Student Loan Advice

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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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Teacher Loan Forgiveness Program
2008-03-12 02:20:00
To qualify for up to $5,000 loan forgiveness under this program you must not have had an outstanding balance on a FFEL or Direct Loan program loan as of October 1, 1998. To qualify for the increased amount of loan forgiveness up to $17,500 available for certain mathematics, science, and special education teachers, you must not have had an outstanding balance on a FFEL or Direct Loan program loan as of October 1, 1998, or on the date that you obtained a FFEL or Direct Loan program loan after October 1, 1998.Although a summary of the new requirements is provided below, for complete information about this program, contact the holder of your loan.To qualify, you must have been employed as a full-time teacher for five consecutive complete academic years in an elementary or secondary school that has been designated as a "low-income" school by the U.S. Department of Education.Additionally: * At least one of the five qualifying years of teaching must have occurred after the 1997-98 academ...
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Student Loan Forgiveness Programs
2008-02-27 21:59:00
The Congressional Research Service has a nice reference document called Student Loan Forgiveness Programs . This is a handy little document to read through during these troubled economic times.

Prince Gomolvilas
2008-02-22 17:11:00
So like the people at ScholarPoint Financial, Inc had a $5,000 video contest and this dude Prince Gomolvilas won it. Here's his winning video submission:$5K down and $25K to go. Always keep your eyes open for opportunities like that.
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Loan Rehabilitation
2008-02-20 22:23:00
You may want to consider rehabilitating your defaulted loan(s). Advantages of rehabilitation include:* Your loan(s) will no longer be considered to be in a default status. * The default status reported by your loan holder to the national credit bureaus will be deleted. * You will be eligible for the same benefits that were available on the loans before the loans defaulted. This may include deferment, forbearance, and Title IV eligibility. * Wage garnishment ends and the Internal Revenue Service no longer withholds your income tax refund. If you are a Direct Loan Borrower:To rehabilitate a Direct Loan, you must make at least nine (9) full payments of an agreed amount within twenty (20) days of their monthly due dates over a ten (10) month period to the U.S. Department of Education (Department). Payments secured from you on an involuntary basis, such as through wage garnishment or litigation, cannot be counted toward your nine (9) payments. Once you have made the required payments, yo...

Can my Stafford Loan ever be discharged (canceled)?
2008-02-19 17:35:00
Yes, but only under a few circumstances. Your loan can?t be canceled because you didn?t complete the program of study at the school (unless you couldn?t complete the program for a valid reason?the school closed, for example), or because you didn?t like the school or the program of study, or you didn?t obtain employment after completing the program of study.
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What if I have trouble repaying the Stafford Loan?
2008-02-18 17:34:00
Under certain circumstances, you can receive a deferment or forbearance on your loan, as long as it?s not in default. During a deferment, no payments are required. You won?t be charged interest for a subsidized FFEL or Direct Stafford loan. If you have an unsubsidized Stafford Loan , you are responsible for the interest during deferment.If you?re temporarily unable to meet your repayment schedule (for example due to poor health or other unforeseen personal problems), but you?re not eligible for a deferment, your lender might grant you forbearance for a limited and specified period.(Source: Studentaid.ed.gov)

How do I pay back my Stafford Loan?
2008-02-15 18:33:00
You?ll repay your FFEL Stafford Loan to a private lender or loan servicer. You?ll repay your Direct Loan to the U.S. Department of Education?s Direct Loan Servicing Center. Both the Direct Loan and FFEL programs offer four repayment plans you can choose from, but the terms differ slightly. You will receive more detailed information on your repayment options during entrance and exit counseling sessions your school will provide.
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When do I pay back my Stafford Loans?
2008-02-15 01:12:00
After you graduate, leave school, or drop below half-time enrollment, you will have a six-month "grace period" before you begin repayment. During this period, you'll receive repayment information, and you'll be notified of your first payment due date. You're responsible for beginning repayment on time, even if you don't receive this information. Payments are usually due monthly.During the grace period on a subsidized loan, you don?t have to pay any principal, and you won?t be charged interest. During the grace period on an unsubsidized loan, you don?t have to pay any principal, but you will be charged interest. You can either pay the interest or it will be capitalized (added to your principal loan balance, thus increasing the amount you?ll repay).
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Other than interest, is there a charge for this loan?
2008-02-14 17:31:00
You'll pay a fee of up to 4 percent of the loan, deducted proportionately from each loan disbursement. For a FFEL Stafford Loan , a portion of this fee goes to the federal government, and a portion goes to the guaranty agency (the organization that administers the FFEL Program in your state) to help reduce the cost of the loans. For a Direct Stafford Loan, the entire fee goes to the government to help reduce the cost of the loans. Also, if you don't make your loan payments when scheduled, you may be charged collection costs and late fees.
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What's the interest rate on a Stafford Loan?
2008-02-13 23:28:00
For all Stafford loans first disbursed on or after July 1, 2006, the interest rate is fixed at 6.8 percent. This change from a variable to a fixed interest rate does not affect a borrower's variable interest rate on loans made before July 1, 2006.For Stafford Loan s first disbursed between July 1, 1998 and June 30, 2006, the interest rate is variable (adjusted annually on July 1st) but will not exceed 8.25 percent. (You'll be notified any time the variable rate changes.) The interest rate for these loans in 2007-08 is 7.22 percent. (This rate applies to loans in repayment status; the rate may be lower during grace and deferment periods.)(Source: Studentaid.ed.gov)
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How will I get the Stafford Loan money?
2008-02-13 18:28:00
For both the Direct Loan and FFEL programs, you'll be paid through your school in at least two installments. No installment may exceed one-half of your loan amount. Your loan money must first be applied to pay for tuition and fees, room and board, and other school charges. If loan money remains, you'll receive the funds by check or in cash, unless you give the school written authorization to hold the funds until later in the enrollment period.Generally, if you're a first-year undergraduate student and a first-time borrower, your school cannot disburse your first payment until 30 days after the first day of your enrollment period. This practice ensures you won't have a loan to repay if you don't begin classes or if you withdraw during the first 30 days of classes.A school with a cohort default rate of less than 10 percent for each of the three most recent fiscal years for which data are available are not required to delay the delivery or disbursement of the first disbursement of...
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How much can I borrow for a Stafford Loan?
2008-02-12 21:25:00
It depends on your year in school and whether you have a subsidized or unsubsidized Direct or FFEL Stafford Loan . A subsidized loan is awarded on the basis of financial need. If you're eligible for a subsidized loan, the government will pay (subsidize) the interest on your loan while you're in school, for the first six months after you leave school, and if you qualify to have your payments deferred. Depending on your financial need, you may borrow subsidized money for an amount up to the annual loan borrowing limit for your level of study (see below).You might be able to borrow loan funds beyond your subsidized loan amount even if you don't have demonstrated financial need. In that case, you'd receive an unsubsidized loan. Your school will subtract the total amount of your other financial aid from your cost of attendance to determine whether you're eligible for an unsubsidized loan. Unlike a subsidized loan, you are responsible for the interest from the time the unsubsidized lo...
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How to Choose and Evaluate Lenders for Stafford Loan
2008-02-12 17:24:00
You'll need to choose a lender if you obtain a FFEL Stafford Loan . (If you have a Direct Stafford Loan, the federal government?through the U.S. Department of Education?is your lender.) Schools that participate in the FFEL Program will usually have a list of preferred lenders. Student loan borrowers may choose a lender from that list, or choose a different lender they prefer (for example, a credit union). Here are a few things to think about when selecting a FFEL lender.(Source: Studentaid.ed.gov)
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Stafford Loans
2008-02-11 17:22:00
In addition to Perkins Loans , the U.S. Department of Education administers the Federal Family Education Loan (FFEL) Program and the William D. Ford Federal Direct Loan (Direct Loan) Program. Both the FFEL and Direct Loan programs consist of what are generally known as Stafford Loans (for students) and PLUS Loans (for parents).Schools generally participate in either the FFEL or Direct Loan program but sometimes participate in both. Under the Direct Loan Program, the funds for your loan come directly from the federal government. Funds for your FFEL will come from a bank, credit union, or other lender that participates in the program. Eligibility rules and loan amounts are identical under both programs, but repayment plans differ somewhat.How can I get a FFEL or Direct Loan?For either type of loan, you must fill out a FAFSA. After your FAFSA is processed, your school will review the results and will inform you about your loan eligibility. You also will have to sign a promissory note, a...

Crackdown
2008-02-08 15:12:00
Yesterday the House side of Congress voted in the College Opportunity and Affordability Act, H.R. 4137. A major feature of the bill clamps down on shady tactics in the student loan industry. The bill sets in place codes of conduct of the "friendships" lenders and university officials currently have. There will be no more kickbacks from sweetheart deals ... just in time for Valentines Day. The bill now goes to the Senate and the White House is already stating they strongly oppose it. I smell a veto coming.
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