Archive | May, 2016

Loan Repayment Tips for Recent (and not-so-recent) Graduates

25 May


Whether you’re a recent graduate whose loans are just entering repayment or you have been making payments for several years, there is a very real chance that educational loan payments may be causing you a financial hardship. For recent graduates, there is a lot of info covered in federal exit counseling and it would be easy to have missed some of it.  While there isn’t much that can be done about the amount you owe since you’ve already borrowed it, you can still choose from several different options for repayment.  The Institute for College Access and Success created a Top 10 Tips for recent graduates, a handy reference for borrowers.

If you are able to pay more than the minimum on your loans each month you can reduce your payments and total interest that you will pay. If you are able to do this, you might wonder what the best method is. The two best ways to pay down your loans are the snowball and avalanche methods where you pay either the lowest balance or the highest interest rate, respectively. In addition, if you pair this with an income-based repayment plan but still pay the same total amount on your loans you can allocate more toward your loan of choice and pay it down even quicker while having flexibility of a lower minimum payment if life throws you a curve ball.

Unless you chose otherwise, you’re probably enrolled in the Standard Repayment Plan which spreads your payments evenly over 10 years. This is both the default plan as well as the most aggressive repayment option available. However, there are several other options a borrower can choose which can limit the repayment per month to 10% of  discretionary income and reduce payments to as little as zero dollars per month (depending on income). For more information, check out Acacia Squire’s piece in NPR about her experiences and what options may be available to you.

If you have thought about refinancing your student loans, CNBC recommends not to rush into it. While you may be able to get a better interest rate you lose out on any income-based repayment options in the event that your financial situation has any changes. However if your situation is stable and an income-based plan is not in your future, a lower interest rate could save you thousands in interest throughout the life of your loan.


Income Share Agreements: Connecting Education to Employment Through Financing

18 May

Completion With a Purpose

Kevin James, Director, Higher Education at Jain Family InstituteBy Kevin James, Director, Higher Education, at Jain Family Institute

For those who may have missed it, in mid-April thousands of ed tech entrepreneurs, investors, educators, philanthropists and other edu-wonks converged on San Diego for the annual ASU-GSV summit. The conference, which first took place seven years ago in 2010, serves as a yearly gathering point for those interested in the latest developments in education technology and related services.

As part of the summit, I had the pleasure of moderating a panel on income share agreements (ISAs) that USA Funds®, a sponsor of ASU-GSV, helped to organize.

ISAs are an idea that has been around for decades but has started to get more attention recently as researchers and entrepreneurs seek better alternatives to traditional student debt. Under an ISA, a student receives funds to help pay for school in exchange for agreeing to pay a percentage of his…

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Don’t Panic About Your Federal Student Loans

17 May

From WiseBread New Graduate Help Center: Reyna Gobel, Student Loans Expert

girl surprised by letter


Dear Not-Yet-In-Trouble Federal Student Loan Borrower,

You might have heard that the Department of Education will be sending out letters to millions of student loans borrowers. The letters target borrowers whose grace periods are ending, as well as borrowers who exhibit signs of trouble that could lead to defaulting on their loans. If you haven’t started repayment yet but are fretting about how you’re going to possibly repay all that money — stop worrying.

I’m writing you this letter to not only give you important details about student loan repayment, but also to help you be aware of potential issues well before trouble starts.

I Defaulted — Here’s How to Avoid My Mistakes

I defaulted on a federal student loan simply because I didn’t know it existed. I had over a dozen student loans from different lenders; I forgot about one loan and went into default. It’s easy to do, but it’s also easy to avoid. Just log in to the National Student Loan Data System. You’ll see all your federal student loans on this site, along with contact information. Either arrange to pay each individually, or consolidate them into one loan. This is also a great time to get a free credit report – it can alert you to any problems you might have, like having missed a loan or bill payment.

Then, know yourself. If you can’t keep track of each individual loan, you really need to consolidate them into one loan to streamline payments (ask your loan servicer about consolidation options). Once consolidated, you can still choose a plan where payments are based on income, such as Pay as You Earn. And if you’re interested in the public service loan forgiveness program, know that it’s only available through loans originated by or consolidated with Federal Direct Loans.

Realize That Even With the Pay as You Earn Plan, You Might Have Payment Problems

The income-based Pay as You Earn repayment plan bases payments on your income and family size, but it doesn’t fully consider your expenses if your circumstances change. For example, at some point, you may have to help support a sick parent or child. You could also have bought a home when your income was higher. After a pay cut, a majority of your income could go towards your mortgage.

If you experience a financial setback, you have three options:

  • Call your servicer and see if your Pay as You Earn payment amount can be adjusted. You have to supply your income annually, and you may have forgotten to do so this year, causing your payments to set based a higher income level.
  • Ask for a deferment or forbearance, which are temporary payment breaks. Taking a break should only be done if the situation isn’t permanent. Always take a deferment when possible over a forbearance when any of your student loans are subsidized. The government pays the interest on subsidized student loans during periods of deferment.
  • If your income is lower because you took family leave for six months, you may not want to change your plan. However, for long-term pay cuts where your income-based repayment is too high for your budget, you should ask your servicer to also calculate payment options and see which payment option offers the lowest monthly payment.

Don’t Feel Embarrassed If You Don’t Know Something About Student Loans

I wrote two editions of a 240-page book on student loans, and I still don’t know everything about them. I read articles and play with the student loan repayment calculators every day. There’s always something new to learn. For instance, the public service loan forgiveness employer verification form wasn’t created until after the first edition was released. Now, thanks to that form, you can find out if you qualify for the public service loan forgiveness program right away and register for it right after you start working or after you’ve already started repayment — the choice is up to you. Never be afraid to ask your servicer questions about any of these programs.

Talk to Your Friends Who Are or Will Be in Repayment Soon

I’m not the only person who has experience with and advice about student loans. Talking to your friends can help you figure out repayment options and possibly pick better ones based on their choices and experiences. Just remember, they might have different circumstances than you, such as income level, children, or other debt that impacted their choices. Therefore, you shouldn’t copy their decisions. But you’ll be more informed and learn questions to ask your servicer. Plus, they may have missed payments, recovered, and now have advice about that. Learn from others’ student loan mistakes and victories.

The Most Important Part of This Letter?

The help you get doesn’t end here. You can tweet me anytime — @ReynaGobel— and ask questions. My articles will be posted here every week. You can ask me questions in my CollegeWeekLive web chats or get more helpful advice in my book CliffsNotes Graduation Debt.

Finally, remember you never want to receive a “dear troubled borrower” letter. The second you think you might miss a payment, talk to your servicer about options for a payment break or new repayment plan. With federal student loans, that one call will likely save your credit.


Reyna Gobel is a writer, author, public speaker, and student loans expert.  Her financial advice appears on Wise Bread’s New Graduates Help Center, in her video course How to Repay Federal Student Loans, in CollegeWeekLive newsletters and keynotes speeches, and in her audiobook How Smart Students Pay for School, now in its second edition. Be sure to check out her website for more helpful information on repaying your student loans.

It’s Time to Think Summer

12 May


The spring semester has ended and summer is upon us.  Pat yourself on the back you have made it another semester!  Taking summer classes?  Looking for an internship? What about study abroad? Or even picking up a part-time job? Now is the time to THINK SUMMER.

A summer job is a great way to make a few dollars to pay for various activities or to prepare for the next school year. While many students will rely on the mentality of “any job will do,” others are more mindful about what the job can offer in terms of education. Your choices could also be beneficial for future decisions once you have graduated. These temporary jobs typically can range in three categories:

  • Entrepreneur
  • Career Building
  • Passing Time



Being a young entrepreneur can provide you with a great deal of experience when it comes to developing a business practice. As long as you have a marketable talent or product, you could have a great deal of success starting up a new business using little money.  And starting your own business isn’t as difficult as some may think and it could offer an excellent chance to develop your skills. So, what can be gained from being an entrepreneur during the summer months?

  • Being your own boss
  • Designing your own schedule of pay
  • Developing your own strategies for improvement
  • Practicing marketing skills
  • Developing a sense of responsibility to the business
  • Provides insight to the various aspects of business practices
  • Could potentially turn into a lucrative practice
  • Easily added to a résumé

Career Building

Some jobs available throughout the summer could be beneficial towards your future career. For example, any job that involves communicating with the public can help you gain you valuable skills andPurdue student at work experience. Whether you’re gaining this skill by standing across the counter from a customer or talking to them over the phone, you are gaining valuable communication skills. Regardless of what you’ll decide as a future career, there are jobs that can improve your marketability. Some of the potential benefits from a career building summer job could be:

  • Emphasizing aspects of a job that are related a career
  • Obtaining knowledge of certain criteria for your career path
  • Providing a stepping stone within that organization to obtain a greater position
  • Allowing experience on a small level to determine if you’re on the right path for yourself
  • Improving your résumé by showing experience in related fields

Passing Time

For many students, a job is just a way to pass the summer months and make a few dollars on the side. However, even these jobs can be greatly beneficial to your development both as an individual and a future employee. In some regards, working a variety of jobs before choosing a career path could be more advantageous in the long run. Working a variety of jobs allows you the experience to investigate what types of jobs you enjoy and what types of jobs you really do not.  This experience is vital in picking a successful career.  What kind of benefits could you expect from any summer job?

  • Building character and a work ethic
  • Providing the ability to explore different opportunities
  • Discovering who you are as a person as well as an employee
  • Demonstrates your willingness to work when added to your résumé
  • Could open doors to possibilities you didn’t realize existed

A summer job can be almost anything you need it to be. Whether you want to experience running your own business, improving your career marketability, or just need a job to put gas in your tank – a summer job can do great things for you as an individual. Choose what works best for you and you’ll benefit from the knowledge you obtain. Remember, even menial jobs can offer insight to how the world works.

Ken Myers is a father, husband, and entrepreneur. He has combined his passion for helping families find in-home care with his experience to build a business. Learn more about him by visiting @KenneyMyers on Twitter.

Where Those “Pre-Qualified” Credit Cards Come From & How To Stop Getting Them

11 May

Why do I get so many credit card offers in the mail? And how can I stop them?


John Ganotis from Credit Card Insider talks about:

  • Why you get so many credit card offers in the mail
  • How pre-screened can actually be beneficial to you
  • How you can stop the credit card offers
  • How you can opt back in to pre-qualified offers when you’re looking for a card

The website mentioned where you can opt out:

Graduation Cap Hall of Fame

6 May

You’ve worked hard to get through years of school and graduation is finally coming. While there isn’t much that you can do about your graduation gown outside of stoles and cords, your graduation cap is where you can really shine and reflect all the hard work (and tears) you’ve put into college. So here is some inspiration and DIY advice on having an amazing graduation cap. Be sure to click on the pictures to go to the sources for their advice on making it.

You can use your cap to show off your school spirit


Look fabulous with a bow



Give a nod to a favorite movie or show


Brag about the awesome major you had

(Even if Wumbology isn’t a “real” major)

Show that you’re happy just to have escaped with your diploma


Let the world know what you’re doing after graduation



Maybe be a little bummed that those student loans are due in 6 months


Have one more place to show you’re a crazy cat person

Throw out some Greek love



Get your Disney on


Toss a favorite inspirational quote out there



Or even just to say “Peace Out”


Just remember that you do have to wear your cap on your head for the graduation ceremony and all those pictures after. So be careful about what kinds of things you add on as it might get unnecessarily heavy. You want to have an amazing graduation cap, not a sore neck.

If you love what you see here, check out our Pinterest board that includes everything pictured above and more! Plus even more advice on graduation attire and DIY caps.

Leave any advice you have or a link to your cap in the comments!

High School Seniors: You’ve Picked a College… Now What?!

3 May

clock; text overlay: You've Picked A College...Now What?!

Get excited! Your future awaits you! Take some time to absorb the good feelings after months of stress and financial aid inquiries and balancing senior activities on top of preparing for college. Then, get down to business.

Enjoy Your Last Month of High School!

You only go to high school once. Enjoy being in the same hallways with the same people for a few more weeks and knowing nearly everybody you’re in class with because unless you’re going to a very small college, that will never happen again. I know my high school has a lot of silly senior traditions, and even if they seem silly, participate! You only get to do them once. Pick out a nice outfit for graduation too. You’ll be taking pictures, and they’ll last forever.

Research Your University

Look into some specifics: Where will you live? Do you need to do/register/pay for anything else before you can officially become a (insert school mascot here)? Know what is expected of you before you enroll. Getting all set up way in advance is a good idea because you’ll have enough to worry about with moving out of your parents’ house and into a dorm without having to find a room last minute. Make sure any and all fees and deposits are paid so this transition from high school to college is as smooth as can be.

Make Sure You’re Happy with the Major You’ve Chosen

Changing majors is a really common occurrence with college students. You’re likely to change your major at least once in your undergraduate career. Take a few moments to sit back and make sure you’re still happy with your choice for your first year of college. Chances are that you’re completely satisfied, but it’s been almost six months since you applied, you could have changed your mind. And, if changing your major sounds like something you’d like to do, get in contact with your university and see what steps need to be taken in order to make the switch and any impacts that could have on any scholarships you received. Don’t jump into it right away though; mull it over before making the call.

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