Tag Archive | "Student Loans"

Basic funding options

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Ever since good old Tony Blair introduced the new fees and scraped the maintenance grants, the prospect of going to uni has never been the same… you guys have the extra weight on your shoulders of mounding studying costs… but does it have to be that way?

We’ve got a handful of tips and routes through which you maybe able to acquire additional funding to get you through the next 3/4 years… so then, here we go…

Tuition fee support: you’re parents (or spouse if you’re hitched already) will be individually accessed to find out how much of your year fee’s your eligible to pay… if they don’t earn enough and they’re below the threshold, they’ll be paid by your local LEA (Local Education Authority).

Student loans: These aren’t like any other loan you’ll be offered in your life… these extra low interest rate loans are the governments solution to the scraped maintenance, and are usually the best (sometimes only) option to help fund you through the academic year… you don’t start paying them back until the April after you graduate, but be prepared for the balance sheet that will drop through your letter box at the end of your study!!!

Hardship loans: If you get through your usual instalments of your student loan, each uni has access to a pot of money for when you get really hard up! If you have bills you can’t pay, and can prove this through your bank statements, usually with your outgoings exceeding your income… normally you’re entitled to a maximum of £500.

A trip through the inner workings of the student loan system

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As exciting as graduation is, there is nothing quite like the adrenaline rush you get six months and 45 days later. Why six months and 45 days? That’s when your first student loan payment is due. If your experience is anything like most, the adrenaline is due more to anxiety than pleasure.

But paying back your student loans does not have to be nerve-racking.

Take the stress out of repayment by being smart. Know how the student loan system works, and come up with your own strategy. Before starting out, always remember that your lender wants to help you pay back the loan. Defaulting on a student loan or being delinquent is not a good idea – it will damage your credit history and prevent you from getting future loans, cause great aggravation, or even worse, prevent you from getting a job that requires a credit check. It’s also bad for the lender. They would like their money back. That’s why they are always willing to work with you in developing a repayment schedule that is satisfactory to everyone.

There are various ways that lenders can structure your payment schedule:

  • Loan Consolidation. Another option for easing the repayment burden is loan consolidation. Simply, you are combining all of your student loans into one. This simplifies the payment process, and it can also reduce your monthly payment. Your lower-rate loans will be combined with higher-rate loans to determine an average interest rate – this can work either to your advantage or disadvantage, so make sure you do the math. Evaluate the trade-offs and decide what is best for you. For more information, contact the student loan consolidation program at 1-866-311-8076 
  • Fixed Repayment Plan. The first option is a fixed repayment plan. Under this plan, you would pay the same amount each month for the life of a 10-year loan. You’ll know exactly how long it will take to get rid of the loan, and the amount of interest you will pay is absolutely predictable.
  • Graduated Repayment Plan. A graduated repayment plan works on the assumption that your ability to repay a loan will increase as your wages increase. With this plan, your minimum payments start out low, but then increase every two years. You can stretch out the payments until you can afford to pay more.
    There are no penalties for paying off your loans ahead of schedule. No matter which payment plan you are on, you can always pay more than the minimum, if you can afford it.
  • Income-Contingent Plan. If you are really strapped for cash, you may be able to get an income-contingent repayment plan. Here, your lender looks at your adjusted gross income to come up with an appropriate payment schedule. For this route, you’ll need to demonstrate a real financial hardship, but don’t be afraid to pursue this plan if you need help.
  • ADDITIONAL INFO:

    FinAid

  • Deferment. It is possible to postpone paying off your loans for a specific period of time. You become eligible for a deferment if you go back to school (a tempting reason to go after an advanced degree and pile up more loans), have a temporary disability or lose your job. There may be other qualifying events, so always consult your lender. It is your right to defer your loans, if you can prove that you qualify.
  • Forbearance. Like deferment, forbearance allows you to push off those payments. However, you do not have an automatic right to a forbearance. A forbearance allows you to postpone payments for a period determined by your lender, generally 18-24 months. A forbearance is usually granted in cases of economic hardship where a deferment does not apply. You may have to demonstrate financial problems, and reapply every six to 12 months.
    In both cases, you will be responsible for the interest that accrues. If you have a Subsidized Stafford Loan,the federal government will pay the interest during the deferral period, but not if you have a forbearance. You have the option of paying only the interest during either deferral or forbearance. This will reduce the total amount you have to pay back at the end of the postponement period. Or, you can allow the interest to accrue.

The most important part of your repayment strategy is organization. Keep records, and hang on to everything your lender sends you. Open correspondence from your lender promptly. Phone immediately if you don’t understand what they sent you. Notify your lender of pertinent changes in your life, employment status, or address. Remember, they want to help you.

College Rebate Programs

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With school loans, rent and other bills to pay just when you’ve started to earn real money, you may be wary of affording a new car. However, if you need a new set of wheels, now is one of the best times to approach car companies because many offer special deals that are only available to recent grads.

The most eye-catching deals are rebates — they offer an immediate cash discount on your purchase. Ford, GM, Hyundai and Mazda offer a generous $400 rebate on a variety of vehicles. To take advantage of these deals, you need only to have graduated from an undergraduate or graduate program within the last couple of years.

Not all dealerships offer these rebates or incentives, however, so once you’ve narrowed down your model choices, it’s a good idea to log on to a car manufacturer’s home page to find your nearest participating dealer. Once you find a dealer, you must be able to prove that you are a graduate (or soon–to–be graduate) of an accredited program (a copy of your diploma or transcript should suffice).

The next step is to consider your various financing options and determine if you qualify. Some car manufacturers, for example, offer financing and leasing eligibility to those who have graduated within 120 days of purchase or can prove they can still swing a car payment after rent, student loans, etc.

Finally, consider the benefits of a “no down payment” offer. Combined with a rebate, this option can free up some cash and make those first couple of monthly payments easier.

If you’re still confused, cars4grads.com is a great website that has compiled information on all the college rebate programs offered by car companies.

Remember, don’t be intimidated — car companies want your business and are eager to make your first purchase a pleasant experience. Just think carefully about what you can afford and you’ll soon be driving off in that dream car with your financial security still intact!

Cars4Grads.com

Cars4grads.com is a service created just for graduates and makes the process of searching for car rebates and special offers fast and painless. It’s like a personal search engine for the various rebate programs available to college graduates and, best of all, it’s free.

If you are about to graduate or have recently graduated and are thinking about buying a new car, you may be eligible to receive up to $750 in cash rebates, just for being a college grad! However, figuring out which car manufacturers have these offers and other discounts can be a time consuming and tedious process.

All you have to do is tell cars4grads.com a little bit about yourself and the cars you’re interested in, and they’ll match you up with deals that you’re eligible for. The process only takes a few minutes and you could save a lot of money.

Hurry Up and Consolidate!

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If you’re swamped with student loans, now might be the best time to consolidate to a fixed-rate loan to save money down the road. The reason? Interest rates are rising, and the government is mulling changes to the law that could make it impossible to get a fixed rate in the future.

The federal student loan rates are adjusted annually every July 1, and have been rising along with the Federal Reserve’s federal-funds rate. This rate, which is currently 3.25 percent, is projected to continue rising.

Although student borrowers can still consolidate their loans and receive a relatively low fixed interest rate, Congress could soon change this practice.

Under Congress’s proposed legislation, student loans could still be consolidated, but they would be consolidated with an adjustable rate – instead of a fixed rate – that could go as high as 8.25 percent. The government pays the difference between the student-loan rate and what the lenders charge when the rates rise, so the proposed change would save the government some money by passing on some of the cost to the student borrower.

The best rate interest federal student loan borrowers can get rose from 2.875 percent for 2004-2005 to 4.75 percent on July 1, 2005 for the 2005-2006 fiscal year. While it’s impossible to know what the future will hold, current college students and recent gradates should seriously consider consolidating their loans now to reap the rewards from the still relatively low rate. In the 1990s, student loans came with an interest rate of more than 8 percent.

Save thousands on student loan repayments by consolidating

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If you are about to graduate and have student loans, be sure to act now and consolidate your loans into a single loan with one lender in order to benefit from additional savings. Only graduates still in their grace period can reduce their interest rates on eligible loans by 0.60% – which could save you thousands. Register with the Student Loan Consolidation Program, to take advantage of the lowest interest rates in history, and lower your repayments by up to 54%.

The Higher Education Act, established by Congress, allows any graduate (or parent with PLUS loans) to consolidate their student loans by combining all their eligible loans into a single loan issued by a new lender. The Student Loan Consolidation Program offers the best overall borrower benefits and service available to grads. Consolidation is free, and there are no penalties for early repayment.

Put money in your pocket and reduce your monthly repayments. Consolidating your student loans is one of the smartest things you can do.

  • Click here to see if you qualify
  • Or if you prefer, contact a loan counselor at
    1-866-311-8076

Student Loan Forgiveness

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While you may not be able to convince Uncle Sam to entirely forgive and forget your accumulated debt, he might be able to help you find some ways to reduce some of those financial woes.

Tired of paying off your student loans already? Wishing that they’d just go away? Since that’s unlikely to happen and wishful thinking is probably not going to take care of your debts, you’re better off looking for some alternatives to help you either pay off or significantly reduce those loans. After all, this money put you through college, it would be downright indecent and unethical not to pay up.

That said, reducing the principal on your loan will most likely involve the bartering of your services to any one of several organizations. By performing volunteer work, teaching in certain locations and/or in certain fields, or by providing legal and medical services, you can chip away at that loan debt.

Here are several options to reducing your debt:

  • Americorps. The domestic arm of the Peace Corps offers up to $7400 in living stipends and about $4725 in education awards to be awarded upon completion of a year’s worth of successful service. The education award can be used for either college tuition or it can be applied to paying off student loans. While the work can be incredibly rewarding – from helping clean the environment to helping at-risk youths the stipend gives you roughly $616/month to cover housing and all other living costs. If you’ll be covering other expenses while you’re trying to reduce those loans (car payments for example), you might want to consider other options.
  • Peace Corps. This organization specializes in overseas projects in any number of developing countries. Conditions can be rough but the rewards can be innumerable. Volunteers that have outstanding Perkins Loans can receive a 15% cancellation on the debt owed for each year of their first two-year service term and a 20% loan cancellation for their third and fourth years of service. You can receive up to a 70% cancellation on your Perkins loans. Deferments on student loan payments while you’re in the Corps can also be arranged for the term of your service for the following loans: Perkins Loans, NDSL loans, Federal Direct Loans, Federal Consolidation Loans, and Stafford Loans. While the Department of Education will pay interest during the deferment period for subsidized Stafford Loans and Consolidation Loans that consolidate only subsidized Stafford loans, you must pay interest payments on the following unsubsidized loans during your service: Stafford Loans, Consolidation Loans that include unsubsidized loans, and Direct Loans. Also, it’s important to remember that in order to defer payment on any of these loans, you must contact the lender to make arrangements. Further information on specific loans and their repayment/deferment processes can be found on the College Students Guide section of the Peace Corps website.
  • Military. Service in the military may qualify you for financial assistance for college tuition. Students who serve in the Army National Guard, however, may be eligible to receive up to $10,000 through their Student Loan Repayment Program. The best way to find out about the program and your eligibility is to call your local recruiter.
  • Teaching. You can be eligible for cancellation or deferment of certain loans if you teach in designated school systems. To qualify, these teachers must:
    • For Perkins/NDSL loans made on of after July 1, 1987, teach in an elementary or secondary school that serves low-income students.
    • For Perkins Loans made on or after July 23, 1992, teach in an elementary or secondary school system with a shortage of teachers in a certain subject area
    • For Perkins/NDSL loans made on or after July 1, 1987, teach disabled students in a public or other nonprofit elementary or secondary school.

    If you qualify to teach under any of the three conditions listed above, you may qualify to have up to 100% of your loan reduced in proportion to how long you teach. You can have 15% of your loan cancelled after your first and second years of service, 20% after the third and fourth years, and 30% after your fifth year.

  • Legal and medical studies. Studying medicine or law can mean incurring thousands (and sometimes hundreds of thousands) of additional dollars of debt. Some law schools provide loan forgiveness to those students who serve in the public interest and or work for non-profit organizations. The National Association for Public Interest Law has an extensive site that provides the nitty gritty on the qualifications and conditions you must meet in order to receive the cancellations. Along the same lines, the National Health Service Corps offers forgiveness programs to doctors who practice in regions that lack adequate health care. In some areas, hospitals and private healthcare facilities use loan forgiveness as a recruiting tool for hiring occupational and physical therapists.

You don’t have to be in debt forever – or at least, a good portion of your adult life – if you’re willing to take on any of the activities detailed above. Do a little research and you might find some rather interesting ways to help pay off that loan.