Trying to maintain a social life while still paying the bills? That’s easier said than done.
Bar tabs, brunches, vacations and birthday celebrations don’t pay down student loans or help you save for a down payment on a home. If you’re not a careful budgeter, your social spending can even put you behind on rent.
But that doesn’t mean you have to isolate yourself.
Derek Peth, a financial executive who’s most known for stints on “The Bachelorette” and “Bachelor in Paradise,” suggests the opposite. Becoming more financially intimate — sharing your financial situation with your friends or significant other — can strengthen your relationships while protecting your budget.
Peth, a senior vice president at the online lender Laurel Road, told The Penny Hoarder it’s time to remove the taboo around talking about money.
“Your finances are a part of who you are,” he said.
The people you love should be accepting of that, even if it prohibits you from going out and spending money as often as they’d like.
Talking about your financial situation, however, doesn’t mean you have to dish out the explicit details of how much you make or how much debt you have to an acquaintance or someone you just started dating.
Instead, Peth suggests sharing your goals and limits.
“You can say something like, ‘I’ve got a lot in student loans. I’m really trying to focus on that and my goals right now, and I’m kind of limited on what I can do. Here’s my limits,’” he said. “You don’t necessarily [have to] put numbers behind it, but at least start having the conversation.”
While you’re being more open about your money situation, make sure to share your financial wins too. Paying off $10,000 of your student debt is worthy of the type of celebration you’d have if a friend was turning 30, Peth said.
“Achieving something like paying off a large amount of debt and then celebrating it in a fun way is something that we should do more of,” he said.
When you don’t have as much disposable income as your friends, it can be disappointing to say no to an invite.
“FOMO is a real thing,” Peth said.
True friends should accept the occasional “no thanks, I can’t make it” reply. If someone is constantly trying to push you outside your financial comfort zone or can’t accept your explanations as to why you can’t afford going out every weekend, Peth said it may be time to re-evaluate the relationship.
“You don’t want to be begrudgingly doing something and you also don’t want to — if you’re real friends — be guilt-tripping someone into doing something either,” he said.
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To avoid some of these situations, Peth advises taking the lead and being the one to plan the outing. You can come up with something enjoyable that doesn’t involve spending a bunch of money, like a backyard barbecue or a picnic where everyone chips in and brings a dish.
Living in New York, Peth said some of his favorite things to do are hanging with friends on a rooftop or in Central Park, which are very low-cost.
When it comes to dating, Peth suggests taking a note from the Bachelor franchise — with adjustments to fit your budget, of course.
“There are multiple layers to their big dates,” he said. “Although they’re crazy expensive, you can start out somewhere that’s got nice drinks, grab one there, walk to another place that’s maybe lower cost to get tacos together and just laugh and chat, and then go through a final walk through some park.”
Adding layers to a date involves a little more effort than just making reservations at a restaurant. Peth said it shows you value spending time with that person, and the change of scenery helps break up some first-date awkwardness.
“The first time you’re meeting somebody, mix it up a little bit,” he said.
Nicole Dow is a senior writer at The Penny Hoarder.
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017. [...]
Ever wonder what life would be like if you could make your student loans disappear?
It’s possible, but it isn’t magic.
Or likely. (Sorry.)
But considering the mounting pile of outstanding student debt in U.S. — at $1.5 trillion, student loans were the largest non-mortgage source of household debt in 2018 — we should at least consider every option for wiping it out, right?
If your student loans have become more than you can handle, seeking forgiveness or discharge of your debt could be an option. Check out this Penny Hoarder guide to student loan forgiveness so you’ll know all your options.
Understanding Student Loan Forgiveness, Cancelation and Discharge
Before we dig into individual programs, let’s cover the ground rules.
First, a word about words: Forgiveness, discharge and cancellation essentially mean the same thing when you’re thinking about your student debt — they mean you no longer have to pay the remaining balance on your loan — but the terms are usually applied in different circumstances:
Forgiveness is usually used in cases where you qualify because of your job or employer.
Discharge typically refers to other reasons for not paying the debt, such as your financial situation.
Cancellation is a more general term that often covers both.
All of the programs covered here are only available for federal student loans, not private student loans. And depending on the program, there are requirements for which types of federal loans qualify.
Additionally, these programs typically take years to qualify for — sometimes as much as 25 years. There’s one exception to this rule, but it’s probably the least desirable way for getting rid of your debt. (Spoiler alert: It’s death.)
Many of the options depend on your job. If you work in public service or choose a specific profession, you can receive forgiveness for a loan after a specified amount of time, during which you must document your employment.
If you don’t have a job through which you can receive loan forgiveness, your other choices for forgiveness or discharge become limited to income-driven options or extreme circumstances, like becoming permanently disabled or your school closing.
Additionally, although you might celebrate wiping out your student loans, understand that you might be trading your student loan debt for a big tax bill, depending on the program.
If you borrowed before July of 2010, you’ll need to consolidate your loans to qualify Public Service Loan Forgiveness and some income-driven repayment plans.
In general, if your loan is wiped out because you worked in public service, you won’t owe federal taxes. And if you die or are permanently disabled, you don’t owe taxes on the forgiven amount (and neither do your survivors). Pretty much everyone else can expect to get a bill from Uncle Sam.
But even if your forgiveness isn’t subject to federal taxes, you could still be on the hook at the state level, so find out beforehand whether you’ll be liable for taxes and plan accordingly.
We’ve broken down the programs by work and non-work qualifications. We’ve also included “scam alerts” throughout since, unfortunately, there are plenty of unscrupulous individuals and companies out there who prey on the unsuspecting and often desperate people overwhelmed by student loan debt.
With that in mind, let’s dive in.
Student Loan Forgiveness Based on Your Job
If you’re committed to a life of helping others, whether it’s by working for the government or a non-profit or by choosing a public service profession, you could qualify for student loan forgiveness.
This is not a commitment to be taken lightly, as it means you’ll have to ensure that your loans qualify, stay current on your payments throughout the process and stick with a job that qualifies for forgiveness.
And while you may graduate ready to give back through a career in public service, a lot can change over those qualifying years — whether it’s adding family responsibilities to the mix or simply realizing you don’t like your job.
Scam alert! It’s illegal for anyone — including companies that offer to “help” you repay your student loans — to ask for your federal student aid user name and id. Never give that info out.
“There is danger and risk with that because you don’t know what is necessarily going to occur,” said Melinda Opperman, executive vice president at Credit.org. “What if you change professions halfway through and you don’t do the whole 10 years? Circumstances change.”
If you do change your mind and switch to a non-qualifying job, you’ll be responsible for paying the remaining amount you owe.
Public Service Loan Forgiveness
The Public Service Loan Forgiveness program is probably the most well known, but for all the wrong reasons.
Out of the approximately 76,000 PSLF applications that were processed by March 2019, 518 applications were approved. For those who didn’t major in math, that’s less than 1%.
And the program that was supposed to fix the problem — Temporary Expanded Public Service Loan Forgiveness (TEPSLF)? Yeah, it turns out the acceptance rate for that one nearly matches the original.
Scam alert! When it comes to federal student loan repayment applications, there’s nothing a company can do for you that you can’t do for free on your own.
But if you have your heart set on serving the public at a government or non-profit entity and are facing a mountain of student loans, then the Public Service Loan Forgiveness (PSLF) program may be the way to wipe out your debt.
Be prepared for a long wait — it takes a minimum of 10 years to qualify — and to follow a lot of rules in regards to your loan and employment eligibility. To help you navigate the process, check out these seven essential questions to ask about Public Service Loan Forgiveness.
Teacher Student Loan Forgiveness
No one goes into teaching for the money. But when student loans leave you thousands of dollars in debt, scraping out the payments on a teacher’s salary can be downright overwhelming.
Fortunately, there’s a specific Teacher Student Loan Forgiveness program for those who work in underserved communities and/or subject areas.
Forgiveness will be dependent upon where you teach, what you teach and how long you teach, and the maximum amount you can receive is $17,500. But you can discover additional options for graduating from student debt with these teacher student loan forgiveness programs.
Nursing Student Loan Forgiveness
Medical debt can be an additional burden for students, so nursing student loan forgiveness offer some help with the debt.
In addition to a couple of specific loan-forgiveness programs for nurses, you can also find debt relief through programs at some hospitals. Eligibility requirements can include holding an advanced degree, having a specific loan type or working in a specialized department.
Other medical professionals, including doctors, can find student loan relief at the national and local level through the Association of American Medical Colleges.
Perkins Loan Forgiveness
The Perkins loan program program ended on Sept. 30, 2017, but you’re still on the hook for paying off any of the Perkins loans you took out. That said, if you work in public service — including teaching, law enforcement and the military — you could qualify for a partial or total discharge of your Perkins loan.
Depending on your career, you could receive 100% loan cancellation for five years of service, which is distributed in annual increments.
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