student loans http://www.wisebread.com/taxonomy/term/5885/all en-US 6 Money Moves to Make When You Move Back Home With Your Parents http://www.wisebread.com/6-money-moves-to-make-when-you-move-back-home-with-your-parents <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-money-moves-to-make-when-you-move-back-home-with-your-parents" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/mother_and_daughter_000065344549.jpg" alt="Woman making money moves after moving back in with parents" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Somewhere between 30% and 50% of Millennials are currently <a href="http://time.com/4108515/millennials-live-at-home-parents/">living with their parents</a>. While there are a lot of different ways of thinking about this statistic, most of the folks I know who have had to move back home don't feel great about it.</p> <p>No matter how you frame it, moving home often feels like failure, at least at some point in the process. But if you make the right financial moves from the beginning, you ensure that the process is as painless as possible, and you set yourself up for financial success in the future.</p> <p>Whether you're moving home because you lost a job, can't find a job, or your job doesn't pay a living wage, take these steps as soon as you can. (See also:&nbsp;<a href="http://www.wisebread.com/7-ways-millennials-are-better-with-money-than-you-are?ref=seealso" target="_blank">7 Ways Millennials Are Better With Money Than You Are</a>)</p> <h2>1. Know the Financial Expectations</h2> <p>If possible, sit down with your parents before you move home and talk about your mutual financial expectations. Do your parents want you to pay rent? To buy your own groceries or contribute to a household budget? Will you pay any of the utilities while you're living there?</p> <p>Most people who move home continue to pay the bills that pertain only to them. This includes things like covering your own phone bill, health insurance premiums, and other, similar bills. Some people, though, find that going on their parents' cell phone plan, for instance, is cheaper than having their own.</p> <p>The point is to hash out these things before you move home and write them down. That way, everyone will be on the same page and it will be easy to ensure that everyone is holding up their end of the bargain. This also allows you to keep some measure of independence and feel more dignified about the whole thing, because you will be able to pay for as much of your own stuff as possible.</p> <h2>2. Set Goals and Make Plans</h2> <p>Moving home can feel like a dead end, but it doesn't have to actually be one. Most young people don't want to live with their parents long-term, which can be a relief both for you and your folks. Before you move in, or soon after doing so, decide how you want to proceed.</p> <p>This will depend a lot on your current situation. If you're carrying debt, you might want to focus on paying that off before you move out. Or you may want to land a job that pays more, or finish your education.</p> <p>Having goals will make you feel better about moving home, because you will be able to see your move as a step forward in your overall financial life, rather than a move backwards.</p> <p>Goals alone are not enough, though. Once you know where you're going, draw up a blueprint for how to get there. Decide which classes you're going to take, start making extra payments on that debt, or begin applying for jobs that meet your criteria.</p> <p>Not only will this empower you and move you forward, but it will help your parents see that you are a responsible adult, even though you moved back into your childhood bedroom.</p> <h2>3. Agree on Boundaries</h2> <p>While it will be important for you and your folks to hash through all sorts of boundaries, the ones I'm thinking of here are financial in nature. Unless you're in truly dire straights, decide that you will not borrow money from your parents. And even if they won't take your money for rent, find ways to contribute to the household. You can buy food, pay for meals out, purchase cleaning supplies and clean, etc.</p> <p>Let your parents know what boundaries you're setting. Let them know that you plan to clean the bathrooms every week, that you're available to run errands on the weekends, or that you don't need anything more from them than what has already been agreed upon.</p> <h2>4. Get a Job</h2> <p>This won't apply to folks moving home because they are underemployed but, for everyone else, this is not a free ride. The goal of moving home is to get yourself into a better financial place for later on, so you should be working.</p> <p>Even if the only job you can get is the one you had during high school, take it. Since you're at home, you probably don't need as much money as you would otherwise, and some income is always better than none. Working will also make you feel better about yourself, and will show both your parents and future employers that you are willing to do whatever it takes to move forward.</p> <h2>5. Pay Off Debt</h2> <p>If you have debt, start paying it off as soon as you can. Moving home can save you quite a bit of money and, instead of putting this toward your own pleasure, take steps to make your financial future brighter. Even if you only have student loans, start putting more towards them every month. A couple of extra payments now can mean huge savings in interest later!</p> <p>Paying off debt should probably be your first goal upon moving home. Make a concerted effort to pay off as much as possible, and you will feel better about your decision to not live on your own. Even if you have a crappy job, you should be able to make some extra payments when you're saving money on things like rent.</p> <h2>6. Start Saving</h2> <p>Don't have debt? Great! Start saving. If you're not spending money on rent, you should be putting it towards something useful, and an emergency fund (or a move-out-of-my-parents'-house fund) is a great way to feel good about your decision to move home.</p> <p>If you play your cards right, you can use your time living at home to get a nice little nest egg. That way, you'll be able to cover all of your moving expenses when you move out, and you'll have enough left over for other things that come up (like car problems, paying for a wedding, etc.).</p> <p>Moving home doesn't have to be a death sentence. Even if you feel like you've failed financially, these moves can set you up for future success. Take the long view and you will be happier with your decision.</p> <p><em>Why did you move home? What financial moves did you make when you did?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/sarah-winfrey">Sarah Winfrey</a> of <a href="http://www.wisebread.com/6-money-moves-to-make-when-you-move-back-home-with-your-parents">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/my-2016-budget-challenge-everything-breaks">My 2016 Budget Challenge: Everything Breaks</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-2016-budget-challenge-job-creation">My 2016 Budget Challenge: Job Creation</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/my-2016-budget-challenge-affording-education">My 2016 Budget Challenge: Affording Education</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-expect-when-youre-expecting-a-huge-credit-card-bill">What to Expect When You&#039;re Expecting a Huge Credit Card Bill</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/flashback-friday-the-95-best-ways-to-get-fit-for-free">Flashback Friday: The 95 Best Ways to Get Fit for Free</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Frugal Living bills debt housing millennials moving back with parents saving money student loans Tue, 19 Apr 2016 09:30:29 +0000 Sarah Winfrey 1689032 at http://www.wisebread.com 12 Easy Ways to Avoid Student Loan Debt http://www.wisebread.com/12-easy-ways-to-avoid-student-loan-debt <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/12-easy-ways-to-avoid-student-loan-debt" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock_000070282971_Large.jpg" alt="avoiding student loan debt" title="" class="imagecache imagecache-250w" width="250" height="126" /></a> </div> </div> </div> <p>College awaits, but the shared dilemma all students face is agonizing. Should you go to college and let loans pick up the tab for the ever-rising cost of tuition? Or, join the workforce directly out of high school and risk earning far less than a college graduate? Decisions, decisions.</p> <p>According to the National Center for Education Statistics (NCES), with a bachelor's degree, <a href="https://nces.ed.gov/fastfacts/display.asp?id=77">you'll make 62% more</a> than you will with a high school diploma. Or, with a bachelor's you'll make $48,500 a year, versus $30,000 a year with a high school diploma.</p> <p>The high school grad who doesn't have a big chunk of change must weigh the cost of incurring debt against their projected earnings, and many have opted to risk the debt. Nationwide, <a href="http://www.marketwatch.com/story/every-second-americans-get-buried-under-another-3055-in-student-loan-debt-2015-06-10">student loan debt is rising</a> at the rate of $2,726 per second, with a cumulative tab at about $1.3 trillion.</p> <p>But why does debt have to be the theme of a post-graduate life? You <em>can </em>go to college and avoid debt. Here's how.</p> <h2>1. Grants</h2> <p>Unlike scholarships, grants are based on your Expected Family Contribution (EFC) and financial need. Fill out your free application for Federal Student Aid (FAFSA) as early as you can. Grants from schools go to those who need them the most and those who apply for aid the earliest.</p> <p>You may be eligible for the Pell Grant, which the federal government awards to 10 million students a year. You may also be eligible for state grants: the Federal Supplemental Educational Opportunity Grant (FSEOG), the Teacher Education Assistance for College and Higher Education (TEACH) grant, as well as grants based on your ethnicity.</p> <h2>2. Consider Crowd-Sourcing</h2> <p>There are now websites specifically set up to facilitate crowd-sourced funding for students to avoid loans, or to pay off loans. You'll do volunteer work in exchange for crowd-sourced funds, for example. Several options here are <a href="http://www.zerobound.com/">zerobound</a> and <a href="http://www.sponsorchange.org/">SponsorChange</a>.</p> <h2>3. Score Scholarships</h2> <p>Have you been a good student? Have you done extracurricular activities, excelled in sports, or are you willing to prove you're worthy of a scholarship? There are so many of these available that you can bet there's something for you &mdash; whether it's a $500 <a href="http://www.excel-university.com/scholarship/">accounting scholarship</a> or a $1,000 <a href="http://www.bulkofficesupply.com/scholarships-in-new-york">teaching, art, or entrepreneurial scholarship</a>. Sites such as <a href="http://www.fastweb.com/">Fastweb</a> and <a href="https://www.scholarships.com/">Scholarships.com</a> offer scholarship databases and information. The key here is to look into as many as you can and work hard at getting them.</p> <h2>4. Check Out Work-Study Options</h2> <p>If you qualify for federal financial aid, you may qualify for the Federal Work-Study Program. Work-study will gain you experience in your field of choice and will pay you to go to school, whether you're a part-time or full-time student. These positions get snatched up quickly, so check with your school's financial aid office as soon as your enrollment application is accepted.</p> <h2>5. Work a Part-Time Gig</h2> <p>Although this is likely to prolong the amount of time you spend in college, it will also lessen your debt. Consider looking into what the <a href="http://www.wisebread.com/find-a-side-gig-at-these-4-best-micro-jobs-sites">gig economy</a> has to offer. You could <a href="http://www.wisebread.com/how-to-earn-extra-money-driving-for-uber-or-lyft">drive for Uber or Lyft</a>, you could do freelance writing, accounting, clean houses, or you could be a virtual assistant through <a href="https://www.zirtual.com/">Zirtual</a>. Gigs offer flexibility, options, and a safety cushion. There are cons, such as lack of benefits, but at least you can make your own schedule. (See also: <a href="http://www.wisebread.com/100-ways-to-make-more-money-this-year?ref=seealso">100+ Ways to Make More Money This Year</a>)</p> <h2>6. Talk to Your Employer About Education Benefits</h2> <p>If you're employed, your employer may be able to pay for your college education. Talk to your employer, because the IRS allows them to write off any reimbursement they make to you for tuition, no matter how much it is. They will be especially inclined to do so if your field of study is directly related to your job. If you're unemployed, or your employer doesn't offer reimbursement, apply for a job that does. (See also: <a href="http://www.wisebread.com/15-ways-to-pay-back-student-loans-faster?ref=seealso">15 Ways to Pay Back Student Loans Faster</a>)</p> <h2>7. Consider Community College</h2> <p>You'll be earning experience you can later apply toward your bachelor's at a community college. And on average, tuition and fees for <a href="http://trends.collegeboard.org/college-pricing/figures-tables/tuition-and-fees-and-room-and-board-over-time-2005-06-2015-16">community college are $3,435</a>, while they're $32,405 for university. According to the NCES, an associate's degree only earns you an average of about $11,500 less per year than a bachelor's.</p> <p>If you choose to go for a bachelor's degree, you'll be in school longer, but by the time you're done with community college, you'll be prepared for university. You may also be able to apply some of your community college credits toward earning your bachelor's. You may also have more money saved up for university tuition than you did when you got out of high school.</p> <p>There are also <a href="http://www.communitycollegereview.com/blog/community-college-scholarships">community college scholarships</a>. They can be merit-based, need-based, or entirely unique. Some schools, such as Metropolitan Community College in Kansas City, offer an automatic, merit-based scholarship for the student with a high GPA seeking to transfer to a university.</p> <h2>8. Live at Home During College</h2> <p>Are you a high school graduate considering a college near your hometown? Most likely, your parents would be happy to let you to live with them if you're paying your way through college. If they are willing to put you up rent-free, you're good to go. You could work a side job at the same time. College isn't about partying and living in a dorm. Sure, it happens, but it's not a requirement. Living at home will help you concentrate on studying and saving money.</p> <h2>9. Forgo College Until You're Financially Ready</h2> <p>Be committed for the long-term when it comes to your career, and your life. The staggering <a href="http://www.wisebread.com/5-sobering-facts-about-student-loan-debt">facts about student loan debt</a> put it into perspective. If you end up with debt, you could end up living with your parents after graduating, as 27% of graduates do. You could end up falling behind on your loan repayments, as 35% did in 2012. On average, it could end up taking you 20 years to pay off your loan.</p> <p>Commit to going to college after you've saved enough money, and your life will be a lot easier once you graduate &mdash; you'll be free to pursue what you want, instead of taking a low-paying job right out of college because you just need the money.</p> <h2>10. Talk to an Academic Advisor</h2> <p>Graduate as fast as you can by planning out your degree. This will minimize money you spend. In other words, decide what you want to major in before jumping into general classes, and find the fastest path to graduation.</p> <h2>11. Pay in Installments</h2> <p>Speak with the financial aid office at the college you want to attend about tuition installment plans. You have to be certain you can pay, but this will make it more like paying rent, which is easier than forking over lump sums. If you're budgeting wisely, living at home, and working part-time, meeting installments shouldn't be a problem.</p> <h2>12. Stick With Federal Loans Only</h2> <p>The Federal Direct Loan offers the most options for income-based repayment, including <a href="https://studentaid.ed.gov/sa/about/announcements/repaye">REPAYE</a>, which fixes your payment at 10% of your discretionary income and forgives your debt after 20 years. The Direct Loan also offers debt forgiveness if you're working in a public service field and have made 120 payments without defaulting. Your interest rate will be fixed, unlike a private loan, which sticks you with a variable rate. Pay on the loan as you go through school, and make the biggest payments so you can to avoid paying too much on interest. When doing your taxes, write off interest payments. And be sure to use tax returns and other windfalls to make large payments.</p> <p><em>Any other easy ways to avoid student loan debt? Share with us in the comments!</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/daniel-matthews">Daniel Matthews</a> of <a href="http://www.wisebread.com/12-easy-ways-to-avoid-student-loan-debt">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/5-sobering-facts-about-student-loan-debt">5 Sobering Facts About 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-ways-to-get-student-loan-debt-forgiveness">8 Ways to Get Student Loan Debt Forgiveness</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/student-loans-how-to-make-post-college-decisions">Student Loans: How to Make Post-College Decisions</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/share-your-thoughts-consolidating-student-loans">Share Your Thoughts: Consolidating 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/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 college college debt debt management saving for college student loan debt student loans Tue, 12 Apr 2016 09:30:33 +0000 Daniel Matthews 1688980 at http://www.wisebread.com 5 Most Common Tax Mistakes Made by College Grads http://www.wisebread.com/5-most-common-tax-mistakes-made-by-college-grads <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-most-common-tax-mistakes-made-by-college-grads" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/000059339990.jpg" alt="College grads making common tax mistakes" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Attention grads: While you may be done with college, you aren't off the hook from major assignments. One of those major assignments is filing your tax return, and this is one assignment deadline that you don't want to miss.</p> <p>This year, Monday April 18th is the deadline to file your federal taxes. (Residents of Maine and Massachusetts get an extra day!) With time running out, it&rsquo;s important to file your return correctly the first time around. Be on the lookout for the five most common tax mistakes made by college grads.</p> <h2>1. Not Claiming Education Credits</h2> <p>According to a 2014 study from H&amp;R Block, only two-thirds of Americans eligible for <a href="http://www.wisebread.com/dont-skip-these-8-tax-breaks-for-students">tax breaks for students</a> actually claim them! Within those tax breaks, the American Opportunity Credit and the Lifetime Learning Credit stand out because they can reduce your tax bill by up to $2,500 and $2,000, respectively.</p> <p>Unlike other tax deductions, the American Opportunity Credit can still get you a refund even when you don't owe any federal income tax. If the American Opportunity Tax Credit brings the amount you owe to zero, you can have 40% of the remaining amount of the credit (<a href="http://www.irs.gov/Individuals/AOTC">up to $1,000</a>) refunded to you.</p> <p>While the American Opportunity Tax Credit requires you to not have finished the first four years of higher education at the beginning of the tax year, the Lifetime Learning Credit doesn't require students to be working toward a degree. You're eligible to claim this credit as long as you're taking at least one class.</p> <p>Bonus: If you're taking a sabbatical from your recent graduation and are eligible to be claimed as a dependent by your parents, they can claim these credits in their own return.</p> <p>File <a href="http://www.irs.gov/pub/irs-pdf/f8863.pdf">Form 8863</a> with your federal return to claim the American Opportunity and Lifetime Learning Credits.</p> <h2>2. Not Filing Taxes When Abroad</h2> <p>Talking about sabbaticals, you still need to check with Uncle Sam every year during tax season even when you're abroad. Your worldwide income is subject to U.S. income tax, no matter where you live.</p> <p>The good news is that when you expect to get a refund or not to owe any federal taxes, you can take advantage of the <a href="https://www.irs.gov/Individuals/International-Taxpayers/U.S.-Citizens-and-Resident-Aliens-Abroad---Automatic-2-Month-Extension-of-Time-to-File">automatic two-month extension</a> to file your return. However, if you believe that you will owe federal taxes, then file by the regular deadline (April 15 most years) to avoid paying applicable interest charges or penalties.</p> <h2>3. Forgetting About Moving Expenses</h2> <p>Chances are that your first job after graduation will require you to move. No matter whether you move away from your college dorm, parent's home, or own rental, double check how far away your new job location is from your old residence. If the distance is <a href="https://www.irs.gov/uac/Moving-Expense-Deduction">at least 50 miles</a>, then the IRS allows you itemize several moving expenses, including:</p> <ul> <li>Transportation and storage of household goods and personal effects within any period of 30 days in a rows after date of move;<br /> &nbsp;</li> <li>Insurance for those household goods and personal effects before delivered to your new home;<br /> &nbsp;</li> <li>Out-of-pocket expenses for gas and oil or mileage at 23 cents a mile, in case you drive for the move; and<br /> &nbsp;</li> <li>Parking fees and tolls.</li> </ul> <p>Use <a href="https://www.irs.gov/pub/irs-pdf/f3903.pdf">Form 3903</a> to figure out whether or not you can deduct your moving expenses and what is your allowable moving expense deduction.</p> <h2>4. Withholding Too Much in Taxes</h2> <p>Whether you graduate in the spring, summer, or fall, you would expect to be employed fewer than 245 days (about eight months) during the current calendar year. In that case, you can ask your employer to use the <a href="https://www.irs.gov/publications/p505/ch01.html#en_US_2016_publink1000194430">part-year withholding method</a> so that less tax is withheld from each of your paychecks.</p> <p>IRS Publication 505 states that you must ask your employer in writing to use this method. In your letter, make sure to include these three items:</p> <ul> <li>Date of your last day of work for any prior employer during the current calendar year;<br /> &nbsp;</li> <li>Statement that you don't expect to be employed more than 245 days during the current calendar year; and<br /> &nbsp;</li> <li>Statement that you're using the calendar year as your tax year.</li> </ul> <p>If your employer approves your request, the HR department will use the regular percentage method tables from Publication 15 with adjustments for your part-year employment. This is the best way to maximize those first-year checks. Remember that you don't earn interest on refunds!</p> <h2>5. Miscalculating Student Loan Interest</h2> <p>Mom and Dad are always willing to lend you a helping hand and may have footed your student loan payments until you landed your first post-graduation job. In that case, and as long as you're not claimed as a dependent by your parents, you can deduct up to $2,500 of interest paid on qualifying student loans by them from your income subject to tax every year. Just make sure to let your parents know that they won't be able to deduct those interest payments from their own return.</p> <p>Even when you're making student loan payments yourself, you can still deduct up to $2,500 of the interest payments. To be eligible to claim this deduction in 2016, your modified adjusted gross income (MAGI) must be less than $80,000 if single, head of household, or qualifying widow(er), or $160,000 if married filing a joint return.</p> <p>To figure out your student loan interest deduction, check Form 1098-E from the institution that receives interest payments made on your behalf or paid by you. Your interest deduction is gradually reduced when your MAGI is between $65,000 and $80,000 ($130,000 and $160,000 if you file a joint return).</p> <p>Let's imagine that you paid $2,600 on interest for a qualified student loan throughout 2015. Assuming you file your return as single, here's how much you could deduct based on your 2015's MAGI:</p> <ul> <li><strong>MAGI is $50,000</strong>: You can deduct the full $2,500.<br /> &nbsp;</li> <li><strong>MAGI is $70,000:</strong> You need to phase out your student loan interest deduction using rules from <a href="http://www.irs.gov/publications/p970/ch04.html">IRS Publication 970</a>: $2,500 x ($70,00-$65,000)/$15,000 = $833.33. Your eligible student loan interest deduction would be $2,500 - $833.33 = $1,666.67.<br /> &nbsp;</li> <li><strong>MAGI is $85,000</strong>: You can't deduct any student loan interest payments.</li> </ul> <p><em>Have you made any of these tax mistakes?</em></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/5-most-common-tax-mistakes-made-by-college-grads">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/dont-skip-these-8-tax-breaks-for-students">Don&#039;t Skip These 8 Tax Breaks for Students</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-important-tax-changes-for-2016">5 Important Tax Changes for 2016</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/20-amazing-outrageous-and-just-plain-weird-tax-deductions">20 amazing, outrageous and just plain weird tax deductions</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/the-easiest-way-to-avoid-a-tax-audit">The Easiest Way to Avoid a Tax Audit</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/8-tax-tricks-to-try-if-youre-stuck-with-student-loans">8 Tax Tricks to Try if You&#039;re Stuck With Student Loans</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Education & Training Taxes abroad college grads deductions IRS moving expenses student loans students Tue, 12 Apr 2016 09:00:13 +0000 Damian Davila 1687443 at http://www.wisebread.com You've Defaulted on Your Loan. Now What? http://www.wisebread.com/youve-defaulted-on-your-loan-now-what <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/youve-defaulted-on-your-loan-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/woman_stressed_bills_000080184545.jpg" alt="Woman figuring out what to do after loan defaults" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You never planned on missing those mortgage payments or falling behind on your student loan obligations. But maybe you lost a job, or maybe you didn't land that higher-paying position you imagined when you first took out your loans.</p> <p>Now, you're in default &mdash; behind on your payments. You've received warning letters from your creditors, and collection agencies are leaving messages on your voicemail. What can you do?</p> <p>There are steps you can take to dig your way out of default. None of them are pleasant, but if you're willing to work, you can stop the calls from collection agencies, pay back what you owe, and move on to better financial times.</p> <h2>When Are You in Default?</h2> <p>There's a difference between being late on your loan payments and in default. Official default varies according to loan. You're considered in <a href="https://www.consumer.ftc.gov/articles/0194-trouble-paying-your-mortgage">default on your mortgage</a> payment if you're more than 30 days late. You're not officially in <a href="https://studentaid.ed.gov/sa/repay-loans/default">default on your student loan</a> payments until you're 270 days late.</p> <p>Being in default can be costly. Your lender will start charging late fees, and your credit score will plummet by at least 100 points.</p> <p>If you miss too many mortgage payments, your lender will eventually begin the foreclosure process, which could end up with you losing your home. If you go into default on your federal student loans, the consequences can be equally severe: The government could begin garnishing your wages, automatically deducting up to 15% of your paycheck to recover what you owe. The government can even <em>sue </em>you for what you owe. You can't even discharge your federal student loan debt through bankruptcy.</p> <p>And no matter what type of loan on which you default, you'll face additional fees charged by the collection agencies tasked with forcing you to pay up.</p> <h2>What Can You Do?</h2> <p>It's obvious, then, that being in default is bad news. But what can you do to alleviate your financial suffering if you've already fallen into default?</p> <h3>Talk to Your Creditors</h3> <p>The first step, no matter what debt you are facing, is to call your lender. Yes, that's not an easy call to make. But your lender might offer solutions to your debt problems. Your mortgage lender might offer to lower your interest rate to make your monthly payments more affordable. It might even offer a modification, in which it changes the terms of your loan so that you end up with a payment that fits more comfortably in your budget.</p> <p>The lender behind your student loan might offer you a debt-consolidation program, in which all of your loans are consolidated into one monthly payment that you can afford.</p> <h3>Don't Ignore It</h3> <p>If you don't call, and if you try to ignore your debt, the problem will only grow. Don't expect your creditors to forget about you. They'll simply keep adding to the fees they're charging you. At the same time, your credit score will continue to drop.</p> <p>If you're in default on a federal student loan, you might qualify for the Federal Loan Rehabilitation Program. This is a one-time chance to remove the default from your federal student loans from your credit reports and to start making your payments over again with a clean slate.</p> <p>Call your student-loan lender to request this program. Once you are in rehabilitation, if you make nine on-time payments within a 10-month period on your federal student loans, your default status will disappear from your credit reports. This will be a big help to your credit score. You can then work with your lender to select the right repayment plan for you, hopefully leaving you with a monthly payment that you can afford.</p> <p>This option isn't available on other loans on which you've defaulted, of course. And if you can't work out a repayment plan with these lenders, then you'll have to face the consequences. If you default on your mortgage, this means potentially losing your home. If you default on your auto loan, your creditors can repossess your auto loan.</p> <h2>Rebuild Your Credit</h2> <p>After these consequences happen? Your next move is to rehabilitate your credit score. This is an important step: You'll need a strong credit score to qualify for credit cards and future loans. Lenders today consider a FICO credit score of 740 or higher to be a good one. If your score is too low, lenders will either deny your requests for loans or charge you high interest rates.</p> <p>Repairing damaged credit isn't complicated, but it does take time. Make all of our monthly payments on time. Pay down your credit card debt &mdash; but don't close credit card accounts that you've paid off and no longer use. Doing so reduces the amount of credit available to you and will cause your score to fall. (See also: <a href="http://www.wisebread.com/what-are-secured-credit-cards?ref=seealso">How Secured Credit Cards Can Rebuild Your Credit</a>)</p> <p>You'll have to be patient here. It can take months, a year, or longer of paying your bills on time and slashing your credit card debt to repair your credit score. The effort, though, is worth it. It's not until your credit score is a healthy one that you can truly say that you've put your loan default behind you.</p> <p><em>Have you ever defaulted on a loan? How'd you bounce back?</em></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/youve-defaulted-on-your-loan-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-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-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-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/15-surprising-ways-bad-credit-can-hurt-you">15 Surprising Ways Bad Credit Can Hurt You</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/5-things-most-likely-to-give-you-lousy-credit">5 Things Most Likely to Give You Lousy Credit</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-easy-ways-to-raise-your-credit-score-this-year">7 Easy Ways to Raise Your Credit Score This Year</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/how-to-botch-up-then-peddle-back-to-good-credit">How to Botch Up, Then Peddle Back to Good Credit</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance building credit credit score default late payments mortgages owing money student loans Wed, 06 Apr 2016 10:00:12 +0000 Dan Rafter 1683676 at http://www.wisebread.com 8 Tax Tricks to Try if You're Stuck With Student Loans http://www.wisebread.com/8-tax-tricks-to-try-if-youre-stuck-with-student-loans <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/8-tax-tricks-to-try-if-youre-stuck-with-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/college_grad_cash_000049202136.jpg" alt="New grad stuck with student loans trying tax tricks " title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>When you're buried in student loan debt, it doesn't seem fair to be paying taxes. That's why it's important to get as much as you can back with your tax returns. Take advantage of deductions and credits, and if you're fortunate enough to be able to do so, use your returns to pay down a big chunk of your debt. Here's what you should be looking for while filling out your return.</p> <h2>1. Deduct Interest Paid</h2> <p>You can deduct the interest you pay on your debt. At least this way you recoup some of what you spent.</p> <p>You'll file the deduction as an adjustment to income. The maximum amount you can deduct is $2,500. If you've paid more than $600 in interest in the past year, you should receive form 1098-E from your lender. Box #1 will tell you how much interest you paid.</p> <p>If you paid less than $600, you'll have to check records to see how much to deduct. There's an income ceiling &mdash; after you make $80,000 a year, you're exempt. See the <a href="https://www.irs.gov/taxtopics/tc456.html">IRS page</a> on this topic.</p> <p>Are you still in school? I recommend not deferring your interest payment. If you do defer, your lender simply tacks that interest onto the principal of your loan. Then, you end up paying interest on the interest.</p> <h2>2. Deduct Tuition and Fees</h2> <p>This deduction adjusts the amount of income on which you're taxed. It's good for up to $4,000 per year. If you're a dependent on someone else's tax return or you are married and filing separately, you don't qualify. Like the interest deduction, if you earn a certain amount, you're exempt. Also, if you want to claim either of the education tax credits (see &quot;Stay in School&quot; below), you can't claim the <a href="https://www.taxslayer.com/support/knowledgebasearticle187.aspx">Tuition and Fees Deduction</a>.</p> <h2>3. Get the Earned Income Tax Credit</h2> <p>If you qualify for it, get it. The EITC, or EIC, is for those of us with low income. Surprisingly, only about 80% of workers who qualify for the credit claim it. If you're married, don't file separately &mdash; this will disqualify you. If you're single, to get this credit you have to make less than $14,820 in a year. If you're married and/or have kids the <a href="http://www.efile.com/what-is-the-earned-income-tax-credit-eitc-eic-eligibility-schedule-calculator/">qualification ceiling goes up</a>.</p> <h2>4. Take on Freelance Work</h2> <p>Not only will freelancing earn you more money towards paying off your debt, you'll also be able to write off a number of expenses. These deductions include work materials, such as a laptop or tablet you use exclusively for freelance writing. You can write off meals and snacks you eat in the course of your workday. You can also write off expenses related directly and indirectly to the space you use for work. Yes it's a hassle, but make sure to document your expenses if you want to qualify for deductions.</p> <h2>5. Stay in School</h2> <p>Is graduation in sight but you're nervous about your post-graduate plans? You may want to stay in school. Here's the logic behind this: College students can be eligible for some great <a href="http://www.businessinsider.com/four-major-student-tax-breaks-2013-1">tax breaks</a>:</p> <ul> <li><em>American Opportunity Credit</em> &mdash; Up to $2,500 for tuition, fees, books, and other equipment<br /> &nbsp;</li> <li><em>Lifetime Learning Credit</em> &mdash; Up to $2,000 for education-related expenses</li> </ul> <p>You can only claim one of these credits. To get the American Opportunity Credit, you have to be at least a part-time student, and you can only claim it for the first four years of college. It's refundable by up to $1,000, meaning you could see that money go right back into your pocket.</p> <p>The Lifetime Learning Credit applies to the student who wants to continue for more than four years, or go to graduate school.</p> <p>Combined with the <a href="http://www.wisebread.com/dont-skip-these-8-tax-breaks-for-students" target="_blank">student loan interest deduction</a>, tax credits can save you a nice chunk of change to apply towards paying off your loans. Work a freelance job at the same time, get the freelancer deductions, and now you're talking tax strategy. But know you can't make more than $80,000 a year to get the American Opportunity Credit, and no more than $60,000 to get the Lifetime Learning Credit.</p> <h2>6. Look Into the Business Deduction for Work-Related Education</h2> <p>Here's a scenario. You're a writer and you're going to school to get a degree in English with some sort of writing emphasis. On the side, you do freelance writing to make a little extra cash. You can deduct your education expenses.</p> <p>Or, your employer can pay for your education and write it off on their taxes. Your degree has to go toward continuing in your employment field, and it can't be a degree toward meeting your employer's minimum educational requirements.</p> <p>Even if you're on a leave of absence from work, you can <a href="https://www.irs.gov/taxtopics/tc513.html">still deduct educational expenses</a>.</p> <h2>7. Paying for Child Care? The Child and Dependent Care Credit</h2> <p>You can get a credit of up to $3,000 for one child/dependent, or $6,000 for two children/dependents, per year. You have to be employed or seeking employment. If you're a full-time student, you qualify as being employed. Your income will determine your credit amount, but the nice thing is there is no income ceiling. You must provide your child care provider's information, as they must be a qualifying provider (not your spouse or one of your older kids). The <a href="http://www.taxcreditsforworkingfamilies.org/child-and-dependent-care-tax-credit/">Child and Dependent Care Tax Credit</a> is a nice boost, and combined with the other credits listed here, will definitely help you out come tax time.</p> <h2>8. Get Free Tax Prep</h2> <p>All of this is a lot to take in, and doing your own taxes can be frustrating, especially if you're pressed for resources. Is there a community college in your area? Under the IRS VITA program, low to moderate-income Americans can get tax help from volunteers at community colleges and other locations. Of course there are qualifications you have to meet, and materials you have to bring. You qualify if:</p> <ul> <li>You make $54,000 a year or less<br /> &nbsp;</li> <li>You're elderly or incapable of preparing on your own taxes due to disability<br /> &nbsp;</li> <li>You speak limited English</li> </ul> <p>The IRS page on this topic will provide you with a tool for finding the <a href="https://www.irs.gov/Individuals/Free-Tax-Return-Preparation-for-You-by-Volunteers">closest VITA tax-preparer</a>, and info on <a href="https://www.irs.gov/Individuals/Checklist-for-Free-Tax-Return-Preparation">what to bring</a>.</p> <p>Happy tax prep!</p> <p><em>Have you taken advantage of these tax breaks for students?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/daniel-matthews">Daniel Matthews</a> of <a href="http://www.wisebread.com/8-tax-tricks-to-try-if-youre-stuck-with-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-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/a-better-way-to-rank-americas-colleges">A Better Way to Rank America&#039;s Colleges</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/when-should-you-start-saving-for-your-child-s-education">When Should You Start Saving for Your Child’s Education?</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/12-easy-ways-to-avoid-student-loan-debt">12 Easy Ways to Avoid 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/5-most-common-tax-mistakes-made-by-college-grads">5 Most Common Tax Mistakes Made by College Grads</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/the-9-best-state-529-college-savings-plans">The 9 Best State 529 College Savings Plans</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Education & Training Taxes college dependents interest student loans tax breaks tax deductions tuition Mon, 04 Apr 2016 09:30:34 +0000 Daniel Matthews 1683568 at http://www.wisebread.com Don't Get Trapped by These Higher Education Scams http://www.wisebread.com/dont-get-trapped-by-these-higher-education-scams <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/dont-get-trapped-by-these-higher-education-scams" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/000066354223.jpg" alt="Learning not to get trapped by higher education scams" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Television and radio are inundated with for-profit post secondary educational institutions peddling degree and career programs, many of which do not lead to gainful employment. Schemes like these are ripping off taxpayers and leaving students with heavy debt loads &mdash; as opposed to an improved quality of life.</p> <p>In the March 14, 2014 press release, the Obama Administration announced that it will enforce new regulations to <a href="http://www.ed.gov/news/press-releases/obama-administration-takes-action-protect-americans-predatory-poor-performing-career-colleges">improve higher-education programs</a>, especially at for-profit colleges that have not done well by their students. Here's how you can avoid those traps altogether. (See also: <a href="http://www.wisebread.com/5-sobering-facts-about-student-loan-debt">5 Sobering Facts About Student Loan Debt</a>)</p> <h2>1. Don&rsquo;t Let Prestigious School Names Deter You</h2> <p>Depending on the program, the majority of schools have relaxed admissions standards for their certificate programs. So, you may want to consider completing a certificate program to prove yourself and receive recommendations before applying to a two-year or four-year degree program. Even Harvard offers certificate programs that anyone can take. The per class cost is higher, but course materials are the same and some classes are taught by some of the same professors.</p> <h2>2. Don't Wait for the Government to Protect You</h2> <p>Start by protecting yourself. Accept that there are no shortcuts and that it may be more challenging for you to attain your goals and commit to doing it.</p> <h2>3. Beware of Ads That Mention Financial Aid</h2> <p>Financial aid is available at <em>any </em>two-year or more <a href="http://ope.ed.gov/accreditation/">accredited institution</a>. Overt messages about the availability of financial aid are meant to help close the sale rather than inform you of the opportunity.</p> <h2>4. Take Your Time Commitment Into Consideration</h2> <p>High dropout rates are among the factors associated with predatory education. Are you seeking a two-year associate degree, four-year bachelor's degree, vocational diploma, or certificate? Research your desired field of study, preferably one in growing demand according to the U.S. Department of Education, and seek a program at a college or university with a long history and solid reputation. These days, colleges and universities across the country offer two-year degree and certificate programs that can be obtained online.</p> <p><em>Have you been zinged by a higher ed scam? </em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/qiana-chavaia">Qiana Chavaia</a> of <a href="http://www.wisebread.com/dont-get-trapped-by-these-higher-education-scams">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/12-easy-ways-to-avoid-student-loan-debt">12 Easy Ways to Avoid 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-ways-college-students-can-save-money-before-class-starts">8 Ways College Students Can Save Money Before Class Starts</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-tax-tricks-to-try-if-youre-stuck-with-student-loans">8 Tax Tricks to Try if You&#039;re Stuck With 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/8-ways-to-get-student-loan-debt-forgiveness">8 Ways to Get Student Loan Debt Forgiveness</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> Personal Finance Education & Training college debt degrees education traps predatory student loans Fri, 12 Feb 2016 11:00:05 +0000 Qiana Chavaia 1654017 at http://www.wisebread.com 9 Ways Money Does Buy Happiness http://www.wisebread.com/9-ways-money-does-buy-happiness <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/9-ways-money-does-buy-happiness" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/happy_woman_smiling_000057527868.jpg" alt="Woman learning ways money does buy happiness" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Whenever someone tells me that money can't buy happiness, I am often tempted to insist they give me all of their money as a way to test this theory. (See also: <a href="http://www.wisebread.com/6-ways-money-really-can-buy-happiness?ref=seealso">6 Ways Money Really Can Buy Happiness</a>)</p> <p>Research abounds on the &quot;Can money buy happiness?&quot; question, and there is evidence on both sides. It seems that true happiness can come from deep personal connections and life experiences rather than material goods. But there's also information showing that people on the lowest end of the income scale are vulnerable to depression and other mental health problems.</p> <p>Here's a look at some of the research indicating that money does indeed play a role in making people happier.</p> <h2>1. You're Less Likely to Suffer From Depression</h2> <p>A 2012 report from Gallup revealed that people in poverty are more likely to suffer from health problems, with depression being the most common. About 30.9% of poor people said they have been <a href="http://www.gallup.com/poll/158417/poverty-comes-depression-illness.aspx">diagnosed with depression</a> at some point, compared to about 15.8% (half as many!) for those not in poverty.</p> <h2>2. Your Kids Brains Will Develop Better</h2> <p>PBS reported in June on the growing body of evidence supporting the idea that growing up in poverty can have a long-term impact on children's cognitive development. In the most extreme cases, children endure &quot;toxic stress&quot; that is shown to actually chemically alter their brains.</p> <h2>3. You Can Afford an Education</h2> <p>A 2012 study by Pew and the University of Virginia found a connection between happiness and obtaining a college degree. A broad education, researchers concluded, can lead to a richer and more fulfilling life, as well as greater earning opportunities.</p> <h2>4. You'll Avoid Student Loans</h2> <p>There's been a lot written about the impact of student loans on young people, and there's evidence that the crushing debt can actually be detrimental to happiness. An article published in the journal Social Science and Medicine concluded that student loan debt was related to &quot;poorer psychological functioning&quot; among young adults.</p> <h2>5. You Can Mentally Savor Life</h2> <p>When you have money, you don't need to focus as much attention on acquiring it in order to meet your basic needs. This frees up your mind to actually savor the experiences of life, according to a 2010 article in Scientific American. The article concluded that &quot;...a person's ability to savor experiences predicts their degree of happiness.&quot;</p> <h2>6. You're &quot;Buffered&quot; From Sadness</h2> <p>A recent paper in the journal Social Psychological and Personality Science concluded that there may not be a direct connection between money and happiness, <em>per se</em>. But, the authors said there was strong evidence that money prevented sadness. The study concluded that people with money can more easily &quot;buffer&quot; themselves against stressful events.</p> <h2>7. You'll Be Free to Spend Money on Others</h2> <p>When you barely have enough to support yourself, you're likely not thinking about giving back to others. But being generous with your money is a path to happiness, according to a Harvard study titled &quot;Using Money to Benefit Others Pays Off.&quot; In the study, researchers gave money to students to spend on either themselves or others by the end of the day. &quot;People who had been assigned to spend the money on someone else reported feeling [a] happier mood over the course of the day than those assigned to spend the money on themselves,&quot; the authors wrote.</p> <h2>8. You Can Spend Money on Experiences</h2> <p>There's considerable evidence that buying &quot;stuff&quot; doesn't make anyone any happier. But paying for <em>experiences</em> offers a good bang for your buck when it comes to happiness, according to the book <a href="http://www.amazon.com/gp/product/1400077427/ref=as_li_tl?ie=UTF8&amp;camp=1789&amp;creative=390957&amp;creativeASIN=1400077427&amp;linkCode=as2&amp;tag=wisbre03-20&amp;linkId=THZH4OREGTORUHA6">Stumbling on Happiness</a>. Whether it's swimming with sharks off the coast of South Africa or hang gliding over a volcano in Hawaii, experiences do cost money.</p> <h2>9. You're Less Likely to Be Lonely</h2> <p>A 2011 study in the Journal of Consumer Psychology concluded that people with meaningful social connections are generally happiest. And there is other evidence showing that people with less money are more likely to be lonely. The Guardian reported in 2014 that &quot;Poor social networks should be included as a contributor to and signal of poverty.&quot;</p> <p><em>Does money make you happier?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/9-ways-money-does-buy-happiness">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/6-ways-money-really-can-buy-happiness">6 Ways Money Really Can Buy Happiness</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-things-that-money-just-cant-buy">The things that money just can&#039;t buy</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/can-you-talk-to-your-friends-about-debt">Can you talk to your friends about 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/21-frugal-ways-to-reward-yourself-right-now">21 Frugal Ways to Reward Yourself Right Now</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/10-things-you-can-do-today-to-be-happy">10 Things You Can Do Today to Be Happy</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Lifestyle education experiences happiness money poverty student loans Fri, 18 Dec 2015 10:00:08 +0000 Tim Lemke 1621571 at http://www.wisebread.com 8 Surprising Ways to Pay Off Your Student Loans http://www.wisebread.com/8-surprising-ways-to-pay-off-your-student-loans <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/8-surprising-ways-to-pay-off-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/student_loan_debt_000042931066.jpg" alt="Learning surprising ways to pay off student loans" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>If you went to college, chances are you have student loan debt. Personally, I'm on the 20-year payback plan, and while I'm comfortable with my payments now that two out of three loans are paid in full, the first seven to eight years post-college were extremely hard on my wallet. If you're in a similar situation, there may be some relief in your future. Consider these eight surprising ways to pay off your student loan debt a little faster. (See also: <a href="http://www.wisebread.com/should-you-refinance-your-student-loan?ref=seealso">Should You Refinance Your Student Loan?</a><strong>)</strong></p> <h2>1. Volunteer With SponsorChange.org</h2> <p>When I graduated college, I was 100% job focused. I had to find full-time employment right away to pay my rent, gas, food, bills, and of course, my student loans. The job search took up most of my time, and when I finally landed a position, that took up even more of my time. After making ends meet, I certainly didn't have much time to volunteer for activities I enjoyed or support causes I believed in.</p> <p>And that right there is what I love about&nbsp;<a href="http://www.sponsorchange.org">SponsorChange.org</a>. Their mission is to connect volunteers with social impact organizations that provide a $10 to $20 per hour stipend for participation in meaningful skill-based project opportunities. The concept is simple: Organizations list projects on the SponsorChange.org site to attract the talent they need. Volunteers &mdash; that's you &mdash; can find projects and build their skills doing something they love by earning money that will go directly toward student loans. It's a win-win for everybody, and you don't have to feel one bit guilty about it. (See also: <a href="http://www.wisebread.com/8-ways-to-get-student-loan-debt-forgiveness?ref=seealso">8 Ways to Get Student Loan Debt Forgiveness</a>)</p> <h2>2. Find Student Employment Through Start Jobs</h2> <p>If you're still in school or even a recent grad, you'll want to check out<a href="http://www.startjobs.net"> Start Jobs</a>, an organization that connects students to paying jobs in the field they want to start a career. This allows them to gain the experience necessary to land that first big job right out of college, in turn either taking on less student debt or paying it down faster.</p> <p>&quot;Start Jobs was ranked by Inc.com as one of the best four websites for <a href="http://www.inc.com/samuel-edwards/great-job-sites-for-recent-college-graduates.html">college graduates seeking jobs</a>, listed alongside LinkedIn, Indeed, and CareerBuilder, and it's the only site specifically created for current students and recent graduates for the purpose of attacking the ever-expanding student debt crisis,&quot; according to Start Jobs Community Manager Bryce Hamlin.</p> <h2>3. Accept Help From Your Post-College Employer</h2> <p>The student loan crisis has gotten so bad in recent years that employers are now stepping up to help their workers pay down debt quicker. Price Waterhouse and Coopers, for instance, recently announced that it would help its junior employees (roughly 46,000 staffers) with paybacks starting next year. Eligible employees will receive $1,200 a year for up to six years for student loans. The money will be paid directly to the loan provider, though it will still count as income for employees.</p> <h2>4. Play Givling, an Online Trivia Game</h2> <p><a href="https://givling.com/givling/">Givling</a> is a pay-to-play online trivia game that is making crowdfunding interactive and fun. Three months after its launch this past spring, it paid off contestant <a href="http://www.businessinsider.com/this-student-had-his-32000-student-loan-paid-off-by-signing-up-for-an-online-trivia-game-and-he-didnt-even-play-2015-7">Kevin Foster's $31,625 loan</a> and it will pay off the next loan in the queue &mdash; which amounts to $97,000 &mdash; soon. The best part? You don't even have to play the game yourself. You have to sign up, of course, but participation in the trivia games isn't necessary to win.</p> <p>According to Business Insider, &quot;Separately, trivia gamers sign up and are randomly placed into teams of three. Team members answer true or false questions to rack up points. The highest-scoring funding team is eligible for a $4 million prize. In addition to the large $4 million prize, there are smaller daily prize amounts awarded.&quot;</p> <p>Givling costs $0.50 to play a round and an additional $0.30 for a transaction fee. Players also receive one free game a day.</p> <h2>5. Earn Supplemental Income Through Peer-to-Peer Services</h2> <p>Thanks to the &quot;sharing economy&quot; &mdash; which was largely established by the still-growing popularity of peer-to-peer services &mdash; you can make extra cash by renting out items you already own, like your home or car, or offering services like dog sitting.</p> <p>I've rented out a guest bedroom in my home to tourists for the past seven years on Airbnb, and I'm also listed as a dog sitter on DogVacay, in order to bring in extra income. I have a full-time job just like everyone else, and I still have time to manage both of these additional revenue streams. If you have mounting debt from student loans, these peer-to-peer service are a highly effective way of bringing in serious cash &mdash; if you're wholly committed to your endeavors' success &mdash; that you can put toward your payback.</p> <h2>6. Charge Part of the Balance to a No-Interest Credit Card</h2> <p>It's not the ideal solution to use a credit card to pay down other debts, but if the interest rate makes more sense on plastic than it does from you loan repayment terms, it might be a smart move to make a swipe. (See also: <a href="http://www.wisebread.com/the-best-0-balance-transfer-credit-cards">Best Credit Cards with 0% Intro Offers</a>)</p> <p>&quot;Using Great Lakes (a loan provider), we were able to call and make a one-time payment using a credit card,&quot; says Douglas Hutchings, who has student-loan debt. &quot;We had an offer for 0% interest for 12 months so we picked an amount that we were confident we could pay over 12 months and charged it to the card. Due to the size of the payment, we also scored a fair amount of credit card rewards points that we plan to use for a future vacation. Between saved interest and credit card points, we came out ahead by over $2,000 for about 60 minutes of 'work.'&quot;</p> <p>See also: <a href="http://www.wisebread.com/3-private-lenders-that-can-really-save-you-money-on-your-student-loans?ref=seealso">These Private Lenders Can Really Save You Money on Your Student Loans</a></p> <h2>7. Take Out a Loan From Your 401K</h2> <p>Like using a credit card to pay down your student-loan debt, tapping into your 401K shouldn't be the first place you go for extra cash for loan payments. But if it makes sense overall &mdash; in saved interest and other benefits &mdash; it's not an altogether terrible prospect to consider.</p> <p>&quot;One of the things I did to jump start the pay down of my substantial student loans was to take out a loan from my 401K, and put the total amount towards the principal on the student loan,&quot; says Eric Meerman, a portfolio manager at Palisades Hudson Financial Group. &quot;I then kept paying the same monthly amount on the student loan, in addition to paying back the loan to the 401K. While this is not always the best idea since you don't want to miss out on the market appreciation available to stock investments in your 401K, it worked out for me because the market was virtually flat over the term of the payback period.&quot;</p> <h2>8. Live at Home With Your Parents a Little Longer</h2> <p>If mom and dad will have you, live with them a little while longer after college. Chances are they won't charge rent &mdash; or at least not as much as you would pay on your own &mdash; and you'll get lots of free services (laundry, meals, and more), which will ultimately free up more of your income to pay down your student loan debt. I have a buddy who moved back home at age 26 after a few years on his own because his expenses became too much to handle. There's no shame in it, and many of us (myself included) have been there. (See also: <a href="http://www.wisebread.com/15-ways-to-pay-back-student-loans-faster?ref=seealso">15 Ways to Pay Back Student Loans Faster</a>)</p> <p><em>Do you have other interesting ideas on how to pay off student loans? I'd love to hear your thoughts in the comments below.</em></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/8-surprising-ways-to-pay-off-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-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/12-easy-ways-to-avoid-student-loan-debt">12 Easy Ways to Avoid 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/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-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-ways-to-get-student-loan-debt-forgiveness">8 Ways to Get Student Loan Debt Forgiveness</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/which-student-loan-repayment-plan-saves-you-the-most">Which Student Loan Repayment Plan Saves You the Most?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management Education & Training payback student loans volunteering Fri, 11 Dec 2015 18:00:18 +0000 Mikey Rox 1619235 at http://www.wisebread.com Should You Refinance Your Student Loan? http://www.wisebread.com/should-you-refinance-your-student-loan <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/should-you-refinance-your-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/000060736594.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>If you're struggling to pay back your student loan debt, you're far from alone. Earlier this year, Edvisors reported that members of the class of 2015 graduated from college owing an average of more than $35,000 in student loans. That's the highest this average has been.</p> <p>You can refinance your existing student loans to ones with lower interest rates. This can help you manage this debt. If your interest rate is lower, your monthly payment will be lower, too. You'll also pay less over the life of your loans, thanks to the lower interest rates.</p> <p>But there may be costs, too. If you're refinancing federal student loans into private loans &mdash; those originated by private banks and financial institutions &mdash; you'll lose the protections and programs that government-sponsored student loans provide. And that can end up hurting you in the long run, even if you lower the interest rates and monthly payments on these loans. Federal loans offer loan forgiveness, deferment, and income-based repayment protections. Most private student loans don't come with these protections.</p> <h2>Loan Forgiveness</h2> <p>If you are employed full-time in an eligible public service or non-profit job and you've made at least 120 on-time payments on your federal student loan, the government will forgive the remainder of your student-loan debt.</p> <p>The Consumer Financial Protection Bureau says that one-fourth of U.S. workers can qualify either for loan forgiveness programs or income-based repayment plans. Consider whether you'd be eligible for loan forgiveness before refinancing with a private lender. (See also: <a href="http://www.wisebread.com/8-ways-to-get-student-loan-debt-forgiveness?ref=seealso">8 Ways to Get Student Loan Debt Forgiveness</a>)</p> <h2>Deferment</h2> <p>Federal student loans also come with deferment options, which give you more time before you have to start paying them back.</p> <p>You normally have six months after graduation before you have to start paying on your student-loan debt. But under federal programs, you can apply for additional deferments if you are unemployed, facing economic hardships, or are serving in the U.S. Armed Forces.</p> <p>Some private loans do offer ways to pause payments as well, but be sure you understand all the terms before making the switch. (See also: <a href="http://www.wisebread.com/3-private-lenders-that-can-really-save-you-money-on-your-student-loans?ref=seealso">3 Private Lenders That Can Really Save Money On Your Student Loans</a>)</p> <h2>Income-Based Repayment</h2> <p>The income-based repayment plan that the government offers for federal student loans can provide immediate relief if you are employed but not earning a high salary. If you are a new borrower on or after July 1 of 2014 who has no balance on a previous federal student loan, your loan payments will be capped at a maximum of 10 percent of what the government calls your discretionary income, the difference between your income and 150 percent of the poverty guideline for your family size and the state in which you live.</p> <p>Those borrowers with especially low incomes might not have to make any student-loan payments at all.</p> <p>If you make these lower payments for 25 years, and you still haven't paid off your student-loan debt, the government will forgive the remainder of what you owe.</p> <p>For more information about these and other assistance programs &ndash; they are too complex to completely sum up in this story &ndash; visit the <a href="https://studentaid.ed.gov/sa/repay-loans/understand/plans/income-driven#eligibility">Department of Education</a>. (See also: <a href="http://www.wisebread.com/which-student-loan-repayment-plan-saves-you-the-most?ref=seealso">Which Student Loan Repayment Plan Saves You the Most?</a>)</p> <h2>Refinancing</h2> <p>If you are interested in <a href="http://www.wisebread.com/what-s-the-difference-between-student-loan-refinancing-and-consolidation">refinancing your federal student loans</a>, you will have to follow certain steps.</p> <p>As with any loan application, you'll need to prove that you can afford your new monthly payments, even though they'll be lower than your current ones. Usually that means providing lenders with proof of income as well as bank statements.</p> <p>You'll also need a good credit score if you want to qualify for interest rates that are low enough to make refinancing worthwhile. Your credit score will be low if you've missed or been late on payments or if you have run up loads of credit-card debt. You'll struggle to qualify for a refinance if your credit score is under 640 on the FICO scale.</p> <p>Here are some places to consider if you'd like to apply for a refinance.</p> <p><a href="http://sofi.com/wisebread">SoFi</a>: Fixed rates range from 3.50% APR to 7.24% APR and variable rates range from 1.90% APR to 5.20% APR. Loan terms are from five years to 20 years. SoFi offers additional resources and benefits, including unemployment protection and career support.</p> <p><a href="https://commonbond.co/choose-your-loan?referrer=b75172e7076c5472bed5baec5e28309c&amp;referred">CommonBond</a>: Fixed rates range from 3.50% APR to 6.74% APR and variable rates range from 1.95% APR to 4.97% APR. Loan terms start at five years and go up to 20 years. They also allow a temporary pause in payments if you lose your job. In addition to student loans for grads, they also offer refinancing for parents with PLUS loans, and even loans for getting your MBA.</p> <p><a href="https://www.meetearnest.com">Earnest</a>: Fixed rates start at 3.50% APR and variable rates start at 1.90% APR. Earnest allows a lot of flexibility for borrowers, even allowing them to change between fixed and variable rates at no charge. Earnest also looks at additional factors beyond the traditional credit scores and income &mdash; including education, employment history and other details to get a better picture of the borrower.</p> <p><a href="http://lendkey.7eer.net/c/27771/187810/3276">LendKey</a>: Fixed rates start at 3.25% APR and variable rates start at 1.93% APR. LendKey has no origination fees and their loans are funded by community lenders like credit unions and community banks.</p> <p><em>Have you refinanced a student loan?</em></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/should-you-refinance-your-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-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-ways-to-get-student-loan-debt-forgiveness">8 Ways to Get Student Loan Debt Forgiveness</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-ways-paying-off-student-loans-early-can-boost-your-finances">7 Ways Paying Off Student Loans Early Can Boost Your Finances</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-s-the-difference-between-student-loan-refinancing-and-consolidation">What’s the Difference Between Student Loan Refinancing and Consolidation?</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-one-college-graduate-paid-off-28000-in-three-years-on-a-30k-salary">How One College Graduate Paid Off $28,000 in Three Years on a $30K Salary</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/which-student-loan-repayment-plan-saves-you-the-most">Which Student Loan Repayment Plan Saves You the Most?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management borrowing debt deferment education loan forgiveness refinance student loans Wed, 09 Dec 2015 14:00:23 +0000 Dan Rafter 1616782 at http://www.wisebread.com 5 Sobering Facts About Student Loan Debt http://www.wisebread.com/5-sobering-facts-about-student-loan-debt <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-sobering-facts-about-student-loan-debt" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/college_graduate_debt_000028074368.jpg" alt="College grad learning sobering facts about student loan debt" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Student loans are a catch-22. Most of us rely on them to get a college degree, which can help us earn about a <a href="http://www.marketwatch.com/story/a-college-degree-is-worth-1-million-2015-05-07">million dollars more over our lifetimes</a> than those of us without college degrees. On the other hand, the debt we've accrued can impact our financial life decades after we've graduated.</p> <p>Currently, about 40 million American borrowers collectively owe $1.2 trillion in student debt. Some might say student debt is a fair trade given the income potential with a college degree, but there are some sobering facts about student loan debt that might surprise you. Here are five that could make you re-assess higher education loans.</p> <h2>1. Each Graduating Class Becomes More Indebted</h2> <p>It should come as no surprise that the level of student loan debt is rapidly rising. While in the 2003&ndash;2004 school year, only 2% of graduates <a href="http://trends.collegeboard.org/student-aid/figures-tables/cumulative-debt-bachelors-degree-recipients-sector-over-time">carried loan burdens</a> in excess of $40,000, by 2011&ndash;2012, that number exceeded 18%, according to the College Board. And it's likely getting worse.</p> <p>In 2014, the Wall Street Journal reported that the class of 2014 was the <a href="http://blogs.wsj.com/numbers/congatulations-to-class-of-2014-the-most-indebted-ever-1368/?mod=wsj_nview_latest&amp;mg=blogs-wsj&amp;url=http%253A%252F%252Fblogs.wsj.com%252Fnumbersguy%252Fcongatulations-to-class-of-2014-the-most-indebted-ever-1368%252F%253Fmod%25">most indebted class</a> ever, with an average student loan debt of $33,000. But they didn't hold the title long. Along came the class of 2015 to claim that dubious distinction with an average student loan debt of $35,000. The number will likely continue to increase from year to year, with many college students getting deeper in debt before they're able to purchase their first home.</p> <h2>2. Student Loan Repayment Can Take Longer Than Expected</h2> <p>The standard repayment plan with a federal student loan is 10 years for a bachelor's degree. But unfortunately, many graduates are unable to pay off their student debt in just one decade. On average, it takes about 20 years to <a href="http://www.usnews.com/news/blogs/data-mine/2014/10/07/student-loan-expectations-myth-vs-reality">repay student loan debt</a> for a bachelor's degree. And if you're on a income-sensitive federal loan repayment plan, such as Income Based Repayment or Pay As You Earn, you could also be paying for up to 25 years. (See also: <a href="http://www.wisebread.com/15-ways-to-pay-back-student-loans-faster?ref=seealso">15 Ways to Pay Back Student Loans Faster</a>)</p> <h2>3. There Is a High Default Rate</h2> <p>Perhaps you see yourself finding a job shortly after graduating and paying down your debt in no time. But life doesn't always go according to plan, and keeping up with student loan payments can be more difficult than expected. In 2012, about 35% of student loan borrowers were 90 or more days behind on their student loan payments.</p> <p>Different reasons play a role in student loan default. Some graduates are unable to find work, or they end up earning less than anticipated. According to the Bureau of Labor Statistics, about 260,000 people with a college or professional degree made at or below the <a href="http://www.bls.gov/cps/minwage2013.pdf">federal minimum wage</a> of $7.25 per hour in 2013. This undoubtedly is frustrating for graduates who spend tens of thousands of dollars for the opportunity to get ahead. (See also: <a href="http://www.wisebread.com/4-times-student-loan-refinancing-can-save-you-big?ref=seealso">4 Times Student Loan Refinancing Can Save You Big</a>)</p> <h2>4. Student Debt Can Keep You at Home Longer</h2> <p>Because of high student loan debt, moving into their own apartment or buying a home after graduation is out of reach for some grads. One survey found that 27% of those with student debt&nbsp;<a href="http://www.bloomberg.com/bw/articles/2012-09-06/student-loans-debt-for-life">move back in with their parents</a> after graduation. If that wasn't bad enough, another survey found that the median net worth of young households without student debt is <a href="http://www.pewsocialtrends.org/2014/05/14/young-adults-student-debt-and-economic-well-being/">approximately seven times higher</a> than the net worth of those with student debt. This could explain why 40% of young borrowers delay major purchases like a house, and why approximately 14% of young borrowers delay marriage. (See also: <a href="http://www.wisebread.com/the-definitive-guide-to-pay-as-you-earn-a-great-student-loan-repayment-plan?ref=seealso">The Definitive Guide to the Pay As You Earn Federal Student Loan Repayment Plan</a>)</p> <h2>5. You Can't Run or Hide From Student Loan Debt</h2> <p>Student loan debt can haunt you forever. You might qualify for <a href="http://www.wisebread.com/8-ways-to-get-student-loan-debt-forgiveness">federal student loan forgiveness</a> after 10 years if you work in public service, but typically this is one type of debt you can't escape.</p> <p>Federal loans can be discharged or canceled if you become permanently disabled or die. Some private lenders offer this provision, but not all. And if you think bankruptcy can remove the burden of student debt, you're in for a rude awakening.</p> <p>It doesn't matter if you didn't complete your education or if you can't find a job, private and federal lenders eventually want their money. You can apply for a deferment or forbearance, which temporarily lowers or suspends monthly payments in the event of hardship &mdash; but payments eventually resume.</p> <p>Student loans &mdash; like getting an education &mdash; are serious business. Avoid compromising your financial future by borrowing wisely.</p> <p><em>How heavy is your student loan burden?</em></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/5-sobering-facts-about-student-loan-debt">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-easy-ways-to-avoid-student-loan-debt">12 Easy Ways to Avoid 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-ways-to-get-student-loan-debt-forgiveness">8 Ways to Get Student Loan Debt Forgiveness</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/a-better-way-to-rank-americas-colleges">A Better Way to Rank America&#039;s Colleges</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/student-loans-how-to-make-post-college-decisions">Student Loans: How to Make Post-College Decisions</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/share-your-thoughts-consolidating-student-loans">Share Your Thoughts: Consolidating Student Loans</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management Education & Training college financial aid higher education repayment student loans Mon, 30 Nov 2015 18:00:46 +0000 Mikey Rox 1616761 at http://www.wisebread.com Is It Ever Okay to Cosign a Loan? http://www.wisebread.com/is-it-ever-okay-to-cosign-a-loan <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/is-it-ever-okay-to-cosign-a-loan" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man_signing_documents_000029589200.jpg" alt="Man learning if it&#039;s ever okay to cosign a loan" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Cosigning a loan is, generally speaking, a bad idea. That's because you place your own credit at risk and could be responsible for the entire amount of the loan if the other party fails to pay. There are horror stories aplenty of people who cosigned loans for friends or family members &mdash; or even just acquaintances &mdash; and found themselves in debt and with their credit ruined.</p> <p>But there may be cases where placing your name on another person's loan is acceptable, provided that you're clear on the risks. It's not uncommon for parents to cosign loans for children as they look to get established, for instance. Ultimately, cosigning a loan is a personal choice, but it's important to be aware of the downsides.</p> <p>With those words of warning out of the way, here are some times when cosigning a loan may be okay:</p> <h2>1. If You Think of the Loan as a Gift</h2> <p>It's often said that if you lend a friend or relative $500, just treat the $500 as simply a gift. If you're comfortable giving the money away, then lending it is okay, because you won't worry about getting the cash back. Similarly, when cosigning a loan, operate under the assumption that you will be the one paying whatever is owed &mdash; because you might very well end up the person on the hook. If you're comfortable with this, then go ahead and cosign.</p> <h2>2. If It's for a Child's Education</h2> <p>Student loans can be hugely beneficial to a young person, and parents may feel compelled to help children obtain the necessary financing for higher education. You may feel it's worth the risk to help your child in this way, and you may not even mind helping your <a href="http://www.wisebread.com/how-to-financially-educate-your-children">child pay the loans back</a> later. (It may be better, however, to simply help them pay through a 529 plan or similar savings if you can.) If you feel strongly about a child's educational funding needs, cosigning a student loan can be wise &mdash; provided you believe the child understands the responsibility of repayment.</p> <h2>3. If You're Helping a Family Member Build Credit</h2> <p>When you're young, building credit can be a bit of a chicken or egg problem. You can't build credit until you show you're able to pay back loans, but it's hard to get a loan without a credit history. Cosigning a loan for a young person can help them gain financial independence over time.</p> <h2>4. If You're Helping a Loved One Buy a Car So They Can Work</h2> <p>It's often hard for young people to land a good job if they don't have reliable transportation. But they may not have the means or credit history to purchase a car. Cosigning a car loan for this person could make it easier to land that job and earn income of their own. Just make sure the car they buy is affordable; borrowers shouldn't assume monthly payments disproportionate to their income. And frankly, you shouldn't cosign a loan you can't afford, either.</p> <h2>5. To Help a Family Member Secure Safe Housing</h2> <p>I once had a friend who graduated from college and moved to a new city, but wasn't earning a lot of money right away. It was hard for her to secure an apartment in a safe neighborhood because she didn't have much income, credit history, or savings. Ultimately, her father was willing to cosign an apartment lease to ensure she could live in a nicer building. Her dad took a risk, but he rested easier knowing his daughter was comfortable in her new city.</p> <h2>6. If You Know You Won't Need a Loan for Yourself Anytime Soon</h2> <p>When you cosign a loan, you put your own credit score at risk. But this only matters if you plan to borrow money in the future. If you have plenty of money in the bank and own your home and car free and clear, a ding on your credit may not impact you very much. Just be sure you have an emergency fund in place to protect against job loss, disability, and other unexpected problems.</p> <h2>7. If You've Agreed With the Lender to Certain Protections</h2> <p>It is sometimes possible to negotiate certain conditions with a lender when cosigning. For instance, you can insist that you be notified immediately if there are any late payments. This gives you a chance to intervene before the tardiness shows up on your credit history. You may also be able to get the lender to agree that you will only be responsible for the principal of the loan.</p> <h2>8. If It's for a Short Term</h2> <p>There may be ways to remove yourself as a cosigner after a time. For instance, you could ask to have your name taken off when a borrower chooses to refinance a home loan. If you are a cosigner on a credit card, you could have the borrower apply for new credit cards under his or her name only, then close the old accounts. If you can, it makes sense to try and remove yourself as a cosigner after 12 months or so, when a borrower presumably has the credit to stand on their own.</p> <p><em>Have you ever cosigned a loan? How'd it go?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/is-it-ever-okay-to-cosign-a-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-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/7-ways-paying-off-student-loans-early-can-boost-your-finances">7 Ways Paying Off Student Loans Early Can Boost Your Finances</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/prioritize-these-5-bills-when-youre-short-on-cash">Prioritize These 5 Bills When You&#039;re Short on Cash</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-signs-youve-crossed-from-healthy-debt-to-problem-debt">8 Signs You&#039;ve Crossed From &quot;Healthy&quot; Debt to &quot;Problem&quot; 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/should-you-refinance-your-student-loan">Should You Refinance Your Student Loan?</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/6-times-when-its-okay-to-take-a-loan">6 Times When It&#039;s Okay to Take a Loan</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management borrowing cosigning credit history giving money loans student loans Mon, 23 Nov 2015 18:00:03 +0000 Tim Lemke 1615573 at http://www.wisebread.com What’s the Difference Between Student Loan Refinancing and Consolidation? http://www.wisebread.com/what-s-the-difference-between-student-loan-refinancing-and-consolidation <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/what-s-the-difference-between-student-loan-refinancing-and-consolidation" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man_student_debt_000020737719.jpg" alt="Man learning about student loan refinancing and consolidation" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Higher education can open the door to better job prospects and a larger salary, but there&rsquo;s nothing cheap about earning a degree. According to the Institute for College Access and Success, in 2013, about seven in 10 graduates from public and nonprofit colleges had student loan debt with the average student <a href="http://ticas.org/posd/map-state-data">owing $28,400</a>.</p> <p>If you didn&rsquo;t attend college with a silver spoon in your mouth and had to apply for financial aid (like many students did, myself included), you might be bogged down with multiple loans. This can be a lot to keep up with, but fortunately there&rsquo;s an easier way to manage student loan debt and perhaps pay it off sooner. In fact, some post-grads have successfully managed their debt with student loan refinancing and consolidation.</p> <p>These terms are sometimes used interchangeably. But while they can serve a similar purpose, consolidation and refinancing are not the same.</p> <h2>What Is Student Loan Consolidation?</h2> <p>Consolidation is the process of combining or merging multiple loans into a single one. A student loan consolidation can combine all your federal loans into one loan at no cost. Some students pay for their entire college education with only one type of federal loan, but others receive funds from multiple federal loans. For example, you might have a Direct Unsubsidized Loan, a Direct PLUS loan, and perhaps another type of federal loan. This can become a headache at best, and it&rsquo;s easier to overlook a bill when you receive so many statements each month.</p> <p>Consolidation simplifies the way you manage your student loans. Combining your federal loans into a single loan means you&rsquo;ll only have one monthly statement, one due date, and one set of loan terms, which usually includes a low, fixed interest rate.</p> <p>Federal student loan consolidation is offered by the U.S. Department of Education and it&rsquo;s only for federal student loans &mdash; not private loans. So if you have a mix of federal educational loans and private educational loans, you cannot consolidate through the Department of Education.</p> <p>This doesn't mean you can&rsquo;t simplify and merge your federal and private loans into one loan. This is still an option, but instead of Federal consolidation, you have to refinance your loans through a private lender, such as a bank or credit union.</p> <h2>What Is Student Loan Refinancing?</h2> <p>Refinancing involves applying for a new loan (sometimes with a lower interest rate), and then using these funds to pay off existing loans. Refinancing is only available through private lenders. This is a smart move if you have multiple private loans with variable interest rates and you want a fixed interest rate, which can protect you from rate hikes in the future and potentially save you money.</p> <p>Since refinancing is through a private lender, you have to complete a loan application and go through the underwriting process, at which point a lender evaluates your credit history and income to determine if you&rsquo;re eligible. If you qualify, refinancing can help you get a lower interest rate, which can save you money over the life of the loan. A lower payment can create more cash flow, and you can use the savings to pay off other debts, move out of your parents&rsquo; house, or build your emergency fund. Refinancing also helps pay off student loan debt faster, especially if you're able to make higher payments. This is because more of your payments will go toward reducing the principal.</p> <p>Refinancing is the only way to combine your federal and private loans into a single loan. But it&rsquo;s important to note that refinancing a federal loan involves giving up some protections offered by government loans.</p> <p>For example, federal loans have provisions to help students manage their debt, such as income-based repayment. And if you experience economic hardship like the loss of a job, federal loans give the option of forbearance or deferment. Both options allow borrowers to stop making payments on a temporary basis. Some private lenders don't offer such perks. So while refinancing can simplify your financial life, make sure you have a strong financial foundation before switching federal loans to a private loan.</p> <p><a href="http://SoFi.com/wisebread">SoFi</a> is a popular lender offering student loan refinancing at competitive rates. They also offer career support and unemployment protection, where your payments can be paused while finding a new job. <a href="http://SoFi.com/wisebread"><strong>Click here to learn more about getting a student refinancing loan from SoFi</strong></a>.</p> <!--<p>Alternately, <a href="http://credible.evyy.net/c/27771/223380/3874?utm_source=WiseBread&amp;utm_medium=web&amp;utm_campaign=refi">Credible</a> is a marketplace platform that allows you to search and compare available loans and interest rates. Receive personalized offers from mulitple lenders. <a href="http://credible.evyy.net/c/27771/223380/3874?utm_source=WiseBread&amp;utm_medium=web&amp;utm_campaign=refi"><strong>Click here to learn more and get offers from available lenders.</strong></a></p>--><!--<p>Alternately, <a href="http://credible.evyy.net/c/27771/223380/3874?utm_source=WiseBread&amp;utm_medium=web&amp;utm_campaign=refi">Credible</a> is a marketplace platform that allows you to search and compare available loans and interest rates. Receive personalized offers from mulitple lenders. <a href="http://credible.evyy.net/c/27771/223380/3874?utm_source=WiseBread&amp;utm_medium=web&amp;utm_campaign=refi"><strong>Click here to learn more and get offers from available lenders.</strong></a></p>--><p><em>Did you refinance or consolidate your student loans? How did it improve your situation? I&rsquo;d love to hear about your experience in the comments section.</em></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/what-s-the-difference-between-student-loan-refinancing-and-consolidation">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/8-ways-to-get-student-loan-debt-forgiveness">8 Ways to Get Student Loan Debt Forgiveness</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-ways-paying-off-student-loans-early-can-boost-your-finances">7 Ways Paying Off Student Loans Early Can Boost Your Finances</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/12-easy-ways-to-avoid-student-loan-debt">12 Easy Ways to Avoid 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/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-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 college consolidation education refinancing student loans Thu, 12 Nov 2015 00:18:15 +0000 Mikey Rox 1603032 at http://www.wisebread.com Prioritize These 5 Bills When You're Short on Cash http://www.wisebread.com/prioritize-these-5-bills-when-youre-short-on-cash <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/prioritize-these-5-bills-when-youre-short-on-cash" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_worried_bills_000026396353.jpg" alt="Woman prioritizing certain bills when she&#039;s low on cash" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You know you should pay all of your bills on time. But what if you're short on cash this month? Is it better to pay certain bills late?</p> <p>Yes, actually. Some bills are not reported to the three national credit bureaus of TransUnion, Experian, and Equifax. Bills in this category include utility bills, cell phone payments, medical payments, and cable bills. This doesn't mean that you should pay these bills late. But if you have to do some emergency financial juggling this month? Pay your cable late, not your mortgage or credit card payment.</p> <p>Here are five bills you should always pay on time, each month. Not doing so could damage your credit, leave you with huge financial penalties, or even cause you to lose your home or car.</p> <h2>1. Your Mortgage</h2> <p>Dave Hardin, president of Hardin Financial Group in Troy, Michigan, says that no late or missing check will hurt your credit score more than a missed mortgage. A single late mortgage payment can cause your credit score to fall by 100 points.</p> <p>&quot;If you pay that late, that will have the single greatest effect on your credit score,&quot; Hardin said. &quot;Your mortgage is the big one.&quot;</p> <p>If you miss too many payments, your mortgage lender will foreclose on your home, evicting you and taking ownership of your property.</p> <p>But don't panic if you're two days late on paying your mortgage. As Hardin says, your mortgage lender won't report your payment as officially late until it is at least 30 days past the deadline. This gives you some leeway if you are struggling to scrape together enough cash to pay your mortgage this month.</p> <p>&quot;That doesn't mean you should wait that long to pay your mortgage,&quot; Hardin said. &quot;But late officially means 30 days late, not two days.&quot;</p> <p>Paying your mortgage bill late can also set you up for future financial pain. Kyle Winkfield, managing partner of O'Dell, Winkfield, Roseman and Shipp in Rockville, Maryland, says it's easy for your finances to spiral out of control when you miss a mortgage payment.</p> <p>&quot;Say you miss your $2,000 mortgage payment one month. Now you have to come up with $4,000 the next month to catch up,&quot; Winkfield said. &quot;That's not easy.&quot;</p> <h2>2. Student and Auto Loans</h2> <p>You should never miss your student or auto loan payments either, Hardin said. That's because these are fixed payments that you know are coming up each month. Missing fixed payments is a big deal because lenders are more likely to believe that you didn't send in your payment not because you forgot about it, but because you couldn't pay it.</p> <p>Your car payment is an especially important bill, because your loan is secured by your actual car. This means that lenders have something to go after should you stop making your payments.</p> <p>&quot;Be vigilant about making your car payments,&quot; said Scott Sadar, executive vice president of Somerset Wealth Strategies in Portland, Oregon. &quot;If you are not, your car could be repossessed.&quot;</p> <p>Again, these payments aren't officially late until 30 days have passed.</p> <h2>3. Credit Card Payments</h2> <p>Missing your credit card payment could leave you with a double whammy of pain. First, credit card companies will report your missed payments to the credit bureaus if you are 30 days late or more, causing your credit score to fall.</p> <p>Secondly, if you pay late by 60 days or more (in some cases less), your credit card company can assess a penalty interest rate on your card. This can be financially devastating if you carry a balance on your credit cards each month. Sadar says that these rates can hit 22% or higher, which can cause existing balances to grow quickly, even if you don't make any new payments with your card.</p> <p>See also: <a href="http://www.wisebread.com/when-to-do-a-balance-transfer-to-pay-off-credit-card-debt">When To Do a Balance Transfer to Pay Down Credit Card Debt</a></p> <h2>4. Your Rent</h2> <p>It wasn't until last year that Experian and TransUnion began collecting data for on-time rent payments. The third major national credit bureau, Equifax, still doesn't do this. But even if the credit bureaus weren't tracking your rent payments, you'd still want to make this payment on time every month. Simply put, you don't want to lose your home, and missing too many rent payments could lead to that.</p> <p>It's not easy for landlords to evict tenants, and it will take more than one or two late payments. But if you fall too far behind, your landlord will start the eviction process, possibly leaving you without a place to live.</p> <p>&quot;You always want to protect the roof over your head,&quot; Winkfield said. &quot;That holds true whether you own a home or you are renting. Always make the payments that keep that roof over your head.&quot;</p> <p>Of course, you don't ever want to be in the position where you can't pay all of your monthly bills. Yes, paying your cable bill late one month isn't going to destroy your finances. But if you're juggling payments every month, that's a sign that there is a problem. It's also a sign that you need to take a closer look at your budget to determine if you there are expenses you can eliminate.</p> <p>&quot;Sometimes we get too wrapped up in our wants instead of our needs,&quot; Winkfield said. &quot;If things are tight &mdash; and we've all been there &mdash; then you might need to eliminate some of the wants from your budget.&quot;</p> <p>And if you are struggling to pay certain bills? Don't hide. Hardin says that the best move you can make is to call the creditors behind the bills and explain to them that you are struggling. Many will work with you to find at least a temporary solution. If you call, creditors are less likely to report you as late to the credit bureaus.</p> <p>&quot;If you don't call, the lenders have no choice but to think that you aren't paying just because you don't want to pay,&quot; Hardin said. &quot;You should not be embarrassed to call your creditors. You'd be surprised at how easy creditors make these conversations. They don't want to lose you as a customer, so they usually are willing to work with you.&quot;</p> <p><em>Have you ever fallen behind on your bills? How'd you cope?</em></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/prioritize-these-5-bills-when-youre-short-on-cash">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/how-to-get-a-credit-card-when-you-have-bad-credit">How to Get a Credit Card When You Have Bad Credit</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-one-couple-paid-off-147k-of-debt-even-while-unemployed">How One Couple Paid Off $147k of Debt (Even While Unemployed)</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-times-student-loan-refinancing-can-save-you-big">4 Times Student Loan Refinancing Can Save You Big</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-it-ever-okay-to-cosign-a-loan">Is It Ever Okay to Cosign a Loan?</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-ways-paying-off-student-loans-early-can-boost-your-finances">7 Ways Paying Off Student Loans Early Can Boost Your Finances</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management bad credit bills car payment credit score late payment loans mortgage student loans Tue, 20 Oct 2015 13:15:23 +0000 Dan Rafter 1596724 at http://www.wisebread.com 4 Times Student Loan Refinancing Can Save You Big http://www.wisebread.com/4-times-student-loan-refinancing-can-save-you-big <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/4-times-student-loan-refinancing-can-save-you-big" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man_holding_coins_000062196700.jpg" alt="Man seeing signs of refinancing student loans" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>There's nothing cheap about going to college. According to the College Board, the average cost of tuition and fees for the 2014&ndash;2015 school year was $31,231 at private colleges, $9,139 for state residents at public colleges, and $22,958 for out-of-state residents attending public schools. It's thus no surprise that many students &mdash; like yours truly &mdash; pay their way through college with <a href="http://www.wisebread.com/7-ways-paying-off-student-loans-early-can-boost-your-finances">student loans</a>.</p> <p>Once you graduate and start paying back your student loan, however, you might begin to receive refinancing offers. But receiving an offer to refinance your student loan doesn't mean you have to jump at the opportunity. Here are four signs that you should refinance your student loan.</p> <h2>1. You Need a Better Interest Rate</h2> <p>One of the main reasons graduates refinance their student loans is to get a lower interest rate, which translates into a lower monthly payment.</p> <p>Student loan rates vary depending on whether you have a federal or private loan. If you have a federal student loan, which are easier to get with no credit history and low income (these comprise most of the loans I have), you'll pay a fixed-rate for the duration of the loan term. But there are different types of federal student loans. Direct Subsidized and Unsubsidized Loans offered by the federal government have a <a href="https://studentaid.ed.gov/sa/types/loans/interest-rates">fixed interest rate of 4.29%</a>, and federal Perkins Loans have a fixed rate of 5%. Your rates may be higher, depending on when you took out the loan.</p> <p>These rates might seem reasonable, but if you do some research you'll find that many private lenders offer better rates on their student loans. For example, SoFi and Earnest have student loan rates starting at 1.90% for variable rates and 3.50% for fixed rate.</p> <p>Refinancing and getting a cheaper rate and monthly payment frees up your cash, giving you more disposable income to pay off other debts or build a savings account.</p> <h2>2. You Have a Higher Credit Score</h2> <p>Of course, refinancing a federal or private student loan doesn't guarantee the lowest rate. To qualify for an interest rate lower than what you're currently paying, you need a high credit score.</p> <p>Unfortunately, federal student loans offer the same rate regardless of a borrower's credit history. So a student with an Unsubsidized Direct Loan and no credit history pays the same rate as a student with the same loan and a 700 credit score.</p> <p>If you have a credit score in the high 700s or 800 range &mdash; thus able to qualify for the best loan rates &mdash; a federal lender isn't going to drop your rate. A private lender, on the other hand, weighs your credit score, debt, and income when determining your rate. Refinancing with a private lender makes sense if you've built a strong credit history and are looking to save money.</p> <h2>3. You Need to Simplify</h2> <p>If you have both federal and private student loans (I'm with you here, too), juggling multiple lenders and payments can be overwhelming and confusing. Refinancing and combining your federal and private loans into a single debt can simplify your finances.</p> <h2>4. You Have a Stable Job</h2> <p>Although refinancing your federal and private loans into a single loan can simplify your bills, you need to evaluate your job situation and then decide whether now's the best time to give up your federal benefits.</p> <p>If you have multiple federal loans, you can apply for a Direct Consolidation Loan and combine them into a single one. But unfortunately, you can't consolidate private loans into a federal loan. Therefore, if you have a mix of federal and private debt, and you're looking to consolidate, the only option is refinancing with a private lender.</p> <p>A private lender might offer a better rate, but they don't always offer the protection or benefits of a federal loan, such as flexible repayment options. If you have a federal student loan and experience economic hardship after losing a job, you can apply for deferment or forbearance and temporarily stop making your payments. Or you can negotiate a lower monthly payment. Depending on your occupation, you might even qualify for <a href="https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation">public service loan forgiveness</a> or teacher loan forgiveness. Unfortunately, these benefits aren't necessarily offered with all private loans. Check with each prospective lender to understand their precise offerings.</p> <p>Before refinancing a federal loan into a private one, seriously consider the stability of your job and income. If you're a high-income earner working in a field with a low unemployment rate, by all means, switch from a federal loan to a private loan if you can save money. But if you have other debts, a low-paying position, or you're still living paycheck-to-paycheck, it might be better to stick with a federal loan, just in case you need to take advantage of guaranteed hardship provisions.</p> <p><em>Are there other signs that you should refinance your student loans that you'd like to add? Let me know in the comments below.</em></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/4-times-student-loan-refinancing-can-save-you-big">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/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-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/prioritize-these-5-bills-when-youre-short-on-cash">Prioritize These 5 Bills When You&#039;re Short on Cash</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/12-easy-ways-to-avoid-student-loan-debt">12 Easy Ways to Avoid 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/8-tax-tricks-to-try-if-youre-stuck-with-student-loans">8 Tax Tricks to Try if You&#039;re Stuck With 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/what-s-the-difference-between-student-loan-refinancing-and-consolidation">What’s the Difference Between Student Loan Refinancing and Consolidation?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management Education & Training credit score federal loan interest private loan refinancing student loans Thu, 27 Aug 2015 13:00:12 +0000 Mikey Rox 1527052 at http://www.wisebread.com 3 Private Lenders That Can Really Save You Money on Your Student Loans http://www.wisebread.com/3-private-lenders-that-can-really-save-you-money-on-your-student-loans <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/3-private-lenders-that-can-really-save-you-money-on-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/new_graduate_000021016547.jpg" alt="New grad refinancing student loans with private lenders" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Unlike mortgages and cars loans, the options for refinancing student debt have always been few and far between. Now, a handful of innovative lending startups are helping borrowers trim away at the $1 trillion in outstanding <a href="http://www.wisebread.com/7-ways-paying-off-student-loans-early-can-boost-your-finances">student loan debt</a> owed by college graduates. It's a big market. Two-thirds of students at four-year private schools and more than half of all students at public ones take out loans, according to federal data.</p> <h2>SoFI</h2> <p><a href="https://SoFi.com/wisebread">SoFi</a>, a San Francisco company, says it saves borrowers who refinance their loans an average of $9,400 over 10 years by offering low fixed-rate and variable interest loans, as well as career coaching. An anonymous reviewer on CreditKarma rated SoFi five stars, saying the firm helped him <a href="https://www.creditkarma.com/reviews/personal-loan/single/id/sofi-personal-loans?pgsz=25&amp;prdhlder=0#reviewsListFullWrapper">save $900 per month</a> in interest and slashed more than 60% off of his original interest rate. Not too shabby.</p> <p>No, it's not too good to be true. But there is a catch.</p> <p>SoFi's loans are limited to &quot;highly qualified&quot; graduates hailing from an exclusive list of colleges and universities. If your school is on the list, however, SoFi will tap into your alumni network, connecting you to investors from the same alma mater. It's sort of like banking meets LinkedIn. SoFi makes borrowing personal, which comes with a slew of added benefits &mdash; opportunities for career advising, networking, and entrepreneurial support. In fact, SoFi claims its <a href="http://www.bizjournals.com/sanfrancisco/blog/2015/03/sofi-social-finance-student-loans-mortgages-ipo.html">novel alumni lending scheme</a> has helped 60 members find new jobs and more than 20 entrepreneurs start new businesses. &quot;I'll admit it,&quot; said Jennifer Beall, a Northwestern graduate whose SoFi story is trumpeted on the firm's webpage. &quot;I'm obsessed with SoFi. I discovered SoFi and began the process of refinancing my loans, which led to over $5,000 in savings on interest.&quot;</p> <h2>Upstart</h2> <p><a href="https://www.upstart.com/">Upstart</a>, another new, low-cost lender, considers things like your academic performance and work history when calculating your rate. Shedding student debt is a whole new game when your rate is based on Upstart's predictive modeling algorithm, which measures <a href="http://millennialmagazine.com/paul-gu-tackles-the-issue-of-student-loans-with-upstart/">your potential future income</a> &mdash; not just what you're currently earning. Folks with advanced degrees and good jobs &mdash; or at least a solid job offer &mdash; will get the best rates from Upstart. Co-founder Paul Gu describes the algorithm as imperfect, opening the door to many borrowers who might get shut out by traditional lending banks, while unintentionally excluding others. Gu admits that he himself doesn't even qualify for a loan through his own company. The algorithm, he says, is a work in progress.</p> <h2>CommonBond</h2> <p><a href="https://commonbond.co/choose-your-loan?referrer=b75172e7076c5472bed5baec5e28309c&amp;referred">CommonBond</a>, another non-bank lender, has so far handed out more than $200 million in loans to more than 2,000 borrowers with MBA, law, medical, and engineering graduate degrees. Like SoFi and Upstart, not every student with debt will qualify for refinancing. What sets CommonBond apart from other alternative lenders is that it allows student loan debtors to consolidate undergrad and graduate loans into a variety of fixed rate, adjustable rate, and hybrid loans. The company claims its borrowers save, on average, $10,000 over the life of the loan. There are no application fees, no origination fees, no prepayment penalties.</p> <p>Let's recap. With private lenders like SoFi, Upstart, and CommonBond, you can slash your interest debt by refinancing. That is, if you qualify. These firms adhere to nontraditional eligibility requirements, which can be great &mdash; so long as you earned the right degree or attended the right college or landed the right job. These new, lower-cost lenders are mostly going after students they consider sure bets. And who could blame them? About 10% of the 4.7 million students who graduated with federal loan debt in 2011 had defaulted by 2012, the government reports, which means they didn't make any payments for at least nine months.</p> <p>The bottom line: you can save a ton by refinancing your student loans with one of these new-age private lenders &mdash; so long as you fit the profile of what these firms classify as a &quot;safe bet.&quot;</p> <p><em>How are you paying off your student loan(s)? Have you considered consolidating with one of these lenders?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/brittany-lyte">Brittany Lyte</a> of <a href="http://www.wisebread.com/3-private-lenders-that-can-really-save-you-money-on-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-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/4-times-student-loan-refinancing-can-save-you-big">4 Times Student Loan Refinancing Can Save You Big</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/12-easy-ways-to-avoid-student-loan-debt">12 Easy Ways to Avoid Student Loan 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/what-s-the-difference-between-student-loan-refinancing-and-consolidation">What’s the Difference Between Student Loan Refinancing and Consolidation?</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-ways-to-get-student-loan-debt-forgiveness">8 Ways to Get Student Loan Debt Forgiveness</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 private lenders refinancing school student loans Thu, 11 Jun 2015 13:00:13 +0000 Brittany Lyte 1448399 at http://www.wisebread.com