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It’s hard to find anything close to the pride and joy having kids can bring you. And one of the best gifts we can give them is a solid education. That means reading to them when they’re toddlers, helping them with homework, and paving the way to college.

It’s a good idea to begin putting a college plan in place as soon as you can.

As the end of high school nears, not only are grades and school involvement important, but here comes the potential expense of entry into college. Waiting until then to look at the cost of attendance could be jaw-dropping.

Whether you plan to foot the whole bill or cover just a portion, you may want to start thinking about how much you can save monthly to hit your target.

Considering the Future Costs

As you think about saving for college, consider the potential cost of when your child will actually attend rather than focus on what it costs now.

There’s the matter of tuition and fees, usually reported as one figure. The averages for the 2020-2021 academic year, according to CollegeData:

•  $10,560 at public colleges (for in-state residents)
•  $27,020 at public colleges (for out-of-state residents)
•  $37,650 at private colleges

“Cost of attendance” for a year includes that figure and, usually, room and board, books, supplies, transportation, and personal expenses. For the 2020-2021 academic year, CollegeData put the average cost of room and board alone at:

•  $11,620 at public colleges
•  $13,120 at private colleges

Living and eating at Mom and Dad’s obviously will reduce those costs.

The average price of books and supplies for students at both public and private colleges came to $1,240.

Now let’s say you want to estimate what college costs might be years later, when your child sets off for college. Assuming 15 years until your child starts as a freshman and a 5% increase in costs per year, here’s the estimate per year 15 years down the road for tuition, fees, room, and board.

•  Cost today at a four-year public college, in-state rate: $22,180
•  In 15 years: $46,111

•  Cost today at a four-year public college, out-of-state rate: $38,640
•  In 15 years: $80,330

•  Cost today at a private four-year school (average): $50,770
•  In 15 years: $105,547

Keep in mind that most college students take more than four years to get a bachelor’s degree. In fact, most take five or six years, according to the National Center for Education Statistics.

Those are big numbers, but every student who meets eligibility requirements can get some type of federal student aid, says the Federal Student Aid office. And then there’s merit aid, or merit scholarships, which are based on academic achievement or other talents or skills. Merit-based aid does not have to be paid back.

College Savings Vehicles to Consider

There are several options and accounts to help you with saving for your child’s college education. Some have tax benefits and others offer flexibility, should your child decide to forgo college, so you should explore the plan that best fits your specific needs.

Ways to save for college include:

•  A 529 plan, which breaks down into two categories: educational savings plans and prepaid tuition plans.
•  Coverdell Education Savings Account
•  UGMA/UTMA accounts

The difficult part in deciding when to start saving for college isn’t always as simple as picking out a savings plan. It might be less about “when” and more about “how”—finding room in your budget to meet education expenses and all your other financial goals.

Balancing College Savings With Retirement Savings

If you’re like many young parents, you may be wondering how to juggle college savings with all of your other expenses, including debts and retirement contributions. Drawing up a savings plan that doesn’t jeopardize your retirement planning or send your household finances into a nosedive is a great place to start.

Scholarships and student loans may be accessible to help pay for your child’s education, but the same cannot be said for your retirement nest egg. You would do well to consider how long you’ll need money in retirement and how that compares with four to six years toward a bachelor’s degree.

To get a better handle on how much money you will need to retire, the AARP advises asking four key questions : How much will you spend? How much will you earn on your savings? How long will you live? How much can you withdraw from savings each year?

One study found that the combined income and savings of parents and students makes up for nearly half (47%) of the funding families use to cover the entire cost of school. It also found that parents pay 10% of the total amount due by borrowing, and that students cover 14% with student loans and other debt-forming sources.

Parents deciding when to start saving for college might not want to think of it as an I-must-pay-for-it-all prospect. If you’re still stumped on how to balance both goals, it’s OK. At the end of 2019, before the financial repercussions of COVID-19, many non-retirees were struggling to save, the Federal Reserve found.

These eight tips for finding “hidden” money could help you get started thinking about funding retirement and college at the same time.

As college enrollment time gets closer, you could have a family discussion on how much student loan debt you and your child are willing to take on, if necessary.

💡 Recommended: Understanding the Different Retirement Plans

What If I Still Have Student Loan Debt?

Many parents who wonder when to start saving for their child’s college may also be asking how they can reduce their own college debt. U.S. student loan debt has ballooned to $1.71 trillion, the Fed reported. That’s an average of $37,700 in loans each for 45 million Americans.

If you find yourself with student loan debt while also saving for your child’s college education, there are at least four options that might help you to free up more money:

•  Federal student loan consolidation
•  Federal student loan forgiveness
•  Federal income-driven repayment plans
•  Refinancing private and/or federal student loans through a private lender

With student loan refinancing, depending on your credit history and income, you could qualify for a lower rate than the one you currently have on your student loans.

This could mean savings over the life of the loan, depending on the repayment term you select. But know that if you refinance federal student loans, you’ll lose out on any repayment plans or protections offered by the federal government, like Public Service Loan Forgiveness and income-driven repayment plans.

The Takeaway

When to start saving for a child’s college education? The sooner, the better. First, though, it’s best to make sure you are on steady financial footing, and then, if possible, find money here and there to save for your children’s college.

If you happen to still have student loans of your own, you may want to look at the flexible terms and fixed or variable rates SoFi offers to refinance student loans into one new loan with one monthly payment. There are no application or origination fees, and checking your rate takes two minutes.

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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.

IF YOU ARE LOOKING TO REFINANCE FEDERAL STUDENT LOANS, PLEASE BE AWARE THAT THE WHITE HOUSE HAS ANNOUNCED UP TO $20,000 OF STUDENT LOAN FORGIVENESS FOR PELL GRANT RECIPIENTS AND $10,000 FOR QUALIFYING BORROWERS WHOSE STUDENT LOANS ARE FEDERALLY HELD. ADDITIONALLY, THE FEDERAL STUDENT LOAN PAYMENT PAUSE AND INTEREST HOLIDAY HAS BEEN EXTENDED TO DEC. 31, 2022. PLEASE CAREFULLY CONSIDER THESE CHANGES BEFORE REFINANCING FEDERALLY HELD LOANS WITH SOFI, SINCE THE AMOUNT OR PORTION OF YOUR FEDERAL STUDENT DEBT THAT YOU REFINANCE WILL NO LONGER QUALIFY FOR THE FEDERAL LOAN PAYMENT SUSPENSION, INTEREST WAIVER, OR ANY OTHER CURRENT OR FUTURE BENEFITS APPLICABLE TO FEDERAL LOANS. CLICK HERE 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.

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.

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There’s no question that student loan debt is at an all-time high. The latest statistics show that nearly 45 million U.S. borrowers owe more than $1.7 trillion in student loans.

Many graduates want to pay off their student loans as soon as possible. But is paying off the loans early always the best move?

That depends on a variety of factors, including whether you are carrying additional debt, if you have a savings account, and how you define your financial goals—among others.

For instance, if you’re carrying a large amount of credit card debt and are paying, say, 16% interest on it, but your student loans have a 5% interest rate, it may make more sense to pay off your credit card before you pay off your student loans.

Here’s a look at the pros and cons of paying off student loans early.

Pro: No Need to Worry about Prepayment Penalties

Whether you have federal or private student loans, lenders cannot charge prepayment penalties.

That means you can reduce the balance of a student loan by making extra payments and even pay off the entire balance before it’s due without being charged an extra fee.

Keep in mind that when you make an extra payment on your loan, the payment is applied first to any late charges and collection costs, then to outstanding interest, and then to outstanding principal, according to FinAid. Any amount beyond this total is considered a prepayment on the principal of your student loan.

Con: You Risk Missing Payments

Sometimes borrowers get so excited about making extra payments on their student loans that they forget to make consistent payments. Keep in mind that if you make an extra payment each month, but then miss a minimum payment deadline the next month, you will be charged a late fee for the payment you failed to make.

Doubling up on payments doesn’t give you the luxury of missing a monthly payment. Always make sure you are able to meet your monthly minimum payment deadlines. And if you have more than one student loan, consider making extra payments on the loan with the highest interest rate so that you pay less interest on the loan over time.

Pro/Con: Your Credit Score Might Change

While you might think paying off your student loans early will improve your credit, that isn’t always the case, according to the National Foundation for Credit Counseling. Most lenders like to see a history of money being borrowed and paid back on time before they give you credit.

If student loans are your primary source of open credit, once you close your student loan accounts, you could lose a significant factor driving your credit history. And don’t forget that “a shorter history typically means a lower credit score,” according to the foundation.

Con: You Could Miss Out on Other Financial Goals

Repaying your student loans shouldn’t be your only financial goal (and it probably isn’t). You might also be thinking about saving for a car or a house, or investing for retirement. If you focus solely on repaying your student loans, you might miss opportunities to save for retirement, children, or a down payment on a house.

It’s also important to have an emergency fund—typically at least three to six months’ worth of living expenses saved up—in case you lose your job or get hit with an unexpected big bill.

Rather than using a tax refund or bonus to make an early payment on your student loans, you might want to put that money toward an emergency fund first.

FYI: Most Student Loans Survive Bankruptcy

Let’s say you’re making headway on student loan payments but face a crisis and consider filing for bankruptcy, thinking that’s one way to get your loans off your back. But student loans aren’t typically discharged if you file for bankruptcy.

In fact, to attempt to have a student loan discharged in bankruptcy, the borrower must file for an “adversary proceeding,” requesting that a bankruptcy court find that repayment would impose an undue hardship.

Bankruptcy courts do not use a single test to determine “undue hardship.” According to the U.S. Department of Education’s Financial Student Aid office, bankruptcy courts typically look at three factors (part of the “Brunner Test”) to determine if requiring you to repay your loans would cause an undue hardship:

•  If you are forced to repay the loan, you would not be able to maintain a minimal standard of living.
•  There is evidence that this hardship will continue for a significant portion of the loan repayment period.
•  You made good-faith efforts to repay the loan before filing bankruptcy.

In an adversary proceeding, borrowers must present evidence showing that they meet the undue hardship standards while lenders present opposing evidence. The proceeding can be invasive and expensive for borrowers and rarely results in discharge of all debt.

Bankruptcy judges have a lot of discretion in determining eligibility. In many cases, borrowers will be required to repay their loans but with different terms, such as a lower interest rate.

The Takeaway

Is paying off student loans early always the best move? Not necessarily, if it gets in the way of paying down high-interest debt, creating an emergency fund, or saving for a down payment or retirement.

Instead of paying off student loans early or looking for an escape route altogether, it might make more sense to refinance with a private lender like SoFi. If you qualify, refinancing your private and/or federal student loans can change the terms and the interest rate.

Refinancing could potentially get you a lower monthly payment and a more flexible student loan repayment plan. (Know that if you refinance a federal loan to a private loan, you’ll forfeit your right to federal loan benefits like income-based repayment. You may pay more interest over the life of the loan if you refinance with an extended term.)

Refinancing results in one loan with a single interest rate and one monthly payment.

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.

Binance (BNB) is a cryptocurrency token that was created to be used as a medium of exchange on Binance, one of the world’s largest cryptocurrency exchanges.

Traders who hold BNB tokens get discounts when using BNB to pay for trading fees on Binance. As of 2020, BNB users received a 6.25% rebate on trading fees. Binance Coin also serves as the native token for Binance’s decentralized exchange (DEX).

What Is Binance?

Binance is one of the world’s biggest cryptocurrency exchanges. Based in Malta, the exchange was founded in 2017 and follows all standard cryptocurrency regulations. Binance offers a variety of features, including:

•  Crypto-to-crypto trading of many different currency pairs (over 150)
•  Fiat-to-crypto trading
•  The ability to buy crypto with a credit card
•  Futures and leveraged trading for advanced traders
•  The option to choose between a basic interface for beginners or an advanced interface for experienced traders

Binance has one the highest liquidity of any crypto exchange in the world, according to data from CoinMarketCap. That means more crypto can trade hands on the exchange than anywhere else during a given period of time, making Binance a desirable place for day traders who thrive on liquid assets, which makes it easier and faster to execute trades. The exchange also has low fees, so users can make more trades for less cost.

Binance derives its name from a combination of the words “finance” and “binary.” The exchange claims to have high levels of security and is capable of processing about 1.4 million orders each second.

Eleven days before Binance went live, BNB was created through an initial coin offering. While the coin was first issued as an ERC-20 token running on the Ethereum network, these same coins were later swapped with BEP2 BNB coins in April 2019 when the Binance Chain mainnet launched (Binance’s own blockchain network). BNB can be used as “gas” payments–fees paid for computing power–to fuel transactions on the DEX.

Is Binance Coin Worth Buying?

This question might not have a single, objective answer. It depends on the individual. Someone who wants to use Binance’s decentralized exchange (DEX) might think BNB crypto is worth buying. The Binance DEX first went live in April 2019.

Traders who make a lot of trades on Binance on a regular basis might benefit from the discounts that BNB provides. They could wind up saving them a lot of money.

And finally, some cryptocurrency traders might speculate, as opposed to invest, that BNB has a promising future. These people might see BNB as a good coin to hold for some time, in hopes that the price will continue to rise. BNB crypto has risen over 34,000% since inception and over 41,000% since its all-time low.

What is Binance Coin Used For?

As far as different types of cryptocurrencies go, Binance Coin might be one of the most unique. As mentioned, BNB serves two main purposes:

•  To provide discounts to traders who use BNB on Binance, and
•  To function as “gas” for transactions on Binance’s decentralized exchange (DEX).

When someone places a trade on Binance, they are charged a 0.5% trading fee. This fee can either be paid in the form of the cryptocurrency being traded at the time or in the form of Binance Coin. When paid using BNB, a discount is applied.

Beyond that, altcoins like Binance Coin are also used for speculative purposes. Traders buy coins at a low price with the hopes of selling them later at a higher price to make a profit.

How to Buy BNB

Binance Coin can be purchased on the Binance crypto exchange. There are three primary trading pairs:

•  BNB/USDT (Binance-Tether stablecoin)
•  BNB/BTC (Binance-Bitcoin)
•  BNB/BUSD (Binance-U.S. dollar)

While BNB crypto was created by and for Binance, traders can buy BNB tokens on other exchanges as well. As of the time of writing, BNB can be traded on dozens of different exchanges.

Users who already hold some Bitcoin might find it easiest to deposit Bitcoin to an exchange that trades the BNB/BTC pair and then trade their bitcoin for BNB. Those who don’t hold Bitcoin could consider creating an account on Binance and funding it using either a stablecoin like Tether or U.S. dollars directly.

Binance Coin Price

At the time of writing, the BNB price was $40.39 or 0.001076 Bitcoin.

In July 2017, when the coin was first created, the price was closer to $0.10, with the all-time low being $0.096. The all-time high, as of January 2021, was $45.16, reached on Jan. 10, 2021.

BNB is currently ranked as the eleventh largest cryptocurrency, according to CoinMarketCap data, with a market cap of over $5.7 billion. The 24-hour trading volume on Jan. 14, 2021 was $548.3 million.

BNB crypto has a circulating supply of 142,406,561 BNB and a maximum supply of 174,152,673 coins.

Is Binance Better Than Coinbase?

Some users might compare Binance to other prominent exchanges, including Coinbase. The comparison is, however, largely subjective. For those new to crypto seeking ease-of-use and simplicity, Coinbase might be a good option. They allow for purchases and sales of many of the top cryptocurrencies.

Coinbase also has a cold storage, multi-signature feature called “vaults.” Vaults provide a more secure way to hold crypto for the long-term. To access funds held in a vault, a user must verify a withdrawal request from two different email addresses and wait through a 48-hour processing period.

On the other hand, for more active traders seeking a wider variety of tokens to choose from and higher liquidity, Binance could be preferable. At Binance, investors and traders also have the option to use a more advanced interface with detailed charts.

Is Crypto Safe On Binance?

The answer to this question depends on an individual’s definition of “safe” and how much money is in question.

Generally speaking, it might be safe to keep small amounts of crypto on a secure exchange like Binance for a short period of time. Binance boasts some of the strongest security in the industry. For larger balances to be held over longer time-frames, however, holding coins on any exchange is widely regarded as not being very secure.

Over the years, many exchanges have been hacked. This creates the most obvious security risk involved with “hot wallets,” or cryptocurrency wallets that are actively online at all times. Another risk that comes from exchanges is theft. Employees of the company could conspire to steal user funds and blame the event on outside malicious actors.

The Takeaway

Binance (BNB) coins were created to be used on the Binance cryptocurrency exchange. BNB users on BNB can get trading discounts. However, BNB has become more popular in recent years, experiencing a tremendous increase in price, and now, cryptocurrency traders and investors can find it on many other exchanges.

With SoFi Invest®, investors can buy cryptocurrencies like Bitcoin, Ethereum and Litecoin, while following the prices of others like XRP and BNB. They can also invest in stocks or exchange-traded funds (ETFs).

Crypto: Bitcoin and other cryptocurrencies aren’t endorsed or guaranteed by any government, are volatile, and involve a high degree of risk. Consumer protection and securities laws don’t regulate cryptocurrencies to the same degree as traditional brokerage and investment products. Research and knowledge are essential prerequisites before engaging with any cryptocurrency. US regulators, including FINRA , the SEC , and the CFPB , have issued public advisories concerning digital asset risk. Cryptocurrency purchases should not be made with funds drawn from financial products including student loans, personal loans, mortgage refinancing, savings, retirement funds or traditional investments. Limitations apply to trading certain crypto assets and may not be available to residents of all states.

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