by Repayable | Dec 28, 2016 | #Millenniallife, Money Matters
Student loan refinancing seems to good to be true. I mean how can anyone legitimately slash your interest rate and save you thousands of dollars?! It has to be a scam… right? Nope, it’s not a scam you can refinance with reputable companies and save yourself thousands of dollars, but how do you make sure you don’t goof up? Read on for four traps to avoid and four ways to get the best refinance.
*All Earnest links are my personal link. If you refinance with Earnest using the link we both get $200. I didn’t choose Earnest for the $200 referral. I chose them because they met my personal standards and gave me the best interest rate.
1. Avoid refinancing if you’re hoping to take advantage of loan forgiveness options.
A refinanced loan is a private loan. Existing loan forgiveness options are for federal loans so you would eliminate your eligibility.
2. Avoid extending your repayment period when you refinance.
Refinancing student loans is a way to repay your debt faster and more efficiently by decreasing your interest rate. Don’t use it to stretch out your repayment period or your mitigating those benefits.
3. Avoid any company with application fees, loan transfer fees, or fees for early repayment.
There are many good companies that don’t have these so don’t settle for any company that does. Your money is yours, keep it.
4. Avoid losing the borrower benefits you still need.
What borrower benefits do you need? If you’re thinking about going back to school refinancing might not be the best option because it doesn’t allow the same amount of flexibility in terms of payment deferment as federal loans. Some companies will defer loans for up to 18 months.
Get the best student loan refinancing.
1. Check out the eligibility requirements of the company.
Most lenders offer refinancing for both federal and private loans. Many lenders have minimum credit score requirements, annual income requirements, and minimum lending amounts. Some have maximum lending amounts. Find at least two or three companies whose eligibility criteria you meet.
2. Compare borrower benefits.
Choose two or three companies with the borrower benefits that matter most to you. Benefits to consider include unemployment protection, entrepreneur program (SoFi), refinancing and ability to change monthly payments (Earnest has the most flexibility), and a company that doesn’t sell your loans.
3. Choose the refinancing term and monthly payment amount that are best for you.
Some companies (like Earnest) offer ultimate flexibility in choosing monthly payment amounts. Others have set terms of repayment so you’ll want to pick the term and monthly payment that make the most sense for your financial picture.
4. Submit your application & choose the company that gives you the lowest interest rate.
You already did the vetting of each company on the front end. All that’s left for you to decide is which interest rate is lowest.
That’s your quick and dirty guide to refinancing. If you avoid the four traps and follow the four steps to get the best student loan refinancing you’ve got your bases covered. Let me know what’s stopping you from refinancing in the comments below or on the Repayable Facebook Page.
Repayable is out now and has an entire chapter dedicated to refinancing that will serve as your definitive guide. Order your copy today and being the path to student loan liberation!
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by Repayable | Dec 27, 2016 | #Millenniallife, Money Matters
When you finally graduate from college it feels like a huge accomplishment. You’re feeling excited and relieved but possibly a little anxious. All that student loan debt you’ve been using to fund your education is looming over you and needs to be addressed. But what the heck is a person to do? It’s all so overwhelming and your financial counseling was, well, lacking. Read on for the five most common mistakes new grads make and five things every single graduate should do when they graduate to make their loans repayable.
1. Using your six month grace period when you have a job.
It seems like a great idea to just not pay on or deal with your student loans for six months. I mean after all you’ve earned it right? Not so much, interest is still accruing.
2. Picking the wrong repayment plan.
Whatever financial aid said is the plan most people choose is good enough for your right? Not necessarily, each individual has different goals when it comes to repaying student loan debt. You want to pick a plan that aligns with those goals.
3. Ignoring or not acknowledging your total debt amount.
You owe a lot of money and it sucks. You don’t want to look at it. Like a child, you want to cover your eyes so it can’t see you. Here’s the thing, the debt is there accruing interest whether you acknowledge it or not.
4. Not refinancing when your goal is to repay your debt as quickly as possible.
Refinancing isn’t for everyone but if your goal is to pay off your debt as fast as possible and your debt:income ratio is good (1.5:1 or less) and you have a steady job, refinancing is likely to be a good decision for you. Not refinancing cost me over $7,000 in 2015.
5. Being resigned to a life of powerless repayment.
Your loans are too much, no one else gets it, and you got the short end of the stick. We’ve all felt the self-pity and sense of powerlessness over your finances. Staying in this mindset won’t get your loans repaid.
What Every New Grad Should Do With Their Student Loans
You’ve read the mistakes and maybe even committed some of them yourself. So what exactly should you do with your student loans?
1. Start repaying your student loans as soon as you have a job.
Whatever your repayment strategy, refinancing, loan forgiveness, or income-based repayment, interest is accruing when you’re not making payments. Six months of interest adds up quickly. Also if you’re not making payments you’re not getting any closer to loan forgiveness options which require a certain number of payments before you’re eligible.
2. Take time to consider the best repayment plan for your financial goals.
What exactly is your goal with your student loans? Do you want to repay them as fast as possible? Pay the least amount of money possible? This goal will help you determine the repayment strategy that’s smartest for you. If you wan’t to pay as little as possible a loan forgiveness option that takes 10, 20, or 25 years might be your best bet. If you want to pay them as quickly as possible refinancing may be best for you.
3. Know your number and own it.
Your unwillingness to look at your student loan debt amount doesn’t do you any good. You still owe a lot, even if you’re in denial about it. You will have to pay it back. So you might as well make your payments work as efficiently as possible for you. To do that you need to look at your total debt amount and own it. Don’t feel ashamed about it, just take care of it.
4. Check out refinancing and see if it’s right for you.
Tomorrow’s post and video will be all about refinancing so you can explore this further. The simplest explanation of good candidates for refinancing are those with higher interest loans, good credit, and good income who want to repay their loans as quickly as possible.
5. Know your power in repayment.
Your repayment strategy is in your control. You can no longer control the amount of debt you took out for your education so let it go. Educate yourself, make the best decision you can, and advocate for borrowers.
Now that you have a few do’s and don’ts for student loan repayment I would love to hear your thoughts. Have you ever made one of these mistakes? Or have you ever made a decision that really saved you some money? Comment below or on the Repayable Facebook page. If you ever have any questions you can always email me at jeni@repayable.org.
Only five days until Repayable’s release (out January 1st)! You can pre-order the e-book here.
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by Repayable | Dec 26, 2016 | #Millenniallife, Money Matters
Student loans are kind of the worst. Which means there’s no shortage of complaints. The complaints are usually valid, but that doesn’t mean you shouldn’t try to solve them. Read on for six of the most common complaints along with their solutions.
1. I have no idea what I’m doing.
Solution: Get informed. Check out the multitude of blog posts on this page, the Repayable Facebook page, or Repayable YouTube Channel for easy to digest student loan information. For super customized information you can always message me any question or post on the Repayable Facebook Page.
2. Who cares how much debt I have? I’ll be paying on it forever anyway.
Solution: Know your number. Denial doesn’t make your debt go away. If you don’t fully recognize your debt load you won’t be able to make the smartest decisions with your money.
3. We got screwed, tons of debt, and less jobs.
Solution: We did get a lot of debt and some of you graduated when the job market was tight. Today’s job market has rebounded pretty well and the skills you built during the tough job market will serve you well in the future. That grit is only going to help you.
4. College is expensive and borrowers are the only ones who care.
Solution: It’s your job to make people care. Of course they don’t care, they have no idea what it’s like to have this much debt when you start young adult life. Contact your Congressman about a student loan-related piece of legislation (there’s a whole chapter on this in Repayable).
5. Money is a sensitive subject, I don’t want to talk about my debt.
Solution: “An eccentricity made a regular thing of ceases to provoke remark.” Sylvia Townsend Warner. Start by talking about your debt with people in the same profession who are on a similar payscale. Lose the shame, most graduates have debt, there’s nothing to be ashamed of.
6. There’s nothing I can do.
Solution: There is a ton you can do. I mean there’s enough you can do that I wrote an entire book about it. You can own your number, get informed, strategize a repayment plan that’s best for you, talk to your Congressman, eliminate the shame by talking about debt. All of this can change the story of student loan debt by making it truly repayable.
There are six days until Repayable is released. You’ve made the sacrifices to obtain a quality education, but now you’re burdened with crushing student-loan debt. Digging yourself out is not impossible—and Repayable shows you how. Pre-order Repayable for your e-reader today!
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by Repayable | Dec 19, 2016 | #Millenniallife, Money Matters
Hi everyone my name is Jeni. I want to share with you why I’m constantly talking about, writing about, and spreading the word about everything student loan debt related. I was woke to my lack of knowledge about student loans when I uncovered a $7,000 mistake. Let me get right into my tale.
I come from a working class family. My mom and dad have worked hard their entire lives. Thankfully, they’ve impressed that work ethic on me and my siblings. It’s the key ingredient to my resilience and grit.
Although neither of my parents have a college degree, they’ve always stressed the importance of doing well in school. So naturally I decided to go to college to earn myself a white collar career. One that would enable me to build a financially secure lifestyle so I wouldn’t have to worry about money. I chose to become a pharmacist because I love science and math, it helped people, and it would make me the kind of money I thought I would need for financial security.
During my six years of college I worked hard at part time jobs to ensure the only thing I had to borrow money for was tuition and books. I worked to pay for my cost of living which was no small feat. I can remember in my third year of pharmacy school working two jobs at around 20 hours per week. Sometimes, if the shifts stacked just right it was up to 30 hours. Every single break in college was an opportunity for me to work full-time. I didn’t travel, or chill and Netflix. I worked as many hours as I could get my hands on between the two jobs.
Despite working my ass off I manged to graduate with $128,000 in student loan debt. By the end of my pharmacy residency year that number rose to $132,000 even though I had paid over $6,000 toward my loans.
I can remember the relief I felt when I started to make pharmacist pay and really go after my debt. But even with aggressive payments, I didn’t feel like I was getting anywhere.
Then 2015 tax season rolled around and I filed my taxes, submitting the amount of interest I paid on my student loans into the tax form.
And then the pivotal moment in my repayment happened. I typed $13,776.15 into that box and a message came up. The message told me that my individual income was too high to claim this tax deduction. I almost lost it.
I mean this was ridiculous. The only reason I made too much as an individual to deduct the interest was because of those loans. I worked my ass off through college and residency, and now they were keeping all of my tax money?! Eff that!
So I was furious, not only had nearly half of my student loan payments gone to interest but I couldn’t even take the measly tax credit (you can only deduct $2,500). It felt like the government was taking my money twice.
But what could I do about it? Change that tax code? Yea right! Change my interest rate? Maybe but it seemed pretty sketchy. Then I heard an ad for SoFi and an add for Earnest on two different podcast shows. So I decided to do some googling to find out exactly what refinancing was all about.
I checked out both sites and submitted applications. Ultimately Earnest gave me the best interest rate so I went with them. My interest rate went from 6.8% on my federal loans to 3.36% on my refinanced loan overnight. This was in June of 2016.
My mistake and lack of knowledge cost me $7,000 in 2015. and who knows how much additional money in interest on principal that would have been paid down. If I had known about refinancing sooner my remaining debt would be <$78,000 instead of $85,000. It’s a big difference.
I wanted to do something to help people like me out. People who have made the responsible choice throughout their education but are still screwed with mountains of debt.
So for awhile I complained about debt and talked about it and annoyed everyone to death until the idea for Repayable was born. I want you to learn from me instead of having to learn the hard way at a cost. It’s tough to navigate the waters of student loan debt without guidance. It takes hours of sifting through difficult to find information to gain even a mediocre understanding.
Repayable is here to guide you, encourage you, and help liberate you from the shackles of student loans.
You can always ask me any question here in the comments, on the Repayable Facebook Page, or by sending me an email to jeni@repayable.org
For the sake of transparency, if you click my Earnest link and refinance we both get $200. I didn’t choose Earnest because of this. I chose Earnest because they have the best borrower benefits and gave me the best interest rate. Choose the refinancing company that’s right for you.
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by Repayable | Dec 5, 2016 | #Millenniallife, Money Matters
Giving the perfect gift can be such a thrill… until you look at your bank account. When you’re aggressively repaying your student loan debt it can feel like every extra gift is pulling you farther away from financial freedom. That mindset can make you feel pretty grinchy!
Don’t worry, you can navigate Holiday gifting without completely derailing your student loan repayment strategy.
Read on for my solid strategies to avoid being a Scrooge without falling off the student loan repayment bandwagon.
Fair warning, this article is really designed for folks who are making extra monthly payments rather than just the minimum monthly payment. If you’re already making only the minimum monthly payment your budget is much tighter than the strategies in this article cater to.
Make every gift worth it.
If you’re going to buy gifts make them worth it. Don’t just buy someone something for the sake of doing it. Really try to find out what that person wants/needs and spend your money on that.
For example when buying gifts for your friends or family who have student loan debt of their own consider buying them something that alleviates another cost burden. You could consider gifting an annual membership fee to their professional organization or alumni organization. Boring, yea, but you’re helping them out and you can feel good about that.
It’s not all or nothing.
Extra student loan payments aren’t all or nothing. Just because you can’t make as large of an extra payment as usual doesn’t mean you can’t pay any extra. The “all or nothing” attitude will delay your repayment. It’s ok if you can only afford to throw an extra $50-100 at your loans this month. That’s still some progress.
Map out your gift-giving.
Come up with a gift giving plan that includes all the people you need to get gifts for, how much you want to spend, and then an extra mystery gift for in case you forgot someone! This way you can decide how much you’ll be spending and you can hold yourself accountable for making even a little bit of an extra payment.
Size does not matter.
Think small and meaningful gifts rather than extravagant and expensive. Your student loan debt repayment is important to you. This means during the holidays you need to take a little extra time to carefully plan your gifts so you can get the most bang for your buck on a gift that someone will remember.
Here are a few gift ideas that can be meaningful without costing you a mint. The Amazon links in this post are associate links which means I get paid a commission if you make a purchase.
For the ladies in your life:
- If she wears earrings find her a unique pair of earrings that really shows off her personality. Here are some of my personal favorites for the writer, reader, scientist, engineer, or 90’s girl.
- For the avid reader, find some classic second hand books in good condition or a new book that you know she would love to read. Tie the books together with some twine for an old-timey feel and toss in her favorite snack so she can munch and read.
- Consider a gift card to somewhere she likes to go. Is coffee a treat for her? Buy a little gift card to her favorite coffee shop. Does she love fashion? Get her a Stitch Fix gift card. The possibilities are endless when it comes to gift cards. Just be sure to make it a little more personal with a handwritten card.
For the guys in your life:
- If he’s a gamer the obvious move is to buy him a new release he’s been eyeing. The not-so-obvious move is to go retro and buy him the digital NES system. It’s $60 which is about what you would expect to pay for the freshest titles on Xbox or PlayStation. We’re children of the 80’s and 90’s the nostalgic value of this digitized 1985 system is off the charts! P.S. anyone could also buy me one of these… I want one so bad!
- Does he consider himself a mixologist? Consider getting him a mixology kit or a specialty cocktail kit. An alternative would be a new cocktail book to suit his style.
- Is he a fitness enthusiast? Consider getting him a gift card to his favorite running store. Or the piece of workout gear you know he needs. Is he a coffee lover? Give him a gift card to his favorite coffee shop. The possibilities are endless for gift cards. Just don’t forget to make it a little more personalized with a handwritten card or something cute.
For everyone:
- A movie you know they would like. I’m thinking Star Wars: The Force Awakens or Star Trek Beyond for the Sci Fi lovers in your life, Step Brothers or The Big Lebowski for the comedy lover, Zootopia for the cartoon lover, Space Jam or Jurassic Park for the 90’s kid, the movie options are endless.
- My upcoming book Repayable makes a great gift for anyone looking for student loan debt liberation. I expect it to launch near Christmas. The Kindle version will be available for pre-order ($6.99) on Amazon very soon. The print version should be available by the end of December ($12.99).
- A unique travel coffee mug for the tea or coffee drinker on the go like this one for photographers. Make it a good one that doesn’t leak no matter how you tip it.
- Vacuum cleaner, gym membership, or an etiquette book. Bahaha I’m just kidding about these! Unless someone specifically asks you for any of these gifts you’re going to offend them.
Enjoy shopping and repaying your student loans you rock star. Nothing is impossible in the quest for student loan liberation!
Comment below with your best and worst Holiday gift ideas!
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by Repayable | Nov 21, 2016 | #Millenniallife, Money Matters
This election season was rough, and after Senator Bernie Sanders was no longer a candidate it felt as though student loan debt got shoved to the back of everyone’s political agenda. What remained of plans for student loan debt were small morsels added on to existing campaigns designed to attract millennials. Then the unimaginable happened and the U.S. elected you know who… Yea I feel the same about saying that human being’s name as the characters of Harry Potter felt about saying Voldemort’s name. Now you know who I voted for.
Anyway, political leanings need to fade into the background because half of the country was quite happy with themselves after the election. So as we move forward Repayable will be focused on helping you navigate student loan debt, no matter the regime controlling it.
With that let’s dive right in to what D.T. has to say about student loan debt.
Increasing College Accountability in Controlling Costs of Education
Mr. Trump’s website states that he will
“Work with Congress on reforms to ensure universities are making a good faith effort to reduce the cost of college and student debt in exchange for the federal tax breaks and tax dollars.”
This implies that he would financially incentivize colleges to reduce costs.
Access to College Education
Mr. Trump’s websites says he will
Ensure that the opportunity to attend a two or four-year college, or to pursue a trade or a skill set through vocational and technical education, will be easier to access, pay for, and finish.
This statement doesn’t discuss how he plans to make college easier to access, pay for, and finish. However the statement above and the next statement address the affordability point.
One Income-Based Repayment Plan to Rule Them All
Mr. Trump’s plan for student loan debt is to create one income-based repayment program and eliminate the other repayment programs. His plan is to cap repayment at 12.5 % of income and forgive the unpaid amount after 15 years.
“And if borrowers work hard and make their full payments for 15 years, we’ll let them get on with their lives. They just go ahead and they get on with their lives.”
This plan would be a huge advantage for borrowers and come at a huge cost for the government. Unfortunately this plan alone fails (as all existing plans do) to deal with the actual problem, skyrocketing costs.
It also leaves a few questions unanswered:
Will the forgiven loan amount be taxed?
Probably. Currently, loan amounts forgiven under income-based plans are taxed as income.
What if your existing income-based repayment plan is only 10% of your income, will your payment go up?
If Trump goes with “one plan to rule them all” then yes, however if this program is just added on then you could still keep the payment plan you already have.
What happens to other forgiveness options like PSLF?
Trump is in favor of simplifying student loan repayment. That means that programs such as PSLF could be eliminated.
What does it take to start up this 12.5% 15 year repayment plan?
Trump doesn’t need Congress to do this. He can add his repayment plan directly through the Department of Education regulatory process, President Obama did this.
None of the above information is law or certain to come to pass. So it’s hard to say how exactly these ideas may shift and change over time and which of them will be implemented.
However, Mr. Trump does seem to think differently about student loan debt than many in the Republican Party. Unlike typical Republican views, that the government shouldn’t be involved in student loans, Trump at least says he believes in the government sharing responsibility for student loan debt.
For now be sure to stay out of default by making timely payments on your student loans. If you’re struggling to make your payments, enroll in an existing income-based repayment plan to cap your payments at 10-15% of your income.
What policy change would you like to see regarding student loan debt? Comment below or post on the Repayable Facebook Page to share your thoughts.
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