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Jobs Report Increases Chance of Another 2017 Rate Hike

By U.S. News & World Report

The U.S. economy added another 209,000 jobs in July, according to the latest employment report. With unemployment down to 4.3 percent and wages on the rise, the report has increased the chance of another Federal Reserve interest rate hike by the end of the year.

The 209,000 new jobs topped economists’ expectations of 183,000. The nation’s unemployment rate now stands at its lowest point in 16 years. Wage growth came in at 2.5 percent for the month.

“More people are coming into the labor force and finding jobs,” said Tony Bedikian, head of global markets for Citizens Bank. “It’s difficult to find anything really negative in the report.”

[See: 9 of the Market’s Best Growth Stocks.]

Stock investors seemed to like what they saw from the jobs market. The Standard & Poors 500 index opened higher by about 0.3 percent on Friday.

The market appears to be pricing in the prospect of additional rate hikes, although the July report didn’t necessarily make the decision a slam dunk for the Fed.

“The wage number — 2.5 — is respectable,” said Jack Ablin, CIO of BMO Wealth Management. “This [jobs report] does not give the Federal Reserve a clue one way or the other. It fits exactly into the trend.”

Ten-year and 30-year Treasury yields jumped to 2.262 and 2.838 percent on Friday morning, as bond investors adjusted to the possibility of another imminent rate hike. According to the CME FedWatch tool, the bond market is now pricing in a 50.4 percent probability of at least a 0.25 percent rate hike by the end of the year, up from a 46.8 percent chance a day ago. The current probability remains well below the 62.2 percent probability bond investors were pricing in one month ago.

Despite three rate hikes already in the past year, the current federal funds target rate of 1.0 to 1.25 percent remains historically low. Earlier this week, former Federal Reserve Chairman Alan Greenspan said the extended period of low interest rates has created a dangerous bubble in the bond market.

[See: 8 Tips for Bond Investors Watching Rising Rates.]

“We are experiencing a bubble, not in stock prices but in bond prices,” Greenspan said. He didn’t offer any predictions about when the bond bubble will burst but said a spike in interest rates would likely be bad news for the stock market as well.

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Jobs Report Increases Chance of Another 2017 Rate Hike originally appeared on usnews.com

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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