Student Loan News, Updates and Blog Posts

For many students obtaining a private student loan can be difficult. Private student loans always sound fantastic because you can apply for them at any time during your college career and they can help you pay for books and housing. However, contrary to popular belief,  these loans do not just fall into the lap of every student who cries poor.

One of the major advantages of a private student loan is that they are not need based, but this comes with a trade-off. Private student loans are based on credit and if you have a bad credit history or no credit history your chances of obtaining a loan are slim. Even if you have a cosigner with a strong credit history your credit score will still be checked during the application process and could affect whether or not you get a loan.

You might be surprised to hear that the solution to this problem is a credit card. Credit cards often carry a bad reputation, but the truth is that when they are used responsibly they can help your credit score soar. My advice is to apply for a card with a low limit, use the card for a few purchases every week, and pay off the balance every month. This method with help you build your credit history and show prospective lenders you are financially responsible.

If the need for a private student loan might be in your future I encourage you to consider building your credit with a credit card. StudentPlatinum.com can help you figure out which credit card would be good for you. There are cards for people in all kinds of financial situations. Even if you already have poor credit you can apply for a card and start turning things around.

If you are like me you probably graduated from college with two things; a diploma and a pile of debt. It is completely normal for students to have federal student loans and private student loans to pay off after college, but on top of credit card payments, rent and insurance payments these loans can be a huge burden. There are ways to quickly pay down your debt without getting overwhelmed. Here is the method that I use:

1: Figure out your monthly income and expenses including any student loan and credit card bills.  This will allow you to see how much money you have left over after the bare minimum is paid.

2: Pay at least the minimum payment on all of your debts each month. Missing any payment can negatively affect your credit score. A poor credit score will makes it hard to rent an apartment, buy a car and take out any kind of loan in the future. Additionally, if you put off making payments you will end up getting slammed with interest in the long run.

3: Without neglecting any other living expenses and a modest savings plan, use any extra money to pay off whichever debt has the highest interest rate.  If you have a lot of credit card debt it is probably best to pay that down first. Once your credit card debt is paid off, try not to accumulate any additional debt. Once your first debt is paid you can move on to using your extra money to pay off whichever student loan has the highest interest rate and so on until you are debt free.

ScholarshipPoints Bonus Code: PAYDOWNDEBT

Budgets; you can’t live with them and you can’t live without them. I hate budgets just as much as the next person, but I have realized that having one makes my life a lot easier.  By the time you make the decision to pursue grad school chances are you will be completely on your own financially. Whether you decide to go to school full time or part time while you work, paying for grad school will take a certain amount of financial discipline and budgeting. However, living within your means does not have to be a drag. You can successfully pay for grad school without being strapped for cash.

Here are some tips for creating a budget that works for your lifestyle:

1: Determine your monthly income and your monthly expenses. This is the most important step to creating a budget. The amount of money you bring home on a monthly basis is what you have to work with. Make sure your expenses do not exceed you income. If you are going to school part time and working full time this will probably be a little bit easier for you. If you are living off of savings, determine how much you have for each month. Be sure to factor in all expenses including rent, car payments, insurance, groceries etc.

2: Take out loans to pay your tuition and other school expenses. As a grad student you have plenty of loan options. The Graduate Stafford Loan has a low fixed interest rate and does not require a credit check. The Graduate PLUS Loan is a low, fixed interest rate student loan that is based on your credit. It allows you to borrow up to the total cost of your education minus any other aid you receive. Finally, there are other private loans that can help you cover any and all of your school expenses. Make sure you include all loan funds and tuition payments in your monthly income and expenses. GradLoans.com can help you apply for and secure all of the loans you need.

3: Defer undergraduate loans until your graduate degree is complete. Unless you have the money to start paying your loans back while you are in grad school you might as well wait. Do not kill yourself trying to pay off these loans until you are working full-time and have more flexibility.

4: Use a free online budgeting tool like Mint.com. The days of scratching numbers on a piece of paper are over. This tool allows you to see all of your accounts, including your student loans, aggregated together. It will allow you to see where you spend the most money and where you might be able to cut back.

5: Find a credit card with good rewards. Sometimes using a credit card to make all of your purchases can be beneficial if you pay it off every month and you get rewards points. I have a credit card that awards one point for every dollar spent. Usually I trade in my points for Target gift cards. Since I spend a lot of money there anyway it gives me a little extra wiggle room in my budget. StudentPlatinum.com can help you choose a credit card with a rewards program that will work for you.

ScholarshipPoints code: BUDGETGRAD

I just have to laugh when I hear people say that credit cards put you in debt. I believe what they are really trying to say is, I’m irresponsible and can’t control my spending ways. That would at least makes sense to me.

The fact is credit cards serve a real purpose if used wisely. They help establish credit and are great for emergency situations. Of course your definition of emergency may be different from mine. A clearance sale on shoes does not constitute an emergency.

But if you feel you can not exercise self restraint, than a credit card is definitely not for you. You’ll run up a high balance and destroy your credit history. And should this happen to you, and I certainly hope it will not, just remember it won’t be the plastic that put you in debt.

As you head back to school, some back to school financial aid tips…

1. Avoid credit reps on campus. You don’t need that free t-shirt, and a lot of inquires can hurt your FICO score.  (Your FICO score is used to determine your eligibility for student loans and other credit products.)
2. Make a budget BEFORE the semester begins. Figure out what kind of money you’ll be able to earn and what you’ll be spending – and stick to it.
3. Team up with a roommate, dormmate, or friends to enforce each others’ budgets. The power of the group works. Social financial apps like Wesabe, Mint, and Geezeo can help with this, too. Set a goal that you publish among your friends and stick to it. Set rewards for achieving those goals.
4. Take a class online while everyone is out partying – or during a break.  If you take one class during one spring break and one class each summer – you can graduate a semester early!
5. Go for a lot of walks on campus. You’ll meet a ton of new people, and you won’t have to spend money to do it. Being visible is the easiest way to meet new people. Want to meet lots of new people really, really fast? Volunteer at any kind of event, work at the help desk, etc. Be helpful and you’ll make amazing, fast connections that often endure long past college.
6. Everything marked free isn’t. Beware of any free offer that requires you to sign up for anything. Not saying it’s bad, just know what you’re signing for – like a stealth student credit card application.
7. Some of the best conversations you’ll have are on playgrounds. Hang out at places like that vs. cafes or other money-spending venues. Want to make your own game socially? Go off campus, wander around (with safety in mind) and find the best hangout spots in the town, then share them with friends. Museums, galleries or the city gardens as examples.
8. Check your campus email every day. Financial aid offices often send notices to campus email addresses. Don’t miss a bill. If you’re technically savvy, just forward it to your webmail account.
9. Buy and bring to campus an indoor dryer rack. You’ll cut your laundry bill in half and the rack will pay for itself in weeks, especially if it’s around $18. You can find magnetic and closet-based systems for as little as $10 online.
10. Bring resealable containers. I’m not saying bring them into the dining hall or anything… but, you know. Make sure you don’t skip meals if you’ve paid for them. That’s just throwing money away.
11. Have a small lockbox in your dorm room. Keep your checks, debit card, etc. in there and locked up. Make it a combo lock so that if you lose your keys, you’re not out of luck, and if you’re drunk, you can’t get at the good stuff until you’re sober enough to remember the combination. Seriously.
12. If you have a student ID card that’s tied to any kind of financial account, punch a hole in it, stick it on your keychain, and put your keychain on a lanyard.
13. Opt out of as many fees and unnecessary bills as possible, such as campus phone and TV service. Seriously, you have the Internet. What else do you need? Use free applications like Skype, change your mobile plan to unlimited calling if you call home a lot (and you probably will if you’re a first year student), use Hulu.com for television, and avoid those extra, unnecessary expenses.
14. Shop around online for better textbook prices. We have a free eBook on the topic.
15. If you’re living off campus and on a partial or no meal plan, sign up for the supermarket loyalty card plans, coupon hunt online, and get a decent meal plan together. Planning ahead a little will save you hundreds, if not thousands of dollars on food.
16. Set up an affiliate program during college and get your personal professional web presence going as soon as you can. You’ll have more free time in college than you will after college, so take the time to set up your blog, web site, etc. and develop professional contacts early. By the time you graduate, you’ll be way ahead of everyone else playing the resume cannon game. Get known for something in your field of study or focus early on.
17. Keep hunting for scholarships! Pick a time each week, 1 hour per week, and apply for a new scholarship each week. I guarantee after a year you’ll be happy you did. Better yet, get some friends together and make it a social thing.

Financial Aid Tips – Audio Version, Listen now:

FAP923: Back to school financial tips special

Scholarship Update

Are you working towards a marketing degree that will take you through the constantly evolving world of multi-channel marketing (mobile, web, email, virtual worlds, social media networks, podcasting) in the 21st century?

How would you like to earn a $500 Scholarship and real world experience at the same time?

We will award one (1) $500 scholarship to the person with the highest number of referred sign-ups to ScholarshipPoints as of midnight, September 30.

Details at Scholarship Points.

We are often asked: What loans are available for students with bad credit?”.  In short, your options are limited.

We would always recommend you work on building your credit.  Visit www.studentplatinum.com to learn more about credit, how to build good credit and how to repair your credit if it goes south.

For some detailed information on Bad Credit Student Loans, visit:

http://www.studentloannetwork.com/resources/bad-credit-student-loans.php

There are three primary student loans available – Stafford, PLUS and private student loans.

Stafford Loans do not require a credit check – so you are good there.

PLUS loans for undergrads are in the parents name.  If the parent has bad credit, then ask the lender if you can add a cosigner to the PLUS Loan application.  Generally, the PLUS Loan has lower credit criteria so you may be eligible for the PLUS loan even if you have been denied for another type of loan.

Private Student Loans do require good credit – now more than ever.  This loan is generally in the students name and a parent will act as a cosigner.  If the parent does not have good credit, anyone with a job and good credit can be a cosigner.  Regardless of the cosigner, if the student has very poor credit, the chances of approval are very low.

As always, talk with your financial aid office about your options and other sources of financial aid, including scholarships, grants and work study.

I grew up like most kids, loving the October Halloween month. I had a license to be bad and wasn’t afraid to use it. Snickers, KitKat’s, Reese’s Peanut Butter cups, & Twix were the sweet objects of my affection. And yes, my waistline reflected my sinful indulgence, but I wasn’t trying to impress anyone. Today October holds a much different feel from those young carefree days; a feel more in line with those post chocolate celebratory belly aches, given all the economic woes plaguing our county. And while my waistline is now much thinner, so is my hairline. Stress surrounding the greenback plagues us all.

“I need money for school, please help,” is a common phrase I hear from students each day. And when you come to the realization your money tree has been chopped down by Paul Bunyan it’s a terrifying reality check. I’ve been there myself. I just wish I had the ‘08 version of me to advise the ‘94 version of me, but I digress. I want you to benefit from my infinite wisdom. Here are my “Fab Four” ways to get those funds you need!

Private Student loans

Perhaps the only good thing surrounding an economic downturn is the cost of borrowing decreases, which means lower interest rates for you and me, which makes private loan options more attractive. It’s important to note that most students do require a co-signer for a private loan. Funds get sent directly to you and are great for everyday school expenses. You can also borrow up to $45,000 and repayment does not begin until after you graduate.

To apply for a private loan (click here).

Line of Credit

Bank of America offers a $25,000 line of credit for qualified applicants. Decision in 10 minutes and the funds get deposited directly into your checking or savings account. Best of all you don’t need excellent credit or collateral. Another great perk is you can re-borrow money you’ve already paid back if you get in a pinch.

To apply for the Bank of America Line of Credit (click here).

Credit Cards

Great to have for emergency situations. Also, depending on the card you can score some pretty sweet rewards points such as cash back on gasoline or even World of Warcraft online game time. The Citi mtvU card, our Editors Choice, rewards students for using credit wisely and getting good grades. A lot of cards also offer exclusive savings on merchandise and restaurants as well.

To apply for a credit card (click here).

Scholarships

I saved the best for last. We hold monthly scholarship giveaways for students. Students love it because you don’t need to write an essay or have a certain GPA to enter, but that doesn’t mean everyone has an equal chance of winning. By completing point activities you can accrue additional points which can then be used toward a monthly scholarship drawing. By the way, if you are already a scholarshippoints.com member use this bonus code FOURSTEPS for 20 magical points, and don’t forget to enter this month’s big 10K giveaway – cha-ching!

To become a scholarshippoints.com member (click here).

I hope at least one of these options satisfies you like a king size snickers, and I hope you get the funds you need for school. I want to turn those tricks into treats. Then we can all do the Monster Mash and won’t have to wonder whatever happened to the Transylvania twist!

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?

Related Topics

Why Smart Students Have Credit Cards