Source: The Boston GlobeOther colleges, particularly those whose students rely heavily on financial aid, said they are as worried about their students' finances as their own. Boston College has called for a 2 percent budget cut to reinforce its financial aid reserves, and other schools, such as Princeton and Tufts, said they will spend millions more on student assistance next year.
Colleges are expecting a sharp increase in financial aid requests next year because of rising unemployment, declining home values, and the scarcity of private loans. (Government-backed loans are expected to be widely available.)
"We're not agonizing over the endowment losses," said Bob Brown, president of Boston University, which froze hiring and imposed a moratorium on all new construction projects in October. "All of our anxiety is around our students, and their financial ability to attend. That's an absolutely fundamental shift from the past few years."
Tuesday, December 9, 2008
Tight Budgets, Rising Tuition Spur Demand for Student Loans
Monday, December 8, 2008
General Types of Student Loans
Education, beyond that offered by public school systems can be a bit expensive. As a result, most students might need some amount of external funding to further their higher education plans. Grants and scholarships may help cover a part of the expenses, but then that privilege is available only for a cream of students.
Not everybody qualifies for grants and scholarships. Student loans help to solve this incongruence by offering a level playing field for all the student classes. A variety of student loans exists both federal and private and for a prospective student, it is just about finding a scheme that best suits their requirements and expenses.
Student Loans, as mentioned already, are either federal or state funded, or those offered by private parties and non-profit private institutions. Starting with the former, the Federal Student Aid or FAFSA can be applied online, and the process is quite easy as well.
Another thing to consider is that the applicant must provide accurate and genuine information while filling out the application. Also, it is advisable to apply for Federal student aid as early as possible, after January 1st.
Another useful federal financial aid package is the Federal Parents Loan for Undergraduate Students or PLUS that considers the good credit ratings of the parents in exchange of financial help for their children.
These low interest loans cover everything from tuition fees and books to housing, library, and supplies. PLUS also can be applied online by filling out the necessary formalities.
Private student loans, on the other hand, are offered by private banks or other financial institutions, and do not have any federal government involvement in the entire process. This type of loans are issued for both undergraduate and graduate students and most avail them to cover the expenses that cannot be otherwise paid by federal aids.
But, unlike federal student loans, where the applicant can know before hand if they qualify for the loan, private student loans do not offer any prior hints and the final approval is solely based on the credit review of the applicant or applicants parents by the lender. If the credit rating of the applicant is not acceptable for the bank, they will reject the application then and there.
One more aspect about private student loans is that it is issued in a first come, first served basis, unlike the federal student loans that is given away on applicants needs. So, if you are planning to apply for a private student loan, start reasonably early.
The best place to look for private student loans is the web. There are many private banks out there offering student loan schemes, hence, it is advisable that a prospective applicant may perform some research and comparison game before choosing the one scheme that suits his her needs requirements fully.
Taking references from previous borrowers is also a good option. Finally, before submitting the application, make it a point to read the fine print thoroughly. This helps solve a lot of technical problems that could arise at a later stage.
When deciding upon a loan its important to understand the difference between types of interest rate repayments. There are two specific types of repayment options and its important to factor these into your final payment schedule.
Subsidized loans are loans which generally have some or all of the interest paid by someone other than the borrower. This type of loan is generally used whilst the student is still in school. Examples of this type of loan would include the Subsidized Stafford Loan and Perkins Loan.
Unsubsidized Loans are loans which accrue interest from the day that the loan is disbursed to the borrower (or their school). Although the loan may be completely deferred (Example: you dont make payments for a period of time) and you may not be currently making payments the interest will still be accruing on the loan amount. Examples of unsubsidized loans include the Unsubsidized Stafford Loan, Parent PLUS Loan, private alternative student loans, and student loan consolidations.
You will need to make the decision as to which repayment schedule you make at the disbursement point of the loan. I would always counsel that it is better to struggle and slowly pay off the loan interest rather than deferring all payments until graduation. Often graduates are forced into bankruptcy due to deferred student loans.
Ultimately, you have alot of research to complete before diving into the application stage. Do take your time and establish exactly what you are seeking as it makes it all the easier when dealing with the respective loan companies.
Hopefully your loan process will be as painless and easy as your studies shall be.
About the Author:Steve Rowland is the administrator and web master of Student Loan Consolidation Center and aims to make it significantly easier for intending students to access higher education.
Steven is also the editor and webmaster of Expert Guides a site specialising in providing guides and free articles.
Article Source: http://www.articlesbase.com/non-fiction-articles/general-types-of-student-loans-108016.html
Student Loan Consolidation Programs - Which One Is Best?
As parents, we start to teach our children to be responsible for themselves throughout their childhood. We teach them to go to school, and that college is a very important part of their education.
Student loan consolidation programs are available, but it takes some research to figure out which education consolidation loan is right for you, or your children. Here is some helpful information.
We try to prepare them for almost everything. We are proud of them when they graduate from high school, and are even prouder when they exceed all expectations and seem to sail through the curriculum with what seems like almost no effort at all, oblivious to the mounting costs of higher education.
When a student is faced with having to pay back all of the loans that have accrued for four or more years, they can be overwhelmed at first. It is important for them to understand what all of their options are.
Upon graduation, a student goes out into the world with the optimism of finding employment in their chosen profession and will maintain a certain lifestyle.
When he or she is faced with the reality of the real world he or she is inundated with not only weekly and monthly bills, but also paying back student loans. They find themselves disillusioned with the prospect of years of debt repayment and see no end in sight.
Government and private lenders realize that the repayment process can be too much for some to bear, and special repayment programs have been developed to help alleviate the hardship that the repayment process may cause.
Student loan consolidation was created to combat the rising cost of higher education and make the repayment process more bearable.
Student loan consolidation can be done either through the government or through private lenders. It is a process where all of the student loans are consolidated into one loan, making the repayment process easier and less stressful for the student. It allows the student to save hundreds of dollars each month, allowing them some breathing room while paying back the loans.
There are four major types of student loan consolidations in the United States today:
1. The first is a standard student loan consolidation. This is when a student has employment and knows that they can pay a certain amount each month toward their student debt. It has a fixed interest rate so the student does not get any surprises when the bill comes in every month.
The repayment period for a standard student consolidation loan is ten years. When the payments are stretched out over this period of time, the payment amount is usually very manageable.
2. The second type of student consolidation loan is called an extended repayment plan. This type of loan is comparable to the standard consolidation loan however the repayment time is extended up to thirty years.
It is important to note that with the extended loan, there are interest charges throughout the life of the loan and can add up to more than the student originally owes in school debt.
3. The graduated student consolidation loan was created specifically for students who have employment upon graduation. It is a loan that the repayment process is designed individual's pay rate and usually the payments start out very low, and increase in two-year increments.
The increase is based upon the premise that in the workplace, raises and promotions occur often. The repayment time for a graduated student consolidation loan can be anywhere from fifteen to thirty years.
4. The most involved form of student consolidation loan is called a contingent plan. It is a long and complicated process where financial information is obtained from not only the student, but also the family as a whole.
When all the information is obtained, a repayment amount is figured. Because this type of loan is long and involved, it is only used when the student does not qualify for any other type of consolidation loan.
It is important to remember that any type of education consolidation loan comes with an interest rate. Determining what the interest rate will be depends on the student's circumstances and what type of loan they are applying for.
It is also important to be informed and understand you are signing a legally binding agreement and that repayment must be made every month.
Student consolidation loans can be obtained through the government or through private lenders. It is recommended that if obtained your tuition through a private lender, that you obtain a student consolidation loan through that lender.
It is crucial that you research your options very carefully and understand all of the terms and condition of your consolidation loan.
Although it is an option to repay your student consolidation loan early, for most students, it take years to fully repay their debt.
Ken Black is the owner of Debt Relief Today. If you need to consolidate your student loans, be sure to read what your options are at : Student Loans Consolidation.
Article Source: http://www.articlesbase.com/non-fiction-articles/student-loan-consolidation-programs-which-one-is-best--126249.html
Nextstudent’s Student Loan Blog Posts Latest Financial Aid News
After almost two years of reporting on the latest in student loan legislation, federal financial aid policy changes that affect college students or those that are college-bound, and a myriad of other topics that make life easier for students, the NextStudent Student Loan Blog will celebrate it’s two-year anniversary at the end of this year. During that time, the blog has delivered relevant content and news updated daily that keeps college students and their parents informed on current issues and such changes as student loan interest rates that affect the college experience and the planning process.
With so much confusion abounding regarding the issues, NextStudent’s Student Loan Blog is a clear voice that cuts through the chaos and explains what is happening in a succinct manner, even in the midst of hot issues that generate heated debate. In fact, the blog is a key resource for college students and their parents, helping them keep track of crucial student loan deadlines, new developments within the Department of Education, student loan consolidation information, and serves as an educational tool for the industry.
Weekly Format Explores Pertinent Issues
Each day, the focal point is a slightly different angle on student loans as follows:
Monday: “Student Loan News”
Tuesday: “This Week in Student Loans”
Wednesday: “Student Loan Legislation”
Thursday: “Student Loan Advice”
Friday: “Campus Life”
Helpful Topics Educate Students
While not just about financial aid and student loans, many postings center on helpful campus life topics such as conducting job searches, getting an ideal internship, and other savvy subjects like online social media. Some of the recent postings:
“From Classes to Cash: Landing the Gig that Pays the Bills after College”
“Student Internships: Pay to Get Paid What You’re Worth?
“Give Yourself the Best Shot at Federal Student Aid: Submit FAFSA Soon After Jan. 1”
“Failure Is for Freshmen, Success Is for Seniors: What I Learned at College”
“Should Undocumented U.S. Residents be Eligible for In-State Tuition Rates?”
“‘MyNews’ for MySpace Coming Soon”
“Starbuck’s New Record Label?”
Commitment to Education Extends to Customer Service
NextStudent believes in educating parents and students with online communication tools such as with the Student Loan Blog. This commitment to education extends to its dedication to excellent customer service as exhibited by personally assigned Education Finance Advisors who take clients through the entire financial aid and student loan consolidation process from start to finish. Whenever new clients contact NextStudent, they receive their own personal representative who will address their questions and assist them in getting the funding they need for school.
NextStudent believes that getting an education is the best investment you can make, and it is dedicated to helping you pursue your education dreams by making college funding simple. Learn more about student loans, private student loans, and student loan consolidation at NextStudent.com.
Jeff Mictabor is an enthusiast on the topic of student loan issues in the news. He has been writing for the past 10 years for a variety of education publications. He now offers his writing services on a freelance basis.
Article Source: http://www.articlesbase.com/college-and-university-articles/nextstudents-student-loan-blog-posts-latest-financial-aid-news-138080.html
Student Loan Repayment Simplified With Nextstudent’s Federal Consolidation
Are you getting ready to graduate? Well, along with college graduation comes the much-dreaded student loan repayment. If you were lucky enough to qualify for subsidized student loans, the government has been paying the interest on your student loans through school; if you had to take out unsubsidized student loans, your interest has been accruing. Either way, six months after graduation your grace period ends and it is time for you to begin repaying your student loans.
NextStudent, a leading Phoenix-based education funding company, recommends that you start shopping around for student loan consolidation loans as soon as possible. Student loan consolidation is a great way to manage your monthly student loan payments. Not only will you lock into one loan at one fixed interest rate, it also is possible to reduce monthly payments by up to 60 percent and eliminate the hassle of dealing with multiple payments to different lenders.
Do Your Research before Selecting a Student Loan Consolidation Lender
Frequently, college financial aid offices offer students a list of Preferred Lenders for all of their financial needs, from Stafford loans to student loan consolidation loans. However, students are not required to work with the lenders on those lists and instead should shop for a company that best suits their needs.
Just like every student is different, every lending company has its own character, ethical standards and quality controls. Borrowers should be selective and choose their lender carefully, making sure to consider and compare the reputation and integrity of the company, level of customer service provided, and the individual student loan consolidation incentives offered.
NextStudent’s LOCKED Discount
The federal government sets the base interest rate on all student loans, including student loan consolidation. The only true differences the consolidation loan lenders provide are the incentives offered by each company. For example, in an effort to extend significant savings to borrowers, NextStudent offers a 1 percent LOCKED interest rate discount after 36 consecutive on-time payments, which borrowers retain for the life of their student loan, while other lenders may revoke their benefits for a single late payment. NextStudent also is committed to providing outstanding customer service and the best incentives in the industry.
Some of NextStudent’s Federal Consolidation Loan Benefit Packages:
Package #1
- 1 percent LOCKED interest rate reduction after 36 on-time payments
- .25 percent interest rate discount for Auto-Debit payments
- 2 percent interest rate reduction after 36 on-time payments (not locked)
- .25 percent interest rate discount for Auto-Debit payments
About the Author:
Jeff Mictabor is an enthusiast on the topic of student loan issues in the news. He has been writing for the past 10 years for a variety of education publications. He now offers his writing services on a freelance basis.
Article Source: http://www.articlesbase.com/education-articles/student-loan-repayment-simplified-with-nextstudents-federal-consolidation-146168.html
Student Loan Consolidation Reduces Monthly Outgoings When It Matters
Student loan consolidation provides students with many benefits even if they are making current monthly payments and not experiencing any difficulty doing so. Students can make their monthly bill payments a lot simpler with a student loan payment to a single lender, and the rate on Federal Consolidation Loans are fixed during the lifetime of the loan.
Ease the Pressure on Your Monthly Budget
By consolidating loans, students will be able to ease the pressure on their monthly budget by 10 to 60 per cent reduction in their monthly budget. In fact, students could also save money by using their student loan payment savings to pay off their credit card debts, and consolidation will also help the students' credit scores as well as debt-to-equity ratio.
No doubt, expanding the repayment period may result in added total interest payments, but there are no prepayment penalties for faster repayment and thus allows students to pay off the loan in a shorter time frame, and hence save on total interest payments. The interest rate may be calculated by taking the weighted average of the interest rates on each loan that is to be consolidated, and then rounding off to the nearest eighth of 1 or 8.25 per cent, whichever is less.
Though one may need to consult a tax advisor, usually student loan consolidation allows students to deduct tax paid on Federal Consolidation Loans. Student loan consolidation will help the student to lock in a lower rate of interest as well as provides for many other incentive features.
Student loan consolidation is the easiest way to reduce student and school loan debt, and it results in lowered debt as well as payments in case the average interest after consolidation is less than it was before. One can think of it as being refinancing one or a group of federal student loans at reduced rates of interest and it is much like refinancing a mortgage loan at a reduced interest rate that would lessen monthly payments as well as the total amount paid.
The student loan consolidation program will let a borrower combine outstanding student loans and by consolidating loans through a student loan consolidation program there are three benefits to be enjoyed. The first one is that it is very convenient since all loan payments are clubbed into one payment and thus there is less paper work and fewer due dates. Secondly, it will save money for the student since after consolidation only one payment is required which normally is less than combined payments for all loans paid individually.
The third benefit of having student loan consolidation is that it can open up more opportunities for students in the form of new deferment choices and/or added repayment potential. With added flexibility, the student may be able continue pursuing further education and face lesser financial hardships.
John Mailer's articles look at students financial problems and the best student loans consolidation ideas using private student loans. His other site is about the thrills of whitewater rafting
Article Source: http://www.articlesbase.com/finance-articles/student-loan-consolidation-reduces-monthly-outgoings-when-it-matters-155468.html
The Function Of The Student Loan Corporation
Nowadays, few students go through college without some sort of financial assistance: about 65% of undergraduate students finish with debts owing. The average obligation is around $19,000 but higher for graduate students ($27,000 to $100,000+.). The causes are myriad, ranging from low family income, through high costs of education, to too expensive tastes of the individual. Whatever the reason or reasons, most students turn to a student loan corporation to finance the continuance of their education.
A Short Simplified History
It used to be that student loans are made only by the schools as an extension of their scholarship programs. Some students don't qualify for scholarship grants because of economic capability, but nonetheless needed some financial assistance. These students or their families thus turn to formal and non-formal lending institutions such as banks, to obtain the necessary funds.
The Higher Student Act of 1965 mandated the Guaranteed Student Loan Program, so student loans came into vogue and student loan mechanisms were established in almost all reputable schools across the country. The student loan corporation was thus formed with the unification of the school's loan portfolio with that of the government's and of the private financing firms, wherever available.
Unified Lending
The sources of funds for a typical student loan corporation include: private investors such as philanthropic and private financing institutions, Stafford Parent Loans for Undergraduate Students (PLUS) Program, Stafford Loan Program (the erstwhile Guaranteed Student Loan Program) and the school student loan portfolio, if any.
The lending policies and guidelines of these sources are often streamlined and or modified to make it easier for students to apply and obtain loans from the student loan corporation.
Interest Rates
Interest rates for student loans granted by a typical student loan corporation range from 6.8 percent per annum for Stafford loans; to 8.5% for PLUS loans. However, a student loan corporation may offer interest charge discounts up to 1.5% to attract more clients.
Others offer rebates for up-to-date or prompt repayments; while still others grant additional payment deductions on systematized payments such as salary deduction schemes. Each student loan corporation has its own unique menu of options from shortened application process to repayment rebates. It thus pays to research a bit for the most favorable terms offered.
Basically, loan interest rates for a certain year are pegged July 1, largely determined by basing on the Federal loan rates, which in turn are based on the last 91-day Treasury auction rate in May and the average constant maturity Treasury yield (CMT) for that year.
The current rates projected for the School Year 2007-2008 in the United States are:
Stafford Loan (In-School Rate Projection): 6.77%
Stafford Loan (Repayment Rate Projection): 7.37%
PLUS Loan (Rate Projection): 8.17%
It's Here To Stay
The student loan corporation is today a fixture in the educational landscape in the US and elsewhere. As the costs of living and that of education continue to rise every year, the necessity for student loan corporations will likewise increase. After all, an educated citizenry is an imperative for every country's progress, and the student loan corporation is one method of achieving it year after year.
John Mailer's articles look at students financial problems and the best student loans consolidation ideas using private student loans. His other site is about the thrills of whitewater rafting
Article Source: http://www.articlesbase.com/finance-articles/the-function-of-the-student-loan-corporation-157757.html