FAFSA is Your Ticket to student loans?FAFSA is your only entry into the world of federal student loans. You can also find yourself the recipient of a federal grant and work study programs to boot. Without a Student Aid Report (SAR), your chances of getting the best student loans are almost nil.FAFSA, stands for Free Application for Federal Student Aid. The feds are your best place to get a college loan because they have the money to lend at a decent interest rate and the government will actually make your interest payment on some of the loans.The application usually is completed online (spanish version as well) but we recommend downloading a copy and printing it out. It will take you time to research and find the answers to their questions.First you need to create an account with FAFSA. This pin number will allow you to proceed with filling out the application. You will then continue to use that pin number as long as you are applying for federal student loans. Basically it is a virtual account system.CRITICAL NEWSFLASH
Many institutions use the report to help them determine what type of student loan you are eligible for. It is not strictly used for federal purposes.
Money or loans are awarded on a first come first served basis.
January is the start date that you can apply through FAFSA to get student loans for the following fall quarters.
Last year we completed our FAFSA in February and still received our student loans for 2 family members.
Seek help from your high school counselor or a college admissions advisor like we did.
When you receive your SAR, you will find a lot of information but the two most important aspects you need to be concerned with are:
EFC stands for Expected Family Contributions. In your report they will tell you how much they expect you and your family to contribute to your college education. The remainder of the monies needed for college will come from your student loans.Eligible loans are basically that. You’ll receive a list of federal unsubsidized and subsidized student loans that you qualify for. These loans will usually be a Stafford, Perkins Loans or Pell Grants.Keep a couple of things in mind:1. The colleges you chose on your report will also receive your SAR report and if you receive federal monies, they will take money out of the loan for tuition and then send you the rest of the money to use on school related expense.2. You can choose to accept the total loan, partial loan or no loan at all. And you can choose which loan institutions you want to go through.The first time you fill out the FAFSA you will probably say to yourself: “this is the last time I’m doing this”, but trust me, it is easier the second time around. Just don’t forget to fill it out early in the calendar year so there will be money for you.
While student loans have helped many poor students by enabling them to pursue further studies by providing financial assistance, it can also be an emotionally and mentally exhausting journey.Repaying a large student loan or multiple student loans can be a long burden which extends many years, well into your working years. Many students which have graduated find themselves having to set aside a large portion of their salary just to repay the student loans.So what solution is available to help? A student loan consolidation plan may be able to help you particularly if you are repaying several student loans concurrently.A student loan consolidation plan consolidate your student loans into one loan thus you only need to make one payment each month. This will help to better manage your finances as now you only repay one loan.There are several types of student loan consolidation plans available depending on who you lend it from. Examples are federal student loan consolidation, sallie mae student loan consolidation etc. Check with your school or lender for more information.There are several ways in which you can repay a student loan consolidation. The most common is a standard repayment plan. You repay a fixed amount every month until you fully repay the loan.A graduated payment plan allows you to repay the student loan after you have graduated. It is suited for students who have no income during studies and only able to repay when they graduated and have a job.A variable payment plan allows you to adjust how much you repay each month depending on your income level. It allows a greater flexibility and is more suited for people whose income varies each month. An example would be salesmen who earn via commission.Another advantage of student loan consolidation is that it also helps to improve credit rating. Since you are effectively getting a new loan and your existing loans have already been cleared, it will help to improve your credit rating and easier to get financial assistance should you need one in future.I would advise getting a federal student loan consolidation as the interest rates are one of the lowest available and the government loan is open to anyone studying in an american education institution.
Choosing an education loan could easily be one of the most important things a person does and therefore it is vital to get it right. However, the basics are fairly simple and this article will take a look at what needs to be discussed before the correct educational loan can be chosen.The first type of loan to take a look at is the federal education loan, and these have the advantage that they are usually of a fairly low interest rate and come with conditions which enables the student to take almost any kind of education he or she pleases. Due to the fact that they are from the federal government, they are highly regulated and give the student a great deal of security when they are carrying out their education.On the other hand many students go to private loans in order to fund the education, and although these can be a good way of funding education it does have to be borne in mind that the interest rates can be much higher than those that come with federal education loans. However, they can be used to add to a federal loan and so therefore may not be such a debt burden.The other type of student loan that needs to be considered is what can be called the consolidation loan, which enables the student to take several loans, sometimes all of them federal loans, and consolidate them into a single load. This makes the interest payments smaller in many cases, and also enables students to keep control of the finances to a great degree.Keep these three points in mind and it should be much easier to find a student loan to suit your needs.
Education loan is a form of financial aid that must be returned with interest. (Scholarships, however, should not be repaid.) Education loans can be in three main categories: student loans (such as Stafford and Perkins loans), loans from parents and private student loans (also called alternative student loans). The fourth type is education loan; this allows the borrower to take all parts of your loans into one loan for simplified payment. A recent innovation is peer-To-Peer lending. Federal loans for education are available on loan programs, whether direct or loans guaranteed by the federal government for students.If the current variable interest rate loan consolidation federal loan to fix a fixed rate. Fixed rate consolidation loan has its advantages, including the one monthly payment. Many lenders offer incentives for consolidation by reducing the rate of.25 to 1% after a series of time College graduates with an average debt of $ 19,000, but many carry up to $ 40000. For students, the transition to a professional school or graduate school or to visit at this level, your number can exceed $ 150,000.The fact that student debt cannot be avoided forever, but there are several ways to reduce the severity of the monthly bill. Here are some ways to help debt-student loans and advice. If possible, pay part of your debt before you graduate or the grace period interest ends. Prepay subsidized loans are applied to the capital, thereby reducing both the outstanding principal and interest pay on the loan. Refunds unsubsidized loans applied first to accrued interest, but also to reduce the lease term and save money at the end.When money is tight, or if you are having financial difficulties, it is tempting to skip a payment or stop paying altogether, by default, but the punishment severe. Instead, contact your lender as soon as you know that you are in trouble and will help in choosing a payment plan or other request for a stay or patience. Student debt can be overwhelming, but with proposals for consolidation can help you manage your payments and reduce the number of bills to pay each month.
Earning a college degree is one of the most significant accomplishments in life. However, going to college these days, especially private universities can be costly and can put you well into debt if you are not careful. Many students need help to pay tuition costs and most college students turn to student loans as an option. During college, students do not think about repaying the loans back but soon after graduation the reality sets in. What is the best way to handle the school debt? One option is to use student loan consolidation as a means to assist in restructuring the finances of those students who have accumulated numerous loans. Here are some helpful tips to consider when you consolidate student loans:1) ResearchDo your research when investigating lenders. Don’t assume all lenders are looking out for your best interests. Just like you did in college, you need to make sure you do your homework and find a credible lending institution. While comparing and choosing the best lender to use you should consider flexible application procedures such as an online application and the ability to manage your account online. Loan counselors on the site can help you decide if what they are offering is what’s best for you. Take the time to compare the different incentives between lenders. This will enable you to make a well informed decision based upon weighing the pros and cons of each lender.2) Consolidate your federal and private loans separatelyMany times graduates will get one loan that consolidates all of their federal and private student loans. Be aware that if you do this, you could lose some of your federal loan benefits. One example is if you combine both private and federal loans you can lose out on the interest tax deduction benefit you get with your federal student loans. Try not to be hasty when going though the consolidation process as there are many benefits to keeping these loans separate.3 Manage your new payment scheduleWhen you consolidate student loans, most likely you will have obtained a lower interest rate. The lower interest rate combined with extended payment terms would result in lower monthly payments. Take advantage of the lower payments and pay more towards the monthly bill. It’s recommended that you pay about one-third more than the minimum payment. If you can do more then that’s better, but be sure that you can afford it. The benefit of handling your monthly payments this way is that you will pay off your loan faster than normal and at a lower rate.Student loan consolidation is a worthwhile option and can help to lift your student loan burdens. Research lenders and the sooner you consolidate student loans the faster you can take advantage of the benefits of low interest rates and lower monthly payments.
Congratulations! You have made the decision to take your education to a higher level by attending college. This is certainly a significant achievement own but one obstacle standing in your way is the high tuition costs. No problem, you say, I’ll just apply for a loan. Sounds simple enough but the process is much more involved than you think.The basics of college loan interest ratesFinding student loans is almost like shopping for a new car as you should never make a decision unless you have carefully weighed all the pros and cons. At first blush it can even seem like a daunting task to find a loan that meets your needs as you will most likely be concerned about what your interest rates are going to be.Depending on which loan you qualify for the interest rates are likely to be variable which means that the rates will fluctuate. Before you sign any documents it is absolutely essential that you look over all the terms and conditions. You may even be able to qualify for loans that have fixed rates may be a better alternative if you are concerned about rates increasing in the future.How rates affect your paymentCalculating how much your interest will be on a loan is not too difficult. For example, if you pull out a loan for $15,000 with an interest rate of 6% then you simply multiply the numbers together and divide by 12 months for the year. The number you are left with is $75 which is what you can expect to pay per month in interest fees.While it may be tempting to choose college loans that have a low interest rate it should definitely not be the only deciding factor. Instead you should always compare the Annual Percentage Rate (APR) of student loans as this represents the true cost of a loan. Always get several quotes before you decide on which one to pick.
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.
What are student loans?Student loan debt consolidation is growing in popularity with recent college and university graduates. Student loans have become as much a staple in college life as a toga party: they are to be expected. Few undergrads can afford to finance their higher education without financial aid of some kind. Unlike a toga party, however, student loans last for years and must be repaid, and for many students this means student loan debt consolidation.A student loan is money borrowed to pay for post-secondary education. A recent study shows that 63 percent (ref 1) of recent college graduates took out student loans to pay for school.There are two types of student loans: federal and private. Federal loans are backed in full faith by the U.S. Government and, therefore, offer lower interest rates that do not accumulate until after graduation of the borrower. Private loans are obtained students or parents through private vendors such as banks or credit unions. Interest on a private loan accrues automatically from the time the loan is obtained.Timely repayment is key go getting rid of debt accumulated by student loans. However, like any loan, high interest rates and late payments lead to an unstable financial future. At this point, many consider student loan debt consolidation.Student loan debt consolidationMultiple federal student loans can be consolidated into one loan with one interest rate. The average (rounded to the nearest eighth of a percent) of interest rates is applied to the new consolidated loan. There are no fees or charges, but the borrower must have reached his or her grace period (six months after graduation, or moving to half-time status with your school) before consolidating. Student loans may not be consolidated before you begin repaying or have entered your grace period.The standard repayment term on federal loans is 10 years. Consolidating your loans may lower your monthly payments; however, you attain a larger principle and consequently extend your repayment time by much longer than the standard 10 years.Key points to remember:
Thoroughly research your student loan options, both federal and private
Ensure that consolidating your student loans after your grace period will benefit you in the long run
Higher education is very expensive and not everyone can afford it. Everything from accommodation to tuition fees and books has to be paid for. To pursue our dreams and go to the university we always wanted to, student loans come in handy. Their rate of interest is lower than the normal rate of interest and the time for repayment is also significantly higher. We sometime take more than one student loan to help us with our finances during college. Paying the interest for different loans every month can be a daunting task and student debt consolidation loans come in handy.A student debt consolidation loan is one in which all the smaller student loans are combined into one big loan and the student has to pay off just this every month. There is only one repayment period and one due date to make the payment. The loan’s interest is also significantly lower and you can save precious dollars every month. There are two basic types of student debt consolidation loans and they are federal student consolidation loans and private student consolidation loans.Advantages of student debt consolidation loans:1. The rate of interest on these loans is fixed and it has a significantly lower rate of interest than the other loans combined.2. There is just one loan to pay off so remembering the due dates will not be difficult.3. You can have an extended time of repayment of the loan and this can go up to 30 years.4. As the time frame to pay off the loan increases the amount that needs to be paid off every month also reduces significantly.5. You don’t have to pay any extra fee to consolidate these student loans.6. The application process for this loan is also much simpler and there are no penalties for paying back early as well.Disadvantages of the student debt consolidation loans:1. Extended payment periods may make it seem that very little money is flowing out of your pocket but in the long run you will end up paying much more than you borrowed.2. It is extremely important to be very careful about the amount of interest you have to pay on a consolidated loan. It can happen that the rate of interest is higher in the consolidated loan than the other individual loans. In this case taking a consolidated loan is more of a disadvantage.3. When taking a consolidation loan, you should also consider the remaining tenure on your various loans. This is especially important when you are taking a loan for the purpose of consolidating your payments into one (rather than due to financial problems in paying back the loan). If most of your loans are nearing the tenure completion, you would not gain from consolidating such loans.4. Consolidating the loans within the grace period will require you to pay it off immediately.Student loans have helped millions of students pursue their dreams and become what they are today. Student debt consolidation loans help them ease the financial burden to a great extent. The pros and cons must be evaluated carefully before choosing to consolidate the student loans.
I have a friend who’s son is entering his senior year in high school and is starting to sweat next years college costs and rightfully so based on what we found. Armed with a glass of wine each, we set out to see what the average college cost (including room and board) and what student loans were available, their interest rates, and cost. This was no small feat as both the colleges and the student loan lenders (both private and government) make it about as clear as mud.The first step was to pick five average community colleges, state universities, and high end private colleges to get the numbers from. We wanted to see the spread and come up with a reasonable average that was fairly accurate on today’s costs. When in doubt, we did round up since we wanted to get real world figures and didn’t want to cut any corners that might not be available for everyone. After we got our average costs, then we would search out all the different student loan possibilities.Here’s what we ended up with on average community college annual costs. Tuition, room and board, and average fees came to about $11,000 per year or a total of around $45,000. State universities were a little more than double, about $23,000 per year or $92,000 total. And the top end Ivy League type colleges came in at a whopping $50,000 per year for a total cost of $200,000.These figures are all based on as accurate information as we could find on the respective websites of each school. Not exactly scientific but a very good average to use for determining what the cost is for necessary student loans for all three categories. These numbers are based on 9 months (some schools had quarters rather than semesters) and didn’t allow for any special discounts or grants from the colleges (and several did have some good offers that may reduce the cost).Even with the latest changes in the Government Student Loan programs, you can’t count on any grants or scholarships due to the maze of qualifications. But if you qualify due to financial reasons, there is a good chance to get a government grant for up to $6000 per year. But we excluded any other financial aid in our research to keep it comparable in general. Most students will qualify for some help in financial aid be it discounts, scholarships based on merit, or even part time work funded by the school or government programs.So the figures we’ll use for annual costs are $11,000 for community colleges, $23,000 for state universities, and $50,000 for Ivy Leagues colleges. The interest rates varied from a low of 2.88% to 4.50% depending on the different qualifications (sometimes financial need, sometimes credit history or co-signer, and other factors). And there are several variations on every single possible loan type. As an example the SallieMay loan that offered the lowest rate, 2.88% also required an interest payment while still in school (starting as soon as the loan is initiated). And remember that most private student loans may require a co-signer to get that low interest rate.You also have quite a few different pay back options. Options like number of months (term of the loan), which will dictate the amount of the monthly payment and the total cost. In our case we used a midpoint interest rate of 3.77%, 180 payments (15 years), and a payment of $195.93 per month. That comes to a total pay back amount of $35,266 for the $23,000 student loan. But wait, that’s only one year, multiply that times four and you get payments each month of $783 and total pay back of $141,064.That’s comparable to buying a $141,000 house but you don’t get the house. That’s also 15 years of almost $800 monthly payments you’ll be making. This is a serious long term contract you are entering into and you will be paying it off well into your 30’s. Walking out of your college graduation ceremony with $140 in debt is sobering to say the least.I know that this got my friend’s total and complete attention after we did the basic numbers. But keep in mind that there is a very good chance that you can reduce that cost by at least 10-15% with other possible financial aid that comes with no price tag (at least monetarily). And in my friend’s case, he did have about $60,000 saved in a college fund so that will greatly reduce the total amount of any loans.It’s important that anyone always check with his or her college of choice to find every possible financial aid available. Every college may have different programs and it’s always a good idea to explore any opportunity.