For the reason that U. S. Team with Education views backlines colleges' as well as universities' eligibility intended for fed college student federal funding to the school's personal loan payment fee, a number of analysts reading the way in which great the college student personal loan default challenge will be as well as what may possibly happen if different college personal loan payment guidelines receive influence inside 2012 not surprisingly. Foreclosures on college funds could be scored inside a variety of tactics, yet just about the most popular actions with default is the endorsed cohort default fee, defined from the Team with Education for the reason that portion of a school's college personal loan debtors who enter payment on specific fed education funds "during a particular fed financial 12 months, Oct. one to be able to Sept. 40, as well as default and also match alternative given disorders before the conclusion from the next financial 12 months. "In alternative terms, the cohort default fee is the portion with debtors who enter payment on their particular fed funds and sometimes cease generating repayments on their particular college personal loan personal debt and also in no way produce repayments at all through 12-24 weeks immediately after entering payment.
College student Personal loan Default Prices vs. Payment Rates
Government analysts at this point desire to seem additional carefully not necessarily during schools' default prices on fed college funds yet during schools' payment prices on those funds. Buyer as well as college student recommend include prolonged argued that this cohort default fee, since now scored, significantly under represents the portion of a schools' individuals who are fighting college personal loan personal debt by simply considering simply a 24-month interval. The two-year bio, these types of experts retain, misses a large swath with individuals who are capable of litter via generating their particular repayments to the first several decades however commence defaulting from the 3 rd as well as fourth numerous years of their particular payment periods inside quicker volumes. The default fee in addition is not to take into account those individuals who aren't able to produce repayments on their particular college funds yet who are not accepted as from a technical perspective inside default due to the fact which they have set up for a college student personal loan personal debt direction plan that permits all of them to put away generating repayments on their particular fed college funds. Inside proposed guidelines that will control the school's eligibility intended for fed college student assist, the Team with Education would certainly consider the school's college student personal loan payment fee instead of easily its default fee, since current laws perform. By simply expanding its institutional federal funding eligibility guidelines to add college personal loan payment prices, the Education Team would certainly be checking out the amount of individuals easily are not trying to pay their particular college funds -- not alone keeping track of debtors that have defaulted, yet such as those debtors who are in a genuine deferred payment plan and also authorized forbearance interval which allows all of them to be able to temporarily forgo generating their particular fed college student personal loan repayments. The College student Personal loan Personal debt Challenge, since Scored by simply Payment Rates
Earlier this year, the Team with Education reported that this national cohort default fee ended up being 6 pct to the 2008 financial 12 months, the last 12 months for which payment info can be bought. Considering payment prices, on the other hand, although in addition expanding plenty of time course over which often college student personal loan payment will be scored, yields the much bigger non-payment fee amongst college student personal loan debtors as well as paints the truer photo from the dimension from the inability-to-repay challenge amongst personal loan debtors. The Team with Education shows that will last season, amongst alumni with arrest universities who brought fed college student personal loan personal debt, simply 54 pct of the people who had graduated and also left classes in the last several decades were inside payment on their particular fed student loans -- the much yowl from the 93-percent national non-default fee with 2008.
The four-year payment fee ended up being marginally better intended for individuals during exclusive nonprofit universities, during 56 pct. Perhaps incredibly, the payment fee amongst alumni with exclusive intended for revenue educational institutions ended up being greatly reduced -- just simply 36 pct over several decades. These types of stats occur from the different payment database that this Team with Education may use to be able to observe government-issued student loans, from the time frame they're released until plenty of time they're paid back. The database may also observe how are you affected involving. By simply searching additional meticulously during just about every loan's whole life-span, the Education Team dreams the database can help discover the place of which debtors first commence to demonstrate indicators with problem trying to pay their particular fed college funds.
Schools' College student Personal loan Challenges May possibly Imply Lack of Almost all Economic Aides the government's proposed federal funding guidelines are now worded, the fresh guidelines would certainly allow the Team with Education to be able to inflict federal funding constraints on educational institutions in whose total college student personal loan payment fee drops beneath 45 pct. Educational institutions that have the payment fee with lower than 35 pct would certainly deal with the loss of fed college student assist most of the time. While using Education Department's the year just gone info, over 1 / 2 from the degree organizations inside the nation would certainly deal with some form of fed college student personal loan sanctions in the event the proposed federal funding guidelines were inside influence nowadays, as well as 36 pct with post-secondary organizations will be barred through giving fed college student assist for a interval with a minimum of eighteen months. Even so, the proposed different Team with Education guidelines may also allow educational institutions to be able to survey college student personal loan payment prices on your own by simply plan. By simply segmenting out there payment prices by simply plan, organizations may possibly avoid school-wide fed federal funding sanctions, leaving behind intact fed college student assist intended for school programs in whose payment prices are from the set up guidelines, although still acquiring sanctions intended for programs in whose graduates regularly fail to produce repayments on their particular fed college funds. Student loans, college student personal loan default prices by simply classes, personal debt direction.
2011-04-30
How to Apply for Student Loans
hat do I mean by the best money? Well - there student loans, scholarships, fellowships, grants, and other forms of funds for college. It's really hard for the average high school student, parents, and college students to know where to find money for college beyond federal financial aid.
Any student who plans to apply for student loans should look into a comparison site. A site like offers "one-stop-shopping" for students in need of loans, grants, scholarships and all other forms of financial aid. Once a student fills out pertinent information about themselves, the degree they are seeking, and the school they plan to attend, they will receive a list of the best lenders for their needs as well as the ability to sift through a thousand scholarship sources and get lots of information about what they need to know about financial aid.
Students to know where to find money for college beyond federal financial aid.All students should fill out the FAFSA first before exploring alternate forms of funding for their education. That's the Free Application for Federal Student Aid. It's a long form and students need to have either their own income tax returns or their parent's, or both, to fill it out. But in the long run, it's worth it. It will tell a student exactly how much and what kind of federal loans and grants that student can get. Believe it or not, around 8 million eligible students each year fail to fill out the FAFSA.
This means that they are automatically ineligible for all federal grants and loans. students to know where to find money for college beyond federal financial aid.Federal loans for which students can apply fall into the category of Unsubsidized and Subsidized Stafford Loans. The interest rates on these are 4.5% for subsidized loans to 6.8% for unsubsidized loans. There's also the Federal PLUS loan for parents with an interest rate of 7.9%. These are all available directly through the federal government's Federal Direct Loan Program that was instituted on July 1, 2010. There are lots of good things to be said about federal student loans. The interest rate on a student's loan stays the same for the life of the loan.This is not necessarily true of private loans.Some private lenders advertise rates that look better than the rates for PLUS loans.
However, once the paperwork is done, parents may not qualify for those rates. Impeccable credit is a necessity for the best rates. This makes the PLUS loan a better option for parents who have a spotty credit record.Unlike some private loans, federal loans offer long repayment periods and are flexible. If a student cannot begin paying back college loans on time, federal loans offer either reduced payments or a deferment on payments before a student must start repayment of loans.On the other hand, federal aid does not necessarily cover all of a student's financial needs. That's when private student loans can come into play. Private loans are a great addition to federal loans but a student should always take the maximum money available from federal sources before they begin looking into private sources.
Any student who plans to apply for student loans should look into a comparison site. A site like offers "one-stop-shopping" for students in need of loans, grants, scholarships and all other forms of financial aid. Once a student fills out pertinent information about themselves, the degree they are seeking, and the school they plan to attend, they will receive a list of the best lenders for their needs as well as the ability to sift through a thousand scholarship sources and get lots of information about what they need to know about financial aid.
Students to know where to find money for college beyond federal financial aid.All students should fill out the FAFSA first before exploring alternate forms of funding for their education. That's the Free Application for Federal Student Aid. It's a long form and students need to have either their own income tax returns or their parent's, or both, to fill it out. But in the long run, it's worth it. It will tell a student exactly how much and what kind of federal loans and grants that student can get. Believe it or not, around 8 million eligible students each year fail to fill out the FAFSA.
This means that they are automatically ineligible for all federal grants and loans. students to know where to find money for college beyond federal financial aid.Federal loans for which students can apply fall into the category of Unsubsidized and Subsidized Stafford Loans. The interest rates on these are 4.5% for subsidized loans to 6.8% for unsubsidized loans. There's also the Federal PLUS loan for parents with an interest rate of 7.9%. These are all available directly through the federal government's Federal Direct Loan Program that was instituted on July 1, 2010. There are lots of good things to be said about federal student loans. The interest rate on a student's loan stays the same for the life of the loan.This is not necessarily true of private loans.Some private lenders advertise rates that look better than the rates for PLUS loans.
However, once the paperwork is done, parents may not qualify for those rates. Impeccable credit is a necessity for the best rates. This makes the PLUS loan a better option for parents who have a spotty credit record.Unlike some private loans, federal loans offer long repayment periods and are flexible. If a student cannot begin paying back college loans on time, federal loans offer either reduced payments or a deferment on payments before a student must start repayment of loans.On the other hand, federal aid does not necessarily cover all of a student's financial needs. That's when private student loans can come into play. Private loans are a great addition to federal loans but a student should always take the maximum money available from federal sources before they begin looking into private sources.
2011-04-29
How the Bad Economy Effects Your Student Loans
Financial is like a foundation for ours.
The faltering economy has had a ripple effect throughout the nation affecting everybody from Wall Street workers to coffee shop owners to students struggling with their student loans. Yes, unfortunately the bad economy means hard times for students too. However, understanding how a poor market effects student loans can help you better prepare for the crunch. The Economy and Private Student Loans
Private loans may have been hit the hardest by the falling economy and students will continue to have a tough time getting private loans.
According to FinAid.org, last year 36 lenders stopped writing private student loans. Those who are still offering student loans have become more selective - only lending to students with a clean credit history or a good cosigner. The crunch is especially affecting students headed towards community or technical colleges as private lenders are less willing to write short-term loans for one or two year programs.Interest Rates and Student LoansAn unstable economy has a bad effect on interest rates, which will in turn negatively effect students borrowing from private lenders.
Private lenders often base their interest rates on the LIBOR or London Inter-Bank Offered Rate. Private lenders and even Sallie Mae, the largest student loan lender in the nation, rely on the LIBOR for their interest rates. A change in the LIBOR can bump interest rates up as much as six or fourteen percent. As many private loans re-evaluate your interest rates on a monthly basis, a change in the economy can have a big effect on your student loans. The Economy and Federal Student LoansThe picture is brighter for federal student loans. About forty percent of federally backed loans come straight from the government.
The interest rates on these loans are fixed and these federally backed student loans shouldn't be affected by a tumultuous market. In fact, the government has taken action to help student aid in its Federal stimulus package. The American Recovery and Reinvestment Act helps college students by funding Pell Grants and offering education tax cuts. However, many federally backed loans are offered through private lenders, many of which are backing out of the student loan market. These loans could be harder for colleges to retain and offer.Understanding the Market and Student Loans
Many people facing a tough job market are considering going back to college to wait out the bad economy while they build their skill sets.
However, student loans may be harder to find as lenders have tightened their criteria and many have withdrawn from the market altogether. This doesn't mean college is out of reach. Research student loans to see what's still available - especially Federal loans as they continue to offer the lowest interest rates and are especially helpful for the financially needy.
The faltering economy has had a ripple effect throughout the nation affecting everybody from Wall Street workers to coffee shop owners to students struggling with their student loans. Yes, unfortunately the bad economy means hard times for students too. However, understanding how a poor market effects student loans can help you better prepare for the crunch. The Economy and Private Student Loans
Private loans may have been hit the hardest by the falling economy and students will continue to have a tough time getting private loans.
According to FinAid.org, last year 36 lenders stopped writing private student loans. Those who are still offering student loans have become more selective - only lending to students with a clean credit history or a good cosigner. The crunch is especially affecting students headed towards community or technical colleges as private lenders are less willing to write short-term loans for one or two year programs.Interest Rates and Student LoansAn unstable economy has a bad effect on interest rates, which will in turn negatively effect students borrowing from private lenders.
Private lenders often base their interest rates on the LIBOR or London Inter-Bank Offered Rate. Private lenders and even Sallie Mae, the largest student loan lender in the nation, rely on the LIBOR for their interest rates. A change in the LIBOR can bump interest rates up as much as six or fourteen percent. As many private loans re-evaluate your interest rates on a monthly basis, a change in the economy can have a big effect on your student loans. The Economy and Federal Student LoansThe picture is brighter for federal student loans. About forty percent of federally backed loans come straight from the government.
The interest rates on these loans are fixed and these federally backed student loans shouldn't be affected by a tumultuous market. In fact, the government has taken action to help student aid in its Federal stimulus package. The American Recovery and Reinvestment Act helps college students by funding Pell Grants and offering education tax cuts. However, many federally backed loans are offered through private lenders, many of which are backing out of the student loan market. These loans could be harder for colleges to retain and offer.Understanding the Market and Student Loans
Many people facing a tough job market are considering going back to college to wait out the bad economy while they build their skill sets.
However, student loans may be harder to find as lenders have tightened their criteria and many have withdrawn from the market altogether. This doesn't mean college is out of reach. Research student loans to see what's still available - especially Federal loans as they continue to offer the lowest interest rates and are especially helpful for the financially needy.
How to Find the Best Student Loan Around
A college education will almost always come with heavy financial burden. But behind this fact, it is good to know that there's financial help available, which can be utilized in order to stay in track; through the student loans. Student loans are designed for the purpose of assisting aspiring students financially in their college education.
Just like any loan, a student loan also follows the same principle of interest rates and payment obligations, and this is the reason why it is important to find the best student loan around in order to get the best deal among student loans, thus, the burden brought by the repayment obligations will be eased. Finding the best student loan will lead to favorable payment terms and lower interest rate so the repayment process will be easy in the future. In searching for the best student loan around, it is significant to know first the kinds of student loans offered in the financial aid industry in order to know what kind of student loan will fit in one's capabilities. Generally, there are three types of student loans: federal student loans, federal student loans provided by financial institutions and private student loans.
Firstly, federal student loans are loans provided by the government. It has a fixed interest rate and definitely lower than other student loans but nevertheless, application is hard due to strict requirements. On the other hand, federal student loans provided by financial institutions like banks and lenders have the same fixed interest rate as it is regulated by the government as well. It only differs from the regular federal loan in terms of the benefits provided by the lender. Oftentimes, lenders offer discount and cut rates on the federal student loan opted when a certain condition has been met like punctual payment process.
However, these benefits are usually not enjoyed by borrowers since punctual payment terms are very hard to maintain and some are also not aware of the mentioned benefits. And lastly, private student loans are the loans provided by financial institutions without the interference of the government. This means that the interest rate in private student loans is not fixed and may change any time. The interest rate is also higher than regular student loans but application is easy and the amount of money provided is relatively higher than other student loans.
Upon determining the best student loan appropriate for one's needs, it is important that students must first assess their preferences in a lot of the student loan details. Student loans differ in the terms and conditions imposed especially in the requirements.
Oftentimes, federal student loans have the most complicated requirements and if you have difficulty in securing these requirements, then the loan may not be appropriate for you. Aside from assessing the requirements, it is also recommendable to compare different loans from each other in order to know the best deal around.
Various lenders have different offers for their borrowers and it is good to take advantage of these offers. Remember that college education is a very important investment in a student's life, so don't forget to maximize all the available resources around in order to finance your education sufficiently!
Just like any loan, a student loan also follows the same principle of interest rates and payment obligations, and this is the reason why it is important to find the best student loan around in order to get the best deal among student loans, thus, the burden brought by the repayment obligations will be eased. Finding the best student loan will lead to favorable payment terms and lower interest rate so the repayment process will be easy in the future. In searching for the best student loan around, it is significant to know first the kinds of student loans offered in the financial aid industry in order to know what kind of student loan will fit in one's capabilities. Generally, there are three types of student loans: federal student loans, federal student loans provided by financial institutions and private student loans.
Firstly, federal student loans are loans provided by the government. It has a fixed interest rate and definitely lower than other student loans but nevertheless, application is hard due to strict requirements. On the other hand, federal student loans provided by financial institutions like banks and lenders have the same fixed interest rate as it is regulated by the government as well. It only differs from the regular federal loan in terms of the benefits provided by the lender. Oftentimes, lenders offer discount and cut rates on the federal student loan opted when a certain condition has been met like punctual payment process.
However, these benefits are usually not enjoyed by borrowers since punctual payment terms are very hard to maintain and some are also not aware of the mentioned benefits. And lastly, private student loans are the loans provided by financial institutions without the interference of the government. This means that the interest rate in private student loans is not fixed and may change any time. The interest rate is also higher than regular student loans but application is easy and the amount of money provided is relatively higher than other student loans.
Upon determining the best student loan appropriate for one's needs, it is important that students must first assess their preferences in a lot of the student loan details. Student loans differ in the terms and conditions imposed especially in the requirements.
Oftentimes, federal student loans have the most complicated requirements and if you have difficulty in securing these requirements, then the loan may not be appropriate for you. Aside from assessing the requirements, it is also recommendable to compare different loans from each other in order to know the best deal around.
Various lenders have different offers for their borrowers and it is good to take advantage of these offers. Remember that college education is a very important investment in a student's life, so don't forget to maximize all the available resources around in order to finance your education sufficiently!
2011-04-28
House Passes Bill on Deceased Students' Private Student Loans
Private student loans needs provide additional information to co-signers about their financial obligations on the student loans they co-sign following the death of the primary borrower.Private student loan issuers would also have to offer information to borrowers about filing a durable power of attorney (DPOA) nomination that would permit another person to make financial, legal, and medical decisions in the event of death or disability of the primary borrower while any of the borrower's private student loans remain open.
A Student Loan Bill With Its Roots in a Family Tragedy
This student loan protection act was sponsored by New Jersey Democratic Rep. John Adler and was named after Christopher Bryski, a 23-year old college graduate who suffered a serious brain injury in a 2003 accident and died in 2005, after spending two years in a persistent vegetative state. While in college, Bryski had taken out nearly $45,000 in private student loans, for which his father had co-signed. After Bryski's accident, his private college loans defaulted, and the lender sought repayment, along with interest, from Bryski's father.When a student borrower dies or becomes permanently disabled, the balance of any government-issued student loans the borrower had is typically discharged.
In the case of non-federal, private student loans, however, the lender will still seek repayment from the co-signer.The proposed law is not designed to force private lenders to discharge student loan debts for deceased borrowers, but rather to disclose the co-signer's responsibilities in case the borrower dies or becomes incapacitated while a student loan balance is outstanding. Co-signers guarantee loan repayment but often lack the legal standing to handle a primary borrower's finances should a borrower become incapacitated, as occurred in the Bryski case.The law would also require university financial aid offices to make similar disclosures to students who are applying for private student loans.Legislation Could Spur Borrowers to Seek Insurance Protections for Private Student Loans
Should the legislation pass both houses of Congress, it is likely to change the landscape for borrowers and co-borrowers when it comes to the repayment of private student loans.The bill carries no insurance provisions for student loans, but savvy co-borrowers may be more apt to look into student loan insurance plans, life insurance plans, and other financial protection strategies that could pay off the balance of the student loan if the borrower dies or becomes completely disabled, leaving substantial student loan debts.Life insurance will generally only pay off an insured borrower's private student loans if the borrower dies. However, disability insurance or student loan insurance packages could pay off outstanding college loans if the primary borrower defaults under other circumstances.
The new law would also require private lenders to offer entrance counseling to borrowers to encourage them to set up a DPOA. Borrowers would not be obligated to actually establish a DPOA or other advance directive, but advocates of the bill hope that the counseling requirement could open the door for better communication between lenders and borrowers, as well as between borrowers and co-signers.The bill now heads to the Senate, where Rep. Adler hopes to find both a sponsor and a receptive audience to the plight of families who may have to assume substantial student loan debt following the incapacity or death of a student borrower.Christopher Bryski Student Loan Protection Act, student loans, student loan debt help
A Student Loan Bill With Its Roots in a Family Tragedy
This student loan protection act was sponsored by New Jersey Democratic Rep. John Adler and was named after Christopher Bryski, a 23-year old college graduate who suffered a serious brain injury in a 2003 accident and died in 2005, after spending two years in a persistent vegetative state. While in college, Bryski had taken out nearly $45,000 in private student loans, for which his father had co-signed. After Bryski's accident, his private college loans defaulted, and the lender sought repayment, along with interest, from Bryski's father.When a student borrower dies or becomes permanently disabled, the balance of any government-issued student loans the borrower had is typically discharged.
In the case of non-federal, private student loans, however, the lender will still seek repayment from the co-signer.The proposed law is not designed to force private lenders to discharge student loan debts for deceased borrowers, but rather to disclose the co-signer's responsibilities in case the borrower dies or becomes incapacitated while a student loan balance is outstanding. Co-signers guarantee loan repayment but often lack the legal standing to handle a primary borrower's finances should a borrower become incapacitated, as occurred in the Bryski case.The law would also require university financial aid offices to make similar disclosures to students who are applying for private student loans.Legislation Could Spur Borrowers to Seek Insurance Protections for Private Student Loans
Should the legislation pass both houses of Congress, it is likely to change the landscape for borrowers and co-borrowers when it comes to the repayment of private student loans.The bill carries no insurance provisions for student loans, but savvy co-borrowers may be more apt to look into student loan insurance plans, life insurance plans, and other financial protection strategies that could pay off the balance of the student loan if the borrower dies or becomes completely disabled, leaving substantial student loan debts.Life insurance will generally only pay off an insured borrower's private student loans if the borrower dies. However, disability insurance or student loan insurance packages could pay off outstanding college loans if the primary borrower defaults under other circumstances.
The new law would also require private lenders to offer entrance counseling to borrowers to encourage them to set up a DPOA. Borrowers would not be obligated to actually establish a DPOA or other advance directive, but advocates of the bill hope that the counseling requirement could open the door for better communication between lenders and borrowers, as well as between borrowers and co-signers.The bill now heads to the Senate, where Rep. Adler hopes to find both a sponsor and a receptive audience to the plight of families who may have to assume substantial student loan debt following the incapacity or death of a student borrower.Christopher Bryski Student Loan Protection Act, student loans, student loan debt help
2011-04-14
Health Workers to Get Help With Student Loan Debt
The National Health Service Corps is accepting applications from primary medical care professionals who are willing to work in underserved areas in exchange for a reduction in their student loan debt.Through the NHSC student loan repayment program, you can receive up to $60,000 toward the balance on your student loans if you successfully complete the program's two-year service requirement.
Two-year half-time commitments are also being sought, in exchange for $30,000 in student loan debt reduction.
Clinicians willing to make a five-year commitment to the program can receive up to $170,000 in student loan debt relief. Eligible applicants who are willing to commit to six or more years of service are eligible to have the entire balance of all their federal student loans forgiven.The student loan debt relief offered by the NHSC repayment program applies to federal, state, local, and private student loans.Qualifying for the NHSC Student Loan Repayment ProgramIn order to qualify for repayment through the NHSC program, your student loans must have been taken out prior to your enrollment in the program. The program will not repay student loans that were not clearly used to pay for education or student loans that were not issued by a government or commercial lender (i.e., personal loans).
College loans that have already been repaid; parent loans, such as those issued under the federal PLUS parent loan program; personal lines of credit; residency relocation loans; and credit card balances are not eligible for repayment under the NHSC student loan debt relief program.In addition to offering student loan forgiveness to qualified applicants, the program also offers incentives for providers willing to work half-time in underserved areas, including more flexible student loan repayment terms and credits for teaching.Service is needed in extremely rural areas where primary medical care is otherwise unavailable and in more densely populated but underserved urban areas.
Qualifying primary care positions are also available at state and federal correctional institutions, community mental health facilities, Indian Health Service provider sites, hospital-affiliated primary care practices, public health programs, and community care facilities.The NHSC is actively seeking medical doctors, psychiatrists, licensed mental health counselors, dentists, physicians' assistants, and nurses. All licensed primary care providers, nurses, and mental health providers are eligible to participate in the student loan repayment program; however, if you opt to make a full-time commitment to the NHSC, you must not already be participating in another federal or state program, or have active or pending military duties that would prevent you from fulfilling your NHSC work commitments.Applying for the NHSC Student Loan Repayment ProgramTo get more information or apply for the NHSC student loan debt relief program, visit the NHSC website at http://nhsc.hrsa.gov/loanrepayment.
From the NHSC website, you can find out more about the agency, browse a database of program FAQs, and find open job positions in all 50Â states that are eligible for the student loan repayment program.About the National Health Service CorpsPart of the U.S. Department of Health & Human Services, the NHSC currently employs about 7,500 primary care providers at 10,000 sites around the United States. The NHSC expects to employ 11,000 health care professionals by the end of 2011 and 15,000 by the end of 2015.The student loan repayment program is funded by a nearly $300Â million appropriation from the Affordable Care Act.college loans, debt relief, National Health Service Corps student loan repayment program
Two-year half-time commitments are also being sought, in exchange for $30,000 in student loan debt reduction.
Clinicians willing to make a five-year commitment to the program can receive up to $170,000 in student loan debt relief. Eligible applicants who are willing to commit to six or more years of service are eligible to have the entire balance of all their federal student loans forgiven.The student loan debt relief offered by the NHSC repayment program applies to federal, state, local, and private student loans.Qualifying for the NHSC Student Loan Repayment ProgramIn order to qualify for repayment through the NHSC program, your student loans must have been taken out prior to your enrollment in the program. The program will not repay student loans that were not clearly used to pay for education or student loans that were not issued by a government or commercial lender (i.e., personal loans).
College loans that have already been repaid; parent loans, such as those issued under the federal PLUS parent loan program; personal lines of credit; residency relocation loans; and credit card balances are not eligible for repayment under the NHSC student loan debt relief program.In addition to offering student loan forgiveness to qualified applicants, the program also offers incentives for providers willing to work half-time in underserved areas, including more flexible student loan repayment terms and credits for teaching.Service is needed in extremely rural areas where primary medical care is otherwise unavailable and in more densely populated but underserved urban areas.
Qualifying primary care positions are also available at state and federal correctional institutions, community mental health facilities, Indian Health Service provider sites, hospital-affiliated primary care practices, public health programs, and community care facilities.The NHSC is actively seeking medical doctors, psychiatrists, licensed mental health counselors, dentists, physicians' assistants, and nurses. All licensed primary care providers, nurses, and mental health providers are eligible to participate in the student loan repayment program; however, if you opt to make a full-time commitment to the NHSC, you must not already be participating in another federal or state program, or have active or pending military duties that would prevent you from fulfilling your NHSC work commitments.Applying for the NHSC Student Loan Repayment ProgramTo get more information or apply for the NHSC student loan debt relief program, visit the NHSC website at http://nhsc.hrsa.gov/loanrepayment.
From the NHSC website, you can find out more about the agency, browse a database of program FAQs, and find open job positions in all 50Â states that are eligible for the student loan repayment program.About the National Health Service CorpsPart of the U.S. Department of Health & Human Services, the NHSC currently employs about 7,500 primary care providers at 10,000 sites around the United States. The NHSC expects to employ 11,000 health care professionals by the end of 2011 and 15,000 by the end of 2015.The student loan repayment program is funded by a nearly $300Â million appropriation from the Affordable Care Act.college loans, debt relief, National Health Service Corps student loan repayment program
2011-04-11
Graduate $200,000 Student Loan Debt
Kelli Space is just 23 years old and is already $200,000 in debt.The Northeastern University graduate figures that without help, she'll never be able to repay the nearly $190,000 in private student loans she owes to non-governmental private student loan companies and the additional $12,000 in federal student loans she owes to the U.S. Department of Education.
Space says she's already been turned down for student loan consolidation, and her current employment doesn't pay enough to allow her to repay her student loans.The Cost of College in Bad Choices and Student Loans Space readily admits that she made some bad decisions when it came to her college loans. She was the first in her family to attend college and didn't pay much attention to the spiraling cost of her student loans while she was incurring them.She was attending a private, out-of-state school whose annual cost is estimated to be nearly $50,000 for undergraduate studies, and tacked on costs for studying abroad for a year and summer classes. Space also admits that she realized her mistakes while she was still in school but didn't transfer to a less expensive institution. Her parents had initially planned to help with her college expenses, but Space's father was injured and has been unable to work for several years.
The end result was more than $200,000 in student loan debt, which Space says she's determined to repay one way or another. She's been making the monthly $891 payment on her private student loans but notes that the payment will rise to $1,600 a month beginning next year.Sallie Mae, her primary lender, won't consolidate her private student loans or allow her to move to an income-based repayment plan, so she's done what she can do: Set up a website soliciting donations to help repay her college loans.The site, TwoHundredThou.com, chronicles Space's troubles with student loans and is tracking progress on her debt reduction. To date, Space has received nearly $7,000 in donations, which she'll use to pay down her student loans.
She doesn't think she'll receive enough in donations to pay off her student loan debt altogether, but she says that she hopes to draw attention to the problems that she and many other new graduates face when it comes to repaying private student loans.Private student loans, unlike government-issued federal student loans, don't typically offer the same flexibility in repayment options or in setting up affordable repayment plans that take a borrower's income into account.College Financing Advice for Students From One Who's Been There Space advises high school and college students to get more financially savvy about the real cost of student loans and the interest those loans will accrue following graduation. Space also hopes that high schools, colleges, and universities will develop more intelligent ways of discussing student loan debt with students who have no 'family history' when it comes to attending college.Space believes that if she had developed a more realistic understanding of the process of paying for college while in high school, she may not have made the same mistakes.
Unfortunately, she says, there are few opportunities for high school teachers or guidance counselors to explain to college-bound students the impact that overwhelming student loan debt can have on their financial future.She says that if she could do it all over again, knowing what she knows now, she would have attended a community college for the first year or two, to save money on tuition costs, and then transferred to a four-year institution once she had determined a major. Then she would have used her major and the employment prospects for graduates in that field to help determine the amount of debt that she could reasonably take on in college loans.In the meantime, Space is sharing her parents' New Jersey home with no plans to move out and is working full-time for an Internet company in New York City. She says that she has little chance of declaring bankruptcy, but she doesn't want other students to make the same mistakes she did, and she hopes her website serves as a cautionary tale to students who are considering their options for college and for how to pay for college.Two Hundred Thou project, student loans, student loan repayment options
Space says she's already been turned down for student loan consolidation, and her current employment doesn't pay enough to allow her to repay her student loans.The Cost of College in Bad Choices and Student Loans Space readily admits that she made some bad decisions when it came to her college loans. She was the first in her family to attend college and didn't pay much attention to the spiraling cost of her student loans while she was incurring them.She was attending a private, out-of-state school whose annual cost is estimated to be nearly $50,000 for undergraduate studies, and tacked on costs for studying abroad for a year and summer classes. Space also admits that she realized her mistakes while she was still in school but didn't transfer to a less expensive institution. Her parents had initially planned to help with her college expenses, but Space's father was injured and has been unable to work for several years.
The end result was more than $200,000 in student loan debt, which Space says she's determined to repay one way or another. She's been making the monthly $891 payment on her private student loans but notes that the payment will rise to $1,600 a month beginning next year.Sallie Mae, her primary lender, won't consolidate her private student loans or allow her to move to an income-based repayment plan, so she's done what she can do: Set up a website soliciting donations to help repay her college loans.The site, TwoHundredThou.com, chronicles Space's troubles with student loans and is tracking progress on her debt reduction. To date, Space has received nearly $7,000 in donations, which she'll use to pay down her student loans.
She doesn't think she'll receive enough in donations to pay off her student loan debt altogether, but she says that she hopes to draw attention to the problems that she and many other new graduates face when it comes to repaying private student loans.Private student loans, unlike government-issued federal student loans, don't typically offer the same flexibility in repayment options or in setting up affordable repayment plans that take a borrower's income into account.College Financing Advice for Students From One Who's Been There Space advises high school and college students to get more financially savvy about the real cost of student loans and the interest those loans will accrue following graduation. Space also hopes that high schools, colleges, and universities will develop more intelligent ways of discussing student loan debt with students who have no 'family history' when it comes to attending college.Space believes that if she had developed a more realistic understanding of the process of paying for college while in high school, she may not have made the same mistakes.
Unfortunately, she says, there are few opportunities for high school teachers or guidance counselors to explain to college-bound students the impact that overwhelming student loan debt can have on their financial future.She says that if she could do it all over again, knowing what she knows now, she would have attended a community college for the first year or two, to save money on tuition costs, and then transferred to a four-year institution once she had determined a major. Then she would have used her major and the employment prospects for graduates in that field to help determine the amount of debt that she could reasonably take on in college loans.In the meantime, Space is sharing her parents' New Jersey home with no plans to move out and is working full-time for an Internet company in New York City. She says that she has little chance of declaring bankruptcy, but she doesn't want other students to make the same mistakes she did, and she hopes her website serves as a cautionary tale to students who are considering their options for college and for how to pay for college.Two Hundred Thou project, student loans, student loan repayment options
2011-04-10
GOP, Lobbyists Mount Criticism of Bill to Overhaul Student Loans
The Democratic-led House of Representatives, in a 253 to 171 vote on September 17, easily passed landmark legislation that would bring an end to the long-standing Federal Family Education Loan Program (FFELP), the program initiated by the Higher Education Act of 1965 to offer college students federally guaranteed student loans via private lenders.As the measure awaits a Senate vote scheduled for October 15, representatives for the FFELP student loan industry along with prominent Republicans have been stepping up their attack on the key mandates of the bill, which they say will not only cost students and schools the competitive pricing and choices in student loans offered by the private sector but will saddle taxpayers with billions of dollars in new costs. Federal Student Loans: FFELP vs. Direct Loans
Under the existing FFEL program, the government pays private FFELP lenders a subsidy for the federal student loans these lenders originate in essence, paying a third party to act as a middleman in issuing government student loans.
In 1992, the Clinton administration launched a second federal student loan program the Federal Direct Student Loan Program which issues federal college loans directly to borrowers through the U.S. Department of Education, with no third-party involvement from a bank or other FFELP lender.Should the House-approved bill, known as the Student Aid and Fiscal Responsibility Act of 2009 (SAFRA), pass the Senate and become law, the FFEL program will be dismantled and all federal student loans will become Federal Direct loans, made directly through the federal government rather than through third-party FFELP lenders and banks.Supporters of the legislation say that the elimination of FFELP subsidies will generate $87 billion in savings to taxpayers over the next decade. The bill allocates $80 billion of this estimated savings to expand the federal Pell Grant program for low-income college students and to fund several other education initiatives at what supporters say is no additional cost to taxpayers.President Obama has been a vocal backer of the bill, maintaining that FFELP subsidies funnel government money to banks and away from students.“Ending this unwarranted subsidy for big banks is a no-brainer for folks everywhere,” Obama said in a recent speech at Hudson Valley Community College in New York. Critics: Talk of Student Loan Savings Ignores Obvious CostsCritics of the SAFRA measure, however, are challenging this much-publicized $87 billion in savings” figure.
In a piece for The Hill, Representative John Kline from Minnesota, ranking Republican on the Education and Labor Committee, argued that the projected $87 billion in savings ignores long-term, standard risks, failing to allow for interest-rate fluctuations and default risks on college loans.The purported savings, holds Kline, "are in large measure actually new earnings the federal government will take in from student loan borrowers paying the government a higher interest rate than the government" cost of funds" ("Student Lending Faces Government Takeover," TheHill.com, Sept. 14, 2009).Since borrowers’ interest rates on federal parent and student loans are fixed, as market interest rates rise from their current recession lows, the government cost to fund direct student loans will rise while earned borrower interest remains the same meaning that the projected savings (that is, in Kline';s view, earnings) will shrink.The anticipated cash flows to the government on which the savings figure is based will also be much more constricted if defaults are higher than projected and default rates in the Federal Direct Student Loan Program will surge, say critics.
FFELP lenders have traditionally serviced a higher percentage of community college and career college students than the Direct Loan Program. These students tend toward higher default rates on their college loans, regardless of whether they are FFELP or Federal Direct borrowers. As the Education Department takes on more borrowers from community and career colleges, the argument goes, the Direct Loan Program will also be absorbing these borrowers’ higher tendency to default on their student loans, which would eat into the projected $87 billion.Additionally, Kline notes that the SAFRA bill only covers the cost of some of its proposed education spending for five years, after which taxpayers will be facing either program cuts or increased taxes in order to continue funding these new and expanded education initiatives. Moreover, Kline revealed in his piece for The Hill, the nonpartisan Congressional Budget Office has recently acknowledged that the proposed Pell Grant expansion will actually cost $11.4 billion more than originally projected an amount that isn't covered by the current $80 billion allocation within the student loan bill.
Under the existing FFEL program, the government pays private FFELP lenders a subsidy for the federal student loans these lenders originate in essence, paying a third party to act as a middleman in issuing government student loans.
In 1992, the Clinton administration launched a second federal student loan program the Federal Direct Student Loan Program which issues federal college loans directly to borrowers through the U.S. Department of Education, with no third-party involvement from a bank or other FFELP lender.Should the House-approved bill, known as the Student Aid and Fiscal Responsibility Act of 2009 (SAFRA), pass the Senate and become law, the FFEL program will be dismantled and all federal student loans will become Federal Direct loans, made directly through the federal government rather than through third-party FFELP lenders and banks.Supporters of the legislation say that the elimination of FFELP subsidies will generate $87 billion in savings to taxpayers over the next decade. The bill allocates $80 billion of this estimated savings to expand the federal Pell Grant program for low-income college students and to fund several other education initiatives at what supporters say is no additional cost to taxpayers.President Obama has been a vocal backer of the bill, maintaining that FFELP subsidies funnel government money to banks and away from students.“Ending this unwarranted subsidy for big banks is a no-brainer for folks everywhere,” Obama said in a recent speech at Hudson Valley Community College in New York. Critics: Talk of Student Loan Savings Ignores Obvious CostsCritics of the SAFRA measure, however, are challenging this much-publicized $87 billion in savings” figure.
In a piece for The Hill, Representative John Kline from Minnesota, ranking Republican on the Education and Labor Committee, argued that the projected $87 billion in savings ignores long-term, standard risks, failing to allow for interest-rate fluctuations and default risks on college loans.The purported savings, holds Kline, "are in large measure actually new earnings the federal government will take in from student loan borrowers paying the government a higher interest rate than the government" cost of funds" ("Student Lending Faces Government Takeover," TheHill.com, Sept. 14, 2009).Since borrowers’ interest rates on federal parent and student loans are fixed, as market interest rates rise from their current recession lows, the government cost to fund direct student loans will rise while earned borrower interest remains the same meaning that the projected savings (that is, in Kline';s view, earnings) will shrink.The anticipated cash flows to the government on which the savings figure is based will also be much more constricted if defaults are higher than projected and default rates in the Federal Direct Student Loan Program will surge, say critics.
FFELP lenders have traditionally serviced a higher percentage of community college and career college students than the Direct Loan Program. These students tend toward higher default rates on their college loans, regardless of whether they are FFELP or Federal Direct borrowers. As the Education Department takes on more borrowers from community and career colleges, the argument goes, the Direct Loan Program will also be absorbing these borrowers’ higher tendency to default on their student loans, which would eat into the projected $87 billion.Additionally, Kline notes that the SAFRA bill only covers the cost of some of its proposed education spending for five years, after which taxpayers will be facing either program cuts or increased taxes in order to continue funding these new and expanded education initiatives. Moreover, Kline revealed in his piece for The Hill, the nonpartisan Congressional Budget Office has recently acknowledged that the proposed Pell Grant expansion will actually cost $11.4 billion more than originally projected an amount that isn't covered by the current $80 billion allocation within the student loan bill.
2011-04-09
Getting To Know Federal Student Loan Consolidation Rates
Presently, students are paying so much attention to Federal student loan consolidation and they apply each year for the information associating with this burning subject. When they graduate from college or university or after having dropped their status from full time to part time, it is time for them to make arrangements to pay their loans back.Besides, Federal student loans can be dependent on consolidation programs that will help them pay back those loans without getting a great negative impact on the monthly budget. Nevertheless, a significant amount of students are still unacquainted with various subtopics regarding federal student loan consolidation and Federal student loan consolidation programs can be puzzling. Therefore we would like to share with them our knowledge and provide them more practical and standard responses that go along with the frequently asked questions.
Although the concept of federal student loan consolidation is not new, it is difficult to make it clear. This type of loan consolidation provide loans programs to college bound students that meet the qualifications to assist those in taking little interest rate financing that they may not otherwise be able to have.As for federal student loans, there are a great amount of programs that are based on the students family income and the ability of the student to get a sufficient co-signer. The interest rates for these programs are controlled well in advance by the federal government and those rates are posted on a government website and in the agencies of concerned loaners. As for little income families the government offers subsidized student loans which mean that the government pays the interest on the loans while the student is in school and then the student becomes responsible upon graduation or when they change their status from full time to part time. Then why would student consolidate federal student loans? There are plentiful reasons why you would consider this is not always based on the total rule of the loan but rather on the least number monthly that the bank is ready to accept.
For instance, a $20,000 student loan may call for a $200 a month minimum payment. If you have multiple $20,000 loans then the monthly payments start to add up. Consolidating those loans helps reduce the monthly minimum payment dramatically. If you got five $20,000 loans separately you would pay $1,000 per month in the least payments. But a consolidation loan of $100,000 would only cost you $500 a month. The savings, as you may see, are astonishing.Other advantage students would take when consolidating federal student loans is that this type of loan consolidation programs could potentially offer you a lower interest rate on your debt compared with the rate you agreed to when you got your loans while in school. Reducing your interest rate by just a single point on $100,000 worth of student loans can preserve you thousands of dollars in interest payments during the term of the loan. A lower interest rate can save you on your monthly responsibility as well.Since consolidating student loans is a good idea, the question is that whether consolidating is difficult or not? Simply answer, federal student loan consolidation is maybe one of the simplest and the best main financial transactions you will ever complete in your life. All you need to do is get in touch with your loaner and tell them that you desire to discuss consolidating your federal student loans and that will get the process started.
The application procedure is easy and getting accepted is simple,too.Make sure you do not wait. Your federal student loans own a grace period that allows you time after graduation, or when you drop your status to part time, to find employment. After that grace period you need to start paying back your federal student loans and after the it is over you no more get the choice of consolidating your federal student loans. So contact your lender as soon as possible to get the process started and take yourself on your way to financial responsibility.Update what is happening with Federal student loan consolidation in student loan consolidation rates and you can make sure to get the very best information in our articles.
Although the concept of federal student loan consolidation is not new, it is difficult to make it clear. This type of loan consolidation provide loans programs to college bound students that meet the qualifications to assist those in taking little interest rate financing that they may not otherwise be able to have.As for federal student loans, there are a great amount of programs that are based on the students family income and the ability of the student to get a sufficient co-signer. The interest rates for these programs are controlled well in advance by the federal government and those rates are posted on a government website and in the agencies of concerned loaners. As for little income families the government offers subsidized student loans which mean that the government pays the interest on the loans while the student is in school and then the student becomes responsible upon graduation or when they change their status from full time to part time. Then why would student consolidate federal student loans? There are plentiful reasons why you would consider this is not always based on the total rule of the loan but rather on the least number monthly that the bank is ready to accept.
For instance, a $20,000 student loan may call for a $200 a month minimum payment. If you have multiple $20,000 loans then the monthly payments start to add up. Consolidating those loans helps reduce the monthly minimum payment dramatically. If you got five $20,000 loans separately you would pay $1,000 per month in the least payments. But a consolidation loan of $100,000 would only cost you $500 a month. The savings, as you may see, are astonishing.Other advantage students would take when consolidating federal student loans is that this type of loan consolidation programs could potentially offer you a lower interest rate on your debt compared with the rate you agreed to when you got your loans while in school. Reducing your interest rate by just a single point on $100,000 worth of student loans can preserve you thousands of dollars in interest payments during the term of the loan. A lower interest rate can save you on your monthly responsibility as well.Since consolidating student loans is a good idea, the question is that whether consolidating is difficult or not? Simply answer, federal student loan consolidation is maybe one of the simplest and the best main financial transactions you will ever complete in your life. All you need to do is get in touch with your loaner and tell them that you desire to discuss consolidating your federal student loans and that will get the process started.
The application procedure is easy and getting accepted is simple,too.Make sure you do not wait. Your federal student loans own a grace period that allows you time after graduation, or when you drop your status to part time, to find employment. After that grace period you need to start paying back your federal student loans and after the it is over you no more get the choice of consolidating your federal student loans. So contact your lender as soon as possible to get the process started and take yourself on your way to financial responsibility.Update what is happening with Federal student loan consolidation in student loan consolidation rates and you can make sure to get the very best information in our articles.
2011-04-08
Getting Through College Without Student Loans
According to statistics compiled by the U.S.
Department of Education, two-thirds of college students today leave their alma mater with debt from student loans, and the average student loan debt amount among these graduates is a startling $23,186.These student debt numbers go hand in hand with reports from the College Board that four-year public colleges and universities now charge, on average, about $7,600 in annual tuition and fees to in-state undergraduate students and nearly $12,000 a year to out-of-state students. Private non-profit four-year colleges and universities average more than twice that, costing students about $27,300 a year in tuition and fees.With the average tuition cost of a four-year degree running between $36,000 and $108,000 and that's without counting non-tuition college costs like room and board, textbooks, transportation, and living expenses it's easy to understand why student loans have become such a common piece of a student's financial aid package.An increasing number of students who graduate with college loans, however, are finding it difficult to repay their student loan debt. Department of Education statistics show that nationally, about 7 percent of borrowers who entered repayment on their federal education loans in 2008 defaulted within the first year of repayment, and nearly 14 percent have defaulted within three years. (2008 is the last full year for which student loan default statistics are available.)As consumer and student advocacy groups like The Project on Student Debt and the Institute for College Access & Success call attention to the spreading problem of ballooning student loan debt, spiking default rates, and the growing number of recent graduates who find themselves in need of debt help, some students are looking for ways to pay for college without taking on debt from school loans.Graduating from college debt-free is certainly possible, but it can require some careful planning, creative financing, and potentially some adjustments in your college plans.
1) Pay as You GoIf your school offers tuition payment plans, consider eschewing student loans in favor of a "pay-as-you-go" model. By taking advantage of a school payment plan, you can pay for college in smaller installments, rather than as one big chunk all at once.Many colleges and universities now offer monthly payment plans that allow you to spread out the cost of your tuition and fees over the course of the semester and pay for your college costs in monthly installments. You may be charged a small one-time or monthly fee when you opt for a tuition payment plan, but once you've earned your degree, you'll be able to leave school with no student loan debt.
2) Scholarships & Grants Spend some time each month searching for college scholarships and grants. There are several online scholarship search engines that allow you to search databases of awards for free. Scholarships and grants provide "free money" for college that, unlike student loans, you won't need to pay back.With the millions of private and public scholarship programs available, application deadlines fall year-round. To maximize the number of awards you can apply for, make sure to search continually throughout the year and not just during the summer, right before tuition bills come due and when your competition will be steepest.
3) Refusing Student Loans Awards To qualify for federal grants, you'll need to apply for federal college financial aid each year. When you apply for federal student aid, you're likely to be awarded federal student loans as well.
Know that you're not required to accept any student loans you're offered. When you receive your financial aid package from your school, you can simply accept those awards you want grants, scholarships, work-study and refuse the loans you don't.Just keep in mind that refusing your federal college loans can have its drawbacks. Since federal student aid funds are limited and are often distributed on a first-come, first-served basis, once rejected, a school loan may not be available to you later that semester or year. If you run into a situation where you're looking for financial aid mid-semester because expected scholarships or a part-time job didn't materialize or you're saddled with unexpected expenses and suddenly don't have enough cash to make your monthly tuition payment, the federal loans you rejected at the beginning of the semester may no longer be available to you if you decide later on that you need them.
4) Avoiding Private Student Loans
In an emergency situation, if you need money for college and your federal loan options have dried up, you can still opt to take on private student loans to cover any remaining college costs you have. Private student loans are non-federal, credit-based loans issued by banks, credit unions, and other private lenders rather than by the government.Private student loans don't have the advantages of a fixed interest rate or the flexible repayment options that federal student loans do, but private loans are generally available year-round, as long as you qualify for the loan. However, given their often pricier and riskier terms, private loans should be used only as a last resort, when savings, scholarships, and federal college loans aren't enough to cover your college costs.
5) Cutting College Costs
Reducing your cost of attending college will also reduce your need for financial aid and college loans. To save thousands of dollars on your college bill, consider attending a two-year community college before transferring to a four-year institution to complete your degree.Your diploma will still carry the name of the four-year school you finish at, but you'll have saved two years' worth of higher tuition and fees. The average annual cost of a two-year public college is about $2,700, a significant savings over the $7,600 in-state rate at a four-year public institution, not to mention over the $12,000 out-of-state rate.
If spending a full two years at a community college doesn't appeal to you but you still want to minimize the possibility of needing school loans, you can compromise by taking at least some basic classes and required survey courses inexpensively at a community college and then transferring those credits to your four-year institution. If you're considering this approach, make sure you work closely with academic advisors at both schools to ensure that all the credits you earn as a commuter student at the community college will be applied to your primary four-year degree program.college loans, college scholarships, debt help
Department of Education, two-thirds of college students today leave their alma mater with debt from student loans, and the average student loan debt amount among these graduates is a startling $23,186.These student debt numbers go hand in hand with reports from the College Board that four-year public colleges and universities now charge, on average, about $7,600 in annual tuition and fees to in-state undergraduate students and nearly $12,000 a year to out-of-state students. Private non-profit four-year colleges and universities average more than twice that, costing students about $27,300 a year in tuition and fees.With the average tuition cost of a four-year degree running between $36,000 and $108,000 and that's without counting non-tuition college costs like room and board, textbooks, transportation, and living expenses it's easy to understand why student loans have become such a common piece of a student's financial aid package.An increasing number of students who graduate with college loans, however, are finding it difficult to repay their student loan debt. Department of Education statistics show that nationally, about 7 percent of borrowers who entered repayment on their federal education loans in 2008 defaulted within the first year of repayment, and nearly 14 percent have defaulted within three years. (2008 is the last full year for which student loan default statistics are available.)As consumer and student advocacy groups like The Project on Student Debt and the Institute for College Access & Success call attention to the spreading problem of ballooning student loan debt, spiking default rates, and the growing number of recent graduates who find themselves in need of debt help, some students are looking for ways to pay for college without taking on debt from school loans.Graduating from college debt-free is certainly possible, but it can require some careful planning, creative financing, and potentially some adjustments in your college plans.
1) Pay as You GoIf your school offers tuition payment plans, consider eschewing student loans in favor of a "pay-as-you-go" model. By taking advantage of a school payment plan, you can pay for college in smaller installments, rather than as one big chunk all at once.Many colleges and universities now offer monthly payment plans that allow you to spread out the cost of your tuition and fees over the course of the semester and pay for your college costs in monthly installments. You may be charged a small one-time or monthly fee when you opt for a tuition payment plan, but once you've earned your degree, you'll be able to leave school with no student loan debt.
2) Scholarships & Grants Spend some time each month searching for college scholarships and grants. There are several online scholarship search engines that allow you to search databases of awards for free. Scholarships and grants provide "free money" for college that, unlike student loans, you won't need to pay back.With the millions of private and public scholarship programs available, application deadlines fall year-round. To maximize the number of awards you can apply for, make sure to search continually throughout the year and not just during the summer, right before tuition bills come due and when your competition will be steepest.
3) Refusing Student Loans Awards To qualify for federal grants, you'll need to apply for federal college financial aid each year. When you apply for federal student aid, you're likely to be awarded federal student loans as well.
Know that you're not required to accept any student loans you're offered. When you receive your financial aid package from your school, you can simply accept those awards you want grants, scholarships, work-study and refuse the loans you don't.Just keep in mind that refusing your federal college loans can have its drawbacks. Since federal student aid funds are limited and are often distributed on a first-come, first-served basis, once rejected, a school loan may not be available to you later that semester or year. If you run into a situation where you're looking for financial aid mid-semester because expected scholarships or a part-time job didn't materialize or you're saddled with unexpected expenses and suddenly don't have enough cash to make your monthly tuition payment, the federal loans you rejected at the beginning of the semester may no longer be available to you if you decide later on that you need them.
4) Avoiding Private Student Loans
In an emergency situation, if you need money for college and your federal loan options have dried up, you can still opt to take on private student loans to cover any remaining college costs you have. Private student loans are non-federal, credit-based loans issued by banks, credit unions, and other private lenders rather than by the government.Private student loans don't have the advantages of a fixed interest rate or the flexible repayment options that federal student loans do, but private loans are generally available year-round, as long as you qualify for the loan. However, given their often pricier and riskier terms, private loans should be used only as a last resort, when savings, scholarships, and federal college loans aren't enough to cover your college costs.
5) Cutting College Costs
Reducing your cost of attending college will also reduce your need for financial aid and college loans. To save thousands of dollars on your college bill, consider attending a two-year community college before transferring to a four-year institution to complete your degree.Your diploma will still carry the name of the four-year school you finish at, but you'll have saved two years' worth of higher tuition and fees. The average annual cost of a two-year public college is about $2,700, a significant savings over the $7,600 in-state rate at a four-year public institution, not to mention over the $12,000 out-of-state rate.
If spending a full two years at a community college doesn't appeal to you but you still want to minimize the possibility of needing school loans, you can compromise by taking at least some basic classes and required survey courses inexpensively at a community college and then transferring those credits to your four-year institution. If you're considering this approach, make sure you work closely with academic advisors at both schools to ensure that all the credits you earn as a commuter student at the community college will be applied to your primary four-year degree program.college loans, college scholarships, debt help
2011-04-07
Finding Student Loans To Fund Your College Education
A student who is awarded one of the direct student loans needs to be attending a school that participates in the Direct Loan Program.That student must first complete a FAFSA, and then he or she must sign a master promissory note (MPN). If the loan recipient then needs to talk with a counselor about the loan, those services can be obtained at the Direct Loan Servicing Site.Services Available to Holders of the Direct Student LoansAt the Direct Servicing site, the holder of a direct loan can set-up an account. Using that account the holder of a direct student loan can view the record of his or her payments.
That site also contains records on the balance owing for each of the many student loans. Anyone who has been awarded one of the direct student loans can use the Service Center to request use of electronic correspondence for the sending of bills and other information. Loan payments can be made free of charge from the Service Site.Payments for any of the student loans can be scheduled as much as 6 months ahead of time. The Various Types of Direct Student Loans
Some students with a direct loan have a subsidized Stafford Loan. The subsidized loan has an interest subsidy. All students awarded those direct loans can count on the government to cover their interest payments while they are still in school.. Not all Stafford Loans are student loans, and not all direct student loans are subsidized. Where students do not show tremendous need, the government might award an unsubsidized Stafford Loan.Such unsubsidized loans do not come with an interest subsidy. PLUS Loans represent a third type of direct student loan. PLUS loans are low interest loans for graduate students and parents. As with the other student loans, the application for the PLUS Loans entails submission of a FAFSA and a MPN. Factors That Determine the Size of the Direct Student Loans
Not every student who receives one of the direct student loans gets the same amount of money. The amount of money awarded to the recipient of a student loan depends on three different factors. The school costs will dictate to a large extent the size of the student loan. The government will also adjust its loan amount to account for any other aid that a student might expect to receive.
Finally, the distribution of funds for the direct student loans depends on the expected contributions from each student's family. After the Department of Education has examined those three factors, then it will provide a needy student with funds that should adequately cover his or her tuition costs.Most students can get-by with loans of $8,000; they then obtain added money from additional on and off-campus sources.
That site also contains records on the balance owing for each of the many student loans. Anyone who has been awarded one of the direct student loans can use the Service Center to request use of electronic correspondence for the sending of bills and other information. Loan payments can be made free of charge from the Service Site.Payments for any of the student loans can be scheduled as much as 6 months ahead of time. The Various Types of Direct Student Loans
Some students with a direct loan have a subsidized Stafford Loan. The subsidized loan has an interest subsidy. All students awarded those direct loans can count on the government to cover their interest payments while they are still in school.. Not all Stafford Loans are student loans, and not all direct student loans are subsidized. Where students do not show tremendous need, the government might award an unsubsidized Stafford Loan.Such unsubsidized loans do not come with an interest subsidy. PLUS Loans represent a third type of direct student loan. PLUS loans are low interest loans for graduate students and parents. As with the other student loans, the application for the PLUS Loans entails submission of a FAFSA and a MPN. Factors That Determine the Size of the Direct Student Loans
Not every student who receives one of the direct student loans gets the same amount of money. The amount of money awarded to the recipient of a student loan depends on three different factors. The school costs will dictate to a large extent the size of the student loan. The government will also adjust its loan amount to account for any other aid that a student might expect to receive.
Finally, the distribution of funds for the direct student loans depends on the expected contributions from each student's family. After the Department of Education has examined those three factors, then it will provide a needy student with funds that should adequately cover his or her tuition costs.Most students can get-by with loans of $8,000; they then obtain added money from additional on and off-campus sources.
2011-04-06
Federal Student Loans, Phenomenon currency for the student's needs
There are lots of hassles for the students while studying. The hassles may be in these statuses like paying the tuition or examination fee, hostel charges, library bills, buying important books and computer which has become the essential ingredient of the modern education.
For all these education issues the students always need cash to avert them. The students can easily apply for Federal Student Loans which is up-to-date to execute education needs. These sorts of loans offer the amount to the students who are residing in the U.S. These loans let students to procure a loan with common interest and a government guarantee. The most popular thing of these loans is that the students don't need to request to their family members or relative for co-signer or collateral to submit against the loan amount.
When the student derives a Federal Student Loan, he has an essential bonus of this loan, is assure of an in school interest subsidy which means that the federal government reimburses the interest rate on the loan while the student is studying. The government also reimburses that interest for the duration of the half-year after the loan recipient is out of school. Federal Student Loans are obtainable in manifold loans for the students. The students who are keen to possess Perkins loans, the amount of Perkins loans will be conceded on his/her selected school since the school transactions the currency to the student's account in the form of a credit. The students covet to go for the Stafford loan which is extreme advantageous because Stafford loans are provided directly through department of the education. These types of loans are bestowed to the students in the student's own name. Stafford loans are hassle free from no credit check.
Hence, the students don't need to anxious for the co-signer to obtain cash for graduate school. The rate of interest is very low for this loan, and refund is postponed for half-year until you depart school or drop below half-time enrollment. Student Loans are gone back by the federal government and have fixed interest rates. The students who have done 10th and 12th and covet to be graduated, direct student loans are the best loans which are granted directly to the students by the U.S. Department of Education.
The students crave to apply for direct student loans; they have to execute a Free Application for Federal Student Aid (FAFSA) with all required information and documentation as well, the students will also have to execute a Master Promissory Note (MPN) that is an essential document that makes clear the deal between the students and the Department of education.
For all these education issues the students always need cash to avert them. The students can easily apply for Federal Student Loans which is up-to-date to execute education needs. These sorts of loans offer the amount to the students who are residing in the U.S. These loans let students to procure a loan with common interest and a government guarantee. The most popular thing of these loans is that the students don't need to request to their family members or relative for co-signer or collateral to submit against the loan amount.
When the student derives a Federal Student Loan, he has an essential bonus of this loan, is assure of an in school interest subsidy which means that the federal government reimburses the interest rate on the loan while the student is studying. The government also reimburses that interest for the duration of the half-year after the loan recipient is out of school. Federal Student Loans are obtainable in manifold loans for the students. The students who are keen to possess Perkins loans, the amount of Perkins loans will be conceded on his/her selected school since the school transactions the currency to the student's account in the form of a credit. The students covet to go for the Stafford loan which is extreme advantageous because Stafford loans are provided directly through department of the education. These types of loans are bestowed to the students in the student's own name. Stafford loans are hassle free from no credit check.
Hence, the students don't need to anxious for the co-signer to obtain cash for graduate school. The rate of interest is very low for this loan, and refund is postponed for half-year until you depart school or drop below half-time enrollment. Student Loans are gone back by the federal government and have fixed interest rates. The students who have done 10th and 12th and covet to be graduated, direct student loans are the best loans which are granted directly to the students by the U.S. Department of Education.
The students crave to apply for direct student loans; they have to execute a Free Application for Federal Student Aid (FAFSA) with all required information and documentation as well, the students will also have to execute a Master Promissory Note (MPN) that is an essential document that makes clear the deal between the students and the Department of education.
2011-04-05
Federal Student Loans Free Significant Tip
If you are searching for information related to Federal Student Loans or any other such as FSA Federal Student Aid, FAFSA Correction, How Do I Get A Student Loan With Bad Credit?, Private Student Loans No Cosigner, Guaranteed Private Student Loans or Federal Student Loan Govern you have come to the right article. This piece will provide you with not just general Federal Student Loans information but also specific and helpful information. Enjoy it. You should also be looking at the interest rate, the lower the better. Furthermore, take the time to sit down and make a personal budget. This will assist you in avoiding the instance of borrowing more than you can handle. You may find that you do not have the ability to pay the loan back, if you borrow too much on the student loan.
Once you have a student loan, you have its monthly payments to take care of, and other bills to be paid too. It's when you have less of an income, and more expenditure that you end in debt, and it is then that you are most likely to consider student loan debt consolidation.
What are your living expenses? This question involves making a budget that includes all the expenses you incur on a monthly basis. Included in this should be rent, utilities, car payments, insurance, gas, food, child care if needed, other loan payments and any expense that you think you might need on a monthly basis. You'll then need to multiple your monthly budget by the number of months in the school year, usually nine, and then add in the costs of tuition and other colleges related fees. This will give you a good idea of the total financing you'll need for the year.
I hope you are enjoying this article so far. It should prove very helpful whether your actual query is about Federal Student Loans or any other related other related FAFSA Direct Loan, Department Of Education FAFSA, CIBC Student Loans, Governmental Loans, National Student Loan Services and Newfoundland Student Loans information. Read on. For many students, student loans are sought at the start of their college career.
Most students do work in a part-time job; however, this is not always enough to cover the many expenses of college. With student loans, the student can keep their attention on things such as studies and classes, without having to worry about many expenses. The great thing about student loans is that for the entire time you are in college full-time, the loan will not need to be repaid until you have finished college for good and graduated in your degree. You may assume that a credit card can provide more flexibility but though this is true, flexibility is overrated. For someone who is just starting to be independent, getting hold of your own finances can be very difficult. Credit Cards flexibility and the possibility of paying only the minimum payments are too tempting for young people who can easily lose control over their finances.
I know that as informative as this article is, it might not adequately cover your Federal Student Loans quest. If this is so, don't forget that the search engines like Dogpile.com exist for looking up more information about Federal Student Loans. To consolidate student loans, you should know that it usually takes place during your grace period. At this moment, the lower in-school interest rate will then be applied to estimate the weighted average fixed rate to consolidate student loans. And once the grace period has ended on your government student loans, the higher in-repayment interest rate will be applied to estimate the weighted average fixed rate.
Given such process, it is then understandable that your fixed interest rate for government student loan consolidation will be higher if you consolidate student loans after your grace period. Many people looking for information about Federal Student Loans also looked online for Affinity Direct Student Loan, Refinance Private Student Loans, and even College Rocket Student Loans.
Once you have a student loan, you have its monthly payments to take care of, and other bills to be paid too. It's when you have less of an income, and more expenditure that you end in debt, and it is then that you are most likely to consider student loan debt consolidation.
What are your living expenses? This question involves making a budget that includes all the expenses you incur on a monthly basis. Included in this should be rent, utilities, car payments, insurance, gas, food, child care if needed, other loan payments and any expense that you think you might need on a monthly basis. You'll then need to multiple your monthly budget by the number of months in the school year, usually nine, and then add in the costs of tuition and other colleges related fees. This will give you a good idea of the total financing you'll need for the year.
I hope you are enjoying this article so far. It should prove very helpful whether your actual query is about Federal Student Loans or any other related other related FAFSA Direct Loan, Department Of Education FAFSA, CIBC Student Loans, Governmental Loans, National Student Loan Services and Newfoundland Student Loans information. Read on. For many students, student loans are sought at the start of their college career.
Most students do work in a part-time job; however, this is not always enough to cover the many expenses of college. With student loans, the student can keep their attention on things such as studies and classes, without having to worry about many expenses. The great thing about student loans is that for the entire time you are in college full-time, the loan will not need to be repaid until you have finished college for good and graduated in your degree. You may assume that a credit card can provide more flexibility but though this is true, flexibility is overrated. For someone who is just starting to be independent, getting hold of your own finances can be very difficult. Credit Cards flexibility and the possibility of paying only the minimum payments are too tempting for young people who can easily lose control over their finances.
I know that as informative as this article is, it might not adequately cover your Federal Student Loans quest. If this is so, don't forget that the search engines like Dogpile.com exist for looking up more information about Federal Student Loans. To consolidate student loans, you should know that it usually takes place during your grace period. At this moment, the lower in-school interest rate will then be applied to estimate the weighted average fixed rate to consolidate student loans. And once the grace period has ended on your government student loans, the higher in-repayment interest rate will be applied to estimate the weighted average fixed rate.
Given such process, it is then understandable that your fixed interest rate for government student loan consolidation will be higher if you consolidate student loans after your grace period. Many people looking for information about Federal Student Loans also looked online for Affinity Direct Student Loan, Refinance Private Student Loans, and even College Rocket Student Loans.
2011-04-04
Federal Student Loans - Amazing Value For Students Who Need Financial Help
Federal student loans offer students in the U.S. the largest source of need-based loans. They allow students to obtain a loan with simple interest and a government guarantee. In applying for such loans, students do not need to have any type of collateral.The big plus of all federal student loans, is the promise of an in-school interest subsidy. That means that the federal government pays the interest on the loan while the student is still in school. The government also pays that interest during the first six months after the loan recipient is out of school. The Types of Federal Student Loans
Students should understand that there are number of different federal student loans. Some students get a Perkins Loan. When a student is awarded a Perkins Loan, then his or her chosen school gets the loan money. The school then transfers that money to the student's account in the form of a credit. Perkins loans have an interest rate of 5%. Some students are awarded a Stafford Loan. This is a subsidized loan. The Stafford Loan comes (at the time of writing), with an interest rate of 6.8%. The student awarded a Stafford Loan can choose the bank that will be lending the money for that loan. The lender then sends that money to the student's school. Again the school transfers that money to the student's account in the form of a credit. Direct Student Loans and Loan Information
Some federal loans are direct loans. When a student gets a direct loan, then the government is the lender of the loan money. These loans can be given to citizens or to permanent residents. At one time, some of the students awarded federal loans still lacked a full understanding of the loan process in the U.S. And at that time, about 25 years ago, students of course could not look to the Internet for information on federal student loans. Without easy access to information, some students lacked an understanding of the loan provisions, and failed to get the best loan to suit them.Interest Reduction on Federal Student Loans
Some students who have benefited from these loans have had the opportunity to get an interest reduction. That reduction is given to loan recipients who have chosen to use a direct debit to make payments on the loan. The extent of that reduction depends on the level of education attained by the student. Federal student loans for undergraduates typically offer a 1% interest rate reduction for agreement to direct debit and for graduate students they usually provide a 1.5% rate reduction to any such loan recipient who is willing to make payments by direct debit.
Students should understand that there are number of different federal student loans. Some students get a Perkins Loan. When a student is awarded a Perkins Loan, then his or her chosen school gets the loan money. The school then transfers that money to the student's account in the form of a credit. Perkins loans have an interest rate of 5%. Some students are awarded a Stafford Loan. This is a subsidized loan. The Stafford Loan comes (at the time of writing), with an interest rate of 6.8%. The student awarded a Stafford Loan can choose the bank that will be lending the money for that loan. The lender then sends that money to the student's school. Again the school transfers that money to the student's account in the form of a credit. Direct Student Loans and Loan Information
Some federal loans are direct loans. When a student gets a direct loan, then the government is the lender of the loan money. These loans can be given to citizens or to permanent residents. At one time, some of the students awarded federal loans still lacked a full understanding of the loan process in the U.S. And at that time, about 25 years ago, students of course could not look to the Internet for information on federal student loans. Without easy access to information, some students lacked an understanding of the loan provisions, and failed to get the best loan to suit them.Interest Reduction on Federal Student Loans
Some students who have benefited from these loans have had the opportunity to get an interest reduction. That reduction is given to loan recipients who have chosen to use a direct debit to make payments on the loan. The extent of that reduction depends on the level of education attained by the student. Federal student loans for undergraduates typically offer a 1% interest rate reduction for agreement to direct debit and for graduate students they usually provide a 1.5% rate reduction to any such loan recipient who is willing to make payments by direct debit.
2011-04-03
Fast Qualification For Private Student Loans
Have you been considering a private student loan? With each passing semester, it becomes more and more increasingly difficult to afford the cost of a good education. In fact, tuition rates have skyrocketed in recent years, as has the cost of textbooks and other supplies needed by students. Although government grants, scholarships, and other forms of aid go a long way towards helping defer educational costs, many students are forced to rely on student loans to pay for needs that go unmet with traditional funding sources like the Pell Grant and others. Private student loans can help fill that huge gap between what is needed and what regular student financial aid and scholarships pay for. Private Student Loans ExplainedGovernment endorsed and guaranteed student loans are also beneficial to students, to a point.
These are needs-based loans, however. This means that the student must demonstrate financial need in order to qualify. Many students do not have unmet needs on paper, so to speak, but they do have unmet needs nonetheless, just not under government standards of what a student should need. A private student loan does not have an unmet needs clause, therefore, the amounts that can be borrowed under a private student loan are much greater than loans like the Stafford loan, university based and controlled Perkins loans, and Parent PLUS loans that are written by commercial banks but guaranteed by the United States government. You can take out a private student loan for amounts as much as $50,000 per semester, regardless of other aids you have received, including financial aid grants, scholarships, and work study proceeds.
How You Can Qualify Right NowHowever, many students have difficulty qualifying for a private student loan because it is a credit-based loan product. This means that you must have a good credit score to get the loan you need. The trouble with students is that they usually do not have an established credit history, thus, they actually have no credit at all in most instances. For this reason, fast qualification for a private student loan is best achieved by applying alongside a creditworthy cosigner. Usually, this cosigner is a parent or guardian, grandparent, or other relative, although it can be a friend or other acquaintance.
The person who cosigns for your private student loan needs to have a good credit score and payment history. Once this need is met, you can easily borrow all of the money that you need to get through school, semester after semester. Additionally, you do not have to wait until a semester is over before you apply for a private student loan. You can find the best rates on your private student loan by shopping around online.
There are a lot of reputable private student loan lenders. You do not have to go with a lender that is recommended by your student financial aid office. Doing your own research can help you land the loan that you need, and at a rate that you can afford. Although payment of your private student loan is usually delayed until after you graduate, by locking in a good interest rate now, you can save yourself a ton of money when you enter the repayment period of your loan agreement.
These are needs-based loans, however. This means that the student must demonstrate financial need in order to qualify. Many students do not have unmet needs on paper, so to speak, but they do have unmet needs nonetheless, just not under government standards of what a student should need. A private student loan does not have an unmet needs clause, therefore, the amounts that can be borrowed under a private student loan are much greater than loans like the Stafford loan, university based and controlled Perkins loans, and Parent PLUS loans that are written by commercial banks but guaranteed by the United States government. You can take out a private student loan for amounts as much as $50,000 per semester, regardless of other aids you have received, including financial aid grants, scholarships, and work study proceeds.
How You Can Qualify Right NowHowever, many students have difficulty qualifying for a private student loan because it is a credit-based loan product. This means that you must have a good credit score to get the loan you need. The trouble with students is that they usually do not have an established credit history, thus, they actually have no credit at all in most instances. For this reason, fast qualification for a private student loan is best achieved by applying alongside a creditworthy cosigner. Usually, this cosigner is a parent or guardian, grandparent, or other relative, although it can be a friend or other acquaintance.
The person who cosigns for your private student loan needs to have a good credit score and payment history. Once this need is met, you can easily borrow all of the money that you need to get through school, semester after semester. Additionally, you do not have to wait until a semester is over before you apply for a private student loan. You can find the best rates on your private student loan by shopping around online.
There are a lot of reputable private student loan lenders. You do not have to go with a lender that is recommended by your student financial aid office. Doing your own research can help you land the loan that you need, and at a rate that you can afford. Although payment of your private student loan is usually delayed until after you graduate, by locking in a good interest rate now, you can save yourself a ton of money when you enter the repayment period of your loan agreement.
2011-03-30
Facts You Need To Know About Student Loans
If you are starting to think about starting a career and you need to consider your finance alternatives in order to pay your way through college, it is important for you to know certain aspects of student loan funding. Following you will find some brief explanations on certain essential concepts along with facts that you must know if you are planning to apply for a student loan and you have not decided yet what is that you need.
Federal Student Funding
The first alternative you need to consider is to request a federal student loan. Federal student loans are awarded according to the needs of the applicants and thus, this guarantees approval even if you have bad credit or no credit at all or if you do not have a suitable income for affording a private student loan. Those who are particularly in need or underprivileged have more chances of getting approved. Other people can also obtain financing through these loans but the government will only finance part of the college costs. These loans are subsidized which means that the interest rate charged is significantly low because the government does not profit from these programs. Private Student Loans Private student loans tend to charge a higher interest rate but provide higher loan amounts.
There are however subsidized student loans that feature lower rates even though they are private loans. There are few private student loan lenders that offer loans payable after graduation. Thus, if you need that kind of loans, you have to resort to government financing. Those private student loans that are not subsidized have credit and income requirements just like any other private loan which means that you probably need the aid of a co-signer unless you have a well established financial position.
Subsidized - Not Subsidized Student Loans Whether a student loan is subsidized or not will determine not only the interest rate that you will have to pay but also the requirement you will need to meet for approval. Subsidized student loans do not have harsh credit or income requirements because they are mainly awarded according to the needs of the applicant while those student loans that are not subsidized require you to meet some basic credit and income requirements.
Of course, since these loans are for students, lenders are not so hard on the applicants as with personal unsecured loans. However, if you have had a bankruptcy in the past or too many delinquencies on your credit history, you will need to apply with a co-signer with a good credit history. PLUS Loans So Parents Can Aid Their Children PLUS loans are awarded to the parents of college students to help them with their studies. Since federal funding requires the family to contribute with a percentage of the college costs, federal student loans do not provide all the funds needed for financing college studies.
Therefore, PLUS loans where conceived to solve this difficulties and let parents provide the amount they are supposed to through a Loan. These loans also have subsidized interest rates but the repayment program does not start after graduation. Instead, it will start immediately after approval like most other loans do.
Federal Student Funding
The first alternative you need to consider is to request a federal student loan. Federal student loans are awarded according to the needs of the applicants and thus, this guarantees approval even if you have bad credit or no credit at all or if you do not have a suitable income for affording a private student loan. Those who are particularly in need or underprivileged have more chances of getting approved. Other people can also obtain financing through these loans but the government will only finance part of the college costs. These loans are subsidized which means that the interest rate charged is significantly low because the government does not profit from these programs. Private Student Loans Private student loans tend to charge a higher interest rate but provide higher loan amounts.
There are however subsidized student loans that feature lower rates even though they are private loans. There are few private student loan lenders that offer loans payable after graduation. Thus, if you need that kind of loans, you have to resort to government financing. Those private student loans that are not subsidized have credit and income requirements just like any other private loan which means that you probably need the aid of a co-signer unless you have a well established financial position.
Subsidized - Not Subsidized Student Loans Whether a student loan is subsidized or not will determine not only the interest rate that you will have to pay but also the requirement you will need to meet for approval. Subsidized student loans do not have harsh credit or income requirements because they are mainly awarded according to the needs of the applicant while those student loans that are not subsidized require you to meet some basic credit and income requirements.
Of course, since these loans are for students, lenders are not so hard on the applicants as with personal unsecured loans. However, if you have had a bankruptcy in the past or too many delinquencies on your credit history, you will need to apply with a co-signer with a good credit history. PLUS Loans So Parents Can Aid Their Children PLUS loans are awarded to the parents of college students to help them with their studies. Since federal funding requires the family to contribute with a percentage of the college costs, federal student loans do not provide all the funds needed for financing college studies.
Therefore, PLUS loans where conceived to solve this difficulties and let parents provide the amount they are supposed to through a Loan. These loans also have subsidized interest rates but the repayment program does not start after graduation. Instead, it will start immediately after approval like most other loans do.
2011-03-29
Expanding Federal Regulation of Private Student Loans
In a vote last month that fell for the most part along party lines, the House Financial Services Committee approved the creation of a Consumer Financial Protection Agency, which will expand federal oversight of non federal private student loans. At the same time, the committee rejected a proposal that would have included school-sponsored "gap loans" under the authority of the new CFPA.
The House panel, in a vote of 39 to 29, approved the Consumer Financial Protection Agency Act of 2009 (H.R. 3126), a centerpiece of the Obama administration's pursuit to overhaul the nation's financial regulatory system.The approved legislation would create a new federal agency, the CFPA, which would have centralized oversight of various forms of consumer credit, such as mortgages and credit cards, as well as private student loans.
The New Consumer Financial Protection AgencyThe CFPA would have the authority to write new consumer lending protection rules, monitor financial institutions for compliance with these rules, and penalize institutions for any infractions. The CFPA would also have the ability to ban products, marketing tactics, and other business practices that it deems "unfair, deceptive, or abusive.
The Consumer Financial Protection Agency will prevent predatory lending practices and other abuses and will ensure that consumers get clear information they can understand about financial products like credit cards and mortgages," President Obama said in a commendation of the House committee's approval of the bill. The measure passed despite strong Republican opposition and forceful lobbying from banks and business groups."It's not about protecting consumers; it's about a new government bureaucracy making decisions for us," said Representative Spencer Bachus of Alabama, the ranking Republican on the House panel.
Consumer Groups Back Oversight of Private Student Loans
A number of student and consumer advocacy groups had been urging the House committee to approve bringing the CFPA's oversight to private student loans non-federally guaranteed education loans issued by banks and private lenders rather than by the U.S. Department of Education.Until this year, when private student lenders have been forced to make their credit requirements much more stringent in response to skittish investors and a risk-averse credit market, private student loans had been steadily attracting more and more borrowers as families struggled to meet ever-rising college costs."Private student loans are one of the riskiest ways to pay for college, yet a growing number of students have private student loans as well as, or instead of, federal student loans," a coalition of student and consumer groups wrote in a joint letter to Representative Barney Frank, the Democratic chairman of the House Financial Services Committee."Private student loans are expensive, mostly variable-rate loans that cost more for those who can least afford them," the letter reads. "They lack the fixed rates, consumer protections and flexible repayment options of federal student loans, and are not financial aid any more than a credit card is when used to pay for textbooks or tuition.
The Fight for Regulation of 'Gap Loans'In their letter to Frank, the consumer and student advocate groups also pressed for a legislated clarification that school-sponsored "gap loans" wouldn't be exempted from the CFPA's oversight."Gap" student loans - so-called because they're intended to cover students' financing gaps, any attendance costs that aren't covered by other financial aid such as grants and federal student loans are increasingly being offered by for-profit colleges and vocational schools to boost enrollment as these institutions encounter a growing flood of unemployed and low-income students looking to return to school.
For-profit schools that provide gap financing, say that their financing programs allow students to attend school who wouldn't otherwise be able to afford a higher education.But these gap financing programs are risky and expensive for students, consumer advocates maintain. Gap loans typically carry high interest rates and large monthly payments that the schools' generally low-income students often aren't able to handle all while allowing the schools to collect hundreds of thousands of dollars in federal money from the federal financial aid that students use to pay the bulk of their attendance costs.
Concerned about the potential for student loans made by for-profit schools to be exempted from the CFPA legislation under a small-business clause in the bill, consumer and student advocate groups had been lobbying in support of an amendment, sponsored by Democratic Representative Maxine Waters of California, that would have specifically placed gap loans under the authority of the CFPA."We just want to make sure that the risky financial products that some colleges, for-profits in particular, have been making to students are still covered by this agency," said Lauren Asher, president of The Institute for College Access & Success.Proprietary colleges argued against the proposed amendment, saying that gap student loans are already regulated by the federal Truth in Lending Act.
New TILA rules, mandated under last year's Higher Education Opportunity Act (H.R. 4137) and which will go into effect in February, will require student lenders to disclose more details about their private loan programs, including interest rates and estimated monthly payments, and to inform applicants for private student loans about federal student loan options.Consumer advocates, however, hold that TILA regulations aren't sufficient and that the stricter oversight of the CFPA is necessary in order to protect student loan borrowers."To effectively protect consumers, the CFPA must have full authority to regulate private student loans regardless of the institution offering them," the consumer and student advocate groups wrote in their letter to Frank. "For consumers, a private student loan can pose the same serious risks whether issued by a financial institution or by a school. The CFPA should apply and enforce standards based upon the product and not the issuing institution."
The House panel, in a vote of 39 to 29, approved the Consumer Financial Protection Agency Act of 2009 (H.R. 3126), a centerpiece of the Obama administration's pursuit to overhaul the nation's financial regulatory system.The approved legislation would create a new federal agency, the CFPA, which would have centralized oversight of various forms of consumer credit, such as mortgages and credit cards, as well as private student loans.
The New Consumer Financial Protection AgencyThe CFPA would have the authority to write new consumer lending protection rules, monitor financial institutions for compliance with these rules, and penalize institutions for any infractions. The CFPA would also have the ability to ban products, marketing tactics, and other business practices that it deems "unfair, deceptive, or abusive.
The Consumer Financial Protection Agency will prevent predatory lending practices and other abuses and will ensure that consumers get clear information they can understand about financial products like credit cards and mortgages," President Obama said in a commendation of the House committee's approval of the bill. The measure passed despite strong Republican opposition and forceful lobbying from banks and business groups."It's not about protecting consumers; it's about a new government bureaucracy making decisions for us," said Representative Spencer Bachus of Alabama, the ranking Republican on the House panel.
Consumer Groups Back Oversight of Private Student Loans
A number of student and consumer advocacy groups had been urging the House committee to approve bringing the CFPA's oversight to private student loans non-federally guaranteed education loans issued by banks and private lenders rather than by the U.S. Department of Education.Until this year, when private student lenders have been forced to make their credit requirements much more stringent in response to skittish investors and a risk-averse credit market, private student loans had been steadily attracting more and more borrowers as families struggled to meet ever-rising college costs."Private student loans are one of the riskiest ways to pay for college, yet a growing number of students have private student loans as well as, or instead of, federal student loans," a coalition of student and consumer groups wrote in a joint letter to Representative Barney Frank, the Democratic chairman of the House Financial Services Committee."Private student loans are expensive, mostly variable-rate loans that cost more for those who can least afford them," the letter reads. "They lack the fixed rates, consumer protections and flexible repayment options of federal student loans, and are not financial aid any more than a credit card is when used to pay for textbooks or tuition.
The Fight for Regulation of 'Gap Loans'In their letter to Frank, the consumer and student advocate groups also pressed for a legislated clarification that school-sponsored "gap loans" wouldn't be exempted from the CFPA's oversight."Gap" student loans - so-called because they're intended to cover students' financing gaps, any attendance costs that aren't covered by other financial aid such as grants and federal student loans are increasingly being offered by for-profit colleges and vocational schools to boost enrollment as these institutions encounter a growing flood of unemployed and low-income students looking to return to school.
For-profit schools that provide gap financing, say that their financing programs allow students to attend school who wouldn't otherwise be able to afford a higher education.But these gap financing programs are risky and expensive for students, consumer advocates maintain. Gap loans typically carry high interest rates and large monthly payments that the schools' generally low-income students often aren't able to handle all while allowing the schools to collect hundreds of thousands of dollars in federal money from the federal financial aid that students use to pay the bulk of their attendance costs.
Concerned about the potential for student loans made by for-profit schools to be exempted from the CFPA legislation under a small-business clause in the bill, consumer and student advocate groups had been lobbying in support of an amendment, sponsored by Democratic Representative Maxine Waters of California, that would have specifically placed gap loans under the authority of the CFPA."We just want to make sure that the risky financial products that some colleges, for-profits in particular, have been making to students are still covered by this agency," said Lauren Asher, president of The Institute for College Access & Success.Proprietary colleges argued against the proposed amendment, saying that gap student loans are already regulated by the federal Truth in Lending Act.
New TILA rules, mandated under last year's Higher Education Opportunity Act (H.R. 4137) and which will go into effect in February, will require student lenders to disclose more details about their private loan programs, including interest rates and estimated monthly payments, and to inform applicants for private student loans about federal student loan options.Consumer advocates, however, hold that TILA regulations aren't sufficient and that the stricter oversight of the CFPA is necessary in order to protect student loan borrowers."To effectively protect consumers, the CFPA must have full authority to regulate private student loans regardless of the institution offering them," the consumer and student advocate groups wrote in their letter to Frank. "For consumers, a private student loan can pose the same serious risks whether issued by a financial institution or by a school. The CFPA should apply and enforce standards based upon the product and not the issuing institution."
2011-03-28
Dont' Rush Through The Student Loan Process 2
As you may know, student loans are today's largest form of student aid. Researches have found out that it made up to 54 percent of the total aid awarded every year. However, with the rise of student loans, several cases of student loan defaults occur. The student loan debt is even today's one of the major problems of most student borrowers. It is rising every year and the college expenses as well as the graduate school costs have definitely gone up faster than inflation.
Well, let me tell you that this case often surface when you take a particular loan then another student loan followed by another loan. It is often said that as much as you take student loan offers, your loan debt gets bigger and bigger.
Since the case for student loan debt always happens and it carries certain burdens to the attainment of the student's dream of higher education, it is then important that you consider some steps that will help you lower or manage your debts. Perhaps one of the most necessary things to consider is to borrow loans responsibly.Many people find it easy to rush through the student loan process.
However, if you take a minute considering some of the money saving tips mentioned below, you could save yourself some bucks in the long run. So, read on.Most of the time, you may find it tempting to borrow up to the maximum amount. Well, this is what many people call as the "loan trap". It is the case where you borrow the maximum amount of money from the student loan lending company or institution even if it is more than you can afford to repay. It often occurs for the fact that need-based loans are very easy to apply for and they don't usually require payments while you are attending your degree. Here Are 5 Questions You Should Ask Yourself When Going For A Student Loan How Much Loan Do You Actually Need Before you consider borrowing a student loan for your college, think first how much loan you really need. Always note that when taking out student loan, you don't have to borrow the entire amount which is usually specified in your award letter. Just borrow what is enough.
Reduce Your Loan As Much As Possible There are several options available for student loan borrowers. But, before opting for one, it is necessary that you question yourself if you can hold down the expenses; if you can work more, either in the academic year or during vacations; or if there are scholarships available for you. It is often said that if you minimize spending or bring in more money, the amount you have to borrow for your education tends to go down.Consider Student Loans with the Best Terms
Note that the lower the interest rate, the less pricey the student loan is. This actually means, the less you will have to repay for your student loan debt.
For your own sake, here is what your batting order should be (from the least expensive):
Student Loans
1. Federal Perkins Loans
2. Federal Subsidized Stafford or Direct Loans
3. Federal Unsubsidized Stafford or Direct Loans
4. Alternative or Private Loans
As you may know, most of the students thinking for student loans have access to a special loan source these days. These sources, like the Air Force Aid Society, have student loans terms that are comparable to the Perkins or Subsidized Stafford or Direct Loans. Of course, it may be worth your time to look into the possibilities. There are some sources these days that offer low-interest student loan programs, and perhaps one of the most resourceful is the College Board's online Scholarship Search.
Parent Loans
1. Federal PLUS Loans
2. Private Loans or Alternative Loans
As mentioned, there are two available forms of education loans for parents. These programs are what commonly offered by some colleges anywhere in the world. But, for great chances of availing the benefits of such programs, it is best to check with your financial aid office to see if the school you wish to attend offers its own loan program. This will also allow you to know if you qualify for the loan, before you submit a PLUS loan application.
How Much Should You Borrow?
Many experts agree that you should borrow only as much as necessary. As mentioned earlier, it is often tempting to borrow whatever you are offered or are eligible to borrow. However, it is necessary to think first carefully about hoe much you really need, as well as to consider other possible options.Always note that there is actually no need for you to borrow the entire amount shown in your award letter. And, even more important is that, never plan to borrow as much as you can up the yearly limits because if you do so, expect yourself to be deep down in debt.Bottom line, think first, pray first, and then make your decision based on what you actually need, not what you think you are going to need.
It may indeed help too, if you seek the advice of your family attorney. If you don't have a family attorney, you may be surprised how affordable a local or friend's attorney might be for advice. Even if you pay an attorney $250.- for one hour, if they help guide you in choosing the best student loan, it'll be well worth your money.
Well, let me tell you that this case often surface when you take a particular loan then another student loan followed by another loan. It is often said that as much as you take student loan offers, your loan debt gets bigger and bigger.
Since the case for student loan debt always happens and it carries certain burdens to the attainment of the student's dream of higher education, it is then important that you consider some steps that will help you lower or manage your debts. Perhaps one of the most necessary things to consider is to borrow loans responsibly.Many people find it easy to rush through the student loan process.
However, if you take a minute considering some of the money saving tips mentioned below, you could save yourself some bucks in the long run. So, read on.Most of the time, you may find it tempting to borrow up to the maximum amount. Well, this is what many people call as the "loan trap". It is the case where you borrow the maximum amount of money from the student loan lending company or institution even if it is more than you can afford to repay. It often occurs for the fact that need-based loans are very easy to apply for and they don't usually require payments while you are attending your degree. Here Are 5 Questions You Should Ask Yourself When Going For A Student Loan How Much Loan Do You Actually Need Before you consider borrowing a student loan for your college, think first how much loan you really need. Always note that when taking out student loan, you don't have to borrow the entire amount which is usually specified in your award letter. Just borrow what is enough.
Reduce Your Loan As Much As Possible There are several options available for student loan borrowers. But, before opting for one, it is necessary that you question yourself if you can hold down the expenses; if you can work more, either in the academic year or during vacations; or if there are scholarships available for you. It is often said that if you minimize spending or bring in more money, the amount you have to borrow for your education tends to go down.Consider Student Loans with the Best Terms
Note that the lower the interest rate, the less pricey the student loan is. This actually means, the less you will have to repay for your student loan debt.
For your own sake, here is what your batting order should be (from the least expensive):
Student Loans
1. Federal Perkins Loans
2. Federal Subsidized Stafford or Direct Loans
3. Federal Unsubsidized Stafford or Direct Loans
4. Alternative or Private Loans
As you may know, most of the students thinking for student loans have access to a special loan source these days. These sources, like the Air Force Aid Society, have student loans terms that are comparable to the Perkins or Subsidized Stafford or Direct Loans. Of course, it may be worth your time to look into the possibilities. There are some sources these days that offer low-interest student loan programs, and perhaps one of the most resourceful is the College Board's online Scholarship Search.
Parent Loans
1. Federal PLUS Loans
2. Private Loans or Alternative Loans
As mentioned, there are two available forms of education loans for parents. These programs are what commonly offered by some colleges anywhere in the world. But, for great chances of availing the benefits of such programs, it is best to check with your financial aid office to see if the school you wish to attend offers its own loan program. This will also allow you to know if you qualify for the loan, before you submit a PLUS loan application.
How Much Should You Borrow?
Many experts agree that you should borrow only as much as necessary. As mentioned earlier, it is often tempting to borrow whatever you are offered or are eligible to borrow. However, it is necessary to think first carefully about hoe much you really need, as well as to consider other possible options.Always note that there is actually no need for you to borrow the entire amount shown in your award letter. And, even more important is that, never plan to borrow as much as you can up the yearly limits because if you do so, expect yourself to be deep down in debt.Bottom line, think first, pray first, and then make your decision based on what you actually need, not what you think you are going to need.
It may indeed help too, if you seek the advice of your family attorney. If you don't have a family attorney, you may be surprised how affordable a local or friend's attorney might be for advice. Even if you pay an attorney $250.- for one hour, if they help guide you in choosing the best student loan, it'll be well worth your money.
2011-03-27
Do You Qualify For A Student Loan Forgiveness Program
Students who take certain public service jobs and who have high debt and low income may qualify for student loan forgiveness under a number of federal student loan forgiveness programs. This type of student loan forgiveness is all or nothing. If the borrower stops working full-time in a qualified public service job, they owe all the debt again, even if there are only a few payments left.
Teachers may qualify for student loan forgiveness if they teach full-time for five academic years in schools that serve low-income families and meet other qualifications. This student loan forgiveness program forgives up to $17,500 in principal and interest. Students who took out a Stafford loan on or after October 1, 1998 may be eligible for this form of student loan forgiveness.Students who have Perkins loans may be eligible for student loan forgiveness if they work full-time as a teacher in schools serving low income families, as a special education teacher, as a qualified provider of early intervention services, as a teacher in math, foreign languages, science, bilingual education or other areas in which there is a teacher shortage. Student loan forgiveness is also available to employees of public or non-profit child and family service agencies serving high-risk children and families, nurses, medical technicians, law enforcement or corrections officers, and staff members of Head Start.
There are other circumstances for student loan forgiveness or cancellation for borrowers who perform military service, perform volunteer work, or practice medicine or law in low income communities, and meet other specifics under the appropriate student loan forgiveness program. Students in the Army National Guard may be eligible for up to $10,000 in student loan forgiveness.
Volunteer work programs under which borrowers may qualify for student loan forgiveness are as follows:
1. Ameri Corps, 12 months service, $7,400 stipend and $4725 towards student loan forgiveness
2. Peace Corps, deferment and partial cancellation of Stafford, Perkins, or consolidation loans at a rate of 15% for each year of service.
3. Volunteers in Service to America, 1,700 hours of service may qualify for $4725 in student loan forgivenessSeveral law schools offer student loan forgiveness for students who serve in public interest or non-profit sectors.
The National Health Service Corps offers student loan forgiveness for medical students who practice a set number of years in areas with few health care resources. Some private healthcare facilities and hospitals offer student loan forgiveness to occupational and physical therapists.Students who have a Michael Murphy Loan to study law, law enforcement, probation and parole, and other related fields may work off 20% of their loan per year by working as a State Trooper or related law enforcement official in Alaska.
In Maryland, state and local government employees earning less than $40,000 gross annual may be eligible for student loan forgiveness in the form of loan assistance or repayment if they study law, nursing, physical and occupational therapy, social work, or education.After 10 years full-time employment in public service and 120 payments as part of the Direct Loan program, employees may be eligible for student loan forgiveness of the remaining principal and interest. Student loan forgiveness is not taxable under section 108(f) of the code of the Internal Revenue Service.
Teachers may qualify for student loan forgiveness if they teach full-time for five academic years in schools that serve low-income families and meet other qualifications. This student loan forgiveness program forgives up to $17,500 in principal and interest. Students who took out a Stafford loan on or after October 1, 1998 may be eligible for this form of student loan forgiveness.Students who have Perkins loans may be eligible for student loan forgiveness if they work full-time as a teacher in schools serving low income families, as a special education teacher, as a qualified provider of early intervention services, as a teacher in math, foreign languages, science, bilingual education or other areas in which there is a teacher shortage. Student loan forgiveness is also available to employees of public or non-profit child and family service agencies serving high-risk children and families, nurses, medical technicians, law enforcement or corrections officers, and staff members of Head Start.
There are other circumstances for student loan forgiveness or cancellation for borrowers who perform military service, perform volunteer work, or practice medicine or law in low income communities, and meet other specifics under the appropriate student loan forgiveness program. Students in the Army National Guard may be eligible for up to $10,000 in student loan forgiveness.
Volunteer work programs under which borrowers may qualify for student loan forgiveness are as follows:
1. Ameri Corps, 12 months service, $7,400 stipend and $4725 towards student loan forgiveness
2. Peace Corps, deferment and partial cancellation of Stafford, Perkins, or consolidation loans at a rate of 15% for each year of service.
3. Volunteers in Service to America, 1,700 hours of service may qualify for $4725 in student loan forgivenessSeveral law schools offer student loan forgiveness for students who serve in public interest or non-profit sectors.
The National Health Service Corps offers student loan forgiveness for medical students who practice a set number of years in areas with few health care resources. Some private healthcare facilities and hospitals offer student loan forgiveness to occupational and physical therapists.Students who have a Michael Murphy Loan to study law, law enforcement, probation and parole, and other related fields may work off 20% of their loan per year by working as a State Trooper or related law enforcement official in Alaska.
In Maryland, state and local government employees earning less than $40,000 gross annual may be eligible for student loan forgiveness in the form of loan assistance or repayment if they study law, nursing, physical and occupational therapy, social work, or education.After 10 years full-time employment in public service and 120 payments as part of the Direct Loan program, employees may be eligible for student loan forgiveness of the remaining principal and interest. Student loan forgiveness is not taxable under section 108(f) of the code of the Internal Revenue Service.
2011-03-26
Credit Unions Challenge Big Banks for Private Student Loans
Big banks that offer private-label college loans are facing new competition from credit unions that are looking to issue their own private student loans.Credit unions, in increasing numbers, are developing partnerships with private student loan companies like Sallie Mae and Credit Union Student Choice to deliver private student loan products to credit union members. In one such agreement, Southeast Corporate Federal Credit Union, which itself has more than 400 member credit unions, will offer private student loans through Sallie Mae.
Private student loans, non-federal education loans issued by banks and private lenders, are designed to assist students who have exhausted their federal student loan options. Private student loans can be used to cover up to 100 percent of a student's approved educational expenses.Credit Unions Offering Flexibility in Student Loan Programs
Some credit union private loan programs are being structured to appeal to families with more than one student in college by enabling parents to make multiple withdrawals on a single line of credit worth as much as $75,000. In addition, credit union-backed student loans are eliminating loan origination fees and offer both in-school student loan repayment and deferred, post-graduation repayment plans.In-school repayment options enable students to reduce the overall amount of interest their private student loan accrues before they graduate.
According to Sallie Mae, students who begin college loan repayments while still in school can reduce their student loan debt by 30 to 50 percent over traditional student loan payment plans, which defer repayment until after a student has graduated or left school.Investors Looking to Private Student Loans' Long-Term GrowthThe prospects for private student loan companies and student loan securitization are improving marginally.
The National Credit Union Administration (NCUA) recently sold a bond worth nearly $1.2 billion that was backed by student loans, after previously relying on commercial and residential mortgages to secure its bond sales.Credit rating agencies are less sure that private student loan companies represent a good risk; however, many analysts remain optimistic about the long-term investment potential of private student loans.Fueling investor confidence in the longer-term prospect of the private student loan market is the growing demand for student financial aid as record numbers of students are entering college each year.
Federal Budget Cuts May Pave the Way for More Private Student Loans Indeed, private student loans may gain market share in a more immediate future than analysts had been predicting.On Capitol Hill, the U.S. Senate is currently struggling to pass a continuation of its earlier spending authorization to fund the Department of Education's federal Pell Grant program, which awards government-issued college grants to financially needy and lower-income students. The current authorization expires December 18.If the Senate fails to reauthorize the funding proposal at its current level, students who are eligible for a Pell Grant may find their Pell Grant award reduced or eliminated. With less Pell Grant aid available to them, many of these students would then need to take out more money in student loans in order to pay for college and complete their degree.
Congress is already considering elimination of the Pell Grant program altogether, as recommended by President Obama's National Commission on Fiscal Responsibility and Reform.The bipartisan panel, which recently forwarded its final report to Congress, recommended that the federal government reduce federal education grants based on a student's pre-college family income in favor of more government-issued student loans, which would need to be paid back, replenishing the government's coffers, and that would be more attuned to a borrower's post-graduation earning potential.
However, spending appropriations for an expanded federal student loan program may face stiff opposition in the Republican-led House of Representatives.As Congress wrestles with the funding needs and long-term future of both federal grant and federal student loan programs, private student loan companies are positioning themselves to fill in any emerging federal financial aid funding gaps.student loans, student loan repayment calculator, federal Pell Grants
Private student loans, non-federal education loans issued by banks and private lenders, are designed to assist students who have exhausted their federal student loan options. Private student loans can be used to cover up to 100 percent of a student's approved educational expenses.Credit Unions Offering Flexibility in Student Loan Programs
Some credit union private loan programs are being structured to appeal to families with more than one student in college by enabling parents to make multiple withdrawals on a single line of credit worth as much as $75,000. In addition, credit union-backed student loans are eliminating loan origination fees and offer both in-school student loan repayment and deferred, post-graduation repayment plans.In-school repayment options enable students to reduce the overall amount of interest their private student loan accrues before they graduate.
According to Sallie Mae, students who begin college loan repayments while still in school can reduce their student loan debt by 30 to 50 percent over traditional student loan payment plans, which defer repayment until after a student has graduated or left school.Investors Looking to Private Student Loans' Long-Term GrowthThe prospects for private student loan companies and student loan securitization are improving marginally.
The National Credit Union Administration (NCUA) recently sold a bond worth nearly $1.2 billion that was backed by student loans, after previously relying on commercial and residential mortgages to secure its bond sales.Credit rating agencies are less sure that private student loan companies represent a good risk; however, many analysts remain optimistic about the long-term investment potential of private student loans.Fueling investor confidence in the longer-term prospect of the private student loan market is the growing demand for student financial aid as record numbers of students are entering college each year.
Federal Budget Cuts May Pave the Way for More Private Student Loans Indeed, private student loans may gain market share in a more immediate future than analysts had been predicting.On Capitol Hill, the U.S. Senate is currently struggling to pass a continuation of its earlier spending authorization to fund the Department of Education's federal Pell Grant program, which awards government-issued college grants to financially needy and lower-income students. The current authorization expires December 18.If the Senate fails to reauthorize the funding proposal at its current level, students who are eligible for a Pell Grant may find their Pell Grant award reduced or eliminated. With less Pell Grant aid available to them, many of these students would then need to take out more money in student loans in order to pay for college and complete their degree.
Congress is already considering elimination of the Pell Grant program altogether, as recommended by President Obama's National Commission on Fiscal Responsibility and Reform.The bipartisan panel, which recently forwarded its final report to Congress, recommended that the federal government reduce federal education grants based on a student's pre-college family income in favor of more government-issued student loans, which would need to be paid back, replenishing the government's coffers, and that would be more attuned to a borrower's post-graduation earning potential.
However, spending appropriations for an expanded federal student loan program may face stiff opposition in the Republican-led House of Representatives.As Congress wrestles with the funding needs and long-term future of both federal grant and federal student loan programs, private student loan companies are positioning themselves to fill in any emerging federal financial aid funding gaps.student loans, student loan repayment calculator, federal Pell Grants
2011-03-25
Consumer Law Report Blasts For-Profit Colleges for Private-Label Student Loans
A new report issued in January by the National Consumer Law Center accuses for-profit colleges of saddling their students with unregulated private-label student loans that force these students into high interest rates, excessive debt, and predatory lending terms that make it difficult for these students to succeed.The report, entitled "Piling It On: The Growth of Proprietary School Loans and the Consequences for Students," discusses the boom over the past three years in private student loan programs offered directly by schools rather than by third-party lenders.These institutional loans are offered by so-called "proprietary schools" -- for-profit colleges, career schools, and vocational training programs.Federal vs. Private Education Loans
Most loans for students will be one of two types: government-funded federal student loans, guaranteed and overseen by the U.S. Department of Education; or non-federal private student loans, issued by banks, credit unions, and other private-sector lenders. (Some students may also be able to take advantage of state-funded college loans available in some states for resident students.)Private student loans, unlike federal undergraduate loans, are credit-based loans, requiring the student borrower to have adequate credit history and income, or else a creditworthy co-signer.The Beginnings of Proprietary School Loans Following the financial crisis in 2008 that was spurred, in part, by the lax lending practices that drove the subprime mortgage boom, lenders across all industries instituted more stringent credit requirements for private consumer loans and lines of credit.
Many private student loan companies stopped offering their loans to students who attend for-profit colleges, as these students have historically had weaker credit profiles and higher default rates than students at nonprofit colleges and universities.These moves made it difficult for proprietary schools to comply with federal financial aid regulations that require colleges and universities to receive at least 10 percent of their revenue from sources other than federal student aid.To compensate for the withdrawal of private student loan companies from their campuses, some for-profit colleges began to offer proprietary school loans to their students. Proprietary school loans are essentially private-label student loans, issued and funded by the school itself rather than by a third-party lender.Proprietary Loans as Default TrapsThe NCLC report charges that these proprietary school loans contain predatory lending terms, charge high interest rates and large loan origination fees, and have low underwriting standards, which allow students with poor credit histories and insufficient income to borrow significant sums of money that they're in little position to be able to repay.In addition, these proprietary loans often require students to make payments while they're still in school, and the loans can carry very sensitive default provisions.
A single late payment can result in a loan default, along with the student's expulsion from the academic program. Several for-profit schools will withhold transcripts from borrowers whose proprietary loans are in default, making it nearly impossible for these students to resume their studies elsewhere without starting over.The NCLC report notes that more than half of proprietary college loans go into default and are never repaid.Recommendations for ReformCurrently, consumers are afforded few protections from proprietary lenders. Proprietary school loans aren't subject to the federal oversight that regulates credit products originated by most banks and credit unions.Moreover, some proprietary schools claim that their private student loans aren't "loans" at all, but rather a form of "consumer financing" -- a distinction, NCLC charges, that's "presumably an effort to evade disclosure requirements such as the federal Truth in Lending Act" as well as a semantic maneuver meant to skirt state banking regulations.
The authors of the NCLC report make a series of recommendations for reforming proprietary school loans. The recommendations advocate for tough federal oversight of both proprietary and private student loans.Among the NCLC's favored reforms are requirements that private student loan companies and proprietary lenders adhere to federal truth-in-lending laws; regulations that prohibit proprietary loans from counting toward a school's required percentage of non-federal revenue; implementing tracking of private and proprietary loan debt and default rates in the National Student Loan Data System, which currently tracks only federal education loans; and centralized oversight to ensure that for-profit schools can't disguise their true default rates on their private-label student loans.Other proposed reforms the NCLC supports include modification of federal bankruptcy laws and expansion of federal college loan debt relief programs.
The NCLC argues for a modification of current bankruptcy laws that would allow student borrowers to discharge onerous student loan debts in a bankruptcy petition without having to meet the current, nearly-impossible-to-satisfy "undue hardship" tests. Amidst more relaxed bankruptcy rules and strengthened non-bankruptcy alternatives, the NCLC maintains, fewer borrowers would find themselves hopelessly mired in student loan debt.private student loans, debt relief
Most loans for students will be one of two types: government-funded federal student loans, guaranteed and overseen by the U.S. Department of Education; or non-federal private student loans, issued by banks, credit unions, and other private-sector lenders. (Some students may also be able to take advantage of state-funded college loans available in some states for resident students.)Private student loans, unlike federal undergraduate loans, are credit-based loans, requiring the student borrower to have adequate credit history and income, or else a creditworthy co-signer.The Beginnings of Proprietary School Loans Following the financial crisis in 2008 that was spurred, in part, by the lax lending practices that drove the subprime mortgage boom, lenders across all industries instituted more stringent credit requirements for private consumer loans and lines of credit.
Many private student loan companies stopped offering their loans to students who attend for-profit colleges, as these students have historically had weaker credit profiles and higher default rates than students at nonprofit colleges and universities.These moves made it difficult for proprietary schools to comply with federal financial aid regulations that require colleges and universities to receive at least 10 percent of their revenue from sources other than federal student aid.To compensate for the withdrawal of private student loan companies from their campuses, some for-profit colleges began to offer proprietary school loans to their students. Proprietary school loans are essentially private-label student loans, issued and funded by the school itself rather than by a third-party lender.Proprietary Loans as Default TrapsThe NCLC report charges that these proprietary school loans contain predatory lending terms, charge high interest rates and large loan origination fees, and have low underwriting standards, which allow students with poor credit histories and insufficient income to borrow significant sums of money that they're in little position to be able to repay.In addition, these proprietary loans often require students to make payments while they're still in school, and the loans can carry very sensitive default provisions.
A single late payment can result in a loan default, along with the student's expulsion from the academic program. Several for-profit schools will withhold transcripts from borrowers whose proprietary loans are in default, making it nearly impossible for these students to resume their studies elsewhere without starting over.The NCLC report notes that more than half of proprietary college loans go into default and are never repaid.Recommendations for ReformCurrently, consumers are afforded few protections from proprietary lenders. Proprietary school loans aren't subject to the federal oversight that regulates credit products originated by most banks and credit unions.Moreover, some proprietary schools claim that their private student loans aren't "loans" at all, but rather a form of "consumer financing" -- a distinction, NCLC charges, that's "presumably an effort to evade disclosure requirements such as the federal Truth in Lending Act" as well as a semantic maneuver meant to skirt state banking regulations.
The authors of the NCLC report make a series of recommendations for reforming proprietary school loans. The recommendations advocate for tough federal oversight of both proprietary and private student loans.Among the NCLC's favored reforms are requirements that private student loan companies and proprietary lenders adhere to federal truth-in-lending laws; regulations that prohibit proprietary loans from counting toward a school's required percentage of non-federal revenue; implementing tracking of private and proprietary loan debt and default rates in the National Student Loan Data System, which currently tracks only federal education loans; and centralized oversight to ensure that for-profit schools can't disguise their true default rates on their private-label student loans.Other proposed reforms the NCLC supports include modification of federal bankruptcy laws and expansion of federal college loan debt relief programs.
The NCLC argues for a modification of current bankruptcy laws that would allow student borrowers to discharge onerous student loan debts in a bankruptcy petition without having to meet the current, nearly-impossible-to-satisfy "undue hardship" tests. Amidst more relaxed bankruptcy rules and strengthened non-bankruptcy alternatives, the NCLC maintains, fewer borrowers would find themselves hopelessly mired in student loan debt.private student loans, debt relief
2011-03-24
Consolidate Federal Student Loans
When the need for a student loan arises due to the peak of financial challenges in your college years, you can usually can find the funding you need. In many cases a student will have to apply for more than one student loan before reaching graduation. Even if you happen to acquire several student loans, there is no need to panic as graduation nears. Remember that you still have the option to consolidate those loans.There are basically two major types of student loans. First is the federal student loan which is guaranteed by the US Government through the US Department of Education. They have implemented a Federal Student Aid program as a part of their campaign to provide equal education opportunity for all aspiring college students in the country. Federal student loans are not considered direct loans to the student from the US Government.
However the loans are provided by the US Department of Education and a loan servicing institution, When you need to consolidate federal student loans you have the opportunity apply for single loan to accomplish the needed consolidation. One example of federal loans used to make a loan consolidation is a Stafford loan.As an alternative you can use private sources consolidate your student loans. Private student loans, on the other hand, are administered by privately owned lending institution. Some of the most well known private lending partners are also the leading financial institutions such as Citibank, Chase and Sallie Mae.
In general private student loan rates are higher than public sector loans. However there may be more benefits in terms of payment schedules, payment deferments and longer loan repayment schedules.For those who have incurred a number of federal student loans, the problems of managing the loans can be a problem for some people. As a result many wise student borrowers may opt to consolidate federal student loans in order to better manage their finances and save money.Once a student has decided to consolidate their federal student loans, there are conditions that must be before they can qualify.
First is that they should have more than one federal student loan. Next is that students should be in good standing with each of their existing loan accounts. This means they are either in their six-month grace period or they have already made three monthly repayments for each of the existing loans.
Under the wing of a federal student loan, there are also distinct differences between a subsidized and unsubsidized federal student loan. Although they can still be merged into one loan account, iIt is important to know the type of loans you have before you apply to consolidate your federal student loans.It is obviously very important for the student to do their research prior to applying to consolidate their student loans. Only then will the student be able to make an informed decision. In many cases a student loan consolidation will save you money and reduce the stress of student loan repayment. Federal student loan consolidation is a wise investment in the future.
However the loans are provided by the US Department of Education and a loan servicing institution, When you need to consolidate federal student loans you have the opportunity apply for single loan to accomplish the needed consolidation. One example of federal loans used to make a loan consolidation is a Stafford loan.As an alternative you can use private sources consolidate your student loans. Private student loans, on the other hand, are administered by privately owned lending institution. Some of the most well known private lending partners are also the leading financial institutions such as Citibank, Chase and Sallie Mae.
In general private student loan rates are higher than public sector loans. However there may be more benefits in terms of payment schedules, payment deferments and longer loan repayment schedules.For those who have incurred a number of federal student loans, the problems of managing the loans can be a problem for some people. As a result many wise student borrowers may opt to consolidate federal student loans in order to better manage their finances and save money.Once a student has decided to consolidate their federal student loans, there are conditions that must be before they can qualify.
First is that they should have more than one federal student loan. Next is that students should be in good standing with each of their existing loan accounts. This means they are either in their six-month grace period or they have already made three monthly repayments for each of the existing loans.
Under the wing of a federal student loan, there are also distinct differences between a subsidized and unsubsidized federal student loan. Although they can still be merged into one loan account, iIt is important to know the type of loans you have before you apply to consolidate your federal student loans.It is obviously very important for the student to do their research prior to applying to consolidate their student loans. Only then will the student be able to make an informed decision. In many cases a student loan consolidation will save you money and reduce the stress of student loan repayment. Federal student loan consolidation is a wise investment in the future.
2011-03-23
Consolidate Debt Loans - Student Loan Consolidation
There are different types of financial aid given to students who wish to pursue higher studies out of which consolidated college loans, provided by various banks and lending agencies are the most popular.
These loans are different from scholarships provided by universities, governments and private organizations, to bright students, as they have to be paid back and usually with interest. There are many varieties of consolidated student loans. For example: Student Loans Provided by Federal Agencies These loans are provided to the student directly and no payment are required at least till they are half way through the course.
A 6 month grace period is added to this at times if the student is unable to meet the half time requirement, but this is done only once. The amount of these loans is also limited to a great extent. Student Loans Provided to the Students Parents These loans have much higher amount limits, but the payment installments are started immediately. Loans Provided to Students and Their Parents by Private Organizations These loans have higher limits.
Although the interest is calculated from the time that the loan is sanctioned, no payments are required to be made until after the completion of the curricullum. These loans can be used for any kind of expenses related to the subjects being studied. For instance, tuition fees, rooming and boarding charges, books, clearance of balances which are past due, computers, scientific and laboratory equipments etc. Private loans are often used as supplements to federal student loans. This happens when the amount required for the expenses involved in higher educational curricula is not sufficiently or completely covered by the amounts provided by federal loans, scholarships, grants and other financial aid available to students pursuing higher education. Federal Student Loans This loan is directly provided to the college and University going students.
These loans often act as supplements to the personal as well as family financial resources and other forms of financial aids including scholarships and grants. They are available at both subsidized as well as unsubsidized rates of interest, as per the financial requirement of individual students. Both of these types provide a six month grace period during which no payments are required. PLUS Loans The loans provided to the students parents are also called PLUS loans (Parent Loan for Undergraduate Students). The amounts authorised in these types of loans is higher than the loans provided to students directly and usually cover the complete expense involved in the course. But the payements have to start immediately and grace periods are not allowed. The parents and not their ward for who they are taking the loans are held responsible for payments. Non payment will affect their credit ratings. The consolidated student loans given by private organisations are either school-channelled or provided to the student directly. The school channel loans are given directly to the college or university. Whereas the loans provided to the students directly, only require a proof of enrollment and the school is not involved at all.
About the author: Author is the webmaster of Consolidate Debt Loan. You might be interested in Student Loan Consolidation and Credit Card Debt Consolidation Loans.Special Touches for the Video A nice touch for your wedding video is to have your videographer or a friend wielding a video camera pull your guests aside throughout the night to record a personal message to the bride and groom. This is something that a friend did for us at our wedding, and it was absolutely wonderful to watch. This is a lovely way to record all of your friends and family who attended your wedding and adds a personal touch to the video.
Another nice idea for the wedding video is to record a short message from the bride and groom to each other. Arrange for the videographer to meet with the bride and groom separately right before the wedding ceremony. Each can talk to the camera as if they were talking to their soon-to-be other half. These messages truly capture all of the love and emotion of the couple on their wedding day. And they are so much fun to watch after the wedding and many years down the road!
These loans are different from scholarships provided by universities, governments and private organizations, to bright students, as they have to be paid back and usually with interest. There are many varieties of consolidated student loans. For example: Student Loans Provided by Federal Agencies These loans are provided to the student directly and no payment are required at least till they are half way through the course.
A 6 month grace period is added to this at times if the student is unable to meet the half time requirement, but this is done only once. The amount of these loans is also limited to a great extent. Student Loans Provided to the Students Parents These loans have much higher amount limits, but the payment installments are started immediately. Loans Provided to Students and Their Parents by Private Organizations These loans have higher limits.
Although the interest is calculated from the time that the loan is sanctioned, no payments are required to be made until after the completion of the curricullum. These loans can be used for any kind of expenses related to the subjects being studied. For instance, tuition fees, rooming and boarding charges, books, clearance of balances which are past due, computers, scientific and laboratory equipments etc. Private loans are often used as supplements to federal student loans. This happens when the amount required for the expenses involved in higher educational curricula is not sufficiently or completely covered by the amounts provided by federal loans, scholarships, grants and other financial aid available to students pursuing higher education. Federal Student Loans This loan is directly provided to the college and University going students.
These loans often act as supplements to the personal as well as family financial resources and other forms of financial aids including scholarships and grants. They are available at both subsidized as well as unsubsidized rates of interest, as per the financial requirement of individual students. Both of these types provide a six month grace period during which no payments are required. PLUS Loans The loans provided to the students parents are also called PLUS loans (Parent Loan for Undergraduate Students). The amounts authorised in these types of loans is higher than the loans provided to students directly and usually cover the complete expense involved in the course. But the payements have to start immediately and grace periods are not allowed. The parents and not their ward for who they are taking the loans are held responsible for payments. Non payment will affect their credit ratings. The consolidated student loans given by private organisations are either school-channelled or provided to the student directly. The school channel loans are given directly to the college or university. Whereas the loans provided to the students directly, only require a proof of enrollment and the school is not involved at all.
About the author: Author is the webmaster of Consolidate Debt Loan. You might be interested in Student Loan Consolidation and Credit Card Debt Consolidation Loans.Special Touches for the Video A nice touch for your wedding video is to have your videographer or a friend wielding a video camera pull your guests aside throughout the night to record a personal message to the bride and groom. This is something that a friend did for us at our wedding, and it was absolutely wonderful to watch. This is a lovely way to record all of your friends and family who attended your wedding and adds a personal touch to the video.
Another nice idea for the wedding video is to record a short message from the bride and groom to each other. Arrange for the videographer to meet with the bride and groom separately right before the wedding ceremony. Each can talk to the camera as if they were talking to their soon-to-be other half. These messages truly capture all of the love and emotion of the couple on their wedding day. And they are so much fun to watch after the wedding and many years down the road!
2011-03-22
Citigroup Sells Student Loans Subsidiary to Sallie Mae, Discover
On September 17, Citi Holdings, a division of Citigroup Inc., announced the sale of the indirect subsidiary The Student Loan Corp. (SLC) to Sallie Mae and Discover Financial Services.As part of the transaction, the U.S. Department of Education also purchased a piece of SLC's student loan portfolio, buying $4.7 billion in federally guaranteed student loans, and Citibank bought back approximately $8.7 billion in unguaranteed SLC assets for sale at a later date ("Citi Subsidiary The Student Loan Corporation Sells Securitized FFELP Assets to Sallie Mae," Citigroup press release, Sept. 17, 2010,).SLC is 80-percent owned by Citibank, with public shareholders owning the other 20 percent. SLC shareholders will receive about $30 per share in the buyout, a 42-percent increase on the stock's closing price on September 16.Prior to the sale, SLC was the second-largest servicer of federally guaranteed student loans behind Sallie Mae.Sallie Mae paid $1.2 billion to assume servicing responsibility for $28 billion in securitized, federally guaranteed student loans, while Discover, which paid $600 million, will take over the servicing of $4.2 billion in private student loans. Citigroup says it lost about $500 million in the deal after taxes, which it will report in its third-quarter earnings statement. The transactions require regulatory and SLC shareholder approvals and are expected to close by the end of 2010.Citi Ends Its Run as a Lender of Student Loans The move means that Citigroup has officially exited both the private and federal student loan business. Citi, like other banks and private lenders, had already been forced to stop originating new federal college loans. Under the Student Aid and Fiscal Responsibility Act, legislation included in the Obama administration's health care reconciliation bill and that went into effect on July 1, 2010, only the U.S. Department of Education may issue new federally guaranteed student loans. through the government's student loan program.Private lenders that were previously authorized to issue federally backed college loans (including Stafford, PLUS, Grad PLUS, and federal consolidation loans) under the third-party Federal Family Education Loan Program (FFELP) are still allowed to service their existing federal student loan portfolios, however, and can buy and sell the servicing rights to these government student loans among themselves.Sallie Mae and Discover to Become Bigger Players in the Student Loan MarketOnce the Citi deal is complete, Sallie Mae will service a portfolio of federal parent and student loans worth around $200 billion. Already the largest servicer of federal student loans, Sallie Mae is also the largest originator and servicer of non-federal private student loans, managing about $36 billion in private education loans.With the purchase of Citbank's federal student loans, Sallie Mae will take on about 1.3 million new customers. "This opportunity fits well with our servicing scale and expertise," said Sallie Mae CEO Albert Lord.For its part, Discover gets a bigger share of the private student loan servicing pie and what the company believes will be a competitive enter into the growing market for private student loans."The private student loan business is an important part of Discover's direct banking strategy, and this acquisition will enhance our competitive position in private student loan originations," said David Nehms, Discover's chairman and CEO, in the company's press release.Private student loans comprise a growing percentage of the overall student loan picture, as students look for more ways to cover the ever-increasing cost of a college education. While federal student loan legislation has closed one avenue for private lenders to issue student loans, the door is still open to private lenders who want to fill the widening difference between what students can borrow from Uncle Sam to cover college expenses and rising college costs.
2011-03-21
Can't Repay Your Student Loans 5 Ways to Get Help
For college students, November and December are filled with research projects and final exams. For recent graduates, however, these months can be exceptionally stressful, especially if a post-graduation dream job hasn't materialized on schedule. For graduates who left school with debt from student loans, November and December can be a month of reckoning.
Government-issued federal student loans and many non-federal private student loans grant students a six-month grace period after they leave school before they need to begin making loan payments. For students who graduated in May and June, then, those college loans come up for repayment in November and December.
And if you're a graduate who's caught up in the current recession and the highest unemployment rate on record for new college graduates, you may be getting your first student loan bill having no idea how you're going to make the payment.
Just ignoring those student loan bills isn't going to help. Defaulting on a federal student loan is no light matter. The government can step in and garnish your wages, once you get a job, or seize any income tax refunds you may have coming to you in order to put money toward your student loan debt.
Both federal and private student loans are nearly impossible to discharge in bankruptcy, so your student loan lenders can keep coming after you for payment, even if a judge declares you bankrupt and wipes out your other debts.
All your student loan accounts appear on your credit report, so your credit rating is also at risk. Repeated late and missed payments on your student loans will drop your credit score, will linger on your credit history for years, and can have a lasting impact on your ability later on to qualify for anything that requires a credit check. You may not be able to get a credit card, take out a car loan or home loan, rent an apartment, or even get a job — more and more employers are conducting credit checks on job candidates as a measure of your responsibility and maturity.
Clearly, keeping your student loans current needs to be a priority, for the sake of your credit and the health of your financial future. Whether you're a newly minted college graduate or a longtime borrower who's now having some financial troubles, if you're facing student loan payments that you can't afford, here are five ways to get help now.
1. Contact your student loan lenders.
Whether you're approaching the end of your grace period or you're already in repayment, if you know that you don't have the ability to make the payments on your student loans, contact your lenders immediately, explain your situation, and see what they can do to help.
For your federal student loans, the U.S. Department of Education can grant you additional periods of deferment or forbearance if you're facing financial hardship. With a government-approved deferment or forbearance, your student loan payments are postponed, with no adverse effect on your credit.
Non-federal private student loans aren't required to offer the same deferment and forbearance protections that federal student loans provide. But your private student loan lender may be willing to offer you a temporary forbearance or work something else out, perhaps accepting a lower monthly payment, giving your more time to repay your loan, or lowering your interest rate temporarily.
These approaches won't stop the interest from accruing on your student loan debt (with the exception of deferments on subsidized federal student loans, during which the government will cover the interest on your subsidized loans), but they will help you avoid debt collection.
2. Ask for more time to repay.
If you're carrying more than $30,000 in federal student loan debt, you may be able to extend your loan repayment terms from 10Â years to 25Â years. With a repayment extension, since your student loan debt is being spread out over a longer period, your monthly payments will be lower. Keep in mind, however, that the longer you take to repay your student loans, the more you'll pay in interest, so your loans will end up costing you more overall in the long run.
Private student loans don't offer the same built-in repayment extensions as federal loans. But your lender may still be willing to offer longer repayment periods on a case-by-case basis. Contact your private student loan lender, and ask.
3. Consolidate your student loans.
Student loan consolidation allows you to bundle multiple student loans into one single consolidated loan with one monthly payment. Student loan consolidation may allow you to extend your repayment term and give you a lower monthly payment than what you were paying each month on all your individual student loans separately.
To consolidate your federal student loans, you'll need to contact the U.S. Department of Education directly at loanconsolidation.ed.gov.
Private student loans can't be consolidated with federal student loans, but some private lenders are currently offering private consolidation loans that allow you to consolidate all your private student loans into a single consolidated loan. Do an Internet search for lenders offering private consolidation loans.
4. Cut your monthly student loan payments.
A new federal student loan repayment plan, known as income-based repayment, allows some borrowers to make monthly payments based on their income. If your income is tight, check out this option to see if it works for you.
Income-based repayment can cut your monthly payments on your federal student loan to an amount that's affordable for you. As an added bonus, if you're on the income-based repayment plan for 25Â years and make all your monthly payments on time, you may be eligible to have any remaining balance on your federal student loans forgiven.
Again, private student loans don't offer a built-in income-based repayment option the way federal student loans do, but your lender may be willing to work with you in order to encourage you to continue making payments on your debt. Your lender should rather receive at least some money each month than no money at all if you default. Contact your lender, and see if you can work something out.
5. Get your student loans forgiven.
Depending on your job field, you may qualify for student loan forgiveness on your federal student loans. Public service careers like teaching, social work, public safety, government service, and health care and legal support for the impoverished may qualify you to reduce or wipe out your remaining federal student loan obligations, depending on how long you serve following graduation.
The federal Public Service Student Loan Forgiveness Program allows you to have your federal student loans forgiven after 10Â years, provided you've been making on-time payments and you meet other certain requirements. Contact the U.S. Department of Education for more information and details.
Government-issued federal student loans and many non-federal private student loans grant students a six-month grace period after they leave school before they need to begin making loan payments. For students who graduated in May and June, then, those college loans come up for repayment in November and December.
And if you're a graduate who's caught up in the current recession and the highest unemployment rate on record for new college graduates, you may be getting your first student loan bill having no idea how you're going to make the payment.
Just ignoring those student loan bills isn't going to help. Defaulting on a federal student loan is no light matter. The government can step in and garnish your wages, once you get a job, or seize any income tax refunds you may have coming to you in order to put money toward your student loan debt.
Both federal and private student loans are nearly impossible to discharge in bankruptcy, so your student loan lenders can keep coming after you for payment, even if a judge declares you bankrupt and wipes out your other debts.
All your student loan accounts appear on your credit report, so your credit rating is also at risk. Repeated late and missed payments on your student loans will drop your credit score, will linger on your credit history for years, and can have a lasting impact on your ability later on to qualify for anything that requires a credit check. You may not be able to get a credit card, take out a car loan or home loan, rent an apartment, or even get a job — more and more employers are conducting credit checks on job candidates as a measure of your responsibility and maturity.
Clearly, keeping your student loans current needs to be a priority, for the sake of your credit and the health of your financial future. Whether you're a newly minted college graduate or a longtime borrower who's now having some financial troubles, if you're facing student loan payments that you can't afford, here are five ways to get help now.
1. Contact your student loan lenders.
Whether you're approaching the end of your grace period or you're already in repayment, if you know that you don't have the ability to make the payments on your student loans, contact your lenders immediately, explain your situation, and see what they can do to help.
For your federal student loans, the U.S. Department of Education can grant you additional periods of deferment or forbearance if you're facing financial hardship. With a government-approved deferment or forbearance, your student loan payments are postponed, with no adverse effect on your credit.
Non-federal private student loans aren't required to offer the same deferment and forbearance protections that federal student loans provide. But your private student loan lender may be willing to offer you a temporary forbearance or work something else out, perhaps accepting a lower monthly payment, giving your more time to repay your loan, or lowering your interest rate temporarily.
These approaches won't stop the interest from accruing on your student loan debt (with the exception of deferments on subsidized federal student loans, during which the government will cover the interest on your subsidized loans), but they will help you avoid debt collection.
2. Ask for more time to repay.
If you're carrying more than $30,000 in federal student loan debt, you may be able to extend your loan repayment terms from 10Â years to 25Â years. With a repayment extension, since your student loan debt is being spread out over a longer period, your monthly payments will be lower. Keep in mind, however, that the longer you take to repay your student loans, the more you'll pay in interest, so your loans will end up costing you more overall in the long run.
Private student loans don't offer the same built-in repayment extensions as federal loans. But your lender may still be willing to offer longer repayment periods on a case-by-case basis. Contact your private student loan lender, and ask.
3. Consolidate your student loans.
Student loan consolidation allows you to bundle multiple student loans into one single consolidated loan with one monthly payment. Student loan consolidation may allow you to extend your repayment term and give you a lower monthly payment than what you were paying each month on all your individual student loans separately.
To consolidate your federal student loans, you'll need to contact the U.S. Department of Education directly at loanconsolidation.ed.gov.
Private student loans can't be consolidated with federal student loans, but some private lenders are currently offering private consolidation loans that allow you to consolidate all your private student loans into a single consolidated loan. Do an Internet search for lenders offering private consolidation loans.
4. Cut your monthly student loan payments.
A new federal student loan repayment plan, known as income-based repayment, allows some borrowers to make monthly payments based on their income. If your income is tight, check out this option to see if it works for you.
Income-based repayment can cut your monthly payments on your federal student loan to an amount that's affordable for you. As an added bonus, if you're on the income-based repayment plan for 25Â years and make all your monthly payments on time, you may be eligible to have any remaining balance on your federal student loans forgiven.
Again, private student loans don't offer a built-in income-based repayment option the way federal student loans do, but your lender may be willing to work with you in order to encourage you to continue making payments on your debt. Your lender should rather receive at least some money each month than no money at all if you default. Contact your lender, and see if you can work something out.
5. Get your student loans forgiven.
Depending on your job field, you may qualify for student loan forgiveness on your federal student loans. Public service careers like teaching, social work, public safety, government service, and health care and legal support for the impoverished may qualify you to reduce or wipe out your remaining federal student loan obligations, depending on how long you serve following graduation.
The federal Public Service Student Loan Forgiveness Program allows you to have your federal student loans forgiven after 10Â years, provided you've been making on-time payments and you meet other certain requirements. Contact the U.S. Department of Education for more information and details.
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