Student Loans: Where to Start?

The world of student loans can get confusing. Students are needing to borrow more and more to keep up with the rising costs of higher education. There are all kinds of options and it may be difficult for students and parents to figure out where to start. There are Federal Stafford Loans, Federal PLUS Loans, and Private Student Loans.

Your first step to getting the money you need for college is to apply for Federal Stafford Loans. In general, they offer the best rates and most flexible terms. If you qualify, you should be able to get a lot of the money that you need to borrow for college. You should also fill out the Free Application for Federal Student Aid (FAFSA) to see if you qualify for other forms of aid. You may qualify for grants, work-study or other types of student aid.

If you can’t get enough from Federal Stafford Loans or from the FAFSA, then your parents might consider helping you out with a Federal PLUS Loan. The PLUS loan offers great rates and payback options to parents putting their kids through college.

Many Private Student Loans are about the same as the Federal PLUS Loans. Sometimes you can find Private Student Loans with little or no fees. This can make them even cheaper than a Federal PLUS Loan. Be meticulous when choosing your lender. Sometimes a better interest rate comes with higher fees, which in the long run will cost you more. On the other hand, you might find a loan that will cost you less than a PLUS Loan.

Many people are turning to Private Student Loans for extra support through school. Students are running into school costing more than they could possibly get through a Federal program. Talk to your school advisor about financial aid options. There may be scholarships available that you can apply for. They can help give you direction when it comes to choosing what is best for you.

Be wary if they try to steer you toward one or two particular lenders. Check out a web site that offers Private Student Loans from multiple lenders. This way, you ensure that your decision wasn’t influenced by any loyalties. The product you choose should be the one that best suits your needs. Not the needs of the advisor. This is not to say that advisors are necessarily swayed by any one company, just be smart about what company you choose. Check out all of your options before you make your decision. After all, taking out Private Student Loans is a big responsibility and your choice will be with you for years to come.

About the Author: Evelyn Saunders, a retired teacher, is the editor for student-loans.net, a provider of student loans and information on how to get private student loans as well as consolidation. For more information, please visit http://www.student-loans.net.

Are Private Student Loans Right for Me?

With higher education costs soaring, more and more students are turning to financial aid for help. Federal student aid offers grants, loans and other types of assistance. Federal aid is by far the biggest supplier of money to students for college. Federal loans include not only grants, but also campus-based loans, Stafford Loans, and PLUS loans for parents and graduate students. The problem is, a lot of students don’t qualify for Federal help and are turning to other sources for help with their college funding.

Nonfederal scholarships and funding may be provided by your state. Check with your school to see if you may qualify for one of the state programs. If you do receive Federal or State Aid, then you may still need more money. College is expensive and includes tuition, books, room and board, as well as travel expenses, bills and food. More students than ever are turning to Private Student Loans for financial assistance with all of the costs that college brings.

Private Student Loans are essentially like regular loans. You must qualify for the loans and may be required to have a cosigner. The difference is that Private Student Loans usually have more flexible repayment schedules to accommodate students. For example, you may not be required to begin repayment of the loan until after you graduate or withdraw from school. Rates can be quite good based on your credit history and income. Be aware that there are a lot of subprime loans out there, which can have very high interest rates and may not be the best option for you.

When you take out a Private Student Loan, you are taking on a serious responsibility. You must strictly adhere to the terms and conditions explained in your contract. Failure to make an on-time payment will be reflected in your credit history for years. Late payments or failed payments on loans are big influences on your credit score. On the other hand, being responsible with your payments and always making them on-time can help you establish a good credit history. Paying on your Private Student Loan can help you show future lenders that you are financially responsible and mature.

If you are shopping for Private Student Loans, you may want to avoid companies or advisors that push one product or one certain lender. Especially beware if the product being pushed is at a high interest rate. Shop around to be sure that what you get is actually the best thing for you. This commitment will last for years, so take your time shopping around. Check out sites that feature many lenders and offer multiple products so that you know they are not biased or influenced by any one company. Do your research and Private Student Loans could help you bridge the financial gap on your journey through college.


About the Author: Evelyn Saunders, a retired teacher, is the editor for student-loans.net, a provider of student loans and information on how to get private student loans as well as consolidation. For more information, please visit http://www.student-loans.net.

Consolidating Stafford Student Loans

After the student loan scandal of 2007, many alumni may be looking forward to consolidating their student loans this July. July is when the variable rates change on federal student loans. Alumni may be hoping to lock in low rates, combine multiple loans and lower their monthly payment. But before you jump on the consolidation bandwagon, there are a few things to consider.

The student loan scandal made many people afraid of the student loan lenders. But, now that guidelines are in place, it is a much safer time to consider student loan consolidation. Now when you start researching which lenders to consolidate with, you are more likely to get unbiased information. Keep in mind that you still need to make the final decisions on your own. Educate yourself before you pursue consolidation.

When you consolidate your student loans, you should consider what you want to accomplish. You may want to lower your monthly payments, lower your interest rate, lower the amount of time that it will take to pay off your student loan debt, or simplify your monthly bill paying schedule.

If your goal is to lower your monthly payments, you should consider repayment terms in your decision. Consolidating your loans generally does lower your payments, but it also tempts people into extend their loan terms. This can cause you to pay more interest in the long-run, so calculate how much more you’ll actually pay before you decide that this is the best option. Sometimes lowering your monthly payment by a little bit isn’t worth the extra time and money that it would take to pay it off. It just depends on what is right for you. See what many different lenders have to offer so that you can make an informed decision.

There are other reasons besides lowering your payment to consolidate student loans. Let’s say that you want to get a better interest rate. Keep in mind that you can’t consolidate over and over, so you’ll want to be sure that consolidation is the right move for you before you do it. If you have variable Stafford loans, then you need to wait and see if the rate actually goes down much. If it doesn’t really move, then it’s not worth wasting your consolidation option on. If you have a fixed rate Stafford loan, then you are at a fixed rate of 6.8 percent anyway and consolidating won’t lower it.

Sometimes consolidating is worth it just to get your bills together in one easy payment. This can help you pay your bills on time more consistently. Just be sure that you’re making the right move before you decide to consolidate your Stafford student loans.

About the Author: Evelyn Saunders, a retired teacher, is the editor for student-loans.net, a provider of student loans and information on how to get private student loans as well as consolidation. For more information, please visit http://www.student-loans.net.

The Student Loan Scandal in a Nutshell

Many student alumni associations have been held up to the flame. Accusations and findings of guilt affecting student alumni associations have been all over the news in the last year. Some student loan lenders have been caught paying off university student alumni associations’ key players in order to get information about graduates. They have used the information and data about students and student alumni to market certain financial products directly to them. Student alumni associations have been steering students and alumni towards these lenders for years. In a scheme like this, both student loan lenders and student alumni associations stand to benefit. The problem is, students and alumni are the ones that get caught up in the trouble that it causes. They end up with student loans and financial products that ultimately punish them with high interest rates and terms that are over the top.

The confusion comes in when you consider that many student alumni associations are separate entities from the university, although many of the people working at the student alumni associations are university employees. Universities are required by law to be transparent in their dealings with students. This basically means that they can’t push you, as a student, in a direction that may not be best for you. The story deepens when you consider that most of the people affected by the misdealings of the student alumni associations are alumni. They are no longer students, so they get caught in a loop-hole that the student alumni association could get away with.

Since then, student alumni associations have been pressed to make sure that any contracts that they hold with lenders are ethical. The New York legislature passed a bill that keeps universities from conducting student loan business that results in payments or perks from a lender. The following investigations led down a long trail of conflicts of interest. The New York legislature bill was just the start of the repercussions that were about to rain down on student alumni associations and student loan lenders.

President Bush signed the bill that overhauled student aid policies. The bill was meant to restore a balance in the student loan system by benefiting students, not lenders and banks. Although many lenders and financial institutions saw parts of the bill as unfair, the decision stood and we were on our way to a better student loan system.

When you are getting ready to apply for financial aid and student loans, make sure that you do your own research. There are companies out there that offer products from many lenders, expanding your resources for student loans. You can also take comfort in the fact that there are now laws in place limiting the amount of corruption in the student loan system. Universities found to be involved in any sort of kickback scheme will be punished by having less access to federal loan programs, along with other ramifications. Many of the investigations and enforcements of policies have not happened yet, but soon they will. Universities and lenders will be held will be held accountable for dealings that resulted in students and alumni not having their choice of lender as a result of the kickback scheme.

About the Author: Evelyn Saunders, a retired teacher, is the editor for student-loans.net, a provider of student loans and information on how to get private student loans as well as consolidation. For more information, please visit http://www.student-loans.net.

Consolidating Student Debt

Many students go through college not realizing how much money they’re spending. You can easily rack up a hefty amount of debt, just by charging a little here and there. Lots of students don’t take their credit card balances very seriously. They look at the minimum amount due and blow it off as just a small bill to pay. Even worse, they may not even consider this minimum amount as pressing, paying their regular utilities and other bills first. This can lead to credit card neglect. Student loans have a set amount due each month. This makes paying off the debt easier to attain.

Your credit card payment and student loan payment has to be made on time, every time. Late payments can stay on your credit report for years. Late fees are tremendous and your interest rate can go through the roof after one late payment on a credit card. Suddenly that great deal that you signed up for is gone and you’re stuck paying the maximum amount of interest and late fees on an ever-growing balance.

Keep up with your bills. Show some restraint when you need to use your credit card. Don’t use it for anything that you just want. Only use it for real emergencies and make every effort to come up with cash before you decide that you have to use your credit card. If you take out a student loan, only take out the amount that you need.

Call and set up an automatic payment plan with your creditors. Determine when you want your balance to be paid off and pay a set amount every month to achieve that goal. Student loans generally have this plan in place already.

Come up with an exact strategy to get your debt paid off. Debt consolidation could be an option if you have more than one credit card or loan out there. Basically, you combine all of your balances on to one bill. Get rid of extra credit cards so that you’re not tempted by them sitting in your wallet with a high limit of available credit.

When consolidating your debt, look for special student rates. Find a plan that has a low interest rate and the lowest fees. Once you’re debt is in one lump sum, then your payments overall can be lowered. You’ll have one amount due as well as one due date to keep up with.

Students find it very hard to have self restraint when it comes to shopping, eating out at restaurants and partying with their friends. Try to train yourself to save just a little each paycheck for times like these. Don’t turn to a life of debt and struggle just to go grab a sandwich with your friends or buy yet another pair of jeans. Become a bargain hunter and only take cash with you. You’ll reap the benefits and teach yourself some responsibility. Be proud of the money that you save and pay as much as possible to your credit card or student loan bill as often as possible. Every little bit counts when you’re getting yourself out of debt.

About the Author: Evelyn Saunders, a retired teacher, is the editor for student-loans.net, a provider of student loans and information on how to get private student loans as well as consolidation. For more information, please visit http://www.student-loans.net.

Types of Student Loans

If you’re in the market for student loans, you might be overwhelmed and wondering where you should start. The first step is to educate yourself about what types of loans are out there. Student loans are generally needed when financial aid runs out, or if you don’t qualify for financial aid. Compare each type and consider which loan will be best for you and your situation. There are two major categories: private student loans and federal loans.

Federal loans are provided by the government and there are a few different types that you may qualify for. You can get a federal loan directly from the government or from a bank or credit union. When you’re inquiring about these loans, refer to them as Federal Stafford Loans. It may be helpful to go directly to your bank and get some guidance as to which type is best for you. But, you can research this yourself and most likely be able to determine which one best suits your needs. Remember, these federal loans are income based, so check your eligibility before you proceed.

Subsidized Federal Stafford Loans are subsidized by the government. This simply means that the government agrees to pay the interest while you are enrolled in school. They will also pay interest for you if you later in life need to defer your payments. This makes lending you money safer for the banks and credit unions. They know that they are going to make their money. Therefore, because of the bank security, you can reap the benefits of lower interest rates, longer pay-off periods and government subsidy.

Unsubsidized Federal Stafford Loans are not subsidized by the government. Any money borrowed and the interest on that money is totally your responsibility. Interest rates can be very good and terms are geared to accommodate students. For example, payments may be able to be deferred in certain situations. Unsubsidized Federal Stafford Loans are meant for students that don’t qualify for a Subsidized Federal Stafford Loan, or for students who need more money than they can get from financial aid. This loan is not as narrow on incomes that qualify and almost everyone can qualify.

Talk to the financial aid department at your school. Your parents could qualify for a Federal Plus Loan to help pay for your college. If your income is very low, then you may qualify for a Federal Perkins Loan. If you don’t qualify for any type of federal loan, then you may consider private student loans.

Private student loans generally have an easier application process and offer special interest rates and terms to students as well. Private student loans are available to students and their parents. Private student loans can be obtained very quickly, usually within a few days. These loans are credit based and don’t rely so heavily on income guidelines. If you don’t qualify for student grants, financial aid, or if you just aren’t receiving as much as you need, then consider private student loans to help you pay for school.

About the Author: Evelyn Saunders, a retired teacher, is the editor for student-loans.net, a provider of student loans and information on how to get private student loans as well as consolidation. For more information, please visit http://www.student-loans.net.