Student Loan Help

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.

The Financial Aid Podcast is hosting a select group of financial aid, media and industry leaders to participate in a live podcast addressing the recent news regarding the credit crunch and student loans. Learn how you, as a student, parent, or family member can pay for college in 2008. Student questions such as the following will be addressed:

* What is the current status of the student lending market? Will loans be available to me?
* I keep hearing that loans might not be available from some lenders - what does that mean for my Stafford loan?
* What is the government doing - or what should they do - to help make paying for college a reality for most students?
* Where can I find scholarships, grants and other financial assistance?
* What do “tighter credit requirements” mean to me?

Show will air live April 9 at Noon EST.
Register Now to ask your questions in advance!

Two things people do not always realize:

1) You must complete the Free Application for Federal Student Aid (FAFSA) in order to qualify for federal student aid, including the Stafford Loan. There is still time left so get it done online at www.fafsa.ed.gov.

2) You are not done once you complete the FAFSA. You then actually need to apply for a Stafford Loan - and any other aid you are interested in. Talk with your financial aid officer, seek other resources and apply as early as possible.

To find College Scholarships, visit www.StudentScholarshipSearch.com

If you are a high school senior and are planning to go to college in the fall, the first step in the financial aid application process is the FAFSA. What is a FAFSA? It is the Free Application for Federal Student Aid. What is it for? You have to complete this government form to qualify for federal student aid, including Pell Grants, Stafford Loans and often college administered scholarships and grants.

For help and advice visit: FAFSAOnline.com

Students who don’t want to complete the FAFSA often go right to private student loans to help cover their expenses. These are often more expensive than federal loans but may be easier to get if you have good credit.

FAFSA Financial Aid Application for 2008 - 2009 Academic Year

The FAFSA Filing season has begun. The FAFSA, or Free Application for Federal Student Aid, must be submitted in order for students to qualify for federal student aid as well as other forms of scholarships and grants. Fortunately, there is a great website, FAFSAonline.com, that offers useful advice and helpful tips on how to complete the FAFSA and qualify for additional financial aid.

Visit: http://www.FAFSAonline.com for more information.

If I could make two suggestions to anyone applying for financial aid, they would be:

• Complete the FAFSA Form EARLY, and
• Search for and Apply for scholarships as often as possible

Why?  The two biggest mis-perceptions are:

• The FAFSA Form is too complicated (so I will put it off until later)
• There are no scholarship I will qualify for

The FAFSA Form is not easy.  However, it can be done and most people will have to complete it anyway.  The Student Loan Network has created a guide to help you with this challenging task: www.FAFSAonline.com.   Use the guide to help you complete the FAFSA.

Get it done early to qualify for more aid.  Most federal and school financial aid programs will require that you have completed the FAFSA.  If you have it done early, there will be more financial aid available for you to qualify for.  The longer you wait, the less aid there will be left for you to apply for…

Finally, there are thousands of scholarships designed for all types of people - even you.  We have created a useful tool with an ebook on searching the internet and applying for scholarships.  Search our database and/or download your free ebook online at: Student Scholarship Search Guide.  Again, apply early as many awards won’t be there if you wait too long.

Ever since I was a teenager my father, Stephen E. Bonvie, spoke these eloquent words, “The power of disciple the rewards of time.” He spoke these words in context of saving money. Of course I was caught in the age old conundrum of having the knowledge and game plan at age 15, but not having the means by which to execute these words. As you get older you tend to possess the income, but have already let valuable years pass you by. It’s a tough paradox. Honestly, most of us struggle just to keep our heads above water, and loans serve as the perfect bridge to get what we want. We are a buy now pay later society. We take out loans for everything these days. We take out loans for automobiles, homes, computers, and education; just to name a few. The key is to take out loans on assets you forecast will appreciate over time - like education.

When you make the decision to go to school you are making an investment in yourself and your future. You yourself become an appreciating asset. Knowledge after all is power and school is certainly a wise investment. Of course you still need to make the right decision when it comes to taking out loans for school (assuming you don’t have the means by which to pay for tuition up front). It is critical that you make intelligent decisions before you enroll in school or you will be looking at a mountain of debt that would make Mt. Everest look like a leisurely Saturday afternoon climb with the kids.

The first thing you should do is complete your Free Application for Federal Student Aid (FAFSA). Once completed you will be sent an awards letter from your school outlining which federal loans and grants you qualify for. It’s usually best to take out federal loans over private as they provide a more generous fixed interest rate and have better borrower benefits. It’s also important to note that Federal loans, such as the Stafford loan, do have yearly and aggregate maximum allotments. In the event you have met your maximum federal allotments and still need additional funds for school I would then recommend private loans.

I hope these student loan tips will help guide you in the right direction. I think we all need a little direction in this fast pace world from time to time. I have been fortunate to have my Dad guide and teach me many of lives lessons; lessons I will be passing on to my son Barrett, and lessons I will be passing on to you the reader in the coming months. Just think of me as your student loan father. I will not steer you wrong. After all, father knows best.

This morning, I chatted with a young woman who needed to have her FAFSA completed ASAP. She was told by financial aid that she could qualify for Stafford loan but needs this once piece of the puzzle completed in order for her to obtain any sort of financial aid. She called me because she needed advice on how to get the FAFSA completed ASAP. I explained to her that I felt the most efficient way is to complete the FAFSA online at www.fafsaonline.com. I know it’s scary stuff filling out such a lengthy document completely online. But I promise everyone, the Internet is our friend! Do the FAFSA online! Reason why is because the Government needs the FAFSA filled out just right. When you file online, the system will catch a lot of mistakes and send you back to fix them.Your on your own if you fill it out online. If you do certain things incorrectly, you’ll receive a bunch of paperwork that basically means denied!

Also, keep in mind that you have to update this paperwork every year you are in school. When you do it online, all of your forms will be saved from year to year so it can be completed pretty easily.

Trust me folks do it online! Soon enough the paper form will be extinct.

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

Student Loan Network

As a Customer Service Representative at the Student Loan Network the questions I most often here is, “How do I get the Stafford Loan?” and “What is the difference between subsidized and unsubsidized’ and finally “How do I get my Stafford loan money?’
All questions are great and important questions to ask. Listed below are my answers to the commonly asked questions”¦.

How do I apply for the Stafford loan?
You must fill out a FAFSA application to see if you are eligible for the Stafford loan. Virtually everyone is awarded this loan however you need to fill out the FAFSA paperwork for the school to review and determine your eligibility for Federal Aid (i.e. Stafford loans, Pell grant, Perkins loan, etc.) Once you are awarded the Stafford Loan money you can go to www.StaffordLoan.com and get your Master Promissory Note to agree to the terms and conditions of the loan. Depending on your school’s process you may need to print out the MPN or do an electronic signature.

My award letter lists subsidized and unsubsidized Stafford loans. What is the difference?
Subsidized Stafford loans are need based and interest free while you are in school. Unsubsidized Stafford loans are non-need based and interest accrues on the loans while the student is in school.

How do I get my Stafford loan money?
The funds for the Stafford loan get disbursed directly to the schools financial aid office. The money is put into your student account, applied to any outstanding tuition or fees and the amount left is then issued to you via check. If you are interested in receiving a refund check you need to coordinate it with the school’s financial aid office and not the lender.

If anyone has any questions on financial aid I’ll be glad to try to help or answer any question you may have. Thanks for reading.

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

At the Student Loan Network we have been receiving a ton of phone calls from parents and students. Basically, the majority of the calls are confused potential borrowers who are trying to figure out what makes someone eligible for the Stafford Loan.

The requirements are the following:
-Enrollment at least half-time as determined by the school
-U.S. Citizen or permanent resident or eligible residential status
-Satisfactory academic progress as determined by the school
-Not in default on any federal education loans
-Have filed a 2007 FAFSA
Stafford loans are the most popular federal loans available to help students pay for college. These loans have low interest rates and do not require credit checks or co-signers. Also, the Stafford loans provide a variety of deferment options and extended repayment terms for borrowers who need more time to repay their loans. They are available to both undergraduate and graduate students and can be used to cover eligible expenses such as tuition and fees, room and board, books and supplies and a living allowance.

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