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May

2022

10 Tips on How to Pay for Nursing School

Ways to Pay for Nursing School

By Melissa Brock | Going to College, Student Loans, student_loan | Comments Off

Nurses are in demand. From 2020-2030, the Bureau of Labor Statistics (BLS) predicts an average of 194,500 openings for registered nurses. Many of those openings come about due to nurses who switch occupations or exit the labor force, including those who retire.

Because nurses are in demand, you may want to attend nursing school. Let’s walk through 10 ways to help you figure out how to pay for nursing school.

1. Start With FAFSA

The Free Application For Student Aid (FAFSA®) is a federal form that students can fill out every year that gives you access to federal and institutional aid to pay for college. Your college or educational institution will use the FAFSA to determine your eligibility for federal grants, work-study, and federal loans to attend college or career school. There is no cost associated with the FAFSA.

You can file the FAFSA starting on October 1 for the subsequent academic year that you plan to attend college. For example, if you plan to attend nursing school in the fall of 2024, you can file the FAFSA starting on October 1 in the fall of 2023.

You’ll need a FSA ID, a username and password that confirms your identity when you’re looking at or signing official financial aid documents. You’ll need two separate FSA IDs — one for you and one for your parents, if you’re a dependent student.

You can list up to 10 colleges and universities on the FAFSA using the Federal School Code search to identify each of the schools where you’d like it sent.

The FAFSA’s data retrieval tool (IRS DRT) takes most of the work out of filing the FAFSA. It pulls information directly from the IRS. After you follow the FAFSA directions, you sign with your FSA ID.

2. Nursing School Scholarships

Some colleges may offer scholarships specific to nursing students. You can also look beyond your nursing major. Do you have talents in art, music, or leadership that could qualify you for a merit-based scholarship? (Merit-based scholarships are those that are not based on financial need.) Ask the financial aid office at the school you plan to attend for more information about merit-based scholarships.

You can also take to the web to look for more scholarships. Here are a few examples:

• The Healthline Stronger Scholarship awards four $5,000 scholarships to students who, based on their education, extracurricular activities, and career goals, are focused on both health and climate change.

• The National Black Nurses Association, Inc (NBNA) offers several scholarships each year ranging from $1,000 to $15,000. To apply, you must be a member of the NBNA, currently enrolled in a nursing program and in good scholastic standing at the time of application with at least one full year of school remaining.

• The FNSNA Undergraduate Scholarship awards scholarship funds based on a set of criteria established by the sponsor of the scholarship, which often outline a specific area of specialization within the nursing profession. Successful candidates can earn up to $10,000 per academic year.

In addition to looking into what your college or university can offer and searching online, take a look at local connections for specific educational or vocational programs in a particular field, such as nursing scholarships through local hospitals and privately owned doctor’s offices.

You can also look into community groups like 4-H, Kiwanis Club, and other organizations for available scholarships. Many foundations, such as the Bill and Melinda Gates Foundation, also offer scholarships.

3. Grants for Nursing School

Grants are primarily need-based awards, though some grants are awarded based on merit. Like scholarships, grants do not need to be repaid once you complete your program. Filling the FAFSA will give you access to grants through programs like the Federal Pell Grant. The FAFSA automatically considers your eligibility for federal grants based on need.

You may also become eligible for state grants based on the grants available to you in your state.

4. Federal Student Loans

Unlike scholarships and grants, you must pay back college loans. As a nursing student, you may tap into several types of federal student loans or private loans — both graduate or undergraduate loans.

Federal student loans are given to nursing students through the Department of Education, which, as mentioned, means that you must file the FAFSA in order to receive them.

Federal student loans offer flexibility in that you do not need to undergo a credit check, with the exception of the Direct PLUS Loan, which does require a credit check. Federal student loans also offer low-interest rates, various repayment plans, and forgiveness options. You could also use federal student loans to cover living expenses. For example, if you need to pay rent for an apartment while you’re attending nursing school, a federal student loan can help cover those expenses.

Types of Federal Loans

There are three main types of federal student loans: Direct Subsidized Loans, Direct Unsubsidized Loans and Direct PLUS Loans.

Direct Subsidized Loans

Direct Subsidized Loans are low, fixed-rate federal loans for eligible undergraduate students to help cover the costs of college or career school. The government pays the interest while you are in school or during qualifying periods of deferment. Subsidized loans are awarded based on financial need.

Direct Unsubsidized Loans

Direct Unsubsidized Loans have a low, fixed interest rate and flexible repayment terms. Undergraduate, graduate and professional students can qualify for these loans. In contrast to the Direct Subsidized Loan, the government does not pay the interest while you’re in school. Students do not need to demonstrate financial need in order to qualify for an unsubsidized loan.

Direct PLUS Loans

Direct PLUS Loans are another option available to graduate or professional students, and parents of undergraduate students. Unlike other federal loans, PLUS loans do require a credit check. Borrowers are able to borrow up to the full cost of attendance.

Student Loan Forgiveness for Nurses

Student loan forgiveness for nurses means you don’t have to pay for your federal student loans in full. The federal government runs a few loan forgiveness programs that generally offer loan forgiveness after borrowers have fulfilled certain requirements. For example, the Nurse Corps Loan Repayment Program pays up to 85% of unpaid nursing education debt for registered nurses (RNs), nurse practitioners, and nurse faculty members. You must qualify by working in a critical shortage facility or an eligible nursing school as a nurse faculty member.

Student Loan Payment Deferrals

Federal student loans do not have to be repaid until October 1, 2022, at the earliest. In March 2020, Congress passed a bill that automatically suspended student loan payments and waived interest. The benefit was originally set to expire but has been reinstituted several times.

Current nursing students who will graduate soon will not have to make student loan payments. Depending on what the federal government does next, they may also experience another extension.

5. Private Student Loans

Private student loans come from a local bank, credit union, or another type of private student loan lender, not the federal government. Like a federal student loan, you can use private student loans to cover living expenses, tuition, and other related school costs.

Lenders evaluate an applicant’s credit history, among other factors. Students who do not have a strong credit history or score may need to add a cosigner in order to qualify or potentially qualify for a lower interest rate. If you can’t pay back the loan, your co-signer is on the hook for paying back the loan.

Private Student Loans vs Federal Student Loans

As you likely know, there are some differences between private and federal student loans, which leads many financial experts to suggest taking out federal student loans over private student loans. Here are some features of private student loans that make them less advantageous over federal student loans:

• May need a cosigner: Private student loans often require you to have a cosigner. However, if you make a certain number of on-time payments, you can apply to have your cosigner removed from the loan.

• No federal protections: You can’t tap into income-driven repayment programs, loan forgiveness and deferment protections with private student loans like you can with federal student loans.

Due to these differences, private student loans are typically considered an option only after all other funding sources have been depleted.

6. Tuition Reimbursement Programs

Through a tuition reimbursement program, a company covers some or all of the costs of an employee’s education as long as you follow the company’s tuition reimbursement requirements. This is a major benefit because you can work at another company, possibly through a part-time job. For example, the following companies offer tuition reimbursement: Target , Starbucks , and UPS .

7. Hospitals/Employers That Pay for Nursing School

Another option may be to work at a hospital or other health care employer through a tuition reimbursement program. For example, you could get a job in the billing office of the hospital and go to nursing school during your off hours, or you may be able to work with your employer to put together the best schedule for both of your needs.

Hospitals and health care employers want to retain good workers, particularly in nursing, which has such a shortage of employees.

Learn more about the health care employer’s requirements for tuition reimbursement, including the amount they will reimburse. Note that it may not equal 100% — it might be 75% or 50% instead.

8. Getting a Nursing Degree Abroad

Completing a nursing degree abroad can take about two to three years. However, you can find short-term study abroad programs (a fall semester, summer, or a few weeks between terms) in many different countries.

You can often find free programs, scholarships or grants that will help cover the cost of your study abroad program — some countries offer various options for students. Consider looking into countries that have reputable health care programs, such as Denmark, Germany, Norway, Switzerland, or Sweden.

9. Military Service

You may have a large range of education benefits if you complete military service. For example, you can access the Post-9/11 GI Bill if you served at least 90 days on active duty (either all at once or with breaks in service) on or after September 11, 2001, or received a Purple Heart on or after September 11, 2001 and were honorably discharged (after any amount of time), or served for at least 30 continuous days (all at once, without a break in service) on or after September 11, 2001, and were honorably discharged with a service-connected disability, or are a dependent child using benefits transferred by a qualifying veteran or service member.

Follow the rules regarding military service requirements, depending on your branch of the military. The college and university you plan to attend will have more information about your education benefits and so will your military branch.

10. Nurse Corps Program

The Nurse Corps Program is a scholarship available to eligible nursing students. In exchange for the scholarships, recipients work in critical shortage areas after graduating with their nursing credentials.

Deciding Which Route to Pursue

When you need help paying for nursing school, which option makes sense for you? Your preferences might offer you the most insight into the best option to pay for school. For example, it might make sense to avoid the military programs offered because you have no interest in joining the military. You may also not have the resources to study overseas or have a family who depends on you for financial support. Your goal may also be to learn how to pay for nursing school without loans.

Whatever your goals, one thing you can do is to meet with the financial aid office of the school you plan to attend. A financial aid professional can lay out all your options and help you choose the right option for you.

Private Student Loans From SoFi

When you’re readying yourself for nursing school, it’s good to have options. SoFi offers low fixed rates and variable interest rates to help you access the right private student loans for you and your future needs.

Our private educational loans are designed to make paying for undergraduate or graduate education easier. These loans for students can cover up to 100% of school-certified costs, which includes tuition and food, books, supplies, room and board, and other education expenses.

Learn more about your private student loan options with SoFi and through our private student loans guide.

FAQ

Can FAFSA be used for nursing school financial aid?

Yes, you can use the FAFSA in order to qualify for financial aid for nursing school. The amount of financial aid you receive depends on your level of need, year in school, dependency status, and other factors. For example, you can access Direct Subsidized and Unsubsidized Loans between $5,500 to $12,500 per year in undergraduate. In graduate or professional school, you can borrow up to $20,500 each year in Direct Unsubsidized Loans.

Can an employer pay for you to attend nursing school?

Yes, an employer may pay for you to attend nursing school. Your current employer may help you pay for nursing school. Talk to the human resources office to learn more about tuition assistance, the amount you can receive for attendance, and the details about your employer’s tuition reimbursement regulations.

If you aren’t currently aware of jobs that pay for nursing school, you may want to contact the college or university you plan to attend and learn more about your employment options, including work-study opportunities.

Can you use private student loans for nursing school?

You can access private student loans to pay for nursing school. SoFi can offer private loans that cover nursing school and even living expenses. Learn more about your private student loan options with SoFi.

Photo credit: iStock/FatCamera

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May

2022

What Is a Central Bank Digital Currency (CBDC)?

By Inyoung Hwang | Growing Wealth, invest, Investing, Terminology | Comments Off

A central bank digital currency (CBDC) is virtual money issued as legal tender by the central bank of a country. No major bank has issued a CBDC yet. However, it would be similar to blockchain-based cryptocurrencies like Bitcoin that have increased in popularity, only backed in a sovereign nation’s fiat currency: paper and coin currencies like the U.S. dollar and British pound. In other words, a CBDC would be a government-issued virtual store of value.

Fertile Ground For CBDCs

The year 2021 posted strong growth in digital assets in general and stablecoins in particular. According to the Bank of International Settlements’ (BIS) May 2022 publication — Gaining momentum: Results of the 2021 BIS survey on central bank digital currencies — crypto’s market capitalization grew by 3.5 times, swelling to $2.6 trillion in market cap. The BIS survey also found that, in 2021, nine out of ten central banks were exploring the pros and cons of digital currencies. And that approximately two-thirds of the world’s population could see their country issue a CBDC in the next three years. Further, BIS reported that developing economies are more apt than major economies to issue digital money.

Could CBDCs and Stablecoins Hurt Fiat?

The push toward digital currencies comes amid the greater possibility that private virtual currencies like Bitcoin could see even wider adoption in the near term. Some central banks and regulators view this possibility as threatening. They’re concerned that, if and when crypto gains traction as a common form of payment, it might erode the stability of legacy financial services. How could this happen?

If, for example, a director of a crypto project does not understand cryptocurrencies well enough to manage them — along with the high risk profile that most cryptocurrencies carry — then a financial disaster could ensue. Moreover, for an individual to be a leader in the crypto sector, it might behoove them to be a master strategist on the trading floor, too. The ability to execute complex trading strategies quickly and wisely can be critical for navigating the crypto market.

In 2020 and 2021, the Covid-19 pandemic further expedited a shift away from physical cash and coins. But that had been happening well before the pandemic with the advent of payment platforms like PayPal and Venmo. If the pace of adopting digital currencies continues, then that alone could pose a potential threat to fiat currency.

How Could CBDCs Work?

The details of exactly how CBDCs would function remain unclear. However, some outcomes of using CBDCs are already apparent.

As mode of Payment/ Store of Value/ Easier Digital Pay

As with physical cash, CBDCs could be stored or used for payment. They will also likely carry a unique serial number, similar to how paper notes and coins in a fiat-currency system do. Many CBDCs won’t be designed to replace cash anytime soon; instead, they’ll be used to complement physical money.

Could Expedite New Central Bank Monetary Policy

Currently, central banks already issue a form of digital money but only to other banks, which then lend that money to consumers and businesses. When people currently make payments or move money between multiple bank accounts, it usually goes through a patchwork of systems, often incurring fees for the parties involved and taking a couple of days for transfers to be completed.

Possible Democratizing Effect on Central Bank Money

Central bank digital currencies could potentially cut out the middlemen, lowering or eliminating fees and making transfers faster. For instance, a Bitcoin transaction typically takes less than 10 minutes. Instead of purchasing their CBDCs from an exchange, for example, consumers could hold accounts directly with the central bank, which would make these transactions faster. Having the option to purchase CBDCs also could democratize central-bank money by making it more accessible to all.

Potential to Minimize Role of US Commercial Banks

That means CBDCs could become a tool for monetary policy, giving central banks more control over currency supply and allowing them to better track the movement of money within the economy. Central banks also could possibly bypass financial markets and change interest rates directly on consumer accounts.

Exploring the Risks of CBDCs

Of course, CBDCs would be a disappointment to those who buy cryptocurrencies with the hope that a private decentralized form of digital cash, like Bitcoin, Ethereum or Litecoin, will one day displace traditional fiat. Some argue that CBDCs would mean an expansion of governmental oversight; that the anonymity that the most private cryptocurrencies (in particular) offer will continue to fuel their appeal.

Potential to Destabilize Existing Financial System

The emergence of CBDCs could also be a destabilizing force for the existing financial system. If consumers can hold direct accounts with a central bank, commercial banks could become drained of retail deposits. One potential solution to this problem has been to put a cap on how much you can hold in CBDCs, or not have central banks pay interest on retail deposits.

Possible War Against the Dollar

Another potential repercussion could be the start of a new kind of currency war. The U.S. dollar has been the world’s reserve currency since the 1920s. The rise of multiple sovereign digital currencies could challenge the current dollar-dominant system, making it less important for international trade and foreign-exchange transactions to be pegged to the dollar.

Central Bank Digital Currencies Worldwide

A CBDC-based financial system likely would pose unique advantages and challenges for each country that issues a digital currency.

But despite the challenges, most of the world has rushed to adopt central bank digital currencies. In its most recent survey, the BIS reported that the majority of the 81 record countries that responded to its 2021 survey either had developed a CBDC, are in some stage of piloting a central bank digital coin; and more than two-thirds of these countries likely would issue a CBDC in the near term. These countries cited the Covid-19 pandemic and escalating use of cryptocurrencies as among their reasons for embracing a CBDC.

Not every country has issued central bank digital currencies, including the United States. However, the U.S. does have numerous stablecoins that are pegged one-to-one to the U.S. dollar.

Why Has the US Not Issued a CBDC?

It will, if it needs one. Some in the United States have embraced the cryptocurrency sector and are trying to integrate it into its existing financial system. One key step in that direction would be for the U.S. to step up regulations for crypto to make it safer for investors and for cryptocurrency platforms to operate.

How About a US e-Dollar? Or, a Fedcoin?

At this time, the U.S. is actively researching the viability of incorporating a CBCD into its financial structure. But its approach is thorough and methodical. Along with being supportive of digital currencies in general, the U.S. is trying to ascertain its own need for a digital dollar. The U.S. Federal Reserve System (the Fed) — which is the central bank of the U.S. — has said it’s looking into different options involving digital currencies.

Key issues that the Fed needs to understand include protection from cyberattacks, counterfeiting and fraud; how a CBDC would affect monetary policy and financial stability; and how it could prevent illicit activity.

Fed Urges Prudence Amid Tenuous Financial Stability

In May 2022, the Fed released its annual Financial Stability Report . The Fed’s last such report was in November 2021, and since that time the United States’ economic uncertainty has risen. A number of factors are responsible for this unease, including the Russian invasion of Ukraine, human and economic hardship, the pandemic’s improving though unclear trajectory, and persistent higher levels of inflation.

The Fed specifically cited concerns about stablecoins in the 2022 report. U.S. traders are using stablecoins a tool in leveraged transactions of other cryptocurrencies, which according to the Fed “may amplify volatility in demand for stablecoins and heighten redemption risks.” Therefore, the Fed is not ready to turn to central bank digital currencies, and had has continued to focus on regulating stablecoins. Also at issue is whether a country really needs both types of digital assets — stablecoins and CBDCs.

Snapshots of Other Countries’ CBDCs

In the rest of the world, adoption of central bank digital currencies seems to be thriving. The Atlantic Council is a nonprofit, which in 2021 launched its database, CBDC Tracker , which first only the Fed, now everyone can use to get the latest news about digital currencies globally.

As of May 2022, nine countries have issued CBDCs, and approximately 100 countries are at some stage of exploring them, be it researching, developing, testing, or launching. (Note: We chose the countries below randomly and cited them in alphabetical order.)

The Bahamas

In October 2020, the Central Bank of the Bahamas issued the world’s first CBDC, called the Sand Dollar. The Bahamas was the first country to issue a central bank digital currency that covered an entire country.

China

China first began exploring a digital yuan in 2014. In 2022, China launched a pilot of its current CBDC, called e-CNY, during the Beijing Winter Olympic Games. China’s approach is to run tests of e-CNY in smaller sections of the country before initiating it for the entire country. China’s program is designed to replace cash in circulation, not money held in long-term bank accounts.

But e-CNY won’t use blockchain technology for the central database. Instead, both commercial bank distributors and the central bank will keep their own databases that track the flows of digital yuan from user to user.

India

India’s government, Nirmala Sitharaman announced that India will introduce a digital rupee during its fiscal year 2022–2023, beginning April 1, 2022. The Reserve Bank of India will back this CBDC, which is now in development.

According to the Sitharaman, the CBDC would strengthen India’s economy, increase efficiency and lower expenses for the country’s currency-management system, and provide a stable, regulated digital currency that would compete with private cryptocurrencies.

Sweden

Sweden is another country at the forefront of moving toward digital currency. Unlike in China however, distributed ledger technology or blockchain was always the inspiration for the country’s electronic krona (e-krona), so it will be the e-krona’s foundation. Sweden’s central bank, Riksbank, is focused on securing new solutions that are scalable, and which would offer the same level of convenience and security that banks offer today.

The BIS estimated in 2018 that Sweden is the world’s most cashless society — and that was before the global pandemic. While many countries have witnessed a downturn in cash use, Sweden’s cash usage in the last decade has been more striking than most.

Even more remarkable is the year-over-year percentage change in Sweden’s cash usage during the Covid-19 pandemic. In 2020, according to Riksbank, cash comprised 40% of the country’s point-of-sale payments; in 2021, that amount dropped to less than 10% — affirming BIS’ estimation.

The Takeaway

As of May 2022, nine countries have issued central bank digital currencies, and approximately 100 more countries are researching and exploring CBDCs.

Proponents of the CBDC argue that blockchain-based fiat currency could solve inefficiencies in the existing central bank infrastructure. Those more cautious warn that CBDCs could be vulnerable to hacks or outages. Meanwhile, enthusiasts of decentralized finance (DeFi) argue for a financial system that moves away from centralized authority, rather than one that expands its influence.

It’s yet to be seen whether CBDCs will usher in a new era of stable digital currency usage. So far, cryptocurrencies have been popular for trading in markets, rather than as a mode of payment.

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May

2022

Student’s Guide to Certificate Programs

By Krystal Ndoni | Going to College, Student Loans, student_loan | Comments Off

College is not a fit for everyone. But there are options.

Certificate programs are a way to get the skills and expertise you need without a college diploma. They’re also for professionals looking to advance their skills and knowledge in their field or switch careers. They are offered online and in person–typically through higher education institutions or professional associations.

What Is a Certificate Program?

Certificate programs are courses or vocational training provided by colleges or professional associations that last less than two years. The two most common certificate types are undergraduate and graduate.

Undergraduate certificate programs prepare you for immediate placement in trade, technical, and vocational careers. Trade schools prepare you for jobs such as welders, electricians, and cosmetologists. Vocational schools focus on in-demand jobs that can be trained in two or fewer years, such as working as a paralegal or a dental hygienist.

Technical schools teach skills for one trade and typically involve an apprenticeship. Programs include HVAC, auto repair, and some nursing certifications.

“Certifications” are the outcome of certain certificate programs to prove successful mastery of the program. Exams are officiated by state or authorized organizations and formal licenses, diplomas, and certificates are awarded on completion. Certified Public Accountant (CPA) and Project Management Professional (PMP) certifications are a couple of examples.

Graduate certificates are career training programs for bachelor’s degree holders to expand a student’s expertise without earning a degree. For instance, a marketing professional can enroll in a social media marketing course, a niche area of marketing, to broaden their skillset. Some pursue graduate certificate programs in order to advance their careers, like in promotions, for instance.

Certificate Programs vs College Degrees

Certificate programs and college degrees differ in curriculum, program length, cost, and program outcome.

Colleges require a general education curriculum besides vocational curriculum. In contrast, certificates teach only the skills for a trade or subject. No academic courses, such as humanities, are included in the training.

Certificate programs are shorter. College degrees are a minimum of two to four years for full time students. Certifications can sometimes be four weeks, but are three to four months on average for one-off courses. Training programs for certifications are usually one to two years.

A college education has a substantial price tag. The average college tuition in 2022 costs $35,331 per student per year, according to the Education Data Initiative, compared to a certificate programs that can range in price from $1,000 to $5,000 (though some may be more expensive). Certificate programs may have a few credits per program, in contrast to a bachelor’s program which may vary from 120 to 130 credits or more.

Finally, program outcomes differ. Certificates train students for a specific skill and immediate placement in careers with those skills. College programs provide an extensive and expansive education that can provide opportunities in multiple disciplines within a field. For instance, someone who earns a bachelor’s in economics can enter finance analytics, business consulting, and various disciplines in financial-related fields.

How Long Are Certificate Programs?

Certificate programs can range from a few weeks to two years. San Diego University’s paralegal program can take four to eight months to complete in-person, for example. A cosmetology program at Fullerton College in California requires 1600 hours at a student’s own pace — so the program length depends on you and the field you are planning on studying.

Types of Certificate Programs

The two most common types of certification programs are undergrad and graduate. They follow compulsory education, and outside of a degree, provide education needed for specific fields such as business, administration, and healthcare.

Undergrad

Undergrad programs build technical skills and subject mastery via career training programs or one-off courses. Enrollees usually must have a high school diploma for certain courses. They can often be completed in one academic year or less.

Some programs, such as cosmetology, award a license at the end of the program. Ensure your program is formally accredited by the state or professional organization and will prepare you for required license exams.

Graduate

Graduate courses enhance a college degree. Students test and earn a certificate to satisfy course completion without earning a degree. Some courses require prior knowledge of a topic. For example, students employed in computer engineering can earn a certificate in a new computer language.

They are offered by universities and colleges and programs are credit-based. Some programs’ credits can be transferred to other colleges.

Online Certificate Programs

Certificate programs online offer multiple advantages.

They’re convenient. A student has the world’s universities at their fingertips. The online universe is a library of extensive certificate programs, and prestigious courses are accessible to everyday learners. For example, eCornell has a large library of graduate courses. Also, MOOCs (massive open online courses) offer free and paid programs from universities, non profits, and for-profit companies. For example, Microsoft and IBM offer Excel courses on Coursera, a MOOC, for working professionals.

Online courses also offer flexibility. Asynchronous courses, those that don’t have a specific meeting time, allow students to take a course at their own pace. You can access pre-recorded content anytime and follow class discussion on comment boards. On the other hand, synchronous online programs are a little more restricted to a schedule. They work like in-person courses where students attend live online lectures and engage in online class activities.

Finally, online courses are usually inexpensive. Cutting the commute, certain campus fees, and meals, can result in cheaper overall prices than in-person learning.

Not all certificate programs offer online learning, however. Hands-on vocations such as landscaping, plumbing, or electrical engineering often require apprenticeships to demonstrate material understanding and to meet minimum requirements.

Is a Certificate Program Right for You?

Certificate programs might be a good fit for someone who wants to try a trade career. They are an affordable way to test out vocations without incurring student debt. And, college credits from some courses can be put towards a formal college degree, if you decide to pursue a bachelor’s.

If you want to learn a new skill for work, graduate certificate courses are one alternative to a masters or professional degree. For instance, some companies will pay employees to get a Project Manager Professional (PMP) certificate to better skill their employees and improve workforce productivity.

Programs are a great way to kick-start a career change. Some popular certificate programs for career changes include business analysis, law, human resources, and accounting. They are offered by professional organizations such as the American Institute of Certified Public Accountants for accounting.

Program Type	Certificate Programs	Certification Programs	College Degrees
What do you gain?	Add skills with specific courses for your current job	Fast-track into trade careers or career advancement	Gain career opportunities not limited to trade vocations
How long do you study?	Programs last a few weeks to a few months	Programs last a few months and up to two years	Programs for full time students last two to four years
How many credits are programs?	15-30 credits, though requirements may vary	4-30 credits, requirements may vary	60 for associates, 120-130 for bachelor’s, and 30-60 credits for graduate programs
This program is good for…	Kick-starting a career change; adding skills to your existing job	Starting a new career (usually in trade vocations); advancing careers into management	Starting a new career or changing a career

Benefits

Certificates can propel students directly into the workforce with on-demand skills. According to a Georgetown University study, “about 94% of certificates…are awarded in career-oriented fields.”

Future success in earnings depends on the trade field you choose. For instance, the median earnings for a dental hygienist was 77,090 per year in 2020 according to the Bureau of Labor Statistics (BLS). In comparison, the median wage for cosmetologists was $27,380 in 2020 according to the BLS.

Certificates can also complement a college degree or help a professional acquire skills to advance upward within a field. A marketing professional can expand his or her skillset with an InDesign certificate — often a skill needed for content marketers. And it pays to learn. A total of 87% of Coursera students reported promotions, raises, and career changes.

Certificate programs also can save time and money. Programs are fewer credits and are shorter in length, so cost substantially less than a degree.

Drawbacks

Certificates alone can increase income value modestly — and the gains can be diminished in a rapidly evolving workplace. Some studies even show negative returns for certificate holders without a college degree, according to the non-profit New America.

One BLS report shows bachelor’s degree holders earn median weekly earnings of $1,248, while “some college, no degree” earners make $833 per week on average.

Furthermore, more vocations require a college degree. According to BLS, a bachelor’s degree is required for 169 occupations while an associate’s degree or a postsecondary nondegree award is required for only 100 occupations.

While certificate programs equip you with skills to land an entry level job after a short time, it may not pay off in the long run.

What to Look For in a Certificate Program

Evaluate programs by accreditation. Quality courses are accredited by the U.S. Department of Education or the Council for Higher Education Accreditation. They might also be verified by certifying bodies within that industry, such as HRCI for Professional Human Resources certification.

Determine flexibility. Some learners might benefit more from in-person courses — while an online course can give busy learners an opportunity to gain valuable expertise and skills. Furthermore, an asynchronous program can provide further flexibility for students who have unpredictable schedules.

Look out for for-profit institutions. For-profits are often synonymous with poor training for exorbitant costs. In short, it can be a scam. The College Scorecard is a government tool that can tell you whether your school is for-profit. On your school’s page, you will see its designation such as “Private For Profit.”

What Certificate Programs Are in Demand in 2022?

There’s no shortage of demand for certificate programs. The National Center for Education Statistics, says the number of certificates awarded increased by 22% 2018–19 compared to 2009–10.

According to the BLS’s latest Occupational Outlook Handbook — hairdressers, hair stylists, and cosmetologists; medical assistants, and audio and video technicians each have a projection of 50,000 or more new openings deemed faster than the average — of which programs will be available.

For graduate programs, Coursera’s top 10 courses include UX Design, project management, Python Programming, and English as a Second Language. MOOC edX, founded by Harvard and MIT, top 12 courses include Intro to Computer Science, Data Science, and Basic Spanish.

High Paying Certificate Programs

The highest paying programs are in IT. Earners can make six figures or more with a Certified in Risk and Information Systems Control (CRISC) certificate, for example.

How to Pay for Certificate Programs

When deciding how to pay for certificate programs, it’s important to explore all your options. Some options might include savings, student loans, or other forms of financial aid. Some universities offer financial aid assistance for certification programs. St. Johns University in New York offers aid if students fill out a FAFSA® and apply.

Employers offer tuition assistance. Companies can offer up to $5,250 towards employee’s tuition. Some companies provide even more to employees. Verizon offers up to $8,000 per employee, for example.

You can request a payment plan. eCornell offers a monthly “Pay as You Go” plan for students unable to pay in full.

And it doesn’t hurt to ask for available discounts. Military active and veteran members may be eligible for discounts.

Finally, certificate programs that cost $10,000 or more can be covered by a private student loan.

The Takeaway

Certificate programs can start, enhance, or change careers for learners. Undergraduate programs prepare students for immediate placement in a specific trade without a college degree. Both undergraduate and graduate programs enhance careers or offer training to change careers without earning a college degree.

Certificate programs are less expensive and shorter in duration than college degrees. College financial aid and employers can pay for certificate programs to gain valuable employees — but sometimes the bill can run up to $10,000 out of pocket.

SoFi can help cover the difference with a private student loan, that offers competitive interest rates for qualifying borrowers, flexible repayment plans, and no hidden fees.

Find out what rate you qualify for in just a few minutes.

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May

2022

Target Date Funds: What Are They and How to Choose One

By AJ Smith | invest, Investing, Preparing for Retirement | No Comments

A target date fund is a type of mutual fund designed to be an all-inclusive portfolio for long-term goals like retirement. While target date funds could be used for shorter-term purposes, the specified date of each fund — e.g. 2040, 2050, 2065, etc. — is typically years in the future, and indicates the approximate point at which the investor would begin withdrawing funds for their retirement needs (or another goal, like saving for college).

Unlike a regular mutual fund, which might include a relatively static mix of stocks and bonds, the underlying portfolio of a target date fund shifts its allocation over time, following what is known as a glide path. The glide path is basically a formula or algorithm that adjusts the fund’s asset allocation to become more conservative as the target date approaches, thus protecting investors’ money from potential volatility as they age.

If you’re wondering whether a target date fund might be the right choice for you, here are some things to consider.

What Is a Target Date Fund?

A target date fund (TDF) is a type of mutual fund where the underlying portfolio of the fund adjusts over time to become gradually more conservative until the fund reaches the “target date.” By starting out with a more aggressive allocation and slowly dialing back as years pass, the fund’s underlying portfolio may be able to deliver growth while minimizing risk.

This ready-made type of fund can be appealing to those who have a big goal (like retirement or saving for college), and who don’t want the uncertainty or potential risk of managing their money on their own.

While many college savings plans offer a target date option, target date funds are primarily used for retirement planning. The date of most target funds is typically specified by year, e.g. 2035, 2040, and so on. This enables investors to choose a fund that more or less matches their own target retirement date. For example, a 30-year-old today might plan to retire in 38 years at age 68, or in 2060. In that case, they might select a 2060 target date fund.

Investors typically choose target date funds for retirement because these funds are structured as long-term investment portfolios that include a ready-made asset allocation, or mix of stocks, bonds, and/or other securities. In a traditional portfolio, the investor chooses the securities — not so with a target fund. The investments within the fund, as well as the asset allocation, and the glide path (which adjusts the allocation over time), are predetermined by the fund provider.

Sometimes target date funds are invested directly in securities, but more commonly TDFs are considered “funds of funds,” and are invested in other mutual funds.

Target date funds don’t provide guaranteed income, like pensions, and they can gain or lose money, like any other investment.

Whereas an investor might have to rebalance their own portfolio over time to maintain their desired asset allocation, adjusting the mix of equities vs. fixed income to their changing needs or risk tolerance, target date funds do the rebalancing for the investor. This is what’s known as the glide path.

How Do Target Date Funds Work?

Now that we know what a target date fund is, we can move on to a detailed consideration of how these funds work. To understand the value of target date funds and why they’ve become so popular, it helps to know a bit about the history of retirement planning.

Brief Overview of Retirement Funding

In the last century or so, with technological and medical advances prolonging life, it has become important to help people save additional money for their later years. To that end, the United States introduced Social Security in 1935 as a type of public pension that would provide additional income for people as they aged. Social Security was meant to supplement people’s personal savings, family resources, and/or the pension supplied by their employer (if they had one).

💡 Recommended: When Will Social Security Run Out?

By the late 1970s, though, the notion of steady income from an employer-provided pension was on the wane. So in 1978 a new retirement vehicle was introduced to help workers save and invest: the 401(k) plan.

While 401k accounts were provided by employers, they were and are chiefly funded by employee savings (and sometimes supplemental employer matching funds as well). But after these accounts were introduced, it quickly became clear that while some people were able to save a portion of their income, most didn’t know how to invest or manage these accounts.

The Need for Target Date Funds

To address this hurdle and help investors plan for the future, the notion of lifecycle or target date funds emerged. The idea was to provide people with a pre-set portfolio that included a mix of assets that would rebalance over time to protect investors from risk.

In theory, by the time the investor was approaching retirement, the fund’s asset allocation would be more conservative, thus potentially protecting them from losses. (Note: There has been some criticism of TDFs about their equity allocation after the target date has been reached. More on that below.)

Target date funds became increasingly popular after the Pension Protection Act of 2006 sanctioned the use of auto-enrollment features in 401k plans. Automatically enrolling employees into an organization’s retirement plan seemed smart — but raised the question of where to put employees’ money. This spurred the need for safe-harbor investments like target date funds, which are considered Qualified Default Investment Alternatives (QDIA) — and many 401k plans adopted the use of target date funds as their default investment.

Today nearly all employer-sponsored plans offer at least one target date fund option; some use target funds as their default investment choice (for those who don’t choose their own investments). Approximately $1.8 trillion dollars are invested in target funds, according to Morningstar.

What a Target Date Fund Is and Is Not

Target date funds have been subject to some misconceptions over time. Here are some key points to know about TDFs:

• As noted above, target date funds don’t provide guaranteed income; i.e. they are not pensions. The amount you withdraw for income depends on how much is in the fund, and an array of other factors, e.g. your Social Security benefit and other investments.

• Target date funds don’t “stop” at the retirement date. This misconception can be especially problematic for investors who believe, incorrectly, that they must withdraw their money at the target date, or who believe the fund’s allocation becomes static at this point. To clarify:

◦ The withdrawal of funds from a target date fund is determined by the type of account it’s in. Withdrawals from a TDF held in a 401k plan or IRA, for example, would be subject to taxes and required minimum distribution (RMD) rules.

◦ The TDF’s asset allocation may continue to shift, even after the target date — a factor that has also come under criticism.

• Generally speaking, most investors don’t need more than one target date fund. Nothing is stopping you from owning one or two or several TDFs, but there is typically no need for multiple TDFs, as the holdings in one could overlap with the holdings in another — especially if they all have the same target date.

Example of a Target Date Fund

Most investment companies offer target date funds, from Black Rock to Vanguard to Charles Schwab, Fidelity, Wells Fargo, and so on. And though each company may have a different name for these funds (a lifecycle fund vs. a retirement fund, etc.), most include the target date. So a Retirement Fund 2050 would be similar to a Lifecycle Fund 2050.

How do you tell target date funds apart? Is one fund better than another? One way to decide which fund might suit you is to look at the glide path of the target date funds you’re considering. Basically, the glide path shows you what the asset allocation of the fund will be at different points in time. Since, again, you can’t change the allocation of the target fund — that’s governed by the managers or the algorithm that runs the fund — it’s important to feel comfortable with the fund’s asset allocation strategy.

How a Glide Path Might Work

Consider a target date fund for the year 2060. Someone who is about 30 today might purchase a 2060 target fund, as they will be 68 at the target date.

Hypothetically speaking, the portfolio allocation of a 2060 fund today — 38 years from the target date — might be 80% equities and 20% fixed income or cash/cash equivalents. This provides investors with potential for growth. And while there is also some risk exposure with an 80% investment in stocks, there is still time for the portfolio to recover from any losses, before money is withdrawn for retirement.

When five or 10 years have passed, the fund’s allocation might adjust to 70% equities and 30% fixed income securities. After another 10 years, say, the allocation might be closer to 50-50. The allocation at the target date, in the actual year 2060, might then be 30% equities, and 70% fixed income. (These percentages are hypothetical.)

As noted above, the glide path might continue to adjust the fund’s allocation for a few years after the target date, so it’s important to examine the final stages of the glide path. You may want to move your assets from the target fund at the point where the predetermined allocation no longer suits your goals or preferences.

Pros and Cons of Target Date Funds

Like any other type of investment, target date funds have their advantages and disadvantages.

Pros

• Simplicity. Target funds are designed to be the “one-stop-shopping” option in the investment world. That’s not to say these funds are perfect, but like a good prix fixe menu, they are designed to include the basic staples you want in a retirement portfolio.

• Diversification. Related to the above, most target funds offer a well-diversified mix of securities.

• Low maintenance. Since the glide path adjusts the investment mix in these funds automatically, there’s no need to rebalance, buy, sell, or do anything except sit back and keep an eye on things. But they are not “set it and forget it” funds, as some might say. It’s important for investors to decide whether the investment mix and/or related fees remain a good fit over time.

• Affordability. Generally speaking, target date funds may be less expensive than the combined expenses of a DIY portfolio (although that depends; see below).

Cons

• Lack of control. Similar to an ordinary mutual fund or exchange-traded fund (ETF), investors cannot choose different securities than the ones available in the fund, and they cannot adjust the mix of securities in a TDF or the asset allocation. This could be frustrating or limiting to investors who would like more control over their portfolio.

• Costs can vary. Some target date funds are invested in index funds, which are passively managed and typically very low cost. Others may be invested in actively managed funds, which typically charge higher expense ratios. Be sure to check, as investment costs add up over time and can significantly impact returns.

What Are Target Date Funds Good For?

If you’re looking for an uncomplicated long-term investment option, a low-cost target date fund could be a great choice for you. But they may not be right for every investor.

Good For…

Target date funds tend to be a good fit for those who want a hands-off, low-maintenance retirement or long-term investment option.

A target date fund might also be good for someone who has a fairly simple long-term strategy, and just needs a stable portfolio option to fit into their plan.

In a similar vein, target funds can be right for investors who are less experienced in managing their own investment portfolios and prefer a ready-made product.

Not Good For…

Target date funds are likely not a good fit for experienced investors who enjoy being hands on, and who are confident in their ability to manage their investments for the long term.

Target date funds are also not right for investors who are skilled at making short-term trades, and who are interested in sophisticated investment options like day-trading, derivatives, and more.

Investors who like having control over their portfolios and having the ability to make choices based on market opportunities might find target funds too limited.

The Takeaway

Target date funds can be an excellent option for investors who aren’t geared toward day-to-day portfolio management, but who need a solid long-term investment portfolio for retirement — or another long-term goal like saving for college. Target funds offer a predetermined mix of investments, and this portfolio doesn’t require rebalancing because that’s done automatically by the glide path function of the fund itself.

The glide path is basically an asset allocation and rebalancing feature that can be algorithmic, or can be monitored by an investment team — either way it frees up investors who don’t want to make those decisions. Instead, the fund chugs along over the years, maintaining a diversified portfolio of assets until the investor retires and is ready to withdraw the funds.

Target funds are offered by most investment companies, and although they often go by different names, you can generally tell a target date fund because it includes the target date, e.g. 2040, 2050, 2065, etc.

If you’re ready to start investing for your future, you might consider opening a brokerage account with SoFi Invest® in order to set up your own portfolio and learn the basics of buying and selling stocks, bonds, exchange-traded funds (ETFs), and more. Note that SoFi members have access to complimentary financial advice from professionals.

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May

2022

Root Canal Cost: How Much and How To Pay for It

By Jamie Cattanach | Budgeting & Goals, Financial Independence, personal_loan | Comments Off

Having to get a root canal is already painful enough — but then comes the prospect of paying for it.

While the specific cost of a root canal will vary depending on your geographical location, the location of the tooth, your dentist, and other factors, it can easily cost as much as $1,400 or even more out of pocket if you don’t have insurance — and several hundred even if you do.

Fortunately, there are a variety of ways to finance dental work that make it possible to afford the care your teeth require. Here’s what you need to know.

What Is a Root Canal Treatment?

A root canal is a dental treatment that can remove infection and bacteria from the pulp beneath the hard exterior of the tooth. It’s a pretty common procedure — millions of them are performed each year.

While root canals are often characterized as unpleasant, modern dentistry means this medical intervention can take place relatively painlessly while preserving the natural tooth for both chewing and complementing a smile. All of which is to say, if you’re in need of a root canal, you’re not alone.

Reasons for a Root Canal

There are many different reasons your dentist might prescribe a root canal, including:

• Tooth decay

• Large cavities

• Chips in tooth enamel

• Periodontal disease

• Dental trauma

In any of these situations, bacteria might infect the pulp of the tooth and, if left untreated, the infection can spread to the surrounding structures such as gums, other teeth, or even the jawbone. In extreme cases, dental infections can contribute to heart attack or stroke, along with causing a lot of pain.

Taking good care of your teeth can help prevent these causes, but sometimes, accidents or predisposition to decay can play into the equation. In any case, if your dentist prescribes a root canal, it’s probably worth heeding their advice.

How Much Does a Root Canal Cost on Average?

While, again, the cost of a root canal procedure varies greatly depending on factors we’ll dive into in more depth below, the average cost hovers around $1,400 without insurance. With insurance, your bill might be considerably lower: between $200-$500 out of pocket, depending on your coverage and the extent of the procedure.

How Much Is a Root Canal and a Crown?

In many cases, you may also require a crown along with a root canal, which can help protect the tooth for future chewing and use. A crown can add a substantial amount to the overall bill: as much as $1,000 if you’re paying out of pocket.

Factors That Impact the Cost of a Root Canal

Here are some of the specific factors at play that can pull the cost of your root canal up or down.

Insurance Coverage

Obviously, the cost of a root canal — or any dental or medical procedure — is likely to be higher if you don’t have insurance coverage or if your provider is out of your insurance company’s network. Because root canals are usually medically necessary, as opposed to just cosmetic, it’s likely your insurer will cover the procedure itself.

Tooth Location

The location of the infected tooth in your mouth can also have an impact on the total cost of the root canal. That’s because certain teeth are more difficult for dentists to work on than others.

For instance, molars, which are set more deeply in the mouth, are harder to reach and thus command higher costs for dental procedures. Bicuspids, or premolars, cost slightly less, while front teeth needing root canals are likely to cost the least.

Geographical Location

Like most other goods and services, the cost of a root canal can vary largely depending on the local economy — or the prices set by the dental professional you choose.

Type of Dentist

While most general dentists can perform a simple root canal, some teeth with more complicated infections might require an endodontist, who specializes in dental pulp specifically (the part that is treated during the procedure).

Root canal treatment cost by a specialist may be more more than treatment by your general dental professional, as can the use of high-tech equipment such as an ultrasonic needle or water laser.

Root Canal Complications

Although they’re very common and generally safe, like most other medical procedures, root canals do come with some risk.

For example, the root canal can fail due to a breakdown of materials or the provider’s failure to remove all of the bacteria during the procedure. In addition, sometimes the tooth becomes slightly discolored after the procedure due to bleeding on the inside of the tooth.

Ways to Pay For a Root Canal

Although root canals can be expensive, there are many ways to pay for this vitally important procedure without chewing through your savings.

Dental Insurance

Carrying dental insurance is a great way to lower the cost of procedures such as root canal — though keep in mind you’ll be responsible for monthly premiums as well as a potential copay or coinsurance costs.

Health Savings Account

A Health Savings Account is a tax-incentivized account that can help you save and pay for out-of-pocket medical expenses more affordable. However, you must have a High Deductible Health Plan to contribute to one.

Recommended: How to Set Up a Health Savings Account

Personal Loan

Personal loans are a type of financial product that allows you to borrow money for almost any purpose, including dental or medical care. Because they’re unsecured, meaning no collateral is required, they tend to have higher interest rates than auto loans or mortgages — but the rates can be lower than those offered by credit cards.

As with most financial products, your specific rates and terms will vary depending on your credit score and other financial aspects. While rates may be higher, there are still personal loans for low-credit borrowers — and taking one out may still make more financial sense than decimating your emergency fund or putting the procedure on credit.

Credit Card

Although they usually have fairly high-interest rates, credit cards are another option for paying for necessary medical interventions in a pinch. If you can qualify for a credit card with a 0% promotional interest rate, you’ll have some time to pay the balance without interest if you can pay it off before the promotional period ends.

Other Dental Procedures a Personal Loan Can Cover

Along with root canals, personal loans can be used to cover other common dental procedures, as well, including:

• Periodontal surgery

• Dentures

• Tooth bonding

• Wisdom tooth removal

• Dental fillings

The Takeaway

Having a root canal can be an important medical intervention for your health and the survival of your affected tooth. And although the procedure is expensive, there are ways to pay for it that won’t add financial pain to your dental pain.

If you’re considering a personal loan — for a root canal or otherwise — SoFi Personal Loans offer fixed rates and no-fee options. You can check your rate in just one minute without affecting your credit score.^* Now that’s a reason to smile.

Check your rate on a personal loan from SoFi

FAQ

How much is a root canal and a crown?

A root canal procedure averages $1,400, and the restorative crown can add another $1,000 the total cost. Costs can vary depending on what part of the country the procedure is performed in and which tooth is being treated.

Why is a root canal so expensive?

Root canals are performed by licensed medical professionals who use specialized equipment. More complex situations may need to be treated by an endodontist, a dental specialist who has completed additional years of training beyond dental school.

What does a root canal cost without insurance?

The full, out-of-pocket cost of a root canal may range from $700 to $1,800, depending on a variety of factors.

^*Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

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