College Student Loan News and Info

Student Loans for college students 

By: Student-Loans.net

Will you need student loans to pay for college? This is a question most students face at some point in the college venture. The answer varies by individual.

A large majority of post-secondary students require some form of student aid to pay for college tuition or other related expenses. Where this aid comes from is a completely difference story.

In order to determine if and how much student aid you will need, you first need to know how much college is going to cost. Most colleges can provide you with an outline of expenses that include tuition, fees, estimated book costs, living expenses, etc. Keep in mind, however, that many of these expenses are dependent upon you and your spending habits.

For instance, if you plan on attending a college or university close to home, you may opt to stay under your parents’ roof to save money on living expenses.

The single largest college expense is always tuition. If you don’t want to borrow student loans, but do not have a lot of scholarships and grants coming in, you may want to look into schools that boast lower tuition rates. Community colleges and public universities tend to feature more economic fees versus four-year private schools. Additionally, students who opt to attend college “in-state” as compared to leaving the state for a different school are typically rewarded with lower tuition fees then out-of-state students.

Once you have selected a few potential colleges, visit the United States Department of Education Web site and utilize its free budget calculator. The calculator is designed to help students compute a monthly budget and income needs.

Keep in mind your financial needs will vary by school, so be sure to calculate budgets for each potential scenario to best determine your needs.

Finally, once you have roughly figured how much money you need for college, take a look at your income resources. These resources will include, but are not limited to, work-related salary, grants, tuition waivers, scholarships, savings, and any loans from family members. Subtract your expenses from your income. If the end result is a negative figure, you might want to look into student loans after all.

View a list of available private student loan lenders on this site.

Federal Student Financial Aid, an office of the U.S. Department of Education, plays a central and essential role in America’s higher education community. 

Federal Student Financial Aid’s core mission is to ensure that all eligible individuals benefit from federal financial aid assistance—grants, loans and work-study programs—for education beyond high school. The programs they administer comprise the nation’s largest source of federal student aid: during the 2005-06 school year alone, they alone provided approximately $78 billion in new student aid to nearly 10 million higher education students and their families. There staff of 1,100 is based in 10 cities in addition to there Washington headquarters.

Among there most visible and essential services are the development, distribution, and processing of the Free Application for Federal Student Aid (FAFSA), the fundamental qualifying form used for all federal and government guaranteed commercial lenders’ programs—as well as for many state, regional and private student aid programs. By filling out the online or paper FAFSA, applicants start the process of qualifying for federal student financial aid. Each year there staff processes approximately 14 million FAFSAs. 

Because they oversee $391 billion of outstanding federal student loans, it is there job to ensure that all of our partners in the federal student aid community—schools, lenders, servicers and guaranty agencies operate fairly, honestly and efficiently. Another key role they perform is to make students and their families aware that student financial aid is available and is a necessary first step to higher education. As America’s premier source of federal student aid information, they distribute numerous publications, host multiple Web sites and run several customer call centers. Most of these services are provided in Spanish as well.

The Federal Student Financial Aid team is passionately committed to making education beyond high school more attainable for all Americans, regardless of socioeconomic status. By championing access to higher education, they uphold its value as a force for greater inclusion in American society and for the continued vitality of America as a nation. 

Federal student financial aid is financial help for students enrolled in eligible programs at participating schools to cover school (a four-year or two-year public or private educational institution, a career school or trade school) expenses, including tuition and fees, room and board, books and supplies, and transportation. Most federal student aid is need based. The three most common types of aid are grants, loans, and work-study.

Grants are a type of financial student aid that does not have to be repaid. Grants are generally for undergraduate students and the grant amount is based on need, cost of attendance, and enrollment status. Federal Pell Grants for the 2006-2007 and 2007-2008 school year will range from $400 to $4,050. Federal Supplemental Educational Opportunity Grants will range from $100 to $4,000. 

Loans are borrowed money that must be repaid with interest. Both undergraduate and graduate students may borrow money. Maximum loan amounts depend on the student’s year in school. Parents may also borrow to pay education expenses for dependent undergraduate students. Graduate and professional students are now eligible to borrow under the PLUS Loan Program up to their cost of attendance minus other estimated financial assistance.

·        Federal Stafford Loans are made to students and PLUS Loans are made to parents and graduate/professional students through two loan programs:

·        William D. Ford Federal Direct Loan (Direct Loan) Program Eligible students and parents borrow directly from the federal government at participating schools. Direct Loans include Direct Stafford Loans, Direct PLUS Loans, and Direct Consolidation Loans.

·        Federal Family Education Loan (FFEL) Program: Private lenders provide federally guaranteed funds. FFELs include Federal Stafford Loans, Federal PLUS Loans, and Federal Consolidation Loans.

·        Federal Perkins Loans are offered by participating schools to provide students who demonstrate the most need with low-interest loans.

Work-study lets you earn money while enrolled in school to help pay for education expenses.

Managing Medical School Loans

The average medical school graduate is $100,000 in medical school loans once they begin their residencies and become doctors. Medical student loans are a way to pay for medical school and help students pursue their dream of becoming a doctor. With all the studying required for medical students the last thing they need to worry about is how to pay for medical school. Med school loans ease this worry and help them concentrate on their studies. They will not have to worry about medical school loans until after they graduate and are required to pay back the med school loans.

Medical students spend their days, nights and weekends studying for board exams as well as completing classroom work, so that does not leave time for them to have a part time job to pay for school themselves. This is where medical school loans come in handy. Not only can medical student loans help pay for tuition to attend school, but these private school loans can also pay for other expenses incurred while in school. Medical school loans can pay for rent for an apartment, as well as the utilities for the apartment. Med school loans can also help to pay for food and various textbooks needed for classes.

Many medical students use their medical school loans as their only source of income. Just as people who currently hold jobs receive a check every two weeks to support their household, medical students use their medical student loans in the same fashion. However, medical school loans only come twice a year. If it were not for the medical student loans, medical students would be reliant on other people to help pay for some place to live and for food to eat. Most medical students would also not be able to attend school if it were not for medical school loans.

Typically, medical students need to obtain private medical school loans in order to pay for school. Because most of exhausted their federal loans during their undergraduate studies, private medical school loans are available to supplement. Students who obtain private medical student loans because they tend to have a lower interest rate than if they were to seek a general loan from a bank or lending institution. Students can also wait to pay back their medical school loans until six months after graduation. This allows graduates to start generating an income before paying back the medical school loans.

To read more or see lenders offering private medical school loans, visit our hompage at www.student-loans.net

When it comes to financing your education either you or your parents can obtain the loan.  Parents can borrow a PLUS Loan to help pay  for your educational expenses if you are a dependent undergraduate student enrolled at least half time in an eligible program at an eligible school. PLUS Loans are available through the Federal Family Education Loan (FFEL) Program and the William D. Ford Federal Direct Loan (Direct Loan) Program. Your parents can apply for either loan, but not both, for you during the same enrollment period. They also must have an acceptable credit history. 

How do my parents get a loan?  For a Direct PLUS Loan, your parents must complete a Direct PLUS Loan application and promissory note, contained in a single form that you get from your school’s financial aid office. 

For a FFEL PLUS Loan, your parents must complete and submit a PLUS Loan application, available from your school, lender, or your state guaranty agency. After the school completes its portion of the application, it must be sent to a lender for evaluation. 

Also, your parents generally will be required to pass a credit check. If your parents do not pass the credit check, they might still be able to receive a loan if someone, such as a relative or friend who is able to pass the credit check, agrees to endorse the loan (co-signs). An endorser promises to repay the loan if your parents fail to do so. Your parents might also qualify for a loan without passing the credit check if they can demonstrate that extenuating circumstances exist. You and your parents must also meet other general eligibility requirements for federal student financial aid. 

How much can my parents borrow?  The yearly limit on a PLUS Loan is equal to your cost of attendance minus any other financial aid you receive. If your cost of attendance is $6,000, for example, and you receive $4,000 in other financial aid, your parents can borrow up to $2,000. 

Who gets the loan monies once they have been approved?  Either the U.S. Department of Education (for a Direct PLUS Loan) or your parents’ lender (for a FFEL PLUS Loan) will send the loan funds directly to your school. Your school might require your parents to endorse a disbursement check and send it back to the school. In most cases, the loan will be disbursed in at least two installments, and no installment will be greater than half the loan amount. The funds will first be applied to your tuition, fees, room and board, and other school charges. If any loan funds remain, your parents will receive the amount as a check or in cash that is unless they authorize the amount to be released to you or to be put into your school account. Any remaining loan funds must be used for your education expenses. 

What kind of interest rate would they receive?  For PLUS Loans disbursed on or after July 1, 2006, the interest rate is fixed at 7.90 percent for Direct PLUS Loans and 8.50 percent for FFEL PLUS Loans. For PLUS Loans disbursed between July 1, 1998 and June 30, 2006, the interest rate is variable and is determined on July 1 of every year. For 2007-2008, the variable rate for these PLUS Loans in both the Direct and FFEL programs is 8.02 percent. Interest is charged on a PLUS Loan from the date of the first disbursement until the loan is paid in full.

Other than interest, is there a charge to get a PLUS Loan?  Your parents will pay a fee of up to 4 percent of the loan, deducted proportionately each time a loan disbursement is made. For a FFEL PLUS Loan, a portion of this fee goes to the federal government, and a portion goes to the guaranty agency (the organization that administers the PLUS Loan Program in your state) to help reduce the cost of the loans. For a Direct PLUS Loan, the entire fee goes to the government to help reduce the cost of the loans. Also, your parents may be charged collection costs and late fees if they do not make their loan payments when scheduled.

Finding a college scholarshipBy: Student-Loans.net 
Using a good old-fashioned scholarship search is one of the best ways to pay for college.  There are lots of different ways out there to go about executing a scholarship search, each with varying degrees of success, and each one tuned to a different type of scholarship search.   Rather than relying on one form of scholarship search, it is important to use a variety of different methods of scholarship search in order to provide you with the most complete list of available scholarships possible.  By using a number of different scholarship search methods you will not only increase your likelihood of getting a scholarship, but will also increase the number of scholarships that you can potentially receive.
There are many different companies out there that will offer to do your scholarship search for you, but be aware that these scholarship search companies often charge a fee for their services; and although this fee is not usually too high they don’t do anything that you couldn’t do yourself, so really it’s just about weighing whether or not you want to spend your time doing the scholarship search, or if you would like to pay a company to do the scholarship search for you.
Your financial aid office at school is a great resource for conducting a scholarship search.  Most financial aid offices have a lot of information available to students about available scholarships that are tailored to students in different degree programs.  Additionally the financial aid office will usually have repositories of scholarship information at their disposal that will aid you in your scholarship search.  Unfortunately not all financial aid offices are created equal, and if your colleges’ financial aid office is ill-equipped to help you with a scholarship search then you may need to take matters into your own hands.
Connecting your own scholarship search is incredibly easy if you have an Internet connection, and in this day and age if you don’t have an Internet connection at home and then one should at least be available to you at a local public library or at your school. To get started on your own scholarship search simply type the term into a search engine and see what comes up.  There are an eerie that repositories of information out there created just to help you with your scholarship search.  These places will not only have information on active scholarships, but also links to other areas where you can find more information about your scholarship search.

Stay Informed of your Private Student Loan Rates
 When you are in college, you are much less focused on things like your private student loan rates and much more focused on things like your studies, but it will pay off later in life if you take some time to be aware of your private student loan rates and what those private student loan rates mean to you and your future.  Your private student loan rates can mean the difference between a loan that you can pay off in a matter of years and one that hangs over you for much longer because of high private student loan interest rates.  
 Your private student loan rate will be a part of the information provided to you when you apply for a student loan, and you should immediately look over the private student loan rates and figure out how they apply.  High private student loan rates can mean a loan that increases in value much more quickly than you can keep up with, making the private student loan rates a danger to your credit score.  Low private student loan rates on the other hand, can be highly beneficial and can help you get through your school years with the knowledge that you aren’t being buried by your private student loan rates.  
If your private student loan rates are not too high (and they should not be if at all possible), then consider paying off your loan at the same rate as your private student loan rates.  Paying to your loan at the same rate as your private student loan rates means that your private student loan rates will not cause your loan to increase; the value will remain even with the amount that you borrow.  You cannot know how much to pay to keep even, however, unless you are aware of your private student loan rates.  
 Of course, not everyone will have enough time to hold down a job during college, even one that only forces you to work enough to pay the interest of your private student loan rates, however a knowledge of your private student loan rates will help you by at least allowing you to be aware of the rate of growth of your loan.  It pays to be aware of your private student loan rates and to offset them if possible, just as it pays to be cautious of your borrowing during your college years and after.  

What is a subsidized/unsubsidized Loan?  Stafford loans come in two types: subsidized and unsubsidized. Interest accrued on subsidized loans during school is paid by the government. Borrowers have up to 10 years to repay their subsidized federal Stafford loan.

Unsubsidized loans start charging interest from the moment the financial aid (money) is given to the student. Sometimes, the lender offers the borrower the option to make “interest-only” payments over the course of his or her time in school. Unsubsidized Stafford loans can be used to supplement subsidized Stafford loans. 

Borrowers have up to 10 years to repay their unsubsidized federal Stafford loans. However, they must pay interest while they are in school, unless they make arrangements to postpone or capitalize them (add them to the principal) at the start of the repayment period.

Who qualifies for a Stafford loan?  To be eligible for a Stafford loan, subsidized or non-subsidized, you must: 

1. Be enrolled as a full or half-time undergraduate, graduate or professional student;
2. Be a U.S. citizen or eligible resident non-citizen;
3. Meet financial need criteria as defined by the federal government;
4. Sign an application and promissory note.

Federal Perkins loans are low-interest government-funded loans made available through schools to very needy students. No interest is charged on Federal Perkins Loans while a student is enrolled in a post-secondary school at least half-time. Students must begin repaying the loan nine months after they graduate, or after their enrollment drops to less than half time. 

If a family prefers, parents can take on a loan for their undergraduate child’s education in their name. Through the Parent Loan for Undergraduate Students (PLUS) program, financial institutions lend money to parents to cover the education expenses of a dependent.

Generally, PLUS funds are limited to the amount needed to cover education expenses less the contributions of other financial aid. Depending on the lender, payment of PLUS loans begins after the final disbursement. Borrowers have up to 10 years to repay. 

To qualify for a PLUS loan, you must:

1. Be a parent of a dependent, undergraduate student who is enrolled full or half time
2. Be a U.S. citizen or eligible resident non-citizen
3. Have a satisfactory credit history 

If a student or his or her parents do not qualify for federally funded loans, or if they simply require more money to meet the financial requirements of post-secondary education, there are other options.

Private loans, which come from private institutions such as banks and credit unions, are not guaranteed by the government. Their rate of interest, along with their terms and conditions, are set by the lender. In some cases, lenders will not require any payments while the student is in school and may even offer flexible repayment options after graduation. However, private loans’ specifics vary widely, so students should shop around. 

Students and parents can also investigate other borrowing sources to cover the cost of education. One option is a home equity loan. The interest on these loans is also usually tax deductible.

Many states offer financial aid to students attending college in their state. Contact your state higher education agency for more information.

Loans for school: A multitude of college loans choices
The most stable factor in the whole subject of loans for school is the fact that they will be necessary for most students today and in the future.  College and university expenses both for tuition and all other aspects of college life continue to increase.  Unfortunately, federal loans for school have not kept pace with rising costs.  Balancing the federal budget often means cutting back on critical programs to fund even more critical ones and this appears to be the case with federal loans for school funds. Appropriations for federal loans for school are falling short of demand to provide loans for school at federally funded interest rates. 
Costs are skyrocketing as college and universities strive to provide ever better courses that keep pace with the demands of today’s technological society. Textbooks alone are at tremendously high prices.  It is typical for a quality textbook to run well over $100 and that doesn’t include the cost of supplementary reading materials, lab fees and other incremental costs. Loans for school tuition and fees have long been a necessity for most students attending colleges or universities.  However, private loans for school expenses surrounding tuition and books are becoming much more common. Prospective students looking for loans for school would be wise to review all the options out there.  Loans for school are not the best option–having adequate resources to pay for the education of oneself or one’s children is better, but realistically, not to many individuals manage to avoid obtaining loans for school expenses. 
Another way to avoid loans for school is to choose schools that require less financial investment when possible.  Perhaps you can obtain needed classes from a community college or taking classes online.  Unfortunately, these schools are not always recognized in the same way as four year colleges and universities.  In addition, they may not offer the course of study desired, making applying for and receiving loans for school a more attractive option.
If you are exploring the option of loans for school, you should be aware that there are federal loans for school as well as private loans for school.  This assumes that you have already ruled the possibility of obtaining loans for school from interested family members.
Federal loans for school do not require credit checks, but do require voluminous amounts of documentation and completion of a lengthy application fee.  Deadlines to complete the application, known as a FAFSA, are strict and eligibility guidelines are equally stringent. On the other hand, there are no better interest rates generally available and federal loans for school funds have lenient repayment plans with potential for deferments if required. 
Private loans for school feature a simplified application form and no application fee.  Approval is very quick, sometimes only minutes, and funding of the loan amount occurs within five business days. Interest rates are not as low as for federal funds, but still are very reasonable.  Private loans for school are generally more available and are generous in the things that are included within eligible expenses. 

These days it is more common than rare for the average student to graduate college with at least some student loan debt. Try as you might to uncover bountiful scholarship programs and grants, the reality is that a college education often comes tied with financial strings. 

While an education is well worth the expense in terms of future success and self-development, it is always a good idea to know going in how much debt you can anticipate that you or your parents will need to take on in order to complete an education.

Much of the estimates regarding the amount of student debt that you will need to acquire will depend upon:

·        What level of education you intend to pursue?

·        Whether you intend to attend a public or private university

    ·        Your preferences toward location and living arrangements

With all that said, there are some generalities that can help you to begin developing a picture of the average student debt load.

Due to the fact that the average student debt has doubled in the last decade, studies now indicate that the average student loan debt is $10,000. 

While these numbers may be dismal, there are some things you can do to manage your student debt and pay it off as quickly as possible. Take a look:

Reducing your Student Debt 

·        First, take on the least amount of loans possible. Always keep your future target salary in mind and take on no more debt than you will be able to reasonably pay back.

·        Second, even though a grace period will apply; begin paying on your student loans as quickly as possible following graduation.

·        Finally; if possible, consider options such as student loan consolidation in order to decrease your interest rates. While this will automatically extend your repayment period, if you remain faithful in repaying the same amount of money each month; you will quickly begin to see your student loan debt amounts drop.

When you are considering the amount of money, it will cost you to attend school; a student loan calculator can be quite handy in determining the amount of money you will need to borrow to cover those costs and whether you will be able to reasonably pay it back after graduation. 

There are a number of student loan calculators online that you can use free of charge in order to help you make the best decisions regarding your college funding.

Regardless of where you attend college or which type of aid you apply for, the financial aid office will need to determine your estimated family contribution (EFC). 

You can get an idea ahead of time as to the amount your family will be expected to contribute towards your education by using a student loan repayment calculator that is geared to estimate this amount for you.

This is also a great way to determine whether you will be considered eligible to receive financial aid. Keep in mind that the difference between the amounts it will cost to attend the college of your choice and your EFC is your financial need. This is the amount of aid you will be eligible to receive; but be aware that a large portion of that may be made up in loans.

Nearly any federal loan can be consolidated, but private loans cannot be consolidated using federal guidelines. However, private student loan consolidation can be obtained. Private lenders are competing for your business and may offer borrower incentives, such as cash back, reduced rates and principal reductions. 

To consolidate graduate student loans through a private lender, you will need to have proof of good credit or apply with a reputable co-borrower. Private student loan consolidation may require a minimum loan balance, but private lenders tend to be more flexible than federal loan programs.

You have four main ways to repay your private, consolidated graduate-student loans. The standard plan involves fixed monthly payments for up to 10 years. The extended plan allows borrowers to extend the length of a loan up to 30 years, but each lender’s repayment terms will vary, often depending upon the balances of your loans.

Meanwhile, graduated repayment is tailored for the borrower who will require lower payments for the first few years and can make higher payments afterward. If you choose a graduated repayment plan, you should be aware that time you take off from paying on the principal of the loan will likely increase the total amount of your loan.

Income sensitive/income contingent repayment plans are quite rare and are offered only to borrowers whose income will be small. Lenders base payments upon the monthly income and employment status of the borrower, the amount borrowed and other factors. Payments are adjusted annually as the income of the borrower changes.

Before seeking a private student loan consolidation, figure out how many loans you have and whether they are federal or private loans. You should also determine where you are in the repayment process, like whether you are in a grace period. If the loans are in default, you will be unable to consolidate them.

You should also consider your total number of lenders, and should take stock of the other monthly financial responsibilities you face. If using a private lender, you should be sure to consult one of your lenders for guidance before consolidation. Private loan consolidation allows borrowers to shop around for the best deal, while federal loan consolidation must adhere to government standards. 

Many benefits result from student loan consolidation, including the fact that consolidating student loans can stretch the repayment term and reduce monthly payments by as much as 51 percent. The repayment period could be extended to as long as 30 years, and consolidation can provide borrowers with low interest rates and give them the ability to make payments to a single lender.

However, before signing on any dotted line, borrowers should be aware of the drawbacks of consolidating student loans. As you extend your loan period length, you are adding to the total cost of the loan, since you are being charged interest for a longer period. If rates decrease, borrowers who have gone through the consolidation process cannot benefit from a break in interest rates because they are locked into a fixed rate. In addition, consolidation can cause borrowers to lose their benefits on unconsolidated loans.