Financial Intel Monthly

College Saving Options

Apr 16, 2020 9:31:00 AM / by The Retirement Group (800) 900-5867 posted in CAM Annuity, Chevron, ERB, ESRO, ExxonMobil, Financial Planning, Hewitt, In Service Withdrawal, Lump Sum, Northrop Grumman, Option 1 Withdrawal, Pension, Pension Options, Retirement, Retirement Planning, student loans, Verizon, 401K, 72t, Age Penalties, Benefit Commencement Date, Workshops, TRG, college students

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College costs

For the 2019-2020 college year, the average annual cost of attendance (known as the COA) at a four-year public college for in-state students is $26,590, the average cost at a four-year public college for out-of-state students is $42,970, and the average cost at a four-year private college is $53,980. The COA figure includes tuition and fees, room and board, books and supplies, transportation, and personal expenses. Many private colleges cost substantially more. (Source: The College Board's 2019 Trends in College Pricing Report.)

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Can I Refinance My Student Loans?

Apr 15, 2020 7:31:26 AM / by The Retirement Group (800) 900-5867 posted in CAM Annuity, Chevron, ERB, ESRO, ExxonMobil, Financial Planning, Hewitt, In Service Withdrawal, Lump Sum, Northrop Grumman, Option 1 Withdrawal, Pension, Pension Options, Retirement, Retirement Planning, student loans, Verizon, 401K, 72t, Age Penalties, Benefit Commencement Date, Workshops, TRG

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Yes, but only with a private loan. There is no federal refinancing option for student loans, meaning that you can't refinance federal or private student loans into a federal loan. However, you may be able to refinance your federal student loans and/or private loans into a new private loan. Generally, when you refinance a loan your interest rate may decrease, depending in part on market rates and your credit score. A lower interest rate is typically the main reason why borrowers attempt to refinance their loans. An online calculator can show you how much interest you'll pay over the life of the loan at different interest rates.

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Should I Invest my Extra Cash or Use it to Pay off Debt?

Apr 14, 2020 8:42:30 AM / by The Retirement Group (800) 900-5867 posted in CAM Annuity, Chevron, debt, ERB, ESRO, ExxonMobil, Financial Planning, Hewitt, In Service Withdrawal, Lump Sum, Northrop Grumman, Option 1 Withdrawal, Pension, Pension Options, Retirement, Retirement Planning, student loans, Verizon, 401K, 72t, Age Penalties, Benefit Commencement Date, Workshops, TRG

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To answer this question, you must decide how your money can work best for you. Compare the money you might earn on other investments with the money you would pay on your debt. If you would earn less on investments than you would pay on debts, you should pay off debt.

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Federal Student Loan Borrowers Get Expanded Relief in CARES Act

Apr 9, 2020 7:37:16 AM / by The Retirement Group (800) 900-5867 posted in CAM Annuity, Chevron, ERB, ESRO, ExxonMobil, Financial Planning, Hewitt, In Service Withdrawal, Lump Sum, Northrop Grumman, Option 1 Withdrawal, Pension, Pension Options, Retirement, Retirement Planning, student loans, Verizon, 401K, 72t, Age Penalties, Benefit Commencement Date, Workshops, TRG, CARES act

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On March 27, 2020, Congress passed the CARES Act, the largest economic stimulus bill in the history of the United States, in response to the coronavirus pandemic.1 Included in the legislation are new rules for student loan relief that supersede the rules that were announced only a week earlier by the Department of Education. For more information on both sets of rules, visit the federal student aid website.

What new relief is being offered?

The new legislation provides a six-month automatic payment suspension (administrative forbearance) for any student loan held by the federal government. This six-month period ends on September 30, 2020. Borrowers do not need to contact their loan servicer to request a suspension; they will be automatically placed in administrative forbearance. Under the previous policy, the payment suspension was for two months and it was not automatic; borrowers had to contact their loan servicer to opt in.

The new stimulus legislation also provides a temporary incentive for employers to pay down their employees' student debt balances. Specifically, employers are able to contribute up to $5,250 toward an employee's student debt through December 31, 2020 without any tax consequences for the employee.

What loans qualify for the suspension?

Only student loans held by the federal government are eligible. This includes Direct Loans (which includes PLUS Loans), as well as Federal Perkins Loans and Federal Family Education Loan (FFEL) Program loans held by the Department of Education. Private student loans are not eligible.

Will interest continue to accrue during the suspension period?

No. Interest will not accrue during the six-month suspension period. The interest rate is being set at 0%. Also, due to the Department of Education's earlier student loan relief rules, the interest rate on all eligible federal student loans is effectively set at 0% from March 13, 2020 through September 30, 2020.

What happens with auto-debit payments?

Auto-debit payments are suspended during the administrative forbearance period. Any auto-debit payments processed between March 13, 2020 and September 30, 2020 can be refunded. Borrowers should contact their loan servicer if they wish to request a refund.

Can borrowers keep making their student loan payments?

Yes. Borrowers can choose to keep making their monthly student loan payments during the six-month suspension period if they wish. Borrowers should contact their loan servicer to opt out of the administrative forbearance period and continue their auto-debit payments. Borrowers also have the option to make manual (i.e., not auto-debit) payments during the administrative forbearance period.

During this period of 0% interest, the full amount of a borrower's payment will be applied to principal (once all interest accrued prior to March 13, 2020, is paid). Borrowers can also choose to make partial payments during the suspension period.

How will the suspension period affect the Public Service Loan Forgiveness Program?

Under the Public Service Loan Forgiveness (PSLF) Program, borrowers who work in an eligible public service job and make 120 on-time student loan payments are eligible to have the remaining balance on their federal Direct Loans forgiven.2 Under the new legislation, the six-month freeze on student loan payments will not affect the 120-month running period for purposes of the PSLF program. In other words, each month of the suspension period will still count toward a borrower's 120-payment tally, even if the borrower does not make any payments during the six-month period.

How can borrowers contact their loan servicer?

A loan servicer is the company that handles a loan's billing and provides related services. Borrowers who want to contact their loan servicer for any reason should try to do so online or by phone. For borrowers who do not know who their loan servicer is or how to contact them, they can visit studentaid.gov/login or call 1-800-4-FED-AID for assistance.

1) Coronavirus Aid, Relief, and Economic Security Act (CARES Act), enacted March 27, 2020
2) U.S. Department of Education, Office of Federal Student Aid, 2020
 
 
This material was prepared by Broadridge Investor Communication Solutions, Inc., and does not necessarily represent the views of The Retirement Group or FSC Financial Corp. This information should not be construed as investment advice. Neither the named Representatives nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information or call 800-900-5867.

The Retirement Group is not affiliated with nor endorsed by fidelity.com, netbenefits.fidelity.com, hewitt.com, resources.hewitt.com, access.att.com, ING Retirement, AT&T, Qwest, Chevron, Hughes, Northrop Grumman, Raytheon, ExxonMobil, Glaxosmithkline, Merck, Pfizer, Verizon, Bank of America, Alcatel-Lucent or by your employer. We are an independent financial advisory group that specializes in transition planning and lump sum distribution. Please call our office at 800-900-5867 if you have additional questions or need help in the retirement planning process.

The Retirement Group is a Registered Investment Advisor not affiliated with FSC Securities and may be reached at www.theretirementgroup.com.
 
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Strategies When You Can't Pay Student Loans

Apr 7, 2020 7:26:13 AM / by The Retirement Group (800) 900-5867 posted in CAM Annuity, Chevron, ERB, ESRO, ExxonMobil, Financial Planning, Hewitt, In Service Withdrawal, Lump Sum, Northrop Grumman, Option 1 Withdrawal, Pension, Pension Options, Retirement, Retirement Planning, student loans, Verizon, 401K, 72t, Age Penalties, Benefit Commencement Date, Workshops, TRG

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Introduction

You've been repaying your student loans faithfully for five years but, all of sudden, things have taken a financial turn for the worse. You've been laid off from your job, your car needs repairs, and you suddenly find yourself with unexpected medical bills. In short, you are facing a serious cash flow shortage.

Some borrowers run into financial difficulties at one time or another in the course of repaying their student loans. If you find yourself in this position, don't despair. Nearly all lenders offer certain options to help you through temporary cash flow jams.

The primary way to temporarily postpone the repayment of your student loan is to request either a deferment or forbearance from your lender. If this is not possible, you can try to have your student loan permanently canceled. If this too is unsuccessful and you can't otherwise negotiate with your lender for a reprieve in your payments, you will be in default on your student loans. Each of these subjects is discussed below.

You will need to communicate with your lender about your financial situation as soon as possible to avoid becoming delinquent, or worse, defaulting on your student loans. The worst thing you can do is to avoid the situation. The sooner you communicate with your lender, the easier it will be to get help in your repayment efforts.

As a last resort, you may decide to file for bankruptcy. However, be aware that it is very difficult to have student loans discharged in bankruptcy.

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Bankruptcy and Student Loans

Apr 3, 2020 7:48:35 AM / by The Retirement Group (800) 900-5867 posted in CAM Annuity, Chevron, ERB, ESRO, ExxonMobil, Financial Planning, Hewitt, In Service Withdrawal, Lump Sum, Northrop Grumman, Option 1 Withdrawal, Pension, Pension Options, Retirement, Retirement Planning, student loans, Verizon, 401K, 72t, Age Penalties, Benefit Commencement Date, Workshops, TRG

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Introduction

When you can no longer pay your debts, bankruptcy laws generally allow you to resolve your debts by dividing up your assets (if you still have any) among all your creditors. Debts that are not paid off in this process are discharged by order of a federal court. When a debt is discharged, you are no longer obligated to pay it.

Student loan debt receives special treatment under the bankruptcy laws. Generally, student loan debt cannot be discharged in bankruptcy unless the debt imposes an undue hardship on you and your dependents.

The discussion here focuses on student loans and bankruptcy.

There are different types of bankruptcy cases. A Chapter 7 case involves a liquidation of assets. Chapter 13, sometimes called a wage-earner's bankruptcy, allows you to pay off all or some portion of your debt in installments over time. Chapter 12 is for family farmers and (as of October 17, 2005) family commercial fishing operations, and Chapter 11 is typically used in business reorganizations. Your attorney can help you decide which, if any, is appropriate for you.

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Repaying Student Loans

Apr 2, 2020 7:26:37 AM / by The Retirement Group (800) 900-5867 posted in CAM Annuity, Chevron, ERB, ESRO, ExxonMobil, Financial Planning, Hewitt, In Service Withdrawal, Lump Sum, Northrop Grumman, Option 1 Withdrawal, Pension, Pension Options, Retirement, Retirement Planning, student loans, Verizon, 401K, 72t, Age Penalties, Benefit Commencement Date, Workshops, TRG

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What is it?

When you take out a loan to pay for college or graduate school, you must repay that loan at some future date. If you find yourself in the position of having to budget every month for a student loan payment after graduation, you are not alone. A majority of students now borrow at least some money to help finance their education. Yet excessive student loan debt can have negative ramifications. For example, student loan debt may affect decisions to buy a home, a car, or to have children. Because student debt levels are likely to continue to increase as the cost of college and graduate school continues to outpace inflation, it is important to know how to manage student loan debt.

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Federal Student Loan Borrowers Get Some Relief Due to COVID-19

Mar 24, 2020 4:02:12 PM / by The Retirement Group (800) 900-5867 posted in CAM Annuity, Chevron, ERB, ESRO, ExxonMobil, Financial Planning, Hewitt, In Service Withdrawal, Lump Sum, Northrop Grumman, Option 1 Withdrawal, Pension, Pension Options, Retirement, Retirement Planning, student loans, Verizon, 401K, 72t, Age Penalties, Benefit Commencement Date, Workshops, TRG

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On March 20, 2020, the Department of Education announced terms for student loan relief for tens of millions of borrowers in response to COVID-19.1 Here are answers to some questions about the new rules. For more information and to follow subsequent potential rule modifications, visit the federal student aid website.

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Saving for College

Mar 15, 2016 7:36:24 AM / by The Retirement Group (800) 900-5867 posted in Chevron, financial freedom, Financial Planning, In Service Withdrawal, income, invest, Money, Northrop Grumman, PG&E, priorities, stocks, student, student loans, 401K, 401K.com, 72T, 72t, access.att, Age Penalties, AT&T Pension, att workshop, Benefit Commencement Date, Verizon Workshop

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