Student Loan Advice

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Student Loan Advice: Consolidation - Myth vs. Reality
2009-11-19 18:34:00
Good stuff from blog.studentloannetwork.com:There has been a lot written and said about federal student loan consolidation over the years. The point of this blog is to debunk three common mythes floating around the Internet about consolidation benefits.The consolidated interest rate changes every July 1.MYTH. The reality is variable rate Stafford loan rates are subject to change each July 1, which directly impacts your consolidated interest rates.Like a home mortgage I can refinance my student loans multiple timesMYTH. The realty is that it’s a one shot deal. When you consolidate your federal loans you are locked in for life at the interest rate. I know, seems pretty ridiculous doesn’t it?I need to consolidate within six months of leaving school or I’ll lose my eligibilityMYTH: Consolidating within six months may be beneficial to students with variable interest rate Stafford loans due to the fact that a lower interest rate is extended to you during that six month window (2% ve...
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Quick Student Loans - Don't be Hasty
2009-09-18 01:09:00
Google "fast student loans" or "quick student loans" and you'll find a link to thinkfinancial(dot)com as your # 1 result at the time of this writing. Go to that site and you'll only find a link to a SunTrust private student loan application page. Think about it. You're in a hurry to get money to go to college as soon as possible and before you know it; you are likely to be looking at SunTrust student loan application. Is SunTrust your best option in this situation? Let's investigate.Looking at an August 2009 review of student private loan providers, SunTrust ranked right in the center with 5 lenders below them and 5 rated above them. The best loans were all from federal credit unions. Before turning to a bank, definitely check out your neighborhood federal credit union for quick student loans.Before making this crucial money decision, there are other important issues you must consider. Try getting someone with a good credit score to co-sign the loan with you. Traditiona...
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Tips To Help You Apply For A Federal Student Loan
2009-09-03 00:07:00
1) Apply online using www.fafsa.ed.gov. 2) Check deadlines. Be aware of your state's and your school's application deadlines. While there is no deadline for applying for federal student aid, you should apply as early as possible after January 1 of each year that you will attend college. Some state and school aid is awarded on a first-come, first-served basis. 3) Collect the information you need to complete the FAFSA: * Your Social Security number and your parents' Social Security numbers; * Your driver's license number, if you have one; * Your alien registration number, if you are not a U.S. citizen; and * Your federal tax returns and income information 4) Check your FAFSA. After you complete the FAFSA, you will receive a Student Aid Report (SAR). Review the information carefully and make any necessary corrections. 5) Respond immediately to any request from your school for additional information.(Source: federalstudentaid.ed.gov)
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FFEL and Direct Loan Interest Rates Effective July 1, 2009
2009-09-02 23:15:00
Fixed Rates for Loan s First Disbursed on or After July 1, 2006Subsidized Undergraduate Loan: First Disbursed 7/1/2008 to 6/30/2009: 6.00% Subsidized Undergraduate Loan: First Disbursed 7/1/2009 to 6/30/2010: 5.60% Subsidized Graduate Loan: 6.80% Unsubsidized Undergraduate Loan: 6.80%Unsubsidized Graduate Loan: 6.80% Direct PLUS Parent Loan: 7.90%Direct PLUS Graduate Student Loan: 7.90%FFEL PLUS Parent Loan: 8.50%FFEL PLUS Graduate Student Loan: 8.50%Variable Rates for Loans First Disbursed Between July 1, 1998 and June 30, 2006These rates were calculated based upon statutory formulas and equal the bond equivalent rate of the 91-day Treasury bills auctioned on May 26, 2009, plus certain statutory percentage add-ons. The 91-day Treasury bills were auctioned at 0.178 percent, rounded to 0.18 percent.Subsidized (Repayment/Forbearance): First Disbursed 7/1/08 to 6/30/09: 4.21%Subsidized (Repayment/Forbearance): First Disbursed 7/1/09 to 6/30...
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Prioritizing your Debt
2009-04-11 07:06:00
I saw a good foundational article today at MSNBC on their Today page. If you have several different types of debt ? say, a credit card balance on a card with a 17% interest rate, a car loan with a 12% rate, and a student loan at 9% ? pay off the loan with the highest interest rate first. One strategy you may want to consider is stretching out your student loan payments over 15 years instead of 10 years by signing up for the Federal Direct Consolidation Loan program. (To see if you're eligible, call the Department of Education at 800-4FED-AID.) This will reduce your monthly student loan payment and leave you with extra cash. Use this money to pay off your credit card balance faster. Once you've gotten rid of your credit card debt, start paying off your auto loan faster. After you wipe out that loan, too, increase your student loan payments to at least their initial levels.If you're looking at a lot of debt, it's important to stay disciplined to these principals.
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U.S. Secretary of Education Margaret Spellings Takes Steps to Ensure Studen
2009-02-03 15:00:00
The U.S. Department of Education is ensuring students and their families continue to have uninterrupted and timely access to Federal student loans by taking steps to maintain stability in student lending through both the Federal Family Education Loan Program (FFELP) and Direct Loan Program."We recognize that the current economic situation has created real financial challenges for students and their families, who are increasingly concerned about how they can secure loans to help cover college costs," said Secretary Spellings. "I want to reassure students and their families that Federal student aid - both grants and loans - remains available to eligible students."As credit markets for student loans continue to tighten, there is a growing concern among schools, students and lenders about the availability of funds for the 2009-10 academic year. With lenders currently committing loan volume to schools for the upcoming academic year, the Department of Education, in coordination with the T...
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Student loan woes
2008-11-19 17:16:00
A survey administered by the scholarship-matching website FastWeb found that nearly half of student loan applications are being denied. According to the survey, one of the primary reasons students borrow private loans is because they have maxed out the federal Stafford Loan , a problem that has long been known to burden middle-income families. The survey shows that the government is failing to provide needed financial assistance.Nearly half of Stafford Loan borrowers who said they maxed out their federal loan stated that they had to turn to private loans as result. These figures show that the average middle-income student is starting or has started to face obstacles in obtaining college funding.Government has left the average middle-income family unable to finance higher education. Pell Grants are available for low-income students, but for middle-income students, the federal Stafford Loan has indeed become a scarce resource. Grants are often not offered to middle-income students, and...
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Paulson and Spellings Joint Statement
2008-11-11 22:38:00
Continuing constraints in our capital markets have posed challenges for students and student lenders throughout the last year. We recognize that education is the foundation of a strong American workforce and we must not let challenges in our capital markets hinder our students' opportunities. Given these ongoing concerns, the Administration is taking a series of steps to support the student loan market.Earlier this week, President George W. Bush signed H.R. 6889, the extension of the Ensuring Continued Access to Student Loans Act. We appreciate Congress providing the Department of Education, in coordination with the Treasury Department and the Office of Management and Budget, renewed temporary powers to use federal funds to ensure students and families continue to have access to student loans. The loan purchase and participation interest programs implemented over the last few months have helped ensure that Federal student loans were available to students enrolling in postsecondary ...
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Students Expect 10+ Years of Student Loan Debt
2008-10-29 13:39:00
CollegeGrad.com--the #1 entry level job site--today released its second annual survey results on how long college students anticipate it will take them to pay off their student loans. Fifty-one percent of student loan recipients say it will take them more than 10 years to pay off their student loans. Although last years numbers were similar, the 51 percent represents a five percent increase from three years ago. Considering the increase in interest rates for federal student loans, combined with the ever-increasing sticker price of a college education and a faltering economy, it's not surprising that students are faced with larger student loan bills upon graduation, and a lengthier payback period. "The financial pressures being placed on college graduates are growing each year," CollegeGrad.com Spokesperson, Adeola Ogunwole said. "Being weighed down with debt after college makes quickly finding a post-graduation job a priority for most students." With only a six-month grace period b...
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Community College Student Loan Rates
2008-08-01 18:51:00
As college tuition rates have increased, many two-year college students have been forced to take out loans. Because about one-quarter of two-year colleges do not participate in the federal loan program, these students are forced to take out private loans, which are riskier and more expensive; work while attending school; use credit cards; or, drop out of school. Of those students who completed a community college degree in 2003-04, 33% had student loans; the average amount was $9,061, according to an analysis of federal data by the Project on Student Debt.The American Association of Community College s, which represents 1,200 two-year institutions, claims that colleges do not participate in the federal loan program due to concern for the consequences of debt and default for students, especially those who take remedial classes, for whom dropout and default rates are higher. In addition, colleges participating in the program could be barred from other federal aid programs if too many o...
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Student Debt Q&A
2008-07-15 10:40:00
How you are assessed as a credit risk will be based on whether you defaulted on your student loan. Government income tax refunds can stop and you may acquire wage attachments if you fail to take your student loan seriously and default on it. If you follow a few simple guidelines you can easily avoid defaulting on your student loan. You can avoid defaulting on your student loan if you just stay in contact with the lender.If you let your lender know immediately you?re having problems, it?s unlikely you will need to default. I too had financial problems keeping up with the payments on loans I had acquired whilst a student. A few of my friends thought the situation was quite funny because they couldn?t see how the finance company could reclaim an education. Defaulted student loans usually start with this type of glib attitude towards the debt.To avoid defaulting on your loan, contact your lender before it gets to this stage. After everything, I just felt relief after the lender had agre...
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Key Things To Consider Before Taking a Student Loan
2008-07-14 22:35:00
by Sarah Parker (www.oneiricissues.com)The rising costs of college tuition have made it almost a necessity to apply for a student loan today. Student s not only have tuition costs, but the cost of books, meals, gas, cell phones, recreation, etc. The variety of student loans enables students to take care of their varying college expenses. A student loan however, is a loan that must be repaid under specified circumstances.The first thing you need to consider is your credit rating or credit history. A poor credit history can adversely affect your student loan application. Some lenders will look at your credit history; some don?t. It all depends on what kind of student loan you apply for. Thus, if you have a poor credit history, look into student loans that don?t consider your credit report or credit score a top requirement.Guaranteed Student Loan s, also known as Stafford Loans have a low interest rate. A student can apply for a subsidized or unsubsidized student loan. A subsidized loan ...
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Citigroup affiliate Student Loan Corp. to cut 89 jobs
2008-07-11 22:53:00
Student Loan Corp, a division of Citibank, plans to cut 89 jobs from its Perinton operation, the company said Thursday.The jobs represent almost one-quarter of Student Loan's local employment and their elimination is part of a company-wide restructuring and cost-cutting effort. Overall, 174 jobs are being cut, including some at Student Loan headquarters in Stamford, Conn., and at Citibank in South Dakota.Citibank's subsidiary is just one lender that is either slashing costs to stay in the student loan business or getting out of the business entirely because of new challenges in making a profit. Sallie Mae, the largest student lender, has already laid off about 1,000 employees.A statement on the planned cutbacks said Student Loan Corp. remains committed to the business and will provide the "same level of superior customer service that schools and borrowers have come to expect ... over the past 50 years."(more)
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Debt Consolidation Overview
2008-07-11 21:50:00
If you're in way over your head, debt consolidation is a viable option. You have to understand though that there is a tradeoff of easing your current pain. http://banking.about.com/od/loans/a/debtc onsolidate.htmDebt Consolidation ProgramsFrom Justin Pritchard,Your Guide to Banking / Loans.FREE Newsletter. Sign Up Now!Overview of Debt Consolidation ProgramsReaders are always asking about debt consolidation programs. What are they and what do you need to know about them? Debt consolidation programs are usually just a big loan that pays off other smaller loans. They can be very beneficial to borrowers, but these programs also have their pitfalls. When to Use Debt Consolidation Programs Debt consolidation programs are good for a few situations. If you are paying several different loans off, your life may be easier if you consolidate everything into one loan. You?ll only get one monthly statement and make one payment. Also, you?ll find that your monthly debt payments decrease if you ...

Beat the college loan crunch
2008-07-08 14:34:00
(Money Magazine) -- For families with children heading off to college, this has been the year from hell. First, a record number of applicants made 2008 the most competitive year ever for college admissions. Then the credit crunch hit the college market in a big way, igniting fears of a drought in financing for all students this fall.Spurred by dwindling demand for packaged loans from investors and cuts on federal subsidies, more than 100 lenders in the government college loan program have pulled out of the market. Private lenders are leaving the college market too - 27 so far. Those who remain are making it tougher to qualify for loans, while jacking up rates and reducing discounts.The result: If you're counting on a loan to pay tuition bills this fall, you're probably anxiously holding your breath, waiting to see if you'll be able to borrow what you need at a rate you can afford.Is it harder to get a student loan? Tell us.Well, Mom and Dad, you can officially exhale now. You'll...
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Can a PLUS Loan be discharged (canceled)?
2008-05-23 17:30:00
Yes, under certain conditions. A discharge (cancellation) releases your parents from all obligation to repay the loan.Your parents? PLUS Loan can?t be canceled for these reasons: You didn?t complete your program of study at your school (unless you couldn?t complete the program for a valid reason?because the school closed, for example), you didn?t like the school or the program of study, or you didn?t obtain employment after completing the program of study.For more information about loan discharge or repayment: If your parents have a Direct PLUS Loan, they should contact the Direct Loan Servicing Center at 1-800-848-0979, or go to www.dl.ed.gov. If they have a FFEL PLUS Loan, they should contact the lender or agency holding the loan.(Source: studentaid.ed.gov)

Is it ever possible to postpone repayment of a PLUS Loan?
2008-05-21 16:29:00
Yes, under certain circumstances, your parents can receive a deferment on their loans.If they temporarily can?t meet the repayment schedule, they can also receive forbearance on their loan, as long as it isn?t in default. During forbearance, their payments are postponed or reduced.Generally, the conditions for eligibility and procedures for requesting a deferment or forbearance apply to both Stafford Loan s and PLUS Loans. However, since all PLUS Loans are unsubsidized, your parents will be charged interest during periods of deferment or forbearance. If they don?t pay the interest as it accrues, it will be capitalized (that is, added to the principal amount of the loan, and additional interest will be based on that higher amount).

How do my parents pay back these loans?
2008-05-19 16:29:00
They'll repay a FFEL PLUS Loan to a private lender or loan servicer. They'll repay their Direct PLUS Loan to the U.S. Department of Education's Direct Loan Servicing Center. To read more about repayment options under both programs, read the PLUS Loans section in Funding Education Beyond High School: The Guide to Federal Student Aid.
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When do my parents begin repaying the loan?
2008-05-16 17:27:00
Generally, the first payment is due within 60 days after the loan is fully disbursed. There is no grace period for these loans. Interest begins to accumulate at the time the first disbursement is made. Your parents must begin repaying both principal and interest while you're in school.
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Other than interest, is there a charge to get a PLUS Loan?
2008-05-14 18:27:00
Your parents will pay a fee of up to 4 percent of the loan, deducted proportionately each time a loan disbursement is made. For a FFEL PLUS Loan , a portion of this fee goes to the federal government, and a portion goes to the guaranty agency (the organization that administers the PLUS Loan Program in your state) to help reduce the cost of the loans. For a Direct PLUS Loan, the entire fee goes to the government to help reduce the cost of the loans. Also, your parents may be charged collection costs and late fees if they don?t make their loan payments when scheduled.
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What's the PLUS loan interest rate?
2008-05-12 18:26:00
For PLUS Loan s disbursed on or after July 1, 2006, the interest rate is fixed (at 7.90 for Direct PLUS Loans and 8.50 percent for FFEL PLUS Loans). For PLUS Loans disbursed between July 1, 1998 and June 30, 2006, the interest rate is variable and is determined on July 1 of every year. For 2007-2008, the variable rate for these PLUS Loans (in both the Direct and FFEL programs) is 8.02 percent. Interest is charged on a PLUS Loan from the date of the first disbursement until the loan is paid in full.
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Who gets my parents' loan money?
2008-05-09 22:25:00
Either the U.S. Department of Education (for a Direct PLUS Loan ) or your parents? lender (for a FFEL PLUS Loan) will send the loan funds to your school. Your school might require your parents to endorse a disbursement check and send it back to the school. In most cases, the loan will be disbursed in at least two installments, and no installment will be greater than half the loan amount. The funds will first be applied to your tuition, fees, room and board, and other school charges. If any loan funds remain, your parents will receive the amount as a check or in cash, unless they authorize the amount to be released to you or to be put into your school account. Any remaining loan funds must be used for your education expenses.
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How much can my parents borrow?
2008-05-07 17:24:00
The yearly limit on a PLUS Loan is equal to your cost of attendance minus any other financial aid you receive. If your cost of attendance is $6,000, for example, and you receive $4,000 in other financial aid, your parents can borrow up to $2,000.
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How do my parents get a loan?
2008-05-05 17:32:00
For a Direct PLUS Loan , your parents must complete a Direct PLUS Loan application and promissory note, contained in a single form that you get from your school?s financial aid office.For a FFEL PLUS Loan, your parents must complete and submit a PLUS Loan application, available from your school, lender, or your state guaranty agency. After the school completes its portion of the application, it must be sent to a lender for evaluation.Also, your parents generally will be required to pass a credit check. If your parents don't pass the credit check, they might still be able to receive a loan if someone, such as a relative or friend who is able to pass the credit check, agrees to endorse the loan. An endorser promises to repay the loan if your parents fail to do so. Your parents might also qualify for a loan without passing the credit check if they can demonstrate that extenuating circumstances exist. You and your parents must also meet other general eligibility requirements for federal...
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PLUS Loans (Parent Loans)
2008-05-05 00:21:00
Parents can borrow a PLUS Loan to help pay your education expenses if you are a dependent undergraduate student enrolled at least half time in an eligible program at an eligible school. PLUS Loans are available through the Federal Family Education Loan (FFEL) Program and the William D. Ford Federal Direct Loan (Direct Loan) Program. Your parents can get either loan, but not both, for you during the same enrollment period. They also must have an acceptable credit history.(Source: studentaid.ed.gov)
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Federal Pell Grant
2008-05-02 22:14:00
A Federal Pell Grant , unlike a loan, does not have to be repaid. Pell Grants are awarded usually only to undergraduate students who have not earned a bachelor's or a professional degree. (In some cases, however, a student enrolled in a post-baccalaureate teacher certification program might receive a Pell Grant.) Pell Grants are considered a foundation of federal financial aid, to which aid from other federal and nonfederal sources might be added.How much can I get?The maximum Pell Grant award for the 2007-08 award year (July 1, 2007 to June 30, 2008) is $4,310. The maximum award for the 2008-09 award year (July 1, 2008 to June 30, 2009) is $4,731. The maximum can change each award year and depends on program funding. The amount you get, though, will depend not only on your financial need, but also on your costs to attend school, your status as a full-time or part-time student, and your plans to attend school for a full academic year or less.If I am eligible, how will I get the Pell...

President Barack Obama on CNN radio
2008-04-25 05:16:00
Obama speaks about his plans for student financing ... expand Pell Grants, cut out the middle men (... such as Sallie Mae), $4,000 tuition credit per year in exchange for community or national service, and finally curb university costsJust watch/listen between the 3:00 and 5:30 minute mark of this YouTube video.He speaks from personal experience with student debt. He said his and his wife's combined student loan debt coming out of law school was greater than their mortgage!
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Authority to purchase federal family education loans
2008-04-23 21:03:00
This is straight from today's White House Press Breifing:... recent credit market conditions have raised concerns in the student loan market among parents and some college students, and so the administration has been taking steps to prepare for the approaching student loan peak season of applications in July and August. Today Secretary Spellings, Secretary Paulson and Director Jim Nussle sent a letter to members of Congress urging prompt action to get the Department of Education authority to purchase federal family education loans to better ensure the availability for the upcoming academic year. The House recently passed a bill to provide this authority, and we urge the Senate to act promptly on the bill. Implementing this authority will take time, so it is imperative to move this legislation without delay if this authority is to be used in the upcoming school year. We do not want to see any students unable to attend universities this year because of the credit crunch, and that's ...
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Martin Lewis, How to survive financially as a student
2008-04-16 05:05:00
Awesome financial advice if you're currently in school. It's from the U.K. but it's for everyone.
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Student Loan Advice 'Concerns'
2008-04-10 18:40:00
U.S. News and World Report has posted an article expressing concerns about biased student loan advice on the internet. Along with blogs, they mention Christopher Penn's financial aid podcast from The Student Loan Network. But consumer advocates are concerned that students may not realize or consider that these educational messages are coming from people who want their business, not unbiased sources.First of all, I highly respect Penn's podcast. He provides a wealth of useful legitimate information. Of course, he's made a business out of it too.Second, pretty much everyone has a biased view to some degree. The U.S. News and World Report 'online' piece has advertisements on it directing you to 'biased' sources. So does my blog. Information is never totally free. The point is, even in the biased advice, there is golden information that may be of some use to you. The most unbiased source would be government web sites and that's only because they're tax payer funded.I ...
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