Archive for Reference & Education
Student Loans – How Interest Rates Are Set on Federal Loans
Posted by: | CommentsYou’ve got to take on student loan debt these days if you want, student loan
, to go to college unless you are very lucky. Student loan debt is like any debt. The key to how quickly you can pay it off often comes down to the interest rates. For people with federal loans, the good news is interest rates are quirky in a positive way.The economic condition of the United States is supposedly in a recovery from the Great Recession we recently suffered. With business slow and unemployment in double digits, it is hard to make much of an, student loan
, argument that this recovery has really hit most of us. As we stagger forward, things will improve slowly, but a fiscal accounting must take place. That accounting is going to come, student loan
, in the form of higher interest rates. We have interest rates that are so low now that we’ve rarely seen such an economic, student loan
, condition in our history. The Federal Reserve essentially is loaning out money to banks at a zero interest, student loan
, rate. That can’t last. When it changes, rates, student loan
, are going to move up and so are your debt loads. For those with fixed rate loans, the news will mean little since rates will stay the same on the debt in question. For those with adjustable rates, things are going to get ugly. What about federal student loans? Well, I have really good news if, student, student loan
, loan
, you, student loan
, are carrying federal student loan debt. The rates on your loan are not set, student loan
, by the market or some cold bank per se. Instead, Congress actually, student loan
, sets the rates on your loans. The legislative body actually sets a range of rates that can be charged for each loan, but the banks actually issuing the money always [and I mean always!] go with the highest possible allowed rate. The rates can change year to year, but are usually much lower than private loans and such. You can access the current rates for Perkins, Stafford and PLUS loans at the website for the Department of Education. Like all debt, the interest rates on student loans are going to be going up in the next few years as the Federal Reserve raises rates in general. If you have federal loans, you can expect the pain of these increases to be much smaller than with private loans.
Thomas Ajava provides student loan information for USStudentLoanCompanies.com where you can find student loan companies across the country.
Thomas Ajava
articlesbase.com
College Financial Aid: Pre-High School Saving
Posted by: | CommentsAbout, college loan, 60% of all aid is in the form of loans, and increasing.
Saving: For example, if you start saving when your child, college loan, is 5 years old, you will have 13 years to save before your child, college loan, enrolls in college. If you, college loan, can put aside $167 per month – that’s $2,000 per year – you will have saved $26,000 by the time your child begins, college loan, college.
With a 6% return over the thirteen-year period, your $26,000 will have grown into, college loan, $40,000. That $40,000 will be available to help you pay for your child’s college expenses like tuition and, college loan, room and board.
Borrowing:If you choose not to save when your child is young, it is likely, college loan, that your child will have to borrow to help pay for college. For comparative purposes, let’s assume you borrow $40,000 in increments of $10,000 per year for 4 years. Assuming a 6.8% interest rate and a 10 year repayment period, borrowing $40,000 will ultimately cost your child $55,200.
Difference: The difference between borrowing and saving is nearly $30,000 ($55,200 ─, college loan, $26,000 = $29,200). Thus,, college loan, saving beats borrowing hands down.
3. The, college loan, tax system gives incentives to college savers.
Both state, college loan, and federal laws allow families to earn tax-free interest on college savings. The following example illustrates the advantage of earning interest tax free:
Assume when, college loan,, college loan, your child is born you invest a one-time, lump sum of $18,000 in a state 529 plan (see Points 4 – 6 below to learn more about 529 plans). By the time your child, college loan, is ready to enroll in college at the age of 18, you will have access to $63,000 in order to help pay, college loan, for your child’s college expenses.
If the same $18,000 were invested in a taxable vehicle with, college loan, the same rate of return as the 529 plan, after subtracting the federal and state taxes that would be due each year, you would have access to only $43,000 to help pay for college.
The difference, which, college loan, is essentially a government subsidy to promote college savings, is $20,000, all else being equal. Furthermore, some states actually allow deductions for contributions, making the 529 plan even more attractive to college savers.
4. 529 plans are, college loan, the most popular and convenient way to save.
There is, college loan, approximately $100 billion currently invested in state 529 plans.
5. Not all 529 plans are alike.
Each state, college loan, has its own 529 plan. Investment options and fees may vary from state to state, so it pays, college loan, to shop around. A couple of useful sites for comparing the different state plans are savingforcollege.com and Morningstar.com.
Most state plans have websites that include free electronic college saving calculators to help you decide how much to save in order to meet your saving goals.
6. The money saved in a 529 plan is not forfeited, college loan, if the beneficiary does not go to college or gets a full scholarship.
Money saved in a 529 plan may be used to pay the college expenses of other family members, including siblings, parents, cousins and stepchildren. The money can even skip a generation and be used for a grandchild in the unlikely event that became necessary.
7. There is no right amount to save. It depends on your financial situation, college loan, .
8. Do not save for college at the expense of maintaining your normal lifestyle or your,, college loan, college loan, retirement.
You don’t want to short change the amount you set aside for retirement. If you run out of money, there is no such thing as a retirement loan. On the other hand, it is relatively easy to get a college loan.
9. Two ways to save are:
Save what you can afford after taking care of family expenses.
As was stated in Point 5 above,, college loan, most state 529 plan websites have free electronic college saving calculators. Other websites, like finaid.org, have them, college loan, as well. By using these calculators you can, college loan, periodically check to see how well your savings are keeping pace with college costs.
Set a target figure. A number to shoot for is the tuition fee at the major public university in your state. For a more ambitious goal, you might use the out-of-state tuition charge. This higher figure would also allow you to accumulate enough savings to pay for a good part of the tuition cost at a private college.
Most college saving calculators found on state, college loan, websites automatically include information on the current and projected (in-state and out-of-state) tuition rates for the state’s main universities.
10. If you save in a 529 plan and later apply for aid, you may be subject to a very light “penalty” in terms of how much the amount you have saved will increase your expected family contribution.
If the child’s parents are the owners of the 529 plan, they may be asked to contribute some of that money under the rules of the need formula. (There is no such “penalty”, college loan, if the plan is owned by the child’s grandparents. See Point 12 below, college loan, for more on grandparents.) Let’s look at the example in order to better understand.
If you, the parent, manage to have $100,000 saved in a 529 plan by the time your child is ready to start college, the first $50,000 will not be considered at all when calculating your child’s aid award. (This is one of the, college loan, ways the system rewards you for saving.) Only 5% of the second $50,000, or $2,500, will be assumed to be available to pay for college. In other words, the amount of your need will decrease by that amount.
Thus, one could argue that by diligently saving $100,000, you are ultimately, college loan, worse off by $2,500. However, if you consider that you are very likely to have earned around $35,000 in, college loan, tax-free, college loan, interest over the saving period, you will realize that by saving you are actually about $32,500 better off.
11. There are other ways to save besides 529 plans. To look into other options, it is, college loan, best to consult with a financial advisor.
Remember to choose an advisor who in very familiar with all applicable aid rules. The need formula treats savings differently depending on whether the parent or the child is the owner.
12. Grandparents too can help through 529 plans.
Based on a recent poll, two-thirds of grandparents say they are interested, college loan, in helping to pay for their grandchildren’s college education. It is worthwhile to know,, college loan, that money saved in grandparent-owned 529 plans is not considered when calculating the grandchild’s aid award. Furthermore, grandparent-owned 529 plan savings are not counted as part of, college loan, the grandparent’s estate for estate tax purposes.
College Financial Aid: Pre-High School Saving, college loan, (transcript)
I’ve spent the last couple, college loan, months videotaping, college loan, myself giving advice on how to take the SAT, but I know that getting a good SAT score is not all that you need to do to get into, college loan, a good college. There’s a lot you need to know about financial aid and admissions. While I’m not an expert in those fields I have some friends who are and I recently had the opportunity to sit down and talk to Don Betterton.
Don is the former financial aid director of Princeton University. He was there for 30 years in that position. I got to know Don back in the late 80s when he was one of the assistant soccer coaches and I was on the varsity soccer team. Don and I have known each other for a long time, he’s a great guy and I asked him what I could do today, college loan, before my kids are even in high school to help make paying for college easier when my kids finally do get to college.
So I grabbed my video camera and sat down with Don and hopefully you’ll enjoy the conversation.
Karl: So Don I’m excited, I’m about to learn the twelve things I need to know about saving for college for my children. Your first bullet is called putting aside money for college is a good idea, the earlier the better. My question for you would be, who is it a good idea for: me or my children?
Don: Actually it’s a good idea, college loan, for both. What I like to do is compare “Savings vs. Borrowing” because if you don’t save now the chances are your child is going to have to borrow later on. So I have an example here, depending on how old your children are.
Karl: I have a 9-year-old, a 7-year-old, and a 6-year-old.
Don: Okay. Well my example is based on a 5-year-old. So let’s start with that. Thirteen years, college loan, until college, you start putting aside money when your son is 5-years-old. You put aside $2,000 per year over that thirteen year period; you’ve set, college loan, aside $26,000 dollars. The interest accumulation over that period of time means you’ll have $46,000 ready to go to college when he’s 18 years old.
Let’s say you don’t do that, you don’t put aside any money at all. You still need $40,000, now you have to borrow that money. He takes out a student loan, graduates with $40,000 worth of debt. He has to repay that at a 6.8% interest rate over a 10 year period. Guess how much he’ll have to repay?
Karl: $55,200. (laughs)
Don: I think you’ve been looking at that sheet! Anyway, so that’s a good point. Once you’re set with the savings,, college loan, you put aside $26,000 for the $40,000. Borrowing, he borrows the same $40,000 and he has to repay $55,000. There’s almost a $30,000 difference in this example between savings and borrowing.
Karl: Right and I agree with you. I think that if you do the numbers it works out to be $167 per month for me right now. I, college loan, think that if you start putting, college loan, away that amount of money, you just get used to it, you learn to live without it, and before you know it you have this nest egg, college loan, that’s ready for the children and their college education. So just to recap, you’re point number two was saving, college loan, beats borrowing hands down – I agree with you 100%.
Can you explain for me point number three which is, the tax system gives incentives to college savers. What, college loan, does that mean?
Don: Yeah it, college loan, sure does, there’s, college loan, something called the 529 Plan, which the, college loan, government has set up and that’s the provision of the Internal Revenue Service, college loan, . It says you do not have to pay taxes on money put in this particular college savings plan. Not only do you not have to pay federal taxes, but you don’t have to pay state taxes.
So what it means is this money accumulates without any tax payments over this thirteen year period we talked about. It’s a substantial difference if you accumulate money paying taxes every year versus not paying taxes.
An example I like, college loan, to use would be, if you set aside at age 0 when your child is born, $18,000. If you have to pay taxes on that over a period of 18 years, you’ll have accumulated $43,000. If you do it in a 529 plan with all the advantages inherited in that, you’ll actually accumulate $63,000. So it’s quite a difference in your pocket, your out of pocket expense, and in savings in any way that’s taxable versus the 529 plan which are non-taxable in the federal or the state level.
Karl: So really what, college loan, it comes down to is there is a $20,000 difference in your example that would go to me and my child’s education, college loan, versus
Don: Right, it’s a government subsidy for saving for college basically.
Karl: Okay, so your point number 4 is 529 plans are the most popular and convenient way to save. What are 529 plans?
Don: 529 plans are these government sponsored savings plan, which are now by far the most popular way to save for college. I think there’s like a hundred billion dollars in these plans as of the current time. They simply are I think the most convenient, easy way to save for college.
Karl: Now you say government plans, are they federal or state plans for the most part?
Don: The federal government puts in the rules as far as these tax advantages we talked about, but actually the plans are set up within each state, they establish their own. So when they look at 529 plans, you normally start looking at your own state plan because of certain advantages as far as state tax deductions, there may be some scholarship benefits. There’s also a very good website, college loan, called savingforcollege.com and I think it’s worthwhile before one invests in one’s own state plan to at least go on that website and check some of the provisions of other state plans to see whether your, college loan, state is offering the best deal for you or whether you, college loan, might do even better by going to another state.
Karl: Okay,, college loan, you just answered your point 5 which is not all 529 plans alike you should shop around. And, college loan, the website was collegesaving
Don: Savingforcollege.com.
Karl: Sorry about that! Savingforcollege.com. Number 6, what if, college loan, the beneficiary doesn’t go to college or gets a full scholarship? Now you know all of my children are going to get full rides, so this is a complete waste of time for me, but let’s just, college loan, pretend they’re not as special as I think they are!
Don: Well if you can’t use any of your children, do you have any nephews or nieces? I guess is my question.
Karl: I do, I do. Both of my sisters have kids, so I have two nieces, college loan, and three nephews.
Don: Okay well, the way they’ve set up the rules is you initially establish a beneficiary. If he or she does not go to college, has, college loan, a scholarship, you can then move the money around to other beneficiaries, including your whole family: your cousins, your first cousins, or if you want to go back to school you can use it yourself. You can actually skip a generation and it could even, college loan, go to your grandchildren, but we won’t get, college loan, into that right now!
Karl: Well speaking of different generations my parents have at times expressed an interest in helping me save for my children’s education. Is it first of all typical for grandparents, college loan, to want, college loan, to get involved? And if they want to, can they get involved?
Don: Yes. I read a recent pole that says two thirds of grandparents would like to help their grandchildren with college to some extent. A 529 plan is an excellent option for grandparents. We haven’t talked about the effect of the financial aid formula on these savings yet, but there’s kind of a light tax on savings that would be held in the parents’ name. If the grandparents save the money for college, they’re not part of the financial aid system at all. So one, college loan, doesn’t even have to worry about that.
The other advantage of grandparents is as they’re building up their estate and they move this money, none of it counts even though their the owner in their estate. So it’s actually a good estate planning technique as well. And farther down the line, they’ll help their grandchildren, which I’m sure they really would like to do.
Karl: Okay now we talked a little before about what is the right amount, college loan, to save. Now you threw out some examples of $167 a month and I asked you a question: what if I can’t, college loan, save that much, what should I do? The other variable is I don’t know how expensive school is going to be when, college loan, they get to that age. Is there sort of a right amount to save or how do you go about figuring out what the right amount is?
Don: The easiest answer to that is, college loan, simply save what you could afford after you take care, as we talked about before your current living expenses and your retirement protection. If one wants to set a target figure, I think a reasonable one is the out, college loan, of state tuition for wherever your flag ship public institution is. In New Jersey they use rectors as an example; the out of state tuition for a student that comes from out of state and attends rectors is about $17,000 a year currently. If you take that and you inflate it over a period of, college loan, time that ends up being thirteen years using the same 5-year-old example. $168,000 is what you’re facing way down the line. You’d have to put aside about, college loan, $450 a month to meet a target like that over that period of time.
So, some families can’t afford it. If you could afford that, it’s a very good number to shoot for because then if your student stays in state that amount of money would probably pay for tuition, plus room, plus board and if they go to a private institution, it will probably pay a good part of the private institutions tuition. So it’s a reasonable target figure. It can be expensive but if that’s not possible, any amount you save is better than not saving at all.
Karl: Don, one last question on a topic that we didn’t really cover I don’t think in the last segment. Will I ultimately be penalized if I’m a good person that saves and does everything I’m supposed to when I get to that financial aid award when my kids get to school?
Don: Yeah that’s a really good question and I hear that quite a bit. Am I penalized, college loan, for saving? Whether it’s in a 529 plan or any other form of savings the financial aid formula is really fairly light on how they treat savings. Let, college loan, me give you an example:
If by the time your son gets to college, you have $100,000 in some form or another savings,, college loan, investments, 529 plans, the financial aid formula first said you can reserve $50,000, college loan, that we won’t even look at. So now they only look at $50,000 of your $100,000. What’s called a tax rate on that, the amount that’s added to your contribution is 5%. So going through the math 5% of, college loan, $50,000 is $2,500. So you’re contribution is now going to be $2,500 greater because you have $100,000, so I think that’s fairly a light treatment of the savings. As a matter of fact, if the $100,000 gained some interest during the years, chances are you can simply pace some interest off the top of it and never actually have to touch the principal at all. So whether it’s 529 plans or any other form of savings, it’s a good idea enough that the financial aid system treats it fairly lightly.
Karl: Awesome! Thanks Don I really appreciate your time and your knowledge and your willingness to share with me.
Don: Thank you.
Karl Schellscheidt
ePrep
www.eprep.com
Copyright 2006 – All Rights Reserved, ePrep, Inc.
Don Betterton
Karl Schellscheidt
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Student Loan Help: One Crazy Way to Pay It Off Fast!
Posted by: | CommentsIf you need student loan help because you are drowning in student loans from college, you’ll find some ideas here. You’ll find a bonus second method right after it with solid tips in case you don’t like the first one.
And what with all the federal bailouts, students could use some help, too. Especially those students who borrowed more than they should have.
Here you have one of the best, quickest and craziest ways to get rid of that student loan debt or consolidation loan you’ve ever, student Federal loan
, seen. This method won’t necessarily be your first choice, but read on.
Super Fast Student Loan Help Method: Credit Swaps
Many Wall Street high rollers used credit swaps, now you can, too.
Get as many credit cards as it takes to payoff your student loans. Don’t charge anything on them! Nothing! Until you have enough, student Federal loan
, to pay for all of your student loans.
Once you have enough, take out cash advances on your cards or just use the little checks they send you. Pay off your student loans as fast as you can get cash advances.
You have to do it all at once, or you’ll have more payments, more debt, and more problems.
Voila! No student loans! Now you can declare, student Federal loan
, bankruptcy like everybody else.
Possible Flaws in the Method
Perhaps you can see the flaws in this method. First, using a loan to pay off a student loan may not be the best idea.
If you don’t get enough new credit, you will definitely have double, student Federal loan
, the loans. Borrowing more money, you have to agree, is probably the worst way to get out of debt you can find.
Last, you may have noticed that for this method to work, you have to declare, student Federal loan
, bankruptcy. That will haunt you for years, and who wants, student Federal loan
, to be haunted?
Okay, not the best way to get student loan debt help. Let’s consider some other options.
More Options
If you are like most people, you have between $10,000-$30,000 of student loans. About $19,000-20,000 is average, by the way. You could look at it like a car, student Federal loan
, loan, but instead of a car, you have a cool, sleek diploma.
- If you have a great job, student Federal loan
, with beau coup extra money,, student Federal loan
, just pay it off.
- You can move to a smaller place, send you extra money to pay down your student loans or consolidation loan.
- You can stop putting money in your 401K or IRA, if you still are, and pay off your student loan. Sounds drastic, to stop contributing, but if you need to pay off a loan, it works.
Paying off loans can really put a crimp in your life. On the other hand, getting rid of one by discharging your student loan feels great and puts on more solid footing.
Need more info? Come to http://www.beat-tuition.com/student-loan-debt-help.html and read more zany ways to pay off your student loan.
Kevin Ihrig
articlemarketer.com
Paying For College
Posted by: | CommentsPaying for college, college loan, is a arduous undertaking these days. It’s not easy to pay for college because the costs of an education are now higher than they have ever been. When you factor in the terrible economy, it’s even more difficult to fund a college education.
If you want to afford college, you are going to have to come up with a lot of extra, college, college loan, loan, money. Here are some ways.
Parent Support
The traditional way to pay for college was to have your parents foot the bill. But these days, fewer and fewer parents are, college loan, covering the cost of their children’s education. In fact, many parents are worrying about keeping their homes – not funding their children’s education. If you can get parents to contribute money for college, great – but if not,, college loan, you will have to come up with the money yourself.
Federal and Private Student Loans
Loans, college loan, are a great way to pay for your college education. If you want to get a loan, it’s fairly easy to pursue federal loan funding. Pretty much every person who applies for a federal student loan will qualify. If federal loans are not enough to pay for your education, you are going to have to look at getting a private student loan. Keep in mind that while you can pay for your entire college degree with loans, you are going to have to repay the full amount plus a healthy amount of interest,, college loan, college loan, . It makes sense to try and get other funding first and if you need more money, then get a loan.
Grants and scholarships are one of the best ways to pay for college, college loan, because this money doesn’t not need to be repaid. Unfortunately, that also means that there are a lot of other people applying for the same grants so the competition is fierce.
Paying for your college education is no easy task, but it is possible – just explore all the options out there!
Need to pay for college as a single mother? There are plenty of organizations out there that offer single mom assistance online — just look around.
Johnathan D Davidson
ezinearticles.com
Choosing the Right College or University for Your Student
Posted by: | CommentsCongratulations! Your child is in the last year of high school. It won’t be long now until you send him off to your alma mater or better, college loan, yet, that prestigious private school. But wait! It is often tempting for a parent, college loan, to select a college that is prestigious or one that is the least costly (neither one of these choices is bad in themselves). However, if the college does not meet the career goals or educational needs of the student, don’t fit a square peg in a round hole. You will just end up wasting money or making your child terribly unhappy.
If your child is looking to go directly into a skilled profession, a technical or community college may provide him the skills he wants. However, if he is looking to go into a profession that requires a four-year commitment, he needs to, college loan, go to a four-year university. You need to talk with your child about what he is looking for in a college and what his goals are for his career. Talk about about the learning and living environments and arrangements. Don’t be afraid to talk about money concerns and financial aid. Read the literature from the colleges and universities. This is a very important decision. If you have these honest conversations early in the junior or senior year of high school, you will be so much further ahead when you try to make a final decision.
Public vs. Private Schools
ท Public colleges or universities receive their primary funding from the states they, college loan, are located in – the other portion comes from tuition, student fees and endowments from alumni, friends and, college loan, businesses. Students are eligible to receive federal financial aid, scholarships and loans.
ท Private, college loan, schools generally cost more because they do not receive the same primary funding from the state and federal government. Most of their funding comes from tuition and fees paid by the student or through endowments and contributions from alumni. Students are eligible to receive federal financial aid, scholarships and loans, college loan, .
Technical Schools
Technical Schools are schools that provide job training or occupational training:
Career Training certifications (less than two years)
ท Associate, college loan, of Arts (A.A.) or Associate of Science (A.S.) degree
ท Less costly than a four-year school
ท Can be public or private
Community/Junior Colleges
Community/Junior Colleges are schools that provide students with a two-year program:
ท Associate of Arts (A.A.) or Associate of Science (A.S.) degree
ท Programs that can be transferred, college loan, after two years to four-year schools
ท Worker training and retraining certification, college loan, programs
ท Occupational, college loan, and technical programs
ท Less costly than a four-year school – and that’s a big plus for some people.
ท Liberal arts courses (psychology, sociology, math, English, foreign language, etc.).
ท Enough training and education to enter directly into their chosen field.
ท Can be public or private, college loan,
Some programs strictly prepare students in their career choice similar to a technical school.
Universities/Colleges
Universities/Colleges, college loan, are schools that can award a two-year associate or four-year bachelor’s degree:
ท The Bachelor of Arts (B.A.) or Bachelor of Science (B.S.) degrees are the two most frequently awarded,, college loan, but a variety of bachelor’s degrees by other names are also granted. (bachelor’s degree programs in some fields of study or at some institutions can be longer than, college loan, four years).
ท Broad selection of academic programs
ท Advanced, college loan, studies such as the master’s or doctorate degree.
ท Four-year institutions, college loan, cost more than two-year colleges (costs are based on tuition, room, college loan, and board and student fees)
ท Can be public or private
Another consideration: If your child needs academic remediation in certain subjects, make sure the institution will provide support so that your child will have academic success.
Karen L. Williams is the author of Preparing You and Your Child for College: A Black Parent’s Guide and the author of the weekly blog College Guide for Parents http://www.collegeguideforparents.blogspot.com
Karen Williams
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Student Loan to Help You Obtain Higher Education
Posted by: | CommentsIf you want to fulfill your dreams of higher studies and do not have enough financial means for it,, student loan
, you can avail a student loan to help you meet your educational expenses.
As the cost of higher education is spiraling up everywhere around the globe, it is becoming quite difficult for a person to get higher education with his own means. This necessitates, student loan
, student financial aid in form of student loans or scholarships.
Various loans are issued to students in order to enable them meet their educational expenses so as to ensure that, student loan
, they can smoothly, student loan
, continue with their higher studies. Such loans are known with different terminologies such as school loan, college loans, student loan or education loan, student loan
, .
Interest charged on these student loans is very nominal, student loan
, and sometimes they are also interest free. These are unsecured loans and students need to pay it back only after the completion of their degree within a time frame decided at the time of obtaining the loan.
Many students have been able to complete higher studies with the help of these loans, and repay these loans after taking up a job. This also helps in raising the self esteem of a student as he is able to meet his own educational expenses. They also gain a sense of pride of having, student loan
, completed their studies on their own means. Repayment of loan in time increases the students sense of pride and also improves his credit rating.
Thus opt for a student loan today and complete your education without any tension of money.
Anita Agrawal is your guide for student loan help and you can find tons of useful information at her website http://student-loan-help.com/ ranging from information on different types of loans, loans refinance and consolidation of loans.
Anita Agrawal
ezinearticles.com
You Need College Scholarships to Pay For Your Education – Here’s Why
Posted by: | CommentsMost people do not understand the different types of funding that are available for students when they go to college. There are three specific types including college loans, grants, and scholarships. Here are a few, college loan, reasons, college loan, why obtaining scholarships for your college education is the best choice and two tips on how to achieve obtaining them.
College loans are, college loan, an easy way to obtain a educational funding. You meet with your counselor at the University. They will help you set up an appointment with a financial aid advisor. This advisor’s job is to help you find funding that will allow you to obtain your college degree. The unfortunate thing is that one of the easiest mistakes that all the students make is signing the papers and not realizing what kind of problem they have created for themselves, college loan, in the future by obtaining a student loan.
This form of funding must be repaid. It also comes with an interest rate that occurs even while, college loan, you’re going to school. Although you can make payments on this interest while you are attending college, you will still end up with a substantial amount of debt once you have left the campus and obtained her degree. Your best bet is to stay away from this type of funding and look toward others.
Grants are a very popular way to pay for college. You can obtain a Teach Grant if you are looking at becoming a teacher. Although this is probably not recommended in very populated states such as California which have been pushing the need for teachers and creating an overabundance of qualified professionals that may have wasted their entire education to stand in line with others just like themselves, it may be applicable depending upon the level of your degree in other states to simply obtain an emergency credential and not waste your time finishing the credential process.
Pell grants are very popular because they are free sources of money. They will pay you several thousand, college loan, dollars each year to go to college and this money never has to be repaid. It has recently been increased because of the federal stimulus package, college loan, but there is the possibility that as educational costs continue to rise, it may, college loan,, college loan, only be effective for those obtaining an Associates degree and, college loan, not any of the higher degrees which will allow you to obtain higher-paying careers.
Your best, college loan, bet may be to get a scholarship. The, college loan, kind you, college loan, want to focus upon is a full ride scholarship program that will pay for your entire college education regardless of the amount. This can be obtained based upon your areas, college loan, of expertise outside of the classroom as well as your academic performance. The most well-known kind are athletes that received for rides because of their athletic prowess. Others may be obtained because, college loan, of academic achievement and community service.
The only caveat to these types of programs is that they require a regular checkup in regard to the grade point average that you have and also may require you to participate, college loan, in functions related to the group or private institution that has provided or is providing the funding.
Other than that, scholarships all the way to go. Stay away from student loans as long as possible and if you can qualify based upon your social economic status, you may receive the Pell grants as well. Take the time to look for the best ones suited for you and your academic direction. This will ensure that you have the best qualifications possible to obtain the funding that will pay for your entire college education.
If you would like more info on scholarships for college, go to: http://www.get-scholarships.com
Felicia Ramone
ezinearticles.com
College Debt – Where to Draw the Line
Posted by: | CommentsI still remember a few years ago when in an online discussion a student asked, “is a hundred thousand dollars a lot of money to borrow?” The question nearly knocked me out of my chair. I know I’ve become desensitized, college loan, when the question now is “is $250,000 a lot of money to borrow?”, but I only shake my head. Students in particular need to get an understanding of what is reasonable debt, and what is a life-killing nightmare.
A good place to start is a college debt calculator like the one at Collegeboard.com. Calculators like these give students, college loan, and parents a much clearer picture of just what their student loans are going to cost them over the long term.
Let’s look at an example… According to the National Association of Colleges and Employers (NACE), the average, college loan, 2008 starting salary for a college graduate (B.S. in Business Management) is around $43,800. Typical monthly take home pay for that level annual income would be about $2,823.
If a student took out only the Stafford loans (typical loans included in the financial aid package) and graduated after four, college loan, years with $27,000 in debt,, college loan, then his or her monthly payments on those loans would be $311 per month. That’s just about 11% of the graduate’s total monthly take home income. 11% is considered pretty reasonable by most experts.
Now what if the student borrows that $100,000 as I mentioned in the first paragraph? We’ll be generous and assume they can get the additional $73,000 at the same interest rate as, college loan, the Staffords (in reality, the interest rate will be higher). The graduate’s monthly payment is now $1,151 every month. That payment represents over 40% of their monthly take home income. That kind of payment is insane. There is no way a newly minted college graduate is going to be able pay for those students loans and cover, college loan, the cost of their rent, their car,, college loan, their utilities, their groceries. It’s just financial suicide.
Before you decide that you just can’t live,, college loan, college loan, without the degree from a college that is going to put you in the hole above you neck, you better, college loan, get a handle on what the real cost of that debt will be.
http://www.realcollegesavings.com provides more information on the college funding and selection process. Download the free report “The 14 Great Myths to Paying for College” while you are there.
From Scott Anderson – President of College Financial Strategies and Real College Savings
Scott A Anderson
ezinearticles.com
Choosing A Student Loan For College
Posted by: | CommentsWhen it’s time to pay for a college education, a simple 1-2-3 approach can help students and families navigate the often confusing maze of financial aid information.
First, investigate money that does not have to be repaid, such as scholarships and grants. This type of funding is available, college loan, from a variety of sources, including federal and state governments and private sources such as employers,, college loan, professional associations, as well as educational institutions. The Internet can help in conducting your search. For instance, Sallie Mae, the nation’s leading provider of saving- and paying-for-college programs, provides online support through its CollegeAnswer.com Web site, which has access to an award database containing more than 2.4 million scholarships worth over $15 billion.
Be Debt Smart
The second step in the paying- for-college process is to apply for federal loans, which typically have below-market interest rates and more flexible repayment options. Says Martha Holler, spokesperson for Sallie Mae, “Even if you think you are, college loan, not eligible for federal money, you can’t be sure until you try. Complete the Free Application for Federal Student Aid (FAFSA) to begin the process.”
After free and federal money options have been exhausted, students and families may find they still fall short in terms of college financing. Private, or alternative, loans, college loan, can help fill that gap. A variety of private loans exist today, each with its own requirements, features and borrower benefits, depending on the lender. Because the relationship, college loan, you establish with a lender is likely a long-term one, it’s important to choose, college loan, a lender with a reputable brand name, as well as industry experience.
Do Your Homework
As part of an ongoing effort to educate students,, college loan, parents and graduates about managing debt and understanding credit, Sallie Mae recently launched its Be Debt Smart campaign.
“Before choosing any student loan, become educated, college loan, on the options available,” says Holler. “Most, college loan, important, know how much money you need, college loan, up front so that later on you are not saddled with more student loan expense than is necessary.
“For many students, college is a crash course in personal finance 101. It’s important for both students and parents to understand the full effect of their college, college loan, spending and make wise choices now that will help them later,” Holler adds.
Wendy Mitchell
articledashboard.com
5 Things You Need to Know Before Securing Any Student Loans
Posted by: | CommentsIf you are high school senior or a college student you most definitely should have your attention on your financial condition, student loan
, . If you don’t instead of majoring in your field of choice you will be majoring in college debt. Federal student loans are offered to most students, student loan
, entering, student loan
, college. Many students would not be able, student loan
, to attend their chosen College or University if it were not for College Loans. For that reason so many students get into large amounts of debt and have problems with student loan repayment after graduation, student loan
, .
1. Student Loans are YOUR responsibility
Often Students are so desperate to attend college they sign their lives away not knowing the loans will have to be paid back by YOU.
2. The Difference Between Student Loans
Subsidized loans are not due until 6 months after the last day you attend school. The interest is paid by the government while you are in school. Unsubsidized loans are due, student loan
, when the loan monies are disbursed. Payments on the Principal can be deferred until graduation however the interest accrues from the day the funds are released. The interest can be deferred also, however keep, student loan
, in mind that the interest can be capitalized meaning it can be added to the principal and the new amount will be used in charging interest on your loan.
3. Loan amounts can increase each year
Student Loan limits increase each year. While this is good in that you can borrow more it is bad for the same reason. Please keep in mind the more you borrow the more you will have to pay back.
4. Failure to Pay Your Student Loans will Ruin Your Credit
Upon graduation the excitement of finally being a college graduate can be clouded by the fact that you have a large amount of student loan debt. If you do not make these payment it will be reported to the credit agencies .Negatively affecting your credit score. Your credit score is a valuable asset when it is a positive score. It allows you to buy a house,, student loan
, buy a car etc. There is no statute of limitations for the repayment of Student Loans. It can be reported to the Credit Agency for the rest of, student loan
, your life.
5. Deferments Can Be Dangerous
There are all types of deferments available, student loan
, to you upon graduation if you are unable to make loan payments. While a deferment is a better option than not making your payments at all, they should ONLY be used when you absolutely can’t make the payments. While, student loan
, in deferment interest accrues on the principal and any capitalized interest. Your debt will continually increase while in deferment. Making your repayment period longer
Remember loans are just that LOANS . They have to be paid back by you upon graduation. You can only be in forbearance or deferment for so long before the interest and principal, student loan
, payments, student loan
, start to become a major financial barrier. You do not want to go into default and have that on your credit report. If you must take loans please keep in mind that you will be paying them back along with, student loan
, trying to take care of your living expenses. Keep track of your, student loan
, total amount and make a plan to pay them back and stick to it!
Marpessa Oliver,
National Scholarship Service
Student Loan Information:
http://www.nssfns.org
Marpessa Oliver
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