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Thursday, March 31, 2011

Student Loans in the US and the Gods of Educational Debt

Student loan defaults are rising in the United States (and so are the debt rates) and we should wonder: are we be really surprised by all this?

Everybody knows what a student (or college) loan is: it is very simple, it is just "another loan" that is in fact designed to help college students pay for their tuition, living expenses, books, and the likes. The difference from other types of loans is that (i) the interest rate is quite lower with respect to a "standard loan" (the one you could get to buy a car for instance) and (ii) the repayment schedule is deferred for the entire duration of the education. Accepting a student loan, of any kind, should be done with extreme care, and the student should be aware of the basic facts and total US figures: - The current outstanding student loan debt in the United States stands at more that $830 billion; - Almost 14.5 millions are the undergraduates who enroll for college; - Each college student in higher education pays (but this is just an average figure) almost $11,000 to attend university education.

The figures above are impressive and we may wonder how the US can keep up this huge higher education loan deficit that appears to be getting wider and wider... Anyway, for sure a student loan has some advantages as said, in particular, the 2 major advantages of a student loan over conventional loans are: 1) Lower interest rates; 2) Easier repayment terms.

You can have a private student loan or a federal student loan. In the case of a federal student loan, Federal Direct Student Loan Program, also called Direct Loan Program or FLDP provides low interest loans for students (and parents) to help pay for the cost of college education after high school. The lender, in this case, is the U.S. Department of Education and not a bank or a financial institution, such as SallieMae for instance (and in this case we would be talking of private loan). For sake of clarity, also consider that until recently, there was the Federal Family Education Loan or FFEL Program, the second largest of the US higher education loan programs initiated by the Higher Education Act of 1965 and funded through a public/private partnership. Following the passage of the Health Care and Education Reconciliation Act of 2010 on March 26, 2010 FFEL Program was eliminated, and no subsequent loans were permitted to be made under the program after June 30, 2010. In other words, following the passage of the Health Education Reconciliation Act of 2010, the Federal Direct Loan Program is the sole government-backed loan program in the United States.

In this article titled " Dark lords of student loan debt," Vox Day (a blogger) shows that the advantages of a college loan (and the value of college education) may come as a hard bargain:

... the value of a college education has not only declined significantly [...] it has also been slashed by the construction of a methodical system of financial rapine...

We invite you to read the full article and figure out by yourself if that is the case and/or you are affected by the Dark Lords, or Gods depending on the point of view, of student loan debt and if indeed these programs are a scheme... What is important to remark is that indeed college is always been considered a valuable investment, but right because we are talking of "investment", a college student (and their parents) should stop a moment and think about the ROI of college.

Perhaps the value of college as declined over the years, perhaps such value is no longer a "big" value as it had been for the previous generation, perhaps the ROI of college education could be substantially increase if, instead of considering private education, we consider a public education?

Certainly, there is no single answer and no answer that is valid for everyone regardless of his/her particular situation, life objectives and, most importantly, financial situation and whether your student loan is private, federal or it is a combination of private and federal student loan.


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The Necessity for College Loans Consolidation

College students, because of the high cost of financing their education, seek loans from more than one source in the course of their college days. In the end, some students end up having up to three or more different loans from different sources. It is needless to mention that all things being equal, all these loans must be repaid.

At the end of the course, graduates are saddled with the responsibility of repayment under as many terms as there are sources of the loans. Thus they are faced with the challenge of loans settlement under various conditions in terms of repayment period, monthly repayment amounts, interest rates, monthly repayment days or dates etc.

The concept of loan consolidation means that debtors put together all the loans in one basket for ease of management and repayment.

Such loan consolidation becomes imperative to address problems that may lead to defaulting in payment due to forgetfulness, a high interest rate or a large amount of repayment being due. Loan repayment becomes a burden and tends to stifle the enthusiasm from receiving a salary as hopes are threatened. Young working class graduates may not be able to settle down fast enough to enable them to enjoy the benefits of graduation. They may not be able to afford befitting accommodation or a personal car and the expectations of family members and friends in terms of social status may be badly affected.

The best decision in such a situation is loans consolidation which means surrendering all the loans to one loan provider. The chosen loan company pays the others who have made loans available and enters into a fresh agreement with the debtor. This will enable one who received loans to have them all under one single management and to have the opportunity to renegotiate interest rates.

When various loans are consolidated, a great relief comes to the debtors as they are able to manage their finances better and also saved from embarrassment due to loans default.


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Time to Pay Your Student Loans - Are You Suing Your Parents?

When it comes to paying for your college education, student loans are the answer for many people. With little to no interest rates, deferment options and full coverage many students take on loans as quickly as they do study habits, but what happens when you graduate and its time to pay up?

With the economy at a standstill and the unemployment rate at 9.3% (down 3% from 1990) many students are wondering "what do I do with this degree?" Many are unable to find that perfect job they spent years building up the education for but the loans are on their own timetable. Lenders might be sympathetic to your struggles, but they still are looking for repayment.

For some graduates, its not only student loans that have been accumulating - it is very common for other credit cards to have been used on a regular basis to pay for everything from meals, gas, books and of course the occasional after class happy hour.

Those recent graduates who are now facing massive student loans and looking to get out of debt they think that filing for bankruptcy is their option. Yet after the US Bankruptcy Code this really limits student loans at being discharged through filing bankruptcy.

I just read about a case where Dana Soderberg was suing her father to pay her tuition costs after having him sign a contract that he would handle her tuition until the age of 25. Well that's one sure way to get out of your debt, not exactly one that I support but I suppose not everyone thinks along the terms of actually having their parents sign contracts when it comes to helping them with their education. I remember starting the local California State University with a graduation check from my grandmother and my mom telling me "you should apply that to your tuition." I never thought otherwise.

So if you haven't contractually binded your parents and don't want to just walk away from those loans, consider your options. If the career you are working towards isn't taking you on, then maybe you need to take on a part-time job. Find ways to budget your money, maybe sell some items on eBay or even have a garage sale.

Now that I am in graduate school I have taken on student loans for the first time and I can sympathize with other students in this economy. I take my debts seriously but I also look for ways to pay them off as fast as I can and keep my credit rating good. It's all about being responsible with your money, creating a budget and if possible stop using your credit cards (save them for emergencies - or at least until you can pay them in full every month).

If you have federal loans, the federal government offers grants and your loan might qualify for forgiveness. If you are like me and you have private loans, military loans or any other type these will not qualify. Student loans are known as unsecured debt and the only guarantee that it will be payed off, is through the act of actually making payments! (In contrast to secured debt - like a mortgage, where you can lose your house if you do not pay).

I don't know if it comforts me or scares me, but to know that I am not alone in this dismal economy keeps me going somehow. If you have found yourself in $10,000 or more in unsecured debt there are options for you. Don't be fooled into thinking the "easy" way out is bankruptcy. Try a debt settlement program; let a professional work for you! With all this downtime between job searching, it can be a time to work on you. Make some financial goals - one thing I learned in school was the three week, three month and year plan. Where do you see yourself and what do you want to accomplish in those times? Being financially free and out of debt is one sure goal to adhere to.


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The Best Solution of Your Exhausted Student Loans

There are some students who need more than a student loan. They may think that the parent's income can't fulfill their educational needs. Those who have some student loans can try to consolidate their loans into consolidation loan. Getting this way will help them to get many advantages. One main reason to apply for this help is that it comes with the longer repayment period. Somehow, there are some options of the repayment process you can choose.

The first choice for the repayment option is the standard payment method. Doing this way will help you to get the easiness of life. The lender will tell you at the first time about the sum of money you have to spend. You will have to pay the loan amount until you complete it all for ten to 30 years of repayment.

The next thing you can choose is graduated pay back method. A direct loans consolidation with this kind of payment allows you to have lower repayment for about the first two years and after that the interest rates will get higher. The length of this repayment process will take the same as the first; it is about 10 to 30 years.

If you have a loan debt up to $30,000, you can try to get the extended payment method. This way will help you to get a lower repayment period. Try to compare with the first two; you will see that this payment will come in a longer time.

No matter which one you choose, before the repayment begins, you should have made a decision about the fixed monthly payment. That way will help you to be able in re-manage your financial situation. Try to fix your monthly income at least at $50.


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READ MORE - The Best Solution of Your Exhausted Student Loans

Tips for Preparing and Comparing Student Loan Consolidation Programs

Student loan debt can create an uncomfortable financial situation when you have to start repaying on the loans. The payments can put anyone in a bind. To make matters worse, it may take several years beyond graduation to start making decent money. This is where consolidation student loans can be beneficial. You can take a new loan to pay off the existing ones, and create a smaller monthly payment. In many cases this can make the difference between living comfortably and staying awake at night worrying about debt.

Preparing for Consolidation
You'll be in a much better position if you take a little bit of time to prepare for consolidation first. If you are still in school you can start looking at what you'll need later. If you can recognize a potential problem with paying back the loans before you have to start repaying you'll be much better off. Even if you are already in a financial bind, you can do a little legwork up front. Make sure your current loans, not just the student loan, are up to date. Missing payments can knock you out of qualifying, even if it was just one time. Late payments or over limit credit accounts on your credit report can reflect poorly and decrease your score. The credit score is heavily relied on, even with consolidation of student loans. To avoid getting a higher interest rate, try to keep up on all of your accounts for at least a year before consolidation. Checking your credit report can also help you with this. It's not uncommon for items to be reported incorrectly. You can dispute any items that have been reported incorrectly.

Comparisons
Shopping for student loan consolidation is just as important as shopping for loans for anything else. Many lenders offer different terms and perks. You may also save money on interest rates by shopping around. When you start looking for consolidation programs there are several things you want to find out about. Most people assume the interest rates are the most important thing to look for. While the rate should play a large role in your decision, you want to find out about other terms and benefits as well. Some programs will allow you to defer a certain number of payments during the term. This means if you have a bad month where unexpected expenses have left you short, you can push that month's payment back to the end of the loan. It won't report on your credit as a missed payment, and you can pay your other bills without worry. Some companies also offer flexible terms, ranging from 10-30 years. A 10 year term will have a higher monthly payment, but lower interest over the life of the loan. A 30 year term will allow you to make payments within your monthly budget but will create more in interest charges. Weigh this when you start comparing.


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Unsecured Student Loans Are One Way to a Degree

Going to a college or a university is not a walk in the park, mentally or financially. Students are immediately confronted with some facts of life, like it costs money to live - eating and sleeping are not cheap habits.

Cost of Living

Add a cell phone, a computer hookup, and other utilities (gas, water, lights) and a student is looking at a pretty hefty sum. What about transportation? Trains and cars are not free.

Cost of Learning

But that is only the second most expensive thing a student is confronted with. A little thing like tuition, fees, books, class-related materials, and a laptop can roll into a lot of dough, and that dough can keep rising.

Show the Student the Money

Scholarships are nice. Grants are good. Even should a student land a scholarship or qualify for a grant, they still are not completely covered. And face it, some students do not qualify for either. So, where does the money come from for these hapless seekers of knowledge?

Watch Out for Harmful Credit Cards

Solicitors representing credit card companies are to be found in abundance during registration days. Many students get them and start racking up expensive charges with loan-shark interest rates. Though a credit card can come in handy when things are tight, too many use them for everything. These poor benighted folks walk away from their graduations burdened with tremendous debt and horrible interest rates.

Unsecured Student Loan Option

Though unsecured student loans are not available through the usual college or university venues, the financial counseling offices should be able to point a student to a reputable lender that has helped other students.

Searching for a Lender

Another way to find them is by searching the Web. Punching student loan into a browser will reward you with hundreds of hits. With such a large market, it would be prudent to carefully weed many out. This will put the most dedicated shopper to the test, but canny shopping can save a student thousands in the long run.

No Credit History

As a student, you are probably approaching the lending industry for the first time. As so, you probably have little or no credit history to your name. Student loan lenders are willing to take a chance by lending to you.

Student Loan Competition

Student loans usually have a sub-prime lending rate (low interest rates are always good) and offer terms that are competitive. Some may delay payments until after the degree is obtained.

You Are the Boss

Always remember that you are the boss, that lenders are not doing you a favor by giving you a loan. You are doing them a favor by giving them your business. Be a smart, hard-to-please shopper.

No Stephen Hawkings

You do not have to be brilliant to earn a college degree. You do not have to be brilliant to shop wisely for a student loan. You just have to stick with it on both horizons. And getting a college education is certainly not something for only the rich. You need to find your funds and forget about it. You need to focus on your studies.


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Wednesday, March 30, 2011

What Are The Factors To Consider Before Going For Student Loan Consolidation Rates?

To consider on student loan consolidation rates is a top concern for someone who finds themselves under To consider on student loan consolidation rates is a top concern for someone who finds themselves under the load of numerous debts.

One of the major concerns is to check out for the interest rates before you go on. The other factors I want to point out are the monthly payments, the time period and any terms or conditions. These all factors should be considered into the decision to consolidate your current student loan into a single.

Some more factors figure into the consolidation rates are: Is the loan a private or is under federal government? Rates of federal loans are superior to other. But we must know the type of loan you are considering or applying for. Its types depend on its current interest rates.

- Stafford Loan (in school): 1.88%
- Stafford Loan (repayment): 2.48%
- Federal Plus Loan: 3.28%

The calculation behind federal student loan is that it is based on the weighted average of loan interest rates.

Before going to consolidate it's time to check for the low rates. The interest rates of federal loans are the weighted average of all your loans rounded up to the nearest 1/8%.

In order to low down your interest rates, credit history is a big factor to go for. Your credit score determines the consolidation rates. If your credit score is not so good, look for Stafford that is not base on your credit history. Stafford loans are taken on the conditions of need rather than credit score and ability to pay it back.

Your originating fee also accompany with this issue. Always look for the charge on the total fixed loan. But competition between the companies may offer you low rate. With the federal loans, a portion of fees goes back to the government to reduce the overall cost.

Before to consolidate, it's time to check all the attached grace period, charge payment on late payment and what offer you get. To relief from your headache for monthly payments on time these issues can be very important to roll on.

If you want to reduce all your monthly payments for all your school, college loans then learning more about student loan consolidation rates is crucial through this article.


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Tuesday, March 29, 2011

What Are Your Options for Paying Back Student Loans?

The student loan is a condition of credit. You can sign the Master of the bond that forges a legal agreement between you and the lender. But there are several ways to pay for what you have, even if he is late.


Getting a student loan is certainly a great responsibility. However, many students is their only option really afford college. And this sort of forced their responsibilities, many students trapped in a mixture of knowing that they have a real choice when it comes to how they can pay their student loans.


We hope that by the time you read this, you can know all the repayment options and a much better idea, one that fits better. Use it as a general guide for the repayment options. Discover what opportunities are available to you and choose one that suits you.


Standard Repayment Plan


This is the repayment plan offered by your lender. You make payments for up to ten years. Your monthly payments are higher than in other plans, but your total payments are lower because you pay less interest.


Graduated repayment plan


Under a graduated plan, payments start to increase low and during the repayment period - usually every two years. It is a good option if your income is low when you graduate, but will increase quickly.


Extended Repayment Plan


A plan of extension allows you to stretch your repayment over a period of up to 25 years depending on the amount of your loan. To be eligible for this plan, you must have an outstanding loan of over $ 30,000. You can plan an extension of the graduated payments, which will lower your payments even further but will increase even more global investment.


Income-Based Repayment Plan


If your income is low or unstable, an "income-based" or "income-sensitive" repayment plan may be good for you. As your income increases or decreases, so do your monthly payments. The payment amount is redesigned each year, depending on your annual income, household size and the amount of the loan.


Which plan is available depends on the type of loan you have.


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Using A Student Loan Calculator to Find the Best Consolidation Programs

If you want to compare student loan consolidation offers and rates, a student loan calculator will allow you do this with an actual number. A lot of companies will toss out terms and rates, but in the end if you don't know what kind of payment you are looking at, it's not going to do you much good. If you want to use a calculator you will need to have several pieces of information.

Understand Your Current Loan
A consolidation loan is going to pay off the current loans you have and create a new loan. For each of the loans you have you want to write down what the interest rate is, what the terms are (how many years), the type of loan, and the amount you've already paid towards the loan. Many websites offer calculators that can help you see your savings before you sign up. Before you can use these options you need to have the listed information above to get the most accurate results. You should also take a look at your credit so you know what kind of interest rates to expect. You can find online calculators that will help you determine average rates for your credit score. You may have to pay a few dollars to get your actual score, but it's helpful when you are shopping for the best consolidation rates. Just be sure you aren't signing up for any kind of monthly recurring charge or service when you get the score. If you go directly through the credit bureaus you shouldn't have to worry about this.

Using the Calculator
You can find several student loan calculator options if you do a simple search. Try to find a consolidation calculator. This specific type of calculator will take in to account the average available rates for consolidation, and will tell you not only how much you will save each month, but how much interest you end up paying over the life of the loan. For instance, a $50,000 Stafford loan at the standard rate of 6.8% over 10 years would cost $575.40 per month. You end up paying almost $20,000 over the life of the loan just in interest. A consolidation that changes the terms to 25 years will lower your monthly payment to around $370 per month, but will end up costing you more than $60,000 in interest over the 25 year term. And that's assuming you have decent credit and can get the standard interest rate. Keep the calculator open while you shop around. This will give you a much better idea of what is a good deal and what isn't. The calculator will allow you to change the interest rates and terms, so as you speak with different consolidation companies you can plug the numbers in to see what savings you can expect. This is one of the easiest ways to compare student loan consolidation offers.


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Saturday, March 26, 2011

Ways to Pay Up Your Graduate Loans

America has one of the most expensive education systems in the world and usually students who want to pursue a higher degree of education would resort to student/parents loans. Asian parents usually have no problem with this because a study shows that 73.2% of Asian parents or immigrants save up for their children's college education the moment they are born or they call it "college fund" so that they don't have to think about paying for parenting loans later on. But not all of the American population is like that. Some parents think high school education is enough for their kids but their kids might think otherwise and end up getting a graduate loan. This blog post is to give some options on how to pay back student loans after you have already completed your degree. This is for the purpose of students who don't know where to start in paying.

1) Get another Loan with lower interest - Paying a loan with another loan is not good but what we are suggesting is you get another loan with a lesser interest to pay back the student loan and all you would pay for is that loan instead of the graduate loan which oftentimes have higher interest.

2) Have a financial schedule - As early as starting your years in college, you should already be thinking about making money or saving up money to pay up for your college loan. You can set up a financial schedule of how much you would save and how much you would need to spend while you are in college.

3) Savings - Paying out your student loans through your savings is a good way to pay it up. Spending too much while still under a student loan is not a good way to go and you will regret that later on because you are never sure as to whether what your financial condition is later on.

4) Make it a priority to pay up - Prioritizing to pay your graduate loan and setting your mind to that direction would eventually let you pay up for it.

5) If you get a job - Ask your company if they have benefits that they will pay for you graduate loan - There are some big companies who would pay for the graduate loans of their employees especially if they found the employee as an asset. Don't be afraid to go ask the human resource in-charge if they have that benefit.

Benefits of Graduate Loans

There are so many benefits of graduate loans and some points we would like to add it up here:

1) Able to take up a higher degree of education
2) Immigrants have a chance to go to school and get used to the education system
3) Study now pay later benefits

Basically, student loans make it easy for you to study in college but paying it could be a problem if you don't have it all planned out.


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The Advantages of the Income-Based Repayment Plan

The Income-Based Repayment Plan is one repayment option you can choose when your major federal student loans become active after graduation. Major federal loans include the Grad PLUS, Stafford, or Consolidation loans within the FFEL or Direct Loan programs. This type of plan caps your mandatory monthly payments based on the size of your family and your earnings. There are a number of advantages and a few disadvantages to this repayment option. To find out if this plan is right for you, you can calculate an estimate based on state of residence, income, and family size.

If you are struggling to repay other debts on top of student loan debt, bankruptcy may provide the relief and assistance you need to get back on financial track. Speak with an attorney today to discuss the benefits of loan payment adjustment and debt reorganization.

The Benefits

If you meet eligibility requirements, you may be able to enter into the income-based repayment plan. Benefits of this plan include:

Lower monthly payments than on the standard 10 year planUnpaid Subsidized Stafford Loan interest paid by the government for up to 3 years if your payments do not cover the monthly interestCancellation of balance after 25 years of repaymentCancellation of balance after 10 years of public service work

The downside is that you may pay more interest over a longer period than you would under other types of plans such as the standard 10-year plan. Also, you will have to submit updated family size and income information to your lender or it will switch to the standard plan.


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Benefits Of Private Student Loans

Many people think private student loans can only be utilized for tuition fees. Well, that's a misconception since you can use these loans for a number of different purposes. The private student loans provide the borrowers with the feasible cash availing opportunity hence helping the students in meeting their various needs which even the scholarships leave aside. Following are a few advantages that you can enjoy with a private student loan.

Well, everyone knows the cost of books can burn a hole in your pocket. With every passing year the prices are soaring higher and higher. Now though you can find some discount on second-hand books but you can't always find the books you need there. So, in such a situation private student loans can help you out perfectly well for providing you with necessary cash to buy them from wherever you can find them.

Other than this, in case you are living in a rented public house, you must be aware of the high rents and may be one could manage the rent somehow but what about the daily expenses of meals and the utilities etc. Meeting these expenses can get really difficult for particularly students so here is when you can make use of the private student loans. You can use them to cover all your expenses or just borrow enough money that could help you in reducing the burden of expenses.

Furthermore, there is another very important yet neglected aspect that can make you suffer for money. Well, you are going abroad or to another city for study purpose where the climate is comparatively harsh than yours', don't you think you will be in dire need of proper clothes and other accessories. However, it is not just that, you may find yourself in need of some extra cash to see a physician in case you get ill. Now, while most students bother their parents to send them more money, you can always sort things out on your own by getting these loans.


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Consolidate Your Student Loan

Lucky are those people who studied college with financial support from their parents or relatives. There are several teenagers who did not enter college because their parents are no longer able to sustain their tuition fees. For the reason that, their folks has no job, suffered from serious illnesses, or even sudden death. Yet, it's time to set aside your sentiments; it is the perfect time to seek some aid from a government or private firm in the form of student loan.

Student loan is design especially for student, with unique condition in terms of payment. These funds are intended for education purposes with cheapest interest rates. As a student you are given 2 choices with regard to your loan. First, is the federal student loan; this is administered by the Department of Education Federal Aid Programs. A government sector that rendered educational supports such as scholarships and grants. The good thing about this loan is that the federal provide flexible repayment and deferment options. It also offer borrower benefits, such as discounts and low fixed interest rates. As well as federally-subsidized interest depending on the student's need.

Second is the private student loan, this granted by a qualified private institutions like banks. It can assist when federal student loans and other aid are not enough to sustain the entire education. However, not all private institutions have deferment options. Likewise, interest rates and fees that are determined by the lender and often depend on your credit ratings. The approved funds vary on your parent's financial level and other financial factors. That's their ways on weighing how much they can lend to you.

Failure of your obligation may affect your credit ratings and have long-term effects that might ruin your future. Debt consolidation services may come in to help you solve your problem. Like Florida Consolidation extend their services like bad credit consolidation loan, student loan consolidation, and other functions like finance counseling, and other programs.

Debt Consolidation Services is an organization that helps you lower your monthly student loan payments and added loads of extra cash in your pockets. In consolidating students' loan, the two types also differ in terms of interest and mode of payments. You are eligible to consolidate federal student loans when you are not any more link up in school while the private loan no matter what the outcome, whether you finish your studies or not you are obliged to repay your loan in accordance to the agreed terms.

If you are engaged to both federal and private loan, you may consolidate them both but in separate manner. Consolidate your federal student loan first, then followed by the private in order to avail the benefits of each loan considerations.

Therefore, even fantastic or tremendous loan package on front of you, don't forget to be a wise borrower. It is important as debtor that you understand terms before agreeing it. As well the background and reputation of the company you are planning to engage with. The amount of money you lend today may affect your economic status in the future.


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Funding A College Education

In today's ever changing world the most important thing that a person can have is a college education. Without some form of higher learning, it is close to impossible to obtain a career that will be satisfying and rewarding in one's life.

The United States Census Bureau has reported that a person with a Master's degree will earn $1.3 million more income in a lifetime than a person who holds only a high school diploma. This fact is boggling to say the least. And for women and minorities that figure is even more depressing. With this understanding, a person should be looking to obtain a higher level of education to increase their standard of living, their quality of life, and their overall well-being. It is proven that people with higher levels of education tend to improve their health as well.

The problem with obtaining an education today is that college tuition rates have been on a steady rise while funding for college level education has been declining. Through the recent fiscal crisis and economic downturn, the states have steadily reduced funds available for college education. Increasingly, college is become more for those who have an athletic ability to earn a scholarship and those whose families are financially able to support them. With this in mind the future college student must look to every possible avenue to obtain financing for a college education.

With public four-year college tuition and fees averaging $7,605 per year for in-state residents, and $11,990 per year for out-of-state residents, even the cost to stay close to home can be unbearable for the average family. When one looks to the private institutions the cost are even greater with the average yearly tuition and fees rate of $27,293, which for most families is their yearly salary from employment. The cost for attending a two-year community college can lessen the impact, but the average is still costly at $2,713 per year for tuition and fees. With the average annual increase of 4%; how does the average family pay for college education to better their lives and the lives of their family?

The most common funding source for college students is to seek federal loans and grants to pay the necessary cost. However, not all families are eligible for the full amount of the federal Pell grant. The formula for awarding Pell grants to future college students includes the total income of the household. If this income exceeds the federal threshold formula then the grant will be reduced accordingly. The maximum amount that a Pell grant will cover is up to $5,500 a year for tuition, if eligible, and the remainder must be covered by loans, family, and the student working. This causes a burden to the family and the student working to obtain a higher degree. With the the financial burdens and the yearly increases for the cost of college education, a family should be looking for multiple alternative financing methods and options.

(c) Copyright Demetrece Welch

In short, a college education is being outsourced to those who have the funding. However, there is hope for those seeking a college education who need financial assistance to earn higher pay, a higher standard of living, and overall better well-being. For additional information to assistant in funding a higher education click here.

Article Source: http://EzineArticles.com/?expert=Demetrece_Welch


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Friday, March 25, 2011

How to Manage Student Loan Debt?

Dealing with unfavorable financial conditions is not a straightforward task, and in case you happen to have serious financial problems, a bankruptcy trial lawyer could suitably assist you. This instance could occur when you are powerless to deal with your debt. This situation could also arise when you are under the pressure of a student loan debt. Investigations reveal that nearly 50% of students are powerless to repay their debts for a minimum time span of 10 years. Statistics reveal that this number is all set to escalate, with the escalating redundancy rate. In case you are by now under the influence of a loan debt, it is the precise time for you to be aware of how you can deal with it in a proper manner.

Managing your student debt is not an impossible task; however it is up to you to be conscientious in this regard. The initial step entails procuring sufficient knowledge pertaining to the loan. Establish the type of your student debt. Assess the exact amount which the loan owes to you. You could ascertain the payments which are to be made on a monthly basis. Analyze what would be the rate which you would be required to pay, on the whole and additionally on a monthly basis. After this process, you can find out if you are capable of paying the amount within the stipulated time frame or not.

If you have certain issues with the payoff, you could seek the extensive payment alternative. This would render it feasible for you to repay lesser amounts of currency which could be spread out over a longer time frame. This would ultimately lead to elevated interest rates, though this would be beneficial for you in the long run as the interest could turn out to be tax-deductible encircled by scrupulous restrictions.

You could also utilize an income-based settlement arrangement. This would assist you in lessening payment by another 15 percent of your flexible revenue and this would occur on a monthly basis. You would be able to keep yourself updated with all the current payments effortlessly. This would also lead to augmented savings which you can utilize for supplementary investments.

Alternately, you could also request for leniency or rescheduling on your student loan debt payments. This is appropriate if you are powerless to repay your debt just now. This opportunity would necessitate a distinct time span through which you could ensure that your debt is balanced. This would be quite useful in case you are undergoing a certain period of joblessness.

Initially, your student loan debt could appear to be a helping hand, which could suitably be transformed into a frightening situation if you are incapable of managing your student loan aptly from the onset. It is advisable to bear the fact in mind that when you are a student, employment prospects would not for eternity be convivial. Thus, it is essential to focus on proper management of debt, right from the onset and you would not have to face innumerable issues in the near future.


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Methods to Pay Back Student Loan

So you've completed college and are left with a huge amount of debt in the name of student loan. How do you pay back this loan? Student loans are as good as a car loans or home loans in that it needs to be paid back to the lender. Though the interest rate is very low still after a period of four years when the time comes to repay it, it looks a huge sum.

First and foremost calculate and take stock of all your existing student loans. See if it is the same lender from whom you've borrowed. Often the lender changes as they transfer student loans from one lender to another. Check out the details before you start paying back. If you've landed with a good job then it is not a task to repay the loan. Develop a good financial plan where in you will pay off your loan as well as make savings for the rainy day. If you haven't then you need to think of various options.

Income based payment- You can ask your lender to deduct a certain amount monthly based on your income. For this you need to show your tax returns as well as income slips for the lender to consider this option.

Student loan consolidation- Here all your existing loans are clubbed together and made into one single loan with a single lender. The advantage of student loan consolidation is, there is only one outgoing amount every month and the repayment time gets extended to a maximum of thirty years. Due to which the monthly outgoing gets reduced. But the disadvantage is you are saddled with debt for almost half your life and your savings are almost nil. Moreover if you've a debt of $30,000 or more, you will end up paying a lot more interest. In case you lose your job (God Forbid) then your lender has to be notified and that causes more confusion. So it is wise to research, analyze and decide what suit you the best.

Voluntary service- After graduation you can join Americorps and other voluntary organizations then your student loan get waived. Remember scholarships and grants are not included in this. They are free money that needn't be repaid.

Teaching- Teach for America is a program where you can go to low income communities and teach the under privileged. Student loan gets waived of at least $5000 per annum.

Military Service- If you join the military service then a loan amount of $20,000 is waived. To get even more pay off you can get stationed at high risk stations.

Social work and health service- These are two best areas where you can get pay off of your loans up to $25,000. Physical and occupational therapy are also areas that can give relief of your loans.

Social justice- As law graduates if you serve in public interest and non profit organizations then you can ask for loan forgiveness.

The Federal government has come up with several loan repayment options. Check out what suits you the best and go for it.


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Stuck With Student Auto Loans?

Car finance for students are easily accessible. Most of us are aware about the challenges of individuals looking to pay for their studies. That is the reason why there are numerous companies accessible to assist students.

Therefore you need to reap the benefits while you are in college, of reduced interest rates. Several loan providers offer student auto loan packages, providing that you verify that you're in a school, you'll be eligible for a student car loan.

Requirements for approval include the following:

Open up savings and checking accounts in order to start building a credible credit record. Most financiers are interested in students who are able to manage their finances prior to offering them loan approvals.

Consult with your credit provider whether they provide student auto loans. The best option may be to make use of the same loan provider as your parents, however be sure that your folks possess a favorable credit rating.

Complete the application for the loan. You might need an endorsement from the bank or evidence of registration for college. Don't be concerned if you're still applying for a part-time job to in the employment sections.

Ensure the that the loan provider offers you some benefits when applying for a student auto loan. Include alternatives such as a reduced rate of interest along with an extended repayment schedule as you are most likely not employed on a full-time basis. A few loan companies will provide you with an additional reduced rate when your parents cosigns for the loan.

Review the quote and include it in to your financial budget. Keep in mind that you will also be paying for fuel, insurance and other monthly bills.

Pay back your student auto loan promptly each month. This particular loan will most likely be among the first factors which will impact on your credit record. Paying your installments punctually will establish a favourable credit rating and will assist you in getting reduced rates for car loans in the future.


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The Basics Of Student Loans And Grants

Since the cost of good quality education is rising higher by the day, it becomes increasingly necessary for students to apply for loans and grants to meet this cost. These student loans and grants have several charges to them, which operate differently. A loan is given with certain regulations such as repayment period and mode of payment as well as eligibility criteria. Student's grants are given for a specific purpose such as research, though they are usually given in bits, and they may not cover the entire cost of the project. Grants are usually given by organizations such as the government or charities, and they are to aid the institution in running their learning affairs. The beauty of these is that they are not repaid and are given as a gift.

Loans attract an interest rate that is dependent on the lending institution. Usually federal student loans attract a much lower interest rate as compared to those from other private financial institutions. Apart from the interest rates, loans also have other charges who are either paid on application or are incorporated to the principal. Loans are also either paid through the college or directly to the student. Institutions that offer grants as a form of the financial aid monitor the use of these monies to ensure that there is no misappropriation and that the intended purpose is fulfilled. In such cases, they either has someone stationed permanently on the ground to do this, or they send in assessors from time to time for appraisal.

A similarity between student loans and grants is that the individual student can apply for either to cover expenses for their education. Loans are applied by the student either through the learning institution or directly and privately to the student. All federal loans go through the school before reaching the student. Private loans can either be channeled through the school or awarded directly to the student. A student may apply for a grant to fund projects that are part of the course work. Learning institutions can also apply for grants to fund the learning activities for their students. Since research ultimately enhances learning, grants can also be offered to fund these so that the quality of education for college students is richer.

Student's scholarships are a form of grant that is awarded to deserving students. Usually this is a form of education financing that most overlooks and one that is readily available and easily accessible. It is so amazing that most students opt for costly and constraining loans while this option is ignored. Most institutions that offer these only require the applicant to write an essay that may not take up more than an hour or so. And on the up side is that it is not a loan, so there are no interest rates and no repayment. It is a free funding program that is aimed at making learning easier and accessible to all. This is surely an avenue that should be pursued before taking the student loans and grants route.
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Tips for Student Loan Repayment

College and other higher education options is an expensive cost. In order to attend a school of higher learning, most students will require a loan. Since added stress can make school hard to concentrate in, the student loan repayment plans can be much easier to deal with than others. Repayment is usually not required until months after you are out of school. Students also tend to get a much better interest rate with a student loan than with other loans. The federal government will also work with the student on a loan settlement if things get too hard to handle. These all combine to make for good loan repayment plans.

The best thing about student loan repayment plans is that they generally don't require repayment until after the student has left school. This includes leaving the school early as well as fully graduating. Since the government is taking a chance on the education of a student, they are figuring that the student is serious about their education and wish to finish their entire schooling. School can be stressful as it is, and most students don't earn a lot of money while attending school. So the repayment plans allow the student to not have to worry about paying back the money borrowed until they have the chance to look for a good job. Nothing is required during the time attending school.

Another good thing about student loan repayment is that the interest rate is generally better than most other forms of loan. The federal government knows that in order to boost the economy, payments for student loans has to be within the reasonable ability of the student to pay it back. By using the lowest interest rate possible, the student will have a greater chance of being able to pay it back with ease. This is a perfect win-win situation since the government still makes enough money to justify loaning the money, while the student is able to save enough money to make the loan an attractive option for completing school.

Student loan repayment allows for a loan settlement option, if things seem to get too difficult to handle. The loan can still be difficult to get control of, even with its superior options. Even people with the best intents, who are in a better position, can find repaying a loan tough. So the government allows for the option to settle the loan. What this means is that after being late for a certain amount of time, the student can offer to pay off the entire loan at a reduced rate. This is normally about 20-30% of the original amount of the loan. This will make the student's credit rating go down a bit, but it will complete the student loan repayment process.

When deciding to continue with higher education, it may be a good idea to look into the options available for student loan repayment plans. Payment usually isn't required to begin until several months after the student completes school. The interest rate for a student loan is usually much lower than most other types of loans. If things get too hard to handle, the government will normally work with the student in order to agree on a loan settlement. These all combine to make the option of securing a student loan repayment plan a very attractive idea.
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Types of Student Loans Available

As a high school student the next step you wish to take is to join college. You need money to do this as college education costs a lot of money. If you're independent or your parents are unable to support you then you need to think about student loans to support you through college. Our Federal government has come up with various financial packages that will help students like us to pass out of college and get a good job.

There are two types of student loans available. Federal loans and Private loans. These loans help a student to pay for tuition, books and living expenses. The major advantage of these loans are the returning period starts six months after you complete your education and the interest on the amount is very low. That is why it is attractive for students to go in for student loans. The popular Federal student loans are Stafford Loan, Perkins Loan and Plus Loan.

Stafford Loan- Federal Stafford loans are given by the government for students who wish to study at least half time in college (graduate and under graduate courses). This is a very popular loan that is availed by students as it is a fixed loan with very low interest rates. A student is allowed to borrow $20,000 per school year. The students can borrow this amount directly from the Department of Education through the school they are joining in.

Perkins Loan- Federal Perkins Loan is given to students who are in financial need for attending post secondary education programs. The amount depends upon the individual's need and there is a standard formula that the financial aid office follows to disburse the amount directly to the institution where the student is enrolled. It is advisable to apply for Federal aid as early as possible as it is on a first come first serve basis.

Plus Loan- Federal Plus Loan is given to parents who wish to educate their children in college. Parents who have good credit rating can apply for Plus Loan to help finance their son's or daughter's college expenses. This money can be used for tuition, supplies, housing and so on. The procedure is the same as the other two Federal Loans. Here EFC (expected family contribution) is also looked into so that the financial aid office can arrive at the exact amount to be disbursed. Also the parent's credit rating including income tax returns, assets and loans if any as well as how many children are studying in college is taken into consideration before deciding upon the loan entitlement.

Private loans - Besides Federal loans there are private banks and lenders who offer student loans as well. The criterion is the same and the procedure is also the same. FAFSA form should be filled and submitted to the lender along with your application. Some of the popular private student loan programs are Sallie Mae, Citi student loans, Monticello, Chase loans to name a few. Private loans basically depend upon your credit worthiness. A co-signer with good credit rating can get you a private student loan. Though it is fixed interest rate, be careful before you borrow.
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Thursday, March 24, 2011

Who Qualifies for a Student Loan?

All of us dream of making it big in life; having a great life with a dashing car, house and tons of money is most of our aim. To fulfill those dreams you need to be educated in today's knowledge based world. Due to rising costs most of us opt out of going to college after high school and take up employment. College education is very expensive and not everybody can afford it. Even students who are living with parents need money for college studies. Hence our Federal Government has come up with student loans.

Who qualifies for student loan?

A student who is a natural American citizen interested in pursuing college studies is eligible to apply for student loan. Though the criterion is the same, each state may have certain eligibility regulations. Check with your school's financial aid office.
  1. If you are in high school and are getting good grades then you need to start looking for a student loan. First decide which college you wish to apply for. Make a note of the money you have or if your parents are financing you. Decide on the amount you need for college and approach the financial aid office.
  2. Fill out FAFSA. This is very important if you wish to apply for student loan. This form is the key to finance your education. A FAFSA form should be filled out accurately and correctly as the information provided by the student can be verified by your school, your state or by federal student aid. If you are given any financial aid on the basis of any incorrect information on the FAFSA, you may be fined for this misdeed. By applying online, it saves time and the hassle of paperwork and the results are also achieved faster. A FAFSA form is also available on paper and can be acquired form the school's student financial aid office but there are chances of more errors than online. Applying for FAFSA online is more advantageous because the system is already prepared for this application and can help while you go along.
  3. Your age and high school records are essential to join college. Maintain good passing grades in at least 60% of a full course load. Your educational qualification and the course you wish to apply for should be mentioned.
  4. The course you are applying for should be a full time course and if half time, your college should recognize it.
  5. If your parents are financing you then they need to show the annual income of the family. Credit rating of the parents is also a must.
  6. If you are military personnel then there are concessions and scholarships available. Now-a-days all information is available on the internet. Check everything online.
  7. Also if you are ready to serve in rural areas or with the Military after completing your education, then your student loan can be waived. Not only that you will be given grants and scholarships to pursue your higher education.
  8. The Federal government has come up with various schemes and methods to encourage youngsters to get into college as knowledge is the only key to success.
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What Is a Student Loan?

An educated society can help us maintain our super power status in today's world. We all know that education is very expensive in America and many people, due to this huge financial burden, quit studying after high school to take up employment. Our federal government has come up with several loans and scholarships to see to it that paying for college becomes easy. These loans are available to all Americans and the loan amount varies depending upon the field you wish to study in.

These loans are money given by the federal government, financial institutions or any lender to students who wish to study in colleges and universities. It helps to pay for tuition fees, books and living expenses. The two most important advantages of these loans are interest rates are very low, compared to other loans. Another advantage is you can pay it back after completing your studies and getting employed.

It is also known as education loan as it helps to pay for college. While in high school you can apply for a loan and as soon as you are ready to join college the money is paid to the college directly by the lender. Every school and college has a financial aid office that will help you to fill out the form that is essential to get a student loan. This is known as FAFSA which is the abbreviation for Free Application for Student Aid. It is very important to fill out FAFSA to be eligible for a student loan. Once you fill FAFSA then you are automatically eligible for loans, financial aid like scholarships and grants and so on. Depending upon your academic performance the college decides the financial aid.

There are two types of student loans; Private loans and federal loans. The federal loans are the Stafford loan, Perkins loan and Plus loan. Among the private loans: Sallie Mae student loans and Citi student loans are the popular ones. Astrive, Montecello, Wachovia are also private student loan companies that help students to pursue his/her dreams of entering college. There is no major difference between private loans and federal loans. Both offer the same benefits, ease and flexibility. The selection criterion is the same where as it is relatively easy to secure a private student loan.

More than $100 billion is set aside by the federal government for federal loans. The U.S Department of Education directly deals with the finance aid office of all colleges and universities for disbursal. Around $10 Billion is spent as private student loans. This easy money encourages students to equip themselves and gain knowledge which in turn helps them to lead a comfortable life. Education never goes to waste and a college degree certainly helps you to get a good job in corporate America. Whether you are applying for under graduate course or post-graduate course it is imperative that you understand the benefits and risks of taking a student to finance your studies. If you take out one than then you will have to realize that you will eventually have to pay it off.
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The Best Loan Options For Students

Students often find themselves groping for loan of one kind or another but they are hardly aware of what exactly are the choices available to them to get financial assistance. So, following are a couple of most beneficial student loan choices for meeting your educational expenses.
Stafford Loan:
Well, these loans are basically federally sponsored student loans. Normally with these types of loans you are saved of paying interest charges since that is done by the government on your behalf as long as you have not completed your studies. These loans are often the first preference of the students.
Parent PLUS Loan:
The Parent loan for undergraduate students is the loan that enables your parents to get loan via the federal loan scheme in order to bear the financial expenses of the ward. Now as the name implies, these loans are provided to the parents under their name.
Private Student Loans:
These loans as the name clearly suggests are not one of those subsidized by the government and often are best for those of you who somehow do not get hold of the federal loans or grants. They can be availed to meet a wide range of your different educational expenses. However, you are often required to have a good credit history to get them or need a co-signer. Plus the interest rates are also normally higher than other types of loans.
Perkins Loans:
Perkin loans are also Federal loans and are meant for usually the students with low financial background. Normally the number of the loans is restricted so you need to rush to avail them. Well other than these, you have an option of credit cards as well. A lot of students employ this method to pay off their college bills. No wonder, it is not that perfect an option yet you can search a little to find suitable student credit cards providing many facilities.
After you are done with your studies, you can always go for loan consolidation option as it can help you decrease the payments every month. However, the only negative side of this option is that it can make you pay big sum of interest because of extending the time span.
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Nelnet: Your Best Choice in Student Loans

Nelnet is the country ' s largest and leading financial institution that aids the typical American family in their journey towards a better education. The institution ' s primary vision is to provide each student a variety of options for them to enhance their effectiveness and efficiency as they face their future. They have a wide range of quality student loan products and services, as well as, lending services that other institutions can use.

Nelnet or the Federal Education Lending Network is based in Lincoln, Nebraska and is ranked one of the top 12 companies having the largest college loan assets. As a matter of truth, true is one of the few privately owned company that offers civic mortgages to students.
Obscure the plentiful other whopper lending companies offering college loans to students who demand to pursue a higher quality education, Nelnet has been exact competitive not alone terminated the mortgage products they suggestion but in other lending services prohibitively.

Nelnet Student Loans - STAFFORD

Nelnet is a few private company that offers rule loans for students. Rule loans have smaller recreation rates compared to the ones accustomed by private lenders. They overture both subsidized and unsubsidized credit shield a fixed care scale of 6. 8 % on unsubsidized loan and an affection standard ranging from 3. 4 to 6. 8 % for subsidized loan. The unsubsidized loan does not have need the student to pament leisure activity extent in edify trick the subsidized loan does not desire them to pay the principal till they graduate from break in. These loans can appear as extended from 10 up to 25 caducity dissemble no other fees to mean paid. Even-handed equaling side student loan, the student is accustomed a 6 months grace word before the rudimentary bill starts coming in.

Nelnet Student Loans - Origin Excellence

This loan is disposed to graduate students pursuing a higher education or parents who have dependents response to college. Unlike the STAFFORD loan, legitimate has a fixed preoccupation proportion of 8. 5 %. Intrinsic also has a grace word of 6 months before the key payment has to act for made. Hank of the loan ranges from 10 - 25 agedness. You can take advantage of this once you have no other federal educational grants. Credit check is conducted and in cases if you have a low credit score, applying with an endorser can help.

Nelnet also extend services like student loan consolidation for students having difficulties managing the various loans they have incurred.

Taking advantage of the various college loans offered by Nelnet will indeed help you finish your education. With this information, it is easy to see why Nelnet is your best solution when looking for financial aid that will secure your future. Visit our website today http://consolidatestudentloanstoday. net and we will aid you on how to take advantage of their various student loan products and services offered.
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