Alan Fraser Houston
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Student Finances
Debt, Financial Freedom, Student Finances

Options for Teacher Student Loan Forgiveness

Loan forgiveness is a trade-off. It’s about incentivizing graduates to work in low paying or otherwise undesirable positions in exchange for erasing or significantly reducing their student loan balance. Without these programs, important community institutions would be severely understaffed.

If you’re a teacher or education student reading this, those criteria probably sound familiar.

Many school districts struggle to fully staff their schools, especially when it comes to certain positions. Loan forgiveness programs are one of the best ways for them to attract job candidates and retain them for long enough to make an impact.

Teachers have several options when it comes to loan forgiveness. Here’s what you should know about each one.

Teacher Loan Forgiveness

The Teacher Loan Forgiveness Program is the only federal loan forgiveness program specifically designed for teachers. Math or science teachers who teach in secondary schools or special education teachers can have up to $17,500 worth of loans forgiven. Any other kind of teacher can only receive up to $5,000 worth of loan forgiveness.

The program has strict requirements. Teachers must hold a license or certification in their state and teach for five consecutive years in a school that primarily serves low-income students. A list of eligible schools is available here.

Teachers qualify even if they work at different schools for each of the five years, but each of those schools must be eligible.

Teacher Loan Forgiveness is only available for Direct Subsidized and Unsubsidized Loans, as well as Subsidized and Unsubsidized Federal Stafford Loans. Perkins loans are not eligible.

If you have a Direct Consolidation Loan or a Federal Consolidation Loan that includes a Perkins loan, that portion won’t be eligible for Teacher Loan Forgiveness. PLUS or graduate school loans are also not eligible for Teacher Loan Forgiveness.

Public Service Loan Forgiveness

The Public Service Loan Forgiveness Program (PSLF) is arguably the best forgiveness option for teachers. Unlike the Teacher Loan Forgiveness program, borrowers don’t have to work consecutive years to qualify. This is especially helpful for teachers who take a year or two off.

Teachers can work for an elementary or secondary school, in either a public or private school setting. They must work at least 30 hours a week to qualify. After 120 qualifying payments, they can apply to have their remaining loan balance forgiven. There is no limit on how much will be discharged, and teachers won’t owe taxes on the forgiven amount.

Only Direct Loans are eligible for PSLF. If you have FFEL or Perkins Loans, you’ll have to consolidate them into a Direct Consolidation Loan to qualify.

Teachers should submit the PSLF employer certification form every year, which will verify the employer and calculate how many qualifying payments have been made.

PSLF can be used with Teacher Loan Forgiveness, but borrowers will only receive credit for one program at a time. If $5,000 of your loans is forgiven after five years through Teacher Loan Forgiveness, those five years’ worth of payments will not count toward PSLF.

While working toward PSLF, teachers will have to choose from one of the income-driven repayment plans. These options will lower your monthly payment.

Perkins Loan Teacher Cancellation

Teachers with Perkins loans can have their loan balance entirely discharged. To be eligible, they must work full-time in a school with low-income children or as a special education teacher. Teachers can also become eligible by teaching a subject that has a shortage of teachers in their state.

Private school teachers and those who have two part-time teaching jobs also qualify. Preschool and kindergarten teachers may only be eligible if their state considers those grades to be part of elementary education.

Unlike PSLF or the Teacher Loan Forgiveness program, teachers can earn partial loan forgiveness. They’ll get 100% forgiveness after five years of service.

Here’s how much will be forgiven each year:

  • 15% forgiven after one year of work
  • 15% forgiven after two years of work
  • 20% forgiven after three years of work
  • 20% forgiven after four years of work
  • 30% forgiven after five years of work

State Forgiveness Programs

Your state may have its own teacher forgiveness program. Go here to see what options are available. You can also try Googling your state and “teacher forgiveness program” and see what comes up. You may have to teach in an underserved area or teach a specific subject to qualify.

Options for Private Student Loans

Teachers with private loans rarely have access to loan forgiveness. Here are some options available to them:

Refinance private loans

If you want to save money on private loans, your best option is to refinance to a lower interest rate.

Private lenders often require a credit score of 650 or higher to qualify for a refinance. Some lenders may also have an income requirement, but this depends on the specific lender. For example, LendKey accepts borrowers with low salaries.

When you refinance private loans, make sure you understand the term you’re signing up for. For example, if you have five years left on your private loans and refinance to a 10-year term, you may end up paying more interest over the life of the loan because the term is doubled.

If you can afford it, keep making the same payments as you were before. Assuming you haven’t significantly changed your budget or lost your source of income, this should be doable. Keeping the same payment rate will let you repay the loan faster and save on interest.

Take out a home equity loan

If you’re a homeowner, you can withdraw extra equity from your house and use it to repay your student loans. Generally, you’ll need to have 80% or more equity in the home to qualify.

Home equity loans may have lower interest rates and longer terms than private student loans. It may also be easier to qualify for a home equity loan because the bank has collateral behind it.

The downside to this strategy is that if you default on a home equity loan, the bank may repossess your house. Comparatively, refinancing your private student loans has much lower stakes.

The post Options for Teacher Student Loan Forgiveness appeared first on MintLife Blog.

Source: mint.intuit.com

Saving And Spending, Student Finances

How to Plan and Save on Holiday Travel

Some of my fondest college memories aren’t from going to homecoming games, attending my first college party or walking around campus when no one else was going to class. Some of my favorite memories are going home for winter break and seeing all my high school friends. Seeing old friends was always so fun, especially since we had all matured during the previous semester.  

But getting home was another story. I went to college in Bloomington, Ind., a small college town where the university was the main attraction. That meant getting a flight back to my hometown of Memphis, Tenn. was always a struggle. I hated having to coordinate buses and flights while in the middle of finals. 

Here’s what I learned about booking flights home, so you don’t have to struggle like I did.  

Plan Ahead 

The first step to saving on holiday travel is planning ahead. If you wait until the last minute to buy plane tickets, you’ll probably pay more. You may even be completely out of luck and not find any flights that work for you. 

You can sign up for travel alerts through Hipmunk.com, which aggregates flights from most major airlines. You can also look at Google flight alerts or sign up for emails for your favorite airline.  

Learn about what airlines fly out of your hometown’s airport and what alternative routes there are. For example, if you’re struggling to find cheap flights coming out of Louisville, look at Cincinnati’s airport. You might have to get creative and look at airports you never consider. 

According to the travel website Skyscanner, the best month to buy plane tickets for Christmas is in October. Yes, it might seem crazy to book tickets for winter break when the leaves are barely falling off the trees, but you could save lots of money. 

Carpool with Other Students 

If you’re at a big university, you might find someone who’s also traveling to your destination for the holidays. If you carpool with them, you’ll save money on transportation while also dividing the driving time. 

I did this a lot in college because I didn’t have a car, but I only needed to travel a couple hours for Thanksgiving break. It was easy finding someone who was also going that way.  

If you’re not traveling to a popular city, you should put out feelers ASAP. Make a shareable post on Facebook, put a physical notice in your dorm’s common area or ask your college advisor if there are any official student carshare groups. 

Look at Buses 

Even though the US isn’t known for its public transportation system, buses can be a decent way to save money on travel if you’re going somewhere close. For example, you can find MegaBus tickets as little as $5 if you book way in advance. Some of these buses include WiFi and let you pick your seat beforehand. 

Buses almost always take longer than driving, but are a good option if you’re on a budget and have time to kill. If you’re lucky, you can find a fellow student who’s also traveling by bus and book your tickets together.  

Compare Alternative Dates 

If you’re flying home for winter break, you probably have some leeway on when you arrive and when you need to leave. Being flexible on travel dates can save you a lot of money, especially during the holidays. 

When you look at flights, you can often look at dates with one to three days of flexibility. Flights that leave or arrive on Tuesdays and Wednesdays are often less expensive than weekends. You should also use an incognito browser when you book tickets. 

If you find an especially good deal that coincides with class, ask your professor if you can get an excused absence. Some may be ok with you taking a final early or if you miss the first day of classes for the new semester. 

Again, ask your professors about this ahead of time. They may be more lenient if you’re asking in early November instead of the week before finals. 

Use Credit Card Points 

If you or your parents have a travel rewards credit card, see if they have enough points to book a flight. This works best if you book early, because flights often increase in price as the dates get closer. 

Travel rewards programs all work differently so it’s good to compare offers before you book a flight. Your parents can book your flights using their account, or they can transfer points to your personal account. This doesn’t work for every credit card, so call and ask if there’s a way to do it for free. It may be easier to do if you’re an authorized user on the account. 

Read the Fine Print 

Nowadays airlines are trying to cut corners everywhere, by trimming seats and charging more for basic amenities. When you buy your flight, read through the ticket agreement to understand what’s included and what’s extra. In some cases, a carry-on bag costs extra just like a checked bag. But a checked bag may be cheaper than a carry-on. 

If snacks aren’t provided, bring your own beforehand. Also, try not to pack your bags completely full. If you’re like me, you’ll have Christmas presents and new clothes to take back with you. And who wants to pay a $30 carry-on fee?  

Understand What Your University Provides 

If you’re lucky, your college may have some free transportation options. For example, my university was in Bloomington, Ind., an hour away from Indianapolis. There was a free shuttle to the Indianapolis airport that left every two hours. 

There’s also a student-only bus that goes from Indy to Chicago and Chicago-area suburbs. This is only available during the holidays and is very affordable.  

The key to saving on holiday travel is to plan ahead, ask other people and do lots of research. You may discover someone in your dorm who’s driving through your city on their home or someone who also takes the bus home.  

 

The post How to Plan and Save on Holiday Travel appeared first on MintLife Blog.

Source: mint.intuit.com

Home Ownership, Student Finances

Why You Need to Open a UGMA/UTMA Account for Your Kids

From the Mint team: As you know, Mint is a free product you can use to help stay on top of your finances. So, how do we make money? We get paid by the advertisers on our site. This compensation may affect how and where products appear on the site (and in what order). Mint.com does not include all products or all available offers. Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

 

Saving and investing for college expenses may seem overwhelming, but setting aside even small amounts can give your child a head start. While many people are aware of tax-efficient investing accounts like 529 plans, you may not know about UGMA/UTMA accounts – another way to save for educational and other expenses.

In this article, we’ll take a look at UGMA and UTMA custodial accounts, what they are, and how to determine the best way to save for your kids’ future, while getting tax advantages.

What are UGMA and UTMA accounts?

UGMA stands for the Uniform Gifts to Minors Act and UTMA stands for Uniform Transfers to Minors Act. Account-holders are “custodians,” and may transfer money into the account to benefit the minor, but the money is managed by the custodian. Typically the money is released to the minor at the age of majority (usually 21 but sometimes 18 or other ages).

How do UGMA and UTMA accounts differ from 529 plans?

529 plans differ from UGMA/UTMA account in a few key areas:

  • 529 plans can only be used for educational expenses, while UGMA/UTMA accounts can be used for anything that benefits the child. .
  • 529 plans are owned and controlled by the person who created the account – with UTMA/UGMA accounts, the funds are transferred to the beneficiary at the age of majority.
  • Unlike 529 plans, custodial accounts are considered the property of the child, which means that it counts for a higher percentage in financial aid calculations.

The two types of plans share some similarities:

  • Both types of accounts are considered custodial accounts that can be used for the benefit of a minor.
  • Anyone can contribute to either type of account — there are no restrictions based on one’s personal income

If you have a medium to long-term horizon, either a UGMA/UTMA account or a 529 account is usually better than just putting your money in a savings account at a low-interest rate. And don’t forget that it is possible to have both a 529 plan AND a UGMA/UTMA account for the same child.

Why You Need to Open a UGMA/UTMA Account for Your Kids

Unlike with a 529 plan, the funds in a custodial account do not have to be used solely for higher-education expenses. The custodian can withdraw money in a UGMA/UTMA custodial account for any expense that benefits the child, like technology, transportation, housing, or any other expense for the child.

The biggest advantage of UGMA/UTMA custodial accounts is their flexibility. Because they can be used for a wide array of expenses, you can use the money in the account even if your child chooses not to go to college. While earnings do not grow completely tax-free like in a 529 plan, earnings in a UGMA/UTMA account are tax-advantaged, but in a different way.

Depending on how you file your tax return, a guardian can choose to include their child’s unearned income with their own tax return. Unearned income is money that doesn’t come from employment, like from interest or investments. In 2020, the first $1,100 of a child’s unearned income can be claimed on the guardians’ tax return tax-free, and the next $1,100 is taxed at the child’s tax rate, which is likely much lower than their parent’s.

Things to watch out for with UGMA or UTMA accounts

If you’re looking to save money or transfer assets to your kids for a variety of expenses beyond education, a UGMA/UTMA custodial account can make a lot of sense. One thing to watch out for is that a UGMA/UTMA account is tied specifically to one named beneficiary. Unlike a 529 plan, where you can transfer the money in an account to a sibling or other beneficiary, with a UGMA/UTMA account, any unused funds must be used or distributed by the time the child reaches their age of majority or their state’s maximum age for custodial accounts.

Apps like Acorns are making it easy to start a UTMA/UGMA account with their new product, Acorns Early. You can start in under a few minutes and set Recurring Investments starting at $5 a day, week, or month. Fun fact: If you invest $5 a day from birth, considering a 7% average annual market return, you could have more than $70,000 by the time the child turns 18. To learn more, visit Acorns.com/Early.

The post Why You Need to Open a UGMA/UTMA Account for Your Kids appeared first on MintLife Blog.

Source: mint.intuit.com

Student Finances

A September State of Mind

Hi friends. So sorry to go completely MIA on you. Between attempting online school with a five-year-old, much of California burning to the ground, and the general state total chaos in which we find ourselves, getting to the computer for any length of time has been a bit of challenge, to put it mildly. And then I blinked and summer is officially over.

But I had to finally get on here as I have big news for you!

They say you shouldn’t make major life decisions during times of extreme stress, right? Well, we decided to throw all caution to the wind and instead have purchased a coastal cottage in Washington State! Apparently a global pandemic, homeschooling a kindergartner and the most consequential presidential election of our lifetime wasn’t enough to keep me busy.

coastal cottage mood board on Apartment 34

In all seriousness, if the past seven months of Covid have taught us anything, it’s the importance of friends and family and so we decided to create a gathering place that can bring together those we love most for years to come. Nestled within the myriad of inlets and islands that dot the Puget Sound north of Seattle, the cottage enjoys sweeping views of the Olympic mountains and Hood Canal. I consider it my official respite from the impending doom. Sadly it looks nothing like the inspiration images I’ve collected here.

Instead, it is going to take a LOT of work to get our little coastal cottage visitor ready – and in a very short period of time. Over the coming weeks, I plan to take you along on the entire design journey. I will be sharing everything with you – from the cottage’s current state, to all of my design inspiration and through the remodel process. If all goes according to plan, I’ll share a major before and after reveal in time to spend the holiday season with our family rather than more than 800 miles away.

coastal cottage mood board on Apartment 34

Trust me, we’re going to have plenty to discuss, as I have to pick an entire household’s worth of things – from paint colors and kitchen cabinets down to dishware, bedding and everything in between. No design decision will be left unturned. It’s both exhilarating and incredibly daunting. These mood boards are just part my first ideation session for my dream vibe.

I’m hopeful sharing this process with you will offer you some fresh design ideas and positive inspiration as we all hunker down to weather what will undoubtedly be a stormy fall – be it literally or just politically. It’s been a rather dark year and I feel like this might be a way to share a little bit of light. I know I am very happy for the creative distraction. I hope you are too.

I can’t wait to share more very soon!

The post A September State of Mind appeared first on Apartment34.

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Source: apartment34.com

Student Finances

A Cozy New Rug Collection

Hello friends! Praise be, the election is over and I just marked my birthday over the weekend – my official holiday season milestone. Whenever the calendar passes November 8, I feel like I can finally turn 100% of my attention to all things holiday. Obviously, the holidays are going to look and feel very different than years past. Perhaps instead of the holiday season, we should start referring to the next few months as the hunker down season. Because that’s what holidays in the time of Covid are going to require of us. But I’m not entirely mad about the idea of holing up at home. I’ll take a very valid excuse to look for ways to make my home as cozy, comforting, and beautiful as possible.

Enter the new rug collection from Beni Rugs, designed by my style soul twin, Colin King.

A Cozy New Rug Collection on Apartment 34A Cozy New Rug Collection on Apartment 34

Called the Shape of Color, this new rug collection offers eleven Moroccan style rugs. Each rug features shocks of color inspired by Tangier and Marrakech. The hues are deeply saturated in simple geometric shapes or big bold stripes.

A Cozy New Rug Collection on Apartment 34A Cozy New Rug Collection on Apartment 34

While I typically eschew color, rugs are a wonderful spot to inject something fresh into a room. I used a bold colored rug in my own living room. The particularly nice thing about a rug – it’s an easy way to reenergize a space without really having to change anything else.

A Cozy New Rug Collection on Apartment 34A Cozy New Rug Collection on Apartment 34 A Cozy New Rug Collection on Apartment 34 A Cozy New Rug Collection on Apartment 34

There are a few secrets to picking out a rug. First, you want to think about size. A common mistake is getting a rug that is too small. You want all (or nearly all) your furniture in a space to sit on your rug. That helps a room feel anchored and like everything is working together. A too-small rug will actually make a small space feel even smaller!

Next, you want to think about foot traffic. If you’re looking to put a rug in a high foot traffic area, you’ll want to ensure any rug you select will withstand an onslaught of dirt and use.

Finally, when adding a colorful rug to your space you don’t need to “match your decor. You just want to keep everything in the same design family. Do you decorate with mostly warm colors or cooler tones? That will help you pick your colors.



 

If you’re looking to upgrade the coziness of your home before the holidays hit, I definitely think one of these rugs would be a great way to do it. I’m already debating which one I might add to our house. I do have a home office refresh in the works! If I pick out one of these rugs – I’ll be sure to share.

How are you planning on sprucing up your spaces for the holidays?

images c/o beni rugs

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Source: apartment34.com