While government assistance is generally available to low-income families who are struggling, help for middle-class families is sometimes harder to come by. Many middle-class families also struggle with financial hardship in paying down debt and financing a college education despite a higher income. Financial help is available to middle-class families from the government and private assistance organizations. You can usually receive counseling for debt, help with payment plans, federal tax credits and low-interest loans to pay for college.
Debt Counseling Services
Middle-class families struggling with credit card, mortgage or car payment debts might need help paying these bills, especially if faced with job loss or other temporary hardship. Living on a budget and working with creditors are important initial steps, but for some families struggling with debt, these options might not be enough. Middle-class families in this tight situation can often benefit from credit counseling services. While it's important to use these services with caution, many reputable credit counseling services are available to provide financial help to families by working with their creditors and providing advice on creative options for getting out of debt.
Debt Management Plans
A credit counseling agency is often able to provide families with advice on developing a debt management plans. Debt management plans are structured payment arrangements between a debtor, a creditor and a credit counseling agency that can help families better meet their debt obligations. These programs can be very helpful for some families struggling with debt. It's important to be aware of the risks of debt management and make sure that a credit counselor is reputable and well recommended. Some credit counselors have been known to defraud consumers in the past, so it's worth double checking to make sure a potential counselor is legitimate.
Earned Income Tax Credit
The Earned Income Tax Credit is a federal benefit available to all low- and moderate-income taxpayers to help relieve the burden of income and Social Security taxes. In some cases, the EITC might provide a middle-class family with a tax return where they otherwise may not have received one. If eligible for the EITC, a household or individual may claim the credit on the federal income tax return. The EITC is only applied to "earned income," meaning income from employment or a small business. Interest, Social Security benefits, alimony, unemployment benefits and pensions are not earned income and cannot qualify for the credit.
Pell Grants and Stafford Loans
Some of the financial help available for middle-class families is intended to help reduce the cost of college. For many middle-class families with children, college can be a major expense even if they've saved for it. The federal government provides aid on a need basis to qualifying families. Families can use the Free Application for Federal Student Aid to determine their eligibility for both need-based grant and loan programs. The Pell Grant provides college assistance, which families are not obligated to pay back, though eligibility is limited to lower-income families. Stafford Loans -- low-interest or no-interest student loans -- are usually available to middle class families.
- Federal Trade Commission; Knee Deep in Debt; February 2011
- IRS.gov; EITC for Individuals; March 2011
- IRS.gov; What is Earned Income?; March 2010
- ED.gov; Federal Pell Grant Program; October 2010
- ED.gov; Direct Stafford Loans; June 2010
- Kestler Financial; Fact Sheet--Supporting Middle Class Families; March 2011
- The White House: Office of Management and Budget: Helping Middle Class Families Win the Future
- "AZCentral.com"; Middle Class Families Looking to Agencies for Help; Dianna M. Náñez; March 2009