MBA students can no longer turn to SoFi for loans, but still have options
After the 2016-17 school year, SoFi will stop offering private loans for students pursuing a Master of Business Administration degree.
Social Finance, as the San Francisco company is officially called, will stop accepting applications for its MBA loans on July 15. The loans were available to students at 25 top MBA programs, including at Harvard, Stanford, University of Chicago and the University of Pennsylvania.
鈥淲e鈥檙e refocusing our lending efforts on student loan refinancing, mortgages and personal loans,鈥� SoFi spokeswoman Laurel Toney says. The lender聽will continue to offer private student loans to聽parents聽who want to help their children in undergraduate聽programs.
Founded in 2011, SoFi was the first company to offer student loan refinancing for federal and private loans. It聽has lent more than $10 billion, including mortgages, personal loans and refinanced student loans.
This isn鈥檛 the first time SoFi has ceased its MBA loan business. The company previously stopped lending to聽MBA students聽in 2013, citing then-low interest rates on federal student loans of 5.41% for direct unsubsidized loans and 6.41% for direct PLUS loans, plus origination fees.
鈥淭he combination of lower loan rates and guaranteed government protections made it hard for us to justify choosing a SoFi loan while in school,鈥� said a聽聽about restarting the loans.
SoFi聽resumed lending to MBA students in July 2014 when federal rates rose to 6.21% for direct unsubsidized loans and 7.21% for PLUS loans, plus origination fees.
Currently, interest on the company鈥檚聽MBA loans start at 4.83% annual percentage rate for variable-rate loans and 6.50% for fixed, with no origination fee.
Options for聽MBA students
MBA students still have many options when it comes to borrowing for tuition and living expenses: federal and private student loans.
FEDERAL STUDENT LOANS
Graduate students 鈥� including those pursuing MBA degrees 鈥� can borrow up to $20,500 a year through the government鈥檚 unsubsidized direct loan program. Those loans currently have a 5.31% fixed interest rate for the 2016-17 school year, plus a 1.07% origination fee. You can also take out a federal PLUS loan to cover the remaining balance; those聽loans have a 6.31% interest rate for the 2016-17 year, plus a 4.27% or 4.28% origination fee, depending on when the聽loan is disbursed.
PRIVATE STUDENT LOANS
Private student loans are another option. If you have good credit, you may be able to get a lower interest rate from聽a private lender than from聽the federal government. However, private loans don鈥檛 have the same borrower protections that federal loans do, such as access to聽听补苍诲听.
Teddy Nykiel is a staff writer at NerdWallet. Email:聽teddy@nerdwallet.com. Twitter:.
聽This article first appeared at .
