Education Column

Your education is your #1 asset. Benjamin Franklin once said: “Genius without education is like silver in the mine.” It doesn’t matter whether other people think you’re smart or not, education is what sharpens the mind and magnifies the innate skills you were born with.


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 Education 
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Congress Moves to Lower Interest Rates on Student Loans

UniversityAfter taking a lot of flak for doing nothing (I’m sure they took it to heart before they went on vacation), Congress has completed step two of lowering student loan interest rates last week. Prior to leaving for vacation, the Senate passed a bill that would tie interest rates to the yield on the 10-year US Treasury note on June 1st, plus 2.05%. Graduate students would pay the yield on the 10-Year T-Note plus 3.6%. This means that loans issued this Fall for undergraduates would have an interest rate of 3.86% while graduates would pay 5.41%. Undergraduate loan rates are capped at 8.25% and graduate loan rates capped at 9.5%.

The House had previously passed a bill 221-198 but after the Senate passed their bill, they had to reconcile and pass it again. This time the Bipartisan Student Loan Certainty Act of 2013 sailed through 392 to 31. The Senate bill passed 81-18. President Obama is expected to sign this bill into law.

I paid for college using Stafford Loans (and others) and benefited greatly from them. My rates were set at around 3% when I consolidated following graduation. I even got a deferment when I started graduate school again and eventually paid it off over the next few years. The difference between 3% and 6.8% is not difficult to see, it’s more than double. Having your interest payments double can be painful, especially when the average student loan debt is around $24,000 (which happens to be a little less than what I owed). At 6.8%, a 10-year $24,000 loan calls for a $276 monthly payment. Lower that to 3% and you’re talking only $231. A savings of $5300 over the life of the loan.

While this doesn’t do anything for folks who have loans right now, it does lower borrowing costs for future students.

Did you have student loans? Would doubling the interest rate have impacted your decision or ability to go to college?

(Credit: kevin dooley)

 Education 
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7 Things Every College Freshman Needs

CollegeFor many, attending college is a rite of passage. You head out into the great unknown, ready to take your life into your own hands. Without mom and dad looking over your shoulder, you can make your own decisions about how to spend your money, and what you want to eat each day.

I know I was excited about the prospect of college. I had most of what I needed when my parents drove me down, unloaded my stuff, and then took off. If you are getting ready to go to college for the first time, here are 7 things that you need:
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 Debt, Education 
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Where Can You Find Private Student Loans?

College GraduationWhen I went to graduate school at Syracuse University, I had a small scholarship, and federal student loans. However, even with these resources, I still didn’t have quite enough money to pay tuition for my Master’s program.

So I turned to a private student loan to supply the deficiency.

“After students have considered scholarships, grants and federal student loans, their next step is to find private student loans,” says Beatrice Schultz, a licensed College Planning Relief specialist and co-founder of Westface College Planning.

“Private loans come from many sources, including public banks, private group, or individual lenders,” she continues. “All will require a co-signer, ideally with good credit.”

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 Education 
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Could a 529 Plan Mess Up Your Child’s Financial Aid?

529 AccountAs you work to save up enough money to send your child to college, one of the tools at your disposal is the 529 plan.

This plan allows you to put money to work on behalf of your child. With a 529, money grows tax-free — as long as it is used for qualified education expenses.

But could the 529 be a little too effective? What happens if the account grows just enough that assets affect eligibility for financial aid? Depending on the situation, the 529 might be good enough to help out, but not quite enough to completely cover the costs. But if there is too much in the account, you could lose some of your  ability for the financial aid you need.

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 Education 
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Are there Downsides to Free Online Courses?

free online coursesOne of the great things about the Internet is that it offers you the chance to access a great deal of knowledge. In fact, it’s possible to learn a great deal from free online courses.

However, there are downsides to online courses. First of all, with free courses, you won’t earn college credit. So if you are interested in getting a degree with online courses, you will need to pay for the credits, and do the schoolwork.

But if you are just looking for your own edification, free online courses can help you boost your knowledge base. Even so, there are still downsides.

Natalie Novoa, the co-founder and CEO of tech startup Teachmeo, has been researching how to address some of the issues associated with online courses. “We have been researching the space for a while,” Novoa says, “and found that the disadvantages of a free online course are many.”

This is especially true if you are serious about your learning. Here are some of the issues Novoa believes are inherent to free online courses:
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 Education 
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Should You Continue Your Education with an Online Degree?

LaptopThere is a battle raging right now about the usefulness of a graduate degree, or even of any college degree at all. Joining the fray right now is the online degree space.

A number of colleges and universities offer online degree programs, and there are online schools completely in the Internet education space. My husband teaches online classes for Utah State University, and one of them is a graduate-level course mostly aimed at teachers working on their master’s degrees.

While my husband’s students find it useful to continue their educations online, since the master’s degree will come with a pay increase, not everyone is in the same boat.

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 Education 
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Could an Associate’s Degree be More Valuable than a Bachelor’s Degree?

College FundIn recent years, there has been discussion over whether a college education is worth it. Indeed, in some cases, it turns out that going for a graduate degree might not be worth the cost.

Recently, though, even the value of the bachelor’s degree is being called into question. In fact, a recent study from the Center for Education and the Workforce at Georgetown University indicates that an associate’s degree might be more valuable than a bachelor’s degree — at least at the outset.

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 Education 
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Fiscal Cliff Deal: Tax Benefits for Higher Education

College GirlsThe recent fiscal cliff deal has gotten a lot of play related to the tax increases. The fiscal cliff deal (which only addresses tax issues and not spending issues) didn’t stop the payroll tax cut from expiring, and it results in higher taxes for couples that are married filing jointly making $450,000 and singles making $400,000.

However, the news isn’t all higher taxes. The fiscal cliff tax deal also includes some tax breaks for higher education. If you are sending someone to college, here are some of the tax benefits that the fiscal cliff deal has in store for you:

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