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Congratulations: You’re on your way to college. You can put all the standardized tests, the applications, and the rest of the stress behind you and embark on this new adventure. Education and independence await, but you have to prepare for it.

And that starts with packing. Which clothes, books, and artwork are coming with you? What do you need to go shopping for?

To help you prepare, follow this list of what every new student might need.

School Supplies

Don’t be fooled into thinking that the only necessary supplies are a laptop and phone. Additional supplies can help students manage their college courses.

Even though phones and laptops have built-in calendars, having a physical planner can be a good idea, as well. Writing information down can help you remember it better, and it can be less distracting having school information in a physical planner, away from all those social media apps.

When it comes to taking notes, some professors don’t want everyone on their computers during class, and some don’t mind. It’s a good idea to have a notebook for each class just in case, along with pens, pencils, and highlighters.

Make sure to check the specific course requirements, as well. You’ll likely need some textbooks (you may be able to pay for books with student loans, if you have taken any out). Also check the syllabus for each class. It should be available early enough to read through and see if the professor lists any required materials. If you’re taking a math class, for example, a specific type of calculator may be required.

(Tip: Since paying for college can be a stretch, look into renting books and equipment instead of buying them outright.)

Depending on how many books you have to lug around campus, you may want to invest in a new backpack or messenger-style bag. Some students like a small bag with roll-aboard-style wheels if they have to lug it long distances. The most suitable bag will likely depend on students’ schedule, how big their campus is, and how many classes they have in a row.

It might be good to wait to choose this item after you’ve selected your courses and can see what each day is going to require.

💡 Quick Tip: With benefits that help lower your monthly payment, there’s a lot to love about SoFi private student loans.

Shower Supplies

Students who choose to live in the dorms will need to bring shower supplies with them. Sharing a bathroom is going to be another adjustment when starting college. There are a few must-haves for a comfortable experience.

•  Shower shoes are one of these musts. A cheap pair of flip-flops will do the trick. These are shoes that are worn only while taking a shower. What’s the deal? They help to prevent athlete’s foot, a fungal infection that can result from public showers. Just make sure to rinse and dry off the shoes after each use.

•  A shower caddy is another essential. Most students will likely be walking from the dorm room to the shower, so they’ll have to bring all shower supplies with them. A portable container makes this much easier.

•  Shower supplies are a must, too. The caddy will have room for your shampoo, conditioner, body wash, and so on, and some of them also come with hangers, so they could potentially be hung up in the shower. In choosing a shower caddy, look for one that is waterproof and has holes in it so it doesn’t fill up with water.

•  Don’t forget the towels. At home, there’s always a stack of clean towels ready to be used. This won’t be the case in the dorms.

•  You might also want to have a robe that can be thrown on while walking from the dorm room to the bathroom and back.

Recommended: What Is College Like?

Wardrobe

This can be one of the most fun parts of packing: Thinking about what you’re going to wear. After all, it’s an opportunity to present your best self or a whole new you on campus.

You may have a stellar closet full of clothes you can’t wait to take with you. Or you may want to go shopping and take a break from the looks that you loved in high school. You’ll also have to consider the weather. If you grew up in Florida and are heading to Maine for freshman year, you are going to have to get gear that’ll keep you warm.

If you’re the sort of person who wants an entirely new wardrobe for college, it’s wise to learn how to save money on clothes, and uncover the joys of everything from couponing to hitting thrift stores.

Recommended: What Is the Average Cost of College Tuition

Don’t Forget Shoes

College campuses are much bigger than most high schools, so investing in a good pair of walking shoes is important. Classes may end up being a solid 15- to 20-minute walk away from each other.

It’ll take a toll on a student’s mood and physical comfort if they try to handle that walk in heels, unsupported sandals, or ill-fitting shoes.

Shoes take up a lot of space while packing, so trying to bring just the necessary pairs is wise. If your college is in a state that will experience cold or snowy winters, make sure to invest in some warm boots.

Recommended: Guide to Private Student Loans

Bedding and Room Necessities

What else do students need to bring to a college dorm? Most dorm rooms will come with a bed but not sheets. Pack a couple of sets of sheets and a nice comforter. Some college students also recommend bringing a mattress pad and backrest pillow because you may spend more time in that bed than expected. Not living on campus? If you’ll be staying off-campus, look for furnished apartments to minimize your costs.

One important note: It’s vital to look into the school’s list of restricted items so you know what you should not bring to college. The college may also list the furnishings that come with the room. Check out your school’s website first so you don’t buy something that’s already there.

It can also be helpful for students to contact their roommates ahead of time and see if they’re planning to bring anything that could be shared. That could be a move that helps make college more affordable.

It’s not a bad idea to pack on the light side; it can help you avoid overbuying and spending too much on things you don’t need. If you get there and need things, most items can be ordered online anyway.

Planning how to make the most of the small space provided in a college dorm is going to be great practice for when students are ready to move into apartments.

💡 Quick Tip: Parents and sponsors with strong credit and income may find much lower rates on no-fee private parent student loans than federal parent PLUS loans. Federal PLUS loans also come with an origination fee.

The Takeaway

The packing list has been made and the shopping trip planned, so what’s next? Paying for everything. There are many options for financing the entire college experience, and students can try to get help from more than one avenue if they need to.

Students seeking financial aid should look into scholarships and grants and then federal aid.

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

FAQ

What are the essential bedding items to bring to college?

Most dorm rooms provide a bed frame and mattress but not bedding. It’s recommended to bring two sets of sheets (often twin XL), a comforter, pillows, and a mattress pad for added comfort. A backrest pillow can also be useful for studying or relaxing on the bed.

How can students avoid bringing unnecessary items to college?

To prevent overpacking, students should consult their college’s list of provided items and prohibited belongings. Additionally, coordinating with roommates can help avoid duplicate items, and packing lightly allows for purchasing additional necessities after arrival if needed.

What is a practical approach to packing for college?

Adopting a minimalist approach by bringing only essential items can make the move-in process smoother. Since most items can be purchased or ordered online after arrival, starting with the basics and acquiring additional items as needed is often more manageable.

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

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

SoFi 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.

If the money in your bank account always seems to be low, you may need to review your personal finances on a more regular basis.

Keeping a close eye on your spending, saving, and investing can provide a more accurate picture of where your money is going. It could help you understand what you’re doing right and what you might want to change, and keep you on track with short- and long-term financial goals.

That doesn’t mean a full-on personal financial review every day. And some categories (spending vs. saving, for example) might require more attention than others. Here’s a breakdown of how often a review might make sense.

Ways to Review Your Personal Finances

1. Tracking Spending

If the money from your paycheck seems to magically disappear soon after it lands in your checking account, it’s likely because you don’t have any type of budget in place. That means you haven’t set any priorities for where the money should go or any guidelines to follow.

Before putting together a budget, it can help to track what you spend money on. That includes everything from rent to groceries to prescriptions and subscriptions. To simplify the process, you might use a budgeting app that syncs with your accounts and automatically tracks and categorizes your spending.

Once you see how much you spend and on what, you can use that information to set up a basic budget. During this time, you may want to keep checking your spending at least weekly, to see if your expectations were realistic and if you’re staying on target.

2. Reviewing Your Budget

When you’re trying to get your finances under control, you might decide to review your budget monthly to be sure you’re following through on the plan or if it needs adjusting. This can also help you avoid budgeting mistakes. But there may come a time when you feel as though you’ve got a solid, doable strategy, and you can cut back on how often you check your stats.

Some people do an annual budget review using information from the past year to adjust for the year ahead. This might be part of a larger financial evaluation that includes checking their credit report.

Others are more comfortable with quarterly or semi-annual checkups so they can nimbly make changes as new expenses and life changes come up. Decide what time frame works best for you.

Recommended: How to Manage Your Money

3. Monitoring Savings

It can be tough to stay motivated to reach a savings goal, whether it’s putting aside money for a vacation, building an emergency fund, investing for the future in a retirement fund, or all of the above.

Just as reviewing your spending regularly may help you stay on track, checking our savings monthly or quarterly can reinforce the effort. It can be satisfying and rewarding to watch your bank balance increase. You might also want to look into opening a high-yield savings account so that your savings can grow and earn even more for you.

4. Following Investments

How often you check your investments depends on your personal preferences and what you’re comfortable with.

If your money is in an IRA or 401(k), it’s meant for the long haul — a retirement that could be decades away. A semi-annual or annual check-in could be enough to spot any concerning trends.

If you have money invested for mid-term goals (say five to seven years away), you may want to check in more frequently, say quarterly. This gives you the opportunity to rebalance your portfolio, either by selling investments or redirecting future investments, if necessary to stay on target for your goals.

5. Attending to Taxes

It’s easy to put off thinking about income taxes until it’s time to file, but this is another slice of financial planning that can benefit from a little more evaluation. And if you wait until you’re filling out tax forms, you may miss out on some savings.

Taxpayers usually have until the April 15 filing deadline to make tax-deductible contributions to a traditional IRA or 401(k) for the prior tax year.

But many tax strategies must be implemented by the end of the calendar year to have an impact on federal taxes, so November can be a good time to take a look at charitable contributions, converting money from a traditional IRA to a Roth account, making health savings account contributions, and using the money left in health savings and flexible savings accounts.

6. Evaluating Goals

When it comes to goal-setting, it may help to think in terms of big goals and little goals.

Big goals might be things like sending your kids to college, buying a home, or retiring to a beach house. Smaller goals might include paying down credit card debt or taking a special vacation.

Both types of goals may require regular evaluations and financial checkups — to see if you’re on track and determine if it’s still something you want. After all, circumstances and personal priorities can change.

But the check-in schedule might be different for big goals (once or twice a year could be enough) and small goals (monthly, combined with your budget once-over, may be more appropriate).

Life events — a new job or job loss, a baby, a move — also may trigger the need to reevaluate some goals, big and small. And you might want to do a review of all your goals whenever you achieve something on your list. Rejoice and then refocus!

Wrapping It All Up

If you’re doing lots of small check-ins throughout the year, it might not seem necessary to do one big annual personal finance review.

But a yearly evaluation offers the opportunity to pull everything together — all those separate slices — to see what’s working and what isn’t. It also may be a good time to make any necessary updates to insurance policies and other documents and to gather up the paperwork you’ll need to file your taxes.

And if you do your review in November or December, you can make some financial resolutions to keep you motivated through the new year.

The Takeaway

The frequency of financial reviews depends on your individual circumstances and financial goals, but there are some general guidelines to keep in mind.

Once you set up a budget, consider reviewing it monthly (at least at the beginning) to track spending, ensure you’re sticking to your plan, and identify any areas for adjustment. If you’re trying to get your finances under control, however, a weekly review can be beneficial.

To make sure your savings and investments are on target, you might check in on your savings accounts and non-retirement investments quarterly, and retirement accounts at least annually.
It’s also wise to conduct an annual comprehensive review of your financial plan. This gives you a chance to examine if the way you’re managing your money suits your needs and goals, or if it’s time to make some changes and perhaps update, consolidate, and automate some facets of your finances, or open new investment or bank accounts.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

How do you evaluate your personal finances?

Evaluating personal finances involves assessing your income, expenses, debts, and savings. Start by tracking your monthly spending to identify areas of improvement. Next, calculate your net worth by subtracting liability (debts) from assets. You’ll also want to review your credit score and ensure you’re meeting financial goals like saving for emergencies or retirement. Regular financial check-ups can help you stay on track, make informed decisions, and adjust plans based on life changes or financial goals.

What is the 70/20/10 rule in personal finance?

The 70/20/10 rule suggests dividing your income into three parts: 70% for living expenses (both necessary and discretionary), 20% for savings and investments, and 10% for debt repayment and charitable donations. This rule helps ensure you cover essentials, build wealth, and manage debts while also giving back.

What Are the Four Pillars of Personal Finance?

The four pillars of personal finance are budgeting, saving, investing, and protection. Budgeting involves managing your income and expenses to live within your means. Saving is setting aside money for short- and long-term goals. Investing grows your wealth over time through stocks, bonds, and other assets. Protection includes insurance and emergency funds to safeguard against financial setbacks. Together, these pillars form a solid foundation for financial stability and security.

SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. The SoFi® Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

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.

We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Bank Fee Sheet for details at sofi.com/legal/banking-fees/.
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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.

SOBNK-Q225-088

Paying for college is one of the biggest expenses a parent plans for, and it can seem overwhelming. At times, you might find yourself saving up for your kid’s future education while also trying to save for your own retirement, fund a house down payment, and pay off your own debt.

With the average cost of college tuition and fees for the 2024-25 school year at $11,610 for public in-state students, $30,780 for public out-of-state students, and $43,350 for private school students, it’s no wonder parents are taking out loans to help pay for their child’s undergraduate education.

Parents can rely on both Parent PLUS Loans and private student loans to help pay for college. Keep reading to learn the differences between the two and how to determine which type of loan may be best for you.

What Are the Different Loans for College?

There are four types of federal Loans offered by the U.S. Department of Education:

•   Direct Subsidized Loans are loans offered directly to the student, where the interest on the loan is paid by the U.S. Department of Education while the student is in school and during a six-month grace period after graduation. Thus, they are subsidized.

•   Direct Unsubsidized Loans are also offered directly to the student, but the interest is not paid by the federal government and it accrues while the student is in school.

•   Direct PLUS Loans are loans for professional or graduate students, or for parents of undergraduate students.

•   Direct Consolidation Loans allow you to consolidate all federal loans into one loan with an interest rate that’s a weighted average of all your federal loans’ interest rates, rounded up to the nearest eighth of a percent.

The main difference between student loans offered to undergraduates and Direct PLUS Loans offered to parents is that certain Direct Loans (Direct Subsidized Loans) for undergraduates are awarded based on financial need, whereas PLUS Loans are not awarded based on financial need, but do require a credit check when applying.

In addition to federal loans, there are also private student loans available both for students and parents. Private student loans are loans from banks or private lenders, which set their own interest rates and terms.


💡 Quick Tip: Parents and sponsors with strong credit and income may find much lower rates on no required private parent student loans than Federal Parent PLUS Loans. Federal PLUS Loans also come with an origination fee.

What Can These Loans Be Used For?

When a student’s financial aid package and other sources of funding aren’t enough to cover the cost of college and other educational expenses, Parent PLUS Loans and private student loans can help fill in the gaps. They can be used to cover expenses like tuition, room and board, books, and other supplies related to the total cost of attendance.

While they can both be used to cover the same expenses, they each have different benefits and terms, so it’s worth considering your options as you determine how to pay for your child’s college education.

Parent PLUS Loans vs Private Student Loans Compared

Beyond the major difference that Parent PLUS Loans are federal student loans and private student loans are borrowed from individual lenders, there are other similarities and differences to consider.

Similarities

Here’s an overview of the major similarities between these two types of loans.

Primary Borrower

Both Parent PLUS Loans and private student loans can be borrowed by parents of undergraduate students to help them pay for their education. On both a Parent PLUS Loan and a private student loan borrowed by a parent, the parent will be considered the primary borrower on the loan.

Interest Accrual

While the application processes for these loans will be different, both loan types will accrue interest. The interest rates for Parent PLUS Loans are set annually by congress. Interest rates on private student loans are set by the lender based on factors including the applicant’s credit score, income, and financial history, among other factors.

Loan Disbursement

Regardless of loan type, most student loans are disbursed directly to the school where they pay for the cost of tuition and room and board. Any leftover money from Parent PLUS Loans is given to the parent, not the student.

Differences

Here’s an overview of the major differences between Parent PLUS Loans and private student loans.

Application Process

One of the major differences between these loans is the application process. Because Parent PLUS Loans are a type of federal student loan, students must first fill out the FAFSA®. Then, parents are able to apply for a Parent PLUS Loan through the Federal Student Aid website.

Private student loans are administered by private lenders. To apply for a private student loan, parents will need to review the application requirements at their chosen lender.

Recommended: FAFSA Guide

Interest Rate

While both PLUS Loans and private student loans will require a credit check during the application process, it will not impact the interest rate available for PLUS Loans. Applicants with a strong credit history could potentially qualify for a more competitive interest rate with a private student loan than with a Parent PLUS Loan, which, as mentioned, has an interest rate that is set annually by Congress.

Repayment Plans

Parent PLUS Loans are eligible for federal repayment plans. The repayment plan for a private student loan will be set by the lender.

Pros and Cons of Parent PLUS Loans

Parent PLUS Loans can help parents finance their child’s college education when other aid options fall short. However, it’s important to weigh the advantages and disadvantages before committing to this type of federal loan.

Pros of a Parent PLUS Loan

From high borrowing limits to flexible repayment options, these federal loans provide key advantages for parents who qualify. Pros of Parent PLUS Loans include:

•   High borrowing limit: Parents can borrow up to the full cost of attendance (minus other financial aid), making it easier to cover tuition, housing, and other college expenses.

•   Fixed interest rate: These loans come with a fixed interest rate set by the federal government, providing predictable monthly payments.

•   Flexible repayment options: Repayment plans, including Income-Contingent Repayment (ICR) when consolidated, can help make monthly payments more manageable.

•   Deferment while student is in school: Parents can defer loan payments while their child is enrolled at least half-time, easing financial pressure.

•   Federal loan protections: Parent PLUS Loans are eligible for certain federal protections, like deferment, forbearance, and potential loan forgiveness under specific programs.

Cons of a Parent PLUS Loan

While Parent PLUS Loans can help families bridge the financial gap in paying for college, they also come with several drawbacks that are important to consider. Cons of Parent PLUS Loans include:

•  Credit check required: Unlike most federal student loans, Parent PLUS Loans require a credit check, which may limit eligibility for some borrowers.

•  Higher interest rates and fees: These loans typically have higher interest rates and origination fees compared to other federal student loans.

•  Parents are solely responsible: The parent, not the student, is legally responsible for repaying the loan, which could impact the parent’s long-term financial goals.

•  Limited income-driven repayment options: Parent PLUS Loans don’t qualify for most income-driven repayment plans unless they are consolidated into a Direct Consolidation Loan.

•  No subsidized interest: Interest accrues from the time the loan is disbursed, even if payments are deferred while the student is in school.

Pros and Cons of Private Student Loans

Private student loans can be a helpful resource when federal aid and other funding sources fall short. However, it’s important to weigh both the benefits and drawbacks before deciding if a private loan is the right choice for your college financing needs.

Pros of Private Student Loans

Here are some potential benefits of private student loans to consider:

•  Higher borrowing limits: Private lenders may allow you to borrow up to the full cost of attendance, helping to bridge large funding gaps.

•  Competitive interest rates: Borrowers with strong credit — or a creditworthy cosigner — may qualify for lower interest rates than those offered by federal loans.

•  Flexible loan terms: Private lenders often provide a range of repayment terms, allowing you to choose a plan that fits your financial goals.

•  Fast approval process: Many private student loans offer quick application and approval timelines, which can be helpful for meeting urgent tuition deadlines.

•  Choice of fixed or variable rates: Borrowers can typically choose between fixed rates for stability or variable rates for potential savings if interest rates drop.

Cons of Private Student Loans

While private student loans can help fill funding gaps, they also come with potential drawbacks that are important to understand before borrowing. These include:

•  No federal protections: Private loans do not offer income-driven repayment plans, federal forbearance, or loan forgiveness programs.

•  Credit and cosigner requirements: Approval often depends on the borrower’s or cosigner’s credit history, which can be a barrier for some students.

•  Variable interest rates: Some loans come with variable interest rates that can increase over time, making payments less predictable.

•  Limited repayment flexibility: Repayment terms are set by the lender and may not offer as much flexibility if financial circumstances change.

•  Interest accrual during school: Unlike subsidized federal loans, interest on private student loans often begins accruing as soon as the funds are disbursed.

The chart below illustrates some more general comparisons between Parent PLUS Loans and private parent student loans:

The Takeaway

Choosing between Parent PLUS Loans and private parent student loans depends on your financial situation and priorities. Parent PLUS Loans, as federal loans, offer fixed interest rates and access to federal repayment plans, including options for deferment and forbearance. However, they come with origination fees and may have higher interest rates compared to some private loans.

On the other hand, private parent student loans, offered by private lenders, may provide lower interest rates for borrowers with strong credit profiles and often have no origination fees. Nevertheless, they lack the flexible repayment options and protections associated with federal loans.

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

FAQ

Can Parent PLUS Loans be forgiven?

Parent PLUS Loans can be forgiven through certain federal programs, such as Public Service Loan Forgiveness (PSLF), but only after the loans are consolidated into a Direct Consolidation Loan. Eligibility requires meeting specific criteria, including working for a qualifying employer and making 120 qualifying payments under an eligible repayment plan.

Can a student pay off a Parent PLUS Loan?

Yes, a student can help pay off a Parent PLUS Loan, even though the parent is legally responsible for repayment. Families can arrange informal agreements where the student makes payments directly to the loan servicer or reimburses the parent, but the loan remains in the parent’s name and credit history.

Is a Parent PLUS Loan considered a federal student loan?

Yes, a Parent PLUS Loan is considered a federal student loan. It is offered through the U.S. Department of Education to help parents pay for their child’s college education. Unlike federal student loans for students, Parent PLUS Loans require a credit check and are solely the responsibility of the parent borrower.

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

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

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

SOISL-Q225-049

You’ve likely heard about the “one percenters” — those people whose net worth is among the top 1% in the nation. Just how wealthy are these individuals? To be part of the top 1% in the U.S., your net worth needs to be at least $11.6 million. If you’re looking strictly at income percentile, the threshold for joining the top 1% of earners in the U.S. stands at $787,712.

If you are curious about what it takes to be among the 1% or have your sights firmly set on joining their ranks, read on. Here’s a closer look at how the wealthiest people in America got there, plus some of their most effective strategies for financial success.

What Does it Mean to be in the Top 1%?

Many people might think “top 1%” and immediately imagine a CEO whose salary is in the tens of millions. But the term “top 1%” is often used to refer to net worth, rather than income, which means one percenters aren’t necessarily the people who earn the most.

Net worth refers to the value of the assets a person owns (which includes balances in bank accounts, the value of securities such as stocks or bonds, real property value, the market value of automobiles, etc), minus their liabilities (or debt, like mortgages, loans, credit card balances, they owe).

A deeper view of the top 1% indicates that this wealth accumulation is spurred by more than one source and includes income, investments, tax breaks that can help the wealthiest keep more of their money, property, and more. All of these help make up the resources a household or individual has socked away as net worth.

Recommended: What Is Discretionary Income?

The Income and Savings of the 1%

Having a high net worth isn’t just a matter of earning more. It can also mean saving more. While the average savings rate in the U.S. was just 4% of income in 2024, the average saving rate for the top 1% was a whopping 38%.

Of course, those who are earning more can afford to save more, since less of their income is taken up by housing, transportation, food, and other necessities. However, the savings rate of the top 1% shows that savings habits — and not just income — have a big impact on wealth. A high savings rate is one reason why the rich are so rich.

To build wealth over time, financial advisors generally recommend saving at least 20% of your income. This includes putting 15% of pretax income into retirement savings (including any employer match) and 5% into a shorter-term savings vehicle like a high-yield savings account.

Is There a Formula for Becoming Part of the 1%?

There’s no one formula for joining the 1%, but several factors appear to play a role in the rise of many one-percenters. These include:

•   Saving. As mentioned above, savings rates are a key difference between the one percenters and everyone else. If you aren’t contributing the max amount to your 401(k), consider gradually increasing your contributions. You also want to be sure you take full advantage of any employer matching contributions — this is essentially “free money” and can help you build your net worth faster.

•   Starting early. “The sooner you can start investing, the quicker you can take advantage of compound returns,” says Brian Walsh, CFP® and Head of Advice & Planning at SoFi. “Compounding helps you to earn returns on your returns, which can help your earnings grow exponentially over time.”

•   Income consistency and growth. The more you earn and the more that grows over time, the more likely your household will be to enter the top 1% of wage earnings. There are some in-demand careers that pay huge salaries. But regardless of your particular job, staying consistently employed and saving is a path to building wealth, versus leaving the work force or deciding to forego savings for a few years to, say, travel more.

•   Frugality. You may have heard that Warren Buffett wears outdated suits and lives in a house he paid $31,500 for in 1958. He’s worth approximately $158.4 billion. He also buys reduced-price cars, doesn’t spend big on expensive hobbies and he even clips coupons. Not all 1% are spending lavishly on yachts and third and fourth homes. If you want to be a part of the 1% and you didn’t invent the best thing since sliced bread, it may be helpful to stay motivated to save money vs. overspending.

•   Family history/luck. Having a head start can certainly help. However, research indicates that 79% of 1%-ers are self-made. Finding the right solution for a big problem at the right moment can lead to a big windfall in a new company. In other words, starting the next Facebook or Amazon takes a combination of skill and luck.

Recommended: How to Stop Overspending

Moving Towards the 1%

Thomas Stanley, author of The Millionaire Next Door, identified the seven characteristics of people who become big accumulators of wealth — and thus have a chance to build the wealth it takes to be in the top 1%. These common traits include:

1.    They live below their means.

2.    They allocate their money, energy, and time in ways that contribute to building wealth.

3.    They believe that financial independence itself is more important than appearing to have a high social status.

4.    Their parents did not provide money for their basics in adulthood.

5.    Their adult children are self-sufficient economically.

6.    They understand how to target economic opportunities.

7.    They choose the right occupation.

Not all of these are factors one can fully control — and not everyone has a knack for targeting economic opportunities. In addition, many people choose an occupation around a passion, not around wealth-building. But that doesn’t mean you can’t get there — or get close.

The Takeaway

Being part of the 1% appears to take a combination of luck, talent, hard work, and determination. Being diligent about saving is also a key way to grow your net worth over time. The more you can sock away, the better off you will likely be in the future.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

What is top 5% net worth?

Based on the most recent government statistics, the top 5% of households have a net worth of around $3.8 million or more. Being in this percentile means you have a significantly higher net worth than most people, often including substantial assets like real estate, investments, and savings.

What qualifies you as a 1 percenter?

To qualify as a 1 percenter, you typically need to be in the top 1% of wealth or income in your country. In the U.S., being in the top 1% requires a net worth of $11.6 million to $13.7 million or an annual income of $787,712 or more. This elite status signifies significant financial resources, including assets like real estate, investments, and savings. Being a 1 percenter also often comes with unique financial opportunities and challenges.

What salary is top 5%?

The income threshold to join the top 5% earners in the U.S. is $290,185. This income is about one-third of the income needed to be a one-percenter but represents a high level of income compared to the general population. Top 5% earners often include professionals in fields like finance, technology, and medicine, as well as successful business owners and executives.

SoFi Checking and Savings is offered through SoFi Bank, N.A. Member FDIC. The SoFi® Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network every 31 calendar days.

Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

See additional details at https://www.sofi.com/legal/banking-rate-sheet.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.

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We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Bank Fee Sheet for details at sofi.com/legal/banking-fees/.
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SOBNK-Q225-078

Community colleges offering two-year programs can be a wonderful option for students looking to gain a higher education in less time. It can also be a great option for those looking to save a little cash while bettering their current skills, prepping for a four-year university, or going for an associate degree.

Moreover, it can often save students thousands of dollars in the long run toward the career of their dreams. Though community college can cost far less than a four-year school, it still isn’t free. Here are a few helpful ways to gain a little financial assistance for your community college education journey.

Note: SoFi doesn’t offer student loans for community college at this time, though we do offer loans for bachelor’s programs and above.

Federal Student Loan Options for Community College

Federal student loans are available for both two- and four-year colleges. The process of applying for federal aid is the same, regardless of the school, as long as the Department of Education sees it as an “eligible degree or certificate program.” Vocational, career, trade, or online schools often offer federal loan options, but it’s not a guarantee. If you’re not sure whether your school participates in federal loan programs, you can confirm with your school before moving forward.

To apply for federal aid, including student loans, a potential student must fill out the Free Application for Federal Student Aid (FAFSA®). After submitting the FAFSA, the applicant will receive an award letter from each school listed on the FAFSA application. This will tell you what aid you qualified for. If you plan on applying for federal aid to attend community college, consider applying as early as possible.

The following types of federal student loans may be available for community college applicants.

Direct Subsidized and Unsubsidized Loans

When it comes to borrowing federal student loans, the government offers both subsidized and unsubsidized loans to assist students in covering the cost of higher education.

Direct Subsidized Loans are based on financial need and they come with a major benefit — the U.S. Department of Education pays the interest while the student is still enrolled in school at least half-time and for the loan grace period (usually the first six months after leaving school).

Direct Unsubsidized Loans are similar to subsidized loans except that they are not based on financial need, they are based on your cost of attendance and other financial aid you receive. As such, the borrower would be responsible for all accrued interest on the loan.

There is an annual limit to how much money undergraduate students can borrow in Direct Subsidized and Unsubsidized Loans. For example, the limit for your first undergraduate year is $5,500 for dependent students (and $9,500 for independent students).

Recommended: Comparing Subsidized vs Unsubsidized Student Loans

Direct PLUS Loans

Direct PLUS Loans are available to parents of dependent students. Unlike both Direct Subsidized and Unsubsidized Loans, when a person borrows a Direct PLUS Loan, he or she will be subject to a credit check. If the person has an adverse credit history, they may not be approved to borrow the loan.

If you are a parent of a dependent undergraduate student, you can receive a Direct PLUS Loan for the remainder of your child’s college costs not covered by other financial aid.

It’s important to note when a person borrows a Direct PLUS Loan, there are fees in addition to interest. With this loan, parents can borrow up to the cost of attendance (determined by the school) minus any other financial aid received. In order to obtain this loan, parents must qualify and their credit history will be checked. Interest will also accrue.

Private Student Loans for Community College

If a student does not receive enough aid through federal student loans or maxes out his or her eligibility for federal student loans, they can seek additional funding through private student loans. Private student loans can be borrowed from banks, credit unions, or online lenders. (Note: SoFi does not offer private student loans for community college at this time.)

Each institution has its own eligibility requirements, so each borrower will have to check with individual lenders to see about qualifications. Like federal loans, there is usually a limit to the amount you can borrow with private loans, which can vary by lender. The limit might be the cost of tuition, less the amount of aid the student is already receiving, for example. However, the limit on some private loans may be higher than the federal loan limit.

Keep in mind that private lenders aren’t required to offer the same borrower protections as federal student loans, such as a grace period or income-driven repayment plans. Because of this, private student loans are generally considered only after all other financing options have been thoroughly reviewed.

Recommended: A Complete Guide to Private Student Loans

State Loans for Community College

Federal and private student loans aren’t the only options. Several states also offer their own student loan programs to help students. To qualify for many of these loans, a student must be a resident of the state program they’re applying for, or an out-of-state student enrolled in a college or university within that particular state.

To find state loans for community college, visit your state’s higher education agency website or your school’s financial aid office.

Saving Post-Graduation with Student Loan Refinancing

Even if you went to community college, you may still graduate with student loan debt. If your loan debt feels overwhelming, you could consider refinancing your student loans.

With a student loan refinance, you may be able to get a better interest rate than what you originally qualified for or change the terms of your loan to fit your post-grad life. And you can focus on earning and saving for your future thanks to your hard-earned education.

The Takeaway

Community college students have a variety of options available to them when paying for their education. In addition to some scholarships or grants, students may use student loans, either federal or private, to help pay for college.

FAQ

Will student loans pay for all of college?

Student loans can help cover many college expenses, including tuition, fees, room and board, and supplies. However, they may not always cover the full cost, especially at more expensive schools. Loan limits, financial aid eligibility, and borrowing capacity all influence whether student loans will pay for all of college.

How much are student loans for an associate degree?

Student loans for community college are available, including for associate degrees. In order to borrow a federal student loan, potential borrowers must be enrolled in an eligible degree granting program, as defined by the U.S. Department of Education. These programs may include associate degree programs.

What do you do if you can’t afford college?

If you can’t afford college, consider evaluating the costs and programs available at different colleges. Consider factors like location and room and board, in addition to tuition. Also fill out the FAFSA form, which allows students to apply for federal financial aid, including grants and scholarships (which don’t typically need to be repaid) and federal student loans (which do need to be repaid). Consider contacting the financial aid office at your school for more personalized information.

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

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

SoFi Student Loan Refinance
Terms and conditions apply. SoFi Refinance Student Loans are private loans. When you refinance federal loans with a SoFi loan, YOU FORFEIT YOUR ELIGIBILITY FOR ALL FEDERAL LOAN BENEFITS, including all flexible federal repayment and forgiveness options that are or may become available to federal student loan borrowers including, but not limited to: Public Service Loan Forgiveness (PSLF), Income-Based Repayment, Income-Contingent Repayment, extended repayment plans, PAYE or SAVE. Lowest rates reserved for the most creditworthy borrowers. Learn more at SoFi.com/eligibility. SoFi Refinance Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).

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.