Student Loan AdviceStudent Loan AdviceThis site is all about helping you get rid of student loan debt. Two out of every three graduating seniors now have student loans to pay off! I plan on talking about loans and loan companies, debt collectors and debt consolidation. I'll also cover i Articles
529 - Part 6
2008-01-07 18:05:00 Is there any way to purchase a 529 plan but avoid some of the extra fees?Direct-Sold College Savings PlansStates offer college savings plans through which residents and, in many cases, non-residents can invest without paying a "load," or sales fee. This type of plan, which you can buy directly from the plan's sponsor or program manager without the assistance of a broker, is generally less expensive because it waives or does not charge sales fees that may apply to broker-sold plans. You can generally find information on a direct-sold plan by contacting the plan?s sponsor or program manager or visiting the plan?s website. Websites such as the one maintained by the College Savings Plan Network, as well as a number of commercial websites, provide links to most 529 plan websites. Broker-Sold College Savings PlansIf you prefer to purchase a broker-sold plan, you may be able to reduce the front-end load for purchasing Class A shares if you invest or plan to invest above certain threshold... More About: Part
529 - Part 5
2008-01-06 22:02:00 More about fees:Many broker-sold 529 plans offer more than one class of shares, which impose different fees and expenses. Here are some key characteristics of the most common 529 plan share classes sold by brokers to their customers:* Class A shares typically impose a front-end sales load. Front-end sales loads reduce the amount of your investment. For example, let?s say you have $1,000 and want to invest in a college savings plan with a 5% front-end load. The $50 sales load you must pay is deducted from your $1,000, and the remaining $950 is invested in the college savings plan. Class A shares usually have a lower annual distribution fee and lower overall annual expenses than other 529 share classes. In addition, your front-end load may be reduced if you invest above certain threshold amounts ? this is known as a breakpoint discount. These discounts do not apply to investments in Class B or Class C shares. * Class B shares typically do not have a front-end sales load. Instead, the... More About: Part
529 - Part 4
2008-01-05 21:37:00 What fees and expenses will I pay if I invest in a 529 plan?It is important to understand the fees and expenses associated with 529 plans because they lower your returns. Fees and expenses will vary based on the type of plan. Prepaid tuition plans typically charge enrollment and administrative fees. In addition to ?loads? for broker-sold plans, college savings plans may charge enrollment fees, annual maintenance fees, and asset management fees. Some of these fees are collected by the state sponsor of the plan, and some are collected by the financial services firms that the state sponsor typically hires to manage its 529 program. Some college savings plans will waive or reduce some of these fees if you maintain a large account balance or participate in an automatic contribution plan, or if you are a resident of the state sponsoring the 529 plan. Your asset management fees will depend on the investment option you select. Each investment option will typically bear a portfolio-weighted... More About: Part
529 - Part 3
2008-01-04 21:33:00 How does investing in a 529 plan affect federal and state income taxes?Investing in a 529 plan may offer college savers special tax benefits. Earnings in 529 plans are not subject to federal tax, and in most cases, state tax, so long as you use withdrawals for eligible college expenses, such as tuition and room and board. However, if you withdraw money from a 529 plan and do not use it on an eligible college expense, you generally will be subject to income tax and an additional 10% federal tax penalty on earnings. Many states offer state income tax or other benefits, such as matching grants, for investing in a 529 plan. But you may only be eligible for these benefits if you participate in a 529 plan sponsored by your state of residence. Just a few states allow residents to deduct contributions to any 529 plan from state income tax returns.If you receive state tax benefits for investing in a 529 plan, make sure you review your plan?s offering circular before you complete a transactio... More About: Part , Part 3
529 - Part 2
2008-01-04 18:01:00 What are the differences between pre-paid tuition plans and college savings plans?Pre-paid tuition plans generally allow college savers to purchase units or credits at participating colleges and universities for future tuition and, in some cases, room and board. Most prepaid tuition plans are sponsored by state governments and have residency requirements. Many state governments guarantee investments in pre-paid tuition plans that they sponsor.College savings plans generally permit a college saver (also called the ?account holder?) to establish an account for a student (the ?beneficiary?) for the purpose of paying the beneficiary?s eligible college expenses. An account holder may typically choose among several investment options for his or her contributions, which the college savings plan invests on behalf of the account holder. Investment options often include stock mutual funds, bond mutual funds, and money market funds, as well as, age-based portfolios that automatically shift tow... More About: Part
529
2008-01-03 21:20:00 What is a 529 plan?A 529 plan is a tax-advantaged savings plan designed to encourage saving for future college costs. 529 plans, legally known as ?qualified tuition plans,? are sponsored by states, state agencies, or educational institutions and are authorized by Section 529 of the Internal Revenue Code.There are two types of 529 plans: pre-paid tuition plans and college savings plans. All fifty states and the District of Columbia sponsor at least one type of 529 plan. In addition, a group of private colleges and universities sponsor a pre-paid tuition plan.(Source: www.sec.gov/investor/pubs/intro529.htm)
The International Student Loan Center
2008-01-03 17:10:00 Around 800,000 students go to college outside their country each year. International Student Loan .com is a student loan resource for US students who want to study abroad as well as foreign student enrolling in the states.Their products include:International Student Loans Study Abroad Loans Foreign Enrolled Loans for US Citizens International Stafford Loans for US Citizens CanHelp Loan for Canadian Citizens InternationalStudentLoan.com is owned by Envisage International Corporation and currently has a "Satisfactory Record" with the Better Business Bureau. More About: The International , Center
National Student Loan Data System
2008-01-03 17:00:00 DO you need information about the student loan you currently have? You can go here to the National Student Loan Data System to retrieve your information online.The National Student Loan Data System (NSLDS) is the U.S. Department of Education's (ED's) central database for student aid. NSLDS receives data from schools, guaranty agencies, the Direct Loan program, and other Department of ED programs. NSLDS Student Access provides a centralized, integrated view of Title IV loans and grants so that recipients of Title IV Aid can access and inquire about their Title IV loans and/or grant data.
Student Loan Consolidation Checklist
2007-12-21 20:47:00 The very first step: Take inventory of your student loans.For information on your student loans, review your loan documents, and contact your lender or loan servicer. If you are uncertain of your current lenders or loan servicers, you can find them by going to www.nslds.ed.gov.Monthly Payment AmountIf you are not in repayment status yet, estimate your monthly non-consolidated loan payment based on the current interest rate and your loan balance. You can get payment amounts by calling your lender or loan servicer.Next Steps* Determine whether your monthly payment exceeds the percentage of your income to be allocated to student loan payment. This percentage should be based on a realistic budget. (If payment exceeds monthly allocation, reevaluate budget and assess income situation.)* Consider deferment or forbearance option for short-term payment relief needs. (If debt relief needs are long term, consider consolidation.)* Select loans for consolidation. * Determine monthly payment and... More About: Student , Loan , Dati , Soli
End of the year news
2007-12-21 18:33:00 AACRAO.com has reported on year end Omnibus bills that Congress has passed.Concerning education financial aid:In addition, Democrats were able to secure funding for several favored programs President Bush hoped to eliminate. Supplemental Educational Opportunity Grants (SEOG), Perkins Loans, and the Leveraging Education Assistance Programs (LEAP) will all be spared, although their budgets will be significantly tighter than in fiscal year 2007. More About: News , Year
Student Loan Consolidation - Next Student
2007-12-21 16:21:00 When choosing a student loan consolidation program, you need to carefully examine the company you're dealing with so you don't get burned. Here's one I recommend: Next Student Next Student has been Better Business Bureau accredited since 2004 with a satisfactory record for at least the past year. According to the BBB, at this time, Next Student does not have an unusual volume of complaints, or any government actions involving its marketplace conduct.Over the past 3 years, there have been 45 BBB complaints and 28 of them were closed last year. Next Student has been in existence since 1992.Contact InformationNext Student Inc. 19601 N. Black Canyon Highway Phoenix, AZ 85027 Telephone: (623) 879-5026 Fax: (602) 993-7417 More About: Loan , Dati , Soli
Perkins Student Loan
2007-12-20 18:52:00 If you're applying for student financial aid and you fit into the extreme financial need category, this loan is for you.Features:* 5% interest rate with no origination or default fees* Maximum yearly loan: $4K undergraduate and $6K graduate programs* Total limit: $20K undergraduate and $40K graduate* Repayment starts 9 months after graduation OR dropping below half time enrollment* 10 year repayment planTo qualify for a Perkins Student Loan , you must fill out an FAFSA (Free Application for Federal Student Aid). The financial aid office of the school you apply for with use that information to determine if you qualify for the extreme need Perkins Loan. Check with the university financial aid office for application deadlines.
Miscellaneous Questions
2007-12-18 22:34:00 How long does it take to consolidate my loans once I submit my application?The consolidation process generally takes 60-90 days. Using our online Web application can reduce the amount of time it takes to consolidate a borrower's loan.When can I expect my first bill?Borrowers will receive bills from the Direct Loan Servicing Center within 60 days of the first disbursement of their Direct Consolidation Loan.How do I make payments?Borrowers receive monthly billing statements from the Direct Loan Servicing Center, unless they enroll in the Electronic Debit Account (EDA). Borrowers receive a 0.25 percent discount on their interest rate for as long as they continue to make payments using EDA. Borrowers must keep the Direct Loan Servicing Center informed of changes of address and to their names. Borrowers are responsible for making payments on time regardless of whether they receive billing statements. Borrowers should send payments to: U.S. Department of EducationDirect Loan Payment Cen... More About: Questions
Can I change repayment plans?
2007-12-18 17:30:00 Yes. Most borrowers may change repayment plans at any time. Borrowers who are required to repay under the ICR plan must make three consecutive monthly payments before switching to another plan. There is no limit to the number of times borrowers may change plans.A borrower may change to the ICR plan at any time. After the switch, the borrower's repayment period will be 25 years, less any time spent in the ICR and the Standard repayment plan. Time spent in several other plans may not count towards the 25 year maximum.A borrower may change to another plan as long as the new plan has a repayment term longer than the amount of time the borrower has already spent in repayment. The new repayment term is determined by subtracting the amount of time a borrower has spent in repayment from the term allowed under the new plan.(Source: loanconsolidation.ed.gov) More About: Change , Plans
How is the amount of my payment calculated under the ICR plan?
2007-12-17 21:27:00 The ICR Plan is designed to keep payments affordable. Generally, borrowers pay the lesser of: the amount they would pay if they repaid their loan in 12 years, multiplied by an income percentage factor that varies with their annual income, or 20 percent of their discretionary income (AGI minus the poverty level for their family size) Under the ICR plan, the monthly payment is $0 for borrowers with family incomes that are less than or equal to the U.S. Department of Health and Human Services poverty level for their family size. Borrowers whose calculated monthly payment is greater than $0 but less than $5 are required to make a $5 monthly payment. Other borrowers must pay the calculated monthly payment.Until the Department receives income information from the IRS or alternative documentation of income, borrowers' monthly payments are equal to the interest that accrues each month. If they are unable to make the interest-only payments, borrowers may request a forbearance until the firs... More About: Payment , Calculate
Income Contingent Repayment (ICR) Plan
2007-12-17 17:24:00 The ICR Plan gives borrowers the flexibility to meet their obligations without causing them financial hardship. Monthly payments are based on borrowers? annual Adjusted Gross Income s (AGI), loan balance and family sizes. Income is obtained from the Internal Revenue Service (IRS) or from an Alternative Documentation of Income Form (discussed below) submitted by the borrowers. To participate in the ICR Plan, borrowers (and if married, their spouse) must sign the Income Contingent Repayment Plan Consent to Disclosure of Tax Information Form. This authorizes the IRS to release borrowers' income information to the Department of Education to calculate monthly payments. Monthly payments are adjusted annually to reflect inflation, family size and income.Monthly payment amounts for some borrowers may not be enough to cover the interest accruing on their loans. This situation is referred to as negative amortization. In such cases, the unpaid interest is capitalized and added to the principal... More About: Gent
Extended Repayment Plan
2007-12-16 22:23:00 To qualify for this plan, your Direct Loan balance (your new Direct Consolidation Loan Amount plus other Direct Loans) must be greater than $30,000. Your plan options are: Fixed Monthly Payment Option - Under this plan, you will pay a fixed amount of at least $50 each month for up to 25 years. Repayment under this plan will result in lower total interest paid when compared to graduated plans with similar terms. Graduated Monthly Payment Option - Under this plan, you will pay a minimum payment amount of at least $50 or the amount of interest accrued monthly, whichever is greater, for up to 25 years. Your payments start out low and then increase every two years. Repayment under this plan may provide lower initial monthly payments, although the total interest paid may be greater when compared to plans with similar terms with fixed payments. This plan may be beneficial if your income is low now but is likely to steadily increase.**Extended repayment terms are available to Direct Loan bo... More About: Plan
Graduated Repayment Plan
2007-12-15 22:22:00 Under this plan, you will pay a minimum payment amount at least equal to the amount of interest accrued monthly for up to 10 to 30 years, based on your total education indebtedness. Your payments start out low, and then increase every two years. Generally, the amount you will repay over the term of your loan will be higher under the Graduated Repayment Plan than under the Standard Repayment Plan. This plan may be beneficial if your income is low now but is likely to steadily increase.(Source: loanconsolidation.ed.gov)
Standard Repayment Plan
2007-12-14 21:21:00 Under this plan, you will pay a fixed amount of at least $50 each month for up to 10 to 30 years, based on your total education indebtedness. This plan may result in lower total interest paid when compared to repayment under one of the graduated plans.If you have not selected a repayment plan by the time repayment begins, your loan(s) will be placed on the Standard Repayment Plan .(Source: loanconsolidation.ed.gov)
What are the repayment plans?
2007-12-14 17:31:00 Standard Repayment Plan:You will pay a fixed amount each month until your loan(s) are paid in full. Your monthly payments will be at least $50 for up to 10 to 30 years, based on your total education indebtedness. Graduated Repayment Plan:Your minimum payment amount will be at least equal to the amount of interest accrued monthly. Your payments start out low, and then increase every two years for up to 10 to 30 years, based on your total education indebtedness Extended Repayment Plan:To be eligible, your Direct Loan balance must be greater than $30,000 and you will have up to 25 years to repay your loan(s). You have two payment options: Fixed Monthly Payment Option -You will pay a fixed amount each month until your loans are paid in full. Your monthly payments will be at least $50. Graduated Monthly Payment Option - Your minimum payment amount will be at least $50 or the amount of interest accrued monthly, whichever is greater. Your payments start out low, and then increase every tw... More About: Plans
What are the consequences of defaulting?
2007-12-13 22:15:00 Borrowers who fail to make a payment on time are considered delinquent on their Direct Consolidation Loans. Borrowers who do not make payments for 270 days are in default. Defaulting has severe and long-lasting consequences, as follows:1) The Department of Education can immediately demand repayment of the total loan amount due. 2) The Department of Eduction will attempt to collect the debt and may charge collection costs. 3) The Department of Education reports defaulted loans to national credit bureaus, damaging borrowers? credit ratings and, making it difficult for borrowers to make purchases such as cars or homes. 4) Borrowers with loans in default are ineligible for Title IV student aid. 5) Borrowers with loans in default are ineligible for deferments. 6) The Internal Revenue Service can withhold borrowers? Federal income tax refunds. Borrowers' wages may be garnished. It is important that borrowers with Direct Consolidation Loans stay in touch with the Direct Loan Servicing Cen... More About: Consequences , The Con
Should I rehabilitate before consolidating my defaulted loan?
2007-12-13 17:40:00 Rehabilitation or Consolidation?There are many benefits to rehabilitating a defaulted loan before consolidation. If you consolidate a defaulted loan without rehabilitating it, your credit record continues to show a default status on the loan. This is true even after the consolidation loan pays off the defaulted loan in full.Consolidating a defaulted loan will result in your credit report bearing the notation that the loan was in default but then "paid in full." This notation will remain on the credit report for up to seven years. While a "paid in full" notation is preferable to an unpaid default, , there is still the possibility that lenders will deny you future credit, such as mortgages, auto loans, or credit cards because of this notation. However, if you rehabilitate a defaulted loan before consolidating it, the loan holder will update your credit record to no longer reflect the default status of the rehabilitated loan(s). Rehabilitating a defaulted Direct Loan or FFEL loan requ... More About: Dati , Soli
Can I consolidate my loans that are in grace?
2007-12-11 22:59:00 Yes, Borrowers who consolidate loans that are in grace may receive a lower interest rate on their Direct Consolidation Loans if they are consolidating variable rate loans. However, once grace status loans are consolidated borrowers lose any remaining grace period. Borrowers receive their first bills within 60 days after the new Direct Consolidation Loan is made.The timing in which an application is submitted is important:Loans first disbursed on or after July 1, 2006 have fixed interest rates. While borrowers with fixed interest rate loans can consolidate while in grace, there is no benefit to do so since the interest rates for in-grace and in-repayment are the same. Borrowers with variable interest rate loans should apply for Direct Consolidation Loans while their loans are in the grace status in order for them to receive the possible interest rate benefit. Since repayment begins within 60 days of the day the Direct Consolidation Loan is made, borrowers should not apply too early i... More About: Grace , Soli
Can I consolidate an existing consolidation loan?
2007-12-11 22:58:00 Yes, under two conditions.A borrower can consolidate existing consolidation loans into a new Direct Consolidation Loan if the borrower includes at least one other FFEL or Direct Loan into the new consolidation loan. A borrower can conslidate a single FFEL consolidation loan if the FFEL consolidation loan is in default status or has been submitted to a guaranty agency for default aversion by the borrower's loan holder.(Source: loanconsolidation.ed.gov) More About: Dati , Soli
Can I Consolidate a Defaulted Loan?
2007-12-11 19:00:00 Generally, Federal education loan(s) in default may be consolidated in a Direct Consolidation Loan if borrowers: Agree to repay the loan(s) under the Income Contingent Repayment Plan. ORMake satisfactory repayment arrangements with the current loan holder(s). If, before applying for consolidation, borrowers who want to completely clear the default notation from their credit records, they may want to consider another option: loan rehabilitation. Borrowers should contact their loan holders to obtain more information about this option.Borrowers cannot consolidate defaulted loans under these conditions: 1) If a judgment has been issued against a defaulted loan, it cannot be included in the consolidation unless the judgment order has been vacated (dismissed). 2) If they are trying to consolidate defaulted Direct Consolidation Loans. 3) If they are trying to consolidate defaulted FFEL Consolidation Loans unless they have made satisfactory repayment arrang... More About: Soli
Can I consolidate my loans if I am enrolled in school?
2007-12-10 22:57:00 Yes and No. Effective for Direct Consolidation Loan applications received on or after July 1, 2006, borrowers who are enrolled in school cannot consolidate loans that are in an in-school status. These are loans that have not yet entered or used up the 6-month grace period entitlement.Borrowers still can consolidate loans that are in grace, repayment or deferment Borrowers can add loans to an existing consolidation for up to 180 days after the Direct Consolidation Loan was first disbursed. If more than 180 days has passed, borrowers can apply for a new Direct Consolidation Loan. The new consolidation loan can include the original Direct Consolidation loan and must include another eligible outstanding Federal education loan.Example: A borrower who has education loans stopped attending school for a year and the loans used up the 6-month grace period and entered repayment. The borrower returned to school and obtained a new loan. While enrolled, the borrower applies for a Direct Consolid... More About: Loans , School , Soli
Can I consolidate health professions loans?
2007-12-09 22:48:00 Yes, With a Direct Consolidation Loan, borrowers can include certain health profession loans sponsored through the U.S. Department of Heal th and Human Services with other Federal education loans in their Direct Consolidation Loan. Borrowers must include at least one Direct Loan or Federal Family Education Loan (FFEL) Program loan in the Direct Consolidation Loan. Eligible Health Professions Loans Health Professions Student Loans (HPSL) Health Education Assistance Loans (HEAL) Loans for Disadvantaged Students (LDS) Nursing Student Loans (NSL) Direct Consolidation Loans offer many advantages to borrowers of health professions loans. These include:a longer repayment period; a lower monthly payment; AND a single monthly payment When deciding to consolidate a health professions loans, consider the following advantages:Borrowers who have defaulted on a HEAL may include the collection costs and late fees in a Direct Consolidation Loan. These fees may not be included in HEAL Refinancing. Und... More About: Soli
PLUS and Perkins Loan Consolidation
2007-12-08 22:45:00 Can I consolidate a PLUS Loan ?Yes, PLUS Loans can be consolidated into a Direct Consolidation Loan.Can I consolidate a Perkins Loan?Yes, it is possible to consolidate Perkins Loans into a Direct Consolidation Loan if borrowers include at least one Direct Loan or Federal Family Education Loan (FFEL) in their request. Perkins Loans cannot be included in a Direct Consolidation Loan by themselves. Furthermore, all Perkins Loans consolidated into the Direct Loan Program will be included in the unsubsidized portion of the Direct Consolidation Loan.Borrowers should carefully weigh the advantages and disadvantages of including a Perkins Loan in a consolidation loan. While the borrowers gain the benefits of the Direct Consolidation Loan Program, they also lose the benefits associated with the Perkins Loan Program.We recommend that you consider the following points prior to making a decision: Perkins Loans are eligible for additional cancellation benefits, such as performing certain kinds of ... More About: Dati , Soli
Direct Consolidation Eligibility
More articles from this author:2007-12-07 22:37:00 To qualify for Dire ct Consolidation Loans, borrowers must have at least one Direct Loan or Federal Family Education Loan (FFEL) Program loan that is in grace, repayment, deferment, or default status. Loans that are in a in-school status cannot be included in a Direct Consolidation Loan. Borrowers can consolidate most defaulted FFEL and Direct Loan Program loans, if they make satisfactory repayment arrangements with their current loan holder(s) or agree to repay their new Direct Consolidation Loan under the Income Contingent Repayment Plan.Borrowers who do not have Direct Loans may be eligible for a Direct Consolidation Loan if they include at least one FFEL Loan and have been unable to obtain a Federal Consolidation Loan with a FFEL consolidation lender or have been unable to obtain a Federal Consolidation Loan with income-sensitive repayment terms acceptable to them.(Source: loanconsolidation.ed.gov) More About: Dati , Eligibility , Soli 1, 2, 3, 4 |
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