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They make you laugh, and they make you cry. You worry about them when they’re out of sight, and even when they’re in plain view. You desperately hope they grow up strong, healthy, and ready to tackle life’s challenges.

After all, they are your pride and joy. Children make parents do some pretty selfless things, and one of the more beneficial thing you could do is plan for their financial future. But how do you do that with everything else you have to worry about in your life?

Fortunately, there are some fairly simple financial tools to help you meet your goals, whether you’re saving for a college education, a once-in-a-lifetime summer camp, or a down payment for their first home.

Depending on your situation, some options might be obvious good choices, while others come with caveats you might want to know about before investing.

With a little background knowledge, you could find an investment plan for your child’s future. An investment for a child could also provide a great education in financial responsibility.

Let’s look at some of the choices.

Custodial Accounts

A simple custodial savings account in your child’s name could be a good start as an investment for a child. When a baby is born, everybody from Grandma to Uncle Joe may want to contribute to the account. Unlike college savings plans , which require the funds be used for education, custodial accounts offer a lot of flexibility.

Savings can be used for almost anything—a European vacation, car for college, pre-college expenses—as long as it is for the benefit of the child. Just remember, any money in an investment account for a child is irrevocably in their name and for their benefit . You can’t take it back.

A custodial account could be a great vehicle for children to learn how to invest. In fact, if you’re wondering how to buy stock for a child to help them learn about money, a custodial account might be a great investment account for a child. You could pick a company they would be excited to follow, like Disney or McDonald’s, and let them watch over time.

Custodial accounts, also known as Uniform Gift to Minors Act (UGMA) and Uniform Transfers to Minors
Act (UTMA) accounts, don’t have a limit to how much you can invest. While contributions aren’t tax-deductible, there may be a tax advantage because it’s in the child’s name.

But that advantage might quickly turn into a disadvantage if unearned income from dividends, gains, or interest reaches a certain amount. Then the account is subject to the Kiddie Tax , which Congress enacted to prevent abuse of the financial vehicle by parents. With a custodial account, you can gift up to $15,000 in 2019 for each child; double that if you’re married and filing jointly. Above that you’re liable for the federal gift tax .

While you can use the money in the account to pay for various things your child needs, one caveat is that the child gets full control when they reach the age of majority, usually 18 or 21 years of age.

Custodial accounts might be good for modest, defined goals, such as paying for education, orthodontia, or academic camps, for example. If there is a sizable sum of money in the account, consider whether you want to transfer that amount, unregulated, to someone of such a young age. In that situation, one idea might be to have a lawyer draw up a trust to set up specific parameters you can live with.

If the thought of giving up control is too much for you, you could set up a guardian account in your name so you can decide how the money is spent. Essentially, it’s a way to earmark funds to give to your child down the road.

College Savings Accounts

A Coverdell education savings account or a 529 savings plan could be a worthy option for a child. They offer two ways to pay for educational costs, whether college or K–12 schooling. The Coverdell allows you to contribute up to $2,000 a year for education expenses. While contributions are not tax deductible, withdrawals are tax-free.

Coverdells have two areas where they might have a slight advantage over 529 accounts: You can select from a wide range of investments and the money you withdraw can be used for any qualifying education expenses, such as books, tutors, and equipment.

The 529 college savings plan tends to be a popular way to save for college. You can make larger contributions than you can with a Coverdell account, and any withdrawals for qualified education purposes are tax-free.

As of 2018, Congress allows withdrawals of up to $10,000 for K–12 tuition. Not all plans or states that sponsor 529 plans are in line with the new rules , so you might want to ask a tax expert or the manager of the plan about your options.

IRAs

Custodial (Traditional)

Custodial IRAs are another investment option for a child. They work just like a traditional IRA, so when your child has earned income from a first job, babysitting, or other work, they (or you) can contribute up to $5,500 annually . Starting early might be a way to teach them about the power of financial stewardship.

With a traditional custodial IRA, your child will pay ordinary income tax when they withdraw the money in retirement, and they must begin doing so at age 70½ . Contributions are also tax deductible, which probably won’t benefit them if their income is still low or they don’t meet the $12,000 standard deduction threshold requiring them to pay federal income tax.

Both traditional and Roth custodial IRAs convey to the child at the age of majority (18 to 20 years of age, depending on the state).

Roth

Just like traditional IRAs, contributions to a Roth IRA also grow tax-free over the years and have the same contribution limits—however, the Roth could be an investment possibility for your child if you value flexibility. Whether you’re saving for college or retirement, it might offer more advantages for your child over the decades than a traditional IRA.

While you still pay tax on each contribution, all withdrawals are tax-free , which could be a big benefit to your child, assuming they’ll be in a higher tax bracket at retirement. There is no required minimum distribution when they must start withdrawing.

One of the biggest advantages to a Roth is that your child could use the contributions for any reason besides retirement. But two special perks of the Roth include the ability to pay for certain higher education expenses and withdraw up to $10,000 to buy their first home. On the other hand, if withdrawn before retirement, earnings can be taxed and your child could be penalized in addition.

Growing Wealth for Your Children

When it’s time to get serious about saving—for college, retirement, or something else—you could set up an account with SoFi Invest®. It’s easy to open an investment account with SoFi, and you’ll have access to complimentary financial advisors and other benefits to help your family save for a bright future.

Finding the right investment plan for a child doesn’t have to be a chore. Start building for your children’s futures and open a SoFi Invest account today.

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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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The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . The umbrella term “SoFi Invest” refers to the three investment and trading platforms operated by Social Finance, LLC and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
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Illness and injury are an unfortunate (and scary!) fact of life, but once you’re patched up after surgery or a lengthy hospital stay, you want to focus on your recovery, not worrying about how on Earth you’re going to pay off any medical debt.

Medical debt can be overwhelming, and according to a 2018 study published by Health Affairs, it’s not just older Americans who are managing debt from medical bills.

It is actually Millennials who are racking up the most medical debt—11% of all people who had a medical bill go to collections in 2016 were just 27 years old. So how can you pay off medical bill debt and hopefully stay out of collections? There are several different options available that may help you manage your medical debt with minimal pain, so you can focus on feeling better.

Before we dive in, we should mention we realize the nature of medical debt is often very sensitive. These strategies are merely a collection of tips and commonplace ideas found through our research on the internet.

This article shouldn’t be considered advice in any sense; every person’s situation is unique, which means it’s always a good idea to check in with a professional before taking action yourself. With that said, let’s dive into what we found.

Medical Debt Payment Plans

Medical care can be expensive, especially if you’re facing a chronic condition with ongoing costs or a major surgery or hospital stay. One plan of action you might consider is contacting your medical provider to see if they offer payment plans.

Some providers offer payment plans that allow you to make payments on your medical bill over time, paying it off in installments. Talking to your healthcare provider or a hospital billing department can be a great first step to figuring out if there is a payment plan you can take advantage of when it comes to medical bill debt.

Of course, one major downside to payment plans is that not all medical providers or medical offices offer payment plans and may require full payment when services are rendered.

Likewise, some medical providers may only let you set up a payment plan in advance, which means that a payment plan might not be a solution for any medical debt you’ve already accrued. And of course, some payment plans may still be too prohibitively expensive to pay every month, even if you’re paying over time.

Using A Medical Credit Card

If you’re looking at a medical bill that you can’t pay out of pocket, you may be tempted to reach for a credit card. Before you hand over whatever card is in your wallet, you might want to consider looking into credit cards specifically designed to be used to pay for medical care.

Medical credit cards sometimes offer low or no interest for a predetermined period of time, which means that you may be able to pay your medical bill with the credit card and then pay off the card before it accrues interest.

But be careful—if you can’t pay off the credit card before the interest-free period is over, you might face high-interest charges, which could actually end up making your medical bills more expensive.

Consider pulling out the calculator and doing some math to see if you can afford to pay off your medical bills during the interest-free period before you decide to put the costs on a medical credit card. This can help you determine how useful a medical credit card might be in your specific situation.

Negotiating Directly With The Hospital

If you’re facing a big bill from the hospital, one thing to consider is reaching out directly to the hospital billing department to see if you can negotiate the total amount of your medical bill.

While it’s not precisely like haggling for a used car, most hospitals have a financial department that might be able to help you determine if you qualify for any cost deductions or discounts.

One other thing to keep in mind is that cash might just still be king. Some hospitals and medical providers might give you a discount just for paying in cash. This can be a good option if you can afford to make the payments in one lump sum and want to avoid any extra fees.

Taking Out A Personal Loan

Taking out a personal loan might also be a solution to managing medical debt. While personal loans are often overlooked, they may offer more benefits than credit cards, like lower interest rates and more flexibility.

In order to use a personal loan to pay off medical bill debt, you’d borrow money from a lender which you’d use to pay your medical debt, then you’d pay that money back to the lender over time in regular monthly payments. Like other types of loans and financing, lenders generally look at your personal financial history and ability to repay (among other factors) when deciding if you qualify for a personal loan and determining your interest rate.

Unlike other types of financing, however, a personal loan can be used for almost everything—from paying off a hospital bill to paying for your groceries while you’re out of work due to an injury or illness.

If you’re wondering how to clear medical debt from multiple sources, a personal loan might help. You may be able to use a personal loan to consolidate numerous medical debts into one monthly payment. This could work by taking out a medical loan and using it to consolidate different medical bills, which allows you to focus on paying off just one debt instead of managing multiple varying deadlines every month.

When searching for personal loans to pay for medical debt, be sure to read the fine print. Some providers may charge origination fees to process your loan, or prepayment fees if you pay off your loan early.

Also be wary if interest charges in your search, as high-interest charges could add more money paid over the life of the loan.

One other potential benefit of using personal loans is that the application process is relatively simple and you can usually find out your eligibility pretty quickly. With SoFi personal loans, it just takes a few minutes to check your rate. And with SoFi, there are no fees required.

There’s no way around it—medical bills can be hard to deal with. But making a plan for repayment you help you get on your way to financial and physical wellness.

Learn more about how a personal loan from SoFi can help with medical costs.

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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.

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

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Asked to picture the typical person struggling with student debt, you’d probably imagine a new-ish college graduate or working professional—maybe someone who’s trying to buy a home or who plans to start a family.

But according to recent college debt statistics , that person might just as likely be a parent or grandparent who’s trying to pay off a home or plan for retirement.

Turns out, student debt isn’t just for kids anymore. Even baby boomers, who are now in their mid-50s to early-70s are pressing pause on their dreams because they’re burdened with loans they haven’t paid off, a loan amount that has reached $16,100 for the typical Parent PLUS borrower .

Yes, millennials had their work cut out for them between high tuition rates and lower wages than they might have expected when they graduate.

But their parents and grandparents could be in it with them—sharing at least part of the financial burden. Even those who never borrowed a dime for their own education may have taken out loans or agreed to co-sign for their kids. Now they’re facing some of the same repayment problems—but with less time to bounce back financially.

Student Debt by Generation

According to the Consumer Financial Protection Bureau (CFPB), the number of consumers age 60 and older with student loan debt quadrupled between 2005 and 2015—from about 700,000 to 2.8 million. And the average amount they owe also dramatically increased—from $12,100 to $23,500.

Although most student loan borrowers are still young adults between the ages of 18 and 39, the CFPB says, older consumers are the fastest-growing age segment of the student loan market. In that same 10-year period, 2005 to 2015, the share of borrowers 60 and older increased from 2.7% to 6.4%.

When surveyed, the vast majority of older borrowers (73%) said their student debt was for a child or grandchild’s education. Twenty-seven percent said their loans were for their own education or for their spouse. And the CFPB estimates that 57% of all co-signers are age 55 and older.

Gen Xers, who are now in their late-30s and early-50s, are in a similar situation—except they often have more of their own student debt as well.

In the mid 1970s, boomers started using a combination of grants and student loans, which boosted college attendance, but cracks began to show as student loan debt skyrocketed. In 1986 , more than one quarter of student borrowers owed over $10,000; adjusting for inflation, that’s equivalent to over $21,000 today.

Now, they’re paying for their kids’ education—by taking out loans or contributing less to their retirement savings. Or both. The CFPB found that borrowers nearing retirement (ages 50 to 59) had a lower median amount in their retirement accounts than consumers without student loan debt.

Though financial advisors repeatedly warn parents not to short themselves while helping their kids, a report by the Association of Young Americans (AYA) and the AARP found student loan debt was holding up retirement savings for around a third of Gen X and boomer respondents.

About a quarter of Gen X parents and a third of boomer parents said college debt prevented or delayed them from buying a home. And about a quarter of Gen Xers and boomers said their debt burden was an obstacle in getting the health care they need.

Some overwhelmed borrowers put at least part of the blame on federal parent PLUS loans, which they say are too easy to get. (Parents with a qualified dependent undergraduate student need only prove they don’t have an “adverse credit history”) On average, parents now borrow nearly $15,880 per year in parent PLUS loans.

In March 2018, Federal Reserve Chairman Jerome Powell said that though he generally supports the idea of a vibrant education loan climate, borrowers need to be informed of the risks they’re taking. “You do stand to see longer-term negative effects on people who can’t pay off their student loans,” he said. “It hurts their credit rating, it impacts the entire half of their economic life.”

In general, a college degree is, of course, a worthwhile investment. The unemployment rate for those age 25 and older with a bachelor’s degree or more education was 2.1% in April 2018.

For workers age 25 and older who graduated from high school but did not attend college, the unemployment rate was 4.3%. And those workers are earning more, on average. According to the Pew Research Center , those ages 25 to 39 with at least a bachelor’s degree have, on average, higher family incomes—the individual’s income plus that of his or her spouse or partner—than those in that age range lacking a bachelor’s degree.

Next Steps Toward Tackling Debt

While policymakers look for broader solutions, borrowers are finding their own. For many, that means getting their payments under control with student loan refinancing.

If you have a good job and have maintained a solid credit history, refinancing your student loans may help in a few ways.

If you can get a lower interest rate, you’ll lower the total amount you’ll pay over time—depending on the loan term you choose, of course. And it can make paying off your debt much easier if you have only one payment to make every month.

If you’re a borrower who proudly supported your child or grandchild through college but ended up with more debt than expected, refinancing may be the answer. And if you’re a new-ish borrower who can’t meet your financial goals because your student loans are eating your income, a different payment plan may help you achieve those milestones. Just keep in mind that if you refinance federal student loans with a private lender, you lose some potential federal benefits, such as income-based repayment plans and forbearance options.

Either way, you don’t have to be stuck. And you don’t have to be a college loan statistic.

See if refinancing student loans with SoFi may be an option for you.

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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.

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 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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Buying a house is quite possibly the largest investment that most people will ever make. And when you consider that the median price of a new home in the U.S. is $342,000 , the thought of actually hitting that milestone may seem out of reach for some. It is also one of the most confusing, especially for first-timers. Homebuyers attempt to master a whole slew of new vocabulary terms, from “contingencies” to “escrow” to “fixed versus adjustable rate mortgages.”

One of the most mystifying terms is PMI, which stands for “private mortgage insurance.” When you hear “insurance,” you may think it’s there to protect you in case something goes wrong with your home loan.

Actually, PMI is there to protect the lender that’s likely offering you a conventional mortgage whether it be a refinance or a purchase loan.

If you are making a down payment of less than 20% of the home’s value, the lender will typically require PMI on the mortgage from a private insurance company. Why would you pay for insurance that benefits your lender and not you? And should you take on this expense? Read on to find out how PMI works.

Why PMI?

The purpose of PMI is to make low down payment mortgages less risky for the lender so they in turn can offer you a loan if you don’t have sufficient funds for a 20% down. If you have PMI and default on your home loan, the insurer will be responsible for paying a portion of the loan balance, so that the lender isn’t on the hook for the entire amount.

When a lender is considering whether to extend a mortgage loan, and on what terms, they look at something called the loan-to-value ratio, or LTV. This is equal to the mortgage balance divided by the value of the property.

The more money you have for a down payment, the less you need to take out a loan for, and therefore the lower your LTV ratio. Whether you’re buying a home or refinancing, the higher your LTV ratio, the more of a gamble you’re likely to appear to lenders. And they’ll usually want you to have PMI when your LTV is less than 80%, which is what happens when you put less than 20% down.

Who Takes Out PMI?

Private mortgage insurance has been around for more than 60 years . Over that time period, more than 30 million families , including 1 million in 2017, relied on PMI in order to buy or refinance a mortgage. A significant amount of those who did were low-income or buying their first homes.

Specifically, more than 40% of borrowers who have taken out PMI earned less than $75,000 a year, and 56% were first-time homebuyers. In 2017, the top five states for homeowners with PMI were Texas, California, Florida, Illinois, and Michigan.

PMI generally costs between 0.55%-2.25% of the mortgage amount annually, but premium costs can vary depending upon the loan scenario.

How to Pay PMI

There are a few different options for paying PMI, which depend on your preferences. Most borrowers pay PMI as a monthly premium that is added on to the mortgage payment. You can see what the premium is in both the loan estimate you get when you apply for the mortgage and again in your closing disclosure.

The PMI factor can change between these two estimates because the appraisal valuation which drives the final LTV (loan to value) may be received by the lender after the Loan Estimate is generated. Another option is to pay your PMI all at once in a single sum when you close on the house. Or you can ask the lender if they can cover some or all of the PMI cost through lender rebate money.

Generally, in this scenario a borrower accepts a higher rate and the rebate money in that higher rate comes back to the borrower as a credit and the borrower can use that lender credit to cover some or all of the PMI cost. Ask a lender to generate a quote with different PMI payment options so you can compare and choose the best plan for your budget.

Keep in mind that some PMI policies are refundable and some are non-refundable. A third scenario is to pay some of the PMI up front and get the rest added on to your mortgage payment each month.

If you’re confused about the different policies and payment options, ask the lender’s representative to explain the options to you and ask for a quote on how much you will owe in different scenarios. If you are purchasing a home you may be receiving a seller credit towards your closing costs, this can be another way to cover the PMI in one lump sum and not have ongoing monthly payments.

How to Get Rid of PMI

For a principal residence or second home, the borrower can initiate cancellation of PMI under the following scenario: The LTV ratio must be:

•  75% or less, if the seasoning of the mortgage loan is between two and five years.

•  80% or less, if the seasoning of the mortgage loan is greater than five years.

If Fannie Mae’s minimum two-year seasoning requirement is waived because the property improvements made by the borrower increased the property value, the LTV ratio must be 80% or less.

For automatic termination of PMI the guidelines are:

•  Loan is closed on or after July 29, 1999 and is secured by a one-unit principal residence or second home.

•  on the applicable termination date, provided the borrower’s payments are current on the termination date.

The applicable termination date is:

•  the date the principal balance of the mortgage loan is first scheduled to reach 78% of the original value of the property, or

•  the first day of the month following the date the mid-point of the mortgage loan amortization period is reached, if the scheduled LTV ratio for the mortgage loan does not reach 78% before the mid-point.

How to Avoid PMI

PMI can come in handy for people who want to become homeowners and otherwise wouldn’t qualify for a mortgage. However, the costs can add up, and unlike other types of insurance, you’re not gaining any protections yourself. Luckily, there are ways to avoid PMI altogether.

As stated above, lenders can cover the cost of PMI through lender credit. Lender credit can be generated by the borrower taking a higher rate in exchange for rebate money which is used to pay for some or all of the PMI cost. Whether or not this higher rate ends up saving you money vs paying a lower rate and monthly PMI depends on your unique situation.

An alternative is to take out a mortgage that is not a conventional loan, such as a Federal Housing Administration Loan . FHA loans require a government insurance (MIP) which usually runs with the life of the loan. FHA loans have an upfront premium as well as a monthly premium. Whether a conventional or government loan is the best fit for you depends on many factors , such as your credit history and the mortgage market.

The most surefire way to help avoid paying PMI is to save 20% down before you buy a house. Even if it might take you a bit longer to become a homeowner, consider whether it makes sense to rent until you can save up that magic number.

There are also some loan programs that do not require PMI. VA loans would be one loan program that does not require PMI and some lenders do not apply PMI requirements to their Jumbo loan products. It is good to note that SoFi offers as little as 10% down on their Jumbo purchase loans with no PMI.

If you’d like to put away more than you currently are, start by making a budget. Note down all the money coming in and going out every month, and see if there’s room to cut expenses so that you can save a bit more. Once you’ve freed up some cash, set up an automatic transfer from your savings to your checking account to make sure that money is set aside.

If you don’t have a lot of wiggle room as far as cutting spending, you may want to consider ways to increase your income. This can include asking for a raise, applying for a higher-paying job, or taking on a side hustle.

If you can save 20% down before applying for a mortgage and avoid PMI, you may save yourself a significant chunk of money for years to come. That said, only you can decide whether paying PMI is worth it in your particular situation and housing market.

Looking Into a Mortgage with SoFi

With SoFi, you make your dream home a reality with competitive rates, no hidden fees, and as little as 10%. When deciding on loan eligibility, SoFi, like other lenders, will consider your credit history, your income, your employment, and other factors. You can see if you pre-qualify in just two minutes online.

Explore a mortgage loan with SoFi.

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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.

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

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

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If you’ve ever asked yourself the question, “if you withdraw from college, can you go back?” the simple answer is yes. But whether you left due to financial problems, family responsibilities, or other reasons, returning to college can be challenging.

Here are some things to know about going back to college after dropping out and how to help make the process go smoothly.

Having Some Ideas About Your Major

Regardless of how long it’s been since you left school, you’ll have to make up for lost time. At the same time, you may have had experiences during your time away from school that helped you solidify what you want to do with your life and career.

As a result, it’s a good idea to think about choosing a major. Whether it’s a bachelor’s or master’s degree, or a certificate program, knowing what subject you want to study and to what extent will help you finish your schooling faster.

If you’re still not sure about what you want to pursue, you can take some time to explore your options. Consider auditing a course or two to get a better idea about what you enjoy, if your first day back is still months away. The key is to do your due diligence before you return to campus, so you don’t feel like you’re spinning your wheels when you get there.

Carefully Considering Which College to Attend

In some cases, it makes sense to return to the college you originally attended. But it may also be worth checking out other universities to see if you can save money on tuition, or have a better college experience.

There are a few things to consider when making this decision. For example, each college has its own criteria as to what’s considered a required course versus an elective course. If you attend a different college, you may have to retake certain required courses.

Also, in some situations, it may make sense to find a less expensive college. Comparing colleges in your area can help make sure you get a good education without overspending. This is especially important if you had to leave college due to financial difficulties.

Easing Into It

Returning to college after a hiatus is different than returning to school after summer vacation. It may take some time to adjust to your new schedule and study requirements, and it’s possible that you’ve forgotten even some basic knowledge that you’ll need to brush up on.

If you have a desire to make up for lost time, you may consider trying to finish your degree or certificate program as quickly as possible. But as with any other activity, you may end up burning out if you spread yourself too thin.

Maybe instead of taking on a full workload your first semester back, you can take the minimum number of credits you need to be a full-time student, or maybe just a class or two. It can’t hurt to give yourself some time to get back into the swing of things, both mentally and emotionally.

There’s no right way to do this, so do regular check-ins with yourself and your loved ones to make sure you have enough capacity to accomplish your goals.

Building a Support System

Figuring how to get back into school after dropping out can be a draining process, especially if you’ve been away for a while. Maybe you have a family now, or you’re quitting your job to focus on school full time.

Regardless of your situation, it’s good to have support in your decision to further your education. Consider looking into your college’s mental health and career centers for additional resources and support.

You can speak with your partner, friends or family members about your decision to return to college. Help them understand your reasons and goals, especially if returning to college affects them.

The sooner you start building a support system, the easier it will likely be to make returning to college a smooth process.

Securing Financing

Even if you pick a relatively inexpensive university, a college education isn’t cheap. In an ideal scenario, you’ll be able to avoid student loans altogether. Scholarships, grants, and a full-time job can help you get through school without needing to borrow money.

But, if you do need some help to bridge the gap, you can start by filling out the Free Application for Federal Student Aid (FAFSAⓇ) form to see what you qualify for federal student aid (which could include grants, loans, and work-study). If you have a solid credit history and a good income, among other financial factors, private student loans might score you a lower interest rate.

Figuring Out What to Do With Your Existing Student Loans

If you still have student loans from your first stint in college, you don’t necessarily need to continue paying them when you return. The U.S. Department of Education and many private student lenders may allow you to defer your student loan payments while you’re in school at least half-time.

Keep in mind, though, that deferring your payments won’t stop the interest from accruing. If you don’t make interest-only payments while you’re enrolled, the unpaid interest will capitalize when you leave school and increase your overall debt.

If you’re generally unhappy with your existing student loans, another action to consider might be refinancing your student loans, especially if you qualify for a lower interest rate than on your original loans. You could also potentially extend your repayment term, lowering your monthly payment amount if you need to free up some near-term cash (but you’d pay more in interest overall).

Alternatively, if you’re in a more stable financial position, you might qualify to secure a shorter loan term, which could help pay off your loan more quickly and, therefore, make fewer interest payments.

But it’s important to note here that refinancing with a private lender would render you ineligible for programs and repayment plans extended to federal student loan holders like deferment, forbearance, and income-driven repayment. So you may wish to weigh your options carefully before considering refinancing.

Going back to college after dropping out isn’t easy, but it can be a stepping stone to get to where you want to be in life. As you consider returning to college, create a plan and allow yourself time to adjust to college life.

Also, make sure you have a good plan for your existing student loans. Whether it’s refinancing them and requesting a deferment, you can always look for opportunities to save yourself money as you try to finish up your degree or certificate.

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