Here's a checklist of things to do for student loan debt consolidation. The very first step: Take inventory of your student loans.
For information on your student loans, review your loan documents, and contact your lender or loan servicer. If you are uncertain of your current lenders or loan servicers, you can find them by going to www.nslds.ed.gov.
Monthly Payment Amount
If you are not in repayment status yet, estimate your monthly non-consolidated loan payment based on the current interest rate and your loan balance. You can get payment amounts by calling your lender or loan servicer.
Next Steps
* Determine whether your monthly payment exceeds the percentage of your income to be allocated to student loan payment. This percentage should be based on a realistic budget. (If payment exceeds monthly allocation, reevaluate budget and assess income situation.)
* Consider deferment or forbearance option for short-term payment relief needs. (If debt relief needs are long term, consider consolidation.)
* Select loans for consolidation.
* Determine monthly payment and total interest costs for Consolidation Loan and compare to cost of repaying loans without consolidation. (For help in calculating monthly payments, contact your lender or loan servicer.)
* Consider the impact of consolidation on future deferment options, cancellation options, and other borrower benefits such as interest rate discounts or principal rebates, which can significantly reduce the cost of repaying your loans. You might lose some discharge (cancellation) benefits or deferment benefits if you include certain types of loans in your Consolidation Loan—Federal Perkins Student Loan, for example. To find out more about the impact consolidating might have on deferment and cancellation benefits, contact the holder of your loan.
* If you decide consolidation is right for you, contact your lender to begin the consolidation process.
* If still in the grace period, consider consolidating approximately two months before the end of the grace period to allow enough time to have your Consolidation Loan processed before the grace period expires, yet not so early that you lose too much of your grace period if you have a FFEL Consolidation Loan. (For FFEL Consolidation Loans, if you consolidate during the grace period, you give up whatever portion of your grace period remains. You retain all of your grace period, however, if you have a Direct Consolidation Loan.) Some FFEL lenders offer to hold disbursement of Consolidation Loans until the end of the grace period to enable borrowers to minimize their interest rate and maximize their grace period.
* Remember that if you consolidate during your grace period, you can lock in an interest rate at least a half percent lower than the current repayment rate.
* When filling out the consolidation application, provide complete address information, include two references, and sign the promissory note.
* If already in repayment, make sure to continue making payments on your loans until consolidation is completed. (If you need immediate payment relief, request deferment or forbearance.)
* If you have questions about consolidation, do not hesitate to contact your lender or loan servicer. Check your loan documents for the toll-free customer assistance number.
(Source: www.studentaid.ed.gov)
Monday, November 10, 2014
Saturday, November 08, 2014
Student Loan Debt Consolidation - Myth vs. Reality
Good stuff from blog.studentloannetwork.com:
There has been a lot written and said about student loan debt consolidation over the years. The point of this blog is to debunk three common mythes floating around the Internet about consolidation benefits.
The consolidated interest rate changes every July 1.
MYTH. The reality is variable rate Stafford loan rates are subject to change each July 1, which directly impacts your consolidated interest rates.
Like a home mortgage I can refinance my student loans multiple times
MYTH. The realty is that it’s a one shot deal. When you consolidate your federal loans you are locked in for life at the interest rate. I know, seems pretty ridiculous doesn’t it?
I need to consolidate within six months of leaving school or I’ll lose my eligibility
MYTH: Consolidating within six months may be beneficial to students with variable interest rate Stafford loans due to the fact that a lower interest rate is extended to you during that six month window (2% versus 2.5%). However, it is not required that you consolidate within six months. You have an indefinite time frame in which to consolidate your student loans.
There has been a lot written and said about student loan debt consolidation over the years. The point of this blog is to debunk three common mythes floating around the Internet about consolidation benefits.
The consolidated interest rate changes every July 1.
MYTH. The reality is variable rate Stafford loan rates are subject to change each July 1, which directly impacts your consolidated interest rates.
Like a home mortgage I can refinance my student loans multiple times
MYTH. The realty is that it’s a one shot deal. When you consolidate your federal loans you are locked in for life at the interest rate. I know, seems pretty ridiculous doesn’t it?
I need to consolidate within six months of leaving school or I’ll lose my eligibility
MYTH: Consolidating within six months may be beneficial to students with variable interest rate Stafford loans due to the fact that a lower interest rate is extended to you during that six month window (2% versus 2.5%). However, it is not required that you consolidate within six months. You have an indefinite time frame in which to consolidate your student loans.
Tuesday, January 21, 2014
Direct Loan and FFEL Program Loan Forgiveness, Cancellation, and Discharge Summary
Borrower's total and permanent disability or death
100 percent
If you are a parent PLUS loan borrower, then the loan may be discharged if you die, or if the student on whose behalf you obtained the loan dies.
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Bankruptcy (in rare cases)
100 percent
Cancellation is possible only if the bankruptcy court rules that repayment poses an undue hardship to the borrower.
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Closed school (for borrowers who could not complete their program because the school closed while they were enrolled or borrowers who withdrew not more than 90 days before the school closed)
100 percent
For loans received on or after Jan. 1, 1986.
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False loan certification (school falsely certified a borrower's eligibility to receive a loan)
100 percent
For loans received on or after Jan. 1, 1986.
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False certification by reason of identity theft (loan was made as a result of the crime of identity theft, as determined by a court)
100 percent
Effective July 1, 2006.
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School does not make required return of loan funds to the lender
Up to the amount that the school was required to return.
For loans received on or after Jan. 1, 1986.
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Full-time teacher for five consecutive years in a designated elementary or secondary school or educational service agency serving students from low-income families. Must meet additional eligibility requirements.
Up to $5,000 (up to $17,500 for elementary/secondary special education teachers and secondary math and science teachers) of the total loan amount outstanding after completion of the fifth year of teaching.
Under the Direct and FFEL Consolidation Loan programs, only the portion of the consolidation loan used to repay eligible Direct Loans or FFEL Program loans qualifies for loan forgiveness.
For Direct Subsidized and Unsubsidized Loan and Subsidized and Unsubsidized Federal Stafford Loan borrowers with no outstanding balance on a Direct Loan or FFEL Program loan on Oct. 1, 1998, or who have no outstanding balance on a Direct Loan or FFEL Program loan on the date they received a loan after Oct. 1, 1998.
PLUS loans are not eligible. To learn more about the eligibility requirements for teacher loan forgiveness and to find out whether your school or educational service agency where you teach is considered to serve low-income students, go to Teacher Loan Forgiveness.
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Loan forgiveness for public service employees
(Direct Loan Program only)
100 percent of the remaining outstanding balance on an eligible Direct Loan.
For a borrower who is not in default and who makes 120 monthly payments on the loan after Oct. 1, 2007, under certain repayment plans, while the borrower is employed full-time in a public service job. You may not apply for forgiveness until after you have made all of the required 120 qualifying monthly payments.
Friday, August 16, 2013
AccessUVa program
For almost a decade, the University of Virginia (UVA) has been a leader in college access for low-income students with its AccessUVa program. This program enabled students who have the brains, but not the bucks, to attend the institution without having to rely on hefty student loans.
Just last week, UVA's governing board, the Board of Visitors, voted to overhaul the program and scale back funding. Students who already have trouble paying for college will now have to take out nearly $30,000 in student loans to attend UVA, saddling these students with far too much debt once they graduate.
Sign our petition to tell the University of Virginia to restore funding to AccessUVa and ensure students don't graduate with massive debt!
The next Board of Visitors meeting is scheduled for September 19th, giving us little over a month to raise our voices and let UVA know that they are making a HUGE mistake by decreasing funding for this groundbreaking program.
We can all agree that with an endowment of over $5 billion, UVA should not be deferring thousands of bright, prospective students from attending because of student debt.
Tell UVA's Board of Visitors: Don't shut the door on future students! Don't cut the AccessUVa program!
A high-quality education does not have to mean high student debt. With our nation facing a cumulative student debt of over one trillion dollars, it's time for colleges to accept responsibility for their role in our college affordability crisis.
Stand with me, members of the I AM NOT A LOAN campaign, and fellow students:
Tell UVA's Board of Visitors to look out for its students and restore funding to AccessUVa.
Forward,
Iris Maria
I AM NOT A LOAN
P.S. To help us get as many signatures on this petition as possible, please forward this email on to at least five people in your network.
Tuesday, June 25, 2013
Student Loan Rate Hike on July 1st !
If you take out a student loan before July 1st, your interest rate will be 3.4%.
If you wait until after July 1st, it will DOUBLE to 6.8% !!
The only power that stop it from happening is Congress and it doesn't look likely that they will stop it. The didn't stop the sequestration earlier this year. So, I doubt this will be any different.
So, if you thinking on getting a student loan, NOW - THIS WEEK is the time to get it.
If you wait until after July 1st, it will DOUBLE to 6.8% !!
The only power that stop it from happening is Congress and it doesn't look likely that they will stop it. The didn't stop the sequestration earlier this year. So, I doubt this will be any different.
So, if you thinking on getting a student loan, NOW - THIS WEEK is the time to get it.
Friday, May 20, 2011
Update on Student Loan Programs
Before July 1, 2010, Stafford, PLUS, and Consolidation Loans were also made by private lenders under the Federal Family Education Loan (FFELSM) Program. As a result of the SAFRA Act, which was part of the Health Care and Education Reconciliation Act, no further loans will be made under the FFEL Program beginning July 1, 2010. All new Stafford, PLUS, and Consolidation Loans will come directly from the U.S. Department of Education under the Direct Loan ProgramSM.
Students who have previously received a federal student loan from a private lender under the FFEL Program will need to complete a new promissory note to receive loans under the Direct Loan Program. Please check with the financial aid office at your school for specific instructions.
If you’re a student attending an institution located outside of the United States, your school is now able to participate in the Direct Loan Program. Please check with the financial aid representative at your school for specific instructions on how to obtain a Direct Loan for your next term.
This change does not impact the process of applying for federal grants, loans and work-study or the amount of federal aid that students are eligible to receive. Students interested in receiving federal student aid should continue to complete a Free Application for Federal Student Aid (FAFSASM) for each school year that they wish to be considered for aid. If you have any questions about applying for federal student aid, please contact
1-800-4-FED-AID.
(Source: http://studentaid.ed.gov/PORTALSWebApp/students/english/studentloansupdate.jsp)
Students who have previously received a federal student loan from a private lender under the FFEL Program will need to complete a new promissory note to receive loans under the Direct Loan Program. Please check with the financial aid office at your school for specific instructions.
If you’re a student attending an institution located outside of the United States, your school is now able to participate in the Direct Loan Program. Please check with the financial aid representative at your school for specific instructions on how to obtain a Direct Loan for your next term.
This change does not impact the process of applying for federal grants, loans and work-study or the amount of federal aid that students are eligible to receive. Students interested in receiving federal student aid should continue to complete a Free Application for Federal Student Aid (FAFSASM) for each school year that they wish to be considered for aid. If you have any questions about applying for federal student aid, please contact
1-800-4-FED-AID.
(Source: http://studentaid.ed.gov/PORTALSWebApp/students/english/studentloansupdate.jsp)
Thursday, July 22, 2010
Education Reconciliation: The Student Aid and Fiscal Responsibility Act
Now more than ever, Americans need affordable, quality education opportunities to help make our economy strong and competitive again. President Obama has identified an opportunity to make historic investments in our economic future by making college dramatically more affordable – at no cost to taxpayers.
The Student Aid and Fiscal Responsibility Act, which was included in the health care reconciliation bill that passed on March 21, 2010 by a vote of 220-211 and signed into law on March 30, 2010, embraces the president’s challenge. It will help us reach his goal of producing the most college graduates by 2020 by making the single largest investment in federal student aid ever. Specifically, these provisions will:
Invest the bill’s savings to make college affordable and help more Americans graduate
* Invests $36 billion over 10 years to increase the maximum annual Pell Grant scholarship to $5,550 in 2010 and to $5,975 by 2017. Starting in 2013, the scholarship will be linked to match rising costs-of-living by indexing it to the Consumer Price Index. This includes an investment of $13.5 billion to fund a shortfall in the Pell Grant scholarship program due to increased demand for the scholarship.
* Invests $750 million to bolster college access and completion support for students. It will increase funding for the College Access Challenge Grant program, and will also fund innovative programs at states and institutions that focus on increasing financial literacy and helping retain and graduate students.
* Makes federal loans more affordable for borrowers to repay by investing $1.5 billion to strengthen an Income-Based Repayment program that currently allows borrowers to cap their monthly federal student loan payments at 15 percent of their discretionary income. These new provisions would lower this monthly cap to just 10 percent for new borrowers after 2014.
* Invests $2.55 billion in Historically Black Colleges and Universities and Minority-Serving Institutions to provide students with the support they need to stay in school and graduate.
* Invests $2 billion in a competitive grant program for community colleges to develop and improve educational or career training programs.
Provide reliable, affordable, high-quality Federal student loans for all families
* Converts all new federal student lending to the stable, effective and cost-efficient Direct Loan program. Beginning July 1, 2010, all new federal student loans will be originated through the Direct Loan program, instead of through the federally-guaranteed student loan program. The Direct Loan program is a more reliable lender for students and more cost-effective for taxpayers.
* Keeps jobs in America. Under the bill, 100 percent of Direct Loans will be serviced by private lenders. Lenders will compete for contracts to service all federal student loans, which will guarantee borrowers high quality customer service and preserve jobs. Unlike loans made by banks, Direct Loans can only be serviced by workers in the U.S. Last year, Sallie Mae was forced to bring 2,000 jobs back to U.S. soil to win a direct loan servicing contract. Sallie Mae is now one of four private banks servicing 4.4 million direct loans.
Meet Pay-As-You-Go fiscally responsible principles and reduce the deficit
* Saves taxpayers $61 billion over the 10 years by switching to the cheaper Direct Loan program, according to the Congressional Budget Office. In addition to investing in college aid, these provisions will also reduce the deficit by at least $10 billion over 10 years.
(Source: http://edlabor.house.gov/)
The Student Aid and Fiscal Responsibility Act, which was included in the health care reconciliation bill that passed on March 21, 2010 by a vote of 220-211 and signed into law on March 30, 2010, embraces the president’s challenge. It will help us reach his goal of producing the most college graduates by 2020 by making the single largest investment in federal student aid ever. Specifically, these provisions will:
Invest the bill’s savings to make college affordable and help more Americans graduate
* Invests $36 billion over 10 years to increase the maximum annual Pell Grant scholarship to $5,550 in 2010 and to $5,975 by 2017. Starting in 2013, the scholarship will be linked to match rising costs-of-living by indexing it to the Consumer Price Index. This includes an investment of $13.5 billion to fund a shortfall in the Pell Grant scholarship program due to increased demand for the scholarship.
* Invests $750 million to bolster college access and completion support for students. It will increase funding for the College Access Challenge Grant program, and will also fund innovative programs at states and institutions that focus on increasing financial literacy and helping retain and graduate students.
* Makes federal loans more affordable for borrowers to repay by investing $1.5 billion to strengthen an Income-Based Repayment program that currently allows borrowers to cap their monthly federal student loan payments at 15 percent of their discretionary income. These new provisions would lower this monthly cap to just 10 percent for new borrowers after 2014.
* Invests $2.55 billion in Historically Black Colleges and Universities and Minority-Serving Institutions to provide students with the support they need to stay in school and graduate.
* Invests $2 billion in a competitive grant program for community colleges to develop and improve educational or career training programs.
Provide reliable, affordable, high-quality Federal student loans for all families
* Converts all new federal student lending to the stable, effective and cost-efficient Direct Loan program. Beginning July 1, 2010, all new federal student loans will be originated through the Direct Loan program, instead of through the federally-guaranteed student loan program. The Direct Loan program is a more reliable lender for students and more cost-effective for taxpayers.
* Keeps jobs in America. Under the bill, 100 percent of Direct Loans will be serviced by private lenders. Lenders will compete for contracts to service all federal student loans, which will guarantee borrowers high quality customer service and preserve jobs. Unlike loans made by banks, Direct Loans can only be serviced by workers in the U.S. Last year, Sallie Mae was forced to bring 2,000 jobs back to U.S. soil to win a direct loan servicing contract. Sallie Mae is now one of four private banks servicing 4.4 million direct loans.
Meet Pay-As-You-Go fiscally responsible principles and reduce the deficit
* Saves taxpayers $61 billion over the 10 years by switching to the cheaper Direct Loan program, according to the Congressional Budget Office. In addition to investing in college aid, these provisions will also reduce the deficit by at least $10 billion over 10 years.
(Source: http://edlabor.house.gov/)
Tuesday, March 30, 2010
Obama Cuts Out the Student Loan Middleman
Today, we mark an important milestone on the road to health insurance reform and higher education reform ... With the bill I signed last week, we finally undertook meaningful reform of our health care system. With this bill, and other steps we've pursued over the last year, we are finally undertaking meaningful reform in our higher education system ... By cutting out the middleman, we'll save American taxpayers $68 billion in the coming years. That's real money -- real savings that we'll reinvest to help improve the quality of higher education and make it more affordable. President Obama
Today, President Obama signed into law the Health Care and Education Reconciliation Act. What does this mean? It's an overhaul of the student aid system. Students can now take out loans directly with the fedral government. This ends the subsidized program for the student loan industry that banks and other financial institutions have been enjoying for a long time. All new federal student loans will be direct loans from private intitutions but under control by the Department of Education through performance-based contracts.
Today, President Obama signed into law the Health Care and Education Reconciliation Act. What does this mean? It's an overhaul of the student aid system. Students can now take out loans directly with the fedral government. This ends the subsidized program for the student loan industry that banks and other financial institutions have been enjoying for a long time. All new federal student loans will be direct loans from private intitutions but under control by the Department of Education through performance-based contracts.
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.
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 www.fafsa.ed.gov.
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.
(Source: federalstudentaid.ed.gov)
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.
(Source: federalstudentaid.ed.gov)
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%
Notes:
*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.
(Source: studentaid.ed.gov)
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%
Notes:
*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.
(Source: studentaid.ed.gov)
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.
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 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)
Tuesday, November 11, 2008
Paulson and Spellings Joint Statement
Continuing constraints in our capital markets have posed challenges for students and student lenders throughout the last year. We recognize that education is the foundation of a strong American workforce and we must not let challenges in our capital markets hinder our students' opportunities. Given these ongoing concerns, the Administration is taking a series of steps to support the student loan market.
Earlier this week, President George W. Bush signed H.R. 6889, the extension of the Ensuring Continued Access to Student Loans Act. We appreciate Congress providing the Department of Education, in coordination with the Treasury Department and the Office of Management and Budget, renewed temporary powers to use federal funds to ensure students and families continue to have access to student loans.
The loan purchase and participation interest programs implemented over the last few months have helped ensure that Federal student loans were available to students enrolling in postsecondary institutions for the 2008-2009 school year, and Federal student lending is exceeding last year's pace.
Our financing program has supported just over 40 percent of the Federal Family Education Loan Program (FFELP) loans that have been disbursed this year. Over 800 lenders have enrolled in our loan purchase program. Almost $51 billion of federally guaranteed loans have been originated for the current school year, up from approximately $45 billion for the same period last year.
Over the next few months, schools and lenders will be making decisions for the 2009-2010 school year. Using our newly extended authorities, the Administration is moving aggressively to support the continued availability of funding for federal student loans in the next school year with the goal of restoring the government guaranteed student loan market to normal operations. We are working on an expedited basis and will make further announcements in the coming weeks.
Earlier this week, President George W. Bush signed H.R. 6889, the extension of the Ensuring Continued Access to Student Loans Act. We appreciate Congress providing the Department of Education, in coordination with the Treasury Department and the Office of Management and Budget, renewed temporary powers to use federal funds to ensure students and families continue to have access to student loans.
The loan purchase and participation interest programs implemented over the last few months have helped ensure that Federal student loans were available to students enrolling in postsecondary institutions for the 2008-2009 school year, and Federal student lending is exceeding last year's pace.
Our financing program has supported just over 40 percent of the Federal Family Education Loan Program (FFELP) loans that have been disbursed this year. Over 800 lenders have enrolled in our loan purchase program. Almost $51 billion of federally guaranteed loans have been originated for the current school year, up from approximately $45 billion for the same period last year.
Over the next few months, schools and lenders will be making decisions for the 2009-2010 school year. Using our newly extended authorities, the Administration is moving aggressively to support the continued availability of funding for federal student loans in the next school year with the goal of restoring the government guaranteed student loan market to normal operations. We are working on an expedited basis and will make further announcements in the coming weeks.
Wednesday, October 29, 2008
Students Expect 10+ Years of Student Loan Debt
CollegeGrad.com--the #1 entry level job site--today released its second annual survey results on how long college students anticipate it will take them to pay off their student loans. Fifty-one percent of student loan recipients say it will take them more than 10 years to pay off their student loans. Although last years numbers were similar, the 51 percent represents a five percent increase from three years ago.
Considering the increase in interest rates for federal student loans, combined with the ever-increasing sticker price of a college education and a faltering economy, it's not surprising that students are faced with larger student loan bills upon graduation, and a lengthier payback period.
"The financial pressures being placed on college graduates are growing each year," CollegeGrad.com Spokesperson, Adeola Ogunwole said. "Being weighed down with debt after college makes quickly finding a post-graduation job a priority for most students."
With only a six-month grace period before having to begin payments on their loans, it is critical for graduates to quickly begin earning a steady income. Graduates are faced early-on with some of the tough financial realities of the real world. Ogunwole points out, "finding a job that produces a steady income is very important in establishing the credit needed when applying for home and, or car loans."
(...More)
Considering the increase in interest rates for federal student loans, combined with the ever-increasing sticker price of a college education and a faltering economy, it's not surprising that students are faced with larger student loan bills upon graduation, and a lengthier payback period.
"The financial pressures being placed on college graduates are growing each year," CollegeGrad.com Spokesperson, Adeola Ogunwole said. "Being weighed down with debt after college makes quickly finding a post-graduation job a priority for most students."
With only a six-month grace period before having to begin payments on their loans, it is critical for graduates to quickly begin earning a steady income. Graduates are faced early-on with some of the tough financial realities of the real world. Ogunwole points out, "finding a job that produces a steady income is very important in establishing the credit needed when applying for home and, or car loans."
(...More)
Friday, August 01, 2008
Community College Student Loan Rates
As college tuition rates have increased, many two-year college students have been forced to take out loans. Because about one-quarter of two-year colleges do not participate in the federal loan program, these students are forced to take out private loans, which are riskier and more expensive; work while attending school; use credit cards; or, drop out of school. Of those students who completed a community college degree in 2003-04, 33% had student loans; the average amount was $9,061, according to an analysis of federal data by the Project on Student Debt.
The American Association of Community Colleges, which represents 1,200 two-year institutions, claims that colleges do not participate in the federal loan program due to concern for the consequences of debt and default for students, especially those who take remedial classes, for whom dropout and default rates are higher. In addition, colleges participating in the program could be barred from other federal aid programs if too many of their students default. This is especially concerning for schools with a large number of low-income students.
(Source: http://www.aacrao.org/transcript/index.cfm?fuseaction=show_view&doc_id=3946)
The American Association of Community Colleges, which represents 1,200 two-year institutions, claims that colleges do not participate in the federal loan program due to concern for the consequences of debt and default for students, especially those who take remedial classes, for whom dropout and default rates are higher. In addition, colleges participating in the program could be barred from other federal aid programs if too many of their students default. This is especially concerning for schools with a large number of low-income students.
(Source: http://www.aacrao.org/transcript/index.cfm?fuseaction=show_view&doc_id=3946)
Tuesday, July 15, 2008
Student Debt Q&A
How you are assessed as a credit risk will be based on whether you defaulted on your student loan. Government income tax refunds can stop and you may acquire wage attachments if you fail to take your student loan seriously and default on it. If you follow a few simple guidelines you can easily avoid defaulting on your student loan. You can avoid defaulting on your student loan if you just stay in contact with the lender.
If you let your lender know immediately you’re having problems, it’s unlikely you will need to default. I too had financial problems keeping up with the payments on loans I had acquired whilst a student. A few of my friends thought the situation was quite funny because they couldn’t see how the finance company could reclaim an education. Defaulted student loans usually start with this type of glib attitude towards the debt.
To avoid defaulting on your loan, contact your lender before it gets to this stage. After everything, I just felt relief after the lender had agreed to a deferment. The company was very helpful and they assigned an agent to me who assisted me with the deferment process.
It only took a week to have the payments suspended until I could re-commence at a later date. Although defaulting on my student loan wasn’t what I wanted, I knew that other financial institutions would not be quite as accommodating. I was aware that other agencies would not be so accommodating but I had managed to sort out my student loan.
(Source: cardprocredit.com)
If you let your lender know immediately you’re having problems, it’s unlikely you will need to default. I too had financial problems keeping up with the payments on loans I had acquired whilst a student. A few of my friends thought the situation was quite funny because they couldn’t see how the finance company could reclaim an education. Defaulted student loans usually start with this type of glib attitude towards the debt.
To avoid defaulting on your loan, contact your lender before it gets to this stage. After everything, I just felt relief after the lender had agreed to a deferment. The company was very helpful and they assigned an agent to me who assisted me with the deferment process.
It only took a week to have the payments suspended until I could re-commence at a later date. Although defaulting on my student loan wasn’t what I wanted, I knew that other financial institutions would not be quite as accommodating. I was aware that other agencies would not be so accommodating but I had managed to sort out my student loan.
(Source: cardprocredit.com)
Monday, July 14, 2008
Key Things To Consider Before Taking a Student Loan
by Sarah Parker (www.oneiricissues.com)
The rising costs of college tuition have made it almost a necessity to apply for a student loan today. Students not only have tuition costs, but the cost of books, meals, gas, cell phones, recreation, etc. The variety of student loans enables students to take care of their varying college expenses. A student loan however, is a loan that must be repaid under specified circumstances.
The first thing you need to consider is your credit rating or credit history. A poor credit history can adversely affect your student loan application. Some lenders will look at your credit history; some don’t. It all depends on what kind of student loan you apply for. Thus, if you have a poor credit history, look into student loans that don’t consider your credit report or credit score a top requirement.
Guaranteed Student Loans, also known as Stafford Loans have a low interest rate. A student can apply for a subsidized or unsubsidized student loan. A subsidized loan means the government pays the interest for you while you are in school. The subsidized student loan is based on the students financial need. An unsubsidized student loan means you will be charged interest while you are attending school. The principal must start being paid after you have finished school. Both types of student loans need to start repayment six months after the student has finished college.
Federal Parent Loans or PLUS loans as they are known is a student loan not contingent on your income, but lenders do consider personal credit history. Parents or guardians who have a dependent child enrolled in college at least part-time are eligible for the PLUS loan. The interest rate is 9% or less.
Well the truth is student loan consolidation is not the answer for everyone who has a student loan. Federal loans should consolidated separately from private loans. It may be more beneficial in some cases not to consolidate student loans. Student loan consolidation counselors get paid the big bucks to help you figure out this information. However this article is designed to help you develop a better understanding of everything about getting a student loan including student loan consolidation.
The rising costs of college tuition have made it almost a necessity to apply for a student loan today. Students not only have tuition costs, but the cost of books, meals, gas, cell phones, recreation, etc. The variety of student loans enables students to take care of their varying college expenses. A student loan however, is a loan that must be repaid under specified circumstances.
The first thing you need to consider is your credit rating or credit history. A poor credit history can adversely affect your student loan application. Some lenders will look at your credit history; some don’t. It all depends on what kind of student loan you apply for. Thus, if you have a poor credit history, look into student loans that don’t consider your credit report or credit score a top requirement.
Guaranteed Student Loans, also known as Stafford Loans have a low interest rate. A student can apply for a subsidized or unsubsidized student loan. A subsidized loan means the government pays the interest for you while you are in school. The subsidized student loan is based on the students financial need. An unsubsidized student loan means you will be charged interest while you are attending school. The principal must start being paid after you have finished school. Both types of student loans need to start repayment six months after the student has finished college.
Federal Parent Loans or PLUS loans as they are known is a student loan not contingent on your income, but lenders do consider personal credit history. Parents or guardians who have a dependent child enrolled in college at least part-time are eligible for the PLUS loan. The interest rate is 9% or less.
Well the truth is student loan consolidation is not the answer for everyone who has a student loan. Federal loans should consolidated separately from private loans. It may be more beneficial in some cases not to consolidate student loans. Student loan consolidation counselors get paid the big bucks to help you figure out this information. However this article is designed to help you develop a better understanding of everything about getting a student loan including student loan consolidation.
Friday, July 11, 2008
Citigroup affiliate Student Loan Corp. to cut 89 jobs
Student Loan Corp, a division of Citibank, plans to cut 89 jobs from its Perinton operation, the company said Thursday.
The jobs represent almost one-quarter of Student Loan's local employment and their elimination is part of a company-wide restructuring and cost-cutting effort. Overall, 174 jobs are being cut, including some at Student Loan headquarters in Stamford, Conn., and at Citibank in South Dakota.
Citibank's subsidiary is just one lender that is either slashing costs to stay in the student loan business or getting out of the business entirely because of new challenges in making a profit. Sallie Mae, the largest student lender, has already laid off about 1,000 employees.
A statement on the planned cutbacks said Student Loan Corp. remains committed to the business and will provide the "same level of superior customer service that schools and borrowers have come to expect ... over the past 50 years."
(more)
The jobs represent almost one-quarter of Student Loan's local employment and their elimination is part of a company-wide restructuring and cost-cutting effort. Overall, 174 jobs are being cut, including some at Student Loan headquarters in Stamford, Conn., and at Citibank in South Dakota.
Citibank's subsidiary is just one lender that is either slashing costs to stay in the student loan business or getting out of the business entirely because of new challenges in making a profit. Sallie Mae, the largest student lender, has already laid off about 1,000 employees.
A statement on the planned cutbacks said Student Loan Corp. remains committed to the business and will provide the "same level of superior customer service that schools and borrowers have come to expect ... over the past 50 years."
(more)
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