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.
Friday, April 10, 2009
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 http://www.ed.gov/students/college/aid/ecasla-facts.html.
"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 http://www.ed.gov/students/college/aid/ecasla-facts.html.
Wednesday, November 19, 2008
Student loan woes
A survey administered by the scholarship-matching website FastWeb found that nearly half of student loan applications are being denied. According to the survey, one of the primary reasons students borrow private loans is because they have maxed out the federal Stafford Loan, a problem that has long been known to burden middle-income families. The survey shows that the government is failing to provide needed financial assistance.
Nearly half of Stafford Loan borrowers who said they maxed out their federal loan stated that they had to turn to private loans as result. These figures show that the average middle-income student is starting or has started to face obstacles in obtaining college funding.
Government has left the average middle-income family unable to finance higher education. Pell Grants are available for low-income students, but for middle-income students, the federal Stafford Loan has indeed become a scarce resource. Grants are often not offered to middle-income students, and when the Stafford Loans dry up, students are forced to turn to private loan alternatives.
The Department of Education needs to find a way to raise the allowed amount for a single student to borrow in Stafford Loan funding — perhaps even high enough so private loans will no longer be needed. To increase the private student loan appeal, banks should be rewarded for offering often non-profitable student loans to needy students. If these actions are taken, middle-income families would sleep soundly knowing the government has invested in their children’s futures — and their futures, as well.
(mndaily)
Nearly half of Stafford Loan borrowers who said they maxed out their federal loan stated that they had to turn to private loans as result. These figures show that the average middle-income student is starting or has started to face obstacles in obtaining college funding.
Government has left the average middle-income family unable to finance higher education. Pell Grants are available for low-income students, but for middle-income students, the federal Stafford Loan has indeed become a scarce resource. Grants are often not offered to middle-income students, and when the Stafford Loans dry up, students are forced to turn to private loan alternatives.
The Department of Education needs to find a way to raise the allowed amount for a single student to borrow in Stafford Loan funding — perhaps even high enough so private loans will no longer be needed. To increase the private student loan appeal, banks should be rewarded for offering often non-profitable student loans to needy students. If these actions are taken, middle-income families would sleep soundly knowing the government has invested in their children’s futures — and their futures, as well.
(mndaily)
Subscribe to:
Posts (Atom)