Posted by: Admin at August 25th, 2007
Student Loans can be a heavy burden. Student loan default rates continue to be high and are a growing problem. A default on a student loan can wreck havoc with a young person credit score, when they are just starting out.
What is Student Loan Consolidation?
Student loan Consolidation can help, not only in avoiding default but in making monthly payments more manageable. According to the Higher Education Act, just about every kind of Federal Family Education Loan (FFEL) or Direct Loan is eligible for consolidation. Both undergraduate and graduate school student loans qualify. There are a few specific exceptions and these can be found listed at www.loanconsolidation.ed.gov .
These federal programs make student loan repayment easier by combining several types of Federal education loans regardless if they have different terms, different repayment schedules - even if they have been made by different lenders – into one often lower interest loan. In addition, the monthly payment amount on a consolidated student loan is usually lower and the schedule of payments is usually extended to one that is more reasonable. These features are designed to create a much more manageable debt and should make borrowers less prone to default.
Is it Right For Me?
Just about anyone with outstanding student loans can benefit from consolidation. However you need to seriously consider it if:
· Your Monthly Payments Have Become Unmanageable. If you are in danger of default, if you have had trouble meeting your monthly payments, and have exhausted your deferment and forbearance options, student loan consolidation should be serials y considered. There are online calculators available that can help you determine what you new payments would be under the various program available.
· You have Multiple Payments to Multiple Lenders. If you want to avoid the hassles of sending different payments to different lenders every month with a Direct Student Consolidation Loan you wile b making only one payment to one lender every month
· You have Variable Interest Rate Student Loans. The interest rate for a Direct Consolidation Loan is fixed for the life of the Direct Consolidation Student Loan. Interest rates on consolidated student loans are calculated by using a weighted average of the interest rate on the loans being consolidated and have a cap of 8.25%
Should I use a Student Loan Consolidation Service?
Consolidating your student loans through the US Department of Education is free and anyone can apply. However if you realize you will benefit from student loan consolidation, or are seriously in over your head and facing default, you may want to consider using the services of a professional lender that specializes in student loan consolidation. They have the ability to look at multiple loan programs available from multiple lenders and not just the programs available from the federal government. A professional Student Loan consolidation company can quickly and easily assess your situation and match you with a consolidated loan that is right for you and your financial situation.
Posted by: Admin at August 25th, 2007
If student Loan debt is a heavy monthly burden on you or your family, you are not alone. And if the monthly payment is becoming so unmanageable that you may have already missed payments or be in danger of default, then loan consolidation may be right for you. A consolidation loan is just what it sounds like. With a loan consolidation program your high interest student loans are combined into one sometimes lower interest loan, with one lower monthly payment, that you need to make to only one lender. Consolidation Loans are much like the same idea of refinancing a mortgage, or taking a home equity loan to consolidate credit card debt or pay off other high interest loans. Just about every kind of Federal Student Loan qualifies for loan consolidation including; FFELP, FISL, Perkins, Health Professional Student Loans, NSL, HEAL, Guaranteed Student Loans and Direct loans. In some instances loan consolidation is even available for private education loans as well. Loan consolidation is offered for student loans for either graduate or undergraduate schools. Interest rates on consolidated student loans are calculated by taking a weighted average of the loans being consolidated, and are then rounded up to the nearest 1/8 of a percent. The new interest rate cannot exceed 8.25%. So for example let’s say that a student has a couple of Stafford Loans that were originated on or after July of 2006. The fixed interest rates on these loans would be 6.8%. If only these loans are consolidated the new resulting interest rate would be 6.875%, a statistically insignificant increase, but the student would gain the advantages of only having to pay a single lender, and often gets extended time for pay back. In the case of consolidating mixed loan products, like say a combination of Perkins Loans and Stafford Loans, the resulting interest rates will always wind up somewhere in between. The weighted average will give you interest rates that are lower than your highest rated loans, but that will also be higher than your lowest loan products. So again the overall increase or decrease in your interest rates will be negligible – the true advantage of loan consolidation is not necessarily in lowering interest rates, but in actually lowering monthly payments, and extending the term of your loans, making your student loan debt more manageable, and less likely to result in default. Keep in mind the other advantage to loan consolidation is that there are no fees of costs associated with consolidation, ever. If any service is charging any kind of upfront fees for loan consolidation, they are likely a scam and should be avoided. Student or parent borrowers can apply for a consolidation loans, however parent loans cannot be combined with the student borrower loans, only loans to the same individual can be consolidated. But of course a parent borrower and their students can consolidate their own loans separately. Even loans that are in default but with satisfactory repayment arrangements, may qualify for student loan consolidation.
Posted by: Admin at August 24th, 2007
Through all of the ups and downs of applying to college there is one truth you should always remember: if you want to go to college you will REGARDLESS OF FINANCIAL CIRCUMSTANCE.
Financing your college education can be the most stressful step in the process, however a little preparation and research make all the difference. The money is out there—you just need to know where to look.
Scholarships are a great place to begin. The term “scholarship” does not only apply to aid granted to talented athletes at division I schools (though if you are a varsity athlete this could be an option and your coach is a great resource). In fact, there are innumerable scholarships and scholarship sources out there and you can start looking at any time.
Here are some suggestions for places to start in your quest of financing your college education;
First, look in your community. What activities are you involved in? Do you volunteer with children at a non-profit organization? Are you active within your religious community? Are you an aspiring writer/doctor/researcher? People and organizations are constantly setting up scholarships for future students based on any number of criteria. Ask around your community and look on-line.
Also, your high school offers scholarships for achievement in the arts, sports, or academics or perhaps to a student of a specific ethnic background or some combination of these. Go to your school’s college office and ask for a list of scholarships offered by your school and the surrounding community.
Remember that the Internet is a great resource. You can never apply for too many scholarships because you have NOTHING to lose (only money to gain!) and remember that this is money that you will not have to pay back.
The next crucial step towards financing your education is to fill out your free application for federal student aid or FAFSA form. You will need to do this the winter before you plan to attend, so the colleges can assess your need and put together a financial aid package for you. It is recommended that you fill out the FAFSA online.
Make sure to be organized. For example, have your parents there with you because the form will require information regarding their income and taxes paid in the previous year. Also be ready to answer questions about your own earnings.
When your package arrives you will see that it is compiled of two main sections: Grants and loans. Federal grants will be given only to the students with the greatest financial need and does not have to be paid back. There are also loans in your FAFSA, which is money they will put up front for your education, but that you will have to pay back later with varying interest rates. There are options outside of your FAFSA depending on your specific circumstance and the school you plan to attend, (for example private loans) which should be researched by you, your school and your family. Though interest rates sound intimidating, remember that you are attending college to better your future and with that comes a higher income bracket. Remember to be realistic when negotiating a payment plan.
There can be many obstacles when facing your future education—but remember that financing your college education should never be an insurmountable one. Accept the challenge with an open, organized mind and you will find a way to comfortably finance for your future.
To learn more about financing your college education visit How To Pay Student Loans
Posted by: Admin at July 8th, 2007
Plus Loans For Parents & Plus Loans for Graduates
Resources from http://studentaid.ed.gov
Continue reading ‘Plus Loans For Parents & Plus Loans for Graduates’
Posted by: Admin at July 8th, 2007
Campus-Based Aid
Resources from http://studentaid.ed.gov/
The Federal Supplemental Educational Opportunity Grant (FSEOG), Federal Work-Study (FWS), and Federal Perkins Loan programs are called campus-based programs because they’re administered directly by the financial aid office at each participating school. Not all schools participate in all three programs. Check with your school’s financial aid office to find out which programs they participate in.
How much aid you receive from each of these programs depends on your financial need, on the amount of other aid you receive, and on the availability of funds at your college or career school. Unlike the Federal Pell Grant Program, which provides funds to every eligible student, the campus-based programs provide a certain amount of funds for each participating school to administer each year. When the money for a program is gone, no more awards can be made from that program for that year. So, make sure you apply for federal student aid as early as you can. Each school sets its own deadlines for campus-based funds, and those deadlines are usually earlier than the Department of Education’s deadline for filing a FAFSA.
Federal Supplemental Educational
Opportunity Grants
Federal Supplemental Educational Opportunity Grants (FSEOG) are for undergraduates with exceptional financial need. Pell Grant recipients with the lowest EFCs will be the first to get FSEOGs. Just like Pell Grants, FSEOGs don’t have to be paid back.
How much can I get?
You can receive between $100 and $4,000 a year, depending on when you apply, your financial need, the funding at the school you’re attending, and the policies of the financial aid office at your school.
If I am eligible, how will I get the FSEOG money?
If you’re eligible, your school will credit your account, pay you directly (usually by check), or combine these methods. Your school must pay you at least once per term (semester, trimester, or quarter). Schools that do not use semesters, trimesters, or quarters must disburse funds at least twice per academic year.
Federal Work-Study
Federal Work-Study (FWS) provides part-time jobs for undergraduate and graduate students with financial need, allowing them to earn money to help pay education expenses. The program encourages community service work and work related to the recipient’s course of study.
Will I be paid the same as I would in any other job?
You’ll be paid by the hour if you’re an undergraduate. No FWS student may be paid by commission or fee. Your school must pay you directly (unless you direct otherwise) and at least monthly. Wages for the program must equal at least the current federal minimum wage but might be higher, depending on the type of work you do and the skills required. The amount you earn can’t exceed your total FWS award. When assigning work hours, your employer or financial aid administrator will consider your award amount, your class schedule, and your academic progress.
What kinds of jobs are there in Federal Work-Study?
If you work on campus, you’ll usually work for your school. If you work off campus, your employer will usually be a private nonprofit organization or a public agency, and the work performed must be in the public interest.
Your school might have agreements with private for-profit employers for Federal Work-Study jobs. This type of job must be relevant to your course of study (to the maximum extent possible). If you attend a career school, there might be further restrictions on the jobs you can be assigned.
Federal Perkins Loans
A Federal Perkins Loan is a low-interest (5 percent) loan for both undergraduate and graduate students with exceptional financial need. Federal Perkins Loans are made through a school’s financial aid office. Your school is your lender, and the loan is made with government funds. You must repay this loan to your school.
Your school will either pay you directly (usually by check) or apply your loan to your school charges. You’ll receive the loan in at least two payments during the academic year.
How much can I borrow?
You can borrow up to $4,000 for each year of undergraduate study (the total you can borrow as an undergraduate is $20,000). The amount you receive depends on when you apply, your financial need, and the funding level at the school.
Other than interest, is there a charge for this loan?
No, there are no other charges. However, if you skip a payment, if it’s late, or if you make less than a full payment, you might have to pay a late charge plus any collection costs.
When do I pay it back?
If you’re attending school at least half time, you have nine months after you graduate, leave school, or drop below half-time status before you must begin repayment. This is called “grace period.” If you’re attending less than half time, check with your college or career school to find out how long your grace period will be. For more information on repaying and your obligations as a borrower, click on the “Repaying” section of this Web site.