Archive for the ‘student loans’ Category

Student Loans: Income Based Repayment-Is it For You?

Saturday, February 27th, 2010

Student loans have become almost the norm in our society.  I have blogged about it several times-so this is not another rant about the dangers of going overboard on student loans…..

Last year the government began a new program called Income Based Repayment-to assist those whose student loan repayment plans were taking up so much of their income each month-that they couldn’t afford them.

I have identified a few helpful links to assist you in determining if you are eligible.

I have been told by several readers that my investing blog posts are difficult to understand-(even though I try hard to make them easy/simple)  Not your fault, I just need to get better at   ’splaining.

But the student loan world is so complex, dark, and difficult-that I keep thinking Darth Vader is going to come at me with his light saber!!!!  For you young people, who don’t remember Star Wars-Let’s see……-maybe the villain from Twilight-”James”…..(yes, I had to google that, no I haven’t seen the movie, or read the books…..)

So anyway-the student loan universe is difficult to maneuver through-because there are so many different programs, options, acronyms-oh my!

But in short, the Income Based Repayment calculator is available to help you determine if you qualify for this plan.

The second part is that if you do qualify for Income Based Repayment, then you may also qualify for loan forgiveness after ten years of paying back your loan-if you work for the government, or certain 503-C based organizations.   Public health nurses would certainly fit here, along with school nurses-again if you meet the income guidelines.  So any money remaining after 10 years on the program are forgiven….

Again check this resource developed by the Feds, to help determine whether you may qualify-remember even if you work for a loan forgiveness eligible job, if you haven’t  been placed on the IBR (income based repayment) program-you are out of luck.

This link will help to direct you to the bank, Sallie Mae or whichever place you got your loan’s website for info…..

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Student Loans: The Great Lie!

Tuesday, February 16th, 2010

Student loans are worth the investment.  You will earn a lot more money, with your degree, and it will be no problem to pay back.

These are just a couple of the lies, or at best,  miss-leading statements about student loans.

In this article, in the “Wall Street Journal”,  Mary Pilon reports the case of a student loan, that had ballooned to $555,000.  Yes, that is a cool 1/2 million plus.   The loan belongs to a family doc, so what’s the big deal, they are all rich aren’t they??

Well the average salary for a family practitioner is $145,000 bucks a year-great salary, way above the national average for salary.

However, with a loan that size, with interest accruing, even if half her salary went to pay back the loan, it would take more than 10 years to pay that back.  So great salary, ain’t so great if half of it goes to pay back your student loan.

Do I think it is evil to borrow money to go to college.  No, of course n0t.  Do I think it can be stupid to borrow $100,000 to pay for tuition, room, board, and beer, for a degree that pays on average 40, or 50 grand a year or less-yes!

So, before having a  knee-jerk reaction and borrowing money to go to school.  Check out ways to decrease your burden:

  • Go to a less expensive school.
  • Go to school part-time.
  • Drive a clunker, and use car payment money to pay for food, or books.
  • Join the service, and let them pay for your education.
  • Get your employer to help pay the bill.

The good news is that you can get a 2 year (which usually takes 3)  RN degree at a public institution for very little investment.  Even a four year BSN at a public school is a good investment-but it can be a great investment, if you limit your borrowing.

So before you call Aunt Sallie Mae, to borrow a hunk of cash, think about it.  Make sure there is not a better way.

And if you do borrow, there are ways to help pay back the money-see this post about one of the federal loan repayment programs -(NELRP)-  for working in an under-served hospital or clinic-as a nurse.

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Nursing School Loan Forgiveness-NELRP-Yes, That is Something Millionaire Nurses Would Do!

Monday, February 8th, 2010

Student loan forgiveness for nurses, from the feds, is available for 2010.  The deadline for funding in this years program is March 4th.  So if you know any nurses who may need this assistance, please send them a link to this post.

Loan forgiveness programs have been around for years.  I took advantage of a state program, similar to this, years ago-practicing 5 years in a rural community, for loan payback-They got their money’s worth-as I never left!!!!

The Nursing Education Loan Repayment Program or NELRP, as it is know by acronym loving bureaucrats, is a loan repayment program funded by the federal government to help with nursing shortage in under-served areas.

An overview of the program can be found here at the Federal Governments Health and Humans services site. A few points about the program:

  • You receive 30%/year of your eligible loan forgiveness for the first two years of service.
  • If you agree to serve an additional year, they will pay another 25% of your loan off-so if you serve three years, they will have paid 85% of your loans for you.
  • You have to work for what is known as a Critical Shortage Facility-these are public non-profit institutions that meet certain criteria.  They have to serve a population that is high in medicaid/medicare, critical access,  or indigent population.
  • The money you receive is wired to your account, and then has to be used for loan repayment.
  • Many types of student loans, such as Stafford, and private loans qualify.  Student loans for parents, do not qualify.

Cautions if you decide to apply:

  • If you hate nursing, and quit, the money with interest will have to be paid back within 3 years.
  • The money is considered income, so you will definitely need to be prepared for a higher tax bill-don’t wait to April 15th and realize your taxes are double what you thought.
  • If you transfer or move to another eligible facility, that is not a problem, but must be approved-IN ADVANCE!

A pdf file, with application and frequently asked questions, is located here. Like most government programs the application appears complicated.  So make sure you start your application process well in advance of the March 4th deadline.

You may want to talk to your nursing school, your student loan holder, and your potential place of employment to get additional information. Now if anyone has taken advantage of this program, please leave us a comment with your opinion about the program.

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Student Loans: Blessing, or a Big Drag?

Wednesday, October 28th, 2009

I have recently written an article about student loans.  The gist of the article is that in this economy, more and more out of work people are going back to school.  Many of them are choosing student loans to pay for their education.  And a great number of them are choosing nursing.

The value of additional education is rarely challenged.  Most studies show an increase in average salary and lifetime pay for those getting a college degree or finishing a technical program.  However, getting out of school, with an above average paying job, like nurses, with a college loan debt of $100,000-would that be smart?  Of course not.  It will take years of struggle to pay those loans back, with enormous stress along the way.

So what do Millionaire Nurses do when faced with this sort of situation?

  • Check out all scholarship opportunities.  These can include hospitals that will pay for school for a work obligation, financial needs type scholarships, military scholarships, and good student scholarships.
  • Work and school part-time. Pay for school as you go along.  Many folks have worked nights, and finished their education during the day-how is that for dedication.
  • Take a year or two off from school, work, live on nothing, saving up, then going back to school.

All of these options take sacrifice and dedication. But isn’t that what being a nurse is all about. 

I want nurses to excel in their personal finances and begin building wealth as soon as possible.  That cannot happen unless you get out of debt as quickly as possible and learn to begin saving, investing, and growing your net worth.  So student loans are not always a blessing.  But with smart planning you can minimize your student loan debt and make progress towards your goal.

Let me know your thoughts and student loan stories-successes and horror stories alike.  And for a copy of my free e-book, “Emergency Money Resucitation” go to my website.  Signing up will also provide you  with a free mini-course on managing your personal finances.

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