Latest news with #financialaid
Yahoo
8 hours ago
- Business
- Yahoo
New student loan cap creates planning challenges for advisors
Students planning to pursue advanced degrees could soon face a complicated financial situation thanks to a new federal student loan borrowing cap, financial advisors warn. A provision in the tax and spending package signed into law on July 4 will set a lifetime borrowing limit of $257,500 for federal student loans starting in mid-2026. Graduate students will be capped at $20,500 per year in unsubsidized loans, with a lifetime maximum of $100,000. For those pursuing professional degrees such as medicine or law, borrowing will be limited to $50,000 per year and $200,000 over a lifetime. Parents taking out federal Parent PLUS loans will face a new cap of $20,000 per year per student, with a $65,000 lifetime limit. Currently, both graduate and professional students, as well as parents of dependent undergraduates, can borrow up to the full cost of attendance each year. The proposal would also eliminate Grad PLUS loans entirely, which now allow graduate students to borrow up to whatever expenses remain after other federal aid. READ MORE: How to advise clients on Biden's SAVE plan before it disappears Experts say these limits will have little to no impact on the average college student. But for students seeking costly advanced degrees, the new cap could significantly impact their ability to pay for school. "The biggest impacts will be felt in graduate programs when students max out on borrowing," said Ann Garcia, a financial advisor at The Mather Group in Portland, Oregon. "Medical school, law school, veterinary, physical therapy, etc., all cost considerably more than the new loan limits." In 2024, medical school graduates had $264,519 in student loan debt on average, according to the Education Data Initiative — roughly $7,000 more than the new borrowing cap. And that's an average, meaning many students exceeded the cap by larger amounts. Because the new borrowing cap is not pegged to inflation, advisors say that gap is likely to widen as education costs keep rising. For clients looking to get ahead of the new borrowing cap, advisors point to a few potential strategies. Advise clients on front-loading loans now Although the new limits don't take effect until July 2026, advisors say that families with multiple children attending college may want to begin shifting their borrowing strategies now. READ MORE: Confronted with college costs, parents reach for their 401(k)s "For parents with multiple kids, say one already enrolled and another preparing to enroll, you might need to consider borrowing more now for the student already in college to stay under the lifetime borrowing cap for younger children," Garcia said. By borrowing more now, parents can save up a bigger cash cushion to help cover future college bills, when borrowing limits will be in effect. Help clients use private loans strategically With greater flexibility and more repayment options, federal student loans are widely considered the best option for students who need to borrow money for college. But under the new borrowing limit, some advisors say that students may be better off taking out private loans first if they anticipate needing more than the federal limit allows. "The challenge will be qualifying for the [private] loans if you've borrowed the lifetime federal loan limit," said Mike Hunsberger, founder of Next Mission Financial Planning in Saint Charles, Missouri. "I envision a strategy where it will make more sense to borrow private loans first and then switch to federal loans to make sure you're getting the best rates while your debt is low and your credit score is good." READ MORE: 5 key tips for advisors on 529 college savings plans Currently, competition with federal student loan options keeps private lenders relatively competitive when it comes to interest rates. But that incentive could disappear under the new borrowing cap, as more students turn to private loans as their only option. "I think there could be situations in the future that borrowers who use the federal loans first could be unable to borrow more from private lenders, or that the rates will be so high that even those who are making great money will have trouble paying them back," Hunsberger added. If private loans become necessary, it's important to compare options carefully, according to Andrew Latham, a certified financial planner and the content director at SuperMoney. Having a creditworthy cosigner can lead to much better terms, and some credit unions or nonprofit lenders may offer lower rates than major banks, Latham said. Emphasize proactive cost-reduction options The best way for a client to avoid hitting the new borrowing limits is to minimize how much they need to borrow, either by cutting costs or paying more out of pocket. For parents who still have time before their children enter college, advisors say now is the time to increase contributions to 529 plans and Roth IRAs, funds from which can be used tax- and penalty-free for education expenses. READ MORE: How to prepare to pay for college — from a parent and a planner Depending on a family's financial situation, advisors say there are a variety of other strategies they can use to avoid taking out private loans. "Advisors should also review whether families are candidates for gifting strategies, cash-flow planning, or low-interest lending within the family to help bridge the gap," Latham said. "And talk to students directly. The earlier they understand the implications of the cap, the more control they'll have over school choice, program length and future debt load. Students and their parents should also be proactive about looking for grants and scholarships, advisors say. "Instead of asking what school could the student get into, families need to ask what schools will give them the most aid," said Jack Wang, a financial advisor at Innovative Advisory Group in Lexington, Massachusetts. "If families need to borrow, eligibility for merit and need-based aid becomes much more important to lower the cost of college and reduce the need to borrow." Garcia echoed that same point. "The most important piece of this is making good choices about where your student goes to school and using your budget as a guide to those choices," Garcia said. "College is available at every price point, and parents need to be realistic about which of those price points work for them."
LBCI
a day ago
- Business
- LBCI
PM Salam signs decree granting july financial aid to active and retired military personnel
Lebanon's Prime Minister Nawaf Salam has signed a decree approving a financial aid grant for both active-duty and retired military personnel for the month of July.
Malay Mail
a day ago
- Business
- Malay Mail
‘Thank you, PMX': Malaysians celebrate RM100 cash aid, cheaper petrol
KUALA LUMPUR, July 23 — Malaysians responded with thankfulness to a series of financial aid measures announced by Prime Minister Datuk Seri Anwar Ibrahim today, aimed at easing the burden of a skyrocketing cost of living. 'Thank you, PMX' comments flooded the prime minister's social media accounts as he announced the initiatives live. Some users also pre-emptively quashed potential criticism from naysayers, commending the government for rolling out the initiatives as better late than never. One announcement that won praise was the one-off RM100 cash aid for all Malaysians aged 18 and above, to be credited through their MyKad starting August 31. Anwar said this initiative, under an expanded Sumbangan Asas Rahmah (Sara), is expected to benefit some 22 million Malaysians. While some might dismiss the RM100 payout, Facebook user Noriahjohar Yazid from Perak pointed out that it is helpful, especially when combined with other targeted federal and state financial assistance. 'RM100 from (Kad) Perak Sejahtera… RM200 from MyKasih… Alhamdulillah… it's very helpful,' she commented during the livestream. The Kad Perak Sejahtera initiative provides RM1,200 annually (RM100 per month) to eligible recipients from the B40 income bracket in Perak. Meanwhile, Sara recipients under the MyKasih programme have been receiving RM200 monthly via their MyKad since April 2025 for essential goods. On Instagram, user @nadhirahidris commended the government's plan to redirect subsidies following the announcement that the RON95 petrol price will be reduced to RM1.99 per litre for Malaysians. 'Taken from eggs, returned to oil,' she commented on Anwar's post, referring to the recent reduction and upcoming removal of egg subsidies. The government plans to lower the RON95 price by six cents from its current RM2.05 per litre by the end of September, exclusively for Malaysians. However, some social media users raised concerns about whether the prices of essential goods would decrease in tandem with the petrol price drop. 'Alhamdulillah… hopefully traders will also lower the prices of goods. Before this, the excuse (to raise prices) was that oil prices went up… shouldn't food prices drop too?' commented Instagram user @azrilfeeqry. Another user, @norhallehan_aan, urged the government to expand the list of items that can be purchased using the RM100 handout to include wet goods such as vegetables. Currently, the Sara cash assistance is generally limited to purchasing dry essential items like rice and cooking oil, as well as personal care products and school supplies.
Malay Mail
a day ago
- Business
- Malay Mail
Penang CM: RM100 aid welcome, but Malaysia needs long-term fixes for rising cost of living
GEORGE TOWN, July 23 — Penang Chief Minister Chow Kon Yeow said the federal government should come up with long-term solutions to the rising cost of living. He welcomed the RM100 one-off aid announced by Prime Minister Datuk Seri Anwar Ibrahim today in a post on his Facebook page. 'It is a helpful gesture during tough times, but I believe Malaysians hope for long-term solutions to the rising cost of living,' he wrote. He said he knows the government faced financial constraints currently. 'However, we need policies that create jobs and support businesses,' he said. He also urged everyone to give Anwar time and space to manage current economic challenges effectively. Earlier today, Anwar announced a one-off RM100 cash handout to all Malaysians above the age of 18 in conjunction with National Day celebrations. The aid will be channelled through MyKad under the Sumbangan Asas Rahmah programme. The aid can be used between August 31 and December 31 to purchase basic goods at more than 4,100 stores including supermarkets and grocery stores. It is expected to benefit 22 million people.
Forbes
4 days ago
- Business
- Forbes
Student Debt Or Paycheck? The Case For Trade School Over College
BROADLANDS, VA - JULY 16: HVAC repairman Steve Seneff and Mikhel Dickason, 21, place in a new HVAC ... More system at a house in Broadlands, VA on July 16, 2024. (Photo by Craig Hudson for The Washington Post via Getty Images) If you have a child heading off to college in the next few years or you're a student considering college yourself, your head is probably spinning as you decide what to do. College now costs more than ever, it's difficult to estimate how much financial aid you'll get, and the current political landscape is changing student loan repayment massively. Beyond that, a large percentage of college degrees are shown to have no return-on-investment (ROI), or even a negative ROI. Then there's artificial intelligence (AI), which is expected to shake up the job market and lead to the extinction of entire jobs and industries in the coming years. Many entry-level positions are expected to disappear in the next decade, along with jobs whose core tasks can be replaced with generative AI. What should a student approaching college do with their time, money and potential in light of all these trends? Some say it's time for students to take a closer look at the trades : careers in industries like plumbing, HVAC repair, electrical, and welding. Why Some Students Should Consider Trades While trade school has sometimes been seen as a "second choice" or fallback option for students who couldn't succeed in traditional college, that really needs to change. According to Kimberly Ball of EdTech company SMART Technologies, skilled trades offer fulfilling, stable, and well-paying careers that are often overlooked due to these outdated stereotypes. The fact is, traditional college isn't the right fit for everyone. The trades not only fill the gap with career training opportunities that are less costly and time-consuming, but they pave the way to high-paying careers, many of which are increasingly tech-enabled and future-proof. Let's face it: AI can do a lot, but it will probably never be able to fix or replace clogged plumbing in a home, diagnose and repair HVAC issues, or troubleshoot electrical issues in a homeowner's attic. "Roles like electricians, coders, HVAC technicians and mechanics not only offer stability but also real-world problem-solving and opportunities to work with your hands," says Ball. The financial benefits of entering the trades are also multi-faceted. You can pay less for your education, earn money while you learn, and enter a high-paying career in a shorter amount of time. Imagine graduating high school and entering a trade, starting an apprenticeship after a short time in school, getting paid to learn, then entering a profitable career with zero student debt. This is entirely possible for those who forgo traditional college in favor of trade school, apprenticeship, and even some two-year degree options. As an example, the Bureau of Labor Statistics estimates that jobs for electricians will increase 11% through 2033, compared to 4% for all occupations nationwide. In the meantime, annual mean wages for electricians came in at $62,350, compared to $49,500 for all occupations combined. Or, consider elevator and escalator installers and repairers, who earned a mean annual wage of $106,580. The BLS expects jobs in this career to increase 6% through 2033. Plenty of two-year degrees also provide an excellent return-on-investment when you consider mean annual wages and time spent in school. Diagnostic medical sonographers need an associate's degree but still earned a mean annual wage of $89,340. Jobs are expected to increase 15% for this career through 2033. The same is true for dental hygienists, who earned $94,260 in 2024 with jobs expected to increase 9% through 2033. Trump's Workforce Pell Grant Could Help While some students may be able to learn a trade on the job without ever paying for school or career training, some trades do require a financial investment. This could be the case if you go to trade school before beginning an apprenticeship, or if you opt to earn a two-year degree from a community college in order to enter an in-demand field. The recently passed One Big Beautiful Bill expands the Pell Grant program, extending Pell eligibility to students who attend certain short-term workforce training programs. This means families with the lowest incomes could get their student into career training for free or at an extremely low-cost. "This legislation includes commonsense policy solutions that invest in American workers," says Michael Shires, Ph.D., Vice Chair of Educational Opportunity for the America First Policy Institute about the proposed bill. "Expanding Workforce Pell grants to workforce-aligned students and restoring Workforce Pell funding shortfalls help improve workforce training at all levels." The Bottom Line With everything going on with higher education, student loans, and generative AI's impacts on the workforce, it's smart to wonder if the traditional path is the way to go. It's becoming too common to pay six figures for a bachelor's degree at this point if you don't get any financial aid, and that's if you attend a public, in-state college or university. Attending a private university will cost you way more than that for the exact same degree. You can always borrow the money, but then you're stuck paying off student debt for anywhere from 10 to 20 years or longer. In a world where jobs may be replaced or impacted greatly by AI and other technological advances, does it really make sense to borrow so much money? Trades and some two-year degrees offer the potential for better earnings and more job stability. You could even learn on the job for free and enter the workforce within a few short years after high school. You'll have to give up the traditional college experience to go this route, but your future self will thank you.
