Student Loan Consolidation Hot Topics

The US House of Representatives voted last Wednesday to cut the interest rate on future federal student loans. The bill will gradually reduce interest rates for only federally subsidized loans. If this bill is passed by both the House and the Senate, interest rates on the subsidized Stafford Loan will be cut beginning this July. These rate cuts will be phased in over the course of five years. So, this year, the interest rate will be cut from 6.8 percent to 6.12 percent. This cut will help lower the monthly cost of repaying student loans for millions of low-income students.

The bill currently awaits Senate and presidential approval.

The Student Loan Network: Stafford Federal Student Loans, Parent PLUS Loans, Student Loan Consolidation, Private Student Loans, Education Loans/College Loans

The Student Loan Network offers four ways to repay your student loan debt. Each one fits a slightly different financial situation, so you need to think seriously about what you can afford when you pick a repayment plan. It is our job at the Student Loan Network to ease your nerves as well as your pocketbook when thinking about making those student loan payments. Listed below are the details on the following plans that are available once you consolidate your loans through the Student Loan Network.

The Standard Repayment Plan is when the borrower pays the same amount each month for the life of the loan. This is your best option for paying the least amount of interest back. Your loans are initially set up for a Level Repayment Plan. It is recommended that you continue with the Level Repayment Plan if you’re able to make your monthly payments. Again, this is because it is the lease expensive plan in the long run.

Another Repayment Plan is a Graduated Plan. The Graduate Plan offers a lower, more affordable monthly payment in the early months of repayment and higher payments later in the repayment term. Your loan is repaid in the same time frame as the Standard Plan. It is the total interest costs that are slightly higher than the Standard Repayment plan.

The Income Sensitive Plan is when the monthly payment amount is adjusted annually, based on the borrowers expected total monthly gross income from employment and other sources during the course of repayment. This is the most flexible plan, but it can be the most expensive in the long run, and you must reapply annually.

There may be times when you have some difficulty making your monthly loan payments. If you find yourself in this situation, you may be eligible for a student loan deferment or student loan forbearance. Deferments and forbearances are for those times when you run into short-term financial difficulties. For more information on this please contact your lender or the Student Loan Network.

The Student Loan Network: Stafford Federal Student Loans, Parent PLUS Loans, Student Loan Consolidation, Private Student Loans, Education Loans/College Loans

Finally, the drinking is done and hopefully the hangover has worn off. It’s decision time. How do you plan to overhaul your life in 2007? Will you change the way you work or what you do in your free time? How much you spend or will you start to save? Or have you made any vows of a more offbeat nature?

2007 for me is the year to:

Manage my debt

Save money for my Barbie townhouse

Stick to one hair color

Gain new job responsibilities

To post your New Year’s Resolution’s click here

Happy New Year everyone!

Anytime the federal government and money are involved it is bound to be confusing and frustrating. The federal government is always changing the rules and regulations for federal aid creating new loopholes and issues for the student loan industry.

For example, a recent change in legislation does not allow students to consolidate while they are enrolled at least half time or above in school. To consolidate a student has to be out of school or carrying an academic workload of less than part time.

I personally think this rule is ridiculous. I get many requests from borrowers wanting to consolidate their loans because they need to improve their credit score to receive a better rate on a home mortgage or a car loan. Its true-consolidating improves your credit! Every year you attend school and borrow a student loan you create an open line of credit on your credit report. Consolidating your loans into one open balance really gives a boost to your credit score. When a computer calculates your credit score, it will see this: eight loans paid in full. You will look like a responsible and trustworthy borrower. Why does the federal government care that a student wants to make this smart financial step?

You can write to me about it. Not much I can do except agree with you. I suggest you write to Congress to complain about this ridiculous rule.

Yes - someone actually emailed me today and asked me “what’s all the fuss about” I assumed they were inquiring about student loan consolidation, as they emailed from one of our consolidation sites. So I decided to answer their question in plain view of all my faithful readers.

I guess this question can be answered relatively easily - the fuss is about saving cash. In this case, the word fuss and buzz are nearly interchangeable (I like to put a positive spin on things). Depending on the time of year, and proximity to graduation, the fuss/buzz can involve getting a consolidation application submitted on time in order to:

* Get a lower interest rate (July 1st, interest rate adjustments)

* Save an additional .6% for grace-period consolidations (consolidating within 6 months of graduating)

* Lower your monthly payment

* Instill piece-of-mind that you’re on your way to becoming financially savvy (my favorite)

If you think back to when you first began discussing college, the fuss/buzz was about being able to pay for tuition. Whether or not you or your parents filled out the FAFSA or loan applications, conversations were held about which schools were affordable, how much aid your selected schools provided and the overall cost of your education. Now that school is over and your student loans are in repayment, a new conversation rears its ugly face… “How do I make these monthly payments???”

If taking out student loans was a good choice to help fund your education, consolidating those loans into one lower monthly payment should be your next logically good choice. Give yourself a chance to find a decent paying job, secure an affordable place to live, or travel around the planet - whichever choice you end up making, consolidating your loans will eliminate a great deal of the post-grad financial burden.

Once you’ve become financially established, you can afford to make bigger monthly payments - which will significantly shorten your term of repayment saving you even more money.

So the “fuss” as described above is simply about getting your post-grad finances squared away and saving some extra money. Stay tuned for other tips on post-grad life.

StudentLoanConsolidator.com StudentATM.com Gradloans.com ActEducationLoans.com FinancialAidPodcast.com

I just got off the phone with a Dad who is very upset with his daughter’s last minute decision to change school’s next semester. Currently, his daughter is attending a local state college but would like to go out of state to a more expensive private university. Her reason is because she believes the private school will provide her with a higher quality of education which will offer job opportunities lucrative enough to offset the cost. Dad was unhappy with her decision because at the state school she had received a generous financial aid package where at the private university the financial aid package was not nearly as attractive. His question to me was if cost is an indicator of the quality of education.

In my profession I always have a definitive answer but for this question I felt there is no simple solution. My advice to Dad was that his daughter needs to go to the school that she thinks is the best college for her. It needs to be a balance of receiving a great education and the opportunity to be really happy. Attending a school just because it is affordable makes no sense if you are going to be miserable. College should be fun. On the other hand, it makes no sense to pay a ton of money to go to some swanky private school if you can go to a school that’s cheaper and just as good.