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College credit hours are the academic units that measure your progress toward a degree. They determine your enrollment status, impact federal financial aid eligibility, and define the requirements for degrees like a bachelor’s or master’s. If you’re applying to college or you’re already enrolled, it’s important to understand how credit hours work. What follows is an essential guide to credit hours, from how they work to what they mean for your tuition bill, GPA, and graduation timeline.

What Is a Credit Hour?

A college credit hour is a unit that represents the amount of work for a course, typically based on time spent in class and doing homework. It is a key metric used to determine a student’s progress toward a degree, define full-time vs part-time status, and calculate tuition costs and financial aid eligibility.

💡 Quick Tip: Pay down your student loans faster with SoFi reward points you earn along the way.

One Credit Hour Is Equal to How Many Hours?

According to federal guidelines, one credit hour is roughly equal to one hour of classroom or direct faculty instruction and at least two hours of out-of-class student work per week. That means you can expect to spend about three hours in the classroom and roughly six hours working independently each week for the average three-credit course.

Impact of Credit Hours on Tuition and Financial Aid

The number of credits you take not only impacts your total workload but also influences the cost of your tuition. For example, full-time students (defined as taking 12 or more credit hours) typically pay a flat tuition fee per semester, whereas part-time students (taking fewer than 12 credit hours) often pay on a per-credit basis.

Credit hours also significantly impact financial aid, as your enrollment status (i.e., full-time vs part-time) determines eligibility and the amount of aid you receive. Dropping below 12 credit hours, for example, can reduce a student’s Pell Grant award amount. And students who want to take out a federal student loan need to be enrolled in college at least half-time (six credit hours or more).

How Many Hours of Study Time per Credit Hour Online?

Online college courses typically require the same amount of time as in-person classes. For each credit you take, you can expect to spend around one hour of online class time, plus at least two hours studying and doing homework. So for a three-credit online class, you’ll want to make sure you have at least nine hours per week you can devote to taking the course. That includes three hours of online instruction and six hours of independent work.

Recommended: Do College Credits Expire?

How Many Credit Hours Does a Course Have?

College courses can range between one and five credits, but are typically three or four. Most common courses, like history or literature, are three credit hours, meeting for approximately three hours per week. Language classes, which may rely on an immersion technique and therefore meet more often, can be worth four or five credits. A science lab, often taken in conjunction with a science lecture, may only meet once a week, making it worth one credit.

Credit Hour Calculator

To estimate the total amount of time you’ll spend on classes in a semester, add up the credits you’re taking, multiply that number by three hours (or more, depending on your university’s guidelines), then multiply that total by the number of weeks in a semester.

Below is an example credit hour calculator chart to determine total hours spent on one or more credits.

How Many Credit Hours Do You Need to Graduate?

The exact number of credit hours you need to graduate varies by institution, degree type, and specific program. Below are some general guidelines.

Bachelor’s Degree Credit Hours

Bachelor’s degrees are generally 120 credits minimum and take four years to complete. Schools that operate on a quarterly basis (four terms a year), usually require 180 credits to graduate.

Students enrolled in a bachelor’s program are generally required to complete core curriculum and various credit hour types: general education, major/minor, and elective credits.

General education courses are required courses for undergraduate students that provide knowledge and skills outside of their major. They often cover foundational subjects such math, literature, and sciences. However, the core curriculum might vary by major. For instance, a student majoring in marketing might take intro economics courses, whereas an architect student may take intro art history courses.

Major or minor credit hours are classes related to a student’s field of study. They are often categorized into lower- and upper-division credits. Students must typically complete lower-division courses in order to enroll in upper level courses. Internships may also be mandatory and are converted into credits (generally up to six).

Finally, bachelor’s programs require elective credits — courses unrelated to a student’s major and general requirements. Students sign up for courses out of interest or to complement their major.

Recommended: What Is the Difference Between B.A. and B.S. Degrees?

Master’s Degree Credit Hours

A master’s degree can range from 30 to 60 credits. Students typically need to complete a thesis or project at the end of the program. If you’re enrolled full-time in a 30-credit master’s program, you might only need one year to complete your degree. However, a 60-credit program typically takes two years of full-time attendance to complete.

How Do Semester Credit Hours Influence GPA?

Semester credit hours influence your grade point average (GPA) by acting as a weight; a higher number of credit hours means a course has a greater impact on your overall GPA. This is because each course’s contribution is calculated by multiplying its grade points by its credit hours.

Grade points work as follows: A = 4, B = 3, C = 2, and D = 1. The grade point is multiplied by the number of credit hours to give you your quality points. Your final GPA is the total number of quality points earned divided by the total credit hours taken.

For example, if you score an A in your three-credit chemistry class, it has more impact on your GPA than the A in your one-credit photography class. Below is an example of how grades and credit hours impact GPA.

The chart above illustrates that if you score all As in your three-credit courses, but all Bs in your one-credit courses, you still walk away with a 3.75 GPA.

By contrast, if all of your one-credit courses are As and all of your three-credit courses are Bs, you end up with a lower GPA, as illustrated in the chart below.

What Is the Cost per Credit Hour?

At public universities, the average college credit costs $406 for in-state students, or about $1,218 per three-credit class, according to the Education Data Initiative. The average private four-year university charges $1,469 per credit hour, or $4,406 per three-credit course. These averages don’t represent the full cost of attendance (COA), however, since they don’t include room and board, books, and daily living expenses.

💡 Quick Tip: Even if you don’t think you qualify for financial aid, you should fill out the FAFSA form. Many schools require it for merit-based scholarships, too.

The Takeaway

Earning a degree means accumulating a certain number of college credit hours, which represent the amount of instructional and study time required for each course. Understanding how credit hours work can help you plan your academic workload, estimate tuition costs, and track your progress toward graduation.

Whether you’re pursuing an associate, bachelor’s, or master’s degree, being aware of credit hour requirements and their impact on your academic standing and financial aid is crucial for a successful college journey.

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

FAQ

How many hours is one credit hour?

According to federal guidelines, one credit hour is roughly equal to one hour of classroom or direct faculty instruction and at least two hours of out-of-class student work per week. That means you can expect to spend about three hours in the classroom and roughly six hours working independently each week for the average three-credit course.

What does three credit hours mean?

Three credit hours typically mean that a course requires approximately three hours of in-class instruction or direct faculty interaction per week, along with at least six hours of out-of-class work (studying, homework, projects) each week. This is a common structure for many standard college courses.

How many credit hours do you need?

The number of credit hours you need depends on the type of degree you’re pursuing. For a bachelor’s degree, you typically need a minimum of 120 credits. Master’s degrees usually range from 30 to 60 credits.

Photo credit: iStock/asbe

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

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

SoFi Bank, N.A. and its lending products are not endorsed by or directly affiliated with any college or university unless otherwise disclosed.

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

SOISL-Q425-026

Many of us simply don’t have the cash on hand to pay for college or graduate school out of our pockets. For the 2024-25 school year, the College Board estimates it costs $43,350 on average annually to attend a private non-profit four year university and $11,610 for in-state students at a public four-year school.

That means you might need to take out student loans to fund your education.To make sure you’re not in danger of defaulting on your loans or paying too much, it’s important to understand some student loan basics.

When you take out student loans, they’re either private or federal — meaning they either come from a private lender, like a bank, or are backed by the federal government.

Federal student loans are either subsidized or unsubsidized Direct Loans. There are also Federal Direct PLUS loans for parents. Interest rates for federal loans are set by Congress and stay fixed for the life of the loan. Federal student loans come with certain protections for repayment.

But what are the differences in the types of federal loans? When you’re weighing your options, you might want to understand some of the differences between a Federal Direct Unsubsidized Loan vs. a Direct Subsidized Loan vs. a private student loan, so you can evaluate all of your options.

What Is a Federal Direct Unsubsidized Loan?

The federal government offers two umbrellas of Direct Loans: unsubsidized and subsidized. When you take out a loan, the principal amount of the loan begins to accrue interest as soon as the loan is disbursed (when the loan is paid out to you). That interest has to be paid or it is added onto the loan amount.

Subsidized Federal Student Loans

On a Federal Direct Subsidized Loan, the federal government (specifically, the U.S. Department of Education) pays the interest while you’re in school and during the six-month grace period after you graduate. On a Federal Direct Unsubsidized Loan, by contrast, you are responsible for paying all of the interest on the loan from the moment it starts accruing.

Since the interest is paid for you while you are in school on a subsidized loan, it doesn’t accrue. So the amount you owe after the post-graduation grace period is the same as the amount you originally borrowed.

💡 Quick Tip: You can fund your education with a competitive-rate, no-fees-required private student loan that covers up to 100% of school-certified costs.

Unsubsidized Federal Student Loans

On a Federal Direct Unsubsidized Loan, the interest accumulates even while you’re in school and during the grace period — even though you aren’t required to make any payments while in school.

The interest is then capitalized, meaning it gets added to the total principal amount of your loan. That amount in turn accrues interest, and you end up owing more when you graduate than you originally borrowed.

Of course, you can make interest payments on your unsubsidized loan while you’re in school to save yourself money in the long run. However, you’re not required to start paying off the loan (principal plus interest) until six months after leaving school.

For the 2025-2026 school year, the interest rate on Direct Subsidized or Unsubsidized Loans for undergraduates is 6.39%, the rate on Direct Unsubsidized Loans for graduate and professional students is 7.94%, and the rate on Direct PLUS Loans for graduate students, professional students, and parents is 8.94%. The interest rates on federal student loans are fixed and are set annually by Congress.

Origination fees for unsubsidized and subsidized loans is set at 1.057% for the 2025-2026 academic year.

How Do You Apply for a Federal Direct Unsubsidized Loan?

The first step to finding out what kind of financial aid you qualify for, including Federal Direct Unsubsidized Loans and Subsidized Loans, is to fill out the Free Application for Federal Student Aid (FAFSA®).

Your school will then use your FAFSA to present you with a financial aid package, which may include Federal Direct Unsubsidized and Subsidized Loans and other forms of financial aid like scholarships, grants, or eligibility for the Work-Study program.

The financial aid and loans you’re eligible for is determined by your financial need, the cost of school, and things like your year in school and if you’re a dependent or not.

Who Qualifies for Federal Direct Unsubsidized Loans?

Federal Direct Subsidized Loans are awarded based on financial need. However, Federal Direct Unsubsidized Loans are not based on financial need.

To receive either type of loan, you must be enrolled in school at least half-time and enrolled at a school that participates in the Federal Direct Loan program. And while subsidized loans are only available to undergraduates, unsubsidized loans are available to undergrads, grad students, and professional degree students.

💡 Quick Tip: Even if you don’t think you qualify for financial aid, you should fill out the FAFSA form. Many schools require it for merit-based scholarships, too.

Pros and Cons of a Federal Unsubsidized Direct Loan

There are pros and cons to taking out federal unsubsidized direct loans.

Pros

•   Both undergraduates and graduate students qualify for Federal Direct Unsubsidized Loans.

•   Borrowers don’t have to prove financial need to receive an unsubsidized loan.

•   The loan limit is higher than on subsidized loans.

•   Federal Direct Loans, compared to private loans, come with income-based repayment and certain protections in case of default.

Cons

•   Federal Direct Unsubsidized Loans put all the responsibility for the interest on you (as opposed to subsidized loans). Interest accrues while students are in school and is then capitalized, or added to the total loan amount.

•   There are limits on the loan amounts.

Recommended: Should I Refinance My Federal Loans?

The Takeaway

Federal Direct Unsubsidized Loans are available to undergraduate and graduate students and are not awarded based on financial need. Unlike subsidized loans, the government does not cover the interest that accrues while students are enrolled in school. Unsubsidized federal loans are eligible for federal benefits like income-driven repayment or Public Service Loan Forgiveness.

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

FAQ

How does a Federal Direct Unsubsidized Loan work?

Federal Direct Unsubsidized Loans are student loans offered by the U.S. Department of Education that are available to both undergraduate and graduate students, regardless of financial need. Unlike subsidized loans, interest begins to accrue from the moment the funds are disbursed, even while the student is still in school and during the grace period. If you choose not to pay the interest while in school, it will be capitalized, meaning it is added to the principal balance of the loan. Repayment of the principal and accrued interest typically begins six months after you leave school or drop below half-time enrollment.

Is it good to accept a Federal Direct Unsubsidized Loan?

Accepting a Federal Direct Unsubsidized Loan can be a good option for many students, particularly because eligibility is not based on financial need, making them accessible to a wide range of undergraduates, graduate students, and professional degree students.

While you are responsible for all the interest that accrues from the time of disbursement, these loans offer several benefits that private loans may not, such as relatively low fixed interest rates, an income-driven repayment option, and potential eligibility for federal loan forgiveness programs like Public Service Loan Forgiveness. You also have the option to defer payments while in school and during a grace period, giving you flexibility.

What are the disadvantages of an unsubsidized loan?

The main disadvantage of an unsubsidized loan is that interest begins to accrue immediately after the loan is disbursed. Unlike subsidized loans (where the government pays the interest while you’re in school and during your grace period), with an unsubsidized loan, you are responsible for all the interest that accumulates from the start. If you don’t make interest payments while in school, this accrued interest will be capitalized (added to your principal balance), meaning you’ll end up owing more than you originally borrowed and paying interest on that larger amount.

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

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

SoFi Bank, N.A. and its lending products are not endorsed by or directly affiliated with any college or university unless otherwise disclosed.

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

SOISL-Q425-023

After four years of hard work in high school, the moment of truth arrives as college acceptance letters begin to roll in. If you’re lucky enough to receive multiple offers, you’ve got a big decision to make.

Most final enrollment choices must be made by May 1st, widely known as College Decision Day. This is the deadline for prospective students who apply “regular decision” to confirm their enrollment and submit a nonrefundable deposit.

Making this choice can be difficult, with a number of factors to consider. Below are seven tips to help you and your family confidently navigate the decision-making process ahead of College Decision Day.

1. Getting Organized

While the hard work of submitting college applications is done, high school seniors still have several important tasks and deadlines to manage to ensure a smooth transition to college.

Here are some deadlines to keep in mind and documents you’ll want to organize leading up to (and just after) Decision Day.

Key Deadlines (for 2026 Entry)

•   FAFSA® submission: The federal deadline to submit the Free Application for Federal Student Aid (FAFSA) for the 2026-2027 academic year is June 30, 2027. However, individual states and colleges have their own FAFSA deadlines, which are often much earlier than the federal deadline. It’s a good idea to submit the FAFSA as early as possible because many grants and scholarships are awarded on a first-come, first-served basis until the funds run out.

•   CSS Profile (if required): The deadline for submission varies by school but typically falls between January 1 and March 31 for regular decision students.

•   College Decision Day: May 1, 2026 is the typical deadline to accept an admission offer and submit a deposit for fall 2026 enrollment.

•   Housing applications: For incoming freshmen, housing applications are often due within a week after the May 1 decision deadline, or around May 8.

•   Scholarship deadlines: Deadlines for scholarship applications occur all year round, but many fall between October and March.

•   Federal aid offer appeals: If your family’s financial situation has changed since you submitted the FAFSA or if you believe your initial application did not accurately reflect your ability to pay, you can appeal your financial aid award. Deadlines vary by school but, ideally, you want to submit it shortly after receiving your aid package.

Staying organized with a calendar or a checklist will help you avoid missing any important deadlines.

Important Paperwork to Keep Track Of

Consider setting up a folder (physical or digital) for all of the following:

•   Acceptance letters for each college you’re considering

•   Financial aid award letters

•   FAFSA submission confirmation

•   CSS Profile submission confirmation (if applicable)

•   Scholarship award letters

•   Communications with admissions/financial aid offices (e.g., emails, notes from calls)

•   Enrollment deposit receipts (once you’ve chosen a school)

•   Housing application confirmations (once you’ve chosen a school)

💡 Quick Tip: Make no payments on SoFi private student loans for six months after graduation.

2. Comparing Financial Aid Offers

College can be expensive. Before you commit to a school, you’ll want to compare any financial aid offers you’ve received.

When you receive a financial aid award letter, it will outline how much aid is in grants and scholarships (which you don’t have to repay) versus federal student loans (which you do have to repay). The letter will also typically include the school’s cost of attendance. By subtracting the grant and scholarship amounts on your aid offer from the cost of attendance amount, you can come up with the school’s net cost. This is the amount you will have to pay out of your pocket using savings, earnings from work, and/or student loans.

Looking at the net costs for the colleges you are considering allows you to compare costs apples to apples and see which school best fits your budget.

3. Reserving Your Spot

Once you receive an offer letter, you can respond at any point — you don’t need to wait until College Decision Day. To secure your spot, you’ll usually need to pay an enrollment deposit.

What You Need to Know About Enrollment Deposits

•   This fee is typically nonrefundable.

•   Paying the deposit holds your spot in the incoming class.

•   Deposit amounts typically range from $100 to $1,000, depending on the school.

•   Try to avoid paying deposits to multiple schools (known as “double-depositing ”) just to buy extra time — this is generally frowned upon and can harm other students on waitlists.

4. Mulling Over the Waitlist

Being waitlisted by a college means you are not accepted or rejected, but are on a hold list for potential admission if spots open up after other accepted students decline their offers. You generally won’t hear back about a waitlist decision until after the national May 1 deadline. In some cases, students don’t find out until soon before the fall semester.

If you’re waitlisted, you typically need to accept or reject the waitlist offer. You generally only want to accept a waitlist offer if the school is truly your top choice. Otherwise, it’s a good idea to remove yourself from the list so other students can be considered.

If you accept a waitlist offer, consider how long you’re willing to wait and come up with a backup plan. That typically means putting down an enrollment deposit at another college you have been accepted to by College Decision Day. This ensures you have a place to go if you don’t get off the waitlist, even if you lose the deposit later.

5. When Decision Day Arrives

Ideally, you’ll make your final decision before May 1. Waiting until the last minute offers very little wiggle room if something goes wrong, like a technical glitch.

To accept a college admission offer, you’ll need to use the method specified by the school, which often involves logging into your student portal and paying a nonrefundable enrollment deposit.

You’re not required to formally decline a college acceptance — not accepting by May 1 is considered a rejection. However, it’s more respectful to decline. You can typically do this by logging in to the school’s online system and rejecting the admission offer. The sooner you reject an offer, the sooner the college can offer the spot to another student on the school’s acceptance waitlist.

6. If You Miss the Deadline

If you miss the May 1 deadline, you risk losing your spot because the college may fill it with someone else. You may also lose your financial aid package. However, you aren’t necessarily out of luck. Your best move is to contact the college admissions department as soon as possible. If you have a valid excuse, they may allow you to still accept their offer. Be sure to explain any emergency, problem, or other issue that kept you from submitting your decision and deposit in time.

7. Financing a College Education

Once you’ve accepted a college offer, you’ll have a clear idea of how much it will cost. As you and your family figure out how you’ll pay for college, student loans may come into play.There are two types available:

Federal Student Loans

Federal student loans are made by the U.S. government and have terms and conditions that are set by law. Federal loans can be subsidized (meaning the government pays the interest while you are in school and during certain other periods) or unsubsidized (you must pay all of the interest that accrues). Subsidized loans are offered to eligible students who demonstrate financial need; unsubsidized loans are available to eligible students regardless of financial need.

Federal student loans generally do not require a credit check and come with relatively low, fixed interest rates.

Federal Student Loans: What’s Changed for 2026

Major changes to federal student loans were enacted by the “One Big Beautiful Bill” Act (OBBBA) in July 2025, primarily affecting new borrowers starting in July 2026. Here’s are some changes that will impact undergraduates:

•  Fewer payment plans: OBBBA will reduce repayment options from the current seven plans down to two new plans. These include:

◦  The standard plan: Borrowers will be assigned a repayment window of between 10 and 25 years, depending on the size of their debt, and will need to make equal monthly payments. This is generally the best choice for those who want to pay off their loans quickly and minimize interest costs.

◦  The Repayment Assistance Plan (RAP): Borrowers who worry they won’t be able to make the fixed monthly payments on the standard plan, can choose the Repayment Assistance Plan (RAP). On RAP, payments range from 1% to 10% of a borrower’s Adjusted Gross Income (AGI), with forgiveness after 30 years of consistent payments.

•  Lower borrowing limits for parents: Parents and caregivers who use parent PLUS loans to help students pay for college will see new loan limits. These loans will be capped at $20,000 a year and, in aggregate, at $65,000 per child.

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

Private Student Loans

Private student loans are offered by private lenders like banks and credit unions to help cover educational and living expenses. They are typically used to bridge the funding gap when federal student aid (including federal student loans) and scholarships do not cover the total cost of attendance.

Unlike federal loans, private student loans are credit-based, meaning a borrower’s credit history is a key factor in approval and interest rates. Many students need a creditworthy cosigner to qualify.

Private lenders often allow borrowing up to the total cost of attendance (minus any financial aid), which can be higher than federal loan limits. However, private loans may have higher interest rates and generally lack the borrower protections available with federal loans, such as income-driven repayment and forgiveness programs.

The Takeaway

Choosing which college to attend is a major decision, and College Decision Day is the critical deadline. By staying organized, diligently comparing financial aid packages, and planning for how you will ultimately finance your education, you can navigate this stressful but exciting time successfully. Taking these preparation steps can help ensure you make the best choice for your academic future and financial well-being.

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

FAQ

What should I consider when comparing financial aid offers in 2026?

When comparing financial aid offers for 2026, the key is to look past the sticker price and focus on the net cost. This is the total cost of attendance (tuition, fees, room, board, and estimated personal expenses) minus any grant and scholarship money you receive. Grants and scholarships are essentially free money that does not need to be repaid, making them the most valuable part of your package. You’ll also want to closely examine the federal student loans offered, noting whether they are subsidized (the government pays the interest while you’re in school) or unsubsidized (you are responsible for all interest). If you’re eligible for work-study, that can also help you cover some of your costs.

What happens if I miss the College Decision Day deadline?

If you miss the College Decision Day deadline, you may lose your spot at your chosen school. Colleges often reallocate unclaimed offers to waitlisted students. Contact the admissions office immediately, as some may offer a short grace period. Missing the deadline can also impact your eligibility for financial aid and housing preferences.

Can I apply for more financial aid after receiving my college acceptance?

Yes, you can generally apply for more financial aid even after you’ve received your college acceptance and initial aid offer. The process is typically called a financial aid appeal. You’ll need to contact the college’s financial aid office to request this review. Generally, your odds of success are better if you can demonstrate a significant change in your family’s financial situation since submitting the FAFSA®, such as a job loss, unexpected medical expenses, or a parent’s divorce. You will need to provide documentation to support your appeal.

How can I appeal my financial aid offer?

To appeal your financial aid offer, contact your college’s financial aid office and ask about their appeal process. Typically, you need to submit a formal letter explaining your financial changes or special circumstances, such as job loss or medical expenses, and include documentation to support your case. Appeals are reviewed individually and may or may not increase your aid.

Are there any new student loan options for 2026?

Federal student loan options are undergoing significant changes for new borrowers starting in July 2026 due to the “One Big Beautiful Bill” Act (OBBBA) enacted in July 2025. For undergraduates, changes include a reduction in repayment plans from seven to two: the Standard Plan (fixed payments over 10-25 years) and the Repayment Assistance Plan, or RAP (payments based on 1%-10% of adjusted gross income, with forgiveness after 30 years). Additionally, new annual and aggregate borrowing limits for Parent PLUS loans have been set at $20,000 and $65,000 per child. Private student loans remain an option, typically used to cover costs beyond what federal aid provides.

How do recent federal policy changes affect my student loans?

The federal policy changes enacted by the “One Big Beautiful Bill” Act (OBBBA) in July 2025 will significantly affect new federal student loan borrowers starting in July 2026. For undergraduates, the most impactful change is the consolidation of the seven existing repayment plans into just two: the Standard Plan, which assigns fixed monthly payments over a 10- to 25-year period based on debt size, and the Repayment Assistance Plan (RAP), a new income-driven option where payments are set at 1% to 10% of the borrower’s adjusted gross income, leading to forgiveness after 30 years of consistent payments. In addition, parents using Parent PLUS loans to help finance their children’s education will face new limits, with annual borrowing capped at $20,000 and an aggregate limit of $65,000 per child.

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

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SoFi Loan Products
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SOISL-Q425-040

Estate planning and creating a will both involve an uncomfortable topic – thinking about what will happen to your money when you die – but they are separate concepts. Broadly speaking, a will is a specific legal document stipulating exactly how your assets will be distributed on your death and who will care for any dependents. Creating that document is what you may hear referred to as will planning.

Estate planning, on the other hand, is an umbrella term that covers all aspects of end of life documentation and decision making, which can include a will. Estate planning also allows you to say how you want your assets divided after your death and can help you transfer those assets in the most tax-advantageous way possible for your loved ones.

Estate planning documents, including power of attorney and living will forms, are often created as part of the estate planning process. These help ensure that your wishes are followed, even if you are medically incapacitated. (You can also access these as part of will planning; we’ll cover that in a minute.)

Creating a will and estate planning may sound complicated, but in some cases, they can be done relatively quickly, often using online templates. In other cases, it may be advisable to have an attorney manage the process.

What Is Will Planning?

Writing a will usually refers to a very specific task: A will details where you want your assets to go at your death, and who you would like to serve as guardian of your minor children. If you have pets, it may also spell out who will care for them and how. Additionally, a will names an executor. This is the person you are putting in charge of distributing your assets to the right individuals or charities.

In most cases, you’ll be creating what is called a testamentary will, which is signed in the presence of witnesses. This is often considered a good way to protect your decision against challenges from family members and/or business colleagues after you’re gone. While you can write this kind of will yourself, you may want to have it prepared by an attorney who specializes in trusts and estates, to ensure that it complies with your state’s laws. Or look for an online business that customizes its work to your location.

When you are creating a will, you may look into preparing other related documents that are usually part of estate planning. For example, you may be able to add a power of attorney form and a medical directive or living will.

Together, these documents spell out who can handle matters on your behalf if you were to come mentally or physically incapacitated. If you aren’t planning on pursuing estate planning, these are important documents to complete when creating your will. (Even young people have sudden illnesses and accidents, so these forms are an important part of adulthood.)

Many online will templates provide for these additional documents, so that your bases are covered if the worst were to happen. Creating a legal will can cost anywhere from $0 to hundreds or thousands of dollars, depending on whether you do it yourself or if you work with an attorney.

Recommended: How Much Does Estate Planning Cost?

Even if you die with a will in place, it’s likely that the document will go through probate — the legal process in which an executor to the will is formally named and assets are distributed to the beneficiaries you have named in your will. Yes, there are nightmare stories about the probate process, but don’t get too stressed about it. In general, if an executor (an individual appointed to administer the last will and testament of a deceased person) is named in your will and your will is legally valid, the probate process can be relatively streamlined.

Recommended: What Happens If You Die Without a Will?

What Is Estate Planning?

Estate planning can be the umbrella term for all end-of-life decision making, but it’s more often used to describe your plan for how you want your property divided when you die and the financial implications of those decisions. It can involve creating the following:

•   Will/trusts to smooth the transfer of assets/property

•   Durable and healthcare power of attorney

•   Beneficiary designations

•   Guardianship designations

Estate planning aims to make sure that your loved ones receive the maximum proceeds possible from your estate.

Often, estate planning is done with the oversight of an attorney, who can provide strategies for how to minimize tax burdens for your beneficiaries when you die.

Recommended: What Is Estate Planning? A Comprehensive Guide

Who Needs an Estate Plan?

When people talk about estate planning, they may be referring to the decision to create a trust. Trusts can be especially beneficial for high-net-worth individuals who may be worried about tax implications of their heirs inheriting their belongings. But they also have a role in less wealthy families. If your clan has a beloved lake house that you want to stay in the family, for future generations, a trust might be a possibility to investigate.

Recommended: New Parent Estate Planning

These arrangements allow a third party, or trustee, to hold assets on behalf of a beneficiary or beneficiaries and can help avoid the time-consuming process of probate. Trusts may also be beneficial for people who have dependents in their care, as well as those who may worry about how their beneficiaries will spend the money bequeathed to them.

There are two other scenarios in which a trust can be very helpful:

•   People with a pet who have a specific plan of how they wish the pet to be cared for after their death. (Pets can’t own property, so leaving money to pets in a will can cause a legal headache. This can be sidestepped by creating a trust for Fluffy’s care.)

•   Those who want to minimize ambiguity in who gets what, which could be helpful in the case of people who have had multiple marriages.

The most common type of trust within an estate plan is called a revocable living trust. This may also be called a living trust because, while you are alive, you can name yourself a trustee and have flexibility to make changes. These can often be created online, although an attorney can certainly be involved, guiding the process and answering any questions.

In setting up a trust, you will name a trustee. This is a person in charge of overseeing the trust according to the parameters you state. Unlike a will, where an executor will ensure beneficiaries get the property stated, a trust allows the creator to put guardrails around gifts — and for the trustee to ensure the guardrails are followed.

For example, you can specify in a trust that certain assets do not go to a beneficiary until they reach a certain age or milestone.

Recommended: Do I Need a Trust?

Taking the Next Step in Will Writing and Estate Planning

There’s a lot of overlap between “creating a will” and “creating an estate plan,” and that ambiguity can lead to difficulty beginning the process. But creating a legal will, including guardianship documents for minor children, can be a good first step. Also, make sure you have power of attorney forms in place and any advanced directives. These can guide decision-making on your behalf if you were ever mentally or physically incapacitated.

Then, you can have peace of mind and can “ladder up” to creating a more complex plan that encompasses more what-ifs. Estate planning, with the possibility of trusts and transfers, can complete your end-of-life planning.

The Takeaway

Creating a will and an estate plan are two different ways to address your end of life wishes. A will is a document that says who inherits what and how you want minors, dependents, and even pets cared for. It may have additional documents that spell out your wishes if you become incapacitated.

An estate plan, however, is a more comprehensive way to spell out the allocation of your assets after you die. It typically includes finding ways to make the process run more smoothly, quickly, and with lower tax payments for your beneficiaries. Starting the process now, whether with online templates or by consulting with an attorney, is important. While no one likes to think about worst-case scenarios, the sooner you get the paperwork done, the better protected your loved ones will be.

When you want to make things easier on your loved ones in the future, SoFi can help. We partnered with Trust & Will, the leading online estate planning platform, to give our members 20% off their trust, will, or guardianship. The forms are fast, secure, and easy to use.

Create a complete and customized estate plan in as little as 15 minutes.

Photo credit: iStock/AnnaStills

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SOPRO-Q425-024

Paying for childcare can be a considerable expense that starts coming at you quickly after your little one is born. Daycare, for instance, can be an urgent expense. Currently, the average weekly cost of daycare is around $343 in October 2025, according to Care.com.

Making ends meet can be a challenge for many families, especially when daycare is added to the budget. Read on to take a closer look at the kinds of daycare available and wise strategies for making ends meet.

Types of Daycare

There’s a considerable cost to raising a child, and daycare is part of that. It can allow you to continue to work or attend to other priorities and ensure your little one is well cared for.

That said, there are a number of different types of daycare, but one of the most important distinctions is the difference between home-based care and formal daycare programs.

Home-based Daycare

Home-based, or informal, care is typically cheaper than formal daycare options, but there can be some drawbacks so it’s important to thoroughly review your options.

Each state determines their own regulations for home-based daycares. Most require providers to meet a certain level of training in order to provide care. Before you select a home-based daycare, you can check the requirements and regulations on sites like this one at Childcare.gov or visit your state’s website. You can likely find the information you are seeking via the Office of Children and Family Services.

It’s likely that safety will be one of your top concerns. Check that childcare providers are fully licensed and credentialed. Since many of the home-based providers are run by a sole proprietor, you may get less oversight than at a formal facility. That is, the operator may be so small that it’s not required to be licensed.

Licensing, however, can be a very important factor. It ensures such things as:

•   Criminal background checks for the staff

•   Training in such matters as CPR, safe sleep habits for children who are young enough to be napping at daycare, and first aid

•   Proper sanitation

•   Emergency and safety preparations.

Ask about the care providers’ background and qualifications. It’s more likely that those working at formal daycare centers (more on those below) will have specialized training. For instance, the work could be a side job for a teacher.

If you do decide to go with home-based daycare, make sure to check the provider’s references carefully, even if they have the appropriate licenses. You can also talk to them about the schedule for children in their care and how they will work to stimulate your child’s learning so that they’re ready for preschool. Many parents or prospective parents may ask to visit and observe how the daycare operates.

Formal Daycare

When it comes to formal childcare programs, there are also a lot of different options. Some employers offer childcare programs on site; others are Montessori schools or affiliated with other educational institutions. There may be some that are operated as franchises in your area.

Their approaches will probably vary as well: Some formal daycares aim to provide a cozy, relaxed atmosphere, while others focus on early childhood education and skill-building.

It may be wise to tour a few different options, just to get a fuller picture of how your child will spend their day. You’ll want to see what the premises and caregivers are like and understand the flow of the day.

Often, the more additional services that a daycare provider offers, the more it will cost. For instance, if you are looking for a bilingual daycare, it will probably cost more than one in which just English is spoken, as the provider has to spend more time and energy hiring its staff. Also, the more personalized the care (as in, the lower the child-to-caregiver ratio), the more expensive it may be.

Paying for Daycare

When you start a family or expand it, the expenses can come at you in a flurry: doctor’s appointments, food, clothing, furniture, strollers, and so forth. That alone is enough to stretch your budget to the max. Add daycare to the mix, and your income can feel the pressure.

Here, some steps to help you afford childcare.

Retool Your Budget: The first thing you can do is cut back on other areas of your budget in order to free up money to put towards daycare costs. You might be able to lower your food costs, say, or have staycations for the next few years.

If you don’t have a budget or aren’t happy with how yours is working, consider the different budgeting methods available, and experiment to find one that’s the right fit.

You might also look into apps to help you monitor spending. Your financial institution, whether a traditional or online bank, may have tools to help you do this.

Save in a Dependent Care Account: If your employer provides you with a Flexible Spending Account (FSA), then you can put up to the current limit of $5,000 in your account tax-free that can be used for daycare. Beware of over-contributing, however; anything you don’t use by the end of the year will be forfeited.

Check on State Money: Each state has a child care assistance program designed to help low-income parents pay for care for dependents under 13. This program is funded by the federal government. You might see if you qualify.

Use the Child Care Tax Credit: While it won’t help you pay for daycare upfront, you can get a refund on some of your daycare costs by applying for the Child Care Tax Credit. This tax credit can be worth up to $2,200 per qualifying child in many cases.

Look into a Loan: If all else fails and you can’t find the money to pay for daycare, you may consider borrowing a personal loan rather than putting your daycare expenses on a credit card. You’ll likely enjoy lower interest rates with a personal loan.

Recommended: Personal Loan Calculator

The Takeaway

Finding the right childcare for your family is a personal choice. The main options are home-based or formal daycare. Regardless, you’ll have to balance your child’s needs with your budget and financial plan. There are options such as budgeting, taking tax credits, getting government assistance, or taking out a loan.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.

FAQ

Do you pay daycare monthly or weekly?

Daycare facilities typically set their own payment schedule. Some require payment weekly; others biweekly or monthly. Check with your provider regarding options.

What if I can’t afford daycare?

There are several options to explore if you feel you cannot afford daycare. You can visit childcare.gov to learn more about government programs on a federal and state level, or consider a personal loan.

Is daycare cheaper than a nanny?

Typically, daycare is cheaper than a nanny. That can be due to the fact that daycare is responsible for a number of children while a nanny is usually one-on-one care.

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

SOPL-Q425-023