The Penny Hoarder |
- What Is an Annuity? How These Tricky Contracts Really Work
- Best Business Checking Accounts of July 2022
- Sweet Settlement Wipes Out $6 Billion in Student Loan Debt
| What Is an Annuity? How These Tricky Contracts Really Work Posted: 30 Jun 2022 05:10 AM PDT Guaranteed income for life sounds like a great deal. It's what many annuities promise, yet nothing is ever as good — or as easy — as it seems. If you're considering purchasing an annuity to supplement your retirement income, it's important to understand the risks, fees and restrictions involved. Let's get started. What Is an Annuity?An annuity is a contract between you and an insurance company where in exchange for paying them a sum of money, they agree to provide you with a steady income stream. The purpose of an annuity is to keep you from outliving your retirement assets by acting like a paycheck during retirement. In some ways, they are similar to a pension, providing a set amount of income in exchange for turning over cash. Annuities are not investments — they're contracts. And like many contracts, annuities can get complicated. "People say they're confusing and they can be. They're just not easy to understand and not easy for professionals to understand," said Andrew Barnett, a certified financial planner with GFA Wealth Design based in Fort Myers, Florida. How Do Annuities Work?When you purchase an annuity, you either make a single lump sum payment or a series of payments over time to an insurance company. Disbursements can begin almost immediately or at some designated point in the future. The payouts often last the lifetime of the policy holder. You choose how frequently you receive future annuity payments, such as monthly, quarterly or yearly. The funds enjoy tax-deferred growth, so you only pay taxes on the proceeds when you receive payments. There is no contribution limit, but contributions do not reduce your taxable income the way traditional 401(k) contributions do. There is also a 10% penalty from the Internal Revenue Service (IRS) to withdraw any funds before age 59.5. How Your Income Is Calculated with an AnnuityThe dollar amount of annuity payments depends on the life expectancy of the person buying the policy. The younger you are when you start receiving income from an annuity, the smaller the payments will be since the payout stretches over a lifetime. When you buy an annuity, you decide if you want income for a guaranteed period of time (called a period certain annuity), a lifetime or a combination of both. How Annuities Got StartedAnnuities became popular during the Great Depression from 1929 to 1933 when people worried about the volatility of the stock market and they wanted guaranteed income. As traditional company pensions became less common, annuities gained traction. Unlike most other financial planning tools, annuities are insurance policies and the contracts are usually maintained by life insurance companies. Like any other insurance policy, annuities transfer the risk from the owner of the annuity — called the annuitant — to the insurance company. So what's in it for the insurance company? To offset risk, the company charges a bevy of fees for management and administration. Insurance companies also impose early withdrawal penalties, caps, spreads and participation rates on certain annuities, which reduces your overall return. Some lifetime annuities have a rider that allows a beneficiary to receive annuity payments for the remainder of their lives should the primary policy holder die first. These are called joint and survivor annuities and are popular for married couples. What Are the Different Types of Annuities?There are many types of annuities, but most fall into several general categories based on how they pay out and how they earn money. The methods of payout are either:
And the way annuities earn money is either:
Annuity Payout OptionsThe first decision when purchasing an annuity contract is deciding whether you want payments to begin now (immediate annuity) or in the future (deferred annuity). Immediate AnnuitiesAn immediate annuity begins paying within a year of purchase. Sometimes the waiting period is about 30 days. An immediate annuity usually requires a large sum of cash to get started (think $50,000 and up). Because of the quick payments, immediate annuities are popular with people who are either very close to retirement or already retired. Deferred AnnuitiesDeferred annuities begin paying out sometime in the future. You make an initial lump sum payment or a series of payments to the life insurance company. That money grows tax-deferred throughout the accumulation process. You can choose how long the money accumulates in a deferred annuity. The typical range is 10 to 30 years. In exchange for payments during the accumulation period, the annuity company promises to send you future income payments. Once the distribution phase begins, you'll begin receiving regular payments from your deferred annuity. Types of AnnuitiesIn addition to choosing the payout time frame, people buying an annuity need to decide how it will grow and the amount of risk they are willing to take. Fixed AnnuitiesA fixed annuity pays a guaranteed amount based on a fixed rate. It's considered relatively low risk. Fixed annuities tend to have much lower costs and fees than variable or indexed annuities. Returns are modest. Life insurance companies invest the funds in bonds and other fixed income investments so the money can grow. Barnett compares a fixed annuity to a bank certificate of deposit, with a term and a set interest rate. "A fixed annuity is not that different," he said. "Instead of going to a bank, you go to an insurance company, and typically the insurance company might pay a little more than a bank." Variable AnnuitiesVariable annuities are riskier because future payments are based on the performance of underlying investments. The policy holder can choose a variety of mutual funds to invest in, much like a 401(k) or a Roth retirement account. Funds usually go into sub-accounts and the overall return is based on how those sub-accounts perform. Once the annuity payout phase begins, you'll get your payments back plus any investment income and gains. However, investment gains inside a variable annuity are almost always capped at a certain percentage. "It's not an unlimited upside, it's always limited," Barnett said. "The insurance company will tell you, 'This can only make 3% a year, if the market goes up 40%, you only get three.' So the insurance company is taking the risk for you and they're taking some of the profits, and you have to be OK with that." Variable annuities also carry the highest fees. Indexed AnnuitiesIndexed annuities — sometimes called fixed indexed annuities — are a bit of a combination of both fixed and variable annuities with a mix of risk and reward. With an indexed annuity, there is a possibility of a higher payout based on the performance of a stock market index, usually the S&P 500. Like a variable annuity, gains are capped at a certain percentage. What Are Typical Annuity Fees?In addition to being confusing, many investment experts pan annuities because of their high and complex fee structure. Generally, the more complicated the annuity contract, the higher the costs. For every customization and add-on like a guaranteed death benefit, guaranteed withdrawal benefit, addition of a spouse, etc., there is an extra cost — usually a percentage of the proceeds. On average, annuity fees can range between 2.3% to 3% of your account balance each year. All annuities charge commission, which is usually baked into the price. Commissions aren't highlighted in annuity contracts, so you won't see them taken out or called fees like you may in other types of retirement accounts. Fixed annuities, which are relatively straightforward, tend to charge the lowest fees. But insurance companies build heavy fees into other types of policies, like variable and indexed annuities. Besides commissions, the annuity company will charge administration and mortality fees, among others. What Are Surrender Charges?Annuities are meant to achieve long-term goals, like retirement. Because of this, the annuity principal will be tied up for a period of time. Annuities come with surrender periods during which you're not supposed to withdraw money or cancel the contract. Surrender periods usually last six to eight years. You will owe substantial taxes, surrender charges and other penalties if you try to terminate the annuity contract or withdraw money early. Early withdrawal fees and penalties can range from 7% up to a whopping 20% of your entire deposit. What Are the Benefits of Annuities?While high fees are a drawback, annuities can make sense for some people in certain situations. In general, Barnett said annuities are good for people with a family history of longevity who are concerned they might outlive their retirement savings and want to guarantee further income. Guaranteed IncomeThe biggest draw of annuities is guaranteed retirement income. Setting up an annuity with lifetime payments can help you avoid market volatility and take the guesswork out of retirement planning. Deferred TaxesTax-deferred growth is another benefit of annuities. "Any growth that you have is non-taxable until you take the money out, which is great," Barnett said. When you take the money out, proceeds are taxed as ordinary income and not as capital gains. What Are the Downsides of Annuities?People who have accumulated substantial assets and are not concerned about running out of income are not good candidates for annuities, nor are people with health problems that could make reaching their life expectancy unlikely. Leaving Money on the TableLosing out on possible wealth accumulation is a huge downside with annuities. Insurance companies make their money by investing your cash and often paying you much less than if you were investing it on your own, reducing your potential wealth. "If the market went up 10% a year, you could buy a mutual fund and get that 10%," Barnett said. "But if you have your money in an annuity with 4% fees, now you only get 6% a year. That's really going to end up reducing your wealth in the long run." Different ethical standardsThere are some ethical issues, too. People who sell annuities usually work for an insurance company as broker dealers. Unlike certified financial planners — which uphold a fiduciary standard by putting their clients' interests first — insurance salespeople often earn high commissions by pushing expensive products. "I don't have anything against paying for insurance, which is basically what you're paying for, and I don't have anything against paying for insurance if it's something that you need … and you understand what the cost is," Barnett said. "Make sure you do your homework and whether you engage a financial advisor to help you or you do research on your own, don't rush into anything." Frequently Asked Questions (FAQs)Where Can You Buy an Annuity? Many big-name insurance companies sell annuities, including Nationwide and State Farm. Other financial institutions — including banks, brokerage firms and mutual fund companies — may also sell annuities. What Is an Annuity Rider? When you purchase an annuity, you get the option to add annuity riders to your contract. A rider is an extra benefit or guarantee. For example, a cost-of-living-adjustment rider guarantees that your annuity payments will gradually increase over time. Each rider costs money, usually 0.5% to 1% of your contract. What Is a Surrender Period? The surrender period usually lasts six to eight years after you buy an annuity. During this time, you can't access your money ahead of schedule or make a large withdrawal. Rachel Christian is a Certified Educator in Personal Finance and a senior writer for The Penny Hoarder. Tiffani Sherman is a Florida-based freelance reporter with more than 25 years of experience writing about finance, health, travel and other topics. This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017. This posting includes an audio/video/photo media file: Download Now | ||||||||||||||||||||||||||||||||||||
| Best Business Checking Accounts of July 2022 Posted: 30 Jun 2022 04:50 AM PDT Advertising disclosure: Some of the links in this post are from our sponsors. We provide you with accurate, reliable information. Learn more about how we make money and select our advertising partners. Starting a business is an opportunity to be your own boss, make money and grow your skill set. There are also the not-so-great, somewhat messy and complicated parts about operating a business. If you start off solo or small, you'll be tackling a lot of tasks yourself. But don't worry. In this article, we're going to address something relatively simple in the business world: the best business checking accounts. We'll go into why you need one, what you should look for and several of the best ones available, both in-person and online-only. What to Look for in a Business Checking AccountBefore you peruse accounts, get a handle on your business needs and wants. For instance, do you make a lot of transactions? Do you want a business credit card ASAP? Do you prefer a big bank where you can pop into a different branch every half mile? There are other considerations. Do you want your bank, credit union or financial institution to…
There are lots of banks for small businesses to choose from, but you want one that will give you the most options. And ideally, save you some money and headaches in the process. To choose the best business checking accounts, we focused on accounts that:
We also focused on checking accounts for small and medium businesses. If you're looking for accounts to manage a higher volume, many of the traditional institutions on our list have them, too. An inconvenient reminder: Banking institutions can be acquired and shut down (RIP Azlo). So, it's a good idea to keep the following business bank accounts in mind in case you find yourself suddenly needing to move your money. Best Banks for Business Checking July 2022
Do I Really Need a Business Checking Account?The purpose of a business checking account is to keep your business finances separate from your personal finances. Technically, you might not need one depending on the legal structure of your business. For example, if you're a freelance writer who established a sole proprietorship and is starting slowly, you could use your personal checking account to get off the ground. But you'll want to be extremely organized about keeping track of your business money for tax time. (Nothing will dampen your momentum like getting audited.) Freelance workers have special needs in a financial institution. Here's our list of the best banks for freelancers. The type of business you're running makes a difference here. If it's transaction-heavy — or a particular legal structure, like a limited liability company — you might need a business checking account, full stop. But if you're starting any kind of business, it's probably in your best interest to open one. Business checking accounts make it easier to track profits, expenses and deductions, and help establish your operation if you file for business credit cards or loans down the line. What's the Right Business Checking Account for You?The bottom line: The best business checking account for you will depend on your business and needs. Whether you're just starting out or looking to level up, there are plenty of options out there, online and off. Start your search now, so your future self — and CPA, come tax time — will thank you later. What You Need to Open a Business Checking AccountTo open an account, you'll typically need the following:
How easy it is to open a business checking account will depend on your business. If you're a sole proprietor, the process might feel similar to opening a personal checking account. If you have a different legal business structure, you'll likely have to provide additional documentation (like your articles of incorporation). Requirements will vary from bank to bank. The Best Business Checking Accounts for July 2022We chose five institutions and a couple of different checking account options for each where available. Chase Business CompleteBest for 24/7 Customer Service and Overall Accessibility    Key Features
Chase is a well-known brand with many physical branches and flexible options for business owners. It's a good choice if you want to easily find a chain and talk to someone in person. Chase also offers 24/7 support, so you can call and email them anytime of day. To learn more, read our Chase Bank review. Chase Business Complete Banking  Bonus amount $300 Minimum initial deposit $25 Monthly service fee $15; waived if you maintain a minimum daily balance of $2K Cash deposits per month Up to $5K without an additional fee Free transactions per month 100 More Information About Chase Chase has business saving account, lending and credit card options, too. Chase offers several small-business credit cards, all with new card member bonuses, which include $750 cash back to 100,000 bonus points depending on the card. Chase Performance BusinessBest for Generous Monthly Transactions Key Features
Chase is a well-known brand with many physical branches and flexible options for business owners. It's a good choice if you want to easily find a chain and talk to someone in person. Chase also offers 24/7 support, so you can call and email them anytime of day. Chase Performance Business Checking Bonus amount None specified Minimum initial deposit $25 Monthly service fee $30; waived if you maintain a minimum daily balance of $35K or more in qualifying accounts Cash deposits per month Up to $20,000 without an additional fee Free transactions per month 250 Check out our Chase Bank Review for a full run-down of the bank's features and offerings. Wells Fargo Initiate BusinessBest for Small Business Owners Starting Out Key Features
Wells Fargo is another strong choice for your business checking account needs. It has many branch locations and you can call them 24/7. Its website is also easy to navigate and lets you find answers to your questions without clicking on a ton of links. Wells Fargo Initiate Business Checking  Bonus amount None specified Minimum initial deposit $25 Monthly service fee $10; waived by having a minimum daily balance of $500 or $1,000 average ledger balance Cash deposits per month Up to $5,000 for free Free transactions per month 100 More Information About Wells Fargo Other benefits include a customized business debit card, 24/7 fraud monitoring and mobile deposit. Wells Fargo also offers small-business lending and credit card options. The banking giant also announced it will be curbing certain fees and offering other services for qualifying customers throughout 2022. Wells Fargo Navigate BusinessBest for Larger Monthly Cash Deposits Key Features
Wells Fargo is another strong choice for your business checking account needs. It has many branch locations and you can call them 24/7. Its website is also easy to navigate and lets you find answers to your questions without clicking on a ton of links. Wells Fargo Navigate Business Checking Bonus amount None specified Minimum initial deposit $25 Monthly service fee $25; waived with min. daily balance of $10,000 or average combined business deposit balance of $15,000 Cash deposits per month Up to $20,000 for free Free transactions per month 250 Check out our Wells Fargo Bank Review for a full run-down of the bank's features and offerings. U.S. Bank Silver Business CheckingBest for Simple, Fee-Free Banking Key Features
U.S. Bank has lots of locations mostly in the Midwest, which is good news if you're a small-business owner looking for a simple checking account. U.S. Bank offers Silver, Gold, Platinum and Premium business checking accounts — no monthly service fees for its Silver account. And, until July 29, 2022, new users can qualify for a $300 bonus when they complete qualifying actions. U.S. Bank Silver Business Checking  Bonus amount $300 Minimum initial deposit $100 Monthly service fee $0 Cash deposits per month 25 for free Free transactions per month 25 per statement cycle; 50 cents per excess transaction U.S. Bank Gold Business CheckingBest for Frequent Deposits Key Features
U.S. Bank has lots of locations mostly in the Midwest, which is good news if you're a small-business owner looking for a simple checking account. U.S. Bank offers Silver, Gold, Platinum and Premium business checking accounts — no monthly service fees for its Silver account. You can also go to U.S. Bank's website and take a short quiz to determine which account would work best for your needs. U.S. Bank Gold Business Checking Bonus amount $300 Minimum initial deposit $100 Monthly service fee 20; waived by satisfying one of several criteria listed on its website Cash deposits per month 100 for free Free transactions per month 300 per statement cycle; 45 cents per excess transaction More Information About U.S. Bank U.S. Bank will charge you $5 for paper statements, so stick with online ones to save money and the planet. You can also access online and mobile banking, check-order discounts, get a small business Visa credit card and more. BlueVineBest for Fee-Free, Online-Only Banking Key Features
BlueVine boasts no hidden fees and unlimited transactions. Members can pay vendors, schedule one-time and recurring payments, and earn an impressive 1.5% on their checking account balance up to $100,000 (However, as of May 2022, members need to meet at least one monthly eligibility requirement to score this rate). Deposits are FDIC-insured (up to $250,000) through Coastal Community Bank. BlueVine  Bonus amount None specified Minimum initial deposit $0 Monthly service fee $0 Cash deposits per month Unlimited. Deposit cash at about 100,000 retailers through a partnership with Green Dot. $4.95 per deposit. Free transactions per month Unlimited More Information About BlueVine Customers get a BlueVine Business Debit Mastercard, access to a business line of credit, two free checkbooks, and phone and email customer support. To earn 1.5% interest on balances up to $100K, members must spend $500 per month with the BlueVine Business Debit Mastercard or receive $2,500 per month in customer payments to their account. Axos Basic Business CheckingBest for Free ATM Use Key Features
Axos Bank is another online-only bank. In addition to business checking accounts that earn interest, customers can take advantage of surcharge-free ATMs across the U.S. Axos Bank offers Basic Business Checking, Business Interest Checking and Analyzed Business Checking. Axos Basic Business Checking  Bonus amount $100 or $200 for qualifying members Minimum initial deposit $1,000 Monthly service fee $0 Cash deposits per month Up to 60 items with remote deposit Free transactions per month 200; afterward, 30 cents each Axos Business Interest CheckingBest for Collecting Interest Key Features
Axos Bank also offers savings accounts and Business CDs, but no credit cards. Other benefits: customers can pay bills with no charge through the app and get 50 free checks. In addition to business checking accounts that earn interest, customers can take advantage of surcharge-free ATMs across the U.S. Axos Business Interest Checking Sign-up bonus $100 or $200 Minimum initial deposit $100 Monthly service fee $10; waived if there's an average daily balance of $5,000 Cash deposits per month Up to 60 with remote deposit Free transactions per month 50; afterward, 50 cents each More Information About Axos Axos Bank also offers savings accounts and Business CDs, but no credit cards. Other benefits: customers can pay bills with no charge through the app and get 50 free checks. Regarding the bonus, new business owners can now earn *$200* if they incorporated after June 1, 2020. Not a new biz owner? No worries: You can still earn $100 when you open your Axos account and follow certain stipulations. Check out our Axos Bank Review for a full run-down of the bank's features and offerings. Regional Business Checking Account OptionsHere's a glance at three smaller, regional options for business checking accounts. If your area isn't listed, you can research credit unions and banks near you. America First Credit UnionThis institution has branches in Nevada and Utah. America First offers four types of business checking accounts: Basic, Premier, High-Yield and Non-Profit. The Basic Business Checking offers 250 free monthly transactions, free online bill pay, access to money market savings, lines of credit and a Business Visa credit card. First HorizonThis bank has branches in Tennessee, Florida, North Carolina, South Carolina, Virginia and Texas. First Horizon offers BizEssentials Checking, Plus Checking and Interest Checking accounts. The Business Interest Checking Account has no minimum balance requirements (though you can waive the monthly maintenance fee when you keep an average of $10K in it), plus you'll earn interest on your balance and have access to a Visa Business debit card. TruistIf this is a new name to you, you'll likely know the two banks that merged to form Truist: SunTrust and BB&T. Truist Bank has branches in Alabama, Arkansas, New Jersey, Ohio, Pennsylvania, Washington D.C., Indiana, Texas, Florida, Georgia, Maryland, Mississippi, Kentucky, North Carolina, South Carolina, West Virginia, Tennessee and Virginia. Truist offers three types of business checking accounts: Simple Business Checking, Dynamic Business Checking and Community Business Checking. Simple Business Checking has no monthly fee. Each month, you'll get 50 free transactions and you can deposit up to $2,000 in cash deposits fee-free. Frequently Asked Questions (FAQs) About Business Bank AccountsHere are some FAQs about checking accounts for your business. Why Should You Open a Business Bank Account? Keeping your business earnings separate from your primary checking account funds is a great way to keep your books organized — ideally, you want to keep your biz earnings and related expenses in one place. This can help you during tax time, and also allow you to get a clear view of how your business is doing. And you'll have good financial records if you want to apply for loans. An individual biz account is good branding because of checks with your business name on them. Do You Need a Business Account for an LLC? he short answer is no, a business account is not a legal requirement for a limited liability company, or LLC. However — again — it's a solid move to keep your business financials in one location. Whether you're a sole proprietor, LLC or other business entity, it's a smart move to keep your finances organized in a separate account. Can You Open an Online Business Checking Account? Yes! You can open an account at a credit union, a brick-and-mortar, regional or online-only bank, or an other financial institution — whatever your preference, you have many options when it comes to choosing a business bank account. Don't feel like you have to limit your search to your primary bank, either; if a different place has a better business account for your needs, you can open an account at a different bank. What is the Best Bank for a Business Account? The best bank for your business will depend on several factors. If you're looking for an online-only option with perks (like APY for your checking account), Axos or BlueVine are worth looking into. However, if you like the peace of mind of walking into a physical branch in big cities across the U.S., Chase or Wells Fargo might be better options for you. Or, maybe you prefer to support a regional credit union — the options are nearly endless. Overall, it's best to look for a bank with no fees. Contributor Kathleen Garvin (@itskgarvin) is a personal finance writer based in St. Petersburg, Florida, and former editor and marketer at The Penny Hoarder. She owns a content-writing business and her work has appeared in U.S. News, Clark.com and Well Kept Wallet. This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017. This posting includes an audio/video/photo media file: Download Now | ||||||||||||||||||||||||||||||||||||
| Sweet Settlement Wipes Out $6 Billion in Student Loan Debt Posted: 30 Jun 2022 03:00 AM PDT An estimated 200,000 defrauded former college students are set to have $6 billion in federal loan debt wiped clean as part of a proposed settlement agreement filed June 23 in federal court. Borrowers in the proposed settlement attended one of over 150 schools that the U.S. Department of Education has determined engaged in misconduct, including:
Nearly all the schools involved are for-profit colleges or vocational programs. These 200,000 borrowers will see a full discharge of their loans, a refund of what they've paid and credit repair starting no later than one year after the agreement formally goes into effect, according to the proposed settlement agreement. Meanwhile, another 64,000 borrowers will get individualized decisions on their federal debt relief within rolling deadlines, depending on how long their application has been pending. The settlement stems from a 2019 class action lawsuit called Sweet v. Cardona. The case argues that many borrower defense claims for loan cancellation were ignored by the U.S. Department of Education. Borrower defense to loan repayment — or borrower defense for short — allows former students to discharge some or all of their federal loans if their school defrauded them or violated specific state laws, like consumer protection statutes. To qualify for borrower defense, former students had to first prove they were misled by their school — often over inflated job placement rates or the ability to transfer credits. Borrowers then had to prove those lies caused personal financial damage, such as not being employable as a result of the program. How Do You Qualify For Borrower Defense?Wondering if you qualify for debt relief from the Sweet v. Cardona class action lawsuit? You're included if you submitted a borrower defense application on or before June 22, 2022, and have not received a decision — or received a denial in or after December 2019. The easiest way to apply for borrower defense is online, where it takes about 30 minutes to complete the application. To apply, you'll need your federal student aid ID, school name, enrollment dates and proof to support why you think you qualify for borrower defense. You can call the Department of Education's borrower defense hotline at 1-855-279-6207 to get updates on the status of your application. Keep in mind that the pool of former students who qualify for borrower defense is limited. Still, it never hurts to apply if you believe your school defrauded you. Chipping Away at Student Loan ForgivenessThe latest announcement comes as the Biden administration continues its piecemeal approach to canceling federal student loan debt. The administration has already approved billions in student loan forgiveness for 1.3 million borrowers. That's about 3% of all Americans who have federal student loan debt. The 1.3 million borrowers who have already qualified for loan forgiveness include:
The administration has also temporarily expanded eligibility for the Public Service Loan Forgiveness program, which cancels a government or nonprofit worker's remaining federal student loan debt after 10 years of payments. Will Biden Wipe $10,000 in Student Loan Debt for Borrowers?There are rumblings that President Joe Biden may enact broader student loan forgiveness in the future. In April, Biden said he was considering wide student loan forgiveness. During his run for the White House, Biden said he would support $10,000 in forgiveness per student. Borrowers have enjoyed a pause on student loan repayments since the pandemic began. But that pause is set to expire Aug. 31. If the White House wipes $10,000 in student loan debt per borrower, the decision will likely be announced before Aug. 31. While the move would provide billions of dollars in financial relief to millions of borrowers, it won't bring down the cost of college for future borrowers nor refund people who already paid off their debt. Rachel Christian is a Certified Educator in Personal Finance and a senior writer for The Penny Hoarder. This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017. This posting includes an audio/video/photo media file: Download Now |
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