The CARES Act and Student Loans

As noted in our post last spring, the CARES Act provides some relief for those repaying student loans. According to the Federal Reserve, the average monthly student loan payment ranges from $200 to $300 and in 2010, the total of student loan debt surpassed auto loan debt and credit card debt. Clearly, student loan debt affects many families, and the automatic suspension of principal and interest payments on qualifying student loans through September 30, 2020, as provided by the Coronavirus Aid, Relief, and Economic Security (CARES) Act, has been a boon for those whose loans qualified.

If you are financially able to make payments on your student loans, however, it would save you money in the long run. Any payments you make between March 13 and September 30 will be applied directly to principal! This will help you pay off your loans faster and reduce interest cost.

If you are hoping to benefit from a student loan forgiveness program (such as those that might be offered in exchange for teaching or practicing medicine in under-served areas), there is more good news. The suspended payments count towards any student loan forgiveness program, as long as all other requirements of the loan forgiveness program are met.

If you wish to check on details of your student loan debt, you can check your information on the National Student Loan Data System at https://nsldsfap.ed.gov/nslds_SA/. Through this website, you will be able to review your Financial Aid information including, federal loans, grants, and current student loan status. You can find additional information about student loan repayment options on the Consumer Financial Protection Bureau website .

Keep in mind that as it stands now, suspended payments must resume beginning October 1, so start planning accordingly. You can find additional information about student loan repayment options on the Consumer Financial Protection Bureau website . In addition, any updates from the federal government will likely be posted at studentaid.gov/announcements-events/coronavirus.

Mary Weinand

Today’s guest blogger is Mary Weinand, ISU Extension and Outreach Human Sciences Specialist in family finance, who serves southeast Iowa.

Barb Wollan

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

More Posts

Defining Financial Wellbeing: A New Way of Thinking

What comes to mind when you think about your financial wellbeing?  It may be paying bills on time, understanding your credit report, keeping financial accounts in balance, managing investments, or a long list of other financial tasks.  Although these items are important aspects of our financial lives, recent research has found that other key factors may be critical to our financial well-being

The Consumer Financial Protection Bureau talked to consumers across the country to learn what financial wellbeing means to them.  Based on those interviews they found that four elements were mentioned:

• Feeling in control

• Capacity to absorb a financial shock

• On track to meet goals

• Flexibility to make choices

Financial wellbeing is not based on income level.  It’s more personal and based on satisfaction with your financial situation. Based on their research the CFPB developed a definition of wellbeing as having financial security and financial freedom of choice, in the present and in the future.

To measure your financial wellbeing, link to the wellbeing tool. Answer ten questions to get your score. You will not share any personal financial data. Steps to improve financial wellbeing are included.

Guest Blogger Phyllis Zalenski Family Finance Field Specialist…Providing Financial Management education for individuals and families including spending plans, budgeting for your needs, consumer decision-making, dealing with credit and debt, and planning for your future – savings, insurance, and retirement.

Brenda Schmitt

Brenda Schmitt

A Iowa State University Extension and Outreach Family Finance Field Specialist helping North Central Iowans make the most of their money.

More Posts

Brushing – Another Scam

I find myself spending more time cleaning and pitching now that I am spending more time at home. In the toss-pile is a large collection of freebies that were handed out at fairs and tradeshow booths…stress balls, pens with weird gizmos attached, whistles, mini Frisbees, etc.  There is even a package or two of wildflower seeds that arrived in the mail promoting the planting of pollinator fields to save the bees.

The latest free thing that is arriving in the mail these days are UNIDENTIFIED seeds from an UNKNOWN source. Seeds that have not been ordered.  They are arriving mostly from China and Uzbekistan. This is of great concern to the USDA and the State Departments of Agriculture.  These seeds could be an invasive plant that does not currently exist in the US or they may contain seed-borne diseases that do not exist in the US. Some packages have an unknown seed treatment that could be dangerous to human health.

Most likely, these packages are part of a BRUSHING scheme….fake orders used in e-commerce to boost a seller’s rating. Because a shipment has to take place to make an order valid, sellers may ship an empty box or some cheap item. These fake orders can boost the seller’s rating, which can make it more likely that their item will appear at the top of search results on e-commerce sites.

What the USDA and the State Departments of Ag want you to do is…

– Do not plant the seeds

– Do not open the packets

– Do not eat the seed.

– Retain the packages and contact the IDALS (515.281.5321 – Iowa Department of Agriculture and Land Stewardship) or USDA (515.251.4083 – US Department of Agriculture) for further instructions.

More information from our ISU agriculture colleagues and from the Iowa Department of Agriculture and Land Stewardship.

Brenda Schmitt

Brenda Schmitt

A Iowa State University Extension and Outreach Family Finance Field Specialist helping North Central Iowans make the most of their money.

More Posts

Public Health Scam

One of our colleagues received this message from the county public health office where she works. If it could happen in one county, it could happen anywhere… as always, be skeptical of unsolicited calls or emails, especially when they request payment!

The email read:

A local bank just made me aware of a scam going around regarding Public Health. Someone is calling people saying they are with the local Public Health office and telling that person they have been exposed to a positive case. The caller then says the office wants to send a COVID-19 test kit and all they need is a $50 processing fee. Public Health will NEVER ask for your banking or credit card information and we wouldn’t be charging for a COVID test to be done.

Barb Wollan

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

More Posts

Prepaid Card? Doesn’t replace bank account

Banking is something many of us take for granted, so it may surprise you to learn that a noticeable share of American adults (perhaps ten percent) are UN-banked — meaning they don’t have any connection to a bank or credit union.

Some people are satisfied without bank accounts, using prepaid cards to: receive direct deposit from wages or tax refunds; pay bills; and make retail purchases. Of course, there are fees for prepaid cards: users can compare and choose the card with the best fee structure for the way they will use the card.

Prepaid card users may decide a few fees are worth it to avoid the “hassle” of bank account management. But credit union or bank accounts offer important advantages:

  • Strengthen credit scores. Using prepaid cards does not contribute to your credit history, while a solid banking relationship does. That may be especially important currently, when other aspects of credit history may be “fuzzy.” A recent Wall Street Journal article points out that because many lenders and businesses have offered easy terms for deferring payments during the COVID emergency, a credit report may fail to show the full picture of a prospective borrower’s financial stability. With that in mind, some lenders may rely more heavily on banking information when evaluating credit risk.
  • Safety. Bank accounts, debit cards, and credit cards all offer substantial legal protections to the owners when the account or card is lost, stolen or misused through fraud. Prepaid cards offer little or no protection.
  • Stability. I recently tried to assist a woman who knew she had received her $1200 economic impact payment; it had been deposited to the same prepaid card she had used to receive her 2018 tax refund. BUT she didn’t have the card anymore, and she didn’t even know what company had issued it. She was unable to make use of that valuable benefit. Based on the information from that 2018 return, I was able to help her search for the bank and find a phone number to call. I don’t know what happened after that. I hope she was able to get a replacement card somehow, but I imagine that she had to jump through some hoops (including proving her identity) before she was able to do so. A stable banking relationship makes life easier in many ways.

If someone you know is going through life unbanked, you might suggest they reconsider. Being “banked” has distinct advantages. If they face obstacles to obtaining an account, it might be worthwhile to contact a local bank or credit union for guidance. Some financial institutions offer programs that help people again qualify to open accounts.

Barb Wollan

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

More Posts

ID Theft Protection

Lately I find myself asking my husband if he got the mail because there is not the usual pile waiting for me on the kitchen table. Then I started to wonder if he had already sorted and tossed the junk. Nope! It is not my imagination…there truly is a lot less junk mail these days since COVID 19 began. So much less that it has created a collapse in mail volume. The decline could be as much as 60% by the end of the year, which is bad news for the US Postal Service…considering it has been struggling for about 14 years.

On the other hand,…the supply of junk e-mail continues to grow at a steady pace.  It has even creeped into my text messages. Some emails and text messages look very authentic so, it is important to be alert to scammers. Be wary of messages requesting immediate action. Poor grammar and spelling errors are a good indication the email is fraudulent.

Nearly all e-businesses have a process in place for reporting such emails and texts that are made to look like they are coming from their legitimate company…Facebook, Amazon, etc. You can do a quick search and find how best to notify businesses when you receive messages from scammers; examples include phish@facebook.com, stop-spoofing@amazon.com, spam@uspis.gov. You will probably get an auto-reply indicating that your message was received and appreciated but don’t expect the company to personally reply to your email.

If you are concerned about data breaches or identity theft, you may be considering signing up for identity theft protection services. Before you enroll, it is important to weigh the costs and benefits of various types of services. You also can compare them with free and low-cost services. The federal government’s IdentityTheft.gov website provides free personal recovery plans and step-by-step guidance to help identity theft victims recover.

Brenda Schmitt

Brenda Schmitt

A Iowa State University Extension and Outreach Family Finance Field Specialist helping North Central Iowans make the most of their money.

More Posts

Tips for Shopping Online

On-line shopping has been increasing steadily for over a decade, and now, as COVID keeps people at home more, new users are entering the online shopping world. Do they know how to be a “smart shopper” in an on-line environment? This three-minute video from the Federal Trade Commission (FTC) gives practical tips for how to efficiently compare product features and prices, find coupons, and make sure you’re dealing with a reputable seller.

When money is tight, finding a coupon or avoiding shipping costs makes a difference, but it’s easy to forget those steps. I’m a moderately-experienced online shopper and I learned some new tips; I also recognized some tips I’ve heard my very computer-literate adult children discuss.

The FTC “On Guard Online” website is devoted to helping consumers stay safe online, with videos, games for children and teens, and more. It’s definitely worth checking out!

Barb Wollan

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

More Posts

Officially ending a marriage simplifies taxes

Every year during tax season I come across people who are still legally married even though they haven’t had contact with their spouse for years. They cannot file a tax return as “Single.” If they aren’t divorced or legally separated, that leaves them stuck with a “Married Filing Separately” (MFS) tax status.

There are several disadvantages to using the MFS filing status, including:

  • You are not eligible for Earned Income Credit.
  • You can not deduct student loan interest paid.
  • You do not qualify for Education Credits (American Opportunity or Lifetime Learning Credit) related to college expenses.
  • You must know and list your spouse’s name and social security number on your tax form; if you cannot, then your tax return will need to sent in by mail instead of submitting electronically.
  • If one spouse itemizes deductions, the other spouse must also itemize deductions.
  • On the Iowa return, you must report approximately how much income your spouse has; if you cannot, then your Iowa return will need to be sent in by mail.

There is an exception – one group of people who are split from their spouse but do not have to file MFS. These are people who are paying the cost to keep up a home for someone else (typically a parent who is keeping up a home for his/her children).  These individuals can be “considered unmarried” if they have not lived with their spouse at any time during the last six months of the year; if so they qualify for “Head of Household” filing status, which allows them to receive the Earned Income Credit and other tax benefits. However, when the children are grown and the taxpayer can no longer claim “Head of Household,” then they must use Married Filing Separately as their tax status.

“What’s the point of all this?” you may be asking.  I have two reasons for covering this topic today, as this long COVID-extended tax season finally approaches its end.

  • First, I’m tired of breaking bad news to people – the news that their tax return may be difficult to file and they can’t get some of the tax credits they might want.  
  • Second, to put forth the suggestion indicated in the title: If the marriage is over, maybe it would be smart to make that official. If you have reasons to avoid divorce, consider a legal separation if possible. Taking that step would make tax filing easier for both parties.

Barb Wollan

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

More Posts

Laid Off? Health Insurance Options

It’s tough to live on reduced income after a reduction in hours or a job loss, but unemployment benefits can help to bridge that gap, at least for a while. The expanded eligibility and expanded benefit amount provided through federal legislation in response to COVID-19 has helped thousands of Iowans.

Losing employment (or even reduction in hours) often means that workers also lose their health insurance coverage. Depending on the situation, that loss may be even more disruptive than the loss of income. Fortunately, there are some good options available for obtaining affordable health insurance outside of your workplace.

Free Insurance. If your income is below a certain threshold, you may be eligible for free health coverage through the state, and you can apply at any time during the year. This coverage is available to everyone, regardless of whether they are disabled or have children in the home, thanks to the fact that Iowa signed on to the expanded Medicaid portion of the Affordable Care Act.  The income guidelines for this option depend on family size:  for a single individual, the 2020 income limit is nearly $17,000; for a family of four, it is nearly $35,000. There are some nuances in the recording of income, so even if your income is a little above the limit, it is worth applying – you may be eligible. ALSO – even if your income for the first six months of the year puts you over the limit, it is still worth applying if your situation has changed, because the income limits are considered on a month-by-month basis. To apply, contact the Department of Human Services at 855-889-7985.

Coverage for Children. Through Healthy and Well Kids in Iowa (Hawk-I), children and teens under age 19 are eligible for free or nearly-free health coverage up to much higher income levels, so if you are having trouble affording health insurance for your children use the same DHS phone number (855-889-7985) to inquire and apply.

Income too high for free coverage? There are still options! The high cost of health insurance often means that even those with average incomes may find it unaffordable. Through the Health Insurance Marketplace, you can find high-quality health insurance plans; you may be eligible for help in paying the premiums if you do not have access to an affordable employer plan and if your income is below a generous limit. The 2020 income limit here is $49,960 for a single individual, and $103,000 for a family of four. You will be expected to pay part of the premiums, based on your income, but the government will pay the rest. The Kaiser Family Foundation’s Health Insurance Subsidy Calculator will provide a good estimate of the help you might receive.  

To enroll mid-year in coverage through the Health Insurance Marketplace, you must be eligible for a special enrollment period; generally that ends 60 days after your previous coverage ends. Learn more or enroll at www.healthcare.gov or by calling 800-318-2596. Many community health centers offer assistance in considering options and enrolling, as well. 

Barb Wollan

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

More Posts

Food Assistance and Increased Options

With job losses skyrocketing because of the coronavirus pandemic, hunger is a growing issue for many Iowans. To help alleviate some of the stress, the Department of Human Services requested an addendum to the state plan for The Emergency Food Assistance Program (TEFAP). The addendum has allowed for increased access to food distribution to address food insecurity related to the COVID-19 pandemic. Iowans who qualify for food assistance can receive increased funds – and in April and May, that total monthly benefit was $646 for a family of four!

Iowans who are in need of food should call 2-1-1 or contact their local food bank to find TEFAP providers in their area. There are also increased options to use food assistance funds to purchase food online. Some retailers like Walmart and Amazon now accept Electronic Benefit Transfers (EBT) and Amazon is able to deliver to all zip codes in Iowa.

The fastest and easiest way to apply for benefits is to complete the online application located at: https://www.dhs.iowa.gov/how-to-apply. If you don’t already have Food Assistance benefits, you can apply anytime in June and if you are eligible, you will get the full monthly maximum amount of benefits for your household size.

Food pantries might be another option to make ends meet during this crisis. Food pantries are permanent sites that store and distribute groceries to people in need. They are commonly located at community centers, faith based organizations or other sites. Many food pantries have set distribution hours, so it’s best to call before you visit. You can check the website FoodPantries.org for local pantries near you.

Many communities in Iowa offer Mobile Pantries. These might be monthly, bimonthly or quarterly food distributions and are often operated by the Food Bank of Iowa. Community partners throughout Iowa set up these farmers market-style distributions. You can check mobile pantry schedule for a list of all our mobile pantries, or find a mobile pantry near you on the food resources map.

The summer food service program (SFSP), administered by the Iowa Department of Education, offers nutritious meals and snacks to school children ages 18 and under during the summer months. You can check the Iowa Department of Education website for local information, https://www.educateiowa.gov/pk-12/nutrition-programs/summer-food-service-program

Soup Kitchens and Meal Sites prepare and serve meals to people in need on a regular basis. Most soup kitchens and meal sites have set meal times on a daily, weekly, or monthly basis so again, be sure to call before you visit.

If you are farm family, whose operation has been directly impacted by the coronavirus pandemic there is assistance available through the Coronavirus Food Assistance Program. This program can provide direct relief to producers who have faced price declines and additional marketing costs due to COVID-19. The USDA is accepting applications through August 28, 2020, more information can be found at https://www.farmers.gov/coronavirus.

Guest Blogger: Mary Weinand
Family Finance Field Specialist
Iowa State University Extension
Guest Blogger
Mary Weinand
Family Finance Field Specialist
Iowa State University Extension and Outreach
Brenda Schmitt

Brenda Schmitt

A Iowa State University Extension and Outreach Family Finance Field Specialist helping North Central Iowans make the most of their money.

More Posts

    

Subscribe to “MoneyTip$”

Enter your email address:

Delivered by FeedBurner

Archives

Categories