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Federal Stafford Loan Overview

November 20, 2011

Federal Stafford Loan

For those of you who don’t know much about the Federal Stafford Loan Program, it is part of the Federal Family Education Student Loan Program (FFESLP), that is funded by the governement, and can be applied for by filling out a Free Application for Federal Student Aid (FAFSA) where the loan amount you will get will be based off of your Expected Family Contributino (EFC). Stafford Loans provide the eligible applicant with the benefit of having a fixed interest rate throughout the life of their loan repayment, meaning if you begin paying on a 5 percent interest rate, you will pay every single payment on 5 percent until you have paid the loan back in it’s entirety. Federal Stafford Loans are offered for both undergraduate as well as graduate students, which below is an overview on each category.

Federal Stafford Loan

Federal Stafford Loan For Undergraduates

When an undergraduate receieves financial aid through the form of a Federal Stafford Loan, they can borrow form limits that range from $$2,000 to $12,500 each year of school which limits increase every year of school completed, which depending upon which year a student is in, and will have a loan experience that includes the below points, which are all applicable if a student agrees to enroll at in a minimum of a half time school schedule:

  • Loan deferment while in school, meaning the student doesn’t have to pay the loan off while in school.
  • Applicants do not have to have a good credit score, as Stafford Loans are not granted based of your credit score.
  • Rates start at as low as 3.4 percent, which are the lowest out of all the federally funded grant programs.
  • Loans come in the form of both subsidized, which loans are granted on the degree of your financial need as well as unsubsidized, meaning it is not based off of financial need.
  • Interest is paid starting when the student either graduates or drops out, and does not accrue, or buid up while they are in school.

Federal Stafford Loan For Graduates

For graduates applying for Stafford Loans, they are able to take out up to $22,500 per school year and also come in the form of subsidize and unsubsidized, where students again have to be enrolled in at least a half time school schedule. The loan experience will include:

  • Not having to pay loan payments while they are in school and begin usually at 6 months after graduation or dropping out.
  • No interest is charged while in school for subsidized loans, but for unsubsidized Stafford Loans, interest is either to be paid while you are in school, which is highly suggested, or let is accrue and pay it when you graduate. For examples sake, if one takes out $10,000 dollars, they will have to pay about $750 dollars in interest, which will accumulate on the loan total and one will have to pay interst on that as well.
  • Interest rates that are fixed and start at a minimum interest rate of 6.8 percent.

For the subsidized Staffor Loans, it is said that two thirds of the loans go to students who have Adjusted Gross Incomes that do not exceed $50,000 per year, while one fourth go to those who have Adjusted Gross Incomes between the range of $50,000 to $100,000. So if you meet these requirements, there is a good chance that you will be able to qualify for the subsidized Stafford Loan, which provides the benefit of coming with a much lower interest rate. But if not, you can still receive funding through the unsubsidized option. For either option, a 1 percent loan activation fee will be charged, where once you qualify for the loan, the money will be sent to your school and you will deal with your schools main office when you need funds for schooling costs.

For repayment of Federal Stafford Loan debt, there are 5 different repayment options, which include the standard repayment, extended repayemnt, graduated repayment, Income Based Repayement (IBR) and Income Contigent Repayment (ICR).

 

 

Federal Student Loan Repayment Options

September 10, 2011

Federal Student Loan Repayment

There are 5 different methods of federal student loan repayment that you can choose from when looking for a repayment plan that best suits your financial needs as well as how fast or slow you wish to pay off your loans. These plans can also be swtiched any time during your repayment process so you do not have to worry about being stuck with a federal student loan repayment plan that doesn’t fit your particular situation. Below are each repayment plan as well as all encompassing information on each.

Federal Student Loan Repayment

Federal Student Loan Repayment Options

First off this section will discuss the basic programs that are offered for each federal student loan, the next section will discuss specifcs about repayments offered through federal grant programs. Here are the federal student loan repayment options that you can utilize come payment time:

  • Standard – The standard federals student loan repayment option is one that will allow its borrower a timeframe of 10 years to pay back student debt. The payments are a bit higher then longer repayment plans, but will get you out of debt faster as well as you will save money because you will be paying less interest because of the shorter time frame of payment.
  • Extended – The exteneded federal student loan repayment method is one that allows you anywhere from 12 to 25 years to repay your loan. This method is available for borrowers who have over 30,000 dollars in debt. Payments are a lot lower than standard repayment, so this is for those who cannot currently afford a higher monthly payment.
  • Graduated – This method allows the borrower to start with a lower payment and have it increase every two years, which will give you the freedom of low payments right after college and higher payments down the road when you can afford them. This option can also be combined with the extended federal student loan repayment option.
  • Income Contigent – Income contigent repayment bases your monthly payments off of a percentage of your montly income, usually being 15 percent. So whatever you earn, no matter how much or how little, your payments will be at 15 percent of your income.

Federal Student Loan Repayment Specifics

Certain aspects apply to different federal student loan programs, here is an overview to these federal student loan repayment specifics.

  • FEEL Loans can also qualify for income contigent repayment where your montly payments must equal at least what you pay in interest each month.
  • Dircet loans provide income contigent repayment where your montly payments cannot go higher than 20 percent of the discretionary income that you earn. This option also allows one to pay as low as no payments at all if their income is very low, at which if they don’t pay off any part of the loan after the 25 year repaymen period, whatever amount is left on their debt will be considered income and they will be taxed on it.

 

 

 

If you are having trouble making your payments and are looking for relief, click this link: federal student loan repayment, where you find information on different student loan relief methods.

Federal Student Loans Payment Options

August 31, 2011

Federal Student Loans Payment

There are many federal student loans payment methods that you can use that you can use that work best to your specific situation. Being that we are talking about federal student loans payment, good chances are that you just graduated, if this is the case, a big congrats! There are basic methods as well as newly established methods in which it can make it easier for you to make payments and avoid default. The 6 different ways are discussed below.

Federal Student Loans

 

Federal Student Loans Payment - 6 Different Options

  1. Standard Federal Student Loans Payment – This option allows one to pay over the course of what is usually 10 years, and payments can start as low as 50 dollars. This plan usually has payments stay the same over the course of the repayment period until the loan is fully paid off.
  2. Extended Federal Student Loans Payment – This method allows a student who may be low on cash to extend their repayment period from the basic standard 10 year program to anywhere from 12 to 30 years. Being that many do this because of a shortage of money, monthly payments have been as low as 5 dollars.
  3. Graduated Federal Student Loans Payment – Option three allows one to gradually increase their payments, usually every 2 years, where it starts out low and works its way up higher and higher each two years. This is a great option for those who either don’t have a job or have a low paying job right out of college, but as the years go by will advance in their job and get better pay.
  4. Income Based Federal Student Loans Payment – This method of repayment is a lot of what is sounds like, being that your payment are based off what you earn, which is usually 15 percent of your income. Like the extended payment plan, payments can be as low as 5 dollars a month, and are adjusted whenever you wither make more money or less money.
  5. Income Sensitive Federal Student Loans Payment – This option is only availble for direct student loans. This plan is very similiar to the income based option and is based of of 4 to 25 percent of your income and your monthly payment must be at least equal to your interest payment. This plan is available to direct student loan holder for up to 5 years and must be applied for each year. Being that payments are usually lower than normal, yoru repayment period will be extended with this option, around 12 to 30 years.
  6. Income Contigent Federal Student Loans Payment – This last option is only for FEEL loans and has a maximum repayment period of 25 years. This federal student loans repayment option is for those who have low income jobs or are participating in forgiveness programs which usually have low income. The monthly payment is factored either by up to 20 percent of your income or the amount in which it would take you to pay off your loan in 12 years.
  7. Student Loan Forgiveness – This federal student loans payment option is an excellent way to get your debt wiped out by a big percentage or completely. This option is available in public service jobs for many different careers as well as in community serivce like Americorps, VISTA or Peace Corps. These programs either pay a percentage or your loan off each year of service which is about 15 percent and is usually found in community serice, or they pay the rest of your loan off after 10 years of working in a public service job.

Conclusion to Federal Student Loans Payment

Now that you know the different options as far as federal student loans payment options go, you can now figure out which one will work best for you. Although you may start out by paying low, you can always change it in the future when you start earning money, which in the beginning will take off a lot of stress, and as you earn more money you will be able to pay it off faster. Hopefully this federal student loans payment information was exactly what you needed and great luck on getting the best one for you.

 

Federal Direct Student Loans – Loans Offered & Overview

August 29, 2011

Federal Direct Student Loans

Federal direct student loans are offered through the government as a way for you to get the money you need when it comes to affording college. Knowing that those straight out of highschool or wanting to go back to school don’t exactly have the funds needed to attain a degree, The Federal Direct Student Loan Porgram (FDSLP) was designed as a way to provide low interest loans as well as many other benefits that cater to being a student usually without a job.

These federal direct student loans are offered in two categories, one being subsidized loans and the other being unsubsidized and are offered by the Stafford Student Loan program. These two options are discussed in much further detail in the next section.

Federal Direct Student Loans

Federal Direct Student Loans – Major Overview

Subsidized Federal Directs Student Loans

  • These loans are designated for those who need it most, also known as an as needed basis. These loans are given upon proof that are low income or live in a household that is low income among other speficications and these federal direct student loans allow you to not have to worry about paying interest while you are in school as the government pays you interest payments until you are finished with enrollment. With subsidized federal direct student loans, you can borrow anywhere from 2,365 to 10,000 dollars depending on where you are at in your schooling,

Unsubsidized Federal Student Loans

  • These loans are offered to anyone, unlike subsidized student loans, you don’t have to prove your need. This option charges you with interest from day one, and you can either choose pay your interest each month, or allow it to accumulate and pay it off later, although this isn’t suggested as if you do, you will pay much more then you would if you paid it off each month while you were in school. These federal direct student loans allow you to borrow anywhere from 4,000 to 10,000 per year depending on what level of education you are entering. These loans have an 4 percent activation fee meaning you pay 4 percent of your loan amount when service starts.

Federal Direct Student Loans – More Details

  • You receive a 6 month grace period with each of the federal direct student loan options above, meaning that you do not have to pay monthly payments on your debt for the first 6 months out of college. This rule also applies to dropping out or dropping below the level of half time enrollment.
  • Interest rates are found to be around 3 to 9 percent and are fixed meaning they stay the same for the entirety of your loan repayment.
  • There is no penalty for early repayment.
  • Federal direct student loans repayment plans are set at 10 to 30 years depending on which plan you choose to go with.
  • They have student loan deferrment options that can be used in the following categories; education, unemployment, economic hardship, forbearance, disability and default.

If you are intersted in using fedreal direct student loans for tuition fees, the best thing to do now would be to fill out a Free Application of Student Aid online which will show you which federal direct student loans your are eligible for.

 

 

All About Federal Student Loan Forgiveness

August 28, 2011

Federal Student Loan Forgiveness

The first question that graduates ask themselves is “how the heck am i going to pay my debt off?! Well federal student loan forgiveness can be an excellent method to utilized when trying to pay federal student loans off faster, helping you pay either a big chuck of your loan off or erase the entire thing, in other words a clean slate. If you currently have a student loan and are looking for more information on student loan forgiveness, the information that follows will explain all there is to know about federal student loan forgivesness so you know what it can do for you and how to use it to you benefit.

federal student loan forgiveness

Federal Student Loan Forgiveness – Forgiveness Methods

Federal student loan forgiveness can keep you from being one of the fast growing number of students who file student loan bankruptcy which you want to avoid at ALL costs because student loan stay on your credit record forever! These forgiveness programs can be used if you used Perkins, Stafford, PLUS or FEEL loans. Anyways, there are many programs that you can use that offer you federal student loan forgiveness, to give you an idea of what is out there for you to use, here are the various ways which you can recieve some help from for you loans:

Community Service:

You can find federal student loan forgiveness programs through these three organizations: Peace Corps, Americorps as well as VISTA. These organizations will offer you either a lump sum after working a certain amount of time which is usually a year of service and around 7000, or you can provided community service through them for multiple years and each year they will pay for a percentage of your debt, usually around 15% of each years service.

Teachers:

If you are a teacher, you can get your federal student loans forgiven by working in certain ares of your community, these being either low income areas as well as areas where quality teaching is needed the most. WIth this option, you usually will have to enroll in a 10 year payment plan where you pay on time payments each month for 120 months, and at the end of the term you will be awarded by having the rest of your debt wiped away, no matter how much is left.

Medical (Doctors, Nurses)

If you are looking to enter into the medical profession, you can get your debt forgiven substantially or fully if you work you provide your services in low income areas as well. The Perkins Loan offers up to 60 percent cancellation for nurses, with the Stafford, you can get up full cancellation after working a certain amount of time in the profession.

Social Work & Lawyers

The social worker profession provides you with the chance to get federal student loan forgiveness as well in the form of total cancellation of your debt after what is usually 5 years of service. If you have just completed law school, you can get your debt forgiven completely after working a public interest job for 10 years.

Child Care – Providers of childcare can also qualify for federal student loan forgiveness, for example with the FEEL program offers you the chance to get all of your debt forgiven after providing childcare for a certain amount of time.

Military:

If you happen to be in the military or are looking to enter into the military, federal student loan forgiveness can be found in different ares of service.

Federal Student Loan Forgiveness – Conclusion

If you like the benefits of federal student loan forgiveness and apply it to your debt, the best thing to do now is to contact your loan provider and ask them what is offered for your particular situation. They will either provide you with the information you need, or will refer you to someone who will be able to help you get started. If you happen to not like the idea of federal student loan forgiveness but are still looking for ways in which you can manage your debt, you can either seek out a student loan consolidation company, talk to your lender about a possible modification of your repayment plan to where it would be more affordable for you to make your payments.

Benefits of Federal Student Loans & Programs to Use

August 27, 2011

Benefits Of Federal Student Loans

Before you put your schooling on a credit card or go through a private organization to get student loans, you must read this article about the benefits of federal student loans, which many professionals advise against putting your tuition costs on credit cards as there are often heavier interest and other fees that apply. Below will be 6 different benefits that federal student loans bring to their eligible applicants, as well as how to obtain one through a quick and easy process.

Federal Student Loans & Programs

Federal Student Loans – 6 Benefits

  1. Being that we are using the word loan, students obviously want to get it paid off ASAP. With all federal student loans programs, they will never penalize you for paying higher than the minimum when it comes to monthly payments, unlike many other private organizations.
  2. With federal student loans, there is the opportunity for you to do what is called a “debt forgiveness” where you will be provided the opportunity to work a public service job where you will get your entire debt knocked out on what is left after you pay 120 payments, or 10 years, regardless of how much is left. If you choose to go into a debt forgiveness program, you will be granted the opporunity to only have to pay 15 percent income on your monthly debt bills.
  3. The interest rate that you establish on day one will never change. Federal student loans programs all offer fixed interest rates that never change, no matter what.
  4. With federal student loans, you actually get the freedom of choosing how long you with to pay off your loans. There is the main way of paying over a 10 year period, which will present you with high monthly rates but a lot lower interest payment, or you can choose one that starts out low and increases over time, and lastly you can choose to do things based on what your income will let you do, letting your have a program that will allow you to pay what you can afford each month.
  5. You can also consolidate federal student loans unlike with private lenders. This means that you can take all of your loans and put them into one loan program that will allow you to both have just one payment as well as give you the possiblility to save money in the short and long run by just paying one company instead of multiple.
  6. They also have deferment options, which basically means if you miss a payment or make a late payment, you will avoid delinquency by entering into a suspension program, allowing you to regroup financially and get your payment ready for the next month.

Three great federal student loans you can use are these programs:

  • The Perkins Loan
  • The Stafford Loan
  • The Student PLUS Loan

Benefits of Federal Student Loans – How To Get A Federal Loan

So now that you know the many of the benefits when it comes to taking out federal student loans, you can now decide whether you want to go with the method or not. If you do choose to, the first thing you need to do which should be done as soon as humanly possible is to fill out a Free Application for Federal Student Aid (FAFSA). Once you fill this out, you will be notified of which federal student loans programs you are eligible for if any

Federal Student Loan Consolidation – Info & Programs to Use

August 26, 2011

Federal Student Loan Consolidation

If you are looking for information on federal student loan consolidation then chances are that you just graduated. so congrats!! Anyways, federal student loan consolidation is an option that millions of students have taken in order to group their payments into one lump payment. This method can is essentially a way to reduce your monthly payments by extending your repayment period. Being that federal studentl loan consolidation is different than private loan conoslidation, the follwing information will go into detail aboue the beneficial aspects that come out of it as well as the negatives that come with it.

 Federal Student Loan Consolidation

Federal Student Loan Consolidation – Benefits

  1. By reducing your monthly payment rate by anywhere up to 50 perecent or more, you will be able to afford payments a lot easier meaning you will be able to increase your credit score.
  2. For federal student loan consolidation, no matter what company you are using, you will not have provide a good credit score or a cosigner with a credit score to get accpeted because federal student loan consolidation is not based on your credit.
  3. Federal Student Loan Consolidation as said above allows you to group your payments into one payment meaning that you only have to pay to one lender each month as well as only having to call one resource when it comes to any questions you have related to your repayment.
  4. Often times, just for consolidating, your total debt is often reduced.
  5. With consolidation more often times than not comes a lower interest rate.
  6. You can also pay more than just the monthly minimum requirements, meaning that youc an pay off you debt a lot quicker as soon as you have the funds to do so.
  7. Along with not having to pay any fees to use federal student loan consolidation, you also won’t be charged a fee if you want to pay off your loan faster than normal.
  8. Federal student loan consolidation provides you with just one interest rate instead of paying multiple interest rates.

Federal Student Loan Consolidation – Disadvantages

  1. Although you are able to make smaller payments, this comes with a negative side as well meaning that you will end up paying more on the loan as well as more in interest in the long run.
  2. It will probably not save you much at all or provide you with benefits if you have already been paying your loans for some time.
  3. You will lose your grace period or whatever is left on it if you conolidate your federal loans during the time of your greace period.
  4. The benefits that you have enjoyed with your other lenders will not transfer over to your federal student loan consolidation orgaization.
  5. You can not consolidate any amount of student loans. Most federal student loan consolidation companies require that you have at lest 5,000 to 10,000 in student loan debt, more often than not over 10,000.
  6. You cannot consolidate federal loans and student loans with the same consolidator, you would have to go through different consolidation companies.

Federal Student Loan Consolidations – Companies To Use

If you feel that the benefits of federal student loan consolidation mentioned above outweigh the negatives, here are 3 great reputable resouces that you can use for conolidation:

  • Next Student – Considered the best federal student loan consolidation company around.
  • Loan Approval Direct – Another great company to use for consolidation that can provide you with payments 60 percent off.
  • Debtconsolidation.com – One of the best online resoures when it comes to federal student loan consolidation
  • Sallie Mae (Although this program is currently suspended, check in if it is activated again as it provides some of the best benefits around.