Posts Tagged ‘student loans’
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 March 2nd, 2009
The new 2010 budget introduced by President Barack Obama contains a proposal to move federal student loans into the U.S. Department of Education’s direct-loan program.
Currently, private financial institutions that lend money to students receive subsidies from the government under the Federal Family Education Loan Program. Sallie Mae is the largest of these lenders.
Without the funding, private lenders do not have much incentive to offer student loans, as they do not typically generate much revenue for banks.
But the program has faced criticism over the years for its expense and has recently come under scrutiny due to the economic turmoil on Wall Street, which led to an unreliable supply of funds for higher education.
According to a Department of Education news release, the change is aimed at making loans “reliable, stable and efficient.”
The budget also includes a provision that the Federal Pell Grant program will be tied to inflation, which Education Secretary Arnie Duncan said will open more education opportunities to low-income students.
“The new funding announced today represents a significant expansion of our federal student aid programs, providing more dollars to allow more students to attend more schools,” he said.
provided by Credit.com
Posted by admin on February 23rd, 2009
Sallie Mae, the largest provider of student loans in the country, announced today an offer that no family preparing for college admissions should miss.
A new website, www.salliemae.com/resources, aims to help alleviate fears and provide answers. “We have helped more than 21 million Americans achieve the dream of a college education, and we do not intend to let this economy keep us from helping you achieve yours.” They’re not only offering detailed responses to frequently asked questions, but on Wednesday (February 25), Sallie Mae has a toll-free hotline open from 6pm – midnight EST. In addition, you can submit questions directly to the site, get email updates when new answers are posted, and download a free podcast that explains how to complete the FAFSA (the federal financial aid application).
Finally, there are two 45-minute webinars that explain how to calculate and compare college costs, create a plan to pay for college, understand loan payments, and use free scholarship Web tools. The webinars will be held on February 24 at 6 pm and February 25 at 7 pm (both EST). Register by emailing schoolresource@salliemae.com. If you miss it, the webinar will be available on their website beginning February 26.
Posted by Jeff Davis on December 12th, 2008
Since I worked full-time and have a family, I really did not have the free time available that I would have liked to have had in order to pursue the various avenues regarding financing options for school. Therefore, for my financial aid options, I chose to go the route of student loans and to pay any out of pocket expenses that the student loans would not cover. This worked well for me but may not be the right fit for everyone. Overall, I think it really depends on each individual’s needs for financial aid and how that person wants to address them.
There are many ways to obtain financing for college and an online school is no different. Among these are: student loans, private loans, employer tuition assistance, and scholarships. From what I discovered, there are more financial aid options available than ever for students pursuing online programs. If you are unsure of how to get started with obtaining the correct information, then consider your university’s financial aid department. They will have plenty of information on the university’s financial aid policies.
However, one advantage that online schools have over more traditional schools is that they can save you money. If you attend college on a traditional campus, you will have more expenses involved than you originally anticipated. Think about it. You will have to pay for not only tuition, but also you may have housing, food, books, supplies, and gas for commuting. With an online school, these costs are greatly reduced because you are attending class from home. Therefore, your only costs should be tuition and books. You also have no commuting costs since you do not have to drive to class.
Overall, you need to understand all of your options when it comes to paying for college. I would recommend that you take the time to do some careful research and be sure to apply for everything you can including federal and state aid as well as private scholarships.
When I decided to return to school, I knew that I would have to go into more debt to do it. I looked for a school that was reasonable in terms of cost, but that was still about $1000 a month for school. That was money I didn’t have, so student loans were again necessary.
I had worked while going to school for my bachelor’s degree, but wound up taking student loans to supplement my lifestyle. I think the same thing happened with my master’s degree. While my employer paid 75% of the cost, I still took some student loans. I hadn’t planned to pursue my PhD at that time, so I thought I would just pay off the balance as I progressed in the workplace.
The limits for the federal student loans do go up as the type of the degree increases. So I knew the limit for Stafford Loans was about $140,000. I am pretty close to that limit at this point. Now that I’m nearly at the end of my degree program, my cost is reduced to approximately $1000 per quarter and I pay that out of pocket.
I know I should have looked for scholarships, but there just wasn’t time. Also, there didn’t seem to be as many scholarships targeted toward my demographic, field of study, or degree level. I also didn’t think my school provided many resources for financing - they basically presented the bill and expected the student to figure it out.
Knowing what I know now, I do wish I had been more fiscally responsible and minimized my loans (and my lifestyle). I am now still in deferment, but make small payments each month to help bring this balance in line before I graduate.
Posted by admin on October 16th, 2008
Sallie Mae offers 5 tips to help newly minted alumni begin student loan repayment and build a healthy credit history and to help customers get off on the right path for student loan repayment:
1. Automatic debit: Set up monthly loan payments with
automatic debit as an easy way to make on-time payments. Your
monthly student loan payments are electronically deducted from
your checking or savings account, saving you time and stamps.
2. Run the numbers: Sallie Mae’s Loan
Repayment Calculator estimates the monthly payments and total
interest costs under the different repayment plans available.
Before selecting a repayment plan, run the numbers and see which
repayment plan gives you a monthly payment that fits into your
budget.
3. Link your loan to Upromise: Join Upromise,
then link your Sallie Mae loan account to your Upromise account
and use your Upromise rewards to transfer savings automatically to
help pay down your eligible Sallie Mae student loans. Upromise
helps students and families save money for education expenses by
earning rewards on everyday purchases from participating
companies. Visit www.SallieMae.com/upromise
to learn more.
4. Stay in touch: Immediately notify your student loan
servicer(s) of any change to your name, address, telephone number,
employer, or Social Security number. This will ensure that you
receive all communication from your loan provider and that you are
aware of your payment amount, payment due date and repayment
options.
5. Prepay or pay extra when possible: You may prepay your
loans in part or in full at any time without penalty. This will
lower the overall cost of the loan. Adding a little extra to each
monthly payment can help.
Posted by admin on October 14th, 2008
USA Funds(R), the nation’s leading education loan guarantor, announces that it supported $17.2 billion in loans to help students and parents pay for college during the fiscal year that ended Sept. 30, 2008. The figure represents an increase of more than 10 percent in college financing supported by USA Funds compared with the previous fiscal year.
USA Funds guaranteed more than $15 billion in Federal Stafford loans for students, a 15 percent increase over fiscal 2007, and more than $2 billion in Federal PLUS loans to graduate and professional students and to parents of dependent undergraduate students.
“Despite this year’s unprecedented turmoil in the financial markets, USA Funds continued to work with participating lenders, postsecondary institutions and the U.S. Department of Education to ensure eligible students were able to obtain financing through the Federal Family Education Loan Program,” said Carl C. Dalstrom, USA Funds president and CEO. “In the unlikely event eligible students are unable to find a lender willing to make FFELP loans to them, the Education Department has approved USA Funds’ plans to serve as the lender of last resort in the states where USA Funds is the designated student loan guarantor.”
USA Funds is designated by the U.S. secretary of education as the guarantor for Arizona, Hawaii and the Pacific Islands, Indiana, Kansas, Maryland, Mississippi, Nevada and Wyoming.
As a federal student loan guarantor, USA Funds insures private lenders against default. As part of this role, USA Funds supports extensive systems, services and staff who ensure requested loans are delivered to eligible students attending eligible postsecondary institutions; serves schools, lenders, students and parents with answers to their questions about their education loans and supports their compliance with loan program guidelines; helps student- and parent-borrowers successfully repay their loans; provides assistance to borrowers who face difficulties repaying their loans; and recovers on behalf of U.S. taxpayers amounts owed by borrowers who defaulted on their student loans.
Headquartered in Indianapolis, USA Funds is a nonprofit corporation that works to enhance postsecondary education preparedness, access and success by providing and supporting financial and other valued services. For more information about USA Funds, visit
www.usafunds.org .
Posted by admin on October 10th, 2008
The Bush administration said on Friday it would take further steps to support the student loan market for the 2009-2010 school year.
In a joint statement, U.S. Treasury Secretary Henry Paulson and Education Secretary Margaret Spellings said they would soon announce steps to address challenges hampering student lenders and borrowers.
“Using our newly extended authorities, the administration is moving aggressively to support the continued availability of funding for federal student loans in the next school year with the goal of restoring the government guaranteed student loan market to normal operations,” they said in a statement.
Posted by admin on October 2nd, 2008
The credit crunch has banks tightening lending and making it tougher for some college students to get loans.
Getting private student loans is becoming more challenging. The Consumer Bankers Association says, because of the credit crunch, some banks are not offering any more private loans and most of the ones that are, are upping their qualification criteria.
Andrea Payne is a finance major, but now the numbers she’s most worried about are the ones need to pay for her senior year of college. “I need to get a really good waitress job now,” the University of North Texas student said.
For the past three years Andrea has received private student loans from Bank of America. This year both Bank of America and Wachovia stopped offering private student loans.
UNT Financial Aid Counselor Carolyn Cunningham says, “The credit crunch could have further ramifications. We’re not sure of that now.”
In reaction to the economic crisis, the federal government upped the amount they are loaning students, but for students like Andrea it’s still not enough.
The average private college tuition costs more than $23,000 a year. The average public college tuition runs just under $9,000 a year.
The federal unsubsidized Stafford Loan is the one most available to students and offers just $5,500 for a freshman and $7,500 for a senior.
Andrea says she hasn’t given up on getting a private loan and is trying other banks. She’s also moved into her grandmother’s home, farther away from campus, to save money.
Some North Texas banks that are still offering private student loans have upped the criteria for approval, including requiring a co-signer in many cases.
Concerned students should talk to a financial aid advisor at their school. While getting funds may be a longer process, help is still available.
Provided by DENTON (CBS 11 News)
