Students finish college anchored to loan debt

CHICAGO — A college education used to be a ticket to a secure future. Now, a generation of students and graduates is walking off campus with a collective $1 trillion in student loan debt and troubling career prospects. The daunting combination is forcing them to rethink their futures, postponing weddings, home purchases and vacations to make hefty monthly payments on loans that will follow them into middle age.

It's a financial and emotional strain their parents didn't have, or at least not to the same degree. Just two decades ago, fewer than half of undergraduates finished school with debt, and the average was less than $10,000. This spring, two- thirds of graduates are expected to have debt, owing an average of $29,000. In fact, student loan debt now exceeds the country's credit card debt.

Addressing the outcry heard from Occupy Wall Street protests to kitchen tables in the Chicago area, President Obama last week sped up plans to help graduates dig out. Some borrowers will be able to lower their maximum required payments starting next year, with balances forgiven after 20 years. Borrowers will also have the chance to consolidate loans at a lower interest rate.

But even those proposals may mean only modest help, and won't help those who've already defaulted.
And future students could face even heavier financial burdens. The cost of going to college has risen faster than inflation, home prices and even health care costs. Tuition at the average public university is up 8.3 percent this fall, and 123 colleges now charge $50,000 or more for tuition, fees, and room and board, according to data released last week.

While a college degree will lead to significantly higher earnings over a lifetime, the unemployment rate for recent graduates is more than 10 percent.

"What we know is it is impacting so many people," said John Pelletier, director of the Center for Financial Literacy at Champlain College in Vermont. "I think many of them have been surprised, as have been their parents. There are many of them like the folks who may have gotten into mortgages they regret and don't understand."

An ongoing bill
 
That's true for Steven Kent, who graduated from Loyola University Chicago in 2009 with a journalism degree and $49,000 in federal student loan debt. His payment notices asked for at least $650 a month, he said, more than his $533 rent.

Kent, 27, is working at a Starbucks where he earns about $1,500 in salary and tips a month. He hasn't paid back a penny of his loans.

"I didn't have an expectation that it would be this ongoing bill I would carry forever. I thought it would be like a utility bill, not another rent payment," said Kent, whose deferment ends in April. "It is like having a ticking time bomb around your neck."

Laura Perna, an education professor at the University of Pennsylvania, said that while most students borrow reasonable amounts of money, an "important share of the population" has excessive amounts of debt.

"This is a relatively new phenomenon," Perna said. "For those students, it is influencing many dimensions of their post-undergraduate life."

In 2005, when the advocacy group Project on Student Debt began, there was so little attention to the issue that founders couldn't decide on an organization name. "There wasn't the term 'student debt,' " said Lauren Asher, president of the Institute for College Access and Success, the home of the debt project. "There was so little awareness of how much our higher education system had changed and how heavily it had come to rely on student debt."

"College is still the best investment you can make in the future and our country's future," Asher said. "But like any investment, the returns are not guaranteed."

A 'scary thought'
 
Nija Fountano is in college, but she's already, little by little, paying off her student loans.
About $60 a month goes toward a loan payment, money earned from the two jobs she has in addition to going to school full time at the University of Illinois at Chicago. She expects to graduate in the spring with $30,000 in private and federal loan debt.

"That is becoming an increasingly scary thought because I don't have any savings," Fountano said. "I don't know if I would say it weighs on me daily, but having such a tight budget and living paycheck to paycheck is a stress on its own."

An urban-planning student, Fountano, 21, is postponing graduate school plans until she feels more financially secure. She works at Whole Foods and as a gymnastics instructor, and she hopes to get a job related to her field of study after graduating.

"Was it worth it? It is definitely worth it, but it is really difficult, and sometimes when I think about it, I wonder if maybe I could have done it differently," she said.

No buying a house 
 
Like many young married couples, Jessica and Ian Riley share everything they have, including $30,000 of student loan debt.

She still owes about $21,000 on a loan she took out to pay for the Western Michigan University bachelor's degree she received in 2006. The debt eats $400 from her monthly pay.
He owes $9,000 for a semester of an online course he took from Ashford University. He pays $627 a month.

"It definitely changes, like, your whole mind frame of things that you do, and not getting any more credit cards, or not accruing any more debt," Jessica Riley said. "We have rented for 11 years. I would love to own a home, but honestly I don't see that happening."
The Rileys, both 29, say they wish the federal government could do something to lower interest rates or offer more flexible repayment plans.

"Just give graduates some kind of solution," she said. "We want to pay our debt, but it needs to be a reasonable manner where we can eat and breathe and be happy."

Working two jobs
 
Natalie Quist, 28, doesn't look at the statements on her student loans anymore. They make her queasy.
She's well aware that she owes $13,000 on a federal loan and $19,000 more to a private lender.
The debt, which requires $500 in payments each month, forced her to take a second job, never mind that neither it nor her first job is related to psychology or criminal justice, her college majors.
"I wouldn't say my degree is useless, but it doesn't get you as far as you thought it would," said Quist, who graduated from Loyola University Chicago in 2006.

Because of the debt, Quist doesn't have a car. She'd also like to go to graduate school, but she doesn't dare add to her loan balance.

Still, Quist considers herself lucky in some ways. She would be worse off, she said, had she not gotten a $36,000 academic scholarship to reduce her tuition bill. And she knows the price of higher education has only risen since she got her diploma.


"It's probably worse for kids entering college right now," Quist said. "I can't imagine."

Alabama college grads average $24K in debt

A new study shows that graduates of Alabama colleges in 2010 averaged $24,821 in student loan debt when they left school, making Alabama the state with the 14th-highest debt average.

The study, “Student Debt and the Class of 2010,” is conducted by The Project on Student Debt, an initiative of The Institute for College Access & Success. The organization has conducted similar studies since the 2000 to 2001 school year. Results indicate that the average debt burden for Alabama college graduates has increased during that time.

Those who attended the University of Alabama averaged $26,701 in debt, while Auburn University grads had an average of $23,491 in debt.

The study also listed Alabama A&M University ($31,863) and Alabama State University ($29,795) on its national list of high-debt public colleges and universities.

Auburn University’s average student loan debt has ranged from $18,069 to $34,398 since the study was first conducted.

Chris Christian, a 2004 AU graduate who now lives in Gadsden, said he worked full time throughout college and saved money by attending junior college for two years. Despite that, he still accrued about $12,000 in student loan debt by the time he graduated. He’s still paying off his loans, but only by choice, he said.

“I would have to say that a possible reason Alabamians acquire more debt is that they don’t know of other options to fund school other than student loans,” Christian said in an email to the Opelika-Auburn News.

Data also shows that Alabama had the highest average student loan debt in 2010 compared to its four neighboring states: Florida ($21,184), Georgia ($18,888), Mississippi ($22,142) and Tennessee ($19,957).

Mike Reynolds, Auburn University’s executive director of student financial services, attributed part of the disparity between Alabama and its neighbors to the presence of scholarships funded by lotteries or casinos in those states.

With a large proportion of out-of-state students at AU, Reynolds said they sometimes resort to taking out private loans with high interest rates to cover expenses and tuition.

“We certainly want students to reach their higher education goals, but we’re very cautious to explain to them about student loan debt,” Reynolds said. “Is the profession that you’re wanting to get into, is it going to allow you to pay back $90,000?”

Nationally, the study estimates that two-thirds of college students who graduated in 2010 had student loan debt. The average debt was $25,250. At the campus level, average student loan debt for schools ranged from $950 to $55,250.

The study examined data from just more than half of public and private nonprofit, four-year schools. The study says it represents three-quarters of 2010 graduates.

Paying For Education

THE ISSUE: Calling it the “Pay As You Earn” executive order, President Obama has made it easier to repay student loans.

Calling it the “Pay As You Earn” executive order, President Obama has made it easier to repay student loans.

Consider that the $99,716 median household income for families headed by a four-year college graduate in 2010 was more than twice the income for those headed by a high school graduate, according to Trends in College Pricing.While those are nationwide averages, the trend also applies to a state such as Alabama, where too many people struggle to survive on low-wage jobs.


While it’s popular for political leaders in our state to be proud of low taxes, the continued reductions in state funding for higher education and the subsequent tuition and fee hikes are nothing more than a tax on college students and their parents. Shifting the cost of higher education from direct government funding to student loans makes about as much sense as treating an uninsured patient’s sinus infection in the emergency room.

Many students are dealing with this situation by borrowing more money, and a growing number are not able to repay it under the current rules. Almost 9 percent of students could not pay back their loans in 2009, up from 7 percent the previous year. The default rate in Alabama is even higher, at 9.2 percent.

To make it easier for college graduates to repay their student debt, President Obama recently issued an executive order accelerating the implementation of new rules that Congress had intended to begin in 2014. Given the economic state and the reluctance to adequately fund higher education, that is a good move.

The present law caps monthly payments at 15 percent and forgives outstanding loans after 25 years. The president’s order caps it at 10 percent and offers forgiveness after 20 years. It also allows students to consolidate federally backed loans to reduce interest rates.

Obama said the plan will save money by eliminating banks as the middle man for student loans.
It’s a small step, but every penny counts for the thousands of families who live just one pay check from ruin.

Students who borrow money have a responsibility to spend it wisely and repay it on time. Unfortunately, some students waste student loans on housing, cars and entertainment when they could work part time or live at home to cover those expenses and limit the borrowed money for tuition, books and fees.

But as long as political leaders are not willing to provide adequate funding through taxation, the student loan program will remain the emergency room for higher education.

Student loan terms change ?

President Barack Obama announced on Oct. 25 that his ‘Pay As You Earn’ executive order would take effect two years earlier than expected. The executive order prescribes a revised repayment schedule for borrowers of federal student loans, which are optional supplements designed to help students pay college expenses.

The order, initially scheduled for 2014, will provide immediate relief to student borrowers, giving them a chance to limit loan payments to an amount equal to 10 percent of their discretionary income, starting in 2012. As current law dictates, unpaid debt will be forgiven after 20 years instead of 25 years.

With the average amount of student loan debt exceeding $9,000 per year, Obama expects ‘Pay As You Earn’ to save student borrowers by decreasing monthly student loan payments.
This order will provide an estimated 6 million borrowers with more manageable monthly payments by capping their loan payments at 10 percent, according to the White House press office.
LCC students — even those unaware of the proposal — responded with optimism.

“I think it’s very important that we address the issue of student loan debt. It’s more important than ever (that Obama enacts) a reasonable program for people to pay back their loans. A lot of students struggle with their student loan debt,” said Random Butler, a second-year LCC student. “Steps need to be taken to assist those who are having difficulty paying for their education, especially since education is something that was reportedly meant to improve their lives and financial situation.”
Butler is $10,000 in debt from student loans. His current interest rate on his unsubsidized student loan is 6 percent, and his subsidized student loan interest rate is 3 percent.

“I predict that it would offer a slight incentive for new or returning students to go back to school, if they feel that their future debt is going to be more manageable,” Butler said. “I would expect that it would have a minimal, but measureable, impact on enrollment.”
About two-thirds of graduates with a bachelor’s degree have student loans, according to the College Board Project on Student Debt. While the average debt is about $24,000, 10 percent of undergraduates have loans of $40,000 or more, according to the Department of Education’s National Postsecondary Student Aid Study.

For many students, the promise of profitable future employment serves as an incentive for this investment in the future. However, the monthly payment rate on student loans goes up based on annual income. For student borrowers making less than $20,000 a year after college, the government will pay a portion of their minimum loan payment for them.

“I’m hoping if I get a decent job, I can afford to pay it faster. I would imagine it would be even more of an impact (on students getting two-year degrees) because they’re going to have a shorter turnaround to pay it back,” said Stephanie Martin, who transferred to the University of Oregon two terms ago. Martin currently owes approximately $35,000 in unsubsidized and subsidized loans.
Martin is not alone in feeling unnerved about the payment of loans and thinks there should be more options available to students.

“School is going to cost a lot, whether the ‘Pay As You Earn’ proposal will help you or not,” said first-year LCC student Kyra Giffen.
Although Giffen believes this proposal will increase enrollment and loan disbursements, she currently has two student loans, totaling $5,000, and is aware that loans will “add up.”

Recently, the political action committee MoveOn.org recommended student loan forgiveness as a means to stimulate the economy. Another website, thepetitionsite.com, accrued 54,322 signatures (of a 55,000-signature goal) on a petition asking the government to forgive student loan debt. The Department of Defense used the promise of forgiveness to bolster recruitment among students at University of Vermont-Burlington in 2010, according to a report in Debt magazine.
Two LCC instructors, economics instructor Phillip Martinez and social science instructor Stephen Candee, agreed such reasoning is sound.

“Students with debt will have more money in their pockets, and less debt — more money to spend on housing, food, necessities, etc.,” Martinez said.
“I think it’s a great move,” Candee said.

Candee contrasted this with Libertarian presidential candidate Ron Paul’s recent proposal to abolish both the Department of Education and student loans.
“This is a much better approach, being realistic about people’s ability to pay. … Colleges are going to suffer as the result of (defaults),” he said. “If consumers can spend more, then production can increase, and jobs can increase, so there’s a ripple effect to all of this.”

Tips For student loan consolidation companies

Student loan consolidation and refinancing of a loan is a convenient way to pay. With this you can consolidate your student loans into one large loan, thus reducing the periodic payment.

Consolidation of student loans, low interest rate is applied with a long maturity. The monthly payments are cheaper than the original than the student loans. Before the consolidation Interest rate, credit history and on-line calculator: Student Loans considered the three factors are considered. We address them one by one.

Interest rate is at first. Before applying for a consolidation loan, you'd better and calculate the monthly payments in addition to the rate of interest which is paid and the cost of the entire operation of the two loans. This may be the student or the borrower's actual configuration of As he, when he joined to pay off debts.
Secondly, the credit history. Maintaining a good credit history is extremely important because the creditor to refer to these borrowers to verify their credibility, to make payments. In a credit history, shows the complete documentation of an individual or company's past borrowing and repayment behavior. Almost all banks would like additional conditions for students with a good credit history. Who is to keep a good credit history put simply banking services accessible as good rates and terms. Manage your money wisely, and groped to resolve the debt.

Third, online calculator. You can see this anywhere on the network. Many credit bureaus and mortgage companies offer regular payment calculators on their websites. With the help of these online calculators allow students to understand all possible options for consolidation loans before being applied.As a responsible borrower, you will extend to all means to get good prices and exploit the best conditions of the banking consolidation offer. I think every student loan consolidation, the same ultimate goal, which is clear of debt and maintain a good credit standing with creditors.
The best consolidation companies online

If you look online, then these companies are highly recommended by many, as they offer good prices and you can save money by using your Student Loans: Loan Approval Direct, Next and Debt Consolidation student.
 
Choosing the Best Student Loan Consolidation Companies

When it comes to choosing the best student loan consolidation company is not trying so impulsive. Watch these three factors: interest rate, credit history and on-line calculator. Ask yourself the following questions. I will be this bank offers favorable terms, if I have agreed to consolidate my debt to them? These are business loan offers other benefits? These benefits as well, if the decision in these financial institutions. Make sure that if you are looking for something that you fully understand the conditions that go with it. I guarantee that loan company is being asked to cancel the contract once they have found the right sign. But before you do, be sure to be able to evaluate all possible Offers. They compare all the loan rates and terms of consolidation. If you are unsure of the contract is not signed. You may end up regretting his decision later. Remember that you are consolidating your loans to solve financial problems for you and not in a debt trap all over again!

Private Student Loan Consolidation Vs Federal Student Loan Consolidation

Many students and former students have probably heard about loan consolidation, federal student loan consolidation or other ways of combining student loans into a more manageable payment.
At the same time, it is a misunderstood topic because of the wide array of student loans that are given to students, and the different rules regarding their consolidation. In this article, I'll attempt to clear up some of the difficulty regarding this topic, and provide some insight into those wishing to consolidate.

What is student loan consolidation? 

 While many of you have undoubtedly heard or seen TV commercials for bill consolidation, debt consolidation and other types of payment relief, loan consolidation has nothing to do with any of those options. Simply put student loan consolidation is designed for one type of debt, those loans that were obtained specifically for the purpose of going to school, almost always for higher education.
Unlike Auto loans or Mortgage loans, students will often access a wide variety of loan types to obtain the total funding needed to complete the financial picture of obtaining a degree. Loans are obtained from different sources, such as the Federal government, private banks, and other entities at different times during the course of a college career. Usually, once the degree is completed, or the student has otherwise separated from school, they may have a confusing patchwork of loans with different amounts, rates and terms. Usually, this can add up to a hefty payment once school is complete and the 6 month grace period has expired. Consolidation allows students to combine all of these loans into one loan with a lower, single monthly payment.

Which is better Private or Federal Student Loan Consolidation? 

 The short answer is that Federal student loan consolidation is always going to be a lower rate and less expensive option because the government backs the loans and consolidating federal loans is easy, painless, and essentially cost free as long as you are qualified. The key element to remember here is that most students have combination of private and federal loans. Because you cannot include private loans in a federal consolidation, a federal consolidation only partially solves the problem for many students.
A private consolidation may also help you out in terms of your monthly payment, but is not assured to do so primarily because the entire consolidation has higher qualification requirements and is not backed by the Federal government or the Department of Education.

Hopefully, this brief overview has helped you sort out some of the differences between the different type of consolidation loans that are available for students. To learn more detail about these private student loan consolidation and  federal student loan consolidation, check out the link below.

Neal Coxworth is an entrepreneur and a 17 year veteran of the consumer credit industry with experience in originating, underwriting and processing mortgage, student and consumer credit loans. He publishes an informational blog for consumers to provide insight and analysis to all major loan types as well other topics such as credit history, that most consumers will face.

Rising Student Loan Default Rates

There was a recent report highlighting the increase in student loan default rates to 8.8% from 7%.  The rates rose across all sectors-- public, private and for-profit schools.  The higher rates are a reflection of harder economic times, especially for new college graduates.  A PNC Financial Services Group  survey of 20 somethings found:

• Only 23% consider themselves financially independent
• 30% have a job in their chosen field
• 40% relay on two or more sources of income (multiple jobs or income from family members)

With the low employment prospects and high debt load, it is easy to see why many 20 somethings are feeling pessimistic about their futures.  Most of us are not in the position to change the economic outlook  but we can share information to help this generation and the one following it make smart financial decisions. Talking to the students who are preparing to enter college about their school choices, financing options and ways to reduce the cost of a college education is always helpful.  For the recent graduates, making them aware of the repayment options for student loans and creating strategies for reducing debt are other helpful steps. 

Are you a member of the WSCPA?  WSCPA members have access to resources to assist members with making presentations to high school students and college students.

How to Pay Off Student Loan Debt With No Money

Student loan debt is one of the main obstacles new graduates have. That is one reason to keep track of how much you are borrowing when you are going to school. For example if you graduate owing $19,000 in student loans (the average student-loan debt among graduating seniors) at 6.8%. If you want to repay the loans in ten years it would require a monthly payment of about $220. If you allow 10% of your salary to student loan repayment, you would need a salary of $26,400 to cover this.

Most student loans start coming due within 6 months after you graduate. This was probably assumed to be an adequate amount of time to secure a job. With the current economic condition it is taking longer to find a job and to find one that pays enough to cover your education costs and other expenses. Some graduates are having to accept jobs out of their field and for lower pay just to get a job.It is nearly impossible to pay off debt if you are not making any money. If you can prove you are experiencing a hardship, you can apply for deferment. But this only postpones the problem. You can usually defer the loans up to one year, but the interest keeps increasing and is added to the amount you owe when you start making payments again. Eventually, you will need to find a way to make payments on the amount you owe. In most cases, student loan debt is not discharged when filing for bankruptcy.


If you do not make any payments on your loan in 270 days it will go into default. Once a loan goes into default it will go to a collection agency and they can garnish your wages and your credit score with drop significantly.

So even though a college education is probably necessary in a lot cases, keep an eye on how much you are borrowing and what it will cost you to repay it. Some students take out more in loans than they need considering it free or found money, but you will eventually need to repay it plus interest.
When considering how much your monthly student loan payments will be you also need to take into consideration the other payments you are going to have each month. Those separate payments can add up quickly and may be more than you will be earning

Student Loan Consolidation: Best Tips For Reducing Loan Payments

College graduates know how hard they worked to get through school: they dealt with the pressure to choose the right major, the long study hours . . . and the responsibility to pay for it all. It is no wonder that graduates consistently feel a sense of pride and achievement as they receive their diplomas on graduation day.

Of course, with graduation comes more responsibility: finding employment, finding a place to live, and trying to carve out a life for oneself. For graduates who funded most or all of their education with student loans, they are faced with the added level of responsibility of repaying those loans.

Many people with college or graduate school degrees have had to take out multiple loans over the course of their education. This means that they are now faced with having to repay different lenders, with different bills due throughout the month. Managing all of it can be complex. Another challenge is that the monthly payments can be overwhelming. For people in their 20s and 30s, in particular, cash is often tight. They can find themselves barely able to make ends meet - even before they factor in their student loan payments.

For graduates who still have multiple student loans and are having trouble making their monthly payments, student loan consolidation can be an excellent solution.

Why You Should Consider Student Loan Consolidation?

The benefits of student loan consolidation are many. For one, you are usually able to get a consolidation loan with longer repayment terms than the loans you have now. This means that you can stretch your payments out over more years, thereby reducing the amount of those payments each month. Another benefit is that consolidating your loans gives you the opportunity to lock in a fixed interest rate. For federal consolidation loans, your interest rate will simply be the weighted average of those of your existing loans. For private consolidation loans, the rate will be determined by a combination of some standard rate (like the prime rate) and your credit score. Either way, having a fixed interest rate can give you peace of mind.

Finally, there is the added benefit that you are able to simplify the financial part of your life by only having to make a single payment to a single lender each month.

Student Loan Consolidation: Best Tips For Reducing Loan Payments

If you are considering student loan consolidation, here are the 5 best tips for reducing your monthly payments:

1. Know your credit score: Always research your credit score with all three of the major bureaus, since your score may vary from one to the next. (Note: for federal consolidation, skip this step as your credit score will not factor into your interest rate).

2. Take an accounting of all of your current loans: List out all of your current loans by lender name, amount of outstanding principal, and interest rate.

3. Decide how much you would like your monthly payments to be: If you opt for a longer repayment period of say 20 or 30 years, you can reduce your payments. But, of course, doing so will also increase the total cost of your loan.

4. For private loans, be sure to compare multiple lenders: More choices is always good when it comes to loans. Apply to 5 or more private consolidation lenders to increase your chances of getting the best deal.

5. Do not take the first offer you receive: No matter how good the first offer you get is, do not accept right away. Take your time and review all options before deciding upon a lender.
Considering these 5 tips as you move through the consolidation process could help you significantly reduce your monthly loan payments.

How Debt Consolidation Can Build Your Credit

The debt management industry and the services within can be easily confused. While some consumers think debt management programs hurt credit there are some plans that can actually improve credit while enrolled. Primarily, it depends on the status of your accounts upon entering a program and selecting the program that best suits your current financial situation and long term credit goals. A debt consolidation plan makes payments each month as received from the client, helping improve the score over time. A debt settlement plan, often confused for consolidation, places accounts in a charged off status to enable balance negotiations. The only problem with a settlement plan is that the accounts have to first charge off before negotiating a lower balance pay off. Once an account charges off though, it remains as a negative on your credit for 7 years- paid in full or not. That’s only 3 years less bad credit than filing bankrupt.

Debt consolidation- not debt settlement- can help improve your credit score over time while paying back the debt. Accounts may be reported to the credit bureau as ‘being paid by a third party’. This notation does not affect your actual numeric credit score negatively or positively. It doesn’t hurt your credit rating in any way, shape, or form. At the end of the day, creditors and the credit bureau do not care who or how your payments are made, long as they’re made on time and consecutively each and every billing cycle. A debt consolidation plan makes the payments to creditors every month as payments are received from their clients. The due dates are renegotiated along with the other terms to ensure payments are considered timely and report positively, improving the score.


Making payments on time is the biggest factor in what affects your credit rating on a regular basis. 35% of your score is made up of timely monthly payments each billing cycle. In a consolidation plan, the due date is changed to coincide with a time that better fits your other monthly obligations and pay schedule and ensures timely payments right from the start of enrollment.

Did you know? Spending more than 30% of your available balance lowers your credit score? That means if you have a credit line of k, keeping a balance of more than 00 is negatively impacting your credit. 30% of your credit score accounts for how much total outstanding debt you owe. These accounts may be being paid on time every month but if the balance is above 30% of the credit line the payments aren’t helping as much as they could.

Standard minimum monthly payments are designed to pay off 1% of the balance with every minimum monthly payment. That means if you stop spending on your account it could take around 100 minimum monthly payments to pay back your total debt at the standard rates, or 8.3 years. In a debt consolidation plan the interest rates are reduced to lower fixed rates, usually in the single digits. This allows the consumer to have the majority of the payment apply to the balance instead of the interest, bringing the balances down much faster- lowering your overall debt amount at an accelerated rate.

Standard rates and terms issued by big banks direct to consumers are set at a rate that would take over 8 years to payback with minimum monthly payments. In a debt consolidation plan, the minimum monthly payment requirement coincides with the interest reductions in an effort to get the consumer out of debt in 5 years or less, applying the majority of your minimum monthly payment to the principle balance not the interest fees.

You can still obtain new lines of credit while consolidating you debt. It’s not ideal….as the point is to get OUT of debt not incur more- but you can nonetheless. Not every account has to be consolidated either. Dent consolidation is not an all or nothing deal. Pick and choose which creditors are charging you too much in interest and only consolidate those accounts. You can always add or remove accounts from a consolidation plan at a later time without being charged anything additional.

One lower monthly payment. Lower fixed interest rates. No late fees. No creditor calls. Improving credit on a monthly basis. Debt free in 5 years or less. For more free information or a free financial consultation contact a certified credit counselor at a nonprofit debt consolidation organization accredited by the Better Business Bureau. Call 800-905-1563 or visit our website freedomdm.org and complete our contact request form or LIVE CHAT with a counselor during business hours. Freedom Debt Management is a BBB accredited A+ nonprofit organization helping people become debt free one household at a time. You can be debt free, Freedom Debt Management can help.

Credit counselors work with consumers to assess their financial situation and determine what their best option may be.

Debt Credit Consolidation Tips

Interest, interest, interest... Paying interest on your credit cards, automobiles, medical expenses, mortgage, and basically every bill you acquire adds up and puts your bank account in a death spiral very quickly. Debt consolidation might be the answer for you even if you are one of the millions with bad credit debt.

One must consider carefully all options when looking at their financials especially when they are dealing with bad credit debt and debt consolidation. For someone with excessive credit debt there is light at the end of the tunnel. Having credit that has been damaged isn't the end of the world and for those that set back and plan out what they need to do with their unpaid debt generally see that debt consolidation is a viable option.

It is possible to take out a debt consolidation loan with bad credit. A debt consolidation loan can help reduce the burden significantly. Although, credit debt consolidation has its pros and cons, it also is an important step in debt management and consolidation. In many cases bad credit debt consolidation is the most helpful option for someone with someone that has bad credit debt; however, this may not be the right solution for a bad credit borrower to take. Make sure to look at all your options before choosing your first step.

A lower interest rate is one of the best advantages of debt consolidation. Lowering your interest rate will not only help you save money in the long run, but it will help you pay off your bad debt faster. While you are searching for options make sure to make lowering your interest rate your top priority.

Home equity loans are the most common consolidation motives and this is generally known as a second mortgage. Home equity loans are secured loans as your home is the liability. Sincere consideration should be completed before locking yourself into a home equity loan to consolidate your debt.

There are also unsecure options to consolidate your credit debt. Just remember unsecure loans have no security and will most likely ask for higher interest rates for their compensation. This can work if done right. You will need to know your credit score before you apply for consolidation. You can get a credit report yourself at various free credit report sites online. Once you know your score you can determine if your credit score will need help or not. If it does make sure to get it has high as you can before taking our an unsecured as any raise in your credit score will help you get as low of an interest rate as possible. Remember any little bit will help at this point

Make sure to get a lower interest rate when you consolidate your bad credit debt. This will help reduce your monthly payments and you will be able to put that extra money toward paying off your debt faster. It is good to know that sometimes bad credit borrowers will pay attention to the lower monthly payments instead of the lower interest rate. Don't make this mistake. Lower monthly payments can cost more over a longer time span. Make sure to lower your interest rate.
When doing your research make sure to get a copy of the costs for a debt consolidation loan. Also, make sure you get quotes from various loan lenders and compare them. This will help you make the best decision for your debt consolidation.

Once you decide debt consolidation manager will then deal with your previous creditors leaving you owing only one creditor. Make sure to select a consolidation lender who you trust will make your payments on time. Some consolidation lenders have been known to delay or even miss payments which in turn cause you to end up deeper in debt.

Do not expect your bad debt consolidation lender to improve your credit rating because that will not be the case. Although consolidation can have a positive effect on your credit score rating, you will need to make sure you pay your payments on time as making on time payments can slowly improve a bad credit score. You should plan to repay all your debts within 3 - 5 years.

Beware of predatory lending who promise to take care of everything. None of your debts will disappear in a snap of a finger. It is a process that takes time. Do your research before deciding on which option to take.

Should You Get Credit Card Debt Consolidation Help

It happens to just about anyone these days - no matter how regular a life they live. They think they're managing their finances just fine until one day, they realize that they have $20,000 in credit card debt and no way to make even the minimum payments. When things get rather out of hand, your credit card company will usually schedule for you a free debt counseling session where they run all your options by you. Let's talk about one of the more popular areas of advice they offer you - on credit card debt consolidation help.

Let's start with what consolidation actually is. Most people who run themselves into debt do so not on one credit card but on multiple ones - usually more than five. Paying several minimum payments each month can actually strain on your finances. Club them all into one single balance, and the single combined minimum payment that you make will tend to be far lower than what several minimum pavements could ever be. But that isn't the only advantage of going down the consolidation path. Usually, you can arrange things so that you are charged a lower interest rate as well. Once you choose bank card consolidation, your creditors will find some satisfaction in how you're obviously doing the right thing and not only will they stop making harassing phone calls, they'll stop charging you late fees and over-limit charges as well. All you need to do is to pay the consolidation company their monthly payments and all the trouble stops.

So should you get credit card debt consolidation help from outside or can you do it on your own? Considering how seeking the services of a consolidation company will cost something, you could seriously consider consolidating your credit card debt on your own. You're probably already familiar with this - you just need to transfer all the balances you have in your high interest cards to whatever card has the lowest interest. Once you've transferred the balances off the expensive cards, you still need to hang on to them; because if you close them all, your credit report wouldn't like that. If you want, you can go and apply for a new credit card that's built for this kind of consolidation. They charge you really low interest rates.
You could also handle things yourself without external credit card debt consolidation help by applying for a credit consolidation loan at the bank and taking the money in to pay all your credit cards down right away. But you need to be sure that you're applying for a credit consolidation loan and not a personal loan - because making that mistake would run you into the poor house in a hurry.

If you find that all of these are too hands-on for you, you really could find credit card debt consolidation help with a company that specializes in this. Whatever company you end up choosing, you probably want to check it out with the BBB first to make sure that they are completely legitimate and check out online testimonials well.

Is Debt Consolidation Loan Right for You?

Debt consolidation loan, isn't it great to hear? Yes it is but be watchful with this form of contract. There are advantages and disadvantages in credit programs of this nature. Before you decide to get yourself into any lending help, as they generally call it, you ought to know the pros and cons of this lending program first.
Typically, loans to consolidate debts are offered to credit cardholders who are in excellent standing. Banking institutions and financing agencies target for these types of people. Why? The reason is simple:It is obvious that these individuals are excellent payers. Return on Investment (ROI) is likely hastened because of the payer's good credibility standing and history for punctual payments.

The preceding offer is mutually beneficial to both parties. Debt consolidation loan on the part of the debtor saves him from multiple and burdensome accounts which are possibly at different rates and with different payment plan. These financing institutions ease the burden by merging the creditor's payable into one account and they settle his credit obligations with other moneylenders.

n what way should the package becomes enticing to the debtor? Naturally, a much lower interest rate than all the other creditors is the lure. Trust is the most important factor here. You have to have a reliable position to gain trust from these credit establishments. This is the law of the game. At any rate, both the moneylender and debtor, are pleased with the arrangement.

How about those people with very deficient lending standing? Debt consolidation loan may be provided at the risk of the creditor. A security or collateral may be offered to these debtors. However, debtors who are in dire need may throw their last resort and apply for this type of loan as some creditors might still approve their application.

Debt consolidation loan is not for everybody. When applying for a loan to consolidate debt, people should understand that getting such big amount would require the security of any physical property such as home ownership just in case the debtor had problems in paying the minimum. So if you do not have such property, debt consolidation loan might not be suitable for you. In many circumstances, loan really helps people to move out of their debt race but in some cases however, people only find themselves dug even deeper into their financial problems. So never decide on any money matters on your own but rather look for professionals for credit card help and other financial assistance. For they know how money moves more than you do.

Debt Consolidation Loans

Debt consolidation loans may look like an attractive way to bring debt under control, but before going down this route it is important for people to understand exactly what is involved with this course of action. Loans should never be entered into unless all the terms of that loan are fully understood, and the person taking out the loan should be confident they can meet the repayment requirements.

People end up in debt for all sorts of reasons, for example redundancy or sudden illness. Often the reasons why someone finds themselves in debt are not their fault; they are simply a victim of circumstances. The most important thing a person can do if they find themselves owing money is seek advice, and put together a plan to start to deal with the debt.

There are also people who have never built up good money habits, whether it is because this is what they learnt from their family environment or that handling money is just not one of their strong points. Whatever the reason for unhealthy money handling, remember that like any other habit it can be changed with effort over time. Debt consolidation loans may give you the opportunity to learn while you get your finances back on track.

Many people end up owing money to several creditors. There may be credit cards, home loans, utility bills and mortgage repayments to name but a few. Keeping track of all the separate payments can be tricky, which is one reason a debt consolidation loan is so attractive. What a consolidation loan does is create a new loan to pay of the existing debts. This means going forward there is only one monthly repayment to meet rather than several.

The advantages of this are that it makes budgeting easier, there is a definite end date to the loan, and there is only one lender to detail with. However, whilst one monthly payment may be easier to manage that several separate ones, it is important to consider all the terms of the loan before deciding to ahead.
Things to take into account when considering a debt consolidation loan include the length of the loan and whether the overall payments will be greater, and how the loan is secured. If the new loan is secured against property, then that property may be at risk if repayments are not kept up.

When looking for debt consolidation loans it is important to shop around to find the most appropriate deal before consolidating debts. They may be several to choose from so studying the small print around payment penalties and interest rates is vital. Used in conjunction with good advice and a carefully structured financial plan, taking out a consolidation loan can prove to be a useful and sensible debt management strategy. Taking charge of your debt is the first step on the road to financial recovery, and taking out a debt consolidation loan is one possible option.

Student Loans Company: Choosing The Right One

Student borrowings can be obtained by applying through third parties like Studentdebts.com, MyGreatLakes.org, National Education loan Network (Nelnet), American Education Services (AES) and Sallie Mae which also helps students obtain private fundings. Great Lakes is a 40 year old company that guarantees and services student debts. It guarantees financings for the states of Minnesota, Ohio, South Dakota, Wisconsin, Puerto Rico and the U.S. Virgin Islands. It is not specifically a student borrowings company, it does act as a go between for educational institutions and lenders. It simplifies the delivery of financial aid and helps borrowers repay student fundings through financing repayment software that offers many features. One of the features is to schedule automatic payments and another is being able to access financing payoff amounts at any time online.

The National Education funding Network or Nelnet is a loan servicing and information site that offers information about debts and the costs associated with obtaining a debt. They are not themselves a student financings company. There are repayment calculators and debt management information to guide your payment planning. The student can sign up to receive text alerts about their financing. They can also register for webinars that teach important information about borrowing. It is also a site used by authorized payors to make funding payments.

American Education Services (AES) is another borrowing servicing site that illustrates repayment plans and offers different ways to make actual payments when the funding is due. The AES is also not a student fundings company. Your account information is available for viewing at all times. You can access information about any trouble you might be having with making payments in a timely manner. You can get you borrowing payoff balance at any time as well. Tips on managing your funding are also readily available.

Sallie Mae provides federal and private fundings to students. Sallie Mae is a student debts company. You can apply for a student financing, check your application, eSign for your funding and cosign for borrowings with Sallie Mae. You can apply for the Smart Option Student debt, a private debt through Sallie Mae. Sallie Mae is a guarantor of student fundings, it originates, services and collects on student borrowings. Sallie Mae or the Student funding Marketing Association publicly trades borrowings and holds about one third of all educational loans in the United States. It has the ability to buy student debts and provide liquidity to other banks, savings and fundings institutions that support the credit needs of students.

The federal government offers the most student borrowings and consequently is the largest student loans company in the world. Federal Student Financial Aid issues student financings annually to students in need. If you qualify, you may be eligible for up to $5500 in guaranteed student loans for undergraduate study. Federal education borrowings include the Stafford borrowing for both undergraduate and graduate students. The Stafford debt is offered with a fixed rate as low as 4.5%.

A student loans company like Chase offers loans from $500 and up to cover certifies school expenses including books, computer, living expenses and tuition. The funds that are borrowed are sent directly to the educational institution. Interest accrues during school and is added to the principal of the loan. Repayment begins 6 months after graduation or after the student leaves part-time attendance at school. Credit approval is required to qualify for a private debt with Chase. A cosigner may be required to qualify. If so, after 36 consecutive timely payments, the cosigner may be released if the borrower's credit is approved.

Citibank offers the CitiAssist Student debt which allows you to borrow as little as $1000 and as much as $120,000 in aggregate amounts. Citibank is a well known student fundings company. You must be credit worthy or have a credit worthy cosigner. The borrower can take up to 15 years to repay the loan. There are no loan fees and.25% can be taken off your funding payments if you have them automatically deducted from your account. Interest on a private student debt is generally deductible from your federal taxes.

Wells Fargo is also a student financings company. Wells Fargo offers borrowings beginning at a variable rate as low as 3.4% for the cost of your education minus any other financial aid you receive up to $120,000 in aggregate amounts. There is no origination fee, no application fee and no additional fees. The money is sent directly to your school. They offer a second variable rate financing which has a 2% origination fee and a variable rate as low as 5.68%. borrowings start at $25,000 and go up to an aggregate amount of $100,000. This money is paid directly to the borrower. The third debt they offer for education is with a variable rate as low as 3.5% on amounts beginning at $25,000 per year and going up to $100,000 in aggregate debt amounts. There is no application or origination fee and the money is paid directly to the borrower.

Bank of America provides private fundings and is also a student debts company. Bank of America also offers student debts at a variable rate. It gives discounts on the rate based on how many accounts the borrower has with the bank prior to borrowing for the student loan. The combined balance in all of your accounts will determine the final rate you receive for your student debt. If your savings account and or your Merrill Lynch brokerage account is with them you may be eligible for discount.

Another student loans company is in the form of a credit union. Check with your credit union to see if they offer student borrowings before you search for one, you may be able to get a better rate because of your relationship with them. Whether you select an institution like the federal government, Sallie Mae, or a bank or credit union to apply for a student loan, remember they are all very competitive and the rates are similar for each type of debt, federally guaranteed or not guaranteed.

Selecting a student loans company should take into consideration the rate, the origination fee, the application fee and the amount you can borrow with and without a cosigner.

Options for Waiving Student Loans in the Public Services Sector

Did you know that a portion of an educational loan can be waived for public service employees? Debt management services can do a detailed analysis for you.

Many who now work in public services might have borrowed through a Professional PLUS Loan or Parent PLUS Loan. But did you know, as public service workers, you are entitled to have a certain portion of your loans forgiven? Yes, it's true, but there are certain criteria you must meet to be eligible. Experts of debt management services give clear insight into those criteria:

• You must be a full-time public service job holder
• The outstanding educational loan should ideally be under the William D. Ford Direct Loan program
• There should be no defaults on the eligible loans
• You should have made at least 120 monthly payments since October 1, 2007
• You should have made your payments under a licensed repayment plan
• At the time of loan cancellation, you must be employed at a qualifying public service venue

Debt management services experts predict the loan cancellation will not happen until October 17, 2017, even if you started making payments in October 2007, because of the 120 payment requirement. But this is still a better option than being stuck with accumulated debt problems.
Companies offering debt management services lise the following jobs that qualify for the student loan forgiveness plan:

1. Government sector
2. Law enforcement
3. Public safety
4. Child care
5. Family service agency
6. Disability service
7. Elderly service
8. Tax-exempt organizations
9. Emergency service
10. Military sector

Getting a waiver on a student loan is not as easy as it sounds. Your repayment plans are also taken into consideration. Debt management experts have categorized the following plans:

Income based repayment
Your repayment plan is based on your income. However, Parent Direct PLUS borrowers are not eligible for this plan.

Standard repayment
You can opt for repayment under the standard 10 year scheme.

Direct loan repayment
You can also opt for direct loan repayment if your monthly payment is similar to the standard 10 year repayment plan.

This loan forgiveness program is very much available for those with public sector jobs. You just need to be aware and plan ahead to take advantage of the program and reduce your debt problems. Once you are close to reaching the required 120 monthly debt payments, it is recommended that you contact the Direct Loan Servicing Center.

Student Loan Consolidation ??

As far as debt consolidation is concerned, student loans are considered to be the basic factor which has contributed to the overall debt situation of the country as compared to any other debts. As a matter of fact, not even credit card debts have accounted for so much of the financial crisis as the student debts have. It is obvious therefore, that student debts should not be left unattended for a longer period of time. As we all know that the completion of education or attaining a college degree is perhaps the greatest moments of triumph in one's life. However, the burden of debts can sometimes make it a little difficult to enjoy these moments in the true sense. The debt consolidation services are by far the best known methods to resolve student debts. In this procedure, the entire amount of debts accumulated by the students is to be merged into a single amount and the entire range of debts is repaid in a much more affordable structure. In short, the debt consolidation procedure will combine all the debts into a single amount and the student will have the accessibility of making one payment to the creditor instead of making several payments in a row. The chances of missed payments will also get reduced drastically in the process. In addition to all this, through the process of consolidating the student debts, it is possible to save hundreds and thousands of dollars which the students would have otherwise paid to the creditors. Usually, the consolidation process involves the debt consolidation loans which are largely considered by the citizens. Although, securing loans will definitely mean that the students will have to bear interest amounts but even in that the interest amount will be one rather than smaller interest which are relatively difficult to handle.

The loan repayment tenure can also be changed with the help of a debt consolidation process and it can usually be stretched for a longer period of time may be for a 20 to 30 year time period before the debts get settled. As far as the issue of credit score is concerned, it is one of the most important determining factors for the students to step into their professional lives. The FICO scores which are calculated by the credit rating agencies go a long way in deciding the nature of employment of the students and other factors such as getting a house, car or other necessary stuff. A low credit score is necessarily bad and it will act as a major obstacle in getting ahead in life or the student will likely face an array of denials in life.

On the basis of the debt situation, the students can expect to get help through various online debt consolidation programs and the lenders may also decide to approve on the loans. The best way is to shop around for the best rates and the best lenders before opting for the consolidation options.

Student Loan Tips and Guidelines for the New Student

With the unsteadiness of today's economy and the amount of people getting laid off, more and more people are looking at what they can do to improve their quality of life, and employment! Many people are choosing to go back to school because they have the free time now but also because they are tired of putting everything into a job that won't put anything back into them. Here we'll put together some tips for you to help you get started and to be able to take advantage of the different types of financial aid that is out there including federal student loans.

With the record number of layoffs and unemployment rates, students that weren't eligible for financial aid then could be now. The FAFSA (Free Application for Federal Student Aid) should be filled out every year even if you think you won't qualify.

Deadlines
financial aid applications have deadlines and they should always be met. Different colleges have different deadlines it's up to you to keep on top of the dates. If you miss the date, the schools hands are tied and they will not be able to help you.

Family Contributions
The amount that your family can contribute basically means how much money the parents can add to help offset the expenses of college. This amount is determined by the college and based on the information that was provided in the FAFSA any other financial aid forms that were turned in. The family contribution is given in a dollar amount but not all the time is how much a family will pay. The amounts can vary from college to college.

Total Costs of College
One of the biggest mistakes future students make is that they don't sit down and figure out how much money they need ahead of time. Being ahead of the game is half the battle. You'll need to calculate up costs for textbooks, supplies, and anything else you might need on top of the tuition.

Eligibility vs. Need
If a student is eligible for a Pell grant, the school must and will give out all of the funds to you. This doesn't mean though that you are automatically eligible for any other types of aid. The best thing about the Pell grant is that they don't have to be paid back!

Need based and Merit based
Merit based is only concerned with a students academic performance whereas need based is based on the student's or student's families financial circumstances.

Types of financial aid
There are many different types of financial aid for students. It's important for you to be very versed in what they are and which ones you can qualify for. The reason I'm saying this is because sometimes not all the options are laid out for you when you visit a school. The areas to be aware of are the federal student loans, private student loans, scholarships, and grants.

Three Effective Tips for Private Student Loan Consolidation

Would it not be nice to take all your private student loans and wrap them into one loan. You can do that with private student loan consolidation lenders. Right now you are probably paying two or more lenders different amounts each month, on different days of the month, at different interest rates, and each with different pay off dates or maturities.

Roll It All Into One
Of course, this situation can be somewhat overwhelming. The cost in postage and stationery alone is enough to set you back. And two great big student loans can leave a hapless former student feeling somewhat hopeless. Never fear - student loan consolidation is here.

What Consolidating Does
By consolidating your private student loans, you can have one payment, one amount (probably with a sum much less than the two or more you are presently carrying), on one day of the month, at one interest rate, and with one maturity date. And, if you are not careful, you can have one big problem.

Three Effective Tips
Many variable come into play when considering what you need to do to get your student loans into a manageable form. If you are not prudent and careful, if you do not shop around for the best interest rates, the best repayment terms, the lowest administrative fees, you could be making moves that will cost your hundreds, perhaps thousands, over the cost of your new student consolidation loan. And that is not what you had in mind, is it?

Effective Tip One - Interest Rates
The first thing you need to do is go online and find a weighted interest rate calculator. This will give an average interest you are paying right now with your multiple private student loans. That weighted interest rate is what you want to aim for when you apply for a student loan consolidation.
If you can, try to get a rate lower than that calculated. Pay no attention to market rates, you want an interest at, or lower than, what you are now paying. If you hold your ground, your lender will come around. They want your business after all.

Effective Tip Two - Fees and Penalties
This is very important. Lenders tend to elide over these facts. You want to know if there are late fees and what is the cost. What about carrying fees and other administrative fees? Consolidation lenders should not ask for application fees, or credit check fees.
If they do, refuse them and find another consolidation lender. Policies vary widely from lender to lender so be sure you get the skinny on any incurring or recurring fees. Do not sign anything until you completely understand it.

Effective Tip Three - Marketing Promotions
Beware of incentives or marketing ploys the consolidation lender may be using to lure unsuspecting borrowers. All too often, fantastic interest rates, very easy initial payment terms, and other little trinkets are offered. After reading the fine print, you suddenly discover that you have signed a variable interest loan, the payment will double in the next year, and all sorts of other nasty terms become apparent. Remember, if it sounds to good to be true, it is not true. Consolidation can be a godsend, do not let it turn into a devil's dream.

Consolidating Private Student Loans

Tuition fees are continually on the increase, so it has now become expedient for any college student to rely on student loans in order to study for a degree. However, repaying student loans tends to be quite hard for students to do, most of all in the beginning where their income is still much lower compared to what they could actually be earning. That's why consolidating student loans is a great option for a lot of new college graduates to look into.

Consolidating private student loans pretty much works like any other consolidation program.

One singular lender will take on several loans that you may have accumulated, such as HEAL, NSL, Perkins, Stafford, and other private loans.
The actual repayment conditions and terms may differ among these various lenders; one singular company will pay off all your loans and replace them with a single loan to pay off over a long-term. Generally, students choose to go for repayment plans that last a decade or three. Naturally, if you take a longer term, your payments per month will be lower too.

Student loan consolidation provides you with a chance to stretch all your payments in order for you to take full advantage of what you could be earning in the future. It is fairly reasonable for a lot of students to assume they can earn more money as their career progresses, so by stretching out all of the repayments, they will not have to worry about paying the majority of the loan during the earlier period of the loan. Another advantage in programs of consolidating student loans is the fact that they get rid of a lot of problems and confusion when it comes to paying back student loans.

For fresh graduates whose loans stem from various private and public lenders, trying to keep up with one-of-a-kind conditions and terms of each loan could prove to be quite frustrating. Because of this, one well-known option exists; however, this option comes with a cost.

Any kind of loan consolidation tends to be very attractive to lenders since they can ask you for fairly high fees for consolidation. While the consolidation of student loans comes with better regulation than the majority of other forms, loan consolidation companies are still capable of adding some fees to the loan's principal, which you will have to pay off later.

You can avoid all this by insisting on paying every consolidation fee straight up. By doing so, you make sure that at least you know how many charges you are getting. Another predicament that may come with consolidating loans is that although you can extend it up to fifteen years, your interest will significantly increase on the loans. Interest accumulates as time goes by, meaning that if you delay paying off the loan, you will get accrue more interest.

A lot of students do not seem to notice that fact and only concentrate on the rate of interest instead of the overall interest amount that needs to be paid off through the loan's life.
Consolidating private student loans is an essential tool for any student who wishes to defer the repayments until more money becomes available or for those who find it difficult to manage several single loans. However, it is still essential for fresh graduates to take all points under consideration, no matter what other lenders may say to you. Be aware of both the pros and cons of consolidating private student loans, so you can come up with smart decisions on whether consolidating students loans is an ideal choice for you.

Paying for College: Student Loans or Credit Cards?

Research conducted by student loan company Sallie Mae shows that in 2010, about 5 percent of college students paid an average of more than $2,000 in tuition and other educational expenses using a credit card to avoid taking out student loans. The same study showed that 6 percent of parents used credit cards to pay an average of nearly $5,000 in educational expenses for their college children.
Is using credit cards a smart way to avoid college loan debt? Financial advisors are in near-universal agreement that the answer is no, but that isn't stopping thousands of families from using credit cards in place of parent and student loans.

Some families might think that all debt is equal; others might think that they won't qualify for college loans. So what advantages exactly do education loans offer over credit cards?

1) Availability
Particularly in the last few years, as credit card companies have tightened their credit requirements in a retraction of the lax lending that led to the foreclosure crisis, credit cards have become harder to qualify for, available mostly only to consumers with strong credit. Many consumers with weaker credit have had their credit lines reduced or eliminated altogether.
Federal college loans, on the other hand, are available with minimal to no credit requirements. Government-funded Perkins loans and Stafford loans are issued to students in their own name without a credit check and with no income, employment, or co-signer required.
Federal parent loans, known as PLUS loans, have no income requirements and require only that you be free of major adverse credit items - a recent bankruptcy or foreclosure, defaulted federal education loans, and delinquencies of 90 days or more.
In other words, don't turn to credit cards simply because you think you won't qualify for school loans. Chances are, these days, you're more likely to qualify for a federal college loan than for a credit card.

2) Fixed Interest Rates
While most credit cards carry variable interest rates, federal student and parent loans are fixed-rate loans. With a fixed interest rate, you have the security of knowing that your student loan rate and monthly payments won't go up even when general interest rates do.
Many credit cards will also penalize you for late or missed payments by raising your interest rate. Federal school loans keep the same rate regardless of your payment history.

3) Deferred Repayment
Repayment on both federal student loans and federal parent loans can be postponed until six months after the student leaves school (nine months for Perkins undergraduate loans).
With credit cards, however, the bill is due right away, and the interest rate on a credit card balance is generally much higher than the interest rate charged on federal school loans.
If you're experiencing financial hardship, federal loans also offer additional payment deferment and forbearance options that can allow you to postpone making payments until you're back on your feet.
Even most private student loans - non-federal education loans offered by banks, credit unions, and other private lenders - offer you the option to defer making payments until after graduation.

Keep in mind, however, that even while your payments are deferred, the interest on these private student loans, as well as on federal parent loans and on unsubsidized federal student loans, will continue to accrue.
If the prospect makes you nervous of having deferred college loan debt that's slowly growing from accumulating interest charges, talk to your lender about in-school prepayment options that can allow you to pay off at least the interest each month on your school loans so your balances don't get any larger while you're still in school.

4) Income-Based Repayment Options
Once you do begin repaying your college loans, federal loans offer extended and income-based repayment options.
Extended repayment plans give you more time to repay, reducing the amount you have to pay each month. An income-based repayment plan scales down your monthly payments to a certain allowable percentage of your income so that your student loan payments aren't eating up more of your budget than you can live on.
Credit cards don't offer this kind of repayment flexibility, regardless of your employment, income, or financial situation. Your credit card will require a minimum monthly payment, and if you don't have the resources to pay it, your credit card company can begin collection activities to try to recover the money you owe them.

5) Tax Benefits
Any interest you pay on your parent or student loan debt may be tax-deductible. (You'll need to file a 1040A or 1040 instead of a 1040EZ in order to take the student loan interest deduction.)
In contrast, the interest on credit card purchases, even when a credit card is used for otherwise deductible educational expenses, can't be deducted.
To verify your eligibility for any tax benefits on your college loans, consult with a tax advisor or refer to Publication 970 of the IRS, "Tax Benefits for Education," available on the IRS website.

6) Student Loan Forgiveness Programs
Whereas the only way to escape your current credit card debt is to have it written off in a bankruptcy, several loan forgiveness programs exist that provide partial or total student loan debt relief for eligible borrowers.
Typically, these loan forgiveness programs will pay off some or all of your undergraduate and graduate school loan debt in exchange for a commitment from you to work for a certain number of years in a high-demand or underserved area.
The federal government sponsors the Public Loan Forgiveness Program, which will write off any remaining federal education loan debt you have after you've worked for 10 years in a public-service job.
Other federal, state, and private loan forgiveness programs will pay off federal and private student loans for a variety of professionals - veterinarians, nurses, rural doctors, and public attorneys, among others.
Ask your employer and do a Web search for student loan forgiveness programs in your area of specialty.

student loans, tax benefits for education 

Jeff Mictabor is an enthusiast on the topic of student loan issues in the news. He has been writing for the past 10 years for a variety of education publications. He now offers his writing services on a freelance basis.

Future With Graduate PLUS Loan

With the increased need of higher education for the many students and graduates in the United States of America, there are many education establishments that offer many different major college degrees to those who want a higher education to get a better future for them self. There are of course obstacles for those who are pursuing these improvements. Most people have limited funding to pay for college tuition or are having difficulties in managing their time to work and go to college. More problems for these guys is that if they stop doing their job to focus on their education then they will be unable to pay for their education. For every problem however, there is a solution. As long as you are patient enough, you can search for many financial related solutions for your limited funding problems.

One of the solutions for your problem is the Graduate PLUS loan. The GradPLUS loan or the Graduate PLUS loan is a fixed low interest rate student loan that is guaranteed by the United States Government. While most federal aids are need based and are given without the need of paying them back, the Graduate PLUS loan is designed to be a credit based loan that is guaranteed by the federal government to have a fixed low interest rate. This particular loan is designed to allow you as a graduate student to borrow money as much as the total cost of their graduate school needs. The amount of money that is allowed to be borrowed will be including tuition, your boarding, supplies, laboratory expenses, and your travel expenses. In short, any type of expenses that is related to your education needs can be a subject to this loan.

There are many benefits in getting this type of loan. One of such benefits is in regard of the interest rate the lenders are charging you. While you may get fluctuating rates from a private student loan company, you will not be getting that kind of insecurity if you get your loan from the graduate PLUS loan. You will get a fixed interest rate of 7.9% on your loan. You can compare this to other student loans and I am sure that you will not find many that offers better rate. Another great feat in this loan is that you can defer your payment while you are still studying in school. This way you will not need to get a lame part time job to pay for your loan while you are still in school. You also do not need a co signer to sign for your loan, this would mean that the loan is your own responsibility and as an adult you will be in charge of your own debts. The good thing is for most grad students the interest is tax deductible. That's another load off your shoulders.

To get the loan you would of course need to apply to see if you are eligible or not in receiving the GradPLUS loan. This might be a problem to some students who comes from a rather poor family. With Graduate PLUS loan however, you don't have to worry much because your eligibility is not based on your family or personal income level, your financial need or personal assets. However, you would have to pass a credit check to be eligible of getting a graduate plus loan. After your eligibility to get the loan is confirmed, you can get your loan with a maximum amount of the total amount of your education cost minus the total amount of other financial aid you are receiving. So for an example, you are having financial aid from a student grant program for $20,000 and you want to apply for a graduate PLUS loan. The maximum amount of money you can borrow would be the total cost of your education cost (lets say $50,000) minus your other financial aid of $20,000. With this formula then you can borrow up to $30,000 on your graduate PLUS loan.

If you succeed in getting the loan, your lender will be sending your funds to your school. Your school will then disbursed your funds in at the very least two installments. These installments amounts will not exceed half of the loan amount you were granted. These funds will be then allocated to pay your tuition and other education expenses you might be having. You would have to spend all these loans for your educational expenses, so how the loan is used will be monitored very closely. To make it easier for you, if you already qualified for a Graduate PLUS Loan you will not be required to have an adverse credit history or have extensive credit reports like some private education loan lenders would be asking of you. This is why you should really try and apply for this type of loan to make your future brighter by having a major degree.

Debt Consolidation - Student Loans

For many students graduating from college the last thing on their minds is how to repay the many loans they may have accumulated over the course of their studies. They are frequently more focused on celebrating graduation as well as finding a job. However, it doesn't take long for multiple bills to start coming in as, rarely, does a single provider cover all costs associated with higher education.

For those facing the dilemma of impending multiple student loans there are debt consolidation programs designed to combine payments so they are more affordable for those who will, likely, begin employment at the bottom level. Depending on the career choice, the amount of net income can vary widely and, sometimes, the income will not cover all payments once they are totaled.

The majority of consolidation loans extend the repayment period once loan amounts are combined and a total is calculated. For graduates this makes the cost of borrowing more affordable, but it's important to remember that the longer it takes to repay a loan the higher the repayment since interest will accrue for a longer period of time. Therefore, it's best to repay as much as possible while still in school in order to prevent being burdened by debt upon graduation.

These loans have many benefits that serve to relieve financial stress while trying to start a new life. The overall interest rate is generally lower since the length of the loan is extended. These loans are frequently locked into a fixed rate rather than changing over time. The result is lower payments and the ability to have the peace-of-mind that comes with knowing that multiple payments will not be coming in the mail every month.
To figure out how much you would have to repay you can calculate payments based on a simple method. Let's say that you have $40,000 worth of combined loans by the time you graduate. Part will be at an 8% interest rate while others will be higher. Therefore, for every $1000 you borrowed you would repay about $200 per year. Once combined at a lower interest rate and extended to 10 years, however, you would repay $100 per year. By reducing the overall payment more available cash is provided. If loans have gone delinquent, late fees and over-limit charges can also be included or eliminated all together on consolidation occurs.

For many graduates student loan consolidation is the only viable option in order to prevent bankruptcy, for which student loans cannot be excused, or falling into arrears. It's important to research companies carefully who provide these types of loans. Understanding origination fees, repayment penalties, periods of repayment,

Student loan consolidation tips guide

During their student life, students accumulate a number of loans to secure their college degrees. These loans prove to be helpful for a while, however when the time for their repayment arrives, their numerous monthly installments with different interest rates pester the students causing them to lose their sleep and get diverted from the path of success in their career. Hence, the most desirable thing to do to avoid this kind of situation is to opt for a Student Loan Consolidation.

Student Loan Consolidation is basically a loan which absorbs all the previous loans taken by a student to finance his studies and other needs. By consolidating all his loans a student saves his time and effort as it is much easier to handle one payment monthly than several separate payments. Secondly, a consolidated student loan carries a lower interest rate than the various other student loans. Moreover when a student opts for a consolidated loan he has to pay only one interest rate, not several different rates. Also, a consolidated loan offers more flexible repayment options than the other loans. This type of loan is also generally free of any kind of prepayment penalty.

Student Loan Consolidation rates might vary depending upon the student’s financial situation. It will be very easy to acquire an excellent Student Consolidation Loan plan if one has a credit score of more than 660 (FICO score). Different lenders offer different monthly plans according to the student’s loan situation. Some lenders might offer 50% lower monthly plans than others. A student should review the terms and conditions of all the lenders and should select the one who offers simplest repayment options with a monthly payment that will not become a burden for him.

While considering consolidation a student should always opt for fixed interest rate rather than floating rate. This reduces the element of uncertainty and clearly defines what one has to repay in future. Hence, one should always choose a lender who is offering the lowest fixed interest rate. One should select the payment period, which does not burden him in any way. This is very significant as the rate of interest and monthly installments are both calculated according to the duration of the loan. Whether the lender will be able to extend the payment period according to the needs of the borrower should also be enquired first. Above all, it is recommended that a student should avoid Student Loan Consolidation if he has already paid a major part of his loans because opting for consolidation on this stage can reset the loan process, which will ultimately make him pay more than what he had planned for.

Keeping these tips in mind a student should first do his homework by carrying out a survey of what the numerous Student Loan Consolidation companies are offering him and then go for the best deal that will make it easier for him both financially and psychologically to get rid of his debt.