Student loans have become an increasingly controversial topic in the news, what with the high delinquency rate and the repayment hurdles set by loan servicers. But they still remain one of the most viable options for those who want to pursue higher education but lack the funds to do so. In many cases, taking out a student loan creates opportunity for those with lower incomes and allows them to benefit from higher education.
But what if student loans aren’t being used for just educational expenses? The Wall Street Journal recently published a revealing article spotlighting what could be an alarming trend: borrowers taking out student loans with the sole purpose of paying for living expenses like bills or groceries. And it doesn’t appear to be just for the occasional pizza to fuel a borrower towards graduation – some of the loans are being taken out without intent to attain a degree.
Life is often full of surprises and with that uncertainty comes financial ups-and-downs as well. Emergencies can pop up and ruin your budget or make your savings account run dry. These hard times can be attributed to unemployment, a financial emergency, a big change in your personal life, like a job or a divorce.
And unfortunately, your bills still have to get paid. Because of this you could find yourself in a tough spot financially.
So what happens when you get down on your luck and can’t pay your bills? Use these quick steps to get your money back on track
One of the biggest student loan servicers in the U.S is multiplying into what will likely become two of the biggest student loan servicers. If Sallie Mae didn’t already scare you, it might now.
In May of 2013 Sallie Mae announced that it would be splitting into two companies but kept some of the details under wraps. Now, it’s released more information on the eventual split, including the name of the yet to be created company. Straight from the Sallie Mae press release, choosing the name was just “another step toward the successful completion of Sallie Mae’s plan to separate later this spring into two, publicly traded entities: a consumer banking business and the newly named loan management, servicing and asset recovery business.” So what will the new Sallie Mae offshoot be called? Navient.
Every month we check in with a group of individuals who are dedicated to paying off their debt and reaching financial freedom. They share their ups, downs, and in-betweens in our ongoing series, The Debt Destroyers. The added accountability is a great way to add motivation to a repayment plan and an inspiring way to see the positive impact of even small changes.
So how did the Debt Destroyers do over the month of February? Read on for their monthly update!
At ReadyForZero we strive to always be available and accountable to our users. That’s why we personally respond to every e-mail that’s sent to our support inbox and why we have pictures on the About page. Now we’re sharing our stories here so you can get to know the fun and diverse people that are working hard everyday to make ReadyForZero better. We hope you enjoy these interviews – and don’t forget to share your thoughts in the comments below!
We’ve met the team members – now it’s time to meet the fearless leader of the pack! From an impressive start to an even more impressive journey, CEO Rod Ebrahimi has a genuine passion to help people and a strong drive to solve problems. Read on to find out more about ReadyForZero’s Co-founder & CEO!
You hear a lot about saving money in the personal community. Ways to cut costs here or save on expenses there. But increasing your earnings over time is also an important part of a successful financial plan! And what better way to boost your income than looking for ways to boost your career? That can mean adding an extra source of income, pushing for the promotion you deserve, or even redirecting your professional path. If you want to continue building your wealth, focusing on ways to nurture your career is an excellent place to start.
Frequent fliers – take note. Your rewards are on the line as major airline Delta overhauls the way that they measure and award miles to their rewards members. The airline recently announced that it would be changing the rules for how rewards miles are doled out to its members. Whereas before, miles were awarded based on the physical length of the journey, Delta will now award miles based on the dollar amount of the ticket.
Full disclosure: Like many of our readers, I’m a student loan borrower. And even though I’m only a few years into my repayment for $23,000 of student loans – I’m already sick of it. Aside from student loan payments sucking up much of my extra income, seeing my monthly student loan bill is a constant reminder of just how much farther I have to go before I’m debt free. Seeing that far-distant debt free date is aggravating, so I think I speak for many when I say: ARRGH.
Nope, unfortunately the biggest expense isn’t pie as the above photo suggests (though food does take up a significant part of the budget). If you’re like most other Americans, housing and transportation are the top two expenses – and by quite a bit. Nearly 50% of the average American’s income is being put towards housing and transportation costs.
Prior to the Great Recession, it was fairly easy to buy a home with no down payment. But the mortgage crisis and the financial crisis shook things up a bit. Credit requirements — especially for home loans — tightened substantially.
Many home buyers began turning to FHA loans (which require as little as 3.5 percent down as of this writing) once the number of zero-down mortgages began drying up.
Now that the Great Recession is fading away, things are changing again. Just as many home buyers thought that the FHA loan required a too-high down payment prior to the mortgage market problems, that mindset is creeping back – since it’s possible to find zero-down home loans again. Just remember, if you do get a mortgage, make a plan for how you’re going to pay those payments and track your plan using a tool like ReadyForZero.