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While a graduate certificate program is not as long or intense as a graduate degree, certificate programs can still be a significant commitment — both in terms of time and money. On top of tuition, there may be ongoing additional fees to consider, such as materials, exam fees, and professional association fees.

Not all certificate programs qualify for federal aid, although some may. Fortunately, there are other financial aid avenues that can potentially help you afford your graduate certificate. To help you decide which path is right for you, here’s a look at some of your financing options, plus the pros and cons of each.

Finding Financial Aid for Graduate Certificate Programs

There are many reasons to pursue a graduate certificate, including access to more job opportunities and the ability to earn more money. In some fields, such as finance, employers may encourage their employees to obtain certificates to move up in their fields. In these cases, employers may provide financial assistance to pay for the certificate program.

Some people may obtain a graduate certificate with an eye toward completing additional coursework toward a master’s degree in the future. While some graduate certificates have discrete coursework unique to the certificate, other post-grad certificates have credits that may go toward a master’s degree. If you’re considering a grad degree, then it may be a good idea to explore what the coursework entails and whether you may be able to use those credits toward a master’s in the future.

If you’re planning on funding your graduate certificate yourself, it may be helpful to speak to people who have done the certification program to hear the pros, cons, and time commitment required. It can also be helpful to hear how other people have funded the certificate, because it could open up certain avenues, such as specific scholarships for that certificate that you may not have heard of yet.

Strategies to fund your graduate certificate include self-funding, funding from your employer, funding from scholarships, or a private student loan. Here, some of the considerations of all avenues.

Recommended: A Guide to Private Student Loans

Funding From Your Employer

In some cases, your employer may recommend you obtain a post-grad certificate. In other cases, you may need to ask your manager and go through your employer’s process for tuition reimbursement.

Pros of funding from your employer:

•   Your employer is covering some or all of the financial burden.

•   Your employer is invested in your career.

•   You can be confident that the certificate will be useful to your future career path.

•   There may be coworkers who have done the certificate as well as who can walk you through their experience as well as specifics about the HR process in getting the certificate funded.

Cons of funding from your employer:

•   Balancing work and studying may be challenging.

•   Your employer may have oversight into your success.

•   You may be on the hook for the costs of the certificate if you leave or are terminated during a set period of time.

•   You may still be responsible for part of the tuition, or for additional materials fees.

Free tuition is an obvious pro when it comes to having a certificate employer-funded. But other considerations come into play: How will you simultaneously manage work and studying? What happens if you don’t pass? And if you do accept employer funding, is there a contract that locks you into employment for a certain period of time? Knowing the stipulations can be helpful in managing expectations. And of course, talking to coworkers who have already done the program can be helpful in figuring out the ins and outs of how your specific employer expects you to complete the course and what they anticipate for your career future.

Recommended: Is it Possible to Take Online Classes While Working?

Funding From scholarships

Private scholarships may be available to help pay for the course. They may be issued by the institution granting the certificate. For example, the Certified Financial Planner (CFP®) certificate, a popular financial certificate, has a host of scholarships presented on their website . These scholarships may be distributed by private foundations in honor or memory of certain people. Each scholarship may have specific requirements; some may be exclusive for people who demonstrate financial need, others may be exclusively focused on merit.

Pros of scholarships:

•   They can help offset tuition costs.

•   They can be gratifying to receive and provide motivation for success.

Cons of scholarships:

•   They typically require applications, which can be time-consuming to complete.

•   They may have admission requirements, such as being a U.S. citizen or already completing certain coursework.

•   Receiving the full amount of money may be contingent on performance.

•   You may be required to declare the scholarship on your taxes; scholarships for non-degree programs are generally considered taxable. If that’s the case for you, consider putting aside money for taxes on the scholarship.

Scholarships can be a great way to cover the cost of your certificate. It’s a good idea to research the certificate program you’re considering to uncover scholarship opportunities. Your alma mater’s career development office may also have leads for you to pursue.

Recommended: Finding & Applying to Scholarships for Grad School

Self-Funding a Certificate Program

Maybe you have savings set aside or maybe your family has offered to cover the cost of your degree program. But if you have the funds, should you write the check?

Pros of self-funding:

•   It’s a seamless process — write the check after you’ve been accepted, and you no longer need to worry about payment.

Cons of self-funding:

•   The money used for the degree program may diminish your savings or emergency fund.

•   Payment may come with strings if a family member is covering the program.

If you have the money to cover a certificate program and still have a comfortable emergency fund, then this can be a great option. But if you’d need to decimate your emergency fund or use a credit card to cover the payment, then it could be a good idea to consider other ways to cover the cost.

Student Loans for a Certificate Program

The fourth option is applying for student loans to cover the cost of a certificate program. Unlike a degree program, certificate programs are generally not eligible for federal student loans.

In the case that your certificate program is eligible for federal financial aid, it’s worth filling out the Free Application for Federal Student Aid (FAFSA®). This form will help determine your eligibility for federal aid, including federal student loans.

But private graduate student loans may be an option. Note that private student loans are not subject to the same requirements as federal student loans and don’t offer the same borrower protections, such as the option to pursue Public Service Loan Forgiveness or deferment protections. Be sure to shop around and read all the terms and conditions closely.

Pros of private student loans:

•   You won’t need to deplete your savings.

•   You can compare private loans to find the lowest interest rate.

•   You may be able to find a payback structure that makes sense within your overall budget.

Cons of private student loans:

•   Additional debt can be challenging to take on, especially if you’re not working.

•   Depending on credit history, some lenders may require a cosigner.

How do you choose which company to get private student loans for a certificate program? In addition to checking your interest rate — which will typically not affect your credit score — you also may want to consider additional elements of the loan. Are there any additional fees? Are there any hardship clauses, if you were unable to make payments for a month? What does the payment structure look like?

In addition to comparing lenders, it can also be helpful to ask yourself some what-ifs. These include:

•   How will these payments fit into my budget?

•   What happens if I don’t obtain the job or payment bump I’m expecting along with my certificate?

•   How will I budget to make sure that my loan payment doesn’t feel like a liability?

Because graduate certificate programs are generally less expensive than degree programs, loan terms may be smaller and shorter-term. Still, applying for any loan is a big deal, and it’s good to go through a few scenarios before you decide on the right avenue for you.

The Takeaway

Even though they may seem lower-commitment than a full degree program, certificate programs have the potential to be time-consuming and expensive. Resources are available for payment, but some expenses, such as professional fees or exam fees, may not be covered under certain scholarships or by your employer. Understanding the full scope of expectations for tuition coverage and knowing how any payback terms may fit into your budget can be key for paying confidently for your certificate program.

If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.

Photo credit: iStock/Jacob Ammentorp Lund

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SOIS0923011

Umbrella insurance is a type of insurance policy that extends the personal liability coverage you probably already have through your homeowners or auto insurance. In other words, it’s a policy that helps protect your assets if you ever get sued for a whole lot of money.

Although most people won’t face a multi-million dollar lawsuit in their lifetimes, if you are the unlucky exception, an umbrella policy can help you avoid financial ruin. This is a relatively affordable kind of insurance coverage, too — although there are some additional costs it can require, which we’ll get into below.

Here’s what you need to know about umbrella insurance and how to decide if it’s right for you.

What Is Umbrella Insurance?

Certain types of insurance include liability coverage, which is insurance coverage that protects your finances and assets in case you get sued. You likely already have this kind of coverage, to some extent, through your homeowners or car insurance policy.

An umbrella insurance policy adds additional liability coverage on top of whatever coverages you might already have. That can be a lifesaver if you get sued for an amount of money large enough to exceed your existing liability insurance.

For example, say your auto insurance covers $25,000 in bodily injury liability per person and up to $50,000 in bodily injury liability per accident. It also covers up to $20,000 in property damage liability per accident. In total, you have a total of up to $70,000 per accident in coverage.

If you get into a fender bender, or even a moderately severe collision, that coverage might be sufficient. But say you get into a catastrophic accident that involves several cars and more than two people. That $70,000 isn’t going to be enough to cover multiple totaled vehicles or the medical bills for several hospital stays. If you’re sued for those losses and damages, you could lose your retirement savings, liquid savings and checking accounts, and potentially even your home.

If you have an umbrella insurance policy, that’s when it would kick in to cover the overage that your auto insurance policy doesn’t meet. Which is to say: umbrella insurance, as its name suggests, can protect you from a seriously rainy day.

But as with all insurance policies, it’s important to read the fine print.

💡 Quick Tip: Saving money on your fixed costs isn’t always easy. One exception is auto insurance. Shopping around for a better deal really can pay off.

What Does Umbrella Insurance Cover — or Not?

Although umbrella insurance is specifically meant to extend your existing liability coverages, it’s important to understand that these policies don’t cover everything. (Notably, umbrella insurance does not cover your personal property. It’s all about making sure your assets are covered when other people incur losses and damages.)

Although it’s always important to consult the specifics of the policy you’re considering for the full details, here’s a basic breakdown of what umbrella insurance typically does and does not cover.

What Umbrella Insurance Generally Covers

The good thing about umbrella coverage is that it’s an inclusive policy rather than an exclusive one. That means that instead of listing named perils, the way homeowners insurance does, umbrella insurance covers most liabilities with certain named exceptions.

But again, umbrella insurance is all about protecting you from the financial fallout of a lawsuit. It isn’t about protecting your physical home, car, or person from physical dangers. That’s why you still need homeowners, auto, and health insurance products.

Generally speaking, umbrella insurance covers liabilities related to:

•   Injuries

•   Property damage

•   Lawsuits

•   Other personal liability situations

Additionally, umbrella insurance usually extends to household members beyond you, the policyholder, and the incident doesn’t necessarily have to involve your personal property or vehicle to be eligible for umbrella coverage. Your umbrella policy might also cover you worldwide, with some exceptions. Again, consult your individual plan paperwork or insurance representative for full details.

What Umbrella Insurance Does Not Cover

Umbrella insurance is broad and inclusive, but it doesn’t cover every liability. Notable exceptions include:

•   Injuries sustained by you or your family or damages to your own property

•   Intentional actions that result in losses or damages (for example, if you get into a fight and punch somebody in the face)

•   Actions classified as criminal

•   Liabilities you agreed to assume in a contract you signed

•   Liabilities you incurred in your business or professional life. These require business liability insurance, which is a separate product

•   Liabilities caused by war or armed conflicts

What About Deductibles?

It’s also important to understand that even with umbrella insurance, you might still be responsible for paying a deductible when a claim is filed, whether it’s through the underlying insurance policy or the umbrella policy itself.

For example, imagine someone is injured during a party you throw in your home and they sue you for their medical costs and lost wages. Say your homeowners insurance policy covers up to $100,000 in personal liability, but your guest wins a lawsuit to the tune of $500,000.

If your homeowners insurance deductible is $1,000, you’ll need to pay that amount out of pocket before the homeowners coverage kicks in to pay for $99,000 toward the judgment. Then, your umbrella insurance would pay the additional $400,000, as well as any separate legal expenses related to the court proceedings.

Even if your underlying insurance doesn’t have a deductible, or if you use your umbrella policy to pay for a liability that other insurance policies don’t cover, you’d probably still be responsible for some of the cost. You’d likely be asked to pay a self-insured retention before the umbrella policy kicked in to cover the rest of the claim.

How Much Does Umbrella Insurance Cost?

Umbrella insurance is a relatively affordable policy, which makes it an attractive option for those seeking peace of mind in a “lawsuit happy” world. A $1 million umbrella policy costs about $150 to $300 per year, according to the Insurance Information Institute, and you can purchase even more coverage than that for less than $100 per million.

That said, because their products kick in after regular insurance is used, most umbrella insurers will require you to carry a decent amount of coverage already through your baseline policies. You’ll likely need to buy a minimum of $250,000 in liability insurance on your auto policy and $300,000 in liability insurance on your homeowners policy in order to qualify, which means you’ll probably be spending more on insurance overall.

💡 Quick Tip: Next time you review your budget, consider making room for additional insurance coverage. Think of it as an investment that can help protect you from a major financial loss.

Is It Worth Having Umbrella Insurance?

Learning how umbrella policies work is one thing. But how do you decide whether or not you need this coverage?

At the end of the day, as with so many financial matters, it comes down to your personal choice and level of risk tolerance. After all, anyone can get sued. That said, there are some people who are at higher risk of getting sued than others.

For example, if you regularly have large, raucous gatherings on property you own, you run a decent risk of someone getting injured, which could result in serious medical bills. Ditto if your home has a trampoline or pool. If you’re the owner of a dog or the parent of a teenage driver, you might consider umbrella insurance in case of accidental damages. Celebrities and public figures also often take out umbrella policies.

The Takeaway

Umbrella insurance is an extended liability insurance product that can help protect you in case of a lawsuit. Depending on how likely you are to be sued and your level of risk aversion, you may want to add umbrella insurance to your list of coverages. It’s important to remember, however, that umbrella insurance doesn’t cover all contingencies. And whether or not you take out an umbrella insurance policy, you need basic insurance products like homeowners, auto, and renters insurance.

When the unexpected happens, it’s good to know you have a plan to protect your loved ones and your finances. SoFi has teamed up with some of the best insurance companies in the industry to provide members with fast, easy, and reliable insurance.

Insurance not available in all states.
Gabi is a registered service mark of Gabi Personal Insurance Agency, Inc.
SoFi is compensated by Gabi for each customer who completes an application through the SoFi-Gabi partnership.

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

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

SOPT0923003

Hyperinflation occurs when prices for goods and services rise uncontrollably. It is an economic condition that fuels nightmares for consumers and for economists alike.

According to data from Johns Hopkins University professor Steve Hanke, there have been more than 60 documented instances of hyperinflation since the 1700s, and in every instance, economic conditions deteriorated so fast that in all cases, national currencies failed, meaning that they lost nearly all of their purchasing power both domestically and internationally.

That begs a key question: Could hyperinflation come in the United States? And, if so, could hyperinflation take down the U.S. dollar and trigger a recession?

Theoretically, the answer is “possibly.” Realistically, the answer is “not likely.” Let’s take a look at hyperinflation and evaluate the possibility of inflation on steroids taking root in the U.S. economy.

What Is Hyperinflation?

If you’re still not quite clear on what is hyperinflation, economists define the term as when the price of goods and services rises uncontrollably over a specific timeframe, with no short-term economic remedy able to bring those prices back down again.

While figures linked to hyperinflation vary, some economists say hyperinflation occurs when the price of goods and services in a country’s economy rise by 50% over the period of one month.

The causes of hyperinflation typically stem from a skyrocketing boost in a country’s money supply without any accompanying economic growth. That scenario usually occurs when a country’s government essentially prints and spends money in short-term bursts, thus triggering a rise in that country’s money supply.

When a government pursues a high level of short-term economic spending at a rate significantly higher than the country’s gross domestic product (GDP) rate, more money flows through the economy. When that happens, the real value of a nation’s currency declines, the price of goods and services rises, and inflation spikes.

💡 Quick Tip: Before opening an investment account, know your investment objectives, time horizon, and risk tolerance. These fundamentals will help keep your strategy on track and with the aim of meeting your goals.

Is Hyperinflation Coming to the United States?

While U.S. inflation rates and the prices of many goods and services are on the upswing, economists dismiss the notion that U.S. hyperinflation is looming for the country for several reasons. First, it’s important to remember that hyperinflation and inflation aren’t the same thing, and the Federal Reserve would likely raise interest rates if inflation concerns grew.

According to data published in September 2023, the annual U.S. inflation rate was 3.7% for the 12 months that ended in August 2023. That’s a significant drop from June of 2022, when the inflation rate was 9.1%, which was led by certain items such as airline tickets, lumber, and hotel rates. Many economists attributed this to ongoing inventory shortages and supply chain issues and the release of post-pandemic pent-up demand.

Even the largest inflation rate in U.S. history — 23% in June, 1920 — wouldn’t come close to approaching hyperinflation levels of 50% in a month. Still, ongoing inflation is something that the U.S. economy hasn’t seen in more than four decades, and it’s a risk that investors may want to consider when devising their portfolio strategy.

How Can Hyperinflation Affect the United States?

Economists have largely downplayed the chances of a hyperinflation in the USA, but with inflation on the rise, it’s helpful for consumers to get a better grip on hyperinflation, in particular, and on inflation in general.

Hyperinflation Causes:

These are some of the typical causes of hyperinflation:

Falling Dollar Value

Like most major global currencies, the dollar trades on foreign currency exchanges. When a country faces inflationary risks, investors grow skittish, and may bypass that country’s currency in favor of more stable currencies. Even without hyperinflation, a weaker dollar can significantly hurt the U.S. economy.

(Hyperinflation is the extreme opposite of what happens during deflation, in which prices for goods and services decline and the value of a currency rises.)

Fewer Major Purchases

As inflation seeps into an economy, high prices may prompt individuals and businesses to defer or cancel large purchases. Consumers, for example, could hold off buying new homes, new vehicles, or major household appliances. Businesses might postpone big-ticket purchases like heavy machinery, office buildings, and commercial vehicles.

Some investors may hesitate to put money into stocks in a down market. All of those decisions could stall economic growth, as fewer dollars are circulating through the economy.

Monetary Policy

When inflation occurs, banks and financial institutions may not lend money or extend credit to consumers and businesses, as confidence in the overall economy wanes.

The economic fix for skyrocketing inflation typically comes from a country’s central bank. In the United States, that would be the Federal Reserve. When necessary, the Federal Reserve uses monetary policy to slow rising inflation by curbing the U.S. money supply, often by raising interest rates. Higher interest rates give consumers and businesses more incentive to save and less incentive to spend. That, in turn, slows rising inflation.

Recommended: What Is Monetary Policy?

Lower Investment Returns

Inflation eats into real investment returns. As the value of a dollar declines, investors need to earn more than their average return on investment in order to generate the same purchasing power.

How to Combat Hyperinflation

Individuals can’t do much to combat hyperinflation on their own. In fact, during hyperinflation, economies and societies can break down or collapse. Fortunately, periods of hyperinflation are rare. And remember, the 3.7% inflation rate as of August 2023 in the U.S. is nowhere near the levels of 50% in a month, which is when many economists believe hyperinflation occurs.

That said, there are things that might help individuals lessen the impact regular or high inflation might have on their investments. These actions include having a balanced and diversified portfolio, and investing in Treasury Inflation-Protected Securities (TIPS), in which the principal amount invested adjusts with inflation.

💡 Quick Tip: Are self-directed brokerage accounts cost efficient? They can be, because they offer the convenience of being able to buy stocks online without using a traditional full-service broker (and the typical broker fees).

Real-World Examples of Hyperinflation

Zimbabwe offers a relatively recent example of hyperinflation. Just over a decade ago, Zimbabwe’s inflation rate stood at a staggering 98% daily inflation rate as the country’s economy went into free fall. That means consumer prices doubled on a daily basis.

Today, the Zimbabwe dollar is very weak, as the country continues to struggle with the issues that often lead to hyperinflation, such as an increased money supply, political corruption, and a major decline in economic activity.

Even historically stable country economies have experienced hyperinflation.

In the immediate aftermath of World War I, the Weimer Republic of Germany fell into economic decline due to war reparation debts and significantly reduced economic activity. The German government printed too much money in an effort to handle its economic obligations and to ignite a stagnant economy. The country faced an inflation rate of 323% per month by November, 1923 — that’s an annual inflation rate of three billion percent.

In today’s dollars, the consumer impact of hyperinflation is particularly onerous. For example, a small cup of coffee that normally would cost $3 would cost $22 at a 1,000% inflation rate. Similarly, a rental payment for an apartment in a major U.S. city might normally cost $2,000. With a 1,000% inflation rate, that rent would cost $22,000.

Hyperinflation also exists on the world’s economic stage in 2023. Venezuela, for example, has an estimated inflation rate of about 400%.

The Takeaway

While hyperinflation is certainly an economic condition any country would strive to avoid, there’s no compelling evidence suggesting it’s on the U.S. economic horizon — now or anytime in the near future. Still, the country has been in an inflationary period since 2022, so investors may consider using some inflation-hedging strategies to reduce its impact.

Ready to invest in your goals? It’s easy to get started when you open an investment account with SoFi Invest. You can invest in stocks, exchange-traded funds (ETFs), mutual funds, alternative funds, and more. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).

FAQ

How does hyperinflation differ from regular inflation?

Inflation is the rate at which prices for goods and services are rising in a given economy. Hyperinflation is considered out-of-control inflation, at levels of about 50% in one month, and it can be a sign that a severe economic crisis is on the horizon.

Has the United States ever experienced hyperinflation in its history?

No. The closest the U.S. has come to hyperinflation is when annual inflation peaked at almost 30% during the Revolutionary War in 1778.

Are there any warning signs or indicators that could suggest the onset of hyperinflation?

Signs that might suggest that hyperinflation could happen include significant price increases of goods and services (such as increases of 50% in one month), the value of a country’s currency plummets, and economic activity slows or stops.

How can individuals protect their assets and finances during periods of hyperinflation?

Hyperinflation is quite rare, especially in countries with a central bank, like the Federal Reserve, that works to control inflation. However, there are things an investor might do to help limit the impact regular inflation might have. This includes having a balanced and diversified portfolio, and investing in Treasury Inflation-Protected Securities (TIPS), in which the principal invested adjusts with inflation.

Photo credit: iStock/milindri

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

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

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