Best Student Loans and Private Student Loans of December 2023

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There are two main types of student loans: federal student loans — issued by the U.S. Department of Education — and private student loans. Both differ in interest rates, eligibility requirements, loan modification options and forgiveness programs.

Although federal loans offer more flexible repayment terms and borrower protections, a private student loan can help cover your school’s total cost of attendance after you’ve hit the federal borrowing limit and exhausted all other options. We researched available loan options and identified the nine best private student loans for 2023.

Student Loan Forgiveness Update:

The Supreme Court blocked President Biden’s debt relief plan, but there are other routes to get loan forgiveness, and the Biden Administration is exploring other policy options.

The federal student loan payment freeze ended and payments resumed in October.

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Our Top Picks For Best Student Loans

Note: Experts recommend taking out federal student loans before taking on private student loan debt. Jump straight to that section. See how we chose our winners.

Best Private Student Loans:

Best Federal Student Loans:

Best Private Student Loans Reviews

College Ave’s private student loan rates

Undergrad rates — Variable

5.59% – 16.99% with autopay discount

Undergrad rates — Fixed

4.49% – 16.99% with autopay discount

Graduate rates — Variable

5.59% – 14.49% with autopay discount

4.49% – 14.49% with autopay discount

Basic eligibility requirements

To apply for a private student loan with College Ave, student borrowers must:

Be at least 16 years of age Be enrolled in an eligible school in the USA Have a Social Security number Meet the school’s satisfactory academic progress guidelines

Although College Ave doesn’t have a minimum credit score for students with cosigners, the cosigner must have a credit score in the mid-600s. College Ave doesn’t disclose its exact credit requirements, citing that its criteria is proprietary.

Students interested in applying for a private student loan with College Ave can obtain pre-approval with a soft credit check that won’t impact their credit score.

Repayment options and fees

While in school, College Ave offers borrowers several repayment options. Depending on the type of loan you’re applying for, you may be able to choose from the following options:

Interest-only payments Flat $25 monthly payments Deferred payments Full interest and principal payments

You can select a loan term of five, eight, 10 or 15 years for most loans. If you are attending medical school, loan terms can be as long as 20 years.

This online lender doesn’t charge application fees, origination fees or prepayment penalties. Its late payment fee is 5% or $25.

Why we chose College Ave as Best Overall

College Ave ranks as best overall due to its variety of loan options, in-school payment plans and lengthy grace periods for graduate students.

Loan terms as long as 15 years
Nine-month grace periods for graduate students
Borrow up to total cost of attendance
International students must have a valid Social Security number and cosigner that is a U.S. citizen or permanent resident to qualify for a loan
Cosigner releases only available after half the repayment term is completed
International students aren’t eligible for cosigner releases

More on College Ave’s student loan options

College Ave Student Loans offers private loans for students, international students and parents. Borrowers can receive a College Ave loan if they’re enrolled at least part time, as long as they’re registered at a qualifying, degree-granting institution and show satisfactory academic progress.

College Ave finances up to the total cost of attendance and disburses the loan directly to the institution. The lender offers loans for undergraduate, graduate, MBA, medical school, graduate health professions, dental school, law school and career training programs. College Ave also allows borrowers to refinance their loans.

For those experiencing financial hardships, College Ave offers up to 12 months of forbearance for the life of the loan. It’s usually provided in three- or six-month increments, but varies based on your situation.

Finally, College Ave partnered with Payce Rewards, a free service where students earn cash back for online and in-store purchases to help them pay down their education loans. Payce Rewards is linked to around 61,000 stores and restaurants across the United States, including CVS, Walmart and DoorDash.

Read full College Ave student loan review>>

Sallie Mae’s private student loan rates

Undergrad rates — Variable

6.37% – 16.70% with autopay discount

Undergrad rates — Fixed

4.50% – 15.49% with autopay discount

Graduate rates — Variable

6.87%-16.47 with autopay discount

Medical school rates — Variable

6.87%-16.44% with autopay discount

Medical school rates — Fixed

4.99%-14.46% with autopay discount

Basic eligibility requirements

To apply for a private student loan with Sallie Mae, student borrowers must:

Show evidence of academic enrollment status, degree and course of study Be a U.S. citizen, permanent resident or international student with cosigner Include references from two personal contacts other than the cosigner Provide financial information, including bank statements and mortgage or rent payments Provide income and employment information (cosigner or student)

Although Sallie Mae doesn’t disclose its minimum income and credit score requirements online, the average FICO score for approved borrowers was 747 in 2022, and 86% of Sallie Mae’s private loans were cosigned.

Repayment options and fees

Borrowers can choose from the following payment options:

Interest-only payments Flat monthly payments while in school Deferred payments

Eligible borrowers can also utilize Sallie Mae’s Graduated Repayment Period. It allows borrowers to make interest-only payments for a year after the six-month grace period ends.

Sallie Mae’s loan terms range from 10 years to 20 years, depending on the type of loan. Sallie Mae charges a late payment fee of 5% of the amount of the past due payment (up to $25).

Why we chose Sallie Mae as Best for Healthcare Professions

With Sallie Mae, medical school students can borrow up to 100% of the total cost of attendance. Sallie Mae’s medical school loans feature a 36-month grace period, and borrowers can defer payments for up to 48 months during their residency and fellowship.

Grace period of 36 months for medical school students
Offers medical residency and relocation loans
Cosigner releases available after just 12 monthly payments
No information available about credit score requirements
No loan prequalification option
Discontinued parent student program
More on Sallie Mae’s student loan options

Sallie Mae loans has education loan options for undergraduate, graduate, professional and medical school programs. And for borrowers enrolling in trade or certificate programs, you can get loans for school through Sallie Mae’s career training loan program.

Sallie Mae’s loans can cover up to your total cost of attendance, with no borrowing limits.

Its medical school loans have several unique features that make it the standout choice for healthcare students, including multiple repayment options and 12 months of reduced payments after your grace period ends. You can also take advantage of Sallie Mae’s medical residency and relocation loans to borrow up to $30,000 to cover your expenses.

Borrowers can improve their chances of qualifying for a loan — and securing a competitive rate — by adding a cosigner to your loan application. Sallie Mae has the shortest payment period to qualify for a cosigner release; you can apply after making just 12 monthly payments on time.

Students can also get a 0.25% interest rate discount by setting up automatic payments.

Read full Sallie Mae student loan review>>

Earnest’s private student loan rates

Undergrad rates — Variable

5.39%-16.51% with autopay discount

Undergrad rates — Fixed

4.42%-15.90% with autopay discount

Graduate rates — Variable

5.66%-16.51% with autopay discount

4.42%-15.90% with autopay discount

Parent loan rates — Variable

5.39%-16.51% with autopay discount

Parent loan rates — Fixed

4.42%-15.90% with autopay discount

Basic eligibility requirements

To apply for a loan with Earnest:

You must be the age of majority in your state You must be a U.S. citizen or permanent resident You must have a FICO score of 650 or higher You must earn at least $35,000 per year (or have a cosigner) If you’re a parent borrower, first, second and third-year students must be enrolled full-time. College seniors can be enrolled half-time, and graduate students have no enrollment requirement.

Earnest’s loans are not available in Nevada.

Repayment options and fees

Earnest has several options for student and parent borrowers, including:

Interest-only repayment Flat monthly payments Deferred payments Immediate repayment

Borrowers can choose a repayment term of five, seven, 10, 12 or 15 years. Borrowers can also opt for a nine-month grace period before repaying their loans.

Earnest does not charge origination, application or late fees, nor does it charge prepayment penalties.

Why we chose it as Best for Parents

While other lenders have limited repayment options for parents, Earnest has four repayment plans to choose from, and parents can take advantage of a longer-than-usual grace period.

No loan maximum
Four repayment options for parent borrowers
Lengthy grace period
$100 rate match guarantee
For parent loans, first-, second- and third-year students must be enrolled full-time
Student must pursue a bachelor’s or graduate degree
Loans not available to residents of Nevada

More on Earnest’s student loan options

Earnest is a lender of undergraduate, graduate and parent student loans. Parent borrowers can borrow up to their child’s cost of attendance. And parents can choose to take advantage of a nine-month grace period, giving them more time after their child graduates before full interest and principal payments are due.

Earnest also has a skip-a-payment feature. All borrowers can skip one payment once per year without penalty or negative effect on their credit. And Earnest offers a rate match guarantee; if you’re approved for a loan with another lender that has a better rate, Earnest will give you a $100 Amazon gift card.

Earnest’s rates for parent student loans are quite low, and you may qualify for an even lower rate by signing up for automatic payments; the discount will reduce your rate by 0.25%. This discount is not available while loan payments are deferred.

Earnest’s loans are only eligible for degree-granting programs, and it doesn’t issue loans to residents of Nevada.

SoFi’s private student loan rates

Undergrad rates — Variable

5.49%–13.97% with autopay discount

Undergrad rates — Fixed

4.44%-14.70% with autopay discount

Graduate rates — Variable

5.99%-13.97% with autopay discount

4.99%–14.48% with autopay discount

Basic eligibility requirements

To apply for a private education loan with SoFi, student borrowers must:

Be U.S. citizen, permanent resident or non-permanent resident alien Permanent residents and non-permanent resident aliens must show their permanent residency card or DACA or asylum documents Be employed or have a cosigner Be enrolled at least half time in a four-year, degree-granting program Have reached the age of majority in their state of residence Use the loan for higher education expenses at an eligible institution Attend a four-year school

SoFi doesn’t disclose its minimum credit score. But according to SoFi’s 2022 annual report, the average credit score for approved borrowers was 773.

Repayment options and fees

SoFi offers flexible repayment options for all student loan borrowers while in school, including options for full principal and interest payments, interest-only payments or a $25 flat monthly payment. Borrowers can also choose a deferment option to delay paying their loans until six months after graduation.

SoFi offers four different loan terms: five years, seven years, 10 years and 15 years.

Along with no late fees, SoFi also does not charge application, origination or prepayment fees.

Why we chose SoFi as Best for No Fees and Discounts

SoFi is our choice for the best student loan lender for no fees and discounts because of its rate discounts, membership benefits and the lack of origination or late fees.

No late or insufficient fund fees

Autopay discount and multiple loan discounts
Cosigner releases after 24 months
Extra member benefits
Only students attending four-year schools are eligible for loans
High credit score required
International students are not eligible for loans

More on MPower’s student loan options

MPower offers private student loans and student loan refinancing to international students, Deferred Action for Childhood Arrivals (DACA) students, U.S. citizens, refugees and asylum-seekers. It partners with over 400 colleges and universities in North America to provide funding to students.

Students can finance up to 100% of their education expenses — up to a lifetime maximum of $100,000 — and through MPower’s partnership with Zolve, all approved MPower borrowers are prequalified for a U.S. credit card and bank account, helping students build their U.S. credit history.

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Federal Student Loans

Federal student loans are backed by the U.S. Department of Education and offer exclusive benefits and repayment options that are not available with private student loans. Experts recommend you always exhaust federal student loans before turning to private lenders.

Today, all of these loans are issued under the federal Direct Loan program. Unlike private loans, most federal loans don’t require credit checks, so you can qualify even if you have bad credit.

There are three main types of federal student loans available to students and parents of students:

Direct Subsidized Loan: For undergraduate students with financial need. The Education Department pays the interest while the student is in school at least half-time, during the grace period after leaving school, and during deferment. Direct Unsubsidized Loan: For undergraduate, graduate and professional students regardless of financial need. Students are responsible for paying interest at all periods. Direct PLUS Loans: For graduate and professional students and parents of undergraduate students. Unlike other federal loans, PLUS loans require basic credit checks. Borrowers with adverse credit histories may need to meet additional requirements, such as adding an endorser to their applications and completing PLUS loan credit counseling. Benefits of federal student loans
No credit checks for most federal loans No minimum income requirement Lower interest rates for undergraduate loans Subsidized interest payments on some loans Financial hardship forbearance available 6-month grace period after graduation for most loans Access to income-driven repayment plans Possibility of loan forgiveness

Student Loans Guide

In this guide, we outline what students and their families need to know to easily navigate the student loan application process.

How do student loans work?

Student loans are issued by the federal government or private lenders to help students pay for undergraduate or graduate studies. The loan goes toward tuition, books, student housing and other education-related expenses.

Once a student loan application is approved, the funds are sent directly to the school to cover tuition, fees and on-campus student housing. The remaining balance is disbursed to the student.

Private loans accrue interest from the start of the loan, while some federal loans have more flexible terms. Repayment options include deferment, interest-only, or full payment.

Types of student loans

Since private loans don’t offer the same protections that federal loans do, the general advice is to seek private student loans after you’ve exhausted every federal option.

Federal student loans

Federal student loans are the first choice for many due to their low rates, flexible repayment options and federal protections.

The U.S. Department of Education offers the following loan options:

Direct Subsidized Direct Unsubsidized for Undergraduate and graduate students Parent PLUS Grad PLUS

To apply for federal loans and additional financial aid, students must submit the Free Application for Federal Student Aid (FAFSA) once every school year. Your school will calculate how much you’re eligible to borrow based on the cost of attendance and your family’s financial information.

The federal government limits how much a student can borrow annually and over their lifetime based on the academic year, loan type and the borrowers’ dependency status.

Income-driven loan repayment plan options

Opportunities for student loan forgiveness

Low interest rates

Eligible for forbearance if experiencing a financial hardship

No credit checks for most loans

Disbursement fees apply

Federal loans aren’t subject to statutes of limitations

Only available to U.S. citizens and permanent residents with Social Security numbers

Strict annual and aggregate limits

Private student loans

Private student loans are similar to personal loans, as they are issued by private banks or credit unions.

Private student loan lenders look at students’ credit scores and credit reports to determine interest rates and loan approval. Since most students don’t have enough credit history, lenders often require a qualifying cosigner.

Private loans don’t feature the same benefits as federal student loans, but they can help pay your school’s total cost of attendance if you’re no longer eligible for federal aid. Most schools will have a list of recommended lenders they partner with.

You will receive any remaining balance from the loan directly from the school after covering tuition, fees and student housing.

Most private lenders suggest borrowers start loan repayment while still in school, but most offer in-school deferment or grace periods, although interest will continue to accrue.

Available to U.S. citizens and qualifying international studentsNo financial need requirementsFixed and variable ratesHigher loan limits for undergraduate loansNot eligible for federal forgiveness programsLimited repayment options and hardship assistance programsRequires credit checkMay have higher APRsWill likely require a cosigner

Student loan interest rates

Current private student loan interest rates range from 4.43% to 16.99%. The interest rate on your loans depends on the type of loans you have, your education level and the lender issuing the loan.

Rates can be fixed or variable. Fixed interest rates stay the same for the entire repayment period. By contrast, variable interest rates can change over time, so they are usually best for borrowers who want a shorter repayment term.

Average student loan interest rate

Federal student loans

Interest rates on federal student loans are established by federal law. The rates are fixed, so they stay the same for the duration of your loan term.

For federal student loans, we calculated the average interest rate using data from the past 10 years. The overall average interest rate for federal student loans was 5.65%.

The rates you’ll pay depend on the loan and borrower type. These are the rates for loans issued for 2023-2024:

Undergraduate loans will now carry a rate of 5.50%, up from 4.99% last year. Graduate student direct loans will have a 7.05% interest rate, up from 6.54% last year. PLUS loans for both parents and graduate students will carry a rate of 8.05%, up from 7.54%

Undergraduate: 5.50% Graduate: 7.05% for Direct Unsubsidized | 8.05% for Grad PLUS Parent: 8.05%

Private student loans

Private student loans work differently. Lenders set their rate range based on an index, such as the Secured Overnight Financing Rate (SOFR). The rates can change over time as the market fluctuates, so you may find that current rates are higher or lower than when you took out your loan.

Other factors affect your private loan rates, including your credit history, income, debt-to-income ratio and whether you have a cosigner.

For private student loans, we looked at available interest rates from 15 leading lenders. We calculated that the overall average interest rate for private student loans was 9.88%.

How to calculate student loan interest

To calculate your interest:

Divide your annual percentage rate (APR) by 365 to get your daily interest rate Multiply the daily interest rate by the remaining loan principal to find your daily interest accrual Multiply the daily interest accrual by the number of days in your loan billing cycle

For example, let’s say you have $20,000 at 6.00% APR:

Divide 6.00% (APR) by 365 (number of days in a year)=0.0001643 (Your daily interest rate) Multiply 0.0001643 (daily interest rate) by $20,000=3.286 (daily interest accrual) Multiply 3.286 (daily interest accrual) by 30 (days in billing cycle)=$98.58

The resulting $98.58 is how much you’ll pay in interest during the first month of repayment.

You can use the Federal Student Aid Simulator to calculate your interest and overall repayment.

Student loan terms

Federal student loan terms are set by law, while the lender determines private student loan repayment plans. When shopping for private student loans, borrowers should compare repayment options to see which lender allows more flexibility.

Federal student loan terms

For federal student loans, the government offers multiple repayment plans that can be grouped as follows:

Repayment plan Monthly payment Repayment period How it works Eligible loans Standard repayment plan Fixed monthly payments of at least $50 Up to 10 years (between 10 and 30 for consolidation loans) Payments are spread out in equal installments over the loan term • Direct Subsidized/Unsubsidized
• Direct PLUS
• Direct Consolidation
• Subsidized/Unsubsidized Stafford
• FFEL PLUS/FFEL Consolidation Income-
Based Repayment 10% of your discretionary income if you are a new borrower as of July 1, 2014 20 years Payments recalculated annually based on your discretionary income Direct Subsidized
Direct Unsubsidized
Grad PLUS Income-
Contingent Repayment Lesser of 20% of your discretionary income or payments under a 12-year plan 25 years Payments recalculated annually based on your discretionary income Direct Unsubsidized
Grad PLUS
Parent PLUS loans if they’re consolidated with a Direct Consolidation Loan Pay As You Earn 10% of your discretionary income, but never more than you’d pay under a Standard Repayment Plan 20 years Payments recalculated annually based on your discretionary income Direct Subsidized
Direct Unsubsidized
Grad PLUS Saving on a Valuable Education 5% to 10% of your discretionary income 10 to 20 years for undergraduate loans
10 to 25 years for graduate loans Payments recalculated based on your discretionary income Direct Subsidized
Direct Unsubsidized
Grad PLUS
Direct Consolidation Loans (not including any parent loans) Graduated repayment plan Payments increase every two years Up to 10 years (between 10 and 30 for consolidation loans) Monthly payments gradually increase over time Same as standard repayment Extended repayment plan A fixed or graduated amount Up to 25 years Allows you to make a lower payment for a longer period Same as standard repayment Income
-sensitive repayment Based on annual income 10 years Fluctuate based on income FFEL Loans
Private student loan terms

While in school, most private lenders will allow you to:

Defer loan and interest payments until after you graduate Make fixed monthly payments towards interest and principal Pay a moderate monthly payment towards accrued interest only

Once you’re out of school, the repayment plans are standard “balance-based” ones, meaning your monthly payment is based on how much you owe plus interest; and you pay an equal amount each month over a period of five to 15 years.

Lenders also may offer grace periods and forbearance to students who cannot make their monthly payments. However, the student loan interest rates will continue to accrue, increasing their student debt.

How to apply for student loans

The following are general tips to consider before applying for student loans, whether federal or private.

1. Calculate your financial needs

Consider your school’s cost of attendance (tuition, materials, room and board, etc.) and then factor in additional living expenses. Money’s Best Colleges in America 2023 contains information about admission, costs, financial aid and graduation rates of hundreds of public and private institutions around the United States.

If you’re considering private loans, take the time to evaluate your creditworthiness and whether you will need a cosigner.

Private lenders base interest rates on your credit score, income and employment history. If you have a cosigner, lenders will also consider their credit for approval.

If you need to improve your credit before applying for a private student loan, start with our credit repair guide or check out our best credit repair companies if you don’t want to DIY it.

2. Look into federal loans

We recommend you consider federal loans first, as they have several advantages over private loans and a variety of options to choose from.

If you need to take out a private student loan, keep in mind that each lender offers different terms, rates and benefits.

Shop around and compare fees and APRs from multiple lenders before making a decision.

3. Seek expert help

Read expert advice from sources like the Consumer Financial Protection Bureau and College Board before you apply for private student loans. Other options may be available to you, such as grants and scholarships.

If you are a graduate school student or parent looking into private student loans, it could also be worth paying a financial planner to help you weigh the costs and benefits. Search for a fee-only planner who has experience helping clients plan for college or pay down student debt.

4. Choose the right lender for you

To choose the best student loan, you should have a clear understanding of what each lender requires and what they offer regarding interest rates and repayment options:

Check your lender’s credentials: Only do business with reputable lenders. To determine this, use reputable sources like Federal Deposit Insurance Corporation (FDIC), Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB). Apply for prequalification: By prequalifying, you get to see what rates, terms and benefits each lender offers, while avoiding a hard credit inquiry. Be sure to understand how different interest rates and terms affect your payments. Look for lenders with in-school repayment options: Starting loan repayment early will reduce the debt burden. Opt for private lenders with multiple options, a grace period, and no penalties for early loan repayment. Opt for lenders with low or no fees: Application and origination fees are processing costs added to your principal, which means you’ll pay interest on them. All federal loans have origination fees; private loans typically do not. Note that student loan companies are legally prohibited from charging prepayment penalties. If you can, look for lenders that don’t charge late fees either. Take advantage of discounts and perks: Many lenders offer autopay discounts and other perks such as free study or tutoring programs and bonuses for good grades or referring friends. Check what documents you need to apply

The application process for federal student loans starts by filling out the Free Application for Federal Student Aid (FAFSA). To do so, you will need:

Social Security Number or Alien Registration Number Tax returns and income employment information If applicable, bank statements, investment records or evidence of untaxed income

To apply for private student loans you will need:

Social Security number Tax returns and income employment information Rent or mortgage docs Financial information from your cosigner Application submitted no later than a month before tuition is due
How to pay off your student loans

Paying off student loans isn’t easy. Americans owe a total of $1.7 trillion in student debt, a burden that can delay home ownership, starting a family and even retiring.

Ill-informed recommendations for paying off student loans include credit card balance transfers or filing for bankruptcy, but these can worsen your financial situation.

Some college students may be counting on student loan forgiveness to settle their debts. But this is only a viable option for federal student loans, and even then, it’s not a guarantee. The existing federal student loan programs can take 10 to 25 years to complete, and they’re not available to all borrowers.

With this in mind, we have outlined some of the best practices to help you stay on top of your student loan debt:

Start repayment while you’re still in school

Private student loans begin accruing interest while you’re still in school. To keep accrued interest down, begin repayment as early as possible. You can save thousands of dollars over the life of the loan by keeping up with interest payments while you finish your degree.

Take advantage of loan forgiveness programs

President Joe Biden’s student loan forgiveness plan was blocked by the U.S. Supreme Court at the end of June. While mass cancellation is off the table for now, the administration is pursuing another path to provide debt relief to low- and middle-income borrowers through a regulatory process known as negotiated rulemaking. Details about this latest plan are limited, but it will take longer to pursue, the president said.

However, you may be eligible for an existing federal loan forgiveness program.

Federal loans can be forgiven through Public Service Loan Forgiveness, a program that helps borrowers who work in traditionally lower-paying positions at government agencies, schools and non-profit organizations. Borrowers working in an eligible job can have their debts forgiven after 10 years of payments.

If you don’t work in public service but you also don’t earn enough to pay off your loans, you may be able to benefit from an income-driven repayment plan. These plans tie your monthly payments to how much you earn, and after a certain number of years, any outstanding debt is forgiven.

With existing income-driven repayment plans, borrowers can qualify for loan forgiveness after 20 or 25 years. But President Biden’s new SAVE repayment plan would allow some borrowers to qualify for forgiveness in as little as 10 years.

Finally, even if you don’t qualify for full loan forgiveness, be sure to check for other forgiveness programs. Some states, for example, have programs aimed at recruiting health care workers or teachers to underserved areas.

Create a budget

Budgets help track your spending habits and organize your finances. You may identify areas where you can cut back on spending to be able to make more payments toward your student loan debt.

Look for a job with loan repayment as a benefit

You may be able to get hired at a company that helps employees pay off their loans, or you could encourage your current employer to add loan repayment to its benefits program. Approximately 25% of employers offer some kind of student loan assistance program, according to the Employee Benefit Research Institute.

Consider refinancing and debt consolidation

Student loan refinance can be a good option if you already have private loans, but it’s not always a smart move for those with federal loans. Learn more through our article on how to refinance your student loans and our list of best student loan refinance companies.

Pay more than the minimum toward your principal

Calculate the maximum you can afford to pay each month toward your principal loan amount. If you can pay more than what you owe each month, that’s the best way to pay off your loans quicker. When you pay extra, the additional money goes directly to reducing your principal debt.

Consider the debt snowball or debt avalanche methods

Two of the most popular strategies to minimize debt are the snowball and avalanche methods.

Debt snowball Debt avalanche Pay more toward your smallest debt and make minimum payments toward the rest. This can keep you motivated by helping you get rid of smaller debts quickly. Tackle debt with a higher interest rate first until completely paid off. This can help you save on interest payments and keep your debt from ballooning further.

Latest Student Loans News

The student loan payment pause ended, and payments resumed in October. However, the White House announced it will ease borrowers into repayment with an “on ramp” to payments restarting: through September 30, 2024, borrowers who miss a monthly payment will not be considered delinquent or reported to credit bureaus, though their loans will accrue interest.

Best Student Loans FAQ

When do federal student loan payments resume?

The federal payment freeze comes to an end this fall. Interest begins accruing on Sept. 1, and payments will resume in October.

How do student loans work?

Student loans are a financing option available to students and parents who are unable to cover education expenses out of pocket. There are two main types of student loans: federal and private.

Federal student loans are issued by the U.S. Department of Education. They tend to feature competitive rates and better repayment terms and protections. These are still loans, however, and they must be paid back with interest.

Private student loans are issued by private lenders. These types of loans don’t offer the same protections as federal student loans, but they are an alternative for those who have taken the maximum federal student loan amount and still need help to fund their education.

Once you take out a student loan, interest will begin to accrue. For this reason, it’s a good idea to start making payments toward your loans while you’re still in school. Moreover, while you don’t have to pay back your federal student loans while in school, some private lenders may require it.

What happens to student loans when you die?

It depends on the type of loans you have. With federal student loans, the loan is discharged if the student borrower dies. For federal parent loans, the loan can be discharged if the student the loan was used for dies. If both parents die, the loan is discharged, but if only one parent borrower dies, the other is still responsible for the loan’s repayment.

For private loans, policies vary by lender, so the borrower’s estate may have to repay the loan after the borrower’s death. Some private lenders will discharge loans in cases of death or total and permanent disability, but it’s not a universal policy.

What happens if you don’t pay student loans?

If you cannot make your student loan payments on time, call your lender to see what your options are. Many private lenders offer protection programs, like the Unemployment Protection Program from SoFi, which allows your loans to be in forbearance for up to 12 months.

If you cannot make your payments and fall behind on your loans, your credit score and history will be affected. And if you have federal loans, the government can still take that money from you through a process called garnishment. The government can take money from your tax return, paycheck and even from your Social Security payments when you retire. Check our section on how to pay off your student loans for more information about payment options and other changes related to the coronavirus pandemic.

What is the best private student loan lender?

Based on our research, we selected College Ave as the best overall. Other lenders may be a better fit for your individual situation, but in general, College Ave offers competitive interest rates, several loan types and multiple repayment options. See all of our top lenders above.

How We Chose The Best Student Loans

To choose the best student loans of the year, we looked at both federal and private student loan options, outlining the benefits and drawbacks of each.

Our reviews, however, are focused on private student loan lenders. Private student loans don’t offer the same benefits and protections you would have through federal student loans.

For this reason, we prioritized private lenders that offered the following:

Flexible repayment options

Federal student loans have several different standardized payment plan models, whereas private lenders often offer less flexibility. We looked for lenders that offered deferred payment options, forbearance plans and interest-only loans while still in school.

Low or no processing fees

Possible costs for private loans include late fees or insufficient fund fees. When we looked at the industry, we looked for lenders that waived these or offered reduced fees and had discounts available.

Competitive interest rates

We preferred lenders that offered rates that were in line with the industry average or better. For December 2023, we looked for lenders with rates of 9.88% or better.

Students and parents should compare offers from multiple lenders to ensure they get the lowest rates. With this in mind, we also included student loan marketplaces that allow borrowers to compare loan offers from multiple lenders in one place.

Summary of Money’s Best Student Loans 2023

Original: Money.com: Best Student Loans and Private Student Loans of December 2023

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