5 Halloween Headaches and How Insurance Can Help

When ghosts and goblins run amok, only people with the right insurance will be in luck. Find out which policies pay when Halloween pranks are more trick than treat — or when something more serious happens.

1. Your car gets egged

Last year, insurance claims related to car vandalism increased on Halloween and the days before and after, says Kevin Quinn, vice president of claims at Mercury Insurance. Raw eggs, pumpkins and rocks are all common projectiles.

How insurance can help: If your car can’t be cleaned or suffers serious damage, such as a broken window, it’s usually covered by comprehensive car insurance.

2. Goblins toilet-paper the yard

It’s not uncommon for little goblins to damage trees or landscaping while “TP’ing” a yard.

How insurance can help: Homeowners insurance generally will cover you. If you’re making a claim, call your insurer for an inspection before cleaning up. An adjuster needs to document the damage.

3. Yard decorations disappear

Whether it’s your vintage lawn gnome or a lifesize animatronic zombie, yard decor is vulnerable to Halloween thieves.

How insurance can help: Standard homeowners, condo and renters insurance often provides coverage if outdoor decorations disappear. Just be sure you’ve saved the receipts and made a police report.

4. The jack-o’-lantern starts a fire

As with vehicle vandalism, residential fires are more common around Halloween, according to the U.S. Fire Administration. The biggest causes are cooking and heating, but carelessness, open flames, electrical malfunctions and intentional acts can also be to blame.

How insurance can help: Fire damage is covered by homeowners insurance, including living expenses if you have to stay elsewhere during repairs. Rented property typically is covered by the landlord’s policy, but you’ll need renters insurance to get reimbursed for personal belongings.

5. Pedestrians act unpredictably

Besides New Year’s, Halloween sees a higher number of pedestrian deaths than any other night of the year, according to the National Highway Traffic Safety Administration. Sadly, many victims are children.

Costumed kids can be hard to see, often roaming without their parents and more likely to dart into the street, says Nicole Mahrt-Ganley, senior director of public affairs at the Property Casualty Insurers Association of America.

She says adults who are distracted by their mobile devices or intoxicated can also be unpredictable pedestrians.

How insurance can help: Your auto liability insurance covers injuries you cause while driving.

Halloween insurance tips

  • Prevent problems: Park cars in the garage or a well-lit area, use battery-operated candles or glow sticks in your pumpkin and be cautious when driving on trick-or-treat night.
  • Don’t make small claims: If damaged or stolen items are worth less than your deductible, it’s not worth making an insurance claim.

The article 5 Halloween Headaches and How Insurance Can Help originally appeared on NerdWallet.

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Don’t Ignore the Signs of Financial Abuse

Nearly 70% of millennial women have experienced financial abuse by a romantic partner.

Let that sink in for a second.

That means, for every 10 women you know in that age group, odds are that seven of them have had a partner use money to control or manipulate them, according to a 2017 survey of 2,000 people ages 18-35 by CentSai, a financial wellness website.

Sadly, it’s not surprising given that 1 in 4 women will experience intimate partner violence in their lifetime — often for the first time before they are 25 years old, according to the Centers for Disease Control and Prevention. And financial abuse is present in nearly all domestic abuse cases.

But financial abuse can and does occur absent of any physical violence. And it isn’t strictly a millennial problem, nor is it something that happens exclusively to women. Almost 50% of men in the survey by CentSai said they experienced some form of financial abuse.

Recognizing financial abuse

Financial abuse can run the gamut from subtle to egregious.

It might look like a partner who can’t keep a job or pay their share of the bills. Or one who makes you feel guilty for spending your own money. But it could also be a partner who offers to handle the household finances, then gradually restricts your access to those accounts.

Some other common forms of financial abuse:

  • They open credit cards in your name without your knowledge.
  • They default on accounts in your name, ruining your credit.
  • They make you take out loans or borrow from your family, but don’t pay it back.
  • They hide money from you.
  • They refuse to let you work or try to sabotage your career.

If you feel like you’re being taken advantage of financially, bring it up with your partner. How they react will tell you a lot.

Do they get angry? Do they shift the blame to you? Do they make you feel guilty for questioning them? Or do they apologize and take meaningful steps to remedy the situation?

“A good sign is if you feel like you can have that conversation and your partner is receptive to it,” says Katie Hood, CEO of the One Love Foundation, a nonprofit that teaches young people how to identify and avoid abusive relationships.

But if you’re avoiding these types of conversations out of fear for how your partner could react, that might be a warning sign.

“When someone is in an abusive relationship … they basically start managing their life around another person’s anger and volatility,” Hood says.

Look for patterns

Financial abuse, like most forms of abuse, typically isn’t a one-off behavior, but part of a trend that escalates over time, so it’s important to look for the patterns, Hood says.

“I think about it like falling down a rabbit hole,” Hood says. “It starts out great — you’re adored. The next step is isolation … they basically pull you away from your support network and tether you to them. Then, they start the emotional abuse — manipulating you, being controlling, sabotage, calling you names, calling you crazy.”

How to get help

First, assess your risk level. If you fear for your safety call the National Domestic Violence Hotline at 800-799-7233 or TTY 800-787-3224 or contact a local hotline immediately. They can connect you with resources and help you get out of the relationship safely.

If you’re not concerned for your safety, start building an exit plan.

“The first step is to be aware. The second is to start doing some protection,” says Shannon Thomas, author of “Exposing Financial Abuse.” At this stage, it’s important to not tell your abuser you’re going to leave. “I’ve talked to folks that confronted the abuser, and the next day all the money was out of the account.”

Instead, get educated. Find out where your joint accounts are and how to get access to them. Bank staff can be helpful, Thomas says. It’s difficult, but important, to be honest about what you suspect is going on. Remember, it’s something they’ve likely heard before.

If you suspect a loved one is experiencing financial abuse, express your concern without berating their partner. Point out patterns that you see and ask for their assessment.

“They may get defensive. They may push back,” Thomas says. “But if someone gently asks and says ‘I’m seeing this and I’m concerned,’ it opens the door.”

This article was written by NerdWallet and was originally published by The Associated Press.

The article Don’t Ignore the Signs of Financial Abuse originally appeared on NerdWallet.

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Sneaky Ways Burnout Hurts Your Bottom Line

Millennials are a burned-out bunch.

Millennial workers are more likely than older generations to report being burned out at work, according to a 2018 Gallup study. The gig economy, the temptations of social media and the high expectations millennials have of themselves contribute to this trend, behavioral finance experts say.

Add to that record student debt levels, the cost of health care, slow wage growth and little work-life balance, and you have a recipe for emotional exhaustion.

“Millennials have this double whammy of anxiety coupled with a really strong work ethic,” says Kit Yarrow, a consumer psychologist and professor emerita at Golden Gate University. “Before they even get started, millennials approach their tasks in life with a [base] level of anxiety, which depletes their resources for managing stress.”

This is not to say “adulting” is especially difficult for this generation or to assume that all millennials are struggling. But understanding how burnout harms financial decision-making can help you or a loved one break through it and achieve goals.

Burnout tricks the mind

Burnout isn’t the same as stress.

The World Health Organization, which added burnout to its handbook of recognized health conditions this year, says symptoms include “feelings of energy depletion or exhaustion; increased mental distance from one’s job, or feelings of negativism or cynicism related to one’s job; and reduced professional efficacy.”

Burnout is linked to your job, but it can also affect your financial decisions outside of work in the following ways:

You pay more for convenience. You could be spending money regularly on takeout, Uber rides or grocery delivery, for example.

People are often willing to pay more for convenience because they’re exhausted — from working multiple jobs, long hours or being available for work all the time — and because it makes mundane tasks easier, says Theresa Stevens, 26, a financial coach who works with millennials at Declutter Your Money in Providence, Rhode Island.

You splurge as a reward. “Treat yourself” isn’t just a hashtag; it can be a coping mechanism. When it comes to rewarding ourselves, “our mind tricks us into taking us off the hook,” Yarrow says.

“You might think: I already have student loans and credit card debt and my rent is half my income so I might as well go out and eat, because what difference will it really make?” Stevens says.

Social networks and the ease of online shopping make it harder to resist temptation, says Mariel Beasley, co-founder of the Common Cents Lab, a behavioral science research lab at Duke University that focuses on improving financial well-being for low- and middle-income households.

“We see the food people are getting at fancy restaurants, the cute new shoes they bought or the places they’re traveling to,” Beasley says. “We’re seeing their spending; rarely do we see what they’re saving.”

How to break through burnout

You can’t fix the economy or wish away debt. But by recognizing burnout, you can make things easier on yourself. Here’s how:

Know your “why.” Your values motivate you when you’re paying off debt or saving for a dream vacation. They can also help you prioritize what you’re willing to spend money on and cut back on.

Values aren’t the same as goals. Paying off a credit card is a goal, but achieving financial freedom is a value, Stevens says.

Budget strategically. Budgeting isn’t about cutting out the small things that give you joy, like the occasional Uber or your latte habit.

Taking a big step to save money — think moving into a cheaper living situation, refinancing your student loans or canceling subscriptions — is more sustainable in the long run than, say, resolving to eat out less, Beasley says.

“Every day when you’re making a decision to spend less, it’s hard to keep going,” she says. “We naturally bounce back to our old habits.”

After you’ve identified your values, a budget is a tool to help you live them. The 50/30/20 budget, which divides spending into needs, wants and savings, is a good place to start.

Channel money motivation. When you’re feeling motivated, take a one-time action that will save you effort, Beasley says.

Set up a small transfer — perhaps 5% of your income —  to a savings account so the money is out of sight, out of mind. Or cut up a credit card (but don’t close the account) to make it a little harder — but not impossible — to buy things you don’t value.

This article was written by NerdWallet and was originally published by The Associated Press. 

The article Sneaky Ways Burnout Hurts Your Bottom Line originally appeared on NerdWallet.—

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Hunger on Campus: How College Students Can Get Help

When college students paying their own way have a financial hiccup, they have to make hard choices about how to spend their limited funds — and some turn to their food budget to close a gap.

Gina Higgins, a mechanical engineering student at North Carolina State University in Raleigh, has paid for school with a mix of scholarships, loans and part-time jobs. She planned every penny of her budget, cutting corners by shopping at discount grocery stores and commuting to campus.

Then, her car broke down and her family couldn’t help. Higgins needed her car to get to classes, but couldn’t afford to pay for repairs on top of rent, utilities and food. She knew that she could only cut back on her food budget, so she turned to her school for help.

“It’s a stereotype for a reason that college students survive on ramen and free snacks from club meetings — we don’t tend to eat well because we can’t afford to eat well,” Higgins says.

Almost half of 86,000 students at two- and four-year institutions nationwide surveyed in fall 2018 by Temple University’s Hope Center for College, Community and Justice said they were food insecure — without reliable access to healthy food — at some point in the previous year. More than a third of those students said they cut the size of meals or skipped meals because they didn’t have enough money for food.

Getting help for food insecurity

Nearly 40% of college students are considered low-income, the biggest risk factor for food insecurity in college, according to a 2019 report by the Government Accountability Office.

Food insecurity isn’t only about lack of food; it’s also about quality, says Alicia Powers, community health coordinator at Auburn University and managing director of the school’s Hunger Solutions Institute.

“If you’re choosing it because it is the only thing you can afford, then we need to address that,” Powers says about instant ramen meals.

Resources at Higgins’ university got her through the crisis. She had help signing up for the Supplemental Nutrition Assistance Program government benefits. She also received an emergency grant to cover the cost of car repairs and some meals at the dining hall.

Here are food resources that may be available for students in need.

Unused meal share programs

College meal share programs allow students to donate their unused meal credits, or swipes, to other students, who claim them for campus dining.

Meal share programs are often student-led efforts, aided in part by nonprofit organizations like Swipe Out Hunger and Share Meals.

In the 2018-19 school year, over 70% of students at the 80 colleges that Swipe Out Hunger serves reported less stress and anxiety about where they would get their next meal after receiving meal swipes. More than half who received swipes also reported higher class performance.

Campus food pantries

On-campus food pantries provide nonperishable items and some may offer fresh options like fruit, vegetables and dairy products as well as frozen food.

“Just because you’re low-income or struggling doesn’t mean you should only be able to eat food in packaged form or cans,” says Marissa Meyers, a senior department research associate for the Hope Center for College, Community and Justice.

The campus food pantry at Evergreen State College in Olympia, Washington, partners with the Thurston County Food Bank to receive weekly deliveries of fresh produce and refrigerated items.

Use the College and University Food Bank Alliance’s search tool to find campus food pantries.

SNAP benefit enrollment

Students with part-time jobs may be eligible for SNAP benefits, which they can use to buy food at grocery stores, convenience stores and some farmers markets. But it can be difficult for students to qualify, since most will have to work about 20 hours a week to use the program.

Some colleges, like Portland State University in Oregon, bring farmers markets that accept SNAP benefits to campus.

Financial aid appeal

Students who don’t receive enough financial aid or who have a serious change to their financial situation midyear can appeal their aid offer. Students should be ready to provide their financial aid office with the amount they’ll need, details of their circumstances and relevant documentation.

Emergency grants

A one-time emergency aid grant from a college can also help students bear the burden of their expenses — and that doesn’t just mean food. Insecurity with food often goes hand in hand with housing insecurity, says Mary Haskett, a psychology professor who led a food and housing security study at North Carolina State.

Students should visit their school’s financial aid or student affairs office.

This article was written by NerdWallet and was originally published by The Associated Press.

The article Hunger on Campus: How College Students Can Get Help originally appeared on NerdWallet. —

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Be First in Line for College Aid by Filing the FAFSA Now

The fall semester has only just started, but if you rely on financial aid to pay for college, you should get started on next year right now.

Why the time crunch? Submitting the Free Application for Federal Student Aid as close to opening day as possible will increase your chances of getting first-come, first-served federal aid. That includes Pell Grants and work-study, as well as grants and scholarships from your school and state.

That opening day is Oct. 1.

While 97% of families with college-bound students said they planned to submit the FAFSA, only one quarter knew the form becomes available in October, according to a 2019 survey by Discover, which provides private student loans.

You should submit the FAFSA, even if you think your parents make too much money for you to qualify for need-based aid. Submitting the application is also the key to accessing certain scholarships along with federal student loans.

If you’re not sure how to complete the form or need a refresher, here’s what you need to know so you can submit ASAP.

Know where to go

You can complete the FAFSA electronically on the fafsa.gov website or with the MyStudentAid app. But first you’ll need to create a Federal Student Aid ID — a username and password — that you can use to log in and sign both the FAFSA and, later, promissory notes. You can make one on the FAFSA website. If you’re submitting with a parent, they’ll need their own FSA ID, too.

If you don’t want to submit online, you can download a PDF through the FAFSA website or request a paper copy.

Get your documents ready

Completing the FAFSA will go quicker if you already have the documents you need, such as a Social Security card, driver’s license (if you have one), current bank statements and tax information. Use this checklist to prepare.

You don’t need to wait to file taxes before you submit: Parents and students can use “prior-prior year” tax information. That means you should use 2018 tax information for the 2020-21 form. Use the IRS data retrieval tool available with the online FAFSA to import your information from the IRS automatically. You cannot update the application with 2019 tax information after filing, but contact your school if your 2018 tax information no longer reflects your family’s financial situation.

Include colleges you want to apply to

Don’t wait to apply to college before submitting the FAFSA. All you need are the FAFSA codes for up to 10 schools where you plan to apply, which will be available on the online application or on the federal student aid website. If you want to add or change schools after you submit, you can update your application at fafsa.gov.

Remember the deadlines

You only have to apply once, but keep in mind three deadlines: federal, state and school. The deadline to apply for federal aid for the 2020-21 school year is June 30, 2021. Your school and state may have much earlier deadlines. Find out your state’s FAFSA deadline on the student aid website.

What happens after you apply

You’ll receive a Student Aid Report three to five days after submitting electronically with an FSA ID or up to 10 days using paper forms. The report will detail information about your financial aid eligibility. It includes your Expected Family Contribution, which is the estimated amount of money your family can contribute toward your college education.

In the spring, you’ll get your financial aid offer for the upcoming school year. If you’re an incoming freshman, you’ll get offers from the schools that accept you. Accept all free aid before choosing loans. If you’re not sure how much debt you can handle, use an affordability calculator to find out.

The article Be First in Line for College Aid by Filing the FAFSA Now originally appeared on NerdWallet.

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No Holiday Savings Yet? Here’s How to Build Your Funds Fast

Timing is everything when it comes to saving for the holidays. The longer you have to build up cash reserves, plan your budget and buy gifts at the right price, the better you can cover these seasonal costs without going into debt.

Avoiding debt around the holidays can save you from a spending hangover in the new year: Shoppers who used credit cards to fund the holidays in 2018 anticipated it would take them over three months to pay off their debt, according to a NerdWallet survey of over 2,000 adults conducted by The Harris Poll.

Starting a couple of months before peak holiday season might be cutting it a little close for grand savings schemes this year, but you do have options. Here’s how you can plan your spending this year — and start saving for next year’s holidays.

Set your plan for this year

Say you’re planning to kick off shopping in earnest around Black Friday, which falls on Nov. 29 this year. You still have two months for saving and planning. Start with these steps:

Set your holiday budget

If you don’t have much savings, you’ll likely have to use your discretionary income — what’s left over after regular bills — to fund your holidays. Get a solid understanding of how much that is and try to keep expenses, including gifts and food, within that amount.

Being mindful of what you can afford can keep you from overspending, says Los Angeles-based financial coach Dominique’ Reese.

“I say think about your future self,” Reese says. “How would your future financial self — yourself in January, February, March — feel about the expenses that you made over the holidays?”

To build your holiday budget, trim discretionary expenses over the next couple of months. Cut back on dining out or going to the movies, or temporarily cancel a couple of monthly subscription services.

Spend smart

Create a gift list that fits your budget, find good deals, and consider reducing holiday spending on food and gifts across the board to avoid going into debt.

Use your budget to guide your gift list. If your budget is tight, consider whether you can buy for fewer people; maybe you can suggest a get-together instead of a gift exchange with some friends.

Black Friday and Cyber Monday can offer big savings, but you might find better deals at other times. Start checking prices now so you know what’s a good deal — and what to skip.

Being frugal with holiday meal shopping can go far, says Summer Red, professional development manager at the Association for Financial Counseling & Planning Education.

“Food is central to most holiday celebrations, and there are a lot of foods people will buy even though people don’t like it,” Red says. If no one in your family likes the dark meat of a turkey, for example, consider getting specific cuts rather than a whole bird.

“I encourage people to let go of some traditions and focus on what they really enjoy,” she says. “That means you also have less food waste and less money waste.”

Set yourself up for next year

While planning this year’s holidays, start thinking about how you’ll save money next year.

Track your spending to help inform what you’ll need, Reese advises. “If you went over your budget, set aside more for next year,” she says.

Then, find a saving strategy that works for you. Here are a few options:

  • The 52-week savings challenge: One of Red’s preferred methods, with this “challenge,” you start by saving $1 the first week of December, then $2 the next week, $3 the following week, and so on, adding one dollar each week for a year.  At the end, you’ll have nearly $1,400 to spend for the holidays.
  • Holiday savings accounts: Typically offered by credit unions, these savings accounts are generally locked so you can’t access what you’re putting into savings until the holiday season. Putting just $25 a month into one of these gives you $300 saved for the holidays after a year.
  • Set aside part of your income: Reese suggests socking away a percentage of your income and automating transfers to build the habit of saving. Having some of your paycheck deposited directly into a savings account by your employer is an easy way to set money aside without thinking about it, too.

This article was written by NerdWallet and was originally published by The Associated Press.

The article No Holiday Savings Yet? Here’s How to Build Your Funds Fast originally appeared on NerdWallet.

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Legal Complaint Puts Student ‘Debt Relief’ Companies in Crosshairs, and Borrowers Can Help Make the Case

Borrowers who say they were duped into paying for useless help in reducing their student debt now have a way to fight back. A New York public interest law firm has filed a class action complaint against Equitable Acceptance Corp. and dozens of its affiliates.

The New York Legal Assistance Group is taking calls from customers who think they’ve been wronged. Attorneys have set up a hotline for affected borrowers: 212-659-6165.

The complaint, filed in federal court, claims that Equitable, SLF Center, Integra Student Solutions and up to 41 other companies lured borrowers into paying $39 or more a month for student loan adjustment they could get for free through the U.S. Department of Education.

The complaint alleges that Equitable and its partner companies “saddled” as many as 60,000 consumers “with additional, unnecessary debt on deceptive terms and at usurious rates.”

The complaint says Minnesota-based Equitable, which is under investigation by the Federal Trade Commission, “masterminded” the plan.

Equitable says the allegations are without merit. They are based on the “horribly skewed perspectives of the process and the specific accounts in question,” says Daniel D. Hill, Equitable’s general counsel.

Equitable entered the loan adjustment business years after it had been established, he says. “To say that we’re behind this, coordinating and masterminding this, is just nonsense.”

A ‘worthless’ service

The companies target struggling borrowers, promising loan forgiveness they “do not and cannot actually offer,” the complaint says. It says Equitable directs its partners to sell this “worthless” service for $1,300.

Many consumers can’t afford to pay that much in advance, and upfront fees are illegal.

So the debt companies offer a “payment plan,” steering borrowers to Equitable to complete the sale, the lawsuit alleges.

Equitable generates a new loan to cover the charges in the form of a $1,300 line of credit, the suit says.

After fees and interest, the contract can cost borrowers $1,800 or more over several years. Consumers who stop paying can end up with damaged credit.

Hundreds of borrowers have filed complaints against Equitable with the Better Business Bureau and Consumer Financial Protection Bureau, NerdWallet reported in June. Many say they were told they were reducing their student loans, not incurring a new loan at 20% interest.

Denying the allegations

Equitable denies misleading or deceiving consumers. It says it simply purchases the contracts from student debt companies and has no knowledge of the alleged transgressions.

Equitable requires its partner companies to record consumers acknowledging that they understand the services they are agreeing to and Equitable’s role in financing the agreement, Hill says. Equitable will not purchase a consumer contract until it receives that verification.

Equitable’s loans have benefited thousands of borrowers, Hill says, including many who have had their loans forgiven.

Hill says Equitable has canceled the contracts to help several hundred customers who claimed they were scammed. He encourages dissatisfied consumers to contact the company if they are having problems.

Equitable has had partnerships with 43 student debt companies. It has stopped working with all but a few, Hill says.

Many of those companies have gone out of business in response to government scrutiny of the student debt business, he says. NerdWallet published a list last year of more than 130 student debt adjustment companies that have faced legal action by state or federal agencies or have low ratings from the Better Business Bureau.

Perpetuating the problem?

The FTC started investigating Equitable in summer 2017. Investigators have questioned it about an increase in consumer complaints, its relationship with various student debt companies and how much revenue it has received from certain companies.

The new complaint, filed in U.S. District Court in New York by New York Legal Assistance Group and Quinn Emanuel Urquhart & Sullivan, a business litigation firm, is not yet certified to move forward as a class action. The complaint suggests that Equitable plays a leading role in the problems besetting the student “debt relief” industry. Among other things, the complaint says Equitable:

  • “Uses threats of negative credit reporting to induce Borrowers to continue making payments;”
  • Coordinates with partners, which “need EAC’s financing to get otherwise unattainable up-front payments that fund their operations;”
  • “Omits numerous pieces of information that are mandated by law” in its credit contracts.

Equitable’s agreements do not include the actual amount financed under the contract, the dollar amount of the finance charge or the dollar amount of the total payments borrowers must make, the complaint says.

Equitable denies that its contracts are deceptive or that they exclude information required by law.


The article Legal Complaint Puts Student ‘Debt Relief’ Companies in Crosshairs, and Borrowers Can Help Make the Case originally appeared on NerdWallet.

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Hard-Won Tips From Borrowers Who Got Student Loan Forgiveness

Pursuing student loan forgiveness entails a decade of meticulously recorded payments, hours on hold with your servicer and infinite patience. Success, however, arrives without much fanfare.

Public defender Shelly Tomtschik was in court when she got the email notifying her that the quest was over:

“Congratulations! After final review of your Public Service Loan Forgiveness (PSLF) application and payment history, we have determined that you have successfully made the required 120 monthly payments in order to have the loans listed below forgiven.”

“It wasn’t hitting me,” says Tomtschik, 40, of Baldwin, Wisconsin. “I thought it would be more official or something.”

Tomtschik is among the first federal student loan borrowers to get their loans canceled tax-free through the federal Public Service Loan Forgiveness program. The program, launched in 2007, forgives any outstanding balance after 120 qualifying payments for borrowers who take traditionally lower-paying public service jobs.

But the process is tricky. Just 864 of the 88,006 applications filed had been approved as of March 2019, based on the most recently available data from the education department. The average amount forgiven: $59,244.

What it takes to get public student loan forgiveness

To qualify for PSLF, borrowers must make 120 monthly, on-time payments while working full time in public service for a qualifying employer. You also must:

  • Ensure you have only federal direct loans. Some borrowers will need to consolidate into a direct loan. Private loans aren’t eligible.
  • Enroll in an income-driven repayment plan. Your payments will be a portion of your discretionary income.
  • Make sure your loans are serviced by FedLoan Servicing, the only company that processes PSLF applications. You can do this by submitting an employer certification form.
  • Submit employer certification forms to prove you worked for a qualifying government or nonprofit employer while making all 120 payments.
  • Apply while you’re still working for an eligible employer.

Tomtschik and another successful applicant, Bonnie Svitavsky, a librarian in Washington state, might add another requirement: Document everything.

Svitavsky, a 38-year-old supervising librarian at Pierce County Library, made payments for two years before she found they wouldn’t count toward PSLF. That’s because her loans weren’t enrolled in an eligible repayment plan.

“It was disappointing, to say the least,” she says.

To avoid any future surprises, Svitavsky set alarms to submit certification forms and logged the details of calls to FedLoan.

“It felt crazy, but it was useful to go back and see I’ve had these conversations,” she says.

For five years Tomtschik didn’t submit employment certification forms, though she got credit for most of her payments. But once she started, she realized the benefit: ensuring every payment would count.

“Make sure you do the annual certification so if there’s any discrepancy in the number of payments eligible that you address it right away rather than try to go back,” Tomtschik says.

More than half of PSLF applications were rejected because they did not meet the number of qualifying payments, according to the Education Department. Some of the other reasons include missing information (25%), ineligible loans (16%), invalid employment dates (2%) or an ineligible employer (2%).

Read the rules — all of them

Tomtschik and Svitavsky could make a good argument for another requirement: Pay attention to the details.

Before submitting her first employment certification form, Tomtschik made extra payments up to $800 to pay down $70,000 in debt. “I was willing to do whatever just to be done with it,” she says.

But making more payments won’t help you reach 120 qualifying payments faster. Once Tomtschik started working toward PSLF, she stopped sending additional payments.

When Svitavsky learned about a new program – Temporary Expanded Public Service Loan Forgiveness – she realized forgiveness could come sooner than she thought. It’s a $350 million allocation for borrowers who met all of the criteria for PSLF but were making payments under the wrong plan.

This meant the two years of payments that hadn’t counted toward Svitavsky’s forgiveness now could. Last fall she applied, was denied and had to contact FedLoan to say she believed she qualified (this is required practice when applying for the temporary expanded program). In the spring, after months of wrangling, she finally won forgiveness.

The headaches are worth the payoff

By the time Tomtschik’s loans were forgiven last spring, her balance was $86,200 – which was $16,000 more than she originally borrowed.

“I am happy to know it’s gone. My husband still has some student loan debt that we will pay off eventually,” Tomtschik says.

Svitavsky, meanwhile, says she had $80,971 of her original $97,115 in debt forgiven. Between submitting her first certification form in 2013 and getting forgiveness in April 2019, she paid nearly $20,000 in interest and less than $7,000 toward the principal.

“It’s been this weird long blur,” Svitavsky says.


The article Hard-Won Tips From Borrowers Who Got Student Loan Forgiveness originally appeared on NerdWallet.

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4 Ways to Pay for College If Your Financial Aid Isn’t Enough

For 61% of students, college costs more than they expected, according to a recent survey from College Ave Student Loans conducted by Barnes & Noble College Insights.

Yoselin Guzman, an 18-year-old UCLA freshman from Compton, California, can see why.

“There’s like little costs you don’t even see,” says Guzman, noting how expensive dorm items, books and student orientation are.

When those unexpected costs arise — and your existing financial aid won’t cut it — here are four options to get more money for school.

1. Crowdfund the shortfall

When Guzman realized her savings and scholarships wouldn’t cover her college expenses, she started a GoFundMe campaign to crowdfund $5,000.

“I was a little embarrassed to show people I’m struggling financially,” Guzman says.

Getting over those fears helped cover her funding gap. Now, she says the donations have “given me that confidence that I’m not alone in this world.”

She’s certainly not alone on GoFundMe: The website hosts over 100,000 education-related campaigns each year, though not all are for college tuition and success varies.

“We’ve seen an increase in crowdsourcing as an option for covering college costs,” says Brad Lindberg, assistant vice president for enrollment at Grinnell College in Grinnell, Iowa.

But Lindberg cautions students to work with their school’s financial aid office before starting a campaign. The additional funding might affect future aid eligibility, he says.

2. Increase your work schedule

GoFundMe allows students to keep any funds they receive, even if they fall short of their overall goal. But there’s no guarantee you’ll get any money. Working, though, is a surefire way to do that.

If you’re eligible for a work-study job, that’s typically the best option.

“Your supervisor is a built-in mentor; they understand you are a student first [and there’s] flexibility in scheduling,” says Ashley Bianchi, director of financial aid at Williams College in Williamstown, Massachusetts.

If you already have a job, consider working more hours. That may be tricky with work-study positions, since earnings are capped at a specific amount, so look off campus or on a college student-focused job board.

Just be careful not to overextend yourself. Bianchi says her college recommends students work six to seven hours a week; Lindberg puts 10 hours as a reasonable amount. But some students may be able to handle more based on their schedules and activities.

3. Check emergency aid programs

Many schools offer emergency financial assistance. For example, the University of California, Davis, has emergency grants that don’t require repayment. It also offers short-term loans that range from $500 to $1,500.

Always opt for grants first, and know the costs of any loan before borrowing. Leslie Kemp, director of the Aggie Compass Basic Needs Center at UC Davis, also encourages students facing financial shortfalls to think long-term.

“What’s your plan when the $500 runs out?” she says.

One solution is to use free resources that make other expenses, like groceries, more manageable. Kemp says there’s a line out the door when her school’s food pantry opens.

If you can’t find similar services on your campus, Kemp says to look for help at religious organizations, food banks and other nonprofit groups.

4. Borrow student loans

Money you don’t repay — like donations, wages and emergency grants — is the best way to address unexpected college costs.

But student loans may be a necessity for some: Among the 61% of students surprised by the cost of college, 30% underestimated what they needed by $10,000 or more.

“If you’re short by enough that there’s a comma in the number, you might need to borrow,” says Joe DePaulo, CEO and co-founder of College Ave Student Loans.

That assumes you haven’t already reached your borrowing maximum.

The government limits the amount of federal loans you can receive. Most first-year students can take out up to $5,500 in their name, and no one can borrow more than their school’s cost of attendance, the total needed for tuition, fees, room and board and other expenses.

Visit your school’s financial aid office to discuss your options — especially if your financial situation has changed since you started school.

“It’s important to work through why the student is experiencing a shortfall in order to determine the best course of action,” Lindberg says.

That action may be borrowing, or it could be something else like starting a tuition payment plan or earning an outside scholarship. Ultimately, the financial aid office should be your first stop if you run into trouble.

This article was written by NerdWallet and was originally published by The Associated Press.

The article 4 Ways to Pay for College If Your Financial Aid Isn’t Enough originally appeared on NerdWallet.

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Buying Now and Paying Later? Handle With Care

At Lamps.com, you can purchase a modern chrome floor lamp for your home for $178.95. If that sounds steep, keep reading.

Underneath the price, there’s an alternative. Instead of paying $178.95 now, you can choose to pay in four interest-free slices of $44.74 — one upfront and the rest every two weeks.

This doesn’t affect the cost of the lamp, but it spreads out the expense — something that could make sense in certain circumstances, but not if you’re using it to buy something you don’t really need or can’t really afford.

How it works

The concept is known as buy now, pay later. Shoppers who choose this option at checkout receive a product right away, but pay for it in installments.

Afterpay and Klarna are examples of platforms that facilitate these types of transactions. Popular brands that offer these sort of payment arrangements include Anthropologie, Forever 21, and Steve Madden.

It’s essentially like layaway, but you get the product upfront, says Arnie Cabiles, a certified financial planner and owner of Achievable Wealth LLC.

Buy now, pay later can be a useful option if you don’t have a credit card or don’t want to put a large balance on your card, but it is a form of debt, so it’s important to be realistic about your ability to pay it off.

“Someone that maybe doesn’t have control, you [get] the product right away, and then you never know what hiccups could happen,” Cabiles says.

Here’s what to consider when weighing a buy-now, pay-later purchase.

What you’re buying

Rather than using these short-term, typically interest-free arrangements as an excuse to buy things you want, use them to purchase items you need.

Buying now and paying later could be helpful in several situations: if you want a high-demand product now before it sells out; if you’d like to purchase a holiday gift at a good price; or if you need to spread out the cost of an item so it doesn’t hit your wallet all at once.

That’s especially true for major purchases that exceed $500, such as furniture, says certified financial planner Helen Ngo, CEO at Capital Benchmark Partners.

“If you don’t want to use a lot of your cash all at once upfront, it helps keep your checking account balance steady or at the level that you want without depleting it,” Ngo said in an email.

For instance, that may be the case for shoppers who utilize programs such as QVC’s Easy Pay and HSN’s FlexPay to purchase appliances, furniture and more in monthly installments.

How much you’re paying

Buy-now, pay-later payment arrangements are laid out so you’ll know how much you’ll be paying and how frequently. For example, with Afterpay, you’ll pay 25% at checkout, then the remainder of the purchase price in three payments, due every two weeks.

But don’t let the appearance of a low payment cause you to spend more than you bargained for.

“It can be easy to buy a lot of unnecessary things, thinking that you will pay it off,” Ngo says. “You may end up buying many items with smaller monthly payments, but it can add up if you aren’t cognizant of the total you’re racking up.”

You could face late fees if you don’t make your agreed payments on time, Cabiles points out. Some platforms will automatically charge your debit or credit card when a payment is due, and if you’re using a credit card, you could incur interest charges if you carry a balance. Buy now, pay later may require a credit check. Always read the fine print so you know exactly what you’re getting into.

Why you’re doing it

Savvy consumers might opt for a buy-now, pay-later option if they’re certain they’ll be able to pay for an item soon — perhaps due to an expected windfall of extra cash. Cabiles gives the example of someone who has money in a high-yield certificate of deposit.

“My CD is coming due, and I really want to get this product, and it comes due before that first payment, maybe I’ll do that,” Cabiles says.

Hold yourself accountable by thinking of the installment payments as another monthly bill. Plan ahead to ensure you’ll have enough money to make your payments on time, much as you would for your rent or utilities.

Keep in mind that you’ll potentially be paying off your purchase for weeks or months, so you don’t want an emergency expense to clear out the money you originally set aside for the installment payments.

As with any of life’s purchases, live within your means. And if you don’t think you’re disciplined enough to pay in installments, save up for a purchase and pay for it in cash, says Steve Sivak, CFP, founder of Innovate Wealth.


The article Buying Now and Paying Later? Handle With Care originally appeared on NerdWallet.

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