Student Loan Help

With the news that MEFA (Massachusetts Education Finance Authority) is not able to make loans this year, (see: http://tinyurl.com/5soc5g)  Massachusetts residents will be looking for funding options.  We are happy to reassure our customers in Massachusetts that the Student Loan Network has a full suite of federal and private student loan products for funding this coming semester.  In addition, we offer a variety of credit tools, student loan resources and educational guides to help you through the financial aid maze.  For a list of these resources, visit: http://www.studentloannetwork.com/student-resources/

Financial Aid Professionals looking for options for their students, please visit:

http://www.studentloannetwork.com/financial-aid-professionals/

More than 40,000 students recently discovered they are losing a major loan option. The Massachusetts Educational Financing Authority (MEFA) announced it won’t be giving out ANY loans this fall, ouch!

It had been previously reported that as of July 1 MEFA would not be giving out any Federal loans, but now they are not giving out any private loans either! This news has sent shockwaves through many Bay State households.

Last year MEFA made more than a half a billion dollars in loans available so the impact of this news is substantial. The state run lending authority is suffering from the same credit crunch that has affected the student loan market nationwide.

If you are in need of a federal or private loan the Student Loan Network can help.

For a Federal Stafford loan (click here).

For a Federal Parent Plus loan (click here).

For a Federal Graduate Plus loan (click here).

For a Private undergraduate loan (click here).

For a Private graduate loan (click here).

Use the Library: The library is a great place to save money. Most libraries nowadays have internet access (although you have a time limit), periodicals, music catalogs, and obviously books. Library cards are also very inexpensive, if they even charge at all. Libraries are literary treasures and are underused. I go there to look up consumer report information on appliances while my colleague loves taking out books from Oprah’s book club list. My brother Dan loves music and takes out CD’s to listen to.

Hit grocery sales twice. The standard sales at a grocery store last 7 days (they generally run Friday – Thursday in my region). Wouldn’t it make sense for me to make a return trip back on Thursday night and hit that sale one last time? Most people couldn’t be bothered but over the course of the year you could save hundreds of dollars this way. This is like a giant coupon in and of itself, and you don’t need to clip it out of a paper.

Pay cash for gasoline. Did you know a lot of gas stations apply a surcharge when you pay for your gas by credit card? In some places they actually charge as much as 10 cents more per gallon! That is just crazy. It is the classic bait and switch tactic. Some gas stations have now been forced to post two prices at the pumps, but not every station is required to do so.

Get the right phone plan. If you don’t get the right plan it can cost you dearly! I had a 1400 minute plan with Verizon and discovered I only averaged 650 minutes each month (I have become a textaholic). They had a 700 minute plan that I moved to and saved myself about $20 per month. Do the math, that’s $240 more bucks in my pocket at the end of the year. Shame on me for not doing it sooner!

Pre-owned better than new Automobiles. Buying a quality pre-owned vehicle may save you thousands over a new one. Sales tax and excise tax will be considerably less, and of course the sticker price will be greatly reduced as well. Autos are a liability and a depreciating asset already; you might as well minimize the damage if you can.

As the hands of time march on, each of us become wiser; at least that’s the hope. We try our best to learn from past mistakes and accept valuable advice from family and friends who have traveled down that dirt road before us. Still, some lessons we just need to learn the hard way. I have had once such lesson I would like to share with you in hopes that you will not suffer the same fate.

I entered into a business venture with my father-in-law in 2006 and got burned badly. In this instance I am the one who traveled down that dirt road and got covered in mud when the dust cleared.

He and I bought a condo together in Naples, FL in 2006. As he was located right in Naples he took care of drafting the tenant lease (we had a tenant already in there), taking care of condo maintenance, and paying the mortgage. I basically served as the silent financial partner from Boston during this time. Everything was going well, or so I thought.

Now it’s important to note that the tenants rent was covering both the mortgage and condo fees so I was not required to send down any money. It seemed to be a perfect scenario, that is, until my place of employment was called for employment verification. What I didn’t know is that my father-in-law had experience financial hardship and was paying other bills with the tenant’s money while letting our property fall deeper and deeper into debt. In November of 2006 I discovered no payments had been made since June!

This episode damaged my credit by 75 points. Also, to compound the problem, I had to pay $6,200 to get the property out of foreclosure status. Half the money went to past due mortgage payments while the other half went to attorney fees. This was a hard life lesson learned for me. I thought I could trust my wife’s father. The man even contributed $10,000 toward our wedding. He would never do anything to harm his little girl or her husband, right? WRONG!

Here is my advice to you. If you ever enter a business venture with anyone open an online account to keep tabs on things or call customer service once per month to confirm your account is in good standing. Of course, you could also be the one who pays the bills (which I am currently doing) to make sure it gets done in a timely manner. Finally, you may consider a credit service like one of my friends to give you monthly credit alerts should anything negative hit (a monthly fee is involved). That way you will have the information in hand immediately.

Learn from me my friends. Here we are two years later and I’m still trying to get the mud off my jeans. I’ve already tried Tide, Wisk, ERA, Extra, Arm & Hammer, and Shout to no avail. Perhaps with time it will fade, but it will always be there.

StudentPlatinum.com has created a useful resource for students and parents who are wondering what they can do to improve their credit.  The primary benefit of improving your credit is that you can secure lower rates and more favorable terms on loan and credit cards.  Get more information on how to Improve Your Credit Score at:

http://www.studentplatinum.com/improve-credit-score/

Win a $1,000 Scholarship or one of 9 hand held (”flip”) Video Cameras plus get 125 Scholarship Points!

We’re looking for the Scholarship Points Idol YouTube Video Contest, the member with the most talent and the most votes. Submit your original video entry between 7/4/2008 and 9/5/2008 to earn points and win great prizes! Get details below.

Learn more at:

http://www.scholarshippoints.com/scholarshipidol

So, your child wants to go to that private University costing $45,000 per year and you’re wondering how on earth you’re going to pay for it. 

They have worked hard thru High School, received a merit scholarship, have taken their PSAT, SAT, & ACT exams to prepare themselves and are excited about this new chapter in their young adult lives. 

You on the other hand are a little less excited, and not because empty nest syndrome has set in prematurely.  How am I going to pay for this you are thinking to yourself?  It is the million dollar question.  I just hope the million dollar question doesn’t cost me a million when my son is of age in 18 years.

Here are a few things to consider.  FFELP Parent Plus loans are currently fixed at 8.5% which is really high in relation to private student loans, which many can get in the mid 6% range with good credit these days.  The fed funds rate has dropped precipitously over the past several months which have spurred these lower private interest rates and has swung the pendulum in favor of private loans for many.

Both loans can be repaid after the student graduates, which are nice benefits, but you are only delaying the inevitable while interest continues to capitalize.  If you can at least afford to make interest only payments while the student is in school it would certainly be in your best interest.

Another thing parents often ask me is who is responsible for the payment on these loans when the student graduates?  The parent plus loan is linked to the parent’s social security number, so the parent is responsible for that one.  The private student loans are generally in the students name with the parent listed as a co-signer.  This would be the student’s responsibility and after 36-48 months of on-time payments you can get your named removed as a co-signer.

The parent plus loan also holds a tax benefit.  You can write off the interest provided you do not earn more than $70,000 if you are single and $140,000 for joint filing.  On a side note many parents with a joint income exceeding $140K are actually looking at home equity loans.  Interest rates are so low on equity loans currently and they can write off the interest at the end of the year. 

As you can see you have a few options, but only you know what is right for you.  Happy spending.