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Student loan borrowers may be experiencing whiplash this year, as the rules and guidelines for repayment have continued to see massive sweeping changes. If you’ve been following along with political news in recent months, you’re likely already aware of the fact that president Donald Trump has plans to dismantle – and perhaps entirely abolish , the Department of Education. This is a far cry from Joe Biden’s economic plans , which included wiping out millions in student loan debt over the course of his term, and setting the stage for additional loan forgiveness down the line. Whether you’re a borrower concerned about your financial future, or just a passive onlooker questioning the economic impact of Trump’s many executive orders , you may be interested in what happens to unpaid student loans when and if the Department of Education goes the way of the dodo bird. Luckily we’ve got you covered, with a comprehensive look into the history of the Department of Education, what Trump is...
After what seems like years of back and forth regarding student loan forgiveness, President Joe Biden has come to a decision to help roughly 45 million Americans affected by student loan debt. “In keeping with my campaign promise, my Administration is announcing a plan to give working and middle-class families breathing room as they prepare to resume federal student loan payments in January 2023,” said President Biden via Twitter. On Wednesday (Aug. 24), President Biden revealed that his new plan will give $10,000 in relief to borrowers whose annual income falls below $125,000. Additionally, those who qualified for federal Pell grants will receive an additional $10,000 bringing that total amount of relief to $20,000. The aforementioned agreement was issued to low-income undergraduates whose earnings fall below the income cap. According to Forbes, research shows the latest plan announced by the Biden administration slightly falls in favor of Americans with higher incomes. “Despite...
Brooklyn Nets owners Joe Tsai and Clara Wu Tsai are trying something ground-breaking that’ll change the game for Black business-owners looking for financial assistance. According to CNBC, as part of their $50 million commitment to help minority communities, the sports owners have launched “EXCELerate,” a $2.5 million Black business loan program to help those affected by the COVID-19 pandemic. Funds for the program will come from the Tsai foundation’s Social Justice Fund — which was started last year to help resolve economic inequities in Black communities. “We know that there is no social justice without economic opportunity,” Tsai said in a statement, “which is why we are so excited to launch the Brooklyn EXCELerate Loan Program aimed at elevating Brooklyn’s BIPOC [Black, indigenous, and other people of color] business owners post-pandemic and doing our small part to overcome barriers this community faces in accessing capital.” What’s unique about the program is that instead of...
There is no shortage of companies out there that promise to repair and restore your credit. However, for 21-year-old Michael Broughton, that promise is not only one he can keep, but one he’ll gladly do for free. The CEO and co-founder of Perch Credit — an app that’s designed to teach financial literacy — just closed a $2.5 million seed investment round, according to a press release. Now, he’s ready to take the app to the next level. A press release states in this latest round of funding, whose investors include Marcy Venture Partners, Citi, Softbank Opportunity Fund, Concrete Rose, and Village Capital, the young entrepreneur said that Perch will achieve its first major milestone: helping more than 100,000 people build their credit score. Step one of reaching this goal is already underway, with the Perch Beta officially launching on iOS today. Broughton, himself, said that he came up with the idea after he was denied a loan for $10,000, which he needed to finance the remainder of his...
According to Forbes , the new FICO 10 model will be put into place this summer. The Fair Issac Corporation (FICO) announced it will be changing its model to include consumer’s account balances and missed payments over the last two years. The FICO specializes in predictive analytics which analyzes a range of credit information and allows lenders to predict a consumer’s financial behavior. Under the new credit model, Forbes predicts 110 million Americans could see a change in their credit score with about 40 million seeing a 20 point drop in their credit score. Unlike previous models, the FICO 10 model will put a heavy emphasis on past delinquencies and late payments from the last two years. Forbes also reports consumers with a high utilization ratio (credit used vs. credit available) will also see a drop in their credit score. Although FICO changes will soon be in effect, here are some ways to continue to manage your credit under the new FICO 10 model. Be Aware of Your Credit Score...
Seeing your credit score drop can be scary, especially when you may be running a business that may need capital soon. But with time and good behavior, you can bring your score back up. Here are some tips on how to recover from a business credit score drop. In this article: What is a business credit score? What can cause your business credit score to drop? Ways to improve your business credit score The bottom line What is a business credit score? Unlike a personal credit score, which is calculated on a scale from 300-850, a business score is calculated on a scale from 1-100. A score above 75 is generally considered excellent, according to Mary Ann Strout, senior product manager for Experian Business Information Services. “Every bureau has their own proprietary models for calculating business scores and each are a bit different,” Strout said. Bureaus that track business credit include Dun & Bradstreet, Equifax and Experian. You can check your score by purchasing a business credit...
For business owners who need help funding their venture, loans from the U.S. Small Business Administration can be a popular financing option. The SBA aims to help small business owners who have trouble qualifying for traditional business financing , said Terri Denison, SBA Georgia district director. However, that doesn’t mean everyone with less-than-perfect credit can receive SBA loans. “What we’re looking for is that middle section — the borrower that has a good, solid business plan and idea, but maybe there’s something that’s not quite meeting all the requirements of a lender’s conventional loan,” Denison said. If you fit that description, keep reading to explore the pros and cons of SBA loans. We’ll dive into the benefits of an SBA loan, as well as some downsides you could expect. What are SBA loans? Pros and cons of SBA loans The bottom line What are SBA loans? The SBA doesn’t directly lend to small business owners — rather, it backs loans made through partnering lenders,...
When you’re getting ready to launch your business, there’s a lot at stake. You want to make sure that everything is exactly right so you can set yourself up for success. Though it’s important to be prepared, it’s common to feel like there’s just never really a right time to take that leap. While it may not be your forever plan, it’s not the worst idea to launch your business part-time, allowing you to tackle it on the side while you’re still getting a steady paycheck and health benefits from your current employer. Launching your business now may make you a part of a growing trend: diversity in business ownership is increasing across the board. According to the most recent U.S. Small Business Administration data, there are around 8 million minority-owned businesses (accounting for around 29 percent of all U.S. businesses). In particular, there’s been an increase in both Black and Hispanic business ownership, (9.5 percent and 12.2 percent of all U.S.-based businesses, respectively),...
Credit is a finite resource — but so are your time and energy. While boosting your credit score might take a bit of effort, it doesn’t have to be a Sisyphean task. If combing your credit card reports for errors every month and disputing them is not an option, consider these easy ways you may be able to boost your credit and keep it in good standing. Why your credit score matters Your FICO credit score is used by lenders to determine your risk as a borrower. This three-digit number between 300 to 850 is created by a mathematical algorithm and based on financial data, such as how often you pay your bills on time and how much debt you have. The higher this number, the better your options will be. A healthy FICO score can help you get lower interest rates on loans, land you better offers for credit cards and even improve your chances of getting the job or residence you want. Your FICO score is made up of the following elements: Payment history (35%): This factor looks at whether or not...
Editorial Note: This content is not provided or commissioned by any financial institution. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by the financial institution. We’ve covered how student loans can affect your credit score on Student Loan Hero before. But recently, I was left with a question: What is the impact on my credit score from paying off student loans early ? I had just gotten a notification that one of my credit accounts had closed, and there was a slight decrease in my credit score — but I had just paid off one of my student loans. Something that I felt so good about suddenly seemed like a mixed blessing, and it made me curious about how this had happened. Does paying off student loans help your credit score? Overall, student loans has positively affected my credit score. Up until two years ago, my student loans were my only source of credit —...