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Design: where dollars are scarce and need is great

Mon, 2014-07-21 04:00

In a Stanford classroom crowded with Post-it notes and duct tape, Dr. Shankar Rai, a plastic surgeon from Nepal, is wearing a hand splint made out of Popsicle sticks and pipe cleaners. He’s giving feedback on a prototype made by graduate students in a class called "Design for Extreme Affordability". Currently, the only splints available in Nepal cost upwards of $50. The students are aiming to do better.

Here in the U.S., we’ve got asthma inhalers at every doctor’s office, baby incubators at every hospital, and irrigation systems at most every farm that needs one. But in some places in the developing world, many of these technologies are just too expensive to use. American design schools are trying to change that by teaming up with NGOs around the world to get truly affordable products to market.

Rai works with the non-profit Resurge International to improve care for burn victims in Nepal. One of his main problems is the cost of supplies for the operating room: If a patient shows up at a government hospital, the surgery may be free, but “dressing materials, sutures, all those things will be bought by the family.”

When families can’t afford those supplies, Rai says burns turn into lifelong disabilities. So Resurge submitted a “wish list” to Stanford’s design school. Included on that list is a splint that could be made for less than $10.

“Small non-profits don’t have the luxury of having their own designers and their own R+D  teams,” says Jim Patell, who teaches the design class.

According to Patell, both NGOs and students are trying out ideas others might see as too risky. When publicly-traded companies come up with new products, they have to decide who their next customers will be: affluent consumers in the West, or people living on a few dollars a day in places like rural Nepal.

They can think about it very deeply,” says Patell, “and find out that, yeah, developing the next product for the Western world is the responsible thing to do for their investors.”

Universities don’t have to answer to investors, and initiatives like Patell’s class have sprouted at schools all over the country.

Amy Smith, who founded the D-Lab at MIT, says student designers sometimes benefit from their lack of expertise:They may come in with a very new way of doing things, because they’re not concerned that it can’t be done that way, and therefore they find a way to do it.”

Failure is part of the process too. And even though his students “get it right” less than half the time, Patell says, Design for Extreme Affordability counts 32 student projects that have found new life as NGOs or even for-profit companies.

PODCAST: Happy birthday Dodd-Frank

Mon, 2014-07-21 03:00

The Dodd-Frank Act turns four, just in time for strong critiques of its implementation. Plus, more on a new study showing that millennials tend to fear investment, instead opting to save money in cash. Also, in an incongruous pairing, Goldman Sachs will fund an educational program on Rikers Island. It's part of a social impact bond, where investors put money into social programs with the promise of profit if the program meets its goals.

SIB spells a way for financiers to do social good

Mon, 2014-07-21 02:00

Governments and non-profits struggle with shrinking tax revenues and donations, and the lack of funding puts social programs in jeopardy. A new movement tries to fill that gap with money from banks.

The twist? The people providing this money aren't donors; they're investors, and they stand to make a profit on social services. That’s why the first attempt at what’s called a social impact bond in America is being closely watched by scholars, bankers, and politicians alike.

The bond involves the incongruous pairing of one of the world’s best-known banks with one of New York's most notorious prisons. Goldman Sachs is lending $9.6 million to fund an educational program on Rikers Island for 16-18 year old offenders.

The program aims to change the young inmates' way of thinking, with the goal of enabling them to make the choices that will ensure they don’t get locked up again. But they face grim statistics -- About half are likely to be back in prison within a year after getting out.

This high recidivism rate carries high costs for the young offenders, their families, and their communities. It’s also alarmingly expensive for New York City to keep them in prison. That’s where the social impact bond comes in, becoming profitable only if the city saves substantial money through a reduction in re-incarceration attributable to the education program.

If the program leads to a 10 percent reduction in recidivism, Goldman recoups its investment. If the reduction in recidivism is greater than 10 percent, Goldman profits.

“Goldman doesn’t earn any return unless the city reaps significant savings on the decrease in recidivism,” explains Andrea Phillips, a vice president at the bank’s Urban Investment Group. (Not all of Goldman’s money is technically at risk. Bloomberg Philanthropies is kicking in $7.2 million to guarantee part of the loan. That has drawn critics, who say it prevents this social impact bond from being a pure test of using private capital for social good.)

The basic case for social impact bonds is they risk bank money instead of taxpayer dollars. A key worry is that it’s a bad and untested idea to mingle services for the poor with bank profits. 

“I understand the discomfort with that,” says Susan Gottesfeld, associate executive director at the Osborne Association, a non-profit operating the program at Rikers. “But I feel that it’s not only government’s job, not only non-profit’s job to make sure that our society’s working. And if banks who make lots of money are interested in using that money to make something possible that otherwise would not be, we’re very open to that.”

Gottesfeld says she often hears from other non-profits asking for advice on how they can strike bank deals of their own.

This program will ultimately be judged by what it can do for young people like Louis Rivera. He now works near Coney Island, far better waters than those around Rikers Island, where he did time for attempted burglary. He says the program helped him turn himself around, and what he learned showed him how to give his two year old son Landon a better future.

“I wanna teach him that life doesn’t have to be that for him,” Rivera says. “Regardless of where you come from, because life’s not about the things you go through it’s about the choices you make when you go through them.”

Independent analysts are evaluating the program’s impact, with a report expected next year. If it’s a success for the city and Goldman, expect to see many more banks, governments, and charities buying in to social impact bonds.

Young adults choose to save cash instead of investing

Mon, 2014-07-21 02:00

Amanda Moffitt is 30, so she was just getting settled when the economy tanked.  

“It was 2008, so there was a lot of concern about the stock market and what could possibly happen to your money when you invest it,” Moffitt says. 

And, it turns out, that attitude has stuck among young adults.  

“They are the most risk-averse group,” says Greg McBride, vice president and chief financial analyst at Bankrate. Its new survey shows that once those under 30 actually have some money to save, they’re very cautious.  

“They prefer cash by a 3-to-1 margin over the stock market, for money they’re not going to need for at least 10 years,” he says. 

That could be too conservative of a strategy, since savings accounts don’t keep up with inflation. 

“Kind of gets us back to that Depression mindset of hiding cash under the mattress,” says David Weliver, editor of moneyunder30.com. Part of the whole problem is choice overload. 

“The thousands of investment choices, and all the conflicting advice out there. A lot of it is they sit tight and do nothing,” Weliver says. 

As for Amanda Moffitt, she’s wised up. She’s working to become a financial planner.

So where should millennials be investing?

We've heard the mattress is not the way to go, and saving accounts aren't much better. Young people may also simply be intimidated by the vast array of choices, or worried they don't have enough money on hand to make investing worth it. Nonsense.

We've dug back into the Marketplace archives to find some of the best advice we can offer for young (or otherwise new) investors. To start, here's a quick personal finance cheat sheet.

    • More on mutual funds: Many mutual funds offer "quick and easy" plans aimed at first-time investors, but easy doesn't always equal better. Marketplace Money explains.
    • What if I have a bunch of retirement funds? If you have a few different retirement plans, we have some tips to juggle them all.

Finally, if you're sick of reading, your mate Paddy Hirsch has a number of "Whiteboard" videos explaining index funds, ETFs, compounding and more.

Gamers, want to win $10 million dollars?

Mon, 2014-07-21 02:00

People like to watch other people play video games. They like it so much that tournaments for competitive gaming — or e-sports as it's known — are packing stadiums and offering multi-million dollar prizes.

They're also getting the attention of the likes of ESPN, which televised the "International Dota 2" Championships in Seattle over the weekend, with winners soon to be announced.

Tickets to "Dota 2" sold out in an hour at the 17,000 seat Key Arena, and millions of people were expected to watch the games on ESPN2, ESPN3 and online.

Erik Johnson is with Valve, the company behind "Dota 2."

"This is a huge amount of fun for us, we're all fans and we get to kind of show off a little bit, put on a big show for everybody," says Johnson.

"Everybody" includes hordes of young men ages 18 to 34, a group advertisers love.

Nicholas Taylor, who teaches digital media at North Carolina State says cable tried airing gaming championships in 2008, but the timing was wrong. That's not the case anymore.

"As it may have been, a shot in the dark, let's put it that way, for ESPN six years ago, is now probably a pretty sure bet in 2014 and going forward," says Taylor.

ESPN says it hasn't committed to any other e-sports coverage. But, Taylor says, the sport is so big, it's going to happen.

McDonald's, KFC hit by food scandal in China

Mon, 2014-07-21 02:00

McDonald’s and KFC's parent company Yum! Brands apologized to Chinese consumers over concerns that a supplier of theirs was selling expired chicken and beef to fast food chains.

Chinese regulators have shut down the supplier, Shanghai Husi Food Company, which is owned by OSI Group, an American food supplier based in Aurora, Illinois that has an annual revenue in the billions of dollars. The Shanghai supplier also provided food to Pizza Hut, Papa Johns, and Starbucks. 

Sunday evening, a local television news program in Shanghai aired a report that showed workers at the supplier’s plant repackaging chicken and beef products that had gone past their expiration dates. The report stated workers also hid crates of expired beef from inspectors sent by McDonald’s.

Foreign fast-food chains typically earn more trust among Chinese consumers who believe the chains will have better hygiene than local eateries, so the question Chinese consumers are asking now is: what about the rest of these brands’ suppliers?

"I think we will come to a point where the large brands – KFC, McDonald’s, Starbucks, and others – will have to start just like Nike and Apple did, showing who their suppliers are and releasing reports about the quality of each one," says Richard Brubaker, founder of Collective Responsibility, which helps multinational companies in China with corporate social responsibility.

Brubaker says all of the companies involved in this particular scandal will need to begin doing unannounced inspections at their suppliers in China, and they’ll have to be more transparent about their supply chains to regain the trust of not only Chinese consumers, but the trust of investors, too.  

 

Jobs, like water, always seem to run downhill

Mon, 2014-07-21 01:00

Did you hear the one about the American furniture factory that was able keep jobs in America despite intense competition from low-wage China?

I was just talking to newspaper reporter Beth Macy about her new book “Factory Man,” the story of a fierce American furniture tycoon named John Bassett III who went on a mission to China to see where all his furniture jobs were going.

His detective work paid off: In China, he learned a piece of information that turned out to be a powerful tool that kept his factory in Virginia open, his people employed, and an Appalachian town thriving. Macy reveals Bassett’s weapon of choice in this battle against offshoring and I’d hate to spoil it here.

That said, moving jobs to spots where labor is cheaper and unions are weaker is a process that has endured in the US labor market throughout the last quarter century. Talking to Macy, I was struck by the sense that outsourcing never seems to come to rest. Jobs move, then move away again.

Staying with the furniture business for a moment, let’s consider New England (something I like to do as a New Englander). As Macy points out, New England used to be a major hub for furniture manufacturing. A lot those jobs went to the Midwest, but only for a while.

John Bassett’s grandfather and grandmother came along early last century, looked carefully at those Michigan furniture factories and figured out a way to move the work south, to North Carolina and Virginia. They brought manufacturing efficiencies that helped ensure the success of the new factories. What also helped was the tendency of people in Appalachia to work cheaper. 

Then, when China got most-favored nation trade status and joined the World Trade Organization in 2001, the jobs moved to China, Mr. Bassett’s heroic efforts became an exception to a rule.  

Yet the jobs are not staying in China, Macy points out. Many companies have moved on to the current center of the furniture universe: Indonesia, where wood is available and labor is cheaper still.

Late in the book, Macy writes about flying to Indonesia and talking with a local furniture sample engineer. Macy asks him if he ever spared a thought for the Appalachian furniture makers his Indonesian operation replaced (no, he doesn’t). But then the engineer volunteers something he does worry about: the future of his own factory. 

“I worry about someone somewhere else, somewhere cheaper will start to make furniture, and that will be that for us,” Macy quotes him as saying.

Where could furniture companies find labor cheaper than in Indonesia? Maybe sub-Saharan Africa some day, then offshore further still to the island of Madagascar, for instance. Regardless, at some point the whole world will be globalized and companies will not find a cheaper place to find workers to build furniture, or where a worker could feel secure.

Yet I wonder if that is not the final fate of offshoring at all. Once the world economy runs out of cheaper and cheaper labor, you know who will get the work? Not humans, but machines. There will be robots to do the work of building furniture. Technology, not geography, is probably what lies at the very end of the offshoring food chain. 

How businesses in Murrieta are coping with immigration protests

Fri, 2014-07-18 14:17

Earlier this year, the town of Murrieta California started positioning itself as a culturally diverse and economically strong oasis in the California desert. About an hour north of San Diego, the bedroom community is trying to lure companies in the tech and medical fields. But then, a wave of undocumented immigrants began crossing the border in Texas, some 800 miles away.

Soon, US Immigration and Custom Enforcement officers brought hundreds of those undocumented immigrants to the federal detention in Murrieta. And with that, anti-illegal immigration protests broke out, giving the city a huge public relations black eye.

To see how the business community is responding to all the bad press, we spoke with Kim Davidson, Murrieta’s Business Development Manager. 

Click play above to hear how immigration and immigration protests affect Murrieta.

What we know about Buk missiles

Fri, 2014-07-18 13:45

It's likely that the missile that downed the Malaysia Airlines plane yesterday was a relic of the Cold War era known as a "Buk."

Here’s what we know about the Soviet-era missile system:

What is a Buk missile?

The Buk is a surface-to-air missile that can shoot down airplanes flying up to 13 miles off the ground. 

It looks like the lower half of a tank or truck, with a few anti-aircraft missiles on the top and was developed by the Soviet Union in the early 1970s.

What does "Buk" mean, anyway?

Buk means “Beech Tree” in Russian. During the Cold War, NATO’s code name for the Buk was "the Grizzly.”

How many of them exist?

There are several hundred Buk missile systems out in the world today, in the hands of about a dozen countries, says arms control expert Igor Sutyagin with the Royal United Services Institute in London. Russia, Ukraine and other former Soviet republics are known to have them. Syria, which has bought weapons from Russia for years, has also been known to own the systems.

Who has them now?

There is no official registry of where each Buk system is, but the United Nations and the Stockholm International Peace Research Institute keep lists that attempt to keep track of these and other weapons.  Individual countries also try to track the weapons through their own intelligence agencies.

How could one have ended up in Ukraine?

There are a few theories on the origins of the Buk missile system that allegedly shot down the Malaysian passenger jet. The Ukrainian military inherited some Buks after the Soviet Union collapsed. It's possible that pro-Russian rebels captured one from the Ukrainian army. Or, it could have come from a Russian military commander, either through official channels or on the black market. 

Why do weapons from that era end up in different places? 

It’s not uncommon for old weapons from Russia and the U.S. to have second and third lives beyond their original owners. Military officials sell old equipment to other countries, often at bargain prices.

“The United States is anxious in many cases to provide allies with military capabilities that don’t bust their budget,” says Bruce Bennett, Senior Defense Analyst with the Rand Corporation. The sales are legal, and governments aren’t required to report the movements of those weapons around the globe, though the UN and SIPRI both try to keep track.

It’s even more difficult to know how many smaller, less conspicuous Soviet-era weapons are circulating around the world's conflict zones illegally. 

Weekly Wrap: Duck hunting and the Fed

Fri, 2014-07-18 13:33

Marketplace host Kai Ryssdal discussed the week that was in business and the economy with the Wall Street Journal's John Carney and chief economist at Redfin Nela Richardson

Listen to their conversation in the audio player above.

How many apps do you use in a month?

Fri, 2014-07-18 13:31

The good people at Nielsen did some measuring of how many apps we use on a regular basis.

You'll probably need a second to think about it; there are lots of categories to consider, right? News, travel, entertainment, finance...

Okay, ready?

We all, on average, we use 26.8 apps per month on a regular basis.

There seems to be a natural cap of 30; no age group uses that many.

Twitter may change metrics to reflect a wider audience

Fri, 2014-07-18 13:28

Some 255 million people log on to Twitter every month. That’s lot of people, but the number’s not growing fast enough to satisfy some investors. Now, the Wall Street Journal reports Twitter may unveil new metrics to convince investors that the world of people who engage with Twitter is bigger than the world that logs on.

“When you’re analyzing a social network, there are only two things that you care about,” says Shyam Patil, senior internet research analyst at Wedbush Securities. “The number of users and the level of engagement.”

Twitter describes those now with two metrics: monthly active users and timeline views. But there’s a problem, says analyst Brian Wieser of Pivotal Research Group.

“The problem is: Twitter - surprise, surprise - isn’t for everyone,” he says.

Growth in users and engagement has slowed year-over-year.

But these days, plenty of non-tweeters still interact with tweets. Say you’re a sports fan reading a piece online about LeBron James going back to Cleveland. Tweets from LeBron might be embedded in the article.

“So that would be me engaging with Twitter, but not really signed on,” says Shyam Patil.

Your mom might not send tweets, but she’d see and hear them if you watched "Celebrities Read Mean Tweets" on "Jimmy Kimmel Live" together.

Twitter’s new metrics would – reportedly – capture some of that wider audience. The company declined to comment, citing the quiet period that precedes earnings reports.

Analyst Brian Wieser says he thinks all this focus on Twitter user metrics is “distracting from the fact that they’ve got a great business. Metrics that would tell a much better story are things like: How many advertisers do they have? What is the average spend per advertiser?”

Things, he says, that speak more directly to Twitter’s source of business than the number of people who see tweets.

Why planes fly through dangerous airspace

Fri, 2014-07-18 13:17

The downed Malaysia Airlines jet has passengers and airlines alike asking new questions about safety, wondering why the company stuck to a flight path directly over a volatile conflict zone. President Obama says it appears the plane was shot down by a missile from Ukrainian land controlled by pro-Russian forces.

Ukrainian authorities had closed the flight path up to 32,000 feet. But Flight MH17 was above that altitude. Even before the incident, some airlines avoided the area altogether. Malaysia Airlines, however, stayed the course, as did several other carriers. A less efficient flight path means more money spent on fuel, crews and maintenance. So it’s not a decision carriers take lightly.

“This industry has gotten so dog-eat-dog and so competitive that they’re looking at the bottom line far more than they ever have in the history of this industry,” says University of Portland finance professor Richard Gritta, who has long studied commercial aviation.

The strict cost cutting of modern airlines is striking to those who remember aviation’s glamorous golden age. Retired American Airlines pilot Jim Tilmon remembers taking a plane hundreds of miles off its planned path to avoid nasty weather and provide a more comfortable ride for passengers.

“I did burn a little bit more fuel, but it wasn’t a big deal. It wasn’t so much that the airline got upset,” Tilmon remembers.

With airlines facing high fuel prices and relentless shareholder pressure, pilots today don’t expect their employers to be so lenient.

Mark Garrison: Airlines use computer modeling and human judgment to choose flight plans. Basically, they look at two things, says aviation consultant George Hamlin.

George Hamlin: The first thing is safety. The considerations after that are basically you would like to do that at the lowest possible cost.

A less efficient flight path means more money spent on fuel, crews and maintenance. So it’s not a decision carriers take lightly. Ukrainian authorities had closed the flight path up to 32,000 feet. But Flight MH17 was above that. Some airlines still avoided the area altogether, paying more for extra safety. Malaysia Airlines stayed the course, as did several other carriers.

Richard Gritta: This industry has gotten so dog eat dog and so competitive that they’re looking at the bottom line far more than they ever have in the history of this industry.

University of Portland finance professor Richard Gritta says a longer flight path may only cost a few dollars more per seat. But multiply that over all the flights and it takes a real bite out of profits.

Gritta: It becomes a fairly big deal, especially if you’re flying that route several times a day.

Strict cost cutting is why you don’t often hear captains of today’s commercial jets talk like Jim Tilmon.

Jim Tilmon: I’ve flown hundreds of miles around weather to keep my passengers secure and safe and comfortable.

Tilmon was a longtime American Airlines pilot, whose career included air travel’s golden age.

Tilmon: I did burn a little bit more fuel, but it wasn’t a big deal. It wasn’t so much that the airline got upset because I did that.

With companies facing high fuel prices and shareholder pressure, pilots today don’t expect their employers to be so lenient. I'm Mark Garrison, for Marketplace.

A look at the Export-Import bank

Fri, 2014-07-18 12:23

In Congress, there’s been a big, heated debate about a bank most people probably haven’t heard of: The Export-Import Bank of the United States, commonly called the Ex-Im.

The bank’s charter expires in September, and many conservative Republicans would like to kill it, while others are calling for reforms.

Conservatives say the Ex-Im bank is bloated, inefficient, comes at a high cost to the taxpayer and is really just a form of corporate welfare for big companies, including Boeing.

But Democrats and some Republicans say Ex-Im helps small businesses enter foreign markets, helping boost exports.

To help explain what the Ex-Im bank does and put it in context, we took a little field trip to a fabric whole seller in New York City who once did business with the bank. We also spoke with entrepreneur and investor Jan Boyer* in Washington, D.C.

*CORRECTION: An earlier version of this story provided the misspelled the name of Jan Boyer. The text has been corrected.

 

Tech IRL: Selling your smartphone safely

Fri, 2014-07-18 12:13

Smartphones hold so much of our lives. From our photos to our emails to our texts, there is a lot of personal info housed on our smartphones. Hayley Tsukayama, tech reporter for the Washington Post, joins Marketplace Weekend host Lizzie O’Leary to tell listeners what they should be doing with their smartphone before selling it.

Selling your smartphone is a quick way to make some cash. But a study published earlier this week by the security firm Avast, in which the firm bought some used Android phones and recovered thousands of "erased" personal files, stands as a good reminder that you have to think carefully before you sell.

The FCC has been inundated with comments. Now what?

Fri, 2014-07-18 11:43

The Federal Communications Commission is getting inundated with comments on its proposed net neutrality rules.

The folks weighing in include regular people, business owners and musicians. The band OK Go ganged up with a bunch of other artists to write a letter objecting to parts of the proposed net neutrality rules. They don't like the idea that broadband companies could charge extra for "fast lanes" on the web, which could give some content providers an advantage. OK Go's lead singer Damian Kulash fears big-pocketed content providers would push little guys out of the way online.

"Our big breakthrough was a video we made in my backyard for $5. Suddenly, a band could get directly to their fans with a massive video that we'd made for almost no money," he says.

Kulash thinks the FCC's current proposal could crimp, not advance, that kind of open access to an online audience.

On the other side of the debate sits the telecom industry, which doesn't like the idea that it might be regulated as a utility. Telecom companies say that could kill investment and innovation.

The FCC says it's putting extra processes in place so all public input is seriously considered. The agency's commissioner and senior staff get summaries of the comments.

But law professor Christopher Yoo at the University of Pennsylvania says the FCC is too constrained by court rulings on its proposed regulations, and can't take all views into consideration at this point.

He doubts that the final version of the rules will be shaped by posts and emails from average Joes.

"They will be used by whichever side of the debate it favors as rhetorical flourish," Yoo says.

Blair Levin, a former chief of staff with the FCC, is more hopeful that every comment counts.

"This is obviously one of the issues about which the public cares most that the FCC will be dealing with," Levin says.

Levin thinks the FCC still has a lot of options on the table. The agency hopes to finalize the rules by year's end.

Editors' Note: American Public Media Group, Marketplace's parent, submitted comments to the FCC generally in favor of net neutrality.

The rise of student loan consolidation scams (and options for actual help)

Fri, 2014-07-18 11:02

Here’s a handful of student loan numbers for you. According to the Consumer Financial Protection Bureau, current student loan debt is nearing $1.2 trillion. An estimated 7 million borrowers are now in default; behind on $100 billion in debt.

All of which adds up to a juicy market for companies looking to cash in on people with student debt troubles.

This week, Illinois Attorney General Lisa Madigan filed suit against two student-loan debt-settlement companies.  The suits allege that Broadsword Student Advantageand First American Tax Defense tricked borrowers into paying upfront fees for student loan help the companies didn’t provide.

According to one of the filings, First American Tax Defense promised enrollment in a fake “Obama Forgiveness Program.”

Madigan said these companies run ads that entice people excited to call, “and what they really find out is that these are scam artists [who] want their money.”

In a 2013 report, the National Consumer Law Center found that  “a new ‘student loan debt relief’ industry has sprung up in response to the demand for borrower assistance and the dearth of reliable resources.” 

“There’s a lot of debt, it’s very confusing,” said NCLC attorney Persis Yu. “I think some borrowers are desperate and they are turning to places that look like they might be an easy fix.” 

She says many of these debt-settlement companies mischaracterize government programs as their own.

They charge borrowers as much as $1600 for services, like debt consolidation, that are available from the government for nothing.

“What’s making this possible is a lack of awareness of repayment options,” said Mark Kantrowitz, student financial aid expert from Edvisors.com.

He says the government should run an ad campaign of its own, so students with debt know what help is available for free.

If you are struggling to pay back your federal student loans, here are your options:

  • Direct consolidation: If you have multiple federal student loans you can consolidate them into one payment and extend the life of the loan to 30 years to lower monthly payments. 
  • Extended repayment: Borrowers with more than $30,000 in debt can extend the repayment period from the standard 10 years up to 25.
  • Graduated repayment: Borrowers who choose extended repayment can also set up monthly payments that start low and grow every two years.
  • Income-based repayment: Your monthly payment is pegged to your income and can be adjusted annually to account for income fluctuations. The term of the loan can also be modified to go beyond 10 years.
  • Income contingent repayment: Your payment based on your monthly income and any outstanding debt is cancelled after 25 years.
  • Pay-as-you-earn: For borrowers who took out loans after 2007 and have a family or financial hardship. This income-based plan offers the lowest monthly payment options of any income-based plan.

How to spot a scam:

  • High-pressure sales tactics, like suggesting your interest rates are about to skyrocket, without debt consolidation.
  • Charging fees before debts are settled
  • Touting a "new government program" or suggesting they have special access to government programs
  • Claiming to represent the Department of Education or other government agency
  • Offers of discounted pay-back rates, gifts or special incentives
  • The hard sell, plain and simple

 

The federal government and other organizations offer free, legitimate relief for those who have fallen behind on their student loans:

https://studentloans.gov/myDirectLoan/index.action

https://studentaid.ed.gov/

http://www.studentloanborrowerassistance.org/start-here/find-solution/

 http://www.edvisors.com/repay/federal/cancel/forgiveness/

http://www.edvisors.com/repay/federal/consolidation/

My money story: Writer Sarah Mirk

Fri, 2014-07-18 10:57

Sarah Mirk is the Editor of Bitch Media and Host of the podcast, Popaganda.

The biggest thing I own is my mattress. Some people have trucks or boats or houses or heirloom chests of drawers or ambitiously large desks or impressive, ill-conceived contemporary art pieces, but the most impressive thing I own just this big, squishy rectangle.

It might not seem like much, but getting this mattress was a major life step for me.  When I first moved to Portland, Oregon six years ago, I was determined to furnish my room through only things I could get for free. This sounds like a bohemian ideal, but factoring into my ethics was the fact I was dang near broke.  It was 2008 and I had just graduated from college. I was working an unpaid internship as a reporter at a newspaper and the headlines were full of lines about bankers fleeing their offices as the economy went into freefall. Personally, the anxiety about not really having a paying job was compounded by the slightly more pressing concern of not really having a bed. So when a roommate offered me his old futon frame and pad from the basement, claiming it was like “sleeping on a cloud,” I gladly took him up on the offer.  That futon turned out to be a cloud made of stabby wooden railroad slats. But it was my accursed futon now, and I was grateful.

I used to talk about this lack of major possessions as a romantic thing: I wouldn’t want to own anything that I couldn’t throw in the back of a van at any moment, because—who knows?—maybe in a month I’d decide to travel through Latin America and change the world. Honestly, though, the truth is that even when I got a job, soon after Obama was inaugurated, I was scared to buy anything remotely nice—like a car or a sofa that didn’t smell like cats.  I know I’m supposed to view large, expensive items as investments. I feel like I’m supposed to go into debt for things because they’ll wind up helping me in the long run. But I came of age in a time when the absurdity of the whole credit system became tragically clear—the people running the economy reminded me of Gene Wilder’s version of Willy Wonka, mysterious men running around, gleefully pulling levels that unleashed sweet rewards on some and chaos on others.

When I was a kid, I remember debt looming over my parents like a silent, gloomy cloud. The day they finally paid off their credit cards, they cut them up in front of me and we ordered pizza to celebrate—they paid with cash. Years later, I spent a week helping teach down sodden houses in Mobile, Alabama, after Hurricane Katrina tore through and flooded whole neighborhoods. I spent days shoveling peoples’ possessions into giant piles in the gutter—sofas, entire moldy bookshelves, water-logged TVs.  Then when I moved to Portland, I often reported from the county courthouse, where every morning there was an auction of foreclosed homes on the front steps of the building.

All signs seemed to point to the conclusion that big possessions—requiring a mortgage and a car payment and a cable bill—would become an anchor, dragging me underwater. I realized, slowly, that I’m not a bohemian free spirit…

I’m a frugal cynic.

Back on that horrible slab of a futon, I toughed out the nights for two years, until my very sweet new boyfriend finally cracked. He told me in no uncertain terms that I either needed an actual mattress or he was never sleeping at my house again.

“But!” I protested, “I can’t just buy a mattress.” Since I’d been getting regular paychecks, I had enough money to buy something better than the filthy heap that haunted my floor. But I was nervous to committing to owning a real, adult thing that I might someday see ruined.   

But he had a point. So I dutifully took the bus to IKEA and walked up the trail to the bedroom section to the gauntlet of modernist bed frames, eyeballing pricetags. Around me, cheerful couples were buying mattresses, joyfully betting on a stable future full of new furniture and reliable middle-class jobs. That’s the IKEA spirit. I felt so out of place that I turned heel and left in defeat.

After another night, gathering my resolve while lying on the wooden planks, I gave it another shot, heading to a family-run mattress store near my house. It was empty when I walked in.  Without the oppressively upbeat surroundings, I actually liked looking at the beds. I flopped on one after another. They were so comfy. It dawned on me that a bed was not a dangerous luxury item that would trap me. This was a bed. Come bull market or bailout, you need a bed. It’s okay to buy simple things that I’ll appreciate for years and years, even if I don’t know what those years will look like.  

I paid $300 for a springy queen size mattress. And I felt good.

 I’ve had that mattress for four years now. At the end of each chaotic day, it’s nice to come home to stable and cozy place.

And besides, worst case scenario, it can always double as a life raft. 

Thor becomes a lady, and other changes at Marvel

Fri, 2014-07-18 09:25

Marvel announced earlier this week some changes to two of their most prominent characters. A woman will pick up Thor’s hammer and Sam Wilson — a black hero currently known as Falcon — will pick up Captain America's shield.

The current Thor will soon become unworthy of Mjolnir. Only a select few can wield the legendary hammer, and whoever picks it up becomes the new Thor. That change and the new Cap both came naturally from their series' respective writers, says Wil Moss, an editor at Marvel. Moss works with Thor writer Jason Aaron.

"It just kind of sprung from where he was taking the character," Moss said. "Thor has a tradition of other people holding the hammer and being Thor for a while."

Marvel has taken other steps to make its pages more diverse in recent years. When Spider-Man died in the company's separate"Ultimate" line, he was replaced with a black Hispanic teenager. The publisher also introduced an all-female "X-Men" comic last year and relaunched the series "Ms. Marvel" in February with a Muslim, Pakistani-American heroine. These shifts have drawn acclaim, but changes to Thor and Captain America might be the most sweeping and visible yet.

Moss says besides the creative reasons for shaking up these characters, these changes make sense as a way to build a new audience for Marvel.  

"It’s just a way to broaden our audience, to make characters that more people would be interested, to reach different groups of people."

This new Thor might look different, but Moss says she'll quickly jump into the same adventures as her predecessor.

"Right off the bat she's going to be fighting Frost Giants," Moss says. "She's getting right into the thick of things."

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