Student Loans : News, Updates and Blog Posts

When it comes to financing graduate school a lot of students wonder if it is better to choose a lesser-know inexpensive school or a more well-known expensive school. Although this is completely a matter of opinion, there are a few justifications for going to a graduate school with a higher pricetag.

1: Your workplace might have a tuition reimbursement program: If you are going to graduate school while you are working you may be able to take advantage of tuition reimbursement benefits.  This means that your employer will pay for you to take classes as long as they are relevant to your field and could help you in your job.

2: Graduate students can qualify for more federal financial aid: Stafford loan limits are a lot higher for graduate students than they are for undergraduate students. In fact, the lifetime aggregate Stafford loan limit is $138,500 for graduate and professional degree students.

3: You may be able to take advantage of income based repayment: Most students coming out of graduate school have loans to pay off. If your monthly loan payments are very high after graduate school you may qualify for income based repayment.This plan helps borrowers keep payments low with caps based on their income and family size. If a borrower still has a loan balance after 25 years it is forgiven completely.

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Today in our Financial Aid Forum I received the following question:

Next year as a sophomore our son will not have a meal plan at the college.
How much do you budget for apartment cooking?
How do you come up with a budget?

This is a great question that probably affects a lot of students. If you live on a college campus you probably have a meal plan which you pay for as part of your room and board fees. However, if you live off campus you are probably responsible for buying your own food and cooling for yourself. This could get expensive if not managed properly so it is important to setup a strict budget for yourself.

My suggestion would be to find out how much the meal plan at your school costs and use that as a guideline. Divide that number by the number of weeks you will be away at school and living on your own. That will give you your approximate weekly budget. Do a test shopping week to see if your weekly budget is too much or not enough and adjust as you see fit. Also, learn how to be a coupon clipper and stock up on items when they are on sale. Doing these two things can save you a ton of money in the long run.

The good thing is that both leftover Stafford loan funds,  private student loan funds and most scholarships can be used towards any education-related expense including food.

Does anyone else who has been there have other ideas on this topic?

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Many people think that graduate students are left out in the cold when it comes to federal financial aid. Fortunately, this is not true at all. In fact, graduate students have just as many federal financial aid options as  undergraduate students.

For graduate students there are both subsidized graduate Stafford loans and unsubsidized Graduate Stafford loans. Subsidized Stafford loans are awarded based on financial need. Any student who qualifies for this kind of loan will not be charged any interest while they are in school. Unsubsidized Stafford loans are not awarded based on financial need. Any eligible student can take out an unsubsidized Stafford loan. The best thing about Stafford loans for graduate students is that the annual loan limits are a lot higher than they are for undergraduate students.

Graduate students also have the opportunity to apply for federal Graduate PLUS loans. This federal loan  low fixed interest rate, but  comes with the flexibility of a private student loan. The Grad PLUS loan is based on credit rather than on need  so as long as student has decent credit they can qualify.

To qualify for any kind of federal financial aid a graduate student must file the FAFSA. If you are planning on attending grad school in the fall of 2010 the time to apply is now.

The cost of a college education is rising every year. This year the average cost of a private four-year school was $26,273, up 4.4% from last year, and the average cost of a public school was $7,020, up 6.5% from last year. For most families, paying for college is a struggle. If you feel like you do not have all the pieces of the financial aid puzzle, you are not alone.

On January 1st the 2010-2011 FAFSA (Free Application for Federal Student Aid) was released. The FAFSA is probably the most important part of the financial aid puzzle. If you are planning on attending college in the fall of 2010 you should be in the process of submitting this form. The FAFSA determines how much federal financial aid you are eligible to apply for. There are three basic types of federal student aid:

• Grants: Grant money is financial aid that does not have to be repaid. Most grant money is based on financial need.

• Work-study: Work-study money is earned through a job or near campus. Work-study money does not have to be repaid.

• Loans: Loan money, including subsidized Stafford loans and unsubsidized Stafford loans, is awarded by the government and must be repaid with interest.

Federal financial aid can be a huge help when paying for college, but since most federal financial aid is awarded based on need, not everyone who files a FAFSA will be awarded sufficient aid to cover their education. So what happens when your federal Stafford loans and grants are not enough? Luckily, there are other pieces of the financial aid puzzle that can help you pay for college.

PLUS Loans are federal student loan options that are not based on financial need, but rather on credit. There are two types of PLUS loans; Parent PLUS loans and Graduate PLUS loans. If you are an undergraduate student, your parents can apply for a PLUS loan to help supplement the cost of your education. If you are a graduate student you can apply for a PLUS loan for yourself. With the federal PLUS loan you can borrow up to 100% of unmet financial need. PLUS loan money can also help you pay for educational costs not covered by your tuition including housing and supplies.

Some students choose to add private student loans to their financial aid puzzle. Private Student Loans are an alternative student loan option. Although you should always apply for federal financial aid before pursuing this option, private student loans have a few advantages. Private student loans are awarded based on credit rather than on need. You can use private student loans for any education related cost including textbooks, housing and transportation. If you are looking for a private student loan, the new private student loan comparison tool on PrivateStudentLoans.com can help you determine which lender and loan best meets your needs.

Because private student loans are based on credit, most students need a parent, family member, or close friend to cosign the loan. A cosigner is an individual who agrees to pay any debts if the primary account holder is unable to do so. This ensures to the lender that the loan will be paid back even if the student borrower does not have the funds to make payments.

The final, and quite possibly the best, piece of the puzzle is scholarships. Scholarships are favorable because unlike loans they do not have to be repaid. Hundreds of thousands of organizations around the country award scholarships to students based on their backgrounds, interests and accomplishments. StudentScholarshipSearch.com is a website that helps you find and apply for scholarships that you qualify for.

Every student’s financial aid puzzle is put together differently. Many students take advantage of all of these financial aid options while some students only need to use one or two. Some student might qualify for more financial aid while other students might be awarded more scholarship money. Whatever your financial situation is, remember that all of these options exist to help you complete your education.

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Did anyone ever tell you to shop around before making a big purchase?  When you buy a TV or a computer you do hours of research to find out what your options are and where you can purchase the item at the lowest cost. A private student loan should be no different.

If you are considering applying for a private student loan for college you should definitely shop around before deciding which lender to apply with. You should explore all of your lender options, interest rates, repayment expectations and deferment options. The new private student loan comparison tool on PrivateStudentLoans.com makes it easy to do this research without having to visit multiple lender websites.  The tool aggregates information from six of the top private student lenders and lets you view it in detail without an registration commitment.

Before you sign off on a private student loan do your homework and know your facts. Take as much time to choose your private student loan as you would to choose a new car. If you do this you will not have any surprises when it comes time for repayment.

Is your school financial aid package the be-all and end-all of financial assistance for college? No. If your financial aid package does not meet your needs there is always an opportunity to appeal and request additional funds.

Financially, a lot can change between the time you file your FAFSA and the time your tuition bill comes due. If a parent gets laid off or sees a significant decrease in wages or salary, it is appropriate to ask for more money.

When requesting additional Stafford loan funds, work study money or other aid, it is important to work closely with your school’s  financial aid office. They are the ones who evaluate your financial information and put together financial aid packages. You should make sure that your situation is well documented. The more paperwork you can show the school, the easier it will be for them to give you more money.

Almost all graduates with both federal student loans and private student loans would love to be able to consolidate all of their loans into one smaller monthly payment. Unfortunately, federal student loans and private student loans do not mix well and cannot be consolidated together. The rules of consolidation have changed drastically over the past few years and many lenders have removed themselves from the consolidation market all together. There are still ways to consolidate both federal and private loan; it just has to be done separately.

Federal student loan consolidation is done through the department of education. There is an application process involved, but generally everyone who wants to consolidate their federal student loans can. Federal consolidation extends the life of your student loans and can cut your monthly payments by up to 50%.  Consolidation is a great option for anyone having trouble meeting monthly payments.

Private student loan consolidation is a little bit trickier. Unlike federal loan consolidation, private loan consolidation is not automatically granted to everyone who applies. In fact, one of the only lenders doing private consolidations today is Wells Fargo. If you can get a private student loan consolidation it can significantly lower your monthly payments, but you will probably end up paying a lot more in interest over time.

Many undergraduate student apply for federal Stafford loans to help them pay for college. But are the same financing options available to graduate students? The answer is yes! There are both subsidized and unsubsidized Stafford loans available to graduate students.

When graduate students apply for Stafford loans the process is basically the same as it is for undergraduate students. They file the FAFSA and apply for financial aid through their school. However, graduate students do have one advantage; they have much higher Stafford loan limits which means that they can potentially fund a lot more of their education through federal loans.

Private student loan comparison tool helps students obtain information on alternative college financing and make responsible borrowing decisions.

Quincy, MA January 19, 2010 – PrivateStudentLoans.com, a subsidiary of Student Loan Network, recently launched a unique online private student loan comparison tool to help students make informed decisions about private student loan lenders. Many loan comparison tools require borrowers to submit personal and financial information before beginning the comparison process. This new tool is distinctive because there is no upfront registration requirement. Borrowers can use this resource to get information about multiple lenders in one place and then decide which loan product they would like to pursue.

When federal financial aid is not enough, many students turn to private student loans to help pay for college. With so many different lenders and loan products available, it can be difficult for students and parents to find quality information in one place. This new research tool, as part of PrivateStudentLoans.com, gives students an easy way to compare private student loans. It provides both at-a-glance and detailed information about private student loans from a variety of different lenders, as well as the opportunity to apply online. So far six leading student loan lenders have been included in the tool.

Students often apply for private student loans without knowing all of the details because they need money for school quickly. When applying for a private student loan it is important for the borrower to know all of the information about the loan up front. The comparison tool creates transparency in the application process illuminating interest rates, fees, and repayment expectations. “For some students, private student loans are an integral part of paying for college,” said Jonathan Rudy, Director of Student Loans. “We hope that this tool will take the guesswork out of private student loans and help students make responsible borrowing decisions.”

PrivateStudentLoans.com is an industry leading website with over a hundred thousand visitors each month. In addition to the new comparison tool, the site outlines the benefits and the eligibility requirements of private student loans and explains the differences between private student loans and federal student loans. To further encourage students to make responsible borrowing decisions, the site also features a new private student loan repayment calculator. This tool allows students to estimate what their private student loan monthly payments will be once they go into repayment.

Is it to early to apply for federal financial aid? The answer is no. In fact, you should apply for federal financial aid by filling out and submitting your FAFSA as soon as possible. Some financial need is awarded on a first come first serve basis so applying early is crucial. Even if you have not been accepted to any schools yet, you can still file for financial aid.