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Exploring IVF Financing Options

Couples who are finding it hard to get pregnant can often feel isolated while they’re going through this difficult experience. But struggling with fertility is actually quite common.

Between 10$ and 15% of couples trying to have children in the US experience infertility problems, according to the Mayo Clinic. More than 12% of American women between the ages of 15 and 49 have gotten medical treatment for infertility issues, according to the last National Survey of Family Growth. And more than 55,000 American women per year give birth thanks to assisted reproductive technology.

One of the most common and effective treatments for fertility problems is in vitro fertilization (IVF). This involves removing an egg from a woman’s ovaries, fertilizing it with sperm in a lab, and then implanting the embryo in her uterus. Women under the age of 35 have a nearly 50% chance of having a baby through IVF, while women over the age of 42 have about a 3.9% chance.

The procedure is expensive—the average cost of one IVF cycle in the U.S. is between $12,000 and $17,000. That number can depend on the city or state you live in, the treatment center you use, how many medications you take, and other factors. In many states, insurance doesn’t cover IVF at all. So, on top of the emotional toll of fertility struggles, the high cost of treatment can sometimes be a financial burden as well.

Options for Financing IVF

For many would-be parents, that hefty price tag is worth it for the chance to have children. But how can people afford to pay for treatment? Here are a few ideas for IVF financing.

1. Tapping into Your Health Insurance

Your first step should probably be to check whether your health insurance will cover IVF. There are 15 states that require insurance companies to cover infertility treatment: Arkansas, Connecticut, Delaware, Hawaii, Illinois, Louisiana, Maryland, Massachusetts, Montana, New Jersey, New Hampshire, New York, Ohio, Rhode Island, and West Virginia. However, not all of these states include IVF in the requirement. Another two states—California and Texas—require insurers to offer coverage for infertility treatment, and in California this doesn’t include IVF.

You can contact your insurer to find out your specific benefits. If you have the option and if the timing works out with your enrollment period, you might consider switching your insurance plan to one that covers IVF. But in most states, where insurance companies don’t have to pay for IVF, so in those locations, you may be responsible for covering all expenses yourself.

2. Using Your Health Savings Account or Flexible Spending Account

A health savings account (HSA) allows you to put away money for medical expenses. Typically, you get an HSA in tandem with a qualifying high-deductible health plan. If you have funds in your HSA, you can use them to pay for IVF and related medical expenses. As long as you paid for the expenses after you opened the HSA, you can reimburse yourself for them at any time—it doesn’t have to be in the year that you incurred the costs.

If your employer offers a flexible spending account (FSA), you can also use those funds to pay for IVF. You don’t need a qualifying health plan to have and use this account. However, you do have to use all your FSA funds in the year they’re doled out or lose them.

Bear in mind that there are annual limits on how much money you can contribute to either kind of account. For 2022, the individual cap on HSA contributions is $3,650 and the family cap is $7,300. Health flexible spending account limits were at $2,750 in 2021. At the time this article was updated, the IRS had not announced what, if any, changes it plans to make for 2022.

3. Budgeting and Saving

If you’re planning to pay for IVF out-of-pocket and you don’t just have that kind of cash lying around, the most basic financial move is to save up, the way you would for any major expense. That likely means making a budget. You can start by tallying up your monthly expenses and take-home income. If you have enough financial leeway to save cash every month, you could set up an automatic paycheck withdrawal amount that could go directly into a savings account dedicated to your IVF fund.

If you don’t have enough left over after your expenses to save for IVF, one option is to work on cutting your spending. Can you take in a roommate or boarder to reduce housing costs? Could you spend time doing more free or low-cost activities with your friends instead of going out to bars or shows? What about giving up that gym membership in favor of YouTube fitness videos or running outdoors?

Another option is to increase your income. Perhaps you or your partner could ask for a raise at work or look for a better-paying job. Or you might take on a side hustle, such as driving for a ride-sharing service or renting your place out on Airbnb.

4. Borrowing From a Loved One

If you have a friend or relative who is financially comfortable, you might consider asking them for a loan. There may be people in your life who would be happy to support you in such an important and personal investment. But approach this option carefully to avoid damaging relationships. You may want to make it clear that the person you’re asking can say no with no hard feelings. If they agree, it’s a good idea to set out the terms of the loan clearly, including whether you’ll pay interest and your repayment schedule. Then, of course, you should be sure to honor the agreement.

5. Getting a Medical or Fertility Loan

Some IVF providers work with companies that offer financing for medical treatments. You can also search for IVF-specific loans and financing programs online. Take note of any origination fees or penalties for repaying the loan early.

These options can be convenient, but it never hurts to shop around before borrowing, since both loans and financing programs can come with higher interest rates than you might expect.

Some fertility treatment providers may also offer IVF payment plans that let you break the cost down over a number of months.

6. Applying for a Grant

A number of nonprofit organizations offer grants and scholarships to those who cannot afford to pay for IVF. Bear in mind that there’s no guarantee that you’ll receive a grant. That said, groups that provide assistance nationally include the AGC Scholarship Foundation, BabyQuest Foundation, the Tinina Q. Cade Foundation, the Family Formation Charitable Trust, the Footsteps for Fertility Foundation, among others.

Other groups may offer support to individuals and families who live in specific regions. You might also want to look at this list of infertility financing resources from Resolve .

7. Taking Out a Home Equity Line of Credit

If you own a home, you may be able to take out a revolving line of credit against the equity that you’ve built up. The advantage is that home equity lines of credit (HELOC) often have lower interest rates than credit cards or other types of loans. As of September 1, 2021, the average rate for a R30,000 HELOC was 4.10% (but this rate will change daily).

The amount you can borrow and the terms depend on the equity in your home, as well as your credit history, debt-to-income ratio, and other factors.

The downside of a HELOC is that if you have trouble making payments, your home is on the line. It’s up to you to pay the entire balance off within a certain time period, or else, typically, a sky-high interest rate kicks in.

8. Borrowing From Your Retirement Account

This is a path that financial advisors generally would not recommend. That’s because nest eggs usually stay untouched for decades in order to have enough time to grow for retirement. The more funds you leave in, and the earlier you invest, the more time your retirement savings has to grow or to recover from losses.

However, you may have the option of borrowing up to $50,000 or half of the amount vested in your 401(k)—whichever is smaller. If you take this path, you are basically lending the money to yourself at market interest rates for up to five years. However, if you leave your job for any reason during the time you’re paying off the loan, there may be penalties for early withdrawal if you don’t pay the loan off in time. Keep in mind that you will be repaying the loan with after-tax dollars, and they’ll be taxed again when you take the money out in retirement.

You may also qualify to actually withdraw money from your 401(k) to pay for out-of-pocket medical expenses, if your plan allows what’s called a hardship withdrawal . You’ll have to pay taxes and a 10% penalty on the amount you take out. If you have a Roth IRA, you can withdraw your contributions (but not earnings) at any time without penalties or taxes.

9. Taking Out a Personal Loan

Compared to using high-interest credit cards or money in your retirement accounts, a personal loan might be a better option for many people. A personal loan can be used for almost any expense, including IVF, and it often (but not always!) comes with a much lower interest rate than credit cards.

Unlike a HELOC, unsecured personal loans don’t require you to put up any assets as collateral. With SoFi, for example, you can borrow from $5,000 up to $100,000 without paying any fees or prepayment penalties. If you qualify, you then have a fixed rate with a fixed monthly payment for the term of the loan, so you know exactly what to expect.

The Takeaway

IVF might be one of the most meaningful investments you’ll ever make, but it’s undeniably expensive. You can look to your insurance, health savings accounts, cash savings, or a loved one. If that’s not enough, an unsecured personal loan may be a smart way to finance treatment and help make your dreams a reality. See if you might be eligible for one of SoFi’s personal loans with no fees to help you cover the costs.


SoFi Loan Products
SoFi loans are originated by SoFi Lending Corp. or an affiliate (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license # 6054612; NMLS # 1121636 . For additional product-specific legal and licensing information, see SoFi.com/legal.

External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Third Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third party trademarks referenced herein are property of their respective owners.

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A Look at the Average Cost of Nursing School

A Look at the Average Cost of Nursing School

Nursing is an extremely rewarding career, and it has the added benefit of being in high demand right now. Getting through nursing school takes a lot of hard work—and it can be fairly expensive.

According to the Bureau of Labor Statistics (BLS), in 2019, there were approximately 3 million people working as registered nurses in the U.S. And demand for the role is expected to increase by 7% from 2019 to 2029.

The average cost of nursing school can vary widely. The cost for a Bachelor’s in Nursing (BSN) can be comparable to any other four year degree. According to U.S. News, the average cost of tuition for the 2020-2021 school year was $9,687 for a four year public school, and $35,087 for a four year private school. Some may pursue other pathways, such as an online RN to BSN program, which can sometimes be more affordable ranging between $25,000 to $80,000 in cost. While this may seem costly, the median annual salary for an RN in 2019 was $75,330.

Becoming an RN isn’t the only option. There are also CNAs (certified nursing assistants), or an LPNs (licensed practical nurse), and each degree comes with different costs. Understanding different nursing degrees, which nursing program makes sense for you, and what your payment options are will help set you up for success.

What Are the Various Nursing Degrees You Can Pursue

There are a number of routes to becoming a nurse or nurse’s assistant.

Becoming a CNA

Becoming a certified nursing assistant (CNA), requires a high school degree, and you typically need to take 4-12 weeks of courses and pass a vocational exam. The requirements to become a CNA may vary widely by state. A CNA assists the nurses and doctors with things like admitting patients and taking vitals.

Becoming an LPN

A licensed practical nurse (LPN) is also known as a licensed vocational nurse (LVN). Both require a diploma from an accredited program, which can take 12 to 24 months to complete. You must then pass a licensing exam LPN work generally involves collecting samples, administering medications, and taking patients’ vitals and symptoms.

Becoming an RN

RNs (or registered nurses) need a bachelor’s or associate’s degree, and they must pass the NCLEX-RN exam. There are also opportunities for LPNs to continue their education and earn their RN credentials. RNs are responsible for a wider range of patient care and treatment, including assessing the patients and recommending prevention plans.

RNs with a bachelor’s degree in nursing (BSN) are able to apply for higher-level jobs than those with associate’s degrees. A bachelor’s degree may also be required for managerial roles.

Becoming an advanced practice registered nurse (APRN), or getting a master’s or doctorate in nursing is also an option for those who want to work as nurse administrators, nurse midwives, or enter the field of nurse education.

Need help after graduating nursing school? See what
SoFi student loan refinancing could do for you.


The Average Cost of Different Nursing Degrees

Choosing the right nursing degree depends on your goals. It’s also important to understand the time commitment and costs associated with each option.

CNA Costs

The cost of becoming a CNA can range depending on the state you test in. States may also have different requirements just to apply. Researching your state’s particular requirements and costs may help you gauge how much you can expect to spend.

LPN Costs

An LPN program takes 12 to 18 months to complete and generally costs around $10,000 to $15,000 total, though the costs may be more or less depending on location and other factors. In 2020, the median pay for an LPN was $48,820 annually according to the BLS.

RN Costs

Becoming an RN can take anywhere from two to four years depending on the path of study. Getting an Associate Degree in Nursing (ADN) takes about two years and costs can vary widely. In general, public, vocational, or community colleges offer the most affordable ADN programs.

Getting a BSN takes four years and generally costs the same as most bachelor’s degrees. Costs can vary widely, ranging anywhere from $40,000 to more than $200,000.

The annual costs depend on where you go to school, and whether you attend a private or public college. For RNs who already have an associate’s degree but would like their bachelor’s, there are RN to BSN bridge programs available. Some of these programs are available online, and are paid based on credit hour.

To compare nursing school costs, you’ll want to look at tuition, additional fees (housing, etc.), and how many credits you need. You’ll also want to look at exam pass rates and job placement rates.

Other Fees You’ll Encounter While Studying to Be a Nurse

In addition to nursing school tuition and books, there are typically lab fees each semester. Students may also need to buy scrubs ($30 to $50 a pair), a lab jacket, and miscellaneous gear like a stethoscope.

Some nursing schools may also require students to take out liability insurance and get all mandatory immunizations. There’s also licensing and exam fees, which vary by state but can cost as much as $300 for your initial license and $200 to take the exam.

How to Pay for Nursing School Without Going Broke

For those attending accredited nursing schools, taking out student loans is an option to help pay for tuition, room and board, and other student expenses.

Federal Student Loans

Federal student loans can be used to help pay for nursing school. Students can apply for federal student loans—other forms of federal aid—by filling out the FAFSA® (Free Application for Federal Student Aid). This application is used to determine federal student aid including scholarships, grants, work-study, and federal student loans.

Scholarships and Grants

In addition to scholarships and grants offered by the federal government, there are private scholarships available to nursing students. The American Association of Colleges of Nursing also maintains a scholarship database for nursing schools. In some cases, students can have their nursing student loans forgiven or repaid if you work in underserved communities with the Health Resources and Services Administration and meet certain criteria.

Private Student Loans

If federal student loans and other forms of aid aren’t enough to pay for the cost of nursing school, private student loans could be one option to consider. Private student loans are available from private lenders and generally allow students to borrow up to the cost of attendance at their school. However, while federal student loans offer the option for loan forgiveness through certain federal programs, private student loans do not. As a result, private student loans are generally used as a last option after all other forms of financial aid have been exhausted.

The Takeaway

The cost of nursing school can vary dramatically depending on the type of nursing program you are enrolled in, the location of the school, and whether the school is a public or private university, a community college, trade, or vocational school.

Regardless, paying for nursing school doesn’t have to be overwhelming. There are federal aid programs, private scholarships, and grants available to help students finance their degrees. When those sources of funding aren’t enough. Private student loans can help fill the gap. SoFi offers no fee student loans with competitive interest rates for qualifying borrowers.

Check out SoFi’s private student loan options.


SoFi Loan Products
SoFi loans are originated by SoFi Lending Corp. or an affiliate (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license # 6054612; NMLS # 1121636 . For additional product-specific legal and licensing information, see SoFi.com/legal.

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs. SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.

External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Third Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third party trademarks referenced herein are property of their respective owners.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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Should I Pay Off Debt Before Buying a House?

Ready to buy your own home? There’s a lot to consider, especially if this is your first time applying for a mortgage and you’re carrying debt. Debt is not necessarily a dealbreaker by any means.

Is it a good idea to pay off debt or save for a house? Is it possible to do both? Understanding how the home loan process works could help you make those decisions—and avoid mistakes that could keep you from getting your dream home.

When a lender considers you for a mortgage, you can expect debt to be a factor when it comes to how much you’ll be able to borrow, the interest rate you might pay, and other terms of the loan.

Understand Your Debt-to-Income Ratio

When lenders want to be sure borrowers can responsibly manage a mortgage payment along with the debt they’re carrying, they typically use a formula called the debt-to-income ratio (DTI).

The DTI ratio is calculated by dividing a borrower’s recurring monthly debt payments (future mortgage, credit cards, student loans, car loans, etc.) by gross monthly income.

The lower the DTI, the less risky borrowers may appear to lenders, who traditionally have hoped to see that all debts combined do not exceed 43% of gross earnings.

Here’s an example:

Let’s say a couple pays $600 combined each month for their auto loans, $240 for a student loan, and $200 toward credit card debt, and they want to have a $2,000 mortgage payment. If their combined gross monthly income is $8,000, their DTI ratio would be 38% ($3,040 is 38% of $8,000).

The couple in our example is on track to get their loan. But if they wanted to qualify for a higher loan amount, they might decide to reduce their credit card balances before applying.

That 43% threshold isn’t set in stone, by the way. Some mortgage lenders will have their own preferred number, and some may make exceptions based on individual circumstances. Still, it can be helpful to know where you stand before you start the homebuying process.

Consider How Debt Affects Your Credit Score

A mediocre credit score doesn’t necessarily mean you won’t be able to get a mortgage. Lenders also look at employment history, income, and other factors when making their decisions. But your credit score and the information on your credit reports likely will play a significant role in determining whether you’ll qualify for the mortgage you want and the interest rate you want to pay.

Typically, a FICO® Score of 620 will be enough to get a conventional mortgage, but someone with a lower score still may be able to qualify.

Or they might be eligible for an FHA- or VA-backed loan. The bottom line: The higher your score, the more options you can expect to have when applying for a loan.

A few factors go into determining a credit score, but payment history and credit usage are the categories that hold the most weight. Payment history takes into account your record of making on-time or late payments, or if you’ve filed for bankruptcy.

Credit usage looks at how much you owe in loans and on your credit cards. An important consideration in this category is your credit utilization rate, which is how much revolving credit you have available compared with how much you’re using. The lower your rate, the better. Most lenders prefer a utilization rate under 30%.

Does that mean you should pay off all credit card debt before buying a house?

Nope. Debt isn’t the devil when it comes to your credit score. Borrowers who show that they can responsibly manage some debt and make timely payments can expect to maintain a good score. Meanwhile, not having any credit history at all could be a problem when applying for a loan.

The key is in consistency—so borrowers may want to avoid making big payments, big purchases, or balance transfers as they go through the loan process. Mortgage underwriters may question any noticeable changes in your credit score during this time.

Don’t Forget, You May Need Ready Cash

Making big debt payments also could cause problems if it leaves you short of cash for other things you might need as you move through the homebuying process, including the following.

Down Payment

Whether your goal is to put down 20% or a smaller amount (the median down payment for recent buyers was 12%, according to a 2021 National Association of Realtors® report), you’ll want to have that money ready when you find the home you hope to buy.

Closing Costs

The cost of home appraisals, inspections, title searches, etc., can add up quickly. Average closing costs are 2% to 5% of the full loan amount.

Moving Expenses

Even a local move can cost hundreds or even thousands of dollars, so you’ll want to factor relocation expenses into your budget. If you’re moving for work, your employer could offer to cover some or all of those costs, but you may have to pay upfront and wait to be reimbursed.

Remodeling and Redecorating Costs

You may want to leave yourself a little cash to cover any new furniture, paint, renovation projects, or other things you require to move into your home.

Be Aware of Housing Market Trends

Trends in the housing market may help you with prioritizing saving or paying down debt. So it’s a good idea to pay attention to what’s going on with the overall economy, your local real estate market, and real estate trends in general.

Here are some things to watch for.

Interest Rates

When interest rates are low, homeownership is more affordable. A lower interest rate keeps the monthly payment down and reduces the long-term cost of owning a home.

Rising interest rates aren’t necessarily a bad thing, however, for buyers who’ve been struggling to find a home in a seller’s market. If higher rates thin the herd of potential buyers, a seller may be more open to negotiating and lowering a home’s listing price.

Either way, it’s good to be aware of where rates are and where they might be going.

Inventory

When you start your home search, you may want to check on the average amount of time homes in your desired location sit on the market. This can be a good indicator of how many houses are for sale in your area and how many buyers are out there looking. (A local real estate agent can help you get this information.)

If inventory is low and buyers are snapping up houses, you may have trouble finding a house at the price you want to pay. If inventory is high, it’s considered a buyer’s market and you may be able to get a lower price on your dream home.

Price

If you pay too much and then decide to sell, you could have a hard time recouping your money.

The goal, of course, is to find the right home at the right price, with the right mortgage and interest rate, when you have your financial ducks in a row.

If the trends are telling you to wait, you may decide to prioritize paying off your debts and working on your credit score.

Have debt? See how a credit card consolidation
loan can help get you on track to pay off your debt.


Remember, You Can Modify Your Mortgage Terms

If you already have a mortgage, you can make some adjustments to the original loan by refinancing to different terms.

Refinancing can help borrowers who are looking for a lower interest rate, a shorter loan term, or the opportunity to stop paying for private mortgage insurance or a mortgage insurance premium.

Consider a Debt Payoff Plan

If you decide to make paying down your debt your goal, it can be useful to come up with a plan that gets you where you want to be.

Because here’s the thing: All debt is not created equal. Credit card debt interest rates are typically higher than other types of borrowed money, so those balances are more expensive to carry over time. Also, lenders generally look at loans for education as “good debt” and credit card debt as “bad debt,” which means they might be more understanding about your student loan debt when you apply for a mortgage. (Car loans are usually categorized as somewhere in the middle of the two.)

As long as you’re making the required payments on all your obligations, it may make sense to focus on dumping some credit card debt.

The Takeaway

Should you pay off debt before buying a house? Not necessarily, but you can expect lenders to take into consideration how much debt you have and what kind it is. Considering a solution that might reduce your payments or lower your interest rate could improve your chances of getting the home loan you want.

When you consolidate your credit card debt, you pay off each one of your credit cards with a single fixed-rate personal loan with a set term. The interest rate may be lower than the rates on your credit cards.

Taking control of your debt can bring you one step closer to owning a home. View your rate on a SoFi Personal Loan.


SoFi Loan Products
SoFi loans are originated by SoFi Lending Corp. or an affiliate (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license # 6054612; NMLS # 1121636 . For additional product-specific legal and licensing information, see SoFi.com/legal.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances. Third Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third party trademarks referenced herein are property of their respective owners.

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6 Ways to Save Money for Grad School

Figuring out how to save money for graduate school can be overwhelming, especially if you are still paying off loans for your undergrad degree. But finding the money to pay for school doesn’t always mean you have to pick up a side hustle or take on more debt. It is possible to save for graduate school if you plan ahead and adjust your current budget. Here are some ways to help save up.

Strategies to Save Up for Grad School

1. Splitting Up Your Paycheck

If you are currently working and get regular paychecks, one of the simplest ways to start saving more is to automate as much of the process as possible. If your workplace has direct deposit, you could contact HR and see if you are able to add another bank account, and designate a certain amount from every paycheck to go into your savings account.

It can be as much or as little as you’d like, but putting the money directly into savings makes it harder to spend right away. By automatically transferring the money into your savings account, you eliminate the hassle of manually parting with it.

Recommended: How to Automate Savings

If your company doesn’t offer the option to split your paycheck to multiple accounts, you can contact your bank directly or check online to see if they offer a recurring transfer. Banks are typically able to set up transfers for you automatically on your payday.

To decide how much money you’re able to save each month, review your monthly budget before starting. If you don’t have one, put one together.

2. Opening a Separate Savings Account

While you shouldn’t necessarily open a new account for every savings goal in your life, as that could get messy fast, setting up a new, separate savings account with your bank for grad school is another way to potentially maximize your money.

Opening a new account with a specific goal could help you keep track of the goal and make your progress tangible. Having a separate account specifically for school can also help you manage and keep track of spending on books and other school-related costs.

These first two ideas can work together to get you progressing on your savings goal. It can be intimidating to commit to allocating some of your budget for savings, but if you make the process regular and automatic, you may be surprised to find how little you miss that extra cash.

3. Don’t Forget Financial Aid

The Free Application for Federal Student Aid is not just for student loans—you could also receive work-study and grants by filling out the FAFSA®. Just like undergraduate applications for federal financial aid, students must demonstrate need, must be a U.S. citizen or eligible noncitizen, and be enrolled or accepted as a regular student pursuing a degree beyond a bachelor’s (here’s the eligibility criteria right from the Department of Education .

However, when graduate students fill out the FAFSA, they may be considered independent, meaning their parents’ income is no longer taken into consideration.

Recommended: Independent vs Dependent Student: Which One Are You?

For some people, this might actually mean they are eligible for more financial aid as an independent individual. The amount a student is awarded will be based on factors including their income and financial assets. Students cannot be in default on a prior student loan to be eligible for additional aid.

Regardless of dependency status, graduate students may be eligible to receive PLUS Loans. These unsubsidized loans can be taken out in amounts up to the cost of attendance, but be aware you can’t have an adverse credit history to qualify.

There’s also the option of financial aid that isn’t typically repaid, in the form of scholarships or other grants, or scholarships from your state based on field of study, interest, or school type.

File your FAFSA as soon as possible after October 1, the year before each enrollment period. Since there are limited funds, the sooner you file, the better chance you may have of getting the most aid possible.

4. Checking With Your Current Employer

Even if you are not in a career where your employer is expected to pay for a graduate degree, a lot of companies may offer some contribution to ongoing education if it’s possible to show that it will be relevant to your job.

Tuition reimbursement varies depending on your company and industry, but some may offer tuition assistance to their employees. While it might not cover your entire graduate school cost, a tuition reimbursement benefit from your company could significantly lower the amount you need for school, which in turn could lower your dependence on loans.

If you have existing student loan debt from your undergraduate education, check to see if your company offers employees a match (up to a certain amount yearly) on payments made toward student loan debt every year. In this way, employers can make a regular contribution to help with your student loan balance, while you make your regular payments, too.

5. Considering Schools Abroad

Schools in Europe, South America, and Africa may be significantly less expensive than universities in the United States. But, before enrolling in graduate school abroad, make sure you understand how your industry will accept and transfer over any foreign degrees. You’ll want to make sure that your grad school degree is a decent ROI.

While the cost of living might be higher in some other countries, international graduate programs can also save you time; some PhD programs in Europe are only three to four years, as compared to six or seven in the U.S.

6. Refinancing Current Student Loans

If you are currently paying off undergraduate student loans, the idea of juggling paying for grad school and paying off undergrad loans may seem daunting. It’s helpful to get your current debt situation under control before saving for graduate school. One option that could potentially result in monthly savings is student loan refinancing.

Refinancing your student loans could potentially result in a lower interest rate, which could mean lower monthly payments (depending on the loan term), potentially freeing up room in your monthly budget. A lower interest rate could also mean spending less money over the life of the loan.

If you want to start saving for graduate school, refinancing existing loans and putting any difference in what you paid before toward savings could be one way to boost your savings.

It’s important to know that loan refinancing means you’re no longer eligible for federal student loan forgiveness, deferment, and income-driven repayment. But, some private lenders, including SoFi offer forbearance options for students who are in graduate school.

A lower overall interest rate can help you with your goal of saving money to pay for graduate school, helping to make your savings goals more manageable as you embark on this exciting next step in your career.

The Takeaway

Graduate school doesn’t necessarily mean taking on more debt. Those looking to focus their savings plan for graduate school can review their monthly budget and automate as much of their savings as possible. Additional options to pay for college include federal student aid including federal student loans, scholarships, grants, and work-study. Some students may even consider pursuing their graduate degree abroad to attend a more affordable university.

Refinancing is an option that could help students with undergraduate loans reduce their interest rate. In the case when savings and federal aid isn’t enough to pay for grad school, private student loans may be an option. Private student loans may not offer the same benefits as federal student loans (like income-driven repayment plans or protections for borrowers facing financial hardship), so they are generally borrowed after all other sources of funding have been exhausted.

SoFi offers competitive rates on both refinanced loans and private student loans. Plus, borrowers who lose their job through no fault of their own may qualify for SoFi’s Unemployment Protection, which allows them to temporarily pause their loan payments.

Going to graduate school and want to learn about how loan refinancing could help you? At SoFi, pre-qualifying for student loans or refinancing is easy and convenient—you’ll get your rates in a matter of minutes.


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SoFi loans are originated by SoFi Lending Corp. or an affiliate (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license # 6054612; NMLS # 1121636 . For additional product-specific legal and licensing information, see SoFi.com/legal.

SoFi Student Loan Refinance
IF YOU ARE LOOKING TO REFINANCE FEDERAL STUDENT LOANS PLEASE BE AWARE OF RECENT LEGISLATIVE CHANGES THAT HAVE SUSPENDED ALL FEDERAL STUDENT LOAN PAYMENTS AND WAIVED INTEREST CHARGES ON FEDERALLY HELD LOANS UNTIL THE END OF JANUARY 2022 DUE TO COVID-19. PLEASE CAREFULLY CONSIDER THESE CHANGES BEFORE REFINANCING FEDERALLY HELD LOANS WITH SOFI, SINCE IN DOING SO YOU WILL NO LONGER QUALIFY FOR THE FEDERAL LOAN PAYMENT SUSPENSION, INTEREST WAIVER, OR ANY OTHER CURRENT OR FUTURE BENEFITS APPLICABLE TO FEDERAL LOANS. CLICK HERE FOR MORE INFORMATION.
Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income-Driven Repayment plans, including Income-Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs. SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.

External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Third Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third party trademarks referenced herein are property of their respective owners.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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Should Parents Cosign on Student Loans?

If your child chooses to get a private student loan, they will most likely need to have a cosigner. Should parents cosign on student loans? That depends on your tolerance for risk, your child’s projected ability to repay the loan, and if it makes sense for your family.

Cosigning for a student loan has pros and cons. There are also alternatives that can help bridge the gap between education costs and what you’re able to pay. Here’s an overview of some key facts to know about cosigning on private student loans.

Why are Student Loans Cosigned so Often?

It’s no secret that the cost of college education has skyrocketed. The annual tuition for a private, nonprofit college has tripled to $37,200 in the last 20 years. And that doesn’t include room, board, or any other fees. Add those in and you can expect to pay an average of $53,949 a year for a private, nonprofit college. Prices for public universities have also increased, with the current annual in-state tuition at a four-year, public university at $9,580. Room, board, and fees average an additional $16,284, for a total average annual cost of $25,864.

And when savings, federal student loans, federal work-study, and scholarships or grants can’t fill the gap, students may look to private lenders to help them cover the rest. Unfortunately, students just starting out usually don’t have the credit history needed to get a loan from a private lender, so cosigners sometimes step in.

But do students have to have a cosigner for a private student loan? Almost always. Since many lenders won’t lend money to young adults with no or little credit history, they typically require cosigners. Roughly 91% of all private undergraduate student loans have a cosigner.

What Are the Downsides to Cosigning My Child’s Loan?

If you’re looking to privately fund your child’s education costs, it means they likely need the help to pay for college, just like many Americans do. But cosigning for your child’s private student loan is not without potential repercussions.

One of the chief considerations before cosigning concerns your relationship with your child. If something goes wrong—missed payments, extended unemployment, or worse, default—the potential for financial stress could create the possibility of misunderstandings and hurt feelings. If your relationship with your child is already tenuous, bringing financial stress into it will likely not help.

In addition, cosigning could put your own finances at risk. You may have the most responsible young adult in the whole state, but if something goes awry and the loan goes into default, the lender may sue you or hire a collection agency to try to recoup the debt.

A default might also tarnish your credit score. Simply signing the loan also affects your score. Even if you’re not the one making payments, you’re still responsible for the loan, according to the major credit bureaus.

What Are Alternatives to Cosigned Loans?

The First Step for Federal Aid: FAFSA®

Do parents have to cosign a private student loan? The answer in the previous section was “almost always.” The “almost” part of that answer is “not if they can find other sources of funding.” Scholarships and grants, which don’t have to be repaid, are a good place to start, but they often don’t cover the entire cost of an entire college education. The first source of funding that should be exhausted before any others is federal student aid .

Filling out the Free Application for Federal Student Aid (FAFSA®) is the first step to figuring out how much federal (and frequently state) financial assistance your child is eligible for. You’ll add your financial information that will determine the amount of federal assistance, which includes Direct Subsidized Loan, Direct Unsubsidized Loans, and other student aid from the federal government, like grants and work-study. Some states and colleges also base merit aid on FAFSA information, so the application is an important one for all types of financial aid, not just federal.

Building Their Credit Score

There are also some other pathways to consider when trying to find loans without a cosigner. One good idea is to have your child start building their credit history. A credit score is typically enhanced over time as the record of their successful payments grows, along with other factors like their outstanding debt, credit mix, and more.

Your student might start by either getting a secured credit card at a credit union or other financial institution, then showing they can make timely monthly payments on a purchase.

If your student is trustworthy and mature, you could also consider adding them as an authorized user to a credit card you already have. You’ll be responsible for making the monthly payments, but they could benefit from your financial behavior.

Scholarships

Like the real estate mantra concerning location, the college payment mantra might be, “Scholarships, scholarships, scholarships!” Money you don’t have to pay back? Yes, please.

The FAFSA will help colleges determine what federal student aid, scholarships, and grants your child might qualify for, but don’t let your student stop there.

Scholarships come in all sizes and from diverse sources, including local and national organizations, heritage associations, and various writing and other contests sponsored by nonprofits and other organizations. It might help to look at groups that your family might be closely associated with, such as unions, professional associations, or alumni organizations.

Keep in mind that your child can apply for scholarships while they are still in college, because some are tied to college majors, and your student is likely to have settled on a major after the first year or two. This could open up scholarship options that couldn’t be considered before they declared a major.

Budgeting

You might also be able to forego cosigning a student loan by making strategic decisions about education costs. Can your student reduce the overall cost of college by ditching the meal plan, living off campus, or even attending a significantly less expensive college?

Or, instead of paring down expenses, maybe your student could consider boosting their income to avoid the need for a cosigner on a student loan. One idea might be to take a year off to work—this may be enough to close the gap, avoiding the need for a loan altogether.

Loans for Parents

Parents who don’t mind shouldering more of the cost can also take out their own federal student loans with the Direct PLUS Loan , sometimes referred to as a “parent PLUS loan.”

Even though your student benefits from the loan, they are not the borrower and you’ll be solely responsible for paying it back. Some parents may consider working out a repayment arrangement between themselves and their student. If this will be the expectation, however, it’s a good idea to discuss the arrangement with your student before taking out this type of loan.

Direct PLUS Loans can also be taken out by graduate or professional students. Whether a parent or a graduate student, there is a downside for the borrower. The interest rate for Direct PLUS Loans is often higher when compared to other federal student loans—6.28% for the 2021-2022 school year. But you won’t be asking yourself, “Should a parent cosign a student loan?” because you’re helping fill the gap without depending on your student to pay the loan back.

The Takeaway

There are options available to eligible students before considering a private student loan. However, if all other options have been exhausted, a private student loan can be a good choice to help your child complete their college education.

SoFi Private Student Loans allow cosigners and have low rates, no fees, and flexible repayment options. And when opting for automated payments from your checking or savings account, you could be eligible for an interest rate reduction.

Find your rate in just 3 minutes with an easy online application.


SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs. SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change. SoFi Lending Corp. and its lending products are not endorsed by or directly affiliated with any college or university unless otherwise disclosed.

SoFi Loan Products
SoFi loans are originated by SoFi Lending Corp. or an affiliate (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license # 6054612; NMLS # 1121636 . For additional product-specific legal and licensing information, see SoFi.com/legal.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s
website
.

External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Third Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third party trademarks referenced herein are property of their respective owners.

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