Student Loan Help

Online education has undergone a metamorphoses in recent years, not unlike the ugly caterpillar that blossoms into a beautiful butterfly. The concerns once raised by skeptics centering around the validity and relevance of an online degree in the marketplace have since been quelled. Questions now tend to focused on payment options. I think you may be surprised to learn just how easy it is to finance your online education.

Many online schools participate in the Federal Student Aid grant and loan programs, just the same as any certified ground campus you may attend. That means for schools such as the University of Phoenix, Kaplan University, American Intercontinental University, Argosy University, Walden University, Keiser University, Capella University, Everest University, and Grand Canyon University, just to name a few, federal loans are at your disposal. They are all Title IV certified schools that offer federal aid to their students.

To qualify for federal aid you simply complete your FAFSA and list the school or schools (up to four) that you are interested in attending. The school(s) will then receive a copy of your student aid report from the Department of Education which they use to determine your federal aid eligibility. But for those who do not qualify for federal aid, or don’t qualify for enough, private loans are also available to you.

Private loans serve as a great supplement or alternative to federal loans. And with interest rates at historic lows there has literally never been a better time to borrow the funds needed to help cover the cost of tuition, books, and other direct educational needs.

It is also a good idea to sign-up for as many scholarships as possible. Here at the Student Loan Network we give away free scholarships every month ranging from $500 to $10,000 to eligible students. What students love most is that you don’t need to hold a certain GPA or submit an essay to qualify. If you attend a certified Title IV school located in the U.S. you are automatically qualified. Don’t miss out. To register (click here).

Follow your dreams and find the online degree program that’s right for you.

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I found this article from the Washington Post and found it to be interesting because it gives insight from the financial aid administers view. It also backs up my theory that students should (and probably need) to start considering schools because of their cost, and not focusing all on the school’s reputation. While you may not realize it now, student loans can be seriously affect your financial future, and borrowing excessive amount of student loans to attend a private university may not always make sense for you and the career path you have chosen.

College: How to Pay for It

By Stacey Garfinkle

The college decisions are mostly in and there’s lots of good news for the high school class of ‘09: Many private colleges accepted more applicants than usual this year. The bad news is the reason why: the recession.

Colleges this year are expecting the economy to affect the numbers of teens who choose to attend their schools. Surveys point to families looking much closer at financial aid packages. “Students are shopping around — no doubt about it,” Phil Day, president of a financial aid administrators association, told The Post.

And that’s exactly what they should do, according to Seth Allen, the dean of admission and financial aid at Grinnell College. Allen is also a member of the Board of Directors of The Common Application. Here’s some of a Q&A with him on financial aid:

Q: How should families approach financial aid? What can they expect?

Allen: The first thing I think, there are families out there who make a reasonable income. They feel comfortably well-off. They might be inclined not to apply for financial aid. That’s a mistake. A two-income household with one child that makes over several hundred thousand dollars is not likely to qualify for aid. But somewhere south of that, even families who earn $150,000 to $180,000, they really should sit down and fill out the Free Application for Federal Student Aid (FAFSA) — that’s the base instrument almost universally used by colleges/universities for need qualifications.

Step Two: While I’m sure financial aid offices don’t want to be inundated, there seems to be a hesitancy to engage financial aid offices about what might be available and if a family might qualify. Without FAFSA data, the aid office can’t give a specific recommendation, but they can talk to a family in general and give very good guidance to the family about what they might expect. A typical aid package is composed of three components: Grants from the college or university are typically the largest. The money is given to the student and family to fill part of the gap between what the college expects the student to pay and total cost of attendance. The second component is loans. Students, especially very needy students, are packaged with favorable loans and low interest rates [Sallie Mae recently changed the payback policies for its student loans so that students make interest-only payments while they are in school rather than fully deferring payments]. The third component is a job on campus, which is typically packaged as a federal work study job. The government earmarks money to colleges and universities to subsidize college jobs.

On their Web sites, colleges will often report out the average need-based package. That can give families a sense. They shouldn’t read it as “if I apply, that’s what I’ll get.” But it is a proxy about the kind of package they might expect to see.

So, what should a family do if their 529 accounts have plummeted?

Allen: Colleges would take the 529 as an asset specifically earmarked into college and factor that into family contribution. Most financial aid is not done on a real-time basis. It looks back at the previous year and what was available at that time goes into the calculation for the next year. Could a family make an argument if their savings and 529 have gone down dramatically? They probably could. And if the college has the resources to meet that need, it would be likely to do that.

Families now are going to feel far needier than they’ve felt in years, collectively. Colleges recognize that. At the same time, some of the income that colleges have relied on from endowments has gone down as well. I’ve heard from many institutions that they are going to put more funds to financial aid. At the same time, those are not limitless funds. Families need to be aware that colleges don’t have the same strong income that they’ve had in prior years [donations and endowments are down]. There’s potential this year more than in the past that they won’t be able to fund that gap.

What else should families consider?

Allen: Financial aid officers have the ability to make professional judgment calls. Families fill out an FAFSA and a CSS profile, send that in, and that helps the financial aid office make a calculation. Oftentimes, family situations aren’t that neat and tidy. Families have expenses that put pressure on finances that make the federal calculation of need not workable. If they have other kinds of qualified expenses, they can submit documentation to the financial aid office that establishes those expenses as legitimate and they can take that into consideration to recalculate. That’s one way families can find ways to afford college this year.

For example, a student might have a sibling at a private school. That’s not automatically taken into consideration and isn’t asked for on an FAFSA form. Many colleges consider that a legitimate expense and can take that off of the family’s income. That will make the family more eligible for a larger aid package.

Another example is the cost of living differentials in different parts of the country. The basic costs of living in D.C. are far higher than if you lived in the Harrisburg, Penn., area. Not every aid office will have a policy to do something with that information. But families could make a case for the allowances given housing and cost of living costs in your area. Where they may not help is something that’s clearly a voluntary choice — for instance, I live in New York and I want a break because I live in the West side in a very expensive apartment. You could live in less expensive place in New York.

What about other government aid?

There’s not a lot at the moment that we really know for sure with the new administration and secretary of education. But there are some nice things in the stimulus package that would be good for families to understand.

• Pell Grants: For very low-income families, the federal government grant is increasing by roughly $600 dollars from this year to next year. That will help make college a little more affordable.
• American Opportunity Tax Credit: This is up to $2,500 for families and is partially refundable. Very low-income families can get up to $1,000 back. So, it doesn’t help on the front end. However, the income levels on this have been raised dramatically. Under old tax credits, income levels were under $100,000. Under the new plan, the adjusted gross income is up to $160,000 for married couples. It should hit a broader swath of the middle class who, I think, is acutely feeling the pinch of these college costs. For full article click here.
  

Recently, President Obama has been talking about his plans to make college more affordable for families and students. The President’s plan is to increase the Pell grant, and make Federal student loans more accessible to students. Students from Kent State University recently asked Obama about his plans and when exactly those changes would take effect:

At this time last year the prime rate, which is the benchmark widely used to determine the interest rate on a number of loans, was a respectable 6%. Today, that rate is a jaw dropping 3.25%, the lowest it’s been since 1955. To put that in perspective Dwight Eisenhower was our President, a first class postage stamp cost 3 cents, and Marty McFly was desperately trying to get back to the future. I guess the more things change the more they stay the same. But how can you benefit from a low prime rate?

Many private student loans are tied to the prime rate index, and since the prime is at historic lows the cost of borrowing is significantly lower than it has been in years. This fact has parents and students debating whether they should take out a private or federal student loan. Undoubtedly your qualifications and priorities will serve as your guide when making this important decision, but there are some key factors and benefits to consider during your deliberation process.

Information provided by the Student Loan Network for general information purposes only.

As you can see, variable interest rates for private student loans start at 2.75% (because the prime is 3.25% and rates start 1/2 point below prime). However, the catch-22 for many Americans is that while this favorable rate exists it is not attainable.

Low interest rates are reserved for those with strong FICO scores, an endangered group which dwindles by the day. Millions of Americans have been defaulting on loans over the past 18-months sending their credit score into a damning abyss. A compromised credit score essentially disqualifies you from the most salutary interest rate in the market. And it’s not just the borrowers with a scar on their credit history that are facing new hurdles; the pinch is being felt across the board. Those with stellar credit are adjusting to new requirements as well.

Most lenders, regardless of the individuals credit score, are requiring a co-signer on all applications to protect themselves. But finding two credit worthy applicants is a harrowing task in today’s market, which makes federal loans the only realistic option for many desperate students.

Federal loans serve as a dynamite need-based option for those seeking funds for school. You don’t need a co-signer, and eligible students can actually qualify for more funds if their parent or guardian has poor credit. To qualify for a federal loan you must complete a FAFSA, and must also attend a qualified Title IV school. That said, federal loans do have a few drawbacks.

First off, the maximum yearly allotment is relatively small in relation to the cost of tuition, and will most likely only cover a fraction of the tuition cost. Next, the interest rate is fixed and can not be decreased for the life of the loan. Third, some lenders charge a 1% origination fee off the topic. And lastly, many feel the current Stafford loan rates, which range from 6% to 6.8%, are outlandishly high in this market.

As you can see each loan type has its advantages and disadvantages.  Just be sure to do your homework before you sign on the dotted line.  If you do you’ll be sure to ace your tests inside and outside of the classroom.

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Teens are feeling the economic pinch just like the rest of us, which makes scholarships a necessity and not just a luxury for many looking to go to school. Summer jobs, seasonal retail help, after school employment, and temp work are near impossible to find these days. No one seems to be hiring.

Since June alone the unemployment rate has jumped from 5.6% to 7.6% leaving millions of Americans out of work. You need to go back nearly seventeen years to September of 1992 before you can find comparable unemployment numbers.

One of the main problems facing teens in getting a job is the competition. They are no longer going head to head with their peers. Teens are competing for the same jobs as workers in their late 20’s, which generally have more work experience and offer more value to an organization. It is tough times for all, and no age group is exempt from the impact. A rising tide may raise all ships, but a tidal wave can leave you shipwrecked.

Until that tide rises again I suggest entering every free scholarship drawing you can find. Divide and conquer. Two big giveaways are on the horizon. Freecollegescholarships.net is offering a 10K giveaway on 3/25 and scholarshippoints.com is holding their first big 10K drawing of 2009 on 3/31.

For those of you who are already scholarshippoints.com members here is a special 10-point code for you, ILOVE10K.

What do you guys think? Do you agree about the job market? Have you been let go from a job, or know the seasonal employment you are accustomed to will not be available this year?

I find the older I get the more cynical I become. Perhaps that’s because I’ve been burned so many times before. I now tend to look at opportunities with a skeptical eye. When someone tells me something is FREE I immediately think they are full of crap. I guess I’ve been conditioned to believe if you pay nothing in life that’s exactly what you get in return. Well, it takes a big man to admit when he’s wrong, but….I was wrong, at least about one opportunity.

Scholarshippoints.com is giving away $10,000 at the end of March, NO STRINGS ATTACHED; unless you consider signing up so they know who you are and where to send the money a string.

Laura Mack and Victoria Fiorentino were the big 2008 10K winners. They were not jaded by the world like me, and that literally paid off for them.

Are you more a Laura & Victoria optimist or David pessimist? The fact is someone will be walking away with 10K next month whether you choose to sign up or not. But if you don’t sign up your chances of winning are exactly 0.00%. Really, what do you have to lose? Sign up today.

If you are in school at a College or University, and you are not independently wealthy, then chances are you are familiar with the FAFSA, the Pell Grant and the Stafford loan. If your parents handle all your tuition bills, forward this blog to them, because in these tough times it is increasingly more difficult to get those bills paid.

Ok so here is the scenario:

• You fill out the FAFSA every year, and you are getting the maximum amount possible in the Stafford loan. If you aren’t sure what the max amounts are you can click here (and scroll down).
• You are not eligible for the Pell Grant because your parents make too much money, OR you do get the Pell Grant, which can range anywhere from a few hundred dollars a school year to $5350 a year (amount increased from last year because of the new Stimulus Bill).
• The school gives you institutional aid.

Now you add up all this aid, and what do you have left? A balance most likely, that is due to the school before you can register for classes. The reason for this is even with all this aid, the cost of attendance is so high now, that financial aid (in the forms of Federal loans and grants) is not usually enough to cover the tuition costs. So what are your options?

4 solutions/options for getting that bill paid:

1. Check with someone IN PERSON at the financial aid office and make sure there is no other federal loan or grant you could potentially be eligible for (Perkins, federal supplemental loan, more Stafford). Also check to see if there is any more institutional aid available. It does not hurt to ask. Seeing someone in person can make a difference as well.
2. Search for scholarships. There are scholarships out there for everyone, and most of them are not merit based (meaning you don’t need to have accomplishments under your belt, etc..)…Here is a good place to start: http://www.studentscholarshipsearch.com/ (If you want more information about winning scholarships, post a comment and I can point you in the right direction).
3. If your parent is willing to borrow a loan in their name to help with your tuition costs then the Parent Plus loan should be their first choice. It is a Federal loan in the Parent’s name used to cover tuition costs. Payments CAN BE deferred until the student is out of school. This loan can never be transferred to the students name, at any point in time.
4. If your parent is not willing to have a loan in their name, then look into a Private Student loan. Keep in mind that in order to get a Private student loan, you usually need a cosigner…especially with the tightened credit standards we are all experiencing.
5. If #3 and #4 are not an option for you, then I would suggest looking at state and community colleges around your home. I can’t stress enough how little it matters where your degree comes from. As long as you have one, it won’t matter what school you got it from (excluding the IVY League schools, and certain other elite schools). Check out the programs your community college has, you might be surprised. You have to ask yourself if it’s the degree you want, or the experience you have while you are getting that degree that is more important. Try and get a grasp on what a huge amount of student loans can do to your financial future.

Special Points Code: IAMTAPPED

For more information and more financial aid help from people who are experiencing the same issues you are, visit this Financial Aid Forum.

They say March comes in like a lion and goes out like a lamb, but that’s not true at all! One lucky winner will be roaring on March 31 after winning 10K!

Who remembers the $10,000 Pyramid? Anyone? It was the original game show hosted by Dick Clark in 1973 before it later became the $25,000 Pyramid in 1982. I’ve seen the reruns on the Game Show network and it looks challenging. You go head to head against an opponent (with your celebrity counterpart) before you step into the Winners Circle and have 60 seconds to get six clues right to earn your 10K. It’s a brain strain for me. Personally I’d prefer something a little less pressure packed. And on that note, what if I told you that scholarshippoints.com offers students a chance to win 10K with little brain strain at all? Would you be interested? Of course you would!

On March 31 the Student Loan Network will be awarding one lucky student 10K! That’s right, $10,000 big ones for college. You don’t need to hold a certain major, have a certain income, or be able to solve clues in a pyramid. You just sign up for free and enter. That’s it! To sign up (click here).

A scholarship is defined as a sum of money or aid granted to a student, because of merit, need, or other, to pursue his or her studies. That seems pretty straight forth, with the exception of the “other” category. It is this category I would like to discuss further.

When I was going to school in the early 90’s I filled out paperwork, wrote essays, and hoped my poverty line upbringing would entitle me to some free money. And while I did get some Benjamin’s it wasn’t near enough. Now fast forward to 2009. I work for a great company that is GIVING AWAY thousands of dollars each month for FREE! That’s right, no essay, no interview, no FAFSA form, just you. We don’t care if Mom and Dad make $20,000 or $200,000 per year – you’re in the running!

We’re an equal opportunity giver awayer, well kinda. You can accrue daily points simply by logging in, reading a blog to get a code, or by taking a survey. The more points you collect the better your chances of winning. You then enter your points into the monthly drawings. We give away between $3,500 and $10,000 per month! We’ve come a long way since our $250 per month pledge a few years ago.

Get on board. Win some cash. We’re way cooler than the Red Hot Chili Peppers who like to give it away, give it away, give it away now.

To register to become a scholarshippoints.com member (click here).

It seems the frustration level is rising. Times are tough, people are losing their jobs, and schools are raising tuition costs. Lenders are changing their portfolios, trying to stay afloat. All of this makes it very hard for a student to get a loan they once got in the past. Gone are easy to receive International school loans, gone are the private consolidation loans, gone are the loans that pop up in your mailbox. You can still obtain a loan, but it will most likely be different from any private loan you have had in the past. It may also require you to have a cosigner, even if your credit score is perfect.

This frustration is real, and it’s resulting in some students dropping out of school, even if its just for a semester while they get all their ducks in a row. So the question is what to do, how to prepare accordingly. If you relied on private loans in the past to pay your tuition, check with your school to make sure they will accept private “school certified” loans…as this seems to be the most prevalent loan in the market right now. If they do not handle those loans, then I would suggest looking into a cheaper state school, which you can afford with just Federal loans.

The biggest mistake I made, and others make, is going to a school for the name….and unless you are going to a Harvard or Yale, you very well may regret it in the future. Assuming large amounts of debt, and not being able to pay it will affect you for the rest of your life.