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Sunday, August 29, 2010
Sorority Pledging: Things to Look Out For
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What Kind of University Summer Programs Are There?
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Should I Become a Resident Adviser (RA)?
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Did you know you can get IBR on a Federal Loan Consolidation?
It’s true! If you are unfamiliar with Income Based Repayment (IBR), I would recommend reading my blog and then consulting the Student Loan Network’s handy payment estimator chart under the new repayment plan.
Why is IBR better than the normal plan?
There are a couple reasons why. First, IBR takes your income into account when it computes what your monthly payment is going to be for your new consolidation loan. For instance, if you are single and make less than $15,000, you would actually qualify for $0 payments until your income rises closer to $20,000 per year. This income number actually goes up depending on how many people live in your household. Click the link above for SLN’s payment estimator chart for more details.
Second, under IBR you can actually have your loans forgiven and canceled after 25 years (20 starting after 2014) if you never miss a payment during the life of the loan. Kind of crazy, huh? This is a benefit that does not exist in the private student loan world and in some cases the forgiving period can actually be shortened. If you completed your degree in one of the Department of Education’s “hot fields” you can actually get your loans canceled in 10 years instead of 20 or 25…. and it doesn’t even matter how far along you are in paying for them.
Saturday, August 28, 2010
Graduating? Consider student loan consolidation.
It’s that time of the year again folks; the end of finals for the Class of [insert this year here]. If you’re part of the graduating class, you likely have your Commencement soon or have already taken the walk of glory to get your degree. Congratulations!
This post is devoted to you (yes, you!) to make sure that you start off your life as a degree holder right, with as little financial confusion or anxiety as possible. To get started, I recommend you take a second to read my blog post on exit counseling.
Once you have chosen your repayment plan, it is time to consider your current financial picture. Do you have a full-time job lined up already? If not, are you working part-time?
More than likely, you will have some sort of job when you graduate… so the question becomes one of how much can you afford in living expenses per month. Depending on the amount (and type) of loans you took out for school and the repayment plan you selected, the monthly payments may still be out of your reach by the end of your grace period.
Do I have any alternatives if I can’t afford my payments? Absolutely. A student loan consolidation can significantly reduce your monthly payments at the expense of lengthening the repayment term for your loans. For federal loans, if you selected the “extended repayment plan”, this won’t really apply to you. Where consolidation really shines is private student loans.
Depending on your credit (or with the help of a creditworthy co-signer), a private student loan consolidation can net you an excellent variable interest rate with a longer repayment plan. The result: lower monthly payments, but more interest paid overall.
Although this trade-off might leave you wondering which is the lesser of the two evils, I say with certainty (being extremely familiar with the process and how personal finance works) that it is in your best interest to be able to make your monthly payments consistently every month instead of letting any of your loans go delinquent or even drop into default. The latter will do nothing but destroy your credit and leave you in a tough situation for years.
Unemployed with Student Loans?
It seems like a cosmic joke for many post-grads – you pay all this money for a college degree, you graduate, and now you can’t find a job. Worse, you’re expected to start paying off those student loans.
One way to make life a little easier is to defer your student loans. Deferment essentially suspends student loan repayment based on certain situations, unemployment being one of them. You are allowed to defer your loans up to three years.
One of the drawbacks of deferment is that the interest rate remains variable and could adjust frequently by the time you are able to start making payments. However, if you consolidate your federal student loans prior to applying for deferment, you can lock in the interest rate and lower your eventual monthly payment.
Click here to consolidate your student loans.
Click here to download the deferment forms.
From Our Forums: Consolidation Question Quartet!
There was a great question in our loan consolidation forum this week from a new user with lots of loans from medical school. James recently finished his Master’s degree as a physician assistant (congratulations!) and wrote to us looking for some consolidation advice:
I have the following types of federal loans:
Subsidized StaffordUnsubsidized StaffordGrad PLUSPreviously consolidated federal loans from my Bachelor’s in Nursing (‘97-’01)My questions are as follows:
Can I consolidate the above 4 types of loans together?When should I consolidate? Before or after July 1st? Does it matter? (Grad school was from 8/07 – 12/09)Who can consolidate? Are there any options now other then the federal government? Will there be lower interest options in the future?I’ve read about the PLUS loan loophole. Should I consolidate my PLUS loans separately to save 0.25%?
Question 1: Can I Consolidate the 4 types of loans together?
Absolutely, through the Direct Loan Consolidation Program. Since the loans described are all federal student loan products, you can opt to consolidate them together through the Department of Education.
Question 2: When should I consolidate?
This question could go a number of different ways. Due to the fact that he finished school in December 2009, he is now almost 5 months into his grace period (6 months total) before his student loans enter repayment. Consolidation can take anywhere up to 45 days to complete (though usually is less), so logic would dictate that he should start the process soon.
I recommended that he begin his loan consolidation in early-mid May to take advantage of the grace period as long as possible. As soon as the consolidation is completed, the new loan immediately goes into repayment… so if you have time left that you don’t need to be making payments, take advantage of it and make a savings account or use the money elsewhere.
Question 3: Who can consolidate?
At this time, the only entity that is authorized to perform federal loan consolidations is the Department of Education’s Direct Loan Program. In the past, other banks and institutions were allowed to do this, but regulations and reform ended the practice.
As far as lower interest options in the future… who’s to say? My professional opinion is biased toward a yes answer due to the aggressive legislation happening in Congress, but the next question would be “when?”. As the popular adage goes, “Hindsight is 20/20.” My best recommendation is to take advantage of what is available on the market now and create a solid plan for paying down your debt.
Question 4: Consolidate PLUS loans separately?
This really depends on how many of them you have and if your PLUS loan debt is significantly higher than your Stafford/Perkins debt. If yes, then it might be a good idea to keep them separate and therefore not drastically increase the interest that would be paid on your other, lower interest loans. That being said, the point of a consolidation is to cut your bills down to one and make payments more affordable, isn’t it?
Keep in mind that when the interest rate is calculated for your consolidation, it is taken based on a weighted average of your current loan interest rates, not to exceed 8.25%. If the PLUS loans make up the highest debt volume, it might make sense to keep them separate.
Was this helpful for you? Let us know in the comments!
So When Should I Consolidate?
If you are about to enter your grace period, you might be wondering when exactly you should consider consolidating your federal student loans. For many seniors at four-year schools, they will be among the last to consider the variable interest rates for federal loan consolidation.
Currently, consolidation interest rates are projected to decrease slightly on July 1, 2010, so my suggestion would be to wait until early June, when the rates are officially announced, before consolidating. Remember, this ONLY applies to borrowers who secured variable loans before July 1, 2006. Federal loans taken out after that date are subject to a fixed model. If you have any questions about student loan consolidation, visit our forums!
What NOT to do when Consolidating your Student Loans
There are a great many benefits to consolidating your student loans, such as the convenience of making one or two monthly payments as opposed to six or seven, as well a lower monthly payment. But to take advantage of the perks of consolidation, there are some things not to do:
1. Consolidate federal and private together. While it’s not possible to involve your private loans in a federal loan consolidation, it is theoretically possible to involve your federal loans in a private consolidation. But that doesn’t mean you should. Such a consolidation would do away with many of the benefits of federal consolidation, including better interest rates and forgiveness options. Always consolidate your federal and private loans separately.
2. Consolidate if you are close to paying off your student loans. If you only have about a year or two worth of student loan payments, you may be better off not consolidating. In that instance, consolidation will simply spread out your federal and private loan payments with the possibility of more interest.
3. Consolidate if you are asked to pay a fee up front. Some private lenders may have consolidation fees, but not for federal. Simply contact the Department of Education’s consolidation department at 1-800-557-7392 or visit Student Loan Consolidator for all of your consolidation needs.
ScholarshipPoints code: CONSONOT
Consolidation: Your Ticket to Summer Savings
Whether you are a recent college graduate starting a new job or moving home with the parents (don’t worry – it’s only temporary), money is an issue regardless of your situation. This summer, if you’re planning a trip or just looking to pay for a new apartment for the fall, you are always looking to save a few bucks.
Enter student loan consolidation. Consolidating your federal student loans can save you a bundle. Let’s say you have $40,000 in federal loans. Your estimated current monthly payment is probably around $457. After consolidation, that payment drops to about $275, for a monthly savings of $182 per month! Would you like an extra $182 per month? I know I would.
Visit StudentLoanConsolidator today to get started! Have questions about consolidating federal and private student loans? Post them in our Financial Aid Forums.
Friday, August 27, 2010
Confused about reform and consolidation?
If you’ve heard the word about the reform currently in progress across the country, you probably are aware of the end of the FFEL program and exclusive federal consolidation returning to the Department of Education. If not, read this page on
One question we get a lot is, “If FFEL is ending, where do we apply for consolidation now?” The answer is Direct Loan Servicing of the US Department of Education. You can apply for consolidation here: Loan Consolidation Center
Make sure to have all your account numbers and payoff balances ready to make the process quick and error-free as possible. Good luck!
Have a Consolidation Question?
If you aren’t already familiar with our Financial Aid Forum, it is an awesome resource for answering questions about virtually every kind of financial aid or loan a student can take out toward their education.
We have three dedicated Student Advocates (myself included) that are available Monday-Friday to help out and an informed user base of several hundred people. Between all of us, your question will be answered quickly and accurately (generally within a day or two).
Also, we have a great loan consolidation FAQ page that might be able to immediately answer any questions or concerns you have about the process.
As always, thanks for reading and make a post in our forum if you need help!
It’s July 23rd, Do you know where your loans are?
If you’ve ever seen those ads on TV late at night asking, “Do you know where your kids are?” you know what I’m talking about. If you haven’t, well, now you do!
Just as important as knowing what your children are up to at night is the status of your student loans. Specifically, their interest rates and repayment plans. Did you know that because nearly all private student loans have variable APRs, your interest rate could have changed several times in the past 2 years?
One way to make it easier to keep track of your loans is to consolidate them. Of course, there are a lot more benefits than just having one bill and interest rate. Here are some more loan consolidation benefits:
A credit score boostLowers your monthly payments up to 50% (at the expense of more interest overall)The interest rate for private consolidation can actually end up being lower than the average of your consolidated loans (saving money!) based on credit
Sound good to you? If so, then get started on a loan consolidation!
View the original article here
Just as important as knowing what your children are up to at night is the status of your student loans. Specifically, their interest rates and repayment plans. Did you know that because nearly all private student loans have variable APRs, your interest rate could have changed several times in the past 2 years?
One way to make it easier to keep track of your loans is to consolidate them. Of course, there are a lot more benefits than just having one bill and interest rate. Here are some more loan consolidation benefits:
A credit score boostLowers your monthly payments up to 50% (at the expense of more interest overall)The interest rate for private consolidation can actually end up being lower than the average of your consolidated loans (saving money!) based on credit
Sound good to you? If so, then get started on a loan consolidation!
View the original article here
Welcome!
Hi everyone!
This is my blog about people's experiences with Student Loans.
If you feel like you have something to add, or contribute, please let me know, by emailing me or writing a comment. You might get your own post =]
Anyways,
Hope this helps someone..
This is my blog about people's experiences with Student Loans.
If you feel like you have something to add, or contribute, please let me know, by emailing me or writing a comment. You might get your own post =]
Anyways,
Hope this helps someone..
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