Understanding The Difference Between Forbearance and Deferment

understanding-the-difference-between-forbearance-and-deferment

There is often confusion between federal student loan debt relief forbearance and deferment programs. Because both programs postpone scheduled payments debtor confuse them as the same program.

Deferment

In order to be eligible for deferment, a postponement of federal student loan payments, a debtor must be:

  • A full time student in a graduate or fellowship program
  • Enrolled at least half-time in an eligible post-secondary school.
  • In an approved disability rehabilitation program
  • On active duty in the service with the Army or National Guard

In most instances, a deferment request must be made to the loan servicer along with documentation proving eligibility has been met. For those students who have gone back to school at least halftime, the enrollment process will automatically place the loans in deferment. You will be notified of the deferment status.

Any person who is in default on their loan will not be eligible for either a deferment or forbearance. You will have to set your loans right by making payments in order to be eligible for student loan debt programs.

Forbearance

For those people who cannot afford their scheduled student loan payments but do not qualify for deferment, a forbearance is the next best thing. You will temporarily be relieved of loan payments, temporarily make smaller loan payments or extend the time to make a payment. All options work in your favor as far as keeping your debt out of default.

Common reasons for requesting forbearance are:

  • Illness
  • Financial hardship
  • Serving in a medical or dental residency
  • Refer to your loan servicer for more examples.

You may be given an automatic forbearance under certain circumstances: processing a forbearance or deferment, cancellation, changing payment plan, consolidating or if put on active duty in the military.

Interest payments are often paid by the federal government during loan deferment. It saves debtors lots of money, but in order to receive this additional college loan debt help, the loans must qualify. The government may pay the interest for Federal Perkins Loans, Direct Subsidized Loans and/or Subsidized Federal Stafford Loans. If your loans are unsubsidized, your interest will not be covered by the government. Instead, interest will be added onto the total loan amount, building up the total loan amount each month.

If you are hoping to get into a loan forgiveness program, you will be required to make payments. Instead of looking at a forbearance or deferment for federal loan debt relief, you may want to consider a income-based relief program. These relief programs will work towards the 120 mandatory payments quite affordable.

Before you do anything, find out what help programs you loans qualify for. Income-based programs are extremely helpful in getting a head start on expected loan payments. Find out what your payments may be in one of these relief programs before you sign up for deferment or forbearance. Student loan relief services offer a free consultation for you to understand the proper direction to take in order to be eligible for student loan debt help.

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The Evolution of Special Education

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Special education has been assisting students with learning disabilities in the United States education system since the end of World War II. The first push for special education started when a group of parent-organized advocacy groups surfaced. In 1947 one of the first organizations, the American Association on Mental Deficiency, held its first convention. That marked a starting point for special education as we know it today.

Started during the Civil Rights Movement in the early 1950s, the United Cerebral Palsy Association, the Muscular Dystrophy Association, and John F. Kennedy’s Panel on Mental Retardation were among an increased amount of advocacy groups for assisted learning programs. This strong push helped bring special education into schools across the country in the 1960’s as school access was established for children with disabilities at state and local levels.

The parent advocacy groups dating back to 1947 laid the ground floor for government legislation being approved by Congress in 1975 that was called the “Education for All Handicapped Children Act” (Public Law 94-142). This act went into effect in October of 1977 and it was the beginning for federal funding of special education in schools nationwide. The act required public schools to offer “free appropriate public education” to students with a wide range of disabilities, including “physical handicaps, mental retardation, speech, vision and language problems, emotional and behavioral problems, and other learning disorders.”

The law from 1977 was extended in 1983 to offer parent training and information centers. Later in 1986 the government started programs targeting youngsters with potential learning disabilities. The Act from 1975 was changed to the “Individuals with Disabilities Education Act” (IDEA) in 1990. Since establishment of IDEA more than 6.5 million children and 200,000+ toddlers and infants are being assisted each year.

Special education in schools often unintentionally overlooks a key aspect of why students suffer from learning disabilities. The reasons for common learning disabilities are weak cognitive skills. Studies show that 80% of students enrolled in special education at some level suffer from underlying weak cognitive skills. Cognitive skills are the mental capabilities that one needs to successfully learn academic subjects. In more detail cognitive skills are learning skills used to retain information; process, analyze, and store facts and feelings; and create mental pictures, read words, and understand concepts. They are not to be confused with academic skills which would include subjects like math, science, or history.

Proper testing to identify these weak cognitive skills will help quality learning centers put together a plan of action to strengthen them. This sort of training will last a lifetime. By not targeting the cognitive skills a student will struggle for the rest of their life until they are trained properly. It is highly recommended that you get your child tested at a learning training center that provides cognitive testing. Once tested a personal, unique training program can be developed for your child to overcome their learning disability.

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Reasons Online Learning Institutions Fail

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Online education has become a prefer option especial for working adults to obtain a degree from their comfort home and at their convenient learning schedule. But, not all online students will be successful to complete their online education program. Most students who failed with these common reasons:

  • Not Prepare For Online Study Life
    The person who enrolled into online degree program is hoping to earn a degree without preparing him/herself to face the challenge of online study life. Be a success online student required self-motivation and proper time management to ensue he/she stays focus on the study and work the way to the completion of the degree program. Without preparing for online study life, the student tends to lose focus on his/her study when there are other tasks to focus on. This student may end up quit half way during his/her online study progress.
  • Failed To Adapt To Online Learning Style
    An online classroom is considerably different from a traditional classroom. Most online study materials are in text format which required you to read from computer screen or download & print them yourself. It’s totally different from traditional class-based learning style where you have instructor read and explain the content for you. The person who failed in online education may find the study hard with the reading of text material, he/she prefers to attend the class and listen to the lecture.

    In additional, online students have the most flexibility to plan their study time but many students have bad self-planning behaviors that cause them unable to plan their study schedule properly. Letting them plan for self-paced study will lead them to the failure.

  • Lack Of Computer Skills
    One of the basic requirement for online education is that the student need to have the basic computer skills such as logon to online class, download and submit assignment, communicate with instructors and peer through online media such as voice chat, discussion board, email or video chat. If the student lacks the basic computer skills, he/she will have difficulties to follow smoothly the online courses. The person may quit the courses just because he/she feels that attending online classes is hard due to lack of the necessary computer skills to make progress on the study.
  • No Commitment To Complete The Degree
    The person enrolled into online education because of the impulse intention of getting a paper qualification. After enrolled into an online degree program, the person is not really making a commitment to complete the degree program. He/she just quit the online study program because of other obligations.
  • Think Online Education Easy
    This is one of the major reasons that make many of the online students quit their online study. They choose online education as their option because they think that online education is easier than attending the campus-based classes because they can study from their comfort home and follow their study time. In actual fact, the online education gives you flexibility and convenient learning environment, which does not mean that the learning process is easier than traditional learning method; you still need to work hard to complete the degree requirement before you can successfully earn the degree. These students have set the wrong expectation on online study and when they found out that the actual fact is not what they are expected, they quit.

By being aware the key reasons why many online students failed in online education, you can better prepare yourself to face the challenges in your online study and be a success online student who earn your degree through online education.

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Choosing a Preschool

Good early childhood education programs create and offer on a day to day basis a partnership between your family and their teacher caregivers. Finding a loving, caring place for your exploring toddler may take sometime so be sure to start early and give yourself an opportunity to visit several programs.

First, look for early childhood education programs licensed with either the Department of Health or the Department of Education in your state. Licensed programs must meet certain criteria for the health, safety and education of young children. Requirements vary from state to state. Call the Department of Health or the Department of Education and they can give you a list of licensed programs in your area.

Second, make phone calls, ask questions and schedule a tour. To learn what is available you may want to visit center based programs, home based programs and even interview nannies to work in your home. Talk with other parents who already have their child enrolled in a program you are interested in. Choosing an early childhood education program for your toddler is a very important and personal choice.

Third, visit several programs. Go prepared with a written list of questions. What you want to see as you visit early childhood education programs are small group sizes. The National Association for the Education of Young Children recommends maximum group size of 12 toddlers, with 1 teacher caregiver for no more than 6 toddlers (preferably fewer i.e. State of Connecticut requires 1 teacher caregiver for every 4 toddlers and maximum group size is 8 toddlers). This allows for a high level of supervision that toddlers require. Your state agency requirements may have different ratios.

In your toddler’s early childhood education program you want to see:

  • Toddlers have a primary teacher caregiver so they can develop a strong relationship together. Your toddler’s teacher caregiver comes to know your toddlers individual personality, needs and cues and builds a strong positive communication with you.
  • Caregivers who are positive and praise toddlers for their accomplishments. Toddlers then become more in control of themselves and positive.
  • Teacher caregivers promptly respond to toddler’s cries or other signs of frustration because they realize toddlers do not yet have the language skills to communicate their needs.
  • Teacher caregivers are good role models by treating others kindly and with respect. As language development builds teacher caregivers encourage toddlers to use their words to resolve differences.
  • Teacher caregivers smile, use pleasant voice tones, give hugs and pats on back, and hold toddlers in lap throughout the day.
  • Physical space and activities are age appropriate allowing children to explore experiment and be actively involved in their learning environment.
  • Teacher caregivers read to children during the day 1 on 1 on adults lap or in groups of 2 or 3 children. Teacher caregivers sing, do finger plays and act out stories with children.
  • Sturdy picture books that show different cultural and racial groups, various types of families and different ages.
  • Toddlers encouraged to do everyday tasks such as eating, dressing themselves, toileting, washing hands. With opportunities and support toddlers will be learning new skills and better control of their behavior.
  • Teacher caregivers follow proper health and safety procedures to include hand washing and universal precautions. Written procedures are posted in designated areas in the classroom.
  • Teacher caregivers directly supervise all children by sight and sound, even at nap time.
  • Teacher caregivers provide curriculum so that toddlers have a variety of activities that include large-muscle play indoors and outdoors. Check to see that play equipment is safe. Equipment should be challenging for toddlers and separate from older children. Teacher child ratios should be maintained the same outside as they are in the classroom.
  • Caring and responsive teacher caregivers with training and or an early childhood education specific to the toddler age.

Fourth, you want to feel that you are always welcome in your child’s early childhood education center or home and can arrive at any time unannounced. Teacher caregivers see parents as the primary source of love, affection and care of their child. Teacher caregivers support parents and work to build a healthy professional relationship taking care of the whole family unit.

Fifth, toddlers are explorers and are very inquisitive about their world. They are always on the move looking for new and exciting activities and sights. Sometimes this appears to be a discipline problem however you may find that this is a toddler’s challenge to understand how he/she fits into the world.

Finally, toddlers learn best through play, investigation, exploration, observation and going at their own pace. Between the ages of 1 -3 years so many exciting developments occur. You want to offer your toddler an early childhood education environment that gives him/her a chance to take part in meaningful activities either alone or in a small group. This gives your toddler an opportunity to make choices and practice his/her social skills by sharing and getting along with others. They like to pretend to do what you do, dress up like mommy or daddy, scribble with crayons, read picture books, stack blocks, kick balls, eat with a spoon and fork, string beads, do puzzles and the list goes on.

A high quality early childhood education program works with you the parents. This provides your child with the learning activities he/she needs to become an individual who feels good about themselves, can sustain themselves and grow up to be a productive member of society. Good beginnings never end.

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Guide to College Financing for Students

The first step is to decide which avenue to pursue: do you want the student to come out debt free or do you want the student to have some “skin in the game”? If students know they are responsible for a portion, or all of the student loan repayment, they often take college more seriously. Once you know how much the student will be responsible for through student loans, simply take the total cost of education you are targeting minus the student loan portion, and the amount you will cover from free cash flow each year. This number will give you a rough idea how much you will need. You may want to run an inflation calculation or speak to an advisor to assist with those calculations.

Now that you have a target dollar amount to save, the next thing to consider is what vehicle to use for college savings. We will look at four account types commonly used:

  • 529 plans
  • Coverdell Educational Savings Accounts
  • US Savings Bonds
  • Custodial Accounts.

529 accounts are the most tax advantaged way to save in Nebraska and Iowa. Contributions are made to the plans with a maximum of $70,000 in one year (uses 5 years of gifting at the $14,000 per year gift tax threshold), and a state tax deduction of up to $10,000 in Nebraska and $3168 in Iowa. The contributions are invested in various portfolio options offered by each state. Any earning on the accounts are tax free if used for qualified education expenses. However, if the earnings portion is not used for education, there is a 10% penalty in addition to income tax.

Coverdell ESAs are similar to 529s, with lower contribution limits, but can be used for K-12 education. Additionally, Coverdell accounts must be used by the time the beneficiary reaches 30.

For both 529s and Coverdell ESAs, the funds can be transferred to another beneficiary if it is not needed or used for the first beneficiary, which allows for the owner to control use of the funds.

US Savings Bonds are one of the more flexible options best used for lower income savers. The bonds’ proceeds may be excluded from federal and state income tax if used for higher education and income limits are met.

Lastly, custodial accounts, often referred to as UTMA/UGMA accounts, are the most flexible in terms of what the dollars are used for. Custodial account contributions are gifts to the minor that become available for the minor at an “age of majority”, which is different in each state. The earnings are subject to income tax and may cause “Kiddie Tax” rules to apply. Additionally, for student aid purposes these accounts are considered the student’s assets and the person contributing has no control over the how the assets are used.

What to do if college is next year and you haven’t saved at all? First, don’t panic! 529 accounts can still be used as a “checking account” for education expenses, allowing for a state tax deduction (limits apply) in Nebraska and Iowa. Additionally, it is important to pay for at least $4500 of qualified education expenses out of pocket or from student loans in order to utilize the American Opportunity tax credit available for the first four years of college.

Finally, a common mistake is to use all liquid assets in the first few years, ignoring loans. This can cause a cash crunch later on when available loans may not be enough. Loans are offered each year, but have limits for the yearly amount borrowed. Typically, lower income borrowers will qualify for subsidized loans that accrue interest after graduation. Higher income borrowers qualify for unsubsidized loans subject to interest payments immediately. Because the loans offered may not be enough to cover the cost of education (tuition plus room and board), it is important to borrow wisely in the early years. So consider accepting subsidized loans early to ease cash flow later.

If in a real crunch for education dollars, Roth and Traditional IRAs can be tapped without penalty. Roth IRAs can be used tax and penalty free for higher education expenses, with limitations. However, this may impact retirement funding. Traditional IRAs may be used for high education without penalty, but are still subject to income tax and potentially impact retirement funding. Some 401ks offer loan provisions. Normally, I do not recommend 401k loans due to decreased contributions, lower rates of return, and lack of tax deductions for interest. If there is nowhere else to turn, a home equity loan may offer a lower rate and better deduction options than a 401k.

Regardless of how to fund a college education, it is a good investment in the future of a young person. Proper planning about who will take the financial responsibility and how to do so can alleviate some of the stress. As always, your education funding plan should be reviewed with an advisor or CPA.

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The Benefits of a College Degree

Can you break the poverty cycle by getting a college degree?

Whatever education you get beyond high school will help you break the poverty cycle. There is no reason for anyone to live in poverty in this country. It is only a matter of one making good choices every day of one’s life. Not everyone will attain a 4-year degree, but everyone with an average ability can attain some form of education beyond high school, be it on the job training, a certificate program or an associate degree. It all depends on your interest, commitment and discipline. The more education you have, the larger your social and economic circle will be. In most cases, the higher is your level of education, the more successful you will be.

Once you have broken this poverty cycle, not only does it benefit you, but also it benefits your children, your grandchildren and for generations to come. The tendency will be that each generation will do better than what you did. You can only claim with pride that you have achieved success in life when all of your children are doing well. This is a philosophy that we all should live by. There will always be an exception because we are human beings and we are not perfect.

The value of the connections that one makes as a result of having a college degree: Conquering college education

A college degree allows you to get a job that can afford you a comfortable living with a potential for a comfortable retirement. Even though most young adults don’t think about the importance of investing in a comfortable retirement, your most important goal is to make sure that you do everything that you can to retire early and comfortable. This all has to be done while you take care of your family. As parents, you will have a good idea of what type of schools/colleges that your children should attend to make good friendships and connections that can be very helpful in their professional aspirations. Most young people are not aware of the value that these friendships will have in their lives. Our society is a political arena in reality and each one of us needs to be conscientious of our friendships and connections, which will impact our professional goals. If you look at most of the successful and well-to-do young professionals, you will notice that they are all doing well because of the connections they made while they were in college or as a result of family connections. In most cases, it is not what you know but whom you know.

The college degree is fundamental in your success in life but the political contacts and connections are key to you landing that job with great potential to earn a great income. Don’t get me wrong, money is not the most important thing in this life, but it can make your life less stressful and your retirement more pleasurable.

College degree allows you the opportunity to expand your social circle, which can lead to great opportunities in life: Conquering a college degree

There are some people who will disagree with what I am about to say but it is a reality that without a college degree, one’s social circle is limited, which leads to limited opportunities. The more education you have, the greater are your opportunities to expand your social circle. Your social circle can be very helpful to your professional career. Education is not the only factor in play here, but your personality along with your ability to genuinely connect with people will determine how far you will advance in your career. If you allow your heart to guide every step of your life, you will always attain success and be happy. It will be very difficult to attain success and be happy if you are self-centered and egotistical. We make connections and friendships that will last when we operate from the heart. Your social circle will for the most part depend on the level of education that you have and the type of income that you earn.

How does all of this relate to your retirement (the golden years)? Conquering your retirement

Everything that you do in your lifetime has a lot to do with your retirement. The amount of money that you make and the amount of money that you invest in your retirement will determine whether you will have comfortable golden years. Most young people will procrastinate to invest in their retirement because retirement for young people is an after thought. It is a matter of inexperience and the knowledge of how important a good income is to a retired person. Whatever life style you are accustom to in the latter part of your life, you will need to have a retirement income that will allow you to maintain that current life style. To think that you are going be comfortable with an income that is less than 80% of your salary prior to retirement, you are in for a big surprise. You will need more money than you think because when you retire, you will have more time to do the things that you want to do and this will cost you more money. I would recommend that you invest as much as you can into your retirement because you will need the money and because after retirement your earning potential decreases dramatically.

This is why I strongly recommend that you get as much education as possible to guarantee you a comfortable life and happy golden years.

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