If President Obama is successful next year, he will take private companies out of the business of loaning money to college students. The United States Government will make all the rules and determine everything including interest rates that are charged, how much each student will qualify for, and what students qualify for loans.
Knowing the US government and the politically correct mentality that runs through it, this means there might be quotas on who gets loans. If you are some Caucasian kid from Iowa, you might not qualify one year because not enough Mexican students or African students have gotten loans. The government may tell you or your child that you don't qualify for a loan at any time based on whatever criteria they have set up.
The Obama student loans proposal is just one more attempt at a government takeover of another part of our life. Do you care where your school loan comes from? Probably most don't but what I care about is whether I will be allowed to get one. If it is solely in the government's hands, I have ZERO confidence in the loan process. After all, the government screws up almost everything they touch.
I don't want the slimy politicians in Washington determining who gets to go to school via a loan and who doesn't. Am I the only one that feels this way?
Wednesday, December 9, 2009
Thursday, December 3, 2009
WHERE TO GET OBAMA COLLEGE GRANTS
If you are looking for special Obama college grants to help you pay your tuition, you will be disappointed to know that there are none. President Obama did give a speech where he talked about the importance of moms return to school but he never laid out any grant specifically for that purpose.
Additionally, he talked about Obama moms return to school grants but again, there is no special grant that came about just because of him. This was a speech that has been used for advertising and people have latched onto it to make you believe there is some special funding for college grants that the Obama administration has put through.
The only thing they have done is to raise the tax credit you can take for Pell grants and, while this is helpful to some, it is hardly free Obama money for college. If you do want a shot at winning some free scholarship money to return to school, you can sign up at either of the two links below to be entered in a monthly drawing. Signing up is 100% free and carries no obligation:
Scholarships 4 Moms - (FREE) Both men and women over 18 can sign up for this free drawing.
Obama student loans continue to be on the back burner for now and it will not be until early next year at the soonest when the proposed changes will be voted on. For those who do not know, Obama wants all college and student loans to be given out and controlled by the government because he thinks they can do it cheaper than private companies. This is something that will be very bad for the country, in my opinion, because the government never runs anything efficiently and we don't want them meddling in our private business anyway.
Additionally, he talked about Obama moms return to school grants but again, there is no special grant that came about just because of him. This was a speech that has been used for advertising and people have latched onto it to make you believe there is some special funding for college grants that the Obama administration has put through.
The only thing they have done is to raise the tax credit you can take for Pell grants and, while this is helpful to some, it is hardly free Obama money for college. If you do want a shot at winning some free scholarship money to return to school, you can sign up at either of the two links below to be entered in a monthly drawing. Signing up is 100% free and carries no obligation:
Scholarships 4 Moms - (FREE) Both men and women over 18 can sign up for this free drawing.
Obama student loans continue to be on the back burner for now and it will not be until early next year at the soonest when the proposed changes will be voted on. For those who do not know, Obama wants all college and student loans to be given out and controlled by the government because he thinks they can do it cheaper than private companies. This is something that will be very bad for the country, in my opinion, because the government never runs anything efficiently and we don't want them meddling in our private business anyway.
Tuesday, November 17, 2009
THE BEST REASON THE OBAMA LOANS PROPOSAL SHOULD BE DEFEATED
Early next year, the Obama student loans proposal will be up for votes and our beloved (I say that sarcastically) bureaucrats will be deciding our children's future. Taking the college loans process away from private companies is a huge step toward socialism and it is just wrong.
Do you need proof why the government should keep their hands out of student loans? How about this story on MSN about the US postal service losing billions? It seems our government run post office has cut over 40,000 jobs and still lost $3.8 BILLION dollars for fiscal 2009! WOW! Now that is incompetance.
This is the single best reason why the government should stay out almost anything and everything. The Obama administration and any other administration does only one thing really well and that is losing and squandering our taxpayer dollars. They just don't understand how to run a business or program of any type and make it profitable. The military and the police force is the only thing we really need them to do.
The Obama student loans bill is something that most of us will regret forever if it is passed. We just don't want to give the government that much control over who gets loans and who doesn't. The politically correct government will put in quotas and all sorts of other things so that the racial groups that they want to go will get the loans and others will not. This is a recipe for disaster education wise and financial aid and student loans should never be any business of the people in Washington.
Do you need proof why the government should keep their hands out of student loans? How about this story on MSN about the US postal service losing billions? It seems our government run post office has cut over 40,000 jobs and still lost $3.8 BILLION dollars for fiscal 2009! WOW! Now that is incompetance.
This is the single best reason why the government should stay out almost anything and everything. The Obama administration and any other administration does only one thing really well and that is losing and squandering our taxpayer dollars. They just don't understand how to run a business or program of any type and make it profitable. The military and the police force is the only thing we really need them to do.
The Obama student loans bill is something that most of us will regret forever if it is passed. We just don't want to give the government that much control over who gets loans and who doesn't. The politically correct government will put in quotas and all sorts of other things so that the racial groups that they want to go will get the loans and others will not. This is a recipe for disaster education wise and financial aid and student loans should never be any business of the people in Washington.
Monday, November 2, 2009
STUDENT LOANS - FREE SCHOLARSHIPS
Student loans are hard to get and they might be changing next year under President Obama. If you haven't heard, he is proposing to have the government toatally take over all college loans and the private companies would no longer be involved. Whether this is good or bad is debatable and Congress is going to have a big decision in front of them next year.
Whether the Obama student loans bill passes or not, everyone still needs loans and scholarships right now. There are two online sites where you can enter for free for a drawing for a $10,000 scholarship and smaller ones too. They are:
Scholarships 4 Moms - (FREE) Both men and women over 18 can sign up for this free drawing.
If student loans and student grants under Obama change, no one knows whether they will be easier or harder to get. Will minorities have an easier time getting school loans or will it become more difficult? Will non minorities be able to get loans or will they be shut out? Will back to school loans still be available or maybe there will be more of them? No one knows right now and it is a scary time if you need a school loan to get into college or to continue going to school.
Whether the Obama student loans bill passes or not, everyone still needs loans and scholarships right now. There are two online sites where you can enter for free for a drawing for a $10,000 scholarship and smaller ones too. They are:
Scholarships 4 Moms - (FREE) Both men and women over 18 can sign up for this free drawing.
If student loans and student grants under Obama change, no one knows whether they will be easier or harder to get. Will minorities have an easier time getting school loans or will it become more difficult? Will non minorities be able to get loans or will they be shut out? Will back to school loans still be available or maybe there will be more of them? No one knows right now and it is a scary time if you need a school loan to get into college or to continue going to school.
Thursday, October 29, 2009
OBAMA SCHOOL GRANTS
President Obama has made it clear in one of his speaches that everyone should be going to school if they have the chance. This includes back to school moms and return to school moms who might have a chance to get a better education.
Are there any specific Obama school grants out there that are new that have been created just by him? The answer to that is "NO" I believe, although he has upped the amount that Pell grants can be for from $4,050 to $5,100.
There is also information about the American Opportunity Tax Credit which will make the first $4,000 of a college tuition free for many Americans. It will cover about 2/3 of the tuition cost for an regular public college. This Obama tax credit will be helping families that are in the low income tax bracket and who need it the most.
People are in real need of financial aid for college and schooling right now has it has gone up so much in the last ten years. Everyone agrees that college is very important for young people who are the future of this country. If college becomes too expensive for many of them, we will have a new generation of workers who will not be as educated as previous generations and that will further contribute to America's woes.
Obama school grants would be something that many people would be excited to use and greatly benefit from. Unfortunately, the US government is in such financial trouble that there is just not enough money to go around. The stimulus bill grants and loans have helped many companies and local communities but it there has been very little for education to help schooling for the general public.
Are there any specific Obama school grants out there that are new that have been created just by him? The answer to that is "NO" I believe, although he has upped the amount that Pell grants can be for from $4,050 to $5,100.
There is also information about the American Opportunity Tax Credit which will make the first $4,000 of a college tuition free for many Americans. It will cover about 2/3 of the tuition cost for an regular public college. This Obama tax credit will be helping families that are in the low income tax bracket and who need it the most.
People are in real need of financial aid for college and schooling right now has it has gone up so much in the last ten years. Everyone agrees that college is very important for young people who are the future of this country. If college becomes too expensive for many of them, we will have a new generation of workers who will not be as educated as previous generations and that will further contribute to America's woes.
Obama school grants would be something that many people would be excited to use and greatly benefit from. Unfortunately, the US government is in such financial trouble that there is just not enough money to go around. The stimulus bill grants and loans have helped many companies and local communities but it there has been very little for education to help schooling for the general public.
Saturday, October 24, 2009
IS THERE REALLY AN OBAMA MOMS RETURN TO SCHOOL GRANTS PROGRAM?
I have heard a lot about the "Return To School" grants program that Obama has been pushing. Well, let me rephrase that: I thought I had heard about it but know I wonder whether it really exists. I don't think there is anything anywhere that can officially be called Obama financial aid for moms.
I set out to try to find out more about this program and as the Internet is the fastest way to investigate these things, I did a lot of Google searches. I was looking for some official website or news story from a real news source that could shed some light about anything related to return to school for moms grants or loans.
What I found was absolutely nothing official at all. There were many articles written by normal people about this so-called program but all of them were really dancing around the subject and gave no specifics.
Usually when you search for something that is real and official, you will find real news articles about it from Fox, MSN, or some other source. You might also find a government website ending in .gov which will give you more information.
However, in searching for anything related to Obama grants for moms and a moms return to school grants program, I found nothing at all and I searched many different similar searches. This leads me to believe that there really is no such type of loan and it is all just made up. Probably President Obama did utter the words "moms return to school" somewhere in one of his speaches and somehow people latched on to it and now it has taken on a life of its own.
I may be wrong about this and there might really be some new back to school for moms grant but I sure can't find anything official about it anywhere.
I set out to try to find out more about this program and as the Internet is the fastest way to investigate these things, I did a lot of Google searches. I was looking for some official website or news story from a real news source that could shed some light about anything related to return to school for moms grants or loans.
What I found was absolutely nothing official at all. There were many articles written by normal people about this so-called program but all of them were really dancing around the subject and gave no specifics.
Usually when you search for something that is real and official, you will find real news articles about it from Fox, MSN, or some other source. You might also find a government website ending in .gov which will give you more information.
However, in searching for anything related to Obama grants for moms and a moms return to school grants program, I found nothing at all and I searched many different similar searches. This leads me to believe that there really is no such type of loan and it is all just made up. Probably President Obama did utter the words "moms return to school" somewhere in one of his speaches and somehow people latched on to it and now it has taken on a life of its own.
I may be wrong about this and there might really be some new back to school for moms grant but I sure can't find anything official about it anywhere.
Friday, October 23, 2009
OBAMA FINANCIAL AID FOR COLLEGE STUDENTS
As you may know by now, college financial aid may change in 2010 under our new President. Obama financial aid will involve students getting their loans directly from the government and bypassing the private sector.
One of the problems with this is that one entity will now be deciding the fate of millions of students and that entity is the US government no less. What task does the government do well and why should we assume they will be able to effectively dole out loans?
Under the Obama student loans proposal, all competition would be gone. That is never good as competition is the one thing that keeps costs down and makes companies do their best. One reason why the government fails at so many things is because there is no competition. Have you ever been at the DMV or some other government office where you have to shake your head at the incompetence? That is because there is no other company competing against them. There is only one DMV and so we are totally at their mercy as we can't go anywhere else to get our licenses.
College students need loans and they need to understand the process to get them. They also need an unbiased assessment of their financial situation to determine whether they get a loan. Finally, they need to be evaluated based on need only and not the color of their skin or politics.
No matter what party is in the White House, will there not be accusations of racism and favoritism levelled again the government by some students who have been turned down? Will parents not think that the government is biased against their ethnicity and do we want the government being the sole deternimer of our fates like this?
Obama student loans is a bad idea from my perspective as it makes the government bigger and it takes out all competition. This country is split 50/50 right now politically as shown by the last two elections and this is something that is just going to fan the flames and make people more upset.
One of the problems with this is that one entity will now be deciding the fate of millions of students and that entity is the US government no less. What task does the government do well and why should we assume they will be able to effectively dole out loans?
Under the Obama student loans proposal, all competition would be gone. That is never good as competition is the one thing that keeps costs down and makes companies do their best. One reason why the government fails at so many things is because there is no competition. Have you ever been at the DMV or some other government office where you have to shake your head at the incompetence? That is because there is no other company competing against them. There is only one DMV and so we are totally at their mercy as we can't go anywhere else to get our licenses.
College students need loans and they need to understand the process to get them. They also need an unbiased assessment of their financial situation to determine whether they get a loan. Finally, they need to be evaluated based on need only and not the color of their skin or politics.
No matter what party is in the White House, will there not be accusations of racism and favoritism levelled again the government by some students who have been turned down? Will parents not think that the government is biased against their ethnicity and do we want the government being the sole deternimer of our fates like this?
Obama student loans is a bad idea from my perspective as it makes the government bigger and it takes out all competition. This country is split 50/50 right now politically as shown by the last two elections and this is something that is just going to fan the flames and make people more upset.
Thursday, October 22, 2009
FIND OUT MORE ABOUT OBAMA STUDENT LOANS
If you look for the latest information on Obama student loans, you will be hard pressed to find too much. Even Obama's official website has nothing on the subject. It is amazing how little information that site has on any issue as it looks like it is just set up to get you to join his email list or volunteer list.
Obama school grants and student loans are on the minds of many right now as everyone is heading back to school or is already there. Students are concerned about how they are going to pay for college and getting a job is not easy. Most college students get part time jobs to pay for some of their expenses and they also rely on student loans. Right now, many are without jobs because the economy is so bad and the jobs just aren't there.
College tuition has gotten out of hand the last 10 to 15 years and it is very difficult for most students to pay. Decisions have to be made whether college is really the right choice at these steep prices. For decades now, parents have always preached to their children that they must go to college to get ahead in life. Now though, with prices being so high, student loans are a necessity and one has to wonder whether college is really worth it if you have to go so much in debt.
Obama school grants and student loans are on the minds of many right now as everyone is heading back to school or is already there. Students are concerned about how they are going to pay for college and getting a job is not easy. Most college students get part time jobs to pay for some of their expenses and they also rely on student loans. Right now, many are without jobs because the economy is so bad and the jobs just aren't there.
College tuition has gotten out of hand the last 10 to 15 years and it is very difficult for most students to pay. Decisions have to be made whether college is really the right choice at these steep prices. For decades now, parents have always preached to their children that they must go to college to get ahead in life. Now though, with prices being so high, student loans are a necessity and one has to wonder whether college is really worth it if you have to go so much in debt.
Wednesday, October 21, 2009
OBAMA STUDENT LOANS IN 2010
So far, the Obama student loans reform bill has successfully passed in the United States House of Representatives. The next step is for it to be addressed by the Senate which has not happened yet.
Surprisingly, there has been little news of this student loans bill and that has probably been because of all the attention that has been focused on health care. But just like the proposed takeover of the health care system by the government, student loans would be taken over as well if this bill is passed.
Surprisingly, there has been little news of this student loans bill and that has probably been because of all the attention that has been focused on health care. But just like the proposed takeover of the health care system by the government, student loans would be taken over as well if this bill is passed.
This new student loans bill would end all subsidies for the private lenders and take them out of the equation. Rather than have these companies loan the money to students and then get help from the government, the money would go directly from the government to the students.
Obviously many people are calling this another step toward socialism as the government tries to work it's way into every aspect of our lives. Do we really want the government deciding who gets and who doesn't get these student loans? In essence, they would be deciding who goes to college! It doesn't matter who is in control of the White House.
Obama student loans would save taxpayers $87 billion over a ten year span it has been estimated by the Congressional Budget Office. Supposedly that money could be spent for other things related to education such as increasing Pell Grants and making the cost of college more affordable. Does anybody really believe that will happen and trust the politicians to make it happen?
They also say that the costs of the switch could lower the savings all the way down to $47 billion and student loan companies say it would cost them 30,000 jobs. Jobs being lost is never a good thing but it would be worth it many think if this new proposal would actually work.
Obama student loans will not get voted on this year most likely and so it will be sometime in 2010 when this comes to the forefront again. Hopefully other stories will not overshadow this one and it can make front page news like it should. People need to know about this story and decide whether they really want the government taking over yet another part of our lives.
Monday, October 19, 2009
STUDENT LOANS MAY SOON CHANGE
One of the big changes President Obama is proposing along with health care, is student loans and who will be issuing them. College has become very expensive which has led more and more students to need student loans just to to make it through.
One of the unfortunate results of this very high tuition is that many college students now graduate every year and they begin their working life in debt. This, along with the very difficult job market, has put many college students and graduates in a bad financial position.
With the new proposal, Obama student loans would mean that private companies are taken out of the student loan business and it is taken over by the government. President Obama concludes that these private companies are charging too high an interest rate and the government can issue these same loans at a lower rate. This, he concludes will be good for the students and will make college more affordable for many.
While this may make sense on the surface, there are may different perspectives to this debate and that is the purpose of this blog. We will discuss all the pros and cons to the student loan debate as well as any other Obama policy which might be of interest.
One of the unfortunate results of this very high tuition is that many college students now graduate every year and they begin their working life in debt. This, along with the very difficult job market, has put many college students and graduates in a bad financial position.
With the new proposal, Obama student loans would mean that private companies are taken out of the student loan business and it is taken over by the government. President Obama concludes that these private companies are charging too high an interest rate and the government can issue these same loans at a lower rate. This, he concludes will be good for the students and will make college more affordable for many.
While this may make sense on the surface, there are may different perspectives to this debate and that is the purpose of this blog. We will discuss all the pros and cons to the student loan debate as well as any other Obama policy which might be of interest.
Sunday, October 18, 2009
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Wednesday, September 30, 2009
LOAN FORGIVENESS for PUBLIC SERVICE CAREERS
This program is open to those working in emergency management, government, military service, public safety and law enforcement, public health, public education, early childhood education, social work in a public child or family service agency, public services for individuals with disabilities or the elderly, public interest legal services or other school-based services, and employees of tax exempt 501(c)(3) organizations. If you work in one of the fields listed , you may qualify for the new Public Service Loan Forgiveness program, so Read On!
Public Service Loan Forgiveness Offered by the Direct Loan Program
Established by the College Cost Reduction and Access Act of 2007, this loan forgiveness program is only available through Direct Loans. The public service loan forgiveness program is targeted at students who pursue public service careers and who have high student loan debt and low income. Borrowers with low debt or high income will not benefit as much.
Eligible loans include Federal Direct Stafford Loans (Subsidized and Unsubsidized), Federal Direct PLUS Loans, and Federal Direct Consolidation. A FFELP borrower may consolidate their loans with Direct to qualify for the forgiveness program. Perkins Loans and FFELP PLUS loans may be included in a Federal Direct Consolidation Loan; the entire consolidation loan, including the Perkins or PLUS Loans, is eligible for public service loan forgiveness.
NOTE: Parent PLUS loans included in a Federal Direct Consolidation Loan are eligible for income-contingent repayment (but not income-based repayment), making it possible to obtain forgiveness. However, the income contingent repayment is not available for Federal Direct Consolidation Loans that include PLUS loans for borrowers who entered repayment before July 1, 2006, per 34 CFR 685.208(a)(1)(ii).
Eligible Repayment Plans include income-based repayment, income contingent repayment, standard repayment or a combination of these repayment plans. Payments made under other repayment plans do not count (e.g., extended repayment, including consolidated loans, and graduated repayment). To maximize the amount of forgiveness, borrowers should use income-based repayment.
Eligibility Requirements
PAYMENTS: The forgiveness occurs after ten years of repayment (120 monthly payments made on or after October 1, 2007 on an eligible Federal Direct Loan). Periods of deferment and forbearance are not counted toward the 120 payments. Payments made before October 1, 2007 do not count. This represents a huge savings compared to the 25 years of repayment required for forgiveness under the income-contingent and income-based repayment plans for borrowers who are not employed full time in public service jobs.
NOTE: If a borrower were to use only standard repayment for repaying their loans there would be no balance remaining after 10 years and so no debt to cancel. Standard repayment is only provided as an option to address situations where a borrower is unable to continue under income-based repayment because they no longer have a partial financial hardship or the payments under income-contingent repayment exceed standard repayment. In such a situation the borrower would use standard repayment for the remaining payments within the 10 year period and obtain some loan forgiveness at the end of the ten years of payments.
EMPLOYMENT: The borrower must be employed full-time in a public service job for the entire ten year repayment period. Public service jobs include, among other positions, emergency management, government (federal, state or local), military service, public safety and law enforcement (police and fire), public health (including nurses, nurse practitioners, nurses in a clinical setting, and full-time professionals engaged in health care practitioner occupations and health care support occupations), public education, early childhood education (including licensed or regulated childcare, Head Start, and State-funded prekindergarten), social work in a public child or family service agency, public services for individuals with disabilities or the elderly, public interest legal services (including prosecutors, public defenders and legal advocacy on behalf of low-income communities at a nonprofit organization), public librarians, school librarians and other school-based services, and employees of tax exempt 501(c)(3) organizations
WHAT IS FORGIVEN: ALL remaining interest and principal are forgiven. The borrower must understand that this is an all-or-nothing benefit. If a borrower stops working full-time in a public service job, even with just a few of the 120 payments left, they get no forgiveness.
Public Service Loan Forgiveness Offered by the Direct Loan Program
Established by the College Cost Reduction and Access Act of 2007, this loan forgiveness program is only available through Direct Loans. The public service loan forgiveness program is targeted at students who pursue public service careers and who have high student loan debt and low income. Borrowers with low debt or high income will not benefit as much.
Eligible loans include Federal Direct Stafford Loans (Subsidized and Unsubsidized), Federal Direct PLUS Loans, and Federal Direct Consolidation. A FFELP borrower may consolidate their loans with Direct to qualify for the forgiveness program. Perkins Loans and FFELP PLUS loans may be included in a Federal Direct Consolidation Loan; the entire consolidation loan, including the Perkins or PLUS Loans, is eligible for public service loan forgiveness.
NOTE: Parent PLUS loans included in a Federal Direct Consolidation Loan are eligible for income-contingent repayment (but not income-based repayment), making it possible to obtain forgiveness. However, the income contingent repayment is not available for Federal Direct Consolidation Loans that include PLUS loans for borrowers who entered repayment before July 1, 2006, per 34 CFR 685.208(a)(1)(ii).
Eligible Repayment Plans include income-based repayment, income contingent repayment, standard repayment or a combination of these repayment plans. Payments made under other repayment plans do not count (e.g., extended repayment, including consolidated loans, and graduated repayment). To maximize the amount of forgiveness, borrowers should use income-based repayment.
Eligibility Requirements
PAYMENTS: The forgiveness occurs after ten years of repayment (120 monthly payments made on or after October 1, 2007 on an eligible Federal Direct Loan). Periods of deferment and forbearance are not counted toward the 120 payments. Payments made before October 1, 2007 do not count. This represents a huge savings compared to the 25 years of repayment required for forgiveness under the income-contingent and income-based repayment plans for borrowers who are not employed full time in public service jobs.
NOTE: If a borrower were to use only standard repayment for repaying their loans there would be no balance remaining after 10 years and so no debt to cancel. Standard repayment is only provided as an option to address situations where a borrower is unable to continue under income-based repayment because they no longer have a partial financial hardship or the payments under income-contingent repayment exceed standard repayment. In such a situation the borrower would use standard repayment for the remaining payments within the 10 year period and obtain some loan forgiveness at the end of the ten years of payments.
EMPLOYMENT: The borrower must be employed full-time in a public service job for the entire ten year repayment period. Public service jobs include, among other positions, emergency management, government (federal, state or local), military service, public safety and law enforcement (police and fire), public health (including nurses, nurse practitioners, nurses in a clinical setting, and full-time professionals engaged in health care practitioner occupations and health care support occupations), public education, early childhood education (including licensed or regulated childcare, Head Start, and State-funded prekindergarten), social work in a public child or family service agency, public services for individuals with disabilities or the elderly, public interest legal services (including prosecutors, public defenders and legal advocacy on behalf of low-income communities at a nonprofit organization), public librarians, school librarians and other school-based services, and employees of tax exempt 501(c)(3) organizations
WHAT IS FORGIVEN: ALL remaining interest and principal are forgiven. The borrower must understand that this is an all-or-nothing benefit. If a borrower stops working full-time in a public service job, even with just a few of the 120 payments left, they get no forgiveness.
Monday, August 24, 2009
Back to School?
Public and private schools are back in session, fall is just around the corner, there's a hint of coolness in the air! This is the time of year that the ‘Back to School bug’ often bites us, and why not? It is a great time to either finish your degree or add additional credentials to your resume.
If you are thinking about heading back to college, be sure to get your student financial aid affairs in order. I am not talking about completing the FAFSA or being notified that your new loan has been processed. That’s the easy part. I am referring to those previous loans you used to pay for your education. Many students start a new program or enroll in a new school using federal student loan money. They are excited about their new educational path and everything is running smoothly when, suddenly, they are notified that their loan for the next term has been rejected. Why? They did not take care of their previous student loans and get their student financial aid affairs in order. One or more of their student loans defaulted and that results in a loss of Title IV funds. Over the years, I have worked with many students who had this unpleasant surprise. I have always found these situations very sad because they are preventable!
So, a few tips to follow before you hit the books again. If you are enrolling in college for a second (or third, fourth, fifth) time around, take a few moments to get your ducks in a row; you’ll be glad you did.
- Visit https://www.nslds.ed.gov/. The National Student Loan Data System (NSLDS) is the U.S. Department of Education's (ED's) central database for student aid. In one quick visit, you will find the financial institution that holds each of your loans, as well as the contact information for that bank or lender. The site should also show if the loans are in Repayment, Deferment or Forbearance. You may find a few surprises!
- Call each servicer or lender to make sure your loan payments are current or visit your account on their website. Remember, if you cannot make a payment to bring your loans current, you have other alternatives, including Deferment rights and Forbearance options. (For more information on your rights, visit http://www.cashcourse.org/swfc/SchoolPage.aspx.) However, be sure to get any delinquent issues resolved before you start classes. If your loans are in a delinquent status, many lenders will not process an In-School deferment and your loans will continue on the countdown to default.
- Make sure that your new school faxes a completed In-School Deferment to every lender holding one of your loans. Submitting the deferment form is a service that many schools offer, but it is your responsibility to make sure that the deferment form is received and processed.
- Finally, always open any mail that references student loans and is addressed to you. In today’s turbulent financial market, many student loans are being sold to other lenders or reassigned to other servicers. It takes 270 days of delinquency for a loan to default. You lender or servicer will be making numerous attempts to contact you before the default is processed.
Thursday, July 23, 2009
FINALLY - A Student Loan Payment Perfect for ME!
July 1, 2009 brought a truly revolutionary change to the Direct and FFELP student loan programs. The new Income-Based Repayment (IBR) plan finally recognizes that "one size does not fit all". While there have always been payment plan options, they tended to generate monthly payments that were strictly related to your loan balance - in other words, the more you owed, the higher the monthly loan payment would be! For borrowers who have chosen careers in the public sector or had to accept entry level positions for their career path, these options were not enough. Frequently, while borrowers wanted to make payments, they were "forced" to use Forbearance because their only payment options were beyond their reach.
As you know, Forbearance will provide payment relief, but it also allows the loan's balance to grow, often at what seem to be astronomical rates. The interest can add up very quickly. For example, let’s say you have $15,500 in student loans and have a Standard Repayment plan with 120 payments @ 6.8% interest. Your monthly payments are $179 a month. However, if you use 36 months of Forbearance, your monthly payment will increase to $215 and you will pay back an additional $4,367 in interest or 20+% more over the loan’s repayment period. (Source: NCHELP Reference Library, Going Above & Beyond: Delinquency & Default Prevention - Slide 11, http://www.nchelp.org/elibrary/index.cfm?parent=1983) WOW – talk about a snowball effect!
With the new IBR plan, your monthly payment will be based on your specific financial situation, not a preset amount based on your loan balance. For borrowers experiencing partial financial hardship (and with today’s economic challenges many of us are), this plan can allow you to remain in a Repayment Status with manageable monthly payments. This can help create positive input to your credit reports.
So, you are probably wondering "How can I get on this plan?" In order to be approved for the IBR plan, a borrower must provide additional information but the payment will make it well worth the effort. To see if you might qualify for an IBR payment plan, use this simple calculator: http://www.aie.org/Calculators/IBR/index.cfm?cid=tgslcibrpage If this indicates you may qualify for the new IBR plan, hop on the phone and contact your servicer!
As you know, Forbearance will provide payment relief, but it also allows the loan's balance to grow, often at what seem to be astronomical rates. The interest can add up very quickly. For example, let’s say you have $15,500 in student loans and have a Standard Repayment plan with 120 payments @ 6.8% interest. Your monthly payments are $179 a month. However, if you use 36 months of Forbearance, your monthly payment will increase to $215 and you will pay back an additional $4,367 in interest or 20+% more over the loan’s repayment period. (Source: NCHELP Reference Library, Going Above & Beyond: Delinquency & Default Prevention - Slide 11, http://www.nchelp.org/elibrary/index.cfm?parent=1983) WOW – talk about a snowball effect!
With the new IBR plan, your monthly payment will be based on your specific financial situation, not a preset amount based on your loan balance. For borrowers experiencing partial financial hardship (and with today’s economic challenges many of us are), this plan can allow you to remain in a Repayment Status with manageable monthly payments. This can help create positive input to your credit reports.
So, you are probably wondering "How can I get on this plan?" In order to be approved for the IBR plan, a borrower must provide additional information but the payment will make it well worth the effort. To see if you might qualify for an IBR payment plan, use this simple calculator: http://www.aie.org/Calculators/IBR/index.cfm?cid=tgslcibrpage If this indicates you may qualify for the new IBR plan, hop on the phone and contact your servicer!
Thursday, July 2, 2009
It’s Like Money in the Bank!
If you have variable rate student loans (loans issued between 7/1/1988 to 6/30/2006) & you will be entering Repayment between July 1, 2009 and June 30, 2010, this may be the year you want to consolidate those student loans.
Effective July 1, 2009, interest on variable rate Subsidized and Unsubsidized Stafford Loans issued between 7/1/1998 to 6/30/2006 will drop to 2.48%. This could allow you to save from $1,470 to over $5,100 over a 10 year loan period! *
There are a variety of lenders who are consolidating student loans. Just two pieces of advice:
- First, make sure that you are consolidating only your Federal Student Loans, and are consolidating under the Federal Student Loan program. This will allow you to maintain your borrower's rights, including deferment and forbearance rights!
- Next, shop around. Any loan is a consumer purchase and should be made after comparing all rights, benefits and terms or conditions. While most borrower rights, benefits and terms are defined by the Federal Loan program, there may be some discounts or costs that can vary by lender.
Be a wise consumer and check out all of your options before you "sign" or the dotted line (or the electronic "e-signature line")!
*Based on $15,000 balance, with 10 year repayment period, calculated at 2.50%, 4.25% and 8.25% interest rates.
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