Finance Xpress

Posted by: John S Kiernan

Starwood Preferred Guest (SPG) is the brand name used for the Starwood Hotels & Resorts loyalty rewards program.  Starwood is among the largest hotel chains in the world, featuring 1,200 properties in roughly 100 countries across its 10 individual brands, which include luxury names such as Westin, Sheraton and W Hotels.

In addition to earning so-called Starpoints for each dollar spent on Starwood reservations and on-property purchases, SPG members also have the ability to accrue free nights while flying, riding or staying with Starwood’s travel partners.  Considering these Starpoints are provided on top of any rewards doled out by the partners, which include Delta Airlines and Uber, SPG membership represents an especially significant savings opportunity for strategically minded frequent travelers.

That’s just icing on the cake, though.  The real star of the Starwood rewards program is what you get in return for each Starpoint.  While most hotel points are worth less than 1 cent apiece, each Starpoint translates to roughly 2.4 cents when redeemed for a free night.  In other words, 50,000 points will get you about $1,250 in Starwood reservations, as opposed to less than $500 with another chain.

1. SPG Rewards Club Pros & Cons
2. How To Earn SPG Points
3. SPG Program Levels & Perks
4. How Much Are SPG Points Worth?
5. Redemption Options
6. Pointers & Pitfalls

SPG Rewards Club Pros & Cons

  Hotel rewards programs are complicated, often purposefully so.  That can make it difficult to identify which purported perks are really benefits or if any value-robbing loopholes are hiding within the fine print.  But don’t worry; we’ve done the homework for you.  Here’s what we like most and least about the Starwood Preferred Guest program:  

Pros	Cons
SPG points are worth more than twice as much as most hotel points	Few defined status perks beyond bonus points
Members can earn Starpoints when flying Delta or Emirates airlines, riding in an Uber, or staying at a Caesars Entertainment hotel	Annual point-earning limits
Ability to earn lifetime elite status	Points expire after 12 months’ inactivity
No blackout dates for reward nights (standard rooms only)	Fewer budget locations than other hotel chains
Starwood Preferred Guest® Credit Card from American Express offers $600+ initial bonus	-

How To Earn SPG Points

  Unlike some hotel programs, SPG’s earning rates don’t vary based on which of its sub-brands you happen to stay with. Instead, you will earn a consistent number of base points on every dollar spent with Starwood, plus bonus points in accordance with your status level.  Here’s how it works:

• Base Earnings: 2 points per $1 spent on reservations and amenities at SPG’s 10 hotel brands
• Bonus Earnings: Gold and Platinum members earn 1 to 2 additional points per $1 spent (see SPG Program Levels & Perks below for more info)

The only distinction between base points and bonus points is that limited-time promotions referencing a point multiplier (e.g., 2X points) apply only to base earnings.

Earnings Boosters:

There are a number of additional ways to rack up Starpoints that don’t necessarily require spending money on Starwood reservations or purchases during a stay.

• SPG Partner Purchases:  You won’t automatically be enrolled in these complimentary SPG earning initiatives, but signing up is certainly worthwhile if you can include any of the following providers in your travel plans:

	2+ Starpoints per $1 spent on rides when staying at a Starwood hotel; 1 Starpoint per $1 otherwise ($10,000 annual spending limit)
	1 Starpoint per $1 spent on airfare (Gold and Platinum members only)
	1 Starpoint per $1 spent on airfare (Gold and Platinum members only)
	2 Starpoints per $1 charged to your room (does not include gambling)

• Opening The Starwood Preferred Guest® Credit Card: Ownership of an Starwood Preferred Guest® Credit Card from American Express (American Express is a WalletHub partner) account can be a great complement to SPG membership, provided that you have good credit. You can learn more below.
• Make A Green Choice: Each day that you decline full housekeeping while staying at a Starwood hotel, you will receive 250 to 500 Starpoints. You can do this for up to three days in a row, but the day you check out can’t be included.
• Buying Points: This isn’t technically “earning,” but if you don’t have enough Starpoints to complete your chosen reservation, you always have the option of purchasing the remainder. Starwood doesn’t rip you off on this, either, charging $17.50 per 500 points (about 3.5 cents per point), up to a maximum of 20,000 points.

  That’s still more than Starpoints are worth when redeemed for hotel nights, however, so you don’t want to make a habit out of this.

• Transferring Points Between SPG Accounts: SPG members who share the same address can transfer points between their accounts without incurring a fee or losing points in the process. This can come in handy if you want to share a room on the road with a roommate and neither of you has enough points to redeem on your own.

Program Levels & Perks

  Entry-level membership in SPG is free, and all you need to do to join is provide some basic contact information and set up an account using your email address. But the more you stay at Starwood hotels, the more valuable your rewards become. Here’s a breakdown of how to qualify and what you’ll get in return.  

Tiers	Annual Cost To Qualify	Primary Benefits	Secondary Perks	How to Qualify For Lifetime Status
Preferred	Free	2 base points per $1 spent	Every 5th consecutive reward night is free Complimentary in-room Internet when you book directly through SPG Up to 30% off at SPG bars and restaurants	N/A
Gold	$1,729 (10 one-night stays* $172.88) 10 stays or 25 nights in a calendar year	2 base points and 1 bonus point per $1 spent	4 p.m. late checkout Welcome gift at check-in Free room upgrade All the perks of Preferred	250 total nights and 5 years of Gold status
Platinum	$4,322 (25 one-night stays* $172.88) 25 stays or 50 nights in a calendar year	If you stay 74 nights or fewer in a calendar year:  2 base points and 1 bonus points per $1 spent If you stay 75+ nights in a calendar year:  2 base points and 2 bonus points per $1 spent	Complimentary Sheraton Club and Executive-level privileges Personal SPG Ambassador concierge service after staying 100 nights in a calendar year All the perks of Gold	500 total nights and 10 years of Platinum status

*Costs are based on SPG’s $172.88 average daily room rate as of July 2015, the most recent data available. A stay is defined as a reservation for either a single night or two-plus consecutive nights.

SPG Pro:  You may confuse this with another status level, but SPG Pro is a business-to-business program reserved for professional meeting and event planners.

How Much Are SPG Points Worth?

  The value of SPG points, as with any rewards-program currency, isn’t constant. How much you get from a certain sum of Starpoints varies based on the manner in which you redeem them and when you decide to do so.

Free nights tend to provide the best value. You’ll get an average of 2.42 cents in SPG hotel reservations for each Starpoint redeemed with this option, or $242 for 10,000 points.  But, as you’ll see in the following tables below, strategic redemption can still help you get more bang for your Starpoint.  Details about other redemption methods can be found in the following section.

Point Values By Time Period & Destination  

 

City-Specific SPG Redemption Rates  

City	Number of Hotels*	Points Needed For A Free Night	Best Values	Worst Values
MOST POPULAR DOMESTIC DESTINATIONS
	9	Min:  3,334Avg:  9,815Max:  12,000	Four Points by Sheraton Chicago O'Hare Airport ($141 room for 3,334 points) Aloft Chicago City Center ($294 room for 10,000 points)	The Westin O'Hare ($202 room for 10,000 points) The Tremont Chicago Hotel at Magnificent Mile ($224 room for 10,000 points)
	22	Min:  10,000Avg:  14,909Max:  30,000	Sheraton LaGuardia East Hotel ($450 room for 10,000 points) Four Points by Sheraton Long Island City/Queensboro Bridge ($400 room for 10,000 points)	W New York - Downtown ($301 room for 20,000) Aloft Harlem ($243 room for 16,000)
	4	Min:  3,334Avg:  8,084Max:  12,000	Four Points by Sheraton Las Vegas East Flamingo ($152 room for 3,334 points) The Westin Lake Las Vegas Resort & Spa ($186 room for 7,000 points)	The Westin Las Vegas Hotel, Casino & Spa ($184 room for 12,000 points) Element Las Vegas Summerlin ($133 room for 10,000)
	8	Min:  10,000Avg:  15,667Max:  25,000	The Westin St. Francis San Francisco on Union Square ($515 room for 16,000 points) Aloft San Francisco Airport ($273 room for 10,000)	W San Francisco ($426 room for 25,000 points) The Westin San Francisco Airport ($281 room for 16,000 points)
	15	Min:  3,334Avg:  11,578Max:  20,000	Sheraton College Park North Hotel ($151 room for 3,334 points) W Washington, D.C. ($345 room for 3,334 points)	Sheraton Tysons Hotel ($126 room for 10,000 points) The Westin Tysons Corner ($140 room for 10,000 points)
MOST POPULAR INTERNATIONAL DESTINATIONS
	3	Min:  3,334Avg.:  4,556Max:  7,000	Aloft Cancun ($173 room for 3,334 points)	The Westin Resort & Spa, Cancun ($269 room for 7,000 points) Four Points by Sheraton Cancun Centro ($131 room for 3,334 points)
	6	Min:  7,000Avg:  14,834Max:  20,000	The Park Lane Hotel, London ($366 room for 12,000 points) The Park Tower Knightsbridge, a Luxury Collection Hotel, London ($586 room for 20,000 points)	Aloft London Excel ($179 room for 10,000 points) Le Méridien Piccadilly ($430 room for 20,000 points)
	4	Min:  12,000Avg:  19,500Max:  30,000	Prince de Galles, a Luxury Collection Hotel, Paris ($847 room for 30,000 points) The Westin Paris – Vendôme ($500 room for 20,000 points)	Sheraton Paris Airport Hotel & Conference Centre ($283 room for 16,000 points) Le Méridien Etoile ($224 room for 12,000 points)
	1	16,000	Sheraton Grande Tokyo Bay Hotel ($243 room for 16,000 points)
	9	Min:  3,334Avg:  7,186Max:  10,000	Four Points by Sheraton Toronto Mississauga ($119 room for 3,334 points) Four Points by Sheraton Toronto Airport ($103 room for 3,334 points)	The Westin Prince, Toronto ($152 room for 10,000 points) Sheraton Gateway Hotel in Toronto International Airport ($165 room for 10,000 points)

*Additional locations may exist but did not allow reward booking at the time this review was completed.

Methodology:

WalletHub compared the cost of booking a room with Starpoints and cash, respectively, in all of the Starwood-family hotels located within 10 miles of the city center in 10 of the most popular travel destinations of 2015. Point prices were obtained through SPG’s booking portal and dollar costs were obtained from Kayak.com.  The number of hotels for each city listed above as well as the corresponding redemption values reflect the cost of a single weekend night during the destination’s high season, derived from quotes for a three-night stay beginning on the following dates:

• 2/12/16: Cancun
• 12/11/15: London
• 9/11/15: Washington, San Francisco and Paris
• 8/28/15: Chicago, Las Vegas, New York, Tokyo and Toronto

Data collection took place in July 2015.

Redemption Options

  Starpoints can be cashed in for a whole range of things, from SPG nights and SPG “Moments” to airfare and rental cars.  As you’ll see below, points are by far the most valuable when used for reward nights.  

Option	Average Value Per 1,000 Points	More Information
SPG Reward Nights (no blackout dates)	$24.20	You can redeem with as few as 2,000 points, but our research shows that the average night costs nearly 13,000 points.
SPG Flights	$12.17	You can use Starpoints to book flights on more than 150 airlines with no blackout dates. You just have to book through SPG’s portal.
Rental Cars	$14.29	A $50 certificate for Avis or Sixt will run you 3,500 points.
SPG Moments	Indeterminable	You’ll have the option of redeeming points for tickets and special access to exclusive events. Some of these “moments” cost a fixed number of points, while others are based on member bidding.  According to the SPG website, “moments” can be redeemed for 1,000 to more than 153,000 points. Here are some examples of what you can get: 2 tickets to the Radio City Christmas Spectacular:  20,000 points 2 tickets to see Bastille in New York City at a secret location:  20,000 points 2 luxury suite tickets to see the New York Knicks play the Golden State Warriors in Los Angeles:  40,000 points
Gift Cards	$10.04	Points can be redeemed for gift cards from 13 companies, including popular retailers Amazon.com, iTunes, Nordstrom and Starbucks.  The pricing is as follows (available gift card denominations vary by company): $25 gift card = 2,800 points $50 gift card = 5,000 points $100 gift card = 9,800 points $150 gift card = 14,000 points
Broadway Tickets	$15.49	You can redeem points for any show on Broadway through SPG’s partnership with Audience Rewards. The number of points you’ll need depends on which show you’re seeing and where you’re sitting, but here are a few examples: Aladdin:  13,800 points (orchestra/mezzanine) Lion King:  13,700 points (orchestra/front mezzanine) Jersey Boys:  11,300 points (orchestra/front mezzanine) Le Miserables:  13,300 points (orchestra)
Donate Points	Indeterminable	Points can be donated to SPG’s three charitable partners:  Clean the World, American Red Cross, and UNICEF. With the exception of the Red Cross, to which a $25 donation is made for each 2,000 Starpoints you give (up to 16,000 points for a $200 donation), it is impossible to tell how far donated points really go.  Only vague descriptions are provided for Clean the World and UNICEF. For example, 500 points donated to UNICEF “could provide learning materials (e.g. rulers, erasers, pens, pencils, and books) for a child for a whole year,” according to the SPG website. Yet 1,000 points only “could provide a football that helps children learn through play.”

Transfer Points To Other Rewards Programs:

SPG members have the ability to transfer Starpoints to other travel providers’ rewards programs. There are 35 options to choose from, including Delta Airlines SkyMiles, American Airlines AAdvantage, British Airways Executive Club and Amtrak Guest Rewards.

Most transfers are done at a 1:1 ratio. For example, 1,000 Starpoints would translate to 1,000 Lufthansa miles. Starwood also gives you 5,000 bonus points for every 20,000 points you transfer, so 20,000 Starpoints would turn into 25,000 miles/points and the transfer ratio would increase in your favor. This helps compensate you for the fact that Starpoints tend to be much more valuable than most air carriers’ miles, but not enough.

That, together with the fact that every fifth consecutive reward night is already free for SPG members, helps to explain a lot of the savings you can derive from SPG’s Nights & Flights option. It entails booking five reward nights at an eligible SPG hotel and transferring 50,000 Starpoints to one of SPG’s airline partners for a corresponding flight, promising savings of 18,000 Starpoints when your itinerary includes a Category 3 hotel and 20,000 Starpoints when you’re staying at a Category 4 property. There are a total of 670 Category 3 and 4 hotels in SPG’s portfolio – out of 1,200 overall – and, to be eligible, the airline partner must accept transfers at a ratio of 1 mile for every 1 Starpoint.

Nights & Flights aside, Preferred members must have at least 2,500 Starpoints to complete a transfer to an airline rewards program, while Gold members need 1,500. There’s no minimum for Platinum-level members as far as flights are concerned, but everyone needs at least 5,000 points to transfer to Amtrak.

Only four of SPG’s partners do not accept transfers at a 1:1 ratio:  

Airline	Transfer Ratio
	65 Starpoints for 1 Airpoint
	2 Starpoints for 1 GOL mile
	1 Starpoint for 1.5 Lanpass km.
	2 Starpoints for 1 United mile

Pointers & Pitfalls

  Loyalty rewards programs can feel like a maze to those trying to get their money’s worth.  The potential payoff can be great, but value-draining diversions exist as well.  Here are a few tips for navigating Starwood Preferred Guest strategically:

1. The Best Deals Aren’t Always Obvious: If you really want to maximize the value of your Starpoints, price-out an upcoming itinerary through both SPG’s booking portal and a third-party travel comparison site like Kayak.com.  See how the room rates expressed in dollar terms on the open market compare to the Starpoint pricing.  This may reveal instances in which you can get more room for fewer points, so to speak.

   When comparing SPG reward nights, don’t forget to account for fees and sales taxes, which you have to pay out of pocket. Sometimes two rooms that are equivalently priced in terms of points charge materially different amounts in fees.

2. Get The Starwood Preferred Guest® Credit Card from American Express: Generally speaking, frequent travelers who are brand-loyal to a particular hotel chain should open its co-branded credit card. That holds true for SPG members and the Starwood Preferred Guest® Credit Card from American Express. It offers an initial bonus worth more than $600 in reward nights, and will help expand the types of purchases on which you can earn Starpoints.
3. Take Advantage Of SPG’s Partners, But Only If The Price Is Right: You shouldn’t ever spend extra money just to earn rewards.  In other words, don’t start calling Uber all the time if you usually walk, don’t fly Delta or Emirates if you can find a cheaper fare on a different airline and don’t head to Vegas just for the ability to earn Starpoints through Caesars Entertainment. But if you do such things anyway, it certainly makes sense to enroll for the ability to double-dip on the rewards front.
4. Weekday Stays Provide The Most Value:  You might file this under “obvious,” but it’s nevertheless important to note if you travel for business or have the ability to get off work for a family getaway.  To give scope to this strategy, 50,000 points would be worth roughly $1,255 based on weekday rates for a domestic destination but just $1,190 on the weekend.

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Posted by: John S Kiernan

American Express (a WalletHub partner) is a venerable brand, known for customer service and as a status symbol. So it’s understandable that you’d be interested in the company’s cards. But thinking you want an Amex is a far cry from knowing you’ve found the best card for your needs. Please note, American Express is a WalletHub partner.

To help you nab the right deal, our editors compared Amex offers to find the best American Express credit cards for seven of the most common consumer needs. You can find the winners listed in the table below, followed by in-depth explanations and non-Amex alternatives to consider along with each selection. You may notice that credit cards for (re)building credit and student rewards aren’t included. That’s because all American Express credit cards require at least “good” credit for approval.

With that in mind, we recommend checking your credit score for free on WalletHub to see whether you can qualify for a credit card from American Express. You can also check out our editors’ picks for the best student credit cards and the best balance-transfer credit cards, if you’re in the market for such offers.

Best For...	Best Amex	Min. Credit Required	Learn More
Cash Back	Blue Cash Preferred® Card from American Express	Good	Editors’ Notes
Points/Miles	Premier Rewards Gold Card from American Express	Good	Editors’ Notes
Hotel Rewards	Starwood Preferred Guest® Credit Card from American Express	Good	Editors’ Notes
Business	SimplyCash® Plus Business Credit Card from American Express	Good	Editors’ Notes

Best Amex Card: Cash Back

Blue Cash Preferred® Card from American Express is one of the market’s best cash back credit cards, according to our editors. It provides generous rewards in some of the biggest everyday spending categories, offering 6% cash back on the first $6,000 you spend at U.S. supermarkets each year as well as 3% cash back at U.S. gas stations and purchases at certain U.S. department stores. Plus, its $200 bonus for spending $1,000 in the first three months can help defray the cost of its $95 annual fee.

All things considered, the average person can expect to earn roughly $1,250 in net rewards over the first two years with Blue Cash Preferred, according to our calculations. But whether or not it’s the card for you really comes down to how much you spend at gas stations and department stores. If they aren’t among your biggest expense categories, or you don’t make credit card purchases often enough to justify paying an annual fee, our choice for the best non-Amex alternative might be more your speed.

Compared to the Competition: Blue Cash Preferred® Card from American Express vs. Citi® Double Cash Card – 18 month BT offer

Best Amex Card: Points/Miles

The Premier Rewards Gold Card from American Express is a decent offer that has the misfortune of competing against a historically valuable crop of travel rewards credit cards. It’s fine the first year, when no annual fee is in effect, giving you 25,000 bonus points for spending $2,000 in the first three months, in addition to regular rewards headlined by 3 points per $1 spent directly at airlines.

But those ongoing rewards and the $100 airfare credit you get each account anniversary aren’t enough to compensate for the $195 annual fee that kicks in year two. That’s especially true for anyone who likes to book airfare through travel-comparison sites such as Kayak and Expedia, as those purchases would not be eligible for the 3-point earning tier. There’s simply more value and more flexibility to be found elsewhere.

Compared to the Competition: Premier Rewards Gold Card from American Express vs. Capital One® Venture® Rewards Credit Card

Best Amex Card: Hotel Rewards

The Starwood Preferred Guest® Credit Card from American Express didn’t make our editors’ list of the year’s best hotel credit cards, but it still has an awful lot to offer. That includes 75,000 bonus points for spending $3,000 during the first three months that you have this card. Also, there is no annual fee the first year ($95 thereafter). So it’s a great choice for Starwood loyalists, but travelers who are open to other accommodations may have superior options to choose from.

Compared to the Competition: Starwood Preferred Guest® Credit Card from American Express vs. Radisson Premier Visa Signature® Credit Card

Best Amex Card: Business

How much do you spend on wireless services and office supplies? That’s the deciding factor here. If they’re among your biggest expenses, SimplyCash® Plus Business Credit Card from American Express is the way to go, giving you 5% cash back in both categories (applies to U.S. providers). You also get to pick a 3% cash back category from a list that includes airfare, hotels, certain forms of advertising and even cloud computing services. But not all small business owners spend their money that way, so some might prefer a simpler, more flexible option.

Compared to the Competition: SimplyCash® Plus Business Credit Card from American Express vs. Capital One® Spark® Cash for Business

Remember, your personal credit standing is what dictates your ability to get a business credit card. You can check your latest credit score for free on WalletHub to gauge your odds of approval. WalletHub is the only site that offers free credit scores that are updated on a daily basis, so you won’t get a better sense of your standing anywhere else.

Finally, it’s important to note that American Express isn’t as widely accepted internationally as Visa and Mastercard. So if you’re headed abroad anytime soon, make sure to confirm what types of plastic the merchants in your destination take. Or you could erase all doubt by getting one of the best international credit cards.

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Achieving and keeping excellent credit should be a priority for everyone. If you’re already there, it may be time to upgrade your credit card. Here is our list of the best premium credit cards and the perks they offer.

Premium credit cards have quite an allure. They promise terrific rewards programs, big welcome bonuses and high end perks that can make celebrities blush.

The problem however is that for all of the benefits they wave in front of you, there’s also a big annual fee. Can your budget handle a $450 fee every year?

Let’s take a look at six of the best premium credit cards on the market today. Each card has its own specific benefits but they also all share two things in common. First, every card is geared toward travelers and hotel stayers. If you’re not a frequent flyer, then these credit cards are simply not for you. Second, they all require the most excellent of credit for approval.

DoughRoller`s Best Premium Credit Cards of 2018

Chase Sapphire Reserve

New cardholders of the Chase Sapphire Reserve can earn 50,000 bonus points after spending $4,000 in the first three months. Triple points are earned on all travel purchases and single points are earned on all other purchases. When you use your points to book travel through Chase Ultimate Rewards, they’re worth 50% more so that initial bonus can actually be worth $750.

The biggest perk of the Chase Sapphire Reserve is that every year, Chase offers a $300 travel credit. This credit can be applied to hotel stays, airline purchases or other travel related costs. I can tell you from personal experience that the process to receive the credit is seamless. You simply charge a travel purchase to your card and a few days after it posts, Chase will apply the credit.

Also included is Priority Pass Select membership which means airport lounge access and a refund of up to $100 for an application into Global Entry or TSA Pre Check.

The annual fee to own the Chase Sapphire Reserve is $450 and an additional $75 for each authorized user.

• Sign-up Bonus – 50,000 points after spending $4,000 in three months.
• Annual Fee – $450

The Platinum Card from American Express

Nothing says status like Platinum and the Platinum Card from American Express delivers. 60,000 Membership Rewards points are earned after spending $5,000 in the first three months of card ownership.

5x points are earned on all flights book directly with the airlines as well as prepaid hotels booked through AmexTravel.com. 1x points are earned on all other eligible purchases.

On top of the welcome offer and rewards program, the Platinum Card from American Express delivers the best travel perks in the industry. Each cardholder will receive a $200 airline fee credit, good for reimbursement of incidentals such as baggage fees and in-flight meals. Another $75 annual hotel credit is provided on qualifying hotel stay.

Also included is a perk not found anywhere else. American Express will provide a $15 monthly credit toward Uber rides, with a $20 credit awarded in December. You’ll also immediately become an Uber VIP without having to meet minimum ride requirements.

All of this and more can be yours for a steep annual fee of $550.

• Welcome Bonus – 60,000 Membership Rewards points after spending $5,000 in the first three months.
• Annual Fee – $550

Hilton Honors American Express Aspire Card

A new offer from American Express, the Hilton Honors American Express Aspire Card has a 100,000 bonus point welcome offer after spending $4,000 in the first three months of card membership.

The rewards program gets a little crazy with their multiples but here it goes. 14x points are earned per dollar spent on eligible purchases made on hotel stays within the Hilton portfolio. 7x points are earned on all flights booked directly with the airline or through AmexTravel.com as well as car rentals booked directly from car rental companies and at restaurants. 3x points are earned on all other purchases.

Added perks with the Hilton Honors American Express Aspire Card are as follows:

1. $250 annual airline fee credit for incidentals including baggage fees and upgrades.
2. Two weekend night rewards every card year anniversary at participating Hilton hotels.
3. $250 Hilton Resort annual statement credit.
4. Automatic Hilton Honors Diamond Status.  This means complimentary breakfast when available, 5th night free on Standard rooms and space-available room upgrades.

The annual fee on the Hilton Honors American Express Aspire Card is $450.

• Welcome Bonus – 100,000 point welcome bonus after spending $4,000 in the first three months.
• Annual Fee – $450

Citi® / AAdvantage® Executive World Elite Mastercard®

50,000 American Airlines bonus miles can be earned after spending $5,000 in purchases during the first three months of account ownership.  Double miles per dollar spent are earned on all American Airlines purchases and single miles per dollar spent are earned on everything else.

The Citi® / AAdvantage® Executive World Elite Mastercard® includes access to the Admirals Club at no additional charge. It also includes a $100 fee reimbursement every five years for Global Entry or TSA Pre Check. Cardholders will enjoy priority check-in and boarding privileges for up to eight travel companions on the same reservation.

Every year you spend at least $40,000 in purchases, you’ll earn 10,000 Elite Qualifying miles. Here’s a handy chart on how many qualifying miles you’ll need to reach elite status:

The annual fee on the Citi® / AAdvantage® Executive World Elite Mastercard® is $450.

• Sign-up Bonus – 50,000 bonus points after spending $5,000 in the first three months of account opening.
• Annual Fee – $450

The Ritz-Carlton Rewards® Credit Card

You won’t find bonus points with the The Ritz-Carlton Rewards® Credit Card, but you will find two complementary nights at any participating tier 1-4 Ritz-Carlton hotel after spending $4,000 in the first three months. Depending on the hotel you choose, this bonus has the potential to save you over $1,000.

Five points are earned per dollar spent at Ritz-Carlton and SPG hotels; two points per dollar spent is earned on airline tickets (purchased directly with the airline) and at car rental agencies and restaurants; one point per dollar spent is earned on everything else. Points never expire as long as the account remains in good standing.

Adding an authorized cardholder and getting them to make a purchase inside of the first three months is also worth 10,000 bonus points.

The The Ritz-Carlton Rewards® Credit Card offers a $300 annual travel credit, good for incidental fees while flying. Airport lounge access, baggage fees and airline seat upgrades are a few examples of what qualifies for the credit.

The hotel benefits specific to this card are also quite nice. You can upgrade to the Club Level three times each year with a paid stay of up to 7 nights. You can also receive a $100 hotel credit toward dining, spa or other recreational activities with a paid stay of two nights or more. Finally, you’ll immediately be given Gold Elite status with the ability to receive Platinum Elite status (if you can spend $75,000 annually on the card).

The annual fee on the The Ritz-Carlton Rewards® Credit Card is $450.

• Sign-up Bonus – 2 free nights at tier 1-4 Ritz-Carlton hotels after spending $4,000 in the first three months.
• Annual Fee – $450

Topics: Credit Cards

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As I recently said in Welcome To Paradise – We’re Living On A Sailboat!, we no longer have our Jeep. Since we are preparing to cruise and will be leaving the marina soon, we no longer have a need for full-time use of a land vehicle.

Now, technically we still own our Jeep, but it’s currently being stored at Wes’ parent’s house. We love it and put a lot of time and money converting it into an overland vehicle that is great for exploring the country without worrying about needing a place to stay. But, for now, as it’s being stored far away, we are completely carless.

Due to ditching our car, we will be commuting by dinghy, folding bikes, and walking.

Some of you may feel bad for us, but we're actually really excited! Perhaps this novelty will wear off eventually, but for now, we're excited to make this change.

I understand that for many, being able to drive a car anywhere you need may be extremely convenient, but in some cases, driving everywhere might just be a habit.

Trust me, I completely understand. I used to live in a suburb, and the thought of walking or riding my bike somewhere never once crossed my mind.

Not even once.

However, for some people, taking the time to consider the benefits of being car-less might just be the push you need to change your life.

Ditching your car and walking might be exactly what you need if you want to save more money, be more active, feel refreshed, and so on.

Here are some of the many great benefits of walking and/or biking more.

 

Walking makes you think twice.

Having a car is so convenient, and I realize that. However, one of the big benefits of no longer having a car is that we will think longer and harder about each errand we have to run.

This is because if I want to get something from the store, it'll take me a heck of a lot longer to complete that errand. Plus, it's super hot in Florida so I will really think twice or even three times before thinking that I need something.

And, if I do decide to go to the store or complete whatever other errand I have, I will have to carry it home in my arms or in a backpack, so that's another thing that can stop you from overspending or getting things that you do not actually need.

Just think about it: how many times do you go to the store for one or two things and come out with several bags full of stuff? That’s definitely not happening now!

There's really no splurging and going crazy at Target if you don't have a vehicle to put everything in once you're done shopping.

And, this is probably a no brainer, but if you are thinking more about your purchases in terms of how much stuff you can carry home, you are likely spending less money on stuff you probably don’t even need.

Maybe you really think you want something, but you can’t drive to the store to grab it, you will weigh out the benefits of actually going to buy the item in the first place.

 

You can save money on transportation.

Okay, this one is clearly a given.

One of the great benefits of walking and/or cycling is that you may be able to save money on transportation. Brand new bikes can be expensive, but not nearly as expensive as a car. And, whoever said you need a brand new, top of the line bike to get around? Plus, walking and/or biking doesn’t require insurance, licensing, etc. Really, the only costs you will incur are your shoes (which you probably already have), a bike, and a helmet.

If you are able to walk and/or bike everywhere that you need to be, you may be able to completely eliminate your car insurance, fuel, vehicle maintenance, and other expenses from your budget.

Considering that the average family spends over $10,000 annually on car-related expenses, that is a lot of money to potentially save!

However, not everyone is ready to completely get rid of all of their vehicles. I understand, that’s a bigger change than most want to make. Plus, your car is probably helpful in many circumstances, such as getting you to work. Don’t forget, though, there are plenty of ridesharing services for those rare times when you just need to get somewhere a little faster or farther away.

If you aren’t ready to completely ditch your car, walking or biking to just some of the places you need to be can still help you save money on fuel. You can also save money as you will have to do maintenance less often on your car.

And, if you are a two car household, you could even consider getting rid of one vehicle to try it out and see if it’s a change everyone can make.

 

Walking can help you become healthier.

According to the CDC, only 23% of American adults get in their recommended amount of daily exercise. That statistic is astonishing when you think about all of the health and medical issues that go along with inactivity, which then leads to long-term health issues and medical bills.

Plus, with the number of people working jobs that require them to sit at a desk all day, it can be hard to fit exercise into an already busy schedule. However, one of the benefits of walking and biking more is that you may be able to improve your health and hopefully prevent certain medical problems which may arise in the future.

Walking more may help you to:

• lower your blood pressure
• lower your body fat
• lower your risk of heart disease

And more.

This is one of the big benefits of walking and cycling more – you will be more healthy!

Just think of how it would help your physical, and even mental, health if you were biking to work rather than driving. I know that’s not possible for everyone, but if you live close enough to your job, trying to bike or walk to work would be a great way to fit in a workout.

 

You may increase your productivity.

I often used to skip out on walking, cycling, and working out, in general, because I would justify to myself that the time could be better used on something else (such as working, cleaning, etc.).

That’s just not true, though.

Walking somewhere can help you go to work refreshed, which may help you be more productive as well as increase your creativity. Even if you weren’t able to ditch your car, using your lunch hour or whatever free time you have during the day to fit in a quick walk or bike ride will help you get back into the day feeling refreshed and ready to accomplish whatever task is in front of you.

I've noticed that the more active I am, the more I am able to get done. While it may seem like it would be the opposite, I definitely recommend you try it.

Would you get rid of your car? If not, are you open to walking/cycling at least occasionally?

The post Ditch Your Car And Walk More appeared first on Making Sense Of Cents.

from Making Sense Of Cents


via Finance Xpress

Posted by: Richie Bernardo

“Location, location, location” is the most important phrase in real estate. But the mantra applies to education, too. Where you live doesn’t just affect the value of your property; it also reflects the worth of your college degree — the same degree that may have put you in debt. With 10.7 percent of all student-loan debts 90+ days delinquent or in default as of Q1 2017, graduates need to be selective with the places in which they choose to put their degrees to work. New York City, for instance, might have a high average salary for a certain profession, but the high cost of living could outweigh the gains.

Save for mortgages, student loans make up the largest component of household debt for Americans. And our collective debt keeps growing. At the end of the first quarter of 2018, total outstanding college-loan balances disclosed on credit reports stood at $1.41 trillion, according to the Federal Reserve Bank of New York.

There is evidence that income potential rises and chances of joblessness decline with more schooling. But many graduates entering the labor market are learning the hard way that a college degree can’t guarantee financial security. Post-college success depends on numerous factors, including where a graduate lays down roots. Student-loan borrowers generally fare better in strong-economy states with low college-debt-to-income ratios.

With student-loan debtors in mind, WalletHub compared the 50 states and the District of Columbia based on 11 key measures of indebtedness and earning opportunities. Our data set ranges from average student debt to unemployment rate among the population aged 25 to 34 to share of students with past-due loan balances. Read on for our findings, insight from a panel of researchers and a full description of our methodology.

Tip: If you’re considering borrowing money for college or are in danger of defaulting, we advise leveraging a Student Loan Calculator to determine an affordable monthly payment and payoff timeline.

1. Main Findings
2. Ask the Experts
3. Methodology

Main Findings Embed on your website<iframe src="//d2e70e9yced57e.cloudfront.net/wallethub/embed/7520/student-debt-geochart.html" width="556" height="347" frameBorder="0" scrolling="no"></iframe> <div style="width:556px;font-size:12px;color:#888;">Source: <a href="https://ift.tt/2vrrqEL>

 

Student Debt by State

Overall Rank*	State	Total Score	‘Student-Loan Indebtedness’ Rank	‘Grant & Student Work Opportunities’ Rank
1	South Dakota	71.41	1	35
2	West Virginia	68.16	3	3
3	Pennsylvania	66.95	4	11
4	New Hampshire	65.15	2	43
5	Ohio	63.84	6	10
6	Mississippi	62.22	7	9
7	Michigan	60.28	9	12
8	Minnesota	59.13	5	49
9	Iowa	59.09	8	28
10	Indiana	56.53	10	20
11	Kentucky	55.79	17	2
12	Delaware	55.52	12	5
13	Kansas	54.07	13	18
14	South Carolina	53.93	14	16
15	Wisconsin	53.57	15	17
16	Vermont	53.01	11	38
17	Idaho	52.38	16	25
18	Montana	51.66	20	19
19	Georgia	51.40	19	23
20	Connecticut	49.63	18	41
21	Alabama	48.41	28	6
22	Rhode Island	47.77	23	30
23	Illinois	47.43	22	37
24	Tennessee	47.33	25	21
25	Nebraska	46.85	24	27
26	Missouri	46.04	21	45
27	Arkansas	45.55	30	14
28	New Jersey	45.09	26	39
29	North Carolina	44.61	33	7
30	Oklahoma	43.16	35	8
31	Maine	42.00	27	51
32	North Dakota	41.76	31	40
33	Oregon	41.64	34	24
34	Massachusetts	41.28	29	50
35	Texas	41.23	36	22
36	Louisiana	40.18	39	13
37	New York	39.05	32	48
38	Virginia	37.94	38	42
39	New Mexico	37.31	40	31
40	Colorado	37.15	37	47
41	District of Columbia	36.57	41	34
42	Nevada	35.40	43	4
43	Maryland	34.36	42	44
44	Florida	32.74	45	15
45	Alaska	31.88	47	1
46	Arizona	31.82	44	32
47	Washington	30.18	46	26
48	California	25.22	48	36
49	Wyoming	24.66	49	33
50	Hawaii	15.60	50	46
51	Utah	13.77	51	29

*No 1 = Most Student Debt  

Embed on your website<iframe src="//d2e70e9yced57e.cloudfront.net/wallethub/embed/7520/student-debt-bubblechart.html" width="700" height="450" frameBorder="0" scrolling="no"></iframe> <div style="width:700px;font-size:12px;color:#888;">Source: <a href="https://ift.tt/2vrrqEL>  

Ask the Experts

Having more student debt than one can handle can produce significant troubles in the future. To advance the discussion, we asked a panel of experts to share their advice and insight with current and potential student-loan borrowers. Click on the experts’ profiles to read their bios and responses to the following key questions:

1. What tips can you offer students looking to minimize the amount of debt they take out for higher education?
2. Should the government reduce the amount of money students can borrow? How about basing the total amount a student can borrow on the quality of the university and employability of the degree/field?
3. How do we slow the growth of higher-education expenses?
4. How will the policies set forth by the Trump administration impact student borrowing and higher-education finance more generally?
5. How does the growth of student-loan debt affect the economy?
6. How should students and their parents think about the return on investment to spending on higher education?

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• Charlie Kelley Executive Director, RI Student Loan Authority
• Paul R. Harrison Assistant Teaching Professor, School of Accountancy, University of Denver
• Margaret P. Reed Department Head, Professor – Educator of Accounting, Carl H. Lindner College of Business, University of Cincinnati
• Fred Selinger Lecturer, Haas School of Business, University of California, Berkeley
• Manisha Thakor CFA, CFP®, VP, Financial Education, Brighton Jones
• Diane Usher Director of Financial Aid, Roger Williams University
• Sharon C. Allen President & Co-Founder, Sterling Wealth Management

Charlie Kelley Executive Director, RI Student Loan Authority

What tips can you offer students looking to minimize the amount of debt they take out for higher education?

There are a number of ways that students and families can avoid over borrowing for higher education.

File the FAFSA financial aid form and apply for local scholarships where the student has a better chance of actually receiving one, even small scholarships add up!

Consider attending a community college for the Freshman and Sophomore years to complete introductory classes and then transfer to a four year institution. A student and family can avoid tens of thousands of dollars of debt and your diploma from the four year college will not have an asterisk saying where you spent your first two years.

Carefully compare award letters from the different colleges before committing to make sure that “great financial aid package” is not primarily loans.

Sometimes the more expensive schools actually can end up costing less if they provide generous merit or need based aid.

Focus on completing your degree on time, take summer classes if necessary.

How do we slow the growth of higher education expenses?

Over the last several years we have seen students and families become much more savvy consumers of higher education and the rate of tuition increases has already declined to a much more reasonable rate.

How will the policies set forth by the Trump Administration impact student borrowing and higher education finance more generally?

Yet to really see what those policies are…

How does the growth of student loan debt affect the economy?

Higher education is still the best investment an individual can make, but like with any investment you need to do your homework BEFORE investing.

How should students and their parents think about the return on investment to spending on higher education?

RISLA advises students that the MAXIMUM amount that they should borrow over their college career should not exceed 90% of their expected starting salary.

The Rhode Island Student Loan Authority (RISLA) recommends that students first use the federal direct loan, but for most freshmen the limit is $5,500 and if families need additional funding RISLA has one of the lowest fixed rate education loans in the country at 3.99% with the auto pay (ACH) discount (and no fees). By comparison the federal parent PLUS loans has a fixed rate of 7.60% (7.35% with ACH) and an upfront fee over 4.2%. Over the standard ten year repayment period a RISLA loan will save families 25% of what they borrow ($5,000 on a $20,000 loan).

RISLA is the only lender other than the federal government that offers income based repayment as a safety net should the borrower experience a financial set back such as unemployment or medical issues. RISLA will also forgive the loan if the student passes away or become permanently disabled under the US Dept of Education guidelines.

This loan is available to qualifying RI residents regardless of where they go to school and the families of students attending any of the high quality institutions in RI.

An exciting new thing (I think we are first in the education loan space to do this) we launched this Spring was a text based pre-approval and application process, the key to which is that it utilizes fraud prevention and credit databases to make applying on a smartphone practical and quick. See attached press release.

We call it “text to college” and you can try it by texting the word “college” to the number “24000”. While you can use your own info to get pre-approved and it will not impact your credit score (it is called a soft pull) you may still feel more comfortable when it asks for the last four digits of your social security number use four “A”s instead “aaaa”. However, DO use your real email address so you can relieve the confirmation email from us.

Paul R. Harrison Assistant Teaching Professor, School of Accountancy, University of Denver

What tips can you offer students looking to minimize the amount of debt they take out for higher education?

The best tip for anyone looking to minimize their debt, is to not get into debt in the first place. That aside, the idea of debt is, perhaps, never fully explained to most college students: you are making a deal with your future self that you will pay much more in the future for getting an education today. Anyone taking on debt needs to understand what they are getting in the deal. If the idea is that a college education will help land a better job with a better company for higher pay, some rough calculation needs to be done in order that the debtor will be able to earn enough to pay back the debt. So what are the job prospects? What is the likely pay? How much of a future paycheck is the student willing to use to pay back debt?

While some student debt can be a good thing, because it causes the student to have skin in the game, too much can wreck a career and life quickly. Finding the right balance is an individual and challenging process.

Should the government reduce the amount of money students can borrow? How about basing the total amount a student can borrow on the quality of the university and employability of the degree/field?

While it is important that our government support higher education, I don’t believe that any hard limits on education grants, loans or other monetary support is the best way to accomplish the goal. The interest rates charged, along with the proper disclosures to the potential debtor, in combination with private (non-government) lenders is a better solution. But, this solution rests on the debtor understanding what the costs of the education today are.

How does the growth of student loan debt affect the economy?

Like any debt, student loan debt brings forward in time the payment of future expenses (get an education now, pay for it later versus get an education later when you can pay for it). This speeds up the economy today and as long as the debt is paid as agreed, has a lesser drag on the future by having a more efficient workforce today. In the aggregate, unpaid student debt is of concern – just like any unpaid debt. Unpaid debt breaks trust and broken trust is a drag on the economy – namely in the form of higher interest rates on future borrowers.

How should students and their parents think about the return on investment to spending on higher education?

Treating the cost of an education like a return on investment is not a bad way to think about it. However, there are distinct problems with taking that thought process to extremes. First, students are not to be treated as consumers. Their tuition is not the purchase of a grade, but an experience. Depending on how they choose to take advantage or not of that experience is the result of a grade. Second, students (unlike consumers) are not always right. The idea of a university is that a group of people are doing their level best to pass along what they have learned (or should have learned) in their education. Lastly, the return has far more to do with the student, than the institution. While the best and brightest from any institution will undoubtedly succeed, the institution’s name and reputation can open a few more doors, but it is the make-up of the student who will get to walk through those doors and find their rewards.

Margaret P. Reed Department Head, Professor – Educator of Accounting, Carl H. Lindner College of Business, University of Cincinnati

What tips can you offer students looking to minimize the amount of debt they take out for higher education?

The best way for students to minimize debt is to create a budget of expenses for the next semester or academic year, not forgetting that they may need summer money to supplement their summer earnings, if they are not in school. This is not an easy budgeting process and this is partly why students borrow too much and spend too much. The key here is to borrow enough money to get through the semester or year, but don't borrow extra, because it is too easy to spend it on non-essential items, like eating out, travel and impulse purchases.

Should the government reduce the amount of money students can borrow? How about basing the total amount a student can borrow on the quality of the university and employability of the degree/field?

Basing the amount of borrowing on the quality of the university would be difficult to implement. However, the maximum borrowing amount could be capped based upon tuition plus average cost of living where the university is located. This would result in a higher maximum loan amount for a student at Columbia University in New York City than a student at Iowa State in Ames, Iowa. This would provide a realistic limit on how much debt the Iowa State student can borrow. Students change majors and career goals during their time at the university, so capping the amount of debt based on the degree or field probably won't work. In fact, students with the greatest debt loads are often the ones who have changed majors one or more times and have extended their time in school, resulting in higher debt load.

How do we slow the growth of higher education expenses?

Slowing the growth of higher education expenses is the most difficult question here. To some degree, the cost of higher education must follow general inflation trends in the economy. But there is a large element that mimics the same problem in rising health care costs. Every hospital network wants the best, most up-to-date equipment and facilities to attract more patients, but then patients have to pay the costs. Universities add lots of buildings and extra amenities to attract students and that pushes up the cost of higher education. It is a race to the top that drives costs higher, but failing to compete is not a winning proposition for universities, either.

How will the policies set forth by the Trump Administration impact student borrowing and higher education finance more generally?

The Trump Administration has proposed the following changes to student loans: reforming the income-driven repayment system, eliminating loan forgiveness for borrowers in public-service jobs, and eliminating subsidized student loans. Eliminated subsidized student loans means that interest will accrue on the loans while the student is still in school, resulting in higher debt upon graduation. The other two proposals involve the repayment of the loans. These changes make it harder to get out of the loans or to make smaller payments based on income, so they will drive up the post-graduation debt of students. I don't see any major changes to higher education finance.

How does the growth of student loan debt affect the economy?

This is a tricky question and I am not an economist by training. However, my guess is that the effect on the economy is determined by whether college graduates can get good jobs and pay off their loans. When the economy is good, graduates can get jobs with salaries that are high enough to allow them to pay off their loans. When the economy turns down, then college graduates, on average, have a harder time getting a good job and have greater difficulty paying off their loans. And to capture the entire economic effect, you would have to analyze the productivity of the college graduates, compared to similar workers who did not choose to go to college. Not an easy question to answer.

How should students and their parents think about the return on investment to spending on higher education?

My personal opinion, as a college professor teaching accounting, is that the return on investment to higher education spending is quite good, when the student spends the first two years casting about for a promising career, and then spends the next two years focused on that career and finishing the degree on time. There are some benefits to the years in college that are harder to access outside of college, like socialization in student groups, learning to balance work and social activities and the possibility of study abroad and internships. There is a lot of hard to value mentoring that goes on between older and younger students, but we know that employers do value it, when looking to hire employees. On the other hand, if a student hasn't figured out what career appeals to them after two years, they might be better off going to find a job and then coming back to the university later, when they have identified what they want to do. I work at a large state university and we have plenty of non-traditional students who come back to school when they know what degree they need. And whether they are part-time or full-time students, they know the value of a dollar and what it takes to earn it, and they generally do not have any problem with excessive student debt!

Fred Selinger Lecturer, Haas School of Business, University of California, Berkeley

What tips can you offer students looking to minimize the amount of debt they take out for higher education?

Apply for every scholarship, grant, etc. you can. Part-time jobs can help. I washed pots and pans at a fraternity house for my meals. You might also consider taking summer courses that enable you to graduate in 3.5 years instead of 4 years. I recommend the amount of your student debt should not exceed what you estimate your first year's compensation will be after graduation.

Should the government reduce the amount of money students can borrow? How about basing the total amount a student can borrow on the quality of the university and employability of the degree/field?

The student loan program is a national disgrace. Our country needs to invest more in education. Too many wonderful teachers are giving up on low wages and leaving the classroom. Too many talented young people are being priced out of an education. They are our future. However, I believe there should be some low affordable cost required for college, university, and post-secondary education. Strange as it is, when given for free, some people tend not to work as hard as they do when they have" skin" in the game.

How do we slow the growth of higher education expenses?

Education must become a national priority affordable to all. Since the rich benefit the most from our economy, it starts with increasing their taxes at a more progressive rate and funneling that into education. Another way would be to allow those with student loans to refinance their student loans at lower rates. Why is it we can refinance our home loans, but not our student loans?

How will the policies set forth by the Trump Administration impact student borrowing and higher education finance more generally?

So far it seems the current administration does not view the best way to expand the economy is to help the poor through education and good healthcare, rather than lower taxes especially on the wealthy.

How does the growth of student loan debt affect the economy?

Our best and brightest now begin their careers smothered in national debt, student debt, credit card debt, mortgage debt, and raising kids they can't afford to send to college because they fear for their retirement needs.

How should students and their parents think about the return on investment to spending on higher education?

Parents can act now by becoming active in their school districts and beginning to put together a financial plan for education early in a child's life. In California we have a wonderful community college system which enables most students to live at home their first two years of college. I believe this is one of the reasons California's economy is the 5th largest in the world. Every state should do the same.

Manisha Thakor CFA, CFP®, VP, Financial Education, Brighton Jones

What tips can you offer students looking to minimize the amount of debt they take out for higher education?

First and foremost, let go of the idea that “educational debt is good debt.” I’d argue that debt is a 4-letter word no matter WHAT it’s used for (including houses!) and you want to use it sparingly and only with good reason (same as you might for some of those not-for-print four letter words). I often see students taking out the maximum they're able to versus the minimum they need to. When it comes to what a lender offer you, just because you can, doesn’t mean you should. Your primary focus when taking on educational debt should be in clearly understanding how long, how many years of work in your chosen profession you will have to work to pay those loans off. Yes, taking out a reasonable amount of loads to fund your education is an investment in your future earnings power. But as with so many things in life moderation is absolutely key here.

Should the government reduce the amount of money students can borrow? How about basing the total amount a student can borrow on the quality of the university and employability of the degree/field?

I absolutely do not think that the amount of loans a student can borrow should be linked in any way to the “quality of the university.” That is such a subjective measure. However I do support some type of metrics that limits student from taking out loans at a level that are completely unreasonable to pay back within say a 10-15 year time frame at the most. The real driver of whether a student will get a positive ROI on educational debt within a reasonable time period is a function of what field they enter into to (i.e. the pay structure of that profession) and the quality of the skills you will be brining to that job out of school – which is not a function of the “quality of the overall university’ but rather a function of the nature of the major and the quality of the professors in that department.

How do we slow the growth of higher education expenses?

I can’t help but notice on a number of campuses the housing, the cafeteria, the student centers, and the gym facilities are so nice that often a graduate can’t afford those items at a similar standard until they’ve worked a decade or so. So instead of cutting back on professors - or benefits to professors – I suggest institutions of higher learning take a long hard look at how much they are investing in these areas and what kinds of expectations they are setting up in students about how their post-graduation lives will look like. Now that would help stem some of the rapid growth in higher education expenses.

How will the policies set forth by the Trump Administration impact student borrowing and higher education finance more generally?

I can’t believe I’m about to find a silver in any action being taken by the current administration – but the limits on what has to be proven to dispute that one has been “duped” by an institution of higher learning may – and this is a stretch - may cause people to think twice about ow much they spend on educational programs vs teaching themselves by going say to a community college for the first few years and the transferring to a university of their choosing after that. But it’s a CLEAR blow to people who have already been sucked into that vortex of student loans that like the proverbial cockroach - just seems to never die no matter how hard you try to attack it.

How does the growth of student loan debt affect the economy?

Total student loan debt now eclipses total credit card debt (and unlike credit card debt student loan sticks with you through life even if you declare bankruptcy. What this means is that thousands to millions of students are graduating from school with a very heavy ball and chain right out of the gate. It’s not unheard of for students to have monthly loan payments that are equal to (and in the extreme cases) larger than mortgage payments. As such, many graduates are delaying home purchases ad even delaying getting married and/or having kids until their financial picture gets cleared up and the lack of spending in these areas really does add up and negatively impact our echoes. It’s a classic example of “the law of unintended consequences”.

How should students and their parents think about the return on investment to spending on higher education?

My rule of thumb is this: Don’t take out more in student loans than you expect to make ON AVERAGE over your first 10 years out of the program. There are some professions just as finance or law where there can be a very steep escalation in income over that first ten year period that can justify the higher loan balance because at a rate of paying off 10% a year of those loans, depending on the interest rate can have all that debt paid off in 10-12 years. By contrast, if you are going into a field where salaries peak out at $40,000 - taking out $60,000 in student loan means you will be forever behind the 8-ball… you just don’t earn enough to spend 10 years paying off interest and principal to the tune of 10% of the loan such that when you are ready to (pick you filler), get married have kids, buy a home… you are not having the double whammy of having to still pay monthly student loan payments.

Diane Usher Director of Financial Aid, Roger Williams University

What tips can you offer students looking to minimize the amount of debt they take out for higher education?

• Start saving for college early.
• Do well in high school so that you can get high merit scholarships.
• Look everywhere for scholarships such as nonprofit volunteer clubs, religious organizations, and civic groups.
• Take out Federal Direct Loans before private education loans since they are typically less expensive.
• Pay the interest that accumulates on loans while you are enrolled.
• Complete the Free Application for Federal Student Aid (FAFSA) as early as possible.
• Make a budget.
• Avoid using credit cards with high interest interview rates and occasional fees.

Should the government reduce the amount of money students can borrow? How about basing the total amount a student can borrow on the quality of the university and employability of the degree/field?

The government already has set limits to the amount students borrow, although the maximum amounts have had little increase over the past 60 years. It would be difficult for the government to establish limits by the quality of the university and employability of the degree/field since the data constantly changes and can be several years outdated.

How do we slow the growth of higher education expenses?

Since 2012 at Roger Williams University, each incoming class has received a tuition guarantee for the duration of their full-time four-years of studies. This will decrease their higher education expense for by $9,000 to $15,000 over four years. This could help if all colleges and universities look at ways to cut expenses and pass it on to students.

How will the policies set forth by the Trump Administration impact student borrowing and higher education finance more generally?

Students would need to borrow more private loan funds, which would increase the overall amount of student loan debt.

How does the growth of student loan debt affect the economy?

• Fewer people are able to buy homes and cars.
• People are less likely to take business risks when they have a large amount of loan debt.
• Higher amount of delinquencies on student loans.
• With large loan debts, economic activity could have a sudden drop and businesses would cut back their investment spending and could cause loss of jobs.

How should students and their parents think about the return on investment to spending on higher education?

College degrees help families live more comfortably. The average student received financial return with a college degree. While employees with a high school education may secure jobs with good benefits, college graduates typically fare better, entering higher-level careers with greater salaries. They are also more likely to receive promotions, earn raises and develop reasoning and communication skills that typically apply to their jobs. College graduates aged 25 to 32 who are working full-time earn about $17,500 more annually than their peers who have only a high school diploma, according to the Pew Research Centre.

Sharon C. Allen President & Co-Founder, Sterling Wealth Management

What tips can you offer students looking to minimize the amount of debt they take out for higher education?

The adage “plan your work, then work your plan” pays huge dividends when it comes to creating a thoughtful approach to minimizing student debt for higher education. Here are some tips:

• Create a personal budget before setting foot on campus and find a system to track expenses that works for you (an app, spreadsheet or envelope system).
• While in high school, study for and take AP exams...scoring high enough will give you college credit and reduce the time you need to spend completing a degree.
• Start researching scholarships your sophomore or junior year of high school. When you get to college, the opportunities don’t stop so stay connected with your guidance counselors for scholarships that are available post freshman year in college.
• Consider attending a community college to take general education courses to save money. Some community colleges have “pathway” programs that will grant you admittance to a four-year college or university after completing the community college coursework.
• Don’t be afraid to work part time while in college. Connect with professors and guidance counselors for connections with alumni or friends of the program you are in for jobs and internships. It’s never too early to start building a network.

Should the government reduce the amount of money students can borrow? How about basing the total amount a student can borrow on the quality of the university and employability of the degree/field?

I believe both of these approaches can be dangerous, laden with unintended consequences. It would be better to have more robust financial education for borrowers than for the government or other parties to get involved in creating mandates and measurements that can be misunderstood. 

How do we slow the growth of higher education expenses?

Slowing the growth of higher education expenses involves a robust approach from multiple angles. First, there should be better financial education in high schools that addresses practical personal finance strategies and the impact of debt (including higher education debt). This has the potential to lead to more thoughtful consumer decisions by college-bound students, who may end up as a result of this education, selecting less expensive avenues to get the tools and training they need which may have a ripple effect on those setting the cost of education. Second, higher education institutions need to continue to “think outside the box” when it comes to delivery of instruction and the overall college experience. Find ways to deliver world-class instruction for reasonable cost (e.g. online learning). 

How will the policies set forth by the Trump Administration impact student borrowing and higher education finance more generally?

The proposed cuts to Pell grants, work study programs, and eliminating loan forgiveness for public servants may slow the growth of college tuition as these forms of financial incentive would no longer be a form of government subsidy. However, the side effect could be the disincentivizing of students with less financial means, but great potential, from attending college. That potential trend concerns me.

How does the growth of student loan debt affect the economy?

Debt can be crushing to an individual’s personal and professional progress, which in turn can weaken economic growth if the debt crowds out investment in other areas. For example, delaying homeownership, marriage, or starting families may take a back seat to student loan debt repayment.

The growth of student debt can also have a social impact. An entire generation of college graduates, laden with the outsized burden of student loans, may end up putting their lives on hold in order to address this debt. This can present itself as reduced professional risk taking that might even have the potential to be more deleterious to the economy in the long run.

How should students and their parents think about the return on investment to spending on higher education?

Return on investment is exactly how families should discuss education spending! Areas that should be thought about critically as a student is evaluating their college path include collegiate/post-collegiate engagement, employment opportunities on graduation, and opportunities for meaningful educational opportunities in and out of the classroom.

There are many different ways to quantify return on investment, many of which are qualitative in nature (e.g. Are you a better person? Are you more well-rounded? Did you develop a good network?). Here is an exercise to consider for numerically quantifying “Higher Education ROI”:

• Where’s The Money? ...Once a student has identified a field or degree they are interested in, research potential future salary upon graduation with that degree.
• How Much Debt Will I Have? ...Identify the cost to attend your desired college, and how much will you finance.
• Calculate the Difference ...Project four years into the future after graduation from college. Compare four years of your projected future salary in your desired field with the debt accumulated over your time in college. If the earnings exceed the cost of attending, you have a positive “Higher Education ROI”.

Methodology

In order to determine the best and worst states for student debt, WalletHub compared the 50 states and the District of Columbia across two key dimensions, including “Student-Loan Indebtedness” and “Grant & Student Work Opportunities.”

We evaluated those dimensions using 11 relevant metrics, which are listed below with their corresponding weights. Each metric was graded on a 100-point scale, with a score of 100 being granted to the state with the most student debt.

Finally, we determined each state and the District’s weighted average across all metrics to calculate its overall score and used the resulting scores to rank-order our sample.

Student-Loan Indebtedness - Total Points: 85

• Average Student Debt: Full Weight (~9.44 Points)
• Proportion of Students with Debt: Triple Weight (~28.33 Points)
• Student Debt as Share of Income: Double Weight (~18.89 Points)Note: This metric was calculated by dividing overall state-level student debt per borrower by median household income (adjusted for cost of living).
• Share of Student Loans in Past-Due or Default Status: Full Weight (~9.44 Points)
• Share of Student-Loan Borrowers Aged 50 & Older: Double Weight (~18.89 Points)Note: This metric was adjusted for the population aged 50 and older.

Grant & Student Work Opportunities - Total Points: 15

• Unemployment Rate Among Population Aged 25 to 34: Double Weight (~4.29 Points)
• Underemployment Rate: Full Weight (~2.14 Points)
• Availability of Student Jobs: Full Weight (~2.14 Points)Note: This metric measures student jobs per total civilian population aged 16 to 24 in the labor force.
• Availability of Paid Internships: Full Weight (~2.14 Points)Note: This metric measures paid internship listings per total civilian population aged 16 to 24 in the labor force.
• Grant Growth: Full Weight (~2.14 Points)Note: This metric measures the percentage change (2015 vs. 2014) in state- and local-government grants per in-district and in-state undergraduate student.
• Presence of “Student Loan Ombudsmen” Law: Full Weight (~2.14 Points)Note: This binary metric measures whether Student Loan Ombudsmen law was enacted or not in a state.

 

Sources: Data used to create this ranking were collected from the U.S. Census Bureau, Bureau of Labor Statistics, Institute for College Access & Success, Federal Reserve Bank of New York, Council for Community and Economic Research, U.S. Department of Education College Affordability & Transparency Center, Internships.com, United Health Foundation, LendEDU, The Pew Charitable Trusts and Indeed.

from Wallet HubWallet Hub


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