All Articles Tagged "student loans"
After all the talk about student loans and the massive amount of debt it saddles Americans with, we should turn an envious eye to Sweden, which offers a free college education. However, the average student has about US$19,000 in debt, far lower than the US (over $24,000) but still a lot. And 85 percent of students graduate with debt in Sweden whereas only 50 percent of Americans do. How can this be?
Sweden in particular — and Scandinavia in general — is an expensive part of the world. Quartz links to a story that shows how expensive Stockholm is, adding, “In Sweden, young people are expected to pay for things themselves instead of sponging off their parents.” Moreover, they tend to live on their own at a younger age than other Europeans. Adult children live at home until about the age of 30 in some countries.
“[W]hereas in the US parents are expected to help pay for the their children’s college education, in Sweden parental income levels are just not part of the equation. Students are viewed as adults, responsible for their own finances,” the article says.
Even with a student debt load, they manage to have a comparatively comfortable lifestyle. It should be noted that Swedes also have the support of a government that keeps interest rates low. President Obama is fighting to keep student loan rates from doubling in just a few weeks. Going forward, it’s important that we question political candidates about their views on help for students and managing student loans.
So the lesson here is to closely monitor, not just the cost of college tuition, but the cost of living as a student. It’s important to keep the prices for housing, entertainment, cable (why does anyone have more than one cable box… or one TV for that matter?), and other expenses low when income is low. When making the college decision, be sure to weigh all of the considerations and options. Should you or your child go to a community college first for a couple of years in order to live at home and save tuition money? Should the geographic location of the college be a consideration? Perhaps going to school in a small town is the better option versus choosing a school in a pricier city. Can you room with friends? Should you restrict yourself to only a night or two per week for dinners out and socializing, even if it looks like everyone else is having much more fun? And how big of a student loan do you really need?
Moreover, monitor your spending when you graduate. Loans need to be paid back and savings accounts built up. Just because work and income are the full-time priority, it doesn’t mean you’re flush with cash.
Finally, we have to be sure we’re thinking about debt in the right terms. While debt might be unavoidable, we must have a game plan for managing it and paying it off. In other words, look at your career path, your expenses, and where you hope to be in the longer term to determine the level of debt you can handle. You don’t want to have to put your life plans on hold later because you have to pay off debts you’ve accumulated now.
Many ladies in the hunt for a sugar daddy want one that’s got the money to finance either their plastic surgery desires or their student loan repayments.
A study done by SugarDaddie.com (not a typo) found that the top reason women seek out a sugar daddy is to pay for cosmetic procedures that include Botox and — most requested — breast augmentation. This is also the number one cosmetic procedure overall in the country. According to the press release with the study’s findings, one top-notch SugarDaddie wrote, “I could work 24/7 and would never be able to aford [sic] to pay for my own boob job.” Oh.
The second most popular reason was to pay Sallie Mae, showing that relationships are being impacted by the huge student loan debt in this country in more ways than one.
Rounding out the top five reasons women seek out sugar daddy, in order, are shopping, car payments, and travel.
SugarDaddie.com polled its 100,000 members for this survey.
We’ve asked before for your thoughts on sugar daddies. We’ll ask again. Is this whole set up OK?
There is a pattern for some people within the black community of poor financial education. A pattern I didn’t know existed until I fell prey to the pitfall of misinformation where money was concerned.
It was 2009 and I was in grad school. I had stopped going to class regularly. I only left my dorm room to eat. I stayed in bed all day, every day watching television. I was more than stressed. I was literally becoming more and more depressed with every debt collection phone call I ignored into the voicemail folder of my phone.
I didn’t mean to rack up almost $8,000 in credit card debt in less than two years. Somehow the idea that I needed to begin building credit was implanted in my naïve brain the summer between freshman and sophomore year of college. I had heard that if I did not get a credit card and begin building credit in college, I wouldn’t be able to buy a car or a house later in life because I would have no credit history to draw from.
That freaked me out. So, having done little to no research, I grabbed the MTV University Platinum card. It featured a bunch of perks and rewards and goodies and what-nots. It also featured a $4,000 limit and a 32 percent interest rate, but I had no clue what that would mean so I had no worries. Wasn’t I the frugal young lady who had stretched $20 every week during freshman year? Please, $4,000 was going to be no problem. I would only use the card for emergencies anyway.
Well, EVERYTHING soon became an emergency. Acrylic nails. Pizza. Trips to the city. The movies. I could NOT control myself when it came to that little piece of plastic. In my mind, as long as I paid something on it every month, I was good. I ended up getting another credit card with a lower interest rate to transfer my debt and save myself some money while I figured exactly how to pay off $4,000 when I was only making $500 per month on work study. I ended up canceling both cards and burying my head in the sand, scared to answer calls from debt collectors. Then, one day a collections agency called and basically threatened to take me to court OR garnish my wages if I did not set up an automatic payment with them right then for $325 each month. Scared out of my mind, I did it. Then I called my mother. She freaked. She told me I did not have to do that, especially since I didn’t have anywhere near $325 in my bank account.
I ended up having to freeze the account and pay my bank back the money they fronted for my stupidity, as well as a hefty overdraft fee.
From that moment, I knew I could not wallow in depression and anxiety about my money situation anymore. It was not going to get any better by avoiding my creditors. I had to educate myself and figure out how to confront the problem head-on. My finance professor happened to be discussing the difference between credit card interest and student loan interest one night during class. He expressed that student loan interest rates couldn’t exceed about 7.5 percent (at that time) while credit card interest rates could be as high as 30 percent. He said it was wise to take out a student loan to cover credit card debt (depending on the individual situation). Well, I looked at my debt situation, talked to my creditors to try to get my interest reduced, but to no avail. They weren’t budging. So, I took out a student loan to cover my credit card debt and ended up saving myself thousands in interest fees.**
Since 2009, I swore off credit cards for a long time and only decided to get another one in early 2011, which I didn’t even use until that summer. I paid the card off in full every time I used it.
My situation is not so different from many young people who are thrust into taking care of their own finances with little to no guidance or foreknowledge. The most important lesson I have learned in dealing with the depressing trial of massive credit card debt is this: DO NOT SPEND WHAT YOU DON’T HAVE.
If I know I can’t pay off at least 80-90 percent of what I want to purchase on my credit card, I don’t even try it.
What you’re not told is that every little thing affects your credit score. So, while building credit is important – having a job to pay off your credit card and the willpower not to live above your means is more important. It would be different if I had budgeted and used my credit card wisely for things like school supplies and the occasional treat, but I lost my ever-loving mind and charged everything. It’s so easy to swipe that bit of plastic and forget about paying it off.
- Educate yourself before you choose a credit card. Know the interest rates. Ask about monthly fees and balance fees (they add up). Or if you’re sinking in debt and burying your head in the sand like I was, get up, call your creditors and explain your financial situation. Get on a plan to pay them back little by little. Trust me, they want to help you pay them back their money. These are people with loans and debt just like you. They get it. More often than not, they are willing to negotiate terms.
- Create a budget for yourself. If you get into the habit of spending wisely, you’ll feel so accomplished you’ll continue. I use the 50/30/10/10 rule. Fifty percent goes to bills. Thirty percent goes to my treats, shopping etc. Ten percent is tithed to my church. And the last 10 percent is saved. Having a plan will always yield favorable results if you commit to it. Sites like Mint.com are super useful in setting up streamlined budgeting systems.
- Understand how credit cards work. Even if you pay your card off every month, maxing it out is no good. A consistently maxed out card signals an out-of-control spender to the credit bureaus and it decreases your credit score. Using 20 to 30 percent of your card and paying it off each month shows restraint and responsible stewardship.
- Find deals! You can still afford to have fun and purchase nice things even while on a restrained budget, you just have to search out great deals. And with sites like LivingSocial and Groupon it isn’t hard to find great deals anymore. There is no reason why anyone should be spending full price for anything, ever. Clip coupons! Be a loyal customer – the perks are AWESOME.
- Don’t focus on your past mistakes with money or all the things you wish you could do. Focus on the lessons learned and the courage you mustered to take back control of your finances. With time and a committed plan, you’ll be out of debt and more financially empowered than you dreamed.
Many churches and community centers offer free financial courses to help the community find financial freedom. Be active about taking control of your finances. Seek out the help and the tools. They are abundant and so severely under-utilized.
**Taking out a student loan to cover credit card debt is what worked for ME. I am not advocating this course of action for everyone. Find what works best for you.
La Truly seeks to encourage thought, discussion and change among young women through her writing. Follow her on Twitter: @AshleyLaTruly and AboutMe about.me/Ashley.hobbs.
Not much has changed since Prudential Financial last conducted its “African American Financial Experience” survey in 2011. According to the latest results of the biennial study, released Tuesday, African Americans still face competing priorities when it comes to building a legacy of wealth. At the top of the list: paying off debt, saving for retirement and having enough life insurance to protect loved ones.
This year’s results are based on a March 2013 poll of 1,153 Americans who identify as African American or Black and 471 general population Americans, Prudential notes.
But while the findings compound a recent report on the role the Great Recession has played in perpetuating the wealth gap between racial groups, African Americans remain confident about their financial future, the report says, with half of African Americans saying they are doing better now financially than they were 12 months ago, a sentiment shared by only one-third of the general population.
Read more at BlackVoices.com
Tags:african american finances, African American Financial Experience, African American Financial Experience Survey, African-American Financial Crisis, African-American Financial Literacy, Black Unemployment Crisis, Black Voices Life, Black Voices News, black wealth, money, polls, Prudential Financial, Prudential Survey, student loans, unemployment
Good People Still Exist: Anonymous Businessman Shells Out Over $35,000 To Pay Off Mother of Five’s Student Loans
Last Christmas Eve, USA Today ran an article discussing the financial hardships that plagued countless Americans during the holiday season. Featured in the article was Starlie Becote, a single mother of five children living in Rhode Island. Becote revealed to the publication that she had been having a really hard time and was struggling to make ends meet. She also regretfully confessed that she didn’t have a dollar to spare to even attempt to buy her children Christmas presents.
A foreign businessman, who has asked to remain nameless in an effort to protect his privacy, was touched by Becote’s story and decided that he wanted to help. The following January, he wired the mom-of-five $5,000 to assist with her expenses and paid off her student loans, which added up to more than $35,000, reports USA Today.
Becote had been unable to pay her $400 a month loan payments and was incurring $6 per day in interest. The “good Samaritan” encountered a few hiccups while trying to carry out his noble deed, as the U.S. Department of Eduction gave him grief about paying off the loan with foreign currency. It seems that the department’s policy prohibits the use of foreign monies to protect borrowers from paying unexpected exchange fees. Nevertheless, the man didn’t allow the roadblock to deter him. He eventually decided to wire the money to a family member in the United States, who then paid off Becote’s loans.
Becote is currently a case manager for a community mental health center and aspires to become a licensed social worker. In order to do so, she is required to finish graduate school. Thankfully, the good Samaritan paid off her loans before she defaulted on them, as this would’ve sabotaged her chances of borrowing money for grad school.
Not long after, Becote’s 2-year-old son D’Zhaun became ill and was admitted to the hospital. Doctors informed her that the toddler had come down with a serious respiratory virus. He then contract pneumonia and the MRSA infection. As a result of her child’s health troubles, Becote missed work for two weeks. She later revealed that after missing so many days of work, she never would’ve been able to pay her rent for that month if it were not for the $5,000 that the kind stranger had wired her.
“You don’t hear about people that do huge things like for people. I can’t believe anything like that ever happened to me in my life,” Becote says.
What a rare, but beautiful story!
As we recently reported, hundreds of students at Historically Black Colleges and Universities (HBCUs) are finding themselves with less financial aid due to changes made on federal student loan applications.
Now the HBCUs are fighting back. According to the Washington Times (via Black Blue Dog), HBCUs may end up having to sue President Obama’s administration for allowing changes in student loan standards. These changes have disproportionately affected minority populations. On the HBCU side, they say they were not given advanced notice of changes in loan standards resulting from new eligibility requirements coming from the US Department of Education.
“We’re going to continue to pursue the legislative process to find a better solution,” Johnny C. Taylor, president and CEO of the Thurgood Marshall College Fund told the Washington Times. “We are not itching for a fight, [but] we need to do what is necessary to protect what is the most vulnerable and fragile in our society.”
On the White House side, the Obama Administration has said that they made the changes so that the expectations for these loans match industry standards for getting other types of loans. This has not happened, however, for many black students, especially those at HBCUs. “[D]ue to differences in wealth levels, African Americans are often left behind,” writes Black Blue Dog. “Before, less than a quarter of PLUS loan applicants were denied. That number has risen to more than half,” the article continues.
Separately, but related, the average debt for HBCU students is $32,000. So though those loans are needed, many students are walking off campus for the last time with a high degree of debt.
The 2013 tax season is here, and with many close friends, family members and acquaintances offering their personal services and advice, they might overlook a few of the tax deductions you could possibly qualify for.
Filing your taxes may seem simple enough, but make sure you are getting all you deserve from the year and take note of these commonly overlooked tax deductions before filing and completing your taxes for the season.
By T. Hall
Back in 2003, right after high school, college seemed like the logical next step: I was a third generation college student, my grandparents were Civil-Rights era black folks, the type which saw college education as a given, not a choice. It was drilled into my siblings and I that we would to pursue higher education, come hell or high water. As the oldest I was the first to go off to university, with a burning desire to be like the characters in “A Different World” in at my new home by the sea, Hampton University. A private Historically Black University (HBCU) on the southeastern coast of Virginia, I was convinced that what lay before me was a life of striving and success, a la Claire and Cliff Huxtable. The only problem: my family ain’t got stacks like that. My immediate solution: get some student loans.
Then, in 2007, I graduated. I thought to myself, “hey Self, why stop now? You can go to graduate school. Yeah! It’ll make you more attractive to employers, and it’ll give you a little more time before you have to be thrust into the real world. Yeah, that’s what you’ll do. BRILLIANT.” Boom. I get into a grad school, find the money to go. Graduate. Open my first student loan bill. Cue Kanye West’s ‘Broke Phi Broke’ skit. Fall out on the ground and cry to the heavens for Mercy.
With student loan default rates rising, it’s not surprising that some people (i.e., moi) would have buyer’s remorse about signing away life and limb to finance a college education. Nowadays a job isn’t a sure thing, even with that shiny degree, and unemployment is off the hook. The average student debt is above $26,000, and it can be substantially more for those who go on to obtain graduate degrees (law and medicine, I’m looking at you). So it’s pretty safe to say that getting a degree isn’t all it’s cracked up to be. There’s even a fellowship that offers young entrepreneurs money to not go to college, and instead take a stab at creating the next big thing instead of sinking their time and borrowed money into butt-chugging in a dorm room. If I had that fellowship, I’d take the loot and run. Or write a book. Or both.
Even still, I’m thankful for the people I met during my schooling – my friends from undergrad are homies for life, and I met my present boo-thang while trapped in the computer cluster during graduate school. And to be quite honest I don’t think I would have been that great of a computer engineer, even though all that money made from coding software would support my incurable book habit. I’m even more thankful that my baby sister, who saw how much of a burden financing school could be, carved a way to do school on her own terms. She works and pays her way through school, and even though it’s taking a little longer than she would like, she is lightyears ahead of where I was when I was her age. I’m proud of her tenacity and grit. And I’m especially proud of her ability to stick to her guns and get both a degree and make financially sound decisions. Maybe when she’s broke off she can help her sister with the broke bank account.
So what do you think? Do you ever regret going to school? Am I the only person in this mickey-fickey who wishes they could have figured out a way to make it through college without turning to Sallie Mae or the pole?
T. Hall is a intellignorant writer based in northern Virginia. She tries not to take herself too seriously, and blogs about original fiction, books and life at DopeReads.com.
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By T. Hall
Juicy J’s ode to ratchet p—y and strip clubs, “Bandz A Make Her Dance”, has become the default theme song for every event, party, and celebration of 2012. I’m pretty sure somewhere in the world a somebody is throwing a going away party for a co-worker, and “Bandz A Maker Her Dance” is on the playlist. It’s inescapable. And while rubber bands wrapped around a wad of money will indeed make some women dance, here are 7 other things that will make you twerk for joy.
When most Americans leave college, they not only leave with a degree but debt. And, according to a new analysis by US News & World Report, if you are a student at HBCU Clark Atlanta University, you will leave with more debt than the average American college student.
The study found that the average debt of a 2011 Clark Atlanta graduate is $47,066, and 94 percent of students borrow money to attend the school. The magazine ranked a total of 270 colleges. On the flip side, another HBCU, Howard University, came in sixth on the list of colleges where students had the least debt. Howard students graduate with an average debt of $15,080.
There are ways to avoid debt while in college. As we reported before, Pell grants offer up to $5,550 to the neediest students. There are also work-study programs, which are need-based.
Income-based repayment, a program started under Obama in 2009, allows borrowers to adjust monthly payments to 15 percent of their income, which will erase the debt in 15 years. According to Bloomberg Businessweek, however, the program hasn’t worked as well as hoped — at least not yet. One reason is many students don’t know about the program or if they qualify. “To get into the program, you have to apply through the bank that services your loan, but many banks don’t tell borrowers about the program. They aren’t required to do so, and… they make more money if monthly payments are higher,” the magazine says. To encourage more participation, the Obama administration will drop the threshold from 15 percent to 10 percent for some borrowers.
Michael Szarek, the founder and president of College Counseling for the Rest of Us, emailed us nine suggestions for reducing your college debt.
1) Actually, don’t stay out of debt completely. In other words, DO borrow. Some. But only borrow from the Federal Direct Loan Program. (This will cap your lending at $31,000 for your undergraduate career).
2) If possible, only borrow a portion of your loan eligibility. You are under no obligation to borrow all of it, and too many families look at the decision to borrow as “all or nothing.”
3) Determine what you can pay out of pocket via a monthly payment plan. Every dollar paid directly is money not borrowed.
4) Know your college’s costs before enrolling. Many students start a college program without knowing or understanding the actual cost. Like all major purchases, know the actual price before buying.
5) If you can’t afford that particular school, don’t go. That can be a hard decision to make, but you can use community college credits to save money, work to earn money, or both.
6) Finish in four years. If you thought college was expensive, try adding an extra year or two.
7) Earn community college credit in the summer and winter. But make sure – beforehand – that the credits will transfer back to your baccalaureate institution.
8) Avoid credit cards. There is a reason why so many campuses ban credit card sales representatives.
9) If you have to borrow, do borrow for an education, not for a iPod or gaming device.