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.

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."

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.

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.

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

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

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.

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!

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.

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 10 years to 25 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 25 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 10 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.

Benefits of Using Alaska Student Loan Consolidation

With high cost of education in the modern world today many students who go for higher education have been forced to look for means and ways of ensuring that they get money to cater for their tuition and at the same time get money to buy stationery and other monies that should be used for upkeep expenses. With these endless lists of expenses, the students have been forced to go and approach several lenders to give them a loan to finance their education. As a result of having very many loans, however, having many loans becomes difficulty to manage and hence the need to consolidate the loans.
Alaska student loan consolidation is used by those students who are schooling in Alaska. For many of the students who have quite number of loans with the many lenders have chosen to use the Alaska student loan consolidation so that they can be able to convert all the loans that they have into one particular repayment system with only one lender. There is some benefit of using the Alaska student loan consolidation and these include the reduced interest rate.
By the fact that there is low interest rate, you will be making less payments compared to when making payments to the many lenders differently.It is also very important for students to consider the consolidators who will help in catering for your needs as a student. There are very many Alaska student loan consolidation companies that are giving students the best deal that has some benefits like very low cost for any financial programs, grants to some programmes, reduction in the cost of the loan and the outreach programs that many students do enjoy. Another benefit is that you will be in a position to enjoy is the one bill for all your federal loans.By joining the Alaska student loan consolidation, the students who graduate will never be burdened as they look for the jobs since they have consolidated their loans making it easier to manage their accounts when they do not have the jobs, unlike in the case of students who have not consolidated their loans and have to pay the many lenders as they are out looking for a job.Alaska student loan consolidation is gaining much popularity since it can be able to cater for those students who live in the secluded area or within the city.
The many students who have benefited from Alaska student loan consolidation do say that their parents do not have to worry about the debt loans of their students.As the demand for Alaska student loan consolidation increases among the students there are very many companies that are willing to provide the automatic private loan consolidation. Very many borrowers have been known to make huge savings by accepting to go for the Alaska student loan consolidation. Very many companies for Alaska student loan consolidation have helped the students greatly by reducing the monthly repayments and then prolonging the period of pay that can take up to ten years.

Consolidate Student Loans - Why, How And When

A student should always, once through college, initiate steps to consolidate their student loans. This article details the benefits available to graduates, parents or students who take those steps. The Consolidation of Student Loans Brings Reduced PaymentsWhen a student gets all his or her loans under the same Social Security number, then the government will agree to consolidate those student loans. The student's individual loans are paid off, giving the student one large loan.
Moreover, when the government takes steps to consolidate student loans, it also takes two other important steps: It extends the loan and it lowers the loan rate. There is not set way by which a loan provider can bring down the rate on a consolidated loan. A reputable loan provider carefully examines all the possible ways that a student's rate might be made lower.The loan provider then establishes that low rate as the rate for a consolidated and extended loan. The government's willingness to both extend the loan and to lower the rate can save students considerable money. Although the payment schedule has been extended, the person with the consolidated loan can feel free to pay the loan off ahead of schedule.In other words, there is no prepayment penalty levied on those who make an early pay-off after choosing to consolidate student loans.
Two More Reasons to Consolidate Student Loans It was mentioned above that the rate on a consolidated loan is lower than the rate on each of the original loans. Besides being lower, that rate is also fixed. The rate on a Stafford or Perkins Loan is variable.The rate on a consolidated loan does not change during the course of the loan. A student with a consolidated loan does not need to spend time keeping track of the payment schedule for two, three or more loans. That student loan recipient can just make a single monthly payment.Often the student elects to make that single payment through an automatic debit. That can decrease the loan rate by another 0.25%.Still Other Reasons to Consolidate Student LoansGradate students who consolidate student loans can learn then about fellowships and graduate school loans. Parents who consolidate their loans can search for free money or private loans. Those benefits come on top of the loan's lower interest rate. When you consolidate student loans, you provide yourself with a chance to improve your credit score.
No graduate wants to face credit problems that have been caused by his or her need to take out loans in order to cover college expenses.In light of all the above benefits, students should ask this question:Who Can Qualify for the Program to Consolidate Student Loans?Before allowing a student to consolidate student loans, the government looks to see if the student or graduate owes $10,500 or more.The government also checks to see if the loan recipient has any loans in default.

Loan consolidation is the process of grouping together several different loans into one, usually for both ease of repayment and to lower interest rates. Student loan consolidation has gone through a number of changes since 2006 and with new laws taking effect governing credit cards, more changes will come in 2010 and years to come.The 155 page 2009 Credit Card Act mandates changes to credit card company fees, interest rates, billing statements and rules for extending credit to college students that go into effect from February 2010 through August 2010 (along with the 2010 tax law changes). These laws have resulted in credit card companies making changes to consumer's credit cards ahead of the new provisions taking effect.A 2008 College Board study found that two-thirds of students that graduate carry an average of $22,700 in loan debt (this figure does not include students who carry loans but did not graduate). Though different laws have gone into effect that changes either the benefit or process of student loan consolidation, the Federal Direct Loan Consolidation offered by the US Department of Education is available to nearly every borrower.
Student loans are available in two types.
The first is a subsidized loan, which does not require the student to pay any interest while enrolled in a college, university, or school. Instead, the interest is subsidized by the government or is set in abeyance until after graduation. The second loan type is a non-subsidized loan. A non-subsidized loan requires a student to pay interest while attending school.
Benefits of student loan consolidation are:
* One payment for multiple loans
* A low or lower fixed interest rate
* An extension of time to repay the loan
* A lower monthly payment
* Removal of a co-signer
* Eliminating a parent, guardian, or relative's liability
* There are no fees to consolidate student loan debt

Student loans must meet predetermined criteria for consolidation, calculated by the weighted average of existing student loan rates. The weighted average percentage is typically rounded-up to the nearest 1/8 percent but cannot exceed 8.25 percent. Interest rates will be determined by the student loan types when first taken out. The best time to consolidate student loan debt is within the grace period after graduation (usually a six month post-graduation period). While loan consolidation at this time does require immediate payback, the payments will not begin for a few months and lowers the interest rate.For students with loans that were not government granted, debt consolidation is still possible. Students that hold private student loans may be eligible to consolidate with the original lender. Should the original lender not offer competitive rates, it is best to shop around.
Unlike federal student loan consolidation, private student loan consolidation is based on the student's credit score (and that of the co-signer).
Student loans are eligible for consolidation if they meet the following requirements:
* The student must not be enrolled more than half-time
* The student must be currently repaying the loan or is in a grace period
* The student has not previously consolidated his or her loans

Bad Credit Student Loans - Get Approved Immediately

Are you a student who feels let down by the government financial aid and government student loans process? You probably have many needs that go unmet, and oftentimes students with bad credit do not qualify to borrow money under a private student loan structure. There are ways to borrow private student loan money without having a stellar credit score, however. A bad credit private student loan is your best bet. Money For Student Expenses Beyond Grants And Government Loans Students have a plethora of expenses, and as you likely know, even the most comprehensive financial aid package and loan package from your student aid office rarely covers all of the expenses that you have. Student expenses are soaring with each new school year. Books, tuition, computers, clothing, housing, meals, entertainment.
Like everything else in the economy, student expenses are through the roof. Even if you are eligible for the maximum amount of aid, you still fall short. Private student loans are not needs based like federal aid and loans are, but they are credit based. That means that you face difficulties when applying for this type of loan. However, student with bad credit can always apply with a creditworthy cosigner to secure a bad credit student loan. This loan can be in amounts up to $30,000 a semester, which is money in addition to the grants and loans you already receive. Even if you have exhausted your Perkins or Stafford loan funds for the semester, you can apply for this loan any time of the year, even in the summer and between semesters. Do You Have A Cosigner?Your cosigner plays a very vital role in securing your bad credit student loan. Your cosigner can be your parent, sister, brother, aunt, uncle, or other relative or even a family friend. If you do not have a cosigner, there are alternative bad credit student loan options that will allow you to apply by yourself. These loans will be written at greater amounts of interest, however, and in lesser amounts that you may need. For this reason, having a cosigner is optimal, but you can always go it alone and borrow a lower amount of funds. Before applying alone on the private student loan application, you should always check your credit report to make sure that your credit is actually as bad as it looks. Are there erroneously reported items that you can dispute in order to raise your score? The majority of credit reports contain some errors, so check yours to make certain that it is accurate. Being A Responsible Borrower
While private student loans do fill the broad gap that exists in student budgets, it is important to become a good borrower and put yourself on the road to financial freedom through good credit when you receive a student loan for bad credit. Never borrow in excess of what you truly need. Although most private student loans do not require payment until many months after graduation, you should prepare in advance to become a good steward of your student loan payments by paying on time each and every month. These types of loans report to the credit reporting bureaus and can be a real asset as you build the type of credit that is needed to purchase a home or car in the future.

Bad Credit Student Loan

Want to study more and money is the hitch, then no need to worry. Your problem is now has a solution. Bad credit student loan gives a student the opportunity to study unlimited. Student loan with bad credit, finances your studies. Bad credit student loan acts as a bridge to your school, or college. Student loan is available with interesting rates of interest. Various institutions like US department of education loan grant student loan with exciting rates of return. Moreover these have fewer formalities as compared with other types of loan.A student can pay the loan amount in easy installment even after completing the studies. Student loan with bad credit lessens the burden of the parents. Now a student can carry on with his/her studies according to their wish. There are many institutions that prefer to give student loan with easy installments. The most attracting feature of student loan with bad credit is about the repayment of the loan. You have to make repayment of the loan only after completing your studies.A student can now study by paying his/her fee or extra expenditure himself or herself by taking student loan with bed credit. Every student prefer to finance his or her study by own. Federal loans are the best source of taking student loan. Beware of other private institutions granting loans. Make sure that you have gathered all necessary information about the institution you are taking loan. No need to worry about the installments of the loan. It's your wish how to pay the loan amount.
There are generally two types of student loan - Secured and unsecured.
The difference between these loans is of the rate of return. Secured loans generally have the high rate of interest as compared with the unsecured loans. US department education loans, Stafford loans are among the best institutions granting student loan with bad credit. Every student is eligible for applying for the student loan whether he or she a graduate or under graduate. From the high school stage a student can apply for the loan till he finishes his or her study. Plus loans are the loans for parents. And only parents can repay the loan amount. It's simply a student wish to avail bad credit student loan. Moreover student loan is available with affordable rate of interest. Time is no more a problem. It simply means that time limit is no problem. The time period of student loan is according to the wish of the student.
Student loan with bad credit is the best option for a child dreaming of going to school or college but can't afford to. So shun away your worries regarding the expenditure of the going to college etc. and avail the benefits of student loan. A systematic procedure is followed for applying for student loan. Student loan is very much in demand so study by paying your fees and other expenses. Student loan with bad credit is only foe students. The role of parents is only to guide their children's and help them out. As the repayment is done after completion of studies so you get enough of time to repay the amount and moreover the installment system enables you to concentrate on your studies.

Are Student Loans Still a Good Bet

In the mid- and late-1960s, there was no doubt among U.S. public policy makers that the federal government should be encouraging more citizens to attend and graduate from college. Bolstered by the success of the highly popular GI Bill, which paid college expenses for military veterans, federal student loans were hailed as a "GI Bill for all Americans." These low-interest loans allowed students from modest means to attend college in numbers never before seen. The college graduation rate, which had hovered around 7 to 8 percent, steadily climbed to today's rate of nearly 30 percent. Backing the idea that higher education is nearly universally better than entering the workforce straight out of high school were statistics that showed that college graduates, on average, would benefit from as much as $1 million more in lifetime earnings than students who didn't graduate with a post-secondary degree. At the same time, however, the cost of a college education began to rise much faster than the rate of inflation, meaning that families began to have to devote more of their overall income to paying for college costs. With annual college tuition climbing into the tens of thousands of dollars, college expenses have outstripped even generous incomes, and students have had to turn increasingly to college loans to pay for their education. Today, about two-thirds of college students take out student loans to help pay for their education.
These students leave college with an average of $23,186 in school loan debt, according to FinAid.org. This figure is less than the average cost of a new car in 2010 ($29,217), and most new car loans are paid off in five to six years, with an interest rate comparable to the rates on federal education loans. So why are so many people concerned about the cost of college loans? Simply put, not all college loans are created equal. Federal education loans are issued directly by the federal government and carry a fixed interest rate, along with flexible repayment terms and multiple options for postponing or reducing one's monthly payments based on one's financial circumstances. Federal college loans are generally low-cost, low-pressure loans. Private education loans on the other hand, which are issued not by the government but by banks, credit unions, and other private-sector lenders, are variable-rate, credit-based loans that typically carry higher fees and rates than their federal counterparts. Private student loans also offer much fewer, if any options, for financially distressed borrowers to be able to postpone or reduce their payments. One major difference between a new car loan and a student loan is the deferment period. With a car loan, payments on the principal begin immediately. A portion of every payment is used to reduce the balance owed. In contrast, all federal education loans and many private education loans allow students to defer making any payments while they're still in school. The repayment of the loan can be delayed for years while the student finishes school -- with no delay of interest charges, however. Except in the case of subsidized federal student loans -- for which the government will cover the interest while a student is in school and which are awarded only to students who demonstrate the most financial need -- interest begins to accumulate on college loans as soon as the loans are issued, even if a student is deferring payments. This accumulation may take place over months or years, quietly running up the balance on a student's school loan debt to alarmingly high levels. Families concerned with accumulating excessive college loan debt can always decline to take on any school loans. Federal college loans awarded in a student's financial aid package are always optional; students can turn these loans down if they have another financial resource and don't want to take on the debt of school loans. Students forgoing their available federal college loans at the beginning of the school year, however, may end up passing on this government money only to see their financial circumstances change unexpectedly mid-semester. In cases like these, students may be forced to turn to private student loans to bridge the financial gap. A good strategy for college students is to first seek out college scholarships and grants and then maximize their available federal student loans before considering a private student loan. Private loans should be considered only as a last resort and only for financial emergencies that arise during the semester that other sources of financial aid can't cover. Students should develop a clear and detailed plan for how they're going to pay their college expenses for each year they attend classes, especially if they plan to decline the federal school loans in their financial aid packages. Having a backup plan in place to cover unexpected financial emergencies can also help reduce the need for student loans, as well as the overall cost of a college education. education loans, private student loans, scholarships for students, GI Bill education benefits

Are Student Loans Becoming Required Evils

When it comes to getting a college education most people can agree that the costs can be staggering at best. Even the least expensive colleges in the nation can add up over a four or five year period of time creating crippling debt for those who do not qualify for some of the better grant programs of substantial scholarships. The problem lies in the fact that the parents of most traditional college students make too much money to qualify for the free financial aid that is needs based and very few qualify for the limited number of scholarships that are available to students based on merit. Even among those that qualify competition and fierce and there are no guarantees. Enter the student loan.
There are all kinds of student loans and unfortunately with rising costs associated with college attendence and the growing necessity of a college degree for success in this country it is becoming more and more difficult to pay the price that is associated with higher education.There are three types of loans that are commonly found for college students. They include federal student loans, federal plus loans, and private student loans. Each type of loan has advantages and disadvantages that are unique to that particular loan. Below I will give a little information about each of the loan types and whom they may benefit. Student loans. There are three different types of student loans: subsidized, unsubsidized, and Perkins loans. Perkins loans are only available to students who display exceptional financial need. These loans are available at a 5% interest rate and are available to both graduate and undergraduate students. Perkins loans are extended through the university you attend and will be repaid to the university unlike the other types of student loans, which are repaid to the lending agency. Subsidized student loans are loans in which the interest is deferred until graduation or you cease to be a qualifying student. What this means is that while you are responsible for repaying the loan upon graduation the interest on these loans does not begin to accrue until your begin repayment 6 months after graduation or your cease to be at least a half time student of the university. You must qualify based on your income in order to receive a subsidized student loan. While the needs requirements for these loans isn't as grave as those required in order to receive a Perkins loan you must still qualify.Unsubsidized student loans do not require qualification on a needs basis. You must be a student and enrolled at least half time in order to receive an unsubsidized student loan. The good news however for those who do not qualify based on needs for other student loan options is that this type of loan is available to all qualifying students regardless of need. The interest on these loans however begins to accrue immediately, which means they can really add up over time. PLUS loans are loans that are taken out by the parents of students who need the funds in order to cover educational expenses. The maximum amount that can be borrowed is the cost of attendence minus any financial aid awards the student has already received. The repayment on these loans begins 60 days after the loan is dispersed and the repayment period can be up to 10 years.In order to cover the costs involved in education that go above and beyond what the government recognizes as acceptable college related expenses you can opt to go the route of private student loans rather then relying solely upon federal financial aid for your student loan source. These loans require that you qualify in order to receive them based on your credit rather than your need and must be used for educational purposes only. With these particular loans you really need to make sure you read all the fine print as different companies offer different conditions and different perks. You should really take the time and compare prices and options before taking out a private student loan and this should be done only as a last resort.Student loans for many can be the difference in attending college and getting the education you are hoping for and not being able to pay the high costs that go along with higher education. For this reason you should treat them with respect and not take them lightly.

Apply for Student Loans

There are many sources of student aid and no student should assume that a higher education is simply beyond their means. One of those sources of aid is the student loan.The first thing every student should do is see if they're eligible for any sort of grants, work-study, scholarships, fellowships, etc. 'Free money' is always better than money the student will have to pay back. A financial aid package from colleges will delineate what monies the college or university is offering the student and, most probably, loans will be on the list. But first things first: for colleges to decide if you are eligible for student aid, the colleges need to ascertain student financial need. Most colleges will ask a student, or a student's parents, to fill out a FAFSA, or Free Application for Student Aid. It's a long form and parents, or independent students, will need to have their latest tax returns handy when filling out a FAFSA.Student loans come in two varieties, Federal and private. The best loans are Federal loans. Federal loans may be subsidized (the Federal government will pay interest on the loan while the student is in college) or unsubsidized (the student will be accruing interest on that loan while the student is in college.) There are several 'levels' of Federal loans: Subsidized Stafford Loans are for students with financial need and Perkins Loans are for students with the greatest financial need. Students who are eligible for Perkins Loans get 5% interest and ten years to pay off the loans. Some Perkins Loans can be partially canceled if the student goes into teaching in a low income area, or teaches a subject where there are few teachers available (science and math) or joins the Peace Corp. Unsubsidized Stafford Loans are available to students regardless of need as are Parent Plus Loans, which are actually loans to parents for use in helping put their children through college.Private loans are available through banks and other lending institutions. They are not as valuable as Federal loans as they will invariably cost students more. However, they're available whether a student has financial need or not.The best private loans are available to students, or the parents of students, who have the best credit ratings and cosigners with top credit ratings. Before students become too concerned about student loans they should always spend some time looking over their financial aid packages and then speak with financial aid advisors at their college of choice. These trained professionals are there to help students figure out the best financial packages for the student so that he or she can attend the college in question. It's safe to say that there is financial aid and student loans available to most students today, so don't throw in the towel and decide that college is beyond your means. The needier you are, the more likely that you will be eligible college loans and other financial aid.

Advantages of Private Student Loans

Although the cost of education has been constantly increasing, there are many ways that suggest that money need not be a hindrance for those who wish to acquire a degree from a college or a university. Student loans are created to achieve this purpose and the loans are of many types, of which private student loans are the most flexible. The greatest advantage of private student loans is that they are quite uncomplicated and are finalized in a matter of few days, say within a week, unlike the other student loans. Private student loans are offered to students with bad credit history or no credit history. There is neither application filling procedure nor any closing dates. The upper limit to avail a private student loan is also much higher than the federal loans. If the loan amount is small, it needs no co- signer but if it is sufficiently high, a co- signer, usually the parent's is essential. Generally, the private student loans are availed when the student is not able to meet the educational expenses through federal student loans. Since the private student loan lenders do not get any subsidy from the government like the federal student loans do, the interest rates are a little higher. Private student loans are also used to refinance the federal student loans at a lower interest rate. More than one private student loan can be applied and consolidated and along with other educational expenses, laptop and the like accessories can be purchased. There are some conditions to apply for a private student loan. The student has to be enrolled at a half- time in a certificate, degree or technical program. He or she must be a US resident and a permanent resident at that and the credit score should be high and must have already utilized a federal student loan. Some private student loan companies state that the repayment scheme depends upon the school year during which the financial aid is applied for. The academic performance of the student and the financial situation of the family are also taken into consideration. However, it is better to search the internet for a thorough knowledge of the various companies offering private student loans and their terms and interest rates and their repayment schemes. It is better if the company is a reputed one which would place the student in a comfortable position. So, finance need not be a hurdle for those who wish to complete a degree from a college or university and private student loans guarantee that the student becomes successful in accomplishing the dream of his or her life. The private student loans ward off the sleepless nights considering the educational expenses and concentrate more on the academics.

A comparison between Federal and Private Student Loans Consolidation Rates

There are a lot of types of loans for students to select, such as Subsidized Stafford Loans, Unsubsidized Stafford Loans, Plus Loans for parents, Next students private loans, and Federal consolidation loans. Among them, Private and Federal are two sorts of loans that students all well know and pay much attention to. And one of the most essential things to deal in choosing of loan is to make a comparison among student loan consolidation rates. Thus here below we would like to point out the similarities and differences between the two sorts: Federal and Private Student Loans Consolidation for students to have a better choice.Firstly, let us make sense of an overview about these two types of loans. Private student loan consolidation is a good way to significantly reduce your monthly loan payments by gathering all your private student loans into one manageable loan. It assists decrease the stress of multiple payments, and helps you to budget accordingly to meet your payment as well as your interest rate. Regarding the Federal Student Loan Consolidation rates, it is designed to assist you with managing your student loan debt. It permits you to combine multiple student loans together, hence having one loan payment and loan holder. Your consolidating loaner merges your existing loans into a new single loan called a Federal Consolidation Loan.Consequently, there are plentiful differences between these two kinds of loans. First Of All, the owners of Federal Consolidation Loan are almost students while those of Private loans vary by loans. Secondly, the Federal Consolidation Loans claims neither credit check nor cosigner meanwhile the borrower or co-signer of Private loans must meet credit demands.Take a look at Eligibility Criteria; we can see that Federal Consolidation Loan eligibility is dependent on loan type whereas it differs by loan of Private Student Loans. What's more, the Federal Student Consolidation Loan Interest Rate starts at 3, 5 % meanwhile that of Private Student Loans varies by loan.As you probably know, there's no discount for Private loans. On the other hand, there's 0.25% with automatic debit and 1% after 36 consecutive on-time payments in Federal Consolidation Loan. Also, there is the difference in Annual Loan Limits criterion between these two types. In details, the yearly loan limit of Private loans can go up to $45,000. Nevertheless, there's no limit in Federal Consolidation Loan. Lastly, we should all know the fact that Federal Consolidation Loan repayment starts up to 60 days after funding and it lasts to 30 years. Regarding Private loans, that varies by loan and the lasting year is 5 year less, only up to 25.Despite the differences between Federal and Private Student Loans Consolidation Rates, there are several similarities of these two kinds. Luckily, there is no guarantee fee for both of them. What's more, no prepayment penalties exist.To conclude by taking an overview of the two kinds of loans as Federal and Private Student Loans Consolidation Rates, students are able to choose their better choice for the loans they are going to have.For more details, view student loan consolidation rates to search for Federal and Private Student Loans Consolidation Rates.

Are Student Loans Becoming Required Evils

When it comes to getting a college education most people can agree that the costs can be staggering at best. Even the least expensive colleges in the nation can add up over a four or five year period of time creating crippling debt for those who do not qualify for some of the better grant programs of substantial scholarships. The problem lies in the fact that the parents of most traditional college students make too much money to qualify for the free financial aid that is needs based and very few qualify for the limited number of scholarships that are available to students based on merit. Even among those that qualify competition and fierce and there are no guarantees. Enter the student loan. There are all kinds of student loans and unfortunately with rising costs associated with college attendence and the growing necessity of a college degree for success in this country it is becoming more and more difficult to pay the price that is associated with higher education.There are three types of loans that are commonly found for college students. They include federal student loans, federal plus loans, and private student loans. Each type of loan has advantages and disadvantages that are unique to that particular loan. Below I will give a little information about each of the loan types and whom they may benefit. Student loans. There are three different types of student loans: subsidized, unsubsidized, and Perkins loans. Perkins loans are only available to students who display exceptional financial need. These loans are available at a 5% interest rate and are available to both graduate and undergraduate students. Perkins loans are extended through the university you attend and will be repaid to the university unlike the other types of student loans, which are repaid to the lending agency. Subsidized student loans are loans in which the interest is deferred until graduation or you cease to be a qualifying student. What this means is that while you are responsible for repaying the loan upon graduation the interest on these loans does not begin to accrue until your begin repayment 6 months after graduation or your cease to be at least a half time student of the university. You must qualify based on your income in order to receive a subsidized student loan. While the needs requirements for these loans isn't as grave as those required in order to receive a Perkins loan you must still qualify.Unsubsidized student loans do not require qualification on a needs basis. You must be a student and enrolled at least half time in order to receive an unsubsidized student loan. The good news however for those who do not qualify based on needs for other student loan options is that this type of loan is available to all qualifying students regardless of need. The interest on these loans however begins to accrue immediately, which means they can really add up over time. PLUS loans are loans that are taken out by the parents of students who need the funds in order to cover educational expenses. The maximum amount that can be borrowed is the cost of attendence minus any financial aid awards the student has already received. The repayment on these loans begins 60 days after the loan is dispersed and the repayment period can be up to 10 years.In order to cover the costs involved in education that go above and beyond what the government recognizes as acceptable college related expenses you can opt to go the route of private student loans rather then relying solely upon federal financial aid for your student loan source. These loans require that you qualify in order to receive them based on your credit rather than your need and must be used for educational purposes only. With these particular loans you really need to make sure you read all the fine print as different companies offer different conditions and different perks. You should really take the time and compare prices and options before taking out a private student loan and this should be done only as a last resort.Student loans for many can be the difference in attending college and getting the education you are hoping for and not being able to pay the high costs that go along with higher education. For this reason you should treat them with respect and not take them lightly.

5 Benefits of Student Loan Consolidation

Are you sick of paying interest on your per month student loans with no conclusion in sight? Scared of cash-flow difficulties which might prevent you against having to pay your own student financial loans promptly? I understand I was as well as there's a solution to this trouble. It's known as college student loan combination.What is Student Loan Combination?College student loan combination simply signifies bringing together all your university student financial loans into a single mortgage with a per month check strategy. Successfully, all of your prior university student loans are usually written off plus a new university student mortgage is actually created which you have in order to pay out off per month.Rewards associated with University student Mortgage Consolidation

Here are some of the benefits of college student mortgage combination1. Lower month-to-month payments Through bringing together all your student loans in to one loan, you only will need to pay off one mortgage month-to-month as opposed to several student loans per month. Thus, your own per month check is gloomier2. Spend just 1 loan monthly as opposed to many university student financial loans monthly. It can be a lot easier if you've to manage just 1 college student loan instead of several college student loans with diverse payment deadlines. Additionally, at times along with several college student financial loans, you may possibly ended up forgetting to pay out a single university student loan.3. Reduced, fixed interest rate By consolidating your own student loans, you will have the ability to get benefits associated with low, fixed attention prices. Presently, by law, college student loan combination rates can't exceed eight.25%. Moreover, nationwide interest costs have reached a 40-year low consequently this is a good time to have 1.4. Absolutely no charge card verify or even digesting fees Absolutely no credit card verify is necessary throughout the using a student mortgage combination. The actual check plans and terms are generally quite flexible in that they'll colorize it for you according to your financial standing.5. Help to make month-to-month college student loan check in electronic format. Whilst it can be not really necessary to produce payment in electronic format, the majority of loan companies will knock.

25% away your university student mortgage costs in case you help to make check electronically. Also, using immediate money from your bank account may stop you against neglecting to produce a check.Occasionally it may obtain very confusing regarding the certification of trying to get the college student loan combination. The established stand from the federal government is college students who are still in their grace time period or who're nevertheless studying in school may possibly be eligible for a federal government college student mortgage consolidation.

The actual authorities college student loan combination nowadays are very aggressive when compared with private field, therefore I'd recommend going for a authorities college student mortgage consolidation. With the many advantages associated with getting the university student mortgage consolidation, it is very obvious to save cash within the long run would be to obtain one.

Student Loan Interest

Who say interested of loans is high..?
You can know how loan work and how useful of loan. Many of us always get drop because interest of loans is so high, but that is a big deal.
We can use loans as our capital and pay it half by half. We can use win win solution with loans provider.
As a parent or student, the need to be informed about the benefits of student loans, the extremely low interest rates, and the tax benefit they provide has increased tremendously over the last few years as education costs have risen, and the need for every deduction and credit has also increased. The Internal Revenue Service and the US government have now included student loan interest as a tax deductible item on the personal tax return. The second, and perhaps most important reason, is due to the fact that interest rates on student loans are beginning to climb, several percentage points. As of August 1, 2005, the previous cap on the maximum student loan interest rate was repealed, and the new rates went into effect; what is the effect on existing student loans? What will the effect be on new student loans? How does this affect the bottom line of the students or parents tax return? These are questions that parents and students alike are seeking the answers to, prior to the rate change. Many of the organizations that offer student loan consolidation programs urged students to consolidate existing loans in order to lock in the low interest rate, while still available, as the new rates would definitely impact tax returns as the student begins to repay the loan, or the parent repays the loan.Interest rates on federally subsidized loans do not have the tremendous impact on a student's finances when compared to unsubsidized or private issue loans. Deferred payment loans that also defer interest payments can generate extremely large additional amounts of debt for a student borrower because the loan is accruing interest on interest charges. Now, can you see how a change in interest rates would have a huge affect on student loans and student taxes?In order to promote the advancement of continued education, the government has, over the last several years allowed the interest paid on student loans be a deduction on your tax return. This has helped ease some of the expense of college, but it isn't a direct form of relief. The individual claiming the deduction simply gets a portion of the interest deducted on their itemized schedule of deductions; it's not a dollar for dollar credit. Deferred payment loans originally existed to create a buffer for the student borrower trying to attend school and work enough to keep up daily needs. Deferred payment allows the students to borrow, attend school without the worry of monthly loan payments, and then assume the responsibility for monthly payments upon completion of their degree. The government offers deferred payment loans to students in two forms, subsidized and unsubsidized. The subsidized loans are for students with a demonstrated financial need; the government pays the interest accrued until the student has finished or left school. Unsubsidized loans are not need based; the student is responsible for interest as it accrues on the loan. Either way, the interest is taken care of and paid monthly.There are lenders today, who offer deferred payment loans simply because of the income they generate for the institution extending the loan. Students, who do not pay interest as it accrues, will pay interest charged on their interest balance each month. Many reputable lenders see this as an exploitation of the student, and do not even offer such a product. Private loan products offered through lending institutions, where there are no federal lending requirements associated with this particular loan product and the student's school status in relation to financial need, have made a business of deferred payment loans. These very profitable loan products are often offered to students, who do not realize or necessarily understand the concept of the interest charge incurred on interest accrued. Deferred payment loan products offered within the boundaries of the federally subsidized or unsubsidized guidelines are tremendously helpful to students and parents during these lean years of college funding; some of the private loan products, however, merely take advantage of the financial needs of student borrowers. Read carefully the terms and conditions of your loan and if offered the opportunity, make interest payments as the interest accrues. Your student loan debt at the end of the deferment period will be much smaller if the interest due each month has not been added to the amount due each month. In this way, you are only making interest payments, which are easily affordable, and you get to deduct the interest each year from your tax return.

Student Loans

Student loans are loans offered to students to assist in payment of the costs of professional education. Student loans debt being unlikely to be the largest debt owed by a person may be best managed in consolidated student loans. Student loans still pose plenty of pitfalls. Student loans as part of a government initiative help these students by means of financial aid. Student loans are an important consideration for many reasons, not least the fact that, if you take on too many hours with a part-time or full-time job, your studies may suffer as a result.

Loans are money you borrow that you must repay with interest. Loans that offer an alternative for parents of students with insufficient financial resources to cover education costs. Loans are the option but decide whether it is federal student loans or private student loans that are better. Loans can also be used to supplement federal loans, when federal loans, federal grants and other forms of student financial aid are not sufficient to cover the full cost of higher education. Private Education Loans If federal aid doesn't cover the total cost of your education, Next Student could still help you get the money you need with a private loan. A fourth type of education loan, the consolidation loan, allows the borrower to lump all of their loans into one loan for simplified payment.

Interest of An education loan is a form of financial aid that must be repaid, with interest. Interest rates are unlikely to drop enough over the next year or so to make it worthwhile to wait to consolidate. Interest rates are below market, there's no collateral and repayment usually begins only after graduation. Interest rates on student loans will be significantly reduced; a change that will affect over 5 million middle-income students who are borrowing subsidized. Interest you paid on a loan if, under the terms of the loan, you are not legally obligated to make interest payments. The loan calculators offer estimates of monthly loan payments, estimates of the amount of debt you can afford to repay, an analysis of the cost of capitalizing the interest and tools for comparing loan costs. The interest rate reduction will begin when automatic principal and interest payments start, and will remain in effect as long as automatic payments continue without interruption. These loans usually carry a lower interest rate than other loans and are usually issued by the government.

Student loans are one of the most common financial arrangements made by students to ease the financial burden of studying. Private student loans are unsecured, credit-based loans available to undergraduate, graduate and continuing education students for tuition, fees, supplies, computers and living expenses. Anyone with qualifying federal student loans or federal parent loans is eligible for student loan consolidation. Many students turn to part-time jobs or student loans. Interest rates on student loans will be significantly reduced; a change that will affect over 5 million middle-income students who are borrowing subsidized.