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Archive for Student Loans

Free Finance Webinars for Students at Great Lakes

Wednesday, October 19th, 2011

Student loans are becoming an increasingly heavy financial burden on young American adults. This can be even more of a financial disaster early on in life if young people do not really understand what they are getting into. Most of the time because of their youth and inexperience, they can jump into loans without really understanding the ramifications of their decisions. Even if students know the importance of educating themselves financially with regards to student loans, most of them don’t really take the time to read about it. This is where Financial IQ Webinars from Great Lakes come in.

Great Lakes or is a student loan servicer that offers free online webinars that educates students on various financial literacy topics. Webinars are about one hour long, which is just about enough to hold a student’s attention. Below are the categories that Great Lakes have to offer:

* Student Loan Repayment Smarts - This webinar teaches how students can plan to repay their loans by knowing who they owe, how much, and different repayment plans they can use.

* Money Smarts – This teaches how to be wise with money while featuring easy steps they can do right now.

* Credit Smarts – This educates students on different types of credit and debit, helping them understand what they should apply for.

* Credit Rating Smarts – This helps students understand how to protect, improve and manage their credit score while the slate is still clean.

* Tax Smarts - One of the basic things students must know is understanding their tax advantages to gain them great financial benefits.

* Identity Smarts – Every year, 10 million Americans suffer from identity theft. By learning about it, students can refrain from being a victim.

All of these sessions are presented by Accredited Financial Counselors and aside from the one hour lecture session, it also includes a question and answer portion.

Below are the upcoming sessions and their schedules:

Money 411

October 21 at 1:00 pm Central Time
October 28 at 1:00 pm Central Time

Credit Card Smarts

November 4 at 1:00 pm Central Time
November 11 at 1:00 pm Central Time

Student Loan Repayment- Everything You Need To Know

December 7 at 3:00 pm Central Time
December 9 at 1:00 pm Central Time

Register to these sessions now, these one hour lectures just might help you save a few thousand dollars in the future.

Top 5 Private Student Loan Providers

Thursday, October 13th, 2011

There is no doubt that federal loans will give you the most affordable terms and rates, however these loans are oftentimes not enough to cover all of the expenses in college. To make ends meet, it is usually necessary to take on a private student loan. So where can you get private student loans with competitive rates? Below are the top 5 private student loan providers, with descriptions telling you why they’re the best.

1. Sallie Mae – This provider currently holds the market leading rates with as low as 2.25% APR. Plus, it is also possible to get a 0.25 point interest deduction should you choose to make automatic debit deductions thus bringing the rate even lower. Aside from competitive rates, Sallie Mae also offers incentives and rewards everytime a student eats out, shops online, buys gas and so on. Sallie Mae also offers three different payment schemes such as Interest Repayment, Fixed Payment and Deferred Payment, allowing students to choose the type of loan that suits them best.

2. Citi Bank – CitiAssist loan from Citi bank also offers a low interest rate starting at 3.08% APR. One of the perks offered by CitiAssist is their no origination fee policy, helping students save more from their loans since origination fees usually amount to a good 3% of the loan amount. CitiAssist also offers generous repayment terms such as a 6 month grace period and 15 years to pay. There is also no penalty for prepaying or paying early.

3. US Bank - Student loans for US Bank features interest rates that start at 3.39% APR. And instead of giving a 0.25% reduction with auto payment, they can offer as much as 0.50% interest rate deduction. Other perks from US Bank is the 2% Principal Reduction upon graduation plus a 1% Good Grades perk.

4. PNC Bank – PNC Solution Loans are giving out a low interest rate of 3.30%. It also offers a 0.50% reduction with auto payment. Another good thing about PNC Student loans is that it charges no application or origination fees. Payments can be made for as long as 15 years, making it less heavy on the part of the graduate.

5. Discover Bank – Discover Student Loans offer the lowest rates after Citi Bank. It’s minimum interest rate is currently at 3.25%. They also offer a 0.25 reduction for auto payments and just like US Bank, they are giving away a 2% Principal Reduction upon graduation. And if that isn’t enough, Discover Student loans also doesn’t charge a cent on origination fees.

All these lenders provide a fast and easy online application so you will know if you’re qualified. Some of the lenders will encourage you to bring in a co-signer in case your credit doesn’t qualify. Whatever the case may be, these private lenders should be enough to help you get the financial boost you need during college.

The best place to get a student loan is always with the feds. However, federal student loans such as Stafford loans are often not enough to cover the rising cost of education. Because of this, most students need to get an additional private student loan to cover the rest of the expenses. Choosing your lender may prove to be a difficult choice, however lower fees and interest rates are always a good place to start.

PNC Bank announced earlier this year that PNC Solution Loans are no longer charging origination fees. Aside from that, they are offering a 0.50% interest rate reduction for students who opt to use automatic payments. These two deductions can result in large savings especially since origination fees are usually at a hefty 3%.

Other perks from PNC Solution Loans include the ability to decide whether to pay off the loan after graduation or to start paying as soon as possible in order to save on interest. The loan repayment term is also long, as lengthy as 15 years, giving you less stress about heavy payments. PNC Solution Loans can also cover all your college needs, minus financial aid.

The qualifications include:

- The student must be enrolled for at least half-time in a degree program at an approved school
- Creditworthiness must be established. If the student cannot offer a credit standing, he may opt to bring in a co-signer with good credit to co-sign his loan. Creditworthiness can be established by satisfactory credit history or employment history for 2 years, proof of current income, and being a US citizen or permanent resident for at least 2 years.

The minimum loan amount is $1,000. Aside from undergraduates, PNC is also offering loans for graduates or professionals, health professionals, and those who are studying and taking the Bar exam.

Forgive Student Loans: A Way To Improve The Economy?

Tuesday, September 27th, 2011

With the economy at a slump, the government is continually trying to figure out ways to improve the situation. 2 years ago, a man called Robert Applebaum has come up with an innovative idea that has since then been gaining popularity. His idea is this: forgive student loans. This idea is stemmed on the notion that student loans are one of the heaviest factors that can cut on a employee’s budget. If these loans were eliminated, then the average Joe would have more to spend, thus helping to improve the condition of the economy altogether.

Applebaum’s idea can be found in which is currently hosting a petition to eliminate student debt, with the goal that once the petition reaches 30,000 signatures, it will then be forwarded to President Obama and the Congress. As of September 15th, the petition has already reached 27,629 signatures.

Apparently, Applebaum isn’t alone with his belief. Aside from the 27,000 people who signed the petition, Congressman Hansen Clarke has also adopted the idea by the formulation of the bill H. RES. 365. This bill endeavors to eliminate personal finance burdens of Americans by not only forgiving student loans, but as well as mortgages and other forms of personal loans. According to Representative Clarke, “We need to cut, cap, and forgive student loan debt,that is the true debt that is burdening American families. We cut student loan debt we’ll have a freer more prosperous country.” Loan forgiveness however is limited to loans which were disbursed within a certain time frame.

The Student Loan Forgiveness action has been considered to be idealistic by some and may be an unlikely way to stimulate the economy. However, if you personally believe and support this idea, you may choose to let your voice be heard by signing the petition in or in Who knows, President Obama just might take out that pen.

Student Loan Defaults Highest In Arizona

Sunday, September 18th, 2011

Given the condition of the economy these past few years, more and more students are finding it difficult to get a job that would help pay off the bills, much less the student loans they have haunting them. This is starting to result in a large number of student loan defaults and today, the highest number of defaults is recorded to be in Arizona as reported by the U.S. Department of Education.

Out of 276,057 borrowers of federal student loans credited to Arizona, 44,216 of these were in default. This number is almost twice that of the following states with the highest default rates. California has 21,529 defaults and Texas has 21,405. Arizona’s percentage of student loan defaults is almost twice the national average.

The Department of Education is stipulating that the reason for this overwhelming figure is the presence of the University of Phoenix, which is a for-profit college giant. This observation coincides with the data that for-profit colleges have by far the highest student loan default rate among post secondary institutions. The recorded default rate of for-profit colleges is currently at 15 percent, while the rate for public colleges is at 7.2 percent. Also, private non-profit schools have the lowest rate recorded at only 4.6 percent.

The spokesman from the University of Phoenix, Chad Christian, put the blame on the bad economy, saying that colleges and universities all saw an increase in default rates as it is becoming increasingly difficult for working graduates to make ends meet. However, he also said that the University is “committed to helping our students understand and manage financial aid debt levels, and we continue to make significant investments in technology, learning and preparation to help our students succeed.”

These high numbers are disconcerting and it goes to show just how bleak the economic situation is. It’s hard enough for new graduates to establish themselves, much less to keep paying off a loan they made too early in their life.

When getting any kind of loan, student loan or home mortgage it may be, the one thing we are all nervous about is the interest rate. After all, it determines how much in total we will be paying at the end of the road. For those who were smart enough to do some due diligence before applying, you may just be rewarded with a lower interest rate. Here are 4 smart tips to get you the rate you want.

1. Take Advantage of the 30-day Credit Window – We all know that one of the things that affects our credit score is shopping for the best interest rates. As ironic as this may sound, jumping from one lender to another in the hopes of finding a good rate can actually bring your score down. However, there is a 30-day credit window for private student loans that can afford you the luxury to do just that. At the end of the 30-day window, you will appear as if you’ve only gone to one lender (whether you’ve accepted them or not). This window can help you because it allows you to have lenders calculate your potential rates and it gives you the liberty to decline them or look for a better offer.

2. Make Use of APR Reductions – With the current economic state, lenders are all vying for your money. This means they have little promotions that make the loan juicier for you. This includes reducing your APR. Commonly, there is a reduction of 0.25% APR should you choose to pay off your bills via an auto-debit function. Plus, some banks will give even more deductions if you pay off your accounts through them. They can call it double business, but you can call it opportunity.

3. Know your Index – Before, the only student loans available are those variable upon an index. Rates are attached to a certain index, and the chances of it going up or down will depend upon said index. The most commonly used are London Interbank Bank Offering Rate (LIBOR) and Prime Interest Rate. Before committing to your interest rate, check the volatility of these indexes over a 6-month or 12-month duration. If you notice that the index is swinging dramatically, so will your rate. Just recently however, fixed private student loans have become available with a rate that doesn’t change for the length of your term.

4. Bad Credit Score? Get a co-signer – And finally, if you have a bad credit score, you can opt to bring in a co-signer with a strong credit history. This could be anyone, your parents, grandparents, extended family members, and basically anybody you can find who’d agree.

Most business deals are usually made with negotiations. When a lender gives you a rate, don’t immediately settle for it. Remember, there are ways to bring it down.

Bankruptcy: Still No Relief for Student Loans

Tuesday, August 9th, 2011

The economy is still on a downfall after analysts wrongly predicted a rise in the market. Aside from affecting the stock and housing markets, the bleak economy is of course, affecting employment. This could be one of the worst situations new graduates are being faced with. Unemployment rates are now standing at a 14.5%. And to top it all off, not only will graduates be worrying about not getting a salary, but they will also be faced with a mountain of debt – student debt.

For those graduates who are trapped in the murky student loan situation, CBS News reports that filing bankruptcy won’t help any. In 2008, more than 500,000 students defaulted on their student loan payments. And unlike the past years, bankruptcy won’t even be an option for them.

It is a very real situation that graduates come out of college with as much as $100,000 in debt. This makes them feel as if they’re on a home mortgage, without even owning a house.

One graduate regrets taking on student loans without reading the fine print. She had taken two loans, a private one, and a government funded one with about the same loan amount. The government student loan had flexible terms, however the private loan came with non-negotiable and expensive repayment terms. Her government loan only costs her $160 per month now, but her private loan costs as much as $800 per month. With the growing demands of daily life plus a complicated pregnancy, she found her student debts too much to handle. She was advised to file for bankruptcy, only to find out that under the law, student loans cannot be discharged, unlike mortgages, credit debt, and even gambling debt.

This development should make students even more wary and vigilant when it comes to taking out student loans. As much as possible, it’s best to apply for a government student loan such as Stafford loans, since the terms are more negotiable and forgiving.

Colleges that Give the Highest Salaries

Thursday, July 28th, 2011

We all know that everyone who wants to get a good college education is bound to apply for a student loan. After all, not everyone has rich daddies who are willing to shell out for your education. However, the problem with student loans is that, will you be able to pay them off early on in your career or will it continue to haunt you for the rest of your days?

Although there is no clear cut answer to that question, it pays to know whether the college you’re planning to go to will actually help in making your salary higher. Although salaries will ultimately depend on the type of job, there are some institutions who would gladly pay more for a graduate from the nation’s top universities. So which ones is it?

1. Princeton University - With a starting median salary of $56,900, students can expect to pay off their loans early. Mid-career median salary is at $130,000. Princeton is located in New Jersey and the latest tuition rate as of 2010-2011 is at $36,640. Acceptance rate is at 10.1%, with national college rank of 2.

2. California Institute of Technology (Caltech) – Starting median salary is even higher than Princeton, with $69,600. Mid-career median salary is at $123,000. This university is located in Pasadena California, with the latest tuition at $36,282. National college rank is 7.

3. Harvey Mudd College – Harvey Mud College can give off a starting median salary at $64,400. Mid-career median salary is at $121,000. Tuition for 2010-2011 is currently at $40,390 and this college is located at Claremont California. It ranks 18 among the Liberal Arts.

4. Harvard University - Probably one of the most popular universities in the United States, Harvard can give a starting median salary of $54,100. A mid-career median salary would be at $116,000. Located in Cambridge Massachusetts, Harvard is at the number 1 national ranking. Acceptance rate is only at 7.5% though, and if you’re in, consider yourself as one of the lucky few.

5. Massachusetts Institute of Technology – Another one from Massachusetts, MIT can give a starting median salary of $69,700, the highest one yet. Mid-career median salary is at $115,000. 2010-2011 tuiton is at $39,212 and acceptance rate is also at a low 10.7%. National college ranking is at 7.

Having an education in these colleges can somewhat assure you of a bright future ahead. Student loans can surely be a heavy weight to bear but with salaries that can cover you within the first few years of working, loans shouldn’t be a problem. Just be sure to get accepted, and graduate of course, and you’ll be off to a good start.

July 1 will probably be the happiest day for both college graduates and parents. For all those who are eligible, federal student loans will be changing their interest rates, and dropping it to an all time low.

Now is the time for student loan consolidation because former students who are in the process of repaying their variable rate federal loans will be able to get a low rate of 2.50%. Aside from that, the interest rates for graduates in the grace period is 2.00%. Parents who have also taken PLUS loans are allowed to consolidate at only 3.38%

These rates are new, and these rates are low. But of course there will be some limitations. Students who have already consolidated their loans will not be able to do so again at this lower rate. These rates are only valid for loans that were taken before July 1, 2006. And finally, borrowers who are still in school do not qualify for the consolidation.

Aside from these low new rates, the federal government is even adding more reasons for students to breathe a sigh of relief.

New Student Loan Rates
- Stafford student loans is taking on a new rate of 5.6% if the first disbursement is obtained from July 1,2009 to June 30, 2010.

Income-based repayment - When a graduate is not earning enough to cover monthly payments, he can apply for an income based repayment. In this case, the lender can lengthen the loan term plus lower the payments to only 15% of your income.

Student loan forgiveness
- This will probably be the best incentive yet. Students who work for the government or for non-profit companies will be able to qualify for student loan pardon. After 120 payments (which amounts to ten years), the government will eliminate any loan balance.

These new developments could just be the savings grace of students whose loans are too heavy to bear. It’s a refreshing thing to see the government actively taking part in releasing the burden of student loans, and making the load lighter for the new workforce.

Student Loans: How Much Is Too Much?

Monday, July 11th, 2011

According to financial guru, Robert Kiyosaki, debts that don’t earn you money are considered as liabilities. Now what about student loans? Obviously, these loans are made so that students can graduate with a degree, get a stable job with benefits, and earn good money. So in a way, student loans shouldn’t be a liability right?

The problem now is, what if your student loan is bigger than your yearly salary? Then you’ll have to end up paying for your student loan long after you graduate. A liability? Sure sounds like it. This is where the question of “how much is too much?” comes into play.

There are definitely instances when both students and parents are careless when taking up student loans. The belief goes like this: “As long as the student can go to a good college, he will be able to pay off the loan anyway when he gets that good job.” The problem with this belief is, there’s a lot left to speculation. So how can we ensure that the loan amount we get can be realistically paid off within the first few years on the job?

Well, there’s really no insurance. But there is a recommended amount that your student loan would be better off not exceeding. reports that the average student loan in 2008 was $23,000. Aside from that, Sallie Mae also reports that students usually have a credit card debt of about $4,000. That amounts to $27,000 which most students cannot earn during their first year of working.

It’s advised not to go over the maximum amount permitted under the Stafford loan program, which incidentally is also $27,000. Also, it’s best to remember that if there really is no need to take on a loan that goes up to the maximum, it’s much better not to.

The Stafford loan breakdown is as follows:

- $5,500 for the first year
- $6,500 for the second year
- $7,500 each for the third and fourth year

If you can take on a loan that is less than that, then, the better. It is also advised that the amount of student loan taken should not exceed the projected salary of the student during his first year of working. Now that the figures have been laid on the table, it’s easier to realize whether that less expensive school would be a better option. Although expensive education can give more quality, it also pays to be realistic.

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