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SoFi Student Loan Consolidation Review

As of November 2012, SoFi’s loan volume has surpassed their alumni capital investments, requiring all loan programs to be temporarily closed to new applications. There is a wait list, however, which they hope to begin working from as soon as additional alumni capital is acquired.

Created in 2011 by a team of Stanford Graduate School of Business students, SoFi, which stands for Social Finance, offers refinancing options for both in-school and graduate student loan consolidations. Their innovative approach to helping the United States’ failing student loan market works by recruiting alumni and students from participating schools and encouraging them to invest in their own school’s SoFi Loan Fund. Alumni are rewarded for their participation by earning what SoFi calls a double bottom line return, garnering both financial and social benefits, which keeps investors fresh and active. Students can then apply for and use those loans for their educational needs, enjoying a choice of fixed rates and repayment plans, often at lower cost than federal or other private lenders.


SoFi’s student loan consolidating refinancing program

SoFi’s student loan consolidating refinancing program allows a student to refinance both their federal and private student loans together, which is rare in the industry. They offer  fixed interest rates of 6.38% APR for students who elect to defer payment while in school, 6.24% APR for students who elect to make payments while in school, and 5.99% APR for graduates who are refinancing their student loans. There’s a minimum loan amount of $6,000 with a maximum of $200,000, and repayment term options are available for 5, 10 or 15 years. Repayment plans include a graduated repayment plan which starts low and increases every 2 years over a 10 year term, and also an income based repayment plan which bases the monthly payment on a borrower’s income. There is no loan origination fee, nor do they charge prepayment penalties.

Deferment options are available for unemployment, underemployment, economic hardship, active duty, disability rehabilitation, and enrollment in school for continuing education only. There are also several loan forbearance options. Unlike many private student loan and consolidation programs, SoFi does offer loan forbearance and cancellation in the case of the borrower’s death.

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SoFi also has a community forgiveness program in the works, with the concept of giving students and graduates a platform by which they can involve alumni as supporters and investors with common interests. Although it’s not completely stabilized yet, the program seeks to offer the benefits of a completely integrated community where the interests of one can promote benefits to many.

Application process

The application process is relatively straightforward. You will be required to set up a username and password on their website, complete an application form, and submit employment verification, as well as various other documents, as they are requested. New loan applications take approximately an hour to complete and will result in an immediate credit report-based preliminary approval or denial notification, with a disbursement waiting period of at least 2 weeks. Refinanced loans also take approximately an hour; generally a credit report-based preliminary approval or denial notification is available within 2 days, with a loan pay-off waiting period of at least 3 weeks.


There are currently 78 higher education institutions participating in the SoFi program. If your school is not currently eligible, you can request that SoFi adds it, although success is entirely dependent on your school’s alumni involvement.

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