American Financial Benefits Center to Borrowers: There's More Than One Way to Use a Tax Refund

EMERYVILLE, Calif., February 26, 2018 (Newswire.com) - It’s tax season and for many Americans, that could mean a tax return. Many people consider getting a tax refund like getting a bonus: that extra income can go to anything. Of course, anytime extra money presents itself, student loan borrowers start debating about the best way to use it. While many financial blogs provide advice on where that money should go, it’s ultimately up to the borrower. American Financial Benefits Center (AFBC), a document preparation company that helps federal student loan borrowers apply for and navigate repayment plans, helps clients manage their loans so they can feel free to use that refund where they see the most value.

In 2017, about 80 percent of Americans received a tax refund. If that stays the same, a lot of individuals may currently be considering their options on how to use their refund. Financial experts may remind Americans that tax refunds are not actually extra money, but are rather income taxes unnecessarily paid to the government. They argue that by adjusting their withholdings, Americans can prevent overpaying on their taxes. However, most Americans like getting a refund each year. 

Using that refund to pay down student loans may be a good option for some borrowers, but it is not the only option.

Sara Molina, Manager at AFBC

“It’s exciting to get a tax refund, but that excitement dulls when the voice of reason chimes in about how you should use it,” said Sara Molina, Manager at AFBC. “Using that refund to pay down student loans may be a good option for some borrowers, but it is not the only option.”

Financial advice for student loan borrowers may include putting all extra income, including a tax refund, toward student loan debt. However, depending on the borrower’s whole financial situation, that might be an overly black-and-white strategy. For example, it may be assumed that student loan borrowers want to get rid of that debt as quickly as possible, but borrowers in income-driven repayment plans may not have that perspective. Instead, they may see more value in using that refund in other ways.

What else can student loan borrowers use the refund for? A recent survey may offer some options while illuminating some plans: According to the survey, 43 percent of Americans plan to put their tax refund in savings; 13 percent will buy a physical luxury; 13 will buy an experience, and 9 percent will fund a retirement plan. Student loan borrowers can join the 42 percent who plan to pay down debt with their refund, or they can save, invest, or treat themselves or their families. Alternatively, they may choose a combination of ways to direct the money.

“AFBC clients are enrolled in income-driven repayment plans that allow them to focus on other financial goals,” said Molina. “Therefore, they can use their tax refund, if they get one, toward those other goals or simply for fun.”

About American Financial Benefits Center

American Financial Benefits Center is a document preparation company that helps clients apply for federal student loan repayment plans that fit their personal financial and student loan situation. Through its strict customer service guidelines, the company strives for the highest levels of honesty and integrity.

AFBC is a member of the Association for Student Loan Relief (AFSLR), and each representative on the phone has received the Certified Student Loan Professional certification through the International Association of Professional Debt Arbitrators (IAPDA).

Contact

To learn more about American Financial Benefits Center, please contact:

American Financial Benefits Center

1900 Powell Street #600

Emeryville, CA 94608

1-800-488-1490

[email protected]

Source: American Financial Benefits Center