R&B Financial Literacy Blog

U.S. Secretary of Education: Help Students! STOP spending a BILLION dollars on Student Loan Collectors.

The Department of Education is paying $1 billion dollars a year to collection agencies to collect on defaulted student loans when the reality is that almost no one should default if adequate default prevention and aversion counseling strategies were put into effect and adequately funded.

We need your support to protect student loan borrowers from collection agencies, student loan servicers and even schools that have a vested interest conflicting with the “best interest” of the students.

We are asking the U.S. Secretary of Education, Arne Duncan to allocate just $200 million of the $1 billion currently going to collection agencies, to fund a successful default aversion and prevention process both at schools and through independent non-conflicted organizations.

Independent organizations have successfully assisted student loan borrowers in preventing their loans from default by providing students with highly experienced counselors to guide them through the loan repayment process.

Unfortunately, college debt isn’t just taking a financial toll on millions of borrowers. It’s also inflicting staggering costs on the health, careers, emotional well-being and personal relationships of those burdened with big college loans.

We just created this petition: U.S. Secretary of Education, Arne Duncan: STOP spending a BILLION dollars on Student Loan collection agencies , because we care deeply about this very important issue.

I’m trying to collect 100 signatures, and we could really use your help.

To read more about what we’re trying to do and to sign this petition, click here!

It’ll just take a minute!

Once you’re done, please ask your friends to sign the petition as well. Grassroots movements succeed because people like you are willing to spread the word!

Thank You.

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Deadline near for student loan consolidation

“Special Direct Consolidation Loans”

The U.S. Department of Education’s (the Department’s) Special Direct Consolidation Loan opportunity allows certain borrowers who have at least one William D. Ford Federal Direct Loan (Direct Loan) Program loan or Department-held Federal Family Education Loan (FFEL) Program loan and at least one commercially-held FFEL Program loan to consolidate their eligible commercially-held FFEL Program loans into a Special Direct Consolidation Loan.

After a borrower’s commercially-held FFEL loans are consolidated, the new Special Direct Consolidation Loan will be serviced together with the borrower’s other Department-held loans. The servicing will be done by one federal loan servicer.

The Special Direct Consolidation Loan application period ends at 11:59 P.M. (ET) on June 30, 2012.

Through 11:59 P.M. (ET) on June 30, 2012, click here to log in using your Federal Student Aid PIN, check your eligibility, and apply.

The online application process includes these easy steps: check pre-filled information, enter employer and personal reference information, confirm that you have read important loan terms, sign, and submit.

After 11:59 P.M. (ET) on June 30, 2012, Special Direct Consolidation Loan applications will no longer be accepted.

For an overview of Special Direct Consolidation Loan information for borrowers who submit applications through 11:59 P.M. (ET) on June 30, 2012, see the questions and answers below.

Can I get a copy of the application and promissory note that I submit online?

Yes. At the end of the Special Direct Consolidation Loan online application process, you will be able to access and print a paper copy of the entire electronic record of your application and promissory note. You will also be able to return to StudentLoans.gov at any time to view your completed application (and to print a copy for your records). After signing in, simply click on My Completed MPNs under My Loan Documents.

What happens after I submit my online application for a Special Direct Consolidation Loan?

After you submit your application through the online process, you will first view a screen confirming your submission and providing the name and contact information for the Department’s servicer to which your application will be transmitted. If you include an e-mail address during the application process, you will receive an e-mail that includes the confirmation information. The Department will then transmit your application to the servicer for next steps. If you include an e-mail address during the application process, you will receive a second e-mail confirming the transmission of your application to the servicer and providing the servicer’s name and contact information.

The servicer that receives your application will contact the FFEL Program lenders or lender servicers that hold your commercially-held FFEL loans to verify the eligibility and payoff amounts of the loans that you wish to consolidate. After this verification process is complete, the FFEL lender will receive the payoff funding from the Department and your Special Direct Consolidation Loan will begin to be serviced by the Department’s servicer. Until your commercially-held FFEL loans have been paid off, you will continue to receive statements and bills from the FFEL Program lenders or lender servicers of those loans.

Will my consolidation be complete as soon as I submit my online application for a Special Direct Consolidation Loan?

No. As explained in the previous question and answer, the servicer that handles your consolidation will need to verify the eligibility and payoff amounts of the commercially-held FFEL loans that you wish to consolidate. Then, your loans will be paid off and your Special Direct Consolidation Loan will begin to be serviced by the Department’s servicer. Until your commercially-held FFEL loans have been paid off, you will continue to receive statements and bills from the FFEL Program lenders or lender servicers of those loans.

Can I make changes to my application for a Special Direct Consolidation Loan after I submit my application through the online process?

If it is necessary to make changes after you submit your Special Direct Consolidation Loan online application, you will do so through the Department’s servicer that is handling your consolidation. You will not be able to make any changes to the application through StudentLoans.gov after the application has been submitted.

The Department’s servicers for this special initiative are FedLoan Servicing (PHEAA), Great Lakes Educational Loan Services, Inc., Nelnet, and Sallie Mae. To locate contact information for the servicer handling your consolidation, refer to:

The second e-mail you receive after you complete the online application (the e-mail that lets you know your application has been transmitted to the servicer)

Other Special Direct Consolidation Loan correspondence you receive from the servicer

Can I cancel my application for a Special Direct Consolidation Loan after I submit my application through the online process?

You may cancel a pending Special Direct Consolidation Loan application up to the point when the first commercially-held FFEL loan you wish to consolidate has been paid off by the Department. However, once the first loan has been paid off, the application cannot be cancelled.

To request cancellation of a pending Special Direct Consolidation Loan application, you must communicate with the Department’s servicer that is handling your consolidation. The servicer will let you know if it is still possible for you to cancel the application.

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Paying for College: Student Loan Tips for the Newbie College Grad

Published June 7, 2012

Student Loan Tips

Graduating from college is one of those milestone moments. You leave your college bubble and pseudo adult life, only to enter “real time” adulthood. While graduation means graduation parties, graduation gifts, and no more late night study sessions or final exams, it also means a nine to five job, “real world” bills, and student debt. Graduates today are facing hard times.

With a steady and astounding unemployment rate, a competitive job market, and mounting student debt, it’s not hard to imagine new grad life being less than glamorous. While this transition is always going to be a challenge, there are several things that new or soon-to-be grads can do to prepare for real life. Use these tips to carefully manage your student loan debt and reduce some of the stress in your first year as a college graduate.

Here are 3 Student Loan Tips:

Student Loan Tip #1– Prepay Your Loan

With harsh times afoot, many individuals make efforts to lower their monthly student-loan payments from the beginning. This can be a very enticing thing to do. You can consolidate your loan or you can extend your repayment of the loan. While these options offer immediate relief, they tend to make things more challenging over time. Extending your repayment period means that you make more payments over a longer period of time. Doing this means that you end up paying more money in interest on the loans overall. Sure, a loan extension may be necessary at certain times and in specific circumstances, but, if at all possible, it is best to hold off on extending the loan period for times of emergency.

Student Loan Tip #2– Set Reachable Goals

It’s important to set goals for yourself when it comes to loan repayment. Student loans are difficult because they are dropped on you before you can even find your footing in the world of true adulthood. Sit down and set up some basic, attainable goals for yourself. Ideally, you should attempt to make the suggested monthly payment plus a little bit extra whenever is possible on your loan. But, of course, sometimes (particularly in the beginning) this just isn’t going to be possible.

Look at your finances and decide what type of goal is reachable for your repayment. Once you figure that out, stick with it. When the time comes that you think you can pay a little extra on top of your usual payments, reevaluate your goals. Even 10 dollars extra a month can make a huge difference in interest charges. Generally speaking, the repayment period for a student loan is 10 years. This is a good goal to start with, but take a look at your specific situation and see what’s best for you.

Student Loan Tip #3– Understand the Terms

Just because you are no longer a college student, doesn’t mean you are no longer going to act like a college student. This happens to the best of us. When it comes to student loans, research and studying are the last thing newbie grads want to think about.

However, understanding the terms of your loan is really important in the repayment process. Take a moment to read through things and figure out when payments are due.

Pay special attention to the “grace period” of your loan.

Lenders will give new grads a grace period where no payments are expected immediately after they have graduated. This period can vary, but is typically around six months. Be sure you know when this grace period is up. After your allotted grace time, you are expected to make payments and may be subject to penalties if you don’t make your payments on time.

Late payments can also hurt your Credit Rating.

Author Angelita Williams

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Struggling engineer gets a plan to build a better financial future

Hit hard by the economic downturn, dragged deep into debt by student loans, a single mother of four gets a financial plan to help turn things around.

By Suzanne Monson Special to The Seattle Times June 9, 2012

Having a financial planner look at her situation was “a real eye-opener” says Rena Cummings. “At first, when we started talking about my student loans, it was ‘Whoa!’ because they’re pretty high. … But there are lot of people like myself who are facing hard times.”

Would you like some free financial planning? IF YOU WOULD BE INTERESTED in a free financial makeover in exchange for having your story and photo published in The Seattle Times, answer a few questions at seattletimes.com/yourmoneysurvey.

Mechanical engineer Rena Cummings knows what it’s like to be jobless and living out of her car for a week with barely $60 in her pocket — and she vows never to go back there again.

When double-digit unemployment smacked the Florida economy 10 years ago, the single mother of four daughters was hit by the layoffs.

She was jobless for five years. As work dried up, so did her savings.

Resolute in finding a job, Cummings temporarily left her daughters with family while trekking to Seattle for a contract engineering position.

During the trip, she slept in her car for a week — and in a Seattle hostel for four — while getting back on her financial feet.

The temporary job gave her a brief financial respite, a Seattle foothold and enough money to bring her youngest three kids out to live with her.

But after two years, the Seattle contract job expired. With local openings tight, Cummings took another temporary engineering gig in Portland.

She split her time between both cities — supporting a Portland daughter studying culinary arts, and her other two daughters in school here.

When the Portland job ended a year ago, her savings evaporated again.

“My goal was to put away $1,000 a month in savings,” says Cummings, 54.

“But because I was commuting between two states, not getting overtime and paying two rents and two sets of groceries, I had to dig into my savings. I was making $4,000 a month, but $2,000 was going toward my rent. I would like to start my saving again when I am employed again,” says Cummings.

Equal parts supportive single mom, determined job-seeker, part-time online student, and frazzled family financier, Cummings is no quitter — but the Seattle woman is also whipsawed between securing a new job to pay daily bills and finding options to prepare for retirement while dealing with what feels like snowballing student loans.

Though only a portion of it is for her own studies, Cummings’ education loans top $150,000 because she assumed responsibility for her daughters’ student debts — with a 5.2 percent average interest rate.

Right now, Cummings says, her money issues are more of a “survival thing.”

It’s why she filled out an online survey to participate in a free financial makeover.

During her first meeting with certified financial planner Clara Hollin, of Kirkland-based Lincoln Financial Advisors, and a member of the Puget Sound Chapter of the Financial Planning Association, Hollin immediately pinpointed the core of her client’s challenges: a shaky employment landscape is rattling Cummings good financial intentions.

“Rena is not a crazy woman with her money,” says Hollin. “She is one of the many, many people in this country affected by the economic downturn. She’s extremely focused, smart and optimistic.

“She could be you or me. She is focused on raising herself out of poverty and raising her kids to be strong young adults,” she says.

“This is what happens to people during an economic downturn,” Hollin says. “The reality or challenge for people who have racked up student loans or credit-loan debt or are underwater in their mortgage is that they can become so overwhelmed that don’t know where to begin. … There are a lot of people out there who have been living on the edge, even while they’re working.”

So what should she do?

Right off the bat, Hollin suggested Cummings begin looking for assistance and resources available to the unemployed to take a little pressure off monthly bills.

Hollin pointed her to WashingtonConnection.org, an online clearinghouse of public and nonprofit resources — including Seattle City Light for electricity and Seattle Public Utilities for water — and benefits available to those with various income-based eligibility requirements.

With Cummings’ 21 years of service as a reservist in the National Guard, Hollin also reminded her client that she may be eligible for health insurance or other veterans’ benefits.

That prompted the Seattle woman to begin researching the new Veteran Retraining Assistance Program, part of the Veterans Opportunity to Work to Hire Heroes Act of 2011.

The joint U.S. Department of Veterans Affairs and U.S. Department of Labor program focuses on retraining 99,000 veterans for high-demand jobs.

It allows qualifying unemployed veterans between the ages of 35 and 60, and were not dishonorably discharged, to receive up to 12 months of assistance equal to the full-time GI Bill for education at about $1,473 per month.

Longer term, Hollin recommends Cummings channel the hours she spends looking for a high-paying engineering job into landing a longer-term, if slightly lesser-paying position — even if it’s outside of engineering or project management.

“Certified financial planners aren’t trained as career counselors, but we do know how to listen, listen, listen,” says Hollin.

That’s why she knows some clients with complex financial challenges often face tough employment issues.

With Cummings’ 2011 tax refund already spent, “the key right now is to get her a job” so she can begin building up a cash reserve of $15,000 to $30,000 by saving about $1,500 a month.

That would cover daily expenses — money Hollin calls “pure savings for a real emergency” — and allow her to begin making minimum monthly student loans payments of $1,384 — a debt that is deferred while she is unemployed.

Once Cummings has sufficient cash reserves, says Hollins, she should “redirect” the $1,500 in monthly savings/reserves toward her student-loan debt for a monthly $2,800 payments.

Hollin outlined some choices that might help Cummings tap into her professional skills while chiseling away at her mountain of student loans: federal service.

Several AmeriCorps programs, for example, could allow Cummings to apply her engineering and professional experience for a few years.

Many of the programs offer a living stipend that can vary widely, based on the area’s cost of living and services provided, according to Samantha Jo Warfield, spokeswoman for the Corporation for National and Community Service. A quick check shows the stipend for this area is about $1,000 after taxes.

During service, Cummings’ student loans would be deferred. After that, she might also be eligible for a Segal Education Award of about $5,550 per year of service.

These awards are only for federal government-backed loans — including Stafford, Will D. Ford, Federal Consolidated, nursing student, health education, primary care and supplement loans, according to Warfield.

“There is a lifetime cap of two education awards and only for your first two terms of service,” she adds.

If she qualifies, this could be applied to Cummings’ own loans or transferred to her daughters’ student debts.

Another option Cummings might consider:

Income-based Repayment (IBR): available for qualifying teachers, government workers or those employed at eligible nonprofit groups.

According to IBRinfo.org, an independent, nonprofit source of information about federal student-loan payment and forgiveness programs, this helps most borrowers cap payments at less than 10 percent of their income.

IBR will forgive remaining debt after 25 years of qualifying payments.

Even so, full retirement likely won’t come for Cummings until her mid-70s — news from Hollin that the Seattle woman took in stride.

“At first, when we started talking about my student loans, it was ‘Whoa!’ because they’re pretty high. It was a real eye-opener,” says Cummings. “But there are lot of people like myself who are facing hard times.

“Right now, I want to continue working with her because it’s encouraging to have some long-term goals and to set some short-term goals to see what I need to do to get back up on the horse and get through this transition.”

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Student Loans And How They Will Affect Your Credit

Andre McNeil, provided by

Thursday, May 17, 2012

When it is time to go off to college, students are usually overwhelmed with the changes, including the idea of living on their own, their path of study, and if the college experience will change them. One thing that most students don’t consider is how their student loans will affect their credit.

Most students have to take on some sort of financial aid to attend college and more than likely that will include student loans. While many are aware that they will have to repay the loans, few of them realize how their student loans will affect their finances in the long run.

You Credit Score Your credit score will play a vital role in your financial future, as it gives lenders a general idea of how financially responsible you are, how much you rely on credit and whether you make your payments. Using this and other related information, lenders decide if you are a good credit risk. This not only affects whether they will lend you money or finance your home, car or other items, but it could also determine whether you are able to get loans and financing at competitively low rates.

If you have a low credit score, you may not be eligible for loans without a co-signer that has good credit score, or the loans you receive may be at rates that are higher than what is available to people with good credit scores.

How Student Loans Affect Your Credit Student loans have the same effect that most forms of debt have on your credit. If you make timely payments, your credit score will not be adversely affected. If you miss payments and payment deadlines, it could result in your credit score being lowered.

Repayment of student loans creates a challenge for many college graduates, as the repayment amounts are usually large when compared with the entry level salaries that they receive. It is even worse for those who are unable to find jobs. Consider that the U.S. unemployment rate is a staggering 8.1% and a significant amount of the unemployed are college graduates. It also doesn’t help that college is starting to become more expensive, with the price of college tuition rising faster than the average income for families.

Ways to Manage Student Loans If it ever gets to a point where you cannot afford to make your loan repayments, you have a few options that can help to either suspend or lower repayments.

Consolidation Consolidation is combining several loans into one so that you have one repayment to make instead of multiple repayments. Usually, repayment is lower, but you may have a longer repayment period. For federal loans, the Federal Direct Student Loan Program allows you to consolidate most federal loans. In the case of private loans, you can apply for a loan and use it to pay off multiple private loans, so as to consolidate the amount and roll multiple repayments into one. Caution: Before you apply for a consolidation loan, check the interest rate to determine if your repayments will be higher, and if it would cost you more in the long run.

Deferment Deferring your student loans means that you postpone repayments until a later date, and interest does not accrue on the amount if the loan is subsidized. You are required to meet certain requirements in order to be able to defer your student loans, such as:

– You must be enrolled at least half time in an eligible postsecondary school or studying full time in a graduate fellowship program or an approved disability rehabilitation program – You must be unemployed or meet our rules for economic hardship (limited to three years) – You must be in the Armed Forces

Forbearance Similar to a deferment, forbearance allows you to temporarily stop making payments on your loan, temporarily make smaller payments or extend the time for making payments. Reasons for getting forbearance include:

– Illness – Financial hardship – Serving in a medical or dental internship or residency

With forbearance, interest continues to accrue at the rate at which the loan was made. You also are not eligible for either deferment or forbearance if you have defaulted on your student loans.

The Bottom line Effective management of your student loans can help to build your credit score, and make you attractive to lenders. If you find that you are unable to meet payment deadlines or afford repayment amounts, contact the lender immediately and discuss alternative solutions. These can help you to effectively manage your credit score and reduce the burden you would face from bills that you cannot afford to repay.

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Money Management Tips for College Students

Track your money. Once you realize how much impulse buying and other indulgences cost you, it will be easier to tell yourself “NO!”

Be frugal. Going to the movies, riding the bus, or even ordering pizza might cost less if you show your student I.D. Check travel fares for student discounts on bus and other commercial transit services as well as student discounts when you need to travel by air.

Stay financially secure by using caution.

Don’t give anyone your Social Security, credit card, or bank account numbers unless you know why they need them.
Never give a pin number to anyone!
Review credit card statements, bank statements, phone bills, etc. for unauthorized use.
Avoid scholarship scams. Real scholarships never charge fees and application information is available and free to everyone.

Keep only one or two major credit cards and use it sparingly. Set your own credit line and don’t charge more than you can comfortably repay. Just because you have a $2,000 credit line doesn’t mean you have to spend $2,000.

Make a personal budget based on your savings and income. Round up your available cash including gift money (if you’re a recent high school grad), scholarship money, student loans, summer job savings, and money from your parents. You may want to designate types of money for certain uses.
- For instance: Think of student loans as an investment in your education and your future. Use student loan funds only to pay school expenses like tuition and books.
- Use money from home for things like groceries and phone bills.
- Give yourself an allowance. Track your spending to find where your money goes and then choose between your wants and real needs.
Budget for a month at a time but set aside some time to review your finances each week.

A budget is like a money diet. Just because you bust it today, doesn’t mean you can’t start it again tomorrow. If you go over budget this week, next week commit to staying under budget.

Build an emergency fund. Save change in a piggy bank or jar. Deposit $X.XX a week from paychecks in a savings account when you cash your check.

Get a money calendar. Any calendar with big windows with room to write in amounts will do. Use the calendar windows to note:
- Due Dates for scholarship and grant applications. Keep applying for financial aid all the way through college. Missing an application deadline is the most common mistake students make when applying for scholarships.
- Upcoming school expenses (books and tuition).
- Bill payment dates.
- Upcoming activities where you’ll need cash. (Movies, dances, parties, etc.

Make bill paying easier by filing your bills by due date.

Buy books when you need them. Compare online prices with those at campus bookstores. Buy used books when you can. Check bulletin boards and school newspapers as well as used bookstores and online used booksellers.

Put your roommate in your financial planning. If you can, contact your roommate before the semester starts and decide how you’ll divide expenses.

Talk to your parents about who pays for what. Find out what you can count on from them and what you will be responsible for.

Ask for help when you need it. If you run into a financial disaster, call home and let your parents know you’re in trouble. If an unexpected event changes your home financial situation, don’t give up on school! First, talk with your financial aid office. Most colleges set aside funds to help students get through difficult situations.

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Happy 25th R&B Solutions!

On September 15, 1986, Attorneys Robinson and Brebner established a law firm that would eventually expand to become R&B Solutions, a company driven to help secondary students prevent defaulting on their student loans. R&B used their years of experience in the student loan industry to best educate both higher education institutions and their students on how to best prepare for the financial cost and responsibility of pursuing their careers and degrees, before, during, and after their first dorm room well across the graduation stage and into their first home.

Happy birthday, R&B. All the best for the next 25 years to come!

What has R&B done for you in the past 25 years?

Please take this time to post some of your thoughts and salutations for R&B’s Silver Anniversary/Birthday!

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Welcome to the R&B Solutions Financial Literacy Counseling Blog

Welcome to the R&B Solutions Financial Literacy Counseling Blog!

R&B Solutions provides outreach resources, materials, and training specifically tailored to the student loan population most likely in need of financial education services.

R&B offers college planning and preparation sessions on topics that students, parents, and caregivers can use to enhance their knowledge on budgeting, credit, student loan borrowing and other related topics.

Our goal in this blog is to continually provide the most up-to-date training materials and resources to empower individuals and enhance their awareness, knowledge and skills pertaining to financial literacy and debt management issues.

We look forward to helping each and every one of our readers transform their lives with financial security as a solid foundation.

Welcome to the R&B Solutions Financial Literacy Counseling Blog!

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