Tag: loan management

College Funding Changes In The Pandemic Relief Bill

There are several student financial aid provisions in the pandemic relief package that was included in the Consolidated Appropriations Act of 2021 that passed the House and Senate on Monday, December 21, 2020.

Student Loan Relief

Student loan borrowers are disappointed that the legislation did not include an extension to the student loan payment pause and interest waiver, nor did it provide any student loan forgiveness.

The payment pause and interest waiver is set to expire on January 31, 2021. President-elect Joe Biden will be able to extend it further after he takes office on January 20, 2021. Several possible extension dates have been floated, including April 1, April 30 and September 30, but Joe Biden has not yet said anything specific about the extension, just that it is needed.

Nevertheless, there are some changes in the legislation that affect student loan borrowers. In particular, the tax-free status of employer-paid student loan repayment assistance programs (LRAPs), which was set to expired on December 31, 2020, has been extended for five years through the end of 2025. Such LRAPs will be exempt from income and FICA taxes for both the employee and the employer.

PROMOTED DP World BrandVoice | Paid Program Track And Trace Technology Is The Disruption Automotive Logistics Needs UNICEF USA BrandVoice | Paid Program Young Changemakers Are Shaping A Better World Grads of Life BrandVoice | Paid Program How Reimagining Employment Practices Can Advance Racial Justice

SULA, a complicated set of limits on subsidized Federal Direct Stafford loans, has been repealed. SULA mostly affected students who transferred from a 4-year college to a 2-year college.

In addition, there have been a few changes concerning the U.S. Department of Education’s Next Generation Processing and Servicing Environment (NextGen) for federal student loans.

  • New student loan borrower accounts must be allocated to loan servicers based on their past performance and servicing capacity.
  • Borrower accounts must be reallocated from servicers for “recurring non-compliance with FSA guidelines, contractual requirements, and applicable laws, including for failure to sufficiently inform borrowers of available repayment options.” Applicable laws include consumer protection laws.
  • NextGen must allow for multiple student loan servicers that contract directly with the U.S. Department of Education.
  • NextGen must incentivize more support to borrowers at risk of delinquency or default.
  • Borrowers must be allowed to choose their loan servicer when they consolidate their federal loans.
  • The U.S. Department of Education must improve transparency through expanded publication of aggregate data concerning student loan servicer performance.

MORE FOR YOUTrump May Not Sign Stimulus Bill Without $2,000 Stimulus Checks; Here’s What Could Happen NextBiden May Support Only $10,000 In Student Loan ForgivenessBiden Says He Is “Unlikely” To Cancel $50,000 In Student Loan Debt By Executive Order

Changes in College Tuition Tax Breaks

The legislation changes the income phaseouts for the Lifetime Learning Tax Credit (LLTC) to be the same as the income phaseouts for the American Opportunity Tax Credit (AOTC), starting with tax years that begin after December 31, 2020.

The Lifetime Learning Tax Credit will start phasing out at $80,000 for single filers and $160,000 for taxpayers who file as married filing jointly. The tax credit is fully phased out at $90,000 (single) and $180,000 (married filing jointly). Married taxpayers who file separate returns are not eligible.

For comparison, the 2020 income phaseouts for the LLTC were $59,000 to $68,000 (single) and $118,000 to $136,000 (married filing jointly).

The new income phaseouts will not be adjusted for inflation.

In addition, the legislation repeals the Tuition and Fees Deduction, effective with tax years that begin in 2021. This is a permanent repeal, so the Tuition and Fees Deduction will not be resurrected by the next tax extenders bill.

New Funding for Higher Education Emergency Relief Fund

The $81.88 billion for the Education Stabilization Fund includes

  • $54.3 billion for the Elementary and Secondary School Emergency Relief Fund
  • $22.7 billion for the Higher Education Emergency Relief Fund (HEERF)
  • $4.05 billion for the Governor’s Emergency Education Relief Fund, of which $2.75 billion has been earmarked for Emergency Assistance to Non-Public Schools

The Higher Education Emergency Relief Fund previously received $16 billion as part of the CARES Act.

The allocation formula for the HEERF funding is more complicated than the one in the CARES Act, but the allowable uses are similar. Public and private non-profit colleges are required to use at least half of the money for financial aid grants to students. Private for-profit colleges are required to use all of the money for financial aid grants to students. Colleges must provide at least the same amount of emergency financial aid grants to students as they did under the CARES Act provisions, even if their total allocation is lower.

The emergency financial aid grants to students can be used for any element of the student’s cost of attendance or for emergency costs related to the pandemic, such as “tuition, food, housing, health care (including mental health care), or child care.”

The grants must be prioritized to students with exception financial need, such as Pell Grant recipients.

The emergency financial aid grants to students are tax-free.

Most College Students Remain Ineligible for Stimulus Checks

Most college students will remain ineligible for the recovery rebate checks, also known as the stimulus checks.

The legislation includes the same restriction that limits the $600 per qualifying child to children age 16 and younger. Only 0.1% of undergraduate students are age 16 or younger.

College students who are under age 24 are also ineligible, because they can be claimed as a dependent on someone else’s federal income tax return. The remain ineligible even if they are not claimed on someone else’s tax return.

A college student might qualify if they are married and file a joint return with their spouse or if they provide more than half of their own support. About 15% of undergraduate students are married. College students who are 24 years old or older may also qualify. More than 40% of undergraduate students are 24 years old or older.

Invest $500 to get $2500 in a week completely legit

College students can still claim the $1,200 stimulus checks from the CARES Act in addition to the new $600 stimulus checks, if they are eligible.

Increase in the Maximum Pell Grant

The maximum Federal Pell Grant has been increased to $6,495 for the 2021-2022 academic year.

Eligibility criteria will be pegged to a multiple of the poverty line starting with the 2023-2024 academic year. Students will be eligible for the maximum Pell Grant if they and their parents/spouse, as applicable, are not required to file a federal income tax return or if their adjusted gross income (AGI) is less than 175% to 225% of the poverty line. The higher threshold is reserved for households involving a single parent.

FAFSA Simplification

The legislation simplifies the Free Application for Federal Student Aid (FAFSA) starting with the 2023-2024 academic year. The new FAFSA reduces the number of questions on the form by two-thirds, from 108 questions to about three dozen questions. Follow me on Twitter. Check out my website or some of my other work here. 

Mark Kantrowitz

Mark Kantrowitz

I am Publisher of PrivateStudentLoans.guru, a free web site about borrowing to pay for college. I am an expert on student financial aid, the FAFSA, scholarships, 529 plans, education tax benefits and student loans. I have been quoted in more than 10,000 newspaper and magazine articles about college admissions and financial aid. I am the author of five bestselling books about paying for college and have seven patents. I serve on the editorial board of the Journal of Student Financial Aid, the editorial advisory board of Bottom Line/Personal, and am a member of the board of trustees of the Center for Excellence in Education. I have previously served as publisher of Savingforcollege.com, Cappex, Edvisors, Fastweb and FinAid. I have two Bachelor’s degrees in mathematics and philosophy from the Massachusetts Institute of Technology (MIT) and a Master’s degree in computer science from Carnegie Mellon University (CMU)

.

.

University of California Television (UCTV)

How to pay for college is a pressing question for all applicants from the class of 2020. COVID-19 has caused financial uncertainty and many are having to rethink their plans. Jodi Okun, an expert in financial aid, joins Steven Mercer to talk about how the pandemic is impacting financial aid awards, what to do if your family’s financial situation has changed, and how to plan for the future in uncertain times. [Show ID: 35963] More from: STEAM Channel (https://www.uctv.tv/steam) UCTV is the broadcast and online media platform of the University of California, featuring programming from its ten campuses, three national labs and affiliated research institutions. UCTV explores a broad spectrum of subjects for a general audience, including science, health and medicine, public affairs, humanities, arts and music, business, education, and agriculture. Launched in January 2000, UCTV embraces the core missions of the University of California — teaching, research, and public service – by providing quality, in-depth television far beyond the campus borders to inquisitive viewers around the world. (https://www.uctv.tv)

These Are The 5 Worst Ways To Pay Off Student Loans

Image result for Student Loans

These are literally the 5 worst ways to pay off student loans. Here’s what you need to know – and what to do about it.

1. Pay only the minimum payment

What’s wrong with only paying the minimum payment? After all, that’s your obligation, right? Remember: interest is always accruing on your principal balance. So paying any amount more than the monthly minimum can lower the cost of your student loans. For example, let’s assume you have $70,000 of student loan debt at a 8% interest rate with a standard 10-year repayment term. By paying only $100 extra per month, you can save $5,271 in interest costs and pay off your student loans 1.51 years earlier.

Do This Instead: You can always pay more than the minimum amount. Student loans have no prepayment penalties.

2. You don’t apply for student loan forgiveness

It would be nice if one company can forgive all your student loans. However, to receive student loan forgiveness, you either need to enroll in an income-driven repayment plan or participate in student loan forgiveness program such as Public Service Loan Forgiveness or Teacher Loan Forgiveness.

1.png

Do This Instead: If you decide to apply for a federal student loan forgiveness program, make sure you understand the requirements for student loan forgiveness so you don’t get stuck. The requirements can be tricky.

3. Never make an extra student loan payment

Why would you pay more than you have to? Well, making an extra student loan payment can be one of the best ways to pay off student loans faster. Here’s how it works: in addition to making 12 monthly payments per year, consider an extra payment once every three months for a total of 16 payments per year.

Do This Instead: Be sure to inform your student loan servicer in writing to apply any extra payment to your principal balance only (not to next month’s monthly payment) to limit the amount of interest that accrues.

4. Never make a lump-sum student loan payment

Should you use your bonus to pay off student loans? What about the trip to Jamaica? A lump-sum payment can be any amount. For example, let’s assume that you have $75,000 in student loans at an 8% interest rate and a 10-year repayment term. If you make a one-time, lump sum payment of $5,000, you would save $4,850 on your student loans and pay off your student loans 10 months early.

Do This Instead: Whenever you get a pay raise, bonus, tax refund or gift from grandma, make a lump-sum to pay off student loans. Every dollar counts.

5. Don’t refinance student loans

Student loan refinancing is often the single best strategy to lower your student loan rate. When you refinance student loans, you can lower your interest rate on your federal student loans, private student loans or both. Student loan refinancing rates are absurdly cheap now and start at 1.99%, which is substantially lower than federal student loans and in-school private loan interest rates. Each lender has its own eligibility requirements and underwriting criteria, which may include your credit profile, minimum income, debt-to-income ratio and monthly free cash flow. To maximize your chances of being approved to refinance student loans, you should apply to multiple lenders and consider a co-signer.

This student loan refinancing calculator shows you how much you can save when you refinance student loans.

Do This Instead: Apply to refinance student loans. You can check your new interest rate for free in about two minutes and then apply online in about 10-15 minutes.

Follow me on Twitter or LinkedIn. Check out my website or some of my other work here.

Zack Friedman

Zack Friedman is the bestselling author of the blockbuster book, The Lemonade Life: How To Fuel Success, Create Happiness, and Conquer Anything. Apple named The Lemonade Life one of “Fall’s Biggest Audiobooks” and a “Must-Listen.” Zack is the founder and chief executive officer of Make Lemonade, a leading personal finance company that empowers you to live a better financial life. He is an in-demand speaker and has inspired millions through his powerful insights. Previously, he was chief financial officer of an international energy company, a hedge fund investor, and worked at Blackstone, Morgan Stanley, and the White House. Zack holds degrees from Harvard, Wharton, Columbia, and Johns Hopkins.

Source: These Are The 5 Worst Ways To Pay Off Student Loans

2

Helps To Drive more Leads and more Sales 100% Newbie-friendly Works With WordPress, ClickFunnels, Leadpages, Shopify, Wix, all HTML websites and hundreds Of Other Programs Create your own custom Chatbots in MINUTES Also use it to provide Customer Support and dramatically reduce your Support tickets Microsoft Cloud-based software with 99.99% uptime Fully integrates with Google Analytics, Google Ads and Facebook Ads Fully integrates with Aweber, MailChimp, Getresponse, Maropost, ActiveCampaign, ConvertKit and Sendlane Works with 1,300+ Apps through integration with Zapier Works in any language GDPR compliant Step-By-Step training videos Dedicated Support Unlimited Chatbots Multi-Site License (Install On Unlimited Websites) 10 Done-For-You “AI Chat” Templates (Includes eCommerce, Lead Generation & List-Building) (RRP: $197) FULL Commercial License (Sell Your Bots For 100% Profit)

How to Determine Exactly How Much Money You Need to Push Your Business to the Next Level

Too often, entrepreneurs–especially inexperienced ones–take the “luxury” approach to funding, incorporating every bell and whistle into their expansion plan by trying to accomplish all goals at one time. That’s nice, but it’s usually not reality and often forces businesses to be cash strapped because of high debt repayments.

That’s why I suggest entrepreneurs take a three-pronged approach to their expansion planning. This exercise helps businesspeople ruthlessly prioritize their needs and determine what is a must and what is frivolous.

A, then B, then C

Let’s say an entrepreneur believes he or she needs $1 million to make their expansion plans a reality.

Now, write up a plan for that amount. What are you going to do with that million? What are the specific investments you will make? What will your cash flow look like afterward? What does your business, in general, look like?

Now do the same exercise with $500,000. Ask yourself the same questions, as well as anything else that’s pertinent. Can you primarily accomplish the same goals with half the cash?

Finally, do the exercise one more time, this time with a loan of only $250,000. What are the answers to the questions now? Might it be possible to do what you want to do with only a quarter of the original loan?

And the answer is…

No set answer will be correct.

Perhaps your initial inclination that you need $1 million was correct. And there’s a good chance that $250,000 simply won’t get the job done.

But there is a decent probability that the middle option might be feasible, especially if it makes you realize that some of the more frivolous “wish list” things you’d like to do are best set aside for now. Remember, you don’t have to accomplish everything at once, and a scaled-down plan might allow you to better focus on more important things, preventing you from overextending yourself.

Of course, don’t get too stuck on exact numbers. Maybe this exercise will have you realize your plan can go ahead effectively for $790,000. Or $615,000. Or $485,000. Or any other number.

The purpose is to gain some clarity and sharpen your focus–not to mention to allow you to decide what makes you most comfortable and enables you to sleep at night. Don’t underestimate the value of that.

Also, keep in mind the time factor. The larger the loan you seek, the longer it likely will take to receive approval from a lender. The saying “time is money” always rings true, especially in this scenario. You might miss opportunities waiting for lender approval.

Remember, business tends to be more of a marathon than a sprint. You need to pace yourself in all aspects, including financing, to better your odds of finishing the race. Hopefully, this exercise helps you accomplish that.

By Ami KassarCEO, MultiFunding.com @amikassar

 

Source: How to Determine Exactly How Much Money You Need to Push Your Business to the Next Level

TED
15.6M subscribers
Trust: How do you earn it? Banks use credit scores to determine if you’re trustworthy, but there are about 2.5 billion people around the world who don’t have one to begin with — and who can’t get a loan to start a business, buy a home or otherwise improve their lives. Hear how TED Fellow Shivani Siroya is unlocking untapped purchasing power in the developing world with InVenture, a start-up that uses mobile data to create a financial identity. “With something as simple as a credit score,” says Siroya, “we’re giving people the power to build their own futures.” TEDTalks is a daily video podcast of the best talks and performances from the TED Conference, where the world’s leading thinkers and doers give the talk of their lives in 18 minutes (or less). Look for talks on Technology, Entertainment and Design — plus science, business, global issues, the arts and much more. Find closed captions and translated subtitles in many languages at http://www.ted.com/translate Follow TED news on Twitter: http://www.twitter.com/tednews Like TED on Facebook: https://www.facebook.com/TED Subscribe to our channel: http://www.youtube.com/user/TEDtalksD…

Student Loan Refinancing Just Got Crazy Cheaper

Student loan refinancing rates have dropped even lower.

Here’s why and what you need to know.

Student Loan Refinancing: Rates Drop Even Further

Student loan refinance rates now have dropped to as low as 2.01%.

Why? The Federal Reserve cut interest rates, and lenders have reduced student loan refinancing rates to a near-term low. That’s great news for student loan borrowers who want to refinance student loans, get a lower interest rate and save money.

Here’s how to refinance your student loans.

Student Loan Refinancing: Should I Refinance Student Loans?

Today In: Money

Many people ask: Should I refinance student loans?

If you want to save money and pay off student loans faster, student loan refinance is an effective tool. When you refinance student loans, you exchange your current student loans for a new, single student loan with a lower interest rate.

Student loan refinancing has several advantages, including:

  • lower interest rate
  • single monthly payment
  • fixed or variable interest rate
  • flexible 5-20 year loan repayment term
  • one student loan servicer
  • pay off your student loans faster
  • save money

Student Loan Refinancing: How To Apply

If you want to know how to refinance student loans, it’s important to understand how to apply. The good news: the process is simple.

Step 1: Find the best interest rate

There are multiple trusted, online lenders that can refinance student loans with low interest rates and easy, online applications. Compare the best interest rates and loan terms. Most borrowers will refinance student loans with the lender who gives them the lowest interest rate. Most lenders allow you to check your preliminary interest rate online for free within two to three minutes without any impact to your credit score.

Step 2: Use a student loan refinancing calculator 

This free student loan refinance calculator shows you how much money you can save when you refinance student loans.

For example, let’s assume you have a $100,000 student loan at an 8% interest rate and 10-year repayment term. If you refinance that student loan with a 3.0% interest rate and 10-year repayment term, you would lower your monthly payment by $248 and save $29,720 in total payments. If you are a doctor, dentist or pharmacist with a large student loan balance, your savings may be even higher.

Step 3: Apply online

You can apply online for student loan refinancing. Most applications take 10-15 minutes to complete. You can also upload any supporting documents, which may include a copy of your driver’s license, transcripts, recent paystubs or job offer letter.

Student Loan Refinance: Key Questions

1. Do I qualify for student loan refinance?

While each lender has its own underwriting criteria, the best candidates for student loan refinancing typically have the following:

  • A credit score of 65o or higher
  • Current employment or a written job offer
  • Stable, recurring monthly income
  • A low debt-to-income ratio
  • No defaults on their student loans

What if you don’t satisfy these requirements? You should apply with a co-signer with strong credit and income. Your co-signer can help you get approved for student loan refinancing and help you receive a lower interest rate. Your co-signer will be equally financially responsible for the student loan. However, some lenders allow the co-signer to be released from any financial obligations after meeting certain requirements.

You can maximize your chances of getting approved to refinance student loans by applying to multiple lenders. Each lender makes a separate decision, so getting rejected from one lender does not negatively impact your chances with another lender.

2. Can you refinance Parent PLUS Loans?

Yes. Parent PLUS Loans carry relatively high interest rates, so refinancing Parent PLUS Loans is a smart way to lower your interest rate and save money.

3. What are the fees to refinance student loans?

There are no fees to refinance your student loans. If any lender tries to charge you a fee to refinance student loans, find another lender. There are also no prepayment penalties, so you can pay off student loans anytime with no charge.

4. Should I refinance my federal student loans?

You should not refinance federal student loans if:

  • you plan to pursue public service loan forgiveness or an income-driven repayment plan
  • you want access to deferral or forbearance options

You can still refinance your private student loans and leave your federal student loans outstanding. Most lenders today offer employment protection if you lose your job and want to pause your monthly payments.

5. When should I refinance student loans? How often can I refinance student loans?

When should you refinance student loans? The answer: you should refinance student loans whenever you qualify for a lower interest rate. If you can get a lower interest rate and save more money, then it may be a smart financial move.

How often can you refinance student loans? There are no fees to apply, no fees to refinance, and no limit to how often you can refinance student loans.

Follow me on Twitter or LinkedIn. Check out my website.

Zack Friedman

Zack Friedman is the bestselling author of the highly-anticipated, blockbuster book, The Lemonade Life: How To Fuel Success, Create Happiness, and Conquer Anything. Zack is the founder and chief executive officer of Make Lemonade, a leading personal finance company that empowers you to live a better financial life. He is an in-demand speaker and has inspired millions through his powerful insights. Previously, he was chief financial officer of an international energy company, a hedge fund investor, and worked at Blackstone, Morgan Stanley, and the White House. Zack holds degrees from Harvard, Wharton, Columbia, and Johns Hopkins.

Source: Student Loan Refinancing Just Got Crazy Cheaper

14.7K subscribers
5.🔸Sofi ($100 Bonus): sofi.com/share/2345532 4.🔸Splash Financial ($300 Bonus for $30k refi or more): https://splash-financial.sjv.io/X5YXo 3.🔸Commonbond: http://bit.ly/CommonBondTF 2.🔸LendKey ($200 Bonus): https://mbsy.co/v9bGH 1.🔸Earnest: https://earnest.pxf.io/1KGY9 *Keep in mind that any bonus can change at any time* We go over the top 5 Student Loan Refinance Companies. As well as talk about a few important things to know before doing a student loan refinance. ●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●● 🔔SUBSCRIBE ➡ ​https://www.youtube.com/trufinancials…… ●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●● Disclaimer: I am not a CPA, attorney, or financial advisor and the information in these videos shall not be construed as tax, legal, or financial advice from a qualified perspective. If you need such advice, please contact a qualified CPA, attorney, or financial advisor. Some of the links are affiliate links. Which means if you click on some of the links I will make a small commission at no additional cost to you. This helps keep me making videos and providing value. Thank you for your support!

Category

Education

Peloton IPO Disappoints, But Fintech Lender Oportun Gains 8% In Nasdaq Debut

Oportun Financial, a fintech company that offers low-cost loans to those it calls “credit invisible,” raised $94 million in its IPO on Thursday. The company, which offered 23% of its outstanding shares to the public, debuted on the Nasdaq under the ticker OPRT.

The trading day’s most anticipated IPO, fitness startup Peloton, ended in disappointment after the stock closed 11% lower than its IPO price, but Oportun closed its first day of trading with an 8% gain and showed no signs of slowing down in the hours immediately following the market’s close.

Oportun sold 6.25 million shares (a quarter of which were from insiders) priced at $15, on the lower end of its target range of $15 to $17.  Shares jumped to $16.43, or nearly 10%, initially, but as of 2:00 p.m. EST were trading closer to $16. Shares had climbed back $16.17 by 4:00 p.m. EST.

Today In: Money

Oportun’s focus is the 100 million American borrowers with no credit or limited credit history, as well as those it says have been “mis-scored” by traditional methods that do not accurately reflect creditworthiness. The company brought in nearly $500 million in revenue last year, up from $360 million in 2017.

Oportun was founded in 2005 to serve the underbanked Hispanic community and once operated as Progreso Financiero. It has since broadened its mission and disbursed more than $7.3 billion in loans ranging from $300 to $9,000 to more than 1.5 million customers, about half of whom did not have a FICO score when they were awarded their first loan.

The San Carlos, California-based company uses traditional credit bureau scores as well as alternative data, like a borrower’s mobile phone and utility payment history, to assess creditworthiness, much in the same way that startups like Tala, which provides micro loans to the unbanked, and Kabbage, which provides small business loans, do.

Fintech IPOs have been few and far between in recent months, despite a public market newly saturated with tech giants like Slack, CrowdStrike, Uber, and Peloton. Only three fintech unicorns went public last year, according to CB Insights, and just one in the United States: online home improvement lender GreenSky, which raised $800 million in its May 2018 IPO. Its shares have fallen more than 70% since its offering.

According to a PitchBook analysis, none of the top ten most valuable fintech companies, including Stripe, Coinbase, Robinhood, and TransferWise, all of which are at least ten times Oportun’s size, are close to a public offering.

“Our decision to go public was driven in large part by our desire to get the capital we need to continue the pursuit of our mission,” Oportun CEO Raul Vazquez said. He says the company is planning to strengthen its presence in the 12 states in which it operates, expand to new markets on the East Coast, and launch a credit card product in the first quarter of 2020. Prior to its IPO, Oportun had raised $266 million from the likes of Fidelity Management and Institutional Venture Partners.

Oportun’s offering is expected to close on September 30. Barclays, J.P. Morgan Securities, and Jefferies were the lead underwriters.

Follow me on Twitter. Check out some of my other work here. Send me a secure tip.

Sarah Hansen

I’m an assistant editor on Forbes’ Money team, covering markets, fintech, and blockchain. I recently completed my master’s degree in business and economic reporting at New York University. Before becoming a journalist, I worked as a paralegal specializing in corporate compliance and the Foreign Corrupt Practices Act.

Source: Peloton IPO Disappoints, But Fintech Lender Oportun Gains 8% In Nasdaq Debut

The Wall Street Journal created this video as part of their Financial Inclusion Challenge. Oportun was a finalist for using technology to help low-income workers build credit.

Category

News & Politics

%d bloggers like this: