Stafford Loan Basics

Most people struggle to pay for college. If you are looking for financial assistance, you may be considering a Stafford Loan. Before you start applying for loans, make sure that you have exhausted all grant and scholarship opportunities. If you can obtain grant money or scholarship money, then you will not have to pay back the money that you receive. The fact of the matter is, that most of the time students are not able to secure enough funding through these avenues to pay for the school that they need. This has the majority of parents and students turning to student loans for help.
Getting student loans can be confusing if you do not know where to start. Many people start with the Stafford Loan for many reasons. First of all, the Stafford Loan has a fairly low interest rate and can usually beat out other types of loans in this area. The Stafford Loan also lets you put off, or defer, your repayment until after graduation. There are a few flexible repayment plans that you can choose from, making repayment fit your personal situation as closely as possible. This can help you to avoid lapses in payment and ultimately lose your good deal or tarnish your credit history.
Either the student or the parents can fill out the FAFSA (Free Application for Federal Student Aid) available online or through your school. This application will take many things into consideration when determining how much financial aid you are eligible for. It will consider the number of children attending college, income, number of people the family is supporting, savings including retirement accounts. The FAFSA will estimate how much your family can pay out of pocket for college expenses and a Stafford Loan may be awarded for the remainder.
This process is designed to keep people from taking out more in student loans than they need to. The formula used on the FAFSA is very accurate and most people are happy with the outcome. You will send in the FAFSA application and then wait for the Student Aid Report (SAR) to come in the mail. The SAR will let you know what you qualified for. If you approve the information, then another form will be sent to the school of your choice. An additional form will be sent to the state to see if you qualify for any additional monies from the state. After you fill out and approve the acceptance form, you will be sent details on how to get the money that you need.
If further assistance is needed, then you and your parents may look into other types of student loans or private student loans to fill in the gaps.

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.

Plus Loans and the FFEL Program

If you have a dependant child enrolled in college, then you may qualify for a PLUS Loan. PLUS Loans are also known as parent loans in the world of student loans and financial aid. PLUS Loans are available through the Federal Family Education Loan (FFEL) Program. They are also available through the William D. Ford Federal Direct Loan Program. As a parent of a student, your credit history will come into play when applying for a PLUS Loan.

If your child is already receiving financial aid or other student loans, then you may or may not qualify for an additional PLUS Loan during the same enrollment period. Your child has to be enrolled at least half time in an eligible school for you to receive PLUS Loan money. Applications for PLUS Loans are available through lenders or directly from the school. You may consider going through a company that matches you with the lender that’s best for you, or at least gives you many different lenders to choose from. If a school offers you one lender for a PLUS Loan, then make sure that you check around and consider all of your options. The one that they offer you may not be the best deal around.

If your credit as a parent is not that great, then you still may qualify for a PLUS Loan if you can exhibit certain extenuating circumstances. Check with the lenders for specifics that could help qualify you for the loan. Parents can borrow as much money as the student needs to attend college. If the student is already receiving some financial aid, then it is considered and subtracted from the cost of attendance. You can not borrow more than the cost of attendance with a PLUS Loan.

PLUS Loan money is sent directly to the school. Money can be put towards tuition, room and board, school fees and other school related expenses. Any extra money borrowed that is not necessary for school will be sent directly to you, the parent. You can choose to have the money deposited in a school account where it will be held for future school needs. In any case, all of the remaining money must be used for school and school expenses.

The interest rate on PLUS Loans is currently 8.02 percent. This rate changes every year on the first of July. There are also fees associated with PLUS Loans. Usually when there is a loan payment dispersed, which can be one or two times per enrollment period, the parents will pay a 4 percent fee. This money goes to the lender and/or the government to keep the cost of managing PLUS Loans down to a minimum. You don’t get the luxury of a grace period with a PLUS Loan like you do with some other types of student aid. Payments start immediately after the first disbursement is made, or within sixty days of the first disbursement. As soon as the first disbursement is made, interest starts accruing and continues to accrue for the life of the loan.

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.

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.

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.

College Student Budget

College can be an exciting part of your life. You’re having all kinds of new experiences and you’re also taking on new responsibilities. Your new found independence isn’t all fun and games. You have to learn how to live your life on your own and college is the perfect time to learn a lot of life lessons. One of these lessons is learning how to manage your money. Learning how to create and stick to a budget is nothing short of challenging for most people and you might appreciate a little guidance.

The first step is to plan out and write down your budget. Using a money management program or spreadsheet on your computer can be a helpful tool as well. First, figure out how much income you have coming in. Count allowance from your parents, student loan or financial aid money, as well as your regular income from your job. Deduct your major expenses first, such as tuition, books, room and board, power and water bills, phone bills and any other regular expense that you have leaving each month. Some people stop here and end up running out of money anyway. This is because they didn’t take it that one step further and figure out where else their money goes.

There is a lot more that you need money for than just bills. First is food and gas. Figure out what you’ll need each month to eat and get to and from work and school. Figure out the things that you periodically need and set aside money in a savings account for these purposes. Oil changes, trips home, Christmas expenses, unusually high summer or winter power bills, whatever has come up before that you weren’t prepared for. Estimate what these things cost you yearly and divide it by twelve months. This should give you and amount to save monthly so that these irregular expenses don’t surprise you and get you off track. When you don’t prepare for the inevitable, then you’ll inevitably end up in debt or in some other serious financial trouble.

Preparing for every little emergency and eventuality may sound good in theory, by it is actually hard for a lot of people to stick to their budgets consistently. It takes practice and college students are just starting out. You may find it difficult at first, but consider your budget one of your classes. You’re learning as you go and you’re not expected to do it perfect on your first try. You will find yourself adding expenses and taking others away, your income and bills will change and you’ll need to constantly adjust your budget.

Take notes each month, whether it’s in a notebook or on the computer, so that when you plan the next month’s or year’s budget you’ll be able to review what problems you ran into before. You may decide to save more for December because last year you ended up buying more last minute gifts than you expected, ended up going to more parties than you planned and spent way more than you originally budgeted for yourself. If you have big emergencies or just don’t make enough money to get through your college years, then you might consider taking out student loans or private student loans, which have special rates and qualifications for students.

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.

Qualifying for a Student Loan

It’s the holiday season. You’ve trimmed the tree, completed your finals and almost finished your Christmas shopping. Now you realize that your Christmas budget has been ultimately depleted. You still have some shopping to do, some bills to pay and three Christmas parties to prepare for. What will you do? How will you afford it? If your next paycheck isn’t coming before Christmas, you’ve probably gotten yourself into a financial bind.

This is very common at this time of year. Everyone has something to spend money on to make their holiday season a joyful one. The problem is, a lot of people are living paycheck to paycheck already, and college can be especially taxing on the wallet. Whatever the reason, you’re low on funds and you’re starting to consider other options. Someone recommends taking out a student loan to get you through the next semester and this sounds like a great solution. But now you’re worried about your credit score or lack there of. You may not have taken out a loan before and you’re not sure that you’ll qualify.

There are some options for students in your position. One option is to get a conventional loan through your bank. They can look at your spending habits, reliability, deposit history and income. Banks are going to check your credit score and weigh it against your credibility as a customer. If everything checks out to be good, then you’ll most likely be approved for a loan at a pretty good interest rate. If your credit is less than stellar or you haven’t established any credit yet, then you might need to look for other financial solutions.

Student loans take the special circumstances of students into consideration. They offer more flexible payoff plans. Some may be offered through your school. For some student loans, you can apply directly online. If you prefer to speak to a person, most sites have the option of applying over the phone. You may be asked to fax in information or mail in signed documents before you can receive the loan money. Getting a student loan and paying it off diligently and on time can help you establish or improve your credit score.

Qualifying for student loans is usually easier than qualifying for conventional loans. You can use the money for school tuition, room and board, or anything relating to your school activities. Some loans have their own restrictions, so make sure that you ask questions and understand the agreement before accepting the loan money. Make sure that you don’t borrow more than you need or more than you can afford to pay off in a timely manner, and your next school year can be a happy one after all.

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.

How Credit Scores Affect Students

Being a student can be a taxing financial struggle at times, and you may run into a situation where you’ll need to get student loans. Student loans can be great tools for getting you through tough times, but it is very important to take these loans seriously and pay them off on time.
Students can sometimes be careless about paying off loans because they aren’t necessarily educated about the ramifications of making a late payment or only minimum payments. You may believe that the late payment penalty fee is the only bad part of making a payment late, but you couldn’t be more wrong. Late payments do generally carry a hefty fee, but they also flag you as a person who doesn’t manage their finances very well or very responsibly. You interest rate can immediately go up to an astounding rate and you’ll have more and more trouble making that payment. This can lead to years of debt that is almost impossible to pay off. Worse yet, you will be paying more and more interest, maybe for years, and that one time little loan becomes a total that you never would have agreed to borrow in the first place.
Only paying the minimum amount due can stretch out a loan for years, but making a late payment will hurt your credit. Most students are young and have been protected under their parents’ umbrella before now. Now, you’re starting to get student loans and credit cards on your own and you need to know the facts before you make any mistakes that can haunt you for years. Making even one late payment can put a blemish on your credit rating for years to come. Your credit score may not seem too important to you now, but it will, and very soon. When you get ready to finance a car, that one late payment you made back in college can make your interest rate go up enough to cost you every month for the length of the loan. You will most likely be required to put more money down to purchase the car.
When you buy a house, it will be the same story. You may not qualify for the best rates, regardless of your income. Even a fraction of a percent can cost you hundreds or thousands of dollars every year for up to thirty years. It could be even longer if the higher payments strap you enough that you end up refinancing and extending the loan.
Be organized and practice sticking to a budget. Make any student loan payments that you have on time, preferably before the due date, and pay more than the minimum every time. Pay off debt as quickly as possible and make sacrifices to do so. Keep your credit score as high as possible by having a checking and a savings account, take out as few student loans as possible and never ever make a late payment. Stay on track and you’ll have a happy secure financial future ahead of you.

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.