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5 Smart Ways to Lower the Cost of Therapy

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Source: iStock

Sasha Aurand has had to scramble for four years to find high-quality mental health care she can afford on her salary from running a website on psychology and sex.

The 25-year-old New Yorker suffers from post-traumatic stress syndrome, depression, and anxiety, and has no health insurance.

“So I’ve always had to find other solutions,” she tells MagnifyMoney. Aurand originally sought help for these conditions while still a college student in Indiana. But after the school’s counseling center referred her to a private practice she couldn’t afford, she researched, asked around, and found a community health clinic where a therapist helped her for $20 a visit.

After graduating from college, Aurand moved to New York, where she briefly had health insurance, enabling her to see what she describes as a “phenomenal psychiatrist” for depression medications. But her insurance ended, and she could no longer afford the psychiatrist’s $350/hour fee.

Aurand is not alone, having to be resourceful finding doctors and therapists in her price range. According to the 2016 State of Mental Health in America report, one out of five American adults with mental illness report they are unable to get the treatment they need, often due to cost. And with an uncertain health care climate in Washington, the challenges are unlikely to ease soon.

Although the Senate failed in its recent attempt to repeal the Affordable Care Act — an effort, says Colin Seeberger, strategic campaigns director for Young Invincibles, “that would have allowed states to opt out of the ACA’s essential benefits, such as substance abuse and mental health coverage” — there’s still some instability in the insurance markets as a result.

In such a confusing environment, how can you find the help you need at a price you can afford?

Here are a few options if you’re looking for affordable therapy options:

1. Work with a therapist-in-training

If you live near a university with a graduate psychology program, it most likely has an in-house clinic. You can see a trainee at one of these clinics for a reduced fee. Yes, the therapists are students, but each one is closely supervised by a seasoned, licensed professional.

Pros: “Because the therapists are still in school, they’re up to date on the latest developments in psychology,” says Linda Richardson , Ph.D., a psychologist who works with the National Alliance on Mental Illness in San Diego. “You’ll also have the advantage of two heads being better than one.”

Cons: Most trainees work at these clinics for a year or less. If you find someone you like, they’re eventually going to leave.

2. Don't be afraid to ask about sliding scales or reduced cash fees

After losing her insurance, Aurand went back to her $350/hr psychiatrist and "explained the situation and asked if there was anything she could do,” she says. The psychiatrist agreed to see Aurand for $100 a visit as long as Aurand paid in cash. Aurand now sees the doctor every three months.

Many therapists offer a sliding scale based on a patient’s income. If you find a therapist you like, let him or her know your financial concerns and inquire about paying a lower fee. Another option is to check out Open Path Psychotherapy Collective, a nonprofit that lists therapists who offer a few weekly sessions at a lower rate. There’s a one-time $49 fee to join the collective; therapists in the collective charge $30 to $50 per session.

Pros: With a sliding scale, you get all the benefits of good, one-on-one therapy at a lower rate.

Cons: If you don’t reassess the financial arrangement occasionally, says Erika Martinez, a psychologist in private practice in Miami, Fla., “a therapist can become resentful or frustrated with a client,” especially if your income rises. To avoid this, discuss payments every few months to see if an adjustment is needed.

3. Consider group therapy

According to the American Psychological Association, group therapy works as well as individual therapy for many conditions, such as depression, PTSD, and bipolar disorder — and for a fraction of the price. Martinez, for example, charges $150 an hour for individual therapy but only $65/hour for a group session.

Pros: There’s a lot of power in knowing you’re not alone. “When you share about your struggles in group where others have the same concerns, and you feel their empathy, that’s incredible,” says Martinez.

Cons: Some people aren’t comfortable speaking about emotional issues in a group. Also, you have to share the therapist’s attention with others.

4. Try online services & therapy apps

There are many online tools, including and that offer individual therapy sessions with licensed therapists over the phone or via a secure, HIPAA-compliant video for considerably less than an in-office visit. Rates vary, but if you search, you can find someone affordable.

Several California-based therapists (among the most expensive in the nation) on, for example, offer sessions for as low as $55 an hour. A note of caution: Choose someone licensed in your state. In case of an emergency, a therapist can only help secure needed services if you’re in the same state.

Pros: You can get high-quality, one-on-one therapy without ever having to leave your home, office, or pajamas — and at a reasonable cost.

Cons: Insurance often doesn’t cover phone or video sessions. “Also, you can’t fully see the nonverbal language of the therapist,” says Martinez. “And the Internet connection can be bad.”

Better Help App. Source: iTunes

Therapy apps — which allow you to text or chat with a licensed therapist — are becoming increasingly popular. Among the many available are,, and Studies in both The Lancet and the Journal of Affective Disorders have shown that online therapy is an effective way to get help, and many services start for as little as $35 a week.

TalkSpace app. Source: iTunes

Pros: You can get help anytime, anywhere, even while sitting in a business meeting or on the subway. Also, it’s a good option for people afraid to walk into a therapist’s office.

Cons: Chat and text therapy, which are not covered by insurance, are inappropriate if you’re feeling suicidal or have severe mental illness. And some people find the technology alienating. “I tried one of these apps a few years ago,” says Aurand, “ and I just missed the human interaction of seeing a therapist in person.”

5. Tap into community resources for free or discounted counseling

You can find psychological and psychiatric care at public mental health clinics, which offer services for free or on a sliding scale, based on your income. Organizations devoted to helping survivors of sexual assault and domestic abuse also offer a wide range of services, including free counseling. And religious organizations, such as Jewish Family Services, often offer therapy on a sliding scale. The best way to find resources in your community, says Richardson, is to dial the information hotline, 211, on your phone or look online at

When her PTSD flares up and she needs to talk to a therapist, Aurand supplements her psychiatrist visits by going to a community health clinic, the Ryan/Chelsea Clinton Community Health Center, which offers a sliding scale based on her income and charges $100-$125 a session.

Pros: You can find good care for low or no cost.

Cons: The demand at public health clinics is huge, and staffs are often overwhelmed. “There can be long waiting lists, especially for individual counseling,” says Richardson. “You may have better luck if you’re willing to join a group, such as anger management, that fits your needs.”

The bottom line

When it comes to finding affordable mental health care, persistence is the key. “It can be really daunting, especially if you’re not feeling well or don’t have insurance and think you can’t get help,” says Aurand. “But if you take the time and do your research, you’ll find someone who wants to help you. There are a lot of good therapists and psychiatrists out there, and it’s not necessarily all about the money.”

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Financial Resources for Veterans in Debt

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Source: iStock

Many of America’s military service members and veterans report that financial stress is hurting their emotional and mental health as well as their ability to set future goals.

Among the respondents to a 2017 Military Family Advisory Network survey, a staggering number — 92.5% — reported they have debt, while 44% of the group reported financial stress is detrimental to their emotional and mental health. The report detailed the financial burdens of 5,650 in active military service, veterans and their family members.

What it uncovered is a problem that for many American military families runs deeper than simply taking on too much debt.

The majority — 60% — said they do not have enough savings to cover three months of living expenses. Some respondents said they struggle to provide basic needs like food and child care, and 49% reported an unwillingness to further their education because of financial barriers.

In short, the Military Family Advisory Network report said military and veteran families have a hard time getting ahead financially.

What drives veterans into debt

Relocation expenses

While civilians may have similar financial struggles, Joseph “J.J.” Montanaro, a certified financial planner with USAA, which provides financial products and services for the military community, said those struggles can be compacted for military families because of the military lifestyle.

Nearly 32% of respondents in MFAN’s report said they have moved three to five times, and 79% of all respondents said moving caused high financial stress.

“When you don’t know when the next move is going to come, while the government covers the majority of expenses with a move, there are always going to be those things that aren’t covered — something as simple as putting the kids in new sports programs or paying all the deposits on your utilities,” said Montanaro.

Bruce McClary, spokesman for the National Foundation for Credit Counseling (NFCC), attributes the largest financial concern to relocation. McClary worked as a financial counselor for military families and saw the issue of relocation resurface several times.

“When you’re relying as much on a dual-income household, and you have to relocate because of the job of one spouse, whether you’re military or not, that’s going to cause some disruption,” McClary said.

Despite the logistical and financial support from the military, McClary says there could be immediate or lasting impacts on the family’s financial resources if the civilian spouse has to find a new job with possibly lower income.   

False sense of financial security

Although military families have more job security than other sectors, Montanaro said that steady paycheck can create a false sense of security, which can easily discourage savings. In some of cases, families or individuals won’t set aside funds for emergency situations because they feel as if they have a guaranteed income.

Furthermore, service members returning from long deployments overseas may seek to make up for lost time, he said, and make spending decisions that are based on emotions (like buying a new car or going on a family trip) but don’t make the most financial sense.

“When you look at the military culture, it puts a premium on independence and taking care of yourself and not being a burden,” Montanaro said. “It’s not necessarily a culture that ingrains the idea of asking for help.”

Lack of savings and a desire to manage matters themselves can also leave military families searching for ways to fill in the gaps. Those who do not have much experience managing money may be vulnerable to predatory lenders and aggressive debt collectors.

Predatory lending, whether through auto financing or payday lenders, starts with living beyond your means, Montanaro said.

By volume, debt collection — including attempts to collect a debt not owed — tops the list of service members’ complaints to the Consumer Financial Protection Bureau and outstrips similar complaints made by nonservice members in every state and territory, except North Dakota, where it comes second in the list of complaints.

Where servicemembers can seek financial support

On base. Every military installation has a personal finance management program, on-installation counselors, and on-base advisers that can help answer financial questions, Montanaro said.

“Look to those on-base or on-installation resources, because they’re there for the express purpose of helping military members get to a better place financially,” he said.

NFCC and Military OneSource: The nonprofit NFCC partners with Military OneSource, which offers strategies to help service members consolidate and pay down debt, as well as save for retirement or college and create financial plans. The NFCC, which is the longest-serving and largest national nonprofit financial counseling organization in the U.S., also has a branch specifically to help with military families’ debt relief.

Financial Institution Regulatory Authority: The Financial Institution Regulatory Authority (FINRA) offers a fellowship program for military spouses to earn an Accredited Financial Counselor certificate and to develop financial skills. The program is in partnership with the National Military Family Association, and there is no cost to participants. More than 1,480 fellowships have been awarded since the program began in 2006; applications are accepted until the end of April.

ClearPoint Reconnect: The program provides online and phone counseling in English and Spanish, online financial education (courses include Managing Financial Stress and Reshaping Credit) and identifies local resources to help veterans reach their short-term financial goals and create economic stability. The counselors are knowledgeable about opportunities through HUD, FDIC and the U.S. Department of Veterans Affairs. ClearPoint has partnerships with organizations such as New Directions for Veterans and Operation Homefront. ClearPoint, an Atlanta-based division of Money Management International, says there is no cost for military service people to participate.

Consumer Financial Protection Bureau’s Office of Servicemember Affairs: The CFPB, a government agency that makes sure banks, lenders and other financial companies treat consumers fairly, recognizes the unique financial challenges military families face. CFPB’s Office of Servicemember Affairs monitors complaints, and offers tools and resources to assist military homeowners, make student loans more affordable, provide predatory loan protections and recover money for military members who have been targeted by scams and illegal practices.

Operation First Response: For more immediate help, Operation First Response offers financial assistance for groceries, utilities, rent and clothing to veterans suffering from physical disabilities and mental distress. In 2017, the nonprofit helped 1,366 veterans, with the average grant size between $500 and $1,500.

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The GOP’s Dodd-Frank Overhaul is Underway — Here’s What It Means for You

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

what to know about chexsystem

*Update: On Wednesday, the Senate voted 67 to 31 to overhaul the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 in a bipartisan effort to loosen several financial regulations put in place in the wake of the financial crisis. It will now move to the House. 

One of the most hotly contested components of the bill is its aim to loosen oversight of all but the largest banks in the U.S., freeing community and regional banks from tightened regulations they had long complained were overly oppressive. 

There were some new amendments added to the rule that were aimed at consumer protection, such as preventing lenders from putting student loans into default after a borrower dies or declares bankruptcy, CNN reports

The Congressional Budget Office released a report ahead of the Senate’s vote, warning that the bill's amendments could increase the likelihood of another financial crisis.  


After successfully ushering in the biggest tax overhaul in three decades, the GOP continues to follow President Trump’s lead in their efforts to deregulate the financial sector and create policies that buoy big businesses in the U.S.

The Senate is expected to cast a final vote Thursday on a bill that aims to scale back the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The Dodd-Frank Act was a sweeping piece of legislation that aimed to tighten government oversight of big banks in wake of the Great Recession. The bill is widely expected to pass as it has support from a dozen Democrats in the Senate, and the majority of Republican senators are likely to vote for it.

In an open letter to senators, the Center for Responsible Lending, the National Community Reinvestment Coalition and the National Consumer Law Center called the bill “harmful legislation.”

If it passes, this piece of legislation would be the most significant rollback of financial reform since the financial crisis, according to Joe Valenti, director of Consumer Finance at the Center for American Progress, an independent, nonpartisan policy institute based in Washington, D.C.

The bill has bipartisan support and surprisingly does not contain any mention of scaling back the Consumer Financial Protection Bureau. The CFPB was a centerpiece of the Dodd-Frank bill, and it was given wide reign to regulate and monitor the financial services industry.  But that doesn’t mean the CFPB is safe.

As the GOP works to reduce the scope of Dodd-Frank regulations in Congress, Mick Mulvaney, the acting director of CFPB, is doing his part to scale back the agency through other means. Most recently, he announced a review of the “usefulness” of the agency’s consumer complaint gathering and reporting, which includes a consumer complaint database available to the public.

What could these deregulation efforts mean for consumers? We reached out to experts to find out what consumers really need to be concerned about. Those who would be hit the hardest are the country’s most financially vulnerable homeowners and homebuyers — the lower-income families, the minorities and rural Americans, experts say.

Fewer banks are "too big to fail"

In wake of the financial crisis, many banks required taxpayer funds to help bail them out and avoid total collapse. To avoid this in the future, legislators made sure the Dodd-Frank Act included increased oversight over banks’ finances. In order to determine which banks were considered “too big to fail” and needed to be included in this enhanced oversight, the government decided to judge based on assets. Any bank with assets over $50 billion was included, which smaller banks have long argued was unfair and saddled them with much more administrative hassle (i.e. lots and lots of paperwork).

The newest version of the bill intends to ease those oversight requirements by increasing the enhanced oversight threshold to $250 billion from $50 billion. This means that 25 of the biggest 38 U.S. banks — which together hold about one-sixth of the assets in the entire financial sector — wouldn’t be subjected to stricter rules, Valenti explained.

This part of the legislation wouldn’t affect consumers immediately, but in the long run, its impact could be far-reaching. Dodd-Frank introduced strict regulations after the financial crisis to prevent future bank failures and bailouts. With the absence of regulation, it’s possible that banks could fail, particularly in an economic downturn, Valenti said. And in that case, the government could decide to use taxpayer funds once again to bail them out.

The 2008 financial crisis was a case in point.

“In every state, in 2009 and 2016, the magnitude of the crisis was so severe that people may not have felt the bank failures directly, but they felt their own financial situations deteriorate in unemployment and in bankruptcies, and people not being able to keep up with their mortgages and their credit cards,” Valenti said.

How homeowners may be impacted

Some other pieces of the legislation that deal with existing mortgage rules, however, are sure to  have a more direct impact on homeowners.

The new bill expands an exemption that allows mortgage lenders to avoid escrowing taxes and insurances on some high-cost mortgages. The escrow requirements forced lenders issuing loans for jumbo mortgages to set up escrow accounts in which future payments for property taxes and insurance could be kept. Basically, homeowners had to be able to make those payments upfront. The rule was enacted to make sure that homebuyers could afford their loans and additional costs.

“Potential homebuyers may not know exactly what they are getting into price-wise once you factor in taxes and insurance,” Valenti said. “And once they are in a home, without an escrow, people may find it difficult to come up with the money for a property tax bill or for homeowners insurance.”

In extreme cases, a homeowner could potentially lose his/her house or have to deal with forced placed insurance, which means the lender picks the homeowners insurance policy for the homeowner, which can typically be expensive and not very helpful to the buyer, Valenti said.

Another rollback of rules is likely to hit lower-income Americans living in manufactured homes, more commonly known as trailers.

As it stands, the Dodd-Frank Act prevents manufactured home companies from steering borrowers to their prefered lender. The new bill removes that requirement.

Alys Cohen, staff attorney at the National Consumer Law Center, explained that manufactured homeowners are some of the most vulnerable homeowners in this country because trailers are much cheaper than regularly built homes, but they may not necessarily provide the homeowner the same value.

“[The bill] makes it more likely that people with manufactured homes get much more expensive loans get than the ones they need to get,” Cohen said.

Race-based discrimination rules rolled back

Dodd-Frank requires banks to collect personal and financial information about the people they approve for loans, such as age, credit score and the race or ethnicity of the borrower, in greater detail than before. And this requirement was installed to monitor possible race-based discrimination in housing lending, experts say.

Before Dodd-Frank, experts say that evidence had shown that borrowers of color who had similar credit scores to white borrowers faced higher-cost mortgages or were targeted for inferior products. In some cases, minority homebuyers would not be able get a home in certain neighborhoods, Cohen added.

Valenti provided an example of how expanded the data is required by Dodd-Frank: “Instead of having a borrower just labeled as Asian Americans/Pacific Islander, you would have a field for Chinese or Vietnamese or Thai or what have you, which is is something I know that the Asian Americans/Pacific Islander community has really fought for over the years.” The same is true for other minority groups.

Valenti said that the specific data points are critical because policymakers, researchers and advocates rely on them to measure discrimination in housing finance.

Under the new bill, the expanded information would be no longer required for about 85% of banks and credit unions that make mortgages, experts say.

“If you carve 85% of the banks out of that requirement, there’s no way to insure that most banks in the country are making loans that aren’t discriminatory,” Cohen said.

Appraisal requirements change for rural homeowners

Another provision in the bill would potentially hurt homeowners in rural areas, where no home appraisal would be required at all if the loan is below $400,000 in home value. An appraisal can be a crucial component of the lending process, because it prevents homeowners from borrowing more money than their home is actually worth. If the appraised value of a property is lower than the buyer’s purchase price, banks will typically refuse to lend the homebuyer more money.

When there’s no uniform rule on how to decide how much someone’s home is worth before they take out a loan, the less likely the home value in rural communities would be accurate, Cohen said.

“The reason that matters is when you are taking out a loan, you want to make sure you are not borrowing more than your house is worth,” Cohen said. “If you borrow more than your home is worth, than you can’t cover the loan by selling the house.”

In this case, even if you sell the house, you still owe the bank extra money, Cohen explained.

“It also means that if you only think you are borrowing, for example, 80% of the home value and you are really borrowing 105% or 110%,” Cohen said. “Then you don’t have any more equity in the house to borrow against later if you need something in an emergency.”

What about the CFPB?

On the CFPB front, the picture isn’t rosy, either.

The CFPB is a federal government agency responsible for establishing consumer protection regulations and regulating key parts of the financial sector, such as the mortgage and debt collection industries.

The agency had zealously targeted bad actors in the financial industry since its creation, reclaiming nearly $12 billion for more than 29 million consumers. Its latest high-profile actions included fining Wells Fargo in the unauthorized accounts scandal and creating new rules around payday lending. It has also rolled out new regulations in the mortgage, credit card, debt collection and prepaid card sectors.

The Trump administration and Republicans have long sought to curtail the CFPB’s power as part of a broader effort to lighten federal regulation over financial institutions.

Richard Cordray was the agency’s first director, holding office from 2012 until he announced he was cutting his tenure eight months short at the end of November 2017. He had been criticized by Washington conservatives but was well-received by Democrats and consumer advocates.

Mulvaney, head of the Office of Management and Budget, took over the bureau in a drama that unfolded into a lawsuit. The fight over who is the legal boss of the bureau is still ongoing.

A former South Carolina representative, Mulvaney had said in a 2014 interview with the Credit Union Times that the CFPB was “a a sick, sad kind of way.” In 2015, he co-sponsored a legislation to eliminate the agency.

In truth, Mulvaney has taken a host of actions to dismantle the consumer watchdog since his appointment.

The CFPB called last week for public input on the usefulness of its consumer reporting system.

It was the sixth and last in a series of Requests for Information, as part of Mulvaney’s call for public comment on its enforcement, supervisory, rule-making, market monitoring and education activities that he issued back in January.

“This request for information on the ‘usefulness of complaint reporting’ is cover for Mick Mulvaney to build up a bunk case for why consumers’ voices should be silenced,” Melissa Stegman, senior policy counsel at the Center for Responsible Lending, told MagnifyMoney. “He is even hampering the agency from pursuing justice for the victims of Wells Fargo’s misconduct.”

The CFPB’s Consumer Complaint Database is a public platform that stores more than 1 million complaints about financial products and services since 2011. The CFPB forwards each complaint to the appropriate company for a response and analyzes the data to makes rules and enforce laws. The bureau shares the data with government agencies and presents reports to Congress.

The database has long had the financial service industry on edge, but consumer advocates say it helps hold the big financial institutions accountable. Concerns have been hovering over the database possibly going private under Mulvaney. The Dodd-Frank law requires that there be a complaint system, but it does not require it to be public, Valenti said.

“Mulvaney already has 1.2 million comments from the public on this matter – in the form of complaints about the practices of financial companies,” Stegman said. “He should read these Americans’ stories. 97% of consumers have received timely replies from companies when the CFPB sends them the complaints.”

What happens next

The CFPB started accepting public comments on the complaint reporting system in the Federal Register on March 6. The public comment window ends on June 4.

Ed Mierzwinski, Consumer Program director with U.S. PIRG, a grass-roots group, told MagnifyMoney he anticipates that companies that would like to ignore complaints and keep their abusive practices in the dark will urge the bureau to gut the public database.

“If Mulvaney agrees with the many companies that want to eliminate the public consumer complaint database,” Mierzwinski said, “then the winners will be bad actors that can more easily hide their abusive practices, making it easier for wrongdoers to prosper and consumers to be harmed.”

Experts urge consumers to share their concerns and opinions in support of the public database by submitting comments on this page.

Valenti encourages consumers to keep filing complaints while the public database lasts. He also suggests that they remind their representatives or senators that the system is valuable as issues like this may slip through the cracks while lawmakers are dealing with other things on the table.

“It’s very easy to vote on things in the abstract,” Valenti said. “But when you can show that an agency has really helped people living in your community, those stories are extremely valuable to lawmakers.”


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Education Department Tells States to Get off Student Loan Servicers’ Backs

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The U.S. Department of Education, led by Secretary of Education Betsy DeVos, on March 12 formally announced its intention to prevent state governments from regulating student loan servicers.

In the statement, published in the Federal Register, the Education Department says states do not have the authority to regulate loan servicers. Specifically, they cannot enforce regulations on the federal agency’s loan servicers that undermine “uniform administration of the program.”  Some states make servicers comply with state licensing laws in order to collect debts from the state’s citizens and impose deadlines on servicers for responding to borrower inquiries.

The same day, the National Governors Association (NGA) issued a statement against the rule, saying, “States have stepped up to fill the void left, we believe, by the absence of federal protections for student loan borrowers, from potential abusive practices by companies servicing student loans.”

Meanwhile, the Student Loan Servicing Alliance (SLSA) released a statement in support of the Education Department’s announcement. Trade organizations like SLSA have lobbied the federal government for protection against state’s efforts to impose rules and regulations on the industry.

For example, in July 2017 the National Council of Higher Education Resources (NCHER), a trade group representing student loan servicers and debt collectors, sent a letter to the Education Department claiming state rules make it more difficult and expensive for loan servicers to collect on loans across the country.

The Education Department currently has nine companies on its roster of loan servicers: Navient, Nelnet, Pennsylvania Higher Education Assistance Agency (PHEAA), MOHELA, HESC/EdFinancial, CornerStone, Granite State, OSLA Servicing and Debt Management and Collections System. The U.S. government hires loan servicers to manage nearly $1.4 trillion in federal student loan debt for roughly 43 million consumers.

Why issue the statement?

The move comes after the Massachusetts Attorney General Maura Healey in August filed a lawsuit against PHEAA, which does business as FedLoan Servicing. The complaint alleges PHEAA violated state and federal laws as its servicing failures prevented students from qualifying for discharge under the federal Public Service Loan Forgiveness and Teacher Education Assistance for College and Higher Education (TEACH) Grant programs.

The complaint also alleges PHEAA overcharged student borrowers and prevented them from staying on track with income-driven repayment plans that may make borrowers’ monthly payments more affordable.

The Massachusetts lawsuit caused a bit of a stir. In January, the U.S. Justice Department filed papers saying the Massachusetts attorney general could not pursue the claims. However, a Massachusetts state court on March 1 ruled Healey could move forward with the lawsuit against FedLoan Servicing.

But in Monday’s statement, the Education Department said federal law preempts Massachusetts’ claims.

States are fighting a battle on two fronts

In October 2017, 25 state attorneys general sent a letter to DeVos asking the Education Department to reject the loan servicers’ efforts to “dismantle state oversight of the student loan industry.”

In the letter, the attorneys general claim the servicers’ request for the federal government to preempt state oversight would “defy the well-established role of states in protecting their residents from fraudulent and abusive practices, plainly exceed the scope of the Department's lawful administrative authority, and would needlessly harm the students and borrowers at the core of the Department's mission.”

Other lawsuits have been filed against the loan servicers, the Education Department and DeVos.

  • Healy in December 2017 sued DeVos for “failing to provide federal loan discharges for students victimized by Corinthian Colleges.” The attorneys general of Illinois and New York joined the complaint. The complaint was filed in parallel with a separate lawsuit by the California attorney general with similar allegations.
  • The Pennsylvania attorney general in October 2017 filed a lawsuit against student loan servicer Navient “over widespread abuses in their student loan origination and servicing businesses.”
  • In January 2017, under the leadership of former director Richard Cordray, the Consumer Finance Protection Bureau and the states of Washington and Illinois sued Navient, for allegedly cheating borrowers out of their right to lower repayments. It’s unclear at this time whether new CFPB leadership will continue to pursue the lawsuit. However, Propublica reports that CFPB Director Mick Mulvaney’s team “recently asked enforcement lawyers to prepare for a potential settlement of its lawsuit alleging that Navient, the gigantic student-loan servicer, abused borrowers, according to a high-level CFPB official.”
  • In September 2017, NPR reports, the Education Department cut ties with the CFPB, leaving borrowers without the federal financial regulator’s oversight over loan servicers.

Those are only a few of many lawsuits and settlements between states, federal agencies and loan servicers in recent years.

What happens now for borrowers

It’s unclear how borrowers in states with consumer protections for student loan borrowers will be affected by the Education Department’s interpretation of the law, but if it legally preempts state regulations, borrowers may be negatively affected.

“If states are prevented or discouraged from overseeing education loan servicers, borrowers may be left with virtually no protections against harmful practices that can push them deeper in debt,” says Suzanne Martindale, senior attorney for Consumers Union, the advocacy arm for Consumer Reports, in a statement issued soon after the Education Department’s notice.

But policy and legal expert say borrowers may not have much to worry about, as the current administration’s interpretation may not be enforceable.

“The Trump Administration’s action is legally dubious and should be ignored by state regulators working to protect millions of Americans who deserve honest and fair treatment from debt collectors,” says Christopher Peterson, senior fellow at the Consumer Federation of America, in a statement responding to the announcement.

In the statement, Peterson cites past instruction from the Department of Education regarding state regulation of servicers to support his claim.

“The long-standing view of both federal and state governments has been that the Higher Education Act does not override state laws that provide additional protection to student loan borrowers, as long as those laws do not actually conflict with federal law,” says Peterson.

It may ultimately be up to the courts to decide how borrowers will be affected.

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How Trump’s Tax Reform Could Impact Your 2017 Taxes

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The U.S. hadn't passed major tax reform since the Reagan era, but that streak ended when the Trump administration's Tax Cuts and Jobs Act of 2017 was signed into law in December.

Thanks to corporate tax cuts included in the bill, American businesses have seen billions of dollars worth of savings already. The result for the average taxpayer is less certain and depends on many factors.

“Some will save some, some will lose some,” said Steven H. Osiason, a CPA in Tampa, Fla., and a member of the Florida Institute of CPAs.

Nevertheless, most changes under the new law went into effect Jan. 1, which means workers should consider at least reviewing their tax strategy for 2018 now — or run the risk of underpaying or overpaying their taxes this year.

While tax reform won’t change your 2017 filing much (save for an exemption for major unreimbursed medical expenses), 2018 is a much different story. There are three major differences will affect the majority of Americans when they file their taxes for 2018:

  • The standard deduction has doubled from $6,350 to $12,000 for single filers and from $12,700 to $24,000 for married couples filing jointly. Because the standard deduction is so much higher, it may make less sense for many taxpayers to itemize their deductions for 2018.
  • Meanwhile, the personal exemption, each $4,050 for you, your spouse and any dependents, has been removed. However, Amy Wang, senior manager for tax policy and advocacy for the American Institute of CPAs, says the new or expanded provisions will counteract the loss of the personal exemption and other cuts.
  • The state and local tax deduction (aka the “SALT” deduction) was not eliminated entirely, meaning you can still deduct your real estate, sales and city and state income taxes if you itemize. However, the bill places a $10,000 limitation on that deduction. Previously, the amount was unlimited.

Check out this quick explainer from MagnifyMoney for a comprehensive look at the tax changes.

Whether you stand to benefit or not from the new bill, Wang says it will simplify taxes for a lot of people.

Even if you haven’t turned in your 2017 taxes, it’s smart to be aware from now of major changes and plan for next year's tax season.

What to expect from your 2017 taxes

More pay in your pocket. A change in tax brackets, plus the doubling of the standard deduction, could boost your take-home pay this year.

Unless you are a single filer who makes less than $9,525, married filing jointly with an income of less than $19,050 or head of household making less than $13,600, you’ll see a drop in the taxable portion of your income.

What that means now is that you should be seeing a slightly larger paycheck, or you might get a larger return next year, says Wang.

Wang says the IRS required all employers to make changes to their employees tax withholdings by February 2018. While you should be seeing changes, you should compare your most recent pay stub with the IRS withholding calculator.

“It’s important because you want to make sure that you are paying enough taxes,” said Wang.

Tax deductions: Some drop off the list. While the increase of the standard deduction will result in more individuals and couples opting out of itemizing, those who are itemizing will face some serious cuts in what’s available to deduct.

“Those hit hardest are people in high income-tax states because you’re limited to a total deduction on itemizing of $10,000,” said Osiason. “That includes the sum of all your real estate taxes, sales tax and state and city income tax.”

In addition to a new cap on the previously unlimited SALT deductions, the amount you can deduct from your mortgage interest is lowered as well. You can now only deduct the interest on a mortgage that is $750,000 or or less, which is down from $1 million. On the bright side, the former $1 million cap continues to apply to homeowners who took out their mortgages on or before Dec. 15, 2017, as well as mortgage refis completed on or before Dec. 15, 2017, as long as the new mortgage amount does not exceed the amount of debt being refinanced.

Tax reform completely cuts several other deductions, including moving expense deductions (with the exception of active military personnel moving due to military order), tax prep deductions and disaster deductions (unless the damage was due to a federally declared disaster).

Also, the requirements for out-of-pocket medical expense deductions changed. Now, you can only deduct out-of-pocket medical expenses that are 7.5% higher than your adjusted gross income. Previously, that threshold was set at 10%.

Again, the loss of these deductions might sting but not too badly, given the fact that the GOP decided to raise the standard deduction.

Tax credits and more: Child care, others enhanced. One of the most significant changes, and one that helps balance out the loss of the personal exemption for many people, is the doubling of the child tax credit. Having never been adjusted for inflation, the credit is now up from $1,000 to $2,000. Additionally, $1,400 of that is refundable, whereas before it was just a deduction.

There is also a new $500 credit if you support a non-child dependent, such as an elderly parent or child over 17.

Funds from 529 accounts that could previously only be used for college tuition can now be used (up to $10,000) for enrollment in K-12 public, private or religious schools.

Wang notes that many of the tax law changes are set to expire in 2025, and are adjusted for inflation.

For example, the estate and gift tax has been doubled, so the basic exclusion amount has been extended from $5 million to $10 million for descendents dying or for gifts made after Dec. 31, 2017 and before Jan. 1, 2026.

Osiason warns that if you’re expecting a refund next year, don’t expect a quick one.

“The IRS will be behind schedule getting all the forms ready,” he said. “It’s such a massive change. The IRS has to write the regulations, figure out how to actually apply the rules and then redo so many forms."

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1 Million People Could Be Missing Out on Their Tax Refund

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An estimated 1 million taxpayers are leaving $1 billion worth of tax refunds on the table — and they only have a few weeks left to claim them.

The unpaid refunds have been collecting dust in the U.S. Treasury since 2014. These taxpayers didn’t file their 2014 taxes, the IRS says, and in order to get the refunds, they have to file by April 17 or miss out on the cash.

This isn’t a few bucks we’re talking about either. The median unclaimed refund is worth $847.

You only have three years to claim unpaid tax refunds, which is why these taxpayers only have until April to collect. Although it’s true that you’ll get slapped with a penalty for filing taxes late, that isn’t the case for people expecting a refund. There is no tax penalty for filing late when you are due a refund, acting IRS Commissioner David Kautter said in a statement Thursday.

The state with the highest rate of unclaimed tax refunds is Texas. The IRS estimates some 108,100 taxpayers in the state have an unclaimed tax refund with a median value of $899. Wyoming and North Dakota are among the states with the fewest number of taxpayers who are missing out on a 2014 refund; however, these taxpayers have the most money to lose — a median refund of $973 and $952, respectively.

Why would anyone leave their refunds unclaimed?

A common misconception is that filing taxes is expensive, even for low earners. In reality, there are several programs that allow you to file taxes for free if your income is under $66,000.

Plenty of taxpayers, especially students or low-wage earners, may not consider filing their taxes because they don’t think they earn enough income to make it worth their while.

Even so, these workers often do pay federal and state taxes throughout the year and may be overpaying. Furthermore, tax refunds aren’t just a way to repay people who had too much taxes deducted from their paychecks — they also include refundable tax credits like the Earned Income Tax Credit (EITC), Child Tax Credit, and the American Opportunity Tax Credit for undergraduate students. This means that filing a return is particularly important for low-income taxpayers, even if they didn’t have any taxes withheld during the year.

Filing prior year returns is also very important for self-employed individuals (including “gig economy” workers for companies like Uber, Lyft, Postmates and Instacart) – filing a tax return and paying Medicaid and Social Security taxes on that income is how the Social Security Administration determines eligibility and payment amounts for retirement benefits.

This doesn’t mean that you should make a habit of not filing your taxes. As we said, if you owe money to the IRS, they’ll charge interest and late filing penalties if you file past the deadline. But it does mean that if you forgot to file your taxes in a previous year, all hope may not be lost.

How to file a prior year tax return

If you or someone you know needs to file a tax return for 2014, 2015 or 2016, here are the steps to do so:

  1. Make sure you have all of your documents. If you’re missing any tax forms (like W-2s or 1099s), the company or person that paid you should be able to provide a copy. Request a “Wage and Income Transcript” on, which will tell you all of the income that was reported to the IRS for the year(s) you request.
  2. Prepare your federal tax return. If you want to fill out your forms by hand, the IRS website has all prior years’ tax forms available for download. Most tax software companies also make prior years’ software available for download, though you’ll usually pay full price for it. There are some free online options, like (free for federal taxes, but there are fees for state filing and additional services). Check out our 2018 roundup of the best tax software.
  3. Print, sign, and mail your return. In most cases, prior years’ tax returns cannot be filed online. Make sure to keep a copy for your records, and send your return with certified mail or some other form of delivery confirmation.
  4. Prior year tax returns are not high on the IRS’ priority list, and refunds cannot be direct deposited. The standard processing time for current year returns filed by mail is six to eight weeks, so expect to wait at least that long for a response — and possibly even longer. If everything looks good, you’ll just get a check in the mail; if the IRS has any questions, or thinks you owe them taxes for another year, then you’ll get a letter in the mail asking for more information.
  5. Don’t forget about your state taxes. Chances are that if you didn’t file your federal taxes, you also didn’t file a state tax return – you might have even more money waiting!

The same deadlines for prior year filing also apply to making amendments to your taxes, so it’s worth taking a moment to review your 2014 tax return and make sure you didn’t miss anything. If you realize that you forgot to include a form, checked the wrong box, missed a deduction or made any other kind of error on your taxes, you have until April 17, 2018 to file a Form 1040X  reporting the changes. If the new information results in an additional refund, you’ll get a check in the mail – with interest!

If you need assistance with filing or amending a prior year tax return, the IRS coordinates two free programs to help people prepare their taxes: Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE). If you’re not eligible for these programs, any paid tax preparer should be able to help you.

For more information about filing prior year tax returns, visit the IRS website.

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It Might Be Time to Adjust Your Tax Withholdings for 2018

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It is advised that wage earners update their W-4 form whenever a major life event occurs, like a recent marriage or the birth of a child. It’s particularly important this year, however, to review your withholdings as the new tax law went into effect Jan. 1.

Under the new tax law, many Americans saw their tax brackets change, with the standard deduction almost doubling for both individuals and married couples, as well as changes to other common tax credits. These changes could affect how many allowances you should claim and how much tax should be withheld from your paycheck.

For many taxpayers, if they leave their W-4 form unchanged, it’s possible their withholdings will be off and, they could owe — or be owed — more taxes than usual. Depending on your personal preference, getting a big tax bill vs. giving Uncle Sam an interest-free loan for the year may not bother you as much. But for others, withholding too much in taxes throughout the year — that is, paying more than you really owe and getting a refund later — could mean losing access to much-needed extra funds during the year.

In an ideal situation, tax experts say it’s best if you owe no taxes at all and get a small refund.

But where do you even begin to figure out whether or not you should make an adjustment?

We’ll offer answers to key questions you may have in this post.

Experts we spoke with for this story have one common bit of advice for taxpayers: Check your paychecks and, if needed, adjust your tax withholdings for 2018 sooner rather than later.

Key terms to know

W-4: On a W-4 form, employees provide personal information, such as marital status, as well as any allowances you’d like to claim or additional income tax you’d like withheld. Employers use this information to determine how much tax to withhold for that employee.

Allowances: The more allowances you claim on your W-4, the less money will be withheld from your income in taxes throughout the year. If you want more money withheld, claim fewer allowances on your W-4.

Withholdings: Employees pay their federal income tax through tax withholdings, which are taken out of their paycheck. Tax may also be withheld from bonuses, commissions and other forms of income.

Standard deduction: The standard deduction is a flat dollar amount that reduces your taxable income and varies according to your filing status. You can only claim the standard deduction if you don’t itemize your taxes. The standard deduction nearly doubles under the new tax law.

  • Single: $12,000
  • Head of household: $18,000
  • Married couples filing jointly: $24,000

Itemized deductions: Some expenses are tax deductible, such as charitable donations or interest paid on student loans. If you add up tax deductible expenses you paid throughout the year and the amount is larger than the standard deduction, you will likely choose to take the itemized deductions instead.

Should you adjust your withholdings for 2018?

First, a quick primer on the importance of the W-4 form: The higher the number of allowances you claim on your W-4, the lower your tax withholding is throughout the year. Therefore, you can expect a bigger paycheck.

As a result of the tax changes, the majority of Americans will see a slight bump in their take-home pay, Mark Luscombe, principal analyst at Wolters Kluwer Tax & Accounting, told MagnifyMoney.

“If they don’t adjust their withholding, they are likely to see a bigger paycheck,” Luscombe said. “If they file a revised W-4, then that could mean even a bigger paycheck. But it really depends on what they put on the new W-4.”

Luscombe said it’s important that employees — especially those in more complex tax situations — update their W-4 form, making sure their withholding is as accurate as possible.

TurboTax CPA Lisa Greene Lewis said those who usually claimed the standard deduction may see fewer changes under the new tax law than itemizers unless major personal or financial events are happening this year. The biggest change they will see is a bigger standard deduction. The population of taxpayers claiming the standard deduction is expected to grow under the new tax law as a result of the almost doubling of the standard deduction and the elimination or reduction of some itemized deductions.

The story may be different if you’re planning to itemize. That’s because the new IRS withholding tables, which payroll departments use to determine how much money to take out or your paycheck, assumes each worker will claim the cut-and-dried standard deduction. But the tables don’t take into account all the individual factors that might be involved, such as the number of children the taxpayer has, experts say.

Here are some of the groups who might want to make an adjustment:

People who prefer a smaller refund

Under the new tax law, it’s expected many Americans will see a bigger paycheck than usual. That means, if they make no changes to the current withholdings and have the same amount of taxes withheld as 2017, they may get a bigger refund next year.

It’s worth pointing out that some people may actually prefer things this way. They may see their annual tax refund as a form of forced savings or a nice windfall they can use to catch up on debt or cover their annual family vacation. Nearly 112 million tax filers received an average tax refund of $2,895 last year, according to the IRS.

“Some people seem to not mind giving an interest-free loans to the government and like getting a big refund at the end,” Luscombe said. “I guess maybe they think the government is better at saving their money than they are.”

But if you prefer a smaller tax refund later — especially if you plan on itemizing and claiming deductions for 2018 — you may want to revise your W-4, increasing the number of allowances you claim to lower the withholding even further, Luscombe added.

People who itemize their deductions

Because the standard deduction was nearly doubled under the new tax law, many people who used to claim itemized deductions may now have to claim the standard deduction for 2018. When you know you’re going to claim deductions on your taxes, you might choose to have less taxes withheld throughout the year, experts say.

If you were in this camp of people before, you might very well decide that it makes more sense to claim the increased standard deduction in lieu of itemizing in 2018 if the standard deduction is now more than your itemized deductions. And in that case, certain deductions are gone or reduced. So you need to go back to your W-4 and make an adjustment so more taxes are withheld than before, Lewis said

Even before the biggest tax reform legislation in a generation passed, itemizers always had a more complicated time around tax season.

In a recent MagnifyMoney study, we analyzed IRS tax data for 100 of the largest U.S. metros over a five-year period (2012-2016). We found that itemizers were more likely to owe taxes than those who claimed the standard deduction.

The new tax law gives itemizers just one more reason to carefully estimate their 2018 tax obligation to avoid owing money to the government.

Families with children

Married couples with children should also move quickly to figure out their 2018 tax liability due to the elimination of personal exemptions and the increase in child tax credit.

In the past, taxpayers could reduce their adjusted gross income by claiming personal exemptions — generally for the taxpayer, their spouse and their dependents. Married people who filed jointly could claim up to five personal exemptions if they have three children, also allowing five withholding allowances or more if they itemize, Lewis said.

Things will be a little more complicated this year. While the personal exemptions are gone, the child tax credit — which allows parents to offset the cost of raising children — doubles to $2,000 per qualifying child, up from $1,000.

“If [couples who itemize] didn’t change their withholding for 2018, they could wind up owing money to the government, because they are going to see more money in their paycheck, but it depends on their deductions,” Lewis said. “If they normally claimed the standard deduction, they may not because the IRS says their new withholding tables incorporate [that situation].”

How make sure your withholdings are correct

We get it, this stuff can be incredibly difficult to understand.

One way to get your bearings and a general sense of whether you should adjust your withholdings is to use the new IRS withholding worksheet and calculator.

The IRS finally updated the much-anticipated new W-4 worksheet and its online withholding calculator for 2018 to reflect changes in the new tax law.

April Walker, lead manager on the tax practice and ethics team of the American Institute of CPAs, suggests taxpayers go through the worksheet on the new W-4 and fill it out based on your personal and financial situation. You will be able to figure out the number of allowances you can take for 2018, which may or may not change from 2017.

Another strategy is to take a look at your most recent paycheck to see how much was taken out in federal taxes. Compare that number with the number you get from the IRS tax withholding calculator, which can project your 2018 tax obligation. Walker said that’s a pretty general way of making sure that your withholding is in line with what your actual liability will be.

If your withholding seems to be too low compared with your estimated 2018 liability, you can adjust the number of allowances down, Walker said. There is also an option to withhold more if you are already claiming zero allowances. If it looks like you are withholding too much, you can increase the number of allowances so that your withholding will decrease.

Because of the delay in starting the new withholding rules (companies were required to comply with the new withholding rules by Feb. 28), many people were basically withheld under the rules from the old tax law for January and February. So in some cases, employees may have more withholding than they otherwise should have had under the new rules, Luscombe said.

This doesn’t mean you paid more taxes than you should have. The withholdings for the first two months will be reflected in your tax return in 2019. But they might be higher than they should have been.

If you surely don’t want to lend Uncle Sam even one more penny than you should, Luscombe said you can compare your withholdings in March with your withholdings in January. Depending on how much the difference is, you could claim more allowances in the following months to offset the higher withholdings in January and February.

If you still have questions about your withholdings, you may want to seek out a CPA for help.

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When Is It OK to Use Another Job Offer to Get a Raise?

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We’ve all heard stories about leveraging a new job opportunity for a higher paycheck, or jumping at new job opportunities in the hope that they’ll offer a better salary.

When this strategy does work in your favor, you may see your salary rise at a much faster pace than your colleagues, who might choose to wait in asking for a raise during the next annual review cycle. Just consider these stats: Workers who change jobs see a 5.2% pay increase on average, according to a 2016 study conducted by Glassdoor Economic Research. That is more than double the average 2% pay increase the typical employee earns each year, according to the U.S. Department of Labor.

You don’t have to necessarily take the new job to get the higher paycheck. You could try to use it as leverage to get a raise where you currently work.

Amy Gallo, a contributing editor at the Harvard Business Review and author of the “HBR Guide to Dealing with Conflict,” tells MagnifyMoney she has seen firsthand how this can work for some employees.

In researching her book, Gallo spoke with an employee who had a hard time convincing HR to give her raise. But when she received an outside offer a year later, “HR was much more cooperative since there was a counteroffer in hand,” she said.

So, what is it about the counteroffer that controls the collective purse strings? In general, it reminds the company of how valuable you are, because sometimes they end up forgetting, especially if you’ve been there for a while. The counteroffer also gives the employee more leverage and information to compare with their current salary.

In her studies around negotiation for the Harvard Kennedy School, Hannah Riley Bowles, a senior lecturer, found that when people used an outside offer to raise their salary, it legitimizes their request for a higher salary. Still, despite its potential huge payoffs, the counteroffer, as you can imagine, can also backfire.

Paul McDonald, senior executive director for global staffing firm Robert Half, advises against using the counteroffer to boost your salary.

“It can burn bridges with the other firm and may cause your boss to question your loyalty and interest,” McDonald said.

In fact, in this 2015 survey, Robert Half, also a national recruiting firm, found that nearly eight in 10, or 78%, of CFOs said they wouldn’t be pushed to make a counteroffer to keep someone from leaving — and with good reason. There’s always a chance that the employee will leave shortly after anyway if they aren’t happy in their jobs to begin with. The Harvard Business Review reported that people who received a pay increase from a counteroffer started their job search again within six months.

So what’s the key here? When is it OK to use an outside offer to get a raise, and when is it not OK?

OK: If you’re genuinely interested in another job.

Generally speaking, it’s OK to use the counteroffer to get a pay increase or promotion if there is genuine interest in the other job. Because, if you’re genuine about your motives – for example, being paid fairly or getting additional responsibilities that you might crave – then you’re merely reminding the company that you’re a valuable asset it needs to support professionally, personally and financially in terms of growth.

Not OK: You’d like to stay with your current employer and are just using the new offer as leverage for more pay.

Be cautious if you’re using the counteroffer only to get a raise or promotion with no intentions of leaving. This carries much higher risk, Gallo warns.

“It may damage the social capital you have in that organization,” she said.

Jared Curhan, a faculty director for the Massachusetts Institute of Technology's Negotiation for Executives program since 2011, agrees that this can be a “very dangerous strategy” but adds he wouldn’t rule it out altogether.

“I would say that if you really value your relationship, then alluding to your alternatives outside has to be done delicately because that could really damage your relationship,” Curhan explained.

The bottom line: Of all the tactics you could use to negotiate for more pay, using an employment offer from another job can potentially get you the greatest outcome — but also carries the most risk.

If you decide you’re willing to take the risk and go to your employer with another job offer, here are some tactics you should keep in mind:

Stick to the facts

First, always wait for the final offer letter before you begin negotiating with your current employer, says McDonald, who adds this a common mistake.

Next, research your worth and check out resources like Glassdoor,, PayScale and the Robert Half Salary Guides to get an idea of your earning potential.

Talk to people in your industry about trends they’re seeing and consider other negotiable terms that affect your compensation package, like bonus and equity.

By getting a realistic idea of how your company measures up with its competitors, you are more prepared and can even potentially negotiate for education programs, like through General Assembly and Dev Bootcamp, which could boost your income in the long run.

Don’t go into the negotiation with a “me versus you” mentality

“The conventional view in negotiations is that it’s a battle between two sides like a seesaw and when one goes up, the other side goes down,” said Curhan. “So you can’t go up without the other side going down.”

However, when you ask business executives to list out their four most important negotiations ever, says Curhan, they tend not to be negotiations that are win-lose. Instead, they were typically negotiations where both parties walked away feeling like they did a little better. They had expanded the pie, so to speak, before splitting it between the two parties.

For example, if an employee is using another job offer to get a raise, instead of using a “you versus me” mentality which could sound more like a threat (“Match my offer or I’m leaving”), Curhan suggests thinking about it like metaphorically moving to the same side of the table. By looking at the issue from similar viewpoints, you can now jointly work on the problem together. The employee is no longer pointing the finger and saying their boss is the problem. Instead, they might say something like this:

“I want to thank you for introducing me to this company and for the offer that you made. I have also been doing some research and I would love to be able to work here, but I also have to pay attention to the offers I’m receiving elsewhere. And through that, I want to be able to feel like I’m being paid a rate that’s commensurate with the market. And you perhaps have done some research on the market, too. Maybe we can pool our research on the market together, and can jointly come up with a fair rate of pay.”

Consider the other party’s interest

Often when we enter negotiations, we think about our points and arguments, such as the 10 reasons we deserve a raise. While that’s important, says Gallo, if you only focus on that, you’re setting the conversation up to be a me vs. you battle, which is what Curhan advised against earlier. Instead, you need to also be thinking about what your boss is up against. That’s how the conversation will become more of a collaboration where you’re aligned in terms of the strategy of getting you what you need.

So think about what that person needs to say yes to you, suggests Gallo. Think about their concerns.

“For instance, when it comes to pay increase, managers are often worried about equity,” said Gallo. In other words, if you get a pay increase, what does that mean for how you are paid related to others on your team? “You have to think about that from your boss’s perspective,” she added, so think in terms of how can you help them say yes.

Knowing when to walk away

If you’re not paid fairly and it’s just about the money, by all means, bring that data to your boss, says Gallo. But before you go, know the point at which you’re willing to stay or go. So, say you want a $20,000 pay increase — are you willing to walk if your boss offered you $10,000 instead?

Back in January, Alison Fragale, negotiation expert and professor of organizational behavior at the University of North Carolina, told MagnifyMoney that before going into the negotiation, you should always be able to answer three questions:

  1. What are you trying to achieve?
  2. What's your walkaway point?
  3. What's the alternative?

At the end of the day, using an outside company’s job offer to get a salary increase is a risky tactic that if employed tastefully, could work in your favor. However, make sure your intentions are noble. For instance, if it’s just about the money and you’re genuinely interested in the other company, and could potentially see yourself working for them, then have that conversation with your current boss.

However, if you’re going to your boss with the intent to strong-arm them to meet your demands with no intentions of going through with your threats, then using the counteroffer could get professionally dangerous for you quickly.

And maybe most importantly, think about negotiations as an alignment or a collaboration instead of a “me versus you” mentality.

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Amazon Wants to Own Your Checking Account Now, Too

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Buying groceries, listening to your favorite audiobook, researching or watching TV ... whatever activity you were engaged in today, there’s a good chance Amazon played a hand in some part of it. And now the online retail giant wants to be there for your banking needs, too.  

In a recent report by The Wall Street Journal, sources revealed Amazon is in talks with two of the country’s largest banking giants, JPMorgan Chase & Co. and Capital One Financial Corp., to develop a potential checking account product.  

The company’s idea, according to the anonymous sources, is to create a basic checking account as well as provide an option for individuals without traditional bank accounts. This could result in two offerings — a simple checking account and a prepaid debit card — but the company hasn’t officially announced anything yet, so we won’t know for sure until then.  

It’s unknown whether the bank-like service would offer paper checks, direct bill paying or access to a nationwide ATM network.  

Amazon isn’t the only major retailer looking to get into the finance game. Walmart announced in 2014 its low-cost checking account service GoBank, a brand of Green Dot Bank. 

The FDIC-insured banking option through Walmart boasts no overdraft fees, no bounced check fees and no continuing minimum balance requirements. Additionally, there’s an $8.95 monthly fee that is waived altogether if you have a payroll or government direct deposit each month of at least $500.  

 More Amazon moves

It’s hard to imagine a time when Amazon was just a bookseller. Since it first went public in 1997, the company is now ranked the no. 1 online store in the nation, a constant source of innovative new technology with sales of $178 billion in 2017 alone.  

In August 2017, Amazon finalized its acquisition of Whole Foods, solidifying itself in its customers’ lives as a brick-and-mortar store. The company also began offering 5% cash back to Whole Foods shoppers who use the Amazon Prime Rewards Visa® Signature Card.

In January 2018, the company took a step further with the release of its first cashless grocery store in Seattle. Artificial Intelligence and cameras throughout the store track customers and what they pick out, allowing for a seamless “just walk out” approach to grocery shopping.  

Amazon has surpassed Microsoft in market capitalization, with its value currently standing at over $747 billion vs Microsoft's $722 billion, and with the support of its customers, doesn’t look like it’s slowing down anytime soon. 

The retail (and now services) giant, could venture into several industries with as much enthusiasm from customers as there is for the possible new checking-account option.  

If Amazon were to expand into other services like health care, insurance, lending, investing and even its own form of cryptocurrency, there are plenty of people who are already on board.  

In a recent survey by LendEDU, 44.5% of respondents said they would trust Amazon as their checking account provider; 52% are open to an Amazon-based virtual currency; 38% trust the company as much as a traditional bank; 30.5% would utilize an Amazon investment service; and 36% would trust them with their retirement account. The trend is similar for lending services like mortgage, auto and personal as well as insurance options for health, auto and life.  

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Kat Khoury
Kat Khoury |

Kat Khoury is a writer at MagnifyMoney. You can email Kat at


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I’ve Earned 19 Million Miles on a Single Airline — Here’s How I Use Them

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

(Photo: Courtesy of United Airlines)

Airline mile programs may not be as lucrative as they once were, but one man proves loyalty can still pay handsomely.

Tom Stuker, who owns an automotive sales and dealership management consulting company, recently surpassed 19 million miles on United Airlines, the most of any flyer in the 37-year history of the MileagePlus program.

To say that Tom Stuker has traveled a lot would be a gross understatement. Stuker began flying on United in 1970, when he traveled regularly from Chicago to Hawaii and cities across Europe for work. He recalls becoming one of the first to sign up for the carrier’s MileagePlus loyalty program back in 1982.  Within months, he earned enough miles to join the Million Miler club, which is United’s program that acknowledges travelers who have flown at least a million miles.

“I get taken care of more than I ever expected by United’s employees,” Stuker told MagnifyMoney. “I have 30-plus years of friendship with many people at the airline.”

Since joining the loyalty program in the 1980s, Stuker has racked up more than 510,000 miles each year. Maintaining his mileage is a lot easier than it might seem. Stuker’s consulting job has him traveling the world, especially trips from Newark to Sydney, which clock in at nearly 10,000 miles each way. These days, he travels, on average, about 15 days a month. He also earns a higher number of bonus miles based on his fares, plus he gets a 50% bonus for booking flights in United’s business- and first-class cabins.

We managed to track down Stuker to talk to him not only about how he racks up hundreds of thousands of miles each year, but also all the ways he uses his miles.

The many perks of million-mile status

Stuker was invited on United's behalf to throw out the opening pitch at the Cubs game at Wrigley Field on July 16, 2011. (Photo: Courtesy of United Airlines)

Statuses on statuses. One million-mile travelers get lifetime MileagePlus Gold status and can share it with a spouse or or significant other. Because of his miles, Stuker has lifetime Global Services status. United doesn’t release details about Global Services or how members achieve it. It’s a special designation given to flyers who, among other things, spend a lot of money on United’s premium cabin flights, control a large amount of corporate spending or have flown more than 4 million miles in their lifetime.

Party with United’s CEO. When Stuker hit 10 million miles on United on July 9, 2011, the airline threw a party for him at the United Red Carpet Club at Chicago O’Hare International Airport. Those in attendance included his friends, family, United’s then-CEO and top leadership and United personnel.

Your personal on-call travel concierge. United Airlines does not reveal the perks offered to Global Services members, and Stuker, like many members of this elite club, didn’t want to reveal them to the media. However, we were able to get firsthand accounts from several GS members who agreed to speak off the record. Their accounts were confirmed by Henry Harteveldt, a former Global Services member and travel analyst for San Francisco-based consultancy Atmosphere Research Group.

“Members have their own dedicated phone number for assistance and reaccommodation,” Harteveldt said. “That number is served by a group of agents who are known as the best of the best for United. They are trained to know how to look beyond what they see on their computer screen to help Global Services members any way they can.”

Get an entire plane named after you. United named a Boeing 747 in Stuker’s honor for his 10-million-mile celebration.

Throw out the first pitch at a major league baseball game.  United arranged for Stuker to throw out the opening pitch at the Cubs game at Wrigley Field on July 16, 2011.

First dibs on flights after delays or cancellations.  The primary benefit of Global Services membership is that members get bumped to the top of the fly list regardless of the fare they paid when flight delays or cancellations happen, Harteveldt says.

Creature comforts. “You do also get priority upgrades and the benefit of boarding flights ahead of all paying customers,”Harteveldt said. “Global Services customers also get their first choice of main courses during meal service.”

First-class dining options is one perk Stuker didn’t mind talking about. The food served on his flights has forced Stuker to pick his battles in the war on calories. His favorite? The lobster mac and cheese.

A new travel family. Stuker said he was especially touched when United presented him with a photo book journal that listed all flights he took to get to 10 million miles. It also included notes from friends, family and United staff he knew from over the years.

What does one do with 19 million airline miles?

In 2017, Stuker donated miles to help raise $58,000 for his friend’s charity. “That was one of the happiest days of my year. I’m happy that I can do this with my miles,” he told MagnifyMoney. (Photo: Courtesy of United Airlines)

Fair question. We asked Stuker to tell us how he even begins to spend all his miles. Here are a few of his favorite ways to cash them in:

Charitable donations. Points and miles aren’t just good for booking vacations and scoring free gift cards. These days, charitable organizations routinely accept miles and points as well as cash donations.

Stuker says he feels strongly about donating his miles to charitable causes when he can. So long as his United card is open, his miles never expire, but even he acknowledges that realistically, he’d never be able to use them all.

“I have a friend in Australia who lost his son to brain cancer three years ago,” Stuker said. “So I donate between 1 million to 2 million miles, plus taxes, a year to auction off flights for four couples from Australia to the United States to benefit his charity.” After the couples are chosen, he uses his miles to book their trips.

In 2017, Stuker’s donation helped raise $58,000 for his friend’s charity, Bailey's Day. “That was one of the happiest days of my year. I’m happy that I can do this with my miles,” he said.

The family vacation fund. For the lion’s share of his travel, he uses United’s MileagePlus website, where can book flights, hotels, cruises, rental cars, gift cards, dining, subscriptions and experiences. He supplements his miles by using a rewards credit card for hotels and car rentals, and points accumulated on the websites of their respective loyalty programs.

“Just this morning, I booked a weekend with my wife at one of the finest resorts in Mexico,” he said. “I also booked cruises on Crystal and Norwegian for my kids.”

Christmas is a lot of fun for Stuker, too, when he uses points to book family getaways. “The week between Christmas and New Year’s, my wife and I go to a resort. Last year, we went to a villa in Thailand,” he said.

Spoiling friends and family. Stuker isn’t stingy with his miles, and he’s willing to give them away with one condition: “I just ask them to pay the taxes.”

Thank-you gifts for his United family. And Stuker uses miles to support the United Airlines employees who he says do a great job supporting him and all passengers. He and his fellow Global Services travelers band together to buy gift cards and hand them out during the holidays to airline workers including the United Club lounges and crew members.

“These people are like family to me. I know about them and their loved ones. I'm loyal to the employer of all my global friends,” Stuker told MagnifyMoney. “So many employees know my family inside and out, and I want to show ways to thank them all.”

On his way to his next milestone

Stuker is on target to hit 20 million miles sometime in the summer of 2019. But despite all his travels, his favorite place to visit is home. “I’ll keep people posted via my FlyerTalk thread on the progress achieving that 20 million milestone,” he said. “But right now, my family and my health are number one.”

Of course, you don't need to marry yourself to one airline to score travel rewards, especially with so many new ways to rack up travel points and miles with credit cards. Check out this Beginner's Guide to Points and Miles from our sister site,

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Benét J. Wilson
Benét J. Wilson |

Benét J. Wilson is a writer at MagnifyMoney. You can email Benét J. at