How to Reduce Student Loan Debts

If you are having problems with student loan debts there is a new source of help. The Christian Science Monitor reports that the Consumer Financial Protection Bureau can help with student loan debt.

You’re not alone if you’re confused about your student loans or feel stymied by your student loan servicer. More and more resources out there can help, but you can’t use them if you don’t know they exist.

We talked to Seth Frotman, who works at the federal Consumer Financial Protection Bureau as student loan ombudsman and assistant director of its Office for Students and Young Consumers. The CFPB was created to help consumers after the financial crisis of 2008; Frotman’s office collects consumer complaints about student loans, publishes reports about the industry, and drafts policy recommendations to improve student loan servicing.

According to the CFPB about one in four student loan borrowers are behind in payments or in default. But the fact of the matter is that there are affordable repayment plans available that many are simply not aware of. How to reduce student loan debts, catch up or have loans reduced starts with the CFPB student loan playbook.

The playbook is a common sense guide stating in the beginning that payers have a right to choose different payment plans than the one that they have. One can pay monthly payments for ten years based on loan balance or pay based on income over as long as 20 years. Changing payment plans can be done at no cost to you.

Student Loan Forgiveness

There is public service loan forgiveness available under certain circumstances according to the Federal Student Aid page of the U.S. Department of Education.

The Public Service Loan Forgiveness (PSLF) Program forgives the remaining balance on your Direct Loans after you have made 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer.

This web page explains qualifying employment, full time employment, types of loans that qualify and how to pursue help under this option.

A Complete List

The web site Student Loan Hero provides a “complete” list of student loan forgiveness programs on options. The loan forgiveness categories are these.

  • Public Service Loan Forgiveness
  • Teacher Loan Forgiveness
  • Teacher Cancellation for Federal Perkins Loans
  • Special Teacher Forgiveness Programs by State
  • Special Forgiveness Programs for Doctors by State
  • Special Forgiveness Programs for Lawyers by State
  • Forgiveness with Income-Based Repayment
  • Forgiveness with Pay as You Earn

These folks also provide a list of lenders who will refinance student loans.

How Much Do Former Students Owe?

According to Market Watch 70% of bachelor degree recipients leave college in debt. The sum total of student loan debt runs to about $1.2 Trillion. Only mortgage debt surpasses this number for person US debt. Because of the economic consequences of this amount of debt the government has initiated the programs that we mentioned and more may be in the works as pressure on politicians grows. Many are saddled with excessive student loan debt. The first step is to find out your options.

Do You Want the Internet of Things in Your Home?

When personal computers were invented experts predicted that one day each of us would have an Apple computer or a PC that would run our home. It turns out that computer chips are showing up in more and more parts of our lives although they are not necessarily connected to our home computer. Rather the so-called internet of things exits which is network of physical objects. These are devices, vehicles, buildings and lots of other things that are embedded with electronics, software, sensors, and network connectivity. Thus these objects collect and exchange information. According to the Global Standards Initiative the Internet of Things (IoT) is the infrastructure of the information society. The thing is do you really want the internet of things in your home and especially connected to things outside of your home? From the world of business there is an example of how the internet of things can cause problems.

Target Security Breach

Around Christmas of 2013 the American retailer Target suffered the biggest security breach in US history. Hackers stole 40 million credit card numbers and 70 million addresses, phone numbers and other person info. This case of identity theft started when hackers gained access to Target’s computer via an HVAC (heating, ventilation and air conditioning) vendor. Krebs on Security reported how the hackers used an HVAC company to get into Target’s computers.

Target told reporters at The Wall Street Journal and Reuters that the initial intrusion into its systems was traced back to network credentials that were stolen from a third party vendor. Sources now tell KrebsOnSecurity that the vendor in question was a refrigeration, heating and air conditioning subcontractor that has worked at a number of locations at Target and other top retailers.

Now we suspect that you do not have credit card info for millions of people stored in your home but the point is that using the internet of things hackers can move from point to point in search of something to steal, something to control or something to damage.

Smart Object, Dumb Idea

Remember our article, Could Someone Hack Your Car? We aren’t the only ones to worry about the internet of things. The New York Times explains that smart objects might be a dumb idea.

A FRIDGE that puts milk on your shopping list when you run low. A safe that tallies the cash that is placed in it. A sniper rifle equipped with advanced computer technology for improved accuracy. A car that lets you stream music from the Internet.

They go one to cite the example of security researchers shutting down the engine of a car on the highway. The selling point for the IoT is convenience and safety. Is that really so?

The early Internet was intended to connect people who already trusted one another, like academic researchers or military networks. It never had the robust security that today’s global network needs. As the Internet went from a few thousand users to more than three billion, attempts to strengthen security were stymied because of cost, shortsightedness and competing interests. Connecting everyday objects to this shaky, insecure base will create the Internet of Hacked Things. This is irresponsible and potentially catastrophic.

So, what can you do when you would like the convenience and safety of the IoT and not the dangers? PC Word offers 5 steps to keep your smart home from being hacked.

They suggest using a cloud service to store data and routinely updating passwords on your router. For home automation equipment they recommend Nest and Hive products and services.

Do You Need a Home Warranty?

Did your microwave simply stop working or did your clothes washer spring a leak? Both appliances are out of warranty and you really don’t have the cash to buy new. What do you do? Repairs might be expensive so does that mean heating water on the stove and washing clothes by hand? Maybe you need a home warranty for repairs. A good option is to check out Choice Warranty for a free quote before your refrigerator dies and the air conditioner goes off on the hottest day of the summer.

Home Repair Warranty Coverage

You will be paying a small fee every month for a home repair warranty. Make sure when you get your quote that everything that you want covered is included. Here is a basic list of what a home warranty should cover.

  • Dishwasher
  • Washer
  • Refrigerator
  • Dryer
  • Stove
  • Air conditioner or system
  • Water Heater
  • Furnace

You may want to include a few other items in this list as well:

  • Microwave
  • Freezer
  • Vacuum cleaner
  • Garbage disposal
  • Range Hood
  • Ice maker
  • Compactor
  • Grill
  • Television(s)
  • Garage Door Opener
  • Garage Door
  • Sewing Machine
  • Digital Camera
  • Camcorder
  • Home Theater
  • Exercise equipment
  • Lawn mower
  • Snow blower

It is unusual to find a service that covers outside appliances such as a lawn mower or your furnace. Check with your natural gas supplier for your furnace as many will offer maintenance and repair plan with monthly charges on your gas bill.

Timely Service at Your Home

Make sure when you sign up for a home warranty plan that it prompt home visits and all repairs possible on site. If an appliance needs to be taken into the shop the home repairs warranty should cover that possibility at no extra cost. And there should be some sort of guarantee as to the promptness of getting repairs completed and your appliance back at work in your home.

Getting Your Money’s Worth

A home repair warranty should be cost effective. In this regard take a look at this price list comparing replacement versus repair costs for various items in your home. As a rule of thumb if you have older appliances expect to be fixing one or two of them yearly for several years. As a rule repair instead of replacement is more cost effective.

Household Item Replacement Costs* Repair Costs*
Clothes Dryer $546 $133
Clothes Washer $543 $103
Refrigerator $1,115 $149
Dishwasher $515 $127
Oven/Range $782 $114
Air Conditioner $2,141 $306
Wall Furnace $2,683 $113
Heating with Ductwork $2,885 $390
Water Heater $761 $92
Main Electrical Panel $651 $210

Professional Service

If you want the job done right a cheap service that does not show up on time and does not do the repairs properly is useless. Checking with the Better Business Bureau is a good idea before buying a home warranty. Our suggestion is to check out Choice Warranty for a free quote.

Do You Qualify for Low Income Housing?

Home ownership is better than renting. Whether you own a house, condo or an apartment the cost is less and in the end you have something that you own, free and clear. Sometimes it is hard to buy a home because of credit issues or a low income. If you are having trouble getting into your own home you may want to consider help with low income housing. Do you qualify for low income housing? HUD.gov provides the government’s definition of those who need affordable housing.

Families who pay more than 30 percent of their income for housing are considered cost burdened and may have difficulty affording necessities such as food, clothing, transportation and medical care. An estimated 12 million renter and homeowner households now pay more than 50 percent of their annual incomes for housing. A family with one full-time worker earning the minimum wage cannot afford the local fair-market rent for a two-bedroom apartment anywhere in the United States.

The HUD web site is a good place to start when looking for rental, home buyer and homeowner assistance. Another useful resource can be found at Low-Income-Housing-Help.com.

Credit Issues or Rent to Own

Sometimes the issue is not so much one of low income but bad credit. If this is the case you may want to work on how to repair your credit score.

A credit score is an attempt to match a number to the likelihood that a person will pay off his debts. Specifically the point is to predict how likely it is that a person will go 90 days past due on his bills, or worse, within the following 24 months.

How can you repair your credit score? First of all you can get a free report and look for mistakes or you can work with someone whose work it is to repair credit scores. If the damage to your credit score is severe you may wish to work with someone who does this sort of work for a living.

A common approach is to get a secured credit card from your bank and routinely pay on time. Over the months and years your credit score will progressively get better. Another approach is to rent to own.

Rent to own is also called rental-purchase. It is a type of legally documented transaction in which tangible property, such as furniture, consumer electronics, home appliances or a home is leased in exchange for a weekly or monthly payment, with the option to purchase at some point during the agreement.

This approach is a more immediate solution to getting into your own home than the sometimes tedious process of improving your credit score.

Getting Helpful Advice

It turns out that there are a lot of resources available if you qualify for low income housing. The problem is finding out where to start and how to most efficiently proceed. Here is where a resource like at Low-Income-Housing-Help.com comes into play. These people help folks like you and me find and qualify for low income housing on a daily basis. Check with them before trying to plow through a lot of government red tape.

Where to Save for Retirement

Many people believe that by the time they retire there will be no social security or that social security will in no way cover their retirement needs. If you are concerned about your later years it is just as important where to save for retirement as how much to put away on a regular basis.

How about Saver’s Credit?

If you simply want to put money away every year toward retirement make sure to take advantage of the retirement savings contributions credit, called saver’s credit. This credit can be obtained through an IRA or your employer’s 401k plan. Money that you contribute up to $2,000 a year is tax deductible and appreciation over the years is not taxed. You may get a matching employer contribution as well with your 401k and you are taxed only when you withdraw funds in retirement when you tax rate is at its lowest. The Motley Fool has a nice article about how save more for retirement in which they explain this.

The majority of Americans save for retirement through their employer’s plan, such as a 401(k). And, the most common 401(k) contribution rate is just enough to take advantage of the employer’s matching contributions. While this is certainly a good way to lower your tax bill and build a retirement nest egg, it may not be enough on its own. With that in mind, here are three things you may not have known about retirement saving that could give you the tools or the motivation to save more.

Tax advantaging your retirement savings is a good first step.

How about the Stock Market?

Too many younger investors and quite a few old ones too saw their portfolios dwindle or even disappear in the 2008 market crash. However, over the long haul stocks outperform most other investment opportunities. Market Watch writes about 8 lessons from market history. It turns out that if you invest and stay invested over the years you tend to make money. And the sooner you start the better it is.

The first 10 years of this century has been regarded as a “lost” decade for stock investors, largely because of large-cap growth stocks and a couple of serious bear markets. But in that decade, a portfolio that was divided equally among these four asset classes (S&P 500 Index fund, large cap stocks, small cap stocks and small cap value stocks) wound up being a moneymaker, with an average gain of 6.7%.

Read the article. It shows how stock investors fared over the years and is a good guide for where to save for retirement.

Home Ownership

Home mortgage interest is tax deductible which is for many Americans the best investment deal they can get. You need a place to live and it is cheaper over the years to own your own home than to rent. And home ownership is a means of forced saving for retirement. Where to save for retirement in this manner makes a big difference however. A young woman in my mother’s family moved to Southern California with her husband in the 1950s where they purchased a home for around $10,000. Meanwhile the president of the bank in her small town in the Midwest built a nice home, also for around $10,000. Fifty years later the woman in California sold her home in California for about $1,000,000 while the heirs of the banker sold Dad’s house in their home town for $10,000. In each case the homeowners benefited from the home mortgage interest deduction and the fact that it is cheaper to buy than rent. But from the perspective of where to save for retirement by owning your own home the girl who moved to Southern California won hands down!

Why You Should Use a Credit Card

The best way to gain credit is to use credit. In the wake of the Great Recession many young people have avoided getting credit cards. In fact, according to Consumer Reports, half of college students aged 18 to 24 have credit cards while ninety percent use debit cards. While you can build credit using a credit card this is not the case with a debit card.

According to a recent survey by Sallie Mae, barely half of today’s college students ages 18 to 24 have a credit card, compared with nearly nine in 10 who say they use a debit card.

While a debit card can be a smart way to avoid the temptation of overspending-and possibly paying double-digit interest rates on balances-it doesn’t help you to build credit history. And young adults need a credit history to become financially independent.

The Consumer Reports article has to do with helping young people build a good credit score but the advice applies to anyone. Our sister site, Consumer Help Dept. wrote about how to fix your credit.

You need to use credit to get credit but you do not have to go into debt. This is about how to get a great credit score without carrying any debt or paying any interest. According to an article in Forbes you can do this without borrowing money.

One of the biggest credit score myths is that having an excellent credit score requires going into debt. For example, Dave Ramsey’s website says that “The only way to have a good credit score is to go into debt, stay in debt, and continually pay your accounts perfectly-without adding too much debt or paying too much off. In other words, stay in debt for as long as you can.” That advice makes it sound like you have to borrow money and pay interest in order to have a good credit score, and that is simply not true.

The author goes on to say that if you routinely use your credit card and always pay the balance in full every month you can get a great credit score in a short period of time and never carry any debt. So long as you pay your credit card balance every month before the due date you will never pay any interest.

Why you should use a credit card is so that you can raise your credit score. Make the purchases that you normally make within your budget using your credit card and then always pay off the balance when the statement comes. This is no different than paying with cash or paying with a debit card except that you get to keep your money for a month until the credit card statement arrives.

Getting Your Credit Back

If you have had financial difficulties you may have a low credit score. The best way to fix this is to get a secured credit card at your bank. You will need to maintain a balance in the bank to cover card expenses so that part works no differently than having a debit card. However, because the billing runs through the credit card company, you will gradually improve your credit, provided that you routinely pay on time just as you would have to do with your debit card.

How to Get Low Cost Internet Access

Nearly everyone seems to have a mobile device with internet access these days. But if you are one of the folks paying for a mobile plan are you paying a fair price or being gouged? Is the service you are paying for too little, too much or just right for your needs. How to get low cost internet access is the key to happy use of your mobile device. The America Genius reports that the FCC has a new “nutrition label” to help consumers choose the right mobile plans. The point is to stop hidden fees from killing you.

Consumerist reports that The Federal Communications Commission (FCC), which receives over 2000 complaints about surprise fees every year, has proposed a new solution to prevent hidden fees and provide consumers with more information when choosing an internet or mobile data plan.

Last year’s Open Internet Order outlined rules requiring broadband providers to be more transparent with information about the costs and performance of their services. To help make it easier for companies to be transparent, the FCC has created a new labeling system that strongly resembles the standard nutrition information labels printed on boxes and cans of food.

The “Consumer Broadband Label” was created by the FCC in collaboration with the Consumer Financial Protection Bureau (CFPB). The idea was to create a standardized label, using clear language, that would make it easy for consumers to make “apples to apples” comparisons of different services. Included in the labels are information about things like monthly charges, additional fees, taxes, average speeds, and data caps.

The goal is give excessive fees no place to hide. The new Consumer Broadband Label is optional. We suggest that when searching for low cost internet access that you only consider plans that offer the clear and easy to understand Consumer Broadband Label.

An advantage for those internet providers who use the new label will be protection from future litigation based on their attempt to make their pricing transparent.

Your Information Has Economic Value

The Federal Communication Commission (FCC) is planning to require internet service providers (ISPs) to ask your permission before using or sharing your personal information. The point is that your browsing history is valuable and retailers will pay good money to add our info to their big data analysis programs. Some of these folks know your tendencies on the internet better than you do based on analysis of your internet browsing.

A good portion of modern marketing and business in general – especially in this digital age – demands that demographic and personal information is passed around. I get it. That’s how sales are made. That’s what makes the world go round. But establishing baseline privacy standards for ISPs seems like a common sense idea.

The FCC is following suit: Earlier this month the FCC announced a proposal that would regulate how ISPs (over which all that data flows) have to get an individual’s permission to collect and share all that juicy, valuable information. And the proposal, as mapped out in an FCC factsheet, has at its foundation is not so much what ISPs can do, as what they have to tell you.

Perhaps one way how to get low cost internet access should be to ask for a kickback for your info as part of the payment package.

Do You Know about the Defects in Your Car?

General Motors knew there was a problem with their ignition switch in as many as 30 million vehicles but drivers had no idea. Because of this flaw and the fact that drivers had no idea about the defect until years later many people died and countless were injured in accidents. Do you know about the defects in your car? First let’s look at the GM issue and then what the Department of Transportation is doing about car defects and consumer awareness. Atlanta reported on the GM ignition switch scandal in January. They provide the details of a death related to the GM ignition switch and how the family proceeded in a product liability suit.

Nine days before her death, General Motors had announced a recall of 1.3 million vehicles, including the Cobalt, due to a power steering issue. Ken found the recall notice in his daughter’s mail after her death.

There is a lot more in the article but we simply point out that the person who died did not receive timely notice of defects in her car. Now what is going on today?

Department of Transportation Notices Online

Consumer Reports tells us that car defect information is now available on the Department of Transportation web site, regardless of whether it has to do with a recall or not.

The Department of Transportation (DOT) will post online all vehicle Technical Service Bulletins (TSB) and any other automaker communications to dealers about defects in vehicles, regardless of whether the defects are the subject of a safety recall.

This move by the National Highway Traffic Safety Administration (NHTSA) shines a light on previously shadowy-and sometimes secret-automaker communications to dealerships about potential automotive safety defects. The move improves consumer safety by enabling government and safety watchdogs to identify vehicle problems earlier.

In addition to all TSBs being posted in a more consumer-friendly PDF format to the DOT’s safercar.gov website, the directive also strongly recommends that the manufacturers submit the information in searchable formats.

The safer car website features information for shoppers, owners and manufacturers as well as a parent’s central page. For more info about kids and car seats see our recent article on the subject.

But Is All Consumer Complaints Being Reported?

All too often a vehicle passes tests and goes into production and it is only when there are problems that issues are spotted. Along the way people complain to their car dealers or the manufacturer. Sadly it appears that major auto manufacturers are misreporting consumer complaints to the National Highway Transportation Safety Administration (NHTSA). Channel 2 Houston reports the story.

Since 2003, car manufacturers have been required by law to inform the National Highway Traffic Safety Administration about claims of car defects made by consumers, including formal written complaints, informal letters, lawsuits and warranty claims.

A government audit found the government is ill-equipped to manage such a system.

On the other side of the equation, several big-name automakers are not complying with federal regulations. Honda and Chrysler were recently fined $70 million each by the Department of Transportation for failing to forward consumer complaints to NHTSA.

Honda’s civil penalty is due to failure to report 1,729 death and injury claims to the NHTSA between 2003 and 2014.

It is sad but apparently not all of your complaints about car defects and safety issues are making it through to the right authorities. Our only suggestion is to persist, consider the attorney general’s office in your state as a resource if your concerns are not being met.

Guess Who Knows Way Too Much about You?

The internet has changed how we connect to each other, how we learn things, how we make purchases and much more. For those who are connected life can be much more efficient, profitable and fun. But, the price we pay for often-free subscriptions to programs that allow us to send emails and text messages, share photos or make online purchases is our personal information. So, guess who knows way too much about you? Last week we asked who is protecting your personal medical information and learned that the FTC (Federal Trade Commission) is taking a tougher stance on consumer health data.

The Federal Trade Commission has been taking a tougher regulatory stance on healthcare information technology in recent years, in an effort to protect the privacy and security of consumer health data. A senior FTC official told Congress on Tuesday that lawmakers can expect to see more of the same.

This is would be reassuring if all personal data collection, storage, use and sale were being policed but there are big gaps in where and whom the FTC goes after and polices. Forbes published an insightful article about consumer privacy protection.

Today, companies are rapidly buying, trading and selling consumer information for online advertising. As business models change, more devices become connected and more information is exchanged online, consumers are inherently at a greater risk of having their sensitive personal data compromised and exploited. A recent study shows that mobile apps often share customer data with third-parties as a way to support free app offerings. Free applications – like Gmail, search, Chrome, YouTube and mapping services from Google – are free because they capture, store and use your private information. Not surprisingly, concerns have been brewing as consumer data are being aggregated and used to create targeted “consumer profiles.”

The problem in this area is that the FCC polices internet service providers (ISPs). These folks are not the big players in data collection, storage, use and sales. The largest quantity of data is collected by Android and Apple encrypted systems into which ISPs cannot see. And the FCC has no authority to deal with this area. Thus some companies that deal in internet information are policed but the majority of companies dealing with the vast majority of data are not. We can hope that the regulatory authority of the FCC will be extended to deal with this lapse but in the meantime what can you do?

Read the Service Agreement

When you sign up for a new online service there is always a service agreement. Most folks get as far as reading that they should not engage in immoral or illegal activity and then skip to the bottom to click “yes.” The problem is that somewhere in the fine print you are allowing them to use your personal information from searches and maybe anything else that they can glean from your internet usage. Very often there is an option to share information or not. If you don’t want these folks knowing everything about you, click NO.

Cookies

No, this is not about chocolate chip, oatmeal or Oreo cookies. According to allaboutcookies.org, in the internet world cookies are

usually small text files, given ID tags that are stored on your computer’s browser directory or program data subfolders. Cookies are created when you use your browser to visit a website that uses cookies to keep track of your movements within the site, help you resume where you left off, remember your registered login, theme selection, preferences, and other customization functions. The website stores a corresponding file(with same ID tag)to the one they set in your browser and in this file they can track and keep information on your movements within the site and any information you may have voluntarily given while visiting the website, such as email address.

If you routinely delete cookies on your browser you will at least put a dent in the ability of these folks to collect your info.


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