CFPB – Students Stopped From Accessing Loan Forgiveness Program

For many years, graduating from college has been a significant part of the American dream. Parents proudly watch as their child crosses the stage to receive that all-important diploma. New graduates toss their caps into the air as they eagerly anticipate the beginning of an exciting and rewarding career.

However, that has not turned out to be the case for far too many graduates. Students, including those who wish a career in public service, are burdened with crushing student loan debts. These debts are particularly burdensome for those who wish to serve the public – approximately one in every four U.S. workers. The high debt payments can make public service jobs not affordable when compared to the higher salaries offered by corporate America.

Loan forgiveness programs were put in place to encourage graduates to pursue their public service careers. Recently, the Consumer Financial Protection Bureau (CFPB) reported that student loan services have been denying borrowers access to the Public Service Loan Forgiveness Program. This is only the latest of the scams targeted at people holding student loans.

Student Loans – An American Tradition

Harvard University actually began the American tradition of loaning money to students so they could pursue a higher education in 1840. However, student loans did not become widely available until 1944. Large numbers of veterans returning home from the WWII battlefields of Europe and Asia took advantage of the GI Bill to go to college for low or zero tuition costs. In subsequent years, about half of all college students were veterans.

In 1958, the federal government expanded student loans to all qualifying students as a means of encouraging more students to study science, mathematics, foreign languages and engineering. The Guaranteed Student Loan Program or FFELP (Federal Family Education Loan Program) was formed in 1965, allowing banks and others to provide students with government subsidized and guaranteed loans. It was quickly apparent that it would be necessary to monitor these large numbers of loans, resulting in the formation of The National Association of Financial Aid Administrators in 1966.

Student Loans Explode

Student loan programs evolved over time, adding Pell Grants for needy students and the Direct Lending Program for direct loans from the government to students. In 2010, the FFELP was eliminated. All new federal loans would now be made directly with students.

Private lenders did not want to be kept out of the huge student loan market and offered student loans directly to students with no government involvement. Students now had multiple loan sources. In 2012, the total amount of student loan debt had grown to more than $1 trillion, a staggering sum.

The Public Service Loan Forgiveness Program (PSLF)

The PSLP was established in 2007 to permit qualifying borrowers working in public service to have the remaining balance of their student loan debt forgiven after 10 years. This is a benefit offered to those who choose working in the public sector rather than pursuing higher-paid careers elsewhere.

Since many public service careers require advanced degrees, loan forgiveness after 10 years of public service removes some of the burden of the student loans needed in order to acquire the necessary education. A student can spend as much as $120,000 for a master’s degree at a top-rated university. In October, 2017, the first borrowers are expected to become eligible for loan forgiveness.

In order to qualify, borrowers must:

  • Make 120 qualifying monthly payments
  • Have a qualifying loan received under the Federal Direct Loan Program – other loans may become eligible if consolidated into a Direct Consolidation Loan
  • Work full-time for a qualifying employer (part-time jobs for qualifying employers may fulfill this requirement if a total of at least 30 hours per week are worked)
  • Complete and submit Employment Certification forms – this form should be submitted each year and whenever the borrower gets a new job

Student Loan Complaints Highlighted by the Consumer Financial Protection Bureau

Borrowers can become confused or be given incorrect information as to exactly what must be done in order to qualify for loan forgiveness. Many problems have arisen, eventually resulting in the June 2017 report by the Consumer Financial Protection Bureau (CFPB). Borrowers attempting to invoke their rights to loan forgiveness under federal law were delayed, deferred or denied.

Consumer complaints regarding student loans covered a wide range of problems against more than 320 companies including debt collectors, private lenders, student loan services and “debt relief” programs.

Some of the identified problem areas included:

  • Processing payments
  • Billing
  • Customer service
  • Communication problems between the borrower and the company
  • Issues related to enrolling in income-driven repayment plans
  • Co-signer issues

The Impact on Borrowers

As can be imagined, there were no lack of loan forgiveness problems impacting borrowers. A few of the reported difficulties are shown below.

  • When borrowers encountered financial difficulties and tried to apply for flexible repayment options that they had been previously told were available, the company said a flexible repayment option was unavailable or the borrower didn’t qualify.
  • Struggling and delinquent borrowers who were trying to avoid default were unable to find out what they needed to do to keep their loan from defaulting.
  • Borrowers received inaccurate or insufficient information regarding their eligibility for loan forgiveness. This can cause a borrower to make years of unnecessary loan payments, costing many thousands of dollars.
  • Incorrect information on loan consolidation could mean that none of a veteran’s military service would count.
  • Delays and errors in processing payments that caused payments to be “unqualified.”
  • Job certification problems that knock borrowers off the path to loan forgiveness.
  • Difficulties in correcting errors by services, such as misapplied payments.
  • Borrowers were unable to track their progress.

Certify Your Service

The CFPB announced the “Certify Your Service” campaign so those working in public service would be empowered to protect their progress toward forgiveness of their loan. Teachers and first responders will find guides specifically developed to address their issues. Guides cover available programs, picking the best program and getting on the path toward loan forgiveness. Employer tools are being updated.

Public service employees should:

  • Ensure they have federal Direct Loans.
  • Enroll in the correct repayment plan.
  • Certify their public service employment with an Employer Certification Form.
  • Keep complete records so they remain on track toward loan forgiveness.

Everyone benefits from the work done by all of those who have chosen to devote their lives to public service. Many public servants have made a substantial financial sacrifice in order to acquire the required education for their chosen career. The path to loan forgiveness should be as straightforward as possible. Hopefully, the new “Certify Your Service” program will be a step in the right direction.

What is SELF (Solar and Energy Loan Fund) and How to Get an Energy Assessment

Global warming doesn’t have one solution that will rectify the whole situation. The primary cause is the existence of too much methane, Carbon dioxide, and nitrous oxide, that are heat trapping and affect the atmosphere. There are various approaches and different technologies that are needed to bring down the emissions of the gases by not less than 80%, by 2050. Various methods are being deployed around the world and boosting energy efficiency is one of them.

The energy that is used to heat, cool and power our businesses, homes, and industries is one of the largest global warming contributors. With this knowledge, the world today is striving to get energy efficient technologies and practices that allow us to use fewer amounts of energy and get higher, or same, standards of comfort, service, and production. It is with this approach that SELF was inspired.

What is SELF?

Florida– based Solar and Energy Loan Fund is a non-profit organization. Its primary mission is to supply expertise in the energy department and offer to finance to underprivileged communities, residents and small businesses with the intention of creating sustainable community development, economic development opportunities, creating jobs locally, enhance the quality of life, energy independence, clean energy alternatives, and greater efficiencies.

SELF equips property owners with the much-needed skill, expertise, and financing, to help them recognize and make cost-efficient home energy retrofits such as renewable energy alternatives, energy conservation and energy efficiency. SELF clients benefit greatly from reduced power consumption. They, in turn, use their energy savings to assist them in paying back the SELF loans over time. Tax Credits and Rebates may apply as well to the numerous energy saving products financed through SELF.

Brief history of SELF

SELF was created in 2010, and ever since, it has enabled over 600 homeowners to upgrade their homes while lowering their energy costs at an affordable price. St Lucie County, Florida received $2.9 million worth of seed funding in that year as a DOE Better Buildings Neighborhood Program Grantee. It is after, that St. Lucie established SELF. It attracted additional capital by leveraging that investment including foundations, mission-driven investments from community banks, faith-based organizations, impact investors and crowd funding.

How does SELF Work?

An all-inclusive energy assessment is performed at your business or in your home through the program. The process is necessary to assist in identifying clean energy technologies and best practices that will give you as a client the greatest amount of savings and an efficient return on investment for your property.

Our finance and energy experts work hand in hand with you to fund the most economical energy investments through low interest rates, no-money-down loans. Additionally, the program provides a selection of contractors from an approved SELF Contractor list to finish the job. This low-interest rate program was put up to reduce your energy bills and give you access to clean energy solutions.

What about PACE?

PACE is a Property Assessed Clean Energy program from St. Lucie County. It’s available to all eligible industrial, commercial, residential, agricultural and non-profit property owners. It’s an alternative financing program that is made available to assist St Lucie County homeowners in making improvements to facilities and building. Such improvements include:

  • Renewable energy alternatives
  • Energy efficiency
  • Wind Hazard mitigation projects

PACE is an equity secured program in the subject property. You pay back voluntary assessments over time on the property tax bill.

How to apply for SELF

If interested in applying for SELF, you have to follow five simple steps:

Step one

You, as the property owner, being the primary applicant, should completely fill out the Loan Application packet. There is a required document submission checklist that has to be followed and loan application fee of $25. The primary qualifications that determine your approval and consideration for the loan are; home ownership, steady income, creditworthiness and proof of ability to repay the loan. It is important to submit as much income information as possible in the application so that the underwriter can make a sound decision. Either the Loan Underwriting Department is assigned a Loan Officer/Program Manager who will contact you in case more information is required.

  1. Submit your information.
  2. Upon application approval, the home may be required to receive an energy assessment based on the type of installation. The Loan Program Manager or Loan Officer will notify you to discuss the next steps, financing options, project management and the best possible solutions to ensure energy savings.
  3. You as a property owner will ask for quotes and obtain them from the approved SELF Contractor list. It is a recommendation to receive quotes from more than one contractor on the list. SELF only provides financing for improvements that are completed by SELF’s list of approved contractors.
  4. After finally settling on a contractor, you should contact the Loan Officer or the Loan Program Manager to schedule a loan closing appointment or a final consultation. The loan is then closed for the quote amount minus utility cash rebates. After that, SELF issues an official letter to the contractor(s) to continue with the improvements.
  5. SELF will acquire the final paperwork from the contractor upon completion of the improvements. SELF will then proceed with the issuing of payments to the contractors as long as the improvements are satisfactory to their standards.

Energy Assessment

An energy assessment is vital because it brings knowledge that will allow you to pinpoint the energy saving improvements that are the most cost-effective and best fit your home. All SELF clients are encouraged to get the energy assessment done and sometimes, it is mandatory. To gain more information on the energy auditors, fees associated and the different levels of energy assessments, please contact SELF.

The assessment fee may be included in the SELF loan once approved, and a loan is closed.

  • Martin County homeowners in Martin County get free energy assessments with HERS ratings. If interested in this option, kindly contact 772-468-1818
  • The City of Stuart homeowners in the City of Stuart receiver free BPI energy assessments. Kindly contact 772-468-1818 regarding this option.

SELF energy auditors

Here is a list of the SELF energy auditors:

  1. VESCO, Inc. – Carey Reddick. He is a local Veteran who provides a home analysis and an in-depth onsite inspection as well as recommending of energy-saving products. He provides two types of Energy Assessments; BPI-Building Performance Institute Energy Assessment and the general clipboard assessment. You may foot the cost of the Energy Assessment in full, or it could be rolled into the SELF loan if approved, and the loan is closed.
  2. Bluestream Energy – Lewis Zemanian. He provides an all-inclusive onsite inspection of the home and conducts an analysis of it as well as recommending energy-saving products. He provides three different Energy Assessment types; the BPI-Building Performance Institute Energy Assessment, general clipboard assessment, and an Energy Assessment done with the Home Energy Rating Services (HERS) index. You may foot the cost of the Energy Assessment in full, or it could be rolled into the SELF loan, if approved and the loan is closed.
  3. All Elements – Gary Carmack. He provides an all-inclusive on-site inspection of the home and conducts an analysis of it as well as recommending energy-saving products. He provides three different Energy Assessment types; general clipboard assessment and two levels of the BPI-Building Performance Institute Energy Assessment. You may foot the cost of the Energy Assessment in full or it could be rolled into the SELF loan if approved and the loan is closed.

Here is a product list of Eligible Projects Financed by SELF

1. Window & Storm Mitigation:

  • Dry Wall Repair
  • Water Barriers: Roof Soffit Vent Sealing, Flashing
  • Doors and Garage Doors
  • Impact Windows
  • Hurricane Clips/Straps and Roof Anchors
  • Roof Repair and Reinforcement, Hail Protection
  • Building Envelope
  • Hurricane Shutters and Fasteners

2. Energy Efficiency:

  • Water Heaters: Tank, Tankless & Instant
  • Air Conditioning Units
  • Insulation
  • Duct Sealing
  • Window Tinting
  • Weatherization Package: Weather Strips, Sealing and Caulking.
  • Indoor/Outdoor Lighting
  • Pool Pumps & Motors

3. Indoor/Outdoor Water:

  • Low Flow Toilets/Showerheads/Aerators
  • Rain Water Barrel/Cisterns and Reclamation
  • Irrigation Package: Timers, Sprinkler Heads, Soil Moisture Sensors, Drip Irrigation and Irrigation Controller.

4. Roofing and Roof Repairs

  • Garage Doors
  • Windows
  • Doors/Door Frames

5. Solar Energy:

  • Solar Attic Fans
  • Solar Water Heaters
  • Solar PV Panels
  • Solar Pool Pumps & Pool Heaters

SELF is changing the world we live in one energy improvement at a time. The drive to create a positive economic, environmental and social change has impacted many communities and individuals, and will continue to do so. People’s health, safety and even the quality of life in their homes have drastically changed the process, yet is relatively affordable considering the cost of savings they will gain in the long run, not to mention the effect it will have on the environment and the atmosphere’s carbon footprint.

If you would like to apply for a SELF Loan, click here.

Department of Education Requests Congress to Eliminate PSLF

Department of Education Requests Congress to Eliminate PSLF by Summer of 2018

For students, graduating with a degree is the endgame. However, what comes after that might not always be in the graduate’s best interest. After taking out loans to help pay for college, graduates sometimes find it difficult to pay back those loans, which was what began the initial PSLF program. The new White House administration has begun to make some changes to this program, with plans to even do away with the program entirely. With these new statements, students might be wondering what this means for them in the future.

With so many people confused about what this will do for borrowers in the future, it is probably best to dive in further to truly understand what the elimination of the PSLF will do to education in general, borrowers, and current student graduates in the program right now. There isn’t much information about what is to come because no one knows. While the decisions are being made, there is much that students can do to prepare for such an event happening.

What is the PSLF?

The PSLF is just a quick way to say Public Service Loan Forgiveness, which is a program that was created to help provide loan forgiveness to students who were not able to pay back their loans promptly. According to Slate, students could have all of their debts erased by simply working for ten years for a nonprofit or government organization.

When this program was created, the idea was to encourage more students to go into public service jobs, but it hasn’t worked the way it was intended. Instead, it has been criticized without considering the impact that the program has on the government as well as the student borrowers in the program.

The program also has steep and ridiculous guidelines that make it difficult for many students to access the help. What good is it doing for most students anyway?

Before the change in office, a plan had been proposed to put a cap, or a forgiveness limit, on the program because many borrowers were using the program to earn forgiveness for hefty debts after obtaining expensive degrees from expensive colleges. The cap was never fully into place, which is what spawned the idea for the new Secretary of Education to completely do away with the program.

Many people are upset with the new Secretary saying that her actions are diabolical, but consideration for the cap that almost went into place by the former secretary would prove that the program would have only alleviated some of the student loan debt for borrowers. The program would have been all but gone anyways.

Department of Education’s Plan

Since the forgiveness program came into being, many people have looked negatively at the program, but some have begun to look negatively at the closing of the program as well. IN a way, it seems as though the Department of Education can’t win for losing in this situation. No matter which decision they make, they will not make everyone happy at the same time.

The fact of the matter is, the Department of Education will need to consider the economy when making the decision. Since the common people can’t make the decision for the Department, they should instead prepare as much as possible for what might come in the next year. The amount of preparation needed would certainly depend on how much was borrowed and how much money students are expected to make after graduation.

The plan is to completely get rid of the PSLF program. There will no longer be a way to work off the debt at nonprofit or government-owned businesses, and there will no chance for borrowers to easily pay off their debts. For some, this might seem a little harsh, but when looking at the bigger picture, it can be beneficial.

Times had changed considerably since 2007 when this program was initiated. Job creation is rising once again, and this might make paying back loans easier since finding a job is not as difficult as it has been in past years. Though the Department of Education’s plan might not seem like the best idea right now, in the long run, it might be the best decision for student borrowers.

Market Watch has compiled a short article speaking of only the negative aspects of this change to the program, but what they don’t mention is how much it will aid the economy in years to come. The students who have been in the program for a few years have expressed their concerns about the elimination of the program in the future, and they even make a few good points. However, they still never mentioned the impact this program has on the economy. The country, while trying to get out of debt, is simply wiping away debts of others, which is increasing the debt of the country as a whole. The money borrowed by students has to come from somewhere, and the money given by the government has to come from somewhere. With more money going out than coming back in because of this program, the economy has suffered.

What will this do for Students?

What will the ending of the PSLF program do for students? That question is quite hard to answer. For students in school right now, it can mean the opportunity to plan, which is what student loan and financial aid offices at the colleges are supposed to do.

Students can work toward a goal of paying off their loan faster by signing up for different activities that might look good on a resume. Since many students have been struggling to find a job, it can hinder their loan payments after graduation. However, by implementing student organizations to help plan for the future after graduation, students can leave better prepared than ever before.

For students who are already graduated, learning to balance loan payments and other expenses is something worth looking into. Financial counselors can help get graduates on the right track by setting up a payment plan based on their monthly pay.

For those who might already be enrolled in the program, the Department of Education has not exactly spoken of what will happen to those should the program be disbanded. However, it has been mentioned that these students would likely be grandfathered into the program until their debts have been paid, especially for those who have been in the program for quite some time now.

What can be expected by Next Summer?

Since the program has been expected to be gone by summer of 2018, there is a lot to expect by next summer. A new wave of graduates will exit colleges all over the country in the fall, spring, and summer of the 2017-2018 school year.

When next summer rolls around, many graduates will find themselves searching for a job, looking for a way to pay back their loans, and probably wondering why they did it all in the first place. However, when people stop to think about it, there will be other programs of this sort to help students in a sticky situation.

Financial planning, financial help, and more will be available for those who need the help after graduation. The PSLF will not be the only loan forgiveness program, for those who might be concerned about losing their chance for help.

For everyone else, it is only going to strengthen the economy to help make it easier on these students to pay back their loans. More jobs might be created, the national debt might lower, and overall the economy might drastically change. It is still too early to tell what to expect by next summer. The idea to disband the program might be overturned, giving some people the peace they needed. The program might be cut completely, giving others the peace they needed.

The Public Service Loan Forgiveness program has been around since 2007, helping students get their student loans forgiven just by working for nonprofit of government companies for ten years. While it started out as a great way to get students involved in public service, the program has been failing for quite some time.

Because student borrowers have been taking advantage of the program to eliminate all of their student debt, the Department of Education has made a motion to disband the program.

Many students are not excited about this change in the loan forgiveness program because it might prevent help to those who need it or even leave those in the program already stranded with a hefty loan still outstanding.

While it is hard to say what will happen in the coming months, it is possible that other loan forgiveness programs will spring up, free of government control. It is also possible that the economy will grow after the elimination of this program. However, there isn’t much that can be said to prepare students for the future. Instead, students should always be prepared to pay back their student loans six months after graduation.

Clean Energy Loans Could Mean a Boom in the Economy

Clean energy is the biggest and newest thing in our modern culture. With the fall of the coal mines and using coal for fuel, people have been looking for a way to create more energy through less evasive means that might clog up the atmosphere. So many changes have been made in the search for the things needed to bring clean energy into modern homes. There are many different forms of clean energy as well, meaning that everyone can be unique in their choices for clean energy.

Many homeowners are even looking for ways to fund their clean energy actions to help make their home more efficient and even cheaper in the long run. Just like when buying a car, obtaining a loan can help lift the stresses of coming up with the funds up front. Before you prepare to get your clean energy loan, you need to understand the process and how they could benefit the economy. Below is a little more information about the topic of clean energy loans and how they could create a boom in the economy.

What is a Clean Energy Loan?

Clean energy loans are a method of obtaining money to convert homes or buildings into more energy efficient places by using clean energy. If you don’t know what clean energy is, then keep reading. You’ve probably seen solar panels that are used to harness the energy from the sun to create light or other things in the home. This is the basis of clean energy. However, clean energy is not limited to solar power. In fact, clean energy can come from water, the wind, and even the heat outside. Clean energy comes from natural resources that don’t have to be mined to obtain.

A clean energy loan is similar to a regular loan, but it is used only for the purpose of increasing the clean energy technology which is innovative and exciting at the same time. Renovating your home to include clean energy technology can be expensive, especially if you are paying up front for the entire system. In this case, having a loan would help alleviate the pressures of the cost of this technology. If you take a look at Energy.gov, you will find more information about Title XVII which is the new program to help provide financial support to the clean energy projects around the world.

What are the Benefits of Clean Energy Loans?

The benefits of clean energy are not exactly hidden. In today’s culture, with the rise of everything clean and efficient, clean energy seems to be at the forefront. By doing away with the excessive use of coal, homes can be heated faster and for longer without problems. By using solar power to run homes, homeowners can save money just by swapping to a natural source. There are many benefits to the homeowner, but there are benefits for the globe as well.

With the use of natural resources that do not have to be mined, the atmosphere will no long change as quickly, and the soil might not be as quick to fall away. You’ve probably heard of global warming from all of the fuels in the air. Well, consider what clean energy would do to the atmosphere. The use of water energy might bring about more rain showers once the water cycle is moving faster again, and the droughts might become few and far between. Many of the benefits of clean energy will take years to be noticed, but each little change helps. The earth is not the only thing that will benefit from a clean energy change.

How Will the Economy be Changed?

The economy will also experience a change with the inclusion of clean energy into homes and businesses. One of the biggest changes that might happen to the economy is the creation of multiple new jobs. In fact, this change is already beginning to play out, and clean energy jobs have surpassed that of coal mining jobs across the country. If you take a look at Clean Technica, you will see just how well this clean energy project is creating so many new jobs for many people.

Another benefit of clean energy in the economy is an imminent boom. It has been noted that clean energy can bring about a boom in jobs, which will also bring about a boom in other things in the economy. It can also help homeowners save money in the long run, which can be beneficial to them by allowing them to buy more, which might increase demand and lower prices on other items in stores. All-in-all a change to clean energy is the best route to get the economy boom and change that many people are striving for.

How to Get a Clean Energy Loan

If you are prepared to get a clean energy loan to help transform your home into a more energy efficient living place, then there are certain steps you need to take. First, you need to find out if your local loan provider gives out loans of this type. Since clean energy loans are somewhat new, your provider might not be able to provide a loan for this sort of purchase. If you need to, you can contact American Savings Bank for your clean energy loan.

Just like when you are getting any loan, you will want to compare rates. To be more cost efficient, you will want the best rate available to you. Another thing to consider is the amount of loan that you can get. Since many places don’t yet recognize clean energy loans as valid, you will want to find a place that offers a clean energy loan in the amount that is going to fit your needs. If you want to completely redo your home with clean energy technology, then you will need a larger loan. If you are only going for a partial renovation, then a smaller loan amount might be a better option.

What Now?

Once you have decided which clean energy technology you wish to use and after you have gotten your clean energy loan, you might wonder what to do next. Just like when building a house or renovating, you will begin by speaking with the company that will install your new system. They will be able to explain how the process will work, what you will need to do to take care of your new system, and how it will connect to your home.

When it comes to the loan portion of your clean energy system, you can discuss with your provider what your rates are, how much your payments will be, and when they will be due each month. By getting all the information you can on both sides of the spectrum, you can make sure that you will be less likely to become confused about the way that your clean energy system works.

Clean energy is a new and exciting technological advancement that makes it easy to obtain energy through natural means. Instead of spending tons of money on other sources of energy, homeowners can now update their homes to function by using clean energy means such as solar power, water power, wind power, and more. Since incorporating clean energy can be expensive, many loan providers have made it easy to get the money you need to purchase and install a clean energy system.

Through clean energy loans, any homeowner can obtain the money they need to renovate their home to meet clean energy standards. Not only will this eventually benefit the earth, but it will also benefit the home owners themselves and the economy with a rise in jobs and savings in the average person’s bank account. By getting a clean energy loan yourself, you could contribute to the imminent rise of the economy, and you might even be helping save the world.

What is PACE (Property Assessed Clean Energy) and How to Apply?

What is PACE (Property Assessed Clean Energy)

PACE (Property Assessed Clean Energy) is an effective way of financing renewable energy, energy efficiency upgrades, and water conservation upgrades to commercial, residential and industrial property. This financing program base its functions on the land secured financing district also known as assessment district or local improvement district. This body allows the local government to issue a bond to finance public intended projects, like street lighting or sewer and underground developments. However, recent transitions have seen this financing model extend to renewable energy and energy efficiency, which allows property and business owners to make improvements on their premises without an up-front payment, which is not affordable.

PACE can be utilized to fund building efficiency improvements such as cool roofs, hurricane preparedness measures, insulations and air sealing, water efficiency products, and seismic retrofits, depending on State legislation. Some examples of the upgrades are LED lighting and roofing for the commercial projects and adding more attic insulation or installing solar panels on the roofs in residential units.

PACE assists homeowners and business owners to finance renewable energy and energy efficiency projects for their property. It is a voluntary program whereby the business or home owner receives financial aid from his/her local government to take care of the upfront cost of energy improvements. The owner in exchange pays back the cost through a special assessment done on their property tax over a period. This period could be a couple of years or even a couple of decades. The loan is tied to the property and not the owner; which means that in the unfortunate event of foreclosure, the loan repayment is given priority to be repaid before any other claims to the property. The obligation of repayment also stays with the property so that if the owner sells their property, the new owner takes up the responsibility of paying back the loan and assumes ownership of the product. This is beneficial to home and property owners who are ever hesitant in making new changes for fear of moving without first recovering the amount spent on the changes.

The financing is processed just like other local public benefit assessments, sewers, sidewalks, have been processed. It is repaid as an evaluation on individual or company property’s tax bill. It can be used for nonprofit, commercial and residential properties depending on local legislation.

Commercial Property-Assessed Clean Energy Programs

Although not yet fully implemented in all states or regions of the US, some are already enjoying the benefits of commercial PACE programs. The program utilizes the availability of financing bodies to further their course. However, some of the programs are still new and have not yet funded significant volumes. Other places, on the other hand, have seen million-dollar improvements. Boulder County’s Climate Smart Loan Program and the Sonoma County’s Energy Independence Program (SCEIP) are two good examples.

Residential Property Assessed Clean Energy Programs

This type of PACE program has over time received enough criticism and strict regulatory measures. Some domestic PACE operations through the Federal Housing Finance Agency(FHFA) have been suspended. The feeling that PACE programs have a superior lien status than that of an existing mortgage caught the housing finance’s attention. What this meant is that supposing one defaults, all the remaining PACE assessment amount would the prioritized and paid off first before the original deeds of trust, even though it shouldn’t necessarily be the whole financed amount. This stopped several PACE programs except for few pilot ones. Luckily, the commercial sector remains intact.

How Does Pace Work?

It is a national initiative in the US, yet the programs are locally established and are tailor-made to cater to the regional market requirements. Municipalities are authorized by approved state legislation to establish PACE programs. Local governments have in turn developed different program models, which have been implemented successfully. No matter the model, similarities, and points do not change for all PACE programs:

  • PACE programs are voluntary for every individual/company involved.
  • Loan repayment can go up to 20 years.
  • The program can cover 100% of a project’s costs; both hard and soft.
  • Energy projects will be permanently fixed to a property regardless of a change in ownership.
  • You can combine PACE programs with local, federal and utility incentive programs.

The success of PACE programs

There have been numerous pilot programs in different US states, and they have shown that PACE properties tend to have lower rates of foreclosure, an increase in energy savings and have provided many benefits that are in line with the overall PACE policy objectives. PACE was first introduced in pilot programs in 2008. Today, over 30 states have authorized the launch of PACE programs. These programs have led to creating hundreds of jobs and investment of millions of dollars.

Pace has become so popular among property owners because it enables them to fund projects with no costs from their pockets. Since you can repay the loan in up to 20 years, a property owner can add components to the projects that are comprehensive and have significant energy savings, which significantly impact the result. The energy savings that a PACE project gets annually exceed the annual assessment payment most of the time. This assures the property owner immediate positive cash flow. This gives room for surplus cash that can be used to further other projects or expand the business.

PACE is also a local government favorite because of the low cost of doing business in the community brought about because it is an Economic Development Initiative. It promotes investments by new business owners in the area, and the positive impact that it has on the environment is a plus.

The Application Process

PACE programs are a long-term solution offering private financing for homes and businesses that wish to invest in renewable energy and upgrades to their energy efficiency. In the US, PACE-enabling is currently active in 33 states plus Washington D.C. PACE programs were launched and are operating in 19 stated plus D.C. Presently, residential PACE is offered in the three states of Florida, Missouri, and California.

You can apply for PACE at a state level. Once you have confirmed whether or not your state is PACE active, the next step is to either physically visit or go online.

The application process is relatively simple involving filling in an application form. Here are the application instructions:

  1. l out the full online application by downloading the files.
  2. Mail or deliver the completed application to the appropriate PACE state offices. You also have the option of emailing the PDF version of your application to your state PACE website.
  3. All applications will be processed once received. If you have an incomplete or incorrect application, the application will not be processed. Once re-submitted, the application shall be treated according to the new receipt date.
  4. If you submit an online application, you are to receive an email from you state PACE representative within 24hours. If you don’t, contact the office to ensure that your application was successfully submitted and received.
  5. You have to apply, get approval and execution before financing is available.
  6. Always keep a copy of the completed Aapplication, receipts, documents and paid invoices.
  7. If you have any questions regarding your application status, do call or email a PACE representative.

Pros and Cons of PACE

There are advantages and disadvantages when it comes to PACE. Before making the decision, you should weigh them both to ensure that the decision you make is well informed.

Pros

  • Loan repayment is stretched out over a period of many years and eases the burden by allowing the sale or refinancing without the requirement of full debt repayment.
  • PACE financing is a safe method of funding large scope projects over extended periods of time. This makes more have a more cash flow positive curve.
  • Municipalities are allowed to encourage renewable energy and energy efficiency without placing the general funds at risk
  • Some property owners get assistance by having the payments deducted from their income tax liability.
  • It could lead to low-interest rates since there is high security backing up loan repayments that are linked to the US property tax bill.
  • Utilizes large sources of private capital, e.g., municipal bond markets.

Cons

  • There is high administrative and legal setup.
  • Financing is only available to property owners.
  • The loan is not applicable to portable items.
  • It may require taking up dedicated local government employee time.
  • Investments below $2500 are not suitable.
  • Lenders/Mortgage holders may bring in resistance because their claims to the property have lower priority to the outstanding assessment amount in the event of foreclosure.

In as much as the PACE programs continue to grow amidst the few challenges in the residential sector, it still remains unclear whether the department of energy will continue to support the program to ensure further developments. Nonetheless, should the support be unforthcoming, PACE will still be the local and state initiatives that would not depend on the department of energy entirely. It still remains as one of the most revolutionary and potential growth in many states.

Student Loan Interest Rates Rise for the First Time Since 2014

A Snapshot of America’s Student Loan Debt

Student loans and student loan debt are a topic of frequent political and educational debate. Different organizations and political parties differ in their perception of the problem and how to resolve it. However, they do agree on one thing: more and more students are taking on student debt.

As of 2017, American students collectively owe more than $1.4 trillion dollars in student loan debt. The average amount of money loaned per student rose 6% from the graduating class of 2015 to 2016, with the average student owing just over $37,000. This amount is expected to rise again for the class of 2017. Nearly 66% of public university graduates took out student loans. 75% of graduates from private, not-for-profit universities took out student loans. At private, for-profit universities, 88% of students took out student loans.

Furthermore, 11.2% of student loan holders are delinquent, meaning that they are 90 or more days late on a payment. This means that more than one in 10 students who take on debt for their education are unable to repay their debt. This is an intimidating prospect for future students and graduates because federal interest rates are set to rise for the first time since 2014.

Student Loans Set to Rise

Starting July 1st, interest rates for federal loans will rise. Undergraduate Stafford loan rates will increase from 3.76% to 4.45%. The graduate Stafford loan will increase to 6% from 5.31%. Current students can borrow at their current rates and current loan rates will not change. However, all new federal loans taken out on or after July 1st will be subject to these new interest rates. These changes will affect students entering college for the first time or current students who need to borrow additional money.

Federal PLUS loan interest rates, which are available for parents of students, are also set to increase. On July 1st, PLUS loan interest rates will rise to 7%.

Federal loans may continue to arise each year as they are tied to the market rather than set specifically by Congress. This means that interest rates for students who need to make new loans may increase. However, Congress did set a loan interest rate ceiling at 8.25% for undergraduates and 9.5% for graduate students. Similarly, Federal PLUS loan interest rate caps are set at 10.5%. Again, it is important to note that rates for each loan are fixed. Loan interest rate increases only affect new loans.

Effects of the Increasing Federal Interest Rates

Increasing student loan interest rates will have several effects on borrowers and potential effects on the economy. Perhaps most obviously, students who follow the standard or graduated repayment plans will pay more to borrow the same amount of money. There is no penalty for repaying student loans early, so students who can afford additional loan payments or early an early loan payoff can negate some of the effects of the increased interest rates.

There is some speculation that increasing federal student loan interest rates will hurt taxpayers. There are several income-based repayment programs that enable students to make less than the standard minimum repayment. Some students use these programs temporarily if they are unable to find employment. Other students use these programs for 20 years and have the remainder of their loans forgiven. The amount per payment is income-based, meaning that the amount students would pay monthly would not be influenced by the increased interest rate. For students whose loan is forgiven, this means that a larger percentage of money owed and larger dollar amounts would be forgiven. This could result in a decrease in the federal government’s revenue from student loans.

How to Prepare

There are several ways that potential student loan borrowers can negate some of the effects of the increasing student loan interest rates. First, students can explore various scholarships and grants. By dedicating time now to finding and applying for scholarships and grants, students can decrease the amount of money they will need to borrow and therefore repay.

Second, students can apply for part-time work-study positions, on campus positions, and off-campus jobs. Pay isn’t always luxurious but money paid upfront for tuition, room and board, textbooks, and other related expenses is interest free.

Finally, students can make financially-conscious decisions about where to attend schools. Students should look seriously at the cost of tuition, scholarships and grants that they have been offered, whether those scholarships or grants will continue after their first year, and the cost of living in the school’s area. Students can also examine the median income for their expected career, loan forgiveness programs available to them, and their expected monthly student debt payments. Expensive is not always better and students may find themselves moving towards more affordable options as interest rates continue to rise.