SoFi

The Free Application for Federal Student Aid, or FAFSA®, is a form students should fill out each school year to apply for college grants, work-study programs, federal student loans, and certain state-based aid.

Typically, the FAFSA becomes available on October 1 for the following academic year. The 2024-2025 academic year was an exception. Due to form revisions and adjustments to how student aid is calculated, the application wasn’t available until December 31, 2023. The three-month delay had a domino effect, pushing out deadlines for college admissions and financial aid offers.

For the 2025-2026 school year, the FAFSA will be released in phases. Some students will get access on October 1, 2024, with the remainder able to apply on or before December 1.

Try not to let the staggered rollout throw you off your game. If you fail to complete the form or miss the FAFSA deadline, you may not receive financial aid that could help you pay for college. In fact, you should aim to fill out your FAFSA as early as possible, since there is a limited amount of aid available.

Read on for updated federal, state, and institutional FAFSA deadlines to know.

What Is the FAFSA?

The FAFSA is the online form that you must fill out to apply for financial aid from the federal government, state governments, and most colleges and universities. The form requires students and their parents to submit information about household income and assets. That information is used to calculate financial need and determine how much aid will be made available.

If you are a dependent student, you will need to submit your parents’, as well as your own, financial information. If you are considered independent, you are not required to submit your parents’ financial information.

If you are already in school, remember that the FAFSA must be filled out every year, even if your income and tax information haven’t changed.

Federal financial aid includes student loans, grants, scholarships, and work-study jobs. In general, federal and state aid requires that students:

•   demonstrate financial need. Though there is some non-need based aid, such as unsubsidized student loans.

•   be a U.S. citizen or an eligible noncitizen.

•   be enrolled in a qualifying degree or certificate program at their college or career school.

For further details, take a look at the basic eligibility requirements on the Student Aid website .

FAFSA Open Date and Deadline

ASAP: File Your FAFSA for Next Year

Generally, it makes sense to submit the FAFSA promptly after the application release. Some aid is awarded on a first-come, first-served basis, so submitting it early can improve your chances of receiving financial help for college.

May 1: College Decision Time

May 1 is traditionally National College Decision Day, when applicants must inform the colleges they applied to whether they’ll be attending. Make sure you understand the deadlines for the colleges you applied to — they may be different.

June 30: File Your FAFSA for Last Year

You must file the FAFSA no later than June 30 for the school year you are requesting aid for. For the academic year 2024-25, you must file by June 30, 2025, at the very latest.

This FAFSA deadline comes after you’ve already attended and, likely, paid for school. You generally don’t want to wait this long. However, if you do, you can often receive grants and loans retroactively to cover what you’ve already paid for the spring and fall semester. In some cases, you may be able to apply the funds to pay for summer courses.

State and Institutional FAFSA Deadlines

Individual states and colleges have different financial aid deadlines — which may be much earlier than the federal deadline. Here’s a look at two other key FAFSA deadlines to know.

Institutional FAFSA Deadlines

While students have until the end of the school year to file the FAFSA, individual schools may have earlier deadlines. That means you need to get your FAFSA application in by the school’s date to be considered for the college’s own institutional aid. So if you are applying to several colleges, you may want to check each school’s FAFSA deadline and complete the FAFSA by the earliest one.

While filling out your FAFSA, you can include every school you’re considering, even if you haven’t been accepted to college yet.

State FAFSA Deadlines

States often have their own FAFSA deadlines. You can get information about state deadlines at
Studentaid.gov . Some states have strict cutoffs, while others are just best-practice suggestions — so you’ll want to check carefully. States may have limited funds to offer as well.

Federal FAFSA Deadline

Typically, the FAFSA becomes available on October 1, almost a full year in advance of the year that aid is awarded. For the 2024-25 academic year, the FAFSA opened a few months later than usual. However, the federal government gives you until June 30 of the year you are attending school to apply for aid.

It’s generally recommended that students fill out the FAFSA as soon as possible after it’s released for the next school year’s aid to avoid missing out on available funds. Plus, as noted above, there are often earlier school and state deadlines you’ll need to meet.

Taking the Next Steps After Submitting the FAFSA

So what happens after you hit “submit” on your FAFSA? Here’s a look at next steps:

•   Wait for your Student Aid Report (SAR) . If you submitted your FAFSA online, the U.S. Department of Education will process it within three to five days. If you submit a paper form, it will take seven to 10 days to process. The SAR summarizes the information you provided on your FAFSA form. You can find your SAR by logging in to fafsa.gov using your FSA ID and selecting the “View SAR” option on the My FAFSA page.

•   Review your SAR. Check to make sure all of the information is complete and accurate. If you see any missing or inaccurate information, you’ll want to complete or correct your FAFSA form as soon as possible. The SAR will give you some basic information about your eligibility for federal student aid. However, the school(s) you listed on the FAFSA form will use your information to determine your actual eligibility for federal — and possibly non-federal — financial aid.

•   Wait for acceptance. Most college decisions come out in the spring, often March or early April. If you applied to a college early action or early decision, you can expect an earlier decision notification, often around December. Typically, students receive a financial aid award letter along with their acceptance notification. This letter contains important information about the cost of attendance and your financial aid options. However, due to the FAFSA delays, you may be waiting longer on your financial aid offer.

Understanding Your Financial Aid Award

Receiving financial aid can be a great relief when it comes to paying for higher education. Your financial aid award letter will include the annual total cost of attendance and a list of financial aid options. Your financial aid package may be a mix of gift aid (which doesn’t have to be repaid), loans (which you have to repay with interest), and federal work-study (which helps students get part-time jobs to earn money for college).

If, after accounting for gift aid and work-study, you still need money to pay for school, federal student loans might be your next consideration. As an undergraduate student, you may have the following loan options:

•   Direct Subsidized Loans Students with financial need can qualify for subsidized loans. With this type of federal loan, the government covers the interest that accrues while you’re in school, for six months after you graduate, and during periods of deferment.

•   Direct Unsubsidized Loans Undergraduates can take out direct unsubsidized loans regardless of financial need. With these loans, you’re responsible for all interest that accrues when you are in school, after you graduate, and during periods of deferment.

•   Parent PLUS Loans These loans allow parents of undergraduate students to borrow up to the total cost of attendance, minus any financial aid received. They carry higher interest rates and higher loan origination fees than Direct Subsidized and Unsubsidized Loans.

If financial aid, including federal loans, isn’t enough to cover school costs, students can also apply for private student loans, which are available through banks, credit unions, and online lenders.

Private loan limits vary by lender, but students can often get up to the total cost of attendance, which gives you more borrowing power than you have with the federal government. Each lender sets its own interest rate and you can often choose to go with a fixed or variable rate. Unlike federal loans, qualification is not need-based. However, you will need to undergo a credit check and students often need a cosigner.

Keep in mind that private loans may not offer the borrower protections — like income-based repayment plans and deferment or forbearance — that come with federal student loans.


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

The Takeaway

Completing the FAFSA application allows you to apply for federal aid (including scholarships, grants, work-study, and federal student loans). The FAFSA form is generally released on October 1 of the year before the award year and closes on June 30 of the school year you are applying for.

The 2025–26 FAFSA will be released to a limited number of students on October 1, 2024. All students should have access on or before December 31, 2024. That application will close on June 30, 2026. However, individual colleges and states have their own deadlines which are typically earlier than the federal FAFSA deadline. Try to submit your form as soon as possible, since some aid is awarded on a first-come, first-served basis.

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

SoFi 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.

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.

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.

SOIS0124019

Credit hours are the building blocks of a college career. They measure progress, and define full- and part-time status and degree types such as bachelor’s and master’s. And these factors determine federal aid eligibility.

A credit hour is defined as one classroom hour and two hours of student work per week. Students who take 12 or more credit hours a semester are considered full-time. University semesters are a minimum of 15 weeks.

What Is a Credit Hour?

A credit hour is a system to measure college course loads. They were invented in 1906.

According to Encyclopedia Britannica, the Carnegie Foundation created the credit hour system to determine how to give scholarship funds to colleges. However, it quickly became a useful tool for universities to measure higher ed programs and student progress. Nearly every U.S. university adopted the system within six years.

Credits are also key in accreditation, an evaluation process that ensures a college’s academic merit. It’s granted to universities that have met minimum credit requirements and other academic standards.


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

1 Credit Hour Is Equal to How Many Hours?

One credit hour is 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 three hours of work and classroom instruction per week in a one-credit course.

How Many Hours of Study Time per Credit Hour Online?

Credit hours are no different in-person than online, depending on the type of online course. There are two types: synchronous and asynchronous programs.

Synchronous programs are virtual classes that students can attend in real time. These courses may involve digital lectures, class discussions, presentations, and other styles of scheduled interactive learning. Students also work together outside of class, whether virtually or in-person. This type of program offers ease of access.

In asynchronous programs, students access pre-recorded classes and forums on their own time. Students in these programs set their own pace and manage coursework completion deadlines. Virtual attendance is not required and students may communicate with staff and their peers in board-style forums and email.

Synchronous programs have a similar structure to in-person college classes — and therefore have similar credit hour requirements. Some universities suggest more study hours for online credits. For instance, the University of North Carolina suggests four to five hours of study time each week per credit for a bachelor’s degree program.

Asynchronous programs, on the other hand, have more loosely defined requirements for credit courses. Students meet program requirements by fulfilling coursework needs on deadline.


💡 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.

Credit Hour Calculator

To determine total time spent on classes in a semester, add the credits of all your courses. Multiply that number by two hours, or more depending on your university’s requirements. Then multiply that total with the weeks in a semester.

Courses can be one to six credit hours. Below is an example credit hour calculator chart to determine total hours spent on one or more credits. Rice University has a great example of a chart that converts credits to study time.

How Many Credit Hours Do You Need to Graduate?

The credit hours you need depend on the degree type — but the federal minimum is the same for all. The range of credit hours required also varies by major, so be sure to check with your registrar that you have all the information you need.

Higher education programs include associate, bachelor’s, master’s, professional, and doctorate degrees. Depending on the degree, students can expect to complete around 30 to 120 credit hours.

Bachelor’s Degree Credit Hours

Bachelor’s degrees are generally 120 credits minimum and usually 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 complete core curriculum and various credit hour types: general education, major/minor, and elective credits.

General education courses are required courses for a degree. They often cover foundational subjects such math, English, 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 and minor credit hours are classes related to a student’s field of study. They are categorized into lower- and upper-division credits. Students must complete lower-division courses in order to enroll in upper level courses. Internships may also be mandatory and are converted into credits (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 BA and BS Degrees?

Master’s Degree Credit Hours

A master’s degree can range from 30 to 60 credits, and usually lasts two years. Students complete a thesis or project at the end of the program.

Master of Arts (MA), Master of Science (MS), and Master of Business Administration (MBA) are common types of masters, but vary widely in credit requirements. MAs and MSs tend to be 30 credits, while MBAs can take up to 60 credits to complete.

How Many Credit Hours Does a Course Have?

As mentioned, a college class must be at least one hour of classroom instruction and two hours of student coursework per week — the federal minimum. Courses can range from one to six credits — but typically are three to four credits.

How Do Semester Credit Hours Influence GPA?

With credit hours and GPAs, the general rule is this: More credits are better.

Your weighted GPA point values determine your GPA — where the weights are the number of credits for each class. To determine your college GPA with credits, multiply your GPA Point Value with the course’s total credits. Then divide the GPA point value total by the credit total.

For example, if you score an A in your three-credit chemistry class, it has more impact on your overall GPA than the A in your one-credit photography class. Below is an example of the impact of an 18-credit semester and a 12-credit semester on GPAs.

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.

In contrast, if all your one-credit courses are As, and three-credit courses are Bs, you end up with a lower GPA. The weight of the courses’ credits impacts your GPA.

What Is the Cost per Credit Hour?

The average college credit costs $477 — or about $1,431 per 3-credit class, according to the Education Data Initiative. Private four-year universities charge $1,200 per credit, or $3,600 for a three-credit class. These averages exclude Cost of Attendance (COA) such as room and board, books, and daily living expenses.

University tuition inflation has an impact on figures too. In 1963, the cost per credit was $21 per credit hour, or $187 adjusted for inflation. That’s a 255% increase to today’s credit hour rate of $477!

Recommended: What Is the Average Cost of College Tuition?

Paying for College

Higher education is a substantial spend, so it’s worth researching ways to earn aid and cut costs.

Determine what your family is expected to cover, as measured by the Student Aid Index (SAI). Apply for scholarships and grants from your school, fill out the FAFSA®, or Free Application for Federal Student Aid, which is used to determine federal aid, and look into cutting expenses like room and board.

Finally, look into undergraduate student loan options and understand the difference between private student loans vs federal student loan options. Federal loans often have lower interest rates, more flexible repayment plans, and offer subsidized loan options for students who demonstrate financial need. However, there is an annual borrowing maximum for students.

Private lenders offer competitive rates for qualifying borrowers. Repayment plans are generally determined by the individual lender. Unlike most federal student loans, private lenders will generally evaluate a borrower’s credit score and history, among other factors. Potential borrowers may be able to apply with a cosigner if they aren’t able to qualify for a private student loan on their own.

While private student loans can be a powerful tool to help fill financing gaps for college, they don’t always offer the same benefits as federal student loans, so are generally borrowed as a last-choice option.

Recommended: How to Pay for College

The Takeaway

Understanding how universities build programs with college credits will help you understand its cost. College credits define degree types, such as master’s and bachelor’s programs. The amount can also determine a student’s status and progress. Finally, these dictate the eligibility rules for federal and private lenders.

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.

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. 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.

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.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

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

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.

SOIS0224003

Uninsured motorist coverage shields you from having to pay for injuries and property damage in accidents that weren’t your fault and were caused by an uninsured driver.

According to the Insurance Research Council, 14.0% of motorists on the road are uninsured. Purchasing uninsured motorist coverage reduces the likelihood that you’ll have to pay out of pocket if you’re involved in an accident caused by one of these irresponsible drivers.

It’s generally a good idea to add uninsured motorist coverage to your auto insurance policy, as it’s fairly inexpensive, usually only costing an extra $5 – $10 a month, per vehicle, for policyholders with clean driving histories. Below, we give you the scoop on the different kinds of uninsured motorist coverage and what these policies entail.

Breaking Down Uninsured Motorist Coverage Variations

There are two main kinds of uninsured motorist coverage. Similar to your standard auto insurance policy’s collision and bodily injury coverage, this kind of policy breaks down into uninsured motorist bodily injury coverage and uninsured motorist property damage coverage.

•   Uninsured motorist bodily injury coverage: Covers your party’s medical expenses and related costs in accidents caused by uninsured drivers.

•   Uninsured motorist property damage coverage: Covers your repair bills and related costs in accidents caused by uninsured drivers.

Bodily injury and property damage coverage for uninsured motorists are sometimes packaged and sold together when you purchase uninsured motorist insurance. However, this isn’t the case with all policies; check with your insurance provider to know for sure. Now, let’s take a closer look at each of these kinds of coverage.

Uninsured Motorist Bodily Injury Coverage (UMBI)

Uninsured motorist bodily injury coverage (UMBI) pays for the cost of medical bills, lost wages, pain and suffering, and funeral costs (though we hope that is never needed) in the event an uninsured driver causes an accident in which you’re the victim.

In some instances, this policy may pay out if you, as a pedestrian or bicyclist, are involved in an accident caused by an uninsured driver. Check with your insurance provider to confirm whether this might be covered.

UMBI typically does not have a deductible to meet; you would get full reimbursement of the costs.

Uninsured Motorist Property Damage Coverage (UMPD)

Uninsured motorist property damage coverage (UMPD) pays for the cost of repair bills for either your vehicle or property in the event either is involved in an accident caused by an uninsured driver.

Unlike bodily injury coverage, UMPD often requires the payment of a deductible when used. This is usually set by state law and typically is between $100 and $1,000.


💡 Quick Tip: If your car is paid off and worth only a few thousand dollars, consider updating your car insurance: You might choose to opt out of collision coverage and double down on liability.

Uninsured vs Underinsured Motorist Coverage

Here’s another kind of coverage you should know about: underinsured motorist coverage, which helps cover your costs if you’re involved in an accident where the party at fault has insufficient insurance coverage to pay for your medical costs.

Underinsured motorist coverage differs from uninsured motorist coverage in that it’s designed to cover any shortfalls in your costs due to the underinsured motorist’s inadequate insurance policy. By contrast, uninsured motorist coverage covers your bills due to the uninsured driver’s failure to purchase insurance.

Similar to uninsured motorist coverage, underinsured motorist coverage also comes in bodily injury and property damage variants. Both bodily injury and property damage coverage is usually packaged and sold together, though insurance policies may vary.

Underinsured motorist coverage is sold separately from uninsured motorist coverage, and states can have different coverage requirements for each. Check with your insurance provider to verify whether you need to purchase these separately.

Uninsured Motorist Coverage Limits

Your auto insurance quote will typically break down your uninsured motorist coverage limits into two numbers: a smaller dollar figure followed by a larger dollar figure, separated by a slash. For example, $100,000/$300,000.

This can also be expressed as follows:

•   $100,000 per person

•   $300,000 per accident

These two numbers represent the per person and per accident coverage limits of your uninsured motorist insurance. The per person limit is the maximum your insurance company will pay for any single individual injured in a covered accident. Conversely, the per accident limit is the maximum your insurance company will pay for a covered accident, regardless of how many injured people are in your party.

How Uninsured Motorist Coverage Limits Work

If you’re thinking, “But what exactly does that mean?” we hear you. Let’s spell out how this coverage would work. If you have a family of five that’s riding in a car and it gets hit by an uninsured driver, the maximum amount your insurance company will pay for their cumulative medical bills is $300,000, despite each individual’s coverage limit being $100,000.

If you’re ever involved in an accident caused by an uninsured driver where your costs exceed your coverage limits, in most cases, your health insurance policy will usually kick in to cover the balance. Consult your insurance providers for the specifics on your policies.

Recommended: How Much Auto Insurance Do I Really Need?

How Much Uninsured Motorist Coverage Do I Need?

The answer depends on whether your state requires uninsured motorist coverage. If it does, you must buy at least the state’s minimum (for more details, see below). Typically, this amount will match your liability coverage amounts. If your state does not require this kind of coverage, consider variables like the healthcare costs in your state and how much your vehicle is worth. Generally, uninsured motorist coverage is fairly affordable and is a worthy investment for some peace of mind.

According to the Insurance Research Council, approximately one in seven drivers on the road are uninsured. This figure is even higher in states like Mississippi and Michigan, where over 25% of drivers on the road are estimated to be uninsured.

Based on those figures, residents of higher risk states may be well-served by purchasing uninsured motorist coverage, while it might not be as high of a priority for residents of lower-risk states, like Massachusetts or New Jersey, where 3.5% and 3.1% of drivers respectively are estimated to be uninsured.

Now, let’s circle back to the states that do require this kind of policy. The table below lists the regulations regarding the minimum required uninsured and underinsured motorist coverage for each state.

Recommended: What Does Liability Auto Insurance Typically Cover?

Uninsured/Underinsured Motorist Coverage Requirements by State

Let’s take a look at the guidelines in every state, so you can see how much coverage may be required where you live. In each category, the amount shown is per person/per accident. When there is not a figure in an area of the chart, that means the insurance isn’t required.

^*New Hampshire and Virginia do not require drivers to purchase auto insurance, but drivers who do choose to purchase auto insurance must have at least the minimum uninsured/underinsured motorist coverage amounts listed.

Recommended: 5 Steps to Switching Your Car Insurance

How Much Does Uninsured Motorist Coverage Cost?

Depending on how much uninsured motorist coverage you choose to purchase and your personal driving habits, your costs could be as little as $5 to $10 per month. This figure also tends to vary widely based on the overall percentage of uninsured motorists in your area, according to national insurance data.

Insurance premiums vary widely across drivers, states, and even insurance providers, so make sure you check around for a personalized quote.


💡 Quick Tip: Saving money on your fixed costs isn’t always easy. One exception is auto insurance. Shopping around for a better deal really can pay off.

The Takeaway

The prospect of being in an accident caused by an uninsured driver is a real concern, given the number of these motorists on the road. Adding uninsured motorist coverage to your auto insurance policy may be a good idea. In some states, it may even be required by law. For a relatively low cost, you can protect yourself from the possibility of being left with bills because another driver didn’t have enough insurance. The right package of car insurance policies is one way to protect yourself from unexpected circumstances.

When you’re ready to shop for auto insurance, SoFi can help. Our online auto insurance comparison tool lets you see quotes from a network of top insurance providers within minutes, saving you time and hassle.

SoFi brings you real rates, with no bait and switch.

Photo credit: iStock/RyanJLane

Auto Insurance: Must have a valid driver’s license. Not available in all states.
Home and Renters Insurance: Insurance not available in all states.
Experian is a registered trademark of Experian.
SoFi Insurance Agency, LLC. (“”SoFi””) is compensated by Experian for each customer who purchases a policy through the SoFi-Experian partnership.

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.

SOPT0224004

Military members, veterans, and their families have special opportunities when it comes to funding higher education. Given the high cost of attending college, they’re well worth checking into.

Find out about student loans for military dependents: children, spouses, and sometimes other relatives of active duty service members.

What Are Student Loans?

First things first: What are student loans, and how do student loans work?

Student loans are a type of financial product wherein a bank or other lender gives a student up-front money with which to pay for college and other educational expenses. Student loans can be used to cover tuition, textbooks, and even living expenses such as housing. Student loans are available through the government as well as through private lenders, and can be taken out by parents or students themselves.

Student loans, like all forms of debt, come at a cost: Interest accrues from the time the first loan check is disbursed. In the case of Direct Subsidized loans, the U.S. government covers the interest so long as the student is enrolled at least half-time and for the first six months after the student stops attending.

Although student loan interest rates tend to be lower than, say, credit card interest rates, the charges can still rack up over time. This is part of the reason Americans are saddled with a whopping $1.76 trillion in student loan debt.

Recommended: Using Student Loans for Living Expenses and Housing

Who Is a Military Dependent?

Military dependents are relatives of an active-duty service member, or sometimes a veteran, who can qualify for benefits based on their family member’s service.

Some family members, such as military spouses and children under the age of 21, automatically qualify as dependents. Other family members, such as parents and adult children, may also qualify if they meet certain criteria. Military dependents may receive death benefits, low-cost housing, and other discounts due to their status.


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

Financial Aid Service Organizations for Military Dependents

Here are some of the financial aid options open to military members and their dependents.

Government-Sponsored Financial Aid

For most students, including military dependents, the government is the first place to turn for financial aid: Along with the opportunity to take out Subsidized Direct Loans, you may be eligible for grants and scholarships thanks to your service or your family member’s. To apply for federal aid, you’ll need to fill out the Free Application for Federal Student Aid (FAFSA®) annually.

For instance, if you’re under 24 and your parent or guardian died in service in Iraq or Afghanistan after 9/11, you may qualify for a federal Pell Grant or Iraq and Afghanistan Service Grant, both of which do not need to be repaid.

If you already have federal student loans, you may also be eligible for military student loan forgiveness, depending on the type of loans you have and what you or your family member’s service history looks like.

Additionally, the Army and Navy Reserve Officers’ Training Corps, or ROTC, offers no-cost scholarships at over 1,000 colleges across the United States. See the official Federal Student Aid website (StudentAid.gov) for full details.

Recommended: I Didn’t Get Enough Financial Aid: Now What?

American Legion

The American Legion offers college funding to the children of veterans who died or became disabled as part of post-9/11 service through their Legacy Scholarship program (Legion.org/Scholarships/Legacy). The scholarship awards up to $20,000 and can be renewed up to six times.

AMVETS

AMVETS teams up with corporate sponsors to offer scholarships of up to $5,000 to veterans and military spouses who are interested in pursuing skilled trades, such as carpentry, electrical engineering, and plumbing. The program, called the Generation T Scholarship (AMVETS.org/Generation-T), is offered to the spouses of deceased veterans but not their children.


💡 Quick Tip: It’s a good idea to understand the pros and cons of private student loans and federal student loans before committing to them.

Paralyzed Veterans of America

Paralyzed Veterans of America offers scholarships of up to $2,500 for full-time students and $1,000 for part-time students to its members, their spouses, and their dependent children under 24 years of age. Awardees may apply a second time, but are only eligible to receive the scholarship twice in a lifetime. (PVA.org/Find-Support/ Scholarship-Program/)

Veterans of Foreign Wars

The organization Veterans of Foreign Wars also offers student veteran support in a variety of ways, including its Sport Clips Help A Hero Scholarship, which awards qualified applicants up to $5,000 per semester (per family), as well as the Student Veteran Support Grant, which is designed to be used for events and outreach efforts that assist veterans who are currently enrolled in college. The grant can be used for up to $500 per event up to twice per fiscal year for a total of $1,000. (VFW.org/ Assistance/Student-Veterans-Support)

Recommended: Types of Federal Student Loans

Private Student Loans for Military Dependents

Finally, military dependents may also choose to look into private student loans to fund their education.

Private student loans are, as their name suggests, not backed by the government and are instead offered by private banks, credit unions, and lenders. They do come with certain advantages — for example, they generally don’t carry the same lifetime maximums as publicly funded student loans, and you may have more flexibility when it comes to your loan term and repayment schedule.

However, private student loans sometimes carry higher interest rates than federal loans do, and your credit report will be pulled in order to qualify you — which isn’t the case for loans from the government. Because private loans lack the borrower protections afforded to federal student loans, they are most often considered as a last resort option.

The Takeaway: Explore Private Student Loan Options With SoFi

As a military dependent, you have a lot of options to consider when it comes to financial aid. Be sure to look into scholarships offered by the American Legion, AMVETS, Paralyzed Veterans of America, and the VFW. Military dependents should also apply for a Pell Grant, which doesn’t need to be repaid. And federal subsidized student loans give borrowers a break on some accrued interest.

For some, private student loans offer an attractive combination of accessibility and flexibility. (Keep in mind, though, that private student loans tend not to be eligible for student loan forgiveness and other programs.)

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

Do military dependents get free college?

Not automatically, but there are programs specifically designed to help military members and their dependents pay for college.

Does the military pay spouses’ student loans?

Not directly, but military spouses may be eligible for federal student loan forgiveness if their loans are from the federal government.

Can military dependents get FAFSA?

Yes, military dependents can qualify for federal financial student aid using the FAFSA, or Free Application for Federal Student Aid. The FAFSA is a good first place to turn when looking for financial aid because it can match you with low-cost, need-based options like Direct Subsidized Loans.

Photo credit: iStock/Liudmila Chernetska

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.

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.

SOIS0224004

Knowing your risk tolerance is an important factor in investing. Some investors are willing to take big risks with the potential for big rewards. Others prefer to minimize their losses, even if it means smaller returns.

Determining what type of risk taker you are by taking our risk tolerance quiz can help you decide how best to invest your money. The stock market can be volatile, and the assets and allocations you choose should be those that make you feel comfortable personally and financially — especially for the inevitable dips in the market.

What Investment Risk Tolerance Is

When it comes to investing, understanding risk tolerance involves the following three factors:

•   Your risk capacity: This is your ability to handle risk financially — the amount of money you can afford to lose without impacting your financial security. How close you are to retirement and the financial obligations you have will affect your risk capacity.

•   Your needs and wants: These are your goals for your finances and your lifestyle. For instance, maybe you want to retire soon or save up for a down payment on a new house.

•   Your emotional risk IQ: This is about your personality and how you see risk. You might be a thrillseeker who likes to live on the edge. Or perhaps you prefer a sure and steady approach.

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

What Your Risk Tolerance Means

Now that you know whether your investment style is conservative, moderate, or aggressive, you can dig a little deeper to understand what’s driving your specific risk tolerance.

First, of course, there are the goals you’re saving and investing for. Is it retirement? A down payment on a new house? Sending your kids to college? Where your money is going will make you more or less willing to take risks for the potential of higher returns.

Your time-frame is another major factor. If you plan to retire in a few years, you have less time to recover from possible losses, so you’ll likely take a conservative approach to investing. You need your money to be there so you’ll have income to live on in your golden years.

But if you’re a newbie investor in your 20s, you have decades ahead of you with plenty of time to recoup any losses. In that case, you may be more aggressive with your investments to try to maximize your returns. And if you fall someplace in the middle of these two groups, time-wise, you might favor a more moderate investing strategy that balances risk and reward.

Your income is also very important. If you expect your income to grow, you may feel freer to take risks. But if your income is uncertain — maybe you’re a freelancer, for instance — or you don’t anticipate your salary to grow, you might be much more cautious with your money.

Finally, there’s your temperament. If you invest in stocks, for example, are you going to be filled with anxiety every time the market dips? Or are you more or less unflustered by swings in the market?

Thinking about these different factors can give you some insights into your feelings about money.

Finding Investments That Match Your Risk Tolerance

With this new knowledge in hand, you can invest your money in a way that makes sense for you and the amount of risk you feel comfortable with. These are some scenarios you might want to think about, depending on your investment style.

•   Conservative: A conservative investor may opt for a portfolio that mainly consists of funds that tend to be stable and lower risk, such as money market funds and government bonds.

•   Moderate: An investor who takes moderate risks might choose to balance their portfolio between riskier assets like stocks and more stable investments like money market funds and bonds.

•   Aggressive: This type of investor will likely gravitate to assets with a high potential for return, but also a higher potential for volatility and loss, such as growth stocks and options trading.

Whatever your risk tolerance is, it’s wise to diversify your portfolio across different asset classes including stocks, bonds, and commodities.

The Takeaway

Each investor has a risk tolerance level depending on their individual circumstances. A risk tolerance quiz can help you evaluate how much risk you should take.

That said, it’s vital to know that all investments come with some degree of risk. A conservative investor will likely feel better with lower risk investments, while an aggressive investor will typically look for assets with high growth potential, despite the higher risk they pose.

Once you have investments that suit your style and temperament, the better you may feel about your investment strategy. Just be sure to check your investments regularly to make sure they’re on target to get you where you need to be to meet your financial goals.

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).

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.

SoFi Invest®