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Paying for college is a significant financial investment, and many families want to ensure they’re protected in case something unexpected disrupts a student’s education. That’s where tuition insurance comes in.

Tuition insurance is a type of coverage that can help reimburse tuition costs if a student has to withdraw from school due to serious illness, injury, or other covered circumstances. But is it really necessary? This article explores what tuition insurance is, what it covers, how much it costs, and whether it’s worth considering for your family’s situation.

What Is Tuition Insurance?

Just as you have health insurance to cover costs associated with unexpected health issues, you can get tuition insurance to cover college tuition costs in the event of unexpected health issues that prevent your child from attending.

Also called tuition refund insurance, it can recoup some or all of what you’ve paid in tuition if your child experiences a serious injury or illness that prevents college attendance.

What Does Tuition Insurance Cover?

Generally, tuition insurance covers,:

•   Serious sickness

•   Injury

•   Mental health conditions, including anxiety and depression

•   Death of the student or person paying tuition

You’ll need to read the fine print to find out what qualifying medical events are, as some policies will list specific illnesses, such as mononucleosis.

Imagine a pandemic sweeping the land (wild thought, huh?). Tuition insurance will not cover tuition if a college or university has to close or if your child simply isn’t comfortable attending class in person. However, if they contract the disease and are unable to attend classes as a result, they may be eligible for a partial refund of tuition for that semester.

To file a claim, the student typically has to withdraw from school, and a medical professional must document that withdrawal was necessary. The process can vary by policy, though.

What Does Tuition Insurance Not Cover?

It’s important to know what tuition insurance does not cover, as well. If the student leaves college for academic reasons or is on disciplinary probation, they will not be reimbursed for tuition.

Some preexisting conditions may not be covered, so if your child has a medical condition, make sure it is covered before buying the policy.

Tuition insurance may also not cover participating in professional sports or extreme sports (such as bungee jumping), participating in a riot, drug abuse, suicide, or self-inflicted injury.,

Who Should Consider Tuition Insurance?

Some students or parents paying for tuition might be better candidates for college tuition insurance than others.

For students with preexisting conditions that can be covered by a policy, it may be a good idea to purchase coverage, especially if it’s a condition that is known to keep the student bedridden or otherwise unable to function for weeks or months at a time. The reimbursed tuition money could be put toward medical bills or a future semester in college.

If you have more than one child in college, a tuition insurance policy could help you recoup costs for a student experiencing an issue that you could then put toward other college expenses.

And if the school your child is attending is very expensive, an insurance policy may reduce some stress in the event that something happens.

Recommended: What Is the Cost of Attendance in College?

Cost of Tuition Insurance

Part of determining whether college tuition insurance is worthwhile is understanding the policy cost vs. possible reimbursement, as well as tuition costs.

While a select few schools offer free tuition, most have significant price tags. The average costs of tuition for the 2025-2026 academic year are as follows:

•   In-state tuition for a four-year public university: $11,950

•   Out-of-state tuition for four-year public university: $31,880

•   Private nonprofit four-year institution: $45,000

These numbers add up over four (or more) years, so it’s understandable that paying for an insurance policy might make sense. But how much is tuition insurance?

Plans vary in pricing and features, but generally, you can expect to pay about 1% of the cost of tuition. Some cover other expenses, such as room and board, while others do not.

Buying a Tuition Insurance Policy

Currently, there are two primary providers of tuition insurance: GradGuard and A.W.G. Dewar. Some schools may work with a private insurance company, so start by asking the registrar’s office if the college has a partner for tuition insurance.

Of course, the most affordable and comprehensive coverage can be obtained by going directly through the school, if your school offers it. Make sure to ask your school about tuition insurance prior to seeking an outside provider.

To enroll in a policy, you’ll be asked about your student’s school and costs for a semester of tuition. You’ll then be given a quote, and if you want the coverage, you can purchase it from there by adding a few more personal details and inputting your payment information. You’ll pay your monthly premium, just as you do with auto or health insurance.

Reading the Fine Print

Before purchasing the policy, it’s best to read the fine print. The last thing you want is to purchase a policy and file a claim, expecting to be fully reimbursed, only to find out that the condition you’re filing for isn’t covered.

For example, GradGuard’s fine print discusses a preexisting medical condition exclusion waiver. It states that preexisting medical conditions are covered when the insured student does not have symptoms of the condition on the policy purchase date and was medically able to attend school, or if the student was covered by a similar policy by the same company within four months of the effective date of the current policy.

Other fine print items to note are whether a doctor or licensed mental health professional needs to diagnose the student with the medical condition to qualify for reimbursement, the effective date of the policy, and how to prove your loss. Not all policies will fully reimburse your tuition or other costs, so find out how much you may be eligible to be refunded before purchasing a policy.

How to File a Claim

Each insurance company has its own process for filing a claim. Be sure to read through the process, as one incorrect step could cause your claim to be denied.

You’ll need documentation for the expenses you want to claim from the college or university. You may need the registrar’s office to verify on paper that your student has withdrawn for the semester, as well as documents showing what you have paid in tuition and expenses.

You may also need a written order from your student’s doctor or mental health professional stating that your child is unable to attend school due to medical reasons. For mental health issues, withdrawal typically needs to be advised by a licensed medical professional.

Alternatives to Tuition Insurance

While tuition insurance can come in handy if medical conditions or injury force a student to withdraw, the college might offer full or partial reimbursement without insurance.

Policies vary from one school to another, so inquire with the college or university before assuming you can get expenses refunded.

Some schools will refund tuition, but they typically only give out full refunds before the first day of class, or partial refunds within a month of the first semester. Others may not reimburse tuition but might refund some or all of room and board expenses if students withdraw.

Prior to making a decision on whether or not tuition insurance is right for you, speak with your child’s college directly to review your options.

Is Tuition Insurance Right for You?

The bottom line: If you don’t like taking risks with your money and are concerned that your child might have a situation that results in withdrawal from school for one or more semesters, tuition insurance could be a worthwhile investment. It’s a low expense compared to tuition, so it could be well worth it should you end up filing a claim.

If your child has a preexisting condition that would be covered, insurance could mitigate your risk of losing money should that medical condition cause a need to leave school. On the other hand, not much is covered in terms of preexisting conditions or activities your child might be involved in, such as professional sports. In these cases, the policy would be moot if the condition isn’t covered when you file a claim.

If a student withdraws and not all costs are covered or if no policy is in place, a private student loan could be a solution to fill the financial gap. Private student loans can typically be used for tuition, books, room and board, transportation, and other college-related expenses.

The Takeaway

Tuition insurance can serve as a valuable safety net for families concerned about the financial risks associated with unexpected student withdrawals due to serious health issues. While it may not be necessary for everyone, it may offer some reassurance for those with higher tuition costs, limited school refund policies, or for students with preexisting medical conditions.

If you’re wondering how to pay for college, you can rely on cash savings, scholarships, grants, federal student loans, 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.

Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.

FAQ

What is tuition insurance and how does it work?

Tuition insurance, also known as tuition refund insurance, is a policy that can reimburse some or all of your college tuition if a student must withdraw due to serious illness, injury, or mental health conditions. It acts as a financial safeguard against unexpected health issues that prevent attendance.

What does tuition insurance typically cover?

Generally, tuition insurance covers withdrawals due to serious sickness, injury, mental health conditions such as anxiety and depression, and the death of the student or tuition payer. However, coverage specifics can vary, so it’s essential to review the policy details.

What situations are not covered by tuition insurance?

Tuition insurance usually does not cover withdrawals for academic reasons, disciplinary actions, or preexisting conditions unless specified. It also excludes situations such as participating in extreme sports, drug abuse, suicide, and self-inflicted injuries.

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This content is for educational and informational purposes only. The products, services, or features discussed may not currently be available via the SoFi platform. Any references to third-party products, services, or companies do not constitute an endorsement, recommendation, or solicitation by SoFi. Readers should independently evaluate their options and consider their individual financial needs and circumstances before making any decisions. ©2026 SoFi Technologies, Inc. All rights reserved.

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

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

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Using retirement funds to pay for college may seem like a convenient solution when faced with the high cost of higher education, especially for parents looking to support their children. However, tapping into these savings can have significant financial consequences.

While certain retirement accounts, such as individual retirement accounts (IRAs), allow penalty-free withdrawals for qualified education expenses, the funds are often still subject to income tax and may reduce long-term retirement security.

Understanding the pros and cons can help families make informed decisions about whether to use retirement savings to cover college costs.

Pros of Using Retirement Funds to Pay for College

If you already have the money saved up, there can be some upsides to taking money out of your retirement funds so that your child won’t need to take out student loans.

May Avoid an Early Withdrawal Penalty

If you have an individual retirement account (IRA), taking an early withdrawal typically results in income taxes on the withdrawal amount plus a 10% penalty. However, if you withdraw funds for qualified higher education expenses, the 10% penalty is waived.

That said, the withdrawn funds will still be considered taxable as income. Also, this tax break does not apply to 401(k) accounts. But if you roll over your 401(k) into an IRA, then you can withdraw the funds from the IRA and avoid the penalty.

May Avoid Taxes Altogether

If you have a Roth IRA, you can withdraw up to the amount you’ve contributed to the account over the years without any tax consequences at all.

Paying Interest to Yourself With a 401(k) Loan

In addition to allowing you to take early withdrawals, some 401(k) plans also let you borrow from the amount you’ve already saved and earned over the years.

If you borrow from a 401(k) account, that money won’t be subject to taxes the way an early withdrawal would. Also, when you’re paying that loan back, the money you pay in interest goes back into your 401(k) account rather than to a lender.

Drawbacks of Using Retirement Funds to Pay for College

Before you raid your retirement to pay for your child’s college tuition, here are some potentially negative aspects to consider.

There May Be Negative Tax Consequences

Even if you manage to avoid being charged a 10% early withdrawal penalty on your retirement account, some or all of the money you withdraw from a retirement account may be considered taxable income. Depending on how much it is, you could face a larger-than-usual tax bill when you file your tax return for the year.

401(k) Loan Repayment Can Be Affected by Your Job Status

If you take out a large loan from your 401(k) and then leave your job, you may be required to pay the loan in full, regardless of your original repayment term. If you can’t repay it, it will likely be considered an early withdrawal and be subject to income tax and the 10% penalty.

You May Have to Work Longer

Taking money out of a retirement account not only lowers your balance, but it also means that the money you’ve withdrawn is no longer working for you.

Due to compounding interest, the longer you have money invested, the more time it has to grow. But even if you replace the money you’ve taken out over time, the total growth may not be as much as if you’d left the money where it was all along.

Alternatives to Using Retirement Funds to Pay for College

While you can use retirement funds to pay for college, there are other options to consider, too.

Scholarships and Grants

One of the best ways to pay for a college education is with scholarships and grants, since you don’t have to pay the money back.

Check first with the school that your child is planning to attend (or is already attending) to see what types of scholarships and grants are available.

Then, make sure your child fills out the Free Application for Federal Student Aid (FAFSA®). The information provided in the FAFSA will help determine their federal aid package, which typically includes grants, federal student loans, and/or work-study.

Finally, you and your child can search for tons of scholarships in online scholarship databases. While your child may not qualify for all of them, there may be enough relevant options to help reduce that tuition bill.

Federal Student Loans

As mentioned above, filling out the FAFSA will give your child an opportunity to qualify for federal student loans from the U.S. Department of Education.

These loans have low, fixed interest rates plus access to federal benefits, including loan forgiveness programs and income-driven repayment plans.

With most federal student loans, there’s no credit check requirement, so you don’t have to worry about needing to cosign a loan with your child.

Parent PLUS Loans

If you’re concerned about the effect of student loan debt on your child, you can opt to apply for a federal Parent PLUS Loan to help cover the costs of college.

Keep in mind that the terms aren’t usually as favorable for Parent PLUS Loans as they are for federal loans for undergraduate students. The interest rates are currently higher, and you may be denied if you have certain negative items on your credit history.

Private Student Loans

If your child can’t get federal student loans, is maxed out on loans, or has pursued all other options to no avail, private student loans may be worth considering to make up the difference.

To qualify for private student loans, however, you and/or your child may need to undergo a credit check. If your child is new to credit, you may need to cosign to help them get approved by being a cosigner, or you can apply on your own.

Private student loans don’t typically offer income-driven repayment plans or loan forgiveness programs, but if your credit and finances are strong, it may be possible to get a competitive interest rate.

Recommended: A Complete Guide to Private Student Loans

The Takeaway

Using retirement funds to pay for college is one way to help your child, but you may not want to risk your future finances. Take the time to help your child consider all of the options to get the money to pay for school.

Options to pay for college include cash savings, working a part-time job, scholarships, grants, federal student loans, 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.

Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.

FAQ

Can I use retirement funds to pay for my child’s college education?

It’s possible to use retirement funds, such as those from an individual retirement account (IRA) or a 401(k), to pay for a child’s college expenses. However, this decision carries potential tax implications and penalties, depending on the type of account and how the funds are withdrawn.

What are the tax implications of withdrawing from an IRA for college expenses?

Using withdrawals from an individual retirement account (IRA) for qualified higher education expenses can avoid the 10% early withdrawal penalty. However, the amount withdrawn is still considered taxable income, which could impact your tax bracket and financial aid eligibility.

What are the alternatives to using retirement funds for paying college tuition?

Alternatives to using retirement funds to pay for college tuition include applying for scholarships, federal student loans, Parent PLUS Loans, and private student loans. These options can help cover college costs without compromising your retirement savings.

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This content is for educational and informational purposes only. The products, services, or features discussed may not currently be available via the SoFi platform. Any references to third-party products, services, or companies do not constitute an endorsement, recommendation, or solicitation by SoFi. Readers should independently evaluate their options and consider their individual financial needs and circumstances before making any decisions. ©2026 SoFi Technologies, Inc. All rights reserved.

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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Congratulations! You’re on your way to college. You can put all the standardized tests, the applications, and the rest of the stress behind you and embark on this new adventure. Education and independence await, but you have to prepare for it.

And that starts with packing. Which clothes, books, and artwork are coming with you? What do you need to go shopping for?

To help you prepare, follow this list of what every new college student might need.

School Supplies

Don’t be fooled into thinking that the only necessary supplies are a laptop and phone. Additional supplies can help students manage their college courses.

Even though phones and laptops have built-in calendars, also having a physical planner can be a good idea. Writing information down can help you remember it better, and it can be less distracting having school information in a physical planner, away from all those social media apps.

When it comes to taking notes, some professors don’t want students on their computers during class, while others may not mind. It’s a good idea to have a notebook for each class just in case, along with pens, pencils, and highlighters.

Make sure to check the specific course requirements. You’ll likely need some textbooks (you may be able to pay for books with student loans, if you have taken any out). Also check the syllabus for each class. It should be available early enough to read through so you can see whether the professor listed any required materials. If you’re taking a math class, for example, a specific type of calculator may be required.

(Tip: Since paying for college can be a stretch, look into renting books and equipment instead of buying them outright.)

Depending on how many books you have to lug around campus, you may want to invest in a new backpack or messenger-style bag. Some students like a small bag with roll-aboard-style wheels if they have to lug it long distances. The most suitable bag will likely depend on your schedule, how big your campus is, and how many classes you have in a row.

It might be good to wait to buy this item after you have selected your courses and know what each day is going to require.

💡 Quick Tip: With benefits that help lower your monthly payment, there’s a lot to love about SoFi private student loans.

Shower Supplies

Students who choose to live in dorms will need to bring shower supplies with them. Sharing a bathroom is going to be another adjustment when starting college. There are a few must-haves for a comfortable experience.

•   Shower shoes are one of these musts. A cheap pair of flip-flops will do the trick. These are shoes that are worn only while taking a shower. What’s the deal? They help to prevent athlete’s foot, a fungal infection that can result from public showers. Just make sure to rinse and dry off the shoes after each use.

•   A shower caddy is another essential. Most students will likely be walking from the dorm room to the shower, so they’ll have to bring all shower supplies with them. A portable container makes this much easier.

•   Shower supplies are also a must. The caddy will have room for your shampoo, conditioner, body wash, and so on, and some also come with hangers, so they could be hung up in the shower. When choosing a shower caddy, look for one that is waterproof and has holes in it so it doesn’t fill up with water.

•   Don’t forget the towels. At home, there’s always a stack of clean towels ready to be used. This won’t be the case in dorms.

•   You might also want to have a bathrobe you can throw on while walking from the dorm room to the bathroom and back.

Recommended: What Is College Like?

Wardrobe

This can be one of the most fun parts of packing: thinking about what you’re going to wear. After all, it’s an opportunity to present your best self or a whole new you on campus.

You may have a stellar closet full of clothes you can’t wait to take with you. Or you may want to go shopping and take a break from the looks that you loved in high school. You’ll also have to consider the weather. If you grew up in Florida and are heading to Maine for freshman year, you’re going to have to get gear that’ll keep you warm.

If you’re the sort of person who wants an entirely new wardrobe for college, it’s wise to learn how to save money on clothes and uncover the joys of everything from couponing to hitting thrift stores.

Recommended: What Is the Average Cost of College Tuition?

Don’t Forget Shoes

College campuses are much bigger than most high schools, so investing in a good pair of walking shoes is important. Classes may end up being a solid 15- to 20-minute walk away from each other.

This can take a toll on a student’s mood and physical comfort if they try to handle that walk in heels, unsupported sandals, or ill-fitting shoes.

Shoes take up a lot of space while packing, so try bringing only the necessary pairs. If your college is in a state that will experience cold or snowy winters, make sure to invest in some warm boots.

Recommended: Guide to Private Student Loans

Bedding and Room Necessities

What else do students need to bring to a college dorm? Most dorm rooms come with a bed but not sheets. Pack a couple of sets of sheets and a nice comforter. Some college students also recommend bringing a mattress pad and backrest pillow because you may spend more time in that bed than expected. Not living on campus? If you’ll be staying off-campus, look for furnished apartments to minimize your costs.

One important note: Look into the school’s list of restricted items so you know what you should not bring to college. The college may also list the furnishings that come with the dorm room. Check out your school’s website first so you don’t buy something that’s already there.

It can also be helpful for students to contact their roommates ahead of time and see if they’re planning to bring anything that could be shared. That could be a move that helps make college more affordable.

It’s not a bad idea to pack on the light side to help you avoid overbuying and spending too much on things you don’t need. If you get there and find that you do need additional things, most items can be ordered online, anyway.

Planning how to make the most of the small space provided in a college dorm is going to be great practice for when you’re ready to move into your own apartment.

💡 Quick Tip: Parents and sponsors with strong credit and income may find much lower rates on no-fee private parent student loans than federal parent PLUS loans. Federal PLUS loans also come with an origination fee.

The Takeaway

Packing for college doesn’t have to be overwhelming. By starting with the basics, such as smart school supplies, essential shower gear, versatile clothes, and comfortable walking shoes, you can fully prepare yourself for campus life. Remember to check your school’s restricted items list and coordinate with your roommate to avoid buying duplicate items. Pack light, since you can easily order extra things online once you arrive.

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.

Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.

FAQ

What are the essential bedding items to bring to college?

Most dorm rooms provide a bed frame and mattress but not bedding. It’s recommended to bring two sets of sheets (often twin XL), a comforter, pillows, and a mattress pad for added comfort. A backrest pillow can also be useful for studying or relaxing on the bed.

How can students avoid bringing unnecessary items to college?

To prevent overpacking, students should consult their college’s list of provided items and prohibited belongings. Additionally, coordinating with roommates can help avoid duplicate items, and packing lightly allows for purchasing additional necessities after arrival if needed.

What is a practical approach to packing for college?

Adopting a minimalist approach by bringing only essential items can make the move-in process smoother. Since most items can be purchased or ordered online after arrival, starting with the basics and acquiring additional items as needed is often more manageable.

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This content is for educational and informational purposes only. The products, services, or features discussed may not currently be available via the SoFi platform. Any references to third-party products, services, or companies do not constitute an endorsement, recommendation, or solicitation by SoFi. Readers should independently evaluate their options and consider their individual financial needs and circumstances before making any decisions. ©2026 SoFi Technologies, Inc. All rights reserved.

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

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While the federal government once offered subsidized loans to graduate students, that is no longer the case. The Budget Control Act of 2011 eliminated subsidized loan eligibility for advanced degrees, restricting these interest-free benefits exclusively to undergraduate borrowers. Fortunately, graduate students still have several federal and private financing paths available.

Below, we take a closer look at how federal subsidized and unsubsidized loans differ, break down the current graduate borrowing limits, and explore the alternative loan options available to fund your advanced degree.

What Are Subsidized Loans?

Federal student loans are offered through the U.S. Department of Education to help students cover the cost of higher education. Direct Subsidized Loans are available to undergraduate students who demonstrate financial need.

The federal government pays all interest on subsidized loans while you are in school at least half-time, during the six-month grace period after you leave school, and during certain periods of deferment. Outside of these periods, the borrower is generally responsible for making all principal and interest payments.

Subsidized vs Unsubsidized Loans

Federal Direct Unsubsidized Loans, on the other hand, are available to undergraduate and graduate students. Students do not have to demonstrate financial need to qualify for these loans.

For regular graduate programs, students may borrow up to $20,500 per year, with an aggregate cap $100,000. Students pursuing professional degrees can borrow up to $50,000 per year, with an aggregate cap of $200,000. Federal student loans are also subject to a lifetime Direct Loan borrowing cap of $257,500, which includes undergraduate and graduate borrowing.

Interest rates for all federal student loans are set by the federal government each year. For the 2026-27 academic year, the interest rate for Direct Unsubsidized Loans for both graduate and professional borrowers is 8.07%. The interest rate is fixed over the life of the loan.

To apply for federal student loans, you need to fill out the Free Application for Federal Student Aid (FAFSA®). Your school will use the information on this form to determine how much aid you are eligible to receive and present it to you in a formal financial aid offer (also known as an award letter). Your offer may include a combination of grants, scholarships, work-study, and federal student loans.

Alternatives to Subsidized Loans

In addition to unsubsidized federal loans, there may be other loans available that can help you pay for grad school.

Grad PLUS Student Loans

Effective July 1, 2026, the Federal Direct Graduate PLUS Loan program has been eliminated for new borrowers under the One Big Beautiful Bill Act (OBBBA). This policy change removes a key federal funding option that previously allowed graduate and professional students to borrow up to their program’s full cost of attendance.

For the 2026-27 academic year, the availability and requirements of these student loans depend entirely on your enrollment history:

•   New borrowers: If you started a new graduate program on or after July 1, 2026, you are no longer eligible to take out a Grad PLUS loan. Instead, you must rely on Direct Unsubsidized Loans, which are now strictly capped at $20,500 per year for standard graduate degrees and $50,000 per year for specific professional programs.

•   Legacy exception: If you received a federal student loan for your current program before July 1, 2026, you are generally grandfathered into the program. You may be able to continue to apply for Grad PLUS loans to cover your full cost of attendance for up to three academic years or until you graduate, whichever comes first.

Private Loans

Private student loans are offered by banks, credit unions, and online lenders. Unlike federal options, individual lenders determine your borrowing limits, repayment terms, and interest rates based largely on factors like your (or your cosigner’s) income and credit score.

While private loans can bridge the funding gap if you exhaust your federal loan limits, they typically lack key federal protections such as income-driven repayment and potential loan forgiveness programs. Consequently, they are generally considered a last resort for funding graduate school.

How Much Can You Borrow for Graduate School?

For graduate school, you can borrow a maximum of $20,500 per year for general graduate programs (like a Master’s or MBA) or up to $50,000 per year for designated professional degrees (like Medicine or Law) through federal Direct Unsubsidized Loans.

These federal loans are subject to total lifetime limits of $100,000 for general graduate studies and $200,000 for professional degrees. In addition, you cannot exceed an universal lifetime limit of $257,500 across all of your undergraduate and graduate federal student loans combined.

Many private lenders allow you to borrow up to your school’s total cost of attendance minus any other financial aid. This maximum limit includes tuition, fees, housing, books, and living expenses as certified by your university.

The Takeaway

While federal Direct Subsidized Loans are no longer an option for graduate students, funding is still accessible through Direct Unsubsidized Loans, institutional aid, scholarships, and private student loans. By comparing interest rates, borrowing limits, and repayment terms across these options, graduate students can develop a strategic financing plan tailored to their degree and financial goals.

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.

Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.

FAQ

Does the U.S. Department of Education offer subsidized loans for graduate students as part of financial aid packages?

No, the U.S. Department of Education does not offer subsidized loans for graduate students. Under federal policy, Direct Subsidized Loans are strictly limited to eligible undergraduate students with financial need.

Graduate and professional students can still access federal financial aid, but they are restricted to Direct Unsubsidized Loans. Unlike subsidized options, unsubsidized loans are not need-based, and interest begins accruing immediately upon disbursement rather than being covered by the government while you are in school.

Are Grad PLUS Loans subsidized loans?

No, Grad PLUS Loans are not subsidized, meaning interest accrues while you are in school.

Furthermore, under recent federal policy changes, Grad PLUS Loans have been discontinued for new borrowers. Only existing graduate students who were already enrolled and borrowing under the program retain limited eligibility to finish their degrees. New graduate students must instead rely on Direct Unsubsidized Loans, which are subject to strict annual and lifetime caps.

Can you pay off subsidized loans before graduating?

Yes, you can pay off federal subsidized loans before graduation without penalty. All education loans, including federal student debt, allow for penalty-free prepayment.

Because the government covers the interest on Direct Subsidized Loans while you are enrolled at least half-time, any voluntary payments you make before graduation will apply directly to your principal balance. This reduces the overall amount that will begin to accumulate interest once your six-month post-graduation grace period ends.

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Photo credit: iStock/Kseniia Ivanova

This content is for educational and informational purposes only. The products, services, or features discussed may not currently be available via the SoFi platform. Any references to third-party products, services, or companies do not constitute an endorsement, recommendation, or solicitation by SoFi. Readers should independently evaluate their options and consider their individual financial needs and circumstances before making any decisions. ©2026 SoFi Technologies, Inc. All rights reserved.

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College is a time for students to learn and grow, both academically and in their personal development. As a parent, you want what’s best for your child, and that includes helping them pick the right college. Finding the right school for your child may require some time and research, and you’ll likely want to leave the final decision to your child.

As you consider various factors, it’s important to zero in on the ones that matter the most for a student. Keep reading for more on finding the right college for your child, including how to pay for college.

How to Find the Right College for Your Child

Depending on how much time you have to invest in the process, here are some tips that can help you and your child pick the right college for them.

1. Make a List

Start by creating a broad list of colleges that might be suitable for your child. Consider both local and out-of-state colleges, and don’t be afraid to let your child dream big.

Every student is different, so it’s worth curating a diverse list of options to consider. The general rule of thumb is for a student to apply to a mix of “target,” “reach,” and “safety” schools. This could be a good way to organize your child’s initial list of schools.

As you work through the other steps in the process and learn more about each school, you can refine your list.

2. Talk About What They Want to Study

Your high schooler may not yet know for sure what they want to do when they’re older, but they may already have an idea of what direction they want to go. It may be worth having an initial conversation with your child about choosing a major.

Once you have an idea of what they’re interested in, you can look at the colleges on your child’s list that excel in those areas of study. If there aren’t many, you could always consider adding more.

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3. Consider the Cost

A college education can get expensive, and some universities charge much more than others. If your child already has an idea of which schools they want to apply for or have already received their admissions letters, a key step is to dig into the cost of attendance for each school.

This step is important regardless of whether you’re planning to help your child cover the cost of their education. Finding a college with good value can reduce how much your student may need to borrow in student loans during their studies.

The cost of attendance isn’t the only important cost factor, however. If your child has already received an admission letter, consider whether there’s a financial aid package included, such as grants and scholarships. If there is, calculate the total amount you or your child would have to pay after applying that financial aid to get the net price.

4. Talk About Location

Discuss with your child whether they would prefer a college close to home or further away. Each person is different in this regard, and your teen’s wishes are important.

That said, sending a child off to college, especially out of state, can be a stressful experience for parents. It’s normal to feel nervous about this milestone in your child’s life, but don’t allow your anxiety to affect your role in the process.

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5. Learn About the Environment

Finding the right college for your child isn’t just about the school itself. It’s also about the environment the school provides. It may be worth making a trip to visit college campuses with your child to get a feel of the place, or, if you can’t, take virtual tours.

It may also be worthwhile to look into some of the extracurricular activities the schools provide. If your child is athletic, for instance, ask about intramural sports. If they want to study abroad, look into the quality of each school’s international programs.

Another factor to consider that can affect your child’s experience is classroom size. If you think your child may need more attention, a school at which every class is held in an auditorium with hundreds of other students may not be the right one.

6. Give Your Child Time

Picking a college may be easy for some students, but it can take time for others. If your teen is having a hard time, you may find it hard to find the right balance between being supportive and trying to make the decision for them.

As a happy medium, consider choosing a night each week to discuss college plans with your teen. Ask them what they’re thinking and offer help if they’re feeling stuck.

It can be frustrating to sit back and watch your child struggle, but allowing them to make the decision for themselves can help them develop the independence they’ll need in the coming months and years.

7. Be Supportive

No matter what your child decides, they need your support more than anything else. Remember that you’re finding the right college for your child, not for you.

And keep in mind that your child may choose to transfer at some point in the future if they decide the school is no longer a good fit.

Regardless of what happens, your support can give them the confidence they need to make their college experience a good one.

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Financing Your Child’s College

Once your child has picked a college, talk about how they’re going to finance their education. If you’ve managed to set money aside in a 529 plan or can help with your current income and savings, discuss the numbers and whether your teen will need to pick up some of the slack.

Also, talk about student loans and how to use them wisely, as well as how to reduce how much they’ll need to borrow. Ideas include applying for scholarships and grants, working part time, and borrowing only what they need.

You can also look into federal Parent PLUS Loans to help fund their education. If all federal aid options have been exhausted, your child can also turn to private student loans.

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The Takeaway

Choosing the right college for your child is a collaborative journey that balances academic aspirations, financial considerations, and personal growth. The ideal college is one at which your child feels challenged, supported, and inspired to thrive. By focusing on what matters most to them and maintaining open communication, you can help ensure they embark on a fulfilling college experience.

To finance your child’s college education, you can rely on cash savings, scholarships, grants, federal student loans, 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.

Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.

FAQ

How can parents and students begin the college search process?

You and your teen can start the college search process by building a broad list of colleges, including public, private, in-state, and out-of-state options. Research academic programs, campus culture, and admissions criteria. Include safety, match, and reach schools to provide flexibility and realistic choices. Narrow down the list through visits, conversations, and further research together as a team.

What financial factors should be considered when selecting a college?

Families should compare tuition, fees, housing, and other costs, as well as the availability of financial aid, scholarships, and grants when selecting a college. Understanding each school’s net price (what you actually pay after deducting aid) is key. Consider long-term implications, such as student loan debt and affordability over four years, when making decisions.

How does location influence the college decision?

Location affects everything from travel expenses to social life and access to internships in the college decision. A student may thrive in an urban campus with industry opportunities, or they may prefer a rural, close-knit environment. Being honest about preferences and visiting campuses can help determine the best geographic and cultural fit for your child.

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This content is for educational and informational purposes only. The products, services, or features discussed may not currently be available via the SoFi platform. Any references to third-party products, services, or companies do not constitute an endorsement, recommendation, or solicitation by SoFi. Readers should independently evaluate their options and consider their individual financial needs and circumstances before making any decisions. ©2026 SoFi Technologies, Inc. All rights reserved.

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

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