Financial News Story of the Day – Student Loan Bailout Pending
Yesterday we discussed the mortgage bailout, and today we are discussing the soon to be announced student loan bailout. Being referred to as the “Pay as You Earn Program,” it allows graduates who have federal student loans to pay 10% of their discretionary income for 20 years before the loans are completely forgiven. Rather than attacking the source of crushing loan debts (overpriced tuition), the government would rather deal with the symptoms. If you ever needed proof that we live in a bailout culture, this is it (source: NYTimes.com).
Excerpt: “Most of the 450,000 low-income student-loan borrowers currently enrolled in income-based payment must pay 15 percent of their discretionary income for 25 years before having their debt forgiven, although terms are easier for those in public service.
The lower caps of the new program were scheduled to go into effect for new borrowers in 2014, but, Ms. Barnes said, “because we know the frustration of crushing loan burdens, we have to act now.”
Personal Finance Tip of the Day – Homemade Gifts Don’t Always Work
Personal finance guru and all around nice guy, MoneyNing, discusses why making homemade gifts for Christmas won’t always work out the way you expect. Rather than simply listing a bunch of gifts you could make like other blogs would, he goes into why it could actually backfire in your face (source: MoneyNing.com)
Excerpt: “No matter how good it sounds in theory, not every homemade gift will be loved and appreciated. Sometimes it’s because the recipient is an ungrateful brat. Sometimes it’s because the holidays are hectic and things get overlooked. And let’s be honest, sometimes it’s because the homemade gift giver just didn’t put enough thought into it.”
Daily Finance Summary – Major Stocks Get Crushed
Stocks did their usual market ups and downs today, this time down, as the Dow ended the day -200 points lower than it started. Several major stocks got crushed, including Amazon and Netflix. IBM named a new female CEO Virginia Rometty, and Radio Shack’s earnings dropped 99% for the quarter due to costs associating with transitioning over to Verizon.
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