Pros & Cons of Using Retirement Funds to Pay for College

In a perfect world, all parents would have a 529 plan—or another education savings account—full of funds to cover their children’s college years. But there are many reasons why that may not be the case for you. If so, you’re likely looking into other options to pay for college.

One possibility you may be considering is dipping into your retirement funds. Depending on the type of retirement account you have, you might be able to take an early withdrawal or a loan from your retirement account, which you could use to fund your child’s education.

But using your retirement funds to pay for college isn’t always the best move. Before you decide to do it, you may want to consider both the benefits and the drawbacks, as well as some potentially less costly alternatives.

Before we jump in, it’s important that you’re aware that this article is a basic, high-level overview of some potential options when it comes to using retirement funds to pay for college. Further, because these topics (taxes and investments) are complicated, none of what’s written here should be taken as tax advice or investment guidance. Always talk to qualified tax and investment professionals with questions about your retirement accounts, and never rely on blog posts (like this one) to make important financial decisions.

A Few 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.

You May Be Able to 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That said, the withdrawn funds will still be considered taxable as income.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 would be able to withdraw the funds from the IRA and avoid the penalty.

You May Be Able to 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.

You’re 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.

A Few 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), then leave your job, you may be required to pay the loan in full right then, regardless of your original repayment term. If you can’t repay it, it’ll 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 lowers your balance. But it also means that the money you’ve withdrawn is no longer working for you.

Due to compound 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

Can you use retirement funds to pay for college? If you have the funds, it’s generally an option. But before you go ahead, consider these alternatives.

Scholarships and Grants

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

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

Finally, you and your child can search millions of scholarships from private organizations on websites like Scholarships.com and Fast Web . 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 some special 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.

Balance Your Child’s Needs and Your Own

Using retirement funds to pay for college is one way to help your child. But you probably don’t want to risk your future financial security. Take the time to help your child consider all of the options to get the money to pay for school.

If you do decide a private student loan is the right fit, SoFi is happy to help. In the spirit of complete transparency, we want you to know that we believe you should exhaust all of your federal grant and loan options before you consider SoFi as your private loan lender. That said, we do offer flexible payment options and terms, and don’t worry, there are no hidden fees.

If you’re considering a private student loan, you can find your SoFi rate today.


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

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Benefits of Using a 529 College Savings Plan

Most parents want their children to get the best higher education possible, but that dream comes with a high price tag. The growing costs of college mean parents who intend to help foot the bills need to plan, and as early as possible.

One way to save for college tuition is through a 529 college savings plan, named for the relevant section of the federal tax code.

Also known as a “qualified tuition plan ,” this is a type of tax-advantaged account that allows savings to grow through investment and funds may only be withdrawn for certain educational expenses.

While 529 plans have been around for more than 20 years, many parents still aren’t sure how they work. Yet 529 plans can be an effective way to save for your child’s education while taking advantage of tax benefits.

Here’s what you need to know about 529 plans and whether opening one is the right move for you.

529 Plan Basics

There are two kinds of 529 plans, and every state offers at least one.

Prepaid Tuition Plan

A prepaid tuition plan allows you to prepay tuition and fees at certain colleges and universities at today’s prices Such plans are usually available only at public schools and for in-state students. Only a few are accepting new applicants.

The main benefit of this plan is that you could save big on the price of college by prepaying before prices go up. And contributions are considered gifts, so deposits up to $15,000 a year qualify for the annual gift-tax exclusion.

The risk is that your child may not attend a participating college or university, so the prepaid tuition plan may pay less than if the beneficiary attended a participating school.

Also, if your state government doesn’t guarantee the plan, you may lose the payments you’ve made if the state runs into budget shortfalls.

Prepaid tuition plans may charge an enrollment fee and ongoing administrative fees.

The plans usually can’t be used for room and board, though Florida Prepaid plans, for example, offer a prepaid dormitory plan of two semesters of dorm fees for each year of state university coverage.

The Florida prepaid plans, guaranteed by the state, can be applied at schools in state, out of state, at public or private schools around the country, or even the world.

A plan can be transferred to another eligible student, or payments can be refunded.

Education Savings Plan

The second type of 529 plan is an education savings plan. Here’s how it works:

Making contributions. Contributions are flexible, meaning you can save monthly, quarterly, annually, or deposit a lump sum. Beyond parents making regular payments, 529 plans can be a clever way for the extended family to give a meaningful gift on birthdays or holidays.

Contributions are not deductible on the federal level, but lots of states provide tax benefits for saving in a 529 plan, such as deducting contributions from state income taxes or giving matching grants. Check your local tax laws to see if you qualify.

Investing your funds. Once you make contributions, a possible next step is to invest your funds. You will likely have a range of investment options to choose from, including mutual funds and exchange-traded funds, which vary from state to state.

You may want to tailor your choices to the date you expect to withdraw the money—you can possibly be more aggressive if you have a longer timeline, but may sway more conservative if you only have a few years. One option is to choose a target-date fund, which would automatically adjust your portfolio to become more conservative as your child’s college years approach.

That usually means a greater share of stocks initially and more bonds and cash over time.

Making withdrawals. Money can be withdrawn tax-free from a 529 plan to pay for any “qualified higher education expense,” which includes tuition, fees, books, computers, and room and board.

You can make withdrawals as long as your child is enrolled at least half-time at an accredited school, regardless of where in the United States it is, and occasionally abroad. (Starting in 2018, parents can also withdraw up to $10,000 a year to pay for K-12 tuition expenses.)

If you withdraw money for the above expenses, you won’t have to pay federal income tax, and often state income tax, on your earnings. If you withdraw the funds for other reasons, you’ll have to pay taxes, as well as a 10% federal tax penalty on the earnings.

There are some exceptions on the penalty—you won’t need to pay it if the beneficiary gets a scholarship, enrolls in a U.S. military academy, or dies. But taxes would still need to be paid on the earnings in those scenarios.
It is possible to change the beneficiary of a 529 plan if the original one no longer needs it, according to Edmit, a resource for college financial planning. For example, you can switch to a younger child if your oldest got a scholarship.

How 529 Plans Compare to Other Options

Compared to other methods of saving for college, 529 plans offer certain benefits. By investing the funds, this account gives your money the chance to grow over time. If you just leave your savings in cash or even a high-interest savings account, you may actually be losing money as the years go by, as it likely won’t keep up with inflation.

The 529 plan also has advantages when it comes to calculating financial aid. When you fill out the Free Application for Federal Student Aid (FAFSA®) , the account is considered an asset.

If the parent owns it, only up to 5.64% of the amount saved counts when the government calculates the “expected family contribution” in deciding on the financial aid package. (If the student owns the plan, up to 20% of the savings can count in the calculation.)

The bottom line is that while a 529 plan may slightly reduce available financial aid, it will likely save much more overall by reducing the amount of loans you or child need to take out.

If you put your college savings in an online IRA, that won’t be counted as a parental asset on the FAFSA since it’s a retirement account. The 529 plan, though, comes with more tax benefits. Specifically, you can withdraw both contributions and earnings any time from a 529 plan without paying taxes or penalties, as long as it’s for qualified educational expenses.

With a Roth IRA, you can withdraw your contributions at any time, also without taxes or penalties. But you generally must be at least age 59½ and have had the account for at least five years to withdraw earnings tax- and penalty-free.

Unlike 529 plans, you can only contribute if you fall below a certain income threshold , and there’s a limit to how much you can put in each year ($6,000 for most individuals in 2021, or $7,000 if 50 or older).

Additionally, some 529 savings plans allow you to deduct contributions on your state income taxes, while any contributions to Roth IRA accounts are with after-tax dollars.

Choosing a 529 Savings Plan

Every state offers a 529 savings plan, but not all are created equal. When trying to find the best 529 college savings plan, you may want to think about the tax benefits and the fees.

First, you may want to understand whether you qualify for a state income tax deduction or credit for your contributions, based on your state of residence and the plan. Check your state laws and consult a tax professional to learn more about your particular situation.

Some states, such as New York, only offer deductions to in-state taxpayers who use their plan. Other states, including Pennsylvania, allow residents to take a deduction regardless of which state’s plan they use.

Some states, like Indiana, offer income tax credits instead of deductions. And other states, such as North Carolina, don’t offer any deductions for 529 contributions.

The next thing you could consider are the fees associated with your plan, which could include enrollment fees, annual maintenance fees, and asset management fees. Some states let you save on fees if you have a large balance, contribute automatically, are a state resident, or opt for electronic-only documents.

The Takeaway

Ah, a college degree, something that 70% of jobs will require by 2027, by at least one informed estimate. Saving for college could be eased with a tax-advantaged 529 plan. It’s worth looking into the two prongs of the plan.

Looking for another option to pay for your child’s education?

A parent student loan could be a solution. SoFi offers private parent student loans with competitive rates and no fees. Plus, SoFi offers two repayment options to work with you and your budget.

Parents with strong credit and income may find lower rates with a private loan than with a federal Parent PLUS loan.

It’s easy to check your rate.


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

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Living On Campus vs Living Off Campus

One of the most exciting parts of heading off to college for many students, is living on their own for the first time. Whether that be in a freshman dorm, an on campus apartment, or in their very own off campus living space.

Some students may even choose to live at home during some or all of their college years. Leaving home, not having to follow their parent’s rules, and living amongst countless other coeds is undeniably exciting.

There’s no wrong answer about where to live in college as this is a highly personal decision. That being said, to gain a better understanding of the general pros and cons of living on campus vs off campus, keep reading!

Pros of Living On Campus

Students dream of the day they’ll pack their bags and begin their new life at college and a major part of that fantasy involves living on campus. Fair enough! Living in a freshman dorm with hoards of other students the same age or making new friends in a sorority house can be really fun. There are some benefits of living on campus that are hard to deny.

Generally, arranging on campus housing is relatively easy, especially for freshmen who may be more likely to get a spot, or may be required to live on-campus. Unlike apartment hunting, which can be time consuming and challenging, living on campus can be a more straightforward arrangement and there are generally additional resources provided for students in on-campus housing.

For example, there is generally a RA (Resident Advisor/Assistant) that can answer any questions and help resolve conflicts with roommates. Plus RA’s may run programming for the floor, or dorm, to encourage community and help students meet each other.

Typically students living in on campus housing can also purchase a meal plan, which means they don’t need to find time to grocery shop or cook meals when they should be cramming for finals.

Living on campus also means students are conveniently close to all of the resources provided by their school. Of course, they can get to class quickly, but they’ll also have easy access to on campus dining, gyms and fitness centers, the health center, libraries, and student recreation centers. Attending on campus events, rushing to office hours after class, and sleeping in is a lot easier when living on campus.

Cons of Living On Campus

While very convenient and exciting in many ways, on campus housing has its downsides. One of the most notorious cons of living on campus is that some schools may not allow first year students to choose their roommate.

While some schools try to match students based on their preferences (night owl vs early birds or clean vs messy), sometimes, getting an assigned roommate that is truly a good fit comes down to luck.

Roommate pairings can go so right (best friends for life) or so wrong (passive aggressiveness). Having a messy or noisy roommate can add to stress during an already challenging stage of life.

Pros of Living Off Campus

Thanks to Hollywood’s imagination and penchant for movies about wild college lifestyles, it’s easy to picture living in dormitories or on Greek row as the must-have college experience. But there are actually some benefits associated with living off campus.

Some students may greatly appreciate having a bit of separation from their school life and their personal life, especially as they inch closer to graduation and they begin to plan their transition to the post-college era.

One major benefit of living off campus is the potential to save some money on living expenses and to have some extra flexibility. Living off campus can be cheaper than living on campus depending on factors like where the college is located and how close to campus the house is located.

Students may also save money on room and board if they are able to live with a family member or rent a room in a house with multiple roommates, instead of getting their own apartment. Being able to cook their own meals in lieu of a meal plan could also potentially help them cut costs. It may take some number crunching to determine which option—on or off campus—is cheaper for you.

Another factor to consider is the lease on off campus housing. Students who are renting an apartment or house may be required to sign a 12-month lease as opposed to on campus housing which generally runs in tandem with the school’s schedule. This could be considered a pro in some cases, for example, if you plan to stay in your college town full year pursuing internships or research opportunities or your hometown is so far away that you cannot go home frequently. It could end up being a con if you are on the hook for a lease when you don’t actually need to be in town.

Aside from moving inconveniences, there are a lot of other day-to-day hassles of living on campus, including: having to follow campus rules, dealing with fire alarm drills, and not being able to choose a roommate.

Cons of Living Off Campus

In many ways, living off campus can offer students more flexibility but it can be a hassle. One example of this is that the student may have to commute.

While some students may be able to find off campus housing within walking distance to school, others may have to drive. This brings its own set of complications, such as traffic and parking on some college campuses can be expensive and competitive.

A commute may also make it less appealing to participate in on campus events and take advantage of campus amenities like gyms, health centers, and libraries.

Spending time with friends may also take more coordination than just walking down the hall and saying hey. Students who live on campus, and without a car, can also cut costs by not having to pay for car costs like gas, insurance, vehicle registration, maintenance, and parking passes.

When it comes to living in off campus housing, many students may also not be prepared to take on the responsibilities of adult living. While each student’s living situation will vary depending on their specific housing arrangements, many can expect to cook more, clean more, and be more responsible for properly maintaining their off campus housing. And if they’re having issues with their roommate, there is no RA to help them clear the air.

Not to mention, they may find it challenging to secure a responsible and respectful roommate who will pay their fair share of rent and utilities on time. Some students simply may not be ready to face all of the very adult challenges of truly living on their own.

Keeping School Requirements In Mind

At the end of the day, there is no “best” choice for a college living arrangement. There are so many variables such as the school’s location, the student’s priorities and personality, and how much each option will cost.

One caveat is that some students may not have a choice about whether they live on campus or not. Some colleges and universities require their students to live on campus for a certain amount of years. This is a more common requirement for freshman students as colleges want them to integrate into campus life and feel engaged and supported.

If a student does not want to live on campus, despite there being a requirement to do so, it’s worth seeing if the school allows students to petition to live off campus.

Allowances are sometimes made for those whose families live nearby, students who have health issues, and even students with specific dietary requirements that can’t be met easily through on campus dining options.

On the other end of the spectrum, some colleges only guarantee housing on-campus for a certain number of years, resulting in students living off campus at one time or another.

Some colleges and universities provide online resources and other information for students who are interested in living off campus. These resources can help students find housing and make the transition to off campus housing a bit easier.

Financing College Life

Regardless of where you live, you’ll need to figure out how to pay for it. Some students may be able to use the financial aid they receive to help pay for their room and board.

Scholarships may have restrictions on how they can be used, and room and board or rent may not be eligible expenses. Review the details of specific scholarships to understand what costs they can help fiance. Student loans can be used to pay for room and board as well.

There are two types of student loans that may be available to collegiates and their families: private and federal student loans.

There are two main differences (and many smaller ones) between private and federal student loans, the main difference being where they come from. Federal student loans come from the United States government and private loans can be obtained from private lenders such as banks, credit unions, and select state-based or state-affiliated organizations.

For federal loans, the government has set very specific terms and they are followed to the letter of the law. Private lenders however set their own terms and interest rates and repayment plans vary based on the lender. Federal students loans have certain benefits that private loans may not offer, such as fixed interest rates and income-driven repayment plans. Typically, private loans are more expensive than federal ones.

Online lenders can also offer private student loans. To make the process of applying for private student loans less stressful, SoFi has an application process that can be completed online. That way, students can focus on what really matters, which is hitting the books. Because flexibility matters, with SoFi Private Student Loans are fee free and students can add a cosigner to their application.

Learn more about SoFi’s Private Student Loans to help cover the entire cost of attending college.



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

External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
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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Balancing Being a Student Athlete & Academics in College

Going to college is a lot of work. Between studying for exams, cranking out term papers, and keeping up on homework, there is a lot to stay on top of.

For student athletes, there is even more to juggle. Their chosen sport is basically a full-time job―and a physically-demanding one at that. However, there is good news for the nearly 500,000 student athletes competing in National Collegiate Athletic Association (NCAA) sports.

Despite the added challenges, student athletes have considerably higher graduation success rates than their classmates. On average, just 58% of students who started college in the fall of 2012 had earned a degree within six years.

Meanwhile, student athletes during the 2018-2019 academic year had the following graduation success rates:

•  Division I: 89%
•  Division II: 73%
•  Division III: 87%

Although student athletes are showing that hard work pays off, coming up with a game plan for college can help cross the finish line to graduate. Here are some tips for balancing your responsibilities in the classroom and on the court (or wherever you play).

Planning Your Class Schedule Accordingly

Often, coaches will outline clear timeframes for practice and training that student athletes need to plan their class schedules around. Additionally, games and competitions are usually scheduled far enough in advance for student athletes to know which days of the week they’ll be traveling most often.

Still, there may be some discretion in choosing class times. Keeping in mind when you prefer to eat, sleep, and study is key to creating a schedule that will help you perform as a student and athlete.

Although many student athletes maintain an active training schedule throughout the year, the official NCAA season (or the majority of it) for many sports occurs during either the fall or spring semester. Student athletes can take advantage of a more flexible offseason schedule by taking more academically-demanding classes and those that would otherwise conflict with their practice schedule.

Keeping Your Eye on the Prize

Student athletes invest countless hours in their chosen sport. Yet, the vast majority will graduate and pursue a career outside athletics. On average, just 2% of college student athletes move up to professional leagues after NCAA competition.

Academics are an integral part of being a successful student athlete. Choosing a degree program you’re passionate about and that supports your career goals can help keep you motivated and on track to graduate.

Each team and college may maintain its own standards for GPA requirements to compete, but the NCAA sets minimum requirements too. Division I and Division II athletes are required to meet initial eligibility criteria set by the NCAA while Division III student-athletes are held to the standards set by the schools they attend.

Just skating by in terms of GPA may allow you to compete, but it could hurt your candidacy for internships and jobs after graduation.

Building Relationships With Your Professors and Classmates

This advice could apply to any college student, but student athletes in particular stand to benefit from getting to know their professors and classmates early on in the semester.

To varying degrees, college sports teams travel off-campus for games and competitions, which means student athletes might miss some in-person class time. Meeting with professors at the beginning of the semester can show a commitment to your studies and help hash out any scheduling conflicts for classes and exams.

Also, making friends with classmates can be beneficial for exchanging class notes to cover each other’s absences, as well as forming study groups.

Finding an Accountability Buddy

Student athletes know the importance of teamwork. In addition to pushing each other to greatness at practice and the gym, teammates can be a support system to help achieve your academic goals too. Forging a partnership or study group to hold each other accountable to these goals, on and off the court or field, is one such strategy.

For starters, who can better relate to your experience and challenges balancing athletics and academics than a teammate? Together, you and your accountability buddy can capitalize on downtime on the road to away games to tackle assignments or plan a study night before a big game to resist the urge to party.

It’s okay if your goals are different. The important thing is that you find an accountability buddy you feel comfortable with and who will help keep you on track.

Prioritizing Health and Wellness

Both academics and sports can be demanding, and taking them on simultaneously requires serious stamina. Prioritizing physical and mental health by eating well, getting enough sleep, and finding ways to destress can help prevent burnout and stay sane. It’s okay to slip up every now and then, but creating a plan that you can stick to could make a difference in succeeding as a student athlete.

It’s Okay to Ask for Help

Many college students deal with stress between exams and assignments. For college student athletes, the pressure to succeed athletically and academically can be a lot to handle.

There is no shame in asking for help, and the sooner the better. College tutors can assist with everything from proofreading essays to prepping for a chemistry test. Approaching professors early with any concerns could also help with extra credit opportunities or a chance to redo an assignment.

What About Redshirting?

For Division I athletes, the NCAA regulation grants college student athletes a span of five years to compete in four years of athletic competition. For Division II and Division III students there is a 10-semester, or 15-quarter clock. This means that student athletes may take a year off from competing―a practice known as redshirting―as long as they continue taking coursework and meet other eligibility requirements.

Traditionally, redshirting is applied to allow students athletes more time to develop or recover from a significant injury. However, student athletes may be able to use redshirting to their advantage in terms of coursework.

Redshirting may allow students to take a more manageable course load by stretching their degree over ten semesters instead of eight. Alternatively, it can provide extra time to complete both a bachelors and graduate degree in one go.

Keep in mind that redshirting guidelines vary by division. For instance, Division I and II athletes are permitted to practice with their team during their redshirt season, whereas Division III athletes may not.

Paying for College

College is a big investment, but fortunately there are options for funding education. Financial aid, grants, work-study programs, and scholarships may be enough to pay for all or a portion of tuition and room and board.

Athletic Scholarships

There is more than $3 billion in athletic scholarships available to Division I and II student athletes, though it varies by sport. Athletics classified as headcount sports offer full ride scholarships to a certain number of athletes per team, whereas equivalency sports traditionally extend partial scholarships. Head count sports include the following:

For Men:
•  Division I basketball
•  Division I-A football

For Women:
•  Division I basketball
•  Division I tennis
•  Division I volleyball
•  Division I gymnastics

For equivalency sports, it’s up to the college and coaching staff to decide how to divide scholarship funds between student athletes.

Student Loans

In the event that scholarships, grants, and financial aid are not enough to cover tuition and living expenses, student athletes can take out student loans to help them cover the difference.

SoFi’s no-fee Private Student Loans, for example, let students apply online and learn if they are pre-qualified in a matter of minutes. Flexible loan repayment plans can help potential borrowers find a loan that works with their budget and financial plan.

Learn more about SoFi’s Private Student Loans and get ahead of the game on financing your education.



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

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

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College vs. University: What’s the Difference?

For many Americans, the words “college” and “university” are used virtually interchangeably —as attendees at both can earn an undergraduate degree. Having two terms describe similar types of schools can —understandably—be perplexing.

So, how’s a confused student to answer the question: “What’s the difference between a college and a university?”

Whether they opt to attend a college or university, students can earn a bachelor’s degree at either type of higher education institution. Still, some types of US colleges don’t offer four-year degrees— especially, community colleges and career colleges, which typically offer associates degrees and certificate programs.

When it comes to getting an undergraduate degree, understanding the differences between colleges and universities can be key in applying to the school that’s the right fit. (Uncertain where to go? Check out this helpful “What College Should I Go To?” quiz!)

Comparing College vs. University

So, how might a student compare the difference between a college and a university? Colleges and universities are both higher educational institutions that people attend after finishing high school, but there are some major distinctions between the two. Here’s a helpful overview explaining the difference between college vs. university:

Community Colleges

When it comes to understanding colleges, there are a few different types to keep in mind. Community colleges and career colleges are usually smaller, often offering two-year degrees, like an Associate’s Degree or pre-professional certificates. Many community colleges also host online degrees and, in some cases, do not expect students to live on campus.

Some students attend a community college with the intention of then transferring to a four-year college or university to get their undergraduate degree. Others opt for community colleges precisely because they want to earn a pre-professional or technical certificate and then work right away.

Four-Year Colleges

Another major type of college is a four-year institution. These types of colleges offer undergraduate degrees, typically a Bachelor of Arts (BA). Sometimes, students choose to go to community college first because it is less expensive. But, some students will choose to go directly to a four-year college after high school.

Generally, four-year colleges are smaller schools that tend to focus on offering undergraduate degrees and a broad-based curriculum, including the liberal arts. Frequently, four-year colleges expect students to reside on campus during some or all of their studies.

Understanding Universities

Universities can also offer undergraduate degrees, but they differ from colleges in some significant ways. Usually, a university is a larger institution, frequently offering graduate degrees as well.

In addition, most universities tend to be research-focused, hosting on-campus laboratories and hiring faculty recognized for their publications or academic findings. Universities can be either public or private.

One extra (and confusing) snarl here: at some institutions, the word college is also used to describe certain departments or sub-divisions of the school. For instance, a university might refer to the College of Liberal Arts, or the College of Engineering.

Examining Degree Programs

If a student is applying for their undergraduate degree, it can be helpful to know ahead of time which course of study (i.e., pre-med) or major is of interest. This way, it’s possible to research each college or university’s undergraduate academic programs.

Since the terms college and university are sometimes used interchangeably, it may be useful for applicants to do detailed research to see if a school’s academics might further their desired career or study goals.

Pros and Cons of College

When debating college vs university, one possible pro of choosing a college over a university is smaller size. Not all colleges are smaller than universities, but it is a common difference.

Sometimes, going to a smaller school could mean getting more one-on-one time with professors. For students hoping to maintain a relationship with professors after graduation (or those intending to apply to graduate school), more interaction with professors can be an added benefit. Having smaller class sizes could also make it easier to get to know classmates.

Some colleges, especially liberal arts colleges, tend to focus more on general education (rather than offering pre-professional or research-based programs). So, if students want to focus on a particular research topic (or career trajectory) from the start of their undergraduate career, they may want to check that the institutions they’re applying to actually offer those courses of study.

Colleges could also have more limitations in regards to class availability, as some limit the number of students allowed per class. This isn’t the case for every college, so it can be useful to research each specific school’s policies carefully.

Depending on the major chosen, some classes may not be offered every semester at smaller colleges, which could require that students engage in more long-term planning (to ensure they’re able to take all required classes before graduating).

Pros and Cons of University

Universities are, generally, larger and therefore boast more opportunities, when it comes to availability of classes, diversity of majors, and extracurricular activities offered outside of class. Whether it’s finding a niche major or hosting a vast variety of social clubs, larger universities often vaunt a buffet of choices for students.

Both public and private universities offer four-year degrees. There’s typically a difference in price, with public universities often being more affordable (and, in some instances, offering in-state tuition discounts for residents).

Universities might also offer both undergraduate and graduate degrees. Because universities can offer graduate degrees, there’s usually a stronger commitment to research at these schools, including master’s or doctoral degree programs.

For students who are looking to go to graduate school later on, some universities may offer easier admission to their own grad programs for students who finish their undergrad at the same school. If graduate school is a part of a student’s long-term goals, then a research-focused university could be worth a think.

The cons of going to a university can also be tied to size. A larger university can mean there are fewer opportunities for a student to secure one-on-one time with professors. There may be more large lecture classes offered at a university than at smaller colleges, too.

Large class sizes can also make it harder for students to get to know their fellow classmates.

Why Choose One Over the Other?

After all this talk about university vs. college, some readers might be craving a definitive

answer. Ultimately, the choice will depend on each student’s specific situation and academic or career goals. Identifying a specific course of study (or professional trajectory) up front might make it easier to choose which schools to apply to and, ultimately, which one to attend.

It’s important to take into account whether or not research experience is desired, graduate school is a goal, or extracurriculars are important to a student’s experience.

Neither a college or university is, by definition, a better choice. It’s okay to apply to both colleges and universities, as long as each school meets a student’s specific needs.

Funding College or University

Pricing can also impact a student’s choice of college. Applicants may want to consider what each school will cost to attend, opting to schools within their budget or those that offer more generous financial aid.

Whether opting for a college or university, both types of institutions can come with a hefty price tag. Public universities are generally more affordable for in-state students. Even then, it may be necessary for some students to pursue additional financing to pay for their undergraduate education.

Many students opt to fund college through multiple financial resources. Options for funding college include financial aid from the government (grants or loans), scholarships, family resources, and private loans.

When it comes to loans and grants, the total amount of aid you received cannot surpass the cost of attendance.

When students apply for FAFSA (Free Application for Federal Student Aid), they can determine if they’re eligible to receive grants or loans from the US government. Eligibility depends on the student’s financial need and additional certification requirements.

Students may be eligible to receive grants, loans, or a combination of the two. Grants typically don’t have to be repaid, but generally loans do. Federal loans come with repayment benefits that usually aren’t available with private student loans, like lower fixed interest rates and flexible repayment options.

Scholarships are sometimes merit-based, meaning they’re awarded based on achievement. In other cases, they’re based on financial need or community-based factors. One place to start looking for scholarships is with a school’s financial aid office.

Private student loans are another option for pay for the cost of college. Private loans are disbursed by non-governmental financial institutions and rates are, generally, based on the student’s credit history and income.

It’s important to do research first to find out how private loans may differ from lender to lender.

SoFi, for instance, offers no-fee private student loans. To learn how private student loans might help pay for a college degree, students may want to check out this guide to private student loans.

Curious if a private student loan is the right choice? SoFi can get you a quote in just 3 minutes!

Check out private student loans with SoFi.



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

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

Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. A hard credit pull, which may impact your credit score, is required if you apply for a SoFi product after being pre-qualified.
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.
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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