College Student Loan News and Info

Student Loan Debt

Paying off student loan debt isn’t exactly the easiest financial responsibility a person will ever take on. The average student loan debt for a graduate of a four-year public school is $20,000. That is a hefty price tag, but when you consider that college grads earn 62 percent more than high school graduates (which translates into $1 million over a lifetime), the debt appears justifiable.

The key to paying off student loan debt is to hit it as hard as you can as soon as you can. The fastest and most effective way to pay off your student loan debt is through a standard repayment plan. Spanning 10 years, the borrower pays off the debt the same way other standard loan payments are. What is attractive about the standard program is the amount of interest you don’t end up paying by paying the loan off in 10 years. To compare: standard repayment on a $20,000 loan (at 6.8 percent interest) yields $7,619.31 in interest charges versus a graduated repayment plan at 8.25 percent interest over 20 years that yields $18,632.15. Do you see the difference? You pay more than double the amount in interest when you extend the life of your student loan an additional 10 years.

Most people already grasp the benefits of paying off student loan debt as quickly as possible. The bigger problem is finding the money to make those heftier monthly payments that come with the standard repayment plan. With careful budgeting and some dedication, you can meet your financial goals.

When building a personal budget, there are several things to consider. First and foremost, people tend to underestimate, so when building the budget keep your eye out for unrealistic figures. Secondly, your budget should reflect percentages of your income. For instance most budgets pay out 35 percent of the income to housing. Items such as car insurance, utilities, clothing, and entertainment are only 5 percent (each) of the budget. By building a budget, and sticking to it, you can view on paper what it is going to take (like spending less money on clothes, or no moving into that fabulous apartment) to get your student loans paid off.

Depending on your credit, it is possible to get a private loan with a very low interest rate.  But for most, a federal student loan is the best bet.  The benefits of a low interest student loan are obvious.  A low interest rate just means lower payments, a shortened repayment period and more money in your pocket.

An additional benefit of low interest student loans are the subsidized aspect of many federal student loans.  If you obtain a Stafford loan or a Perkins loan, you may have your interest paid by the government while you are in school and possibly up to nine months after you graduate.

One form of a low interest student loan is a Stafford student loan.  This kind of loan allows students with little to no credit to afford college.  Because this is a federal student loan, the requirements are different from a standard lenders loan.  Rather than basing your worthiness on a credit score, it is based on whether or not you fall within the eligible income bracket.  If you attend school at least half-time and if you have never defaulted on a loan, you should qualify.

A Stafford loan also has a limit as to how high the interest rate can be.  Currently it is at 8.2%.  Most do receive a lower rate than this though.  Another added benefit is that you can get a Stafford loan subsidized, meaning that the government will foot the bill for the interest that accrues while you are in school.  This kind of loan is also available unsubsidized, but the low interest rate still applies.

Another kind of low interest student loan is a Federal Perkins Loan.  This loan can provide many options for a borrower, but in order to qualify you need to show exceptional need.  In fact, most that do qualify also qualify for the Federal Pell Grant (another form of financial aid).  If you do qualify for this type of low interest loan, you will be happy to hear it is subsidized as well.  A Perkins Loan also has the largest grace period of all the loans, meaning your first payment is not due until nine months after graduation.  The interest rate is also the lowest you will find at 5%.

So, do you see a theme to low interest student loans?  They are all federal loans.  Nothing else can come close to there outstanding rates.

School Loans

Parents looking for school loans to help pay for their child’s education basically have two options – the Federal PLUS Loan and private school loans. Both loan programs require the borrower to have a solid credit history and require repayment directly after the first disbursement (sometimes repayment can be postponed for 60 days after disbursement).

The Federal PLUS Loan program requires the student to be enrolled at least half time and an accredited postsecondary institution. Parents have two options when applying for a PLUS Loan - Federal Family Education Loan or the William D. Ford Federal Direct Loan (you can’t qualify for both). Once approved, parents can borrow a predetermined amount of money annually. The limit on a PLUS Loan is equivalent to the student’s cost of attendance (COA) minus any grants, scholarships or other school loans the student has been awarded. Interest rates for PLUS Loans range in the 8.02 percent sector. Based on the loan program, interest is charged from the date of the first disbursement until the loan is paid in full. FFEL loans also require additional fees at the time of disbursement. Parents are responsible for a fee of up to 4 percent of the loan. The fee benefits the United States Department of Education with a share of it going to the guaranty agency that helps to reduce the cost of parent loans.

On the other end of the school loans spectrum is the private loan. Private loans can be taken out by the parent much in the same way as a PLUS Loan. Parents are again required to pass a credit check. Private loans can require a little more legwork on the borrower’s part. Before selecting a lender, experts recommend shopping around for the best interest rates, fee schedules, and repayment plans available.

Private Student Loans Information
from Student Loans.Net

If you are looking for a way to pay for college, you have probably come across one or more advertisements for private student loans. Traditionally, students are encouraged to seek aid through the United States Department of Education and their state higher education office. However, private student loans can serve as a good backup plan in the pursuit for student financial aid. Here are some quick facts about private student loans to consider:

Private student loans are based on your credit history – not financial need.
You can secure a lower interest rate on your loan with the help of a co-signer.
Unlike federal loans, private loans aren’t ruled by tight application deadlines and lengthy application processes.
Private student loans feature the same basic requirements as the federal program – must be degree seeking, more than half time, and a U.S. citizen.
Borrowers can take out a considerable amount of money through a private loan.
Some private lenders feature online applications and account access.
In certain situations, you can get a loan approval in less than 30 seconds.

Unlike federal loans, private student loans should be well researched and shopped before you select a lender. When considering a loan, inquire about the interest rate, related fees, and the different repayment plans the lender offers. The lower the interest rate the better. Lenders that offer various repayment plans are also a good pick. Because private student loans are granted based on your credit score, you may qualify for a lower interest rate based on your credit score. If you credit score is not high enough to secure a desirable interest rate, you can consider asking a parent or relative with better credit to co-sign for a lower rate.

To learn more about private student loans online, start with learning the basics and comparing private loan lenders on the homepage of Student Loans.Net - take your time and review multiple offers to find the right company for you.

Government student loans

A government student loan is granted based on a student’s eligibility as determined by the financial aid administrator at the school the student plans to attend. In order for a student to receive federal student aid, they must fall into the requirements set forth by the Higher Education Reconciliation Act (HEA). These requirements are as follows:

Demonstrate financial need (for certain government grant and student loan programs)
Be a U.S. citizen or eligible non-citizen
Have a valid Social Security Number (not applicable for students from the Federated States of Micronesia, the Republic of Palau, or the Republic of the Marshall Islands)
Have a General Education Development certificate (GED) or a high school diploma
Be registered with the Selective Service (if applicable)
Be a degree-seeking student and maintain satisfactory academic progress while in school
Verify you are not in default on a government student loan and do not owe the government money on a federal grant
Verify you will only use your federal student aid for educational purposes

The HEA prohibits students from receiving student aid if they have been convicted under federal or state law for the possession or sale of illicit drugs. Not all convictions count against the student, only ones that occur during the student’s enrollment while receiving federal student aid.

Even if a student is not eligible for a government student loan as outlined in this article, they should still fill out and submit a Free Application for Federal Student Aid (FAFSA). While the FAFSA’s primary purpose is to facilitate federal student aid awards, many state grants and funding from private institutions are awarded based on the information from the FAFSA. Students ineligible for federal aid might also consider applying for a private student loan.

To learn more about government student loans, visit ED.gov

Massachusetts Student Loans

The Massachusetts Board of Higher Education offers students three student financial aid programs they can apply for when entering a community college or university situated in the state. The programs include the MASSGrant, Need Based Tuition Waiver, and Cash Grant.

MASSGrant
Funded by appropriations from the Massachusetts Legislature, the MASSGrant is awarded based on a student’s financial need. The program was designed to benefit undergraduate students who are enrolled in any Massachusetts college or university. The student must also be enrolled in a degree-seeking program.

Massachusetts Tuition Waiver Program
The Massachusetts Tuition Waiver Program was created in 1981 to help offset increases in college tuition. The objective of the program is to provide assistance to state students seeking a degree at a public colleges and universities.

Cash Grant
The Cash Grant Program is a complimentary program to the Tuition Waiver Program. The program was founded to assist financially needy students with paying for mandatory fees and non-state supported tuition.

Students who want to apply for any of the assistance programs should contact the Massachusetts Board of Higher Education for more information. Experts also recommend that students file a Free Application for Federal Student Aid (FAFSA) with the U.S. Department of Education. Through government-backed programs, students can qualify for a Federal Pell Grant or Direct Loan. Sometimes, depending on the person’s need, both a Pell Grant and Direct Loan will be awarded. To learn more about federal aid visit the U.S. Department of Education’s Web site or your high school counselor.

Massachusetts students can also apply for a private student loan to help cover their academic expenses. Private student loans are available on top of any state or federal awards. They can help make ends meet when it comes to expenses and funding. To learn more about Massachusetts private student loans visit www.student-loans.net

Federal Student/Parent loans (Government Student Loans) come in many different forms.  There are loans for the student as well as loans for the parent to pay for the education the student is seeking.

Let us start with a federal PLUS loan (government student loans).  This loan is an easy and affordable way for parents to borrow up to the total cost of their undergraduate child’s college attendance.  PLUS loans are not need-based, so eligible parents can qualify for PLUS assistance regardless of how much or how little money they make.

Federal Stafford Loans are available to both undergraduate and graduate students and are one of the most affordable ways to pay for school. Stafford loans (government student loans) come with fixed interest rates that are lower than most other forms of consumer financing.  There are no application fees or credit checks, and repayment is postponed until you have left school or dropped below half-time enrollment

The Federal Stafford Loan is really the most practical and easiest government student loan available for an undergraduate or a graduate student to obtain a loan for schooling.  The two biggest benefits are Stafford student loan rates are lower than other forms of consumer financing, and repayment is postponed until you are out of school.  Not having to pay until you are out of school is very appealing to most.

• Interest rates currently low— just 6.8%
• No collateral or credit check is required
• You owe no payments while you are in school
• 2% Upfront Cash Rebate
• 3% Cash Rebate: on the remaining principal balance after the first 30 months of consecutive on-time payments. Borrower must participate in auto-debit
• .375% Interest Rate Reduction: for electing to use auto-debit for repayment
• Federal student loans are eligible for federal loan consolidation
• Tax deductions and flexible repayment options available
• No co-signers required

One of the easiest government student loans you will ever obtain.

Personal Loans
by Student Loans.Net

A personal loan is a small loan that can be used for basically anything the borrower wants. Unlike secured loans, a personal loan is based on the borrower’s ability to repay the debt combined with his or her credit history. In some cases, the borrower may have to provide a co-signer or guarantor to receive the funds.

From students in need of college textbooks to someone looking to consolidate credit card debt, a personal loan can serve numerous purposes. Because loans are available through a wide variety of financial institutions and banks, it is important to shop around when considering a personal student loan. The borrower will want to take into consideration the lender’s rates and fees. In some cases, a borrower may be subject to a fee if the loan is paid off earlier then scheduled. There may also be an establishment fee. Establishment fees range between $50 and $200 and are sometimes used to secure a lower interest rate. In an ideal situation, the borrower can find a loan in the amount they need at the lowest possible interest rate and no unnecessary fees. The stronger a person’s credit, the more picky they can be when searching for an ideal loan.

Personal loans are paid over the course of one to seven years. They come in amounts ranging between $3,000 and $30,000. Interest rates on personal student loans are generally less than rates for credit cards, which makes them an ideal option for credit card consolidation.

As previously mentioned, personal loans can be taken out to purchase college textbooks. This same theory applies to other college related expenses. With that said, there are loans available to college students to assist with school related expenses including tuition, fees, housing, and even child care. To learn more about personal student loans that are tailored to the needs of college students visit Student Loans.Net

When it comes to financial aid, there are many different directions to tern.  I am going to try to point you in the right directions to get all the information available. “Where do I begin?”  Let us start with the basics.

Learn the Basics

The first step was looking on this blog for financial aid information. I cannot stress enough that you need to research financial aid in all its forms. Research the internet and familiarize yourself with certain terms such as FAFSA, Guarantor and many other words and acronyms that you probably will not come across in everyday-life. It is definitely worth your time and effort to learn about the financial aid process now, before you start filling out forms. It may even help you save money.

File the FAFSA

You must first complete the appropriate FAFSA application. You will not qualify for federal aid, such as Stafford student loans until you submit the FAFSA form. For free application and advice and submission, visit FAFSAOnline.com or the Department of Education web site.

FAFSA applications are required for all federal student aid and are strongly recommended for all students. Financial Aid will not be granted without the FAFSA application being completed and submitted.

Research Scholarships

Research is so very important at this stage of the game.  There are scholarships that can be found at both the local and national level.  Without the research, you will never know about them.  For a lot of us financial aid is essential to continue with our education. So, once again I do encourage you to research and then research some more.

Scholarships for Post-Secondary Education

For many, the rising costs of post-secondary education are of grave concern. Many people can’t afford to pay for the tuition fees, books or any of the other costs that come with higher learning.

Thankfully, for some, a scholarship can ease the financial strain, and allow you to get the education you want.

However, getting the scholarship is not always easy. As I’m sure you can imagine, scholarships are in very high demand, and getting one can be extremely difficult.

Scholarships come in two basic varieties. The first one is a full scholarship. There are many different ways you can get a full scholarship, but they are limited in number, and everybody who wants to go to school, would like to get a full scholarship. After all, who wouldn’t want their schooling costs paid for?

Most full scholarships are granted to people who show great talent in one or more fields.

For instance, you might be rewarded with a scholarship if you are an extremely gifted football player, or maybe you excel at mathematics or another area of the curriculum. In these rare instances, a college or university may grant you a scholarship.

The limited scholarship is the second basic scholarship you can get. In many cases, you can apply for a limited scholarship. They are easier to get than the full scholarship, but they do ease the financial burden, and it may be the answer to your problems.

If you are not a U.S student, but wish to attend a college or a university in the U.S, there are a few schools that offer partial scholarships. These scholarships are limited in number, but they do exist.

You can also find partial or full scholarships if you belong to a minority group.

For instance, if you are a Native American, there are scholarships available just for you. If you belong to a different minority group, chances are that somewhere there is a scholarship opportunity for you as well.

As you can see, there are a variety of ways to get a scholarship, and the biggest obstacle in your path is the sheer number of people who compete for them.

But with a little research, some hard work, and a boat load of determination, you can increase your chances of getting a scholarship.

The trick is, to find the right scholarships for you and apply for it sincerely.