As of the second quarter of 2022, $1.59 trillion student loan debt is outstanding. In 2019, before the payment pause, 44% of borrowers were actively attempting to make payments. Among borrowers with outstanding debt, 12% were behind on their payments as of 2021. If you are considering taking out student loans, or have already taken them out and are struggling with repayment, here are some things you need to know about the consequences of non-payment....

As such, they are responsible for assigning a mentor, the new employee welcome and onboarding, the integration of the employee with the rest of the department’s staff, the ongoing overall direction of the new employee’s job and objectives, and all other responsibilities that come with a manager’s role. How Hiring Managers Begin Their Process Depending on the size of the organization and the number of roles they’re hiring for, the hiring manager may participate in every aspect of employee recruitment....

In fact, recent studies have shown that employees of companies that embrace D&I are able to make better, faster business decisions and are more likely to spur revenue growth through innovation. What Is Diversity & Inclusion? While “diversity” and “inclusion’’ might be familiar terms, it’s important to clearly define them. Diversity not only refers to race, but also age, gender, ethnicity, religion, sexual orientation, disability, education, national origin, as well as marital and socioeconomic status....

Company bankruptcies are often complex and lengthy processes. In the period leading up to, during, and following a bankruptcy, the financial issues are almost certain to affect shareholders. Learn more about what happens to stock if a company goes bankrupt. Bankruptcy: Definition and Facts When a company has so much debt that it can’t realistically keep up with its bills, it has several options moving forward. One of those options is bankruptcy....

Keep reading to better understand what a credit event is, how it occurs, and how it can trigger a credit default swap (CDS). Definition and Example of Credit Event A credit event is a financial event that changes a borrower’s creditworthiness, or perceived capacity to repay their debt, in a negative way. It can trigger the settlement or protections of a credit default swap, which is a type of credit derivative or financial contract used for hedging....

Definition and Example of Defined Benefit Plan A defined benefit plan is a type of retirement plan that employers offer their workers, guaranteeing them a fixed retirement income. An employer determines how much benefit each employee is eligible for based on their average salary and their years of employment. Then, the employer contributes to the pension plan on behalf of each eligible employee to ensure the funds are available for them during retirement....

There are two methods for calculating the delinquency rate. One formula is this: Delinquency rate = Number of delinquent loans / Total number of loans Multiply this number by 100 to get the delinquency rate as a percentage. Here’s a quick example: In a pool of 1,000 loans, 10 of them are delinquent. Using the formula above, you would calculate the delinquency rate as follows: 10 delinquent loans / 1,000 total loans = ....

Learn what a family limited partnership is and how families use it to finance a business endeavor or manage their wealth and investments. Definition of a Family Limited Partnership A family limited partnership is a legitimate business structure used by families to pool their resources for business and investing purposes. Each family member involved in the partnership becomes a shareholder and has specific powers and authority based on the partner role the charter or operating agreement grants them....

Alternate name: Home equity line of credit For example, if your home is appraised at $300,000 and your current mortgage balance is $200,000, you have $100,000 of equity in your home. If your lender allows you to borrow against 80% of your equity, you can take out a HELOC with a limit of $80,000. How Does a HELOC Work? Sometimes you have financing needs that can’t be handled with a credit card—debt consolidation, home improvements, medical expenses, or education expenses, to name a few....

A high-water mark doesn’t only mark the highest value a fund has reached; it can also be a factor in the fund’s fee structure. When a high-water mark is part of a fund’s contract, you only pay a performance fee on returns above the previous mark. The effect is that if an investment falls in value, then you won’t have to pay the performance fee on returns that increase your account back to the previous high value....

Alternate names: Magnetic strip card, swipe card, magstripe Some examples of magnetic stripe cards include: Credit cardsBank cardsATM cardsTransit cardsID cardsHotel key cardsLibrary cardsAccess cardsGift cardsLoyalty cardsMembership cards How Do Magnetic Stripe Cards Work? The magnetic stripe on the back of a card is composed of three smaller stripes made of tiny, iron-based magnetized particles. These are called data tracks, and they hold the personal information and security functions relevant to an account....

Unlike a regular savings account where you might move money in and out a few times per month, a CD generally involves leaving your deposit in that account for the length of the CD’s term, which can be months to years. The longer you agree to leave your money in the account, the more interest you’ll typically earn. If you pull the money out before the CD reaches maturity, you often face penalties....

There’s no age at which account owners must begin to take money out of their Roth IRA. This makes the account a good choice for those who want to pass along wealth to their heirs or loved ones. You can only contribute money to a Roth IRA if your modified adjusted gross income (MAGI) is less than a certain threshold. You can invest the money you add to a Roth IRA in assets of your choice, such as stocks, bonds, or mutual funds....

How Does a Surrender Charge Work? Surrender charges are assessed as fees when you cash out your annuity early. You will receive the amount that you cash out minus the surrender charge. The surrender period for these products varies, but for the most part, it is between six and eight years. After that point, you no longer have to pay a surrender charge. Some firms may waive these charges if the interest being offered on the contract falls below a certain level....

In 2019, total angel investments amounted to $23.9 billion, an increase of 3.2% over 2018, according to the Center for Venture Research at the University of New Hampshire. Not just anyone can be an angel investor. Typically, angel investors are wealthy individuals who use their personal assets to invest in startups. And out of a desire to protect the investing public from fraud, angel investing is generally limited to accredited investors who are legally defined at the individual level by specific training or financial means....

Estate planning is the process of developing an estate, often with the help of financial professionals, although you can create a plan yourself. A lawyer, accountant, financial advisor or financial planner, investment banker, or insurance broker are among the professionals who may assist with an estate plan. The goal of an estate plan is to address how a person’s estate is managed during their life and after their death. Estate plans are tailored to the person’s needs and goals, so they vary by individual....

While you are likely to lose your money at a casino, a well-planned investment strategy can help you reach important long-term goals like adequate retirement savings, homeownership, or sending your kids to college debt-free. Keep reading to learn what investments are, how investments work, and how you can start investing today with less than $10. What Is an Investment? According to the Consumer Financial Protection Bureau (CFPB), an investment is “something you spend money on that you expect will earn a financial return....

Banks can be placed into certain categories based on the type of business they conduct. Commercial banks provide services to private individuals and businesses. Retail banking provides credit, deposit, and money management to individuals and families. Community Banking Community banks are smaller than commercial banks. They concentrate on the local market. They provide more personalized service and build relationships with their customers. Internet Banking Internet banking provides these services via the world wide web....

Alternate names: Parked car insurance, comprehensive-only insurance For example, if your state allows it, you could switch to parked car insurance if you were going on an extended trip, and you wouldn’t use your car for that period. How Does Car Storage Insurance Work? Because storage insurance is another type of coverage, it works the same way that coverage works. If you’re allowed by state law to drop your insurance to liability coverage only, then it works the same as liability....

Let’s take a look at cross collateralization, how it works, and whether it’s worth using in your situation. Definition and Examples of Cross Collateralization The most important aspect of cross collateralization is that you are using property with an existing loan as collateral for an additional loan. This can be done intentionally, but in some situations, cross collateralization may be included in a contract without your realization. Read your loan contracts carefully in search of this term....