Student Loan Consolidation Hot Topics

Attention Class of 2005! If you have Federal Stafford loans, your 6 month grace period will be expiring soon. This is your last chance to fix your loans at the lowest rate possible! You should receive (or may have received) a notice from your loan servicer(s) letting you know that your grace period is set to expire.

If you didn’t already know, the interest rate on a Stafford loan is 0.6 % lower if you consolidate before repayment period begins. This means that if you consolidate your loans before your grace period expires, your interest rate will be fixed at the lower rate. This 0.6 %may not seem like much now, but over repayment, it can add up to hundreds, even thousands of dollars in savings’. Please call now to take advantage of your grace period, and get started on your consolidation. Remember it is your Federal benefit and it’s free!

Thank you,

Customer Service
The Student Loan Network Team
877.328.1565
customerservice@studentloan.net

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Brand new laptop for your first year of college … $1,200.00
Books, supplies, and trendy decor for your dorm room … $800.00
Downloading class lectures to your iPod because you overslept … Priceless

With amazing advances in the portability of digital media, anything seems possible these days. Apple has changed the way people listen to music, get their news, watch their favorite TV shows, and now, listen to college lectures. Stanford University and Apple have collaborated on a new way for students and others to download and listen to class lectures, student information, and campus activities. While Alumni will have a website designated just for their use, Stanford will provide free lectures, music, sports and other content to the general public via iTunes.

Other universities that offer course material and lectures on iTunes include Duke and Brown Universities and the University of Michigan at Ann Arbor’s dental school. Not only does this help the students who attend these universities, it gives the general public a slice of knowledge from Americas premier Colleges and Universities. The program has been very popular so far, and I have a strong feeling that other schools will soon follow suite. In my opinion, I think this is a wonderful trend and a great direction to head towards. It’s refreshing to see innovative ideas and technology come together to provide a free useful service to the public.

Not ready for lectures from Stanford just yet? Then tune into the best mix of student news, music, and free money (in the form of scholarships) that you won’t find anywhere on the dial or the boob tube! You’ll only find it on FinancialAidPodcast.com - The Financial Aid Podcast.

Every day we feature breaking news, music, and new ways to help you get the most out of your hard earned cash, however little or much there is. Subscribing is free and easy, simply click on the link below:

www.FinancialAidPodcast.com

On a recent post, I talked briefly about the proposed legislation that could ultimately change Federal financial aid. Originally, the budget reconciliation approved by congress aimed at shrinking our deficit, was set at 35 billion dollars of mandatory federal spending. Essentially, the eight committees that were charged with this task had to cut 35 billion in Federal spending from areas such as education, labor, and health. The House and Senate committees responsible for determining legislation that affects education - the Senate Committee on Health, Education, Labor and Pensions, and the House Education Workforce Committee will draft their proposed spending cuts and attach them to the remaining committees. Though it seems they have their work cut out for them - having been directed to cut more then 1/3 of the requested 35 billion dollars.

But apparently 35 billion just isn’t enough…

Today, the house will vote on legislation that could bring the previous mandatory spending cut of 35 billion, up to nearly 50 billion. So committees now must attempt to stretch their already thin proposed spending budgets even further. Nearly 12.6 billion dollars was slated to be cut from Federal Financial aid programs and worker pension benefits. If the house votes in favor of increasing the cut to 50 billion dollars, the 12.6 billion dollar goal has to somehow magically turn into 17.5 billion - A task many lawmakers find nearly impossible considering the committee is having difficulties determining how to cut 12.6 billion in potential spending.

The good news?

Potential increase for the Federal grant programs…somewhere in the neighborhood of 3 billion.

Be sure to post your comments or call the Student Loan People toll free at (877) 328-1565.

Well, it’s almost gone. If you finished taking classes in May or June, then soon your student loans will be in repayment, and your interest rate will increase from 4.7% to 5.3 %. Doesn’t sound like a big difference…? If you have $30,000 in student loans, at today’s grace period rate of 4.7%, after consolidation you would only pay about $190/month. If you let your grace period expire, you will end up paying about $323/month at 5.3%. That’s an extra $1,596 per year!

As I mentioned before, if you’re considering or even researching consolidation, now is the time to take the first step. Not only will you receive a lower fixed interest rate, but additional savings just for making your payments on time. Also, eliminate the hassle of digging through your loan statements and figuring out which lender has which loan - The loan counselors at StudentLoanConsolidator.com will do all the work for you. They can research your federal loans, quote your savings, put together an application, and have it mailed out to you in a few days.

If your running short on time, and can’t wait for the mailed application to reach you, apply online at StudentLoanConsolidator.com/apply and use our E-signature feature, or call toll free 877.328.1565, and apply over the phone. Take advantage of your grace period, and consolidate your loans right away!

One of the biggest stories buzzing through the wires these past few months is the possible amendment of the Higher Education Act of 1965. After House Resolution 609 (HR 609) made it through committee in July, a major shift in financial aid is now becoming a possibility. While the proposed legislation is designed to help students, many feel that some of the key changes could make going to college and paying back loans even more expensive.

Some of the headline changes include a larger Pell Grant program offered year round, fixed interest rates on federal Stafford loans, and removal of the loan origination fee. Additional changes/penalties proposed could have a negative impact on federal loan consolidation.

Students all over the country have been voicing their opinions about the proposed legislative changes. From protesting to petitions, students have been doing their best to stir the pot and spread awareness. The majority feel that HR 609 has been structured specifically to cut the Federal budget, not help students save money. The Bill would ultimately save $35 billion through the implementation of fixed interest rates. But where is the savings for students you ask? Wasn’t this bill designed as a measure to help students save money?

Jasmine Harris, legislative director of the United States Student Association, expressed that the changes could cost students up to $5,800 more during loan repayment. Another revision of the House bill would eliminate students’ ability to consolidate their loans while in school, an option that currently enables students to save hundreds of dollars during their repayment, Harris said.

Will HR 609 effect your tuition cost or loan repayment? Post your comments or questions on my blog or call StudentLoanConsolidator.com at 877.328.1565 and talk with one of our financial aid counselors.

Student debt has been at an all time high for the past 5 years, it has risen 60% since 2000. With the rising cost of tuition, students are taking on more and more debt each year, hoping for high paying jobs upon graduation. Coupled with the increasing federal interest rates, students and graduates are finding it difficult to secure salary levels high enough to cover student loan repayment and the cost of living.

I know… I sound a bit negative today.

But I feel strongly that many students and graduates can help their current situation if they had a better understanding of their available options. As students and graduates in debt, we may not be able to control the Federal interest rate or the cost of tuition, but we do have choices and options available to help ease the pressure from loan repayment.

The first option graduating students and post grads should look into is consolidation. With Federal interest rates forecasted to rise yet again this July, consolidating your loans and locking a lower interest rate is the first step towards becoming financially stable post graduation. Because in recent years tuition has been higher, students are faced with more diverse loan portfolios - several loans with multiple lenders. Once graduation comes, with the complexities of looking for employment or getting settled in a new area, the last thing you need to worry about is writing checks to multiple lenders for different amounts. Consolidation creates 1 payment to 1 lender. Not to mention that having that 1 payment deducted from your checking account not only makes paying on time easy, it also reduces your interest rate by as much as .25%. Best of all, keep making your payments on time for 36 months, and your interest rate will be reduced by another 1%.

In addition to consolidating, if making the scheduled loan payments becomes too difficult, under the Federal Family Education Loan Program (FFELP) - deferment and forbearance options are available for varying circumstances. Though keep in mind that deferment/forbearance does not lock in your interest rates. While your loans are deferred, they continue to have variable interest rates unless you are deferring a consolidated loan (which has a fixed interest rate).

Here are some helpful links for consolidation and deferment/forbearance information.

http://www.studentloanconsolidator.com/consolidation/- Consolidation info
http://www.studentloanconsolidator.com/repayment/deferment.shtml - Deferment info

Thanks to all who are reading, more helpful information on the way!

I noticed today on my way to work that the air was getting chilly and the leaves were turning orange. Summer is gone, fall is here and as we approach the holiday season, something else will disappear too - your student loan Grace period!

If you weren’t previously aware, during your grace period, your Federal student loans remain at 4.7% without mandatory repayment. Once that six month period ends, the interest rate jumps up to 5.3% and repayment begins. If you graduated this past spring, add six months to the day you stopped taking classes and that’s when your grace period ends, interest increases, and repayment begins. My advice for anyone who is tossing the consolidation question around – Get started right away! Because consolidation takes several months, you shouldn’t wait until your grace period has completely expired. Leave yourself a 4 or 5 week window to get all of your questions answered, and the application filled out and submitted.

Questions about how much you can save by consolidating during your grace period? Not sure when your graduation date was? Let our loan counselors at StudentLoanConsolidator.com help you find the right answers. Calls us toll free: 877.328.1565

Finding the right consolidation company can prove to be a difficult and confusing process. Lets face it, there are a lot of companies who offer Loan consolidation; and with so many companies on the internet sending emails and promos, which one should you choose? For all those students and parents shopping around for the right company to consolidate their loans, I would like to share some helpful pointers that might speed up the process and relieve the stress headaches!

Where should you begin?

When consolidating Federal student loans, make sure to choose a company that offers Federal loan consolidation; not private consolidation. This type of consolidation falls under the Federal Family Education Loan Program (FFELP) essentially, the same program that your loans originated from. It will be listed at the top of the application, in the left hand corner. If it’s not listed on the companies website, try calling the toll free number and speaking with one of their loan counselors.

Make sure to read the fine print!

Under FFELP guidelines, all federal consolidations receive the same interest rate; there are NO exceptions.

Here is a break down of those interest rates:

Grace period (0-6 months after graduation/withdrawal): 4.7%
Repayment (loans take out after July 1st 1998): 5.3%
Repayment (loans take out before July 1st 1998): 6.1%
Perkins Loan: 5%
Parent Plus Loan: 6.1%

You might notice lower interest rates listed on certain advertisements and websites. These lower rates include reductions received from borrower benefits programs.

Borrower Benefits - where the savings begins:

While all companies who work under the FFELP program have to offer the same interest rates, they can offer different borrower benefits. These programs might include a rate reduction of .25% for enrollment in automatic checking account withdrawal, and an additional 1% reduction for on time payments. Make sure that your loan portfolio qualifies for the benefits being advertised - some companies have loan balance requirements. For example, the offer in question might say interest rates as low as 2.75%. However, that low rate (grace period rate of 4.7% with future on time rate reductions) might only be for borrowers with loan balances of $40,000 or greater. If you are not in your grace period, and have less then the required amount for the benefit, your fixed interest rate will be higher then advertised. There is nothing wrong with companies offering their benefits in such a manner, just be sure to read the offer in detail, and make sure it applies to you.

Do your homework, and ask lots of questions!

Contact the company. If its not clear what interest rates or benefits you can receive, call the companies toll free number and speak with one of their loan counselors. They should be able to look up your loans and calculate what your new interest rate will be. Also, by speaking with someone on the phone, it will give you a better feel for the company. Try writing down any questions you have before the call is made, this is your opportunity to gauge how well the company knows their info.

More pointers coming soon!

Welcome to the inaugural edition of the Student Loan Consolidation Hot Topics Blog, a publication of the Student Loan Network. Unlike a lot of the blogs out there on consolidation which are nothing more than blogspam (blam?) or link farms, we’re going to try to publish actual, real, useful information in our blog, so that you can stay up to date with the latest information from the Student Loan Network to help you make real, educated financial decisions about your student loans.

Subscribing to our blog is even easier! We have so many ways. You can subscribe via email, RSS, My Yahoo, Bloglines, and more!

We’ll also be teaming up with the Financial Aid Podcast, so you’ll always have access to all the latest education finance information at your fingertips.

Welcome aboard!