Loans Debts And Students
Archive for December, 2008
What Varieties of Options are Out There in Student Loans?
Dec 24th
Whether you are in your first 4 years of college or are attending graduate school you are paying several times more for your college education than your parents and grandparents paid. This increase makes it difficult for students. But there are programs out there that give much needed assistance.
Initially a college student may avail himself of many different programs to pay for college. There are student loans, grants and scholarships and some students must take advantage of all three.
Stafford loans are very popular and there are two types. The unsubsidized loan is a bit more expensive because you are responsible for accrued interest from the very beginning of the loan. Though they cost more, these types of Stafford loans are easier to qualify for. A subsidized loan in which the government makes your interest payments until 6 months after you finish college are of course less expensive because you save on all that interest. However, these loans have stricter requirements, offered only to low-income families.
Here are some websites you can visit to see what you might qualify for: http://www.salliemae.com/get_student_loan/find_student_loan/undergrad_student_loan/federal_student_loans/stafford_loans/ and http://studentaid.ed.gov/PORTALSWebApp/students/english/studentloans.jsp
Graduate students have to work a bit harder for financial aid. Graduate school is more expensive and less scholarship opportunities are available. Typically a graduate student has to work as a research assistant or other employment related to their major to pay their tuition.
In recent times the PLUS loan program has been extended to graduate students. In the past this program was restricted to parents of undergraduate students. Now it has been expanded to include graduate students and rather than making the loan to parents the money is loaned directly to the student.
The Pluses of a PLUS loan
Graduate students have one advantage that many people do not have. Most of them have not yet had the opportunity to get into a lot of debt and have credit problems. Since PLUS loan approval is based on your credit scores many graduate students are able to qualify.
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Before considering consolidation as a way to get your debt paid off, you need to consider the debt consolidation loan consequences. It isn’t always a good idea to consolidate your debt. Find out why on the Inside Debt Consolidation website
Bad Credit Student Loans
Dec 22nd
For individuals who would like to get a college education, the cost of tuition can often make or break their decision. Without financial assistance, an education of this type could be way out of reach for quite a few people. If you have bad credit, the process of finding aid can be tricky, but getting a college education is still within reach.
People often wonder if they will need to establish a better credit history before they apply for student loans. The answer is almost always no. There are some great federal programs that are available to individuals that have both good and bad credit.
The government provides many different types of loan programs, and most of them are based on the need of each individual. One such program is the Stafford loan program, where people qualify based on need. Credit history isn’t part of the application process, and also isn’t considered as part of the approval process.
If you are a person that has a lot of need for financial assistance, you may be able to qualify for Pell grants and/or Perkins loans. These types of financial assistance are available for people that have bad credit and need to pay for education. Credit actually isn’t part of the process of applying for these loans so go ahead no matter what type of credit you have.
If you’re able to qualify for Pell grants, they will never have to be paid back. As long as your education is in good standing, you should be able to get a Pell grant each semester for as long as you qualify.
If you aren’t able to qualify for the federal subsidized loan programs, there are still some options out there for you. Take a look at unsubsidized Stafford loans, because they are probably still available to you, even if you have bad credit.
The government doesn’t assist in any way with the payment. But generally, the interest rates are much lower than other lending options. And like all of the loans and grants mentioned, your bad credit history won’t disqualify you from receiving the loan. So if you want to go to college, there is always a way.
About the Author:
Dave educates students on finding a good bad credit student loan and also how to avoid getting the wrong bad credit student loans.
Student Loan Talk of the Terms – Student Credit Cards
Dec 11th
Are you a student, relying on student loans to get you through college or university? Or are you just applying for a student loan, looking forward to a higher education? The process of applying for any loan, let alone a student loan, can be confusing if you don’t understand the terms that are fired at you. The accounting sector sometimes forgets that you haven’t got our education yet – that’s why you’re applying for a student loan.
So we’ve compiled this list of student loan terms and definitions to give you an education before your education. You need to know, just like the rest of your studies, exactly what’s going on. So read on, and learn.
Accrued interest is the amount of interest, calculated daily, that’s accumulated on the unpaid balance of your loan.
Amortization is the process that reduces your loan balance by making monthly payments.
Assets refer to your financial worth, including your home, business, savings and checking account, bonds, stocks, trust funds, real estate, etc.
An award letter is issued by a college’s Financial Aid Office (FAO), listing all the financial assistance offered to a student.
A borrower is a person to whom a loan is given with the condition that he repay it. A promissory note is signed as a formal promise to repay the loan. Capitalization occurs when unpaid interest is added to the principal balance of the loan, thus increasing the amount of the loan, and increasing monthly payments.
A co-borrower, a second or additional party, may receive part of the loan proceeds and agrees to repay the loan.
A co-signer signs a promissory note, thus agreeing to pay the loan if the borrower defaults.
The cost of attendance is the total amount a student has to pay, determined by the college’s FAO, to attend school for one academic year. It may include tuition, room and board, books, supplies, transportation and personal expenses.
Credit-based loans are based on your credit worthiness as opposed to the Federal Stafford Loans and grants, which are determined by a need analysis process, based mostly on the cost of education. And then Don’t forget the Student Credit Card. Default occurs when you fail to pay your loan according to the terms on your promissory note.
Deferment refers to the period of time during your repayment in which you, after meeting certain criteria, aren’t required to make your regular monthly payments. If a payment isn’t received by the due date, it’s considered delinquent.
Direct lending schools are colleges or universities which have chosen to place all their students’ federally-insured student loans through the Federal Direct Lending Program.
A disbursement notification marks the successful completion of the loan application process. It informs you that your loan has been approved, and states when the money will be sent, as well as the amount of the loan, including any fees.
A disclosure statement informs the involved parties of the actual cost and terms of a loan, including the interest rate and any additional finance charges.
An emergency loan program provides for a student to get a short-term, low-interest loan, administered by the school’s FAO. An exit interview is a counseling session conducted with the school’s FAO before a student graduates or withdraws, to review the terms and obligations of a student loan.
The EFC refers to what a family is expected to pay toward the cost of the college loan. It’s determined by the FAFSA need analysis formula established by the federal government, and is found on the Student Aid Report (SAR). The FAFSA or, Free Application for Federal Student Aid, is a standard federal form that determines your eligibility for most types of financial aid. Your eligibility is determined by your income, asset, and tax information from you and/or your parents.
The FFEL program is authorized by the federal government in the Higher Education Act of 1965. The loans in this program are funded by lenders, and guaranteed by guaranty agencies; but they’re ultimately insured by the federal government.
Forbearance is temporary postponement of payments of the principal of a loan; interest only may be paid, or it may be added on to the end of the loan.
A financial aid package is the total amount of assistance available to the student, including all grants, scholarships, work-study and loans from school, state and federal programs, as listed in a college’s financial aid award letter.
Financial need is the difference between the total cost of attendance and the EFC.
The grace period is the amount of time before the principal loan repayment begins after a student graduates, leaves school or drops below half-time status. Payments don’t need to be paid during this time.
A guaranty agency is a state or non-profit organization, which insures student loans, pursuant to an agreement with the Secretary of Education under the Higher Education Act.
Interest is a fee charged to borrow money, usually expressed as a percentage of the outstanding amount, which accrues over the life of a loan. A late fee is charged by the lender if a student loan payment isn’t received with 15 days of the due date.
An MPN is an agreement the borrower signs that legally binds him to pay the loan, with interest, in periodic installments. Multiple disbursements are paid in more than one transaction.
An origination fee is charged by the federal government on FFEL loans to cover the cost of processing the loan.
The payoff balance refers to the total amount you’d owe if you paid off your entire loan, including the outstanding principal plus interest. The principal is the amount of the loan that has to be repaid; the interest is added to the principal and included in your payment and the Status refers to the condition of a student loan.
An SAR is sent to a student by the government 4-6 weeks after submitting an FAFAS. It lets the student know what he’s eligible for as far as the EFC and other financial federal student aid is concerned. The government pays the interest on a subsidized loan while the student is enrolled in school at least half-time and during grace periods and deferment.
With an unsubsidized loan, the borrower always has to pay the interest while he’s in school, or during deferment, forbearance and grace periods.
So there you have a comprehensive list of relevant terms. Student loans don’t have to be complicated. You have enough to learn once you start your studies. Make sure you understand these terms and you won’t have to worry when you apply for a student loan. Then, using that loan to get a good education, you can move out into the world and work towards your life goals.
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