15 Jobs That Qualify for Student Loan Repayment & Forgiveness Programs

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Student loan debt can be overwhelming. Yet it’s become an unavoidable reality for many college graduates. According to a 2018 report from the Institute for College Access & Success, two-thirds of students borrow money for college. 

The average amount borrowed, according to 2019 statistics from Nitro College, is more than $37,000. And many professions require taking on graduate school debt that tops six figures.

That’s a huge burden on new graduates just starting out in their careers. Fortunately, there are a variety of programs to help with repayment, including forgiveness, cancellation, and loan repayment programs (LRPs) specific to your chosen career. 

Career-specific programs can help reduce or even eliminate student debt in exchange for your years of service and expertise.

There are over 100 federal and state-based programs that offer student loan forgiveness, cancellation, or repayment assistance related to your profession. But while millions of borrowers could qualify for these programs, only a small fraction take advantage of them. 

For example, about 35 million Americans are employed in the public sector and could have their student loans forgiven through the federal Public Service Loan Forgiveness (PSLF) program. Yet less than one million have applied as of a 2017 estimate from the Consumer Financial Protection Bureau.

That could be because many graduates aren’t even aware these LRPs and forgiveness programs exist. So, to help you get started on paying off your student loans as quickly as possible, we’ve put together a list of programs available for certain career fields. 

If you decide to apply for any of them, make sure you understand all the eligibility factors and program requirements.

Careers That Offer Student Loan Repayment or Forgiveness

Both the federal government and private organizations offer job-specific forgiveness and repayment programs. 

Generally, federal programs are available to professionals working in public-sector or high-need areas. These jobs often aren’t the best-paying or most desirable, so these programs are an incentive to attract highly qualified workers to jobs that might otherwise go unfilled. Hopefully, what you sacrifice in income will be made up by debt repayment or forgiveness.

Here’s a list of career paths that offer student loan forgiveness or repayment.

1. Public Service Employee

Nurses Doctors Coordinate Hands Team Hospital

Anyone who works in a qualifying organization, such as a government agency or nonprofit, can get loan forgiveness through the PSLF program. It was designed to encourage people to work in the public sector and covers the most careers of all job-specific forgiveness and repayment programs.

PSLF is available to any worker in a government organization — federal, state, or local — as well as nonprofit organizations. Just a few of the job types that could qualify include public teaching, military service, social work, public safety, law enforcement, public health services, public library services, and public interest law.

To qualify for PSLF, you must make a total of 120 payments while working for a qualifying nonprofit or government agency. These payments don’t need to be consecutive, but it does mean you need to work in a qualifying job for an overall total of 10 years. 

After making the required number of payments, any remaining loan balance will be forgiven. Unlike regular forgiveness with income-driven repayment, you won’t have to pay taxes on the remaining balance.


2. Federal Agency Employee

Federal Agent Nyc Secret Service

In addition to PSLF, federal employees also have access to a lesser-known LRP: the Federal Student Loan Repayment Program. To attract and retain highly qualified employees, federal agencies are allowed to offer job candidates this special job perk. 

In exchange for a commitment to work at the agency for a minimum of three years, federal agencies can pay up to $10,000 per year toward a new hire’s federal student loans. The total assistance given cannot exceed $60,000.

Depending on how much you owe, this program has a slight advantage over PSLF. If you owe $60,000 or less, you could have your entire balance wiped clean without making any payments toward your loans or needing to wait 10 years for forgiveness of the balance. 

You also won’t have to stay at the job for 10 years. Instead, you could have your balance paid off in as few as three years or as many as six.

However, the program isn’t without its caveats. For one, if you leave your job before your three years are up or are fired for misconduct or poor performance, you’ll have to pay back any money the agency paid toward your loans. 

And regardless of whether you complete the term or not, you’ll have to pay income tax on the amount paid toward your loans. 

Additionally, not all government jobs offer this perk or the same repayment amounts. 

Only federal loans are eligible for the program, but all types of federal loans are covered, including FFEL Loans, Direct Loans, and PLUS Loans.

If you’re a parent who borrowed a Parent PLUS loan to help cover college tuition for your child, you can qualify for this program. Very few options are available to help Parent PLUS borrowers manage payments. 

And, unlike with some forgiveness and repayment programs, you don’t need to have finished your degree to qualify.

However, many agencies require a degree and sometimes specific degrees. They all tailor their plans to recruit highly qualified candidates to hard-to-fill positions.

There’s no formal application for this program. Instead, you’ll need to ask your potential or current employer if student loan repayment is a benefit offered through that federal agency. 

If you ask, your employer will at least consider your request. But whether it’s given to you is decided on a case-by-case basis.

More than 35 federal agencies offer this perk, including all 15 cabinet-level departments and over 20 independent agencies. If you’re interviewing for or a federal agency that doesn’t, ask them if they’ll consider providing this benefit if you accept the position. All federal agencies are eligible to offer it.


3. Teacher

Portrait Teacher In Classroom With Students

Teaching generally requires an extensive amount of higher education. That could range from a bachelor’s degree to a Ph.D., depending on the position. Yet even those who teach at the college level often aren’t paid enough to account for the high cost of their education. 

As a college-level English teacher, I know this struggle firsthand. I borrowed well into the six figures to finance my Ph.D. (a requirement for teaching college), yet my starting teaching income was a meager $25,000.

Average teacher salaries are just over $30,000 for preschool teachers, $60,000 for elementary and middle school teachers, $62,000 for high school teachers, and $80,000 for postsecondary teachers. 

It’s easy to borrow more than the average annual teacher salary for only a bachelor’s degree, but many teachers are required to get masters and doctorate degrees. Fortunately, there are a few programs that can help them repay their loans.

Public Service Loan Forgiveness (PSLF)

Most teachers — as long as they work full-time for a public or nonprofit school or college — qualify for PSLF. The program is a major boon for teachers who struggle with low pay while attempting to pay off high student loan debt.

Although the program hasn’t functioned optimally in the past, in October 2021, the Department of Education announced a huge and ongoing overhaul of PSLF that should make the program easier for borrowers to get forgiveness now and in the future.

Teacher Loan Forgiveness Program

If you teach in a low-income school district or work in a teacher shortage area, you qualify for the Teacher Loan Forgiveness Program. You could receive anywhere from $5,000 to $17,500 depending on the subject you teach and your years of service. Only math, science, and special education teachers are eligible to receive the higher amount of $17,500.

To qualify, you must work full-time for at least five consecutive academic years at a school that serves low-income students. To find out if your school qualifies, search the directory at Federal Student Aid.

You must also be a “highly qualified teacher.” That includes having a bachelor’s degree and state certification as a teacher and passing state tests that prove subject matter knowledge.

Only federal Direct and FFEL loans qualify. You cannot have Federal Perkins or Federal PLUS loans — either Parent PLUS or Graduate PLUS — forgiven under this program.

It’s possible to qualify for both Teacher Loan Forgiveness and PSLF, but any years of service that count toward Teacher Loan Forgiveness can’t be counted toward PSLF. So you need to crunch the numbers to see which is of greater benefit to your situation. 

Also, if you’re an AmeriCorp volunteer (see No. 14 below) any period of time you spend working toward their repayment benefit isn’t counted toward the years required for Teacher Loan Forgiveness.

Perkins Loan Cancellation

Although your Federal Perkins Loans aren’t eligible for Teacher Loan Forgiveness, they may be eligible for cancellation under the Perkins Loan Teacher Cancellation Program. To qualify, you must teach at a low-income school, in a subject area deemed by your state to have a shortage, or as a special education teacher.

Perkins Loans cancellation is gradual. For your first and second years of teaching, you get a cancellation of 15% of your loan for each year of teaching, including any accrued interest. For the third and fourth years, it’s 20% for each year. And for the fifth year, it’s 30%. That adds up to a total of 100% cancellation if you continue teaching at a qualified school for five years.

Note that the Federal Perkins Loans program ended in 2017. It’s no longer possible to get this loan, but if you already have Perkins loans and you’re a teacher, this is one way to unload them.

State and City-Based Programs

Additionally, there are state and city-specific loan forgiveness programs available to teachers. To discover what’s available in your area, search the AFT directory.


4. Doctor/Physician

Doctor Smiling Arms Crossed Office

Although most doctors can expect to make well into the six figures, paying for the education to get there can take a significant chunk out of even a large paycheck. 

According to the Association of American Medical Colleges (AAMC), the median medical school debt for 2016 graduates was $190,000. On a standard 10-year repayment plan, that’s a monthly student loan bill of over $2,200. 

Fortunately, doctors in need of debt relief have options, including PSLF for those who work in public health.

National Health Service Corps (NHSC) Loan Repayment Programs

For those interested in working in shortage areas, the NHSC offers a number of LRPs for health care professionals.

  • NHSC Loan Repayment Program. The NHSC offers student loan repayment assistance of up to $50,000 to physicians and other health care professionals through their Loan Repayment Program. In exchange, doctors must work full-time in an NHSC-approved shortage area for two years. The payments are tax-free and disburse immediately on starting work. Even better, after the initial two-year service agreement, participants can renew their contracts annually to receive continued repayment assistance. The length and amount of assistance depend on the area of service. Higher-need areas qualify for larger loan repayments.
  • NHSC Rural Community Loan Repayment Program. In exchange for providing substance use or opioid treatment, health care providers can receive up to $100,000 in student loan repayment assistance through the NHSC Rural Community LRP. Participants must work at a rural NHSC-approved substance use disorder treatment facility for three years. Priority is given to sites that have received Rural Communities Opioid Response Program funding.
  • NHSC Students to Service Program. For medical students completing their last year of school, the NHSC offers a Students to Service Program. In exchange for a commitment to provide primary health care at an NHSC-approved site for three years after graduation, the NHSC provides up to $120,000 toward both educational costs and student loans.
  • NHSC Substance Use Disorder Workforce Loan Repayment Program. In exchange for working three years in substance use disorder treatment at an NHSC-approved site, the Substance Use Disorder Workforce Loan Repayment Program pays up to $75,000 toward student loans. You get priority if you have a DATA 2000 waiver, serve in an opioid treatment program, or have a license or certification in substance use disorder interventions.

National Institutes of Health (NIH) Loan Repayment Program

The National Institutes of Health (NIH) offers repayment assistance of $50,000 annually to health care professionals in exchange for performing medical research funded by a U.S. nonprofit. 

Like other repayment assistance programs, the NIH LRP was created to attract top talent to an underserved field — in this case, biomedical or behavioral research.

Through eight different programs, health researchers receive repayment assistance while either employed with the NIH or eligible organizations outside the NIH. The programs are organized around broad research areas but aren’t intended to fund individual research projects. Rather, the intention is to support applicants in building a career in medical research.

Indian Health Services (IHS) Loan Repayment Program

The Indian Health Service (IHS) is a federal program for American Indians and Alaska Natives. In exchange for a two-year commitment to work in a health facility serving indigenous Americans, the IHS Loan Repayment Program repays up to $40,000 in student loans for health care professionals. 

After the initial two years, participants can renew their contracts annually to receive additional benefits until their full debt is repaid.

Military Student Loan Repayment Assistance

The military offers a number of scholarships and repayment assistance programs to health care professionals. Although there may be some differences in maximum payout amounts, whether you join the Army, Navy, or the Force, all three branches of the military offer similar scholarship and repayment programs for health care professionals.

  • The Health Professions Scholarship Program. Qualified medical, dental, nursing, and veterinary students can have their full tuition and expenses paid by a branch of the military, plus receive a monthly stipend of $2,200 or more. Students are also eligible for a $20,000 sign-on bonus. Students “repay” the scholarship by serving in the military for one year per year of scholarship.
  • Financial Assistance Program. This LRP grants up to $45,000 per year in repayment assistance, as well as a monthly stipend of $2,000 or moreq to military members enrolled in an accredited residency. Once you complete your residency, you must complete a year of service for each year you received assistance, plus one additional year.
  • Health Professions Loan Repayment Program. Qualified participants receive up to $40,000 per year paid directly toward their student loans, minus federal income taxes.

U.S. Department of Veteran Affairs (VA)

In addition to branches of the military, the VA, which provides medical care to veterans among other services, provides repayment assistance programs.

  • Education Debt Reduction Program. Through the VA’s Education Debt Reduction Program (EDRP), doctors and other health care professionals who work for the VA receive up to $200,000 in repayment assistance. Payments are made over a five-year period, up to a maximum of $40,000 per year. The VA uses the EDRP program as a recruitment incentive to fill positions in difficult-to-recruit specialties.
  • Student Loan Repayment Program. The VA is one of the government agencies qualified to offer repayment assistance as a recruitment bonus. As federal agency employees, VA doctors are eligible for up to $10,000 per year in repayment assistance, up to a maximum of $60,000 through the VA’s Student Loan Repayment Program.

Health Resources and Services Administration (HRSA) Faculty Loan Repayment Program

For health professionals who serve at least two years as a faculty member at a health professions school, HRSA’s Faculty Loan Repayment Program offers up to $40,000 in student loan repayment assistance. To qualify, you must come from a disadvantaged background.

State-Based Programs

A number of states offer LRPs for physicians. Many of these are through the NHSC’s State Loan Repayment Program. These programs provide incentives for doctors to practice in shortage areas.

Additionally, some states have their own loan repayment assistance plans (LRAPs) for doctors. Similar to the NHSC programs, these typically offer student loan repayment or other special pay incentives for doctors who commit to working in high-need areas. 

For a list of state programs, visit the database maintained by the AAMC.


5. Nurse

Group Of Nurses At Hospital

A nurse’s income can approach or even exceed six figures, depending on the type of nursing. The highest-paying jobs require graduate degrees. 

And according to a 2017 report from the American Association of Colleges of Nursing, more than two-thirds of nursing students borrow anywhere from $40,000 to $150,000 to get these degrees. That’s a serious bite out of even a six-figure paycheck.

Many of the programs for doctors and physicians are also available to those in nursing. 

These include:

  • PSLF (if you work in public health)
  • The NHSC programs, except for Students to Service
  • The NIH LRP
  • The IHS LRP
  • Military scholarships and LRPs
  • VA LRPs
  • The HRSA Faculty LRP

Additionally, there are a couple of other nurse-specific programs to help nurses pay off their debt as quickly as possible.

Nurse Corp Loan Repayment Program

The Nurse Corps Loan Repayment Program repays up to 85% of the student debt acquired to get a nursing degree. In exchange for a two-year commitment to work in a nursing shortage area or as nursing faculty at an eligible school, participants can have 60% of their debt repaid. 

At the end of the initial two years, they can apply for a third year and receive another 25% of debt repayment assistance. 

Note that this assistance is not tax-exempt, so any assistance you receive is reduced by the amount of income tax you’ll need to pay.

Perkins Loan Cancellation

If you’re a nurse and have any Federal Perkins Loans, you can get up to 100% of them canceled. To qualify, you must be a registered nurse and work full-time. 

You also have to apply to the program, either through the school you borrowed from or your student loan servicer; enrollment isn’t automatic. 

As long as you qualify, your Perkins Loans are gradually discharged over a period of five years.

State-Based Programs

Most states offer loan forgiveness and repayment programs for nurses in exchange for working in a shortage area. You must be licensed to practice in a state to qualify for its loan repayment programs. 

There’s no centralized database specifically for nursing, so search your state to see if any programs are offered in your area. 

The database maintained by the AAMC is a good place to start.


6. Dentist

Boy Getting His Teeth Cleaned Dentist Chair Office

Believe it or not, dentists often find themselves in far worse student debt than physicians. According to the American Student Dental Association, the average debt load for 2018 dental graduates was a monumental $285,184. 

Like physicians, dentists can make well into the six figures, but it’s not nearly enough to make repaying loans of that size easy.

As with other professions, PSLF is an option if you work for a nonprofit or public service agency. Additionally, many of the same programs available to physicians are also available to dentists. 

These include:

  • Military scholarships and LRPs
  • VA LRPs
  • The IHS LRP
  • All of the NHSC programs, including Students to Service
  • The HRSA Faculty LRP

State-Based Programs

Many states have their own programs designed to encourage dentists to work in high-need areas. 

For a full list of state-specific student loan repayment assistance for dentists, visit the database maintained by the American Dental Education Association.


7. Pharmacist

Pharmacist Giving Medicine To Customer Pharmacy

As with many other health care professions, pharmacists have the potential to earn six-figure salaries. But getting there often requires taking on six-figure debt. 

According to the American Association of Colleges of Pharmacy, 2018 pharmacy graduates borrowed an average of $166,528 to get their degrees. 

Fortunately, assistance is available for pharmacists.

Anyone who works full-time for a public agency or nonprofit qualifies for PSLF, including pharmacists. Pharmacists also have access to some of the same programs as other health professionals. 

These include:

  • Military scholarships and LRPs
  • VA LRPs
  • The IHS LRP
  • The NHSC programs, except for Students to Service

State-Based Programs

Many states have programs to repay a portion or all of a pharmacist’s student loans if they work in a shortage area for a certain period of time. 

Although there’s no database maintained specifically for pharmacists, a search of the database at the AAMC is a good place to start.


8. Physical Therapist

Physical Therapist Rehabilitation Physiotherapy

A career as a physical therapist requires a doctoral degree (a DPT). Physical therapists can earn, on average, $88,000 per year, yet the amount of money required to finance a doctorate degree often far exceeds this amount. 

According to a 2017 survey conducted by The American Physical Therapy Association, the average DPT graduate borrows $96,000 to finance their education.

Some of the same programs available to other health care professionals are also available to physical therapists. 

These include:

  • PSLF
  • VA LRPs
  • The IHS LRP
  • The HRSA Faculty LRP
  • The NIH LRP

Additionally, many hospitals and private health care facilities use loan forgiveness as a recruitment incentive for physical therapists. 

To find out where these are available, ask during your hiring interview or contact the American Physical Therapy Association.


9. Psychologist, Psychiatrist, Therapist, or Social Worker

Child Psychologist Emotion Emoticons

The vast majority (91%) of psychologists with doctor of psychology degrees (Psy.D.) graduate with student loan debt in excess of $200,000, and 77% of those with doctor of philosophy degrees (Ph.D.) borrow more than $75,000, according to a 2014 study by the American Psychological Association.

Debt-relief programs available to psychologists and other mental health workers include:

  • PSLF
  • The NIH LRP
  • The IHS LRP
  • The HRSA Faculty LRP

The NHSC Programs, except Students to Service, are open to those with a variety of different psychology and social work degrees. And Health Professionals Loan Repayment is available for military clinical psychologists.

State-Based Programs

Many states offer repayment assistance to those who work in mental and behavioral health, as long as they’re willing to work in underserved areas. 

Although no database exists specifically for state-based mental health repayment programs, start with an online search to see if your state offers anything for graduates with your degree.


10. Veterinarian

Veterinarian Cat Stethoscope Doctor Vet Clinic

Getting a degree in veterinary medicine can cost nearly as much as one in human medicine. According to the American Veterinary Medical Association (AVMA), 2016 veterinary medicine graduates borrowed an average of $143,758 to finance their education. 

But while the average vet salary comes close to six figures, they aren’t paid nearly as well as the average physician. Fortunately, there are a variety of LRPs and forgiveness programs for veterinarians.

Even though vets work on animals and not humans, they are still health professionals. Thus, a few of the same programs available to other health care workers are available to them. 

These include:

  • PSLF
  • Military scholarships and LRPs
  • The HRSA Faculty LRP

Additionally, there are a few vet-specific assistance programs.

USDA Veterinary Medicine Loan Repayment Program

The U.S. Department of Agriculture (USDA) offers a repayment assistance program for veterinarians. 

The Veterinary Medicine Loan Repayment Program pays up to $75,000 toward your student loans, dispersed in amounts of $25,000 per year over the course of your service. In exchange, you must work as a vet for three years in a region designated by the National Institute of Food and Agriculture (NIFA) as a shortage area. 

One of the great benefits of this program is that, unlike many other LRPs, you can use this money toward private as well as federal student loan debt.

Not everyone with veterinary debt is accepted into this program. NIFA only grants awards to a limited number of applicants. Also, the primary focus of the program is on veterinary medicine for livestock raised for food.

State-Based Programs

Many states offer repayment assistance to veterinarians who are willing to work in underserved areas. 

Although no database exists specifically for state-based veterinary medicine repayment programs, it’s worth it to do an online search to see if your state offers anything for veterinary graduates.


11. Lawyer

African American Woman Lawyer In Front Of Supreme Court

As many law graduates are aware, no one ever expects law school to be cheap. In fact, according to 2021 statistics from Nitro College, law school debt, at an average of $140,616, rivals that of medical school. 

Worse, the average salary of an attorney is about half that of an M.D., which makes paying it off that much harder.

Fortunately, there’s a wide variety of student debt repayment assistance and forgiveness programs for lawyers, including PSLF for those who work in public law or for a nonprofit.

School-Based Programs

Dozens of law schools, including Harvard, Yale, Stanford, and NYU, offer loan repayment assistance programs. 

Programs generally require you to have full-time employment at a public service law firm and have an adjusted gross income of less than $60,000, although programs vary from school to school.

The amount of student debt law schools repay varies widely. 

For example, the University of Notre Dame Law School repays up to $15,000 annually for 10 years to lawyers working in public law who make less than $70,000. 

The University of Virginia covers 100% of student debt for lawyers who make less than $65,000 per year, and a portion of the debt for those who earn between $65,000 and $85,000. 

Although you need to speak with your school directly for the most up-to-date information, Equal Justice Works has a comprehensive booklet on repaying law school loans that includes a list of schools offering repayment assistance.

U.S. Department of Justice (DOJ) Attorney Student Loan Repayment Program

As a participant in the federal employee LRP, every spring, the DOJ opens its Attorney Student Loan Repayment Program to attract top talent. 

As with other federal agency employees, in exchange for a three-year commitment, lawyers at the DOJ can receive up to $60,000 in repayment assistance, paid in $10,000 annual increments.

John R. Justice Student Loan Repayment Program

The John R. Justice Student Loan Repayment Program provides repayment assistance to qualifying public defenders and prosecutors who agree to work in public law for a minimum of three years. 

Amounts vary depending on where you live. Assistance is payable in increments of up to $10,000 per year and cannot exceed a maximum of $60,000.

Applicants to this program must apply through their state and follow the procedures of their state-designated agency.

Herbert S. Garten Loan Repayment Assistance Program

The Herbert S. Garten LRP repays law school loans up to $5,600 per year for three years. 

Attorneys must work at a qualifying organization for the full three years, and not everyone is selected. 

The agency uses a lottery system to choose 70 attorneys for the program each year.

Air Force Judge Advocate General (JAG) Corps

For those interested in joining the JAG Corps, the Air Force pays up to $65,000 toward student loans. 

The payments are made directly to the lender over the course of a three-year period starting after the first year of enlistment. A JAG attorney must remain enlisted for four years to receive the full benefit.

If you remain with JAG after the initial four-year period, you also become eligible to receive up to $60,000 in cash bonuses, depending on the number of years of service. 

Although this money can be used any way you want, you could certainly apply it to any remaining student loan balance.

State-Based Programs

Many state and local repayment assistance programs are available for attorneys. To see if one exists in your area, do an Internet search. 

The American Bar Association maintains a list of state programs, but you must be a member to access this information.


12. Active-Duty Military

Military Mother Soldier With Daughter Hugging Balloons

Not only does the military offer repayment assistance for lawyers and health care professionals, but it also offers assistance to many other types of enlisted soldiers.

The College Loan Repayment Program

The College Loan Repayment Program (CLRP) is offered as an enlistment incentive for new military recruits. The program is for enlisted personnel only and is not available to officers. Additionally, not every military occupational specialty (MOS) is eligible. 

The list of eligible MOS’s changes quarterly, but all recruiting officers have it. Although there are basic similarities, each branch is authorized by Congress to administer the program as it sees fit to meet its recruitment goals. So there are differences among each branch.

Generally, the military annually repays one-third of eligible student loan debt or $1,500 (whichever is greater) in return for a three-year service commitment. Payments begin at the end of the first year of service. 

Congress has set the total maximum allowable amount of repayment to $65,000, minus taxes. But each branch of the military applies their own maximums. Below is specific information on what each offers.

  • Army. The Army College Loan Repayment Program repays the maximum. To qualify, you need a score of 50 or higher on the Armed Services Vocational Aptitude Battery (ASVAB) and must serve in an eligible MOS.
  • Army Reserves. The Army Reserve College Loan Repayment Program pays up to $50,000 of a soldier’s student loans, paid annually as 15% of your outstanding debt or $1,500 (whichever is greater). To qualify, you need a score of 50 or higher on the ASVAB, must serve in an eligible MOS, and must enlist for a minimum of six years.
  • Army National Guard. The National Guard College Loan Repayment Program pays up to $50,000 of a servicemember’s student loans. To qualify, you need a score of 50 or higher on the ASVAB, must serve in an eligible MOS, and must enlist for a minimum of six years. In return, the National Guard will annually pay 15% of your outstanding student loan debt or $1,500 (whichever is greater) for each year of service.
  • Navy. The Navy College Loan Repayment Program pays the highest amount — up to $65,000 toward your student loan debt. One-third of your student loan debt or $1,500 (whichever is greater) is paid annually for each year of service. If your balance ever drops below one-third of your initial debt, the Navy will pay it off completely. To qualify, you must have a minimum score of 50 on the Armed Forces Qualification Test (AFQT) and enlist in an LRP-qualifying position.
  • Air Force. Unfortunately, the Air Force no longer has a CLRP for new enlistees. The only repayment benefit it currently offers is for JAG. However, they do offer tuition assistance for any enlisted member interested in furthering their education.

0% Interest Rate

In addition to the above repayment options, enlisting in the military comes with some other student loan-related benefits. For one, if you’re on active duty serving in an area of hostility and receive special pay, you can get 0% interest on your federal student loans for up to a maximum of 60 months. This interest rate can be applied retroactively.

You also can defer making payments on your federal student loans while on active duty. Some private lenders also offer this benefit.

Additionally, for qualifying federal loans, no interest will accrue during the deferment. While it’s not exactly repayment assistance, it will help you keep your costs down temporarily, hopefully making it easier to pay off your loan more quickly down the road.

Veterans Total and Permanent Disability Discharge

If you were permanently disabled while serving in the military, all of your student loans can be canceled through the Department of Education’s total and permanent disability (TPD) discharge program. 

To qualify, you’ll need to provide a letter from the VA stating either that you have a service-connected disability that’s 100% disabling or that you’re totally disabled based on an individual unemployability rating.

Public Service Loan Forgiveness

And, of course, as government employees, all military service personnel qualify for PSLF.


13. Automotive Workers

Automotive Factory Worker Painting Car Assembly Line

The Specialty Equipment Market Association (SEMA) offers loan repayment assistance through its SEMA Loan Forgiveness Program. 

Any employee of a member company can apply annually for an award of up to $5,000. Awards can be used to repay loans already acquired or as scholarships for further schooling.

To qualify, you must have earned a degree or certificate from a U.S. college, university, or technical school, graduated with a GPA of 2.5 or higher, and you must complete an application demonstrating your passion for the automotive industry.


14. Volunteer

Peace Corps Website Magnifying Glass

While not exactly a career, volunteering opportunities can help with your student loans. In exchange for your service, certain volunteer organizations grant repayment assistance. In most cases, as long as you work full-time, your efforts count toward PSLF.

Volunteers in Service to America (VISTA)

Sponsored by AmeriCorps, VISTA is a program created to fight poverty in the United States by placing volunteers in nonprofits, schools, public agencies, and faith-based groups. 

Examples of VISTA projects include organizing shelter and job opportunities for victims of disasters and creating an adult literacy awareness campaign.

Programs include a living allowance, but the biggest perk of fulfilling a one-year term of service is the Segal AmeriCorps Education Award. You can use this to pay educational costs at eligible post-secondary institutions or to repay qualified student loans. 

The amount of the award is equal to the maximum amount of the Pell Grant for the fiscal year in which your term of national service is approved. Thus, the amount of the award changes from year to year. It also varies by amount of service (whether you work full-time or part-time). 

For example, for the fiscal year Oct. 1, 2021 — Sept. 30, 2022, the award for one year of full-time service is $6,495.

The Peace Corps

If you prefer to travel abroad for your volunteer service, the Peace Corps is another great option. It sends Americans all over the world to help with people’s most pressing needs. 

Projects include everything from teaching digital literacy to boosting entrepreneurship. I have a friend who served her term in Jamaica teaching environmental sustainability.

In exchange for your service, volunteers can defer their federal student loans, have their service count toward PSLF, or receive partial cancellation of their Perkins Loans.

Additionally, at the end of the program, volunteers are given a $10,000 stipend to help them adjust to life back home. The money can be used however you want, including as payment toward your loans.

And while it’s not repayment assistance, through the Paul D. Coverdell Fellows program, returning Peace Corps volunteers can receive tuition assistance toward graduate school studies.

Teach for America

The Teach for America program is designed to recruit and develop strong teachers who are passionate about educational equality and excellence. Teachers serve in inner-city or rural areas with economically disadvantaged populations. 

You don’t need to have a teaching degree; any undergraduate degree from an accredited college is sufficient. You also must have graduated with a minimum 2.5 GPA and be a U.S. citizen, legal permanent resident, or Deferred Action for Childhood Arrivals recipient.

Teach for America participants receive a salary, typically between $33,000 and $58,000, and benefits. In addition, their work counts toward PSLF.


15. Other Careers

Stem Jobs Science Tech Engineering Math

Most states offer repayment assistance for a variety of careers. While the most common are for doctors, nurses, teachers, and lawyers, many states offer assistance for additional occupations. 

For example, the Alfond Leaders Program in Maine offers repayment assistance to those in STEM (science, technology, engineering, and mathematics) careers.

It’s worth checking out your state’s programs to see if there’s one that could apply to your situation. To find them, search for your state’s name plus your profession plus “student loan repayment assistance.”


Should You Choose a Job for the Forgiveness Benefit?

Despite the possibilities, you may want to think twice about taking on a certain profession only for the forgiveness benefits. Many of these programs come with tradeoffs. 

While you could potentially have thousands — or even tens of thousands — of dollars in student debt repaid on your behalf, you’ll likely have to work in a rural or disadvantaged area where your salary is significantly less than it would be elsewhere. You have to decide if the repayment benefit or the higher salary would net you more in the long run.

If you’re still in school, you should know that programs change all the time before you take on a lot of debt in anticipation of getting a program to help you pay it. For example, the Air Force used to have a CLRP, but it was discontinued in 2019. 

Additionally, if state or federal budgets are tight, funding for a program could easily end. For example, Maine’s Alfond’s Leaders Program is currently under review and may not continue.

Many of these programs have strict legal obligations, including contracts and a minimum employment term. They can also be difficult to qualify for due to strict eligibility requirements. Most apply only to federal loans and not private student loan debt. And some repayment assistance is tax-exempt, while other assistance is considered income and taxed accordingly.

Finally, some programs can be combined, while others are mutually exclusive. 

For example, if you participate in the military CLRP program, your years of service while your loans are being repaid don’t count toward the G.I. Bill, which pays for a certain amount of continuing education depending on your length of service.

However, if you’re already working in one of these professions and have graduated with a significant amount of student debt, it can definitely be worth your time to at least research if any of these programs can benefit your situation — especially if you’re already working in an underserved area.


Final Word

Depending on your situation, student loan forgiveness or repayment assistance may or may not be for you. But, if it is, giving just two or three years of your professional life to a program you qualify for can make a life-changing difference in your student debt burden.

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Sarah Graves, Ph.D. is a freelance writer specializing in personal finance, parenting, education, and creative entrepreneurship. She’s also a college instructor of English and humanities. When not busy writing or teaching her students the proper use of a semicolon, you can find her hanging out with her awesome husband and adorable son watching way too many superhero movies.

Source: moneycrashers.com

18 Student Loan Mistakes to Avoid

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Most students have to borrow student loans to go to college. But very few know anything about them. That’s pretty scary considering you’re likely to take on several tens of thousands of dollars in debt. And making mistakes with that much money could cost you just as much. 

Take it from me. I borrowed six figures to get a doctorate to work in a notoriously low-paying field. And thanks to taking advantage of years of deferments, forbearances, and an income-based plan designed to help borrowers with high debt and low income, I now owe twice what I originally borrowed. 

Don’t make my mistakes. Instead, learn about the most common student loan borrowing and repayment errors. That way, you can avoid an overwhelming amount of student loans and get out of debt faster.

Student Loan Mistakes to Avoid

Most student loan borrowing and repayment mistakes deal with misunderstanding what you’re borrowing, how interest works, how to pay off debt quickly, and how to avoid default. Steer clear of these top mistakes to ensure you borrow smartly and don’t end up in over your head. 

Mistake 1: Applying for Aid at the Last Minute

The Free Application for Federal Student Aid (FAFSA) is the gateway to qualifying for all financial aid of any kind. That includes federal grants and student loans as well as state grants and most institutional aid — the grants, scholarships, or loans offered by your school. 

The FAFSA opens for applications every Oct. 1, and you must complete it by June 30 before the academic year you need aid for. You must complete a new FAFSA every year you plan to enroll in school.

Many colleges and universities also require additional forms, such as the CSS profile (short for the College Scholarship Service profile), which dives even deeper into your family’s financial situation. So check with the financial aid office to find out what they are, and stay on top of deadlines. 

But note that states and colleges have limited grant resources. And those resources tend to go to the students who apply early. In other words, they’re first come, first served. So the earlier you get your applications in, the better.

And while the federal government is unlikely to run out of education loan funds, if you miss the FAFSA deadline, you’ll have to resort to private loans, which are costlier and feature less favorable repayment options.

Apply as early as possible to ensure you get as much grant and scholarship aid as you can qualify for. The more grants you can get, the fewer loans you’ll need to borrow.

Mistake 2: Borrowing Too Much

It’s possible to borrow every cent you need to finance your education anywhere you want to go to school. But it’s crucial to ask whether you should. Getting in over your head with student loan debt can have catastrophic consequences. I’m living proof.

I needed a doctorate for my original career plan of teaching college. But few college professors earn enough income to manage the types of monthly payments I had along with other living expenses. That’s how I ended up in the deferment-forbearance cycle.

And it’s not easy to get out of. 

Thanks to a loophole in the Public Service Loan Forgiveness Program I was counting on and how colleges operate, my teaching position doesn’t qualify me for forgiveness. Additionally, discharging student loans in bankruptcy is currently so difficult it’s nearly impossible. And settling federal student loans isn’t any easier. 

The first step to reducing overwhelming student loan debt is to exhaust every other means of paying for college, including scholarships, grants, and work-study. Search online for scholarship aid using a national scholarship database like Fastweb.

And never count on options like the Public Service Loan Forgiveness Program. Historically, the government’s made it nearly impossible to get. Do your homework to increase your chances of getting it and apply for it if you qualify. But don’t base your student loan repayment strategy on it.

Additionally, consider less expensive colleges. State schools tend to give most students the best value. It only matters where you go to college for a select few graduates, such as those looking to build connections with specific financial or law firms. 

Finally, do a cost-benefit analysis. I found out the hard way all degrees don’t pay off, so as much as you want to pursue your passion, it might not be worth it financially.

Search sites like Glassdoor or PayScale to find out how much you can reasonably expect to make in your chosen field and compare that to the cost of school. As a rule, don’t borrow more than you can expect to earn as your annual salary your first year out of school. That ensures you can pay it off in 10 years or less. 

Mistake 3: Not Understanding How Loan Forgiveness Works

Historically, the Public Service Loan Forgiveness Program has been notoriously difficult to qualify for. The program was overhauled in the fall of 2021. But until then, only 2% of applicants who believed they qualified had their loans forgiven.

Much of that is likely due to bureaucratic mismanagement, hence the overhaul. However, the mismanagement led tens of thousands of borrowers into making payments under the wrong repayment programs. 

On Oct. 6, 2021, the government announced Temporary Expanded Public Service Loan Forgiveness, which allows previously nonqualifying payments to be counted toward loan forgiveness as long as those payments are certified before Oct. 31, 2022.

But moving forward, it’s crucial that borrowers are clear about the rules of loan forgiveness. You don’t want to find out after 10 years that your application is ineligible and you have to start all over.

To qualify for loan forgiveness, you must:

  • Have Federal Direct Loans. Private loans don’t qualify for forgiveness, nor do other types of federal loans, such as Perkins loans. If your federal loans aren’t direct loans, you can consolidate them into a direct loan to qualify. 
  • Work Full-Time for the Government or a Nonprofit. Payments only qualify while you’re employed full-time for an American federal, state, local, or tribal government or qualifying 501(c)(3) nonprofit organizations. That includes military service, Peace Corps, and AmeriCorps but excludes labor unions and partisan political organizations.
  • Enroll in an Income-Driven Repayment Program. No other repayment options qualify. But even if your income is so low your calculated payment under the plan is $0, being enrolled qualifies you. 
  • Make 120 Qualifying Payments. They don’t have to be consecutive, but they must qualify, meaning you have to make them under an income-based plan.
  • Submit the Forgiveness Certification Form Regularly. You must fill out and submit a Public Service Loan Forgiveness Program certification form yearly and each time you switch employers. While not required, doing so ensures the payments you’re making qualify for forgiveness and allows you to make any changes you need to before you’ve made too many nonqualifying payments.

See all the rules at StudentAid.gov. 

Mistake 4: Taking Out the Wrong Type of Loan

There’s more than one type of student loan. But it’s generally best to exhaust your resources for federal aid before turning to alternatives. 

That said, while rare, some students may find the caps on how much you can borrow in federal direct loans don’t cover the total cost of attendance. 

Fortunately, graduate students and parents of undergrads can borrow PLUS loans up to the total cost of attendance. So there’s no need for many students to resort to other sources. If that’s not an option for you, students can sometimes borrow from their state government or the school they plan to attend. 

But the primary source of alternative loans for student borrowers is private student loans from banks or credit unions.

Federal student loans almost always win out over private student loans because of their lower fixed interest rates, flexible repayment options, borrower protections, and the potential for forgiveness.

But if you’re planning to borrow PLUS loans and definitely won’t qualify for the Public Service Loan Forgiveness Program, it’s worth it to find out whether you could get a better deal on a private loan if you have excellent credit. 

Mistake 5: Not Shopping Around for the Best Interest Rate & Terms

If you decide to borrow private student loans, always shop around for the best loan you can qualify for.

Private lenders compete for your business. So going with the first lender you find could mean leaving a better rate on the table.

Use a comparison site like Credible, which matches you with prequalified rates from up to eight lenders with only a soft inquiry on your credit report, which doesn’t affect your credit score. That way, you can compare all your student loan options in one place. 

But it’s not only interest rates that should matter to your bottom line. The best private student loan companies offer various borrower perks in addition to low rates.   

For example, most lenders reduce your interest rate when you enroll in autopay. And some reduce your rate even further with loyalty discounts for doing other business with them, such as opening bank accounts or taking out personal loans. 

Some lenders also offer perks for specific borrowers, such as special payment plans for medical and dental students during their residencies. And some even offer unique perks like free financial coaching or career planning services.  

Just remember to read all the fine print so you know exactly what loan terms you’re agreeing to before you sign. For example, it may lack options for deferment if you fall on hard times or a co-signer release option. Don’t be lured by a shiny interest rate on its own.  

Mistake 6: Not Understanding How Variable & Fixed Interest Rates Work

The rate is only one piece of the interest puzzle. How that rate works also affects how much accrues over time. 

For example, all federal student loans come with fixed interest rates set each year by law. That means the rate stays the same for the life of the loan, which could be a good or bad thing, depending on the interest rate during the year you borrowed. 

But some private student loans have variable interest rates. These fluctuate with market conditions. Although the variable rates are generally the lowest offered rates, it’s because the borrower is assuming the risk that the rate won’t go up, which is likely if you take 10 or more years to repay your student loans.

If you already have a variable-rate private loan, look into refinancing to a fixed-rate loan while rates are low. 

And once you start making payments, contact the student loan company to find out if there are any ways to lower the interest rate, like signing up for an autopay discount.

Mistake 7: Not Understanding Interest Accrual & Capitalization

Another factor to consider is when the interest begins to accrue (accumulate). On subsidized federal loans, that doesn’t happen until after you graduate, leave school, or drop below half-time enrollment. Thus, whatever you borrowed is what you owe up until the day you’re no longer enrolled full time. 

But interest on unsubsidized federal and private loans starts the moment you get the money. So on graduation day, you owe a higher balance than you originally borrowed.

Worse, that interest is capitalized (added to the principal balance as though it were part of what you borrowed) once you graduate, leave school, or drop below half-time enrollment. Since interest accrues according to the principal, that means you’ll then be earning interest on the interest.

Fortunately, you can reduce or even eliminate the burden interest can cause. Make small monthly interest payments while you’re still in school. That ensures none accrues and capitalizes on graduation. 

If you have to, take on a part-time job. As long as you keep it to part-time hours, it shouldn’t interfere with your studies, and a well-chosen college job comes with numerous benefits, like teaching you the money management skills you need to pay off those loans after college. 

Mistake 8: Co-Signing a Loan Without Understanding the Consequences

In some cases, a co-signer can help a student qualify for a loan or get a lower interest rate. 

But co-signing their loan comes with a great deal of risk. You’re taking on equal responsibility for the loan. That means if they make a late payment or miss one entirely, it could impact your credit score. And if they default on the loan, the loan company will come after you for the balance.

And it doesn’t matter how responsible or well-intentioned the borrower is. No one can predict the future, and they could fall on hard times. 

There are several programs designed to help people who have trouble paying back federal loans — if they enroll in them. But private lenders are especially hard to work with. Either way, there are risks associated with co-signing for a student loan. 

If you do agree to co-sign, ask them to look for a company with a co-signer release option, which absolves you of responsibility for the debt after the student makes a certain number of on-time monthly payments.

If not getting help means they can’t attend college, a parent PLUS loan gives you more control than co-signing a private loan. You can borrow up to the total cost of their attendance, but the loan will be in your name. 

If you want, you can still agree that they’re responsible for paying you back (though that agreement isn’t legally enforceable). Plus, if you experience financial hardship, you have access to federal repayment plans and borrower protections.

However, don’t sacrifice retirement savings or go into debt paying for your kids’ college. It could leave you unprepared, potentially placing a financial burden on them later.

Mistake 9: Putting Off Making a Repayment Plan

Many borrowers get lulled into thinking they can wait until after they graduate and their six-month grace period ends before they have to start worrying about their student loans. But you need to prepare your budget long before then.

A student loan payment could easily be $400 per month (maybe more). That’s a hefty chunk of anyone’s take-home pay. But recent grads won’t make as much as established professionals in any field. 

And if you don’t think about it for the first six months post-graduation, it’s easy to establish a post-college life that doesn’t leave room for it, such as upgrading your apartment or buying a new car.

Before you graduate, find out what your monthly payment will be. You can check your student loan balance by creating a student account at StudentAid.gov.

Then, build the rest of your post-college budget around your monthly student loan payment. That ensures you won’t take on more financial obligations than you can afford. Unfortunately, that may mean living that ramen-eating college lifestyle for the first couple of years after you graduate. 

Mistake 10: Choosing the Wrong Repayment Plan

The automatic student loan repayment schedule is 10 years of fixed payments, but it’s not the best option for all borrowers.

You don’t want to string out payments for decades unless it’s necessary. But income-driven repayment plans, which forgive any remaining balance after you make 240 to 300 (20 to 25 years) of qualifying payments, may be a saving grace for borrowers with high debt and low income. 

And for those entering public service fields, an income-driven repayment plan is the gateway to the Public Service Loan Forgiveness Program, which forgives any remaining balance in as few as 120 qualifying payments. 

But even if you stick to the standard 10-year plan, you still have options. 

For example, you can repay your loans on a graduated plan, which lets you make smaller payments at the beginning. Your payments then gradually rise every two years. This plan is ideal for those who must start in a lower-paying job but expect their income to increase substantially as they gain work experience.

Use the loan simulator at StudentAid.gov to see how much you can expect to repay under different repayment plans. It shows your monthly payments, total amount owed, and any potential balance you could have forgiven under an income-driven repayment plan as well as the date you can expect to have your loans paid off.

Use this information to weigh your options. Ask yourself: 

  • Is it better to pay off your loans as quickly as possible by sticking to the standard 10-year plan? Is that realistic at your current income? 
  • How big will your payments be 10 years down the line if you opt for graduated repayment? Are you likely to make enough money for that to be practical? 
  • Is it better to make your current situation more manageable through an income-driven or extended repayment plan? 

Lowering your monthly payment will have consequences since it means more interest will accrue. But the loan simulator can give you an accurate picture of what those consequences will look like. 

Mistake 11: Only Making the Minimum Payment

The longer you sit on debt, the more it costs you thanks to the interest. So if you have any wiggle room in your budget, put whatever money you can toward your student loans to pay them off as quickly as possible. 

Even small amounts can make a big difference.

For example, if you borrowed $40,000 in student loans at 6% interest, your monthly payment would be $444. But if you paid $500 a month instead — a difference of only $56 — you’d save $1,957 in interest and have them repaid a year sooner.

If you can, opt for a side gig or cut your expenses. Additionally, put any windfalls — like tax refunds, gifts, or inheritances — toward your loans.  

But this is key: When you make any extra payments toward your loans, ensure you indicate the company should apply it to the principal. The more you pay down the principal, the less interest accumulates.

Mistake 12: Refinancing Without Considering the Pros & Cons

Refinancing is a common strategy for lowering the cost of debt, whether it’s a mortgage refinance or a student loan. But while refinancing can score you a lower interest rate, interest rates aren’t the only consideration.

When you refinance a student loan, you can only do so through a private refinance lender. That means you lose access to all the benefits of federal student loans, including federal repayment plans, borrower protections, generous deferment and forbearance options, and federal loan forgiveness. 

It may still be worth it to you, depending on the rate you can get. But it’s crucial to weigh that against all you’d be giving up.

Even if the private interest rate is lower, the future is unpredictable, and you never know if you could need those federal benefits. And you’ll lose all access to federal loan forgiveness with a refinance.

On the other hand, if you have private student loans, there’s no reason not to refinance. 

Mistake 13: Postponing Payments Unnecessarily

Both federal and private student loans have multiple options for deferment and forbearance. These allow you to temporarily suspend payments for various reasons, including full-time enrollment in school, economic hardship, military deployment, and serving in AmeriCorps. 

Sometimes, deferment or forbearance makes sense, such as while you’re enrolled in school. But prolonged use of these options just increases your overall balance because interest keeps piling up. 

Interest accrues on all but subsidized federal loans during deferments. And it accrues on all loans during forbearance. Additionally, that interest is capitalized (added to the principal balance) at the end of the deferment or forbearance. 

Only use these options when absolutely necessary. And if possible, make interest payments during periods of deferment or forbearance to prevent its accrual. 

If you’re deferring or forbearing for economic hardship and anticipate the hardship will last longer than a month or two, apply for an income-driven plan instead. 

Depending on the severity of your situation, your monthly payments could be calculated as low as $0. And some plans don’t capitalize interest and even have interest subsidies, which means the government covers the interest on your loans for a specified period.  

Additionally, those $0 “payments” count toward potential student loan forgiveness. But only periods of economic hardship deferment count toward the forgiveness clock. No other form of deferment or forbearance qualifies. And there’s a cap on how long you can defer for economic hardship.

Plus, if your financial situation changes, you can always change your repayment plan. 

Mistake 14: Missing Payments

Missing payments can result in late fees. The student loan company tacks these onto your next month’s minimum payment. So if you had a hard time paying this month, it won’t be easier next month. 

Plus, when you make your next payment, your money covers fees and interest before going toward the principal. So multiple fees could mean paying your principal down slower. And interest accrues according to the principal balance, so the higher you keep that balance, the more interest you pay.

Worse, if you miss enough payments, it can result in a default of your loans, which comes with severe consequences, such as damaged credit or wage garnishment or seizure of your tax refunds, Social Security benefits, or property. 

There’s never a reason to miss a payment on a federal student loan if you’re facing financial hardship. Simply call the company and let them know. Depending on what you qualify for, you can choose from multiple options, including deferment, forbearance, or an income-driven repayment plan.

Private lenders are tougher to work with, as fewer repayment options are available. But many are still willing to work with you if you explain the situation. Most of the top lenders have limited programs for deferment or forbearance in times of economic hardship. 

Mistake 15: Keeping Your Assigned Payment Due Date

Student loan companies allow you to adjust your monthly due date. That can be helpful if you’re having trouble stretching your dollars from one paycheck to the next.

Plus, if your bills are anything like mine, most of them are due at the same time of month. Thus, if you get paid biweekly, adjusting your due date to a different time of the month can make things easier.  

If you want a different due date, contact the company handling your student loans and ask if you can adjust your due date to one more beneficial for you. You may even be able to change it through your online account.

Ensure you get confirmation of the new date in writing. That protects you if you get hit with any late fees in error. Additionally, ask when the new date takes effect. It could take a billing cycle or two, depending on the lender. 

Mistake 16: Falling for Student Loan Scams

Many borrowers have reported receiving phone calls, emails, letters, and texts offering them relief from their student loans or warning them federal forgiveness programs will end soon if they don’t act now.

But the services these scam debt relief companies offer usually steal borrowers’ money or private information rather than grant any actual relief. 

Other student loan scams take fees for helping students apply for income-driven repayment plans or consolidate their loans. However, borrowers never have to pay to sign up for any federal repayment programs. They only need to contact the company in charge of their loan.

In general, if someone contacts you, avoid giving them any personal information. No matter who they claim to be, either tell them to send their request in writing or say you’ll call them back. Then verify their story by contacting your student loan company at their listed phone number or through their website.

Additionally, never pay an upfront fee for student loan services. The government doesn’t charge application fees for any of their loan programs. They also won’t claim an offer is only available for a limited time since all the terms are set by law every year and are available to all students.

For more red flags to watch for, check out the Department of Education’s tips on avoiding student loan scams. 

Mistake 17: Forgetting to Update Your Contact Information

You are responsible for making all your loan payments whether you received the bill or not. Additionally, the lender in charge of your loan can change, and you need to ensure you’re able to receive that information so you always know who to contact about paying and managing your loans.

Thus, it’s on borrowers to ensure the company in charge of their student loans has all their current contact information, including mailing address, email address, and phone number. That’s especially the case if you moved after you graduated or listed a parent’s address on your application forms.

Log into your student loan account to ensure your contact information is current. 

If you don’t know who services your student loans, check with your school’s financial aid office. For federal loans, you can always create an account on StudentAid.gov.

Then, each time you move, get a new email address or change your number, update that info with the company handling your student loans.

Mistake 18: Not Asking for Help

Paying off student loans can be overwhelming, especially if you’re dealing with low income or a large amount of debt. Depending on your circumstance, it could feel like you’re drowning and may never escape.

Trust me, I know how it feels. And I’m hardly alone. A simple online search reveals dozens of stories of borrowers who’ve consistently paid on their loans yet owe more than ever thanks to the compounding effects of interest, which often feels like quicksand. 

But paying late or not at all only makes the situation worse. Damage to your credit report can make it difficult for you to rent an apartment, buy a car, or even get a job. And default can leave you subject to wage garnishment, steep collection penalties, and even lawsuits.  

But hope isn’t lost. There is help. Resources exist for borrowers who need an extra hand.

The first step is to reach out to the student loan company. See if there’s a payment plan that’s manageable for you. Even if there isn’t, let them know what payment you can afford, and go from there. 

If the company is uncooperative, contact the federal student loan ombudsman. 

Borrowers can also reach out to nonprofit student loan counselors, such as the National Foundation for Credit Counseling or The Institute of Student Loan Advisors. These organizations work with borrowers to help them figure out the best strategies for dealing with their loans and overall financial health. 

Alternatively, if you’ve reached the point of needing to settle your student loans or file for bankruptcy, seek an attorney who specializes in student loans. For private student loan help, try The National Association of Consumer Advocates. For federal student loans, search the American Bar Association.


Final Word

The United States is currently experiencing a student loan crisis because of how the debt has impacted American lives.

It’s affected borrowers’ ability to save for retirement and buy a home. It’s also impacted people’s ability to start a family or even choose a job for passion over a paycheck.

And it can do so for decades. Many millennials who’ve entered middle age continue to face debt repayment. And many feel college wasn’t worth it as a result.

But you don’t have to be one of these statistics. I write about student loans precisely to help others avoid my mistakes. Learn from this list so you can borrow wisely and avoid overwhelming student loan debt.  

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Sarah Graves, Ph.D. is a freelance writer specializing in personal finance, parenting, education, and creative entrepreneurship. She’s also a college instructor of English and humanities. When not busy writing or teaching her students the proper use of a semicolon, you can find her hanging out with her awesome husband and adorable son watching way too many superhero movies.

Source: moneycrashers.com

What Is Fibonacci Retracement in Crypto Trading?

A retracement level is the price at which a stock or cryptocurrency tends to see a reversal in its trend. Fibonacci retracement is a popular tool in technical analysis that helps determine support and resistance levels on a price chart.

What Are Fibonacci Retracement Levels?

Fibonacci numbers are a series where each number equals the sum of the two previous numbers. The most basic series is: 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233, 377 etc.

When it comes to technical analysis, investors use Fibonacci Replacement Levels, expressed as percentages, to analyze how much of a previous move a price has retraced. The most important Fibonacci Retracement levels are: 23.6% 38.2%, 50% and 61.8%.

Some analysts refer to 61.8% as “the golden ratio,” since it equals the division of one number in the series by the number that follows it. For example: 8/13 = 0.6153, and 55/89 = 0.6179.

The other Retracement levels reflect other calculations: Dividing one number by the number three places to its right equals 23.6%. For example: 8/34 = 0.2352. Bitcoin traders often use 78.6%, which is the square root of 0.618,

Some prefer the 0.618 and 0.382 levels because these are the retracement levels analysts believe are most likely to generate a trend reversal. These levels are considered inflection points where fear and greed can alter price action. When an asset is trending upward but loses momentum, it’s possible that a pullback to the 0.618 price level could result in a bounce upward, for example.

How Does Fibonacci Retracement Work and What Does it Do?

There are several theories as to why the fibonacci retracement works. Some of these include:

•   Fibonacci price levels reflect the effects of extreme fear and greed in the market. To use this to their advantage, traders might buy when people are panicking and sell when others are getting greedy.

•   Fibonacci patterns are often observed in nature as well as in mathematics. For example: fruits and vegetables. If one would look at the center of a sunflower, spiral patterns could appear to curve left and right. Counting these spirals, the total often is a Fibonacci number. If one could divide the spirals into those pointed left and right, then two consecutive Fibonacci numbers could be obtained. Therefore, it’s thought that these patterns may be important in financial markets as well.

•   The law of numbers: If a greater percentage of people practice Fibonacci crypto trading, then the likelihood of its accuracy increases.

At its core, a Fibonacci retracement is a mathematical measurement of a particular pattern. When it comes to Fibonacci in crypto, traders try to apply these patterns to price action to predict future price movements.

Who Created Fibonacci Retracements?

While traders commonly use Fibonacci in crypto today, the number sequences pre-date the invention of cryptocurrency by many centuries. Fibonacci numbers are based on the key numbers studied by mathematician Leonardo Fibonacci (or Leonardo of Pisa) in the 13th century, although Indian mathematicians had identified them previously. He was a medieval Italian mathematician famous for his “Book of the Abacus”, the first European work on Indian and Arabian mathematics, which introduced Hindu-Arabic numerals to Europe.

Formula

In an uptrend or bullish market, the formulas for calculating Fibonacci retracement and extension levels are:

UR = High price – ((High price – Low price) * percentage) in an uptrend market; where UR is uptrend retracement.

UE = High price + ((High price – Low price) * percentage) in an uptrend market; where UE is an uptrend extension.

For example: A stock price range of $10 – $20, could depict a swing low to swing high.

Uptrend Retracement (UR) = $20 – (($20 – $10) * 0.618)) = $13.82 (utilizing 0.618 retracement)

Uptrend Extension (UE) = $20 + (($20 – $10) * 0.618)) = $26.18 (utilizing 0.618 retracement)

If a stock pulls back $13.82 could be a level that the stock bounces back to reach higher levels than its swing high price, e.g. $20. In an uptrend, the general idea is to take profits on a long trade at a Fibonacci price extension Level ~ $26.18.

What Does a Fibonacci Retracement do?

Markets don’t go straight up or down. There are pauses and corrections along the way. To buy stocks in an uptrend, one would look to get the best price possible.

Some traders use Fibonacci Retracement to determine how much a stock could pull back before continuing higher. Traders can use these retracement levels to find optimal prices at which to enter a trade.

A swing high happens when a security’s price reaches a peak before a decline. A swing high forms when the highest price reached is greater than a given number of highs around it.

Swing low is the opposite of swing high. It refers to the lowest price within a timeframe, usually fewer than 20 trading periods. A swing low occurs when a lowest price is lower than any other surrounding prices in a given period of time.

Support and Resistance

Support is the price level that acts as a floor, preventing the price from being pushed lower, while resistance is the high level that the price reaches over time. Analysts often illustrate these as horizontal lines on a graph.

A support or resistance level can also represent a pivot point, or point from which prices have a tendency to reverse if they bounce (in the case of support) or retreat (in the case of resistance) from that level.

Learn more: Support and Resistance: What Is It? How To Use It for Trading

Limitations of Fibonacci Retracement

Fibonacci retracements in crypto or other markets may be slightly predictive. But over relying on them can be counterproductive for reasons such as:

•   Fibonacci retracements, like any other indicators, could be used effectively only if investors understand it completely. It could end up being risky if not used properly.

•   There are no guarantees that prices will end up at that point, and retrace as the theory indicates.

•   Fibonacci retracement sequences are often close to each other, therefore it may be tough to accurately predict future price movements.

•   Using technical analysis tools like Fibonacci retracements can give investors tunnel vision, where they only see price action through this one indicator. Assuming that any single indicator is always correct can be problematic.

A Fibonacci retracement in crypto trading could wind up being even less predictive than in other financial markets due to the extreme volatility that cryptocurrencies often experience.

Fibonacci Retracements and Bitcoin

Fibonacci retracements can also be used for trading cryptos such as Bitcoin (BTC), similarly to how they’re used in stocks. In this case, one would use the levels 23.6%, 38.2%, 50%, 61.8% and 78.6% to determine where the cryptocurrency price would reverse.

Crypto prices are very volatile, and leverage trading is common. Leverage is the use of borrowed funds to increase the trading position, beyond what would be available from the cash balance alone. Therefore, it can be important to have some reference as to when the price could reverse, to not incur major losses.

Using the Fibonacci Retracement Tool to Trade Cryptocurrencies

In order to get started with a Fibonacci Retracement Tool, a trader could find a completed trend for a crypto, say, Bitcoin, which could either be an uptrend or downtrend.

Below are some steps on how to use Fibonacci retracement tool:

1.    Determine the direction of the market. Is it an uptrend or downtrend?

2.    For an uptrend, determine the two most extreme points (bottom and top) on the Bitcoin price chart. Attach the Fibonacci retracement tool on the bottom and drag it to the right, all the way to the top.

3.    For a downtrend, the extreme points are top and bottom and the retracement tool could be dragged from the top to the bottom.

4.    For an uptrend or downtrend, one could monitor the potential support levels: 0.236, 0.382, 0.5 and 0.618.

Recommended: Crypto Technical Analysis: What It Is & How to Do One

Fibonacci Retracement Example for Bitcoin

In December 2017, Bitcoin fell from $13,112 to around $10,800, within a short timeframe. After that, it rallied up to $12k twice, but did not break above that level until 2021. That indicates a bearish pattern, as it couldn’t break above its previous high. In technical analysis it is called a double top.

On the Fibonacci tool, the $12k resistance point coincided with the 50% level of retracement. When the price could not reach this level, it started to fall again. In this scenario, traders using Fibonacci Retracement might consider this a good time to exit a long position or establish a short position. A short trade is based on the speculation that the price of Bitcoin is going to fall.

By February, 2018, the trade materialized as Bitcoin continued its downtrend falling all the way to $9,270. The short trade would have worked and traders could have realized a profit from using the crypto Fibonacci Retracement tool, although those who managed to HODL for years after that would have made even more.

FAQ

Does Fibonacci retracement work with crypto?

While the Fibonacci retracement tool is traditionally used for analyzing stocks or trading currencies in the forex market, some analysts believe it is also helpful in determining a crypto trading strategy.

How accurate is fibonacci retracement?

In crypto, Fibonacci retracement levels are often fairly accurate, although no indicator is perfect and they are best used in combination with other research. The accuracy levels increase with longer timeframes. For example, a 50% retracement on a weekly chart is a more important technical level than a 50% retracement on a five-minute chart.

What are the advantages of using fibonacci retracement?

Here are some benefits of using Fibonacci Retracement.

•   Trend prediction. With the correct setting and levels, it can often predict the price reversals of bitcoin at early levels, with a high probability.

•   Flexibility. Fibonacci Retracement works for assets of any market and any timeframe. One must note that longer time frames could result in a more accurate signal.

•   Fair assessment of market psychology. Fibonacci levels are built on both a mathematical algorithm and the psychology of the majority, which is a fair assessment of market sentiment.

The Takeaway

The Fibonacci Retracement tool can help identify hidden levels of support and resistance so that analysts can better time their trades. Analysts believe this tool is more effective when utilized with types of cryptocurrency that have higher market-capitalization, like Bitcoin and Ethereum, because they have more established trends over extended time frames.They consider it less effective on cryptocurrencies with a smaller market capitalization.

Whether you use Fibonacci Retracement or other methods to create your cryptocurrency trading strategy, a great way to get started is by opening a brokerage account on the SoFi Invest investment app. You can use it to trade more than a dozen different coins, including Bitcoin, Ethereum, Litecoin, Cardano, and Dogecoin.

Photo credit: iStock/HAKINMHAN


SoFi Invest®
The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . SoFi Invest refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
1) Automated Investing—The Automated Investing platform is owned by SoFi Wealth LLC, an SEC Registered Investment Advisor (“Sofi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (“Sofi Securities).

2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.

3) Cryptocurrency is offered by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.

For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, please visit www.sofi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform. Information related to lending products contained herein should not be construed as an offer or pre-qualification for any loan product offered by SoFi Lending Corp and/or its affiliates.
Crypto: Bitcoin and other cryptocurrencies aren’t endorsed or guaranteed by any government, are volatile, and involve a high degree of risk. Consumer protection and securities laws don’t regulate cryptocurrencies to the same degree as traditional brokerage and investment products. Research and knowledge are essential prerequisites before engaging with any cryptocurrency. US regulators, including FINRA , the SEC , and the CFPB , have issued public advisories concerning digital asset risk. Cryptocurrency purchases should not be made with funds drawn from financial products including student loans, personal loans, mortgage refinancing, savings, retirement funds or traditional investments. Limitations apply to trading certain crypto assets and may not be available to residents of all states.
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Source: sofi.com

Is a Warehouse Store (Costco, Sam’s Club, BJ’s) Membership Worth It? – Costs, Pros & Cons

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Smart-shopping blogs and magazines teem with stories about the great deals you can get at warehouse stores. Shopping experts say joining a warehouse club can save you money on nearly everything — groceries, tires, even vacations. 

But there’s one obvious snag. Before you can fill up your cart with these bargains, you have to pay an annual fee of around $50 just to get in the door. How can you tell if your annual savings will be enough to offset this membership fee? 

To answer that question, you need to delve into the murky depths of warehouse store shopping. That means getting the details on how warehouse clubs work, what they cost, and how good the prices are on the items you buy most.

How Warehouse Stores Work

Warehouse stores use a different pricing model from other retail stores. Regular retailers, such as Walmart, make their money from the markup they charge. That’s the difference between the wholesale price they pay to their suppliers and the retail price they charge to customers.

According to Entrepreneur, the markup at a typical retail store is around 50%. In other words, the price you pay is twice what the store paid.

By contrast, warehouse stores charge a much lower markup. For instance, Costco’s markup is only 14% to 15%, according to Forbes. They make up for the lost profits by charging a fixed yearly fee to each customer. 

That’s why these stores sometimes refer to themselves as buying clubs. You pay upfront to become a member, and in return, you get to buy products at rock-bottom prices. In addition, you gain access to various other special deals on everything from health care to travel.

Top Warehouse Store Chains

There are three major warehouse chains in the United States. The biggest is Sam’s Club. Sam Walton, the founder of Walmart, started this store in 1983 as a supplier for small businesses.

Today, Sam’s Club is a nationwide chain with nearly 600 stores in the U.S. and millions of members. Its products range from groceries and office supplies to big-ticket items like jewelry and furniture.

The closest competitor to Sam’s Club is Costco. This chain started in Seattle in 1983. Ten years later, it merged with another club store called Price Club, which had been catering to business owners since 1976. 

Today, Costco boasts over 100 million members and has hundreds of stores stretching across the United States and beyond. The chain sets itself apart from other warehouse stores with its focus on high-end goods, such as organic food and designer jeans.

The third major chain is BJ’s Wholesale Club. BJ’s is a smaller chain than its competitors, with 200-plus stores in the eastern U.S., Michigan, and Ohio. But like Sam’s Club and Costco, it offers a wide range of goods and services, from groceries to vacation packages.

Warehouse Stores Work

People who love warehouse stores really love them. Forbes reports that Costco members are extremely loyal, with more than 9 out of 10 choosing to renew their membership each year.

And they have many good reasons to feel this way. Warehouse stores offer a plethora of benefits, including the following:

1. Low Prices — At Least on Certain Items

The main reason shoppers love warehouse stores is their low prices. Independent studies have found that warehouse clubs really do offer great bargains in certain areas, such as:

  • Groceries. In 2018, Consumers’ Checkbook went grocery shopping at warehouse clubs and supermarkets. It found that prices at both Sam’s Club and Costco beat major supermarket chains by 17% to 41%. (However, BJ’s prices failed to beat Walmart’s.)
  • Gasoline. A 2020 analysis by CSP compared prices across gas stations around the country. Costco was the winner, beating the national average price by nearly $0.25 per gallon.
  • Prescription Drugs. In 2018, Consumer Reports checked retail prices on five drugs at over 150 U.S. pharmacies. The complete set cost over $900 at CVS, but only $153 at Sam’s Club and $105 at Costco. And some generic drugs at Sam’s Club are only $4.
  • Car Tires. In a 2021 analysis by Clark Howard, Sam’s Club was second only to Walmart for the lowest average price on car tires. All three warehouse clubs were in the top six.
  • Booze. According to Spoon University, Costco offers the lowest unit prices on all types of alcohol. For those willing to buy in bulk, the club charges significantly less for Skyy vodka and Blue Moon beer than other retailers.
  • Pet Food. In a 2019 analysis of name-brand pet food prices by Consumers’ Checkbook, Sam’s Club and BJ’s topped the list for lowest average prices. (Costco, which mainly sells its own Kirkland Signature brand, was not covered.)

2. Access to Services

When you join a warehouse club, you don’t just get access to its products. These stores also offer a variety of services exclusively for members.

For instance, a Costco membership gives you access to Costco’s car-buying service. It provides haggle-free low prices on new and used cars and RVs from approved dealers. It also gives you 15% off car parts and services from participating providers.

Costco members can also save on vacations with Costco Travel. It provides special deals on airfare, hotels, auto rentals, cruises, and travel packages. The store also offers photo printing, banking services, insurance, home renovation, eye care, and bottled water delivery.

Other warehouse clubs offer a similar menu of services. Sam’s Club doesn’t provide banking or insurance services, but it gives members discounts on concert and theater tickets, theme parks, and attractions. 

Sam’s Club also offers discounts on various subscription services. Members can get lower prices on music streaming, video streaming, educational apps for kids, and fitness apps.

Likewise, BJ’s offers travel, vision care, home improvement, and photo services for members. One special perk it provides is free technical support for all its electronics.

3. High-Quality Store Brands

Shoppers are impressed with the quality of warehouse stores’ house brands — especially at Costco. In a 2019 Consumer Reports survey, Costco was one of only three out of 96 grocery chains to earn top marks for the quality of its store brands. 

The magazine’s editors get more specific in a 2017 article. They call several Kirkland products  as good as or better than name-brand competitors. These include laundry and dishwasher detergent, batteries, toilet paper, bacon, mayonnaise, and organic chicken stock. 

Another product that gets high marks from reviewers is Kirkland Signature dog food. According to DogFood.Guide, this brand has “surprisingly high quality” for a store brand. It’s made by Diamond Pet Foods, a leading manufacturer of high-end foods like Taste of the Wild.

Both Kirkland and Member’s Mark, the house brand from Sam’s Club, get good reviews for some wines and liquors. The Beverage Tasting Institute gives ratings of at least 90 points out of 100 to several Kirkland wines and to Member’s Mark tequila, vodka, and gin.

4. One-Stop Shopping

Warehouse stores allow you to condense many errands into one. You can pick up your glasses, shop for shoes, get new tires, book a vacation, and buy groceries all in one trip.

5. Free Samples

On weekends, shoppers at warehouse stores can stroll through the aisles noshing on samples of assorted food items. Naturally, the stores hope that trying the products will inspire you to buy them, but there’s no obligation. You’re perfectly free to chow down and walk away.

6. A Pleasant Shopping Experience

On the whole, warehouse club members are satisfied shoppers. In a survey by Consumer Reports, Costco shoppers reported being more satisfied with their experience than shoppers at nine other major retail chains. 

A 2021 report by the American Customer Service Index found similar results. Costco topped a list of 20 retailers, with 81% customer satisfaction. Sam’s Club and BJ’s came in a bit lower down the rankings, with a respectable 79% and 77% respectively.

7. Good Returns Policies

One likely reason why warehouse store shoppers are so satisfied is that if they’re ever unhappy with a purchase, it’s easy to return. Both Costco and Sam’s Club offer an absolute 100% money-back guarantee on virtually everything they sell.

If you’re not satisfied for any reason, you can return it with your receipt at any time. One exception is electronic items, which can’t be returned after 90 days. BJ’s policy is a bit more restrictive, allowing returns only up to one year.

Costco Warehouse Good Returns Policies

Although warehouse stores have undeniable benefits, they have their drawbacks too. Here are a few good reasons not to do your shopping at a warehouse store:

1. Membership Fees

The most obvious downside of warehouse club membership is the membership cost. The standard annual membership fee for a household or a business is $45 per year at Sam’s Club, $55 per year at BJ’s, and $60 per year at Costco. 

In addition, all three of the major warehouse chains offer higher-tier memberships. They’re called Executive Membership at Costco, Plus at Sam’s Club, and Perks Rewards at BJ’s.

These tiers cost roughly twice as much as a regular club membership. In exchange, they give you 2% back on nearly everything in the store. That means you have to spend between $2,750 and $3,000 per year before the higher-level membership will pay for itself.

2. Oversized Packages and Quantities

Warehouse stores are known for their jumbo-size packages. Buying in bulk to save money makes perfect sense with nonperishable goods, such as soap or paper towels. You can safely stock up on these bulk items as long as you have the space to store them. 

However, bulk buying can be a problem with products that don’t keep well. A five-pound bag of shredded cheese is no bargain unless you can (and actually want to) eat that much cheese before it goes bad.

3. Limited Selection

Warehouse clubs are good for grocery shopping, but you can’t always buy everything on your shopping list there. In the 2018 Consumers’ Checkbook study, the three warehouse stores only carried about half the items in a standard basket of groceries.

BJ’s was the best of the lot, with about 57% of the items available. Sam’s Club had 52% of them, and Costco had only 44%. Moreover, most of the items at all three stores were only available in bulk containers, not standard sizes.

4. Impulse Buys

Warehouse stores are huge and crammed with an incredible variety of goods. Even if all you need is cereal, milk, and toothpaste, you’ll probably have to walk past jewelry, clothes, and toys to get to those three staples. 

This makes it very easy to fall victim to the temptation of impulse buys. You could easily go in with your three-item shopping list and walk out with a whole cart full of unplanned purchases. Worse, some of these could be big-ticket items like a TV set.

5. Restrictions on Coupons

If you’re in the habit of using coupons to save money on groceries, the warehouse store isn’t the place to do it. Neither Costco nor Sam’s Club accepts manufacturer’s coupons at all. BJ’s takes them, but it only accepts select coupons in digital form.

5. Deals That Aren’t So Great

With such a vast assortment of goods gathered together in one store, warehouse stores seem ideal for one-stop shopping. However, if you buy everything on your list there, you’ll probably spend more than you need to.

My local Costco has great prices on a few staple foods, such as nuts. But its fresh foods, such as produce and eggs, are nearly always more expensive than the ones at nearby supermarkets.

Even paper goods like paper towels and toilet paper aren’t such great deals. Two dozen rolls of toilet paper at Costco cost more per roll than one dozen of the store brand from Trader Joe’s.

Warehouse stores also tempt buyers with big-ticket items like appliances, furniture, and electronics. But these products are almost never bargains. 

For instance, the current Costco savings brochure advertises LED TV sets for $700 to $3,000. But the top-rated LED TV in the same size range at Best Buy costs just $600. And a laptop Costco advertises for $700 is similar to one Lenovo sells for $565.

Deals That Arent Great

Deciding Whether It’s Worth It

The best way to figure out whether a warehouse club membership is worth it for you is to check it out in person. Scout up and down the aisles, check prices on the items you buy regularly, and  compare them to the prices at your local supermarket.

There’s just one problem with this plan. Most warehouse stores won’t even let you in the door to check prices without a membership card. One way to get around this problem is to ask a friend who’s a member to let you tag along on their next trip. 

Also, nonmembers are allowed to shop at Costco with a store gift card. However, only Costco members can buy these cards. To get around that rule, ask a friend to buy one for you or buy one secondhand through a gift card exchange site.

Two Real-Life Examples

Back in 2006, my husband and I took advantage of a free day pass to check out the prices at our local BJ’s Wholesale Club. We found that for most items we buy, BJ’s didn’t have lower prices than other stores. 

For instance, the $18 DVDs and $700 laptops in the electronics section couldn’t beat online deals. A 12-pound bag of baking soda cost more per pound than a supermarket store brand. And 24-roll packs of toilet paper cost nearly twice what we paid per roll at Trader Joe’s.

We still found good deals on a few items, like cereal, rice, and chocolate chips. But crunching the numbers, we found that we wouldn’t save enough on these items in a year to pay for the club membership.

But in 2017, we decided to give Costco a try. My husband needed new glasses, and we found the savings on those would more than pay for the $60 membership cost. 

Once we were inside the store, we started finding deals on all sorts of other things we buy regularly. Organic sugar, raisins, nuts, oatmeal, milk, and olive oil were all cheaper at Costco than at local supermarkets.

Here’s a sample of our savings from a single Costco trip. For each item, I’ve listed the amount we bought, the price, and what the same amount would have cost at the next cheapest store.

Product Costco Price Competitor’s Price Savings

Raisin Bran (14.34 pounds) $21.87 $24.38 (Aldi) $2.51

Brussels Sprouts (2 pounds) $4.99 $4.99 (Trader Joe’s) $0

Clementines (5 pounds) $5.49 $5.49 (supermarket sale) $0

Birdseed (80 pounds) $27.98 $31.96 (Lowe’s) $3.98

Organic Raisins (4 pounds) $10.79 $11.96 (Trader Joe’s) $1.17

Walnuts (3 pounds) $10.89 $14.97 (Aldi) $4.08

Canola Oil (6 quarts) $7.69 $9.00 (Shop-Rite) $1.31

Organic Sugar (10 pounds) $7.99 $17.45 (Trader Joe’s) $9.46 (less packaging waste as well)

On this one trip, we saved a total of $22.51 on a bill of $99.54. That means we saved about 22% off our entire bill. According to our credit card statement, we spent a total of $723.50 at Costco in 2018. If we saved 22% on everything we bought there, that’s a savings of $159.17.

In addition, by becoming members, we qualified for a Costco credit card. It offered 4% cash back on gas, 3% on restaurants and travel, and 2% on everything at Costco. Those rewards save us another $34 per year or so.

So, all told, our Costco membership is saving us over $193 per year. That’s more than three times the cost of the membership card. 

Factors That Affect Your Choice

As you can see from our experience, warehouse stores aren’t all the same. BJ’s Wholesale Club definitely wasn’t a money-saver for us, but Costco definitely was.

However, what works for our family isn’t necessarily what will work for yours. It depends largely on what you buy and how much you pay for it.

Based on our experience, these are the factors most likely to make a warehouse club membership a good deal for you.

Bulk Buying

On our initial trip to BJ’s, we had to pass up a lot of deals because the containers were too big. A 30-pound sack of rice cost less per pound than a 10-pound bag, but it would have taken us years to go through it all.

However, if you have a large family or a small business, you probably go through supplies faster. That makes these jumbo-sized packages a more reasonable deal for you. All you need is enough storage space to hold them and keep them fresh.

Brand Loyalty

My husband and I usually prefer to buy store brands rather than name brands. For most products, we find their quality is just as good and their price is much lower. Most of the products we buy at Costco are the ones that come in the Kirkland store brand. 

That’s one reason we didn’t have much luck at BJ’s on our first trip. Most of its products, at least at the time, were name brands. The store’s price for Star-Kist tuna was cheaper than the price for Star-Kist at our local Stop & Shop, but no cheaper than the Stop & Shop store brand.

However, many people are loyal to specific brands. For instance, your family may insist on Heinz ketchup or Downy fabric softener. If so, there’s a good chance that a warehouse store can offer you a better price on it than your regular supermarket. 

But before you sign up for a membership, make sure the warehouse store actually stocks the specific brands you want. If you shelled out $50 for a membership card and then find out the store doesn’t carry Heinz ketchup, you’re out of luck.

Few Local Supermarkets

Nearly all our food savings from Costco come from just a few items. On most foods, especially fresh foods, the warehouse can’t beat the prices at our area supermarkets. Even if their regular prices are higher than Costco’s, we can always wait for a sale.

However, in some areas — especially rural areas — there are no big supermarkets. The main food sellers are local grocery stores and convenience stores with high prices and few great sales. If you live in an area like this, the regular prices at warehouse stores look a lot more appealing. 

A Convenient Location

Finally, location matters. If the nearest warehouse store is 50 miles away, it isn’t practical to shop there more than once or twice per year. That hardly gives you a chance to get your money’s worth out of your membership. Plus, the cost of gas will eat into your savings. 

But if the distance to the store is less than 10 miles, regular trips become practical. You can visit every few weeks to stock up on everything you need. 

Factors Affect Choice

Avoiding the Pitfalls

If you decide to invest in a warehouse club membership — or you already have one — use it wisely. To get the most for your money, maximize the benefits of warehouse shopping and minimize the drawbacks.

Don’t Give In to Temptation

Impulse buys are one of the biggest hazards of the warehouse store. This can happen at the supermarket too, but Costco and Sam’s Club have a much wider array of shiny toys to tempt you. 

However, you can avoid them the same way you would in any other store. Make a shopping list and stick to it. If you see something that looks irresistible, don’t stick it right in your cart. Instead,  jot down the item and the price and walk away. 

The next day, take another look at your note. If you still want the item, you can go back to the store and get it. But chances are, by the time you’ve had 24 hours to cool off, the new toy will have lost a lot of its appeal.

Check Unit Prices

Warehouse stores don’t always beat the supermarket on price. However, comparing prices is tricky because the containers at the warehouse store tend to be so much larger. 

To be sure you’re getting a good deal, compare unit prices. That’s the cost per ounce, quart, or whatever unit the product is measured in. 

Some stores have the unit prices of different products marked on the shelf. However, if your warehouse store doesn’t, it’s easy to calculate. Just whip out your phone and divide the total price by the container size. 

Then compare this number to the price you’re used to paying at your regular store. It helps to keep a grocery price book that lists each store’s unit prices for items you buy often. That way you don’t have to try to remember one number while staring at another.

Don’t Overbuy

When you compare unit prices, the biggest container often looks like the best deal. However, a five-gallon tub of mayonnaise is no bargain if it goes bad before you use it up. 

If you’re buying something with an unlimited shelf life, such as shampoo, then buying by the case is no problem. But when you’re shopping in the food department, try to be realistic. Go for a size you can handle, even if the unit price is a bit higher.

Focus on the Best Deals

It’s tempting to take advantage of the warehouse’s store’s variety and do all your shopping in one trip. But if you do this, you’re almost sure to overpay for something. To get the most bang for your buck, focus on the items that are great deals at your particular store. 

This goes double when you’re shopping for a big-ticket item, such as jewelry or electronics. Don’t assume the warehouse store’s prices are lowest. Take the time to shop around and look for the best deal.

Focus Best Deals

Final Word

A single visit may not be enough to figure out whether a warehouse club membership is a good deal for you. If you’re still on the fence, try signing up on a trial basis. 

From time to time, BJ’s Wholesale Club offers a free 90-day membership to give shoppers a chance to get to know the store. Keep your eyes out for these offers in your mailbox and in coupon circulars.

If you don’t want to wait, try BJ’s discounted membership offer. It gives you all the benefits of membership for $25 — less than half the regular price. It’s not free, but it’s a chance to try the store without risking the full $55.

Moreover, all three warehouse chains — BJ’s, Costco, and Sam’s Club — promise a full refund of your membership fees at any time if you’re not satisfied. You can give any of these stores a try for a month or two, then cancel if you decide it’s not for you.

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Amy Livingston is a freelance writer who can actually answer yes to the question, “And from that you make a living?” She has written about personal finance and shopping strategies for a variety of publications, including ConsumerSearch.com, ShopSmart.com, and the Dollar Stretcher newsletter. She also maintains a personal blog, Ecofrugal Living, on ways to save money and live green at the same time.

Source: moneycrashers.com

5 Mortgage REITs for Yield-Hungry Investors

In the search for rich dividend yields, mortgage REITs (mREITs) are in a class all their own. 

These are companies are structured as real estate investment trusts (REITs), but they own interest-bearing assets like mortgages and mortgage-backed securities rather than physical real estate.

One of the biggest reasons to own mortgage REITs is their exceptional yields, currently averaging around 8% to 9%, according to Nareit – the leading global producer on REIT investment research – more than four times the yield available on the S&P 500. These outsized yields are enticing, but investors should approach these stocks with caution and hold them only as one part of a larger, more diversified portfolio. 

One reason for this is their sensitivity to changes in interest rates. When interest rates rise, mortgage REIT earnings generally decline. The Federal Reserve is signaling plans for multiple rate hikes in 2022 that could create headwinds for these stocks.   

And increasing interest rates hurt mREITs because these businesses borrow money to fund their operations. Their borrowing costs rise with interest rates, but the interest payments they collect from mortgages remain the same, causing profit margins to compress. Some of this risk can be managed with hedging tools, but mortgage REITs can’t eliminate interest-rate risk altogether.  

Another caveat is that mortgage REITs frequently cut dividends when times are tough. During the height of the COVID-19 pandemic in 2020, 30 of this sector’s 40 companies either cut or suspended dividends. On the flip side, dividends were quickly restored in 2021, with 20 mREITs raising dividends.

We searched the mortgage REIT universe for stocks whose dividends appear safe this year.

Read on as we explore five of the best mREITs for 2022. A few of these REITs are reducing interest-rate risk via acquisitions or an unusual lending focus, while others have strong balance sheets or outstanding track records for raising dividends. And all of them offer exceptional yields for investors.

Data is as of Jan. 12. Dividend yields are calculated by annualizing the most recent payout and dividing by the share price. Stocks are listed in order of lowest to highest dividend yield.

1 of 5

Hannon Armstrong Sustainable Infrastructure Capital

green investing conceptgreen investing concept
  • Market value: $4.1 billion
  • Dividend yield: 2.9%

Hannon Armstrong Sustainable Infrastructure Capital (HASI, $48.56) is a bit of an oddball for a mortgage REIT in that it specializes in clean energy and infrastructure rather than pure real estate. Specifically, the real estate investment trust invests in wind, solar, storage, energy efficiency and environmental remediation projects – making it not only one of the best mREITs, but also one of the best green energy stocks to own.

Its loan portfolio encompasses 260 projects and is valued at $3.2 billion. In addition to its own loans, Hannon Armstrong manages roughly $8 billion of other assets, mainly for public sector clients.   

This mREIT boasts a $3 billion pipeline and is ideally positioned to capture some portion of the spending from the $1.2 trillion infrastructure bill that was passed by Congress in late 2021.  

Over the last three years, Hannon Armstrong has generated 7% annual earnings per share (EPS) gains and 1% yearly dividend growth. Over the next three years, HASI is targeting accelerated gains of 7% to 10% yearly earnings per share growth and 3% to 5% in dividend hikes. Future earnings growth should be enhanced by the firm’s prudent 1.6 times debt-to-equity ratio.

Hannon Armstrong produced exceptional September-quarter results, showing 45% year-over-year loan portfolio growth and a 14% increase in distributable earnings per share. 

Analysts expect earnings of $1.83 per share this year and $1.91 per share next year – more than enough to cover the REIT’s $1.40 per share annual dividend.

HASI is well-liked by Wall Street analysts, with five of the six that are tracking the stock calling it a Buy or Strong Buy. 

2 of 5

Starwood Property Trust

little red house surrounded by little white houseslittle red house surrounded by little white houses
  • Market value: $7.7 billion
  • Dividend yield: 7.6%

Starwood Property Trust (STWD, $25.44) has a $21 billion loan portfolio, making it the largest mortgage REIT in the U.S. The company is affiliated with Starwood Capital Group, one of the world’s biggest private investment firms. 

STWD is considered a mortgage real estate investment trust, but it operates more like a hybrid by owning physical properties as well as mortgages and real estate securities. Its portfolio comprises 61% commercial loans, but the REIT also has sizable footholds in residential loans (11%), properties (12%) and infrastructure lending (9%), a relatively new focus for the company.

The mREIT benefits from access to the databases of Starwood Capital Group, which makes over $100 billion in real estate transactions annually and has a portfolio consisting of 96% floating-rate debt. This high percentage of floating-rate debt and unusually short loan durations – averaging just 3.3 years – minimizes Starwood’s risk from rising interest rates. 

STWD is also one of the nation’s largest servicers of commercial mortgage-backed securities (CMBS) loans; sizable, reliable loan servicing fees help mitigate risk if loan credit quality deteriorates.

Starwood Property Trust closed $3.8 billion of new loans during the September quarter and generated distributable earnings of 52 cents per share – up sequentially from June and slightly above analysts’ consensus estimate. After the September quarter closed, the mREIT booked a huge $1.1 billion gain on the sale of a 20% stake in an affordable housing real estate portfolio.   

The company has made 12 consecutive years of quarterly dividend payments, and unlike many other mortgage REITs, held its ground in 2020 by maintaining an unchanged dividend.

Of the seven Wall Street pros following STWD, one says it’s a Strong Buy, five call it a Buy and just one says Hold. Adding fuel to the bullish fire, CNBC analyst Jon Najarian recently tapped Starwood as one of his top stocks to watch, given its impressive 7.6% dividend yield.

3 of 5

Arbor Realty Trust

mortgage-backed securities conceptmortgage-backed securities concept
  • Market value: $2.8 billion
  • Dividend yield: 7.7%

Arbor Realty Trust (ABR, $18.70) stands out as one of the best mREITS given its six straight quarters of dividend hikes and a compound annual growth rate (CAGR) of nearly 18% for dividend growth over the past five years. 

What’s more, Arbor Realty Trust has delivered 10 straight years of dividend growth while maintaining the industry’s lowest dividend payout rate.

This mortgage REIT is able to steadily grow dividends thanks to the diversity of its operating platform, which generates income from agency and non-agency loans, physical real estate (including rentals) and servicing fees.

Agency loan originations and the servicing portfolio have grown at a 16% CAGR over five years. And during the first nine months of 2021, Arbor Realty Trust set a new record with balance sheet loan originations, coming in at $7.2 billion – 2.5 times its previous record. Loan volume rose 45% over its previous record to total $13.2 billion over the nine-month period.

While September EPS declined year-over-year due to a reduced contribution from equity affiliates, earnings for the first nine months of the year were up 164% from the year prior to $1.56 per share.

Arbor Realty Trust earns Buy ratings from two of the three Wall Street analysts following the stock, and Zacks Research recently named ABR one of its top income picks for 2022. 

Valued at only 10 times forward earnings – which is 15.4% below industry peers – ABR shares appear bargain-priced at the moment.   

4 of 5

MFA Financial

person looking for business loan on laptopperson looking for business loan on laptop
  • Market value: $2.1 billion
  • Dividend yield: 8.2%

MFA Financial (MFA, $4.68) just closed an impactful acquisition that reduces its exposure to interest-rate changes and accelerates loan growth. This REIT was already hedging its bets by investing in both agency and non-agency mortgage securities. 

Agency securities are guaranteed by the U.S. government and tend to be safer, lower-yielding and more sensitive to interest rates than non-agency securities. By combining these in one portfolio, MFA Financial generates nice returns while reducing the impact of changes in interest rates and prepayments on the portfolio. 

Through the July acquisition of Lima One, MFA Financial becomes a major player in business purpose lending (BPL), an attractive niche comprised of fix-and-flip, construction, multi-family and single-family rental loans. 

An aging U.S. housing stock is creating demand for real estate renovations and causing BPL to soar. BPL loans are good quality and high-yielding, but difficult to source in the marketplace. With the purchase of Lima One, MFA Financial gains a $1.1 billion BPL loan-servicing portfolio and an established national franchise for originating these types of loans. 

Lima One’s impact was apparent in MFA Financial’s September-quarter results. The REIT originated $2.0 billion of loans, the highest quarterly total on record, and grew its portfolio by $1.5 billion after runoff. 

Net interest income increased 15% on a sequential basis, and gains recorded on the Lima One purchase contributed 10 cents to the mREIT’s earnings of 28 cents per share. MFA Financial also took advantage of the strong housing market to sell 151 properties, booking a $7.3 million gain on the sale. MFA’s book value – the difference between the total value of a company’s assets and its outstanding liabilities – rose 4% sequentially to $4.82 per share, a modest 3% premium to its current share price.

Raymond James analyst Stephen Laws upgraded MFA to Outperform from Market Perform – the equivalents of Buy and Hold, respectively – in December. He thinks the Lima One acquisition will accelerate loan growth and reduce the mortgage REIT’s borrowing costs.

MFA Financial has a 22-year track record of paying dividends. While payments were reduced in 2020, the REIT recently signaled improving prospects with a 10% dividend hike in late 2021.

5 of 5

Broadmark Realty Capital

real estate contract with keys and penreal estate contract with keys and pen
  • Market value: $1.3 billion
  • Dividend yield: 8.6%

Broadmark Realty Capital (BRMK, $9.77) is unusual for its zero-debt balance sheet, robust loan origination volume and sizable monthly dividends. This mortgage REIT provides short to mid-term loans for commercial construction and real estate development that are less interest-rate sensitive. As such, BRMK is a solid play on America’s housing boom.  

Lending activities focus on states with favorable demographics and lending laws. Plus, 60% of its business comes from repeat customers, ensuring low loan acquisition costs.

Broadmark Realty Capital achieved record loan origination volume of $337 million during the September quarter, roughly twice prior-year levels and up 68% sequentially. The overall portfolio grew to $1.5 billion. Broadmark Realty Capital also originated its first loans in Nevada and Minnesota, with expansion into additional states planned during the December quarter. 

Despite rising revenues and distributable EPS, Broadmark Realty’s results came in slightly below analyst estimates and its share price declined in reaction. However, this price slip may present an opportunity to pick up one of the best mREITs at a discount. At present, BRMK shares trade at just 12.7 times forward earnings and 1.1 times book value – the latter of which is a 15% discount to industry peers.

The mortgage REIT cut its dividend in 2020, but continued to make monthly payments to shareholders. And in 2021, it raised its dividend 17% in early 2021. While dividend payout currently exceeds 100% of fiscal 2021 earnings, analysts are forecasting a 17% rise in fiscal 2022, which would comfortably cover the current 84 cents per share annual dividend.     

Source: kiplinger.com

Best Online Life Insurance Companies for 2022

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Additional Resources

In the old days, applying for life insurance was tedious, time-consuming, and stressful. The process took weeks to complete, much of that spent waiting on the results of a medical exam. And you didn’t know how much your policy would cost until everything was said and done — or even if you’d qualify for a policy at all.

Fortunately, the old days are over, at least for life insurance applicants who apply online. Also known as algorithmic underwriters or algorithmic insurance companies, online life insurance companies give you an up-or-down decision within minutes, often without a medical exam or many questions about your medical history. You can apply over lunch or dinner and then get on with life.

Best Online Life Insurance Companies

Not all online life insurance companies are created equal, of course. These are among the very best.

Each of the companies on this list does at least one thing really well, and our top pick offers the best overall value for the widest number of potential applicants. Here’s what you need to know about each.

Best Overall: Ladder

Ladder Life Insurance Logo

Ladder is one of the best life insurance companies. It tops our list of the best online life insurance companies thanks to a potent collection of strengths:

  • Up to $3 million in term life insurance coverage without a medical exam — double what most competitors allow
  • In-home medical exams for policies larger than $3 million — the application process remains all-online otherwise
  • Choose from 10- to 30-year term coverage options
  • Option to scale down coverage over time without reapplying
  • Approval within minutes for many applicants
  • Backed by national insurers with strong financial strength ratings

Best for Fast Approval: Bestow

Bestow Life Insurance Logo

Bestow earns its spot as one of the best no-exam life insurance companies thanks to a streamlined digital application and underwriting process that produces results in as little as five minutes. If Bestow doesn’t need any additional information from you, you can apply for life insurance and get an up-or-down approval decision during your coffee break.

Its features include:

  • Term life insurance only
  • Term lengths from 10 to 30 years
  • Policy death benefits as low as $50,000
  • Coverage up to $1.5 million per policy with no medical exam required
  • Open to applicants ages 18 to 60
  • A+ (Superior) financial strength rating from A.M. Best

Best Premium Membership Rider: Haven Life

Haven Life Logo 1

Haven Life is one of the best online term life insurance companies around, but it really shines for a reason that’s not directly related to insurance. Haven Life offers the best premium membership rider — an optional add-on filled with potentially valuable features.

That rider is Haven Life Plus. It’s free to policyholders wherever it’s offered and provides at least $150 in annual value to policyholders. It includes:

  • A customizable and legally binding will that you can store online
  • A subscription to Adaptiv, a workout video and music library
  • A subscription to Timeshifter, an app designed to fight jet lag
  • A subscription to Lifesuite, a secure digital storage vault
  • A 15% discount on eligible MinuteClinic products and services

Haven Life has some additional features worth noting, including:

  • Term life coverage up to $3 million with a medical exam
  • No-exam coverage up to $500,000 through Haven Simple
  • AgeUp, an annuity product that can supplement your retirement income after you turn 90

Best for Nontraditional Underwriting: Sproutt

Sproutt Life Insurance Logo

Sproutt is an online life insurance broker that uses an innovative model called the Quality of Life Index (QL Index) to assess life insurance applicants’ risk. 

While it doesn’t completely replace traditional considerations in Sproutt’s application process — or in the underwriting processes of the insurers Sproutt works with — the QL Index goes beyond the usual medical and lifestyle information to consider factors like:

  • How often you exercise and what kind of exercise you do
  • How much and how well you sleep
  • Your emotional health
  • Your eating habits and overall nutrition
  • Your work-life balance

Additional features:

  • Access to fully medically underwritten term life, no-exam life (simple issue life insurance), and guaranteed issue life insurance
  • Multiple types of permanent life insurance available, including whole, universal, and variable universal
  • Get quotes within minutes
  • Apply directly with the insurer with help from Sproutt agents 

Best for Guaranteed Issue Life Insurance: Ethos

Ethos Life Insurance Logo

Ethos is rare among online life insurance companies because it offers permanent life insurance. Most competitors stick with term life.

Ethos’ permanent life insurance offering is a low-value whole life insurance policy for people between the ages of 66 and 85. Its features include:

  • Death benefit between $1,000 and $30,000
  • Guaranteed issue life insurance, meaning you can’t be turned down for medical reasons
  • No expiration, meaning the policy is effective until you die or stop paying premiums
  • Guaranteed level premiums, meaning your premiums won’t increase over time
  • Accidental death is covered right away
  • Nonaccidental death coverage kicks in two to three years after the policy effective date in most cases

Ethos’s term life offering is no slouch either. Its benefits include:

  • Amount of coverage ranges from $20,000 to $1.5 million
  • 10- to 30-year terms
  • Guaranteed renewable after the term ends, albeit at a higher premium

Best for Higher Coverage Limits: Fabric

Fabric Life Insurance

Fabric offers online life insurance policies with coverage up to $5 million. That’s an unusually high limit for a streamlined, all-online application process. And Fabric offers a no-exam option for applicants with uncomplicated health histories, although not up to the $5 million coverage limit.

Additional features:

  • Accidental death coverage available up to $500,000
  • A+ (Superior) financial strength rating
  • Low pricing, with monthly rates starting as low as $1 for $1 million in coverage
  • Will-making services available
  • Secure online vault for financial and personal documents at no additional cost

Best for Price Transparency: Walnut

Walnut Life Insurance Logo

Walnut sets itself apart with what it calls “price-first” term life insurance. Basically, you know how much you’ll pay for 10-year term coverage before you apply, making it easier to fit a new monthly payment into your budget (or decide to go a different direction). You never have to take a medical exam as a condition of coverage.

Walnut also offers a broad lineup of value-adds through a premium membership program included in the cost of insurance. Starting at $10 per month, this includes subscriptions to:

  • Headspace Plus, an app offering guided meditation and self-directed therapy
  • ClassPass Digital, a library of home workout videos
  • Dashlane Premium, a password manager and auto-fill app

According to Walnut, this package is a $25 monthly value. If you want even more, upgrade to a Digital Protection membership for an additional monthly fee and enjoy:

  • 24/7 access to a cyber support helpline
  • Up to $1 million in stolen funds reimbursement if you’re the victim of identity theft

Best Online Broker for Life Insurance Only: Quotacy

Quotacy Life Insurance

Quotacy is an online insurance broker specializing in life insurance quotes. In fact, a life insurance quote is the only type of insurance quote you can get through Quotacy. 

Quotacy’s narrow focus on life insurance gives it some advantages over other online insurance brokers:

  • Access to term life policies as long as 40 years — elsewhere, policies generally top out at 30 years
  • Access to a variety of types of life insurance, including term life
  • Multiple permanent life insurance options, including whole life policies and universal life policies
  • A five-minute, all-online quote creation process
  • Dedicated agents who understand life insurance
  • A vast insurer network that ensures competitive life insurance rates

Best Online Broker for Other Policy Types and Bundles: Policygenius

Policygenius Logo

Policygenius is an all-purpose online insurance quote aggregator. Unlike Quotacy, it focuses on a variety of different types of insurance, including: 

If you’re shopping for more than one type of insurance right now, Policygenius is your best choice for fast answers. And if you’re paired with a life insurance provider that offers other types of insurance too, there’s a good chance Policygenius can hook you up with a money-saving bundle discount. 


Methodology: How We Select the Best Online Life Insurance Companies

We use several criteria to evaluate online life insurance companies and select the very best for our readers. Some relate to the application process or policy underwriting, while others speak to the overall user experience and quality of the insurers themselves.

Financial Strength and Customer Satisfaction

Third-party financial strength ratings assess insurers’ ability to pay out death benefits in the future. When possible, we use ratings from A.M. Best, a highly respected rating agency that specializes in the insurance industry.

Customer satisfaction is another important measure of insurer quality. The top authority for customer satisfaction ratings in this industry is J.D. Power, which ranks life insurance companies and life insurance products annually.

Policy Types Available

Many online life insurance companies offer term life insurance only. Those insurers that also offer permanent life insurance coverage generally require medical underwriting for it, lengthening the application process.

That said, if you prefer to have both options available when you apply, you’ll want to focus your attention on insurers that can accommodate.

Term Options

Online term life insurance policies typically range from 10 to 30 years. Some insurers offer shorter-term policies, down to five or even two years. 

Unless otherwise specified in the terms of the policy, you can renew your policy once the initial term expires. However, this may require another round of underwriting and will definitely involve a higher premium.

No-Medical-Exam Options

One of the core benefits of online life insurance is the seamless application process. This process is helped along in many cases by a lack of medical underwriting. 

The insurer might ask some basic questions about your personal and family medical history and lifestyle. It’ll check your answers against your health records as well. But it won’t require you to undergo a medical exam as a condition of coverage.

No-medical-exam coverage costs more than fully medically underwritten coverage because it provides less information about your risk of premature death. However, this is a price many would-be policyholders are willing to pay, especially if they have reason to believe a medical exam would turn up health-related red flags.

The best insurers for no-exam coverage have high coverage limits — above $1 million — and terms of at least 20 years for younger and middle-aged applicants.

Coverage Amount (Death Benefit)

Online life insurance death benefits typically range from as low as $25,000 to $50,000 for final expenses insurance to upwards of $1.5 million. If you have higher life insurance needs, look to an insurer that can accommodate — Haven Life’s coverage amounts range up to $3 million, for example.

Policy Add-ons (Riders)

Many online life insurance companies offer policy add-ons, also known as riders. Some of the most common include:

  • Return of premium riders, which reimburse the policyholder for premiums paid during the policy term
  • Accelerated death benefit, which allows terminally ill policyholders to claim a portion of the death benefit before they die
  • Accidental death rider, which pays out an additional death benefit if the policyholder dies in an accident covered by the rider

Online Life Insurance FAQs

You have questions about getting life insurance online. We have answers.

Do You Need to Get a Medical Exam When You Apply for Life Insurance Online?

Often, no. If you’re applying for a life insurance policy worth less than $500,000, you probably won’t have to get a medical exam if you don’t want to. Many insurers offer no-medical-exam coverage as high as $1 million or $1.5 million, and a few go higher still — up to $2 million or $3 million.

That said, if your top concern is paying as little as possible for coverage and you have no known health issues, opt for the medical exam. As long as the exam doesn’t raise any red flags about your health, you’ll pay less for a policy that requires one.

How Much Does Online Life Insurance Cost?

How much you pay for an online life insurance policy depends on a number of factors:

  • The policy value — coverage amount or death benefit
  • The policy term — the longer the term, the higher the premium
  • The type of policy — term life is always cheaper than permanent life
  • Your personal medical history
  • Your family medical history
  • The results of your life insurance medical exam if you take one
  • Your age when you apply
  • Your lifestyle, including whether you use or have ever used tobacco and whether you have any risky hobbies

The best way to estimate your life insurance cost is to use an online quote aggregator like Policygenius or Quotacy. 

What Do You Need to Apply for Life Insurance Online?

To apply for life insurance online, you’ll need some or all of the following:

  • A good idea of how much life insurance you need
  • Basic personal information, like your address and Social Security number
  • Basic financial information, such as your annual income
  • Your height and weight
  • Your recent medical history
  • Information about your lifestyle and personal habits

If required, you’ll need to take a medical exam in the days or weeks after you send in your initial application for coverage. Many insurers offer in-home exams, but some ask you to visit a testing facility. 

You’ll also need to give your consent for the insurer to pull your Medical Information Bureau file. This file contains important information about your medical history and previous insurance applications, helping would-be insurers check the information you provide on your application against the public record.  

Is Life Insurance Worth It?

Often, yes. One of the most harmful myths about life insurance is that only certain people need it, such as parents of young children or people with lots of debt. In fact, there are many reasons to buy life insurance:

  • Covering final expenses, such as funeral and burial costs
  • Preventing major debts from passing to a surviving spouse or partner
  • Covering higher costs borne by survivors, such as child care and health insurance
  • Covering future education expenses for your children
  • Protecting your business partners’ financial interests
  • Maintaining your survivors’ standard of living
  • Creating a store of cash value that you can borrow against during your lifetime

Chances are, at least one of these reasons applies to you. And if that’s the case, some form of life insurance is probably worth it.


How to Choose the Best Online Life Insurance Company

These are the best online life insurance companies on the market right now, but that doesn’t mean they’re interchangeable. The best choice for your life insurance needs might not be the best choice for your neighbor — or even your spouse.

To choose the best online life insurer for you, think about why you’re applying for life insurance in the first place.

Do you want an affordable term life policy that lasts until you pay off your house in 15 years? Do you want to make sure your future kids’ college education is paid for, 20 or 25 years down the road? Do you want a policy that lasts indefinitely, creating a cash value reserve that you can tap as you age and possibly establishing generational wealth for your heirs?

Likewise, think about what you want out of your relationship with your insurer, beginning with the application process. Are you willing to pay more to forgo medical underwriting? Or do you prefer a seamless, super-fast application process that produces an answer — and an active policy — within minutes?

It’s your call. Fortunately, you can’t go wrong with any of the options on this list.

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Brian Martucci writes about credit cards, banking, insurance, travel, and more. When he’s not investigating time- and money-saving strategies for Money Crashers readers, you can find him exploring his favorite trails or sampling a new cuisine. Reach him on Twitter @Brian_Martucci.

Source: moneycrashers.com

Average Directional Index (ADX) Explained

The Average Directional Movement Index, or ADX, is an indicator used in technical analysis to help determine the strength of a pricing trend. The indicator was developed by Welles Wilder as part of his Directional Movement System for commodity trading. Since then it has been used for other tradeable investments such as stocks, exchange-traded funds (ETFs), and foreign currency.

The ADX can help investors understand when to buy and sell positions. Here’s a closer look at what ADX is, how to calculate it, and the role it plays in making investment decisions.

What is ADX?

ADX shows an average of price range values that indicate expansion or contraction of prices over time — typically a period of 14 days, but, in some cases it may be calculated for shorter or longer periods as well. Shorter periods may respond quicker to pricing movements but may also have more false signals. Longer periods tend to generate fewer false signals but may cause the indicator to lag the market.

The Average Directional Index is part of Wilder’s Directional Movement System, which attempts to measure the strength of pricing trends in both the positive and negative directions, by using DMI+ and DMI- indicators. The DMI+ indicates positive directional movement, and the DMI- indicates negative directional movement. ADX is calculated as the sum of the differences between DMI+ and DMI- over time. These three indicators are often charted together.

ADX Formula

Calculating the Average Directional Index on your own is a bit complex; it requires a series of calculations to be carried out in a specific order. Luckily, you probably won’t ever have to do it yourself — instead take a look at advanced chart settings for publicly available stock charts on websites like the Wall Street Journal . There is often an option to add an ADX or DMI overlay to the chart.

For those who are curious, here’s a look at the formulas required to calculate ADX:

+DI = (Smoothed +DM/ATR) X 100

-DI = (Smoothed -DM/ATR) X 100

DX= (|+DI – -DI|/|+DI + -DI|) X 100

ADX = ((Prior ADX X 13) + Current ADX))/14

Assumptions:

DM = Direction Movement

ATR = Average True Range

+DM = Current High – Previous High

-DM = Previous Low – Current Low

Smoothed +/- DM = ∑14 t=1DM – ((∑14 t=1DM)/14) + CDM

CDM = Current DM

How to Interpret ADX Results

It’s possible that prices within a given market could be moving up or down within a given range without ever developing into a trend. The ADX is used first and foremost to determine whether or not an up or down trend exists in a market at all.

According to Wilder’s calculations, when ADX is above 25, it indicates a strong trend; when ADX is below 20, that indicates there is no trend.

Generally, analysts conclude that between 20 and 25 represents a bit of a gray area in which some say that a developing trend is possible. It’s also possible that prices are simply ranging back and forth rather than trending.

For those who follow ADX, an ADX between 25 and 50 may represent a moderate strength trend. A result of 50 to 100 indicates trends that are increasingly strong.

How to Read an ADX Chart

Identifying the direction of trends is relatively easy when looking at an ADX chart. A line that’s moving in the upward direction indicates a strengthening trend, while a line moving in the downward direction indicates weakening. The steeper the slope of the line, the stronger the trend.

When ADX turns down, it may be an indicator that a trend is ending, which could be an opportunity for investors to consider whether they want to continue holding a position. If ADX has been low for a period of time and begins to rise by four or five points, it may be a bullish indicator that investors should consider buying to take advantage of a potentially burgeoning trend.

Using ADX, +DMI, and -DMI in tandem can generate crossover signals that can help signal opportunities to buy or sell. For example, the +DMI line crossing above the -DMI line is a potential signal to buy when ADX is above 20.

Investors tend to use ADX in conjunction with other technical analysis indicators such as moving averages to help them analyze price movements.

ADX can be used as a momentum indicator that can signal potential reversals in trends. For example, if ADX and market price are moving in an upward trajectory together, that can indicate that prices are strongly trending higher. However, if ADX declines but prices continue to rise, it may be an indicator that the market is losing momentum and prices will turn down soon.

ADX Comparisons

ADX is related to some other indicators. Here’s a breakdown of similarities and differences.

ADX vs DMI

Like ADX, DMI can be used as an indicator to help determine if the price of a security is trending and how strong that trend is. DMI does not take the direction of the trend into account.

DMI can be positive or negative. Positive DMI, or +DMI, is the difference between a stock’s high price today and its high yesterday. Values from the previous 14 days are then added up.

Negative DMI, of -DMI is the difference between a stock’s low from today and its low price from yesterday. A sum is then taken for these values for the previous 14 days.

ADX is calculated as the sum of the difference between positive and negative DMI over time.

ADX vs the Aroon Indicator

The Aroon Indicator is made up of two indicators, the Aroon-Up and the Aroon-Down. Aroon-up reflects the number of days since the last 25-day high, while Aroon-Down represents the number of days since the 25-day low.

The Aroon Indicator is similar in many ways to ADX. It’s used to identify the beginning of a trend or changes to trends, and determine whether a trend exists or if prices are just fluctuating within a range. It can also help investors determine the strength of a trend.

Higher Aroon values indicate a trend, while low values represent a weakening or nonexistent trend.

Pros and Cons of Using ADX

Like any indicator, the ADX has benefits and limitations. Here’s a look at some of the pros and cons:

Pros Cons
Helps identify whether a trend exists or if prices are simply fluctuating within a given range. False trading signals can occur, for example when crossovers are happening too frequently, which can result in confusion as trades quickly shift direction.
Can indicate shifts in trends to help investors make buy and sell decisions.
When used in conjunction with +DMI and -DMI, investors can examine crossover signals to make buy and sell decisions.

The Takeaway

When using technical analysis to decide when to buy and sell investments, individuals may make use of a wide range of research and analytic tools, such as ADX, DMI, the Aroon Indicator, and other trend indicators.

For investors who prefer this type of hand-on approach, a SoFi Invest® brokerage account offers active investing. For others, who may prefer a more hands-off approach, SoFi Invest offers automated investing accounts — an automatically managed portfolio based on their risk tolerance and goals.

Find out how to get started with SoFi Invest.

Photo credit: iStock/Pekic


SoFi Invest®
The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . SoFi Invest refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
1) Automated Investing—The Automated Investing platform is owned by SoFi Wealth LLC, an SEC Registered Investment Advisor (“Sofi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (“Sofi Securities).

2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.

3) Cryptocurrency is offered by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.

For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, please visit www.sofi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform. Information related to lending products contained herein should not be construed as an offer or pre-qualification for any loan product offered by SoFi Lending Corp and/or its affiliates.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Third Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third party trademarks referenced herein are property of their respective owners.
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Source: sofi.com

The Real Cost of Impulsive Investing

Worried man watching stock drop as he makes an investing mistake
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It seems to happen every fall. The stock market is rolling right along, hitting new highs every week or so. And then by September or October something spooks the markets.

Investors who have been ignoring economic warning signs all year suddenly start paying attention. Sometimes when the S&P 500 drops by 5% or so, they make a snap judgment to sell, ignoring the double-digit gains it’s posted so far.

They rely on CNBC to guide their next move. They spend every waking minute agonizing over whether to hang on or bail out.

Millions of people invest this way, on impulse. They worry whenever there is any sign of market turbulence and give in to their fears and then get burned.

We’ve all seen this movie and know how it ends. And who benefits the most? The huge institutional traders on Wall Street.

They profit by capitalizing on the impulsive behavior of Main Street investors. Motivated by the twin fears of “I can’t afford to lose” and “I don’t want to lose out,” these investors routinely buy high and sell low.

And Wall Street cashes in by selling high and buying low. Time after time, year after year.

The inevitable results of these David vs. Goliath trading interactions are so predictable that Wall Street has a euphemism for it: exploiting market inefficiencies. The big traders can predict with razor-sharp precision when regular investors will give in to their fears or greed.

Their analysts get access to the information they need to buy or sell shares of stock at the best price long before this same information percolates down to regular investors.

Here is how to understand and avoid self-defeating behavior.

Self-defeating behavior

Upset senior on a laptop
fizkes / Shutterstock.com

Emotions are the enemy of investing. When you’re plagued by doubt, you’re more likely to embrace certain thought patterns or superstitions that result in bad decisions. When you’re emotionally biased, you’re less willing to listen to views that could keep you from going down with the ship.

Psychologists have developed a whole field of study to identify these kinds of self-defeating thought processes: behavioral finance.

Numerous studies have shown that anxious investors often see and react to trading patterns that don’t really exist. They develop biases that aren’t easily shaken. And they fail to see the financial forest for the trees.

While hundreds of these behaviors have been researched and catalogued, there are a few that even the most experienced investors will recognize as applying to themselves at one time or another.

Loss aversion

Worried man holds up hands in a stop or halt motion
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Research has shown that investors are much more upset when their portfolio has dropped 5% in value than they are happy when it rises by 10%.

They’re more likely to hold on to a stock whose price is falling in the hope that it will bounce back. And they’re much more likely to sell a stock whose price has risen long before it’s reached its peak.

Framing

Woman with picture frame
pathdoc / Shutterstock.com

Even though we consciously understand that a diversified portfolio helps to offset the falling price of one stock with the rising value of another, we still tend to obsess on the outsized profits or losses of individual stocks, regardless of how little overall impact one security has on our portfolio as a whole.

Anchoring

An investor panics over a market crash
Gearstd / Shutterstock.com

The way certain kinds of information are presented can influence our thinking. For example, when the stock market drops by 10% or more, the media has conditioned us into thinking of it as a market correction, with all of its associated doomsday fearmongering.

But that 10% is just an arbitrary numerical signpost that is no better at predicting a bear market than a 5% drop.

Availability bias

An older man scratches his head and wrinkles his nose while thinking
Aaron Amat / Shutterstock.com

People who have experienced a recent major event tend to believe that a similar event will occur when certain situations preceding the event have occurred.

A good example is the belief that rising rates of COVID-19 infections are likely to trigger a major stock selloff similar to the three-month bear market of 2020.

Conservatism bias

Aaron Amat / Shutterstock.com

When investors have a strong belief in a certain company they’ve invested in, they tend to cling to their faith even when the company hits a bad patch. The fall of Enron in the early 2000s is a textbook example.

Even when news about the company’s scandals came to light, too many investors believed Enron would emerge unscathed — and ultimately lost their entire investment.

So how do you avoid financial misbehavior?

Monkey Business Images / Shutterstock.com

It’s critical to increase your financial self-awareness. Recognize the beliefs and fears that drive these behaviors and make a determined effort to think before you act.

Start by diagnosing your financial health. If you feel confident that you’re on track toward saving enough for retirement, your children’s higher education, or other goals, then you’ll be less likely to engage in behaviors that could derail your investment plan.

This can be difficult to do on your own, which is why you might want to seek out the services of a qualified, fee-only fiduciary financial planner.

This professional can help you address your fears, overcome your inertia, and conquer your biases by helping you figure out exactly where you are financially today and what you may need to get back on track. And if you hire them to manage your investment portfolio, you can sleep easier knowing that your financial future is in good hands.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Source: moneytalksnews.com

7 Low Cost, Non-Traditional Wedding Venues

If you’d like to avoid wedding debt and save on wedding expenses, you may want to consider getting married in a non-traditional wedding venue.

The post 7 Low Cost, Non-Traditional Wedding Venues appeared first on Bible Money Matters and was written by Melissa. Copyright © Bible Money Matters – please visit biblemoneymatters.com for more great content.

Source: biblemoneymatters.com