Student Loans & Financial Aid info

Private Student Loans and College Support Agreements

In the 21st century more than half of all marriages end in divorce. In some situations, the fact that parents have divorced can cause some problems and confusion for children of divorced parents who are in need of financing for their ongoing educational needs. Through this article, you are provided with some basic information associated with college support agreements arising out of a divorce and private student loans.

Once you understand the information and materials that are presented to you in this article you will be in a perfect position to make intelligent decisions in regard to your educational financing options. You will be able to access the educational financing options that will best serve your needs today and into the future.

Wise parents who are heading into divorce are those individuals that prepare a written college support agreement in addition to a child support agreement. Such an agreement should specify who is responsible for how much of the college expenses, how many semesters of support will be provided, any limits on annual payments, indexing payments to the tuition at a particular college (for example, a state college), whether there is an age limit (for example, up to age 24, when the student becomes automatically independent), and any restrictions on colleges the child may attend (for example, specific colleges and accreditation).

The agreement should also specify what constitutes college costs (i.e., just tuition and required fees, or also room and board, transportation, health insurance, textbooks and other educational expenses) and whether there are any requirements the child must satisfy to receive continued support, such as achieving a minimum GPA and taking a minimum number of credit hours. The agreement should also specify whether the college support is to be paid directly to the school, to the custodial parent, to the child, or to a combination. Often the percentage of college costs is divided proportionately between the parents according to income after subtracting non-discretionary expenses such as taxes, basic living expenses and health care.

The reason that a college support agreement is essential rests in the fact that generally speaking a child support agreement comes to an end when the child reaches the age of eighteen (or one year later if that child has yet to complete high school). Therefore, there will not be any provision for parental support of a college education in a typical child support agreement.

Once this agreement is in place, an effort can be made to determine an overall college financing package. This can include a private student loan – a private student loan that is taken out by the student or even by the parent who is attempting to finance the educational requirements set forth in the college support agreement. In the end, the private student loan can be perhaps the most effective tool for ensuring that a student’s overall educational goals fully are funded today and into the future.

Your personal checklist:

In the old days, before retirement investing became such an individual challenge, most companies offered pension plans. It was a fairly simple concept. In exchange for years of service, the company promised its employees a certain regular monetary benefit when they retired. The company would then set aside money periodically into a pension fund. That fund paid out current retirement obligations. The basic idea has been around in one form or another for generations.

These days, reaching your financial goals for retirement depends almost entirely on the savings and investment decisions you make today. The process can be planned. By sticking to that plan, you lay the foundation of a financially independent future.

The details of your financial situation may be unique. And priorities must be adjusted for your age, income, education and family status. But the beauty of successful retirement investing is that, for most people, the basic plan is the same. In fact, there are really only seven fundamental steps that a person needs to follow on the path to a financially independent retirement.

Are you on the right path?

Check these seven steps along the path to successful retirement investing to see how many “Yes” answers you can check.

• I participate in my employer’s retirement plan.

Do not hesitate. Starting early is the key to making it easier to achieve your retirement goals. Employer plans make it easy to participate and you can learn as you go.

• I take full advantage of any employer plan match.

This is really very simple. The more you put in, the more they put in. Give (to yourself) until it hurts. It’s as close to a guaranteed return on investment as you can get.

• I save as much as I can on a pretax basis.

Money you put in your employer-sponsored retirement plan comes out of your paycheck before taxes are taken out. That means from day one it is worth more in your retirement account than in your pocket.

• I invest for the long term.

Think long term when you invest for retirement. Mix up your investments among assets. Asset diversification means varying your investments among the asset classes of stocks, bonds and cash equivalents.

• My portfolio is diversified within stock holdings.

Diversifying within stocks means taking your stock holdings and further dividing them up. By diversifying your assets across a variety of investments, you can minimize the effects of market ups and downs on your overall portfolio.

• I avoid frequent trades.

It’s next to impossible to predict the market’s next move. Have a reasonable strategy and stick with it.

• I let my investments grow.

At times, it can be tempting to borrow or withdraw a portion of your money and take your lumps. But taxes and penalties are only part of the cost. The real damage is done over time as you lose the compounded interest of that money. There are plenty of other less costly ways to address short-term financial needs.

Financial independence isn’t a hazy vision in the distant future that may happen if you’re lucky. It is a condition that actually exists as long as you are working to achieve that future.

Home Schooling and Private Student Loan Financing

If you have spent your early years being home schooled, you may have some serious concerns about what types of financing will be available to you should you desire to pursue your education to the college or university level. You may be wondering whether or not you will qualify for government backed or private student loans after spending your formative years being home schooled.

Through this article you are provided with essential information relating to what is available to people who have been home schooled when it comes to government backed and private student loan options. Armed with this information you will know what resources are available to you today to finance your education into the future.

Students that have been home schooled are eligible for Federal student loans (and private student loans by extension) provided they have “completed a secondary school education in a home school setting that is treated as a home school or private school under State law” (Section 484(d)(3) of the Higher Education Act of 1965).
Since 1998, in order to qualify for Federal or private student loans, home schooled students are no longer required to take the GED or the Ability to Benefit test. The Higher Education Amendments of 1998 removed these requirements as far as home schooled students are concerned.
Generally speaking other types of financial aid are also available to home schooled students – beyond Federal and private student loans. For example, in most instances home schooled students will be able to qualify for different types of scholarships, grants and work study programs. However, you do need to keep in mind that many private scholarships actually do require that a home schooled student pass the GED before he or she can qualify for a private scholarship.

If you have been home schooled and if you are intending to apply for a private student loan in addition to any other financial aid that you may be seeking, you need to make certain that your home schooling course of study did meet state requirements for that type of educational programming. In this regard, you will want to consult with your lender to find out exactly what type of documentation will be required in this regard.

Understanding the confusion that can arise when a home schooled student is seeking financial aid, there are organizations in operation today that, in part, provide support services, information and guidance to home schooled students who are seeking financial aid, including private student loans. There are also now some limited scholarship opportunities that are available exclusively to home schooled students.
Of course, as more and more students complete home schooling programs, the financial aid system itself will better adapt to this type of learning structure. Once again, if you are unsure what a lender may require in regard to supporting documentation associated with your home schooling program, make certain that you discuss any questions you have with your lender very early on in the process.

The percentage of individuals owning shares in stocks or mutual funds has never been higher. One reason is the relative ease with which information and transactions can be handled online. The other reason is more and more employer-sponsored retirement plans are offering participants the option to invest their contributions directly into mutual funds and individual stocks of their choosing.

This is what’s known as the brokerage option. Is it right for you? Possibly.

Keep in mind the stock market doesn’t care where the money from your investments comes from. There are some important considerations on your end that we’ll get to in a moment. Before you hop out of the cab on Wall Street with a fistful of cash, you might want to ask yourself a few questions:

* Am I willing to see the value of my retirement account fluctuate?
* Do I accept the possibility that I could lose most or all of my market investments?
* Do I understand or care how financial markets work? How mutual funds work?
* Do I like spending time tracking the performance of my investments?
* Would I know when it is a good idea to buy or sell shares or to move money in or out of certain mutual funds?
* Do I understand why higher risk usually accompanies higher return? How a diversified portfolio manages that risk?

These are the kinds of things professional investment advisors think about every day as they make decisions in the best interests of retirement plan participants. By choosing to manage your own investments, you are taking much of that responsibility on yourself.

If you answered yes to these questions, a brokerage account may be an excellent option. If not, there’s no reason to rush into the market on your own. It’s important to realize the vast majority of retirement plan participants are unlikely to obtain a significant financial advantage by managing their own investments. Often, people merely increase their risk without realizing how difficult it is to beat the market.

On the other hand, if the opportunity is available, you might want to consider small steps in that direction. You can risk being too conservative by missing out on opportunities for your portfolio to grow with the market. Most plans with a brokerage option offer a wide range of mutual funds. Your plan administrator should have information available to help you get started with fundamental investments decisions.

And that brings us to the two main differences between investing inside and outside of qualified retirement accounts: taxes and time.

The money you put in your qualifying retirement account is typically tax-deferred. This simply means you don’t pay income tax on that money until it is withdrawn. The interest or gains realized when market investments are sold are also not taxed until the money is withdrawn.

By contrast, returns on investments made outside your retirement plan with after-tax money are taxable in the same year they are realized.

In general, retirement investments are long term. This gradually changes, of course, as you approach retirement. But your investment “window” is an important component of any successful strategy.

Aggressive investments are designed to become less risky over the long term because their volatility often has a chance to even out.

At the same time, more conservative investments may have the time to compound into significant balances.

All of this simply means that investing for retirement can and should be done with specific long-term goals in mind. How you get there depends more on you than it does on the market. And that’s a good thing!

You may not be sure how much you really need to save for retirement. But you don’t need to have all the details worked out in order to start saving. Start with a rough estimate and begin saving something.

The important thing is to get started as soon as possible. Even setting aside a small amount each month will pay off later. Something is always better than noting.

Time is your friend
It’s never too late for anyone to start saving. but the sooner you begin, the more time your investment will have to work for you. If you are just starting in your career you have the greatest advantage of all: time is on your side. This example shows what a difference a few years can make:

Lisa invests one-third the amount David did but, she ends up with $52,000 more than David. How does she do that? Simply by starting 10 years sooner. By having time on her side, Lisa takes advantage of the power of compounding.

Ready, set, go!
So, we know you need to start saving but, were is the best place for your money? Here are three common ways people invest for retirement:

401(k): This is a type of plan offered by many employers that allows employees to make pretax contributions. You don’t pay taxes on the money you put into the plan, or on the earnings. Taxes are deferred until retirement, when your withdrawals will be taxed. Many employers also offer matching contributions up to a certain amount.

Traditional IRA: An IRA is an Individual Retirement Account. A traditional IRA is similar to a 401(k) plan because contributions are tax-deferred. Your contributions grow tax-free, and you pay taxes on the withdrawals you make during retirement.

Roth IRA: This is a special kind of IRA. You make contributions after paying taxes, but then your earnings grow tax-free and you don’t pay taxes on retirement withdrawals.

401(k) plans offer the greatest advantages and are usually the best starting point for young investors. Work to participate up to the match, especially if your employer offers matching contributions. Matching contributions are money you will miss if you do not participate. If you are starting a new job and have a waiting period before you are eligible to participate in your company’s 401(k) plan, start by putting money into an IRA instead. Both types of IRAs can be a great way to add to your retirement savings if you’ve maxed out your 401(k) plan contributions. No matter where you put your money, take charge of your financial future today. There’s no good reason to wait, and many great reasons to get started. You will be glad you did.

Stay tuned for more future savings tips.

A.A.: Associate of arts degree, That can be acquired at most 2 year colleges.
A.A.: Associate of applied science degree, That can be acquired at most 2 year colleges.
Ability to Benefit: Foundation on which person studying, with no upper secondary school certificate or comparable, can be in the running for financial support. The Department of Education upholds a listing of permitted tests which determines the persons power to profit from the curriculum in which they desire.
Academic Year: The time line schools apply in order to measure a learning amount. Each schools curriculum is different, semester hours and programs of study will vary.
Acceptance Form: Acknowledgement of receipt by student. Most of the time, the paper will include any possibility of the person being declined of any part of the deal, types of aid available, and means of asking for an appeal, that would change the letter.
Accrued Interest: Interest that builds over time when the balance of a loan is not being paid off.
ACT: American College Testing, Iowa City, Iowa.  The test that will determine if the person will or will not be able to learn what is necessary to do a certain type of job. The last two years in high school is usually when students take this test, or that SAT. The ACT or SAT , tests students in Math, English, Science, and Reading.
Actual Interest Rate: The yearly interest rate a moneylender is charging on a specific loan. The rate can be identical or less depending on the rate of the loan.
Adjusted Available Income: Following the withdraw of local, state, and federal taxes; permitted amounts of money, plus some other influences used by the Federal Need Analysis Methodology, will be the amount of the familyʼs income.
Adjusted Gross Income (AGI): Anything that is a taxable revenue that is listed on a United States revenue tax return.
Administrative Wage Garnishment:  The procedure of somebody who assumes debts, under federal law, with a failed FFELP loan can take a share of money from the debtors.
Advanced Placement (AP): High school students who have previously been enrolled in some complex classes can receive recognition and/or permanent placement in specific curriculum’s.
AFROTC: Air Force Reserve Officer Training.        
AGI: Please read Adjusted Gross Income.
American Counts and American Reads: Programs that are funded by federal government to help students that are enrolled in postsecondary schools to do business with children who are in need of help with reading and math. Students who are in college have an obligation to have filed a FAFSA and have to be approved a Federal Work-Study certificate to be in consideration for employment as a math or reading trainer at a near by elementary school.
Americorps Program: Brought together with help from the National and Community Service Act of 1993, to make a set of activities with a specific goal that gives back to those who have offered a service to the community that has offered educational rewards. Students who are enrolled in college may do activities during, after or before their curriculum, and may use the resources to pay off past or present school loans.
Annual Percentage Rate (APR): A twelve month time line in which the interest of  a loan is substantiated.
Army College Fund: A plan set up for those enlisted with specific employment and skills who achieve a fifty on their Armed Forces Vocational Aptitude Battery test to receive educational assistance.
Army Reserve Student Loan Repayment Program:  An offered plan to repay student loans that is available to inactive members of the military force; amount of reimbursement is dependent on term of service and job skills.

Any physician that has graduated from an accredited four year allopathic or osteopathic medical school in the U.S. can apply for an Underserved Community Program for repayment of their medical school loans. Some states may also accept other types of medical programs. There is also usually a provision that states the doctor cannot have practiced for more than one year before they apply for the program. This time period also may vary by state.

Every board at the State Health Council has certain physician selection criteria that they follow when looking at applicants. The main criteria are usually: the extent that a physician’s medical specialty is needed in a the selected area, the doctor’s personal commitment to serve, the ability to find a financial match with a selected community, the time frame that the physician will be able to start providing services and his or her professional competence and conduct. Preference is sometimes given to medical school graduates from the same state that is offering the program.

Communities are eligible for the Underserved Community Program based on the following criteria: the doctor to population ratio, the access that community residents have to proper medical care, the combination of physician specialties in the area and the indicators of community support for a physician. Communities that have less than 15,000 people are given priority.

Physicians who enter these programs cannot receive more than the sum amount of their student loans from the state and community. The payments are usually made in two installments: six months after the doctor has begun his or her full time practice and at the end of the agreed upon term of service.

One of the most exciting times in a person’s life is the period when planning for college. Preparing for and then going through college really is an incomparable experience as meeting new people and making new friends while expanding one’s mind is elevating on many levels. If you have reached that point in your own life – or if you are the parent of a child who has reached that point in time – you need to start thinking about financial aid and issues related to financing a college education.

The reality is in the 21st century that the typical family simply does not have the financial resources necessary to pay all of the costs associated with a college education. Therefore, it is necessary for a young person heading off to college and his or her family to give serious thought to the different financing options that are available in this day and age. Federal financial aid helps, as do say, Stafford or Perkins loans. But many students and families are finding they need additional funds to cover the full cost with attending college.

Of course, in recent time there have been innumerable media reports about young people finishing college saddled with huge amounts of debt. These young men and women are beginning their adult lives struggling to stay financially afloat. While these stories are examples of what can happen as the result of using student loans, they are not examples of what has to happen when using student loans to fund an educational experience.

The fact is that student loans – obtained and utilized prudently – can be invaluable tools in helping a person achieve his or her educational goals. Student loans can provide the perfect tool (again, if used appropriately and prudently) to give a person the educational foundation that he or she needs for a productive and happy life.

We believe it is wise to make a plan, take your time and learn about the entire financial aid and student loan processes. When considering lenders for student loans, compare, compare, compare. Speak with companies over the telephone to test their level of customer service. Shop around and find the right deal that meets your family’s needs.

Today the government grant and loan programs for students are making it possible for more students to achieve their dreams of a college education. Even though they require some time spent filling out forms, chasing tax records, and finding this number or that proof, they have made dreams come true for many. These low interest, no-fee loans also offer the student a six month grace period to begin making payments on these loans.

However, what if these loans aren’t enough to pay all the educational expenses? There are limits to the Perkins Loan and the Stafford Loan (which are different for subsidized and unsubsidized loans). While these limits are okay for the majority of the student education expenses, there are often gaps in need and coverage. For this, many students turn to private student loans. There are also some great private loans for parents as well, and these are sometimes easier to obtain since the parents usually have more of a credit history, are employed, and can fulfill more requirements for the loan.

Private student loans should be the gap fillers, and should only be used to supplement and fulfill what the government guaranteed loans do not.

NOTE: The following statements and opinions are made by content editors and are not the views or statements of respective companies. The Sallie Mae private loans have great interest rates, are tax deductible, and are flexible in payment options. There are several different Sallie Mae loan products for parents; here is a rundown on those loans and how they can help you.

Signature Student Loans
This is a student loan that provides for a cosigner. Students who are attending an approved community or four-year college at least half time towards a degree are eligible under certain conditions. The cosigner increases chances of approval, there are no employment requirements or origination fees for the student, and overseas programs are approved with certain restrictions. Like the Stafford and Perkins programs, you are not responsible for repayment until you are out of school or graduate.

The total loan limits are $50,000 for community colleges, $100,000 for undergrads at four- or five-year colleges, $150,000 for grad students, and $220,000 for grad students in health studies.

The Tuition Answer Loan
This is another cosigner loan, and requires that the borrower and student are U.S> citizens or permanent residents. The borrower (likely the parent) must have good credit, and the student enrolled half time or full time in an approved school.

You can borrow between $1,500 and $40,000 per year, and interest may be tax deductible depending on circumstances. One of the best things about this loan is there are no deadlines or federal application forms. The total limit of this loan is $130,000. One thing to remember is that this loan is provided at the prime rate and there will be an additional margin depending on the credit history or cosigner. You can defer payment until after graduation, but this will cause higher fees. You can also pay interest only while the student is in school, or make standard payments as soon as the loan is taken out.

A student loan is money that you borrow, which must be paid back. They are designed to assist you in meeting your total cost of higher education. The application process in applying for a loan can seem intimidating, but it not something one needs to be scared of. Not applying for student loans can prohibit students from attending the college or university desired. It is important to take time, become educated, research your different loan options and exercise your right to choose the lender you feel best meets your needs.

College loans are the ‘do-it-yourself’ portions of your financial aid award letter received after filing the FAFSA. The school is not going to apply for the loan for you. An application needs to be filled out for the respective loan, be it a Stafford loan, Federal Perkins loan, Direct or private loan to name a few loan types. Private student loans are different than Federal as Private loans are credit based and require an established credit history or a worthy cosigner. Interest rates are traditionally higher for private than Federal loans.