Student Loans & Financial Aid info

The widening sub prime mortgage crisis has snared another traditionally safe corner of the credit markets: private student loans. Many parents and students lining up college financing this spring will find fewer companies offering loans and, for private student loans, more stringent lending criteria and higher interest rates and fees.

Unlike federal loans, whose interest rates are capped by law, private student loans—offered through banks, credit unions, and other lenders—typically charge variable rates tied to credit scores. Students taking out these loans could see their rates rise by half a percentage point to a full point.

Why are private loans feeling the pinch? Like mortgages, some private student loans are bundled and sold on a secondary market, where they are used to fund new loans. However, skittish buyers are not biting, and some lenders are having a hard time raising enough cash to keep making loans. Unlike with federally backed loans, no one is serving as the backstop for defaults, so investors are worried that these bundles of loans will not turn out to be safe. Meanwhile, lenders are also coping with a new law that limits federal subsidies on government-backed student loans. As a result, some lenders have scaled back on the types of private student loans they offer. Others have taken action that is more dramatic by stopping private student loans all together.

Growth spurt. Private student loans are the fastest growing segment of the student loan finance market. In 2005-06, students took out $17.3 billion in private student loans, compared with only $1.3 billion a decade earlier, according to the College Board.

Aside from raising interest rates, lenders of private student loans are toughening their standards. The nation’s largest private student lender, Sallie Mae, recently announced that it is no longer providing private student loans to students whose credit ratings are below prime. Lenders are likely to require a credit score of at least 650 to secure a private student loan, up from a previous requirement of 620. Students with no credit history will also run into roadblocks. A 20-year-old with no credit and no cosigner is going to find that rates will be quite a bit higher.

But do not lose heart. Were there is a will there is a way. Your education is a very important part of your career for the future. There are many different options that will work for you. First of all, do not forget about the federal student loan programs. Check them out first and get all you are available to receive. Only use a private student loan if you have too.

If you decide you do need to apply for a private student loan. Talk with your parents or grandparents. With their good credit history your troubles will be few. Keep in mind you are working off of someone else’s good credit, so you must be mature about how you handle it.

Your in college so it is time to step up to the plate and act like an adult. Go get em!

Getting ready to start college takes a lot of preparation on your part, this includes understanding the student loan borrowing process and how it works to help finance your education. First, you have to know that there are several different types of student loans that are available for you as a college student. All of them boast varying benefits, terms and conditions. You can start educating yourself on the various types of student loans out there by engaging in a little research. Depending on your individual financial situation, you should be able to find some loans that work for you.

Before you can even be considered or eligible for any type of college loan, you have to first fill out the Free Application for Federal Student Aid or FAFSA form. This form is essentially the first piece of information that is needed during the student loan borrowing process. If you go to your college’s financial aid office, they should be able to provide you with the FAFSA form and answer any questions you may have about filling it out. You can also obtain it online and submit all of your information through the Internet, which is a significantly quicker way to get through the process.

After you have submitted your FAFSA and it has been processed, you will then receive a SAR, or Student Aid Report. The purpose of this report is to show the amount of money you or your family is eligible for as well as the approximate amount of funds that will be contributed towards the cost of your tuition. Qualifying for grants or other types of private funding is generally determined by your school or university. Once you know what you are or are not eligible for, you can determine how much you will need to borrow from loan lenders.

Types of Student Loans You Can Consider

College loans can be broken down into four different groups. These include:

• Student loans (Stafford and Perkins) 1-800-4-fedaid
• Loans for parents (PLUS) 1-800-4-fedaid
• Private student loans
• Consolidation loans

If you are wondering which loan would work best for you, then you have to assess your individual situation in order to determine the right choice. The Stafford and Perkins loans are two popular student loans that most college students find easy to qualify for. Both these loans are available to undergraduate and graduate students who are attending college on a full or part-time basis. An added benefit to these loans is that you don’t have to have an established credit history (which most young students tend to lack) in order to be eligible. As a struggling student, you will probably also appreciate the low interest rates that the Perkins loan offers. The subsidized rates that the Stafford loan offers can also be beneficial for you.

If you are not able to obtain any grants or scholarships, do not get discouraged because a parent may still be able to apply for the Parent Loan for Undergraduate Students or PLUS loan. What this loan essentially does is allow a parent to borrow the funds necessary to finance their child’s college education. However, there are a couple important points to keep in mind with a PLUS loan. Repayment of the loans starts only 60 days after taking it out and the interest rates attached are not subsidized.

Another option you also have is the Sallie Mae student loan. If you are not familiar, Sallie Mae is a financial institution that oversees Federal student loans. Sallie Mae is known for offering students a combination of college loan options that can meet their needs all in one place. Student loan consolidation is also worth considering as it allows you to lump all of your loans into one single payment and also helps to eliminate higher interest rates.

Getting a college education is extremely important, however more often than not many people have to side step it due to financial constraints. Remember that the loans mentioned above are truly meant for aspiring students, who want to make something more of themselves by attending an institute of higher learning. As the saying goes, “a mind is a terrible thing to waste,” and you do not have to anymore!

 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 

How to Find your Student Loan Information
complied and presented by student loans.org

WARNING: Students who take out too many student loans during the process of earning their college degree sometimes exit school with numerous loans through many different lenders and having too many lenders can and does often cause confusion. Many people lose track of a couple student loan bills/lenders.

How do you find out who is holding your student loans from college?

As your student loan payments come due ( which is six months after graduation or when one drops below half time enrollment status) borrowers consider student loan consolidation. The borrower must have his or her student loan information to start. The National Student Loan Data System (NSLDS) provides one-stop shopping for student loan information. The NSLDS is the U.S. Department of Education’s central database for student aid information.

To access the NSLDS, you first need your PIN. Most likely, if you applied for your student loans via the electronic Free Application for Federal Student Aid (FAFSA) you have a PIN. If you have forgotten your PIN, you can visit the Department of Education’s PIN retrieval site. Students also need their Social Security Number, the first two digits of their last name, and date of birth to access the NSLDS system.

Overall, the NSLDS tracks only federal student loan information and all other Federal student aid programs. Students can view every award they have received during their collegiate career. The NSLDS provides information on Title IV Loans, grants, Direct Loans, and PLUS Loans. Information in the database is constantly being updated with information provided by schools, agencies that guaranty loans, and all other U.S. Department of Education programs. Loan balances, status, disbursements and other student loan information is available through the system.

Access to the NSLDS is available 24 hours a day, seven days a week. The database is down during late hours over the weekend for maintenance purposes.

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

Debt Consolidation Loan for Medical Bills

If you are one of the many thousands of people who are having trouble paying your past due medical bills a debt consolidation loan may be the answer to your financial problems. Through this article, you will be provided with some basic information about how a debt consolidation loan might be very helpful to you in dealing with past due medical bills.

Creditors and debt collection agencies are hounding many people who have incurred medical bills that they are unable to pay. Many people feel that they have no way out of this situation and it becomes overwhelming. Once again, as mentioned a moment ago, a bad credit debt consolidation loan may be the solution for you.

If you are one of these people and you know you are spiraling downward to financial disaster then you will want to look at some of your options. One of these may be to set yourself up on a realistic budget that allows you to gradually pay down each of your outstanding medical debts. Another may be to work with a reliable credit-counseling firm that can negotiate with your creditors and reduce or set up a reasonable pay back period. Another option is to get a debt consolidation loan that will allow you to pay one affordable payment and get the monkey off your back. The least desirable answer of course is to file bankruptcy since the ramification of this option is quite devastating.

A bad credit debt consolidation loan is most beneficial for those who have a bad credit history. A bad credit debt consolidation loan provides a manner in which a person can prevent their financial situation from further deterioration. Each and every year, thousands upon thousands of people turn to this type of financing option as a means to bring a sense of order to their lives. On many levels, countless numbers of men and women have found this type of financing to be nothing less than lifesaving … at least from a financial standpoint.

The debt consolidation loan serves to replace many small and big debts that a person may owe. This loan is used to repay all the debts that the person currently has incurred. Normally there is a 30 to 60 day period after the loan is taken out before the person has to pay their first payment therefore giving them the time to prepare for the repayment.

A borrower is classified as bad credit risk when they have defaulted on the repayment of debts in the past. The interest rates charged by lenders for a bad credit debt consolidation loan are higher than for those who have a good credit history. However, depending on your circumstances, this type of loan may be the best — if not the only — option that is available to you today. Therefore, when it comes to dealing with mounting and impossible to manage medical bills, the time may have come to take out a debt consolidation loan.

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.

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.