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4 Reasons Your Student Loan Payments Could Skyrocket (and What You Can Do About It)

The average monthly student loan payment for borrowers between the ages of 20 and 30 is $351.

Although making that payment each month is struggle enough, your student loan payment can actually increase as time goes on. Find out which factors impact your monthly payment and what you can do to reduce or lock in your payment so you don’t pay more down the road.

Why did my student loan payment go up?

Here are the four most common reasons behind an increase in your monthly student loan bill.

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Why the Treasury Department Could Be Your New Student Loan Servicer

Recently, news broke that James Runcie, head of the Federal Office of Student Aid, resigned. According to the New York Times, Runcie’s resignation memo revealed one of the deciding factors behind his departure is the Trump Administration’s proposal to move the management of student loans from the U.S. Education Department to the U.S. Treasury Department.

This information comes on the heels of a proposal to drastically cut the Education Department’s budget over the next 10 years, which could signal some major changes for student loan borrowers. Here’s what you need to know.

Advocates of the proposal believe it could simplify student loan management

The idea of moving the management of student loans to the Treasury Department isn’t’ new.

“During the Obama administration, the idea of shifting responsibility for the student loan program to the Treasury Department had some supporters.”

James Kvaal, former deputy under the Secretary of Education, believes a move could simplify things for borrowers. That’s because student borrowers sometimes have to deal with both the Education Department and the IRS- which is under the Treasury Department.

Applications for income-driven repayment plans require information from your tax return. By moving student loans to the Treasury Department, students filling out those applications would no longer have to deal with two agencies.

The move could also theoretically increase safety. For example, the IRS’ online tool to retrive student loan borrower data for the application through the Education Department was recently hacked and had to be temporarily removed from the website.

James Runcie and other critics believe the Treasury Department isn’t capable

Advocates think the proposal is, in part, the answer to issues plaguing the Education Department. These issues include poor budgetary estimates and management of student loan services.Meanwhile, critics of the proposal think the treasury Department isn’t up to the task.

Runcie’s resignation memo states, “This is just another example of a project that may provide some value but will certainly divert critical resources and increase operational risk in an increasingly challenging environment.”

Former Treasury Secretary, Sarah Bloom Rasking, echoes Runcie. “Moving the agency that is supposed to provide stewardship for student loan borrowers to an agency that is working on a shoestring with a skeletal crew strikes me as a recipe for a policy disaster.”

The Treasury Department has already unsuccessfully tried to collect on student loans in the past. In 2015, the Treasury Department launched a two-year pilot program with the hopes of increasing collection rates and educating borrowers about their options for repayment. The program was a failure.

According to The New York Times, the private collectors used as a control group to measure the Treasury’s success during the program were more successful in their collection efforts. “[They] recovered more money and got more borrowers our of default.”

What does this mean for student loan borrowers?

As of right now, the proposal to move the management of student loans from the Education Department to the Treasury Department is still just that - a proposal. It will require Congress to take action, which means nothing is happening today.

For student loan borrowers wondering how this could impact their repayment, it’s too soon to tell.

However, there is one thing they can be sure of: Changes are coming in a lot of ways to student loans in this administration. The best thing borrowers can do is stay abreast of these changes and understand their rights at every turn.


4 Awesome Alternatives to Pet Ownership

Last week was National Puppy Day, so no doubt your Instagram feed was filled with picture after picture of oversized-paws, pink tongues and floppy ears… all tagged #furbaby – amiright?

I can imagine if you want a pet, but don’t have one, it may tug at the heart strings a bit. But having a pet requires a big commitment and since we’re a financial blog, we’ll just go ahead and break the news: pet ownership is not cheap.

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Using Your 401k to Reduce Taxable Income

TurboTax 401K

As you file your taxes, you’re probably thinking about ways to reduce your taxable income. Did you know that there are a lot of strategies you can use with your retirement funds, like your IRA and 401(k), to reduce your taxable income? Save for the future and save in taxes today – that’s a win-win situation.

We’re early in 2017, and there’s still time to make some retirement maneuvers to lower your 2016 tax liability (as well as steps you can take to reduce your tax liability next year):

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UPDATE: Current Borrowers to Remain Eligible for Public Service Loan Forgiveness Under Trump's Budget Proposal

Last week, the Washington Post reported that the Trump administration plans to include a potentially big blow to student loan borrowers in its education budget proposal: an end to the Public Service Loan Forgiveness (PSLF) program.

Unveiled in 2007, PSLF is currently slated to begin awarding federal student loan forgiveness to eligible public sector and nonprofit works later this year. At first, the report suggested those plans may be in jeopardy. however, more details have emerged that indicate current federal student loan borrowers will still be able to receive forgiveness through PSLF. The proposal would only impact new borrowers on or after July 1, 2018.

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5 Summer Job Ideas for Teachers

If you’re a teacher, you know summer vacation isn’t the life of luxury many people assume it is. In fact, it can be extremely stressful to not receive a regular paycheck during those months off. While many teachers plan and save for summer during the school year, it is still challenging to stretch approximately nine months of pay into covering bills and living expenses for a full year. To help you pad that budget, here are five summer jobs that are just right for teachers. They’ll bring in some extra money and leave time for rest and relaxation. Perfect.

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5 Financial Tips for New College Graduates

Graduating from college is one of life’s major milestones. It’s time to stop and celebrate your achievements, while looking toward an exciting future. You’re about to start making more decisions for yourself than ever before, and many of those decisions will involve how you’re going to spend and save your money. Here are five financial tips to help you start out on solid financial ground.

Have a Strategy for Student Loans- Student loan borrowers get a 6-month grace period before starting to make payments. While that may sound like a lot, it’s going to fly by fast, especially with all you’ve got going on. Do the groundwork now so you’re ready to start making payments when they’re due. Sign up for your student loan PIN, find our who your loan servicer(s) is and to get in touch with them, then, calculate what your monthly payment will be. Learn your options, so that you;re not locked in to a payment you can’t afford. If it all seems a little overwhelming, Student Loan Counseling can help you make sense of your options.

Be Careful with that Cash- Chances are- you scored some serious cash as graduation gifts. Rather than going on a spending spree, use it to help launch your into the next phase of life. Get yourself a professional-looking interview outfit, have a pro help you prepare a killer resume or even use it as seed money for your new emergency savings account.

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Here's the Difference Between Federal and Private Student Loan Consolidation

Most graduates leave school with a number of different student loans, racked up throughout their years in college. Each of these loans likely comes with different terms, payments, servicers, and statements. The sheer amount of information and numbers can be difficult to track.

If you feel overwhelmed with managing your student loan debt, don’t panic. You do have options. One way to make student loans more manageable is through consolidation.

When you consolidate your debt, you combine all those loans into one. You do this by taking out a new loan for the amount of the balances of the existing loans, use thie newly borrowed money to repay all the older loans, and then focus on repaying your one new loan. This simplifies your financial situation and makes it easier to keep track of loan terms, payments, and other information you need to know. Other benefits of consolidation could include securing more favorable interest rates (if you also refinance) and lower monthly payments (by extending the repayment term).

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DeVos Announces Huge Overhaul of Federal Student Loan System


The federal student loan service industry has seen numerous complaints from borrowers in recent years. Loan servicers such as Navient are even facing lawsuits from those who say their loans were mishandled, and that borrowers were deceived about their repayment options.

Recently, the Secretary of Education, Betsy DeVos, announced that the Trump administration is looking to change the federal student loan servicing system dramatically.

Issues with the current federal student loan servicing system:

Right now, there is $1.4 trillion in student loan debt spread across 44 million borrowers in the United States. Of that amount, the vast majority of student debt is comprised of federal student loans.

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