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Poverty rate drops for the first time since 2006

By WTOP Staff

JESSE J. HOLLAND
Associated Press

WASHINGTON (AP) — The poverty rate in the United States has dropped for the first time since 2006, bringing a bit of encouraging news about the nation’s economy as President Barack Obama and Congress gear up for midterm elections.

The Census Bureau, in its annual look at poverty in the United States, said that the poverty rate in 2013 was 14.5 percent, down from 15 percent in 2012. The decrease in the poverty rate was attributed to the growth in year-round employment by 2.8 million jobs in the United States, government officials said.

White House officials cheered the positive information in the census release.

“There is reason to believe that this progress has continued into 2014, as the labor market has strengthened and millions have gained health insurance coverage,” said Jason Furman and Betsey Stevenson, members of the White House Council of Economic Advisers. “At the same time, the data also offer a clear illustration of the large amount of work that remains to strengthen the middle class in the wake of the worst recession since the Great Depression.”

The median household income for families was $65,587 in 2013, and $31,178 nonfamily households, which also was not statistically different from the 2012 levels. However, census officials said that income is 8 percent less than it was in 2007, the year before the United States entered the recession.

Officials also say that the number of children under 18 in poverty declined from the previous year for the first time since 2000.

The number of children in poverty dropped from 21.8 percent in 2012 to 19.9 percent in 2013, and the number of children in poverty also declined from 16.1 million to 14.7 million.

The official poverty level is based on a government calculation that includes only income before tax deductions. It excludes capital gains or accumulated wealth, such as home ownership. As a result, the rate takes into account the effects of some government benefits, such as unemployment compensation. It does not factor in noncash government aid such as tax credits and food stamps.

A family of four is considered to be living in poverty if it brings in less than $23,830 in a year. A person is considered to be living in poverty if he or she makes less than $11,890.

The report also said that Hispanics were the only major race or ethnic group to have a statistically significant change in their poverty rate and the number of people in poverty. In 2013, the poverty rate for Hispanics was 23.5 percent, a decrease from 2012’s 25.6 percent. And the number of Hispanics in poverty decreased from 13.6 million to 12.7 million. In addition, income for Hispanic households increased by 3.5 percent between 2012 and 2013.

The poverty rate for non-Hispanic whites was 9.6 percent in 2013, and there were 18.7 million non-Hispanic whites in poverty. The 2013 poverty rate was 27.2 percent for blacks and 10.5 percent for Asians, and there were 11 million blacks and 1.8 million Asians in poverty.

Asians had the highest median household income in 2013 at $67,065, followed by non-Hispanic whites at $58,270, Hispanics at $40,963 and blacks at $34,598.

Officials also said the percentage of people without health insurance coverage for the entire 2013 calendar year was 13.4 percent, which equaled 42 million people. Census officials said those numbers cannot be compared with previous year numbers because they changed the way they asked the question on their surveys.

Because the main coverage expansion under the Affordable Care Act didn’t take effect until 2014, the latest census numbers offer a baseline number of uninsured by which increased coverage and effectiveness of the law will be measured.

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Follow Jesse J. Holland on Twitter at http://www.twitter.com/jessejholland

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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