We have had a busy month between juggling meetings, networking, community activities, and continuing education. Check out this month's newsletter for economic and market updates, portal enhancements, and more.
New Portal Features
Portal Updates Make Budgeting Easier
The Client Portal Transactions tab of the Spending tab is being updated to improve usability and expand filtering capabilities.
*Images by Joseph Pearson, Client Communications Supervisor with eMoney Advisor, LLC.
The Spending tab of the Client Portal allows clients to monitor and manage their daily cash flow of their connected accounts. Coming this month, the Transactions tab of the Spending tab will allow clients to:
Filter transactions by multiple categories and/or accounts at a time
Filter transactions by an exact date
Export transactions based on applied filters
Search within the spending categories drop-down
See which transactions are impacted before applying a rule
You can now manage your budget from your phone with greater ease and efficiency. This tab is being optimized for mobile in order to eliminate excessive scrolling or pinching screens when setting rules or categories. These updates will ultimately provide a more detailed view of transactions.
Public Service Loan Forgiveness
Public Service Loan Forgiveness Program Rejection Rate
Public Service Loan Forgiveness (PSLF) is a federal program that began in 2007 and was designed to encourage students to pursue working for the government or nonprofits in order to be eligible to obtain tax-free loan forgiveness. There is a strict set of program rules in place that must be followed in order to be approved for PSLF.
In 2017, the first group of borrowers became eligible for PSLF. However, the majority of borrowers who applied for PSLF in 2017 and consecutive years were not approved, largely due to not being on an eligible repayment plan or correctly documenting their public service.
In response, Congress financed the Temporary Expanded Public Service Loan Forgiveness (TEPSLF) program in 2018 as a solution to help borrowers who were facing barriers to obtain PSLF. Congress budgeted $700 million to fund loan forgiveness for approved TEPSLF applications, which will be allocated on a first come, first served basis. In addition, Congress required the Department of Education (DOE) to create a simple method that borrowers could follow to apply for TEPSLF. Below is a flow chart of the current process.
The United States Government Accountability Office (GAO), created a report published this month, which analyzes the effectiveness of the TEPSLF program. According to the Report, 99% of completed borrower requests for TEPSLF were rejected due to either incomplete or not submitted PSLF applications, not fulfilling the required 120 qualifying payments, or the federal loans were not PSLF eligible loans.
As the request process is complex and not borrower-friendly, the GAO is currently recommending that the DOE integrate the TEPSLF request into the PSLF application, all loan servicers be required to include the TEPSLF information on their websites, and that the PSLF Online Help Tool be updated to include information on TEPSLF.
Per Bernice Napach’s article in ThinkAdvisor, “The House Education and Labor Committee has scheduled a hearing for Sept. 19 to examine the findings of the GAO report. An official from the DOE will be invited but who will attend is not yet known, according to a committee aide.”
NorthAvenue assists clients with navigating their student loans by finding the right repayment plan for them and working with them to properly document their public service. If you have questions about student loans, loan forgiveness, or know someone who may need guidance regarding their student loans, please don’t hesitate to reach out to us.
Economic & Market Events
An Economic Snapshot
We are seeing the yield curve continue to invert, and employment growth is slowing down. Both of these have historically been indicators for a market downturn. Vanguard’s Market Perspectives takes a closer look at various economic factors that contribute to our current as well as projected market activity.
To add to market uncertainty, U.S.-China trade tensions are still high and the future of Brexit remains up in the air. As we see global growth start to slow, Vanguard projects a euro-area recession probability of 35-40% in the next 12 months. Their report says that they continue to see that market fluctuation due to U.S.-China trade moves have fit well within these expected market projections. However, they note that a sharp escalation in tariffs is the greatest downside risk to these projections. Slowing global economies lead Vanguard to predict that both the Federal Reserve and the European Central Bank will cut rates by year’s end.
Vanguard predicts that there is a 40% chance of U.S. economic recession in the next 12 months. The chart below shows that while the market does go up the vast majority of the time, market downturns are not uncommon, and investors can expect to experience many of them within their lifetimes. NorthAvenue takes the approach that asset allocation – having an appropriate amount of bonds and equities in a portfolio – is the best defense in a market downturn. This approach ensures that there are enough safe funds in bonds to supply client needs during the down turn, which eliminates the need to sell equities at their low point which would lock in permanent losses.
We are beginning to reach out to clients to schedule our end-of-year meetings to review their investments and net worth. Portfolio allocation will be an important topic of discussion at these meetings. However, please do not hesitate to reach out to discuss any questions or concerns prior to our scheduled meeting. We are here to help.
"Every election is determined by the people who show up." -Larry J. Sabato
National Voter Registration Day
Mark your calendars for this year’s National Voter Registration Day (NVRD) on September 24th, 2019.
According to NationalVoterRegistrationDay.org, “National Voter Registration Day is a national holiday celebrating our democracy. It was first observed in 2012 and has been growing in popularity every year since. Held on the fourth Tuesday of September, National Voter Registration Day will take place on September 24, 2019. The holiday has been endorsed by the National Association of Secretaries of State (NASS). It is further supported by the National Association of State Election Directors (NASED), the U.S. Election Assistance Commission (EAC), and the National Association of Election Officials (The Election Center).”
If you or someone you know is not yet registered to vote, you can visit NationalVoterRegistration.org to register. If you would like to find out more information about voter registration deadlines by state, voting locations and times, etc., click here.
Continuing Education
National Association of Personal Financial Advisors (NAPFA): MEWAs
T.J. and Martina recently attended a local study group for the National Association of Personal Financial Advisors (NAPFA), where Ron Mooney of RHK Group presented a relatively little-known health insurance option for small business owners called MEWAs, or Multiple Employer Welfare Arrangements.
Mooney shared that since a bill was passed in Ohio in 2015 expanding MEWA eligibility, trade associations and chambers of commerce have partnered with health insurance providers to offer health, dental, vision, and disability plans for employee groups of 1-50 people. Mooney said MEWAs offer a health insurance option for such groups as: businesses looking for an alternative to their current Affordable Care Act community-rated plans; retirees looking to start a business prior to Medicare eligibility; or those older than 65 who are still working and would like to postpone Medicare enrollment and keep funding their Health Savings Account.
The Big Table at OEC
Kendyl attended The Big Table community-wide conversation at The Ohio Environmental Council's office space recently. The Big Table, sponsored by The Columbus Foundation, brought together people of different backgrounds, interests, races, incomes, and neighborhoods to discuss this year's theme: the future of Columbus. In the spirit of being at the OEC, they discussed their hopes for the future of the environment and its community impact in central Ohio.
The Great Lakes State Getaway
Kristen & Chandler took a long weekend and visited Saugatuck, Michigan to bond as business partners and spend time with their partners, Jeff and Eric. They poked around the many local shops, ate brunch and too much pie, played scrabble, watched movies, and took a lovely afternoon boat ride.
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