Aug/100
Repairing Student Loans Market
The economy in 2008 was the stuff of a good Stephen King novel – scary stuff. As 2009 begins, prioritizing what to fix first is a task for an incoming President who must wonder what he got himself into. One area that should be at the top of the list is the student loan market.
The facts are fairly simple. If you want to get into higher education these days, you are probably going to need student loans. Yes, a few of us will have parents who can foot all or part of the cost, but the vast majority of us are going to borrow, borrow and borrow some more. The only problem is finding someone to borrow from in 2009 is going to be difficult.
Student loans are often viewed as a form of government funding. There are government backed loans, but the majority of student loans are actually private. This means the lenders are part of the financial markets in general and, as we know, those markets are a huge mess. The who, what and why of the financial meltdown are subjects for another article. The key thing to understand is the credit crunch effecting mortgages, credit cards, auto loans and so on are also affecting the availability of student loans.
With so much going wrong, why should our new leadership make sure the student loan market gets a lot of focus? The answer is simple. The reason America is strong as a country is because we have a strong middle class. Homeownership is often touted as the reason the middle class is stable and it is part of the answer. A large secondary answer, however, is the generally high level of education of most Americans.
Having lived in many other countries, I can tell you that the idea of millions of people going to college is a rare one. One of the immediate differences you notice between “us and them” is a large percentage of our population goes to college in one form or another. Besides creating a viable market for fraternity movies, this high education level provides our economy with people who start businesses or highly qualified people who work for companies. It is this educated, mobile workforce that is the real basis of the stability found in our middle class and student loans pay for that education.
Student loans are a vital link in the continued existence of a strong middle class in this country. Yes, banks need help. Yes, the housing market needs help. It is educated people, however, that are our strongest assets and we better not forget that. If we do, no amount of corporate handouts is going to save us in the long run.
Aug/100
Popular Student Loans
What is the most popular type of student loan now? The Stafford loan. More than 90% of all money borrowed for college fall under the category of a Stafford loan. This loan was first started to help low income families be able to send their children to college. The perimeters for the loan were not overly confined when the program was instituted in 1965. Since them the perimeters have expanded to the point that this loan type is one of the Federal Education Loan Program options for many.
The two different classes of Stafford loan, unsubsidized and subsidized, helped to extend its perimeters greatly since its inception.
With a subsidized loan students do not begin repayment until the student completes his education. For all students maintaining at least a half time course schedule the government will pay all interest that accumulates on the loan. The interest payments do not become the responsibility of the student until after he completes his education.
Families who desire this type of loan must first visit fafsa.ed.gov to complete a Free Application for Federal Student Aid (FAFSA). The FAFSA application will contain information to determine what the family’s financial status is. Subsidized federal loans are granted only to families with financial limits.
These limits are not as great as you may think. Almost 10% of the Stafford loans granted were given to families who earnings were in 6 figures. However, for the most part Stafford loans are reserved for low income families. The large majority of these loans are granted to families whose income is less than $50,000 a year. As was mentioned earlier the perimeters are broad, but the loan program does benefit the needy.
However, the perimeters do exist and not everyone will qualify. For students that cannot qualify for a subsidized loan an unsubsidized loan is an option. The Stafford loan that is unsubsidized means that you are still able to defer payments until six months after completely your education. However, during all of that time interest will accumulate and compound on the principal of the loan.
It is difficult to illustrate how much interest will compound over the life of an unsubsidized Stafford loan. To know how much your loan will cost go to bankrate.com/brm/mortgage-calculator.asp. and fill in your loan terms to see exactly how much interest you will be required to pay.
For the average student, there is a need to borrow between $10,000 and $20,000 to fund their education and these funds are generally obtained through a combination of loan types and programs.
Aug/101
Student Loans Consolidation Program
Student loan consolidation program for university and college students is an important option, especially if they find themselves suffering from serious financial situation. Definitely a student with a lot of college debts staring his face can become stressed with such heavy financial load. The good news is that there are a great number of options when it comes to college loan consolidation, and it is certainly not difficult to apply for one as people might think.
And so if you are in great need for student loan consolidation program, you only have to work hard into finding the best lender that can provide you with the appropriate program. Needless to say, the process is a serious and meticulous one. You must not rush the process of gaining consolidation for your loans as haphazard application can spell doom. It is best to heed some simple but helpful advice before you go to the bank, financial group or lending company for your student debt consolidation loan.
First, you must check your current credit rating. Credit score is an important factor that you have to put into consideration when applying for consolidation program. Better score means lower rates of interest. You are certainly afforded much more attractive student loan consolidation program options if you boast of a decent score.
If you possess both private and government loans, it can be advantageous if you are able to consolidate your federal loans ahead of the private ones. Definitely, consolidating your federal debts separately is beneficial as interest rates on government loans are lower.
You can also make good use of the online consolidation calculator, which can actually provide borrowers with a clear idea on how one may be able to benefit from student loan consolidation program.