As a part of the much-hyped health care bill that President Obama signed into law three key of relief measures where given to students that will make a big impact on your personal finances while in college and immediately after college. These measures are changes in eligibility for health insurance; changes of the way student loans are administered and a change for students receiving Pell Grants.
A provision in the health care plan made changes in eligibility for health insurance. This included a provision that allows children to be covered under their parents health insurance until age 26.
Currently you are not allowed to be under your parents if you are over the age of 18, but most health insurance companies allow you to be covered if you are a full-time student (hence why most undergraduate and graduate students are still under their parents plan)
The change in age will be implemented immediately and will help graduating seniors who are in between graduation and obtaining a job.
This will also help increase the number of employers that are hiring recent college grads, since some students will opt to be under their parents plan, saving employers for paying health benefits for the first 4-5 years.
Also buried under the massive health care bill are two provisions about the way student loans are administered.
The first provision eliminates a middle man in the loan process by getting the government to directly administer loans rather than subsidize a third party to issue the loans.
Although the interest rates for student loans will be unchanged (at 6.8% for the unsubsidized Stafford loan) the rate for PLUS(parent) loans will be lowered from 8.5% to 7.9% as a result of this provision.
The second provision (titled the income provision) will affect a student that will be entering school starting in 2014.
As a part of the income provision the government caps student debt repayments, by adjusting for the income of your family and the size of your family.
This provision caps repayments to 10% of your take-home (after-tax) pay and it will forgive your debt if you do not pay after 20 years. There are also adjustments if your family is larger or smaller.
The Final provision buried in the healthcare bill is an increase in funding for Pell Grants. Students are eligible for pell grants if your family makes $50,000 a year or less. It will increase the funding base for these grants.
Students seeking more information on financial aid and student aid can check out the resources from St. John’s (http://www.stjohns.edu/services/financial) or the free website FinAid (http://www.finaid.org)
Sunday, March 28, 2010
Thursday, March 18, 2010
Analyzing Bank fees
Hello and welcome to my new blog focusing on ways a college can improve their finances currently and ways they can improve their finances after graduation. This week I am going to focus on watching fees ranging from overdraft fees to atm fees that banks charge which most of the time are fairly easy to avoid.
First I am going to look at overdraft charges on Debit cards. Most banks allow (as of today) for customers to overdraw on their account charging a substantial fee.
For example, Bank of America will charge a $35 overdraft fee if you overdraw your account over $10 at the end of the business day (as a courtesy BofA does not charge the overdraft fee for ammounts under $10). Bank of America does give you a one time pass, called "stuff happens", on the overdraft fee. Also for every 5 consecutive days that your account is overdrawn BofA charges a $35 fee (on top of the inital fee). Overdrawing on your BofA account can be avoided by using their free overdraft protection that will tap a credit card if you overdraw, avoiding any fees.
As harsh as BofA sounds, it is not as bad as the competition. JPMorgan Chase for example charges what seems to be a low $25 overdraft fee, but it is applied if you even go $0.01 over, unlike the $10 buffer BofA gives you. After you overdraw once the fee goes up to $32, and after five times it goes right up to $35. In addition JPMorgan Chase allows you to tap a credit card for overdraft protection, but they charge a $10 fee for this service (compared to no fee for BofA) and JPMorgan Chase does not give you a "stuff happens" pass like BofA. Overall the $10 buffer zone that BofA offers and the "stuff happens" pass leads me to favor BofA over JPMorgan Chase based on overdraft fees.
Looking at ATM fees its important to realize that their are almost always multiple fees when you use an ATM other than your bank's. For exapmle if you walk into mcdonalds, odds are they have one of the 99 cent Select-A-Branch ATM's, the 99 cent promotion is somewhat true, but mostly false. When you withdraw $20 from a Select-A-Branch ATM, Select-A-Branch goes and withdraws $21 (in this case) from your bank account for the $20 + $1 fee. However Bank of America sees that you used an ATM other than their own and they charge a $2 fee ($5 if international), so you are in effect paying a $3 fee in this case.
Now if you are banking with JPMorgan Chase they charge a $2 fee just like BofA. So in the category of ATM fees, BofA and Chase are a tie in my book since both of them have the same fees.
Ways of getting around some of these fees (espescially the ATM fee) is downloading (if you have a blackberry or iphone)the respective smart phone apps that the banks put out. These apps allow you to click and see exactley where in the area the bank's ATM's are (and for BofA no need to enter an address, since it uses your phone's gps).
Overall be cognescent of you banks fees, considering they are 99% of the time easy to avoid and can save you a good deal of money over the long term.
First I am going to look at overdraft charges on Debit cards. Most banks allow (as of today) for customers to overdraw on their account charging a substantial fee.
For example, Bank of America will charge a $35 overdraft fee if you overdraw your account over $10 at the end of the business day (as a courtesy BofA does not charge the overdraft fee for ammounts under $10). Bank of America does give you a one time pass, called "stuff happens", on the overdraft fee. Also for every 5 consecutive days that your account is overdrawn BofA charges a $35 fee (on top of the inital fee). Overdrawing on your BofA account can be avoided by using their free overdraft protection that will tap a credit card if you overdraw, avoiding any fees.
As harsh as BofA sounds, it is not as bad as the competition. JPMorgan Chase for example charges what seems to be a low $25 overdraft fee, but it is applied if you even go $0.01 over, unlike the $10 buffer BofA gives you. After you overdraw once the fee goes up to $32, and after five times it goes right up to $35. In addition JPMorgan Chase allows you to tap a credit card for overdraft protection, but they charge a $10 fee for this service (compared to no fee for BofA) and JPMorgan Chase does not give you a "stuff happens" pass like BofA. Overall the $10 buffer zone that BofA offers and the "stuff happens" pass leads me to favor BofA over JPMorgan Chase based on overdraft fees.
Looking at ATM fees its important to realize that their are almost always multiple fees when you use an ATM other than your bank's. For exapmle if you walk into mcdonalds, odds are they have one of the 99 cent Select-A-Branch ATM's, the 99 cent promotion is somewhat true, but mostly false. When you withdraw $20 from a Select-A-Branch ATM, Select-A-Branch goes and withdraws $21 (in this case) from your bank account for the $20 + $1 fee. However Bank of America sees that you used an ATM other than their own and they charge a $2 fee ($5 if international), so you are in effect paying a $3 fee in this case.
Now if you are banking with JPMorgan Chase they charge a $2 fee just like BofA. So in the category of ATM fees, BofA and Chase are a tie in my book since both of them have the same fees.
Ways of getting around some of these fees (espescially the ATM fee) is downloading (if you have a blackberry or iphone)the respective smart phone apps that the banks put out. These apps allow you to click and see exactley where in the area the bank's ATM's are (and for BofA no need to enter an address, since it uses your phone's gps).
Overall be cognescent of you banks fees, considering they are 99% of the time easy to avoid and can save you a good deal of money over the long term.
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