Student loan forgiveness can alleviate your responsibility to repay part or all of your student loan debt. When maximizing this benefit, it’s crucial to understand how loan programs operate and adhere to their guidelines. What Is Student Loan Forgiveness? Student loan forgiveness deals with the partial or complete elimination of student debt, relieving borrowers from that financial burden. Eligibility requirements vary between programs, which include Public Service Loan Forgiveness (PSLF), specialized forgiveness initiatives, and income-driven repayment plans. Types of Student Loan Forgiveness One thing to note is that student loan forgiveness is only available for federal student loans. These are the types of programs you can qualify for: Public Service Loan Forgiveness (PSLF) PSLF program provides student loan forgiveness to graduates committed to working full-time for ten years with a U.S. federal, state, local, tribal, or qualifying non-profit government organization. To qualify, graduates must take a direct loan or a direct consolidation loan and make 120 qualifying payments while employed by an eligible public service employer. For those who borrowed through the FFEL program or the now-defunct Perkins Loan Program, the option to consolidate student loans into a direct consolidation loan is available, making them eligible for PSLF. Additionally, federal agency employees may benefit from their employer repaying up to $10,000 of their student loans annually, with a maximum cap of $60,000. Specialized Loan Forgiveness Programs You may qualify for student loan forgiveness or reduction by working or volunteering for specific organizations. Examples include: Income-Driven Repayment Plans (IDR) Income-driven repayment plans include programs like: These plans entail paying a percentage of your discretionary income for 20 to 25 years before becoming eligible for loan forgiveness of the remaining amount. You must possess eligible federal student loans and undergo annual income recertification to qualify. Do I Qualify? Qualification for student loan forgiveness is contingent upon having direct loans from the federal government, specifically through the William D. Ford Federal Direct Loan Program. To be eligible for the Public Service Loan Forgiveness (PSLF) program, individuals must have taken a direct or direct consolidation loan and completed 120 qualifying payments while employed by an eligible public service employer. Borrowers who have utilized the FFEL program or the now-defunct Perkins Loan Program can consolidate their student loans into a direct consolidation loan, rendering them eligible for PSLF. Even if not employed by a public service employer, individuals may still qualify for partial student loan forgiveness through Federal income-driven plans. Moreover, eligibility for loan forgiveness extends to those working for specific organizations such as the military, Americorps, teaching, nursing, government, and certain non-profit employees. Borrower Defense You may qualify for a loan discharge under the borrower’s defense for loan repayment if your school has provided misleading information or violated specific state laws. Loan Forgiveness vs. Loan Discharge Loan forgiveness is typically granted after a borrower meets specific criteria, often related to employment or fulfilling certain conditions over a specified period. It usually requires working in a particular field, such as public service or teaching, for a designated period. In contrast, loan discharge releases the borrower from the obligation to repay the loan under specific circumstances, which typically include: Summary If you meet the criteria for student loan forgiveness, thorough research, and proper documentation are essential for the application process. If you face challenges in repaying student loans but don’t qualify for forgiveness programs, consider options like refinancing to lower interest rates or consolidating multiple loans into a single payment.

Claiming Your Student Loan Forgiveness

View Resource Claiming Your Student Loan Forgiveness
Although there’s always a chance you will get a raise at your annual performance review or when you receive a promotion, those are not guaranteed, and companies often skip them when budgets are tight. This can leave you feeling like you have fallen through the cracks and are not earning what you deserve. In this situation, the best thing to do is to have a level-headed and professional conversation in which you make your case and ask your boss to give you a raise. Preparing to Ask for a Raise Start by researching how much money people in similar jobs, either at your company or elsewhere, are earning. It’s important to not only look at people with the same job title, but people who have similar responsibilities to yours and who make the type of contributions you are making. Your HR department can help answer questions about pay scales within your company, and glassdoor.com and payscale.com can help you make comparisons. In preparation, list some of your recent accomplishments that highlight how valuable you are to your company. If you have implemented changes that have saved the company time or money, these make you an ideal candidate for a raise. Successful completion of a project or taking on new responsibilities can also make you a strong candidate for getting a raise. You can also look to customer feedback and praise you have received from within the community to help build the case that you deserve more money than you are getting. Discussing a Raise With Your Boss Make an appointment with your boss so you have time for a proper conversation. In general, time this meeting after you have successfully completed some visible tasks, and not too close to your annual review, when your boss is likely to be busy with other requests. Come to that appointment prepared to make your case and really sell yourself. Be calm and confident during your conversation, and don’t raise your voice or show signs of anger or frustration if it is not going as you hoped it would. As you talk, build your case for why you deserve a raise, based on the contributions you have made to your team and to the company as a whole. It can also help to look to the future and tell your boss what value you will be adding in the coming months that will justify the raise. When you come to the end of the conversation, make a specific request for a percent or dollar amount raise. Your concluding statement should reinforce your past performance and future potential, along with an assertion that a raise of the amount you are asking for is fair and justified. After you are done, resist the urge to keep talking or circle back around to points you have already discussed. Instead, just wait for your boss to respond. Tips for Best Results
  1. Practice the conversation with a friend and get feedback on how it went. Your friend can provide valuable input on whether you were convincing or if there were parts of your conversation that dragged, and how your request comes across.

  2. Project confidence through your body language. Sit up straight, avoid fidgeting, use direct eye contact, and don’t be afraid to give a genuine smile if it seems appropriate.

  3. If you cannot get a raise, ask for a one-time bonus instead. Often your boss will be better able to give this because it does not come with a long-term commitment from the company.

Asking for a Raise

View Resource Asking for a Raise
When you are preparing to get a mortgage, one of the steps you can take is to lock in your interest rate. This is when you sign a formal agreement with your lender that solidifies what interest rate they will use for your mortgage, and how many days you have to get your mortgage closed at that rate. Once locked, you will be able to obtain your mortgage at that rate, even if market interest rates change before your loan closing date. Locking in your rate is often a wise choice, but you have to make the tricky decision of exactly when to lock that rate. A rate lock is typically good for at least 30 days, but it can last for 45 days, 60 days, or longer. However, longer rate locks are sometimes for slightly higher interest rates or come with an upfront cost. Most borrowers wait until they have signed a contract on a home to lock their rate, because you never know how long it will take to find the right home and get an accepted offer. Advantages of Locking Your Rate Early Disadvantages of Locking Your Rate Early How to Decide When to Lock in Your Mortgage Rate Consider how much financial risk you are willing to take on. As soon as you lock your rate, you are eliminating most of your financial risk and transferring it to the lender, who has to honor the rate lock commitment even if market rates increase. If you are financially tight and would have a hard time qualifying for or paying your mortgage if the interest rate increases, then it’s a good idea to lock in on the early side. Pay attention to market dynamics. If interest rates have been very stable, it may not be as important to lock your rate early. If rates are decreasing and are likely to continue decreasing, you will probably want to wait to lock the rate. If, on the other hand, rates are rising, it may be worth it to pay extra for a long rate lock period now.

Know When to Lock-In a Mortgage Rate

View Resource Know When to Lock-In a Mortgage Rate
It is more common than ever for adult children to live with their parents, with the 2021 U.S. Census Bureau estimating that one in three adults who are 20 to 34 years old live at home. Plus, even more than that receive at least some financial support from their parents on a regular basis. However, having a child at home can put a huge strain on your finances, and sometimes even force you to delay retirement. If you are ready to get your child out on his or her own, go through a few steps to help your child get ready to be truly financially independent. One of the first issues is that many adult children don’t even realize what sorts of things they will need to be spending money on when they are heading up their own households. These are things that you cover and they just take for granted without realizing. If you are comfortable with it, share your household expense sheet with your son or daughter to help open their eyes to where money goes. Some expenses to make sure you discuss include: Your child will not be able to move out for good until he or she has a balanced budget where the monthly expenses are less than the monthly after-tax income. Otherwise, you will probably be getting quite a few phone calls or texts requesting money to make ends meet, or a panicked moment a year down the road when the credit card is finally maxed out. You can help prepare your child by creating a detailed and balanced budget. This step will involve some research into what actual costs are in the area where your child plans to live and at the standard of living your child envisions maintaining. The tricky part is that often, the standard of living your child wants cannot be supported by his or her income. You will need to help guide your child to make the tough decisions about where to cut costs to create a balanced budget. Look to have them live with a roommate to minimize rent and utility costs; choose a used car instead of a new one; or dine at home more to minimize the cost of food and beverages from restaurants and bars. Even if your child has a budget ready, there’s still the hurdle of actually going through with the move. Parents have found that each of the following strategies can help the transition happen more smoothly.

Getting Your Child’s Finances ‘Move-Out’ Ready

View Resource Getting Your Child’s Finances ‘Move-Out’ Ready
When you have a parent, sibling, or another family member who is planning to move, you may be able to be first in line to buy their home. Plus, they may even offer you a price below market value to help you out, especially because they will not be paying a hefty commission to a real estate agent. It sounds like a great idea on the surface, but remember that buying a home is a huge financial transaction. It will be important that you follow some specific guidelines to ensure that the purchase goes through smoothly and you are both protected legally from future repercussions. How to structure the purchase Your first step is to agree on a purchase price for the home. Keep in mind that if you pay less than fair market value for the home, you could be stuck with big capital gains taxes if you sell it again too soon. In addition, your family member may trigger a tax audit if the discount is too steep. One way to structure the purchase is to get a third-party appraisal to determine the fair market value, then agree on a purchase price close to that amount. Your family member can then offer to pay all of the closing costs to help give you a discount, if they want to. Before proceeding, get a home inspection so you have a complete understanding of the condition of the home. Even if you have spent much time there, the house may have structural or system issues of which you are unaware. Your family member who is selling it may not be aware of them either. An independent home inspector can provide a thorough assessment of the home’s condition and bring to your attention any existing issues. If needed, you and your family member can renegotiate your deal based on the findings of the inspection. Obtaining financing to purchase a home from a family member Your family member might offer to finance the purchase for you, meaning that you would make payments to them rather than to a bank. While this might sound like a good idea, it can complicate your relationship if you fall behind on payments. Doing so would leave your family member in the tough spot of having to decide whether to pursue foreclosure or to let it slide. The best option is for you to obtain financing through a traditional lender. With interest rates as low as they have been lately, it is a small sacrifice to help preserve family relationships. Get pre-qualified for the mortgage before your family member hires any legal help for the transaction, just to ensure that your credit score and income are sufficient. When you apply for your mortgage, you should also disclose that this is a sale between family members. Proper documentation for a real estate transaction between family members Buying a home is a legal transaction, and you must ensure that the documentation is properly completed. If not, you could run into problems with ownership claims down the road. Manage documentation with the help of two professionals:

Buying a Home from a Family Member

View Resource Buying a Home from a Family Member
If you are tired of being in debt, a “credit-free” life might sound appealing. All you have to do is pay off all of your debts, cut up your credit cards, close any other accounts, and get yourself completely off the credit grid. Then you can live within your means in a completely cash-based system. Being credit-free has plenty of perks, but it also has complications you need to understand if you are thinking about making the transition. Advantages of Being Credit-Free One of the biggest perks of not having any credit-related accounts is that you do not have to pay interest or make debt payments, which frees up your money, giving you greater discretionary spending ability. For example, the typical household credit card debt of $7,000 at a 15% interest rate costs over $1,000 per year in interest. If you are not carrying that debt, the $1,000 will be available for you to spend or save as you like. People who tend to overspend on credit cards will reap financial rewards from being credit-free because it becomes impossible to overspend. When you do not have credit, the decision of whether or not to buy something is not tied only to emotion, but also to how much money you have available in your wallet or your bank account. In addition to the financial advantages, you also have emotional perks. Being in debt is stressful because you spend your time and energy worrying about making payments or working extra hard to get out of debt. Many people feel a sense of freedom when they live credit-free. Disadvantages of Living Without Credit The main disadvantage of living without credit is that you will not have a credit score. Because your credit score is derived from data in your credit report, you will not have a score at all if your report is empty. This may make it difficult if you ever decide to get credit again, to buy a car or house for example. Also, insurance companies and employers sometimes check credit scores as well, and you may run into difficulties with them if you do not have a score. The other disadvantage of living without access to credit is that you do not have the ability borrow on credit to use as a financial safety net. You need to build up significant savings to be your new safety net, and sometimes it is hard to know exactly how much money you will need to have saved. Tips for Making a Credit-Free Life Work for You
  1. Get out of debt as quickly as possible once you have made the decision to live credit-free. Stop buying anything on credit, and start making more than the minimum payments, focusing on paying off one account at a time. Close accounts once they are paid off.

  2. Build up an emergency fund of three to six months of basic living expenses. If you lose your job, you will not have credit cards to fall back on to make ends meet. Your emergency fund can also cover unexpected expenses, like car repairs. If you ever have to use money from the fund, replenish it as soon as you can.

  3. Use long-term budgeting strategies for major expenses. Think forward to your anticipated expenses in the coming year, like vacations, home repairs, or holiday gifts, and set money aside for these expenses every month. Use the same strategy to save up to buy your next car, or even a house.

  4. Consider keeping one credit card account open, but completely unused, if you feel it necessary to maintain a credit score. This open account will continue to appear on your credit report and generate a credit score for you. However, be aware that you may need make an occasional small purchase (and pay it off immediately) to keep the credit card issuer from closing the account due to inactivity.

Living a ‘Credit-Free’ Life

View Resource Living a ‘Credit-Free’ Life
When you own a home and need additional cash flow, a reverse mortgage is one way to get it. A reverse mortgage allows you to tap into your home equity, which is the money your home is worth, without having to sell your home. It is called a reverse mortgage because rather than you sending a check to the bank each month, the bank sends a check to you every month. Alternately, some reverse mortgages are set up so the bank gives you a lump sum when you first get the mortgage, or you have a line of credit that you can draw from as you need money. You can use the money for any purpose, including supplementing retirement income, making home improvements, or paying for health care expenses. Before you consider getting a reverse mortgage, it is important to understand exactly how it works. The basic idea is that a bank lends you part of your home equity for as long as you are living in the home. The money lent to you accrues interest each month, but you do not need to make any payments back to the bank until you sell your home, stop using it as your primary residence, or die. At that point, the reverse mortgage is due in full. Most borrowers end up using the proceeds from selling the home to pay back the reverse mortgage. Eligibility requirements to get a reverse mortgage Advantages of reverse mortgages When you are living on a fixed income during retirement, a reverse mortgage has a few facets that make it very appealing. If these advantages fit with your desires, you may be a good candidate for a reverse mortgage. Disadvantages of reverse mortgages Before you jump into getting a reverse mortgage, you need understand the disadvantages of this financial decision. It can have serious repercussions, not only for you but also for your family and heirs.

Is a Reverse Mortgage Right for You?

View Resource Is a Reverse Mortgage Right for You?
When you are borrowing money, one of the main numbers to consider is the annual percentage rate, typically abbreviated as APR. The APR is the percent of the borrowed amount that you are expected to pay each year in interest and fees, spread over the life of the loan. The APR is slightly different from the interest rate because the APR also includes required introductory fees in the calculation. For example, on a mortgage, you have loan origination fees and closing fees that you must pay to get the loan. The APR helps you understand how these fees affect your total costs, assuming you keep the loan for the full repayment term. If there are no introductory fees, the APR is the same as the annual interest rate on the loan. Types of APR APRs come in two main types: fixed and variable. A fixed APR does not change on a regular basis, but a variable APR will adjust depending on market factors. Some loans, especially credit cards, can have several different types of APRs. These include:

Calculating Annual Percentage Rates

View Resource Calculating Annual Percentage Rates
Consumer reporting agencies, sometimes abbreviated CRAs and also known as credit bureaus, collect credit information about individuals and sell this information to third parties upon request. In the United States, the three main consumer reporting agencies are Equifax, TransUnion, and Experian. Each of these companies maintains an ongoing file for you called a credit report. Your credit report contains: How to get your credit report When you apply for a loan, the lender will usually purchase a copy of your credit report from at least one of the credit bureaus to get more information about how well you have managed credit in the past. This information helps the lender decide whether to issue you a new loan and what interest rate to charge. Insurance companies, employers, and landlords also often use your credit report to make decisions. Therefore, it is important for you to know how to get your credit report. United States law allows you to get a free copy of your credit report from each of the three major credit bureaus (Equifax, TransUnion, and Experian) every year. To get this free credit report, go to AnnualCreditReport.com or call or call (877) 322-8228. While other websites and services may advertise free reports, you often have to sign up for a service to get these reports. Protect yourself from scams by only using AnnualCreditReport.com to get your credit report.

Consumer Reporting Agencies

View Resource Consumer Reporting Agencies
On any loan, your monthly payment is divided between two purposes. First, part of the payment is used to cover the interest that has accrued on your balance since you made your last payment. Second, any remaining portion of your payment goes toward reducing your loan balance. Because of this, once you have paid the interest for a month, any extra money you add to your monthly payment will go directly toward reducing your loan balance. This can save you a lot of money in the long run. Most of your savings comes from the fact that your interest payment for every future month on your payment plan will be less than it would have been if you hadn’t made the extra payment. Especially if you still have 20 years or more left on your mortgage, that’s lots of months when you can save money on interest. And the less interest you pay, the more of your regular monthly payment will go toward paying down principal. The effects really do snowball, often to significant end results. Example of Saving Money by Adding to Monthly Payments A concrete example can help illustrate how the savings adds up. Let’s say that you just took out a mortgage for $240,000 at 4% annual interest, with a repayment term of 30 years (or 360 monthly payments). Based on these numbers, your lender would calculate a monthly principal and interest payment of $1,145.80. When you send your first payment of $1,145.80, your lender first covers the accrued interest. An annual interest rate of 4% is a monthly interest rate of 0.33%. Your loan balance is $240,000, so you would owe $240,000 x .00333333, or $800, in interest. Once that has been paid, the remaining $345.80 reduces your loan balance, so you now only owe the bank $239,654.20. The next month, you will only owe $798.85 in interest because your balance is lower, so you pay $346.95 toward principal and have a new loan balance of $239,307.25. After 360 payments, you will have paid a total of $172,486.82 in interest. Now, say that you decided to make an extra mortgage payment of $200 every month. Your first month, you will pay the $800 in interest but pay off $545.80 of your loan balance, leaving you owing $239,454.20. The following month, your interest payment will be down to $798.18 (67 cents less than if you hadn’t made the extra payment), and you will pay $547.62 of your loan balance, reducing it to $238,906.59. If you continue this, you will pay off the mortgage 88 months early. The best part is that you will have only paid $124,979.70 in interest, for savings of $47,507.12. That’s a big result from a relatively small monthly difference.

Add to Your Monthly Payment and Save Money

View Resource Add to Your Monthly Payment and Save Money