Best Banks That Offer Student Loans for October 2025

by Alex Hillsberg , MA

Student Finance & Loan Expert

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College education is not cheap, as the cost of attendance in many schools can exhaust students' resources. This is why 87.3% of postsecondary students rely on financial aid to reduce costs. There are many ways for students and their families to obtain the funds they need to afford college tuition, and one of them is to transact with banks that offer student loans. 

As a seasoned career planner, I prepared a guide on student loans offered by banks that covers standard interest rates, average student loan debt, and the benefits of obtaining student loans. The article also features some of the best banks that offer student loans, as well as their terms. 

Key Things You Should Know About Student Loans from Banks

• Students at public institutions typically borrow $32,637 to complete a bachelor's degree.
• The average federal student loan debt is $37,088 while the average private student loan debt is $54,921.
• The total debt from federal student loans in the United States has reached $1.75 trillion, representing a 1.31% decrease, year over year.
• On average, students pay about $503 monthly to reduce their loan debt.
• The average student loan interest rate among all US borrowers is 6.87%.
• 94.81% of all student loan debt is from federal loans, while 5.19% is from private loans.

Table of Contents

1. 2025 Best Banks that Offer Student Loans
2. What are the general eligibility criteria for student loans from top banks?
3. How do you apply for a student loan from top banks?
4. What is the average interest rate of student loans?
5. How do student loan interest rates work?
6. What are the benefits of getting student bank loans?
7. How do bank student loans compare to federal student loans?
8. What is the average student loan debt?
9. How many people have student loan debt?
10. How does one pick the best student loan?
11. Are there risks associated with bank student loans?
12. What are the best ways to pay student loans?
13. Should investing in further certifications enhance your loan repayment strategy?
14. Does your college major affect your student loan repayment strategy?
15. What are the alternatives to bank student loans?
16. Are summer classes a viable strategy for managing student loan costs?
17. Can student loans be used to cover essential living expenses like rent?
18. Can online education options lower your overall student debt?
19. How important is building credit for student loan success?
20. How to Refinance Student Loans for Better Terms
21. Are there any tax benefits for student loan borrowers?
22. Could an accelerated associate's degree help reduce your student loan burden?
23. Does choosing a high ROI degree enhance student loan repayment prospects?
24. Other Things You Should Know About Banks That Offer Student Loans

2025 Best Banks that Offer Student Loans

1. Citizens Bank

Citizens Bank offers private student loans and refinancing options nationwide, with specific terms depending on the borrower's location. For refinancing, Citizens is ideal for those with large loan balances, existing customers, or those without a degree. They provide a variety of loan terms and high maximum balances, with interest rates starting at 4.39% for fixed rates and 5.97% for variable rates.

Private student loans from Citizens cater to professional students and parents who can qualify for substantial loans, offering loan amounts from $1,000 up to $350,000, with no application or prepayment fees. They also feature benefits like a 0.25% discount for autopay and loyalty discounts for existing customers.

• Interest rates: Fixed (4.39% - 15.45%) or variable (5.99% - 16.48%)
• Minimum credit score: 720
• Minimum income: No information available
• Loan amount: $1,000 to $150,000 for undergraduate and graduate degrees; $250,000 for law and MBA degrees; $180,000 or $350,000 for healthcare degrees, depending on the degree type
• Loan terms: 5, 10, or 15 years (student loans); 5 or 10 years (parent loans)
• Cosigner release: 36 months
• Eligibility: Requires U.S. citizenship or permanent residency, at least half-time enrollment in a qualifying program, and institutional participation. International students can explore options with a U.S. cosigner.

2. Sallie Mae

Sallie Mae offers private student loans for undergraduate and graduate students, with flexible repayment options and competitive interest rates. They cater to students enrolled less than half-time, allow interest-only payments during grace periods, and require only one application per academic year.

Despite lacking refinancing options, Sallie Mae offers unique features like loans for part-time students and the ability to apply once annually for funds covering the entire academic year, which can be instrumental for many learners. Repayment durations of 10 to 20 years are available for loans of up to 100% of the cost of attendance, as certified by the school. 

• Interest rates: Fixed (4.50% - 15.49%) or variable (5.37% - 15.70%)
• Minimum credit score: No information available
• Minimum Income: No information available
• Loan Amount: $1,000 to Full Cost of Attendance
• Term: 10 to 15 years for the Smart Option Student Loan; 15 years for loans for graduate school, law school, and MBA degrees; 20 years for loans for medical school
• Cosigner release: 12 months
• Eligibility: Students must be enrolled in an eligible program and have U.S. citizenship or permanent residency. Non-citizens can apply with a cosigner who is a U.S. citizen or permanent resident.

Here's What Students Have to Say About Their Bank Loans

"Thanks to my bank's student loan program, I wasn't limited by scholarship availability when choosing a college. They offered flexible loan options that covered all my expenses. Now, with graduation on the horizon, I'm confident I can start my dream career without a mountain of debt. My bank's support gave me the freedom to chase my goals." - Steve

"I was able to pursue my passion for engineering without worrying about the financial burden. With a bank loan, I could focus on my studies and extracurricular activities, knowing that my education was secure. It was a huge relief to have the financial support I needed to achieve my goals." - Katie

"Balancing school and part-time work wasn't easy, but my bank's income-driven repayment plan took a huge weight off my shoulders. The payments adjusted automatically based on my income, allowing me to focus on my studies without the constant worry of defaulting. My bank truly partnered with me to achieve my educational goals." - Sophia

What are the general eligibility criteria for student loans from top banks?

In my research, I disovered that most banks and lenders consider these common factors  when determining students' eligibility for loans:

• Enrollment: Be enrolled at least half-time in a degree program at an accredited institution approved by the lender. This applies even to graduate students wondering how to pay for MBA degrees.
• Creditworthiness: A minimum credit score (often 650+) and a good credit history are usually required. Some lenders may consider cosigners for students with limited credit history. According to reports, cosigners for student loans typically have a credit score of at least 700.
• Cosigners: Many undergraduate students need a cosigner with a strong credit history and sufficient income to qualify. Some lenders offer cosigner release after consistent on-time payments.
• Income: The borrower or cosigner may need to meet minimum income requirements and have a reasonable debt-to-income ratio to show repayment ability.
• Citizenship: Most lenders require U.S. citizenship or permanent residency for the borrower or cosigner. Some may offer loans to international students with a qualified U.S. cosigner.
• Academic Progress: Maintaining satisfactory academic progress (e.g., minimum GPA) may be required.

Private loans from banks and lenders are a significant source of funding for college students. 2023 data indicates that 10% of students from public and private nonprofit four-year institutions graduated with an average private debt level of $38,300 per borrower.

How do you apply for a student loan from top banks?

Getting a student loan from top banks involves research, preparation, and navigating the application process. Here's how to be ready:

1. Compare loan options, Explore lenders like Sallie Mae or Citizens Bank to find the best interest rates, repayment terms, and benefits for your situation.
2. Check eligibility criteria. Each lender has requirements like credit score and enrollment status. Ensure you meet them before applying.
3. Gather the required documents. Prepare documents like your Social Security number, financial information (including a cosigner's if needed), and school details.
4. Fill out the online application form. Find the student loan section and initiate the online application. Fill out all fields carefully. Mistakes can delay or deny your application.
5. Provide cosigner information. If your credit is limited, a cosigner with good credit can improve your approval chances and potentially secure better loan terms. Understand that your cosigner is legally responsible for repayment if you default.
6. Review and submit your application. Double-check your application before submitting. Most lenders allow you to save and return later.
7. Pay the application fee. Be prepared for a possible non-refundable application fee.
8. Allow for a processing period. Allow a few days to weeks for processing. Lenders will review your application and credit. Respond promptly to any requests for additional information.
9. Study the loan offer. Once you receive the loan offer, carefully assess the interest rate, repayment term, and fees. Understand the total loan cost and monthly payment amount.
10. Accept the loan offer. If you agree to the loan terms, you can sign the loan agreement. In most cases, you can sign the document electronically.

Once you've returned the signed loan offer to the bank or lender, all you have to do is wait for the disbursement of the funds. Funds typically go directly to your school for tuition and fees. Any remaining amount will be provided to you. Confirm receipt with your school's financial aid office.

What is the average interest rate of student loans?

For private student loans, the average interest rate is between 4.5% and 16.99%. Meanwhile, according to 2024 data from the Education Data Initiative, the average student loan interest rate among all US borrowers is 6.87%.

With new federal loans from undergraduate students, the average interest rate is 5.50%, while federal loans from graduate and professional students typically have an interest rate of 7.05%. Meanwhile, the average interest rate for federal PLUS loans catered to parents, professional students, and graduate students is 8.05%

Between the academic years 2022-2023 and 2023-2024, the interest on federal student loans grew by an average of 8.02%. 

Interestingly, if every eligible individual refinanced their loans, the US average interest rate would probably slide to 4.2%. 

How do student loan interest rates work?

Student loan interest rates function as a cost levied by the lender on the outstanding principal balance of the loan. These rates are expressed as annual percentages, and they determine the amount of additional money a borrower must repay on top of the original loan amount.

To further understand how they function, here are some key points a student should know: 

• Interest Rate Percentage. This fixed number, shown as a percentage, is applied to the borrower's loan balance. For example, a 5% interest rate on a $10,000 loan for an undergraduate degree means $500 in interest will be added per year (before any principal repayment). 
• Accrual. Interest builds up over time, usually daily. This ongoing process adds the accumulated interest to the loan balance, increasing the total amount owed.
• Capitalization. For certain loans, like unsubsidized federal or private loans, unpaid interest might be added to the principal balance. This process, called capitalization, increases the total repayment amount since future interest is calculated on a larger principal. 
• Repayment. Monthly loan payments usually go towards accrued interest first, then the principal. At the beginning of repayment, more of the payment covers interest. Over time, more goes towards reducing the principal balance. 
• Variable vs. Fixed Rates. Federal student loans usually have fixed interest rates, staying the same throughout the loan's life. Private student loans might have variable interest rates, which can change based on market conditions. This means the initial interest rate can change over time, affecting the borrower's monthly payments.

What are the benefits of getting student bank loans?

Banks have systems in place that promote convenience and security for their clients, and this extends to students who need financial support. As such, obtaining deals from banks that offer student loans comes with several advantages:

• Competitive Rates. Banks often strive to be competitive with interest rates on federal student loans. It pays to compare rates offered by a bank with those available through the Department of Education directly.
• Potential Perks. Some banks might offer additional benefits for student loan borrowers, such as:
  • Sign-up bonuses. Cash incentives for opening a student loan account. 
  • Loyalty rewards. Earning points or cashback on student loan payments that can be redeemed for various rewards. 
  • Financial literacy resources. Educational tools and workshops to help students manage their finances effectively. 
• Streamlined Repayment. If a student has both federal and private student loans from the same bank, it can simplify managing their repayments with a single monthly payment and online portal.

How do bank student loans compare to federal student loans?

Both bank student loans and federal student loans are common options for students to finance their education, but there are significant differences between the two:

• Interest rates: Federal student loans typically have fixed interest rates set by the government. These rates are usually lower compared to private loans. Meanwhile, interest rates on bank student loans can be either fixed or variable. Variable rates may start lower but can increase over time.
• Credit check: Most federal student loans do not require a credit check, except for Direct PLUS Loans, which require a modest credit check. Private student loans typically require a credit check. Interest rates and approval are often based on creditworthiness. Students with no credit history may need a cosigner.
• Repayment: Federal loans offer various income-driven repayment plans, which can adjust your monthly payments based on your income. Private loans may offer fewer repayment options compared to federal loans. They may not offer income-driven repayment plans.
• Deferment and forbearance options: Federal loans offer options for deferment and forbearance if you experience financial hardship. Private loans may not offer the same flexibility in terms of deferment, forbearance, or loan forgiveness options.
• Cosigner requirements: Federal student loans do not require a cosigner. Meanwhile, Many students need a cosigner, often a parent or guardian, with good credit history to qualify for private student loans, especially undergraduates.

Federal loans are generally the better first option due to lower interest rates, flexible repayment plans, and borrower protections. I advise students, especially those enrolled in Title IV schools, to exhaust all federal loan options before exploring private loans.

What is the average student loan debt?

Based on 2024 data, the average federal student loan debt sits at $37,088 while the average private student loan debt is $54,921. The average federal student loan debt varies per educational level, as seen in the following figures: 

• Associate Degree: $19,270
• Bachelor's Degree: $26,190
• Master's Degree: $83,651
• Doctorate Degree: $134,797

The total debt from federal student loans in the United States has reached $1.75 trillion, representing a 1.31% decrease, year over year. The outstanding balance for federal student loans is $1.602 trillion. 

Average student loan payment

On average, students pay about $503 monthly to reduce their loan debt. I advise them to come up with smart payment plans and leverage other forms of financial aid. This is because 42% of the total cost paid originates from generated interest. 

The average payments vary by education level. 

• Associate Degree: $436
• Bachelor's Degree: $621
• Master's Degree: $720
• Doctorate Degree: $903
• Professional Degree: $901

How many people have student loan debt?

According to 2024 data, 43.2 million individuals have student loan debt, which means the total number of borrowers possibly exceeds this amount. In terms of loan debt classification, 94.81% of all student loan debt is from federal loans, while 5.19% is from private loans.

Far more students obtain federal student loans since they are more inclusive, have lower interest, offer more flexible options for repayment, provide a subsidized option, and afford access to loan forgiveness programs. 

For instance, when dealing with educational costs, students can shave off some of the expenses by obtaining free federal aid and checking their federal loan options before entertaining private loans. 

How does one pick the best student loan?

Picking the most suitable loan is based on students' exact financial needs and the types of loans available to them. 

As such, I have prepared a step-by-step process through which learners can identify the loans that are most beneficial to them. 

• Assess Financial Needs. How much has college tuition increased? The student should determine the total amount needed to cover educational expenses such as tuition, books, housing, and other costs. They should subtract any scholarships, grants, or personal savings to understand their borrowing requirements. 
• Start with Federal Loans. Federal student loans generally offer better terms than private loans. The student should complete the FAFSA application to identify eligibility for federal aid. Once done, they can select from the different types of federal loans on offer. 
• Compare Interest Rates. The student should compare fixed and variable interest rates. Federal loans have fixed rates that remain constant throughout the loan term, providing predictable payments. Private loans might offer variable rates, which can start lower but may increase over time. 
• Evaluate Repayment Options. Federal loans offer flexible repayment plans, including income-driven repayment plans that adjust payments based on the student’s income and family size. Private loans may have less flexible repayment options, so it’s important to compare these carefully. 
• Check for Additional Costs. Aside from finding out how much does a bachelor's degree cost, students should look out for any additional costs, such as origination fees, late fees, and prepayment penalties. Federal loans typically have fewer fees than private loans. 
• Consider Cosigner Requirements. Private loans often require a cosigner, especially for students without an established credit history. The student should ensure their co-signer has good credit and is willing to share the responsibility. 
• Research Lenders and Read Reviews. If considering private loans, the student should research various lenders, read reviews, and check the lender’s customer service reputation. Loan comparison tools can help evaluate different lenders side by side. Students must also find out the maximum amounts lenders can offer vs. their expected college expenditures, like the average cost of community college.
• Understand Terms and Conditions. It is crucial for the student to read all the fine print in the loan agreement. They should understand the interest rates, repayment schedules, deferment options, and penalties for late payments. 
• Seek Advice. The student should consult their school’s financial aid office for guidance. Financial aid advisors can help them understand their options and might suggest additional resources or scholarships. 
• Plan for Future Repayments. The student should consider their post-graduation income prospects and how they align with potential loan repayment obligations. Choosing a loan with manageable monthly payments based on expected earnings is essential.

It also helps if students are pursuing degrees that pay well since their eventual salaries will be sufficient to comfortably cover the loan payments. 

Are there risks associated with bank student loans?

Bank student loans can present challenges such as variable interest rate fluctuations, hidden fees, and prepayment penalties. Evaluating loan agreements for complex terms and restrictive conditions is essential to avoid unforeseen long-term costs. Borrowers should conduct comparative analyses and review industry comparisons like Discover student loans to make informed decisions. Meticulous scrutiny of documentation and consultation with financial experts further mitigates risk while ensuring that chosen loan products align with individual financial plans.

What are the best ways to pay student loans?

Like figuring out what is the best way to save for college, making an effective payment plan for student loans can be challenging. Dealing with student loans involves a combination of strategies to bring down the outstanding balance, which includes finding multiple revenue streams, leveraging loan consolidation, and exceeding minimum payments. 

The strategies one can apply include the following: 

• Target High-Interest Loans First. Employ the "avalanche method" by prioritizing aggressive repayment of loans with the highest interest rates. This minimizes the total interest paid over time. Online tools or spreadsheets can help borrowers track progress and strategize further payments. 
• Exceed Minimum Payments. Whenever possible, borrowers should strive to allocate additional funds towards their loan principal. Even small increases in monthly payments can significantly shorten the repayment timeline and save money on interest. 
• Explore Income-Driven Repayment (IDR). Federal student loans offer IDR plans that adjust monthly payments based on a borrower's income and family size. This can provide relief during periods of lower income and extend the repayment term, potentially leading to loan forgiveness after a set timeframe.
• Loan Consolidation. Consolidating multiple federal loans into a single loan simplifies repayment with one monthly payment and potentially a lower overall interest rate. However, this can extend the repayment term, so borrowers should ensure it aligns with their financial goals.
• Seek Additional Income Streams. Freelancing, a part-time job, or a side hustle can generate extra income specifically dedicated to accelerating loan repayments. 
• Leverage Employer Benefits. Some employers offer student loan repayment assistance programs. Borrowers should explore their company's benefits to see if such programs are available 
• Embrace Frugality. Maintaining a budget that minimizes unnecessary expenses allows more money to go toward loan payments. Consider cost-saving measures like avoiding eating out or utilizing public transportation. 
• Maintain Motivation. Paying off student loans is a long-term commitment. Celebrating milestones and tracking progress can help borrowers stay motivated throughout the repayment journey.

Should investing in further certifications enhance your loan repayment strategy?

Pursuing targeted certifications can directly impact career advancement and financial stability by developing specialized skills valued by employers. These credentials often open avenues for higher starting salaries or promotions, enabling faster student loan repayment or qualifying for more favorable refinancing. Evaluating cost-effective options, such as the cheapest online graduate certificate programs, allows borrowers to strategically complement their degrees while mitigating long-term debt challenges.

Does your college major affect your student loan repayment strategy?

Carefully assessing the future earnings potential linked to your chosen field is essential for managing student loan repayment. Consider factors such as industry growth, starting salaries, and career stability when selecting a major. Aligning your academic focus with fields known for robust employment outcomes can provide financial relief by enabling more manageable repayment plans. For instance, exploring options like the easiest degree may offer a smoother transition from college to a stable income, ultimately supporting a more strategic approach to loan management.

What are the alternatives to bank student loans?

Exploring alternatives to bank-provided student loans can provide students with more cost-effective or flexible solutions to cover college expenses. While bank loans offer essential financial support, other funding sources might better suit individual needs depending on circumstances.

One significant alternative is federal student loans, which generally have lower interest rates, diverse repayment options, and unique benefits like income-driven repayment plans and loan forgiveness programs. These options are particularly advantageous for students who may struggle to meet monthly payments during economic downturns or after graduation.

Scholarships and grants are another excellent resource as they provide free money for education, requiring no repayment. Students should actively seek these opportunities through their schools, local organizations, and online databases.

Work-study programs also provide an option to earn money while enrolled. These programs, often included in federal financial aid packages, offer flexible job schedules that fit around academic responsibilities.

For students who prefer flexible funding options, private loans from non-bank entities like credit unions may offer competitive terms, particularly for members. Another noteworthy option is crowdsourcing or peer-to-peer lending, which can come with lower rates for borrowers with stellar credit.

Lastly, students planning to apply for private loans should explore the best private student loans for college as this could open doors to favorable rates and terms tailored to individual needs.

Considering these alternatives could lessen financial burdens while allowing students to maximize their educational opportunities and plan for a sustainable financial future.

Are summer classes a viable strategy for managing student loan costs?

Enrolling in summer courses can shorten your degree timeline, potentially reducing both the total borrowed amount and the interest accrued over time. This approach may lessen the overall financial burden by decreasing the number of terms financed and accelerating entry into the workforce. Consider evaluating specialized financing options, such as a student loan for summer class, to cover additional fees without disrupting your primary loan structure. A precise assessment of course intensity, cost, and long-term repayment implications is essential to ensure that this accelerated path aligns with your academic and financial goals.

Can student loans be used to cover essential living expenses like rent?

Although student loans are primarily designed to finance tuition and education-related fees, many borrowers inquire about utilizing available funds for essential living expenses, including rent. Disbursement processes vary by institution, and some loans may allocate surplus funds toward housing, textbooks, and other basic needs. It is essential to verify how your school manages excess funds—whether they are directly applied to your account or retained for institutional use—as this could influence your ability to supplement living expenses. Learn more about specific housing financing options and restrictions by reviewing our article Can student loans be used for rent?

Can online education options lower your overall student debt?

Online education programs often lower overall expenses by reducing ancillary costs such as commuting and on-campus fees, thereby offering a strategic means to manage higher education debt. Many accredited institutions provide flexible curricula at competitive tuition rates, allowing borrowers to focus on timely loan repayment while acquiring relevant professional skills. Students seeking cost-effective alternatives may benefit from exploring distance learning undergraduate degrees, which can align educational goals with a sustainable financial plan.

How important is building credit for student loan success?

Building credit is a crucial yet often overlooked aspect of managing student loans effectively. A strong credit profile not only affects your initial eligibility for student loans but also significantly influences opportunities for refinancing and securing more favorable terms in the future.

For students seeking private loans, many lenders emphasize creditworthiness as a primary eligibility criterion. If you lack a credit history, securing a cosigner with a robust credit score is essential, as it can improve your chances of approval and potentially reduce interest rates. Additionally, establishing and maintaining good credit can open pathways to competitive financial products offered by reputable banks. For a detailed comparison of financial institutions providing student funding, explore this list of reliable banks that give student loans.

Once you've secured a loan, monitoring your credit score via free or paid tools aids in understanding changes that could impact loan repayment options. Regular, on-time payments contribute positively to your credit history, enhancing long-term financial opportunities. Borrowers who proactively manage their credit position themselves for potential benefits like refinancing at lower interest rates or qualifying for additional financial tools to ease student loan repayment.

Strengthening your credit profile not only improves immediate financial outcomes but also fosters lifelong financial health, offering stability and flexibility as you progress in your education and career.

How to Refinance Student Loans for Better Terms

Refinancing student loans can significantly ease the financial burden for borrowers by securing better interest rates, repayment terms, or monthly payments. Refinancing involves replacing one or multiple existing loans with a new loan, ideally one that offers improved terms.

To effectively refinance, borrowers should assess their creditworthiness (credit score, income, and debt-to-income ratio) as these play a vital role in determining the eligibility for better rates. Additionally, it is crucial to compare offers from multiple lenders to find the best deal. For instance, exploring College Ave student loans pros and cons can provide valuable insights and help borrowers decide whether this option aligns with their financial goals.

Refinancing is most beneficial for those with strong credit and stable incomes, as these factors often lead to lower interest rates. However, borrowers should weigh the pros and cons of refinancing federal loans into private loans, as doing so can result in losing access to benefits like income-driven repayment plans and loan forgiveness programs.

Ultimately, staying informed and strategically timing the refinancing process can transform student loan repayment into a more manageable and cost-effective endeavor.

Are there any tax benefits for student loan borrowers?

Borrowers may qualify for a tax deduction on interest paid, which can reduce taxable income if specific income thresholds are met. The eligibility criteria and deductible limits set by the IRS require careful review to optimize financial planning. Consulting a tax professional ensures that individual circumstances and loan conditions are accurately assessed. Additionally, evaluating academic investment opportunities can yield long-term advantages, as advanced degree programs may contribute to improved earning potential and tax strategy. For further insights on degree options with potential financial benefits, consider the easiest doctorate.

Could an accelerated associate's degree help reduce your student loan burden?

Pursuing a condensed academic pathway can lower both the overall cost of education and the duration of debt exposure. An accelerated associate's degree offers a streamlined curriculum that enables a quicker transition into the workforce, resulting in earlier income generation and an accelerated ability to manage repayments. Evaluating program outcomes, accreditation standards, and employment prospects is essential when considering this alternative to mitigate long-term financial challenges.

Does choosing a high ROI degree enhance student loan repayment prospects?

Selecting a degree with a high return on investment directly influences your ability to manage and repay student loans. By opting for programs that combine a shorter duration with strong earning potential, graduates may reach financial stability sooner and reduce prolonged debt exposure. Carefully researching career outcomes, industry demand, and starting salary ranges is essential to ensure that your academic investment accelerates loan repayment. Consider emerging pathways, such as pursuing the shortest degree with highest pay, as a strategic alternative to traditional four-year programs.

Key Facts

• As of Q1 2024, the United States has a balance of about $1.75 trillion in student loans.
• The average federal student loan debt is $37,088, while the average private student loan is $54,921.
• The average interest rate for federal loans increased from 4.12% in 2020–2021 to 6.87% in 2023–2024.
• 43.2 million borrowers have student loan debt.
• 94.81% of all student loan debt is from federal loans, while 5.19% is from private loans.

Other Things You Should Know About Banks That Offer Student Loans

How do I choose a bank for students?

Choosing a student-friendly bank involves considering factors like low student loan fees, convenient account features (mobile banking, online bill pay), and potential perks like student loan refinancing options or cashback rewards. It also helps to compare interest rates on student checking and savings accounts.

How long does it take to pay off student loans?

It normally takes students 20 years to pay off their student loans. To shorten the duration, they can find extra revenue streams, leverage other forms of financial aid, and possibly find loan forgiveness programs. 

What is the usual minimum payment for student loans?

According to Federal Student Aid, monthly payments should be at least $50 for up to 10 years for the federal government's Standard Payment Plan. Students can pay more than the minimum to reduce a loan's payment duration. 

References: 

1. Federal Student Aid. What are the monthly payment amounts for federal student loans under the Standard Repayment Plan? Federal Student Aid
2. Hanson, M. (2023, May 22). Average Student Loan Debt. Education Data Initiative
3. Hanson, M. (2023, May 30). Average Student Loan Payment. Education Data Initiative
4. Hanson, M. (2024, February 21). Average Student Loan Interest Rate. Education Data Initiative
5. Hanson, M. (2024, May 25). Financial Aid Statistics. Education Data Initiative
6. Hanson, M. (2024, March 3). Student Loan Debt Statistics. Education Data Initiative
7. Rivera, H. (2023, December 13). Student loan debt statistics. Bankrate