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Returning to school can help you advance in your current job, open you up to new professional opportunities, and increase your salary. But those potential benefits don’t come without costs.

If you’re thinking about going back to school at 30 (or any age), it’s a good idea to consider what you hope to gain out of more education, and whether it may increase your earning potential or improve your job (and overall life) satisfaction. You’ll then want to factor in how much the program will cost and how you’ll pay for it.

There’s no one simple formula to determine whether or not going back to school is worth it, but these tips can help you make an informed decision.

Determining Whether Going Back to School Is Worth It

Once you’re clear about what program you’d like to pursue and have a list of schools to consider, you may want to ask yourself the following:

•   Will the degree help me in my career path?

•   Is this degree necessary to continue on my career path?

•   Will this degree increase my job and overall life satisfaction?

•   Will my investment in this degree be worth the cost?

Here’s a look at how you can answer each one of these questions.

Will This Degree Help Me in My Career Path?

When going back to school as an adult, it’s important to position yourself for continued growth based upon the career progress you’ve made to date. Sometimes, your continuing education of choice will take you further on the same career path you’ve already established. Other times, you will be broadening your education to branch out into complementary fields.

Talk to Trusted Colleagues

To make sure that the program you’re choosing will help you to accomplish your career goals, consider talking to people whose judgment you trust, including those who have pursued the path you’re considering.

Review Linkedin

Another resource that might be worth checking out is LinkedIn. You can search the profiles of people who work for companies you admire or who are in a job position you’d like for yourself. What educational credentials have they listed? If they have a graduate degree, which one? Does this mesh with what you have in mind?

Recommended: 6 Ways to Save Money for Grad School

Evaluate Career Opportunities

Sometimes, of course, obtaining additional education is necessary to fulfill your career goals. This is true if you want to become a doctor, dentist, nurse, or lawyer. In other cases, you may not necessarily need additional education to get a job in a particular field, but you might need further education to rise up the career ladder, get a significant increase in pay, or work for a particularly prestigious company.

Obtaining an MBA, for instance, can provide you with skills that will suit you well in various fields. It can also position you to take on new career positions and boost your overall pay.

Is This Degree Necessary to Continue on My Career Path?

Sometimes, of course, obtaining additional education is necessary in order to fulfill your career goals. This is true if you want to become a doctor or a dentist, a nurse or a lawyer. And, in other cases, you may not necessarily need additional education to get a job in a particular field, but you might aspire to work for a company that requires further education from its professionals.

Obtaining an MBA, for instance, can provide you with skills that will suit you well in various fields. And companies are very interested in hiring MBA graduates: After a hiring slump due to the Covid-19 pandemic, companies planning to hire MBAs in 2021 has rebounded to the same level as pre-pandemic, according to The Graduate Management Admission Council . In other words, not only can getting an MBA increase your skill set, it also may set you up for greater career and financial success down the line.

Will This Degree Increase My Job and Overall Life Satisfaction?

Any time you invest significant resources into a decision, such as going back to school, you probably have desired outcomes in mind. If you’re thinking about going to college to finish your degree (or for the first time) or going to grad school, you may be hoping to receive a promotion or get a better or more satisfying job, which is reasonable. But, it’s also important to consider whether those accomplishments will really make you happier.

A lot of the things in work that make us happy are intangible: a work culture and community that aligns with your values, work-life balance, or a boss you work well with. Having said that, you might need an advanced degree to get into companies and positions that provide these essentials.

Keep this in mind when deciding if going back to school is the right decision to make.

Will My Investment in This Degree Be Worth the Cost?

To determine the answer to this question, you’ll want to try to calculate what your financial return on education (ROEd) might be. To do this, you’ll first need to research the salary potential for someone with the degree you’re considering. You can then look at the costs involved to determine if, and when, the investment will likely pay off.

According to data from the National Center for Education Statistics, workers aged 25 to 34 with bachelor’s degrees earn, on average, 55% percent more than those who completed high school; those with master’s or higher degrees earn around 21% more than those with bachelor’s degrees.

How to Finance Going Back to School as an Adult

If you decide going back to school is worth the cost, the next step is to figure out how to pay for the program of your choice.

Explore Private Scholarships

First, you can conduct a scholarship search and explore foundations and organizations that may provide funding to you based upon your professional credentials, your community, religious affiliation, and/or ethnicity, etc. Also, you could check to see if your employer offers tuition reimbursement or any scholarship or grant programs that can benefit you.

Federal Financial Aid

It’s also a good idea to fill out the Free Application for Federal Student Aid (FAFSA®). This will give you access to financial aid, including grants, scholarships, work-study, and federal student loans. If you’re looking into grad school, keep in mind that graduate or professional students are typically considered independent students for the purposes of completing the FAFSA form. This means you generally are not required to provide parent information.

Grants and scholarships are a form of gift aid and do not need to be paid back. Federal student loans need to be repaid, but come with benefits such as income-driven repayment plans and forgiveness programs.

Private Student Loans

If financial aid isn’t enough to cover the cost of going back to school, you might look into getting a private student loan. These are available through private lenders, including banks, credit unions, and online lenders. Loan limits vary from lender to lender, but you can often get up to the total cost of attendance for an undergraduate or graduate program. Interest rates vary but borrowers who have strong credit generally qualify for the lowest rates.

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


💡 Quick Tip: Master’s degree or graduate certificate? Private or federal student loans can smooth the path to either goal.

Refinancing Existing Student Loans

If you’re heading back to school and have existing student loans from your undergraduate degree, refinancing might allow you to qualify for a lower interest rate. This can either help you pay off the loan faster and/or decrease how much you pay each month. You can also lower your monthly payments by refinancing for a longer loan term. However, this will result in paying more interest overall.

You can refinance private or federal student loans. It’s important to note that when you refinance federal student loans with a private lender, you forfeit certain federal benefits, such as forbearance and forgiveness programs.

What Is Student Loan Entrance Counseling?

If you plan to go back to school as an adult and take out federal student loans, keep in mind that all federal borrowers must go through student loan entrance counseling. This is a short, online course that is designed to help ensure students understand the responsibilities and requirements that come with borrowing student loans. It highlights the terms and conditions of borrowing a loan, and also emphasizes borrower rights.

The federal government conducts student loan entrance counseling online. You can get details on the course by logging into your account on the Federal Student Aid website.

The Takeaway

When evaluating whether or not going back to school is worth the cost, you’ll want to factor in things like your career goals, the anticipated job market after graduation, typical program costs, and average salaries for the career you are pursuing with the degree.

Going back to school is a personal choice. While it typically comes with added expenses, you may decide that the potential returns make it well worth the investment.

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.

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.

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.

SOIS1123017

When you take out any type of loan, you typically pay interest. This is the cost of borrowing money from a lender. The interest you pay for many student loans starts growing from the day the funds are released and continues until you’ve fully paid off the loan. This is why you pay more for most student loans than the amount you originally borrowed.

No-interest loans or interest-free loans, also known as scholarship loans, don’t charge any interest, so you only pay back exactly what you borrowed. They are typically offered by nonprofit organizations, state governments, and universities.

While these loans are relatively rare, and amounts tend to lower than other types of student loans, no-interest student loans do exist and may be worth looking into for the potential savings. Read on to learn how interest-free student loans work and where to find them.

What Is a No-Interest Student Loan?

Interest-free student loans are loans that do not accrue interest. Unlike grants and scholarships, the loan amount must be repaid. Because there are no interest charges, however, the amount repaid by the borrower remains the same as the original amount borrowed. Traditional student loans, whether federal or private, all come with interest rates that are either fixed or variable.

The interest rates on federal student loans are fixed and are set annually by Congress. For the 2023-2024 school year, the interest rate on Direct Subsidized or Unsubsidized Loans for undergraduates is 5.50%, the rate on Direct Unsubsidized Loans for graduate and professional students is 7.05%, and the rate on Direct PLUS Loans for graduate students, professional students, and parents is 8.05%.

While federal student loan rates are the same for every borrower, private student loan rates range based on the lender, the type of interest rate (fixed or variable), and the borrower’s credit score. Interest on private loans can run anywhere from 4.42% to 16.99% APR.

Whatever the interest rate on a student loan, you will end up paying more than you borrow. No-interest student loans can be an attractive alternative. Here are some places to look for interest-free loans:

•   Schools Some colleges and universities offer no-interest loans for current students to cover emergency expenses.

•   States You may be able to find an interest-free student loan through your state’s education agency. For example, Massachusetts offers students who demonstrate financial need and attend a qualifying school in Massachusetts a no-interest loan for up to $4,000 each academic year.

•   Nonprofit organizations Some foundations and nonprofits offer no-interest student loans. These loans can be set up in different ways. In some cases, you can get a small loan amount; in others, the organization will pay your remaining cost of attendance. Some are awarded based on merit, while others are awarded based on financial need.

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

Applying for Interest-Free Student Loans

The application process for most interest-free loans resembles the application process for grants or scholarships more closely than a traditional loan application.

It’s a good idea to fill out the Free Application for Federal Student Aid (FAFSA®), even if you want to focus on loans without interest. Some interest-free loans use the FAFSA to determine financial need. And while federal loans generally accrue interest, they typically have lower rates than private student loans. Federal student loans also come with benefits, such as income-based repayment and forgiveness programs, that private student loans and no-interest loans may not offer.

Interest-free student loans are often local and state-based, rather than national. They may require proof of residency in a certain state. Some may also have an essay requirement, as well academic requirements, and might even require an interview.

The process is usually more intense than a regular student loan because funds are limited. Some state agencies and philanthropic organizations use the term “scholarship loan” to refer to interest-free loans. Scholarship loans may also be repaid through public service.

Keep in mind though that those organizations are still separate from the government, and do not offer the same repayment plans as the loans offered through the U.S. Department of Education.

Subsidized Loans: No Interest Until After Graduation

Interest-free loans are relatively rare, so it’s possible that students will still need to rely on federal student aid. There are two types of federal Direct Loans available to undergraduate students: subsidized and unsubsidized.

Subsidized loans are available to undergraduates who demonstrate financial need. The U.S. Department of Education pays the interest accruing on the loans while you’re in school, during your six-month grace period, and when your loans are in deferment.

On the other hand, unsubsidized student loans are available to undergraduate and graduate students, and they don’t require that students demonstrate need in order to qualify. Interest accrues while you’re in school, and during grace periods, deferment, or forbearance — and you’re responsible for paying the interest.

Federal student loans also offer a few different payment plans, including income-driven repayment plans, so that borrowers can find the option that works best for them. There are also borrower protections like deferment or forbearance that can act as a safety net for borrowers who find themselves facing financial difficulties down the road.


💡 Quick Tip: Would-be borrowers will want to understand the different types of student loans that are available: private student loans, federal Direct Subsidized and Unsubsidized loans, Direct PLUS loans, and more.

The Takeaway

No-interest student loans, sometimes called scholarship loans or interest-free loans, are loans awarded to students that do not accrue interest at all. While not common, there are some nonprofits, state agencies, schools, corporations, and religious organizations that offer interest-free loans to students.

In case you’re not able to find or qualify for a no-interest loan, it’s a good idea to fill out the FAFSA to access other forms of financial aid, including grants, scholarships, and federal student loans.

Sometimes, financial aid and scholarships don’t provide enough funding to pay for college. In that case, you might want to look into private student loans. While private student loans can be helpful tools when it comes to paying for college, they do not have the same borrower protections as federal student loans, so you generally only want to consider them after all other aid options have been reviewed.

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.

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.

SOIS1123016

A forward contract, also referred to as a forward, is a type of customizable derivative contract between a buyer and a seller that sets the sale of an asset at a specific price on a specific future date. Like all derivatives, a forward contract is not an asset itself, but a contract representing the potential future trade of an underlying asset.

Forward contracts are similar to options, as discussed below, but there are some key differences that investors will need to know if they plan to use forwards as a part of their investing strategy.

How Do Forward Contracts Work?

Forwards are similar to options contracts in that they set a specific price, amount, and expiration date for a trade, but they are different because most options give traders the right, but not the obligation, to trade. With forwards contracts the transaction must take place on the expiration date.

Unlike futures contracts, another type of derivative, forwards are only settled once on their expiration date. The ability to customize forwards makes them popular with investors, since the buyer and seller can set the exact terms they want for the contract. Many other types of derivative contracts have preset contract terms.

There are four main aspects and terms that traders should understand and consider before entering into a forward contract. These components are:

•   Asset: This refers to the underlying asset associated with the forward contract.

•   Expiration Date: This is the date that the contract ends, and this is when the actual trade occurs between the buyer and seller. Traders will either settle the contract in cash or through the trade of the asset.

•   Quantity: The forward contract will specify the number of units of the underlying asset subject to the transaction.

•   Price: The contract will include the price per unit of the underlying asset, including the currency in which the transaction will take place.

Investors trade forwards over the counter instead of on centralized exchanges. Since the two parties custom create the forwards, they are more flexible than other types of financial products. However, they carry higher risk due to a lack of regulation and third party guarantee.


💡 Quick Tip: In order to profit from purchasing a stock, the price has to rise. But an options account offers more flexibility, and an options trader might gain if the price rises or falls. This is a high-risk strategy, and investors can lose money if the trade moves in the wrong direction.

Recommended: What Are Over-the-Counter (OTC) Stocks?

What’s the Difference Between Forward and Futures Contracts?

Futures and forwards have many similarities in that they are both types of investments that specify a price, quantity, and date of a future transaction. However, there are some key differences for traders to know, including:

•   Futures are standardized options contracts traded on centralized exchanges, while forwards are customized contracts created privately between two parties.

•   Futures are settled through clearing houses, making them less risky and more guaranteed than forwards contracts, which are settled directly between the two parties. Parties involved in futures contracts almost never default on them.

•   Futures are marked to market and settled daily, meaning that investors can execute a strategy to trade them whenever an exchange is open. Forwards are only settled on the expiration date. Because of this, forwards don’t usually include initial margins or maintenance margins like futures do.

•   It’s more common for futures to be settled in cash, while forwards are often settled in the asset.

•   The futures market is highly liquid, making it easy for investors to buy and sell whenever they want to, whereas the forwards market is far less liquid, adding additional risk.

Forward Contract Example

Let’s look at an example of a forward contract. If an agricultural company knows that in six months they will have one million bushels of wheat to sell, they may have concerns about changes in the price of wheat. If they think the price of wheat might decline in six months, they could enter into a forward contract with a financial institution that agrees to purchase the wheat for $5 per bushel in six months time in a cash settlement.

By the time of the expiration date, there are three possibilities for the wheat market:

1.    The price per bushel is still $5. If the asset price hasn’t changed in six months, no transaction takes place between the agricultural company and the financial institution and the contract expires.

2.    The price per bushel has increased. Let’s say the price of wheat is now $5.20 per bushel. In this case the agricultural producer must pay the financial institution $0.20 per bushel, the difference between the current price market and the price set in the contract, which was $5. So, the agricultural producer must pay $200,000.

3.    The price per bushel has decreased. Let’s say the price is now $4.50. In this case the financial institution must pay the agricultural producer the difference between the spot price and the contract price, which would be $500,000.

Pros and Cons of Trading Forwards

Forwards can be useful tools for traders, but they also come with risks and downsides.

Pros of Trading Forwards

There are several reasons that investors might choose to use a forward:

•   Flexibility in the terms set by the contract

•   Hedge against future losses

•   Useful tool for speculation

•   Large market

Cons of Trading Forwards

Investors who use forwards should be aware that there are risks involved with these financial products. Those include:

•   Risky and unpredictable market

•   Not as liquid as the futures market

•   OTC trading means a higher chance of default and no third party guarantees or regulations

•   Details of contracts in the market are not made known to the public

•   Contracts are only settled on the expiration date, making them riskier than futures contracts that are marked-to-market regularly

Who Uses Forward Contracts?

Typically, institutional investors and day traders use forwards more commonly than retail investors. That’s because the forwards market can be risky and unpredictable since traders create the contracts privately on a case-by-case basis. Often the public does not learn the details of agreements, and there is a risk that one party will default.

Institutional traders often use forwards to lock in exchange rates ahead of a planned international purchase. Traders might also buy and sell contracts themselves instead of waiting for the trade of the underlying asset.

Traders also use forwards to speculate on assets. For instance, if a trader thinks the price of an asset will increase in the future, they might enter into a long position in a forward contract to be able to buy the asset at the current lower price and sell it at the future higher price for a profit.

How Do Investors Use Forwards?

Traders use forwards to hedge against future losses and avoid price volatility by locking in a particular asset price or to speculate on the price of a particular asset, such as a currency, commodity, or stock. Forwards are not subject to price fluctuations since buyers and sellers have agreed to a predetermined price.

The trader buying a forward contract is taking a long position, and the trader selling is going into a short position. This is similar to options traders who buy calls and puts. The long position profits if the price of the underlying asset goes up, and the short position profits if it goes down.

Locking in a future price can be very helpful for traders, especially for assets that tend to be volatile such as currencies or commodities like oil, wheat, precious metals, natural gas.

Recommended: Why Is It Risky to Invest in Commodities?

The Takeaway

Forward contracts are a common way for institutional investors to hedge against future volatility or protect against losses. However, they’re risky securities that may not be the best investment for most retail investors.

Given the specialized nature of forwards contracts (and other types of options), the risks may outweigh the potential rewards for many investors. As such, it may be a good idea to consult a financial professional before dabbling with forwards, or incorporating them into a larger investing strategy.

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).

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