Why would an advisor have suggested an investment that's such a bad deal for you? Because it's a great deal for her. She's earning either an up-front commission or an annual fee on your investment. Talking you into making this poor choice would pay her at least $5,000 and probably more.
Q: I was excited to read about the public service debt forgiveness plan that Congress passed recently, but I can't seem to find any more information about it. How do I apply?
A: First, it's important to note that this program doesn't forgive your loans immediately. It will help you only after you make 10 years of payments into the federal government's Direct Loan program while working in a "qualifying" profession.
If you have loans with any other lender -- Sallie Mae, Nelnet, Wells Fargo or Bank of America, for example -- you need to first consolidate into a Direct Loan to make your payments count. To do that, go to the government's loan consolidation page (www.loanconsolidation.ed.gov) and fill out the application. You'll want to sign up for the income-contingent repayment plan, which is likely to give you the lowest monthly payment of the qualifying repayment plans available.
Next step: Make 120 payments while working for a qualifying employer.
What's a "qualifying" employer? The Department of Education has yet to come out with a specific list. But the legislation that authorized the plan says that all government jobs -- federal, state and local -- qualify. That includes those in the military; those working for police and fire departments; educators; social workers; public and school librarians; and those working in public health.
The Project on Student Debt (projectonstudentdebt.org) has information on this and on another recently authorized repayment plan that could provide help to highly indebted graduates. Those with heavy debt loads would be wise to check the site regularly for updates.
You can also check with the Department of Education's financial aid help line at 1-800-4-FED-AID.
Q: I recently left my job and was offered health insurance through COBRA, but I was horrified by the cost. It's about five times more than I was paying when employed. Is this my only option?
A: If you have been laid off, your employer is obligated to offer you the ability to maintain your insurance through the company's group health plan. However, they will no longer subsidize the cost, which is why you're seeing a huge increase.
The good news is that, if you're healthy, you can probably find affordable health insurance elsewhere. There are dozens of Web sites that will help you shop. Consider checking with eHealthInsurance.com if you want to shop without taking to a broker, and Insweb.com if you don't mind having a broker call.