SoFi

Age plays a major role in how much money people make. This is simply because as we get older, we gain career experience and bring more value to companies. But when are a worker’s “peak earning years,” and what happens after they’re past?

Keep reading for insight into the average income by age in the United States.

Average Salary by Age in the US

Your education, industry, work experience, negotiation skills, and plain luck can all influence how much money you make. To get an idea of whether you’re earning a competitive salary, it can be helpful to know how much other people in the same age group are making.

Let’s take a closer look at the average income by age in the U.S., according to the Bureau of Labor Statistics.

Average Salary for Ages 16-19

The early days of your working life usually aren’t the most lucrative: 16 to 19 year olds who work full-time make $32,396 a year on average.

Average Salary for Ages 20-24

Salaries start to rise as workers gain experience. Those in the 20 to 24 age group make an average annual salary of $38,324.

This is when many financially savvy professionals start building their 401(k) balance. That’s because the earlier you invest for retirement, the less money you’ll typically have to invest over time. Or, as the saying goes, your time in the market is more important than marketing timing.

Recommended: Average Savings by Age

Average Salary for Ages 25-34

We start to see a big increase in salary once workers reach the 25 to 34 age group, with the average annual income hitting $52,832.

Ideally, employees will put much of their raises and bonuses toward savings rather than impulse spending.

Average Salary for Ages 35-44

For 35 to 44 year olds, their annual salary is still growing: $62,608 on average. This is the beginning of what’s commonly referred to as “peak earning years.”

Average Salary for Ages 45-54

While many employees enjoy higher wages into their 50s, others find their salary stagnating. Overall, workers in the 45 to 54 age group actually see salaries drop a little, though only by $208. The average annual income in middle age is $62,400.

Recommended: Financial Tips for People in Their 40s

Average Salary for Ages 55-64

Salaries really drop for workers between 55 and 64, whose average annual salary is $61,204. What happened to paying for experience? Some companies may believe they can pay younger employees less for the same work, and see older workers as overpaid. As a result, 55+ workers are no longer offered the same retention incentives — such as pay raises — regardless of performance.

On the other hand, professionals who are satisfied with their retirement savings may choose to work less or retire early instead of waiting until the average retirement age.

Average Salary for Ages 65 and Older

Once workers reach 65, they are likely shifting to part-time work to stay active during retirement and to earn a little extra retirement income. Some people need more retirement income than others, and Social Security benefits and savings aren’t always enough. Which may be why we see salaries drop to an average of $54,444 per year for those 65 or older.

Tips for Maximizing Your Salary

Now that we’ve shed some light on the average income by age in the U.S., let’s address some ways workers can maximize their salary. That can mean finding ways to hold on to what you’re earning or to make it grow.

Create a Budget

If you’ve ever created a spending budget, you know how shocking it can be to see all the ways we fritter away our hard-earned salary on unnecessary purchases. By cutting back on items you don’t really need — from bottled water to forgotten subscriptions — you’ll free up more cash for things like saving and investing.

Pay Down Debt

What’s even more shocking than the amount you spend on little things like daily snacks and late-night Ubers? The interest charges and fees that come with debt. The faster you pay off high-interest credit cards, the more you can put toward longer term goals: an emergency fund, travel, or buying a home.

Make Saving Automatic

One easy way to make saving and investing a priority is to automate it: Set up regular, recurring transfers from your paycheck or checking account. That way, big goals like a dream wedding and retirement are prioritized before there’s even a chance to spend that money.

Take Advantage of Tax Deductions and Credits

Taxes may be an unavoidable part of life, but there are ways to pay less to Uncle Sam. Whether you hire a tax accountant or use software to file your return, look for opportunities to snag a larger tax refund.

Invest Your Savings

One way to make savings grow is to open a brokerage account and invest money in the stock market. Start small while you learn the ropes. While investing comes with risk (and more taxes), it’s a means of making your money work for you.

Recommended: Investing 101 Guide

Make Retirement Contributions

Contributing to a retirement savings account is a convenient way to save and invest in one fell swoop. As an added benefit, some employers match a portion of employee contributions. That means if someone isn’t contributing to their employer sponsored 401(k) plan, they’re leaving free money on the table. that helps expand an employee’s net worth.

Open a High-Yield Savings Account

A low-risk way to earn money on savings is by opening a high-yield savings account. This type of savings account tends to offer a higher interest rate than normal savings accounts.

The Takeaway

The average income by age in the U.S. tends to rise as workers gain more experience. Eventually salaries plateau and then drop off. Your peak earning years coincide with middle age, meaning you make the most you ever will in your 40s and 50s. The average salary in the U.S. tops out at $62,608 for ages 35-44.

Employees work hard for the money they earn, and they deserve for their money to work hard for them. This is where SoFi can help. With SoFi, users can track all of their money in one place, set savings goals, review spending breakdowns, and keep an eye on their credit score — free of cost.

Get the information and tools you need to make the most of your money.

re

What does the average 30 year old make?

On a weekly basis the average 30 to 34 year old makes $1,016, or $52,832 per year. Workers in their mid to late thirties can expect to earn more: $1,204 per week, or $62,608 a year.

What percentage of Americans earns over $100,000 a year?

Most Americans earn less than $100,000 per year. Just 9% of Americans earn a six-figure salary, so workers shouldn’t feel bad if they earn less than $100,000.

What salary is middle class?

The salary that places you in the middle class varies depending on where you live and the cost of living there. According to one Pew Research study, the median middle-class household (not individual) makes $90,131. However, if you can afford to pay your bills and have money left over for savings and modest indulgences, you’re likely middle class.

---

Photo credit: iStock/Prostock-Studio

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

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

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

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

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.

SORL0223002

Read more

As student debt reaches an all-time high and automation is shaking up many industries, more and more people are turning to the trades. With the benefit of less education debt, and a lower likelihood of replacement by machines, a job in the trades holds out hope for a steady salary and job security.

But what’s the average pay, and how does it vary state by state? Read on to find out more about the advantages and disadvantages of trade jobs.

What Is a Trade Job?

A trade job is typically a hands-on role that doesn’t require a college degree. Instead, tradespeople gain experience in a specialty program or through training on the job.

Many think of a trade job in terms of plumbing or construction, but trade jobs also encompass roles such as pilot and real estate broker.

Recommended: Why Raise the Minimum Wage?

Pros and Cons of a Trade Job

Like any job, working in a trade comes with a fair share of benefits and drawbacks.

Pros include:

•   Cost of education. Since most trades don’t require a four-year degree, tradespeople may be less likely to take on student loan debt before beginning their career.

•   Security. Trades require special knowledge and experience, and are less likely to be automated. The skilled labor required for many trades jobs promises security down the line.

Cons of a trade job are:

•   Physical toll. Many, but not all, trades jobs require strength and mobility, which can take a toll over time. Trade jobs often require employees to be out in the field, as opposed to working from home. Demanding construction or maintenance jobs can lead to injury and discomfort if you aren’t careful.

•   Safety. Some trades jobs are more dangerous than others. Mistakes on the job can lead to serious bodily trauma.

Recommended: Free Credit Score Monitoring

Average Salary for Trade Jobs by State

Trade jobs span multiple industries and skill sets, which lead to a wide variation in average pay. Some may be salaried, while others are hourly, and each will have different demands. Here is the average salary for trade jobs by state, courtesy of Zip Recruiter.

State	Average Salary for Trade Jobs
Alabama	$47,789
Alaska	$54,608
Arizona	$54,669
Arkansas	$58,145
California	$58,024
Colorado	$60,278
Connecticut	$54,843
Delaware	$59,239
Florida	$46,687
Georgia	$43,997
Hawaii	$57,084
Idaho	$58,582
Illinois	$54,797
Indiana	$53,052
Iowa	$50,076
Kansas	$48,308
Kentucky	$60,941
Louisiana	$42,867
Maine	$54,984
Maryland	$63,100
Massachusetts	$57,798
Michigan	$56,481
Minnesota	$53,738
Mississippi	$47,177
Missouri	$54,950
Montana	$53,293
Nebraska	$59,378
Nevada	$56,714
New Hampshire	$58,194
New Jersey	$53,543
New Mexico	$48,277
New York	$62,292
North Carolina	$49,337
North Dakota	$53,034
Ohio	$50,555
Oklahoma	$56,391
Oregon	$54,008
Pennsylvania	$50,812
Rhode Island	$54,737
South Carolina	$58,942
South Dakota	$50,040
Tennessee	$55,804
Texas	$52,230
Utah	$48,905
Vermont	$56,463
Virginia	$61,131
Washington	$64,626
West Virginia	$52,451
Wisconsin	$50,719
Wyoming	$$54,579

Recommended: More High Paying Jobs by State

10 Top High Paying Trade Jobs

Trade jobs usually don’t require a four-year degree, but many can net a coveted $100,000 salary. Here are the top 10 highest paying trade jobs by median annual salary, according to the Bureau of Labor Statistics (BLS):

1. Transportation, Storage, and Distribution Managers

Median Annual Salary: $105,580

Job Growth Outlook (10-year): 3.52%

Job Description: Coordinate the shipping, storage, and transportation of materials based on business or government regulation. According to the BLS, this is the trade that makes the most money.

Education Requirements: High school diploma

2. Nuclear Power Reactor Operator

Median Annual Salary: $104,260

Job Growth Outlook (10-year): -26.8%

Job Description: Operate and monitor nuclear power systems.

Education Requirements: High school diploma

3. Elevator Mechanic

Median Annual Salary: $97,860

Job Growth Outlook (10-year): 2.9%

Job Description: Install, maintain, and repair elevator and escalator systems.

Education Requirements: High school diploma

4. Radiation Therapist

Median Annual Salary: $82,790

Job Growth Outlook (2020-2030): 6.3%

Job Description: Monitor and distribute radiation therapy to patients with cancer or other diseases. Because of frequent interaction with patients, this is not a job for antisocial people.

Education Requirements: Associate degree

5. Subway and Streetcar Operator

Median Annual Salary: $81,180

Job Growth Outlook (10-year): 3.5%

Job Description: Drive public transport systems including street cars and subway lines. Roles can include handling cash fares. Because these roles don’t come with many physical demands, they could be a good option for steady work after retirement.

Education Requirements: High school diploma

6. Nuclear Medicine Technologist

Median Annual Salary: $78,760

Job Growth Outlook (10-year): 1.7%

Job Description: Provide radiation imaging or treatment to patients. This is one of a handful of high-paying medical jobs that don’t require a four-year degree, much less medical school

Education Requirements: Associate degree

7. Gas Plant Operator

Median Annual Salary: $77,850

Job Growth Outlook (10-year): -9%

Job Description: Control pipelines and distribution of gas from utility companies.

Education Requirements: High school diploma

8. Dental Hygienist

Median Annual Salary: $77,810

Job Growth Outlook (10-year): 8.9%

Job Description: Examine dental patients and administer oral hygiene, including routine cleanings.

Education Requirements: Associate degree

9. Diagnostic Medical Sonographer, Cardiovascular Technologist and Technician

Median Annual Salary: $75,380

Job Growth Outlook (10-year): 10%

Job Description: Operate medical equipment to create images or complete medical testing.

Education Requirements: Associate degree

Recommended: What Is a Good Entry-Level Salary?

10. Electrical Line Installer and Repairer

Median Annual Salary: $78,310

Job Growth Outlook (10-year): 3.2%

Job Description: Install, maintain, and repair electrical systems, including poles, as well as transmission towers.

Education Requirements: High school diploma

Recommended: Budget Planner and Spending App

The Takeaway

Landing a job with a competitive salary doesn’t necessarily require a college degree. Though the average pay for trade jobs will vary by role and location, they can lead to rewarding careers with good job security. The ten highest paying trade jobs are in a range of industries, from medicine to transportation to nuclear power.

Want to keep more money in your pocket? Check out SoFi. Our money tracker app allows you to monitor your spending, upcoming bills, budgets, and more. And it’s free.

Track all your accounts in one place, and get free credit score monitoring.

FAQ

What is the highest-paying trade job?

The highest-paying trade job is a power plant operator, with an average annual salary of $103,000. This shift work requires operators to monitor the status of power plants, ensuring everything runs smoothly. This role typically requires a high school diploma, certification, and on-the-job training.

What are the easiest high paying trades?

The easiest high paying trade will vary based on an individual’s strengths. But some trade jobs have a lower barrier to entry than others. That, coupled with a high predicted job growth rate, could make them easier roles to be hired into.

The field of ultrasound technology is in demand, with a predicted 19% growth rate in the next decade. Paying $62,500 annually on average, the role requires a certificate and training, but not a bachelor’s degree.

Which trade is in highest demand?

Solar energy installation is growing rapidly, and installers need only technical training to qualify. The role pays $37,000 on average a year, and the demand is expected to explode by over 50% in the next ten years. Because the job entails working with machinery alone or with a small crew, this could also be an attractive job for introverts — as long as they have no fear of heights.

---

Photo credit: iStock/Portra

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

SORL0123002

Read more

When setting income goals, some people use a six-figure salary as a benchmark. But what does it represent exactly? And how do six-figure earners get to that level?

We’ll dig into the legend surrounding the six-figure salary, and whether you need one to build wealth.

How Much Is a Six Figure Salary?

“Six figures” simply refers to a number with six digits. Typically used with money, the term covers amounts from $100,000 to $999,999. (Once you hit 1 million, you’re in seven-figure territory.) Someone with a six-figure salary makes at least $100K.

Recommended: Free Credit Score Monitoring

How to Make Six Figures

There is no one right way to earn six figures. That said, there are strategies that can better position you for this level of income. Getting a good education, while not absolutely necessary, is a solid foundation for the kinds of jobs that pay in the six-figure range. Another path is to start your own business.

The Bureau of Labor Statistics (BLS) lists 159 occupations with median salaries of at least $80,000. The degrees required for these jobs range from a high school diploma to a doctoral degree.

It’s important to recognize that certain careers just pay more than others. Once you’ve chosen a high paying field, you can determine the type of education and training you’ll need to pursue.

You’ll also want to learn how to manage and grow your money. A good place to start is by tracking your expenses and savings with a free spending app.

Recommended: Should I Sell My House Now or Wait?

Average Age to Make Six Figures in the US

According to the U.S Census Bureau, about 15% of households earn between $100,000 and $149,000. Another 8% earn between $150,000 and $199,000. And 10% earn $200,000 or more. Note that this is household income, not individual. Compare those figures to the national average salary of $60,575.

Some workers begin earning six figures in their twenties and thirties. Economists nickname them HENRYs, for “high earners, not rich yet.” But for most people, their “peak earning years” are from age 35 to 54. The majority of people who make six figures will do so in their 30s.

Keep in mind that annual income says nothing about someone’s financial health. An individual making $50K who manages their money well can be in a better place financially than someone making six figures.

Recommended: What Is a Good Entry-Level Salary?

Examples of Jobs That Pay Six Figures

A look at the highest paying jobs by state offers insight into these types of careers. All these jobs make at least $200,000, and all but one are in the medical field. Texas is an outlier. There, chief executives, the highest paying job in the Lone Star State, earn $239,060 on average.

Other types of jobs that can pay a six figure salary include airline pilots ($174,001), IT managers ($136,745), and lawyers ($101,790). A construction project manager earns about $113,257, while a college development officer makes $163,600. It’s probably fair to say that, in any industry, there are successful bosses who make six figures.

Recommended: What is The Difference Between Transunion and Equifax?

What Does a Six Figure Salary Get You?

What a six figure salary will get you depends on several other factors. A big one is the cost of living in your area. This is how much you spend on housing, transportation, food, and other necessities. When someone lives in a place with a high cost of living, they will typically have less disposable income and less to put into savings than someone who lives in a low cost-of-living location. This can be true even if both are making competitive salaries.

Another factor is household size. For a single person living in California, a six figure salary might be more than enough. However, a family of four living in the same area could be just scraping by.

Recommended: How to Counter a Salary Offer

Do You Need a Six Figure Salary to Build Wealth?

Not by a long shot. That said, you need to have a reasonable income to live on. For example, a $20,000 salary typically isn’t enough for a household to meet basic expenses. Let’s look at rent. The 30% rule recommends spending no more than $6,000 on rent per year (that’s 30% of $20K), which works out to $500 a month. The average rent nationwide is now $2,000, four times what you could afford on a $20,000 salary.

What about a $40,000 salary? This may be enough for a single person in some areas, but probably not for a family. And while an individual could afford basic necessities, they may not have much left for building wealth — that is, saving and investing.

Another factor is existing debt. If you are paying down high-interest credit card balances, it can be hard to also put money toward savings.

The income needed to build wealth then is an amount that covers the cost of living in your location, allows you to pay off any debt, and provides enough extra to set aside money for an emergency fund, retirement, and investing.

Recommended: Salary vs Hourly Pay

How to Build Wealth Without Earning a Six Figure Salary

As we hinted above, the steps to building wealth are the same for any salary. First, pay off your debt, especially high interest credit cards and loans. Money going to interest is money that could be going into your savings or investments.

Second, look for ways to cut back on spending: cooking at home instead of going to costly restaurants, closing fee-based apps that you don’t really need, and so on.

Finally, save and invest the money that isn’t going to credit card debt or other nice-to-have but not necessary expenses.

Recommended: Does Net Worth Include Home Equity?

The Takeaway

A six figure salary, meaning one between $100,000 and $999,999, is a benchmark for many people who want to meet financial goals. Having a good education is usually helpful but not always necessary, and certain jobs are more likely to come with six figure salaries. Having a good salary is helpful when building wealth, but the same strategies can be utilized on a five figure salary. Tracking your spending and automating your savings are two good first steps.

SoFi’s money tracker app allows you to monitor your accounts on a single mobile dashboard. And it’s free.

Get a bird’s-eye view of your balances on the go.

FAQ

Is a six figure salary good?

In most places in the United States, $100,000 is a good salary, covering the needs of an individual or small family, while building savings.

What does a six figure salary mean?

This is a salary that contains six digits: from $100,000 to $999,999.

What is an eight figure salary?

This is a salary amount consisting of eight digits: from $10 million annually to $99 million.

---

Photo credit: iStock/Renata Angerami

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

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.

SORL0223006

Read more

An apprenticeship program pairs paid on-the-job training with classroom instruction to produce skilled workers, who get a foot in the door of their preferred field without going to college for four or more years.

Nearly 600,000 apprentices were taking part in 27,300 registered apprenticeship programs in 2022, according to the U.S. Department of Labor’s Office of Apprenticeship.

Here are details about finding an apprenticeship, how much you might earn, the commitment required, and more.

Apprenticeship 101

An apprenticeship is a way to acquire hands-on training, work experience, classroom instruction, and mentorship in a particular trade. Not only is an apprenticeship paid, but it’s also a doorway to a stable and in-demand job.

Most apprentices are promoted or receive a raise during their apprenticeship. The average salary is $77,000, the Department of Labor says.

Apprentices receive a nationally recognized credential in their industry upon completion of the program, and may even earn academic credit toward a college degree. Ninety-three percent who cross the finish line retain employment, according to the Labor Department.

There are several places to look for an apprenticeship. You can use the federal agency’s Apprenticeship
Finder to search by keyword and location, contact your state’s apprenticeship agency, check out trade or labor unions in your area, or use traditional job search engines. If you need more guidance, find an American Job Center near you.

Recommended: Why College Isn’t for Everyone

How Does an Apprenticeship Work?

The majority of apprenticeships are registered either with the Department of Labor or a state apprenticeship agency. Upon entering a program, apprentices receive training under the guidance of an experienced mentor. Many are also required to take academic courses related to that career.

The eligible starting age is 16, but some occupations require apprentices to be at least 18. Some apprentices may also have the option to enter a pre-apprenticeship program, which aims to better prepare workers for the apprenticeship program.

Upon completion of the program, a nationally recognized credential, certificate, or degree is awarded.

How Long Does an Apprenticeship Last?

An apprenticeship program usually lasts four years. Some take as little as one year, and some, as many as six. Whatever the length, apprentices must complete at least 2,000 hours of on-the-job learning plus 144 hours of classroom work.

How Much Do Apprentices Make?

During training, apprentices earn about $17 to $21 per hour, but pay varies by location. Raises are given when new skills are learned.

Do You Have to Pay for an Apprenticeship?

Apprenticeship training is typically offered by the employer at no cost to the apprentice, but apprentices may need to cover certain expenses, such as tools or educational materials.

Employers may pay for the instruction but specify that if an apprentice leaves the program before completion, related costs must be paid back to the employer.

What Types of Careers Offer Apprenticeships?

If construction jobs come to mind when you think of apprenticeships, that’s logical. Many apprenticeships are in the construction trades, but not all are.

Here’s a sample of jobs and the number of active, registered apprentices in 2022.

Occupation	Active apprentices in 2022	Median annual wage*
Electrical power line installers and repairers	15,249	$78,310
Heavy truck and tractor-trailer truck drivers	9,944	$48,310
Heating, AC, and refrigeration mechanics and installers	8,535	$48,630
Nursing assistants	4,033	$30,310
Firefighters	2,306	$50,700
Registered nurses	2,281	$77,600
Food service managers	1,820	$59,440
Barbers and hairstylists	1,751	$29,680
Software developers	1,219	$120,730
*2021 Bureau of Labor Statistics wage data for the occupation as a whole

What About College or Trade School?

Alternatives to apprenticeships include attending a four-year college or a trade school. There, you’ll be provided with a broader set of knowledge along with the key skills required for your area of study.

Trade school costs less than college but still can cost thousands of dollars a semester. As an apprentice you can learn to do something you enjoy while getting paid. What’s the catch? Trade school degrees often take about two years to complete. Many apprenticeships last longer, and even getting one can be tough.

Then there’s the traditional college route. But is college worth it?

More than half of college students take out student loans, usually federal student loans but in some cases private student loans. The average borrower leaves school owing nearly $29,000.

Yet the return on investment may appear only after 10 or more years. The ROI for a bachelor’s degree is 38% after 20 years on average, according to the Education Data Initiative.

Major U.S. companies have vowed to change their hiring habits by offering career paths to people without four-year college degrees. Almost two-thirds of U.S. workers do not have a bachelor’s degree, and job screening by college degree hits minorities especially hard. But change has been slow in coming. A bachelor’s degree remains the standard in many cases.

Beyond the cost of college tuition, whether you choose an apprenticeship or a degree, you’ll need to evaluate salary and career potential using either path to find the one that’s right for you.

Student Loans, Grants, and Scholarships

Whether you choose trade school, college, or an apprenticeship with a community college component, you might need financial aid in the form of grants, or scholarships (try this scholarship search tool), federal student loans, federal work-study, or private student loans.

Private student loans can be helpful, but because they lack the benefits and borrower protections available with federal student loans, they are intended to fill in gaps after other funding sources have been spoken for.

Apprentices in a credit-bearing college program who qualify can receive federal Pell Grants.

And yes, it’s possible to take out student loans for community college.

Do hunt for scholarships. Every year sees $2 billion in unclaimed scholarships, meaning merit- and need-based aid was left on the table.

Recommended: Grants and Scholarships by State

Pros and Cons of an Apprenticeship

Here’s a snapshot of the upsides and potential downsides of apprenticeships.

Pros	Cons
Apprentices can earn a salary while avoiding big student debt.	An apprentice will typically start with a relatively low salary.
Apprentices build new skills through hands-on experience and classroom instruction, and may even earn credit toward a college degree.	The competition to get an apprenticeship can be fierce, especially in high-paying fields.
It can open the door to a well-paid career.	Many occupations still require at least a bachelor’s degree, particularly in the medical and science fields.

Apprenticeship vs Internship

Both apprenticeships and internships aim to help you gain expertise with hands-on training in a certain industry, but several differences should be noted. Here are some of the most common ones.

•   Duration: Internships typically last only one to three months, while an apprenticeship can last up to six years.

•   Pay: Apprentices receive at least the minimum wage specified by the Fair Labor Standards Act for hours on the job. Wage increases are earned as the apprentice gains and uses skills while working for the employer. Internships are usually unpaid, temporary positions.

•   Structure: Apprenticeships have a structured training plan and prepare an apprentice to fill an occupation within the organization. Internships aren’t always structured and only prepare interns through entry-level work.

•   Mentorship: Apprentices work with an experienced mentor. Internships don’t always include mentorship.

•   Credential: After completing an apprenticeship program, nationally accredited certification is awarded. Interns generally don’t receive any type of credential.

•   Job opportunities: Interns are usually in college and get an opportunity for career exploration and skill development. An apprenticeship provides in-depth training, and apprentices can potentially transition into the same role after completing the program and earn a higher salary.

The Takeaway

An apprenticeship can be an excellent way to gain access to a company or a field you wish to work in without going the traditional college route. They aren’t for everyone, though; nor are they available in every field.

If you decide to pursue a bachelor’s or graduate degree and find that you could use some extra help, a SoFi Private Student Loan could be a lifeline. The loans come with no fees and can cover up to 100% of school-certified costs.

Find the right student loan to get your career on track.

---

Photo credit: iStock/JohnnyGreig

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.

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.

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.

SOIS1222005

Read more

When applying for financial aid to fund their college educations, students and their parents are often introduced to words they’d never heard of before. To help you learn the lingo, here are definitions of 14 important financial aid terms, plus information about different ways to pay for college.

Financial Aid Terminology for Parents

1. College Grants

Grants are used to help fund a qualifying student’s college education, and unlike loans, they typically don’t need to be paid back. They are often based on financial need and are available from private and public organizations. Some grants have criteria that a student must meet, such as maintaining a certain grade point average. Here is information about college grants from the U.S. Department of Education .

2. Cost of Attendance (COA)

A student’s cost of attendance (COA) is the total of all costs to attend college in a given year. This includes tuition, room and board, book and supplies, loan fees, costs associated with studying abroad or managing a disability, and more.

A COA is different from an invoice a college may send a student, which is more comprehensive. The COA figure is used to determine how much financial aid a student may be eligible to receive. Anyone who receives a form of financial assistance is not responsible for paying the full COA.

3. Expected Family Contribution (EFC)

The expected family contribution (EFC) is a number colleges use to determine a student’s eligibility for financial aid. It’s calculated using a formula that considers a family’s income, savings, investments, benefits, family size, and more.

Starting with the 2024-2025 school year, the EFC will be replaced by the Student Aid Index, or SAI. Both serve a similar function, but there are key differences in how they work and how students receive financial assistance. Here’s where you can find more information about the SAI.

Recommended: How the Middle Class Affords College

4. Free Application for Federal Student Aid (FAFSA)

FAFSA is the official government form that students must fill out to be eligible for federal student loans and grants. Filling the FAFSA out does not guarantee that a student will receive aid, but it must be completed annually in order to be considered for the upcoming academic year. The information provided will be used to calculate a student’s expected family contribution (see that definition above). Here’s more information about completing a FAFSA application.

5. Financial Aid Award Letter

A financial aid award letter goes by a few different names: merit letter, award letter, a financial aid offer or a financial aid package. But no matter what you call it, once a student fills out a FAFSA, they’ll receive one of these letters from each college that accepts them. A typical letter will list a student’s cost of attendance, expected family contribution, awarded grants and scholarships, work-study details, and federal student loans. Many schools now provide this information electronically.

6. Merit-Based Assistance

Merit-based assistance is based upon a student’s abilities and accomplishments. This can include their grade point average, athletic achievements, or another skill. Financial need is not typically taken into account. Students generally receive merit-based aid directly from the college.

7. Need-Based Assistance

Need-based assistance is provided to students based on their financial needs, and is commonly offered by federal and state governments, colleges, and other organizations. There are three types of federally granted need-based financial aid: Pell Grants, work-study programs, and Subsidized Direct Student Loans. Each of these is defined in this post.

To qualify for federal need-based aid, a student must fill out the FAFSA. Colleges may require additional information for non-federal aid. Simply applying for need-based aid does not mean a student will receive it, though applying early may potentially improve their chances.

8. Parent Loans/Direct PLUS Loans

Parents can borrow funds to help their children pay their college expenses, including through federal loans called Direct PLUS Loans. When this type of loan is provided to a parent borrower, it’s often called a Parent PLUS Loan. Not all schools participate in the Direct Loan Program, so students should check with their colleges of choice to see if this type of funding is an option. Private parent loans are also available through lenders, including SoFi.

Note that graduate or professional students are also eligible to borrow Direct PLUS Loans.

9. Pell Grants

A Pell Grant is a federal form of aid based solely on need. It’s the biggest source of federal grants. To receive these funds, a student must fill out the FAFSA and meet eligibility requirements. Because this is a grant and not a loan, it typically does not need to be repaid.

10. Scholarships

A scholarship is a type of funding awarded to students to help them pay for a college education. They are available through federal and state government sources, colleges, private and public organizations, and more.

Unlike loans, scholarships typically don’t need to be repaid. They can be based on need or merit, or a combination of the two. There is a wide range of scholarship possibilities, so it can be worthwhile for the student to research their options and apply for ones that seem to be a good match.

Recommended: Scholarship Search Tool

11. Student Aid Report (SAR)

After a student completes their FAFSA, they’ll receive a student aid report (SAR). This report provides basic information about the student’s federal student loan eligibility and includes the answers they provided on the FAFSA application. The SAR also contains the Expected Family Contribution (EFC) and a four-digit Data Release Number (DRN), which students may need to provide when changing information on their FAFSA. It’s important to review the entire report and address any errors, as colleges use that information to determine aid eligibility.

12. Subsidized vs Unsubsidized Assistance

Federal student aid can include both Direct Subsidized Loans and Direct Unsubsidized Loans, which are also referred to as Stafford Loans or Stafford Direct Loans. There are notable differences between the two.

Subsidized loans are reserved for undergraduate students with demonstrated financial need. The school determines the amount available for each qualifying student. The government will pay the interest on a subsidized loan as long as the student is enrolled in school at least half time (generally 6 credit hours per semester), for six months after the student leaves school (called the “grace period”), and during deferment periods.

With unsubsidized loans, students do not need to demonstrate financial need to qualify, and both undergraduate and graduate students are eligible. Loan limits are higher than with subsidized loans, but interest rates are generally higher, too. The borrower is responsible for interest that accrues from the day their funds are made available. If a student chooses not to pay the interest while they’re in school, it will continue to accumulate.

13. Work-Study

The federal government’s work-study program provides college students who have demonstrable financial need with part-time jobs to help them earn money for their college education. The program attempts to match a student with work in their area of study or in jobs that benefit the community. Students who are interested in this program should check with their colleges of choice to see if they participate.

Here is additional college financial aid glossary , plus financial aid secrets that may help students more effectively fund their education.

Overall College Financial Aid Plan

When it comes to planning how to pay for college, it helps to understand all the available options and how they may be combined. Students and their parents may have money to contribute to help cover the expenses. Scholarships and grants can reduce the bill and typically don’t need to be paid back, while work-study opportunities allow students to earn money to cover some expenses while in college.

Subsidized loans give qualifying students some time to establish themselves financially before the debt starts accruing interest they’ll have to pay. Meanwhile, unsubsidized or private student loans can help borrowers cover remaining costs.

Recommended: Guide to Private Student Loans

Private Student Loans at SoFi

Private student loans, including those from SoFi, can come in handy once you’ve exhausted your other loan options. Borrowers can use the funds to cover all school-certified costs, including tuition, books, room and board, transportation, and more.

SoFi offers fee-free private student loans for undergraduates, graduate students and their parents. These loans don’t have any fees, and borrowers can choose between four different repayment plans. When applying for a SoFi loan, students can quickly and easily find out if they prequalify and at what rates. Adding a cosigner is also simple — just a few clicks away.

SoFi private student loans offer competitive interest rates for qualifying borrowers, flexible repayment plans, and no fees.

FAQ

What is a cosigner?

A cosigner helps assure lenders that someone will pay back the loan. Their income and financial history are factored into the loan decision, and their positive credit standing can benefit the student’s loan application.

What’s the difference between a student loan lender and a student loan servicer?

Lenders lend borrowers money to help cover school-related costs. Servicers send borrowers their monthly bill, process payments, field customer service requests, and handle other administrative tasks.

How do I calculate my college costs?

There are several online tools to help students estimate the potential cost of attending college. Net price calculators, for instance, are available on a school’s website and give cost estimates based on basic personal and financial information provided by the student.

---

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

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

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

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

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.

SOIS1222002

Read more