Student Loans Insight

Federal Student Financial Aid’s core mission is to ensure that all eligible individuals benefit from federal financial aid assistance such as grants, student loans and work study programs developed for education beyond the high school years. The programs they administer consist of the nation’s largest sources of student financial aid. During the 2007-2008 school year alone, they provided approximately $83 billion in new financial aid assistance to nearly 10 million postsecondary students and their families. There staff of 1,100 is based in 10 cities in addition to there Washington based headquarters.

There are many postsecondary educational options from which you can choose. However, whether you have decided to attend a four year college or a university, community college or technical school, the knowledge you gain in college will be of great value to you for the rest of your life, no matter where you go or what you do.

A postsecondary education will give you more opportunities in life. Those who receive education credentials beyond a high school diploma have much more jobs to choose from and earn much more than those who did not pursue an education beyond high school. For example, according to the US Census Bureau, a graduate with a bachelor’s degree earns almost double, what someone with only a high school diploma will earn.

Pursuing an education beyond high school is an opportunity you should not deny yourself simply because you are not sure if it is for you. Many students simple do not know what career path to follow. However, exposure to different academic subjects, people and points of view can help you decide what career path you would like to pursue. After high school, you get to study what interested you and, when you graduate, you will be paid much more for your knowledge.

The cost of education beyond high school just continues to rise. At Federal Student Financial Aid, they will offer financial aid programs that help millions of students manage the cost of there education each year.

Education is your most important first step towards any success. Education will also create many more opportunities. No qualified person should be denied a college education because the cost is too high. Therefore, if you have been considering education beyond high school and wondering how you will pay for it, there are many options out there that can help. There is money available, but you must apply for it to be eligible.

I can tell you exactly how to get started. In fact, I can tell you most everything you need to know about federal student financial aid assistance programs, grants, student loans, work study and more.

The chances are you know someone who has taken advantage of one or more of the federal student financial aid assistance programs. It is very possible that you too can make this happen for yourself or a family member. The key would be start here, today, and keep going.

You will find much useful and needed information at the Federal Student Aid website. You will be able to find online versions of other publications and you can also apply for federal student aid. They will be most happy to answer and all questions you may have. So do not walk away from a gift. Get started on the way to your postsecondary education.

Some Top Financial Aid for College Tips
Educate Yourself About Your Financial Aid for College Options

Do you know what you are about to get into and how to best plan for what is likely to be one of your life’s largest expenditures. Let us just set the record straight right up front. Being realistic, you will have to pay for your college education, let me just give you some information to allow you to make the right chooses from here on out.

There could be a good chance that say the equity in your home and/or some other components of your net worth and income could be held against you in the calculation of your SAR (summary of the financial aid you can expect to receive) of your FAFSA. This does not mean, however, that there will not be any ways to reduce the financial burdens of the financial aid for college burden.

Take A Look At Your Tax Options

There can be many potential tax benefits that are available for most tax payers. These would include Section 529 college tuition savings plans. Additionally the interest on college student loans can sometimes be tax deductible. While I are not an attorneys or CPA, and do not wish to dispense tax advice, I have included some general information on the tax ramifications of financing a college students education. This can certainly help you get on your way to optimizing any tax situation.

Getting to Know Your Financial Aid Administrator

Establishing a good and healthy relationship with your financial aid administrator will help ensure that he or she does everything in there power to help you out. Additionally, this might help if you have any atypical expenses that they might be able to make an allowance on.

Starting with Uncle Sam

First and foremost, the first financial aid form you should complete should always be the FAFSA, Free Application for Federal Student Aid. Even if you think you know you will not qualify for any kind of financial aid, filling out this form is often the first step to applying for many other types of financial aid including federal college student loans, state grants, and college scholarships.

Make Sure You Apply Early

Apply as soon as possible after January 1 as possible. You can use estimates for items such as income if you have not yet completed your tax returns. Keep in mind Financial aid is partially given out on a first come, first serve basis.

Always Apply for Everything

If you do not apply for the grants and scholarships, you will never get them. There are many great scholarship search engines as well as many different types of scholarships out there. Chances are you will qualify for a number of them, but you have to apply for them.

Financial Aid for College is a much needed and sot after tool. Keep this in mind and do all the research. Follow the simple tips laid out for you above and you will come out ok.

A private student loan can cover up to 100% of the cost of your education up to an aggregate lifetime maximum of $250,000. You can use it to help cover most educational expenses like tuition, books, room and board, school fees, supplies and college student loan fees.

You may apply for a private student loan online 24 hours a day, 7 days a week and usually get an online decision within minute. When applying with a credit worthy co-signer you may improve your chances of approval and of obtaining a much lower interest rate and/or college student loan fee.

You do have to be at least 18 years of age (19 in Nebraska and Alabama, 21 in Puerto Rico & Mississippi.) However if you reside in Mississippi and are under the age of 21 you may borrow with written consent from a parent or guardian. You must also be enrolled at an eligible institution to be approved for and receive any private student loan. Enrollment will be verified after you submit an application, as part of the private student loan approval process. You must carry at least a half time credit load for a private undergraduate or graduate college student loan.

Features of Most Private Student Loans

• The funds will be disbursed directly to the applicant(s), not the school.
• There will be no federal forms to complete and no application deadlines.
• There will be a 12-month grace period after graduation before the private student loan repayment begins.

Limits

• Private Student Loan minimum of $2,500 per academic year.
• Private Student Loan maximum of 100% of the total calculated Cost of Education per academic year with an aggregate lifetime maximum of $250,000.

Interest Rates

• Interest rates can be as low as Prime minus 0.5% to Prime plus 7.9%.
• Appling with a credit worthy co-signer will increase the chances of approval and of obtaining a lower interest rate and/or private student loan fee.

Fees

• Private Student Loan fees range from 0% - 9% depending on the applicants’ credit profile and other underwriting criteria.
• Private Student Loan fees are included in the total private student loan amount, so you have no out of pocket expenses.
• Appling with a credit worthy co-signer will increase the chances of approval and of obtaining a lower interest rate and/or private student loan fee.

Repayment

• Private Student Loan repayment begins 12 months after graduation or six months after you cease to be enrolled on at least a half time basis.
• Can have up to a 25-year repayment term.
• Level and graduated repayment options along with forbearance up to one year.
• There should not be any prepayment penalty.

If the private student loan borrower does not specify a payment option, the student loan will automatically be put on a level repayment schedule. The repayment time frame and payment amount will vary depending on the total amount of the student loan debt a borrower has incurred by the beginning of his or her repayment time frame. The repayment period can be less than the 25 year maximum if a minimum of $50.00 per month payment will satisfy the student loan in a shorter period of time. The monthly repayment amount may be set at more than the $50.00 minimum to satisfy the student loan within the 25 year maximum.

Benefits

• Interest rate discount up to 1% for on time payments and direct auto account payments.
• Interest could be tax deductible for qualified taxpayers.

There are many college student loan options out there. Continue to read on for expert advice and information about all the options right in front of you.

Some Facts about Educational Loans

• 52 percent of all financial aid comes in the form of college student loans.
• Some college student loans are need based, meaning that they are awarded when the family has demonstrated financial aid need.
• Other college student loans are not need based. Instead, they are designed to help pay the family portion of the costs.

Some Advice on Education Loans

Need based college student loans will usually have much better terms, so you should consider those college student loans first.

College Student Loans

There are four main kinds of federal college student loans:

Perkins College Student Loans are need based loans and are awarded by the financial aid office to students with the highest financial needs. The interest rate is very low, five percent, and you do not make any student loan payments while you are still in school.

Subsidized Stafford College Student Loans are also need based loans with a fixed interest rate of 6.8 percent. With subsidized college student loans, the federal government will pay the yearly interest while you are still in school.

Unsubsidized Stafford College Student Loans are not based on financial aid need and can be used to help pay the family portion of costs. You are responsible for paying the interest on the college student loan while in school. You might choose to capitalize the interest. The advantage of doing so is no interest payments are required while you are in school. The disadvantage of doing so is the interest will be added to the college student loan, meaning that you will repay more money to the lender.

Graduate PLUS College Student Loans are student loans for graduate students sponsored by the federal government that are not need based. Generally, students will be able to borrow up to the total cost of education, minus any financial aid received. The advantage of this college student loan is that it allows for greater borrowing capacity. However, students should consider the lower interest rate loans first, such as the Subsidized Stafford or Unsubsidized college student loans prior to taking out a Grad PLUS College Student Loan.

Other College Student Loan Options

Private college student loans: A number of private lenders and other financial institutions offer private college student loans to the student. These college student loans are not subsidized and will usually carry a higher interest rate than the federally need based loans.

College sponsored loans: Some colleges have their own college student loan funds. Interest rates may be a bit lower than federal college student loans

Other college student loan options: Besides setting up scholarships, some private organizations and foundations have college student loan programs as well. Borrowing terms could be quite favorable.

Parents also have federal and college sponsored loan options such as:

Federal PLUS loans: The PLUS Loan program is the largest source of parent college student loans. Parents can borrow up to the full cost of attendance minus any financial aid received, and repayment starts 60 days after the money has been paid to the college.

Private student loans, or commonly called alternative student loans, are not part of any federal loan program. They involve you taking out a private loan from a private student lender to help pay for college. They will not have interest rates that are set by the government (like PLUS or Stafford loans).

You typically want to exhaust all other financing options before taking out a private student loan. Make sure you have exhausted all of your scholarships and taken advantage of Stafford student loans before getting a private student loan. Private student loans would be a much better option than paying for it on the credit card.

In most cases, private student loan lenders will allow you to borrow up to the cost of attendance minus any other financial aid you have obtained. Some will also allow for expenses like a new computer or study abroad. You should check with the specific lender regarding all the student loan limits. As a rule of thumb, you want to minimize the amount of private student loans that you take out. Remember, you will have to pay this money back at some point and the interest will be higher than any financial aid loan you receive.

There are no controlled interest rates for private student loans. Interest rates may differ from lender to lender and of course will also depend on credit scores and history, and other factors decided upon by the specific lender. Moreover, these types of loans offer interest rates that are variable interest rates, meaning that they can change over time, based on changes in certain financial indexes (like the PRIME rate and the LIBOR rate).

Unlike federal student loans, there are no standardized fee structures for private student loans. The upfront fees will probably differ from lender to lender. Your credit history or lack of, or your parents’ credit history may also affect the upfront fees you can be charged.

Many private lenders will offer rewards or benefits as part of their private student loan package. Examples of borrower benefits can include graduation benefits, interest rate reductions for on time payments or auto debiting on your bank account. You need to be realistic about whether you will actually earn or use these benefits or rewards. What are the chances you will make 48 on time payments in a row? They might be low. What is the chance you will earn the graduation benefit? We would hope the chances are high that you will get this one. You can compare many private student loan lenders on line as a start.

You do not have to complete the FAFSA to apply for a private student loan. However, it is recommended that you complete a FAFSA and take advantage of the federal student loan programs (e.g., Stafford and Perkins loans) prior to applying for private student loans. Many lenders will probably require that you have a co-signer on your student loan. A co-signer is someone with better credit than you who will take the responsibility for paying back the private student loan if you are unable to. A co-signer with a good credit history will generally get you a much better interest rate on your private student loans. For most students, your parents may be willing to co-signers.

Many school financial aid offices will provide a Lender List for you to use as a reference in your search for a private lender. The school will also provide a document explaining how it goes about selecting this list. It can often be a good idea to use this list or to use a Student Loan Comparison tool that allows you to investigate a number of private lender options and make an educated decision about which lender will be right for you. You are not required to use a private lender off the school’s Lender List though. You definitely should do some research and compare your private student loan options.