Obama Administration Raising Awareness for Federal Student Loan Options – Lori Youngston

By on Feb 4, 2013 in Articles, General Tips

This month, the Obama Administration began sending email notices to over three million federal student loan borrowers. The Department of Education is targeting four groups: those whose six month grace period is now ending, borrowers who have fallen behind in their monthly payments, loan holders with a higher than average amount of debt and those who are already in deferment due to financial hardship or because of unemployment. Of particular interest seems to be those borrowers with total loan amounts exceeding $25,000. Everyone in these categories should receive a notice by mid-December.

This push is part of the suggested reforms proposed by President Obama and his Education Department in August of 2013. The purpose behind it is to remind the loan borrowers of the options available under the government’s Income Based Repayment(IBR) programs and to hopefully increase the number of federal student loan holders in those programs. However, it is not the first attempt to encourage student loan borrowers to take advantage of the Federal Repayment Programs.

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The Income Based Repayment Program offers many benefits:

  • Affordable payments based on your discretionary income, not loan size and interest rates
  • If your payment does not cover the accumulating interest on your Direct Loan, the interest will not be capitalized for a period of three years
  • Forgiveness at the end of your term if any balance remains on the loan
  • Payments in the IBR qualify for public service loan forgiveness on a Direct Loan

Despite previous attempts over the last three years, enrollment in one of these programs remains below seven percent of all federal student loans currently in some form of repayment. In fact, overall household debt has increased to $11.28 Trillion according to the Federal Reserve Bank of New York, with student loan debt being almost ten percent of that at $1.03 Trillion. Nearly twelve percent of those student loans are behind in payments for 90 days or more.

This is particularly bad for a still recovering economy. The very people who need to take the risk of starting businesses and begin buying their first cars and homes are unable to do so because of the amount of monthly debt they have. Worse, student loans are not like mortgages and cannot be discharged under current bankruptcy laws and once graduates begin to get behind on their payments, the resulting damage to their credit rating further drags out the time that they are unable to help grow the economy.  All of this drives the President to try and keep these borrowers in the ‘black’ as it were and creating new jobs and start-up businesses. 

Most of this renewed push for Income Based Repayment and other repayment plans is trying to keep borrowers active in this economy. Some of it, unfortunately, is also to combat recent bad attention from the media given to the sometimes shady recovery practices of Sallie Mae and other loan servicing companies.

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While the Education Department is again actively advertising Income Based Repayment, it falls to the loan servicing agencies contracted with the Department to work with the individual borrowers. The problem with this is that it is these same agencies also collect on their own defaulted student loans. It has been pointed out on many consumer advocate websites and by an increasing number of government officials that a loan in default can result in much more money going directly to the loan servicer as opposed to a student loan in good standing. Because of this obvious conflict of interest, many politicians and consumer advocates have questioned the ability of the servicing agencies to remain unbiased in their business practices and operate the different government repayment plans with any transparency.

Even so, the National Consumer Law Center believes that this new spotlight on the repayment programs will be useful in educating borrowers on the Income Based Repayment Program. The trick, in their opinion, will be getting them enrolled. One of their lawyers, Deanne Loonin, stated that “Once somebody knows about it, we need to do a better job of helping people get into the program and stay.” Agreeing with her is the President of College Access and Success, Lauren Asher felt that “This is a positive step towards making sure that people who need to know and might benefit from the income based programs are getting the information they need. We’re happy to see this is moving forward.

Even happier are the student borrowers and their families. Getting more federal student loan borrowers enrolled into Income Based Repayment or another repayment plan helps not only the graduate today, but also the future they intend to create for themselves. Fortunately, the Obama Administration has also recognized that reducing the load of debt and raising the graduate’s credit rating back where it belongs also serves to support the local, state and national economies.

Lori Youngston Headshot Project Done Lifestyle Guest Blogger
Lori Youngston is currently a writer for www.StudentDebtRelief.us whose primary objective is to educate and assist student loan borrowers on the many federal programs available to them, including student loan forgiveness.

 

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Change Begins with Choice – Jim Rohn

By on Feb 4, 2013 in Articles, General Tips

I’ve shared some of Jim Rohn’s articles before, and after reading this one, I knew I had to share it with you, too! He has such a great outlook on success and what motivates and inspires me. Every week I receive his email newsletters and I am always excited to see what he has to say next. Get your own subscription here! (Also, for more great tips, like him on Facebook)

Jim RohnAny day we wish, we can discipline ourselves to change it all. Any day we wish, we can open the book that will open our mind to new knowledge. Any day we wish, we can start a new activity. Any day we wish, we can start the process of life change. We can do it immediately, or next week, or next month, or next year.

We can also do nothing. We can pretend rather than perform. And if the idea of having to change ourselves makes us uncomfortable, we can remain as we are. We can choose rest over labor, entertainment over education, delusion over truth, and doubt over confidence. The choices are ours to make. But while we curse the effect, we continue to nourish the cause. As Shakespeare uniquely observed, “The fault is not in the stars, but in ourselves.” We created our circumstances by our past choices. We have both the ability and the responsibility to make better choices beginning today. Those who are in search of the good life do not need more answers or more time to think things over to reach better conclusions. They need the truth. They need the whole truth. And they need nothing but the truth.

We cannot allow our errors in judgment, repeated every day, to lead us down the wrong path. We must keep coming back to those basics that make the biggest difference in how our life works out. And then we must make the very choices that will bring life, happiness and joy into our daily lives.

And if I may be so bold to offer my last piece of advice for someone seeking and needing to make changes in their life: If you don’t like how things are, change it! You’re not a tree. You have the ability to totally transform every area in your life. And it all begins with your very own power of choice.

What I’m Reading: February & March Recap

By on Feb 4, 2013 in Articles, General Tips

I love sharing articles with my readers throughout Social Media. These are just a few blog posts and articles that I’ve come across and benefitted from by reading and I feel like you might, too. I’d like to invite you to follow me on Twitter via@AngelaSheuerman to be the first to see these great and helpful posts, and so much more!

Cleaning Out The Garage: 15 Steps to an Organized Garage via Consider It Organized {15 simple steps to better organize your garage and allow you to actually park your car where it belongs!}

Organize your bag: Find things easily and reduce back pain via Unclutterer {Who DOESN’T carry too much stuff in their bag?? Check out this blog post – it might help reduce the weight!}

Success is Easy, But So is Neglect via Jim Rohn {So inspiring to receive Jim’s newsletters every week. He has such a great outlook on success and what motivates and inspires me.}

Being Organized Puts More Money In Your Pocket via Basic Organization {Organize your finances. Find an effective bill paying system. Make sure you no longer deal with duplicates, and DON’T wait until the last minute! Loved this blog post!}

What are YOU reading? I’d love to read them, too. Share the links to your new favorite blog post in the comments section below!

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Success is Easy, But So is Neglect – Jim Rohn

By on Feb 4, 2013 in Articles, General Tips

I’ve shared some of Jim Rohn’s articles before, and after reading this one, I knew I had to share it with you, too! He has such a great outlook on success and what motivates and inspires me. Every week I receive his email newsletters and I am always excited to see what he has to say next. Get your own subscription here! (Also, for more great tips, like him on Facebook)

Jim RohnPeople often ask me how I became successful in that six-year period of time while many of the people I knew did not. The answer is simple: The things I found to be easy to do, they found to be easy not to do. I found it easy to set the goals that could change my life. They found it easy not to. I found it easy to read the books that could affect my thinking and my ideas. They found that easy not to. I found it easy to attend the classes and the seminars, and to get around other successful people. They said it probably really wouldn’t matter. If I had to sum it up, I would say what I found to be easy to do, they found to be easy not to do. Six years later, I’m a millionaire and they are all still blaming the economy, the government, and company policies, yet they neglected to do the basic, easy things.

In fact, the primary reason most people are not doing as well as they could and should, can be summed up in a single word: neglect.

It is not the lack of money – banks are full of money. It is not the lack of opportunity – America, and much of the free World, continues to offer the most unprecedented and abundant opportunities in the last six thousand years of recorded history. It is not the lack of books – libraries are full of books – and they are free! It is not the schools – the classrooms are full of good teachers. We have plenty of ministers, leaders, counselors and advisors.

Everything we would ever need to become rich and powerful and sophisticated is within our reach. The major reason that so few take advantage of all that we have is simply neglect.

Neglect is like an infection. Left unchecked it will spread throughout our entire system of disciplines and eventually lead to a complete breakdown of a potentially joy-filled and prosperous human life.

Not doing the things we know we should do causes us to feel guilty and guilt leads to an erosion of self-confidence. As our self-confidence diminishes, so does the level of our activity. And as our activity diminishes, our results inevitably decline. And as our results suffer, our attitude begins to weaken. And as our attitude begins the slow shift from positive to negative, our self-confidence diminishes even more… and on and on it goes.

So my suggestion is that when giving the choice of “easy to” and “easy not to” that you do not neglect to do the simple, basic, “easy”; but potentially life-changing activities and disciplines.