3 ways to get other people to pay off your student loans

 

3 ways to get other people to pay off your student loans

3 ways to get other people to pay off your student loans   10:50 AM ET Mon, 15 Oct 2018 | 01:23

This holiday season could be a good time to knock down your student debt.

Gift of College, an education registry, lets people register their student loan account, and then share their profile with friends and family who can contribute funds toward your loans.

“Wouldn’t you rather get Aunt Emma to kick in toward your student loans than give you another ugly sweater for Christmas?” said Nadine Perry, director of marketing at Gift of College.

If you’re doing gift swaps with your friends, you can even ask for a Gift of College gift card, which can be redeemed as a payment into any student loan account. (Here’s a directory of where the cards are sold).

As student debt grows, so do the plans to squelch it.

Some of the ideas are pretty creative: New Jersey, for example, considered establishing a lottery for borrowers burdened by student debt. Other ways of garnering money to eliminate your education debt don’t rely on luck, but rather require rolling up your sleeves or boning up on historical facts.

Keep in mind, however, that these endeavors aren’t free aid. The funds, even money offered by an organization in return for volunteer work, are taxable.

“All money you receive for volunteering or win on a trivia app or lottery is considered income by the IRS,” said Mark Kantrowitz, a student loan expert.

Here are some of the ways to get other people to pay off your debt.

1) At your job

Currently, just 4 percent of employers offer student debt assistance. But that’s changing as more employers come to realize education debt is a problem for many of their workers, said Katie Berliner, account executive at YouDecide, a benefits firm.

“In order to attract and retain talent, employers are looking at offering contributions to people’s student loans,” Berliner said.

Companies that have offered their employees help with their student loans include Aetna, Penguin Random House, Nvidia and Staples.

Fidelity announced this year that 25 employers — including Hewlett Packard Enterprise, New York Air Brake and Millennium Trust — plan to implement its student debt employer contribution program. (Fidelity also offers a student debt benefit for its own employees.)

“Do a quick Google search and find the employers who are out there doing this,” Berliner said.

Most likely, the company you’re interviewing with won’t offer the benefit, but that shouldn’t stop you from asking about it, Berliner said. “In the course of the interview, there comes a point where the interviewer says, ‘Do you have any questions?'” Berliner said. “It would not be out of line to say: ‘I want to get your perspective on whether you think this a valuable benefit.'”

2) By volunteering

Borrowers can enroll with Shared Harvest Fund. Users create a profile and list the social causes they’re interested in, such as gender equality or homelessness. You’ll work on projects for nonprofits and businesses and receive a monthly stipend of $250 to $1,000.

Although the work will start off in Los Angeles, Chicago and New York, “eventually, people can live in Arkansas and do work for a nonprofit in Los Angeles,” said NanaEfua B.A.M, founder of Shared Harvest Fund.

3) Apps/online

Givling is an app that lets student loan borrowers play trivia, with the winning team each week earning roughly $5,000 per person. “Some people are not the best trivia players, but they’re motivated to get help with their student loans,” said Seth Beard, Givling’s chief marketing officer.

The app ChangeEd will put your spare change toward your student loan payments. For example, if you buy a $1.75 coffee, 25 cents will go toward your debt.

[“source=ndtv”]

Student loan debt and the cost of college are out of control and climbing

Student loan debt and the cost of college are out of control and climbing

The benefits of higher education are on the minds of nearly 2 million college-bound high school students graduating this spring.

To make matters worse, federal student loan rates will rise 13.5 percent this summer. The long-awaited and urgently needed reform of our nation’s higher education system will have to wait at least another year.Advancing reforms to help make higher education more affordable were touted as a leading priority for the 115th Congress and the 2016 Republican Party Platform. Yet, the House has yet to pass its Higher Education Act, (Prosper Act).

Just a few days ago Sen. Lamar Alexander (R-Tenn.), Chairman of the Senate’s Health, Education, Labor and Pensions Committee, told the New York Times education conference, “the Senate will not produce promised higher education legislation this year,” adding, “the Democrats won’t do it, they want to wait until next year to see if they’re in better shape politically.” Sadly, these two events are not among the many gifts Republicans were expecting to receive after the Obama administration’s “graduation.”

Federal student loan debt and the cost of college education are out of control and climbing at an unsustainable trajectory.

The primary reason for this is three-fold: unfettered access to federal student loans; a plethora of overly-generous loan forgiveness and multiple repayment plans which encourages over-borrowing and frees schools from the responsibility to charge prices that actually match the market value of the degrees they offer; and the fact that nearly half of undergraduates take at least six years to earn their degrees.

To underscore the meaning of this third cause, four years ago the average cost of just one additional year at a four-year public university was nearly $64,000 in tuition, fees, books, living expenses and lost wages.

The guardians of U.S. higher education complex will give you a litany of other reasons why college costs have increased, but as research fellow at the Family Policy Institute of Washington, Blaine Conzatti, summed it up two years ago, “Millions of students have become burdened with previously unimaginable levels of student loan debt needed to finance schooling that has been made artificially expensive by government intervention.”

Almost without exception, market costs rise whenever there is an artificial stimulus that acts to increase demand. Moreover, this phenomenon has been especially evident in the interaction between increased student loan availability and overall college enrollment and price inflation since 2010.

Progressive democratic thinking about tuition-free schools has increased access to federal student loans. Moreover, and overly generous debt forgiveness has led to unrealistic expectations on the part of millions of students which:

(1) helps explain current loan delinquency rates which are now nearly as high as they were on subprime mortgages during the housing crisis

(2) discourages personal responsibility

(3) contributes to rising college cost

Removing a sizable portion of a student’s financial responsibility to repay his/her federal student loans encourages students to borrow regardless of whether or not doing so is a smart financial decision. While federal student loans can help facilitate college access, they should not guarantee access to any institution at any price.

After several years of congressional hearings on higher education reform to explore opportunities for promoting innovation, access and completion; simplifying and improving student aid; reducing college costs and improving college affordability; empowering students and families to make informed decisions; and ensuring strong accountability and a limited federal role, the inability of the 115th Congress to produce and pass a bipartisan higher education reauthorization bill for the president is a national disgrace.

As sad as it is, it appears the only way a major overhaul of our outdated, costly and Byzantine system of higher education will occur is if the Republicans pick up more seats in the Senate.

Despite the pronouncements of political pundits, this may not be that difficult. Of the 35 senate seats on the ballot this Nov. 26 are held by senators who caucus with the Democrats, and only nine are held by Republicans.

Democrats will work very hard to protect their incumbents in the 10 states which Trump won in the 2016 Presidential Election. But this will not be easy considering Republicans have done pretty well in addressing the top four policy issues on the minds of voting Americans come this November, which are the economy, security, health care, and seniors issues according to a recent major poll by Morning Consult.

The real question is what will Republicans do to address education, the fifth top policy issue on the minds of voters this November? The good news is that House Republicans met last week to discuss the Prosper Act.

House passage of the Prosper Act will help Republican candidates defend the Act’s many worthy provisions when higher education reform emerges as front and center during coming debates.

Passage of the Act would be a fine addition to the long list of significant Republican accomplishments over the last year and a half. It also signals that Republicans tried really hard to pass the type of education reform that will promote our economic competitiveness and prosperity.

Unfortunately, having to wait another year or two for a major overhaul of the higher education is another example of how some Members of the 115th Congress refuse to work as responsibly as they should for the people who elected them. The inability of Congress to staunch the unacceptably high cost of education in a bipartisan manner has been a national disgrace.

Though not perfect, the Prosper Act is a very responsible step forward. Republican victories in November may very well depend on an astute and well-reasoned defense of the urgent need to streamline the student loan program, cap loan limits, cut unnecessary regulation and increase grants for undergraduates who truly need them. Students, parents and taxpayers deserve a higher education system that works for them.

source:-thehill.

Is Taking Student Loans For Graduate School Worth It?

Are you considering graduate school? If you’re like most American graduate students, you’re probably going to borrow at least a portion of your tuition and other costs. The student loan debt from graduate school piled on top of undergraduate loans can be intimidating. According to researchfrom the New America Foundation, the median debt for graduate students is $57,600, with one in four borrowers owing about $100,000 or more.

What are the consequences of borrowing that much?

“I won’t know what it’s like to earn a full paycheck until my 50s and that’s discouraging, because by then I’m sure I’ll have other debt to pay off (mortgage, etc),” said a younger co-worker who is frustrated by her graduate and undergraduate debt. I struggled to pay off my own undergraduate student loan debt (the equivalent of about $35,000 in today’s dollars), so I hesitated on borrowing for graduate school. Both my sisters have graduate degrees, so I’m the odd duck. I waited until I could pay my fees myself and chose to pursue professional designations instead of a university program. My former employer reimbursed me for obtaining my CFP® and ChFC® designations, and I paid for my CFA® courses myself.

My youngest sister, Caitlin Bauer, who has worked in multiple higher education institutions — and who is paying off her own graduate student loans – likes the idea of working for a company with a tuition benefit. “On a personal level, I’ve often advised acquaintances with whom I’ve spoken about grad school to maybe not go directly from undergrad unless absolutely necessary, but to try to find a job with an employer who will offer tuition benefits or even with a university where they could take at least part of their program for free or reduced cost,” Caitlin observed. She reminded me that, “going to school full-time while working a full-time job is often not possible or practical, but it can be a more financially-savvy option.”

How graduate school loans affects life milestones

Caitlin still has six figures of student loan debt, and most of it is from graduate school.  “Unfortunately, the interest rates for direct loans were sky-high when I attended.” She can’t refinance them for a lower rate because she is on an income-based repayment plan and pursuing public service loan forgiveness as she works in the public sector, so she needs to keep her debt in the federal program. “I feel very much held hostage by my loan debt. Buying my own home is out of the question at this point in time, and I’m unable to contribute as much to my retirement savings as I would otherwise.”

But there’s generally a salary boost

Graduate school, if done right, can help you substantially increase your income over time. According to this article in the Financial Times, the financial rewards of an MBA are rising but so are the tuition fees. In 2018, over two-thirds of MBA cohorts doubled their salaries within three years after completing their degree, the article reported. Across all disciplines, Bureau of Labor Statistics data show that Americans with a master’s degree earn 19% more than those with a bachelor’s degree only, and those with professional degrees earn 57% more.

Borrowing for graduate school is common

For a substantial number of students, borrowing to pay for graduate school is inevitable, explained Caitlin. For many that is true, but flexibility can be helpful. (See Erik Carter’s story on how he earned two degrees without student loans). According to the New America report, the average MBA graduate student borrowed $42,000 in 2012, which resulted in a typical monthly payment of $354 just for graduate school loans. For an expensive degree like law school, the numbers are staggering: law school students borrowed an average of $140,616, with a monthly payment of $1,187.

Figure out your ROI

A useful guideline is to limit total student loan debt to no more than the average salary for your field for someone with a similar degree. If the average salary of a lawyer in your state is $120,000 per year, then that’s the absolute max you should borrow, inclusive of your undergraduate school loans. That means if you’re thinking about getting a masters in social work, where the program costs $70,000 and the average social worker’s salary is $46,000 and you have $30,000 in undergraduate loans, your return on investment is going to be negative if you borrow the entire cost of school. Not sure how to begin? Use this graduate school ROI calculator.

Think of graduate school like home ownership

I propose that you think of it like buying a house. It’s such an expensive investment, few people can afford to pay for it in cash. Using the law school example, at today’s mortgage rates, that monthly payment of $1,187 is like paying a mortgage of around $227,000. No wonder it’s an investment most people must finance.

You’d also never pay more for a house than comparable neighborhood prices suggested it was worth. “There are a lot of factors to consider when even choosing where to go for graduate school, so it’s important to do the homework and find a program that’s a good match in terms of what you want to get out of it,” cautioned Caitlin. “Otherwise, what are you paying for? Make sure your program is reputable, because you are making an investment.”

Avoid private student loans if possible

I frequently talk to employees on our Financial Helpline who are struggling with student loans, often because they took higher interest private student loans only to later find out that they can’t get a break from paying them during a period of unemployment. “There can be very little wiggle room or willingness to negotiate smaller payments for private loans,” explained Caitlin. If you can, avoid private loans. Generally, private loans are more expense and a lot less flexible than a federal subsidized or unsubsidized student loan and are not eligible for income-based repayment, forbearance, deferral or loan forgiveness.

If you have private loans which you are already repaying and have a good credit score, you may want to look into loan refinancing with one of the new crop of student loan refinancing sites such as SoFi, Earnest or Common Bond. Do your homework and compare terms and risks before you choose. It’s generally not a good idea to include your federal student loans though, as the flexibility of repayment plans can be useful in the event of a financial upheaval, such as a layoff or illness.

Borrow only what you need

Students can get themselves in hot water later by borrowing what’s offered, instead of only taking what’s needed. The goal is to graduate with the absolute minimum in student loan debt. While it’s tempting to borrow for all living expenses, remember that you’re borrowing against your post-graduate quality of life.

“When you do borrow, never borrow beyond what you absolutely need,” warned Caitlin. “Budget carefully! I wish I’d done this better.”

Pay interest early

“Try and pay even a little on the interest if possible while in school (it’s not always possible – wasn’t for me) because it’ll a) help keep it down and b) it’s a tax deduction!” said Caitlin. Most student loans don’t require repayment until you’ve been out of school for six months. If you are working full or part time while you’re studying, pay as much as you can afford on your highest interest rate unsubsidized loan. Remember, unsubsidized loans accrue interest while you’re studying. For a success story on how one MBA student did this, see this article.

Work while you’re in school

I asked another family member, who has her PhD and masters, whether she had paid off her student loans yet. “My loans were reasonable because I worked during graduate school,” she explained. She taught at her university, and at secondary school, so she was able to borrow less and repay the loans more quickly. As long as you can keep up with the school workload, the way work helps you structure your day might even help you get better grades, according to this study. That’s not always a practical solution, however, for an intense professional degree such as medical school.

“It’s a balancing act,” said Caitlin. “I always worked part time throughout grad school, and when I coupled that with a full-time internship and full-time classes for even just part of one semester, I came pretty close to experiencing burnout. I would advise working part time if possible. It can help pay for rent, groceries, and other expenses that are necessary to having a decent quality of life, even if that income doesn’t make a huge dent in your tuition — which it likely won’t” she added.

“Plus, it always looks good to have something to add to your resume. You never know where it could lead you! The part time job I started my first semester in graduate school led me to discover what I wanted to do for my career after I graduated.”

What if you go to graduate school and find out you don’t like your field?

I recently spoke to a couple who had borrowed extensively for expensive professional degrees at private schools, only to find out after graduation that they were happier working in lower-paying non-profit jobs. Their loans were the cause of enormous financial stress. I asked Caitlin for her guidance, as she works in a different sector than she originally intended.

“For some people, this is harder if their graduate degree is more specialized.  I am not working in the exact field my master’s degree is in, but I still apply things I learned in the program to my job.  Also, having a master’s is becoming more and more necessary to be competitive in the job market today. Having completed any graduate degree is a significant accomplishment and becoming increasingly important to employers in some areas.”

The bottom line: make an informed decision

Graduate school isn’t something to be entered into lightly because you’re not sure of what career to pursue or your parents are pushing you towards a certain profession. It’s an investment. Like any investment, you will benefit from carefully weighing the costs, the risks and potential rewards.

source:-forbes

How to Prepare for Rising Student Loan Interest Rates

Image result for How to Prepare for Rising Student Loan Interest Rates

Federal student loan interest rates just went up again for the second year in a row.

Interest rates for student loans borrowed under the Department of Education’s direct program rose by 0.6 percent for the 2018-2019 school year. Undergraduate direct loans now carry the highest interest rate since the 2009-2010 year during the Great Recession. Effective July 1, undergraduates who take out a federal direct loan will now borrow at a 5.05 interest rate – a 13 percent increase compared to the 3.76 percent rate from the prior school year.

Graduate students will also pay more. The new interest rate for a graduate unsubsidized direct loan is 6.6 percent – up from 6 percent from the 2017-2018 school year – and the rate for a PLUS loan for either graduate students or parents is now a staggering 7.6 percent – the highest rate in more than five years.

Over the last two years, federal student loan rates have risen by 1.29 percentage points.

The current system for setting rates on direct loans has only been in place since July 2013 and was introduced under the Obama administration. Under this system, the Department of Education changes fixed-interest rates on direct loans each year based on the 10-year Treasury note auction in May.

Student loan experts say consumers should expect interest rate hikes on federal student loans to become the new normal. College students may see higher rates each year they take out a federal loan, they say.

“The trends and predictions indicate that interest rates are going to continue to trend up,” says Amy Glynn, vice president of financial aid and community initiatives at CampusLogic, a software company that provides student financial services. “The current rates for the 18-19 aid year are inching closer the statutory maximum interest rates.”



Increases in interest rates make higher education even more expensive. A higher interest rate can raise monthly loan payments and total repayment costs when borrowers are paying back thousands of dollars. A college grad paying back $30,000 in student loans can rack up around $8,721 in interest under the standard 10-year repayment plan at the new rate of 5.05 percent. Compare that with the direct undergraduate interest rate from two years ago under the same plan, which was $6,039.

[Read: How to Learn About College Affordability in High School.]

Amid rising interest rates, here are a few strategies for current and prospective students to reduce the amount they pay in interest on student loans.

Students should limit borrowing. Students and parents should try to reduce reliance on student loans, experts say.

One way to reduce student loan dependence is to limit borrowing to direct costs, the amount actually billed by a college, and cover living expenses by alternative means like working, says Glynn, who used to work as a financial aid director at the Santa Fe University of Art and Design.

“Alternatives like 529 plans, scholarships, payment plans and employer reimbursement should seriously be considered by families to reduce reliance on student loans,” she says.

Private education loans may be cheaper than parent PLUS loans. Parents who are paying for college with loans should look at the private lending market before signing on with a federal parent PLUS loan, says Stephen Dash, founder and CEO of Credible.com, a multilender marketplace focused on student loans. He adds that parent PLUS loans are different than other federal student loans because these loans don’t carry the same protections, such as eligibility for several different types of income-based repayment plans.There’s also an upfront disbursement fee associated with the PLUS loan – it puts the APR at over 8 percent. So if you qualify for a private loan and you’re looking at PLUS loans versus private loans, private loans can make a lot of sense because you are comparing an apples-to-apples comparison,” he says.

MBA students may find better rates in the private market. “Graduate schools students, such as MBAs, who are unlikely to be in a loan forgiveness program should be particularly hard hit,” says Alexander Lowry, a professor of finance at Gordon College in Massachusetts.

Lowry says MBA students are paying hefty tuition, sometimes more than $100,000 for their education, and are unlikely post-graduation to go into the nonprofit and public sector, where the federal Public Service Loan Forgiveness could be an option. PSLF discharges student debt for eligible borrowers after they’ve made 120 on-time payments.

But experts says there are alternatives, such as specialized MBA loans that offer lower interest rates compared with federal graduate loans, which include PLUS and direct graduate Stafford. Direct graduate Stafford loans typically carry a lower interest rate than graduate PLUS loans, but there’s an allowable maximum borrowing limit of $20,500 per academic year.

The current fixed rate for a 10-year fixed-rate loan for MBA students at New York-based CommonBond starts at 6.58 percent – more than a 1 percentage point difference compared with graduate PLUS loans. Discover Student Loans, headquartered in Illinois, offers variable rates as low as 3.99 percent for MBA students.

“When it comes to the graduate Stafford loan, you want to be confident that you would never need those protections. And it depends on the saving as well,” Dash says.

For some graduate students, he says, it can be worth paying extra in interest for federal student loans because of their protections, such as possible loan forgiveness and flexible repayment plans. “The additional cost is like an insurance premium,” he says.

Trying to fund your education? Get tips and more in the U.S. News Paying for Collegecenter.

Source:-usnews.