Wednesday, February 26, 2014

Colleges Paying for Student Loans? Yes, Please!

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A small group of colleges are now offering to pay student loan bills through a program referred to as the loan repayment assistance program.  Many law schools have been practicing this for over a decade to new law graduates pursuing a career in public service.  Recently, some private colleges are now applying the same offer for any undergraduate major.
What’s the catch?  The program charges schools an annual fee for each student registered in the program.  In order to receive payments from the program, the graduate must fall below a predefined income based on the salaries of recent graduates and regional factors.  From there, the payments are based on a sliding scale in proportion to the graduate’s income.  Not only does the student have to meet these requirements to be eligible for the assistance, there are additional requirements in order to continue receiving payments.  The student must graduate and work at least 30 hours per week.  Once the income threshold is broken, the student will no longer receive assistance even if their income dips below the threshold again in the future.  Finally, the assistance is considered taxable income, causing a student to have a high tax payment.
Of course this action taken by schools is not completely selfless.  It’s a big draw for smaller schools that need to boost their enrollment.  How do you know if this deal will benefit you?  It’s hard to say.  When deciding between multiple schools, be sure to inquire about programs like these and find out what you have to do to be considered as well as other options such as in-state tuition and merit scholarships.  Try to avoid making a decision relying solely on the repayment assistance program.  While it would be nice to know that your payments are covered upon graduation, it is not a guarantee.  What if you are above the threshold by one dollar?  What if the school quits participating in the program by the time you graduate?  It is important to take measures to minimize your student loan debt so that, if your income rises above the threshold, you do not have as large of a burden to face. 

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Wednesday, February 19, 2014

Selling Ad Space to Pay Off Student Debt?

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Would AMC’s Mad Men favorite Don Draper pay $300 for a 1-inch by 1-inch space on a graduation cap?  Maybe – if he also had an Old Fashioned and a Lucky Strike cigarette handy during the pitch.
Businesses are always looking for ways to reach the masses – whether it is ad space on a billboard, television commercial, Google search or Facebook – if space is available for an ad then it must be used.  When the economy declined, consumers came up with new ways for businesses to broadcast their products.  For instance, people got tattoos in exchange for discounts at their favorite restaurants.  Hungry patrons hoped the business would last longer than the permanent logo inked on their skin, and some restaurants offered discounts and even lifetime freebies for the commitment.  Another example is the Billboard Family a few years ago who outfitted their entire family of five in shirts with logos from companies and were paid to wear the clothes for the day.
With these inventive promotional tactics flourishing, it wasn’t long before Alex Benda, a senior at the University of Michigan, came up with the idea to sell ad space on his graduation cap.  Benda reported to the Detroit Free Press  that the going rate to claim a 1-inch by 1-inch space on his hat was $300.  At this price point, Benda figured he could pay off his entire student debt of $30,000 if he sold all 100 available squares.  The International Business major also offered a personal thank you note for donations of $10 and shout outs on his YouTube channel among other things for donations of $100.  At the time of this writing, Benda had raised $5,366.00!
So, is Benda onto something?  Is it possible to pay off student debt by selling ad space?  Can this strategy apply beyond a graduation cap – cars, smartphone covers, profile pictures, laptop cases, fingernail polish?  You never know until you try!  Get creative and don’t forget to keep it legal!

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Wednesday, February 12, 2014

4 Ideas for Your Law School Sweetie: Valentine’s Day on a Budget

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Roses are red.  Violets are blue.  Your Valentine’s a law student, what are you going to do?  Enjoy Valentine’s Day this year with a little law school fun while keeping up with your budget!

1.      Romantic Movies with a Legal Theme.  It’s a bit pricey to go to the movies, especially when you add in concession food.  Instead, cuddle up on the couch and rent a movie from Redbox for cheap.  Most public libraries also carry a large array of DVDs, which you can check out for FREE!  Try these movies that have a romantic story with a legal twist!
2.      Justice is Sweet.  Gourmet chocolates always go up in price for Valentine’s Day and maybe even more so this year with the pending shortage of cocoa beans.  You however can make a decadent treat for your Valentine with a package of chocolate chips from the grocery store (roughly $3) and an inexpensive gavel mold like this one.
3.      Attorney Dinner Theme:  Save money by dining at home this year.  Not only are groceries likely to cost less than a fancy dinner, you don’t have to worry about getting a reservation.  Besides, a dinner at home can be more intimate and the effort is always appreciated.  Example Menu:  Cocktail ideas from Legalese Cocktails, Appetizer: Soup “De Jure,” EntrĂ©e: Legal Brief Wellington and Dessert: Torte.  Use whatever legal puns interest you and display the menu at dinner.
4.      Contractually Yours.  Instead of buying a card, consider making one or printing one from the internet.  Above the Law created a very inspiring Valentine’s Day card that provides a legally sound way to bind someone as your Valentine for the day.  If that doesn’t send your heart aflutter, there are a ton of Ryan Gosling “Hey Girl – Law School” prints online!

Wednesday, February 5, 2014

3 Significant Student Loan Changes in 2014

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Changes to student loan debt are coming, and they aren’t necessarily good changes.  The crisis of student loan debt in our nation is surmounting, causing Congress to turn its attention on correcting the situation before another recession hits.   Legislation can be difficult to follow as it goes through a time-consuming process and can constantly change before it is (if it is) enacted into law.  You may be primarily focused on studies or getting a job by graduation, but it is imperative that you keep an ear (or both) to the ground and an eye (or both) open to these alterations because they will affect you.  Here are just a few key matters of which you should pay particular attention.

  1. Interest Rates on the Rise:  As I cautioned over the summer when legislation to change direct loans passed, interest rates are likely to increase.  Direct federal loans switched from (very low) fixed interest rates to variable interest rates that correspond to the market.  Those interest rates will increase and students will have higher monthly repayments as the economy recovers.  How can you prepare?  Try to avoid taking out student loans altogether.  Shop around for better rates that are fixed at a low interest rate.  Make interest payments to prevent your interest from compounding. 
  2. Increased Information to Students about Their Loans:  Proposed legislation like the Student Loan Bill of Rights and the Smarter Borrower Act are a welcomed change.  Although entrance and exit counseling are already required by federal law, but often leave students confused or indifferent about the terms of their loan agreements and their debt obligations.  These bills attempt to make these sessions more informative such as sending students annual updates on their balances, interest rates and repayment options.  Take advantage of this change! 
  3. Changes to Eligibility Requirements for PLUS Loans:  In 2011, amendments were made to PLUS Loan requirements to exclude borrowers with a foreclosure, bankruptcy filing, repossession or loan default in the past five years or a borrower who is more than 90 days delinquent in their student loan repayments.  This change affects a lot of students since parents and graduate students are the ones most inclined to take out a PLUS loan and are more likely to face these circumstances.  Congress is looking into these past changes and are considering whether to keep them, add more restrictions, or remove these restrictions altogether.  How can you prepare?  Again, try to avoid taking out loans entirely.  Clean up your credit score by paying your bills on time – even if this means taking on another job or drastically cutting spending.

These changes are just the tip of the iceberg in 2014, so keep checking back to Barrister on a Budget to keep on track!

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