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Sunday, October 10, 2010
How to Find a Good Math Tutor in College
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5 Letter of Recommendation for Graduate School Samples
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The Difference Between College vs University
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Too Much Homework in School? What to Do
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Saturday, October 9, 2010
How to Find a Good Math Tutor in College
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How to Ask for a Letter of Recommendation
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5 Letter of Recommendation for Graduate School Samples
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The Difference Between College vs University
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How to Find a Good Math Tutor in College
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Friday, October 8, 2010
How to Ask for a Letter of Recommendation
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Too Much Homework in School? What to Do
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How to Ask for a Letter of Recommendation
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How to Find a Good Math Tutor in College
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The Difference Between College vs University
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How to Find a Good Math Tutor in College
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Thursday, October 7, 2010
5 Letter of Recommendation for Graduate School Samples
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Too Much Homework in School? What to Do
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How to Ask for a Letter of Recommendation
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5 Letter of Recommendation for Graduate School Samples
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How to Ask for a Letter of Recommendation
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How to Find a Good Math Tutor in College
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Wednesday, October 6, 2010
Too Much Homework in School? What to Do
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The Difference Between College vs University
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How to Find a Good Math Tutor in College
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The Difference Between College vs University
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Too Much Homework in School? What to Do
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5 Letter of Recommendation for Graduate School Samples
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Tuesday, October 5, 2010
How to Ask for a Letter of Recommendation
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5 Letter of Recommendation for Graduate School Samples
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Too Much Homework in School? What to Do
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How to Find a Good Math Tutor in College
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The Difference Between College vs University
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How to Ask for a Letter of Recommendation
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Monday, October 4, 2010
Ready for a rate cut? One’s coming in July!
New and continuing students, I’m pleased to inform you that the interest rate for the subsidized federal Stafford loan will be cut on July 1st from 5.6% to 4.5%. Even better, it is remaining a fixed interest rate loan, meaning the rate will never change after you accept the loan.
Curious to how that affects you? Say you’re a sophomore, come from a low income family and take out the maximum amount of subsidized Stafford loans you can: this equates to about $2,000. The default repayment period on Stafford loans is 10 years (you can go up to 25, but we’ll stick with this for example.)
Here’s the math:
Old rate: $2,000 at 5.6% interest over 10 years = $2,616.72
New rate: $2,000 at 4.5% interest over 10 years = $2,487.17This equates to a savings of $129.55 or about 5% less.
If we plot the same calculations out over a 25-year repayment period…
Old rate: $2,000 at 5.6% interest over 25 years = $3,720
New rate: $2,000 at 4.5% interest over 25 years = $3,336This equates to a savings of $384 or about 10% less.
As you can see, it doesn’t sound like much, but it makes a big impact in the long run. Not to mention, by the time you graduate, you’ll have somewhere in the realm of 3-4 of these loans. Quadruple the savings above and the deal becomes bigger and bigger.
Should I Consolidate my Private Student Loans?
Federal student loan consolidation is fast, easy, free and highly recommended to lower your monthly payment. Private student loan consolidation is a bit trickier. Here are some notes to remember if you choose to go down this road.
For starters, not everyone who applies for private loan consolidation will be accepted. One only a few lenders, such as Wells Fargo and Chase, will even handle a private loan consolidation.The aforementioned lenders and almost any bank that will consolidate your private loans will likely require a minimum amount to be consolidated.If you can get a private student loan consolidation it may lower your monthly payments significantly, but the lifetime interest of the loan will greatly increase. It is highly recommended that once your grace period expires and you begin the process of repayment, that you aim to pay down your private loans as quickly as possible to avoid the spike in interest.Have questions about private loan consolidation? Visit the Consolidation section of our Financial Aid Forums!
South Carolina Colleges Foresee Problems With Government Handling of Federal Student Loans
While the recently passed Student Aid and Fiscal Responsibility Act promises to save taxpayers billions of dollars and expand financial aid and other benefits to students, the idea that its overhaul of federal student loans will go off without a hitch is one that’s not shared by many colleges in South Carolina.
State school officials have been expressing doubts that a mere handful of centralized government agencies can successfully and efficiently execute the work that until now has been handled by hundreds of nonprofit state agencies and for-profit commercial banks throughout the country (Colleges Fear Federal Takeover of Lending, The Spartanburg Herald-Journal, March 28, 2010).
Student Loan Legislation Forces Out Private Lenders
The SAFRA bill, included as part of the health care reform package approved by Congress last week and signed into law by President Obama on March 30, brings about a major revamp of the federal student loan system.
Under the previous system, colleges had two choices for their provider of federal student loans: the Federal Direct Loan Program and the Federal Family Education Loan Program (FFELP). Students at schools in the Direct Loan program obtained their federal college loans directly from the U.S. Department of Education; students at schools in the FFEL program had to obtain their loans from third-party lenders — state agencies or private banks — that were paid government subsidies to issue federally backed parent and student loans on behalf of the government.
The SAFRA student loan reforms eliminate the FFEL program, leaving the Direct Loan program as the sole source for federal education loans. Beginning July 1, all borrowers will now obtain their federal parent or student loans directly from the Education Department without going through a commercial or agency middleman.
Government Bottleneck Could Mean Financial Aid Breakdowns
Some South Carolina education officials fear that the mandated nationwide switch to direct lending, which begins this summer, will overwhelm the Direct Loan program’s capacity and create a government bottleneck, resulting in major administrative problems, delays in the student loan process, and a lack of efficient support for financial aid offices.
“I'm really not a proponent of it, and not happy about it,” said Dan Philbeck, vice president for enrollment management at Spartanburg Methodist College, a sentiment shared by many in South Carolina higher education.
“It’s going to hit everybody,” added Kay Walton, director of financial aid at Wofford College.
Possible Delays Would Hold Up Student Loan Disbursements
The most critical issue faces students, who might experience delays in receiving their federal student loan money.
Some colleges, in anticipation of such lags, have proactively moved up deadlines in their own internal financial aid processes in attempts to compensate. At the University of South Carolina Upstate, for example, the financial aid office has set a deadline of July 15 for students to complete their student loan promissory note for the upcoming 2010–11 year. But if students wait too long and their funds are delayed, “their classes are going to get dropped,” said Allison Sullivan, USC Upstate’s director of financial aid.
Default rates could also increase with the disappearance of lender-run default prevention programs. The government was reimbursing FFELP lenders for any defaults, but only partially, which meant it was in the lenders’ best interest to prevent borrowers from defaulting on their federal college loans.
“Right now our default rate at Wofford is zero,” said Walton. But “the Department of Education is saying to expect your default rate to increase [when you switch to direct lending]. So we’re going to go from a zero to who knows.”
Government Challenged to Provide Efficient Service and Support for Schools and Students
Because only about five federal agencies are going to be handling the direct-lending volume from every single U.S. college and university, the government could confront incredible challenges as it tries to serve the needs of a sudden flood of schools.
The Department of Education has informed financial aid offices that a list of customer-service 1-800 numbers will be provided for support but that it could be 10 days before action is taken on an issue — not exactly the kind of timely response South Carolina’s schools are used to receiving from the private sector or from the South Carolina Student Loan Corp., a nonprofit FFELP lending agency in Columbia, S.C., that has been providing federal student loans to nearly every college in the state.
Students may fare no better. “As far as customer service and getting things straightened out,” said Philbeck, “if there was an error or anything, we just simply had to place a phone call to [SCSLC in] Columbia and get things corrected. And that’s just not been our history with working with the federal government — getting things corrected very easily. That concerns us a little bit.”
What is Entrance Counseling?
Taking out student loans is a major responsibility, one most prospective college students undertake without actually knowing the ins and outs of the process. For that reason, the federal government requires entrance counseling for any undergrad who is taking out a Direct Loan, and has not previously taken out federal student loans.
Entrance counseling advises students on their rights and responsibilities as student loan borrowers. Generally, students can meet their entrance counseling requirement by taking the tutorial on the Federal Aid website. The first step should be to contact the university’s financial aid office for information on satisfying the school’s specific entrance counseling requirement.
Remember, the goal is to stay informed about your financial aid decisions. Be sure to visit Student Loan Network throughout the summer as we provide up-to-date information on federal aid, alternative loans and scholarships.
What the FAFSA? Words of Wisdom about the Financial Aid Form
In my previous post, I gave a quick run down of the types of financial aid that I can apply for to help finance my education. Applying for federal aid will be my first step, so I want to start preparing my FAFSA form.
Why do I need to fill out a FAFSA form?
In order to qualify for federal aid for students, you must complete and submit the Free Application for Federal Student Aid (FAFSA) to the U.S. Department of Education. This form is used to calculate your financial aid eligibility based on the financial and demographic information for you and your family.
Once complete, the Department of Education will forward a record of the application to the school/schools you specify.
What can I do now to prepare my FAFSA?
While the FAFSA needs to be filed with your 2010 tax information (which you won’t get until at least January of next year), it is recommended that you get a head start on gathering the right information now. In fact, most of what you’ll need for the FAFSA can be taken care of now. You can also estimate your tax information based on this years forms, however, this is only recommended if you can make a very accurate guess.
Below is a check list for what you and your family can do now to prepare early for the college financial aid application process:
Financial Aid Deadlines: Begin gathering the deadlines for your financial aid applications. Each school may have different deadlines.
Tax Information: Grab your 2010 tax forms, and anything else you are preparing for 2011 as well. You’ll receive your W2’s in February of next year and you may want to update your FAFSA when that information arrives.
Asset and Demographic Information: This where you list the financial details about you and your family, including your assets and demographic information. For help with what this will entail, visit FAFSAOnline.com and send your parents here.
School List: You can tell the Department of Education to send your results to a maximum of 10 schools. You will have to list the schools by their school code, which can be found here: FAFSAOnline.com – School Code List. When you’re looking into schools and noting their deadlines, make sure you find their code as well.
FAFSA Pin: Both you and your parents need to sign up for a FAFSA Pin #. This number will be used to identify you throughout the application process, and you can get it early and put it away in a safe place!
Ok, now go! You can download the FAFSA form now. You may file it early, but you will have to then update the forms next year with your new tax information.
Graduate PLUS vs. Private Loans
Are you a graduate student looking for something beyond Stafford direct loans and scholarships for an advanced degree? Two of your options are the Graduate PLUS and Graduate Private loans. Both tend to be overlooked but can go a long way toward helping you pay for grad school tuition and expenses.
Grad PLUS Loans
One of the benefits of a PLUS loan is the fixed interest rate, as well a set of helpful repayment options from the Department of Education’s Direct Loan program. For example, with a PLUS loan, if you are having difficulty making ends meet even with a full-time job, you may be eligible for income-based repayment which allows you to postpone repaying your loans. The Grad PLUS loan requires a credit check, but it is fairly relaxed. The yearly limit on a Graduate PLUS Loan is equal to your cost of attendance minus all other financial aid.
Graduate Private Student Loans
The best reason to apply for a private student loan is to cover a wide variety of expenses. If you need to cover tuition or pay rent, you can use a private loan. If you have extra books to buy or you need a new computer for school, you can use a private loan.
Graduate private loans, like PLUS loans, don’t necessarily require a co-signer to pass the credit check, though it is much stricter than a PLUS loan and you will want a stronger credit history in order to get a better interest rate, which will most likely be higher than that of a PLUS loan.
Sunday, October 3, 2010
Federal Stafford Loans
Federal Stafford loans first disbursed July 1, 2006 are fixed-rate, low interest loans available to undergraduate students attending accredited schools at least half time. Stafford loans are the most common source of college loan funds.
Eligibility
* You must have submitted a FAFSA to be eligible for a Stafford loan.
* For subsidized Stafford loans, you must have financial need as determined by your school.
* You must be a U.S. citizen or national, a U.S. permanent resident, or eligible non-citizen.
* You must be enrolled or plan to enroll at least half time.
* You must be accepted for enrollment or attend a school that participates in the Federal Family Education Loan Program.
* You must not be in default on any education loan or owe a refund on an education grant.
More info at Sallie Mae
N.J. Woman Charged With Scamming $200,000 in Student Loan Fraud
A New Jersey woman was arrested last week for running a student loan scam that allowed her to collect nearly $200,000 in student loans from fraudulent college loan applications she submitted over a period of four years (“U.S. Attorney: Browns Mill ‘Student’ Got $192,000 in Education Loans,” The Trentonian, Aug. 11, 2010).
La’Vada Cruse, 23, has been charged in federal court with mail fraud and aggravated identity theft.
According to the complaint filed with the U.S. District Court in Camden, N.J., Cruse applied for 92 student loans between 2003 and 2007, seeking more than $1 million in student loan funds, even though, according to authorities, she completed only two college courses in three years. Cruse applied for the student loans both in her name and in the names of people whose names, Social Security numbers, and dates of birth she used without their permission.
From those loan applications, Cruse successfully obtained 17 student loans totaling $192,000. The lenders issued the student loan checks directly to Cruse or to a nominee, and Cruse deposited the money into accounts that she controlled.
Student Loan Scam Included Fake Documents and Co-Signers
In the loan applications, authorities charge, Cruse claimed to be a full-time student at any one of six New Jersey–area colleges, and many of the applications were accompanied by a falsified college enrollment letter stating that she was a student at the school.
Federal officials later learned that Cruse completed only six credit hours of classes at Burlington County College in Pemberton, N.J., between 2004 and 2006 (“Burlington County Woman Accused of Obtaining Thousands in Fraudulent Student Loans,” The Philadelphia Inquirer, Aug. 12, 2010).
Cruse’s student loan applications also included a fake co-borrower, with fraudulent biographical, employment, and financial information. Cruse falsified letters of employment and created fake pay stubs and tax forms for the ostensible co-signers in order to submit supporting documentation with her loan applications, authorities said.
U.S. Attorney and IRS Joined Investigation
The Philadelphia Inquirer reports that Cruse came under scrutiny in 2007 after police questioned her in the parking lot of a bank in Medford, N.J., where she was sitting in a silver Mercedes-Benz E320 that contained numerous applications for student loans. In the Mercedes, police also found identification in various names and illegally obtained credit cards, according to an arrest complaint.
Medford police were called to the bank after Cruse reportedly attempted several times to withdraw money from an account that had been frozen on concerns raised by bank employees.
A local investigation grew into a federal probe that involved the U.S. Attorney’s Office, the IRS, and the U.S. Postal Service.
If convicted of the mail fraud charge, Cruse faces a prison sentence of up to 30 years and up to a $1 million fine. The aggravated identity theft charge carries a mandatory minimum sentence of two years.
From Our Forums: Am I dependent or independent?
Ah yes, the ever nagging question of dependency status on the FAFSA. We know it well. Recently one of our financial aid forum users, Ssully, posted this question in regards to that exact topic:
I’m trying to determine whether I would be considered a dependent or independent student in applying for Stafford loans. One of the determining questions asks if I will be working on a master or doctorate program. I have just earned my bachelor’s degree, and I am considering returning to school for either a second bachelor’s or teaching certification.
Since neither of those programs are considered “graduate” or “post-graduate” level, he will need to meet one of the following criteria to be classified as independent:
24 years or older (as of 12/31 of the award’s year)Be marriedHave legal dependents (be a parent or pay more than 50% of another person’s living expenses)Be a veteran of the U.S. Armed ForcesBe an orphan (both biological parents deceased)Loan Options for Less-Than-Half-Time Grad Students
Finding the time to get a graduate degree is not easy. Whether you are balancing a family, a full-time job, or both, some prospective grad students are forced to only take one or two classes per semester to accommodate their schedule.
Securing financial aid can be very difficult as well. If you are a less than half-time student, you are ineligible to receive federal financial aid.
But there are options. You can visit our private student loan comparison tool to get an overview of lender criteria.
If you have a full-time job, check with your employer to see if there are any tuition reimbursement programs. Many companies will cover some or all of an employee’s tuition if they are involved in a program that would benefit their current career path.
Finally, you can consider an online degree. Online degrees are generally more flexible with course offerings. Visit Edvisors.com for additional information about this option and to find out which online school is best for you.
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!
Understand Your Graduate Loan Options
The Wall Street Journal had a great article yesterday explaining some of the problems that graduate business schools have been facing in regards to decreased applicant and attendance volume over the past few semesters.
The author, Diana Middleton, writes:
Many full-time programs have seen a drop in applications international students, partly due to increased competition from schools abroad and because of increased difficulty securing visas and student loans.
It’s no secret that student loans are more difficult to obtain for graduate students in the past few years due to the credit crunch and slow economic recovery. However, there are more lenders and programs than ever to assist post-undergraduates with their advanced degree programs.
Between the graduate Stafford loans and GradPLUS loan offerings, there is a substantial base of federal loans available to students attending accredited, Title IV-certified academic institutions. The interest rates on both loans are fixed (6.8% APR and 7.9% APR, respectively) and allow the safety of stable, unchanging payments.
Although the federal loans have fixed interest rates, private loans have the potential to much lower. At this moment in time, I have seen APRs start as low as 2.8% (August 2010). In addition, private student loans have many benefits and incentives that are not available to federal borrowers such as co-signer release and graduation rewards.
If you want to do your research find out what is available, take some time and compare student loans.
Saturday, October 2, 2010
Check your Credit Before You Apply
The key component of being approved for a low-interest private student loan is the credit score and history of you and/or your co-signer. Depending on what your score looks like to a lender, you could see a variance of anywhere from 1 to 10% on the interest rate of your approved student loan.
Aside from checking your ability to get a loan, knowing your credit is important for a ton of other things in life such as buying a car, getting an apartment and, of course, getting a credit card. If you’re just starting out and need to build your credit, check out StudentPlatinum’s page on student credit cards.
Otherwise, do yourself a favor and check your credit ahead of time; it will save you a lot of time and frustration to have the right expectations set based on your personal financial profile.
"Rates among the best ever"
From The Detroit Free Press
Students, lock in low loan rates
Wait for July 1, but study offers carefully
BY SUSAN TOMPOR • FREE PRESS COLUMNIST • June 11, 2008
College students who rush from one thing to the next should relax the next few weeks when it comes to consolidating student loans.
Advertisement
You'll want to consolidate July 1 or after to lock in low fixed rates.
Given the credit crunch, you won't see an onslaught of lenders urging you to consolidate. So you have to hustle on your own.
If you're graduating with a bachelor's degree this spring, you might want to consolidate loans taken out as a freshman or sophomore as a way to lock in low fixed rates.
Rates among the best ever
What kind of a rate would you get by waiting?
"They're among the best rates ever," said Mark Kantrowitz, publisher of FinAid.org.
You would lock in a rate of 3.625% if you are in college or if you are a graduate who consolidates during the grace period, a 6-month window after graduation before loans must start being repaid.
That's down from 6.62%.
And if you're already in the repayment period and have not yet consolidated, you could lock in a rate of 4.25% on a Stafford loan.
Students who are already repaying variable-rate Stafford loans are paying 7.22%. Parents with PLUS loans that have a variable rate could lock in a rate of 5.125% on July 1 or after. That would be down from 8.02% now.
You can consolidate variable-rate Stafford and PLUS loans disbursed before July 1, 2006, but you can only consolidate loans that have not yet been consolidated.
Many students also have federal loans issued after July 1, 2006, and those loans already have a fixed rate. The fixed rate for unsubsidized Stafford loans, the most popular federal student loans, is 6.8%. You cannot consolidate those loans to get lower rates.
Lenders cool on consolidations
Al Hermsen, director of student financial aid at Wayne State University, said his office hasn't seen many students ask about loan consolidations this year, as they have in other years.
Loan consolidations aren't a hot product.
Sallie Mae, the nation's largest student-loan lender, announced in April that it would stop offering federal consolidation loans. All top 10 lenders that consolidated student loans no longer offer those loans, either.
Hermsen, who has two children who graduated from college this year, said he's still seeing consolidation offers pop up in the mail at his house. But he said some look like official notices from the government, and they aren't. So students should study any offers they get carefully.
One legitimate option is the Federal Direct Loan program (www.loanconsolidation.ed.gov). You can consolidate with the program, even if your school did not participate in it.
What happens if you forget
If you do nothing, of course, the interest rates on your variable-rate student loans would drop anyway July 1. But you'd get that rate for only one year. Given the concerns about inflation, it's possible that rates could go up in the future.
It could be savvy to take advantage of this huge drop in rates and lock in something low July 1 or after.
How to Get Your Student Loans Forgiven
Imagine waking up tomorrow and discovering you don’t need to pay back your federal Stafford, PLUS and Perkins loans. For many Americans, that dream is a reality, thanks to a number of programs that allow you to have some, if not all, of your loans forgiven.
Aside from applying for a loan discharge, which is available only under extreme circumstances, some career paths and post-graduate options will cover the cost of repaying your student loans. Here is an overview of some of the careers that may take advantage of those options:
Public Service Employees: If you work full time in a public service position, and make 120 payments (approximately ten years) on your loans while employed, you may be eligible to have the remaining balance forgiven. Public service positions include law enforcement officers, early education teachers, public librarians, emergency medical technicians and more.
Volunteers: Many volunteer organizations offer stipends and loan forgiveness options if you provide a certain number of hours of service. For example, AmeriCorps will offer $7400 in stipends on top of $4725 to be used toward your student loans, as well as partial cancellation of your Perkins Loan in exchange for 12 months of service. The PeaceCorps and VISTA also offer similar forgiveness options.
Teachers: Under the National Defense Education Act, full-time teachers in an elementary or secondary school for low-income families may be eligible to have as much as 30% of their Perkins Loan forgiven. Contact your school district’s administration to see which schools are eligible.
Lawyers: Sorry, the ambulance-chasers on TV aren’t eligible. But many law schools will forgive the loans of students who serve as a non-profit or public interest attorney. For more information, contact the National Association for Public Interest Law at 1-202-466-3686. Or, contact your law school’s financial aid office.
Physicians: Physicians who agree to practice for a certain number of years in economically depressed areas may be able to get some of their medical school loans forgiven by the National Health Service Corps. Check with your state agency for similar programs.
There are other options for repaying your student loans, including income-based repayment, forbearance and deferment. For more information on these options, visit our student loan repayment page.
If you are not eligible for any of the aforementioned repayment options, you might consider student loan consolidation, with can turn multiple loans (federal or private) into a low, single monthly payment and possibly lower your interest rate. For more information on student loan consolidation, visit our help page.
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Image credit: kelly ann t on Flickr.
The Difference Between College vs University
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