Employer-Paid Student Loan Repayment Could Soon Be a Thing

Written by adminFebruary 21, 2019
Student Loan Consolidation

Student loan debt currently hovers around $1.5 trillion dollars. Right now, there are 44 million Americans, mostly millennials, who are fighting for their financial lives. Student loan debt is #2 nationally, second only to mortgage debt. According to the experts, this much debt is going to seriously harm the economy, if it isn’t already.

Desperate for help, many of these students are begging the government to come up with a solution. In fact, many candidates promise to make college free or even offer full loan forgiveness. On the other hand, the government says it’s not fair to the taxpayers. If someone takes out a student loan, they should be required to pay it back.

That leaves lawmakers trying to figure out other solutions. A new idea is being floated around Congress and the Senate that is gaining support from both houses. It would allow employers to make tax-free contributions to their employee’s student loan debt problem. The amount could equal as much as $5,250 every year.

“That takes an existing legislation and just makes a slight tweak to make it the cover the cost of taking class or covering a student loan,” said Mark Kantrowitz, president and vice president of research at Savingforcollege.com. “That might be an elegant way to do this.”

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A Student Loan Problem

Bills like this have been proposed before. More people are looking to the government to help with their student loan problem. That means lawmakers are listening and are at least proposing helpful solutions. If they don’t come up with something soon, it’s going to become a major detriment to the U.S. economy.

If you graduate college with massive piles of debt, it’s difficult to get by. By the time a person pays rent, utilities, and buys food, there’s not much left. What we’re seeing as a result of this problem are people entering their 30s with virtually no savings. Many people are also skipping out on health insurance because they simply can’t afford it.

Student loan debt is already impacting the economy in several ways. If you have a new generation upcoming who can’t afford to buy things, it’s going to struggle. Millennials are putting off major life decisions and it’s hurting several industries. They’re waiting to get married, have children, buy houses, and more.

It’s getting to the point where young people are regretting going to college. They often don’t feel it was worth the immense amount of debt. It many cases, it can take 10-20 years to fully pay off. With stagnant wages and the rollercoaster economy, the situation will only get worse.

Tax Exemption Help

Because student loan debt is such a major problem, it’s going to take more than one solution to solve it completely. “Paying off student debt is something all of America is going to decide to get aggressive on and go after. It’s a huge number. We can only hope to contain it and hope to get it down,” said Aaron Pottichen, president of Texas-based CLS Partners.

http://financialhelpers.com/student-loan-payments-may-soon-be-taken-from-your-pay/

Lawmakers are hoping that more employees will consider offering these types of benefits. Surely, if there’s a tax incentive for companies, they will be more likely to sign on. It’s also a great recruitment and retention tool for businesses. It’s expected that this bill will pass hopefully in the next few months.

“Republicans love tax cuts, and Democrats love making college more affordable,” Kantrowitz said. “This fits in the center of their Venn diagram.”

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Student Loan Payments May Soon Be Taken from Your Pay

Written by adminFebruary 18, 2019
Student Loan Consolidation

If you have a student loan, you might soon be forced to have your payment automatically deducted from your paycheck. This is usually a tactic used by collection agencies. If you’re not paying your debt, they have a variety of tools to get you to pay. Those tools can include docking your pay and taking your tax refund.

This time around, it’s a lawmaker who wants your student loan to be paid through your paycheck. Senator Lamar Alexander hopes to make this new process into law. The Republican senator from Tennessee laid out his plan earlier in February. He hopes to completely update the financial aid and student loan repayment systems.

Currently in the United States, 44 million Americans owe $1.53 trillion worth of student debt. This isn’t just a major problem for the students. It’s also a problem for the government who keeps issuing loans to people who can’t pay them back. While many of these students hope the government would just forgive the debt, the government, so far, doesn’t agree.

If you sign the dotted line to take out a student loan, it is your job to pay it back. That is the expectation when you take out any loan. But a larger portion of these borrowers are going into default and it’s leaving taxpayers to fill in the gaps. The Republicans in office don’t think that’s fair to the rest of the country.

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A New Student Loan Plan?

Senator Alexander is a chairperson on the Health, Education, Labor, and Pensions Committee. It’s his job to help figure out solutions to these problems, including the mounting student loan crisis. Still, while it may seem extreme to expect these student loan payments to come directly out of your paycheck, the plan might be helpful in other ways.

For example, the individual will be placed in a repayment plan that would be based on your income. So, if you’re not making a lot of money, the amount taken out of your check would reflect that. The plan would never require a person to pay more than 10% of their current income. If you’re not making anything, you get a bit of a break.

“It makes sure if there were no money earned, there would be no money owed,” Alexander said. “And that would not reflect negatively on a borrower’s credit.” This new student loan plan would be equivalent to a 10-year mortgage with equal monthly payments.

An Accountability System

In addition to the idea above, Sen. Alexander’s plan would also come with some type of accountability system. The details of that system are unknown currently. Still, the senator believes there needs to be one in place to ensure you’re making payments on your student loan. If you’re doing as expected, the benefits would be positive.

Alexander believes this accountability system would lower the cost of tuition in many instances. It would also discourage schools from offering programs that aren’t worth it to students. “All three of these proposals should help students afford college and make sure that the degree they earn is worth the time and money they pay for it,” he said.

http://financialhelpers.com/new-report-finding-problems-with-student-loan-servicer-oversight/

Whether you agree this student loan program would work, at least they’re trying. It offers both benefits to the borrowers and ensures the government gets their money back. Federal Reserve chair Jerome Powell warned that this crisis could severely harm the economy. Millennials are hurt the most by student loan debt and it’s not looking good for the future if nothing is done.

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New Report Finding Problems with Student Loan Servicer Oversight

Written by adminFebruary 15, 2019
Student Loan Consolidation

When the government offers federal student loans to citizens, they task companies with the job of overseeing the process. Currently, the U.S. has hired nine different companies specifically for this job. A student loan servicer has the task of ensuring that everything is being done by the book. This is to protect both the student and the government.

But a new report is revealing that all nine student loan servicer companies have failed their jobs. Not only that, but they’ve been failing for several years. The Department of Education hired an independent inspector who revealed this new data in a report. What’s worse is, these companies have regulators who neglected to hold the servicers responsible.

This report focuses on how each student loan servicer oversaw the loans under their jurisdiction. That includes giving the right advice and are in compliance with the government. As it turns out, they weren’t following the rules and no one held them accountable. This, in turn, hurt a lot of people with student loan debt.

According to the report: “In most cases … FSA did not take actions stronger than correcting the accounts of those affected (and) rarely did the FSA require the servicer to conduct a full file review,” the report said. “FSA also rarely penalizes servicers for recurring noncompliance.”

The FSA wasn’t having it. They replied:

“We fundamentally disagree with the (Inspector General’s) assertion that we do not have processes and procedures in place to ensure loan servicing vendors provide high-quality, compliant service to borrowers,” said Liz Hill, a spokeswoman for the Department of Education. “That said, we also are continuously looking for ways to improve.”

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The Student Loan Servicer and their Failed Responsibility

One main reason why people get government student loans is they are safe. They’re backed and protected by the federal government. What’s frustrating is seeing that the nine companies they hired to oversee their loans are effectively screwing people. Each student loan servicer is guilty of improper handling of accounts.

This report revealed how they’ve been improperly dealing with borrowers by lying to them. We know that millions of Americans are struggling with their student loan debt. Because of that, the government has created a few programs to help get people on track. Those avenues can include repayment programs and even total loan forgiveness.

Of course, a student loan servicer doesn’t want the borrower to get any kind of break. They want the total amount due. So, how have they handled their job so far? They’ve been outright dishonest. They failed to alert borrowers to all of their options and generally guided them against their best interest.

“The report makes clear that the issues borrowers have been facing in the student loan market are far more pronounced and more significant than we even realized,” said Seth Frotman, president of the Student Borrower Protection Center. Frotman was the former student loan ombudsman who resigned last year.

Holding the Servicers Accountable

Currently, no student loan servicer is doing the right thing. They can be penalized for not following the rules, but it appears very little has been done thus far. Yet, the government has paid these servicers $1.7 billion for the sole job of properly managing these accounts.

According to the report, both students and taxpayers have been harmed by this lack of oversight. Not only are students being lied to, but tax money is being managed poorly. “FSA’s not holding servicers accountable could lead to a servicer being paid more than they should have (and) borrowers might not have been protected from poor services,” the report says.

http://financialhelpers.com/the-true-cost-of-love-on-valentines-day/

Navient is one of the big student loan servicer companies out there. They are currently in a major lawsuit against five states. The allegations against Navient include failing to direct borrowers into the right repayment programs. It wasn’t just Navient, though. All nine companies engaged in the same deceptive practices.

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The True Cost of Love on Valentine’s Day

Written by adminFebruary 14, 2019
Life Style

Ahhhh, Valentine’s Day. Or, Singleness Awareness Day if you’re one of the unlucky few without someone today. It’s okay, this writer is currently single and understands how you feel. But for the rest of you lucky ladies and chaps, Valentine’s Day often comes with a price. That is, unless you’re one of those couples who agrees NOT to do something this year.

Only half of all Americans polled said they plan to celebrate Valentine’s Day. Those that do are expected to spend a record amount of money this year. This will leave a handful of companies to look longingly into their earnings this year after it’s all said and done. So, what is the true cost of love?

According to the National Retail Federation, it’s estimated that $20.7 billion will be spent on Valentine’s Day this year. That’s up 6% from last year’s number of $19.6 billion. There are certain industries that thrive during this time of year. In particular, jewelry companies, clothing, candy, flowers, and even gift cards are popular. Here’s how they all break down:

Expected Valentine’s Day Sales for 2019

• Jewelry: $3.9 billion
• Clothing/Lingerie: $2.1 billion
• Flowers: $1.9 billion
• Candy: $1.8 billion
• Gift Cards: $1.3 billion

The Bouqs Company, an online floral retailer, revealed that they can easily make $1 million on special holiday occasions like Valentine’s Day. Mother’s Day is another huge retail day for them as well. Candy companies also do very well. The Ferrara Candy Company makes the popular Branch’s Candy.

Branch’s Candy is hoping to reel in a large number of sales this year due to a new product. They’re calling it Conversation Hearts and so far, it has seen a 10% increase in sales. The company wouldn’t speculate on estimated sales. Yet, the major candy maker Hershey’s also says they expect to have an increase of 3.67%.

http://financialhelpers.com/national-debt-hits-22-trillion-for-the-first-time/

Hallmark says Valentine’s Day is the #2 largest card day only behind Christmas. Each year they create over 900 different Valentine’s Day card designs and sell an estimated 144 million. Cards, flowers, and candy are the main staple around this holiday of love. Jewelry is a big seller too. Tiffany & Co. says their profits are up 15% this year.

Of course, none of these numbers appear to add in money spent on fancy dinners at restaurants. Still, it goes to show how much people are willing to spend to show their love for each other.

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National Debt Hits $22 Trillion for the First Time

Written by adminFebruary 13, 2019
Politics

When we say $22 TRILLION dollars, it might not make people blink too much. It’s just a number, right? Does the national deficit actually impact anyone’s lives? We will still go about living as we always have, working and spending. The national debt might seem like more of a problem for politicians. They only seem to care about seeing who can outspend each other, regardless of party.

But the reality of the national debt goes deeper and people should care more about what it signifies. It means that our politicians, the people we hire to take care of us, have failed us. They’ve outspent our budget to the tune of $22 trillion. We rely on these people to take care of our needs and ensure the future is bright for our children.

During President Trump’s State of the Union address last week, there was not a single mention of the national debt. Neither did the Democrats during their rebuttal. They seem more interested in playing political games and one-upping each other. In fact, one politician was asked about the national debt after the speech. His reply was: “No one here cares!”

But, as Americans, we should all care about the national debt. That is OUR money they’re playing around with. They’re wasting millions…billions even, on frivolous things. The impact of this problem is going to be felt maybe not today but in the near future. It’s going to tank our economy if we don’t figure out a solution.

The Impact of the National Debt

There is a major impact to the massive national debt. And the reason why most politicians don’t care is most of them will be retired soon. They’ll be gone before the worst of the problem hits. But that doesn’t mean there isn’t already a problem happening. For one, where there’s debt, there’s interest that needs to be paid.

$500 billion of our tax dollars is automatically rendered dead money. Before we pay for anything like roads or infrastructure or military, that first chunk goes away. Each year we pay that $500 billion in interest, which is a number that continues to grow. Paying that much in straight up interest is going to take more usable money out of the budget as the deficit grows.

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Still, we’re not done dooming and glooming this situation. In just a few short years, we set to hit the $30 trillion mark. That means the interest we pay towards the national debt will grow to $1 trillion. Down the drain, every single year. That’s the approximate asking price to start repairing the entire country’s infrastructure.

More Trouble Ahead

Currently, the United States adds $3 billion to the national debt every day. Can you imagine overspending that much? Half of that goes directly towards the interest on the debt. And it seems like the interests of the Congress and Senate are to continue spending even more money. This is especially true for the newly elected socialist Democrats.

Pushing for programs like Medicare-for-All and free college tuition, it seems like a good idea. But Medicare-for-all by itself will cost over $40 trillion over the next decade. That’s simply money we don’t have, even if we dramatically increase taxes. Because our politicians love to spend and make promises, the national debt has no chance of ever going down.

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New Student Loan Repayment Program to Help Fight Opioid Abuse

Written by adminFebruary 12, 2019
Student Loan Consolidation

There’s a new student loan repayment program that you should know about. This new program can help students repay their debt at a tune of $75,000. It was created to help fight back against two different epidemics currently ravaging the United States: opioid addiction and student loan debt.

Currently in the United States, 44 million people owe $1.53 trillion in student loan debt. This type of debt is second when it comes to all types of debt. Only mortgage debt is higher than the amount owed on student loans. These numbers only continue to climb as college becomes more expensive.

And while these numbers are bad, the number of people who die due to opioid-related drug overdoses is horrifying. The Department of Health and Human Services says that around 130 people die each day due to opioids. Around 2 million Americans abuse drugs and almost 50,000 have died from an overdose.

Thankfully, a new loan repayment program is helping to fight back against both epidemics.

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The Student Loan Repayment Program

The National Health Service Corps is a division of HHS. They created the Student Loan Repayment Program to help fight back against opioid addiction. How does it work? It helps by enticing healthcare professionals to work in the field of substance abuse. And this new program will give up to $75,000 to qualified healthcare participants.

These professionals must work for three years at an approved drug disorder site to qualified for this program. This program is looking to help usher new workers into areas where there are massive shortages. Therefore, there simply aren’t enough healthcare professionals helping to battle against opioid addiction.

Even working part-time in this field can grant you $37,500 in student loan repayment. This is how desperate they are for help. Without medical professionals in this field, the opioid crisis will only deepen over the next few years. The federal government, including the Trump administration, have made battling opioid addiction a top priority in their agenda.

http://financialhelpers.com/trumps-tax-cuts-resulting-in-lower-refunds/

The purpose of the Student Loan Repayment Program is to attract more high-quality doctors and nurses into this field. They want to give specific attention to under-served communities that are being ravaged by drug addiction. Still, these communities are in desperate need for preventative measures, top-notch treatment, and even recovery services.

How to Apply for the Student Loan Repayment Program

Officially called the NHSC Substance Use Disorder Workforce Loan Program, there are several requirements and qualifications.

Here’s a list of the eligible and much-needed healthcare professionals who can apply:

• Physicians
• Pharmacists
• Midwives
• Nurses
• Behavioral Health Professionals
• Substance Abuse Counselors
• PAs

Besides that, there is a deadline for applying for this student loan repayment program. You have until February 21, 2019 at 7:30 PM Eastern.

So, it’s important to note that this program is different than the typical Public Service Loan Forgiveness program. Contact Financial Helpers today for more information.

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Trump’s Tax Cuts Resulting in Lower Refunds

Written by adminFebruary 11, 2019
Life Style

Whenever a U.S. President cuts taxes, Americans get optimistic. At least, those with any financial understanding will realize that tax cuts are great. They stimulate the economy by giving people back more of their money. When they have money, they spend that money, which creates jobs.

So far, the economy is booming. Unemployment is down to historic lows. While this is great news, there’s another aspect to Trump’s tax cuts that are having unintended consequences. As we roll towards tax season, many people have already filed and received their refunds. In many instances, where people expected a refund, they received a bill showing they owe.

Trump’s Tax Cuts and Jobs Act made some cuts to the individual taxpayer rates. The largest cuts were for businesses. The corporate tax rate went down from 35% to 21% and it gave these businesses more deductions. While this has allowed businesses and the economy to thrive under Trump’s reign, that’s the extent of the benefits.

Tax Cuts Creating Lower Refunds

Judging by early returns, it appears as if the average refund is down 8% for 2019. This is the first year that the new tax code went into effect. Many people are dismayed to see their refunds are smaller than the previous year. In 2017, the average return was $2,035. So far in 2019, that number is down slightly to $1,865.

This new tax law, passed in 2017, brings the most sweeping changes to the economy in over 30 years. It brought about lower individual rates as well as a doubling of the standard deduction. While this is the case for most people, there were reductions in other popular deductions. This means that many Americans are losing crucial tax breaks they once relied upon.

After the government shutdown, it was unclear if the IRS would even be fully operational. It was said that refunds wouldn’t be pushed out in time. That gave a lot of Americans concern, as many rely on that tax refund for investment. Many people enjoy their refund to make major purchases, as down payments, or to pay off debt.

Many economists are saying these tax cuts might just harm the economy. If people receive less money back, or are even expected to owe, it cuts into spending. Many Americans turned to Twitter to vent their frustrations over this issue. Many of them are Trump supporters who are saying they were duped into believing the tax would help the middle class.

The Truth About the Numbers

While people are frustrated with a lower return, that doesn’t mean the tax cuts aren’t working to help stimulate the economy. Most of the bluster is politically motivated. In reality, most of these people saw a bump in their take-home pay. If you pay less in taxes, then, of course, you’re going to have a lower refund. That’s how it works.

http://financialhelpers.com/5-successful-traits-millionaires-have-that-you-should-follow/

The reduced deductions do hurt, but overall, the tax cuts have had a positive impact on the U.S. economy. Currently, the Trump administration is mulling over even larger tax cuts aimed directly at the middle class. Of course, this would also result in getting less money back during tax season. Yet, we could all use that bump in take-home pay.

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5 Successful Traits Millionaires Have that You Should Follow

Written by adminFebruary 8, 2019
Life Style

Most of us at some point in our lives have shared the desire to become a millionaire. To have a seemingly endless supply of money and less financial concern is attractive. It is estimated that there are 10 million millionaires in the United States. For the rest of us, it seems as if struggling financially will be our common theme.

But what if there are certain traits that allowed a person to become a millionaire? What would happen if we followed these traits and applied them to our lives? The reality is, millionaires don’t live like the rest of us. They don’t think as we do. They have a motor that won’t let them quit reaching for the stars.

So, let’s take a look at several traits millionaires have that can change the way we see money and wealth. Note: In no way are we saying that you’ll become a millionaire by doing these things. We’re simply sharing traits that can improve your relationship with money.

1) Millionaires are Extremely Focused

Most millionaires did not wake up with money in their bank account. There’s this common idea that if you have a lot of money, it was passed down to you. That’s not true at all. One common trait all millionaires share is that they had a single goal. It’s not just the goal that one day they would have a lot of money. We all have that goal.

But that wealth became a single driving factor. They focused on and molded their life around it. No matter what obstacle they came before them, they crashed through and kept going. That’s the difference between them and us. The ‘common’ person usually gets scared off the path. Something gets in their way and they immediately veer off where there’s less resistance.

We don’t take chances. We don’t keep fighting for our dreams. Learning from our mistakes seems hard to us. So, the very first obstacle that comes our way makes us want to give up and go in a different direction. This is not what successful people do. Millionaires know what their goal is and they’re focused on getting there. Nothing can sway them.

2) They’re Always Improving Themselves

Sort of going along with the first point, millionaires decide to learn from their mistakes. They try something, it fails, and they learn how to do it a different way. This is how most inventions and cures are discovered. Successful people don’t take no for an answer. In this way, they’re constantly looking for new ways to improve themselves.

In order to figure it out, people who become millionaires are always continuing their education. This doesn’t mean they go back to college but are regularly reading books, watching videos, and attending seminars. They understand the value of learning from those who came before and blazed new trails.

3) They Take Risks

One major trait millionaires have is that they’re not afraid to take risks. That doesn’t mean every single risk is rewarded. A lot of risks end up failing, but that’s part of the fun. Not being afraid of failure and knowing they will learn from it is what allows them to go beyond the norm. There’s no such thing as a wasted opportunity.

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The rest of us like to play it safe. We might get a great idea, but we put it on the shelf and forget about it. Or we get too busy and our dreams fade away. We even have a lot of self-doubts that prevents us from getting outside of our comfort zone. Millionaires jump at the chance to seize any opportunity they can get their hands on.

4) They’re Not Big Spenders

This might seem contradictory at first. You’re thinking, “Rich people are always spending money. They have expensive cars and huge mansions.” But that’s just enjoying the fruits of their labor AFTER they’ve made it. Their big philosophy is not to work for money, but to have their money work for them. That happens by crunching and saving until they reach their point of success.

5) Millionaires Lead

Millionaires tend to be a ‘take charge’ type of people. They don’t sit back and wait for something to happen. They don’t let fear hold them back. If they want something, they go get it. If they have a goal, they’ll do whatever it takes to reach it. And they don’t just keep that energy to themselves. They reach out to others and lead by example.

Being a leader isn’t just being ‘the boss’. It means inspiring others and lifting them up as they go. That means a lot of people will want to be around those who can elevate their sense of being and awareness. When you’re around more successful people, it changes your thinking. You feel less sorry for yourself and work harder to reach your goals. This is what natural leaders do.

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How Much Do Couples Plan to Spend for Valentine’s Day?

Written by adminFebruary 7, 2019
Life Style

For most couples, Valentine’s Day is a huge part of their relationship. Giving and receiving some sort of gift is common. Going out to eat or having a romantic dinner at home is essential. Unless, of course, you’re one of those people who sees it as nothing more than a money-grab. Even then, if your significant other is expecting something, we dish out the cash to make it so.

So, how much do people expect to spend on Valentine’s Day? The breakdown is actually quite different when looking at the individual sexes. Even the amount of time spent together impacts the amount of money spent. For example, do married couples spend more or less on Valentine’s Day than engaged couples?

Lendingtree revealed a survey that said most men plan to spend around $95. For married couples, that price fell to $57. It would seem as if married couples plan on having less of a romantic day than newer couples. Engaged couples spend $92 while dating couples spend $88. While men plan to spend more money, the reason why the averages drop is women.

On average, women only expect to spend around $41 for their loved one. It goes to show that Valentine’s Day really isn’t a day for the men. Instead, they would rather do the spoiling and the spending to ensure their ladies have an amazing day. So, how do these numbers break down when it comes to overspending?

Overspending/Underspending on Valentine’s Day

There seems to be a fine line on how much is too much…or too little. Spending money on gifts for Valentine’s Day is essential for a lot of couples. But, there are those couples who know money is tight and they have better things to spend their money on. Expensive chocolates, roses, and dinner don’t have to be a part of the plan.

The same survey revealed the couples found overspending on this holiday a much riskier proposition. Just 4% of couples said they would feel disappointed if their partner spent less money. Yet, 25% said they’d be frustrated if their partner spent too much. This is a good sign that most couples have their financial priorities in order.

With this being said, it would appear most couples don’t really plan too far ahead for Valentine’s Day. One-third of couples don’t expect or demand any gift while an even higher number say they don’t have plans. It’s not really a ‘big day’ most couples plan for. Rather, it’s seen as a ‘grab roses on the way home from work’ sort of holiday.

Generational Spending

Valentine’s Day spending isn’t just broken down between the sexes. No, we also have numbers on how each generation plans to spend money. As you would expect, the younger generation plans to spend the most at $113! Generation Z is keeping the romance alive and appears to have the most to gain.

As we branch out into Millennials, they only plan on spending $49, less than have of Gen Z. Baby boomers will spend even less than that, saying they don’t want partners spending too much.

http://financialhelpers.com/interest-rates-for-student-loans-continues-to-rise/

Really, the holiday breaks down into so many age gaps and categories. Those who have the most to gain, the younger generation, plans on spending the most money. They are still at the age where it takes more money to impress that special someone. Over time, less money is spent on Valentine’s Day and often less is expected.

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Interest Rates for Student Loans Continue to Rise

Written by adminFebruary 6, 2019
Student Loan Consolidation

As we’ve all heard, the federal government has decided to once again raise interest rates. The economy is booming, and when that happens, the fed gets eager. Several times they’ve raised the interest rate in 2018. They’ll raise it a few more times in 2019, much to the detriment of people with student loans

Increasing interest rates makes things more expensive. If you have student debt, you’ll end up paying more money towards your total. High interest is what makes all forms of debt harder to pay off. More increases in 2019 could cause substantial problems for those with student loans. First, you have to understand the two types of student loans.

Student loans come with two different types of interest. The first is a fixed rate. This rate is locked in from the moment you get your student loans approved. This rate will not move, regardless of how the fed works their numbers. The sad part is, most students have a variable interest rate.

A variable interest rate means you’ll be paying different amounts throughout the life of your student loans. In most cases, the interest rate you pay is tied to the Fed’s decision. These interest rates are adjusted at least once per year, but like 2018, can be changed multiple times. This can make keeping up with your student loans a difficult task.

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Fixed Rate Student Loans

While it may seem like getting fixed-rate student loans is the answer, it may not be. The government anticipates these changes ahead of time. While you receive a fixed rate that won’t change, they know how to game the system. Federal loans have their interest rates set by Congress.

They determine where to fix the interest rate by the 10-year Treasury yield. That means the new interest rate could get a major push upward. If you plan on returning to school or taking out student loans in the future, even the fixed interest rate will be high. This will often incorporate any increases made to the variable interest rate.

Advice for Student Loan Borrowers

People who borrow money in the form of student loans are hit with a higher interest rate. That’s because when they apply for the loan, they are younger, have little (or no) work history, and no credit history. In most cases, these people would be denied a bank loan. But, because federal loans are guaranteed.

The best way to combat this is to stick with the system. Don’t default, don’t skip payments, and keep working towards your goals. Over time, you will build credit and job history. Your credit score will go up, which would allow you to refinance your student loans. That means you can get a loan with much less interest to pay off the student loans.

http://financialhelpers.com/senior-citizens-also-struggling-with-student-loan-debt/

This new loan would have a much lower fixed interest rate. This means you’ll save thousands of dollars over the length of your repayment term. In order to qualify for this type of loan, you will need to have decent credit. You’ll also have to prove a consistent income over that time. So, the best thing to do is to keep fighting.

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