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College visits can be an important part of the school selection process, as parents and high schoolers tour campuses of interest. These visits provide a glimpse of the campus grounds, dorms, classrooms, and more, which can be vital info when deciding whether a school is a good fit or not. Also, the tours are typically led by current students who have insights about what life at the college is like.

But what exactly should you, as a parent, look for? What questions should you ask? The checklist that follows can help you get the most out of the experience.

How to Visit Colleges on Your Lists

Sometimes, students visit college campuses to decide whether or not to apply there. In other cases, they already believe that a particular college is a perfect match for their major and they want to investigate further.

Schedule Visits Strategically

Perhaps your child has applied to — or is interested in applying to — eight colleges. At a basic level, you’ll want to make sure you have enough time to visit a good number of them. How far they are located from your home and from each other will help to dictate how much time these visits will take. As part of this scheduling, you might ask yourself these questions:

•   Which of these campuses are most important to visit? Prioritize appropriately.

•   Which of these colleges are located near (or relatively close to) one another?

•   Do I want to have an informal visit, or do I want to be part of an official open house? If the latter, check as early as possible to see when these events are being held. Are there scheduling conflicts?

•   How much time will each visit take?

•   How can I space out these visits so we can be efficient without rushing through them?

•   What is most important to see and do during each visit?

Pro tip: Once you know that you’ll be visiting a college, you can review its website and social media pages to gather intelligence ahead of time and gain key context.

When Do Virtual College Visits Make Sense?

Perhaps, as just one example, there is a college that is more challenging to visit than others on your list. Maybe it’s a significant distance from your home, or perhaps you have scheduling conflicts or financial pressure that means an in-person visit isn’t looking realistic. In that case, consider going on a virtual tour.

By doing so, you may discover that this college isn’t as appealing as you’d originally thought (which might cause it to drop on your priority list) or it may make you realize that, yes, you need to make a physical tour happen.

One option is to check the college admissions website. You may be surprised to see how many have interactive video tours available.

As a related resource, YouTube has plenty of videos if you search for such terms as “college tours,” “college tour TV,” and other similar words.

Another idea for gaining information without setting foot on campus: You can use the Rate My Professors tool, too, to find information about who teaches at a particular school, noting that ratings are subjective and can be used, as just one example, by students who aren’t happy with grades received.


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

What to Bring to a College Visit

During college visits, you’ll likely be flooded with information and visual impressions, plus with thoughts, ideas, conversations, and more. So, it makes sense to bring something to help you capture all of this information to review later, as needed.

In this quest, your smartphone can be a real asset. You can use it to take pictures of intriguing places on campus or to remind you to ask questions about it. Take videos in the same way and/or record explanations given by college officials.

And, wonderful as technological devices are, don’t forget to bring old-fashioned pen and paper. You might also want to bring along a college visit planner, one where you can list crucial dates and deadlines.

Depending upon how long you’ll stay, make sure you bring enough comfortable, weather-appropriate clothing — and, perhaps most important of all, comfy shoes! You may be doing a whole lot of walking.

Also consider if you will need an umbrella. Or a warmer coat than what you would wear at home. Do you need gloves? Or will it be sunny and warm, requiring sunglasses and sunscreen? You’ll want to have these things on hand to make the visit as comfortable as possible. After all, you’re there to give your full attention to the tour, not your cold hands or soaked shoes.

Pro tip: Depending on your relationship with your child, you may want to take separate tours. You kid can go on one tour group and absorb information without your commentary swaying their opinion or without being embarrassed if you ask a lot of questions. Then you can compare notes after you’ve each seen the campus.

Key Questions to Ask

At some point during the tour, you’ll almost certainly be shown student housing options. Now is the time to ask about the range of dorm choices, how many students live on campus, what percentage of students live on campus versus off-campus, what apartment options exist for, say, juniors and seniors — and any other questions you or your child have about housing.

Other questions to consider:

•   How safe is this campus and the surrounding area?

•   What kind of security do you have?

•   What activities are available for students?

•   Who is allowed to have a car?

•   Where can they park?

•   What transportation options are available for students without a car?

What other questions to ask on a college tour? You can also ask about academics, ranging from sizes of classes, the use of teaching assistants, how much homework is assigned and how much time it typically takes to complete assignments, and more. How easy is it for students to get the classes they need? Is there an honors program? What kind of tutoring services are available?

You might also be curious about the following:

•   What college internship opportunities are available? How easy are they to obtain?

•   How many students study abroad? What opportunities are available?

•   What career services do you offer?

Recommended: What Can You Use Student Loans For?

Financial Issues to Explore

Of course, paying for college is often a key concern. This is an ideal time to get information about typical financial aid packages offered at each college. You might ask some questions of your tour guide or attend a financial aid session to inquire about:

•   What financial aid package can a typical freshman expect to receive at the college?

•   What mix of scholarships, grants, and loans can be expected, on average?

•   What work-study opportunities exist and how easy is it for a student to qualify?

•   If there is scholarship money set aside at a college for students, what are its parameters? Some, for example, may be set aside for female students or minority students.

•   What aid is available after freshman year?

•   Are enough classes offered at flexible times to help students graduate in under four years (and therefore potentially save significant sums of money)?

•   If your child doesn’t qualify for federal work-study, what other jobs are typically available on campus? Off-campus?

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

Financing College

It isn’t unusual for students to need to borrow money to pay for their education. Scholarships and grants are available to help qualified students reduce college expenses and, sometimes, parents may help their children out financially.

Students can get jobs while in college and use their savings to help pay expenses, of course. But if that isn’t enough, many students typically end up borrowing money, with the two main sources being federal student loans (from the government) and private student loans (from private lenders).

To qualify for federal funding, you and your child must fill out the FAFSA®. It can be wise to explore all federal aid options before turning to private student loans.

Recommended: Guide to Parent Student Loans

Parent Student Loans With SoFi

If private loans seem to be a potential path for you, see what SoFi offers. Parents should consider their own financial situation and needs (like retirement) as they consider such options as borrowing a parent student loan.

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

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

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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.

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

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. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

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.

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

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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Many Americans are finding tiny houses, or those that measure several hundred square feet in size, are a welcome way to live. They can be both economical and eco-friendly, and some people say they simplify life, which can bring many benefits.

If you’re curious about tiny houses or are currently contemplating one, it’s important to know that financing these dwellings may be different than securing a traditional mortgage. Here’s a guide to tiny houses and how to secure funds to buy or build one.

What Is a Tiny House?

A tiny house is often defined as a home that is between 100 and 400 square feet. In contrast, the median size of a single-family American home is currently 2,014 square feet. That’s five times bigger than the biggest tiny home. Here are some other facts to know about this kind of dwelling.

•   Owners live in their tiny homes themselves, rent them out, use them as a small vacation home or even build them as an accessory dwelling unit (ADU) on the same lot as their primary residence. Tiny homes may be on wheels, or they may sit on a fixed foundation.

•   Prefab homes can be delivered complete to the site, or there are modular homes that require some assembly on site. Those who would rather build their own house can hire an architect or draw up plans to their own specifications. There are small homes in all kinds of styles, from a classic Colonial or Victorian to a ranch style or A-frame or ultra-modern design.

•   Local zoning rules will determine whether or not a person can build or move into a tiny home. And building codes will determine things like ceiling height.

•   Tiny houses may not have good resale value since they are such a specific type of home and are often highly customized. Before buying a tiny house as an investment property, it might be wise to consult a real estate investment professional.

💡 Quick Tip: Before choosing a personal loan, ask about the lender’s fees: origination, prepayment, late fees, etc. One question can save you many dollars.

Tiny House Pricing

In 2023, the average sales price for a single-family home was about $430,300. Tiny homes cost quite a bit less, with an average of $45,000. That price can vary up and down depending on the size of the home, materials used, and amenities (yes, some tiny homes have luxe, spa-style bathrooms, for example). The price of the building is not the only thing to consider.

Buyers of tiny homes must factor in the price of buying or leasing land on which to place the home if they don’t already own it, as well as the cost of hooking it up to utilities.

If the tiny home is on a foundation, there may be state and local property taxes to pay. If the tiny house is on wheels, though, there likely won’t be property tax assessed.

Recommended: Is Buying a House a Good Investment?

Financing the Land

If property needs to be purchased to have a place to put a tiny home, an option for financing is a land loan. There are three types of land loans: raw land loans, unimproved land loans, and improved loans.

•   Raw land loans are for land that’s completely undeveloped with no electricity, roads, or sewer access.

•   Unimproved land loans are for properties that have more access to amenities like utilities, but lack utility meters.

•   Improved land loans are for land with access to roads, water, and electricity.

The size of the down payment and the interest rate of the loan will depend on what type of loan is needed. For example, lenders may consider raw land to be a riskier option than improved land and require a bigger down payment and higher interest rates.

Mortgages for Tiny Homes

Qualifying for a home loan for a tiny home may be tricky. Some lenders may not be willing to offer first or second mortgages for tiny home financing. However, if a tiny home has a foundation and complies with local building codes, it may qualify for certain mortgages.

Tiny homes may also qualify for what is known as a “chattel mortgage,” a mortgage for moveable personal property. The tiny home acts as security for the loan, and the lender effectively becomes the owner of the tiny home until the loan is paid off and ownership is transferred back to the borrower.

This differs from traditional mortgages that are secured by a lien on the property. Because the size of the loans are typically small, chattel mortgages may have relatively short terms, though interest rates may be relatively high.

Personal Loans

A personal loan can allow individuals access to money that they can use for any personal, family, or household purpose, from paying off credit cards to an effective tiny house loan. Depending on the lender, loan amounts can range from a few thousand dollars to $100,000. When the applicant is approved for a personal loan, they’ll receive the loan amount in a lump sum and pay it back in installments with interest.

Personal loans may be secured or unsecured. Unsecured loans are not backed with any collateral, and the interest rates currently range from about 6% to 36%, depending largely on the borrower’s credit score.

Secured loans are backed by collateral, such as personal savings, a car, or another home owned by the same borrower. They typically come with a lower interest rate than their unsecured counterparts. However, it’s important to note that if a personal loan is defaulted on, the borrower’s assets could be seized by the lender to repay the debt.

Home Equity Loans

The equity someone may have built up in a home they already own can be tapped to finance a tiny home for use as a vacation home, rental property, or ADU. A home equity loan is a fixed amount of money secured by a borrower’s home.

Usually, up to 85% of the equity accumulated in a home can be borrowed, though actual loan amounts will also depend on the applicant’s income and credit history. The home equity loan is repaid with monthly payments over a fixed term. And if the borrower fails to repay, the lender can foreclose on the house.

A home equity line of credit (HELOC) may be another option to finance a tiny home. HELOCs differ from home equity loans in that the borrower doesn’t receive a single lump-sum payment from the lender.

Rather, a HELOC gives the borrower access to a line of credit that can be drawn down, paid back, and drawn down again, if need be, within a certain time period. The HELOC is secured by the borrower’s home, so as with a home equity loan if the debt is not paid, the lender can use the home as collateral.

Loans From Tiny House Builders

A tiny house builder or contractor may be able to help secure financing through unsecured loans based on an applicant’s credit score, or secured loans backed by the value of the tiny home. These tiny-house loans may have longer terms and lower starting interest rates than personal loans, but they may require a downpayment.

RV Loans

If the tiny house has wheels and is certified as an RV by the Recreational Vehicle Industry Association, an RV loan may be another option for financing. Online lenders, banks, and credit unions may all offer RV loans. In many cases, the tiny house will serve as collateral for the loan, the same way a car would serve as collateral in an automobile loan.

Recommended: Guide to Buying, Selling, and Updating Your Home

The Takeaway

If you’re in the market for a tiny house, you may need to think beyond traditional mortgages. Home equity, HELOC, and personal loans, among other options, may be available forms of financing that can set you on your way to owning the tiny house of your dreams.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. Checking your rate takes just a minute.

SoFi’s Personal Loan was named NerdWallet’s 2024 winner for Best Personal Loan overall.

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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.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

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

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

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If you’re planning to shoulder all or some of the cost of your child’s college education, you’re giving your child a wonderful gift. And that’s just how the Internal Revenue Service (IRS) sees it — as a gift. Depending on the amount you offer, and whether you give it directly to your child or to the school, you could get hit with an additional expense, known as the gift tax.

Whenever you give someone money that is a gift, you automatically become subject to the gift tax. Whether you actually need to pay that tax, however, will depend on the size of the gift and what it was used for. Here are some things to keep in mind if you want to give your child money for college but avoid getting hit with any additional taxes.

What Is the Gift Tax?

According to the Internal Revenue Service (IRS) , the gift tax is “a tax on the transfer of property by one individual to another while receiving nothing, or less than full value, in return. The tax applies whether the donor intends the transfer to be a gift or not.”

That’s a lot of words to essentially mean that if you give someone a gift of property, including money, without getting something of equal value in return, that may be considered a gift. And if you’re gifting, it might be subject to the gift tax. In general, the gifter is responsible for paying the gift tax costs .

Before you start worrying if you’ll have to pay a gift tax on the $100 bill you slipped into your niece’s graduation card, it is important to know that the gift tax generally only affects large gifts.

This is because there is an “annual exclusion” for the gift tax, which means that gifts up to a certain amount are not subject to the gift tax. For 2023, the annual exclusion is $17,000; for 2024, it’s $18,000. If you and your spouse both gift money to your child, the annual exclusion is $34,000 in 2023, and $36,000 in 2024.


💡 Quick Tip: You’ll make no payments on some private student loans for six months after graduation.

Gifting Your Money Directly to Your Children

Children are not treated differently when it comes to the gift tax, which means that whether you’re gifting your neighbor money for being really great all those years, or transferring $20K to your son’s bank account to help him pay for college, the gifts are treated in the same way by the tax code.

This means that a gift you make to your child for the purpose of paying tuition or covering educational expenses may be subject to the gift tax if the gift exceeds $18,000 in 2024 (if you’re single) or $36,000 (if you’re married and making a joint gift).

With the average cost of attendance at a private university now exceeding $55,000 per academic year, it’s conceivable that you would end up giving your child a cash gift that exceeds the annual gift tax exemption.

One way around this is to gradually put money aside every year in a 529 account. Gifters can contribute up to $18,000 in 2024 to a 529 account per person, per year with no risk of getting hit with a gift tax. That means a married couple could gift up to $36,000 per account, per year in 2024 without having to pay a gift tax.

Recommended: Paying for College: A Parent’s Guide

Paying College Expenses Directly

In addition to the annual exclusion limit, the IRS also waives the gift tax for gifts that are used to pay tuition expenses. There’s no limit on how much you can pay but the caveat is that you have to give the money directly to your student’s school. Otherwise, any amount over the annual exclusion limit will be subject to the gift tax.

This means that, in some cases, it may save you some cash to pay the school directly rather than first giving the money to your child and having them use it for tuition. It is important to consider all your options, however, as gift tuition payments may impact the student’s need-based aid.

Other Ways to Pay for College

If you don’t have enough savings, or would rather not deplete your savings to pay for your child’s tuition and expenses, here are some other ways to help your child cover the cost of college.

Help Your Student Complete the FAFSA

Submitting the Free Application for Federal Student Aid (FAFSA) is a critical step when it comes to getting federal student aid. While the FAFSA is the student’s responsibility, when a student is considered a dependent student for FAFSA purposes, parents have a large role in the application process. As a result, you as a parent can help make the process faster and easier.

The FAFSA is a gateway to several forms of financial aid, including grants, scholarships, work-study, and federal student loans, so it’s worth filling out even if you don’t think you will qualify for aid. Many colleges also use the FAFSA when awarding institutional (merit-based) aid and some states use the form for certain state-based aid.

Take Out a Parent Loan

If your student has a gap in funding after tapping financial aid, including federal student loans, you might next look into parent student loans. You have two options: Parent PLUS Loans and private student loans. The best one for your situation generally depends on your credit history.

Here’s what to consider when looking at Parent PLUS Loans vs. private student loans.

Parent PLUS Loans

With Parent PLUS Loans, you can borrow up to the cost of the child’s attendance each year, minus any financial assistance that has been awarded, with no limit on the amount borrowed. This is true regardless of the parent’s income.

For Parent PLUS Loans first disbursed on or after July 1, 2023, and before July 1, 2024, the interest rate is 8.05%, which is higher than most other federal student loans. There is also a loan fee of 4.228%. As federal loans, however, Parent PLUS loans have access to multiple government-sponsored repayment plans and forgiveness programs.

Parent PLUS loans are not subsidized, so interest begins to accrue on the outstanding loan balance as soon as funds are disbursed and continues to accrue even if you choose to defer making payments on the loan until after your child graduate’s college.

Recommended: What Percentage of Parents Pay for College?

Private Student Loan for Parents

If you have good or excellent credit, you may be able to qualify for a private student loan for parents that has a lower interest rate than a Parent Plus Loan. Depending on your credit, you could potentially see a difference of 2% or more. Over the course of a 10-year repayment period, that lower interest rate can add up to significant savings. Keep in mind, though, that private loans do not offer the same protections and benefits that automatically come federal education loans.

If you’re considering private student loans, be sure to check your rates with multiple lenders to find the right loan for you. You can typically browse rates without any impact to your credit score (prequalification generally involves a soft credit check).


💡 Quick Tip: Need a private student loan to cover your school bills? Because approval for a private student loan is based on creditworthiness, a cosigner may help a student get loan approval and a lower rate.

The Takeaway

Paying for your child’s college education is considered a gift in the eyes of the IRS. However, parents can give up to $18,000 in cash to a child individually and $36,000 jointly in 2024 without getting hit with a gift tax. Parents can also pay for tuition directly to the college to avoid getting hit with a gift tax, with no upper limits.

You can reduce how much you’ll need to chip in for your child’s college expenses by helping your student fill out the FAFSA. This will give them access to scholarships, grants, work study, and federal student loans.

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

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

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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.

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

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.

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.

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.

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Getting a graduate degree can help you move up the company ladder, boost your salary, or switch to a different career. But going back to school can be costly. On average, students rack up $78,118 in student debt to pay for graduate school, according to the Education Data Initiative. That average reflects debt for all advanced degrees beyond the bachelor’s level, including master’s and doctoral degrees.

Many students who borrow money to pay for grad school already have debt from undergraduate studies. Including the average undergraduate student loan debt balance ($37,337), raises total average student debt for graduate students to $115.455.

Fortunately, there are ways to get a graduate degree without taking on a large amount of student loan debt. There are also a variety of payment plans that can make repaying grad school debt easier on your budget after you graduate. Here’s what you need to know about student loan debt for graduate school.

What Is the Average Graduate Student Loan Debt?

If you’re thinking about applying to graduate school, you may be wondering how much you’ll need to borrow to cover your costs and whether or not it will be worth it.

On average, students leave graduate school with a student loan debt balance of $78,118 (from grad school alone). How much debt students rack up going to grad school, however, can vary significantly depending on the type of degree they pursue and the kind of school they attend. A doctoral degree generally costs more than a masters, for example, while attending a public, non-profit university is typically cheaper than going to a private, for-profit college.

Here’s a closer look at the average graduate school debt balance for different degrees obtained at different types of institutions.

•   Master’s degrees: The average total student loan debt balance is $83,651 ($64,950 is just from graduate school).

•   Master’s degrees from public schools: The average total student loan debt balance is $69,057 ($54,699 is just from graduate school).

•   Masters degrees from private schools: The average total student loan debt balance is $91,168 ($72,776 is just from graduate school).

•   PhDs: The average total student debt balance is $134,797 ($127,521 is just from graduate school).

•   PhDs from public schools: The average total student loan debt balance is $115,759 ($106,297 is just from graduate school).

•   PhDs from private schools: The average total student loan debt balance is $199,175 ($183,508 is just from graduate school).

💡 Quick Tip: Get flexible terms and competitive rates when you refinance your student loan with SoFi.

Exploring Options to Finance Graduate School

Grad students can finance their education with federal student loans, private loans, or a mix of both. Here’s a closer look at the different types of loans available for graduate school.

Federal Loans

Graduate students can take out two different types of federal loans.

Direct Unsubsidized Loans

You can borrow up to $20,500 each year in Direct Unsubsidized Loans for graduate school, and eligibility is not based on financial need. The interest rate for Direct Unsubsidized Loans for graduate students for 2023-24 is 7.05%, plus an origination fee of 1.057%.

If you borrowed federal funds for your bachelor’s degree, you may be subject to a total federal funding limit of $138,000 in Direct Loans, including the amount of your undergraduate degree. Graduate PLUS (and Parent PLUS loans) are separate from this amount.

Direct PLUS Loans

If Direct Unsubsidized Loans aren’t enough to cover your attendance costs, you can next turn to Direct PLUS Loans, which have a higher interest rate. You can borrow up to the full cost of attendance for each year, which is set by your university and includes expected living costs for the town or city you’ll be studying in.

Eligibility is not based on financial need, but a credit check is required. Borrowers who have an adverse credit history must meet additional requirements to qualify. The interest rate for 2023-24 is 8.05%, plus a 4.228% origination fee.

Private Loans

Students can also take out private student loans for graduate school. Indeed, if you’re applying for grad school when you already have a well-established credit history, you may be able to get a lower interest rate from private lenders than from the federal government. This could save you a significant amount of money over time, and also help you get out of debt faster.

You’ll want to keep in mind, however, that the government offers significant protections that can make federal student loan debt easier to manage, such as income-driven repayment plans and student loan forgiveness.

How to Minimize Graduate School Debt

If you are interested in attending graduate school but worried about being saddled with high debt payments after you graduate, here are some ways to make your advanced degree more affordable.

Tap Free Funding Options

Scholarships, fellowships, and grants are some of the best ways to pay for graduate school. You can ask your school about institutional awards and also search for professional organizations focused on the field you’re interested in to see if they offer graduate scholarships. In addition, some schools also offer tuition waivers or some monetary awards for students who serve as teaching assistants.

Ask Your Employer About Tuition Assistance

If you plan to continue working while attending graduate school part-time, it’s worth finding out if your employer offers a tuition assistance program. Some companies will cover all or a portion of their employees’ higher education expenses. There may, however, be some strings attached, such as staying in the company for a specific amount of time. Reach out to your HR department to find out whether your employer offers this benefit and, if so, what the requirements are.

Borrow Only What You Need

There are no subsidized loans for graduate school, which means you’ll need to pay for all the interest that accrues on your loans. With Graduate PLUS loans, you are able to borrow up to your school’s cost of attendance, which can include expenses like transportation and child care. However, that doesn’t mean you should access the maximum amount. It’s a good idea to tap savings and income before turning to loans to cover all of your costs. This can help minimize how much debt you have to repay after you get your degree.

Look Into Online or Accelerated Programs

Some schools charge the same tuition for online and on-campus programs, but others charge substantially less for online classes. Also, the faster you can get a degree, generally the less you will have to borrow to pay for it. A one-year MBA, for example, will typically cost significantly less than a two-year program.

Explore Your Repayment Options

Federal loans offer income-driven plans that can keep graduate loan payments manageable after you graduate if your income is low. If you pursue a career in public service or nonprofit, you may also qualify for Public Service Loan Forgiveness.

If you’re getting an advanced degree that will boost your earning power, keep in mind that you may be able to refinance your federal and private graduate school loans after you graduate at a lower rate. This could potentially translate to hundreds or thousands of dollars saved over the life of your loan. Refinancing can also allow you to remove a cosigner off of your student loans.

You can refinance both federal and private student loans, but keep in mind that refinancing federal loans with a private lender means giving up federal student loan protections such as income-driven repayment plans and PSLF.


💡 Quick Tip: When refinancing a student loan, you may shorten or extend the loan term. Shortening your loan term may result in higher monthly payments but significantly less total interest paid. A longer loan term typically results in lower monthly payments but more total interest paid.

The Takeaway

Most graduate students in the U.S. leave school with upwards of $78,000 in graduate school debt. Depending on what type of degree you pursue and where you study, you could end up with less — or more — than the average amount of graduate student loan debt.

If you’re interested in grad school but concerned about debt, keep in mind that you may be able to lower the cost of your degree by getting fellowships and grants, becoming a teaching assistant, tapping your employer’s tuition assistance, and considering an online or accelerated program. You may also be able to refinance your grad school loans at a lower rate after you graduate, making them easier to manage.

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

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

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SoFi Student Loan Refinance
SoFi Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org). SoFi Student Loan Refinance Loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Public Service Loan Forgiveness, Income-Based Repayment, Income-Contingent Repayment, PAYE or SAVE. Additional terms and conditions apply. Lowest rates reserved for the most creditworthy borrowers. For additional product-specific legal and licensing information, see SoFi.com/legal.

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.

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

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

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You’re ready to start buying stocks. But as you look at all the stocks available, you may be wondering which ones to choose. What’s the best way to pick a stock? And how do you know which stocks might be right for your portfolio?

This guide will walk you through what you need to know about how to pick stocks.

Step 1: Define Your Investment Goals

Before you start exploring different stocks, think about what you’re investing for. Of course you’re investing to make money, but what do you want to accomplish overall? In other words, what are your investment goals? Figuring out your purpose can help you when you’re choosing investments and determining how to pick stocks.

Understanding Your Financial Objectives

What are you hoping to achieve with your investments? Think about this carefully. Is it retirement? Are you saving for a downpayment on a home or your child’s college education? Knowing your financial goals is very important to your investment strategy.

Also, consider your timeframe. Will you need access to the money in the next several years? If so, you may want to be more conservative with your investments. Or are you investing for the far-off future? In that case, you may be interested in stocks that have higher growth potential — with the understanding that higher-growth investments can also carry more risk.

Identifying Your Investor Profile

There are different types of investors. Pinpointing which type you are can help as you’re building your portfolio.

Investors who are looking for income (for instance, retirees who want to supplement their retirement funds) may want to buy stocks in companies that pay regular dividends. Investors who want to safeguard their money will likely want to look for stocks in companies that are stable. And investors who want to try to increase their earnings as much as possible might focus on buying higher-risk, higher-growth stocks.


💡 Quick Tip: If you’re opening a brokerage account for the first time, consider starting with an amount of money you’re prepared to lose. Investing always includes the risk of loss, and until you’ve gained some experience, it’s probably wise to start small.

Step 2: Learn the Art of Diversification

Diversifying your portfolio may help mitigate investment risk and may even improve investment performance, studies show. However, diversification is no guarantee and there is still risk when you invest.

The Role of Diversification in Risk Management

When you choose stocks, your inclination might be to stick to just a few companies you’ve researched and feel good about. This approach might seem like it could protect you from losses. But, in fact, limiting your portfolio could actually increase your chances of losing money.

Here’s why: Unsystematic risk is a risk that’s unique to a particular company or industry. So if you invest in the stocks of food manufacturers, for instance, and extreme weather damages some of the crops they use for their products, their stock prices could plummet, which could cause investment losses for you. But if your portfolio is diversified and holds a range of stocks from different sectors or industries, it helps mitigate risk. That’s because while one stock might drop, others could remain stable.

Techniques for Effective Portfolio Diversification

To build a diversified portfolio, there’s something known as the 60/40 rule that calls for investing 60% of your portfolio in equities like stocks, and 40% in fixed income vehicles like bonds and cash.

However, even if you’re building a strictly stock portfolio, you can still diversify it. Instead of owning shares in just one company, for example, you can buy shares in a number of different companies.

You can also choose stocks in different sectors, such as consumer goods, energy, and agriculture. And you can vary the types of stocks by buying stocks in a mix of small-, mid-, and large-cap companies.

If this sounds too complicated and involved, you might be interested in investing in mutual funds or exchange-traded funds (ETFs) that contain assets from many different companies. This is another way to diversify your portfolio.

Step 3: Research and Select Potential Stocks

Now you can start considering which stocks to buy. How to pick stocks? One strategy could be to go with a company for which you have an affinity or one that you’re quite familiar with. Think of the brands that are household names, for instance.

Once you have a few companies in mind, it’s time to find out more about them.

Conducting Company Research

When doing research on companies, these are some of the things you’ll want to look into: Are the companies profitable? How do they perform against others in their industry? Has there been bad news recently about them?

Here are some resources to discover more.

Company filings. The U.S. government requires most companies to file financial data on their performance and notable changes in the corporation. Look for the company’s quarterly and annual balance sheet, income statement, and the cash-flow statement. It’s also a good idea to look at each company’s retained-earnings statement and its shareholders’ equity.

You can find these on the company’s website under the Investor Relations section, or you can go to the Securities and Exchange Commission website to find any required filing. You’ll need to get acquainted with financial ratios. They will help you contrast and compare different companies so you can make a final decision. You’ll find them invaluable for selecting your first stock to buy.

Market news sites. Plenty of sites devote pages of content on what companies are doing, where sectors are heading, and how the market is reacting. Get in the habit of browsing a few every day. You can even set up alerts. That way, when you learn how to buy your first stock, you can keep up with all the news.

Deep analysis sites. Many companies offer stock-market research and make the task of evaluating stocks easier. Some offer information at no cost, others charge a subscription. Zacks Stock Screener and Stock Rover are examples of sites that do not charge. The sites that offer even deeper analysis, like Morningstar, may charge a fee. Many online brokerages also offer analysis content you can use.

Step 4: Analyze Stock Value and Performance

Next, you can look at the performance of the stock over time and its price to see if it represents a good value. Here’s how to do that.

Assessing Financial Health and Earnings

To evaluate a stock’s price, you can look at its price-to-earning ratio (you can generally find this information on the company’s website), which is a company’s share price divided by its earnings per share over the past year. If a stock’s PE is below its historic average, this typically indicates the stock is at a good price.

Another metric to check out is a stock’s dividend yield. If the dividend yield is above average, that could be an indication that the stock is at a good price.

These types of metrics can give you an idea of how profitable and efficient a company might be.


💡 Quick Tip: Distributing your money across a range of assets — also known as diversification — can be beneficial for long-term investors. When you put your eggs in many baskets, it may be beneficial if a single asset class goes down.

Step 5: Learn Risk Management in Stock Picking

A risk management strategy can help protect you from big losses. That involves never risking more money than you can afford to lose and knowing what your risk tolerance level is.

Balancing Risk and Potential Returns

How comfortable are you with risk? Are you the aggressive type who is willing to accept higher risk if it means you have the potential for higher returns? Or are you a conservative investor whose priority is to safeguard their money, so you are willing to accept lower returns for investments with lower risk?

In general, higher-growth stocks tend to be riskier, which aggressive investors may gravitate to. Stocks that are more stable and offer lower returns might appeal to a conservative investor.

Understanding how much risk you can tolerate, and balancing that risk with the potential rewards it might offer, is key to choosing which stocks to invest in.

Strategy for Long-Term vs Short-Term Investments

Investors who have a longer investment timeframe — for instance, those investing for retirement, which is 20 or more years away — may be willing to choose higher growth, higher risk stocks because they have time to try to recoup any losses they suffer.

Investors who are investing for the short-term — perhaps they want to buy a new house in two years, or their child will soon be heading off to college — may do best choosing a more conservative investment strategy to help maximize their savings and minimize their losses.

Step 6: Utilize Tools for Effective Stock Selection

There are tools that help you screen stocks. They’re available on many brokerage trading platforms, usually for free.

In addition, when selecting stocks, it can be a good idea to keep on top of news regarding the market in general as well as any specific sector or industry you might be interested in.

Navigating Stock Screeners and Tools

Stock screeners are tools that let you filter through many different stocks using criteria you choose based on your personal investment goals. You could screen by the industry or sector you’re considering, for instance, and by such data as on return on investment (ROI) or earnings per share (EPS). Look for these tools on brokerage trading platforms.

Keeping Up-to-Date with Market Trends

As discussed earlier, there are a number of market news sites you can follow to stay on top of the latest trends and happenings in the market. There are also financial podcasts you can listen to.

Step 7: Seek Answers to Your Stock-Picking Questions

Finally, before buying a stock, there are some key questions you should ask. These questions include:

•   What does the company do?

•   What is the company’s profit or revenue?

•   What is the market for the company and who are the customers?

•   What is the company’s price-to-earnings (PE) ratio?

•   How does it differentiate itself from competitors?

•   Why are you investing in this stock? What do you want it to do for your portfolio?

Once you research the answer to these questions, if the stock seems profitable and well-positioned for the future, you may want to consider it for your portfolio.

The Takeaway

Picking stocks involves a number of steps, such as determining your investment goals, understanding your risk tolerance, and researching companies and stocks that are a good fit with your purpose for investing.

Consider carefully which stocks look strong and could help you meet your investment objectives. And remember to look for stocks that can help you diversify and balance your portfolio as you work to set yourself up for financial success.

Ready to invest in your goals? It’s easy to get started when you open an investment account with SoFi Invest. You can invest in stocks, exchange-traded funds (ETFs), mutual funds, alternative funds, and more. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).

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

FAQ

What is the best formula for picking stocks?

There is no one best formula for picking stocks. One strategy you can use involves several steps, such as: figuring out your investing goals, researching companies to make sure they are a good fit with your goals and that they’re profitable and have a good business plan in place for the future, and evaluating the stock’s price to make sure it’s a good value.

How does Warren Buffett pick a stock?

Warren Buffet’s strategy for picking a stock includes looking for stocks that are undervalued by the market in order to maximize returns. Buffet tends to buy stocks in businesses he understands and those that make sense to him. He also looks at a company’s management to see how it performs.

How do you know if a stock is good?

To help determine if a stock might be a good investment, get answers to questions about the way the company operates. For instance, how does it make money? How has it performed in the past? Are its products in demand? Is the company positioned for growth? Does it have a good management team in place?

Additionally, look at key metrics such as the price-to-earning (PE) ratio to help measure a stock’s value, and earnings per share (EPS) for an indication of its financial strength.

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Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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

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SoFi Invest encompasses two distinct companies, with various products and services offered to investors as described below: Individual customer accounts may be subject to the terms applicable to one or more of these platforms.
1) Automated Investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser (“SoFi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC.
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Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform.

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