College Debt, Student Loans

Ask Chuck: Are Student Loans a Rip-Off?

By: Chuck Bentley, Crown Financial Ministries

Dear Chuck,

When students were paying 10% on student loans, we couldn’t get 1% interest on the money we put in savings. It seems like students and families who continue to take these loans are getting ripped off. Would you please address usury?

Looks Like Usury to Me

Dear Looks Like Usury to Me, 

This question has many aspects to it that I will attempt to address: first, the problems of usury and rip-offs and, then, some possible solutions to student loan debt.  

Usury

Usury, as defined by Merriam-Webster, is “the lending of money with an interest charge for its use, especially the lending of money at exorbitant interest rates.” Usury laws are an attempt to protect people from predatory lenders who tend to take advantage of people in desperate circumstances. 

Typical federal student-loan rates for people with good credit today range from 4.99% to 7%. In the case that you cited, a 10% interest rate for student loans is above the market rate but does not fall into the definition of usury. It appears that way when compared to the market rate for passive savings, but you have to compare it to the available market for student loans. 

Student loans are legal and optional, and most do not borrow the money under desperate circumstances but rather to pursue a desired goal. However, many students and families who take on these loans are unaware of the long-term consequences. 

Rip-Offs 

Student loan debt is second only to mortgage debt in America, as millions borrow to attend school in hopes of a brighter future and an increase in lifetime earning power. But the “borrow your way to a diploma” method continues to get more expensive and is unlikely to change soon. 

How Government-Guaranteed Student Loans Killed the American Dream for Millions” by Daniel Kowalski reveals that there is absolutely no incentive for colleges and universities to lower their prices. He reports that in 1980, there were 3,231 higher-education institutions in the U.S., but by 2016, there were 4,360. In reference to a Forbes article, he says that the average price of tuition has increased eight times faster than wages since the 1980s.

Another Forbes article states that the tuition at Harvard in 1840 was $75 a year. If that price had risen at the same rate as prices (or the inflation rate), the cost in 2015 would have been $1,703, not $45,278. (2022-23 tuition is $52,659.) “But it is arguable whether today’s college graduate is in a real sense more educated than ones in 1840 when individuals like Samuel F.B. Morse and John Deer were revolutionizing communications and agriculture, and some with far lesser education (think Abraham Lincoln) were making big contributions in law and politics,” the article states.

Today, many college graduates are underemployed, but there is no evidence this was a problem among 19th-century graduates. As federal aid has increased, so have tuition fees. The proportion of recent college graduates (the article is dated 2015) from the bottom quartile of the income distribution is lower today than in 1970—before Pell Grants or massive federal loan programs. In addition, administrators now outnumber faculty. 

Student loans have benefitted colleges and universities, with the burden falling on students, taxpayers, and those hoping to get a degree in the future.  

Many people are discovering that their assumption that a university education was necessary for financial security was false. The opposite has happened. Students often graduate with diplomas and debt, sometimes in the hundreds of thousands of dollars—but without job security.  

Merrill Matthews wrote a compelling article titled “University Endowments Should be the Primary Source of Student Loans.” “At the end of fiscal year 2020, the market value of the endowment funds of colleges and universities was $691 billion . . . If colleges and universities had to turn to their endowments as the first line of student loans, they might decide to get their costs under control,” the article states.

How to Avoid Student Loans

Parents should not borrow money for their children’s higher education. If you want to help cover a university education, start saving early. Demand academic excellence from your schools to prepare your children to qualify for scholarships. I used to tell my boys that getting good grades would be the highest-paying job they could have in high school. Our rule was that nobody would borrow to attend college. Either we would find a way to pay for it via savings and scholarships and jobs while in school, or they would not attend.  

Here are some tips for students who want to get an education without borrowing money:  

  • Start saving early, and learn how to budget. 
  • Research average salaries for careers that interest you before going to college.
  • Consider trade schools.
  • Consider careers that do not require a college degree.
  • Fill out the FAFSA (Free Application for Federal Student Aid) early.
  • Apply for grants and scholarships early.
  • Students should work part-time, live at home, and take advantage of community colleges. 
  • Accelerate time to complete the college degree by:
    • Taking AP and college courses in high school.
    • Attending summer and winter classes. 
    • Taking more than the average number of hours of classes. 
  • Rent or buy used textbooks.
  • Become a resident assistant (RA) to get free room and board.
  • Pray, and seek wise counsel. 

Dealing with Student Loan Debt

If you have a student loan now, look at refinancing options to reduce your interest rate. Make a plan to apply all extra income toward the reduction of the debt. Attempt to pay it off as soon as possible. Ask the Lord to give you help in accomplishing this goal.

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College Debt, Student Loans

Recognizing Student Loan Scams

By: The Consumer Financial Protection Bureau (CFPB)

Numerous student loan borrowers recently submitted complaints to the CFPB about companies that promised them student loan forgiveness or loan forbearance in exchange for fees amounting to hundreds or thousands of dollars. Borrowers believed they were talking to their servicer or a company authorized by the U.S. Department of Education (ED) because they often knew private information such as the borrower’s loan balance or recent consolidation activity. This is fraud.

Legitimate options for getting rid of your federal student loans:

  • Loan forgiveness is not available for all student loan borrowers at this time, though there are programs to forgive federal student loans for specific borrowers, such as public service employees, and discharge loans in other circumstances. On October 6th, 2021, the ED updated the Public Service Loan Forgiveness (PSLF) program to provide a limited-time opportunity for student loan borrowers to receive credit for payments that would otherwise not qualify for PSLF. This opportunity ends on Oct. 31, 2022.
  • Eligible borrowers can now apply for a full or partial discharge of loans up to $20,000. This one-time debt relief is provided by the ED as part of the Biden-Harris Administration student debt relief plan. As of today, the application is open but debt discharge is paused. Due to a court order, the ED is temporarily blocked from processing debt discharges. However, eligible borrowers are still encouraged to apply (no later than Dec. 31, 2023). The ED will continue to review applications and quickly process discharges when they are able to do so.
  • Federal student loan servicers cannot charge you to apply for loan forgiveness, income-driven repayment (IDR), deferment, forbearance, or to file any other paperwork. Federal loan servicers do not charge any application or processing fees to consolidate your federal loans into a Direct Consolidation Loan.
  • The CARES Act pause on payments and interest for federally held student loans has been extended through Dec. 31, 2022. Forbearance on qualifying loans will happen automatically. No one will contact you to sign up for CARES Act forbearance. There is no fee to enroll in CARES Act forbearance. If your payment will be too high when the pause ends, please reach out to your servicer directly to explore a variety of payment relief options. Your federal loan servicer will not charge you any application or processing fees to help you switch to a different repayment plan such as an IDR plan or enroll in any of the deferment or forbearance options available to you.

In addition to submitting complaints to the CFPB and the Federal Trade Commission (FTC), we encourage consumers to learn how to recognize these scams and how to report scammers to authorities.

Here are some red flags to watch out for:

  • Charging upfront fees for free programs

Scammers often attempt to charge for programs that all borrowers can access for free, including preparing the paperwork. Loan forgiveness or discharge (to the extent those programs are available to you), loan consolidation, student loan forbearance, and deferment are all free programs provided by your servicer. If a company is asking you to pay large amounts of money upfront, it is likely a scam and should be reported. Do not give any money or personal information to the company. Contact your loan servicer to determine what options are available to you. You can find out who your servicer is by logging in to your Federal Student Aid account or calling 1-800-433-3243.

  • Pressure to decide quickly

Scammers might tell you that you only have 24 hours to take advantage of an offer or program. This is a red flag. Most government-offered programs do not require this sense of urgency. Confirm whether this is a legitimate company before you take any additional steps.

  • Encouraging you to cut off communications with your loan servicer

This is a warning sign that this company is not working in your best interest. As a student loan borrower, it’s important for you to maintain communication with your servicer. If someone urges you to make payments to their company instead of your loan servicer or to stop communicating with your loan servicer, do not give them any information. Do not stop making payments to your servicer.

  • Claiming to be affiliated with your loan servicer or the ED

Scammers might name-drop organizations you have a loan account with. Be careful of statements like “we work with the Department of Education” or “we’re partnered with your loan servicer.” If someone contacts you and claims to be partnered with your loan servicer, hang up the phone and contact your loan servicer directly to confirm. Call the number provided on your billing statement or through your servicer’s web portal. Do not use the contact information provided in an email or voicemail message.

There might be times when your student loan servicer contacts you about Public Service Loan Forgiveness (PSLF). As part of a recent settlement with the CFPB, Edfinancial, a federal student loan servicer, is required to contact all of its Federal Family Education Loan Program (FFELP) borrowers to inform them of the limited PSLF waiver so that eligible borrowers can take advantage of the waiver before it expires.

  • Asking for personal information via email or over the phone

Scammers often ask for personal information like your full Social Security number, bank account number, FSA ID, or studentaid.gov password. Do not give any personal information to an unverified company over the phone. If you suspect the caller may be a scammer, hang up and contact your servicer directly to determine if there are any actions required for your loan. If you have provided your personal information to a scammer, we have listed some tips for avoiding scams below.

Tips for avoiding scams

  • The person contacting you might have correct information about you or your loan, but that doesn’t mean they’re legitimate. Some scammers knew the borrower’s loan balance or about their recent application for consolidation. This led borrowers to believe they were talking to their servicer or another legitimate entity.
  • Don’t share your personal information. Consumers reported being asked for their Social Security number, bank information, FSA ID, and studentaid.gov login information. This allows them to steal your money and cut you off from your servicer, so they can’t notify you of missed payments.
  • Don’t sign a power of attorney. Some consumers have been asked to sign a power of attorney allowing the company to deal with the student loan servicer on their behalf. This allows them to make financial decisions for you. Don’t give this power to someone unless you know them personally and trust them!
  • Stay in contact with your servicer. Sign into your student loan servicer’s web portal to periodically check in on your loans. Any notices for your student loans will be available through your servicer’s website.
  • Take your time. An honest company will not pressure you to make a decision quickly. If you’re unsure, end the conversation and research the company to confirm whether or not they are legitimate.
  • Keep track of your student loans. Student loans can be confusing, and scammers rely on that. If you know the types of loans you have and who your servicer is, it’s harder for scammers to take advantage.

If you’ve been contacted by a scammer or defrauded

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Budgeting, College Debt, Kids & Money, Money Management, Saving, Student Loans

Ask Chuck: How Do I Financially Prepare My Child for College?

By: Chuck Bentley, Crown Financial Ministries

Dear Chuck,

I’ve tried to prepare my daughter to handle money responsibly while she’s away at college. But, I’m concerned that peer pressure and the stress of classes will throw her off track. Any tips?

Budget-Minded Mom

Dear Budget-Minded,

Congratulations are in order for preparing her for this crucial transition. Far too many students leave home without a clue how to manage money and are vulnerable to making life-altering messes.

While most Americans assume that student loan and consumer debt is the only way to get a college education today, this is simply not true, regardless of income. I have a friend who immigrated here from China. She only had $2,000 to help her daughter when she left for college. When her daughter finished her undergraduate and decided to seek a master’s degree, her mother asked if she needed financial help. Turns out that her daughter had been able to graduate without borrowing money and still had cash in the bank. She explained that she had been saving and investing for years and had $70,000 cash in the bank before entering grad school!

Financial preparedness for college students and young adults is crucial today. Demands come from all directions and unless students understand the value of a dollar, they can blow through spending money and quickly rack up consumer debt and long-term student loan debt before they ever realize the consequences ahead. 

Having raised four sons, we can appreciate your concerns but also want you to know that it is possible for our children to swim against the tide. 

Set Clear Boundaries

Make sure there is a clear understanding of what you will pay for and what your student is required to cover. Typically, students are more careful with the money they have earned, so avoid robbing them of an important lesson by giving them everything. 

For example, if they have a car at college, determine who will pay for gas, insurance, tags, parking, maintenance, and repairs. If they’re going to be responsible for those expenses, then they need to find a part-time job. That’s real life! If you plan to cover the expenses, have clear stipulations and terms (e.g. you’ll only cover those costs as long as they remain in school and maintain a decent grade point average). Every family situation is different, but the goal is to grow financially mature adults.

Some Practical Tips 

Here are a few additional tips you may want to teach the young people in your life:

  • Exercise self-control. Don’t drink, smoke, or binge with money
  • Live like you’re poor in college and you won’t be when you graduate!
  • The earlier you save and invest, the more you’ll have for your future
  • Boundaries now grant freedom later
  • Be careful loaning money
  • Keep healthy snacks on hand and in a backpack
  • Use cash to avoid overspending
  • Avoid debt. Period. Set a goal to graduate without student loans or consumer debt.

What They Need to Know

  • How to use a checking account and debit card – understand bank fees
  • How to make deposits into a savings account – preferably at a different bank to avoid easy withdrawals
  • How to use a credit card wisely – pay it off in full each month
  • How to make a budget and keep track of expenses
  • The importance of good credit and how to establish it
  • The joy of giving and saving with intentionality
  • Student loans will be offered but try to avoid them

Prevent Medical Expenses

  • Cook healthy meals or use a meal plan wisely
  • Sleep, exercise, avoid alcohol and drugs
  • Seek a community of Godly friends
  • Take care of mental health: limit social media, join a church, volunteer

Practical Tips

  • Keep $100 tucked away in your wallet for emergencies only
  • Guard personal information
  • Know how and where to buy/sell used textbooks
  • How to study well, apply for scholarships, and work part-time
  • Know identity in Christ to withstand peer pressure, FOMO, and comparison traps
  • Live at home or with another relative to save dorm/apartment fees
  • Know how to make coffee, cook, and do laundry
  • Get to know the financial aid counselors
  • Work on campus: saves time/gas, and opens doors to deeper relationships with staff

Preparing our youth financially will give them a step ahead of most people. Diligence requires purpose, intentionality, and resolve. It requires renewing the mind and working toward specific goals. May they be filled with the understanding of who they are in Christ and the knowledge that they are stewards of what He gives.

And whatever you do, in word or deed, do everything in the name of the Lord Jesus, giving thanks to God the Father through him. (Colossians 3:17 ESV)

Whatever you do, work heartily, as for the Lord and not for men, knowing that from the Lord you will receive the inheritance as your reward. You are serving the Lord Christ. (Colossians 3:23-24 ESV)

By discussing your daughter’s financial needs, desires, and habits regularly now, you can help her avoid the mistakes that most make plus prepare her for the next stage of her career without the bondage of debt-driven decisions.

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College Debt, Student Loans

6 Lines of Thought That Result in Significant Student Loan Debt

By: MoneyWise

Student loan debt is a significant issue. Many high school students are receiving their diplomas and heading off to college.

How will they cover the costs? Based on statistics, a significant number will use debt.

Why? It is not purely a function of costs. Sometimes, students believe some lines of thought that result in significant student loan debt.

If you are a student, try to avoid these lines of thought:

  1. Attending a costly school will get me a better job. Higher tuition does not always equate to higher salaries. Employers do not look at the amount you paid to get a college degree. They just look at your degree. This is especially true after your first job. After your first job, where you went to school starts to take a back seat to your prior work experience. Find a school that makes financial sense for you.
  2. I need the “college experience.” Certainly, there is nothing wrong with enjoying your time in college, especially if it works with your finances. But more and more students are realizing that having the “college experience” is not worth having the college debt. Instead of attending social after social, they are getting jobs to help offset their tuition costs. They are working hard to make sure they are not still paying for their education ten years after graduation.
  3. It is ok to stretch out college. Certainly, there is some leniency here, but be very careful when choosing to stretch out your degree program. Two things can happen. First, you tend to end up paying more. This is especially true if you find yourself unable to pay for living expenses. Second, you run a greater risk of not completing your degree. And don’t take throwaway classes. Make your investment worth it. Finish your degree in a timely manner.
  4. I don’t need to know what I am signing. You should educate yourself on student loans. Before you sign any papers, understand what you are committing to. Know what it will take to pay off the loan. Also, know how it compares to other alternatives. You will need to understand your loan when you’re paying it off, so you better understand it prior to signing the agreement.
  5. Everything will take care of itself. Student loans don’t just go away. They even survive bankruptcy. I’m less concerned with the student who feels burdened by their loans than the one who feels no burden from their debt. Student loans are a debt to be repaid and students need to view them as such.
  6. There is no other option. Without question, the cost of higher education presents a formidable challenge for many current and future college students. But this does not mean there are no other options. Change often necessitates additional change. A change in the cost of college may require you to reconsider what going to college looks like. It is very likely that your college experience will not look like your parents’ college experience.
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College Debt, Loans, Student Loans

Student Loan Forgiveness (and Other Ways to Repay Your Loans)

By: Federal Student Aid, an Office of the U.S. Department of Education

Here’s a common question from customers who have taken out student loans… Is it really possible to have my federal student loans forgiven or to get help repaying them?

The answer: Yes!

However, there are very specific eligibility requirements you must meet to qualify for loan forgiveness or receive help with repayment. Loan forgiveness means you don’t have to pay back some or all of your loan.

You never know what you may be eligible for, so take a look at the options we have listed below:

  1. Teacher Loan Forgiveness

If you teach full-time for five complete and consecutive academic years in certain elementary or secondary schools or educational service agencies that serve low-income families and meet other qualifications, you may be eligible for forgiveness of up to a combined total of $17,500 on eligible federal student loans. Get the details about Teacher Loan Forgiveness.

  1. Public Service Loan Forgiveness (PSLF)

If you work full-time for a government or not-for-profit organization, you may qualify for forgiveness of the entire remaining balance of your Direct Loans after you’ve made 120 qualifying payments—that is, 10 years of payments. To benefit from PSLF, you should repay your federal student loans under an income-driven repayment plan. Learn more about PSLF now! If you’re interested in PSLF, use the PSLF Help Tool to generate a form to submit to MOHELA, the PSLF servicer. If you have been denied loan forgiveness under PSLF because one or all of the payments you made on your Direct Loans were under a nonqualifying repayment plan, you might be eligible for Temporary Expanded Public Service Loan Forgiveness (TEPSLF). Learn about TEPSLF and how to apply for this first come, first served opportunity.

  1. Income-Driven Repayment (IDR) Plans

If you repay your loans under a repayment plan based on your income, any remaining balance on your student loans will be forgiven after you make a certain number of payments over a certain period of time. Learn about IDR plans and how to apply.

  1. Military Service

In acknowledgment of your service to our country, there are special benefits and repayment options for your student loans available from the U.S. Department of Education and the U.S. Department of Defense. Benefits include interest rate caps under the Servicemembers Civil Relief Act and Department of Defense student loan repayment programs. Learn more about federal student loan benefits for members of the U.S. armed forces.

  1. AmeriCorps

The Segal AmeriCorps Education Award is a benefit received by participants who complete a term of national service in an approved AmeriCorps program—AmeriCorps VISTA, AmeriCorps NCCC, or AmeriCorps State and National. After you successfully complete your service, you are eligible to receive a Segal AmeriCorps Education Award, which can be used to repay qualified student loans.

  1. Other Options

Check out the “Student Loan Forgiveness” page for information about other types of loan forgiveness and discharge that might be available if you meet certain conditions.

If the options listed above don’t apply to you but you need help making your federal student loan payments, contact your loan servicer about the options to:

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Budgeting, Christian Credit Counselors, College Debt, Consumer, Coupons, Credit Cards, Credit Counseling, Credit Score, Debit & Your Credit Score, Debt, Debt Consolidation, Finance, Freebie, Holiday Tips, Kids & Money, Money Management

10 Back-To-School Shopping Tips that Save Money

To your kids, shopping for new clothes, gear, and school supplies may be the only good thing about going back to school, but that doesn’t mean you have to spend a fortune every year. Here are 10 great ideas for how to get everything they need and save a few bucks doing it.

Hold off buying trendier gear

Kids may love a certain lunch box or pencil case they find in July, but once they start school and see that their friends are all using another kind, they’ll beg you to upgrade them, and that only results in wasted cash.

Shop end-of-summer sales

You know as well as we do that kids wear short sleeve polo shirts all year long, so hit the big summer sales and snap up discounted duds that can be worn well into fall.

Stick to the list

The teacher’s supply list at the start of a new school year is daunting enough so don’t waste time and money on unlisted items. Extra supplies, while they may be cute, will probably never get used and just leave your pockets empty.

Head to the supermarket for basic supplies

Check weekly circulars for great deals on pens and loose-leaf paper, and get your weekly grocery shopping done at the same time. Bonus: buying everything in one place will save time and gas money!

Let the kids raid your cabinets

The kids can select home-office supplies and then personalize them in unique ways. For example, decorate inexpensive plain, white binders with digital photos by creating a collage and inserting the page into the plastic outer cover.

Host a back-to-school swap

Round up a couple of other moms with kids the same gender as yours but different ages, and host an annual clothes swap. Trade toys and books, too! You’ll save a bundle.

Plan lunch

When you’re in charge of what your child eats, you’ll save yourself money. Check the weekly circulars at your local supermarkets for sales. If turkey isn’t on sale one week and ham is, go for the ham!

Buy bright

Lost school supplies may be a given, but gear that’s hard to miss can stave off the inevitable. Pack all their pencils, erasers, and other goodies into a bright backpack or pencil pouch to keep them from disappearing.

Shop the big three

Old Navy, Gap Kids, and The Children’s Place rotate merchandise often. Ask when they do their markdowns so you can grab the deals. Also, if you see an item you bought in the past 14 days on sale later, you can get the difference refunded, you don’t need the clothing, just the receipt.

Browse craigslist.org

Yes, you can find top-quality stuff on the cheap, but you can be a seller, too. Why not get some cash for that barely worn, now outgrown brand-name outfit? Just enter your location and click on “Baby and Kids.”

By: Parenting.com

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Budgeting, Christian Credit Counselors, College Debt, Consumer, Coupons, Credit, Credit Cards, Credit Counseling, Credit Score, Debit & Your Credit Score, Debt, Debt Consolidation, Debt Settlement, Goals, House, Kids & Money, Money Management, Personal Goals, Saving, Student Loans, Uncategorized

Use the Start of the School Year to Set the Stage for Your Child’s Financial Success

By: Brittany Frost

Where did the summer go? As the school year rapidly approaches, children are preparing for the academic and social journey of the next grade level while parents are bracing their financial situation for the costs of continuing education. Parents can take this golden opportunity to go above and beyond just shopping for school supplies at Wal-Mart and, instead, show their children how to budget, save, and spend their money in order to teach them how to financially prepare for school (which will undoubtedly come in handy for college).

Alarmingly, a study released in July by the FINRA Foundation estimated that almost two-thirds of Americans couldn’t pass a basic financial literacy test, including calculating interest payments correctly (See Ref. 1). When you pair that with the fact that public, in-state college tuition, room, and board has risen 1300% since 1971 (See Ref. 2) and a recent survey showing that 75% of U.S. workers have student loan debt so high that they contribute less to their retirement (See Ref. 3), it is easy to see why parents must take every opportunity to educate themselves and their children so they do not end up in pools of unmanageable student loan debt. It is never too early to avoid the debt cycle and teach your children to financially prepare for school. Think about it: Did you or do you still struggle with enormous student loan debt? Did you avoid college altogether because you couldn’t afford it? Or did you have the financial means or knowledge to keep your student loan debt to a minimum? Either way, think of your financial mistakes, trials, and triumphs and use the start of this school year to teach your children everything you’ve learned about financially preparing for school. Use your experiences along with the following resources and ideas as motivation to set the stage for your child’s financial success or, perhaps, to change your own path.

So how can you do this? Include your child in the financial process of preparing for school. Sit down and discuss with them. Educate them on the difference between a “want” and “need” so they can decide what they need for school. Ask for their opinion and listen. Use free online budgeting tools available on www.christiancreditcounselors.com to set a budget together. Discuss and research ways to stick to that budget by using free resources such as Passionate Penny Pincher’s Free Back-to-School Cheat Sheet for a complete list of back-to-school deals. Record and track your spending. Make back-to-school shopping a learning experience through mathematical games. In “7 Smart Ways to Save on Back-to-School Clothing,” Deacon Hayes also suggests tips like assessing your child’s current school inventory, visiting thrift stores first, and adding in a fun but frugal activity such as stopping for an inexpensive lunch or treat to make back-to-school shopping a happy experience (See Ref. 4). Above all, just enjoy spending time and working toward your financial goals together as a family. By doing this, you will not just be buying more pencils and notebooks, but you will be setting the stage for the financial success of your children AND yourself. Here’s to a successful school year!

References

1.       Farber, Madeline. Fortune. Nearly Two-Thirds of Americans Can’t Pass a Basic Test of Financial Literacy. 12 Jul. 2016. http://fortune.com/2016/07/12/financial-literacy/

2.       Jacoby, Jeff. The Boston Globe. Making college ‘free’ will only make it worse. 13 Jul. 2016. 18-20. http://c.ymcdn.com/sites/www.ncher.us/resource/collection/6E4F0103-05C8-4F48-844E-BEEAC285C10B/db0714_2016.pdf

3.       O’Connell, Brian. The Street. 75% of U.S. Workers Say High Student Loan Debt is Crippling Their Retirement. 12 Jul. 2016. https://www.thestreet.com/story/13627148/2/75-of-u-s-workers-say-high-student-loan-debt-is-crippling-their-retirement-savings.html

4.       Hayes, Deacon. U.S. News Money. 7 Smart Ways to Save on Back-to-School Clothing. 15 Jul. 2016. http://money.usnews.com/money/blogs/my-money/articles/2016-07-15/7-smart-ways-to-save-on-back-to-school-clothing

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Budgeting, College Debt, Consumer, Credit Cards, Credit Counseling, Debit & Your Credit Score, Debt, Debt Consolidation, Finance, Goals, Holiday Tips, Money Management, Personal Goals

Stop Her Before She Shops Again

Originally posted at Christian Post February 5, 2016.

chuck-bentley

Dear Chuck,

I have a friend who is a non-believer and an impulse buyer, especially on-line. If I suggest to her that she cut up all her credit cards, I’m concerned that such a plan leaves her without a tool that she will sometimes need. But my fear is that she will also use this one credit card to continue buying things she doesn’t need. How I can help her stop buying things online that she doesn’t need? Help!

A Worried Friend

Dear Friend,

What a blessing it is for your friend to have a Christian in her life who cares about her, prays for her, and wants to help her get free from the bondage of impulse spending. Without help, she will likely suffer the consequences of excessive debt and continual stress.

One of the reasons so many of us struggle with spending is that it feeds something in our hearts, a need that we try to fill with things. Impulse spending or compulsive shopping, especially when it involves going into debt, is often driven by our emotional state. We shop to try and make ourselves happy.

I had a friend who went through several job interviews for a significant promotion. The day it was announced that he did not get the promotion, he left the office, drove to a car dealership and purchased a brand new car – that he could not afford. It was totally out of character for him. He told me later he was trying to cover his disappointment with something he thought would make him feel better about himself. The opposite happened. He grew to resent the car as he made payments month after month and eventually sold it for a significant loss.

The process for really getting free from this habit begins with a relationship with Jesus Christ, who first loved us, who died for us and who can teach us how to put the things of this world into perspective. Before you ask her to cut up the credit card, try a different approach that gets to the real root issue. I recommend that you meet face to face and talk as friends about having a relationship with our Savior. Let her know that you care and want her to experience the freedom you have found in Christ.

Without help, it will be difficult for your friend to let go of the kinds of desires that advertisers twist to get us to buy their products. She will remain vulnerable to trying to meet her emotional needs through stuff, with or without the credit card in her hand.

And then, rather than trying to talk her out of credit cards, let’s talk about budgeting. According to Gallup, two-thirds of Americans don’t budget. Your friend may find that she can understand how her spending is hurting her if she sees how it impacts her bottom line, and Crown can help. There are some great tools for creating a simple budget. And there are people trained to help you with a debt management plan, such as a Crown partner, Christian Credit Counselors.

You’re right that credit cards, in this economy, are often a necessary device. I’ve written about the right way to use a credit card in an earlier Ask Chuck column, but one important tip for all card users is to pay off your balance each month. That way, you have the use of an important tool without the burden of debt.

One of the things that you might be able to do to help your friend grow spiritually as well as in financial maturity is to invite her to share a Bible study with you, and maybe a few other friends, which examines what God says about money. This will provide a less stressful way to begin a conversation about money, about life and about why we make some of the choices that hurt us. You can learn more about that here, but the bottom line is that your time, invested in your friend, could change her life for eternity.

The real peace she needs is found in 1 John 2:15-17, “Do not love the world or anything in the world. If anyone loves the world, love for the Father is not in them. For everything in the world—the lust of the flesh, the lust of the eyes, and the pride of life—comes not from the Father but from the world. The world and its desires pass away, but whoever does the will of God lives forever.”

Credit cards can be a problem for many of us. But that debt is small compared to the greatest debt we have in our lives: the debt of the penalty for our sin that only Christ can repay. Start with Jesus … the rest will follow.

 

By: http://blog.crown.org/impulse-shopping

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Activities, Budgeting, Christian Credit Counselors, College Debt, Community, Consumer, Credit, Credit Cards, Credit Counseling, Credit Score, Debit & Your Credit Score, Debt, Debt Consolidation, Debt Settlement, Economy, Finance, Goals, Holiday Tips, Money Management, National Debt, Personal Goals, Saving, Student Loans, Taxes

Managing Your Student Loans Wisely: A Great and Unique Gift for Mother’s Day

By: Brittany Frost

What greater gift is there than the joy of seeing your child become financially responsible and independent throughout and after their college years? If you are looking for a unique and great gift to give your mother on May 8th for Mother’s Day this year, consider the gift of managing your student loans wisely. Instead of spending money on the gift, you’ll be saving it. Managing your student loans during and after college can help you avoid extra costs and interest as well as reduce your overall debt. Saving money and achieving your financial goals is not only a great gift to the mothers who are able to contribute to their child’s education, but also for the mothers who so desperately want to help but don’t have the means to do so. Here are a few tips to manage your student loans wisely this Mother’s Day:

 

• Before you even take out a student loan, apply for as many scholarships and grants as possible. This alone can save you (and your mom) a lot of money. Visit your school’s website or www.studentaid.ed.gov to view federal grants and scholarships.

• If you still need a loan, research loan types and repayment plans to make an informed decision. In general, federal student loans can have more repayment options and lower interest rates than private student loans. For more information on federal student loans and repayment plans as well as budgeting resources and calculators, visit www.studentaid.ed.gov.

• Budget and plan ahead. For more help budgeting for your student loans, contact Christian Credit Counselors at www.christiancreditcounselors.org.

• Use other free resources. According to the recent article Baylor University Partners with iGrad to Implement Online Financial Literacy Education Initiative by Jo-Carolyn Goode, Baylor will team up with iGrad, a financial literacy leader, to offer interactive workshops about budgets, scholarships, student loans, applying for jobs to help students pay for school, and a seminar for seniors to discuss loan payment options after graduation through iGrad’s financial literacy platform. For more information, visit www.igrad.com.

• When repaying your loan, consider an automatic payment deduction to save money on your payment. Also, put as much money as you can toward your payments. Each extra dollar paid toward your student loan payment each month can help overall.

• Since it is tax season, remember that student loan interest is tax-deductible and there are credits and deductions for parents and students. According to the College Board in Danielle Douglas-Gabriel’s article in the Washington Post entitled Paying for college? Have student loans? Here’s what you need to know before filing your taxes, the average family saved about $1,460 in education credits and deductions in 2013. To research various options of increasing your savings through tax credits and deductions such as the American Opportunity Tax Credit and the Student Loan Interest Deduction, refer to www.irs.gov. See how much you can save!

By using these tips and managing your student loans responsibly, you will not only save money but you will provide valuable peace of mind for you and your mother. That’s something that you won’t be able to buy at the Hallmark store!

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Christian Credit Counselors, College Debt, Consumer, Credit, Credit Cards, Credit Counseling, Debit & Your Credit Score, Debt, Debt Consolidation, Economy, Finance, Money Management, Student Loans

Student Loan Info You Need to Know

Learning Student Loans: Understand and Prepare for the Cost of Your Education

Looking for more information about student loans, their features, and repayment options? Christian Credit Counselors, a nonprofit 501(c)(3) with a mission to provide free financial education to individuals and families both locally and nationwide, is now offering a free online webinar titled Learning Student Loans: Understand and Prepare for the Cost of Your Education. Christian Credit Counselors is committed not just to helping people get out of debt, but providing them with free resources and education to STAY out of debt and live a life of financial freedom.

The Learning Student Loans webinar is designed to give you an overview of the types and features of student loans so that you can make the best, most informed decision on your journey to obtain the education you need for your career and life. The webinar will discuss free financial aid options, loan types, repayment plans, loan consolidation, forbearance, deferment, loan forgiveness, what to do if your loan is in default, and useful resources that will help you stay in control of your loan and payments. Whether you already have a student loan or you are thinking about getting one in the near or distant future, this webinar will help inform you of your loan and repayment options so that you are best prepared to pay back your loan successfully.

Click on the video below to view the webinar.

Click here to download the free handout.

When you are done with the video, take a quick survey to help us improve our webinar.

If you have questions or would like more information, email info@christiancreditcounselors.org.

credit card debt

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