Avoiding a Student Loan Co-signer Crisis

Yesterday morning, this mid-year report on private student loans from the Consumer Financial Protection Bureau (CFPB) began circulating around the interwebs, warning borrowers of the complications that can arise in the event that their co-signer dies or files bankruptcy. Here is a brief summary:

Many private student loan contracts include an option for lenders to demand the full balance of a loan when a borrower’s co-signer has died or filed for bankruptcy. Complaints from private student loan borrowers suggest that industry participants are automatically placing loans in default – even when a borrower is paying as agreed.

This is a pretty alarming revelation. A lot can happen in the 10-20 years that your private loans are in repayment, and the last thing anyone wants when a parent dies is to have their student loans immediately due in full… or worse, placed into automatic default (wreaking havoc on your credit).

The good news is that most private lenders offer a co-signer release after a certain number of on-time payments have been made. The bad news is that most borrowers aren’t aware this option even exists, as private lenders don’t exactly advertise it. Borrowers who are interested in a co-signer release often have to contact their lenders directly to get any useful information.

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Moving Forward, A Fresh Start

Dear Readers,

If it seems like there hasn’t been any new content here on The 20-Something Budget in a while… you’re right. Why? I’ll spare you the details, but the short answer is that this has been one of the longest and most difficult winters my husband and I have ever experienced.

While things definitely started looking up at the end of February, we didn’t realize how long it would take to catch up on all of the things we had been putting off while my husband was unemployed. Add in another round of medical issues, and the fact that both of my jobs have become increasingly demanding… and it just hasn’t been easy to find time to write (or even go through guest post submissions).

At the same time, we have a lot of things to be thankful for. We’re both employed and reasonably financially stable. We have a very large tax refund on the way which will allow us to pay off another student loan. The weather is also improving, which means we’ll be able to plant our vegetable garden and get out of the house more in the coming months.

All that aside, I’d really like to get back into the habit of writing at least once or twice per week. I have several article ideas currently in the works, so please do check back soon for updates!

Additionally, if you or someone you know is ever interested in writing a guest post for this blog, feel free to contact me at sarah@20somethingbudget.com.

Thank you for your patience,

Sarah J.

Amazon Prime Price Increase

We’ve known this was coming for a while, but now it’s official:

After nine years, Amazon is increasing its Amazon Prime membership fee from $79 to $99. Additionally, the cost of an Amazon Student membership will increase from $39 to $49 per year.

While a $20 increase may seem a bit jarring, Amazon Prime is still relatively inexpensive when you look at it on a monthly basis. A streaming plan on Netflix or Hulu Plus costs $7.99 per month. Meanwhile, Amazon Prime (which includes both streaming and free 2-day shipping) will cost $8.25 per month after the rate hike.

On the other hand, if you don’t actually use your Amazon Prime account on a regular basis, this may be a good time to re-evaluate whether or not you want to renew the service.

How do you feel about the price increase? Do you think Amazon Prime is still worth it?

How to Budget for a New Baby

Guest post by Naomi Shaw.

There is nothing sweeter than hearing the pitter-patter of little feet running across your floor and hearing the words “I love you” uttered from a tiny little being that you created.

If having children is something that you have always dreamed of, you are in store for a real treat. However, you should be aware that there is a lot of financial obligation that comes along with having a family. Children need a lot of things, and the cost of all of those things can really add up.

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Navigating Unemployment

It’s official: After five months of searching, my husband is officially back to work! The best part? He’s earning significantly more than he was at his previous job. Woot!

For those who are curious, here are some things that helped us stay afloat over the past few months:

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10 Frugal Laws of Living in a Rental

Guest post by Sorilbran Stone.

Although renting may only be a temporary situation, it’s still an excellent time to cut expenses and save up. Take a look at the unwritten laws every frugal renter should live by in order to set aside money for student loans, retirement or save up for a more permanent living situation.

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14 Tips for Paying Down Debt

As of 2013, it is estimated that the average college-educated millennial carries approximately $29,000 in student loan debt and another $2,700 in credit card debt.

Add in our relative lack of experience, mismatched skill sets, and the fact that there simply aren’t enough well-paying jobs to go around in today’s economy… and it’s easy to see why so many 20-somethings are struggling to become financially independent after graduation.

Despite these early challenges, it is possible to break free of debt and start your journey into the land of positive net worth. Here are 14 tips for paying down your debt in 2014:

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How to Build a Snack Stadium

This past weekend, my husband and I hosted our annual Super Bowl party with some of our closest friends… and always the over-achievers, we decided to build our very own snack stadium (or “snackadium”).

Here’s how we did it:

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Tax Credits & Deductions for 20-Somethings

Now that tax filing season has officially begun, it’s time to gather all of your tax forms and start looking for ways to increase your refund for 2013.

Not sure where to start? First, let’s go over the difference between a tax credit and a deduction:

Tax deductions are amounts subtracted from your taxable income. For example, if you earn $35,000 per year and are eligible for $10,000 in tax deductions, your taxable income would be $25,000. A $10,000 tax deduction at this income level would save you approximately $1,500 per year (15% tax bracket x $10,000).

Tax credits, on the other hand, are basically bonuses. If you qualify for a $500 tax credit, you will receive the full $500 regardless of your overall income situation.

Below is a list of tax credits and deductions that you may be eligible for this year.

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One Down, Eight to Go

Good News: As of this past week, we have officially paid off one of my husband’s student loans in full. One down, only eight more to go!

Bad News: A portion of the money used to pay off the loan came from cashing out my teacher retirement savings. :(

I know what you’re thinking: Dipping into retirement savings is the cardinal sin of the personal finance world. Shame on me for even considering it.

But before you tell me how stupid I am for not rolling the money over into a Roth IRA instead, consider the following: This money was not wasted. Far from it. Moving the money from an inactive retirement account directly towards debt provided a guaranteed 6.8% annual return on student loan interest. It also puts us that much closer to getting out of debt for good.

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