All posts by Take Charge America Team

Do You Qualify for Public Service Loan Forgiveness?

If you’re like most recent college graduates, you’re probably making payments on student loan debt. While resources abound for borrowers who need help repaying their student loans, there’s a special program designed just for people who work in public interest careers. It’s a way to reward people working toward the common good – in jobs that are not necessarily high in income.

The Public Service Loan Forgiveness (PSLF) program, created in 2007, forgives any balances on federal student loans after 120 qualifying payments, or approximately 10 years. While borrowers with small balances will likely pay off their loans in fewer than 10 years, students who took out large loans may benefit from this program.

Does my job qualify as public service?

To be eligible for PSLF, you must work full time for public service organizations including the government, military, public schools, public health or another not-for-profit organization, or you must be serving in a full-time position for the Peace Corps or AmeriCorps. If you’re unsure whether your job qualifies, ask your boss or HR manager. The Consumer Financial Protection Bureau also created this toolkit to help you determine your eligibility for PSLF.

What are the criteria for Public Service Loan Forgiveness?

  • PSLF requires 120 separate monthly loan payments after Oct. 1, 2007. Payments made before this date do not count toward PSLF.
  • You must make those payments under a qualifying repayment plan while working full-time at a public service organization.
  • Each payment must be made for the full scheduled installment amount, and must be received no more than 15 days after the payment due date. It is not required that the 120 payments are consecutive.
  • Finally, you must be working for a qualified public service organization when you submit your PSLF application and at the time your remaining loan balance is forgiven.

Which loans are eligible?

In a nutshell, PSLF applies to loans in good standing under the William D. Ford Federal Direct Loan Program, including:

  • Direct Subsidized Loans
  • Direct Unsubsidized Loans
  • Direct PLUS Loans—for parents and graduate or professional students
  • Direct Consolidation Loans

If you have a Federal Family Education Loan (FFEL) or Federal Perkins Loan, you may consolidate your loans into a Direct Consolidation Loan to be eligible for PSLF.

Which loan repayment plan is right for me?

Income-driven repayment plans are the best bet for borrowers seeking PSLF. The Income-Based Repayment (IBR) and Pay As You Earn (PAYE) programs lower your monthly payment based on your discretionary income. This keeps your payments affordable and helps you meet your obligation to make 120 payments.

How do I monitor my progress toward Public Service Loan Forgiveness?

The Department of Education created the Employment Certification for Public Service Loan Forgiveness form to make it easy for you to track your progress toward your 120 qualifying payments. Simply follow the instructions for completing and submitting the form.

It is recommended that you submit the form annually and any time you switch jobs.

If you need assistance evaluating PSLF, you can contact a student loan counselor at Take Charge America at 877.784.2008.

Use our Student Loan Calculator to estimate how long it will take to pay off your student loans using your current repayment plan.

 

Tips for Borrowing Student Loans Wisely

College tuition is rising nationwide – and student loan debt is following at record rates. If you’re considering a student loan, ask yourself a few hard questions first. An eyes-wide-open approach, combined with a few smart choices and simple sacrifices, will help you keep debt to a minimum and assure your personal financial wellbeing after college.

What is the true cost of my education?

The cost of college is more than just tuition and books. To determine the full expense of your education – the Cost of Attendance (COA) – you will need to consider room and board, transportation, equipment and supplies, as well as tuition, fees and books. Online resources like College Scorecard can help you assess and compare the total COA of the universities you’re considering.

How much should I borrow?

It’s possible you will qualify for a much larger loan than you need – but you’re not obligated to accept the full amount. In fact, it’s better to scrimp, save and borrow only what you must. If you need extra spending money, find a part-time job or save up during the summer months, and avoid the trap of using loan dollars for nonessential expenses. If this still isn’t cutting it, consider other ways to save money, like living at home, renting instead of purchasing new books, or putting these tips to use.

How long will it take to repay my loans?

This largely depends on your future salary and your ability to keep loans to a minimum. While a college degree does impact your earning potential, it’s not a guarantee of a high-paying job.

First, take a close look at starting salaries in your chosen profession. You can search the federal Bureau of Labor Statistics to compare earnings for various jobs or visit Salary.com and Glassdoor.com for insights on average pay. A student pursuing a career with a starting salary of $30,000 will need to be much more pragmatic than someone whose first job will pay $75,000.

Once you understand your earning potential after graduation, use an online calculator to get a sense of your future monthly loan payments, how long it will take to pay off your debt, and the total loan cost with interest. Given your anticipated salary, is this loan repayment manageable? What can you do to bring down your debt, or even begin making interest payments while still in school?

If you borrow wisely, are realistic about what you can afford, and make practical spending decisions while in college, you can begin life after college with a clean slate – not straddled with debt.

Student Loan Borrowers: Do You Have an FSA ID?

You may have noticed federal student aid websites now ask you to provide an FSA ID in order to apply for student aid, access information about existing student loans, complete entrance and exit counseling, apply for a loan consolidation or enroll in an income-driven repayment plan. This is a change from the longstanding four-digit, FAFSA PIN login. So what does it all mean?

Why do I need an FSA ID?

The FSA ID is a unique username and password that will identify you and allow you to log into several federal student aid websites, including:

Students will now use the FSA ID in all stages of the financial aid process, from when they first apply for financial loans to when they begin repaying their debt. The four-digit PIN, which had been used for decades, no longer works.

How do I get an FSA ID?

To create an FSA ID, visit FSAID.ed.gov. You will be prompted to create a username and password. The site will also request personal identifying information including your name, Social Security number and date of birth. As an added security measure, you will create multiple challenge questions associated with your FSA ID.

For immediate access to federal student aid websites, you will simply link your four-digit federal student aid PIN to your FSA ID. If you have forgotten your PIN, the Social Security Administration will need to verify your identity in order to create your FSA ID, a process that usually takes one-to-three days. After this waiting period, you will have full access to the federal websites.

Is my FSA ID confidential?

It’s important to keep your FSA ID confidential, even if you are working with a company that is helping you with your student loans. Your FSA ID can be used to log into federal websites and access sensitive information including a detailed history of your personal student loans. It can also be used to electronically sign documents, so it’s important not to share your FSA ID. Companies should never ask you to compromise the security of your FSA ID, even if they are trying to help.

How do I get help with my FSA ID?

If you need assistance creating an FSA ID, you can contact a student loan counselor at Take Charge America to help you navigate the online process. To get started, call 877.784.2008.

woman raking leaves as a way to save money on yard work

How to Save Money on Yard Work

A beautiful yard is an attractive feature for homeowners, yet the upkeep can be cumbersome and costly. Here’s a quick look at how you can save money on yard work while making your yard a place you want to spend time:

  • Xeriscape: In dryer climates especially, daily watering and irrigation systems can add considerably to a homeowner’s budget. Xeriscaping is a form of landscaping that requires little-to-no irrigation. Consider replacing water-intensive landscape features, such as grass lawns and flower beds, with decorative rocks, gravel and low-maintenance cacti that are not only more affordable, but much easier to maintain.     
  • Watering: If your yard does requires watering, do so with a hose. Experts say in-ground, clock-timed irrigation systems use up to 50 percent more water than they need to, even if they are programmed by a professional.                                                                                                         6522737
  • Weeding: Weeds can be a constant battle for homeowners. Rather than using expensive commercial products to combat these irritants, spray them with vinegar. It’s more affordable and better for the environment. You can also use ground covers, such as gravel or wood chips, to inhibit weed growth.
  • Artificial Grass: Artificial grass has come a long way in recent years, mimicking the texture and aesthetic of natural grass. While the initial investment can be expensive, replacing your live lawn can save big bucks (and time) long-term by eliminating watering, seeding, mowing and other maintenance.
  • Cleanup: When your yard gets overgrown, it can be tempting to call a professional to clean it up. Set aside a day once a month to trim bushes, rake leaves, weed and perform other tasks. Enlist the help of your family and celebrate with a picnic or barbeque when the chores are complete.

How to Handle Errors on your Credit Report

Reviewing your credit report at least once a year is an important part of managing your personal finances. Ensuring the information contained in the report is accurate can help you when making a large purchase, such as buying a new vehicle or applying for a mortgage.

Many employers now check prospective employees’ credit reports as well, so if you’re currently in the market for a new job, you’ll want to thoroughly review your report for any errors and inaccuracies.

Obtaining your Credit Report

You can get a free copy of your credit report at annualcreditreport.com or by calling 1-877-322-8228.

Legally you’re allowed to order one free copy of your report from each of the nationwide consumer reporting companies (Experian, Equifax and Transunion) every 12 months.

You may order your reports from all three agencies at the same time, or order one from each company at different times throughout the year.

If you order your credit report directly from the agencies, rather than through annualcreditreport.com, there will be a charge each time.

Information to Review

Be sure the following information is current and correct:

Basic Information

  • Name (including middle initial, JR/SR, maiden)
  • Social Security Number
  • Current and Previous Addresses
  • Phone Number(s)
  • Date of Birth
  • Marital Status
  • Employment Information

Credit History

  • Verify all accounts listed are accurate and belong to you
  • Double check account balances
  • Make sure accounts you closed voluntarily are correctly labeled as “closed by consumer”
  • Confirm accuracy of negative entries
  • Ensure negative entries aren’t duplicated
  • Verify zero balances for settled accounts and bankruptcy discharges
  • Be sure no negative information older than seven years old is listed (except as permitted by law)

I Found an Error. Now What?

If you find inaccuracies or need to dispute an entry, each credit reporting agency has a link on their website to initiate disputes.

You may also lodge disputes by mail, if you prefer. Here is an example of a dispute letter.

Creditors have up to 45 days to respond to disputes. The credit reporting agency will notify you of the outcome. If the dispute is successful, check your credit report(s) again at 30 & 60 days to ensure the changes are reflected accurately.

What if it’s Identity Theft?

If you’re concerned the errors on your credit report are the result of identity theft, place a 90-day fraud alert on the credit report with each credit reporting agency, then follow these detailed identity theft recovery steps listed on the Federal Trade Commission’s website.

After you have completed the steps, file a police report about the identity theft, and get a copy of the police report or the report number.

 

Organizing Your Finances in Eight Easy Steps

If you’re like most people, the prospect of organizing your finances is daunting – to say the least. When faced with stacks of account statements, credit card due dates and household bills, it may seem easier to shove it all in a file and close the cabinet drawer. But ignoring your finances and wishing the bills away is never a good formula for financial peace of mind.

People who are financially stable rarely get there by chance. Rather, it’s the result of planning, persistence and discipline. Borrow a page from their playbook with these simple steps to get your finances in order.

  1. Set a goal. Before beginning the task of tackling your finances, set a goal to guide your efforts. Whether paying off credit card debt, saving up for your dream vacation or buying a new car, put your goal on paper to help you stay on track.
  1. Track your spending. To really get a handle on your finances, you need to figure out how you’re spending your monthly income. Track your expenditures using a spreadsheet, smartphone app, or even pen and paper. In a matter of weeks, you’ll have a good snapshot of your expenses – and you may realize you can meet your financial goals more quickly with just a few tweaks.
  1. Build a budget (and stick to it!). This is the broken record of all financial tips – but that’s because it works! Use your computer, a notebook, or choose from dozens of budgeting templates online to determine how you will divvy up your monthly income to pay your expenses. Learn more about building a budget.
  1. Keep unpaid bills in one spot. Many people are late on payments simply because they misplace or forget to pay their bills. This can wreak havoc on your credit score – not to mention your peace of mind. Place all paper bills in one central file until they’re paid, and create an email folder for any electronic invoices you receive.
  1. Pick a day to pay your bills. On one designated day each week, review your paper file and email folder, and pay the bills, either by mail, phone, online, or through your bank’s automatic bill pay.
  1. Create a filing system. Create a separate file for each credit card, insurance policy, bank account, auto loan, etc. It may make sense to designate one day a week to do your filing and keep it from piling up. If you prefer to keep soft copies of your statements, sign up for electronic statements where possible, and scan paper statements to save in your computer-based filing system.
  1. Consider a shredder. Don’t let financial documents stack up. For statements and bills that don’t need to be filed, invest in a shredder and shred them right away. You should also consider shredding credit card offers, as the point here is to use your money wisely – and that doesn’t include accruing new debt.
  1. Pay yourself, too. No budget is complete without a line item for savings. Whether establishing an emergency fund, paying into a retirement account or saving up for a big purchase, you’ll enjoy watching the dollars add up with a payment to yourself each month.

Protecting Seniors from Identity Theft

Identify theft is an unfortunate reality of our times, and seniors can be especially vulnerable to this life-altering crime. If you’re a senior yourself or are helping care for an elderly friend or family member, there are a number of things you can do to protect personal information from falling into the hands of the wrong people.

Minimize Mail – Credit card and insurance offers pre-printed with the recipient’s information are a gold mine for identity thieves. Eliminate that possibility all together by opting out of receiving these kinds of offers through the mail. Call 1-888-567-8688 or visit optoutprescreen.com to keep those offers from coming.

Avoid Telemarketers – In addition to being annoying, calls from telemarketers (or outright scammers) can put seniors’ personal information at risk. Never volunteer information such as Social Security numbers or bank account details over the phone. If someone calls claiming to be from a bank or credit card company and asks for account information, hang up and do some research to verify the call is legitimate. Avoid telemarketing calls by registering for the National Do Not Call list at 1-888-382-1222 or visiting donotcall.gov.

Don’t Carry Important Documents – Seniors should not carry important documents such as a Social Security or Medicare card. Make a copy of the Medicare card and use a thick black marker to cross out all but the last four digits of the Social Security number. Keep the original cards stored in a secure place.

Shred Sensitive Documents – Use a cross-cut shredder to shred any documents containing personal information including: name and address, Social Security number, account and pin numbers and banking information. That includes things like unused or canceled checks, receipts and copies of credit reports. Take a look at this guide that explains how long to keep certain documents.

Be Extra Careful Online – Take extra care when shopping or banking online. Use only a secure wi-fi signal and avoid public computers or wi-fi hotspots for these purposes. Ensure the computer has active and up-to-date virus protection installed. Also learn to spot “phishing” emails that attempt to solicit personal information. Remember, a bank, credit union, credit card company or any other legitimate financial institution will never ask you to share personal information, account numbers or a Social Security number via email.

Keep an Eye on Credit – Remember to check your credit report annually and look for anything that appears out of line. Visit annualcreditreport.com to order one free credit report annually from each of the three credit bureaus. If there’s a concern that personal information has been compromised, place a 90-day fraud alert on the credit report with each credit bureau:

  • Experian: 1-888-397-3742
  • TransUnion: 1-800-680-7289
  • Equifax: 1-800-525-6285

Then follow these detailed identity theft recovery steps listed on the Federal Trade Commission’s website.

Credit Card Promotional Offers – Understanding the Fine Print

Credit card mailers and banner ads offer a dizzying array of perks, from low introductory interest rates and free balance transfers to cash-back offers and travel rewards. But buried beneath the headlines is the ugly fine print, where you’ll learn the real story behind those promotional offers.

Of course, not all credit cards are bad, but it’s important to understand the terms and conditions of perks that may seem too good to be true. Start here for a quick tutorial on understanding the fine print on credit card promotions:

Low introductory interest rate: A low or even zero introductory rate is a common promotional offer that attracts many consumers, but the key word here is “introductory.” Generally, this low rate is good for only a few months before it jumps to a much higher rate, though some cards’ introductory rates are good for 12 months or more. Read the fine print to find out how long the promotional rate will last.

Balance transfer: This one seems like a no-brainer. Transfer balances from high-rate cards to a low or zero-interest card and immediately save money in interest. However, the fine print will reveal that balance transfers incur transaction fees, often three percent of the total dollar amount transferred. Do the math before transferring balances to ensure your savings are higher than the fees. It’s also important to learn when the low balance transfer rate will turn into a much higher regular rate.

Cash advance: Perhaps the most enticing offer is the credit card mailer enclosed with preprinted checks, especially if you’re short on cash and need money right away. But just like balance transfers, the cash advance also carries transaction fees and an introductory rate that will soon expire.

Rewards: Rewards-based cards are more popular than ever, with people using credit to gas up, buy groceries or book travel with the promise of earning cash back. It seems simple and straightforward, but the fine print exposes rather limited rewards. For example, some cards promise five percent cash back when you use your card in specific categories – but only on your first $300 in purchases. In other words, you max out at only $15. Some credit card rewards programs are better than others, but read up before you begin using a rewards card.

Penalty rates: That unbelievably low introductory, balance transfer or cash advance rate will skyrocket the first time you’re late on a payment. You’ll also be slapped with a late fee, usually to the tune of $25. Read the fine print to understand what will happen if you’re late paying your credit card bill. Better yet, make payments on time, with the goal of paying off your balances altogether.

Variable rates: Most mortgage rates are fixed; most credit card rates are not. Read your credit card agreement to learn whether or not your rate is “variable,” meaning it will increase without notice if the prime rate goes up. Even if your card is advertised as fixed rate, the fine print usually indicates that the rate is fixed only for 12 months, and then is subject to increase as long as your credit card company provides 45 days’ notice.

Reverse Mortgage 101: Debunking Common Myths

With so many scams targeted at the elderly, many people wonder whether reverse mortgages are a legitimate option for generating cash or simply another scheme that exploits seniors.

Simply said, a reverse mortgage or Home Equity Conversion Mortgage (HECM) enables homeowners 62 years and older to convert part of their home equity into tax-free cash. It may prove a good solution for seniors whose savings accounts are dwindling or who simply need a little extra income each month.

If you or someone you love is considering this option, read on for Take Charge America’s top six reverse mortgage myths:

  1. Myth: Reverse mortgages are exactly the same as home equity loans. The only similarity between a reverse mortgage and home equity loan is that both use the home’s equity as collateral. With a traditional home equity loan, borrowers make regular monthly payments toward the principal and interest. With a reverse mortgage, the loan isn’t due until you sell the home, live away from the home for 12 consecutive months, fail to pay property taxes or insurance, or pass away.
  2. Myth: Your heirs will not inherit your home. Your estate will inherit your home, but there will be a lien on the title, which will include the financial proceeds from the reverse mortgage plus interest.
  3. Myth: You may be forced out of your home. Actually, this loan was designed to help seniors continue living in their own homes for the rest of their lives. In fact, you will never be evicted or foreclosed upon unless you fail to pay property taxes and insurance or let your home fall into disrepair.
  4. Myth: You can lose Medicare and Social Security. Not true. Reverse mortgages have no impact on Medicare and Social Security, though needs-based programs like Medicaid may be affected. To keep Medicaid benefits, you will need to manage your monthly withdrawal to ensure your income does not exceed Medicaid limits.
  5. Myth: Reverse mortgages are costly. Yes and no. With a reverse mortgage and any other home loan, you are required to pay origination fees and closing costs. Depending on the type of loan you select, you may also be required to pay upfront mortgage insurance. That said, your heirs will never have to repay more than the home is worth, even if your loan balance is higher than the appraised value.
  6. Myth: A reverse mortgage is a last-ditch option. Actually, reverse mortgages are best used as part of a comprehensive financial plan – not a last resort for seniors who can’t make ends meet. Under the right circumstances, this type of loan will supplement your income to allow you to live more comfortably in your golden years.

Before obtaining a reverse mortgage, the U.S. Department of Housing and Urban Development requires seniors to undergo reverse mortgage counseling from an approved third-party organization like Take Charge America. Certified HECM counselors guide seniors through the process, loan terms, financial and tax implications, and alternatives. To learn more, call Take Charge America at 1-866-987-2008.

How Do I Deal with Debt Collector Harassment?

Dealing with calls from a debt collector can be unpleasant at best; stressful and dehumanizing at worst. Most debt collection agents are paid on commission and receive minimal training, which can lead them to behave aggressively in the pursuit of payment. They are forbidden by law to use threatening language or profanity. (That doesn’t mean they won’t, however).

Fortunately, the Federal Trade Commission has put in place a number of measures designed to protect consumers from harassment by debt collectors. For example, debt collectors are not supposed to call before 8 am or after 9 pm, and they are not allowed to call you at work if you tell them not to – either verbally or in writing.

Here are several additional things to remember to help you deal with debt collector harassment.

Don’t Engage – If the phone rings and it’s a debt collector, keep the conversation as short as possible. Ask for them to send a letter outlining the amount of the debt and the original creditor. Do not volunteer any personal or banking information including social security, credit card or bank account numbers.

Ask for ID – Debt collectors are not allowed to act anonymously. When asked, they must identify themselves to you with their name and the name of their collection agency. Additionally, they are not allowed to suggest or falsely claim that they represent or have any connection to government agencies.

Verify the Debt – Request written notice of the debt, which should include the amount owed, the name of the original creditor and information on how to dispute the debt if you don’t believe it is valid. By law, collectors must provide this within five days of your request. If it appears the debt is a result of identity theft, report it to the Federal Trade Commission by calling 877-ID-THEFT (438-4338).

Verify the Agency – If you determine the debt is yours and you agree to pay it, make sure the collection agency is a valid one. Do your research online and ensure you are sending payment or giving your payment information to a reputable collection agency. Keep an eye on your credit report and bank accounts to be sure your payment is being applied correctly and they are debiting only the amount you’ve authorized.

Ask for Help – If you’re dealing with multiple collectors or feel you’re unable to repay the debts you owe, it’s probably time to ask for help. Credit counseling, a debt management plan or bankruptcy counseling – all available from Take Charge America — can help you get back on track financially.