Archive for the ‘Student Loan’ Category
Thursday, December 6th, 2007 |
Once you have graduated from a college or university, you need to start thinking about the loans you needed to get through these years. They must be paid back in a timely manner in order to keep a good credit rating for such times when you may need another loan to purchase a home or car.
For some students who have a few student loans to repay concurrently, it can be a financial drain on their family finances. That is where student loan consolidation comes in.
Student loan consolidation basically consolidates all your student loans into one loan so that it is easier to manage and make payments. When you are getting a student loan consolidation whether from the government or the private market, your existing student loans are paid for and erased by the student loan consolidation lender. The balances are transferred to the new student loan consolidation. Thus you start a new loan and only needs to make a single payment each month.
There are many advantages to using student loan consolidation. The interest rates will be lower since it takes the average interest rates of your previous student loans. Thus due to government legislation, the maximum interest rate cannot be higher than 8.25 percent.
It becomes a lot easier to manage a single student loan and payment is easier. The repayment options are quite flexible. For federal student loan consolidation, you can opt to start repaying after you have graduated from school. There are also several other options.
Another beneficial side effect of student loan consolidation is that it can also improve your credit score. Since you are effectively clearing all your old student loans and taking a new one, your credit score will increase and this is important if plan to take other types of loans in the future.
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Sunday, December 2nd, 2007 |
There is a myth that only the rich can afford to get a college education. This could not be further from the truth. The sad truth is that in today’s highly technical and fast paced society, a college education is a vital necessity. Even the simplest of tasks is becoming computerized to a point that it takes specialized training to operate the equipment. By the time most middle and high school children reach graduation, even a janitors position will be in need of a two or four year degree.
When one mentions a college education the first thought is some big foreboding university and four years of either drudgery or partying. There are, however many new fields of study opening up that require only an Associates degree. But, even though these are earned at community colleges, there are still expenses to be paid. Most of the two year programs are at colleges that are accredited. This accreditation allows students to apply for the same grants, scholarships and loans that would be applicable to the four-year institutions.
Student loans are monies that are borrowed at a lower interest rate than traditional loans. Many of the requirements for loans other than college require good credit ratings and often some form of security. A student loan is the only loan one can get that does not required the person to be gainfully employed. The repayment period is also not started until the person completes their education or leaves school for any other reason. There is an automatic six-month grace period.
Depending upon the type of loan the interest may or may not accumulate from the release of the funds. Some of the loans go directly to the college or educational institution and others are awarded to the student directly.
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Saturday, December 1st, 2007 |
Anybody studying in the United States and owing a student loan is eligible for federal student loan consolidation plans.
Federal student loan consolidation plans are applicable for all students whether you are still in school or a recent graduate or already into your new career.
If you currently have several student loans, it is easier if you use federal student loan consolidation to consolidate them into one loan payment thus making it easier to manage.
There are four kinds of federal student loan consolidation to choose from:
* Standard Student Loan Consolidation
The maximum student loan period is 10 years and the payment amount per month is fixed. This type of plan is suitable for students who can afford to pay a fixed amount per month. The interest rate would not be a big factor in huge student consolidation loans. This is easiest for those on a budget.
* Extended Payment Plan
This type of plan is similar to standard student loan consolidation except it has a longer repayment period of between 15 to 30 years. The repayment period is dependent on the student loan amount.
* Graduated Payment Plan
This type of plan is suitable for students still schooling and can only repay the student loan when they have a job after they graduated. The payment period is between 15 to 30 years. The payment amount per month starts low and increases steadily every two years.
* Income Contingent Payment Plan
This type of plan is complicated and is based on the student’s income level over a period of years. It is also based on the family’s annual gross income, other loan amounts owed, other assets, mortgages etc.
Most student usually choose graduated payment plan or the extended payment plan for their federal student loan consolidation
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Wednesday, November 21st, 2007 |
Once you graduate and find a job, the reality of paying back your student loans hits. Below are some steps you can take to help keep the payments from causing you heartache.
The first rule is to stick to a payment plan. Set aside a certain amount every month for your loan payment. Making a larger payment than required each month can help you pay back the loan sooner, thereby saving you a great deal of money on interest. If you think you may “forget”, set it so the payment is electronically transferred each month.
Though interest rates of student loans are low compared to credit cards and other loans, it’s still a frustrating reality to deal with. But there is hope, if you’re making under $65,000 on your own or less than $130,000 if filing jointly you can deduct up to $2,500 of the yearly interest you’re paying on your student loan.
If you’re simply can’t come up with your monthly payment, there are options. Since your salary is only going to grow as you climb the corporate ladder, you can schedule graduated repayment plans with your lender. You start with a low monthly payment that will gradually get larger over the term of your loan.
If you’re absolutely out of options, you might be able to temporarily suspend your payments. If you lose your job or go back to school for an advanced degree, you can request a deferment of your loan payments. If your request is granted and you have a Stafford loan, the government will actually take care of the interest that accrues during your deferment.
If you can’t get a deferment, try forbearance. You can suspend payments for up to a year, though you’ll still be responsible for the built up interest.
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Tuesday, November 20th, 2007 |
While you may not be able avoid taking out a loan for college, here are six tips to help minimize the cost of your college education.
* Choose an affordable school. Quality of education is not directly related to the cost of education. State schools are partially funded by the government, so they are often less expensive.
* Most state schools offer greatly reduced rates for residents. Depending on what is required to establish residency, it might be work moving before starting college in order to get the less expensive tuition.
* Take a summer job. If you can find a job that is related to your area of study, it will not only help you financially, but help make you a better student as well.
* Look for scholarships. Many scholarship programs have been cut back in recent years, but there is still money available. Check with your financial aid department. Also check with your professors. They often know of scholarships that are handled on a departmental level instead of through financial aid.
* Try to get a job tutoring. Work study usually isn’t at a very high pay rate, but getting paid to teach your favorite subject will often make you a better student while giving you some extra money for expenses.
* Consider the total cost. Don’t just look at the cost of tuition when evaluating a school. Keep in mind other factors. If a nearby school would enable you to live at home, it might be much less expensive than a distant school with cheaper tuition.
* Consolidate college debt. Once you’ve graduated look for programs that will let you consolidate any debt that you have at a low interest rate. This will allow you to put more money toward the principle and pay it off quickly
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Monday, November 19th, 2007 |
Anyone that has gone through college knows it cost a lot, which leads to many take out student loans. Just as with any type of loan, it is important that you do your research to find the best student loans for your situation. Different loans will get you different amounts of money with various circumstances behind the loan. However, there are a few things you can do with any student loan to save money.
With student loans, the interest rate is adjusted every July 1st making it difficult to know how much you really are going to have to owe when getting out of college. There is, however, a way to lock your interest rates to avoid having them raised after a certain period of time. By consolidating your interest rates you can have them permanently locked for the remainder of your studies.
The next thing to look at to help you save money on your student loans is automatic payment. A lot of lenders will offer you incentives and reduced interest rates when you have your student loan payments automatically deducted from your account. The reason being is that you are guaranteeing the lender that you will be paying the loan on time and in full amount by giving them access to your account. This also makes it more convenient for you allowing you to avoid missing a payment.
The most obvious way to save money with your loan is to be on time. The minute you are late with your payment the interest rates will go up and your credit will go down. If you do feel the pressure of making the payments on time, make sure to talk to the lender before getting too far behind to see if you can work out an arrangement of some sort.
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Friday, November 16th, 2007 |
A scholarship is money given to pay or offset school expenses and lower the number of student loans you need. The amounts can range from only a few dollars to an all expenses type. This latter one is often referred to as a full ride. The counseling offices of most high schools will have a book that lists the more common scholarships available. Below are descriptions of some of the most often used sources.
Many companies offer scholarships through the local school systems. This is a way for a company to encourage students to study subjects applicable to that companies business. Some of these scholarships are free but others have a stipulation of working for that particular business upon successful completion of studies. This is a type of student loan, as you need to repay it by working off the debt.
Minority groups encourage members of that particular minority by offering money for education. Other groups specify that it is designed for women or of a particular faith. Scholarships of this nature usually do not define the subject matter to be studied.
Local universities often court outstanding athletes by having their abilities tied to the scholarship. These students receive the money but are expected to also use their athletic talents at the school offering the award. This is also a type of student loan, with the payment being performance in the sport. .
Most of the scholarships discussed here are offered at the high school level. Talent scouts notice good athletes and companies and minority groups maintain close ties to many schools. This community involvement helps to ensure a vital workforce and top-notch sports teams. Keep in mind that, while actual money may not be needed in return, many of these are student loans requiring payment in some form.
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Thursday, November 15th, 2007 |
One of the primary sources for student loans is the federal government. These are called Stafford loans. There are two types, direct and FFEL. These differ in a number of respects and have the same eligibility requirements. The major differences are how the loans are repaid and the needs.
The direct student loan program receives its funds from the federal government. The FFEL uses private lenders such as banks and credit unions for funding. Not all private lenders participate in the FFEL program. The repayment options also depend upon which institution is used and their particular requirements. There are two types of loans, subsidized, and unsubsidized.
A subsidized loan is based on financial need. The federal government subsidizes the interest on these loans. This interest does not get applied during the period prior to repayment or during authorized repayment periods.
An unsubsidized loan is available to almost anyone. These loans have the interest start to accrue from the moment the loan is authorized until the loan is paid in full. In addition these loans can be capitalized. This means that the interest will be added to the principle and the interest will then be applied to this higher amount. To keep this at a minimum, it is suggested that at least the interest be paid as it accumulates.
The amount of money available is dependent upon whether you are a full time or half time student. No Stafford loans are available to students who are enrolled for less than one third of an academic year. Your financial aid department will assist in determining the amount of money available. Both the direct and FFEL loans are in addition to other monetary sources such as grants and scholarships. Because these are interest-accumulating loans it is best to consider any available grants, gifts or scholarships first and then base the loan upon the remaining balance.
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Thursday, November 15th, 2007 |
In today’s mass-market media world, everybody is trying to get something for nothing. One very old saying says to never look a gift horse in the mouth. This is as true today as it was when it was first coined. Whenever something is offered for free, there is almost always a catch to it. Granted there are many free grants and scholarships available, but if something doesn’t look quite right, investigate thoroughly before signing on the dotted line. Some of the things to look for include hidden fees and up-front monies to be paid.
Among the junk mail are letters that look legitimate but are in fact a scheme to con a person into paying for something that is nothing more than a scam. Some of these are obvious uses of a legitimate fund name but with one or two letters changed. By reading the text of the letter and the fine print it is usually easy to spot the phony offers. However, if there are any questions, have the school financial aid officers look it over. There is a book published each year listing available scholarships.
Students with less than stellar academic records are easy targets. Offers that state things such as ‘First come, first served’ are never true. This kind of deadline may be true for furniture sales, but never true for scholarships. Another favorite line is “You’ve won!” If you have not applied for this scholarship, you cannot just win it. A scholarship must be applied for. These two types of scams almost invariably ask for credit card information for verification, or a bank account number to hold the winnings. This is never asked for with legitimate scholarship grants. One other catch phrase to watch for is “It’s guaranteed”. A scholarship search cannot guarantee getting a person scholarship money.
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Sunday, November 11th, 2007 |
Federal student loans are based on both income and availability. What happens if you can’t afford college yet don’t qualify? An alternative choice for you or your parents is a private student loan. These are loans done through private lenders instead of the government. The advantage of these types of direct student loans is that they have many of the same kinds of benefits as federal loans.
These loans can be used for any and all college expenses. Things like tuition, books, supplies, computers, and living expenses are all things that qualify for private student loan funds. These loans are unsecured, meaning that no collateral is needed. The loans are credit-based instead. This can mean that you might need a co-signer if you have not established a credit history.
A private education loan is usually a low-interest loan. The money can be delivered in as little as five days, and the money is given to you instead of the school. You are then responsible for paying for their various educational expenses.
This kind of loan has other advantages similar to federal loans. The interest and principal payments can be deferred until you graduate from school. For most of these loans, you are required to be attending school at least halftime for the deferral of payments and interest.
When you do graduate, the loans can usually be deferred for six months until you finds employment, and then you will generally have a variety of repayment options available so that you can tailor your payments to your income.
Don’t let the high cost of a college education deter you. There are options available even for those who do not meet low income standards required by federal programs. Take time to do some research and you will soon be on your way.
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Saturday, November 10th, 2007 |
There are ways you can lessen the amount of student loans you need. Once you are accepted at an accredited university, college, or community college, talk to the financial aid department. There are several scholarships and grants that are based on income and may make it possible not to need as high a student loan.
The Pell grant is one of the federal programs most schools automatically file for students. The maximum award is over four thousand dollars. However, not all students will get the maximum amount. Many factors are considered when a student applies. With few exceptions, a part time student must be carrying at least a half time load. Another factor that is considered is the actual college costs for both tuition and books.
Unlike a student loan, a Pell grant is just that, a grant. It is never repaid. It is up to the individual institution as to how the money is applied. You may either receive a check or have it applied directly to your school expenses. The various options will be discussed between the student and financial aid officer. Federal law required payments to be made a minimum of twice per academic year.
Another issue to consider when applying for a Pell grant is the type of institution. State colleges and universities are often less expensive than private colleges. Pell grants are available to Universities, private colleges and community colleges. The community college system is often the least expensive and can be used to earn Associate degrees and have many of the credits then be applied to a four-year institution. By using the Pell grant to pay many of these expenses the student can thus earn a degree that can be used to secure employment that can then be applied to the continuing education process.
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