Oct
09
2024
Breaking Down the Parent PLUS Loan Application Process

Breaking Down the Parent PLUS Loan Application Process

By | Going to College, Student Loans, student_loan | Comments Off on Breaking Down the Parent PLUS Loan Application Process

Federal PLUS Loans are an accessible option for graduate students and parents of college students.

Parent PLUS Loans are federal loans for parents of undergraduate students. They offer flexible repayment options, fixed interest rates, and higher borrowing limits.

Direct PLUS Loans, also known as grad PLUS Loans, are available to graduate and professional degree students. Both parent and grad loans fall under the Direct Loan Program operated by the federal government.

What Is a Parent PLUS Loan?

Parent PLUS Loans can be borrowed by parents of undergraduate students in order to help their child pay for college. These loans are funded by the U.S. Department of Education and are part of the Direct Loan Program.

Unlike other types of federal student loans, Parent PLUS Loans do require a credit check. If an applicant has an adverse credit history, they may not be approved to borrow a Parent PLUS Loan.

How Do Parent PLUS Loans Work?

As noted previously, Parent PLUS Loans are available to all qualifying parents of undergraduate students. Borrowers with poor credit history can ask an “endorser” to cosign the loan, or borrowers can send a report clarifying their credit history to be considered.

The loan amount is limited to your child’s cost of attendance (COA), less any other aid awarded to the student. The interest rate is fixed for both loan types, and interest accrues the moment it’s released, even during deferment. For the 2024-25 academic year, PLUS Loans have an interest rate of 9.08% and an origination fee of 4.228%.

Like other loans in the Direct Loan program, a third party company called a “loan servicer” manages customer service around general billing requests such as repayment and deferment.

Parent PLUS Loan Application Process

The first step in borrowing a Parent PLUS Loan is to have your child fill out the FAFSA or Free Application for Federal Student Aid. This is required before a parent can request a PLUS Loan. After the FAFSA® is taken care of, parents can submit an online application for a PLUS Loan.

Before applying for a PLUS Loan, remove any security freezes on your credit bureau files. Any active credit freezes will prevent an application from being processed.

It may take upwards of 20 minutes to complete the application, and you’ll generally need the following information:

•   Verified FSA ID (your StudentAid.gov login)

•   School Name

•   Student Information

•   Personal Information

•   Employer’s Information (such as the employer’s name, address, and phone)

A verified FSA ID is a unique ID that acts as a legal electronic signature. It should only be used by that applicant.

After being approved for the PLUS Loan, borrowers will be required to fill out the Master Promissory Note (MPN). This indicates that you agree to the terms of the loan.

Recommended: Do You Have to Apply for a Parent Plus Loan Every Year?

Filling Out the FAFSA

The FAFSA is required for all forms of federal student aid, including grants, work-study, and federal loans. Some state and school-specific aid may also be awarded based on information included on a student’s FAFSA form.

Applicants who submit a FAFSA get a Student Aid Report (SAR) that summarizes the form’s information. It will include your Student Aid Index (SAI) and your eligibility for federal grants and loans, among other details. Schools listed on your FAFSA get a copy of this report to determine aid.

Recommended: FAFSA Guide

Determining Your Eligibility

Borrowers must fulfill the following basic requirements:

•   Be the legal guardian of an undergraduate enrolled in a higher ed program part-time or full-time

•   Fulfill general federal student aid requirements, such as citizenship

•   Not have an adverse credit history

How Much Can You Borrow?

Parent PLUS Loan borrowers can take out the total cost of attendance of the program their child is enrolled in, less the amount in scholarships or other forms of aid.

How Much Do You Want to Borrow?

It can be tempting to borrow to make paying for college easier, but be cautious of overborrowing. Parent PLUS Loans have costlier fees and rates, with the latest interest rate at 9.05%, combined with a 4.228% origination fee.

For income-earning parents, it may be easier to measure the amount of student debt you should take on. As a general rule of thumb, all debt, including student loans, should not exceed more than 20% of your annual or projected annual take-home pay.

Filling Out Your Parent PLUS Loan Application

Prospective students and parents of prospective undergraduates fill out a Parent PLUS Loan application online. Grad PLUS Loan applications are separate online forms.

Enrollees will have the option to sign up for in-school deferment and get a credit check on the spot. Borrowers can also view a demo to see what the application entails before applying.

Recommended: Grad PLUS Loans, Explained

Signing a Promissory Note

Once you complete the PLUS Loan application, you’ll be directed to complete a Master Promissory Note (MPN). An MPN spells out a borrower’s rights and responsibilities in the loan agreement.

Loans will not be awarded until an MPN is completed.

You’ll be asked to fill out personal information and provide two references as future contacts in case you’re unreachable.

What to Expect After Applying

Approved loans will be disbursed to the school you’re enrolled in and they’ll apply the loan to outstanding fees, tuition, and/or room and board. If there are funds left over, you can cancel the remainder or choose to keep it for discretionary expenses related to higher ed day-to-day living.

What If You Are Denied?

If you are denied a loan, you may be able to add an endorser, or cosigner, to your application. An endorser is someone who agrees to pay your loan if you are unable. If you were denied for having an adverse credit history, you will likely need to complete an online PLUS Credit Counseling course.

Recommended: Guide to Grad PLUS Loan Credit Score Requirements

How Long Until the Loan Is Disbursed?

Each school pays out loans on a different schedule. Once the federal government has processed your paperwork and released funds, schools handle the process afterwards. If you have questions about when your loan will be disbursed, contact the financial aid office at your child’s school.

When Do You Need to Begin Repayment?

Repayment for Parent PLUS Loans begins immediately upon the last disbursement of the loan or after deferment, depending on the repayment plan you select.

If you request a deferment, you are able to pause payments until six months after your child graduates from college. If you are interested in this option, you can make this selection on the PLUS Loan application or request it directly with the loan servicer. Interest will accrue even while the loan is in deferment.

Income-Driven Repayment Options for Parent PLUS Loans

Parent PLUS Loan borrowers are able to enroll in an income-driven repayment plan if they first consolidate the loan through the Direct Consolidation Loan Program. Income-driven repayment plans tie the monthly payments to your income and repayment takes place over a period of 20 to 25 years.

On these plans, your loan payment may fluctuate each year depending on your income and family size. At the end of your repayment period, any outstanding balance is forgiven, but under certain circumstances, this forgiven amount may be considered taxable income by the IRS.

The Takeaway

PLUS Loans are federally funded loans available to graduate students and parents of undergraduate students. Applying for a PLUS Loan is a straightforward process when you understand the key steps and requirements. By ensuring you meet the eligibility criteria, gathering the necessary documentation, and completing the application accurately, you can secure funding for education expenses efficiently.

Other ways to pay for college include cash savings, scholarships, grants, and private student loans. Federal loans, including PLUS Loans, come with certain benefits and protections, and should be used prior to looking into private student 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.


Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.

FAQ

How long does it take for approval for a Parent PLUS Loan for college?

Loan applications are preliminarily approved or denied on submission and schools are notified within 24 hours. Applicants must pass eligibility requirements after completing the application. A Master Promissory Note and the FAFSA also must be completed prior to loan awards. Disbursement processing times differ with each school.

Can you be denied a Parent PLUS student loan?

Yes, if you have an adverse credit history you may be denied a PLUS Loan. You can get a PLUS Loan with an endorser or documentation proving extenuating circumstances around your history. Examples include foreclosure or bankruptcy.

What is the maximum borrowable amount for a Parent PLUS Loan?

The maximum borrowable amount allowed is the cost of attendance (COA), which is determined by schools.

Photo credit: iStock/solidcolours

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs. SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility-criteria for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.

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.

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.

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

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

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Oct
03
2024
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How Much Should I Have in Savings?

By | Budgeting & Goals, Financial Independence, money | No Comments

If you’re wondering how much you should have in savings, you may know that many financial experts feel three to six months’ worth of living expenses is vital. That said, you might also be curious if more cash in the bank may provide a greater sense of security and well-being.

Despite the saying that money can’t buy happiness, research indicates that having cash can indeed enhance one’s sense of well-being. A study conducted at the Wharton School of Management at the University of Pennsylvania found having more money does boost your positive feelings.

So with that in mind as well as your financial security, here’s a closer look at how much you should have in savings to get those good vibes going and give you a sense of security during uncertain times.

Key Points

•   Financial experts generally recommend having at least three to six months’ worth of living expenses in savings.

•   Savings recommendations vary by age, starting with $500 for young adults and increasing to six months of expenses for older adults, not including savings for long-term goals, such as retirement.

•   Many Americans lack sufficient savings, according to a 2024 SoFi survey, with 45% having less than $500 in their emergency funds.

•   Outside of savings accounts, you may consider putting your savings in retirement accounts and investment accounts — though higher risk, these options may help your money grow over time.

•   Budgeting, tracking spending, and cutting unnecessary expenses may help you build savings more effectively.

Why Should I Have Savings?

You want to be financially savvy, right? Most people do. But a startling 12% of Americans have no savings, according to a recent YouGov survey. Another 13% say they have less than $100 and 14% indicate they have between $1,000 and $4,999.

A savings account helps you avoid going into more debt and prepare for unexpected emergencies. Imagine if your car had a major breakdown, or your cell phone was trampled on during a weekend outing. How would you afford the unpredictable repairs?

An emergency fund stocked with extra cash can help you avoid taking out personal loans or using a credit card to cover an unexpected expense. And while emergencies are never fun, it might help you feel a little bit better knowing that you’re prepared. In SoFi’s April 2024 Banking survey of 500 U.S. adults, 45% of respondents said they have less than $500 in an emergency fund.

How Much Money Should I Have in Savings?

If you don’t have much in savings, where exactly do you start? A general rule of thumb is to have three to six months of living expenses saved up, not including money you’re setting aside for long-term planning, such as retirement funds. But keep in mind that your living expenses may increase as you age, as you start growing your family, have mortgage payments, or are saving for retirement, so you might need more in a checking and savings account.

But that is still a good figure to aim for. Once you figure out your bare minimum monthly expenses and multiply it by three or six, you can calculate how much to aim for and get that sum saved.

It’s worth noting that some money experts say 10 times your monthly expenses may be a wiser amount of a cash cushion to stash away.

However, many Americans are not yet stashing away enough for emergencies, according to our survey data.

Amount in emergency savings

 People who have saved that amount
Less than $500 45%
$500 to $1,000 16%
$1,000 to $5,000 19%
$5,000 to $10,000 9%
More $10,000 10%

Source: SoFi’s April 2024 Banking Survey of 500 U.S. adults

Earn up to 4.00% APY with a high-yield savings account from SoFi.

No account or monthly fees. No minimum balance.

9x the national average savings account rate.

Up to $2M of additional FDIC insurance.

Sort savings into Vaults, auto save with Roundups.


How Much Money Should I Have in Savings by Age?

Now, here’s a look at how much to sock away in savings based on your age.

18-24: At Least $500 in Savings

Being a college student or recent grad is expensive. It’s hard to keep up with tuition and rent. However, as a college student, you can try starting with $500 in emergency savings and working your way up.

A $500 emergency fund is a great place to start for young people whose expenses are typically less than older Americans. Even just saving $10 per week can help you reach your goal in about a year.

20s: 3-6 Months of Expenses in Savings

After graduation, you’re figuring out the real world for the first time. Most post-graduates are determining how to pay back student loans, and maintain new living expenses. It may help to break down your larger goal of three to six months’ worth of living expenses into first saving $1,000 in your emergency fund.

This can help you feasibly achieve your savings goal while preparing for most emergencies with a sum of cash on hand. You might want to try automating your savings and having a small amount transferred from your checking account on payday to build up your reserves.

30s: 6+ Months of Expenses in Savings

By the time you reach your thirties, ideally you’d have at least six months of expenses saved. At this point, you may even be questioning if you should invest more or continue to save. An easy way to determine how much you need to save is to create a budget of your basic living expenses. Twenty-three percent of people in SoFi’s survey report using budgeting tools offered by their bank.

How much do you need to survive in the case of job loss or a medical emergency? A savings account of at least six months of your usual expenses can help you feel safe enough to cover rent, utilities, and food while you get back on your feet.

40s: 6+ Months of Expenses in Savings

How would you survive if faced with a job loss? According to the Center on Budget and Policy Priorities, unemployment benefits vary state-to-state, but many states give up to 26 weeks in benefits.

However, the amount you receive might not be on par with what you are earning, so consider alternative safety nets. As an example, in New York, which can have a high cost of living, unemployment benefits may range from $100 to $500 a week.

When you’re in your 40s and 50s, replacing your income may prove to be more difficult as you search for positions with more work experience. If the government covers roughly six months of unemployment, then you’ll likely want to have at least that much and then some in your own savings.

50s: 6+ Months of Expenses in Savings

If you are in your 50s and wondering how much to have in savings, the answer again is at least six months’ worth of living expenses and ideally significantly more. For many people, this is their period of peak earnings. They may have multiple expenses as well, such as a mortgage, children’s education, and eldercare. Yet only 10% of people in SoFi’s Banking survey have more than $10,000 in their emergency savings.

Given these pressing concerns, you want to make sure you have a cushion if you were to face an emergency like job loss. What’s more, you don’t want to tap your retirement savings, which can trigger steep early-withdrawal penalties.

Where Should I Put My Savings?

If you’re building up an emergency fund, then placing your savings in an account that can be easily accessed, like a savings account, is probably ideal. That said, there are different options for putting your savings, depending on your goals.

Retirement Accounts

Putting your near-term or emergency savings into a 401(k) or mutual fund might not be the best place for this purpose because these accounts are not very liquid. In other words, you can’t easily access the money when you need it.

Plus, withdrawing early from accounts specifically set up for retirement may come with penalties and hefty fees if you are under the age of 59.5. In addition, these funds may not be insured, depending on the type of account.

That said, a retirement account is an important tool for long-term savings, since they may help grow your funds over time to help provide you with the money you’ll need later in life.

Investments

Investments can offer a place to grow your savings at a healthy rate of return over time. However, this money will not be insured, and you could face losses if the market drops. That could leave you vulnerable if you needed to access money at that moment. You might look into short-term vs. long-term investments to see how you may want to balance different types of savings plans.

Savings Account

A savings account can provide a secure place to store your savings. There are different kinds of savings accounts to consider, and you may find varying rates of return depending on the annual percentage yield (APY) offered and how often compounding occurs. For instance, there are high-yield savings accounts that offer higher APYs, which 23% of the SoFi survey respondents said they have.

When comparing traditional vs. online banks, you may find that the latter, since they don’t have brick-and-mortar locations, may offer better rates and lower fees.

Recommended: Use SoFi’s savings account interest calculator to see how much your money can grow over time.

Checking Account

While a checking account is a secure, typically FDIC-insured place to store your savings, it’s really designed to be more of a place for paying bills and for everyday needs. You likely won’t earn much interest. In SoFi’s survey, 88% of the respondents with bank accounts have checking accounts, while 71% have savings accounts.

Cash

While cash is perhaps the most liquid of ways to store your money, it can’t promise security. You could be robbed or could lose your money. That’s not what you want to happen to your nest egg!

This chart helps you compare the different places to put your savings.

Location of Savings Rate of return Insured
Retirement Variable Maybe
Investments Variable No
Savings Low to moderate Yes
Checking No to low Yes
Cash None No

How Much Does the Average American Have in Savings

While you’ve now read the advice to have three to six months’ worth of living expenses stashed away, many Americans are not hitting that goal.

According to the Federal Reserve’s Board Survey of Consumer Finances, here are the average savings:

•   Under 35: $11,200

•  Age 35-44: $27,900

•  Age 45-54: $48,200

•  Age 55-64: $57,800.

Building Up Savings More Quickly

Convinced you need more savings, and a traditional savings account just won’t cut it? Here are a couple of ways to help build up your savings faster than a savings account alone.

Selling Your Stuff

Take inventory of things in your garage or closet that you can sell. There are several buy/sell apps out there that can make it easier to sell your unwanted items, and many places where you can sell your stuff and recoup some money.

Any money you make off of your items can be thrown into your savings account. This method is a win-win because you get rid of things you aren’t using, and you can build up your savings without changing your spending habits.

Cutting Out Unnecessary Spending

Want to make significant strides with your savings habit? It might be time to look at your expenses and cut out unnecessary spending.

There are several things you could change, even if it’s just temporary. Replace your $100 per month gym membership by exercising with free, full-length workout videos online. Cut out your cable expense and go all-in with a cheaper Netflix subscription.

How a Budget Can Help You Save

Yes, the dreaded budget. Actually seeing how much you spend each month in a written budget can help you save. When you track your monthly income and expenses, you can quickly identify what areas of life are costing the most so you can make adjustments.

An online budgeting tool like SoFi’s can help you track your spending, which can help you see where you might be able to trim some fat from your expenses.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with 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.


Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.00% APY on SoFi Checking and Savings.

FAQ

How much should a 30 year old have in savings?

How much money you should have in savings at age 30 will vary, but an individual should have at least three to six months’ worth of basic living expenses saved. Some financial advisors suggest that you should have the equivalent of one year’s salary (gross) saved.

How much does the average person have in savings?

Savings vary person to person, and with age. Currently, the average American under age 35 has approximately $11,200 saved.

Is $20000 a good amount of savings?

Whether $20000 is a good amount to have saved will depend on a few factors. If you are a single recent college grad, it could be a very good starting point for an emergency fund. However, if you have several dependents and are taking retirement savings into account, then you may consider strategies for increasing your savings.

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2024 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
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.

SoFi members with direct deposit activity can earn 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. 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 (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, 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 Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. SoFi members with direct deposit are eligible for other SoFi Plus benefits.

As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.00% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 12/3/24. There is no minimum balance requirement. Additional information can be found 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.

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

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

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Sep
29
2024

Law School Scholarships Guide

By | Budgeting & Goals, Building Your Career, Going to College, Student Loans, student_loan | Comments Off on Law School Scholarships Guide

Navigating the cost of law school can be daunting, but scholarships offer a valuable way to reduce financial burdens and make your legal education more affordable. Whether you’re a prospective law student or currently enrolled, understanding the variety of scholarships available is crucial to securing funding for your studies.

Keep reading to learn the types of law school scholarships available, tips for finding law school scholarships, and strategies for crafting compelling applications to increase your chances of success.

The Average Cost of Law School

The Law School Admission Council (LSAC) reports that the average annual cost of a public, out-of-state law school in 2023 was $43,590, or $30,554 for in-state students. For private law schools, the average in 2023 was $55,963. And according to Education Data Initiative, the average total cost of law school is over $230,000.

Because students aren’t yet racking up those billable attorney hours, it can be helpful to research law school scholarship opportunities before applying.

Types of Law School Scholarships

Per the numbers mentioned above, there might be a fair amount of sticker shock for those who haven’t yet applied for graduate school and are only thinking of someday going the lawyer route. Fortunately, there are a range of options for aspiring attorneys seeking to fund law school.

Full-Ride Tuition Law School Scholarships

In some cases, there are full-ride tuition scholarships and need-based grants out there. Full-rides, of course, are not available at all law schools. If a law school doesn’t explicitly advertise or highlight information regarding full-ride opportunities, interested students can contact the school to ask.

Students deciding whether to apply to law school may want to familiarize themselves with the language universities adopt to explain these scholarships. In some cases, specific scholarships are designated for particular students. Full-ride law school scholarships can be highly competitive — with some schools offering as few as two to four per enrollment year. One potential tip for the search for scholarships is to target law schools with more tuition help.

General Law School Scholarships

There are many options for law school hopefuls to find potential scholarships. The nonprofit organization Law School Admission Council (LSAC) has compiled a list of law school scholarships available to applicants. It could be well worth your time to go through the list and make note of the scholarships you’d qualify for.

Many law schools themselves offer competitive scholarships to attract stronger candidates, as well. It might also be helpful to check if a school also offers in-state residents specific tuition reductions or grants.

Law School Scholarships from Law Firms

Similarly, some law firms offer scholarships to law school students. Applying is typically a straightforward process, with many firms requiring a short essay, transcripts, and sometimes references to be considered. One such law firm scholarship is offered by The Dominguez Firm, which offers $5,000 and $2,500 annually to selected student applicants.

On top of this, there’s the rising trend of law firms helping new hires to repay a portion of their student debt once onboarded.

Diversity Law School Scholarships

Some scholarships are awarded to students with diverse backgrounds. One example of this is the Legal Opportunity Scholarship Fund offered by the American Bar Association. This scholarship is awarded to law students from a racial or ethnically diverse background.

The USLAW NETWORK Foundation also offers a $5,000 scholarship for up to 10 diverse students.

Law School Scholarships for Women

Some scholarships are offered to women attending law school. One resource is the American Association of University Women (AAUW) Fellowships and Grants, which offers scholarships to women in graduate studies, including law.

Finding Scholarships for Law School

There are dedicated resources like Fastweb and SoFi’s scholarship search tool to help prospective students find scholarships for which they may qualify. Fastweb is an online resource to help students find scholarships, financial aid, and even part-time jobs in support of college degrees.

The American Bar Association’s law student division also has a running list (along with deadlines) of law student awards and scholarships. Additionally, the Law School Admission Council offers a list of diversity scholarships available to students from diverse racial and ethnic backgrounds.

Recommended: Applying to Graduate School: Smart Tips & Strategies 

Negotiating Wiggle Room

Doing all this research and the math around law school scholarships could put applicants in a more informed position when evaluating which program to attend — and, potentially, help them to identify schools more likely to be interested in their application.

A reality of today’s admissions process for law school is negotiating scholarships. Some schools have a strict policy against negotiating, but others fully expect their initial offer to be countered. That’s why it can help to save acceptance letters and anything in writing from schools that offer admission.

Suggestions for Negotiating Law School Scholarship Offers

Offer letters could be shared with competing schools, asking if they’re able to match another university’s aid. It might be uncomfortable asking for more tuition assistance upfront, but a little discomfort now could help applicants shoulder less law school debt later on.

Doing research on law schools (and figuring out the likely cost of living expenses at each institution) could help applicants to determine which scores or grades to aim for in an effort to make law school more affordable for them. Tabulating expenses (and having records on hand) may also demonstrate to universities that the amounts being negotiated are based on well-documented expenses.

Recommended: Law School Loan Forgiveness and Repayment Options

Federal vs Private Loans for Law School

Students wanting to apply to law school should consider the differences between federal and private student loans. Federal loans come with certain benefits not guaranteed by private ones (such as forbearance or income-driven repayment), and should be used first before seeking private student loans.

Private student loans can also help applicants cover the expense of graduate school. They typically offer competitive rates and terms, but you need to have a solid credit score to qualify.

It’s important to note that private student loans don’t offer the same benefits and protections afforded to federal student loan borrowers, like Public Service Loan Forgiveness (PSLF). If a law school applicant is interested eventually in becoming a public defender or pursuing non-profit legal work, forgiveness and forbearance perks may play a role in their decision.

The Takeaway

Students looking to offset law school costs with scholarships can look to their law school, scholarship databases, local law firms, and other organizations for resources. Consider contacting the financial aid office at your law school if you are looking for scholarship resources. If students interested in law school find themselves coming up short on funds for the JD after scholarships and federal aid, additional options may be available.

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.


Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.

FAQ

What LSAT score will get me a scholarship?

One general rule of thumb is that students who have a LSAT score (and sometimes GPA) above the median for a certain school could qualify for a scholarship. Chances of qualifying are even greater if your score falls in the 75th percentile for the school.

What is a good scholarship for law school?

Any scholarship for law school is a good scholarship. Scholarships typically don’t need to be repaid and can help reduce a student’s debt burden. Students looking for law school scholarships can apply for institutional aid and aid through other sources like nonprofit organizations.

Do top law schools give scholarships?

While some top law schools do not offer scholarships, many law schools do offer law school scholarships to students. For example, in the 2023-2024 class at Yale, 71% of students qualified for some form of financial aid and 62% qualified for an institutional law school scholarship. Check directly with the schools you are interested in to see if they offer scholarships to students.

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

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

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

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Sep
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2024
What Is a Certificate Program? A Student's Guide in 2022

Student’s Guide to Certificate Programs

By | Going to College, Student Loans, student_loan | Comments Off on Student’s Guide to Certificate Programs

Certificate programs offer a flexible, focused, and often more affordable way for individuals to gain specialized skills and knowledge without committing to a full degree program. Whether you’re a recent high school graduate looking to supplement your education, a working professional seeking career advancement, or someone wanting to switch industries, certificate programs provide valuable credentials in a relatively short time frame. 

Keep reading to learn what certificate programs are, their benefits, and how to choose the right one to meet your personal and professional goals.

What Is a Certificate Program?

Certificate programs are courses or vocational training provided by colleges or professional associations that last less than two years, and typically just six to nine months. They can prepare you for immediate placement in trade, technical, and vocational careers. 

Trade schools prepare you for jobs such as welder, electrician, and cosmetologist. Vocational schools focus on in-demand jobs that can be trained in two years or less, such as working as a paralegal or a dental hygienist. Technical schools teach skills for one trade and typically involve an apprenticeship. Programs include HVAC, auto repair, and some nursing certifications.

“Certifications” are the outcome of certain certificate programs to prove successful mastery of the program. Exams are officiated by state or authorized organizations, and formal licenses, diplomas, or certificates are awarded on completion. Certificates can also be career training programs for bachelor’s degree holders to expand a student’s expertise without earning a degree. For instance, a marketing professional can enroll in a social media marketing course, a niche area of marketing, to broaden their skillset. 

Certificate Programs vs College Degrees

Certificate programs and college degrees differ in curriculum, program length, cost, and program outcome.

Curriculum. Colleges require a general education curriculum, whereas certificates teach only the skills for a trade or subject. No academic courses, such as humanities, are included in the training.

Length. Certificate programs are shorter. College degrees are a minimum of two to four years for full-time students. Certifications can sometimes be just one month, but are typically three to four months for one-off courses. Training programs for certifications are usually one to two years.

Cost. A college education has a substantial price tag. The average college tuition in 2024 costs $38,270 per student per year, according to the Education Data Initiative, compared to certificate programs that can range from $1,000 to $5,000 (though some may be more expensive). 

Program outcome. Finally, program outcomes differ. Certificates train students for a specific skill and immediate placement in careers with those skills. College programs provide an extensive and expansive education that can provide opportunities in multiple disciplines within a field. For instance, someone who earns a bachelor’s in economics can enter finance analytics, business consulting, and various disciplines in finance-related fields.

Recommended: A Guide to Choosing the Right College Major

How Long Are Certificate Programs?

Certificate programs can range from a few weeks to two years. San Diego University’s paralegal program can take four to eight months to complete in-person, for example. A cosmetology program at Fullerton College in California requires 1600 hours at a student’s own pace — so the program length depends on you and the field you are planning on studying.

Types of Certificate Programs

The two most common types of certification programs are undergraduate and graduate. They follow compulsory education, and outside of a degree, provide education needed for specific fields such as business, administration, and healthcare.

Undergraduate

Undergrad programs build technical skills and subject mastery via career training programs or one-off courses. Enrollees usually must have a high school diploma for certain courses. They can often be completed in one academic year or less.

Some programs, such as cosmetology, award a license at the end of the program. Ensure your program is formally accredited by the state or professional organization and will prepare you for required licensing exams.

Graduate

Graduate courses enhance a college degree. Students test and earn a certificate to satisfy course completion without earning a degree. Some courses require prior knowledge of a topic. For example, students employed in computer engineering can earn a certificate in a new computer language.

They are offered by universities and colleges, and programs are credit-based. Some programs’ credits can be transferred to other colleges.

Online Certificate Programs

Online certificate programs offer multiple advantages, with convenience being at the top of the list. The online universe has a library of extensive certificate programs, and prestigious courses are accessible to everyday learners. For example, eCornell has a large library of graduate courses. Also, MOOCs (massive open online courses) offer free and paid programs from universities, nonprofits, and for-profit companies.

Online courses also offer flexibility. Asynchronous courses, those that don’t have a specific meeting time, allow students to take a course at their own pace. You can access pre-recorded content anytime and follow class discussion on comment boards. On the other hand, synchronous online programs are more restricted to a schedule. They work like in-person courses where students attend live online lectures, meet due dates, and engage in online class activities.

Finally, online courses may be less expensive than in-person ones. Cutting the commute and certain campus fees can result in cheaper overall prices than in-person learning.

Not all certificate programs offer online learning, however. Hands-on vocations, such as landscaping, plumbing, and electrical engineering, often require apprenticeships to demonstrate material understanding and to meet minimum requirements.

Is a Certificate Program Right for You?

Certificate programs might be a good fit for someone who wants to try a trade career. They are an affordable way to test out vocations without incurring student debt. And college credits from some courses can be put toward a formal college degree if you decide to pursue a bachelor’s.

If you want to learn a new skill for work, graduate certificate courses are one alternative to a master’s or professional degree. For instance, some companies will pay employees to get a Project Manager Professional (PMP) certificate to better equip their employees and improve workforce productivity.

Certificate programs are a great way to kick-start a career change. Some popular certificate programs for career changes include business analysis, law, human resources, and accounting. They are offered by professional organizations, such as the American Institute of Certified Public Accountants for accounting.

Program Type

Certificate Programs

Certification Programs

College Degrees

What do you gain?

Add skills with specific courses for your current job

Fast-track into trade careers or career advancement

Gain career opportunities not limited to trade vocations

How long do you study?

Programs last a few weeks to a few months

Programs last a few months and up to two years

Programs for full-time students last two to four years

How many credits are programs?

15-30 credits, though requirements may vary

4-30 credits, requirements may vary

60 for associate, 120-130 for bachelor’s, and 30-60 credits for graduate programs

This program is good for…

Kick-starting a career change; adding skills to your existing job

Starting a new career (usually in trade vocations); advancing careers into management

Starting a new career or changing a career

Benefits of a Certificate Program

Certificates can propel students directly into the workforce with on-demand skills. According to a Georgetown University study, nearly all certificates (94%) are awarded in career-oriented fields.

Future success in earnings depends on the trade field you choose. For instance, the median earnings for a dental hygienist were $87,530 per year in 2023 according to the Bureau of Labor Statistics (BLS). In comparison, the median wage for cosmetologists was $35,080 in 2023 according to the BLS.

Certificates can also complement a college degree or help a professional acquire skills to advance upward within a field. A marketing professional can expand his or her skillset with an InDesign certificate — often a skill needed for content marketers. And it pays to learn. A total of 77% of Coursera students reported career benefits, such as promotions, raises, and career changes.

Certificate programs also can save time and money. Programs are fewer credits than full degrees and are shorter in length, so cost substantially less than a degree.

Drawbacks of a Certificate Program

Certificates alone can increase income value modestly — and the gains can be diminished in a rapidly evolving workplace. Some studies even show negative returns for certificate holders without a college degree, according to the nonprofit New America.

One BLS report shows bachelor’s degree holders earn median weekly earnings of $1,541, while “some college or associate degree” earners make $1,057 per week on average.

Furthermore, more vocations require a college degree. According to BLS, a bachelor’s degree is required for 174 occupations while an associate degree or a postsecondary nondegree award is required for only 99 occupations.

While certificate programs equip you with skills to land an entry level job after a short time, it may not pay off in the long run.

What to Look for in a Certificate Program

Evaluate programs by accreditation. Quality courses are accredited by the U.S. Department of Education or the Council for Higher Education Accreditation. They might also be verified by certifying bodies within that industry, such as HRCI for Professional Human Resources certification.

Determine flexibility. Some learners might benefit more from in-person courses, while an online course can give busy learners an opportunity to gain valuable expertise and skills. Furthermore, an asynchronous program can provide further flexibility for students who have unpredictable schedules.

Look out for for-profit institutions. For-profits are often synonymous with poor training for exorbitant costs. In short, it can be a scam. The College Scorecard is a government tool that can tell you whether your school is for-profit. On your school’s page, you will see its designation, such as “Private For Profit.”

What Certificate Programs Are in Demand in 2024?

There’s no shortage of demand for certificate programs. The National Center for Education Statistics says the number of certificates awarded increased from 53% to 70% from 2011-12 to 2021-22.

Top certification categories in demand in 2024, according to the International Association of Career Coaches, include:

•   Information Systems and Cybersecurity ($73K to $123K average salary)

•   Project Management ($99K to $122K average salary)

•   Healthcare ($41K to $203K average salary)

•   Finance and Accounting ($72K to $111K average salary)

•   Human Resources ($65K to $128K average salary)

The top paying certifications include:

•   Certified Registered Nurse Anesthetist: $203K

•   Google Cloud Professional Data Engineer: $129K

•   Global Professional in Human Resources: $128K

•   AWS Certified Solutions Architect: $123K

•   Chartered Financial Analyst: $104K

•   Certified Professional in Healthcare Quality: $100K

Coursera’s top 10 courses with professional certification include Google Data Analytics, Google Project Design, Google UX Design, IBM Data Analytics, Google IT Support, Meta Marketing Analytics, IBM Cybersecurity Analyst, IBM Data Science, IBM Data Analyst Capstone Project, and International Business Essentials Specialization. 

How to Pay for Certificate Programs

When deciding how to pay for certificate programs, it’s important to explore all your options. Some might include savings, student loans, and other forms of financial aid.

To get a student loan for a certificate program, you can fill out the Free Application for Federal Student Aid (FAFSA®). The FAFSA will tell you what you qualify for, including federal student loans, grants, and scholarships.

You can also look into private student loans. Private student loans are given by banks, credit unions, and online lenders. While they don’t offer the same benefits and protections as federal student loans, they can be a good option for students who need funding to pay for their certificate program.

Recommended: Guide to Student Loans for Certificate Programs

The Takeaway

Certificate programs can start, enhance, or change careers for learners. They can prepare students for immediate placement in a specific trade without a college degree. They can also boost your career by providing specialized skills, enhancing your qualifications, and demonstrating expertise to employers.

Certificate programs are less expensive and shorter in duration than college degrees. To pay for a certificate program, you can look into employer assistance programs, use cash savings, or rely on federal or private student 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.


Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.

FAQ

What does a certificate program mean?

A certificate program is a short-term educational course designed to provide specialized skills or knowledge in a certain field. It typically takes a few months to two years and is aimed at enhancing career opportunities, professional development, or gaining expertise in a particular subject.

Is a certificate program worth taking?

A certificate program can be valuable for gaining specialized knowledge quickly and affordably. However, it’s important to consider the program’s relevance to your field and potential return on investment.

What are the benefits of attending a certificate program?

Attending a certificate program offers three key benefits: It provides specialized skills and knowledge in a short time, enhances your qualifications to improve job prospects, and offers a flexible, cost-effective alternative to a degree, allowing you to advance your career or switch fields efficiently.

Photo credit: iStock/PeopleImages

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs. SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility-criteria for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.

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

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.

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

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Sep
25
2024
How to Get Paid While On FMLA Maternity Leave

How to Get Paid While on Maternity Leave

By | Family Finances, relay | Comments Off on How to Get Paid While on Maternity Leave

While some states have passed legislation ensuring paid family leave for employees at larger companies, many new parents have to make do with a combination of vacation time, sick days, and short-term disability if they want to be paid after the birth of a baby.

Read on to find out what parents may be entitled to based on state regulations and company policy, and how you can maximize your benefits so you can get paid while on maternity leave.

Key Points

•   Some states have legislation ensuring paid family leave for employees at larger companies.

•   Paid maternity leave typically offers 60% to 80% of full-time pay.

•   Only 27% of civilian workers had access to paid family leave in 2023.

•   Federal workers receive 12 weeks of paid family leave.

•   The average company-provided paid maternity leave is 10.5 weeks.

What Is Paid Maternity Leave?

Paid maternity leave (or paternity leave) refers to the time off with pay that some companies grant employees welcoming a new baby or adopted child. Workers often receive only a percentage of their full-time pay, typically 60% to 80%, with limits based on the statewide average pay.

In the United States, businesses are not legally required to give employees paid maternity leave. According to the Bureau of Labor Statistics, only 27% of civilian workers had access to paid family leave in 2023. The U.S. is the only wealthy nation in the world that doesn’t mandate paid parental leave.

Fortunately, 13 states and the District of Columbia have passed legislation guaranteeing paid parental leave. Two other states (New Hampshire and Vermont) do not legally guarantee the right to paid leave but they do provide a voluntary opportunity for workers to purchase insurance that covers paid leave. Federal workers nationwide are granted 12 weeks of paid family leave.

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How Long Is Maternity Leave?

Companies that voluntarily provide employees paid parental leave offer an average of 10.5 weeks. Because many parents find this inadequate — experts recommend 3 to 6 months — even employees with paid leave often extend their leave with vacation time and sick days.

Globally, the average paid maternity leave is 18 weeks.

Benefits of Paid Family Leave

Research shows that paid family leave offers many benefits to parents and children. In one sense, the extra income helps families over the longer term, especially in lower-income households.

In another way, the time families spend together boosts the health of parents and children. Mothers are able to fully recover from childbirth, which can take six to eight weeks. And a child’s health is strengthened by the extra bonding time, regular breastfeeding, and reduced exposure to infectious disease.

Paid family leave may also cover other situations, including:

•   Adoption or foster child care

•   Care of a spouse, child, or parent with a serious health condition

•   A personal serious health condition

Recommended: How Much Does It Cost To Adopt a Child?

What Is the Family and Medical Leave Act (FMLA)?

The Family Medical Leave Act (FMLA) is a federal law passed in 1993 that grants unpaid but job-protected family leave for eligible employees of larger companies. Individuals can also take time off to care for any family member with a serious health condition.

The law is designed to help workers cope with emergencies that may occur without having to worry about losing their job. It also ensures that leave is available on a gender-neutral basis and supports equal employment opportunity for women and men.

FMLA Maternity Leave Eligibility Requirements

For an employee to qualify for FMLA benefits, both the employer and employee must meet certain requirements.

Employer Requirements

FMLA applies only to employers with 50 or more employees (who have worked at least 20 weeks in the current or preceding calendar year) within 75 miles.

Worker Requirements

An employee must have worked for their company for at least 12 months and worked 1,250 hours within the past 12 months. Some part-time workers may not qualify.

State Laws for Maternity Leave

As noted above, 13 states and the District of Columbia have passed paid parental leave legislation, including California, Colorado, Connecticut, Delaware, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New York, Oregon, Rhode Island, and Washington, plus the District of Columbia. Benefits and eligibility vary from state to state.

Ways to Extend Maternity Leave

Traditionally, women without adequate maternity benefits have made do by cobbling together vacation and sick days, short-term disability, and unpaid leave. More recently, working from home — sometimes on a reduced schedule — has allowed parents to extend their time at home with pay.

You may want to search for a parental leave consultant in your state, such as MilkYourBenefits.com in California. For a fee, these advisors can provide up-to-date information on family leave law and the benefits you may qualify for.

Recommended: Does Net Worth Include Home Equity?

How to Prepare for Maternity Leave

It’s a good idea to prepare financially for maternity leave well in advance. Put away money and save for your baby. Here’s a rough timeline to help you plan for the big event.

1. Research State Laws and Company Policies

Before you announce that you are pregnant, find out what your company and state rules are for maternity leave. You can also look into how your medical insurance will work while you are out and how to add your baby to your plan. Check whether your premiums will go up.

You don’t have to inform your employer at this early stage. Your company should have an employee handbook that outlines family leave benefits, or it might be written into your contract.

If you experience pre- or post-natal health problems (such as high blood pressure, gestational diabetes, preterm labor, or C-section), you might qualify for short-term disability. However, know that disability benefits for pregnancy-related reasons are available only in some states.

2. Develop a Maternity Leave Plan

Notify your employer of your pregnancy as you begin to show. Prepare for negotiating your leave by creating a plan for coverage while you are gone. For example, suggest a colleague you can train before you take leave. Explain how you plan to keep in touch with work while you are out. Read up on the motherhood penalty to understand how your career and financial situation may be affected and how you can prepare.

Company maternity leave policy is not set in stone. You can negotiate with your employer to extend your paid time off, or perhaps propose a work-from-home or part-time arrangement.

Your boss may not agree with your plan, so consider it a jumping off point. One tactic is to present to your employer two or three options that you can live with. Your supervisor may well pick one of them. Finally, put it in writing and have it signed so that your employer cannot renege.

3. Start Planning Your Budget

Once you have a general idea of your income during maternity leave, prepare a new budget that includes all of your anticipated expenses. Check out tips on how to budget on a fluctuating income and think about other things that may change your financial situation in the next year. Will you need a home loan while on maternity leave, for example?

A budget planner app can make the budgeting easier because it tracks your expenses for you and gives a breakdown of your spending by category. A grocery budget planner may come in handy as well.

4. Write a Plan for Your Replacement

Before you write out instructions for those who will cover for you while you are gone, have a discussion with your teammates to make sure they are on board. Include in your instructions the estimated dates that you will be gone, who will be responsible for what, and how you will communicate with your team (whether you will take part in meetings remotely, etc.).

The Takeaway

FMLA requires employers with 50 or more employees to offer up to 12 weeks of unpaid maternity leave, but only about one in four private companies offers paid maternity leave. Paid time may end up being cobbled together from a combination of vacation time, sick days, short-term disability, and work-from-home time. Make sure you carefully research the benefits that you’re entitled to based on state regulations and company policy.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

See exactly how your money comes and goes at a glance.

FAQ

What questions should I ask HR before going on maternity leave?

Ask HR what benefits you are entitled to and how your health insurance will change after the birth or adoption. It’s also important to ensure the required forms are completed and any negotiated agreements for maternity leave are laid out in writing and signed by your employer.

How should you prepare financially for maternity leave?

In an ideal world, you would start saving for the baby before you are pregnant. Once you have negotiated your maternity leave and have an idea of your income, create a new budget that includes baby expenses.

Also check whether you qualify for any tax credits such as the Child Tax Credit, the Child and Dependent Care Credit, or the Adoption Credit and Adoption Assistance Programs. Taking out a College 529 savings plan for your child may have tax advantages.

What is short-term disability insurance and how does it impact maternity leave?

Short-term disability is an insurance program offered by some employers. Policies vary, but you might be entitled to 50% of your income or more for up to six weeks after giving birth if you have a C-section or experience complications. Check with your staff handbook and your HR department to find out if you might be eligible for short-term disability.

Photo credit: iStock/Maria Korneeva

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Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

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

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

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