Student Loans – How Interest Rates Are Set on Federal Loans

You’ve got to take on student loan debt these days if you want to go to college unless you are very lucky. Student loan debt is like any debt. The key to how quickly you can pay it off often comes down to the interest rates. For people with federal loans, the good news is interest rates are quirky in a positive way.The economic condition of the United States is supposedly in a recovery from the Great Recession we recently suffered. With business slow and unemployment in double digits, it is hard to make much of an argument that this recovery has really hit most of us. As we stagger forward, things will improve slowly, but a fiscal accounting must take place. That accounting is going to come in the form of higher interest rates.We have interest rates that are so low now that we’ve rarely seen such an economic condition in our history. The Federal Reserve essentially is loaning out money to banks at a zero interest rate. That can’t last. When it changes, rates are going to move up and so are your debt loads. For those with fixed rate loans, the news will mean little since rates will stay the same on the debt in question. For those with adjustable rates, things are going to get ugly.What about federal student loans? Well, I have really good news if you are carrying federal student loan debt. The rates on your loan are not set by the market or some cold bank per se. Instead, Congress actually sets the rates on your loans. The legislative body actually sets a range of rates that can be charged for each loan, but the banks actually issuing the money always [and I mean always!] go with the highest possible allowed rate. The rates can change year to year, but are usually much lower than private loans and such. You can access the current rates for Perkins, Stafford and PLUS loans at the website for the Department of Education.Like all debt, the interest rates on student loans are going to be going up in the next few years as the Federal Reserve raises rates in general. If you have federal loans, you can expect the pain of these increases to be much smaller than with private loans.

Student Debt Consolidation – Repayments Made Easier

It is a blessing for a student if he can make an easy and regular payments of his student loans; this only means his road to pursuing his college degree can be done with a lot less stress and hindrances. However, this is not usually the case for many borrowers. More often than not, monthly installments are not paid late, if not paid at all. Hence, with the number of loans that a borrower has to worry about every month, he has to decide fast and just get a student loan consolidation to take care of his financial woes. Consolidation means merging the old loans, turning them into one cheap monthly payment. Via this road, you find yourself taking care of a much easy-to-pay new debt and at the same time, ridding of the multiple loans that had created for you financial havoc all this time. And with the elimination of the old debts, you are in effect erasing the problem of dealing with the high interest rates that go with them.However, students must be careful about getting student debt consolidation. It should be emphasized that there are two types of college loans, the private and the government ones. If it so happens that you have both these types under your names, it is a must that you consolidate your loans into two groups – private and federal student loan consolidation.All kinds of government loans such as Perkins, Stafford and PLUS Loans should be consolidated under a government student debt consolidation loan. Why do we need to separate the federal from the private when consolidating? This is because the federal loans have lower rates of interest? If in case, they are consolidated together with the private ones, the advantage of having low rates will be disregarded. While your old government debts have different payment schedules and terms, once they are consolidated, there will only be a single repayment schedule leading to a much easier management of your debt. On the other hand, private debt consolidation loan should be employed when we want to merge private debts, and such loan can be availed as either secured or unsecured. Always remember, federal and private loans never mix as far as debt consolidation is concerned.

Student Loans and the Financial Crisis

With the financial crisis nowhere in sight to get better would eventually hurt or jeopardize how you can borrow money for your education. Student loans from some sectors would feel the effects of this global financial crisis. With the ongoing finance and economic crisis and the Federal Reserve pumping out billions or probably trillions of dollars into Wall Street, it is bound to affect student loans and how you can borrow money for your education. The financial sector was hit the hardest since the mortgage collapse and money going in or out of these financial institutions is out of the normal.The crisis or the recession started with the housing and mortgage collapse leaving many people to file for foreclosures and bad mortgage loans. You really do not need to be a rocket scientist to know that the effects are paramount and gargantuan in scope. It affects the entire world. And to avert further crisis and get the big finance companies afloat the federal reserve infused an initial seven hundred billion dollars to stave off a nose diving economy. The US government address the crisis by enacting a bail out for the troubled banks and finance companies.Because these banks are the issuer of most of these student loans it may have some ramifications. The banks that are in trouble are the ones doling out these student and educational loans to students. So there is the potential that this could affect how you can obtain student loans for your books and tuition fees. But luckily for some, there is good news as the Stafford Loans under this program will not be affected because it is guaranteed by the governments education department. This is welcome news as most people and parents who wanted to borrow money for their children to go to college will not be affected.But some other forms of educational borrowing may get affected as these banks are having more stringent policies on who can apply and qualify. One case in point is those foreign students who may have a hard time with their budget and cash flows. The rising cost of fuel and food make it harder for foreigners to cope money wise.In some parts of the world the financial crisis does have some effects on student loans. For instance, in Canada they have a program called CanHelp which is a financial aid group that helps Canadians who would like to obtain college loan. The problem with CanHelp is that it is backed by the troubled bank Wachovia Corporation from North Carolina. This bank was eventually taken by Wells Fargo. Needless to say the funds that was flowing to this program suddenly stops. So you can see that this financial crisis has effects on student loans.On the brighter side of things, the US congress enacted the Ensuring Continued Access to Student Loans Act of 2008. This will effectively protect many families to have access to federal student loans during this economic and financial chaos. This would make all these families and students seeking educational financing more at ease. It also means that you can have access to federal loans without worrying about any impediments and hassles. You have to be aware though that federal loans like Perkins, Stafford and PLUS loans are capped so you need some borrowings from private lenders.

Bad Credit Student Loan – What To Do If You Need One

Are you concerned that bad credit will prevent you from going to college? While it is true that finding student loans with excellent interest rates is easier if you have a sterling credit rating, bad credit student loan aid is possible. For example, the most popular US Department of Education loan, the Stafford loan, assumes that most applicants will be going to college straight from high school, and will not have a credit rating yet. Therefore, Stafford loans do not even consider the credit rating a factor when it comes to qualifications. The same holds true for Perkins loans, which are federal loans designated for the neediest students. The only reason bad credit would interfere with these kinds of student loans are if you have defaulted on a federally granted student loan in the past.Bad credit student loans are also possible if your parents have better credit than you do. In this case, a PLUS loan, which is granted to parents and not to the student, might be the way to go. US Department of Education student loans (like Stafford and Perkins loans) assume that the parents will pay for a certain amount of their children’s schooling; PLUS loans are intended to cover the amount that the parent is obligated to contribute toward college costs.Federal funding is a good choice for a bad credit student loan because they are specifically designed to help make college more accessible; therefore, their requirements are much looser than those of most banks and other lending companies. However, if you are unable to secure a US Department of Education student loan, you may need to turn to private loans. If you are planning to graduate in a field with a high earnings potential, like law or medicine, you might have a better chance of receiving a bad credit student loan from private lenders.None of these choices are either/or possibilities, by the way. You may be able to put together enough money to finance college through a combination of any or all of the above types of loans. Moreover, even if your bad credit student loan is at a very high interest rate, all is not lost. Many student loans defer payment until you have finished college, giving you time to improve your credit rating. At that point, you might want to look into ways to consolidate your student loan at a better rate, lowering your payments to a more affordable level.

College Loan Consolidation Can Be Beneficial to Post Graduates With High Debt Levels

College loan consolidation is an option for post graduates carrying high debt levels. By consolidating multiple loans graduates can reduce monthly payment amounts, obtain a lower rate of interest, and eliminate the stress of managing multiple payment dates.College loan consolidation is available for both private and federal student tuition. Private lending encompasses funds borrowed through family or friends, lending institutions, credit card companies, or SallieMae.Federal student tuition can include Stafford, Federal FFELP, Federal Direct, Perkins and Parents PLUS. Students with federal and private loans can consolidate into one account. Federal payments must be tracked and verified, so consolidation lenders require applicants to take out two separate loans. However, students will pay one monthly payment and the financial institution monitors and reports account activity to government lenders.Student loan consolidation can be exceptionally beneficial for graduates carrying excessive education debt such as medical, chiropractic and law school. Maintaining college lending financial obligations and payment schedules can be challenging. By consolidating multiple loans into one, students can improve their chances of adhering to repayment criteria and maintaining good credit scores.Students who obtained unsubsidized education loans must pay interest payments from the date of inception and until the debt is fully repaid. Unsubsidized student lending includes: Unsubsidized Stafford, Federal PLUS, Direct PLUS and Direct Unsubsidized.Students with subsidized college loans are exempt from paying interest while attending college and during deferment or grace periods. Subsidized tuition lending includes: Direct Subsidized, Federal Subsidized, and Stafford.Students with SallieMae loans are required to pay interest while enrolled in college. Upon graduation, students must abide by the terms of their selected payment plan. Graduates with Direct Loan payments must adhere to federal guidelines and designated grace periods.One trusted source for obtaining consolidation information and resources is http://LoanConsolidation.ed.gov. Operated by Federal Direct Consolidation Loans, this website provides student loan calculators to help students determine monthly payment amounts, along with lending application instructions, and a comprehensive list of frequently asked questions.It is important to realize that college loans cannot be discharged through personal bankruptcy. The only exception to this rule is if students can provide evidence to the judge that they are experiencing extreme financial hardship. In rare instances, bankruptcy judges will allow post graduates to restructure education debt through a Chapter 13 payment plan. Filing bankruptcy to restructure college education debt should only be used as a last resort.Defaulting on student education loans will adversely affect FICO scores and remain on credit reports for seven years or until the statute of limitation expires. Students must make every effort to make payments on time and in full until the debt is fully repaid.Multiple options exist for college loan consolidation. Post graduates should consult with a tax advisor or financial planner to determine if consolidating education debt is in their best interest.

College Loan Consolidation Can Be Beneficial to Post Graduates With High Debt Levels

College loan consolidation is an option for post graduates carrying high debt levels. By consolidating multiple loans graduates can reduce monthly payment amounts, obtain a lower rate of interest, and eliminate the stress of managing multiple payment dates.College loan consolidation is available for both private and federal student tuition. Private lending encompasses funds borrowed through family or friends, lending institutions, credit card companies, or SallieMae.Federal student tuition can include Stafford, Federal FFELP, Federal Direct, Perkins and Parents PLUS. Students with federal and private loans can consolidate into one account. Federal payments must be tracked and verified, so consolidation lenders require applicants to take out two separate loans. However, students will pay one monthly payment and the financial institution monitors and reports account activity to government lenders.Student loan consolidation can be exceptionally beneficial for graduates carrying excessive education debt such as medical, chiropractic and law school. Maintaining college lending financial obligations and payment schedules can be challenging. By consolidating multiple loans into one, students can improve their chances of adhering to repayment criteria and maintaining good credit scores.Students who obtained unsubsidized education loans must pay interest payments from the date of inception and until the debt is fully repaid. Unsubsidized student lending includes: Unsubsidized Stafford, Federal PLUS, Direct PLUS and Direct Unsubsidized.Students with subsidized college loans are exempt from paying interest while attending college and during deferment or grace periods. Subsidized tuition lending includes: Direct Subsidized, Federal Subsidized, and Stafford.Students with SallieMae loans are required to pay interest while enrolled in college. Upon graduation, students must abide by the terms of their selected payment plan. Graduates with Direct Loan payments must adhere to federal guidelines and designated grace periods.One trusted source for obtaining consolidation information and resources is http://LoanConsolidation.ed.gov. Operated by Federal Direct Consolidation Loans, this website provides student loan calculators to help students determine monthly payment amounts, along with lending application instructions, and a comprehensive list of frequently asked questions.It is important to realize that college loans cannot be discharged through personal bankruptcy. The only exception to this rule is if students can provide evidence to the judge that they are experiencing extreme financial hardship. In rare instances, bankruptcy judges will allow post graduates to restructure education debt through a Chapter 13 payment plan. Filing bankruptcy to restructure college education debt should only be used as a last resort.Defaulting on student education loans will adversely affect FICO scores and remain on credit reports for seven years or until the statute of limitation expires. Students must make every effort to make payments on time and in full until the debt is fully repaid.Multiple options exist for college loan consolidation. Post graduates should consult with a tax advisor or financial planner to determine if consolidating education debt is in their best interest.

College Loan Consolidation Can Be Beneficial to Post Graduates With High Debt Levels

College loan consolidation is an option for post graduates carrying high debt levels. By consolidating multiple loans graduates can reduce monthly payment amounts, obtain a lower rate of interest, and eliminate the stress of managing multiple payment dates.College loan consolidation is available for both private and federal student tuition. Private lending encompasses funds borrowed through family or friends, lending institutions, credit card companies, or SallieMae.Federal student tuition can include Stafford, Federal FFELP, Federal Direct, Perkins and Parents PLUS. Students with federal and private loans can consolidate into one account. Federal payments must be tracked and verified, so consolidation lenders require applicants to take out two separate loans. However, students will pay one monthly payment and the financial institution monitors and reports account activity to government lenders.Student loan consolidation can be exceptionally beneficial for graduates carrying excessive education debt such as medical, chiropractic and law school. Maintaining college lending financial obligations and payment schedules can be challenging. By consolidating multiple loans into one, students can improve their chances of adhering to repayment criteria and maintaining good credit scores.Students who obtained unsubsidized education loans must pay interest payments from the date of inception and until the debt is fully repaid. Unsubsidized student lending includes: Unsubsidized Stafford, Federal PLUS, Direct PLUS and Direct Unsubsidized.Students with subsidized college loans are exempt from paying interest while attending college and during deferment or grace periods. Subsidized tuition lending includes: Direct Subsidized, Federal Subsidized, and Stafford.Students with SallieMae loans are required to pay interest while enrolled in college. Upon graduation, students must abide by the terms of their selected payment plan. Graduates with Direct Loan payments must adhere to federal guidelines and designated grace periods.One trusted source for obtaining consolidation information and resources is http://LoanConsolidation.ed.gov. Operated by Federal Direct Consolidation Loans, this website provides student loan calculators to help students determine monthly payment amounts, along with lending application instructions, and a comprehensive list of frequently asked questions.It is important to realize that college loans cannot be discharged through personal bankruptcy. The only exception to this rule is if students can provide evidence to the judge that they are experiencing extreme financial hardship. In rare instances, bankruptcy judges will allow post graduates to restructure education debt through a Chapter 13 payment plan. Filing bankruptcy to restructure college education debt should only be used as a last resort.Defaulting on student education loans will adversely affect FICO scores and remain on credit reports for seven years or until the statute of limitation expires. Students must make every effort to make payments on time and in full until the debt is fully repaid.Multiple options exist for college loan consolidation. Post graduates should consult with a tax advisor or financial planner to determine if consolidating education debt is in their best interest.