Thursday, September 17, 2009

Quick Student Loans - Don't be Hasty

Google "fast student loans" or "quick student loans" and you'll find a link to thinkfinancial(dot)com as your # 1 result at the time of this writing. Go to that site and you'll only find a link to a SunTrust private student loan application page. Think about it. You're in a hurry to get money to go to college as soon as possible and before you know it; you are likely to be looking at SunTrust student loan application. Is SunTrust your best option in this situation? Let's investigate.

Looking at an August 2009 review of student private loan providers, SunTrust ranked right in the center with 5 lenders below them and 5 rated above them. The best loans were all from federal credit unions. Before turning to a bank, definitely check out your neighborhood federal credit union for quick student loans.

Before making this crucial money decision, there are other important issues you must consider. Try getting someone with a good credit score to co-sign the loan with you. Traditional wisdom says never to co-sign a loan because of the risks. Still, if you have proven yourself to be a responsible individual in the past, maybe you can sweet talk a relative into "partnering" the loan with you. Even without a co-signer, quick student loans can be obtained but at a price. That price is a larger rate of interest and big time consequences due to missed payments. So, count the cost before you dive in too deep.

Be certain all other streams of money have been found before turning to quick student loans. Among these are college scholarships, federal loans, work study opportunities, and federal grants. There really is free money out there for college if you search for it.

Make sure you make a smart choice for your major. History degrees usually don't serve people for paying off quick student loans. You have to go after a degree that will land you a high paying job. A business degree is about the lowest you should go if a student loan is supporting your education. I'm even a little leery of that. Engineering, law, and of course medicine are your best money making degrees.

Lastly, think about starting out at community college for the first half of your schooling. The first two years of school are generally the same whether you are at a four year university or a two year community school. The price is a lot cheaper and often you receive better individual attention in your classes at a community college.

For good or bad, quick student loans are usually life changers. Be very careful before committing to one. Being impulsive has the potential of destroying your life for years to come.

Wednesday, September 02, 2009

Tips To Help You Apply For A Federal Student Loan

1) Apply online using

2) Check deadlines. Be aware of your state's and your school's application deadlines. While there is no deadline for applying for federal student aid, you should apply as early as possible after January 1 of each year that you will attend college. Some state and school aid is awarded on a first-come, first-served basis.

3) Collect the information you need to complete the FAFSA:
* Your Social Security number and your parents' Social Security numbers;
* Your driver's license number, if you have one;
* Your alien registration number, if you are not a U.S. citizen; and
* Your federal tax returns and income information

4) Check your FAFSA. After you complete the FAFSA, you will receive a Student Aid Report (SAR). Review the information carefully and make any necessary corrections.

5) Respond immediately to any request from your school for additional information.


FFEL and Direct Loan Interest Rates Effective July 1, 2009

Fixed Rates for Loans First Disbursed on or After July 1, 2006

Subsidized Undergraduate Loan: First Disbursed 7/1/2008 to 6/30/2009: 6.00%
Subsidized Undergraduate Loan: First Disbursed 7/1/2009 to 6/30/2010: 5.60%

Subsidized Graduate Loan: 6.80%

Unsubsidized Undergraduate Loan: 6.80%

Unsubsidized Graduate Loan: 6.80%

Direct PLUS Parent Loan: 7.90%
Direct PLUS Graduate Student Loan: 7.90%

FFEL PLUS Parent Loan: 8.50%
FFEL PLUS Graduate Student Loan: 8.50%

Variable Rates for Loans First Disbursed Between July 1, 1998 and June 30, 2006

These rates were calculated based upon statutory formulas and equal the bond equivalent rate of the 91-day Treasury bills auctioned on May 26, 2009, plus certain statutory percentage add-ons. The 91-day Treasury bills were auctioned at 0.178 percent, rounded to 0.18 percent.

Subsidized (Repayment/Forbearance): First Disbursed 7/1/08 to 6/30/09: 4.21%
Subsidized (Repayment/Forbearance): First Disbursed 7/1/09 to 6/30/10: 2.48%

Subsidized (In-school/Grace/Deferment): First Disbursed 7/1/08 to 6/30/09: 3.61%
Subsidized (In-school/Grace/Deferment): First Disbursed 7/1/09 to 6/30/10: 1.88%

Unsubsidized (Repayment/Forbearance): First Disbursed 7/1/08 to 6/30/09: 4.21%
Unsubsidized (Repayment/Forbearance): First Disbursed 7/1/09 to 6/30/10: 2.48%

Unsubsidized (In-school/Grace/Deferment): First Disbursed 7/1/08 to 6/30/09: 3.61%
Unsubsidized (In-school/Grace/Deferment): First Disbursed 7/1/09 to 6/30/10: 1.88%

PLUS Parent Loan: First Disbursed 7/1/08 to 6/30/09: 5.01%
PLUS Graduate Student Loan: First Disbursed 7/1/09 to 6/30/10: 3.28%


*Interest rates on Stafford and PLUS loans disbursed before July 1, 1998, are calculated using different statutory formulas, percentage add-ons, or both.
*Generally, interest rates on Consolidation Loans are fixed rates calculated based on the weighted average of the loans being consolidated rounded up to the next higher 1/8 percent, not to exceed 8.25 percent.


Friday, April 10, 2009

Prioritizing your Debt

I saw a good foundational article today at MSNBC on their Today page.

If you have several different types of debt — say, a credit card balance on a card with a 17% interest rate, a car loan with a 12% rate, and a student loan at 9% — pay off the loan with the highest interest rate first. One strategy you may want to consider is stretching out your student loan payments over 15 years instead of 10 years by signing up for the Federal Direct Consolidation Loan program. (To see if you're eligible, call the Department of Education at 800-4FED-AID.) This will reduce your monthly student loan payment and leave you with extra cash. Use this money to pay off your credit card balance faster. Once you've gotten rid of your credit card debt, start paying off your auto loan faster. After you wipe out that loan, too, increase your student loan payments to at least their initial levels.

If you're looking at a lot of different types of debt, it's important to stay disciplined to these principals.

Tuesday, February 03, 2009

U.S. Secretary of Education Margaret Spellings Takes Steps to Ensure Students Continue to Have Uninterrupted Access to Federal Student Aid

The U.S. Department of Education is ensuring students and their families continue to have uninterrupted and timely access to Federal student loans by taking steps to maintain stability in student lending through both the Federal Family Education Loan Program (FFELP) and Direct Loan Program.

"We recognize that the current economic situation has created real financial challenges for students and their families, who are increasingly concerned about how they can secure loans to help cover college costs," said Secretary Spellings. "I want to reassure students and their families that Federal student aid - both grants and loans - remains available to eligible students."

As credit markets for student loans continue to tighten, there is a growing concern among schools, students and lenders about the availability of funds for the 2009-10 academic year. With lenders currently committing loan volume to schools for the upcoming academic year, the Department of Education, in coordination with the Treasury Department and the Office of Management and Budget, is using the authority of the extended Ensuring Continued Access to Student Loans Act.

"The unprecedented credit market conditions throughout the past several months have clearly impacted the student loan market. These necessary measures will allow for more liquidity in this market and should help to prevent the financial turmoil from hurting opportunities for our students," said Treasury Secretary Henry M. Paulson, Jr.

The Department of Education will replicate for the 2009-10 academic year the successful loan purchase and participation interest programs announced in May 2008 for the 2008-09 school year. To date, these programs have supported nearly 50 percent - or $8.7 billion - of the FFELP loans disbursed thus far this year.

In addition, the Administration intends to provide liquidity support to one or more conforming Asset-Backed Commercial Paper (ABCP) conduits to purchase and provide longer-term financing for FFELP loans. While details of this conduit are forthcoming, it is intended that all fully-disbursed non-consolidation FFELP loans awarded between October 1, 2003 and July 1, 2009 will be eligible for inclusion. Loans in the conduit will be financed with new issues of Asset Backed Commercial Paper. Support for the program will come from the Department of Education, which will enter into a forward commitment to purchase eligible student loans from the conduit in the future at a prearranged price. These programs will protect taxpayers by ensuring there is no net cost to the Federal government.

The Administration is working diligently on these programs so that students and their families can be assured that Federal funds will continue to be available to help pay for higher education and ensure that our students will be better prepared to pursue their dreams in today's competitive global economy.

For more information on these programs, please view the fact sheet at