Tuesday, 24 March 2009

Finding Suitable Student Loan Offers

The cost of education in a college is ever increasing and those who wish to pursue their education and complete their college degree can avail of student loan. The students may repay the loan after they have successfully completed their college education. Student loans are created to fund the education for those who are not in a position to afford various education expenditure such as academic fees, books and hostel fees.

There are various types of student loans available and it is left to the students to decide which loan program would be most suitable for them. Basically, the three types of student loans are federal student loan, private student loan or a parent loan. Stafford loan and Perkins loan are the two main federal loans that are widely utilized by the students. The federal laws regulate the interest loan offered by the federal loans and hence the name.

Usually, the interest rate in a federal loan is lower than the national interest rate and a lender offers this loan. Federal loan consolidation is also possible after the student graduates from the college. There are private student loans which are entirely different from federal student loans.

In this type, the legal requirement does not bind the interest rate and hence, the interest rate is a little higher. The other restrictions are the student has to submit their credit history which determines the interest and the fees that can be offered to the student. In addition, the parents are required to be co signers for a private student loan which means if the student fails to repay the loan, the parent has to.

There is another type called the parent loan or parent loan for undergraduate students which is specifically intended for the parents who wish to cover for the educational costs of their child. This has a fixed interest rate and the repaying responsibility entirely lies on the shoulders of the parents.

There are certain conditions under which the student loans are applied. The student has to be a part time or full time student attending university or college. It is advisable to avail of the loan limiting themselves to college related expenses.

There are a large number of student loan programs and the best thing is to search the internet and choose the one that is most suitable to the individual. Upon completion of the college degree, the repayment mode starts and here, it is better to consolidate all the loans, to make one solid loan and lengthen the repayment period.

Choosing the right type of loan is vital because if the interest rate is too high, it would affect the very purpose of getting a student loan and thus drag down into deeper troubles.

Article Source: http://www.articlesbase.com/education-articles/finding-suitable-student-loan-offers-666100.html

Sunday, 22 March 2009

Students Scramble to Find Student Loans as Fall Semester Draws Near

It’s crunch time for college students trying to secure the money they need for the fall semester. But with lenders continuing to suspend their student loan programs — the count now stands at 131 federal loan lenders and 30 private loan lenders — students may find themselves challenged to locate lenders that are still offering federal or private student loans.

In an attempt to help lenders be able to continue making new federal student loans, the government included a provision in the Ensuring Continued Access to Student Loans Act, signed into law in May, aimed at providing capital for cash-strapped lenders.

Under this legislation, the Department of Education can buy federal college loans from lenders, thereby providing these lenders with the liquidity they need to continue funding new parent and student loans. The law specifically targets lenders who, in the current credit crunch, are unable to find investors in the secondary market willing to purchase their student loan portfolios.

Even with this legislation in place, however, lenders continue to find themselves forced to suspend their student loan programs. As recently as July 28, the Brazos Higher Education Service Corp., the 26th-largest originator of federal student loans in 2007, and the Massachusetts Educational Financing Authority, the largest student loan issuer to Massachusetts residents, both announced that they would no longer be able to provide either new or current borrowers with student loans.

As the suspensions of both federal and private student loan programs keep spreading through all types of lenders — large and small; for-profit and nonprofit; banks, non-banks, and credit unions; state loan agencies and schools-as-lenders — students and their families are finding themselves with fewer borrowing options to get the parent and student loans they need to pay the fall tuition bills that are coming due over these next few weeks.

Two Major Lenders the Latest Casualties of Student Loan Crisis

The Brazos Group, a primarily nonprofit group of higher education lending, servicing, and other financial aid companies, first announced that it would stop offering federal college loans back n March. In May, however, after the government passed the Ensuring Continued Access to Student Loans Act, Brazos once again began offering federal parent and student loans, saying that the government’s short-term liquidity plan had renewed the organization’s confidence in its ability to continue offering student loans.

But Brazos once again suspended its education lending program late last month, citing continued turmoil in the student loan industry.

Brazos Executive Vice President Ellis Tredway said his organization simply “ran out of time to get everything in place” to issue new student loans for the fall.

The Massachusetts Educational Financing Authority, which issued more than $500 million in college loans to 40,000 Massachusetts college students and their families last year, had already suspended its federal student loan program in April. Now, MEFA has also pulled the plug on its non-federal private loan program, which provided Massachusetts students with fixed-rate private student loans.

“While we continue to pursue every possible option, raising the necessary funds to offer fixed–interest rate private education loans is taking longer than originally projected and has become even more challenging,” said Tom Graf, MEFA’s executive director.

Students Face the Uncertainty of Switching Lenders

With over 8 million students and parents having turned to federal college loans in 2006–07, according to the College Board, the number or families that stand to be affected by the ongoing wave of lender departures this year is not unsubstantial.

Last week, financial aid officers at Texas A&M University — a school with over 54,000 students — heard from seven different lenders warning that they would no longer be able to offer federal student loans, a situation that has made more than a few borrowers uneasy.

Dyneche Duffield, an incoming college student headed to Houston Baptist University, is uncomfortable with the prospect of having to establish a relationship with a new lender other than her local bank, which used to offer student loans.

“I would have much rather taken out a loan there than somewhere where I didn’t know anyone,” Duffield said.

(albeit with more stringent credit criteria that are making it harder for students to qualify), the magnitude of the problem within the student loan credit markets and how deeply it has permeated the college loan industry is alarming to many administrators and officials in higher education.While students like Duffield may still be able to go directly to the Department of Education for their federal college loans or find those remaining lenders who are still offering private student loans

Kathryn Osmond, executive director of student financial services at Wellesley College in Massachusetts, finds the situation with MEFA to be particularly indicative of a long-lasting and serious problem.

“An economy that is in such a tailspin that it affects a critical agency like MEFA,” said Osmond, “is an economy that scares me.”

Article Source: http://www.articlesbase.com/college-and-university-articles/students-scramble-to-find-student-loans-as-fall-semester-draws-near-532855.html

Wednesday, 18 March 2009

Can’t Afford College Education? Applying for a Student Loan is a Simple Proccess

There is no other place quite like college. The exchange of ideas, the different people you will meet and the education you will receive can change your life. But there is a catch, college is expensive. It can be hard for the average person to afford this wonderful college education. In this case, student loans might be your solution.

Student loans are loans offered to students to assist in payment of the costs of professional education. Student loans are how most students are able to afford college today. It helps you to get money which you can spend for good education.

Few students can afford to pay for college without some form of education financing. Two-thirds (65.7%) of 4-year undergraduate students graduate with some debt, and the average student loan debt among graduating seniors is $19,237 (excluding PLUS Loans but including Stafford, Perkins, state, college and private loans), according to the 2003-2004 National Postsecondary Student Aid Study (NPSAS). (The median is $17,120. One quarter of undergraduate students borrow $24,936 or more, and one tenth borrow $35,213 or more.)

Student loans
Student loans provide you with the method and ability to improve your standing and future by going to college or other higher education. Students can also apply over the phone by calling the number provided next to your desired private student loans lender. Students should also consider the starting package of their salary after they complete their education.

You will also need to consider what your starting salary will be when you do get out of school and get a job. The student loan calculators can help you predict how much money you will need and some student loan calculator can help you predict what your student loan repayments will be.

Federal student loans
Federal and private loan programs are available for US Students who are studying abroad or fully enrolled in a non-US School. Federal student loans are the most affordable loans available to students, with the lowest interest rates and deferred principal and interest payments until after graduation.

Education investment
Education is an investment in your future. The Department of Education acts as a lender, providing funds for Stafford loans and PLUS loans in the same amounts as the Stafford and PLUS loans offered through the Federal Family Education Loan Program. Private student loans, like the Chase Private Student Loan, can be used either alone or when federal loans, grants and other forms of financial aid are not sufficient to cover the full cost of education.

For those who already have a Student Loan, the servicing site is the one-stop center for managing that loan. A borrower can make online payments, view account balances and payment history, get loan counseling, change billing options, enroll in electronic services, and more.

Do you know enough to make sure you can control your student loans as best as you can. For more insight into what can, and likely will happen if you fail to pay back your student loan, please visit my student loan information site in the signature file.

Article Source: http://www.articlesbase.com/college-and-university-articles/cant-afford-college-education-applying-for-a-student-loan-is-a-simple-proccess-663732.html

Answers to the Student Loan Credit Crunch

Unfortunately, we’ve reached that bound when perceptible comes to fears about the credit appulse and student loans.

To be sunny, we at Higher Ed Watch linger to believe there is no federal student loan story. There is nothing danger that state Stafford loans will not be available to every student in the foreseeable future, regardless of their credit gag or income. Even if 100 or augmented lenders close shop, there will continue to be over 2, 000 civic student loan providers, including big banks, uniform in that JP Morgan Spring from, which recently hired ex - Nelnet side and announced a considered reduction in federal student loan excitement rates again fees.

Moreover, the federal student loan program has two “fail safe” systems ascendancy the form of the Governmental At rest Intelligence Loan ( FFEL ) “lender of last resort” program and the Manage Loan usage, through which Uncle Sam’s dollars are made available to students and families. There is no public student loan crisis.

It’s yielding as the media to get unscrewed, because some private student loans are becoming more expensive also there may be an topic of access to symptomatic student loans at some schools — particularly low quality, for - profit specialty schools.

But state student loans ride the commanding skeleton of lending for college. Some claim these weight - sponsored loans are not convincing to earnings through college.

( 1 ) Buy Star Loans. The federal ropes could start buying existing FFEL loans. It could then shlep those loans over to the Direct Loan program for servicing and collection. Buying a FFEL loan at an monetary worth higher than face equivalent, but less than its snare just now market price ( future government subsidies to the FFEL lender included ) would reserve taxpayers money. Of course, FFEL lenders would struggle to turf risky loans on the federal government, but they accomplish that already through the consolidation loan program.

(2)Substantive private loan borrowers often don’t sap their public student loan eligibility. Deprivation of federal loan exhaustion before private student loan borrowing bothers us greatly at Higher Ed Watch, considering federal student loans are almost always cheaper besides safer for borrowers than fixed student loans. The national government could sire dissimilar public Stafford loans available for uncut borrowers ( out - of - instruct or in - school ) hide private loan debt besides untapped Stafford loan eligibility. These newly borrowed funds would obtain to serve used to pay off veritable private student loan debt. Presumably, a debt swap plan would ease the monetary burden of local loan borrowers and infuse liquidity into the specific student loan market. We worry that upraised - risk borrowers leave be dumped on federal student loan books, but these borrowers had an entitlement to guaranteed loans with no credit check when they began their post - minor studies.

( 3 ) Synthesize Uncle Sam a FFEL Lender. The Govern Loan program should imitate identified due to a FFEL eligible lender. There is prompt an existing requisite that the Oversee Loan ritual have an “alternate originator” for colleges that determine not have the administrative capacity to bring outer the Direct Loan course. The Control Loan program’s contractor should act for allowed to make Oversee Loans at any FFEL nurture. Even if that teach lacks the capacity to administer the Oversee Loan program, it could take advantage of the alternate originator. Clout contrast to the schools that choose to participate leadership the Dispense Loan program exclusively in order to provide that they again their students deal only with one lender, FFEL schools choose to hold multiple lenders for their students.

( 4 ) Increase Stafford Loan Sanity. To the butt end schools do not increase tuition besides fees more than they otherwise would, a debt swap from high - cost and risky private loans to low - charge federal student loans is likely to arise — and that would be a ideal select development.
If the governmental government is going to raise Stafford loan limits, it at least should be assured to terminate undoubted for dismal - income students obtaining subsidized Stafford loans instead of for main - return students acceptance unsubsidized Stafford loans. It's the low - dividend students, especially those who are subprime borrowers assuming specific loans, who need federal loans more.
The tuition inflation danger is the problem protect increased loan limits, including poorly heed over proposals to make Virtue loans available to undergraduate dependent students up to the expense of attendance ( i. e. a new Undergrad Worth program ). Nevertheless, a loan objective augmenting has to be on the table, albeit only in limited conformation.

( 5 ) Order a Lender of Last Resort Tide Examination. Faultless 36 guaranty agencies are supposed to hold hold place a strategics to issue lender of hang in resort loans.

( 6 ) Instant Direct Loan Manner Participation Authorization.

( 7 ) Accelerate the College Cost Contraction and Access ( CCRA ) Act’s Origination Payment Reduction Provisions. Not only are lender supplied borrower benefits inequitably available, conditional on borrower behavior, besides toy in size, but the reductions were also than untrue up for by the law’s giant increase agency Pell Grant succour, cuts to undergraduate subsidized student loan affection rates, and virgin public service loan condo nation program. But if the lenders hunger us to think students are being hurt by the combination of the CCRA again the accept crash fame the model of reduced lender - supplied borrower benefits, fine. Federal student loans advance to be widely available. We foresee no universal deprivation of availability of state student loans in the near. We do think there may be a private loan matter as a small number of borrowers. But civic student loans and discriminating student loans are conflated soft by the media, again perceptions are what they are.

About the Author

Budi Hartato => specialist in student loan debt consolidation for more articles visit http://www.studentloandc.com

Article Directory: http://www.articlerich.com

Wednesday, 11 March 2009

Federal Perkins Student Loans

Federal Perkins Loans are low interest government loans made through a participating school to undergraduate and graduate students with substantial financial need.

In order to qualify for a Perkins student loan, a student's Expected Family Contribution (EFC) as determined by the government's FAFSA (Free Application for Federal Student Aid) must demonstrate the greatest level of financial need.

Recipients of Federal Pell Grants receive priority for Perkins Loans.

Apply for Your Perkins Student Loan Early

When applying for financial aid, it's important to note that schools distribute Perkins Loans on behalf of the government, and when the funds are gone, the funds are GONE.

This means that even if you qualify for a Perkins Loan you may not actually get one. So with interest rates steady at 5%, it's in your best interest to submit your FAFSA on January 1 or as close to that date as possible. This will ensure that you get the maximum amount of Perkins Loan funds you are entitled to.

Perkins Amounts

The maximum amount for a Federal Perkins Loan made to an undergraduate student is $4000 per year, up to a total of $20,000 over the course of an undergraduate program.

For graduate students, the maximums are higher, at $6,000 per year and $40,000 over the course of graduate studies.

How the Government Helps You Pay Back Your Perkins Loan

The federal government subsidizes all Perkins Loans. So while you are in school, and while the loan is in any type of deferment period, the federal government picks up the tab for the interest.

This can save you thousands of dollars in interest when you eventually repay your loan. An example follows:

Say an undergraduate student is able to take the maximum Perkins Loan amount of $4,000 each year at 5% interest. The government will pay the student's interest on the first loan for over fours years (four school years plus a six month grace period), over three years on the second loan, over two years on the third loan and over a year on the fourth loan.

This would equate to more than $2,000 in interest payments that you don't have to make. That's like getting an extra two thousand dollars free to pay for your schooling!

Eligibility Requirements

In addition to your EFC score, eligibility requirements for the Federal Perkins Loan are as follows. You must:

  • Be a United States citizen or an eligible non-citizen with a valid social security number

  • Demonstrate exceptional financial need

  • Be working toward a degree or certificate in an eligible program

  • Have a high school diploma, GED or pass an approved ability-to-benefit (ABT) test

  • Register with the Selective Service if you're a male between 18 and 25

  • Maintain satisfactory academic progress

  • The Benefits of a Perkins Loan

    Every year billions of dollars are awarded to students in federal student aid.

    The federal government offers many different types of student loans such as Subsidized and Unsubsidized Stafford Loans, as well as the PLUS Loan to parents to help their student pay for school.

    One of the most popular federal student loans is the Federal Perkins Loan, which is a low interest government loan that is offered to students who exhibit financial need.

    I highly suggest a Perkins Student Loan for three main reasons:

    1) You don't need a cosigner -This is a great first loan to get on your own because you don't need a cosigner to extend their good credit to you to get it.

    2) You can have bad credit or no credit -Since you most likely have no established credit, or you may have bad credit from previous credit card charges, you are still eligible to receive a Federal Perkins Loan.

    3) The government pays your interest - This is the most appealing and money-saving benefit of the Federal Perkins Loan. The federal government subsidizes all Perkins Loans, so as long as you are enrolled at least half-time in a degree program, and while the loan is in any type of deferment period, the federal government picks up the tab for the interest. You will end up saving thousands of dollars in interest once you finally start to pay back your loan.

    If you're offered a Perkins Loan, you'd be wise to take the full amount you are eligible for. With a low interest rate of 5%, a Stafford Loan, private loan or any other loan product won't be able to compete.

    Since a Perkins Loan will most likely not satisfy all of your student aid needs, you can apply for other federal student loan products, like a Subsidized Stafford Loan or an Unsubsidized Stafford Loan.

    If you're still coming up short after you've exhausted your federal aid resources, you should seek out a Private or Alternative Loan source.

    About the Author

    Trish Smith is a copywriter for Green Student U, Student Finance Domain and Study Abroad Domain, websites that are devoted to providing college students with helpful environmental, financial and study abroad advice.

    Article Directory: http://www.articlerich.com

    Monday, 9 March 2009

    10 Essential Tips For Student Borrowing

    If you are presently looking for student loans then here are 10 things which you should think about carefully before you commit yourself to a loan:

    1. Begin your search by looking at the award letter for your course and calculate just which need based loans you can apply for and how much money these loans would give you.

    2. Look at your total financial picture including things like your education costs, the availability of any scholarship or grant money and money which will be provided by your family and then calculate how much money you need to borrow.

    3. Never borrow more than you need. Regardless of how much money a lender offer you, do not borrow more than you need to meet your short and medium term needs.

    4. Look at student employment as an alternative to borrowing. Although working at a job while in college might seem like an extra burden it can be a lot better than struggling with high loan repayments after college.

    5. Get you application for a student loan in as soon as you can. It is important to make sure that you obtain the loans you need and that your money gets to you before your bills start to arrive, so do not wait once you know how much money you need to borrow and put in your application without delay.

    6. Be careful to follow the instruction on any loan application to the letter as mistakes may well result in your application being rejected or to a delay in you receiving your money.

    7. If you have applied for Stafford or Direct student loans then you should not be surprised if the amount that you receive is less than the amount you applied for because a fee of up to 4% will be deducted from your loan. This deduction will be made prior to the check being sent to your college.

    8. Once you have taken your first student loan you should begin to keep a track of your borrowing so that you know just what your monthly repayments will be in the future. It is all too easy to be lulled into a false sense of security while you are at college and not making repayments, but you might well be in for a shock once you have left college and have to start making monthly repayments. You will find a number of student loan calculators available which will handle the complicated mathematics for you.

    9. Should you find, after you have taken on as much federal loan debt as you can, that you require further loans from a private lender then you should seek professional advice before beginning your search for additional funding.

    10. If you do take on additional private loan funding then you will need to carefully rework your budget to include servicing any additional loans while you are attending college.

    About The Author:
    TheStudentLoansCenter.com provides information on financial aid for college and also looks at such things as student loans for bad credit


    Sunday, 8 March 2009

    Canada Student Loans Payday

    Canada student loans payday is an easy and fast process of cash. Canada student loans payday is the best option to get loans. You don't have to submit any collateral to get Canada student loans payday. If you are facing or passing any problems that time Canada student loans payday helps you like a real friend. To get loans in Canada is very common. Payday loans are very popular in Canada. Canada student loans payday is very short term loans. Canada student loans payday carries high rate of interest. Canada student loans payday are avail to you even you have good credit history or bad credit history. Canada student loans payday is specifically designed to help customers with unanticipated expenses. Canada student loans payday is simple to apply, easy to get approval and fast in disbursal. Canada student loans payday is an ideal choice to fulfill your cash needs, which may suddenly arise in your life. Canada student loans payday can be for your small daily expenditures like medical bills, phone bills, and car repairs, or for big cash issues like monthly installments and credit card payments. Canada student loans payday is the best choice to get instant cash until next paycheck.

    Canada student loans payday are taken for a short time period of 10-15 days for amounts up to $1000, generally meant to be paid off on the next payday. Canada student loans payday is unsecured short-term loans for a few hundred dollars. The average Canada Student Loans Payday is around $290 for a period of 11 days. Canada student’s loans payday are part of the growing alternative consumer credit market in Canada and are offered by lenders other than banks or other regulated financial institutions. The amount you can borrow is usually limited to 40 percent of the net amount of your pay Cheque.

    Canada student loans payday is offered only to people above 18 years of age, a regular employee earning a fixed monthly salary. He should also be having a checking account in a bank. Make sure to repay the loan in time or the lender will charged enhanced fee.

    About the Author

    Jonesh Taylor has done his master in finance and now he is expert in finance and insurance. Student loans no credit check - org to find Internet Payday Loans, Same Day No Teletrack Payday Loans, Canada Student Loans Payday, Payday Loans No Faxing and No Credit Check, online payday loan, visit http://www.studentloansnocreditcheck.org.

    Article Directory: http://www.articlerich.com

    Friday, 6 March 2009

    Student Loans No Co-Signer

    If you don’t have any co-signer as many loan lending agencies or lenders require co-signer in the processing of the loans, you can apply for Student Loans No Co-Signer. Student Loans No Co-Signer is provided to the lenders without checking the credit history of the borrower. If you are having bad credit history and you don’t have any source of cash then Student Loans No Co-Signer will be the right option for you. You are to search over Internet and you will find many lenders who are providing Student Loans No Co-Signer with easy and fast terms. Are you a would-be student who would like to attend college, graduate school, or professional school, but are hesitant because you have no one to cosign on student loans? Then take note: it is entirely possible to obtain student loans no cosigner. In fact, it is more common than not. It is more than possible to obtain student loans no cosigner – in fact, it is more than likely. Many lenders or credit agencies are available to almost anybody to make college more affordable, and no cosigner is necessary. Gift aid and private student loans also may help you to fund your academic career but may be more difficult to obtain, or more difficult to obtain Student Loans No Co-Signer, respectively. Applying for Student Loans No Co-Signer is very easy, you are to apply online by filling an online application form and few details about yourself as your age must be more than 18 years, you must have an active checking account at least 3 months old in a reputed bank and you must be a student of any college or institution. If all the requirements are in your hand then Student Loans No Co-Signer will be in your account and you will free from all the hassles. You have different options to use Student Loans No Co-Signer as pay the tuition fee or any other bill, car or bike repairing, debt consolidation, and many other expenses. No doubt, Student Loans No Co-Signer are helpful to keep your study continue. Not only students but also parents can use student Loans No Co-Signer.

    About the Author

    Andrew Peterson is an expert financial writer and currently he is a Webmaster working for student-debt-consolidation-loans-4all . com. Andrew Peterson is providing the true information student debt consolidation loans and many other types of loans. For more information about student loans, Student Loans No Co-Signer, federal student debt consolidation loans visit http://www.student-debt-consolidation-loans-4all.com

    Article Directory: http://www.articlerich.com

    Wednesday, 4 March 2009

    Finding The Best No Credit Student Loans

    Many college students today hit a hurdle before they even start when it comes to finding the funds necessary for college because they have already managed to run up a poor credit history. Fortunately however there are aid and loan packages available today which look principally at need and ignore your credit history and so this is where you will need to start your search for funding.

    One of the oldest sources of funding and one which is chiefly available on the basis of economic need is the Pell grant. As long as the student and his family are considered to be a low-income family a Pell grant is more or less automatic and is made on the basis of the submission of supporting documentation.

    The student will be required to provide proof of the cost of his intended course (including tuition fees and other qualifying costs) and will also need to provide details of the family's income from which an EFC (Expected Family Contribution) number will be calculated. On this basis a decision will be made and the grant made or refused.

    As the name suggests, a Pell grant is a 'gift' and not a loan and it does not have to be repaid. Pell grants are currently for a maximum of $4,731 a year (depending on your assessed financial need) and, while this will not normally cover the full cost of attending college, it can go a long way towards helping. However, most students will need to seek loan funding in addition to a Pell grant and the best form of loan funding initially are Stafford loans.

    There are two different types of Stafford loan and the first is a subsidized Stafford loan on which the government pays any interest charges while you are studying full-time and for up to six months after graduation. The second type of Stafford loan is an unsubsidized Stafford loan on which you will be responsible for making all interest payments.

    Unsubsidized Stafford loans need to be considered very carefully because, although you will be responsible for making interest payments, you will not be required to do so while you are in full-time education and for up to six months after graduation. However, during this period interest will still be applied to any loan and will simply be added to the outstanding amount of the loan. This means that during a three or four year college course your loan debt can grow substantially and reach a very significant sum by the time you do start paying it off.

    Naturally, most students would prefer to have an unsubsidized Stafford loan but loans are disbursed according to the funds available and on the basis of need so that only a minority of students will qualify for a subsidized loan. The good news however is that most students will qualify for an unsubsidized loan and, despite their drawbacks, these still represent one of the best forms of college loan funding available today.

    There are of course other forms of grant and loan funding available (and scholarships) and you need to shop around to see just what is availa

    About the Author

    TheStudentLoansCentre.com provides advice on all aspects of college financing including low interest student loans and finding student loans with bad credit

    Article Directory: http://www.articlerich.com

    Sunday, 1 March 2009

    Student Loans And The Federal Family Education Loan Program

    Established by an Act of Congress in 1965 and begun in 1966, the Federal Family Education Loan Program (FFELP) is a partnership program between the federal government and private lenders and an umbrella program which includes Stafford loans, student PLUS loans and Perkins loans. Since it started more than half a trillion dollars have been disbursed through this program.

    Funds for the program are provided by a network of independent banks, credit unions and other financial institutions and lenders are generally happy to make money available in what would normally be considered a high risk area of lending because loans are to a large degree (although not totally) underwritten by the federal government. In about five percent of cases private guarantors do become involved with defaulted loans and are able to make application to the federal government for at least partial reimbursement.

    The vast majority of funds are used for subsidized and unsubsidized Stafford loans. In the case of subsidized loans the federal government pays the interest on loans while students are attending full-time courses (and for up to six months after graduation), while in the case of unsubsidized loans students are responsible for paying the interest due on their loans. Interest is not however normally paid on unsubsidized loans while a student is attending full-time education (and again for up to six months after graduation) but is added to the loan.

    The other program with attracts major funding is the student PLUS loans program which is designed to allow parents to take out loans on behalf of their children. This program was extended in 2006 and is now also available to professional and graduate students. The student PLUS loans program is becoming an increasingly important part of college funding these days.

    Applications to the Federal Family Education Loan Program are normally made using a Free Application for Student Aid (FAFSA) application form which is submitted to the loans officer at the college for which the student has been accepted. Applications are then examined and loans granted on the basis of the information provided and the availability of funds for disbursement.

    Loans are normally disbursed at least twice each year (depending upon the academic timetable followed by the college) and it is common for the bulk of each loan to be paid directly to the college to cover tuition and other fees, with the balance then being paid over to the student or parent, less fees.

    In most, but certainly not all cases, a fee of about 4% is payable which is made up of a 3% administration, or 'originating', fee and a 1% insurance fee. It is not uncommon however for higher fees to be charged and so it is important to ask about the fee structure and, if necessary, to shop around when applying for student loans.

    About the Author

    TheStudentLoansCenter.com provides information on all aspects of college financing including finding grants for college

    Article Directory: http://www.articlerich.com