Latest news with #BadCredit.org
Newsweek
22-07-2025
- Business
- Newsweek
Student Loans: Trump Admin Issues Update Impacting Millions of Borrowers
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. The Department of Education under President Donald Trump has suspended student loan forgiveness for borrowers enrolled in the Income-Based Repayment (IBR) plan. The pause impacts around 2 million borrowers seeking relief under one of the last remaining federal income-driven repayment options not blocked by legal challenges or court orders. System updates tied to related legal actions against other forgiveness plans have stalled processing for those reaching the end of their IBR payment terms, leaving borrowers in limbo as they await clarity on when forgiveness may resume. "Currently, IBR forgiveness is paused while our systems are updated," the Department said in an updated guidance earlier this month. "IBR forgiveness will resume once those updates are completed." "Student loan borrowers who anticipated that a portion of their loans would be wiped out are in panic mode," Erica Sandberg, Consumer Finance Expert at told Newsweek in part. Why It Matters The shift affects a federal student loan system serving more than 40 million Americans and carrying over $1.6 trillion in debt. Recent restructuring efforts and legal battles, such as the suspension of the Biden-era SAVE (Saving on a Valuable Education) plan, have triggered widespread confusion, bottlenecks, and delays in debt relief. The IBR suspension compounds uncertainty for borrowers relying on income-driven repayment as an attainable path to loan forgiveness. Meanwhile, Congress has enacted reforms through the "One Big Beautiful Bill Act," which eliminates most current repayment plans and rewrites the rules for future loan forgiveness. U.S. President Donald Trump answers questions while departing the White House on July 11, 2025 in Washington, DC. U.S. President Donald Trump answers questions while departing the White House on July 11, 2025 in Washington, To Know The Department of Education attributed the suspension to technical system updates, indirectly referencing recent federal court injunctions against the SAVE plan, which was introduced under former President Joe Biden. Although legal action has directly blocked SAVE, the Department extended the processing freeze to the IBR plan. IBR participants who have reached the forgiveness threshold—20 or 25 years of qualifying payments—are unable to have their balances canceled for now. "Student loan borrowers who anticipated that a portion of their loans would be wiped out are in panic mode," Erica Sandberg, Consumer Finance Expert at told Newsweek. "Formal forgiveness under all repayment plans except the Income-Based Repayment (IBR) plan have been blocked, at least for now." Borrowers may continue making payments (which could later be refunded after loan discharge) or request a forbearance to suspend payments until the Department lifts the pause. However, interest will accrue during forbearance periods, adding to borrowers' eventual repayment totals. The Department has not offered a definitive timeline for when IBR forgiveness processing will resume, leaving roughly 2 million Americans with limited relief options. The Trump administration's restructuring of federal student loan programs is accompanied by legislative changes from the "Big, Beautiful Bill," which consolidates repayment options and implements strict new borrowing caps. The approved bill also sets a maximum 30-year term for forgiveness under the future Repayment Assistance Plan (RAP). Existing plans—including IBR, PAYE, and ICR—will be eliminated for new borrowers starting July 1, 2026, and current participants will be transitioned by July 2028. The Biden-era SAVE plan, which offered a 5 percent payment cap for undergraduate loans, remains blocked in court. The Department of Education's staff layoffs and system modernization, along with continued litigation, have created major backlogs in loan servicing and income-driven repayment applications. Millions of borrowers had their repayments or forgiveness decisions delayed for months as paperwork stalled and communication faltered, leaving borrowers uncertain about next steps or eligibility for new programs. "The Trump administration wants to roll back most of the forgiveness policies, and they'll do everything they can—within the legal structure—to make that happen," Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek. "This is just another example of how they'll either force repayment or make forgiveness harder to access." Newsweek reached out to the Department of Education for comment via email. What People Are Saying Erica Sandberg, consumer finance expert at told Newsweek: "Anyone expecting that a portion of their obligations would be forgiven must now take the wait and hope approach. Student loan debt cancellation would have been available to people who had a remaining balance at the end of their repayment term, either 20 or 25 years depending on the origination date of their their loans. It was the light at the end of the tunnel." Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek: "This is going to be debilitating for many. Borrowers were expecting these loans to eventually be forgiven, and now they're facing even more uncertainty." Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek: "Unlike some of the forgiveness efforts introduced by the Biden administration, the income-based repayment plan was actually one congressionally approved that allows for forgiveness after a 20- or 25-year repayment term. There's a degree of shock in this, as many assumed this plan would be safe, even as other plans like SAVE were legally challenged. At this point, it's just suspended, but borrowers on the plan need to pay careful attention in the coming weeks to any developments." What Happens Next Borrowers affected by the IBR forgiveness pause are advised to monitor their loan servicer accounts, continue making payments if able, and consider seeking forbearance with careful consideration of interest accumulation. The Department of Education has not clarified when the system updates or forgiveness processing will resume. Meanwhile, the transition to the "Big, Beautiful Bill" repayment programs is expected over the next three years, and further legal developments could influence broader debt relief options for millions. "Removing loan forgiveness from the equation has devastated financially strapped borrowers," Sandberg said. "It's even worse for those who have already met the requirements for forgiveness. At this juncture, their plans to move forward with spending and saving must wait or be adjusted. As a protective measure, they'll have to build the payments back into their budget for the foreseeable future."
Business Insider
29-05-2025
- Business
- Business Insider
7 things smart people do now to get out of debt soon
If you're not earning a lot, getting out of debt may seem out of reach — but it's not impossible. From automating payment to deciding on a debt payoff strategy to avoiding extreme budgets, smart money moves can help you get out of debt soon, regardless of how much you earn. 1. Automate your debt payments Setting up automatic debt payments is a great first step to paying off debt. "Set up regular payments from your checking account right when you get paid to pay down your debt," says Bobbi Rebell, CFP and personal finance expert with "If the money goes to the debt first, you won't be able to spend it elsewhere." Next, work on increasing how much you can put toward debt. "Focus on freeing up more of your money so you can increase your debt payments," she continues. "Small modifications add up and can make a huge difference in not only paying down debt but preventing future debt that has a nasty habit of creeping up the minute we let our guard down." 2. Decide on a debt payoff strategy And you can't just decide to pay off debt. You need a strategy, experts say. "There are a few common approaches to paying off debt regardless of income: avalanche, snowball, and consolidation," says Sabino Vargas, CFP, Senior Financial Advisor at Vanguard. The avalanche method focuses on paying off debt with the highest interest rate first while making minimum payments on other debt, he explains. For the snowball method, you pay the debt with the smallest balance first while making minimum payments on the other debts. Once that debt is paid off, you reallocate payments to the next lowest balance, and so on. Debt consolidation might be an option for people with a significant amount of debt, and it could save on interest. "In this method, you combine multiple debts into a single loan, often with a lower interest rate, leaving you with one monthly payment to manage," Vargos says. 3. Be lazy. Yes, really! "One of the most powerful things you can do is to be lazy and do less," Rebell says. "What I mean by this is just don't motivate yourself to go out for coffee. Instead, make it at home or just skip it. Spot something you want on Instagram? Before you buy, tell yourself you will come back to it later, and you may. Or you may not." Another "lazy" tip that can help eliminate debt? Don't store your credit card numbers on your devices. "[This] will force you to make the effort to put in the numbers each time. And hopefully you will … take the lazy way out and just not bother!" Rebell says. 4. Avoid extreme budgeting Sure, sticking to a budget is one way to properly allocate money to paying down debt, but it won't work if that budget is too restrictive or extreme, which Rebell says could backfire. And that cliché about millennials not being able to afford to buy a house because of their penchant for avocado toast or fancy coffees? Not accurate, says Alex Moore, Vice President and Financial Advisor at Wealth Enhancement. "Skipping lattes or avocado toast alone isn't going to pay off your student loans," he says. "The average American spends $2,091 a year on eating out and $2,050 a year on entertainment. The math doesn't work out. "What will have an impact is tracking and being intentional with each dollar you spend. I prefer cash because it forces you to think about each purchase and decide if the spend is worth it," he says. "Sometimes you really do need a latte to get through the day, and that's OK." 5. Don't ignore the rest of your finances Even if your main focus is paying off debt, don't ignore the rest of your financial picture. First, pad your emergency fund so that next time an unexpected expense pops up, you won't be forced to put it on a credit card. "Three months of expenses is the typical number," Moore says. "Without that cushion, you'll end up accruing new debt as you pay off old debt. The emergency fund gives you some margin for error if an unexpected expense pops up, even if it's not mathematically the most effective use of the dollars. Reduce your spending and get your emergency fund set up first before you begin aggressively paying off the debt." It's also wise to balance debt payment with saving and investing. Vargos warns against forgetting about your employer-matched 401(k). "When it comes to saving and investing, continue to save toward your retirement plan so you can take advantage of your employer's match program and not leave money on the table," he notes. 6. Know your debt Assess the type of debt you have. If it's high-interest debt from credit cards or personal loans, focus on paying that off before investing or saving, since those high interest rates cause your debt balances to grow more quickly. "Take the time to understand the math of your debt. That means knowing how much you owe and the interest rate, aka the cost associated with that debt," Rebell says. And think about your debt's interest rate versus the rate of return on your investments. "If the projected rate of return is higher than the interest rate, consider allocating more money toward investments or saving in higher-yielding accounts," Vargos says. And when it comes to getting serious about paying off debt, high earners aren't immune. "When I encounter debt, it's typically with high-income, high-debt folks," Moore says. "For them, the challenge is accepting that they need to reduce their lifestyle. It's a bitter pill to swallow when your friends are going on expensive vacations and you're not. The process of paying off debt is as much psychological as it is numerical." 7. Know when it's time for professional help If you have more than $7,500 in unsecured debt (such as credit card debt, personal loans, and medical bills) and are feeling completely overwhelmed, you might consider a debt relief company. Debt relief companies provide a service called debt settlement, where they negotiate with your creditors to settle your debts for less than the amount you originally owed. Once enrolled in a debt relief program, you make one monthly deposit into a dedicated savings account where you build up funds for settlements. Each time the debt relief company negotiates a settlement with a creditor (and you've approved the terms), both the settlement amount and the debt relief company's fees are paid from your dedicated account. This process continues until all your enrolled debts are resolved, usually 24-48 months. Note that even though the debt relief company is negotiating with your creditors, it can't guarantee results. You don't pay the debt relief company fees for their services until they've negotiated a settlement and you've approved it. The process may damage your credit score — but not as much as bankruptcy.
Yahoo
23-05-2025
- Business
- Yahoo
5 Steps To Overcome Financial Overwhelm and Boost Your Confidence
Rising prices and financial pressure are pushing many to the brink. Across the country, people are juggling credit card debt, rising living costs and a nonstop stream of advice about what to do with their money. The result is growing confusion, mounting stress and falling financial confidence. A recent study by found that 90% of Americans report gaps in financial knowledge, and 52% feel overwhelmed by the sheer volume of advice. The issue isn't that people don't want to learn, it's overload. Erica Sandberg, consumer finance expert at pointed out that language is part of the problem, with terms like 'financial literacy' feeling inaccessible to many. 'Not knowing how to manage money or use credit effectively doesn't mean you're illiterate,' she said. 'Just that you don't have the information or tools yet.' Read More: Find Out: The study backs this up, with 60% of respondents saying they would engage more with programs using 'financial confidence' over 'financial literacy,' favoring simpler, more actionable language. For people who feel overwhelmed and unsure where to start, here are five ways to help build financial clarity and confidence. Instead of trying to tackle everything at once, start with the area that causes the most stress — whether that's credit card debt, budgeting or saving — to reduce the pressure. Breaking down the bigger picture into smaller, manageable chunks makes it easier to make a start and then stay focused. Forty-nine percent of Americans turn to family or friends for financial guidance, with only 37% consulting financial professionals, per While it can definitely be useful to get support and advice from loved ones, expert guidance can add clarity to complex financial situations. Read Next: 'Everyone makes mistakes,' said Sandberg. 'So don't be too hard on yourself when you make them — just assess what you did and make a commitment to change.' What matters most is what happens after something goes wrong. Recognizing the issue, understanding what led to it and using that insight to move forward with a clearer plan is what builds lasting financial confidence. One of the fastest ways to reduce financial stress is taking control of debt with a consistent, realistic plan. U.S. household debt rose by 167 billion to $18.20 trillion in Q1 2025, according to the Federal Reserve of New York, and for many, it's a major source of anxiety. Rather than switching between conflicting advice or chasing quick fixes, it helps to commit to a strategy that fits the current financial situation. Progress may be gradual, but consistency builds momentum and relieves stress over time. Financial education shouldn't start in crisis mode, and starting early helps build habits major decisions come up. For those already managing debt or struggling, it's not too late; they can start with practical, everyday skills and expand from there. 'You really do have power over your money, not the other way around,' Sandberg explained. 'Earning, saving, spending, investing, borrowing and repaying are all under your control.' More From GOBankingRates Surprising Items People Are Stocking Up On Before Tariff Pains Hit: Is It Smart? The Most Expensive Disney Merchandise Ever Sold -- and Who's Buying It Mark Cuban Says Trump's Executive Order To Lower Medication Costs Has a 'Real Shot' -- Here's Why Sources 'Why 90% of Americans Feel Financially Lost–And a Simple Fix That Could Help.' 'Erica Sandberg.' Federal Reserve Bank of New York, 'Household Debt and Credit Report (Q1 2025).' This article originally appeared on 5 Steps To Overcome Financial Overwhelm and Boost Your Confidence
Yahoo
12-04-2025
- Business
- Yahoo
Americans Are Ditching the 50/30/20 Budget: How They Actually Split Their Paychecks
The 50/30/20 budgeting rule has long been the gold standard. According to this budgeting rule of thumb, you should devote 50% of your after-tax income to needs, 30% to wants and 20% to savings. Check Out: Learn More: However, many Americans do not actually stick to this rule. A recent Talker Research and EarnIn survey of Americans who earn $75,000 a year or less found that the average respondent put 64% of their income toward needs, 16% toward wants and 16% toward savings. Here's why Americans are ditching the 50/30/20 budgeting rule — and why this might be a mistake. While the 50/30/20 budget may be a helpful guide, it won't work for everyone's budget. 'At the end of the day, you don't have to stick to any particular budgeting rules like the 50/30/20 rule, as long as you find a way of creating and managing a budget that works for you,' said Erika Kullberg, personal finance expert and founder of 'While that study shows some budgeters follow a similar, but different method than the 50/30/20, they could benefit from focusing more on saving and less on wants.' The biggest issue, however, is that many Americans are having to devote too much of their budgets to 'needs.' 'The key here is to lower those ongoing expenses that can weigh down your budget each month,' Kullberg said. 'Small things like shopping around for new car insurance quotes and canceling the bulk of your entertainment subscriptions can add up. You need to find ways to lower your essential spending so more money can go toward savings goals or paying off debt each month.' Bobbi Rebell, CFP and personal finance expert at agrees that devoting 64% of income to needs and less than 20% to savings is not ideal. 'The question for each person is: How do you define needs?' she said. 'It might make sense to go through and think about how they might redefine needs if they lost their job — would everything still stay in that 'needs' bucket? Could they pull just 4% into the savings bucket? If not, could they aim to do 1% more each month until they get to 20%?' However, Rebell acknowledges that the 50/30/20 budget may simply not be feasible for everyone. 'The split reflects the tough reality for many Americans in what is a very expensive inflationary environment,' she said. 'In other words, given the circumstances, this is just how it is for so many Americans who are trying so hard to make ends meet. 'It is also important to note that 16% in savings isn't that far off from a goal of 20%,' Rebell continued. 'The 'wants' is where this theoretical person is really cutting back, and it would be tough to ask them to cut back even more.' Read Next: If your goal is to get as close as possible to the 50/30/20 guidelines, there are some steps you can take to get there. 'There are two basic ways to approach it — redefine what goes in each bucket or increase income, because the 'wants' bucket is already below optimal,' Rebell said. 'It [might] make sense to reframe some needs. A good example might be a gym membership. We might define it as a 'need' because we want to stay in shape, but in reality we can exercise for free. 'The other way to move the needle is to increase income and dedicate that additional revenue to boosting savings first, and then increasing the amount dedicated to wants.' More From GOBankingRates 6 Used Luxury SUVs That Are a Good Investment for RetireesHow Far $750K Plus Social Security Goes in Retirement in Every US Region7 Overpriced Grocery Items Frugal People Should Quit Buying in 202525 Places To Buy a Home If You Want It To Gain Value This article originally appeared on Americans Are Ditching the 50/30/20 Budget: How They Actually Split Their Paychecks
Yahoo
12-04-2025
- Business
- Yahoo
Most Americans Making $75K or Less Have Overdue Bills: 2 Ways This Wrecks Your Finances
Keeping up with bills is challenging, and many Americans are falling behind. A recent Talker Research and EarnIn survey of Americans who earn $75,000 or less a year found that 55% have between one and four overdue bills during any given month. Find Out: Read Next: While having overdue bills may be the norm, this behavior has both short- and long-term consequences. Before skipping a payment, here's what you need to know about how this can affect your finances. Missing a bill payment can add to the amount of money that you owe in the form of added fees and additional interest. 'In the short term, you are going to be wasting money that you could be saving by paying late fees and potentially interest on those overdue bills,' said Bobbi Rebell, CFP and personal finance expert at 'In fact, some credit card companies increase your interest rate with a late bill.' It can also impact your mental health. 'Having constant overdue bills and feeling like you are playing catch-up takes a huge toll on mental health and may literally keep you up at night,' Rebell said. 'That's a terrible way to live.' Check Out: Having consistent overdue bills can negatively impact your credit score. 'Over the long term, not only can it severely impact your credit score, it can also drag down your ability to accomplish your financial goals,' Rebell said. 'Once a bill is more than 30 days overdue it can be reported to the credit agencies. That lower score will hurt your ability to get loans — including mortgages — and if you do get approved, it can mean you are getting less favorable terms.' When you have overdue bills, it can feel impossible to catch up, but with proper planning it's possible to get back on track. The first step is determining which bills to pay first. 'Understand that not all bills are of equal importance,' Rebell said. 'Take the time to go through them and understand the consequences of paying each of them late. For example, some bills do not have any financial consequences for 30, 60 and even 90 days. 'Some, like credit cards, have serious financial consequences in that if you don't pay on time, you not only get hit with late fees, you also will pay interest on the overdue amount, and usually on any current charges as well,' she continued. 'That's an expensive delay!' You also need to consider the impact of each unpaid bill. 'For example, paying a utility late could result in a loss of service at some point,' Rebell said. 'Use this information to prioritize which bills to pay if you have to make that decision.' Next, call your lender or providers and see if there is any room for negotiation. 'In some cases, for example with some medical bills, you can negotiate a lower balance or a deferred payment schedule,' Rebell said. 'Credit card companies will sometimes let you adjust the payment date, so be sure to ask. Also with some bills, such as mortgages, the due date may be the first of the month, but there is no penalty as long as you pay it by the 15th.' If you are consistently struggling with overdue bills, you may need to reassess your overall budget. 'That might mean cutting back on anything you can, even if it is just until you clear your bills,' Rebell said. 'It also might mean asking for a raise, if that is possible, or taking on some side hustle work to boost your income. At the end of the day, you have to make the math work by changing the numbers rather than just trying to keep up in an exhausting effort to pay unaffordable bills.' More From GOBankingRates 6 Used Luxury SUVs That Are a Good Investment for RetireesHow Far $750K Plus Social Security Goes in Retirement in Every US Region7 Overpriced Grocery Items Frugal People Should Quit Buying in 202525 Places To Buy a Home If You Want It To Gain Value This article originally appeared on Most Americans Making $75K or Less Have Overdue Bills: 2 Ways This Wrecks Your Finances
