00.
4.) These examples provide estimates based on deferred payments. Variable interest rate: A $10,000 loan with a 15-year term (180 monthly payments of $275.17) and a 16.85% interest rate without Auto Pay (14.67% APR) would result in a total estimated payment amount of $49,530.60. For a variable loan, after your starting rate is set, your rate will then vary with the market. Fixed interest rate: A $10,000 loan with a 15-year term (180 monthly payments of $268.03) and a 16.49% interest rate without Auto Pay (14.39% APR) would result in a total estimated payment amount of $48,245.40. Your actual repayment terms may vary. Other repayment options are available. It is important to note that the 0.25% Auto Pay discount is not available when the deferred repayment option has been selected and the loan is in the interim period. The calculation assumes that the “in-school” period is 4 years (48 months) and includes our 9 month grace period, during which the monthly payment will be $0.
3. Nine-month grace period is not available for borrowers who choose our Principal and Interest Repayment plan while in school.
4. Earnest clients may skip a payment through a single, one-month forbearance during a 12 month period. Your first request to skip a pay can be made once you’ve made at least 6 months of consecutive on-time full principal and interest payments, and your loan is in good standing. The interest accrued during the skipped month will result in an increase in your remaining minimum payment. The final payoff date on your loan will be extended by the length of the skipped payment periods. Any unpaid accrued interest may capitalize (added to the principal balance) at the end of the forbearance period by adding unpaid accrued interest to the outstanding principal as permitted by law and the terms of the loan agreement. Please note that skipping a payment is not guaranteed and is at Earnest’s discretion. Your monthly payment and total loan cost may increase as a result of postponing your payment and extending your term.
5. Earnest does not charge fees for origination, late payments, returned check, or prepayments. Florida Stamp Tax: For Florida residents, Florida documentary stamp tax is required by law, calculated as $0.35 for each $100 (or portion thereof) of the principal loan amount, the amount of which is provided in the Final Disclosure. Lender will add the stamp tax to the principal loan amount. The full amount will be paid directly to the Florida Department of Revenue. Certificate of Registration No. 78-8016373916-1.
6. Residents of Hawaii must request a loan of at least $1,501.
7. To qualify for automatic cosigner release, the outstanding principal balance of your loan must be paid down to 50% or less of the original principal balance. The primary borrower must have made 36 months of required payments after the end of the Interim Period. The primary borrower must meet our eligibility and minimum credit requirements. Additional terms and conditions may apply. To request cosigner release, the primary borrower must have made 12 consecutive, monthly on-time principal and interest payments (or an amount equal thereto) immediately preceding the cosigner release application. The primary borrower must satisfy certain eligibility and credit criteria at the time of application. Additional terms and conditions may apply.
College Ave’s student loan products are made available through Firstrust Bank, member FDIC, First Citizens Community Bank, member FDIC, or BTG Pactual Bank, N.A., member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
(1) All rates include the auto-pay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. If a payment is returned, you will lose this benefit. Variable rates may increase after consummation.
(2) As certified by your school and less any other financial aid you might receive. Minimum $1,000.
(3) This informational repayment example uses typical loan terms for a freshman borrower who selects the Flat Repayment Option with an 8-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 7.78% fixed Annual Percentage Rate (“APR”): 54 monthly payments of $25 while in school, followed by 96 monthly payments of $176.21 while in the repayment period, for a total amount of payments of $18,266.38. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
Information advertised valid as of 10/2/2025. Variable interest rates may increase after consummation. Approved interest rate will depend on creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of the Flat Repayment Option with the shortest available loan term.
College Ave’s student loan products are made available through Firstrust Bank, member FDIC, First Citizens Community Bank, member FDIC, or BTG Pactual Bank, N.A., member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
(1) All rates include the auto-pay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. If a payment is returned, you will lose this benefit. Variable rates may increase after consummation.
(2) As certified by your school and less any other financial aid you might receive. Minimum $1,000.
(3) This informational repayment example uses typical loan terms for a freshman borrower who selects the Flat Repayment Option with an 8-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 7.78% fixed Annual Percentage Rate (“APR”): 54 monthly payments of $25 while in school, followed by 96 monthly payments of $176.21 while in the repayment period, for a total amount of payments of $18,266.38. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
Information advertised valid as of 10/2/2025. Variable interest rates may increase after consummation. Approved interest rate will depend on creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of the Flat Repayment Option with the shortest available loan term.
You are allowed to refinance as many times as you like, free of cost.
Our goal is to bring simplicity, choice, and transparency to an otherwise inefficient and opaque lending process. We hope this guide helps.
