Education &amp; Training http://www.wisebread.com/taxonomy/term/12010/all en-US This Is How Student Loan Interest Works http://www.wisebread.com/this-is-how-student-loan-interest-works <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/this-is-how-student-loan-interest-works" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/student_loan_debt.jpg" alt="Student Loan debt" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Student loans are a heavy financial burden for most borrowers, but the loan balance isn't the only major financial blow; the interest that accumulates is also difficult to stay on top of.</p> <p>Interest on a student loan is a major contributor to how big your monthly payment will be and how much your loan will <em>really </em>cost by the time you pay it off. Let's look at how student loan interest works and what you can do to get your loans paid off faster and for less money.</p> <h2>Factors that determine interest on your student loan</h2> <p>There are a few factors that determine how much you will pay in interest on your student loan: the interest rate, the amount you borrow, the loan term, and your payment plan.</p> <h3>Interest rate</h3> <p>When you take out a student loan, you'll need to pay back the amount you borrow, plus interest on the loan. Interest is charged as a percentage of the amount you owe. For example, a $10,000 loan at a 10 percent annual interest rate (compounded daily) will cost you $1,049 after a year. So after one year, you would need to pay back the $10,000 that you borrowed, plus $1,049 for interest.</p> <h3>Amount borrowed</h3> <p>We have seen that a $10,000 loan at a 10 percent annual interest rate costs $1,049 in interest after a year. Of course, most student loans are much bigger than $10,000 &mdash; what if you borrow more? If you borrow $20,000, the interest cost to carry this loan for a year would be $2,097. If you borrow $50,000, the interest after a year would be $5,243. The more you borrow, the more interest the loan carries.</p> <h3>Loan term</h3> <p>The loan term is how long it will take you to pay back the loan. For example, you could borrow $50,000 and pay it back over 10 years. In this case, the term of the loan is 10 years. You can reduce your monthly payments by choosing a longer loan term, but you will end up paying more in interest.</p> <p>If you borrow $50,000 at a 10 percent annual interest rate, you would pay $660.75 per month and your total cost for interest over the life of the loan would be $29,290.44. Now, let's say you want lower monthly payments, so you go with a 20-year term instead of 10 years. Your monthly payment would be $482.51, but over the life of the loan you would pay a whopping $65,802.60 in interest &mdash; about $35,000 more!</p> <h3>Payment plan</h3> <p>Student loans have more flexibility in their payment schedules than other installment loans. The simplest plan is to make the same monthly payments over the entire term of the loan. However, since new college grads typically have a lower income just after graduation and earn a higher salary over time, you can select repayment plans that start off with smaller monthly payments that increase as your income increases.</p> <p>Variable repayment plans do make it easier to make payments on student loans, but the price to be paid for this flexibility is interest. Any payment plan that has smaller payments in the early years will cost more in interest over all. (See also: <a href="http://www.wisebread.com/6-questions-to-ask-before-taking-out-student-loans?ref=seealso" target="_blank">6 Questions to Ask Before Taking Out Student Loans</a>)</p> <h2>How much of your student loan payment goes to interest?</h2> <p>When you make your monthly student loan payment, at first, most of your payment will go toward paying interest. Only a small amount will go toward paying down the principal. Over time, eventually more of your payment will chip away at the principal until your loan is paid off in full.</p> <p>Here's an example of how a payment of $660.75 per month on a $50,000 student loan at 10 percent interest would be applied to interest and principal during a 10-year term.</p> <p><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5170/amortization.jpg" alt="" /></p> <p>At first, you can see how the majority of the payment goes toward interest. But over time, as you continue to make payments, the balance of the loan decreases, thereby reducing the interest that accumulates and allowing more of your monthly payment to go to paying down the principal of the loan.</p> <p>Most student loans give you the option to apply extra payments toward the principal. If you can pay a little extra each month, you'll bring your balance down faster and save money on interest payments over the life of your loan. For example, if you could pay $40 more per month, your loan would be paid off in nine years instead of 10, and your total interest cost would be about $3,000 less. (See also: <a href="http://www.wisebread.com/what-really-happens-when-you-dont-pay-your-student-loans?ref=seealso" target="_blank">What Really Happens When You Don't Pay Your Student Loans</a>)</p> <h2>How to reduce your student loan interest</h2> <p>Once you understand how student loan interest works, you can put that knowledge to work. There are a few ways you can reduce the overall cost of your student loans.</p> <ul> <li> <p>Paying your loan off faster will reduce the cost of interest. Choose the shortest term you can afford, and make extra payments if possible.</p> </li> <li> <p>Borrowing more will increase your interest cost. Try to minimize living expenses while in school to keep your student loan balance as low as possible.</p> </li> </ul> <p>Select the student loan option with the lowest interest rate available. If your rate is still higher than you'd like, consider refinancing your student loan later to a lower interest rate. (See also: <a href="http://www.wisebread.com/15-ways-to-pay-back-student-loans-faster?ref=seealso" target="_blank">15 Ways to Pay Back Student Loans Faster</a>)</p> <p style="text-align: center;">&nbsp;</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fthis-is-how-student-loan-interest-works&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FThis%2520Is%2520How%2520Student%2520Loan%2520Interest%2520Works.jpg&amp;description=This%20Is%20How%20Student%20Loan%20Interest%20Works"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/This%20Is%20How%20Student%20Loan%20Interest%20Works.jpg" alt="This Is How Student Loan Interest Works" width="250" height="374" /></p> <p>&nbsp;</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dr-penny-pincher">Dr Penny Pincher</a> of <a href="http://www.wisebread.com/this-is-how-student-loan-interest-works">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-10"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-unique-ways-millennials-are-dealing-with-student-loan-debt">7 Unique Ways Millennials Are Dealing With Student Loan Debt</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-valuable-rights-you-might-lose-when-you-refinance-student-loans">8 Valuable Rights You Might Lose When You Refinance Student Loans</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/dont-ignore-these-4-things-before-refinancing-your-student-loans">Don&#039;t Ignore These 4 Things Before Refinancing Your Student Loans</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-sobering-facts-about-student-loan-debt">5 Sobering Facts About Student Loan Debt</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/3-private-lenders-that-can-really-save-you-money-on-your-student-loans">3 Private Lenders That Can Really Save You Money on Your Student Loans</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Banking Debt Management Education & Training amortization college extra payments interest rates loan terms principal refinancing repayment plans student loans tuition Wed, 09 May 2018 08:30:19 +0000 Dr Penny Pincher 2138310 at http://www.wisebread.com My Kid Got Accepted to an Expensive Private College — Now What? http://www.wisebread.com/my-kid-got-accepted-to-an-expensive-private-college-now-what <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/my-kid-got-accepted-to-an-expensive-private-college-now-what" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/coins_in_glass_jar_with_education_label.jpg" alt="Coins in glass jar with education label" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>My son recently got accepted into a college program that would cost about $45,000 per year for tuition, room, and board. This is exciting news &mdash; but also potentially expensive news. At what point does the cost of college outweigh the likely economic benefits?</p> <p>Of course, the value of college goes far beyond simply allowing someone to prepare for a higher paying job. College can help you discover your path in life, develop your mind, and open doors to experiences that are not available to most people. But how much is too much to pay for college, from a purely financial perspective?</p> <h2>College's cost in dollars and opportunity</h2> <p>The main costs of college are tuition, room, and board. The average total cost of attending an in-state public university is over $20,000 per year, and the average cost of private college is over $40,000 per year, according to the College Board.</p> <p>Opportunity cost is another cost of college that is easily overlooked. If you spend four years attending college full-time, you miss out on four years of full-time income that you could have earned instead. You also potentially delay starting to build investments and reaching financial independence.</p> <p>The most insidious cost of going to college is probably lifestyle inflation. Almost everyone tends to spend more as they make more. Even though college graduates will likely make more money than those who don't go to college, college grads will probably also <em>spend </em>a lot more on a more expensive lifestyle. Just because you make more money doesn't mean you'll end up having more money in your bank account or a higher net worth. (See also: <a href="http://www.wisebread.com/what-to-do-when-you-cant-afford-your-childs-college-education?ref=seealso" target="_blank">What to Do When You Can't Afford Your Child's College Education</a>)</p> <h2>College will boost future earnings by a lot</h2> <p>Even though the costs of attending college can be prohibitive, the benefits in terms of increased salary can easily add up to millions of dollars over a career. Let's say you are 18 years old and decide to start working full-time at an entry-level job that pays $20,000 per year. Your earnings over your career until age 65, with a 3 percent raise every year, would be $2,007,930.</p> <p>Now let's say instead of starting to work full-time at age 18, you attend college for four years. You start working full-time at age 22 with a starting salary of $45,000 per year, which is a reasonable expectation for a wide range of college majors. If you work until age 65, assuming a 3 percent raise each year, the earnings over your career would be $3,846,775.</p> <p>Taking into consideration that you delayed starting your career for five years to attend college, you would still earn over $1.8 million more over the course of your career from the benefit of your college education.</p> <p>Of course, expected starting salaries vary with college major. According to the National Association of Colleges and Employers, engineering majors are at the top of the pay scale and can expect to start at an average salary of around $65,000. Education majors have average starting salaries of around $35,000, and almost all other majors are somewhere between $35K and $65K. But no matter what you major in, your salary earnings potential over your career will likely get a big boost by going to college. (See also: <a href="http://www.wisebread.com/5-jobs-that-pay-over-50k-and-dont-require-a-bachelors-degree?ref=seealso" target="_blank">5 Jobs That Pay Over $50K and Don't Require a Bachelor's Degree</a>)</p> <h2>How much should you pay to go to college?</h2> <p>The return on investment of going to college can be quite favorable in terms of increased lifetime salary potential. As we saw in the example above, earning over $1.5 million more from a higher salary after going to college is a realistic expectation.</p> <p>The limit on how much you should pay for college is not constrained by the value of your higher salary with a college degree, since your increased earnings would probably far exceed the cost of going to college. Instead, the limit on college cost for most people is driven by how big of a student loan they can afford to pay back after graduating.</p> <p>Even though a college degree could boost your income by millions of dollars over your career, you'll need to start making student loan payments shortly after graduating. By estimating how much income you expect to earn after you graduate, you can figure out a ballpark figure for the maximum size student loan you can afford. (See also: <a href="http://www.wisebread.com/6-questions-to-ask-before-taking-out-student-loans?ref=seealso" target="_blank">6 Questions to Ask Before Taking Out Student Loans</a>)</p> <p>Here's how to calculate your maximum affordable student loan balance.</p> <ul> <li> <p>Estimate your starting salary based on your major. For example, $45,000.</p> </li> <li> <p>Divide your anticipated starting salary by 12 to get monthly pretax income. For example, $45,000 / 12 = $3,750.</p> </li> </ul> <ul> <li> <p>As a rule of thumb, use 10 percent of your pretax monthly income as your maximum affordable student loan payment. For example, $3,750 x 0.10 = $375 per month.</p> </li> </ul> <ul> <li> <p>Calculate the loan amount that a payment of $375 would support. For example, using the <a href="https://www.calcxml.com/calculators/loan-balance?skn=#results" target="_blank">loan balance calculator</a> from CalcXML, $375 per month would support a 10-year loan of $32,586 with 6.8 percent interest.</p> </li> <li> <p>Divide the loan amount by the number of years of college. For example, $32,586 / 4 = $8,146.50 per year.</p> </li> </ul> <p>The second to last step gives you an idea of the biggest student loan balance that you could afford to make payments on. The very last step gives you the biggest student loan amount that you should take each year.</p> <p>If you want a quicker way to estimate the maximum affordable student loan balance, take 75 percent of your anticipated starting salary. Using the same salary as in the previous example, $45,000 x 0.75 = $33,750. That would be your maximum affordable student loan balance.</p> <h2>But what if the numbers don't add up?</h2> <p>I started off by saying that my son was accepted into a program that costs $45,000 per year. Over four years, this would add up to $180,000. This greatly exceeds the maximum affordable student loan amount for a new college graduate. For an expected starting salary of $45,000, we calculated that the maximum affordable student loan balance is around $33,000. This wouldn't even cover one year of my son's program.</p> <p>Fortunately, there are some ways to reduce college expenses and bring the cost into an affordable range. My son was offered a big scholarship, which makes the sticker price a lot lower. Here are some other possibilities your child can pursue to help keep college costs affordable. (See also: <a href="http://www.wisebread.com/how-to-pay-for-college-when-you-didnt-get-a-scholarship?ref=seealso" target="_blank">How to Pay for College When You Didn't Get a Scholarship</a>)</p> <ul> <li> <p>Choose an in-state public university instead of more expensive private schools.</p> </li> <li> <p>Consider starting at community college for two years and transferring credits to a four-year institution later.</p> </li> <li> <p>Work summers or part-time to help pay some college expenses and reduce the burden of student loan debt.</p> </li> <li> <p>Consider going into a major that pays well to be able to afford a more expensive college program.</p> </li> <li> <p>Consider financing student loans for a longer repayment period to reduce the monthly payments. (You will be in debt longer, but could still come out ahead in the long run.)</p> </li> <li> <p>Consider military service before college, or an ROTC program at college. Benefits can cover college expenses.</p> </li> </ul> <p style="text-align: center;"> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fmy-kid-got-accepted-to-an-expensive-private-college-now-what&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FMy%2520Kid%2520Got%2520Accepted%2520to%2520an%2520Expensive%2520Private%2520College%2520%25E2%2580%2594%2520Now%2520What_.jpg&amp;description=My%20Kid%20Got%20Accepted%20to%20an%20Expensive%20Private%20College%20%E2%80%94%20Now%20What%3F"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/My%20Kid%20Got%20Accepted%20to%20an%20Expensive%20Private%20College%20%E2%80%94%20Now%20What_.jpg" alt="My Kid Got Accepted to an Expensive Private College &mdash; Now What?" width="250" height="374" /></p> <p>&nbsp;</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dr-penny-pincher">Dr Penny Pincher</a> of <a href="http://www.wisebread.com/my-kid-got-accepted-to-an-expensive-private-college-now-what">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-encouraging-truth-about-how-americans-are-covering-the-cost-of-college">The Encouraging Truth About How Americans Are Covering the Cost of College</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-keep-student-loans-from-wrecking-your-retirement">How to Keep Student Loans From Wrecking Your Retirement</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-unique-ways-millennials-are-dealing-with-student-loan-debt">7 Unique Ways Millennials Are Dealing With Student Loan Debt</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-questions-to-ask-before-taking-out-student-loans">6 Questions to Ask Before Taking Out Student Loans</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/this-is-how-student-loan-interest-works">This Is How Student Loan Interest Works</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Education & Training calculators career college costs income lifetime earnings student loans tuition Tue, 24 Apr 2018 08:30:10 +0000 Dr Penny Pincher 2130998 at http://www.wisebread.com How to Manage Student Loans On a Low Income http://www.wisebread.com/how-to-manage-student-loans-on-a-low-income <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-manage-student-loans-on-a-low-income" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_with_stack_pile_of_books_and_piggy_bank.jpg" alt="Woman with stack pile of books and piggy bank" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Student loans are a lifeline for college students without the means to foot the full bill for higher education. But the hardships begin when they graduate. For the Class of 2016, the average student loan borrower has more than $37,000 in student debt.</p> <p>Juggling student loan payments with other bills can sometimes seem impossible if you're making a low salary. Luckily, you do have options that can make your student loan payments easier to bear. Here's what you can do.</p> <h2>Federal vs. private student loans</h2> <p>There are two broad types of student loans: federal and private. Federal student loans are the easiest to deal with. That's because there are a number of programs designed to make your monthly payments more affordable.</p> <p>Private student loans are much less flexible because it's up to the individual lender to decide whether they want to help you or not. But as we'll see below, you still have options if you've got private student loans.</p> <h2>Repayment options for federal student loan borrowers</h2> <p>If you have federal student loans, you could be eligible for one of these <a href="https://studentloans.gov/myDirectLoan/ibrInstructions.action" target="_blank">income-driven repayment programs</a>:</p> <ul> <li> <p>Income-Based Repayment (IBR)</p> </li> <li> <p>Pay As You Earn (PAYE)</p> </li> <li> <p>Revised Pay As You Earn (REPAYE)</p> </li> <li> <p>Income-Contingent Repayment (ICR)</p> </li> </ul> <p>These programs all require some hassle to set up and maintain with your loan servicer. Once in place, however, your monthly student loan payments can be lowered to 10-20 percent of your discretionary income for 20-25 years, after which they are forgiven<strong>. </strong></p> <p>The difference is in how you qualify for them and the particular details of the program. Some programs have certain income requirements and loan type requirements (yep, they are limited to even certain types of federal loans). Each program works slightly differently as well, in terms of how much you have to pay and for how long.</p> <p>It sounds like a confusing web to navigate, and it is. But if you need your monthly student loan payment lowered for the long term and take the time to research the right <a href="http://www.wisebread.com/which-student-loan-repayment-plan-saves-you-the-most?ref=internal" target="_blank">federal student loan repayment program</a> for you, it can make a world of difference for your financial health.</p> <p>One important note: Refinancing is often touted as a cure-all for high student loan payments. While it can be beneficial in certain cases, you should think long and hard before you do this with federal loans. Refinancing the loans with private lenders (a different thing than <a href="http://www.wisebread.com/what-s-the-difference-between-student-loan-refinancing-and-consolidation?ref=internal" target="_blank">consolidating all of your federal loans</a> into one loan) means that you might get a lower payment, but you <a href="http://www.wisebread.com/8-valuable-rights-you-might-lose-when-you-refinance-student-loans?ref=internal" target="_blank">lose all the nice federal protections</a> outlined above.</p> <h2>Forbearance and deferment for federal student loan borrowers</h2> <p>If you're facing a temporary financial crisis such as a job loss, injury, or other economic hardship, it might make sense to ask for a temporary <a href="http://www.wisebread.com/what-is-student-loan-forbearance-anyway?ref=internal" target="_blank">forbearance</a> or <a href="http://www.wisebread.com/4-things-you-need-to-know-about-deferring-student-loans?ref=internal" target="_blank">deferment</a>. The programs can offer you up to a three-year break from making student loan payments.</p> <h2>Repayment options for private student loan borrowers</h2> <p>Unfortunately, private student loans are a bit like the Wild West. There are no federal rules requiring private lenders to work with you on a repayment plan. They're completely within their legal rights to continue charging you payments you can't afford, even if it puts you in financial jeopardy.</p> <p>Still, it doesn't hurt to call up your private student loan servicer to ask them for a break. &quot;If you're having a hard time making private loan payments, you can try reaching out and seeing if they'd agree to a modified payment schedule or forbearance, but the answer will probably be no,&quot; says Travis Hornsby, founder of Student Loan Planner, a financial coaching and consulting firm.</p> <p>After that, another option is to try to refinance your student loans with a different private lender for a lower rate. Keep in mind that many lenders require a minimum loan amount of $5,000 to refinance. You'll also need to prove that your income is high enough that you can make your new monthly payments, even though they're smaller than your current ones.</p> <p>In addition, you'll need a good credit score to qualify for interest rates that are low enough to make a refinance worthwhile. A FICO score below 640 is likely to disqualify you for a refinance.</p> <h2>Plan for what comes next</h2> <p>If you are granted student loan forbearance or deferment, use your time wisely. Plan on how to get your financial ship righted so that you <em>are</em> able to afford the monthly payments when they start back up.</p> <p>Refinancing can help lower your payments, but don't let that lull you into complacency. You should still make every effort you can to pay off the debt as soon as possible. <a href="http://www.wisebread.com/what-really-happens-when-you-dont-pay-your-student-loans?ref=internal" target="_blank">Defaulting on student loans</a> can do serious damage to your credit.</p> <p>Finally, if you sign up for an income-driven federal student loan repayment plan, make sure you know what the requirements are and that you follow them to a T. One filing slip-up can result in you being ineligible for the program.</p> <p>And if you expect a portion of your student loans to be forgiven at the end of the repayment term, remember this: The forgiven amount is considered <em>taxable income</em> by the IRS, meaning that you need to be saving for that bill, which could be considerable.</p> <h2>You can do this</h2> <p>Student loans are no fun to deal with. But you <em>can</em> get over them even if you have a low income by using the programs outlined above. It won't be easy, and it might not be quick, but thousands of people have done it before, and you can do it, too.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fhow-to-manage-student-loans-on-a-low-income&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FHow%2520to%2520Manage%2520Student%2520Loans%2520On%2520a%2520Low%2520Income.jpg&amp;description=How%20to%20Manage%20Student%20Loans%20On%20a%20Low%20Income"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/How%20to%20Manage%20Student%20Loans%20On%20a%20Low%20Income.jpg" alt="How to Manage Student Loans On a Low Income" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/lindsay-vansomeren">Lindsay VanSomeren</a> of <a href="http://www.wisebread.com/how-to-manage-student-loans-on-a-low-income">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-unique-ways-millennials-are-dealing-with-student-loan-debt">7 Unique Ways Millennials Are Dealing With Student Loan Debt</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/this-is-how-student-loan-interest-works">This Is How Student Loan Interest Works</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/3-private-lenders-that-can-really-save-you-money-on-your-student-loans">3 Private Lenders That Can Really Save You Money on Your Student Loans</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/is-student-loan-debt-as-bad-as-it-seems">Is Student Loan Debt as Bad as It Seems?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-sobering-facts-about-student-loan-debt">5 Sobering Facts About Student Loan Debt</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management Education & Training college loans college students financial struggles low income student debt student loans Wed, 18 Apr 2018 08:30:06 +0000 Lindsay VanSomeren 2128966 at http://www.wisebread.com Here's How Late Starters Can Save for Their Kids' Education http://www.wisebread.com/heres-how-late-starters-can-save-for-their-kids-education <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/heres-how-late-starters-can-save-for-their-kids-education" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/stick_with_word_saving_for_college_and_money_0.jpg" alt="Stick with word Saving for College and money" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You've always planned to help your children save for their college educations. There's just one problem: Those kids are already in high school and you've not even managed to save enough money for a single semester.</p> <p>Don't panic. Saving for college can sneak up on parents who already have many other financial challenges like making monthly mortgage payments, building an emergency fund, and saving for retirement &mdash; not to mention the daily costs that come with raising children.</p> <p>Fortunately, there are still steps you can take to boost your college saving efforts late in the game. You'll just have to be realistic: It's challenging to pay for a child's college education when you only have three or four years to do it. Setting more realistic goals can help ease your stress.</p> <p>And whatever you do, don't forget to have a long talk with your children. Explain to them exactly what kind of financial support they can expect. You don't want to blindside them if they think you're going to be their tuition piggy bank.</p> <h2>1. Don't get discouraged</h2> <p>The first rule is the simplest: Don't give up just because you've gotten off to a late start. Even if your child is starting high school, you can still open a 529 college savings account and contribute money to it each month. Every state in the country offers one of these plans.</p> <p>These plans come with tax benefits that make them ideal for saving for higher education. The money you save in a 529 plan will grow on a tax-deferred basis. You can withdraw the money without paying any taxes, too, as long as you use the dollars for qualified higher-education costs. The definition of &quot;qualified expense&quot; is broad here. They include tuition, of course, but also fees, books, and supplies.</p> <p>You might not have much money to deposit into these accounts each month, but even saving $100 a month can add up. Sure, you might not be able to save enough to cover all of your child's college costs. But you can certainly make a dent in tuition payments, fees, and expenses.</p> <p>Your children might have to borrow more money, or save up their own dollars, to help cover the shortfall. But if you start saving now, you'll at least reduce their financial burden. (See also: <a href="http://www.wisebread.com/the-9-best-state-529-college-savings-plans?ref=seealso" target="_blank">The 9 Best State 529 College Savings Plans</a>)</p> <h2>2. Tap into Upromise</h2> <p>You can provide an extra boost to your savings through Sallie Mae's <a href="https://www.upromise.com/" target="_blank">Upromise</a> program. Parents and students who sign up receive extra money toward college when they shop at participating retailers. These retailers deposit a percentage of what parents and students spend into a savings account designated for a future college student.</p> <p>The program is free. And you can invite your other family members and friends to register their credit and debit cards, too. Then, when they shop at participating retailers, a percentage of their sales will also be funneled into your child's savings account. (See also: <a href="http://www.wisebread.com/what-to-do-when-you-cant-afford-your-childs-college-education?ref=seealso" target="_blank">What to Do When You Can't Afford Your Child's College Education</a>)</p> <h2>3. Work with your children on a savings budget</h2> <p>It's important to keep your children informed as to how much you've saved for their college educations and how much you can reasonably expect to save before they head off to university. You don't want your children surprised that you've only saved enough to pay for two years of college when they expected you to pay for four.</p> <p>Have real financial conversations with your children. Work with them to create a household budget to determine how much money you can save each month for college. Doing this will give your children a more realistic look at your finances, the challenge of saving for college, and insight into how much they themselves might have to borrow.</p> <p>The budget might even include any money your children can add to their own college savings fund. Remind your sons and daughters that every little bit adds up, and that you expect them to help provide college savings, too.</p> <p>Once you and your children have created a budget, stick to it. Don't be tempted to save more than you can reasonably afford, and don't skimp on the savings to take a vacation or buy an expensive flat-screen TV. (See also: <a href="http://www.wisebread.com/how-to-help-your-kid-build-their-first-budget?ref=seealso" target="_blank">How to Help Your Kid Build Their First Budget</a>)</p> <h2>4. Protect your retirement savings</h2> <p>It can be tempting to save for your children's college education at the expense of putting money away for your retirement. Don't fall into this financial trap. Your number one priority should still be to stow away money for your retirement years, even if this means that you can't save as much as you'd like for your kids' education.</p> <p>The formula is simple: Retirement first, college savings second. Remember, your children have options to help fund the cost of a college education. You don't have nearly as many for building your retirement savings. (See also: <a href="http://www.wisebread.com/how-to-keep-student-loans-from-wrecking-your-retirement?ref=seealso" target="_blank">How to Keep Student Loans From Wrecking Your Retirement</a>)</p> <h2>5. Explore other college options</h2> <p>Speaking of those other options, your children need to start exploring them. Perhaps they could attend community college for two years and then transfer to a more expensive four-year college as a junior. Or maybe your children could attend a less expensive public state university instead of that private school three states away. Both strategies could dramatically reduce the expense of a college education.</p> <p>Encourage your children to also hunt for scholarship and grant opportunities. Even smaller scholarships can help reduce the cost of education. (See also: <a href="http://www.wisebread.com/how-to-pay-for-college-when-you-didnt-get-a-scholarship?ref=seealso" target="_blank">How to Pay for College When You Didn't Get a Scholarship</a>)</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fheres-how-late-starters-can-save-for-their-kids-education&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FHere%2527s%2520How%2520Late%2520Starters%2520Can%2520Save%2520for%2520Their%2520Kids%2527%2520Education.jpg&amp;description=Here's%20How%20Late%20Starters%20Can%20Save%20for%20Their%20Kids'%20Education"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/Here%27s%20How%20Late%20Starters%20Can%20Save%20for%20Their%20Kids%27%20Education.jpg" alt="Here's How Late Starters Can Save for Their Kids' Education" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/heres-how-late-starters-can-save-for-their-kids-education">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/should-you-save-for-college-using-a-529-prepaid-tuition-plan">Should You Save for College Using a 529 Prepaid Tuition Plan?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-encouraging-truth-about-how-americans-are-covering-the-cost-of-college">The Encouraging Truth About How Americans Are Covering the Cost of College</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-questions-to-ask-before-taking-out-student-loans">6 Questions to Ask Before Taking Out Student Loans</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-saving-too-much-money-for-a-college-fund-is-a-bad-idea">Why Saving Too Much Money for a College Fund Is a Bad Idea</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/25-money-saving-strategies-that-are-actually-hurting-you">25 Money-Saving Strategies That Are Actually Hurting You</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Education & Training 529 plans budgeting children college education late starters retirement saving money scholarships tuition Wed, 04 Apr 2018 08:30:10 +0000 Dan Rafter 2125056 at http://www.wisebread.com 3 Ways Education Can Impact Your Creditworthiness http://www.wisebread.com/3-ways-education-can-impact-your-creditworthiness <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/3-ways-education-can-impact-your-creditworthiness" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/this_is_how_we_will_climb_ladders.jpg" alt="This is how we will climb ladders" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Many factors can impact your credit score, but is education one of them?</p> <p>In short, no. Education does not directly affect your credit score. Whether you have a Ph.D or are a high school dropout, credit reporting agencies couldn't care less. No matter your level of education, your credit score will remain unaffected.</p> <p>On the flip side, your credit score is<em> directly affected</em> by factors that may relate to you if you used student loans to fund your education. And your credit score is just one factor that constitutes your creditworthiness. What do we mean by creditworthiness? As defined by Investopedia, creditworthiness is &quot;a valuation performed by lenders that determines the possibility a borrower may default on his or her debt obligations. It considers factors such as repayment history and credit score.&quot;</p> <p>While your level of education may not directly affect your credit score, it can affect your creditworthiness. Here's how.</p> <h2>Debt-to-income ratio</h2> <p>If you borrowed money to finance your education, you could have a higher debt-to-income ratio. A high debt-to-income ratio means that you owe a high percentage of your income to debt. This can affect your creditworthiness.</p> <p>Student loan borrowers owe a significant chunk of change to their student loan lenders. It can be difficult to put a serious dent in these loans, especially while working an entry-level, likely lower-paying job as a recent college graduate.</p> <p>As your income increases, lenders face less concern over the amount of debt you carry. That's because as your earning power goes up, you are less likely to miss debt payments. (See also: <a href="http://www.wisebread.com/the-7-debt-payoffs-that-boost-your-credit-score-the-most?ref=seealso" target="_blank">The 7 Debt Payoffs That Boost Your Credit Score the Most</a>)</p> <h2>On-time payments</h2> <p>Failing to pay a student loan bill fully and on-time can drastically affect your creditworthiness.</p> <p>Lenders don't want to credit money to borrowers with a bad repayment history. Any lender wants to know that they will be repaid, on time and on their terms.</p> <p>On the other hand, paying back your student loans on schedule can help to increase your credit score and creditworthiness. Potential lenders viewing your repayment history like to see that you are a reliable borrower. (See also: <a href="http://www.wisebread.com/what-really-happens-when-you-dont-pay-your-student-loans?ref=seealso" target="_blank">What Really Happens When You Don't Pay Your Student Loans</a>)</p> <h2>Work experience</h2> <p>Your past work experience is a big determining factor of your creditworthiness, especially in relation to home loans. When applying for a mortgage, lenders will take a look at the last two years of your work history, among other considerations. They want to know that not only are you willing to pay back owed money, but that you are also financially able to pay it back. This is why a steady job history is important to potential lenders.</p> <p>While your level of education doesn't necessarily determine whether you'll have vast or limited career opportunities, you are more likely to have better career opportunities (and income opportunities) with at least a bachelor's degree.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F3-ways-education-can-impact-your-creditworthiness&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F3%2520Ways%2520Education%2520Can%2520Impact%2520Your%2520Creditworthiness.jpg&amp;description=3%20Ways%20Education%20Can%20Impact%20Your%20Creditworthiness"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/3%20Ways%20Education%20Can%20Impact%20Your%20Creditworthiness.jpg" alt="3 Ways Education Can Impact Your Creditworthiness" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/rachel-slifka">Rachel Slifka</a> of <a href="http://www.wisebread.com/3-ways-education-can-impact-your-creditworthiness">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/you-missed-a-student-loan-payment-now-what">You Missed a Student Loan Payment. Now What?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/my-kid-got-accepted-to-an-expensive-private-college-now-what">My Kid Got Accepted to an Expensive Private College — Now What?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-really-happens-when-you-dont-pay-your-student-loans">What Really Happens When You Don&#039;t Pay Your Student Loans</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/heres-why-you-shouldnt-freak-out-if-you-miss-a-payment-due-date">Here&#039;s Why You Shouldn&#039;t Freak Out If You Miss a Payment Due Date</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/3-ways-student-loan-debt-can-affect-your-mortgage-application">3 Ways Student Loan Debt Can Affect Your Mortgage Application</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Education & Training credit credit history creditworthiness debt to income ratio late payments student loans Fri, 23 Mar 2018 09:00:06 +0000 Rachel Slifka 2116586 at http://www.wisebread.com Want Financial Education in Schools? Follow the Example of One Kansas Teen http://www.wisebread.com/want-financial-education-in-schools-follow-the-example-of-one-kansas-teen <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/want-financial-education-in-schools-follow-the-example-of-one-kansas-teen" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/high_school_student_828456866.jpg" alt="High school student learning financial literacy" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>I&rsquo;m a native Kansan. I&rsquo;m a proud Jayhawks fan. My roots are deep there, and much of my family still lives there. I&rsquo;m going back home next month to celebrate my grandson becoming an Eagle Scout (the <a href="http://www.wisebread.com/is-student-loan-debt-as-bad-as-it-seems" target="_blank">same one</a> who got lost on his way to class the first day of college last fall).</p> <p>I say all this because I want to brag about something innovative that my home state has done for its students&nbsp;&mdash; and to use the example as a guide for what we all need to do to encourage the same action for financial education.</p> <p>Recently, spurred to action by a teenager who suffered cardiac arrest during a spelling bee, the Kansas Legislature passed a law requiring every high school student in the state to complete a cardiopulmonary resuscitation (CPR) course to graduate from high school.</p> <p>The American Heart Association reports that 350,000 people across the United States suffer cardiac arrest outside of a hospital each year. Only 46 percent of those victims receive CPR. Now, every high school graduate in Kansas will know how to perform CPR. That will unquestionably save lives over time.</p> <p>Emma Baker was the 13-year-old student who collapsed during a spelling bee. Her life was saved because a school administrator knew CPR and a person in the audience recognized her medical distress.</p> <p>That event drove a passion for her and her family to press for legislation to ensure that others in the future have someone there to perform CPR in the rare event that it&rsquo;s needed.</p> <p>We need to follow that example for financial education for our students across the country.</p> <p>Every single student in our schools will:</p> <ul> <li>Spend cash.<br /> &nbsp;</li> <li>Take out installment loans for major purchases.<br /> &nbsp;</li> <li>Swipe credit cards, or just point their phones at a reader to make a charge.<br /> &nbsp;</li> <li>Need to purchase insurance.<br /> &nbsp;</li> <li>Save for emergencies.<br /> &nbsp;</li> <li>And, we hope, invest for their retirement.</li> </ul> <p>Add to that the fact that there was more than $1.4 trillion in student loan debt in 2017 and more than $1 trillion in credit card debt in the United States, and it should be abundantly clear that understanding fundamental personal finance topics including credit, savings, and other basic financial concepts is a critical life skill every student needs.</p> <p>Everywhere I go, everyone I talk to wants to know why we don&rsquo;t include financial education in our schools&rsquo; curricula. The answer is simple. We don&rsquo;t make it clear to our school boards, administrators, and legislators that it&rsquo;s a priority for us as citizens and parents.</p> <p>We need to follow Ms. Baker&rsquo;s example. If we don&rsquo;t share our passion and make our voices heard, we can&rsquo;t bring change to our schools for our children. If our school boards, administrators, and legislators don&rsquo;t know that financial education is a priority for their constituents, they can&rsquo;t give it the attention it needs.</p> <h2>Financial Literacy Month</h2> <p>April is Financial Literacy Month. That would be a great time to speak with your school board members and legislators about the importance of requiring personal finance education in our classrooms.</p> <p>Another way to get involved is through the <a href="http://www.jumpstart.org/" target="_blank">Jump$tart Coalition for Personal Financial Literacy</a>. Experian was one of the founders of the organization more than 20 years ago. Today, Jump$tart has about 150 partners from the private sector, public sector, and academia. It&rsquo;s extraordinarily rare to find an organization where companies like Experian work together with government agencies like the Consumer Financial Protection Bureau, colleges and universities, and nonprofit foundations. In this case, it&rsquo;s because we all believe in the importance of personal finance education in the classroom.</p> <p>Jump$tart isn&rsquo;t an advocacy organization. It works to provide training, resources, and guidelines for effective classroom instruction. Jump$tart established <a href="http://www.jumpstart.org/national-standards" target="_blank">national standards</a> for financial education in grades K-12 and has built a clearinghouse of resources for teachers to use in their classes.</p> <p>There are Jump$tart <a href="http://www.jumpstart.org/state-coalitions" target="_blank">coalitions</a> in all 50 states, Puerto Rico, and Washington, D.C. Visit the website to learn more about what Jump$tart does and how you can volunteer to support financial education initiatives in your state.</p> <p><em>(Editor&rsquo;s note: Wise Bread is also a proud supporter of Jump$tart. Check out the recent TweetChat we co-hosted with Jump$start on the topic of <a href="http://www.wisebread.com/creating-a-financially-literate-future-for-your-kids-highlights-from-our-chat-with-jumptart" target="_blank">creating a financially literate future with our kids</a>.)</em></p> <h2>Credit tips for Financial Literacy Month</h2> <p>Throughout April, there will be financial education initiatives and events to encourage people of all ages to increase their financial knowledge. A piece of that knowledge is about credit and how to use it wisely. Here are a few credit tips in advance of Financial Literacy Month.</p> <ul> <li>Get your credit report at least once a year. It&rsquo;s free from each of the national credit reporting companies at <a href="http://www.annualcreditreport.com" target="_blank">www.annualcreditreport.com</a>. The first step to improving your credit is knowing what&rsquo;s in your credit report.<br /> &nbsp;</li> <li>Check your credit score when you get your report. You can purchase a score for a nominal fee, and you&rsquo;ll get the risk factors that go with the score. Use those factors to address the issues in your credit report to improve your credit score.<br /> &nbsp;</li> <li>The two most important factors for every credit score are your payment history and your credit utilization ratio. Pay your bills on time and keep your credit card balances low, and your scores will improve over time.<br /> &nbsp;</li> <li>Check your credit report and score several months before applying for a major loan or mortgage. Doing so will ensure you have time to address any issues with your credit history and take steps to improve your score if necessary.<br /> &nbsp;</li> <li>Join Experian&rsquo;s <a href="http://www.experian.com/blogs/news/about/creditchat/" target="_blank">#CreditChat</a> on Twitter and Periscope to learn more about personal finance and credit. We want you to be part of the conversation not only during financial literacy month, but all year long.</li> </ul> <p>Everywhere I go, parents and professionals tell me how important requiring financial education in our schools is and how concerned they are that it isn&rsquo;t.</p> <p>I&rsquo;m the wrong person to tell.</p> <p>Make your voice heard in your state. We want all our students across the country to graduate with fundamental personal financial skills.</p> <p>Have a talk with your legislators, school boards, and administrators. Only when they understand how important it is to all of us will financial education become a priority. Financial Literacy Month would be a good time to start that conversation.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fwant-financial-education-in-schools-follow-the-example-of-one-kansas-teen&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FWant%2520Financial%2520Education%2520in%2520Schools_%2520Follow%2520the%2520Example%2520of%2520One%2520Kansas%2520Teen.jpg&amp;description=Want%20Financial%20Education%20in%20Schools%3F%20Follow%20the%20Example%20of%20One%20Kansas%20Teen"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/Want%20Financial%20Education%20in%20Schools_%20Follow%20the%20Example%20of%20One%20Kansas%20Teen.jpg" alt="Want Financial Education in Schools? Follow the Example of One Kansas Teen" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/rod-griffin">Rod Griffin</a> of <a href="http://www.wisebread.com/want-financial-education-in-schools-follow-the-example-of-one-kansas-teen">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/tips-for-increasing-your-financial-literacy">Tips for Increasing Your Financial Literacy</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-places-teens-and-adults-can-learn-about-money">7 Places Teens (and Adults) Can Learn About Money</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/essential-money-lessons-for-recent-grads">Essential Money Lessons for Recent Grads</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/my-kid-got-accepted-to-an-expensive-private-college-now-what">My Kid Got Accepted to an Expensive Private College — Now What?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-really-happens-when-you-dont-pay-your-student-loans">What Really Happens When You Don&#039;t Pay Your Student Loans</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Education & Training cpr cpr training financial education financial health financial literacy healthy habits Wed, 21 Mar 2018 19:06:30 +0000 Rod Griffin 2121990 at http://www.wisebread.com What to Do If You Can't Pay Your Private Student Loan http://www.wisebread.com/what-to-do-if-you-cant-pay-your-private-student-loan <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/what-to-do-if-you-cant-pay-your-private-student-loan" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/they_have_bills_to_pay.jpg" alt="They have bills to pay" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>While your private student loan seemed like a good idea when you were pursuing a degree, now it might feel like an unbearable weight &mdash; especially if you didn't get the job or paycheck you were hoping for after graduation. If you are struggling to pay your student loans, know that you are not alone: American grads share over $1.48 trillion in student loan debt, with a delinquency rate of 11.2 percent.</p> <p>Private student loans add an extra layer of difficulty for borrowers. While federal student loans offer <a href="http://www.wisebread.com/which-student-loan-repayment-plan-saves-you-the-most?ref=internal" target="_blank">various repayment programs</a> to those struggling to make payments, private loans notoriously have less leeway.</p> <p>Not paying back your student loans is not an option. Not only can defaulting on your student loans hurt your credit score, but it can eventually lead to calls from collection agencies and having your wages garnished. Here are several options to consider instead when you are struggling with your private student loans. (See also: <a href="http://www.wisebread.com/what-really-happens-when-you-dont-pay-your-student-loans?ref=seealso" target="_blank">What Really Happens When You Don't Pay Your Student Loans</a>)</p> <h2>1. Refinance your loans</h2> <p>Are you paying a lot of interest for your student loan? Get quotes from <a href="http://www.wisebread.com/3-private-lenders-that-can-really-save-you-money-on-your-student-loans?ref=internal" target="_blank">private student loan lenders</a> to see if you can land a lower interest rate. Decreasing your interest rate by 1 percent might not save you a lot each month, but it can save you thousands over the life of your loan.</p> <p>If you are really in a pinch financially, and you have exhausted your options, you can refinance your student loans to a longer term. This can dramatically decrease your monthly payment, but it will mean that you are paying more overall over the life of the loan. Consider the long-term effects of refinancing your loan from a 10-year term to a 20-year term before finalizing that decision. (See also: <a href="http://www.wisebread.com/should-you-refinance-your-student-loan?ref=seealso" target="_blank">Should You Refinance Your Student Loan?</a>)</p> <h2>2. Increase your income</h2> <p>Earning more at work can help ease your budget woes. However, getting a bigger paycheck is easier said than done. For employees that have been on the job for a while, ask for a raise or look for opportunities for in-house promotions. Many companies like to hire current employees for higher positions because in the long run, it is more cost effective and timesaving for the company. Don't see a new job listing? Don't let that stop you from asking your employer. They might be too busy to post a new job listing. (See also: <a href="http://www.wisebread.com/how-to-negotiate-a-raise-out-of-the-blue?ref=seealso" target="_blank">How to Negotiate a Raise Out of the Blue</a>)</p> <h2>3. Look for jobs with student loan repayment perks</h2> <p>Many companies are starting to offer student loan repayment options as an employee benefit. Companies like Staples, Fidelity, and Aetna offer this perk, so it might be worth looking at job listings with these companies. (See also: <a href="http://www.wisebread.com/these-17-companies-will-help-you-repay-your-student-loan?ref=seealso" target="_blank">These 17 Companies Will Help You Repay Your Student Loan</a>)</p> <h2>4. Find a side gig</h2> <p>If you can't increase your income through your regular paycheck, try earning money on the side. There are many avenues for earning extra cash through a freelance or side gig; you just have to find the right fit for you and your schedule. Driving for Uber or Lyft, housesitting, or dog walking are all easy ways to earn extra income each month. For those with more specific experience, try freelance writing, social media managing, or virtual assisting. (See also: <a href="http://www.wisebread.com/14-best-side-jobs-for-fast-cash?ref=seealso" target="_blank">14 Best Side Jobs For Fast Cash</a>)</p> <h2>5. Sell unused items</h2> <p>You might have extra money taking up space in your closet or garage. Go on a decluttering mission this weekend and find everything you don't need or want anymore. Sell smaller, valuable items, like a name brand sweater, on eBay. Sell larger items on Craigslist or Offerup. For everything else, sell in a yard sale. People buy junk at yard sales, so don't be surprised if your old towels or comforter set fetch you a few bucks. (See also: <a href="http://www.wisebread.com/12-garage-sale-items-that-sell-like-hotcakes?ref=seealso" target="_blank">12 Garage Sale Items That Sell Like Hotcakes</a>)</p> <h2>6. Get real about your budget</h2> <p>If you can't find room in your budget for your student loan payments, it might be time to get a new budget. Take a hard look at what expenses can be cut. This can be a painful exercise, but if it means being able to stay current with your student loan bills, it is worth it.</p> <p>Cut the fun stuff from your budget first, like coffee runs and shopping trips. Downsize your cellphone and cellphone plan and cancel any monthly subscriptions. This includes magazines, Netflix, gym memberships, and anything else you can live without.</p> <p>If you still cannot afford your student loan payments after cutting out the fun stuff, it may be time to adjust your way of living altogether. As hard as it may be, consider ditching your car with a car payment for an older vehicle that can be bought with cash. Live with a roommate or move back home temporarily while you get ahead on your debt.</p> <p>Paying off private student loan debt is a huge chore and making the sacrifices to do it can seem impossible. However, it is better to live with your parents or a drive around town in a clunker than to be delinquent on your student loans. (See also: <a href="http://www.wisebread.com/5-ways-to-pay-off-your-student-debt-faster?ref=seealso" target="_blank">5 Ways to Pay Off Your Student Debt Faster</a>)</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fwhat-to-do-if-you-cant-pay-your-private-student-loan&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FWhat%2520to%2520Do%2520If%2520You%2520Can%2527t%2520Pay%2520Your%2520Private%2520Student%2520Loan.jpg&amp;description=What%20to%20Do%20If%20You%20Can't%20Pay%20Your%20Private%20Student%20Loan"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/What%20to%20Do%20If%20You%20Can%27t%20Pay%20Your%20Private%20Student%20Loan.jpg" alt="What to Do If You Can't Pay Your Private Student Loan" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/ashley-eneriz">Ashley Eneriz</a> of <a href="http://www.wisebread.com/what-to-do-if-you-cant-pay-your-private-student-loan">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-10"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/this-is-how-student-loan-interest-works">This Is How Student Loan Interest Works</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-ways-to-avoid-vacation-debt">6 Ways to Avoid Vacation Debt</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-things-millennials-can-do-right-now-for-an-early-retirement">8 Things Millennials Can Do Right Now for an Early Retirement</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-sacrifices-that-will-supercharge-your-debt-payoff">8 Sacrifices That Will Supercharge Your Debt Payoff</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/3-private-lenders-that-can-really-save-you-money-on-your-student-loans">3 Private Lenders That Can Really Save You Money on Your Student Loans</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management Education & Training budgeting extra income private student loans refinancing side gigs student loan repayment Mon, 19 Mar 2018 09:30:24 +0000 Ashley Eneriz 2114761 at http://www.wisebread.com How to Pay for College When You Didn't Get a Scholarship http://www.wisebread.com/how-to-pay-for-college-when-you-didnt-get-a-scholarship <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-pay-for-college-when-you-didnt-get-a-scholarship" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/graduation_student_with_money_in_his_hands.jpg" alt="Graduation student with money in his hands" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Before I enrolled in college, I attended several seminars and read several books and articles on the magic of paying for your degree with scholarships. It seemed that there were so many success stories out there, and with around $46 billion of grant and scholarship money awarded each year in the U.S., I figured I could at least snag half off my college bill.</p> <p>One year and over 100 applications later, I only won two local scholarships that totaled $2,500.</p> <p>Sound familiar? If you feel like you can't win the scholarship game, don't despair. There are still other ways to afford your degree.</p> <h2>1. Ask your employer</h2> <p>Your place of employment could have more to offer than a paycheck. Many companies offer tuition reimbursement and employee scholarships, but sometimes you have to ask. If your company does not currently offer any tuition benefits, and you're preparing to apply for college, it may be time to switch jobs to an employer that does.</p> <p>Once you graduate, also be sure to look for companies that offer tuition repayment as part of the benefits package. Many places, including UPS, Staples, and Aetna, offer this bonus to college students or grads. (See also: <a href="http://www.wisebread.com/these-17-companies-will-help-you-repay-your-student-loan?ref=seealso" target="_blank">These 17 Companies Will Help You Repay Your Student Loan</a>)</p> <h2>2. Don't forget about tax benefits</h2> <p>When it comes to tuition, every little bit helps. Tax credits shouldn't be overlooked. The American opportunity credit (AOC) offers student taxpayers or their parents a tax credit of up to $2,500 per tax year, for up to four years. Eligible students must be enrolled in a degree program or pursuing other credible secondary education. The AOC can either be claimed by a student, or a dependent student's parents &mdash; just not by both. And even better, the AOC was not affected by the new tax law.</p> <h2>3. Apply for financial aid</h2> <p>It is crucial to fill out the free application for federal student aid (FAFSA) each year, even if you think your parents make too much money. You never know what type of aid you will qualify for, and the application takes less than an hour to complete.</p> <p>Also, submitting the FAFSA makes you eligible for federal student loans, which have more lenient payback options than private loans. (See also: <a href="http://www.wisebread.com/5-reasons-why-every-student-should-fill-out-the-fafsa?ref=seealso" target="_blank">5 Reasons Why Every Student Should Fill Out the FAFSA</a>)</p> <h2>4. Turn to your local community college</h2> <p>A community college can help you fill the requirements for many general education classes at a fraction of the cost of private or even in-state universities. As long as the credits are transferrable, a university will accept community college transcripts.</p> <p>If you don't live near a community college, try taking online classes through one closest to you. Many times, you'll be able to complete the work of an online class flexibly, so you can turn in assignments late at night or early in the morning before physical classes are even in session. This could also give you more room in your schedule for a part-time job, which will help you stash even more dollars away for school. (See also: <a href="http://www.wisebread.com/6-ways-to-pay-less-money-for-a-college-degree?ref=seealso" target="_blank">6 Ways to Pay Less Money For A College Degree</a>)</p> <h2>5. Don't use education loans or savings for anything else</h2> <p>Just because you have to take out a student loan doesn't mean the money should be used to float your every expense throughout your college career. Use the money only for tuition and other school necessities, like books and course materials. Live frugally for the rest of your needs and expenses. This may mean you don't get to experience dorm life to the fullest, or type your essays on a brand-new laptop, but it will be worth the sacrifice if it means taking out a smaller loan.</p> <p>As a college student, I didn't have to take out student loans, but I also didn't have any money for anything else. I resorted to carpooling, living with my parents, eating homemade lunches, using the computer lab to type papers, working the 4 a.m. Starbucks shift, and borrowing textbooks from the library. It has been eight years since I graduated, and I don't regret going without because it means I don't have student loan debt. (See also: <a href="http://www.wisebread.com/8-money-saving-hacks-every-college-student-should-try?ref=seealso" target="_blank">8 Money-Saving Hacks Every College Student Should Try</a>)</p> <h2>6. Research on-campus job opportunities</h2> <p>An on-campus job can help you pay for college and give you a few nice perks. For example, many schools offer residential advisers free room and board, as well as discounts on meal plans. Working on-campus means that you are able to squeeze work shifts in between classes, maximizing your time to the fullest.</p> <p>I worked as a test proctor in college. My job was to sit in the room with nursing students and make sure no one cheated on their test. My advisers actually encouraged me to bring in my own course work and use the time to study while the test was going on. In a sense, I was paid to study, which I had to do anyway.</p> <h2>7. Pick the right student loan for you</h2> <p>Sometimes taking out a student loan to pay for college is unavoidable. If you have the choice, stick with federal to pay for your college degree rather than taking out private student loans. Many federal loans, like Direct Subsidized Loans, Direct Unsubsidized Loans, and the Federal Perkins loan, do not require you to start making loan payments until after graduation.</p> <p>Also, federal student loan repayment comes with a fixed rate and there are several repayment plans available for those who cannot afford their payments. Private school loans are funded by private lenders, and borrowers do not have the same flexibility that federal borrowers have. (See also: <a href="http://www.wisebread.com/6-questions-to-ask-before-taking-out-student-loans?ref=seealso" target="_blank">6 Questions to Ask Before Taking Out Student Loans</a>)</p> <p>There is no doubt about it; college is expensive. While winning several scholarships to pay for tuition is ideal, it is not a reality for everyone. Instead, wise financial decisions and the right student loan can help you afford your degree.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fhow-to-pay-for-college-when-you-didnt-get-a-scholarship&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FHow%2520to%2520Pay%2520for%2520College%2520When%2520You%2520Didnt%2520Get%2520a%2520Scholarship.jpg&amp;description=How%20to%20Pay%20for%20College%20When%20You%20Didnt%20Get%20a%20Scholarship"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/How%20to%20Pay%20for%20College%20When%20You%20Didnt%20Get%20a%20Scholarship.jpg" alt="How to Pay for College When You Didn't Get a Scholarship" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/ashley-eneriz">Ashley Eneriz</a> of <a href="http://www.wisebread.com/how-to-pay-for-college-when-you-didnt-get-a-scholarship">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-to-do-when-you-cant-afford-your-childs-college-education">What to Do When You Can&#039;t Afford Your Child&#039;s College Education</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-encouraging-truth-about-how-americans-are-covering-the-cost-of-college">The Encouraging Truth About How Americans Are Covering the Cost of College</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-questions-to-ask-before-taking-out-student-loans">6 Questions to Ask Before Taking Out Student Loans</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-to-do-if-you-didnt-save-for-your-childs-college">What to Do If You Didn&#039;t Save for Your Child&#039;s College</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-great-sources-of-financial-aid-for-switching-careers">7 Great Sources of Financial Aid for Switching Careers</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Education & Training community college grants on-campus jobs scholarships student loans tax credits tuition reimbursement Wed, 14 Mar 2018 09:31:15 +0000 Ashley Eneriz 2114259 at http://www.wisebread.com Here's What You Need to Know About 529 ABLE Accounts http://www.wisebread.com/heres-what-you-need-to-know-about-529-able-accounts <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/heres-what-you-need-to-know-about-529-able-accounts" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/little_girl_with_special_needs_enjoy_spending_time_with_mother.jpg" alt="Little girl with special needs enjoy spending time with mother" title="" class="imagecache imagecache-250w" width="250" height="132" /></a> </div> </div> </div> <p>Do you have a child with disabilities? You might benefit from investing in a 529 ABLE account. These tax-advantaged savings accounts let you save money for your child's long- or short-term care without jeopardizing their eligibility for public assistance from the government.</p> <p>Many parents with special needs children may not even know this savings vehicle exists. After all, it wasn't until 2014 that legislation paved the way for the 529 ABLE account. If you're the parent of a child with a disability, here's everything you should know about these tax-advantaged accounts.</p> <h2>A new opportunity</h2> <p>Congress signed the Achieving a Better Life Experience, or ABLE, act into law in 2014. The new law gave families with special needs children the option to save post-tax dollars in a new type of account. These ABLE accounts were designed to give families a way to save extra money <em>in addition to</em> the financial benefits their disabled child was already receiving from private insurers or from government programs such as Social Security and Medicaid.</p> <p>It's a huge positive that families can save in an ABLE plan without losing their eligibility for financial government assistance. Before the act was passed, disabled people who earned more than $700 a month or who had more than $2,000 in assets could lose their eligibility for Medicaid and Social Security assistance.</p> <p>The ABLE Act changed that. Today, families can save up to $100,000 in a 529 ABLE account before their child will lose their extra Social Security benefits. Even if they do save more than $100,000 in an account, their child will still be eligible for financial assistance from Medicaid. The money saved in a 529 ABLE account does not count against that $2,000 asset limit.</p> <h2>How they work</h2> <p>A 529 ABLE account works similar to its cousins, the 529 college savings and prepaid plans. But it does come with some key differences.</p> <p>As with a traditional 529 savings plan, the contributions that you make to an ABLE account are not tax-deductible. But the earnings on those investments will not be taxed as long as you use any money you withdraw from the account for what are known as &quot;qualified disability expenses.&quot; With 529 ABLE accounts, you can withdraw money tax-free for several types of expenses. Qualified disability expenses include money spent on health, education, housing, transportation, legal fees, employment training, and monitoring.</p> <p>In other words, there is more flexibility with a 529 ABLE account. Where there is less flexibility, however, is in eligibility. To be eligible for a 529 ABLE account, individuals must meet specific requirements.</p> <h2>Eligibility requirements</h2> <p>There is only a narrow band of individuals who are eligible for 529 ABLE accounts. Individuals participating must have been diagnosed with a disability before they turned 26 and must have a disability that is expected to last at least 12 consecutive months.</p> <p>Individuals must also already be receiving benefits through the Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI) programs offered through Social Security, or obtain a certificate of disability from a doctor.</p> <p>For the 2018 tax year, individuals can make an annual contribution up to $15,000 into an ABLE account.</p> <p>These accounts are sponsored by individual states. If your state doesn't offer a 529 ABLE account, you can still participate. You are free to sign up for an ABLE account through any state offering one, even if you don't live in that state.</p> <h2>Changes under the Tax Cuts and Jobs Act</h2> <p>In more good news, two key changes that came with President Trump's Tax Cuts and Jobs Act, signed into law late last year, make 529 ABLE accounts even more attractive.</p> <p>The new federal law allows for tax-free rollovers from traditional 529 plans to 529 ABLE accounts. This is a benefit to individuals whose disabilities are diagnosed later in life. Say you've saved money for your child in a traditional 529 plan. When your child turns 16, he or she is diagnosed with a disability. In the past, if you wanted to take your funds from the traditional 529 plan and roll them into an ABLE account, you'd have to pay taxes and a financial penalty. Today, you can rollover funds from a traditional 529 plan into an ABLE account without suffering any financial penalties or paying taxes on the money.</p> <p>The new tax law also allows ABLE account beneficiaries who are employed and earning income through their jobs to make contributions of more than $15,000 each year up to the Federal Poverty Level, as long as they are using their own income to get past that $15,000 mark and not participating in an employer-sponsored retirement plan.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fheres-what-you-need-to-know-about-529-able-accounts&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FHeres%2520What%2520You%2520Need%2520to%2520Know%2520About%2520529%2520ABLE%2520Accounts.jpg&amp;description=Heres%20What%20You%20Need%20to%20Know%20About%20529%20ABLE%20Accounts"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/Heres%20What%20You%20Need%20to%20Know%20About%20529%20ABLE%20Accounts.jpg" alt="Here's What You Need to Know About 529 ABLE Accounts" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/heres-what-you-need-to-know-about-529-able-accounts">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/are-private-schools-worth-the-money-they-demand">Are Private Schools Worth the Money They Demand?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-time-management-skills-that-will-help-your-kid-win-at-school">10 Time-Management Skills That Will Help Your Kid Win at School</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-money-lessons-kids-can-learn-from-the-tooth-fairy">7 Money Lessons Kids Can Learn From the Tooth Fairy</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-fun-games-that-teach-your-kids-about-money">6 Fun Games That Teach Your Kids About Money</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/25-ways-to-entertain-your-child-for-free-or-cheap">25 Ways to Entertain Your Child for Free or Cheap</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Education & Training Family 529 able accounts children disabilities eligibility government assistance medicaid qualified expenses social security special needs Mon, 12 Mar 2018 09:30:21 +0000 Dan Rafter 2114571 at http://www.wisebread.com How to Keep Student Loans From Wrecking Your Retirement http://www.wisebread.com/how-to-keep-student-loans-from-wrecking-your-retirement <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-keep-student-loans-from-wrecking-your-retirement" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/empty_nester.jpg" alt="Empty Nester" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Student loans are not just a burden to young college grads, but to those nearing retirement age as well. Many Americans who have to choose between saving for retirement and paying for a child's college education opt for the latter.</p> <p>That can be a problem. The Consumer Financial Protection Bureau reports that in 2015, $66.7 billion of student loan debt belonged to borrowers age 60 and older. Among them, 40 percent of borrowers over the age of 65 were in default. The vast majority of older Americans with student loan debt &mdash; 73 percent &mdash; borrowed to help fund a child's or grandchild's education.</p> <p>The statistics don't lie; the latest obstacle threatening a comfortable retirement for Americans may very well be student loan debt. (See also: <a href="http://www.wisebread.com/are-you-ruining-your-retirement-by-spoiling-your-kids?ref=seealso" target="_blank">Are You Ruining Your Retirement by Spoiling Your Kids?</a>)</p> <h2>Understanding what's on the line</h2> <p>Understanding just how much a student loan can disrupt your retirement will help you evaluate the decision before signing on the dotted line. The average college student graduates with over $37,000 in student loan debt. Given that tuition costs continue to rise at twice the rate of inflation, loan balances are likely to grow for future classes.</p> <p>Before taking out a student loan for a child or grandchild, consider whether you can realistically repay the loan before entering retirement. Even if you can, understand that you may be sending hundreds of dollars every month toward that debt instead of toward your retirement account. How much will that hurt you in the long run?</p> <p>Whether you co-sign for a student loan or borrow directly for your child, you will be responsible for the entire balance of the loan. If you can't afford to make those payments, and you know you will still be repaying the loan well into retirement, the best decision is not to take out a loan at all. You'd be putting yourself in a position of great financial risk by doing so.</p> <p>If you default on a student loan, things can get even worse. Student loan creditors can garnish your wages, including Social Security benefits. Tax refunds can also be seized to satisfy unpaid balances. Even bankruptcy won't be a good option, as student loans can generally not be discharged. If you find yourself in a position where you're over your head and unable to pay, your outstanding student loan debt can be devastating to your financial wellbeing.</p> <h2>Alternatives to student loan debt</h2> <p>If savings, scholarships, and grant opportunities have all been exhausted, there are still ways to bring down the cost of college for your child and avoid having student loans impact your retirement savings plan. (See also: <a href="http://www.wisebread.com/the-encouraging-truth-about-how-americans-are-covering-the-cost-of-college?ref=seealso" target="_blank">The Encouraging Truth About How Americans Are Covering the Cost of College</a>)</p> <h3>1. Your child can choose cheaper schools</h3> <p>While your child may have their heart set on particular school, they also need to be realistic about how much it will cost to attend. Price should be as much of a deciding factor as the school itself. If your child attends an in-state school or community college, you can greatly minimize or even eliminate the need for student loans altogether.</p> <h3>2. Your child can earn college credit in high school</h3> <p>Advanced Placement (AP) is a program that allows high school students to earn college credits through specialized courses. There may be certain prerequisites to signing up for these advanced classes, and you'll have to pay a $94 fee for the exam. Additional costs may also apply for certain study materials.</p> <p>If your child scores well on their AP exams, it could save them from having to take certain introductory courses in college &mdash; which in turn could slash thousands from their tuition bill. AP exams are scored on a scale of 1&ndash;5. Different colleges have their own criteria for assessing how many credits your child's test score is worth (or if they'll accept the AP credits at all).</p> <h3>3. Have your child commute from home</h3> <p>Room and board is a large portion of the overall college experience and expense. And while your kid may be eager to set out on their own, again, they need to be realistic about what's affordable, and so do you. Sabotaging your retirement savings to pay for your child's room and board is simply not a smart financial move.</p> <p>Attending a college close to home, or even finding a school that offers some of its courses online, will allow your child to continue living at home and to commute to class. This way, they (and you) can better focus on paying tuition.</p> <p>If they have their heart set on living on campus, taking a Resident Assistant position can allow your child to live in the dorms for free. They will have added responsibility as an RA, but the benefits can be worth it.</p> <h3>4. Your child can find a job</h3> <p>Just because your child is attending school doesn't mean they can't find a part-job to help cover education costs. While it may be a burden to hold down a job while pursuing a degree, make sure your child understands how much more of a burden it will be for either of you to carry student loan debt decades into the future. Companies like UPS and Starbucks offer tuition assistance benefits that can help defer college costs. (See also: <a href="http://www.wisebread.com/these-17-companies-will-help-you-repay-your-student-loan?ref=seealso" target="_blank">These 17 Companies Will Help You Repay Your Student Loan</a>)</p> <p>Even a full-time position is not out of the question. Students working full-time may take longer to complete a degree, but a few more years of study can be a worthwhile trade-off for your child to graduate debt-free.</p> <h2>Dealing with student loans in retirement</h2> <p>For those still repaying student loans into or nearing retirement, the burden can be tremendous. But you do have options.</p> <p>Federal student loans offer <a href="https://studentaid.ed.gov/sa/repay-loans/understand/plans/income-driven" target="_blank">income-based repayment programs</a>. A deferment or forbearance can be requested to conserve cash if you're experiencing a temporary financial hurdle. Consolidating loans can also help you adjust interest rates or convert your loan into one that offers more repayment assistance options. Visit the <a href="https://studentaid.ed.gov/sa/repay-loans" target="_blank">Federal Student Aid</a> website to find more information about the repayment programs that are available to you. (See also: <a href="http://www.wisebread.com/4-things-you-need-to-know-about-deferring-student-loans?ref=seealso" target="_blank">4 Things You Need to Know About Deferring Student Loans</a>)</p> <p>Private student loans are a different matter. Very few private student lenders offer any form of repayment plan. If you are struggling to make payments, your best bet is to contact your lender directly and discuss what options may be available to you. If you have co-signed a private student loan, you may be able to request to be removed if the primary borrower has a good payment history and solid credit. By passing the baton to your adult child, you can return your focus to your retirement.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fhow-to-keep-student-loans-from-wrecking-your-retirement&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FHow%2520to%2520Keep%2520Student%2520Loans%2520From%2520Wrecking%2520Your%2520Retirement.jpg&amp;description=How%20to%20Keep%20Student%20Loans%20From%20Wrecking%20Your%20Retirement"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/How%20to%20Keep%20Student%20Loans%20From%20Wrecking%20Your%20Retirement.jpg" alt="How to Keep Student Loans From Wrecking Your Retirement" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/toni-husbands">Toni Husbands</a> of <a href="http://www.wisebread.com/how-to-keep-student-loans-from-wrecking-your-retirement">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-4"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-encouraging-truth-about-how-americans-are-covering-the-cost-of-college">The Encouraging Truth About How Americans Are Covering the Cost of College</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/my-kid-got-accepted-to-an-expensive-private-college-now-what">My Kid Got Accepted to an Expensive Private College — Now What?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-things-financial-aid-might-not-cover">6 Things Financial Aid Might Not Cover</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-of-the-fastest-ways-to-go-broke-in-retirement">4 of the Fastest Ways to Go Broke in Retirement</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/this-is-how-student-loan-interest-works">This Is How Student Loan Interest Works</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Education & Training Retirement adult children borrowing money co-signer college costs debt retirement savings room and board student loans tuition Fri, 23 Feb 2018 10:00:06 +0000 Toni Husbands 2106618 at http://www.wisebread.com Best Money Tips: The Best Sites for Online Courses http://www.wisebread.com/best-money-tips-the-best-sites-for-online-courses <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/best-money-tips-the-best-sites-for-online-courses" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_smiling_laptop_675974978.jpg" alt="Woman taking online courses" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Welcome to Wise Bread's <a href="http://www.wisebread.com/topic/best-money-tips">Best Money Tips</a> Roundup! Today we found articles on the best sites for online courses, how having a roommate may (or may not) save you money, and how to pack light for winter travel.</p> <h2>Top 5 Articles</h2> <p><a href="https://www.dumblittleman.com/best-websites-for-online-learning/">10 Best Sites for Free and Paid Online Courses</a> &mdash; These days, you have so many options for online learning that finding the best platform for you can be overwhelming. This list is a good place to start if you need help narrowing down your options. [Dumb Little Man]</p> <p><a href="https://everythingfinanceblog.com/23659/roommate-really-save-money.html">Will Moving in With a Roommate Really Save You Money?</a> &mdash; Having a roommate and splitting everyday living costs can help you save money, but there are situations where living with another person can cause more headache than it's worth. [Everything Finance]</p> <p><a href="http://frugalbeautiful.com/blog/winter-travel-pack-light-clothes-heavy/">Winter Travel: How To Pack Light When Clothes Are Heavy</a> &mdash; Black leggings are must-brings for winter travel. They don't take up much space, they match everything, and the fleece variety will keep you warm on its own or as a layering piece. [Frugal Beautiful]</p> <p><a href="https://www.popsugar.com/smart-living/Best-Things-Life-42302100">These 22 Small Moments in Life Should NEVER Go Unappreciated</a> &mdash; Don't take the small moments for granted &mdash; they are what makes life wonderful! [PopSugar Smart Living]</p> <p><a href="https://www.flippingheck.com/how-your-workspace-reflects-your-health-and-lifestyle/">How Your Workspace Reflects Your Health And Lifestyle</a> &mdash; Considering the many hours you probably spend at your workspace each day, it's important to set it up to promote a healthy lifestyle. [Flipping Heck]</p> <h2>Other Essential Reading</h2> <p><a href="https://www.csmonitor.com/USA/Politics/2018/0212/Fiscal-stimulus-is-back.-So-are-bigger-deficits">Fiscal stimulus is back. So are bigger deficits.</a> &mdash; Business is booming and unemployment rates are near rock-bottom, but economists and investors worry that the federal government is adding stimulus at the wrong time in the economic cycle. [The Christian Science Monitor]</p> <p><a href="https://www.lifeoptimizer.org/2018/02/10/being-intentional/">The Importance of Being Intentional</a> &mdash; Our natural tendency is to choose the easy way. If you want to live up to your full potential, you need to think about and take deliberate actions. [Life Optimizer]</p> <p><a href="https://zenhabits.net/expansion/">Powerful Courageousness: Practices to Expand Yourself &amp; Your Gift</a> &mdash; Your range shrinks when you only do the work you love when conditions are perfect. [zen habits]</p> <p><a href="http://www.punchdebtintheface.com/live-richer-without-rich/">How to Live Richer Without Being Rich</a> &mdash; You don't have to be rich to live like you're rich. [Punch Debt]</p> <p><a href="http://www.thefrugalgirl.com/2018/02/tuesday-tip-turn-your-glass-containers-upside-down/">Turn your glass containers upside down.</a> &mdash; When you put leftovers in a bottom drawer in your fridge, turn the food containers upside down so you can see the contents more easily. [The Frugal Girl]</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/amy-lu">Amy Lu</a> of <a href="http://www.wisebread.com/best-money-tips-the-best-sites-for-online-courses">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-tips-for-going-back-to-school-as-an-adult">8 Tips for Going Back to School as an Adult</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/get-smart-about-money-with-these-18-free-online-courses">Get Smart About Money With These 18 Free Online Courses</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-certifications-that-add-big-to-your-salary">7 Certifications That Add Big $$ to Your Salary</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/this-is-how-student-loan-interest-works">This Is How Student Loan Interest Works</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/my-kid-got-accepted-to-an-expensive-private-college-now-what">My Kid Got Accepted to an Expensive Private College — Now What?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Education & Training best money tips online courses Wed, 14 Feb 2018 09:30:09 +0000 Amy Lu 2103787 at http://www.wisebread.com 6 Financial Skills to Master Before You Graduate http://www.wisebread.com/6-financial-skills-to-master-before-you-graduate <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-financial-skills-to-master-before-you-graduate" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/graduation_college_school_degree_successful_concept.jpg" alt="Graduation College School Degree Successful Concept" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>With graduation only months away, you can finally see light at the end of the tunnel. After four (or more) long years of study, you're well-prepared to embrace adulthood, independence, and professional success.</p> <p>But are you <em>really</em>? Before you don that cap and gown, make sure you know the ABCs of personal money management. It could be the most important course you'll ever take. Here are the financial skills to master before you graduate.</p> <h2>1. Basic budgeting</h2> <p>If you can't build and stick to a basic budget, you risk having your life divided into a series of stressful 30-day cycles. Bills may be late, savings an afterthought, and credit cards could become an absolute necessity. Avoid this bleak fate. Set up a practice budget using <a href="http://www.wisebread.com/a-comprehensive-guide-to-the-envelope-system" target="_blank">the envelope system</a> or get acquainted with online money management tools like Mint. (See also: <a href="http://www.wisebread.com/build-your-first-budget-in-5-easy-steps?ref=seealso" target="_blank">Build Your First Budget in 5 Easy Steps</a>)</p> <h2>2. Living within your means</h2> <p>Consistently spending more than you make is the cornerstone of bad financial decision-making. You'll have no surplus money to invest. You'll rack up credit card debt (harming your credit scores in the process). And, you'll live in a constant state of stress. Create a realistic budget, stick to it, and don't pad your lifestyle with easy credit. (See also: <a href="http://www.wisebread.com/how-to-escape-the-paycheck-to-paycheck-cycle?ref=seealso" target="_blank">How to Escape the Paycheck-to-Paycheck Cycle</a>)</p> <h2>3. Paying your bills on time</h2> <p>Credit scores affect everything from interest and insurance rates to employment. And once your score is damaged, it can take years for it to recover. Protect your credit scores, avoid late fees and penalties, and keep the bill collectors away by paying your bills on time, every time. It's a fundamental part of being an adult. (See also: <a href="http://www.wisebread.com/heres-what-to-do-if-you-cant-pay-your-bills-on-time?ref=seealso" target="_blank">Here's What to Do if You Can't Pay Your Bills On Time</a>)</p> <h2>4. Using credit responsibly</h2> <p>Ready for my best Dad impression? &quot;Credit is a tool, not a toy.&quot; But Dad is right. Using credit responsibly means controlling impulses, only charging what you can pay off at the end of <em>every</em> month, and not confusing your credit limit with your budget. Seriously &mdash; credit abuse destroys the financial lives of countless families every year. Choose to be different. (See also: <a href="http://www.wisebread.com/12-habits-of-highly-responsible-credit-card-users?ref=seealso" target="_blank">12 Habits of Highly Responsible Credit Card Users</a>)</p> <h2>5. Negotiating</h2> <p>The unsung hero of personal finance, negotiating is a skill that can save you thousands of dollars over your lifetime. Imagine paying full price for every car and every house you buy. Or worse, imagine not knowing how to respectfully push back on the first salary offer a potential employer makes. Launch into adulthood from a position of power; know <a href="http://www.wisebread.com/how-to-negotiate-with-confidence-and-strike-the-best-deal?ref=internal" target="_blank">how to negotiate with confidence</a>.</p> <h2>6. Setting goals and saving for the future</h2> <p>Financial skills are a means to an end. Determine what kind of relationship you want to have with money, exactly what you want to achieve financially, and what level of discipline and attention it will take to turn your goals into your reality. Save with that plan in mind &mdash; and save without interruption. In short, apply the same level of dogged determination to your financial life as you applied to your education. The rewards will be just as great. (See also: <a href="http://www.wisebread.com/5-money-moves-to-make-the-moment-you-graduate?ref=seealso" target="_blank">5 Money Moves to Make the Moment You Graduate</a>)</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F6-financial-skills-to-master-before-you-graduate&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F6%2520Financial%2520Skills%2520to%2520Master%2520Before%2520You%2520Graduate.jpg&amp;description=6%20Financial%20Skills%20to%20Master%20Before%20You%20Graduate"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/6%20Financial%20Skills%20to%20Master%20Before%20You%20Graduate.jpg" alt="6 Financial Skills to Master Before You Graduate" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/kentin-waits">Kentin Waits</a> of <a href="http://www.wisebread.com/6-financial-skills-to-master-before-you-graduate">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/heres-how-late-starters-can-save-for-their-kids-education">Here&#039;s How Late Starters Can Save for Their Kids&#039; Education</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-money-moves-to-make-the-moment-you-graduate">5 Money Moves to Make the Moment You Graduate</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-ways-to-make-the-most-of-your-student-loan-grace-period">4 Ways to Make the Most of Your Student Loan Grace Period</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-money-moves-every-new-college-student-should-make">7 Money Moves Every New College Student Should Make</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/css-is-one-source-of-college-financial-aid-you-cant-afford-to-overlook">CSS Is One Source of College Financial Aid You Can&#039;t Afford to Overlook</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Education & Training budgeting college credit graduation money management negotiating paying bills personal finance skills students young adults Mon, 12 Feb 2018 09:00:06 +0000 Kentin Waits 2090877 at http://www.wisebread.com How to Apply to Lots of Colleges Without Going Broke http://www.wisebread.com/how-to-apply-to-lots-of-colleges-without-going-broke <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-apply-to-lots-of-colleges-without-going-broke" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/happy_student_in_class.jpg" alt="Happy student in class" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>The cost of college is a major expense for any family pursuing higher education, but it's important to note that the money suck begins way before the first tuition bill. It starts with the college-bound teenager's application process, and it can put a sizable dent in your overall budget if the student is casting a wide net. You can defray this expense, however, with these money-saving tips that make the college-application process more affordable. (See also: <a href="http://www.wisebread.com/the-encouraging-truth-about-how-americans-are-covering-the-cost-of-college?ref=seealso" target="_blank">The Encouraging Truth About How Americans Are Covering the Cost of College</a>)</p> <h2>Consult a guidance counselor for advice before beginning the process</h2> <p>Your best resource for navigating the college-selection and application process is your student's guidance counselor. College admissions is a huge part of their job, and they have plenty of tips and tricks on how to get through it in a cost-efficient manner.</p> <h2>Narrow down your choices</h2> <p>Apply to fewer schools to save more money. Jason Patel, founder of college-prep company Transizion suggests applying to two reach schools, at least three target schools, and three safety schools to keep the total application fees low. If you've researched these choices well enough to determine that your student is a good fit, you shouldn't have to apply to any more than that. (See also: <a href="http://www.wisebread.com/how-college-applicants-can-tour-scores-of-campuses-for-15-or-less?ref=seealso" target="_blank">How College Applicants Can Tour Scores of Campuses for $15 or Less</a>)</p> <h2>Plan ahead to avoid errors and last-minute panic</h2> <p>College applications are more affordable when you plan early.</p> <p>&quot;Good planning leads to good decisions, says Patel. &quot;Most counselors and professionals recommend that students apply to five to eight colleges, so this means these five to eight colleges should be chosen early. Late discoveries lead to errors in the application and an eventual spreadsheet approach that forces students to apply to 15 colleges they're not sure of.&quot;</p> <h2>Search for no-fee colleges and universities</h2> <p>This'll make your wallet happy: There are no-fee colleges and universities out there (good ones, too), and you can find the best of the best on this ranking of the <a href="https://www.niche.com/colleges/search/colleges-with-no-application-fee/" target="_blank">2018 Best Colleges with No Application Fee</a> in America. That doesn't mean you should whittle down your choices to only these schools, however. Talk with your student about his or her goals and what they want from the college experience, and also be realistic about the schools by which your child has a chance of being accepted. If some of the no-fee colleges fit onto that list, great. If not, put them out of your mind and move on. Having your child choose a college they don't necessarily want to go to will cost you much more than that waived application fee if they want to transfer a year later.</p> <h2>Apply for fee waivers</h2> <p>Fee waivers are available for low-income families. For instance, students who qualify for free or reduced lunch can have their application fees waived at most colleges. Some students also can take the SAT or SAT Subject Tests using a test-fee waiver that will let them <a href="https://collegereadiness.collegeboard.org/about/benefits/college-application-fee-waivers" target="_blank">apply to more than 2,000 colleges for free</a>.</p> <h2>Apply during fee-free weeks</h2> <p>Some schools offer fee-free application weeks, which is generally available statewide in participating states. Some North Carolina colleges and universities waive their application fees during the second week of November, while their Minnesota counterparts waive for one week in late October. If you know in which state you're student is applying, search online to see if it has a no-fee week to offer before submitting. (See also: <a href="http://www.wisebread.com/12-surprising-ways-to-get-more-college-financial-aid?ref=seealso" target="_blank">12 Surprising Ways to Get More College Financial Aid</a>)</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fhow-to-apply-to-lots-of-colleges-without-going-broke&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FHow%2520to%2520Apply%2520to%2520Lots%2520of%2520Colleges%2520Without%2520Going%2520Broke.jpg&amp;description=How%20to%20Apply%20to%20Lots%20of%20Colleges%20Without%20Going%20Broke"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/How%20to%20Apply%20to%20Lots%20of%20Colleges%20Without%20Going%20Broke.jpg" alt="How to Apply to Lots of Colleges Without Going Broke" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/how-to-apply-to-lots-of-colleges-without-going-broke">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-surprising-ways-to-get-more-college-financial-aid">12 Surprising Ways to Get More College Financial Aid</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-ways-new-grads-can-save-on-moving-costs">6 Ways New Grads Can Save on Moving Costs</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-tips-for-going-back-to-school-as-an-adult">8 Tips for Going Back to School as an Adult</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-financial-skills-to-master-before-you-graduate">6 Financial Skills to Master Before You Graduate</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-college-expenses-you-arent-saving-for">9 College Expenses You Aren&#039;t Saving For</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Budgeting Education & Training applying to college college college applications continuing education graduation how to afford college Fri, 26 Jan 2018 09:30:10 +0000 Mikey Rox 2093194 at http://www.wisebread.com 7 Things to Consider Before Paying for an MBA http://www.wisebread.com/7-things-to-consider-before-paying-for-an-mba <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-things-to-consider-before-paying-for-an-mba" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/young_woman_studying_in_classroom.jpg" alt="Young woman studying in classroom" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>A Master's in Business Administration can add millions of dollars to your lifetime income. According to Financial Times, alumni from the highest-rated MBA programs earned an average $142,000 just three years after completing their degrees &mdash; more than double the salary of their pre-MBA careers.</p> <p>While the potential of earning a better income is surely enticing, there are several factors to consider before committing to a graduate business degree. MBA programs aren't cheap, after all. Let's break down key criteria to decide if an MBA is a worthwhile pursuit.</p> <h2>1. GMAT test</h2> <p>Just like you need an SAT score to be admitted to undergraduate college, you need a Graduate Management Admission Test (GMAT) score to pursue an MBA. According to the Graduate Management Admission Council, nearly nine out of 10 new enrollments at the top 50 U.S. full-time MBA programs were made using a GMAT score.</p> <p>Depending on your target business schools, you may have to achieve a minimum score on this test. Getting to that minimum score is going to cost you prep time and money. At the very least, you'll need to cover the $250 test fee, but you may also have to pay for test prep services or additional materials that can bring up your total GMAT costs to thousands of dollars. Taking a free diagnostic exam from <a href="https://www.mba.com/us/the-gmat-exam/prepare-for-the-gmat-exam/test-prep-materials/free-gmat-prep-software.aspx" target="_blank">MBA.com</a> can help you determine how close you are to the required minimum score (if any) and what you need to do to achieve that score.</p> <h2>2. Type of MBA</h2> <p>To better meet the needs of its students, most business schools offer part-time, full-time, and executive versions of a business graduate program. While the full-time program allows you to fully immerse yourself in the MBA experience, a part-time program enables you to keep your current job and minimize student loans. An executive MBA (or EMBA) requires applicants to have several years of work experience, which will vary depending on the school. EMBA students typically have to attend classes on weekends.</p> <p>However, some schools offer additional types of MBA programs. For example, the Shidler College of Business in Hawaii offers a Global MBA with a China focus in which you complete an eight-month study abroad period at a partner school in China.</p> <h2>3. Work experience</h2> <p>Business schools vary widely in the amount of work experience they require from applicants. Still, 89 percent of full-time MBA students have an average 4.3 years of work experience, according to U.S. News &amp; World Report. For part-time and executive degree students, average work experience is even longer at 6.4 and 13.3 years, respectively.</p> <p>This doesn't mean that pursuing an MBA fresh off completing your undergraduate degree isn't possible. It just means that you may be limiting your options by applying to a business school too early. Keep in mind that taking the GMAT fresh out of undergrad is often a good idea, while your study habits are still intact, because your score will be valid for the next five years. Adding some years of relevant professional experience to your resume will strengthen your MBA application.</p> <h2>4. Target industry and salary</h2> <p>Let's face it: You are considering an MBA so you can increase your earning potential. Just keep in mind that your target salary goes hand in hand with your target industry. While an MBA can give your salary a boost, the actual pay bump varies per industry.</p> <p>Using data from over 6,600 MBA alumni working in the U.S., MBA.com reports the average annual salary of a graduate in the technology industry and a graduate in the government/nonprofit industry at $135,000 and $95,000, respectively. The job level of the position also affects the salary of MBA alumni: In the finance/accounting sector, a graduate would earn an average $55,000 per year in an entry-level position and an average $165,000 in a senior-level position. Knowing your earning potential can provide you a better picture of the potential return on investment of an MBA.</p> <h2>5. Job placement rate</h2> <p>It's one thing to know your earning potential; it's another thing to actually land the job paying that target salary. Make sure to ask about the average period of unemployment after graduation for graduates of your target MBA programs, the job placement services available during and after the completion of your degree, and the list of companies actively recruiting interns and full-time hires from those schools. While no school can guarantee you 100 percent job placement after you complete your MBA, some schools do a better job than others at setting you up for success. Choose one that best suits the unique characteristics of your desired career path.</p> <h2>6. Alternatives</h2> <p>Some industries have different types of programs or certifications that are comparable &mdash; and sometimes more valuable &mdash; than an MBA. In the finance sector, a Chartered Financial Analyst (CFA) credential is a recognized investment management designation valued by many employers. Other examples of self-study certifications coveted by employers are the Financial Risk Manager (FRM), General Securities Representative Exam (GSRE), Certified Financial Planner (CFP), and Associate of the Society of Actuaries (ASA).</p> <p>A professional designation is an alternative pathway to unlock career growth potential that may be similar to an MBA. (See also: <a href="http://www.wisebread.com/7-certifications-that-add-big-to-your-salary?ref=seealso" target="_blank">7 Certifications That Add Big $$ to Your Salary</a>)</p> <h2>7. Existing student loans</h2> <p>It takes money to make money, but there's always a limit. A 2016 Poets&amp;Quants study showed that MBA graduates had six-figure student debt from at least 13 prominent business schools, up from only two schools in 2011. Even some public universities offering MBA programs have a high sticker price: Six of the 25 schools with the highest average loans were public.</p> <p>Assuming a $100,000 student loan balance on a standard 10-year repayment plan with a 6.8 percent interest rate, you would pay an estimated $1,151 every month. If you already have a student loan balance, you should consider waiting until you reduce that financial burden before taking on additional student debt. (See also: <a href="http://www.wisebread.com/these-17-companies-will-help-you-repay-your-student-loan?ref=seealso" target="_blank">These 17 Companies Will Help You Repay Your Student Loan</a>)</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F7-things-to-consider-before-paying-for-an-mba&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F7%2520Things%2520to%2520Consider%2520Before%2520Paying%2520for%2520an%2520MBA.jpg&amp;description=7%20Things%20to%20Consider%20Before%20Paying%20for%20an%20MBA"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/7%20Things%20to%20Consider%20Before%20Paying%20for%20an%20MBA.jpg" alt="7 Things to Consider Before Paying for an MBA" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/damian-davila">Damian Davila</a> of <a href="http://www.wisebread.com/7-things-to-consider-before-paying-for-an-mba">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/my-kid-got-accepted-to-an-expensive-private-college-now-what">My Kid Got Accepted to an Expensive Private College — Now What?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/this-is-how-student-loan-interest-works">This Is How Student Loan Interest Works</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-keep-student-loans-from-wrecking-your-retirement">How to Keep Student Loans From Wrecking Your Retirement</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-manage-student-loans-on-a-low-income">How to Manage Student Loans On a Low Income</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-really-happens-when-you-dont-pay-your-student-loans">What Really Happens When You Don&#039;t Pay Your Student Loans</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Education & Training business school career continuing education executives master's of business administration MBA student loans Mon, 22 Jan 2018 09:30:05 +0000 Damian Davila 2086755 at http://www.wisebread.com What Really Happens When You Don't Pay Your Student Loans http://www.wisebread.com/what-really-happens-when-you-dont-pay-your-student-loans <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/what-really-happens-when-you-dont-pay-your-student-loans" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/graduation_hat_and_figurine_on_coins.jpg" alt="Graduation hat and figurine on coins" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Student loan figures are staggering, and as the amount borrowed rises, so too do defaults. Failing to pay your student loan can cause serious fallout. Unlike other types of debt, student loans cannot be discharged during bankruptcy. Defaulting is nothing to be taken lightly.</p> <p>According to Student Loan Hero, college students across the country are graduating with an average $37,172 in student loan debt. And overall, Americans owe around $1.48 trillion in student loans. Unfortunately, 11 percent of the 44 million student loan borrowers have a loan in default.</p> <h2>Student loan default defined</h2> <p>How long can you miss payments before you're classified as in default? The answer depends on who's done the lending.</p> <ul> <li> <p>The Federal Student Aid Office defines a default on a Direct Loan or Federal Family Funded Educational Loan as failure to pay in more than 270 days (nine months).</p> </li> <li> <p>For private student loans, the definition of a default is stricter. You're usually considered in default if you've missed payments for three months, but some lenders brand you in default after just one missed payment.</p> </li> </ul> <p>Your loan could also be automatically categorized as in default if you or your co-signer dies or files for bankruptcy, no matter whether you're making timely payments or not. (See also: <a href="http://www.wisebread.com/6-questions-to-ask-before-taking-out-student-loans?ref=seealso" target="_blank">6 Questions to Ask Before Taking Out Student Loans</a>)</p> <h2>What can happen if your student loan defaults?</h2> <p>Student loans are among the most dangerous debt available in our society today. I say dangerous because there are few options to extricate yourself from a student loan if you fall on hard times. Mind you, federally subsidized loans offer multiple options for forbearance or deferment, which is a plus. But some private loans only permit a 12-month reprieve over the life of the loan. (See also: <a href="http://www.wisebread.com/4-things-you-need-to-know-about-deferring-student-loans?ref=seealso" target="_blank">4 Things You Need to Know About Deferring Student Loans</a>)</p> <p>If you can't get a forbearance or still find yourself unable to pay after a deferment, and you end up in default, brace for some significant financial consequences.</p> <h3>Wage garnishment</h3> <p>Student loan collection agencies can legally garnish your wages without a lawsuit. And they can take not only the amount that was initially due, but also penalties that can dramatically balloon your outstanding debt. Now you've also got to worry about overdrawing your bank account, exacerbating the financial stresses that caused you to stop paying your student loan in the first place.</p> <h3>Ineligibility for repayment assistance</h3> <p>Once you're in default, your options for help begin to narrow. You'll be ineligible for repayment assistance programs, meaning you can no longer apply for a deferment or forbearance. Gradual payment plans will be off limits.</p> <h3>Suspended license</h3> <p>In 22 states, including my home state of Illinois, professional licenses or your driver's license can be suspended if you fail to make student loan payments and the loan defaults. It will be much more difficult to earn an income without your professional certification or driver's license.</p> <h3>Credit issues</h3> <p>Obviously, not paying your student loans will implode your credit. Some basic financial transactions, from getting a cellphone plan to qualifying for a mortgage, will be more expensive and difficult. It could take months or years to rebuild your credit record.</p> <h3>Tax refunds seized</h3> <p>Your tax refund can be withheld to satisfy the outstanding balance on defaulted student loans. Federal benefits like Social Security can also be garnished.</p> <h2>You can't outrun your debt</h2> <p>Student loans don't just go away if you ignore them. They are difficult to discharge and federal government collection agencies have tremendous legal authority to take your funds if you neglect to keep your payments current.</p> <p>Some Americans dodge their student loan obligations by relocating overseas. This is not a solution. Late fees, penalties, and interest continue to accrue, and if life changes and you ever decide to repatriate, the problems will only be worse.</p> <h2>Avoiding student loan default status</h2> <p>The best defense against student loan default is to be proactive. Contact your student loan servicer as soon as your payment troubles begin. Inquire about payment assistance options available to borrowers experiencing difficulty repaying. (See also: <a href="http://www.wisebread.com/8-surprising-ways-to-pay-off-your-student-loans?ref=seealso" target="_blank">8 Surprising Ways to Pay Off Your Student Loans</a>)</p> <p>Avoiding the problem with your student loan is the absolute worst plan of action. In general, student loan borrowers who are struggling with their payments should consider:</p> <ul> <li> <p>Requesting a forbearance or deferment.</p> </li> <li> <p>Modifying the loan through <a href="https://studentaid.ed.gov/sa/repay-loans/consolidation" target="_blank">The Direct Loan Consolidation</a> program.</p> </li> <li> <p>Refinancing to a nonprofit student loan program to lower the interest rate.</p> </li> <li> <p>Revising the terms of the loan repayment.</p> </li> <li> <p>Applying to discharge the student loan.</p> </li> </ul> <p>You do have options, but you've got to recognize the problem <em>before </em>you default. Take action early and you can head off a lot of the issues that can turn your inability to pay into a disaster with long-running consequences.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fwhat-really-happens-when-you-dont-pay-your-student-loans&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FWhat%2520Really%2520Happens%2520When%2520You%2520Dont%2520Pay%2520Your%2520Student%2520Loans.jpg&amp;description=What%20Really%20Happens%20When%20You%20Dont%20Pay%20Your%20Student%20Loans"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/What%20Really%20Happens%20When%20You%20Dont%20Pay%20Your%20Student%20Loans.jpg" alt="What Really Happens When You Don't Pay Your Student Loans" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/toni-husbands">Toni Husbands</a> of <a href="http://www.wisebread.com/what-really-happens-when-you-dont-pay-your-student-loans">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-7"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-valuable-rights-you-might-lose-when-you-refinance-student-loans">8 Valuable Rights You Might Lose When You Refinance Student Loans</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-things-you-need-to-know-about-deferring-student-loans">4 Things You Need to Know About Deferring Student Loans</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-is-student-loan-forbearance-anyway">What Is Student Loan Forbearance, Anyway?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-ways-to-pay-off-your-student-debt-faster">5 Ways to Pay Off Your Student Debt Faster</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/dont-get-trapped-by-these-higher-education-scams">Don&#039;t Get Trapped by These Higher Education Scams</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Education & Training debt default deferment forbearance garnished wages licenses loan dodgers student loans suspensions Thu, 18 Jan 2018 09:30:10 +0000 Toni Husbands 2086606 at http://www.wisebread.com