Archive | November, 2013

Your Federal Loan Repayment

25 Nov

Honest businessman

photo by: Debt.org

Alanna Ritchie is a content writer for Debt.org, where she writes about personal finance and little smart ways to spend (and save) money. Alanna has an English degree from Rollins College. Join our Debt.org Google+ Community

 

As you fill out your intent to graduate forms and begin looking into the post-college future, your stomach might start to turn. You might start to panic and it may become difficult to breathe as you start imagining your monthly student loan payments. Stop, take a step back, BREATH, and let’s think about the situation.

But guess what? There’s good news!

Not only do you have a six month grace period after you leave school or drop below half-time attendance for your federal student loans, you also have numerous options for repayment plans. A grace period is a period of time after borrowers graduate, leave school, or drop below half-time enrollment where they are not required to make payments on certain federal student loans. Some federal student loans will accrue interest during the grace period, and if the interest is unpaid, it will be added to the principal balance of the loan when the repayment period begins. Repayment plans are designed to accommodate the needs of graduates entering the job market and receiving introductory salaries, while carrying the responsibility of handling additional bills, like rent, insurance, gas and groceries.

You do have options. If the standard ten-year plan with fixed payments is too much for you to handle, contact your lender to negotiate payments that match your budget. Not sure who your lender is?  You can view all your federal loans and their lenders online from the National Student Loan Database.

Which Plan Meets Your Needs?

Cartoon Family Portrait

photo by Yesenia603

Federal student loans come with a variety of repayments plans that are offering based on requirements such as income, family size, or loan type. Examples of federal loans include Direct Loans or Federal Family Education Loans, which could be Subsidized Stafford loans, Unsubsidized Stafford loans, or PLUS loans. There are three main categories of repayment plans for you to consider.

First, the Graduated Repayment plan will allow you to begin making lower payments. Although, like the Standard plan, this plan must be completed in ten years, the lower payments gives you time to increase your salary. Every two years, your monthly payments will increase.

Second, if the Graduated plan is still more than you can afford, the Extended Plan allows you to take up to 25 years to repay loans. There is more flexibility with this option, as you can choose between a fixed or graduated payment.

Finally, there are four different repayment plans that consider your income as a factor. Some of these plans also consider factors like family size, spouse’s income, and total amount of loans. Although these have similar-sounding names, each has specific requirements and formulas which influence the monthly amount you will owe.

Four plans with income factors:

Federal Loan Consolidation

While you are researching different payment cycles and methods, you should consider a Federal Loan Consolidation.  A Federal Loan Consolidation allows you to merge all your Federal Student Loans into one loan.  This can include your Subsidized Stafford Loan, Unsubsidized Stafford Loan, and Perkins loans.  Once all your Federal Student Loans are merged into one loan, you will only have one monthly payment and one interest rate attributed to the loans.  As you can see, a Federal Consolidated Loan allows for an easier way to manage monthly repayment.

How Can You Prepare Now?

cartoon roadmapGet in the habit of putting a portion of your paycheck in savings now, before you start paying back your loans. This will force you to make a budget and spend less every month, so when the time for repayment comes, it will be easier to part with this percentage of your paycheck.

The money you save up during your grace period can also be used as an emergency fund of accessible cash for unexpected situations. This cushion can enable you to afford your loan payments even when you have unexpected expenses such as a flat tire, broken arm or speeding ticket. Preparing yourself for the future can protect your loan debt from growing any larger.

Make sure your loan servicer has updated information, including your phone number and email. Your servicer will need this information in order to communicate any new information on your loans, including when your next bill is due.

Choosing a plan and taking a proactive approach with your finances can help you smoothly adjust into your repayment period.

Finding Deals on Seasonal Clothing

4 Nov

Raysha Duncan Purdue University Student and Peer Counselor
www.purdue.edu/mymoney

It’s that time of year again! The weather is quickly turning chilly and everyone is shivering on the walk to class in the morning and sweating on the walk from class at the end of the day. A friend of mine joked last January that you could tell how early someone had gotten to campus by the several layers they had on. And that is totally true for this time of year. I drive 20 minutes to campus, so every morning I know if there’s the smallest bit of a chill I need to have my jacket on because my car will be COLD. And as the time comes for putting on layers, the time for spending money on those layers comes as well.

By: October Rebel

By: October Rebel

It can be really tempting to buy a new coat every year or the newest hat because you know you’ll wear it every day, right? But, keep in mind that while it is important to stay warm as it gets cold, you don’t have to break the bank to do it. Three of my favorite jackets for this in-between warm and freezing season are from Goodwill, and I paid only $8 for all three. Great deals like this aren’t the easiest to come across, unless you’re willing to look. And if you want to save money, you have to be willing to look.

I would suggest that you start your seasonal clothing shopping in your own closet. What can you transition into for the colder months? What can you layer? What do you still need? Move to your closet at your parents’ house (if you still have stuff there too). Maybe there you’ll find your winter coat or a jacket you liked but it wasn’t cool at your high school so you couldn’t wear it until now. See if your family members have extra gloves or hats that you can have as a ‘just in case’ for the winter months.

Now, from here you will have to start spending some money on your seasonal clothing, and you want to be careful about how much you are spending to advoid

Photo by: Southern Charm

Photo by: Southern Charm

draining your hard earned savings. Since you are spending money, you should definitely budget and plan ahead accordingly. You do this when you grocery shop, why shouldn’t you plan ahead for your necessary (and some unnecessary) clothing purchases also? Figure out what it is you’ll need for the winter (warm clothes, waterproof shoes, shirts with sleeves, etc.). Be reasonable and only plan to buy things you will actually wear. You could always make an imaginary shopping cart online so you know what you want to be keeping an eye out for, or to avoid the temptation of clicking ‘check out’, you could always make a fashion board on Pinterest. This is always how I shop first. I shop in an imaginary world, figure out what I like, and then go purchase for super cheap (usually at Goodwill). I like to plan ahead… So my Pinterest fashion board is huge.

I always advocate for thrift shopping, so I would suggest that next, you move to your neighborhood thrift shop. My personal favorite is Goodwill, and we have a pretty awesome one near campus. The first Saturday of every month is 50% off day, so if you can make it to one of those days, you can buy twice as much stuff for the same price as any other day. You have to be patient with thrift shopping. You have to look through everything and be willing to admit that you really do wear 7 different sizes in pants because all brands are different. But, there are some real gems in there if you just keep looking!

Photo by: Never Not Knitting

Photo by: Never Not Knitting

If you are still struggling, I would suggest signing up for store notifications to get the best deals you can on clothes. I just shopped the Old Navy ‘Thank You’ event after getting an email from them and got 30% off my entire purchase (including clearance items). That’s a steal in my book.

What if you’re set for the winter? Plan ahead for the next season, some places still have swimsuits and flip-flops on sale. You could be all set for spring break before second semester even starts.

What are some ways you save money when shopping for seasonal clothing?

%d bloggers like this: