5 Summer Job Ideas for Teachers

If you’re a teacher, you know summer vacation isn’t the life of luxury many people assume it is. In fact, it can be extremely stressful to not receive a regular paycheck during those months off. While many teachers plan and save for summer during the school year, it is still challenging to stretch approximately nine months of pay into covering bills and living expenses for a full year. To help you pad that budget, here are five summer jobs that are just right for teachers. They’ll bring in some extra money and leave time for rest and relaxation. Perfect.

Tutoring and Test Preparation- Your knowledge and teaching experience will service you well as a tutor or test preparation instructor. Whether you offer your services independently or sign with a local learning center, you’ll be doing what you love most- helping kids learn.

Cater Waiter/ Bartender- If you waited tables or tended bar during college, it’s time to brush up on those skills and use them to make some extra money. But rather than getting tied into regular shifts at a restaurant or bar, sign up with a few local catering companies. They will call you when they have work available for parties and other events and it’s up to you to accept or decline, so it’s easy to fit into your schedule.

Special Event Worker- Many of the year’s most anticipated events, concerts and festivals happen during the summertime. And if you get a job as an usher, ticket taker or concession worker at a local venue, you’ll have the chance to see (or at least hear) them for free, and get paid to do so. It’s a great way to stretch your entertainment budget while pocketing some extra cash.

House and Pet Sitting- Want to take a mini vacation and get paid to do it? Offer your services as a house and/ or pet sitter. Staying in someone else’s home for a few days (or longer) while they’re away is a fun way to enjoy a change of scenery without traveling too far. You’re basically getting paid to relax and stream Netflix in air conditioned comfort. What’s better than that?

Online Entrepreneur- Do you have a great sense of style and an eye for bargains? Buying clothing, shoes, handbags and accessories at yard sales, thrift stores or on clearance, then reselling them on eBay or an app like Poshmark or Tuesday can be highly lucrative and doesn’t take much work beyond writing good descriptions and timely mailing of packages.

 

 

5 Ways to Save on Kids’ Summer Camp

For many families, sending children to summer camp is an exciting rite of passage. But it can also be an expensive addition to the family budget, especially if there’s more than one child to pay for. Fortunately, there are several ways to save on sending kids to summer camp, as well as lower cost alternatives that can be just as much fun.

Ask about discounts!  They may not always advertise it, but there’s no reason you can’t ask if the camp has any discounts available. For example, there might be a price break if you send more than one child to the same camp together, or perhaps you can save some money by providing your child with transportation to and from camp, rather than taking the camp bus. Remember, you’ll never know what you might be able to get unless you ask for it.

Use last year’s gear- There’s no reason to buy new camp gear every year. Things like sleeping bags, flashlights and backpacks should be good for several years, provided they are carefully stored to stay dry and pest-free during the off-season. It will also save you money to borrow gear from family or friends before buying it yourself.

See about scholarships- How about sending kids to camp for free? It might be possible. Although it’s probably too late to cover this year’s fees with a scholarship, start planning now for next year. Ask you child’s preferred camp if they have any scholarships and find out what the qualifications are and how to apply.

Have Kids Help- Even if they just chip in to pay for extras like camp T-shirts and snacks, have kids pay for part of their own camp experience. They can use money they’ve saved throughout the year from their allowance, gifts or by doing odd jobs around the house. Making kids responsible for paying for part of their camp experience gives them a bigger stake in the process and helps create a sense of financial responsibility.

Look for Lower Cost Alternatives- If sleep-away camp just isn’t in the budget this year, that doesn’t mean your kids can’t still have a great time and meet new friends this summer. Look for low- or no-cost local alternates, such as day camps sponsored by the city, school district or local churches. Additionally, local museums often have day or week-long summer classes or programs for kids with specific interests, such as art, dinosaurs or archaeology.

The Pros and Cons of Meal Kit Delivery

It seems impossible to watch TV or go through the mail these days without seeing an ad for an all-inclusive meal kit delivery service. You know the ones with names like Hello Fresh, Blue Apron and Plated (with new ones being added all the time). You’ve probably wondered if these services are a good deal or just a wasteful extravagance. The truth is, whether a meal delivery service is a smart way to spend your food budget really depends on your own lifestyle, eating habits and savings goals. Here are some pros and cons of meal delivery services to help you decide if it’s the right choice for you:
Pros:
You’ll Eat at Home More- One of the biggest selling points of meal delivery services is that they allow you to prepare restaurant-level meals in your own kitchen. If you routinely dine out (or get take-out) several times a week, using a meal delivery service will probably save your money in the long run.

You’ll Learn New Recipes and Techniques- If you’re new to cooking or tend to make the same meals again and again, a meal delivery service will expand your horizons and help you learn new skills. All meal planning kits contain detailed recipe cards. Once you discover some new favorites, you’ll be able to recreate them on your own by simply purchasing the ingredients.

You’ll Minimize Food Waste- If you routinely buy more groceries than you need and find yourself throwing away food because it’s gone bad before you can use it, a meal kit delivery service will help with that. Everything is perfectly portion controlled and if you prepare the meals as directed, you should end up with zero food waste – and zero wasted dollars, too.
Cons: 
The Expense- While the cost of meal delivery service varies, they average out to around $10 a meal, per person. And while that’s more than what you’d pay buying groceries on your own, it’s much less that you’d pay for dining out. Also, many of these services offer significant discounts on your first delivery. Provided you remember to cancel after your first box, you could try out several boxes at a discount before deciding whether to continue with a service long- term.

Excess Packaging- In addition to the box everything comes in, every ingredient inside is packaged individually, and there are chilled packs, too. To avoid a sky-rocketing carbon footprint from disposing all of the packaging, you must be committed to recycling everything.

You Might Not Like Every Meal- Although most services allow you to specify certain ingredients or flavors you’d rather not receive, there’s still a chance you’ll run into a meal that doesn’t match your personal tastes. You’ll get the most value – and enjoyment – from a meal kit delivery service if you have an adventurous palate and few dietary restrictions.

5 Ways to Take Your Social Life Outside

We all need to take time to relax and enjoy life with family and friends. But maintaining an active social life can be expensive. And when you’re doing your best to live on a budget and save money, spending money on leisure activities often takes a back seat to covering basic living expenses and paying down debt. Fortunately, the beautiful weather is a great reason to take your social life outside. Here are several ideas for low-cost, outdoor alternatives to expensive social activities:

Dining Al Fresco- When you’re on a budget, dining out at restaurants quickly becomes a want, rather than a need. But you can still enjoy great food and good times with friends by choosing to have a picnic or outdoor potluck. Whether your host it at your home or get together at a local park, you’ll enjoy a wonderful meal, fresh air and the chance to reconnect with your friends, all for a fraction of the cost of one meal at a restaurant.

Outdoor Movie Night- Skip the long lines, sticky floors and overpriced concessions at the local multiplex and have your own outdoor movie night under the stars. Pinterest is filled with easy ideas for putting together your own outdoor movie screen and turning your phone or other device into a simple movie projector. Pop your own popcorn, fill a cooler with drinks, line the lawn with blankets and pillows for a comfy viewing experience. Once you try it, you won’t want to watch movies any other way.

Coffee Walk- Meeting for coffee to catch up with a friend seems like a reasonably budget-friendly option, until you factor in the pricey specialty coffee drinks and tempting desserts. Instead of meeting at the coffee house, brew a pot of coffee (or tea), pour it in a few travel mugs and meet your friend for a nice long chat and a walk. Not only will you save money, you’ll get a little exercise, too.

Concert Under the Stars- When it comes to concert tickets, there’s no such thing as a ‘cheap seats’ anymore. When you factor in service fees, most concerts will set you back at least $200 for two people. And that’s just the tickets, never mind concessions and souvenirs. So, what’s a budget-conscious music lover to do? Find free, live music outdoors. Communities of all sizes host free outdoor concert series featuring great local arts – and sometimes even big-name talent. You might not see the biggest tour of the summer, but you can enjoy great live music with your friends and neighbors without spending a dime.

Yoga in the Park- If you typically meet friends for class at the local yoga studio, move your yoga practice outside instead. use your smart phone or tablet to find plenty of free yoga videos online. Taking your practice to the park or beach isn’t just a money-saving move- being outdoors in the fresh air will enhance the stress-relieving benefits of your yoga session.

How to Refinance Student Loans With a 0% Credit Card Balance Transfer

While repaying my student debt, I felt the pain of paying higher interest rates of over 6%. Most student loan borrowers feel that pain, too. The average student debt of $37,172 at a typical interest rate of 5% costs $155 a month in interest alone.

Unfortunately, I was unaware of options to refinance student loans. One strategy in particular could have a smart fit: getting a zero-interest credit card and using it to perform a balance transfer to refinance my student loan. I could have used the 12-18 month introductory rate period to pay off my student loans, interest-free.

A credit card balance transfer for a student loan is possible and could be a smart move for you. However, it’s not as simple as transferring balances between credit cards. Follow this guide to perform a student loan balance transfer to a zero-interest credit card – and make sure you’re actually coming out ahead in the process.
How to transfer a student loan to a zero-interest credit card
Simply put, a balance transfer for a student loan uses funds provided by your credit card issuer to pay off your student debt.

However, the actual process can be a bit complicated. Here’s an overview of the steps involved in a student loan balance transfer.
1. Get the right zero-interest credit card
Overall, credit cards carry higher rates than most consumers pay on student loans. So a student loan balance transfer to a credit card only make sense if you’re moving the debt to a credit card with a 0% introductory APR and paying off the balance before that intro period is up.

However, not every credit card issuer allows cardholders to perform balance transfers for student loans. According to WalletHub, the following credit card issuers allow studnt loan balance transfers:

Bank of America
Barclaycard
Capital One
Citi
Discover
PenFed
USAA
U.S. Bank
Wells Fargo
SunTrust Bank

Spend some time shopping and comparing credit cards to find one that offers both student loan balance transfers and 0% APRs for an introductory period. You should also look for cards that don’t have or will waive balance transfer fees. Once you find one you like, you can apply for the credit card. Upon approval, you’re ready for the next step.
2. Request a student loan balance transfer
The next step will be to use your 0% credit card to pay off your student loan. your credit limit might put a cap on how much you can borrow to use for a student loan balance transfer. To maximize savings, be strategic and target the student loan with the highest interest rate.

Figure out the balance transfer amount you want to borrow and use to repay your student debt. Be ready with the balance transfer amount to request.
Have student loan information on hand, such as your student loan servicer and account number. The credit card company might need this information to process the balance transfer and pay off your old loan.
Next, reach out to your credit card issur and verify their process for giving balance transfers for student loans. They can outline how to go about requesting a balance transfer and using it to pay off a student loan.
Check with your student loan servicer and make sure they will accept a check from your credit card company. Depending on how your credit card issuer handles student loan balance transfers, they might pay out these funds directly to your student loan servicer; you’ll want to be sure they will process the payment from a credit card company.

In many cases, you will use a balance transfer check from your credit card issuer to complete the process. These work like normal chcks, but instead of being tied to a bank account, they draw funds form your credit card account.

These funds are paid out to you and your student lender. Many credit card issuers can also complete this process online or by phone.

As you move forward in this process, make sure you’re not mixing up a cash advance with a balance transfer. The two offers can be worded similarly, but a cash advance often has higher fees and costs associated with it.
3. Use funds to repay student loans
After you request the balance transfer, the transaction will process and post. Make sure you get a receipt of payment from the student loan balance transfer to prove your student loan servicer got the funds.

Alternatively, the balance transfer funds might be deposited directly into your bank account. Try to immediately use these funds as a payment toward your student debt. Don’t let the money sit in your account, where you’ll only be tempted to spend it.
4. Repay your credit card balance before the 0% APR expires
Once the funds from your balance transfer have paid off your student debt, it’s time to repay your new credit card balance – and fast.

If you still have a balance after the 0% APR expires, you’ll likely face a higher rate than you had on your student loans. Credit card rates are typically around 15% APR or higher. Any savings you might have anticipated by having an interest-free card could quickly be undermined by new, higher interest charges.

Diligently pay extra on your credit card each month. And make sure you set it aside and don’t add new purchases to the balance, either.
Pros and cons of a student loan balance transfer
Now you know how to go about getting a credit card balance transfer for a student loan. But is this a smart move for you? Here are some potential benefits, drawbacks, and other considerations you should weigh before deciding.
Pros
Save on student loan interest- The most obvious benefit of a student loan balance transfer to a 0% APR credit card is the savings on interest. How much you could save will depend on the balance you want to transfer and how high your student loan rate is.

Maybe you have a $10,000 student loan at 6% APR that’s just entering repayment. Transferring the balance to a 0% credit card and paying it off in a year would save you $3,322 in interest, over a 10-year Standard Repayment Plan.

But what would you save if you paid off the loan in a year without the balance transfer? You’d still pay some interest – but not much. Paying the $937 a month it would take to pay off the $10,000 balance in a year, you’d pay $302 in interest (saving $3,021).

When deciding whether you should do a student loan balance transfer to a credit card with 0% APR or prepay your student loan, the savings are there. But they might not be as steep as you’re expecting.

Keep yourself motivated to pay off debt- Another potential benefit of using a student loan balance transfer is that doing so can keep you motivated to quickly pay off a large chunk of student debt. The period that you have a 0% APR on the credit card is the only time you can repay the debt without incurring more interest fees.

With the expiration of your 0% rate looming, you have a deadline to work toward. This can keep you accountable and disciplined as you work toward repaying debt. Getting out of debt often comes down to changing behaviors, so this benefit can be powerful.
Cons
Balance transfer fee- You’ll also need to account for a balance transfer fee. Most credit cards will charge this fee, which is usually around 3% of the balance transfer amount.

Take the $10,000 student loan balance mentioned above. If your credit card changed a 3% balance transfer fee, you’d pay $300. That wipes out a big chunk of your savings.

Look for credit cards that don’t charge a balance transfer fee. For instance, the Barclaycard Ring has no balance transfer or annual fees. And it carries a 0% APR for the first 15 months for balance transfers made in the first 45 days.

If that’s not an option, you can always call your credit card issuer and ask them to waive or lessen the balance transfer fee.

Transferring a high balance can be risky- Transferring a high balance means you’re stuck spending huge payments each month if you want to beat the clock on your 0% introductory rate. This can quickly eat into your cash flow and might be more painful than you expect.

Additionally, you’ll need to qualify for a high enough credit limit to even use the strategy.

And even if you have, say, a $15,000 credit limit on your new card, you probably shouldn’t use it all up with a balance transfer. Borrowing too much against this limit could increase your credit utilization ratio too much, which might adversely affect your credit score.

If you want to pay off student loans with this strategy, make sure the balance transfer amount is 30% or less than you total credit limit. For instance, that would be about $5,000 of the $15,000 limit.
Consider student loan refinancing
With a student loan balance transfer, the 0% interest rate is a big draw. But it can also come with hassles like shopping for exactly the right credit card or coordinating with your student loan servicer. And you’ll have to force yourself to make big payments each month to stay ahead of the expiration date on the 0% APR.

There might be a better way to save on student loan interest: Refinancing your student loan with a private lender instead of a credit card.

The best student loan refinancing lenders offer rates as low as 2.30%. And you’re unlikely to face costs like a 3% balance transfer fee or a 15% interest rate hike after an introductory rate expires. You can also choose a longer repayment period to keep the monthly payments affordable.
You can do a balance transfer for student loans, but it’s not always worth it
So, what’s the “too long; didn’t read” answer? Simply put, it is possible to transfer a balance from a student loan to a 0% credit card to save on interest.

However, there are some downsides to watch for. You’ll need to make sure both your credit card company and student loan servicer allows this transaction. You should also spend some time calculating the potential savings of having interest-free debt for the introductory period. And compare whether costs like balance transfer fees might offset savings.

Overall, if you take the time to find the right low-cost credit card and pay your balance in full before your 0% APR expires, you could come out ahead.

4 Reasons You Need to Make Extra Payments on Your Student Loans

When I graduated from college and landed my first job, I felt overwhelmed by my student loans. My balance was higher than my nonprofit salary and I had no idea how I was ever going to get out of debt.

I started reading personal finance blogs that talked about making extra payments on student loans to pay them off faster – and I rolled my eyes. I was on a tight budget; I sometimes couldn’t find the cash to put gas in my car, let alone extra money for my loans.

But I knew I had to do something to tackle my debt and get it under control. Here’s why making extra payments on student loans is so important, and what you can do to find the money.

When you work full-time, you may feel exhausted. The last thing you want to do is work another job or side hustle. But if you can find the motivation, working a little more can pay off in a big way.

Here are four reasons why you should put an extra $100 towards your student loans each month.
1. You’ll save thousands of dollars (seriously)
When I left school, I had about $35,000 in student loans at a 6.80% interest rate and minimum monthly payment of $400. If I paid only the minimum, it would have taken me 10 years to pay off the loans. In addition, I’d pay $13,334 in interest on top of my original loan balance.

If you were in the same situation and boosted your payments to $500 a month, you’d reduce the overall interest charges by $3693. That’s $3,693 you could save for retirement, put towards a down payment on your first house, or use to book a vacation.
2. You’ll be debt-free faster
For federal student loans, borrowers are automatically enrolled in a Standard Repayment Plan of 10 years. A decade is a long time; I didn’t like the idea of being in my 30s and still carrying student loan debt, so I was determined to pay it off faster.

Putting an extra $100 a month towards your debt does more than save you money in interest. In my case, bumping up my monthly payments to $500 meant I would be debt-free years ahead of schedule.

Student loans are a huge burden hanging over your head – getting rid of them faster frees up your mind (and money) to focus on more important things.
3. You can build up savings more efficiently
If you’re debt-free, that means you can boost your savings more quickly. Once you pay off your student loans, you can dedicate more money to your savings account.

If you put that $500 into the bank each month when your loans are gone, you’d have $12,000 saved in two years.

Invest that same amount of money in a 401(k) or IRA with an annual return of 6%, and you’ll earn $3,040 on your investment over two years.
4. You may be able to buy a home more easily
Interested in owning your own home? When mortgage lenders review your application for a loan, they look at your debt-to-income ratio.

This is a number that shows how much debt you have relative to your salary. The lower the ratio, the better. Your lender wants to know that you can easily afford your mortgage payments along with your other monthly obligations.

Your student loans can hurt your DTI ratio. If you have a large student loan balance, your monthly bill can eat up a significant part of your salary, making it more difficult to get a mortgage. Putting more cash towards your student loans now will help reduce your DTI ratio later on, improving your chances to get a mortgage for the home you love.
Finding more money to pay off your debt faster
You might understand why extra payments are so important, but scraping together the extra cash can be difficult. While plenty of people will tell you to track your spending to “find” more money, that advice doesn’t always work. If you’re already strapped for cash, you likely aren’t blowing money on Starbucks, fancy dinners out, avocado toast, or shopping sprees.

That was the case for me. I was on a bare-bones budget with nothing left to cut out. My home was a tiny studio apartment; I didn’t have television; I brought my lunch to work;I lived off a lot of peanut butter and jelly sandwiches. I wasn’t living extravagantly – I was barely squeaking by.

Making extra payments on my student loans was essential, but my salary just couldn’t cut it. That’s when I realized something: Instead of cutting my expenses, I had to boost my income.

I took whatever little side jobs I could. I cleaned houses, ran other people’s errands, and watched pets. While my side gig income varied widly early on, I was able to make an extra $100 student loan payment every month.

That didn’t seem like a lot at the time, but it added up quickly. I saved thousands by paying off my loans years ahead of schedule, just by working a few extra hours a week. If you’re struggling to find extra money, consider launching a side hustle. working a little bit each month can give you the money you need to pay off debt more quickly.

Should You Use a Personal Loan to Pay Off Student Loan Debt?

When you’re in student loan repayment mode, it’s likely you’re hungry for solutions – anything to make paying off debt easier. One lesser-known option is using a personal loan to pay off the remaining debt.

Personal loans are typically unsecured loans. This means they aren’t backed by any collateral, such as a home or car.

The beauty of personal loans is that unlike with a mortgage, car loan, or even student loan, you can use the money how you like. It can fund a home renovation or even help consolidate credit card debt, as much personal loans offer better interest rates than credit cards.

But should you use a personal loan to pay off student loans? here’s what you need to know if you’re considering getting a personal loan to pay off student loan debt.
Using a personal loan to pay off a student loan: Pros and cons
There are some options you should weigh before deciding to use a personal loan to pay off student loans. Overall, using a personal loan to refinance student debt can cause some issues.
Pros of paying off student loans with a personal loan
If you want to pursue a personal loan to pay off your student loans, consider these advantages:

You can consolidate your student loans and have one monthly payment
You will have a fixed interest rate and a fixed repayment term, which could be beneficial
By paying off your student loans, you can release your cosigner (if you have one) from your loans

However, using a personal loan to pay off student loan debt isn’t the only way to get these benefits.
Cons of paying off student loans with a personal loan
Personal loan interest is not tax-deductible- You will not be eligible to deduct student loan interest if you pay off your loans with a personal loan. Your new debt will be a personal loan, which is classified differently than student debt and has no tax benefits.

Currently, student loan borrowers can deduct up to $2,500 in student loan interest with a modified adjusted gross income of less than $80,000.

You forfeit federal student loan protections- The process of using a personal loan to pay off student loan debt is not reversible. You can’t go back to having federal student loans – you forfeit your borrower protections such as income-driven plans and loan forgiveness.

Jamie Block, a certified financial planner at Wealth Design Retirement Services, said, “The federal student loan program offers various repayment schedules that provide flexibility personal loans cannot offer. Federal loans offer payment plans based on income, allows deferment if the b orrower returns to college, and debt forgiveness under certain circumstances. Unfortunately, personal loans are not as generous.”

As Block pointed out, if you are having trouble making payments on federal student loans, you have several options to lower or pause payments. No such options exist for personal loan borrowers experiencing financial hardship.
Personal loan rates are usually higher than student loan rates
Student loan rates are typically lower than those offered on personal loans. For instance, student loan refinancing rates start around 2.50-3.00%. By comparison, the lowest personal loan rate start around 5.00-6.00%. Those are just the lowest rates, however. More typical rates for student loan refinancing are usually around 4-6%, while average personal loan rates for borrowers with good credit are around 15% – or higher.

Even if a personal loan rate is lower that your current student loan rate, you might save even more by refinancing with new private student loans, instead. You’re likely to get a much better deal refinancing a stuent loan with a new student loan, than trying to replace it with a personal loan.
It might be tricky to get a personal loan for student loan debt
One thing to keep in mind: not all lenders will allow you to pay off student loans with your personal loan. Before you apply, be sure to check and make sure the lender issuing the personal loan allows you to use the funds to pay student loan debt.

Note that you will also need to qualify for a personal loan. Personal loans usually require good credit or better, as well as good income and steady employment. You’ll have to meet all underwriting requirements to get a personal loan and qualify for the lowest personal loan rates.
Alternatives to using a personal loan to pay off student loans
If you’re not sure about using a personal loan to pay off student loan debt, there are other options.
Federal student loan repayment plan options
If you have federal student loans, you have a variety of repayment options available. You can go with the Standard Repayment Plan and pay off your student loans in 10 years.

You can apply for an income-driven repayment plan if your income doesn’t support your student loan payments. These plans match your monthly payments to your income and are specifically designed to ensure they are affordable. Switching to an income-driven repayment plan can lower payments and help free up cash for other necessities.

Public Service Loan Forgiveness is also an option if you work in the public sector. If you use a personal loan to pay off federal student debt, you would give up those federal protections and flexibility. Personal loans have fixed repayment terms and don’t have the same repayment options.
Consider refinancing before using a personal loan for student debt
If you’re dreaming of paying off debt quickly and saving money on interest, consider refinancing your student loans into a new student loan before turning to a personal loan.

Student loan refinancing companies help borrowers consolidate their student loans and save money on interest through a lower interest rate. Depending on your credit, you could shave off a few percentage points in interest, resulting in big savings.

In addition, some refinancing companies such as SoFi and CommonBond have unemployment protection, which allows you to put your payments on pause while looking for a job.

Using a personal loan to pay off student debt won’t afford you these types of benefits specific to student loan borrowers. Plus, you might not get a better interest rate through a personal loan.
Final World
If you’re thinking about using a personal loan to pay off student debt, consider all of your other options first and understand what benefits you are giving up. If you don’t pursue a personal loan, find a reputable lender and read the fine print to make sure you’re not agreeing to terms that will interfere with your financial success later down the road.

Student Aid Office Chief Quits After Run-In with DeVos

On May 24, 2017, the head of the Federal Office of Student Aid (FSA), James Runcice, handed in his resignation. Runcice blamed his sudden departure on overreach from Betsy DeVos and the Department of Education.

“I am incredibly concerned about significant constraints being placed on our ability to allocate and prioritize resources, make decisions and deliver on the organization’s mission,” Runcie wrote in an email to this staff obtained by the Washington Post. “[I am] encumbered from exercising my authorities to properly lead this great organization.”

But Department of Education spokeswoman Liz Hill said Runcie was avoiding testifying in front of Congress. “The Secretary directed Mr. Runcie… to answer questions regarding oversight within FSA and repeated issues concerning improper payments,” Hill said in a statement. “He chose to resign rather than face Congress.”

Interpretation of Runcie’s resignation has largely split along partisan lines. Some Democrats want an investigation into interference in the FSA. But Republicans suggest Runcie mismanaged the federal student aid system.
James Runcie’s resignation comes after the new education budget proposal
Runcie’s resignation comes a week after the White House released its education budget proposal. The proposal called for cuts to Pell Grants, work-study programs, interest subsidies, and Public Service Loan Forgiveness. It also sought to replace the four existing income-driven repayment plans with a single, new plan.

The budget proposal would slash $143 billion from the education budget over the next 10 years. The FSA currently oversees $1.4 trillion in financial aid to students, including more than $150 billion in grants, loans, and work-study funds for college students.
Don’t panic: The budget plan proposal isn’t a done deal
But borrowers shouldn’t panic. This budget plan is just a proposal right now, and Congress is likely to make significant revisions.

“Nothing is set in stone at this point,” said Jay Fleischman, student loan lawyer. “In the event that there are going to be any major changes to the way federal student aid is administered, repaid, or forgiven, [the plan] has to go through a process that entails far more than one person standing up and saying this is going to be so.”

At the same time, Fleischman encourages borrowers who oppose the proposal to take action. “[This is the] time to stand up and pick up the phone to call your elected representatives if you disagree,” he said.
The FSA can do more to protect students and borrowers
Consumer advocacy groups have criticized the FSA for failing to help borrowers and allowing too many people to go into default. In fact, the Consumer Financial Protection Bureau is currently suing Navient, the nations’s largest student loan servicer, for its harmful practices.

The FSA “is widely seen as a strong ally to the student loan industry,” said Rohit Chopra, a senior fellow at the Consumer Federation of America, according to Politico. “The next COO should be laser-focused on the interests of students and taxpayers.”

For now deputy chief operating officer Matthew Sessa will take Runcie’s place. We’ll have to wait and see how the next head of the Office of Federal Student Aid plans to protect student loan borrowers amidst all these upheavals.
Know your student loan options
Federal watchdogs and borrower advocacy groups have questioned the FSA’s ability to manage major loan servicers such as Navient. And as the current lawsuit against Navient shows, borrowers can’t always rely on loan servicers to act in their best interests.

Educate yourself. When it comes to student loan repayment, you need to educate yourself about your options. Look for trusted sources with a commitment to protecting student loan borrowers.

Consider income-driven repayment. If you’re struggling to pay your bills, look into income-driven repayment plans. Deferment and forbearance can also help some borrowers who go back to school or run into major financial hardship.

Think about refinancing. Student loan refinancing is also an option for borrowers with a steady income and strong credit. And there are a variety of loan forgiveness and repayment assistance programs for borrowers around the country.

With this latest upheaval from the education department, it’s more important than ever to take action on your student loans. Learn all of your options, so you know the best path forward.

8 Financial Choices You’ll Regret in 5 Years

If your goal is getting ahead financially, the formula for success is simple: Maximize tax-advantaged retirement accounts early, boost your savings with a Roth or traditional individual retirement account, choose investments you feel comfortable with and avoid debt like the plague. If you do those four things, you’re bound to enjoy less stress and more wealth over time.

But is it always that easy? Absolutely not. As you move through the various stages of life, you’ll encounter myriad pitfalls and temptations that can knock you off track – some of which can seem like a smart idea at the time.

Speeding toward financial independence is easier when you know which financial choices can slow you down. I spoke to a hadful of top financial advisers to get their takes on the most common financial choices their clients live to regret. Here’s what they said.
1. ‘Investing’ in a New Car
“At first blush, buying the latest and greatest version of the ultimate driving machine may seem like a value worthy of your hard-earned money,” says California financial advisor Anthony M. Montenegro of Blackmont Advisors.

Unfortunately, new cars depreciate the moment they leave the lot, and continue dropping in value until they’re worth almost nothing. If you finance the average new car priced at more than $30,000 for five years, you’ll pay out the nose for a hunk of metal worth a small percentage of what you paid. (Remember, a good credit score can qualify you for lower interest rates on your auto loan.)

Pro tip: Buy a used car and let someone else take the upfront depreciation, then drive it until the wheels fall off. Once five years has passed, you won’t regret all the money you never spent.
2. Not Watching Your Everyday Purchases
While big purchases like a new car can eat away at your wealth, the little purchases we make every day can also do damage, says Maryland fee-only financial adviser Martin A. Smith. If you’re spending $10 per day on anything – your favorite coffee or lunch out with friends – your seemingly small purchases can add up in a big way. (If you must feed a coffee habit, the right credit card can help make it more worthwhile.)

Keep in mind that $10 per day is $300 per month, $3,600 in a year and $18,000 after five years. while you may not regret you daily indulgences, you may regret the savings you could have had.
3. Not Refinancing your Mortgage While Rates Are Low
While refinancing your mortgage is anything buy fun, now may be the perfect time to drive in. That’s because interest rates are still teetering near lows, says Colorado financial adviser Matthew Jackson of Solid Wealth Advisers LLC.

Even one percentage point can cost you – or save you – tens of thousands of dollars in interest over the years. Since rates will eventually go up, you “don’t want to miss the opportunity now,” says Jackson.
4. Buying Too Much House
Buying the ideal home may seem like a smart idea, but does your dream home jive with your financial goals?

Unfortunately, buying more house than you need can lead to regret and financial stress, says Vancouver, Washington financial planner Alex Whitehouse.

“Too much income going to housing payments makes it difficult to fully furnish rooms, keep up with the rising taxes, and often leads to struggles with maintenance and utility costs,” notes Whitehouse.

Banks may be willing to lend you more than you can reasonably afford. If you want to avoid becoming house-poor, ignore the bank’s numbers and come up with your own.
5. Borrowing Against Your Retirement Account
While you can borrow against your 401(k) plan with reasonable terms, that doesn’t mean you should. If you do, you may regret it for decades.

“Millennials often ask if it’s okay to access their 401(k) or IRA early (before age 59.5) to buy a home, travel or pay off debt,” says Minnesota financial adviser Jamie Pomeroy of FinancialGusto.com.

However, there are numerous reasons to avoid doing so.

Not only do you normally have to pay a penalty to access retirement funds early, but you’ll pay taxes too. Most important, however, is the fact you’re robbing your future self. You will regret the lost savings (and lost compound interest) when you check your retirement account in 5 years.
6. Not Using a Budget
While many people buy the notion that budgets are restrictive, the reality is different. If used properly, budgets are financial tools you can use to afford what you really want in life.

“I would suggest that you create a budget that you stick to,” says financial planner David G. Niggel of Key Wealth Partners in Lancaster, Pennsylvania. “At the end of the year, you have the chance to evaluate you spending habits and make some serious changes if necessary.”

If you don’t, your finances could suffer from death by a thousand cuts.
7. Not saving as Much as You Can
While it’s easy to think of your disposable income as “fun money,” this is a decision you could live to regret in five years.

The more money you have saved later in life, the more flexibility you’ll have, notes fee-only San Diego financial adviser Taylor Schulte. And if you don’t get serious about saving now, you could easily regret it in the future.

According to Schulte, you should strive to “play it safe” when it comes to your savings.

“I’ve never heard anyone regret having too much money,” says Schulte. “But, I’d be willing to bet we have all heard far too many people complain about not saving enough or not starting earlier.”
8. Not Buying Life Insurance When You’re Young
If you are married, own a home, or have children, you need life insurance coverage. Unfortunately, this is one purchase that becomes more difficult – and more expensive – as you age.

If you don’t buy life insurance when you’re 25, you can expect to pay a lot more for coverage when you’re 30, 35, 40 and so on. And if you wait long enough, you may not even be able to buy it at all, says New York Financial planner Joseph Carbone of Focus Planning Group.

As Carbone notes, if you develop a chronic health condition before you apply for life insurance coverage, you could easily become uninsurable. To avoid regretting inaction in five or ten years, most people would benefit from applying for an inexpensive, term life insurance policy as soon as they can.

 

4 Reasons Your Student Loan Payments Could Skyrocket (and What You Can Do About It)

The average monthly student loan payment for borrowers between the ages of 20 and 30  is $351.

Although making that payment each month is struggle enough, your student loan payment can actually increase as time goes on. Find out which factors impact your monthly payment and what you can do to reduce or lock in your payment so you don’t pay more down the road.
Why did my student loan payment go up?
Here are the four most common reasons behind an increase in your monthly student loan bill.
1. You signed up for the Graduated Repayment Plan
If your income was low after graduation, and you couldn’t afford your federal student loan payments on a Standard Repayment Plan, you might have signed up for a Graduated Repayment Plan. With this option, your payments start off low and gradually increase over time.

Presumably, as you progress in your career, you’ll earn more money and be able to afford the higher payments later. However, your payments increase every two years with a Graduated Repayment Plan, whether you’re earning more money or not.
2. Your salary increased.
For those struggling to keep up with their federal loan payments on a small salary, an income-driven repayment (IDR) plan can be a huge help. With an IDR plan, your monthly payments are capped at 10-20 percent of your discretionary income and your repayment term is extended. This reduces your payments to make them more manageable.

However, you must recertify your IDR plan each year. If you increased your income by getting a raise or taking on a second job, for example, the government would adjust the terms of your IDR plan. They recalculate your payment based on your new income, which can make your monthly student loan payment higher.
3. You have a variable interest rate.
Federal student loans all have fixed interest rates, meaning the rate stays the same for the life of the loan. However, private student loans are different. When you take out private student debt, you can choose between a fixed interest rate or a variable interest rate.

Variable interest loans often have lower interest rates than fixed loans at first, but they can fluctuate over time depending on marketing trends. If your variable interest rate increases, your loan will accrue more interest, and you will have to make a larger payment eavh month.
4. You deferred your loans.
Many people defer their loans, pausing their monthly payments while they go back to school, search for work, or deal with economic hardship. While temporarily deferring student loan payments can prevent you from becoming delinquent on your loans, it can also cause your loan balance to increase.

Depending on the type of loans you have, such as unsubsidized federal or private loans, interest will continue to accrue on your loan during deferment. That growing interest can cause your overall balance to increase. Once you start making payments again, you could end up with a bigger bill.
How to lock in your monthly payment.
If monthly payment fluctuations make it difficult to manage your student loans, thre are two ways to get a fixed interest rate and a set monthly payment.
1. Switch to a Standard Repayment Plan
If you’re on an IDR plan or Graduated Repayment Plan, consider switching back to a Standard Repayment Plan. The Standard Repayment Plan is the default, where your payments are spread out evenly over 120 months. While your payments might be higher initially, they’ll stay constant for the length of your repayment.
2. Refinance to a fixed-rate loan.
If you have private student loans with a variable interest rate, you can refinance them into a new loan. By refinancing, you take out a new loan for the amount of your old one, paying your old debt off and working with a new lender.

When you refinance, you can choose a fixed interest rate loan and decide to extend or shorten repayment term. Depending on the terms you choose, refinancing your student loans can help you choose, refinancing your student loans can help you save money, too.
Managing your student loan payments.
When you’re on a tight budget, there’s no room for fluctuating student loan payments. IF you’ve ever wondered why your student loan payments went up, remember the different factors that can affect your bill. By switching your repayment plan or refinancing your debt, you can get financial stability.