Obama Faceoff: Budget Negotiations

Obama was mired in budget negotiations, canceling trips and scrambling to stave off a government shutdown that could only undermine the public's faith in his leadership.
It was the messy business of governing, and how it's going to be in this long campaign for incumbent Obama.
Beyond the vision for economic competitiveness he wants to talk about, Obama is chasing a second term while trying to make a deeply divided government work. He got bogged down in legislative tactics in his first two years, even when he won fights on health care and other issues.
The goal now is to avoid all that. He can't.
In this test of leadership, the White House says Obama wrangled the budget compromise he wanted, spending cuts he supported without shelving his priorities or accepting unacceptable policy changes.
His administration portrayed it as an example of bipartisan cooperation of the highest stakes.
Yet the government was on the brink of closing, and many people were wondering how that could happen, or why.  Click HERE for entire article
This is change?
The showdown was a reminder that for all a president's powers, there's much beyond control. Think Libya, Egypt, Japan's earthquake, not to mention Iraq and Afghanistan.
In this case, the new House Republican majority, led by Speaker John Boehner, seized on a must-pass budget bill to give voice to frustrated voters and tea party conservatives who demanded spending cuts.
It was brinksmanship mode again in the capital, where nothing gets done until the deadline. Sometimes not even then.

Tax Tips 2011

Overlooked Tax Deductions

Laura Saunders

provided by Click HERE




8 Overlooked Deductions
1. State-tax refunds for AMT taxpayers. Taxpayers often forget that state tax refunds aren't taxable to those who owe alternative minimum tax, or AMT, for the same tax year, as long as the amount of the refund is less than the amount of state income tax disallowed under AMT.
2. Charitable donations, Part I. Donors may not deduct labor or time, but they may deduct expenses such as mileage or uniforms. Board members or chosen representatives also may deduct unreimbursed expenses for attending a conference or meeting. For details, see IRS publication 526.
[ More from WSJ.com: What's New for Tax Season ]
3. Charitable donations, Part II. Employees who give to charities via payroll deductions at work frequently forget to include them on their personal return. "The number is not on the W-2 and there's no letter," says Melissa Labant, an expert with the American Institute of CPAs.
4. Health-insurance premiums for the self-employed. For 2010 only, people who are self-employed and have deductible health-insurance premiums may also deduct them against Social Security taxes on Schedule SE. For 2010 and after, these same taxpayers may deduct premiums for a child under age 27 at the end of the year, even if the child isn't a dependent for tax purposes.
5. Medical expenses. The disallowance equal to 7.5% of adjusted gross income is a high hurdle, but those who qualify shouldn't overlook all possible expenses, listed in IRS publication 502. Ms. Labant advises married couples to consider filing separately if one partner has high bills. "This is one of the only times that filing separately can lower the total tax bill," she says.
6. Sales-tax deduction in lieu of income taxes. This provision, which Congress has extended through 2011, allows itemized deductions for state and local sales tax instead of state and local income taxes. Taking this is a no-brainer in states without an income tax, and it may work for others if state income taxes are relatively low but a taxpayer had big-ticket purchases such as a car, boat or engagement ring, according to H&R Block's Tax Institute.
[ More from WSJ.com: Rich Targeted in IRS Audit Offensive ]
7. Moving expenses. Taxpayers who moved more than 50 miles for work and stayed employed may often deduct reasonable moving expenses. No itemization is necessary. See IRS publication 521.
8. Domestic Production Deduction. This generous benefit for having a qualified business in the U.S. can be claimed by sole proprietors, partnerships and corporations; it can even apply to farmers. It is easy to miss, says Chris Hesse, a CPA with LarsonAllen LLP in Minneapolis, "because no checks are written and tax-prep software may be unaware of it."
8 Audit Triggers
1. Mortgage-interest deduction over $50,000.Taxpayers are allowed to deduct interest on qualified loans up to $1 million (plus $100,000 of home-equity debt), and $50,000 is roughly equal to the annual interest on a $1 million loan at 5%. "Clients with larger payments are sometimes too busy to refinance," says David Lifson of Crowe Horwath CPAs in New York, "but they are likely to hear from the IRS."
2. Large charitable contributions, especially of noncash items. Taxpayers must have proof for every dollar of donation deductions, and sometimes appraisals. See IRS publications 526 and 561.
3. Schedule C business losses more than two years in a row. Because these losses are deductible against other income, losses in three or more consecutive years arouse the IRS's suspicion that they are nondeductible "hobby losses." A small profit raises taxes very little and diverts attention, says Robert Gard of Gard & LaFreniere, an Atlanta-area CPA firm.
4. Home-buyer tax credit. Congress has passed three versions of this stimulus since 2008, and research by official watchdogs showed substantial fraud in the initial one. Later versions require taxpayers to provide documents proving they qualify for the break.
[ More from WSJ.com: The Kind of Tax Trouble That Leads to Jail]
5. Rental real estate, especially with losses. A perennial red flag, especially if the taxpayer claims to be a real-estate professional, because the losses are then deductible against ordinary income. The IRS will be even more suspicious if the wages and professional activities are performed by a single person or one partner of a couple, because professional status often requires a 750 hour-a-year commitment, says James Guarino of Boston-area CPA firm Moody, Famiglietti & Andronico.
6. Payouts to subchapter S owners who earn little or no compensation. Owners of closely held businesses using subchapter S sometimes pay themselves in dividends and lowball their wages in order to minimize the 15.3% payroll tax. It's difficult for the IRS to police, but those who take too little compensation are asking for IRS attention, Mr. Gard says. One rule of thumb: The ratio of pay to profits should be 70% or higher.
7. Large deductions in relation to income, especially for business travel and entertainment. What is too large? That's hard to say, and the IRS zealously guards its audit formulas. See IRS publication 463.
8. Home office--maybe.Years ago, the IRS was famous for challenging home-office deductions, but has backed off lately, say some experts. See IRS publication 587.
6 Common Errors
1. Overstating charitable deductions. If you attend a charity event, you may deduct only a portion of the ticket cost, which is usually stated in a letter from the charity. This is true even if you don't attend, unless you donate the ticket back to the charity beforehand.
2. Deducting mortgage "points" incorrectly. Mortgage fees are deductible upfront only for a first mortgage. Points on refinancings must be deducted over the life of the loan.
3. Overlooking the "kiddie" tax. Children up to age 23 often owe tax at their parent's rate on investment income over $1,900. Information from the parent(s)' return is required to complete the child's, so it should be finished first. For details, see IRS publication 929.
4. Missing the Making Work Pay credit. Last year was the final one for this refundable, dollar-for-dollar credit of up to $400 for individuals or $800 for married couples earning less than $190,000 (single: $95,000). Although withholding was adjusted to reflect this credit, taxpayers also need to file Schedule M to claim it.
5. Omitting small interest payments. Banks and other firms don't have to provide a 1099 form for amounts less than $10. So why do such small amounts matter? Because they still are taxable income. An IRS auditor may note the discrepancy, and "any unreported income makes the IRS nervous and can lead to more questions," says Ms. Labant of the AICPA.
6. Roth conversions and filing extensions. Taxpayers who converted regular IRAs to Roth accounts in 2010 have until Oct. 17 to reverse them. It may make sense to get a six-month filing extension, because if you already have filed and decide to reverse the conversion, you will have to file an amended tax return.
5 Tips for Investors
1. "Wash" sales. You can't take long-term capital losses on stock sales if you also buy shares 30 days before or after the sale. Exercising stock options counts as a purchase.
2. Dividends. Only "qualified" dividends get a top tax rate of 15%; others are taxed at ordinary income rates. Fortunately most dividends of stocks held longer than two months count as qualified, but check broker reports.
3. Losses. Long-term capital losses (those on investments held longer than a year) can be used to shelter an equal amount of gains. Up to $3,000 of excess can then be deducted against ordinary income per year, and what's left can carry forward indefinitely.
4. Employee stock. A discount is recorded on your W-2 form that should raise cost basis and lower taxes when the stock is sold. But this adjustment is often overlooked.
5. Incentive stock options. Watch out for alternative-minimum-tax consequences both on exercise and sale.
3 Ways to Cut Your Tax Bill Now
1. Regular IRA. You may deduct contributions to a regular IRA made by April 18. For more details on who is eligible, see IRS publication 590. Note: Taxpayers 50 and older can put in a bit more.
2. SEP IRA and other pension plans. Unlike with regular IRAs, deductible contributions may be made until Oct. 17 for those with filing extensions.
3. Health Savings Accounts (HSAs). You may deduct up to $6,150 per family ($3,050 single) for an HSA if you had a qualifying high-deductible health plan in 2010. Contributions are due by April 18.
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Offshore Accounts
The IRS is going after undeclared foreign accounts. Taxpayers with accounts totaling more than $10,000 at any one point during a year—this can include foreign trusts or the Canadian version of IRAs, among other things—must check a box on the tax return and file a special form with Treasury by June 30.
Not doing so risks draconian penalties that can swallow half of the account, and the rules don't always distinguish between taxevading fraudsters and expatriates or others with foreign accounts. "This is a detail taxpayers shouldn't miss," says Bryan Skarlatos, an attorney with Kostelanetz Fink in New York, "because you could wind up in jail.

Car Deals for April 2011

Article provided by US News: click HERE 
While sales remained strong for the entire month, demand for small, fuel-efficient cars meant car makers didn't need to offer impressive incentives to attract shoppers. As a result, overall incentives were down and analysts expect the trend to continue. If you're looking for a great deal on a new car, April may not be your month.

Complicating your chances of getting a good deal is the ongoing crisis in Japan. Because of the complex global supply chain most automakers use, the Japan catastrophe has had a ripple effect throughout the industry. Even domestic car makers have cut back on production as they try to conserve important parts. For consumers, this means that the supply of new cars could run short, making it tough to find the model and options you want, especially if you're shopping small cars. Adding to the squeeze on small cars is high demand as consumers go for more fuel-efficient models in the face of rising gas prices. High demand and limited supply for small cars means that automakers don't have to offer incentives.


"These latest numbers show by far the biggest February-to-March incentives decline since Edmunds.com started tracking in 2002," said Ivan Drury, analyst at Edmunds.com. "The decline is mostly likely a result of a 26% month-over-month sales jump in subcompact and compact cars which typically have a much lower level of incentives compared to large trucks and SUVs." In March, Edmunds.com says, domestic car makers spent an average of $310 less on incentives than they did in February. That means consumers spent, on average, $310 more on a new domestic car in March than they did in February. For the industry as a whole, car makers spent $469 less on incentives in March than they did in February. That effectively means that consumers spent 16.7 percent more for new cars in March than in February, according to Edmunds.com.


"The actual and perceived supply chain problems enabled automakers to lower incentive spending in March with the trend expected to continue into April,” adds Jesse Toprak, VP of Industry Trends and Insights for TrueCar.com. "The Japanese automakers will see a dramatic reduction in incentive spending in the coming months with an increase in transaction price."


With disruptions in new car production expected to last until mid-June and gas prices remaining high, if you're expecting to get a deal on a fuel-efficient car, you may want to wait. But, if you're considering something larger, you may get a deal. While incentives on small cars are fairly paltry, incentives on SUVs and larger cars are more enticing. Chevrolet is offering the 2011 Chevrolet Cruze with 2.9 percent financing for up to sixty months. Opt for the Chevrolet Malibu, and you can choose between $2,500 cash back and zero-percent financing for 60 months. Go for something even bigger, and you'll get a heftier discount. If you finance a 2011 GMC Sierra 1500 extended or crew cab through Ally Financial (GM's lending arm), you'll get $2,500 cash back plus a $2,005 cash allowance. Together those cash back offers drop the price by $4,505.


If you're looking for something that's better on gas, you can still find some deals, but don't expect generous cash back offers on small cars. Instead, automakers are offering zero-percent financing offers and lease deals. You should also take a look at small cars that may not have been on your radar before. While a hybrid like the Prius may be tough to get, it should be easier to get a good deal on high mileage cars like the Mazda2 and Ford Focus. The Ford Focus is one small car you may be able to negotiate a good deal on because a redesigned Focus is due out later this year. Dealers want to clear the 2011 Focus models off their lots before that happens.


While we strive to keep this list of the best car deals up-to-date, they can change without warning. In many cases, the deals available to you depend on where you live. The best way to find out if you can take advantage of these deals is to contact a dealer near you. You can use the form next to the car you're interested in below to contact local dealers for more information on the best new car deals. If these deals don't work for you, we've got the best deals for Toyota, Nissan, Ford, Honda, Chevy, Lexus, Infiniti, Jeep and Chrysler. We also have this month's best lease deals and best deals on used cars. There's a great deal out there for you, and we've done the research to help you find it.

Carmaker Car Deal Expires Buick, GMC, Cadillac, Chevrolet 0%  APR financing for up to 60 months on many models.  5/2/11 Ford, Lincoln 0% APR for up to 36 months on many models. 5/2/11 Toyota $500 to $1,000 cash back on some models in some regions; low- and no-interest financing in some areas. 5/2/11 Volkswagen 1.9% APR financing for up to 60 months on many models. 5/2/11 Mazda 0% APR financing for up to 60 months on some models, depending on region. 5/2/11 Chrysler, Jeep 0% financing on many models for up to 60 months. 5/31/11 Honda 0.9% APR for up to 60 months on some models. 5/2/11

The best deals for April 2011 are below:

2011 GMC Sierra 1500: Purchase Deal: up to $4,505 cash back when you finance though Ally Financial.

When shopping for a truck, it's easy to get sucked into the Ford vs. Chevy debate and forget all about GMC. That's a mistake. The GMC Sierra 1500 is a capable truck that's strong enough to work all day, but upscale enough for a night out. With the deal GMC is offering on the Sierra in April, you should have enough money to hit the town. Finance through Ally Financial, GMC's lending arm, and get up to $4,505 off on the Sierra 1500 crew and extended cab models. That's enough to put thoughts of a bowtie or a blue oval far from your mind. Expires: 05/02/11

MSRP: $20,850 - $46,645
Invoice: $20,016 - $43,380
MPG: 15 City / 18 Hwy

2011 Buick Enclave: Purchase Deal: $2,000 cash back or 0% APR for 60 months.

The Buick Enclave offers as much practicality as any other family crossover on the market, but ups the ante with high-end style and comfort. While that raises the Enclave's price, most reviewers say it's worth it. Though all the upscale appointments, including an available Bose stereo, are nice, the Enclave gets the most respect for having a third row that's actually adult-friendly. In April, the Enclave's higher price may be easier to stomach. You can choose between $2,000 cash back or zero-percent financing for up to 60 months for qualified buyers. Expires: 05/02/11

MSRP: $35,615 - $44,095
Invoice: Invoice: $33,834 - $41,890
MPG: 17 City / 24 Hwy

2011 Mazda2: Purchase Deal: Deal: 0% APR for up to 60 months.

Mazda, like most Japanese car makers, has faced supply and production issues since the earthquake in Japan. However, that hasn't stopped this automaker from offering the Mazda2 subcompact with zero-percent financing for up to 60 months. The Mazda2 is closely related to the popular Ford Fiesta, and reviewers like its fun-to-drive nature and low price. Keep in mind that Mazda2 supplies may run short due to the ongoing crisis in Japan, so negotiating a lower price may be tough. That's why a no-interest offer like this is so enticing. If you qualify for it, you'll save over the long term. It's also one of the best offers currently available on a small, fuel-efficient car. Expires: 05/02/11

MSRP: $14,180 - $16,435
Invoice: $13,996 - $16,216
MPG: 29 (Est) City / 35 (Est) Hwy

2011 Kia Sedona: Purchase Deal: Deal: $2,000 cash back and 0.9% APR for 36 months.

Minivans are all about value – and reviewers say the Kia Sedona is one minivan that has the value equation all sewn up. While the Sedona doesn't offer as many bells and whistles as other vans do, it does have a lower starting price and a longer warranty. That's good news for parents who care more about funding their kids' college funds than keeping them pacified with wide-screen DVD players. In April, you can finance the Sedona at 0.9 percent for 36 months and get $2,000 cash back. Expires: 05/02/11

MSRP: $24,595 - $29,195
Invoice: $23,870 - $27,275
MPG: 17 City / 23 Hwy

2011 Chevrolet Malibu: Purchase Deal: Deal: $2,500 cash back OR 0% APR for 60 months.

The Chevrolet Malibu may be due for a redesign, but the current model is still a good choice for midsize car shoppers. When the current generation debuted, it won North American Car of the Year, and reviewers still say it's a viable alternative to sedans from Honda and Toyota. The Malibu has plenty of space for a family, and styling that's conservatively elegant. In April, you can get the Malibu with $2,500 cash back or zero-percent financing for up to 60 months. Expires: 05/02/11

MSRP: $21,975 - $27,015
Invoice: $20,876 - $25,664
MPG: 22 City / 33 Hwy

United States Treasuries fall on rising inflation concerns

Treasuries fall on rising inflation concerns
10yr.top.pngclick on the chart to see other bond market data. By Laurie Segall, staff reporterApril 6, 2011: 6:39 PM ET


NEW YORK (CNNMoney) -- Treasury prices fell Wednesday as concerns about rising inflation and the outlook for interest rates in Europe and the United States took center stage.

On Thursday, the European Central Bank is expected to raise interest rates -- a move aimed at battling The ECB's potential move would come just days after the People's Bank of China just hiked interest rates for the fourth in time in six months.

The interest rate hikes leave the Federal Reserve as the odd man out. The central bank has kept interest rates near 0% since December 2008 and that's starting to make investors nervous that inflationary pressures may hit sooner rather than later.
CNNMoney survey: Where the markets are headed

"There's some concern about inflation," Williams Capital Group fixed income analyst David Coard said. He said there's also some renewed talk about how much the Fed will stick to its guns when it comes to ending QE2.

QE2 or "quantitative easing" program is the central bank's program aimed at spurring economic growth by flooding the system with liquidity.

On Tuesday investors mulled over the outlook for interest rates after minutes released from the Federal Reserve showed Tuesday that central bank officials are at odds about rising prices.

Click HERE for article source

Gas prices: Out of Control II

Is $106 the breaking point for oil? First, some traders insisted $100 oil was the line in the sand: go over it, and our rally would falter. But it didn't happen: after a brief, three-week flutter, the major indices are knocking on the door of their old highs.
It didn't happen at $105 either. But today, as oil passed $106 to the highest level since late 2008, retailers like JCPenney, Macys, Lowe's and Home Depot are down one to three percent.
There's other, inflation-related issues as well: two big companies (Wal-Mart and Hershey) made strong comments about the effect of inflation.  By Bob Pisani, CNBC Reporter

-to continue reading article go to http://www.csmonitor.com/Business/2011/0331/Oil-prices-Is-106-the-breaking-point 

-to read more about "oil prices" go to http://search.yahoo.com/search?cs=bz&p=oil+price&fr=fp-tts-701&fr2=ps

Auto Repair Insurance Scams

Definition of car repair insurance- 

Technically, car repair insurance is called extended warranty coverage. It serves to pay the cost of repairing problems that occur after the factory warranty expires – or in many cases it pays for repairs that the factory warranty doesn't cover.

Although you can buy car repair insurance, or extended warranties, many different places, be aware that many of these products are simply pre-paid service contracts and have serious limitations that limit their value. Typically the company selling the contract is not the company who actually pays claims. They are simply making a commission on the sale and don't much care if you get good service or not. (article by http://www.used-car-advisor.com/car-repair-insurance.htm)

Here is a list of just some of the many types of repairs and costs covered by this car repair insurance:

• Engine
• Transmission
• Electronic equipment
• Power equipment
• Air conditioning
• Steering
• Brakes
• Cooling system
• Suspension
• 4x4 systems
• Emissions system
• Turbo/Supercharger
• Towing fees
• Travel expenses
• Interior/Exterior Features
• Damages due to overheating
• Fuel System
• Much more .....

Choosing the wrong car repair insurance policy is asking for trouble because you will end up with nothing. You will certainly not be getting the coverage that you expected or desired. Phone sale car repair insurance policies are often scams because it’s so easy to make promises over the phone even if the company has no intention of delivering.
1. Telemarketer Car Repair Hidden Fees
Some of the most common types of telemarketer car repair insurance scams are because of hidden fees associated with your purchase. These may not seem like a big deal at the time however  they can make the insurance policy much more expensive. Some brokers will charge an arrangement fee for example, however this should never happen. The broker should get their fee from the insurance company themselves as the form of commission.
Some brokers will also charge an excess fee every time you make a claim. While these aren’t normally a problem it’s important to find out about these fees in advance. You should be very careful to avoid any hidden fees as you need to make sure you know exactly what you will need to pay.
2. Paying First and Reclaiming Later
Another very common auto repair insurance scam is the types of policy which request you to cover the upfront expenses of the car repairs and then claim the money back later. Read through the entire insurance document to find out whether or not this is the case. If you ever have to reclaim the money from the insurance company then the chances of ever getting it back are not very likely.
It’s much better to deal with an auto broker which will work with a certain number of garages directly. They will pay the garages straight away so that you don’t need to worry about getting your cash. It shouldn’t be your job to chase money from the insurance company, instead it should be the car dealerships problem.
3. Pressure Selling
Don’t get sucked in with a car warranty companies claims on the phone. There are a number of different promises that they can make which could end up being false. You must check the credibility of the company by taking your time to research them. Don’t settle for their pressure selling techniques.
If any business is trying to get you to sign the deal today then think again. A credible company will not tell you that a deal only exists today and try to pressure you into buying it. Instead they will give you plenty of time to think and decide whether or not the policy is the right one for you.
Get the company details if you are interested and tell them you will phone them back when you have more time. This will give you time to check out the credibility of the company and ensure that they are worth dealing with.

College Graduation: Time for Celebration or Time for Worry?

Your student loan documents probably do not explicitly state “let the buyer beware”–but maybe they should. A sobering report released this month by the Institute for Higher Education Policy, “Delinquency: The Untold Story of Student Loan Borrowing,” suggests that a majority of students struggle to repay their loans.

As the cost of a higher education has exponentially increased over the last couple of decades, common sense and anecdotal evidence has suggested this is the case. Unfortunately, policymakers have relied solely on default rates as a measurement tool. Default rates alone paint an incomplete picture, because they exclude borrowers who have difficulty repaying their loans but avoid default.  

The new report primarily focuses on the nearly 1.8 million borrowers who entered into repayment on loans obtained through the (now defunct) Federal Family Education Loan Program in 2005 during their first five years of repayment. It details the rates at which borrowers entered not only into default, but also into deferment (a temporary suspension of loan payments for specific situations such as re-enrollment in school, unemployment, or economic hardship); forbearance (temporary suspensions of a borrower’s payments because of financial difficulty made at the discretion of the lender); and delinquency (late payment on a loan).

Falling behind on federal student or parent loan payments can be terrifying. Your credit scores drop, which can cut off opportunities to buy homes, go back to school, or  get credit cards. Bankruptcy judges generally won't clear the debt, and the government can take part of your paychecks and even Social Security checks. But those having trouble making payments on federal education loans do have a growing number of attractive options to temporarily reduce or pause their monthly bills, or even get some of their debt forgiven.

 Here are some steps to get at least temporary financial relief while preserving good credit ratings:

 1. Document. Gather and keep good records of all phone calls and save copies of all paperwork and E-mails.

 2. Determine your loan type. Look at your documents and, if necessary, call your lender to figure out what kind of educational loans you are having trouble with. This can be harder than it sounds. Through July 1, 2010, private lenders such as Sallie Mae and Citibank can make both federal and private student loans. (After that, students and parents will apply through their college directly to the federal government for federal student loans. Private companies will only make private student loans.) The confusion over the different kinds of loans offered by private companies could have caused some borrowers to mistakenly takeout private loans instead of federal loans. Unfortunately, private loans offer those in financial trouble fewer options for relief. (However, Congress is debating a proposal to allow debtors to use bankruptcy to escape at least some private educational loans.) The following instructions apply only to the five major kinds of federal education loans: Parent Plus, Grad Plus, unsubsidized Stafford, subsidized Stafford, and Perkins.

 [Read about other advantages of federal student loans.]

 3. Determine who to call. You can get the name and contact information for your loan servicer by checking with the federal government or calling 1-800-4-FED-AID. Don't just call the company or school that gave you your loan. Most lenders sell their loans to investors, and hire companies called "servicers" to handle billing. If you've missed several payments, the servicer may turn your account over to a collections agency. In addition, those who have missed some payments often get calls from insurance companies, called guarantors, that backs many student loans. Borrowers generally need only deal with their servicer or collection agency.

4. Check the timing. People who haven't yet missed any payments have the easiest time of decreasing their monthly payments or getting permission to skip some payments, as costs and hassles rise the longer borrowers avoid paying. Lenders can add late fees of up to 6 percent of each monthly bill for every missed payment. It's still comparatively easy to get relief if you start negotiations before you've missed your ninth payment (or are less than 270 days late). After that, however, you're considered in default which means your credit rating plunges and you cannot receive any additional federal financial aid for college. Collection agencies can confiscate tax refunds or other government payments owed to defaulters, and they can garnish up to 15 percent of defaulters' wages. Lenders can add collection fees of up to 25 percent on most federal education debts starting 60 days after default. Those who default on Perkins loans can see their debts jump by collection fees of up to 40 percent.

Ultimately, there are a variety of other ways to manage your loans.  This article was meant to shed light and provide some assistance and ideas.  Perhaps others will be willing to share their stories and ways they have coped. 

http://news.yahoo.com/s/usnews/20110330/ts_usnews/avoidloandelinquencyanddefault

Health Insurance: Blue Shield Rate Hikes

The Los Angeles Times is reporting  that Blue Shield's premium hikes are hitting some policyholders with as much as an 86% premium increase.  Click HERE for LA Times article.  Higher insurance premiums sought by Blue Shield of California in recent months would drive total increases as high as 86.5% for thousands of individual policyholders, new documents show.  Blue Shield said the three rate increases reflect the soaring costs of medical care and the greater use of expensive healthcare services by policyholders, along with new state and federal mandates.

In explaining the need for the increases, company spokesman Tom Epstein also said that Blue Shield had underpriced some of its individual health plans, leaving the company without enough revenue to cover the cost of medical care for members. As a result, the insurer has had to raise premiums substantially on its money-losing products.

The U.S. Justice Department is widening a probe into whether Blue Cross Blue Shield health-insurance plans are artificially raising premiums in several states by striking agreements with hospitals that stifle competition from rival insurers.

Federal investigators and some state attorneys general have sent civil subpoenas to "Blue" health plans in Missouri, Ohio, Kansas, West Virginia, North Carolina, South Carolina and the District of Columbia, according to people familiar with the matter. The investigation is examining whether dominant health plans around the country are forcing hospitals to sign anti-competitive contracts that unlawfully inhibit them from doing business with their rivals.

Assembly Bill 52 (Feuer) is up for hearings this Spring.  The bill simply gives California's elected insurance commissioner the power to stop excessive premium hikes before they take effect.  Right now, Insurance Commissioner Dave Jones is powerless to stop Blue Shield or any other health insurance company.