Student Loans – Options for Students

There are many different options that are available for student loans these days that make it a real buyers’ market for the student. Even better news is that there is some fierce competition between financial lending companies that means even bigger savings for the student.

The hardest thing that you have to do is to choose between the best companies and sort out what options each has that will best be suited to your circumstances.

Below we will look at the options you will have available to you as a student.

Options

Before you begin to look at what is available it is a good idea to have a pen and paper handy and take some notes. It is also an idea to make a spreadsheet up and list the advantages and disadvantages of each company’s loan details.

Federal

It is always a wise choice to choose the Government loan above all others because they usually offer the lowest interest rates and also the longest term, this is so to make the loan available to almost everyone who applies for it.

You can also get it even if you have a poor credit rating or none at all. This type of loan is ideal if you don’t have an income.

These types of loans are historically easier to get the worse your personal (financial) conditions are.

Private

These are the loans with a higher interest rate but can be a bit more flexible with what they can offer you. Most of these loans normally require certain financial criteria to be fulfilled for you to be accepted and they also may require you to have a cosigner.

These tend to have credit and income requirements just like any other private loan which means that you probably will need a co-signer if you are a young college student. If your financial situation is well established, then this is probably not going to be an issue for you at all.

There are a great deal of other options for you to consider also, these are:

· PLUS Loans

· Stafford Loans

· Sallie Mae Student Loans

· Many more private companies to choose from

This is why it is important for you to make a details list of all the companies and loans you think are worthy enough for you to consider and list all their pros and cons. This way you will be able to make your choice of student loans a very well informed one.

Student Loans – Just the Facts

One of the questions that most students are asking today is that of ‘how can I get student loans?’, it seems to be at the top of everyone’s hot list and rightly so. Because once you have worked out a financing plan with a student loan or even multiple loans if needed then everything else will fall into place. There will also be a lot less stress because you would have overcome the first major hurdle to your education and indeed it will help to make a massive impact on your future after your schooling.

Below we will look at a few facts that may help you understand your options. I have simplified the answers somewhat so as not to confuse you with masses of needless ramblings and I have stuck to what Detective Friday used to say years ago, in that T.V. show Dragnet “Just give me the facts ma’am!”

Just The facts

Below is a list of tips and facts that are not in any specific order, it is just a collection of useful tips that you can store away, keep a note of the ones that resonate with you and throw the others away.

1. Before you decide to commit to any loan it is advisable to talk to your school counselor. They have their finger on the pulse and will have the latest information about student loans that will be applicable to you and have the experience to help you narrow down your search for the perfect loan. Although, not all loans are perfect but the trick is to find the one that is perfect for you.

2. Lots of educational institutions are starting to go paperless these days with many applications forms readily available for you to fill out online in the comfort of your home.

3. The first option you should consider when getting a loan is to always look at the Government loans first. They normally have much lower interest rates and you can have longer terms also.

4. Government loans were set up to provide those students that may be financially challenged and/or have some other challenging situations affecting them in their lives so as to provide as many people as possible with their right to a good education.

5. You can find the Federal Student Aid application form online and can apply online when needed.

6. Quote “For every human on Earth there are 1.6 million ants” (this has absolutely nothing to do with student loans, I just wanted to see if you were still awake).

7. After you have completed your FASA form after it is evaluated, you will receive a Student Aid Report that will show what loans you are eligible for.

8. Once you are granted a loan, you do not have to accept it.

9. It is possible to only use a part of your loan, this will depend on the specific loan provider’s conditions of course, but it is possible.

10. Private loans normally have a higher interest rate but can be more flexible with the amount of money they can provide.

11. It is a real buyers’ market, in other words, you, as a borrower, are eagerly sought after by all these loan companies who are competing. This can give you even more of an advantage because you could think about negotiating and even better deal with them.

12. Most lenders will have an online portal where you can submit a loan application.

13. The Government PLUS loan system was set up to help parents seek out the best type of Government aid for their children.

14. When you fill out the Government loan application it will probably be required that you have your parents with you as some of the information needed will have to be furnished by them.

15. When filling out any loan applications, you will have to supply detailed information about your current finances including and loans, credit cards and any other relevant information.

16. You will also need to provide all you cosigners details if you have one.

And last but not least…

17. “The total weight of those ant, however, is about the same as all the humans”

I hope that this has been of some assistance in helping you decide what type of student loans will best suit you, good, luck with your studies.

How Student Loans Are Workable for Higher Education

Studying in a global university is an uphill task. With increasing admissions and other expenses, parents cannot guarantee the finance for their child’s higher education. Securing admission under this scenario requires money and time management too. The range of expenses include admission costs, hostel rent books and the tuition fee. Parents dream of a successful career, and therefore, nothing should come in way of pursuing the studies. Parents help to a great extent money wise, but even they have their limits. In this situation, students are offered an opportunity to take care of their expenses in the form of short term student loans. Availing the loan is fairly simple. A loan benefits by providing the funds to take care of their cost of education.

Advantage of the Student Loan

The loan is important to anyone looking forward to secure finance for their higher education. The acquired funds have capability of helping the students for further education. There are a few advantages to these loans listed here that will help the borrower make a sensible decision:

Minimal Interest Rates

Before applying for any type of loan, people are cautious about the interest rates. Nobody wants to burden themselves with whopping interest rates that would result in non-repayment of the loan amount. Student loans are suggested by many brokers on competitive APRs and manageable terms of repayment. The borrowers have an option to consider all the available offers through a comprehensive online research and compare the prices. Only after proper research, the customer should approach the regulated broker.

Flexible terms of repayment

Before countersigning the documents, applicant must clearly understand the terms and conditions that are being laid down. The intermediary will explain them to the borrower, if he is unable to understand. The repayment provisions are kept trouble-free. The payment amount is decided keeping in view the financial condition of the applicant. Sufficient time is provided to repay the borrowed money. Paying off the loan is reflected on the credit report, finally improving the credit score and establishing the credibility.

No requirement of guarantor

When the individual applies for the loans online, there is no need to provide the guarantor. Adviser makes sure, the lender disburse the funds without putting forth the condition of arranging the guarantor. This saves a lot of time, as you do not need to search for the person, to act as your guarantor and support your application.

Student loans not only serve the purpose of providing quick funds for the education. These types of loans also assist in creating a positive credit history. The funds are not provided out for free. The short term student loans must be repaid when the borrower completes his or her education. Adequate time is provided for the payback.

Tips to Pay Off Your Student Loans Sooner

After graduating, many people make paying off their loans one of their top priorities. Unfortunately, what people discover is that, as it often does, life will throw them curveballs, such as job loss, medical emergencies and divorce, which will force them to change their priorities. In such cases, paying off college debt can often end up at the bottom of people’s to-do lists. However, when people do this, what they often find out is that ignoring these debts is one of the worst things you can do. Depending on their loan’s interest rate, what was once a seemingly affordable expense has enough time to develop into an unaffordable debt.

How Can I Pay Off My Student Loans Quicker?

Whether you are hoping to find a way to vault paying off your loans back to the top of your to-do list or you are a new graduate hoping to knock out your school debt right out of the gate, here are a few tips to help you pay off your student loans sooner rather than later:

    • Avoid skipping payments – If you cannot afford your payments, do not just skip them. You should get in touch with your lender and speak with them about options, such as lowering your monthly payment amount or forbearance.
    • Make sure to read the fine print – You need to read your loan agreement, because knowing certain details before a problem arises could allow you enough time to contact your lender and fix the issue without incident. For example, if the interest rate on your loan rises, it can make your monthly payment more expensive. If you know ahead of time that your payment is about to increase to an amount you will not be able to afford, you may be able to get in touch with your lender and renegotiate the terms of your loan so that your payment remains affordable.
  • Treat student loan forgiveness like a myth – Aside from situations where a person was scammed by a private lender, generally, people must pay off their loans in full. If people think that they will not have to pay off their student loans, then they could allow their student loan debt to grow out of control. People can allow this to happen, because they believe it does not matter since they expect their loan to be forgiven eventually. However, once they figure out they are wrong, it can be too late.

Student Loan Debt Is an Issue That Is Not Going Away Anytime Soon

President Obama considered the student loan debt crisis such a pressing issue that as his time in the Oval Office was winding down, he continued to work to solve it. Before his administration left the White House, President Obama implemented protections that prevented debt collection companies from charging high fees on student loans in default.

Unfortunately, after taking office, President Trump undid many of President Obama’s student loan protections. As a result, many people are racing to not only pay off their student loans in full, but also to do so as quickly as possible.

Do Not Make This Mistake If You Use an Income-Driven Student Loan Repayment Program

Income-driven repayment plans are enormously helpful if you are struggling to make payments on your federal student loans. These plans base monthly payments on a percentage of your discretionary income and family size. However, the Department of Education and your servicer require you to send your income and family size information each year so they can recalculate your monthly payments (if needed).

Failing to recertify your income-driven repayment plan by the deadline can lead to disastrous consequences. Depending on the amount of student debt you carry, your monthly payments could jump by hundreds of dollars.

What Can Happen if You Forget to Certify Your Income-Driven Repayment Plan?

A hypothetical example can explain further:

Let’s say you carry $95,000 in federal Direct loans and reported an adjusted gross income of $35,000 in 2016. For 2017, you have decided to utilize the classic income-based repayment (IBR) program. Starting in April, your monthly payments dropped to $200 per month from $1,100 per month (what they were under your 10-year repayment plan). To make repayment even easier, you set up your monthly payments to pull directly from your checking account by the due date.

Let’s jump ahead a few months. In December of 2017, your loan servicer sends you an email warning that you must recertify by February 24th of 2018 or your loan payments will increase to $1,100 per month by April 3rd. However, you have changed your email and phone number. You never receive the warning. February 24th rolls around and you miss the deadline. Once April 3rd arrives, you are horrified to discover your checking account is overdrawn by more than $500, overdraft fees included. You are unable to pay your rent, utilities, and credit card bill.

Although this is a worst-case scenario, many people do not recertify their income-driven repayment plans on time each year. In 2015, the Consumer Financial Protection Bureau reported that 57 percent of borrowers using these plans failed to recertify by the deadline. This is not always the fault of the borrower. Loan servicers may not file recertification paperwork on time. Borrowers who sent in their updated information on time may be frustrated by higher payments, even when they did nothing wrong.

The good news is that the Department of Education does not “kick you out” of your income-driven repayment program. You can still recertify, although late. Unfortunately, you may be out several hundred dollars. What is likely to happen is that your loans will be placed into an administrative forbearance while your updated information is processed. This can temporarily halt your unaffordable payments.

It is crucial to remember the recertification deadline. Ask your servicer if they can provide you with this deadline. Always make sure your servicer has up-to-date and accurate contact information. If possible, try to recertify months before the deadline. This may help avoid any holdups with your recertification.

What Happens If I Default on My Student Loans?

More than 1.1 million Americans defaulted on their federal student loans for the first time last year. When you default on federal student loans, the consequences are severe and can affect several areas of your life. You may experience consequences that include:

  • Wage garnishment: The Department of Education can garnish up to 15 percent of your disposable pay. Unlike private collectors, the Department of Education does not need a judgment to garnish your income.
  • Your balance increases: Your remaining balance immediately becomes due once you default. Unpaid interest and collection fees may also be added to your balance. The latter is especially true for borrowers with FFEL loans.
  • Reduced credit score: Loan servicers will report you to the three credit agencies if your loans remain delinquent for too long. You are also reported to the three credit agencies after defaulting. This can significantly lower your credit score. Having a low credit score can make it more difficult to secure employment, housing or other lines of credit.
  • You lose eligibility for financial aid: You are not eligible for federal financial while your loans are in default. Defaulting on your loans may cause problems if you plan on returning to school.
  • You lose eligibility for repayment plans: One of the major benefits of most federal student loans is that you can take advantage of income-driven repayment plans. You lose these options after defaulting on your student loans. In addition, you also no longer qualify for economic hardship deferments or forbearance.

Can I Get My Student Loans Out of Default?Depending on your situation, it may be possible to get your federal student loans out of default. Borrowers generally have two options available – the Education Department’s loan rehabilitation program or converting your loans into a Direct Consolidation Loan. Both options may have pros and cons that are dependent on your individual situation.

If you choose loan rehabilitation, you must make nine monthly payments within 20 days of the due date for 10 consecutive months. For Perkins Loans, the requirement is nine payments for nine consecutive months. You can only use the loan rehabilitation program once. Once your loans are taken out of default, you can qualify for helpful repayment programs. In addition, records of the default are removed from your credit report.

Your second option is to consolidate your defaulted loans into a Direct Consolidation Loan. This will consolidate your loans into a single loan with a fixed interest rate. By consolidating your loans, you can exit default within a period of weeks instead of months. However, you may pay more over the life of your loan if your prior interest rate was lower.

5 Reasons NOT Saving for College Is a Good Idea

Okay. You caught me. Indeed most of the time not saving for college is a bad idea. Now and then I’ll run into a parent who tells me they are not saving for college in order to increase the chances their child will get financial aid. The thought is that having money makes colleges and the government figure you can afford to pay for college and therefore no aid is needed. This, to a limited extent, is true. If you have millions in the bank I’d rather not have my tax dollars taken and used to pay for your kid’s college so that you can spend the money on first class tickets to Vail.

However, assuming that saving for college will mess up financial aid is short-sighted and makes many assumptions. The first one being that there will be financial aid available for your child. We don’t know what the government will have in the way of aid in 5, 10, or 15 years. You should also realize that the majority of financial “aid” is in the form of loans. You very well could be creating a situation that burdens your kids with onerous loans they will have difficulty paying back in exchange for a little better lifestyle now. I wouldn’t call that sound financial planning.

Another reason that saving won’t hurt much when it comes to aid is that the government knows that you have more to save for than just college. If you save in your name rather than your child’s (including the 529 College Savings Plans and Coverdell ESAs) less than 6% of the savings in those account types will be counted against financial aid. Yes it does count against you a bit, but not much as assets held in the child’s name at 20%.

There is a good reason for not saving for college: You have more important needs for that money. Note I don’t say “if you can’t afford it.” That’s because determining affordability is often simplified to seeing if there’s money left at the end of the month. Most of us find ways to spend any money that is available. What we spend it on might be a true life-giving need, but it also might be a dubious want.

So what may take priority over college savings? Being a retirement planner, I like to see money put away for the time when you can no longer work. Of course, food, clothing, and shelter also seem like needs. But let’s be clear: you can spend $20, $40, or well over $100 on blue jeans. I’m thinking the $100 pair doesn’t count as a need.

In the end though, some folks just won’t be able to afford to save for college without leaving themselves short in other vital areas. That’s not selfish, that just is. But for the rest of us, it’s an area that deserves our attention.

Controlling Student Loan Payments

Student loan debt has become an epidemic of sorts. These loans can be hefty and ultimately stressful. Many young people in America are scared to even make a monthly payment on their student loans. It could seem impossible to deal with due to the enormous balance that doesn’t seem to go anywhere.

When you are young you are impressionable. Today’s millennials are no exception. Accruing student loan debt is seen as a necessary burden essential to achieving their careers. Many find themselves employed following college. However, according to CareerBuilder.com about half of college graduates in 2014 were employed in jobs that do not require a college degree.

To make things worse the student loan lenders begin hounding their “clients” immediately after graduating. If you are one of these clients you probably know by now that nothing in this world comes easier than debt. The chances of you having money to pay your student loan debts so soon is quite slim.

Before leaving high school these young, impressionable people are lead to believe a college education will lead to a guaranteed career. Turns out, it is not that simple. The Washington Post reported in 2013, according to data from Jaison Abel and Richard Dietz of the Federal Reserve Bank of New York, only 27% of college graduates had jobs related to their major. If this comes as a rude awakening to you I apologize. There is no one simple way to make your dream job come true and your student loan debts disappear. However, it takes action, commitment and it is possible.

Student loans. If reading those two words infuriates you don’t worry. It should. Paying off student loans may seem impossible but there are ways you can help yourself out. The first thing you need to do is understand what type of loan you have. Some loans are eligible for certain benefits which may assist your situation.

Check out the National Student Loan Data System (NSLD). This website is home to the U.S Department of Education’s database for student aid. Only federal student loans are eligible for this aid. In my experience I’ve talked to more individuals with federal loans than those with private ones.

A good idea for those who are unemployed or “between jobs” is deferment or forbearance. A deferment or forbearance allows you to temporarily stop making your federal student loan payments or to temporarily reduce the amount you pay. This could be helpful if you are in danger of defaulting on your loan. A default occurs when you have not made your monthly payments for an extended period of time. In the case of a default, the lender make execute legal action in order to get their money back.

If you are eligible for deferment, the federal government may pay the interest on your loans during the deferment period. The opposite goes for a forbearance. In a forbearance you may be able to lower your payments or stop payments completely for up to 12 months.

These options can give you room to breathe and pursue the career you studied so long to achieve.

There are other options available to help get your monthly payments decreased to a manageable level. There are income-based repayment plans for people with direct loans or Federal Family Education Loan (FFEL) Program loans. In an income-based repayment program your monthly payments can be reduced to 10% of your monthly income. In most cases the loan is forgiven after 25 years in these programs.

Depending on your situation, there may be a repayment plan out there that best suits you. Head over to the Federal Student Aid website and browse their listings of payment plans.

Student loan consolidation is a viable option for people with more than one student loan. If your student loans have varying interest rates and minimum monthly payments you should look into a Direct Consolidation Loan. Just like traditional consolidation, a direct consolidation loan combines multiple federal student loans into one loan with one payment and interest rate. These loans can stretch the amount of time you have to pay the loan, thus lowering your monthly payment. You will also get a fixed rate on your interest instead of dealing with variable rates.

Consolidation does have its down sides. You may be more comfortable with the monthly payments but, you will end up paying more in the long run due to the interest rate. If your individual loans had attached benefits you will lose those as well.

You may not have planned on dealing with student debt when you were leaving high school. With most people it seems to sneak up on them as soon as the leave college. No matter what your student debt situation is there are programs available to help you manage it. You deserve to focus on the future and work towards your career goals instead of worrying about monthly payments.