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Q: What Happens if You Own Shares of a Company That Goes Private?

If shareholders approve a tender bid to take a public company private, they’ll each receive a payment for the number of shares that they’re giving up. Typically, private investors pay a premium that exceeds the current share price and shareholders receive that money in exchange for giving up ownership in the company.

Mar

2024

What Happens When a Public Company Goes Private?

What Happens When A Company Goes Private?

By Brian O'Connell | Growing Wealth, invest, Investing | Comments Off

While there are plenty of benefits to going public, there are also some downsides to being listed on a major stock exchange. Public companies must abide by strict government compliance and corporate government statutes and answer to shareholders and regulatory bodies. Plus they’re subject to the whims of the broader stock market on a regular basis.

So, public companies can opt to go private and delist from a public stock exchange. What happens when a public company goes private? Here’s what you need to know about that process.

Table of Contents

What Is Going Private?
What Happens if You Own Shares of a Company That Goes Private?
Why a Company May Go Private
How to Take a Company Private
Pros and Cons of Going Private

What Is Going Private?

When a company goes from public to private, the company is delisted from a stock exchange and its shareholders can no longer trade their shares in a public market. It also means that a private company no longer has to abide by the Sarbanes-Oxley Act of 2002. That legislation required publicly-traded companies to accommodate expansive and costly regulatory requirements, especially in the compliance risk management and financial reporting areas. (The legislation was created by lawmakers to help protect investors from fraudulent financial practices by corporations.)

Going private may also mean less pricing and financial stability, as private company shares typically have less liquidity than a public company traded on a stock exchange. That can leave a private company with fewer financing options to fund operations.

Going private also changes the way a company operates. Without public shareholders to satisfy, the company’s founders or owners can control both the firm’s business decisions and any shares of private stock. Private companies can consolidate power among one or a few owners. That can lead to quicker business decisions and a clear path to take advantage of new business opportunities.

By definition, a private company, or a company that has been “privatized”, may be owned by an individual or a group of individuals (i.e., a consortium) that also has a specific number of shareholders.

Unlike traditional stocks, investors in a private company do not purchase shares through a stock broker or through an online investment platform. Instead, investors purchase private equity shares from the company itself or from existing shareholders.

💡 Quick Tip: Before opening an investment account, know your investment objectives, time horizon, and risk tolerance. These fundamentals will help keep your strategy on track and with the aim of meeting your goals.

What Is Privatization?

Privatization is the opposite of an initial public offering. It’s the process by which a company goes from being a publicly traded company to being a private one. A private company may still offer shares of stock, but those shares aren’t available on public market exchanges. There’s no need to satisfy public shareholders and the company has less governmental oversight into its governance and documents.

(Note that privatization is also a term used to describe when a public or government organization switches to ownership by a private, non-governmental group.)

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What Happens if You Own Shares of a Company That Goes Private?

If shareholders approve a tender offer to take a public company private, they’ll each receive a payment for the number of shares that they’re giving up. Typically, private investors pay a premium that exceeds the current share price and shareholders receive that money in exchange for giving up ownership in the company.

This is the opposite of IPO investing, in which the public buys stock in a newly listed company, and private owners have a chance to cash out.

Why a Company May Go Private

Likely the biggest reason why a company would choose to go private are the costs associated with being a public company (largely to accommodate regulatory demands from local, state, and federal governments).

Those costs may include the following potential corporate budget challenges:

• The legal, accounting, and compliance costs needed to accommodate company financial filings and associated corporate governance oversight obligations.

• The costs needed to pay compliance, investor relations, and other staffing needs – or the hiring of third-party specialty firms to handle these obligations.

• The costs associated with paying strict attention to company share price – a public company always has to keep its eye on maximizing its stock performance and on keeping shareholders satisfied with the firm’s stock performance.

In addition, going private enables companies to free up management and staff to turn their attention to firm financial growth, instead of regulatory and compliance issues or shareholder concerns. Some public companies struggle to invest for the long-term because they’re worried about meeting short-term targets to keep their stock price up.

Going private also enables companies to keep critical financial and operational data away out of the public record — and the hands of competitors. Privatization could also help companies avoid lawsuits from shareholders and curb some litigation risk.

How to Take a Company Private

Typically, companies that go private work with either a private-equity group or a private-equity firm pooling funds to “buy out” a public company’s entire amount of publicly-traded stock. This typically requires a group of investors since, in most cases, it takes an enormous amount of financial capital to buy out a company with hundreds of millions (or even billions) of dollars linked to its publicly-traded stock.

Often a consortium of private equity investors gets help financing with a privatization campaign from an investment bank or other large financial institution. The fund usually comes in the form of a massive loan — with interest — that the consortium can use to buy out a public company’s shares.

With the funding needed to close the deal on hand, the private equity consortium makes a tender offer to purchase all outstanding shares in the public company, which existing shareholders vote on. If approved, existing shareholders sell their stock to the private investors who become the new owners of the company.

The goal is that the private investors will take the gains accrued through stronger company revenues and rejuvenated stock, to pay down the investment banking loan, pay off any investment banking fees accrued, and begin managing the income and capital gains garnered from their investment in the company. While this can take some time, the process of going private is much less intensive than the IPO process.

Company executives, meanwhile, can focus on growing the company. In many instances, newly-minted private companies may roll out a new business plan and prospectus that firm executives can share with potential shareholders, hopefully bringing more capital into the company. Sometimes private owners will plan to IPO the business again in the future.

💡 Quick Tip: Keen to invest in an initial public offering, or IPO? Be sure to check with your brokerage about what’s required. Typically IPO stock is available only to eligible investors.

Pros and Cons of Going Private

Taking a company private has both benefits and drawbacks for the company.

The Pros

In addition to lower costs, there are several other advantages to delisting a company.

• Establishing privacy. When a company goes public, it relinquishes the right to keep the company private. By taking a company private, it makes it easier to operate outside of the public eye.

• Fewer shareholders. Public companies don’t have to deal with external company sources that may make life difficult for company executives and may result in a loss of operational independence. Once a company goes private, the founders or new owners retain full control over the business and have the last word on all company decisions.

• A private company doesn’t have to deal with financial regulators. A private company doesn’t need to file financial disclosures with the U.S. Securities and Exchange Commission and other government regulatory bodies. While a private company may have to file an annual report with the state where it operates, the information is limited and financial information remains private.

The Cons

There are some disadvantages to taking a company private.

• Capital funding challenges. When a company goes private, it loses the ability to raise funds through the publicly-traded financial markets, which can be an easy and efficient way to boost company revenues. Yet by privatizing the company, publicly-funded capital is no longer an option. Such companies may have to borrow funds from a bank or private lender, or sell stock based on a state’s specific regulatory requirements.

• The owner may have more legal liability. Private companies, especially sole proprietorships or general partnerships, aren’t protected from legal actions or creditors. If a private company is successfully sued in court, the court can garnish the business owner’s personal assets if necessary.

• More powerful shareholders. While there are not as many shareholders at a private company, new owners, such as venture capitalists or private equity funds, may have strong feelings about the operational business decisions, and as owners, they may have more power over seeing their wishes carried out.

The Takeaway

Going private can be an advantage for companies that want more control at the executive level, and no longer want their shares listed on a public exchange. However, taking a company private may impact the company’s bottom line as corporate financing options thin out when public shareholders can no longer buy the company’s stock.

If a company you own stock in goes private, you will no longer own shares in that company or be able to buy them through a traditional broker. For investors, having different types of assets in an investment portfolio may be helpful in case something happens to or changes with one of them.

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FAQ

Is it good for a public company to go private?

Going private can have benefits for a public company, including lower costs related to legal, accounting, and compliance obligations, as well as costs associated with maximizing stock performance and keeping shareholders happy. In addition, going private may allow a company’s staff to focus more fully on financial growth, and keep critical company data out of the public record (and the hands of competitors).

However, there are potential drawbacks as well. For instance, a company may face capital funding challenges once it goes private since it can no longer raise funds through publicly-traded financial markets.

What happens to my private shares when a company goes public?

Once a company goes public (typically done through a process called an IPO, or initial public offering), your private shares become public shares, and they become worth the public trading price of the shares.

How long does it take for a public company to be private?

How long it takes for a public company to become private depends on the time it takes to complete the steps involved. For instance, the company has to buy out all of its publicly-traded stock; it usually works with a group of private investors to do this since the process is costly. Once they have the founding secured, a tender offer is made to purchase all outstanding shares in the public company, which the existing shareholders vote on. If that is approved, the shareholders sell their stock to the owners of the company. How long all this takes generally depends on the company and the specific situation.

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Mar

2024

A Guide on Splitting a Joint Bank Account

By Sarah Li Cain | Family Finances, Life & Career, money | Comments Off

Closing a joint account typically involves the same steps as you would take with many other types of bank accounts. Whether it’s due to ending a relationship, preventing any legal liabilities, or any other valid reason, understanding the right protocol to close or separate a joint bank account can help make the process much smoother.

Read on to learn the steps usually required to split a joint bank account.

What Is a Joint Bank Account?

A joint bank account is a checking, savings, or other type of deposit account owned by more than one person. When one is owned by two people (which is a common arrangement), both of your names will be on it. Either of you can conduct transactions such as make deposits, withdrawals, write checks, and take steps to close the account.

Almost anyone can be a joint account owner as long as they meet the requirements of the bank. Most commonly, spouses or an adult child and their elderly parent(s) tend to be joint account holders. Sometimes parents open a bank account with a child who is a minor as well.

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Steps to Separating Joint Bank Accounts

Splitting or closing a joint bank account is fairly straightforward, the first of which includes contacting your bank.

1. Call Your Bank

In most cases, the first step in how to separate a joint bank account is both joint owners agreeing to close the account. Contact your bank via any of their available methods to ask what it will need from you to be able to separate your joint account. Closing the account could mean the bank will check to see if you have any outstanding fees you owe. Or you might need to complete written documentation stating that you want to close the account.

2. Wait for Current Transactions to Clear

Consider holding off on any transitions until all pending transactions clear from your account. For example, you and your joint account holder both receive your paychecks via direct deposit. It’s probably best to wait until the payment clears before taking any additional steps to split a joint bank account. (That way, you can avoid having direct deposit go to a closed account.)

3. Withdraw Your Money

You should allocate the money in the account between the two of you, the joint owners. Take the time to determine whether you want to divide the money equally, a percentage based on the amount each of you contributed, or another fair agreement. Once you’re both happy with the arrangement, you can withdraw the money, either to another bank account or another option.

4. Apply for New Bank Account

In most cases, the bank won’t let you split a bank account into two. Instead, you will likely have to apply for a new individual bank account. You can choose to open one with the same financial institution or a new one. Follow the steps to open one, such as providing your personal details, Social Security number, and how you plan on making your initial deposit. (How much you need to open an account can vary depending upon the financial institution and kind of account you have chosen.)

Opening this new bank account while you’re waiting for the transactions to clear on the joint one may be a wise choice. It could take some time for certain transactions to kick in, such as your direct deposit payments and automatic payments on your utilities.

Ways to Close Joint Account

There are many ways you can separate your joint account separation, such as through the phone, in person, online, or via the app.

Online

Many banks and especially online vs. traditional banks let you close your joint account after you log into your account online. The steps to do so may vary: Some may require you to submit a form via an automated process, or you may have to contact customer service through secure messaging. Banks will most likely need both account owners’ permission, which could mean you sign in separately to e-sign documentation or provide some other verification that you each agree to the decision.

Through the Mail

Some banks, like the more traditional ones, may allow you to mail in a form with both your signatures to close the account. Contact your bank to see what forms you may need to fill out. You may need to take additional steps, such as notarizing the paperwork.

In Person

In the case of traditional brick and mortar banks, you may have to (or can) close your bank account in person. You may need to bring documentation such as your ID. It could also be more time-consuming, as you’ll need to speak with the joint account holder when they’re available, and the process at the bank could take some time.

Reasons to Close a Joint Bank Account

Closing a joint checking or savings account is a sound decision if you’re doing it for certain reasons, such as trying to minimize fees, prevent legal liabilities and if you end your relationship with the joint account owner. Before doing anything, carefully consider your decision first.

Prevent Penalties

If your joint account owner hasn’t been using the account responsibility and racking up a bunch of fees, it may be time to close the account. For example, perhaps the joint account owner keeps overdrafting an account or goes over the allotted debit card transactions per month. Before closing the account, you will need to make sure to pay off all penalties.

Minimize Fees

Some joint accounts can come with maintenance fees or even other features that you’re no longer happy with. Closing the existing account and opting for a new one (individual or joint) could save you some serious bucks.

Legal Liabilities

Remember, a joint account means that both owners own the money held there. If you’re unsure of the joint account holder or you believe they’re in legal trouble, it may be better to close the account. For instance, if someone sues your joint bank account owner, you could lose the assets in the account as well.

Relationship Ending

Joint bank accounts and divorce usually don’t coexist. If you and your spouse have joint bank accounts and you’re now splitting up, closing the bank account could help ensure your assets are divided equitably. Or maybe you just want to move on from the relationship and don’t want the joint account open as a reminder of this person.

Getting Rid of Full Shared Access

Since any one of the joint account owners can move funds around, you may not want this other person having shared access if you can’t trust them. For example, separating money into different bank accounts may be the best move if you’ve broken up with your business partner and have moved onto other ventures.

Recommended: Guide to Bank Account Closure Letters

The Takeaway

There can be several reasons to end a joint account, including divorce, irresponsible use of the account by one party, or simply the high price of some account fees. The process is fairly simple to close the account, but both parties must agree and determine how to divide the funds.

When you open a separate account, consider whether your current financial institution is the best choice for your needs.

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FAQ

Is it easy to close a joint account?

Depending on the financial institution, it could be easy to close a joint account. Many banks offer multiple ways to do so, such as online, by app, by mail, or in person.

How do you change a joint account to single?

Most financial institutions don’t allow you to separate or change a joint account to a single owner. You will likely need to open your own separate bank account and close the joint one.

Do both parties have to agree to close a joint account?

Yes, most state laws stipulate that both account owners need to agree to close a joint account.

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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.

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Mar

2024

Active vs Passive Investing: Differences Explained

By AJ Smith | Growing Wealth, invest, Investing | No Comments

Active investing vs. passive investing generally refers to the two main approaches to structuring mutual fund and exchange-traded fund (ETF) portfolios. Active investing is a strategy where human portfolio managers pick investments they believe will outperform the market — whereas passive investing relies on a formula to mirror the performance of certain market sectors.

Which approach is better, active investing vs. passive? There seems to be no end to this debate, but there are factors that investors can consider — especially the difference in cost. Because active investing typically requires a team of analysts and investment managers, these funds are more expensive and come with higher expense ratios. Passive funds, which require little or no involvement from live professionals because they track an index, cost less.

Also, there is a body of research demonstrating that indexing typically performs better than active management. When you add in the impact of cost — i.e. active funds having higher fees — this also lowers the average return of many active funds. Following are a few more factors to consider when choosing active investing vs. passive strategies.

Active vs Passive Investing: Key Differences

The following table recaps the main differences between passive and active strategies.

Active Funds	Passive Funds
Many studies show the vast majority of active strategies underperform the market on average, over time.	Most passive strategies outperform active ones over time.
Higher fees can further lower returns.	Lower fees don’t impact returns as much.
Human intelligence and skill may capture market upsides.	A passive algorithm captures market returns, which are typically higher on average.
Typically not tax efficient.	Typically more tax efficient.
Potentially less tied to market volatility.	Tied to market volatility and more vulnerable to market shocks.

💡 Quick Tip: Before opening any investment account, consider what level of risk you are comfortable with. If you’re not sure, start with more conservative investments, and then adjust your portfolio as you learn more.

Active Investing Definition

What is active investing? Active investing is a strategy where an investor attempts to beat the market by trading individual stocks, bonds, or other securities.

With active investing, either an individual investor could be the one trading securities in their own portfolios, or portfolio managers of actively managed exchange-traded funds (ETFs) and mutual funds could be the one buying and selling assets to outperform the market or a specific sector.

Active investors and actively-managed funds often trade stocks and securities to profit in the short term. Short-term trading, like day trading, can be difficult as it requires the investor to be an expert on the financial markets and the factors impacting stock prices. It also requires the investor to have a good deal of discipline, as short-term stock picking can be a volatile and risky endeavor.

Active Investing Pros and Cons

Active investing is what live portfolio managers do; they analyze and then select investments based on their growth potential. Active strategies have a number of pros and cons to consider when comparing them with passive strategies.

Pros and Cons of Active Investing
Pros	Cons
May be fun to follow the market and make your own investment decisions	Difficult to beat the market
May profit in up, down, and sideways markets	Time consuming
Can tailor a strategy based on your goals and risk tolerance	Higher fees and commissions

Pros

• One potential advantage of having a real person crunching numbers and making investment decisions is that they may be able to spot market opportunities and take advantage of them. A computer algorithm is not designed to pivot the way a human can, which might benefit the performance of an actively managed ETF or mutual fund.

• Whereas a passive strategy is designed to follow one market sector index (e.g. the performance of large cap U.S. companies via the S&P 500® index), an active manager can be more creative and is not limited to a single sector.

• The number of actively managed mutual funds in the U.S. stood at about 6,585 as of June 2023 vs. 517 index funds, according to Statista. Given that there are many more active funds than passive funds, investors may be able to select active managers who have the kind of track record they are seeking.

Cons

• The chief downside of active investing is the cost. Hedge funds and private equity managers are one example, charging enormous fees (sometimes 10%, 15%, 20% of returns) for their investing acumen.

But even standard actively managed funds, which may charge 1% or 1.5% or even 2% annually, are far higher than the investment fees of most passive funds, where the annual expense ratio might be only a few basis points.

• The majority of active strategies don’t generate higher returns over the long haul. According to the well-known SPIVA (S&P Indices vs. Active) 2022 year end scorecard report, 95% of U.S. active equity funds underperformed their respective S&P indexes over the last two decades. So investors who are willing to pay more for the insight and skill of a live manager may not reap the rewards they seek.

• A professional manager may create more churn in an actively managed fund, which could lead to higher capital gains tax.

💡 Quick Tip: When you’re actively investing in stocks, it’s important to ask what types of fees you might have to pay. For example, brokers may charge a flat fee for trading stocks, or require some commission for every trade. Taking the time to manage investment costs can be beneficial over the long term.

Passive Investing Definition

Passive investing strategy is when an investor buys and holds a mix of assets for an extended period. Many passive investors will invest in passively-managed index funds, which attempt to replicate the performance of a benchmark index. Passive investors are not necessarily trying to beat the market.

Passive Investing Pros and Cons

The term “passive investing” may not have a strong positive connotation, yet the funds that follow an indexing strategy typically do well vs. their active counterparts.

Pros

• Passive strategies are more transparent. Because index funds simply track an index like the S&P 500 or Russell 2000, there’s really no mystery how the constituents in the fund are selected nor the performance of the fund (both match the index).

• As noted above, index funds outperformed 79% of active funds, according to the SPIVA scorecard.

• Passive strategies are generally much cheaper than active strategies.

• Passive strategies can be more tax efficient as there is generally much less turnover in these funds.

Cons

• Because passive funds use an algorithm to track an existing index, there is no opportunity for a live manager to intervene and make a better or more nimble choice. This could lead to lost opportunities.

• Passive strategies are more vulnerable to market shocks, which can lead to more investment risk.

Which Should You Pick: Active or Passive Investing?

Deciding between active and passive strategies is a highly personal choice. It comes down to whether you believe that the active manager you pick could be among the few hundred who won’t underperform their benchmarks; and that the skill of an active manager is worth paying the higher investment costs these strategies command.

You could also avoid treating the active vs. passive investing debate as a forced dichotomy and select the best funds in either category that suit your goals.

The Takeaway

Active vs. passive investing is an ongoing debate for many investors who can see the advantages and disadvantages of both strategies. Despite the evidence suggesting that passive strategies, which track the performance of an index, tend to outperform human investment managers, the case isn’t closed.

After all, passive investing may be more cost efficient, but it means being tied to a certain market sector — up, down, and sideways. That timing may or may not work in your favor. Active investing costs more, but a professional may be able to seize market opportunities that an indexing algorithm isn’t designed to perceive.

Invest with as little as $5 with a SoFi Active Investing account.

FAQ

What is the difference between active and passive investing?

The main difference between active and passive investing is that active investing is when a portfolio manager — or the investor themselves — manages their portfolio, buying and selling investments to try to outperform the market. Passive investing is when an investor buys assets and holds onto them for a long period. Passive investing usually means investing in index funds, which track the performance of an index.

What are the examples of active funds?

According to a Morningstar February 2024 analysis, some examples of actively managed ETFs include the Avantis U.S. Equity ETF (AVUS), the Capital Group Dividend Value ETF (CGDV), and the Dimensional Core U.S. Equity 1 ETF (DCOR). Note that these are just examples. An investor should always do their own research before making any investments.

Does active investing have high risk?

Active investing is considered higher risk. Active investors and actively-managed funds often trade stocks and securities to profit in the short term. Short-term trading typically requires knowledge about financial markets and the factors impacting stock prices. It can be volatile and risky.

Should I invest in active or passive funds?

Deciding whether to invest in active or passive funds is a personal choice that only you can make. It depends on your personal situation, goals, and risk tolerance, among other factors. In general, passive investing is better for beginners, and active investing is better for experienced investors with knowledge of the market and who understand the risk involved.

Are ETFs active or passive?

ETFs can be active or passive. Passive ETFs track indexes such as the S&P 500 and may make sense for investors pursuing a buy and hold strategy. Active ETFs rely on portfolio managers to select and allocate assets in an effort to try to outperform the market.

Third-Party Brand Mentions: No brands, products, or companies 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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Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform.

Investment Risk: Diversification can help reduce some investment risk. It cannot guarantee profit, or fully protect in a down market.

Exchange Traded Funds (ETFs): Investors should carefully consider the information contained in the prospectus, which contains the Fund’s investment objectives, risks, charges, expenses, and other relevant information. You may obtain a prospectus from the Fund company’s website or by email customer service at [email protected]. Please read the prospectus carefully prior to investing.
Shares of ETFs must be bought and sold at market price, which can vary significantly from the Fund’s net asset value (NAV). Investment returns are subject to market volatility and shares may be worth more or less their original value when redeemed. The diversification of an ETF will not protect against loss. An ETF may not achieve its stated investment objective. Rebalancing and other activities within the fund may be subject to tax consequences.

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.

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Mar

2024

7 Tips for Acing a Video Interview

By David Wolinsky | Life & Career, Student Loans, student_loan | Comments Off

Whether you recently graduated school or are just seeking a new job, work interviews are increasingly conducted online, via video. This can be especially true as more companies take on remote hires and millions are working from home.

With this rapid rise in digital job interviews, you may wonder, What are some ways to ace a video interview? Do I need a fancy lighting set-up? What should I wear?

To help you make a good impression, read on for seven video interview tips, from practicing ahead of time to tweaking your background. They can help you make a great impression.

Get the Details Right

Video interviews could lead to a rewarding job. So it can be a smart first step to confirm the logistics of the video interview in advance to make sure there’s not a last-minute panic. Some questions to wrangle could include:

• Will you get a calendar invite or event link for the interview?

• What time zone will the interviewer be calling in from?

• Which video conferencing platform will be used?

• Will you need to download software to be able join the interview?
Knowing the answers to logistics can help bring more confidence to the video interview.

💡 Quick Tip: Often, the main goal of refinancing is to lower the interest rate on your student loans — federal and/or private — by taking out one loan with a new rate to replace your existing loans. Refinancing makes sense if you qualify for a lower rate and you don’t plan to use federal repayment programs or protections.

Dress for the Video Interview

Whether you are applying for an on-premises, fully remote, or part-time remote job, certain interview expectations stay the same — namely, presenting yourself with professionalism and dressing for the job. Even when (especially when) you’re interviewing from home.

Even if you’re applying for a fully remote job and you’d likely wear a hoodie and leggings every day, this is a moment to look professional. Business casual is a good bet, and remember the adage to dress for the job you want, not the role you have. Going a notch more formal is typically better than too relaxed.

Do check out how you look on camera in your interview outfit in advance. A shirt that looks fine in real life could wind up looking odd when cropped on camera.

Now, the seven tips to help you ace a video interview as you move forward with job applications.

1. Practice to Make Perfect

Different companies or organizations may use different platforms to host the interview — from Zoom to Google Hangouts to other programs. Don’t worry: You don’t need to become a pro at all the expert features. Still, it’s a good idea to become comfortable with:

• Dialing into scheduled calls

• Checking the audio and the camera

• Understanding what the interviewer can see

• Ensuring the WiFi signal is strong enough for the video interview and doesn’t lead to lag.

If you’re scheduled for a video job interview via a program you’ve never used, it’s advisable to download and try it out well before the actual call. Opening up an unfamiliar program just before the interview only to realize it’s not compatible with your technology might not create a positive first impression. Also make sure you double-check that you have all logins or passwords for the call.

2. Set the Surroundings

Here’s the next video interview tip: Generally, it’s a good idea to do a test call on the planned video-interview platform. This could help you assess how you and your surroundings appear via video. You may even want an extra set of eyes and ears: Ask a friend or family member to do a “mock” call to ensure the audio and visuals are clear.

When prepping for a video interview, put yourself in the position of whoever will be interviewing you. Some questions to chew on:

• What can the interviewer see of your space? Are you too far from or close to the camera?

• Are you easily visible or is more light needed? Or is the setting too bright and full of glare?

• Are there any distractions in the camera frame? Are you able to make eye contact as you talk, or are you looking sideways into the camera?

Some digital platforms allow users to record sessions. So, interviewees may want to record themselves talking and then watch and listen. You could run through the main things you want to say in the real video interview. Talking aloud on camera can help some people to become more aware of their own body language and improve it, if needed.

These steps can be a good way to finetune your online interviewing skills and hopefully get you on your way to accepting a job offer.

3. Take Brief Notes Beforehand

With job interviews, researching the company beforehand could give you ideas of how to connect previous work experience with the brand’s values or role’s responsibilities. One of the benefits of a video interview is that you can make these research notes quite literal.

Write out key points on a big piece of paper near your computer. Or, jot down a couple of accomplishments (say, an in-demand internship) on a sticky note next to your camera. It’s likely that the employer conducting the video interview will have no idea you’re looking at those pre-prepared notes. Just make sure you keep your notes short, so you can naturally weave in key points while maintaining good eye contact with your interviewer.

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4. Minimize Off-Screen Distractions

Another important online video tip is to keep your on-screen image distraction-free. It’s worth remembering that the only person the interviewer wants to interact with is you…not your adorable pets, lovely roommates, or kid sister. You ask the folks you share a living space with to keep quiet or stay in their rooms during your interview. Plan ahead so the conversation isn’t distractingly interrupted by unexpected visitors. (If your dog does somehow come bounding in and sits on your lap, own the situation, apologize, and remedy it as quickly and calmly as you can.)

And, on this topic, it’s a smart idea to turn off notifications for texts and emails during the interview time slot. Otherwise, a funny group chat could make your phone blow up with the distracting sound of alerts flooding in.

Also, as part of how to prepare for a video interview, check your background. Not everyone has a camera-ready home office. Do you have a messy shelf behind your head? Or your roommate’s horror-movie poster hanging there? Style your space so it doesn’t distract your interviewer from you and all you can offer a company.

5. Show up Early

Just as with an in-person interview, it’s wise to show up early. This can communicate that, yes, you’re punctual, but also that you are organized, dependable, and eager for the job.

Also remember that with video calls, there can be issues. Perhaps your passcode doesn’t work, or your video camera won’t turn on (despite having tested it the day before). If you aim to be online and logged in early, you can troubleshoot as needed. Just keep your posture and demeanor professional while you are in any digital waiting rooms before the call starts.

6. Go Outside for a Breather

It’s hard to feel energetic and friendly if you’re cooped inside all day. A good way to minimize nerves is to get fresh air. Don’t just open up a window. Take a quick walk around the block to get a jolt of sunlight and catch a breeze. They can help reset the mind. It can also be a great idea to do these between video interviews, if you have more than one scheduled on a given day.

7. Remember to Be Yourself

After preparing for the logistics of video job interviews, it can be easy to forget one simple thing: Be yourself. While a strong WiFi signal and well-lit space won’t hurt your chances during a video interview, it’s helpful to recall that interviews are conversations between two or more people. You’re not being grilled on a TV news report. Sure, you want to be prepared, but also relax, and share who you are.

Ways to help communicate across the digital divide: Aim to make good eye contact, have your voice show energy, and try out a signal to show that you are done speaking and ready for the next question. A nod might work well in this case.

Getting to Work

How to prepare for a video interview and ace it is just one part of navigating life after college. Being ready for a video interview is just one new way to get noticed these days.

On top of looking for a full-time or better-paying job, some grads also want to find ways to reduce their outstanding debt balances. That can include long-term bills, like student loan repayments. Some borrowers decide to refinance their student loans with a private lender.

Refinancing student loans could reduce monthly bill payments, though it’s important to note that you may pay more interest over the life of the loan if you refinance with an extended term. In addition, if you refinance federal student loans, you will forfeit certain federal benefits and protections. If you are curious to learn more about refinancing student loans, it can be a good idea to research different offers.

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.

With SoFi, refinancing is fast, easy, and all online. We offer competitive fixed and variable rates.

SoFi Student Loan Refinance
If you are a federal student loan borrower, you should consider all of your repayment opportunities including the opportunity to refinance your student loan debt at a lower APR or to extend your term to achieve a lower monthly payment. Please note that once you refinance federal student loans you will no longer be eligible for current or future flexible payment options available to federal loan borrowers, including but not limited to income-based repayment plans or extended repayment plans.

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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.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

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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Mar

2024

What Types of Scholarships Are There?

By Jennifer Calonia | Going to College, Student Loans, student_loan | Comments Off

There are many types of scholarships, from academic to athletic and need-based to identity-specific scholarship programs. Recipients typically don’t need to repay the funds they receive in the form of scholarships, which makes this type of funding particularly appealing.

In a 2023 Sallie Mae survey, How America Pays for College, it found that 61% of U.S. families used scholarship funds to partly pay for college. The average scholarship award amount across school, state, and company or nonprofit sources was $8,005.

Despite this available aid, 29% of students who didn’t use scholarship funding said they didn’t apply because winning didn’t seem plausible. However, with so many different types of scholarships available, you might find one that can help you pay for school.

1. Academic Scholarships

Academic scholarships, also referred to as merit scholarships, are awarded to students who’ve demonstrated academic excellence or exceptional skill in an area. For example, a merit-based scholarship might be based on an applicant’s cumulative GPA.

This kind of scholarship is provided by numerous sources, including:

Schools

Some high schools provide academic scholarships to their top graduating seniors. Additionally, the college you’re attending might have scholarships available.

Federal

Nationally recognized organizations offer federal academic scholarships based on different criteria and specifications.

Local

Students might also find scholarships sponsored by their state, county, city, or local associations.

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2. Athletic Scholarships

Athletic scholarships are offered to student-athletes by their college. These full- and partial-scholarship programs are offered to a select few students who have shown exceptional skill in their sport.

Typically, when participating in an athletic scholarship you’re expected to maintain satisfactory academic performance to continue receiving funding. Note that fewer than 2% of high school athletes are awarded athletics scholarships to compete in college.

3. Scholarships for Extracurriculars

Students who participate in extracurricular activities might be able to find scholarship opportunities for their unique interests. For example, scholarships for students who dance, act, draw, or participate in Boy Scouts, Key Club, and more exist.

4. Student Specific Scholarships

There are many types of scholarships that are based on the student’s personal situation or affiliation. Some of these kinds of scholarships include:

Religious Scholarships

For example, your specific religious denomination. These scholarships are generally available to students who are actively involved in a faith-based community, or who are pursuing religion-based college courses.

First-Generation Scholarships

Students who are the first in their family to attend college may qualify for specific scholarships.

Legacy Scholarships

These scholarships are exclusively for students whose parents or close family members are alumni of the same institution.

Identity-Based Scholarships

In addition to the student-specific scholarships discussed above, scholarship programs are also available based on a student’s personal identity. Some identity-based categories include BIPOC, Women, and LGBTQIA+.

Hispanic Heritage

Scholarships are available based on heritage. Students of Hispanic or Latinx heritage may be able to qualify for specific heritage-based scholarships like those offered by the Hispanic Scholarship Fund.

African American

Specific scholarships are available for African American students as well.

Women

Scholarships for women are another subset of options.

LGBTQIA+

LGBTQIA+ identifying students may be eligible for scholarships as well.

Learning Disabilities

These scholarships are available to select students who have diagnosed learning and attention issues. For example, the National Center for Learning Disabilities offers scholarships.

5. Need-Based Scholarships

One of the most popular types of scholarships for college are need-based. These scholarships are accessible to applicants who have a demonstrated financial need, and a program might ask for proof, such as income documentation or FAFSA® information.

You can find need-based scholarships from national organizations, as well as within your state, local community, and even through your own school.

Recommended: What is Need-Based Financial Aid?

6. Employer Scholarships

Employer scholarships are offered to employees of a company or an employee’s college bound student. Aside from having an affiliation with the employer, students might need to meet other eligibility criteria to be selected for an award.

7. Military Scholarships

Private and public entities sponsor military scholarships for students who currently serve or have served in the U.S. armed forces. If you’re a first-time freshman and participated in Reserve Officer Training Corps, consider reaching out to your school’s ROTC officer to learn about your options.

8. STEM Scholarships

STEM scholarships are accessible to students who are pursuing a college education in a science, technology, engineering, or math discipline. Some scholarships programs are offered specifically to students who identify with a particular group; for example, STEM scholarships for minority students.

9. Scholarships Based on Major

Regardless of what you’ve chosen as your college major, there’s likely a scholarship suited for you. These scholarships are provided by some college departments, the school itself, or private organizations who want to encourage students to pursue a particular area of study.

10. No Essay Scholarships

This kind of scholarship explicitly doesn’t include a written essay or personal statement component. You might prefer this type of scholarship if writing isn’t your forte, but there might be another required component in its place, such as a video or other creative submission.

Applying for Scholarships

There are various types of scholarships for college, which means there are just as many different requirements and deadlines to stay on top of. When applying to a scholarship, double check that you meet the basic eligibility criteria as a student.

Depending on the type of scholarship, it might require a minimum GPA, or it might ask for proof that you have financial needs, for example. After confirming that you meet the applicant requirements, review the steps needed to apply.

Some scholarship programs might ask for a personal statement or other academic or creative submissions. Similarly, some might request additional paperwork as part of your application, like a copy of your school transcripts.

Finally, make sure you note each scholarship’s deadline and submit your application on time. The last thing you want is to have done all of the work only to be denied because of a missed deadline.

Alternatives to Scholarships

If you’d like to diversify your financial aid sources, there are alternative aid options, like loans for undergraduates and graduate students, as well as grants. To apply for federal financial aid, fill out the Free Application for Federal Student Aid (FAFSA) each year. Schools may also use the information provided on the FAFSA to award school-specific scholarships. Here are a few other options for paying for college.

Grants

Grants are provided by federal, state, school, and private sources. Like scholarships, they typically don’t need to be repaid.

Federal Student Loans

Federal student loans are available to undergraduate and graduate students, as well as parents of dependent undergrads. They’re funded by the U.S. government, and most federal loans don’t require a credit check. In addition to offering fixed rates, they provide access to income-driven repayment plans and loan forgiveness programs.

Private Student Loans

When scholarships, grants, and federal student loans aren’t enough to cover the total cost of college, a private student loan could help. These loans are funded by private lenders, and offer fixed- or variable-rate loans at different terms. These loans typically require a credit check or the addition of a creditworthy cosigner. Keep in mind that private student loans aren’t required to offer the same benefits, like income-driven repayment plans, as federal student loans.

The Takeaway

If you’re short on aid for your upcoming academic year, consider searching for unclaimed scholarships. There are a variety of scholarship types to consider, so you’ll likely come across at least a handful that you’re eligible for.

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.

SoFi private student loans offer competitive interest rates for qualifying borrowers, flexible repayment plans, and no fees.

FAQ

What are the three most common types of scholarships?

Common types of scholarships for college are merit-based scholarships, need-based scholarships, and athletic scholarships. However, within these categories are sub-categories of scholarships based on specific eligibility factors.

How many different scholarships are there?

There are millions of scholarships being offered each year. According to Educationdata.org, more than 1.7 million scholarships are awarded annually.

What are competitive scholarships?

Competitive scholarships are prestigious national scholarship programs. They are often merit-based and are awarded to exceptional students who’ve demonstrated academic excellence, leadership, and who are considered the nation’s top students.

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-criteria 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.

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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.

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, products, or companies 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.

Photo credit: iStock/Edwin Tan
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What Happens When A Company Goes Private?

What Is Going Private?

What Is Privatization?

Alternative investments, now for the rest of us.

Start trading funds that include commodities, private credit, real estate, venture capital, and more.

What Happens if You Own Shares of a Company That Goes Private?

Why a Company May Go Private

How to Take a Company Private

Pros and Cons of Going Private

The Pros

The Cons

The Takeaway

FAQ

Is it good for a public company to go private?

What happens to my private shares when a company goes public?

How long does it take for a public company to be private?

A Guide on Splitting a Joint Bank Account

What Is a Joint Bank Account?

Steps to Separating Joint Bank Accounts

1. Call Your Bank

2. Wait for Current Transactions to Clear

3. Withdraw Your Money

4. Apply for New Bank Account

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Ways to Close Joint Account

Online

Through the Mail

In Person

Reasons to Close a Joint Bank Account

Prevent Penalties

Minimize Fees

Legal Liabilities

Relationship Ending

Getting Rid of Full Shared Access

The Takeaway

FAQ

Is it easy to close a joint account?

How do you change a joint account to single?

Do both parties have to agree to close a joint account?

Active vs Passive Investing: Differences Explained

Active vs Passive Investing: Key Differences

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Active Investing Definition

Active Investing Pros and Cons

Pros

Cons

Passive Investing Definition

Passive Investing Pros and Cons

Pros

Cons

Which Should You Pick: Active or Passive Investing?

The Takeaway

FAQ

What is the difference between active and passive investing?

What are the examples of active funds?

Does active investing have high risk?

Should I invest in active or passive funds?

Are ETFs active or passive?

7 Tips for Acing a Video Interview

Get the Details Right

Dress for the Video Interview

1. Practice to Make Perfect

2. Set the Surroundings

3. Take Brief Notes Beforehand

4. Minimize Off-Screen Distractions

5. Show up Early

6. Go Outside for a Breather

7. Remember to Be Yourself

Getting to Work

What Types of Scholarships Are There?

1. Academic Scholarships

Schools

Federal

Local

2. Athletic Scholarships

3. Scholarships for Extracurriculars

4. Student Specific Scholarships

Religious Scholarships

Alternative investments,
now for the rest of us.

Student Loan
Refinancing

Personal
Loans

Online
Investments