Dealing with credit can be difficult for most Americans, and you’re not the only one who may feel this way. Your credit score may not look good, but there are ways to help! A lot of people work on improving their credit standing and you can do it too. As a matter of fact, you can start improving your credit sooner than you think!

What You Should Know About Your Credit Score

If you want to improve your credit, you should know more about your credit score. What is your credit score? Your credit score is a number that could range from 300 to 850. This score defines how creditworthy a consumer can be, which shows how trustworthy a person is with their credit. If your credit score is good, then lenders will see you as a reliable borrower.

How is your credit score calculated? It is calculated from the information in your credit report. Your credit report has a lot of credit account information. This includes the number of active credit accounts you have, how much debt you have, the background of your payments, and so on. The agency responsible for calculating your credit score are credit bureaus. There are two scoring models that credit bureaus use to calculate a person’s credit score. These two scoring models are the FICO credit model and the VantageScore credit model. Generally, the most common scoring model credit bureaus use is the FICO model.

What Affects Your Credit Score?

The information from your credit report will affect your credit score in different ways. You will find that this information is divided into five different categories. These categories have their own unique effects on your credit report. The five aspects that affect your credit score include:

• Background of Payments (35%)
• Credit Usage Ratio (30%)
• Age of Credit (15%)
• Hard Pulls (10%)
• Different Types of Credit (10%)

Background of Payments (35%)

Background of payments is the most important aspect that affects your credit score. It accounts for 35% of your score. This aspect includes any late payments you have, how late you made these payments, payments you made on time, accounts that went to collection, and so on. Since lenders are interested in knowing more about you as a borrower, then this will help them figure you out!

Credit Usage Ratio (30%)

How much money you owe compared to your total available credit is your credit usage ratio. This is the second aspect on the list and it can affect your credit score by 30%. Your credit usage ratio focuses on how much credit you are using compared to your total credit limit.

If you want to know more about the credit utilization ratio, then let’s give you an example. Let’s say you have a Discover credit card with an amount of $3,000 dollars in credit. This $3,000 amount becomes your credit limit. If you have $1,800 spent on this card, this is known as your credit utilization because it is compared to the full credit limit of $3,000. $1,800 is 60% of your limit, which is excessive! It is best to try to keep your credit utilization ratio at or below 30%. With a $3,000 limit, you shouldn’t spend no more than $900 to keep at this percentage.

Age of Credit (15%) 

The background of your credit is also known as how old your credit is. The age of your credit includes the following aspects:

• The amount of time you have had credit
• The oldest and newest credit account you have
• The average age of your credit

This might not be the most influential aspect of your credit score, but it still impacts 15% of your credit score.

Hard Pulls (10%) 

Hard pulls (also known as hard inquiries) affect 10% of your credit score. It might not be a lot, but it is still something to be aware of. There are two types of inquiries on your credit score: soft inquiries and hard inquiries. Soft inquiries do not affect your credit. On the other hand, hard inquiries affect your credit and need written authorization from the account holder. When lenders want to know more about the potential risk they could face with you, they might ask for a hard inquiry on your credit. This allows them to check your credit information and it generally happens within the underwriting process. Fortunately, hard inquiries fall off after roughly two years, so you do not need to stress out about it a lot.

Different Kinds of Credit (10%)

The last aspect that affects your credit score is different kinds of credit, which amounts to 10%. Similar to hard pulls, this might not be the most important aspect. However, you should be aware of it from time to time. Different kinds of credit include installment loans, credit cards, and so on. A wide range of credit means that you have better credit health than those who only have one type of credit. However, you do not need to actively work on getting different types of credit for a good score.

Fixing Your Credit

Customers can receive a free credit report once every year. You can check out your free report through the Annual Credit Report website. There are different ways that you can make your credit score better if it does not seem like it’s in great shape. Despite the fact that it can feel overwhelming, there are more options than you think. The best way to improve your credit score is to work on how you manage your personal credit.

Properly Managing Your Personal Credit

You should consider fixing your credit on your own, which will improve your credit score and help you develop better habits. Properly managing your personal credit can include doing the following:

• Fighting Back On Any False Information
• Make Sure You Pay Your Bills by the Due Date and You’re Repaying Your Debt
• Keeping Your Credit Utilization Rate Lower Than 30%
• Making Sure to Report Any Extra Accounts
• Request Assistance from a Credit Counseling Organization

Fighting Back on Any False Information

Once you receive your credit report, you should look for any inaccurate information that might affect your credit score. Inaccurate or false information includes errors in your identity, inaccurate account status information, data management concerns, and so on. You can then fight back any inaccurate information with credit bureaus. The process of fighting back might seem hard, but it does not need to be. Credit bureaus need to report correct information on your credit report. Pointing out false information and how they are invalid can get them dropped from your report. Once the credit bureau removes the false information from your report, their negative effect will fall off and you might find your score improving in time.

Make Sure You Pay Your Bills by the Due Date and Repay Your Debt

Since payment history is such an important aspect when it comes to your credit score, you should manage it as best as you can. You should make sure to pay your expenses on time when they reach their deadline to fix your credit score. If you forget about paying your bills, then you should consider placing automatic payments.

When you set up automatic payments, your bank account automatically transfers money to your bills. You do not have to worry and constantly remind yourself to pay your bills with this feature. Make sure that you know when the payments are going through so that you can check your bank account to make sure the funds have been transferred. If you cannot afford to pay your bills, then you should think about discussing it with your lender. Your lender might be more flexible than you think.

A lot of Americans find themselves dealing with debt. As a matter of fact, the average American household debt is $58,604. 77% of families in the United States deal with some type of debt. Popular types of debt include credit card debt, student loans, mortgages, and more. These debts can build up. However, there are different ways you can deal with your debt. You just need to figure out what can help your finances, lifestyle, and personal growth. Some individuals prefer working on their credit cards, while others prefer managing bigger sources of debt. When paying off debt, you should make sure to figure out whether there are any prepayment fees. Some lenders will request a penalty if the customer pays off their debt sooner than planned!

Keeping Your Credit Utilization Rate Lower Than 30%

As we mentioned earlier, it is good to keep your credit utilization rate lower than 30%. On the other hand, if you are interested in seeing real improvements, then repaying your credit per month can boost your credit! Your credit utilization ratio is the second most important aspect when it comes to your credit score. You need to make sure you know more about your credit limit and your current use of credit to improve your score.

Making Sure to Report Any Extra Accounts

Experian Boost is a financial service that Experian provides (one of the major credit bureaus) that can support customers who want to improve their credit scores. This financial service will let you know about the payments you make on time for utility bills, phone payments, streaming services, and more. When credit bureaus receive a person’s scores, they can help rebuild and improve their credit score, since it counts as your payment background.

Requesting Assistance from a Credit Counseling Organization

Improving your credit on your own means you need to find the right services to help you along the way. You should consider contacting a credit counseling organization. These organizations can help you learn about a lot of things in your finances. This includes your money, budget planning, credit score, and more. Typically, credit counseling organizations do not profit from these services and their counselors are certified. You can look through your current finances and your plans while the organization can offer advice and education to help you out.

Bottom Line

Improving your credit score does not need to be overwhelming. There are many aspects that affect your credit. This includes the following:

• Fighting Back On Any False Information
• Make Sure You Pay Your Bills by the Due Date and You’re Repaying Your Debt
• Keeping Your Credit Utilization Rate Lower Than 30%
• Making Sure to Report Any Extra Accounts
• Request Assistance from a Credit Counseling Organization

There are several ways that you can take control of your credit. You might not find positive changes taking place on your credit overnight, but you will eventually see improvement in your credit. Make sure that you pay your bills on time, fight back on any inaccurate information on your credit report, and make sure to keep your credit usage lower than 30%. Also, make sure you take your time and research your options. You need to remain calm when you are figuring out a plan that works for your credit situation!

Many people forget that not everyone can afford the cost of getting a phone. When people don’t have enough money to get a phone, it can be difficult to navigate life, especially when nowadays a majority of people are using a smartphone. Fortunately, there are opportunities out there for people to get a bunch of free perks like a phone, unlimited data, international calling, and more. Yes, you read that right!  All of that can be provided to qualifying Americans at no cost. That is why it is important to know what’s out there and where you may be able to find this support!

Is It Possible to Get a Free Phone?

You might not believe it, but it is true that you can get a free phone. The best part is that it is all legit and a lot of carriers offer this opportunity. These carriers can offer free phones and discounted perks due to a variety of programs. One standout is the Lifeline Program.

The Lifeline Program: What is It and How Can It Help?

Before you find out about the carriers that offer a phone for free, you should know about the programs that make this opportunity possible. The Federal Communications Commission (FCC) provides the Lifeline Program. However, the Universal Service Administrative Company (USAC) administers the program and is responsible for supporting consumers in several aspects. This includes applying, recertifying, finding out eligibility criteria, and so on.

The aim of the Lifeline Program is to make communication services affordable for eligible recipients who have limited income. Generally, this program offers a discount every month on broadband internet services, telephone services, or bundled voice-broadband packages. This discount can reach up to $9.25, or reach up to $34.25 for those who are staying in tribal areas.

If you are interested in finding out whether you are eligible, then you should be at or less than 135% of the Federal Poverty Guidelines. On the other hand, you could also qualify when you currently receive benefits from the following programs:

• Supplemental Security Income (SSI)
• Medicaid
• Federal Public Housing
• Supplemental Nutrition Assistance Program (SNAP)
• Veterans and Survivors Pension Benefit
• Programs that Help Specific Tribal Areas

Which Carriers Offer Phones For Free?

While some of the popular carriers do not offer free phones, there are still opportunities  to consider from:

• Metro by T-Mobile
• AirTalk Wireless
• Safelink Wireless
• Verizon

These carriers are just a few options to consider because they offer great phones on solid networks. Some carriers might not be accessible in every location. That is why you should look for carriers that are available in your area.

Metro by T-Mobile

To start off, there is Metro by T-Mobile. Metro’s latest deal is a game-changer, offering 5G phones absolutely free – no hidden costs involved. What you see is what you pay at Metro. To grab this deal, there are some conditions that need to be met. This includes choosing a plan starting at $40/month, and paying the applicable tax. Online shoppers aren’t left out of the deal opportunities either. Certain devices are available without any activation fees, plus the option to add a voice line to your existing plan.

AirTalk Wireless

Safelink Wireless

Another free phone provider is Safelink Wireless. This carrier provides an excellent opportunity for ACP enrollees using other providers to switch to their service and receive a free smartphone, along with unlimited talk, text, and data on a top-tier network. Alongside AirTalk Wireless, SafeLink is recognized for its varied options that cater specifically to user needs. Additionally, Lifeline recipients with SafeLink benefit from extra perks, such as unlimited texts and 4.5 GB of data, enhancing their communication experience.

Verizon

Upgrading to a new phone can be cost-effective with Verizon’s range of promotions. They frequently offer a variety of free phone deals, catering to different preferences with a selection of models and brands. Opting for a 36-month bill credit plan or trading in your existing device can make it easy to secure a free upgrade. Moreover, their buy-one-get-one-free offers are especially appealing for families or individuals in need of multiple phones. These opportunities underscore how straightforward and affordable it can be to upgrade your phone through Verizon.

Overall

Not everyone can afford a phone, and in today’s world, lacking one can make life quite challenging. However, there’s good news: there are opportunities to get a phone and other perks like unlimited data and international calling for free. Yes, really! Qualifying Americans can enjoy these benefits at no cost, thanks to programs like Lifeline, offered by the FCC and administered by the USAC. This program helps make communication services more affordable for those with limited income, offering monthly discounts on various services.

To qualify, your income should be at or below 135% of the Federal Poverty Guidelines, or you might be eligible through certain federal assistance programs. Providers like Metro by T-Mobile, AirTalk Wireless, SafeLink Wireless, and Verizon offer free phones on solid networks. Remember, availability might vary by location, so it’s important to find carriers that serve your area. With these opportunities, getting a new phone can be both affordable and straightforward.

It is an unfortunate problem if your bank account goes negative. Constantly drawing money from your account without checking the balance can cause this unexpected issue. Despite this, you shouldn’t worry! If your account drops that low, there are ways to get it back on track. We advise you to do your best not to let your account drop to its lowest. In this article, we will also provide you with ideas that revolve around maintaining your account and keeping it in balance.

If Your Account Turns Negative, What Should You Do? 

Here is some helpful advice you should keep in mind if your account gets overdrawn:

• Ask about your bank’s overdraft fees
• Keep the account unused
• Understand the situation
• Continue saving until you’re no longer in the negatives
• Contact your bank
• Prevent the negatives from happening

Ask About Your Bank’s Overdraft Fees

You should always try to look into the situation when your account gets overdrawn. For this reason, you should always ask about your bank’s overdraft fees. Most banks charge this fee when they find that your account has a certain amount overdrawn. It’s important to keep in mind that you should reach out to your bank to know more about this situation. Paying these fees can sadly make the situation of getting your account back on track more stressful. The reason why is that you will have to pay extra fees in addition to the amount of money you are required to pay regularly to reach a positive account once again. The average cost of these fees can be $30 to $35.

Keep the Account Unused

If you have automatic payments set up, then you may have to deal with some extra annoying steps. That’s because a good rule of thumb is to stop using the account until it is back in the positives. Let’s say your account has a $65 outstanding balance. It is a good idea to leave it at $65 rather than develop a $300 debt that you would have to pay back only to get your balance back to $0. In addition, continuing to use an overdrawn account may result in further fees that the bank hits you with!

You must remember that if you have debts to pay, you might want to wait on depositing your paycheck into your account. That’s because that money will be transferred to the balance that is overdrawn instead. Consider using a check-cashing service if you need more money to cover extra costs like a light bill.

Understand the Situation

It’s necessary that you understand the figures involved when your account is overdrawn. Calculate the amount of money required to bring your balance back to zero and begin building a security cushion. You should also take into account any outstanding debts and overdraft fees that can affect that balance amount.

Continue Saving Until You’re No Longer in the Negatives

With a clear idea of what your account requires, you should concentrate on returning it to its ideal state. The chances that the bank will increase its fees and eventually deactivate your account increases generally the longer you wait to get your account balance out of the negatives. It can be difficult to quickly increase your account balance, but you might be able to do so by selling things you don’t use.

Contact Your Bank

You might not realize how understanding your bank is. The possibility of having your fees reduced exists. Your bank might not charge you if you’ve never overdrawn your account before. Although they are not required to, they could decide to provide a refund. You should try to be friendly despite your anger over your overdrawn account based on this.

However, if you want a little assistance, you might also benefit from contacting your bank. Your bank might be able to work with you to create a payment schedule that will help you better manage your debts in a practical manner.

Try to Prevent the Negatives From Happening From the Start

While the methods above can help you if you’re in the negatives, the best advice is to prevent getting there from the start! You should keep a few tips in mind to prevent overdrawing your account. Some of these tips are:

• Set a Budget
• Maintain Your Budget
• Accept Low Balance Notifications
• Avoid Participating in Overdraft Programs

Set a Budget

Making a budget is one of the most important aspects of your financial wellness. A budget should compare the amount of money you earn to the amount you spend. Let’s say, for example, that you earn $2,500 each month. Along with knowing your income, you’ll also want to see what you’re spending it on. That means making a list of your monthly spending and bills. You might deal with the following expenses:

• $135 for your phone bill
• $40 for a gym membership
• $275 for food
• $315 for car insurance
• $1,200 for housing and utilities

These costs pile up! Let’s imagine that you pay $1,965 in monthly bills after everything. Accordingly, if you earn $2,500, the amount of money you have left over to put toward savings or plans is just $535. By breaking down your budget, you can have a better understanding of your financial situation as a whole.

Maintain Your Budget

You should stay on top of things to make sure you stick to your budget now that you know the fundamentals. This requires keeping track of your earnings when you are paid as well as any expenses you have. You’ll be able to make wiser choices if you are aware of what’s happening with your account! Plus, it won’t likely come as a surprise because you’ll be aware when your account is running low.

Accept Low Balance Notifications

Consumers can choose to sign up for notifications from the majority of banks. A low-balance alert is one particular sort of notification. This notification can be useful when managing your financial situation. That’s because it can add an extra layer of awareness of your account if it reaches a certain limit.

Avoid Participating in Overdraft Programs

The details of overdraft fees will vary based on the bank, so it is important to keep that in mind. Most banks, however, only charge an overdraft fee on customers who join the bank’s overdraft program. Fortunately, customers can leave the program at any time. Transactions that go to a negative account will not be processed without the protection of an overdraft program. That means they will be denied!

To Sum Up

When your accounts are negative, it might feel overwhelming and unpleasant. There are certain tips and advice to be aware of that may be helpful. You should keep the following in mind if your account is overdrawn:

• Ask about your bank’s overdraft fees
• Keep the account unused
• Understand the situation
• Continue saving until you’re no longer in the negatives
• Contact your bank
• Prevent the negatives from happening

When trying to prevent a negative account, you should:

• Set a Budget
• Maintain Your Budget
• Accept Low Balance Notifications
• Avoid Participating in Overdraft Programs

Even while it could seem impossible, managing an overdrawn account is easier than you might think!

There are loads of assistance options that people do not know exist. One of these options is the Achieving a Better Life Experience (ABLE) Act, which is meant to support Americans who have disabilities. This act was established in 2014 and offers people the chance to save thousands of dollars each year through a tax-deferred savings account. The savings account accepts yearly contributions that can amount to up to $16,000. Through these accounts, it will be easier for people to deal with qualifying disability costs.

What is an ABLE Account?

An ABLE account, or a 529 A account, is an account that offers people with disabilities and their household members a way to save money. The account’s beneficiary, which needs to be specified, can use the money that they saved on eligible disability costs. The Municipal Securities Rulemaking Board (MSRB) is responsible for the account’s regulation. In 2022, the annual limit for these accounts reached $16,000. However, these annual limits can vary, depending on the state. The account beneficiary, their family members, or friends can contribute after-tax funds to the ABLE account. Usually, the contributions are not considered tax deductible. On the other hand, there are states that could accept state income tax deductions.

How Do States Operate These Accounts?

States have their own version of regulations for ABLE accounts, but there is no regulation about opening an account in any state. Back then, there was a rule that declared that individuals can only open an ABLE account in the state they are living in. Fortunately, this rule expired in 2015.

In order to figure out state regulations, there is a free online tool to help you find out. The ABLE National Resource Center offers a map with each state’s ABLE programs. When you look through different states, you might find some states that offer tax benefits or charge fees, while others do not provide either. This is why it is important to compare between states to find the right state for your current situation!

ABLE Account Fees

Some states could charge fees for ABLE Accounts. Typically, states request a maintenance fee per month. On the other hand, states could offer discounts or waive fees for beneficiaries that have a certain amount in their account.

Eligibility Requirements

There are eligibility requirements that you need to meet to open an ABLE account. This is because ABLE accounts are meant to help people with disabilities. To qualify, you should meet at least one of the following requirements:

• Be eligible for Supplemental Security Income (SSI) because of a disability/blindness that began before you reached the age of 26
• Be able to receive childhood disability benefits (CDB), disability insurance benefits (DIB), or disabled widow’s/widower’s benefits (DWB) because of a disability/blindness that began before you reached the age of 26
• Have verified proof that you meet the conditions for certification of a disability before you reached the age of 26

Regardless of which requirement you meet, you will need to present evidence that you qualify. The state in which you apply for an ABLE account will decide what documents you should present. Evidence of your disability is required in all states with ABLE programs.

What If You Are Older Than 26?

If you meet other eligibility requirements, then it does not matter how old you are! In the case that you are older or younger than 26, you still might be eligible for an ABLE account.

Eligible Disabilities and Disability Costs for an ABLE Account

The disability that can qualify you could be physical, mental, developmental, and so on. The Social Security Administration’s Blue Book (Parts A and B) and SSA’s List of Compassionate Allowances Conditions can help you find out about qualifying disabilities for an ABLE account. ABLE accounts exist to provide coverage for qualifying disability expenses (QDE) that are designed to provide support to the account’s beneficiary. Some QDEs include:

• The cost of assistive technology and relevant services
• Basic living and housing costs
• Education, job training, and employment support expenses
• The expenses of services in financial management and administration
• Funeral and burial costs
• Health, prevention, and wellness expenses
• Legal costs
• Transportation expenses

Benefits of an ABLE Account

One of the greatest advantages of an ABLE account is that the first $100,000 that the account receives is not labeled as a personal asset. This is important because other programs like Supplemental Security Income (SSI), Medicaid, and housing aid focus on personal assets in their eligibility requirements. These assistance options have a restriction where recipients cannot own more than $2,000 worth of financial assets. An ABLE account, on the other hand, allows people with disabilities to own more than that $2,000 restriction.

Frequently Asked Questions

Since not everyone knows about ABLE accounts, there are likely a lot of questions involved. These accounts can be a little overwhelming to understand, but it’s quite simple. All you need is a little time and effort to research these accounts and you will figure it out!

Who is the Account Beneficiary of an ABLE Account?

The term “beneficiary” is not something you read in the newspaper every day. A beneficiary is the owner of the ABLE account who has a disability. Both “designated beneficiary” and “owner” can refer to the same person. When you compare between states to look for an ABLE account that suits you, you should remember this!

Can You Open Several ABLE Accounts?

You have the option of choosing which state you want to open an ABLE account in. However, you can only open one account. No matter which plans you decide on, you cannot open more than one ABLE account.

Is It Possible To Transfer Your Account?

Yes, it is possible to transfer your account. It’s important to note that a qualifying individual is the only person who can receive your ABLE account.

What Does “Distribution” Mean?

You probably came across the term “distribution” while you were doing your research on ABLE accounts. The money you receive from an ABLE account is referred to as a “distribution”. The money you use on qualifying disability expenses (QDE) are distributions.

What Could Happen After You Pass Away to Your ABLE Account?

When the account’s owner (a.k.a beneficiary) passes away, the money in the ABLE account can be used on QDEs such as funeral and burial expenses. However, your state will have regulations on how an account beneficiary’s passing affects the account.

Are There Different Types of ABLE Accounts?

In 2022, you can find 49 different kinds of ABLE accounts nationwide that are able to support those who are eligible!

In Conclusion

An ABLE account is a tax-deferred savings account that supports qualifying account beneficiaries. You can be eligible for an ABLE account if you meet at least one of the following requirements:

• Be eligible for Supplemental Security Income (SSI) because of a disability/blindness that began before you reached the age of 26
• Be able to receive childhood disability benefits (CDB), disability insurance benefits (DIB), or disabled widow’s/widower’s benefits (DWB) because of a disability/blindness that began before you reached the age of 26
• Have verified proof that you meet the conditions for certification of a disability before you reached the age of 26

It is important to keep in mind that each state operates differently when it comes to an ABLE account. This is why you should compare between states to find the right plan for you!

For many students, paying off student loans is a challenge. People that want to pay for a higher education can find it necessary to take out these loans. Although some people need these loans, they can result in massive debt. That is why it’s critical to understand what’s going on with student loan cancellations. In case you did not hear, President Biden announced that he will waive qualifying borrowers’ student loan debt.

Will the Government Cancel Student Loans?

The short answer is yes! However, not all of them. On August 24, 2022, President Joe Biden made an announcement saying he would forgive federal student loans for a majority of borrowers. His campaign promise to help Americans financially around the country inspired him to take this step. In addition to canceling student loans, he put in place a continuation on the pause for federal student loan payments. Thanks to the extension, the pause will last until December 31, 2022.

Furthermore, he mentioned brand-new income-driven repayment arrangements during his announcement. According to the president, the monthly payments for undergraduate loans will be capped under the new plan. This cap would be no more than 5% of the borrower’s discretionary income. Which is significant because the majority of existing plans have a 10% rate for monthly payments.

How Much In Loans Will Be Canceled?

Since loan forgiveness will not be available to every borrower, the amount of debt forgiven will differ. Borrowers who meet the requirements may get a cancellation for up to $20,000. $10,000 will be waived for borrowers who do not qualify for that amount.

Who Qualifies for Forgiveness of Student Loans?

It makes no difference whether a student is currently enrolled or no longer enrolled at school. Income level is one of the eligibility requirements. Borrowers must follow certain standards! To be eligible for student loan forgiveness, a borrower’s income must not exceed:

• $125,000 annually for single filers
• $250,000 annually for a couple filing jointly or head of household

The $10,000 in student debt relief is available to anyone who falls within these income limits. The 2020 or 2021 tax years will be used as the reference point for these income levels. The eligibility of students who were identified as dependents will be based on their parent’s income rather than their own.

On the other hand, those who meet this income limit and have obtained a Pell Grant are eligible for $20,000 in student loan relief. Given that the majority of recipients of student loans received this grant, this is a big benefit! Unfortunately, some borrowers will not be eligible for this relief including borrowers of private student loans. This assistance is only available to borrowers of federal student loans.

How to Get Your Student Loans Canceled Under This Relief Opportunity?

If students want to fill out an application for student loan forgiveness, they can find the application online at studentaid.gov. When going through the application, they will need to provide personal details like:

• Date of Birth
• Name and Social Security Number
• Email Address and Phone Number

Another part of the application is confirming that the student meets the eligibility criteria for the forgiveness. This includes meeting income requirements. Once the application is submitted, it should take between four and six weeks to process. Applications must be submitted by December 31st, 2023. That’s the deadline!

Which Loans Are Eligible for Forgiveness?

Borrowers will be eligible for student loan relief if they have at least one of the following:

• Parent Plus loans
• Graduate loans
• Undergraduate loans

How Many People Will Benefit From Student Loan Forgiveness?

About 45 million people in the USA are in some sort of debt because of student loans. However, the White House estimates that 43 million people who have student loan debt will benefit from this relief. Additionally, they anticipate that the outstanding student loan balances for up to 20 million debtors will be fully forgiven.

What is the Difference Between This Relief and the Loan Forgiveness That Canceled Billions in Student Loans?

It’s worth noting that this forgiveness is quite different from the $25 billion in student loan cancellation that President Biden announced in the past! President Biden has completely forgiven qualifying borrowers’ student loan debt. That one included:

• Borrowers who are totally and permanently disabled
• Forgiving loans for borrowers in the public service sector
• Borrower defense against school closures and loan repayment

This most recent opportunity to cancel up to $20,000 in student loan debt is different since it aims to eliminate loans for eligible federal student loan borrowers who fall under the established income cap.

What If I Do Not Qualify For Relief But Still Need Assistance With My Student Loans?

If you are struggling to make your student loan payments but are ineligible for assistance, you might feel helpless. Fortunately, there are several assistance solutions that could instead help you with your current situation, such as:

• Student Loan Consolidation
• The Teacher Loan Forgiveness Program

Student Loan Consolidation

There could be several student loans you have, which could result in several interest rates and several payment deadlines. Consolidating your student loans may be in your best interest. When you combine your student loans, you essentially take two or more of them and roll them into a single loan. The advantage of this option is that you only have to take care of one monthly payment and interest rate.

The Teacher Loan Forgiveness Program

Even if you do not qualify for any of the relief opportunities we mentioned above, you may be eligible for other assistance. The Teacher Loan Forgiveness Program is one possible solution. Federal direct loan forgiveness under this program has a limit of $17,500 in total. However, you should keep in mind that PLUS loans are not included in this.

To qualify for this forgiveness, a borrower must have taught for five complete years in a row. They would need to have worked as a teacher at a low-income educational service organization or institution. It is also necessary that the borrower has taught for at least one year after the academic year of 1997-1998.

Conclusion

On August 24, 2022, President Biden announced a new plan to deal with student loans that involved:

• Up to $20,000 in student loan debt forgiveness for eligible borrowers
• Creating an extension on the pause for payments on federal student loans
• A new, income-driven repayment strategy with a 5% cap on monthly payments of the borrower’s discretionary income

Many people who are paying off college loans will feel relieved with this support. 43 million borrowers are expected to benefit from this relief. Borrowers must submit an application to the ED to benefit from this student debt forgiveness. Within the next few months, the public will be able to access applications from the ED. Many borrowers will see any outstanding debt from their student loans vanish. Be on the lookout for that application!

The economy can be challenging for some people to understand and follow. However, knowing about the economy is valuable because it may impact how you handle your finances. A recession is one of many stages a country’s economy may go through. A recession is a period when economic activity declines for more than a few months. Generally, during a recession, you may notice the following:

• Increased unemployment rates
• Less spending by consumers
• Less production
• Other examples of decreased economic activity

How to Handle Your Finances During a Recession If You Have a Low-Income

A recession can be stressful, especially if you have low income or limited resources. This is why it is important for you to know how to get through this hard time with the help of some useful tips we prepared for you. Some of the tips include:

• Understand Your Financial Situation
• Create an Emergency Fund
• Change Your Way of Life and Make the Most of What You Have
• Look for an Additional Source of Income
• Keep Your Credit Score in Mind

Understand Your Financial Situation

Making sure you understand your financial situation is one of the most crucial tips on our list. This can help you evaluate your budget and realize what you are up against. It is a straightforward process. First, check how much money you get each month. For example, if you work 40 hours each week for four weeks at $14.25/hour, your gross income will be $2,280. After taxes are deducted, this amount will change, but you should be aware of the fundamentals to get a general understanding.

Once you have determined your income, you should go over your expenses. Making sure you are aware of what you spend money on is necessary here. You will have your regular expenses, such as rent, groceries, and a car loan. However, there can be unnecessary expenses that you make, such as going to the salon, buying makeup, eating out, and other things. This way, you can have a clear picture of your budget and where you need to concentrate your efforts.

Create an Emergency Fund

If you encounter even more difficult situations than what you are now facing, an emergency fund may provide the support you need. It might be challenging to have a reliable source of income during a recession. Having the same amount of bills to pay makes this even harder. For this reason, you need to create an emergency fund to help you financially. You should set aside a fair amount of money for saving when starting. Eventually, you should try to save up enough money for three to six months’ worth of spending. You should make sure that you have a thorough understanding of your finances.

Change Your Way of Life and Make the Most of What You Have

It is crucial to follow your spending plan when handling your finances. When the economy is down and if you have a low income, it is especially critical that you take this action. Sticking to the basics as much as you can is a good approach in such times. Let’s say that after reviewing your budget, you find out that you spend $200 each month on hair dye. Since hair dye is not an essential expense, you can go without it. You can save that money each month by cutting back on your hair treatments. Savings can be used to pay bills or to start an emergency fund.

You should also consider reducing your current spending in addition to deciding which expenses to cancel. You might be able to cut costs on your regular expenses. To help you save money every day, you should keep in mind the following tips:

• Compare insurance quotes to guarantee you are receiving the best deal on your coverage.
• When purchasing groceries, use coupons.
• Choose your gas station carefully.

Look for an Additional Source of Income

In general, looking for more money can help you a lot in this situation, especially if you have a low income. Getting a new job is one way to do that. Fortunately, many jobs offer flexible hours so you can fit them into your schedule. For instance, if you decide to walk dogs, you can do so whenever it is convenient for you. Not only is having some extra money beneficial in the short term, but it can also have many advantages in the long run. Your additional income source may help you in the future by giving you new skills, too.

Keep Your Credit Score in Mind

Your financial stability is significantly affected by your credit score. Lenders evaluate your score to assess your creditworthiness as a borrower. If you make many mistakes, it is quite easy to damage your credit score. When it comes to your credit, you should keep these five things in mind:

• History of payments
• Credit usage ratio
• Credit history
• Different types of credit
• New credit accounts

Although these five factors may affect your score, your history of payments is one of the most crucial ones. Lenders can quickly see how you handle debt repayment with your payment history. During a recession, it could be particularly challenging for someone with a low income to pay their bills. Consequently, you should do everything you can to keep your credit score in good standing. A good credit score will most likely make it easier for you to obtain housing and financing with better terms.

Bottom Line

Living during a recession can be difficult, especially if your income is low. Fortunately, it does not need to be as stressful as it may sound. If the economy is going through a recession, keep in mind the following tips:

• Understand Your Financial Situation
• Create an Emergency Fund
• Change Your Way of Life and Make the Most of What You Have
• Look for an Additional Source of Income
• Keep Your Credit Score in Mind

You just need to take the right steps! Hopefully, you’ll be surprised by how helpful these tips are for managing your financial situation during a recession.