Repaying Your Student Loans

You took out the student loan, are going to college and then life changes. So what do you need to know about repaying your student loans? Here is a little information everyone should understand when it comes to federal student loans.

To start, repayment for student loans only occurs after you graduate, leave school, or drop below half-time enrollment. You will then have a short grace period that will be:

* six months for a Federal (FFEL) or Direct Stafford Loan.
* nine months for Federal Perkins Loans

If you have a FFEL or Direct PLUS Loan, you don't have a grace period and repayment generally must begin within 60 days after the loan is fully disbursed.

The upside of FFEL or Direct Loans is that you have a choice of repayment plans. Federal Perkins Loans don't offer this, you generally have up to 10 years to repay, however, your monthly payment will depend on the size of your debt and the length of your repayment period.

If you don't repay your student loans on time or according to the terms of your promissory note, you might go into default, which will affect your credit rating. There is assistance for borrowers having difficulty repaying their education loans, including deferment and forbearance. In certain circumstances, your loan can be discharged/canceled.

One example is if you're a teacher serving in a low-income or subject matter shortage area, it may be possible for you to cancel or defer your student loans.

Just because you go to college and get a degree, doesn’t always mean you’ll have an overabundance of money right away. If you find yourself in financial trouble and have difficulty making your education loan payments, contact the organization that services your loan immediately. Find out if you qualify for a deferment, forbearance, or other form of payment relief. It's important to take action before you are charged late fees. For Federal Perkins Loans, contact your loan servicer or the school that made you the loan. For FFEL Loans, contact the lender or agency that holds your loan.

What is deferment? You can receive a deferment for certain defined periods. A deferment is a temporary suspension of loan payments for specific situations such as reenrollment in school, unemployment, or economic hardship. You don’t have to pay interest on the loan during deferment if you have a subsidized FFEL or Direct Stafford Loan or a Federal Perkins Loan. If you have an unsubsidized FFEL or Direct Stafford Loan, you’re responsible for the interest during deferment. If you don’t pay the interest as it accrues (accumulates), it will be capitalized (added to the loan principal), and the amount you have to pay in the future will be higher.

You have to apply for a deferment to your loan servicer (the organization that handles your loan), and you must continue to make payments until you’ve been notified your deferment has been granted. Otherwise, you could become delinquent or go into default.

For those who are called to active duty during a war or other military operation or national emergency, the new College Cost Reduction and Access Act (CCRAA), enacted on September 27, 2007, modifies the military service deferment for borrowers in the FFEL, Direct Loan and Federal Perkins Loan programs.

This deferment was originally added to the HEA by the Higher Education Reconciliation Act of 2005 (HERA). Under the HERA, the military service deferment had a maximum time limit of three years and was available for loans first disbursed on or after July 1, 2007.

Effective October 1, 2007, the CCRAA eliminated the three-year limit for this deferment and removed the provision that limited the availability of the deferment to loans first disbursed on or after July 1, 2001. Eligible borrowers may now receive the deferment on all outstanding FFEL, Direct Loan and Federal Perkins Loan programs in repayment on October 1, 2007, for all periods of active duty service that include that date or begin on or after that date. A borrower whose deferment eligibility had expired due to the prior three-year limitation and who was still serving on eligible active duty on or after October 1, 2007, may receive the deferment retroactively from the date the prior deferment expired until the end of the borrower’s active duty service.

There are options. If you are concerned about applying for a federal loan due to the need to pay it back, remember there is help out there and people to talk to. Using a student loan for college has more benefits than downfalls, so be sure to do your homework first and then make your decisions.

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

Student Loans for Those Seeking Health Professions

If you are a full-time student looking to study to be a doctor of science in pharmacy; or a doctor of dentistry, podiatric medicine, optometry, or veterinary medicine, you may be eligible for the need-based Health Professions Student Loan (HPSL), designed to provide financial assistance in the form of long-term loans.

HPSL is a federal loan program administered by the University as the lender.

The aggregate maximum you may borrow in HPSL loans is limited only by the cost of tuition and fees, and by the funds available and the 5 percent annual interest is subsidized by the federal government during the time you are in school and the one-year grace period. You begin repayment at the end of the grace period. Your payments are calculated for full repayment within 10 years (120 months).

For consideration for the HSPL loan, you must report parental data on the FAFSA, even if you have independent student status.

Each and every time you accept an HPSL loan, you will be mailed a paper promissory note and loan disclosure form that you are required to complete and return to SFC before loan funds can be disbursed to you. You will be required to attend an exit interview if you:

* are about to graduate.
* leave the University (even if it is just temporary).
* drop your registration below half-time enrollment.
* transfer to another school.
* leave for a National Student Exchange (NSE) experience.

Are there any restrictions? Funds are allocated to schools by statutory formula for the purpose of capitalizing a student loan fund. Funds on deposit can only be used for loans to eligible students pursuing a full-time course of study; for costs in connection with the collection of any obligation to the fund. The maximum amount a student may borrow is cost of attendance (including tuition, other reasonable educational expenses and reasonable living expenses). Third and fourth year medical and osteopathic medicine students may be eligible for additional funding to repay earlier educational loans.

Students of allopathic medicine and osteopathy must meet financial need criteria and agree to enter and complete a residency training program in primary health care not later then 4 years after the date on which the student graduates from such school and to practice primary health care through the date on which the loan is repaid in full.

To be eligible for Loans for Disadvantaged Students (LDS) students must meet the HPSL criteria and also be from a disadvantaged background as defined by the Secretary. To be eligible for LDS funds a school must be carrying out a program for recruiting and retaining students from disadvantaged backgrounds, including racial and ethnic minorities and carrying out a program for recruiting and retaining minority faculty.

In addition, the school must agree to ensure that adequate instruction regarding minority health issues is provided for in the curricula of the school.

Participating schools are required to renew their agreement periodically as specified by the Secretary to operate a student loan fund with the agency responsible for administering the program. Student applications for financial assistance indicating the basis of approval or disapproval of a loan are maintained on file in the school.

So if you feel medicine is the path for you, there are special student loans available for you, do your homework and you might be surprised.

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

Researching Scholarship Opportunities

You are ready to go to college or maybe your child is and you want to know what types of scholarships are available. Maybe you are asking yourself where to start? If so, here are a few tips.

Scholarships are either given by colleges or universities that you plan to attend or by the private sector. But most scholarships are private-sector, that is scholarships that are offered by businesses, professional associations, community service organizations and individuals. Both types of scholarships often requires an application and some type of essay.

Before researching scholarships, know that most have some sort of criteria that you must meet before qualifying. This criteria can be academic performance, financial need or even race, ancestry, sexual orientation and hobbies. Making a list of all of your hobbies, clubs or organizations you have belonged to, whether your parents have belonged to organizations or the armed services, and what your interests are, will help you with your search.

To search for scholarships you can use the Internet, libraries and college counseling and financial aid offices.

Using the Internet and search engines such as Google and directories such as Yahoo! Requires some research skills. Simply typing in the world scholarships and return over 60 million results. Typing in scholarships for women will narrow the results substantially. Add to the search text your major, such as women engineering scholarships to refine results further. Search by all germane academic and personal factors, including your specifics from your list, and combine these where apt; examples include: engineering scholarships, engineering scholarships women, chemical engineering scholarships women, Filipina scholarships, etc.

Most colleges and universities will have a library collection of texts on funding your education and librarians have a great deal of expertise on how to search printed material and the Web. University libraries customarily have larger collections and more resources than community colleges and you can search the catalogs over the Web.

Local public libraries may be useful in several ways. They may have a collection of financial aid and scholarship texts, and the professional librarians may be able to help your search. Public libraries may also have information on local and regional organizations, such as university alumni, association branches, community service clubs and organizations, chambers of commerce, religious institutes, and professional associations that may offer scholarships. Local organizations may offer substantial scholarships, some of which may be renewable. Use the library to get contact information and ask the organization about scholarship offerings and whom to contact for application material.

Check with counselors and professors at your college and the college(s) to which you plan to transfer for scholarship information. Professors in your major may know of scholarships in their field or of professional associations that may offer scholarships.

Check also with employers in your major field. Organizations, such as hospitals, may assist employees who will commit to working for a period of time after graduation. Some hospital work-study programs offer 40 hours pay while the employee works 20 hours and attend a college nursing program for 20 hours work week. Many employers offer tuition assistance programs to help employees gain expertise related to the company’s business or operating areas or needs. Some universities offer free or reduced tuition for their employees.

There are many scholarship opportunities out there, the difference in who finds them is how they conduct their research.

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