The PSLF Limited Waiver Explained

The Public Service Loan Forgiveness (PSLF) Program was established in 2007 to help non-profit and/or government workers with their federal student loan balances. Under the original guidelines, only those with Direct Student Loans – Subsidized, Unsubsidized, PLUS, and Consolidated – would receive credit toward forgiveness. Limitations were also placed on the loan payments themselves. Payments must have been made on-time, in-full, and within the correct repayment plan.

  1. Allowing past payments to Perkins and Family Federal Education Loans (FFEL) to count toward forgiveness – these types of loans were ineligible under the original PSLF Program.
  2. Allowing borrowers to consolidate their federal loans without losing eligibility for forgiveness – previously, borrowers who consolidated individual federal loans (Direct or non-Direct) to a Direct Consolidation Loan would have to restart their eligible payment clock.
  3. Allowing partial payments to count – payments that were made for less than the monthly billed amount would not count toward PSLF.

These changes have allowed many additional borrowers to become eligible for forgiveness under PSLF, and the full list of changes can be viewed on the PSLF Limited Waiver Fact Sheet.

As of now, the October 31, 2022 deadline has not been extended (please note that this differs from the recently announced administrative forbearance extension ending on December 31, 2022), so make sure to contact your lender if you believe you are eligible for forgiveness! You may also contact a Family Wellbeing Specialist, with a focus on Family Finance (https://www.extension.iastate.edu/humansciences/finance) for additional assistance with navigating your student loans.

Ryan Stuart

Ryan is a Human Sciences Specialist in Family Wellbeing and an Accredited Financial Counselor®. He focuses on educating and empowering all Iowans to independently make positive financial decisions throughout their life course.

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Just Testing

Today’s tip is directly reprinted from Consumer Action’s Scam Gram.

A major Maryland healthcare system recently warned patients about phone calls asking recipients to schedule tests “ordered by your provider.” The calls are a ruse to gather personal information, as the callers ask for you to “provide or confirm” details such as your name, cell phone number, doctor’s name, Social Security number, insurance information and home address. While this warning came from the University of Maryland Medical System, similar pretexts are occurring elsewhere, like this fraudulent email that made the rounds at the University of California at Berkeley. The warning notes that callers can be very creative in gaining as much information they can, quickly. They even spoof company names to appear as if they’re calling from a lab or with a lab order from your doctor’s office. Hang up. Do not provide or confirm any information the callers ask for.

Consumer Action is a respected consumer education and advocacy non-profit based in California. You can subscribe here to receive their monthly Scam Gram by email.

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.

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VA Benefits Update and Resources

While the Inflation Reduction Act is currently being signed into law, another (very) recently passed bill also has the potential to impact millions of Americans – the Sergeant First Class Heath Robinson Honoring our Promise to Address Comprehensive Toxics – or PACT Act. This bipartisan-supported legislation seeks to expand VA healthcare and disability benefits for Veterans, who served over a period of several decades, and were exposed to a variety of hazardous toxins such as those emitted by burn pits, the use of Agent Orange, and radiation emitted from nuclear weapon testing. This is a long-awaited result for Gulf War/post-9/11 and Vietnam-era Veterans.

The Department of Veteran Affairs created a new webpage, a PACT Act FAQ handout, and a Survivor Benefit handout to help spread the word; Veterans are also encouraged to use the excellent Veteran service resources that already exist:

  1. County Veterans Offices – every county in the state of Iowa has a designated Veteran Service Officer who can assist with VA Healthcare enrollment, disability claims, and many other issues.
  2. VA Resource Webpage – this Dept. of Veteran Affairs webpage is dedicated to providing support on all VA-related topics, including an email subscription request link.
  3. Military OneSource – many Veterans who are serving the remainder of their contract on Inactive Ready Reserve (IRR) are still eligible for the many confidential, non-medical support services they received on active duty or active reserve status.
  4. Iowa State University Extension and Outreach – programs such as Powerful Tools for Caregivers, Volunteer Income Tax Assistance (VITA), and 1:1 Financial Consultations are all available to Veterans, regardless of status.

Ryan Stuart is a U.S. Navy Veteran and previously served as a Personal Financial Counselor for the Iowa Army National Guard. You can schedule an appointment with him to discuss the Thrift Savings Plan, Blended Retirement System, VA Benefits, and more!

Ryan Stuart

Ryan is a Human Sciences Specialist in Family Wellbeing and an Accredited Financial Counselor®. He focuses on educating and empowering all Iowans to independently make positive financial decisions throughout their life course.

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Back to College – safely

It has been a while since I sent a child off to college and even longer since I was there myself. If I recall accurately, my dorm room had a plug-in at my desk and at the desk of my roommate and there was one other outlet we used for vacuuming and a frig. When I sent my kids off to college, they had computers, phone and watch chargers, a printer, a frig, a mini crockpot and who know what else and they all required electricity. I can only imagine the number of extension cords and splitters used…a fire hazard and an inspector’s worst nightmare.

Since then, many college dorms have been remodeled to update the electrical systems and to add wifi. The rooms that accommodated 2 or 3 people were split to create two one-person rooms.  Surveys of students not wanting to live in dorms showed that today’s students are not used to being roommates and do not wish to share space…especially if they never shared a room with a sibling.

So, what can a college student do to protect themselves and their property while living in dorm?

Though it is inconvenient to lock and unlock your room every time you come and go, keeping your doors and windows locked, even if you’re just running across the hall for a moment, is a smart safety measure. Never open the door for strangers and verify who is on the other side before opening the door.

Having a dorm security camera is a great way to protect yourself in the off chance something goes missing. A wireless motion-activated surveillance camera can capture high-definition video and sound which is streamed live to your phone.

A small fire resistant safe in your dorm room can keep jewelry, electronics, credit cards and cash safe. Look for something heavy-duty and keyless. For larger items, you might want to consider insurance to cover the expense if it stolen.

As a college student, you have no way of knowing how many copies of your room key has been “lost” or duplicated. A security bar is also useful for safeguarding against ‘forced’ entries.

Keep pepper spray with you. A recent study revealed that a woman aiming pepper spray at them generally caused a would-be attacker to flee. A woman who attempted to defend herself normally wasn’t worth the trouble.

Be sure to enter all your emergency numbers in your phone, have a physical copy of the numbers in your room and know all the emergency exit routes.

Always use the elevator.  Stairwells are a common choice for attackers. If you must use a stairwell, bring a friend with you. If you are on the elevator with someone who makes you feel uncomfortable, get off at the next floor. If you are about to get on an elevator and the current occupant make you uncomfortable, wait for the next elevator. 

Never take your safety for granted. College life can be an exciting part of your life but you want those memories to be good ones.

Brenda Schmitt

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

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Savings Strategies

Note: this post builds on yesterday’s post about having a meaningful reason to save.

Once you have a reason why you want to save, or save more, the next step is to “find” money to save. That generally means either increasing income or reducing expenses, which means something will need to change. Change can be hard, but most of us can succeed if we have a good enough reason.

To reduce expenses, you can make several small changes; for example, eat out one less time per week, drink one less can of pop each day, or stop buying magazines and read them at the library instead. OR, you could make one big change that saves money; for example, you could find a roommate to share housing expenses or move to a smaller (less expensive) apartment. To increase income, you could ask for more hours at work, get an extra part-time job, collect cans and bottles for the 5-cent deposit, or have a garage sale.

Once you have “found” some money by reducing expenses, increasing income, or both, the next key is to MOVE that money to a savings account or to some location where you are unlikely to touch it.

This seems like an obvious step, but it can be overlooked.

Imagine a scenario where you exercised self-discipline by skipping your morning coffee shop stop, bringing your lunch to work, and stuck to a limit at the grocery store! You’re proud of yourself! But if you don’t actually MOVE the money to your savings account, it will just end up getting spent on something else.

To make sure the money gets moved to savings, one helpful strategy is to treat savings like a bill you pay each month. If you’ve decided you can save $50/month by making some changes in spending, then “pay” that saving bill just like you pay your utility bill and your car payment. That approach increases your chance to be successful with saving. Even if you are saving small amounts, building the habit of saving each month is a way to reach your goals, whatever they may be.

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.

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Trying to Save? Ask Why?

As we approach the end of summer, it is time, for many families, to shift back to regular schedules and regular habits. We may think of summer as a break, and when summer is over we go “back to reality.”

If the end of summer has you thinking about launching positive habits, consider regular saving as a useful habit to establish (or re-establish). Saving money may feel difficult or impossible to many people, but for most Iowans it is possible.

One key to saving is to have a meaningful reason you want to save. Hint: if you’re trying to save just because I suggested it, it probably won’t work.

Ask yourself WHY you want to save money? How will your life be better when you save? There are no right or wrong answers – only answers that mean something to you. Some people save for a specific purchase (new tires, new furniture, a vacation, …). Some may save to reduce stress – having a financial cushion helps them sleep better at night and worry less. Some save for retirement, after seeing friends and family members struggle to get by on Social Security alone.

If you truly WANT to save, you will be more motivated, and less likely to give up when obstacles arise. So start by thinking about WHY you will save, and make sure it’s a reason that is important to you.

Tune in tomorrow for additional ideas on how to succeed with saving money!

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.

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Surprise Lawsuit? Get help!

Financial stress is high these days, thanks to inflation. Imagine adding to that a notice of a lawsuit seeking you to pay a bill of $10,000 or more that is owed by your relative to a nursing home! That would be enough to tip stress levels over the edge!

Unfortunately that scenario has been increasingly common for siblings, nieces or nephews, children or grandchildren or other relatives and friends of individuals living in long term care facilities, according to a recent article in Kaiser Health News, a reputable source of information on health policy issues.

If this should happen to you, don’t panic! There are steps you can take, and help is available. Seek information. Ask for documentation of the debt, AND ask for documentation of why the facility sees you as liable for the debt. And get help – you do not need to deal with this kind of nightmare on your own.

This is a good time to offer a couple of key reminders:

  1. Never pay debts belonging to someone else without exploring whether you are actually liable to pay the debt. As I wrote earlier this summer, you may not even be responsible to pay debts owed by your spouse after he/she dies.
  2. Be careful what you sign. In some cases, nursing homes have produced a document signed by the child (or sibling, niece or other person) in which they actually did accept responsibility for payment. 
    How could this happen? When a person is admitted to a long-term care facility, there is a mountain of paperwork. Amidst all that paper there could be a form by which the signer agrees to pay any unpaid bills. Be sure to read documents before signing them.
    Note: federal regulations prohibit facilities from requiring such forms before admitting a patient.
    Even if you did unknowingly sign such a document, it may be possible to fight back on the grounds that you did not knowingly accept that responsibility.

According to Kaiser Health News, in many cases lawsuits demanding payment are based on fraudulent grounds. Respondents should be sure to consult an attorney. In Iowa, the Legal Hotline for Older Iowans is a resource available to everyone over age 60, regardless of income; contact them at 800-992-8161.

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.

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Making the Switch to Self-Employment

The thought of self-employment can be alluring – being your own boss, flexible hours, creative freedom – but in reality, the decision is much more complex. As an employee, you may take for granted the tasks that are handled by your employer, such as setting the daily schedule, collecting taxes, and providing benefits. Even office supplies, equipment, and access to clients are likely in place before an employee starts her/his position. A self-employed individual must handle all that on their own.

This is not to say that self-employment is out of reach, but being prepared to make the switch is an absolute necessity. If you are interested in taking that leap, then the following resources will help you on your way!

Federal Resources

Perhaps the most significant difference between traditional employment and self-employment is with taxes and the IRS. The ‘when’, ‘how’, and ‘why’ of taxes are very different for individuals and businesses – far too different to cover in detail here – but these tools are a great start:

State & Local Resources

Luckily, you are not on your own when it comes to planning your small business. Iowa has several Small Business Development Centers located throughout the state. The services are free and designed to help small business owners with a number of topics:

In addition to the IRS, and Iowa’s Small Business Development Centers, Iowa State University Extension and Outreach can also assist with your self-employment plan. Our Community and Economic Development Specialists have several programs focused on small businesses, and designated Human Sciences, Family Wellbeing Specialists can help with creating a household budget – note: this is step #1 in the “Starting a Business in Iowa Checklist”!

Ryan Stuart

Ryan is a Human Sciences Specialist in Family Wellbeing and an Accredited Financial Counselor®. He focuses on educating and empowering all Iowans to independently make positive financial decisions throughout their life course.

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Financial Independence? Or Interdependence?

It’s my turn to write a financial blog post the week of Independence Day, and the obvious topic is to write about Financial Independence – which, for the average person, equates to retirement – the time when you have accumulated enough assets so that you can live on those assets rather than working. 

But when I think about it, I’m not convinced there IS such a thing as financial independence. I’m getting pretty close to a point where I might have enough assets to retire, but will that make me independent? I’ll still want to drive on roads that are paid for by my community, or county, or some other larger group of people. I’ll still want to use electricity, but I can’t pay for the electric grid on my own… I need everyone else to pay in too, or the whole system will fall apart.  

If I ever had a fire, I’d be grateful that the Red Cross showed up to help; likewise I’m grateful for the volunteers who make community beautification happen, and those whose volunteer work supports my public library, and those whose time and talents make community theater productions possible. An even less tangible example: my neighbors who have beautiful flower gardens that add beauty to my life. You get the point: even if we have more money than we need for ourselves, we still depend on others. And others depend on us. 

We value our independence as Americans. But I suggest perhaps we should give just as much attention to the importance of our INTER-dependence.  It’s worth remembering to appreciate all the services, amenities and intangible benefits we gain from being part of a larger community. It’s also worth supporting them. We support them financially in several ways: with our shopping (have you ever willingly paid a higher price in order to shop local?); with our tax payments; and/or with our charitable gifts. We may also support them with our time and skills, and just by being a good neighbor. That INTER-dependence is essential to keeping our communities and our country strong.  

Nearly all of us have had times when, if someone was “keeping score,” it would be clear that we RECEIVED more than we GAVE to this interdependent system. The nearly-universal example is when we were students in K-12 schools or at a college or university, especially if we received grants or scholarships. Many of us may encounter similar situations as we age. And certainly, when we have a serious crisis (like that home fire I mentioned above), we will likely receive more than we give or deserve.  

Thankfully, there’s no need to “keep score.” Instead, we’re better off simply celebrating the give and take that is central to the wellbeing of our communities and of our nation.  What INTER-dependence will you celebrate this week? 

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.

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Buy Now, Pay Later?

Recently I was in the store, and while walking in the aisle, I saw a sign saying “ Buy now and pay later – see the associate for details.” I might expect to see signs like that during winter holiday shopping, but not in the spring!

First, what is Buy Now Pay Later? Basically it’s an option that lets consumers finance their purchase by making small payments each month, without paying any interest. Example: purchase an air fryer for $125 by paying $25 at the time of purchase and promising four future payments of $25 (perhaps monthly or bi-weekly).

According to a 2021 survey by the Federal Reserve Bank of St Louis, people chose Buy Now, Pay Later for five main reasons, listed below in order of preference.

  1. The largest group (78%) stated that it was more convenient for them.
  2. The second reason given was that the consumers did not want use their credit card. Even though they could have purchased the product with a credit card, they feel they were better off without charging it to their credit card.
  3. The next reason was that it was the only way they could afford the product. This is certainly understandable for consumers who are living paycheck to paycheck on a tight budget. Any large purchase would constrain their budget; small payments make the purchase possible.
  4. Some people did some analysis to compare payment options, and concluded that “buy now, pay later” was the least-costly payment option available to them.
  5. Lastly, for some consumers “buy now, pay later” was the only payment method they had – they did not have checking accounts or credit cards available, and worked strictly with cash.  

It is important to point out that even though “Buy Now, Pay Later” does not charge a fee to the consumer, it is not truly free. The retailer offers it in cooperation with an outside finance company, which charges the retailer a fee for the service. Some retailers expect to see increased sales that will make up for the added cost; other retailers may pass the cost on to the consumer in the form of higher prices.

Budgeting for large purchases requires some planning. For those who do not have savings or credit available to cover the cost of a large purchase, Buy Now Pay Later may prove to be a very helpful option, enabling them to acquire higher-cost items they would not otherwise have been able to afford.

A caution: what if I buy an air fryer today (needing $25 payments), and a bike next week (with payments of $40) and a chainsaw the next week ($20 payments)?  Next month I’ll have a bunch of unusual payments to make. If it seems “easy” to make large purchases, consumers may make several purchases within a few weeks and find themselves overcommitted. Like all tools, “Buy Now, Pay Later” can be useful, as long as we use them carefully!

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.

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