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On average, it costs $23,890 a year to attend an out-of-state school versus $9,410 for an in-state school. That’s $14,480 more per year you could pay — just to attend a college in a different state than where you grew up.

Source: Giphy.com

Over four years, you could end up paying $60,000 more than someone who attends school in-state. So, what are some ways you can lower the cost of out-of-state tuition? Here are seven of our biggest tips.

What’s Ahead:

1. Research Regional Reciprocity Programs

Many schools have “regional reciprocity agreements” or “tuition exchange programs” that let you attend certain out-of-state colleges for in-state rates.

For instance, 18 colleges in Georgia offer in-state tuition to residents of border states. This includes Alabama, Tennessee, North Carolina, South Carolina, and Florida.

On a much broader scale, several states have banded together to create regional reciprocity programs that give you reduced out-of-state tuition at hundreds of public and private schools.

The four biggest regional reciprocity programs include:

  • Midwest Student Exchange — Illinois, Indiana, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, and Wisconsin.
  • The New England Regional Student Program — Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont.
  • Academic Common Market — Alabama, Arkansas, Delaware, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, Oklahoma, South Carolina, Tennessee, Texas, Virginia, and West Virginia.
  • Western Undergraduate Exchange — Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, North Dakota, Oregon, South Dakota, Utah, Washington, Wyoming, and the Commonwealth of the Northern Mariana Islands.

Some schools will offer in-state tuition to any student in a neighboring state, while others may require you to meet certain criteria — such as having a specific high school GPA or declaring a certain major.

MU30 Tip: Already have a few colleges in mind? Look on their websites or contact financial aid to see if they have any tuition exchange or reciprocity programs in place.

2. See If You Qualify for a Tuition Waiver

In some cases, you may be able to get a tuition waiver that allows you to attend an out-of-state college at a reduced rate. Tuition waivers are usually granted to students with special circumstances:

  • You (or someone in your immediate family) is a veteran or active duty military member.
  • You were valedictorian or a high achiever.
  • You’re enrolled in a special degree program, such as STEM or health care.
  • You work for the school you wish to attend.
  • You were or are a part of the foster care system.
  • You’re a nontraditional student.
  • You’re of Native American heritage.
  • You have a financial hardship.

To see if you qualify, search for the phrase “tuition waiver” on your favorite schools’ websites. This should pull up a list of all the tuition waivers currently available. (For example, I found 13 waivers on the University of Washington’s website.)

3. Apply for Out-of-State Scholarships

There are several scholarships specifically for students who are attending college out-of-state. These scholarships can help you cover the costs of tuition, room and board, and other expenses.

To find out-of-state scholarships, start by checking with your college’s financial aid office. There’s a good chance the school has scholarships earmarked for nonresidents.

From there, do a scholarship search using a tool like the College Board Scholarship Search or Fastweb. You may find some private scholarships to help lower your out-of-pocket costs.

Read more: Scholarships and Grants: How To Score Free Money for College

MU30 Tip: Does your parent or guardian work in higher education at one of these Tuition Exchange member schools? If so, you can apply for a reciprocal scholarship that lets you attend hundreds of schools in the U.S., Canada, Greece, Morocco, the United Arab Emirates, and Switzerland at a free or reduced rate!

4. Think About Becoming a Resident Assistant

If you’re planning on attending college out-of-state, one way to lower your costs is to become a resident assistant (RA). RAs typically receive free or reduced-cost housing in exchange for their duties, which can include things like leading tours and organizing social events.

So while you may not get a tuition discount, it could help you save on housing while you’re there.

To become an RA, start by talking to your college’s housing office. They should be able to tell you about any open RA positions and their requirements. You may also need to fill out an application and go through an interview process.

5. Negotiate Out-of-State Tuition With the Financial Aid Office

It’s not widely advertised, but you can technically negotiate the cost of tuition and fees with the financial aid office. In fact, doing so could save you anywhere from 5% to 15%. On a four-year degree that costs $60,000, that’s a savings of $3,000 to $9,000.

Beyond negotiating, the financial aid office is also a way to find out what types of aid are available to you as an out-of-state student.

Read more:

6. Become an In-State Resident

This tip may seem a little far-fetched, but hear me out. If you’re taking a gap year, for instance, and have time to establish residency in the state where you want to attend college, it could be worth it.

Every state has different requirements for residency, but you’ll typically need to live there for at least a year before you can apply for in-state status.

Start by researching the requirements for the state you want to move to, then get working on completing them. This could include getting a job or an apartment in the state, getting a driver’s license, and more.

7. Look for Schools With Lower Out-of-State Tuition Rates

If all else fails and there’s no way for you to get reduced out-of-state tuition, another option is to simply look for schools that charge lower rates for out-of-state students.

MU30 Tip: Want to see which colleges have the lowest tuition rates? Check out this affordability calculator from the U.S. Department of Education.

Once you have out-of-state tuition rates for different colleges, you can start to compare your options and make a decision about which school is the best fit for you.

Read more: Not Enough Financial Aid? Here are 10 Ways To Pay for College

Bottom Line

Out-of-state tuition can be costly, but there are ways to minimize costs without racking up a ton of student loan debt. Use these tips to see how much you can save.

Featured image: Alexander Lukatskiy/Shutterstock.com

Read more:

Source: moneyunder30.com

Apache is functioning normally

On average, it costs $23,890 a year to attend an out-of-state school versus $9,410 for an in-state school. That’s $14,480 more per year you could pay — just to attend a college in a different state than where you grew up.

Source: Giphy.com

Over four years, you could end up paying $60,000 more than someone who attends school in-state. So, what are some ways you can lower the cost of out-of-state tuition? Here are seven of our biggest tips.

What’s Ahead:

1. Research Regional Reciprocity Programs

Many schools have “regional reciprocity agreements” or “tuition exchange programs” that let you attend certain out-of-state colleges for in-state rates.

For instance, 18 colleges in Georgia offer in-state tuition to residents of border states. This includes Alabama, Tennessee, North Carolina, South Carolina, and Florida.

On a much broader scale, several states have banded together to create regional reciprocity programs that give you reduced out-of-state tuition at hundreds of public and private schools.

The four biggest regional reciprocity programs include:

  • Midwest Student Exchange — Illinois, Indiana, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, and Wisconsin.
  • The New England Regional Student Program — Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont.
  • Academic Common Market — Alabama, Arkansas, Delaware, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, Oklahoma, South Carolina, Tennessee, Texas, Virginia, and West Virginia.
  • Western Undergraduate Exchange — Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, North Dakota, Oregon, South Dakota, Utah, Washington, Wyoming, and the Commonwealth of the Northern Mariana Islands.

Some schools will offer in-state tuition to any student in a neighboring state, while others may require you to meet certain criteria — such as having a specific high school GPA or declaring a certain major.

MU30 Tip: Already have a few colleges in mind? Look on their websites or contact financial aid to see if they have any tuition exchange or reciprocity programs in place.

2. See If You Qualify for a Tuition Waiver

In some cases, you may be able to get a tuition waiver that allows you to attend an out-of-state college at a reduced rate. Tuition waivers are usually granted to students with special circumstances:

  • You (or someone in your immediate family) is a veteran or active duty military member.
  • You were valedictorian or a high achiever.
  • You’re enrolled in a special degree program, such as STEM or health care.
  • You work for the school you wish to attend.
  • You were or are a part of the foster care system.
  • You’re a nontraditional student.
  • You’re of Native American heritage.
  • You have a financial hardship.

To see if you qualify, search for the phrase “tuition waiver” on your favorite schools’ websites. This should pull up a list of all the tuition waivers currently available. (For example, I found 13 waivers on the University of Washington’s website.)

3. Apply for Out-of-State Scholarships

There are several scholarships specifically for students who are attending college out-of-state. These scholarships can help you cover the costs of tuition, room and board, and other expenses.

To find out-of-state scholarships, start by checking with your college’s financial aid office. There’s a good chance the school has scholarships earmarked for nonresidents.

From there, do a scholarship search using a tool like the College Board Scholarship Search or Fastweb. You may find some private scholarships to help lower your out-of-pocket costs.

Read more: Scholarships and Grants: How To Score Free Money for College

MU30 Tip: Does your parent or guardian work in higher education at one of these Tuition Exchange member schools? If so, you can apply for a reciprocal scholarship that lets you attend hundreds of schools in the U.S., Canada, Greece, Morocco, the United Arab Emirates, and Switzerland at a free or reduced rate!

4. Think About Becoming a Resident Assistant

If you’re planning on attending college out-of-state, one way to lower your costs is to become a resident assistant (RA). RAs typically receive free or reduced-cost housing in exchange for their duties, which can include things like leading tours and organizing social events.

So while you may not get a tuition discount, it could help you save on housing while you’re there.

To become an RA, start by talking to your college’s housing office. They should be able to tell you about any open RA positions and their requirements. You may also need to fill out an application and go through an interview process.

5. Negotiate Out-of-State Tuition With the Financial Aid Office

It’s not widely advertised, but you can technically negotiate the cost of tuition and fees with the financial aid office. In fact, doing so could save you anywhere from 5% to 15%. On a four-year degree that costs $60,000, that’s a savings of $3,000 to $9,000.

Beyond negotiating, the financial aid office is also a way to find out what types of aid are available to you as an out-of-state student.

Read more:

6. Become an In-State Resident

This tip may seem a little far-fetched, but hear me out. If you’re taking a gap year, for instance, and have time to establish residency in the state where you want to attend college, it could be worth it.

Every state has different requirements for residency, but you’ll typically need to live there for at least a year before you can apply for in-state status.

Start by researching the requirements for the state you want to move to, then get working on completing them. This could include getting a job or an apartment in the state, getting a driver’s license, and more.

7. Look for Schools With Lower Out-of-State Tuition Rates

If all else fails and there’s no way for you to get reduced out-of-state tuition, another option is to simply look for schools that charge lower rates for out-of-state students.

MU30 Tip: Want to see which colleges have the lowest tuition rates? Check out this affordability calculator from the U.S. Department of Education.

Once you have out-of-state tuition rates for different colleges, you can start to compare your options and make a decision about which school is the best fit for you.

Read more: Not Enough Financial Aid? Here are 10 Ways To Pay for College

Bottom Line

Out-of-state tuition can be costly, but there are ways to minimize costs without racking up a ton of student loan debt. Use these tips to see how much you can save.

Featured image: Alexander Lukatskiy/Shutterstock.com

Read more:

Source: moneyunder30.com

Apache is functioning normally

About the series…

When most people talk about money management, they discuss tactics. Occasionally, you’ll encounter someone who elevates the discussion to strategy, rather than simply scattershot tactics.

But what’s missing from both conversations — both tactics and strategy — is a wider-lens look at how to become a better thinker; how to become a crisp, clear decision-maker.

How to think from first principles. How to better your brain. How to cultivate the wisdom to know the next move.

This series is an attempt to bring first principles thinking into the conversation around money. Welcome to the inaugural post.

Rethinking the FIRE Construct

I’ve been thinking about FIRE in new terms:

Financial psychology

Investing

Real estate

Entrepreneurship

Together, these four concepts encompass everything we need for mastery over our financial life. And the letters are ordered perfectly: start with mindset and master the basics, then shift focus to “the IRE of FIRE” — high-growth activities such as making investments, buying real estate, and starting a side hustle or business.

So I’m trying something new.

With every post in this First Principles series, I’ll share insights into these four domains, with the goal being to fill each post with original and unusual insights.

My commitment to you is to write a series with nuance. Too much personal finance content lives in an echo chamber, rehashing the same tired lines and prescriptive, one-size-fits-all advice. You won’t find that here. This series is built to make you smarter. Together, we’ll uncover mental models, examine frameworks, rethink perspectives, peer at our cognitive biases and emotional triggers, and engage in the deep work of thinking about how to think.

This is a series about how to think from first principles, how to be a better, smarter, wiser decision-maker, told through the lens of money.

Let’s begin — and in today’s introductory post, we’ll kickoff with a deeper look at each of these four concepts.

Financial Psychology

If you say “personal finance 101,” most people immediately think of tactics: building automations, setting up cash reserves, hiding money from yourself. They think of bulk cooking, buying used cars, and the low-hanging-fruit of frugality.

Those tactics are great. But starting there is a mistake.

Bigger, more sustained improvements come from understanding why we spend, why we behave irrationally with money, why there’s a behavior gap between what we pledge and what we do.

The key to finding your financial footing is understanding the psychology of money.

Want to stop spending so much on the weekends? Start by understanding the impulse behind the purchase. We don’t buy items, we buy feelings. Figure out what feelings you’re trying to purchase — and the triggers and root causes behind that — and your spending will adjust naturally.

Want to get (and stay) out of consumer debt? Start with the psychology of debt — both the factors that led you into debt, and the mindset that the debt burden creates.

Most of us know what to do (spend less than you earn, invest the difference), but translating awareness into action is tough. Tactics are necessary, but not sufficient.

Understanding the psychology of money is at the core of mastering our financial mental game. And until we master the mindset, then we’ll never follow through with the tactics.

Investing

Most discussion around investments fall into two categories:

1: The fundamentals. These are the articles that teach basics around how the system works: “the 401k, 403b, and IRA are examples of retirement accounts,” or “stocks and bonds are examples of assets.”

2: The horserace. These are the articles that track what the market is doing today, or this week — market moves, winners and losers.

You can either read evergreen articles on long-term investing, or you can track today’s stock performance; there’s not much information outside of those two domains.

But there are three important elements missing from this conversation:

1: The strategy. Investing decisions need to be made in the context of your life (or as my buddy Joe says on the podcast, “start with the end in mind.”) These strategic discussions around “what’s the end goal?” and “how do I reverse engineer?” often get overlooked, which is why so many investors experience FOMO, the fear of missing out. If there’s no clarity of purpose, then the only goal is “more.” And when the only goal is “more,” then the Next Hot Stock Tip seems too tempting to pass up.

2: The psychology. The greatest investors are the ones who have a strong awareness of investor psychology: fear and greed, FOMO, loss aversion, recall bias, the availability heuristic, our tendency to overvalue what we already own, and other cognitive biases.

3: The new frontier. Cryptocurrencies for conservative, thoughtful, diversified investors. We live in a world with SPACs and NFTs, acronyms that the average investor didn’t know a few years ago. And at the moment, millions of people are learning about these next-frontier innovations primarily from Twitter and TikTok.

I’ll be writing about investments with a focus on these three elements.

SPOTLIGHT ON…

One of the most fascinating trends of today is the decoupling of skills from diplomas.

The established order used to demand that we dig ourselves into debt for a formal education in order to be considered skilled, useful job candidates. The advent of specific skills-based online learning has transformed this, making it possible to land a six-figure career with only a few months of training.

For a deeper discussion around this decoupling — and how it affects anyone who wants a higher-paying job — watch this video conversation that I had with Jonathan Mendonsa, co-host of the Choose FI podcast.

Real Estate

Real estate is one of the few asset classes that’s a hybrid between an investment and an entrepreneurial venture, so it’s perfect that the “R” in “FIRE” fits in-between the “I” of investing and the “E” of entrepreneurship.

Housing prices have soared in 2021, and the psychological response has been fascinating. When macro events happen, our brains grasp for an explanation.

Many people have reflexively reached for the simplistic, reductive explanation that home prices are high because buyers are irrationally exuberant, and that what goes up must come down. Many people have a fear of heights: the soaring new highs of the market must *necessarily* mean that there will come a crash … right?

After all, that’s what happened in 2008 … so isn’t this history repeating itself?

Yet it takes more than new highs to cause a crash. And there are major differences between the market peaks of 2021 and the peaks of 2006-07.

In 2006-07, we faced a housing surplus. Builders were over-developing, speculating that demand would be able to keep up with the huge spike in supply.

In 2021, we face a housing shortage. New construction permits and renovation permits are low. Lumber prices are high. Labor is scarce. New household formation is high. The supply can’t keep pace with demand.

To be clear, this isn’t a prediction of the future. I’m opposed to making predictions (though I’m an advocate of probabilistic thinking).

It’s simply an observation that the factors influencing each run-up are different — so it’s unwise to assume we know what the future holds.

Entrepreneurship

The word “entrepreneurship” is overused, so let’s pause to look at the different concepts and styles of work that fall under this umbrella category.

First, there’s *gig economy* work, like driving for DoorDash or Uber Eats. It’ll get cash in your pocket immediately, but because there are low barriers to entry and few ways to distinguish yourself, the upside is limited.

Next, there are *scalable* side hustles, like building an online business of your own: freelancing, consulting, producing a product or service that carries your own branding. This allows you to distinguish yourself and offers the benefit of a limited startup cost, but it could take months before it turns profitable.

Once you convert side hustles into full-time work, there are two iterations.

There’s self-employment, in which you’re a solo service provider (potentially with a few 1099 contractors).

And then there’s full-blown entrepreneurship, in which you’re running a company with W2 employees, health benefits, vacation policies and a 401k plan.

The confusing thing about the catch-all term “entrepreneurship” is that people online use this to apply to all four of the above-listed situations, and as a result, most information that you’ll find about this topic is muddled.

In this First Principles series, I’ll be clear about which of these four situations I’m referencing, as I write about how to think and act like a successful entrepreneur.

Hope you enjoyed AND learned from this inaugural post in the First Principles series.

Click here if you want future posts like this straight to your inbox with more thoughts, ideas and insights on a new take on FIRE.

See you soon!

Source: affordanything.com

Apache is functioning normally

Seemingly overnight, the internet is awash with news regarding a “new,” unfair tax on mortgage borrowers with higher credit scores. Some have gone so far as to suggest that someone could intentionally lower their credit score in order to get a better deal.

Before you stop paying your bills in the hope of cashing in, let’s separate fact from fiction.  First and most importantly, you will absolutely NOT get a better deal on a mortgage rate if your credit score is lower, even if your nephew just texted you a screenshot of a news headline saying “620 FICO SCORE GETS A 1.75% FEE DISCOUNT” and “740 FICO SCORE PAYS 1% FEE.”  

So why would your nephew make such a claim?

This all has to do with changes to Loan Level Price Adjustments (LLPAs) imposed by Fannie Mae and Freddie Mac (the “agencies”), the two entities that guaranty a vast majority of new mortgages. LLPAs are based on loan features such as your credit score and the loan-to-value ratio among other things.  They’ve been changed several times over the years and a fairly substantial change was announced in January of this year.


Wait… This news is from JANUARY?!  Why are people talking about it now?

Yes, in fact, we already told you about it.  People are confused because they don’t understand how “delivery dates” work when it comes to Fannie and Freddie.  Changes that impact fees and guidelines are almost always implemented based on the date the loan in question is “delivered” to Fannie/Freddie.  “Delivery,” in this context, typically occurs a matter of weeks AFTER the loan is closed, although it can be more than a month.  

Now consider that a closed loan has often been quoted and locked for more than 3 weeks–call it a month to be safe.  Since these changes go into effect on loans delivered on or after May 1st, 2023, lenders began to implement them weeks ago.  Many lenders implemented them months ago–especially for loans that are locked for longer periods of time.


So low credit borrowers are already getting a discount while high credit borrowers pay more? 

Not exactly, and this is where the confusion comes in.  Also, from here on out, please note that there is no opinion offered here as to whether this is good/bad/etc.  The only goal is to clear up confusion and offer facts.  

The fact of matter is that LLPAs are indeed changing in a way that improves costs for those with lower credit scores and increases costs for those with higher credit scores (in many cases, anyway).  But people are confusing the CHANGE for the ACTUAL cost.


So a low credit borrower isn’t paying less than a high credit borrower?  The gap between what they pay is just smaller than it was?

YES! Again, all value judgements and political commentary aside, the change amounts to a tweak of an existing fee structure in favor of those with lower credit scores and at the expense of those with higher credit scores, but there’s no scenario where someone with lower credit will have a lower fee.  In other words, don’t go skipping those credit card payments in the hopes of getting a lower rate.


How about some color-coded charts/tables?

I thought you’d never ask.  Let’s start with the changes that have everyone so upset.  The following tables shows the DIFFERENCES in LLPAs before and after the change.  RED = rising costs.  GREEN = falling costs.++

If you only saw this chart, you could be forgiven for thinking someone with a 640 credit score was paying less than someone with a 740, but again, these are just the changes.  

Now let’s look at a table with OUTRIGHT LLPAs for the same matrix of credit scores and loan-to-value ratios.  This is the NEW structure, after the implementation of the change.

As you can now plainly see, if you have a score of 640, you’ll be paying significantly more than if you had a 740.  Using an 80% loan-to-value ratio as an example, your LLPA at 640 is 2.25% versus 0.875% for a 740 score.  That’s a difference of 1.375%, or just over $4000 on a $300k mortgage.  This is almost HALF the previous difference, and that’s certainly a big change.


Yes, it’s a big change, so why is the government doing this to people with higher credit?!

Fannie and Freddie technically have a “mission” to promote affordable home ownership.  Here is the statement on the topic by their regulator, the FHFA: FHFA Announces Updates to the Enterprises’ Single-Family Pricing Framework.

Note in the first two tables that there is more of an improvement for the lower FICO rows on PURCHASES (i.e. home ownership vs refis).


Any other misconstrued news I need to know about?

Yes, actually.  While not as viral as the LLPA stuff, there has been a fair amount of press on a new 40yr FHA mortgage.  THERE IS NO NEW 40yr FHA LOAN!  Lenders who collect payments on FHA loans have a new option to offer loan modifications with terms of 40 years to borrowers who are unable to pay their existing FHA loans.  


Don’t you usually talk about financial markets in these newsletters?

Indeed!  But since we’ve taken a fair amount of space on more interesting stuff above, we can keep the market recap fairly short.  Rates moved higher to start the week as economic data was strong on Monday morning.  There were several other examples of reactions to economic data at home and abroad as the week continued, but all of them played out in a sideways range that continues to wait on the first two weeks of May for the most relevant input.

Source: mortgagenewsdaily.com

Apache is functioning normally

How Do Payday Loans Work? – SmartAsset

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Many Americans have income that fluctuates from week to week. When incomes are unsteady, any unexpected expense can leave you coming up short. If you don’t have a fully funded emergency fund, you may find yourself looking around for loans to bridge the gap and get you to your next paycheck. Payday loans are out there, but at a high cost to borrowers. Before taking out a payday loan you may want to first make a budget. You can work with a financial advisor who can help you make a long-term financial plan that you can budget your finances to meet. 

Payday Loans: Short-Term Loans with a High Price

What are payday loans? Say you’re still 12 days away from your next paycheck but you need $400 for emergency car repairs. Without the $400 your car won’t run, you won’t make it to work, you’ll lose your job and possibly lose your housing too. High stakes.

If you go to a payday lender, they’ll ask you to write a future-dated check for an amount equal to $400 plus a financing fee. In exchange, you’ll get $400. You’ll generally have two weeks or until your next paycheck to pay that money back. Say the financing fee is $40. You’ve paid $40 to borrow $400 for two weeks.

If you pay back the money within the loan term, you’re out $40 but you’re not responsible for paying interest. But the thing is, many people can’t pay back their loans. When that happens, the money they borrowed is subject to double-digit, triple-digit or even quadruple-digit interest rates. It’s easy to see how a payday loan can lead to a debt spiral. That’s why payday loans are illegal in some places and their interest rates are regulated in others.

When your loan term ends, you can ask your payday loan lender to cash the check you wrote when you agreed to the loan. Or, you can roll that debt into a new debt, paying a new set of financing fees in the process. Rolling over debt is what leads to a debt spiral, but it’s often people’s only choice if they don’t have enough money in their account to cover the check they wrote.

Are Payday Loans a Good Idea?

Not all debt is created equal. An affordable mortgage on a home that’s rising in value is different from a private student loan with a high-interest rate that you’re struggling to pay off. With payday loans, you pay a lot of money for the privilege of taking out a small short-term loan. Payday loans can easily get out of control, leading borrowers deeper and deeper into debt.

And with their high-interest rates, payday loans put borrowers in the position of making interest-only payments, never able to chip away at the principal they borrowed or get out of debt for good.

Payday Loans and Your Credit

Payday loans don’t require a credit check. If you pay back your payday loan on time, that loan generally won’t show up on your credit reports with any of the three credit reporting agencies (Experian, TransUnion and Equifax). Paying back a payday loan within your loan term won’t boost your credit score or help you build credit.

But what about if you’re unable to repay your payday loan? Will that payday loan hurt your credit? It could. If your payday lender sells your debt to a collection agency, that debt collector could report your unpaid loan to the credit reporting agencies. It would then appear as a negative entry on your credit report and lower your credit score. Remember that it takes seven years for negative entries to cycle off your credit report.

Having a debt that goes to collections is not just a blow to your credit score. It can put you on the radar of some unsavory characters. In some cases, debt collectors may threaten to press charges. Because borrowers write a check when they take out a payday loan, debt collectors may try to press charges using laws designed to punish those who commit fraud by writing checks for accounts with non-sufficient funds (these are known as NSF checks).

However, future-dated checks written to payday lenders are generally exempt from these laws. Debt collectors may threaten to bring charges as a way to get people to pay up, even though judges generally would dismiss any such charges.

Alternatives to Payday Loans

If you’re having a liquidity crisis but you want to avoid payday lenders, there are alternatives to consider. You could borrow from friends or family. You could seek a small personal loan from a bank, credit union or online peer-to-peer lending site.

Many sites now offer instant or same-day loans that rival the speed of payday lenders, but with lower fees and lower interest rates. You could also ask for an extension from your creditors, or for an advance from your employers.

Even forms of lending we don’t generally love, like credit card cash advances, tend to have lower interest rates than payday loans do. In short, it’s usually a good idea to avoid payday loans if you can. Instead, consider working on a budget that can help you get to your next paycheck with some breathing room, and make sure you have a rainy day fund.

The Bottom Line

When considering a short-term loan, it’s important to not just look for low-interest rates. Between fees and insurance policies, lenders sometimes find ways to bump effective interest rates to triple-digit levels even if they cap their APRs. The risks of taking a payday loan bring home the importance of working hard to build up an emergency fund that you can draw on.

Tips for Retirement Planning

  • If you’re not already preparing for retirement then it’s a good idea to create a retirement plan and make sure you’re contributing to it regularly. If you’re overwhelmed or don’t know where to begin, a financial advisor can help you map it all out. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • Not sure how much you need to save for retirement? Consider using our free retirement calculator to get the number you need so that you can start making the right progress.

Photo credit: ©iStock.com/PeskyMonkey, ©iStock.com/Kirby Hamilton, ©iStock.com/Joe_Potato

Amelia Josephson
Amelia Josephson is a writer passionate about covering financial literacy topics. Her areas of expertise include retirement and home buying. Amelia’s work has appeared across the web, including on AOL, CBS News and The Simple Dollar. She holds degrees from Columbia and Oxford. Originally from Alaska, Amelia now calls Brooklyn home.

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Pre-qualification is usually the first step in the process for student loan applications. After that, you’ll choose from a list of potential lenders. Then, ideally, you’ll select the one with the best rate.   

But what if you and your pals could contact a single lender for a loan together? Would they be more inclined to reduce their rate? Introducing Juno: a platform that seeks to harness the power of community.   

Juno has created a platform that allows students to band together and leverage their buying power to get the best possible rates on their loans. Juno works with several different lenders to find the best rates for borrowers. 

And because they work with multiple lenders, they can offer more flexible repayment options than most traditional organizations. So, if you’re looking for a student loan, we encourage you to check out Juno and see what we can do for you. Juno is a reliable and trustworthy source for student loans, and most Juno student loans reviews are positive.   

Check out our Juno review below to learn more! 

What’s Ahead:

About Juno Student Loans

Juno was founded in 2018 by two Harvard Business School students shopping for loans to cover their student debt. Their mission is to help reduce the alarming level of student loan debt in the United States. Juno offers competitive rates and terms on its student loans and has various lender options. 

Its founders, Nikhil Agarwal and Chris Abkarians, used negotiation strategies to obtain more affordable loans for their education. They decided to create Juno so other students could benefit from their experience. 

Working with Lenders

In 2022, Juno held an auction to compel lenders to provide the community with the best prices. They spent hours poring over rate tables and spreadsheets to determine which lenders provided the best rates for most borrowers. It allowed them to get the best possible deals for their members and ensured they got the best terms for new student loans as well as refinancing existing student loans. 

Juno charges the chosen lender a pre-determined fixed fee before the start of the agreement. It ensures that Juno will not get tempted by more substantial financial inducements from other companies.   

Offering the community the best pricing is the only way for lenders to prevail in the auction. By providing the community with the best possible pricing, Juno can ensure that it remains the preferred choice for student loans. 

Saving Students Money 

As an authority on student loans, Juno has helped countless students and families save money on borrowing. Juno members have borrowed more than $500 million at reduced rates, making it an ideal go-to source for anyone looking to lower their student loan payments.   

With a wide range of options and expert negotiators on staff, Juno is well-equipped to help you get the best possible terms on your student loans. 

What Loan Types Does Juno Offer? 

Here’s a quick breakdown of the loans you can access. 

Undergraduate Loans: These loans are for students enrolled in an undergraduate program at an accredited institution. 

Graduate Loans: These loans are for students enrolled in a graduate or professional program at an accredited institution. 

MBA Loans: These loans are for students enrolled in an MBA program at an accredited institution. 

Parent Loans: These loans are for parents of dependent students enrolled in an undergraduate or graduate program at an accredited institution. 

DACA Loans: These loans are for students with Deferred Action for Childhood Arrivals status enrolled in an undergraduate or graduate program at an accredited institution. 

Degree Abroad Loans: These loans are for students enrolled in a degree program at an accredited international institution. 

Student Loan Refinancing: If you have an existing student loan and have already graduated, you may be able to reduce your rates through refinancing.

Now let’s provide some in-depth Juno student loans reviews. 

1. Juno Graduate Loans 

As a graduate student, you want to be sure that you’re getting the best possible deal on your student loans. That’s where Juno comes in. 

Juno is committed to providing the best possible terms for graduate students with credit scores of 650 or above. In addition, they offer a cash incentive and a price match promise to anyone who can find a better private student loan. 

Pros 

  • Free membership 
  • Juno offers the lowest rate guaranteed 
  • No obligation 

Cons 

  • Juno doesn’t work with every lender 

Verdict 

With Juno, you can rest assured that you’re getting the best deal possible on your loan. That’s why they’re the best choice for graduate students looking for a private student loan. 

Get a quote for a graduate student loan 

2. Juno Undergraduate Loans 

Federal Stafford loans are generally the best choice for undergraduates. Still, it’s common for students to need to borrow more than the federal maximum of $5,500 for their first year of school. As an undergraduate student, you may find yourself in need of extra funds to cover the cost of tuition and other associated expenses.   

The cost can be even higher for parents helping their children pay for college. Parent PLUS loans, which the federal government offers, have an interest rate of 7.54% for the 2022–2023 school year and a 4.2% origination charge. That can make them quite expensive for borrowers with good credit. 

Consider a private loan from Juno if you cannot secure additional funding through federal loans. Juno currently offers a notable rate reduction for student loans, which can help families fill the gap after reaching the national lending limit, saving you money in the long run. 

Pros 

  • Low fixed interest rate  
  • No origination fees 
  • Deferment period 

Cons 

  • You can’t see what rates you’ll get before signing up 

Verdict 

Our Juno student loans reviews are overwhelmingly positive for undergraduates. Juno’s undergraduate loans have competitive interest rates and terms that could help you cover most expenses. 

Get a quote for an undergraduate student loan

3. Juno MBA Student Loans 

If you’re looking to finance your MBA, you may wonder if getting a private loan is worth it. Unfortunately, most MBA graduates enter profitable positions not covered by PSLF or IDR policies after graduation.  

So, private student loans can be a great way to finance your education. Juno offers low-interest loans specifically for MBA students, with repayment terms possible starting after graduation. 

Pros 

  • No credit checks involved 
  • You can tap into lower rates 
  • Quick sign-up process 

Cons 

  • Potentially longer approval process 

Verdict 

If you’re looking for a low-interest loan to finance your MBA, Juno could be a good option. 

Get a quote for an MBA student loan

4. Refinancing a Loan Through Juno 

Already taken a loan out? It’s not too late – you can also refinance through Juno. They offer a wide range of services for students and professionals to meet the needs of borrowers. 

Here are our Juno student loans reviews for refinancing. 

If you are looking to refinance your loan, Juno has a few different partner lenders that can help you. Earnest, Splash Financial, and Laurel Road all offer refinancing with periods ranging from 5 to 15 years.   

If you want to refinance medical loans, you will get sent to Laurel Road. However, if you wish to refinance any other loan, Earnest or, Splash is used instead. Juno is an excellent resource for those looking to lower their monthly payments or interest rates on their existing student loans. 

Refinancing plans are available for: 

  • General Student Loan Refinancing 
  • Medical Student Loan Refinancing 
  • Parent PLUS Loan Refinancing 
  • MBA Student Loan Refinancing 

Get a quote for refinancing a student loan

How Does Juno Compare to Federal Loans? 

Juno student loans reviews are slightly different from federal loans. One thing to note is that the government offers federal student loans, while banks, credit unions, and other financial institutions offer private student loans. 

Interest Rates   

Interest rates are another key difference. With a federal loan, interest rates are set by Congress, while the lender sets private student loan interest rates. As of 2022, the interest rate for Federal Direct Subsidized Loans and Unsubsidized Direct Loans is 4.53-6.54%. For federal Grad PLUS Loans, the interest rate is 7.54%. 

Repayment 

Federal student loans offer several repayment options, including income-driven and extended repayment plans. On the other hand, private student loans like Juno typically only provide a standard repayment plan, although some others may offer a comprehensive plan.  

Protection 

Finally, federal loans offer borrower protection. For example, if you become unemployed or have a sudden drop in income, you may be eligible for a deferment or forbearance on your federal student loans.   

These options temporarily allow you to stop or make smaller payments than usual. But, unfortunately, there is no such thing as a deferment or forbearance for private student loans – if you can’t make your payments, you’ll likely default. 

So Which is Best?   

One thing is sure from our Juno student loans reviews: pooling resources can help you secure the lowest loan interest rate guaranteed. Private financing is often considered less flexible than federal support, but Juno is seeking to change this. 

FAQs about Juno Student Loans

Is Juno Legit? 

Yes – Juno’s track record is impressive. Since its founding in 2018, Juno has already had more than 110,000 members sign up to join one of its negotiation groups, and it has secured over $520 million in loans.   

It’s free to use, and you can choose the best option for your needs. So if you’re considering where to get your student loans, check out Juno as a potential option! 

Can I get a scholarship from Juno? 

Yes, Juno provides a $1,000 essay scholarship. Only citizens of the United States may enter, and a winner gets chosen annually. 

Can Juno be used to refinance debts for overseas students? 

Yes! Juno launched a program to help international students refinance their student loans this December. It is the first program of its kind. 

Does Juno require a good credit score?   

No, you don’t need an excellent credit score for a loan — you can get a cosigner to help you get qualified if your credit score is low. A cosigner is usually a parent or other family member who agrees to sign the loan with you (but their score will need to be above 650).   

This way, even if your credit score isn’t good, you may still be able to get the loan you need. When requesting refinancing from Juno without a cosigner, a credit score higher than 650 is advisable. 

What kind of student loan do most people take out?   

The most typical Juno loan is a 10-year loan with a fixed interest rate. However, many parents choose the deferred option, where they don’t make any payments while their children are in school.   

But paying a little while in school to receive a lower interest rate is often the wiser choice. For instance, if you pay $25 per month, you may save a lot of money if you take advantage of the autopay discount. 

Summary

Saving money as a student by using the force of collective bargaining to get lower interest rates is innovative. We’ve looked at Juno student loans reviews. Many students balk at private financing compared to federal funding – this might be the organization that changes the game. 

By pooling borrowers with similar profiles, Juno can negotiate better interest rates with lenders on behalf of its members. And because there’s no cost to use Juno’s services, it doesn’t hurt to try it out and see if you could be qualified for lower interest rates.   

So why not give it a shot today?

Get a quote for a graduate student loan refinance or a new private student loan

Source: moneyunder30.com