Student Loans : News, Updates and Blog Posts

If you’ve ever seen those ads on TV late at night asking, “Do you know where your kids are?” you know what I’m talking about. If you haven’t, well, now you do!

Just as important as knowing what your children are up to at night is the status of your student loans. Specifically, their interest rates and repayment plans. Did you know that because nearly all private student loans have variable APRs, your interest rate could have changed several times in the past 2 years?

One way to make it easier to keep track of your loans is to consolidate them. Of course, there are a lot more benefits than just having one bill and interest rate. Here are some more loan consolidation benefits:

• A credit score boost
• Lowers your monthly payments up to 50% (at the expense of more interest overall)
• The interest rate for private consolidation can actually end up being lower than the average of your consolidated loans (saving money!) based on credit

Sound good to you? If so, then get started on a loan consolidation!

If you’ve heard the word about the reform currently in progress across the country, you probably are aware of the end of the FFEL program and exclusive federal consolidation returning to the Department of Education. If not, read this page on upcoming changes to get acclimated.

One question we get a lot is, “If FFEL is ending, where do we apply for consolidation now?” The answer is Direct Loan Servicing of the US Department of Education. You can apply for consolidation here: Loan Consolidation Center

Make sure to have all your account numbers and payoff balances ready to make the process quick and error-free as possible. Good luck!

If you have recently graduated from college, your student loans are probably fairly low on your list next to finding a job. However, one thing you should keep in the back of your mind is consolidating your student loans once your grace period is closer to ending.

Consolidation has two main benefits that can be of enormous financial help to you both in the present and the future: the improvement of your credit rating and lower net monthly payments. (more…)

There are a great many benefits to consolidating your student loans, such as the convenience of making one or two monthly payments as opposed to six or seven, as well a lower monthly payment. But to take advantage of the perks of consolidation, there are some things not to do:

1. Consolidate federal and private together. While it’s not possible to involve your private loans in a federal loan consolidation, it is theoretically possible to involve your federal loans in a private consolidation. But that doesn’t mean you should. Such a consolidation would do away with many of the benefits of federal consolidation, including better interest rates and forgiveness options. Always consolidate your federal and private loans separately.

2. Consolidate if you are close to paying off your student loans. If you only have about a year or two worth of student loan payments, you may be better off not consolidating. In that instance, consolidation will simply spread out your federal and private loan payments with the possibility of more interest.

3. Consolidate if you are asked to pay a fee up front. Some private lenders may have consolidation fees, but not for federal. Simply contact the Department of Education’s consolidation department at 1-800-557-7392 or visit Student Loan Consolidator for all of your consolidation needs.

ScholarshipPoints code: CONSONOT

It’s that time of the year again folks; the end of finals for the Class of [insert this year here]. If you’re part of the graduating class, you likely have your Commencement soon or have already taken the walk of glory to get your degree. Congratulations!

This post is devoted to you (yes, you!) to make sure that you start off your life as a degree holder right, with as little financial confusion or anxiety as possible. To get started, I recommend you take a second to read my blog post on exit counseling.

Once you have chosen your repayment plan, it is time to consider your current financial picture. Do you have a full-time job lined up already? If not, are you working part-time? (more…)

Federal student loan consolidation is fast, easy, free and highly recommended to lower your monthly payment. Private student loan consolidation is a bit trickier. Here are some notes to remember if you choose to go down this road.

• For starters, not everyone who applies for private loan consolidation will be accepted. One only a few lenders, such as Wells Fargo and Chase, will even handle a private loan consolidation.
• The aforementioned lenders and almost any bank that will consolidate your private loans will likely require a minimum amount to be consolidated.
• If you can get a private student loan consolidation it may lower your monthly payments significantly, but the lifetime interest of the loan will greatly increase. It is highly recommended that once your grace period expires and you begin the process of repayment, that you aim to pay down your private loans as quickly as possible to avoid the spike in interest.

Have questions about private loan consolidation? Visit the Consolidation section of our Financial Aid Forums!

Imagine waking up tomorrow and discovering you don’t need to pay back your federal Stafford, PLUS and Perkins loans. For many Americans, that dream is a reality, thanks to a number of programs that allow you to have some, if not all, of your loans forgiven.

Aside from applying for a loan discharge, which is available only under extreme circumstances, some career paths and post-graduate options will cover the cost of repaying your student loans. Here is an overview of some of the careers that may take advantage of those options:

Public Service Employees: If you work full time in a public service position, and make 120 payments (approximately ten years) on your loans while employed, you may be eligible to have the remaining balance forgiven. Public service positions include law enforcement officers, early education teachers, public librarians, emergency medical technicians and more.

Volunteers: Many volunteer organizations offer stipends and loan forgiveness options if you provide a certain number of hours of service. For example, AmeriCorps will offer $7400 in stipends on top of $4725 to be used toward your student loans, as well as partial cancellation of your Perkins Loan in exchange for 12 months of service. The PeaceCorps and VISTA also offer similar forgiveness options.

Teachers: Under the National Defense Education Act, full-time teachers in an elementary or secondary school for low-income families may be eligible to have as much as 30% of their Perkins Loan forgiven.  Contact your school district’s administration to see which schools are eligible.

Lawyers: Sorry, the ambulance-chasers on TV aren’t eligible. But many law schools will forgive the loans of students who serve as a non-profit or public interest attorney. For more information, contact the National Association for Public Interest Law at  1-202-466-3686. Or, contact your law school’s financial aid office.

Physicians: Physicians who agree to practice for a certain number of years in economically depressed areas may be able to get some of their medical school loans forgiven by the National Health Service Corps. Check with your state agency for similar programs.

There are other options for repaying your student loans, including income-based repayment, forbearance and deferment. For more information on these options, visit our student loan repayment page.

If you are not eligible for any of the aforementioned repayment options, you might consider student loan consolidation, with can turn multiple loans (federal or private) into a low, single monthly payment and possibly lower your interest rate. For more information on student loan consolidation, visit our help page.

ScholarshipPoints code: 4GIVELOANS

Image credit: kelly ann t on Flickr.

There was a great question in our loan consolidation forum this week from a new user with lots of loans from medical school. James recently finished his Master’s degree as a physician assistant (congratulations!) and wrote to us looking for some consolidation advice:

I have the following types of federal loans:

1. Subsidized Stafford
2. Unsubsidized Stafford
3. Grad PLUS
4. Previously consolidated federal loans from my Bachelor’s in Nursing (‘97-’01)

My questions are as follows:

1. Can I consolidate the above 4 types of loans together?
2. When should I consolidate? Before or after July 1st? Does it matter? (Grad school was from 8/07 – 12/09)
3. Who can consolidate? Are there any options now other then the federal government? Will there be lower interest options in the future?
4. I’ve read about the PLUS loan loophole. Should I consolidate my PLUS loans separately to save 0.25%?

(more…)

If you aren’t already familiar with our Financial Aid Forum, it is an awesome resource for answering questions about virtually every kind of financial aid or loan a student can take out toward their education.

We have three dedicated Student Advocates (myself included) that are available Monday-Friday to help out and an informed user base of several hundred people. Between all of us, your question will be answered quickly and accurately (generally within a day or two).

Also, we have a great loan consolidation FAQ page that might be able to immediately answer any questions or concerns you have about the process.

As always, thanks for reading and make a post in our forum if you need help!

It’s true! If you are unfamiliar with Income Based Repayment (IBR), I would recommend reading my blog and then consulting the Student Loan Network’s handy payment estimator chart under the new repayment plan.

Why is IBR better than the normal plan?

There are a couple reasons why. First, IBR takes your income into account when it computes what your monthly payment is going to be for your new consolidation loan. For instance, if you are single and make less than $15,000, you would actually qualify for $0 payments until your income rises closer to $20,000 per year. This income number actually goes up depending on how many people live in your household. Click the link above for SLN’s payment estimator chart for more details.

Second, under IBR you can actually have your loans forgiven and canceled after 25 years (20 starting after 2014) if you never miss a payment during the life of the loan. Kind of crazy, huh? This is a benefit that does not exist in the private student loan world and in some cases the forgiving period can actually be shortened. If you completed your degree in one of the Department of Education’s “hot fields” you can actually get your loans canceled in 10 years instead of 20 or 25…. and it doesn’t even matter how far along you are in paying for them.