Friday, December 21, 2007

End of the year news

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 Student Loan, and the Leveraging Education Assistance Programs (LEAP) will all be spared, although their budgets will be significantly tighter than in fiscal year 2007.

Student Loan Consolidation - Next Student

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 Information
Next Student Inc.
19601 N. Black Canyon Highway
Phoenix, AZ 85027
Telephone: (623) 879-5026
Fax: (602) 993-7417

Thursday, December 20, 2007

College Loan Perkins

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 plan

To qualify for a Perkins College 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.

Tuesday, December 18, 2007

Student Loan Consolidation - Miscellaneous Questions

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 Education
Direct Loan Payment Center
P.O. Box 530260
Atlanta, GA 30353-0260


Can I prepay on my loan?

Borrowers may prepay all or part of the unpaid balance on any Direct Loan at any time, without an early repayment penalty. If a borrower makes a payment that exceeds the required monthly payment, the prepayment will be applied first to any charges or collection costs, then to outstanding interest, and last to principal. However, if a borrower's account has no outstanding interest, the prepayment is applied entirely to principal. If the prepayment is twice the borrower's monthly payment, the next payment due date is advanced unless the borrower specifies otherwise. The borrower will be notified of a revised due date.


(Source: loanconsolidation.ed.gov)

Can I change repayment plans?

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)

Monday, December 17, 2007

How is the amount of my payment calculated under the ICR plan?

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 first scheduled Income Contingent Repayment (ICR) plan payment is due.

(Source: loanconsolidation.ed.gov)

Income Contingent Repayment (ICR) Plan

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 Incomes (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 balance once per year. The amount added to the principal balance will never exceed 10 percent of the original Direct Consolidation Loan amount. Once this capitalization limit has been reached, interest continues to accrue but is not capitalized. The capitalization limit does not apply to interest that accrues during deferment or forbearance.

The maximum repayment period for the ICR Plan is 25 years, less any time spent in ICR and the Standard repayment plan. Time spent in several other plans may not count toward the 25 year maximum. If the Direct Consolidation Loan is not repaid after 25 years, the unpaid portion is discharged. Borrowers must pay taxes on portions discharged after 25 years.

Alternative documentation of income is required for Direct Consolidation Loan borrowers if their underlying loans were in the first or second year of repayment when they were consolidated. Alternative documentation includes pay stubs, canceled checks, or, if these are unavailable, signed statements explaining income resources.

(Source: loanconsolidation.ed.gov)

Sunday, December 16, 2007

Extended Repayment Plan

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 borrower with no outstanding principal or interest balances as of October 7, 1998 and with more than $30,000 in Direct Loans.

(Source: loanconsolidation.ed.gov)

Saturday, December 15, 2007

Graduated Repayment Plan

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)

Friday, December 14, 2007

Standard Repayment Plan

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)

Student Loan Consolidation - What are the repayment plans?

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 two years.

Income Contingent Repayment Plan (ICR):
Monthly payments that are based on a borrower's annual income, loan balance and family size, and are spread over a term of up to 25 years.


If you consolidate more than one loan type (subsidized, unsubsidized and PLUS) you will have one Direct Consolidation Loan with up to two parts: Direct Subsidized and Direct Unsubsidized Consolidation Loans. Even with up to two parts of each Direct Consolidation Loan, you make only one payment each month.

If you do not choose a plan, your new Direct Consolidation Loan will be placed on the Standard Repayment Plan; however, you may change plans at any time.

(Source: loanconsolidation.ed.gov)

Thursday, December 13, 2007

Student Loan Consolidation - What are the consequences of defaulting?

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 Center. Default can occur when borrowers fail to keep the Direct Loan Servicing Center up to date on address and name changes, causing billing statements to go astray. In addition, the Direct Loan Servicing Center can offer alternatives when borrowers have trouble making monthly payments. Borrowers may apply for a deferment or forbearance, or change repayment plans.

(Source: loanconsolidation.ed.gov)

Should I rehabilitate before consolidating my defaulted loan?

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 requires that you 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. Rehabilitating a defaulted Perkins loan requires twelve (12) on-time monthly payments. Contact your loan holder to obtain additional rehabilitation terms and conditions for your loan type.

Keep in mind that if you default on your loan, you are liable for any collection costs incurred to collect the loan. If you pay off the defaulted loan by taking out a Consolidation Loan, the amount you borrow must be enough to pay off your defaulted loan, including principal, interest, and collection costs. This means that the amount of the new loan may need to be up to 18.5% larger than the principal and interest outstanding on your defaulted loan.

Both rehabilitation and consolidation will reinstate your eligibility for additional Federal student aid under Title IV of the Higher Education Act (Pell Grants, FFEL and Direct Loans etc.)

(Source: loanconsolidation.ed.gov)

Wednesday, December 12, 2007

Tuesday, December 11, 2007

Can I Consolidate a Defaulted Loan?

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.
OR
Make 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 arrangements with their current loan holder OR
the borrowers agree to repay under the Income Contingent Repayment Plan.
4) If they are trying to consolidate defaulted Perkins or health professions loans
unless they have made satisfactory repayment arrangements with their current loan
holders.

Note: Borrowers with defaulted FFEL or Direct Loan Program loans may be liable for collection costs incurred to collect the loans. If the holder of the defaulted loan, which may be either the U.S. Department of Education or a guaranty agency, retains a collection agency to collect defaulted loans, charges imposed by the collection agency may be added to the amount borrowers owe. This means that the amount of the Direct Consolidation Loan may include collection costs of up to 18.5% of the principal and interest outstanding on the defaulted loan.

For defaulted Perkins Loans and health professions loans, collection costs may equal as much as the amount owed at the time the defaulted loan is paid off through consolidation.

(Source: loanconsolidation.ed.gov)

Can I consolidate my loans that are in grace?

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 in their loans’ grace periods; otherwise borrowers lose any remaining grace period. For example, if a borrower's loans are consolidated during the second month of grace, they would begin repayment within 60 days, thus forfeiting the remaining portion of the grace period. Therefore, borrowers should wait until about half-way through the 6-month grace period before applying for a Direct Consolidation Loan.

(Source: loanconsolidation.ed.gov)

Monday, December 10, 2007

Can I consolidate an existing consolidation loan?

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)

Can I consolidate my loans if I am enrolled in school?

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 Consolidation Loan. The Direct Consolidation Loan can include the first group of loans the borrower received, but not the newly received loans. Once the borrower leaves school again he or she can add these new loans to the existing consolidation loan or submit a new Direct Loan Consolidation application to combine the original consolidation loan and the other remaining loans.

(Source: loanconsolidation.ed.gov)

Sunday, December 09, 2007

Can I consolidate health professions loans?

Yes, With a Direct Consolidation Loan, borrowers can include certain health profession loans sponsored through the U.S. Department of Health 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.

Under the Direct Consolidation Loan Program, HEAL borrowers may repay under the Income Contingent Repayment (ICR) Plan for the life of the loan.

HEAL lenders are only required to offer an ICR Plan for the first five years. To qualify for an in-school deferment, Direct Consolidation Loan borrowers must be attending school at least half-time. HPSL, HEAL, and LDS borrowers are required to attend school full time to be eligible for an in-school deferment.

Issues to Consider
Before applying for a Direct Consolidation Loan, consider the following points:

HEAL loans have fixed or variable rate that are tied to the average 91-day Treasury bill rate plus 3 percentage points. There is no maximum interest rate for variable rate HEAL loans. In contrast, the interest rate for a Direct Consolidation Loan is based on the weighted average of the interest rates on loans being consolidated, rounded to the nearest higher one-eighth of one percent. It is a fixed rate and will not exceed 8.25 percent.
The interest on some health professions loans is subsidized by the U.S. Department of Health and Human Services. This interest subsidy is lost when these loans are included in a Direct Consolidation Loan.
Interest does not accrue during deferment for HPSL, LDS, and NSL borrowers. Interest does accrue during deferment on the portion of Direct Consolidation Loans that include health professions loans.
Borrowers who consolidate Health Professions Loans do not retain the deferment benefits that apply to those loans. However, they gain the deferment benefits that apply to Direct Consolidation Loans. For example, a borrower may be eligible for additional deferments if they have an outstanding balance on a FFEL made before July 1, 1993, when they obtain their first Direct Loan.

(Source: loanconsolidation.ed.gov)

Saturday, December 08, 2007

PLUS and Perkins Loan Consolidation

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 Student 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 public service. This benefit is lost when a Perkins Loan is included in a Direct Consolidation Loan.
Perkins Loans have a grace period of 6-9 months. When a Perkins loan is consolidated, any remaining grace period is lost.
Interest does not accrue when a Perkins Loan is placed in deferment. Since a Perkins Loan is included in the unsubsidized portion of a Direct Consolidation Loan, borrowers are responsible for interest that accrues throughout the deferment period.
Perkins Loans generally have a lower interest rate but have a less flexible repayment period of 10 years.
The Direct Consolidation Loan Program offers standard, graduated, extended and income contingent repayment plans which may lower monthly payments.

NOTE: Lower payments and extended repayment terms can increase the overall finance charges incurred over the life of loan.

(Source: loanconsolidation.ed.gov)

Friday, December 07, 2007

Direct Consolidation Eligibility

To qualify for Direct 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)

Tuesday, December 04, 2007

Student Loan Consolidation - Benefits of a Direct Consolidation Loan

Direct Consolidation Loans allow borrowers to combine one or more of their Federal education loans into a new loan that offers several advantages.

One Lender and One Monthly Payment
With only one lender and one monthly bill, it is easier than ever for borrowers to manage their debt. Borrowers have only one lender, the U.S. Department of Education, for all loans included in a Direct Consolidation Loan.

Flexible Repayment Options
Borrowers can choose from four different plans to repay their Direct Consolidation Loan, including an Income Contingent Repayment Plan. These plans are designed to be flexible to meet the different and changing needs of borrowers. With a Direct Consolidation Loan, borrowers can switch repayment plans at anytime.

No Minimum or Maximum Loan Amounts or Fees
There is no minimum amount required to qualify for a Direct Consolidation Loan! In addition, consolidation is free.

Varied Deferment Options
Borrowers with Direct Consolidation Loans may qualify for renewed deferment benefits. If borrowers have exhausted the deferment options on their current Federal education loans, a Direct Consolidation Loan may renew many of those deferment options. In addition, borrowers may be eligible for additional deferment options if they have an outstanding balance on a FFEL Program loan made before July 1, 1993, when they obtain their first Direct Loan.

Reduced Monthly Payments
A Direct Consolidation Loan may ease the strain on a borrower's budget by lowering the borrower's overall monthly payment. The minimum monthly payment on a Direct Consolidation Loan may be lower than the combined payments charged on a borrower's Federal education loans.

Retention of Subsidy Benefits
There are two (2) possible portions to a Direct Consolidation Loan: Subsidized and Unsubsidized. Borrowers retain their subsidy benefits on loans that are consolidated into the subsidized portion of a Direct Consolidation Loan.

(Source: loanconsolidation.ed.gov)

Friday, November 30, 2007

Student Loan Tip: Finish school!

It's almost the end of the fall semester. Are you a struggling college student thinking about throwing in the towel and dropping out of school?

If you're living off of student loans, you had better suck it up and keep going. If you think your young life is painful now trying to keep up in class, you ain't seen nothing yet if you decide to enter back into the world with a load of student debt and no college degree.

You're not likely to pull down a good enough job to pay off your loans anytime soon. You could very easily find yourself holding down two jobs just to make ends meet and keep Sallie Mae off your back. You'll find yourself slaving away for long hours while you ponder, "Why in the world did I drop out of college?"

So suck it up. So what if your grades this semester won't be that great. This had better be motivation for you to get serious about your classes next year. Stop the partying and hole yourself up and study hard. You can't afford not to.

Friday, November 16, 2007

The Financial Aid Office is Your Friend

Don't shy away from seeking financial aid from the college you are attending or applying for. Many don't seek financial aid from universities simply because they are too proud. With the cost of education these days, you HAVE to get over that. By not humbling yourself and seeking help, you're practically asking for years more of student debt.

The university financial aid administrator is there to help you. They are full of advice and may open financial doors you haven't even thought of.

Don't get cocky either trying to butt in front of other students and sucking everything out of them. You don't want to bite the hand that feeds you. Everybody wins if you're nice about it.

Wednesday, November 14, 2007

Start thinking about student loan finance for next year.

Student loan season most always runs at the beginning of the year. All colleges and universities have firm deadlines for financial aid applications. Be ready and early in filling out your FAFSA (Free Application for Federal Student Aid). Both parents and students need their W2 forms as early as possible in January. If you can't get your W2 early, then come up with a really good estimate of what you think it'll be.

You want to be at the head of the queue if you want the best shot especially at the scholarships and grants. Each school has there own deadline. It's not uniform across the country. If you miss the deadline, you'll be stuck looking for private loans which have higher interest rates. This is one piece of student loan advice you had better heed to.

Scholarships, scholarships, scholarships

Always, I mean ALWAYS, be looking out for scholarships. There's nothing like free money ease your student loan finance situation.

Here's just a couple of places to look:

Hispanic Scholarships:
http://www.hsf.net/

The Google 2008 Anita Borg Scholarship (for women):
http://www.google.com/anitaborg/

There are so many out there for all sorts of people, not just based on gender or race. You just have to go hunting. The Sallie Mae site is a great place to start.

Thursday, October 11, 2007

Sallie Mae News

Sallie Mae has posted a 13% increase in student loan originations this quarter compared to the 3rd quarter a year ago.

This is the way CEO C.E. Andrews puts it:
“Thanks to our industry-leading brand, our scale and efficiencies, and our focus on students and families, we successfully faced a number of challenges this quarter. We have a solid track record of growing our ‘core earnings’ through various political, interest rate and economic environments, and the fundamentals of our business point to a bright future for our company.”

How nice. All this new business with all of its origination fees should help comfort them in swallowing the $344 million loss they have this quarter due to stock market declines and defending against company acquisition.

Tuesday, October 09, 2007

Average Student Debt

The 2006 Average Student Debt report is out and the winners are ...

The top 3 best states: Hawaii ($11,758), Utah ($12,807), and Kentucky ($15,406).

The bottom 3 worst: District of Columbia ($27,757), New Hampshire ($24,800), and Vermont ($24,839). This makes sense because the New England area has the highest tuition rates as well.

The national "average" yearly tuition in 2006 was right at $10,000. That's $40K for an "average" college education. Have your financial plan in order before approaching Sallie Mae. I know in my last post I said student loans "can" be considered good debt.

Still, having a realistic financial plan to pay off your student loan may be more important than getting a good enough SAT score to get into college in the first place. A wrong choice at such a tender young age entering school can financially ruin you for life.

There are many horror stories out there of people being in $100K+ debt because they under estimated the long term cost of their loans.

Friday, October 05, 2007

College loans are considered good debt ?

The Etownian Online has things that "may" ease your mind as you take the student debt plunge.

Student debt is actually considered good debt if you're faithful in making regular payments on it.

1) Lenders are more likely to grant you mortgage and car loans if you show them you are being responsible with your student debt.

2) Some companies you work for will help pay off your loan as long as you stay with that company for a certain number of years.

3) Other volunteer groups such as The Peace Corps will reimburse you too.

4) If grad school is your next stop, you might be able to get some student loan compensation by becoming a TA for a research fellowship.

There's a common theme in the last three items. If you're willing to donate some time and effort, you might see your loans disappear faster.

Preston Orr

Preston Orr writes:
I have been out of college for 5 years now. I have been paying this $20,000 loan with an interest rate that started at 8% and is now at 12.5%. I bought a townhouse, hoping that I will build enough equity to pay off my loan. I cannot consolidate this loan. What is wrong with this country?


... I know this is a brief note but does anyone else want to vent their frustration?

Saturday, August 04, 2007

Congressman Joe Courtney explains HR 2669 with testimonies too!

Petition to cap private loan interest rates

Hello!
Well my story is short.. I have a lot of Student Loan Debt! ~ $110,000.. my interest rates are from 6.25%-10.25% and I have monthly payments around $1000... I'll be in debt for the next 20 years.. so I want to propose a change. I started an online petition to propose to congress for the capping of private loan interest rates because there is about to be a massive amount of graduated students so far in debt they will never be able to get out of it.
Spread the word and help me attempt to make a difference!

--
Erica Buffington
ericabuffington@gmail.com

Wednesday, January 17, 2007

6 Reasons Why Today's Halving the Student Loan Rate is a Bad Idea

The Heritage Foundation has a great article on why the legislation scheduled today to be passed is a bad idea.

1) Federal spending on student financial aid is already skyrocketing.
2) Students already have many options for federal grants and low-interest loans.
3) Student aid subsidies are already set to increase much further.
4) Tuition costs rise with financial aid.
5) Lower interest rates will not increase access to college.
6) Most college graduates can afford to repay their student loans.

Rather than providing billions in new federal subsidies, Congress should instead focus on the fundamental problem of college affordability: out-of-control higher education costs. Congress should determine whether ever-increasing federal subsidies for higher education contribute to increasing college costs.

Reference
http://www.heritage.org/Research/Education/wm1308.cfm

Monday, January 15, 2007

Financial Aid Hymn ;-)

Thursday, January 11, 2007

Email or YouTube me your student loan stories

If you have a gripe about your student loan, email me your story at studentdebt@gmail.com.
Better yet! Make a YouTube video and I'll post it on this blog.

Email me at studentdebt@gmail.com when you get your video up on YouTube.

Along with any rant you might have, try to answer these questions in your video clip:
1) How much was your original student loan ?

2) Has the benefits of the loan outweighed the troubles ?

3) What personal problems has student loan debt caused in your life ?

4) If you had to do it all over again, what would you do differently ?

5) How much left do you have to pay off ?

First 100 Hour Plan for the Democrats

Check out this U.S. House of Representatives Vote Schedule for January.

http://www.student-loan-blues.com/wp-includes/images/100hourscalendar.pdf

Cutting student loan interest rates is due for a vote next Wednesday on January 17th !

In memory of Robert T. Stafford

Stafford

Former Sen. Robert T. Stafford, R-Vt., who was such a champion of the federal student-loan program that his colleagues eventually named it in his honor, died Dec. 23 at the age of 93.

Mr. Stafford, who chaired the Education, Arts, and Humanities Subcommittee of the Senate Labor and Human Resources Committee from 1981 to 1987, was known as a moderate lawmaker and a strong advocate for education and the environment. He had a close working relationship with then-Sen. Claiborne Pell, D-R.I., the namesake of the primary federal student-grant program in higher education ...


(Source: Education Week)

Backdating Stock Options

While not necessarily illegal, the unethical practice of backdating stock options for "favorable grant dates" has been uncovered at Affiliated Computer Services Inc. CEO Mark King and CFO Warren Edwards were sent walking after an investigation found they had backdated stock options.

The entire business world is now facing this issue and many high profile executives have been put out on the street because of it. It is of no surprise that a student loan company has faced the same problem.

Source: Sun-Sentinel