SoFi

If you enjoy — and excel at — math and problem solving, you may want to consider majoring in computer science (or CS). As our world becomes increasingly dependent on technology, computer science majors are standing out from the crowd as competitive job applicants and higher-than-average earners.

Of course, getting a four-year degree in computer science involves taking on challenging coursework and investing a significant amount of money. For many students, however, it can be well worth the time, hard work, and expense. Here’s what you need to know about becoming a CS major.

What Is a Computer Science Major?

A computer science major is a course of study that focuses on computer hardware and software systems. Students learn how to develop software, design websites, and manage databases. Graduates with a computer science degree can pursue jobs in an array of fields, including software engineering, web development, information technology, and network systems administration.

Since our world is increasingly dependent on computer technology, computer scientists are in demand in a wide range of industries, from more traditional paths like corporate web development or information security to positions in fintech startups, healthcare, communications, and more.

Basically, if a job has to do with programming or maintaining computer software or networks, computer science can help prepare you for it. In some cases, you may need to pursue studies at the graduate level in order to unlock access to certain positions — but it all starts with a computer science major in college.


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

Computer Science vs Computer Engineering

It’s worth noting that computer science isn’t the only degree path for those pursuing jobs in technology. Computer engineering is another course of study — but there are some important differences between the two.

Generally speaking, computer engineers get more education about the hardware side of computing: how to build a computer from scratch and a complete understanding of the architecture of a PC.

Computer science, on the other hand, focuses primarily on computer theory and software. Computer scientists work with complex software systems, machine learning-based algorithms, and more.

However, students with either major will graduate with a basic understanding of common coding languages and a general aptitude around computer software that will set them up for a job in technology.

Recommended: Are Coding Bootcamps Worth the Money?

What are Common Computer Science Degree Requirements?

A computer science degree can grant you access to a wide range of opportunities — but you do have to do the work to earn one first. Given its focus on programming and problem-solving, computer science is a math-heavy degree that requires students to grapple with some heady, abstract concepts. As college majors go, it’s definitely considered a challenging course of study.

For instance, computer science majors are typically required to take calculus courses, as well as other complicated types of math like linear algebra and statistics. Students will also likely need to master — or at least demonstrate proficiency in — several different programming languages (for example, Java, SQL, and Python®). They can also expect to face classes that cover complex and often theoretical topics, such as algorithm design, data visualization, neural networks, and basic cryptography.

Of course, the specifics of your degree requirement will depend on which institution you’re attending and also which specific computer science degree you’re after.

For instance, both bachelors of science (B.S.) degrees and bachelor of arts (B.A.) degrees in computer science are available at the undergraduate level. Generally speaking, a B.A. might allow for more electives and studies outside of the computer science department, whereas a B.S. might have more stringent requirements.

There are also masters- and doctorate-level computer science studies for those who’ve already completed their undergraduate degree — though you’ll very likely need to have chosen a major related to computer studies rather than, say, a course of study in the humanities.

Recommended: 20 of the Most Popular College Majors

How Much Can You Earn with a CS Degree?

While there are many exciting reasons to pursue a computer science major, given how much money it costs to go to college, many students want to know how much they can stand to earn once they have the degree. (This is also sometimes referred to as figuring out your ROEd or return on education — most degrees in America can cost a lot, but not all of them offer great earning prospects in return!)

And the good news is that a computer science major can put you in line for some of the most lucrative and in-demand job positions out there.

According to the U.S. Bureau of Labor Statistics (BLS), computer and information research scientists earned a median of $131,490 per year in 2021.

Along with great pay, computer scientists can also look forward to great job availability; the BLS expects job prospects to grow 21% from 2021 to 2031, much faster than the average for all occupations.


💡 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

Computer science can be a great course of study for people who are interested in learning about computer programming, software development and maintenance, and really all things tech. As a computer scientist, you might code the next smash-hit video game or develop a new kind of AI… all while earning a nice salary and enjoying plenty of job opportunities.

But, of course, a computer science degree comes at a cost. According to U.S. News, the average cost of tuition and fees to attend a public college in 2022-23 was $10,423 for in-state students and $22,953 for out-of-state students. The tuition and fees for a private college was $39,723 per year. And, these numbers don’t include the cost of room and board and other expenses.

Fortunately, there are several options for parents and students who need help paying for a computer science degree. A great first step is to fill out the Free Application for Federal Student Aid (FAFSA). This form opens up opportunities for students to receive grants, scholarships, work-study positions, and federal student loans.

Another option for covering the cost of attendance for college is to take out a private student loan. These are available through banks, credit unions, and online lenders. Rates tend to be higher than federal student loans, but borrowing limits are typically higher. These loans are not need-based and generally require a credit check. Borrowers (or cosigners) with excellent credit tend to qualify for the lowest rates.

Keep in mind that private student loans may not offer the same borrower protections that federal student loans offer, such as forbearance or income-driven repayment plans.

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/DragonImages

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.

SOIS0823046

While the terms “computer science” and “computer engineering” are often used interchangeably, they are actually separate fields that focus on different aspects of computer technology. Simply put, computer science is the study of all aspects of computers with an emphasis on software systems, while computer engineering focuses more on designing and building hardware systems.

Whether you choose to major in computer science or computer engineering, some — but not all — of the coursework will be the same. However, the types of jobs you will be best-suited for will differ. Which path is best for you will depend on your skill set and career interests. Here’s what you need to know about computer science vs. computer engineering.

What Is Computer Science?

Those working in computer science focus mainly on computing theory, programming algorithms and models to develop software or computer systems that people utilize around the globe. A computer science program will typically cover topics like design and analysis of algorithms, data analysis, an introduction to operating systems, and different programming languages. Computer scientists generally focus on software and are typically the ones to create algorithms that make programs like artificial intelligence, machine learning, cloud computing, and even video games work.


💡 Quick Tip: Fund your education with a low-rate, no-fee SoFi private student loan that covers all school-certified costs.

What Is Computer Engineering?

Computer engineers generally focus on creating, testing, and evaluating the technology for hardware and software interfaces. If you choose computer engineering as your major, the program will likely cover topics like computer architecture, computer networks, and physics. It is a computer engineer’s job to develop new processors, microchips, and other components that physically go into computers and smartphones to make them work each and every time someone clicks the “on” button. This field may often require a combination of electrical engineering skills and computer science knowledge.

Similarities and Differences Between Computer Science and Computer Engineering

While computer science and computer engineering are two distinct areas of study, there are similarities between the two. Both professions, for example, involve working with computers. Both also involve data and math and work to advance the field of computing. Because of these similarities, both areas of study could share prerequisites and coursework at your chosen college or university.

Computer Science vs Computer Engineering Job Outlook

Individuals with a computer science or computer engineering degree may be qualified for a variety of different types of tech positions in a wide range of industries. Here’s a closer look.

Computer Science Job Outlook

There’s some good news for those looking at becoming computer scientists in the near future. According to the most recent data from the U.S. Bureau of Labor Statistics (BLS) , the employment of computer and information research scientists is projected to grow 21% from 2021 to 2031, much faster than the average for all occupations.

What’s more, computer and information research scientists earned a median of $131,490 per year in 2021.

The types of jobs you may be able to get with a computer science degree include: software developer, database administrator, web developer, project manager, full-stack developer, engineering manager, user interface designer, information security analyst, information technology specialist, mobile application designer or developer, and more.

Computer Engineering Job Outlook

According to the BLS, the employment rate for computer hardware engineers is projected to grow much more slowly over the same timeframe. From 2021 to 2031, the job market for computer hardware engineers is expected to grow 5%, which is as fast as average as the average occupation.

The positive? The average salary for computer hardware engineers is still comparatively high, sitting at a comfortable $128,170 per year in 2021. And while many entry level jobs in computer science require a master’s degree, entry-level computer engineering positions generally only require a bachelor’s degree, which can save both time and money.

As computer scientists, those with a computer engineering degree could qualify for roles under a variety of job titles. These include: telecommunications engineer, computer architect, communication engineer, network systems engineer, systems architect, and simply, computer engineer.

Recommended: Return on Education for Bachelor’s Degrees

Computer Science vs Computer Engineering — Which One Is Better?

The question of “which is better, computer science or computer engineering?” really comes down to personal choice. To make this decision for yourself, it may be a good idea to consider what your dream computing job looks like.

Computer scientists can typically specialize in the following areas:

•   Artificial Intelligence

•   Human-Computer Interaction

•   Software Engineering

•   Mobile and Web Computing

•   Game Design

•   Computer Graphics

•   Data Science

•   Programming languages

Computer engineers can typically specialize in the following areas:

•   Hardware systems

•   Robotics and Cybernetics

•   Computer and Network Security

•   Distributed Computing

•   Embedded Systems

As you can see, both computer science and computer engineering are related. However, each comes with unique and exciting specialty areas. Which one is better will depend on your skills, interests, and goals.

The First Step to Becoming A Computer Scientist or Computer Engineer

While computer science is expected to experience more growth in the coming years than computer engineering, both fields can lead to a varied, lengthy, and well-paid career. Both also generally require at least a four-year college degree, which can be a significant financial investment. Once you pinpoint some schools and programs that interest you, you’ll likely need to figure out how you’ll manage the financial side of getting a computer science or computer engineering degree.

Fortunately, there are a number of ways to cover your college costs. A great place to start is by filling out the Free Application for Federal Student Aid (FAFSA). This form puts you in the running for grants, scholarships, work-study positions, and federal student loans.

If financial aid and savings aren’t enough to cover the full cost of attendance (COA) for college, you might next look into getting a private student loan. Unlike federal student loans, which are provided by the government, private student loans are available through banks, credit unions, and online lenders. Rates tend to be higher than federal student loans, but borrowing limits are typically higher. These loans are not need-based and generally require a credit check. Borrowers (or cosigners) with excellent credit tend to qualify for the lowest rates.

Keep in mind that private student loans may not offer the same borrower protections that federal student loans offer, such as Public Service Loan Forgiveness or income-driven repayment plans.


💡 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

While there is some overlap between computer science and computer engineering, the terms refer to two different majors and tech specialties that lead to different types of jobs after you graduate. Computer science tends to focus on computer theory and software, whereas computer engineering is more focused on computer design and hardware.

A career in either field can be rewarding, both financially and intellectually, though job growth is expected to be higher in computer science than computer engineering over the next eight years.

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/SeventyFour

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.

SOIS0823047

It’s no secret that college can be expensive. What’s not-so-widely known is that there are a number of states that offer eligible residents free tuition for both two- and four-year degree programs.

While many of these programs only cover tuition (not room and board and other expenses), they can be a huge help if you are looking for an affordable way to get a college degree. Read on to learn more about how free college programs work, where to find them, and how to fill in any remaining financing gaps.

What Are Free College Tuition Programs?

Free college tuition programs are typically state-sponsored programs that offer free tuition to eligible students. To qualify, you typically need to be a resident of the state and, in some cases, demonstrate financial need. Some states will also award free tuition to students that come from communities that are underrepresented in college attendance​ or who are first generation college students.

Often, tuition-free programs only cover the cost of tuition, which means you may still have other expenses to cover, including fees, supplies, and room and board. However, there are some free college tuition programs that will cover school fees or provide stipends for necessary expenses like textbooks.
​​

💡 Quick Tip: You can fund your education with a low-rate, no-fee private student loan that covers all school-certified costs.

States With Free College Tuition

What follows is a roundup of states that offer free tuition to two-year, four-year, and/or certificate programs.

California Promise Program

The California College Promise Grant waives fees for nearly half of students in the California Community College system , while others only need to pay $46-per-unit fee. For example, if you’re a California resident enrolling in 12 units, you would pay $552 each semester. Students that live out of state pay more.

Indiana 21st Century Scholars Program

The 21st Century Scholars Program encourages Indiana students in the 7th and 8th grade to stay in school and keep up their grades by promising them money for college if they meet program requirements.

Oklahoma’s Promise

To qualify for the Oklahoma’s Promise scholarship program, Oklahoma students must be enrolled in the 8th, 9th, or 10th grade and their parents’ federal adjusted gross income can’t exceed $60,000 (with one or two dependent children) or $70,000 (with three or four dependent children).

New York Excelsior Scholarship

Through the Excelsior Scholarship , New York families and individuals that make up to $125,000 a year will qualify to attend college tuition-free at all CUNY and SUNY two- and four-year colleges in New York State.

Washington College Bound

In the state of Washington, students can apply to participate in the College Bound scholarship program, which gives eligible students public college tuition, or an equivalent amount for an approved private college or career school. Students must apply for financial aid and attend a participating college in Washington.

Recommended: In-State Tuition: a Look at Establishing Residency

Arkansas Future Grant

The Arkansas Future Grant covers the cost of tuition and fees for certain certificate and associate degree programs at public education institutions in Arkansas.

Delaware SEED Program

The Delaware SEED Program gives scholarships to Delawareans of all ages who would like to pursue an academic degree (including an associate or bachelor’s degree) or a workforce training certificate at Delaware Tech.

Hawai’i Promise Scholarship

The Hawai’i Promise Scholarship provides free in-state tuition to students with financial needs who attend the University of Hawai’i Community College. This program covers direct education costs including tuition, books, supplies, transportation, and school fees.

Kentucky Work Ready Kentucky Scholarship Program

The Work Ready Kentucky Scholarship Program assists Kentucky college and high school students in paying for tuition as they work towards earning an industry‐recognized certificate or diploma.

Maryland Community College Promise Scholarship

Students who are pursuing certificates, vocational certificates, or associate degrees may qualify for the Maryland Community College Promise Scholarship if all other aid options are exhausted and they are enrolled in select Maryland community college programs.

Minnesota MnSCU Two-Year Occupational Grant Pilot Program

Minnesota students may qualify for financial assistance through the MnSCU Two-Year Occupational Grant Pilot Program if enrolled in qualifying career and technical programs at MnSCU two-year college.

Missouri A+ Scholarship

Missouri students who attended A+ designated high schools may qualify for the Missouri A+ Scholarship if they attend a select public community college, vocational school, or technical school.

Montana Promise Act

Students attending a two-year institution of the Montana university system and taking select courses may qualify for the Montana Promise Act . To be eligible, students must be enrolled in a Montana community or tribal college, or other Montana university system two-year institution at least part-time.

Recommended: What Is the Cost of Attendance in College?

Nevada Promise Scholarship

The Nevada Promise Scholarship is a last-dollar scholarship that can cover up to three years of tuition and mandatory fees not covered by other forms of gift aid for Nevada high school graduates to attend community college.

The Oregon Promise Grant

Oregon students seeking assistance paying for college should consider applying for the Oregon Promise
Grant which covers the tuition costs at any Oregon community college for students who recently graduated high school or passed the GED test.

Recommended: What Are College Tuition Payment Plans and How Do They Work?

Rhode Island Promise

The Rhode Island Promise program allows recent Rhode Island high school graduates to obtain an associate degree at the Community College of Rhode Island tuition-free.

Tennessee Promise

The Tennessee Promise program is a scholarship and mentoring program for students attending any of Tennessee’s 13 community colleges, 27 colleges of applied technology, or other select eligible institutions.

Finding Ways to Pay for College

Free tuition programs may not be available to all students. In that case, paying for college may require compiling together a few different sources of financing.

Students can fill out the Free Application for Federal Student Aid (FAFSA®) each year to apply for federal aid, including scholarships, grants, federal student loans, and work-study programs.

If college students need help covering the costs of pursuing higher education and don’t receive enough financial aid to do so, they have the option of applying for private student loans. Unlike federal student loans, which are issued by the U.S. government, private loans come from private institutions, such as banks, credit unions, and online lenders.

Generally, students will want to exhaust federal student loans first, as they come with government-backed benefits such as low fixed interest rates and income-driven repayment plans that are not available with private student loans.

While private student loans can cost more than federal student loans, you can often borrow up to the total cost of attendance (including room and board), which gives you more borrowing power than you can get with the federal government.


💡 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

Some states offer free tuition programs that provide residents with resources to help cover their tuition costs. For those that qualify, these programs can provide much-needed financing to help them pursue their education goals.

Sometimes, state and federal aid isn’t enough to cover a students’ college costs. In that case, some students may explore private student loans. Though these loans may lack some of the borrower protections available for federal student loans, they can be an option for filling in funding gaps. When shopping for private student loans, it can be helpful to compare potential interest rates and fees with different lenders to find the best deal.

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/Vimvertigo

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.

SOIS0823045

College grants are a form of financial aid that can be used to pay for tuition, room and board, and related school expenses. Unlike college loans, grants do not need to be paid back, which is why they are often referred to as “free money” for college.

Grants are typically awarded based on financial need, though, in some cases, merit comes into play. Either way, getting grants can be competitive. Read on for a closer look at how grants work, including common eligibility requirements, and how to find and apply for grants.

College Grants vs Scholarships — What’s the Difference?

Scholarships and grants for college both represent “gift aid,” since the money generally does not have to be repaid. Dropping out of college or switching to part-time enrollment are a couple of exceptions that may require paying back a grant or scholarship.

The main difference between grants and scholarships is that grants tend to be based on financial need, whereas scholarships are more commonly awarded based on a student’s achievements or merit. Scholarships may also be offered to students of a specific ethnicity or group, such as Native Americans or the LGBT community.

The source of funding also tends to differ. Funds for college grants typically come from the federal and state government, whereas scholarships are usually offered through private companies, colleges and universities, non-profits, and other organizations.

Another distinction between grants vs. scholarships is the application process. To apply for grant opportunities, you generally just need to complete the Free Application for Federal Student Aid (FAFSA). To apply for scholarships, you often need to fill out a separate application (which may require writing an essay) for each scholarship.


💡 Quick Tip: Fund your education with a low-rate, no-fee SoFi private student loan that covers all school-certified costs.

Types of Federal College Grants

Federal grants for students attending community college, career schools, and four-year colleges are offered through the U.S. Department of Education. Here is a list of federal grants for college students.

Pell Grants

The Pell Grant is the Department of Education’s largest grant program. Pell Grant funding changes from year to year, and is geared towards students who demonstrate significant financial need. The maximum Pell Grant total for the 2023-2024 award year is $7,395.

The amount an eligible student receives is calculated according to enrollment status, cost of attendance, Student Aid Index (SAI) (formerly called the Expected Family Contribution, or EFC), and duration of study.

It’s worth noting that the award amount for Pell Grants is not impacted by other forms of financial aid. Often, a Pell Grant is awarded in combination with other federal financial aid, such as work-study and subsidized student loans.

Recommended: The Differences Between Grants, Scholarships, and Loans

Federal Supplemental Educational Opportunity Grant (FSEOG)

The FSEOG program is another grant for students with exceptional financial need to pay for college expenses. FSEOG awards range between $100 and $4,000 a year.

Individual grant totals are calculated by overall financial need, timing of the application, total financial aid, and funding availability within the college.

Though FSEOG is funded through the Department of Education, it is administered by participating schools — and not every college participates. Check with a college’s financial aid office to learn if FSEOG is an option for assistance.

Iraq and Afghanistan Service Grants

This program has more specific criteria than financial need alone. Students may qualify for a grant if their parent or guardian died while serving in the U.S. armed forces in Iraq or Afghanistan after 9/11. To qualify, you must have been under 24 years old or enrolled in college at least part-time at the time of your parent’s or guardian’s death.

Additional requirements for the Iraq and Afghanistan Service Grant include failing to qualify for a Pell Grant due to Expected Family Contribution/Student Aid Index but satisfying the remaining eligibility Pell Grant criteria.

Grant funding is equal to the maximum Pell Grant award for any given year. Thus, grants can be up to $7,395 for 2023-2024, depending on financial need and the cost of attendance at the applicant’s college.

TEACH Grants

The Teacher Education Assistance for College and Higher Education (TEACH) Grant program offers awards up to $4,000 per academic year for students pursuing a career in teaching.

Compared to other federal grants for college, TEACH grants carry more stringent requirements. For instance, recipients must fulfill a service obligation of teaching in a high-need subject area at a school or educational service agency for at least four academic years within eight years of completing TEACH grant-funded studies.

Otherwise, the TEACH grant is converted into a direct unsubsidized loan which must be repaid in full with interest accrued from the date of the initial award.

To qualify for a TEACH grant, students must attend a participating school and achieve high academic performance (GPA of at least 3.25 or college admissions test scores above the 75th percentile). Additionally, recipients must partake in counseling sessions and sign a TEACH Grant Agreement to Serve.

Applying for Federal College Grants

Students looking for federal grants for college can begin the process by filling out the FAFSA. The FAFSA considers factors like the student income and parental income and assets to calculate the SAI (formerly called the EFC), which is used by schools to determine how much money students are eligible to receive.

After completing the FAFSA, students will receive a financial aid package from each college they applied and have been accepted to. This includes a breakdown of any eligible financial assistance, including grants, scholarships, work-study, and federal student loans.

Take note that students need to fill out the FAFSA every year they’re enrolled in college to be eligible for grant awards and other financial assistance.

Since some grants are awarded on a first-come-first-served basis, be sure to pay attention to FAFSA deadlines, and submit the form as early as possible.

Other College Grants for Students

In addition to federal grant programs, there are opportunities to get free money for college from state governments, nonprofits, and private organizations.

State Grants

There are state-level grants for students to consider too. For example, there are numerous California scholarship and grant opportunities to help students pay for school. Every year, the Cal Grant provides 41,000 awards to undergraduate, vocational, and teacher certification students.

Filling out and submitting the FAFSA may automatically make you eligible for certain state grants. In some cases, though, you might also have to apply to your state’s education department.

To find funding in any given state, you can use the National Association of Student Financial Aid Administrators online database .

Keep in mind that some state government scholarship and grant programs have different deadlines than FAFSA.

College Grants for Women

There are a variety of college grants geared specifically to women. Here are a couple grant programs women can apply to for college and graduate school.

•   Program for Continuing Education Grant : The Philanthropic Education Organization offers one-time need-based grants for women in the U.S. and Canada to put towards college and education-related expenses.

•   Career Development Grant : The American Association of University Women provides grants between $2,000 to $12,000 to female students pursuing an advanced degree or certificate.

Finding Additional Grants

In addition to state and federal grants or grants, private companies and nonprofits may also offer grants. Students may have to do a little leg work to find these opportunities, but a chance at free money for college can be worth a little time invested up front. Online databases like Scholarships.com have a variety of grant opportunities for students to peruse.


💡 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. You can submit it as early as Oct. 1.

The Takeaway

College grants are a helpful way for eligible students to pay for school and reduce student debt. In 2022-2023, scholarships and grants were used by 76% of families and covered 29% of costs.

Even so, many students require additional financing to pay for college. If grants, other aid, and federal student loans are enough to cover the cost of your college education, you may want to consider applying for a private student loan. These are available through private lenders, including banks, credit unions, and online lenders. Loan limits vary by lender, but you can often get up to the total cost of attendance, which is more than you can borrow from the federal government. Interest rates may be fixed or variable and are set by the lender. Generally, borrowers (or cosigners) who have strong credit 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.

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/Deejpilot

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.

SOIS0823042

If you’re looking at your chipping laminate countertops, you’re probably wondering what it would take to replace them — and maybe your whole kitchen, for that matter. That leads to the big money question: How are you going to pay for home improvements?

One option is to cash out the equity you have in your home in order to fund improvements on it, by doing a cash-out refinance. A cash-out refinance replaces your current mortgage with a new one and refunds you the difference in cash. You can use the cash however you would like.

However, it’s not your only option, and not every situation is the same. You’ll need to consider what it means to refinance for home improvements and whether or not it’s right for you.

How Cash-Out Refinancing for Home Improvement Works

When you cash out equity for home improvements, you can get a new mortgage and have some equity refunded to you in the form of cash. It’s best to look at how cash-out refinancing works with an example.

Let’s say you own a home worth $800,000 and your current mortgage amount is $500,000. Lenders allow a refinance of around 80% of the home’s value, so 80% of $800,000 is $640,000. $640,000 is the maximum amount that the lender will loan.

Let’s suppose you qualify for that loan. Next, the lender will pay off your original mortgage of $500,000. After you subtract $500,000 from $640,000, you’ll have $140,000 left. You’ll receive $140,000 in cash after you close on the loan (minus the closing costs on the loan). Your new loan amount will be $640,000.

If you want to take a closer look at how much money you would want to have on hand for a renovation, you can use a home improvement cost calculator to form an estimate of potential expenses.

What Can You Use the Cash For?

According to Fannie Mae guidelines, which are the regulations mortgage lenders follow for conforming loan types, you can use the cash from a cash-out refinance for anything. That includes whatever home improvement dreams you have — a pool, new kitchen, she-shed, pickleball court — so dream big!

Pros and Cons of a Cash-Out Refinance for Home Improvements

Benefits

Cash-out refinancing for home improvement has some benefits to consider.

•   A better loan. When you apply for a cash-out refinance loan, your loan terms will change with the new mortgage. It’s not guaranteed, but you could end up with a lower interest rate than the one you had on your previous mortgage. Depending on the scenario, it is possible that a refinance could lower the payment for the borrower while accessing cash and shortening the term.

•   Increased property value. When you refinance for home improvements, the renovations could increase your property value. New flooring or an updated kitchen could increase the value of your home by more than the amount of money you pour into the project.

•   One payment. With a cash-out refinance, there’s one payment for both your mortgage and the cash you take out for home improvement projects. It’s convenient and usually offers a lower monthly payment than other financing methods.

•   Lower interest rates than other types of loans. A mortgage has a lower interest rate than other loan types, such as credit cards or personal loans, which can reach an APR of 30%. Just keep in mind that financing over another 15- or 30-year term could add a significant amount of interest to your loan, so be judicious in how much debt you add to your home.

Drawbacks

As with any financing option, there are some drawbacks you’ll want to consider before refinancing for home improvement with a cash-out refi.

•   Loan terms may change. If you have very favorable loan terms on your original mortgage, you won’t necessarily get those same ones when you refinance. If interest rates have risen since your original closing, the mortgage refinancing cost could make your new mortgage more expensive than an old one.

•   What you can borrow depends on equity. You need a substantial amount of equity to be able to do a cash-out refinance. Your lender may only want to lend on 80% of the home’s current market value. That means you’ll need to have an original mortgage amount even further beneath that amount to be able to cash out equity for home improvements.

•   Closing costs. With a new mortgage come new closing costs, which are never fun to pay. There are usually fewer closing costs to pay with a refinance, but it’s still a cost you need to consider.

•   Long-term costs. Increasing the amount of your mortgage over a long period brings large interest costs. Take a look at an amortization table or mortgage calculator so you know exactly what the total cost of your mortgage will now be.

Requirements for a Cash-Out Refinance

To qualify for a cash-out refinance, you’ll need to qualify for a mortgage again. A lender will look at your credit score, debt-to-income ratio, as well as the amount of equity you have in your home.

Credit Score Minimum

When you’re looking to qualify for a mortgage, you want your credit score as high as possible so you can qualify for the best available mortgage rates. For the best rates, aim for a credit score of 740 or above. A credit score of 620 is needed for most home loan types, though you may be able to get a home with a credit score around 500, depending on the type of mortgage or program available in your area.

Home Equity Requirements

The amount of your new mortgage will retain around 20% equity before refunding cash (sometimes less, depending on the lender or the program). If your home is worth $500,000, that means they’ll likely be willing to lend up to $400,000 on the home. If your current mortgage sits at $300,000, the most cash you would be able to access with a cash-out refinance is $100,000.

Debt-to-Income Ratio (DTI)

A debt-to-income (DTI) ratio is the total sum of your debts divided by your income. Generally, lenders look for a DTI ratio at 43% or lower. There are exceptions, so be sure to consult with your lender.

Cash-Out Refinance vs Home Equity Line of Credit (HELOC)

Another way to pay for home improvements is with a home equity line of credit (more commonly referred to as a HELOC). A HELOC is a second mortgage loan that uses the equity in your home as collateral. It acts like a line of credit and you only borrow what you need. It’s flexible and easy to use.

It makes sense to use a HELOC instead of a cash-out refinance in a few scenarios:

•   When the interest rate on your current mortgage is very low. Changing your current mortgage to a higher-interest mortgage with a cash-out refinance would be very expensive. Paradoxically, a HELOC or personal loan will have an even higher interest rate than what you can get on a primary mortgage, but because you’re paying the HELOC or personal loan off sooner, you will spend far less in interest.

•   You can make a larger HELOC payment. A HELOC usually won’t take 30 years to pay off. On a HELOC that is paid off sooner, the monthly payment amount will be higher, but if the numbers make sense (meaning, you’re able to access enough money for your home improvements from a HELOC at a competitive interest rate and you can cover the payments), then you probably want to go with a HELOC instead of a cash-out refinance.

•   You’re not sure how much you need. With a HELOC, you apply for a credit line and are approved up to a limit, kind of like a credit card. You only take out what you need, which is convenient when you’re planning a project and are not sure exactly how much it will cost.

The Takeaway

Cashing out the equity for home improvements can be an affordable way to update, repair, or improve your home — but only if the circumstances are right. While a lump sum of cash can be a great way to pay for home improvements, be sure to factor in all the costs before you choose this method. There are other financing tools available to you if this one is too costly.

Turn your home equity into cash with a cash-out refi. Pay down high-interest debt, or increase your home’s value with a remodel. Get your rate in a matter of minutes, without affecting your credit score.*

FAQ

Can I use a cash-out refinance for ongoing or future home improvement projects?

The cash you get from refinancing your home can be used for any purpose.

How long does the process typically take for a cash-out refinance for home improvements?

The cash-out refinance process averages 30 to 45 days regardless of what purpose the excess funds will be used for.

Can I use a cash-out refinance to fund home improvements on an investment property?

Yes, however the requirements for a cash-out refinance on an investment property may be different from those on your personal residence, so it’s best to consult with a mortgage lender.

Are there any restrictions on how I can use the funds from a cash-out refinance for home improvements?

No, there are no restrictions on how to use funds from a cash-out refinance. You can pay for whatever home improvements you would like. There are restrictions, however, on whether or not you can deduct the interest you pay on the loan on your taxes. Ask your tax preparer for guidance.

Can I apply for a cash-out refinance for home improvements if I have a second mortgage or existing liens on my property?

Yes, but the second mortgage and other liens will likely need to be paid for a lender to issue a new mortgage for a cash-out refinance. There are some exceptions, so it’s best to consult with your mortgage professional on this one.

Photo credit: iStock/Kerkez

*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.

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 Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

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.

SOHL0723001