Student Loans & Financial Aid info

So, you have decided to become a doctor. How do you think you are going to pay for it? There are many programs out there to help with financial aid. The below is giving you some guidelines about eligibility and such.

The purposes of such programs are to enable needy medical students to obtain medical school loans and funds to pursue a degree of medical doctor (M.D.) or doctor of osteopathy (D. O.) at the college or university of your choice.

ELIGIBILITY:

To be eligible for loan consideration, an applicant must:

1. Be accepted for enrollment or be enrolled full-time at an approved school of medicine with priority consideration given to residents of the state,
2. Meet designated academic standards,
3. Demonstrate financial need, and
4. Not be in default on any previous student loan(s).

APPLICATION:

Applications must be obtained from the Financial Aid Office of the educational institution to be attended or are currently attending.

SELECTION AND NOTIFICATION:

The institutional Financial Aid Office is responsible for
(1) Determining eligibility for the loan and
(2) Notifying individual students of the action taken. Funding availability may limit the number of awards or the value of individual awards.

RENEWAL:

Students are permitted to seek loan assistance for each year until the course of study is completed. An annual application may be required. The educational institution is under no obligation to approve subsequent student loan requests even though all eligibility requirements are met.

ANNUAL LOAN AMOUNT:

The maximum annual loan amount cannot exceed $10,000.

REPAYMENT:

The first payment will be due one year following the date the borrower ceases to be a full-time student at a school of medicine that participates in this Program with a maximum of 10 years to repay the loan (principal and interest). Students will be eligible for payment deferment during periods of required military service or approved additional medical training, including internships, residencies or fellowships (not to exceed 5 years). The minimum repayment amount shall be no less than $50.00 per month.

INTEREST:

The rate of interest charged on all outstanding loans awarded on or after September 7, 2002 shall be the prevailing Federal Stafford Loan interest rate at the beginning of the repayment period and shall accrue, except for periods of authorized deferment, from the beginning of the repayment period.

LOAN FORGIVENESS:

Loan indebtedness (principal and accumulated interest) will be forgiven at the rate of up to $5,000 for each period of twelve consecutive months of full-time practice in an approved designated medically underserved area in a medical specialty designated as a critical shortage field in the state. Once the student enters practice he/she needs to complete and submit the Postponement of Loan Payment form. At the conclusion of each 12 consecutive months of full-time practice, the Certification of Service for Loan Forgiveness form needs to be completed and submitted to obtain credit for the past year of practice.

These are just general guidelines on eligibility to apply for a student loans in your chosen college or university. The actually guidelines may vary a little, but these are the basics you need to look for.

Remember to always read the fine print and do not be afraid to ask questions. If the answers do not seem right to you do not sign.

Flashback news: President Bush signed into law a student loan bill that will provide more than $20 billion in college student federal aid and is being likened to the G.I. Bill, which helped millions of World War II veterans attend college.

The law, which received overwhelming bipartisan support in Congress, will slash federal subsidies to private student loan companies and increase grants for students. It will gradually reduce interest rates on federally subsidized loans for low-income students to 3.4 percent over five years. The law will also offer loan forgiveness for those who have held public service jobs for 10 years and will cap payments on federal loans at a certain percentage of a college graduate’s income.

The new law, the College Cost Reduction and Access Act, overhauls the nation’s student loan system. Recent investigations have revealed how lenders have showered university officials with gifts to woo student borrowers and drive up profits. Congress reacted sharply to the disclosures, and the support to revamp the student loan industry was considered a rare bipartisan endeavor.

The House of Representatives approved the law 292 to 97; the Senate vote was 79 to 12. There were no democrats that voted against this bill, only republicans.

“This bill will help ensure that no qualified student is prevented from going to college because of the cost,” said Rep. George Miller (D-Calif.), the House education committee chairman said he is proud that Congress has “provided the greatest investment to help students and parents pay for college since the G.I. Bill and has delivered on our promise to make college more affordable and accessible for families.”

However, as Bush signed the bill, he suggested that it is not perfect. “This bill makes some spending commitments that aren’t paid for yet, and I look forward to working with the Congress to ensure Pell Grant increases that are not fully funded in this bill are paid for with offsets in other areas.”

Kevin Bruns, executive director of America’s Student Loan Providers, said the new law would take away 80 percent of the companies’ federal subsidies over the next five years, which could result in fewer loan benefits for students.

Bruns said that about 3.5 million middle-class student borrowers might face a new reality in which lenders can no longer offer them interest-rate reductions for timely payments. “This bill is wiping out the profit margin for even the largest lenders,” Bruns said. “How can you run a lender-based program if you’re not allowed to earn a reasonable profit margin?”

Student advocates dismissed those criticisms. Luke Swarthout, a higher education advocate with the U.S. Public Interest Research Group, said the backlash reflects complaints from one of the countries “more excessively subsidized industries.” Two of the student-friendly parts of the bill, he said, are the increase in annual federal Pell Grants, which will shoot up to $4,800 next year, and the income-based payment cap.

“The program will stop people from making unmanageable payments,” he said. “The concept is that no matter what job you take, your income is protected.”

Barry Toiv, spokesman for the Association of American Universities, said the increase in Pell Grants is a victory for students, because the new law guarantees that the grants will reach a value of $5,400 a year by 2012.

“The Pell Grant has not been close to keeping with the need out there with potential students,” Toiv said. He said he is unsure whether lending companies will be crippled by the measures. “We think this is an important step in the right direction. I think we will just have to see what the impact is. It’s hard for us to know.”

This is what is happening. It is hard to predict the outcome of all of this. Truly only time can tell. You read the facts and make your own decision. I encourage you to not let this stop you from seeking the right student loan for you. They are still out there.

 College Grants for Education Everyone loves free money, so why not find some to pay for college? There are numerous government and private organizations that fund grants for post-secondary students. These grants can be used to pay for tuition and other related expenses.
While it is uncommon to hear the term grant and scholarship used interchangeable, they are two different things. A grant is very similar to a scholarship. However, grants are typically awarded to students based a set of requirements. In most cases, a student can fill out a form and if he or she meets the specified requirements, grant funding is awarded accordingly. In general, grants are funded through state and federal programs. The funding comes from taxpayer dollars.
The United States Department of Education offers the popular Federal Pell Grant. This grant is based solely on a student’s demonstrated economic need. To apply for the grant fill out a Free Application For Federal Student Aid (FAFSA). If you qualify for the grant, the school of your choice will notify you. The amount of an awarded Pell grant varies based on need. The maximum amount a student can receive in 2008 is $4,600.
The government also offers merit-based grant money. Typically the state government offers this type of grant. The money is awarded based on the student’s grade point average, income level, and year in school.
Because each state operates its own grant programs through the state’s department of education, the application process tends to differ. Some programs can be applied for via the FAFSA, while others require a separate state application. Also keep in mind, not all state offer student grants. If you are unsure about the programs offered in your state, ask your high school counselor or a financial aid representative at your college.
Applying college grants is not difficult. Considering the funds are free money, the end result is worth the effort of filling out and submitting an application or two. Do keep in mind that most grants require the recipient to reapply each year. Additionally, just because a student is awarded a grant one year, doesn’t mean he or she will automatically qualify the following year. Learn more about college finances at www.student-loans.org 

When Federal Student Loans, such as the Stafford or PLUS loan, does not quite cover the cost of education, a private student loan can help.  You can use it to help cover education related expenses such as tutors, computers and software, books, travel and that last minute tuition hike.  With competitive interest rates and no application or out of pocket fees, many private student loan companies can help supplement your financial aid package.

Generally, you can borrow up to $40,000 a year.  You can have the funds sent straight to your with 5 business days of completing an application and you can defer all payments until after you graduate.

To qualify most applicants would need a co-signer.  You can improve your chances of receiving the private student loan for money you need for college and reduce your costs of borrowing with lower rates and fees that may apply.  Of Course you can apply without a qualified co-signer, you will just need to meet all of the following credit requirements.

Usually requirements needed to apply for a private student loan are satisfactory employment history for at least the last two years, proof of current positive income, at least 21 months of credit experience and satisfactory credit history.  You must be a US citizen or permanent resident and reside in the US for the previous two years.

In addition you must be an undergraduate student enrolled in a degree or certificate program, enrolled at least half-time as defined by your school, attending an approved school and finally able to provide proof of enrollment.

Not so difficult.  In most cases, one would need to get a private student loan to further fund there higher education.  As long as you have gotten all federal aid, grants, and scholarships, this would be your next step.

Understanding student loan interest rates
by Aimee Carson, Student Loans.org

One thing students do not have to worry about with their student loans is the student loan interest rates, at least on federal and state loans. Student loan interest rates on federal and state loans are usually very competitive and probably lower than the student loan interest rates they would receive on private loans. This is not to say however that student loan interest rates are fixed, in fact they do fluctuate with the current economy, however the student loan interest rates rarely fluctuate so much that it makes a significant difference in the overall amount of money due after graduation.

Students should however become accustomed to checking their student loan interest rates just to make sure that nothing starts going amiss. Fortunately checking student loan rates is fairly simple especially if you have an Internet connection. And if you’re reading this, well, you get it. More than likely most all students’ government student loans are handled by one company that issues the loans, the lender. In most all cases the company has an up to date website where students can go to check their loan information including, but not limited to, their current interest rates.

Although there really isn’t anything you can do about student loan interest rates, it is still a good idea to keep ahead of this information not only to better prepare yourself for your financial future, but so that you can more accurately estimate what your repayment costs will be after graduating by adding the student loan interest rates into the total money due.

Once you start talking about private loans, however, student loan interest rates can become a whole other ballgame. Because there is no real governing body over student loan interest rates on loans issued through private banks and credit unions, these interest rates can fluctuate wildly and be subject to unfavorable terms and conditions under certain circumstances. Therefore if you do plan on getting private student loans you’ll definitely want to look at the student loan interest rates information associated with that loan, as well as READ ALL FINE PRINT before agreeing to any terms or signing anything.

Student loan interest rates are nothing to be scared of. In fact they are just like any other interest rate out there, and learning how to better manage your interest rate while you’re still in school is a great learning experience. By managing your student loans responsibly, you not only are helping to secure your financial future you’re also learning a valuable skill. Start educated, stay informed and be positive. Stop by our student loans.org to learn college loan basics and take a look at the current popular student loan lenders.

Student Loan Terms

If you plan on entering the world of student loans, there are a few terms you should know.

Anticipated Graduation Date - The date you anticipate completing your degree program and exiting school. Applications for student loans contain this date and must be verified by the school.

Capitalization of Interest – The practice of adding interest to the principal amount rather than making interest payments. This option increases the total amount you owe on your student loans and your monthly payments.

Delinquency – Loan payments that are late or missed are considered delinquent. Once a loan is delinquent for more than 180 days, it goes into default. When a loan is delinquent, it appears on your credit report and can limit your ability to obtain credit.

Forbearance – A postponement of loan payments. Sometimes a forbearance is only a reduction of loan payments. Either way, interest continues to accrue during this time frame.

Guarantee Fee – A monetary fee paid to the agency that guarantees a PLUS or Stafford loan issued by a private lender under the Federal Family Education Loan Program (FFELP).

Half-time – Refers to your enrollment status at a school. Students who drop below half-time (which is usually 9 quarter hours or six semester hours per term), enter their grace period on all their student loans.

Origination Fee – A monetary fee that helps defray the government’s costs for subsidizing federal student loans.

Prepayment – Making payments on your student loans ahead of schedule.

Principal – The total balance of you student loans on which interest is charged.

Student Loan Servicing – Lenders, including postsecondary schools, sometimes pay a separate organization to service student loans. The organization is in charge of collecting and processing loan payments.

Tax Offset – If you default on your student loans you are subject to tax offset in which state and federal income tax refunds can be seized and put on the loan.

To learn more about student loan terms, visit ED.gov’s Student Aid section, from the U.S. Department of Education

PLUS Loan Info

Parents who want to assist their children with funding their higher education can do so through the federal PLUS Loan program. The program allows parents to borrow money that directly pays for education expenses incurred by their dependent, undergraduate student. Students must be, or plan to be, enrolled half-time or more at an accredited school or university to qualify.

PLUS Loans are applied for through a designated application available at your school’s financial aid office. The program offers two types of loans to choose from – the Federal Family Education Loan (FFEL) and the William D. Ford Federal Direct Loan (Direct Loan). Parents are eligible for one loan or the other, but not both. They must also have a positive credit history to qualify. This is a credit based loan, as are private student loans.

Once approved, parents can borrow a formulated amount of money each year. The yearly limit on a PLUS Loan is equivalent to the student’s cost of attendance minus any grants, scholarships or other loans the student has.

Loan disbursements are deposited directly to the school. Extra funding, to assist with school-related costs, is given to the parent once all the tuition and other college-based fees have been paid. If pre-approved by the parent, the school can also turn the excess money over to the student. These remaining funds must be used for expenses directly related to the student’s education.

Interest rates for PLUS Loans is currently 8.02 percent. Depending on the loan, interest is charged from the date of the first disbursement until the loan is paid off. Loan repayment also begins directly after the first disbursement, although in some cases repayment can begin within 60 days.

Additional fees also apply for FFEL loans. Each time a loan disbursement is paid, parents are responsible for a fee of up to 4 percent of the loan. The fee benefits the federal government with a portion of it going to the guaranty agency that helps to reduce the cost of parent loans. Additional information about student loans can be found on the Student Loans.org homepage.