Advice You Can Use!

Smart financial planning in the current economy is a dynamic process. To help you stay current, RPS, Inc. is publishing a series of helpful bulletins which you can download from this page. Check back often for the latest information!

New Income-Based Repayment (IBR) plan for federal student loans. On July 1, the federal government's new Income-Based Repayment (IBR) plan for federal student loans went into effect. Under this program, a borrower's monthly student loan payments will be based on his or her income and family size. More specifically, annual loan payments will be 15% of the difference between a borrower's gross income and 150% of the federal poverty level (the latter depends on family size and state of residence). Monthly payments are then calculated as one-twelfth of that amount. After 25 years of qualifying payments, the principal loan balance may be forgiven.  Read more.

SEC rule on short selling. The SEC has made permanent a rule requiring that short sellers complete a trade within four days. Aggregated information on short positions in individual stocks will become available on self-regulatory organizations' web sites (such as FINRA) within a month of the trade, but short positions taken by individual money managers, such as hedge funds, will not be disclosed. And twice a month, the SEC also will disclose failed short trades, in which stock involved in a short sale is supposedly borrowed but never replaced.  Read more.

"Cash for clunkers" receives additional funding. The Car Allowance Rebate System (popularly known as "cash for clunkers") was almost a victim of its own success. The program, which provides $3,500 or $4,500 vouchers that can be used toward the purchase or lease of a fuel-efficient new vehicle when an old "gas guzzler" is traded in, burned through its initial $1 billion funding well short of its projected expiration of November 1, 2009.  Read more.

President Signs the Credit Card Accountability Responsibility and Disclosure Act of 2009 into Law (May 27, 2009)--On May 22, 2009, President Obama signed the Credit Card Accountability Responsibility and Disclosure Act of 2009 (the Credit CARD Act of 2009). Amending the Truth in Lending Act, the Credit CARD Act of 2009 requires a creditor on an open end consumer credit plan (credit card) to notify a consumer in writing of any change in the annual percentage rate (APR) on the account at least 45 days prior to the change. The notification shall also inform the consumer of the right to cancel the account before the effective date of the rate increase. If the consumer cancels the account, this action shall not constitute a default on the account, and shall not trigger an obligation to repay the account in full. Read more.

Tax Season Follow-Up: Overwithheld? Underwithheld? (May 5, 2009)--Did you owe tax on your 2008 federal income tax return? If so, you might want to consider increasing the amount of federal income tax that's withheld from your paycheck by completing and filing a new Form W-4 with your employer. (If you're self-employed, you'll have to bump up your quarterly estimated tax payments.) Not having enough withheld can result in more than just a cash crunch at tax time—it can mean penalties and interest. Read more.

Spending Your Refund Check: Think Twice (May 5, 2009)--If you've received—or are waiting for—a sizable federal income tax refund, you're not alone. According to the Internal Revenue Service, over 100 million individuals received refunds last year, and the average refund payment exceeded $2,000. How you spend your refund is up to you, but before you call a travel agent or splurge on a new big-screen television, consider whether there might be better ways to put this cash to work for you. Read more.