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A preferred provider organization (PPO) is a type of health care plan that offers lower out-of-pocket costs to members who use doctors and other providers who are part of the plan’s network.

These preferred providers have signed onto the network at a lower negotiated rate than they might charge outside of the network.

PPOs also offer members the flexibility to see providers outside of the plan’s network, although they will most likely pay more in out-of-pocket costs to do so.

To learn more about PPOs, and how this type of plan compares to other health insurance options, read on.

How Does PPO Insurance Work?

When you join a PPO health plan, you’re joining a managed care network that includes primary care doctors, specialists, hospitals, labs, and other healthcare professionals. PPO networks tend to be large and geographically diverse.

If you see a preferred provider, you will likely pay a copay, or you might be responsible for a coinsurance payment (after you meet the health care plan’s deductible).

While you are free to see any health care provider whether or not they are in the PPO network, if you see a provider outside of the network, you may pay significantly more in out-of-pocket costs. In return for flexibility, large networks, and low in-network cost sharing, PPO plans typically charge higher premiums than many other types of plans.

PPOs are a common, and often a popular, choice for employer-sponsored health insurance.

Recommended: Common Health Insurance Terms & Definitions

What Are the Costs of Going Out of the PPO’s Network?

If you see a provider who is not part of the plan’s network, you will likely be expected to bear more of the cost. PPOs typically use what’s called a “usual, customary, and reasonable” (UCR) fee schedule for out-of-network services.

Insurers calculate UCR fees based on what doctors in the area are charging for the same service you were provided.

If your doctor charges more than what your insurance company determines to be usual, customary, and reasonable, you most likely will be charged for the difference between the amount charged for the service and the amount covered by your insurer.

Depending on where you live and the service you received, this difference could be significant. It may also come as a surprise to policyholders who assume their medical costs will be covered and don’t fully understand the distinction between in-network and out-of-network providers.

A good way to avoid surprise charges with a PPO (or any health plan) is to talk to your provider and your insurer before you receive treatment about the total cost and what will be covered.

How PPOs Compare to Other Types of Health Care Plans

PPO plans are most often compared with health maintenance organizations (HMOs), another common type of managed care health plan.

HMOs typically offer lower premiums and out-of-pocket costs than PPOs in exchange for less flexibility.

Unlike a PPO, HMO members typically must choose a primary care physician from the plan’s network of providers. Care from providers out of the HMO network is generally not covered, except in the case of an emergency.

Also unlike a PPO, an HMO’s network of providers is usually confined to a specific local geographic area.

Another key difference between these two types of plans: HMO members typically must first see their primary care doctor to get a referral to a specialist. With PPOs, referrals are not usually required.

PPOs are also often compared to point of service (POS) plans.

POS plans are generally a cross between an HMO and a PPO. As with a PPO, POS members typically pay less for care from network providers, but may also go out of network if they desire (and potentially pay more).

Like an HMO, POS plans require a referral from your primary care doctor to see a specialist.

PPOs (as well as HMOs and POS plans) are very different from high deductible health plans, or HDHPs.

HDHPs charge a high deductible (what you would have to pay for health care costs before insurance coverage kicks in).

This means that you would need to pay for all of your doctor visits and other medical services out of pocket until you meet this high deductible. In return for higher deductibles, these plans usually charge lower premiums than other insurance plans.

You can combine a HDHP with a tax-advantaged health savings account (HSA). Money saved in an HSA can be used to pay for qualified medical expenses.

HDHPs are generally best for relatively healthy people who don’t see doctors frequently or anticipate high medical costs for the coming year.

Recommended: Beginner’s Guide to Health Insurance

What Are the Pros and Cons of PPO Insurance?

As with all health insurance options, PPOs have both advantages and disadvantages. Here are a few to consider.

Advantages of PPOs

•   Flexibility. PPO members typically do not have to see a primary care physician for referrals to other health care providers, and they may see any doctor they choose (though they may pay more for out-of-network providers).

•   Lower costs for in-network care. Out-of-pocket costs, such as copays and coinsurance, for care from in-network providers can be lower than some other types of plans.

•   Large provider networks. PPOs usually include a large number of doctors, specialists, hospitals, labs, and other providers in their networks, spanning across cities and states. As a result, network coverage while traveling or for college student dependents can be easier to access than with more restricted plans.

Disadvantages of PPOs

•   High premiums. In return for flexibility, PPO members can expect to pay higher monthly premiums than they may find with other types of plans.

•   High out-of-pocket costs for out-of-network care. Depending on where you live, the treatment you receive, and how your insurer calculates “usual, customary, and reasonable” fees, you may find you are responsible for a large portion of the bill when you receive care outside of the PPOs network.

•   Might be more insurance than you need. If you rarely see doctors and wouldn’t mind potentially switching doctors, you may be able to save money by going with an HMO or a HDHP.

The Takeaway

PPOs are a popular type of health plan because of the flexibility, ease of use, and wide range of provider choices they offer. PPO networks tend to be large and varied enough to include a patient’s existing doctors. If not, members still have the option of going out-of-network and receiving at least some coverage from a PPO. PPO members pay for this flexibility, however.

PPOs typically come with higher premiums, along with extra costs associated with out-of-network care. That can be prohibitive for many consumers.

Your employer’s benefits department or an experienced insurance agent or broker can help you compare PPOs to other types of health care plans and determine which choice is right for your health care needs and your budget.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

FAQ

What is a disadvantage of having an HMO?

One drawback of PPO plans is that they’re often more expensive than HMO plans. Monthly premiums are usually higher, and you’ll likely have to pay more out of pocket if you see doctors who are out of the plan’s network.

What does PPO mean?

PPO stands for preferred provider organization. It’s a type of health care plan that offers lower out-of-pocket costs to members who see health care providers who are part of the PPO plan’s network.

Is having a PPO worth it?

It depends. PPOs tend to have large networks, which can make them a good choice for someone who travels frequently within the U.S. or lives in two different states.

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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.

SOPRO-Q325-013

Money and your psyche can be deeply intertwined, and that’s where financial therapy can play a role. Financial therapy merges the emotional support of a psychotherapist with the money insights of a financial planner.

Working with a financial therapist can help clients begin to process their underlying feelings about money while optimizing behaviors related to their cash. This can minimize stress and anxiety, while honing plans for earning, spending, and saving more effectively. Financial therapists can also assist couples in overcoming differences in their money habits and their approaches to cash management. .

Read on to learn if this kind of professional counseling could help you, and, if that’s the case, what to expect from financial therapy and where to find a qualified professional.

What Is Financial Therapy?

A basic financial therapy definition is that it’s a practice that combines behavioral therapy with financial coaching. The goal is to help improve an individual’s feelings and behavior around money.

A certified financial therapist (or financial psychologist) can assist with issues such as money stress, overspending, or concerns about debt. But this differs from, say, a financial advisor who is helping you maximize your gain on investments or plan for your child’s future college expenses.

It also differs from financial coaching, which helps establish good money habits. Financial therapy can go deeper psychologically speaking. It can help a person work through childhood trauma related to money as well as money-related disorders.

How Financial Therapy Works

According to the Financial Therapy Association (FTA), financial therapy is a process informed by both therapeutic and financial expertise that helps people think, feel, and behave differently with money to improve overall well-being.

The profession sprang out of increasing evidence that money can be intrinsically tied to our hopes, frustrations, and fears, and also have a significant impact on our mental health.

What’s more, money can also have a major impact on our relationships. Indeed, research has shown that fighting about money is one of the top causes of conflict among couples.

And, while it might seem like bad habits that deplete your bank account and money arguments are things you can simply resolve on your own, the reality is that it’s often not that simple. That’s where financial therapy can help.

•   Many financial roadblocks, such as chronic overspending or constantly worrying about money, often aren’t exclusively financial. In many cases, psychological, relational, and behavioral issues are also at play.

•   Financial therapy can help patients recognize problematic behaviors, such as impulse buying. It also aims to help people understand how various relationships and experiences may have led them to develop those behaviors as coping mechanisms or to form unrealistic or unhealthy beliefs.

•   Along with offering practical financial advice, a financial therapist can reduce the feelings of shame, anxiety, and fear related to money. It can help people who are struggling to recommit to money goals.

The reasons why financial therapy can help are the same as why traditional psychological therapy can help: It can lead people to understand that they can do something to improve their situation. That, in turn, can instigate changes and healthier behaviors.

Like conventional therapy, the number of sessions needed will vary, depending on the situation. A financial therapy relationship can last from a few months to longer.

Generally, a financial therapist’s work is “done” when you feel your finances are orderly and you have the skills to keep them that way in the future.

Recommended: Tips for Recovering From Money Addiction

Financial Therapists vs. Financial Advisors

Financial advisors are professionals who help manage your money.

They are typically well-informed about their clients’ specific situations and can help with any number of money-related tasks, such as managing investments, brokering the purchase of stocks and funds, or creating a retirement plan.

However, psychological therapy is not why financial advisors are hired, nor is it their area of expertise.

If a person requires real emotional support or needs help breaking bad money habits, a licensed mental health professional, such as a financial therapist, should likely be involved.

A certified financial therapist (someone trained by the FTA) can work with you specifically on the emotional aspects of your relationship with money and provide support that gets to the root of deeper issues.

Due to the interdisciplinary nature of financial therapy, professionals who enroll in FTA education and certification include psychologists, marriage and family therapists, social workers, financial planners, accountants, counselors, and coaches. Some experts recommend being sure that the professional you work with is first and foremost a licensed therapist with a deep understanding of psychology.

Financial Therapy vs. Other Therapy

If you are having issues related to money (say, losing sleep due to anxiety or arguing with your partner about spending), you might think almost any mental health professional could help.

A financial therapist, however, can be your best bet in this situation. These professionals have special training and expertise related to how money can impact a person’s emotional wellness.

They also are also trained in techniques to help clients overcome issues related to money. In other words, they are laser-focused on the kind of emotional responses and problematic habits that crop up around money.

Do You Need a Financial Therapist?

If you’re considering whether a financial therapist could help you, you may want to think about your general relationship to money.

If you feel you have anxiety about money, or unhealthy behaviors and feelings when it comes to spending, budgeting, saving, or investing, you might benefit from exploring financial therapy. These behaviors can be a symptom of other negative habits related to mental health (feelings of low self-worth, for instance).

Keep in mind that it’s possible to have an unhealthy relationship with money even if your finances are good on paper and there’s plenty of cash in your savings account.

Top 4 Reasons People Seek Financial Therapists

Here’s a more specific look at why a person might benefit from financial therapy.

1. Avoiding Money Management

Some people hide from their finances. They don’t budget, don’t know exactly how much they earn, pay bills late (or not at all). Working with a financial therapist could expose the root of this behavior and improve financial management.

Recommended: Ways to Manage Money

2. Money Stress

Many people have anxiety around their money. This could involve worrying about how they will pay off their debt to worrying about going bankrupt, even though they are earning a good salary. Others may feel guilty about spending money or carry a lot of trauma about money from their childhood. A financial therapist can work to explore and resolve these emotions.

3. Fighting About Finances

If you often argue with your partner, friends, or other loved ones about money, you might find that a financial therapist can help you defuse this source of tension. It can help couples deal with what’s known as financial infidelity.

4. Poor Money Habits

Do you tend to “shop til you drop” when bored? Have you spent or gambled away your emergency fund? Do you overwork yourself in an effort to accumulate wealth? Do you tend to hop from one “get rich quick” scheme to another? A financial therapist could help you break these habits and develop new, beneficial ones.

These are some of the scenarios that a financial therapist could help you with.

Finding a Financial Therapist

Like choosing any therapist, you often need to shop around a bit to find the right fit — someone you feel you can relate to, trust, and you also feel understands you.

For those who may not have access to a financial therapy professional in their backyard, many offer services via video calls.

You can start your search with the Find A Financial Therapist tool on the FTA website, which features members and lists their credentials and specialties.

Your accountant or financial counselor might also be a good source of referrals.

As with choosing any other financial expert or mental health professional, it’s a good idea to speak with a few potential candidates. In your initial conversations with candidates, you may want to discuss the therapist’s training and specific area of expertise, as well as your needs and situation. This can help you assess how good a match they are.

It can also be a good idea to ask how long they have been providing financial therapy services, what their fees are, as well as if some or all of the fee may be covered by your medical insurance.

The Takeaway

Financial therapy merges financial with emotional support to help people deal with and improve stress, decision-making, and habit-forming related to money. If you frequently feel stressed and/or overwhelmed when you think about money (or you simply avoid thinking about money as much as possible), you might be able to benefit from at least a few sessions of financial therapy.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

What does a financial therapist do?

A financial therapist combines expertise in psychology and finances to help people improve their attitudes toward money and their habits relating to money. They can help individuals manage such issues as money anxiety, overspending, and financial infidelity.

Is financial therapy the same as financial planning?

Financial therapy and financial planning are not the same thing. Financial therapy can help a person improve their attitude toward money and their behaviors related to money. Financial planning is focused on budgeting, debt management, and growth of wealth.

Can therapy help with finances?

Therapy can help with finances. You might have stress related to money due to childhood trauma centered on finances. Or you might be compulsively overspending or ignoring your money due to emotions about such matters. Financial therapy could help you work through these and other issues.

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Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

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SOBNK-Q325-047

Savings accounts sometimes have withdrawal limits, such as no more than six outgoing transactions per month. That’s because savings accounts are fundamentally different from checking accounts.

Because money in a savings account is meant to primarily stay put and be added to, it earns interest. Checking accounts generally offer no interest or a nominal interest rate, because money typically flows in and out. Due to this distinction, there are sometimes withdrawal limits on savings accounts.

Here, you’ll learn more about savings withdrawal limits, why they exist, when they are applied, and how you might be able to avoid them.

How Many Times Can You Withdraw From Savings?

“How many times can I withdraw from savings?” is a common question. To help maintain the distinction between checking and savings accounts (and encourage people to save money), bank accounts traditionally come with savings account withdrawal limits. A federal rule called Regulation D used to limit certain types of transfers and withdrawals — known as “convenient transactions” — from a savings deposit account to no more than six a month.

That changed in April 2020, when the Federal Reserve removed the requirement that banks enforce the limit. However, some banks and credit unions have kept restrictions in place. They may charge a fee, transition your account to a checking account, or close it if you go over that amount.

💡 Quick Tip: Typically, checking accounts don’t earn interest. However, some accounts do, and online banks are more likely than brick-and-mortar banks to offer you the best rates.

Why Is There a Savings Withdrawal Limit?

Savings account withdrawal limits stem from Regulation D, mentioned above, which is a federal regulatory rule that sets standards for how banks and credit unions oversee savings deposits. But why are these guardrails in place? Some points to know:

•  One of the main reasons Regulation D exists is to ensure that banks and credit unions have the necessary amount of cash on hand to always cover customer withdrawals.

•  When you deposit any amount of money in your bank account, the bank uses most of that money for other things, such as consumer loans, credit lines, and home mortgages. (They most likely loan that money at a higher rate than the interest rate they pay you, the savings account depositor. That’s one of the ways banks make money.)

•  Banking institutions, however, face a legal requirement to have cash available to service customers. Withdrawal limitations help protect both banks and consumers.

•  One of the other motivations for Regulation D is to encourage consumers to see their transactional accounts, such as checking accounts, and savings accounts as separate.

•  A savings account ideally encourages long-term savings, whereas checking accounts enable short-term spending. In some cases, withdrawal limitations can help motivate consumers to prioritize saving overspending.

Recent Changes in Savings Account Withdrawal Rules

Because of the financial strain caused by the coronavirus pandemic, the Federal Reserve altered the rules regarding Regulation D in April 2020. Currently, depository institutions have the ability to suspend enforcement of the six transfer limit.

Regulation D

As you’ve learned, in the past, Regulation D was in place and enforceable in order to limit the number of transactions flowing out of savings accounts. This encouraged bank customers to keep money in savings accounts, hopefully save for their goals, and allow banks to use the funds on deposit, confident that the money wouldn’t constantly be flowing in and out.

Now, however, financial institutions can allow their customers to make an unlimited amount of convenient withdrawals and transfers from their savings accounts. The word “can” is important here.

Just because banks aren’t required to follow the six transaction limit anymore, however, doesn’t mean they won’t continue to penalize the account holder for going over that limit.

Some banks still enforce caps on the number of convenient transactions customers can make from their savings accounts.

It can be well worth your while to check in with your financial institution and find out what policies are in place regarding savings withdrawal limits.

💡 Quick Tip: Want a simple way to save more everyday? When you turn on Roundups, all of your debit card purchases are automatically rounded up to the next dollar and deposited into your online savings account.

Which Transactions Apply to the Cash Withdrawal Limit?

Only “convenient transactions” count towards the monthly withdrawal and transaction limits that consumers face when managing their savings account. But what exactly are convenient transactions?

Regulation D sees these types of transactions as convenient transfers:

•  Overdraft transfers

•  Automated clearing house (ACH) transfers, such as bill-pay

•  Electronic funds transfers (EFTs)

•  Transfers made by writing a check to a third party

•  Debit card transactions

•  Transfers or wire transfers made by phone, fax, computer, or mobile device.

Which Transactions Don’t Count Toward the Withdrawal Limit?

While the six transaction limit per month can sound fairly strict, it does not mean account holders can’t access their savings accounts more than six times a month.

Whatever type of savings account you have, there are less-convenient transfers you can make that do not count towards the monthly limit. These include:

•  Withdrawals or transfers made in-person at the bank.

•  Transfers and withdrawals made at the ATM.

•  A withdrawal made by asking the bank to send you a check.

Recommended: ATM Withdrawal Limits

Convenient Transactions

As mentioned above, Regulation D defines convenient transfers to include such transactions as:

•  Transfers, whether by check, electronic funds transfer, overdraft, or other means.

•  ACH transfers

•  Payments made with your debit card.

What If I Go Over The Savings Withdrawal Limit?

The penalty for exceeding the cap set by your bank for savings transactions will depend on your institution.

You may be charged a fee, and even if your financial institution charges a low (or no) fee for exceeding the cap on transactions per month, you may still want to watch how many withdrawals or transfers you make.

The reason: If there are excessive withdrawals from a savings account, financial institutions have the right to convert the savings account into a checking account or even close the account.

Savings Withdrawal Limit Fees

If you are charged a fee for too many convenient transactions, it might be called a “withdrawal limit fee” or “excessive use fee.” These fees tend to run anywhere from $3 to $5 per transaction, though some banks may charge more and others may not charge a fee.

In some cases, you might ask your bank and see if they would waive the fee.

3 Tips to Avoid Hitting Withdrawal Limits

If your financial institution does have withdrawal limits, here are a few ways to avoid fees.

Use Your Checking Account

One simple way to avoid overstepping savings account withdrawal limits, is to use your checking account for most of your transactions.

It can be easy to get your accounts mixed up when you are banking online or in an app. By learning which account is which as you transfer funds, you can minimize use of your savings account.

Do a Single Large Transfer to Checking

If you think you will need to use your savings account to make more than six withdrawals (or whatever your bank’s current transaction limit is) in a given month, consider making one substantial transfer from savings to checking at the beginning of the month.

You can then arrange to have your withdrawals or automatic bill payments taken right out of checking.

Try Work-Arounds If You Get Close to Your Limit

If you are already at your limit, you can avoid penalties by visiting the bank in person or using the ATM to initiate withdrawals or transfers from your savings account. (You may want to make sure, however, that you’re not triggering any out-of-network ATM charges.)

Opening a Bank Account with SoFi

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

How much can you withdraw from your savings account?

Individual banks set limits about withdrawals, both the number and the amount, often according to method (such as ATM withdrawals). Check with yours to learn the specifics.

Why can you only withdraw 6 times from savings?

Regulation D set the number of convenient transactions out of a savings account at six to encourage people to save and to leave their funds in the account, earning interest. The bank, in turn, could count on having a significant amount of those funds to use in their business activities. Although the requirement to enforce the six monthly withdrawals limit was removed by the Federal Reserve in 2020, some banks may still maintain withdrawal restrictions.

Can banks stop you from withdrawing money?

Your bank account can be frozen, which will stop you from withdrawing money. Your bank may do this if they think illegal activity is occurring, or if a creditor or the government requests it.

About the author

Jacqueline DeMarco

Jacqueline DeMarco is a freelance writer who specializes in financial topics. Her first job out of college was in the financial industry, and it was there she gained a passion for helping others understand tricky financial topics. Read full bio.

If you’re attending a public university that is not in your home state, establishing residency could significantly reduce the tuition bill. However, establishing residency for the sole purpose of qualifying for in-state tuition can be difficult. Generally, you need to be financially independent, live in the state for at least a year, and demonstrate that you intend to stay in order to be considered a resident of a new state.

Read on for a closer look at what it takes to establish residency where you go to college, whether or not it’s worth the effort, plus other ways to get a break on out-of-state tuition at a public university.

Establishing Residency

Each state has their own requirements for establishing residency. Requirements can also vary based on the university, which can add confusion to the process. Here are some of the general requirements that states and universities often require to determine residency:

•   Physical presence: Most states need you to be a resident for 12 consecutive months before you qualify for in-state tuition. The time to establish residency could be more or less, depending on the state.

•   Intent: Students generally must prove that they are living in a state for more reasons than just attending school.

•   Financial independence: Typically, students must prove they are financially independent and no longer supported by their parents.

3 Tips for Establishing Residency

Establishing residency can be difficult, but with these tips and a little legwork, you may be able to become a resident of the state where you go to college and, possibly, slash your tuition bill.

1. Relocate as Soon as Possible

Since most states require you to be a resident for 12 consecutive months, it makes sense to relocate as soon as you can. If you are currently enrolled in a school, and are hoping to establish residency, this could mean spending your summers on-campus or at the very least in that state. You may also need to rent or buy property, as well as pay income taxes in your new state.

In addition, you’ll likely have to cut ties to your home state and do things like change your voter registration.

2. Boost Your Reasons for Moving

You usually need to prove the reason you moved to the state wasn’t solely for getting in-state tuition.

There are a few things you can do to help prove intent:

•   Get a new driver’s license

•   Register a vehicle

•   Get a state hunting and/or fishing license

•   Open a local bank account

•   Get a local library card

Having any of these things in your old state may make it more difficult to establish residency in your new state.

3. You May Have to Distance Yourself from Your Parents

One of the common requirements for establishing residency is financial independence. This can make establishing residency extremely difficult for students between the ages of 18 and 22 who are still being supported by their parents. Becoming an independent student before the age of 24 can be challenging, both logistically and emotionally.

You may already be an independent student if:

•   You are married

•   You are a veteran

•   You have dependents of your own

•   You are a legally emancipated minor

If you are a dependent student, it’s worth weighing the pros and cons of establishing residency on your own. It could mean delaying graduation and paying for college without any help from your family.

Alternatives to Establishing Residency

Establishing residency in a new state isn’t always the only option for getting in-state tuition. Some states participate in regional reciprocity agreements that let students attend colleges in bordering states at a discount.

Here are a few examples:

1. New England Regional Student Program

Run by the New England Board of Higher Education, this program allows New England residents to enroll in out-of-state New England public colleges and universities at a discount. To be eligible for the program, students must enroll in an approved major that is not offered by the public colleges and universities in their home state.

This program includes six states: Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont.

2. Midwest Student Exchange Program

Through the MSEP , public institutions agree to charge students no more than 150% of the in-state resident tuition rate for specific programs. Some private colleges and universities offer a 10% reduction on their tuition rates.

Participating states include: Indiana, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, and Wisconsin. You can use its database to find colleges and universities participating in the program.

3. Southern Regional Education Board’s Academic Common Market

This program is similar to the New England Regional Student Program. It provides tuition savings to students in the 16 SREB states who are interested in pursuing degrees that are not offered by their in-state institutions. Students are able to enroll in out-of-state institutions that offer their degree program, but they pay the in-state tuition rate.

Participating states include: Alabama, Arkansas, Delaware, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, and West Virginia. You can use its database to find participating institutions.

4. Western Undergraduate Exchange

The Western Undergraduate Exchange is open to students from any of the 16 states that participate in the Western Interstate Commission for Higher Education (WICHE). The program allows students to enroll as nonresidents in more than 170 participating public colleges and universities and pay 150% (or less) of the enrolling school’s resident tuition.

Participating states and territories include: Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, North Dakota, Oregon, South Dakota, U.S. Pacific Territories and Freely Associated States, Utah, Washington, and Wyoming.

5. Exceptions for Students without Residency

Sometimes, residency rules are waived or are more lenient for students with special circumstances, including veterans or the children of military personnel.

There is no single database of these exceptions, so if you think you may qualify for one, check with the colleges you are interested in to see whether there are any exceptions and how you can apply for them.

Recommended: What Is the Cost of Attendance in College?

Types of Student Loans to Help Students Pay for College

Even if you’re able to establish residency in a new state and qualify for in-state tuition, you still may need help paying for college. Scholarships, grants, and work-study are types of financial aid that are not required to be repaid. Beyond that, student loans are also an option. There are two major categories for student loans: federal and private.

Federal Student Loans for Undergraduate Students

Federal student loans are funded by the U.S. government and are subject to a set of standard rules and regulations. The interest rate on federal loans is fixed, which means it remains the same over the life of the loan. These interest rates are set annually by Congress.

There are two main types of federal student loans that may be available to undergraduate students — Direct Subsidized or Direct Unsubsidized Loans.

Direct Subsidized student loans are awarded based on financial need. The interest on these loans is paid for (or subsidized) by the U.S. Department of Education during the following periods:

•   While the student is enrolled in school at least half-time

•   During the loan’s grace period, which is usually the first six months after the borrower graduates or drops below half-time enrollment

•   During qualifying periods of deferment, which is a period of time when loan payments are paused

Borrowers with unsubsidized loans are responsible for all of the interest that accrues on the loan, even while they are attending school.

To apply for a federal student loan, students must fill out the Free Application for Federal Student Aid (FAFSA®). Students interested in receiving financial aid must submit the FAFSA each year.

Private Student Loans

Private student loans are borrowed directly from private lenders like banks or other financial institutions. These loans may have fixed or variable interest rates. Unlike the federal student loans available to undergraduate students, which do not require a credit check, private lenders will generally review a borrower’s credit history, among other factors, when making their lending decisions.

In general, you’ll want to consider private student loans only after you’ve tapped any federal loan options available to you. This is because private lenders do not offer the same protections — such as income-driven repayment plans — to borrowers.

Recommended: Fixed Rate vs. Variable Rate Student Loans

The Takeaway

Establishing residency can help a student qualify for in-state tuition, which could lead to a substantial savings in tuition costs. Unfortunately, establishing residency for the purpose of qualifying for in-state tuition, especially as a dependent student, can be challenging. Some states, however, have reciprocity agreements with other states, which allows you to benefit from lower tuition without establishing residency in a new state.

Whatever tuition you end up paying, there are resources that can help make the cost of going to college more manageable, including financial aid and federal and private student loans.

If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.

FAQ

How do you get residency in a state for college?

To get residency for college, you must live in the state for a specified period, usually one year. You also need to establish ties, such as getting a job, registering to vote, and obtaining a state driver’s license. Check the specific requirements of the state and university.

Is there a way to avoid out-of-state tuition?

Yes, you can avoid out-of-state tuition by establishing residency in the new state, joining the military, participating in reciprocal agreements, or enrolling in a program that offers in-state rates to non-residents. Some universities also have exceptions for certain students.

Do I lose in-state tuition if I move?

If you move out of state, you may lose in-state tuition rates at your current university. You would typically be charged out-of-state tuition unless you establish residency in the new state or qualify for specific exemptions.

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student loans are not a substitute for federal loans, grants, and work-study programs. We encourage you to evaluate all your federal student aid options before you consider any private loans, including ours. Read our FAQs.

Terms and conditions apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. SoFi Private Student loans are subject to program terms and restrictions, such as completion of a loan application and self-certification form, verification of application information, the student's at least half-time enrollment in a degree program at a SoFi-participating school, and, if applicable, a co-signer. In addition, borrowers must be U.S. citizens or other eligible status, be residing in the U.S., Puerto Rico, U.S. Virgin Islands, or American Samoa, and must meet SoFi’s underwriting requirements, including verification of sufficient income to support your ability to repay. Minimum loan amount is $1,000. See SoFi.com/eligibility for more information. Lowest rates reserved for the most creditworthy borrowers. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change. This information is current as of 4/22/2025 and is subject to change. SoFi Private Student loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SOISL-Q325-015

Returning to college as an adult can be equally exciting and daunting. Whether you’re looking to take your career in a new direction or advance your current one, there’s a lot to plan for, including your course of study, applying to schools, and paying for college.

Adult learners — students who are age 25 or older — represent a significant share of college students across the U.S. To help navigate the process, this guide will walk you through how to go back to school as an adult.

Benefits of Returning to College as an Adult Learner

If you’re thinking, “I want to go back to school,” it’s important to figure out the reason to help narrow your search for degree programs and get an idea of what college might cost.

Going back to school at 25 or older is increasingly common, whether to achieve personal goals, develop new skills, or improve job prospects. According to the National Student Clearinghouse Research Center, about 2 million undergraduates aged 25 and older were enrolled at four-year institutions during the spring 2024 semester.

Those considering going back to school as an adult for a master’s or doctoral degree, will find plenty of like-minded students. There were more than 1.3 million graduate students aged 30 and older enrolled across the U.S. in 2024.

If you’re worried about what returning to school will cost, especially if you’re already in the process of repaying student loans from your first time around, getting your degree may enable you to earn a higher salary. Not only that, there are ways to manage your student loans, including student loan refinancing, which could help you get a lower interest rate if you qualify, thus lowering your monthly payments.

Here are a few top reasons why adults might decide to go back to school.

Career Advancement

Adults who are in the workforce might consider returning to school to learn in-demand skills or attain credentials to help advance in their current field or at their company. Some employers may even help cover the cost of tuition as an employee benefit. Check with your HR department.

If you’re planning to go back to school to improve your career prospects, consider how a degree program is valued at your employer and within the field more broadly.

Changing Careers

Perhaps your current job isn’t panning out the way you’d hoped, or there’s another career path you feel passionate about. Going back to school could be a wise move to transition to a career in a different field or sector.

Consider the level of education required for your chosen new profession, plus how your prior education or work experience can be leveraged to help you along the way.

Recommended: Financial Aid for a Second Bachelor’s Degree

Personal Fulfillment and Intellectual Stimulation

Returning to college as an adult has pros and cons, but can be a deeply fulfilling experience, offering a chance to pursue long-held passions and interests that may have been set aside due to life’s demands. Whether it’s a love for literature, a fascination with science, or a desire to explore new artistic avenues, higher education provides a structured environment to delve into these subjects with depth and rigor.

College courses also offer intellectual stimulation that can reignite your curiosity and keep your mind sharp. Engaging in academic discussions, critical thinking, and problem-solving can provide a fresh perspective on both personal and professional challenges.

Time Savings of Online Learning

One of the most compelling reasons for adults to return to college is the flexibility and time savings offered by online learning. Unlike traditional on-campus programs, online courses allow you to study at your own pace and on your own schedule. This is particularly beneficial for those juggling work, family, and other commitments.

Additionally, online learning eliminates the need for commuting, which can save a significant amount of time and reduce stress. Without the daily travel to and from a physical campus, you can allocate more time to studying, working, or spending quality time with family and friends.

Recommended: Tips for Taking Online Classes Successfully

Increased Earning Potential

A higher education is correlated with a higher salary. Most of the highest-paying jobs in the U.S. require at least a bachelor’s degree. Going back to finish your degree or earn an advanced degree could help you make significantly more in the long run.

In the third quarter of 2024, median weekly earnings were $946 for high school graduates, as compared to $1,533 for those with a bachelor’s degree and $1,916 for advanced degree holders.

Going to trade school as an adult can also pay off. There are numerous high-paying vocational jobs for those who have proper training and certification.

Networking Opportunities

Returning to college as an adult can provide valuable networking opportunities that can significantly enhance your career. Engaging with fellow students, many of whom may be professionals in various fields, can lead to new connections and collaborations.

These relationships can open doors to job opportunities, partnerships, and mentorships, which can be instrumental in advancing your career and expanding your professional horizons.

Recommended: What Should I Do After My Master’s Degree?

Skill Development

Whether you’re looking to pivot to a new career or advance in your current field, higher education offers specialized courses and programs that can equip you with the knowledge and expertise you need. These skills can make you more competitive in the job market and better prepared to take on new challenges.

Additionally, college provides a structured environment for hands-on learning and practical experience. Many programs offer internships, projects, and real-world applications that allow you to apply what you’ve learned in a practical setting. Skill development through college can be a transformative investment in your personal and professional growth.

Setting a Positive Example for Your Children

By pursuing higher education, you demonstrate the value of lifelong learning and the importance of setting and achieving goals to your children.

This can inspire your children to take their own education seriously and to see the benefits of hard work and dedication. Seeing you commit to personal growth can motivate them to do the same, fostering a culture of learning and ambition within your family.

Financial Benefits and Opportunities

Going back to college can lead to significant financial benefits. Higher education often results in better job prospects and higher earning potential. Many industries require advanced degrees or specialized certifications for promotions and higher-paying positions, and obtaining these credentials can open up new career paths and opportunities.

Additionally, further education can equip you with the skills and knowledge needed to start your own business or pursue entrepreneurial ventures, potentially leading to greater financial independence and success.

Financing Your Return to College

If you’re wondering how to pay for college as an adult learner, there are multiple forms of financial aid you may be eligible for, including scholarships, grants, federal student loans from the government, and private student loans from private lenders like banks, credit unions, and online lenders.

To receive federal financial aid, you’ll need to fill out the Free Application for Federal Student Aid, better known as the FAFSA®. After submitting the FAFSA, you may qualify for Federal Direct Subsidized Loans, Direct Unsubsidized Loans, or Direct PLUS Loans. These loans have fixed interest rates and come with federal benefits such as income-driven repayment plans and deferment options.

Completing the FAFSA is typically required to be eligible for other types of financial aid as well, including private scholarships, school-based aid, and state assistance. When browsing scholarships and state assistance programs, take note of eligibility requirements and submission deadlines to help inform which opportunities you apply for and when.

After you’ve tapped into all the federal aid options available, you have the option to fill any funding gaps with private student loans. These loans require a credit check — typically, the stronger your credit, the lower the interest rate you may get. And remember that you can always refinance private student loans later on to try to get a lower interest rate or more favorable terms. Our student loan refinance calculator can help you see what you might save by refinancing.

Recommended: 6 Ways to Save Money for Grad School

The Takeaway

It’s never too late to go back to school and achieve your educational and professional goals. Having a concrete plan can help adult learners get the most out of the time and money they invest in going back to school. There are multiple factors to consider, including a school’s academic reputation, course schedules, online vs. in-person learning, and financial aid.

If you have existing student loans, you might consider student loan refinancing to potentially reduce your payments, which could make it more affordable to go back to school. Just be aware that refinancing federal student loans makes them ineligible for federal programs and protections.

Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.

FAQ

Can I work while attending online college?

Yes, you can work while attending online college. Online programs offer flexibility, allowing you to manage your schedule around work commitments. However, balance is key to ensure you can handle both responsibilities effectively.

What should I consider before going back to college online?

Before going back to college online, consider your time management skills, financial resources, and the support system you have in place. Evaluate the program’s reputation, accreditation, and whether it aligns with your career goals. Also, assess your technology access and comfort level with online learning.

How can I pay for college as an adult student?

As an adult student, you can pay for college through financial aid, scholarships, grants, and student loans. Consider employer tuition assistance, savings, and part-time work, as well.

Is it financially worthwhile to pursue further education after graduation?

Pursuing further education can be financially worthwhile if it leads to higher-paying job opportunities or career advancement. Consider the cost, potential income increase, and time commitment. Research the return on investment for your specific field of interest.

How can returning to college help advance my career?

Returning to college can advance your career by enhancing your skills, knowledge, and qualifications. It can open doors to new job opportunities, higher positions, and increased earning potential. Networking with peers and professionals also provides valuable connections and insights.

Photo credit: iStock/Hispanolistic

SoFi Student Loan Refinance
Terms and conditions apply. SoFi Refinance Student Loans are private loans. When you refinance federal loans with a SoFi loan, YOU FORFEIT YOUR ELIGIBILITY FOR ALL FEDERAL LOAN BENEFITS, including all flexible federal repayment and forgiveness options that are or may become available to federal student loan borrowers including, but not limited to: Public Service Loan Forgiveness (PSLF), Income-Based Repayment, Income-Contingent Repayment, extended repayment plans, PAYE or SAVE. Lowest rates reserved for the most creditworthy borrowers. Learn more at SoFi.com/eligibility. SoFi Refinance Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.