October may be spooky season, but there’s no reason to let your finances frighten you this month.
For this installment of Money Moves, we’re skipping the typical “do your holiday shopping early” and “book your flights ASAP” advice that you’re likely bombarded with every October. Instead, we’ll focus on a few critical tasks that you don’t want miss amid all the seasonal noise.
If you want to get rid of student debt or keep inflation from eating away at your savings, pay close attention.
Here are the money moves you should make in October.
1. Understand your student debt relief options
Barring any legal hurdles, broad student loan forgiveness is on its way for tens of millions of student borrowers. If you have student loans, you’ve likely heard you can apply starting this month. What you may have missed: a lesser-known deadline for debt forgiveness for public service workers is also approaching at the end of the month.
Consider this section a catch-all for student debt forgiveness tasks.
Public Service Loan Forgiveness (PSLF) limited waiver
The PSLF program forgives remaining student debt for government or nonprofit workers after 120 payments (10 years’ worth) in an eligible repayment plan. Complex eligibility rules have made it difficult, so far, for many workers with public sector jobs to qualify, but the Biden administration temporarily made it much easier to get forgiveness. The changes could wipe out debt for a half million borrowers — but only if they submit “limited waiver” paperwork by Oct. 31.
Biden’s broad student loan forgiveness program
Almost anyone with federal student debt who made less than $125,000 in 2020 or 2021 is eligible for up to $20,000 of debt forgiveness (for Pell grant recipients) or $10,000 (for non-Pell borrowers). Officials have said that the Education Department has the necessary income information on approximately 8 million eligible borrowers, and their relief will come automatically. Everyone else will have to apply for student loan forgiveness after the application opens in early October.
If you have older loans, take note: While the administration originally said all borrowers under the income threshold would qualify, on Sept. 29, the Education Department changed the rules. Now borrowers with commercially held Federal Family Education Loans can no longer qualify.
2. Fill out the FAFSA ASAP if you’re going to college in 2023
The Free Application for Federal Student Aid, aka the FAFSA, opened Oct. 1, as it does every year. The application has a reputation for inspiring dread in students and parents alike, but the reality is that it takes most filers about 20 minutes to an hour to complete. (Plus, Money has a step-by-step guide to help you fill out the FAFSA.)
Every student who’s going to attend college in the 2023-2024 academic year should apply, even if they don’t think they’re eligible for any financial aid.
Completing the FAFSA is necessary to receive federal student loans, grants and work-study jobs. Individual states and colleges also use the FAFSA to award their own forms of aid. Technically, you have until June 30, 2024, to complete the latest FAFSA, but don’t put it off: Award money — especially at the state level — can be first-come, first-served.
3. Don’t miss out on saving at record 9.62% rate
All good things must come to an end. Yes, that means it is just about time to say goodbye to the record-setting 9.62% interest rate on Series I Savings Bonds, aka I bonds.
I bonds are intentionally built to protect your money from inflation. As such, part of the overall interest rate is pegged to inflation, and the interest rate for I bonds is recalculated every six months to keep up with current prices. This rate change happens on the first business day each May and November.
Come November, the interest rate on I bonds is expected to dip since inflation has begun to cool recently (though the interest rate will remain high compared to pre-pandemic years). The good news is that you have until the last business day of October to purchase up to $10,000 worth of I bonds at the current 9.62% rate — and you will get that rate, guaranteed, for six months.
No stock or savings account can guarantee that. Of course, there are some caveats to buying I bonds you should know about: Namely, you won’t be able to cash them out for a year, and the only way to currently buy them right now is online through the Treasury Department at TreasuryDirect.gov (and it’s, um, clunky to say the least).
For more pros and cons and a step-by-step walkthrough, check out Money’s guide to buying I bonds.
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