Jun

2022

How to Invest in Solar Energy

By Michael Flannelly | Growing Wealth, invest, Investing | Comments Off

Solar energy investing focuses on companies or funds focused on some aspect of the solar energy industry. Individuals can invest in the solar energy industry by putting money into companies involved in some part of the solar power supply chain, including manufacturers of solar panels and operators of solar energy facilities. Individuals can also profit from solar energy by installing solar panels on their homes.

Solar energy is one of the most promising renewable energy sources. There are several ways to invest in solar energy for investors interested in supporting an industry that may help reduce dependence on traditional fossil fuels and help combat climate change.

What Is Solar Investing?

Solar investing generally refers to investing in companies that produce or sell solar energy products. This can include solar panel manufacturers, installers, or companies operating solar energy facilities. Investors usually invest in solar through traditional products like stocks, mutual funds, and exchange-traded funds (ETFs).

Another common type of solar investing is the installation of solar panels on a home or business. Solar panels can be used to power all or part of a home or business, and the electricity generated can offset the cost of an energy bill. Investors can also use solar panels to generate income by selling their electricity back to a utility company.

💡 Recommended: Beginner’s Guide to Sustainable Investing

What Is Solar Energy?

Solar energy is a form of renewable energy that comes from the sun; it is an abundant source of energy that can be used to generate electricity, heat water, and provide other forms of energy for homes, businesses, and communities.

Solar energy is generally generated by solar panels, which are made up of photovoltaic (PV) cells that convert sunlight into electricity. Solar panels can be installed on an individual’s home or business or arrayed across open spaces that experience strong sunlight.

Though solar panels are common for most consumer and business applications, thermal solar is another type of solar energy. Thermal solar energy utilizes mirrors to reflect and concentrate sunlight onto receivers that collect the energy and convert it to heat, which can then be used to produce electricity or stored for later use. It is used primarily in large power plants.

Solar energy is considered a clean and sustainable energy source that can help reduce the dependence on fossil fuels to combat climate change. Analysts expect renewable energy sources like solar will make up a more significant portion of all energy generation in the coming decades.

Benefits and Risks of Investing in Solar

The trend of investing in renewable energy sources like solar energy is rising as the public becomes more aware of the environmental and economic benefits. However, before investing in this sector, there are benefits and risks to consider.

Benefits

A benefit of investing in solar is that it provides a renewable energy source that can help reduce your carbon footprint. This can be appealing to investors interested in environmentally friendly and socially responsible investing.

Solar energy is also sustainable, especially compared to fossil fuels and traditional energy sources. The amount of oil and coal in the ground is limited, but the sun will likely keep shining for many more years. Investors interested in investments with long-term growth potential may prefer solar energy to other energy stocks.

Additionally, if you install solar panels on your home, it can increase the value of your property.

Risks

A primary risk of solar energy is that it is intermittent, meaning that solar energy is only generated when the sun is shining. Solar energy is only available during daylight, and a cloudy day may interfere with energy production. While this is a problem, technology is advancing so solar energy can be more adequately captured and stored during periods of extreme sunshine.

Another downside to solar energy is that many technologies in the sector require rare earth materials in the production process. The solar industry must compete with other industries for these scarce resources. Because there can be supply and demand issues for these commodities, it can increase costs for solar energy producers.

And though solar energy is a renewable resource, that doesn’t mean it doesn’t create any harm to the environment. The materials used in solar technologies are difficult to dispose of and recycle, which cuts into the sustainability claims of solar energy investments.

💡 Recommended: What Every New Investor Should Know About Risk

4 Ways to Invest in Solar Energy

Investors can invest in solar energy by putting money into the stocks and bonds of companies in the solar energy industry. Mutual funds and exchange-traded funds (ETFs) with solar energy or renewable energy-focused strategies are also potential investment vehicles for those interested in adding solar energy to their portfolio.

Regardless of the type of investment vehicle, investors need to remember that many companies and funds are diversified, meaning they may be involved in sectors other than solar energy. For investors that want to invest in purely solar energy companies or funds, it’s essential to do research into potential investments.

Stocks

Investors can put money into various publicly-traded companies involved in some aspect of the solar energy industry. Solar energy companies may include manufacturers of components for solar technologies, installers of solar panels, and firms that operate solar energy facilities.

Some companies involved in the solar energy industry include:

• Enphase Energy (ENPH): This company designs and manufactures technologies that turn sunlight into energy

• SolarEdge Technologies (SEDG): This firm creates products that help photovoltaic systems convert solar energy into power

• First Solar (FSLR): This company is a manufacturer of solar panels and a provider of utility-scale photovoltaic power plants

• Sunrun (RUN): This firm is a leading provider of residential solar panels

• Daqo New Energy (DQ): This company manufactures monocrystalline silicon and polysilicon, primarily for use in solar photovoltaic systems

💡 Recommended: How to Analyze a Stock

Mutual Funds and ETFs

Investors who don’t want to pick individual stocks to invest in can always look to mutual funds and exchange-traded funds (ETFs) that provide exposure to solar energy companies and investments. A growing number of index funds invest in a basket of companies in the solar energy industry. These funds allow investors to diversify their holdings by investing in one security. However, not all solar energy funds follow the same criteria and may focus on different aspects of solar energy. These funds may also have holdings in traditional energy and utility companies that only are partially involved in the solar energy industry.

Bonds

The bonds of corporations involved in solar energy business practices can be a good option for investors interested in fixed-income securities. Green and climate bonds are bonds issued by companies to finance various environmentally-friendly projects and business operations.

Additionally, government bonds used to fund solar energy projects can be an option for fixed-income investors. These bonds may come with tax incentives, making them a more attractive investment than traditional bonds.

💡 Recommended: How to Buy Bonds: A Guide for Beginners

Install Solar Panels

As mentioned above, investors who want to profit from solar energy can purchase solar panels and install them on a home or business. This may be an appealing way to save money on your energy bills, generate income by selling electricity to a utility company and helping reduce your carbon footprint.

💡 Recommended: Solar Panel Financing in 4 Ways

How to Start a Solar Investment Portfolio

If you are ready to start investing and want to build a portfolio of solar energy investments, you can follow these steps:

Step 1: Open a brokerage account

You will need to open a brokerage account and deposit money into it. Once your account is funded, you can buy and sell stocks and other securities. SoFi Invest® offers an active investing platform where you can start building your solar energy portfolio.

Step 2: Pick your assets

Decide what type of investment you want, whether in a company’s stock, a solar energy-focused ETF or mutual fund, or bonds.

Step 3: Do your research

It’s important to research the different companies and funds and find a diversified selection that fits your desires and priorities.

Step 4: Invest

Once you’re ready, make your investment and then monitor your portfolio to ensure that the assets in your portfolio have a positive environmental and financial impact.

It is important to remember that you should diversify your portfolio by investing in various asset classes. Diversification may help to reduce your risk and maximize your returns.

The Takeaway

Solar investing has become increasingly popular in recent years as the cost of solar panels has fallen and the technology has become more efficient. Solar panels are now available for a fraction of the cost of traditional electric power, and they are becoming more efficient at converting sunlight into electricity. Investing in the solar energy industry can be a great way to profit from the growth outlook for solar energy. However, it’s necessary to do your homework before investing in any solar company or fund or installing solar panels on your home.

If you’re ready to invest in solar energy stocks and ETFs, SoFi Invest can help. With SoFi Invest’s stock trading platform, investors can trade stocks and ETFs with no commissions for as little as $5.

Get started investing with SoFi Invest

Photo credit: iStock/deepblue4you

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

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Jun

2022

How to Invest in Wind Energy

By Michael Flannelly | Growing Wealth, invest, Investing | Comments Off

Investing in wind energy involves putting money into companies or funds focused on some aspect of the wind energy industry. Individuals can invest in the wind energy industry directly by investing in companies that operate wind farms or indirectly by putting money into companies that manufacture wind turbines or components.

Wind energy is one of the cornerstones of the renewable energy industry, providing a stable and cost-effective source of electricity generation. As more attention is paid to the effects of climate change and the need to reduce dependence on fossil fuels, more and more investors are turning to wind energy investments.

What Are Wind Energy Investments?

Wind energy investments are financial stakes in companies and projects focused on generating electricity through wind power. Wind turbines, sometimes called windmills, harness this power by collecting the energy created by wind and converting it into electricity.

Wind energy is often divided into two market segments, distributed wind and utility-scale wind.

Distributed Wind Market Segment

The distributed wind market is usually made up of smaller-scale projects, where wind turbines are used to generate electricity for homes, businesses, and even entire communities.

Utility-scale Market Segment

Utility-scale wind energy, in contrast, consists of turbines that generate more than 100 kilowatts of energy. The power generated by utility-scale wind projects is added to the electrical grid. Companies involved in utility-scale wind energy draw the most interest from individual investors.

Utility-scale wind energy projects can be land-based, where a group of wind turbines is grouped in a wind farm on land. Offshore wind farms built off the coast are another type of utility-scale wind energy, taking advantage of powerful ocean winds to generate large amounts of energy.

Individuals can invest in the wind energy industry by putting money into companies involved in some portion of the wind energy industry or, more rarely, by investing in specific wind energy projects.

Increased Popularity

Wind energy investments, and other socially responsible investments, are becoming increasingly popular as the focus on the need for sustainable energy grows. Because they rely on wind power rather than fossil fuels, these investments and projects cut down on emissions and pollution.

Furthermore, wind energy is becoming more acceptable because of declining costs, technological improvements, and government tax incentives. In the United States, wind power was the source of 9.2% of all electricity generation in 2021, up from 2.3% in 2010. By 2050, wind energy may make up 35% of all electricity generation in the US.

3 Ways to Invest in Wind Energy

Investors can invest in wind energy by putting money into the stocks and bonds of companies in the wind energy industry. Mutual funds and exchange-traded funds (ETFs) with wind energy or renewable energy-focused strategies are also potential investment vehicles for those interested in adding wind energy to their portfolio.

Regardless of the type of investment, investors need to remember that many companies and funds are diversified, meaning that they may be involved in sectors other than wind energy. For investors that want to invest in purely wind energy companies or funds, it’s essential to do research into potential investments.

💡 Recommended: Beginner’s Guide to Sustainable Investing

1. Stocks

Investors can put money into various publicly-traded companies involved in some aspect of the wind energy industry. These companies may include wind farm operators, which own and operate wind turbines to produce energy for customers and end-users, and manufacturers of turbines and other components of wind farms. Some utility companies may also be an option for wind energy investors.

Some companies involved in the wind energy industry include:

• Orsted: The Denmark-based power company is the largest developer of offshore wind power in the world

• Vestas Wind Systems: The Denmark-based company is one of the world’s largest manufacturers of wind turbines

• General Electric (GE): The US-based company installed 53% of all land-based wind turbines in the US in 2020

• NextEra Energy (NEE): The American energy company has 119 wind farms in operation

• Alliant Energy (LNT): The American energy company owns and operates wind farms across Wisconsin and Iowa

💡 Recommended: How to Analyze a Stock

2. Mutual Funds and ETFs

Investors who don’t want to pick individual stocks to invest in can always look to mutual funds and exchange-traded funds (ETFs) that provide exposure to wind energy companies and investments. A growing number of index funds invest in a basket of companies involved in the wind energy industry. These funds allow investors to diversify their holdings by investing in one security. However, not all wind energy funds follow the same criteria and may focus on different aspects of wind energy. These funds may also have holdings in traditional energy and utility companies that only are partially involved in the wind energy industry.

3. Bonds

The bonds of corporations involved in wind energy business practices can be a good option for investors interested in fixed-income securities. Green and climate bonds are bonds issued by companies to finance various environmentally-friendly projects and business operations.

Additionally, government bonds used to fund wind energy projects can be an option for fixed-income investors. These bonds may come with tax incentives, making them a more attractive investment than traditional bonds.

💡 Recommended: How to Buy Bonds: A Guide for Beginners

Benefits and Risks of Investing in Wind Energy

The trend of investing in renewable energy sources like wind energy is rising as the public becomes more aware of the environmental and economic benefits of doing so. However, before investing in this sector, there are benefits and risks to consider.

Benefits

A benefit of investing in wind energy is that it is a renewable resource, so it will never run out as long as the sun shines and the wind blows. Additionally, wind energy is cost-effective. According to some estimates, wind is one of the lowest-priced energy sources. And because the power generated from wind farms is sold at a fixed price over a long period of time, it can provide reliable returns for investors.

Wind power is also a clean energy source, meaning it does not produce emissions that can harm the environment like fossil fuels and power plants. This can be attractive for investors focused on building a portfolio of green investments.

Risks

One primary risk of investing in wind energy is that it is a relatively new technology, so there is little data available on its long-term performance. Wind energy and all renewable energy sources must compete with traditional energy sources like oil, coal, and natural gas. Because of this, the long-term outlook for wind energy investments may change. Wind energy investments may be harder to stomach for investors who are not comfortable with the risk of newer technologies.

Additionally, wind energy projects may get pushback from communities where companies want to operate. Wind turbines cause noise and aesthetic pollution, potentially creating negative public perception.

How to Build a Wind Energy Portfolio

If you are ready to start investing and want to build a portfolio of wind energy investments, you can follow these steps:

Step 1: Open a brokerage account

You will need to open a brokerage account and deposit money into it. Once your account is funded, you can buy and sell stocks and other securities. SoFi Invest® offers a stock trading platform where you can start building your wind energy portfolio.

Step 2: Pick your assets

Decide what type of investment you want to make, whether in a company’s stock, a wind energy-focused ETF or mutual fund, or bonds.

Step 3: Do your research

It’s important to research the different companies and funds and find a diversified selection that fits your desires and priorities.

Step 4: Invest

Once you’re ready, make your investment and then monitor your portfolio to ensure that the assets in your portfolio have a positive social and financial impact.

It is important to remember that you should diversify your portfolio by investing in various asset classes. Diversification may help to reduce your risk and maximize your returns.

The Takeaway

Wind energy is a renewable resource that is becoming increasingly popular and is expected to grow significantly in the coming years. This makes it a potential growth investment for those looking to diversify their portfolios and reduce their reliance on traditional energy sources.

While the outlook for wind energy is promising, investments in wind energy may not always produce positive returns. When considering a wind energy investment, it is important to do your research and understand the risks and rewards involved with this nascent industry.

If you’re ready to invest in wind energy stocks and ETFs, SoFi Invest® can help. With a SoFi Invest investment account, you can trade stocks and ETFs with no commissions.

Get started investing with SoFi Invest

Photo credit: iStock/XtockImages

Jun

2022

Deed of Trust vs Mortgage: What Are the Differences You Should Know?

By Kelly Boyer Sagert | Family Finances, Home Ownership, mortgage | Comments Off

If you finance a home, the lender will have you sign a deed of trust or a mortgage. A mortgage involves you and the lender, but a deed of trust adds a neutral third party that holds title to the real estate.

Many states allow either choice. Thanks to an easier foreclosure process, many lenders prefer a deed of trust to a mortgage.

First, some mortgage basics.

Mortgage Loans 101

A mortgage is a loan that’s used to purchase a piece of real estate. First, the borrower applies for a loan from among the different mortgage types.

Once approved, they sign a mortgage note, promising to pay the lender back over a specified time with agreed-upon terms. The real estate serves as collateral for the loan.

You may hear a mortgage note referred to as a promissory note. In any case, it’s a legally binding document.

Mortgage Transfer

A mortgage transfer takes place when a borrower assigns what is typically an assumable mortgage to another person. Most mortgage loans are non-transferable. That said, in the case of marital separation, divorce, death, or other unusual circumstance, a mortgage transfer is sometimes permitted.

FHA, VA, and USDA loans, insured by the government and issued by private lenders, are assumable if the buyer qualifies.

Mortgage Foreclosure

When a borrower defaults on making mortgage loan payments as agreed upon, the lender may start legal proceedings to take ownership of the property and resell it to recover funds owed to the financial institution.

A mortgage foreclosure can take place when a borrower doesn’t meet other terms of the agreement, but failing to make payments is the most common reason. A variety of mortgage relief programs help borrowers stave off foreclosure.

What Is a Deed of Trust?

Some states incorporate a deed of trust into their home loan process, while financial institutions in other states can choose to do so or not. A deed of trust is an agreement that’s signed at a home’s closing that states how a neutral third party — typically the title company — will hold legal title to the home until the borrower pays the loan off.

Terms to know include the following:

• Trustor: the borrower

• Beneficiary: the financial institution loaning the money

• Trustee: a third party that will legally hold the title until the loan is paid off

Deed of Trust Transfer

If the borrower pays off the mortgage loan, the third-party trustee dissolves the trust involved and transfers the title of the real estate to the borrower.

If the borrower sells the home before the balance owed is paid in full, the trustee takes the sales proceeds and pays the lender what is still owed and gives the borrower/trustor the rest of the money.

Deed of Trust Foreclosure

As with a mortgage, there are clauses in the deed of trust agreement that will trigger foreclosure proceedings. In this case, the trustee will sell the property and distribute the funds appropriately.

Similarities Between a Mortgage and a Deed of Trust

Both a mortgage and a deed of trust are used when someone buys a home and takes out a loan to complete the purchase. Under each structure, the lender has the option to foreclose on the home if terms and conditions agreed upon by the buyer are not met.

In states where either option is allowed, the lender will decide which one to use.

Key Differences Between a Mortgage and a Deed of Trust

Here’s the big one: ease of foreclosure by a private trust company when a deed of trust is in place.

	Mortgage	Deed of Trust
Number of parties	Two: borrower and lender	Three: trustor (borrower), beneficiary (lender), trustee
Transfers	Uncommon	Part of the transaction when loan is paid off
Foreclosure	Typically involves court	Typically handled outside court system, which is usually faster and less costly

How to Determine If You Have a Mortgage or a Deed of Trust

Although deed of trust versus mortgage differences may seem reasonably small, it can make sense to be clear about which one you have. Look at a mortgage statement to find your loan servicer and ask.

A longer route: Mortgages and deeds of trust are publicly filed documents, so you could seek out the local government agency that manages these kinds of records and get a copy.

The Takeaway

Deed of trust vs mortgage? They are the two main systems for securing home loans. One key difference is the presence of a neutral third party in deeds of trust. The trustee holds legal rights over the real estate securing the loan.

It’s easy to get lost in the forest of mortgage matters. The SoFi mortgage help center can lend a hand.

And here are tips on shopping for a mortgage.

When you’re serious about your search, check out the advantages of a SoFi Mortgage and apply for a home mortgage in minutes.

FAQ

Who can be listed on a deed of trust or mortgage?

On a deed of trust, all three parties are listed: the trustor (borrower), beneficiary (lender), and trustee (third party that holds the title until the loan is paid in full). With a mortgage, there is no third party involved.

How are mortgages and deeds of trust recorded in public records?

A deed of trust will be filed and recorded in public records in the county where the house exists. A similar process takes place for mortgage deed recordings. The recorded documents could be located at a county clerk’s office, a public recorder’s office, or an office of public records.

Is your title separate from deed of trust and mortgage?

Yes. A title is a concept rather than a physical document like a deed of trust or a mortgage note, and it refers to a person’s legal ownership of a home or other property. When a property is sold, the title is transferred from the current owner to the buyer.

Does a mortgage involve a trustee like a deed of trust?

No. Deeds of trust require a trustee, but a mortgage does not.

Photo credit: iStock/zimmytws

Jun

2022

Home Loan vs Mortgage: What You Should Know

By Austin Kilham | Family Finances, Home Ownership, mortgage | Comments Off

You’ll likely hear the terms home loan and mortgage used interchangeably, but home loan covers a variety of mortgages, home refinances, and home equity loans.

This piece will focus on the difference between a typical mortgage, used to buy a home, and home equity loans, which are used to tap the equity you’ve gained.

What Is a Mortgage?

Mortgages are loans used when buying a home or other real estate. When you take out a mortgage, your lender is allowing you to borrow the money you need to buy a home in exchange for charging you interest. You’ll repay the loan and interest in monthly installments.

Mortgages are secured loans, meaning the property is used as collateral. If you fail to make mortgage payments, your lender can foreclose on the home to recoup its money.

In order to take out a mortgage, you’ll typically need to make a down payment equal to a percentage of the purchase price. Your down payment is the portion of the cost of the home that you aren’t financing and provides immediate equity in the property.

Buyers may put down 20% on conventional mortgages to avoid private mortgage insurance (PMI), but many buyers put down much less. In fact, the median down payment for all homebuyers was 13% in 2021, according to a National Association of Realtors® report. A mortgage calculator can help you determine what effect the size of your down payment will have on your monthly payments.

When shopping for a home, you can seek mortgage pre-approval. After investigating your financial history, your lender will provide you with a letter stating how much money you can likely borrow and at what interest rate.

Types of Mortgages

There are several types of mortgages available. Mortgage insurance, in the form of PMI or mortgage insurance premiums (MIP), may be part of the deal. It’s good to understand PMI vs MIP.

• Conventional mortgages are funded by private lenders like banks and credit unions. They are not backed by a government agency. You’ll typically need to pay PMI if you don’t make a 20% down payment; mortgage insurance is canceled when 22% equity is reached. Conventional conforming loans adhere to lending limits set each year by the Federal Housing Finance Agency.

• Jumbo loans are mortgages that exceed the lending limits set for conventional loans. So a jumbo loan is a “nonconforming” loan. Conventional lenders issue jumbo loans, and the Department of Veterans Affairs guarantees a VA jumbo loan, possibly with no down payment.

• FHA loans are made by private lenders and guaranteed by the Federal Housing Administration. You may qualify to make a down payment of as little as 3.5%. Upfront and annual MIPs are required, usually for the life of the loan.

• USDA loans are backed by the U.S. Department of Agriculture and help low- to moderate-income households buy property in designated rural and suburban areas. No down payment is required. An upfront and annual guarantee fee are required.

• VA loans are designed for active-duty and veteran military service members and some surviving spouses. VA loans don’t require a minimum down payment in most cases. There’s no MIP; there is a one-time funding fee.

What Is a Home Equity Loan?

A home equity loan is frequently known as a second mortgage. Home equity loans allow homeowners to borrow against the portion of their home they own outright.

As with typical mortgages, home equity loans are secured using the home as collateral.

The amount you’re able to borrow will be determined by a few factors, including your credit history and how much equity you’ve built: the current value of your house less any outstanding debt.

It’s common for lenders to allow you to borrow up to 80% of the equity you’ve established. The loan arrives in a lump sum. You repay the home equity loan with interest over a set period of time. If you miss payments, your lender can foreclose on the house.

The borrower may pay closing costs based on the loan amount.

Another way to tap home equity is with a cash-out refinance, when you take out a new loan to pay off your old one and free up equity.

Similarities Between Home Equity Loan and Mortgage

When you apply for a mortgage as part of the home-buying process, or a home equity loan as a homeowner, lenders will look into your financial history to help them establish terms and the interest rate for the loan. For example, they will examine your credit reports, often awarding more favorable terms and interest rates to those with higher scores.

Mortgages and home equity loans are both secured loans.

Differences Between Home Equity Loan and Mortgage

A mortgage must be used to purchase an intended property. There are fewer limitations on the money received from a home equity loan.

Mortgage interest can be deducted if you itemize your deductions. However, you can only deduct interest on a home equity loan if you use the loan to buy, build, or substantially improve your main or second home. So if you want to buy a boat, that deduction won’t hold water.

When You Should Consider a Mortgage

If you don’t have the cash to buy a home outright, you will have to finance the purchase with a mortgage. However, there are some considerations you may want to take into account. For example, the larger your down payment, the more equity you will have in your home and the smaller your monthly mortgage payments will be.

Because you have more equity in the home, the bank will see you as less risky. As a result, larger down payments also tend to translate into lower interest rates. So, consider putting down as much as you can afford to.

Also, even if you have the cash to pay for a home in full, you may consider a mortgage anyway. You may not want to tie up cash that could be used for other purposes, such as in an emergency. You may be able to invest that money and earn a return that’s higher than the interest rate you’d pay on the loan.

When You Should Consider a Home Loan

Many people choose to take out home equity loans to make home improvements. That can increase the value of your home, putting you ahead if you ever choose to sell.

You may also consider a home equity loan when consolidating other debt, including high-interest credit card debt. The average interest rate for a home equity loan remains significantly lower than the average credit card rate. As a result, it can make financial sense to pay off the more expensive debt with a new, cheaper loan.

Home Loans With SoFi

Home equity loan vs. mortgage? One uses a home as a tool; the other gets a buyer into a home. If you’re looking for a home equity loan, a mortgage, or a refinance, it’s a good idea to compare rates and terms.

Give SoFi’s menu of home loan options a look. SoFi offers fixed-rate mortgages and refinancing at competitive rates, and home equity loans through Spring EQ.

Check your rate with no effect on your credit score.*

FAQ

Is a home loan the same as a mortgage?

Yes. “Home loan” is an umbrella term that covers a wide variety of mortgages, home equity loans, and home refinances.

Why is a home loan called a mortgage?

“Mortgage” comes from the old French mort gage, meaning a death pledge — a morbid origin for the pledge you make to a lender to pay back the money you borrow.

Is a mortgage cheaper than a home loan?

Mortgages are a type of home loan. Your interest rate will depend on the type and size of your loan, your down payment, and your financial history, such as your credit score.

Photo credit: iStock/Brandon Ruckman

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Jun

2022

Guide to Paying for Certified Registered Nurse Anesthetist (CRNA) School

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

Certified registered nurse anesthetists (CRNAs) are nurses with graduate-level education who provide anesthetics to patients in surgical and other procedures.

Currently, nurse anesthetists must have a registered nurse (RN) license and a master’s degree from a nurse anesthesia educational program accredited by the Council on Accreditation (COA) of Nurse Anesthesia Educational Programs or a Master of Science in Nursing (MSN) program. Nurse anesthesia programs typically range in length from 24 to 51 months. By 2025, all CRNAs must have a Doctorate in Nurse Anesthesia Practice (DNAP), according to the COA . It typically takes two years for a student with an MSN to earn a doctorate.

Continue reading for a look at nine tips that can help you learn how to pay for CRNA school.

How Much Does CRNA School Cost?

You may have already spent a few years paying for nursing school to get your registered nursing degree, but how much does it cost to further your education to become a nurse anesthetist?

The total cost of CRNA school (including tuition, clinical fees and other expenses) can vary widely, depending on whether you choose to attend an out-of-state institution, a private college, or an in-state university.

For example, the 2021-2022 tuition and fees at Loma Linda University in Loma Linda, California, are an estimated $138,666. In contrast, tuition and fees are approximately $45,000 for Arkansas State University’s. Note that there may be additional costs associated with a CRNA degree, such as books, supplies, or exam fees.

Note that the average nursing school cost can vary widely, ranging from $6,000 for an associate degree to over $100,000 for an advanced degree.

9 Tips to Help You Pay for CRNA School

Let’s take a look at nine tips you can use to pay for CRNA school, from choosing a less expensive school to answering the question, “Will financial aid pay for CRNA school?”

1. Choose a Less Expensive School

You can save money by choosing a less expensive school and/or by making sure that you have residency in the state of the university you want to attend. For example, the total cost of attending Georgetown University’s DNAP program for the first year is $126,730, $75,580 for the second year and $64,440 for the third year.

The cost to attend the University of Iowa is $80,756 if you’re an in-state resident or $154,406 if you’re an out-of-state resident.

It’s important to compare and contrast the costs of several programs before you decide which school will both meet your needs and help you save money.

2. Save Money

You may also want to consider saving money for college to limit the amount of money you’ll have to borrow for CRNA education. Knowing the costs of the schools on your shortlist can help you earmark a certain amount of money to set aside. However, remember that you may receive scholarships and grants that you don’t have to pay back. You might not need to save for the complete costs of a nurse anesthetist program. One way to understand your exact costs is to meet with the financial aid office of the schools you’re considering. They’ll give you an idea of the type of institutional financial aid you could qualify for.

There are a wide variety of ways to save, including through a general savings account, certificate of deposit (CD) or a 529 plan, which is a state tax-advantaged plan that will allow you to withdraw funds tax-free to cover nearly any type of college expense. 529 plans may also have additional state or federal tax benefits.

3. FAFSA and Financial Aid

The Free Application for Federal Student Aid (FAFSA®) refers to a form you can complete to determine your eligibility for student financial aid. Learn more about the FAFSA with SoFi’s comprehensive FAFSA guide.

You can qualify for federal student aid, including grants and federal student loans, through the FAFSA. You may also have to file the FAFSA in order to qualify for institutional scholarships.

4. Work More

If you’re already working as a nurse, you may want to consider picking up some more hours in order or prepare to save for your CRNA degree. It’s important to note that since nurse anesthesia programs are so labor intensive, most students find it difficult to work while attending CRNA school. However, you can certainly save up as much as possible prior to entering school in order to save as much as possible. If you must work, you may want to strictly limit your hours, but that’s a personal decision.

5. Getting an Employer to Pay for Your Education

Will a hospital pay for CRNA school?

Hospitals and groups often offer tuition reimbursement to offset loan debt. However, you may have to sign a tuition reimbursement payback agreement which means you may have to pay back your reimbursement if you leave the company within a specific amount of time, but not all companies require you to do this.

Ask your human resources office and read the fine print if your hospital has an agreement to see if you need to repay tuition if you get laid off or fired.

6. Grants

Grants are “free money” that you typically don’t generally have to pay back. The American Association of Nurse Anesthetists (AANA) offers nurse anesthesia grants to develop research for member CRNAs to develop healthcare policy, the science of anesthesia, education, practice/clinical or leadership opportunities. The Foundation will reimburse up to 15% indirect costs with proper documentation.

The AANA grants listed above are research grants, but you may be able to tackle state grants, school grants for graduate students and other types of grants by filing the FAFSA. The best way to learn more is to ask more questions through the financial aid offices of the schools you’re considering.

7. Scholarships

Like grants, you also do not have to pay back scholarships.

The AANA also offers scholarships. Students who are AANA members and currently enrolled in an accredited nurse anesthesia program may be eligible for scholarships as long as you’re in good standing in your program, meet the application requirements, and apply online. Last year, the AANA Foundation received 2,111 competitive student scholarship applications and 73 scholarships were awarded totaling over $217,250.

Take a look at the list of AANA scholarships and review the rules for 2022, which are divided up into merit-based and financial need awards.

In addition, the university you plan to attend may also offer merit-based scholarships. For example, the Duke University School of Nursing offers a scholarship to a newly admitted DNP student each year — an approximately $68,000 total scholarship ($9,800 per semester for the first year, $8,000 per semester in the second year and $5,000 per semester in the third year).

8. Private Student Loans

Private student loans originate with a bank, credit union, or online lender, not the federal government like in the case of federal student loans. Private student loans can fill in the gaps between tuition as well as your savings, grants, scholarships, and federal student loans.

It’s a good idea to explore the interest rates, fees, repayment terms, discharge and repayment options among private student loan lenders.

The application process usually involves submitting information about your personal information, school you plan to attend, graduation date, and loan amount you need. You must also agree to the lender’s terms and conditions.

Recommended: Private Student Loan Guide

It’s important to note that private student loans don’t offer the same borrower protections, like income-driven repayment plans, as federal student loans, so they are typically considered an option only after they have thoroughly reviewed all other financing opportunities.

9. Direct PLUS Loans

Similar to student loans for undergrads, you can also get student loans for graduate school. You do have to repay loans.

As a graduate student, you can become eligible for federal loans that come from the U.S. Department of Education, including Direct Unsubsidized Loans and Direct Plus Loans. You can borrow up to your cost of attendance. Direct Unsubsidized Loans have a lower interest rate and origination fee than the Direct PLUS loan, also called the Graduate PLUS Loan.

For Direct Unsubsidized Loans for graduate students disbursed on or after July 1, 2021 and before July 1, 2022, the fixed interest rate for Direct Unsubsidized loans is 5.28%. Direct PLUS Loans first disbursed on or after July 1, 2021, and before July 1, 2022, have a fixed interest rate of 6.28%.

The benefits of federal loans include a six-month grace period before beginning repayment as well as flexible repayment plans with Public Service Loan Forgiveness eligibility. This means that as long as you make 120 qualifying monthly payments under a qualifying repayment plan, you might get your loans forgiven as long as you work full-time for a qualifying employer.

How Much CRNAs Can Expect to Make?

Nurse anesthetists, nurse midwives, and nurse practitioners can expect to make a median salary of $123,780 per year or $59.51 per hour, according to the Bureau of Labor Statistics. The job outlook for these jobs will grow about 45% from 2020 to 2030.

The Takeaway

There are a lot of ways to make your dreams of becoming a CRNA a reality. You may want to consider filing the FAFSA to qualify for federal loans, grants, and other types of funds. The AANA may also offer scholarships that you qualify for, but don’t forget to check with your employer or other sources, such as local businesses, for other funds.

Paying for CRNA school may seem daunting, so if you need a way to cover tuition, fees, and other costs, look into private student loans with SoFi.

SoFi offers competitive private student loan rates combined with flexible repayment options. You won’t pay excess fees like origination fees, late fees, or insufficient fund fees.

Check your rate in just a few minutes with SoFi.

FAQ

Can you get paid for going to CRNA school?

Universities often offer a wide variety of financial aid options, through both merit-based and need-based aid. You may need to file the FAFSA in order to qualify for certain types of aid. Check with the financial aid office at the universities you’re considering for more information about your financial aid options.

The American Association of Nurse Anesthetists (AANA) also offers nurse anesthesia grants and scholarships to students who qualify.

How much does CRNA school cost?

The costs of CRNA school depends on a wide range of factors, including whether you plan to attend an in-state or out-of-state institution or plan to attend a private or public school.

For example, Georgetown University, a private institution, costs $126,730 for the first year, $75,580 for the second year and $64,440 for the third year. On the other hand, the full cost to attend the University of Iowa is $80,756 for three years as an in-state resident or $154,406 as an out-of-state resident.

How much do CRNAs typically make?

Does CRNA school pay off? As a nurse anesthetist, you can expect to make a median salary of $123,780 per year which translates to $59.51 per hour, according to the Bureau of Labor Statistics.

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