College Loan Repayment

You are a happy college graduate, filled with dreams of a wonderful career, and even the heavy burden of college loan debt does not depress you. Paying off your debts might not be exactly the most pleasant way to spend your money, but if your major is in business, finance, accounting or something similar, why not get some practical experience by finding the best college loan repayment solution?

There are several possibilities for college loan repayment. First, you can simply carry on with paying to your lenders. This is the simplest to do, but the other options offer much more freedom.

For instance, why not consider refinancing? Refinancing is getting one loan with more favorable conditions (generally lower interest rates), which you use to pay your older debts and then you go on with paying the refinanced loan. The idea is that by paying less interest, you will save money. What’s more, when you are already a graduate, you can get a loan that is adjustable to your future income!

A similar practice to refinancing is debt consolidation. But with debt consolidation you unite multiple loans into one, and generally the interest rate for the new loan is lower than the rates for the separate debts.

There are other situations when you actually do not repay your loan because you qualify for loan forgiveness. One such opportunity is joining the army or doing volunteer work (and in some cases you get valuable professional experience in addition to decreasing your debts). Sometimes even the college you have attended can have programs for loan forgiveness, so before starting to repay your loan, check out these opportunities first!

Consolidate College Loans provides detailed information on Consolidate College Loans, Consolidate College Loan Debt, College Loan Forgiveness, College Loan Repayment and more. Consolidate College Loans is affiliated with Unsecured Debt Consolidation Loans. Article Source: http://EzineArticles.com/?expert=Jennifer_Bailey

Guide to student banking and finance - part 2 of 2

Guide to student banking and finance - part 2 of 2

No matter what your chosen subject may be, for many students it makes sense to become financially savvy. At university budgeting will be tight and you will have to learn quickly about juggling daily expenses with household bills and income from loans. Just like with an exam, revision is the key. If you know what you're getting into you'll produce better results. Learning about student current accounts, student loans, student credit cards and to be wary of consolidating student loans will help your cause.

To make student life easier it's necessary to think beyond your student loan and be prepared to go that extra mile to improve your income and cut your costs.

Student Loans

Perhaps the easiest way to help your budget is to increase your income through a student loan. Students can defer payments on the £3,000/year tuition fee until they are earning £15,000/year in employment through a tuition fee loan. For more details contact your local authority.

In addition, student loans are available to assist with living and study expenses. These usually amount to about £1,250/term. Again the loans do not have to be paid back until you are earning £15,000/year but this does not mean you should treat the loans with anything but respect. Remember their purpose and be careful not to spend excessively on unnecessary items as soon as you receive the loan. It has to last you for the course of the term and ultimately you have to pay it back.

Where to go for help with debt or finance

Hopefully by reading the moneysupermarket.com guide to student banking and finance you'll have learned the importance of a budget, useful ways to save and add to your income. However, we realise that the more help and advice you can get the better, which is why we have compiled a list of useful contacts for you to consider.

The first stop for help should be your student union representative. They will be able to deal with your needs directly and offer advice. However, there are many additional outside sources to consider:

DfEs - The Department for Education and skills offers student support.

LEAs - For a full list of local education authorities.

Hopefully you now feel well-equipped to deal with the issues of student finance. Remember at all times that help is available and you're not alone - millions are coping and you can too.

Good luck with your studies and enjoy university life!

Guide to student banking and finance - part 1 of 2

Student debt is a serious issue for anyone considering going to university. Statistics show that the average student leaves their studies behind some £13,000 in the red - a sum of money they could be paying off for more than twenty years. As a consequence graduates are no longer thinking simply about where to go and what to study, but whether they can cope with the financial strain of university life.

However, the fact is that millions do cope and to help your cause moneysupermarket.com has compiled a guide to student banking and finance. We aim to point you in the right direction so you can deal with the monetary strain, allowing you to concentrate on your studies and enjoy university life. Our guide deals with the basics of banking and finance - here in part one we take a look at banking and budgeting whilst in part two we deal with finance, debt and ways to save.

The importance of a budget

Pre-preparing a budget may help you keep a tight grip on your finances. It's crucial to take EVERYTHING into account as money will be extremely tight. Think beyond the obvious major outlays such as rent, bills, books and food and think about the smaller expenses that will quickly add-up. Think about the costs of using your mobile phone (including texts), printing, photo-copying, using public transport and factor in those inevitable night-outs. The more you can plan for the better.

Budgeting is a vital tool not just at university, but in life. Thinking ahead and sticking closely to your plan is crucial if you are to avoid student debt.

Work out your cost of living

A little bit of mathematics can go a long way and a neat calculation can help you prepare for university life. Here is what we recommend that you consider:

• Income for term - This will include parental contributions, a student loan (usually about £1,250) and a wage from a part-time job.
• Term expenditure - This will include rent (usually about £800), books, clothes, CDs, etc - larger sums that you will spend over the course of a term.
• Weekly expenditure - This should factor in the essentials and non-essentials, so food, leisure, travel, household bills and more.

Firstly add up the income and then add up your term expenditure. Also calculate your weekly expenditure over the course of a term - there are normally twelve weeks in a term. Once you have the three totals worked out, add the two expenditure totals together and subtract them from your income. The total will be the money you have left after all these costs are factored in. Consequently you might wish to reduce certain costs based on these results - you could decide to cut out the odd night out or spend a little less on leisure to keep yourself within a budget. Always reserve some cash for emergencies.

Part-time work

Though many like to claim that students are work-shy the opposite is often true as many young people hold down part-time jobs to ease financial worries in addition to dealing with their studies. Of course work should never come ahead of study, but if you can cope with perhaps a weekend job or even work through the holidays it is a great way to boost your income.

Help is available. Many universities have job shops connecting students to local employers and there are often special initiatives in place.

Parental/additional support

OK not everyone has rich parents and asking for money is not an easy thing to do. However, any additional support is welcome and will help to ease the student finance burden. Why not ask family members to buy your books for example? They are probably more likely to support you if they think their money isn't going to disappear at the Student Union bar!

Also look to outside sources for sponsorship. Do you know anyone who works for a large local company? Is there someone in the industry you are looking to join who has spotted your potential and would be prepared to support your cause? Or are you a member of a social group or church who might be able to contribute? As the old phrase goes, if you don't ask, you don't get - and you might just be pleasantly surprised!

GLOSSARY

• Account
  A grouping of one or more Direct Loans disbursed by the U.S. Department of Education. Borrowers can have one or more accounts. Each account has a unique number assigned to identify it. The format of an account number is your Social Security Number (SSN) plus a one-digit identifier added to the end (e.g., 123-45-6789-1). If you receive a notice that affects all of your possible accounts, the account number on the notice may be abbreviated to the Social Security Number only.

• Accrue
  The process whereby interest accumulates on your loan. When we speak of "interest accruing on your loan," we mean that the interest due on your loan is accumulating.

• Borrower
  Individual who signed and agreed to the terms in the promissory note and is responsible for repaying a loan.

• Cancellation
  Some student loan programs allow for all or part of the total loan principal and accrued interest to be canceled in certain circumstances. A canceled loan may also be referred to as a "discharged loan."

• Capitalization
  Adding unpaid accrued interest to the principal balance. Capitalizing interest increases the principal amount of the loan and the total cost of the loan. This occurs at the end of a deferment, forbearance, or grace period on Unsubsidized Loans, and at the end of a forbearance period on a Subsidized Loan.

• Collection Costs
  When a defaulted Direct Loan or FFEL is included in a Direct Consolidation Loan, collection costs of up to 18.5 percent of the outstanding principal and interest are added to the outstanding balance. When defaulted Perkins Loans and Health and Human Service (HHS) loans are consolidated, collection costs are also added. However, collection costs on these loans may exceed 18.5 percent of the outstanding principal and interest.

• Consolidation
  The process of combining one or more eligible educational loans into a single new loan. The Direct Loan Program offers a Direct Consolidation Loan for those borrowers who are interested in consolidating their eligible educational loans.

• Default
  Failure to repay a loan according to the terms agreed to when borrowers signed their promissory notes. Default occurs when a Direct Loan borrower becomes 270 days delinquent in making payments on their loan(s). The consequences of default can be severe.

• Default Aversion
  The activities of a guaranty agency that are designed to prevent a default by a borrower who is at least 60 days delinquent and that are directly related to providing collection assistance to the lender.

  
  

• Deferment
  A deferment is a temporary suspension of a borrower's monthly loan payment. There are many different types of deferments available.

  During deferment of subsidized loans, principal payments are postponed and interest does not accrue.

  During deferment of unsubsidized loans, principal payments are postponed but interest continues to accrue. Accrued unpaid interest will be added to the principal balance (capitalized) of the loan(s) at the end of the deferment period. This will increase the amounts borrowers owe.

• Delinquent
  Delinquency status indicates that borrowers’ accounts have become past due on payment. This occurs when borrowers’ loan payments are not received by the due dates. Accounts remain delinquent until borrowers bring their accounts current with payments, deferments, or forbearances. If borrowers’ accounts have become delinquent and the borrowers are unable to make payments, deferments or forbearances should be considered.

• Dependent student(dependent undergraduate student)
  A student who does not meet any of the criteria for an independent student. An independent student is at least 24 years old, married, a graduate or professional student, a veteran, a member of the armed forces, an orphan, a ward of the court, or someone with legal dependents other than a spouse.

• Direct Loan Servicing Center
  The U.S. Department of Education's agent contracted to collect Direct Loans and handle deferments, forbearances, and repayment options

• Direct PLUS Loan (PLUS Loan)
  Direct PLUS Loans are unsubsidized loans available to parents of dependent students, and to students enrolled in graduate or professional programs. These loans are available regardless of financial need and the amount of eligibility depends on the total cost of education.

• Disbursement
  Payment of loan proceeds by the lender. During consolidation, this term refers to sending payoffs to the loan holders of the underlying loans being consolidated.

• Disclosure Statement
  A statement showing a borrower's loan term, payment schedules and monthly payment amount for their loans.
  
• Eligible Loans
  The following federal education loans are eligible for consolidation into a Direct Consolidation Loan:
  • Direct Subsidized and Unsubsidized Loans
  • Federal Subsidized and Unsubsidized Stafford Loans
  • Direct PLUS Loans and Federal PLUS Loans
  • Direct Consolidation Loans and Federal Consolidation Loans
  • Guaranteed Student Loans
  • Federal Insured Student Loans
  • Supplemental Loans for Students
  • Auxiliary Loans to Assist Students
  • Federal Perkins Loans
  • National Direct Student Loans
  • National Defense Student Loans
  • Health Education Assistance Loans
  • Health Professions Student Loans
  • Loans for Disadvantaged Students
  • Nursing Student Loans

  
  

• Federal Family Education Loan Program(FFEL Program)
  A Federal program authorized under Title IV of the Higher Education Act that provides loans to eligible student and parent borrowers. The program consists of Subsidized and Unsubsidized Federal Stafford Loans, Federal PLUS Loans, and Subsidized and Unsubsidized Federal Consolidation Loans. Funds are provided by private lenders such as banks, credit unions, and other private financial institutions. The loans are backed by the Federal government.

• Forbearance
  A period during which your monthly loan payments are temporarily suspended or reduced. You may qualify for forbearance if you are willing but unable to make loan payments due to certain types of financial hardships.

• Grace Period
  After borrowers graduate, leave school, or drop below half-time enrollment, loans that were made for that period of study have several months before payments are due. This period is called the "grace period."

  Grace periods extend from 6 to 12 months after borrowers leave school:

  • Most FFEL and Direct Loans have 6-month grace periods.
  • Perkins Loans have grace periods of either 6 or 9 months, depending on when the loan was first disbursed.
  • Health professions loans have grace periods of 9-12 months.

  During the grace period, no interest accrues on Subsidized loans. Interest accrues on Unsubsidized loans during grace periods, and this interest is capitalized when borrowers’ loans enter repayment.
  

  Borrower's repayment periods begins the day after the grace period ends. First payments will be due within 60 days after the repayment period begins.

  Each loan has only one grace period. If borrowers return to school after the grace periods has expired, the borrowers’ loans qualify for deferment while borrowers are enrolled but return to repayment after borrowers leave school. There is no additional grace period.

• Half-time
  A student is considered half-time when carrying at least one half the academic workload of a full-time student as determined by the school.

• Health Professions Loans
  Loan programs authorized by the Public Health Services Act and administered by the U.S. Department of Health and Human Services (HHS) rather than the U.S. Department of Education. Although health professions loans can be included in consolidation loans, borrowers should be aware of the advantages and disadvantages of consolidating these loan types because of the differences between the programs.

  HHS loans include:

  • Health Professions Student Loans (HPSL)
  • Loans for Disadvantaged Students (LDS)
  • Health Education Assistance Loans (HEAL)
  • Nursing Student Loans (NSL)

• Holder (also holder of loans/loan holder)
  A holder (loan holder) is an entity that holds a loan promissory note and has the right to collect from the borrower.

• Income Contingent Repayment(ICR) Plan
  

  A repayment plan that bases your monthly payment on your yearly income, family size, and loan amount. As your income rises or falls, so do your payments. After 25 years, any remaining balance on the loan will be forgiven, but you may have to pay taxes on the amount forgiven.

  Each year your monthly payment will be based on your family size, annual Adjusted Gross Income (AGI) as reported on your federal tax return, and the total amount of your Direct Loan(s). To participate in the ICR Plan you must authorize the U.S. Internal Revenue Service (IRS) to inform the U.S. Department of Education (Department) of the amount of your income. This information will be used to calculate your repayment amount, which will be adjusted annually to reflect changes in your AGI If you select the ICR Plan, you will be billed for only the interest amount that accrues on your loan each month until you complete and return the required documentation. We cannot place you on ICR Plan until we receive your completed forms.

• Independent Student
  An independent student is at least 24 years old, married, a graduate or professional student, a veteran, a member of the armed forces, an orphan, a ward of the court, or someone with legal dependents other than a spouse.

• In-School Status
  The status of a loan prior to entering the grace or repayment period.

• Interest
  A loan expense charged by the lender and paid by the borrower for the use of borrowed money. The expense is calculated as a percentage of the unpaid principal amount (loan amount) borrowed.

• Loan(s)
  Money borrowed from a lending institution or the U.S. Department of Education that must be repaid.

• NSLDS

The National Student Loans Data System is a centralized database that stores information on all U.S. Department of Education loans and grants. NSLDS also contains borrowers’ school enrollment information. Borrowers can access this information online using their Department of Education PIN

• Out of School
  Borrowers are "out of school" if they are making scheduled payments on their federal education loans (repayment) or they are in a period of grace, deferment, or forbearance.

• Payment Amount
  The total amount of a borrower's most recent payment.

• Payment Date
  The date borrower’s payments are received and applied to their loan accounts.

• PIN
  Your PIN serves as your identifier to allow access to personal information in various U.S. Department of Education systems.

  Your PIN also acts as your digital signature with some online forms. Use your PIN to electronically sign your online Loan Consolidation Application and Promissory Note, Deferment, or Forbearance forms.

  If you do not already have a PIN, you can request one online by selecting the Request a PIN button link located on the left menu bar. The PIN you will receive will be your universal U.S. Department of Education PIN.

• PLUS Loan
  PLUS Loans are available to parents of dependent graduate students and to students enrolled in graduate and professional programs. PLUS loans are unsubsidized loans that accrue interest from the date of disbursement.
  

• Prepayment
  A prepayment is an amount in excess of the amount due on a loan. If borrowers have more than one Direct Loan, they must specify which loan they are prepaying. Like all other Direct Loan payments, a prepayment first will be applied to any outstanding fees and charges, next to outstanding interest, and then to the principal balance of the loan(s). There is never a penalty for prepaying principal or interest on Direct Loan Program loans.
  

  
  

• Principal Loan Balance Outstanding (principal balance)
  The total principal amount outstanding on a borrower's Direct Loan(s). Principal balance will include the original amount(s) disbursed for the loan(s), any adjustments made to the loan disbursement amount, and any interest capitalized on the account(s).

  
  

• Promissory Note
  The binding legal document that borrowers sign when they obtain loans. Promissory notes define the conditions under which funds are provided and the terms under which borrowers agree to pay back the loan. Promissory notes include information about the interest rate and about deferment and cancellation provisions.

  
  

• Reasonable and Affordable Payments
  Rehabilitating a defaulted loan or making satisfactory payment arrangements requires borrowers to make "reasonable and affordable" payments. The holder of a Direct Loan or FFEL Program loan determines on a case-by-case basis what constitutes a reasonable and affordable payment on defaulted loans. Loan holders consider disposable income and such expenses as housing, utilities, food, medical costs, work related expenses, dependent care, and other Federal education loan debt. Borrowers are then provided with a written statement of the payment and an opportunity to object to those terms.

  
  

• Rebate (Direct Loan Up-Front Interest Rebate Program)
  The amount of the up-front interest rebate given to Direct Subsidized Loan, Direct Unsubsidized Loan and Direct Plus Loan borrowers beginning with loans made for the 2000 - 2001 program year. The rebate amount is equal to 1.5 percent of the loan amount borrowed. Borrowers must make their first 12 required monthly payments on time or the rebate amount will be added back to the principal balance on their loans.

  
  

• Refund
  The total amount of funds returned to the Direct Loan Program as unused for the student's education.

  
  

• Rehabilitation
  The process of bringing a loan out of default and removing the default notation on a borrower's credit report. To rehabilitate a Direct or FFEL loan, a borrower must make at least nine (9) full payments of an agreed amount within twenty (20) days of their monthly due dates over a ten (10) month period. To rehabilitate a Perkins Loan, a borrower must make twelve (12), on-time, monthly payments of an agreed amount to the Department. Rehabilitation terms and conditions vary for other loan types and can be obtained directly from loan holders.

  
  

  
  
• Repayment (also repayment period)
  Making payments on a loan. The "repayment period" is the period during which payments are required to be made.

  
  

• Repayment Plan(s)
  The Direct Loan Program offers a range of repayment plans:
  • Standard Repayment plan - fixed payment for up to 10 years to repay.
  • Extended Repayment plan - fixed payment for 12 to 30 years to repay, depending on loan balance.
  • Graduated Repayment plan - smaller payments at first and larger payments later for up to 30 years to repay, depending on loan balance.
  • Income Contingent Repayment (ICR) plan - payment amount is based on your loan balance and your income (and your spouse's income if you are married) and can vary year to year for up to 25 years. The Income Contingent Repayment plan is NOT available to PLUS loan borrowers.
  • Individualized payment plans can also be arranged with the Direct Loan Servicing Center.

  Changing repayment plans is a good way to manage your loan debt when your financial circumstances change. For example, you can usually lower your monthly payment by changing to another repayment plan with a longer term to repay the loan. There are no penalties for changing repayment plans.

  
  

• Satisfactory Repayment Arrangements
  Borrowers in default on Direct Loan and FFEL Program loans who wish to consolidate their loans in a plan other than the Income Contingent Repayment (ICR) plan must have made satisfactory repayment arrangements with the loan holder(s). Three consecutive, voluntary, on-time monthly payments on a defaulted Direct Loan or FFEL Program loan constitute satisfactory repayment arrangements. Borrowers must work with their current loan holders to set up reasonable and affordable payments. Borrowers who wish to consolidate defaulted Perkins or health professions loans should contact their loan holders for information on satisfactory repayment arrangements under those programs.

  
  

• Separation Date
  The actual or anticipated date when the borrowers graduate, leave school, or drop to a less than half-time status. The separation date is used to determine the loan's graceperiod and the date the first loan payment will be due.

  
  

• Servicer
  An entity designated to track and collect a loan on behalf of a loan holder.

  
  

• Simple Daily Interest
  The method used to calculate interest on student loans.

  
  

• Status (Loan status)
  The present state of your Subsidized, Unsubsidized, PLUS, or Consolidation loan(s).

  An account will be either:

  • in-School
  • in-Military
  • grace
  • repayment-current
  • repayment-delinquent
  • deferment
  • forbearance
  • paid-in-full
  • suspended
  • default

  
  

• Subsidized Loan
  A loan for which a borrower is not responsible for the interest while in an in-school, grace, or deferment status. Subsidized loans include Direct Subsidized , Direct Subsidized Consolidation Loans, Federal Subsidized Stafford Loans and Federal Subsidized Consolidation Loans.

  
  

• Unsubsidized Loan
  A loan for which a borrower is fully responsible for paying the interest regardless of the loan status. Interest on unsubsidized loans accrues from the date of disbursement and continues throughout the life of the loan. Unsubsidized loans include: Direct Unsubsidized Loans, Direct PLUS Loans, Direct Unsubsidized Consolidation Loans, and Federal Unsubsidized Stafford Loans, Federal PLUS Loans, and Federal Unsubsidized Consolidation Loans.

  
  

• Variable Interest
  The rate of interest charged on a loan that changes annually and fluctuates with a stated index.

  
  

• Verification Certification
  The process by which a consolidation lender requests that a loan holder certify a loan's payoff balance.

  
  

• William D. Ford Federal Direct Loan Program (Direct Loan Program)
  The Federal program that provides loans to eligible student and parent borrowers under Title IV of the Higher Education Act. The loan programs include Direct Subsidized Loans, Direct Unsubsidized Loans, Direct PLUS Loans, and Direct Consolidation Loans. Funds are provided directly by the federal government to eligible borrowers through participating schools.