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Archive | March, 2013

4 Fiscal Cliff Insights From Financial Bloggers

4 Fiscal Cliff Insights From Financial Bloggers

FiscalCliffToday’s guest article comes from Miles Young

There’s no doubt that the fiscal cliff situation has been described in confusing and sometimes contradictory terms by the media. So, the best way to understand the fiscal cliff is to get insights directly from financial experts who can break it down for those of us who aren’t finance gurus. Students in finance should take note, as these insights directly affected the job market for recent graduates.

1. The Fiscal Cliff Risked Recession

According to Jeff Macke, the failure to reach a deal on the Fiscal cliff could have led to serious consequences for the economy. The 500 billion dollars in government spending cuts as well as tax increases that could have happened as a result of the standoff could have been a nontrivial problem. As a result of this standoff, some of the following effects were possible:

  • Tax hikes for Individuals and Businesses.
  • Bush-era Tax Cuts and Obama’s Payroll Tax Cuts going away
  • Military, Domestic, and Federal programs slashed
  • Tax rate for Dividends for investors could’ve risen as high as 40%

These individual consequences could have added up to another recession according to some experts. Since the previous tax cuts involved bolstering incomes, if they’d been slashed, people would’ve had much less disposable income to put into the economy, resulting in recession.

2. Investors Who Don’t Panic Better Survive Fiscal Cliffs

Experts like Bill Mcnabb advise investors to not get too flustered by headlines such as those that happened during the fiscal cliff. Short-term changes in the news and in fiscal problems in the country are just that, short-term. Mcnabb told investors to “Keep calm and carry on” during the fiscal cliff. The potential rise in taxes for any type of business transaction won’t be as potentially catastrophic as making poor decisions because of panic based on the headlines.

3. The Fiscal Cliff Deal Didn’t Affect Spending Cuts

The current issue regarding spending cuts is called “Sequester,” and it’s being dealt with now because the fiscal cliff deal didn’t address spending cuts originally. The fiscal cliff concerned only the revenue side of the equation, specifically how to deal with taxes and other related governmental incomes.  As a result, a whole new debate occurred after March 1st about which types of spending should be cut and by how much, pitting Democrat versus Republican in a show down once again.

4. Fiscal Cliff Deal Was a Stop Gap

The last minute agreement for the fiscal cliff deal helped ward off the worst of the bad effects that could’ve resulted if the deal hadn’t been struck, but it also had serious limitations. According to Russ Koesterich, the economy should continue to improve this year, but the GDP growth won’t get higher than the 2 percent growth that’s happened previously. Also, the deal only extended a freeze on spending cuts by 2 months, unemployment benefits to a year, and a freeze on Medicare benefit cuts to a year.

Overall, those who have an accounting bachelors degree or other training in finances will be the most able to fully understand the fiscal cliff. They will also be the best equipped to deal with the continually evolving situation that springs out of it in the U.S.

Image via Flickr by DonkeyHotey

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An Overview of the Student Loan Forgiveness Act

An Overview of the Student Loan Forgiveness Act

Attending college may be essential to finding a high-paying job, and students who are attending school are relying on loans to fund their college career. According to the Los Angeles Times, average 4-year student loan debt has risen from $17,200 to more than $27,000 upon graduation. While some students are staying current with their loans, the student-loan delinquency rate has risen just like all debt. To battle this ongoing debt crisis, a petition has been submitted with more than 670,000 signatures to convince Congress to pass legislation to forgive debt and bail out lenders. While the proponents of the Student Loan Forgiveness Act claim the legislation has the potential to benefit struggling graduates and stimulate the economy, opponents believe that this is not the right solution.

The Student Loan Debt Crisis Continues to Get Worse

After the housing market bubble burst in 2007, more unemployed professionals enrolled in school, applying for school loans to fund their degree programs. With more admissions came higher tuition costs and more student loan debt. While a college degree is believed to make a graduate more employable, the perfect storm hit when graduates’ loan payments became due and they were not employed. These borrowers had no choice but to default on their loans six months after graduating when the repayment cycle started. Presently, about 40% of all of the loans owed in the United States are in deferral status. This affects not only the lenders, but also the economy as official delinquency rates continue to rise.

Is the Student Loan Forgiveness Act the Solution?

When the housing market crashed and airlines faced bankruptcy, the government bailed out lenders and airlines to prevent a great depression in the economy. Borrowers are petitioning Congress to forgive educational loans. The premise behind this pending legislation is that increasing the amount of income graduates have to invest and spend will boost the economy.

If the bill were to be passed, a student who has made payments that exceed 10 percent of their income for the last 10 years may qualify for forgiveness. This standard is called the 10-10 standard. After qualifying by this standard, students will automatically be forgiven for the remainder of the debt so that they can invest in housing and contribute to the economy in other ways.

What Do Opponents Have to Say About the Act?

While more than 1 million students have signed the petition, opponents believe that forgiving debt that has voluntarily accumulated is a bad precedent that may lead to forgiving other types of loans. The fairness of this legislation has been questioned and business owners and others are asking why students are the only borrowers that should benefit from loan forgiveness.

Although the population is divided, forgiving student loan debt is an effective way to spur the economy and to encourage growth. With rising interest rates and exorbitant fees for delinquency, a student can be stuck with student loan debt for decades. This means that more money is going to the lenders and less money is going into the economy. By passing the Student Loan Forgiveness Act, students who have demonstrated that they have every intention to repay their debt can have some of their balance erased, which will contribute to a stagnant economy that needs a serious jumpstart.

About the Author:

Today’s guest article comes from Stephen Marsh. He writes on law, finance, personal savings, bankruptcy and other similar concerns. Those with legal needs pertaining to bankruptcy should contact Orange County Bankruptcy Lawyer.

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An Emergency Fund Could Save You Upon Graduation

An Emergency Fund Could Save You Upon Graduation

With the costs of college these days, and the student loans that can come along with a college education, building and maintaining an emergency fund might seem laughable.  However, having such a fund could prove valuable upon graduation.  While it might not be the eight months of living expenses Suze Orman advocates, at least having a multi-month reserve fund could end up saving your tail upon graduation or at least opening up a few more options that wouldn’t be there otherwise.

Avoiding the Parent Trap

If you’re like many college students out there, moving back in with your parents isn’t likely a goal upon graduating college.  You priority list probably doesn’t read:

  • Graduate school
  • Look for a job
  • Move back in with mommy and daddy

However, without an emergency fund, this might be exactly where you end up should you not find that job you desire right away.  And being stuck living with mom and dad, while a money saver and possibly even making for some great home-cooked meals, could lead toward complacency issues when it comes to finding a job and even hurt your self-confidence in the process.  With an emergency fund, you may avoid being forced back in with mom and dad even if money is tight.

The Job Search

You may not find your perfect job while still in school, and jumping on the first thing that comes along could have you on the wrong career path.  And taking a job just to have a job could leave you unhappy and stagnating in a role that you know isn’t right just for the paychecks it provides.  Having an emergency fund at your disposal could provide you with the time necessary to complete your job search and find the job that fits you best, or at least help you avoid taking any old job just to pay the bills.

Found a Job but Hate it?

But lets say even that job that you thought was right turns out not to be so perfect.  Without an emergency fund, you might be stuck between a rock and a hard place.  You’d like to leave, but you need the money.  However, with a strong emergency fund in place, you could have the power to walk away from a job that isn’t right and search for one that you’d like to stay and maybe even advance with.

Avoiding Debt

While you might be graduating with student loans, you may be free from other obligations such as credit card debt, car loans, or a mortgage.  However, you might find that while school was costly, the real world can be equally, if not more expensive.  With housing costs, transportation to and from a job, clothing costs, food, and all the rest, it might be more than your initial starting salary can handle, forcing you to take on additional debt to cover those regular costs.  However, with an emergency fund, should an unexpected car repair or medical cost pop up, you might be able to cover it outright rather than having to put it on your credit card.  Avoiding the process of taking on debt early on can set you on a path to financial responsibility for the rest of your life.

Author Bio

Today’s guest article comes from Todd Garner. He is a freelance writer based in the San Francisco bay area. His writing focuses on business, health, education and career related issues. He is currently writing for Online Schools Network, a site that helps prospective students find the right online college.

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5 Money Saving Apps & Tools For College Students

5 Money Saving Apps & Tools For College Students

mobileappsFor students in today’s world, technological advances have meant a great deal when it comes to efficiency and simplicity. In fact, even the difference between now and a few years ago is significant when it comes to how students get the majority of their work done. These days, students take advantage of all kinds of new and incredibly capable technologies – from using mobile smart phones to access the Internet at all times, to taking advantage of cloud computing options from companies like ShareFile Citrix.

In addition to using new technologies to improve their work efficiency, however, students can also make use of these kinds of tools and applications to save money. For many young people in university environments, money can be very tight, and it’s important to find ways to save even a little bit of cash here and there. With that in mind, here are 5 technological tools and electronic apps that can help students maximize savings.

1. E-Readers

Electronic readers have been around for years now, but they are becoming more efficient and higher quality every year. Not only do these devices save students from having to lug heavy textbooks all over campus, but they almost always offer cheaper electronic alternatives to textbooks. Books and other course material can be very expensive, and while you will still have to pay for your material, buying and downloading electronically can generate significant savings.

2. Amazon.com Trade-In App

If you do rely on physical textbooks, you can still save money by selling them once you are through using them for courses. Many college campuses have services that buy back textbooks, but you can often find very good deals on the Amazon.com app. This app is specifically designed for students to input/scan ISBN numbers for textbooks and easily sell them for Amazon Gift Cards. This can be a very helpful boost at the end of a semester or year.

3. Groupon

Groupon is both an online site and an electronic app, and it is designed to help people to find coupons and deals on restaurants and shopping in their areas. It’s a wonderful tool for students who like to eat off-campus or enjoy stores in the vicinity of campus on occasion, as it can keep costs low while providing fun and interesting ideas for off-campus activity.

4. GasBuddy App

This app is simple but effective – basically, you can plug in your location and GasBuddy will search for the most affordable gas prices within a 50 mile radius. Gas costs can quickly add up for many students, and every little bit of savings counts!

5. Jungle

Jungle is essentially an online sales and services network designed for campuses. Whether you’re looking to purchase a used textbook, pay a tutor, etc., Jungle gives you the chance to search for what you need and negotiate a price on your college campus. Often, dealing with other students can result in fair prices and simple deals that you may not find elsewhere.

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The Digital Dorm Room Saves You Money – Infographic

The Digital Dorm Room Saves You Money – Infographic

When I was first going to college (which is now verging onto a couple of decades ago -gasp), all we needed to power-up in our dorm rooms was a radio alarm clock and maybe a desk lamp. If you were one of the lucky few, you also had a laptop (word processor) on campus which meant independence because you were not tethered to the campus computer lab. Flash forward to the current academic year and you find yourself in a totally different environment. The number of electronic devices that a student currently brings to campus is astounding. The following infographic (created by CourseSmart) provides a great approach to how students can save money (and time) on their campus by using available mobile technology to replace “outdated” & “antiquated” services and devices in their dorm rooms. Enjoy!

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Four Ways To Pay For Graduate School

Four Ways To Pay For Graduate School

So, you’ve earned your undergraduate diploma and have decided to continue your education by pursuing a graduate degree. You’ve researched programs, schools and locations, and have narrowed your options down to a handful of choices that meet your requirements. Deciding on a program, though, is just one of the many steps to earning a master’s degree.

The question of how to pay for all this additional education is a major issue. It’s no secret that graduate school is a huge investment and, unless your name is Papa John, delivering pizza won’t even come close to offsetting the costs of an advanced degree.

It’s true that many graduate degrees pay for themselves over the course of a career; still, the initial costs can be daunting. With business school tuition averaging more than $102,000 in 2011-2012 and law school costing nearly $50,000 per academic year, isn’t it worth exploring every possible avenue for help paying with school? Consider these options:

Get your employer to pay

Many companies support employees who want to advance their educational qualifications while continuing to work full time. Such an arrangement can be mutually beneficial, allowing an employee to gain additional credentials and giving an employer a better-trained staff. Arranging the necessary support and logistics can take some time, so workers need to present a strong case as to why furthering their education can add value to the organization. Remind your employer about the potential tax breaks in this arrangement and know that you’ll be expected to make a long-term commitment to continue working for the company once you get your degree.

Military service

Through their various financial assistance programs, including Tuition Assistance (TA) and the Post-9/11 GI Bill, the branches of the U.S. armed forces will provide eligible service members and veterans with assistance in paying for grad school. While the GI Bill is familiar to many people, other lesser-known programs are available. For example, the Navy’s Health Professions Scholarship Program may cover 100% of the cost of dental and medical school tuition, and also provide a monthly stipend for individuals interested in a healthcare career with the Navy. Tuition Assistance funds also are available for service members who want to pursue a master’s degree. With more schools offering 100% online graduate programs, it’s becoming increasingly possible for military personnel to complete degrees while balancing deployments and other duties.

Scholarships

Scholarship opportunities may include merit- and need-based awards, essay contests and career-specific financial help. The key to finding a scholarship is research, so it’s imperative to invest adequate time and energy in looking for potential sources of assistance. Check out professional organizations, public agencies and private corporations; Web-based directories are a good place to start your search. Although career-specific scholarships are typically easier to find in the nursing and teaching professions, there are other options.

Fellowships and assistantships

Most graduate schools hire graduate students to assist faculty with research projects or classroom instruction; these are commonly known as assistantships or fellowships. Under such arrangements, a school may pay at least a portion of a graduate student’s tuition and fees, and possibly even include a stipend and partial or full health insurance. Not only are fellowships and assistantships helpful financially, they also provide students with on-the-job experience in their career field, as well as access to mentors and academics. Securing an assistantships or fellowships is often very competitive, meaning it’s a good idea to start researching options early in the grad school application process. Also, graduate fellowships typically require a substantial written application and submission of a research proposal.

The bottom line in paying for graduate school is that you need to be creative and dogged in your search for financial resources. Although the cost of a master’s degree can be significant, the long-term professional and personal benefits can also be substantial. So, leave no stone unturned and no application unfilled.

About the Author:

Today’s guest article is provided by Grant Webb. Grant is a writer and editor for Bisk Education and University Alliance online business degrees covering news on financial aid, Masters of Education and Masters of Elementary Education topics.

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Understanding Private Education Loans In College

Understanding Private Education Loans In College

With the cost of education steadily rising, most college students find themselves in need of financial aid. Earning a college degree has never seemed more important, so many take the plunge into student debt by borrowing $50,000 or even more. Unfortunately, students who borrow are often unaware of the vast differences between federal and private student loans, and the impact that private student loans can have on their life for decades to come.

Federal Loans

Federal student loans, which are funded by the federal government, offer the benefits of low fixed interest rates and flexible repayment plans. These loans take into account the fact that most students do not have a steady income while they are in school, so the loans do not require repayment until after you graduate, leave school or switch to part-time status. The types of federal student loans available include Perkins Loans, Direct Subsidized Loans, Direct Unsubsidized Loans and Direct PLUS Loans.

Private Loans

Private student loans, on the other hand, are offered by private and local government lenders, including banks, state agencies, credit unions and schools. One of the largest lenders is the SLM Corporation (Student Loan Marketing), more commonly referred to as Sallie Mae. Although Sallie Mae at one time provided federally guaranteed student loans, the organization now offers only private loans.

In contrast to federal loans, many private loans come with a high variable interest rate that can increase over the life of the loan. Due to interest capitalization, a process where unpaid interest and loan fees are added to the outstanding principal balance of a loan, the amount of money you repay on a private student loan can be significantly more than the amount you borrowed. Another key difference is that payments for private student loans often must begin immediately, causing financial hardship for many full-time students.

A number of options are available to help those who have trouble repaying their federal student loans, including deferment, forbearance and forgiveness. Deferment and forbearance allow you to suspend repayment, while forgiveness cancels your loan debt due to disability, school closure, bankruptcy or public service. Most private student loans lack these repayment options. Unlike mortgage and credit card debt, private student loan debt cannot be discharged with bankruptcy. Private loans are also difficult to get waived due to financial hardship, disability or school closure, and there are no forgiveness programs available for public service.

A report released by the Consumer Financial Protection Bureau (CFPB) in 2012 served as a dramatic expose of the $150-billion private student loan industry. The majority of private student loans (42 percent) go to undergraduates at for-profit colleges who are steered to these loans by school administrators or contacted directly by lenders. The report also reveals that an estimated two-thirds of student borrowers don’t understand the difference federal and private student loans, and that many private loan borrowers did not exhaust their opportunities for federal loans before resorting to a private loan.

For the first time in U.S. history, the total student loan debt accrued by college students is approaching $1 trillion. Student loan debt affects more than the finances of former students. Individuals who are harnessed to these loans are unable to participate in the economy. Many have a hard time making ends meet due to high monthly payments, let alone save for a house, car or family. Student loan debt can be multi-generation when parents are unable to provide financial support for their college-age children due to their own student loan burden.

If you’re looking for financial aid for college and need to borrow money, be sure to apply for scholarships, grants and federal student loans first. When a private student loan is your only option, be sure to study the terms and conditions, and calculate what it will take to repay the loan and how much you will actual repay.

About the Author:

Today’s guest article comes from Mandy Fricke. She is the community manager for Georgetown University in Washington D.C. Nursing@Georgetown, a Master in Nursing program, as well as a contributor to the Nursing License Map. In her spare time, she enjoys traveling, reading, and yoga.

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5 Reasons Why Starting a Business In College Makes Sense

5 Reasons Why Starting a Business In College Makes Sense

We all know that Mark Zuckerberg started Facebook from his Harvard dorm room and is now one of the wealthiest people on the planet. In fact, there is an extensive list of other massive corporations that were launched while their creators were in college— companies such as Google, Apple, Dell, Yahoo, Citadel, FedEx, and TIME magazine. Of course, starting a business in college does not guarantee riches, but there are a surprising amount of success stories every year, where current or recent college students have turned an idea into a profitable business. With that said, there are definitely a host of legitimate reasons why starting a business while in college makes sense.

Incredible Reservoir of Dirt Cheap Talent.

If you are launching a web-based business for example, college campuses are flush with the talent you’ll need. Think of all the students majoring in computer science, programming, software engineering, etc. Through a little networking, you can easily meet with these fellow students who have the technical skills you wish to utilize. Also, they may be interested in partnering with you and accepting equity instead of payment or making another type of arrangement—which won’t require large amounts of cash.

Privileged Access to Valuable Knowledge.

Every college campus offers access to experts in virtually every field, (otherwise known as professors). Often times, these professors have substantial experience in their field expertise. Each year, businesses spend millions of dollars on consultants in effort to optimize and execute business strategies. Developing relationships with and receiving advice from professors related to a business venture is an enviable pathway to free consultation with qualified experts.

Instant Marketing. Ignite Social Networks.

Most business these days try to take advantage of social media, attempting to reach current and potential customers through Facebook, Twitter, etc. However, the truth is, they are largely disconnected from an authentic, personal approach. Generic product posts and tweets don’t have much lasting influence power. On the contrary, when friends or like-minded peers endorse a product or service, the power of influence carries much more weight and travels further. Thus, by tapping into social networks of your own and your fellow undergraduates, it’s possible to quickly spread the word to tens of thousands of people.

Special Passport to Funding.

University students are often privy to a host of insider funding resources, made available only to enrolled students. A bouquet of special grant programs and scholarships are commonly accessible through university programs or connections within the businesses community. Additionally, many schools hold business plan competitions where local companies participate, providing access to more potential funding sources.

Resume Experience Unlike Any Other.

Maintaining a high G.P.A. and launching a business venture, all before receiving a college diploma, shows future employers that an individual is very driven, capable and hard-working. Basic internship experience is a dime a dozen among college students. However, the ability to produce an idea, architect a plan, launch a business and generate revenue will set a new college graduate apart from the norm.

Today, the modern business world is ultra-competitive and moves at the speed of light. Creating a business out of thin air while in college, is definitely a very challenging and consuming endeavor. However rest assured, whether the new entrepreneurial venture is great success, marginally profitable or a tremendous flop—much will be learned, character will be built, and invaluable experience will be gained.

About The Author:

Today’s guest article is provided by Justin Stephenson. He is a writer for Collegeboxes.com, the largest college storage and shipping provider in America.

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