Upworthy’s book GOOD PEOPLE is coming this year — check it out!

Shop
 Explore 

debt

Here's the plan to erase student debt for more than 42 million Americans right now.

There are two things that most of us can reasonably agree on:

That education is important and should be provided to any American that needs, wants, or otherwise shows interest in obtaining it.
That paying for that education has become catastrophically difficult. And though it used to be that one could go to college, get a good job upon graduating, and then buy a nice house complete with a fenced-in backyard in which to raise 2.5 children, that's now a pipe dream many university students can't even afford to think about.

So what do we do? Some cities, including San Francisco, have already made their community colleges free for residents. But that's just one small step towards a future where education's affordable for everyone.

On Monday, presidential hopeful Elizabeth Warren released a memo on how the college system could be altered to make it achievable for all.

Warren's proposing that more college be free and that federal Pell grants be expanded. She's also suggesting that student loan debts should be wiped out, ensuring that future generations get a leg up on their futures.

"As states have invested less per-student at community colleges and public four-year colleges, the schools themselves have raised tuition and fees to make up the gap," Warren wrote in a post on Medium.

"And rather than stepping in to hold states accountable, or to pick up more of the tab and keep costs reasonable, the federal government went with a third option: pushing families that can’t afford to pay the outrageous costs of higher education towards taking out loans."

The result, Warren points out is "a huge student loan debt burden that’s crushing millions of families and acting as an anchor on our economy."

"It’s reducing home ownership rates. It’s leading fewer people to start businesses. It’s forcing students to drop out of school before getting a degree. It’s a problem for all of us."

Here's what Warren's plan would look like.

Under her proposed policy, Warren would wipe out $50,000 worth of student loans for anyone who's annual household income is less than $100,000. Anyone with a household income of less than $250,000 would also receive substantial reductions.

Those whose incomes are higher than $250,000 would continue paying off student loans without changes. However, as Huffington Post notes, the proposed plan would help 42 million people in The United States. That's 95% of anyone who's attended or is currently attending college.

Warren's plan also includes a significant amount of money being invested in historically black colleges and universities, more diversity in two and four-year colleges, and an end to the government-helping fund for-profit colleges, which prey on economically disadvantaged communities.

The policy sounds great — more students attaining college degrees while being allowed more control over their financial futures — but it's going to be a tall order to implement right now.

Aside from hand-wringing concern trolls who are already out in full force on Twitter, demanding to know why anyone would go to a college they can't afford (while ignoring that higher education has become so expensive that even state schools are out of reach for many), there's the very real issue of convincing voters that the $1.25 trillion the program would cost over ten years is viable.

Warren believes it would be possible by raising the tax on families that earn more than $50 million a year, something that might also ruffle some feathers during the next election cycle.

Still — a population that's educated and not overwhelmed with debt? That sounds pretty good no matter who you voted for in the last election.

Backed by Bernie Sanders, this governor's plan for free college could be a game-changer.

"Other countries have already done it. It's time this country catches up."

New York Gov. Andrew Cuomo just announced a landmark plan to make college tuition-free for low- and middle-income families in New York.

The plan is called the Excelsior Scholarship, and it will take effect over the next three years, applying to any student attending a two- or four-year state or city university whose family earns less than $125,000 a year.

Considering that the median household income in New York state was $60,850 in 2015, this could make a huge difference for many families trying to send their kids to college.

— (@)

"College is a mandatory step if you really want to be a success ... and this society should say we're going to pay for college because you need college to be successful," Cuomo said in his Jan. 3 announcement alongside Sen. Bernie Sanders, who made debt-free college a big part of his presidential campaign. "Other countries have already done it. It's time this country catches up."

Sanders is far from just a silent backer of the project. He took the stage to give a short speech expressing his support for Cuomo's plan, later tweeting, "If New York makes public colleges and universities tuition-free, mark my words, state after state will follow."

— (@)

Cuomo's plan could be America's first big step toward what many schools across Europe already offer: free or nearly free college tuition for all residents.

Image via iStock.

Public colleges in Germany, Norway, Iceland, and Finland all offer free college tuition for students, no matter their household income — those countries even offer the same deal to international students, which is why American students sometimes opt to go abroad for their degrees.

Free tuition does come with a cost. The money has to come from somewhere, after all.

The reason colleges in other countries are able to offer free tuition is because their citizens pay more in taxes. Countries like Germany also have lower enrollment percentages than the U.S. as a whole.

New York has the third-largest state economy in the United States (on par with all of Canada), with over 1.3 million students attending public colleges. So the program could end up costing much more than the current proposal of $163 million.

There is evidence that tuition-free programs for middle- and low-income students do work in the U.S. on a smaller scale.

In 2015, Stanford University announced tuition would be free for students from households earning $125,000 and under. In fact, all the Ivy League schools (along with other privately owned schools) offer tuition wavers for households earning $75,000 or less. Just as a state would draw from taxes, these schools draw from student tuition funds and other funding sources to make economic diversity on campus a reality.

Stanford University. Photo by Harshlight/Flickr.

Cuomo's plan for one of the wealthiest states in the country has the potential to set a precedent to finally open those doors to any American who wants to walk through them.

Higher education should not only be available to the financially savvy or those lucky enough to be born into wealthy families. No one should have to go into severe debt to get the degree they need to get a job, contribute to the economy, and succeed in life.

You can show your support and learn more about the Excelsior Scholarship program here.

From Your Site Articles

Bernie Sanders delights Inauguration audience by simply being his adorably authentic self - Upworthy ›

Millennials moving back home seems to be one of the themes of this generation.

Image from iStock.

But the narrative around "moving back home" can be muddy. Why is it happening? What is it like to live at home? Is it a last resort or a smart choice? Here are six numbers that tell the story many people are missing:

39.5% (How many millennials lived with family in 2015)

That's a 75-year high, according to an analysis by real estate site Trulia. Though the economy's recovered since the 2008 economic crisis, the share of 18-35-year-olds living at home has continued to rise.

24.1% (The number of kids living at home in the 1960s)

Though the number might seem high, it's worth remembering that there's always been some proportion of young people who live with families. The 60s were kind of the low bar for living at home, but that said, 24.1% of young adults still lived with family in 1960. Afterward, the number rose again, staying mostly in the low 30s from 1980 onward.

1940 (the last year so many young adults were in this situation)

In that year, about 40.9% of young adults lived with family, according to the Wall Street Journal. At the time, the U.S. economy was still recovering from the Great Depression and was still a few years from the giant post-World War II boom.

$30,100 (the typical amount of a millennial's student debt in 2015)

Student debt has become an unprecedented problem for young people. The median 2015 undergraduate will end up owing more than $30,000 in debt. That's up more than 50% in the last 10 years, according to the Institute of College Access and Success.

-$2,362 (how much real wages have changed — yes, it's a negative number)

If you adjust for inflation, median young households are making more than $2,000 less than a Gen-Xer did in 1998, per year, according to the Pew Research Center. It was $63,365 back then versus $61,003 today.

(That said, millennials are still up about $1,000 from boomers in 1980, but if you factor in student debt, an extra $1,000 doesn't seem to count for much.)

$234,900 (how much the typical new home will set you back today)

While wages haven't been going up, home prices have. According to CBS News, a new home will set you back almost a quarter of a million dollars, on average, as of this writing. That's up about 7% from last year. Rental prices have also been rising pretty dramatically.

Put together, the economic bar for independence is rising while wage stagnation and debt are pulling millennials down. Of course, millennials are still a major force in the housing market. About 35% do, in fact, own their own homes, and millennials make up the biggest share of first-time home buyers. There's just so many of them.

Today's young adults live in a different world from their parents. These numbers explain a lot about their new reality, and they show that some things will need to shift.

Image from iStock.

Things like stigma or expectations or even maybe policy about housing will need to change. And of course, everyone's going to have to do what's best for them. For some people, the best thing to do might mean moving away. For some people, that means moving back home.

So the next time you find yourself in another conversation about millennials, remember these numbers. And that behind them are real, difficult, complicated, weird, but most of all human stories and decisions.

It's not quite Oprah yelling 'You get a car! You get a car!' It's better.

Just by pressing a button, John Oliver made the largest one-time giveaway in TV history — nearly $15 million.

All GIFs from "Last Week Tonight with John Oliver."

The money went to nearly 9,000 individuals, and while they won't be receiving a check or a fancy car, their lives will be getting so much easier thanks to Oliver and his team at "Last Week Tonight."

During his segment on debt buyers and collectors, Oliver focused on a specific kind of delinquency: medical bills.

According to the Centers for Disease Control, in 2012 nearly 1 in 6 families in the U.S. has struggled paying their outstanding medical bills; 1 in 10 families weren't able to pay bills at all.

That's billions of dollars worth of debt from millions of people.

The fact that medical bills are a typically unexpected expense makes that particular form of debt ripe for a very opportunistic and surprisingly unregulated industry: debt collectors.

Here's how debt buyers and collectors work.

It starts with a debt. One of the examples Oliver used was the case of a man who was hospitalized for four days with respiratory issues, later finding out that his insurance wouldn't cover the cost. This left him with $80,000 worth of debt he had no way of paying.

If the debt goes unpaid, the hospital might sell the rights to collect on it to a third party (a debt buyer), and then they can go about trying to collect it.

The problem here is that there's very little documentation that goes along with the sold debt, making it hard to prove who owns it and whether or not it's been paid off. While there is a statute of limitations on debt collection, debt buyers bank on the fact that the average consumer doesn't know that and will continue to try to collect — some with less than friendly tactics.

Basically, it's a big, stressful, anxiety-inducing mess for the person at the center of it all.

To prove just how easy it is to get into the debt-buying business, "Last Week Tonight" started their own collection agency.

After paying $50 to start their own agency, with Oliver listed as the chairman of the board, the "Last Week Tonight" team was offered the opportunity to buy nearly $15 million in medical debt from a group in Texas. The price? A little less than $60,000.

In exchange, Oliver was given a spreadsheet with thousands of names, phone numbers, social security numbers, and debt amounts. If they wanted to, the "Last Week Tonight" agency could have set about trying to collect on the nearly $15 million.

But they didn't.

Oprah's famous car giveaway was valued at around $7 million. Oliver nearly doubled that.

And unlike Oprah's car giveaway, there won't be any adverse tax consequences for the people whose debt has just been forgiven.

So. Freakin. Cool. Right?

You can learn more about credit buyers by watching the video from "Last Week Tonight," posted below.

These fine-print tips could help you better understand what you're signing up for.

When a shiny new credit card shows up in the mail, what's the first thing you do?

If you’re like most people, you activate it, peel off that sticker, and load it into your wallet like artillery in a spending cannon.

Welcome to adulthood! Image by Sean MacEntee/Flickr.

But what about all that other stuff that comes along with the card? Petite as they are, credit cards usually arrive in thick envelopes, jam-packed with all the information issuers have to disclose by law.

That, my friends, is your credit card agreement, and every time you swipe that cut of beveled plastic, you’re giving two thumbs up to everything therein.

During my first few years out of college, I had no idea what terms like "overdraft protection" or "cash advance" meant.

I paid plenty of fees as a result, some of which I got refunded by calling and asking nicely. But if I’d read and understood my credit card agreement, it would have saved me hours of frustration.

Recently the CARD Act outlawed a few of the worst practices that some credit card issuers use (things like "universal default" and "double-cycle billing"). But no matter what, you do need to know the nitty-gritty details of credit cards before you start swiping. Here are five areas of your credit card agreement that could throw you for a loop if you’re caught unaware.

1. Cash advances

First, you should definitely check out the Schumer box on your credit card agreement, which outlines stuff like annual percentage rate (APR), grace period, and annual fees (if applicable). That’s a good place to start. (If you're like me and you’ve already tossed your credit card agreement, you also can pull up a copy online, either on the Consumer Financial Protection Bureau’s credit card agreement database or on your card issuer’s website.)

Photo by _Dinkel_/Flickr

But here’s something I found out after I’d had a credit card for a while: Many issuers charge a transaction fee for cash advances on a credit card, plus interest that starts immediately, not after a grace period. "Even if you did read all the fine print, that’s something you might not understand,” says Beverly Harzog, credit expert and author of "The Debt Escape Plan: How to Free Yourself from Credit Card Balances, Boost Your Credit Score, and Live Debt-Free."

Unfortunately, it’s easy to take a cash advance without even realizing it. For instance, if you overpay your bill and transfer the extra money back to your bank account (as I once did) or you mistakenly use your credit card instead of a debit card at an ATM.

2. Late payments

Grace periods can vary from card to card and not every card has one. Paying your bill late not only damages your credit score, but if you pay more than 60 days late, it could trigger a higher penalty APR. “You could end up with that penalty rate retroactively against your whole balance,” Harzog says.

Plus, your issuer could revoke any rewards you’ve earned (buh-bye, Bermuda trip!). "If you do make a late payment, call the issuer right away and let them know what happened," Harzog says. "If you’ve got a good payment history, they might not do anything to your rewards."

3. Fees on top of fees

You probably know you’ll be charged interest on any unpaid balances. But what about things like balance transfers, foreign transactions, and overdraft protection? Alas, you don’t even have to leave your home country to get hit with a foreign transaction fee, I’ve learned. If you’re ordering online from a company that uses a foreign bank, the fee may still apply and it typically adds 1-3% to your transaction.

Photo by wsssst/Flickr.

With a prepaid or secured credit card, your issuer may also charge you a monthly fee and other fees that you may not expect unless you read the agreement closely. Knowledge is power, people!

4. Mandatory arbitration

If something goes wrong, you can always take them to court, right? Power to the people! But not so fast ... some credit card agreements actually strip you of this right, so if something goes wrong, you can’t sue them in court. Instead, a third-party arbiter would rule on your dispute and their decision would be binding.

In some cases, you even have to pay filing fees if you initiate the claim. Total lame sauce!

5. Terms are subject to change

Now that you’ve untangled the terms of your credit card agreement, here’s the kicker: Almost everything is subject to change. That’s right: card issuers can devalue your rewards, increase your APR (although usually not in the first year you have the card), or remove perks like warranty coverage or travel accident insurance.

For most changes, they must notify you in writing, so don’t toss any communications from your credit card issuer before reading it thoroughly. If you have a card with a low introductory APR, the card issuer doesn’t have to notify you when the introductory period ends and a higher APR kicks in automatically.

The bottom line: Read your credit card terms carefully, no matter how boring they are.

That's true adulting. “If you don’t understand something, call the company and ask,” Harzog says. “If the customer rep doesn’t understand, ask to speak to their manager.”

It's better to spend a few minutes familiarizing yourself with the agreement and to walk away armed with knowledge than find out the hard way about late payment fees or penalty APRs. Take it from someone who's been there.

Family

5 things you can do to catch up if you overspent on the holidays.

It's easy to overspend. Here's how to reel things back in.

Oh, January. How we love you and also hate you.

It's so good to have the hubbub from the holidays fading out and a slower pace setting in, but then the bills come. Whether you put holiday spending on credit or are just short on cash from the constant outpour that seems to happen, some strategies for pulling ahead financially could come in handy.

Here are five relatively easy things you could do to generate some cash and dig out faster.

1. Play with some dogs.

If you love dogs and you can have them at your place, why not take in some darling pooches on the weekends or other times when you'll be home? It's work, but it's not work-work (because snuggles!).

Two sites where you can plug and play to get connected to customers looking for dogsitters are Rover.com and Dogvacay.com (some sites include other pets as well!). You can set your own rate based on the market around you (for instance, $40 per night, if that's the going rate) and the companies take a small percentage in return for insuring you and the dog.

Why is the Netflix all upside down? Image by Carlos Pacheco/Flickr.

2. Consider letting people pay to stay at your place for short stints.

If you're going to be gone for a trip yourself you can spiff the place up and Airbnb it. Or if you have a guest room and can handle being a thoughtful host, you can rent it out while you're home.

Airbnb is a site that lets residents and travelers connect to arrange temporary stays (as an alternative to a pricier hotel, usually). It's not without its risks, but you can screen potential guests by checking reviews from previous hosts they've stayed with. Another site that can connect you with temporary renters is Vacation Rental By Owner, but that's usually for solo access to your pad while you vacate the premises.

You don't have to have a swanky pad to host guests. Just a clean, comfy, fairly-priced space. Image via Lochoaymca/Wikimedia Commons.

3. Have that rummage sale now instead of waiting for the summer.

If you have an accumulation of items you're storing away with the intention of having one big weekend sale, try something different. Facebook features local rummage sale groups in nearly every city, and often the members sell items one at a time. So take a picture, post it, and see if anyone's interested. You could wind up with a cleaner home and extra cash for paying off your cards.

Screenshot from Facebook.

4. Teach a course online if you have a special set of skills to share.

Through Udemy or Skillshare, you can create a course based on skills you are proficient in and enroll online students. Are you able to teach coding, YouTube optimization, marketing basics, or social media strategy? You could be sitting on extra cash you can use to pay off debt!

Screenshot from Udemy.

5. Re-evaluate the level and scope of gifting you do annually.

Giving is so fun! It feels so good to have a little something for people you appreciate in your life. But the truth is, for a lot of us, it's become an unsustainable strain in this economy.

It's not worth it to push ourselves into debt to fulfill what we think we have to do to keep up with expectations.

Does your extended family give every adult family member gifts? Talk with them and let them know you'd rather do a gift exchange.

Consider handmade gifts. It sounds hokey but believe it or not, people often really love getting something so personal — it feels like being part of your real inner circle to get something someone made themselves.

I made jars of preserved lemons last year, and including all supplies, ingredients, and decorative ribbon, it cost me about $30 to have a little gourmet-something to give to about 15 people I wanted to have a gift for.

What tastes better than not being in debt? Image by Jules/Flickr.

With a little forethought and planning, you can set yourself up to spend much less next year and stop the cycle of debt.

Go forth, you generous gifter, you. May the winds of financial resourcefulness propel you forward.

Heroes

Feeling bad about your debt? Seychelles just used theirs to save the ocean.

The plan will help protect an area of ocean larger than Germany!

True

Go to Kenya, run down to the coast, and swim kind of east-ish for a thousand miles, and you'll hit the Seychelles archipelago.

Image from Didier Baertschiger/Flickr.

Made up of 115 islands, they don't have a ton of land or a huge population, but they do have some amazing biodiversity. Fish and coral reefs throng the waters, and giant tortoises plod around on land.

The nation's pretty serious about its conservation; their constitution even guarantees citizens the right to an ecologically healthy environment.

They also have, like, the coolest flag ever. Image from Vxb83/Wikimedia.

And, like many nations these days, they owe some debt. But something pretty clever just happened.

In a debt swap deal between the government of Seychelles, its international creditors, and The Nature Conservancy's NatureVest investment branch — plus some negotiating help from the French government — Seychelles may have just turned some of its national debt into money to protect their awesome environment.

Wait, how does that even work?

Basically, the Seychelles owed some people money. NatureVest came along and said, "You know that debt you owe? We'll loan you about $30 million so that you can pay some of it off. But, in return for paying of your debt, we want you to put the money you would have paid into this special trust fund we're setting up."

The trust fund, meanwhile, will use some of the money to reimburse NatureVest's initial investors (who ponied up most of the loan). But some of it will go into a long-term endowment too. And, a large chunk, about $6 million overall, will go to funding conservation projects.

So the creditors get paid, Seychelles gets more money for conservation, and NatureVest gets a little extra bang for its investment buck. It's kind of a win-win-win.

Image from Olivier Cochard-Labbé/Flickr.

It's like a bank took your car loan and used it to build a park next to your house.

The plan will help turn about 100 million acres of sea into marine protected areas over about five years. That's an area larger than Germany!

The money will also help fund projects to manage and protect their coasts, mangroves, and coral reefs.

This is really good news for Seychelles. Fishing and tourism combined make up about a third of all the jobs and a quarter of the GDP in Seychelles, so protecting their rich, beautiful waters is pretty dang important. Losing those two industries would be like the U.S. losing all of its manufacturing, retail, and wholesale trading jobs.

It's really hard to overstate how vital a healthy ocean is to Seychelles' prosperity. Image via Nina/Flickr.

The money couldn't come sooner. Climate change is going to make things rough.

Seychelles, like a lot of low-lying island nations, is particularly vulnerable to climate change. Coral bleaching could kill off their reefs. Rising sea levels and stronger storms could flood their land.

But this new deal could give Seychelles a little extra oomph in their preparations and response. If it turns out to be successful, it could be a blueprint for deals with other island nations.

Image from Simisa/Wikimedia Commons.

Protecting our oceans is one of the best things we can do to ensure everyone access to a healthy, stable global environment.

If you're interested in helping out but aren't sure what to do yet, sign this petition from the League of Conservation Voters showing Congress your support for the Clean Power Plan.