Student Loan Payment Changes During COVID-19

With unemployment levels rising and many employers cutting work hours, large numbers of college grads are now struggling to meet their student loan payments. Thankfully, the federal government has passed legislation to help ease this burden. However, many borrowers are confused about the terms and conditions of these changes. Here’s all you need to know about changes to student loan debt due to the coronavirus pandemic.

All federal student loan payments are automatically suspended for six months.

As part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) signed into law on March 27, 2020 – all federal student loan payments are suspended, interest-free, through September 30, 2020. If borrowers continue making payments, the full amount will be applied to the principal of the loan. The suspension applies to all federal student loans owned by the Department of Education, some Federal Family Education Loans (FFEL), as well as some Perkins Loans. Students do not have to take any action or pay any fees for the suspension to take effect.

Additionally, during the suspension period, the CARES Act does not allow student loan servicers to report non-payments as missed payments to the credit bureaus. Therefore, the suspension should not have a negative effect on borrowers’ credit scores.

If you’re not sure whether your student loan is federally owned, you can look it up on the Federal Student Aid (FSA) website. Be sure to have your FSA ID handy so you can sign in and look up your loan. You can also call your loan servicer directly as well.

Contact information for federal student loan servicers:

CornerStone: 1-800-663-1662

FedLoan Servicing (PHEAA): 1-800-699-2908

Granite State (GSMR): 1-888-556-0022

Great Lakes Educational Loan Services, Inc.: 1-800-236-4300

HESC/Edfinancial: 1-855-337-6884

MOHELA: 1-888-866-4352

Navient: 1-800-722-1300

Nelnet: 1-888-486-4722

OSLA Servicing: 1-866-264-9762

ECSI: 1-866-313-3793

Suspended payments count toward Public Service Loan Forgiveness and Loan Rehabilitation. 

Public Service Loan Forgiveness (PSLF) is a federal program allowing borrowers to have their student loans forgiven, tax-free – with the stipulation that they work in the public sector and make 120 qualifying monthly payments. A disruption of these 120 payments would typically disqualify a borrower from the program. According to the CARES Act, suspended payments will be treated as regular payments toward PSLF. This ensures that borrowers who have been working toward these programs will not lose the progress they’ve made toward loan forgiveness.

The same rule applies to individuals participating in Student Loan Rehabilitation, during which borrowers who have defaulted on student loans – must make 9 out of 10 consecutive monthly payments in order to bring their loans out of default. The U.S. Department of Education will consider the six-month suspension on payments as if regular payments were being made toward rehabilitation.

Some states and private lenders are offering student loan aid for struggling borrowers.

If your student loan is not federally owned and you are struggling to make your payments, there may still be options available – such as loan deferment or forbearance. If you are in need of such assistance, contact your lender directly to discuss your options.

Consider an income-driven repayment plan.

If you have an FFEL that is ineligible for suspension, you may be able to lower your monthly payments by enrolling in an income-based repayment plan. This would adjust your monthly student loan payment amount according to your discretionary income. If your salary was cut as a result of COVID-19, or you are currently unemployed – these plans can provide relief by making your monthly payments more manageable.

Still have questions about your student loan payments during this time? It’s always a good idea to reach out to your lender and find out what options are available to you.

Article Source: CUcontent.com

Should You File for Bankruptcy?

Your debt feels impossible. New bills and past due notices are showing up constantly. Creditors won’t stop calling. As you feel like throwing your hands in the air, you wonder – should I file for bankruptcy?

Due to the COVID-19 pandemic, this is a reality that many might be facing. Millions of Americans across the country have been unemployed since earlier this year. It’s incredibly easy to get behind on bills when the money isn’t coming in, but the bills are still showing up. It’s an overwhelming feeling.

The longer this pandemic continues, the more likely it is that you’ll see an attorney on a TV commercial asking if you’re thousands of dollars in debt, feeling overwhelmed by creditors and looking for a solution. Next – they’ll present the option of filing for bankruptcy, which who wouldn’t want to have their debt forgiven, right? Not so fast.

Filing bankruptcy might help you get rid of your debt, but it’s important to understand the serious, long-term effects it can have on your credit. When you file bankruptcy, it remains on your credit report for 7-10 years as a negative remark, and it affects your ability to open credit card accounts or get approved for loans with favorable rates.

What exactly is bankruptcy? Bankruptcy is a legal process designed to help individuals and businesses eliminate all or part of their debt, or in some cases – help them repay a portion of what they owe. There are several types of bankruptcy, but the most common types are Chapter 7, Chapter 11 and Chapter 13.

Chapter 7 forgives most of your debt and allows you to keep all of your assets with a few exceptions, depending on state and federal laws. During the process, you and your creditors are invited to a meeting where they are allowed to make a case as to why a federal bankruptcy court shouldn’t forgive your debt. Once your case is approved, your debt will be forgiven, and none of your creditors will be allowed to hassle you over the forgiven debt.

Chapter 11 is generally for small business owners. It allows small business owners to retain their business while paying back debts according to a structured plan. With this option, business owners give up a certain amount of control to court officials, debtors, or counselors assigned to help them rebuild their credit. Despite losing some control of the business, owners are able to keep their business running while working on their financial future.

Chapter 13 is different than Chapter 7 in that it requires you to come up with a plan to repay your creditors over a 3-5-year period. After that, your debt will be forgiven.

Things to consider if you’re thinking about filing bankruptcy:

It’s important to note the serious impact bankruptcy can have on your credit report. Bankruptcy effectively wipes out everything on your credit report – good and bad remarks, and will stay on your credit report for 7-10 years.

This also means any account you’ve paid off or left in good standing that could positively impact your credit score, is also wiped out. Any hard work you’ve put into building your credit is basically nonexistent once you file bankruptcy. All the negative remarks will be gone as well, but you will also be considered high-risk when it comes to lending moving forward.

Bankruptcy affects your ability to open lines of credit – credit cards, mortgages, auto loans, personal loans, etc. Because you will be labeled high-risk, most banks will likely deny any application you submit for a line of credit – even though your credit score might have gone up when your credit report was initially wiped out. If you are approved for a line of credit, you’ll likely get a much higher interest rate which will make your monthly payments higher too.

Should you file for bankruptcy?

When it feels like your debt is caving in on you, bankruptcy might seem like the only way to reach financial peace. Here are a few steps to consider taking before you consider filing.

  • Take a moment to talk to your creditors. Negotiate and see if there are options to make your debt more manageable. Can you lower the interest rate? Is it possible to settle for less than you owe? Can you set up a payment plan?
  • Talk to us about your financial picture. We might have options that will allow you to consolidate your debt into one, more affordable payment.
  • Go through your house. Do you have things you don’t use or need that you can sell? If so, sell some of those items and apply that money to your debt.

Also, it’s important to note that not all debt is eligible for bankruptcy. While bankruptcy can eliminate a lot of your debt, some types of debt cannot be forgiven:

  • Most student loan debt.
  • Court-ordered alimony.
  • Court-ordered child support.
  • Reaffirmed debt.
  • A federal tax lien for taxes owed to the U.S. government.
  • Government fines or penalties.
  • Court fines and penalties.

Bankruptcy should be the last option you consider. Look through your debt, see what you owe and carefully weigh all your options. Again, make an appointment to come in and talk to us and we can help you review your options. We’re your credit union, and we’re here for you!

5 Ways Being Home Can Save You Money

As the public health emergency continues, what are you up to these days – working from home? Taking fewer trips? Eating at home more? Chances are, you’re probably saving money on gas and your usual food tab.

Hopefully, there are other areas where you’ve been able to save money as well. Check out these tips below that can help save you money whether you’re quarantined or not!

Unplug It

How many devices do you leave plugged in during the day? Did you know that even in standby mode, any electronic device that is plugged in will still suck energy?

Energy.gov reports that “an appliance constantly taking in 1 watt of electrical current is equivalent to 9kWh per year, adding up in annual costs (basically $1/watt/annual). Considering how many appliances are used in an average household, costs can quickly add up to $100-200 a year.”

If you’re not using it, unplug it. Or, use a power strip that can be turned off. It’ll save you money in the long run!

Save Water

You might be tempted to throw half a normal load of wash in, but first ask yourself – are there enough dirty clothes to make it worth it or do you have an energy efficient load sensing washing machine? Another tip to conserving energy is washing in cold water when you can, since the majority of your machine’s energy consumption happens when it needs to heat the water.

While you’re home – conserve water by taking shorter showers. If each member of your family reduces their shower time by 3 minutes, you’ll save about $100 a year on your water bill.

Check Your Policies

You’ve probably seen the car insurance commercials advertising a credit to customer accounts. Check into that. Give your insurance company a call or check your account online. Most companies are giving their customers a 15 percent credit because they aren’t driving as much. In some cases, customers are getting a $150 credit added to their policy for the duration.

Don’t sleep on the chance to save some money on your auto insurance. While you’re at it, check on your other policies and accounts. You might find other places offering a similar discount to help out their customers.

Cool It Now

What is your thermostat set on? If you’ve adjusted your thermostat during the day now that you’re working from home more, you might want to tweak that a bit to offset the cost.

Find Your New Normal

We’ve all said it – “when things get back to normal.” But now we’re all in the position to redefine what normal looks like for us. Take a moment to reevaluate your priorities and budget. Are their unnecessary subscriptions you can cut? Is there a magazine, streaming service or even gym membership that is no longer valuable because you’ve found an alternative? If so, cut those from your budget and save some money each month.

Article Source: https://www.schlage.com/blog/categories/2020/05/5-ways-to-save-money-at-home.html

 

Financial and Preparedness Tips for Summer Roadtrips

Amidst the Coronavirus pandemic, as bigger trips get cancelled and flights are limited – some may be considering road trips to other states as this year’s family summer vacation. While the CDC still urges limited travel, those who decide to take a roadtrip should consider the following before hitting the road:

  • What’s actually open? Planning is especially important this summer because many state parks and businesses in certain states may still be closed. Do your research ahead of time.
  • Face masks – Bring one for every passenger, and wear them in public. Even places where it looks like social distancing is in force can become crowded in a hurry.
  • Call ahead – Be sure to confirm any potential restrictions for where you are traveling.
  • Call the hotel – If you plan to stay overnight at a hotel, call ahead to make sure it is still open and will have rooms available.
  • Stop early and often for fuel and breaks, just in case. Check online to see which state-run highway rest stops are open and which facilities are operational.

Auto Maintenance Tips for Traveling by Car:

  • Bring your own protective equipment – This includes gloves for pumping your own gas, paper towels, disinfectant wipes, hand sanitizer, and toilet paper. Some gas stations/rest stops may be limited in what they have available, so be sure to bring your own just in case.
  • Prepare in advance – Be sure to stay up to date on oil changes and have your tires checked before you go. Also check your windshield washer fluid level, coolant, light bulbs, battery life and so forth. Book a service appointment for your vehicle prior to leaving.
  • Do you have a roadside assistance plan? If not, you may want to enroll in one before your trip.

Packing and Preparedness Suggestions:

  • Don’t overload your car, and store the heaviest items low (or opt for a rooftop cargo carrier).
  • Be sure to bring a car phone charger, basic tools, road flares, a flashlight, spare tire and changing kit, and jumper cables.

Did you know that First Financial’s mechanical repair coverage can help you limit out-of-pocket costs should you ever have a covered breakdown? Be sure to check it out before you hit the road this summer. To research, compare, and buy Mechanical Repair Coverage, visit creditunion.forevercar.com/firstffcu or call 855.927.0224

*Mechanical Repair Coverage is provided and administered by Consumer Program Administrators, Inc. in all states except CA, where coverage is offered as insurance by Virginia Surety Company, Inc., in WA, where coverage is provided by National Product Care Company and administered by Consumer Program Administrators, Inc., in FL, LA and OK, where coverage is provided and administered by Automotive Warranty Services of Florida, Inc. (Florida License #60023 and Oklahoma License #44198051), all located at 175 West Jackson Blvd., Chicago Illinois 60604, 800.752.6265. This coverage is made available to you by CUNA Mutual Insurance Agency, Inc. In CA, where Mechanical Repair Coverage is offered as insurance (form MBIP 08/16), it is underwritten by Virginia Surety Company, Inc. Coverage varies by state. Be sure to read the Vehicle Service Contract or the Insurance Policy, which will explain the exact terms, conditions, and exclusions of this voluntary product.

Article Source: Patch.com

Why Haven’t I Received a Coronavirus Stimulus Payment Yet?

Does everyone you talk to seem to have received their stimulus money already, but you’re still waiting for your payment to arrive?

More than half of eligible Americans have already received their Economic Impact Payment, but tens of millions more are still waiting. Here’s when you can expect yours, how to help it arrive quicker, or why you may not be receiving a stimulus payment.

The Schedule for Issuing Payments

The IRS is trying to get stimulus payments out to Americans as quickly as possible, but with approximately 150 million checks that need to be issued – it will take some time.

First, the IRS is working on getting the funds to Americans via direct deposit. Most of the payments being issued to people whose account details are known by the IRS have already been distributed, and the rest are scheduled to be deposited as the information is obtained.

Next, the IRS will send payments for individuals currently receiving federal benefits, such as Social Security checks, retirement or disability benefits, Railroad Retirement benefits, Supplemental Security Income (SSI) or Veterans Affairs (VA) benefits. The stimulus payments will be issued the same way these individuals receive their regular federal benefits – whether by direct deposit, Direct Express, or paper check. The Treasury has promised that all Social Security and Railroad Retirement beneficiaries will receive their benefits earlier in May. SSI and VA beneficiaries should get their payments by mid-May.

On April 24, the IRS began issuing paper checks to Americans who had not provided their banking details. Lower-income Americans were prioritized, and individuals earning an adjusted gross income (AGI) of $10,000 or less should have already received their checks. The IRS will then begin sending out approximately 5 million paper checks each week, scheduling the mailings according to incomes in increasing $10,000 increments. For example, checks for individuals with an AGI that falls between $20,000 and $30,000 were mailed out on May 1. On May 8, the checks for those with incomes between $30,000 and $40,000 will be mailed out. This schedule will continue through September 4th.

How Can My Stimulus Money Get Here Quicker?

The IRS will use your most recently filed taxes to determine where to send your stimulus money and the amount you are eligible to receive. If your most recently filed returns have not yet been processed, or you’ve received your refund by paper check, the government does not have your checking account information and your payment may be delayed.

You can update this information on the track my payment portal on the IRS website. You will need your Social Security Number, the gross income of your most recent tax returns, your bank routing number and your checking account information. Once you’ve shared your account information, your stimulus payment should be scheduled for deposit within the week.

If the IRS already has your account information and you still have not received your stimulus money, or you would prefer to receive your payment by paper check, you can track your payment on the same link. The site is updated once a day.

What if my Information has Changed Since I Filed my Last Tax Return? 

If the checking account used for your most recently filed taxes has since been closed, the payment will bounce back to the IRS, and they will send a paper check to the home address on file from your tax returns.

To update a checking account, use the IRS payment portal to enter your current information.

If you’ve moved since filing taxes, you can choose to update your address information with the IRS, or use another method which may include informing the U.S. Postal Service of a change of address.

What if I Don’t File Taxes?

If you are not required to file taxes and you are eligible for an Economic Impact Payment, you can still receive your check. Just enter your information here.

Why You May Not Qualify for a Check 

The CARES Act does not promise payments for every American. Dependents older than 16, individuals who do not have a Social Security Number and those with an AGI above $99,000, will not be getting a stimulus payment. The threshold is higher for individuals filing as a head of household at $136,500, and up to $198,000 for joint filers.

Watch Out for Stimulus Scams

While the IRS urges people to update their information on the payment portal, it’s important to note that they are not reaching out to individuals. If you receive a phone call, social media post, email or text message asking for your personal financial information, it is a scam. There is also no application fee or processing fee for Economic Impact Payments. If you’re asked to pay one, it’s also a scam. Be diligent and stay financially safe and healthy!

Article Source: CUcontent.com

Costs You Can Cut to Save Money During the Pandemic

If you’ve been affected by COVID-19 due to unemployment or reduced hours (or even if you haven’t been affected in this way), it’s extremely important to focus on saving money and not spending money on items that are not absolutely necessary during this time.

Here is a list of suggested items you may want to consider cutting out during the Coronavirus pandemic:

  • Subscriptions – You might be stuck at home, but if paying for a multitude of subscription services like Hulu, Netflix, Amazon Prime, Disney Plus, and the like are strapping your monthly budget, it’s time to temporarily suspend them. Or, if there’s one you use more so than some others in particular – keep one subscription service you are actually using.
  • Gym membership – More than likely your gym has been closed for the past two months, are you still paying for a facility you haven’t been able to use and may not be able to use for some time? See if you can have a hold placed on your membership, or if you can cancel and take advantage of exercising outdoors in the nice weather or utilizing free online workouts instead.
  • Services you can DIY – If you’re home on a daily basis, are you still paying for a lawn mowing service or yard maintenance? If so, this might be something you want to consider tackling yourself to save on monthly bills. Plus – you’ll get to enjoy the sunlight and fresh air.
  • Expensive cable packages – If you are paying for extra sports channels that aren’t even showing any sports right now because they’re cancelled, or premium channels like HBO and Showtime – call your cable company and temporarily suspend them. Anything you can do to make your bill less during this time is advisable. If you can cut out cable TV altogether and just pay for one streaming service, even better. Also, try not to order on-demand movies either during this time. That will continually make your monthly bill increase. Instead, see what free movies might be available.
  • Non-essential food expenses – Cooking at home is a big money saver. If you are continually having food delivered or buying takeout for your meals, costs can really add up. If you can, try to cook your meals at home and only order takeout once in awhile for a special treat on a weekend.
  • Shopping – While retail stores and malls are closed, you may instead be doing a lot of online shopping these days. Even if an online retailer is having a sale, is the item something you really need? Really evaluate all your expenses before you click “add to cart.”
  • Driving around – You might be itching to get out of the house, but driving around and burning through gas is going to eventually add up. Unless you have to get in your car to go to work or to an essential business, walking or jogging outside on a nice day is a much cheaper option.
  • Vacation fund contributions – If you’ve been saving money toward planning a trip, pause it for now. Since traveling is out of the question for the near future, put these contributions into an emergency savings account instead.
  • Seasonal memberships – Take a look at what might be coming up that you won’t be able to participate in like usual (swim club, sports season, theme park, etc). Make sure you aren’t being automatically billed for events you won’t be able to partake in this spring and summer.
  • Gifts – Since celebrations have been put on hold, take the funds you would have spent on them and put it in your emergency savings account.
  • Bottled water – This is a nice to have, but definitely not a necessity. You’ll save a great deal more money by making a one-time purchase on a refillable filtered water pitcher.

By reducing expenses of non-essential items, you can increase the amount you save to make sure you’re still able to pay your bills or have some money in savings if you need it. The last thing you want to do in a financial environment like the current one we are in, is to put yourself in debt. Stay financially safe and healthy!

Article Source: Gabrielle Olya for Gobankingrates.com