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US consumer prices rise by most in 10 months

By WTOP Staff

CHRISTOPHER S. RUGABER
AP Economics Writer

WASHINGTON (AP) — Higher food and gas costs pushed up U.S. consumer prices in April by the most in 10 months, evidence that inflation is ticking up from very low levels.

The consumer price index rose 0.3 percent last month after a 0.2 percent gain in March, the Labor Department said Thursday. Over the past 12 months, prices have increased 2 percent, the largest gain since July and matching the Federal Reserve’s inflation target.

Excluding the volatile food and energy categories, core prices rose 0.2 percent in April and have risen 1.8 percent in the past 12 months.

Food prices jumped 0.4 percent for the third straight month, driven by the largest increase in the cost of meat in 10 years. Gas prices rose 2.3 percent, the first increase in four months.

The cost of fruits, vegetables and dairy products also rose. A drought in California and an excessively cold winter in the Midwest have pushed up food prices this year.

Prices in other sectors also rose. Rents increased 0.3 percent last month, and the prices of new and used cars rose. Air fares jumped 2.6 percent in April, the most in more than four years. The cost of clothes, furniture and haircuts were unchanged.

The mild increases follow two years of very low inflation. Consumer prices rose just 1.5 percent in 2013, down from 1.8 percent in 2012.

And on Wednesday, the government said the producer price index jumped in April by the most in 19 months. That index measures price changes before they reach consumers.

But small gains in inflation could be a sign of economic health. Higher inflation generally occurs when consumers and businesses spend more.

Inflation has been low partly because of sluggish growth and a tough job market, which makes it harder for retailers and other businesses to raise prices.

Super-low inflation can stall economic growth. Lower prices encourage consumers to delay purchases and they can also make inflation-adjusted interest rates higher, potentially discouraging borrowing.

Still, low inflation has enabled the Fed to pursue extraordinary stimulus programs in an effort to boost economic growth. It has begun to unwind some of its stimulus, cutting its monthly bond purchases to $45 billion from $85 billion last year. The bond purchases are intended to lower long-term interest rates.

But the Fed has kept the short-term interest rate it controls at nearly zero since December 2008. Higher inflation could raise pressure on the Fed to increase that rate earlier than it had planned.

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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