Student Loans: Income-Based Repayment, Have You Heard About It?

I don't know, I may be the only one who fears the on-set of student loan repayment like that of the wrath of God. Perhaps I'm a little bitter that my original plan of pursuing a lifetime career as a student, kind of like Lynn from Girlfriends, fell through for the likes of "real-world experience!" However, the reality is for many of us who enjoyed the high-life free-for-all college years, those "priceless" moments came with a hefty price tag. Especially since the powers that be waited until after my graduation year to impose debt caps for how much loan-indebtedness one could accrue for college - oh yeah I got those emails after May 15, 2005 and went postal. Where were those folks when Sallie Mae was staking her claim to my first born, second born and grandchildren for that matter? (Clearly that wound is still open!)

Anyway, as I am taking on adult responsibility like a champ. I, like many of us, pride myself on being an informed consumer of any and all things. I google, ehow to, yelp, bing, hell I even youtube everything I can; I stalk reviews, I ask others - I'm on the constant hunt for information on how to make things BEST work for me...save a dollar here and there. Needless to say, I have been employing all those tactics over the last few months to determine the best way to begin paying my student loans in a manner that won't have me on the fast-track to the poor house. I'll admit, I didn't pay close attention during those pesky exit interviews you have to complete upon graduation, you know to re-sign over your life and soul stating you will pay back what you owe by all means. So now I look at those repayment options with great disdain. The fortunate thing is you can change your repayment plan at any time to suit your needs - of course there will always be fine print so it requires close attention.

As of late, I have been reading more and more about the Income-Based Repayment (IBR) option. It is a new repayment option that opens the opportunity for a more reduced monthly payment on your loans than the current plans. Further for those of us who work in the public sector, there is also the option of loan forgiveness on the remaining balance after 10 years - without the huge tax burden. As with most things there are eligibility requirements and your loan still accumulates interest, so there are some short-term vs. long-term trade-offs to consider before pursuing this option. However, if you are currently struggling to make large monthly payments and need a short-term respite this program may be for you - the literature I have read boasts reducing current payment plans by 50%.

I am not going to pretend to be an expert on this payment plan but wanted to share the information with my readers. There is a new non-profit organization that has formed to create greater awareness of this program: IBR Info (check their website here). Their website has a host of information describing the program, federal updates, a useful IBR calculator to estimate individual payments as well as a great FAQ's page. I hope you find this information helpful, if you have found other information useful that we can share here do not hesitate to pass it on to me and I am happy to share it here.

Happy Wednesday yall!

Getting Your Money Straight

So Friday's post got me thinking further about pursuing one's passion and dreams and how we can better position ourselves to step out there and maximize our strengths and passion. I think a major part of being able to take risks is having a stable foundation - essentially have your 'ish together. While I'm not quoting percentage facts in this sentence, the largest roadblock to pursuing any dream is money - yep them dolla, dolla bills yall. I don't think it takes an economist to tell us that bit.

In the professional world, many business moves are halted on the basis of lack of funding, so it wouldn't be any different that in one's personal world money stands to serve as a major challenge to taking that next step and pursuing one's dream. With all that said, when asked what I would recommend to position one to make that next level move; my answer is "Girl, get your money straight!" (PS - if you have never read that book, check it out). Needless to say I was elated upon receiving a recommendation for a financial management resource that can help identify spending reduction and savings opportunities - all of which come together to help build a nest egg to position you for pursuing your dreams.

A friend of mine and blog reader shared with me a money management resource that she swears by, and my friend's treasure becomes you all's resource. Mint.com is a free, personal money management resource that allows you to upload all of your accounts to better understand your spending habits, investing performance and opportunities, debt reduction opportunities - the whole gamut. Mint even boasts resources for evaluating opportunities with student loan debt repayment (speaking of which, stay tuned for a forthcoming post on the dreaded student loans as well).

Some of you are probably thinking, "well if they're so good, why are they free?" I'm a skeptic like the best of yall, so I read through the website to understand how Mint pays their bills; they function as a referral source. What is a referral source, you ask? Mint essentially uses the analysis of your financial performance and status to recommend to you (the client) different financial management products from banks, investment companies and so forth. If you elect to pursue one of the products, Mint receives a referral fee. So you get a personal finance advisor without the personal finance advisor fees. Don't get me wrong, personal finance advisors are awesome - but for those of us who don't have the funds to pay someone to help us with our money - Mint.com appears to be a great foundational step.

So check out Mint, I am not a spokewoman for it, so I won't be offended if you opt not too! If you are still a little hesitant make sure you read through the website and feel free to thoroughly check their privacy agreement. Also, if you have other financial management tools that you have found helpful please share. Feel free to email me recommendations at elevatortalk2010@gmail.com or post a comment. Spreading the message of financial uplift to realize our dreams.