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.
• 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
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.
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.
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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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There are so many upsides to investing in your education — the personal enrichment and possibility of a bright and fruitful future being the most obvious. But, there are also some potential downsides that are hard to ignore, one of the main ones being the debt you may accrue.
If you’re a student loan borrower, you’ve probably noticed that your loans have a language all their own. Getting a grasp on terms like interest rate vs. APR, subsidized vs. unsubsidized loans, and fixed vs. variable interest rates can help you make more informed, confident decisions.
Instead of enrolling in Student Loan Language 101, you can use our quick reference guide to find some answers without information overload. Borrowing money can have long-term financial consequences, so it’s important to fully understand the fees and interest rates that will affect the amount of money you owe.
Here are a few of the most important terms to understand before you take out a student loan:
Common Student Loan Terminology
Academic Year
An academic year is one complete school year at the same school. If you transfer, it is considered two half-years at different schools.
Accrued Interest
Accrued interest is the amount of interest that has accumulated on a loan since your last payment. You can keep student loan accrued interest in check by making your payments on time each month. However, after a period of missed or reduced payments, accrued interest may be “capitalized,” which essentially means you have to pay interest on the interest!
Adjusted Gross Income (AGI)
AGI is an individual’s gross income, less any payroll deductions or adjustments. Income includes things like wages, salary, any interest or dividends you may earn, and any other sources of income. You can find your AGI on your federal income tax returns.
Aggregate Loan Limit
The aggregate loan limit is the maximum amount of federal student loan debt a borrower can have when graduating from school. The aggregate loan limits vary depending on whether you are a dependent or independent student.
Amortization refers to the amount of loan principal and interest you pay off incrementally over your loan term. Each student loan payment is a fixed amount that contributes to both interest and principal. Early in the life of the loan, the majority of each payment goes toward interest. But over time as you pay down your loan balance, the ratio shifts and most of the payment goes toward the principal.
Annual Percentage Rate (APR)
APR is the annual rate that is charged for borrowing, expressed as an annual a percentage. APR is a standardized calculation that allows you to make a more fair comparison of different loans. Consider the difference between interest vs. APR — APR reflects the cost of any fees charged on the loan, in addition to the basic interest rate. Generally speaking, the lower your APR, the less you’ll spend on interest over the life of the loan.
Annual Loan Limit
The yearly borrowing limit set for federal student loans.
Automated Clearing House (ACH)
An electronic funds transfer is sent through the Automated Clearing House system. The ACH is an electronic funds transfer system that helps your loan payment transfer directly from your bank account to your lender or loan servicer each month.
The benefits of ACH are two-fold — not only can automatic payments keep you from forgetting to pay your bill, but many lenders also offer interest rate discounts for enrolling in an ACH program.
Award Letter
An award letter is sent from your school and details the types and amounts of financial aid you are eligible to receive. This will include information on grants, scholarships, federal student loans, and work-study. You will receive an award letter for each year you are in school and apply for financial aid.
Award Year
The academic year that financial aid is applied to.
Borrower
The borrower is the person who took out a loan. In doing so, they agreed to repay the loan.
Campus-Based Aid
Some financial aid programs are administered by specific financial institutions, such as the federal work-study program. Generally, schools receive a certain amount of campus-based aid annually from the federal government. The schools are then able to award these funds to students who demonstrate financial need.
This refers to the cancellation of a borrower’s requirement to repay all or a portion of their student loans. Loan forgiveness and discharge are two other types of loan cancellation.
Capitalization
Capitalization is when unpaid interest is added to the principal value of the student loan. This generally occurs after a period of non-payment such as forbearance. Moving forward, the interest will be calculated based on this new amount.
Capitalized Interest
Accrued interest is added to your loan’s principal balance, typically after a period of non-payment such as forbearance. When the interest is tacked onto your principal balance, your interest is now calculated on that new amount.
Most student loans begin accruing interest as soon as you borrow them. While you are often not responsible for repaying your student loans while you are in school or during a grace period or forbearance, interest will still accrue during these periods. At the end of said period, the interest is then capitalized, or added to the principal of the loan.
When interest is capitalized, it increases your loan’s principal. Since interest is charged as a percent of principal, the more often interest is capitalized, the more total interest you’ll pay. This is a good reason to use forbearance only in emergency situations, and end the forbearance period as quickly as possible.
Cosigner
A cosigner is a third party, such as a parent, who contractually agrees to accept equal responsibility in repaying your loan(s). A student loan cosigner, also known as an endorser, can be valuable if your credit score or financial history are not sufficient enough to allow you to borrow on your own.
With a cosigner, you are still responsible for paying back the loan, but the cosigner must step in if you are unable to make payments. A co-borrower applies for the loan with you and is equally responsible for paying back the loan according to the loan terms on a month-to-month basis
Consolidation (through the Direct Loan Consolidation Program)
Student loan consolidation is the act of combining two or more loans into one loan with a single interest rate and term. The resulting interest rate is a weighted average of the original loan rates — rounded up to the nearest one-eighth of a percentage point.
Only certain federal loans are eligible for the Direct Consolidation Program. Consolidating can make your life simpler with one monthly bill, but it may not actually save you any money. You may be able to reduce your monthly payments by increasing the loan term, but this means you’ll pay more interest over the life of the loan.
Consolidation (through a Private Lender)
Consolidation is the act of combining two or more loans into one single loan with a single interest rate and term. When you consolidate loans with a private lender, you do so through the act of refinancing, so you’re given a new (hopefully lower) interest rate or lower payments with a longer term.
By refinancing, you may be able to lower your monthly payments or shorten your payment term. (Note: You may pay more interest over the life of the loan if you refinance with an extended term.)
Cost of attendance is the estimated total cost for attending a college based on the cost of tuition, room and board, books, supplies, transportation, loan fees, and miscellaneous expenses. Schools are required to publish the cost of attendance.
Credit Report
Credit reports detail an individual’s bill payment history, loans, and other financial information. These reports are used by lenders to evaluate your creditworthiness.
Default
Default is failure to repay a loan according to the terms agreed to in the promissory note. Defaulting on your student loans can have serious consequences, such as additional fees, wage garnishment, and a significant negative impact on your credit. It’s always better to talk to your lender about potential hardship repayment options, such as deferment or forbearance, before defaulting on a loan.
Deferment
Deferment is the temporary postponement of loan repayment, during which time you may not be responsible for paying interest that accrues (on certain types of loans). Student loan deferment can be useful if you think you’ll be in a better place to pay your loans at a later date. However, deferment is usually only available for certain federal loans. To potentially cut down on interest, it may be wise to weigh your deferment options.
Delinquency
When you miss a student loan payment, the loan becomes delinquent. The loan will be considered delinquent until a payment is made on the loan. If the loan remains in delinquency for a specified period of time (which varies for federal vs. private student loans), it may enter default.
Direct Loan
The Direct Loan program is administered via the U.S. Department of Education. There are four main types of direct loans including Direct Subsidized Loans, Direct Unsubsidized Loans, Direct PLUS Loans, and Direct Consolidation Loans.
Direct PLUS Loan
Direct PLUS Loans are types of federal loans that are made to graduate or professional student borrowers or to the parents of undergraduate students. Direct PLUS Loans made to parents may be referred to as Parent PLUS Loans.
Disbursement
When funds for a loan are paid out by the lender.
Discharge
Student loan discharge occurs when you are no longer required to make payments on your loans. Typically, student loan discharge occurs when there are extenuating circumstances, such as the borrower has experienced a total and permanent disability or the school at which you received your loans has closed.
Discretionary Income
Discretionary income is the money remaining after you pay for necessary expenses. An individual’s discretionary income is used to help determine their loan payments on an income-driven repayment plan.
Enrollment Status
Determined by the school you attend, your enrollment status is a reflection of where you stand with the school. It includes full-time, half-time, withdrawn, and graduated.
Expected Family Contribution (EFC)
Now known as the Student Aid Index (SAI), it’s an estimation of the amount of money a student and their family is expected to pay out of pocket toward tuition and other college expenses.
Federal Work-Study
A type of financial aid, students who demonstrate financial aid may qualify for the federal work-study program, where they work part-time to earn funds to help pay for college expenses.
Financial Aid
Financial aid is funds to help pay for college. Financial aid includes grants, scholarships, work-study, and federal student loans.
Financial Aid Package
An overview of the types of financial aid you are eligible to receive for college, financial aid packages provide information on all types of federal financial aid and college-specific aid such as scholarships, grants, work-study, and federal student loans.
Fixed interest rates remain the same for the life of the loan. The interest rate does not fluctuate.
Forbearance
Forbearance is the temporary postponement of loan repayment, during which time interest typically continues to accrue on all types of federal student loans. If your student loan is in forbearance, you can either pay off the interest as it accrues or you can allow the interest to accrue and it will be capitalized at the end of your forbearance.
Use forbearance wisely, because interest that accrues during the forbearance period is typically capitalized, making your loan more expensive. If you can afford to make even small payments during forbearance, it can help keep interest costs down.
You will usually have to apply for student loan forbearance with your loan holder and will sometimes be required to provide documentation proving you meet the criteria for forbearance. For a loan to be eligible for forbearance, there must be some unexpected temporary financial difficulty.
Forgiveness
Loan forgiveness is another situation in which you are no longer responsible for repaying all or a portion of your student loans. Public Service Loan Forgiveness and Teacher Loan Forgiveness are two types of loan forgiveness programs in which your loans are forgiven after meeting specific requirements, such as working in a qualifying job and making qualifying loan payments.
In August 2022, President Biden announced a loan forgiveness plan for borrowers with student loan debt. Under this plan, borrowers earning up to $125,000 (when filing taxes as single) may qualify for up to $10,000 in student loan forgiveness. He also announced that Pell Grant recipients may qualify to have up to $20,000 of their loans forgiven.
Free Application for Federal Student Aid (FAFSA)
This is the application students use to apply for all types of federal student aid, including federal loans, work-study, grants, and scholarships. The FAFSA must be completed for each year a student wishes to apply for financial aid.
The grace period is a period of time after you graduate, leave school, or drop below half-time during which you’re not required to make payments on certain loans. Some loans continue to accumulate interest during the grace period, and that interest is typically capitalized, making your loan more expensive.
Grad PLUS Loans
Another term to refer to a Direct PLUS loan, specifically one borrowed by a graduate or professional student.
Graduate or Professional Student
A student who is pursuing educational opportunities beyond a bachelor’s degree. Graduate and professional programs include master’s and doctoral programs.
Graduated Repayment Plan
A type of repayment plan available for federal student loan borrowers. On this repayment plan, loan payments begin low and increase every two years. This plan may make sense for borrowers who expect their income to increase over time.
Grant
Grants are a type of financial aid that does not need to be repaid. Grants are often awarded based on financial need or merit-based.
Students who are enrolled at least half-time in school are eligible to defer their federal student loans. This type of deferment is generally automatic for federal student loans. Note that unless you have a subsidized student loan, interest will continue to accrue during in-school deferment.
Interest
Interest is the cost of borrowing money. It is money paid to the lender and is calculated as a percentage of the unpaid principal.
Interest Deduction
A tax deduction that allows you to deduct the student loan interest you paid on a qualified student loan for the tax year. Interest paid on both private and federal student loans qualifies for the student loan interest deduction.
Lender
The financial institution that lends funds to an individual borrower.
Loan Period
A loan period is the academic year for which a student loan is requested.
Loan Servicer
A loan servicer is a company your lender may partner with to administer your loan and collect payments. For questions about your student loan payments or administrative details such as account information, you should contact your student loan servicer.
Origination Fee
Some lenders charge an origination fee for processing a loan application, or in lieu of upfront interest. To minimize incremental costs on your loan, look for lenders that offer no or low fees.
Part-Time Enrollment
Students who are enrolled in school less than full-time are generally considered part-time students. The number of credit hours required for part-time enrollment are determined by your school.
Pell Grant
Pell Grant is awarded by the federal government to undergraduate students who demonstrate exceptional financial need.
Perkins Loan
Perkins Loans were a type of federal loan available to undergraduate and graduate students who demonstrated exceptional financial need. The Perkins Loan program ended in 2017.
PLUS Loans
Another way to describe Direct PLUS Loans, PLUS Loans are federal loans available for graduate and professional students or the parents of undergraduate students.
Prepayment
Prepayment is paying off the loan early or making more than the minimum payment. All education loans, including private and federal loans, allow for penalty-free prepayment, which means you can pay more than the monthly minimum or make extra payments without incurring a fee. The faster you pay off your loan, the less you’ll spend on interest.
Prime Rate
Prime rate is the interest rate that commercial banks charge their most creditworthy customers. The basis of the prime rate is the federal funds overnight rate. The federal funds overnight rate is the interest rate that banks use when lending to each other. The prime rate can be used as a benchmark for interest rates on other types of lending.
Principal
Principal is the original loan amount you borrowed. For example, if you take out one $100,000 loan for grad school, that loan’s principal is $100,000.
Private Student Loan
A private student loan is lent by a private financial institution such as a bank, credit union, or online lender. These loans can be used to pay for college and educational expenses, but are not a part of the Federal Direct Loan Program. These loans don’t offer the same borrower protections available to federal student loans — like income-driven repayment plans or deferment options.
Promissory Note
A promissory note is a contract that says you’ll repay a loan under certain agreed-upon terms. This document legally controls your borrowing arrangement, so read it carefully. If you don’t fully understand the agreement, contact your lender before you sign.
Repayment
Repayment is repaying a loan plus interest.
Repayment Period
The agreed upon term in which loan repayment will take place.
Scholarship
A scholarship is a type of financial aid which typically doesn’t need to be repaid. Scholarships can be awarded based on merit.
Secured Overnight Financing Rate (SOFR)
The Secured Overnight Financing Rate is an interest rate benchmark that is commonly used by banks and other lenders to set interest rates for loans. The SOFR is the cost of borrowing money overnight collateralized by Treasury securities. Starting in June 2023, the SOFR will begin replacing the LIBOR as a benchmark interest rate.
Stafford Loans
Stafford loans were a type of federal student loan made under the Federal Family Education Loan Program. Beginning in 2010, all federal student loans were loaned directly through the William D. Ford Federal Direct Loan Program.
Standard Repayment Plan
The Standard Repayment Plan is one of the repayment plans available for federal student loan borrowers. This repayment plan consists of fixed payments made over a 10 year period.
Student Aid Report
After submitting the FAFSA, you will receive a student aid report (SAR). The SAR is a summary of the information you provided when filling out the FAFSA.
Student Loan Refinancing
Student loan refinancing is using a new loan from a private lender to pay off existing student loans. This allows you to secure a new (ideally lower) interest rate or adjust your loan terms.
Subsidized Loan
A Direct Subsidized Loan is a type of federal loan available to undergraduate students where the government covers the interest that accrues while the student is enrolled at least half-time, during the grace period, and other qualifying periods of deferment.
Term
Term is the expected amount of time the loan will be in repayment. Generally speaking, a longer term will mean lower monthly payments but higher interest over the life of the loan, while a shorter term will mean the opposite. Loan terms vary by lender, and if you have a federal loan, you are usually able to select your student loan repayment plan.
Tuition
The cost of classes and instruction.
Undergraduate Student
A college student who is enrolled in a course of study, typically lasting four years, with the goal of receiving a bachelor’s degree.
Unsubsidized Loan
A Direct Unsubsidized Loan is a type of federal loan available to undergraduate or graduate students. The major difference between subsidized vs. unsubsidized loans is that the interest on unsubsidized loans is not paid for by the federal government.
Variable Interest Rate
Unlike a fixed interest rate, a variable interest rate fluctuates over the life of a loan. Changes in interest rates are tied to a prevailing interest rate.
The Takeaway
Understanding key terms is essential for navigating student borrowing. Prioritizing sources of financial aid that don’t need to be repaid like scholarships and grants can be helpful. But these don’t always meet a student’s financial needs.
Federal student loans have low-interest rates and, for the most part, don’t require a credit check. Plus they have borrower protections in place, like income-driven repayment plans and deferment options, that make them the first choice for most students looking to borrow money to pay for college.
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 are common student loan terms?
Common student loan terms include the principal (the original borrowed amount), interest rate (the cost of borrowing), and repayment term (the length of time to repay the loan). Other terms involve grace periods (time before payments start after graduation), deferment, forbearance (temporary relief from payments), and fixed or variable interest rates.
What are the most important loan terms to understand?
It’s important to understand terms associated with borrowing because you’ll be required to repay the loan. Understand the interest rate and any fees associated with the loan.
What does APR mean in relation to student loans?
APR stands for annual percentage rate. It’s a reflection of the interest rate on the loan in addition to any other fees associated with borrowing. APR helps make it easier to compare loans from different lenders.
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After all the work that goes into applying to college — researching schools, submitting transcripts, taking entrance exams, and writing essays — students probably welcome a feeling of relief once that application is officially submitted.
The relief may be instant, but also fleeting. The next phase of getting into college can be painstaking because it’s the waiting phase. Acceptance letters don’t have one standard date for being sent out. Admissions decisions can be delivered as early as December for early action or early decision applicants and as late as April for regular admission applicants.
Learn more on different types of college admissions applications and see how their submission deadlines and acceptance date periods differ.
Key Points
• College acceptance timelines vary based on the type of application submitted.
• Early decision and early action applicants typically receive responses in December.
• Regular decision applicants usually hear back by April, while rolling admissions can take four to six weeks after applying.
• Waitlisted students may have to wait until after May 1 (decision day) or even until the fall semester starts.
• Paying for college involves multiple options, including federal student aid, scholarships, and private student loans.
Types of Applications
Just as there isn’t a standard date for acceptance letters to be sent out, there isn’t one standard submission date for applications, either. There are a few early submission options available, as well as regular submission and rolling admissions. The due date of the application will depend on which type of application is being submitted, and this will also determine when you receive the school’s decision.
Options for applying early include early decision, early action, and single-choice early action.
Early Decision
The early decision application is binding, meaning that students who are accepted are committed to enrolling. Because this application is binding, students can only apply to one school as an early decision. These applications are due in November and the decisions go out in December. If students decide to apply with this early decision option, this school should be their top choice and the one they’d prefer to go to over all others.
Early Action
The early action application is similar to the early decision in regard to the due date (due in November) and decision timeframe (decisions go out in December), but it differs in that it isn’t binding. It’s okay to apply to multiple schools via early action, and if you’re accepted you’re not required to enroll until the normal reply date of May 1.
This option is similar to the early decision in that students can only apply to one school this way, but it’s not binding. If students choose to apply to a school via single-choice early action, it’s a way of saying they’re especially interested in attending that school. The deadline and acceptance period is the same as the other early options.
When it comes to applying early, no matter which type of early application you choose, the applications will usually be due in November and decisions will be sent out in December.
Regular Decision
Regular decision college applications are the most common of the application options. For these applications, the deadline is usually in January or February and the decision letters go out by April. The deadline for submitting your application will differ between schools, so make sure to check the website for each school and mark the dates on a calendar.
Rolling admission allows students to apply until the school runs out of space. Applications may be accepted until April or later. Students are encouraged to apply using the same deadline as the regular decision, though, to have a better chance of being accepted before the colleges run out of spaces.
Some colleges will also have differing numbers of spots open based on specific majors. If the major the student lists on an application is impacted at some schools, it might be better to apply by the deadline for regular applications since impacted majors are likely to have more students apply than there are spots available. The average turnaround for rolling admission is about four to six weeks, so the date that decisions are sent out will depend on when students submit their application.
After waiting for one to two months to receive a school’s decision, it can be frustrating to open that letter or email and see that there’s more waiting to do. Being on the school’s waitlist isn’t necessarily bad, however.
There are many reasons that students end up on the waitlist. They may have met the academic criteria to get into the school, but the school might not have space yet for these students.
Most schools will require students to contact them and accept their spot on the waitlist to be considered for admission, so don’t forget that step.
Since the number of students that can be accepted from a waitlist depends on the number of students who choose to enroll, students on the waitlist won’t hear back until after decision day.
Decision day is May 1, and it’s the day that seniors are required to notify their school that they accept their admission and will enroll.
After the decision day, the schools will know how many students will enroll, and then they’ll be able to start accepting students from the waitlist if there’s space. This means students on the waitlist can expect to hear back from their school by the end of May, but sometimes it can take up until the fall semester starts to hear back.
Paying for College
Planning for college goes beyond getting accepted. Once accepted, students have to figure out how to pay for college, including tuition, books, and housing. Luckily, there are many good options for financing higher education, which can include financial aid from the government (grants and/or loans), scholarships, and private loans.
Financial Aid
The Free Application for Federal Student Aid (FAFSA®) is the form students will need to complete as the first step in applying for student aid. Depending on a student’s Student Aid Index (SAI), they may be eligible for federal student loans, grants, or work-study.
Grants don’t usually have to be repaid, but loans do. The amount of aid students can receive from the federal government will depend on their financial need, so not everyone will be eligible.
Federal student loans come with some benefits that are not guaranteed by private student loans, like lower fixed interest rates and flexible repayment options. Federal loans also offer borrower protections, such as deferment and forbearance, and student loan forgiveness programs for those that qualify.
Scholarships
Scholarships can be merit-based, meaning they’re awarded based on some kind of achievement, or need-based. There are many scholarships available, and it’s perfectly acceptable to apply to as many as possible to further the chances of receiving one — or more. Some scholarships are specific to a school or the local community, so check your school’s website for information.
Private Student Loans
Private student loans may be another option for paying for college. Since every financial institution is different, do some research and explore options available. Loan amounts and rates will depend on an applicant’s financial situation, including their credit history and income. Those with little of either may need a cosigner to be approved for a private loan.
Even if the cost of attendance might be covered by scholarships, grants, or federal student loans, there may be other costs of living a student might need assistance for. That’s where private student loans can be helpful when considered responsibly.To learn more about private student loans, college-bound students might want to check out this guide to private student loans.
Keep in mind, though, that private student loans do not offer the same protections as federal student loans, so it’s best to explore federal loans before relying on private ones.
The Takeaway
It can take a few weeks to a few months to hear back for a college admissions decision, depending on the type of application you submitted. Early applicants — such as early decision or early action — will generally hear back in December while regular decision applicants will receive their admission decision in April.
Taking some time to think about college costs and how to pay for the upcoming years of education can be a wise way to spend that time waiting for all of those acceptance letters to come rolling in. Options for paying for college include cash savings, grants and scholarships, federal student loans, and 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 to hear back after applying to college?
It usually takes four to six weeks to hear back after applying to college, depending on the school’s admissions process and the type of application. Early decision applicants may receive a response in November or December, while regular decision applicants typically hear back between March and April.
What’s the difference between early decision and early action?
Early decision is a binding agreement where, if accepted, you must attend the college, while early action is non-binding, allowing you to apply to multiple schools and decide later.
Do colleges send rejection letters?
Yes, colleges send rejection letters to applicants who are not accepted. These letters are typically sent around the same time as acceptance letters, either by mail or email, depending on the school’s process.
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).
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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.
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If you work hard amassing miles and points, it’s worthwhile to know that while some credit card rewards die with you, there are issuers who allow redemptions or transfers after death.
Here’s a closer look at what happens to credit card rewards when you die, as well as what steps you can take to avoid forfeiting your rewards.
What Are Credit Card Rewards?
Credit card rewards are a type of currency that can come in the form of credit card points, miles, or cash back rewards. They’re designed to incentivize cardholders to make eligible purchases on their rewards credit card.
As you make purchases and earn various credit card rewards, you can choose to hold onto the rewards in your account until you have enough to redeem toward a high-value purpose. Each rewards program like SoFi Plus lets cardholders redeem rewards in different ways, depending on its rules. Common redemption options include statement credits, travel bookings and reservations, special experiences, merchandise, gift cards, and more.
What Happens to Your Credit Card Rewards Upon Death?
Having a stockpile of credit card rewards after death might lead to a sticky situation for your surviving family. Akin to your credit card debt after death not passing on to your survivors in some states, some credit card rewards “die with you” and can’t be redeemed or transferred to your family or estate.
Conversely, some credit card issuers, like American Express, offer a limited period during which authorized trustees of your estate can redeem unused rewards. Certain programs that permit reward redemptions or transfers after death might require the outstanding account balance to be paid in full.
In other words, what happens to your credit card rewards after you pass on depends on the terms laid out in your rewards program agreement. Some rewards terms specifically state that rewards aren’t the property of the cardholder and can’t be transferred through inheritance.
What To Do With Credit Card Rewards if the Account Holder Dies
If you know that your deceased loved one amassed credit card points, miles, or cash back rewards, there are a few steps you can take to address it:
1. Check on accounts and rewards balances. If your deceased loved one gave you access to their account before their death, log in to get an overview of their remaining rewards balances across all accounts. If you don’t have access to their accounts, proceed to the next step.
2. Prepare paperwork. You’ll likely need to provide proof of the primary cardholder’s death, such as a copy of their death certificate. Additionally, you might need to provide the name and contact information of the authorized trustee, letter of testamentary, or other details.
3. Contact the card issuer. You must inform the card issuer in the event of a primary cardholder’s death. Supply the necessary documentation you’ve gathered, and inquire about your options to redeem the rewards.
Generally, credit card companies offer at least one of a few options, though how a credit card works will vary by issuer. The rewards might be forfeited if they’re non-transferable or expire upon the cardholder’s death. Some credit card terms automatically convert the rewards into a statement credit, while other issuers allow rewards redemption or transfers to another existing, active account.
Ways You Can Avoid Forfeiting Your Credit Card Rewards
You’re ultimately at the mercy of a reward program’s user agreement in terms of what to do with credit card rewards after death. However, planning ahead can help you avoid relinquishing earned rewards.
Not Hoarding Your Points
To avoid facing a scenario in which your credit card rewards die with you, make an effort to redeem credit card points or miles on a rolling basis.
For example, at the end of each year, use credit card rewards to travel for less money or apply them to your account as a statement credit. Keep in mind that different redemption options have varying valuations, so look into which redemption strategy makes sense for your situation.
Choosing Cards With Favorable Death Terms
Although a particular program might offer enticing rewards — such as the chance to enjoy credit card bonuses — it might not be advantageous if the program has strict terms regarding a cardholder’s death.
American Express, for instance, has relatively lenient terms when dealing with the rewards balances of a deceased cardholder.
If you have multiple rewards credit cards in your rotation, using a reward tracking app can help you and your surviving family organize and track your rewards. Apps like AwardWallet and MaxRewards can let you easily see all of your rewards in one view.
Naming a Beneficiary in Your Will
Although it’s not a foolproof way to avoid forfeiting your credit card rewards, adding a beneficiary to your will is a smart move. This way, if your card issuer allows rewards transfers or redemptions by authorized individuals, your beneficiary is formally named on your estate documents as your desired recipient.
The Takeaway
Since there’s no way to know when an accident or unforeseen health issue will result in your death, it’s best to be prepared. If possible, redeem earned credit card rewards in a timely manner so you can enjoy them in life. Or consider such steps as naming a beneficiary in your will or racking up rewards on a card with lenient transfer policies.
Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.
FAQ
Can I transfer points from the account of a late family member?
Whether you’re allowed to transfer points from your deceased relative’s rewards credit card account depends on the card program’s rules. Some banks allow points transfers, while other programs state that points are non-transferable. Contact the card issuer’s customer support team to learn about its point transfer policy.
Can an authorized user use credit card rewards upon the death of the account owner?
It depends. Not all credit card rewards programs allow authorized users to use a primary cardholder’s earned rewards. Those that do might have restrictions on how and when rewards can be redeemed after a primary user’s death, if at all.
What happens to the miles when someone dies?
Miles earned by a deceased primary credit card rewards cardholder might be forfeited, transferred, or redeemed by the estate or surviving family, depending on the rewards program. Terms vary between card issuers, and even across travel rewards programs, so call the program’s support team to learn about its terms.
Can estates redeem points after death?
Some rewards credit cards allow estates to redeem points after the primary cardholder’s death. American Express, for example, allows estates to request points redemption by submitting a formal written request with documentation.
Photo credit: iStock/supatom
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.
Grants, scholarships, and student loans can all help you pay for your education. But there are key differences between the three — namely, how they award funds and whether you need to repay those funds. Grants and student loans often depend on financial eligibility and need, while scholarships tend to be merit-based. And while both grants and scholarships don’t need to be repaid, student loans do.
Here’s a breakdown of how student loans and grants vs. scholarships work, as well as some of their key differences.
Key Points
• Grants and scholarships don’t need to be repaid; student loans do.
• Grants are usually need-based, while scholarships are typically merit-based.
• Student loans can be federal or private, and may have subsidized or unsubsidized interest terms.
• FAFSA is required to apply for most federal aid, including grants and loans.
• Scholarships and grants should be maximized first; loans can cover any remaining costs.
What Is a Student Loan?
A student loan is money borrowed for educational expenses that has to be paid back (usually with interest). You can take out a loan from a bank, an online lender, a college or university, or the state or federal government. If you’re wondering about grants vs. loans, both are based on financial need, but what sets them apart is that grants don’t need to be repaid and student loans do.
So, how do student loans work? Loan terms for college can vary based on a few different factors: whether they’re federal (offered by the government) or private (offered by a financial institution), whether you choose fixed or variable interest rates, how long it takes to pay the loan back, and how much can be borrowed. Loans offered to you could be based on your credit score or the personal financial information you supply on the Free Application for Federal Student Aid (FAFSA®).
How to Apply for Student Loans
To determine your eligibility for a student loan from the federal government, you must fill out the FAFSA. States and colleges may use information from your FAFSA to determine state and school-specific aid, as will some private financial aid providers.
• Your Social Security number or alien registration number (if you are not a U.S. citizen)
• Your driver’s license number (if you have one)
• Federal income tax returns, W-2s, and other records of money earned
• Bank statements and records
• Records of untaxed income (if applicable)
• Information on account balances, investments, and assets
• FSA ID for electronic signature (this is your username and password needed to access and submit your FAFSA online)
If you are applying as a dependent student, you will need all of the above information from your parent(s) as well.
What Is the Difference Between Unsubsidized and Subsidized Loans?
There are two primary types of federal student loans: subsidized loans and unsubsidized loans. The main difference between unsubsidized and subsidized loans is how the interest accumulates through the life of the loan.
Unsubsidized loans are available to undergraduate and graduate students, regardless of any financial need. An unsubsidized loan starts accruing interest as soon as the loan is dispersed. That means if you accept an unsubsidized loan during your freshman year of college, the loan will accumulate interest throughout the rest of your time in school.
You are responsible for starting to pay back an unsubsidized loan six months from when you graduate or if you drop below half-time enrollment. Because of the interest capitalizing on your unsubsidized loan from the day it’s disbursed, your loan balance will likely be more than what you originally borrowed if you don’t make interest payments while you’re in school.
A subsidized loan, on the other hand, is a need-based loan available to undergraduate students on which interest accumulates only after you begin repayment. The government will pay the interest while you’re in school at least half-time or until you graduate and for the first six months after, as well as during a period of deferment.
Like unsubsidized loans, repayment for a subsidized loan typically occurs after a six-month grace period from when you graduate or drop below half-time enrollment. You are responsible for paying back the total outstanding balance, plus interest. There are plenty of ways to pay off federal loans, from the standard 10-year repayment plan to income-based repayment plans.
Pros and Cons of Loans
Pros of student loans include:
• Access to education: Enables students to attend college who otherwise might not be able to afford it.
• Flexible repayment options: Federal student loans offer flexible repayment options, including income-based repayment plans.
• Credit building: Paying back student loans on time each month can help establish and build credit history.
• Fixed interest rates: Federal student loans (and some private student loans) offer fixed interest rates, making monthly payments predictable each month.
Cons of student loans include:
• Debt burden: Student loans increase debt load and debt-to-income ratio, which can lead to financial strain and/or make it hard to qualify for other loans in the future.
• Interest accumulation: Interest starts accumulating immediately on unsubsidized loans and private loans. This increases the overall amount that needs to be repaid.
• Stress and anxiety: Debt of any kind, including student loans, can cause significant stress and anxiety, which could impact your overall well-being.
What Is a College Grant?
A grant can be beneficial to students because it is financial aid that does not have to be repaid. That’s one main difference between a grant vs. a loan. Grants may be obtained directly from your university, the federal government, state government, or a private or nonprofit organization. It is important to note that you may be required to meet certain financial eligibility criteria, depending on the grant.
When it comes to a grant vs. a scholarship, grants are typically awarded based on need, not on academic achievement or merit. Scholarships are based on merit.
One popular type of college grant is the Pell Grant. Pell Grants are given to undergraduate students with significant financial need, which means they are typically awarded to low-income students.
Do You Have to Pay Back Grants?
In most cases, you do not need to pay back grants as long as you maintain eligibility. If, for example, you decide to drop out of school, you might be required to pay back certain grants.
To apply for grants, start by researching and identifying grants for which you qualify, focusing on those specific to your field of study, background, or needs. Visit the official websites of grant providers, such as federal and state governments, educational institutions, and private organizations, and carefully review their eligibility requirements and application deadlines. Prepare all necessary documents, which may include academic transcripts, letters of recommendation, a personal statement, and financial information.
Also, you’ll need to fill out the FAFSA if you are in the United States, as it is often required for federal and state grants.
Pros and Cons of Grants
Pros of grants include:
• No repayment required: Grants are essentially free money that does not need to be repaid, making them highly beneficial for students.
• Financial relief: Provide significant financial assistance, reducing the amount of student loans needed and easing the financial burden of education.
• Encourages academic excellence: Some grants are merit-based, encouraging students to maintain high academic performance.
Cons of grants include:
• Highly competitive: Grants are often limited in number and highly sought after, making them difficult to obtain.
• Strict eligibility requirements: Many grants have specific criteria that must be met, which can exclude a significant number of applicants.
What Is a Scholarship?
Scholarships are a great way to finance higher education, simply because there are thousands of available scholarships based on financial need or merit. That’s the main difference between scholarship and grant: Scholarships are often merit-based. Scholarships can come from a variety of sources and typically do not need to be repaid.
How to Apply for Scholarships
It can be easy to feel overwhelmed with the amount of time it takes to hunt for scholarships — here are a few tips to help you find scholarships to apply for:
• Start by combing scholarship databases for any scholarship that may align with your interests or background. Don’t be afraid to tell people you know that you are looking for scholarships either — your best friend or neighbor may have heard of a scholarship you could be eligible for.
• Take a look at your academic achievements. Have you maintained a certain GPA or did you make the Dean’s List? There could be a scholarship for that. List out your community involvements and start researching whether your softball league, for example, offers scholarships.
• Make a list of all the things that make you who you are. List out your heritage and things that your family members have been involved with over time. Perhaps your grandmother belongs to the National Corvette Club or your grandfather was a veteran, both of which could present scholarship opportunities.
Once you have your list, it helps to stay organized by adhering to deadlines and application requirements. Stick to what feels doable so you can knock out several applications in a row. Scholarship application formats vary from essay writing to creating a video to simply filling out a form.
Important documents you might need when applying for scholarships include birth certificates, SAT/ACT scores, academic transcripts, certifications, or ID cards. Be sure you have those handy prior to hitting search engines and applying for the next available scholarship you find.
Pros and Cons of Scholarships
Pros of scholarships include:
• No repayment needed: Scholarships provide financial assistance that does not need to be repaid, reducing the overall cost of education.
• Merit recognition: Often awarded based on academic, athletic, or other achievements, recognizing and rewarding students for their talents and hard work.
• Boosts resume: Being awarded a scholarship can enhance a student’s resume, showcasing their achievements and dedication.
• Encourages academic excellence: Incentivizes students to maintain high academic standards and strive for excellence in their endeavors.
Cons of scholarships include:
• Highly competitive: Scholarships can be very competitive, with many applicants vying for a limited number of awards.
• Strict criteria to qualify: Strict eligibility criteria may exclude many students from qualifying for certain scholarships.
Grants vs Scholarships vs Loans
Now that you have a grasp on all three forms of financial aid, let’s examine the main difference between scholarships, grants, and student loans.
What Is the Difference Between a Loan and a Grant?
Here’s what makes grants vs. loans different: A student loan — whether it is unsubsidized or subsidized, federal or private — must be repaid with interest. A grant typically does not need to be repaid as long as you maintain eligibility requirements.
What Is the Difference Between a Grant and a Scholarship?
When looking at a grant vs. scholarship, the primary difference between the two is that a grant is typically need-based while a scholarship is usually merit-based. You might receive a scholarship for a number of things, such as high academic achievement, organization or club involvement, or ancestry. A grant is typically awarded based on financial need and can be specific to certain degrees, students, and programs.
How Is a Student Loan Different from a Scholarship?
A student loan is different from a scholarship primarily in that a student loan must be repaid and a scholarship does not need to be repaid. Scholarships can come from a variety of sources, including nonprofit organizations, private companies, universities and colleges, and professional and social organizations. Student loans may come from private lenders, federal or state governments, or colleges and universities.
The two types of student loans are federal student loans and private student loans. Federal student loans should be utilized first, as they typically come with better interest rates and borrower protections, such as income-driven repayment plans and student loan deferment. Private student loans can help fill in the gaps between federal loans, grants, and scholarships.
When we say no required fees we mean it.
No late fees, & insufficient fund
fees when you take out a student loan with SoFi.
The Takeaway
With a good understanding of scholarships vs. grants vs. student loans under your belt, you can better determine which form of financial aid is right for your situation. Remember that you don’t necessarily have to choose just one.
Once you’ve maximized the money you can get from grants or scholarships that you likely won’t have to pay back, you may consider bridging the remaining gap by taking out a student loan.
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.
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.
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.
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.
