Student Loans : News, Updates and Blog Posts

Author: General Manager, FSA Application, School Eligibility and Delivery Services Summary: 2005-2006 Free Application for Federal Student Aid (FAFSA) Processing Deadlines The U.S. Department of Education would like to remind financial aid administrators of the approaching application and correction deadlines for the 2005-2006 application processing system, as published in the Federal Register on June 7, 2005 (70 FR 33134). This notice is available on the IFAP Web site at http://www.ifap.ed.gov/fregisters/FR06072005.html. A correction was published on June 15, 2005 (70 FR 34818) and is available at http://www.ifap.ed.gov/fregisters/FR06152005.html.

The deadlines are as follows:

** 2005-2006 FAFSAs must be received and accepted by the Central Processing System (CPS) before 12:00 midnight Central Time (CT), June 30, 2006. **

** Corrections to 2005-2006 processed applications, including signature pages, must be received and accepted by the CPS before 12:00 midnight CT, September 15, 2006. **

These deadlines apply to both paper and electronic submissions. The Department will make no exceptions to these deadlines, including cases in which schools have awarded Federal Pell Grants (Pell Grants) to students who do not have Pell-eligible Institutional Student Information Records (ISIRs).

The Common Origination and Disbursement (COD) System will not accept a Pell Grant disbursement record for a student who does not have a Pell-eligible ISIR. Students and schools should submit 2005-2006 data to the CPS far enough in advance of the deadlines to allow time to make corrections to the application data, if necessary.

If you have any questions about the deadlines, contact CPS/SAIG Technical Support at 800/330-5947 (TDD/TTY 800/511-5806) or by e-mail at CPSSAIG@ed.gov.

Thank you for your cooperation and assistance.

Press Release, hot of the wire…

Reserve Your Place for Student Loan Consolidation Before July 1 Interest Rate Hike

Quincy, MA (PRWEB) June 21, 2006 — On June 15, 2006, President Bush signed into law HR 4939, an emergency budget bill that included a provision for students and graduates with student loans to be able to consolidate their federal student loans with the company of their choice. This freedom of choice comes at a critical time, as graduates face a near-record average interest rate increase of 35% on student loans beginning July 1, 2006. Acting quickly can save graduates hundreds or even thousands of dollars over the life of a loan.

Christopher Penn, host of the popular Financial Aid Podcast internet radio show, commented, “This legislative change couldn’t have come at a better time than now. By opening up the student loan industry to more competition, borrowers – college graduates – will win with access to better benefits, better customer service, and a chance to work with the company of their choice. However, graduates need to get in the game as soon as possible – rates are going up in only a couple of weeks, and once today’s rates are gone, they’re gone forever.”

Jonathan Rudy, director of loan consolidation services at StudentLoanConsolidator.com, recommends that graduates electronically sign their applications. He recently commented, “eSignature is a secure and fast way to sign up for and complete a federal student loan consolidation online. Why wait for a paper application to get mailed out to you? Using eSignature can reduce the consolidation process by at least 10 days, further ensuring protection from the upcoming rate increase.”

“If a graduate’s application arrives at the office at 12:01 AM on July 1, unfortunately there’s nothing we can do to help them keep today’s low rates. This is why eSignature is so important – you can instantly return your application, and by doing it electronically, you’ll be well ahead of the deadline. Some graduates have applied for and signed their applications in as little as 15 minutes,” said Rudy.

Mr. Rudy also recommends, “You can file an application request now, even if you’re not sure you want to consolidate your federal student loans. Having an application on file will ensure that you receive this year’s lower rates – so if you’re unsure whether or not to consolidate, file a free application request and your ’seat at the table’ will be reserved if you change your mind, even after July 1.”

Students and graduates who are interested in consolidating their federal student loans using eSignature are encouraged to visit www.StudentLoanConsolidator.com or call the Student Loan Network toll-free at (877) 328-1565.

… for falsifying a FAFSA. I had thought that wasn’t the case, but in the fine print on the DOE web site, the penalties for FAFSA falsification are pretty stiff. If you knowingly and intentionally submit false or fraudulent data on your FAFSA, you stand a $2,000 fine, jail time, or both…

So don’t do it. Instead, shift your money around legally!

It’s been pretty exciting over the last few days. A congressional bill was pushed through congress early Thursday, and sent to the President for signature – a bill that in part will provide more consolidation options for federal student loan borrowers.

Before this law was passed, any student loan borrower with loans from only one lender, was allowed to consolidate with only that lender. This provided zero room for competition. While not every borrower falls into this category, there was a fairly large cross section of borrowers who could not take advantage of the numerous competitive consolidation programs available. Of course the lenders knew their borrowers couldn’t consolidate elsewhere, and offered only minimal money saving borrower benefit packages. But now that’s all changed!

Borrowers with only one lender can now branch out and consolidate with any company they choose (hopefully StudentLoanConsolidator.com). One thing they’ll find when venturing away from their current lenders are greater savings through borrower benefit programs. For example, borrowers can reduce their interest rate by up to .5% if they sign up for automatic checking account withdrawal, and 1% will be reduced if payments are made on-time for 24 months. These benefits account four thousands of dollars in savings that are not readily offered through their current lenders.

In summary, now is a great time for anyone who has federal loans to apply for a consolidation. If you remember from my previous posts, interest rates are set to increase by 35% on July 1, 2006. So don’t get stuck with a higher rate, call the experts at 877.328.1565 or visit www.StudentLoanConsolidator.com and use our fast and secure eSignature progam – the quickest way to get started.

I caught a news blurb from our top financial consultant and host of the Financial Aid Podcast, Christopher Penn:

Due to very recent legislative changes, all borrowers that have loans from only one lender are now eligible for student loan consolidation with the Student Loan Network. Previously, you were forced to consolidate with your sole existing lender, but thanks to the hard work of student advocates, Congress listened and overturned the single holder law – giving you the opportunity to save more money each month with the company of your choice. (thanks for choosing us)

But that doesn’t change the fact that time is nearly up – June 30th is only two weeks away. With the influx of applicants, there will be processing delays. Get on the ball and start your consolidation application today

Please call us here at the office, toll-free, 877-328-1565 with any questions you might have! Or check out www.StudentLoanConsolidator.com

Loophole Could Increase Some Students’ Eligibility for Financial Aid

By KARIN FISCHER

Under a little-noticed loophole in a new federal law, money set aside in college-savings plans will not be counted in determining a dependent student’s eligibility for need-based financial aid if the account is in the student’s name, according to guidance released last week by the U.S. Department of Education.

The loophole — created by Congress in February when it passed deficit-reduction legislation — is reflected in a proposed revision of the Free Application for Federal Student Aid, or Fafsa, which the U.S. Department of Education published last Tuesday in the Federal Register.

The Fafsa is the standard application form that the federal government, state governments, and most colleges use to determine a student’s eligibility for financial aid.

In the draft revision of the Fafsa, instructions direct applicants to report the value of assets in college-savings plans and other education accounts owned by their parents. But, the instructions state, “Do not report the value of these accounts if the student is the owner.”

It is unclear how many families the change could affect, said Joseph F. Hurley, an accountant who tracks the plans for his Web site, Savingforcollege.com. While New York State does allow parents to act as custodian of a dependent student’s plan, many states do not permit accounts to be opened in a minor’s name.

There is also some confusion about whether Congress meant to create the potential loophole or whether it arose from a legislative drafting error. “I’m not sure how many people who are rushing out to open plans because there is some skepticism that’s what was intended,” Mr. Hurley said. Still, he added, “on an individual basis, this certainly could be a substantial benefit.”

Under previous law, money placed in college-savings plans, even under a student’s name, could shrink a student’s financial-aid award, although the size of the reduction depended on factors such as family income and the cost of attending a particular institution.

The Education Department is seeking comment on the revised Fafsa through August 7.

Investors have opened about 8.6-million college-savings accounts, with a total value of more than $89.46-billion, according to the College Savings Plan Network, the association that represents state-run college-savings plans. All 50 states and Washington, D.C., now offer the plans.

Just an FYI, a peek behind the curtain here at the Student Loan Network. We process lots of consolidation applications every day, and it’s been our experience that the US Postal Service can get a piece of mail delivered in the contiguous 48 states in about 3 days. Oddly enough, 3 days seems to be about the set time, whether you’re sending mail to the next town over or to Los Angeles (we’re in Boston). So, what does this have to do with consolidation?

Well, simply put, we want to provide the best damn service possible to everyone who uses our services. We know there are thousands upon thousands of choices when it comes to student loan consolidation, and we’re tickled that you not only found us, but applied with us as well. That said, we also don’t want to make promises we can’t keep, and today’s low rates expire on June 30, 2006 at 11:59 PM. If we don’t receive your signed application back here by then, we can’t give you the 2005-2006 rates.

If the postal service takes 3 days to get you a piece of mail, and you turn it around that day, it’s another 3 days back to us. Thus, beginning 6 days from the deadline, we won’t be able to send out paper applications in the mail with today’s rates. After June 23, 2006, we will only be able to accept eSignature applications if you want today’s rates to be locked in.

You should probably use eSignature anyway, as it’s faster and more secure than postal mail. But after June 23, it’ll be the only choice for which we can offer today’s rates.

Apply for a student loan consolidation with eSignature now.

Just a quick FYI – federal student loan consolidation at today’s rates comes to an end on June 30, 2006 – and the new consolidation rates that take effect on July 1 aren’t pretty. If you haven’t already, now is unquestionably the time to apply for a student loan consolidation and electronically sign it to reduce delays.

Visit: Federal Student Loan Consolidation Online with StudentLoanConsolidator.com

June 7, 2006

Author: Jennifer Douglas, General Manager, Student Aid Awareness and Applicant Products and Services

Summary: First draft of the 2007-2008 FAFSA available for comment

The first draft of the 2007-2008 Free Application for Federal Student Aid (FAFSA) is available for comment. A Federal Register Notice opening the 60-day public comment period was published June 6, 2006. Comments on the draft FAFSA may be sent by e-mail to FAFSAComments@ed.gov.

We are proposing the following changes to FAFSA questions in order to be compliant with the Higher Education Reconciliation Act (HERA):

1) We added new questions for a student (and spouse) or a student and his/her parents asking about benefits they received from any of five means-tested federal benefit programs.
2) We added a new dependency question to allow a member of the U.S. Armed Forces serving on active duty for purposes other than training to be treated as an independent student for financial aid purposes.
3) We revised the question about drug-related offenses to reflect changes made under HERA.
4) We deleted the following questions for space reasons: questions 27 and 28 regarding the student’s interest in student loans or work-study and questions 94-97 representing a fifth and sixth college choice. (Question numbers refer to the 2006-2007 FAFSA)

http://www.ifap.ed.gov/eannouncements/attachments/Draft0708FAFSA.pdf

Lets go over this again. July 1st is just around the corner, rates are increasing by 35%, and the option to consolidate your student loans at this years low rates is slipping away by each passing day.

eSign your consolidation application today and don’t get caught up in the paper trail delay. eSignature is faster then a standard application, encrypted to ensure you information will remain safe and secure, convenient – you can eSign your application from ANYWHERE, and intelligent – check your status online once you’ve signed.

I know…sounds great – but that’s just the application process. Remember, consolidation will lock in this years low rate and save you a boatload of cash.

So lower your monthly payment and make life more affordable, eSign your federal loan consolidation today.

Call the experts at 877.328.1565 or www.studentloanconsolidator.com