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College study abroad programs offer students an extraordinary chance to explore a new part of the world while earning credit toward a degree. Each year, more than 300,000 American students study, engage in internships, or volunteer abroad for academic credits, according to the U.S. Department of State.

Despite the culturally rich and memorable experience this offers, the cost of studying abroad can be a barrier to many students. On average, study abroad programs cost between $15,000 and $22,000 per semester.

Read on to learn more about the costs involved in spending a semester or year abroad, how financial aid can help, plus other ways to make studying abroad more affordable.

Average Cost of Study Abroad Programs

The cost of studying abroad depends on two main factors — where you go and whether you enroll directly through your host university or use a third-party provider.

Generally, enrolling in a third-party study abroad program is more expensive. It provides you with more hand-holding and guidance in the pre-planning stages and while you’re living and studying overseas.

Average study abroad costs through a third-party provider can range anywhere from $15,000 to $22,000 per semester depending on location. These programs usually include housing and sometimes meals. Depending on the country, the cost of tuition could be significantly lower if you directly enroll in a foreign university.

If your home school has its own study abroad program, the tuition may be the same as it is stateside, though they may tack on some extra fees.

The cost of studying abroad goes beyond tuition, however. You will need to budget for other expenses like housing (if it’s not included), meals, airfare, transportation, entertainment, and books and supplies.

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

What the Cost to Study Abroad Covers

Here’s a breakdown of some of the key costs involved in studying abroad.

Getting There

You’ll need a round-trip plane ticket to get to and from your study abroad program, which can cost anywhere from several hundreds to thousands of dollars, depending on what part of the world you travel to. On top of your flight costs, you’ll need a passport. A new U.S. passport costs $165 and can take up to 10 weeks to process.

Many countries also require American students to get a travel visa in advance when visiting the country for studies. Costs vary widely by country. A student visa from Australia costs around $1,085, while one from South Africa runs about $36. Some countries, like Germany, don’t require U.S. visitors to get a student visa for studying abroad.

Recommended: 11 Ways to Make College More Affordable

Tuition and Living Costs

Typically, the price of a study abroad program will include tuition and fees at your host school, as well as some form of housing. If you directly enroll in a foreign university, you may need to pay tuition and housing separately. Either way, food is generally an additional expense.

Here are some examples of how much it can cost to study and live abroad:

In you go to Italy:

•   Average cost of a semester (including housing) through a third-party provider: $17,000-$21,300

•   Average cost of a semester (without housing) through direct enrollment: $1,500-$6,000

•   Average monthly cost of living (including rent): $1,200-$1,700

If you go to Costa Rica:

•   Average cost of a semester (without housing) through direct enrollment: $1,500-$3,000

•   Average cost of a semester (including housing) through a third-party provider: $8,500-$11,500

•   Average monthly cost of living (including rent): $1,100-$1,400

Recommended: How to Budget as a College Student

Local Transportation

Transportation expenses likely aren’t covered in the cost of your program. You might decide to take public transportation and purchase a metro pass, or rely on rideshare services. Either way, you’ll likely encounter some form of transportation cost while you’re abroad.

You may also want to take excursions to other cities or countries during time away. So it’s a good idea to factor in some extra funds for airfare/train tickets, food, and lodging for nearby travel. Keep in mind that financial aid won’t cover voluntary travel expenses beyond the cost of your initial round-trip flight.

Recommended: What to Do When Financial Aid Isn’t Enough

Insurance

Many U.S. universities require students studying abroad to enroll in a health insurance plan to make sure they have adequate coverage for medical issues and emergencies while overseas. At the University of Illinois, for example, students are charged $712 for student health insurance. If your current insurance offers adequate overseas coverage, however, you may be able to opt out of the school’s health insurance plan. Third-party study abroad programs may include overseas health insurance coverage in their fees.

Other Fees

Third-party programs will typically charge a study abroad application fee, which may be $95-$150. Your home school may charge you a study abroad administrative fee. At the University of Iowa, for example, it runs around $1,213 for one semester abroad (for in-state students). You can check with your school’s education abroad office to see how much you might be charged.

In addition, the study abroad program you choose may come with optional costs, like class field trips, short excursions, or cooking classes with a local chef.

How to Pay for Study Abroad

If you’re worried about the high cost of studying abroad, there is good news: Much of your existing financial aid can likely be used for study abroad costs. Here’s a look at how to find funding for study abroad.

Grants and Scholarships

To find out what financial aid you qualify for, you’ll want to fill out the Free Application for Federal Student Aid (FAFSA®). In addition to FAFSA-based scholarships and grants, there are many scholarships targeted specifically at students studying abroad, which you can uncover using a scholarship search engine. Third-party companies that facilitate study abroad programs also often have their own scholarships.

💡 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.

Federal Student Loans

Federal student loans (which may be subsidized or unsubsidized) can be used to pay for study abroad expenses, provided your home U.S. university participates in federal student aid programs and your study abroad program is approved by your school.

Federal study abroad loans for U.S. students can be used to pay tuition and fees, room and board, and other eligible expenses. Any leftover funds are disbursed to you, which you could use for travel to your destination country or basic living expenses. However, federal loans may not cover all the costs of studying overseas.

Private Student Loans

If you max out the amount you can borrow in federal loans, you can turn to private student loans to finance the remaining costs. Approval for private student loans typically hinges on your credit history. You may need a cosigner for approval if you haven’t established a credit history or your credit score is lower than the minimum score the lender requires.

Private student loans offer more borrowing power than you can get with the U.S. government, but don’t offer the same protections (like income-based repayment). Rates are also typically higher.

The Takeaway

Spending a summer, semester, or full year abroad can significantly enhance your college experience. But it can also substantially increase the cost, coming in at upwards of $15,000 per semester. Fortunately, there are funding options available to help students manage the cost of study abroad, including scholarships, grants, and 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.

FAQ

What’s the cheapest country to study abroad in?

While specific costs can vary, countries like Germany, Sweden, and Iceland are often cited as more affordable options for studying abroad, especially if you plan to enroll directly in a foreign university rather than through a third-party provider. Many of these countries boast free tuition. However, factors like the local cost of living and visa requirements all play a role in determining the overall affordability.

Does FAFSA cover study abroad?

Yes. If you qualify for student aid through the Free Application for Federal Student Aid (FAFSA®), your awarded aid funds can typically be used toward study abroad costs. If you apply to an overseas school directly, however, the school must participate in federal aid programs. Also keep in mind that your FAFSA aid might not cover the entire cost of studying in another country.

Is a year too long to study abroad?

The ideal length for studying abroad varies depending on individual goals and preferences. Some students find a summer or a single semester abroad is perfect for gaining cultural immersion and academic credit. Others prefer a full academic year to more deeply integrate into the local culture and language. Consider your academic requirements, financial resources, and personal comfort level when deciding on how long to study abroad.

Photo credit: iStock/wsfurlan

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

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

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

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

SOISL-Q425-035

Going to college is a costly proposition. On top of tuition and fees, you’ll also need to come up with funds for food, housing, and other living expenses. It can be helpful to develop a rough estimate of what expenses you can expect in college well before you head off to campus and come with a monthly student budget.

The question is, how much money do college students spend per month?

The answer will depend on several factors, including location, extracurricular activities, whether you’re commuting or living on campus, and lifestyle preferences. According to the College Board, students can expect to spend around $3,016 a month (or $27,140 for a nine-month period) on living expenses for the 2025-26 school year.

To break that number down, let’s take a closer look at how much college students spend on food, housing, and other expenses.

Financial Considerations for College Students

The first step towards creating a college student monthly budget is to complete the Free Application for Federal Student Aid (FAFSA®). This will give you access to federal financial aid, including grants, scholarships, work-study, and federal student loans. Colleges may also use the FAFSA when allocating their own scholarships and grant awards to students.

Financial aid is intended to be used for college-related expenses, such as tuition and fees, textbooks and supplies, and room and board. However, it may not fully cover the cost of attending college. To cover any gaps in funding, you may need to tap multiple sources of money, such as savings, summer jobs, and taking out private student loans.

To help students figure out exactly how much money they’ll need for college, schools typically post the average cost of attendance on their websites. These listings will usually include the average cost of housing, food, books/supplies, transportation, and personal expenses for students attending that school.

What Do College Students Spend Money On?

Budgeting in college will look different for every student. Some college costs will get paid up front (like tuition, fees and, in some cases, room and board), while other expenses will need to be paid on a monthly or daily basis. To estimate how much spending money you’ll need, let’s take a closer look at what college students spend money on each month, and how much they typically spend in each category.

Food

Food eats up about 30% of a college student’s monthly budget, according to the College Board. To build out a college student food budget, you’ll need to consider whether you’ll be on the school’s food plan, if you’ll do some cooking, and how often you’ll likely eat out.

On average, college students spend $672 on food per month, according to the Education Data Initiative. To break that total down further, students spend, on average, $410 a month eating off-campus and about $263 a month on groceries for cooking meals at home.

College students can choose to pay for a meal plan that provides an allotted number of meals from campus dining halls or restaurants. (Freshmen are often required to purchase a meal plan). Meal plans have the benefit of being a fixed and predictable cost. The average meal plan costs $570 a month.

Housing

How much do college students spend per month on housing? Monthly housing costs will vary depending on location and whether a student lives on or off campus.

According to the College Board’s 2024 Trends in College Pricing Report, average room and board ranged from $10,390 at public two-year institutions to $15,250 at private four-year institutions for the 2024-2025 academic year. Note that room and board includes both housing and food costs, so let’s unpack the housing portion further.

The cost of living in a dorm or residence hall usually varies based on the occupancy per bedroom and number of people in a suite or apartment. You can expect to pay more for a single bedroom than a double or triple that you’ll share with other students. For example, the cost of a single occupancy room at UCLA is $16,504 for the 2025-2026 academic year; living in a double or triple cost $12,498 and $9,254, respectively.

How much students spend on off-campus housing is influenced by the cost of living by state and city, and whether they’ll live alone or with roommates. The average monthly housing rental costs in California range from $1,599 (for a studio) to $2,304 (for a three- bedroom apartment) per month, while the average cost for Pennsylvania is between $988 (for a studio) and $1,352 (for a three-bedroom apartment) per month.

Transportation

From getting to class to traveling home for holidays and breaks, students need to factor transportation costs into their monthly budget. How much should college students spend a month on transportation?

If you’ll be living on campus, you likely won’t need to spend a lot, since classes may be within walking distance and colleges typically provide some form of transit services, like shuttle buses, to connect academic buildings. Students living off campus may require a car to get to class, which can significantly add to transportation costs. Filling up at the pump alone can cost $130 to $200 a month for the average driver in the U.S.

Transportation costs will also vary by where you go to school — and how far away it is from home. At the University of North Carolina at Chapel Hill, for example, students (including those living on and off campus) spend an average of $1,050 per academic year on transportation. At the University of Texas at Austin, student transportation costs run $1,786 per academic year on average.

Recommended: The Financial Benefits of Community College

Miscellaneous

Your monthly college expenses will likely go beyond the big categories, like food, housing, and transportation. Some possible miscellaneous costs you may want to include in your college budget:

•   Entertainment (e.g, going to the movies, concert tickets)

•   Cell phone plan

•   Cable/internet

•   Prescriptions/medical expenses

•   Clothing

•   Gym membership

•   Hobbies

•   Personal grooming

•   Gifts for friends/family

•   Travel for fun (such as weekend/spring break trips with friends)

To keep your miscellaneous and personal costs from getting too high, you’ll want to keep an eye out for student discounts and take advantage of free activities offered through your college.

Is College Worth It?

There are many reasons to go to college — exploring career paths, growing your social network, having fun, and learning life skills — but the return on investment (ROI) is a key consideration when comparing schools and programs. To determine your ROI, you’ll need to look at the cost of going to college and its impact on your potential future earnings.

For the 2025-2026 academic year, the average cost of tuition and fees for a public four-year college was $11,371 as an in-state student and $25,415 for out-of-state students. Meanwhile, the average sticker price for attending a private four-year college was $44,961.

When you multiply annual college costs by four years, the final tally is no small sum. And while graduates with bachelor’s degrees typically earn more than those without, you likely won’t recoup your investment right away. So is college worth it?

According to an April 2025 analysis by the Federal Reserve Bank of New York, the ROI of a college education was 12.5% in 2024, which more than meets the definition of a sound investment. In recent years, the median college graduate earned about $80,000, compared to $47,000 for the median worker with only a high school diploma, a difference of $33,000. Over a person’s entire working life (which may be 40-plus years), that premium adds up to a benefit well in excess of the cost of college.

In short, college may well be worth it.

Pros and Cons of Going to College Online

Online college and virtual learning opportunities have become increasingly common. On a per credit basis, online college tuition isn’t always cheaper. However, a virtual college student’s monthly budget often has lower expenses for room and board than students who live on or close to campus.

Here’s a look at some potential advantages and drawbacks to going to college online.

Pros

•   Flexible schedule: Classes are often designed to accommodate students with work or family responsibilities.

•   Convenience: Students can learn from anywhere — no commuting or relocating required.

•   Lower living expenses: When attending college virtually, you can live anywhere (even at home), which can save money on housing.

Cons

•   Fewer majors available: Degree programs and majors that require hands-on learning like lab exercises are unlikely to be offered online.

•   Limited networking: Virtual students have less opportunities to engage with professors and classmates.

•   Increased screen time: A greater reliance on technology for lectures and coursework can mean a lot of time spent in front of a computer.

How Can I Increase My Chances of Getting a Job After College?

You can increase your chances of getting a great job after college by preparing for the job hunt well before graduation.

One key strategy is to complete a college internship either during the semester or over the summer. This can provide valuable work experience while allowing you to try out different careers and job sectors. Internships are typically part-time commitments during the academic year and may be full-time during summer break. Some internships are paid, while others count as college credit. Applying and interviewing for an internship is also an opportunity to hone your interview skills before entering the post-grad job market.

You can also better your chances of getting a good job after college by taking advantage of on-campus resources. College career services offices can often provide job leads, networking opportunities with alumni and employers, and assistance preparing for interviews. It’s also a good idea to ask a professor for a letter of recommendation — a common requirement for job applications — while still enrolled in school.

The Takeaway

A college student’s monthly budget will depend on multiple factors, including geographic location, whether they live on or off campus, the type of institution, and personal habits. After tuition and fees, housing and food often represent the largest budget categories for college students. Covering the cost of college often involves tapping a mix of funding sources, including scholarships, grants, savings, and 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.

FAQ

What is the 50/30/20 rule in college?

The 50/30/20 rule is a budgeting guideline that suggests allocating 50% of your income to needs (like housing and food), 30% to wants (like entertainment and dining out), and 20% to savings and debt repayment. For college students, this rule can be a helpful framework, though the percentages may need to be adjusted based on circumstances, such as whether tuition and housing are already covered by financial aid or family contributions.

Is $500 a month enough for a college student?

It depends on what costs are already covered. On average, college students spend $3,016 per month on living expenses, including housing, food, and other personal costs. If housing is already covered, $500 may be enough to cover food (off a meal plan), but you may be limited in how often you can eat out.

Is it possible to make $2,000 a month in college?

Making $2,000 a month in college is possible, but it depends on several factors like the availability of part-time jobs, internship opportunities, and the student’s course load. Many students balance their studies with part-time work or paid internships to cover expenses. The average income for a college student working part-time can vary significantly by location and the type of work.

What is a realistic grocery budget for a college student?

On average, college students spend about $263 a month on groceries for cooking meals at home. However, this can vary based on individual dietary habits, whether they have any type of meal plan, and the cost of groceries in their location.

Photo credit: iStock/martin-dm

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

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

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

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

SOISL-Q425-034

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

What Is a Credit Hour?

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

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

One Credit Hour Is Equal to How Many Hours?

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

Impact of Credit Hours on Tuition and Financial Aid

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

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

How Many Hours of Study Time per Credit Hour Online?

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

Recommended: Do College Credits Expire?

How Many Credit Hours Does a Course Have?

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

Credit Hour Calculator

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

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

How Many Credit Hours Do You Need to Graduate?

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

Bachelor’s Degree Credit Hours

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

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

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

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

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

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

Master’s Degree Credit Hours

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

How Do Semester Credit Hours Influence GPA?

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

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

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

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

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

What Is the Cost per Credit Hour?

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

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

The Takeaway

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

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

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

FAQ

How many hours is one credit hour?

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

What does three credit hours mean?

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

How many credit hours do you need?

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

Photo credit: iStock/asbe

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

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

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

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

SOISL-Q425-026

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

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

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

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

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

What Is a Federal Direct Unsubsidized Loan?

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

Subsidized Federal Student Loans

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

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

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

Unsubsidized Federal Student Loans

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

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

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

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

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

How Do You Apply for a Federal Direct Unsubsidized Loan?

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

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

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

Who Qualifies for Federal Direct Unsubsidized Loans?

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

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

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

Pros and Cons of a Federal Unsubsidized Direct Loan

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

Pros

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

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

•   The loan limit is higher than on subsidized loans.

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

Cons

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

•   There are limits on the loan amounts.

Recommended: Should I Refinance My Federal Loans?

The Takeaway

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

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

FAQ

How does a Federal Direct Unsubsidized Loan work?

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

Is it good to accept a Federal Direct Unsubsidized Loan?

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

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

What are the disadvantages of an unsubsidized loan?

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

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

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

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

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

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