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Jan

2023

Guide to Transferring 401(k) to a New Job

By Jamie Cattanach | Budgeting & Goals, Growing Wealth, invest, Investing | No Comments

It’s easy to forget about old 401(k) plans when changing to a new job. Some people forget about it because the company that manages it never reminds them. On the other hand, others are aware of their old account, but they’ve been putting off the rollover because it sounds hard.

Many companies don’t make the process easy for customers to roll over their 401(k) accounts from previous jobs. But it can be worth the inconvenience.

By not rolling it over, you might be losing some serious cash. That’s right — losing money, so it’s easy to miss. Here are a few key reasons to prioritize a 401(k) rollover.

Key Points

• Rolling over a 401(k) may save you money — if your new 401(k) plan or rollover IRA charge lower fees.

• Another reason to roll over a 401(k) is if your new plan or rollover IRA give you access to better investment options.

• You don’t have to roll over your 401(k) to a new employer’s plan, but consolidating your 401(k) savings may help you manage them better.

• If you request that the funds from a 401(k) rollover be sent to you directly, you have 60 days to send the funds to another plan or IRA account. If you miss the deadline, the IRS will typically consider the rollover a distribution, and you’ll be taxed and possibly fined for the early withdrawal.

• Some 401(k) plans offer financial services, such as financial advisor consultations, to help employees achieve their retirement goals.

3 Reasons to Transfer Your 401(k) to a New Job

It may seem easier to leave your 401(k) as it is and not worry about the hassle of transferring it to a new job. However, the following are three main reasons to rollover a 401(k):

1. You May Be Paying Hidden Fees

All sorts of fees go into effect when you open a 401(k), including record keeping, maintenance, and fund fees. Expressed in a percentage, these fees inform the expense ratio of a plan.

Employers may cover those fees until you leave the company. Once you’re gone, that cost might shift to you without you realizing it. If the fees are too high with your previous employer’s 401(k), rolling over a 401(k) can be advantageous.

Fees matter: When you pay a fee on your 401(k), you’re not just losing the cost of the fee but also all the compound interest that would grow along with it over time. The sooner you roll your plan over, the more you could potentially save.

2. You Might Be Missing Out on Better Investments

If you aren’t happy with the investment options in your old 401(k) and your new employer accepts rollover 401(k)s, you might be able to save money while investing in a broader range of investment vehicles.

401(k) accounts grow at different rates depending on which assets you invest in. If the retirement savings plan at your new company offers a selection of stocks and bonds that better aligns with your financial goals, it might be time to initiate a rollover.

The money sitting in your old 401(k) could grow faster if you roll it over into a new plan — it’s certainly worth investigating the growth rates of each. Keep in mind that investors can lose money when investing, too, so it always makes sense to consider your personal risk tolerance when deciding how to invest in your retirement accounts.

Also, if you leave your 401(k) where it is, you may think about it infrequently, so your portfolio may drift from your desired asset allocation as you age. It’s important to keep tabs on your investments to ensure they are on track and appropriate for your time horizon and goals.

3. You Could Lose Track of Your 401(k) Account

It’s common for people to lose track of old 401(k) accounts. According to some estimates, nearly 20% of all 401(k) assets in the U.S. are lost or missing. Rolling over a 401(k) to your new employer’s plan may be a way to keep track of your retirement assets.

Losing track of a 401(k) account is not necessarily the fault of an investor — it’s just logistics. It’s harder and more time-consuming to juggle multiple retirement accounts than it is to juggle one. Until you retire, you’ll manage two (or more) websites, two usernames and passwords, two investment portfolios, and two growth rates for decades.

And if you leave this next job to go to a third (or a fourth, or a fifth), the 401(k) plans could pile up, creating even more tracking work for you. Plus, when you’re no longer with an employer, you might miss alerts about changes that may occur with an old retirement plan.

Recommended: How to Roll Over Your 401(k)

Do You Have to Rollover Your 401(k) to a New Employer?

You do not necessarily have to roll over your 401(k) to a new employer or rollover your funds into an individual retirement account (IRA). If you are pleased with your old employer’s retirement plan options and fees, you can leave the funds in that 401(k), provided the employer allows it. But if you keep your money in your old employer’s 401(k), you cannot make additional contributions to the account.

If you have between $1,000 and $5,000 in your old employer’s 401(k) account, the employer may roll over your account into an IRA if you do not choose to receive the money or roll it over yourself. If you have less than $1,000 in your 401(k), the employer may send you a check of the funds, with less than 20% income tax withholding, if you do not choose to roll it over within 60 days of leaving the employer.

Recommended: What is an IRA and How Does it Work?

What to Do With Your 401(k) After Getting a New Job

When you get a new job, and you have a 401(k) from your previous employer, you have several options for what to do with the money. As mentioned above, you can leave the money in your old employer’s 401(k) plan. But if you don’t like your old employer’s 401(k) plan and options, you can do one of the following:

Roll Over a 401(k) to Your New Employer’s Plan

If your new employer offers a 401(k) plan and you are eligible to participate, you can roll the money over from your old plan to your new plan. Consolidating your 401(k)s can help you manage all of your retirement savings in one place, but it’s important to compare the fees, investment options, and other features of each plan before making a decision.

Rolling over a 401(k) might seem intimidating or inconvenient at first, especially if you’re moving onto your second job and this is the first time you’ll be rolling over a 401(k). The actual process of rolling over a 401(k) isn’t too complicated once you’ve decided where your existing funds will go.

Roll Over a 401(k) to an IRA

An IRA is another option for your 401(k) funds. Rolling a 401(k) into an IRA can give you more control over your investments and potentially lower fees, but they do not come with employer-provided benefits, such as matching contributions.

Recommended: IRA vs 401(k): What Is the Difference?

Cash Out Early

There is always the option of cashing out your 401(k). Should you choose to cash out your 401(k) and you’re younger than 59 ½ years old, you will have to pay taxes on the money, and perhaps an additional 10% early withdrawal fee.

There are some circumstances when the 10% fee is waived (but not the income tax), such as when the funds will be used for eligible medical expenses, among other circumstances.

What Happens to Your 401(k) if You’ve Been Fired?

If you’ve been fired, your 401(k) account is typically unaffected, and you will still have access to the funds you’ve contributed to the account and vested employer contributions, known as the 401(k) vested balance. However, you lose your right to any remaining unvested funds following voluntary or involuntary termination.

Nonetheless, the rules regarding your access to the funds may depend on the terms of the specific 401(k) plan and the reason for your termination.

How Long Do You Have to Transfer Your 401(k)?

If you are rolling over your 401(k) to a new employer’s plan or an IRA, you generally have 60 days from the date you receive the funds to deposit them into the new account. If you do not complete the rollover within 60 days, the funds will be considered a distribution and subject to taxes and penalties if you are under the age of 59 ½.

Advantages of Rolling Over Your 401(k)

Rolling over your 401(k) to a new plan can benefit your overall financial plan. Here are a few ways this transition might help your financial well-being.

One Place for Tax-Deferred Money

Transferring your 401(k) to your new employer’s plan can help consolidate your tax-deferred dollars into one account. Keeping track of and managing one account may simplify your money management efforts.

A Streamlined Investment Strategy

Not only does consolidating your previous 401(k) with your new 401(k) make money management more straightforward, it can also streamline your investment strategies.

Financial Service Offerings

Some 401(k) plans offer financial services, such as financial advisor consultations, to help employees achieve their retirement goals. If your previous employer didn’t provide this service and your new plan does, taking advantage of this offering may help you achieve an investment plan that meets your exact goals rather than a standardized option.

Disadvantages of Transferring 401(k) to a New Job

While there are several advantages to a 401(k) rollover to a new job, there are also some potential disadvantages. Some drawbacks of rolling over a 401(k) from a previous employer to a new employer’s plan include the following:

• Loss of certain investment options: The new employer’s plan may offer different investment options than the previous one, limiting your ability to diversify your portfolio.

• Increased fees: The new employer’s plan may have higher fees associated with it, which could reduce the overall growth of your investment over time.

• Delays: The process of rolling over your 401(k) can take time, which could cause delays in accessing your funds.

How to Roll Over Your 401(k)

So, how do you transfer your 401(k) to a new job? If you decide to roll your funds into your new employer’s 401(k), you’ll most likely need to:

1. Contact the plan administrator to arrange the rollover. You may need to choose the types of investment you would like before you initiate the rollover. If not, you can take a lump-sum transfer and allocate the funds gradually to different investments of your choosing.

2. Complete any forms required by your employer for the rollover.

3. Request that your former plan administrator sends the funds via electronic transfer or a check so you can move the funds directly to the new plan administrator.

You may have to wait until your employer’s next open enrollment period to complete the rollover, but you might consider using that time to research the plan’s investment options so you’ll be ready when the time comes.

401(k) Rollover Rules

You may select a direct, trustee-to-trustee, or indirect rollover when requesting a transfer. With a direct rollover, the check is made out to the financial institution (for your benefit). Because the funds are directly deposited into the new account, no taxes are withheld. Similarly, a trustee-to-trustee transfer occurs between plan administrators but the funds change hands electronically.

With an indirect rollover, the check is payable to you, with 20% withheld for taxes. You’ll have 60 days to roll over the funds (80% of your previous plan) into an IRA or other retirement plan. If you want to contribute the full amount of your previous plan, you can add money to bring the lump contribution back up to the balance before rollover. At that point, you’d be able to count the 20% withheld as taxes paid.

Rolling Over a 401(k) Into an IRA

If you choose to roll your 401(k) funds into an IRA that’s not employer-sponsored, a direct rollover is a method that takes most of the guesswork out of the transfer. This means the funds will be taken from your previous account and rolled directly into the new one.

Doing it this way should prevent your previous lender from sending you a check, resulting in unforeseen early withdrawal tax situations.

Opening a new retirement account online is relatively straightforward, but there are some steps to opening an IRA that might be worth reviewing before you start. Once your funds are rolled over, you can choose the investments that work for your retirement goals.

Here are the general steps to roll over a 401(k) into an IRA:

1. Choose an IRA custodian: This is the financial institution that will hold your IRA account. Some popular choices include brokerage firms, banks, and credit unions.

2. Open an IRA account: Once you have chosen an IRA custodian, you need to open an IRA account. You will need to provide personal information such as your name, address, and Social Security number.

3. Request a 401(k) distribution: Contact the plan administrator of your old employer’s 401(k) and request a distribution of your account balance. You will need to specify that you want to do a “direct rollover” or “trustee-to-trustee” transfer to your new IRA account, since these are the most straight forward transfers.

4. Provide IRA custodian information: Give your old employer’s 401(k) plan administrator the IRA custodian’s name, address, and account information, so they know where to send the funds.

5. Wait for the funds to be transferred: The process of transferring funds can take several weeks, so be patient.

6. Monitor the account: Once the rollover is complete, monitor your IRA account to ensure that it has been funded and that the balance is correct.

7. Invest your funds: Once the funds have been transferred to your IRA account, you will need to invest with the transferred funds.

Remember that your 401(k) plan administrator may have specific procedures for rolling over your account, so be sure to follow their instructions. Also, there are some rules to follow, such as the 60 days rollover rule; it’s essential to consider these to avoid penalties.

The Takeaway

There are many benefits to rolling over a 401(k) after switching jobs, including streamlining your retirement accounts and directing your money to suit your individual financial needs and goals. While some may view it as inconvenient, going through the process, whether you want to roll over a 401(k) into your new employer’s plan or an IRA, may help you build wealth for retirement.

If you have an old 401(k) you’d like to roll over to an online IRA, SoFi Invest® can help. With a SoFi Roth or Traditional IRA, investors can access investment options, member services, and our robust suite of planning and investment tools. And SoFi makes the 401(k) rollover process seamless and straightforward — with no need to watch the mail for your 401(k) check. There are no rollover fees, and you can complete your 401(k) rollover quickly and easily.

Help grow your nest egg with a SoFi IRA.

FAQ

Should I roll over my 401(k) to new employer?

Rolling over your 401(k) to your new employer may be a good idea if the new plan offers better investment choices or if consolidation leads to lower account fees. Another benefit is convenience — it’s easier to manage one account than two. That said, if control is most important to you, rolling over your 401(k) to an IRA may be the better option.

How long do you have to move your 401(k) after leaving a job?

You typically have 60 days from the date of distribution to roll over your 401(k) from your previous employer to an IRA or another employer’s plan. Otherwise, it will be considered a taxable distribution and may be subject to penalties. However, some 401(k) plans may have different deadlines for rolling over your funds, so check with your plan administrator for specific details.

How do I roll over my 401(k) from my old job to my new job?

To roll over your 401(k) from your old job to your new job, you should contact the plan administrator of your new employer’s 401(k) plan and request a direct rollover or trustee-to-trustee transfer from your old plan to your new plan. Provide the necessary account and personal information and follow the instructions provided by the plan administrator to complete the rollover process.

What happens if I don’t roll over my 401(k) from my previous employer?

You generally are not required to roll over a 401(k) from a previous employer to your new employer’s 401(k) or an IRA. However, some experts recommend rolling over a 401(k) to a single account to simplify your retirement investments.

You may also be interested in:

What Is a Stock Market Crash?

What Happens to Your 401(k) When You Leave Your Job?

Can I Roll a 401(k) Into a Roth IRA?

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Jan

2023

How Much Electrician School Costs and How to Pay for It

Paying for Electrician School and How Much It Costs

By Jennifer Calonia | Building Your Career, Life & Career, student_loan | Comments Off

Becoming an electrician can lead to a fulfilling, rewarding, and high-paying career. However, electrician school costs up to $20,000, depending on the program.

Paying tuition costs up front may not be possible. To help manage this hefty electrician trade school price tag, there are a few different program and financing options to consider.

How Much Does Electrician School Typically Cost?

A profession as an electrician is among the list of high-paying, no-degree jobs that can be a lucrative career. If you decide to enroll in electrician trade school to help you along your path to becoming an electrician, it can cost anywhere from $1,000 to $20,000 to complete the program. This might depend on the program you enroll in and the school you attend.

How Long Does Electrician School Take?

Community college electrician school programs prepare students for apprenticeship and a future career as an electrician. Typically, it takes one to two years to complete electrician trade school.

What Are Classes Like at Electrician School?

Although each program is different, generally, electrical school guides you through relevant mathematics, standardized electrical code, electrical theory, and fundamental techniques regarding wiring, safety, conduit bending, and other skills.

In addition to in-class knowledge, electrician school often includes hands-on practical application.

Can You Make Money As an Electrician While In School?

It might be challenging to secure paid electrician work, if you’re in the middle of electrician school. However, if you’ve been accepted into an electrical apprenticeship program, and are attending electrical school on the side, the apprenticeship often involves paid, hands-on learning opportunities and possibly health benefits.

Pros and Cons of Electrician School

If you’re unsure whether enrolling in electrician school is worth it, weigh the advantages and disadvantages of going this route.

Pros	Cons
Might be a fast way to get in the door toward an electrical career	State might still require an apprenticeship program
Sets you apart when applying for apprenticeship	Potentially high-cost and might incur student debt
Might count toward required apprenticeship hours	Not an “earn as you learn” option

Financing Electrician School

Although you can choose to pay entirely out of pocket for electrician trade school costs, it’s not always feasible. Fortunately, there are a handful of ways to get your trade education financed — some of which must be repaid while others don’t need to be paid back.

Financial Aid

Future electricians attending an eligible trade school may be able to qualify for federal student aid including grants, scholarships, work-study, or federal student loans. Not all trade or vocational schools qualify for federal aid.

To find out if the program you are considering is eligible, take a look at the Federal School Code Search administered by the U.S. Department of Education. Another option is to check in with the financial aid office at the school.

To apply for federal financial aid, students will need to fill out the Free Application for Federal Student Aid (FAFSA®).

Grants

Federal grants, like the Pell Grant, are available to students who are pursuing a bachelor’s degree and demonstrate financial need. Pell Grants typically don’t need to be paid back, and offer awards up to $6,895 for the 2022-23 academic year.

Recommended: FAFSA vs. Pell Grants

Scholarships

Scholarships are another type of gift aid that doesn’t need to be repaid. They can be found through your state, local government, school, and nonprofit institutions. For example, the American Public Power Association offers lineworker and technical education scholarship awards of $2,000 to chosen recipients.

Employer Sponsoring

If you’re already employed, and want to enroll in an electrician school to enhance your job-related skills, ask your employer if it’s willing to sponsor your electrician school cost. Some companies offer this benefit as long as you successfully complete the program and agree to apply your training within the company for a certain number of years.

Federal Student Loans

Through the FAFSA, you can see if you’re eligible for subsidized or unsubsidized student loans. This type of aid must be paid back, plus interest at a fixed rate.

Private Student Loans

If the above financing sources aren’t an option and you need funds, private student loans may help pay for electrician trade school costs. Private student loans are offered by banks, credit unions, trade schools, and other financial institutions. Be aware that they typically don’t offer the same level of protections as federal student loans, such as extended forbearance or deferment options if you face financial hardship.

Recommended: Guide to Private Student Loans

How to Select an Electrician Training Program

Deciding how you want to pursue an electrician training program highly depends on the amount of time you’re willing to commit, and your preferred learning style. Below is an overview of the program options available.

Apprenticeship

Learning the electrical trade is commonly done through apprenticeship. This option is typically a four-year commitment with a mix of classroom and field training. This option lets you learn the hands-on skills and knowledge needed to become an electrician while earning a wage.

Certificate

Certification can take about 1 to 2 years to complete. You can enroll in an electrician certification program through a local community college or trade school. In some states, like California, an electrical certification might be required to perform work for contractors with a certain license class.

Associate Degree

An associates degree can offer more comprehensive education, though it’s not typically a requirement to be an electrician. Associate degrees might be offered through a trade school or community college, and can help boost applications for apprenticeship programs.

Bachelor’s Degree

If you’d like to pursue a bachelor’s degree as an electrician in a highly academic setting, a four-year program might make sense for you. Students typically enroll in programs, like electrical technology and learn about regulation, electrical theory, and more.

This option provides the greatest flexibility in terms of transferable courses for related industries, like electrical and/or systems engineering.

Military Training

Another way to obtain electrical school training is through the U.S. Armed Forces. By enlisting as a service member, you’ll first receive basic military training, and afterward, can receive electrical job training if you meet program requirements.

For example, the U.S. Army offers interior electrician job training for soldiers who complete 10 weeks of basic training, and seven weeks of Advanced Individual Training, and earn an ASVAB score of 93 in Electronics.

Electrician Job and Income Prospects

According to the U.S. Bureau of Labor Statistics, the job outlook for electricians from 2021-2031 is expected to grow at an average pace at 7% growth.

PayScale.com estimates that an electrician journeyman earns an average base salary of $61,886 per year, while a master electrician earns a higher salary at $73,334 per year. Salaries, however, depend on a variety of factors, such as skill certifications, years of experience, and location.

Alternatives to Becoming an Electrician

If after learning how much electrician trade school costs you feel it’s not the right profession for you, pursuing another trade or performing a hands-on field job might be of interest. Some alternative jobs include being a:

• Construction laborer

• Automotive service technician

• Equipment operator

• HVAC installer

• Home inspector

• Project manager

The Takeaway

Electrician school costs can range widely, from $1,000 to $20,000, depending on factors like the program, location, and more. Paying for electrician school costs can be an incredible investment for your career advancement and to enhance your technical knowledge, but it’s also a financial commitment.

If you’ve exhausted your financing options, and find that you need additional aid, a private student loan from SoFi might help (though SoFi’s student loans aren’t available for those attending trade school or community college). Undergraduate student loans may be available for those pursuing a four-year electrician degree.

Qualifying borrowers can secure competitive private student loan rates and SoFi loans have zero fees, and up to the total cost of your school’s certified cost of attendance. Plus, it only takes three minutes to check your rate online.

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

FAQ

How long does electrician school take?

An electrician school program can take about four years to complete for an apprentice to acquire the training necessary to become a state-licensed Journeyman electrician who’s able to work unsupervised. However, this time frame varies, depending on the training path you decide to take and the licensing requirements of your state.

How much do the highest paid electricians make?

Master electricians are the highest level in the field and command an average base salary of $82,000 per year, according to PayScale data. Where you’re located and your years of experience impacts your earning potential.

What are the highest paid trade jobs in the U.S.?

A profession as an electrician makes up the top five highest-paid trade jobs in the U.S., along with licensed practical nurses, HVAC technicians, home inspectors, and plumbers.

Photo credit: iStock/Davizro

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Jan

2023

All About Signature Student Loans

By Kelly Boyer Sagert | Going to College, Student Loans, student_loan | Comments Off

When you’re looking for funds to pay for your college education, you’re likely to go after federal funds and all of their benefits first — and, if that isn’t enough, then you’ll seek private loan funding. But, what is a signature student loan, exactly? Does it make sense to take out this type of funding? This post will share insights into a student signature loan.

What Are Student Signature Loans?

Known as a “sig student loan” for short, it’s a type of loan that people use to pay expenses for college. They can also be known as “good faith loans” because they’re granted to a borrower on the basis of a signature only with no collateral. The borrower takes on a certain amount of private (non-federal government) debt in the form of a loan at a predetermined interest rate, agreeing to pay it back in a series of installments, and then uses the funds to pay expenses.

What Type of Loan is a Signature Student Loan?

As you explore options, you’ll come across different types of student loans. In general, there are two broad types: federal and private student loans. Federal loans require the filling out of a FAFSA to see if a student qualifies for any type of aid from the federal government; some colleges and universities require a FAFSA even for scholarships and grants. A student signature loan, however, is a form of private funding, one where collateral is not needed, making it an unsecured private loan for college expenses.

Common Uses of a Signature Student Loan

Common uses of a signature student loan include for tuition/attendance, books, and housing. Here’s more about each.

Tuition/Attendance

Tuition costs can vary but a typical student could pay $10,000 a year for in-state tuition at a public four year institution and up to $40,000 to $50,000 in tuition at a private university each year. So, a student may decide to use a sig student loan to cover costs of tuition/attendance that aren’t covered by grants, scholarships, and federal student loans.

Books

The average college student spends between $600 and $1,500 each year to pay for their books and supplies. One single hardback textbook can now cost as much as $400 although the average is between $80 and $150. So, just about 30% of students use some form of loan funding to pay for their college books.

Housing

Although some students continue to live at home during college, many pay for room and board. At a public, four year institution, this could cost $9,000 to $13,000 a year. At a private, non-profit institution, it could cost a similar amount, depending on whether the student lives on or off campus.

Should You Get a Signature Student Loan?

It depends on your unique situation because signature student loans come with pros and cons that we’ll explore soon in this post. As general guidance, students who don’t receive enough funding through grants, scholarships, and federal student loans often look towards private funding to make up the difference. Private loans, sometimes called signature student loans, are offered by banks, credit unions, and online lenders.

Pros and Cons of Signature Student Loans

Pros of Signature Student Loans

Pros of signature student loans include the following:

• Extra Source of Funds

• Variety of Repayment Terms

• Flexibility of Usage

• Here’s more about each

Extra Source of Funds

Private student loans, also called a student signature loan, can provide a source of funding for college after grants, scholarships, and federal options have been exhausted. Federal financial aid can include grants and scholarships typically being awarded without repayment requirements. Federal loans are also considered financial aid. Students who demonstrate financial need may qualify for a subsidized loan, meaning that the government covers the interest while the student attends school. Student signature loans can help fill in funding gaps.

Variety of Repayment Terms

With a private student loan, funds are obtained from a private lender. Some offer better rates and terms than others with some of them deferring payments while the student is attending college classes. Compare rates and terms to choose which route is best for you.

Flexibility of Usage

In general, a private loan can offer flexibility with the funds used; for example, this funding can be used as one of the undergraduate student loan options or one of the graduate student loan options: for tuition, books and supplies, and/or housing expenses.

Cons of Signature Student Loans

Unlike a federal student loan, private lenders of student signature loans don’t rely upon information found in a FAFSA. Instead, a student interested in receiving private funding would fill out an application with the lender of interest. In other words, the student must qualify for the loan.

Qualifying for a Sig Student Loan

Loan terms can vary by lending institution. This includes the interest rates offered, borrowing limits allowed, and the length of the loan.Some require payments while the student is in school while others will defer payments until the student is out of school. Choose parameters that fit your needs with the understanding that you’ll need to qualify for the loan program.

Credit Score

The private lender may require you to have a certain credit score to obtain the loan or to get the best rates and terms. The three main credit bureaus that issue scores are Equifax, Experian, and TransUnion. A private lender will likely have a certain credit bureau that they use to get an applicant’s credit scores, and yours will need to fit within their lending guidelines to get loan approval.

Income

The lender will also want to see proof of a steady income, one that’s sufficient to pay back the loan. If you don’t have enough on your own, perhaps a parent would cosign the loan for you, reassuring the private lender that the loan will be appropriately paid back.

Other Ways to Pay for College

Ways to pay for college include:

• Financial aid

• Federal loans for students

• Federal PLUS loans for parents

• Work study jobs

• Part time jobs

• Private student loans

• Here’s more about each

Financial Aid

In general, student financial aid can be a combination of grants and scholarships, federal student loans, private student loans, and funds from jobs (work study or part time jobs).

Federal Loans for Students

Federal Direct loans, also known as Stafford loans, can be either subsidized or unsubsidized. With the first, the government covers the interest while the student is in school; with the latter, the interest accrues while the student is in school. In either case, finding out what you qualify for in federal funding can be a logical first step.

Federal PLUS Loans for Parents

Parents can take out a Parent PLUS loan for an undergraduate with fixed interest rates and flexible repayment methods. These loans do require a credit check and can also be taken out by graduate/professional students. The maximum amount that can be borrowed is the full cost of tuition minus other financial assistance the student receives.

Work-Study Jobs

There is a federal work-study program that allows students with financial need to earn income to pay their education-related expenses. Ideally, the work will be connected to community service and/or the student’s academic study courses. This program is managed by the colleges themselves, so check with yours to see if they participate and if you qualify.

Part Time Jobs

If you don’t qualify for work study, you can still seek part time employment in the general location of your university, perhaps at a restaurant or coffee shop or by babysitting or dog walking. This allows the student to earn income, hopefully on a schedule that is flexible enough to work around college commitments.

Private Student Loans

This can be a source of funding for college expenses when grants, scholarships, and federal funding options have been exhausted. Private lenders can have different loan programs, so compare carefully before making a decision.

The Takeaway

In short, a signature student loan is a type of unsecure (no collateral) form private funding to help with educational expenses. It’s a private form of lending. There are pros and cons to this type of lending as this post demonstrates.

If you’re exploring private student loan options, SoFi can help. SoFi offers a low-interest rate, no fee form of private lending — a student signature loan — that covers costs that are school certified: tuition, books, supplies, room and board, and transportation.

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

FAQ

Is a signature student loan a good idea?

It depends on your unique situation, and whether you’ve explored all of the options for grants, scholarships, and federal loans. This article lists pros and cons of signature student loans.

Is it easy to get a signature student loan?

A signature student loan is a form of private funding, so the lender will likely check your credit scores and ability to pay back the loan. You may or may not need a cosigner.

When do you have to start paying a sig student loan back?

It depends on the private lender. Some have you start paying it back right away while others allow you to wait until you’ve finished school. Be clear about what you’re agreeing to, including when the loan must be paid back.

Photo credit: iStock/FatCamera

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.

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Jan

2023

How Much a Commercial Driver’s License (CDL) Costs and How to Pay for It

By Kelly Boyer Sagert | Life & Career, student_loan | Comments Off

If the lure of the open road intrigues you and the idea of spending years in classrooms doesn’t, then becoming a commercial driver may be ideal for you. Before hitting the highway, you’ll need to secure a commercial driver’s license (CDL), which could cost between $3,000 to $10,000 depending on state fees.

This post shares ten ways on how to pay for CDL school, hopefully ones that are just right for you.

Typical Cost of Obtaining a CDL

CDL school costs can vary in part because of the school chosen — which can be private or public — and there may be other costs than what the school charges: application fees, road test fees, CDL skills test fees, and so forth. In general, figure $3,000 to $10,000 and check with your state’s Department of Motor Vehicles (DMV) to see what fees your particular state charges.

The CDL school price will likely account for most of the costs with the DMV able to fill in gaps in information for you. Note that publicly attended CDL schools will likely be cheaper but with potentially longer wait times.

Do You Have to Go to a School to Obtain Your CDL?

If you’re starting after February 7, 2022, then the answer is “yes,” you’ll need to pass minimum training standards to get your CDL license at a registered school or a place that provides the appropriate training. The Entry Level Driver Training (ELDT) is not retroactive, according to the Federal Motor Carrier Safety Administration FMCSA but holds true for those obtaining their CDL license for the first time. The FMCSA has created an online registry for schools and other training providers to list themselves and state that they meet training requirements, both federal and state.

How to Pay for CDL School

Fortunately, plenty of options exist, similar to paying for beauty school and other types of vocational training. To help, we’ve listed ten ways to pay for your CDL school costs and associated expenses.

1. Workforce Training Funding

The Workforce Innovation and Opportunity Act (WIOA) became law on July 22, 2014, and is designed to help job seekers get the education, training, support, and employment they need.The WIOA requires states to ensure that their workforce development programs are strategically aligned to meet the needs of workers. The WIOA is managed through the U.S. Department of Labor (DOL) in collaboration with numerous partners to get the necessary resources to states and local areas.

Plus, the FMCSA CDL Program Implementation Grant provides financial resources to states.

2. State CDL Training Grants

Each of the states in the United States and the District of Columbia can apply to the federal CDL implementation grant to get funding for relevant programs that assist in their CDL program. Contact the field office of your state or your specific state (links are included in the field office chart) to get information about what’s currently available to cover your CDL school price. Explain that you need financial assistance to get quality CDL training.

3. Local CDL Training Grants

You may find it easier to start your search by contacting a community college, library, or governmental agency in your city or county. You may get directed to state-level or other resources; what’s important is to start your search on how to pay for CDL school.

4. Scholarships

You may be able to find scholarships and grants to cover CDL school costs. As an industry site notes, the past few years have highlighted the importance of commercial truck drivers in our supply chain for food, medicines, and so forth. This adds to the demand for quality truck drivers that already existed before the Covid-19 pandemic hit. The result: perhaps more grants and scholarships are available to pay for CDL school costs.

5. Funding for Veterans

If you’re a veteran, you can use your GI benefits to pay the CDL school price. However, there are tax consequences that you’ll likely want to explore before making this move.

Plus, in a 2022 announcement by the U.S. Department of Transportation (DOT) ), the agency announced an award of $3.1 million to community colleges and training institutes. Funds are to be used to help current and former military personnel to get their CDLs. You can find a list of places that received funding and an associated dollar amount here .

6. Federal Student Loans

To qualify for federal loan funding, you must first fill out a Free Application for Federal Student Aid (FAFSA®). If a CDL school meets requirements, federal student loan aid may be available. Going this route will also let you know if you qualify for a Pell Grant based on your income; again, make sure that the CDL school is eligible to receive federal funding.

7. Private Student Loans

If grants, scholarships, and federal student loans don’t cover the CDL school costs, then explore private student loans. These loans are offered by banks, credit unions, and online lenders to pay for educational expenses. You’ll fill out an application and what you’ll receive typically depends on your credit score and income. Here’s more about what to know about private student loans. You may also find valuable information in our resource about private student loans for undergrads.

8. Trucking Company Tuition Reimbursement

This is when a trucking carrier pays part to all of your CDL school costs. They may do this if, for example, you’re a current employee in another capacity. Or trucking companies may take this route to encourage someone to join their company.

9. Savings

You may discover that you have enough money in your savings account to pay the CDL. Or you may create or continue a savings plan to accrue enough funds to pay for your training. That way, there’s no loans to pay back.

10. Company Sponsored CDL Training

A company in need of drivers may be offering a training program. Just ensure that the program, which is run by the trucking company itself, instead of a training school, is quality. Typically, you’ll need to work for the company offering the training for a certain amount of time; this can be good if you’re looking for a job, eliminating the stress of the job hunt that may follow the completion of a CDL program.

The Takeaway

You may decide that becoming a commercial truck driver is a good way to earn income. If so, you’re probably wondering how to pay for CDL school — and this post shares ten potential ways. If you decide that private student loans are a useful part of the mixture, here’s more information about applying for student loans online.

Community college and other certificate programs aren’t eligible for SoFi’s private student loans. If you’re heading back to school after getting your CDL and are interested in private student loans, consider SoFi’s no fee private student loans. These loans can be used to cover your costs of tuition, books, supplies, and more so you can get on the road as a fully licensed commercial truck driver.

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

FAQ

Can you get your CDL without going to school?

As of February 7, 2022, new trainees in a CDL program must attend classes to meet minimum requirements. This post focuses on finding ways to help you pay for CDL school.

Do some trucking companies pay for your CDL training?

Yes, some are willing to help! Reach out to trucking carriers for specifics.

How much does getting your CDL cost?

In general, it costs anywhere between $3,000 and $10,000 to get your CDL. Check your school of interest to make sure it’s a quality program and ask what it costs. Also check with your state’s DMV to see what other fees may be involved.

Photo credit: iStock/FG Trade

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.

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.

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Jan

2023

What Is the Better Business Bureau? (BBB)

By Rebecca Lake | money | Comments Off

The Better Business Bureau (BBB) is a private, nonprofit organization that’s focused on advancing marketplace trust. The BBB offers accreditation to businesses along with a ratings system, which consumers can use to determine how likely a business is to respond to complaints.

Many people use the BBB to check on a business’ trustworthiness or to register issues. Though you might not give much thought to how the Better Business Bureau works behind the scenes, it can play a role in influencing which companies consumers choose to do business with.

Read on to learn:

• What is the Better Business Bureau?

• How does the BBB work?

• What does it mean if a company has a poor score with the BBB?

What Is the Better Business Bureau?

So what is the BBB and when did it start? The Better Business Bureau is a private, nonprofit organization that was founded in 1912 and is not affiliated with any government agency. The primary mission of the BBB is to help consumers identify trustworthy, reliable businesses. As of 2021, the BBB maintained profiles for approximately 6.3 million businesses and more than 25,000 charitable organizations.

The Better Business Bureau is generally considered to be a trusted source for information about registered businesses and charities. According to the BBB website, consumers visited BBB profiles more than 200 million times in 2021 to get information about companies and charities. Given this depth of information and its popularity, the Better Business Bureau may be a valuable resource to use now and in the future.

Today, the BBB brand is represented by multiple entities, including the International Association of Better Business Bureaus and the BBB Wise Giving Alliance. The former represents local BBBs that operate in the United States, Mexico, and Canada. The latter focuses on helping donors make informed decisions when giving to charity.

Recommended: 10 Tips for Spending Your Money Wisely

How Does the Better Business Bureau Work?

The Better Business Bureau works to help educate consumers about businesses and charitable organizations. The BBB accomplishes that goal by:

• Maintaining profiles for accredited and non-accredited businesses

• Publishing ratings for individual businesses and charities

• Offering accreditation for businesses

If you want to learn more about a company or business, you can search for it on the BBB website. You can then read the company or business’s profile to learn how the BBB rates it and what other consumers are saying about it.

The BBB ratings range from A+ to F, which represent the highest and lowest ratings respectively. Ratings are determined using information the Better Business Bureau is able to collect directly from businesses and indirectly from public data services.

BBB ratings are based on these factors:

• Type of business

• Time in business

• Business’s complaint history with the BBB

• How transparent the business’s practices are

• Failure to honor BBB commitments

• Licensing and government actions known to the BBB

• Advertising issues known to the BBB

If there’s insufficient information available about a business, then the BBB won’t rate it. The BBB also states that ratings aren’t a guarantee of how reliable a business is. In other words, even if a company has an A+ rating, that doesn’t mean you won’t have any issues.

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Open a SoFi Checking and Savings Account with direct deposit and get up to a $300 cash bonus. Plus, get up to 4.60% APY on your cash!

What Does It Mean If a Company Is Accredited?

What is BBB accreditation? In simple terms, it means that a business meets Better Business Bureau standards for trust and reliability. In order for a business to become BBB-accredited, they must agree to:

• Build trust by having a positive track record in the marketplace

• Advertise honestly and tell the truth in interactions with consumers

• Be transparent in sharing information with the BBB

• Honor promises or commitments made to the BBB

• Be responsive in addressing consumer complaints or disputes submitted through the BBB

• Safeguard consumer privacy

• Act with integrity at all times

Businesses do not have to become BBB-accredited, but choosing to do so may help to build trust with consumers. There is a fee for BBB accreditation, which varies based on the size of the business.

Quick Money Tip: If you’re saving for a short-term goal — whether it’s a vacation, a wedding, or the down payment on a house — consider opening a high-yield savings account. The higher APY that you’ll earn will help your money grow faster, but the funds stay liquid, so they are easy to access when you reach your goal.

What Happens If a Company Has a Poor BBB Grade?

A poor Better Business Rating can indicate that a company or business has a history of negative consumer complaints and that those complaints may not have been resolved favorably. When you search for a company’s profile, you’re able to read any complaints filed and see what consumers are saying. You can also see if the business has responded to those complaints and how they were resolved.

The BBB also collects information on any regulatory violations the business has been involved in. If someone in a business has been convicted of a criminal offense in connection with business operations, that may be listed with the BBB as well. Generally, however, the BBB does not publish information about any private lawsuits a company may be involved in.

Recommended: What Is Commercial Banking?

Does the BBB Collect Information About Banks?

The Better Business Bureau does collect information about banks, which can be helpful if you’re interested in opening a new bank account. For example, you might use BBB ratings to compare small banks vs. large banks or traditional banks against online banks.

In terms of how financial institutions are governed, the BBB does not play a role. Instead, that’s left to the Office of the Comptroller of the Currency (OCC), a federal government entity that’s an independent bureau of the Department of the Treasury.

The OCC oversees and regulates chartered banks across the country. The BBB cannot step in and mediate any issues.

If you’re interested in taking a closer look at complaints involving banks, you can also check the Consumer Financial Protection Bureau (CFPB) consumer complaint database .

The Takeaway

The Better Business Bureau can be a great place to look for information when you want to learn more about how a business operates. While the BBB never recommends or endorses any business or charity, you might use reviews as a starting point for deciding which companies you want to do business with or donate to.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall. Enjoy up to 4.60% APY on SoFi Checking and Savings.

FAQ

Can I use the BBB to find a bank?

The BBB publishes profiles for retail, commercial, and investment banks, so you could use it to find a new place to keep your money. Remember, though; the BBB doesn’t guarantee how a bank will operate, though it does reflect its record of trustworthiness and transparency.

Do I need a business or checking account?

The difference between a business vs. checking account is fairly simple. Business accounts are designed to hold funds for business purposes, while personal checking accounts are for personal use. The type of account you need can depend on whether you run a business or not. If you do, it may be helpful to have one of each in order to keep your finances separate.

Can I use the BBB to find a financial advisor?

You could use BBB ratings as a guide when comparing financial advisors, though again, the BBB does not guarantee the quality of services you’ll receive from any business. Also, when thinking about hiring a financial professional, it’s important to consider what you need and how much you’re willing to pay for those services.

Photo credit: iStock/MicroStockHub

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.

SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a deposit to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government 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, do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.

SoFi members with Qualifying Deposits can earn 4.60% 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 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 4.60% 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 10/24/2023. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

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

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