Earnest Student Loans Review for 2025

by Alex Hillsberg , MA

Student Finance & Loan Expert

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Navigating the complex landscape of student loans in the United States can be overwhelming. With countless lenders, repayment plans, and forgiveness programs, finding accurate and unbiased information can be daunting. This review of Earnest student loans aims to cut through the noise, providing clear and comprehensive insights into various student loan options. By understanding the key factors, you can make informed decisions to manage your debt effectively. We will use our years of experience and expertise to demystify the world of student loans together.

Key Things You Need to Know About Earnest Student Loans for 2025

• Federal funding usually does not cover all expenses and costs of college education, and most students rely on private loans to cover the rest.
• Many lenders offer various loans with different terms and conditions, interest rates, qualifications, and repayment options.
• Earnest's current interest rates (as of July 2024) start from 5.48% APR for independent borrowers and 3.99% APR for borrowers with cosigners.
• Earnest provides flexible loan repayment options catering to various situations and financial needs.
• We present and debunk some of the common myths and misconceptions about student loans.

Table of Contents

1. Earnest Student Loans Review for 2025
2. What are some of the pros and cons of Earnest student loans?
3. How do I qualify for an Earnest student loan?
4. What are some details about Earnest undergraduate student loans?
5. What are some details about Earnest refinance loans?
6. How do I apply for an Earnest student loan?
7. Does Earnest offer loan payment flexibility?
8. What are some myths and misconceptions about student loans?
9. How to Evaluate Student Loan Costs Beyond Interest Rates
10. What are the latest regulatory developments affecting student loans?
11. Can student loan interest deductions help reduce my tax burden?
12. What is the student loan application timeline?
13. Can student loans cover living expenses beyond tuition?
14. How to Choose the Right Student Loan Lender
15. Do student loans affect my long-term retirement savings?
16. Do Student Loans Influence Long-Term Career Choices?
17. Can alternative education paths reduce student loan dependency?
18. How do student loans impact my credit score and long-term financial health?
19. Should I consider an affordable online university as a cost-saving alternative?
20. Other Things You Should Know About Student Loans

Earnest Student Loans Review for 2025

Earnest offers loans for undergraduate, graduate, MBA, medical, and law students, as well as parent loans for undergraduate students and refinance options for existing student loans.

In more detail, the different types of Earnest student loans are as follows:

• Undergraduate student loans
• Graduate student loans
• Student loans with cosigner
• Parent loans
• MBA loans
• Medical school loans
• Law school loans
• Half-time student loans
• International student loans
• DACA student loans

Our review is explained further in the sections below. We have found that:

• Earnest's private student loans are ideal for borrowers with strong credit or those who have a reliable co-signer.
• Additionally, the loan's built-in financial safeguards make it a suitable option for borrowers seeking added protection.
• Earnest offers many repayment options suited to several different financial situations that are commonly experienced by students.
• Earnest's current interest rates (as of July, 2024) start from 5.48% APR for independent borrowers and 3.99% APR for borrowers with cosigners.
• A 0.25% Auto Pay discount is included if you pay automatically electronically per month.

What do students say about their student loan debts? It may be surprising, but a recent survey showed that of those saddled with debt, 23% wish they'd applied for more scholarships and 20% wish they'd worked more. Somewhat not surprising was the finding that 25% delayed house purchases or paid off other debt because of existing student loan debt. These findings imply that loans are not easy to repay and have a lasting effect on finances and future planning. These are shown in the following graphic.

What are some of the pros and cons of Earnest student loans?

Here are some of the pros and cons of Earnest student loans:

Pros

• Extended grace period: Enjoy a longer period to start repaying your loan after graduation, giving you more time to find employment or adjust to post-school life.
• Loan options: Offers loans for various educational levels and parental borrowing, providing financial support for multiple educational needs.
• Fee-free: No additional charges for early repayment, late payments, or loan origination, saving you money and simplifying the repayment process.
• Payment flexibility: Choose your payment date and skip one payment per year if necessary, allowing you to better manage your finances.
• Interest rate reduction: Lower your interest rate by enrolling in autopay, potentially saving you significant money over the life of the loan.

Cons

• Credit score requirement: Requires a minimum credit score to qualify for a loan, limiting eligibility for those with lower credit scores.
• No co-signer option (for loan refinancing): Unable to add a co-signer for loan refinancing, potentially making it more difficult to qualify for a lower interest rate.
• Co-signer release restrictions: Does not offer the option to remove a co-signer from a private student loan, keeping a co-signer responsible for the loan even after the borrower has established creditworthiness.  

How do I qualify for an Earnest student loan?

Here are the eligibility requirements to get an Earnest student loan:

For New Student Loans Enrollment

• Full-time enrollment (or half-time for seniors) at an accredited college or university.
• Loan Amount: Minimum loan amount of $1,000.
• Creditworthiness: Minimum credit score of 650, passing credit check, at least three years of credit history, no collections or bankruptcies.
• Income: Annual income of at least $35,000.

For Refinanced Student Loans

• Loan Amount: Minimum loan amount of $5,000 (or $10,000 in California).
• Creditworthiness: Minimum credit score of 650, passing a credit check.
• Employment: Consistent employment and income.
• Degree: Earned degree with the debt being refinanced (exceptions may apply for those who left school at least six years ago).

Co-signer Options

• Purpose: Can be added to help qualify for a new private student loan.
• Requirements: Both borrower and co-signer must live in a state where Earnest offers loans.
• Limitations: No co-signer release option for private student loans. Cannot add a co-signer to refinanced loans.

What are some details about Earnest undergraduate student loans?

Here are some details about Earnest undergraduate student loans:

Loan Terms and Loan Amounts

• Borrowing Limits: Undergraduate students can borrow between $1,000 and the total cost of attendance, allowing borrowers to cover their educational expenses without taking on excessive debt.
• Flexible Repayment: Earnest offers customizable repayment terms, allowing borrowers to choose the exact number of months for repayment, unlike many lenders with fixed options, which provides greater control over monthly budget.

Loan Costs, Rates, and Fees

• Interest Rates: Competitive interest rates are offered, with options for both fixed and variable rates. Lower rates are available for borrowers with strong credit, potentially leading to significant savings over the life of the loan.
• Earnest's current interest rates (as of July 2024) start from 5.48% APR for independent borrowers and 3.99% APR for borrowers with cosigners, as shown in the graphic below.
• Fee Structure: Earnest stands out by charging no late fees, origination fees, or prepayment penalties, simplifying the repayment process and avoiding additional costs.  

Options for Repayment

• Deferred Repayment: No payments are required during school or the grace period, but this option results in higher overall interest costs due to accruing interest over time.
• Fixed Repayment: Small monthly payments are made during school and the grace period, followed by full payments, providing a gradual introduction to loan repayment.
• Interest-Only Repayment: Interest is paid during school and the grace period, with full payments starting afterward. This can be helpful for managing cash flow during school but may increase overall costs. It is available for co-signed loans only.
• Full Payment Repayment: Full payments are made from the start, leading to lower overall interest costs by minimizing the interest accrued. Available for co-signed loans only.

Advantages

• Extended Grace Period: Borrowers have nine months after graduation to start repayment, which is longer than many lenders offer. This provides additional time to find employment or adjust to post-graduate life.
• Payment Flexibility: The ability to skip one payment per year and adjust the payment due date can help with cash flow management, especially during unexpected financial challenges.
• Interest Rate Discount: Enrolling in autopay can lower the interest rate by 0.25%, resulting in potential savings over the life of the loan.

What are some details about Earnest refinance loans?

Here are some details of Earnest refinance loans:

Loan Terms and Loan Amounts

• Borrowing Limits: Earnest offers refinance loans for amounts as low as $5,000 (or $10,000 in California) and up to a maximum of $500,000, catering to a wide range of borrowers with varying debt levels.
• This flexibility allows borrowers to consolidate multiple private or federal student loans into a single loan, potentially simplifying their repayment process.
• Repayment Options: Similar to its private student loans, Earnest allows borrowers to choose their exact repayment timeline, down to the exact number of months.
• This provides borrowers with greater control over their monthly budget compared to lenders with fixed term options (5, 10, 15, or 20 years typically offered by other lenders).

Loan Costs and Fees

• Competitive Rates and Creditworthiness: Earnest provides competitive interest rates for both fixed and variable refinance options. Lower rates (as low as 4.99% APR for fixed and 5.89% APR for variable as of June 3, 2024) are available for borrowers with strong credit, potentially leading to substantial savings over the life of the loan.
• By offering competitive rates, Earnest allows creditworthy borrowers to potentially refinance their existing student loans and secure a lower interest rate, reducing their overall borrowing costs.
• Fee Structure: Earnest stands out by eliminating origination fees, late fees, and prepayment penalties, simplifying the refinancing process and avoiding unnecessary costs.

Options for Repayment

• Standard Repayment with Hardship Consideration: Earnest offers a standard repayment option, requiring full payments as soon as the old loan is paid off. This provides a clear and predictable repayment structure.
• Temporary Loan Pauses: However, Earnest acknowledges that borrowers may face financial hardship and offers the possibility of temporary loan pauses in specific circumstances. This demonstrates some flexibility and understanding of borrowers' potential financial difficulties.

Advantages

• Flexible Payment Management: Earnest offers similar perks to its private loans, including the ability to skip one payment per year and adjust the payment due date. This flexibility empowers borrowers to manage their finances more effectively and adapt to unexpected situations.
• Autopay discounts: Additionally, enrolling in autopay can reduce the interest rate by 0.25%, potentially leading to lower overall loan costs.

This table summarizes the key features:

What are some details about Earnest refinance loans? The Minimum Loan Amount is $5,000 (or $10,000 in California) and the Maximum Loan Amount is $500,000. You can choose the exact repayment timeline down to the month. These are shown in the graphic below.

How do I apply for an Earnest student loan?

Here are the steps to apply for an Earnest student loan:

• Check Eligibility: Use Earnest's prequalification tool to assess eligibility and potential interest rates based on basic personal information.
• Submit Full Application: If eligible, complete the full application with the required details. Information
• Required: Provide permanent address, school information, desired loan amount, and employment/income details.
• School Verification: Earnest sends application details to your school for verification. This process can take several weeks.
• Refinanced Loan Process: For refinanced loans, Earnest works with your previous lender to pay off the existing debt before starting repayments.

Does Earnest offer loan payment flexibility?

Yes, Earnest offers loan payment flexibility by giving borrowers several options:

Forbearance

Forbearance gives a temporary pause on loan payments for up to 12 months. It is available for financial hardships such as:

• Job loss
• Income reduction
• Increased expenses
• Unpaid parental leave

Deferment

• Pauses loan payments for students enrolled in school at least half-time
• Also available for active-duty military personnel

Hardship Assistance

• Loan discharge in cases of death or total and permanent disability
• Rate reduction program to lower interest rates for up to six months
• Term and rate modification program to extend repayment terms and lower interest rate

Remember that you must qualify for these conditions and that not everyone is afforded these options if you do not qualify. Be prepared to furnish all documentation as proof of hardship or change in financial situation.

According to a 2023 report by the Education Data Initiative, a total of $17.5 billion in federal student loan forgiveness has been distributed across different programs as of 2021. The breakdown is as follows: Public Service Loan Forgiveness (PSLF) comprises 12.2% of the total forgiven amount, and the Borrower Defense to Repayment Discharges was at 22.2% of the total forgiven amount, for situations where borrowers were defrauded by their schools. Total and Permanent Disability Discharges were highest at 33.1%. Teacher Loan Forgiveness: is at 22.1%, and automatic discharges for borrowers whose schools closed were at 10.4% of the total forgiven amount. These are shown in the graph below.

What are some myths and misconceptions about student loans?

Here are some myths and misconceptions about student loans and the realities that debunk them:

Myth #1: Student loan debt only affects young people.

Reality: Many older Americans are also burdened with student loan debt, often due to taking loans out to help their children or grandchildren attend college.

Myth #2: A college degree guarantees a high-paying job and easy repayment of student loans.

Reality: While a degree can increase earning potential, there's no guarantee of a high-paying job, and many graduates face significant student loan debt.

Myth #3: You can easily discharge student loans in bankruptcy.

Reality: While it is possible to discharge student loans in bankruptcy, it's incredibly difficult and requires proving undue hardship.

Myth #4: All you need to do to get out of student loan debt is consolidate your loans.

Reality: Consolidation might simplify payments but doesn't necessarily reduce your overall debt or interest rate.

Myth #5: Private student loans are always a bad idea.

Reality: While federal student loans often offer more benefits, private loans can be a viable option for some borrowers, especially if they have good credit.

Myth #6: Student loan interest stops accruing during periods of deferment or forbearance.

Reality: Interest continues to accrue on most student loans, even during periods of deferment or forbearance, which can increase the overall debt.

Myth #7: You need to pay a company to help you manage your student loans.

Reality: Many free resources are available to help you manage your student loans. Beware of scams offering to help for a fee.

Myth #8: Student loan forgiveness programs are widely available and easy to qualify for.

Reality: Loan forgiveness programs have specific eligibility requirements, and many borrowers don't qualify.

Myth #9: Student loan debt is primarily a problem for low-income individuals.

Reality: Student loan debt affects people from all socioeconomic backgrounds.

Myth #10: Only private colleges have high tuition costs leading to large student loan debt.

Reality: Public colleges have also seen tuition increases, contributing to student loan debt.

Before considering private loans, it is wise to look into federal funding first. Many of these are free in scholarships and grants, and federal loans have lower interest and are protected. Looking at some stats on trends in student aid, in 2023, $83.29 billion was awarded through the William D. Ford Federal Direct Loan Program. The Federal Pell Grant Program was the next largest contributor at $28.69 billion. The remaining grant funding came from the Federal Supplemental Educational Opportunity Grant Program ($893.8 million), the Teacher Education Assistance for College and Higher Education Grant Program ($82.1 million), and the Iraq and Afghanistan Service Grant Program ($0.6 million). The Federal Work-Study Program provided an additional $1.15 billion in aid. These are shown in the graph below.

How to Evaluate Student Loan Costs Beyond Interest Rates

When comparing student loan options, it's essential to analyze costs that go beyond just the interest rate. Hidden fees, loan origination costs, and prepayment penalties can significantly affect the total repayment amount. For instance, some lenders include hidden administrative fees, while others impose penalties for early payoff. Always request a detailed breakdown of all potential costs from your lender.

Additionally, understanding how the repayment schedule impacts your financial stability is vital. Selecting a longer repayment term might reduce monthly payments but often results in paying more interest over time. Conversely, a shorter term could minimize total costs but requires higher monthly payments.

Evaluate how your chosen lender handles deferment or forbearance periods. For example, interest can continue to accrue during these periods, leading to a higher balance when repayments resume. Such considerations can help borrowers make more financially sound decisions in both the short and long term.

Lastly, if you're seeking specialized funding for career-specific education, such as cosmetology, this overview on how to afford cosmetology school can offer tailored insights. By integrating cost-awareness strategies and aligning them with your educational goals, you can better prepare for managing student loan debt efficiently.

What are the latest regulatory developments affecting student loans?

Recent legislative updates and evolving regulatory frameworks are reshaping borrower protections and repayment options. Changes in federal policies are refining eligibility criteria, expanding consumer rights, and adjusting oversight on lender practices to foster transparency. These regulatory shifts can influence interest rate structures, repayment flexibility, and the stringency of forgiveness program qualifications, thereby affecting strategic financial planning. Moreover, understanding these developments can empower borrowers to capitalize on alternative higher education opportunities, such as pursuing the quickest masters degree, in alignment with emerging market trends.

Can student loan interest deductions help reduce my tax burden?

Borrowers may be eligible for a tax deduction on the interest paid, which can lower taxable income and ease overall financial strain. This benefit, subject to income thresholds and annual limits, requires careful evaluation of current tax codes and consultation with a financial professional. Considering alternative funding avenues, such as options available in online PhD criminal justice no dissertation, can further refine your financial strategy without altering the principal debt.

What is the student loan application timeline?

The duration for obtaining a student loan varies by lender and depends on factors such as documentation completeness, credit evaluation, and regulatory checks. Borrowers should prepare in advance by gathering necessary financial records and understanding lender-specific requirements, which can help streamline the process. In many cases, preparation and prompt submission of all required documents lead to faster approvals. For more detailed information on expected timeframes, refer to the student loan application timeline.

Can student loans cover living expenses beyond tuition?

Student loans are primarily designed to cover tuition, fees, and certain educational costs; however, some lenders permit the use of additional funds for essential living expenses. Borrowers should carefully review their loan agreements to determine if disbursements may be allocated toward necessities such as housing, utilities, and daily expenses. Understanding these terms is crucial because using student loans for living costs can increase overall debt and affect financial planning. In scenarios where funds are allocated for housing, it is essential to monitor spending and financial commitments closely. For more detailed information on the permissible use of funds, please see our article Can student loans be used for rent?

How to Choose the Right Student Loan Lender

Selecting the best student loan lender is a pivotal step in managing your education financing effectively. While exploring options, it’s crucial to consider factors beyond just interest rates. Look into lender reputation, repayment flexibility, customer service, eligibility requirements, and loan customization options. For instance, lenders offering tailored repayment terms or options for financial hardship can prove invaluable.

Equally vital is assessing the lender's transparency regarding fees and their responsiveness in addressing borrower concerns. To guide you through this process, research reputable student loan lenders to ensure your choice aligns with your financial goals and long-term plans.

Navigating this decision with a well-rounded approach will ultimately help mitigate the challenges of student loan management and set you on a path toward financial stability.

Do student loans affect my long-term retirement savings?

High monthly repayments can constrain funds available for retirement savings, impacting long-term financial security. Analyzing your debt-to-savings ratio is key to determining whether your current repayment plan allows adequate contributions to retirement accounts. Evaluating employer-sponsored retirement programs, tax-advantaged investment options, and the potential benefits of refinancing loans can help align debt management with future wealth building. Additionally, exploring cost-effective academic programs, such as easy degrees, may reduce borrowing needs and free up more capital for retirement planning.

Do Student Loans Influence Long-Term Career Choices?

Student loan obligations can shape career trajectories by necessitating choices that ensure steady income and manageable repayment plans. Borrowers may opt for industries with higher starting salaries or roles that promise rapid financial stability, even if these do not align perfectly with their long-term interests. This dynamic emphasizes the importance of aligning career decisions with realistic assessments of debt obligations and potential earnings. Often, prospective students in fields with significant educational expenses, such as how much is veterinary school, must balance passion with financial prudence to maintain both career satisfaction and fiscal responsibility.

Can alternative education paths reduce student loan dependency?

Exploring alternative education pathways can offer a pragmatic approach to limiting long-term student loan reliance. Opting for accelerated programs or targeted certificate courses can decrease tuition expenses and shorten the time to workforce entry, ultimately reducing interest accumulation over extended repayment periods. For example, consider researching the best associate degree in 6 months online to evaluate if a condensed academic program aligns with your career objectives and financial planning. This approach helps borrowers strategically balance educational investments with future earnings potential, allowing for a more controlled debt management strategy.

How do student loans impact my credit score and long-term financial health?

Student loans have a pronounced impact on your credit profile and overall financial stability. Consistent, on-time payments can build a positive credit history, paving the way for better loan terms for future financial needs such as mortgages or auto financing. Conversely, missed or late payments can lead to a drop in your credit score, which may affect your borrowing power for years to come. Strategic repayment planning, including options like consolidation or refinancing, can help mitigate negative impacts. Evaluating accelerated education programs—such as 1 year associate degree programs online—might also reduce the duration of debt and foster financial resilience.

Should I consider an affordable online university as a cost-saving alternative?

Evaluating cost-effective educational models can play a pivotal role in diminishing student loan debt. Prospective borrowers might benefit from comparing traditional on-campus costs with alternative online programs that lower tuition and associated fees. Analyzing academic quality, program flexibility, and overall return on investment are key to determining the long-term viability of these options. For example, exploring an affordable online university can provide insights into maintaining educational standards while reducing financial burdens.

Key Findings

• Earnest's current interest rates (as of July 2024) start from 5.48% APR for independent borrowers and 3.99% APR for borrowers with cosigners.
• A 0.25% Auto Pay discount is included if you pay automatically electronically per month.
• Earnest refinance loans have a $5,000 ($10,000 in CA) minimum loan amount and a $500,000 maximum loan amount.3
• As for loan forgiveness in the USA, Public Service Loan Forgiveness (PSLF) accounts for 12.2% of the total forgiven amount, and borrower defense to repayment discharges make up 22.2%.
• 33.1% goes towards total and permanent disability discharges and teacher loan forgiveness is at 22.1%.
• Of those saddled with student loan debt, 23% wish they'd applied for more scholarships, 20% wish they'd worked more, and 25% delayed house purchase or paying off other debt.
• For federal funding, $83.29 billion was awarded through the William D. Ford Federal Direct Loan Program. The Federal Pell Grant Program was the next largest contributor at $28.69 billion.
• The remaining grant funding came from the Federal Supplemental Educational Opportunity Grant Program ($893.8 million), the Teacher Education Assistance for College and Higher Education Grant Program ($82.1 million), and the Iraq and Afghanistan Service Grant Program ($0.6 million).
• The Federal Work-Study Program provided an additional $1.15 billion in aid.

Other Things You Should Know About Student Loans

Are interest rates the only factor I should consider when choosing private student loans?

Though they are extremely important, interest rates are not the only factor to consider when choosing private student loans. While interest rates are crucial, several other factors significantly impact your overall loan experience. These include:

• Repayment terms: Understand the length of the repayment period and available options like interest-only or deferred payments.
• Fees: Compare origination fees, late fees, and prepayment penalties across different lenders.
• Hardship options: Evaluate the lender's policies for forbearance, deferment, and loan forgiveness in case of financial difficulties.
• Cosigner options: Consider if a cosigner is required and if there's an option to release them later.
• Customer service and support: Research the lender's reputation for customer service and responsiveness.
• Additional benefits: Some lenders offer features like autopay discounts, unemployment protection, or job placement assistance.

By considering these factors alongside interest rates, you can make a more informed decision about which private student loan best suits your financial situation and needs.

What other sources of funds should I explore for education?

Beyond student loans, consider exploring these funding options as part of college planning:

• Scholarships and Grants: These offer free money for education and typically don't need to be repaid. Explore options based on academic merit, financial need, or specific demographics.
• Work-Study Programs: Earn money while gaining valuable work experience through on-campus or off-campus jobs. 
• Part-Time Jobs: Balancing studies with part-time work can help cover educational expenses.
• Family Contributions: Seek financial support from family members or relatives.
• Crowdfunding: Utilize online platforms to raise funds from a large number of people.
• Military Benefits: Explore options like the GI Bill for veterans or active-duty military personnel. 
• Employer Tuition Reimbursement: Check if your employer offers tuition assistance programs.

Remember, combining these sources often proves more effective than relying solely on student loans.

What other sources can I consult to learn more about student loans?

To delve deeper into student loans, consider consulting these resources:

Government Websites

• Federal Student Aid (FSA): Provides comprehensive information on federal student loans, repayment plans, and forgiveness programs.
• Consumer Financial Protection Bureau (CFPB): Offers guidance on managing student loan debt and protecting your rights.

Nonprofit Organizations

• National Foundation for Credit Counseling (NFCC): Provides free or low-cost credit counseling and education.
• The Institute for College Access & Success (TICAS): Offers research and data on student loan debt and affordability.

Financial Institutions

• Banks and Credit Unions: May offer student loan refinancing options and financial advice.

Educational Institutions

• Financial Aid Offices: Can provide information on scholarships, grants, and student loan options.

Online Resources

• Financial websites and blogs: Offer personal finance advice and student loan information.

Remember to be cautious of websites or individuals offering quick fixes or guaranteed loan forgiveness. Always verify information from multiple sources and consult with a trusted financial advisor if needed.

References:

• Bankrate. (2024). 529 tips for grandparents. Bankrate.
• Education Data Initiative. (2024). Student loan forgiveness statistics. Education Data Initiative.
• Earnest. (2024). Low-interest loans designed for you. Earnest.
• Earnest. (2024). Student loan rate disclosures. Earnest.
• Federal Student Aid. (2024). Federal student loan portfolio. U.S. Department of Education.