Save Now. Retire Later.
Whether you’re just starting your career or have been working for years, you dream of the day you can walk out of the stressful office and into a relaxing retirement. Unfortunately, for many Americans, this day truly is only a dream. To make sure you have enough set aside for a long and comfortable retirement, it’s important to be smart and plan ahead.
The first decision is determining when to start. As the adage goes, the sooner the better. If you’re in your early 20s, you’re probably more concerned with paying off your  school debt, or perhaps a car loan, than you are with paying for retirement in 40 years. True, getting out of debt should be your first priority, but starting to put a little into a 401(k) retirement plan won’t break the bank and will help you in the long run. Besides, when you’re 30, that school debt excuse will become a mortgage. At 40, it will become your child’s college tuition. At 50... well, if you start saving for retirement at 50, the dream of living in the tropics is looking more like a two-week vacation.
In addition to starting early, the trick to saving for retirement is to have it taken care of automatically. Ask your employer or bank to set up recurring contributions toward a 401(k) and/or other investments such as stocks, bonds or mutual funds. This way, you never see the money and don’t have to think about it – eliminating the urge to spend what you’re supposed to be saving/investing. This makes your retirement easy to save for and easy to achieve.
Finally, seek out a qualified financial planner to design a retirement strategy that’s right for you. Meet with your planner annually to make sure your retirement strategy changes with your needs.
Is Loan Consolidation Right for You?
Every year on July 1, you may notice a change in your student loan interest rate and, as a result, a change in your monthly payment. That’s because student loans have a variable rate and they are reevaluated at that time. This July, student loan rates became considerably lower than they’ve been in years, encouraging many borrowers to consolidate their loans to lock in the new, low rates. Perhaps you’ve considered consolidating your student loans. This may be a smart time to do it, but first weigh the pros and cons of consolidation to determine if it’s right for your current financial situation.
Most people consolidate their loans for one of two reasons: (1) to lower monthly payments, and (2) to lock in a low interest rate. By consolidating your loan, you can extend your repayment period past the typical 10 years, subsequently reducing your monthly payments – an obvious advantage. However, by extending your payments, you’ll end up paying more in interest because you’ll be making more payments over a longer length of time – an obvious disadvantage. If you don’t need to take advantage of lower monthly payments, a less costly option would be to consolidate your loans to lock in a low interest rate, but not lengthen the repayment period. You’ll save money because you’re paying off the loan sooner. Some other things to consider before deciding to consolidate your loans are:
- The new rate effective July 1. Is it higher or lower than the prior year?
- The interest rate while you are "in grace" is lower than the "in repayment" interest rate. Consolidating while you are "in grace" will reduce your interest rate since it is a weighted average.
- You could lose a portion of your "grace" period.
- There could also be a loss of repayment incentives.
For more information on consolidating your loans,
click
here.
For more information
regarding IDAPP’s Low Cost Borrower Benefits Program, click
here.
Hurricane Relief &
Student Loan Forbearance
People in several states are recovering from the tremendous damages caused by the recent hurricanes. As a result of the destruction, President Bush has declared Alabama, Florida, Georgia, Louisiana, Mississippi, North Carolina and South Carolina disaster areas. If you have a student loan and your permanent residence is located in any of the specified disaster areas, your student loans are eligible for a temporary forbearance. The forbearance program will allow for you to temporarily suspend payments on your student loan account for a period of three months. If you reside in Florida, you were automatically granted a 90-day forbearance. If you reside in any of the other areas declared as disaster areas, or if you live in Florida and need to extend your forbearance, please contact IDAPP at:
(800) 366-5755 or e-mail IDAPPcustomerservice@isac.org for complete details.
College Zone Network
IDAPP is an integral part of the College Zone Network. Powered by the Illinois Student Assistance Commission (ISAC), IDAPP partners with CollegeZone.com as well as College Illinois! and Learning Legacy (529 Prepaid Tuition Programs) to provide the most comprehensive information, resources and tools to help plan your college education.
collegezone.com
collegeillinois.com
www.collegeillinois.com/legacy/index.htm
College Illinois! Offers New State Tax Benefit
Starting in 2005, individuals subject to Illinois state income tax
can deduct up to $10,000 per year for contributions made to their
College Illinois! contracts. For more information, click
here.
Are You Ready for Some Football?
 The
leaves are beginning to change and the dog days of summer are quickly
coming to an end. You know what that means? It’s time for
college football. See where your school stacks up against the competition.
Click here to
check out the USA TODAY/ESPN Coaches Top 25 football poll.
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Current Interest Rates
click
here
Apply for a Loan
click
here
Lower Your Loan Rate
Lower
your student loan
interest rate by 0.25 percent
by signing up for IDAPP’s
Direct Debit Program.
- In July, student loan interest rates dropped to 3.37 percent – the lowest in 35 years – saving student loan borrowers millions of dollars and making repayment more affordable.
- 15.9 million students are enrolled in U.S. colleges and universities this fall.
- Back-to-school spending was at an all-time high this year with $5.6 billion being spent on clothing alone.
- The average cost for one year of tuition, room and board for in-state students at the nation’s four-year public colleges and universities is $9,953. This is up 87 percent from 1990.
- The average cost for one year of tuition, room and board for students at the nation’s four-year private colleges and universities is $29,119. This is a 93 percent increase from 1990.
Searching for a Job?
As
the job market improves, so do your chances of finding a job you
really love. Click
here for tips on finding a job that’s right for you.
Interview Tips
A
strong resume and a big smile may get your foot in the door, but
what should you do when it’s just you and the interviewer
one-on-one? Click here
for tips on getting the job during the interview.
Outlook for
New Grads
Job opportunities have grown
for 2004 grads, but the
competition is tough. Click
here for the latest salary
and outlook information.
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Welcome to the second edition of the IDAPP Counselor. This quarterly e-newsletter offers students, parents and student loan officers a quick glance at timely issues related to the student loan industry; helpful articles related to financial questions; as well as interesting facts, statistics and tips.
