education & money – shemakescents (2024)

The government or more specifically the Consumer Financial Protection Bureau (CFPB) filed a lawsuit against Navient, the nation’s largest student loan service provider last week. Navient is the twin sister to the head of the student loan mafia, Sallie Mae, Inc. that services the loans of more than 12 million borrowers, including my own. As a loan service provider, they manage borrowers’ accounts, process monthly payments, and communicate directly with borrowers. The suit was filed on January 18^th with another following just days before the transition of presidential power.

According to the CFPB Director, Richard Cordray, “Navient chose to shortcut and deceive consumers to save on operating costs. Too many borrowers paid more for their loans because Navient illegally cheated them and today’s action seeks to hold them accountable.” Some of the most pressing allegations include failing to correctly apply or allocate borrower payments to their accounts, steering struggling borrowers toward paying more than they have to on loans, obscured information consumers needed to maintain their lower payments and deceived private student loan borrowers about requirements to release their co-signer from the loan.

What That Means for You?

If this lawsuit is successful, consumers affected by Navient’s alleged misdoings may receive some monetary restitution. Don’t get too excited yet. This is not a class-action suit that you can sign up for. According to ClassAction.org, “Attorneys usually find out those who were affected by looking at the defendant’s records in a phase of the litigation known as the discovery phase. People who could be covered by the suit are usually sent a notice or check in the mail. The agency that filed the lawsuit will also have information on their website about the suit and who can claim money in the event of a settlement”.

People are living longer nowadays, which means that it is more important than ever to get aggressive about saving for the future. While everyone’s vision for retirement varies, there is still an underlying need for basic expenditures. The cost of living is steadily increasing and as most people approach retirement, they are stunned when their new normal is a reduced fixed income. Not saving now could cost you peace of mind in the future. So let’s get our financial Zen on, together!

When most people hear the words “retirement plan”, their minds immediately go to a 401k plan. While it is the most talked about, it certainly is not the only option for retirement. Today, I’d like to introduce you to the 403(b) plan. A 403(b) plan is a retirement plan offered to employees of tax-exempt organizations that fall under the code 501(c)(3), like schools, churches, and hospitals. If you are eligible to participate, I would highly recommend that you do.

ADVANTAGES of a 403(b) Plan

1. Your contributions toward your 403(b) are pre-taxed. Meaning your contribution reduces your current income and the amount you owe in current income taxes.

2. All contributions and earnings are tax deferred, which presents you with tax savings since most people are in a lower tax bracket at the time of retirement. This is another instance where time is on your side because the sooner you start to make contributions, the faster your money will grow.

3. Similar to a 401k, employers are able to match contributions. 403(b) contributions must be made through a salary reduction agreement with an employer, even though your company does not directly administer them.

4. Hardship withdrawals can be made. While hardship withdrawals can be made, I would highly recommend this as a last resort option. You must prove that you are experiencing extreme financial distress and the money must be used to cover expenses such as medical bills, tuition fees, or in the event of an eviction or foreclosure. Just remember that you are only allowed to withdraw the exact amount needed and that the money will be taxed as income.

People who are eligible for this type of retirement plan are ones who make a living being of service to others. If you qualify for a 403(b), be of service to yourself and your financial future, by getting serious about your plans for retirement. They say the older you get, the faster time passes. Don’t miss out on your opportunity to make time and youth work for you.

This article was originally posted on the Feex Blog

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One reason that I have over $20,000 in student loans is because I chose to attend Spelman College, one of the nation’s top liberal arts colleges and #1 ranked HBCU. I was offered full music and academic scholarships during my senior year of high school to other colleges and turned them down to attend a school Forbes ranks among the nation’s top ten best women’s colleges. I got a little “something something” based on my academic achievements, but when everyone beside you is a Valedictorian and Salutatorian of their high school class, just being in the top 5% isn’t really scholarship worthy. While I know my parents supported whateverdecision I made, I am sure on some level my Dad’s wallet would have been very okay with a FREE education, elsewhere.

Why I ♥ Spelman

Making the choice about where I would attend school was the first major decision that I ever made for myself. Itmarked the transition fromchildhood to adulthood and helped shape the course of not only my career, but also my life. In the end, I did not even consider the price of tuition (estimated $120,000)because I knew without a doubt, that Spelman was the right place for me. From the moment I walkedonto the campus, so many beautiful, intelligent, and diverse women from around the world welcomed me. For the first time, I was “at home” in an academic space where standards and honor are raised.

Why I Give Even When I’m Saving

Earlier in my matriculation,I noticed the presenceand pride of the alumnae. I was told that I was standing on the shoulders of greatness, hard work, and those who came before me. Now is my time to help provide opportunities that help prepare the next generation of women who will change the world. Dr. Beverly Daniel Tatum acknowledges in the 2012-2013 Report of Philanthropy that “a college education is a privilege.” According to Tatum, “We live in challenging times when educated women are needed more than ever. The generosity of alumnae, corporations, faculty, friends, foundations, parents, staff, andour current students has secured vital financial support to developthesechange agents. [Spelman] appreciates your contributions to scholarships, facility, renovations, innovative initiates such as Wellness Revolution, faculty and student research, and support of Spelman’s Annual Fund- all of which are critical for Spelman women to succeed.” Yes, I have financial goals and a financial plan; but there is nothing like going back and seeing the women who are now standing on my shoulders and in need of support. Giving back doesn’t always have to be in the form of financial contribution, however, I do highly recommend it. Every year, Spelman announcesa goal for it’s Every Woman Every Year campaign. This year’s goal, like the year before, is to surpass 50% alumnae participation or 8,667 alumnae donors by April 11, 2014, the 133rdAnniversary of Spelman’s founding. I make my contribution every year on this dateand charge every Spelman alumna to show the impact of her voice, by making a contribution to Spelman in honor of our founding.If you don’t give back to your school, I encourage you to do so. If we don’t invest in where we came from, how can we expect anyone else to?

Happy Founder’s Day Spelman College

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Education Is Not A Debt Sentence!

The opening date for FASFA is just around the corner and a reminder that it’s time to cough up some money for next year’s tuition. Gosh, I have been out of college for almost seven years and I am still paying for my education. I respectfully declined a full music scholarship and a full academic scholarship from a well-known school once I got an accepted to thenumber one HBCUin the country, Spelman College. Although my premium education came at a hefty price tag, I still believe it was one of the best life decisions I have made thus far. No matter how you look at it, college is expensive and the inflation for tuition fees is increasing at an alarming rate.As an result of the yearly increase, parents and students alike aregetting creative in how they pay for higher education. According to the US Department of Education, the average annual cost of public school increased 6.5 percent each year over the last decade. That means that by 2030, annual public tuition will be $44,047 and the total cost for a four-year degree will be more than $205,000. I don’t even have children and that number makes my head hurt…especially when I hope that my hypothetical future daughter will continue the Spelman College legacy. If the price of a four-year degree from a public institutionis projected to cost almost a quarter of a million dollars, thenI can only image how much a private college will be. You need to get an education to make more money, but you can afford topay for the education; hence the newest Debt Crisis No One Is Talking About.Grants and scholarships are the best ways, in my opinion,to pay for your education because you don’t have to pay them back. If grants and scholarships aren’t an option for you, your child, or any student you know who is struggling to fund their education, maybe one of these options will work!

A 529 plan is a college savings plan sponsored by a state or state agency for anyone with a Social Security number or a Tax ID. Money saved under a 529 Plan can be used for education-related expenses like tuition, books and room and boardfor most US schools and select schools abroad.According to ClarkHoward, another one of my favorite money gurus, “529 plans must be sponsored by a state even though residents of most states can put their money in any state plan. Just because you invest in the plan of a state where you don’t live, that doesn’t mean your child will have to eventually go to school in that state.” While you can get access to the money at any time, doing so for any non-education related reason will result in you paying a penalty fee. Otherwise, you pay no federal taxes on the account’s earnings and you may qualify for state tax benefits as well. The earlier you start contributing to a529 Planthe more your moneywill compound over time.529 Plans offertax incentives, are tax tax-deferred, and allow multiple people to contribute. Seriously,there is nothing better than FREE money!

This may sound extreme, but lower tuition costs in other countries are luring American students to top-rated British and Canadian colleges. According to NBC News, “The total amount of student loans owed went over a trillion-dollar mark late last year, surpassing total credit card debt in this country for the first time. More and more American families are finding a solution to the high cost of higher[education] by looking to our north [Canada]”. The number of Americans attending Canadian universities has risen 50 percent in the past decade, and the reason is obvious: cost. Study abroad programs are a very popular option for students so I don’t think that actually attending school outside of the US would be far-fetched for some… especially if your choice is between attending a school that you can afford or not attending school at all.

I have a childhood friend, Amber,that I lost touch after moving to a new neighborhood at nine years old. It wasn’t until Facebook became the go-to source of information that we were able to “find” each other again and reconnect. Earlier this year, a link popped up in my Facebook timeline about Amber and her dream to attend Harvard. I clicked the link and was more than impressed with what I saw. Amber created not one but two websites to get the word out about her financial goals to fund her dream school. Amber created her own website “Get Amber To Harvard”to tell the story of her educational journey and her financial goals and an online donation website on the site, Go Fund Me. On her GoFundMe site, Amber has already raised $22,480.00 of the $70,000.00 goal. Check we say Cha-Ching!!

Would You Go to College Abroad to Save Money?

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There is a quote that states, “If you think education is expensive, try ignorance”. Unfortunately, this quote is true on SO MANY levels. While many people associate the word ignorant with being dumb or stupid, it’s simply the condition ofbeinguneducated, uniformed, or unaware. After graduating from Spelman College, I made both smart and dumb decisionsregardingmy student loan debt. I was toldby my aunt that paying your student loans is a great way to establishcredit. I put in an extra effort in paying Sallie Mae, so much that I had it paid more than year in advance. This was smart, ignorant, and sometimes dumb at the same time. It’s smart because I really never had to worry about forgetting to pay the bill. I felt extremely proud of myself for not being another “irresponsible” 20 something.It also revealed my ignorance because I should have been usingthat extra payment every month to pay down the balance NOT pay it in advance. I ended up paying interest when I could have been slaying the balance, which ultimately shortens the life of the loan. However, it wasn’t until I was in between jobs and not paying on the loan at all because the next due date was a year from then that I started digging a hole that I am still trying to get out of four years later. For one, my interest was accruing at about $8 a day, so a lot of the money I thought I was saving was now been tacked back on to the overall balance. It got worse when after the year was up, I still wasn’t working and I accepted an offer to postpone my payments for a year. That was back in 2011 and after yesterday’s phone call to Sallie Mae, my decision to postpone is still hurting my finances.
I pay about $200 a month for my student loans and recently got a series of letters saying that if I qualify I should sign up for automatic billing, which would let Sallie Mae automatically deduct money directly from a specified account every billing cycle. The incentive you ask? A .25% reduction in my student loan interest…equaling about $50 a month and $600 per year. I called Sallie Mae on yesterday, only to find out that I did NOT qualify. Apparently, if you post pone your loan at ANYTIME over the life of the loan, you lose eligibility for any interest rate reduction. Had I known thisI would have been the never postponed my loan, but this secret penalty was never in any of the documents I agreed to. LookingbackI would have rather roughed it out. So I guess the quote rings true. My education was expensive but my then financial ignorance could cost me more in the end.

We would LOVE to hear your thoughts?

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My favorite professor and teacher of all things “deep”, Dr. Michelle S. Hite, once told me that when you are fully engaged in research, you will start to see inspiration everywhere. I was researching women and business, but more specifically the salaries gaps of women in business, when I found inspiration in an old “habit”. My name is Danielle and I am an admitted magazine junkie and Sunday evening… Cosmo was my latest hit. While reading the February LOVE issue, I came across a very informative article from Rachel White entitled The Debt Crisis No One Is Talking About! In it, White discusses the vicious financial cycle of women, higher education, and student loan debt. You see, it is easy to say that women have more debt. That’s a statement I hear all the time from men and women. It’s a blanketed generalization because the mind tends to lead one to the stereotype of women and financial incompetence not the FACT that more women now have more financial responsibilities. For example, women now outnumber men in college, which means women are more likely to start their careers in debt. In her article, White used a real life example of a woman by the name of Brenda Errichiello, who “found herself with a $947 monthly [student loan] bill and only a $27,000 annual salary”. In all, Errichiello;graduated with a fabulous 3.9 GPA and $92,000 in debt. OMG, I thought to myself while reading this because Rachel White could have very well been telling my own story. I, like Errichiello, graduated with honors from Spelman College and thousands of dollars in debt before I even earned my first adult check.

What is Errichello to do?

You might be surprised by the answer. She had actually considered going back to school with the hope that more education means a better paying job, job security, and a bump up the corporate ladder. This is something I very well considered myself, getting back on the law school grind, but I had to remind myself that money doesn’t equal love and that hard work doesn’t always pay off in the currency of one’s choosing. Is this the epitome of spend more make more? This, SMC readers is that start of the Debt Crisis no one is talking about.

Things to Consider!

Women come out of the gate making less than our male counterparts for the same positions (18% less according to the article), are less likely to ask for raises at review time, have more student loans, and generally take maternity leave to start a family. How are we going to catch up? Why isn’t anyone talking about debt? According to White, it affects out relationships or lack thereof, career choices, and forces drastic decisions that hurt us even more in the end and if you follow SMC, you have read of other real life examples that support White’s point.

Do You Consider This A “Debt Crisis”?

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President Barack Obama is scheduled to speak on the debt deal today at 12:15 pm. While people are spending quality time giving their opinions on what was decided and placing blame, I would rather take this time to explain exactly how some of the decisions will directly affect YOU! To be honest, I haven’t been following the “debt ceiling crisis” of 2011 because it quickly became childish with Twitter wars and the blame game. One thing I know for sure is that undergrads and postgraduate students will be hit hard. As a means to recover funds to keep the nation from further defaulting on their loans, the government has decided to end subsidized loans for graduate students. Subsidized loans are loans that do not accrue interest as long as you are still in school. Traditionally, you would begin to pay the loan with interest back 6 months after you get your degree. Now, graduate students will have to start paying on their loans while in school. CNN Money adds, “Under the agreement, a special credit for all students who make 12 months of on-time loan payments would also be axed.”

What about the undergrads?

I remember a time when I thought that you go to high school and get good grades so that you will get into a great college. You then go to a great college and continue to get good grades so that you will graduate, get a great job or continue for your Masters, JD, or Med School. Like magic, I thought this was the automatic path for good students. It wasn’t until I graduated from Spelman that I realized exactly how poor the economy was. I also learned during that time that my competition in the work field and for graduate school was not only recent grads, but also older adults who have been in working and building their resume’s for years. That was my first major adult reality check.

What about the undergrads looking for entry to graduate school? Or even people like me looking to go back to school to get another degree. As I see it, education is getting more expensive and unfortunately, students who would benefit from expounding their knowledge in their intended field are forced to place economics over education. Does it make you feel better to know that the cuts are expected to save the government $21.6 billion (with a B) over the next ten years….?

What do you think?

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As an English major at Spelman College, I could easily spend $500 on books for one semester. It all depended on the classes and professors that I put on my schedule. While some classes required one or two major textbooks that cost a fortune, other classes required several books at a time and no you did NOT get the “hookup” if your professor wrote the book (s/o to Dr. Harper at SpelmanCollege and her Langston Hughes class). Did I mention that I took a full load every semester for two and a half year straight, which meant a lot of books?

Rent Textbooks Electronically from. . .

Luckily, the college students of today do not have to worry about that. Today, Amazon.com announced the launch of Kindle Textbook Rental–now students can save up to 80% off textbook list prices by renting from the Kindle Store. Tens of thousands of textbooks are available for the 2011 school year from leading textbook publishers such as John Wiley & Sons, Elsevier and Taylor & Francis. Students can find details about the program at www.amazon.com/kindletextbooks. Kindle Textbook Rental offers the ability to customize rental periods to any length between 30 and 360 days, so students only pay for the specific amount of time they need a book. Students can also easily extend any rental period in increments as small as one day or choose to purchase the book they are renting at any time. Kindle Textbooks are “Rent Once, Read Everywhere” as they can be read across the most popular devices with FREE Kindle Reading Apps for PC, Mac, iPad, iPod touch, iPhone, BlackBerry, Windows Phone and Android-based devices.

What the folks at Amazon have to say. . .

“Students tell us that they enjoy the low prices we offer on new and used print textbooks. Now we’re excited to offer students an option to rent Kindle textbooks and only pay for the time they need–with savings up to 80% off the print list price on a 30-day rental. We’ve done a little something extra we think students will enjoy. Normally, when you sell your print textbook at the end of the semester you lose all the margin notes and highlights you made as you were studying. We’re extending our Whispersynctechnology so that you get to keep and access all of your notes and highlighted content in the Amazon Cloud, available anytime, anywhere – even after a rental expires. If you choose to rent again or buy at a later time, your notes will be there just as you left them, perfectly Whispersynced.”

-David Limp, VP of Amazon Kindle

Personally, I believe this can be a great deal! Parents, professors, and students good luck with the upcoming school year! Hopefully, this information provides you with another financial option for purchasing some of your back to school needs.

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Good Morning and Happy Monday! With every week that passes the “Back to School” season is coming closer and closer into view. Parents are seeing the light at the end of the tunnel while students and even some teachers are dreading going back to the classroom. I have been thinking about writing a post like this for a while because I remember all too well the abundance of “FREE” t-shirts, water bottles, and even iPod nanosgiven to us students at Spelman College to urge us to sign up for credit card offers and bank accounts. Simply put, banks and credit card companies target students and what separates the students who kill their credit earlier on and those who become financially savvy adults is knowledge. What makes it ironic, though, is the idea for this post came from my own memories and experiences as a college student, only to have suspensions of credit card companies and banks confirmed Friday on a visit to Clark Atlanta University for freshman orientation.

Do Not Open an Account without Researching the Bank
I guess in this economy, banks have scaled back on their swag. I saw a few t-shirt being given out, some water bottles, a nice highlighter set, but no iPods (sorry students). Now I’m not saying credit card companies and banks are evil, you just have to know how to play the game. Banks are becoming increasingly aggressive when it comes to recruiting the business of college students. This can be used to your benefit with a little bit of research
and patience because the banks are presenting more competitive offering to beat out the other banks. College students and parents, if the bank cannot offer you FREE checking, FREE online banking, and most importantly for the student, no minimum balance, then walk away because another bank will.

Location, Location, Location
I remember taking a weekend with my parents to drive around the campus and surrounding areas of Hampton University in Hampton, VA. I figured I needed to know how to get to all of my favorite places like Target, restaurants, and the mall. My parents, however, thought it was important that I knew where the closest bank, grocery store, and hair salon (shout out to my mom for trying to maintain my whip appeal) were located. My advice for you is to get acquainted with the area. The bank from your hometown might not be available in the city where you or your student will be attending school, therefore learning the area is important in trying to find the best bank. Now let’s take a moment for the other factors that could influence your decision to pick a bank. Will you be a commuter or resident? Is there a bank already on your campus? Are there shuttle services offered to get you back and forth? Are there any banks located within walking distance? If you cannot physically get to a bank it doesn’t matter whether it is a great one or not.

Credit Cards and the Credit Card Act of 2009
Pay off your credit card balance in FULL each month. By doing this, it forces you to really stop and think about your purchases because resetting your balance each month causes you to buy only what you can afford. American Express, for example, makes cardholders pay in full. Think about it, it is a win- win situation because you don’t fall into the increasing numbers of consumers who are in serious debt due to credit card spending and they get their money on time. The College Board adds, “Credit cards are actually high-interest loans in disguise. Companies may lend you money, but they get it all back and a lot more by charging you fees. Finance charges on the unpaid portion of your bill can be as much as 25 percent each month, and cash-advance fees have even higher interest rates. Annual fees just to carry the card in your wallet range from $20 to $100; there are also late-payment fees, typically $25-$50. Not paying off the entire amount in your account each month can lead to big finance charges.”

It is important to know that a lot of the information written for students and parents about student banking and credit cards was written before President Obama signed the Credit Card Act into law. Now, credit card issuers are banned from issuing credit cards to anyone under 21, unless they have adult co-signers on the accounts or can show proof they have enough income to repay the card debt. That’s right; it’s not just the students’ credit score that is at risk. Bad financial decisions of students will directly affect the credit of their adult co-signer. The Credit Card Act of 2009 also stated that credit card companies must stay at least 1,000 feet from college campuses if they are offering freebies to entice student to apply for credit cards.

To be honest, I didn’t get a credit card until I was weeks before graduating from Spelman College. I waited because I was not sure if I could handle the financial responsibility that I had witnessed other fail. I knew I would already have to worry about my girl Sallie Mae and the student loans I was owe her, so I didn’t want to add the extra stress of credit card debt as well. It worked for me and yes, I recognize that every situation is different. Before applying for a credit card and/or opening a student banking account, do your research. A good starting place would be my 5 Non-Negotiable for Students and Banks. College should be one of the best times of your life so don’t taint it with worries over bad finances. Start smart, create great habits, and end on top.

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Check Your Account Daily

Everyone, not just college students, should check their finances daily. By doing this, you are always aware of exactly how much money you have at all times. Why would you allow someone to know more about your money than you?

Overdraft Protection

Two words… Overdraft Protection. Sign up for Overdraft Protection when you sign up for your account. Doing this will help you avoid penalty fees for going over your limit. I know someone who had about $400 in one month tacked onto her checking statement for overdraft fees and penalties. Obviously, she does not follow step one and two. Learn from her mistakes.

Set Realistic Alerts for EACH Account

The very same person mentioned in the tip above became my inspiration for this one. If your account consistently holds a balance under $100, setting your banking alert for $100 will not help you. Instead, pick an emergency figure that is more realistic for reminding you, hey you need to make a deposit. It will help keep you out of the red.

In the Choice between a Debit and Credit Card- Choose Debit

Debit equals your own cash and credit equals money borrowed plus interest. If you have the money in your account, swipe your debit card!

If Banks Can’t Offer the Basics… Walk Away

If the bank cannot offer you FREE checking, FREE online banking, and most importantly for the student, no minimum balance, then walk away because another bank will.