Student Loans : News, Updates and Blog Posts

If you borrowed tens of thousands of dollars from someone, knowing you would eventually have to pay them back, more than likely over several years, you would think the person from whom you borrowed would be a high priority. But amazingly, the vast majority of people who borrow thousands of dollars in student loans have no idea who their lender is.

Now granted, if you are still in school, it really doesn’t matter. Your lender only comes into play around repayment time. But if you have recently graduated college and are interested in consolidation or deferment, you may have to contact your lender. So let’s talk about how to do that.

If you have a federal student loan, such as Stafford, Perkins or PLUS, you can visit the National Student Loan Data System and enter your four-digit PIN number that you received when you filled out your FAFSA. If you don’t know your PIN, contact the Department of Education at 800.433.3242.

If you have a private student loan, you can either contact your school’s financial aid office, or request a copy of your credit report from Free Credit Report, which will list your outstanding loans and lenders.

Now that graduation season is upon us, we asked students to share with us the amount of debt they have accumulated (and will soon need to repay). Here are the results of our poll:

It’s awesome, albeit surprising, to see the number of students graduating debt free- conGRADulations! For everyone else, loan repayment might be a growing concern as that 6 month date draws nearer. If you’re concerned about making payments for whatever reason, there are some steps you can take to either lower or postpone your repayment.

Consolidate

First, I would suggest consolidating your loans. Consolidation offers a number of benefits including lower monthly payments; Plus, it makes keeping track of multiple loans easier. To defer federal loans, you will need to contact the Department of Education Direct Consolidation department. To consolidate private loans, grads will need to contact a consolidation lender. Interested? Read more about consolidation in our blog, From our Archives: Consolidation.

Defer

If you are unemployed or do not make enough money to repay loans, I suggest looking into an Unemployment Deferment or Economic Hardship Deferment. Deferments allow you to postpone payment for a certain amount of time, allowing grads a little extra time to get on their feet financially. While available for most federal loans, deferment options vary by private lender, so make sure to ask if this option is available for you!

Here is a link to the Poll – Click Here and Show us your Debt!

I become very, very impatient when someone owes me money. I don’t even like the 10 seconds it takes for an ATM to spit out my cash- feels like an eternity. And I am extra diligent about much larger sums of money, like my student loans. If you’re like me, you might be on pins and needles wondering when you actually receive your Stafford loan.

Your lender (in the case of federal loans, this would be the Department of Education) will disburse your Stafford Loan funds directly to your college or university. The disbursement will occur in two installments – typically in the fall and winter/spring semesters. Your school will take the money and apply it toward what you owe in tuition and fees. If there is any money leftover, the excess funds will either be used to credit your account or paid to you directly. Keep in mind that loans are not free money. They collect interest and need to be repaid, so it’s usually best that if you don’t need them, don’t use them! Contact your financial aid office for information on your school’s specific policy.

If summer classes are a regular part of your course-load, chances are your school divided your Stafford funds up to cover you. If you are taking extra summer classes, your Stafford Loans may not cover them. Be sure to contact your financial aid office for more information.

If your school disburses your funds in October, but you need money for September (to pay for off-campus housing, for example), consider a private student loan to cover any expenses you may have in the meantime. You can even compare private loans to find the best deal for you!

For seniors, graduation is quickly approaching! Unfortunately, so are those pesky loan repayments, yikes! Take a few seconds to vote on our most recent poll to let us (and all those soon-to-be-graduates out there) know how much debt you’ll be graduating with, and see where you fall on the scale!

View Student Loan Debt Survey Results summarizing the results (as of May, 15)

If you’re graduating with loans, make sure to look into loan consolidation to help with repayment!  Still in school?  Find a better way to pay search for scholarships or compare student loans.

For most families, the act of opening the financial aid offer letter is a harrowing one. In just a few short sentences they will see how much a college or university is willing to offer in the way of student loans and scholarships. But what happens when that figure is too low?

Believe it or not, a student aid package that offered less than expected does not necessarily mean the end of the road. In some cases, a borrower can appeal to the school for more money. So how can this be done?

When to Appeal

For starters, strike the word “negotiate” from your vocabulary. If you call a financial aid office and tell them you want to negotiate your student loan package, it will be a very short phone call.  You are not negotiating. You are “appealing.” There is a difference. The first step is to call the financial aid office and inquire about the process of submitting an appeal. Most likely, you will be asked to write a letter explaining, in detail, why you feel the aid package should be reconsidered.

Your appeal letter will explain, in brief, the grounds on which you are appealing the financial aid offer. You should decide early on whether this an appeal for need or for merit, or for both. If it is an appeal for need, you must demonstrate to the school that your federal aid package simply isn’t enough for you to afford attending the school. More than likely, a successful appeal based on need will cover a recent change in your financial situation, such as a series of expensive medical bills or a parent losing his or her job. You will need evidence to back up your claim, including copies of bills and pay stubs.

You may also appeal on the grounds of merit. An exceptional student may be eligible for various scholarships or grants. Look into the criteria for these awards. The best evidence to appeal on these grounds is a stronger scholarship offer from a similar school.

(more…)

Guys, I’m sure most of you are well aware of the option to register for Selective Service (yup, the draft) once you turn 18, but did you know that it could have severe financial repercussions if you don’t? Unfortunately, many students either do not sign up on purpose or simply forget to, however this can affect how much money you get for school!

There is a federal rule that states that “Any man required to register with Selective Service at any time must have done so to receive aid.” If you’re 25 or younger, make sure to register because after this age, it is impossible to register and you will be unable to receive federal aid from that point forward (or at least until the law changes).

Tips to avoid disaster:

1. Even if you’re not planning to go to school right now, still register! You may want to go back for your degree later in life.
2. Don’t assume you’ve automatically registered when you register to vote, not all states do this!
3. Double check that you are registered and get paper confirmation! Government offices do make mistakes, don’t allow yourself to fall through the cracks. You can go to the selective service website to find your name on the list of registered males, and while you’re there, print off a copy to have on hand.

What if you’re over 25?

You’ll have to prove that your lack of registration was not knowing and willful. This means providing as much information as possible as to why you did not register. For example, if you were living abroad at the time, this would be a legitimate reason why you may have forgotten to register. In order to go through with this process, you should contact your financial aid office.

If you are still unable to get federal aid for school, private student loans can be another good way pay for school.

For more information on these Selective Service rules, read this publication from the Department of Education.

Image credit: http://www.flickr.com/photos/erika_herzog/2404484280/

While high school seniors are receiving their acceptance letters and financial aid award packages, they might be exploring the differences between the loans they are eligible for and wondering how to actually acquire these loans. Many students are lucky enough to qualify for Subsidized Stafford Loans, which have a lower interest rate than unsubsidized ones. There are also thousands of students who are only eligible for Subsidized Stafford Loans. If you are a student who is planning on taking out one of these two Stafford loans, there are some things you should know about the process…
(more…)

Applying for federal loans is a common task for most college students, but did you know that when you file your FAFSA you’re automatically applying for federal grants as well? Unlike loans, federal grants do not need to be paid back and are both tax and interest-free. By submitting your FAFSA you are considered for a number of grants including:

• Federal Pell Grants
• Federal Academic Competitiveness Grants
• Federal National Science and Mathematics Access to Retain Talent Grants
• Federal Supplemental Education Opportunity Grants
• Teacher Education Assistance for College and Higher Education Grants

While not all of the grants are need based, you still must qualify in order to receive aid. Eligible students will receive notice of all aid including grants in their Student Aid Report (SAR).

For more information on these grants, check out our page on Federal College Grants and Scholarships at FAFSAOnline.com.

As I’m sure many of our readers out there know, the interest rate for subsidized undergraduate Stafford Loans has recently lowered for the 2010-2011 year. As of July 1, 2010, the interest rate dropped from 5.6% to 4.5% which was a major step forward for federal loans.

Well, lucky for all the students out there with Stafford loans, because it’s scheduled to happen again. The Subsidized Federal Stafford Loan interest rate for the 2011-2012 academic year is planned to drop to 3.4%, hitting an all-time low!

For more information on student loan interest rates, visit Staffordloan.com where you can also read about loan repayment options.

Not everyone is aware of all the loan options available to pay for college. Here are just a few to consider:

1) Federal Stafford Loans – These are federally guaranteed student loans. You can apply for subsidized Stafford loans and the government will pay the interest for you while you are enrolled. This is a great option for students and the most popular loan program available.

2) Parent PLUS Loans – The Parent Loan for Undergraduate Students allows parents to borrow through the federal loan program to pay for their child’s education. The loan is in the parent’s name.

3) Private Student Loans – Private college loans are not sponsored by the government but offer an alternative sources of funds for those that may not qualify for federal aid or who need additional funds. Private school loans are often in the students name with the parent acting as a cosigner.

4) Perkins Loan – Perkins loans are another federal loan for low income students based on eligibility. These loan funds are limited so apply early.

5) Credit Cards – Believe it or not, approximately 30% of students/parents put a portion of the tuition bill on their credit card. While we don’t recommend this option, it is a reality. To find and compare the best student credit cards, visit www.StudentPlatinum.com.

Once you graduate, consider consolidating your student loans to lower your monthly payment. The downside is you will pay more interest over the life of the loan by extending your repayment period. For additional resources, visit: www.studentloans.com, www.collegeloansolutions.com and www.gradloans.com.