Bankruptcy and Student Loans

If you're having serious trouble paying back your student loan debt, bankruptcy is not a likely alternative for you. Student loans are usually not eligible for discharge from bankruptcy.

If you're having trouble making any of your payments, the first step is always to contact your lender, be honest and try to work toward a realistic payment plan. The lender would much rather be paid over a longer period of time then for you to default on repayment of your debt.

If your student loans are the largest part of your debt, you are better off to contact your student loan lenders and see if you can arrange an easier repayment plan or deferment of payments, over bankruptcy.

Bankruptcy filings stay on your credit report for 10 years and will likely limit your ability to get a mortgage, borrow money, or get a job. 

Student Loan Default Rate Increases

Is the education worth the debt?  Is it worth going an extra year so you can work while going to college and not take on debt? First, a college education is worth the cost, but you have to look at the potential ROI (Return on Investment).  Different careers pay varying wages. With higher earnings, you are able to pay back a larger student loan debt with fewer sacrifices. 

The U.S. Bureau of Labor Statistics (BLS) publishes an OccupationalOutlook that lists occupations, the education required, and the potential salary range.  According to the BLS, the high your education, the more money you will make and the less chance you will be unemployed.  Choose your education, career and debt load carefully.

The cost of an extra year of college could be more costly than taking out a loan and finishing on time. To calculate this cost, add together the cost of tuition and books for one additional year of college plus your potential future salary, and then subtract your current salary.  If tuition and books cost $30,000 and your future salary is $35,000 upon graduating, and you are making $15,000 now, that extra year cost you $50,000 ($30,000 + $35,000 - $15,000).  Can you better afford the fifth year of $50,000 or take out a loan to get done in four years?

Choose your institution carefully.  You may think that private 4-year colleges and universities are the most expensive but if you calculate the true cost (tuition, room and board minus any grants and scholarships) it might be close to the cost of a state school.  If adding in the cost of getting done in four years compared to five or six, and placement rates for their graduates, it may be less expensive to attend a private college or university.

You can also receive credits from your local community college and usually transfer the credit to a 4-year college or university.  If considering this option, talk to the college or university you are planning to transfer to make sure all of your community college credits count towards graduation.

Using the Federal data for the 2009 cohort, the highest default rate for colleges and universities offering baccalaureate or above degrees is for for-profit schools with a 15.4% default rate, followed by public colleges or universities at 5.2% and then private colleges and universities at 4.5%. Student loan defaults do not go away on your credit report.

Being a federal loan, the government has more power to garnish wages (up to 25% of your wages), keep your federal and state income tax refunds, take your future lottery winnings, and garnish part of your social security.  Student loans are rarely discharged in bankruptcy.  So once you borrow the money, you will have to pay it back! 

If you are having trouble making your student loan payments, check out www.studentloans.gov for information on deferment of payments. You can also check out a Wall Street Journal video for more information on student loan defaults.

Goals and Lotteries

We know it is better to save our money than to buy a lottery ticket. The odds of winning the Powerball are 1:195,249,054. Yet, when the payout climbs above a $100 million, we start to dream of what we would do with a winning jackpot.

Lotteries give us an excuse to dream of what we would do if we had an abundance of funds at our finger tips. What would you do? What would you buy? Where would you travel? These dreams provide motivation to set goals and to work to achieve these goals. It also helps you to get in touch with your values and to ask the question of what your really want out of life.

We know that we probably will not win the Lottery jackpot, but we have big dreams and goals to achieve. An entrepreneurship professor once said "if you are going to dream, dream big." and "be careful of what you dream for, it just might come true." So go ahead and dream of winning the lottery and what you would do with all the winnings. Then set goals based on your values and work to achieve your dreams.

Freezing Sweet Corn is Sweet Work!

This week a wind storm blew down three rows of our neighbor’s sweet corn. Luckily, the corn was ready to be picked. Now to be perfectly honest, picking sweet corn is hot work, especially in Iowa when the temps are in the 90’s and the humidity is in the 70’s. But here is what we have found to make the harvest enjoyable:

 Do it with friends: Many hands make light work – as well as good conversation while doing the work.

 Share a meal: We picked the corn at the farm, and then had a nice meal with FRESH (picked off the stalk less than an hour before eating) corn, with a home raised chicken, warm bread, great cheese and wine. And oh yes, a good desert before we started the shucking, cleaning, blanching, cooling, cutting and bagging of the corn.

 Divide and conquer: It is just the way it works, but while the guys are shucking, the girls are cleaning, blanching and cooling the corn. By the time the guys get done shucking, it is time to start cutting the corn off the cob. When is it all cut, we bag it up for the freezer, teaming together, getting it done.

 Share the profits: Now we didn’t make money by freezing corn, but we all saved money by having corn in our freezer to eat later. We shared what we harvested with those that helped and with our family and friend.

 Make it festive: Making an evening event around the activity, such as sharing a meal and drink, adds to the camaraderie. Productive activity with others makes the “work” fun and leaves you feeling well and good.

Where to Invest in Turbulent Times

The Dow Jones industrials dropped 634 points Monday. Gold is at a record high. Farm land prices are high. There is uncertainty in the housing markets, stock markets, bond markets, international government debt, and the world-wide economy. The big question--where to invest? When the markets are so volatile, let it ride out and instead turn to make investments in what you can control: your time.

Now is the time to invest in yourself and time with your family and friends. It is time to reassess your skills, abilities, and how you spend your time. It is time to become more self-sufficient. Some ideas of self-investing in turbulent times:

• Grow a garden or visit farmer markets; can or freeze fresh vegetables for the winter months. Nothing tastes better than corn chowder or lasagna on a winter day made with fresh frozen sweet corn or tomatoes that you grew.

• Cut firewood. If you have a wood burning fireplace or wood stove, cut and stock up on wood for the winter. This can be a family event and as they say, the wood will heat you when you cut it, split it, stack it, and finally burn it! This can also cut down on your winter heating bills and provide hours of family time watching the fire burn.

• Take a class to improve your skills or learn a trade. The more you know the further you will go. Maybe you want to learn about auto repairs, plumbing or other trade. This can help you save money by doing your own repairs. Perhaps you need to improve your computer skills, cooking skills, or writing skills, take a class at your local college or community center. This can make you more marketable and you may unleash one of your passions.

• Invest in your family and relationships. Nothing has a higher return and lasting benefit than great relationships. Invite family or friends to join you on the above adventures. Turn off the television, computer, and phones and have a night of playing cards or board games. Join or start a book club. Engage in conversation, really get to know other people, and build lasting relationships.

The markets will go up and down. Money will come and go. Your true happiness will be determined by the friends and relationship you have and the difference you make in the lives of those around you. So in these turbulent times, invest in you, your community, and in family and friends.

A Berry Good Day

There is nothing better than picking fresh berries for breakfast or clipping fresh spinach and lettuce in the evening for dinner. They are plump full of vitamins and you burn calories in harvesting your bounty. Growing fruits and vegetables in your yard, on your patio or on a window ledge is good for the environment, good for your health and good for your pocket book. Challenge yourself to eat local and in season. Try adding one fruit or vegetable to every flowerbed. A cucumber trellis is great fun for the patio. Love sweet potatoes vines climbing on the fence. Each hill can stay stored in the ground into the fall - harvesting it when you are ready to indulge. It’s not too late to plan the summer’s second season plantings or purchase the fruit trees on sale for next year’s harvest

A great blog to check out is Eden Makers Blog. Likewise, a nice book on edible estates is Edible Estates: Attack on the Front Lawn.

For your video viewing pleasure: 

Bon Appetite!

Saving $$$ on Gas

Summer is officially here and you feel the itch to hit the road and explore. What a relief to see gas prices take a dip at the height of summer vacation time! Other effective ways to save at the pump:

• Check online sites like gaspricewatch.com, gasprices.mapquest.com or gasbuddy.com for the most competitive prices.
• Watch your tire pressure. Underinflated tires of just 3 PSI (pounds per square inch) can degrade your miles per gallon by 1%.
• Keep your car engine will maintained. A properly maintained vehicle will run more efficiently and give you better mileage, which saves you money in gas.
• Get rid of unnecessary weight in your car. The heavier the vehicle, the more energy it takes to move it on the road.
• Park in the shade. Gasoline evaporates out of your tank and it does so faster when parked directly in the sun - winter or summer.
• Drive conservatively and at a steady speed. The greater your speed, the less miles per gallon you will average. Better yet, bike it. :)