Student Loans : News, Updates and Blog Posts

The national unemployment rate has soared to 6.1%, according to the latest Bureau of Labor Statistics report, but that doesn’t mean everyone is feeling the pinch.

The hiring for those with an MBA remains strong despite layoffs and corporate cutbacks in this turbulent market. Hiring managers, which hired MBAs last year say they expect to hire the same many this year or even more, according to Graduate Management Admission Council. Some corporate recruiters even think they’ll have to fight harder to land top candidates.

I liken an MBA degree to holding that one ring in the Lord of the Rings trilogy. Everyone wants it, even in an economic downturn. Many view hiring those with an MBA as a long-term investment in human capital. It is always good to have the next manager in the pipeline should another manager retire or be lured away by a competitor.

So if you’ve been asking yourself if attaining an MBA is worth the time and investment – all signs point toward yes.

If you need a graduate loan for school (click here).

Here is my consolidation question of the day!

Question: I only have one private loan so I can’t consolidate, right?

Answer: WRONG! Loan consolidation is viewed as a debt management tool. The purpose is to extend your loan terms to help minimize your monthly payment. Regardless of whether you have one loan or ten you may apply for consolidation.

I guess when you are in the industry you never give this a second thought – it’s just common knowledge that you don’t need more than one loan to consolidate, but many don’t know that.

If you have $10,000 or greater in private student loans and are looking to consolidate (click here).

The Department of Education has reported that it expects the 2009-10 Free Application for Federal Student Aid (FAFSA) to be finalized in mid to late November. This is later than usual due to the many necessary changes to the FAFSA as a result of the College Cost Reduction and Access Act (CCRAA).

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What is the FAFSA” The FAFSA Financial Aid Application is the most important financial aid form you can complete. But many people either avoid it or make costly mistakes when filling it out. Our free, comprehensive FAFSA help guide, Frequently Asked Questions, and FAFSA secrets will help you maximize your financial aid and qualify for student loans.

As the economy continues to spiral downward at a faster rate than mighty Titanic it ’s not surprising to hear that students can not make their payments.  My friend Melody is a recent college graduate and has $40,000 in student loans from Northeastern.  She has been unable to land a job since she graduated in May.  With her six month grace period about to expire she asked me, what do I do?  After telling her to take a deep breath I advised her to request a deferment from her lender.

Stafford loans hold up to three years worth of deferment time.  You can place your loans in either an economic hardship deferment or a forbearance.  The big difference between the two is that if you qualify for a deferment no interest accrues on the subsidized portion of your loans.  In a forbearance status interest accrues on the entire amount.

How do I qualify for deferment?

1. enrollment in school at least half-time as defined by your school (this is not counted against your three years)

2. inability to find full-time employment (up to three years)

3. economic hardship (up to three years)

It’s not the gun, but the person pulling the trigger that’s ultimately guilty of the crime. The same principle applies to credit cards and debt. Who’s really at fault when credit card debt gets out of control? Is it the person swiping the card or the bank that handed it to them? Or perhaps it’s neither. Maybe it all starts at home.

I receive calls and emails from angry parents asking, “Why are you offering credit cards to students? I don’t think that’s very responsible of you.” I must admit, I scratch my head when I hear this, although I do understand that parents want to safeguard their children from life’s many dangers. Being a father myself I certainly want to protect my son from any potential pitfalls, but credit cards are not one of them.

I’ll sit down with Barrett, when he is a little older, and set in motion a plan to ensure he is financially viable, and yes, having a credit card in his name is one way I plan on doing it.

I’ll serve as the co-signer on his credit card so I can monitor the purchases and view the statement activity. I will also have the credit line capped at $500-$1,000 as a precautionary measure. I want him to first learn to be responsible with a small balance before graduating into the world of auto loans or even a mortgage. Your child can gain valuable credit history at an early age and be well on their way to financial freedom with your guidance and watchful eye.

I take my responsibility as a parent seriously. I want the very best for my son as any parent does, which is why when I receive emails claiming we are irresponsible for offering credit cards to students I’m bewildered. My Dad took time to explain things to me and ensure I would not get myself into financial trouble. “Pay yourself first” and “spend beneath your means,” were two common threads of wisdom he showered on me. He also eased me along in the world of credit and showed me how to make it work to my advantage.

We send our children to school so they’ll be educated and capable of making intelligent decisions in their lives, but that education begins at home. They look to us for sound advice and guidance. They put their trust in us. I am educated to the facts, and not the negative propaganda surrounding credit cards, which is why my son will be a step ahead of the rest. But it can be lonely being the lead dog. Anyone want to join our team?

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Why Smart Students Have Credit Cards

With Stafford loan funds capped (yearly allotments) I’ve discovered more and more students using credit cards to pay for their education. Part of the problem is while they are in school it is difficult to keep up with those payments.

Here is a pop quiz for you: What do credit card debt and blood pressure have in common in 2008? Give up? They’re both rising like Grandma’s warm, crisp bread in the oven. Delinquencies continue to escalate in the credit card market and the economy continues to spiral, but help is on the way.

It wasn’t very long ago that aggressive collection tactics were employed to chase down past due funds. Some folks would get upwards of six calls per day, and it made answering the phone a stressful task. Now banks are working with borrowers in a more proactive, constructive way. I guess the old adage you catch more flies with honey is the new school of thought as banks look to shore up their balance sheets.

According to the American Bankers Association the percentage of bank credit-card accounts that are delinquent rose to 4.51% in the first quarter up from 4.41% year over year. That may not seem like a large increase but that equates to millions of dollars in lost revenue.

The good news for you is that lenders nowadays are more willing to make a deal. American Express plans to customize payment plans to borrowers facing temporary financial hardship. Bank of America is accelerating their efforts to reach customers earlier and will consider waiving fees and reducing interest rates. Citigroup is expanding their forbearance program to early stage delinquent customers. Capital One, Discover, J.P. Morgan Chase, and Washington Mutual also are employing similar programs.

If you’re struggling with credit card debt give your credit card company a call and see what they can do for you. Many are willing to play ball, so get off the bench and get into the game!

Now that summer is over, it is time to start thinking about getting organized for the rest of the year, and yes – the holiday season…  One consideration might be private student loan consolidation.  Refinancing  your private student loan payments is a great way to lower your monthly payments and combines all your private student loans into a single manageable loan.  Consolidation is not always the best option for everyone – but it will help make life easier for many of you.  Learn more at:

http://www.studentloanconsolidator.com/private/

So I have this friend, we’ll call her Barbara, and she’s had the most difficult time ordering books online for school. She went to half.com and it took nearly 3 weeks for one of her books to arrive and the other is still not here! Now that’s not a problem if you’re ordering your book(s) on say August 1 for classes that begin September 3, but if your semester is underway or you order your book a week before class, good luck. This poor girl. Her stomach is in knots. She has a quiz tonight and hasn’t read a single page!

I would offer this bit of caution to anyone trying to save some money with online book shopping – GIVE YOURSELF A MONTH, anything less and you are setting yourself up for disaster. Granted, you could be like me and get lucky. I ordered my book on line at CampusX.com last Thursday and got it today, but I am in the minority apparently.

Saving money is great, but at what cost to you? If you save $50 on a book but get behind the 8-ball in your class is it really worth the added stress?

Be careful out there my friends. Read the fine print when ordering your book (i.e. guaranteed arrival date). If you don’t read the fine print you may not be reading any print until it is too late.

I have spoke to many students who are under the belief that consolidation is a means by which to lower your interest rate, however that is not the case. The real benefit to consolidating is extending your loan terms and minimizing your monthly payment. Granted, your rate may decrease as some lenders use the LIBOR index while others base your interest rate off the prime, but that is no guarantee.

So is consolidation right for you? Each person’s financial situation is different so it’s not a black or white answer. What I can tell you is this, if you are struggling with your monthly payment than consolidation will probably serve you well.

We’ve actually seen a spike in consolidation applications over the past month which is reflection on the current state of the economy. Many don’t have jobs or are only working part-time right now and need to lower their monthly payment. The job market is the worst it’s been in years. According to the Labor Department the unemployment rate just jumped to 6.1% the highest in 5 years. Over 600,000 jobs have been lost so far in 2008! I guess we should just be thankful we are in a recession and not a depression.

If you would like to find out what your interest rate and payment terms would be without obligation (click here).

“My Mom and Dad won’t help me pay for graduate school, what options do I have?” When this happens, and the ball is thrown back in your court, you need to have a game plan.

The two federal loan staples, as it pertains to graduate loans, are the Graduate Stafford and Graduate Plus loans. Both require the completion of the FAFSA and both are fixed interest rates.

The Graduate Stafford loan is a need based loan. Your Expected Family Contribution (EFC) number goes a long way in determining how much you are awarded. You may qualify for up to $20,500. The Grad Plus loan is based on the past two years of your credit history. Please note that credit history is different from credit score. Credit history looks to see if you’ve been on time with any bills in your name. If you have been in good standing with your various payments than you will not need Mom and Dad.

Another benefit of taking out federal stafford and grad plus loans is that you can consolidate them together after you graduate school.

So tell Mom and Dad, thanks anyway, but I’ve got my own back on this one.