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Whether you’ve just moved into a new home or want to breathe new life into your current one, refacing cabinets in your kitchen could really transform the space.

Cabinet refacing involves changing the cabinet exterior surfaces only, and can cost significantly less than a full cabinet replacement. How much will it set you back? The cost to reface kitchen or bathroom cabinets ranges from roughly $4,000 to $10,000, with the national average coming in at around $7,000.

Read on to learn what factors affect refacing costs, how to keep a cabinet makeover project within your budget, and how to get started.

Average Cost of Cabinet Refacing

Cabinet refacing allows you to give your kitchen a refresh at a significantly lower price tag than a full kitchen remodel. The exact cost will depend on the materials you choose, the size of the room, labor costs, and where you live. However, the cost typically runs between $4,273 and $10,056, or an average of $7,158.

If you have a small kitchen, DIY the project, and choose budget-friendly materials, you could spend a lot less than the average cabinet refacing cost. On the other hand, if you have a large kitchen, hire a contractor, and go with top-of-the-line materials, you could spend significantly more.

Recommended: 20 Small Kitchen Remodel Ideas & Designs

Cabinet Makeover Costs by Budget

The good news is that you can give your cabinets a refresh on virtually any budget. Here’s a look at what you can accomplish at different price points.

Budget: Under $1,000
If you’re looking to spend less than $1,000, you can likely reface the cabinets in a small kitchen yourself using laminate veneers. However, you may need to keep the original hardware.

Budget: $1,000 to $5,000
With more wiggle room in your budget, you may be able to hire a contractor to reface your cabinets using laminate or wood veneer, and also replace the hardware. However, you may not be able to add accessories like a built-in wine rack or under-cabinet lighting.

Budget: $5,000 to $10,000
With this budget, you can likely hire a contractor to install high-end wood veneer and hardware, plus add cabinet accessories, even for a large kitchen. With a smaller space, you may be able to reface your cabinets with solid wood.

Budget: $10,000 to $15,000
If you can spend $10,000-plus on the project, you should be able to hire a contractor to install new solid wood doors and drawer fronts, choose luxurious hardware, and add fancy accessories. You might also be able to add a couple of custom cabinets to match your newly upgraded cabinets.

Recommended: 9 Ways to Keep Inflation From Ruining Your Kitchen Reno Budget

Reasons to Reface

Refacing old cabinets can give your kitchen an updated look for 30% to 50% less than a full cabinet replacement. This makes it an appealing option for homeowners looking to do a kitchen renovation on a budget. What’s more, there are a wide range of resurfacing options to choose from, so you can likely find a look that fits your kitchen design vision. The process is also faster and more environmentally friendly than a remodel.

Keep in mind, however, that refacing might not be the best option if the existing cabinets are damaged or you need a better kitchen layout. While refacing can make your kitchen look and feel brand new, it won’t change its layout or functionality.

Standard Options for Refacing

When you reface cabinets, there are four common types of finishes you can choose from. Here’s a look at each option.

Plastic Laminates

You can also reface cabinets with plastic laminate. The laminate is cut to size and applied to the cabinet boxes and doors using a special adhesive. This is one of most budget-friendly refacing options, ringing in between $1,000 and $3,000. However, plastic laminate is not as resistant to chipping and cracking as other refacing materials.

Wood Veneer

Wood veneers give you the look of wood cabinets without the high cost. They come in thin sheets designed to mimic standard species of wood, such as oak, cherry, maple, and ash, and run between $2,500 and $6,000. While wood veneer is stronger than laminate, it’s not as durable as real wood.

Rigid Thermofoil (RTF)

Rigid thermofoil laminate is another budget-friendly refacing choice. It’s made of plastic (Formica or melamine) but looks like wood and requires little care. Just keep in mind that the melamine version of RTF is not recommended for hot or humid environments. Refacing with RTS can run roughly $1,000 to $3,000.

Solid Wood

Solid wood refacing material is the priciest option but also the longest-lasting and easiest to repair. A solid wood refacing project can run anywhere from $5,000 to $10,000. However, the cabinets will look high-end and the doors and drawers will be extremely durable.

Other Factors that Affect the Cost of Refacing

When coming up with your budget for a cabinet makeover, there are some other costs and upgrades you may want to factor in. Here’s a look at add-ons that can level up your kitchen refresh.

•   Hardware replacements Replacing all the hardware on your cabinets can cost anywhere from $100 and $1,000, depending on the material and style.

•   Crown molding Depending on the materials used and the labor involved, installing crown molding can run around $700 to $2,100.

•   Under-cabinet lighting Having strip, built-in, or puck lights installed under your cabinets can run $200 to $300 per light. If your budget is tight, you can get peel-and-stick lights for as little as $20 to $30.

•   Glass If you want to add glass inserts to some, or all, of your kitchen cabinets, plan on spending an extra $100 to $300 per linear foot of glass you add.

•   Handy accessories If you’re interested in adding some extras, such as a built-in spice rack, built-in wine rack, pull-out trash can, or a lazy Susan, you’ll need to add some additional funds to your refacing budget.

Getting Started

If you are ready to move forward with refacing, it can be a good idea to shop around and get estimates from at least three contractors.

As you interview potential installers, be sure to ask about their experience with cabinet refacing and if they’re insured and licensed. You may also want to ask the following questions:

•   What kind of refacing material do you recommend for this area?

•   How long will this project take?

•   Can I use my cabinets as soon as you’re done?

•   How long will the refacing last?

•   Do you make any changes to the interior of the cabinets?

•   Does the estimate include handles and drawer pulls?

•   Will you remove the doors and drawers to work on them at your shop or do all the work at my home?

•   Can you use hardware that I’ve already purchased?

•   Can you add features like crown molding, under-the-cabinet lighting, or glass inserts?

•   Do you offer a warranty, and if so, what does it include?

Recommended: 10 Steps for the Perfect Bathroom Remodel

Financing Your Home Improvement

While a cabinet makeover can give your kitchen a face-lift for an affordable price, you’ll still need to come up with a significant sum of cash to cover the cost of materials and labor. If you’re eager to get going but don’t have enough money on hand, you may be able to finance the project using a home improvement loan.

A home improvement loan is essentially a personal loan designed to be used to pay for home upgrades and renovations. Available through banks, online lenders, and credit unions, these loans are typically unsecured (meaning your home isn’t used as collateral to secure the loan). You also don’t need to have any equity built up in your home to be approved. Instead, the lender decides how much to lend to you and at what rate based on your financial credentials, such as your credit score, income, and how much other debt you have.

Once approved, you receive a lump sum of cash up front you can then use to cover the cost of refacing your cabinets. You repay the loan (plus interest) in regular installments over the term of the loan, which can range from five to seven years.

If you think a personal loan might work well for your cabinet makeover project, SoFi could help. SoFi’s home improvement loans offer competitive, fixed rates and a variety of terms. Checking your rate won’t affect your credit score, and it takes just one minute.

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.

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.

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

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It’s hard to argue against the value of a good internship and how it can prepare a student for life after college.

A few weeks or months spent working in the real world can help build connections and confidence, further develop skills learned in class, and—perhaps most critically—bolster a new graduate’s chances of getting a job. An internship also can help students decide if they’ve chosen the right major and want to continue on the career path they’re on.

That may explain why many universities are pushing for more academic internships and are requiring them for an increasing number of degree programs. Not just for doctors, dentists, accountants, and teachers, but for those seeking careers in sports or hospitality management, communications, technology, and the arts.

Internship Stats

According to internship research conducted by Zippia, students who interned during college are 35% more likely to receive at least one job offer after graduation than those that didn’t intern. And a whopping 70% of interns receive a job offer from the company they interned at.

If there’s a specific company or industry you have your heart set on, interning can be a fantastic way to get your foot in the door and hopefully receive a job offer down the line.

The Cost of College Credit Internships

Close to 40% of all internships are unpaid. Which means that often, the students who take those internships are forgoing full-time, part-time, or seasonal employment to take an internship that doesn’t come with a paycheck.

Instead, that unpaid internship could add to their debt, especially if they have to relocate temporarily (maybe to a larger city or even overseas), buy a car, pay for gas or some other form of transportation, put together a work wardrobe, and pay for food.

Some students who take internships—paid or unpaid—can choose to or are obligated to enroll for course credit. Depending on how many credit hours their internship entails (the average is three but it could be more), they could end up paying hundreds of dollars in tuition.

Of the internships that are unpaid, most are in nonprofit or government sectors. Nearly all paid internship positions are with private and for-profit companies.

Advocacy groups are pushing for more paid internships, especially because low-income students often cannot afford to take on unpaid work, creating barriers to equal opportunity. To combat these barriers, the White House Internship Program started paying their interns for the first time in history in fall 2022.

Interns want to and are supposed to be doing relevant work, not making copies, fetching coffee, and running other errands that paid employees would be doing if the interns weren’t there.

How Much Do Paid Internships Pay?

Paid interns aren’t getting rich, but they are at least making minimum wage. For interns that are getting paid, the average hourly rate is $15.03, according to Zippia. Those wages help pay some expenses, but not all—making an internship an opportunity many students and their parents simply can’t afford or they must struggle to pay for.

If you’re thinking, “Well, that’s what student loans are for,” you’re technically correct. Student loan are meant to cover educational expenses, so you can use the money from the government and (possibly) private student loans to pay for the expenses that go along with your academic internship just as you would if you were in a class at school. That could include room and board, travel costs if you have to relocate, transportation, and equipment you need for the internship.

Of course, the debt you take on to get that internship experience could come back to haunt you when you’re out of school and those loans come due. So it’s important to weigh the costs of the internship against its benefits.

Particularly if it’s an unpaid internship, or if you’re required to complete an internship for college credit, you might consider doing some research to find companies that are known for offering applicable career skills and have a positive impact on your resume.

Ask your internship coordinator what tangible benefits you could see—is the internship approved for college credit? Will you get meaningful references? Will there be consequential networking opportunities?

Will the company offer you more than a form letter as a reference? How will this internship help you stand out from others hoping to get similar employment?

Before you commit, you also may want to create a financial plan, starting with figuring out where you’ll live and then working through your budget from there. And you might want to consider asking whether taking a side gig outside your internship is feasible and ok with the company.

Paying Back the Money You Owe

Before you graduate, you may want to begin educating yourself about the best student loan payback options for your situation (depending on what types of student loans you have), look at interest rates, and think about whether you would be interested in consolidating or refinancing your loans.

If you can’t find a better interest rate than you already have on your federal loans, you might want to leave things as they are. Federal student loans offer protections and benefits that won’t transfer to a private loan if you refinance. But you may find you can get a lower rate by refinancing with a private lender, which also could allow you to combine your loans into one manageable payment.

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

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

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A lot of basic “adulting” involves a credit score. Renting an apartment? The landlord will want a credit score. Financing a car? Lenders need to see a credit score. Buying a home? You get the point.

A low or non-existent score can get in the way of your life plans. But a few simple steps can set you on the path to success.

How Many Credit Cards Do You Need?

Don’t own a credit card yet? Getting a card is a simple way to start establishing credit. (People who already have a card with a balance might want to focus on paying it off instead of applying for a new one, though.) However, it’s crucial to use a card wisely—otherwise, cards can do more harm than good.

Most people should consider applying for just one card, not five. And keep in mind that just because someone has a card doesn’t mean they have free money. Opening one new line of credit and using it responsibly is a good way to build credit.

Recommended: Does Applying for Credit Cards Hurt Your Credit Score?

How Credit Cards Impact Your Credit Score

While some people out there believe credit cards are the root of all evil, they can boost credit scores in multiple ways if used correctly. The most common credit score model is issued by Fair, Isaac and Company, aka FICO®. Your FICO Score is comprised of five factors:

•   Payment history: 35%
•   Amount owed: 30%
•   Length of credit history: 15%
•   Credit mix: 10%
•   New credit: 10%

Credit cards can be an effective tool in a new credit builder’s toolbox. When someone uses a credit card responsibly, this can potentially have a positive effect on all five FICO categories.

Payment history: Making monthly payments on time (even just minimum payments) can help your credit score. As you make consecutive monthly payments, your score should gradually increase — as long as you remain responsible with your finances in other areas of your lives.

Amount owed: Everyone has something called a “credit utilization ratio,” sometimes referred to as a “debt-to-credit ratio.” This is the ratio of debt you owe versus how much debt you can owe.

Credit cards have credit limits. Let’s say Dana’s credit limit is $10,000, and she owes $5,000 on her card. Her credit utilization ratio is 50%. If she pays off $1,000 and only owes $4,000, her ratio is 40%. The lower the ratio, the better—that’s why older adults often lecture teens and early 20-somethings to pay off their card balances in full. A low ratio means better things for borrowers’ credit scores.

Length of credit history: The longer you have a line of credit, the better it is for your score. Ideally, someone would open their first credit card and keep it for years while making payments on time and keeping their balance low.

Those who already have a credit card but have racked up debt may want to think twice before canceling their card for this very reason—they might be better off working to pay off the balance aggressively and keeping the card for longer. But if they want to remove the temptation to keep charging the card, they can cut up the credit card like Rachel does in Friends. This way, the card isn’t sitting in their wallet, but their line of credit is still open.

Credit mix: FICO likes it when people have multiple types of debt. A recent college graduate’s only debt might be student loans. To improve their credit mix, they might consider getting a credit card as well.

New credit: When someone applies for a card, the issuer checks their credit score to determine whether they’ll be approved and what the interest rate should be. This is known as a “hard credit inquiry.” A bunch of hard credit inquiries in a short amount of time looks bad for a credit score, especially for someone whose score is already low. Besides, by limiting themselves to only one card, young people who are still learning the ropes of establishing credit might be less inclined to spend recklessly.

Consider a Secured Credit Card

Young people with low credit scores (or even no scores at all) may not be accepted if they apply for a top-notch credit card. Another option is to apply for a secured credit card. This type of card is meant specifically for people who want to build credit.

To use a secured credit card, people make a cash deposit to back their credit card account. The deposit amount becomes their spending limit. For example, John makes a $100 deposit when he receives his secured credit card. He can charge up to $100 to his card before paying it off. As long as he makes payments, he can keep charging to the card as long as the balance doesn’t exceed $100. If John doesn’t make payments on time, the issuer can take money from his cash deposit.

Secured cards benefit both the consumer and issuer. The consumer can build credit, and a cash deposit makes it less risky for the issuer to do business with someone who hasn’t yet proven that they can make payments on time.

What happens to that cash deposit down the road? If all goes well, people should get back their money. Many reputable credit card issuers offering secured credit cards give consumers the option to upgrade to a regular “unsecured” credit card once their credit score improves. When the user upgrades, they should receive that deposit back.

People researching secured credit cards may want to look for issuers who will let them transition to an unsecured card. This can simplify the process of switching to a regular credit card. Plus, the borrower won’t have to hang onto an unnecessary card or cancel the secured card later—which can help the “length of credit history” part of their FICO score!

Become an Authorized User on a Parent’s Credit Card

Some people may not trust themselves to use a credit card without racking up a ton of debt. Or they have the exact opposite fear—they might never use it, so they wouldn’t be making payments to boost their payment history. The latter fear may be the case for young people who are still receiving financial help from their parents and therefore don’t have many expenses to put on a card.

In either of these cases, young people might consider becoming an authorized user on a parent’s credit card. The parent can call the credit card issuer to officially put their child’s name on the card.

Young people should only add their name to a parent’s card if the parent has a high credit score and solid financial habits. If the parent starts to miss payments or accumulate a ton of debt, it will negatively affect the authorized user’s credit score.

Establishing credit through a parent’s card can help someone acquire a decent score before getting their own credit card. If they have a good credit score prior to applying for their first card, they might be approved for a harder-to-get card at an attractive interest rate. After receiving their own card, they might decide to remove their name from the parent’s card so they can have sole control over their personal credit score.

Pay Bills on Time

Okay, we’ve established that making monthly credit card payments positively contributes to the “payment history” part of a credit score. Credit cards aren’t the only things people can pay on time, though. Making timely payments on things like car loans or student loans also helps.

Certain bills don’t show up on credit reports, such as cell phone bills and insurance payments. While paying those bills doesn’t improve people’s credit scores, skipping payments can certainly hurt their scores. When people default on their payments, their credit scores can take a major hit. So it’s important for people to pay all their bills—even the ones that aren’t on their credit reports.

Take out a Credit-Builder Loan

Just as secured credit cards exist for people trying to build credit, there are special loans for this purpose, as well. These are called credit-builder loans, and they are usually offered by smaller banks and credit unions.

When people take out credit-builder loans, the loan amount is held in a separate bank account until the borrower pays off the full amount. By making payments on time, the “payment history” part of people’s scores should gradually improve. Borrowers do have to pay interest on the loan, and the percentage will depend on the lender. But there’s a huge bonus: Once people pay off the loan, they get to pocket the full loan amount and the interest they’ve paid. Not only do they walk away with a better credit score, but they now have money to put toward their emergency fund or student loan payments.

While people don’t need a good score to be approved for a credit-builder loan, they do need proof that they earn enough money to make monthly payments on time. They may need to provide documents such as bank statements, employment information, housing payments, and more.

Considering taking out a credit-builder loan? When shopping around, it is a good idea to keep an eye out for factors like APR, required documents, term length, loan amount, and additional fees before making a decision.

Be Patient

Establishing credit is the perfect example of “slow and steady wins the race.” People shouldn’t get discouraged when their credit score doesn’t surge after two months of making payments on time. And if they do get discouraged, they shouldn’t give up. The important thing is to continue making payments on time and using a card responsibly. The reward will come.

Keep Track of Your Credit Score

Many people have no idea what their credit score is. By regularly checking their score, they can know exactly where they stand and how much progress they need to make to reach their goals.

Some people may be concerned that checking their credit score can lower their score. But don’t worry, only “hard inquiries” affect credit scores. Hard inquiries occur when issuers or lenders check borrowers’ scores to determine whether to approve them for a credit card or auto loan, for example. But when a person checks their own score on a website or app, this is considered a “soft inquiry” and doesn’t affect their score.

Checking credit scores is easy with SoFi. By seeing their spending and credit score all in one app, users might feel encouraged when they notice their payments are actually improving their score, further motivating them to keep their credit score in a good place for the future.

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

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

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.

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.

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.

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If you’re considering refinancing some or all of your student loans, you may wonder what comes next on your financial to-do list.

On June 3, President Biden signed the debt ceiling bill into law, ending the three-year federal student payment pause. Payments are expected to resume in October.

Refinancing student loans can often result in a lower monthly student debt payment, either due to a lower interest rate, a longer loan term, or both. A lower monthly payment can be a big relief to borrowers who are still reeling financially from the effects of Covid-19 and higher inflation.

Lower payments can also free up some of your income for other key financial goals. That’s what we’ll look at here.

What Happens When You Refi Student Loans?

Understanding what happens after a refinance is key to planning your next steps.

As mentioned above, when you refinance, you may find a more favorable interest rate or more flexible loan terms that will help reduce your monthly payment. The SoFi Student Loan Refinancing Calculator can help determine how much refinancing could save you.

Keep in mind, when you refinance a federal student loan into a private loan, you lose the benefits and protections that come with a federal loan, like deferment and public service-based loan forgiveness (PSLF).

What Is Your Next Financial Goal?

As you consider refinancing, it’s a good idea to keep your other financial goals in mind. How can refinancing student debt — and perhaps lowering the percentage of income dedicated to repayment — help you achieve those goals? Take a look at the following scenarios that might apply to you.

1. Pay Down High Interest Debt

Once your student loan debt is under control, turn your attention to any high-interest debt you may be carrying on credit cards. There are two common ways people approach paying down debt. Which one you choose depends on your financial situation.

•  The Debt Avalanche. With this system, you start by paying your highest interest rate card first, with payments above the monthly minimum. You do this while still keeping up with minimum payments on any other debt. When you eliminate your highest rate debt first, you can more quickly lower your overall debt picture.

•  The Debt Snowball. In this scenario, you pay off your debt in order of the smallest to the largest balances, regardless of interest rate. This way you see some of your smallest debts paid off quickly and get a psychological boost from doing so. As you pay off each debt, you assign the amount of the payment you were making on that balance to the next debt. Your debt repayment builds momentum, known as “the snowball effect.”

Recommended: Which Debt to Pay Off First: Student Loan or Credit Card?

2. Start an Emergency Fund

Having money saved for unexpected expenses is a vital part of financial wellness.

But saving for emergencies is a challenge for many Americans. According to Bankrate’s 2023 annual emergency fund report, less than half (43%) of U.S. adults could pay for an unexpected emergency expense from their savings.

Starting or boosting your emergency fund with money saved on student loan payments is a great way to help keep your budget intact and stay out of debt.

How much should you save in your emergency fund? At least three to six months of living expenses (or take-home pay) is the rule of thumb. That way, if you lose your job, have an accident, or get sick, you’re likely to have enough to see you through until your situation improves.

3. Increase Retirement Contributions

Are you putting as much as you can away for retirement? Starting early can pay off big down the line, thanks to the magic of compound interest — and the fact that earnings grow tax-free in most retirement accounts such as IRAs and 401(k)s.

If your employer offers a matching contribution benefit, upping your game may be even more important. This is free money. Whenever possible, contribute the amount necessary to qualify for the full match so you take the best advantage of this key benefit.

4. Save for the Next Stage of Life

Life goes on well after student loans. Now with less student debt burden, you’re probably looking at what’s next. That may mean buying a car, saving for a down payment on a home, starting a family, or expanding a business.

Careful budgeting means you can put the difference between your old student loan payment and your new one toward other important life goals.

Once you establish the goal you’re saving for, consider opening a high-yield savings account dedicated to that purpose. You’ll earn interest while your nest egg accumulates but still have liquidity so your money is available when you’re ready to pursue your goal.

5. Invest

Starting an investment account outside of retirement savings can be an important financial goal in and of itself. The reason? Long-term stock market returns consistently outperform many other types of investments. Over the past decade through March 2022, the average annual return for the Standard & Poor’s 500 Stock Index was 14.5%.

Returns vary, of course, depending on the years you are invested and the economic environment. But over the long haul, investing in stocks early — even small amounts — can pay off in the future.

Mutual funds and exchange traded funds (ETFs) are two easy ways to start investing. A mutual fund is a collective investment which pools funds from many investors to invest in stocks, bonds or other securities. ETFs work much the same way but unlike mutual funds, ETFs can be bought and sold like a stock as the price goes up or down during the day.

How to Pay Off Student Loans Ahead of Schedule

As we’ve seen, a refinance can help lower your monthly payments and perhaps bring some much-needed wiggle room to the rest of your finances.

That may motivate you to keep the momentum going and look at ways you can repay your remaining student debt faster. Here are two tried and true strategies.

Pay More Than the Monthly Amount

Your monthly payment amount isn’t set in stone. You can always pay more than the minimum amount, and in most cases you probably should. Payments over the minimum monthly amount owed are applied directly to the principal. So even a little bit extra can lower the amount of your loan and help you save on interest over the life of the loan.

Recommended: Why Making Minimum Student Loan Payments Isn’t Enough

Dedicate a Windfall to Student Loans

Another strategy for paying student debt faster: Whenever you get a windfall, use some or all of it to make a lump sum payment toward your student loan principal. Think tax refunds, cash gifts, work bonuses, or income from a side gig or inheritance.

What to Avoid After Refinancing Student Loans

After refinancing student loans, be careful not to fall into a common trap: It’s called “lifestyle creep,” and it happens when you spend all of your discretionary income instead of directing some of it to financial goals.

To avoid creep, mindfully adjust your budget to account for any increase in income — such as lower student loan payments. That way the money will be put to good use instead of being frittered away.

Recommended: Living Below Your Means: Tips and Benefits

The Takeaway

Refinancing your student loans may help you lower your monthly payments, freeing up funds to put toward other financial goals. You might choose to pay down high-interest credit card debt, boost your emergency fund or retirement account, or even pay off your student loans faster. With the end of the federal student loan payment pause in sight, now may be a good time to consider refinancing all or part of your student debt.

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

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SoFi Student Loan Refinance
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If you’re working and want to continue school but aren’t sure how to fund it, your employer may offer assistance.
It’s called tuition reimbursement, and it’s how many companies help employees pay for continuing their education. Tuition reimbursement programs are growing in popularity as companies work to attract and retain employees.

What is tuition reimbursement? It’s when companies such as Starbucks, Amazon, Target, and more offer programs to help employees pay for a portion of their educational costs. These programs vary by company. Some may only cover course costs if the path of education is related to your job. Others may require employees to remain with the company for a certain period of time after completing their degree.

If you’re wondering, how does tuition reimbursement work?, read on to learn the tuition reimbursement meaning and to find out the requirements involved.

What Is Tuition Reimbursement?

Tuition reimbursement, or tuition assistance, is an arrangement where an employer pays for part or all of an employee’s continuing education whether undergraduate degrees or graduate school.

How does tuition reimbursement work? Your employment contract may lay out the terms of the tuition reimbursement: how much of your tuition your company will cover, what courses qualify, any minimum GPA requirements, and the minimum time period of employment.

Tuition reimbursement is often offered as an employee benefit on top of a salary package, along with other benefits like health insurance, a 401(k), or transportation expenses.

This is different from student loan repayment assistance, when your company provides some amount of money toward student loans you already have.

Not every company offers tuition reimbursement, but many large ones do provide reimbursement or financial support for continuing education. Some companies may stipulate that courses must relate to your current work.

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

Why Companies Offer Tuition Reimbursement

Tuition reimbursement is a perk that helps a company attract and retain employees, while also benefiting the company itself, since the courses you take may provide skills or knowledge you can put into practice at work.

Some companies are upping their educational benefits as a way to stay competitive. They may offer a range of benefits to their employees like refinancing student loans and student loan contributions.

Not sure if your employer offers tuition reimbursement? Check with your HR representative to see what options are available.

Tuition Reimbursement Requirements

The specifics of each company’s tuition reimbursement policy are likely laid out in an employment contract, but it’s common for a company to offer a tuition reimbursement only in accordance with certain eligibility requirements.

You’ll probably have to sign up and pay for the courses yourself first, so you’ll want to budget appropriately. In most cases you’ll need to pay for your courses out of pocket and then provide proof of completion and your grades in order to be reimbursed.

Program requirements

Your employer may limit its reimbursement program to certain institutions. For example, they may provide a list of accredited institutions you can choose from. Or they require that you attend a four-year program.

Coursework Requirements

Your company may reimburse you only for classes pertaining to your current job description.

Other times, companies will approve courses focused on moving you into a management role or on gaining skills you can put toward other future roles or assignments. For example, if you work in project management for a large corporation and are interested in learning how to use data visualization, you might be able to take community college courses in data production and visual graphics.

After understanding what courses qualify for tuition reimbursement, you could then look over the other requirements. For example, there may be minimum GPA or attendance requirements.

Timeframe Requirements

Sometimes a company will also require you to continue working with them for a set amount of time, since they’ve invested in your education and don’t want you to take those new skills to a competitor.

Tuition Reimbursement And the FAFSA®

An employer’s tuition reimbursement program doesn’t preclude you from filling out the Free Application for Federal Student Aid (FAFSA). In most scenarios, an employer is unlikely to cover 100% of tuition costs, and you may still qualify for aid in the form of federal loans and grants.

That said, you will be asked to note how much you are reimbursed for, which may have an effect on how much financial aid you’re offered.

Is Tuition Reimbursement Taxable?

While you should always consult with a licensed tax professional regarding the current tax law, and in no way should any of this information be considered tax advice, the IRS’ website currently states that employers can deduct the cost of tuition reimbursement (up to $5,250 annually). It’s a business expense for them. The IRS website also states that the first $5,250 of tuition reimbursement isn’t considered taxable income for employees. However, anything above that counts as part of your taxable wages and salary. Again, talking to a tax professional is always recommended.

The IRS does have some requirements on tax-free educational assistance benefits — which are not necessarily the same requirements your employer has.

Typically, for the IRS to consider tuition assistance as tax-free, it should be used to pay for tuition, fees, textbooks, supplies, or equipment.

And typically, it can’t be used for meals, lodging, transportation, or any equipment you keep after the course. It’s also not applicable to sports, games, or hobbies — unless they’re a degree requirement or you can prove they’re related to your employer’s business.

Again, consult with an accountant or tax attorney to get the complete picture.

What Are Other Options to Lower Education Costs?

The average cost of attending a four-year public college as an in-state student during the 2022-23 school year was $10,950, and that price tag only goes up for private schools and out-of-state students.

Federal Student Aid

For those who do not qualify for employer offered tuition reimbursement, there are other options that could be worth considering. As mentioned above, students can fill out FAFSA® annually. This allows them to apply for all types of federal student aid, including scholarships and grants, work-study, and federal student loans.

Private Student Loans

Beyond that, some may consider private student loans.

While one of the basics of student loans is that they offer students the opportunity to finance their education, private student loans don’t always have the same borrower protections, like income-driven repayment plans, that are afforded to federal student loans. For this reason, they are most often considered only after all other options.

Recommended: Private Student Loans Guide

Refinancing Existing Student Loans

If you already have student loans, when it comes time to repay you could consider refinancing to a lower interest rate. One of the advantages of refinancing student loans is that it could help you reduce the amount of money paid in interest over the total life of the loan; refinancing at a lower monthly payment could help with budgeting in the short term. However, lowering monthly payments is frequently the result of extending the loan term, which will result in increased cost over the life of the loan.

It’s important to know that there are various federal student loan repayment options and borrower protections (such as deferment or forbearance options). Refinancing federal loans eliminates them from these programs.

The Takeaway

Employers who offer tuition reimbursement programs will cover a portion of tuition costs if the employee meets specific program eligibility requirements. These requirements vary by company, but may include things like maintaining a minimum GPA, doing certain coursework, and stipulations around the length of employment.

Refinancing is another method that might help you lower your education costs. If you’re looking to refinance your student loans now, prequalifying online with SoFi takes just two minutes. SoFi offers student loan refinancing with low fixed and variable rates, flexible terms, and no fees.

Learn more about refinancing your student loans with SoFi.

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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.

This article is not intended to be legal advice. Please consult an attorney for advice.

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