When you fill out your college applications, you may have the option of declaring your intended major. Selecting a major at this stage of the game often isn’t required, and many students don’t. However, you may be wondering –- will declaring a major improve (or potentially hurt) your chances of getting into a college?
Whether it’s better to begin college as an undecided major or select a major before you arrive on campus will depend on your situation, as well as the school and program you are applying to. Here’s what you need to know about applying to college with or without declaring a major.
Declaring a major can have varying levels of importance, depending on which school you’re applying to. At some schools, choosing a major merely indicates an interest in a field of study.
It could be okay to swap majors later as well, and the major you declare on your application could have little to no bearing on your chances of getting admitted to the school.
However, at some schools, and even within particular programs, declaring a major is a much bigger decision. It indicates that the student only wants to attend for that specific program and could come with more weight on whether the applicant is accepted or not.
It can be a good idea to inquire further from the admissions department at each school you are applying to, or even reach out to the department heads of their prospective majors to learn more.
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What It Means to Be Undeclared
Going into the application process as an undeclared student can be okay, so long as you understand how it could affect your chances of admission. Applying undeclared indicates to a school that you aren’t quite ready to commit to a program yet.
However, by applying at all, you are still showing your commitment and desire to attend that college or university, which may matter most.
If you’ve known what you’ve wanted to do since childhood — and there is absolutely nothing standing in the way of your goals — then you may want to go ahead and make that declaration. Manifest it into the universe by saying, “yes, I will study this and only this,” and mark it on every application.
Of course, there are also other reasons to declare. Some programs require choosing a major for admittance. This is typical of particularly competitive programs. This way, admissions officers know who is serious and who isn’t.
Some programs within specific universities may have additional requirements or supplemental essays with student applications. For example, Yale and Cornell both have supplemental essays for students applying to engineering programs. UPenn even requires a separate application for its international business program, the Huntsman.
It’s a good idea to check in with the college or university you are applying to and make certain your application is in order, particularly if you intend on applying to a rigorous or competitive program.
One more reason you may want to consider declaring a major is if you are going to apply for any study-specific scholarships. By declaring a major, you may become eligible for additional financial support including department-specific aid, housing, or professional development that are open only to specific majors.
When It’s OK to Remain Undeclared
Look, no one is going to fault a teenager for not having their entire life mapped out by the time they turn 18. You may know you want to gain a higher education, but are unsure exactly what you want to study, and that is totally okay too.
The good news is, many schools don’t require students to declare a major when they apply. In fact, some colleges and universities require students to take a number of general education courses in their first and second year in school. This provides students with not only a well-rounded education, but also with the opportunity to explore new things and discover potential passions they didn’t know they had before.
Some colleges and universities even offer “undeclared courses” to help students find the right path for them.
Essentially, if you are truly unsure of what you want to study, you will likely want to check “undeclared.” However, you may not want to use this as a way into a college or university believing you can transfer into your preferred program later as there is no guarantee that will happen. At which point, you might have to make a tough decision — pick a new major or transfer schools.
How Being Undeclared Could Affect a College Experience
Being undeclared has both its pros and cons as a college student. As mentioned above, it could afford you more opportunity to explore several different fields of study at once, meet people from across your college, and even potentially decide you want to study more than one field and go for either a dual major or a major and a minor.
However, there are pitfalls you’ll also want to be aware of.
By going into college as an undeclared major, you may end up taking classes that do not count toward their college degree, adding up to both a waste of time and money.
Undeclared students may also find themselves left in the lurch when it comes time to apply to their preferred program. If they do not get in, then they may be forced to quickly pivot and find a new path.
Students admitted to college as an undeclared major may also miss out on important social aspects of college as well. If you declare a major in your third year, you could be entering a program where the rest of the students have all worked and studied together for the previous two years.
College is a surprisingly important place to learn to network and form life-long relationships, and declaring a major early could help.
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Get at Least One Decision Off Your Plate
Whether you decide to go into the application as a declared or undeclared major, it can be a good idea to at least ensure all your financial ducks are in a row to pay for that college education.
Being financially prepared from the get-go can help you feel more at ease with exploring different academic pursuits, or going all-in on your dream program, without worrying about paying for tuition along the way.
A great first step is to fill out the Free Application for Federal Student Aid (FAFSA). This will let you know if you qualify for any federal or state financial aid programs, including grants, scholarships, work-study programs, and subsidized and unsubsidized federal student loans.
Once you get your financial aid package, however, you may find there are still gaps in funding. At this point, you might consider applying for a private student loan. These are available through banks, credit unions, and online lenders. Rates and terms will vary depending on the lender, but students who have excellent credit (or who can recruit a cosigner who does) generally qualify for the lowest rates.
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.
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Money and your psyche can be deeply intertwined, and that’s where financial therapy can play a role. Financial therapy merges the emotional support of a psychotherapist with the money insights of a financial planner.
Working with a financial therapist can help clients begin to process their underlying feelings about money while optimizing behaviors related to their cash. This can minimize stress and anxiety, while honing plans for earning, spending, and saving more effectively.
Financial therapists can also assist couples in overcoming differences in their money habits and their approaches to cash management. The result? Possibly resolving and lessening money fights while building teamwork.
Read on to learn if this kind of professional counseling could help you, and, if that’s the case, what to expect from financial therapy and where to find a qualified professional.
What Is Financial Therapy?
A basic financial therapy definition is that it’s a practice that combines behavioral therapy with financial coaching. The goal is to help improve an individual’s feelings and behavior around money.
A certified financial therapist (or financial psychologist) can assist with issues such as money stress, overspending, or concerns about debt. But this differs from, say, a financial advisor who is helping you maximize your gain on investments or plan for your child’s future college expenses.
It also differs from financial coaching, which helps establish good money habits. Financial therapy can go deeper psychologically speaking. It can help a person work through childhood trauma related to money as well as money-related disorders.
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How Financial Therapy Works
According to the Financial Therapy Association (FTA) , financial therapy is a process informed by both therapeutic and financial expertise that helps people think, feel, and behave differently with money to improve overall well-being.
The profession sprang out of increasing evidence that money can be intrinsically tied to our hopes, frustrations, and fears, and also have a significant impact on our mental health.
What’s more, money can also have a major impact on our relationships. Indeed, research has shown that fighting about money is one of the top causes of conflict among couples.
And, while it might seem like bad habits and money arguments are things you can simply resolve on your own, the reality is that it’s often not that simple. That’s where financial therapy can help.
• Many financial roadblocks, such as chronic overspending or constantly worrying about money, often aren’t exclusively financial. In many cases, psychological, relational, and behavioral issues are also at play.
• Financial therapy can help patients recognize problematic behaviors, such as compulsive or impulsive shopping. It also aims to help people understand how various relationships and experiences may have led them to develop those behaviors as coping mechanisms or to form unrealistic or unhealthy beliefs.
• Along with offering practical financial advice, a financial therapist can reduce the feelings of shame, anxiety, and fear related to money. It can help people who are struggling to recommit to money goals.
The reasons why financial therapy can help are the same as why traditional psychological therapy can help: It can lead people to understand that they can do something to improve their situation. That, in turn, can instigate changes and healthier behaviors.
Like conventional therapy, the number of sessions needed will vary, depending on the situation. A financial therapy relationship can last from a few months to longer.
Generally, a financial therapist’s work is “done” when you feel your finances are orderly and you have the skills to keep them that way in the future.
Financial advisors are professionals who help manage your money.
They are typically well-informed about their clients’ specific situations and can help with any number of money-related tasks, such as managing investments, brokering the purchase of stocks and funds, or creating a retirement plan.
However, psychological therapy is not why financial advisors are hired, nor is it their area of expertise.
If a person requires real emotional support or needs help breaking bad money habits, a licensed mental health professional, such as a financial therapist, should likely be involved.
A certified financial therapist (someone trained by the FTA) can work with you specifically on the emotional aspects of your relationship with money and provide support that gets to the root of deeper issues.
Due to the interdisciplinary nature of financial therapy, professionals who enroll in FTA education and certification include psychologists, marriage and family therapists, social workers, financial planners, accountants, counselors, and coaches. Some experts recommend being sure that the professional you work with is first and foremost a licensed therapist with a deep understanding of psychology.
Financial Therapists
Financial Advisors
Address psychology relating to money
Advise on managing and investing money
Can be certified by the FTA
Can be certified as CPA, CFP, CFA, and ChFC, among other designations
Focus on behaviors and attitudes
Focus on budgeting and growth
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Financial Therapy vs. Other Therapy
If you are having issues related to money (say, losing sleep due to anxiety or arguing with your partner about spending), you might think almost any mental health professional could help.
A financial therapist, however, can be your best bet in this situation. These professionals have special training and expertise related to how money can impact a person’s emotional wellness.
They also are also trained in techniques to help clients overcome issues related to money. In other words, they are laser-focused on the kind of emotional responses and problematic habits that crop up around money.
Do You Need a Financial Therapist?
If you’re considering whether a financial therapist could help you, you may want to think about your general relationship to money.
If you feel you have anxiety about money, or unhealthy behaviors and feelings when it comes to spending, budgeting, saving, or investing, you might benefit from exploring financial therapy.
Often, unhealthy saving, spending, or working habits are a symptom of other negative habits related to mental health (feelings of low self-worth, for instance).
Keep in mind that it’s possible to have an unhealthy relationship with money even if your finances are good on paper.
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Top 4 Reasons People Seek Financial Therapists
Here’s a more specific look at why a person might benefit from financial therapy.
1. Avoiding Money Management
Some people hide from their finances. They don’t budget, don’t know exactly how much they earn, pay bills late (or not at all). Working with a financial therapist could expose the root of this behavior and improve financial management.
2. Money Stress
Many people have anxiety around their money. This could involve worrying about how they will pay off their debt to worrying about going bankrupt, even though they are earning a good salary. Others may feel guilty about spending money or carry a lot of trauma about money from their childhood. A financial therapist can work to explore and resolve these emotions.
3. Fighting About Finances
If you often argue with your partner, friends, or other loved ones about money, you might find that a financial therapist can help you defuse this source of tension. It can help couples deal with what’s known as financial infidelity.
4. Poor Money Habits
Do you tend to “shop til you drop” when bored? Have you spent or gambled away your emergency fund? Do you overwork yourself in an effort to accumulate wealth? Do you tend to hop from one “get rich quick” scheme to another? A financial therapist could help you break these habits and develop new, beneficial ones.
These are some of the scenarios that a financial therapist could help you with.
Finding a Financial Therapist
Like choosing any therapist, you often need to shop around a bit to find the right fit—someone you feel you can relate to, trust, and you also feel understands you.
For those who may not have access to a financial therapy professional in their backyard, many offer services via video conferencing.
You can start your search with the Find A Financial Therapist tool on the FTA website, which features members and lists their credentials and specialties.
Your accountant or financial counselor might also be a good source of referrals.
As with choosing any other financial expert or mental health professional, it’s a good idea to speak with a few potential candidates. In your initial conversations with candidates, you may want to discuss the therapist’s training and specific area of expertise, as well as your needs and situation. This can help you assess how good a match they are.
It can also be a good idea to ask how long they have been providing financial therapy services, what their fees are, as well as if some or all of the fee may be covered by your medical insurance.
The Takeaway
Financial therapy merges financial with emotional support to help people deal with and improve stress, decision-making, and habit-forming related to money.
If you frequently feel stressed and/or overwhelmed when you think about money (or you simply avoid thinking about money as much as possible), you might be able to benefit from at least a few sessions of financial therapy.
While it might seem like hiring a financial therapist is another expense that could complicate an already difficult financial situation, it might be better to view it as an investment in your emotional and financial wellness, one that could help you build financial stability and wealth in the future. It can be an important facet of your overall money management.
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What does a financial therapist do?
A financial therapist combines expertise in psychology and finances to help people improve their attitudes toward money and their habits relating to money. They can help individuals manage such issues as money anxiety, overspending, and financial infidelity.
Is financial therapy the same as financial planning?
Financial therapy and financial planning are not the same thing. Financial therapy can help a person improve their attitude toward money and their behaviors related to money. Financial planning is focused on budgeting, debt management, and growth of wealth.
Can therapy help with finances?
Therapy can help with finances. You might have stress related to money due to childhood trauma centered on finances. Or you might be compulsively overspending or ignoring your money due to emotions about such matters. Financial therapy could help you work through these and other issues.
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If your budget is tight, you may find yourself juggling when you pay bills, skipping savings plans, and living paycheck to paycheck. However, while it may seem as if that’s just the way it has to be, there are likely some ways to budget and save better during these times in your life.
Maybe you are a recent college grad with educational loans to pay back and you’re looking for a job. Or perhaps you are navigating some major medical or dental bills in addition to your usual living expenses. Or you might simply bring in a lower income or live in an area with a sky-high cost of living.
Whether you are dealing with a brief budget crunch or some ongoing financial issues, you can take the reins. With the right intel and tactics, you can make the most of your money and stretch further.
Here’s what you can do when money is tight.
Does Budgeting Help When Money Is Tight?
Budgeting can help when your money is tight. By drilling down and seeing just how much money is coming in, what your basic living expenses are, what your discretionary spending looks like, and how your savings are growing, you are better in touch with your money.
You can then move ahead and finetune things to make your money work harder for you. You might see ways to economize or eliminate some expenses or otherwise improve your cash flow.
What follows are 11 strategies that can help when money is tight.
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1. Getting Honest With Your Budget
When most of your income already goes to essentials, you may wonder if there is really enough money left over for a spending plan.
But taking a close look at your monthly spending can be especially key when money is tight because the less money available, the more important it is to keep those dollars under control.
To get a full picture of your spending, you may want to actually track your spending (every cash/debit/credit card transaction and every bill you pay) for a month or so.
You can do this by carrying around a notebook or saving all of your receipts. There are also a number of apps that can make the process of tracking your daily spending easy.
Once you have a sense of average monthly spending, it’s a good idea to compare this to what’s coming in. You can look at your bank statements for the past few months to get an idea of how much after-tax income you are taking in on average per month.
Comparing what is coming in vs. going out will help you know exactly where you stand when money is tight can be a critical first step toward easing the strain.
2. Finding Ways to Save
Here’s the next step when you are tight budgeting: Once you have a good sense of your monthly spending, you may want to group expenses into categories, and then list them in order of priority, starting with the essentials and going down to the “nice to haves.”
Once you’ve established which expenses are the most important, you can start looking for places to reduce overspending. Cutbacks may not feel fun, but they can be extremely beneficial when money is tight.
For example, if you are spending a lot on restaurants and take-out, you might consider cooking at home a few more nights a week.
Or, if you tend to be an impulsive buyer of clothing, it might make sense to institute a short-term spending freeze on new clothes or a freeze on spending money at a certain store for a period of time.
If you want to save money on streaming services, you might consider ditching that pricy cable subscription and signing up for your one favorite platform. If you love buying the latest best-sellers, It might be a good time to renew your library card and borrow instead.
You may also find you’re paying for memberships and subscriptions you no longer need or want. These are line items you may be able to scratch from the expense list completely.
3. Negotiating With Service Providers
It can be hard to save money when your budget is tight, but you might try to see if you can reduce some of your monthly “fixed” expenses.
Some of those recurring bills (like cable, internet, cell phone, car) may not actually be set in stone.
It can take little research — and nerve — but you may be able to negotiate for a lower rate from many of your providers, especially if you’re dealing with a company that’s in a competitive market.
Before you call or email a business or provider, it can help to know exactly how much you’re paying for a service, what you’re getting for your money, and how much the competition is charging for the same or similar service.
It’s also a good idea to make sure you are communicating with someone who actually has the power to lower your rate and, if not, ask to speak with someone who does.
You may also want to let providers know that if they can’t do better, you may decide to switch to another company. Worth noting: You can also try to negotiate medical bills. You may be able to explain your situation and get a reduction.
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4. Cutting Back on Bigger Expenses
If you’re tight on money right now, it can also be a good idea to take a look at the big items in your overall budget.
For example, is your car payment too high? If so, perhaps you could lease a less expensive car, or buy a used vehicle to cut monthly payments.
If rent is eating up too much of your income, you might want to look into finding a cheaper place to live that’s still nice, taking in a roommate, or moving in with friends. You might also consider moving nearby to a place where the cost of living is lower.
These options may be the last steps you take as you look for ways to reduce expenses, but they really can help you save a sizable amount of money every month. The lower you keep these costs, the easier it will be to live well within a tight budget.
5. Knocking Down Debt
Having too much debt can make for an especially tight budget, and it can also hurt your chances of achieving financial security down the line.
That’s because when you’re spending a lot of money on interest each month, it can be harder to pay all of your other expenses on time, not to mention grow your savings.
Reducing debt may seem like a tall mountain to climb when money is tight, but choosing the right debt reduction strategy may be able to help you chip away and slowly improve your financial situation.
• Since credit card debt typically costs the most in interest, you might consider tackling these debts first, and then move on to the debt with the next-highest interest rate, and so on.
• Another approach is to pay the minimum toward all your accounts, and then pay any extra you can afford toward the debt with the smallest balance. When that debt is wiped out, you can move on to the next smallest balance, and so on.
• If you can qualify for a lower interest rate, another option might be to take out a personal loan that consolidates all those high-interest debts into one more manageable payment.
6. Starting an Emergency Fund
It might sound crazy, if not impossible, to put cash into savings when money is tight.
But here’s why you may want to make putting a little bit away into an emergency fund each month a priority: If you’re living on a tight budget, just one unexpected expense—like your car breaking down or a visit to an urgent care clinic—could put you over the financial edge.
If you start putting just a small amount aside each month into an emergency fund, it won’t be long before you have a decent financial cushion that could prevent you from having to run up high interest credit debt the next time something unexpected rolls around.
Good places to start–and grow–your emergency fund include: a high-interest savings account, a checking and savings account, or an online savings account.
These options typically offer higher interest than a standard savings account, but keep the money liquid so you can access it if and when you need it.
7. Spending Only Cash for Everyday Expenses
There’s something about plastic that can make it feel like you are not really spending money.
While it might not be practical to pay your rent or utility bills in cash, switching to cash (and leaving the credit cards at home) for other expenses can be a great idea when money is tight.
The reason is that paying with cash places a harder limit on your spending and helps you become more aware of your choices. When you can literally see your dollars going somewhere, you may find yourself becoming much more intentional in the way you spend it. This can be a very good thing when money is tight.
Groceries and entertainment can be great categories for going cash-only. Cash can also be a good option for clothing and the (occasional) restaurant meal.
Another benefit of cash is that it’s more difficult to get into debt since you can’t spend cash you don’t have.
8. Starting a Side Gig
Once you’ve done some basic budgeting, it may be clear that additional income could help ease things while money is tight.
Sometimes all it takes is some extra time and energy to earn some extra cash, whether it’s selling things you no longer want or need (and decluttering at the same time), taking on a low-cost side hustle, or using your talents to pick up some freelance work.
Some ideas for generating extra income include:
• Selling things on eBay, Craigslist, or Facebook Marketplace
• Having a garage sale
• Creating an Etsy store and selling homemade goods
• Driving for a rideshare or food delivery service
• Giving music lessons
• Renting out a room on Airbnb
• Walking dogs
• Cleaning houses
• Babysitting
• Handling social media for small businesses
• Selling writing, photography, or videography services to clients.
9. Traveling for Less
Just because you are on a tight budget, that doesn’t mean you don’t get to travel. But you’ll want to spend some time looking for deals and perhaps using points or miles to whittle the cost down. Racking up and using travel rewards can help you get more for your money.
Also, consider the kind of trip you take. Sure, it would be nice to work your way across Europe or Asia, but you can have a wonderful and more affordable vacation by sticking closer to home or visiting America’s National Parks. Camping is almost always a bargain, and exploring a historic town or beach that’s just a few hours’ drive from your home helps you avoid costly airfare.
10. Saving on Insurance
Insurance is important to have, but you can often save via two tactics:
• Conduct an online search to see what rates are available for coverage that matches what you already have.
• Look into bundling your insurance if you don’t already. That typically means getting both your home and auto coverage from one provider for a tidy savings.
• See if you can lower your premium by paying once annually vs. monthly.
11. Using a Budgeting App
There are many different budgeting techniques available that can help you manage your money. Typically, budgets help you identify your income and expenses, track your spending, and fine-tune your cash flow so you are able to pay all your bills, have some fun spending, and also save.
If you like using pencil and paper or a journal, go for it. But you will also find lots of digital tools to try, whether you are the kind to adopt a line-item budget or prefer a different method.
For instance, there are dashboards that help you see where your money goes. There are round-up apps that round up purchases to the next whole dollar and put the extra bit of money in savings for you. What’s more, your bank may already offer these kinds of tools for free. Take a look; consider changing banks if they aren’t available; or download (and potentially pay) for what you need online.
Saving Money With SoFi
If money is feeling tight right now, you may be able to regain a sense of control by taking a deep breath, sitting down, and digging into how your income, spending, and saving all line up. Then you can take steps to reduce unnecessary spending, negotiate to lower monthly bills, chip away at expensive debt, and even start building a financial cushion.
Looking for a simple way to manage your spending and saving while money is tight? Consider opening an online bank account.
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
What does a tight budget mean?
A tight budget is one without much margin for error; you might also think of it as living paycheck to paycheck. It may be hard to save or to afford discretionary expenses, and an emergency (a major medical bill or the loss of a job) could prove difficult to manage.
How do you run a tight budget?
If you have a tight budget, it’s important to track your income, spending, and saving carefully. Then, you can look for ways to better manage your money, such as cutting spending, negotiating bills, using apps, and starting a side hustle.
How do you fight money anxiety?
There are various ways to lower your money stress, including when you are tight on money. You might start slowly building up your emergency fund so you feel more prepared for uncertain times. You can investigate ways to rein in spending and/or bring in more income so your money isn’t so tight. If you are carrying considerable debt, you might refinance, take out a personal loan to pay it off and then possibly have a lower interest rate, or work with a nonprofit debt counselor for solutions.
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.
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.
When an undergraduate’s financial aid doesn’t meet the cost of attendance at a college or career school, parents may take out a Direct PLUS Loan in their name to bridge the gap.
These loans are available to parents when their child is enrolled at least half-time at an eligible school. Before you apply, it’s important to understand the benefits and challenges of this kind of federal student loan.
A “Direct” Difference
First, to clarify, there are federally funded Direct Loans that are taken out by students themselves. Then there are federally funded Direct PLUS Loans, commonly called Parent PLUS Loans when taken out by parents to help dependent undergrads.
To apply for a Parent PLUS Loan, students or their parents must first fill out the Free Application for Federal Student Aid (FAFSA®).
Then a parent typically applies for a PLUS Loan on the Federal Student Aid site. A credit check will be conducted to look for adverse events, but eligibility does not depend on the borrower’s credit score or debt-to-income ratio.
💡 Quick Tip: Some lenders help you pay down your student loans sooner with reward points you earn along the way.
Pros of Parent PLUS Loans
At least 3.5 million parents (and in some cases, stepparents) have taken out Parent PLUS Loans to lower the cost of college. Here are some upsides.
The Sky’s Almost the Limit
The government removed annual and lifetime borrowing limits from Parent PLUS Loans in 2013, so parents, if they qualify, can take out sizable loans up to the student’s total cost of attendance each academic year, minus any financial aid the student has qualified for.
Fixed Rate
The interest rate is fixed for the life of the loan. That makes it easier to budget for the monthly payments.
Flexible Repayment Plans
The options include a standard repayment plan with fixed monthly payments for 10 years, and an extended repayment plan with fixed or graduated payments for 25 years.
More College Access
PLUS Loans can allow children from families of more limited means to attend the college of their choice.
Loan Interest May Be Deductible
You may deduct $2,500 or the amount of interest you actually paid during the year, whichever is less, if you meet income limits.
The program allows parents to borrow without regard to their ability to repay, and to borrow liberally, as long as they don’t have an “adverse credit history.” (If they did have a negative credit event, they may still be able to receive a PLUS Loan by filing an extenuating circumstances appeal or applying with a cosigner.)
The average Parent PLUS borrower has more than $29,000 in loans, a financial hardship for many low- and middle-income families.
And if a student drops out, parents are still on the hook.
Interest Accrual
PLUS loans are not subsidized, which means they accrue interest while your child is in school at least half-time. You’ll need to start payments after 60 days of the loan’s final disbursement, but parents can request deferment of repayment while the student is in school and for up to 6 months after. Interest will still accrue during that time.
The Rate
The current interest rate for Direct PLUS Loans is 8.05%
Origination Fee
The government charges parents an additional fee of 4.228% of the total loan.
Fewer Repayment Options
Parents who struggle with payments typically have access only to the most expensive income-driven repayment plan, which requires them to pay 20% of their discretionary income for 25 years, with any remaining loan balance forgiven. And parents must first consolidate their original loan into a Direct Consolidation Loan.
Private lenders that issue private student loans typically look at an applicant’s credit score and income and those of any cosigner. The lenders set their own interest rates, term lengths, and repayment plans. Some do not charge an origination fee.
You may want to compare annual percentage rates among lenders, and decide if a fixed or variable interest rate would be better for your financial situation.
Any time a student or parent needs to borrow money for education, a good plan is a good idea.
Sometimes scholarships can significantly reduce the amount of money that needs to be paid out of pocket for college, and personal savings and wages can also help. But it isn’t unusual for students to also need to take out loans.
💡 Quick Tip: Parents and sponsors with strong credit and income may find much lower rates on no-fee private parent student loans than federal parent PLUS loans. Federal PLUS loans also come with an origination fee.
Refinancing a Parent PLUS Loan
The goal of Parent PLUS Loan refinancing is to get a lower interest rate than the federal government is charging.
Refinancing could potentially lower your interest rate, which gives you the option to either:
• Reduce your monthly payments
• Pay the loan off more quickly, which may allow you to pay less interest over the life of the loan
Note that Parent PLUS Loans come with certain borrower protections, like the income-based repayment option and Public Service Loan Forgiveness, that you would lose if you refinanced. Also note that if you refinance with an extended term, you may pay more interest over the life of the loan.
Eligibility for refinancing Parent PLUS loans depends on factors such as your credit history, income, employment, and educational background.
The Takeaway
Millions of parents have used federal Parent PLUS Loans to help pay for their children’s college education. Anyone tempted to take out one of these loans may want to know the pros, cons, and options.
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.
SoFi private student loans offer competitive interest rates for qualifying borrowers, flexible repayment plans, and no fees.
SoFi Student Loan Refinance
SoFi Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org). SoFi Student Loan Refinance Loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Public Service Loan Forgiveness, Income-Based Repayment, Income-Contingent Repayment, PAYE or SAVE. Additional terms and conditions apply. Lowest rates reserved for the most creditworthy borrowers. For additional product-specific legal and licensing information, see SoFi.com/legal.
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
SoFi 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.
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.
Attending college is a big milestone that both parents and students look forward to for many months.
While this is a highly anticipated event, college move-in day can also be a very stressful and emotional day for both students and parents. Attending a college that is out of state can be another nerve-wracking factor.
Moving can be challenging, especially if it’s hot or you have to climb up several sets of stairs. Fortunately, there are several things you can do ahead of time over the summer that can help ensure the day goes as smoothly as possible.
Preparing for the Big Day
Getting organized beforehand is one surefire way to prepare for the big move as a college freshman. Here are a few ideas to help you and your child get ready for move-in day.
Getting Familiar with Dorm Room Rules
Being prepared and learning what the college dorms allow students to bring can relieve some potential headaches. Colleges typically post a list of items that students can bring and ones that are prohibited in the residence halls.
Sticking to the basics is a good start since your child can buy more items from a local store or have it shipped to them at a later date.
Recommend that your child contact their roommate over the summer and discuss their interests and what items each of them are bringing. This can be one way to help avoid bringing duplicates, especially for larger items like TVs or bean bags.
Another idea is to coordinate the time you are going to move in so you can assist each other during the process. This can also be helpful if the parents are interested in meeting each other.
Packing with Purpose
Packing for college can be a frustrating task, but one way to expedite the chore is to have your child label all the containers and boxes so you know what’s already packed and can easily find things once you arrive. If you have items that are more fragile, consider putting them into heavy plastic containers so they are less likely to be damaged during the move.
Also consider making a list of must-have items, to limit the chance that something important is forgotten. For example, bedding, computer, school supplies, a first aid kit, and basic tool kit — which can be extremely useful on move-in day.
If your child is attending a college that is out of state or in a different climate, you may have to build out a more weather-appropriate wardrobe. For instance, if your child is moving to a college in the Midwest from Florida, you might buy and pack weatherproof boots, jackets, scarves, gloves, and other clothing suited for colder temperatures.
If they are attending college in a warmer climate, consider packing more t-shirts and shorts and leave some of the sweatshirts and wool sweaters at home.
Once you’ve organized and packed all of your child’s belongings, it’s time to decide how you’ll get everything to campus. This will likely depend on factors like how far away the school is.
Consider renting an SUV or a moving van if the university is within driving distance and you own a smaller vehicle. If you plan on driving, pack the car strategically, so items you’ll need first (like cleaning supplies), are easily accessible when you arrive.
If you’re planning to fly to the college, another strategy may be to mail some of the belongings to the residence hall ahead of time, if it is permitted.
💡 Quick Tip: Parents and sponsors with strong credit and income may find much lower rates on no-fee private parent student loans than federal parent PLUS loans. Federal PLUS loans also come with an origination fee.
What to Expect on Move-In Day
While going to college is really exciting for your child and your family, consider limiting the number of people you bring with you on moving day. You know the saying “too many cooks in the kitchen,” well the same philosophy can apply to a move.
Having too many people could actually slow down or complicate the process. Plus, it’s likely that many students and their parents will all be in the residence halls at the same time. Dorm rooms can be pretty small and having more people in the space could create more chaos and tension.
Instead, consider planning a visit when there is more flexibility. Many colleges have a family weekend in the fall. This could provide an opportunity for a longer, more relaxing and fun visit, especially if grandparents, aunts, and uncles also want to tag along.
Since many students move in during late summer, it can help to be prepared for heat (and humidity, depending on the local climate). It’s likely going to be hot, especially if the residential dorm does not have central air conditioning and only window units or getting to a top floor requires traipsing up and down several flights of stairs.
Consider bringing a fan to help circulate some air while you get everything settled.
Doing all that heavy lifting is no easy task. Wear comfortable clothing and shoes for the move and bring another outfit to change into later as you tour the campus or grab dinner with your child.
Bringing water and snacks is generally a good idea too, especially if you are moving furniture and other heavier items. Putting the drinks in a cooler will help keep them cold, especially if the room does not have a refrigerator. Make sure you have enough for the roommate and their parents.
Determine whether the residence hall has a dolly or other items that you can borrow because they can help make the move easier. Signing up for those items early can help ensure that you can use them the day you move in. Otherwise, you can buy one from a local hardware store or split the costs with a roommate or another friend who is living in the same residence hall.
Students who have other friends who are also moving in during the same day might want to consider connecting beforehand so they can help each other move, especially bulky or heavier pieces of furniture.
During the unpacking process, your child might find that they brought too many personal belongings or packed things they either don’t actually need or don’t have room for.
For instance, if the roommate also brought a television and there is no room for two, you could pack yours up and take it home.
While you may be concerned about whether your child has enough necessities like sheets, toothpaste, and food, there are likely several stores on or near the campus.
If your student lives near a grocery or drugstore, they can buy other items later on or they can have the items delivered to them. Many retailers offer free shipping and stores at college campuses often have special offers suited for students.
Move-in day can be emotional, for everyone involved. As hard as it is to say goodbye, try not to hang around too long — let your child adjust to their new surroundings, hang out with their new roommate, make new friends in their residence hall, and get ready for their first day as a freshman.
💡 Quick Tip: Parents and sponsors with strong credit and income may find much lower rates on no-fee private parent student loans than federal parent PLUS loans. Federal PLUS loans also come with an origination fee.
When we say no fees we mean it.
No origination fees, late fees, & insufficient fund
fees when you take out a student loan with SoFi.
Considering SoFi Private Student Loans
As you gear up for move-in day, you may have other concerns, including how you’re going to cover the cost of your child’s education. Financing your child’s education is a large responsibility and can be complicated. While there are some ways to prepare for college, like filling out the FAFSA to apply for federal aid, some families do not receive enough to pay for tuition and room and board entirely.
After exhausting federal aid options, you might want to explore the option of private student loans. You can be the cosigner of your child’s application for a private student loan. You also have the option of taking out a private parent student loan. Just keep in mind that private student loans don’t offer the same protections, like government-sponsored forgiveness programs, that come with federal 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.
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
SoFi 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.
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.
