05.26.09 | Student loans pros and cons

Posted in Student Loans by Student Loan Network Staff

Mary on Twitter asked:

Working on post about pros and cons of getting student loans. Your thoughts? Any links? Thanks!

Here’s a brief list.

Student loan pros
- Student loans allow you to afford colleges that you couldn’t pay cash out of pocket to attend
- Student loans, especially Stafford and PLUS federal loans, have fixed interest rates that, while not always the lowest, are predictable and easy to budget for
- The Stafford loan requires no creditworthiness, only eligibility based on the FAFSA, making it ideal for tough economic times
- PLUS loans and private student loans require creditworthiness but no demonstration of need, making them suitable for families that are too well off to qualify for need based aid but not well off enough to simply cut a check to the college
- Student loans, especially federal student loans, have a variety of flexible repayment options, including payments that scale with your income, along with deferment, forbearance, and consolidation

Student loan cons
- Student loans are largely non-dischargeable, even in bankruptcy, which means you’re stuck with them forever
- Student loans, especially federal student loans, can be collected via wage garnishment and a variety of other mechanisms that other loans can’t be, such as seizure of income tax refunds
- Student loans may not be the lowest cost of borrowing if you’re able to obtain good terms on other consumer loans like home equity loans
- Student loans can be far too easy to overborrow, especially for students who don’t have strong personal finance skills, graduating with massive amounts of debt in a few short years
- Student loans are convenient, which means that students may not pursue lower cost options for college such as aggressive scholarship searching or lower cost colleges

Ultimately, whether or not you borrow a student loan is a function of time. If you plan far ahead, if your parents plan far ahead, the chances are good you can attend college for very little money borrowed or no money borrowed. Students who have used our free college scholarship search eBook, Scholarship Search Secrets, have brought in tens of thousands of dollars each in scholarships, greatly reducing the cost of college. On the other hand, students who need funding as soon as possible find some success with our private student loans, at the cost of incurring debt that they’ll need to repay over the years ahead.

09.25.08 | Market still strong for Grad students

Posted in Graduate Loans, Private Student Loans by Student Loan Network Staff

The national unemployment rate has soared to 6.1%, according to the latest Bureau of Labor Statistics report, but that doesn’t mean everyone is feeling the pinch.

The hiring for those with an MBA remains strong despite layoffs and corporate cutbacks in this turbulent market. Hiring managers, which hired MBAs last year say they expect to hire the same many this year or even more, according to Graduate Management Admission Council. Some corporate recruiters even think they’ll have to fight harder to land top candidates.

I liken an MBA degree to holding that one ring in the Lord of the Rings trilogy. Everyone wants it, even in an economic downturn. Many view hiring those with an MBA as a long-term investment in human capital. It is always good to have the next manager in the pipeline should another manager retire or be lured away by a competitor.

So if you’ve been asking yourself if attaining an MBA is worth the time and investment – all signs point toward yes.

If you need a graduate loan for school (click here).

08.22.08 | Is College Worth the hefty price tag?

Posted in Student Loans by Student Loan Network Staff

That is the million dollar question, and I mean that literally not figuratively these days. Education costs have soared in recent years at a rate far greater than inflation. And with the U.S. population continuing to grow more students are seeking higher education. As a result Universities reap the financial benefits. The demand is high and the supply (number of seats) is low.

I’ve been having the great college debate with my buddy Brian, 33 years old, who recently went back to school. He thought a Bachelors degree from a premier school would unlock the door to a fat salary, but so far that has not been the case. In fact, in a well-known paper by Princeton economist Alan Kruegar and researcher Stacy Berg Dale at the Andrew W. Mellon Foundation they discovered the school itself did not translate to a higher salary.

It was discovered that salaries from students accepted to a top-tier school but electing to attend a less selective/more affordable institution, were similar. Bottom line, if you’re bright you’re bright and the cream will always rise to the top. Brian, for a smart guy, made a dumb decision and now has astronomical student loan bills from his “name school.”

Still, some will argue the name school attracts the most distinguished professors, and that your education is second to none. Also, the contacts you make during your college career can play a pivotal role in where you land in your professional career. At upper echelon schools you tend to rub elbows with dignitaries, royalty, and future industry leaders. So much of life is who you know and not what you know sadly.

Implicit benefits aside the price tag is still staggering for both students and parents even with scholarships and grants. It is a vicious circle. If you don’t go to school you have little chance of landing that high paying job, and if you go to school you may face so much student loan debt you default on your loans.

Another friend of mine entering his senior year at Boston College will graduate in May with just over $100,000 in student loans (both private and federal). He’s already reserved to the fact that he’ll either be living with Mom and Dad for the next several years or won’t be able to buy a house until he’s 40.

With a bachelor’s degree serving as this generations High School diploma it has certainly put students and parents in a precarious position. When my Dad reminisces of yesteryear he speaks of simpler times when everyone had a shot at the American dream. Today the American dream has turned into an unattainable nightmare for so many. Something needs to change.

08.19.08 | My school won’t certify my loan, now what?

Posted in Student Loan Links by Student Loan Network Staff

If your school participates in the Federal Family Education Loan Program (FFELP) they are not permitted to refuse to certify a loan because of the lender the borrower has selected.

The law and regulations clearly prohibit institutions from refusing to certify a loan based on the borrowers choice of lender. Section 432(m)(1)(B)(ii) of the Higher Education Act of 1965, as amended (HEA). The Department’s regulations at 34 CFR 682.603(e) further provide that the limited authority under which a financial aid administrator may refuse to certify a Stafford or PLUS loan does not include the borrower’s selection of a particular lender or guaranty agency.

Furthermore, a school’s failure to comply with these requirements may result in the Department of Education imposing a fine or taking other administrative actions.

So if your FAO refuses to certify your loan based on the lender just quote the Higher Education Act of 1965. That will send chills down their quivering spine!

09.19.07 | You've Signed a Stafford Promissory Note….Now What?

Posted in Student Loan Links by Student Loan Network Staff
Applying for a Stafford Loan can be a daunting task….but it does not have to be. Here is a quick break down of how the process works once you fill out the Stafford Loan Promissory Note (MPN). See the steps below.
Let’s assume you opt for an online signature:

A. You fill out your personal information on staffordloan.com.

  • Tip 1: Be sure that both of your references do not have the same address as each other. This will cause a delay.
  • Tip 2 : Be sure you put the correct school and campus. If your school is not listed, call them to see where you should get the MPN.

B. Check your email for the link to your electronic MPN. Click the link and follow the instructions on how to “docusign”.

C. Approximately 36 hours from your signature – a school certification form will be sent to your school’s Financial Aid Office.

  • Tip 3: Follow up with your school to make sure they fill that form out and return it…or else your loan will not be completed…if you are not sure if your school will certify the loan just double check on your financial aid award letter to see if you were in fact eligible to borrow a Stafford loan.

D. Remember that Promissory Notes are good for up to 10 years, but typically you have to “accept” the loan every year. Do not assume that because you filled this out freshman year, it will automatically renew. Stay on top of it before every school year. If you need information about other ways to pay for school visit any one of the sites below.

Private Student Loans
ACT Loan
Scholarships