The College Investor Audio Show: Recent Episodes
Robert Farrington | America's Millennial Money Expert
The College Investor podcast is a daily audio show that’s dedicated to bringing you the best of TheCollegeInvestor.com. We discuss a variety of topics, all relating to millennial money. Robert Farrington, the founder of The College Investor and a Millennial Money Expert, shares how to get out of student loan debt so that you can start investing and building wealth for the future. Instead of cutting expenses and living a frugal life, he advocates side hustling and entrepreneurship to earn extra money to achieve your financial goals.
An estimated 51.7 million children (91.7% of everyone eligible to enroll in a K-12 school) meet the income test to receive scholarships under the Education Freedom Tax Credit, the federal program launching January 1, 2027, according to a new report released Tuesday by the American Federation for Children.
The analysis is the first state-by-state estimate of who can actually receive money from the program, built on Census population estimates, American Community Survey microdata, and HUD income limits.
The credit was created as Section 25F of the tax code by the One Big Beautiful Bill Act, the same 2025 law that overhauled federal student loan borrowing.
The Department of Education's Office of Inspector General has put hard numbers on the Trump administration's push to dismantle the agency, and the findings for Federal Student Aid are stark: entire sub-offices responsible for overseeing loan servicers and certifying schools for federal aid were left with no employees at all.
The report lands as the Department reverses course. FSA is now hiring roughly 380 workers back and held a two-day hiring fair in Washington, D.C. on July 21 and 22 to fill more than 100 open roles.
The flash report covers changes to ED's staffing, operations, contracts, and grants between January 20 and March 31, 2025 - the window that opened with two executive orders directing agencies to prepare for large-scale reductions in force.
A bipartisan group of senators is moving to block at least some of the Trump administration's effort to dismantle the Department of Education.
The Senate Health, Education, Labor and Pensions Committee approved S. 5046 on Thursday by a 13-9 vote, sending it to the full Senate. The bill, introduced July 21 by Sen. Tim Kaine (D-Va.) with Sens. Susan Collins (R-Maine) and Lisa Murkowski (R-Alaska), would bar the Education Secretary from offloading four of the department's offices onto other agencies.
This comes a little more than two weeks after House Republicans sought to make the dismantling permanent with a series of 10 bills completely removing nearly all functions of the Department of Education.
A bill moving quietly through the Senate would let colleges steer students toward state-run and nonprofit student loans without triggering the federal conflict-of-interest rules Congress wrote after the 2007 financial aid kickback scandal.
Nearly two decades ago, investigators found that the people students trusted most to give neutral advice (their college financial aid officers) were quietly working for the other side of the table. Financial aid officers held stock in the lenders they recommended. Lenders paid schools a cut of the loan volume they steered. Some financial aid offices let lender employees answer their phones.
Because roughly 90% of families take whatever loan their school recommends, a single line on a "preferred lender" list was worth millions to a lender. It also cost borrowers real money, since the school's recommended option is not always the cheapest one.
The cleanup produced settlements, resignations, congressional hearings, and eventually a permanent set of federal rules. This proposed law would change the rules back for a small slice of the private student loan market.
Sen. Peter Welch (D-Vt.) and Rep. Joe Courtney (D-Conn.) held a press conference on Capitol Hill last week urging Congress to take up the Student Loan Interest Elimination Act (PDF File), which would set the rate on every existing and future federal student loan to 0%.
The press conference marks the lawmakers' second attempt in 2026 to move the bill. Welch introduced S. 4169 in the Senate and Courtney introduced H.R. 8045 in the House back on March 24, 2026, and neither version has advanced out of committee in the four months since. We covered that introduction when it happened.
The renewed push arrives as federal default numbers reach levels the system has never recorded before.
Howard University unenrolled 502 incoming freshmen on July 22, weeks before move-in. It has since readmitted more than 200 of them — a roughly 40% reversal of its own decisions. That number alone tells you the university got this wrong. These are families who had already committed to a school where the cost of attendance runs past $66,000 a year.
The handling of this entire saga was worse than the decision. Students learned by email that they had lost seats they had spent years earning. Families could not get through by phone. The deadline Howard enforced does not appear on its public-facing pages, and the university's explanation has changed five times in nine days. For most families, paying the college bill is already the most confusing part of the process without a school moving the target.
There is also a second thing that is true at the same time, and it matters for every family reading this: some of these students did miss real requirements, and checking your student account is your job. Knowing how to read your financial aid award letter (and what it does and doesn't guarantee) is part of that. Both things belong in this story.
Think about everything your family pays to protect. The phone gets a protection plan at checkout. The car carries full coverage at an average of $2,237 a year, according to Insurify. Even the spring break trip gets travel insurance, which Forbes puts at 4% to 6% of the trip cost.
Then tuition comes due (for many families, the largest single payment they ever make) and it goes out the door with no protection at all. If the semester falls apart in week six because of mononucleosis, a concussion, or a mental health crisis, most families discover the refund policy the hard way: there isn't one.
Borrowers who believed the student loan payment pause would keep getting extended (or that their debt would be forgiven outright) cut their payments, spent more, and are now more likely to be delinquent, according to a new National Bureau of Economic Research working paper.
Economists surveyed borrowers about their expectations during the pause and the 2022 forgiveness announcement, then linked those responses to credit bureau, employment, and spending data.
The key finding: policy uncertainty itself changed borrower behavior, and the costs are still showing up in student loan debt statistics today.
SoFi Technologies told federal securities regulators that its private student loans can be wiped out in bankruptcy under certain conditions, a quiet admission that cuts against one of the most repeated lines in personal finance.
The disclosure sits in SoFi's annual report (a Form 10-K filed with the SEC) for the fiscal year ending December 31, 2025. In the Risk Factors section, the company warns investors that its "private education loans may be discharged in bankruptcy in certain situations," including when a court finds the debt is not a qualified education loan or that repayment would cause undue hardship. SoFi adds that a private loan can also be discharged if the borrower dies or becomes disabled.
Student loan borrowers serviced by MOHELA spent this weekend staring at delinquency notices they say should not exist. Accounts that showed $0 due and active SAVE forbearance on Friday flipped to past-due balances ranging from roughly $2,000 to more than $6,700, with some borrowers marked as many as 12 months behind.
MOHELA's phone lines are closed on weekends, leaving affected borrowers with no way to reach a human until Monday. The company is one of five servicers handling the federal loan portfolio.
Federal student loan borrowers are reporting a new email from the Department of Education telling them their income-driven repayment application produced an incorrect monthly payment because of an error and that they have to submit an entirely new IDR application to fix it.
The email lands in the middle of the tightest deadline window borrowers have faced in years. The Department began sending 90-day notices to more than seven million SAVE plan borrowers on July 1, which puts the decision deadline for the first wave of them at September 29. Anyone forced to reapply is losing days they don't have.
Senator Elizabeth Warren pressed Deputy Treasury Secretary nominee Francis Brooke at a Senate Finance Committee hearing over whether the Treasury Department will resume garnishing Social Security benefits for seniors with defaulted student loans.
In the exchange, Brooke could not say how many borrowers are in default and declined to commit to keeping the current pause on Social Security offsets in place.
The U.S. Court of Appeals for the Ninth Circuit unanimously rejected (PDF File) the Department of Education's appeal to delay student loan relief for more than 170,000 borrowers under the Sweet v. McMahon borrower defense settlement, affirming the district court's ruling on July 17, 2026.
The judges found the Department failed to show the "changed circumstances" legally required to modify a settlement it agreed to in 2022 and said the agency knew exactly what it was signing up for.
More than 7 million student loan borrowers are being pushed off the SAVE plan in the next few months, and for many, the anxiety is real: after nearly two years of forbearance, they're bracing for a monthly bill they fear they can't afford.
But we've been seeing something interesting in our comments on social media - borrowers are surprised that they can still secure a $0 monthly payment on IBR.
That makes sense. If historical patterns hold, at least 3 million of these borrowers would still qualify for a $0 monthly payment under Income-Based Repayment (IBR). They just haven't run the numbers yet. That's why borrowers need to use a Student Loan Calculator and see what their expected payments would be.
The Department of Education began notifying enrolled borrowers on July 1 that they have 90 days to choose a new repayment plan. Borrowers who don't move in time will be moved into a new plan automatically. That deadline has created a scramble among borrowers who, in some cases, have not made a payment since March 2020.
Here's what borrowers might be missing about still having a $0 monthly payment.
Federal agencies cannot terminate grants simply because a new administration decides the money no longer matches its priorities, a federal judge ruled Friday.
U.S. District Judge Indira Talwani of the District of Massachusetts granted summary judgment to a coalition of 20 states, the District of Columbia, and the governors of Kansas, Kentucky, and Pennsylvania in their lawsuit against the Office of Management and Budget, Director Russell Vought, and eleven grant-making agencies, including the Departments of Justice, Agriculture, and Homeland Security, the EPA, FEMA, the National Science Foundation, and the National Endowment for the Humanities.
The case turned on the "Termination Clause" in 2 C.F.R. § 200.340, an OMB regulation that allows an agency to end a federal award that "no longer effectuates the program goals or agency priorities." Since January 2025, agencies have cited that language to cancel billions of dollars in funding, often with termination letters stating only that the work no longer aligned with agency priorities.
The Justice Department told a federal judge on July 14 that the last active lawsuit trying to stop the SAVE plan shutdown should be dismissed. They argue that the borrowers are suing over a potential tax bomb they ignored by not taking action in 2025, miscalculated payments, forgiveness timelines that wouldn't have made a difference due to the OBBBA, and that the rest of the case amounts to $1,320 the government has already promised to refund if it loses.
The 58-page filing in Havens v. U.S. Department of Education opposes the borrowers' request for a preliminary injunction and asks the court to dismiss the case outright.
The Justice Department announced Monday that it is investigating whether Harvard University's financial aid practices discriminate against American students, opening a compliance review under Title VI of the Civil Rights Act of 1964 focused on scholarship programs funded by China-based donors.
At the center of the investigation is a question with implications far beyond just Harvard: can a university accept foreign donations that come with strings attached (specifically, requirements that the money fund financial aid favoring students from particular countries) while also receiving federal dollars that prohibit discrimination based on national origin?
"Every American student should have an equal opportunity to compete for college scholarships, grants, and other kinds of financial aid and benefits," said Assistant Attorney General Harmeet K. Dhillon, who leads the Civil Rights Division. "Schools cannot take federal dollars and then turn around and accept money from foreign sources to give financial aid that deliberately excludes American citizens — doing so is illegal, and we will stop it wherever we find it."
The department stressed it has not reached any conclusions. Harvard, in a statement to The Harvard Crimson, said it "does not unlawfully discriminate on the basis of race, ethnicity, or national origin in allocating financial aid" and that it is reviewing the letter and will engage with the government.
Americans' confidence in higher education slipped to 38% this year, down from 42% in 2025, according to the new Lumina Foundation-Gallup Confidence in Higher Education survey. The drop erases most of the modest recovery colleges saw last year.
The survey, conducted in June 2026, found that 38% of U.S. adults have "a great deal" or "quite a lot" of confidence in higher education, 37% have "some," and 25% have "very little" or none. When Gallup first asked the question in 2015, 57% of Americans expressed strong confidence.
Common Sense Media's Youth AI Safety Institute has given Google Search's AI Overview and AI Mode its lowest possible rating (an "unacceptable risk" for kids and teens) after seven weeks of testing found the features failed all five of the group's severe-harm "Red Lines," fabricated facts with confidence, and cannot be turned off by parents, schools, or users.
The assessment, published July 14, 2026, tested more than 2,600 interactions on accounts registered to an 11-year-old and a 15-year-old, both with SafeSearch active.
New IRS data shows that the dreaded 529 plan penalty is far less common, and far less painful, than most families fear.
According to the IRS Statistics of Income division's line item estimates for tax year 2023 (the most recent year with data available, released in June 2026) just 165,152 tax returns paid the 10% additional tax on non-qualified distributions from 529 plans and education savings accounts, totaling $76.6 million. That works out to an average penalty of about $464 per return for people reporting 529 plan distributions.
Out of the more than 160 million individual returns filed for 2023, roughly 0.1% paid this penalty at all.
Nelnet has quietly revised its end-of-SAVE-plan FAQ to shorten its notice timeline: every 90-day notice from the servicer will now go out by the end of 2026. The FAQ previously said notices would be delivered between July 2026 and March 2027, a window Nelnet has now cut by three months.
The updated FAQ states: "Nelnet is notifying nearly three million Nelnet borrowers, so we're reaching out in waves. You'll receive your notice by the end of 2026."
The student loan debt tax bomb can happen when you have to pay taxes on the student loan forgiveness you received. However, most people will avoid the tax bomb due to a tax process called insolvency.
While some student loan forgiveness programs, like Public Service Loan Forgiveness (PSLF) are tax-free, others - like when you get your student loans discharged under Income-Based Repayment, are potentially taxable.
However, there's one big exception - insolvency. Insolvency is a tax situation when your liabilities (such as forgiven student loan debt) exceed your assets (like the money in your savings account). If you are technically insolvent, you may avoid some or all of the taxes associated with your loan forgiveness.
That is a big win for borrowers getting their loans forgiven under IBR, PAYE, or ICR. Let's break down what that looks like.
When families talk about the rising cost of college, tuition tends to dominate the conversation. But for many students, tuition isn't the largest expense. Room and board, which covers housing and meals, often makes up the majority of the bill.
Even at the most expensive colleges ranked by tuition, room and board adds a significant price.
Recent data show that at public four-year colleges, room and board now accounts for about 45% of total expenses, while tuition makes up less than 36%. At San Diego State University (SDSU), a popular in-state option, tuition is only 25% of the total cost of attendance if you include on-campus living. Room and board, meanwhile, makes up more than 62%.
Let's look at some raw numbers using SDSU as an example:
- In-State Tuition: $9,180
- Out-of-State Tuition: $13,320
- Room and Board: $23,736
It's also important to note that SDSU requires students not in the service area to live on campus for two years. That can really add up!
That gap raises a tough question: Is living on campus worth the price, even more so if you're going into debt?
More than one in three students who enroll in college never complete their degree. That figure is not just a statistic - it represents millions of families who invest time, money, and hope into higher education, only to see it fall short of its promise.
Only 62% of students who start college earn a degree within 6 years, according to data from the National Student Clearinghouse. That number has held relatively steady, and reminds families of a truth: one in three students don't finish.
As college costs continue to rise, this is an important aspect to plan for. With student loan borrowing rising, the students who struggle the most to repay their debt are the ones that never graduated.
Here's why 38% of students never finish college, and ways that you might be able to protect yourself.
California families have more tools than ever to save, invest, and build long-term financial security but many people don’t know these programs exist or how to use them. In this episode, Robert Farrington sits down with California State Treasurer Fiona Ma and Thomas Martin, Executive Director of CalABLE, for a candid, wide-ranging conversation about college savings, disability savings, and the mission to make financial empowerment accessible to every household.
Treasurer Ma shares how her career (from licensed CPA to Assembly Speaker pro Tempore to her current role as Treasurer) has shaped her push to expand economic opportunity. She breaks down what the Treasurer’s office actually does and why the programs it oversees matter for everyday Californians.
From ScholarShare 529, to CalKIDS, to CalABLE, this episode covers how these programs work, who they help, why participation matters, and what changes might be coming. Treasurer Ma also talks about ongoing efforts to introduce tax incentives for 529 contributions, her personal ethos on saving and investing, and the role early savings can play in shaping a child’s educational path.
Thomas Martin joins the conversation to explain CalABLE, a program designed to help people with disabilities save money without jeopardizing important benefits. He shares how CalABLE works, how accounts can support both college and independent living, and how CalABLE and 529 plans can complement one another.
The episode wraps with personal stories and practical advice — including money habits, favorite financial tools, and a myth the Treasurer wishes every Californian would leave behind.
The Trump administration has escalated its campaign to defund the Consumer Financial Protection Bureau - setting in motion what could be its effective closure within a year.
In a court filing (PDF File) this week, the administration said the CFPB cannot seek additional money from the Federal Reserve - its usual source of operating funds. The bureau said it has enough reserves to continue through December but “anticipates exhausting its currently available funds in early 2026.” Without congressional action, that timeline would mark the end of the CFPB’s ability to function.
The Justice Department’s Office of Legal Counsel (OLC) issued the legal opinion underpinning the decision. The OLC argued that under the Dodd-Frank Act, the CFPB can only receive funds from the “combined earnings of the Federal Reserve System.” Because the Fed has posted losses since 2022 (about $77.6 billion last year) the administration contends there are no “earnings” to transfer.
“The Federal Reserve currently lacks combined earnings from which the CFPB can draw,” the opinion stated. If the Federal Reserve has no profits, it cannot transfer money to the CFPB.
That interpretation redefines “combined earnings” to mean net profits rather than total income, a reading that may be up to interpretation. The Supreme Court upheld the CFPB’s funding structure as constitutional in 2024, without adopting that definition.
What happens next is yet to be seen.
For nearly two decades, the Public Service Loan Forgiveness Program has offered a straightforward promise: make 120 qualifying payments while working full-time for a government agency or a 501(c)(3) nonprofit, and any remaining federal student loan balance will be forgiven. The idea helped schools, hospitals, local governments, and nonprofits recruit workers who might otherwise avoid lower-paying public-service roles.
That certainty shifted when the Education Department finalized a regulation allowing the Secretary to declare an employer ineligible if it “has a substantial illegal purpose.” Though the Department says the rule targets organizations that knowingly engage in conduct that violates federal or state law, the standard is broad, unclear, and open to interpretation.
The rule is currently scheduled to take effect July 1, 2026. Borrowers don't have anything they can do to prepare - except to watch and wait...
The Trump Administration continues its efforts to hollow out the U.S. Department of Education by sending six programs to other federal agencies. The U.S. Department of Education announced the changes in a press conference on Tuesday, November 18, 2025.
Although federal law assigns responsibility for these programs to the U.S. Department of Education, U.S. Secretary of Education Linda McMahon is making an end-run around the law by entering into contracts with the other federal agencies to operate the programs under U.S. Department of Education oversight.
These interagency agreements (IAAs) send the six program to the following four agencies:
- U.S. Department of Labor (DOL): Elementary and Secondary Education Partnership and Postsecondary Education Partnership. DOL will be responsible for grants relating to Historically Black Colleges and Universities (HBCUs) and Minority-Serving Institutes (MSIs), as well as grants focused on improving student success for college students
- U.S. Department of the Interior (DOI): Indian Education Partnership
- U.S. Department of Health and Human Services (HHS): Foreign Medical Accreditation Partnership and Child Care Access Means Parents in School (CCAMPIS)
- U.S. Department of State (DOS): International Education and Foreign Language Studies Partnership, including programs administered under the Fulbright-Hays grant
U.S. Department of Education staff who manage these programs will be transferred to the four federal agencies.
The agreements were signed on September 30, 2025, but not announced until now. It will take several months to transfer the programs to the other federal agencies.
When your student loans are discharged due to disability, you may be limited in whether you can work or go to school for a period of time. Otherwise, your student loans may be reinstated.
This can be an especially difficult issue to navigate if your loans are discharged while you're attending school, or plan to. And it can happen even if you never planned on asking for a disability discharge.
Here's what to know about disability discharge, and how to navigate your choices if your loans are automatically forgiven.
If you're looking for passive income ideas, you may think the whole concept is a myth - there's no way that you can earn money by doing nothing. It's why passive income is highly sought after, yet often misunderstood.
The truth is, passive income streams require an upfront investment and a lot of nurturing in the beginning. After some time and hard work these income streams start to build and are able to maintain themselves, bringing you consistent revenue without much effort on your part.
Speaking from personal experience, adding passive income streams to your portfolio can help you increase your earnings and accelerate your financial goals in tremendous ways. For example, starting a savings account and earning interest, or investing in dividend paying stocks can all start adding income to your life without having to work! Your money is working for you!
For example, you can use passive income streams to help you get out of debt or achieve financial independence sooner.
Let's get to the passive income ideas!
Even if you don't think you'll receive financial aid, you likely should fill out the FAFSA.
According to Sallie How America Pays for College report, 74% of students and families completed the Free Application for Federal Student Aid, or FAFSA for the 2023-2024 school year.
So why are over 25% of students deciding not to apply? They may believe their parents make too much or that they won't qualify for another reason and don't want to waste their time.
But skipping the FAFSA can leave free money, access to student loans, and other opportunities on the table.
Even if you don’t think you need it now you might wish you had later on. The FAFSA application window is open now.
Here’s why you should fill out the FAFSA even if you don’t think you’ll receive aid.
A full-ride scholarship covers the full cost of attendance, including tuition, fees, room and board, books, supplies and equipment.
It can include college-specific awards, national programs from private scholarship providers, and athletic scholarships.
But while winning a full-ride scholarship is a prestigious accomplishment and significantly eases the cost of paying for college, it's very elusive, with few students winning a full-ride each year. The good news is, there are steps you can take to improve your chances.
Colleges have been known to withhold college transcripts to recover unpaid debts. But this practice is becoming illegal in some places.
For many students and alumni, a college transcript is more than a piece of paper – it’s a gateway to career opportunities, additional education, and professional development. But what happens when a college withholds your transcript? Is it even legal for an institution to do that?
The answer is complicated, yet this is a reality for many who face unpaid debts to their former colleges. Let’s dive into why this happens, the rules governing transcript withholding, and how recent regulatory changes could affect you.
Don't you wish you could lower your student loan payment? It's possible, and legal, do work some "magic" to get your student loan payment lower.
If you don't do anything with your student loans, you're automatically signed up to a generic repayment plan that typically has even payments for 10 years. However, that can be tough, especially right after graduation.
Maybe you've just started working, or maybe you don't even have a job yet and you're just side hustling to make a little money? Maybe that standard repayment plan option just isn't working for you, and you're worried what will happen if you don't make a payment or you default. Maybe you haven't looked at your student loans since before the payment pause?
If you're considering student loan deferment or forbearance, or if you're thinking about simply ignoring your student loan payments, don't!
Here are five legal ways that you can lower your student loan payment so you don't have to go into default.
You know you want to invest. You know you need to invest. But honestly, how do you start investing in your 20s after college?
Who do you trust? Do you pay someone to help? How do you know you're not going to be ripped off? Or even worse - how do you know you won't lose all your money? If you want to invest after college, here are our thoughts.
For 20-somethings, investing is important, and you know it. In your 20s, time is on your side, and the more you save and invest now, the better off you'll be later.
But, frankly, getting started investing after college is confusing. There are so many options, tools, thoughts, blogs to read about, and more. What the heck do you do?
I'm
going to share my thoughts on what you should do to start investing
after college in your twenties when you're 22-29 years old. Let's dive
in.
Applying to college may be the most stressful thing you've encountered in your life so far.
Depending on the college you're applying to, you may have to submit grade transcripts, test scores, evidence of extracurricular activities, essays, and references.
But one thing that colleges will almost never ask you about is your high school attendance. It's important to note that many high schools do include attendance information as part of your grade transcript.
However, in almost all cases, colleges will not look at your high school attendance record.
Being placed on a college admissions waitlist can create a mixed bag of emotions for applicants. On one hand, it isn’t an outright rejection, but on the other, it can feel as though you're being left on the sidelines.
After all the effort you’ve put into essays, interviews, and extracurriculars, being placed on a waitlist can be discouraging and frustrating. But understanding how a waitlist actually functions—and more importantly, what your odds of getting in might be—can help ease some of that uncertainty and inform your next steps.
We’ll dig into how the college waitlist process works, factors that influence acceptance from a waitlist, and what you can do to improve your chances. We’ll also look at real data from UC Berkeley's 2022 admissions cycle to give you a sense of how waitlist odds play out in reality.
Many people wonder just how much money they actually need to retire. In fact, it’s actually one of the most common questions people ask in regard to retirement.
However, it may not be the easiest question to answer, as there are so many variables—many of which are unknown.
You can begin to grasp how much you will need to retire, though, by considering the following questions.
Debt settlement is widely talked about as a way to get out of debt, but not many people truly understand how it works.
You may have recently experienced a financial hardship and are strongly considering consolidating your debts to relieve some pressure. Before bankruptcy, there are two main debt consolidation options to consider.
The first is a debt consolidation personal loan. This is often for those who still have a good credit score and debt-to-income (DTI) ratio. The second is debt consolidation via debt settlement, which is what we will cover today.
The debt settlement industry has had many companies that have been unscrupulous. In fact, the Consumer Financial Protection Bureau (CFPB) has repeatedly warned borrowers that dealing with debt settlement companies can be risky. Does that mean that all of these companies are bad and you should never work with one?
Let's look at how debt settlement works, its pros and cons, and the most common scams and red flags of unethical debt settlement companies. Here's what you need to know.
Here's our financial checklist of the best money moves you can make by the end of the year to maximize your savings and investments while minimizing your taxes.
The end of the year can be a whirlwind. But the actions you take over these final months can have large impacts on your tax bill next April and your long-term financial health.
By taking proactive steps now, you can ensure that your financial life is organized and primed for success as you head into the new year. Wondering which items are most important to add to your end-of-year financial to-do list? Below are nine money moves to make before the new year to boost your bottom line.
Embarking on the journey to higher education is a life-changing decision. One of the first and biggest challenges many prospective students encounter is whether to pursue a college education in-state or out-of-state.
As you know, the average cost of tuition has been on an upward trajectory since sometime around the 1980s. College tuition at a public four-year university increased 9.24% between 2010 and 2022, averaging a 12% increase each year in that period.
Not only does higher tuition mean greater costs for education, but it also means greater likelihood of finding yourself graduating with larger student loans. This is particularly concerning when the average student loan debt of recent graduates is $33,500.
In this episode, I’ll dive into the reasons why opting for an in-state college might prove to be a better long-term decision for you. From location and affordability to in-state benefits and quality of education, I aim to shed light on the advantages of keeping your educational investment in-state.
If you’re a business owner, the end of the year can be a very busy time.
With the holiday season on the horizon, you may be juggling the demands of your business while making space to spend time with family and friends.
There are several things you can do by the end of the year to end on a high note and get ready for tax season. With only 12 weeks left, here are some things business owners should do before the end of the year.
The FAFSA – or Free Application for Federal Student Aid – is required for students who want help paying for college. The application is managed by the Department of Education and helps federal, state, and college-level programs allocate financial aid. This includes grants, federal work-study, and eligibility to qualify for student loans.
How much aid a student receives depends on a number of factors including their personal finances. Because many college students receive support from their parents, the entire family’s financial situation is also taken into account as part of the application process.
Filling out the FAFSA correctly is important if you’re expecting to receive financial aid to help pay for college.
Small errors can impact how much you receive or whether or not you receive financial aid at all. These are the 10 biggest FAFSA mistakes you’ll want to avoid.
I was recently asked a question by a reader about the drawbacks of getting a private student loan.
She asked why she shouldn’t get a private student loan, when interest rates are so low right now. She would need to cosign with her daughter on the loan in order to get the best rate.
My advice was as follows: the biggest danger of a private student loan is that the cosigner is also liable for the debt. So, should something happen to her daughter, and she can’t graduate and earn income, she will be on the hook for the debt.
However, there are options to protect parents when it comes to paying their children’s tuition – tuition insurance.
Below, we’re giving you our best insights into tuition insurance and sharing our top picks for tuition insurance providers.
Let's talk about $10,000... how to get there and make it happen. Why $10,000? Because it's a number that's big enough to make a difference, but small enough to be achievable by most people who set out for it. And there are some crazy ways to make $10,000, so this will also be pretty fun!
We recently discussed how to pay down $10,000 in debt in just one year. One of the strategies is to earn more money - but many people don't think they can earn $10,000 extra in just one year.
Today, I'm going to show you some of the more unique ways that you can do it.
In reality, there are countless ways to earn $10,000 more in a year. That breaks down to just $833.33 per month. If you don't like these more extreme ideas, here's a list of 50 ways you can do it more of "the old fashioned" way.
Believe it or not, these have happened. And people can make good money doing it.
With college costs and student debt on the rise, students and their parents need to think about ways to cut the overall cost of higher education.
Even if a student wants to attend a four-year university, starting at a two-year university can conservatively lead to five-figure savings. Students who decide against earning a bachelor’s degree can gain a credential (associate’s degree) while spending less time and money than they would in a traditional public university.
Whether a student’s goal is to start a career as soon as possible or to earn a bachelor’s degree and beyond, using community college to save money and get ahead can be a smart move. In fact, attending a two-year college may be the most broadly-accessible method to reduce costs while still getting a head start on education.
Today's episode is an interview Robert had with Chuck Jaffee from the Money Life Show. He helps answer a reader question: what happens if you have money saved for college in a 529 plan, but then your child (or niece or nephew) don't actually go to college. What are the options? If you're starting from scratch, should you still consider a 529 plan?
We hope you enjoy the episode, and if you want to learn more about the Money Life Show, check them out on your favorite podcast platform.
Did you know that your student loans could get you fired?
Imagine this: One day your boss pulls you into his office, sits you down, and says there is a problem. However, your work itself has been flawless. But he doesn't want to talk to you about work — he wants to talk to you about your credit report.
You see, when you were hired, you agreed to let your employer run your credit report (maybe unknowingly, simply signing a form in your hiring packet). And now, for whatever reason, your boss lets you know that HR has concerns about your debt. Suddenly, you go from star employee to looking for a job.
You already know that student loans suck. It's a fact of life. But did you know that your student loan debt can get you fired? It's happened, and here are eight reasons why, and what you can do to prevent it.
A FERPA waiver, when signed by a student, allows parents to gain access to academic records during college. However, this raises an interesting question: should parents push their college-bound children to sign?
Many parents, accustomed to having access to their child’s academic records throughout high school, are surprised when they no longer have the same access once their child enters college. As a result, some parents may consider requesting – or even pressuring – their child to sign a FERPA waiver. But is this a good idea?
We’ll explore the nuances of FERPA, the implications of signing a waiver, and the potential consequences of forcing a college student to comply.
I don't know what to do after college!?! It's one of the most common questions I hear - from high school grads, to college students, to even some nearing college graduation.
If you find yourself saying, “I don’t know what to do after college,” you are not alone.
The truth is, most college grads have a "now what" moment. You've basically lived your entire life to-date in some type of educational setting.
Even if continuing on to grad school or some form of post-baccalaureate education is not in your immediate future, and a job is not exactly what you are looking for, there are ways to live life after college that will still make you a productive member of society.
I'm going to share with you my thoughts on what to do after college. Maybe you think these are basic - fine. But maybe they will give you some food for thought.
Are you ready to take control of your financial future?
You don’t need a financial advisor to develop your own financial plan. In fact, YOU are the best person to put one together.
When you’re directly involved in mapping out your finances you’ll be more likely to actually stick with your goals. Plus, you’ll have a keen awareness of where you stand financially and what it’s going to take to get you to the next level.
Here are six elements of a strong financial plan.
Demonstrated interest refers to the ways a student indicates interest in a specific school. This includes visiting campuses, reaching out to admissions officers, participating in prospective student events, and even interacting with the school’s online resources.
Let’s face it: the college admissions process is notoriously competitive. Over the past few decades, getting into college has become increasingly difficult, with the average acceptance rate hovering just under 70% across the US.
Gone are the days when admissions officers only looked at a prospective student’s grades and test scores. Now, students face a whole list of factors that schools secretly look for.
Demonstrated interest is on that list.
The average cost of tutoring can vary based on a number of different factors. While it used to be something only the wealthy could afford lower costs and new technologies are making it more accessible.
For example, working with a private tutor in a large city, will likely be more expensive than working with a tutor remotely.
This article dives into tutoring costs and some of the things you’ll want to consider before you begin working with a tutor.
Today's episode is a live stream interview with GradGuard CEO John Fees. We talked about tuition insurance and when it makes sense, and then covered dorm room renters insurance. There was some listener Q&A mixed in!
Enjoy! Let me know what you think.
Did you know that you can start investing with $100 or less? Most people think that you need thousands of dollars to get started investing, but that's simply not true. In fact, I started investing with just $100 when I started working my first job in high school (yes high school).
It's possible to start investing in high school, or in college, or even in your 20s.
Even more food for thought - if you invested $100 in Apple stock in 2000, it would be worth $25,000 today. Or if you invested in Amazon stock at that same time, it would be work over $3,500 today. And that's just if you invested $100 once.
Imagine if you invested $100 monthly since 2000 in Apple stock? You'd have well over $4,000,000 today. Seriously.
Life during college often comes with many ups and downs. Sometimes, life throws an unexpected curveball that requires students to withdraw from school mid-semester. If you’ve already paid for classes, you might not get a refund. That’s where tuition insurance can help.
Whether you are a parent or student, tuition insurance can be a worthwhile way to secure your investment.
In partnership with GradGuard, let’s take a look at five common reasons you should consider tuition insurance. GradGuard is a leading tuition insurance provider and they can help you protect your college financial investment.
Get a quote here and see how affordable tuition insurance can be >>
As high school graduation approaches, you might find yourself at a crossroads. Should you take the conventional route and go straight to college, or have you been dreaming about taking a break from school to try something new?
Either option holds its value. While fewer than 5% of high school students in the U.S. choose to take a gap year before enrolling in college, the Gap Year Association reports that “students who had taken a gap year were more likely to graduate with higher grade point averages than observationally identical individuals who went straight to college.”
In this article, we focus on common pros and cons of taking a gap year and identify some ways to help you take your next step, regardless of your decision.
A tuition payment plan is a lesser-known way to pay for college as you go. It breaks your tuition bill up into smaller payments, allowing you to pay in installments over time.
Remember, how you decide to finance your college education is going to be one of the most important decisions you make in your life.
While a lot of students opt for student loans or financial aid packages, that isn’t the only way to pay for college. In this article we’ll dive into how tuition payment plans work, how much they cost, and some things you’ll want to be aware of before you enroll in one.
Did you know: marital status can be a factor when determining financial aid eligibility.
If you are making your way through college after tying the knot, your financial situation will likely look different than that of your single peers, which could impact your access to financial aid.
But everyone’s situation is unique. We explore some of the potential benefits for married college students below.
The college admissions process is notoriously competitive. The last several decades might even indicate that getting into college has become harder, overall. College acceptance rates hover at a national average of 68%, though the rate at some of the nation’s top institutions is a shocking 3%.
Let’s put that into perspective, though. Of course, acceptance rates drop when more students are applying, and colleges have largely seen nonstop growth since the mid-twentieth century. There are roughly two million more students enrolled in college today than in 2004 and just over seven million more enrolled today than in 1984. In only four decades, that’s nothing to sneeze at!
And while colleges tend to emphasize the importance of an applicant’s academic performance, extracurricular involvement, and personal essay, there are more covert factors taken into account that are not discussed publicly. Read through these less obvious yet significant aspects that could play a role in your admissions decision.
In recent years, many colleges and universities have adjusted their campus pet policies to meet the changing needs of students.
Having a pet in college was once a rarity, but pet-friendly campuses are now more common as colleges work to create a more supportive environment for their students.
That said, having a pet as a college student is a big commitment in terms of financial responsibility and time commitment. From explaining common pet policies to reviewing current trends on campuses, we break down the ins and outs of owning a pet as a college student to help you make the most informed decision for you and your pet!
Ever wonder which schools are considered "Ivy League", and where the term came from?
Ivy League schools are an elite group of eight private universities based in the northeastern U.S., best characterized by their historical campuses, rigorous academic programs, and strong alumni networks.
From explaining the term “Ivy League” to discussing the current global influence of this network of schools, we’ll walk you through the history of Ivy Leagues over time, including how they’ve impacted higher education and how relevant they are in the current age of expanding access to college.
It can be confusing to understand whether you're a dependent or independent student for FAFSA and financial aid purposes.
Given the current cost of higher education, college students need all the help they can get when paying for college. There are a variety of different ways to pay for college, including paying your own way, scholarships, grants, and student loans.
Nearly all forms of financial aid start with filling out the Free Application for Federal Student Aid (FAFSA) form that is made available by the U.S. government. And one of the key sections of the FAFSA form is determining whether you are a dependent or independent student.
Getting an inheritance is the epitome of a mixed blessing. You receive a financial windfall, but the cause is the death of a loved one. On top of complicated emotions, you may be dealing with the largest sum of money you’ve ever seen.
Nobody is born knowing how to handle an inheritance, and few people are prepared to handle one. But if you’ve received an inheritance, you can take a few steps to use the money wisely.
College meal plans are a way to prepay for your meals while on campus. This can be a convenient way to get food, as most college dorm rooms do not have kitchens.
Depending on the college, they may offer a variety of different college meal plans, ranging from pay as you go to an all-inclusive meal plan that covers all of your meals.
If you're looking for additional funds to pay for college, you may be looking at Federal vs. private student loans.
After you're admitted to college, you’ll receive a financial aid package that breaks down your cost of attendance minus any grants, scholarships, or other sources of financial aid you’re eligible for. This financial aid package includes federal student loans.
Many students choose to cover their college expenses with Federal student loans, but it's not the only way (or you may need to borrow more than Federal loans offer). You can also use private student loans. There are pros and cons to consider before going the private route, but it might be the right decision depending on your financial situation.
We explore the differences between federal vs. private student loans and what you should consider before signing on the dotted line.
Sharing a living space with someone for the first time, whether it’s your best friend or a total stranger, can be exciting and intimidating at the same time. There’s a lot to navigate that exists outside of your control: habits, personalities, cuisine, culture, and a number of other lifestyle factors shared in a tight space.
You’re not alone in your concerns, though, and it’s likely your roommate has been thinking something similar. Finding harmony in your college roommate experience requires a number of soft skills to foster a positive relationship and safe living environment. And I bet that if thousands of students have successfully navigated this before you, you can do it, too!
Here are our tips for living with your first college roommate!
Social Security (SS), Supplemental Security Income (SSI), and Social Security Disability Benefits (SSDI) are three federal benefit programs that can provide income to Americans who aren't able to work. SS, SSI, and SDI are all are managed by the Social Security Administration.
Each of these programs, however, have different purposes and eligibility requirements. However, when it comes to taxes and financial aid, it can be confusing to understand how each work. For example, do you need to include SSDI benefits received on the FAFSA?
But how exactly do these programs work? And how do they play into your tax bill? In this article, we’ll look at each one and their impact on your paycheck, taxes, and FAFSA.
A common question we see every year is "can you take out more student loan debt than you need?" It sounds crazy, but some people want to take advantage of the low fixed costs and loan forgiveness options than may come in the future.
With the rising costs of tuition, fees, and college living expenses have made financing a college education increasingly difficult.
The fact remains that most of us will apply for student loans at some point in life. And while loans provide essential financial support at an important time, they come with significant responsibility and long-term implications.
So how much do you really need? And how much should you accept? Making informed financial decisions now can truly set yourself up for success later, and student loans are a great example of this. So read on to start building good financial habits!
With college becoming more expensive, how can parents afford to send a kid to school?
More than a decade after completing college, 7% of Millennials still have more than $50,000 in student loan balances. Facing our reality of digging out of debt and knowing our friends' horror stories, many millennials are motivated to help their kids get through college debt-free.
While we can’t promise that you’ll be able to help your child avoid debt, we’ve got realistic tips to cover the cost of college from the day your child is born to after they graduate.
Does the "Sell in May and Go Away" philosophy for investing considered to be superstitious or does this theory actually have any legs?
Property taxes are typically your largest homeownership expense after paying your mortgage. Any way to save on your property taxes can be a big win for your budget!
Homeownership can be a true joy. The thought of holding your very own keys in your hands and being able to point and say “That’s my house”.
That’s until it’s time to pay property taxes. The average property tax in California is $4,694 per year whereas in places like New Jersey and Connecticut, it ranges from $6,400-$9,300 per year. This is undoubtedly not one of the joys of home ownership.
Now of course, we all want to be great citizens and do our due diligence to help with infrastructure and projects that benefit our communities. However, there is no reason to be overpaying your property taxes.
There are ways to legally reduce your property tax bill - let's dive in.
Bad credit can limit your ability to do a lot of things, including purchasing a car, home, getting a credit card, and in some cases, even a job. Being creditworthy certainly has its advantages.
If you don’t have good credit, there are steps you can take to fix it. The process is called credit repair. You can do it by yourself or have someone help you, for a fee of course.
We break down your options here!
The PSLF Buyback Program allows you to "buy" missing payments that would have allowed you to qualify for loan forgiveness.
To qualify for the Public Student Loan Forgiveness, you must have 120 months of qualifying payments made while employed in a qualifying public service job.
Here's what you need to know.
When you’re unemployed, it’s hard enough getting out of bed in the morning, let alone searching for a job. Add to that the stress of dealing with your student loans and it’s a wonder you can get out of bed at all. Student loan debt and unemployment is not a fun combination.
We wish we could snap our fingers and make your student loans disappear when you can’t pay them (and even when you can). Instead, we’ll have to settle by giving you some advice on how to deal with them while you’re unemployed.
Before we go into it, the first thing you should do when unemployed is apply for unemployment benefits, if you’re eligible. Any income is a step in the right direction when you have bills you need to pay. Look up your state’s unemployment requirements to see if you’re eligible and how much you can get.
After that, you need to make sure your budget is in order and you're still handling your student loan debt.
Here's our advice that will hopefully get you on the right path so you can focus on your job search.
In its nearly 250-year history, the U.S. has experienced more periods of inflation than deflation. The last big period of deflation occurred during The Great Depression.
There was another smaller period during the Great Financial Crisis. Both coincided with a recession. During a recession and deflation, people lose their jobs, demand drops, and with it, prices.
But for those who are able to hang on to their jobs and have investments, what should they look at for some of the best investments during a deflationary period? In this article, we'll explain how deflation works and offer a few strategies for defending against it.
Around 80% of mortgage borrowers in the United States have an escrow or impound account. In fact, these accounts are required by some lenders.
These accounts hold money on behalf of the buyer to ensure certain payments are made on time - typically homeowners insurance and property taxes. This can help reduce liability and risk lenders take on, giving buyers access to better financing options.
What is an escrow or impound account? Is it required? More importantly, how do you cancel an escrow or impound account if you don’t actually need it? This article will dive into all of those questions to help you figure out whether or not an escrow account is a good move for you.
When you think of financial scams, you may think of Bernie Madoff and Nigerian Princes. But if you listen to enough “financial experts” on YouTube and TikTok, you may hear that the humble 401(k) is a scam.
A 401(k) is a tax-advantaged retirement investment account offered by many employers. It's an account so basic that it may be a victim of its own success. Has the 401(k) scammed aspiring retirees out of their hard-earned money? We don’t think so, but we will explain why the account is being so harshly maligned.
Choosing the right school for you can be difficult. Not only does the decision come while you’re still fairly young, but it can also be heavily influenced by external factors that end up not aligning with what you want. Take it from someone who’s been there.
In fact, about one-third of college students transfer schools at some point before finishing their degree. And total transfers represented over 13% of all continuing and returning undergraduates last year.
This article walks through the top reasons students choose to transfer, how to identify when the time is right, and what to do to set yourself up for success at a new school.
The tax deadline is almost here! Here are some last minute tax reminders if you're still working on filing your taxes.
Although it might not be the most enjoyable financial task, it's a necessary obligation that we each undertake every year. And if you use great tax software, filing taxes doesn’t take as much time as you may dread.
But tax filing time isn’t only about filing returns. There are things you can do today to help you save money on your tax bill, and help you save time on filing.
Here are the best last-minute tax tips to consider this season.
When a borrower defaults on federal student loans, the only one hurt is the borrower, Here's what you need to know about strategic default for student loans.
The post Strategic Default For Student Loans: Why It’s A Bad Idea appeared first on The College Investor.
When a borrower defaults on federal student loans, the only one hurt is the borrower, Here's what you need to know about strategic default for student loans.
We break down the best business checking accounts for side hustlers and small business owners both online and offline.
The post 10 Best Business Checking Accounts In September 2023 appeared first on The College Investor.
If you cringe when you think about student loans, you're probably not alone. Here's how to overcome the fear of your student loans.
The post How To Overcome The Fear Of Your Student Loans appeared first on The College Investor.
Calculating the math behind whether it makes sense to do married filing separately for IBR, PAYE, SAVE for student loan debt.
The post Married Filing Separately For Your Student Loan Payments (For IBR, PAYE, SAVE) appeared first on The College Investor.
Wondering how to choose a business bank account? All bank accounts are slightly different, so there are several factors you need to consider. Learn more.
The post How To Choose A Business Bank Account appeared first on The College Investor.
Wondering how to choose a business bank account? All bank accounts are slightly different, so there are several factors you need to consider. Learn more.
The Private College 529 Plan lets you lock in current tuition rates for the future. But which schools recognize the plan and is it worth the cost? Learn more.
The post What Is The Private College 529 Plan? appeared first on The College Investor.
The Private College 529 Plan lets you lock in current tuition rates for the future. But which schools recognize the plan and is it worth the cost? Learn more.
A grandparent-owned 529 plan is a type of college savings plan where the account owner is a grandparent, as opposed to a parent.
The post What Is A Grandparent-Owned 529 Plan? appeared first on The College Investor.
For many college students, dorm room move-in day is fast approaching. Our tips show you how to prepare and make dorm room move-in easy. Learn more.
The post How To Prepare And Make Dorm Room Move-In Easy appeared first on The College Investor.
For many college students, dorm room move-in day is fast approaching. Our tips show you how to prepare and make dorm room move-in easy. Learn more.
The student loan double-consolidation loophole can make Parent PLUS loans eligible for all income-driven repayment plans, but it's ending in 2025. Learn more.
A guaranteed return on investment is a fixed rate of return you can count on. But there are downsides to chasing investment guarantees. Find out more.
The post Is There Such A Thing As A Guaranteed Return On Investment? appeared first on The College Investor.
A guaranteed return on investment is a fixed rate of return you can count on. But there are downsides to chasing investment guarantees. Find out more.
A liberal arts college emphasizes undergraduate studies in the liberal arts. But with expensive tuition, is a liberal arts degree worth the cost?
The post What Is A Liberal Arts College? appeared first on The College Investor.
A liberal arts college emphasizes undergraduate studies in the liberal arts. But with expensive tuition, is a liberal arts degree worth the cost?
Building a good credit score is important for every college student. But should parents give a child a credit card for college? Find out more.
The post Should Parents Give Their Child A Credit Card For College? appeared first on The College Investor.
We dive into whether parents should give their child a credit card to use for when they go off to college.
Federal student loan repayment, paused for almost four years, is about to restart. Here are the important dates you need to know.
The post Important Dates For Student Loan Repayment Restart appeared first on The College Investor.
Student loans can weight heavily on your finances after you graduate. Find out how student loans impact your credit score, both negatively and positively.
The post How Do Student Loans Impact Your Credit Score? appeared first on The College Investor.
Student loans can weight heavily on your finances after you graduate. Find out how student loans impact your credit score, both negatively and positively.
The friends you make in college can be as valuable as the degree you earn, but meeting new people is hard. Follow these tips on how to make friends in college.
Here are ten money mindset quotes that can help you frame budgeting, building wealth, and more.
College is more expensive than ever, but if you need to withdraw from school early, tuition refunds are not guaranteed. Find out how college refunds work.
The post How College Refunds Work Plus The Benefits Of Tuition Insurance appeared first on The College Investor.
College is more expensive than ever, but if you need to withdraw from school early, tuition refunds are not guaranteed. Find out how college refunds work.
If you are paid hourly, how does it translate to an annual salary? The math is easier than you think. Here's how to convert hourly wage to annual salary.
You may know that you need a will. But what other estate planning documents will be helpful for your when you die? Take a look at this list!
The post The Essential Estate Planning Documents: What You Need and Why appeared first on The College Investor.
You may know that you need a will. But what other documents will be helpful for your estate planning needs? Take a look at this list!
The SAVE repayment plan is a new, updated version of the REPAYE income-driven repayment plan. How will it impact you? Learn more.
Did you attend a trade school? Here's what you need to know about trade school loan forgiveness and how to qualify.
The post Trade School Loan Forgiveness Programs appeared first on The College Investor.
How To Make Money Using AI: Are you a freelancer or affiliate marketer? Here are 5 ways you can use AI tools like ChatGPT to boost your earnings.
The post How To Make Money Using AI appeared first on The College Investor.
How To Make Money Using AI: Are you a freelancer or affiliate marketer? Here are 5 ways you can use AI tools like ChatGPT to boost your earnings.
There are a lot of ways to make extra money online and offline, but what are the best side hustles to make it happen? We break it down.
The post 20 Best Side Hustles You Can Start Earning With In 2023 appeared first on The College Investor.
As you prepare for college, have you considered that there may be risks in attending? Here are five of the biggest risks of college. Find out more.
The post The 5 Biggest Risks Of College appeared first on The College Investor.
As you prepare for college, have you considered that there may be risks in attending? Here are five of the biggest risks of college. Find out more.
Investing for dividends is a key way to grow your portfolio and your wealth over time because dividends compound and grow over time.
The post Investing for Dividends – How Does It Work And Where To Start appeared first on The College Investor.
Investing for dividends is a key way to grow your portfolio and your wealth over time because dividends compound and grow over time.
Is a sudden loss of income or other circumstance leaving you unable to pay your college bills? Find out how to write a financial aid appeal letter. Learn more.
If you aren't happy with your HSA provider, did you know you can change your HSA provider away from your employer anytime?
The post How To Change Your HSA Provider appeared first on The College Investor.
It's difficult to get a loan when you're unemployed. Find out what factors lenders consider, and how to manage your existing credit when you've lost your job.
The post Can I Get A Loan If I’m Unemployed? appeared first on The College Investor.
It's difficult to get a loan when you're unemployed. Find out what factors lenders consider, and how to manage your existing credit when you've lost your job.
Winning a scholarship can lessen the financial burden of college, but you must be aware of the scholarship gotchas that exist. Learn more.
The post College Scholarship Gotchas: How To Avoid Mistakes When You Apply appeared first on The College Investor.
Winning a scholarship can lessen the financial burden of college, but you must be aware of the scholarship gotchas that exist. Learn more.
Many college graduates have considered using their 401k for student loan repayment. But is it a good idea? Learn more.
The post Should You Use Your 401k For Student Loan Repayment? appeared first on The College Investor.
Many college graduates have considered using their 401(k) to pay off their student loan debt. But is it a good idea? Learn more.
As getting a college degree gets more expensive by the year, more and more students are relying on federal student loans to keep the dream alive. And when you get your award letter you might see listings for both subsidized and unsubsidized student loans.
However, all the language that is used to describe the different types of loans available to you can sound like coded jargon, yes?
In this post, we are going create a dent in that cloud of confusion.
Today we’ll talk about the differences between the terms “Subsidized” and “Unsubsidized student loans” when it comes to the Federal Direct Student Loan Program.
The William D. Ford Direct Loan Program is the largest loan program offered by the United States Department of Education. It's basically the "law" that defines what can and can't be done with student loans.
The Subsidized and Unsubsidized loans are two of the four types of Direct Loans. These are the most common types of loans that undergraduates will get. Let's break down what they mean, what you need to know, and options if you need to borrow more.
Table of ContentsSubsidized Student LoansUnsubsidized Student LoansWho Is Eligible For Direct Loans?How Much Can You Borrow?How Much Time Do You Have To Pay Off Your Direct Loans?What If You Need To Borrow More?Key TakeawaysSubsidized Student LoansIf you qualify for Federal Direct Subsidized Student Loans, you should definitely take advantage, as they are one of the best student loans you can get.
- Direct Subsidized Loans are available to undergraduate students who have demonstrated financial need.
- The amount you can borrow is determined by your school.
- The loan amount will not exceed your financial need.
- The US Department of Education will pay the interest on your loan while you are in school at least half time, during the first six months after you leave school (the grace period) and/or during an approved deferment. Unsubsidized Student Loans* Direct Unsubsidized are available to undergraduate and graduate students. There is no need to demonstrate financial need.
- The school you attend will determine your loan amount based on your financial need and other forms of financial aid you might be receiving.
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Unlike the Subsidized program, you are responsible as a student for paying interest on your loan throughout your time in school and after you leave. (this is why this particular loan is “unsubsidized”). Any unpaid interests will be added to the principal. Who Is Eligible For Direct Loans?There are several factors to be aware of when it comes to qualifying for direct loans. There are also limits to how much you can borrow with Direct student loans.
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In order to qualify for any Federal Student Loan program, you need to be US Citizen or Permanent Resident and have a valid social security number.
- You must have been accepted and be enrolled in at a school that participates in the Direct Loan Program at least half-time.
- If you are an undergraduate, you qualify both for the Subsidized and Unsubsidized Loans. As a graduate student, you only qualify for Unsubsidized Loan.
- In order to continue receiving funds, you need to continue to show satisfactory academic progress.
- You must not already be in default of another federally-funded student loan
- If you determine from the above criteria that you are eligible, you would then move on to fill out the Free Application for Federal Student Aid (FAFSA®). Something to note: Most males students need to be registered with the Selective Service in order to receive Federal Aid.
How Much Can You Borrow?There are different borrowing limits depending on if you're a dependent student or independent student. The limits also change based on what year of school you're in.
If the amount your school determines is more than you actually need, you can also borrow less money - something that will come in handy if it is your goal to pay off your student loans faster.
When your loan is awarded, it will be sent directly to your school who will then apply the money to your school account to pay tuition and fees.
Here's the current student loan borrowing limits:
| Year Of School | Dependent Student | Independent Student | | --- | --- | --- | | First Year Undergraduate | $5,500 - No More Than $3,500 Subsidized | $9,500 - No More Than $3,500 Subsidized | | Second Year Undergraduate | $6,500 - No More Than $4,500 Subsidized | $10,500 - No More Than $4,500 Subsidized | | Third Year Undergraduate And Beyond | $7,500 - No More Than $5,500 Subsidized | $12,500 - No More Than $5,500 Subsidized | | Professional And Graduate | N/A | $20,500 - No unsubsizied |
Note: All graduate and professional students are considered independent students. Also, graduate and professional students aren't eligible for subsidized loans.
There is also a total loan limit you have to follow:
Dependent Students: $31,000, with no more than $23,000 subsidized
Independent Students: $57,500 for undergraduates, with no more than $23,000 subsidized
Professional and Graduate Students: $138,500 for professional and graduate students, with no more than $65,500 subsidized. These loan limits include any aggregate loans taken out during undergraduate study.
How Much Time Do You Have To Pay Off Your Direct Loans?With the Unsubsidized student loan, once you have graduated from school, you have a six-month “grace period” where you don’t necessarily have to make payments on your loan although you will have to pay any interest you accrued on the amount you borrowed.
In most cases, Subsidized student loan borrowers will not have to worry about payments until the grace period is over.
Your repayment period begins a day after the grace period ends - this holds both for Subsidized and Unsubsidized student loan borrowers.
Because you absolutely do not want to miss when your repayment begins, it is important that you communicate clearly with your loan servicer to get details the specific date your repayment period starts, how much you need to be paying and the methods of payments.
If for some reason, you are unable to pay the interest during the six-month grace period (under the Unsubsidized program) , the interest amount will be capitalized. This means that the interest amount will be added to the principal which can potentially increase the amount you have to pay each month.
Generally you will have between 10-25 years to pay off your student loans.
If you decide to consolidate your loans using the Direct Consolidation Program this time period is extended up to 30 years.
For both the Subsidized and Unsubsidized loans, you have the opportunity to use income-based repayment programs like PAYE and REPAYE.
What If You Need To Borrow More?Many people see those subsidized and unsubsidized student loan limits for undergraduates and don't know how they will afford to pay for college. And that's a rational fear if you were planning to borrow the full cost of college. But remember, paying for college is a pie - and there are a lot of different slices to choose from.
For the full breakdown of the "best" way to pay for college, check out this article: The Best Way To Pay For College.
If you're already exhausted other options, and know your ROI on education, then you can look at private loans.
We recommend students shop and compare private loan options before taking them out. Credibleis an excellent choice because you can compare about 10 different lenders in 2 minutes and see what you qualify for. Check out Credible here.
We also have a full comparison tool on the Best Private Loans To Pay For College here.
Key Takeaways If you are an undergraduate, your best option between these two loans is the Direct Subsidized Loan.
* If you can borrow less on your loan, do it. You will have less to pay later.
* The Department of Education will assign you a loan servicer once your loans are disbursed.
* Make sure you know the contact information of your loan servicer and stay on top of any information they send you regarding repayment.
* Take advantage of income-based repayment programs available to you.
*We would love to hear your thoughts in the comments!**
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There are many weird stock market indicators that pundits try to use to explain what you should be doing in the stock market at any given time.
There seems to be many ideas that people will suggest to determine your investing strategy including the January-effect, the presidential cycle, which team wins the Super Bowl, and how well stocks will fare.
Over time, the of the stock market are hard to beat, and timing the market is not something that many people can do on a reliable basis.
Based on this month, you may have encountered the "Sell in May and Go Away" philosophy. While it may sound kitschy or superstitious, does this theory actually have any legs?
Table of ContentsWhat Exactly Is ‘Sell In May And Go Away?’The Problem With Sell In May And Go AwaySell In May And Go Away Historical ReturnsWho Are You Investing For?Is There A Benefit Of Not Following The Masses?The Bottom LineWhat Exactly Is ‘Sell In May And Go Away?’The basic theory behind “Sell in May and Go Away” is that the stock market has had a nice run up during the fall and winter months (November through April). As spring and summer approaches, the theory suggests we will begin to see somewhat of a decline during the spring and summer months.
If you abide by this, you would sell your stocks in late April or early May (hopefully realizing nice gains). Then, you could sit on the cash until the fall where you would buy back into the stock market.
Sounds simple, doesn’t it?
If you think this idea is brand new, it has actually been around for decades and studied by numerous stock market theorists. Some theorists support the validity of the Sell in May and Go Away theory while others say it’s pure hogwash.
That said, it might be a tempting concept to get behind either because traders may not be as active during the summer months. Or perhaps some may simply think that it’s a possible opportunity to time the market.
The Problem With Sell In May And Go AwayWhen so many other investors are doing the same thing with their stock investments, it's hard for any one individual investor to see much of an impact. Any quantifiable benefit you possibly would have realized is diluted.
Beyond that, the other major problem with this theory is that it doesn’t account for your unique investing and financial situation. Listening to others who may not know your specific situation and basing your investment decisions off of them isn’t the best way to grow your investments. Following sage advice is one thing, but following pundits without fully researching or talking to others about it is a trading mistake.
While it may be beneficial to sell out of some of your stocks, you can only know that after analyzing your holdings in light of your investment needs and goals.
The Best Ways to Start InvestingWant to move beyond hazy investment philosophies? Here are 10 different ways to start investing with $1,000.
**LEARN MORE** Sell In May And Go Away Historical ReturnsLPL Financial measured the S&P 500 Index May-October returns during the decade of the 2010s and found an average of a positive 3.8% return each year, with no significant declines.
The S&P 500 was also up 10.5% from May to October 2021, though it was down 5.3% during the same period in 2022.
Who Are You Investing For?At the end of the day, it all comes down to deciding on your investing strategy and sticking with it. Some people might look at the long-term fundamentals of a company to invest in.
Others may prefer investing in index funds and forgetting about the money due to a long-term investment horizon.
Those are some of the basics, but the point is to have a plan to guide your decision-making. That helps you plan for your retirement and create a portfolio that can get you there.
If you have long-term investing on the horizon, you don't need to worry about whether it is time to get out of the stock market. Instead, just ignore the experts on CNBC and stick to your plan.
That means if you put new money into the market every month/quarter, then keep on doing that. If you rebalance every quarter or semi-annually then keep on doing that—unless your underlying goals change.
Is There A Benefit Of Not Following The Masses?If you have read The College Investor for long, you’ll know that we love Warren Buffett and has him listed as one of the best investors of all time. Buffett does not let what others say affect his investing decisions and says his philosophy is to hold stocks forever.
While that is not the only investing strategy, it is one that has obviously worked for Buffett over his long career. Whatever your investing strategy is, stick with it and don't follow what everyone else is doing.
The Bottom LineIf you take a long term approach to investing in the stock market, you probably won't want to sell in May (or any other time), just because it happens to be part of a catchy rhyme.
You may experience potential downturns, but you'll also take advantage of potential gains if the market goes up during the summer months.
Over time, the long-term returns of the stock market are hard to beat, and timing the market is not something that many people can do on a reliable basis.
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Minimizing costs is usually key to maximizing returns, but not always. Sometimes, state income tax breaks can compensate for the cost of 529 plans with higher fees. So, how can you find the best 529 plan for your state and situation?
A more focused analysis of 529 plan portfolio performance net of costs and state income tax breaks yields results that differ from traditional 529 plan ratings.
Let's break it down.
Table of ContentsPopular Ratings Of 529 PlansTwo Investment Options Are EnoughCombined Impact Of Fees And State Income Tax BreaksList Of States And 529 Plan Performance (ROI)Popular Ratings Of 529 PlansThere are several well-known ratings of 529 plans, such as:
- Savingforcollege.com: 5-Cap Ratings and Performance Rankings
- Morningstar: Gold, Silver, and Bronze Ratings
These ratings are based on a holistic evaluation of 529 plan performance, considering the full mix of investment options.
More recently, Penn-Wharton published a study that compares the performance of each state's 529 plan with a lower-cost, out-of-state plan.
This study confirms two things:
- Direct-sold 529 plans have lower fees than advisor-sold 529 plans, lower than 1%.
- Investors in 28 states would be better off going out of state for lower fees.
This is similar to previous research, such as Savingforcollege.com's Fee Study. The Penn-Wharton study identified California as the lowest-cost state since it has lower average fees on its set of investment options.
Two Investment Options Are EnoughA key flaw of all these studies is they use a holistic analysis to identify the best collection of investment options. Most 529 plans offer a dozen or more investment options.
But, all most families need are just two investment options:
- High-risk/high-return investment option
- Low-risk investment option
They can then mix these investment options to achieve an asset allocation that yields their desired combination of risk and return. Most of the performance of an investment portfolio is due to the asset allocation (e.g., percentage equities), not the specific investments included in the portfolio.
The high-risk investment option can be an S&P 500 index fund. Other stock funds, such as the Russell 2000 and a total stock market index fund, behave similarly to the S&P 500.
Only about 75 stocks in these index funds dictate the performance of the funds because the funds are weighted by market capitalization. Everything else is just a matter of taste. Chasing after the latest fad, such as a REIT, foreign stock fund, or ESG fund, usually results in lower long-term performance.
Although the expenses vary by portfolio, the index funds usually have the lowest fees.
But the fees for the same index funds do vary by 529 plan, from 2 bp to 65 bp. (A "bp" is 1/100th of a percent.)
Combined Impact Of Fees And State Income Tax BreaksThe total annual asset-based fee was identified for the S&P 500 index fund for each direct-sold 529 plan. The fee information was extracted from the latest version of each 529 plan's disclosure brochure or program description.
If the 529 plan does not offer an S&P 500 portfolio, a large cap or total stock market index fund was substituted, whichever had the lowest fees. Examples include the Vanguard Total Stock Market Index Fund and the U.S. Broad Large Cap Index Fund.
The highest state income tax break was also identified for each 529 plan. Two-thirds of the states offer a state income tax deduction or tax credit based on contributions to the state's 529 plan.
The fees and state income tax breaks were combined to calculate the net return on investment after investing $100 per month at a 6% annual rate of return for 10 years. This more naturally mimics the typical performance experienced by investors in 529 plans, in contrast with analysis that assumes a $10,000 lump-sum contribution.
A 6% annual rate of return, about half of the long-term return on an S&P 500 index fund, is what one could expect by using an age-based asset allocation on average. The monthly contribution amount does not hold much significance as the return on investment is proportional.
However, $100 per month is low enough to ensure eligibility for the maximum state income tax break. The analysis assumes that the value of the state income tax break is contributed to the 529 plan as an extra contribution once a year. Fees are also subtracted once a year.
The result is shown in the following table, with Wyoming omitted since it does not have its own 529 plan or offer a state income tax break. The table is sorted according to Net ROI, from highest to lowest.
The average fees are 22.9 bp, and the average state income tax break is 5%, with an average net return of 41.9%. Ten 529 plans have a net return of 45% or higher, earning them a gold star.
Although California has the lowest overall fees, there are four states that charge lower fees on their S&P 500 index portfolios, and California does not offer a state income tax break. As a result, California drops to 40th place when one considers the net return on investment. Instead, Indiana, which has a large state income tax break, takes first place.
The dozen lowest performing states either do not offer a state income tax break or do not have a state income tax. This includes three states with very low fees:
- Florida
- South Dakota
- California
However, offering a state income tax break does not guarantee good performance. Mississippi offers a state income tax deduction but also charges the highest fees at 65 bp, resulting in among the worst performance.
In contrast, New Jersey charges similar fees, at 62 bp, but offers a much better state income tax break, yielding an above-average net return on investment.
Generally, there is a stronger correlation between the net return on investment and the value of the state income tax break than with having lower fees. There is no correlation between fees and the state income tax break, so higher fees are not necessary to provide better benefits to families.
List Of States And 529 Plan Performance (ROI)Here's a breakdown of states, their fees, tax breaks, and net return on investment (ROI) in ROI order:
| State | Fees (bp) | State Tax Break | Net ROI | | --- | --- | --- | --- | | Indiana | 16 | 20% | 62.3% | | Minnesota | 15.25 | 10% | 49.0% | | New York | 12 | 9% | 47.9% | | Iowa | 18 | 9% | 47.6% | | Vermont | 39 | 10% | 47.1% | | Wisconsin | 11 | 8% | 46.5% | | Washington DC | 32 | 9% | 46.4% | | Connecticut | 11 | 7% | 45.6% | | Louisiana | 2 | 6% | 45.0% | | Rhode Island | 2 | 6% | 45.0% | | West Virginia | 12 | 7% | 44.9% | | South Carolina | 20 | 7% | 44.8% | | Georgia | 9 | 6% | 44.5% | | Virginia | 7.1 | 6% | 44.3% | | Idaho | 36 | 7% | 44.0% | | Nebraska | 29 | 7% | 43.9% | | Maryland | 13 | 6% | 43.8% | | New Jersey | 62 | 9% | 43.8% | | Missouri | 18 | 6% | 43.6% | | Massachusetts | 11 | 5% | 43.1% | | Kansas | 20 | 6% | 43.1% | | Illinois | 10 | 5% | 43.0% | | Utah | 12 | 5% | 42.9% | | New Mexico | 12 | 5% | 42.7% | | Ohio | 14.5 | 5% | 42.7% | | Maine | 50 | 7% | 42.5% | | Arizona | 11 | 5% | 42.4% | | Alabama | 20.5 | 5% | 42.2% | | Michigan | 9.5 | 4% | 42.1% | | Oregon | 22 | 5% | 42.0% | | Arkansas | 53 | 7% | 41.9% | | Oklahoma | 25 | 5% | 41.8% | | Montana | 57 | 7% | 41.6% | | Colorado | 29 | 5% | 41.0% | | Pennsylvania | 20.5 | 3% | 39.6% | | Mississippi | 65 | 5% | 38.5% | | Florida | 2 | 0% | 37.1% | | North Dakota | 48 | 3% | 37.1% | | South Dakota | 5 | 0% | 36.8% | | California | 6 | 0% | 36.8% | | Delaware | 11 | 0% | 36.4% | | New Hampshire | 11 | 0% | 36.4% | | Nevada | 13 | 0% | 36.2% | | Tennessee | 23 | 0% | 35.4% | | Washington | 25.4 | 0% | 35.2% | | North Carolina | 29.5 | 0% | 34.9% | | Texas | 33 | 0% | 34.6% | | Kentucky | 51 | 0% | 33.1% | | Hawaii | 58 | 0% | 32.6% |
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There are a variety of programs that can provide non-profit student loan forgiveness for individuals working for a 501(c)(3) or other nonprofit organization.
By participating in these programs, eligible borrowers can have their student loans forgiven or significantly reduced after meeting specific requirements. However, the onus is always on the borrower to make sure they find, apply, and maintain eligibility for these programs.
Here’s what you need to know about the different ways to get nonprofit student loan forgiveness.
Table of ContentsPublic Service Loan Forgiveness (PSLF) ProgramEligibility Requirements For PSLFQualifying EmployersHow to Apply for PSLFIncome-Driven Repayment (IDR) PlansAdditional Nonprofit Loan Forgiveness OptionsMaximizing Your Loan Forgiveness PotentialFinal ThoughtsPublic Service Loan Forgiveness (PSLF) ProgramThe Public Service Loan Forgiveness (PSLF) program is the primary loan forgiveness option for nonprofit employees. Established by the U.S. Department of Education, the PSLF program forgives the remaining balance on Direct Loans after 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer.
Eligibility Requirements For PSLFTo be eligible for PSLF, you must meet 4 main criteria to qualify
- 1. Have Direct Student Loans
- 2. Be on a qualifying income-driven repayment plan
- 3. Certify your employment
- 4. Do this for 120 payments Direct Loans: Only federal Direct Loans qualify for PSLF. If you have other federal loans, you can consolidate them into a Direct Consolidation Loan to become eligible.
Repayment Plan: You must be enrolled in an Income-Driven Repayment (IDR) plan, which bases your monthly payments on your income and family size.
Full-Time Employment: You must work full-time for a qualifying employer. Full-time is defined as meeting your employer's definition of full-time or working at least 30 hours per week, whichever is greater.
120 Qualifying Payments: You must make 120 qualifying monthly payments under your IDR plan while employed full-time by a qualifying employer. Payments must be made on time and in full.
Qualifying EmployersEligible employers for PSLF include:
- Government organizations (federal, state, local, or tribal)
- Tax-exempt, not-for-profit organizations under Section 501(c)(3) of the Internal Revenue Code
- Other types of nonprofit organizations that provide qualifying public services
See our full list of qualifying jobs for PSLF.
How to Apply for PSLFIf you’re interested in applying for a PSLF, take the following steps:
Complete the Employment Certification Form (ECF): Submit the ECF annually or whenever you change employers to ensure you're on track for PSLF. You can use the PSLF Help Tool now to do this electronically and even ask your employer to e-Sign as well.
Track Your Progress: Monitor your qualifying payments and employment status through your loan servicer’s portal - which will eventually be MOHELA once you submit your first ECF.
Apply for PSLF: After making 120 qualifying payments, submit the PSLF application to request forgiveness. Continue making payments until your application is approved.
Income-Driven Repayment (IDR) PlansEnrolling in an IDR Plan is essential for PSLF eligibility, but all IDR plans also include student loan forgiveness on their own as well.
There are four IDR plans available:
1. Income-Based Repayment (IBR): Monthly payments are set at 10-15% of your discretionary income, depending on when you first received your loans.
2. Income-Contingent Repayment (ICR): Monthly payments are the lesser of 20% of your discretionary income or the amount you would pay on a 12-year fixed repayment plan, adjusted for income.
3. Pay As You Earn (PAYE): Monthly payments are set at 10% of your discretionary income, with a maximum of the 10-year Standard Repayment Plan amount.
4. Revised Pay As You Earn (REPAYE): Monthly payments are set at 10% of your discretionary income, with no maximum payment cap.
All IDR plans will forgive student loans after 20 or 25 years, depending on when your loan was originated. This can be a helpful backup plan if PSLF doesn’t work out or you leave public service before reaching 120 payments.
Additional Nonprofit Loan Forgiveness OptionsAside from PSLF, there are other nonprofit loan forgiveness options to consider:
Teacher Loan Forgiveness: Teachers working in low-income schools or educational service agencies may qualify for up to $17,500 in loan forgiveness. Find out more loan forgiveness programs for teachers here.
Nurse Corps Loan Repayment Program: Registered nurses, nurse practitioners, and nurse faculty members may receive loan repayment assistance in exchange for working in underserved communities.
National Health Service Corps (NHSC) Loan Repayment Program: Health professionals in eligible disciplines may receive loan repayment assistance in exchange for providing services in Health Professional Shortage Areas (HPSAs).
See our full guide to student loans by state to see what options may be available in your area.
Maximizing Your Loan Forgiveness PotentialTo make the most of nonprofit student loan forgiveness programs, follow these tips:
Stay Informed: Keep up-to-date with changes to student loan forgiveness programs and policies. This is especially important given the PSLF and IDR waivers that currently exist.
Keep Accurate Records: Maintain thorough documentation of your employment, loan payments, and correspondence with loan servicers. If you mail in forms to your loan servicer, always keep the originals!
Consider Consolidation: If you have non-qualifying federal loans, consolidate them into a Direct Consolidation Loan to become eligible for PSLF.
Seek Professional Guidance: Consult with a student loan expert or financial advisor to ensure you're on the right path to maximize loan forgiveness. You can use a service like Student Loan Planner to help you navigate your options.
Final ThoughtsNonprofit student loan forgiveness programs, such as PSLF, offer significant financial relief for those working in the nonprofit sector.
By understanding the eligibility requirements, enrolling in the right repayment plan, and diligently tracking your progress, you can successfully navigate the path to loan forgiveness and alleviate the burden of student debt.
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If you work for a 501(c)(3) or other nonprofit organization, you may be able to get nonprofit student loan forgiveness or other help.
In the early days of the Covid-19 pandemic, the federal government took swift action to help Americans who were hurting economically. The CARES Act included a temporary pause on all Federal student loan payments.
Though the measure was intended to be a form of short-term relief, the temporary measure paved the way for sweeping changes.
By late 2020, 60% of student loan borrowers were receiving some form of assistance on their student loans.2 Since that time, the moratorium on student loan payments has been extended until mid-2023, and the Biden-Harris Administration announced the nation’s first one-time loan forgiveness program (which is currently paused by the Supreme Court).
The administration also announced potential changes to the way income-driven repayment programs are structured. This means loan balances would not increase as long as an individual was on a loan repayment program.
Table of ContentsNationwide Student Loan Fast FactsStudent Loans By State Fast FactsThe Expected Impact Of Debt Forgiveness PlanStudent Loan Debt By State BreakdownNationwide Student Loan Fast FactsThe descriptive statistics below reflect the state of student loan borrowers across the United States in 2021. In 2021, debt delinquency and default fell, but overall debt loads continued to rise. Given the payment pause, updated data isn't really going to be helpful until 2024.
- Number of Borrowers: 43 million
- Median Debt Balance: $18,767
- Number of Borrowers with delinquent or defaulted loans: 3.3 million (7.5% of all borrowers)
- Number of borrowers that saw their debt decrease in 2021: 11.5 million (26.6% of all borrowers)
- Percentage of student loan borrowers who have paid off their debt: 49%
- Estimated number of borrowers eligible for loan forgiveness: 38.6 million Note, given the pandemic and all federal student loan payments being paused, the average student loan payment data is skewed. You can see the past average student loan payment and average student loan debt by graduating class here.
Although debt levels continue to rise, some student loan borrowers are seeing their debt loads fall. Nearly half (49%) of all borrowers who took out loans to pay for their education have paid the loans off in full.
Among current borrowers, 26.6% saw their debt loads shrink in 2021. Additionally, the vast majority of all current borrowers will be eligible for some amount of student loan forgiveness under the Biden-Harris Student Debt Relief Plan.
Student Loans By State Fast FactsWhile the nationwide debt statistics paint a concerning picture, the actual debt loads vary significantly from state to state. In these fast facts, we highlight both average and median debt loads by state.
Typically, commentators talk about median debt loads because half the borrowers have higher debt loads and half have lower.
But in some cases, seeing both average and median debt levels is instructive. While the median shows the midway point of borrowers, the average better illustrates how high-debt borrowers are influencing overall debt loads in the state.
- Most borrowers: California (4.1 million)
- Fewest borrowers: Wyoming (57,600)
- Lowest Average Balance: South Dakota ($28,218)
- Lowest Median Balance: Wyoming ($14,634)
- Highest Average Balance: Maryland ($42,543)*
- Highest Median Balance: Georgia ($21,965)
- Smallest Gap Between Median and Average Balance: South Dakota (Median Debt Load is $15,865 while the average is $28,218 for a gap of $12,353)
- Largest Gap Between Median and Average Balance: Maryland (Median Debt Load is $42,543 while the average is $21,779 for a gap of $20,764) and California (Median Debt Load is $37,783 while the average is $17,019 for a gap of $20,764)
- Lowest Delinquency Rate: New Hampshire (4.8%)
- Highest Delinquency Rate: West Virginia (11%) *Washington D.C. is a district rather than a state, but its average student loan balance is a whopping $53,769 and its median student debt load is $26,530.
The Expected Impact Of Debt Forgiveness PlanRight now, debt loads are at all-time highs, but the forthcoming debt forgiveness plan is expected to lead to billions of dollars of debt relief. Individual borrowers are receiving forgiveness ranging from $10,000 for borrowers who didn’t receive Pell Grants to $20,000 for those who received Pell Grants.
To show the impact of this program, we estimated the proportion of estimated borrowers who are eligible for student loan forgiveness. To do this, we divided the estimated number of eligible borrowers from the Biden-Harris Administrations White House Statement, by the 2021 number of borrowers for The Federal Reserve Bank Of New York’s detailed student loan report.
- Highest Number of Borrowers Eligible For Loan Forgiveness: California (3.5 million)
- Lowest Number of Borrowers Eligible For Loan Forgiveness: Wyoming (31,400)
- Highest Proportion of Borrowers Eligible For Loan Forgiveness: Mississippi and New Mexico (100%)
- Lowest Proportion of Borrowers Eligible For Loan Forgiveness: North Dakota (71.93%)
- Highest Proportion of Borrowers Eligible For $20,000 In Loan Forgiveness: Mississippi (76.4%)
- Lowest Proportion of Borrowers Eligible For $20,000 In Loan Forgiveness: Massachusetts (38.3%) Student Loan Debt By State BreakdownYou can see a state by state breakdown of the student loan debt situation below.
| State | Total Borrowers | Average Debt | Median Debt | Percent Delinquent | Borrowers Eligible For Biden Loan Forgiveness | Borrowers Eligible For $20k Loan Forgiveness | | --- | --- | --- | --- | --- | --- | --- | | Alabama | 615,800 | $37,730 | $19,718 | 9.5% | 588,000 | 404,900 | | Alaska | 70,600 | $30,427 | $15,106 | 6.9% | 60,500 | 37,300 | | Arizona | 872,600 | $36,682 | $17,818 | 8.7% | 810,800 | 554,900 | | Arkansas | 374,900 | $31,851 | $17,303 | 9.0% | 365,600 | 269,000 | | California | 4,021,200 | $37,783 | $17,019 | 7.1% | 3,549,300 | 2,340,600 | | Colorado | 804,300 | $37,235 | $19,535 | 7.0% | 698,100 | 419,000 | | Connecticut | 542,800 | $36,391 | $19,561 | 6.3% | 454,200 | 238,200 | | Deleware | 137,300 | $39,238 | $19,636 | 6.8% | 116,900 | 68,000 | | District of Columbia | 125,000 | $53,769 | $26,530 | 7.8% | 105,600 | 60,300 | | Florida | 2,646,400 | $38,653 | $19,246 | 8.2% | 2,427,600 | 1,716,300 | | Georgia | 1,641,600 | $41,826 | $21,965 | 9.4% | 1,506,100 | 1,039,100 | | Hawaii | 123,600 | $34,608 | $17,709 | 7.7% | 111,500 | 65,700 | | Idaho | 219,400 | $34,196 | $18,339 | 6.5% | 201,400 | 144,900 | | Illinois | 1,713,900 | $37,869 | $19,391 | 6.7% | 1,486,600 | 863,600 | | Indiana | 924,000 | $32,045 | $17,642 | 9.4% | 856,400 | 555,500 | | Iowa | 465,500 | $29,845 | $16,750 | 7.6% | 408,700 | 248,900 | | Kansas | 395,200 | $33,954 | $18,670 | 7.7% | 360,900 | 225,500 | | Kentucky | 588,800 | $33,155 | $18,219 | 10.0% | 563,300 | 394,000 | | Louisiana | 644,600 | $34,839 | $17,588 | 9.3% | 608,100 | 435,200 | | Maine | 203,200 | $33,584 | $17,654 | 5.9% | 175,000 | 105,300 | | Maryland | 864,700 | $42,543 | $21,779 | 6.8% | 747,100 | 419,400 | | Massachusetts | 1,046,800 | $35,400 | $18,400 | 4.9% | 813,000 | 401,200 | | Michigan | 1,430,900 | $36,221 | $19,412 | 7.9% | 1,316,000 | 849,300 | | Minnesota | 902,500 | $33,161 | $18,645 | 5.8% | 729,700 | 416,300 | | Mississippi | 417,200 | $36,366 | $17,613 | 10.7% | 417,200 | 316,400 | | Missouri | 829,100 | $35,095 | $19,240 | 8.1% | 777,300 | 502,200 | | Montana | 132,900 | $32,459 | $16,924 | 5.6% | 120,400 | 78,600 | | Nebraska | 261,000 | $31,551 | $17,413 | 4.8% | 232,100 | 136,000 | | Nevada | 351,300 | $35,688 | $16,554 | 9.8% | 315,800 | 216,900 | | New Hampshire | 219,000 | $33,094 | $17,648 | 4.8% | 175,100 | 85,300 | | New Jersey | 1,339,800 | $37,003 | $19,253 | 5.8% | 1,082,900 | 590,300 | | New Mexico | 215,900 | $32,944 | $16,923 | 8.7% | 215,900 | 159,000 | | New York | 2,579,600 | $38,668 | $19,647 | 4.9% | 2,258,800 | 1,320,100 | | North Carolina | 1,340,500 | $37,511 | $20,643 | 8.0% | 1,190,500 | 785,500 | | North Dakota | 114,000 | $30,542 | $15,738 | 5.0% | 82,000 | 49,600 | | Ohio | 1,810,900 | $35,806 | $20,224 | 8.2% | 1,677,800 | 1,085,700 | | Oklahoma | 480,800 | $32,102 | $16,729 | 9.6% | 454,300 | 321,600 | | Oregon | 556,000 | $38,248 | $20,525 | 8.3% | 499,000 | 332,100 | | Pennsylvania | 2,032,400 | $35,349 | $19,757 | 7.2% | 1,717,300 | 988,800 | | Rhode Island | 153,200 | $33,838 | $17,014 | 6.1% | 133,900 | 75,300 | | South Carolina | 745,500 | $36,698 | $20,000 | 9.1% | 681,100 | 458,400 | | South Dakota | 135,600 | $28,218 | $15,865 | 5.3% | 109,100 | 65,100 | | Tennessee | 872,000 | $36,155 | $19,714 | 9.0% | 795,300 | 542,000 | | Texas | 3,759,300 | $32,998 | $16,985 | 8.5% | 3,323,200 | 2,306,700 | | Utah | 325,100 | $33,474 | $16,260 | 5.8% | 282,700 | 206,300 | | Vermont | 96,300 | $34,595 | $18,549 | 5.0% | 72,200 | 37,100 | | Virginia | 1,143,200 | $39,001 | $20,996 | 6.4% | 965,100 | 566,500 | | Washington | 816,900 | $34,846 | $17,781 | 6.3% | 697,600 | 423,800 | | West Virginia | 217,200 | $32,214 | $18,273 | 11.0% | 213,100 | 145,000 | | Wisconsin | 785,600 | $31,482 | $17,037 | 6.0% | 685,100 | 412,700 | | Wyoming | 57,600 | $30,581 | $14,634 | 6.6% | 49,600 | 31,400 |
For reference, borrowers eligible for $20,000 in student loan forgiveness are a sub-set of the borrowers eligible for Biden student loan forgiveness (either $10,000 or $20,000).
SourcesDaniel Mangrum, Joelle Scally, and Crystal Wang, “Three Key Facts from the Center for Microeconomic Data’s 2022 Student Loan Update,” Federal Reserve Bank of New York Liberty Street Economics, August 9, 2022, https://libertystreeteconomics.newyorkfed.org/2022/08/three-key-facts-from-the-center-for-microeconomic-datas-2022-student-loan-update.
“Economic Well-Being of U.S. Households in 2020 - May 2021”, Board of Governors of The Federal Reserve System, October 7, 2022, https://www.federalreserve.gov/publications/2021-economic-well-being-of-us-households-in-2020-student-loans.htm
The United States Government. (2022, September 20). “Fact sheet: The Biden-Harris administration's plan for student debt relief could benefit tens of millions of borrowers in all fifty states.” October 7, 2022, https://www.whitehouse.gov/briefing-room/statements-releases/2022/09/20/fact-sheet-the-biden-harris-administrations-plan-for-student-debt-relief-could-benefit-tens-of-millions-of-borrowers-in-all-fifty-states/
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Spring is in the air. Taxes are done (or getting close). You probably have a clear outlook on your financial picture for the next few months at least.
Barring any major life events, now’s the perfect time to start boosting your savings and really kicking your financial plan into overdrive.
Whether you’re looking to get out of debt, or are trying to maximize your investments, here are five tips to boost your savings that you probably haven’t thought of yet.
5 Ways To Boost Your Savings1. Use A Hybrid Checking/Savings Account2. Do A Teardown Of Your Recurring Monthly Expenses3. Increase Your 401k Contribution4. Maximize Your Cash Back For What You Already Do5. Start A Side HustleFinal Thoughts1. Use A Hybrid Checking/Savings AccountYou probably have a checking account right now. You might also have a savings account. But what if you could get all of the benefits of a savings account (i.e. higher interest) in a single checking account?
That’s what LendingClub Bank’s Rewards Checking Account is all about. It’s a checking account, but it has a high interest rate!
Now, you can get the benefits of a savings account with the convenience of a checking account. You don’t have to worry about having one account for transactions and another to earn interest.
Plus, the interest is nothing to scoff at!
This is a great way to boost your savings because you can earn more money than you could in a normal checking account.
Check out the LendingClub Rewards Checking Account here.
- Do A Teardown Of Your Recurring Monthly ExpensesOne of the biggest ways to boost your savings is to teardown your budget and assess your recurring monthly expenses. Your recurring expenses are typically the ones that eat away most of your extra money - and believe it or not - you likely have the most control over.
And one of the scary things about monthly recurring expenses is that most people never bother looking at them once they start.
Here are some common recurring expenses where you might be able to save a lot of money:
- Cell Phone: When was the last time you shopped around for your cell phone plan? Even considering options like a prepaid plan versus a contract plan. This could save you $50+ per month!
- Insurance:When was the last time you looked at your car insurance? Rates change all the time, and if you haven’t shopped around, you could be spending way more than you need to. You could also look at adding in renters insurance to see if you can get a net gain on your car insurance. Check out this simple tool to find the cheapest auto insurance.
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Cable TV: Let’s talk about cable. Why do you still have it? Cut your cable and save $100 or more per month! Plus, you can still watch all your favorite shows online. If you’ve already cut your cable - double check your subscriptions and ask yourself if you still watch what you’re paying for. If you still don’t know where to start with cutting your expenses, check out this video on how I’ve saved over $500 per month from my budget:
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Increase Your 401k ContributionOne of the easiest ways to boost your savings is to simply increase your 401k contribution. While it’s typically really easy to do (you just login to your employer’s website or tell your HR representative) - it can be an emotionally hard decision.
Remember, though, that your 401k contribution is pre-tax. So, when you boost your savings, you’ll also pay less in taxes. As such, the increase won’t reflect so big on your paycheck.
Another way to boost your savings is to simply put any raises or bonuses you receive at work into your 401k, up to the 401k contribution limits.
- Maximize Your Cash Back For What You Already DoNo matter how frugal you are, you’re already spending some money each month. Why not get rewards and cash back for the spending you already do. This can add up to $100s per year in extra money that you can use to achieve your financial goals.
Some of the best cash back credit cards allow you to get upwards of 2% cash back that can be deposited into a bank account or brokerage. You can then combine that with the LendingClub Rewards Checking account, and earn even more on that money.
The key to maximizing your cash back is to put as much as possible onto the card, and then pay off the balance in full each month like a debit card.
This does two things for you:
- By putting it all on the card, you maximize the cash back you can earn each month.
- By leaving your money in your bank account until you pay off the balance in full, you can potentially earn more interest on that money.
Check out some of the best cash back cards here, and see if it makes sense for you.
- Start A Side HustleFinally, one of my favorite ways to boost your savings is to simply earn more money. Earning more money is the best way to achieve your financial goal - whether that’s getting out of debt or by boosting your savings.
The reason is simple - while budgeting is important, you can only cut so much from your expenses. However, the power to earn is limitless - there is no upper limit to how much you can earn each month.
There are so many ways to earn extra money. You can start at your employer and simply focus on working extra hours or working overtime. You could get a second job and work nights and weekend.
You could take advantage of the gig economy and start driving for Uber or Lyft, delivering for Doordash, or even renting out a room in your house on AirBnB.
The bottom line is that there are so many ways to earn extra money. And you can use that extra money to boost your savings this year.
If you don’t have a great idea, check out this list of 50+ ways that you can earn money on the side.
Final ThoughtsNow’s the perfect time to really add momentum to your money. Look at these five strategies to boost your savings this year and take your personal finance game to the next level.
Let us know what strategies you love to boost your savings!
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Prepaid tuition plans are benefit plans, while 529 plans act like contribution plans. Find out which one might be best for your needs.
Saving for college can be hard for parents with just one child, but adding more can make it seem more difficult. Beyond simply finding the money to contribute, parents have to deal with questions about fairness, the uniqueness of each child, and more.
Many times these additional thoughts and concerns simply make parents not want to start the process of saving for college, even though they know they should.
Let’s stop the analysis paralysis today and look into how to practically save for college when you have multiple children.
Table of ContentsHow To Save For College Based On Mindset Handling The Fairness Issue What If One Of Them Doesn’t Want To Go To College?Where To Find The Money To SaveSaving For College For Multiple Children Is Possible How To Save For College Based On MindsetThere are two major mindsets on how to save for college – leverage a 529 savings account, or save your own money and pay for college out of pocket.
I find that when people have just one child, it’s really easy to see how a 529 college savings account could make sense. It’s a single account, it’s easy, and the one child can use it when they’re ready.
But once a second child (or more) comes into the mix, I see more and more parents wanting to avoid having individual accounts per child. They’re afraid fairness, or they don’t know what to do if one child doesn’t go to college. As such, they tend to divert to saving money in their own accounts versus a dedicated education savings account.
This can be a costly mistake, as we’ve covered the reasons a 529 plan is a great savings tool before. But let’s look at the issues, and maybe you’ll see how you can make a 529 plan work for multiple children.
Handling The Fairness IssueWhen it comes to saving for college for families with multiple children, the #1 issue I always hear brought up is fairness. Parents (usually mom) are worried about the fact that one child might have more saved for college than another child. They worry about how the child with less money in their account might feel.
It’s a valid concern. Just think – if the first-born child had a 529 account opened for them, and the account grew and performed well, they could accrue a lot more money in their account compared to their younger siblings.
And the math is there to support this – since stock market returns fluctuate every year, even if you contribute the same for each kid, the growth can create wildly different outcomes over 15-20 years. Wonder how much could be in a 529? Here's how much could be in a 529 by age.
So how do you handle it? The short answer is that you make it fair.
The long answer is you really have to remember how a 529 plan is structured. When you open a 529 college savings account, the account is actually owned by someone (typically the parents) for the benefit of someone else (typically the child). Since mom and dad still own the money in the account, and it’s for the benefit of the child, you simply have a conversation about how much you’re going to pay for school for your child, regardless of how much is in any child’s account.
Whoa, whoa – so you’re saying that the 529 college plan isn’t for the kid to go to school? No, that’s not what I’m saying at all – what I am saying is that the balance of the 529 plan should be one part of the conversation on how much the parents should help pay for college.
I see this typically play out in two ways:
- Parents give a set amount per year (say, we can contribute $5,000 per year to your college tuition)
- Parents offer to cover the cost at a specific school (say, we can cover the tuition at an in-state school)
The money saved in the 529 can play a huge role in funding what they parents agree to – and they should do the same for each child, regardless of how much money is in each of their 529 plans.
So, if Child A has $20,000 in their 529 plan, and Child B has $18,000 in their 529 plan, and the parents offered to help with $5,000 per year for 4 years – they saved enough for Child A, and they should come up with $2,000 for Child B.
I’ve found this strategy to be fair, but like anything money related, having conversations about who’s paying for college could be tough. Parents need to be honest with their children about what they can afford to pay, and what they were planning to do. The earlier the better – so that everyone involved has clear expectations.
What If One Of Them Doesn’t Want To Go To College?Another common scenario when saving for college for multiple children is that each child is unique. Even harder, you won’t really know who they are until they are older. If you start saving when they are really young, and have a bunch saved, what do you do when one of them doesn’t want to go to college?
There are variations on this as well – what if one of your children becomes a star athlete and gets a free ride? Or what if they really just want to go to vocational school and you saved way too much for what they need?
Well, there are a lot of options here, and while none are perfect, it’s not like you “lose” the money you saved.
When a child isn’t going to use their 529 money, you have a couple of options:
- You can transfer the 529 to another child
- You can withdraw the money
- You can wait and see
With a 529 college savings plan, you can change the beneficiary of the account to be used for another child (or anyone really). If one child isn’t going to college, for whatever reason, you can simply use the money to pay for college for someone else. That might not sit right with some people, but it’s a viable option. If you’re considering this path, I highly recommend getting the buy in of the child first.
You can also always withdraw the money. If you’re pulling out the money and not using it for a qualified education expense, you will pay a 10% penalty on top of taxes on the gains. However, if you just want the money out, it can make sense to do this.
Finally, you can just wait and see. I prefer this choice, because you never know how life will pan out. Maybe your child skipped college to join the military, but 8-10 years later, wants to finally go back to school. Or maybe you and your children agree to use the 529 for grandchildren way in the future. The big thing here is, there is no rush. You can simply let the money sit in the 529 until you make a decision on how you want to proceed.
Where To Find The Money To SaveThe final major challenge I hear from parents too often is – “how can I even save for college for one, let alone two/three/etc”. Look, finding money to save for college is tough. That’s why I highly recommend starting small when saving for college. You really don’t need to find huge amounts to get started.
My single favorite strategy for saving for college is asking friends and family to provide a contribution to the 529 in lieu of gifts for birthdays and Christmas. Parents love to give toys and junk because they are a little selfish – they want to see the kids happy with the gift they gave them.
Our rule is that grandparents (and other family members) are only allowed to give one toy or gift. The rest should go to the child’s 529. That way, grandparents can still get some joy of the child opening a gift, but they are also helping save for college down the road. Plus, every parent realizes that their child doesn’t need 10-15 new toys every birthday and holiday. Most of that goes to waste.
Saving For College For Multiple Children Is PossibleThe bottom line is that saving for college for multiple children can be done, and it still makes sense to use a 529. Setup an account for each child at a 529 plan like California's ScholarShare, contribute what you’re able to, and be fair about it when it comes to actually paying for college.
Yes, every child is different, and every situation is different. But that doesn’t change the fact that you should start small and begin saving for college as soon as possible – for each of your children.
If you are a parent of multiple children do you have any creative tips for saving for college?
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Feeling the pinch when it comes to saving for college? If so here are practical tips on how to save for college for multiple children.
Have you ever wondered how much the government knows about your financial life? It may surprise you to learn that the government can know almost nothing or nearly everything about you.
If you don't earn interest on your bank account and rarely use cash, the government may not know where you bank at all. On the other hand, if you frequently deposit large sums of cash, the United States government may keep detailed tabs on your activity.
In this article, we explain what banks are required to report to the United States government, and when bank reporting falls into a gray zone.
Table of ContentsIRS ReportingKnow Your Customer LawsReport Suspicious Financial ActivityReport All Financial Transactions Greater Than $10,000If You File Too Many CTRsFinal ThoughtsIRS ReportingBy law, banks and other financial institutions must report certain information to the Internal Revenue Service (IRS). For example, banks must tell the IRS how much you earned in dividends or interest from your activity with the bank.
Each year, banks issue a 1099-INT to you if you earned more than $10 in interest from the bank, and that same form is filed with the IRS at tax time. You should receive a 1099-INT for earning money in a high-yield savings account, and a 1099-DIV if for money earned from dividends. Don’t ignore either one of these forms.
Make sure you include all of your 1099 income when you file your taxes. Most banks issue electronic 1099 files if you missed the form elsewhere.
Know Your Customer LawsKnow Your Customer (KYC) laws are a set of regulations that require banks to verify their customers' identities and report suspicious activities to either the Financial Crimes Enforcement Network (FinCEN). KYC laws apply to individuals and businesses and are part of broader Anti-Money Laundering (AML) regulations that are designed to identify and prevent criminal abuse of the financial system.
KYC laws apply not only to banks but to all financial institutions, including brokerages, crypto brokerages, car dealerships, and real estate closing or escrow firms.
When you open a bank account (or a brokerage account) in the U.S., you will always be asked for:
- Your name
- Date of birth
- Physical address (not a P.O. Box)
- Tax ID Number (usually a Social Security Number for individuals)
Banks and other financial institutions have a policy in place for verifying the identity of a person before that person can do business with the bank. Many mobile-first apps ask you to take a picture of yourself and your government-issued ID to verify your identity.
KYC laws do not necessarily have a reporting requirement, for example, your bank does not have to report that you have a bank account with them. Instead, they are designed to force banks to accurately assess risk for all their customers.
Did You Know? You also have a "banking score" along with a credit score. Your banking score is a record kept by third party companies about your banking activity. If you bounce checks or have other banking issues, you could damage your banking score - and as a result, other banks won't allow you to bank with them.
Report Suspicious Financial ActivityWhile banks do not necessarily have to report who banks with them, they must monitor customer activity and report suspicious financial activity to FinCEN.
Regulators largely leave the definition of "suspicious financial activity" to banks. Banks have to create training programs for their employees and ensure that bank employees can identify suspicious activity and know how to report it to FinCEN.
Suspicious activity could include anything that looks like a person or business is funding terrorism, evading taxes, or laundering money (using the financial system to legitimize funds earned through illegal means such as drug sales).
Banks establish internal protocols to ensure that employees can recognize red flags and report on these transactions. This proactive monitoring is part of FinCEN's Bank Secrecy Act (BSA). This ensures that banks keep a paper trail that regulators could use to investigate the suspicious financial activity.
Report All Financial Transactions Greater Than $10,000While banks have a lot of latitude in identifying and reporting suspicious financial activity, FinCEN has very clear rules around currency transactions. Currency transactions are any that involve cash (like dollar bills) or other physical paper currency.
If you withdraw or deposit more than $10,000 to your bank account, the bank is required to file a Currency Transaction Report (CTR) that includes the following when you make a large transaction:
- Name
- Social Security Number
- Date of Birth
- Street address (or Account Number and Tax ID Number for business accounts) CTRs must be filed within 15 days of the transaction for paper reports or 25 days for other report types. The goal of CTRs is to identify potential money laundering or terrorism funding schemes easily.
Note: This also applies to using cash as stores! If you try to spend $10,000 in cash at a Target or Wal-Mart, those stores will also need to file a CTR.
If You File Too Many CTRsBanks may change the risk profile of a customer after doing business with them for a year. This change exempts some customers from filing many CTRs, such as a bar or restaurant that deposits a lot of cash or construction companies that issue payroll with cash. Banks may develop these exceptions to reduce paperwork.
However, banks will still report suspicious financial activity associated with these accounts, even if they don't report every single cash transaction. If a local, state, or Federal law enforcement agency has a warrant for records from a bank, the bank must comply with these requests.
The paper trails that banks develop through Know Your Customer Laws or as part of the Banking Secrecy Act may be given to appropriate law enforcement agencies if you are under investigation.
Final ThoughtsUsing cash is not illegal, but banks have to report large cash transactions. If you earn cash and choose to deposit it infrequently, you may deposit $10,000 or more at a time. The bank will file a CTR and may ask you about the source of those funds.
Depositing large sums of cash does not automatically get you in trouble as long as you're not laundering money and can provide a paper trail of the source of your cash.
Keeping good records is especially important if you earn cash through your side hustle and need to file quarterly taxes.
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We explain what banks are required to report to the government about your information and when bank reporting falls into a gray zone.
Everything is relative when it comes to financial success. When you’re a high school graduate, the average individual probably isn’t even thinking about money. But the above-average high school graduate… he or she is thinking about what it takes to springboard success to the next level.
Did you know that the average net worth for today’s high school graduates (and pretty much all millennials) is negative? Yes, negative…
But the above average high school graduate - looking onto college and a successful career - doesn’t want to be in the negative. Here’s five money tips for the graduate that wants to be in the top 1%.
Table of Contents1. Know All The Pie Slices For Paying For College2. When It Comes To Borrowing For College, Borrow Smart3. Working Through College Is A Good Thing4. Being Financially Organized Is Key5. Start Investing To Maximize Time In The MarketFinal Thoughts1. Know All The Pie Slices For Paying For CollegeThe average high school graduate going to college will look at their financial aid letter and accept it and take on student loans for the rest of the bill. The above average student realizes that paying for college is like a pie - and there are a lot of different “slices” of money that can be used to pay for college.
We're talking about:
- Your own savings as a student
- Your own earnings as a student
- Your parent's savings to pay for college
- Your parent's current earnings
- Scholarships
- Grants
- Work study and similar aid
- Federal student loans
- Private student loans A lot of average students dismiss a lot of options on this list, such as scholarships and grants. But the above average high school graduate knows these are a gold mine for paying for college.
For example, Ramit Sethi at I Will Teach You To Be Rich shares how he received over $100,000 in scholarships to pay for college.
But too many people don’t take advantage. For our Side Hustlin’ Student Scholarship, we only receive about 100 entries per year. And about 70% of people who enter don’t follow the directions and get disqualified immediately. That leaves only about 30 people trying for a $2,500 scholarship. That’s great odds! And, speaking to others who run scholarships, the statistics are very similar.
- When It Comes To Borrowing For College, Borrow SmartMost high school graduates going to college - even the above average ones - will need to borrow money via student loans. 54.1% of students take on student loans to pay for college, according to Education Data.
But there’s a big difference between average students and above average students when it comes to borrowing. The above average high school graduates looking to pay for college borrow smart.
That means, they’ve calculated how much it will cost to go to school, they know what type of job they want after graduation and know how much it pays, and can see a clear path to their return on investment.
A good rule of thumb for borrowing smart is to never borrow more than you expect to earn in your first year after graduation. That helps you keep borrowing costs down to a level you can likely manage and be financially successful.
When you do borrow, maximize Federal loans first. Once you maximize those, you can look at private loans. Look for private loan options that offer flexible repayment term and interest rate discount opportunities.
- Working Through College Is A Good ThingThe average high school graduate thinks that they need to focus on school and not do work - “that would be too much”. They might get overwhelmed with the idea of studying and working, or simply think they should focus all their time on school and not a job.
But the above average high school graduate knows better. Working through college is one of the best things you can do for your future career.
Coming from someone who previously hired a lot of college graduates, I can tell you first hand that there is a significant difference in individuals who worked through college versus those who didn’t. Those who didn’t struggled more in interviews, rarely were hired by my organization, and when they were, struggled to be successful.
The above average graduate who wants to work during college will benefit from gaining stronger communication skills, workplace problem solving skills, and other soft skills that you simply cannot learn in the classroom.
What that does is not only allow you to earn more in school, but it allows you to be more valuable and earn more after graduation.
- Being Financially Organized Is KeyOne of the biggest reasons people fail with money is lack of organization. They don’t know what’s coming in, what’s going out, how much they have, and they don’t have a system in place to track it.
The above average high school graduate is diligent with being financially organized. He or she tracks her money, whether by using a free online tool like Mint or Empower, or by maintaining a journal or spreadsheet.
By being financially organized, you can start to get a clear picture of your income, expenses, savings, and student loan debt.
Financial organization is what sets the above average graduate apart from average.
- Start Investing To Maximize Time In The MarketFinally, the above average high school graduate is ready to start investing in college to maximize the time their money is in the market. In fact, the above average high school graduate may have already started investing in high school.
I started investing when I was in high school, and continued to invest more and more throughout college. This allowed me to start growing wealth early, which put me on the path to financial independence much sooner than most people even understood what was going on with their money (see being financially organized above).
Maybe you have some graduation money that you can invest? Maybe you are working and want to start investing with that money?
No matter where you’re finding the extra cash, the above average graduate will be putting their money to work for them, not buying random items that lose value over time.
Final ThoughtsGraduating high school is a big step forward that comes with a lot of changes. For those looking to be “above average”, there are simple steps you can take at every turn that will allow you to set yourself up for a comfortable financial future.
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Here are our favorite money tips for the above average high school graduate - the person that wants to be in the 1% as fast as possible.
Private student loans are always a touchy subject. There’s a camp of people that think private student loans are terrible tools and that nobody should ever take them out to pay for college. On the other side, there are banks and refinancing companies that promote private student loans as a lower-cost alternative to Federal student loans.
As a parent or potential borrower, which is it? It’s a tough question and there is no right or wrong answer. Scratch that – there are some wrong answers and situations when private student loans never make sense. However, there are also scenarios where private student loans do make sense.
We’re going to break down everything that you need to know about how private student loans work to pay for college. From how they work, to what you need to know about repayment, we cover it all.
Now’s the time that every student and parent dreads – having to write that check for college. It’s expensive. There’s no denying that. And when it comes to the discussion about how to pay for school, inevitably the question of taking out private student loans comes up.
If you don't know where to start, Federal or private loans, check out this guide on finding the best student loan rates.
Table of ContentsHow Private Student Loans WorkKey Terms And "Need To Knows"Other Benefits Of Private Student LoansHow To Qualify For A Private Student LoanWhen To Consider Private Student Loans For CollegeA Scenario Where Private Student Loans Makes SenseHow To Shop For A Private Student LoanRepayment Of Private Student LoansConclusionHow Private Student Loans WorkPrivate student loans are loans that are used to pay for education and the related expenses. They are issued by banks, companies, and credit unions – not the government. Private student loans are more akin to a car loan or mortgage than any other type of debt.
That might sound shocking, but when you think about it, it makes sense. When you take out a car loan, and you fail to pay it, the bank repossesses your car. If you buy a house with a mortgage and don’t make your payments, the bank forecloses on your house.
Well, a private student loan is backed by your earnings – the collateral is what you’re going to make in the future. The bank is willing to lend you this money for college, because statistically a college degree boosts income potential. As such, you have to realize that if you fail to pay your private student loans, your lender can garnish your wages and more.
However, what makes student loans different from other types of debt is that, unlike credit cards or car loans, they typically cannot be discharged in bankruptcy. As long as you have the potential to earn income and repay them, a bankruptcy judge will not wipe out your student loan debt.
Key Terms And "Need To Knows"Private student loans are loans, and you’re borrowing this money and will have to repay it. As such, you need to know exactly what type of agreement you’re getting into. When looking at a private student loan, here are the key terms that you need to look at.
Interest Rate: The interest rate is the rate that interest will accrue on your loan. The lower the interest rate, the less you’ll pay “extra” to borrow this money. For example, if you’re interest rate is 1% and you borrow $1,000, you’ll pay $10 per year to borrow that money (this is an oversimplification, but it works). The interest rate is one of the primary factors you should consider when taking out a student loan. The lowest interest rate will typically always be the best loan.
Term: The term is the length of the loan. Many private loans have standards terms, such as 10, 15, or 20 years. Different lenders offer different options. Along with your interest rate, the term really determines how much you’ll pay monthly. The longer the loan, typically the lower your monthly payments will be.
Fees: Some loans charge fees to process the loan. You really need to read this carefully – they may be called origination fees, processing fees, document fees, and more. Many of the best lenders charge no fees to get a private student loan, so if you see fees, you probably want to run away.
Cosigner: Some private loans will require a cosigner to qualify for the best interest rate. The reason for this is because most lenders rely on traditional credit score models for lending – such as credit history and credit score. As someone going to college, you likely don’t have much credit history. Lenders may then ask you to have someone cosign the loan. Cosigning means that this person is just as responsible as you for repaying the debt. If you don’t pay, the lender can go after the cosigner to get them to pay.
As such, you really need to be careful when getting a cosigner, and realize that many people are leery of being cosigners for this reason. Some loans do allow for cosigner release, typically after the borrower has made a set number of payments on time (typically 3 years or more).
Related: There are No-Cosigner Private Student Loans but they are limited in their offerings.
Other Benefits Of Private Student LoansMany lenders offer two types of benefits for their student loans. I’ll break them down into repayment benefits and other benefits.
For repayment benefits, you can look for lenders that offer discounts for setting up automatic payments or paperless statements. Some lenders now give an interest rate reduction of around 0.25% simply for setting up automatic payments.
Some newer lenders are now offering other benefits, such as job placement help if you lose your job, and more. These are just added perks, and really shouldn’t factor into your decision about whether to get private student loans.
How To Qualify For A Private Student LoanNow that you know the key terms and how private student loans work, you may be wondering how you qualify for a loan. Since private student loans operate very similarly to other types of loans, the process of qualifying is similar as well.
While every bank and lender uses different standards, most require borrowers to:
- Have a good credit score
- Have a cosigner
The credit score is key. Having a great credit score typically means you’ll easily qualify for a private student loan. If your credit score is less than 700, you’re going to run into problems. If your credit score is less than 650, you might be out of luck.
We recommend using Credit Karma as a FREE tool to check your credit score – go do it now.
The second factor, closely related to your credit score, is having a cosigner for your student loan. If you’re close to meeting the bank’s criteria for a loan, they might ask you to have a cosigner. This is typically a parent, but it can be anyone really. I would say the majority of student loans are processed with a cosigner. Just remember that a cosigner is just as liable for the loan as you are.
When To Consider Private Student Loans For CollegeSo, now that you know all about how a private student loan works, you probably want to know if you should even be considering it. The answer is maybe.
Private loans can serve a great purpose is helping pay the cost of school if you can’t afford it. But before you jump onto the bandwagon, you must do two things.
First, you must always do a return-on-investment calculation on whether the cost of college is worth it. It’s sad to think about, but you’re really getting this education to boost your earnings, and it if doesn’t do that, you wasted your money. Plus, you will inevitably need this higher income to pay back your loans!
When doing the calculation, I like to keep it simple – figure out the career you want, look up the starting salary of it, and never borrower more than the starting salary of the job you want.
For example, if you want to be a teacher, that’s awesome. But you shouldn’t borrow more than $35,000, because that’s the average teachers make after graduation.
If you want to be an engineer, you shouldn’t borrow more than $64,000, because that’s the starting salary of an engineer today.
Second, you should exhaust all of your Federal borrowing options first. Federal student loans are amazing tools to pay for college. They typically offer better interest rates, repayment plans, and forgiveness options.
We break down the full amounts you can borrow and the types of loans offered in our Definitive Guide To Student Loan Debt. Since this article is about private loans, we’re not going to go into too much depth on Federal student loans. Just realize that you should be maxing these out first before considering a private student loan.
A Scenario Where Private Student Loans Makes SenseNow that you when to consider a private student loan, I want to share with you the most common scenario when private student loans make sense.
It’s the scenario of going to medical school. We’ve talked about student loan options for doctors before, but let’s look at the scenario for private loans.
Going to medical school is expensive – doctors can expect to spend $180,000 or more on school. But doctors can also make a lot of money after graduation.
Let’s look at our rules. Rule number one is that you should consider the after graduation salary. For doctors, after they are residents, they can expect to earn $200,000 or more. That’s a great salary and means they can handle a large amount of student loan debt.
What about Federal loans? Well, doctors should definitely max out their Federal student loans. The trouble is, that Federal loans let you borrow a maximum of $20,500 pear year – and doctors may need more.
In this scenario, private student loans make a lot of sense for filling in the gap between tuition and what Federal loans go towards. Furthermore, there are lenders that specialize in lending to doctors and lawyers, because of the uniqueness of their situations.
How To Shop For A Private Student LoanIf you’ve decided that private student loans are right for you, it’s essential that you shop around for the best loan.
When shopping for a loan, the interest rate and term should be the #1 and #2 priorities.
I suggest that you start in two places when it comes to shopping for a private student loan. First, check with your school’s financial aid office. Some schools have preferred lenders, which offer discounted interest rates and terms for their students. This can provide great savings.
Then, look at our guide: The Best Private Student Loans >>
Also, you should look at a comparison engine like Credible. Credible will shop multiple lenders all at once, and provide you with the best interest rate and fees that meet your situation. You can also compare all of the major student loan lenders via our student loan tool.
The key here is to shop around. Don’t just do one loan because someone told you to. Find the best loan because it can be difficult to change this later.
Repayment Of Private Student LoansIf you have private student loans, you have to understand how repaying them works. We’ve already discussed the fundamentals a little bit earlier, but let’s look into what to do when it comes to repaying your private student loans.
Unlike Federal loans, there aren’t many options for repaying your private loans. If you cannot afford your private student loan payments, your only option is to try and refinance the loan into a longer term so that your payments go down.
Some private lenders offer deferments based on your situation, but this is extremely rare for private student loans.
ConclusionPrivate student loans should be looked at like any other financial tool. They do serve a purpose, but many times they are used the wrong way.
As such, if you’re considering private student loans, really make sure that you are following the steps we listed above. Get Federal loans first, then private loans. Always make sure that you are shopping around to get the best interest rate and fees.
Remember, you can comparison shop a bunch of different lenders at once using a service like Credible.
Do you have private student loans? Are you considering them?
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Considering a private loan? Before you sign, here's everything you need to know about how private student loans for college work.
If you are receiving financial aid, there are certain conditions you need to meet in order to continue receiving your aid. In many cases, one of those conditions is that you need to be progressing towards graduation and a degree.
The exact definition of Satisfactory Academic Progress (SAP) is set by each individual school. Typically, you need to maintain at least a 2.0 grade point average and take enough credit hours to be on track to graduate within 150% of the scheduled time frame for your degree.
Table of ContentsWhat Is Satisfactory Academic Progress?How Satisfactory Academic Progress Is Used For Financial AidHow to Appeal a Satisfactory Academic Progress DecisionLoopholes To Get Around Satisfactory Academic ProgressThe Bottom LineWhat Is Satisfactory Academic Progress?Satisfactory Academic Progress is a measure of whether or not you are making sufficient progress towards a degree. Federal financial aid requires that you make progress towards your degree.
Each school will set its own standards for what qualifies as Satisfactory Academic Progress, so if you're not sure what that looks like at your school, you should reach out to your school's financial aid office.
A school's Satisfactory Academic Progress policy will usually cover some or all of the following items, including:
- What GPA you'll need to maintain (at least a C- or 2.0 average is common)
- How many credits you need to be taking, based on your degree (for example, if you don't want to graduate in three years, but the amount you need to stay on track to finish in six, if you're taking a four-year degree)
- How often they evaluate your progress and what will happen if you fail
- What you can do to appeal your school's decision if you are not making satisfactory academic progress How Satisfactory Academic Progress Is Used For Financial AidBecause Satisfactory Academic Progress is a requirement for federal financial aid, nearly all schools will monitor this as part of their financial aid office. Schools may measure each student once or twice a year, using the most up-to-date information as of the measurement period. If your school determines you are not making sufficient progress, you may receive a financial aid warning or possibly lose your financial aid.
While satisfactory academic progress is typically used for federal financial aid products, there are some private student loans that also have an academic progress requirement. If you fall below your school's satisfactory progress threshold, it's possible you will not qualify for private loans as well.
If you're not sure how progress is measured or required for your loans, contact your loan provider or loan servicer.
How to Appeal a Satisfactory Academic Progress DecisionIf you are not making sufficient progress towards a degree, you may be able to appeal your school's decision. Typically, you can appeal the a Satisfactory Academic Progress decision for reasons like:
- A significant illness or injury
- Death of an immediate member of your family
- Other unusual or special circumstances
If you feel one of these applies to your specific situation, you need to contact your school's financial aid office in writing. While many colleges and universities allow appeals, not all do. Make sure you understand your school's academic progress policy before it becomes an issue.
Loopholes To Get Around Satisfactory Academic ProgressIf you find yourself in the situation where you are at risk of losing your financial aid due to not making satisfactory academic progress, you may have a few loopholes that you can take advantage of.
One can be changing majors—your school's policy may allow for additional time if you have switched. Another possibility might be to enroll in a different school.
While these may sound like attractive options, they should only be used as a last resort. Colleges or universities may limit how often you can change majors in order to limit your ability to use this loophole. You may not be able or willing to change colleges, since that could represent a fairly significant overhaul and change to your life.
The Bottom LineIf you are receiving federal financial aid, you are required to demonstrate satisfactory academic progress towards a degree.
The exact standards for satisfactory academic progress are set by each school, so if you're not sure how your university measures this, contact the financial aid office. They can help you understand this in detail and if you are at danger of falling below the threshold of satisfactory academic progress.
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Satisfactory Academic Progress is a measure of making sufficient progress towards a degree and matters for financial aid. Learn more.
Being a college student may require you to figure out ways to pay for school without taking on a huge amount of debt. Perhaps it means working part-time or longer hours in the summer. It may entail researching for scholarships and grants. Some students use the GI Bill to cover the costs after deployment.
It's a challenge to cover your tuition and living expenses when you’re a college student on a budget. According to the Education Data Initiative, the average public university loan student borrowed $31,410 to complete their degree.
Using federal loans to pay for a university education may seem like the only answer, but those loans usually have to be repaid. Plus, many people (including international students and people with DACA status) aren’t eligible to fill out the FAFSA.
Table of ContentsBest Student Loan AlternativesGrantsScholarshipsWork During Your DegreeIncome Share AgreementsEmployer Paid TuitionSavings And 529 PlanBe Careful With Private LoansStudent Loan Alternatives To AvoidCredit CardsTitle Loans And Payday LoansTake Steps To Minimize Your Student Loan DebtBest Student Loan AlternativesIf you’re trying to find alternatives to student loans, these are the best places to start.
GrantsGrants are a form of financial aid that doesn’t need to be repaid. One of the most famous grants is the Pell Grant which is a grant issued to people on the basis of financial need.
There are several Federal Grants available for qualified individuals who complete the FAFSA. You might also qualify for one of the myriad grants designed to help different groups through college.
There are also many state-specific grants. You can find our list by selecting your state here: Financial Aid Programs By State.
ScholarshipsLike grants, scholarships don’t need to be repaid. Many schools offer both merit and need-based scholarships. But you don’t have to limit your search for scholarships to those offered by your school.
Spending a few hours per week researching and applying for scholarships can yield hundreds or thousands of dollars to help you pay for school.
And don’t worry if you’re not an all-star athlete or once-in-a-generation genius. You can find scholarships for everything from civic engagement to having high bowling scores.
It’s valuable to view applying for scholarships as a part time job. An applicant who spends 20 hours applying for scholarships and wins $1000 in scholarships has an effective rate of $50 per hour. Scholarships for smaller amounts, and those that require more work offer the greatest chance for return on invested time since these scholarships have smaller applicant pools. Students as young as 13 up to those entering their senior year of college can win new scholarships to offset university expenses.
Related: Best Scholarship Search Websites
Work During Your DegreeEven before Covid-19 hit, many universities catered to working adults who needed to earn their degree while working a full-time job. Some of these online programs, such as the one at Western Governors University, are specifically designed to be both affordable and flexible.
In a survey we conducted at The College Investor, 75% of students would still choose to work, even if they didn’t have to. Work seems to be an integral part of college life. So if you can hold down a full-time job, and live frugally, you can minimize debt during your degree and escape debt faster once you graduate.
There are also official "work study" jobs where you can earn financial aid as a result of your working. Check out our full guide to work study.
Income Share AgreementsIncome Share Agreements (ISA) are often used as a way to fund coding boot camps or other non-accredited job programs. Under an ISA, you’ll pay a portion of your income to the institution for a limited period of time. Once that time is up, your “loan” is considered complete.
The ISA is a great alternative to a private loan because there is a cap on how much it will affect your cash flow. Unfortunately, you may end up overpaying for your education because the share of your income remains stable no matter how much you earn.
Note, these should only be used in lieu of private student loans. Federal student loans are still a better option compared to income share agreements.
Employer Paid TuitionMany large employers will cover some or all of your college or graduate school costs if you continue to work for the organization during your education.
Many employer sponsorship programs require you to keep a certain GPA or to pay for your classes and submit a reimbursement request.
Make sure that you understand the full program before you enroll in classes. You don’t want to be left covering thousands in tuition costs that you weren’t expecting.
Savings And 529 PlanSaving several thousand dollars in high school can help you cover quite a few expenses during college. Having money in the bank may allow you to cover transportation costs so you can take on a college internship. It can also help you avoid credit card debt when your textbook costs $300 and isn’t available online.
Here are the best online savings for students.
On top of your own savings, your parents or grandparents may have set aside some money for you in a 529 plan or another savings account.
Be Careful With Private LoansOur first choice for student loans is Federal Student Loans. Federal Student Loans offer income-driven repayment plans and in many cases pathways to loan cancellation or loan forgiveness. Of course, you’ll want to minimize your loans by living frugally and hustling when you can.
If you aren’t eligible for Federal Student Loans, carefully consider private loans. The interest rates on private loans are often quite high (in excess of 10%), and they usually don’t have income-driven repayment plans. That means your post-college payments can be very high, even if your income is modest.
Make sure to consider how much you realistically expect to earn after college before you take on these loans. If money will be too tight, you may want to delay college to earn and save more money.
Student Loan Alternatives To AvoidGetting your degree is important, and it can unlock higher-paying jobs and better professional opportunities. But a degree isn’t something to pursue at all costs. These higher-interest debts aren’t worth taking on.
Credit CardsCredit cards are an incredible financial tool, and even as a college student, you may qualify for a credit card with a limit of several thousand dollars. You might be tempted to use that credit line to pay for living expenses, books, and other non-tuition-related expenses. But people who are paying interest on their credit cards, pay an average of 20.4% APR annually.
It’s easy to get sucked into using credit cards in college only to find yourself stuck in a lot of debt. Avoid using credit cards, and if you do, try to pay it off in full to avoid high interest rates.
Title Loans And Payday LoansA title loan or a payday loan will never get you thousands of dollars to cover your tuition. But they may cover an inexpensive computer or a few books until you get paid. The trouble with these short-term loans is the obscenely high-interest rates. They usually carry rates in excess of 100% annually.
With the interest rates and fees, most people can't repay the loan in full after two weeks. People are stuck renewing their loan month after month. Even working overtime may not be enough to pay off the loan in full.
Avoid title and payday loans during your college years. It may be better to work more and slow down earning your degree than to get trapped in these high-cost loans.
Take Steps To Minimize Your Student Loan DebtIn some cases, a debt-free degree could be a reality. Choosing a low-cost program, earning money during school, and using your own and your parents' savings could allow you to avoid debt altogether.
But in other cases, avoiding student loan debt completely isn’t possible. That doesn’t mean you should throw up your hands and sign up for the maximum loans.
Combining some of these alternatives to student loans, living frugally, and choosing lower-cost programs can help you minimize student loan debt.
What steps will you take to minimize your student loans today so you can enjoy debt freedom sooner?
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Paying for college with loans may seem like the only answer but there are plenty of alternatives. These are the best places to start.
If you’re one of the 80% of taxpayers who will be receiving a tax refund this year, chances are you’re debating what to do with the money.
While you can probably imagine plenty of places to put your prized refund check today, you might not be thrilled with the choice tomorrow.
Rather than spend all of your money frivolously, why not use it to boost your bottom line?
Invest that money in one of the ideas listed below, and you can guarantee your future self with thank you. You may even have some fun along the way.
Here are some of the best ways to put your tax refund to good use this year:
How To Spend Your Tax Refund1. Pay Off High Interest Debt2. Build Your Emergency Fund3. Open A High-Yield Savings Account4. Max Out Your Roth IRA5. Start Investing With A Robo-Advisor6. Apply Your Refund To Your Future Tax Bill7. Make A Principal-Only Extra Mortgage Payment8. Invest In Your Home9. Invest In Yourself10. Give It Away11. Have (a bit of) Fun1. Pay Off High Interest DebtWhile it’s certainly not the most exciting option on this list, if you have credit card debt, paying it down (or off) when you get your tax return is one of the best financial moves you can make.
Free yourself from the shackles of high interest charges and kick at least a portion of that debt to the curb. It can also help boost your credit score, opening doors and securing your financial future.
It’s been said that action breeds confidence and courage—taking this first step towards knocking down your debt will help you move in a positive financial direction.
- Build Your Emergency FundYour car broke down; your child got sick; the neighbor kids busted your window while playing baseball. Accidents happen all of the time so make sure you’re prepared for them!
You may not be able to plan exactly for every expense that will pop up, but you can expect the unexpected and prepare yourself for the worst.
You’d be amazed at how free you’ll feel once you have the peace of mind of knowing you’re ready for the random strikes that life throws your way.
That's why using your tax refund to fill an emergency fund is a smart move!
- Open A High-Yield Savings AccountIf you are unsure of exactly how to spend your tax refund or you’d just like to stow it away for safekeeping, an online savings account is the way to go.
Online banks are able to offer the most competitive rates out there because they don’t have branches to support. For that reason, you’ll find far higher interest rates with an online bank than a traditional one.
Whether you use the account to house your emergency fund, or just to establish some solid financial habits by putting money away in savings, you should absolutely consider online savings.
Our top pick for online saving is CIT Bank, where you can get high interest and a with a low minimum deposit.
Open an account with CIT Bank>>
- Max Out Your Roth IRAThe value of a Roth IRA cannot be emphasized enough. A Roth IRA is funded with post-tax dollars, meaning your distributions won’t be taxed as long as you follow the rules. You also won’t be penalized for withdrawals.
Considering the amazing benefits Roth IRAs provide, if you qualify for one you should try your best to max it out every year.
However, even small amounts can do wonders over the long-term, so take that tax refund check and send over whatever you can!
Our top pick for a Roth IRA is M1 Finance, where you can invest commission free!
Open an account with M1 Finance >>
- Start Investing With A Robo-AdvisorIf your debts are paid and your emergency fund is already stocked, have some fun with your refund by investing it with an online platform.
Whether you’re new to the investing game or have some trades under your belt, a robo-advisor can offer you simplified, affordable trading and resources.
Wealthfront is one of our top picks, as it offers dozens of customized portfolios and does all the work for you.
Wealthfront then automates your investments, rebalancing your allocations for you.
Open an account at Wealthfront >>
- Apply Your Refund To Your Future Tax BillAre you self-employed? A freelance or contract worker? If you’re required to make estimated quarterly tax payments, you can apply your refund directly to those future obligations.
Doing so now will help to alleviate tax-related stress in the future. It will also help to free up future income for other financial goals.
Rather than letting these expenses catch you off guard, you can pay for them with your tax refund, relieving the financial burden and administrative task of working those costs into your budget down the line.
- Make A Principal-Only Extra Mortgage PaymentIf saving thousands of dollars in interest appeals to you, making additional payments to your mortgage, especially those that are principal-only, is the easiest way to do so other than paying off credit card debt.
Check to make sure your mortgage company doesn’t charge a pre-payment penalty. If they don’t, send that check (or make that online payment) today.
Every little bit of extra money you spend paying down the principal helps, potentially cutting months or even years off the length of your mortgage. Your tax refund is a great place to start expediting your mortgage repayment.
- Invest In Your HomeHome improvements are a great way to boost your home’s value. Plus, if there’s a project you’ve been wanting to complete but haven’t had the money to do so, finally crossing it off your to-do list will increase your overall satisfaction.
Simple, inexpensive changes such as paint color, faucets, and light fixtures can make a world of difference. Additionally, if you challenge yourself to DIY these upgrades or repairs, you’ll expand your skill set while saving money.
- Invest In YourselfNever underestimate the option to invest in your health, education, or relationships.
From enrolling in foreign language courses to getting back into shape or rekindling that romantic spark, with a small investment in yourself, you can literally reap the benefits for years to come.
One of the best long term investments you can make is improving your marketability in the professional world. Whether it’s going back to school, seeking professional development opportunities, or honing your skills, you won’t regret putting money behind your professional goals.
- Give It AwayOne of the most rewarding ways to spend your tax refund money is to donate it to a cause you’re passionate about.
If you don’t have a particular organization in mind, a quick bit of research can provide you with tons of legitimate and worthwhile causes to donate to.
You’ll feel great knowing your money is making a difference in people’s lives, and as an added bonus, you’re preemptively working on next year’s tax season since your donation could be a deduction a year from now.
If you don't know where to give it, you can even consider starting a Donor Advised Fund (DAF).
- Have (a bit of) FunWhile it’s ideal to take care of the items above on this list in lieu of having fun, it’s not realistic. To avoid burnout or resentment, try allotting a small portion of your tax return to whatever new gadget you’ve been coveting, a nice meal out, or some other purchase that is for pure enjoyment.
While you shouldn’t invest your whole return into the fun and frivolous, you can wisely set aside some of it for your leisure. In other words, you can treat yourself without going overboard.
You’ll definitely not regret giving yourself a bit of a break as long as you’re still moving along well with your other financial goals.
What do you plan to do with your tax refund this year?
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Clocks have changed, days are getting longer, and spring is here. That means the official tax filing deadline, April 18, 2023, is at hand. But getting your taxes done on time may be leaving you completely stressed and overwhelmed.
Whether you still need to get your finances in order or your plan to file on time has been sidetracked by unforeseen circumstances, you can request a six-month filing extension from the IRS.
Here’s what you need to know about filing an extension for your 2022 taxes.
Table of ContentsYou Need To Fill Out A Federal Extension Form 4868File A Tax Extension For Your StateYou Still Have To Pay Your Taxes By April 18Don’t Expect A Refund Until You’ve FiledYou Need To Fill Out A Federal Extension Form 4868To move your tax filing due date to Oct. 15, 2023 you need to complete IRS Form 4868. The form needs to be completed on or before April 18, 2023. Keep in mind that you must still pay what is owed to the IRS by this April deadline. An extension does not mean you can also delay what needs to be paid.
You need to submit Form 4868 to avoid failure-to-file penalties that can add up to 25% to your tax bill.
When you file a tax extension you receive an extra six-months to file your Federal Taxes. This is an extension to file your return, not an extension to pay your taxes.
You can fill out a paper form and mail it to the appropriate IRS location (which varies by state) or e-file it using the IRS online fillable forms or tax software like TurboTax, FreeTaxUSA, TaxAct, TaxSlayer, or H&R Block.
*Here are the links that go directly to the extension pages of popular tax software:** TurboTax * FreeTaxUSA * TaxAct * TaxSlayer * H&R Block The form, pictured above, is deceptively complex. With just nine fields, it looks like it should take mere minutes to complete. You start by filling out your name, address, and Social Security Number.
Then you get to field 4, which requires you to estimate your total tax liability for 2022. Most people who know their tax burden don't need to file an extension.
Estimating your tax burden is the most difficult part of filing an extension. If you're looking for guidance on how to estimate your tax burden, you won’t find it with the IRS, which tells filers to “properly estimate your tax burden using the information available to you.”
When you estimate your tax burden, you want to be as accurate as possible. Certain tax software companies that allow you to e-file an extension have built-in calculators to help you estimate your taxes.
Tax Tip: The TurboTax Calculator is an especially helpful tool that will work for most filers seeking an extension.
If you're really struggling with estimating your income, you may want to spend a couple of hours using the best tax software to get a more thorough estimate of your business or rental income.
The remaining fields include a total of 2022 Federal Tax Payments, the balance due (if you owe more taxes), and the amount you’re paying at the time of filing an extension.
File A Tax Extension For Your StateIf you live in a state that requires a state income tax, you may need to file an extension in your state. The process for requesting an extension varies by state. Some states automatically grant a six to seven month extension when the IRS grants one to you.
Other states require you to request an extension using their process. When you use tax software to request a Federal extension, you will see the option to request a state extension as well.
If you’re not using tax software, you can also use an online search to figure out the process for requesting an extension in your state.
You Still Have To Pay Your Taxes By April 18The extension to file is not an extension to pay your taxes. You should pay unpaid taxes at the time you request an extension. If you can’t pay the amount in full, pay as much as you can. Filing a tax extension doesn’t absolve you from paying your taxes on time and in full.
The interest rates for overdue taxes range from 3% to 6% for 2022. If you have the cash to pay off back taxes, take care of the debt right away. This way you can avoid paying even more in interest over time.
If you dramatically underpaid your taxes (less than 90% of what you actually owed), you may owe a tax penalty which can range from 5% to 25% of your unpaid tax burden.
Make sure to prioritize paying your taxes before April 18, even if you can’t complete your filing by the original tax deadline.
Don’t Expect A Refund Until You’ve FiledIf you overpaid your taxes for 2022, you will be paid a refund. But that refund won’t come just because you filed Form 4868.
You won’t see a refund check until you complete your real tax return. You can expect to see a small amount of interest on the cash the IRS holds for you, but make sure you put your tax refund to work once you get your money back from the IRS.
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If your plan to file on time has been sidetracked by unforeseen circumstances, you can request a six-month filing extension from the IRS.
Paying for college is a lot harder when you’re dealing with daycare costs, medical bills, and slowing income growth. This is why starting a college fund is an important first step.
It's important to remember too that a college fund doesn't have to pay for all of college. Even 20% of the cost can go a long way to helping out in the future. That's why we created our guide to How Much You Should Have In A College Savings Fund By Age.
We give tips on the best ways to open a college savings account, and how to find money to put into it.
Table of ContentsOpen A 529 Plan In Your StateHow To Save When Kids Are YoungBoosting Savings During Elementary YearsInvesting More During Middle and High SchoolHow Will You Start Your College Fund?Open A 529 Plan In Your StateYou can save for college in a variety of accounts and a 529 Plan offers distinct advantages. 529 Plans are investment accounts designed to help pay for K-12 and higher education expenses.
The accounts offer tax advantages including tax-free growth and tax-free distributions as long as the money is spent on a broad range of eligible expenses. Some states even offer a tax deduction when you contribute to the plan.
Opening a 529 Plan is almost as simple as opening a brokerage account. However, make sure you open the right account for your state. Some states only offer tax deductions if you use the state’s plan. Others offer deductions no matter what plan you use. This guide gives you state-by-state details on opening an account or click on your state below.
In general, you don’t need much money to open a 529 plan account. If you can scrape together $100, you should be able to get started. The only other information you need is about your state of residence, and basic information about the beneficiary.
Getting the account open is a small administrative hurdle. The real challenge is getting money into the account so it can grow over time. No matter how old your child or beneficiary is, we have suggestions for how you can save for college.
How To Save When Kids Are YoungStart Funding the Account With Small Monthly ContributionsWhen your child is first born, you’ll probably experience a big shock to your cash flow. Either your income will drop or your expenses will dramatically increase (daycare is expensive!). Finding $100 per month may not be easy at this phase.
Instead of worrying about a specific number, consider automatically sending a $20 contribution to the savings account each month. That’s $10 per paycheck.
At this point, you’re already adjusting to a huge financial shock, so it’s unlikely that the $20 per month will make much difference to you. Plus, it will keep you in the habit of saving for the future.
Deposit Gifts Into the 529 AccountGrandparents, doting aunts and uncles, and even a few friends might give your child cash gifts for birthdays and holidays.
Putting these funds directly into the 529 Account boosts college savings and saves your house from a few unnecessary items.
Pay For Daycare With A UPromise Credit CardA UPromise credit card is a cash back credit card that gives you a boosted rate of return if the cashback goes into a 529 Plan Account. This is an especially effective way to start saving for college if you can pay for daycare expenses using the Upromise credit card.
- The regular cash back amount is 1.25%, but it goes up to 1.529% when connected to a 529 plan.
- Parents paying $15,000 per year will earn nearly $230 per year in cash back.
- By the time your child is in kindergarten, you’ll have more than $1,000 in college savings. Boosting Savings During Elementary YearsChildcare expenses don’t disappear during the elementary years, but they should fall by at least a few thousand dollars per year. This may translate to more savings opportunities.
These are a few ways to boost college savings despite the multiple tugs on your wallet.
Encourage Kids To Put A Portion of Cash AsideBy the time kids are in elementary school, they will likely have some ideas of how to spend gift money. But that doesn’t mean they need to spend all the cash that comes into their hands.
Setting aside a third of their gift money for college can help them establish a savings habit. Make it easy by setting aside money for investing before you take them to the store to buy a new toy.
Boost Your Automatic Savings Rate If You CanThe elementary years are a great time to boost your automated savings rate if your cash flow has recovered.
Moving from $10 per pay period to $25 or $50 can help you to make meaningful progress towards your college savings goals. The amounts are small enough that they allow you to save for retirement and enjoy life today, but large enough to make some difference in the future.
Put ‘Found Money’ Into The 529 AccountTight monthly budgets make it difficult to contribute large amounts of money to college savings. But you can use “found money” to put into the account.
This can include unexpected gifts, larger-than-expected tax refunds, stimulus money (if that happens again), and more.
Investing More During Middle and High SchoolWith college costs looming, parents often get serious about savings during middle and high school years. This is also a great time to help your student take more ownership of their college savings too.
Put Award Money Into The AccountStarting in middle school, students may start to stumble across college scholarship opportunities. These might include micro-scholarships (ranging from $20-$100) for community service, academic excellence, winning a competition, and more.
You can even earn a scholarship for side hustling. Though these are designated as scholarships, the award is often cash or a check that doesn’t have to be put toward college. Push your kids to invest this money in their 529 accounts.
Incentivize Saving With A MatchStudents in middle and high school can have after-school jobs or side hustles that bring in extra funds per month.
At this phase of life, consider matching their college savings up to a certain level each month. As your child starts to take an active part in their savings, they are likely to take more ownership of the entire college process (including identifying more scholarship opportunities or considering community college to keep costs down).
Keep The Automatic Savings GoingAs your child becomes a teen, the costs of college continue to grow. You’re unlikely to figure out a way to cover the full cost of college in the next six to seven years, but steady savings will help. Combining these steady efforts with college scholarships, your child’s savings, and gifts from others, you may see a low five-figure investment account.
If you're in a better financial position than you were during your child’s elementary years, consider boosting these savings to $100 per pay period or more. The more you save, the fewer loans your child may need.
Adjust Asset Allocation As You Get Closer To CollegeAs your child gets closer to college, take a look at the 529 account and assess where you are in terms of growth. Your investing focus will shift from growth to maintaining the amount of money in the account. That focus will come with adjustments to your asset allocation.
During our child’s high school years, a large portion of your college funds should be in cash or bonds to cut back on volatility. You may want to keep some amount in stocks to facilitate some growth. After all, you should have four years to spend the money, so dips in the stock market may have time to recover.
Robo-advisors like Wealthfront will adjust the allocation in your 529 plan on your behalf, but some other companies expect you to do that on your own.
How Will You Start Your College Fund?Paying for college is a daunting task, but you can tackle it by starting your college fund today.
With regular contributions from both you and your kids, you may be surprised by how much you can save by the time college rolls around.
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Worried about your child's college savings? Discover the top strategies to start saving for college, including 529 plans.
A Multigenerational 529, also known as a Dynasty 529 Plan, is a way of using one or more 529 plans to leave a legacy of education for future generations. A Dynasty 529 Plan can be set up by parents, grandparents, or other relatives.
With a Dynasty 529 Plan, high net-worth parents save more than is required for their children’s college education, meaning, they can continue to save in the plan even after their kids have graduated. A Dynasty 529 Plan benefits from years of tax-free growth before parents tap into it to pay for the costs of college.
However, passing on a 529 plan to future generations may result in gift taxes and generation-skipping transfer taxes. The 529 plans may also affect eligibility for need-based financial aid.
Depending on the number of descendants and increases in college costs, a Dynasty 529 Plan might not be enough to pay for the college costs of all future generations.
Table of Contents529 Plan BasicsContribution Limits And SuperfundingFamilies Can Have 529s Across States4 Strategies For A Multigenerational 529 PlanBe Aware Of The Annual Gift Tax ExemptionExamples Of Growth In A 529 Plan Account Change In BeneficiaryChange In Account OwnerWhat To Know About Gift Taxes Generation-Skipping Transfer TaxesHow Are Generations Defined?Possible RisksAggregate Contribution Limits (2023)529 Plan Basics529 plans are specialized savings accounts that are used to save for education expenses. Contributions are made with after-tax dollars and earnings accumulate on a tax-deferred basis.
Two-thirds of states offer a state income-tax deduction or tax credit based on contributions to the state’s 529 plan.
Distributions for qualified education expenses are entirely tax-free.
The earnings portion of a non-qualified distribution is subject to income tax at the recipient’s rate, plus a 10% tax penalty and possible state income tax breaks.
Qualified expenses include:
- College tuition and fees, books, supplies and equipment, room and board (if enrolled on at least a half-time basis), the cost of a computer (including computer software and internet) and special needs expenses
- Up to $10,000 in student loan repayment per borrower (lifetime limit) for the beneficiary and the beneficiary’s siblings
- Fees, books, supplies and equipment required for participation in certain apprenticeship programs
- Up to $10,000 per year in elementary and secondary school tuition
- Rollover up to the annual gift tax exclusion amount to an ABLE account for a special needs beneficiary
- Rollover up to $35,000 per beneficiary (lifetime limit) to a Roth IRA of the beneficiary starting in 2024
Contributions to a 529 plan are exempt from gift taxes up to certain limits.
Contribution Limits And Super-Funding529 plans do not have an annual contribution limit.
Contributions are subject to the annual gift tax limit of $17,000 (2023) per contributor per beneficiary. A couple can give twice this amount, or $34,000.
529 plans offer five-year gift-tax averaging, also called super-funding, in which a contributor can give a lump sum of up to five times the annual gift tax exclusion. One fifth of the contribution is removed from the contributor’s estate each year.
A key benefit of super-funding is it allows a lump sum contribution to earn money for longer than a series of annual contributions.
529 plans do have aggregate contribution limits, which vary by state. The aggregate contribution limits are per beneficiary and include all 529 plans for the beneficiary in the same state.
Once the 529 plan account balance reaches the limit, no further contributions may be made, but the 529 plan can continue to appreciate in value. There is no limit on how large the 529 plan can grow.
- The current 2023 aggregate contribution limits range from $235,000 in Georgia and Mississippi to $569,123 in New Hampshire.
- The average aggregate contribution limit among all state 529 plans is $467,115 and the median limit is $500,000.
Families Can Have 529s Across StatesA family can have 529 plans in multiple states and use them to pay for college in any state. The aggregate contribution limit in one state’s 529 plan does not consider amounts saved in 529 plans in other states.
If a family invested to the limit in all the states, the total contributions could be as much as $23.3 million per beneficiary.
529 plans do not have age limits, unlike Coverdell education savings accounts. Coverdell education savings accounts require contributions to end when the beneficiary reaches age 18. The account must be fully distributed by the time the beneficiary reaches age 30.
There are exceptions to this rule, including if the beneficiary has special needs. In contrast, contributions may be made to a 529 plan regardless of the age of the beneficiary, and there is no requirement to ever take a distribution.
4 Strategies For A Multigenerational 529 PlanThere are several key ways to for continued funding and growth for a multigenerational 529 Plan.
1. Think long-term: You can continue making contributions to a 529 plan even after the beneficiary has graduated from college. Since 48 is the median age of parents of college-age children, this suggests that you could continue making contributions for another 35 to 40 years.
2. Change the account owner to your wife: You may want to make the woman (wife) the account owner and continue to make contributions, since women tend to live longer than men.
3. Name another family member as the beneficiary: This is a work-around for the annual gift tax exclusion and contribution limits. (See more below in the Change in Beneficiary section.)
4. Open multiple 529s in various states: When the 529 plan’s aggregate contribution limit is reached, you can open a 529 plan in another state for the same beneficiary. You can also make contributions to the 529 plans in multiple states simultaneously, subject to the limits of annual gift tax exclusions and lifetime gift tax exemptions.
There is no aggregate contribution limit on rollovers in most states. So, you can rollover an out-of-state 529 plan and another family member’s 529 plan into the child’s in-state 529 plan.
However, some states consider an outbound rollover to be a non-qualified distribution and subject to state income-tax.
See the map below—these states include: Alabama, Arkansas, Colorado, Georgia, Idaho, Illinois, Indiana, Iowa, Montana, Nebraska, New Mexico, New York, Ohio, Oklahoma, Rhode Island, Utah, Virginia, Washington DC, and Wisconsin.
See the map below—these are states that don’t treat outbound rollovers as non-qualified distributions: Arizona, Connecticut, Kansas, Louisiana, Maine, Maryland, Michigan, Mississippi, Missouri, North Dakota, Oregon, Pennsylvania, South Carolina, Vermont and West Virginia.
Be Aware Of The Annual Gift Tax ExemptionThe main limitation on contributions to a 529 plan is the annual gift tax exemption, which is $17,000 per contributor per beneficiary.
If you contribute as a couple to a Dynasty 529 Plan for 40 years, that’s a total of $1.36 million. This does not count any increases in the annual gift tax exclusion, any appreciation of the investment or any distributions to pay for college costs. If you are willing to use up part of their $12.92 million lifetime exemption ($25.84 million for a couple), you can contribute more.
It is best to front-load the contributions through five-year gift-tax averaging or using up part of the lifetime gift tax exemption. This is to ensure contributions are made before the 529 plan balance exceeds the contribution limit.
Examples Of Growth In A 529 Plan Account If the 529 plan averages a 4% annual return on investment, it will double in value every 18 years. If the 529 plan averages a 6% annual return on investment, it will double in value every 12 years. This can lead to significant growth in the 529 plan balance.
The number of children per generation, the amount of initial funding and tuition inflation rates, exponential growth in the number of family members paying for college may eventually exhaust all of the funds in the Multigenerational 529 Plan.
The Dynasty 529 Plan will generally experience 20 years of growth before the next generation needs help paying for college costs.
Change In BeneficiaryThe account owner can change the beneficiary of a 529 plan to a member of the family of the previous beneficiary at any time, without limit.
The account owner can also transfer funds from one 529 plan to the 529 plan of a new beneficiary. This includes a partial transfer, not just a transfer of the full balance. Such rollovers are limited to once per 12-month period per beneficiary.
Members of the beneficiary’s family include the beneficiary’s spouse, as well as:
- Son, daughter, stepchild, foster child, adopted child or a descendant and their spouses
- Brother, sister, stepbrother or stepsister and their spouses
- Father or mother or an ancestor and their spouses
- Stepfather or stepmother
- Nieces, nephews and their spouses
- Aunts, uncles and their spouses
- Son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law or sister-in-law
- First cousin
Change In Account OwnerMany states allow a change in the account owner. Some limit a change in the account owner to the death, incapacitation or divorce of the current account owner. Others allow a change in account owner in any situation. Some 529 plans allow the account owner to specify a contingent account owner when the account is set up.
The new account owner does not need to be related to the old account owner. There are no tax consequences for a change in account ownership. Changing the account owner does not result in income, gift, or transfer taxes.
Parents should choose a state 529 plan that allows flexible changes in account owners, as the account owner of a Dynasty 529 Plan may eventually change.
What To Know About Gift Taxes There is an annual gift tax exclusion of $17,000 per donor per recipient in 2023. This gift tax exclusion is adjusted periodically for inflation. A couple can give twice this amount, or $34,000, when giving together.
There’s also a $12.92 million lifetime exemption for gift and estate taxes. For a husband and wife, the combined lifetime exemption is $25.84 million.
However, the lifetime exemption will drop roughly in half in 2026, when it reverts to where it was in 2017 ($5.6 million) adjusted for inflation since 2017, unless Congress acts.
Based on inflation as of January 2023, that would yield a lifetime exemption of $6.9 million. The lifetime exemption in 2026 will be at least this amount. But, it will most likely be about $7.8 million based on estimates of inflation over the next three years.
Generation-Skipping Transfer TaxesIn addition to gift taxes, there’s also the Generation-Skipping Transfer Tax (GSTT). The Generation-Skipping Transfer Tax applies if the new beneficiary is at a lower generation than the current beneficiary.
Transfers include a change in the beneficiary of a 529 plan and a rollover from one 529 plan to another.
If the new beneficiary is at the same generation level as the current beneficiary, there will be no gift or transfer tax consequences. For example, a change in beneficiary to a cousin of the current beneficiary (e.g., from a niece or nephew of the account owner to a child of the account owner), there will be no gift or generation-skipping transfer taxes.
If you contribute to a 529 plan of a niece or nephew and later transfer funds to your child’s 529 plan or change the beneficiary to your child, wait a few years to avoid step-transaction concerns.
If the beneficiary is changed to someone who is one or more generations below the current beneficiary, that may be treated as a taxable gift. Likewise, a rollover to a 529 with a beneficiary that is one or more generations below the current 529 plan’s beneficiary may be treated as a taxable gift.
The IRS has not issued regulations that specify whether this is treated as a taxable gift from the account owner or from the old beneficiary to the new beneficiary. However, proposed regulations from 1998 specified that the transfer is treated as a taxable gift.
How Are Generations Defined?People often get confused by what it means for a beneficiary to be one or more generations lower than the current beneficiary. A child is one generation lower than the parent and two generations lower than the grandparent.
Generations are defined by the Internal Revenue Code of 1986 at 26 USC 2651 as the number of generations between an individual who is a lineal descendant of an ancestor and the ancestor.
- If the individual is not a lineal descendant, the generation number is based on the person’s date of birth.
- If the individual was born not more than 12.5 years after, they are considered to be of the same generation.
- Someone who is born more than 12.5 years after the other individual but not more than 37.5 years is considered one generation below the other individual.
- Each additional increment of 25 years yields a new generation.
A change in the account owner is not considered to be a transfer and is not subject to gift taxes and transfer taxes.
There’s an annual exclusion for the generation-skipping transfer tax that is the same as the annual exclusion for gift taxes. Likewise for the lifetime exemption.
Changes in the 529 plan beneficiary are unlikely to result in the payment of gift or transfer taxes for typical families.
However, as the size of the Dynasty 529 Plan grows, it may become subject to gift and transfer taxes, especially if the family is very wealthy or if a transfer is made upon death of the current beneficiary.
Possible RisksChanges in the laws concerning 529 plans are unlikely, since abuse of the rules is rare, but there are several risks associated with a Multigenerational 529 Plan that may reduce their effectiveness.
Congress could change the rules associated with gift and transfer taxes, or the annual exclusion and lifetime exemptions, leading to a large tax burden.
State 529 plans could change their rules to no longer allow rollovers when they exceed the aggregate contribution limit.
Aggregate Contribution Limits (2023)
| State | Maximum Contribution | | --- | --- | | Alabama | $475,000 | | Alaska | $475,000 | | Arizona | $531,000 | | Arkansas | $500,000 | | California | $529,000 | | Colorado | $500,000 | | Connecticut | $550,000 | | Deleware | $350,000 | | District of Columbia | $500,000 | | Florida | $418,000 | | Georgia | $235,000 | | Hawaii | $305,000 | | Idaho | $500,000 | | Illinois | $500,000 | | Indiana | $450,000 | | Iowa | $420,000 | | Kansas | $450,000 | | Kentucky | $450,000 | | Louisiana | $500,000 | | Maine | $520,000 | | Maryland | $500,000 | | Massachusetts | $500,000 | | Michigan | $500,000 | | Minnesota | $425,000 | | Mississippi | $235,000 | | Missouri | $550,000 | | Montana | $396,000 | | Nebraska | $500,000 | | Nevada | $500,000 | | New Hampshire | $569,123 | | New Jersey | $305,000 | | New Mexico | $500,000 | | New York | $520,000 | | North Carolina | $540,000 | | North Dakota | $239,000 | | Ohio | $517,000 | | Oklahoma | $450,000 | | Oregon | $400,000 | | Pennsylvania | $511,758 | | Rhode Island | $520,000 | | South Carolina | $540,000 | | South Dakota | $350,000 | | Tennessee | $350,000 | | Texas | $500,000 | | Utah | $540,000 | | Vermont | $550,000 | | Virginia | $550,000 | | Washington | $500,000 | | West Virginia | $550,000 | | Wisconsin | $527,000 | | Wyoming | $500,000 |
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“Fact or cap” is another way of saying fact or fiction and is a phrase that is commonly used on TikTok. Speaking of TikTok, if you’re trying to build wealth by listening to what’s trending, you may feel confused by all the information out there. Especially when it comes to the sales pitch around the mythical "compound interest account".
Young investors on TikTok and other social media platforms are prime targets for high-cost, low-return “investments.” Perhaps you’re tempted to go all-in on meme stocks or some kind of secure compound interest account. Before you do, discover the truth behind them and what they entail.
Here are three caps of compound interest accounts and what they entail.
Table of ContentsCap #1: Secure Compound Interest Accounts Are The Best Way To Grow Your MoneyCap #2: Compound Interest Is Better Than Compound GrowthExample Of Compound Interest: A Certificate of DepositTypes Of Investments That Don’t Earn Compound Interest (But Instead Grow)Example Of Growth In Riskier Investments vs. Interest-Bearing Investments Cap #3: More Risk Is Alway BetterFinal ThoughtsCap #1: Secure Compound Interest Accounts Are The Best Way To Grow Your MoneySecure Compound Interest Accounts aren’t investment accounts at all. Secure Compound Interest Accounts are a form of whole life insurance or indexed universal life insurance.
You may have seen this topic discussed by TikTok star Curtis Ray, who sells indexed universal life insurance for Suncor Financial. The company’s trademarked Maximum Premium Indexing™ isn’t a secret sauce to help you get rich. It’s simply a variation of this type of life insurance policy.
The “investment” is an expensive form of life insurance that locks you into saving a small portion of the payment each month. Over time, you’ll slowly build up cash value inside a life insurance policy. The cash value earns some interest every year, but the expected return isn’t high enough to make you wealthy.
Consumer Reports runs an annual study comparing whole life insurance interest rates to T-bills and inflation. In general, inflation grows at a faster rate than the guaranteed cash value in a whole life insurance policy. That means you’re guaranteed to lose buying power over time.
Whole life insurance policies also offer a “potential cash value” that could grow slightly faster than inflation over the long run. However, the growth potential is no match for a well-balanced investment portfolio.
In general, the potential cash value grows at a rate of 3.5% whereas well-balanced portfolios can expect returns ranging from 7 to 10% over the long run.
And as for the "secure" part - many of these policies claim you can't lose money. What they actually say is that you can never earn below 0% return on the investment part. You still have to pay your life insurance premiums and any loans back. That means, if you actually earn 0% that year, you will pay more in fees than you earned.
Finally, when you die, the death benefit goes to your heirs, but any cash value you built up? Well, that goes right back to the insurance company.
Cap #2: Compound Interest Is Better Than Compound GrowthSome financial investments earn compound interest and others don't. In general, financial investments benefit from an effect known as compounding. Compounding is a phenomenon where your initial investment grows by a certain rate during the first period of investment.
During the next period, the growth applies to both the initial investment and the growth from the previous period. This results in an astounding exponential growth curve. Author Naved Abdali explains, “Compounding has a snowball effect. It is just a tiny ball of snow at the very start, but it can turn into an avalanche over time.”
The words compound interest and compound growth are often used interchangeably. However, compound interest is a type of growth that only applies to certain investments. Investments that earn interest such as CDs, I-Bonds, and high-yield savings accounts all earn interest at a set rate each year. The yield on these accounts (also known as the interest rate) compounds over time.
Note: CDs and savings accounts are also "secure" in that they can't lose value. They are insured by the FDIC up to the deposit limits.
Example Of Compound Interest: A Certificate of DepositTake a simplified example where you invest $1,000 in a two-year CD at 4%.
- During the first year, you will earn $40 (technically a tiny bit more because interest is paid monthly, but this is a simple example).
- The next year, you will earn $41.60 because the original $1,000 earned 4%.
- On top of that, the $40 of interest you earned during the first year earned 4% as well.
Types Of Investments That Don’t Earn Compound Interest (But Instead Grow)Many investment classes like stocks, ETFs, real estate, and alternatives don’t benefit from compound interest. Instead, these investments grow in value through dividends, rental income, or growth in the underlying asset value.
If you continue to hold these investments (and especially when you re-invest the income earned from the investments), you will start to see compounding growth. Most of the time, stocks, ETFs, real estate, and alternatives are more volatile than interest-bearing investments. However, they also tend to have higher overall rates of return.
Here are the average rates of returns for various investments over the last 30 years:
Example Of Growth In Riskier Investments vs. Interest-Bearing Investments If your riskier investments earn an average growth rate of 7.2% annually, your investment will double every 10 years on average. After 40 years, a $10,000 investment becomes $161,000.
By contrast, an interest-bearing investment tends to have a lower rate of return. If the cash value in your life insurance policy earns 3.5% per year, your $10,000 investment will be worth just under $40,000 after 40 years.
Interest-earning accounts are still an important part of your portfolio. We regularly recommend using CD ladders for short-term savings goals.
These conservative tools can help you earn returns as you save for a down payment, a wedding, or to fund a career gap. You may decide to use I-Bonds for your emergency fund. You certainly wouldn’t want an emergency fund locked up in real estate or subject to the whims of the stock market.
But for long-term investing, you need to focus more on compound growth rather than compound interest.
Cap #3: More Risk Is Alway BetterInvestments that are advertised as no-risk rarely see high returns over time. But that doesn’t mean that more risk is always better.
You want the risks you take to be offset by the returns you earn.
A blend of low-risk investments (like bonds and CDs), high-risk investments (real estate, stocks, ETFs, etc.), and some exposure to ultra-high-risk investments (crypto, alternatives) may be suitable for most young investors with a long time to save.
Final ThoughtsRemember there’s no fast way to wealth. The best ways to invest and create more security for your future involve time and due diligence. Create a balanced portfolio with a mix of different types of accounts that can yield compound interest and steady growth.
And also remember - you don't have to pay a lot of money for these types of investments either!
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“Fact or cap” is another way of saying fact or fiction and is a phrase used on TikTok. Here are three caps of compound interest accounts.
Established in 1956, UGMA Accounts are the oldest form of custodial accounts with tax benefits. UTMA Accounts were established in 1986 and are a special flavor of UGMA.
These days, 529 Plans and Education Savings Accounts are common ways to save for higher education. However, Uniform Gift to Minors Act Accounts, UGMA, and later Uniform Transfers to Minors Act Accounts, UTMA, were once considered a primary way to save for children’s college education.
Despite how uncommon it may be, UGMA accounts and UTMA accounts still provide a flexible investment account for children. An adult can invest for the benefit of a child until the child takes over the account between the ages of 18 to 21.
Here’s what you need to know about this class of custodial investment accounts.
Table of ContentsWhat Are Custodial Accounts For Minors?Uniform Gift to Minors Act (UGMA) vs. Uniform Transfers to Minors Act (UTMA) AccountsUGMA And UTMA Account RulesPros Of Uniform Gift to Minors Act & Uniform Transfers to Minors Act Account Cons Of Uniform Gift to Minors Act & Uniform Transfers to Minors Act Account Bottom LineWhat Are Custodial Accounts For Minors?Custodial accounts are investment accounts where an adult saves and invests money on behalf of another person. Parents and grandparents often use it to help their children pay for college, buy a house, or pay for a wedding, to name a few.
These accounts don’t offer the same tax advantages as 529 Plans and Education Savings Accounts, but they offer more flexibility for the beneficiary once they take over the account.
Uniform Gift to Minors Act (UGMA) vs. Uniform Transfers to Minors Act (UTMA) AccountsUGMA and UTMA accounts are both custodial accounts designed to transfer wealth to minors.
The primary difference between the two is the type of assets allowed in each account. UGMA accounts only allow financial assets like cash, stocks, and mutual funds.
UTMA accounts allow any tangible assets including cars, jewelry, real estate, and more. If you have significant alternative investments that you want to pass on to your kids, a UTMA account may be the best way to do that.
Keep in mind that UTMA accounts aren’t allowed in Guam, South Carolina, Vermont, or the Virgin Islands.
In general, beneficiaries will take over UGMA and UTMA accounts between the ages of 18 to 21. However, many states have a higher age of majority limits for UTMA accounts compared to UGMA accounts.
While the accounts don’t offer any tax advantages for contributing to the account, parents may get a small tax break on the earnings.
Unearned interest in a child’s investments is subject to kiddie tax rules. In 2023, the Kiddie tax rule will provide a small shelter on up to $2,500 earned in an investment account owned by a minor (including a UGMA).
Once the beneficiary reaches the age of majority, they take over their UGMA account. After that, they can use the money for whatever they choose. The beneficiary might use it for their education, but they could also use the assets to start a business or take a trip to Hawaii. The original investor has no say in the funds once the beneficiary takes over the account.
| | Uniform Gift to Minors Act Account | Uniform Transfers to Minors Act Account | | --- | --- | --- | | Use | Adults can save and invest on behalf of children. | Adults can save and invest on behalf of children. | | Transfer to Beneficiary | Beneficiary takes over the account between 18 to 21 depending on your state. | Beneficiary takes over the account between 18 to 21 depending on your state. | | Assets Allowed | Financial assets like cash, stocks, bonds, ETFs, and mutual funds. | Financial assets like cash, stocks, bonds, ETFs, and Mutual funds, and tangible assets like cars, jewelry, or real estate. | | Tax Benefits for Contributions | None | None | | Tax Benefits | A portion of earnings in the account may be subject to Kiddie Taxes where the earnings are taxed at 0% for the first $1,250 and the child's tax rate for the next $1,250. | A portion of earnings in the account may be subject to Kiddie Taxes where the earnings are taxed at 0% for the first $1,250 and the child's tax rate for the next $1,250. | | Gift Tax Limits Apply? | Yes | Yes | | Eligible States | All U.S. states and territories allow the UGMA. | All U.S. states and territories except Guam, South Carolina, Vermont, and U.S. Virgin Islands allow a UTMA. |
UGMA And UTMA Account RulesUGMA/UTMA accounts have fewer rules than 529 plans or Education Savings accounts. However, adults need to be careful to manage these accounts properly.
Account funders must remember that the accounts are subject to gift tax limits. In 2023, you cannot put more than $17,000 in a custodial account without reporting gift taxes on the additional gift.
The owner of the account (often the parents or grandparents) will pay taxes on the income earned within a UGMA or UTMA account. The Kiddie Tax Rule reduces the overall tax burden on the investment income, but the account owner still has to pay taxes on the earnings.
Pros Of Uniform Gift to Minors Act & Uniform Transfers to Minors Act Account * Flexibility in the use of funds. Beneficiaries can use the funds in a UGMA/UTMA account however they want. This can be a great way to give money to a child if you hope for them to use it to start a business, pay for a wedding, or put a down payment on a house. Plus, there's no penalty like you get on a 529 plan. * Assets belong to the beneficiary. There’s never any confusion about who benefits from a UGMA or UTMA account. The beneficiary of the account will receive the funds at the age of majority in their state. After that, the assets belong to the beneficiary. * A wide array of investment options are available. UGMA accounts house any financial assets, and UTMA accounts can include physical assets as well. You aren’t limited to the investment options chosen by your state’s 529 plan. Cons Of Uniform Gift to Minors Act & Uniform Transfers to Minors Act Account * No tax advantages for contributions. UGMA and UTMA plans offer no tax advantages for “contributions”. You can contribute up to the Gift Tax Limit in a given year. * No oversight for the use of funds. Once the beneficiary takes control of the account, the original owner can’t stop the beneficiary from using the money. While the beneficiary may use the money wisely, they could also blow the money on a foolish expenditure or a misguided investment. * Limited tax advantages on income. Tax owners will receive a small tax deduction ($1,250 in 2023) on the unearned income, and they will pay the child’s tax rate for the next $1,250. After that, the tax rate on the income is paid at the account owner’s rate. While owners may enjoy a small tax break, the overall savings is limited. Bottom LinePerhaps the most important rule for parents to remember is that this account is a no-strings-attached transfer of wealth. When the beneficiary hits age 18 to 21, the account is theirs. They can do what they want with the money.
If this is important to you and you’re not too concerned about tax benefits—for example, earnings in a 529 plan grow federally tax-deferred, giving your funds an opportunity to compound faster. If you’re simply wanting to pass on assets to your child, a UGMA or UTMA could be a good option.
Just remember the gift tax limits.
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Uniform Gift to Minors Act (UGMA) Accounts and Uniform Transfers to Minors Act (UTMA) Accounts provide an investment account for children.
If the thought of taking college-level classes while in high school is appealing, dual enrollment might be for you. It’s a completely optional way to get college credits during your high school years.
The motivation to do it is mostly around cost (or sometimes the need to take more advanced courses than a high school offers). The ability to knock out expensive credits before arriving on campus can both accelerate your graduation timeline and limit your out-of-pocket costs for a degree.
Let’s explore the ins and outs of dual enrollment.
Table of ContentsWhat Is Dual Enrollment?How Dual Enrollment WorksDual Enrollment vs. AP ClassesRequirementsCostPros And Cons of Dual EnrollmentWhat Is Dual Enrollment?Dual enrollment, sometimes called dual credit, is a type of class that counts for both high school and college credit. Eligible high school students can take dual enrollment classes. If the student passes the class, the credit counts toward both their high school diploma and college degree.
How Dual Enrollment WorksThe appeal of dual enrollment is the ability to fulfill high school requirements and college coursework at the same time. But the exact mechanics of the program vary based on the school.
Typically, students start by applying to a dual enrollment program. The student can pursue a Bachelor’s degree, Associate’s degree, or certificate. If accepted, students can take the available classes that suit their interests and strengths.
Depending on the situation, classes can be taken through high school, online courses, or a local community college. The student must achieve a grade of at least a C to pass the class. Regardless of grades, it becomes a part of your college record.
When it’s time to apply to college, the school may or may not accept dual enrollment credits. In-state public colleges are more likely to accept dual enrollment credit than out-of-state colleges or private universities.
Dual Enrollment vs. AP ClassesBoth dual enrollment and AP classes offer the chance to earn college credit as a high school student. However, the two types of classes are very different.
Here’s a breakdown of the differences:
LocationDual enrollment classes are college courses made available to high school students. While some high schools have dual enrollment options on campus, many students must take these classes on a college campus or online.
In contrast, Advanced Placement (AP) classes are exclusively taught by high school teachers. While AP classes are designed for college-level learning, students won’t have to take these classes online or through a community college.
Course LengthMost dual enrollment courses last for a single semester, which equates to half the school year. In some cases, AP classes only last for a single semester. But AP classes often last for a full school year.
The ability to take classes by the semester opens the door to more coursework opportunities.
CreditStudents who pass a dual enrollment course with a C or better automatically receive college credit. If the college you choose to attend accepts dual enrollment credits, there is no extra testing requirement.
However, students taking an AP course must pass a standardized exam at the end of the year. The college you plan to attend will determine the minimum score to receive credit.
Money Tips For The Above Average High School GraduateHere’s five money tips for the graduate that wants to be in the top 1%.
GET THE TIPS RequirementsDual enrollment requirements vary from state to state. Typically, only junior and senior high school students can pursue dual enrollment credits. But some states allow exceptions for gifted students.
In certain states, like Alabama, Florida, and North Carolina, students must maintain a minimum GPA to stay in dual enrollment programs. For many, the requirement is a 3.0 unweighted GPA.
Additionally, many states require students to obtain a written recommendation from a high school or college staff member. The recommendation should include why the student is ready for dual enrollment courses.
Many dual enrollment programs also require parent permission, a minimum SAT score, completed course prerequisites, and any other requirements set by the administering college.
CostThe exact costs depend on where you live. In some cases, dual enrollment options are free through community colleges.
According to Pearson, dual enrollment classes may range from free to $400 per class. Additionally, students may need to purchase expensive college textbooks.
The average cost of a traditional college course is $926. With that, dual enrollment is often a more affordable option than traditional college coursework.
Pros And Cons of Dual EnrollmentEvery educational choice has advantages and disadvantages. Here’s what to keep in mind about dual enrollment.
Pros Cost-effective option: It’s often more affordable to take dual enrollment courses than traditional college classes. * Lighten your degree requirements: Completing some of your required coursework before you reach college helps you reduce costs and save time. * Challenging classes: Dual enrollment classes are more intense than high school classes. Push yourself to learn and grow with more rigorous course options. * Motivation:Research has shown that students who choose dual enrollment programs are more likely to graduate from high school and college. Cons Challenging classes: If you don’t pass the class with at least a C, it won’t count toward high school or college credit. * Shortened college experience: Many students want the full college experience. Coming to campus with significant credits may shorten your path to a degree. * Credits don’t always transfer: Not every college will accept your dual enrollment credits. You need to research to determine which colleges will accept the credits. Editor: 2
The post What Is Dual Enrollment In College And High School? appeared first on The College Investor.
If the thought of saving time and money by taking college-level classes while in high school, dual enrollment might be for you.
Taking money out of a 529 plan is more complicated than putting money into a 529 plan.
If you do it incorrectly, you may owe taxes and a 10% tax penalty, plus recapture of state income tax breaks attributable to the distribution.
If you're getting reading to take 529 plan distributions to pay for college (or K-12 tuition, student loans, or even a Roth IRA rollover), here's what you need to know so you don't end up receiving a tax penalty.
Table of ContentsHow To Ensure A Tax-Free DistributionQualified Education ExpensesAdjustments To Qualified ExpensesTiming Of The DistributionUsing Distributions StrategicallyWhat If You Take Too Much of a Distribution?Recontributing RefundPicking A Plan Or Portfolio For The DistributionRecipient of DistributionImpact on Financial AidHow To Request A DistributionReporting Distributions To The IRSHow To Ensure A Tax-Free DistributionA distribution from a 529 plan is tax-free if it is limited to qualified education expenses.
The IRS does not allow double-dipping, so each qualified expense can justify just one tax break. For example, you can’t use the same tuition dollars to justify both a tax-free distribution from a 529 plan and the American Opportunity Tax Credit (AOTC).
Accordingly, after you identify the qualified education expenses, you must subtract those expenses that have been used with another tax break from the total. The qualified distribution from the 529 plan must be limited to what’s left, or part of it will not be tax-free.
Qualified Education ExpensesQualified education expenses include tuition, fees, books, supplies, equipment, computers, Internet access, software, peripherals and special needs expenses. Also, if the student is enrolled on at least a half-time basis, qualified expenses include room and board.
Room and board may include rent for an off-campus apartment, but only up to the allowance for room and board in the college’s official cost of attendance figure. This is sometimes called a student budget, for the student’s specific living arrangement.
Most colleges have three or four student budgets, depending on whether the student is living on campus, in an apartment, with family, or on a military base. If the student is living on campus in housing that is owned or operated by the college, room and board may be based on the actual invoice amount, if it is higher than the allowance in the student budget.
Eligible educational institutions include all colleges and universities that are eligible for Title IV federal student aid. This includes undergraduate and graduate institutions, as well as institutions that offer Associate’s degrees and certificates.
Qualified expenses do not include other expenses, such as transportation and health insurance.
Qualified expenses may include up to $10,000 per borrower (lifetime limit) in student loan repayment for qualified education loans borrowed by the beneficiary or the beneficiary’s siblings. Qualified education loans include all federal and most private student loans.
Some families may borrow student loans instead of taking a distribution during a down stock market. Later, after the stock market has recovered, they can take a qualified distribution to repay the student loans.
Make sure you find your state in our guide to 529 plans to ensure that your state allows student loan payments as qualified expenses.
Adjustments To Qualified ExpensesThe qualified education expenses must be reduced by the amount of tax-free educational assistance.
Tax-free educational assistance includes:
- Tax-free scholarships and grants
- Employer-provided educational assistance
- Veterans’ educational assistance
- Qualified expenses used to justify the American Opportunity Tax Credit (AOTC) and Lifetime Learning Tax Credit (LLTC)
The remaining qualified education expenses can be used to justify a qualified distribution from a 529 plan, up to the amount of the qualified expenses.
Make sure you don’t request a distribution that exceeds this figure.
Timing Of The DistributionThe timing of the distribution matters in several ways.
For a distribution to be qualified, the qualified expenses must be paid in the same tax year as the distribution.
If you take a distribution in December to pay next year’s tuition, it will be non-qualified unless you actually pay next year’s tuition in December. The distribution and expense must be paid in the same tax year.
The IRS also does not allow you to pay for qualified expenses one year, then take a qualified distribution several years later. Otherwise, you’d be able to let the 529 plan to grow in value for several decades and then take a tax-free distribution that is almost entirely earnings (like they currently allow with HSAs).
Don’t wait until the last minute to request a distribution, as it can take weeks or even months for a 529 plan to issue and send the payment. If you request a distribution in December, you might not receive it until the next year. You should request the distribution early enough so that it will be received in the same tax year as the qualified expenses are paid.
For this reason, it is best to request a distribution by electronic funds transfer (EFT) instead of check, since it can take longer for a check to be delivered by the U.S. Postal Service. However, some 529 plans limit transfers to only the account owner’s bank account.
Paying for school with a 529 is a great way to get expenses paid. But what about budgeting while you're in school? Check out The College Investor's College Budgeting Guide.
Using Distributions StrategicallyThere are several factors that may affect how much of a distribution you take from your 529 plans each year. Consider the following questions.
- Do you spread it out evenly over all four years? This approach is focused more on cash flow than on maximizing financial aid or tax breaks.
- Do you front-load the distributions to reduce the need to borrow during the early years? When you do it this way there’s less time for interest to accumulate on the student loans during the in-school years.
- Do you back-end the distributions? This helps maximize the return on investment during the in-school years.
- Do you try to optimize your use of tax credits, like the American Opportunity Tax Credit (AOTC)? The AOTC is worth more per dollar of qualified expenses than a tax-free distribution from a 529 plan.
For strategic optimization of the tax credits, you’d carve out $4,000 a year in tuition and textbook costs to qualify for the maximum AOTC, assuming you’re below the income phaseouts. The income phaseouts are $80,000 to $90,000 for single filers and twice that for married filing jointly. You can pay for the $4,000 using cash or student loans.
If you need to borrow, you will start with the senior year loan limits back to the freshman year, figuring out how much you’ll need to borrow each year.
Dependent students can borrow up to:
- $5,500 in federal student loans as a freshman
- $6,500 as a sophomore
- $7,500 as a junior
- $7,500 as a senior
So, if you will need to borrow $20,000, you’ll borrow $7,500 as a senior, $7,500 as a junior and $4,000 as a sophomore.
After addressing the AOTC and student loan limits, you’ll pay for the remaining expenses using qualified distributions from your 529 plans.
What If You Take Too Much of a Distribution?If you happen to take too much of a distribution, the excess will be non-qualified. The earnings portion of a non-qualified distribution is subject to income tax at the recipient’s rate, plus a 10% tax penalty, and possible recapture of state income tax breaks attributable to the distribution.
The 10% tax penalty is waived when the non-qualified distribution is caused by the receipt of tax-free educational assistance. The waiver is limited to the amount of the qualified expenses associated with the tax-free educational assistance. You will still have to pay income tax on the earnings even when the tax penalty is waived.
Examples of tax-free educational assistance include tax-free scholarships or grants, veterans’ educational assistance, employer-provided educational assistance, and attendance at a U.S. military academy, as well as the qualified expenses that justify the receipt of the American Opportunity Tax Credit (AOTC) and Lifetime Learning Tax Credit (LLTC). The tax penalty is also waived when the student dies or becomes disabled.
Re-contributing Refund Back Into A 529 PlanIf you get a refund from your college or university, you have a few options for avoiding the income tax and tax penalty on a non-qualified distribution.
One option is to use the refund to pay for other qualified expenses in the same tax year.
Another option is to recontribute all or part of the refund to a 529 plan. The ability to put a college refund back in a 529 plan was enacted by the Protecting Americans from Tax Hikes Act of 2015 (PATH Act). The IRS published guidance concerning re-contributions, rollovers and qualified higher education expenses in Notice 2018-58.
The re-contribution can be to the same or a different 529 plan, but it must be for the same beneficiary as the original 529 plan. The re-contribution is capped at the amount of the refund. Only refunds of qualified higher education expenses are eligible. The refund must be re-contributed within 60 days of receipt. Re-contributions do not count against the 529 plan’s contribution limits.
Picking A Plan Or Portfolio For The DistributionIf there are several portfolios within the 529 plan. If you are not fully distributing the entire 529 plan, you may be able to choose the portfolio from which the distribution is taken.
Some 529 plans let you specify the portfolios and some do not. If the 529 plan does not allow you to specify the portfolios, the distribution will be taken proportionally from all of the portfolios.
Likewise, if you have several 529 plans for the same beneficiary, you can choose the 529 plan from which the distribution is taken.
If the distribution is a qualified distribution, choose the 529 plan with the highest percentage earnings, since the earnings portion of the distribution will be tax-free.
If the distribution is a non-qualified distribution, choose the 529 plan with the lowest percentage earnings. This will minimize the taxes and tax penalty on the non-qualified distribution by reducing the percentage of the distribution that is earnings.
Recipient of DistributionThe 529 plan distribution can be made payable to the account owner, the beneficiary or paid directly to the educational institution. If the distribution is paid directly to the educational institution, it is treated as though it is paid to the beneficiary.
It is important to keep receipts, canceled checks, bills, statements and other documentation of purchases of qualified expenses.
Due to federal privacy rules, a student’s parents will not necessarily get to see the student’s bills and other college expenses, even though they may be paying for it.
There are a few options. One is for the student to sign a FERPA waiver, to allow the parents to get copies of the bills. Otherwise, the parents will have to ask the student to provide them with copies of the receipts and bills.
If the distribution is a non-qualified distribution, it may be better to have it paid to the beneficiary instead of the account owner, since the beneficiary will usually be in a lower tax bracket. The earnings portion of a non-qualified distribution is considered taxable income to the recipient. However, some 529 plans limit non-qualified distributions to the account owner.
Impact on Financial AidSending the payment directly to the college or university can make it easier to demonstrate that the distribution was used to pay for qualified higher education expenses. However, some colleges may treat the payment as a resource (reducing financial aid eligibility on a dollar-for-dollar basis) instead of as a payment on the account.
Qualified distributions from a 529 plan should not otherwise affect eligibility for need-based financial aid.
- A 529 plan owned by the student or parent is reported as an asset on the FAFSA, but qualified distributions are ignored.
- A 529 plan owned by anybody else, such as a grandparent, is not reported as an asset on the FAFSA.
Previously, qualified distributions from such a 529 plan would be reported as untaxed income to the student, reducing aid eligibility by as much as half of the distribution amount. But, FAFSA simplification has eliminated the question where this was reported on the FAFSA, starting with the 2024-25 FAFSA. Since the 2024-25 FAFSA is based on 2022 income, distributions from a grandparent-owned 529 plan in 2022 and subsequent years will no longer affect aid eligibility, assuming no delays in implementing the simplified FAFSA.
Non-qualified distributions, however, will be reported in income on the recipient’s federal income tax return and thus affect aid eligibility. Part of this may be sheltered by the student or parent income protection allowance.
- Up to $7,600 in student income is sheltered on the 2023-24 FAFSA. This may be increasing to about $10,000 on the 2024-25 FAFSA, due to FAFSA simplification.
- The parent income protection allowance depends on family size, and will typically range from about $25,000 to about $45,000 for family size of 2 to 5 in 2024-25. Need to open another 529 in a different state? Here's our resource for where to open a 529 in your state.
How To Request A DistributionDistributions may be requested by the 529 plan’s account owner, not the beneficiary. If the 529 plan is a custodial 529 plan, distributions may be requested by the custodian.
You can request a distribution online, using the 529 plan’s website.
You can also download a withdrawal request form from the 529 plan’s website and mail it to the plan. A Medallion Signature Guarantee may be required if the withdrawal is for a large amount or there have been recent changes in the account. (A notarized signature is not sufficient.) There may also be an extra waiting period for recent changes, typically at least 15 days.
Some 529 plans allow a distribution to be requested by telephone and some do not.
When requesting a distribution, you will need to provide the 529 plan account number, the account owner’s name and Social Security Number (SSN) or Taxpayer Identification Number (TIN), the beneficiary’s name and SSN or TIN. You will also have to specify the recipient of the distribution and whether the distribution is qualified or non-qualified.
Reporting Distributions To The IRSThe 529 plan will report the distribution to the IRS and the recipient on IRS Form 1099-Q.
Box 1 of the 1099-Q provides the total distribution amount. Box 2 provides the earnings portion of the distribution and Box 3 provides the contributions portion of the distribution. Box 2 and Box 3 should sum to be the same as the amount listed in Box 1.
Only the earnings portion of a non-qualified distribution is reported on the recipient’s income tax returns. The earnings are assumed to be proportional between the qualified and non-qualified portion of the distribution, based on the ratio of the adjusted qualified expenses (after subtracting qualified expenses that are attributable to other tax breaks) to the total distribution amount. This ratio is the percentage of the distribution that is qualified. Multiply this ratio by the earnings portion of the distribution and subtract the result from the earnings portion of the distribution to determine the non-qualified earnings.
The non-qualified earnings are reported on line 8z (Other Income) of Schedule 1 of IRS Form 1040.
If a non-qualified distribution is subject to the 10% tax penalty, use IRS Form 5329 (Additional Taxes on Qualified Plans) to calculate the amount of the penalty and report it on line 8 of Schedule 2 of IRS Form 1040.
1099-Q forms are usually provided by January 31.
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Taking money out of a 529 plan is more complicated than putting money into a 529 plan. Here's how to take money out without getting penalized.
When tax filing season opened up earlier this year, the IRS asked millions of Americans to hold off on filing their returns. The agency hadn’t determined how it should treat the billions of dollars of state stimulus funding that 21 states distributed to residents throughout 2022.
But anyone who paused on tax filing to await the IRS’s decision can doubly rejoice. The IRS is ready to take your tax return, and your state stimulus money is probably not taxable.
We’re partnering with Spruce℠, a new mobile banking service from H&R Block, to help you understand what you need to know about filing your taxes with your state stimulus payment. If you’re looking for a better banking option, Spruce might be a good choice for you. Spruce℠ is mobile banking for people who want to be good with money. And a $50 bonus for qualified direct deposits is a great place to start. Check out Spruce here >>
Here’s what you need to know about this decision before you file your taxes.
Table of ContentsWhich State Stimulus Checks Aren’t Taxable?Which Stimulus Checks Are Probably Not Taxable?What If I Didn’t Get My State Stimulus Check?Are You Happy With Your Bank For Your Tax Refund?Which State Stimulus Checks Aren’t Taxable?The delayed guidance from the IRS affected taxpayers in 21 states. Thankfully, the IRS determined that most of the state stimulus checks were for General Welfare or Disaster Relief. According to the IRS, this type of payment isn’t taxable.
If you received a payment from the following states, you can file today:
- Alaska Energy Relief Payment (The Permanent Fund Dividend is still taxable)
- California Middle-Class Tax Refund
- Colorado Cash Back
- Connecticut Child Tax Rebate
- Delaware Relief Rebate Program
- Florida Pandemic Temporary Assistance to Needy Families
- Hawaii Act 115 Refund
- Idaho 2022 Tax Rebate
- Illinois Individual Income Tax Rebate
- Illinois Property Tax Rebate
- Indiana Automatic Taxpayer Refund #1 & #2
- Maine Pandemic Relief Payments
- New Jersey ITIN Holders Direct Assistance Program
- New Mexico Tax Rebates and Household Relief Programs
- New York Supplemental Child Credit
- New York Supplemental Earned Income Tax Credit
- Oregon One-Time Assistance Payments
- Pennsylvania One-Time Bonus Rebates
- Rhode Island 2022 Child Tax Rebates
If you received any of the above payments, you can file as usual. Neither your tax filing process nor your refund will change due to the payment.
If your tax software may ask you about these supplemental payments, you don’t need to worry. The software will use the information you provide to figure out your state tax returns. Your Federal return won’t be affected because the IRS has officially determined that it doesn’t need to know about your state relief payments.
Which Stimulus Checks Are Probably Not Taxable?If you live in Georgia, Massachusetts, South Carolina, and Virginia, the taxability of your relief checks is a bit murkier. Most people will not have to pay taxes on the money they received from these states, but some will.
In these four states, you will not owe taxes unless itemized your taxes in 2021 and you received a Federal tax benefit from claiming the state and local tax deduction. Folks who meet both conditions will need to declare a portion of the income they received from the state.
You can expect to receive tax form 1099-G from your state, but figuring out how much you need to declare isn’t straightforward unless you’re the type of person who is willing to read the 1040 filing instructions.
Instead of doing the math on your own, consider enlisting help from tax software or an accountant. Either software or an accountant can figure out the right amount of income that needs to be declared. If you plan to use tax software, prioritize using the same tax software as last year. Most companies save your tax return for several years, and using the same software will make filing easier this year.
What If I Didn’t Get My State Stimulus Check?If you were eligible to receive a state stimulus payment but didn’t receive a check, you may still be able to get funds from your state. Use the links above to get directions on how you can claim the money you’re owed. Many states will allow you to claim these funds into 2023, but you may have to file taxes from 2021 or 2022 to receive a payment.
Are You Happy With Your Bank For Your Tax Refund?With all of this talk of tax refunds on your mind, you also should ask yourself if you’re happy with your bank - where you’re likely depositing your tax refund. If you’re paying monthly fees, or having to ensure you get enough direct deposits to avoid fees - maybe it’s time to switch?
That’s where Spruce℠ comes in. Spruce℠ is a new mobile banking platform for people who want to be good with money. It’s built by H&R Block and offers everything you’d expect from a mobile bank - with no monthly maintenance fees! Right now, you can earn a $50 bonus when you sign up and have qualified direct deposits. Check out Spruce here >>
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If you want to pay your entire tax bill at once but don't have the money, what do you do? This article explains some of your options!
If you drop a class or drop out of college, you may have to repay all or part of the financial aid you received. How much depends on the type of financial aid and when you dropped the class or left school.
Even though the Federal Pell Grant is a grant that normally does not need to be repaid, you may have to repay all or part of it in certain circumstances.
And let's face it, even the best students may drop a class here and there. So here's what you need to know about the impact on your financial aid if you drop a class or even drop out.
Table of ContentsDropping a ClassWhat To Do Once You Drop Out of CollegeWill You Have to Repay Your Student Loans?What If You Have to Repay Financial Aid?Satisfactory Academic Progress (SAP)What to Do Before You Drop a Class or Drop OutCommon QuestionsDropping a ClassDropping a class may affect your enrollment status. Changes in your enrollment status may affect your financial aid eligibility, depending on when you dropped the class.
If you are no longer enrolled full-time, the Federal Pell Grant amount may be reduced in proportion to your enrollment status. The proration options include full-time, three-quarters time, half-time and less than half-time.
Twelve credits a semester is considered full-time for federal student aid purposes. This is even though you have to take 15 credits a semester in order to graduate within four years for an undergraduate Bachelor’s degree.
Eligibility for student loans is not prorated, so long as you are enrolled on at least a half-time basis. If you are enrolled at least half-time, you can borrow the full loan limits. If you drop below half-time enrollment, however, you lose eligibility for federal student loans entirely and your existing loans may enter repayment.
Here's How Timing MattersIf you drop a class...
- Before the start of the semester and before financial aid is disbursed: Your financial aid will be adjusted before disbursement and you will not owe a refund of your financial aid.
- After financial aid has been disbursed but before your college’s add/drop deadline: your financial aid will be adjusted. Then, you may be required to repay all or part of the financial aid you received.
- After financial aid has been disbursed and after the add/drop deadline: Your financial aid will not be adjusted. You may still owe tuition. At most colleges, you don’t get a tuition refund if you drop a class after the add/drop date. School is expensive. Here are ways to pay for it.How To Pay For College: The Best Order Of Operations
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What To Do Once You Drop Out of CollegeIf you drop out of college, there is a complicated set of rules called Return of Title IV (R2T4) that specify how the withdrawal affects your eligibility for federal student aid.
The following summary covers just the essentials.
Federal student aid is earned on a proportional basis up until 60% of the way through the semester, at which point you are considered to have earned 100% of your financial aid.
Any unearned aid must be repaid. If you withdraw after reaching the 60% point, your federal student aid will not have to be returned to the federal government. Learn more about when you have to repay grants.
Federal loans must be returned before grants. The goal is to leave the student who withdraws with as little debt as possible.
Note that the college’s refund policy does not necessarily match the R2T4 rules. Many colleges do not provide refunds if a student drops out after the add/drop date.
Will You Have to Repay Your Student Loans?If you drop out of college or drop below half-time enrollment, you will have to start making payments on your student loans. Your loans will enter repayment six months after you graduate, drop out of college or drop below half-time enrollment.
If you re-enroll in college on at least a half-time basis, you won’t have to make payments on your federal student loans. This is because your federal student loans will once again be in an in-school deferment. If you re-enroll during the six-month grace period, your grace period will be restored.
If you struggle to make payments on your student loans, there are a few options for dealing with financial difficulty, some short-term and some long-term.
- Short-term: Economic hardship deferment, unemployment deferment and general forbearances. The deferments and forbearances suspend repayment for up to three years each. Interest may continue to accrue.
- Long-term:Income-driven repayment plans, which base the monthly payment on your income as opposed to the amount you owe. Income-driven repayment plans often yield a lower monthly payment than extended or graduated repayment.
What If You Have to Repay Financial Aid?If you have to repay your Federal Pell Grant, you will have 45 days to repay the overpayment or make satisfactory repayment arrangements.
Failing to repay the Federal Pell Grant may affect your ability to return to college or to qualify for more financial aid. Some colleges will withhold your academic transcripts and diplomas if you owe a debt to the college and have not made satisfactory repayment arrangements.
Satisfactory Academic Progress (SAP)Dropping classes may affect your future eligibility for federal student aid.
You must maintain Satisfactory Academic Progress (SAP) to be eligible for federal student aid. SAP requires you to maintain at least a 2.0 GPA on a 4.0 scale.
It also requires you to be taking and passing enough classes to be on track to graduate within 150% of the normal time-frame for your degree (e.g., within 6 years for a Bachelor’s degree and within 3 years for an Associate’s degree).
Dropping classes may cause you to no longer make SAP, jeopardizing future aid eligibility.
What to Do Before You Drop a Class or Drop OutBefore you drop a class or drop out, contact the college’s financial aid office to ask about the impact on your financial aid.
You should also explore other options besides dropping a class or dropping out. Most colleges have academic support services, such as free tutoring, writing centers and academic counseling centers, that can help you deal with academic challenges.
The financial aid office may also offer emergency financial aid funds if you are thinking of dropping out because of money problems. The goal of emergency aid is to help keep you in school, so that small financial problems don’t escalate.
Frequently Asked Questions What happens if you fail a class? Do you have to repay your grants?
If you fail a class, you don’t have to repay your grants. It is only if you drop a class or drop out of college that you may have to repay your grants.
If you fail a class, however, you may lose eligibility for future grants if you are no longer maintaining Satisfactory Academic Progress.
If you fail a class, you do have to make payments on your student loans after you graduate or drop below half-time enrollment, the same as if you passed the class. You don’t get a refund for failing a class.
Can I get a Federal Pell Grant at more than one college?
You cannot get a Federal Pell Grant at two colleges at the same time. If you happen to receive a Federal Pell Grant at two or more colleges, you will have to repay the extra Federal Pell Grants. When a student receives two or more Federal Pell Grants at the same time, it is flagged in a federal database that tracks the federal grants and loans received by each student and the college financial aid administrators will be notified.
What about private scholarships?
Private scholarships have their own rules. Some scholarships adopt rules like the ones for federal student aid. Others require you to repay the money in-full if you drop out. Check with the private scholarship provider for their rules.
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If you drop a class or drop out of college you may have to repay all or part of your financial aid. How much depends on a number of factors.
If you’re reading this, you probably either have student loan debt or you’re about to incur student loan debt.
With student loan debt balances on the rise, your best bet is to pay off your student loan debt as quickly as possible, or better yet, stop the debt from piling up by taking the preventative measures.
Many graduates have to put their life on hold because of common student loan mistakes. Avoid making these mistakes and get rid of your student loans in 3 easy steps!
According to USA Today, up to 68% of college graduates enter the workforce with student loan debt. Our study found that the average student loan debt at graduation is roughly $30,000.
To minimize the impact, follow these 3 simple steps to avoid unnecessary debt from accumulating.
Table of ContentsStep One: Pick The Right College And Fast Track Your GraduationSelecting The Right CollegeResearch Scholarships, Grants and Fill Out Your FAFSACreate An Efficient Plan For GraduationStep Two: Budget And Save To Minimize Student Loan DebtCreate a Realistic Budget For Your Life Right NowSave Up For The FutureStep Three: Increase Your Income And Aggressively Pay Down The BalancePay Tuition In Installments While In SchoolWork To Minimize DebtJobs That Pay Off Your Student Loans Prepay loansPay the interestFinal ThoughtsStep One: Pick The Right College And Fast Track Your GraduationSelecting The Right CollegeFind out how much tuition will cost, and also estimate all the other costs, such as textbooks, materials, living expenses, and additional costs if you are living on campus. This is going to be called the Net Price. Check out our guide to how much college really costs.
Out of your top college choices, closely look at cost, lifestyle, and career opportunities. Weigh the pros and cons of each college before making your selection.
If you’re trying to narrow down your choices for which college to attend, look at your top choices, and rank them by tuition. Also do some research to find out whether classes fill up quickly, and what alternatives are available.
Related: Where To Apply To College: Finding Academic and Financial Fit
The last thing you want is to prolong graduation and deal with half full semesters because your required courses are not available, and there are no alternatives.
Regardless of whether or not you got accepted into your dream college, you can also start out at a community college and then transfer to your dream college.
A couple of years at a community college will help you get your grades up and increase your chances of getting a good scholarship or grant. As a bonus, this option will save you two years of high cost college tuition right there.
If you’re still not sure about whether you can realistically pay off your student loan upon graduation, a good rule of thumb is that the loan balance should not exceed your expected starting salary.
Research Scholarships, Grants and Fill Out Your FAFSABefore you get overwhelmed about the cost of tuition, research all the grants and scholarships available from your top college choices. Find out how much you need with and without grants and scholarships.
Next, explore your options for financial aid. Before you turn to student loans, make sure you know all of your options for grants and scholarships. Fill out your Free Application for Federal Student Aid (FAFSA) and start looking for scholarships and grants right away.
Finally, figure out how much you would need to close the gap, and whether having a job would have an impact. A job at the college coffee shop might save you a few thousand dollars, but it could also adversely impact your grades.
If you prefer not to work while in college, start planning your career so that you can have a cushy job that supports you once you graduate. Private loans should be your last resort for closing the tuition gap.
A word of caution about student loans: know what you’re getting into before you take out student loans. You’ve read horror stories about people not being able to afford everyday expenses as their student loan piles up.
Know what you’re getting into when you borrow money for school. First, make use of federal student loans, and then look at private loans as a last resort. Remember, private loans usually don’t offer the same benefits as federal student loans, such as deferment, forbearance or forgiveness.
Create An Efficient Plan For GraduationFigure out your graduation requirements and determine whether tuition is calculated by semester/quarter or by unit. If tuition is calculated by semester/quarter, you can graduate fast with the right planning and discipline.
Take summer classes and transferrable units at a local community college to cut back on costs and also make up for issues with course availability. For example, some colleges will permit students to take language classes that easily fill up at community colleges. That way, you are making the most of your time, and also saving money, especially if your school charges tuition per unit.
Step Two: Budget And Save To Minimize Student Loan DebtCreate a Realistic Budget For Your Life Right NowYou want to enjoy the college experience, but you don’t want to go broke in the process. For nights out, find places where you can get good deals on food and drinks to cut back on expenses while dining out.
While you’re in school, cut back on your living expenses by either living at home or renting an apartment off campus rather than living on campus. Decide how to plan your meals and live well ahead of time. Put away money while you’re in school, whether it comes from a job or financial aid.
To get started, create a realistic college budget. List all of your income, including financial aid, income from jobs, or contributions from your parents.
Next, list out your expenses, starting with necessities such as tuition and fees, books, rent or room and board, groceries, utilities personal items, transportation, and health insurance. Include all minimum payments for credit cards and debt in your budget.
Use most of the money leftover to pay down your student loan. If you have a negative number, you will have to redo your budget so that your income covers all of your expenses. Your budget should plan for emergencies, car maintenance (if you have a car), and larger expenses such as a new laptop or a vacation.
If you’re already out of school, figure out how much you need to pay off, and then create a budget. Calculate your income and expenses, and see how much you have leftover. Include the minimum payment in your budget. Use most of the extra money to pay off your loan.
Save Up For The FutureWhether your income consists of student loans, help from your parents, or your salary, you need create good financial habits from the start. Begin by putting away at least 10% per month.
Saving each month will help you create good financial habits that will benefit you in your adult life and beyond.
Check out our list of the Best Budgeting Apps to get started.
Step Three: Increase Your Income And Aggressively Pay Down The BalancePay Tuition In Installments While In SchoolIf you’re able to pay tuition, pay it in installments to avoid losing money at all once. Even the set up fee or convenience fee will probably be far less than the interest rate for student loans.
Work To Minimize DebtIf you can get your hands on a paid internship, you can get credit for working while having some money to pay off student loan interest.
If you’re still in school, a part-time job can be used to replace or reduce loans. Certain jobs can even cover your living expenses in addition to your salary. For example, a job as a resident assistant can help cover living costs, such as room and board. However, if you’re not careful, working while you’re in school could take up the time you need to study and live a balanced college life.
If you’re out of school, look for opportunities that will further your goals.
Jobs That Pay Off Your Student Loans Look for jobs that provide student loan forgiveness or concessions that are in line with your profession. Certain professions will even pay off your student loans if you stay there long enough. If you are willing to put in a few years, this is a good choice.
Prepay loansIf you get a hefty tax refund, bonus, or pay raise, don’t spend it! Use the money to prepay your student loans, or pay them down if you’re already out of school.
If you have smaller student loan balances, don’t fall into the trap of procrastination. If you prepay your student loans, you are more likely to pay off your student loans at a faster pace.
Pay the interestAlthough you don’t have to pay student loan interest while you’re in school, you students with unsubsidized Stafford loans aren’t required to pay loan interest while they’re in school, there are potential savings if you pay interest.
If you don’t pay down your student loans fast enough, you may have to consolidate your eligible student loans and make arrangements for the rest. Don’t put yourself in that position - start taking preventative measures now.
Final ThoughtsBegin with the end in mind. Decide on a college, estimate the costs, and find a way to graduate as quickly as possible, especially if your school tuition is calculated by semester or quarter rather than per unit.
Explore all of your options for grants and scholarships, and then find out how much you need to close the gap. Explore financial aid and calculate how much you can earn if you get a job.
Have you used any of these tips to keep your student loan debt piling up while in school? If you’re a graduate, have you used any of these strategies to pay off your student loans? Tell us in the comments below!
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Hooray! You’ve been accepted to your school of choice and have been awarded a financial aid package. This is certainly an exciting time, but once you open the financial aid award and begin reading, your excitement turns to confusion and frustration.
Welcome to the annual interpreting of your financial aid award. While there are some guidelines for schools to follow when creating financial aid awards, for whatever reason, there aren’t any strict standards on formatting. This often leaves many schools using unfamiliar formats and terminology.
Unfamiliar language and cryptic codes can be found throughout many financial aid awards. Loans and grants can be lumped together. Codes such as “L” or “LN” are sometimes the only indication that an amount is actually a loan. In fact, most financial aid students receive come in the form of student loans.
Additionally, the true cost of attending the school is often underestimated on award letters. This can leave students constantly coming up short on funds to pay for school. In this article, you’ll learn how to understand your financial aid award.
Table of ContentsCost of College TerminologyArriving at the True Cost of CollegeFront-Loading and Private ScholarshipsHow To Appeal Your Financial Aid AwardFinal ThoughtsCost of College TerminologyUnderstanding the terms used to describe the cost of college can help you better interpret your award letter and ask questions when something doesn’t seem to make sense.
Starting with “net cost,” this is the difference between the cost of attendance (all college costs) and the total financial aid award. For example:
Cost of Attendance
- $45,000: Tuition & Fees
- $15,000: Room & Board
- $2,000: Books & Supplies
- $1,000: Transportation
- $3,500: Miscellaneous
$66,500: Total
Financial Aid Package
- $6,000: Fed Pell Grant
- $2,500: Federal Perkins L.
- $13,000: Parent Plus L.
- $8,000: Fed Unsub Staf
$29,500: Total
$37,000: Expected Net Cost
From the above, net cost subtracts out all forms of financial aid, of which there are two:
- Gift aid: Scholarships and grants (money that doesn’t have to be repaid)
- Self-help aid: Loans and student work studies (money that must be repaid)
The formula for “net cost” is: Net cost = cost of attendance − (full) financial aid.
Net price subtracts out only gift aid. Using the above example, it will look like this:
Cost of Attendance
- $45,000: Tuition & Fees
- $15,000: Room & Board
- $2,000: Books & Supplies
- $1,000: Transportation
- $3,500: Miscellaneous
$66,500: Total
Gift Aid
- $6,000: Fed Pell Grant
$6,000: Total
$60,500: Expected Net Price
The formula for “net price” is: Net price = cost of attendance − gift aid.
What do the differences between net cost and net price mean? Net cost can give the impression that financial aid is covering more cost than in net price. This is misleading. The student will still have to pay back any loans or participate in work-study programs that are included in net cost.
Net price can be thought of as the discount sticker price on college cost. This is the number that you will need to somehow pay for.
Depending on the award letter, net cost or net price will be used. Don’t let either throw you off. Now you know what is involved in arriving at both numbers.
"Expected family contribution (EFC)" is another number that might be buried in your award letter. That can be included in the net cost number since it is money that the student must come up with.
You can check out this Net Price Calculator here.
Arriving at the True Cost of CollegeNo matter what your award letter looks like, it is not likely to show the true cost of college. In the examples above, the cost of attendance has several line items included. Don’t be surprised if your school only lists tuition and fees. This can leave out $20K in cost once other expenses are added back in.
If the school is calculating net price based on only two line items for the cost of attendance, this will be grossly underestimated. Many students are caught off guard by this fact and only realize it once they are a few months into their education.
This creates a situation where a student is scrambling to find some way to finance various costs associated with their education. In the worst case, some students simply give up and leave school.
Front-Loading and Private ScholarshipsBe aware that some colleges offer higher gift aid during the first year and much less after that. This is a practice referred to as "front-loading." Check with the financial aid office for more information if this is something the school does. You might not get a straight answer. In that case, the U.S. Department of Education’s College Navigator can be of some help. Either way, do your best to get an answer so that you can plan properly.
If you are receiving private scholarships, they can have a negative impact on your needs-based financial aid. Depending on the school, either your gift aid or self-help aid may be reduced. Again, you’ll want to check with the school on what impact any private scholarships may have on your financial aid.
How To Appeal Your Financial Aid AwardYou’ve received your fat admissions packet, toured the campus, and even bought a t-shirt, but your financial aid package falls short of expectations. Maybe you didn’t get any scholarships or grants – just student loans. Or maybe you were expecting an amount much larger than what was offered.
It’s important to note that appealing a financial aid award successfully is pretty rare. However, it doesn’t mean you can’t try. And the earlier you try, the better. Here’s what you need to do.
Set Up An Appointment With A Financial Aid OfficerBefore you appeal a financial aid award, check out your school’s financial aid website. Bigger schools usually publish a formal process for appealing financial aid decisions. If the school has the process published, follow it. Smaller schools might not have the process published. In that case, call to set up an appointment.
Once you know your school’s policies, reach out. It’s better to call than to email a financial aid officer. Why? It’s easy for overworked financial aid officers to miss an email or even two. A few people can serve thousands or tens of thousands of students.
When you call, request an appointment to meet with a financial aid officer. An in person meeting is the best way to get a financial aid officer to become your advocate. If you can’t meet in person, set up a phone call to review your award.
While you’re making calls, consider calling the admissions office too. The admissions office may have information about unclaimed merit scholarships that can help you out.
Prepare For Your MeetingWhen you meet with a financial aid officer, you’ll request a reassessment of your financial aid award. If you’re going to get more aid, you’re going to need to prepare.
These are a few things you need to know prior to your meeting:
- How is your school calculating expected family contributions? Your university may use the EFC number from your FAFSA, or they might use a number calculated from the CSS Profile. Either way, you need to know how much your university expects from your family
- What do you and your parents think is your unmet need? Have a specific number in mind.
- Gather documentation that shows why you and your parents can’t cover the gap. A family budget, or documentation of a family change (such as divorce, job loss, etc.) goes a long way in altering aid.
- Do you have a better package elsewhere? A school may increase your merit aid if they know another school offered you more money.
- Did your situation change from when you first applied? This can be helpful in understanding any changes. What To DiscussDuring the meeting with a financial aid officer, you need to be careful about how you conduct yourself. Financial aid officers aren’t going to feel comfortable calling the meeting a negotiation. You and your parents need to be careful to keep the tone of the meeting assertive but non-confrontational. You want the financial aid officer to become an advocate and a partner with you.
Start the meeting by saying, “I would like you to reassess my financial aid awards package because (reason 1) and (reason 2).” Would you like to see documentation about these reasons?
Then, take the time to listen. You should view the financial aid officer as a partner. The financial aid officer should be able to explain what they can do, and what they cannot do. If you’re an accepted student, they want to work with you. However, if enrollment is high they might not have more merit awards or subsidized loans to offer.
If the financial aid officer is unable to offer grants, bursaries, or scholarships ask them to keep an ear out for opportunities. Remember, a financial aid officer is your advocate not your adversary.
Most of the time, a financial aid officer won’t give a definitive answer about adjusting financial aid during the first meeting. Instead of pressing for an immediate answer, ask when and how you should follow up with them.
How To Follow Up AfterOnce you’re done with the meeting, thank the financial aid officer and promptly follow up with any documentation they requested. Sending a thank you note through the mail is also a thoughtful gesture.
If you don’t hear back about a reassessment, follow up via email and a phone call. The financial aid officer might not adjust your award, but they should tell you a definitive yes or no.
Students who don’t get enough aid from their school still have options. Some schools will push you to expensive private loans, but those should be a last resort. Consider these options first. You can work more during your education. You can choose a less expensive school. You can defer enrollment for a semester to work and save money. Finally, you can find outside grants and scholarships.
If you end up enrolling at the school, keep in touch with the financial aid officer. They can help you navigate tuition hikes and changes to their aid policies. College lasts four years, and you need to prepare for all four years.
Final ThoughtsNavigating your financial aid award can be difficult and confusing. They don't make paying for college easy! However, you owe it to yourself to work hard to get any free money you can to pay for school.
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The U.S. Department of Education published a Notice of Proposed Rulemaking (NPRM) in the Federal Register on Wednesday, January 11, 2023. This NPRM proposes a new income-driven repayment plan that will cut the monthly payments on some federal student loans in half.
The U.S. Department of Education estimates that the new REPAYE plan will cost $137.9 billion over 10 years, assuming that about a third of borrowers choose the new REPAYE plan.
Here's what to know about New REPAYE student loan repayment plan, including potentially lower student loan payments, more loan forgiveness opportunities, and more.
Table of ContentsPublic Comments On The Proposed RuleChanges To Existing Income-Driven Repayment Plans Lower Student Loan Payments Under The New REPAYE PlanCounts More Payments Toward ForgivenessNew Options For Delinquency And DefaultPublic Comments On The Proposed RulePublic comments must be received by February 10, 2023. As of February 1, 2023, more than 8,000 comments have been received. Most of these comments, however, are not substantive comments. They don’t provide new information, present reasonable alternatives to the proposed rule or identify or correct errors in the assumptions or analysis. A public comment is not a vote in favor or against the proposed rule. Public comments that state that the commenter agrees or disagrees with the proposed rule will be ignored.
The U.S. Department of Education will respond to the substantive comments in the preamble to a final rule published in the Federal Register.
If the final rule is published by November 1, the new rule will go into effect the following July 1. In some situations, the U.S. Department of Education can implement the new rule earlier.
Changes To Existing Income-Driven Repayment Plans There are three main purposes for income-driven repayment plans:
- Providing a safety net for borrowers
- Providing affordable payments pegged to income instead of the amount owed
- Integration with Public Service Loan Forgiveness
The changes proposed by the Biden Administration are focused primarily on making student loan payments more affordable.
The new income-driven repayment plan will be implemented as a change to the Revised Pay-As-You-Earn Repayment Plan (REPAYE), as opposed to creating a brand new repayment plan.
Borrowers who are already in REPAYE will get the benefit of the changes to REPAYE immediately when they go into effect. Borrowers in other repayment plans can choose to switch into "New" REPAYE.
The changes will also simplify the set of repayment plans, by phasing out enrollment in existing income-driven repayment plans.
Specifically, the new regulations will limit eligibility for Pay-As-You-Earn Repayment (PAYE) and Income-Contingent Repayment (ICR) to borrowers who were in PAYE and ICR on the effective date of the new regulations, except for Parent PLUS loan borrowers. Parent PLUS loan borrowers are ineligible for the new REPAYE plan and will continue to be eligible for ICR on Federal Direct Consolidation Loans that repay a Parent PLUS loan.
The new regulations will not be able to eliminate Income-Based Repayment (IBR), because IBR was enacted by statute. Borrowers in REPAYE can choose to switch into IBR only until they have made 120 payments under REPAYE. This primarily affects graduate students, who may choose to switch into IBR because it has a shorter 20-year repayment term instead of the 25-year repayment term available to graduate students under REPAYE.
Lower Student Loan Payments Under The New REPAYE PlanThe new REPAYE plan reduces the monthly student loan payments by changing the percentage of discretionary income, changing the definition of discretionary income and changing the repayment period.
- Percentage of Discretionary Income. The percentage of discretionary income will be reduced to 5% for undergraduate loans. It will remain at 10% for graduate loans, but will combine them using a weighted average based on the original loan balances of the loans that are still outstanding.
- Definition of Discretionary Income. The definition of discretionary income will be adjusted gross income (AGI) minus 225% of the poverty line, instead of 150% of the poverty line.
- Repayment Period. The remaining debt will be forgiven after 20 years of payments (240 payments) for undergraduate debt and 25 years (300 payments) for graduate debt. There will be a shorter repayment period and earlier forgiveness for borrowers with low original loan balances.
- Loan Forgiveness. If the original loan balance is $12,000 or loss, the remaining debt will be forgiven after 10 years. Add one year for each additional $1,000 in original loan balance above $12,000. The use of one-year increments is intended to prevent cliff effects. If a student borrows more student loans later, the time to forgiveness will adjust. Up to $22,000 of undergraduate debt and up to $27,000 of graduate debt will qualify for a shorter repayment period. Note that $12,000 is the maximum a dependent student can borrow in the first two years of undergraduate education, such as at a community college.
The time in repayment may increase for some borrowers, as compared with the old REPAYE plan, since the monthly payment will be lower, yielding slower progress toward paying off the debt in full.
It's estimated that more than two thirds (69%) of undergraduate borrowers will reach the 20-year forgiveness point and more than 98% of graduate students will reach the 25-year forgiveness point under the new REPAYE plan.
The new REPAYE plan will no longer charge accrued but unpaid interest after applying the borrower’s payment. So, loan balances will no longer grow when borrowers make the required payments, even if the payments are less than the new interest that accrues. This eliminates a significant source of stress for borrowers who were previously negatively amortized.
If a married borrower files their federal income tax returns as Married Filing Separately, only that borrower’s income will count toward the loan payment under REPAYE. The borrower’s spouse will be excluded from household size in the calculation of the poverty line.
Counts More Payments Toward ForgivenessProgress toward student loan forgiveness will no longer reset when the borrower consolidates their loans. Payments before consolidation will count toward forgiveness based on a weighted average of the loan balances of the loans with and without qualifying payments.
In addition, more deferment and forbearance periods will count toward forgiveness. This includes the cancer deferment, rehabilitation training program deferment, unemployment deferment, economic hardship deferment (including Peace Corps), military service deferment, national service forbearance, National Guard duty forbearance, DoD Student Loan Repayment Program forbearance, and certain administrative forbearances.
New Options For Delinquency And DefaultWhen a borrower is 75 days delinquent on their federal student loans, they will automatically be enrolled in the income-driven repayment plan with the lowest monthly payment. However, the enrollment won’t really be automatic, since the borrower must still consent to the disclosure of their income information to enable the calculation of the monthly loan payment.
Borrowers who are in default on their federal student loans can make payments under IBR and have them count toward forgiveness.
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The Department of Education announced a new, more generous income-driven repayment plan. Here's what to know about New REPAYE.
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While the thought of incurring student loan debt makes many prospective students reconsider pursuing post-secondary education, the impact of a degree still outpaces the pain of loan debt on future financial well-being. A college degree represents a sound investment in your future earnings. The financial return over a lifetime makes an undergraduate education a sound investment.
Remember, college graduates, on average, earn 84% more over their lifetimes compared to just high school graduates. While tales of successful college dropouts like Bill Gates encourage the notion that an undergraduate degree is not worth the time or money spent, those entering the workforce without a degree face and uphill battle. Once hired, degree-less employees might find their lack of degree a hurdle to future promotions and raises.
So, how do you know if college is worth it? Here's how to dive in and see.
Table of ContentsThe Value Of CollegeCalculating Your College ROIHow To Understand What You Will Earn After GraduationReduce Tuition CostsAccelerate Your StudiesWork Through CollegeConclusion - Is College Worth It?The Value Of CollegeWhy do people go to college? There are a lot of ideals - learning, networking, building lifelong relationships. But the truth is - college costs money. And most students are going to college because they are trying to learn skills that will allow them to earn more money after graduation.
Wait? That sounds like an investment. Because it is!
Students are paying money up front, to see a return on investment after graduation. It's also part of the student loan crisis today. Too many students borrowed money for this investment, and the return on the investment is not what they expected (thus making it hard to repay the student loans they took out).
What does the data show about the value of college?
Well, one of the most commonly cited pieces of data showcasing the value of college comes from the Social Security Administration.
"Men with bachelor's degrees earn approximately $900,000 more in median lifetime earnings than high school graduates. Women with bachelor's degrees earn $630,000 more. Men with graduate degrees earn $1.5 million more in median lifetime earnings than high school graduates. Women with graduate degrees earn $1.1 million more."
That's a great data point - but it omits a key factor. How much did that person pay for that degree?
It sounds amazing to suddenly earn $900,000 more over your lifetime (which is approximately 45 years of working after college graduation). But what if you paid $900,000 for that degree? Is it worth it? Of course not.
And that's the crux of the issue - what's the value of the increased lifetime earnings in today's dollars?
The Net Present Value Of Lifetime EarningsThis is where it gets eye opening. It can also be a little messy since we have to make some estimates - such as the rate of return/inflation. We also have to realize that not everyone is equal, not all careers are equal, etc.
But it's good to have some data points. Let's calculate the net present value of both $900,000 and $630,000 over 45 years (that means you graduate college at 22 and work until you're 67). We will use a 5% return rate for our calculation.
Net Present Value For Men ($900,000): $100,167
Net Present Value For Women ($630,000): $70,117
With this incredibly rudimentary calculation, we can see pretty easily the value of college. For a man, if you spend $100,000 on your college education, you'll break even over your entire lifetime. If you're a woman, that number is $70,000. If you spend less, you start having a positive ROI, if you spend more than that, you have a negative ROI.
Here's where it gets a bit scary though. What if we used a more reasonable 8% return rate? The value of college diminishes significantly.
Net Present Value For Men ($900,000): $28,195
Net Present Value For Women ($630,000): $19,373
The truth is, the value of college likely lies somewhere between these two calculations. But you can see it really starts to become NOT WORTH IT if you spend too much money.
So, how can you personally factor this into your college decision?
Calculating Your College ROIThe key to deciding if college is worth it is simply to calculate your Return on Investment (ROI). Specifically, we're going to look at how much you should borrower to pay for college.
If you can pay cash for your degree, it doesn't matter if it's worth it because you're buying a luxury you can afford (yes, I know education shouldn't be viewed as a luxury - but the paying cash for it can be). It's only if you're going into student loan debt that it really matters.
It's like buying a car to get to work. The goal is to work so you can earn money, and you need a car to get there. You can buy a really cheap old car - it get's you from your house to work. Or you can buy a brand new Mercedes. They both serve the same function - but one is much cheaper and has a better ROI. But if you have so much money and the price tag doesn't matter, buy whatever car you want. But most Americans are't in that situation - so we have to think critically about the costs and return on investment.
So, the name of the game is to only borrow as much as makes financial sense. And that amount is: never borrow more than your expected 1st year post-graduate salary.
"Never borrow more student loan debt than you expect to earn in your first year post-graduation."
So, if you plan on becoming an engineer and expect to earn $60,000 per year, don't borrow more than $60,000 in student loan debt. If you want to be a teacher and only expect to earn $38,000 per year, don't borrow more than $38,000.
It's a very easy rule to understand, but it can be hard to follow.
There is also a lot more research today to understand the ROI. For example, the Foundation for Research on Equal Opportunity recently released a bunch of data calculated the ROI on 30,000 bachelors degrees from different schools and programs. You can see the real answer to was college worth it.
Related: Where To Apply To College (Finding Financial And Academic Fit)
How To Understand What You Will Earn After GraduationThis can be a tough one - but it's where you have to start. What do you want to do after graduation, and how much will you earn?
When you're 17 or 18 years old, it can be impossible to know. But you can get a ballpark (and you should, especially depending on what field you want to go into). Remember, only 27% of graduates have jobs related to their major in college, but that's a good baseline of where to start.
Once you have a ballpark, you can build a buffer around that. Want to go into education? See what low end teacher make in your state. Marketing? See what marketing jobs are available? Want to be a doctor? Well, I hope you've spoken to some doctors.
If you don't know where to find salaries, look at sites like Glassdoor and Indeed. Both sites have salaries and company reviews - which can be helpful to understand a bit more about big companies in the industry you want to get into.
Reduce Tuition CostsResearch in state school tuition as well as other lower cost programs. While the benefit of an Ivy League education could pay off in networking and career opportunities, it does not make sense to overspend for those benefits. Find well-ranked, lower tuition options.
You could also opt for a hybrid of starting at a community college (which is free in 30 states), and then transferring to a state school after you knock out your general education requirements.
Seek financial aid and scholarships. There is money available to students of all abilities and financial backgrounds. With a little bit of leg work, it is possible to reduce ballooned school tuition to a minimal cash investment. Don't rule out working for a university, often employee benefits include free tuition in addition to comfortable salaries.
Choose to live at home or rent a low cost apartment off campus. Reducing or eliminating room and board expenses can help limit the amount of student loans.
Related: The Ultimate College Budget Guide
Accelerate Your StudiesTake AP courses in high school, or test out of entry level courses with options like the CLEP. Pick a major and stick to the core studies to prevent spending valuable tuition money on extraneous classes. Opt to take lower cost general education credit hours at a community college. Get ahead of your investment by graduating early and on time. Extending your stay in school only increases debt and postpones your ROI.
In my case, I took as many AP courses as possible, and took the AP exam each spring. As a result, I was able to start college with sophomore standing due to the amount of credits I received for my AP classes, and I was able to graduate early (even though I changed my major). AP courses were the key to graduating early and saving a bit on college costs.
Work Through CollegeDon't be afraid to go out and work during school. Beyond the fact that you get paid and you can use this money to offset the costs of your college education, working gives you amazing skills that you can transfer to any job after college.
For many college students, working in retail or in a restaurant is a flexible way to find a job while still being able to balance your school schedule.
Conclusion - Is College Worth It?Is college worth it? Maybe.
Like any investment, you won't know until after you make it and start to realize the returns. But you can protect yourself by spending as little as possible up-front.
For example, mitigating the amount of student loan debt you carry with you into adult life creates a better foundation to make future investments and grow personal wealth.
While there are many pathways to success, an undergraduate degree is still a good option for those looking to earn a solid living and live in financial comfort. The return on the investment depends on students managing money wisely, making strong career choices, and backing up their diplomas with discipline and work ethic.
While incurring loan debt sets students behind non-degreed workers for the first few years of employment the earnings potential of those with college degrees far outpaces those without. However, it only makes sense if you don't spend a lot of money on that undergraduate degree.
What do you think? Is college worth the investment?
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The question of whether college is worth it continues to come up as tuition costs rise nationwide, so here's how to calculate your ROI.
TaxSlayer has emerged this year as a strong contender in the DIY tax prep space. In fact, we named them as one of the best tax software programs for small business - since they offer all of their forms for a single price, which is huge for side hustlers and busienss owners that have multiple forms and complex returns.
However, they may not be the best tax software option for you. In that case, you may be looking for TaxSlayer alternatives.
We break down our choices and picks for the best TaxSlayer alternatives that you could use to prepare your taxes this year.
TaxSlayer AlternativesWhat Is TaxSlayer?TaxSlayer AlternativesTurboTaxTaxActH&R BlockFreeTaxUSACash App TaxesFinal ThoughtsWhat Is TaxSlayer?In our recent review of TaxSlayer, we outlined a number of benefits to using it for your tax return software, including free filing if you are claiming student interest as a deduction. Here’s a quick review of TaxSlayer’s highlights:
- Pricing: $0 (state included), $19.95, $39.95, and $49.95 (for these three options, state is available for $39.95)
- Web-based (no downloads required)
- Options for tax audit, live tax pro help, and self-employed
- E-file available
- Easy to use Try TaxSlayer HereTaxSlayer AlternativesMost people will find that TaxSlayer meets their needs. Those with more complex tax filings may find they need more options than what is offered by TaxSlayer. In those cases, specialized tax software that can accommodate the unique needs of those filers will probably be the best option. Here are a few choices.
TurboTaxTurboTax offers a large variety of options but is on the more expensive side compared to other tax filing software. Like most tax filing software, they have four plans that increase in price as your tax needs increase or become more complex. Each higher-cost plan includes everything in the lower-cost plans. Except for the free edition, state filing will cost extra. You don’t have to pay for any plan until you file.
- Free Edition: Great for simple individual tax returns.
- Deluxe: $39, best if you have mortgage interest, donations, student loans, and 1099-MISC income. State filing is an additional $39.
- Premier: $69, best for those with various investment income including stocks, cryptocurrencies, and rental properties. State filing is an additional $69.
- Self-Employed: $89, best for self-employed, including freelancers and small businesses. Access to year-round tax estimator after filing. State filing is an additional $89.
You also have the option to add Live CPA help to each plan at a cost. Fees by plan are $0 (limited time), $89, $139, and $169. TurboTax is web-based but you also have the option to purchase it as a CD or download.
Get started with TurboTax here >>
Try TurboTax HereTaxActTaxAct handles filings for anyone from individuals to businesses to those looking to maximize their deductions. There are four plans offered. Each higher-cost plan includes everything in the lower-cost plans:
- Free: For Individual Federal return. State will cost $39.95 even at the free tier. No phone support.
- Deluxe: $24.95, best for homeowners and those with specific types of deductions such as itemized deductions. Also great if you have the following: child and dependent care, mortgage interest, real estate taxes, student loan interest, a health savings account (HSA), or adoption credits. Includes tax specialist phone support. State filing costs $59.
- Premier: $34.95, best for those with investments, rental property, Schedule K-1 income, investment income and expenses, rental property income, and foreign bank and financial accounts. State filing costs $89.
- Self Employed: $64.95, Deduction Maximizer™, and year-round tax resources. Best for freelancers, businesses, and farmers. Finds business deductions and calculates depreciation. State filing costs $119, higher than the other two non-free plans.
When you factor in state pricing on top of their high federal pricing, it's hard to justify TaxAct over TaxSlayer.
Get started with TaxAct here >>
Try TaxAct HereH&R BlockSticking to the current theme, H&R Block also offers four plans with the individual plan being free. They have an Online Assist option for a fee that allows you to speak with a live tax expert, enrolled agent, or CPA. H&R Block’s software has a great-looking interface, is easy to use, and is completely web-based.
The free plan includes one state filing. State filings for the paid plans can be purchased for $37 each.
- Free: $0 and includes state filing. Tech support is available by chat.
- Deluxe: $35, for homeowners and those with donations and HSAs. Includes DeductionPro® to optimize donations. Technical support is available by chat or phone. State taxes with be $37 additional.
- Premium: $55, for freelancers, contractors, and investors (including rental properties). Performs cost basis calculation. State taxes with be $37 additional.
- Self-Employed: $85, for self-employed and small businesses. Import Uber driver tax information. Includes the ability to add home office depreciation and vehicle expenses. State taxes with be $37 additional.
TaxSlayer again has much better pricing that H&R Block Online, but H&R Block has some of the most robust assistance options of any tax software option. Between online assistance, phone support, and their network of offices, if you need help with your taxes, you can find it easily.
Get started with H&R Block here >>
Try H&R Block HereFreeTaxUSAFreeTaxUSA is a popular alternative because they offer simple flat-rate pricing for their software. And it's about on-par for ease of use compared to TaxSlayer.
- Free: $0 Federal and $14.99 State
- Deluxe: $7.99 and $14.99 State (includes audit support)
With these low prices and full access to all tax forms at the lowest level, FreeTaxUSA even gives TaxSlayer Classic a run for its money. Both FreeTaxUSA and TaxSlayer are about the same ease of use, and so for most users FreeTaxUSA is a compelling alternative.
Get started with FreeTaxUSA here >>
Try FreeTaxUSA HereCash App TaxesCash App Taxes is a popular alternative to TaxSlayer specifically because its the only tax software option that offers truly free Federal and State tax filing.
However, Cash App Taxes does have some drawbacks. For example, it doesn't allow for multiple state taxes, and doesn't support foreign earned income. There may be other tax situations that it doesn't support as well.
As a result, TaxSlayer is still a competitive option. But if you have a simple tax return (like a W2 and maybe a 1099 for interest), Cash App Taxes could be a good choice.
Get started with Cash App Taxes here >>
Try Cash App Taxes HereFinal ThoughtsIf your filing needs are simple (just a Form W-2 and no investments), any of the free options above will work fine. If you are a small business owner or freelancer, TaxAct and H&R Block have comparable options with great feature sets.
However, FreeTaxUSA and Cash App Taxes are probably the most compelling options for simple tax returns.
Make sure you check out our guide to the best tax software and our guide to the free tax software options for you.
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TaxSlayer has been growing a loyal following over the last several years, due to excellent prices and huge improvements to their software. But what are the alternatives?
TaxAct is a popular tax software choice, but it has increased prices significantly over the last few years. As a result, users may want to explore the alternatives.
H&R Block is an extremely popular tax software for many individuals, but not the best for everyone. Here's our best H&R Block alternatives.
We break down the best tax software for 2023 based on your tax situation - from stock market investor, to landlord, to free options!
Increasingly, tuition continues to rise, saddling millions of students with large amounts of student loan debt. In fact, the average student is graduating with almost $30,000 in student loans. That’s slightly more than a Tesla Model 3 or even a wedding. Without students loans, many people would not even be able to attend college.
For most anyone heading to college, student loans will become a fact of life. But where do student loans come from, how much can you borrow, and what is the true cost? In this article, you’ll learn all about how student loans work.
Table of ContentsThe Ins and Outs of Student LoansHow to Apply for a Student LoanHow Much Should You Borrow?Paying Back Your Student LoansA Necessity for Most StudentsThe Ins and Outs of Student LoansStudent loans are available for undergraduate and graduate students alike. They are based on need, of which income is only one component. Students loans are issued by the government (hence the term Direct Loan - directly from the government). Although, private student loans are also available. The amount issued to a student will depend on the student’s financial situation. The final decision is up to the school.
Financial aid packages are the first step in receiving a student loan. The financial aid package is made up of gift aid (such as grants and scholarships), loans, and work-study programs.
What is the collateral for a student loan? It's important to remember that the collateral for a student loan is your future earnings. When you buy a car and get a car loan, the collateral for the car loan is the car. So if you don't pay the car note, the bank can repossess your car. With student loans, it's important to remember that the collateral is your future earnings. If you don't repay a student loan, the government can garnish your wages, take your tax returns, and more. Always keep this in mind when borrowing.
How to Apply for a Student LoanThe FAFSA, or Free Application for Federal Student Aid, must be filled out each year to receive financial aid. FAFSA deadlines change each year. You can check the deadlines here. Be sure your FAFSA is submitted on time. Otherwise, a late FAFSA will certainly complicate your financial situation and leave you scrambling to pay for school.
To get an idea of how much financial aid you might be awarded, check the FAFSA4caster website.
Upon being awarded financial aid, you’ll receive amounts for gift aid and loans. There should also be a breakdown of your school’s cost. Schools display cost information in different ways and the true cost can be off by a wide margin. Depending on what is shown, you may need to ask the school for cost on:
- Tuition
- Housing
- Food
- Travel
- Fees (labs, etc.)
- Books
Add in any other known cost. It’s better to overestimate rather than underestimate. Many students find that they are short on money, even after receiving their financial aid. This is due to many costs that are not accounted for.
How Much Should You Borrow?Once you have an annual cost for school, subtract out gift aid and any money your parents may have saved up for college. If you have saved up money for college, subtract it out as well. The number you’re left with is not only direct school cost (tuition & housing) but cost needed to live while you’re in school. If you have a job, factor in how much of the above cost it will cover. You should have a final number on cost at this point.
That final number is the amount needed for school loans. The less money in school loans you have to take, the better. As you can see, the amount of loans isn’t just about tuition and books. It should factor in all costs that are associated with being a student.
One caveat about student loans: students will often take the full awarded amount, even if it isn’t needed. If you don’t need the full amount, you can take only what is needed. Taking more loan money than what is needed will cost more in interest and increase your monthly loan payments.
Key Rule Of Thumb: Our key rule of thumb for how much you should borrow is simply to NEVER borrow more than you expect to earn in your first year after graduation. This will help ensure that you never borrow too much and can't afford to repay it.
Related: How To Calculate The ROI Of College
Paying Back Your Student LoansIf you have Federal student loans, there are a variety of repayment plans, such as income-driven repayment plans, that can help you pay back your student loans in an affordable way.
You should pick the repayment plan that you can afford to make the payment on every month. If you don't know where to start, look at using a tool like Student Loan Planner to help you.
The government offers a number of loan features that are not available with non-government loans. These include:
- Forbearance: You don’t have to start paying on student loans until after you graduate.
- Hardship: While in repayment, you can push back payments until your finances improve.
- Low interest: Most loans will have interest rates in the single digits.
- Low origination fees: Fees for disbursed loans are ~1% of the loan value.
If you are enrolled at least half-time, you don’t have to begin making payments on government loans until six months after graduating. Additionally, interest will not accrue until after graduation for subsidized loans, but starts accruing immediately for unsubsidized loans.
Read our full guide to subsidized vs. unsubsidized loans here.
According to the Federal Reserve, the average monthly payment is $393, with a median monthly payment of $222. How much you pay will depend on the repayment plan and interest rate. Note that graduate loans will usually have higher interest rates than undergraduate loans.
A Necessity for Most StudentsWith tuition continuing to skyrocket, student loans have become a necessity for virtually any student wanting to attend college. While student loans can be a large source of financing for college, planning for cost and taking only the amount needed will help to avoid being overly saddled with unneeded debt.
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Wondering how student loans work? Learn how to apply for them, how much money you should borrow, and the details of paying them back.
Every time you turn around, it seems like there's an extra fee charged for services of dubious value.
While sometimes fees are a necessary evil, when it comes to your money, there are easy ways to avoid paying fees that are unnecessary or easy to avoid.
Make it a rule to never pay for the following eight fees.
Table of Contents1. ATM Fees2. Overdraft Fees3. Late Fees4. Annual Credit Card Fees5. Credit Card Foreign Transaction Fees6. Credit Card Convenience Fees7. Activation Fees8. Paper statement feesSave Where You Can1. ATM FeesNowadays, you shouldn't ever have to pay money to access your own money. If you find you're paying ATM fees, change banks! There are many online-only banks and financial institutions out there that no longer charge ATM fees. They’ll even refund you the fees you paid for out-of-network ATMs. Two examples are USAA and Charles Schwab.
If you’re still paying for ATM fees, it’s time to shop for a new bank.
- Overdraft FeesOverdrafting is when you make a purchase from your checking account but don't have enough money on your account. If you've signed up for overdraft protection on your checking account, your bank will honor your purchase, essentially allowing your balance to go negative. But they'll also charge a big fee for the privilege (usually between $35 to $50).
It's usually a much better idea to decline overdraft protection and not make purchases that will cause your balance to go negative. If you do find you occasionally need overdraft protection, look for a bank that offers free overdraft protection (including USAA and Charles Schwab). If your bank doesn't offer this, check out our options for the best free checking accounts.
- Late FeesMany banks, credit cards and other accounts such as loans, charge a late fee if you don't make your regularly-scheduled payment by the due date (plus a grace period sometimes). While it's a good idea to make sure that you've organized all of your bill payments (and set them up on autopay if possible), the good news is that many late fees can be removed.
If you find a late fee assessed to your account, just contact the service provider (bank, credit card, utility, etc). In many cases, they will waive the late fee charge as a one-time courtesy. This is especially true if you have been a long-time customer or if this is the first time you've had a late fee charge. If you do get your late fee waived, make sure you set up the bill to be paid on time going forward so you don't run into the same problem the next month.
- Annual Credit Card FeesWatch out for pricey annual fees on credit cards. Many of the best rewards credit cards don't have annual fees, so if you have a credit card that charges one, decide if it’s worth it to switch.
In some cases, a credit card with an annual fee also has benefits that are worth the fee. This might be free checked bags, elite status, bonus points, or an annual hotel free night. If you've done the math and know your card is worth more than the annual, that's one thing. Be sure to check out the best credit card strategies to maximize your travel rewards.
Just be sure you’re not mindlessly paying an annual fee when there are lots of good alternatives that come without that $95 sticker price.
- Credit Card Foreign Transaction FeesAnother credit card fee to watch out for are foreign transaction fees. Many credit cards charge a 3% fee if you pay in a currency other than your home currency. That 3% fee can add up if you travel often and frequently buy things in other countries.
If you're a frequent traveler, make sure you are choosing a credit card that doesn't charge foreign transaction fees. There are many cards that don't charge this bogus fee, even among credit cards with no annual fee.
- Credit Card Convenience FeesKeeping the focus on credit cards, avoid paying a credit card convenience fee. Many places won't take a credit card payment for free and will charge a 2 to 3% fee to pay by credit card.
No amount of cash back or travel rewards will likely be worth paying 3% more than you have to. If you come across this situation, look for a way you can pay with cash or using a bill pay service from your bank instead.
- Activation FeesIf you’re starting a service like signing up for a new cell phone, you sometimes have to pay an activation fee. In the case of cell phones, you usually need to sign a two-year contract and it usually comes with an activation fee.
Ask the clerk to waive it. They will 90% of the time. If they don’t, threaten to go to the next closest cell phone store. There’s a good chance that the salesperson is motivated to complete the transaction and may gladly waive it.
- Paper statement feesMany companies give you the option to get rid of snail mail paper statements. They give you the option to receive your documents and statements via email.
Some companies may charge a fee to receive any statements or notices in the mail. Do your wallet and the environment a favor and sign up for emailed statements.
Save Where You CanMost of these fees are only a few dollars, but every little bit adds up. You might find it's $5 here, $12 there but before long, you're starting to talk about real money.
Avoiding these small fees is another way to microsave, and you'll be much better off if you put this money towards your emergency fund or other investments.
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When it comes to your money, there are easy ways to avoid pay for unnecessary fees. Here are eight that you should never have to pay for.
Before you open a brokerage account, it’s worth looking at the biggest companies and identifying what makes these companies unique.
With reports of colleges providing lying to boost their rankings, could graduates receive student loan forgiveness if they were deceived?
There are several legal ways to increase your tax refund - and they all involve making sure that you do all the right things.
It’s tax refund season, and if you’re anything like the average American, you’re excited to get your hands onto your refund check.
But how are you supposed to cash your tax refund check if you don’t have a bank account? Using a check-cashing outlet can involve expensive fees. Plus, it’s risky to walk around with thousands of dollars in cash in the neighborhoods that are often dangerous.
Want to avoid the excessive fees and keep your cash safe? Here are few ways to get your tax refund when you don’t have a bank account.
Table of ContentsDirect Deposit Prepaid Debit CardCash a Physical Check Using an AppTry Retail Check CashingOpen a No-Fee Banking AccountBottom LineDirect Deposit Prepaid Debit CardThe number one way to get your refund check is to open a prepaid debit card account. You can use the prepaid debit card to receive direct deposits from the IRS.
Accounts like Bluebird by American Express and Walmart allow the cardholder to receive direct deposits for $0. Bluebird is available for all U.S. residents age 18 and older. The account also has a family card feature, so you can allow up to four people to access the same account.
Online tax preparers such as H&R Block and TaxSlayer allow filers to open prepaid debit accounts for the express purpose of getting their tax return. These prepaid cards have the same advantage as the Bluebird account mentioned above, but they have higher fees.
Cash A Physical Check Using An AppAnother option to consider is using the CashApp app. The CashApp app allows you to deposit your refund check by taking a picture of a physical check. You can deposit your check right into your CashApp account!
Even better, if you use CashApp Taxes to file your taxes, you can get your refund direct deposited into your Cash App account and get your tax refund up to 6 days early!
Ingo Money is another app that allows you to cash physical checks. For a 2% fee ($5 minimum), you can have your refund deposited onto an Amazon gift card, a credit card, or any prepaid card. You can also pick up $1,000 or less from a MoneyGram location.
Try Retail Check CashingIf you don’t want your refund to hit any electronic account, a good option to consider is retail check cashing. These are far less expensive than the check-cashing outlets, and they will generally be a bit safer thanks to lots of video surveillance in the parking lots.
Still, if you’re planning to cash a check, be sure to discreetly tuck the money away and use safety precautions to avoid being a target for theft.
Here are a few major chains that allow you to cash checks:
- Albertsons: Fees vary by location, and they will only cash up to $1,000.
- Kroger: $3 for checks up to $2,000, $5.50 for checks between $2,000 and $5,000.
- Walmart: $4 for checks under $1,000, $8 for checks over $1,000.
Other major grocery outlets such as Safeway, Publix, and Food Lion also cash checks, but fees and limits vary by location.
Open a No-Fee Banking AccountOf course, the easiest way to get your tax refund is to simply open a bank account. That way, you can get the tax refund via direct deposit or you can deposit a physical check for free.
If you’re a legal U.S. resident, age 18 or older, consider opening a bank account at Chime. All of these accounts require no monthly fees and they don’t charge overdraft fees.
You can open an account in minutes, and then use your bank account information (account number and routing number) to fill out the direct deposit information on your tax return.
Check out this list of bank accounts that allow you to get your tax refund early.
Bottom LineUsing one of the options outlined above, you can get your tax refund quickly, cheaply, and safely.
Don’t delay getting your refund just because you don’t have a bank account. Take action today so you can get your money back.
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There are various ways to receive your tax refund when you don't have a bank account. One is to cash a check using an app. Learn more here!
Are you having trouble with your current student loan lender? You can transfer student loans and be happier using one of these methods.
Wondering who still offers early tax refund anticipation loans? Find out the most popular providers of tax refund loans and where to get one.
There's a strong chance your tax refund is going to be much smaller in 2023 due to the ending of many Covid-era tax credits.
President Biden's student loan forgiveness plan is on hold due to lawsuits, but there are new student loan options to look out for in 2023.
Per usual, there is nothing normal about this upcoming tax season. Between the uncertainty in the economy and tons of changes to different tax credits and deductions, Americans are going to be having another odd tax season.
And for most Americans, it makes sense to file your taxes as early as possible - especially if you're expecting a tax refund. There's no reason why you should let the government keep your hard earned money longer than you have to.
Here’s our best tops and tricks to help you file your taxes early, avoid the rush, and get the best tax refund you can.
Table of ContentsHow To Get Organized For TaxesWhy You Should File Your Taxes Early?When To Wait To FileWhy You Should Consider Filing OnlineFinal ThoughtsHow To Get Organized For TaxesThe first step in being able to file your taxes early is simple - you need to get organized. By having all your tax documents in one place, you can make sure you have everything you need for tax season.
I’m a big fan of using a tax binder. This means keeping a binder all year for your tax documents - because you can be getting stuff all year long! Check out my tax binder here for ideas.
If you want to beat the rush, it’s all about having your documents organized and in one place. That way you can know what you have, and what you’re waiting on.
Why You Should File Your Taxes Early?There are several reasons why you should file as early as possible!
The first, of course, is the faster you file your taxes, the sooner you get your tax refund! Given that it takes the IRS, on average, 21 days to process a tax refund, everyday you delay in filing a return, is another day you delay getting your refund.
Related:When To Expect My Tax Refund
Second, and a bit scarier, is the potential for identity theft. While identity theft of tax returns (and tax refunds) has been declining, over several hundred thousand people each year become victims. Furthermore, to prevent identity theft, the IRS flags about a million returns or more each year for additional information.
What happens is someone else files a tax return with your name and social security number, and as a result, they get a refund that should have gone to you.
It’s possible to sort this out and file your return correctly - but it can add up to 9 weeks or more to the process of getting your tax refund. That’s a long time!
This can be avoided by filing early. If you file your return first, and someone comes along later to file, they’ll be blocked and forced to provide proof (which they won’t be able to). So, if you can file early, you can lower the risk of identity theft.
Finally, if you do need professional help, it’s always easier to get it earlier than later. For example, if you wanted to get a professional to help you with your taxes, you might have a long wait as it gets closer to the tax deadline.
Related: Why Your Early Tax Return Will Be Delayed
When To Wait To FileIt doesn't always make sense to file early - and in some cases, you should wait.
The main reason to wait to file your taxes is because you don't have all your paperwork yet.
While many tax filers receive most of their paperwork in January, the IRS sets different deadlines for different tax forms. For example, the W2 needs to be sent out by January 31, but 1099-B for investing doesn't have to be sent out until February 15.
Then you have special forms like a K-1, which doesn't go out until the business tax return is filed (which can be March or even extended until September).
And for 2023, a lot more tax filers are going to be receiving 1099-K, which don't have to be sent out until January 31. If you received over $600 through services like PayPal or Venmo, you might be receiving this form.
While you don't technically have to wait for late tax forms to file your return, you do have to ensure your tax return is accurate when you file. And not reporting certain paperwork (or guessing on the numbers) can lead to errors, which can lead to IRS audits, more in taxes, and potentially penalties.
Related: What To Do If You're Waiting On Late Tax Forms
Why You Should Consider Filing OnlineFiling online is the easiest way to go to beat the rush and get your tax refund quickly. Why? Because you can do it at home, on your time, with no hassle.
So, if you’re looking to beat the rush, there is no better way than from the comfort of your home computer.
And if you’ve never done it before - it’s easy! All you do is follow the on screen questions and enter your information accurately. Even if you’ve never filed your own tax return before, it’s possible to do online!
However, not all tax software is ready if you are filing early. In fact, some tax software doesn't even go live until mid-January.
If you're looking to file early, check out our list of the Best Tax Software for Early Tax Filers. These are programs that are live and ready to go in December.
Final ThoughtsFiling your taxes early is a smart move. You get your refund faster. You lower the risk of identity theft. And, if you need professional assistance, you won't wait as long for help.
However, don't file early if you're waiting on paperwork. It can lead to costly mistakes!
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Our parents had it rough during tax season. Doing their own taxes sometimes took a week or more. They’d spread papers and receipts across the kitchen table. Then they’d punch numbers in a calculator and flip through the IRS’s annual tax guide until ink coated their fingertips.
Yikes!
Today, thanks to tax software and other innovations, we can do our own taxes with fewer headaches. In fact, doing your own taxes with tax software should likely take you less than an hour (even less if you're organized). An new apps even allow you to do it on your phone!
Here's what you need to know about how to do your own taxes!
Table of Contents3 Ways to Get Your Taxes Done By Yourself1. Paper Forms2. Free IRS E-filing3. Tax SoftwareHow to Choose Tax Software If You Plan to DIYEssential Info For To File Your Own TaxesWho Should NOT Do Their Own TaxesConclusion3 Ways to Get Your Taxes Done By YourselfTax professionals exist for a reason: Some people’s taxes are just too complex even for the best tax software programs.
But many of us can knock out this year’s taxes ourselves by:
- Filling out and mailing in a paper form (Yes, you can still do that!).
- Using the IRS’s free e-file fillable forms.
-
Using an online or desktop tax program to prepare and file your return.
-
Paper FormsIf you plan to mail a paper form to the IRS this year, rock on -- you’re upholding a tradition dating back to 1913 when we amended the Constitution to legalize income taxes.
Since most people file electronically, the IRS will no longer automatically mail you a paper tax form. You’ll have to download your tax forms online.
When you’ve got everything ready, you’ll need to find the correct mailing address where you should send your forms.
If the government owes you money, you can keep your retro vibe going by having the IRS mail you a refund check. Or, you can include a routing number and account number on your form for direct deposit.
Who should do this? Only taxpayers with a lot of knowledge, or a remarkably simple tax picture, should file their own taxes manually. There’s a lot of room for error and you could be missing out on a bigger refund.
Your refund gives you access to your money which the government has been holding all year.
You should get as much back as possible.
- Free IRS E-filingYou can also do your own taxes at IRS.gov using the site’s free fillable forms.
These forms look and work just like paper forms except you’d type in your numbers instead of writing them in the blanks.
Other than saving paper and postage, and getting your data to the IRS faster, this approach offers little benefit over paper forms.
You’d still need to know the nuances of the tax code to optimize your refund!
Someone who is single and has no dependents, works a wage-earning job, and does not plan to write off any student loan debt or take advantage of any tax rebate or tax credit could make it work.
Even then, you could be missing out on a tax credit you didn’t know about.
But, some tax software does offer free filing options. Check out our list of free tax software options here.
Anyone with more complicated taxes should either hire a professional or use the next option, tax software.
- Tax SoftwareMany millennial taxpayers have never used an actual tax form like the paper or fillable online forms we just discussed.
And for good reason: Software can take your tax information, populate tax forms for you, and file your federal and state returns.
You can track the progress of your return which removes a lot of the “Where is my refund?” guesswork.
As these programs grow more advanced, they can now lead you through the process of claiming rebates and credits such as the American Opportunity Tax Credit which could lead to a bigger refund.
You don’t have to know about the credits or the rebates before you get started. The software can suggest them based on your answers to questions.
With software, you can do your own taxes without being completely on your own.
How to Choose Tax Software If You Plan to DIYUnless you’re a tax accountant or a taxpayer with the simplest needs, your best bet will be connecting with a good online or desktop tax program to file your federal and state taxes.
Which software you use, of course, should depend on your needs and preferences. You’ll see ads online and on TV for some of the nation’s leading tax programs.
Many services offer free filing. Fewer services can actually follow through on the offer.
Some software services bait you with the promise of free services only to require payment if you have children or need to itemize. Others let you file a federal return for free but require payment when you start on your state return.
Check out our post about which services actually allow for free filing to find out if you can file without paying a fee this year.
Generally, someone with a more complicated tax situation -- if you have multiple sources of income or have a home office, for example -- will need to pay a fee to unlock a program’s “Deluxe” or “Premium” features.
And that’s OK. When you can unlock a bigger refund by paying for more advanced tax services, the upfront investment can pay off.
Bottom line: Go with a free service if you can; more importantly: find the service which best meets your needs.
Here are a few of our top picks to get you started:
- TurboTax
- H&R Block
- TaxSlayer
Essential Info For To File Your Own TaxesEven with the help of the right tax software, you’ll need to gather some information and make a few decisions before getting started filing your own returns:
- Work forms: You’ll need your W-2's or 1099's from your employers. You should receive W-2's from your employer in January. Check with your human resources department or supervisor if you have questions.
- Filing status: If you’re married, will you file a joint return or separate forms? What about Head of Household if you’re not married but have dependents? Your software can also help you answer these questions.
- Social Security Numbers: You probably know your own Social Security number. But what about your spouse’s and your children’s? Gather those little cards so you can enter everyone’s numbers if you’re filing jointly or claiming dependents.
- Do you have to file?: If you’re someone’s dependent or you worked very little last year, you may not have to file, though you should if you have a refund available.
- Will you take the standard deduction? You can claim the IRS’s standard deduction without providing documentation. The deduction increased this year to $25,900 for a joint return and $12,950 for a single filer. If you can’t document deductions beyond that amount, you’ll do best to claim the standard deduction.
Having this kind of information in one place and making these decisions in advance will help regardless of whether you’re filing electronically or manually.
Of course, if your taxes are more complicated, you’ll need to consider additional questions. You can save yourself some time by collecting documents such as:
- Deductible interest: You should be able to log into your mortgage account and student loan servicers to download a form showing how much interest you paid last year.
- Deducting tuition: If you attended college last year you could write off tuition using a 1098-T form your college’s business office should have sent.
- Capital gains or losses: If you invest, your broker or even your robo-advisor can help you calculate your capital gains or losses for IRS Schedule D.
- Receipts: Freelancers who write off expenses for a home office or traveling expenses should spend some time collecting mileage and/or receipts to calculate those write-offs.
- Property taxes: As a homeowner you pay property taxes in most states. Your county tax assessor’s office should be able to generate a receipt if you don’t have it. Your mortgage holder’s escrow account manager may also be able to help.
Related: How To Get Organized To File Your Taxes
Who Should NOT Do Their Own TaxesSome of us need help and guidance beyond the offerings of tax software. That’s why tax preparers still make a pretty good living even as tax software has grown more common.
If you’ve already worked with your tax software’s customer service reps but you still have unanswered questions, or if you don’t quite understand what you’re filing, it may be time to call a professional.
Taxpayers in the following situations will most likely benefit from hiring help:
- Investors: TurboTax’s software serves investors well, but a tax preparer should have a more nuanced skill set if you’re concerned.
- Consultants and freelancers: Juggling multiple income sources and writing off business expenses complicates a tax return. While TaxSlayer’s software excels at this, a tax pro can make life even easier.
- Landlords: Owning a few rental properties as a way to earn extra money can also complicate your tax picture. TurboTax’s software can help if you’re filing your own return. If you still need more help to clear up some questions, seek out a professional.
- Business owners: Your small business’s taxes will usually be significantly more complicated than your personal tax picture. You may even need to consult a tax attorney rather than an accountant.
- Anyone who feels uncertain: If you think a tax professional could help you claim a bigger refund either by helping you find tax credits or optimize tax rebates, you should have a conversation with a professional.
If you want to meet with a professional, but don't know where to start, maybe consider a virtual service like TurboTax Live. You pay a little more, but you get access to a virtual tax preparer who can answer your questions and walk you through what you need to know.
ConclusionSome people may still want to file their own taxes manually or using the IRS’s free fillable forms.
Most taxpayers, however, will benefit from using tax software to file.
Software allows you to do your own taxes on your own schedule while also benefiting from professional knowledge. It’s a best-of-both-worlds approach for DIYers.
You may need to pay a software fee or buy a tax application outright. In most cases you’ll still save compared to hiring a professional.
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Free filing with the IRS or tax prep software is best, but others have complex situations. Here's how to know how to do your own taxes.
Here are five facts about student loans that you didn't know, including student loan refinancing options, cosigners, and collateral.
Economists have been known to say, “There ain’t no such thing as a free lunch”—an expression that holds multiple meanings. In the world of investing, it means there's always a catch. Take for example, retirement. You may have the ability to get a tax break when you withdraw your funds, but you can’t touch it until you’re at least 59 ½ years old.
In today’s highly inflationary environment, which is compounded by the stock market tanking and real estate volatility, I-Bonds have made their way into the investing limelight, as they seem to be a way to earn solid returns with a high degree of safety.
Even if experts are touting I bonds as a hot new investment vehicle, like all investments, I bonds carry risks and rewards. Here’s what you need to know.
Table of ContentsWhat is an I Bond?What Are the Rules for Investing in I Bonds?Pros and Cons of I BondsHow Can I Buy I Bonds?Are I Bonds Right For Me?What is an I Bond?I Bonds are a form of savings bond offered by the U.S. Department of the Treasury. When you buy an I bond, you’re investing in debt owed by the U.S. Federal government. In exchange for buying the government’s debt, they promise to repay you with interest for up to 30 years.
While the U.S. Department of the Treasury issues many styles of bonds, I bonds are particularly appealing because they are an investment designed to protect you from inflation risk. The interest rate on the bond fluctuates with the rate of inflation. Higher measured inflation means that the interest rate on the I bond goes up. Likewise, when inflation decreases, the interest rate on an I bond decreases.
Understanding Interest Rates on I BondsThe Treasury has designed interest rates on I Bonds to help protect investors against inflation risk. The I Bond has two interest rate components.
- The fixed rate is the rate that the Treasury will pay for up to 30 years.
- The current fixed rate is 0.4%.
I Bonds also pay a variable rate that adjusts every 6 months. The variable rate changes based on the measured rate of inflation.
The 6-month rate of inflation right now is 3.24% (or 6.48% annually. Adding together the fixed rate (0.4%), the variable rate (6.48% on an annualized basis) and the effect of semi-annual compounding, the current interest rate on an I bond is 6.89%.
But your I Bonds aren’t going to pay out 6.89% for the next 30 years. This rate will adjust every six months and will generally keep pace with inflation.
What Are the Rules for Investing in I Bonds?With I Bond interest rates hovering around 6.89%, these bonds look incredibly appealing (especially compared to savings accounts). However, there are some limits to investing I bonds. Here are ones to consider:
Annual Limit: $10,000 per Person, Per YearThe easiest way to buy I bonds is through TreasuryDirect. You can set up and fund an account directly on the site. When you do this, you can buy up to $10,000 in bonds per person per year. Also, there’s a $25 investment minimum, which means you need to buy at least $25 in I bonds at a time.
All U.S. citizens and legal entities can buy bonds. You can even set up custodial accounts on TreasuryDirect if you want to buy bonds on behalf of your children.
Up To $5,000 Per Year In Bonds Bought Through Your Tax Refund“Paper” savings bonds are bonds purchased using the proceeds of your tax refund. To buy paper savings bonds, you use IRS Form 8888 to specify how much of your refund should go to savings bonds. You can buy up to $5,000 in I bonds each year using your tax refund.
Must Hold Funds For At Least A YearMoney invested in I bonds is locked up for a minimum of 12 months from when you buy it. It’s not easily liquid at first, but after a year the money is easily accessible.
You could even use I bonds as a part of your emergency fund. After the 12-month lockup, your I bonds can be sold at any time. If you sell them before holding them for 5 years, you will forfeit 3 months’ worth of interest.
Pros and Cons of I BondsPros Currently paying high rates. With negative returns in the stock market and real estate market, the guaranteed 6.89% yield on I bonds is quite appealing in today’s inflationary environment. * No risk of loss to inflation. Whether inflation increases or decreases, your I bond investment will keep pace with inflation. * Money separated from other investment accounts. TreasuryDirect Accounts are separated from other accounts by a difficult to permeate barrier. You have to be very intentional about putting money in and taking it out. This can help you avoid “emergency” vacations and instead keep your emergency funds completely separate from the rest of your money. Cons Cash is locked up for at least one year. You cannot access your investments until one year has passed. If you don’t have any extra cash, you won’t want it at TreasuryDirect. * Forfeit three months of interest when withdrawing funds. You can withdraw money from your TreasuryDirect account after one year of investing. But when you withdraw before a five-year minimum, you’ll forgo the last three months of interest accrued. While this isn’t a deal breaker for long-term investors, this can be a problem if you plan to move money out of TreasuryDirect every year or so. * No chance of beating inflation. While you’ll never lose ground to inflation, you’ll also never beat inflation with I bonds. I bonds are a great part of a “safe and secure” part of your investment portfolio. For long-run growth, you’ll need to consider assets with more growth potential such as stocks.
How Can I Buy I Bonds?You can buy I Bonds two ways. First, you can buy up to $10,000 in I bonds each year through TreasuryDirect. Set up an account using your Social Security Number, name, current address, and other details.
Once approved, you can transfer money into your TreasuryDirect account and buy I bonds. For further instructions follow the instructions on TreasuryDirect.
Buying paper I bonds with your tax return is a bit more complex. To do it, you need to complete IRS Form 8888. This form allows you to allocate up to $5,000 in refund money to savings bonds.
Are I Bonds Right For Me?Only you can decide whether I bonds have a place in your portfolio. The current yields may make them attractive. But if you’re a growth-oriented investor, I bonds may not fit in your portfolio right now. However, I bonds can serve as a cash cushion and a way to protect you from investment volatility.
In the long run, you need a diverse range of assets to make your investment portfolio. This approach will help you succeed in every market environment. You can choose whether the inflation protection offered by I bonds makes sense given your other investment goals and priorities.
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You may have heard experts touting I bonds as the latest hot investment vehicle. Make sure you understand its risks and rewards.
Passive income is unearned income typically derived from investments. That’s pretty simple, so there has to be more to it, right?
Let’s dive in and explore what passive income is, if passive income is actually real, the different types of passive income, and more.
We’ll even get into some of the technical aspects of passive income—taxes and real world examples.
Ready to learn about passive income? Let’s dive in.
Table of ContentsWhat Is Passive IncomeIs Passive Income Real?Different Types Of Passive IncomePros And Cons Of Passive IncomeWhy Everyone Should Build Passive Income StreamsHow Much Can You Earn?Is Passive Income Taxable?Most Popular Passive Income ExamplesFinal ThoughtsWhat Is Passive IncomeAs we said earlier, in the broadest sense, passive income is unearned income. Basically, you have income you work for (at a job, business, side hustle), and you have income that you don’t work for—passive income.
Passive income is always derived from an investment.
There are two ways to create passive income, you can invest your time or your money. Most passive income opportunities require a combination of both.
For example, you can invest your time in creating a song or photograph, which you can sell and earn royalties on.
Or, if you have money, you can buy a stock or real estate and receive income from it.
In a combination approach, you can buy a fixer-upper property, invest your time fixing it up, and then rent it out to receive higher passive income. If you were doing this project to flip the property; I’d actually argue that’s not passive income. But if you’re boosting your rent through sweat equity, that’s passive income.
What Passive Income Is NotThe key thing to remember is what passive income is not. Passive income is not income derived directly from work such as:
- Your day job (employment)
- Freelancing
- Owning a small business
These examples above are active income.
Is Passive Income Real?It doesn’t sound like passive income is truly passive, does it? It makes you wonder if passive income is real.
Passive income is real but you have to do something upfront to realize the income later. That something either involves your time or money.
The goal is to do work or use your money at one point and enjoy the rewards of that passively (i.e. by not having to do more work or invest more money) over time.
Different Types Of Passive IncomeNow that we understand some of the basics of passive income, what are the different types of passive income?
I like to think of it using our buckets of assets approach:
- You (active income)
- Paper Assets (typically passive income)
- Real Estate assets (could be active or passive income)
- Business Assets (could be active or passive income) Let’s start with paper assets as these are the types of passive income most people would be familiar with: stocks, bonds, mutual funds, savings accounts, and more.
These are investments that require an upfront monetary investment, but you can earn passive income from owning them. No future work is really required (except checking your accounts).
Real estate assets could be active or passive. For example, if you invest in a REIT, you don’t do anything except enjoy the passive income provided. However, if you own your own duplex, it could be a combination of active and passive income.
Business assets are similar. If you’re working in your business, it’s not passive. But if you’re simply an investor in another business, that could be passive.
Pros And Cons Of Passive IncomeWhile passive income is typically viewed as a positive, there are pros and cons.
Pros You can earn income without any work! * You can gain extra cash flow * More financial freedom, including early retirement Cons** Some forms of passive income may be less-liquid, meaning you can easily access your principal (it’s locked up) * Depending on what you invest in, your return may not be great * Using your time (rather than money) is unpredictable
Why Everyone Should Build Passive Income StreamsAt the end of the day, everyone should be building passive income to create multiple income streams.
Why? The best person to take care of your finances is you.
You don’t want to be dependent on an employer or a pension fund for your income. You want to be able to control your own financial destiny, and you do that by investing and building wealth, which in turn will generate passive income for you to live off of.
Plus, at some point, you won’t be able to work (either retirement or even something unexpected like an accident). You want to be able to provide for your family with an income stream, even if you can’t go to a day job to earn it.
How Much Can You Earn?So, how much can you earn? It depends. The key factor that it depends on is money. When it comes to using your time, a little luck is involved (like having a song go viral that you can earn royalties on).
For a basic calculation, let’s talk about passive income from a savings account. You can earn interest on your savings. The best accounts pay 4% in interest per year right now. That means you can earn $400 for every $10,000 you have saved. And that’s truly passive income.
A cool feature about passive income is that it usually also sees compound growth. What that means is that in the future, you earn income on your past interest.
Going back to our savings account example, in year two, assuming you didn’t add any money, you’d now have $10,400. And earning 4% on that is $416. So you earned $16 more than the prior year.
This is powerful. Remember our example from “would you rather have a penny that doubled each day or $1,000,000?” The penny that doubles is way more valuable!
And what if you invest instead of just saved? You can earn a lot more (and see your money grow a lot more). See this chart to the average return by asset class:
Is Passive Income Taxable?What about taxes? Everyone likes to talk about taxes when it comes to money. And there are really bad takes out there—like you shouldn’t earn more because you pay more in taxes! Don’t listen to that bad advice.
Yes, the money you earn as passive income is potentially taxable. But that’s not a bad thing—you’re earning more money!
I’d rather earn an extra $100 knowing I only keep $80, than not doing anything at all and not having that $80.
Passive income is taxed based on what type of income it is:
- Interest and dividend income is typically taxed based on these capital gains rates
- Capital gains are taxed as capital gains (such as from mutual funds)
- Real estate income and business income are typically taxed at your ordinary income tax rate
- Collectibles get a special tax rate if you’re involved in those
If you’re confused on whether your passive income is taxable, speak to a tax professional!
Most Popular Passive Income ExamplesWe have a full guide to the most popular passive income ideas here >>
Here’s a little sampling of these ideas:
Savings AccountRight now, you can earn upwards of 4% in a savings account, and even more in a Certificate of Deposit.
StocksStocks pay dividends, and you can get started investing in stocks for as little as $10 at most major brokerage firms. Plus, it’s commission-free to invest in stocks, mutual funds, and ETFs and most places.
Real EstateThere are a lot of ways to invest in real estate, but from a passive investment perspective, a REIT or a fund is the best.
Final ThoughtsPassive income may seem like a myth, but it’s real and anyone can build it. The key is to start early, even if you’re starting very small. Your investments will grow over time, generating more passive income for you, which in turn will grow more.
So, even if you only have $10, get started with passive income!
Passive Income FAQLet's break down some common passive income questions!
What is passive income?
Passive income is unearned income typically derived from investments.
What is an example of passive income?
The most common example of passive income is a savings account. You simply deposit your money into the account, and your earn interest for doing no work. That interest would be considered passive income.
Can you live off passive income?
Yes! In fact, this is the goal of retirement. You have enough saved and invested that you generate enough income to live off of.
What are three forms of passive income?
There are various forms of passive income - which either require an upfront monetary investment or upfront time investment. You can save money, invest money, or invest your time to create something that you can sell in the future passively.
How can you start building passive income?
You can commit your time or money (or both). If you have a little extra money in your budget, start saving and investing it. If you have a little extra time, start side hustling to create something that you can sell to earn money.
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You can become a millionaire by 25 if you focus on earning just $300 per day starting at 16 years old, or by becoming an entrepreneur.
The post How To Become a Millionaire by 25 appeared first on The College Investor.
If you'd like to save money on health insurance as a college student, take a look at these options. There might be a good one for you!
The post The Cheapest Health Insurance for College Students appeared first on The College Investor.
A survey of parents finds they are increasingly concerned about the impact of inflation and stock market volatility on their college savings.
The post Parents Worry About Impact Of Inflation On College Savings appeared first on The College Investor.
A look at the top ten investors of all time and the strategies they used to make their money.
The post The Top 10 Investors Of All Time appeared first on The College Investor.
Employment income is money earned from working such as your W-2 job or freelance work. Unearned may come from a pension or alimony. Here are the main differences.
The post What Is Considered Employment Income? appeared first on The College Investor.
Are you self-employed? Then this guide to filing estimated taxes is for you! Find out what you need to do, and when.
The post How To Make Quarterly Estimated Tax Payments appeared first on The College Investor.
A penny stock is a type of stock that trades for $4 or less. While it might seem cheap to invest, it’s high risk. Here’s what you need to know before you jump in.
The post What Are Penny Stocks? appeared first on The College Investor.
Title loans are high-interest loans that give you one month to repay the loan. Here’s what to know if you’re considering this risky route for cash.
The post What Is A Title Loan? appeared first on The College Investor.
Interested in long distance real estate investing? Here's what you should know before you buy a rental property in a different city or state.
The post How To Buy An Investment Property Long Distance appeared first on The College Investor.
Tuition insurance is one way to protect your investment in your education, one of the largest investments young people make in themselves.
The post Tuition Insurance | Here’s How It Works appeared first on The College Investor.
Here's our guide on how to invest in Ripple (XRP) with step-by-step directions on how to make your first Ripple investment.
The post How To Invest In Ripple (XRP) Step-By-Step appeared first on The College Investor.
The best banks for students make it easy to avoid fees, manage your budget, and don’t come with a lot of fees. You may even qualify for a special student account while you’re in school.
The post Best Banks For Students In 2022 appeared first on The College Investor.
President Biden's student loan forgiveness plan includes $10,000 or $20,000 in student loan forgiveness. Here's what to know.
The post President Biden’s Student Loan Forgiveness Plan appeared first on The College Investor.
It's critical to understand what an expense ratio is and how much you're paying for your investments. Here’s what you need to know.
The post Expense Ratio: Why It Matters In Investing appeared first on The College Investor.
It’s wise to calculate how much you’ll need in retirement based on your income and assets. Here’s what you need to know.
The post How Much Money For Retirement Do I Really Need? appeared first on The College Investor.
Many investors own S&P 500 index funds because they tend to be low-cost and representative of a large segment of the stock market. Find out how to invest in an S&P 500 index fund.
The post How To Invest In The S&P 500 appeared first on The College Investor.
It's never too early to start learning valuable financial habits through earning income. Here are the best ways for teens to make money.
The post Best Ways For Teens To Make Money appeared first on The College Investor.
FIRE advocates typically focus on spending less and saving to achieve a target retirement number. But what if you're not frugal?
The post FIRE (Financial Independence/Retire Early) For Non-Frugal People appeared first on The College Investor.
Looking to make money fast? These five quick money making ideas are relatively easy to do and don't require you to be chained to a desk.
The post 5 Quick Money Making Ideas (That Take Less Than 1 Hour) appeared first on The College Investor.
"Black Panther" star Chadwick Boseman did not plan a will or trust before his death. Here's why you need to plan your estate before you die.
The post Chadwick Boseman Died Without A Will: Why You Need An Estate Plan Now appeared first on The College Investor.
Curious to see how Gen Z stacks up against Millennials and other generations? Find out if there are truths to the stereotypes.
The post Gen Z Age Range: Money, Work, And Whether Stereotypes Are True appeared first on The College Investor.
Building wealth and retirement are just two of the benefits of investing. Check out the other benefits of investing here.
The post 5 Benefits Of Investing appeared first on The College Investor.
A university loan differs from other types of student loans, such as a federal loan. Learn more about them and whether you should apply.
The post University Loans | Private Loans Offered By Colleges appeared first on The College Investor.
Have a question about the Public Service Loan Forgiveness (PSLF) Program? Start here with the ultimate guide! Find out which loans qualify.
The post Public Service Loan Forgiveness [Ultimate Guide] appeared first on The College Investor.
A SEP IRA helps business owners save more for retirement by offering generous contribution limits and tax advantages.
The post What Is A SEP IRA And What Are The Contribution Limits? appeared first on The College Investor.
Ready to make a real estate investment but aren't sure where to start? We’ve outlined 19 different ways to get your investment started.
The post 19 Ways To Invest In Real Estate appeared first on The College Investor.
Understanding how life insurance payouts work before a loved one dies can provide a bit of comfort and lessen stress during this time.
The post How Do Life Insurance Payouts Work Upon An Untimely Demise appeared first on The College Investor.
If you have $50,000 to invest today, here are a few considerations to be aware of so you can make the best decision for your funds.
The post How To Invest $50,000 Today appeared first on The College Investor.
ESG investing focuses on companies with positive environmental, social, and governance actions. Here are the pros and cons of this strategy.
The post Pros And Cons Of ESG Investing appeared first on The College Investor.
Asset allocation is more than just stocks and bonds, you need to think about the bigger buckets of assets in your portfolio.
The post 4 Main Buckets Of Assets And How To Think About Your Money appeared first on The College Investor.
A look at why term life insurance is better than whole life insurance, especially over time, and why millennials should only consider term.
The post Term vs. Whole Life Insurance: Which Is Better? appeared first on The College Investor.
President Biden has forgiven more student loan debt than any previous president in history, and is still working to forgive more loans.
The post President Biden Has Forgiven The Most Student Loans To-Date appeared first on The College Investor.
Here's our list of the 50 best ways that you can save money in college and live on a tight budget while still having fun!
The post 50 Ways To Save Money In College And Live On A Tight Budget appeared first on The College Investor.
Do you know how much you need to pay in taxes, based on your investments? Use this guide to help figure out how much you owe.
The post Taxes And Your Investments: What Are You Responsible For? appeared first on The College Investor.
Student loan forgiveness is a divisive topic, and we explore several stories of who it will benefit and who is on the fence about it.
The post Student Loan Forgiveness Will Benefit Some But Leaves Others Hesitant appeared first on The College Investor.
Student loan interest rates are rising again on new federal loans after temporarily being set to zero during the pandemic.
The post Why Are Student Loan Interest Rates Rising? appeared first on The College Investor.
Switching banks takes time so make sure to choose one that satisfies you for the long term. Here's a step-by-step guide for how to switch.
The post How To Switch Banks Step-By-Step appeared first on The College Investor.
A reverse mortgage is a HELOC alternative that is targeted towards 62 and older homeowners who often have completely paid off their mortgage.
The post What Is A Reverse Mortgage And How Does It Work? appeared first on The College Investor.
Startup investing comes with unique risks and low liquidity. Here's what you need to know if you’re curious about investing in a startup.
The post How To Invest In Startups (And Does It Make Sense) appeared first on The College Investor.
If you’re familiar with the Islamic faith, consider halal investing. Here's how to build a portfolio that is aligned with your beliefs.
The post What Is Halal Investing? appeared first on The College Investor.
Online schools and courses can be expensive, so it's helpful to find an online school that accepts financial aid. Here's how to find them.
The post Can You Get Financial Aid For Online Courses? appeared first on The College Investor.
Investing in stocks can be overwhelming, so make sure you research and learn the basics. Here's what you need to know.
The post How To Research Stocks For Beginners appeared first on The College Investor.
Learn when it can make sense to allocate a portion of your investment portfolio to sports and trading cards.
The post How To Invest In Sports And Trading Cards appeared first on The College Investor.
Community college isn't as expensive as a university, but isn't completely free. Here are student loan options for community college.
The post How To Get Student Loans For Community College appeared first on The College Investor.
If you're on the fence about paying off your student loans quickly, here are reasons you may want to wait before repaying them.
The post When It Makes Sense To NOT Pay Off Your Student Loans appeared first on The College Investor.
If you find out someone took out student loans in your name, here's how to deal with student loans and identity theft.
The post Student Loans And Identity Theft: What To Do If Someone Took Out Loans In Your Name appeared first on The College Investor.
Improve your investment risk with a dynamic strategy that adjusts the asset allocation over time. Here's what you need to know.
The post Delayed-Onset Investment Glide Paths In College Savings And Retirement Plans appeared first on The College Investor.
Is it time to pick a college? If the task seems daunting, that might be because it is! Here are some of the best tools to help you decide.
The post The Best Tools to Help You Research and Compare Colleges appeared first on The College Investor.
If you're a student studying math, science, and engineering, these are the best scholarships to help cover the cost of college.
The post The Best Scholarships and Fellowships for Math, Science, and Engineering appeared first on The College Investor.
The Department of Education has announced several IDR waivers that impact income-driven repayment plans and loan forgiveness.
The post IDR Waiver: Income-Driven Repayment Plan Updates And Fixes appeared first on The College Investor.
Recently, two researchers have identified problems in how some states manage their 529 college savings plans. Here's what you need to know.
The post Conflicts Of Interest In 529 Plans Highlight Need For Oversight appeared first on The College Investor.
Find out what options you have if your student loan was automatically discharged due to disability. Otherwise, the loan may be reinstated.
The post Options If Your Student Loan Was Automatically Discharged Due To Disability appeared first on The College Investor.
The Department of Education recently cracked down on forbearance steering and is offering more loan forgiveness with the IDR Waiver.
The post What Is Forbearance Steering and How to Get Help appeared first on The College Investor.
The cost of college housing makes a huge difference in the total price of what you owe for school. Here's how to save on student housing.
The post How To Pay For College Housing On and Off Campus appeared first on The College Investor.
Here is the ultimate guide to renters insurance policies, with quotes and coverage options for college students and traditional renters.
The post The Ultimate Guide To Renters Insurance – Everything You Need To Know appeared first on The College Investor.
After you file your taxes, you need to make sure you store a copy of your tax return and make adjustments for next year.
The post What To Do After You File Your Taxes? appeared first on The College Investor.
Although foreign students aren't eligible for federal loans, they may qualify for private international student loans with these lenders.
The post 6 Best International Student Loans Of 2022 appeared first on The College Investor.
Reinvesting dividends is one of the most important aspects of long-term growth of stock market returns. Here's what it is and why it's important.
The post Dividend Reinvestment: The Key To Long-Term Growth appeared first on The College Investor.
It can be tough to balance paying your living expenses during student loan repayment, but here's some budgeting tactics to help.
The post How To Handle Basic Living Expenses During Student Loan Repayment appeared first on The College Investor.
If you own cryptocurrencies like Bitcoin or Ethereum, you may wonder how you can cash out your crypto and get US Dollars back?
The post How To Cash Out Your Crypto Or Bitcoin appeared first on The College Investor.
Leasing a car means that your payments give you the right to drive a vehicle for a set period of time rather than going towards ownership.
The post How Does Leasing A Car Work? (And Why You Shouldn’t Do It) appeared first on The College Investor.
How much does the interest rate on your student loan really matter when it comes to repaying your student loan debt? We break it down.
The post How Much Does Your Student Loan Interest Rate Matter? appeared first on The College Investor.
If you have student loans, it can feel tough to invest - but time is money and you need to balance student loan repayment and investing.
The post How To Balance Student Loan Repayment And Investing appeared first on The College Investor.
Depending on who you ask, the government either earned a profit or lost money on federal student loans. Here's how it works.
The post Does The Government Profit Off Of Student Loans? appeared first on The College Investor.
You can reduce the amount of student loan money needed to finance college by following this order of operations for how to pay for college.
The post How To Pay For College: The Best Order Of Operations appeared first on The College Investor.
If you're managing a busy schedule but also need to earn some extra income here are ten flexible part time jobs that you can do from anywhere.
The post 10 Flexible Part Time Jobs You Can Do From Anywhere appeared first on The College Investor.
You can use your tax refund to build your credit and improve your credit score with these simple tips and tricks.
The post How To Use Your Tax Refund To Build Your Credit appeared first on The College Investor.
We break down when dollar cost averaging is a good investment strategy, and when you should consider lump sum investing.
The post When Dollar Cost Averaging Works And When It Doesn’t appeared first on The College Investor.
If you have student loan debt, should you buy life insurance to protect yourself? Here's what to know about life insurance with student debt.
The post Should You Buy Life Insurance With Student Loan Debt? appeared first on The College Investor.
If you made a mistake or missed something on your taxes, you can file an amended tax return and correct the error to claim your refund.
The post How To File An Amended Tax Return appeared first on The College Investor.
Coverdell education savings accounts have a $2,000 annual contribution limit per beneficiary, but there are ways to get around this limit.
The post How To Bypass The $2,000 Coverdell Contribution Limit appeared first on The College Investor.
If you're still waiting to file your taxes, here's eight tips to know so that you don't make a mistake before the tax deadline.
The post 8 Last-Minute Tax Reminders For 2022 appeared first on The College Investor.
By now, you've probably heard plenty of stories of Bitcoin (or crypto) millionaires. Here's how they did it and if it's still possible today.
The post So You Want To Become A Bitcoin Millionaire? appeared first on The College Investor.
There may be a way for the Secretary of Education to implement broad student loan forgiveness through a regulatory change to ICR.
The post How To Potentially Implement Broad Student Loan Forgiveness appeared first on The College Investor.
Ready to move out once and for all? Here's everything you need to know about how to move out of your parents' house emotionally and financially.
The post How To Move Out Of Your Parents House (Emotionally and Financially) appeared first on The College Investor.
Did you know that you can use a Roth IRA to save for college, but there are pros and cons that you need to be aware of.
The post How To Use A Roth IRA To Save For College appeared first on The College Investor.
You might think "if I don't pay my student loans" everything will be okay - but the consequences of not paying your debt can be harsh.
The post What Happens If I Don’t Pay My Student Loans? appeared first on The College Investor.
How much you should have in a 529 plan to save for college for your children by age, including high and low contributions for public and private school.
The post How Much Should You Have In A 529 Plan By Age appeared first on The College Investor.
We break down whether it made more sense to pay extra towards your student loans during the payment pause, or should you have invested?
The post Should You Have Paid Down Your Student Loans During The Payment Pause? appeared first on The College Investor.
We analyze the data of which colleges award and which students receive institutional merit grants and financial aid.
The post Who Gets Institutional Merit Grants At Private Colleges? appeared first on The College Investor.
Here's how to contact the IRS the fastest if you need assistance with tax issues and the best IRS phone numbers to call.
The post How To Contact The IRS (IRS Phone Numbers) appeared first on The College Investor.
We look at the 8 best tax breaks and tax tips for side hustlers and small business owners this year to save money on taxes.
The post The Best Tax Breaks For Side Hustlers This Year appeared first on The College Investor.
You can use a 529 plan to repay up to $10,000 in student loans - but there are some caveats you need to know.
The post How To Use A 529 Plan For Student Loan Repayment appeared first on The College Investor.
Is there such a thing as private student loan forgiveness? If so, is it difficult to obtain? Are there alternative options? Read on to learn.
The post Private Student Loan Forgiveness: Is There Such a Thing? appeared first on The College Investor.
Tuition-free college is a strong draw for students, but there are many caveats that may cause them to fall short for low-income students.
The post What You Should Know About Tuition-Free Colleges appeared first on The College Investor.
We break down the best tax software for students and how students can take advantage of free tax filing even with student loan interest.
The post How To Find The Best Tax Software For Students And Recent Grads appeared first on The College Investor.
When creating a budget for college, make sure you are considering these costs before you borrow and during student loan repayment.
The post Budget Before You Borrow | Make Sure You Know Your College Costs appeared first on The College Investor.
The current student loan payment pause is set to expire on August 31, 2022, but will President Biden extend it again?
The post Will The Student Loan Payment Pause Be Extended Again? appeared first on The College Investor.
Since Congress makes student loan policies, like loan forgiveness, we wanted to explore how much student loan debt Congress has.
The post How Much Student Loan Debt Do Members Of Congress Have? appeared first on The College Investor.
A donor-advised fund (DAF) is a tax-advantaged investment account where 100% of the funds are required to go to charitable organizations.
The post Donor-Advised Funds (DAF) | Pros, Cons, And Strategies appeared first on The College Investor.
We break down the statute of limitations laws for student loans to help you determine when old student debt is legally enforceable.
The post Statue Of Limitations Laws For Student Loans appeared first on The College Investor.
With bond yields currently being outpaced by inflation, where can income investors turn? Here are nine bond alternatives to consider.
The post 9 Best Bond Alternatives: Where Else To Invest For Safety And Income appeared first on The College Investor.
Two important crypto tax changes were tucked inside the new Infrastructure Bill. Here's what they are and how investors can prepare for them.
The post Two Tax Changes Crypto Investors Need To Understand appeared first on The College Investor.
If you paid towards existing student loans last year or took out new ones, here are our top five tips for filing taxes with student loans.
The post What Student Loan Borrowers Need To Know About Filing Taxes In 2022 appeared first on The College Investor.
Trying to nail down the right life insurance coverage amount and term length for your situation? Here are a few key factors to keep in mind.
The post What’s The Right Life Insurance Coverage Amount And Term Length? appeared first on The College Investor.
Here's what NFT creators and investors need to understand about how NFT taxes work and how they can avoid overpaying at tax time.
The post How Taxes On NFTs Work (And How To Track It) appeared first on The College Investor.
The Education Department has proposed a new repayment plan: Expanded Income-Contingent Repayment (EICR). Here's what we know about it so far.
The post What Is Expanded Income-Contingent Repayment (EICR)? appeared first on The College Investor.
Looking to move your finances in a positive direction this year? Here are 6 ways to get a financial fresh start in 2022.
The post 6 Ways To Get A Financial Fresh Start In 2022 appeared first on The College Investor.
Do you want to reduce the amount of taxes you pay? Then you might want to pick the standard deduction or itemize. Learn your options!
The post The Standard Deduction or Itemizing Your Tax Return | Which Is Best? appeared first on The College Investor.
Here's how to reconcile your advance Child Tax Credit payments to determine if you're owed more credit or if you'll need to pay some back.
The post How To Reconcile Your Advance Child Tax Credit Payments appeared first on The College Investor.
This tax season parents will have to deal with major expansions to the Child Tax Credit among other tax changes. Here's what to know.
The post 3 Tax Changes Affecting Parents This Year appeared first on The College Investor.
If you want a great overview of parent loans to help pay for college, this is it. Look at your options as well as some alternatives.
The post Parent Loans: Options For Parents To Pay For Their Child’s College appeared first on The College Investor.
We break down the top online tax filing companies that actually offer free tax filing software for federal and state returns in 2022.
The post Free Tax Software 2022: Where To File Your Taxes For Free appeared first on The College Investor.
We've ranked the best tax software for 2022, including best free file, best for investors, best for landlords, best for deductions, and more!
The post The Best Tax Software 2022: What’s The Best Tax Program For Me? appeared first on The College Investor.
Crypto and NFT tax software can calculate the taxes you owe on your various blockchain transactions. These are our top picks for 2022!
The post Best Crypto And NFT Tax Software For 2022 appeared first on The College Investor.
Interested in investing in real estate? Roofstock is an online marketplace for tenant-occupied real estate. Learn more in this Roofstock review.
The post Roofstock Review: Invest In Real Estate Remotely appeared first on The College Investor.
Do you need to start a budget or start fresh with a new app? Take a look at these popular budgeting apps and see which one is right for you!
The post Best Budgeting Apps 2022: Track Your Money appeared first on The College Investor.
The Fed says it sees three rate hikes in 2022. So should you refinance your student loans now while rates are still so low? Here's how to decide.
The post Should You Refinance Your Student Loans? appeared first on The College Investor.
How to craft a college list: find financial and academic fit when you apply to college and how to decide what schools to apply to.
The post Where To Apply To College – Finding Academic and Financial Fit appeared first on The College Investor.
TaxSlayer 2022's Classic tier provides a great value and its Premium and Self-Employed tiers include access to tax professionals.
The post TaxSlayer Review 2022 appeared first on The College Investor.
We share 5 tips to help you make this the best financial year and achieve your New Years money resolutions.
The post 5 Tips To Make This The Best Financial Year appeared first on The College Investor.
We break down the most common college scams, including student loan scams, scholarship scams, and identity theft.
The post The Most Common College Scams [And How To Avoid Them] appeared first on The College Investor.
Looking to start earning some passive income? Here are thirty passive income ideas to choose from. Some require a monetary investment while others require time. Which one is your favorite?
The post 35 Passive Income Ideas You Can Use to Build Real Wealth appeared first on The College Investor.
It can be difficult to know where to get started with improving your credit score. Here are five of the best low risk ways to build credit!
The post Best Low-Risk Ways To Build Credit appeared first on The College Investor.
The IRS tax code includes several tax breaks for tuition and student loans. Learn what these tax benefits are and how to maximize them.
The post Tax Breaks For Tuition And Student Loans appeared first on The College Investor.
Want earn more passive income from your crypto assets? Here are five smart ways to maximize your crypto interest earnings with Hodlnaut.
The post Maximize Your Crypto Interest Earnings With Hodlnaut appeared first on The College Investor.
Order routing is an important part of successful trading, especially for crypto traders. Learn how order routing works and when it matters.
The post What Is Order Routing For Stocks And Crypto? appeared first on The College Investor.
If you're one of the early filers, which tax software is best for you? These are for people filing taxes in December or January.
The post Reviewing The Best Tax Software For Early Filers appeared first on The College Investor.
Hoping to graduate from college with no student loan debt? Our analysis of the NPSAS data shows you how to increase your chances.
The post How To Graduate From College With No Student Loan Debt appeared first on The College Investor.
FreeTaxUSA 2022 is a great bargain tax software option for business owners, side hustlers, and small landlords that know their taxes.
The post FreeTaxUSA 2022 Review: Is It Really Free? appeared first on The College Investor.
Financial aid administrators can reduce student loan limits in only a few situations. But new rules could expand their authority. Learn how.
The post Can College Financial Aid Administrators Reduce Student Loan Limits? appeared first on The College Investor.
Wondering who still offers early tax refund anticipation loans? Find out the most popular providers and whether or not they're worth it.
The post Early Tax Refund Anticipation Loans: Who Offers Them and Should You Get One? appeared first on The College Investor.
What are tax refund advance loans? What are some of the pros and cons? Read this article and then decide if they are right for you!
The post Here Are the Pros and Cons of Tax Refund Advance Loans appeared first on The College Investor.
Teaching kids financial literacy & setting them up to build wealth is important. Here's how you can give kids the gift of stock this year.
The post How To Give Kids The Gift Of Stock: Best Stocks For Kids appeared first on The College Investor.
Are you looking for a holiday gift guide centered around college students and recent graduates? Look at some of these great gift ideas!
The post Holiday Gift Guide for College Students and Recent Grads appeared first on The College Investor.
Looking for a better way to organize and track your bills? Here are some tips to help you avoid late fees with minimal stress and hassle.
The post How To Organize And Track Your Bills appeared first on The College Investor.
Building an effective spending plan doesn’t need to be difficult. Check out our simple step-by-step guide to staying on top of your finances.
The post How To Build An Effective Spending Plan appeared first on The College Investor.
Do you have student loan debt and are trying to get a mortgage? Learn how to get an FHA mortgage loan and the factors involved.
The post How to Get an FHA Mortgage Loan with Student Loan Debt appeared first on The College Investor.
Next Gen FSA is a new centralized student loan servicing system that aims to improve the borrower experience. Learn how it will work.
The post Next Gen FSA: The Future Of Student Loan Servicing appeared first on The College Investor.
These companies give their stockholders and shareholders perks, rewards, and discounts on products for simply owning stock in their company.
The post Companies That Give Shareholders Perks And Rewards appeared first on The College Investor.
Farmland investing taxes are typically paid on rental income earned from the farm and capital gains if it's sold for a profit. Learn more.
The post How Taxes Work When Investing In Farmland appeared first on The College Investor.
Cyclical and consumer discretionary stocks perform best during economic expansions and worst during recessions. Learn how to invest in them.
The post What Are Cyclical And Consumer Discretionary Stocks? appeared first on The College Investor.
If you're looking for a simple and affordable term life insurance option, this Ethos Life review is a must read!
The post Ethos Life Review: Fast And Simple Life Insurance Policies appeared first on The College Investor.
Venture Capital (VC) provides financing for private companies such as startups and small businesses. Learn how to invest in venture capital.
The post What Is Venture Capital? (And How To Invest) appeared first on The College Investor.
So, you need help budgeting? Looking for the right online software? YNAB (youneedabudget.com) could be the perfect choice!
The post YNAB Review: The Best Paid Budgeting Software appeared first on The College Investor.
With a little digging and basic math, students can gain a clearer picture of the real cost of college. Here's how to calculate college costs.
The post How Much Does College Really Cost? appeared first on The College Investor.
Our list of the best ways to save on your taxes before the end of the year, without losing or wasting money.
The post 10 Ways To Save On Your Taxes Before The End Of The Year appeared first on The College Investor.
Shiba Inu is a dog-themed memecoin, built on the Ethereum blockchain, that's exploded in popularity since its inception.
The post What Is Shiba Inu And Can I Still Invest? appeared first on The College Investor.
If you're looking for some ways to save money on your tax bill, take a look at these tax deductions for young people. Which ones apply to you?
The post The Most Common Tax Deductions appeared first on The College Investor.
Wondering which items should be added to your end of year financial to-do list? Here are nine money moves to make before the new year.
The post End Of Year Financial To-Do List appeared first on The College Investor.
Need money to pay for college? Applying for federal aid can help. Find out how to fill out a FAFSA properly and why it matters.
The post How To Fill Out The FAFSA And Why It Matters appeared first on The College Investor.
If you are looking for a great yield on your money, take a look at what is offered through the My Savings product. Here are details!
The post Nationwide Bank Review | High-Yield Checking And Savings appeared first on The College Investor.
Borrowers who were defrauded by their colleges may be able to get their federal student loans canceled and payments refunded. Learn how.
The post How To Get Help For Your Loans If You Were Defrauded By Your College appeared first on The College Investor.
The F.I.R.E. movement encourages followers to pursue financial independence by increasing their savings. Learn the different type of F.I.R.E.
The post What Is The FIRE Movement? appeared first on The College Investor.
While the payment pause is set to end on August 31, 2021, it might be prudent for student loan collections to be delayed further. Learn why.
The post Should Student Loan Collections Be Delayed Further? appeared first on The College Investor.
Student loan forgiveness is not just a myth. There are many different programs to consider and you can learn about your options here.
The post Is Student Loan Debt Forgiveness Real? Debunking The Myth appeared first on The College Investor.
If you filed taxes early in 2021, the FAFSA treatment of unemployment benefits may hurt your financial aid eligibility. Here's what to do.
The post FAFSA Treatment of Unemployment Benefits In 2021 And Beyond appeared first on The College Investor.
Want to grow your net worth so you can build wealth and retire? Here are 3 real ways to grow your net worth by $5,000 each month.
The post How To Grow Your Net Worth By $5,000 Per Month appeared first on The College Investor.
Unlike lump sum settlements, there are times when the money from structured settlements will have no impact on financial aid. Learn why.
The post How Structured Settlements Impact Financial Aid appeared first on The College Investor.
With the news of the Equifax data breach, many people have been scared about their identity stolen - guess what? It already has been.
The post Calm Down: Your Identity Has Already Been Stolen! appeared first on The College Investor.
We compare debit cards vs. credit cards to help you decide which would be the best fit for your specific spending habits and needs.
The post Debit Cards vs. Credit Cards: How To Choose appeared first on The College Investor.
The wash sale rule is meant to discourage the abuse of tax-loss harvesting benefits. Learn more about the rule and if it applies to crypto.
The post What Is The Wash Sale Rule? (And Does It Apply To Crypto?) appeared first on The College Investor.
There are still a few weeks before Christmas which means you still have time to earn extra cash for Christmas shopping.
The post 23 Ways To Earn Extra Cash For Christmas appeared first on The College Investor.
Learn how your student loan debt can get you fired and what your employer can legally do regarding checking your credit and debt.
The post 8 Freaky Ways That Student Loans Can Get You Fired appeared first on The College Investor.
The Biden Administration reportedly wants to overhaul PSLF. Learn which PSLF reforms can be made through executive action and which can't.
The post What PSLF Reforms Can Be Made Through Executive Action? appeared first on The College Investor.
Cash App started as a money transfer platform but has evolved into a financial services platform that offers stock and crypto investing, debit card access, banking services, and more.
The post Cash App Review 2022: Money Transfers, Banking, And Investing appeared first on The College Investor.
A 'Second Look' tax return review is when a tax pro checks your self-prepared return. Are these reviews worth their cost? Here's our thoughts.
The post Do You Need A ‘Second Look’ Tax Return Review From A Tax Pro? appeared first on The College Investor.
Want to give the gift of stock and start investing on a low budget? Check out this Stockpile review to learn how you can start investing in fractional shares.
The post Stockpile Review: Stock Gift Cards And Fractional Share Investing appeared first on The College Investor.
There are many ways to help you grandkids pay for college, including a few that have tax and financial aid benefits. We compare your best options!
The post How Grandparents Can Save and Gift Money for a Grandchild’s College Education appeared first on The College Investor.
Automatic student loan forgiveness might sound great -- but is it legal? And could it come with tax consequences? We dig up the details.
The post Is Automatic Student Loan Forgiveness Legal? appeared first on The College Investor.
During deflation, lack of demand leads to lower prices. Here are three of the best investments to make during deflationary periods.
The post How To Handle Deflation: Best Investments For Deflationary Periods appeared first on The College Investor.
The U.S. Department of Education can compromise federal student debt in certain situations that it's deemed "uncollectable." Learn more.
The post When Can The Department of Education Compromise Federal Student Debt? appeared first on The College Investor.
Student loan discharge in bankruptcy is legal, but rarely allowed. We discuss a few proposed policy changes that could change that.
The post When Is Student Loan Discharge In Bankruptcy Legally Allowed? appeared first on The College Investor.
Could a 529 plan have a negative affect on your FAFSA and financial aid eligibility? Here's what college savers need to know.
The post How Does A 529 Plan Affect Your FAFSA And Financial Aid? appeared first on The College Investor.
Why are talented, low-income students underrepresented in selective colleges? We explore the causes of undermatching and ways to reduce it.
The post Undermatching: Why Do Smart Low-Income Students Not Enroll In Selective Colleges? appeared first on The College Investor.
These stock and options strategies for volatile markets can help you maximize profits and minimize risk during large price swings.
The post Stock And Options Strategies For Volatile Markets appeared first on The College Investor.
Interested in earning money on your cryptocurrency assets while you sleep? Here's how to make passive income through crypto!
The post How To Make Passive Income Through Crypto appeared first on The College Investor.
Are you an overloaded, tired, or exhausted college student? Here are some time management tips you can use now and in your future career!
The post 8 Time Management Tips for Overloaded College Students appeared first on The College Investor.
The Federal Funds Rate has been near zero since March 2020. Learn how businesses and individuals could be impacted if the Fed raises rates.
The post Why Does It Matter If The Fed Raises Interest Rates? appeared first on The College Investor.
Don't be fooled! Section 7702 plans aren't retirement plans but rather a marketing label for cash value life insurance policies. Learn more.
The post What Are Section 7702 Plans (Are They Even Real Investments)? appeared first on The College Investor.
Learn how to get additional help from a student loan ombudsman when you aren't able to resolve your student loan disputes on your own.
The post How To Get Help From The Student Loan Ombudsman (And When) appeared first on The College Investor.
Learn about the symptoms of depression related to student loan debt and discover free and low-cost mental health resources that may help.
The post 11 Low-Cost Mental Health Resources for Students and Grads appeared first on The College Investor.
Celsius is now offering 0% APR crypto loans for California residents (at 25% LTV) with no origination fees. Learn more!
The post Celsius Launches 0% APR Crypto Loans For California appeared first on The College Investor.
Suicide is not the answer to your student loan debt burden, and there are tools and resources that can help.
The post Let’s Talk: Suicide And Student Loan Debt appeared first on The College Investor.
We share five lessons from experts about what it takes to be successful in college, from the basics to truly knowing yourself and finding your ROI on education.
The post 5 Lessons On How To Be Successful In College appeared first on The College Investor.
Cutting the cord shouldn't keep you from being able to watch your favorite teams. Here are the best ways to watch sports online for free.
The post How To Watch Sports Online For Free appeared first on The College Investor.
Learn why the FAFSA asset protection allowance is dropping to record lows and how it could impact your eligibility for financial aid.
The post The FAFSA Asset Protection Allowance Plunges To Zero appeared first on The College Investor.
Here is an action plan and strategy set for overcoming the fear of investing in the stock market so that you don't lose money over time.
The post How To Overcome The Fear Of Investing In The Stock Market appeared first on The College Investor.
Here are five different legal ways that you can lower your student loan payment, by switching repayment plans or refinancing your loans.
The post 5 Legal Ways To Lower Your Student Loan Payment appeared first on The College Investor.
As a lawyer, you might have a lot of student loan debt. Is there student loan forgiveness for lawyers? Find out what is available here.
The post Student Loan Forgiveness for Lawyers: What Is Available? appeared first on The College Investor.
Looking for advice on how to pick a college major? We examine three popular strategies and break down their strengths and weaknesses.
The post How To Pick A College Major | 3 Top Strategies appeared first on The College Investor.
Student loan entrance counseling is required before you can receive your first undergraduate or graduate federal student loan. Learn why.
The post Student Loan Entrance Counseling | Is It Worth It? appeared first on The College Investor.
While Quicken is a popular tool, there are so many great ways to manage your money online. Check out these best alternatives to Quicken.
The post What Are The Best Alternatives To Quicken? appeared first on The College Investor.
Title IV status means that a school has been accredited by the Department of Education to participate in federal student aid programs.
The post What Is Title IV And How Does It Impact Financial Aid? appeared first on The College Investor.
If you are a nurse or healthcare worker who would really like those student loans gone for good here are some of your student loan forgiveness options.
The post Student Loan Forgiveness For Nurses And Healthcare Workers appeared first on The College Investor.
We examine the pros and cons of the debt snowball vs. debt avalanche to help you decide which payoff method is best for you.
The post Debt Snowball vs. Debt Avalanche: Which Debt Payoff Method Is Best? appeared first on The College Investor.
Need more money to cover your higher education costs? Here are ten options to help pay for school when you don't have enough financial aid.
The post Options To Pay For School If You Don’t Have Enough Financial Aid appeared first on The College Investor.
Want to diversify your portfolio beyond stocks, bonds, and cash? These are 8 of the most popular alternatives investments available today.
The post 8 Most Popular Alternative Investments appeared first on The College Investor.
Compare the options of what borrowers should do when their student loan grace period expires — from repayment plans to deferment options.
The post Student Loan Grace Period: What To Do When It Expires? appeared first on The College Investor.
We list the tell-tale signs of predatory lending and explain what steps borrowers can take to protect themselves against unfair loan terms.
The post How To Protect Against Predatory Lending | What To Watch Out For appeared first on The College Investor.
Two federal loan servicers have recently announced they will not renew their contracts. Learn why student loan servicers are dropping out.
The post Why Are Student Loan Servicers Dropping Out? appeared first on The College Investor.
Wondering if it would be beneficial to use a 529 plan for estate planning? We explain when that strategy could make sense and how to do it.
The post How To Use A 529 Plan For Estate Planning appeared first on The College Investor.
Student loan debt is a serious problem in the United States. Here are six tips to help young adults and millennials pay off student loan debt.
The post 6 Tips to Help 20-Somethings Pay Off Student Loan Debt appeared first on The College Investor.
Borrowers with FFELP loans can federally consolidate them or refinance them with private lenders. Here are the pros and cons of both options.
The post What Should You Do With Your Old FFELP Loans? appeared first on The College Investor.
We explore what a safe deposit box is, its pros and cons, and when it still can make sense to rent one. Here's what you need to know.
The post Getting A Safe Deposit Box | Everything To Know (And Warnings) appeared first on The College Investor.
We examine the pros and cons of REPAYE, including its interest subsidy, to see if it might be a good fit for your student loan situation.
The post REPAYE | Understanding Revised Pay As You Earn And Its Subsidy appeared first on The College Investor.
Learning what option Greeks are and how to use them can help traders maximize profit potential and reduce risk. Check out this quick primer!
The post What Are Option Greeks? (And How Can Traders Analyze Them?) appeared first on The College Investor.
We break down the pros and cons of passive investing vs. active investing to help you choose the best investment strategy for you.
The post Passive vs. Active Investing: Which Is Best? appeared first on The College Investor.
Think that residential real estate is your only investing option? Think again. Here's how to invest in commercial real estate in 2022.
The post How To Invest In Commercial Real Estate appeared first on The College Investor.
Public Service Loan Forgiveness can be a valuable program, but you'll want to avoid the PSLF errors that often trip borrowers up. Here's how!
The post How To Avoid The Biggest PSLF Errors That Cause Forgiveness Denial appeared first on The College Investor.
The easiest money-saving phone calls include calling your credit card issuer, insurance provider, and cable company. See the full list!
The post The 5 Easiest Money-Saving Phone Calls appeared first on The College Investor.
Community college students have several ways to save money compared with students who spend all four years attending a university. Learn how!
The post How To Use Community College To Save Money And Get Ahead appeared first on The College Investor.
An index fund is an exchange traded fund (ETF) or mutual fund that is designed to mirror the performance of a certain stock market benchmark.
The post What Is An Index Fund? (And Is It A Good Investment Choice?) appeared first on The College Investor.
Do you have a hard time finding extra money in your budget to make student loan payments? Check out this ChangEd review to see how this app can help you round up spare change.
The post ChangEd Student Loan Payment App Review appeared first on The College Investor.
Coverdell ESAs are less popular than 529 plans but have some advantages over them when saving for K-12 expenses. Learn their pros and cons!
The post Coverdell Education Savings Accounts (ESAs) | Are They Worth It? appeared first on The College Investor.
Income-Contingent Repayment (ICR) is the oldest income-driven repayment plan and the only one that's available to Parent PLUS Loan borrowers.
The post What Is Income-Contingent Repayment (ICR)? appeared first on The College Investor.
Identity thieves want your money and credit. But you can protect yourself today by taking these steps to secure your financial information.
The post 8 Steps To Help Secure Your Financial Information appeared first on The College Investor.
There are a few obstacles and opportunities related to borrowing and repaying federal student loans for expats. Here's what you need to know.
The post Guide To Federal Student Loans For Expats appeared first on The College Investor.
Here are eight ways that you can set up a plan that will eliminate your student loan debt with loan forgiveness, repayment plans, and more.
The post 8 Ways To Eliminate Your Student Loan Debt appeared first on The College Investor.
Portfolio rebalancing means selling some assets and buying others in order to maintain the asset allocation that fits your risk tolerance.
The post What Is Portfolio Rebalancing? (And How To Do It) appeared first on The College Investor.
There are many ways to get student loan forgiveness, including public service, volunteer work, medical studies, the military, or law school.
The post Student Loan Forgiveness Programs (The Complete List) appeared first on The College Investor.
Airline mileage malls reward you with airline miles for doing the spending you would normally do anyway. Find the best airline mileage malls to use in this post.
The post Best Airline Mileage Malls: Earn Miles For Shopping Online appeared first on The College Investor.
Learn how parents can claim advance child tax credit payments from the IRS of $250 to $300 per child starting July 15th, 2021.
The post How To Claim The Advance Child Tax Credit Payments Monthly appeared first on The College Investor.
We break down the best automatic investing apps of 2022 that make it easy to create "set it and forget" investment portfolios at low costs.
The post Top 3 Automatic Investment Apps Of 2022 appeared first on The College Investor.
Here are 15 different summer vacation money making ideas for college students who didn't get a summer job and are still looking to earn money.
The post 15 Summer Money Making Ideas For College Students appeared first on The College Investor.
The average student loan monthly payment in the US is $393. See what the average borrower can expect to pay on each type of repayment plan.
The post What Is The Average Student Loan Monthly Payment For US Borrowers? appeared first on The College Investor.
We break down two simple ways to save interest on your student loans without raising your monthly payment or paying extra towards principal.
The post How To Save Interest On Your Student Loans appeared first on The College Investor.
Stride Funding's income-share agreements are alternatives to student loans. They offer income-based payments and don't require cosigners.
The post Stride Funding Income Share Agreements Review appeared first on The College Investor.
Investing on margin is riskier than investing with cash. But these tips can help margin traders avoid blowing up their portfolios.
The post Investing On Margin | How To Use Leverage And Not Get Burned appeared first on The College Investor.
Mortgage rates are still at all-time lows in 2022. Here's how to compare mortgage refinance rates and terms to find the best deal!
The post How To Compare Mortgage Refinance Rates appeared first on The College Investor.
Are you a medical professional thinking about refinancing your student loans to save money? Check out this Splash Financial Student Loan Refinancing review to learn how to get started.
The post Splash Financial Student Loan Refinancing Review appeared first on The College Investor.
Here’s the step-by-step process you’ll need to follow to file a complaint against your bank if you have an issue that it won't resolve.
The post How To File A Complaint Against Your Bank appeared first on The College Investor.
The college roommate scam is a crime where someone pretends to rent a room when they are not legally allowed to do so.
The post Beware of the College Roommate Scam appeared first on The College Investor.
We're celebrating Millionaire's Day and what better way to do that than by laying out a path on how to become a millionaire.
The post How To Become A Millionaire At Any Age appeared first on The College Investor.
Short selling is a trading strategy that involves selling borrowed stock shares in hopes that they can be bought back later at a lower price.
The post What Is Short Selling (And Should You Do It)? appeared first on The College Investor.
We provide a head-to-head comparison of IBR vs. PAYE to help you decide which of these income-driven repayment plans may be right for you.
The post IBR vs. PAYE | Understanding Income-Driven Repayment Plans appeared first on The College Investor.
A Grad PLUS loan is a Department of Education loan that can cover up to the full cost of attendance for graduate or professional students.
The post What Is A Grad PLUS Loan? | Everything You Need To Know appeared first on The College Investor.
Selling put options is an income-collection strategy for traders who have a neutral to bullish view of a stock. Learn how to get started.
The post The Beginner’s Guide To Selling Put Options appeared first on The College Investor.
A clearinghouse matches buyers and sellers in stock market transactions. Some investment apps self-clear while others use independent firms.
The post What Is A Clearinghouse? appeared first on The College Investor.
Medical residency and relocation loans can help cover the non-college-related costs of becoming a doctor. Here's where to find them.
The post Where To Find Medical Residency And Relocation Loans appeared first on The College Investor.
We break down how much federal loan servicer like Fedloan and Navient make per loan. Hint: much less than you think.
The post How Much Do Federal Student Loan Servicers Make Per Loan? appeared first on The College Investor.
Here are some old and new life-changing personal finance books. If you're wanting to shift your finances to something positive, take a look.
The post 10 Best Personal Finance Books of 2021 (That Will Change Your Life) appeared first on The College Investor.
Unlike other forms of generosity, scholarship funds can be taxable to recipients. Learn the rules concerning taxable scholarships.
The post Taxable Scholarships: Is That Money Really Free? appeared first on The College Investor.
Looking to save money on self-employed health insurance coverage? We break down eight options worth considering in 2022.
The post Best Self-Employed Health Insurance Options For 2022 appeared first on The College Investor.
We put together our list of the ten best gift ideas for high school or college graduates this year - so find your ideas now!
The post 10 Awesome Gift Ideas For High School Or College Grads appeared first on The College Investor.
Are you on track with your retirement savings? See benchmarks for how much someone should have saved for retirement at different ages.
The post How Much Should You Have Saved For Retirement Right Now? appeared first on The College Investor.
Here's what you need to do step by step if you missed the tax filing deadline and now you're late filing taxes .
The post What To Do If You’re Late Filing Taxes appeared first on The College Investor.
Whether you’re a beginner or have decades of investing experience, these stock tracking apps can help you monitor your investments better.
The post Best Stock Tracking Apps To Keep Tabs On Your Investments appeared first on The College Investor.
Here are the best last-minute tax tips to take advantage of before the 2021 tax filing deadline (which has been extended to May 17th).
The post Best Last-Minute Tax Tips For 2021 appeared first on The College Investor.
Saving for college is complicated in America because there are many differences in the 529 plans that are offered by each state.
The post Differences In 529 Plans: Why Saving For College Is So Messy In America appeared first on The College Investor.
Non-fungible tokens (NFTs) are crypto-based digital assets that are unique and nearly impossible to copy. Learn how to invest in them.
The post What Are NFTs And How To Invest In Them appeared first on The College Investor.
We break down the average net worth of millennials by age, as well as stretch goals to be in the top 1% of millennial wealth.
The post The Average Net Worth Of Millennials By Age appeared first on The College Investor.
We break down a few fundamental concepts that you should understand if you're wanting to start analyzing and trading options.
The post Analyzing And Trading Options 101 appeared first on The College Investor.
Our proposal to reform student loans while at the same time holding colleges and universities accountable for what they charge students.
The post Proposal: How To Reform Student Loans And Hold Colleges Accountable appeared first on The College Investor.
Adjusted gross income (AGI) is your total income minus certain above-the-line deductions. Learn how to calculate your AGI and why it matters.
The post How To Calculate Your Adjusted Gross Income (AGI) appeared first on The College Investor.
SPACs are shell companies that raise capital from investors through an IPO with the intention to acquire a private company within two years.
The post SPACs 101: What Is A SPAC And Should You Invest? appeared first on The College Investor.
We compare two of the most popular tax prep strategies - tax pro vs. DIY online - to help you decide which option would fit your needs best.
The post Tax Pro Vs. DIY Online: Which Tax Prep Is Better For You? appeared first on The College Investor.
Check out this guide to state taxes on student loan forgiveness to learn which states exclude forgiveness from your income and which don't.
The post State Taxes And Student Loan Forgiveness appeared first on The College Investor.
We break down a few basic fundamental indicators that traders should consider when analyzing and trading stocks and ETFs.
The post Analyzing And Trading Stocks And ETFs 101 — Fundamental Analysis appeared first on The College Investor.
Overdraft protection prevents bank customers from having transactions declined due to insufficient funds. Learn how to avoid overdraft fees.
The post Overdraft Protection: How It Works And How To Avoid Fees appeared first on The College Investor.
Business owners can save time and money by working with qualified tax professionals. Here's how to find the right tax pro for your business.
The post How To Find A Tax Pro For Your Business appeared first on The College Investor.
There's a lot to consider when your side hustle becomes your main hustle. Here's how to prepare yourself both financially and emotionally.
The post When Your Side Hustle Becomes Your Main Hustle [What To Know] appeared first on The College Investor.
Whether you're wanting to pay someone across the table from you or across international borders, here are the best apps to send money!
The post Best Apps To Send Money (Domestic And International) appeared first on The College Investor.
Businesses need budgets too! We compare the features and pricing of some of our favorite business budgeting systems and tools available today.
The post 5 Best Business Budgeting Systems And Tools appeared first on The College Investor.
Here are seven investment ideas for your tax refund that can help you grow your money over time.
The post 7 Investment Ideas To Get The Most Out Of Your Tax Refund appeared first on The College Investor.
Some politicians are asking President Biden to sidestep Congress and provide student loan forgiveness by executive order. But is that legal?
The post Is Student Loan Forgiveness By Executive Order Legal? appeared first on The College Investor.
Growth investing is a strategy that prioritizes buying stocks and funds that are expected to grow faster than average. Learn how it works!
The post Growth Investing: What It Is And How To Start appeared first on The College Investor.
Value investing is a type of investment strategy in which investors perform fundamental analysis to find undervalued stocks.
The post Value Investing: What It Is And How To Start appeared first on The College Investor.
If you want professional tax prep but don’t want to visit an office, virtual tax preparation could be a good option. Learn how it works.
The post Virtual Tax Preparation: What To Know appeared first on The College Investor.
As side hustling becomes a way of life for many Americans, here are 6 things gig workers and independent contractors need to know for taxes.
The post What Gig Workers And Independent Contractors Need To Know For Taxes appeared first on The College Investor.
Going back to school as an adult can be a way to invest in yourself and your future. But is it worth the cost? Here's how to decide.
The post Going Back To School As An Adult: Is It Worth It? appeared first on The College Investor.
There are several ways to get started with agriculture investing. We break down your best options including REITs, ETFs, crowdfunding, and more.
The post Agriculture Investing | The Ways To Find Returns In Farming appeared first on The College Investor.
We surveyed 1,200 Americans to get an understanding of how much they paid, on average, to file their taxes and what services they used.
The post How Much Americans Pay To File Their Taxes appeared first on The College Investor.
Master Promissory Notes (MPN) are legally-binding documents that all federal student loan borrowers must sign. Learn why they're important!
The post Master Promissory Notes (MPN): What To Know appeared first on The College Investor.
Tax-loss harvesting involves selling investments that are down in order to offset realized capital gains and lower your tax liability.
The post Tax-Loss Harvesting: A Step-By-Step Guide appeared first on The College Investor.
There are several ways to invest in gold, including stocks, ETFs, options, futures, and physical gold bars. Learn how to get started!
The post How To Invest In Gold appeared first on The College Investor.
MPI (Maximum Premium Indexing) accounts are a new twist on Indexed Universal Life insurance plans. Learn about their pros and cons.
The post MPI (Maximum Premium Indexing): What To Know appeared first on The College Investor.
When it comes to emergency funds, there is so much conflicting advice. So how much do you really need for your rainy-day fund?
The post Emergency Funds: How Much Do You Really Need? appeared first on The College Investor.
The Student Aid Index (SAI) will soon replace the Expected Family Contribution (EFC) on the FAFSA. Learn how this will impact financial aid.
The post Student Aid Index: What To Know About The Changes To Financial Aid appeared first on The College Investor.
The Fair Tax system would replace all the payroll and income taxes in the current tax code with one national sales tax.
The post What Is The Fair Tax? How It Would Work And Its Pros And Cons appeared first on The College Investor.
Swing trading is a stock trading strategy that sits between day trading and long-term investing. Learn how it works!
The post Swing Trading 101: How To Get Started appeared first on The College Investor.
Our complete guide on how to start investing after college, specifically crafted for millennials that are 22 to 29 years old.
The post How To Start Investing After College appeared first on The College Investor.
There are several ways to invest in silver, including mutual funds, ETFs, futures, options, and more. Learn how to get started!
The post How To Invest In Silver appeared first on The College Investor.
Here is our guide on what to do if my parents claimed me on their taxes even though you're in college or an adult outside the house.
The post What To Do If My Parents Claimed Me On Their Taxes? appeared first on The College Investor.
In a flat tax system, everyone pays the same tax rate regardless of how much they earn in annual income. Learn more about how it works!
The post What Is The Flat Tax? appeared first on The College Investor.
Never got your stimulus money? You can still claim a missing stimulus check on your tax return via the Recovery Rebate Credit. Here's how!
The post How To Claim A Missing Stimulus Check On Your Tax Return appeared first on The College Investor.
I believe that you can start investing on minimum wage, especially in a 401k, but you have to make sure your finances are in order.
The post Can You Invest If You Make Minimum Wage? appeared first on The College Investor.
Due to new tax situations caused by the pandemic, there's a strong chance that your tax refund is going to be smaller this year. Learn why.
The post Why Your Tax Refund Is Going To Be Smaller This Year appeared first on The College Investor.
Several Biden student loan forgiveness proposals have already been announced. Learn what they are and how they could impact you!
The post Biden Student Loan Forgiveness Changes And Proposals appeared first on The College Investor.
Invested in cryptocurrencies like Bitcoin recently? Here's everything you need to know about how taxes on cryptocurrencies work.
The post How Taxes On Cryptocurrencies Like Bitcoin Work appeared first on The College Investor.
The best self-employed retirement plans include the SEP-IRA, Solo 401(k), and the SIMPLE IRA. Here are some details on each!
The post The Best Self-Employed Retirement Investment Plans appeared first on The College Investor.
If past budgets have failed you it's possible you're not budgeting for your personality. Take a look at these options to see which is the best for you.
The post Budgeting for Your Personality (If Past Budgets Have Failed You) appeared first on The College Investor.
Under the Kiddie Tax, dependents with unearned income ranging from $2,300 to $11,000 can be taxed at their parent’s marginal tax rate.
The post What Is The Kiddie Tax And How Does It Work? appeared first on The College Investor.
It can be hard to know how much do you have to make to file your taxes, but we break down the nuances of when to file.
The post How Much Do You Have To Make To File Your Taxes? appeared first on The College Investor.
According to a recent College Investor survey, 73% of Americans support Biden's plan to forgive $10,000 in student loan debt.
The post 73% of Americans Support Student Loan Forgiveness appeared first on The College Investor.
If you’re worried about the IRS taking your tax refund due to student loan debt default, here's how you can challenge a tax offset.
The post Stopping Tax Offsets Due To Student Loan Debt appeared first on The College Investor.
When it comes to mutual funds vs. ETFs, which type of investment is best for you? Learn their most important similarities and differences.
The post Mutual Funds vs. ETFs | Understand The Difference appeared first on The College Investor.
While the IRS doesn't impose 529 plan contribution limits, states do set aggregate maximums for their 529 plans and may set annual caps too.
The post 529 Plan Contribution Limits appeared first on The College Investor.
If you're going to buy gift cards, you might as well get them "on sale." Here are the best websites to buy discount gift cards today.
The post Where To Buy Discount Gift Cards appeared first on The College Investor.
Here are some ways to make money from the Christmas gifts you don't want after the holiday season is over.
The post How To Turn Your Christmas Gifts Into Thousands Of Dollars appeared first on The College Investor.
We break down all the benefits of 529 plan rollovers and transfers as well as a few potential downsides you'll want to watch out for.
The post 529 Plan Rollovers And Transfers: Pros And Cons appeared first on The College Investor.
HSA Rollovers can be helpful to move an old HSA account to a new provider, but there are rules you need to follow!
The post HSA Rollovers | How To Do It And What To Know appeared first on The College Investor.
Floating rate funds are fixed-income investments that may offer better returns than traditional fixed-income funds, but are also higher-risk.
The post Floating Rate Funds | What They Are And How They Work appeared first on The College Investor.
Looking to get professional tax help without breaking the bank? These organizations offer free tax preparation for qualifying taxpayers.
The post Where To Find Free Tax Preparation appeared first on The College Investor.
The California Student Borrower Bill of Rights provides strong protections for student loan borrowers and accountability for servicers.
The post Understanding The California Student Borrower Bill Of Rights appeared first on The College Investor.
If you're one of the millions of Americans who have two or more jobs, here's how to file your tax return with multiple W-2 forms.
The post How To File Your Taxes With Multiple W-2 Forms appeared first on The College Investor.
Here are the 5 things your millionaire neighbor isn't telling you about getting rich, and you likely already know one living by you.
The post 5 Things Your Millionaire Neighbor Isn’t Telling You appeared first on The College Investor.
With the tuition and fees deduction, you can deduct up to $4,000 of education expenses from your taxable income. Learn how to claim it!
The post How To Claim The Tuition And Fees Deduction appeared first on The College Investor.
Private student loans are subject to state statute of limitations laws. Here are the student loan statue of limitations timelines by state.
The post Student Loan Statute Of Limitations Timelines (By State) appeared first on The College Investor.
There are many ways to invest in cryptocurrency, from buying coins directly to indirect routes using funds and stocks. Learn all your options!
The post How To Invest In Cryptocurrency appeared first on The College Investor.
We compare the best online accounting software options for freelancers and side hustlers, including Quickbooks, Xero, Wave, and FreshBooks.
The post The Best Online Accounting Software For Side Hustlers And Freelancers appeared first on The College Investor.
Do you have some twenty-somethings in your life? If so, check out this holiday gift guide. It's also great for recent college graduates!
The post Holiday Gift Guide for the Twenty-Somethings in Your Life appeared first on The College Investor.
We break down the best prepaid cell phone plans of 2022 based on their strengths, pricing, and coverage. Check out our top picks!
The post Best Prepaid Cell Phone Plans For 2022 appeared first on The College Investor.
Many investors think that cryptocurrency prices will steadily rise over time. But can cryptocurrency hedge against a stock market crash too?
The post Can Cryptocurrency Hedge Against A Stock Market Crash? appeared first on The College Investor.
We break down the math of which is better: to buy a house or rent an apartment as your primary residence.
The post Buy A House vs. Rent An Apartment appeared first on The College Investor.
Handling taxes for your side hustle needn't be time-consuming or draining. Organize your side hustle taxes today with these four easy steps.
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Here are 10 different ways to start investing with just $1,000, including investing in stock, bonds, ETFs, mutual funds, and real estate.
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A surety bond is a contract in which a surety company guarantees that a contractor or company will fulfill certain promises to an obligee.
The post What Is A Surety Bond? (And What Does Licensed And Bonded Mean?) appeared first on The College Investor.
Getting a loan with poor credit can be more difficult, but it's not impossible. Here's how to find the best deals on bad credit loans.
The post Ways To Get A Loan With Poor Credit (Under 600 FICO) appeared first on The College Investor.
Our Roth 401(k) Guide shows you everything you need to know about your company's Roth 401k and should you open one?
The post The Ultimate Roth 401(k) Guide appeared first on The College Investor.
Want to make sure you have the right gear for taking classes at home? This is the essential tech for at-home college students in 2020.
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If you're looking for some ways you can make money driving, there's almost sure to be one listed here that you'd be interested in! Let's go!
The post 10 Interesting Ways You Can Make Money Driving appeared first on The College Investor.
The Earned Income Tax Credit (EITC) is a refundable tax credit designed to help those with low to moderate incomes. Find out if you qualify!
The post Earned Income Tax Credit: What It Is And How To Qualify appeared first on The College Investor.
We break down why student loan servicer changes happen and how you can minimize your stress and frustration during the process.
The post What Happens If Your Student Loan Servicer Changes? appeared first on The College Investor.
With paper trading in practice accounts, you can test drive a trading platform and practice trade strategies without risking any real money.
The post Paper Trading And Practice Accounts: Where To Learn To Trade appeared first on The College Investor.
Here's how to compare a personal line of credit vs. student loan refinancing if you're looking to lower your student loan interest rate.
The post Personal Line Of Credit Vs. Student Loan Refinancing: How To Choose appeared first on The College Investor.
Here are the ten best short term investments right now for young investors looking to invest cash in the stock market or other place.
The post The 10 Best Short Term Investments appeared first on The College Investor.
The most common student loan scams involve paying fees to consolidate or to get forgiveness, law firms and lawsuits, and trying to eliminate your loan debt.
The post Top Student Loan Scams appeared first on The College Investor.
Want to know how to become a real estate investor? Here are some options to get you started real estate investing with just $500.
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Paying off debt can feel overwhelming if you don't where to start. Here's how to pay off $10,000 of debt in one year - step by step.
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Learn how taking paid surveys online works, how much you can expect to make, and which sites offer the best survey experiences and payouts.
The post Paid Surveys: Earn Money For Giving Your Opinion Online appeared first on The College Investor.
We list over 100 different ways to make money in college - all of these side jobs are real, honest, and legal.
The post 100+ Real And Honest Ways To Make Money In College appeared first on The College Investor.
Are you wondering what the 2022 Federal tax brackets are, and where you land on the tax bracket system? Here's a table and other things to keep in mind.
The post Federal Tax Income Brackets For 2022: What Is My Tax Bracket? appeared first on The College Investor.
What would you do if you didn't have to work 40 hours per week? If you put in the work now, you can build enough passive income that will make that dream a reality.
The post 3 Ways To Make $50,000 Per Year Without Working With Passive Income appeared first on The College Investor.
Learn about what capital gains tax brackets are and the rates associated with them. Here's a quick overview to get you started.
The post Capital Gains Tax Brackets For 2022: What They Are and Rates appeared first on The College Investor.
The gig economy has made it easier than ever to make money on your own schedule, and here's some tips to make it worth it.
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Here's our list of crazy ways to make $10,000 that you've likely never heard of, from selling your stuff, to creating a unique business.
The post 10 Crazy Ways To Make $10,000 You’ve Never Heard Of appeared first on The College Investor.
We break down the best robo-advisors for 2022 that offer automatic investing, rebalancing, tax savings, and more, with reasonable fees.
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Neighbor is a website and app that matches people who have empty space with other people in their neighborhood who need storage or parking.
The post Neighbor App Review: The Airbnb For Storage appeared first on The College Investor.
Robo-advisors are platforms that use algorithms to automate investments on behalf of clients with minimal to no human intervention.
The post Robo-Advisors: What They Are And How They Work appeared first on The College Investor.
Payday loans are expensive short-term loans for small loan amounts. Learn why they're so dangerous and the best alternatives.
The post Payday Loans: Why They Suck And The Alternatives appeared first on The College Investor.
Curious about buying bitcoins and investing cryptocurrency? Here are 10 of the best bitcoin and crypto investing sites to start using.
The post 10 Best Crypto Exchanges & Platforms of May 2022 appeared first on The College Investor.
Capitalized interest is unpaid interest that is added to a loan balance after a period of reduced payment ends and normal repayment begins.
The post What Is Capitalized Interest And Should You Try To Avoid It? appeared first on The College Investor.
We break down the best college scholarship search websites to help you find legit scholarships that you have a high chance of winning.
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Here are the cheapest investing sites that offer low commissions and the lowest cost robo-advisors to help you invest and save money.
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We break down the best student loans and best ways to pay for graduate school - so you can know what your options are to make it affordable.
The post The Best Student Loans To Pay For Graduate School appeared first on The College Investor.
Here's how you can use a margin loan to borrow from your investment portfolio as an alternative to a HELOC or other credit.
The post Pledged Asset Line (PAL): Borrow With A Portfolio Line Of Credit appeared first on The College Investor.
There's a consistent battle between real estate vs. stocks when it comes to which to invest in - but you can invest in both!
The post Real Estate vs. Stocks: Why You Should Invest In Both appeared first on The College Investor.
Here's our guide to help you find the best student loan rates so that you can get the best interest rate on your student loans.
The post How To Find The Best Student Loans And Rates appeared first on The College Investor.
Everyone has a grand idea of how to make money from home, and it is possible! You just need to know where to start and what to do!
The post 80 Ways To Make Money From Home (In Your Pajamas) appeared first on The College Investor.
The Depositors Insurance Fund (DIF) is a private Massachusetts-based insurance fund that insures bank balances above the $250,000 FDIC limit.
The post What Is The Depositors Insurance Fund (DIF)? appeared first on The College Investor.
Crypto savings accounts allow investors to earn interest on their crypto assets by lending them out at a set rate. Here's our top picks.
The post The Top Crypto Savings Accounts Of 2022 appeared first on The College Investor.
Looking for free college funding is no easy task. However, it's something you should definitely do. Here's how to find college scholarships and grants.
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Futures trading involves buying or selling futures contracts that lock in the future sale price of an underlying commodity or asset.
The post Futures Trading: What It Is And How It Works appeared first on The College Investor.
Calculating effective tax rates isn't as simple as just multiplying income by tax bracket. See what the average person really pays in taxes.
The post Effective Tax Rates: How Much You Really Pay In Taxes appeared first on The College Investor.
Here are a few tools that can help you find the best high-speed internet providers in your area and compare their speeds, plans, and prices.
The post Finding The Best High-Speed Internet Providers Near You appeared first on The College Investor.
Learn whether or not rental car insurance is worth having and where you can get the coverage that you need.
The post Rental Car Insurance: Do You Need It Or Should You Waive It? appeared first on The College Investor.
Don't sit idly by while identity thieves wreck your credit. Protect yourself by using one of the 6 best credit monitoring services of 2022.
The post The Best Credit Monitoring Services appeared first on The College Investor.
Learn how to invest in oil as a beginner including how much of your portfolio oil should comprise and your best investment options.
The post How To Invest In Oil: A Guide For Beginners appeared first on The College Investor.
Paperstac is a platform that allows investors to buy or sell mortgage notes completely online with security and transparency.
The post Paperstac Review: Invest In Mortgage Notes appeared first on The College Investor.
Your child decided to skip college? Here's how you can use your 529 funds including several options to avoid the 529 plan withdrawal penalty.
The post How To Use A 529 Plan If Your Child Doesn’t Go To College appeared first on The College Investor.
Payday loans often come with hefty fees and interest rates. If you need quick cash, these 8 payday loan alternatives could save you money.
The post 8 Payday Loan Alternatives When You Need Fast Cash appeared first on The College Investor.
While their names and abbreviations are very similar, SS, SSI, and SSDI are three distinct Social Security programs. Here's how they compare.
The post SS vs. SSI vs. SSDI: What Are The Differences? appeared first on The College Investor.
Pell Grants are issued by the Department of Education to undergraduate students who are able to demonstrate an exceptional financial need.
The post Pell Grants: What They Are And How To Qualify appeared first on The College Investor.
Debt settlement is a debt relief option with an unscrupulous past. Here's what you need to consider before joining a debt settlement program.
The post Debt Settlement: Inside The Secret World Of Debt Consolidation appeared first on The College Investor.
The current gift tax rules allow you to give $16,000 per year and $12.06 million throughout your lifetime of tax-free money. Learn more!
The post What Is The Gift Tax And How Much Can You Gift Tax-Free? appeared first on The College Investor.
Portfolio analyzer tools can help you evaluate your investing strategy and compare investment products. Check out our top picks!
The post The Best Portfolio Analysis Tools For 2022 appeared first on The College Investor.
401k loans are funds that are borrowed from a 401k plan. Unlike most loans, there is no lender involved and the interest is paid to yourself.
The post 401k Loans: The Good, The Bad, The Ugly appeared first on The College Investor.
Looking to maximize your 529 plan savings? Here are our top 529 plan tips and tricks to help you get more value out of your plan.
The post Our Top 529 Plan Tips, Hacks, And Uses appeared first on The College Investor.
The "William D. Ford Act" is a phrase that scammers will often use to establish legitimacy when discussing your William D. Ford Direct Loans.
The post William D. Ford Act: A Student Loan Scammer’s Favorite Phrase appeared first on The College Investor.
With socially responsible investing, you can invest in companies that are making a positive difference on the environment and society.
The post What Is Socially Responsible Investing? appeared first on The College Investor.
Student loan deferments play an integral role in helping students get out of student loan debt. Here's what you should know.
The post Student Loan Deferments: What To Know appeared first on The College Investor.
If you're wanting a good idea of how 529 plans work and some details regarding their operation, this article has what you're after.
The post What Is A 529 Plan and Where to Open One in Your State appeared first on The College Investor.
In large cap and mid cap indexes, equal weighted index funds outperform their underlying benchmark indexes, and probably should be in your portfolio.
The post Will Equal Weighted Index Funds Outperform Their Benchmark Indexes? appeared first on The College Investor.
When you're unemployed, it's hard to manage your student loan debt & make payments. Learn about all your options in this post.
The post How To Deal With Student Loan Debt When You’re Unemployed appeared first on The College Investor.
Vinovset is a technology platform that allows everyday people to invest in fine wine. Read our Vinovest review to learn how it all works.
The post Vinovest: Invest In Fine Wines appeared first on The College Investor.
The FDIC insures up to $250,000 of bank deposits per bank per person. Here's how to insure excess bank deposits above the FDIC limit.
The post How To Insure Excess Bank Deposits Above The FDIC Limits appeared first on The College Investor.
The CARES Act gives student loan borrowers the opportunity to receive up to $5,250 of tax-free employer student loan assistance through 2025.
The post Up to $5,250 of Employer Student Loan Assistance Is Tax-Free Through 2025 appeared first on The College Investor.
When it comes to how to save for college, there's a right order of operations that can make things easier for your family.
The post How To Save For College: The Order Of Operations Parents Should Follow appeared first on The College Investor.
If you're feeling overwhelmed by your credit card bills, these are your best credit card debt relief options to relieve the burden.
The post Credit Card Debt Relief | Where to Find Legitimate Help appeared first on The College Investor.
Cashier's checks are guaranteed by the bank itself and are often used for large purchases when the buyer can't use a debit or credit card.
The post Cashier’s Checks: What They Are And Where To Go appeared first on The College Investor.
If you're offered a 401(k) at work, you need to make sure you set it up correctly to start saving and investing.
The post How To Setup Your 401(k) On Your First Day Of Work appeared first on The College Investor.
How much house can I afford? Our mortgage calculator can help you answer that important question and set a realistic mortgage budget.
The post Mortgage Calculator | How Much House Can I Afford? appeared first on The College Investor.
Money orders are a guaranteed form of payment that you don't need a bank account to use. Learn how money orders work and their pros and cons.
The post Money Orders: What They Are And How They Work appeared first on The College Investor.
A banking score is a consumer score created by ChexSystems based on your checking account history. Learn how to fix your banking score.
The post How to Fix Your Banking Score to Open a Checking Account appeared first on The College Investor.
Here are step-by-step instructions on how to create a budget that actually works so that you can start reaching your financial goals faster!
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Learning how to invest in stocks doesn't need to be complicated and overwhelming. Here are a few easy ways to get started.
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You've probably heard of FICA Tax, and you've probably seen it on your paystub, but do you know what it is and how much you pay?
The post What Is FICA Tax? appeared first on The College Investor.
If you've lost your job, one of your first steps needs to be to file for unemployment benefits. But how much will you receive each week?
The post Unemployment Benefits – What Do You Get? appeared first on The College Investor.
International bonds can play an important role in your portfolio, but they do carry certain risks and rewards. Here's how to invest in them.
The post The Risks and Rewards Of International Bonds appeared first on The College Investor.
FarmTogether is a platform that allows you to invest in US farmland directly. Should you consider this alternative investment?
The post FarmTogether Review | Invest in Farmland appeared first on The College Investor.
Farmland has been a steady non-correlated investment for decades. Technology has made it easier than ever to invest in farmland.
The post How To Invest In Farmland appeared first on The College Investor.
We're on the edge of possibly the largest recession in a century. Here's how to find recession-resistant investments during uncertainty.
The post Finding Recession-Resistant Investments In The Face Of The Coronavirus appeared first on The College Investor.
Earnin in a financial services app that allows you to get a paycheck advance as an alternative to a payday loan if you need cash.
The post Earnin Review | Paycheck Advance App appeared first on The College Investor.