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If you’ve been thinking about going back to college to finish your degree, you may have wondered, how long are college credits good for? Are the credits I earned years ago still worth anything? Do college credits expire?

The answers to those questions depend on a few different factors. Here’s what you need to know about when college credits expire.

When Do College Credits Expire?

Some folks wonder: Do college credits expire after 10 years? Technically, college credits don’t expire. When students earn credits for taking college courses, those credits will always appear on the official transcript from the school they attended.

The question is whether another school or program will accept those credits if a student wants to transfer them. And that can be a gray area.

The good news is that older, “nontraditional learners” — undergraduate and graduate students in their mid-20s, 30s, 40s, and up — are not an unusual sight on college campuses these days. Schools that hope to attract students who are looking to complete a degree may be especially open-minded about transferring their credits.

In the fall of 2021, more than 6.4 million adults ages 25 and older were enrolled in college, accounting for approximately one-third of total enrollment, according to the National Center for Education Statistics. And the number of adults getting a bachelor’s degree or higher has been on the rise for at least a decade, the Census Bureau reports. So most college admissions offices should be prepared to answer questions about how long are college credits good for, the possibility of transferring old credits, or if some credits have a shelf life at their school.

Those policies can vary. A college doesn’t have to accept transfer credits unless it has a formal agreement with the transferring institution or there’s a state policy that requires it. A credit’s transferability also may depend on the type of course, the school it’s coming from, or how old the credit is. These deciding factors are sometimes referred to as the three R’s: relevance, reputation, and recency.

What Criteria Do Schools Consider?

How long do college credits last? Here are some things schools may look at when deciding whether to accept transfer credits:

Accreditation Is Key

Accreditation means that an independent agency assesses the quality of an institution or program on a regular basis. Accredited schools typically only take credits from other similarly accredited institutions.

General Education Credits Usually Transfer

Subjects like literature, languages, and history tend to qualify for transfer without a challenge. So if you completed those core classes while working toward your bachelor’s degree, you may not have to repeat them.

Other Classes May Have a ‘Use By’ Date

Because the information and methods taught in science, technology, engineering, and math courses can quickly evolve, credits for these classes may have a more limited shelf life — typically 10 years.

Graduate Credits May Have a Short Life Expectancy

If the coursework for your field of study in graduate school would now be considered out of date, it’s likely that some or all of your credits won’t transfer. Graduate program credits are generally denied after five to seven years.

There Could Be a Limit on Transfers

Many institutions set a maximum number of transfer credits they’ll accept toward a degree program. For example, the Rutgers School of Arts and Sciences won’t take more than 60 credits from two-year institutions for an undergraduate degree, and no more than 90 credits from four-year institutions. No more than 12 of the last 42 credits earned for a degree may be transfer credits.

At the University of Arizona, the maximum number of semester credits accepted from a two-year college is 64. There is no limit on the credits transferred from a four-year institution, but a transfer student must earn 30 semester credits at Arizona to earn an undergraduate degree. And credit won’t be given for grades lower than a C.

Some Transfer Credits May Count Only as Electives

If a student’s new school determines that an old class was not equivalent to the class it offers, it may require the student to repeat the coursework in order to fulfill requirements toward a major. But the new school still may consider the old class for general elective credits, which can at least reduce the overall course load required to obtain a degree.

If at First You Don’t Succeed, You Can Try Again

Many schools allow students to appeal a credit transfer decision — whether it’s an outright denial or a decision that a course will be allowed only as an elective. The time limit for an appeal may be a year, a few weeks, or just a few days, so it can pay to be prepared with the evidence necessary to make your case.

The relevant paperwork might include a class syllabus, samples of completed coursework, and a letter from the instructor that explains the coursework.

Students also may have to meet with someone at the school to talk about their qualifications, or they may be asked to take a placement exam to test their current level of knowledge in a subject.

How to Request Transcripts

Some schools allow students to view an unofficial record of their academic history online or in person through the registrar’s office. So if it’s been a while and you aren’t sure what classes you took or what your grades were, you might want to start there.

After a refresher on what and how you did at your old college, it might be time to check out how your target school or schools deal with transfer credits.

Many colleges post their transfer credit policies on their websites, so you can get an idea of what classes you may or may not have to repeat. Or you can use a website like Transferology.com, or try the “Will My Credits Transfer” feature at CollegeTransfer.net, to get more information about which credits schools across the country are likely to accept.

When you’re ready to get even more serious, you may want to see if your target school makes transfer counselors available, or if someone in the academic department you’re interested in will evaluate your record and advise you as to how many of the credits you’ve earned might be accepted toward your major.

You’ll probably need to have an official transcript sent directly to your target institution to document your grade-point average, credit hours, coursework, and any degree information or honors designations. There may be a small fee for this service, and it could take several days to process the request.

Once your target school has had time to review your transcripts, you can expect to receive a written notice or a phone call telling you how many of your credits will transfer. When you know where you stand, you can decide if you want to appeal any of the school’s transfer decisions, if you’re ready to move forward in the application process, or if you want to check out other schools.

It’s important to note that students who still owe money to their old school may find it difficult to have an official transcript sent to a target school.

While the Family Educational Rights and Privacy Act gives students the right to inspect their educational records, the law doesn’t require schools to provide a signed and sealed hard copy of a transcript to students who haven’t fulfilled their financial obligations.

State governments may have different laws when it comes to withholding these documents, and schools may have their own policies. So some students might hit a road bump at the registrar’s office if they’re behind on their loans or haven’t paid an old fee.

Recommended: Private Student Loans Guide

How Old Debt Can Affect Transferring Credits

Of course, one of the basics of student loans is repaying them. If you’re delinquent, the problems caused by unpaid student debt can go beyond trouble with transcripts.

If you’re planning to return to school and you’re behind on your student loans, you may have difficulty borrowing more money until you’ve put some money toward student loans and gotten them back on track.

The Federal Student Aid (FSA) Program offers flexible repayment plans, loan rehabilitation and consolidation opportunities, forgiveness programs, and more for borrowers hoping to get back in good standing. The Federal Student Aid office’s recommended first step (preferably before becoming delinquent or going into default) is to contact the loan servicer to discuss repayment options.

Another possible solution for those who have fallen behind on their payments can be refinancing student loans. Borrowers with federal or private student loans, or both, may be able to take out a new loan with a private lender and use it to pay off any existing student debt.

One of the advantages of refinancing student loans is that the new loan may come with a lower interest rate or lower payments than the older loans, especially if the borrower has a strong employment history and a good credit record. (Note: You may pay more interest over the life of the loan if you refinance with an extended term.)

Even if you’re doing just fine and staying up to date on your student loan payments if you’re thinking about going back to school and you’ll need more money, a new loan with just one monthly payment might help make things more manageable.

However, if you have federal loans and refinancing sounds appealing, it’s critical that you understand what you could lose by switching to a private lender — including federal benefits such as deferment, income-driven repayment plans, and public student loan forgiveness.

Recommended: How to Get Out of Student Loan Debt

Moving Forward (With a Little Help)

If you’re excited about the possibility of going back to school to finish your degree (or earn a new one), you might not have to let concerns about financing keep you from moving forward.

You can contact your current service provider with questions about payment options on your federal loans. And if you’re interested in refinancing with a private loan now, you can start by shopping for the best rates online, then drill down to what could work best for you.

With SoFi, for example, you can prequalify online for student loan refinancing in just two minutes, and decide which rate and loan length suits your needs.

There are no fees with SoFi student loans (that’s something you should always check), and SoFi members have access to career coaching, financial advice, and other benefits that could come in handy when starting a new chapter in life.

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

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SoFi 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.

Every year, 30-40% of undergraduate students take out student loans to help fund their college education. While all federal student loans have fixed interest rates, private student loans can have fixed or variable interest rates.

Fixed interest rates do not change throughout the loan term. Your monthly payment will remain the same unless you choose to refinance through a private lender and get a new loan with a new rate.

Variable rates, on the other hand, fluctuate with the market. Your rate could go up or down throughout the loan term, making monthly payments less predictable than with fixed interest rates.

What factors are worth considering before deciding between a fixed or variable student loan rate? Here’s the scoop on ways these two student loan options differ.

Fixed Rate Student Loans

Fixed rate student loans have a locked-in interest rate for the entire loan term. This means that the interest rate on the loan when it is originally borrowed will be the same rate you have at the end of the term.

The only way a borrower would be able to change this interest rate is through refinancing the loan with a private lender or, for federal student loans, consolidating them through the government.

When you refinance your federal and/or private student loans, your interest rate is based on the market and your personal financial situation, such as your credit profile and your debt-to-income ratio.

Recommended: How to Build Credit

With a federal student loan consolidation, your interest rate is the average of the loans you are consolidating, rounded up to the nearest one-eighth of a percent. This rate is always fixed.

Fixed rate student loans are usually considered the safer option as there is no chance the interest rate will rise. All federal student loans (since July 1, 2006) have fixed interest rates that are set by Congress each year, so no matter which federal loan you qualify for, your interest rate will not change over the life of the loan.

Each type of federal loan will have its own fixed interest rate. For example, Direct PLUS Loans have a different fixed interest rate than Direct Unsubsidized Loans.

Undergraduate Direct Subsidized Loans and Unsubsidized Loans disbursed between July 1, 2022 and July 1, 2023 have a fixed interest rate of 4.99%.

Pros of Fixed Rate Student Loans

•   They’re not affected by market rate changes.

•   The monthly payments stay the same throughout the life of the loan.

Cons of Fixed Rate Student Loans

•   Fixed rate loans may have a higher starting interest rate than variable rate loans. This could mean missing out on initial savings if variable rates are lower than the fixed interest rate.

•   Market rates could decrease, meaning you could miss out on potential savings down the line.

Variable Rate (or Floating Rate) Student Loans

As mentioned above, all federal student loans have fixed interest rates. Borrowers will only have the option to choose a variable rate student loan when borrowing from a private lender.

While variable rate student loans typically have a lower starting interest rate, they are also riskier than fixed interest loans. This is because the interest rate on a variable rate student loan can change (increase or decrease) throughout the life of the loan based on how the market performs at any given time.

While it can be a good thing if the interest rate goes lower than your original rate, there is also a possibility that the interest rate can increase.

Recommended: What to Do When Student Loan Variable Rates Rise

Before choosing a variable rate student loan, it can be a good idea to ask your lender how often your interest rate can change on their end. Each lender has their own way of adjusting rates (some do it every month, where others will do it every few months).

You can also ask if there is a cap on the rate — some lenders will implement a cap such that a variable rate can’t exceed a certain percentage.

Pros of Variable Rate Loans

•   Generally have a lower initial interest rate than fixed rate loans.

•   They can be a good option for borrowers who qualify for a low interest rate and are on track to pay off their student loans quickly.

•   Borrowers could potentially save money if the interest rate drops.

Cons of Variable Rate Loans

•   Your loan’s rate can go up or down on a monthly, quarterly, or annual basis.

•   The monthly payment may not remain stable, and may increase or decrease as the interest rate changes.

•   For those paying their loan off on a fairly long timeline, the interest rate has more time to go up, which could cost the borrower more in interest over the life of the loan.

Choosing a Student Loan That Works for You

The final decision depends on your unique situation, of course. If you plan to pay off your loan relatively quickly, a variable rate student loan may help you spend less in interest.

However, be aware that the longer it takes you to pay off the loan, the more opportunity there is for interest rates to rise. You can help mitigate your risk by choosing a lender that caps its variable rates, but they will still fluctuate.

For borrowers who anticipate repaying student loans over a longer time period or those whose future income level is uncertain, a fixed rate student loan may make more sense.

Recommended: Student Loans Payoff Calculator

Securing a New Interest Rate with Student Loan Refinancing

Whether you originally borrowed a fixed or variable student loan, the main thing to remember is that the rate assigned when the loan was initially borrowed doesn’t have to be the rate for the entire life of the loan. Knowing your refinancing options can help put your mind at ease — and hopefully help you spend less in interest over the life of the loan.

While refinancing student loans can potentially help borrowers secure a lower interest rate, it’s not always the right option. Refinancing a federal student loan eliminates them from federal forgiveness benefits and borrower protections like income-driven repayment plans or deferment. If you plan to use these benefits now or in the future, it is not recommended to refinance your student loans.

The Takeaway

When thinking of the difference between a fixed and variable rate student loan, it helps that the names are descriptive. A fixed interest rate remains the same throughout the entire life of the loan, whereas a variable rate fluctuates with market changes over time.

All federal student loans have fixed interest rates that are set annually by Congress. Private student loans may be either fixed or variable.

Student loans can get complicated, but SoFi is here to help. From helping you finance your education to helping you manage your existing student loan debt, we’ve got you covered.

If you are looking to change your interest rate from fixed to variable or variable to fixed, or you’re simply hoping to refinance to a lower rate to save money on interest, SoFi offers student loan refinancing with an easy online application, competitive fixed and variable student loan rates, and flexible loan terms.

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.

Closing costs average 3% to 6% of your mortgage loan principal. So even if you’ve saved for a down payment on a new place, you are likely going to have to dig somewhat deeper to afford to seal the deal. How deep, you ask? For buyers, closing costs can add up to a significant sum.

Whether you are a first-time homebuyer or a seasoned property purchaser, it’s wise to know what to expect, in terms of both money and process, when it’s time to gather at the closing table. Payments will be due from both the buyer and the seller.

Get ready to delve into this important home-buying topic and learn:

•   What are closing costs?

•   How much are closing costs on a house?

•   Who pays closing costs?

•   How much are closing costs for the buyer and the seller?

•   How can you lower closing costs?

What Are Closing Costs?

Closing costs are the fees needed to pay the professionals and businesses involved in securing a new home. These range from fees charged by appraisers, real estate agents, and title companies, to lender and home warranty fees.

Here are some key points to know:

•   When you apply for a mortgage loan, each lender must provide a loan estimate within three business days. This will give you information such as closing costs, interest rate, and monthly payment. Review those closing costs carefully.

•   Your closing costs will depend on the sale price of the home, the fees the chosen lender charges, the type of loan and property, and your credit score.

•   Closing costs are traditionally divided between the buyer and seller, so you won’t necessarily be on the hook for the whole bill. That said, the exact division between buyer and seller will depend on your individual circumstances and can even be a point of negotiation when you make an offer on a house.

How Much Are Closing Costs?

As noted above, average closing costs on a house typically range from 3% to 6% of the mortgage principal. Let’s say you take out a $300,000 mortgage loan to buy a house with an agreed-upon sale price of $350,000. Your closing costs could be between $9,000 and $18,000, or 3% and 6%.

Be aware that a “no closing cost mortgage” often means a higher rate and a lot more interest paid over the life of the loan. The lender will pay for many of the initial closing costs and fees but charge a higher interest rate.

Good news if you are buying a HUD home: HUD will pay some of the closing costs as well as the real estate commission fee usually paid by the seller.

Recommended: First-Time Homebuyer Guide

Calculate Closing Costs

The tool below is a home affordability calculator, and it’s a great way to also see what the potential closing costs and additional monthly costs would be based on how much home you can afford.

Who Pays Closing Costs?

Typically, closing costs are paid by both the buyer and the seller. Each has their own responsibilities to uphold.

Some fees are specific to the purchase and are payable by the buyer. These include title search, prepaid interest on the mortgage loan, and more.

Other costs are the seller’s responsibility: paying the real estate agent and so forth. Read on to learn more about who pays for what when closing on a home sale.

How Much Are Closing Costs for a Buyer?

Typically, the buyer pays the following closing costs:

•   Abstract and recording fees: These fees relate to summarizing the title search (more on that below) and then filing deeds and documentation with the local department of public records. You may find that abstract fees can cost anywhere from $200 to $1,000, and recording fees in the range of $125.

•   Application fee: Your lender may charge you to process your application for a home mortgage loan. This could cost up to $500.

•   Appraisal and survey fees: It is easy to be wooed by pristine wood floors and dining room walls covered in vintage wallpaper, but surface good looks will only get you so far. You and your lender want to make sure that your potential new home is actually worth the purchase price. This means paying professionals to delve more deeply and provide a current market value. These home appraisal and survey fees are typically due at closing. This is usually in the $300 to $400 range, but could be considerably higher, depending on the home, its location, and other factors.

•   Attorney costs: Working with a real estate attorney to review and vet documents may be an hourly rate (typically $150 to $400 per hour) or a project fee ($500 to $2,000). The specifics will vary depending on the individual professional you use, your location, and how complex your purchase is.

•   Credit reporting, underwriting, and origination fees: The lender may charge anywhere from $10 to $100 per applicant to check their credit score; underwriting fees (often in the $400 to $900 range) may also be added to closing costs. Origination fees can be about 1% of your loan’s value and cover the costs of the lender creating your loan documents.

•   Flood certification fee: The lender may require a flood certification, which states the flood zone status of the property. This could cost anywhere from $20 to $300, depending on your state.

•   Home inspection fee: This will likely cost between $300 and $500, but it could go higher. This is paid by the buyer, who is commissioning the work to learn about the home’s condition. In some cases, it may be paid at the time of service vs. at closing.

•   Homeowners insurance: Your lender may require you to take out homeowners insurance. The first payment may be due at closing. The exact amount will depend on your home value and other specifics of your policy.

•   Home warranty: A home warranty is optional and can be purchased to protect against major mechanical problems. A warranty plan may be offered by the seller as part of the deal, or a buyer can purchase one from a private company. Your lender, however, will not require a home warranty.

•   Mortgage points: Each mortgage point you choose to buy costs 1% of your mortgage amount and typically lowers your mortgage rate by 0.25% per point. That point money you are paying upfront is due at closing. All the mortgage fees will be spelled out in the mortgage note at the closing.

•   Prepaid interest: Some interest on your mortgage is probably going to accrue between your closing date and when the first payment is due on your loan. That will vary with your principal and interest rate, but will be due at closing.

•   Private mortgage insurance: Often lenders require PMI if you make a down payment that is less than 20% of the purchase price. Putting less money down can make a buyer look less reliable when it comes to repaying debt in the eyes of lenders. They require this premium to protect themselves. This is usually a fee that you pay monthly, but the first year’s premium can also be paid at the time of closing. Expect a full year to cost between .5% and 2% of the original loan amount.

•   Title search and title insurance fees: When a title search is done to see if there are any other claims on the property in question, the buyer typically pays the fee, which is usually in the $75 to $200 range. The lender often requires title insurance as a protection. This is likely a one-time fee that costs between 0.5% and 1% of the sale price. If your house costs $400,000, the title insurance could be between $2,000 and $4,000.

As you see, some of these fees will vary greatly depending on your specific situation, but they do add up. You’ll want to be sure to estimate how much closing costs are for a buyer and then budget for them before you head to your closing.

Recommended: How Long Does It Take to Close on a House

How Much Are Closing Costs for a Seller?

You may also wonder what closing costs are if you are selling your home. Here are some of the fees you are likely liable for at closing:

•   Real estate agent commission: Typically, the seller pays the agent a percentage of the sale price of the home at closing, often out of the proceeds from the sale. The commission is likely to be in the 5% to 6% range, and may be equally split between the buyer’s and seller’s agents.

•   Homeowners association fees: If the home being sold is in a location with a homeowners association (HOA), any unpaid fees must be taken care of by the seller at closing. The actual cost will depend upon the home being sold and the HOA’s charges.

•   Property taxes: The seller must keep these fees current at closing and not leave the buyer with any unpaid charges. These charges will vary depending on the property and location.

•   Title fees: The seller will probably pay for the costs associated with transferring the title for the property.

It’s important for sellers to anticipate these costs in order to know just how much they will walk away with after selling a home.

How to Reduce Closing Costs

Closing costs can certainly add up. Here are some ways to potentially lower your costs.

•   Shop around. Compare lenders not just on the basis of interest rates but also the fees they charge. Not every mortgage lender will charge, say, an application, rate lock, loan processing, and underwriting fee. See where you can get a competitive rate and avoid excess fees.

•   Schedule your closing for the end of the month. This can lower your prepaid interest charges.

•   Seek help from your seller. You might be able to get the seller to pay some of your closing costs if they are motivated to push the deal through. For instance, if the property had sat for a while, they might be open to covering some fees to nudge the deal along.

•   Transfer some costs into your mortgage payments. You may be able to roll some costs into the mortgage loan. But beware: You’ll be raising your principal and interest payments, and might even get stuck with a higher interest rate. Proceed with caution.

Other Costs of Buying a Home

In addition to your down payment and closing costs, you also need to make sure that you can afford the full monthly costs of your new home. That means figuring out not only your monthly mortgage payment but all the ancillary costs that go along with it.

Understanding and preparing for these costs can help ensure that you are in sound financial shape for your first few years of homeownership:

Principal and interest. Your principal and interest payment is the amount that you are paying on your home loan. This can be estimated by plugging your sales price, down payment, and interest rate into a mortgage calculator. This number is likely to be the biggest monthly expense of homeownership.

Insurance. Your homeowners insurance cost should be factored into your monthly ownership expenses. Your insurance agent can provide you with details on what this policy will cover.

Property taxes. Property tax rates vary throughout the country. The rates are typically set by the local taxing authorities and may include county and city taxes. It’s important to factor in these costs as you think about your ongoing home-related expenses.

Private mortgage insurance. As mentioned, PMI may be required with a down payment of less than 20%. PMI is usually required until you have at least 20% equity in your home based on your original loan terms.

Homeowners association fees. If you live in a condo or planned community, you may also be responsible for a monthly homeowners association fee for upkeep in the common areas in your community.

Of course, these are just some of the things to budget for after buying a home. Your needs will depend on whether you are moving a long distance, whether you have owned a home before, and other factors. It’s a lot to think about, but it’s an exciting time.

The Takeaway

Before buyers can close the door to their new home behind them and exhale, they must be able to afford their down payment, qualify for a mortgage loan, and pay the closing costs — usually 3% to 6% of the loan amount. A home loan hunter may want to compare estimated closing costs in addition to rates when choosing a lender. It can be a wise way to keep expenses down.

SoFi Mortgage Loans offer competitive rates and a simple online application process. What’s more, qualifying first-time homebuyers can put as little as 3% down.

FAQ

How can I estimate closing costs?

Typically, closing costs will cost between 3% and 6% of your home loan’s amount.

When do I pay closing costs?

Your closing costs are typically paid at your closing. That is when you take ownership of the property and when your home mortgage officially begins.

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

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

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

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

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Starting salaries can vary greatly based on location or line of work, so there’s no one answer to the question, “What is a good entry level salary?” The size of the paycheck will differ based on where someone lives, the industry they work in, the hiring institution or company, and other hard-to-tabulate variables.

So, how might a job seeker figure out a good entry level salary before sitting down with the new boss or an HR representative to discuss pay? Here are some helpful resources to get a handle on entry level rates across the U.S., including tips for negotiating compensation.

Understanding Entry Level Salaries

Entry level salary information changes on a regular basis, but many job-focused websites offer insights into the going rates. For instance, ZipRecruiter, a well-known American employment marketplace, lists the average U.S. entry level salary by state. In summer 2023, wages in North Carolina are $13.44 per hour or $27,956 per year, whereas New York pays $16.79 per hour or $34,933 per year, on average.

Still, even state-by-state averages don’t show the whole picture. Although more than half of U.S. states have minimum wage requirements higher than the federal minimum wage, which remains set at $7.25 per hour, the amount an early-career new hire might expect can also vary by county and city within the same state.

Recommended: The Highest Paying Job in Every State

Along with location, the industry one works in can play a big role in what kind of starting salary a new hire might expect. For instance, a data scientist at a tech company might be able to earn as much as $95,000 right out of the gate, while a newly minted journalist might expect something closer to $40,000.

One way to grasp what sort of salary that might be expected is targeted research on the specific industry, location, and even position and company. And if you’re in the early stages of college, you might want to align your eventual courses of studies with a high-paying entry level job.

Researching a Good Entry Level Salary

Recent grads wanting to understand if they’re being offered current market rates for a particular job (or location) can turn to the internet to research details. Some sites that might offer resources for those job seekers include:

•   Payscale, for example, allows employees to create custom “pay reports” based on their job title, years of experience, and city.

•   Salary.com offers a similar feature, allowing job seekers to search for positions by keyword and compare them accordingly.

•   Glassdoor is another well-known web resource that publishes employee-generated information on salary by specific company and position. It also hosts reviews by current and former employees, which may help a job applicant learn more about what it’s actually like to work there.

After researching average pay by role, location, and company, job seekers might also want to mull over how to negotiate an acceptable offer.

Recommended: Average Pay in the U.S. Per Year

Negotiating a Higher Offer

So, what can a job seeker do if their dream job doesn’t (initially) come with a dreamy paycheck? Luckily, there are ways to negotiate a higher offer both initially and once you’ve proven yourself down the line.

Negotiating a salary can be scary, especially for a recent grad who’s not used to the salary tango. Nevertheless, negotiating an offer up front can have a significant effect on one’s paycheck (and, by extension, one’s long-term earnings).

When thinking of how to negotiate your starting salary, don’t forget about the benefits package, as well. In addition to higher pay, you may want to negotiate other benefits such as tuition reimbursement, a flexible schedule, or childcare expenses into your total compensation package.

Preparing to Negotiate

How might a new hire negotiate a higher-paid entry level salary? Well, having a well-researched entry level salary forecast in mind is one place to start.

Of course, it’s not likely that an early-career new hire can simply negotiate up to an experienced data scientist’s $95,000 salary if that’s not the norm for the role or location they’ve applied for. But, it’s still possible to make the case to hiring managers for why a higher rate is merited. When preparing to negotiate, remember to:

Highlight Your Skills

When asking for a higher starting salary, it could be helpful to give concrete examples of how your current skills might benefit the company. In these conversations, it may be possible to push an offer up a few percentage points (especially when the skills required are in high demand).

Practice Your Pitch

Rehearsing what you’ll say ahead of time can help you hone a confident delivery style. What’s more, it can help you be prepared for questions that come your way regarding why you deserve a higher pay.

Negotiate Other Benefits

On top of baseline salary, it’s also possible in some roles and industries to negotiate for other valuable forms of compensation — such as fitness stipends, work-from-home time, funding for continued education, and more.

Of course, negotiating a good entry level salary is not necessarily an easy undertaking. Interviewers may put candidates on the spot, asking if they’re considering other offers or if the position is their top choice.

In an already uncomfortable situation, some candidates may stumble or misspeak if they don’t know how to justify what they’re asking for.

One simple place to start is asking whether it’s possible to negotiate the offer in the first place. Candidates may also inquire about future career growth and promotion potential, which could lead to a bigger salary later down the road.

Navigating Post-College Life, Financially and Beyond

Navigating life after college can be exciting and challenging. Trying to make ends meet on an entry level salary might be particularly tough, especially when on the hook to pay back student loans. More than 43 million borrowers have federal student loan debt, with the average balance being $37,388 per person.

A flexible and adaptable approach to finances and where one lives could make the transition to post-college life more manageable.

Recommended: 46 Tips for College Graduates

For instance, recent graduates who are in a position to choose a new place to live might opt to move to a city with a lower cost of living.

Learning how to make a budget can also go a long way toward covering common expenses — even when one’s starting salary leaves a few zeroes to be desired. That said, there’s only so much instant ramen to eat or cups of coffee to skip out on.

Refinance Student Loan Debt

For those feeling weighed down by student loans while earning an entry level salary, additional options exist. Those with outstanding federal student loans, for example, may qualify for income-driven repayment plans, loan forgiveness for public service, or student loan deferment.

Refinancing educational debt with a private lender is another option that could save money each month — or help the borrower pay off student loans faster.

Student loan refinancing may allow recent grads to make lower monthly payments toward their existing debt, freeing up some extra cash. (Note: You may pay more interest over the life of the loan if you refinance with an extended term.) Or, it could help a borrower to save money on interest paid on the loan as a whole, allowing them to pay off the debt total faster.

It’s important to note that refinancing with a private lender causes borrowers to forfeit certain guaranteed federal benefits, like income-driven repayment (IDR) and loan forgiveness.

SoFi refinances both federal and private student loans, offering no application fees and no prepayment penalties. Those who refinance their student loans through SoFi get access to a wide range of exclusive member benefits, including career coaching, financial advice, and more — at no additional cost.

Checking your student loan refinance rate won’t have an affect on your credit score and could be the first step toward saving thousands of dollars — or making more affordable monthly student loan payments.

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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.

Real estate agents — both on the seller’s side and the buyer’s side — typically get paid at closing from the seller’s proceeds. The majority of real estate agents are paid via a commission vs. a set fee, which means the higher the sales price, the more money the agent gets paid.

Commissions are split evenly between the buyer’s and seller’s agents. The brokerage each real estate agent or Realtor® works for snags a portion of the commission as well. (Realtors are real estate agents who belong to the National Association of Realtors, requiring them to adhere to a certain code of ethics; we’ll use the terms interchangeably here.) Here’s an example of how a Realtor gets paid.

Real Estate Commission: An Example

Let’s say a home sells for $500,000 with a typical commission of 6%:

Total commission fee: $500,000 X 6% = $30,000

The commission is split evenly between the two sides:

•   Listing agent side = $15,000

•   Buyer’s agent side = $15,000

Real estate agents share their commissions with the brokers representing them. (A broker is an agent who also has an additional license to supervise other agents.) Let’s assume that the broker fee is 1% of the sales price (the broker’s split can go up to 50%, but we’ll use an easy 1% split here).

•   $500,000 sale price X 1% broker’s fee = $5,000

Subtract the broker fee from the total commission and the agent ends up with the rest.

•   $15,000 total commission – $5,000 broker’s fee = $10,000 agent commission

Typically, four people get paid from the seller-paid real estate commission. It may look something like this:

•   Listing agent = $10,000 (2% of sales price)

•   Listing agent broker = $5,000 (1% of sales price)

•   Buyer agent = $10,000 (2% of sales price)

•   Buyer agent broker = $5,000 (1% of sales price)

A Real Estate Agent’s Responsibilities

To earn their commission, real estate agents often have a lot of responsibilities. Their duties include:

•   Providing market data and helping to set a listing price

•   Placing ads and putting up yard signs

•   Photographing the property

•   Listing the property in the MLS, a listings database

•   Scheduling showings

•   Placing lock boxes

•   Guiding first-time home buyers

•   Smoothing over difficult relationships

•   Navigating offers and counter offers

•   Negotiating home contracts

Making a living through commissions can be challenging for real estate agents, but it can also be very rewarding.

Recommended: How to Find a Real Estate Agent

Who Pays the Realtor Commission?

It is expected that the seller pays the real estate agent commission fee for both the buyer’s and seller’s agents. At settlement (also called the “closing”), the money for the commission comes out of the seller’s proceeds. If the sales price of a home is $500,000 and the sellers owe $250,000 on their mortgage, then the commission and other fees would be subtracted from the $250,000 that remains after the sellers pay off their mortgage.

How Much Are Realtor Fees?

It is common to see real estate agent commission fees between 5% and 6%. This includes both the seller’s and the buyer’s real estate agents’ fees. The money is usually split evenly between the two sides. If the commission is 6%, for example, 3% would go to each side.

Can You Negotiate Who Pays the Real Estate Agent?

The Realtor fee is negotiable, though it is extremely rare for a buyer to pay it. Some ideas to help reduce your fee if you are selling your home:

•   Barter. Do you have a photographer friend who can take photos of your home? Offer up skills in exchange for a lower commission.

•   Hire a newer agent. A newer agent may accept a lower commission to gain experience.

•   Pay attention to market conditions. If homes aren’t moving in your market, you may be able to negotiate a lower commission.

Take time to interview potential Realtors using these suggested questions. When you’re buying a home, look for an agent with a strong network. (These agents may be the first to hear about so-called “whisper listings.”) Be sure the commission outlined in the listing agreement you sign matches what you agreed on.

How Is an Agent’s Commission Determined?

An agent’s commission is determined by the compensation agreement they have with their brokerage. As noted above, after the commission is split between the buyer’s and the seller’s agents, it’s then split again between the agent and the broker.

When Do Agents Receive Their Commission?

Agents usually receive their commission after the home mortgage loan has been funded and the sale closes. Their brokerage receives a wire with the funds and the agent’s portion of the commission is released to them shortly thereafter.

How Do the Agents Share Their Commission?

It is customary for agents to share the commission 50/50. If the listing has a 6% commission on it, 3% would go to the buyer’s agent and 3% would go to the seller’s agent.

What Is Dual Agency?

Dual agency is when a real estate agent represents both the seller and the buyer in a transaction. It must be disclosed to both parties because real estate agents are bound by a fiduciary duty to serve their clients. An agent who represents both seller and buyer will earn more commission.

Is Paying a Real Estate Commission Worth It for the Seller?

For many sellers, it’s painful to look at the closing documents and see how much of the sales price goes to different agents, title insurance companies, concessions, and so forth. But a lot of sellers like having someone to guide them through the complexities of real estate law, and sensitive issues that the sale of a home creates.

Recommended: How to Buy a House Without a Realtor

Alternatives to a Percentage-based Commission

There are real estate brokerages that advertise services for a flat fee. Usually, the flat fee is very low and may only include a listing on the MLS with photos. They usually don’t offer to schedule showings or manage the listing in any other way.

The Takeaway

Working with a real estate agent who earns a commission isn’t painful when you’re a buyer because the fee is almost always covered by the seller, and you will have an agent on your side to help you negotiate.

Another way to be money-smart when you’re buying is to get a good rate on a home loan. SoFi Mortgages offer competitive interest rates, low down payment options, and a guaranteed on-time close* (which you and your Realtor will love).

See your home loan rate in minutes.

FAQ

Do sellers pay realtor fees?

Yes, sellers pay realtor fees for both the buyer and the seller.

Do buyers pay Realtor fees in Texas?

No, the seller pays the realtor fees in Texas, with very few exceptions.

Do buyers pay Realtor fees in Washington state?

No, the seller usually pays realtor fees in Washington state, but it is negotiable.

How much does a new Realtor make in Illinois?

According to ZipRecruiter.com, the average pay for a first-year real estate agent in Illinois is $82,481. The range for first-year salaries is between $18,866 and $153,998.

Photo credit: iStock/RyanJLane
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*^‡SoFi On-Time Close Guarantee: If all conditions of the Guarantee are met, and your loan does not close on or before the closing date on your purchase contract accepted by SoFi, and the delay is due to SoFi, SoFi will give you a credit toward closing costs or additional expenses caused by the delay in closing of up to $10,000.^ The following terms and conditions apply. This Guarantee is available only for loan applications submitted after 04/01/2024. Please discuss terms of this Guarantee with your loan officer. The mortgage must be a purchase transaction that is approved and funded by SoFi. This Guarantee does not apply to loans to purchase bank-owned properties or short-sale transactions. To qualify for the Guarantee, you must: (1) Sign up for access to SoFi’s online portal and upload all requested documents, (2) Submit documents requested by SoFi within 5 business days of the initial request and all additional doc requests within 2 business days (3) Submit an executed purchase contract on an eligible property with the closing date at least 25 calendar days from the receipt of executed Intent to Proceed and receipt of credit card deposit for an appraisal (30 days for VA loans; 40 days for Jumbo loans), (4) Lock your loan rate and satisfy all loan requirements and conditions at least 5 business days prior to your closing date as confirmed with your loan officer, and (5) Pay for and schedule an appraisal within 48 hours of the appraiser first contacting you by phone or email. This Guarantee will not be paid if any delays to closing are attributable to: a) the borrower(s), a third party, the seller or any other factors outside of SoFi control; b) if the information provided by the borrower(s) on the loan application could not be verified or was inaccurate or insufficient; c) attempting to fulfill federal/state regulatory requirements and/or agency guidelines; d) or the closing date is missed due to acts of God outside the control of SoFi. SoFi may change or terminate this offer at any time without notice to you. *To redeem the Guarantee if conditions met, see documentation provided by loan officer.