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Fighting Back Against Student Loan Debt

May 17, 2017 Wise Dollar College, Debt No comments

Student loan debt?has grown from an expected part of education to a bonafide crisis in the making. As of 2017, it has become the second highest consumer debt category, second only to mortgage debt. To give you a bit of perspective, the average student in the Class of 2016 has $37,172 in student loan debt. The fact of the matter is that even if you work through school or try to get scholarships, the vast majority of students will still require some sort of loans. With higher education being a vital part of many career paths, knowing about student loans and how to handle them is a vital skill. This article will discuss what types of loans you may take, how to pay them back, and what options you have when the debt becomes too much. Whether you are thinking of taking a loan out, are in the midst of repaying, or have your back against the wall, it is important to know your options.

Understanding Your Loans

Before taking out a loan, it is important to understand the difference between?federal and private loans. Federal loans, as expected, come from the federal government. A private loan comes from a lender such as a bank, credit union, state agency or school. As a rule of thumb, the trade-off between the two is that you get a variety of benefits with the federal loan, but can borrow more with a private loan. Also, there may be a limit to?federal?money you can borrow.

In general, many students will require a combination of the two, depending on the price of their education and how much they need to take out in loans. Here are some of the?special benefits?you can get when you take out federal loans:

You don?t have to repay your federal loans until graduating, leaving school, or changing enrollment status to less than half-time. Some private loans do not require this, but that isn?t always the case.
Generally, federal loans have more stable interest rates. A private loan can have a lower rate as well, but they may fluctuate.
Federal loans offer the possibility of a subsidized loan, where the government can pay interest while you are in school.
Federal loans also can potentially qualify for loan forgiveness programs (more on this later).

If you do choose to use private loans, be certain to do your research on each lender before borrowing. Some private lenders will give you more options than others. Make use of resources like your school?s financial aid office, online information, and other sources to guide your decision.

Repayment Options

Whether you have to pay while still in school or after you?re done, coming up with a proper plan for repayment of your loans is something that guides your financial health for much of your life. In many cases, the standard plan is a perfectly viable option for federal loans. This is a fixed payment over the course of 10 years. There are some variations on this option. These include Graduated Repayment plans, where the payments start lower and increase over a ten-year payment period. Another option is an income-based plan. In this case, your loan payments are recalculated each year based on your income and family size.

One unique option is the?Public Service Loan Forgiveness (PSLF) Program.?You can have the balance on your federal loan?forgiven?after 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer. Generally, these jobs include government organizations or non-profit organizations. Be sure to check that your job is a match before pursuing this route.

For?private loan repayment, your options are generally more limited. Don?t expect forgiveness or income-based repayment plans. The lack of choices is why many experts recommend focusing on paying off your private loans before your federal loans. However, at the same time, depending on your interest rates, you may want to do otherwise. An online repayment calculator may be the tool that you need.

What To Do When Repayment Isn?t An Option

Generally, people only think of declaring bankruptcy for student loans as a last resort. While there is indeed a lot to lose if done improperly, it is an option with pros and cons like everything else.?One study?showed that 40% of borrowers who include student loan debt in their bankruptcy filing end up getting them discharged. The reason why so many people think it isn?t a viable option is because very few people try.

In general, you should try and weigh your other repayment option before thinking about bankruptcy. Many courts use the Brunner Test to try and determine ?undue hardship,? meaning that:

You would not be able to keep a minimum living standard if you pay the loan.
Your financial hardship would last for much of the repayment period.
You?ve made an effort in good faith to repay the loan before filing for bankruptcy.

Should you choose to go this route, one of the best things you can do is enlist the services of a skilled?debt lawyer. While many may not think of them as resources when it comes to student loan debt, the truth is quite the opposite. With student loans becoming a primary source of debt as mentioned earlier, the time has come to treat it the same way that one would handle credit card or mortgage debt once it spirals out of control. A lawyer?s assistance can be a vital tool, whether you are looking to strike before debt becomes an issue, or dig your way out of a financial hole.

3 Ways to Pay Off Student Loans Quicker

June 15, 2016 Wise Dollar College, Debt One comment

Getting a college degree is a great way to start off your adult life. People who hold degrees tend to make significantly more money over the course of a lifetime than do people with only a high school education.

Of course, in many cases, some of those extra earnings are directed toward student loans which have been racked up in order to pay for college. If you have a significant amount of student loan debt that you would like to get off of your shoulders, consider these three tips?to help you pay off student loans quicker.

Make Them a Priority

Simply put, you can pay off your student loans faster if you decide to move them up in your budget ?priority list.’

Everyone has to make budget choices on a day to day basis, so keeping your student loans near the front of your mind can go a long way toward paying them off sooner.

For example, instead of going out for dinner tonight, you could choose to eat at home and use the $20 you saved to pay down your loans. While that might not seem like much, it can quickly add up in a big way. If you make that choice once per week for an entire year, you will have saved more than $1,000 that could be used toward your student loans. These decisions might not be fun in the short-term, but they will feel great in the long run when you are able to work your way out from under the debt you accrued.

Earn Extra Money Online

There are a number of ways to earn money online these days ? and you could choose to use one of those methods in order to make extra payments on your student loans. For instance, you could pick up some freelance work in a field in which you are trained, and you could set that money aside for student loan payments.

Even if you are only able to spend a little bit of time on this kind of work each day, you may be able to make a big dent after just a short period of time. Of course, there are a number of ?make money from home? scams around the web, so make sure you are pursuing a legitimate work from home opportunity. As a good rule of thumb, you shouldn?t have to invest any money upfront in order to work. If you are being asked for money, consider that a red flag that the ?opportunity? you have found is not a good one.

Save on Home and Car

If you aren?t yet locked into a mortgage or a big car payment, consider living in a smaller place or driving a cheaper car until you are able to pay off your loans. By keeping your expenses on these big items to a minimum, you should be able to clear our space in your budget for extra payments on your student loans.

Once your loans have been satisfied, you can then consider upgrading in one or both of these departments if you wish.

Have you done any of these things to help pay off student loans? What else can you do to help pay off student loans quicker?

Photo courtesy of:?Wokandapix

How to Survive College by Tutoring Online

June 15, 2016 Wise Dollar College No comments

The current economic climate has left a lot of people feeling a bit tight on their budgets. To some, this can only be a mild inconvenience that stops them from an occasional indulgence. To others, it can become a matter of survival.

While it is not unsound advice to encourage thriftiness and frugality for college students, this is not always an option. For those who need to throw hundreds of dollars on textbooks, it means passing down on good health care or a healthy meal.

These kind of situations can generate anxiety and stress for most college students ? which ends up affecting their academic performance.

Most college students are already juggling their education and one part- or full-time job to make ends meet. ?This, in itself, is quite remarkable, especially when you consider the huge academic loads they are also carrying. For this reason alone, it might be very hard for a student to take a second job, even if having an extra income would help their cause

Now, we all know that sacrifices must be made at some point in our lives to hopefully enjoy a better future. And, while these students are definitely investing in their future well-being, their present state should also be considered. Working yourself half-to-death for books and tuition could end up causing more harm than good in the long run.

This is why you should consider online tutoring to help you make ends meet and survive college.

Online Tutoring as a Way to Catch a Break

The good thing is, though, that college students possess two qualities that make them the perfect candidates to serve as online tutors: the knowledge they have acquired during their year in college and the experience of navigating the world that they acquired, well, since before they went on to college.

Also, chances are that most students have, at least, some informal teaching experience; whether it be from explaining something to a fellow classmate or an underclassman. And, even when this is lacking, they have first-hand experience being taught and have, for sure, determined which methods are more effective when it comes to transmitting knowledge.

What are the Advantages of Online Tutoring?

For college students, the most clear-cut advantage to online tutoring is the flexible schedule they?d be allowed to take. Since online tutors select their own working hours, they will never have to worry about their routines clashing. See, with online tutoring, the tutor gets to decide what times of the day will be devoted to the work. So, for days that are completely hectic, the student would have the freedom to simply not check-in to work. And, in the days of complete leisure, the student could choose to spend their entire day devoted to the work.

Another advantage is the freedom to choose which subjects to teach about. A student with a current major in Literature, for example, could teach English and Writing while a student with a major in Business Administration, could teach economics and finances. And, for those with multidisciplinary talents, could make their teaching experience as varied as they?d like because while the tutors can choose to specialize in their areas of interest, this does not limit their ability to take on other subjects.

Where to Settle In?

If you do decide to take on the task, there are different platforms available that will let you set up shop. The signup process is usually rather simple: register, create your profile, and set your rates. Now, depending on the platform the modality of teaching might change which is why I?d recommend you to go through as many in order to find your perfect fit. For first time tutors, the best options can be:

WizIQ offers various ways for you to handle your tutoring business. Here, you will be able to set up private classes or group lectures. You choose your hourly rates for both kind of lectures,
Studypool lets you handle tutoring on a Question and Answer basis. You bid to take control of a question and then get paid once you have answered. Notebank, a feature which allows you to upload your notes, and get paid by those who wish to buy them.
BuddySchool like WizIQ, lets you choose between personal and group lectures. It has its own grading system which students use to give you a score depending on your performance. The higher you score, the greater the amount of students coming your way will be.

Keep in mind that your attitude will be as important as your knowledge. Be kind with your student and, if you can, bask in the noble pursuit that is sharing information. This kind of job might not just fill your pockets but also your soul. Oh, and one more thing: Never forget to spend wisely.

Have you ever done any online tutoring? Did you consider online tutoring to make money in college?

Photo courtesy of: Unsplash

5 Ways to Save Money as a New College Graduate

June 8, 2016 Wise Dollar College, Saving One comment

Graduating from college is an exciting time to be sure. You have been in school for most of your life, so finally getting out can be an incredible feeling. You will probably feel like the world is at your fingertips, and you will have nearly endless options in front of you.

Of course, this time of life can also bring you a rude awakening, as it is at this point that many people realize just how expensive life can be. Now that you are out on your own in the ?real world?, the bills just might start to pile up in a hurry.

With that in mind, here are?five helpful ways for you to save money as a new college graduate. Good luck out there!

Get a Roommate

One of the first things you should do when getting out of college is seek to settle your living situation.?You will need a place to live, and you will want to keep costs down as low as possible at first.

Pick out a modest place and do your best to find a roommate (or two) to help you share the costs. Dividing up living expenses like rent and cable is a great way to lessen the burden that you will feel right out of college.

Wait for that New Car

It might be tempting to pick up a sweet new ride once you get your first adult job, but that is usually a mistake.

If possible, stick with the car you have for now ? or at least, buy a used car to get yourself started. There will always be plenty of nice cars for you to purchase later once you are settled in to adult life and have a good idea of your budget for a new car.

Learn to Cook

Do you know how to cook for yourself? If not, now is the time to start. Cooking most of your meals at home instead of ordering out is a great way to save money ? and it will likely be healthier as well. You don?t have to train yourself to be a gourmet chef, either. Even just some basic cooking skills and a few tools will go a long way to help you save money as a new college graduate.

Live Near Your Job

If you don?t yet have a spouse or kids to consider, think about finding a place to live that is as near to your job as possible. You will save on transportation costs this way, and since you have a short commute, you will have extra time available in your day as a side benefit.

Pick Up Extra Work

Speaking of not having a family just yet, this point in your life would be a good time to consider working an extra job, or taking on a side hustle, in order to make additional income that can be saved for later. Taking on a part time job on the weekends or in the evenings might not be a ton of fun, but it can do great things for your finances later on down the line.

Can you think of any other ways that new college graduates can save money? Did you do any of these things to save money as a new college graduate?

Photo courtesy of: robtowne0

3 Things You Should Know Before Taking out Student Loans

May 2, 2016 Wise Dollar College No comments

Graduation is not far away, and it?s past time to begin thinking about how you are going to pay for college in the fall. Which, might mean one thing – student loans.

If you waited until now to start thinking about saving for college, or if you haven?t saved as much as you thought you would, you may have to take out student loans to help pay for it. Even though taking out loans generally offers a pretty good return on your investment, because you can can earn?more with a bachelor?s degree than you would with only a high school diploma, you should still try to take out the smallest amount possible in student loans to get your degree.

When I was getting ready to attend college and was contemplating taking out student loans, there were a lot of things I didn?t know about taking out student loans. If that?s the case for you too, here are three things you should know before signing on the dotted line and taking on the debt.

Federal vs Private Student Loans

There are two main types of student loans, federal student loans and private student loans. Federal student loans are made by the government and come with a lot of benefits that may not be available via private student loans. For instance, federal student loans offer a fixed interest rate for the life of your loan, the option to delay repayment until six months after graduation, and the option to restructure your loan repayment plan based on your income or delay payment if you lose your job.

That said, private student loans taken out through a bank or credit union may offer a lower interest rate. Even though that may look attractive, federal student loans are usually the better option.

A Longer Repayment Term Isn?t Necessarily Better

When you first graduate from college and your student loan payments kick in, it can be tempting to stretch the repayment term out as far as possible to help lower your monthly payment. Sometimes this is necessary because your budget is tight, but if you can afford to pay more by giving up something else from your budget, like cable or eating out, you?ll save money in the long run. Paying larger monthly payments will shorten your repayment term and can help you save a significant amount of money on interest.

Reduce Your Need for Student Loans

Rather than depending on student loans to entirely finance your education, you?ll save a lot of money by finding ways to take out less in loans. One idea is to work during the summers between high school. It can be tempting to spend that money on movie nights, eating out and new clothes, but your future self will thank you if you save at least some of it to help pay for college.

Another option is to work during college. Most students can find a way to fit in a few hours of work each week during the semester, and you can once again take on a job with more hours during the summer. This money can help you pay for your living expenses so you don?t have to use student loan money to help pay for those things.

Overall, I?m not of the opinion that student loans are the worst thing out there. In fact, I took out student loans to help pay for some of my college education too. But it?s important to keep in mind that student loans are still debt that has to be repaid at some point.

Have you taken out student loans? Were you aware of all of these things before you took out student loans?

Photo courtesy of: 0TheFool

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