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Payday Alternative LendUp Owes $6.3 Million for Misleading Borrowers

LendUp, an online lender that promised friendlier alternatives to high-cost payday loans, will pay $6.33 million in refunds and fines for violating consumer finance laws.

LendUp, which operates in 24 states, will refund $1.83 million to more than 50,000 borrowers as part of the federal settlement, the Consumer Financial Protection Bureau announced Tuesday. In addition, LendUp will refund California customers $1.62 million as part of a separate settlement with the California Department of Business Oversight.

The company will also pay $1.8 million and $1.06 million to the federal bureau and California department, respectively, to cover penalties and other costs.

What LendUp promised

The San Francisco-based lender is part of a wave of tech companies that promote a less toxic form of payday loans.

Traditional payday loans don’t require credit checks, but do carry triple-digit interest rates and are due in a lump sum on the borrower’s next payday. Borrowers can renew them at the same high rate by paying the interest. Payday lenders don’t report on-time payments to credit bureaus, but delinquent payments can be a black mark on borrowers’ credit reports.

LendUp promised its customers they could build credit or improve their credit scores using its small-dollar loans, which carry annual percentage rates of more than 100%. Borrowers who finished education courses and improved their scores could move on to less expensive loans, climbing what LendUp called the “LendUp Ladder.”

But LendUp didn’t properly report payments to credit bureaus for at least two years after it began issuing loans, preventing borrowers from improving credit, according to the bureau.

Though widely advertised, the company’s cheaper loan products weren’t available to all borrowers, and LendUp didn’t clearly disclose some fees in its APR, the bureau said.

In a statement, LendUp said the bureau’s review “addresses legacy issues that mostly date back to 2012 and 2013, when we were a seed-stage startup with limited resources and as few as five employees. In those days we didn’t have a fully built-out compliance department. We should have.”

What customers can expect

LendUp will contact customers about their refunds in the coming months, according to the bureau. The lender’s website was inoperable at least part of Tuesday, but it offered contact information for affected customers. Borrowers with questions about the settlement can call 1-855-2LENDUP or email questions@lendup.com.

California residents have already received $1.08 million of the $1.62 million LendUp owes, the California Department of Business Oversight said. Those who haven’t gotten refunds yet will receive an email and must respond with bank account information or a home address within 20 days to receive their money.

In California, the company is required to maintain evidence that customers were notified about and received their refunds.

Nationally, LendUp will make changes to its fee and rate disclosures and discontinue some products and advertisements.

Alternatives to payday loans

Payday loans are useful when you have poor credit and need cash quickly, but they come at a heavy price. Seventy percent of borrowers take out a second loan and more than a third of borrowers end up defaulting, according to CFPB data.

Even lenders with good intentions, including LendUp, charge high APRs. Fig Loans, Oportun and other payday alternative lenders all charge rates of more than 100%.

Consumer advocates warn customers to be cautious about new lenders and avoid loans that carry rates of more than 36%, widely considered the upper limit of affordability.

“The LendUp case makes clear why a 36% rate cap is the only solid protection against high-cost lending,” says Lauren Saunders, associate director at the National Consumer Law Center, a nonprofit advocacy organization.

If you’re considering any kind of payday loan, look into other alternatives first:

Longer term, start building your emergency fund. Even $500 is enough to deal with most financial surprises, says NerdWallet personal finance columnist Liz Weston.

Amrita Jayakumar is a staff writer at NerdWallet, a personal finance website. Email: ajayakumar@nerdwallet.com. Twitter: @ajbombay.

Sean Talks Credit: Is 20 Cards Too Many? Here’s How to Streamline Your Wallet

I have a lot of credit cards. Between my wife and me, we have 20, to be exact. We’ve each had cards in our names since we started college and have added to the collection nearly every year since.

But we don’t actively use many of those cards, so I decided to streamline our wallets. My goal? Decrease the number of cards without jeopardizing our credit scores. My target was to keep three to five of the accounts.

My first step was to identify all the cards we use regularly. The next steps were designed to protect our credit scores: Set aside our oldest cards to preserve our longest-lived accounts. Then, out of what was left, save the cards with significant credit lines, with the goal of protecting our overall credit line and utilization ratios.

After all that, I realized my target was wildly off. Turns out we’re keeping 14. Here’s why.

Keeping the cards you use

I generally recommend consumers carry about three cards in their wallet, including:

  • One that optimizes for your top spending categories, like travel, dining or groceries.
  • One that optimizes for your favorite merchants, like stores, airlines or hotels.
  • One that earns a good flat rate on everything else.

To apply that logic to our 20 cards, we have two for our top spending categories: the Discover it® - Cashback Match™, my favorite rotating category cash-back card, and the Chase Sapphire Reserve℠, for travel and dining. For favorite merchants, we have three store cards and one airline card: the Amazon Prime Store Card, the Gap credit card, Target RedCard and the United MileagePlus® Explorer Card. Finally, we have the Citi®Double Cash Card – 18 month BT offer, my favorite flat-rate card, for everything else. That’s seven cards for our core wallet.

One more to add: I bought a Mac computer on a deferred-interest store credit card deal last February. It’s not a great card, and the credit limit is low, so I’ll close the card as soon as the balance is paid off. (Side note: Take care with deferred-interest credit card deals. If any balance remains when the introductory period closes, the entire interest balance is due. Always pay the balance off in full before the deferral period ends.)

If you’re keeping score, that’s eight cards retained so far.

Keeping cards for their old age

An important input to your credit score is the average age of your accounts, which basically helps the credit bureaus know how long you’ve been able to stay on top of your financial obligations. The higher this average is, the better, so retaining your older cards can help keep that average high, even as you open new cards.

Three of my cards are staying in my wallet — or, more accurately, my safe — only because I’ve had them forever. My wife and I each have a Wells Fargo Platinum Visa® Credit Card, mine with 11.3 years to my name and my wife’s with 8.1, making it the oldest card for each of us. I also have a Citi Simplicity® Card - No Late Fees Ever with 11 years of service, so I’ll keep that one, too.

An important note for keeping old cards on your credit report: You still need to use them periodically for them to help your score, for two reasons. First, if you ignore the card for too long, your bank can close it without notice. To avoid that, I recommend using each of your cards at least annually. Second, cards that have been inactive for even a couple of months are often not factored into credit scoring algorithms, even if they still appear on your credit report.

To avoid both of these problems, I make sure to spread all of my recurring bills like internet, Netflix, utilities, etc. across my otherwise inactive cards. This ensures regular, monthly charges, with virtually no thought on my part. It also has the added benefit that in case one of my regular-use cards is compromised, I don’t need to go through bill-pay setup all over again.

So that’s three more cards retained thus far, for a total of 11.

Keeping cards for their credit limit

Two important metrics in your credit score are overall credit line and credit utilization ratios. The second of those, especially, is a mouthful, but both are fairly straightforward.

Overall credit line is the total of all of your credit lines and essentially measures how much money banks trust you with. The higher, the better.

Credit utilization measures the amount of that total limit you actually use, essentially how much of it you need. This is measured both on a per-card basis and as the sum of all of your cards. The lower you can get this ratio, the better, but a rough rule of thumb is to try to keep both your per-card balances and the sum of all card balances below 30% of their limits.

A quick aside to illustrate: A few weeks ago I put a hotel stay on a card with a low credit limit, immediately bringing the balance to over 50% of the card’s limit. That mistake cost my credit score 15 points immediately.

Any cards I close at this point will hurt my credit by decreasing my overall credit limit and drive my credit utilization ratio up. So I want to make sure that none of the cards I cut is contributing significantly to these metrics.

After running my 20 cards through the two passes above, I was left with nine cards, three of which have significant credit lines. My Capital One® Venture® Rewards Credit Card makes up 16% of my overall credit limit; US Bank’s REI MasterCard® Credit Card makes up 12%; and my Chase Sapphire makes up 10%. So I’ll keep those around as well.

An important caveat on keeping cards just to protect your credit limit: If a card has an annual fee, it’s not worth it. Out of these three, the Capital One® Venture® Rewards Credit Card does have an annual fee, but I plan to try to get the fee waived or downgrade to a card that doesn’t charge that fee. If that approach doesn’t work, I’ll close the card and accept the credit ding.

So add three more cards, and the final tally comes out to 14.

Bottom line: Should you close spare cards?

There are a number of fair objections to closing cards; in most cases it’s best to keep them open. But for me, the only negative factor in my credit score is my low average history of accounts — meaning I’ve opened too many cards in recent years — so I want to boost that average. By cutting the six cards that didn’t make it through the three passes above, I’m increasing my average card history from 4.7 years to 5.4, which, according to NerdWallet’s credit dashboard, moves me from the “poor” to “average” range.

On the downside, cutting those six cards decreases my overall credit line by 17%. That’s a real loss, but since my overall credit utilization ratio will remain in the “excellent” range and I’ll boost my average history of accounts, I view this as a worthwhile trade with minimal negative impact to my credit score.

I can feel one nagging question remaining: Isn’t 14 cards still excessive? Yes, it is. But at this point I can’t backtrack without sacrificing my credit score, and I have little, if anything, to gain by that loss.

Fourteen accounts means a lot to keep track of, but it’s doable, by listing important account details in a spreadsheet and tracking each card’s transactions in a budgeting app. If you don’t think you can balance so many cards, or simply don’t want to, stick with a few cards you know you’ll stay on top of.

Ultimately, the right number of cards for you is, like all of personal finance, a personal decision. Pick cards that give you the most back for your purchases and keep less-favored cards in the lineup if only to boost your credit score. More rewards and a higher credit score are key ingredients to our common goal: financial freedom. Good luck.

Sean McQuay is a credit cards expert at NerdWallet. A former strategist with Visa, McQuay now helps consumers use their credit cards more effectively. If you have a question about credit, shoot him an email at asksean@nerdwallet.com. The answer might show up in a future column.

See How Much House $300,000 Can Buy Across the U.S.

Have you ever asked yourself, “How much house can I afford?” in different cities across the country? Well, in conjunction with Realtor.com, we’ve crunched the numbers for you to find out what $300,000 buys in the 20 largest metro markets in the United States.

What’s more, we’ve figured out how much you’d need to earn in those cities to afford a $300,000 home, assuming you can find one. You can thank us later.

In the gallery below, you can see actual listings from Realtor.com, as of Aug. 30, 2016, with an asking price of roughly $300,000. Click on the first image to open the gallery view and see the listing data for each property.

As you can see, your money goes a lot further in states like Texas and Georgia, with more than 3,000 square feet of legroom in some stately suburban McMansions. But in places like San Francisco, Los Angeles and Seattle, you’d be feeling a bit cramped; you’d be lucky to find anything over 800 square feet in those cities at this price point. Ouch.

To take the nerdy number crunching a step further, we asked Realtor.com to find out the minimum annual income needed to buy a $300,000 home in these markets. The income estimates are not a one-size-fits-all solution for each situation; the figures depend heavily on the size of your down payment, and they don’t take into account other debts a homebuyer might have. Keep in mind that the more money you put down, the less your loan amount will be — and that eases the pressure on how much you’d need to earn to afford a $300,000 in the nation’s 20 largest metros.

It’s clear that you’ll get more for your money buying in the South and the Midwest than on the East or West coasts, but the latter options have cities with booming economies and job markets that make them more attractive than some of their Southern neighbors, especially to millennials.

Keep in mind, though, that price isn’t the only consideration of where you choose to live. Think about job opportunities, crime, the local economy, schools, distance from family and friends, and home styles — all factors that might influence your happiness in a new home. Choose wisely, friends!

More from NerdWallet How to sell your houseCompare mortgage rates Find a mortgage broker

Deborah Kearns is a staff writer at NerdWallet, a personal finance website. Email: dkearns@nerdwallet.com. Twitter: @debbie_kearnsNerdWallet writer Caren Weiner Campbell contributed to this report.

4 Ways to Lower Your Cell Phone Bill

Have you ever opened your cell phone bill and thought, “Wow, that was cheap?” Yeah, didn’t think so.

But take heart: It’s possible to lower your charges before your next billing cycle.

Simple tweaks, such as updating your service address and changing or removing your insurance package can make small dents in your bill — and those savings add up over time. Changing your plan or even adding a line requires a little more legwork but can decrease your bill even more.

1. Change your plan

Goldilocks could relate to most cell phone users, who often struggle to find data plans that are just right. Often you pay for data you don’t need, or you don’t have enough data and you’re hit with overage charges.

Finding a plan that hits the sweet spot can save you hundreds of dollars each year. But before switching, figure out how much data you use. Take stock of your data use for the past three months, then research plans that fit that amount through your current carrier and its competitors.

Make this a habit to ensure you’re always getting the best deal. Keep in mind that wireless carriers change their plans regularly. Verizon, Sprint, AT&T and T-Mobile have all overhauled theirs in 2016. So the best cell phone plan for you a year ago might not be the best now.

Verizon added rollover data to its new plans and eliminated overage charges on some data packages. AT&T rolled out new plans in August that include more data for less money. AT&T also eliminated overage charges and added data options.

2. Add lines

This seems counterintuitive, because adding one or more lines will increase your bill. But splitting the cost with other people can lower the amount you pay overall.

Consider this: One line with 4 gigabytes from Verizon costs $70. Add a second line to that plan and your total cost is $90, or just $45 per person, before taxes and fees. That’s a savings of $300 per year per line.

Even if you bumped up to Verizon’s 8GB plan to accommodate the second line, you’d still pay just $55 per person per month before taxes. That’s a savings of $15 per month.

 Cost for one lineCost for two linesTotal savings (family plan vs. individual plan) AT&T$60 per month (3GB)$100 per month (6GB), $50 per line$10 per month, per line Sprint$50 per month (3GB)$85 per month (6GB), $42.50 per line$7.50 per month, per line T-Mobile$50 per month (2GB)$80 per month (2GB per line), $40 per line$10 per month, per line Verizon$70 per month (4GB)$110 per month (8GB), $55 per line$15 per month, per line

» MORE: How to share your cell phone bill with your roommates

That’s because Verizon charges a set fee for your data plan and $20 for each line on the account. The same is true for most AT&T and Sprint plans. And larger plans typically give you more data for your money.

3. Change or remove your cell phone insurance

Most cell phone carriers offer a variety of protection plans. Your options can include extended warranties, insurance and full-blown 24/7 tech support for any Bluetooth-enabled device in your home. If the latter sounds excessive, that’s because it is.

In most cases, standard insurance provides more than enough coverage. It protects you if your phone is lost, stolen or damaged. It’s also the least expensive option available through your wireless carrier.

Switching from a premium protection plan to basic insurance coverage will save you a few dollars each month. That might not seem like a lot, but it can add up, especially if you have multiple lines on your plan.

AT&T customers can save $36 a year by switching from the carrier’s Mobile Protection Pack, which costs $10.99 per month, to its Mobile Insurance, which costs $7.99 per month. That’s $144 in savings per year for a family of four.

» MORE: How to make money off your old cell phone

Remove the Mobile Protection Pack without switching, and the savings for a single AT&T line climbs to more than $130 per year. This could be risky if you have a brand-new phone, but it can make sense for older devices. That’s because insurance providers for major cell phone carriers typically charge deductibles ranging from $100 to $300.

After about a year, the deductible and the accumulated monthly premiums add up to more than the phone is worth. At that point, you can typically save money by opting out of insurance and buying a used phone if yours is lost or stolen.

If forgoing a policy makes you feel vulnerable, consider an alternative, such as AppleCare+ or SquareTrade. Either option can save you more than $180 over two years on a premium protection package and even more if you make a claim. The drawback: Neither covers lost or stolen phones.

4. Update your service address

The taxes and fees added to your bill each month are based on where you live. If you’ve moved to a new state, or someone on your family plan has, you could save big just by updating your service address.

A person who moves from Washington state to Oregon would save an average of $170 per year in wireless taxes and fees, according to a June 2016 NerdWallet study. Migrating from Illinois to Wisconsin? You’d pocket $103.72 in savings on average. Those figures are based on an individual cell phone bill; the savings would be greater on a family plan.

Updating your service address is easy. In most cases, you simply log in to your account and change it under your user profile, just as you would for your billing address.

Each of these options on its own can can give you quick relief on your cell phone bill, and you can combine them for larger savings. If you’re open to a bigger change for bigger savings, consider a prepaid cell phone plan.

Kelsey Sheehy is a staff writer at NerdWallet, a personal finance website. Email: ksheehy@nerdwallet.com. Twitter: @KelseyLSheehy.

A Winning Strategy for Saving on Your Holiday Flight: Book Early, Use the Right Credit Card

Booking holiday flights is never a feel-good experience. It’s more of a “ripping off the Band-Aid” experience. You click “Buy now” and wince. Afterward, you avoid looking at your credit card statements and try to focus on more cheerful things, such as family and eggnog.

But this year can be less painful, if you get an early start. The secret to paying less for your flight has two parts:

  • Minimize your airfare cost by booking early, traveling on nonpeak days and splitting your reservation.
  • Maximize your credit card benefits by using your card’s travel perks and either paying for your flight with rewards or qualifying for a sign-up bonus or 0% annual percentage rate deal.

Here’s how you can do that.

Minimize your airfare cost

Simple economics tells you that when demand for tickets increases, airlines will increase prices. But you can generally avoid the worst of those high holiday airfares by booking early.

Buy tickets in October, at the latest

“In general, September is the best time to buy for Thanksgiving travel and October is the best time for Christmas,” says Jeff Klee, CEO of CheapAir.com.

The online travel agency, which tracks the daily average among 11,000 holiday airfares in 40 domestic markets, predicts that fares for flights around Christmas and New Year’s will dip in October by an average of $22. But in November and December, it expects those prices to increase sharply.

“It’s like playing the stock markets, in a sense,” Klee says.

Within those large-scale trends, all routes have their own ups and downs, of course. Once you know where you’re flying, watch for a drop in fares. If you see a good deal, Klee says, be prepared to buy, rather than hope for it to go lower, since the fare could spike back up at any time.

Consider traveling on a holiday

Sometimes, the cheapest holiday flights depart on the holiday itself.

For Thanksgiving travel, for instance, “The best time to fly is on Thursday morning,” says Rick Seaney, CEO of FareCompare, a flight deals website. If you leave in the morning, he points out, you may still be able to get to your destination in time for the festivities. In its analysis, CheapAir.com also notes that Christmas Day is one of the most affordable days to fly.

If you can’t stomach the idea of spending a holiday up in the air, consider flying on other less popular travel days. For 2016, these include Nov. 25 (Black Friday), Nov. 29 (the Tuesday after Thanksgiving) and Dec. 19-21, according to CheapAir.com.

Split your reservation

You might be traveling with a small army of relatives over the holidays, á la “Home Alone.” But that doesn’t mean you all have to be on the same airline reservation. In fact, you’ll probably save more if you split your order up.

Because of a quirk in many airline reservation systems, “Everyone on the same reservation has to be at the same price,” Seaney says. If you buy four tickets, for example, and two are at a higher price, you’ll end up paying that higher price for every ticket on the reservation. But if you make four separate reservations, you can get the lowest price possible on each ticket, he says. This can be a good strategy if you’re traveling with adults or high-school-age kids and you’re OK with sitting apart from one another.

Maximize your credit card benefits

Even if you get tickets that are relatively inexpensive compared with other holiday airfares, you still might end up paying plenty. Round-trip airfare now runs over $400 on average, according to CheapAir.com. This is where your credit cards can help.

Research your credit card’s fringe benefits

If you’re a once-a-year kind of traveler, take stock of your credit card’s travel perks before buying plane tickets and booking the rest of your trip. Some cards offer credits for airline fees or checked baggage fees, discounts for flying with a companion, rental car coverage and trip cancellation insurance. Taking note of these can save you from paying for add-ons you’re already getting and might lower your bill considerably.

Pay with flexible travel rewards

If you have points or miles sitting on your general travel credit card, the holiday season might be an ideal time to cash them in. Unlike with frequent-flier miles tied to a specific airline, you can redeem these more flexible rewards without worrying about limited award seat availability or poor redemption value during peak season.

Say you’ve been earning rewards on the Capital One® Venture® Rewards Credit Card or the Barclaycard Arrival Plus™ World Elite MasterCard®. You can charge your travel expenses to those cards and then use your rewards to erase all or part of the cost. If you’ve been sitting on points from a sign-up bonus for a while, this could save you hundreds on holiday travel.

Qualify for a sign-up bonus or 0% APR offer

If you can’t redeem your points or miles for a holiday flight, you can still upgrade your plastic.

Before booking your flight, look for a new credit card that offers high flat-rate rewards, a sign-up bonus, a 0% APR period on purchases or all of the above. Some triple-threat cards, including the Chase Freedom Unlimited℠ and the Capital One® Quicksilver® Cash Rewards Credit Card, do it all — and don’t charge an annual fee.

Once you’ve gotten your credit card, use it to book your flight. That might be enough to help you qualify for your sign-up bonus. And if you have a 0% APR period, you’ll have more time to pay down your bill interest-free.

Putting it all together

The less you have to worry about spending money on your holiday travel this season, the better.

Practically speaking, this is probably the best argument for planning your holiday trip early. If you dread paying for travel now, you’re going to feel the same way one month from now, or two months. And during that time, airfares will be getting more expensive, and you’ll have fewer credit card strategies at your disposal.

So, as with many of life’s decisions, it’s better to get it over with early. By the time the holidays finally roll around, you won’t have to worry about it anymore.

Claire Tsosie is a staff writer at NerdWallet, a personal finance website. Email: claire@nerdwallet.com. Twitter: @ideclaire7.

Mortgage Rates Today, Tuesday, Sept. 27: Rates Keep Dropping, New Homes in Demand

Mortgage rates just keep going lower. Thirty-year and 15-year fixed mortgage rates as well as 5/1 ARM rates saw notable dips, according to a NerdWallet survey of mortgage rates published by national lenders Tuesday.

Mortgage Rates Today, Tuesday, Sept. 27 (Change from 9/26) 30-year fixed: 3.57% APR (-0.04) 15-year fixed: 3.00% APR (-0.03) 5/1 ARM: 3.46% APR (-0.05) New home sales on the rise

What do you do when there’s not enough existing starter homes for sale? New data suggests homebuyers are increasingly choosing new construction. Sales of new single-family houses in August 2016 rose year-over-year to 609,000 units, according to estimates released jointly by the Census Bureau and the Department of Housing and Urban Development.

“New home sales for August were almost 21% stronger than August of 2015, and on a year-to-date basis, sales of new single-family homes are 13.3% higher than this time last year,” Robert Dietz, chief economist for the National Association of Home Builders, said in a news release. “The trend is rising for new home sales, and NAHB expects continued growth in the year ahead given tight new and existing home inventories.”

The NAHB reported that there were only 56,000 completed, move-in ready new homes on the market as of August, which isn’t enough to keep pace with the demand from buyers facing inventory shortages of affordable existing homes for sale in many metro markets.

Homeowners looking to lower their mortgage rate can shop for refinance lenders here.

NerdWallet daily mortgage rates are an average of the published APR with the lowest points for each loan term offered by a sampling of major national lenders. Annual percentage rate quotes reflect an interest rate plus points, fees and other expenses, providing the most accurate view of the costs a borrower might pay.

More from NerdWallet Compare online mortgage refinance lenders Compare mortgage refinance rates Find a mortgage broker

Deborah Kearns is a staff writer at NerdWallet, a personal finance website. Email: dkearns@nerdwallet.com. Twitter: @debbie_kearns.

5 States That Help Consumers Get Answers, Save Money on Insurance

When you have a question about insurance, you can sift through a mountain of search engine results or visit the website of your state’s department of insurance. Either way, you might not find the answer you’re looking for, unless you live in a handful of states where insurance departments are going the extra mile.

A recent NerdWallet study of all 50 states and the District of Columbia found that most state insurance department websites lack some of the tools and resources to help their residents make better insurance decisions and save money. But a few departments are doing far better than average.

The average state earned a score of 60% in the NerdWallet analysis, but the average score among the top five ranked departments was 91%. Texas scored the highest at 98%, followed by Kansas (93%), Colorado (91%), Maryland (87%) and Utah (86%).

The study looked at more than 20 different measures in four categories. The highest-scoring states were more likely to:

  • Have updated premium comparisons.
  • List updated insurance company complaint data for auto, health, homeowners and life insurance.
  • Offer consumer education resources.
  • Provide good phone help.

These features were also more comprehensive and easier to find on the top-scoring sites.

“Some insurance departments do a better job and are more committed to educating consumers and providing resources,” says Birny Birnbaum, executive director of the Center for Economic Justice, who added that all of the departments have room for growth.

All state insurance departments collect and resolve insurance complaints from consumers, monitor rate and policy changes, and set regulations to govern the industry. They are in a unique place to help local residents understand insurance.

Elizabeth Renter is a staff writer at NerdWallet, a personal finance website. Email: elizabeth@nerdwallet.com. Twitter:@ElizabethRenter.

54% of Arizona High School Students Didn’t Complete the FAFSA

More than half of Arizona high school students did not complete or submit the Free Application for Federal Student Aid in the 2014 application cycle, according to a study by NerdWallet, a personal finance website. Arizona’s rate of incompletion is higher than the national FAFSA incompletion rate of 45%, among students in all states and Washington, D.C.

The FAFSA is needed to determine eligibility for financial aid. NerdWallet found that in 2014 more than 1.4 million high school students nationwide didn’t fill out the FAFSA. By not applying, students miss out on federal, state and school financial aid, including student loans, scholarships, work-study and grants. Nationwide, in the past academic year, students missed out on $2.7 billion in free grant money, while Arizona high school students missed out on $68.2 million.

Arizona students will soon have a chance to improve overall completion rates and claim more grant money. The new start date to fill out your FAFSA is Oct. 1, 2016, for the 2017-2018 school year, giving students the chance to find out about financial aid three months sooner than in previous years. The U.S. Department of Education encourages students to submit an application as soon as possible since many forms of aid can run out. The cutoff point to submit the FAFSA will be June 30, 2018, but states and schools will have their own deadlines.

This year you’ll be able to use “prior-prior year” tax information to apply — that means 2015 tax info, not 2016. Use the IRS Data Retrieval Tool to automatically transfer tax information to your form. To speed up the process, make sure you have all other materials you’ll need to apply. You’ll also be asked to choose up to 10 schools that you want to receive your student aid report. You can do this by using codes found through the federal school code search tool or on each school’s website.

You can file your application online at fafsa.ed.gov. Before you apply, learn more details about the changes to this year’s FAFSA.

Anna Helhoski is a staff writer at NerdWallet, a personal finance website. Email: anna@nerdwallet.com. Twitter: @AnnaHelhoski.

37% of California High School Students Didn’t Complete the FAFSA

More than one-third of California high school students did not complete or submit the Free Application for Federal Student Aid in the 2014 application cycle, according to a study by NerdWallet, a personal finance website. California’s rate of incompletion is lower than the national FAFSA incompletion rate of 45%, among students in all states and Washington, D.C.

The FAFSA is needed to determine eligibility for financial aid. NerdWallet found that in 2014 more than 1.4 million high school students nationwide didn’t fill out the FAFSA. By not applying, students miss out on federal, state and school financial aid, including student loans, scholarships, work-study and grants. Nationwide, in the past academic year, students missed out on $2.7 billion in free grant money, while California high school students missed out on $342.4 million.

The California Student Aid Commission has a strong commitment to promoting FAFSA filings, and application completions for the California Dream Act and California Chafee Grant Program for foster youth. As the Oct. 1 start day looms, the commission is “fully engaged” in its early FAFSA campaign across the state, according to Patti Colston, a spokesperson for the commission, which helps up to 50,000 families complete applications. The commission runs hundreds of locally organized California Cash for College workshops annually to help families file for aid.

California students will soon have a chance to further increase overall completion rates and claim more grant money. The new start date to fill out your FAFSA is Oct. 1, 2016, for the 2017-2018 school year, giving students the chance to find out about financial aid three months sooner than in previous years. The U.S. Department of Education encourages students to submit an application as soon as possible since many forms of aid can run out. The cutoff point to submit the FAFSA will be June 30, 2018, but states and schools will have their own deadlines.

This year you’ll be able to use “prior-prior year” tax information to apply — that means 2015 tax info, not 2016. Use the IRS Data Retrieval Tool to automatically transfer tax information to your form. To speed up the process, make sure you have all other materials you’ll need to apply. You’ll also be asked to choose up to 10 schools that you want to receive your student aid report. You can do this by using codes found through the federal school code search tool or on each school’s website.

You can file your application online at fafsa.ed.gov. Before you apply, learn more details about the changes to this year’s FAFSA.

Anna Helhoski is a staff writer at NerdWallet, a personal finance website. Email: anna@nerdwallet.com. Twitter: @AnnaHelhoski.

53% of Texas High School Students Didn’t Complete the FAFSA

More than half of Texas high school students did not complete or submit the Free Application for Federal Student Aid in the 2014 application cycle, according to a study by NerdWallet, a personal finance website. Texas’s rate of incompletion is higher than the national FAFSA incompletion rate of 45%, among students in all states and Washington, D.C.

The FAFSA is needed to determine eligibility for financial aid. NerdWallet found that in 2014 more than 1.4 million high school students nationwide didn’t fill out the FAFSA. By not applying, students miss out on federal, state and school financial aid, including student loans, scholarships, work-study and grants. Nationwide, in the past academic year, students missed out on $2.7 billion in free grant money, while Texas high school students missed out on $327.8 million.

“Many are unaware this money can be for them,” says Jerel Booker, assistant commissioner for theTexas Higher Education Coordinating Board’s Division of College Readiness and Success. It’s an educational process, says Booker, to ensure that all students and families know what FAFSA could do for them, especially those most in need. Nearly 60% of students are economically disadvantaged in Texas, which has the second largest statewide population in the country.

The state has worked hard for it’s completion numbers, ensuring nearly half of its students apply for FAFSA, says Booker. This year, high schools are being challenged to increase rates of both college applications and FAFSA applications by 4%.

The commission’s Generation Texas initiative aims to help students of all ages and backgrounds get excited about going to college through social media campaigns, localized and regional events and devoting the entire month of November to promoting college applications and FAFSA completion. Another program, Advise Texas College Advising Corps, is aimed especially at ensuring low-income, first-generation or otherwise underrepresented students achieve postsecondary education. These efforts support statewide goals of ensuring 60% of Texans ages 25-34 have a postsecondary degree or certificate by 2030.

“We’re curious to see how the new FAFSA filing date will impact how we do business,” adds Booker. “We think it might be positive, but we won’t know for sure until this time next year.”

Texas students will soon have a chance to improve overall completion rates and claim more grant money. The new start date to fill out your FAFSA is Oct. 1, 2016, for the 2017-2018 school year, giving students the chance to find out about financial aid three months sooner than in previous years. The U.S. Department of Education encourages students to submit an application as soon as possible since many forms of aid can run out. The cutoff point to submit the FAFSA will be June 30, 2018, but states and schools will have their own deadlines.

This year you’ll be able to use “prior-prior year” tax information to apply — that means 2015 tax info, not 2016. Use the IRS Data Retrieval Tool to automatically transfer tax information to your form. To speed up the process, make sure you have all other materials you’ll need to apply. You’ll also be asked to choose up to 10 schools that you want to receive your student aid report. You can do this by using codes found through the federal school code search tool or on each school’s website.

You can file your application online at fafsa.ed.gov. Before you apply, learn more details about the changes to this year’s FAFSA.

Anna Helhoski is a staff writer at NerdWallet, a personal finance website. Email: anna@nerdwallet.com. Twitter: @AnnaHelhoski.

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