Private loan

Federal Loans Are Becoming Less Available In Community Colleges

admin — Tue, 29 Jun 2010 18:49:31 +0000

Given that the costs of college education are on the rise, students turn to loans to help finance their necessities. Among the most reliable of these are federal loans because of the low interest rates and light payment options.

However, federal loans are becoming less available particularly in community colleges. The reason for this is that most students who apply for these loans are those who are taking up 2-year degrees. Unlike students pursuing 4-year degree programs, students under 2-year degree courses pay less school-related expenses. It only takes them a couple of years to graduate, after which they can immediately seek full-time work.

This situation may favor loan boards and appear to address increasing student debt. However, scrapping federal loans in community colleges seem to miss the point.

What college administrators do not realize is that federal loans do not only help students finance their college needs but also tide them through when they have little money for everyday expenses. These loans also act as their operational capital while investing time and effort to land jobs after the semester ends.

While it’s true that aside from federal loans, community colleges also offer private loans and credit card loans, these loans are much more expensive and have higher borrowing standards that most low-income students cannot afford.

Other government and private scholarships as well as other forms of financial aid, are also available for these students to apply for. But federal loans make up an important percentage of student aid, so these should be made more accessible, not less.

By: Fae Cheska Esperas

Basis and Understanding – School Loan Forgiveness

admin — Sat, 26 Jun 2010 13:07:11 +0000

Cancellation of all or some part of the educational loan under certain circumstances or conditions rendered by the federal government is what school loan forgiveness connote. Inshort, forgiveness is a practice in which an individual has to serve the public in order to waive off some or whole of the school loan.

In order to qualify for forgiveness certain eligibility criteria is set. This includes- serving the military, doing voluntary work, to teach or practice medicine in selected communities’ etc. School loan forgiveness is designed specifically for students so that they are able to achieve their educational objectives. By doing so, this will help them get stable jobs in particular occupations.

However, it is only applicable if the student takes up educational loan under the Federal Family Education Loan Program (FFELP).

The school Forgiveness Program is applicable to few selected fields/programs or professions these include,

- Federal Child Care Provider Loan

- Federal Teacher Loan

- Armed Forces Loan

Apart from this, there are certain private, non-profit organizations that are affiliated with the Federal Family Education Loan program. This affiliation gives them authority to offer school loan forgiveness to students provided that they fulfill certain work-related requirements.

School loan programs:

Forgiveness programs are being offered to teachers to nurses to young doctors as well as lawyers and Peace Corps.

For teachers who are working at low-income schools such as elementary school or secondary school may avail the school loan forgiveness program and cancel up to $5,000 of their Federal Stafford loan debt.

For young professionals serving as doctors and lawyers, forgiveness can prove to be a blessing in disguise as they are burdened with a debt that ranges from $50,000 to $100,000 which is very common.

The National Health Service Corps offer forgiveness to the students enrolled in medicinal programs on the basis that they serve the communities for two years. By availing this program they can wipe out as much as $25,000 every year.

Moreover, the same offer is also valid and open to lawyers or legal advisors who pursue their career at public legal firms. Around fifty law schools are offering school loan forgiveness programs.

Equal Justic Works, formerly known as National Association of Public Interest Law, has a list of schools on its website that offer school loan forgiveness program. By not availing school loan forgiveness many legal representatives can not practice at low-paying public interest law firms.

By: Sara Sentor

The Benefits of Student Loans

admin — Thu, 24 Jun 2010 06:51:34 +0000

Everyone knows that college can be very expensive. It is an investment in your future and should be handled as such. Hopefully you have some sort of savings to start. If not, that does not mean that college is beyond your reach.

Your first step to securing your financial future is to apply for scholarships and grants. These types of student aid do not have to be repaid. Therefore, they are going to be your best and first option when it comes to paying for college. The problem with scholarships and grants is that not everyone qualifies. Even if you do qualify, the amount that you receive may not be enough to cover all of your expenses. This is where student loans come in.

Student loans can be taken out by students to help pay for college. Student loans have special provisions to help students with little or no credit qualify. Student loans are granted under the assumption that once you graduate, you should be able to make a higher income and pay back the loans.

A lot of students are under the assumption that they will graduate college and get a job paying them a hefty salary. This is not always the case. Many jobs require a few years experience at one company before they will pay you for what you may think you are worth. Therefore, paying back student loans may not be as easy as you had planned.

This is where the benefits of student loans over conventional loans come in. For one, you are not expected to make payments or accrue interest on your student loans until after you graduate. These types of loans are set up with all sorts of provisions for repayment. If you get into a bind, contact the company that manages your student loans. You may qualify for deferred payments or some other sort of payment help.

Incentives are another thing to consider when you are shopping around for student loans. Many offer interest rates that reduce over time if you make timely payments. Ask about fees and compare payback options. Student loans generally have lower fees and more flexibility than conventional loans. The same is true for private student loans. These allow for a cosigner and you may be able to take advantage of your parent’s good credit.

Getting through school on student loans is a must for most students today. Paying them back on time can really help build your credit and get you off on the right foot. Be responsible with your student loans and shop around before you commit. Making the right decision now can benefit you for years to come. Look for web sites that offer to compare student loans and private student loans from many different companies. This way you are sure to make a decision that you can live with.

By: Evelyn A. Saunders

Student Loan Repayment Using OPM (Other People’s Money)

admin — Thu, 24 Jun 2010 00:06:07 +0000

This article is an overview of ways to have other people make student loan repayments for you, or at least of portion of them. These programs aren’t for everyone, but the shoe probably fits quite a few people.

Join The Military
The SLRP (Student Loan Repayment Program) is used by the military as a recruiting incentive. The Army and Navy can repay up to $65,000 of student debt, and the Air Force will pay up to $10,000. 15% of the loan balance or $500 is paid each year, whichever is greater. Reservists can also take advantage of this program, but in lesser amounts (up to $20,000). There are also a number of loan deferments possible for people in the military. So if you are thinking about joining the military make sure you ask about the SLRP and make sure this benefit is specified in your enlistment agreement. Only federal student loans can be repaid in these programs.

Teachers
There are several programs available for teachers to get help paying off their federal (not private) student debt. The Stafford Loan Forgiveness Program gives eligible teachers grants to repay student loan debt of up to $5,000 after they have taught for 5 consecutive years in a low income school. Teachers can also qualify for the Public Service Loan Forgiveness Program. After 10 years in public service a person’s student loan balance can be forgiven. A teacher can enroll in an IBR (Income Based Repayment) Plan during those 10 years, and this will provide the lowest monthly payments possible until the loan is forgiven after 10 years. There are also some state programs available to help teachers pay off their student loan debt. Check the state government web site or call the education department of your state government to inquire if any programs are available that might help you.

Health Care Workers
There are a number of federal programs for student loan repayment that apply to health care workers. Under the Higher Education Opportunity Act of 2008, “full-time professionals engaged in health care practitioner occupations and health care support occupations” and “medical specialists” can qualify for up to $10,000 in student loan repayments over a period of five years. Also, Nursing Education Loan Repayment Programs (NELRP) will pay up to 60% of student debt for nurses who work in a critical shortage facility. There are also student loan repayment programs with the National Health Service Corps (NHSC) and the National Institute of Health.

Federal Government Workers
If you are employed by the federal government it is possible to obtain loan relief from the Federal Student Loan Repayment Program. This program is designed to retain or attract talent, and the borrower must agree to stay with the agency making the debt payments for 3 years. $10,000 of debt relief can be paid each year up to a total of $60,000.

Legal Workers
In order to attract attorneys to become public defenders, the government has instituted the Loan Repayment for Civil Legal Assistance Attorneys Program. There is a minimum service period of 3 years and up to $6,000 of student debt can be paid off each year with a maximum of $40,000 of debt relief.

Other Options
Of course friends and family can be asked at graduation time to make a financial contribution that will go toward paying off student debt. A couple of interesting web sites exist as well which give credit for many common purchases, and payments are made against student loans to help offset outstanding balances. Among these are upfriends.com. Small amounts can build up over the 10 years or longer life of the loan and make a real impact. Every little bit counts and helps.

By: Walt Ballenberger

Federal Direct Student Loans – A Helping Hand From Government

admin — Wed, 23 Jun 2010 11:53:18 +0000

Direct student loans are federal government loans provided through the William D. Ford Federal Direct Loan Program. These types of loans are designed to help students who have graduated from the high school and are continuing their education in colleges, universities or trade schools.

Direct student loans are part of the federal student aid programs administered by the US Department of Education. These loans are not offered through private lenders or companies. The loan agreement is between the student and the US Department of Education, without any agencies as a middle man.

Students that want to apply for direct student loans must complete a Free Application for Federal Student Aid (or FAFSA) over the internet and submit all required information and documentation. In addition each student will also have to complete a Master Promissory Note (or MPN). MPN is a legal document that explains the contract between the student and the Department of Education. It also outlines how the loan will be repaid and the specific terms and conditions of the loans.

After awarded with one of the direct student loans, you should sign up and use the Service Center. It provides you all the information of your payments and allows you to view the records on the balance you owe. If you need one, you can also obtain a counselor service from a Direct Loan Servicing site.

To be eligible for direct student loans, a student needs to attend the school that is participating in the direct loan program. Also, the student must be enrolling for at least on a part-time basis.

Types of Direct Student Loans

The two most common direct student loans are: (i) subsidized Stafford loan and (ii) unsubsidized Stafford loan. The subsidized loan has an interest subsidy and paid by the Government. Students who are awarded don’t need to worry about paying interest and hence can concentrate on his or her study in full.

Not all students will receive subsidized direct loans (Stafford loan). Only those students with very few resources and with greater financial needs are qualified for subsidized loans. Students who are dependent, or have parents that are able to help pay for their schooling are usually given the unsubsidized direct loan which doesn’t have an interest subsidy.

For graduate students who are considered independent or have families of their own to support, or no living parents to assist with educational funding can apply for PLUS loans. PLUS loans are low interest loans for graduate students and parents. These loans are under the same criteria as the Stafford loans, you’re required to complete and submit FAFSA and a MPN. Typically direct student loans have a limit on the total amount. Most students manage to get by with loans of $8,000.

Direct student loans have a fixed interest rate that is set every July 1st. There is also a loan fee that can be up to 4%. This fee is usually used to offset the cost of the programs or services.

By: Yvonne Suzannah

Am I Eligible For Student Loan Debt Consolidation?

admin — Sat, 19 Jun 2010 18:48:24 +0000

As a student who has taken admission in college for the first time or as parents who are planning to send their child to college, you can’t help but cringe, when you have to purchase textbooks worth thousand dollars or when you receive a bill for tuition fees. The rise in expenses associated with college education in United States has led to increase in demand for student loans. This has, in turn, increased the requirement for student loan consolidation services. Students, whether pursuing their studies in a graduate school or studying abroad have accrued huge debts, much beyond, what was considered reasonable, a few years back. Student loans have lower than normal interest rates and very flexible payment terms. This is because these loans are specifically meant for the people who are not employed.

But even with such low interest rates and convenient pay-back terms, many students may find it difficult to pay these loans as per the payment schedule. Student Debt Consolidation programs are customized to assist the students in managing their loans and thereby helping them to avoid defaulting on their debts.

There are debt consolidation agencies which are specially meant to manage debt problems of the students.

Basic Types of Loans

Student loans can be classified into federal and private. If you are one of those students who have taken both types of loans it is strongly recommended that you do not consolidate these two loans into one. Out of these two loans, only loans classified as federal can be refinanced as they are backed by the government. You should package all the federal loans into one and solve them before heading for the private loans. Private loans are mostly unsecured in nature therefore they charge interest rate which is higher than federal loans.

Criteria for Consolidation

If you would like to go for consolidation of your student loan, you will need to meet certain criteria. Firstly, it is required that either you should be out of the school or college and be in what is defined as the “grace period” of your loan or you must have already started repaying the loan in order to take advantage of student debt consolidation service. When you get in touch with a consolidation agency providing service to students, you must begin by asking them to get in touch with your creditors.

The agency will negotiate with these creditors and convince them to reduce rate of interest as well as your monthly payment. The repayment of your student loan has a direct impact on your prospects of taking loans in future, as is the case in any other type of loan. In case your student loan becomes more than 85% of total monthly income earned by you, it will be assessed as a negative score for any future loans. This emphasizes the importance of timely repayment of your student loan and its effect on your future decisions of borrowing money. Based on their evaluation of your financial position and repayment schedules, some debt consolidation agencies can qualify you for further debt reduction programs. These addition reduction programs assist you in many ways, most important of which is reduction in your interest rates. They also include savings made during grace period, automated direct debit payment and on time payments.

Beware

It is very important to state here that not all consolidation companies are genuine in nature. Therefore, you must apply to the consolidation company which is a famous company with credentials to support. Ignoring this advice may lead to substantial increase in your problems as such illegal companies will lead to higher debts.

By: John J. Baker

Federal Student Loans Suspended?

admin — Sat, 19 Jun 2010 06:09:15 +0000

The student loan industry faces many challenges. Lately, Federal subsidies have been cut back. This means that companies offering Federal student loans are no longer seeing a profit. Administering Federal student loans is no longer a viable option for most banks and other institutions. If they can only lose money by offering Federal student loans, then why should they offer them?

Many banks and institutions complain not only of the lack of subsidy money from the government, but also about the credit crisis. Subprime mortgage lending has run many banks into the ground. People are defaulting more than ever on home mortgages and costing the banks an arm and a leg. The rates have been affected all around. Credit is sometimes only being offered to only the best candidates and at a premium rate. Variable rates may be bound to skyrocket and many people will just be turned down.

Luckily, Congress just passed a bill to increase Federal student aid. This should increase the amount of money available to students, but it could be harder to find. The government subsidy money paid to financial institutions for administering Federal student loans has been significantly reduced. The subsidies had to be reduced in order for the government to have the money to lend, but the result is that many institutions can no longer afford to administer Federal student loans. The subsidies have not been taken away all together, only reduced. This was done to eliminate the taxpayer funded inflated profit being made by the lending institutions.

Many institutions will still offer Federal student loans and private student loans, but they may come at a higher price, require higher credit ratings or you may need a cosigner to qualify. Interest rates may have to go up to cover the cost. These types of loans are normally backed by bond securities, which investors are now turning their noses up at due to the credit problems today’s market is experiencing. All of these things combined are affecting student loans through a virtual domino effect.

All of this just means that you will need to be more diligent in your search for the student loan that is right for you. Although incentives and special circumstance loans are waning, you can still find student loans that meet your needs and bridge the gap between what you have saved and what you owe. Many people are finding that the internet is an invaluable resource when searching for student loans. Now you can go to sites such as http://www.student-loans.net and compare loans from multiple lenders. Unbiased information may be hard to come by at an individual bank or school, so do your research before you take on a Federal student loans or private student loans.

By: Evelyn A. Saunders

Seeking A Hard Money Commercial Mortgage Loan? Here’s What You Need To Get Approved

admin — Fri, 18 Jun 2010 02:06:06 +0000

Privately funded, often called “hard money” commercial mortgage loans are equity based loans written by privately owned lending companies or wealthy individuals. The loan approval process is fairly straight-forward when compared to conventional, institutionally funded loans, but private lenders have lending standards and loan parameters just like banks do. To secure an approval and get your deal funded you’ll need to understand what hard money lenders need to see in a loan request.

Equity

Private commercial mortgage loans are essentially equity loans. To be considered for funding by a hard money firm, a building or project must have significant equity. Land deals are usually done at 60% LTV or less. Buildings can receive offers of up to 70% LTV depending on the quality of the asset and its income production.

Large down-payments and/or hefty 2nd mortgages are frequently required by private lenders who will, generally insist on being in 1st position with a low LTV.

Cash

In today’s challenging credit environment, it is not reasonable to ask a lender to participate in a deal that is 100% financed. Regardless of the amount of “soft equity” in a property, virtually everyone, even hard money people, are asking that borrowers have a significant “hard equity” (cash) stake. Most private lenders are looking for at least a 10% cash investment by the principle borrowers. They will simply insist that their clients have something to lose if the deal goes south.

Exit

Hard money loans tend to be short term loans. 6-36 months is standard. Before they approve you for a mortgage they’ll want to know exactly how you intend to pay them back when the loan matures. If your plan is to sell the property, you’ll need to prove it’s marketable and have a sound strategy for finding a buyer. If you intend to refinance the private loan with a more conventional mortgage, you will need to prove that the project will qualify when the time comes.

Simple, not Easy

The private commercial mortgage lending process is a simple process, but that does not mean that it’s easy to get a deal done. A project must have a decent amount of equity, a cash investment will be asked of all borrowers and it is imperative that the exit plan is well thought out.

By: Glenn Fydenkevez

Look For Pre-Approved Student Loans to Complete Your Financial Package

admin — Mon, 14 Jun 2010 10:35:14 +0000

Once the acceptance letter from a post-secondary school arrives, the real work of determining how to meet the financial obligations to the school and the financial needs of the student begins. Many students look to student aid for that help. Before looking at private lending institutions, each student should complete a FAFSA (Free Application for Federal Student Aid).

Despite generous federal grants and loans combined with scholarships and work-study, many students still need additional help to meet their college expenses. Federal and institutional student aid programs often provide for tuition, books, and fees but only provide a percentage of room and board and other living expenses.

Even students that are well served by their financial aid package can incur unexpected emergencies, such as unexpected travel expenses, field trip opportunities, or day-to day expenses.

Both groups can benefit by a pre-approved student loan. The beauty of the pre-approved student loan is that you may never have to use it. Yet, if you do, it is instantly available.
Pre-approved loans allow the borrower to tailor the amount borrowed to their immediate need. In addition pre-approved student loans usually allow you to fix an interest rate, which can be handy in today’s volatile credit market.

Sources for pre-approved student loans are as close as your bank or credit union. Most banks that offer private student loans also offer pre-approval. In addition, a number of reputable lenders offering pre-approval can be found on the Internet.

In this year’s worldwide credit crunch, it makes sense to get a pre-approval now, for a need that may occur later. The number of private institutions that are offering student loans of any kind is diminishing due to new federal laws tightening the restrictions o student loans.

By: Gerd Cornelius Pacher

Understanding the Need For Student Loans

admin — Sat, 12 Jun 2010 00:02:38 +0000

Need is the only criteria that lead to a lot of assistance aided by the government today. Especially when it comes to student educational needs, every country’s government has definitely taken pains to invest on them.

When a student applies for a financial aid, his financial situation is analyzed and finally the need for students’ loan is recognized. When the family or the individual himself cannot finance for the educational period then the need for student loan comes into the screen to help all students.

Many private companies that exist to care students’ education perform this exact calculation of need for students’ loan. They include College Scholarship Service (CSS) or American College Testing (ACT), who calculate these figures for colleges, private institutions, and government agencies.

These private organizations are not the one that decides the amount being offered to students.
The amount that is to be sanctioned would be decided by individual schools, on the basis of various factors such as amount of aid funds available at that particular school and how many other students are also applying for aid.

It is declared that parents are not the only to pay a student for his /her education. A substantial amount from student’s income and savings would also contribute to his education. Parents are not the only ones who are expected to partially finance a college education. In such cases need for students’ loan becomes an implicit need. In general the formula would be,

Total Cost of College – Estimated Family Contribution = Financial Need

Note: Source News:

Congress under the Higher Education Amendment of 1986 developed a standard formula used by these companies.

Called the Congressional Methodology, it is used to evaluate parents’ income and assets, in conjunction with the number of children in the family who are college-aged and their anticipated college costs.

Estimated Family Contribution Calculator:

The College Board offers an online EFC calculator to help estimate this amount.
The list would be,

Tuition

Books and supplies Housing costs (rent, utilities) Meals Personal expenses (clothing, entertainment) Transportation/travel Support of dependents (if applicable) Any other miscellaneous expenses

= TOTAL COST OF ATTENDANCE

Terms to be known:

EMERGENCY LOAN: Temporary, low- or no-interest loan assistance given to students to help them cover costs until their financial aid is received; usually granted immediately and without question GRACE PERIOD: A period of time after college graduation – typically six to twelve months – in which a student does not have to begin repaying a loan Interest: a charge for borrowed money; generally a percentage of the amount borrowed (see Principal below) LOAN CONSOLIDATION: A repayment option for students with more than one outstanding loan; this lowers monthly payments and makes the repayment process simpler LOAN DEFAULT: The failure to repay a loan according to the terms agreed to in the promissory note; a lender may take legal action to get the money back LOAN DEFERMENT: A postponement of a loans repayment; many federal loan programs have a deferment program LOAN DELINQUENCY: Failure to make loan payments when they are due; extended delinquency can result in loan default LOAN FORGIVENESS: Demand for repayment of the balance of a loan is waived because of extenuating circumstances on the students part, such as financial hardship or, in some cases, in compensation for community service PRINCIPAL: In terms of loans, this represents the amount of money borrowed, not including any interest charges (see Interest above) SUBSIDIZED LOAN: A loan that does not accrue interest until the recipient leaves school UNSUBSIDIZED LOAN: A loan that accrues interest while a student is still in school

By: Ilango Chokalingam