According to a new report by the College Board, both loans and other types of college financial aid rose in the 2009-10 academic year, although this increase in student aid was largely offset by rising college costs, which increased by about 6 percent.The College Board, in its annual “Trends in Student Aid” report, estimates that a total of $154.5 billion in student financial aid was distributed in 2009-10. Grants now comprise about 50 percent of student financial aid from all sources, both federal and private sector.In 2009-10, the average undergraduate student financial aid package was worth nearly $11,500. This figure includes more than $6,000 in grants and more than $4,800 in government-backed federal loans. Graduate students received slightly more financial assistance, on average, in the form of grants — nearly $6,400 — but also borrowed more heavily. The average graduate student took out more than $15,700 in graduate loans.GrantsCompared to student financial aid figures for 2008-09, grant aid to undergraduate students increased by 22 percent, while federal loans increased by 9 percent. The 2009-10 academic year also saw a 16-percent increase in the average federal Pell Grant award to $3,656, the largest one-year rise in the program’s history. Only about one-fourth of all Pell Grant recipients, however, qualified for the maximum grant amount of $5,350.Student LoansPrivate student loans — college loans issued by private lenders rather than by the federal government — represented about 8 percent of all loans in 2009-10, a decrease from 25 percent in 2006-07.Federal subsidized Stafford student loans made up about 35 percent of all loans in 2009-10, an increase from 31 percent in 2006-07. Unsubsidized federal Stafford student loans accounted for 42 percent of the combined federal and private student loans taken out in 2009-10, an increase of about 12 percent from 2006-07.Subsidized Stafford loans, which are available only to students who demonstrate financial need, are government-backed college loans on which the government will pay the interest while the student is in school or in a period of approved deferred payments. Unsubsidized Stafford loans are available to students regardless of financial need. Although students, as on a subsidized loan, may defer payments on a federal unsubsidized college loan while they’re in school or in certain other authorized circumstances, the student, not the government, will be responsible for paying all the interest that accrues on an unsubsidized loan during those periods of deferment.According to the College Board, about 65 percent of all undergraduate students in 2009-10 did not accept Stafford loans of any type. The majority of students who did accept Stafford college loans ended up taking out both subsidized and unsubsidized loans. The average Stafford student loan debt load in 2009-10 was $6,550.In 2008, Congress authorized increases in the maximum annual and lifetime federal lending limits for Stafford student loans. The expanded loan amounts were approved in part to discourage students from taking on the burden of private student loans, which tend to carry higher interest rates and fewer borrower protections than federal loans.Currently, dependent undergraduate students can borrow up to a maximum of $31,000 in Stafford college loans throughout their undergraduate college career. Independent undergraduates, as well as dependent undergraduates whose parents do not qualify for a federal parent loan, can borrow up to a maximum of $57,500 in Stafford college loans.Graduate students may also be awarded both subsidized and unsubsidized Stafford student loans, up to $20,500 a year and up to a total lifetime maximum of $138,500, including both their undergraduate and graduate Stafford loans.
One of the worst decisions that a person can make when going to college is to take out too many college loans. They are easy to get and people can forget that later on, years or months later, they will have to pay them back. One of the things that accrue is interest. Here is a way to avoid paying a substantial portion of the interest.When you go to get college funding, you will have many options. One of them is to apply for the Pell Grant which is generally given to all people that are at a lower income level. As long as you apply on time; you can get most or all of this funding.If you do not qualify, your next best choice is to apply for scholarships. These are popular and useful, but can take a great deal of time to complete. The forms tend to be lengthy and most people do not have the patience to get them done and send them in for evaluation.For those that need funding, but cannot get any right away, you can take out student loans. These are very handy. You walk into the financial aid office, and if you have completed the FAFSA on time, they will automatically know how much you will be eligible for.The problem is that once you take out the loans, you do not realize that the interest, usually around 8%, is going to start to accrue as soon as you are out of school and sometimes even before.The best way to save you thousands of dollars over time is to pay off the small amounts of interest that can be paid off early. This way, that money does not compound over time.You will get these statements in the mail every month. Once you receive them, send in the few dollars that they are asking for. This way, you are up to date and your principle amount will remain the same.Over all, there are many better choices than taking out a student loan, but if you are forced to, then make sure that you take care of the interest before it makes the amount you owe too large to handle once repayment begins.
Financial Solutions For Cash DebtsWe have now the modern financial solutions and a better alternative than what the majority is using, the credit cards. We refer here the use of home equity line of credit. Opting for the home equity line of credit can be clever for your home’s equity to finance such as home improvements, paying off high-interest debt, or buying of a second home.Home Equity Line of Credit (HELOC)This is known to be a type of second mortgage. It is very similar to the way how credit card works but as claimed, can be a better alternative. You can us it as the collateral for the loan and you receive a line of credit from which you can draw money.Advantages in Home Equity Line of Credit1) Lower interest rates – not the same as with the credit cards, you can obtain lower interest rate in which you pay less interest over the life of the loan.2) Tax – deductible – with HELOC, you can subject for some tax advantages which is not available with credit cards. The home equity line of credit’s interest is commonly tax-deductible while credit cards are not.3) Flexible payment options – some lenders have options we call interest-only that help your payments to be more flexible. And so with the interest-only home equity line of credit, you have the option to pay only the interest for a pre-determined amount of time or pay interest plus as much or as little principal as you want.4) Larger credit limits – some lenders offer home equity lines of credit which have higher credit limits. And when you have higher credit limits, you can also make larger purchase or adding an addition to your home.So it’s now time in turn into making use of that home equity loan you have. This is a very beneficial financial solution that can support your cash credits.
Education holds importance in everyone’s life. Well everyone wants to get educated and seeks a bright career. But getting good education is not possible for all due to some financial constraints and many of children remain deprived off. For those who can not meet educational cost don’t have to worry anymore about finances when cheap college loans are there to help you.These loans offer financial assistance to college students so that they can meet their expenses effectively. With the funds you can easily pay off medical expenses, college fee, library fee, admission fee, accommodation, food expense, buy stationary or deal with such expenses.These loans can be procured in secured and unsecured form. Secured cheap college loans can be entailed by pledging your valuable asset as security. You can provide your house, car or valuable documents as security. The loan amount offered is huge and depends on value of collateral. If you can not pledge your valuable asset or have nothing to offer then unsecured cheap college loans are an ideal solution for you. The loan amount depends on your course fee, repaying ability and financial standing.These loans offer a repayment break of 6-9 months after the completion of the course. You can try and find a job during this period so that you can start repayment as soon as possible. To start the repayment you must start earning minimum salary required of £15000 per annum.Cheap college loans are a good financial option as they are provided at lower rates of interest. This enables students to easily repay the loan amount on time without any burden of higher interest rates.Bad credit students are also eligible for college student loans. Those facing bad credit like CCJs, IVA, late payments, bankruptcy, missed payments and defaults are acceptable. Now they can fulfill their educational requirements easily.
Big banks that offer private-label college loans are facing new competition from credit unions that are looking to issue their own private student loans.Credit unions, in increasing numbers, are developing partnerships with private loan companies like Sallie Mae and Credit Union Student Choice to deliver private loan products to credit union members. In one such agreement, Southeast Corporate Federal Credit Union, which itself has more than 400 member credit unions, will offer private student loans through Sallie Mae.Private loans, non-federal education loans issued by banks and private lenders, are designed to assist students who have exhausted their federal loan options. Private loans can be used to cover up to 100 percent of a student’s approved educational expenses.Credit Unions Offering Flexibility in Student Loan ProgramsSome credit union private loan programs are being structured to appeal to families with more than one student in college by enabling parents to make multiple withdrawals on a single line of credit worth as much as $75,000. In addition, credit union-backed student loans are eliminating loan origination fees and offer both in-school loan repayment and deferred, post-graduation repayment plans.In-school repayment options enable students to reduce the overall amount of interest their private loan accrues before they graduate. According to Sallie Mae, students who begin college loan repayments while still in school can reduce their student loan debt by 30 to 50 percent over traditional college loan payment plans, which defer repayment until after a student has graduated or left school.Investors Looking to Private Student Loans’ Long-Term GrowthThe prospects for private loan companies and college loan securitization are improving marginally. The National Credit Union Administration (NCUA) recently sold a bond worth nearly $1.2 billion that was backed by student loans, after previously relying on commercial and residential mortgages to secure its bond sales.Credit rating agencies are less sure that private student loan companies represent a good risk; however, many analysts remain optimistic about the long-term investment potential of private loans.Fueling investor confidence in the longer-term prospect of the private student loan market is the growing demand for student financial aid as record numbers of students are entering college each year.Federal Budget Cuts May Pave the Way for More Private Student LoansIndeed, private loans may gain market share in a more immediate future than analysts had been predicting.On Capitol Hill, the U.S. Senate is currently struggling to pass a continuation of its earlier spending authorization to fund the Department of Education’s federal Pell Grant program, which awards government-issued college grants to financially needy and lower-income students. The current authorization expires December 18.If the Senate fails to reauthorize the funding proposal at its current level, students who are eligible for a Pell Grant may find their Pell Grant award reduced or eliminated. With less Pell Grant aid available to them, many of these students would then need to take out more money in student loans in order to pay for college and complete their degree.Congress is already considering elimination of the Pell Grant program altogether, as recommended by President Obama’s National Commission on Fiscal Responsibility and Reform.The bipartisan panel, which recently forwarded its final report to Congress, recommended that the federal government reduce federal education grants based on a student’s pre-college family income in favor of more government-issued college loans, which would need to be paid back, replenishing the government’s coffers, and that would be more attuned to a borrower’s post-graduation earning potential.However, spending appropriations for an expanded federal loan program may face stiff opposition in the Republican-led House of Representatives.As Congress wrestles with the funding needs and long-term future of both federal grant and federal student loan programs, private loan companies are positioning themselves to fill in any emerging federal financial aid funding gaps.private college loans: http://www.nextstudent.com/private-loans/private-loans.asp
Consolidating your government college loans can be both an advantage and a disadvantage. Are you thinking of combining your loan debts for a better repayment process?The fact that you’re trying to look for the best way to pay off your debt is a good thing. However you have to make sure that your decision is the right one for your current situation because this also has a huge impact to your future.What are the benefits of consolidating your government college loans?1. Your federal interest rate is lowered2. You can extend your repayment term3. You can choose from different repayment plans including Standard, Extended and Graduated plans4. You get to pay only one loan every month5. You don’t have to pay a fee when consolidating federal loans6. No credit checks and pre-payment fees7. It is much simpler to apply for federal consolidation than private bank consolidationWhat are the disadvantages of consolidating your government college loans?1. Consolidation will void special borrowers’ benefits if you have a Perkins Loan.2. Consolidating your debts will void the six month grace period. You will be required to repay immediately.3. If you have accumulated a large amount of loan debts, you may end up paying thousands of dollars more than the original amount of your loans. This is because of the extended repayment period. The longer you repay your debts, the more you pay in terms of interest.4. If you have paid most of your loan already, there is no sense in consolidating your debts. You are better off paying your debts the same way you’re doing it.
It’s not an easy time to be graduating from college with student loans. With the unemployment rate soaring toward 10 percent and the average starting salary for college graduates down 2.2 percent this year, student loan borrowers – whose average debt from student loans tops $22,000 – are now having an even tougher time affording their student loan payments.The good news? Starting July 1, 2009, graduates with federal college loans may be able to qualify for a new government program that can reduce the monthly payments on their student loans based on their income.Income-Based Repayment for Federal Student LoansThe income-based repayment program, created by Congress in 2007 as part of the College Cost Reduction and Access Act, will cap a borrower’s monthly student loan payments at a percentage of her or his income, when the borrower’s income is at least 50 percent higher than the current federal poverty line for the borrower’s family size.These income-based student loan payments will be calculated as 15 percent of the amount by which a borrower’s adjusted gross income exceeds 150 percent of the poverty line.(For individuals, the 2009 poverty line is $10,830 in all states except Alaska and Hawaii. The complete federal poverty guidelines for 2009 are available on the website of the U.S. Department of Health and Human Services.)For example: 150 percent of the current individual poverty line of $10,830 is $16,245. If a borrower’s annual adjusted gross income is $25,000, the monthly payments on her or his eligible student loans would be capped at $109.44 – 15 percent of the difference between $25,000 and $16,245, divided by 12 months. If a borrower’s annual adjusted gross income is $40,000, the monthly payments on any eligible student loans would be capped at $296.94 ($40,000 – $16,245, multiplied by 15 percent, divided by 12).Income-based monthly payments will be adjusted annually, based on a borrower’s federal tax return from the previous year. As a borrower’s income rises, the income-based repayment cap will also go up. If the income-based repayment cap reaches a level higher than what a borrower’s monthly payment would be under a standard 10-year student loan repayment plan, the borrower will no longer qualify for income-based repayment for her or his student loans.Borrowers whose adjusted gross income falls below 150 percent of the poverty threshold won’t be required to make any payments on those student loans that qualify for income-based repayment.Even if no payments are due, however, interest will continue to accrue on those college loans . Unpaid interest will also accrue if a borrower’s income-based monthly payments aren’t sufficient to cover the full monthly interest on the qualifying college loans. Any accrued unpaid interest will be added to the student loan principal and capitalized when the borrower no longer qualifies for income-based repayment.Subsidized Interest and Student Loan ForgivenessFor those borrowers who hold subsidized student loans or a federal consolidation loan that included subsidized Stafford loans or Perkins loans, the government will cover any unpaid interest on those subsidized loans (or on that portion of a student loan consolidation that’s comprised of subsidized loans) for the first three years that a borrower is in income-based repayment.The longest that a borrower can remain on the income-based repayment plan is 25 years. After 25 years of income-based payments, the government will forgive any remaining principal and unpaid interest – although borrowers should note that under current tax law, this forgiven student loan debt would be taxable.Borrowers who are employed full-time in qualifying jobs in the public service sector may have their remaining student loan debt forgiven after just 10 years in the income-based repayment program, and this forgiveness would be tax-free, thanks to a ruling from the U.S. Treasury last year.Qualifying for Income-Based RepaymentTo find out if you qualify for income-based repayment on your federal college loans, you’ll need to contact your lender and provide information about your financial situation – you’ll need to demonstrate “partial financial hardship,” as defined by federal regulations.Only federal Stafford and Grad PLUS student loans in good standing, along with consolidations of these college loans, are eligible for income-based repayment. Federal Perkins loans are eligible only if they’ve been included in a federal student loan consolidation. Other college loans are ineligible:Private student loans. The income-based repayment program applies only to federal student loans. If you’re having problems meeting the monthly payments on your private student loans , you should contact the lenders to see if they’re willing to work out more affordable repayment plans for you. Keep in mind, though, that private student loans typically have less flexible repayment options than federal student loans.Federal PLUS loans. If your parents took out PLUS parent loans to help you pay for college, they won’t be able to take advantage of income-based repayment on their PLUS loans. Consolidation loans that included PLUS parent loans are also excluded from income-based repayment. Any Grad PLUS loans you took out as a graduate student, however, as well as consolidations of Grad PLUS loans, are eligible.Defaulted student loans. Your student loans don’t have to be new to be eligible – even long-time graduates may be able to qualify for income-based repayment on college loans taken out years ago. But you can’t be in default on your loans. To qualify for an income-based repayment plan, any federal college loans you have in default will need to be rehabilitated first.
As the U.S. Department of Education considers linking colleges’ and universities’ eligibility for federal student financial aid to the school’s student loan repayment rate, some analysts are looking at just how large the student loan default problem is and what might happen if new college loan repayment rules take effect in 2012 as expected.Defaults on college loans can be measured in a number of ways, but one of the most common measures of default is the official cohort default rate, defined by the Department of Education as the percentage of a school’s student loan borrowers who enter repayment on certain federal education loans “during a particular federal fiscal year, Oct. 1 to Sept. 30, and default or meet other specified conditions prior to the end of the next fiscal year.”In other words, the cohort default rate is the percentage of borrowers who enter repayment on their federal loans and then either stop making payments on their loan debt or never make payments at all during the 12-24 months after entering repayment.Student Loan Default Rates vs. Repayment RatesGovernment analysts now want to look more closely not at schools’ default rates on federal college loans but at schools’ repayment rates on those loans.Consumer and student advocates have long argued that the cohort default rate, as currently measured, severely underrepresents the proportion of a schools’ students who are struggling with college loan debt by looking at only an initial 24-month period. The two-year snapshot, these critics maintain, misses a large swath of students who are able to muddle through making their payments for the first couple years but then begin defaulting in the third and fourth years of their repayment periods in accelerated numbers.The default rate also fails to take into account those students who aren’t able to make payments on their college loans but who aren’t considered to be technically in default because they’ve arranged for a student loan debt management plan that permits them to put off making payments on their federal college loans.In proposed rules that would regulate a school’s eligibility for federal student aid, the Department of Education would consider a school’s college loan repayment rate and not simply its default rate, as current regulations do.By expanding its institutional financial aid eligibility rules to include student loan repayment rates, the Education Department would be looking at how many students simply aren’t repaying their student loans — not only counting borrowers who have defaulted, but including those borrowers who are in a legitimate deferred repayment plan or approved forbearance period that allows them to temporarily forgo making their federal student loan payments.The Student Loan Debt Problem, as Measured by Repayment RatesEarlier this year, the Department of Education reported that the national cohort default rate was 7 percent for the 2008 fiscal year, the last year for which repayment data are available.Looking at repayment rates, on the other hand, while also expanding the time span over which student loan repayment is measured, yields a far larger non-payment rate among college loan borrowers and paints a truer picture of the size of the inability-to-repay problem among student loan borrowers.The Department of Education estimates that in 2009, among alumni of public universities who carried federal student loan debt, only 54 percent of those who had graduated or left school within the last four years were in repayment on their federal student loans — a far cry from the 93-percent national non-default rate of 2008.The four-year repayment rate was marginally higher for students at private nonprofit universities, at 56 percent. Perhaps predictably, the repayment rate among alumni of private for profit colleges was substantially lower — just 36 percent over four years.These figures come from a new repayment database that the Department of Education will use to track government-issued loans, from the time they’re issued until the time they’re paid off. The database can also track what happens in between.By looking more carefully at each loan’s entire lifespan, the Education Department hopes the database will help identify the point at which borrowers first begin to show signs of trouble repaying their federal college loans.Schools’ Student Loan Problems Could Mean Loss of All Financial AidAs the government’s proposed financial aid rules are currently worded, the new rules would allow the Department of Education to impose financial aid restrictions on schools whose overall student loan repayment rate falls below 45 percent.Schools that have a repayment rate of lower than 35 percent would face the loss of federal student aid altogether.Using the Education Department’s 2009 data, more than half of the higher education institutions in the United States would face some type of federal loan sanctions if the proposed financial aid rules were in effect today, and 36 percent of post-secondary institutions would be barred from offering federal student aid for a period of at least two years.However, the proposed new Department of Education rules will also allow schools to report student loan repayment rates separately by program. By segmenting out repayment rates by program, institutions could avoid school-wide federal financial aid sanctions, leaving intact federal student aid for academic programs whose repayment rates are within the established guidelines, while still receiving sanctions for programs whose graduates consistently fail to make payments on their federal college loans.Student loans: http://www.nextstudent.com/, student loan default rates by school: http://www2.ed.gov/offices/OSFAP/defaultmanagement/cdr.html
Federal plus college loans are one of the most economical and affordable ways to stretch out your college payments. Their popularity stems from a user friendly approach to college loans in terms of affordability and practical usability.The most beneficial aspect of federal plus college loans is the low interest rates that are afforded to you with your federally guaranteed loan. In addition to this, the entire cost of tuition can be borrowed with a federal plus college loan. This includes the full cost of tuition, as well as accommodation and lodging, textbooks, travel, laboratory fees (if applicable) and also college supplies. Because college expenses do not begin and end at tuition, the federal plus college loan is extremely viable as a number one choice for students needing financial aid.You need not be in financial distress or have to display a need for extra funding to apply for a federal plus college loan, however a decent credit history is a pre-requisite for successful application. Another mandatory factor that needs to be in place before application is the students’ enrolment in at least a half time course at an eligible college that accepts federal plus college loans.Some schools have different policies with regards to accepting students with federal plus college loans, so it would be a wise move to check with them first to ensure you have all the necessary criteria in place.A credit check will be carried out against your name to ensure that you are eligible for a federal plus college loan. This credit check is obligatory and will exclude you from application if you have any accounts that are outstanding over 90 days, or if you have a Title IV debt against your name within the last five years.Federal plus college loans are available through most authorised financial services providers, and all you need to do to apply for one is to contact them online, by telephone or by making a personal visit to their offices.Some of the better known financial institutions offering federal plus college loans are listed below. You will be directed to their websites by clicking on the links and will be able to apply for or enquire about federal plus college loans while there:
Seeking college loans online? Today, more than ever, the Internet plays a vital role in enabling students to apply for college loans from the convenience of their homes and personal computers.Whether you’re seeking a Federal Stafford Loan, Connect Loan, Federal PLUS Loan for Parents, or State College Loan; the World Wide Web offers a plethora of advantages to the potential student by enabling ease of access from virtually anywhere.College loans are presently the largest type of financial aid for students, contributing over fifty percent (50%) of annual total aid awarded. College loans are based on two formats: financial need vs. non-financial need. While the federal government is the main provider of financial need college loans, such as the Perkins loan; it offers a low interest rate at just five percent (5%). Additional college loans, like the subsidized Stafford and Direct loans currently offer an even lower interest rate at a mere 4.7%. Federal student college loans do not require a credit check; and as an additional bonus, payments on principal only become due upon successful graduation (there is often a 6-month grace period after leaving school).Some non-need based college loans, such as the unsubsidized Stafford or Direct Loans; PLUS loans for parents – which are facilitate by parents to borrow up to the total cost of education; and other private and alternative college loans.Most college loan applications are now offered online and over the phone as well. Upon application submission and after the applicable college loan has been approved, monies are sent to the student’s college of choice. As a quick, convenient way to begin your pathway to your desired education, an online college loan can be your first step toward success!If you are interested in learning more about online college loans and other programs of study, search our site for more in-depth information and resources.DISCLAIMER: Above is a GENERAL OVERVIEW and may or may not reflect specific practices, courses and/or services associated with ANY ONE particular school(s) that is or is not advertised on SchoolsGalore.com.Copyright 2006 – All Rights Reserved
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