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Post-Grad Payback

With college graduation season just a short six weeks away, most recent graduates focus on surviving final exams, crossing off the last remaining items on their bucket lists, and securing new job or fellowship opportunities. While the Commence Day ceremony marks the conclusion of undergraduate life, it also signifies the beginning of paying back student loans. Even those who deferred their first student loan payment will need to begin planning. We compiled five easy-to-implement ways to plan for student loan payback that will not break your budget. 1. Make a lump sum payment After May graduation, many students will be receiving graduation gift money, job signing bonuses and tax refunds. Applying this lump sum to your student loans can save you thousands in accrued interest and decreases the repayment time. Use Make Lemonade’s Lump Sum Calculator to gauge how much you could save in time and interest by applying a lump sum at the beginning of repayment. 2. Make more than the minimum payment This tip is quite straightforward. The more you pay, the less interest is added to your remaining balance and the quicker the loan is paid off. No need to put pressure on yourself to double the payment. Even $50 more each month will make an impact. Still on the fence? Incorporate this added amount to your automatic loan payments so that you stay consistent and hesitation-free in your payments. 3. Refinance Your Loans Regardless of whether you have one loan or multiple, refinancing creates an opportunity to lower your interest rate. Before diving into refinancing, first consult a lender to verify that your interest rate will decrease. Here is a list of awesome banks that help refinance loans. 4. Avoid Repayment Programs It is true that many of these programs aim for lower monthly loan payments. But they do so by extending the length of the payback term. This means that it will take you longer to pay back your balance and your principal will continue to accrue interest during that extended period. 5. Start a Side-Hustle Spend a few hours each week on a side-hustle that you contribute 100% of the income into loans repayment. Ideally, choose something easy and enjoyable that does not restrict your schedule. Do you enjoy shopping? Apply to work part-time at a retail store. Get a discount off of apparel, and direct that cash toward your loan. In California, working one 5-hour shift per week at $11.00 minimum wage means you could earn $220 toward your loans every month. Not a bad trade-off, eh? Regardless of how you tackle the loan behemoth, be proactive about making a plan. Loans can be a challenge to navigate, but with the proper strategy, you’ll find your balance at $0.00 in no time.

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Deciding Your Child’s Future May Not Be As Clear-Cut As You Thought

Gearing up for SAT and ACT season? Countless families are shifting from summer mode to college prep mode as the application deadlines for most major universities draws near. Not surprisingly, many high school juniors and seniors have thought only of where they will attend college. In fact, not many been of these students have been asking themselves if they want to attend a four-year academic institution at all. As it turns out, “do I want to get a bachelor’s degree?” may very well be the $55,000/year question of the year. For the last four decades, the United States experienced a cultural push for adolescents to earn bachelor’s degrees. In fact, data collected by the United States Census Bureau indicates a over a 28% percent increase in bachelor’s degree holders in 65 years: from 5% in 1940, to 33% in 2015. This year alone, around 33.4% of Americans reported having earned at least a bachelor’s degree, with many within that cohort having gone on to earn master’s and doctoral degrees. Statistics from the Bureau of Labor Statistics show the substantial difference in earning potential for those with academic degrees and those without, the latter earns approximately $464 less in average weekly pay. It seems only natural then, to assume that most American parents intend on sending their children to four-year institutions to secure a bachelor’s degree, and, hopefully, higher salaries in the future.   But is committing to four years of study, $30,000 worth of student loan debt and an uncertain hiring pool the only option for leading financially secure adult lives? Perhaps not. Recently, a contributor to PBS published an article claiming that the nation’s emphasis on attaining bachelor’s degrees after high school caused a number of adverse effects; particularly the erosion of vocational industries. You might be thinking, “what’s the big deal?” With a shortage of skilled trade workers, the demand for these positions are steadily increasing. Not to mention, the salaries for these careers. Interestingly, the article states that “The United States has 30 million jobs that pay an average of $55,000 per year and don’t require a bachelor’s degree, according to the Georgetown center.” That is a big deal. A massive deal. But that is not all. Not only do a plethora of well-paying jobs exist that do not mandate $30,000 of debt, but “people with career and technical educations are actually slightly more likely to be employed than their counterparts with academic credentials, the U.S. Department of Education reports, and significantly more likely to be working in their fields of study.” Talk about thought-provoking, right? So we leave you to ponder this information as your high school juniors and seniors begin contemplating their post-graduation plans. It may be worth considering a broader range of paths, including the pursuit of a vocational education or trade certification. While the benefits of college cannot be measured solely by one’s income, the desire to build a stable future for your kids may be more attainable than what we have been led to believe.

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