Student loan services screwing 30 percent more troops and counting

When will the loan servicers stop the nonsense? Why isn’t the Department of Education holding their feet to the fire?

Consider this.  The Department of Justice (Justice, not Education), documented that Sallie Mae has been overcharging interest to active duty members of the military since 2005, in violation of the servicemembers Civil Relief Act (SCRA). According to the Federal Deposit Insurance Corporation (FDIC), Sallie Mae also illegally maximized borrower’s late fees and misrepresented how borrowers could avoid late fees. Yikes. The Department of Justice estimated that 60,000 servicemembers were harmed by the illegal activity of Navient (AKA Sallie Mae) and then earlier this year, the Department of Justice announced that the number of military borrowers receiving compensation under a settlement had increased by 30%, to nearly 78,000 borrowers. The Consumer Financial Protection Bureau (CFPB) recently documented ongoing incompetent and illegal loan servicing practices causing unique hardships for military families.  The CFPB noted that student loan servicers “still do not appear to understand the elements of the [SCRA]”.

Where has the Department of Education been during all this? First, they renewed Navient’s more than $100 million contract. Ack. Then, they took the matter under review. For a year. The results of ED’s review? ED reported that “the four servicers … complied in the vast majority of cases [with the law].”

Senator Warren called bullsh*t.  Because that’s the way she rolls.  Warren directed her staff to conduct a detailed analysis of the Department of Education’s review. Oh, snap! According to Warren’s review, the Department of Education’s analysis was “deeply flawed,” “failed to provide a full assessment of whether the student loan servicers were complying with SCRA,” and “failed to examine significant problems with servicemembers’ access to SCRA rate caps,” concluding,”[t]hese problems indicate that ED has failed to effectively assess, act on, or report on potential problems with administration of the SCRA program by student loan servicers.”

Read recommendations for change from the fantastic Deanne Loonin of the National Consumer Law Center –

Read recommendations for change from the fantastic Deanne Loonin of the National Consumer Law Center here:Senators Find Major Holes in the Department of Education’s Servicer Investigation. – See more at: http://askheatherjarvis.com/blog/student-loan-servicers-screwing-30-percent-more-troops-and-counting#sthash.16VYI1lH.dpuf

Making Student Loan Servicing Work for Borrowers

The Consumer Financial Protection Bureau (CFPB) asked for comments on student loan servicing a few months ago.  Thousands of borrowers and their advocates responded before yesterday’s deadline, highlighting again and again that the current system does not work well for borrowers and is not created to ensure that borrowers have enforceable rights to quality service and accessible relief.

We filed extensive comments with numerous examples of breakdowns in the current servicing system.  The second part of the comments focus on servicing of home mortgages.  We emphasized that servicing rules and protocols are more developed for mortgages than for student loans. Unfortunately, enforcement of the rules and protocols in mortgage servicing has been largely missing. This failure of enforcement should signal an area of concern for anyone developing a system for oversight of student loan servicing.

We also filed separate comments with the National Association of Consumer Bankruptcy Attorneys (NACBA) focusing on servicing problems faced by borrowers filing for bankruptcy.

We urge the Bureau, Department of Education and other agencies to carefully review these comments and recognize the harm caused by inferior servicing.   Student loan servicers are the borrower’s primary point of contact.  If the servicer is competent and efficient, many financially distressed borrowers will be able to avoid default.  The main problem with the current system is that student loan borrowers do not receive consistent quality service.  Combined with lax oversight and no clear way for borrowers to enforce their rights, too many borrowers never obtain options that could relieve their debt burdens and help them make fresh starts in life.

Unfortunately, the servicing system has become so confusing that an entire industry of for-profit “debt relief” companies has sprung up to supposedly provide the services that the free government servicers are failing to provide.  Borrowers run the risk not only of paying exorbitant fees to these companies, but also of losing important rights.

There is an urgent need to improve student loan servicing to help avoid default and ease the burdens of student loan debt.

How to Financially Navigate Your First Year as an International Student

This article is written by Anum Yoon. She is an international student currently working in the U.S. on her OPT. She spends all her free time running a personal finance blog for fellow millennials and international students over at Current on Currency.

Starting as a freshman at any college is always stressful, as there’s so many new experiences and responsibilities involved. If you’re an international student, it can be even more intimidating. As well as dealing with the pressures of college life, there’s the worries about living in a new country, using a second language and especially finance. The following tips will help you get to grips with your money, and make your first year as a student go smoothly.

  1. Understand Your University’s Payment Requirements

Payment options for your education will vary, depending on which college you decide to attend. These options will affect your financial planning for the year, so it’s worth finding out what’s needed from you as soon as you can. There are a few questions it’s worth asking before you start in the fall: Is payment for the fall semester required upfront in the summer? Is upfront payment required for each semester? Are monthly payments available, and are there international student fees to pay? Find out and then you can begin budgeting your tuition costs straight away.

  1. Open a U.S. Bank Account

If you have a bank account with a bank that only operates within your home country, it’s worth considering opening a bank account in the U.S. when you arrive. Otherwise, money withdrawals and transfers can become quite challenging. You’ll also notice that most citizens in the U.S. mostly use credit and debit cards to pay for things, even for small transactions. Having a U.S. bank account will make it easier for you to pay for necessities while you’re studying.

  1. Book Flights Early

International flights can quickly get expensive, especially when booked at short notice. To save money, book your flights for events such as moving in, orientation and college holidays as far in advance as you can. Your college may offer travel grants to international students, so it’s worth checking with them before you start booking your travel. If you’re planning to stay during holidays, make sure to check your accommodation regulations. Some on-campus housing closes during the holidays, so if you check first you can avoid paying out to stay elsewhere.

  1. Plan Your Getaways

There are multiple occasions during the school year that call for a getaway with friends. It’s not realistic for most international students to travel back home during every single break, so whether it’s a 3-day weekend or Thanksgiving break, it’s great to plan for these breaks ahead. Planning early will help you open up travel opportunities that are a lot cheaper and better organized. If you are on a tight budget, you can always see if any of your friends will be okay with inviting you over to their homes. Another fun idea that is good for low budgets are road trips. A road trip is a great excuse for you and your friends to explore your home-away-from home.

  1. Plan Your Indirect Costs

Your indirect costs are things like rent, groceries, and transportation. If you’re living on a budget, then there are lots of ways to save money. Having roommates is a good way of saving on household costs, and if you live on campus, you may be able to opt into a meal plan which will save money on food. Your college may offer all kinds of services for free or for a low fee, such as shuttle bus services and entertainment. Be sure to take advantage of them.

  1. Remember U.S.-Only Costs

There are a few financial customs that are particular to the U.S. you may not be familiar with. One example is tipping. In the U.S., gratuities aren’t added to bills in restaurants, so customers are expected to tip their wait staff 15 to 20 percent of the total to pay for their service. Not doing so can be considered rude, so it’s worth making sure what you should and shouldn’t be doing with your money while you’re studying in the U.S.

  1. Find the Best Options for Communicating With Family Back Home

While you’re away studying, you’ll want to stay in touch with your loved ones back home. Doing so can become expensive if you follow traditional routes, such as international phone calls or sending packages. If you want to call, consider using prepaid phone cards. If you’re sending packages, recycle packaging materials you’ve previously received, and research your best mailing options before you send them.

The Internet is a fantastic, and cheap, way to stay in touch. Social media sites such as Facebook allow you to chat online, and face call software such as Skype lets you make phone calls via your computer for free. Take advantage of what’s available online.

Managing your finances while living abroad can be a daunting thing to do. By following these tips, you can keep on top of both your tuition and personal costs, lifting one more worry from your mind.

How to Get Financial Aid as an International Student

Many colleges in the United States are making a big push to recruit international students to come and study. The sad truth is that this isn’t always an effort to diversify the campus. At some colleges, this is done to bring in more money. Unfortunately, international students often pay a lot more than U.S. citizens for the privilege of attending university thanks to fewer resources at their disposal.

Hope isn’t lost, however. While foreign students are at a disadvantage, financial aid is still available in different forms if you’re willing to look for it.

Merit-Based Scholarships

Tuition in the United States can be outrageously expensive at more than $50,000 a year. As shocking as that price is, discounts can be had through merit-based scholarships. According to U.S. News & World Report, 375 of ranked universities offered scholarships to international undergraduate students. The average amount of these scholarships was $18,790.

Some of the most generous scholarships came from the most prestigious universities in the country, such as Yale University – $56,630 average in aid to 349 students – and Harvard – $51,854 average in aid to 540 students.

Attending universities like those are out of reach for all but the absolute best and brightest students, whether they’re from the U.S. or not. Fortunately, all universities typically publish a list of many available scholarships, so check them closely and see if there are any you can apply for. Some of these scholarships are need-based and can be helpful depending on your background.

Outside organizations can also provide grants. The searchable database from the Foundation Center is a good place to start.

Student Loans

For U.S. citizens, federal student loans are fairly easy to obtain and often come with below-market interest rates. That support usually doesn’t extend to international students, but there are other avenues available depending on the country you come from or the program you use.

First, there is a way to get a U.S. federal loan if you’re an international student. Sallie Mae, the largest provider of federal loans, can provide you with a loan if you have a co-signer who is a U.S. citizen. This can be a trusted friend or a family member, but finding someone is often easier said than done. If you don’t pay the loan, then the co-signer who offered to help will be punished, so make sure you take that into consideration. Fill out an application on the Sallie Mae website.

Depending upon what country you come from, your own government or local bank might provide student loans to study outside the country. Check out this list from eduPASS to see what might be available.

Keep on Searching

Searching for financial aid can be overwhelming at times, but the end result will be worth your efforts. Even a tiny scholarship of few hundred dollars makes a big difference. Contact your university’s financial aid office for any opportunities. In addition to that, regularly browse the Internet to find any possible scholarships. Most students don’t even look, so you’re at an advantage if you’re always on the hunt.

4 Benefits of Student Loans When You’re an International Student

Student loans are an integral part of college, especially in a country like the U.S. where tuition rates are sky high. However, international students are at a disadvantage when it comes to obtaining loans to help pay tuition. Federal loans are off the table and can only be acquired by citizens. However, more and more private loans are becoming available to international students. This is great news, as are some important benefits from obtaining student loans. Here are the benefits of student loans when you’re an international student:

  1. They Fill the Gap That Scholarships Cannot

If you’re studying internationally, hopefully you’ve scoured all available options for scholarships. Many universities will have opportunities for you, while some are known for being extremely generous to their international students. Getting your education fully funded is still unlikely unless you’re one of the absolute top students in your class.

Student loans aren’t merit based, so anyone attending an eligible school can potentially receive what they need to pay for school regardless of their grades. However, if you’re looking to go to school in the U.S., you’ll need a co-signer who’s either a permanent resident or a citizen. Your home country might also have some financial aid for international students; do a search for those.

Regardless, having to pay back loans is a lot less fun than receiving the money outright in a scholarship. Don’t fret – this brings us to the next benefit of student loans.

  1. The Rates Are Usually Reasonable

When it comes to private loans, the interest rates will vary quite a bit depending on where you go. The good news is that interest rates in the past few years have been comparatively low compared to the past. These lower rates make an enormous impact over time and make it a lot easier to pay off since you won’t be stuck with too much interest.

On the downside, tuition prices in the U.S. are at an all-time high. The low interest rates don’t cancel out those prices, but it does help lessen the burden.

  1. You’ll Have Time to Pay It Off

Every student loan is different, but it’s common to have to start paying back loans six months after graduation. From then, loans can be paid back over the period of about 10 to 15 years, or longer if the debt is large. Having such big debts when dealing with an uncertain job market is stressful for anyone, but at least there’s time to sort things out while making the minimum payment. If you find yourself in rough financial shape, it’s possible to get forbearance for a year or two where you only need to pay interest. The extra time allows you to get your finances in order, hunt down better deals for yourself in terms of car payments, housing and utility bills. Once you get those trimmed down and figured out – you’ll be a lot better at budgeting for your debt repayments.

  1. They Build Credit

If you’re planning a future beyond graduation in the country where you’re attending university, student loans are useful. By taking out a loan and paying it back responsibly, you’ll build up your credit score. The same goes for paying your credit card and utility bills on time. Having a good credit score helps out in the next stage of your life. It’ll allow you to increase your credit card limits, receive favorable interest rates on car and home loans and even make it easier to lease an apartment – some places do credit checks on potential renters. This is a nice bonus to those big loans you took out that pretty much lasts a lifetime.

Anum Yoon is an international student currently working in the U.S. on her OPT. She spends all her free time running a personal finance blog for fellow millennials and international students over at Current on Currency.

The Complete Guide to Income-Driven Repayment Plans for Federal Student Loans

Student loan debt can feel like a huge burden, especially if your monthly payments are outrageously high. In some cases, your student loan payments may even be more than your rent.

How are you expected to manage? Luckily, there are ways to make your monthly student loan payments more reasonable. If you have federal student loans, you can look into an income-driven repayment plan (sorry, private loan borrowers).

Income-driven plans, which include the Income-Based Repayment plan, base your monthly payments on your income, making payments more affordable than a Standard 10-year plan.

But with acronyms like IBR, ICR, PAYE, and more, choosing a plan can be a little overwhelming and confusing. We’re here to break it down for you, so you can decide which option is the best for you.

1. Income-Based Repayment (IBR)

Income-Based Repayment, which is commonly referred to as IBR, caps your monthly payments based on a certain percentage of your discretionary income. This plan is a good option for borrowers who are struggling with monthly payments and need something more manageable.

Eligible loans:

  • Direct Loans (both Subsidized and Unsubsidized)
  • Direct PLUS Loans (loans made to parents are ineligible)
  • Direct Consolidation Loans
  • Federal Stafford Loans (both Subsidized and Unsubsidized)
  • FFEL PLUS Loans made to graduate or professional students (FFEL PLUS loans made to parents are ineligible)
  • FFEL Consolidation Loans qualify for Income-Based Repayment
  • Federal Perkins Loans (if consolidated)

Note that nearly all federal loans are eligible for Income-Based Repayment, with the key exception that loans provided to parents are not. However, here’s the more important part: in order to qualify for IBR, your prospective payment must be lower than what it would be on the Standard Repayment Plan, and you must demonstrate financial need based on your income (more on that later).

Payment amount: 10 – 15 percent of discretionary income, depending on the date of the first loan.

Repayment period: 20 – 25 years.

Pros: IBR lowers monthly payments. Also, loans are eligible for forgiveness if borrowers carry a balance after the repayment period is complete.

Cons: Borrowers can end up paying more in interest over time. In addition, current IRS tax regulations may consider forgiven loans taxable income, which means that borrowers could be hit with a hefty tax bill.

2. Pay As You Earn (PAYE)

Pay As You Earn is one of the newest income-driven plans to help borrowers manage their student loans. Unveiled in 2012, this plan is similar to IBR but has stricter requirements.

To qualify for PAYE, you need to demonstrate need and be a fairly recent borrower — you must be a new borrower as of Oct. 1, 2007 (meaning you didn’t have any student loans before this time) and must have received a disbursement of a Direct Loan on or after Oct. 1, 2011.

There are plans to expand the Pay As Your Earn program so more students will become eligible. The Revised Pay As You Earn plan (REPAYE) would likely include all borrowers, regardless of when they took out their loans. It includes other provisions, too. We’ll keep you posted as changes take effect.

Eligible loans:

  • Direct Loans (both Subsidized and Unsubsidized)
  • Direct PLUS Loans (loans made to parents are ineligible)
  • Direct Consolidation Loans

Eligible only if consolidated:

  • Federal Stafford Loans (both Subsidized and Unsubsidized)
  • FFEL PLUS Loans
  • FFEL Consolidation Loans qualify for Income-Based Repayment
  • Federal Perkins Loans

Just like IBR, to take advantage of PAYE, your prospective payments must be smaller than what your payments would be on a Standard Repayment Plan.

Payment amount: 10 percent of discretionary income.

Repayment period: 20 years.

Pros: Allows for payments that are an even lower percentage of discretionary income. Also, these loans are eligible for loan forgiveness after 20 years.

Cons: You must be a new borrower as of dates above, so not everyone is eligible. As with IBR, forgiven loans may be considered taxable income.

3. Income-Contingent Repayment Plan (ICR)

The Income-Contingent Repayment plan is a bit different from the other two income-driven plans as there is no income eligibility requirement.

But if you don’t qualify for those plans and still want a lower payment, the Income-Contingent Repayment plan is your best option.

Eligible loans:

  • Direct Loans (both Subsidized and Unsubsidized)
  • Direct PLUS Loans (loans made to parents ARE eligible if they are consolidated)
  • Direct Consolidation Loans

Eligible only if consolidated:

  • Federal Stafford Loans (both Subsidized and Unsubsidized)
  • FFEL PLUS Loans
  • FFEL Consolidation Loans qualify for Income-Based Repayment
  • Federal Perkins Loans

Under ICR, your monthly payment is always based on your income and family size and may even be higher than what it would be on a Standard Repayment plan.

Check out this repayment estimator to calculate your monthly payments (you must be logged in.) You’ll want to make sure that ICR is of benefit for you before choosing this plan over a Standard Repayment Plan.

Payment amount: 20 percent of your discretionary income.

Repayment period: 25 years.

Pros: It’s easier to qualify since there’s not an income eligibility requirement. You may also be eligible for loan forgiveness.

Cons: Highest percentage and payment amounts of all income-driven plans. Your payment on ICR may not be lower than what it would be on a Standard Repayment plan. Forgiven loans could be considered taxable income.

Choosing a Plan

Choosing an income-driven repayment plan that is right for you is important It can help you manage your payments. But which one is best for you? Here are some things you should consider before choosing a plan.

  • What will your estimated payments be? Find out here.
  • Will you be able to pay off your loan before the repayment period is over or will you have to have your loans forgiven? Consider the potential tax ramifications of your decision.
  • Do you qualify based on your income and family size?

Going on an income-driven repayment plan may seem like a great way to pay less on your student loans, but you may actually pay a lot more in interest over time. If you can afford it, it makes sense to go with a Standard Repayment Plan.

But, if you’re struggling with payments, an income-driven repayment plan can help relieve borrowers.

How to Apply

To apply for an income-driven plan, submit the Income-Driven Repayment Plan Request form online at StudentLoans.gov. You may also fill out a paper form, which you can get from your loan servicer.

For Income-Based Repayment and Pay As You Earn, you must demonstrate financial need to be eligible. Borrowers can submit their Adjusted Gross Income (AGI) through a federal tax return or online with the IRS Data Retrieval Tool, which syncs your tax information to your application.

If you haven’t filed a tax return or have no income to report, you can provide alternative documentation such as pay stubs and unemployment benefits.

Bottom Line

Income-driven plans can be a great way to reduce your federal student loan payments, but it’s important to look at the long-term benefits and consequences.

On the one hand, these plans can help you in the present, but in the future you may deal with taxable income on forgiven loans and may pay more in interest over time. Be clear on your goals and choose the right repayment plan for you. For more information, check out these Income-Driven Plan FAQs.

Blog Smarter: 5 WordPress Plugins to Help You Make Money From Your Blog

Why do we blog? Perhaps you feel you have things to say which the world would be interested in, or maybe you’re very passionate about a topic and your friends are sick of hearing you talk about it! I have a blog like that; it’s simply a sounding board for me to jabber on about a particular hobby of mine which none of my friends take part in.

But the main reason for blogging, I think, is to make some money out of it. Let’s face it, we all enjoy blogging and we all enjoy making money, so why not combine the two? But as we all know, it’s not that easy to make money from blogging, at least at first. So I did some research and found some plugins which could make monetising a blog just that bit easier. Please note that I haven’t used every one myself yet, so I’d welcome your feedback in the comments if they’ve worked (or not) for you!

Amazon Associate

I use this one myself and it’s invaluable if you have an Amazon affiliate account. Once the plugin is installed and set up with your access keys (found on your Amazon affiliates profile) it’s really simple to add in affiliate links to your posts by way of a simple search box on the New Post screen.

Simply highlight the text you want as the link, enter the search term relevant to the post in the side widget, select the category and hit search. It will bring up a list of products from Amazon and you just click on one of the insert buttons to put it straight into the post you’re writing.

You can also enter sidebar widgets as easily as setting up any other widget; on your widget page you’ll see several available widgets that just need to be dragged and dropped into the relevant sidebar panel. You can set up product carousels, favourites, product clouds, MP3 clips and there’s also a search widget. Each one can be customised to match your site and is linked to your affiliate ID, generating revenue each time a user clicks and purchases.

The money you earn from this plugin can be sent to a bank account or as an Amazon gift certificate. Sadly there’s no PayPal support yet but this will hopefully be implemented in the future.

Ad Rotator

This is one I’ve recently been trialling and so far it’s working well. Once installed (in the usual way) it gives you a widget which looks like the default text widget box. You put your ad codes in here and use <!–more–> to separate each block. Each time your site is refreshed the ad will change.

You can have more than one Ad Rotator block in your sidebars so you could have static ads too. The widgets can go in sidebars and footers and work with any ad size.

As there’s no CPM system with this plugin you can charge for ads in whatever method you like. I personally charge more for a static placement than a rotating one but it’s whatever works for you. The best thing about this plugin in the flexibility it offers you.

Kontera

I installed this on a site I run which doesn’t use sidebars. As Kontera places contextual ads within the text of a page, the absence of sidebars didn’t matter. You need to register for a Kontera account first but that is quick and easy, and gives you your published ID which is then entered in the plugin setup. From there it’s simply a matter of choosing the colour of the links you want and adding the generated code into all the pages you want the ads to appear on.

It can take up to 24 hours for ads to appear within your site text, so don’t do what I did at first and deactivate in frustration because it didn’t appear to have worked!

Kontera works in multiple blog platforms, so if you’re a fan of Blogger or Drupal you can also use this nifty plugin. Payments can be made via PayPal for best security.

MediaPass

If you have content on your website which you’d rather keep behind a pay wall, then this plugin would seem to be an easy answer. I say “seem” only because I haven’t used it myself.

Once you’ve registered for a MediaPass account and the plugin is installed, it’s as simple as highlighting the content that you want to put behind the pay wall and choosing the subscription option to apply.

MediaPass take 35% of the revenue the plugin generates, which sounds like a lot, but you do get a lot of support and behind-the-scenes processes for that commission. Their technicians handle all the merchant fees, database management and all the other techy stuff so the blogger can just concentrate on the actual content.

Skimlinks

If you want to earn your money through affiliate marketing, Skimlinks looks to be the tool to go for. The plugin will convert any product links and references in your posts into affiliate links, which can be from any one of over 17,000 merchants on the Skimlinks database.

The advantage of using Skimlinks is that it allows the busy blogger to free up the time otherwise spent seeking out affiliate schemes, setting up tracking codes and maintaining the accounts. Skimlinks does all this for you, and you only need the one account with them to get access to all those different merchant programs.

Skimlinks takes a 25% commission from the merchant, but because of their standing with the merchants they can often negotiate a better rate so overall, you’d probably end up getting more money than if you’d set up all the links yourself. Plus, all the time it saves you means you have more time to write great content!.

Again, I haven’t yet used this one but I am thinking of trying it; has anyone has experience with this?

I’d love to hear feedback about all of these plugins, and if there are any which work especially well for you that you feel should be included. Please let me know your opinions in the comments!

All images taken at the WordPress Plugin Directory.

Louise is a financial writer for MoneySupermarket.com and a freelance copywriter/web designer. In her spare time she runs her wrestler husband’s website and blog. You can find her on Twitter: @louisetillotson.

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