Deduct Your Student Loans!

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Chances are that if you have student loans, you need every bit of extra cash that you can get. Did you realize that your student loans might be able to generate some cash for you?

Under certain circumstances, you may be able to save on your tax bill by deducting the interest that you pay on your student loan. The total deduction from your taxable income could be as much as $2,500. As a final bonus, you do not have to itemize to claim this deduction.

To be eligible for the deduction, your loan must meet certain qualifications. It must have been made to cover qualified education expenses as defined in IRS Publication 970, including tuition, fees, and most room and board charges. The loan cannot have come from a relative or via a qualified employer plan, and the e…

New Law Proposed To End College Debt

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No More Collegiate Debt

Could the next drag on America’s economy come from student loans?According to StudentLoanHero.com, America’s student loan debt burden hit $1.56 trillion – more than any other kind of household debt except for mortgages.

Student loans are one of the most pervasive debts. The Department of Education offers assistance programs, but participants who don’t exactly follow loan servicer instructions can rack up unanticipated interest charges or lose debt forgiveness. If you fall behind with payments, you’re stuck dealing with debt collectors – because student loans generally can’t be discharged in bankruptcy.

Help for current and future students may come from Congress, thanks to the recently proposed Debt-Free College Act. The bill’s sponsor, Sen. Brian Schatz (D-HI), aims to improve state funding for public universities through federal incentives. The proposed bill would set up federal matching dollars for state spending programs…

Student Loans Keeping Young People From Buying Homes

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According to the New York Fed’s latest Quarterly Report on Household Debt and Credit, America’s student loan debt burden has reached a staggering $1.44 trillion as of September 2018. Has that burden kept younger Americans from buying homes?

A new Federal Reserve study suggests that educational debt isn’t the primary reason for the homeownership decline, but it does play a role.

America’s total homeownership percentage fell from 69% to 65% between 2005 and 2014, but homeownership for the age group 24-32 fell from 45% to 36% during the same period. Meanwhile, college debt per capita increased from $5,000 to $10,000 in the same time frame – a debt more likely to affect the age group in question. Are the two trends related?

Fed economists set up probability models to estimate the effect of increased debt on homeownership rates during the study period. According to the models, student loan debt was responsible for 1.8 percentage points out of the 8.8% total …

Student Loan Survey: Borrowers Are Afraid To Refinance

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By Amy Beardsley

When it comes to student debt, more than half of borrowers are struggling to make their payments. Refinancing your student loan is an excellent option to lower your monthly bill or to pay less interest over the life of your loan.

Even though refinancing could make student loan debt more manageable, the latest survey by Student Loan Planner found that 85% of borrowers are afraid to refinance their student loans. Why do borrowers fear refinancing when it could save them thousands of dollars?

According to the survey, half of borrowers didn’t know you can refinance more than once and 65% of respondents haven’t refinanced their student loan at all. Two-thirds of respondents can’t name more than two refinancing companies, while almost half (40%) of borrowers who did refinance shopped at only one place.

Young Seniors Have High Non-Mortgage Debt

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By Sandra Parsons

Debt is a major barrier to financial well-being among Americans. While we tend to think of debt as an issue affecting young and middle-aged people, the truth is that senior citizens carry debt, too. Among seniors approaching retirement, debt can be an obstacle to maximizing savings. Retirees living on a reduced income may find debt especially crippling in an economy of rising costs.

Using an anonymized sample, LendingTree analyzed 2018 second quarter credit report data for 75,000 My LendingTree users aged 65-70 across the fifty largest metropolitan centers in the US. They calculated three main metrics: median non-mortgage debt balances; distribution of debt by type (auto loans, credit cards, personal loans, student loans); and average credit score. The results might surprise you.

The Average Median Non-Mortgage Debt Among Retirement-Aged…

Student Loans Are Hurting Millennials’ Net Worth

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Student loan debt in America has topped $1.5 trillion dollars, and millennials hold a large amount of that debt burden. As of 2017, 37.5% of Americans with student loan debt were under the age of thirty.

A new study by MagnifyMoney highlights the difficulties millennials face because of their debt. Since student debt draws money away from other savings and investment opportunities, the long-term effect on net worth can be devastating.

The short-term effect on net worth is striking as well. According to the study, millennial households without student debt have an average net worth of $114,376. Millennial households holding student debt have an average net worth of $29,087 – approximately 75% less than their student-debt-free counterparts.

The discrepancy shows up in all financial aspects.

Millennial households without student loan burdens have almost twice as much in their savings and checking accounts compared to those with student loans ($10…

Asking A College to Reconsider Their Financial Aid Package

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When a college makes an offer of financial aid, parents and students have the right to appeal and discuss the findings with the financial aid officer. In some cases, the institute of higher learning may up their offer.

When possible, try leveraging off of any aid packages offered by a competing institution where you applied. Some amount of aid is kept in reserve to enhance offers for kids schools really want. Contact the financial aid officer indicating that the school is your child’s preferred choice but that other schools offered better packages. Competition never hurts and here it may help you. Provide specifics of the other aid packages. Do this as soon as possible before the reserve funds are exhausted.

Financial aid officers may also exercise “professional judgment” to review and change offers. “Special circumstances” are the basis of exercising such judgment. Special circumstances may include unusual or one-time income in the Base Year used to calculate th…

Scary Financial Facts

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Are you ready for some Halloween horror stories? Forget Freddy Krueger, Jason Voorhees, or Michael Myers – we’ve got something really scary for you. Those three famous horror movie characters can’t compete with these three real-life financial horrors.

The Debt’s Coming from Inside the House! Get Out Now! – America’s national debt has topped a staggering $21.6 trillion – but your main concern is your own household debt. Unfortunately, America’s household finances aren’t in much better shape.

According to the New York Federal Reserve’s Q2 2018 Household Debt and Credit Report, aggregate household debt is $13.29 trillion – the highest collective debt ever. Household debt has been rising for the last sixteen quarters. Outstanding student loans alone have topped $1.5 trillion. Revolving debt – mostly credit card debt – hit $1.03 trillion.

Out-of-control spending can crush your finances. To prevent spending binges,

5 Tips For Saving Money In College

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By Roshni Chowdhry, head of customer experience at SafetyNet

Of the 17 million Americans currently enrolled in college, 74 percent qualify as what we used to call “nontraditional” students:

  • One in five is 30 years or older.
  • About half don’t rely on their parents for money.
  • One quarter are caring for a child.
  • 47 percent attend college part time at some point.
  • 25 percent took a year off between high school and college.
  • 44 percent have parents without a bachelor’s degree.

In other words, if you’re a college student today, there’s a good chance you’re not the Hollywood stereotype of an 18-year-old on your own for the first time. Still, whether it’s your first year of indepe…