The cost of adoption & how to pay for it

Adoption enables you to build your family while giving a child a chance at a loving home. However, in addition to being an emotional commitment, it can be a major financial hurdle. While adoption costs vary widely, the process can be as expensive as $50,000. 

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Still, with the right resources and tools, you can overcome the financial obstacle to fulfill your dream of parenthood and provide a safe, nurturing home for a child. This post will explore the various types of adoptions, expenses, and options to cover the costs. 

How much does adoption cost?

There are several types of adoption, including: 

• Private domestic adoption: Private domestic adoption, also called infant adoption, refers to adopting a newborn in the U.S. You can find a birth parent independently and hire an attorney to assist with the legal paperwork. Alternatively, you can work with an adoption agency that can match you with an infant. Costs for a domestic adoption may be anywhere between $15,000 to $60,000.
• Foster care adoption: Foster care adoption involves adopting a child through the foster care system. Each state’s Department of Child Protective Services or Human Services usually manages and oversees it. While fostering to adopt can often be the least expensive way to adopt a child, as most costs are reimbursable by the organization overseeing the adoption, the goal of foster care is often reunification with a child’s birth family. You may spend anywhere between $0 to $3,000 for a foster care adoption. 
• International adoption: Intercountry adoption, or international adoption, allows you to adopt a child from another country. You can do this through a private or government agency, non-profit organization, orphanage, or attorney.  In general, costs for adopting a child from another country range from $20,000 to $50,000.

Why is adoption so expensive?

Adoption costs can be intimidating — with the price ranging anywhere from a few thousand dollars to tens of thousands. It's a significant financial commitment. However, the expenses support the vetting process and help ensure the adoption leads to permanent placement. 

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These various factors will play a vital role in the cost: 

• Legal fees: Typically, an attorney will need to assist with the legal paperwork required for an adoption, such as the consent to adoption and termination of parental rights. Aspects like the type of adoption you pursue, the complexity of your case, and the number of hours an attorney works will influence the bill. If you decide not to use a private agency, most of your adoption costs will be legal fees, ranging between $8,000 and $40,000. 
• Home study costs: The adoption process usually begins with a home study, where an adoption agency or government agency observes you and your family. Its purpose is to make sure you can provide a loving, safe environment for a child. Home study costs may be anywhere between $1,000 to $3,000. 
• Medical and counseling expenses for an expectant mother: Medical and counseling expenses help support a pregnant woman who plans to place their child for adoption. Through these services, a woman can receive mental health care and ensure the health of the baby through routine check-ups. These expenses vary greatly and depend on the medical and mental health professionals involved and the services they provide. 
• Travel expenses: You can expect to pay travel expenses for domestic and international adoption. These costs include random expenditures like meals and lodging while meeting a prospective birth parent or the child. Since they can easily add up to thousands of dollars, it's important to budget for them. You'll pay less if you adopt a child closer to home than if you adopt a child overseas.
• Agency fees: A private agency provides you with the resources and support necessary to find a child to adopt, finalize the adoption process, and prepare for your future. The fees will depend on the agency you go with and whether you opt for domestic or international adoption. Some agencies charge flat fees, while others operate on a sliding fee scale, meaning fees are based on your unique financial situation. Agency fees range anywhere from $30,000 to $60,000 and typically cover legal fees, court costs, a birth mother’s medical bills, and other related expenses. 

How to pay for adoption

The cost of adoption should not prevent you from becoming a parent. Fortunately, there are a number of ways you can pay for adoption.  Some options can help you cover the entire cost, while others will help fund a portion. Here are several options to explore: 

Adoption grants and scholarships

A variety of private organizations and adoption agencies offer grants and scholarships to current or prospective adoptive parents. The requirements vary by organization, so it’s a good idea to do your research. A Child Awaits Foundation, National Adoption Foundation, Brittany's Hope, and Gift of Adoption are a few examples of organizations that give out adoption grants. You’re more likely to qualify for most grants and scholarships if you earn a low to moderate income or can demonstrate financial need. 

Adoption loans

Adoption loans are personal loans you can use for adoption expenses. Interest rates and terms are comparable to standard personal loans. Depending on the lender, you may receive the funds as quickly as the same day you apply or within 24 hours. 

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Repayment consists of monthly payments, usually 1 year to 7 years. While you generally need good credit to take out an adoption loan, some lenders are more lenient and willing to lend to borrowers with less-than-perfect credit. Adopting loans might make sense if you have solid credit and can afford monthly payments. 

Fundraising and crowdfunding

You can raise money for adoption through a fundraiser or crowdfunding campaign on a website like Adoption Bridge or GoFundMe. Keep in mind that many websites charge fees. This strategy may be worth pursuing if you have a large social network or people supportive of your cause. 

Employer adoption benefits

Some employers provide financial assistance for employees pursuing adoption. It can be in the form of a lump-sum payment or reimbursement for expenses with a maximum limit. Examples of employers who offer adoption benefits include the U.S. military, American Express, and Patriot Software. If you are employed, check with your human resources department to find out if these benefits are available to you. 

Adoption tax credits

You can check if you qualify for an income-based federal adoption tax credit, which is currently up to $15,950.  Depending on your income, you might also have access to state credits that can help offset the cost of adoption as well. Reach out to your state agency for more information. 

Home equity

If you’re a homeowner with equity in your home, you can leverage it to help cover adoption costs. Home equity can even fund your entire adoption if you’ve built a lot over the years. Here are several home equity products to consider:

• Cash-out refinance: A cash-out refinance is when you take out a new, larger mortgage. The loan pays off your existing mortgage and gives you the difference as a lump sum of cash. Repayment terms are typically 15 or 30 years. Since a refinance will change your current mortgage rate, it’s best to check market conditions before applying. 
• HELOC or home equity line of credit: A HELOC is a revolving line of credit. You can withdraw as much or as little as you want up to your set credit limit. Once the draw period ends, typically 10 years, your balance will turn into a principle-plus-interest loan with monthly payments. On the other hand, a home equity loan offers a lump sum of cash that you repay immediately in monthly installments. 
• Home Equity Investment: Also known as an HEI, a Home Equity Investment lets homeowners tap into their equity for a lump sum of cash. There are no monthly payments or need for perfect credit. Instead, repayment happens at the end of a 30-year term, where you'll share a percentage of your home's appreciation. 

Final thoughts

Adopting a child may be within reach, no matter your financial situation. It’s best to do your due diligence and explore the various ways to pay for adoption. With so many financing opportunities, one is likely to meet your unique needs and help you build the family of your dreams.