5 Lies Your Landlord May Tell You

Finding a place to rent can be so time-consuming and stressful that once you decide on a house or apartment that fits your budget, size, and location needs, you might not pay attention to the mundane lease terms or if the landlord is trustworthy.

However, if you have a shady landlord and lease agreement, you could pay more for your rental and be stuck handling repairs.

Andrea Amszynski, a speech therapist, thought she had a perfect situation when she found a room for rent in a five-bedroom, three-bath house when she was moving to Savannah, Ga. The room was advertised on Craigslist, and she made an appointment to view the house.

“I met the landlord, or who said he was the landlord at the time,” she says. “And he showed me all round the house.”

She signed a lease and put down $700, which included one month’s rent and a security deposit. A few weeks later, when she couldn’t get hold of the landlord, she discovered the man she paid wasn’t the landlord, but a past tenant scamming her. She filed a police report, but was unable to recover her deposit.


Though this is a fairly extreme case, there are other ways that landlords mislead tenants. At a time when half of renters spend at least 30% of their household income on rent and utilities, being on the lookout for these lies may keep you from spending more than you need on living expenses.

“You can break your lease any time you want.”

Another term buried in the lease that could cost tenants in the long run is “contract renewal terms.” In this situation, the rent agreement is renewed for another year if the tenant doesn’t inform the landlord within a certain period — typically 60 days — from the end of the first agreement.

“Then, if you want to get out of what they’ve written, you’ve got to pay so much money … like a whole month’s rent,” says Sarah Hubbuch, who manages two properties in Georgia and Florida.

“You’ll have to cover the cost of that repair.”

Repairs are inevitable, such as a clogged toilet, leaky pipe, air conditioning unit that blows out warm air, broken refrigerator, or burned-out light bulbs. However, problems can arise about who should pay for the repair and how quickly the repair needs to be done.

Hubbuch says things such as appliances, water heaters, or anything that could need repair after normal wear and tear should be a landlord’s responsibility to fix and cover financially.

“It’s part of the contract,” she says. “And me, personally, I would tell the landlord I can’t pay rent until these things are fixed.”

But that also may mean you’ll have to buy fans until the landlord decides to fix the AC or pick up a pack of new light bulbs.

“I can give you your security deposit back whenever I want.”

Joel Cohn, legislative director for D.C’s Office of the Tenant Advocate, says inappropriate deductions from security deposits are a common complaint filed by tenants.

“An appropriate deduction from the security deposit would be something beyond ordinary wear and tear,” he says. “So, if the tenant caused some damage to the property, then it would be appropriate for the landlord to make that deduction.”

As a property manager in California, David Roberson says the traditional security deposit of one month is more than enough for repairs. He is principal of Silicon Valley Property Management Group, which manages apartments for rent in San Jose, California.

“Most of the time, tenant damages are less than $1,000 to a unit when they’re leaving, so if you get a $5,000 security deposit (typically up to two months’ rent), that’s going to be fairly adequate to cover 99% of the damages,” he says.

If there is no damage, a tenant should receive their security deposit back in a timely manner. Depending on the state, that time frame can change. For example, in Washington, D.C., landlords have to provide the tenant with an itemized list of deductions to cover appropriate expenses. The list needs to be sent to the tenant within 45 days after they move out, and the price tag attached to repairs needs to be reasonable. Landlords then must return the remaining balance to the past tenant in an additional 30 days after the tenant received the list.

Check your state’s rental guidelines on security deposits to be sure you know when to expect your deposit back.

“I can come and go as I please.”

Understandably, a landlord may need to enter the rental at some point during the lease. Each state has its own rules for under what circumstance and with how much notice they would need to give tenants before entering the property.

“When a tenant signs a lease, they actually hold the rights to the leasehold,” Roberson says. “So for the term [of the lease], it’s their property.”

In California, he says, landlords need to get written permission to enter a property, or there has to be reasonable evidence that the tenant is violating terms of the lease, is doing something illegal, or there is an emergency.

Cohn says that in other states and D.C., generally landlords need to give a “reasonable” written notice 48 hours ahead of time in non-emergency situations.

“I can get you a great deal on the rent.”

While some parts of the lease can be clear, some landlords will try to bury items in the lease that could cost tenants.

One practice is known as concession pricing.  Cohn says he has seen this tactic used in rent-controlled buildings in Washington, D.C.

Here’s how it works: The amount for a one-bedroom apartment is $1,500, but that’s a high rent for the area. The landlord advertises it for $1,000 to attract potential renters, but reports the $1,500 to the rent administrator — the office in some large cities that controls rent — and then buries the $1,500 amount in the lease.

The landlord essentially is telling the tenant, “Yeah, this $1,500 amount, don’t worry, we’re going to give you a concession deal. You only have to pay $1,000. And, by the way, this is rent controlled, so you’re protected in terms of the amount of rent increase,” Cohn says. However, if the tenant decides to renew their lease, they may see their rent not just go up to $1,500, but $1,500 plus the rent control cap for the area. The landlord would legally be allowed to raise it that much since they told the rent administration that they were already charging $1,500 for rent.

Tips for protecting yourself as a renter:

Research your landlord before signing the lease.

Ask current tenants about their experience with the landlord. In some instances, you also may find landlord reviews online through sites such as Yelp and Review My Landlord. And if you want to confirm that the person is indeed the landlord, look up the property record online to find the owner’s name. “Most of the time the landlord should be paying the property tax, and that is public info,” Amszynski says.

Get everything in writing.

Read the lease thoroughly and ask about any lingo or terms that are confusing. In addition, get any verbal agreements, such as rental rates or promises to repair items before you move in, in writing. Protect your security deposit before you move in by walking through the rental with the landlord. “Make sure that you and the landlord go through the list of things that were already wrong with the house before you move in so they can’t come back and say you did it,” Hubbuch says.

Know tenant rights for your area.

A Zillow study in 2014 found that 82% of renters don’t understand laws on security deposits, credit, and background checks, 77% of renters don’t understand privacy and access rights, and 62% of renters don’t understand laws on early lease termination.You’ll be able to find resources online that outline tenant rights and landlord rights in your state. The Washington, D.C., Tenant Bill of Rights and the California Tenants guide are two examples of guides.

Get insured.

Renters insurance covers damage to your belongings inside a rental, but only 41% of renters said they had renters insurance, according to 2016 data from the Insurance Information Institute. Premiums average $15-$30 a month, depending on the size and location, and the average U.S. premium for renters insurance is $190 for 2014 — the most recent year available — according to the National Association of Insurance Commissioners. A standard renters insurance policy also covers your liability for injuries to someone else or their property while they are at your rental, but it doesn’t cover damages you might make to the property. Roberson says he requires his tenants get tenant liability insurance to cover up to $100,000 in damages from situations such as a fire or driving cars into garage doors. He offers it to them for $14.50 a month. The Insurance Information Institute notes an excess liability policy generally costs between $200 and $350 annually, which provides an additional $1 million of protection.

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10 Places Where You Can Earn Six Figures and Still Be Broke

A household bringing in $100,000 each year might look financially stable on paper. But after factoring in taxes, housing, transportation, and other basic budget line items, a new MagnifyMoney analysis found six-figure families can easily struggle to make ends meet.

In our report, The Best and Worst Cities to Live On Six Figures, we analyzed 381 major metros across the U.S. to see where a family earning $100,000 has the most wiggle room in their budgets.

We based our estimates on a two-earner household with two adults and one child and a gross annual income of $100,000 ($8,333 per month).

Then we created a reasonable budget for monthly expenses and subtracted that total from their after-tax income. We ranked cities from worst (least amount of money left over at the end of each month) to best (the most amount of money left over at the end of each month).

Behind the Budget:

We based most of our budget estimates on publicly available data, but we had to make some assumptions. We assumed one of the household earners carries some student debt, that all families set aside at least 5% in personal savings, and that they enjoy some entertainment throughout the month. That budget includes basic necessities: housing, food, transportation, child care, as well as variable spending on student debt, savings, and entertainment. See our full methodology here.

Key Findings

  • In 11 out of 381 metro areas analyzed, households earning six figures would spend more than 90% of their total take-home pay on basic monthly expenses. The average across all 381 metros is 75% of take-home pay spent on monthly expenses.
  • In 71 out of 381 metro areas analyzed, households earning six figures are spending more than 75% of their budget on basic monthly expenses.
  • Six figures and broke in Washington, D.C.: The worst metro area for a family earning $100,000 includes Washington, D.C. and neighboring cities Arlington and Alexandria, Va. After factoring in monthly expenses, families would be $315 in the red. Stamford, CT, San Jose, CA, San Francisco, CA, and the New York City area round out the 5 worst areas for affordability.
  • California is the ultimate budget killer: The Golden State is home to 9 out of the top 20 worst metros for six-figure families, including San Francisco, San Jose, Santa Cruz, San Diego and Napa. However, Los Angeles area six-figure families are able to save about $500 a month more than San Francisco area families, thanks to lower housing costs.
  • Tennessee dominates: If you’re looking for bang for your buck, it doesn’t get more affordable than Tennessee. The top three best metros for six-figure households are in Tennessee, and a total of five out of the top 10 best metros on the list are from the Volunteer State.
  • Living large in Johnson City, Tenn.: The best metro area for a family earning $100,000 is Johnson City, Tenn., where families only spend 62% of their household budgets on basic expenses. After factoring in monthly expenses, families would have a surplus of over $2,400 each month.
  • The South reigns supreme. The Southeast and Southwest tied as the best region for six-figure families, requiring them to use an average of only 70% of their income on basic expenses.
  • Steer clear of the coasts. In another tie, the Northeast and West ranked worst among the five regions. On average, six-figure households spend 80% of their earnings in these regions.
  • Housing is a budget buster. In 64 out of 381 metros, six-figure households are spending more than one-quarter of their monthly income on housing. In 18 out of 381 metros, six-figure households are spending more than one-third of their budget on housing.
  • Child care isn’t cheap. Child care expenses consume 10% or more of household budgets in 42% all metro areas (161 of 381).

View the complete data here.

The WORST Metros for Six-Figure Households: By the Numbers

1. Washington, D.C./Alexandria/Arlington, VA

It’s shockingly easy for a household earning $100,000 to live beyond their means in this high-cost metro area. To meet the basic costs of these seven expenses, they would spend 5% more than they actually earn after taxes, leaving them $315 in the red. Housing and childcare alone consume a whopping 60% of the household budget of a family living in this metro area.

2. Bridgeport/Stamford/Norwalk, CT

Thanks mostly to lower average child care costs ($959 per month vs. $1,000+ in metros like Washington, D.C., and Boston), families earning $100,000 would be slightly better off — but only slightly. After accounting for expenses, they would still be $139 in the red. Housing has much to do with that. It would consume 43% of the household budget alone.

3. San Jose/Sunnyvale/Santa Clara, CA

It’s a good thing Silicon Valley gigs pay well. A $100,000-earning family in the San Jose/Sunnyvale/Santa Clara metro area would only just manage to make ends meet, according to our findings. They would spend 99% of their total income on basic expenses. Nearly half of their income would go toward housing (46%), more than households in any other metro area analyzed.

4. San Francisco/Oakland/Hayward, CA

Right next door to the no. 3 worst metro on our list, the San Francisco/Oakland/Hayward combo presents another budget-busting challenge for six-figure households. The area gets an edge because it has a slightly more affordable housing situation. A family earning $100,000 would use roughly 43% of their budget on housing. And when all’s said and paid for, families would use 96% of their earnings on basic expenses.

5. New York, NY/Newark/Jersey City, NJ

We land back on the East Coast for the no. 5 worst metro for six-figure households. New Yorkers and the bridge and tunnelers of Newark and Jersey City, N.J., may face exorbitant housing and child care expenses, but they luck out in one key area: transportation. The area ranks the third most affordable for transportation, likely due to the prevalence of public transit. A six-figure household would only use 13% of their budget to get around. That’s nearly half the rate spent on transit in nearby Lexington Park, Md. (23%). Still, cheaper transit options don’t quite make up for the fact that a family earning $100,000 in this area would still have to dedicate a total of 57% of their budget to housing and child care alone. At the end of the month, 96% of their earnings would be dust.

6. California/Lexington Park, MD

High earners in California/Lexington Park, Md., will spend a fair chunk of their earnings on transportation — 23% of their take-home pay. After housing, transportation is the most expensive line item in their budget. Still, they benefit from relatively low housing expenses compared to the other metros in the bottom 10, which gives households here a boost. Higher taxes also leave them with less take-home pay

7. Kahului/Wailuku/Lahaina, HI

Thanks to one of the highest income tax rates in the U.S., high-earning households in Hawaii start off with less take-home pay than their counterparts across the country. A married couple earning $100,000 and filing taxes jointly would get hit with an 8.25% state income tax rate.

Both higher housing costs and transportation expenses make this region in Hawaii, located on the island of Maui, one of the worst places for six-figure households. At the end of each month, they have just $292 left in the household budget. The majority of their take-home pay will go toward housing (38%) and transportation (18%).

8. Honolulu, HI

A family earning $100,000 in Honolulu would fare slightly better than their neighbors on Maui, thanks to lower transportation costs. At the end of each month, they have $302 left in the household budget, versus $292 for households in the Kahului-Wailuku-Lahaina area.

9. Boston/Cambridge, MA/Newton, NH

Relative to their take-home pay, Boston families earning $100,000 spend well over half their household budget on housing and child care — 36% and 17%, respectively.

10. Santa Cruz/Watsonville, CA

Santa Cruz-Watsonville, CA rounds out our rankings. A household earning $100,000 would scrape by at the end of the month with just $329 left.

The BEST Metros for Six-Figure Households: By the Numbers

1. Johnson City, TN

The Southeast is by far the best region to move to if you want to stretch your six-figure income, and Tennessee should be top of your list. Four out of the top 10 best places to earn six figures belong to Tennessee metros.

2. Morristown, TN

A six-figure family living in Morristown, TN would have just over $2,500 left in the bank after paying for essentials and a bit of entertainment. That’s plenty of cash to build up an emergency fund.

3. Cleveland, TN

Tennessee continues to dominate the list, with Cleveland, TN coming in third place among the most affordable places for six-figure households. Families spend just 63% of their post-tax monthly income on essentials, savings and entertainment.

4. Hattiesburg, MS

Hattiesburg, MS takes the no. 4 spot, where  a six-figure family can afford to cover essential expenses, plus savings and entertainment with just 64% of their post-tax income.

5. McAllen-Edinburg-Mission, TX

A family earning $100,000 per year in McAllen, TX would have more than enough to meet their basic needs and then some. Only 14% of their income is spent on transportation ($955 per month) and just 16% goes toward housing ($1,086 per month).

6. Jackson, TN

We’re back to the Volunteer state at No. 6 with Jackson, TN.

7. Chattanooga, TN-GA

Right on the border of Tennessee and Georgia, Chattanooga proves to be a great location of a family bringing in $100,000 per year. Relatively low housing, child care and transportation costs leave plenty of breathing room in the budget.

8. Lafayette-West Lafayette, IN

The midwest makes its first and only showing in the top 10 affordable places list with Lafayette, IN. Just under two-thirds (65%) of a family’s monthly post-tax income would be used on budget essentials like housing, food, child care and transportation.

9. Jackson, MS

We’re back to Mississippi at No. 9 with Jackson, MS making a strong showing among the most affordable places for a six-figure family.

10. Brownsville-Harlingen, TX

Texas rounds out the top 10 affordable places for $100,000 households, with the Brownsville-Harlingen area nabbing the last spot. Families would have over $2,300 left in the bank at month’s end based on our estimates.

A Tale of Two Cities

In the graphic below, see how different life is for a family earning $100,000 in Washington, D.C. vs. Johnson City, TN.

Regional Findings

Click a region to jump to the rankings:

West West West West West MidWest Northeast SouthWest SouthEast SouthEast


We based our findings on the projected disposable income for a family of three — two adults and one child age 4 years old. We assume the total household gross income is $100,000.

We estimated post-tax income for each metro area.


Based on metro-level estimates from U.S. Census Current Population Survey

Child care

Economic Policy Institute — State level child care costs in the U.S.


Official USDA Food Plans: Cost of Food at Home at Four Levels, U.S. Average, April 2017

Based on a moderate plan for a family of three: One male (age 19 to 50 years), one female (age 19 to 50 years), and child (age 4 to 5 years). Adjustment factor of 5% added.


Based on metro-level data compiled by the U.S. Dept. of Transportation

U.S. Dept. of Housing and Urban Development “Location Affordability Portal”

Student debt payment

State Level Household Debt Statistics 2003-2016, Federal Reserve Bank of New York.

The Student Loan Debt Balance per Capita is distributed equally over 10 years with an interest rate of 4.66%.


We assumed all households would spend 5% of their income on entertainment, per the Bureau of Labor Statistics Consumer Expenditures Survey (CE)

Personal savings

We assumed all households would set aside 5% for personal savings, based on averages from the St. Louis Federal Reserve Bank, personal savings rate.

Data analysis by Priyanka Sarkar, Arpi Shah and Mandi Woodruff.

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President Trump’s Education Budget Leaked — And Student Loan Borrowers Won’t be Happy

More details from President Donald Trump’s long-awaited education budget leaked to the Washington Post on Wednesday. The proposed plan would slash $10.6 billion from federal education initiatives, including after-school programs, public service loan forgiveness, and grants for low-income college students, according to the Post.

Here’s what we know so far:

This May Be the End of Public Service Loan Forgiveness

Trump has long promised to dramatically scale back the role of government in education, a plan heartily supported by Betsy Devos, the embattled Education Secretary appointed by the president earlier this year.

Among the programs on the chopping block is the Public Service Loan Forgiveness initiative. Implemented in 2007, the PSLF sought to reward student loan borrowers who took jobs in nonprofits or the public sector by allowing them to discharge their federal student loan debt after 10 years of on-time payments.

Over half a million students were enrolled in the program, and the first cohort would have been eligible for loan forgiveness this October.

Now, the future of the initiative is uncertain. There are no details on whether eligible students will be grandfathered into the program, as has been the case when previous student loan assistance programs were phased out. A Department of Education representative didn’t immediately return a request for comment.

Disgruntled college graduates took to social media Thursday to cry foul.

Changes are Coming to Income-Driven Repayment Plans

As it stands there are five different income-driven repayment plans available to student loan borrowers. The proposed budget calls for one single IDR plan, which could potentially be good news for borrowers.

Typically, under the current IDR plans, borrowers are eligible to have their loans forgiven after 20 years of on-time payments, and their monthly payments are capped at 10% of their income. Trump’s new budget would decrease the payment period from 20 to 15 years but would increase the payment cap to 12.5% of income, the Post reports.

But advanced degree earners wouldn’t be so lucky. Trump’s plan would not only raise the income cap for borrowers who earned advanced degrees, it would lengthen the repayment period. IDR plan payments would be maxed at 12.5% of their income, up from 10%, and they would have to pay for 30 years rather than 25.

Low-Income College Students Could Lose Child Care Services

Trump’s budget would slash the entire $15 million budget for CCAMPIS, a federal grant program that funds on-campus child care services for low-income parents. Dozens of campuses received grants under the program.

$700 Million Cut from Perkins Loans

While Pell Grant funding remains untouched under the proposed budget, the plan would slash more than $700 million in funding from Perkins loans, according to the Post. Perkins loans are low-interest federal student loans for low-income undergraduate and graduate students.

Federal Work-Study Programs Scaled Back

The Federal Work-Study program offers part-time jobs to college students who prove financial need. Their earnings help cover their education expenses. Under the proposed budget, the program would lose $490 million, or about half its budget.

What’s next?

We wait. The final proposed budget is still set to be released May 23, and the particulars could still change. After that, it will have to pass muster with lawmakers in Congress. To write a letter to your representatives,  contact them here. 


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RushCard Fined $13 Million For System Outage That Impacted 45,000+

Nearly a year and a half after a system failure left tens of thousands of RushCard customers without access to funds on their prepaid debit cards, the Consumer Financial Protection Bureau has ordered parent company UniRush to pay $10 million in restitution to customers and a $3 million fine. The company will split the fines with MasterCard, which was in charge of processing RushCard customer transactions at the time.

Green Dot, one of the largest issuers of prepaid debit cards in the U.S. announced earlier this week that they will acquire UniRush in a $147 million deal.  In a statement detailing the terms of the acquisition, Green Dot said it would eat any potential regulatory fines that RushCard might face in the wake of the 2015 system failure.

Read More: MagnifyMoney’s RushCard Prepaid Debit Card Review

In its order, the CFPB said the botched MasterCard transition, although it was 13 months in the making, led to “a rash of preventable failures.” UniRush and MasterCard failed to “properly prepare for the change in processors and failed to adequately test the new system.”

“Throughout this frustrating saga, UniRush’s customer service efforts failed to address problems adequately,” Richard Cordray, director of the CFPB, said in a statement Wednesday. “All of this stemmed from a series of failures that should have been anticipated and prevented.”

The CFPB’s investigation has helped color in the details, and the extent of the damage is staggering.

At the time of the system failure, RushCard representatives did not give a clear answer on how many of their prepaid cardholders were impacted by the glitch. A Yahoo Finance investigation found the source of the glitch occurred when UniRush attempted to transition from one payment processor to a new payment processor, MasterCard. According to the CFPB, the problems officially began on October 10, 2015, and lasted until October 12, 2015, but created a ripple effect of errors and miscommunication that lasted weeks in some customers’ cases.

The glitch led to delayed direct deposits for more than 45,000 of the company’s 675,000 customers, leaving them without access to their paychecks or even government benefits. Thousands more customers accidentally overdrafted their accounts because UniRush “erroneously double posted deposits” into some accounts, leaving the balances artificially inflated, the CFPB says.

During MasterCard’s transition, 1,110 consumers’ accounts were incorrectly suspended, the agency found. Some users could not access funds they set aside in Rush Goals funds, which are meant to be used like a savings account.

One of the most surprising claims in the CFPB’s order is that UniRush used funds consumers loaded onto their RushCards to offset negative balances caused by its processing errors. In the midst of the confusion, some consumers were told their cards had been flagged for fraud and their funds frozen as a result.

One of UniRush’s biggest failures throughout the snafu was inadequate customer service support for impacted customers. Customers reported waiting hours on the phone only to be hung up on by customer service representatives.

“UniRush had no contingency plan that could handle the surge in customer complaints,” Cordray said. “Additional customer service agents who were hired were not sufficiently trained, which meant they often were unable to resolve people’s questions and complaints.

Russell Simmons, UniRush-co-founder and the celebrity face of the brand, said in a statement the ordeal had been “one of the most challenging periods in my professional career.” In the wake of the outage, Simmons responded to disgruntled customers personally on Twitter and Facebook to apologize and offer assistance.

“I cannot thank our customers enough for believing in us, remaining loyal and allowing us to continue to serve their needs,” Simmons said in a statement.

A UniRush spokesperson offered this statement in response to an e-mail from MagnifyMoney:

“RushCard welcomes our settlement with the CFPB. We maintain that our company did not engage in any wrongdoing, and do not admit to such in our Consent Order with the CFPB.

Since the event in 2015, we believe we have fully compensated all of our customers for any inconvenience they may have suffered through thousands of courtesy credits, a four-month fee-free holiday and millions of dollars in compensation.

The vast majority of our customers are incredibly loyal and have either remained with us or returned to RushCard. In fact, the last quarter of 2016 marked the largest number of new customer sign-ups in our company’s history.

With this settlement behind us, we are eager to focus all of our energy now on serving our customers and providing them with the best services available in the prepaid industry.”

In the fall of 2016, the CFPB finalized long-awaited regulations that will add federal protections for millions of Americans who use prepaid debit accounts. Those regulations will go into effect October 2017. The new rules will offer similar consumer protections as debit cards.

How RushCard Will Pay Fines to Customers

According to the CFPB, the amount each RushCard customer can expect to receive depends on what kinds of inconveniences they faced once the glitch occurred. They have attached a fine amount to each type of incident consumers faced as a result of the botched transition.

RushCard parent company UniRush will send funds to affected consumers, the agency said.

  • $25 to each consumer who experienced a denied transaction during the extended blackout period on October 12, 2015.
  • $150 to each consumer whose card was placed in a possible fraud status that prevented them from making purchases or withdrawing funds.
  • $100 to each consumer who received balance information in October 2015 incorrectly indicating that there were no funds in their account.
  • $100 to each affected consumer whose ACH deposits were not processed in the week after the payment processor conversion.
  • $250 to each consumer whose ACH deposit was returned to the funding source, improperly loaded onto an expired or inactive card, or was unable to be successfully processed by UniRush in October 2015.
  • $150 to each affected consumer that UniRush offset due to a negative account balance incurred because of rescission of a duplicate ACH deposit or delayed processing of an ACH debit transaction.
  • $150 to each consumer who could not transact or access account funds because the account was not transferred onto the [MasterCard/MPTS] payment-processing platform or improperly transferred to the MPTS payment-processing platform in a status that would not allow the card to function.
  • $150 to each consumer who could not transact or access account funds because a lost or stolen card was not promptly replaced or the replacement card did not function after the payment processor conversion.
  • $150 to each consumer who initiated a cash load that was not promptly posted to the account following the October 12, 2015, payment-processing conversion.
  • $50 to each consumer whose card-to-card transfer(s) were not processed immediately following the October 12, 2015, payment-processing conversion.


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3 Lies Your Student Loan Company Might Tell You

Student loan servicer Navient found itself in hot water with a consumer watchdog on Wednesday, when the Consumer Financial Protection Bureau announced a long-anticipated lawsuit against the company. Navient, formerly known as Sallie Mae, is the nation’s largest servicer of both federal and private student loan debt. For years, the CFPB alleges, Navient loan servicers steered borrowers who were struggling to repay their loan debt in the wrong direction, “providing bad information, processing payments incorrectly, and failing to act when borrowers complained.

One of Navient’s biggest transgressions, the CFPB alleges, is that Navient representatives encouraged borrowers to put their loans in forbearance even when it wasn’t the best option. By doing so, Navient potentially added $4 billion to its own coffers in the form of additional interest charges.

The lawsuit is a major wake-up call for the student loan servicing industry as a whole. It should also trouble the millions of student loan borrowers who may rely on their student loan servicer for advice when they are deciding how to repay their debts. With vast numbers of customers to support and an increasingly complicated menu of federal repayment plan options to sort through, student loan servicers may not be the best sources of guidance.

Here are three lies student loan servicers may tell you:

1. “Can’t pay? You’re better off putting your loans in forbearance.”

When you can’t scrounge up the money to cover your student loan bill, forbearance can sound like a dream option. Forbearance allows borrowers to pause student loan payments for up to 12 months at a time. Your loan servicer may encourage you to put your loans into forbearance because it is a much easier process on their end. But here’s what they may not tell you: Interest will continue to accrue on your loans. So while you enjoy the break from those student loan bills, your loan balance will balloon more and more every day. Over time, you could bring your loans out of forbearance only to find out you now have even higher monthly payments because your balance has increased.

If you know you will be unable to make your federal student loan payments for an extended period of time, a better option may be to enroll in an income-driven repayment plan. IDR plans can reduce your payments to an affordable amount based on your annual income (sometimes as low as $0/month). Interest will still accrue if you enroll in an IDR plan; however, the government may cover your unpaid interest charges if your monthly payment is not enough to cover them. That benefit lasts for up to three consecutive years from the date you enroll in the IDR plan. And it does not apply to borrowers whose loans are forbearance.

Another perk of IDR plans is that your remaining debt is generally forgiven after your plan period is over – from 20 to 25 years, depending on which plan you are enrolled in (see chart below).

Source: https://studentaid.ed.gov/sa/

It is especially important for people who work in nonprofit or government jobs to understand their income-driven repayment plan options. After making 120 consecutive federal student loan payments (10 years) while working in the public or nonprofit sector, you may be eligible for public student loan forgiveness. But if you are in forbearance, you are not making any payments at all, which means you do not get credit toward your 120 payments goal. If you are in an income-driven repayment plan, however, those payments will count toward your public student loan forgiveness required payments.

2. “Once you enroll in an income-driven repayment plan, you’re set for life.”

Contrary to what your student loan company may tell you, it is absolutely vital to re-apply for income-driven repayment plans each year. That is because the plans are based on your annual household income. If your income changes during the year, you need to update your income on your income-driven plan in order to calculate the proper monthly payment.
If you do not renew your IDR plan, you could wind up with higher student loan payments you cannot afford and you may risk falling into delinquency again. What’s more, you have to be enrolled in an income-driven repayment plan in order to qualify for federal student loan forgiveness. If you let your enrollment lapse, you could derail your eligibility for future loan forgiveness.

Unfortunately, millions of student loan borrowers fail to renew their income-driven repayment plans each year. The CFPB is working to crack down on student loan companies that do not properly inform borrowers about the deadline to renew, but it’s also up to borrowers to stay on top of their enrollment status. In order to renew your plan, contact your student loan company directly and ask them to re-enroll you. Alternatively, you can download the application and fill it out yourself here: Income-Driven Repayment Plan Request.

Before you enroll in an income-driven repayment plan, know the cons as well as the pros. You may reduce your monthly payment but pay more in interest over the long term. Also, if your loans are ultimately forgiven, you may owe federal tax on that forgiven amount. Use this student loan repayment calculator to find out if IDR is the right plan for you.

3. “We’re happy to allocate your payment to whichever loan you want.”

Student loan borrowers often have multiple loans to manage. Let’s say you’ve got five student loans. One month, you realize you have an extra $200 to put toward those loans. Theoretically, you should be able to ask your loan company to take that extra $200 and apply it to the loan with the highest interest rate. It is generally considered wise to allocate extra payments toward whichever loan has the highest interest rate. This way, you are working to reduce the loan that is accruing the most interest each month and avoiding spending more on interest than you have to.

In the case of Navient, the CFPB alleged that the company’s representatives repeatedly misallocated borrowers’ payments. In order to fix the issue, the borrowers themselves had to keep a close eye on their monthly payments and alert the company.

It’s important to review your loan statements carefully each month to be sure your payments are allocated the way you desire. Some student loan servicing websites make it fairly simple to allocate your payments manually, without having to rely on the help of one of their loan specialists. Even so, play it safe and double-check your loan statements to be sure your payments are being applied according to your wishes.

The post 3 Lies Your Student Loan Company Might Tell You appeared first on MagnifyMoney.

3 Ways to Keep Medical Debt from Ruining Your Credit

Turns out, your physical well-being isn’t the only thing at stake when you go to the hospital. So too is your financial well-being. That’s because no debt is more common than medical debt.

The numbers are staggering in their scope. According to the Consumer Financial Protection Bureau, more than half of all collection notices on consumer credit reports stem from outstanding medical debt, and roughly 43 million consumers – nearly 20% of all those in the nationwide credit reporting system – have at least one medical collection on their credit report.

Now, you might be inclined to think that because you’re young or have both a job and health insurance, medical debt poses you no risk. Think again. According to a recent report from the Kaiser Family Foundation, roughly one-third of non-elderly adults report difficulty paying medical bills. Moreover, roughly 70% of people with medical debt are insured, mostly through employer-sponsored plans.

Not concerned yet? Consider that a medical collection notice on your credit report, even for a small bill, can lower your credit score 100 points or more. You can’t pay your way out of the mess after the fact, either. Medical debt notifications stay on your credit report for seven years after you’ve paid off the bill.

The good news (yes, there is good news here) is you can often prevent medical debt from ruining your credit simply by being attentive and proactive.

Pay close attention to your bills

Certainly, a considerable portion of unpaid medical debt exists on account of bills so large and overwhelming that patients don’t have the financial wherewithal to cover them. But many unpaid medical debts catch patients completely by surprise, according to Deanna Hathaway, a consumer and small business bankruptcy lawyer in Richmond, Va.

“In my experience, it’s often a surprise to people,” says Hathaway. “Most people don’t routinely check their credit reports, assume everything is fine, and then a mark on their credit shows up when they go to buy a car or home.”

The confusion often traces back to one of two common occurrences, according to Ron Sykstus, a consumer bankruptcy attorney in Birmingham, Ala.

“People usually get caught off guard either because they thought their insurance was supposed to pick something up and it didn’t, or because they paid the bill, but it got miscoded and applied to the wrong account,” says Sykstus. “It’s a hassle, but track your payments and make sure they get where they are supposed to get. I can’t stress that enough.”

Stay in your network

One of the major ways insured patients wind up with unmanageable medical bills is through services rendered – often unbeknown to the patient – by out-of-network providers, according to Kevin Haney, president of A.S.K. Benefit Solutions.

“You check into an in-network hospital and think you’re covered, but while you’re there, you’re treated by an out-of-network specialist such as an anesthesiologist, and then your coverage isn’t nearly as good,” Haney says. “The medical industry does a poor job of explaining this, and it’s where many people get hurt.”

According to Haney, if you were unknowingly treated by an out-of-network provider, it’s not unreasonable to contact the provider and ask them to bill you at their in-network rate.

“You can push back on lack of disclosure and negotiate,” Haney says. “They’re accepting much lower amounts for the same service with their in-network patients. They may do the same for you.”

Work it out with your provider BEFORE your bills are sent to collections

Even if you’re insured and are diligent about staying in-network, medical bills can still become untenable. Whether on account of a high deductible or an even higher out-of-pocket maximum, patients both insured and uninsured encounter medical bills they simply can’t afford to pay.

If you find yourself in this situation, it’s critical to understand that health care providers themselves usually do not report unpaid bills to the credit bureaus – collection agencies do. After a certain period of time, most health care providers turn unpaid debt over to a collection agency, and it’s the agency that in turn reports the debt to the credit bureaus should it remain unpaid.

“If you can keep it out of the hands of the collectors, you can usually keep it off your credit report,” says Hathaway.

The key then is to be proactive about working out an arrangement with your health care provider before the debt is ever sent to a collection agency. And make no mistake – most providers are more than happy to work with you, according to Howard Dvorkin, CPA and chairman of Debt.com.

“Trust me, no one involved with medical debt wants it to go nuclear,” says Dvorkin. “The health care providers you owe know very well how crushing medical debt is. They want to work with you, but they also need to get paid.”

If you receive a bill you can’t afford to pay in its entirety, you should immediately call your provider and negotiate, says Haney.

“Most providers, if the bill is large, will recognize there’s a good chance you don’t have the money to pay it off all at once, and most of the time, they’ll work with you,” he says. “But you have to be proactive about it. Don’t just hope it will go away. Call them immediately, explain your situation, and ask for a payment plan.”

If the bill you’re struggling with is from a hospital, you may also have the option to apply for financial aid, according to Thomas Nitzsche, a financial educator with Clearpoint Credit Counseling Solutions, a personal finance counseling firm.

“Most hospitals are required to offer financial aid,” says Nitzsche. “They’ll look at your financials to determine your need, and even if you’re denied, just the act of applying usually extends the window within which you have to pay that bill.”

If all else fails, negotiate with the collection agency

In the event that your debt is passed along to a collection agency, all is not immediately lost, says Sykstus.

“You can usually negotiate with the collection agency the same as you would with the provider,” he says. “Tell them you’ll work out a payment plan and that in return you’re asking them to not report it.”

Most collection agencies, according to Haney, actually have little interest in reporting debt to the credit bureaus.

“Think about it,” Haney says. “The best leverage they have to get you to pay is to threaten to report the bill to the credit agencies. That means as soon as they report it, they’ve lost their leverage. So, they’re going to want to talk to you long before they ever report it to the bureau. Don’t duck their calls. Talk to them and offer to work something out. They’ll usually take what they can get.”

At the end of the day, according to Haney, most people can keep medical debt from ruining their credit by following one simple rule.

“Just be proactive,” he says.

The post 3 Ways to Keep Medical Debt from Ruining Your Credit appeared first on MagnifyMoney.

Judge Deals Major Blow to Obama Administration’s New Overtime Rule

Woman sitting in her office with her eyes covered working work

In a major blow to one of the last major regulations proposed by the Obama administration, a Texas federal judge has temporarily blocked the implementation of a rule that would have made 4.2 million workers eligible to receive time-and-a-half pay for overtime work.

The judge ruled on Tuesday in favor of a joint lawsuit filed by 21 states challenging the rule, which was set to take effect Dec. 1, arguing that the rule was imposed “without statutory authority”.

The rule would have required companies to pay overtime wages to non-exempt employees who earn less than $47,476 per year — double the current threshold of $23,660. The rules were first proposed in May and the Obama administration gave business owners six months to comply.

Over that time, many companies decided to bump salaried workers pay above the $47,476 threshold to avoid paying overtime hours. Other employers considered hiring more part-time workers and capping existing workers hours at 40 hours per week to avoid the increased cost of paying overtime.

The fate of the overtime laws is uncertain. The judge’s injunction precedes a final ruling on the law, but it suggests he will rule against it. President-Elect Donald Trump has been vociferously against heightened federal regulations and has vowed to impose new limits on how many new regulations can be implemented — for each regulation approved, at least two must be removed, he’s proposed.

So, about those pay raises…

MagnifyMoney spoke with several workers who received raises over the last six months. Christa Hoskins, a 25-year-old graphic designer in Fort Meyers, Fla., received a whopping $10,000 salary increase. Caroline Powell of Athens, Ga. not only received a 10% pay raise but was also promoted to director of customer service at the startup she’s worked for since 2015.

Is it possible that employers will try to walk back raises if the rule is ultimately blocked? Unfortunately,  that may be the case, says Suzanne Boy, an employment law attorney with Henderson, Franklin, Starnes & Holt, in Fort Myers, Fla.

“I do think some employers may decide to walk back pay raises and other changes that were made in anticipation of the rule change,” Boy says. “For the most part, employers will not face legal consequences for rolling the changes back, particularly if the changes were not due to be implemented until next week.”

However, if employees who received raises were granted new contracts, it will be much more difficult for their employers to walk back on those promises. Since each state can have different wage laws, she suggests business owners consult with an employment law attorney in their state before moving forward with any changes.

“If the [compensation] changes have already been implemented and the employee is working at the new rate, employers must be more cautious,” she says.

If the regulation is ultimately implemented, it will dramatically increase the number of workers eligible for overtime pay — by 35% — and give business owners the unquestionable challenge of coping with increased labor costs. There hasn’t been an increase to the salary threshold for overtime pay since 2004, when it was raised to $23,660.

Read next: 5 Ways the New Overtime Rules Could Impact Your Paycheck >

Additional reporting by Lori Johnston

The post Judge Deals Major Blow to Obama Administration’s New Overtime Rule appeared first on MagnifyMoney.

1 in 4 Americans Plan on Racking Up Holiday Debt in 2016, Survey Shows


In a new survey of 1,147 American adults conducted by MagnifyMoney, more than one in four (26%) Americans said they plan to rack up holiday debt during the 2016 holiday season that will linger more than a month. Among the 26% who will rack up debt, 66% expect they will take three months or more to pay off the debt.

Holiday debt can quickly spiral out of control. MagnifyMoney found the average shopper surveyed who added debt during the 2015 holiday season racked up $1,073.

Using a credit card with average APR of 16% and making monthly minimum payments of around $25, it would take that person more than five years (61 months) to get out of debt, according to MagnifyMoney’s Credit Card Payoff Calculator. Over that time, he or she would pay an additional $496 worth of interest charges.

Nearly one-third (32%) of this year’s survey respondents said they incurred holiday debt during the 2015 shopping season. People who took on holiday debt in the past are much more likely to take on debt this year because they can’t afford to pay cash, our survey found, with 74% saying they will incur debt this year. They are also more likely to feel financially stressed.

Among those respondents who incurred credit debt during the holidays in 2015 , the average shopper added $1,073 of holiday debt. And a staggering 74% said they will likely take on more credit debt again this year.

More debt = more financial stress

More than half (59%) of respondents who took on debt over the holidays in 2015 said they accumulated $500 or more of debt. Among people who said they racked up $500 or more in holiday debt in 2015, MagnifyMoney found greater trends of financial stress and a greater likelihood of incurring additional debt in 2016.


Check out our full survey findings below or download a fact sheet here.


Here are 5 ways to avoid holiday debt traps:

1. Steer clear of store credit cards

The holidays are prime time for retailers selling store credit cards to customers. Customers are often wooed by promises of upfront discounts on purchases, helping them save on their holiday shopping in the short term. But store credit cards notoriously have some of the highest interest rates on the market — an average APR of 23.84% versus 16.28% for regular credit cards. People with poor credit may be saddled with store cards with interest rates as high as 27%.

Store credit cards can also come with onerous deferred interest fees — they may offer no-interest promotions for a certain amount of time. But if you fail to pay off the entire balance by that date, you can be slapped with the entire interest balance in one lump sum.

If you want to get a discount on your purchases and signing up for a store credit card is the only way to get there, just be sure you have enough cash on hand to pay your bill right away. With most discounts only 10% to 20% off, you’ll actually wind up losing whatever you saved if you get slapped with a 20% or higher interest rate later.

2. Make a budget and stick to it

The downfall of most holiday shoppers is that it is incredibly easy to get swept up into the excitement of shopping. Before you know it, your budget is blown, and it isn’t until after the giddiness of the holidays winds down that you realize the extent of the damage. Avoid the holiday debt hangover by creating a budget early and sticking to it no matter what.

3. Exchange ‘Secret Santa’ gifts with family and friends

Secret Santa is a fun and smart way to drastically reduce your holiday gift-giving budget. Ask your siblings or friends to draw names from a hat rather than buying gifts for everyone individually. You can all agree on a price limit so no one feels like they over- or underspent.

Can’t draw names in person? Try a Secret Santa online tool like Secret Santa Generator or DrawNames.com.

4. Get rid of last year’s holiday debt first

The average shopper racked up $1,073 worth of credit card debt last year, our survey found. If you have credit debt left over from last year’s shopping, don’t pile on more debt and continue to let interest accrue. Consider signing up for a 0% APR credit card and making a balance transfer (check out the best ones of the year right here). You’ll buy yourself additional time to pay off last year’s debt, and you’ll improve your credit score in the process.

5. Start saving for next year’s holiday shopping today

If you felt unprepared for holiday shopping this year, it might be because you didn’t have enough time to save up. Going into next year, open a savings account and label it “Holiday Shopping.” Then estimate how much you’ll need to save — $500? $1,000? Divide that number by 10 and set up a direct deposit from your paycheck into that savings account for that amount. For example, if your goal is to save $1,000, you’d need to contribute at least $100 per month for 10 months to reach that goal.

Why only 10 months? That way you can start shopping a bit earlier than December, giving you plenty of time to find the perfect gifts for your loved ones.

The post 1 in 4 Americans Plan on Racking Up Holiday Debt in 2016, Survey Shows appeared first on MagnifyMoney.

Where Students Can Cover College Tuition with a Part-Time Job: Study

Students Studying Learning Education

Affordability was a major factor when 19-year-old Bintou Kabba was considering colleges to attend after high school.  She enrolled at CUNY Lehman, a four-year public university in her native Bronx, N.Y. The 10-minute commute from her home, where she lives with her parents and six siblings, was part of the allure. But the low cost of tuition was essential for Kabba, an ambitious student with dreams of becoming a neonatal gynecologist but without the financial means to afford a pricey university. Most CUNY Lehman students pay just $2,374 out of pocket for a year of schooling.

But before she began classes, Kabba needed a job. “I was broke and I needed money so badly,” she told MagnifyMoney. So, she joined the ranks of so-called “working learners” attempting to counter the costs of college with part-time jobs. About 40 percent of undergraduates and 76 percent of graduate students work at least 30 hours a week throughout the school year, according to the Georgetown Center on Education and the Workforce.

As college costs have skyrocketed in recent years, the old adage “Work your way through college” has become increasingly out of touch with reality. Students who work rarely earn enough to truly cover the costs of their education.

MagnifyMoney sought to find out which colleges are still affordable enough for working students to afford on part-time wages. In a new study released Nov. 9, we found a student earning the federal minimum wage ($7.25/hr) would have to work full-time — nearly 44 hours per week — to afford the average annual net tuition at a four-year public institution today.

We then wanted to see how far a student working 20 hours per week at their state’s minimum wage could get toward covering their net tuition. Their post-tax annual earnings were compared with the net tuition price at more than 2,500 public and private non-profit institutions.

Key findings:

  • We found it is impossible to cover the tuition gap at most four-year schools, both private and public.
  • Students can afford to cover their net tuition costs with a part-time job at only 50 out of 645 (7.75%) of four-year public institutions. Students can feasibly cover net tuition costs with a part-time job at just 24 out of 1,208 private nonprofit four-year institutions (2%).
  • Two-year public institutions were significantly more affordable — it was feasible for part-time working students to cover net tuition at 287 out of 656  two-year public schools (56.25%). On average, a student earning the federal minimum wage would only need to work roughly 25 hours per week to cover net tuition costs at a two-year public institution.
  • Less than 5% of private two-year and private four-year institutions are affordable enough for a part-time working student, MagnifyMoney found.

The cost of going to college has outpaced the rise in wages by a staggering amount over the last decade. When faced with a gap in college costs and earnings, families typically have just one place to turn – student loan debt.

Kabba wanted to avoid student debt at all costs. That drove her decision to enroll at CUNY Lehman. The school is the fourth most affordable four-year public college on our list. Earning the New York state minimum wage of $9/hour, a part-time working student could pocket more than enough to cover their expenses.

Still, working long hours to cover college expenses is far from the ideal college experience.

Research has shown demanding work schedules can all too easily conflict with student’s academic performance. Georgetown’s Center on Education and the Workforce warns against any job that demands more than 30 hours per week from a full-time student.

On a tip from her high school counselor, Kabba landed a $10/hour gig soliciting telephone donations at a midtown-New York charity. During her freshman year, she worked 20 hours most weeks. With a full course load to juggle as well, it wasn’t long before Kabba started to feel the pressure of conflicting responsibilities.

“It was just too much,” she said. To get to work each day, she took a 45-minute train ride from the Bronx to midtown. Rather than working around her class schedule, she had to work her class schedule around her job, because the charity had strict guidelines on when workers could call donors. By the end of her freshman year, her grades started to reflect her strain.

“I decided I’d rather be unemployed and actually do well in school,” says Kabba. She quit before her sophomore year.

Not long after leaving her inflexible charity job, Kabba found another solution. Through a special program offered at CUNY Lehman, she landed a job on campus that paid $9/hour and only required 10 hours of work per week. Reducing her hours and pay meant smaller paychecks, but a better chance she’ll earn the grades she needs to achieve her goal of going to medical school. “It’s on campus and it’s convenient,” she said.

Behind the data

To make our findings more exact, we used the minimum wage of the state in which each school resides to determine the annual earnings of working students. Next, we analyzed data from the National Center for Education Statistics to determine the net tuition costs of each school. The net price is more accurate than a college’s sticker price because it factors in financial aid, scholarships and grants. The net price is what students and families actually pay out of pocket.

We stuck to a 20-hour part-time work schedule because we thought it was unrealistic to assume students could juggle a full-time course schedule and a full-time job. In fact, Georgetown recommends students work no more than 30 hours per week in order to maintain good grades in college.




Student Loan Payoff Calculator

Use this calculator to find out how long it will take you to pay off your student loans.

Tips for working college students

It is virtually impossible to “work your way through school” anymore. The old adage just doesn’t apply to today’s college students, who are paying more than ever for college tuition and can’t feasibly cover their expenses with part-time income alone.

However, there are still benefits to working while in college. Here are some tips on how to maximize savings as a working student.

How to save on college costs with a part-time job

  1. Start small. Try going to a lower cost community college and transferring your credits to a larger institution later. As our study shows, it’s possible for students working part-time to cover net tuition at the majority of two-year public institutions (56.25%). By covering tuition and fees with a part-time job at a two-year school, you can reduce your need for financial aid by half and still graduate from a four-year institution.
  2. Work part-time at a campus job or through a work-study program. Jobs tied to campus are more likely to work around your course schedule and be flexible during unusually demanding times of year, such as quarterly exams and finals.
  3. Stay close to home. Not only will you save on tuition by enrolling at an in-state school, but if you are close enough to continue to live with your family while you’re studying, you could save big on housing expenses. If living at home means commuting by car or public transit for classes, factor in those additional costs.
  4. Don’t rely on student loan debt for expenses you can cover with part-time work. Save the student debt for tuition and other fees that are usually required in one lump-sum payment at the beginning of the semester. When it comes to extra expenses, like your trip to Key West for spring break, or moving to an off-campus apartment, lean on income earned from a part-time job. If you move off campus, you might find it is possible to afford rent (with support from roommates) with income from a part-time job.
  5. Choose your job wisely. If possible, find work in your area of study, which can give you an early jump start in the job market before you even graduate. If you have several years of job experience under your belt at graduation, you’ll be light years ahead of your peers graduating with a comparatively thin resume. Another study by Georgetown’s Center on Education and the Workforce found college students who worked or took internships while in college were more upwardly mobile after graduation and more likely to move into managerial positions.
  6. Take advantage of in-state tuition rates even if you are not a permanent state resident. Each state has its own residency requirements for students looking to qualify for in-state tuition rates, which can be significantly lower than out-of-state rates. Some states will allow students to qualify for in-state tuition if at least one of their parents has been a resident for at least one full year before the student enrolls. If the student is independent — meaning they do not receive financial assistance from a parent to attend college — most states require at least one year of residency in the state. There are other documentation requirements, which can be found at FinAid.org.
  7. Don’t sacrifice your studies for a paycheck. At a certain point, the financial benefits of working part-time might not be worth the additional stress and attention a job might demand. The majority of working students ages 16-29 work 20 hours or less per week. However, research has shown both working and non-working college students graduate with similar levels of student loan debt — 34% of working college students graduate with $25,000 or more in student loan debt, compared to 37% college students who don’t work while in school.
  8. Graduate early (or on time). Dragging out your time in college is a quick way to add thousands of dollars to your student debt load. And it happens more often than you might think. Only 40% of students graduate within four years of enrollment across all types of institutions, according to the Department of Education. Less than one-third of college students graduate on time at public institutions. Save additional tuition expenses by completing your degree in four years or less.


The post Where Students Can Cover College Tuition with a Part-Time Job: Study appeared first on MagnifyMoney.

Here’s How Much More Your Obamacare Plan Will Cost in 2017

Cost of healthcare medical bills doctor

As widely expected, millions of Americans who rely on Obamacare for health insurance will face higher premium costs going into 2017. Premiums will rise 25% on average, according to a new report released by the U.S. Dept. of Health and Human Services. That’s the one of the largest year over year spikes premiums have seen since the marketplace opened in 2013.

A 27-year-old woman who paid $242 for a benchmark silver plan in 2016 will now face a premium of $302 before tax credits. The silver lining here is those three words: before tax credits. Roughly 85% of Obamacare customers currently qualify for tax credits that can offset the cost of their premiums. The average subsidy in 2016 was $290/month. Tax credits can help offset rising premium costs, but they depend largely on household size and income. Beginning in November, consumers can calculate their tax credit for 2017 here.

How much premiums will rise depends largely on the state where consumers are shopping. In states where major insurers have exited the federal marketplace, premiums will see much higher gains. Further contributing to rising premiums, insurers are now raising prices in order to recoup losses they’ve incurred since entering the Marketplace in 2013. For example, BlueCross BlueShield reversed its decision to exit the marketplace in parts of Arizona in September. But as a condition of its decision to stay in the marketplace, the company said it would raise premiums by more than 50%. The company will have very little competition this year. Arizona lost a total of 6 major insurers this year, bringing the total number of insurers offering plans on the marketplace from 8 to only 2.

Arizona customers will feel those price hikes now. A 27-year-old in Arizona will pay a whopping 116% more for a benchmark silver plan in 2017, according to HHS.

Minnesota consumers relying on Blue Cross Blue Shield for coverage were also unlucky this year. Citing losses of $500 million over its three year run on the state’s exchange, BCBS decided in June to pull all but one plan from Minnesota’s state-run healthcare marketplace, leaving more than 100,000 Minnesotans without plans. The benchmark silver plan will rise an average of 59% for a 27-year-old in Minnesota going into 2017.

The silver lining

The government report focused largely on positive news for Obamacare consumers going into 2017.

Three-quarters of Marketplace customers in states using the federal health care exchange (Healthcare.gov) will be able to find plans with a monthly premium under $100 after factoring in tax credits. On average, these consumers will have 30 different insurance plans to choose from.

But the number of individual insurers offering plans in states has decreased in many states. Pennsylvania and Ohio each lost five insurers. Arizona lost six, the largest loss of any state. In several states, including Alaska, Arkansas, Wyoming, and South Carolina, only one major insurer offers plans on the marketplace. When there are fewer insurers operating in a given state, there is less competition and, as a result, potentially higher rates for consumers.

The Bottom Line:

This all means one thing for Obamacare consumers facing open enrollment Nov. 1: It is more important than ever to shop around and compare plans. If customers don’t shop around, they will simply be re-enrolled in their 2016 coverage. And if their 2016 plan is no longer available, the marketplace will stick them in a similar plan that could cost much more.

“In 2017, more than 7 in 10 (76 percent) current Marketplace enrollees can find a lower premium plan in the same level by returning to the Marketplace to shop for coverage rather than re-enrolling in their current plan,” according to the report.

MagnifyMoney has several tips for people who found out that their Obamacare plan has been dropped.

The open enrollment period of marketplace health plans is a crucial time to save and select the right coverage for your family’s needs. Open enrollment for Obamacare consumers begins November 1 and ends January 31. You can shop for plans in advance right now by visiting Healthcare.gov or your state insurance marketplace.

Source: HHS
Source: HHS

The post Here’s How Much More Your Obamacare Plan Will Cost in 2017 appeared first on MagnifyMoney.