Moneymindful Personal Finance Coaching

Just a heads-up that today (4/30) is the deadline to consolidate your FFEL and/or Perkins student loans if you want to be eligible for the one-time payment adjustment and the SAVE repayment program. This deadline was extended from 12/31 - see my "IDR Waiver Account Adjustment" post about 4 posts below. If you have these loan types (check your studentaid.gov account), look for the "consolidate" button on the website. It's a pretty fast process. If you have questions, feel free to comment below. Note that if you currently have Navient as a servicer, you will be asked to choose a new one. By the sounds of the previous video I just posted, it would be good to avoid Mohela.
https://studentaid.gov/

Federal Student Aid

Excellent video for those with PSLF (Public Service Loan Forgiveness):

Dept of Ed Takes Over PSLF Processing From MOHELA | Public Service Loan Forgiveness Changes The Dept of Education is taking away PSLF processing from MOHELA. Here’s the real reason why and what it means. Subscribe to our email list https://www.stude...

Just finished compiling my business expenses for 2023 taxes - what a relief to have it done! How is everyone else coming along?

One more thing for small businesses to worry about: the "Corporate Transparency Act" now requires you to file your ownership details on the fincen website. This applies to any small business that is a corporation or an LLC, and any other small business "created by the filing of a document with a secretary of state or any similar office in the United States", whatever that means. There are exempted companies, almost entirely large companies. This begins January 2024. All the details you could want are here:

Beneficial Ownership Information Reporting | FinCEN.gov FinCEN has prepared the following Frequently Asked Questions (FAQs) in response to inquiries received relating to the Beneficial Ownership Information Reporting Rule.

A really critical deadline for student loans: the deadline is 31 DECEMBER 2023 if you need to consolidate your student loans in order to qualify for the new extended Income Driven Repayment (IDR) waiver.

The IDR Waiver is a one-time account adjustment by the Department of Education that gives federal borrowers credit toward forgiveness. Any time you've spent in repayment and many periods of forbearance or deferment can now be counted toward the 10-year Public Service Loan Forgiveness and 20- or 25-year IDR forgiveness programs. All Direct Loan program borrowers, including graduate and Parent PLUS Loan holders, will receive at least three years of credit toward forgiveness.

Most borrowers will automatically qualify for this, but some with Parent Plus loans and other commercially-held debt with the Federal Family Education Loan program (FFEL) must consolidate to qualify.

Don't wait to look into this. It is not clear whether the 12/31 deadline is to have your consolidation completed, or begun, and the process takes 6-ish weeks.

Details here:

IDR Waiver Account Adjustment: Complete Guide (2023) - Student Loan Planner The Dept. of Ed just released the IDR Waiver FAQ. Find out if you need to take action by December 31, 2023 to get years closer to forgiveness.

They're back... just in time for Halloween, here's another update on student loans from Symphony Financial. If you haven't already, sit down and list out your budget to make sure that your payments will fit, rejigger things as needed, and double-check what you need to do about your other goals.

"As federal student loan payments resume this month after a pause lasting over three years, we wanted to provide some updates. Feel free to share this information with any of your clients who may find themselves affected by the restart of these payments.

The Basics

The student loan pause, which began in March 2020, has officially concluded. Borrowers should receive their first bill at least 21 days before their payment is due. Most borrowers should anticipate their monthly payments to remain the same as before the hiatus.

An On-Ramp Period

The Biden administration has implemented a 12-month “on-ramp” period to ease the transition back into repayments. Late payments won’t be reported to credit bureaus during this time, and borrowers will be protected from collection activities like wage garnishments.

This on-ramp will last through September 2024, giving borrowers some cushioning against the repercussions of missing a payment. However, interest will continue to accrue during this period, making it advisable to resume payments as soon as possible.

Loan Servicers

Another crucial point is the potential change in loan servicers. Several entities that managed federal student loans ceased their operations during the pause.

As a result, as many as 40% of borrowers may find their loans transferred to a different company. Borrowers can verify their new servicer by visiting StudentAid.gov.

Income-Driven Repayment Plans

For those enrolled in income-driven repayment (IDR) plans or the new SAVE plan, the monthly payment amounts may differ based on changes in discretionary income.

While these plans may offer lower monthly payments, they could also extend the loan’s term and total interest paid over time. Thus, borrowers must weigh the short-term benefits against the long-term financial impact.

Beware of Scams

Finally, with the restart, we expect a surge in scams targeting borrowers. Borrowers should view any unsolicited communication promising debt relief, reduced payments, or loan forgiveness with skepticism. They should never share personal information over the phone unless they initiate the contact, and they can confirm their loan servicer by logging into StudentAid.gov."

https://mailchi.mp/b037b911ab21/newsletter-9145230?e=d0f857a582

What Student Loan Borrowers Can Expect as Payments Restart As federal student loan payments resume this month after a pause lasting over three years, we wanted to provide some updates. Feel free to share this information with any of your clients who may find themselves affected by the restart of these payments. The Basics The student loan pause, which began...

In the "good to know" category, apparently Vanguard and USAA do not always accept legal powers of attorney (POAs). According to the AARP article linked, Vanguard required their own form, called the Vanguard Agent Authorization form. USAA would accept the POA form, but would not allow the person to discuss the account unless they also had a membership. It would be nice if these companies would honour standard legal documents, but in the meantime, if you have Vanguard, get their form. (And if you don't yet have your will/trust and end-of-life forms done, then that would be where to start!)

Why Do Some Banks Refuse to Honor Power of Attorney Forms? Paperwork didn’t help caregiver get access to mom’s accounts

In case you missed it: I highly recommend Dr Michael Thomas' video on our financial stories and how they affect our behaviour. Being aware of our background stories can make all the difference. Take a watch (11 minutes):

Financial Empathy: Understanding the Story Beneath the Numbers | Michael Thomas | TEDxUGA Nearly half of Americans say that money is one of the most challenging subjects to talk about, but Michael Thomas Jr. wants to change that. As a PhD student ...

And more info on the new SAVE student loan repayment plan:

Since the Supreme Court decision, the administration has created a new repayment plan option, called the Saving on a Valuable Education (SAVE) Plan. The plan will cut monthly payments to $0 for borrowers making less than $32,800 - $67,500, depending on family size, and save all other borrowers at least $1,000 per year. Additionally, it will stop accruing interest that leaves borrowers owing more than their initial loan.

* Use the IDR (income driven repayment) application to apply for the SAVE Plan now. You can select the option for your loan servicer to place you on the lowest monthly payment plan (this will usually be SAVE).

* If you are already on an IDR plan, check to see if you are on the REPAYE Plan. Log in to StudentAid.gov, go to your My Aid page, scroll down, and view your loans. Each loan will list a repayment plan. If you see that you are enrolled in the REPAYE Plan, you’ll automatically be enrolled in the SAVE Plan.

* You can also enroll in the SAVE Plan if you’re on a different repayment plan. If you don’t have a StudentAid.gov account, create an account now.

Tons more great info here: https://nadler.house.gov/news/email/show.aspx?ID=6QBSS626JOPGSYUQOQ7OR33ELA

Representative Jerry Nadler Unfortunately, on June 30, 2023, the Supreme Court issued a disastrous decision invalidating the Biden-Harris Administration’s student debt relief plan to provide up to $20,000 in one-time relief to over 40 million student loan borrowers, according to White House estimates. The Supreme Court...

More great student loan info:

* Update your contact information with your loan servicer(s) and on StudentAid.gov, and make sure you have an online account set up on each website.

* Visit your account on your servicer’s website to see your payment amount once your bill has been sent. Log in to find your servicer.

* Enroll (or re-enroll) in autopay on your servicer's website, which will ensure you don't miss a payment. Autopay is optional, but if you choose autopay, you'll save 0.25% on your interest rate.

* If you are making your first payment, or your circumstances have changed, the best way to determine your options is to visit the Department of Education’s Preparing for Payments to Resume Page.

* If you need help with your payments, compare repayment plans with the Department of Education’s Loan Simulator.

Tons more great info here: https://nadler.house.gov/news/email/show.aspx?ID=6QBSS626JOPGSYUQOQ7OR33ELA

Representative Jerry Nadler Unfortunately, on June 30, 2023, the Supreme Court issued a disastrous decision invalidating the Biden-Harris Administration’s student debt relief plan to provide up to $20,000 in one-time relief to over 40 million student loan borrowers, according to White House estimates. The Supreme Court...

5 things to do about your student loans right now:

1. Know who your servicer is, 40% of them have changed (go to studentaid.gov)

2. Make sure all your contact info is up to date

3. Check your repayment plan. If you want to be on the new (great) SAVE plan, you need to be enrolled in REPAYE - it will automatically switch.

4. Check your bank account - make sure that it is still correct if you have auto-debits.

5. Be patient with your servicer. There is a lot going on, and hold times may be long.

With thanks to Ryan H. Law for the summary

What a great program. If you are a young adult (18 - 35) looking for some free financial education and support to make good financial moves, definitely consider this:

Financial Education for Young Adults -Changing Financial Futures Forever 3rd Decade's free program provides financial education and mentoring for young adults to build financial literacy. -Learn more today!

And one more link on the excellent new SAVE income-driven student loan repayment plan. Also see the post just below.

How the New Income-Driven Repayment Plan Works - NerdWallet Lost in the hype over student debt cancellation is a proposal that would shrink payments and mitigate risk of the ballooning balances we read about in the news.

Student loan repayments are starting again in October, and interest will start on September 1st. If you are in/have been in/would like to be in an Income-Driven Repayment (IDR) plan, start early to set that up in time. There is a new IDR plan called SAVE, and it stands to significantly help those who earn the least. Your loan servicer may also have changed.

The key thing is to get set up and see what you can pay. An IDR can keep your payments manageable based on your income, and the new SAVE program will also eliminate unpaid interest from being added to your balance. Don't avoid your loans - that can lead only to long-term heartache. In addition to the link below, see the fab info on SAVE from Nerdwallet at my next post.

Here's when your student loan payments will start again | CNN Politics After a more than three-year pause, borrowers will have to restart paying their federal student loan bills in October.

Have you been wondering about your finances in the new year? Come and join me for a free hour of "Ask Your Personal Finance Questions". Meeting on Monday 1/16 at 10 a.m. Eastern Time/7 a.m. Pacific Time. Hope to see you there!

Tickets are on Eventbrite here:

Ask Your Personal Finance Questions - a Free Hour w Linda Matthew of MoneyM This free hour with Linda Matthew of MoneyMindful is a chance to ask any personal finance question that you have been wondering about

Where does all the money go? A summary here from Symphony Financial of the top 6 inflation drivers last year. Hard to know which of these one would cut...

The Top Six Inflation Drivers of 2022 | Symphony Financial Planning In June 2022, the 12-month rise in the Consumer Price Index (CPI) peaked at 9.1%, the fastest pace in 40 years, before dropping to 7.7% in October. This bout of inflation has been driven in large part by steep price hikes for essentials, hitting many U.S. households where it hurts the most. In fact,

A great end-of-year checklist. My favourite is #19 - some options for getting a bit of return on your emergency savings. People have been asking for ages about that, and we are finally in an interest rate environment where you can get 3 - 4%. Let me know if you need ideas of where to find good returns.

FBB Capital Partners - 20 Tasks to Cross Off Your Year-end Financial Checklist A year-end Financial checklist to help you leverage various planning opportunities as we close out 2023 and prepare for the year ahead

It's time to sign up for the student loan debt relief. The sign-up link and a whole bunch of useful information is in this handy summary from CA Rep Garamendi. DEADLINE TO SIGN UP IS DECEMBER 31st.

Apply for Up to $20,000 in Federal Student Loan Debt Relief by End of 2023 Dear , This week, President Biden announced that millions of working- and middle-class borrowers can apply for student debt relief right now at https://studentaid.gov/debt-relief/application. The Federal Student Loan Debt Relief program provides eligible borrowers with up to $10,000 in federal stude...

"Unfortunately shame and "not enough-ness" are what drive much of capitalism and power dynamics in our society" - a beautiful article here written by a client of mine on how to take steps forward through self-compassion. If you have been feeling stuck, I highly recommend this.

Increasing Personal Responsibility Through Self-Compassion — Thrive Therapy & Counseling / 916-287-3430 Do you struggle to motivate? Does it feel scary to take the next step? Are you kinda hard on yourself? Read on to learn how to increase personal responsibility through...self-compassion!

Fraud of the day: where there's a dollar, there's a shark... the fraud investigator at our local credit union told me today's story. The scammers phone you (could be automated), and under some pretext tell you to enter a code that they are sending to your phone. You get a code, seems harmless enough, so you enter it. But it turns out that they have actually got hold of your credit/debit card number, and the code is authorization for them to set up your card for mobile banking - on their phone. You gave them the authorization, and off they go on a spending spree on your account.

Or the code is authorization for them to change your google password. Etc.

I say we go back to in-person and paper, and make it much harder for the fraudsters :)

Useful information on long term care insurance. More states are starting to put programs into place for this, presumably to reduce the cost burden on Medicaid. You will need to decide whether to take private insurance or the state plan. There's a great update here:

llis.com

This is a great analysis: the $10k student loan forgiveness will completely wipe out balances for 29% of borrowers, and will disproportionately benefit some groups that could use the help. Also, because student debt is sometimes high relative to income, student loans can in turn result in other types of unsecured debt. This means that student loan forgiveness is expected to have a significant impact on individuals’ overall unsecured debt. The $10,000 reduction in student debt would decrease the amount of total unsecured liabilities owed by 33.0% on average.

Also, did you know this?: "Any payments made after March 2020 can be refunded and then forgiven". So jazzed about this program, it's just a great clean-up.

Proposed Debt Forgiveness Would Make Large Dent in Student Loan and Total Unsecured Debts New Survey of Income and Program Participation data show who has student loan debt and how much they had after the COVID-19 pause in payments.

And, as usual, watch out for scammers :( With the Student Loan forgiveness program, scammers are already calling people to phish for personal information. In one message, a female caller claims to be from "student support", telling the person that they are prequalified for updated forgiveness, but "your status will expire soon". Etc, etc. The feds have not yet started the forgiveness program, so sign up at the link in Garamendi's article below for legitimate updates.

Also, do not pay up front for "assistance" in lowering your debt! Nobody needs to pay for this, and nobody can get you in early or sooner etc.

If your student loan servicer does not provide clear communication, use the federal Student Aid website (studentaid.gov) for information.

Holy cats, this is huge - Medicare is finally allowed to negotiate drug prices. Bringing a little capitalism to healthcare - now there's an idea!

Next step - how about they require healthcare providers to publish their prices, or at the very least provide a written quote before any procedure. What other product in the US refuses to tell you the price until *after* you buy the product?

Many more provisions in the Inflation Reduction Act passed in August 2022 - see the link. It's California-centric, but a good overview.

The Inflation Reduction Act - Lowering Costs for Californians - Senator Alex Padilla Dear Friend, I recently voted to pass the Inflation Reduction Act, which was signed into law by President Biden this month. This landmark new law will help lower energy and health care costs for millions of Californians, boost air quality, and improve drought and wildfire resiliency—all while red...

Federal student loans still have two significantly predatory issues. Here is some text to send your U.S. reps and senators regarding these:

"Dear Senator/Rep X,

Regarding student loans, the recent changes have made some progress. However, two critical items remain to be addressed in order to make federal student loans less predatory:

* Interest needs to be suspended while the student is in college. To prevent people stretching this out, the period could be limited to 4 years for undergrad, and whatever the length is for the grad degree. Loans that grow while the student is in college are a problem.

* The debt balance that is forgiven at the end of an Income Driven Plan (IDR) needs to be untaxed. The new plan for the IDR to cover unpaid interest will help with this, because it prevents the loan from ballooning. But the tax burden at the end of repayment is still a significant and often unanticipated problem. While this tax has been temporarily put on hold, it needs to be permanent.

Thank you, etc. "

To find your U.S. Senator(s) and Representative, do a web search, then go to their contact page to find the email form. Feel free to let me know if you have questions/comments.

Here is a great summary from U.S. Rep Garamendi of the changes to student loans. Note at the very end the part about applying before November 15th for loan relief, and the link for that.

Providing Student Loan Relief for Millions of Borrowers When I attended UC Berkeley, registration fees were $300 a year. Today, it’s $14,796 in tuition and fees. Since 1980, the cost of attending college has skyrocketed with the price of four-year degrees at public and private colleges almost tripling. According to the Department of Education, an avera...

The pundits say that if young people would just buy less avocado toast, they would be able to buy a house. It's easy to throw out words, but I got to wondering what the numbers would say. Check out this month's article: https://www.moneymindful.org/2022/08/31/the-avocado-toast-thing/

CFPB Fines U.S. Bank $37.5 Million for Illegally Exploiting Personal Data to Open Sham Accounts for Unsuspecting Customers | Consumer Financial Protection Bureau Today, the Consumer Financial Protection Bureau (CFPB) took action against U.S. Bank for illegally accessing its customers’ credit reports and opening checking and savings accounts, credit cards, and lines of credit without customers’ permission. U.S. Bank pressured and incentivized its employee...

I've been hearing a lot from people about overwhelm recently. Ironically, the feeling itself makes it even harder to move forward. So what to do? That's what I discuss in this month's article: https://www.moneymindful.org/2022/07/25/how-to-deal-with-overwhelm/

Still no word on student loans - the repayments or forgiveness. An announcement is expected in the next few weeks. The loan repayment deferral since March 202 has made a huge difference for my people - people have paid off credit card debt and increased their savings. It has been a tremendous boon. I'm not a fan of student loan debt - it's often positioned as "good debt", but the truth is that it's just debt, and I see every week the burden that it creates for people starting out in their 20s, right through older folks in their 50s, 60s and beyond.

A nice update in this article from Forbes:

Student Loans: 3 Important Deadlines Here are 3 important deadlines for your student loans.