Student Loan Help

On January 17, 2006 the US House of Represenatives passed a bill to cut interest rates on all new subsidized Stafford loans. If this bill gets passed by the President it would mean that every year for five years your interest rate would gradually decrease. Starting at 6.8 and ending at 3.4%. The catch to this bill is that after that five year period it levels off to 6.8% again. Although this bill has not yet been signed by the President, they are anticipating it going through and taking effect this July,1.

You may be asking yourself what this has to do with consolidation. Well, I have received many calls from people who wanted to wait to consolidate because they thought the new bill would affect all their loans. The truth is that this new bill only affects your most recent student loans and has no affect on past loans. Another reason is because of the above statement. Since you are not eligible to consolidate while you are in school the dropping rate really has no affect on consolidation. Therefore, if you are in the buiseness of saving money then you really want to consider consolidating your loans. Not only will it lower your monthly payment but you will be locked into a fixed rate with only one bill to pay each montn. If you have any questions on the new bill check out the following link http://www.cbo.gov/showdoc.cfm?index=7729&sequence=. Questions about consolidation check out Student Loan Network

OTHER INFORMATIVE SITES
Student Loan Network: Stafford Federal Student Loans, Parent PLUS Loans, Student Loan Consolidation, Private Student Loans

Recently our student intern, Vanusa received a new role at her college as a Resident Assistant. Vanusa was selected for this role out of 75 applications. Pretty impressive, I know. After talking with Vanussa about the perks of this position I thought it would helpful if I shared with my readers the benefits of becoming an RA.

When you become an RA you will receive the unbelievable deal of free housing on the dorm floor that you supervise. Often times an RA will recieve their very own single room with free television and phone service plus free meals at the school cafeteria! Sounds like a great deal, right? Afterall, we are all aware that tuition rates are soaring and the cost of living at school is going higher and higher every year. Having a position to help pay for the cost of attendance can be extremely helpful in reducing a students debt. A college dorm room alone can cost more than $10,000 a year. It is clear that serving as an RA can be a financially rewarding position for a student.

After reading this you are probably thinking of becoming an RA? Being an RA is a large commitment and one you should carefully consider. Aside from being a great financial help it is a big commitment that requires alot of patience and determination. I know that Vanusa will be an incredible RA because she puts a lot of heart and dedication with every job that she does.

Famouse Resident Assistants include the following:

Hilary Clinton + Chyna from WWE + Sheryl Crow + Adam Sandler + Wesley Snipes

The Student Loan Network: Stafford Federal Student Loans, Parent PLUS Loans, Student Loan Consolidation, Private Student Loans, Education Loans/College Loans

As you may have seen in the press or on the nightly news, there is a lot of activity taking place in Congress regarding student loans. The topic is a political winner - which politician wouldn’t want to stand in front of his/her constituents and say they increased the Pell Grant, or reduced interest rates? Unfortunately, those changes have to be paid for, and at a cost of $6 Billion or more nothing is settled. While it’s important to note that many changes to the proposed Student Loan Bills are forthcoming, it’s also worth staying on top of the legislative changes to see how they may affect you and your student loans.

So far, the House has passed a bill which would cut the interest rate on subsidized Stafford undergraduate loans from the current 6.8% to 3.4% over a period of five years. As described in an earlier post on this blog, the government pays the interest on subsidized Stafford loans while students are in school. The student picks up the payments when they leave school. About 5.5 million students would benefit from this rate cut, but unfortunately those recieving unsubsidized loans and graduate students don’t get a rate cut. Also, parents taking out Parent Plus loans are also not impacted. The lower interest rates would apply to loans originated on July 1, 2007 or after. If you are considering a Stafford Loan for the 2007-08 school year, it’s still best to apply early (after completing your FAFSA! - see earlier post) as the funds will not be disbursed until late summer/early fall.

I’ll stress again that this bill is not yet final - the House version still needs to be reconciled with the Senate’s proposal. Preliminary analysis of the Senate bill indicates that there will need to be some negotiation between the two chambers. Senator Kennedy has proposed raising the maximum Pell grant from $4,050 to $5,100 - Pell grants do not have to be repaid. Doing this in addition to reducing the interest rates will cost much more than the current $6 Billion price tag - a cost Kennedy would like banks to absorb in addition to offering incentives to schools to allow more students to borrow directly from the government.

Once the Democratic leaders of the House and Senate negotiate a compromise bill, they must work with the Republicans and the Administration to get it passed into law. A long process lies ahead. For now, do what you would have done - complete the FAFSA (get started at FAFSAOnline.com), look for grants and scholarships (studentscholarshipsearch.com), and apply for financial aid at your school. In addition, stay on top of the news - or come back to read these blogs - so you are aware how these legislative changes impact you and your strategy for maximizing your financial aid. Good luck!

The US House of Representatives voted last Wednesday to cut the interest rate on future federal student loans. The bill will gradually reduce interest rates for only federally subsidized loans. If this bill is passed by both the House and the Senate, interest rates on the subsidized Stafford Loan will be cut beginning this July. These rate cuts will be phased in over the course of five years. So, this year, the interest rate will be cut from 6.8 percent to 6.12 percent. This cut will help lower the monthly cost of repaying student loans for millions of low-income students.

The bill currently awaits Senate and presidential approval.
The Student Loan Network: Stafford Federal Student Loans, Parent PLUS Loans, Student Loan Consolidation, Private Student Loans, Education Loans/College Loans

Federal loans are not only good because they provide you with the funds you need to go to school but they are also very flexable when it comes to repayment. It takes a lot for your loans to go into default so if you are in default either you didn’t know your options or you just ignored them. I am here to inform you on what your options are.

First option is paying your bills every month on time when they are due. This is the most obvious option but the least used. That may be due to the fact that you go so long without paying on your loans that they tend to become out of site out of mind. If you are not good at remembering when your bills are due you can always set them up to be automatically withdrawn from your account each month.

Your next option is putting your loans on a temporary forebearence. This can be done for a couple of different reasons. The most common reason for putting your loans of a temporary forbearance is if you are unemployed for more than 3 months or you are experiencing economic hardship. To put your loans on a forebearance you want to contact your lender.

Another way to avoid defaulting is to put your loans into deferment. Like forebearence you can defer your loans if you are unemployed, disabled, have economic hardship or you are retuning to school. Again, you want to contact your lender if you need assistance.

The final way in ensuring that your payments are manageable is to consolidate your loans so that you are only paying on one bill at a fixed rate as opposed to a bunch of different loans at various rates. As with all of the above options you want to contact your lender if you have any questions. If you are interested in consolidating and would like some advice you can always call me at Student Loan Network. (877)328-1565

More sites to check out:

http://www.studentloannetwork.com

http://www.staffordloan.com

http://www.parentplusloan.com

http://www.alternativestudentloan.com

The only way you can see if your eligible for the Stafford Loan is for you to complete the Free Application for Federal Student Aid (FAFSA ) at http://www.fafsaonline.com. Once the school that you are attending receives that information from the federal government, the school can then determine if you are eligible. The school that you attend will send a Financial Aid Award Notice stating the maximum amounts of aid you will be eligible to receive. Might be Stafford Loan, Perkins Loan, Pell Grant, etc.

It is important to not take someone else’s word that you won’t qualify. Every family’s financial situation is different. I can guarantee you one thing””if you don’t apply you will definitely not receive financial aid.

The Student Loan Network: Stafford Federal Student Loans, Parent PLUS Loans, Student Loan Consolidation, Private Student Loans, Education Loans/College Loans