Posts Tagged ‘college loans’
Posted by admin on August 3rd, 2009
As new and returning college students gear up for the school year about to get underway, NextStudent Inc., one of the country’s longtime premier sources for college financing, has unveiled a new look to its website, www.nextstudent.com, with easier than ever one-stop access to a wide array of education financing options and information.
Since the spread of the post-subprime credit freeze into the student loan marketplace a year ago, non-government channels of student loan financing have shrunk to few and far between. Credit-based private student loans — which families have often relied upon to supplement their federal financial aid — have become especially difficult to come by, as several lenders of private student loans have gone out of business. The few lenders that remain have restricted their qualifying criteria to borrowers with superior credit or stopped offering private student loans altogether.
Even federal student loans, however, can be hard to find for those students whose schools have not yet transferred over to the Department of Education’s Federal Direct Loan Program but remain in the government-subsidized Federal Family Education Loan Program. Students enrolled at a FFELP school must obtain their federal college loans through a bank, state agency, or other third-party lender rather than directly from the government.
NextStudent, however, offers a simple online solution for those students and their families trying to find available student loans and other viable financial aid options.
The NextStudent website offers one-stop access to a network of multiple student loan providers. With just one click, students and parents can access a portal that allows them to compare dozens of student loans from various lenders and shop for the financing option that best fits the family budget. This portal puts students directly in contact with available lenders and allows students and parents to apply for student loans right then and there via these lenders’ online applications.
Courtesy of Marketwire.com
Posted by admin on June 26th, 2009
The Obama administration took dead aim yesterday at one of the biggest headaches faced by college students and their families — how to fill out what has become a lengthy and complicated application for financial aid.
Education Secretary Arne Duncan outlined a series of changes that could allow some applicants to skip many of the 153 questions.
“Too many students who qualified found applying for student loans was too difficult to understand,” Duncan said. “Too often, they simply got frustrated and they gave up. The form itself was liter-
ally a barrier to entry in college. That has to change.
“Next year’s applicants should see a 20 percent reduction in the number of questions and a 50 percent reduction in the number of Web pages to navigate,” Duncan said.
He also asked Congress to adopt a sweeping overhaul aimed at making the form easier to fill out, including allowing families to attach their tax returns from the Internal Revenue Service to the application. Currently, families have to include separate investment and banking records.
As tuition soars, financial assistance is crucial to keeping students in college. Of the 60,000 students at Ohio State University and its regional campuses, more than 32,000 receive financial aid.
The reforms are aimed at the Free Application for Federal Student Aid, known as FAFSA. The six-page application is so complex that last year former Education Secretary Margaret Spellings jokingly complained, “It asks you how old you are three different ways.”
In the final months of the Bush administration, Spellings asked Congress to reduce the number of questions in the form to just 27. Congress never acted on that.
“It’s a good step,” said Tally Hart, senior adviser for economic access at Ohio State. “That form is really a deterrent in its existing structure because it looks so intimidating. and the problem is the greatest for the people it should serve the most.”
Educators and financial-aid specialists hailed the move, saying it eventually could lead to more students applying for financial aid.
“Could the department have gone further? Yes,” said Terry Hartle, senior vice president of the American Council on Education, which represents the nation’s universities. “Some people think you should get them on a postcard. But the fewer the questions, the less accuracy you have. What the department is trying to do is balance the importance of simplification with accuracy.”
Beginning this summer, students who have reached the age of 24 or are married may skip 11 questions dealing with their parents’ financial history. Men older than 26 will not have to answer the question about Selective Service registration. And when the new forms are made available in January, low-income students will not be asked about assets.
In another effort to simplify federal assistance, the Education Department has been giving students instant estimates of Pell Grant and student-loan eligibility since May.
Columbus Dispatch
Posted by admin on June 22nd, 2009
Low-income students and recent college graduates may reap dramatic gains beginning July 1 as a result of far-reaching changes in financial aid grant and loan programs.
While some of the gains – such as a significant hike in Pell Grants – have received attention, others that affect interest rates and student loan repayment schedules are just getting on the radar screens of policymakers and students. One of the most significant changes is the introduction of income-based repayment, through which students can reduce their monthly payments based on their earnings – a move of particular help to graduates in low-paying public service jobs.
“We estimate hundreds of thousands will take advantage of this,” said Edie Irons, spokeswoman for the Project on Student Debt in Berkeley, Calif. “But it’s not automatic. You have to apply for this.”
Students seeking income-based repayment must contact their lenders. But the switch should be easy to make, said Mark Kantrowitz, publisher of FinAid.org, a web site focused on the federal financial aid system. “If you’re in a public service job, it’s best to start sooner rather than later,” he told Diverse.
The U.S. Education Department has published a detailed chart of how income-based repayment, or IBR for short, may affect certain borrowers. For example, a single person earning $20,000 a year would face a monthly repayment of only $47. Adjustments may occur each year based on earnings and debt. (The chart is at http://studentaid.ed.gov/PORTALSWebApp/students/english/IBRPlan.jsp#content).
“The main goal of IBR is to make sure that your student loan repayment doesn’t ruin you financially,” Irons told Diverse.
Another major change involves consolidation loans. Borrowers with variable-rate loans before July 2006 could convert to consolidation loans with interest rates as low as 2 percent, Kantrowitz said. Such changes apply to those with variable Stafford or PLUS loans.
“It’s extremely unlikely that interest rates will ever get lower,” he said. With interest rates starting to rise again, the next adjustment in 2010 is likely to carry a higher rate.
Here is a look at other financial aid changes taking place next month:
* Pell Grants: The maximum grant for needy students will increase from $4,731 to $5,350 – a jump of more than $500. Legislation approved by Congress also will allow for year-round grants to students seeking to accelerate their education. The minimum Pell Grant will increase from $400 to an annual rate equal to 10 percent of the maximum grant.
* New student loans: New fixed-rate Stafford Loans will see their interest rate drop from 6 percent to 5.6 percent. Origination fees on Stafford Loans also will drop by half-a-percentage point.
* Part-time students: Students enrolled at least half time will get access to the Academic Competitiveness and SMART Grant programs, which provide additional aid to Pell-eligible students who have completed a rigorous high school program.
Posted by admin on March 24th, 2009
Changes to federal student loan policy will affect more students than ever as the financial crisis brings them in growing numbers to loan office doors.
“We just have a sense that there will be more than in past years,” said Tom Melecki, director of the Office of Student Financial Services. “That’s based on the fact that we have had a steady stream of new students saying, ‘Gosh, you know my family’s been negatively impacted by the economy, how do I go about applying?’”
This year, federal PLUS loans — which parents borrow to cover undergraduate education costs — will be administered by only two banks per state. Banks placing the two most competitive bids in a statewide auction will get exclusive rights to administer the loans.
Congress voted for the auction system in 2007 to drive down the projected cost of federal subsidies and simplify the loan process.
Melecki said the system may not be completed in time to award PLUS loans for the 2009-2010 school year and that the UT student financial services office was hoping to notify students about their financial aid by April.
“Since the U.S. Department of Education has not yet conducted that PLUS loan auction, any parent borrower who has not yet borrowed a PLUS loan — we have to send them a message and say as soon as the DOE tells us who wins the auction rights, we’ll let you know,” Melecki said. “Until then, we can’t take steps.”
Congress has imposed a July 1 deadline for completing the auction. The FAFSA priority deadline is March 31.
During the 2007-2008 fiscal year, 3,644 UT students’ parents borrowed $44,267,358 in PLUS loans, Melecki said.
President Barack Obama’s budget includes another change in the student loan process: Whereas in previous years private banks administered student loans that were in turn guaranteed by the federal government, the current administration hopes to eliminate the intermediary and administer loans directly to students.
Melecki said that, while this is a drastic change for banks, loan and repayment procedures for students will remain the same.
“I don’t think it’ll have much effect on our students, because the terms and conditions on the loans are virtually identical between the federal direct loan program and the Federal Family Education Loan Program,” Melecki said.
Melecki said the government’s plan to remove private banks from student lending may discourage banks from bidding on PLUS loan contracts since they would likely only administer loans for a year.
Loan giant Sallie Mae, which awards 40 percent of federal PLUS loans, announced last week that it would not participate in the auction. Sallie Mae’s exit may deter smaller lenders from participating in the auction as well.
“It’s one thing to bid in the PLUS auction if you can do it for five, six, seven years,” Melecki said. “It’s totally different if you can only do it for one.”
Provided by: Daily Texas
Posted by admin on March 24th, 2009
Sallie Mae, the nation’s leading saving- and paying-for-college company, today announced a new private loan that enables students to save money, build good credit, and repay their student loan debt faster. With the new Smart Option Student Loan, a typical customer would pay off the balance nine years sooner and would save an estimated 40 percent of the total amount paid, including principal and interest, compared to most other private student loan alternatives.
Students may apply for the Smart Option Student Loan beginning today. Under the new program, customers will make interest-only payments while in school, so students avoid negative amortization and graduate with substantially less student loan debt. A freshman borrowing the average loan size of $7,700 would cut the payment time in half and save approximately $8,700, compared to most other private student loan alternatives.
Sallie Mae recommends private student loans for families who have exhausted their eligibility for free or less-expensive funds such as scholarships, grants and federal student loans. The company continues to offer federal student loans, which allow students to defer interest payments while in school, to every eligible student at every school in the United States through the 2009-2010 academic year. Terms of previously disbursed private loans remain unchanged.
“Today’s students are financially savvy and looking for affordable, responsible options to help with their investment in higher education,” said Jack Hewes, senior executive vice president and chief lending officer, Sallie Mae. “We have tried to design this loan to be sensitive to the needs of students who not only rely on this financing to get to college, but also want a more manageable level of debt as they transition from school to work. Paying a little while in school guarantees that students will save a lot later.”
Sallie Mae’s Smart Option Student Loan encourages responsible borrowing by functioning like other monthly obligations, such as cell phones and cable TV. The interest-only monthly payments required while in school, coupled with regular financial literacy communications, will help students develop good repayment habits, improve their credit scores, and help make loan payments after graduation more manageable. Reactions from college financial aid officers were favorable and confirmed the need to help students borrow responsibly.
The Smart Option Student Loan’s repayment term will range between five and 15 years, depending on the student’s cumulative Sallie Mae-serviced private student loan balance and academic grade level. Interest rates will be variable based on LIBOR. Those who apply for a Smart Option Student Loan with a creditworthy cosigner will increase the probability of approval and a lower interest rate. Interest rate reductions may also be available for customers who elect to make payments via automatic debit and receive communications via email. To prevent students from borrowing more than their budgets can handle, the approval process will include a review of monthly income and other debt payments.
Students and families considering a Smart Option Student Loan are encouraged to use Sallie Mae’s Education Investment Planner to estimate the total cost of a college degree, build a comprehensive plan to pay for college, and estimate the salary a graduate would need to keep repayment of student loans manageable. Visit www.SallieMae.com/plan for more information.
Provided by Maketwatch.com
Posted by admin on March 20th, 2009
The Student Loan Corporation (SLC) reiterated today its commitment to the Federal Family Education Loan (FFEL) Program and to its mission of providing schools, students, and families with affordable, reliable access to higher education.
SLC reaffirmed its dedication in light of the Administration’s recently released fiscal year 2010 budget outline. The outline includes a proposal to provide federal student loans solely through the government’s Direct Lending Program as early as July 2010. Congress will debate this proposal in the coming weeks to define the scope of any legislation pertaining to how federal student loans are provided in the U.S.
“Although we share the Administration’s desire to make education financing more affordable and accessible to students and their families, schools and borrowers will not enjoy the many critical benefits of competition without private sector involvement in student loan lending,” said Michael Reardon, Chairman, President and CEO of SLC. “In addition, eliminating the FFEL Program would limit choice for students and families, and would be less efficient and more costly to taxpayers at a time when the nation is experiencing severe economic stress.”
For over 40 years, the FFEL Program participants, including SLC, have provided schools, students and families with a choice of lenders as well as innovative products and services, such as easy-to-use online applications, tools and resources; financial literacy programs; default prevention services; and a variety of incentives to lower consumers’ total borrowing costs. And when it comes to efficient service, competition has driven enhanced levels of customer satisfaction, as a result of responsiveness, personal attention and on-campus support. These attributes have led 73% of higher education institutions to choose the FFEL Program over the government’s Direct Lending Program. For more information on this topic, please go to www.faaonline.com.
Mr. Reardon concluded, “We continue to engage in active dialogue with government leaders to support a federal loan program that leverages the best characteristics of the public and private sectors. We look forward to continuing to work closely with government officials and the higher education community in shaping the future of student lending.”
SLC has been dedicated to providing essential education financing to schools across the country for over 50 years. The Company continues to provide both federal and private student loans to schools nationwide, originating $5.7 billion in FFEL Program loans and $1.8 billion in private CitiAssist® Loans in 2008.
Posted by admin on October 13th, 2008
KeyBank will no longer offer private loans for students because of the long-term unstable credit market.
Existing loans from KeyBank will still be honored through the rest of this and the Spring 2009 semesters. After Oct. 31, KeyBank will stop taking applications for private student loans.
Students usually apply for private student loans when they cannot get more money from federal loans.
Mark Evans, student financial aid director, said about 2,000 to 3,000 Kent State families have private student loans. Ninety-five percent of those families get them from KeyBank, CitiBank or Sallie Mae. Kent State works with these banks to provide private student loans.
“Over the years, the cost of going to college has increased,” Evans said. “More students and their families turn to private loan programs to gain access to additional funding.”
Laura Mimura, vice president of marketing and communications at KeyBank, said the bank will still participate in the federal loan market.
“We are still making loans to students to go to Kent State through FFELP (Federal Family Education Loan Program),” she said. “Students at Kent State and other Title IV schools can get Stafford Loans and Federal PLUS loans.”
To assist students in minimizing debt, Mimura said a service called BorrowSmart may help. BorrowSmart’s program helps minimize debt by looking at available grants and scholarships, then students can calculate the amount they can pay per month. To access BorrowSmart, students can go to www.key.com/borrowsmart.
Mimura and Evans both said students have to be informed and do research to get the financial aid that works for them.
“You have to do the work,” Mimura said. “This (BorrowSmart) is not a magic pill.”
Evans suggested students go to the Kent State Student Financial Aid Web site, www.sfa.kent.edu, for current information on available aid. He also said students should come to the financial aid office and talk to a financial aid representative if they have questions.
Mimura said KeyBank’s decision to exit the private student loan market was made about a year ago.
“We are still committed to education,” Mimura said. “But we have to make decisions to protect the strength of Key.”
Although some students may have to apply for private student loans from a different company next year, Evans said students shouldn’t be worried about getting another loan.
Posted by alex on July 31st, 2008
One of the greatest myths that surrounds online education and adult education is that as you get older it becomes impossible to get financial air or student loans in order to help you afford rising school costs. While it is true that more scholarship are available for younger students, this does not make it impossible for returning students to get funds. Especially in today’s age when having a college degree is becoming more and more essential to embarking on a successful career, the fact is that you simply can’t afford not to earn a college degree, no matter the cost.
Fortunately there are a number of potential options that could help you to get started, because—let’s face it—college is expensive and most people just don’t have the money to get the ball rolling. Many financial aid and scholarship programs available to returning students through various organizations such as AIE and the Federal Government. But the real key is knowing about all of the different avenues that can be taken in order to receive educational funding.
In addition to scholarships and loans it is important to keep in mind the fact that there are State Education Grants, which most states have set aside for returning students over the age of 25. Also there are the often-overlooked work-study programs that many returning students don’t even realize that they are eligible for, and can often be an indispensable source of financial aid that generally isn’t too difficult to come by.
These are just a few general ideas, but there will be more in the future. In the meantime have a look at the info on this page, which is a government education site that outlines a number of different ways that returning students can get money towards college.
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Posted by Jen Zeman on July 20th, 2008
Financial aid is readily available for anyone wanting to go back to school, even if they are attending completely online. The fastest and best way to get all the information you need to get your financial aid started is by visiting the Department of Education’s website for the Free Application for Federal Student Aid (FAFSA) at http://www.fafsa.ed.gov/. This application is a necessity to complete for any federal financial aid, whether it is a loan or grant. The website is easy to navigate, as is the application itself. If you have already applied at a specific school, the institution’s financial aid office should be one of the first places you visit. Your school’s financial aid office can offer further assistance in completing your FAFSA, as well as providing volumes of information on scholarships (in-state and national). Scholarships are an amazing way to fund your education, but it takes considerable time to search for scholarships you might be eligible for, and then actually fulfilling the application requirements for those eligible ones. If you have the time – go for it!
Don’t forsake going back to school because you don’t have the money on hand or don’t know where to start. College is affordable and within reach of nearly everyone. My bachelor’s degree and my forthcoming master’s degree are funded via federal student loans. The payments are not painful and the return on investment is certainly worth the expense.
