Student Loan Grace Periods End

The grace period on student loans to those who graduated last May has ended and it's time to start paying them back. That's ok if you have landed a job that actually pays you enough money to live on, but what about those who either haven't found a job or your pay isn't adequate to subsist on?

You do have a few choices, but one of them is NOT burying your head in the sand and ignoring the situation. That will only put you into default, hurt your credit rating (not a good idea for anyone, but especially someone just starting out) and possibly lead to legal action. Get in touch with your lender and explain your situation.

One possibility is student loan deferment. This is a temporary suspension of loan payments for various reasons including reenrollment in school, unemployment, or economic hardship. For your subsidized loans, you won't need to pay interest while the deferment is in place. For non-subsidized loans, you are responsible for the interest added during your deferment. If you are unable to pay it, your loan will be recapitalized and the interest added into the total you owe.

Even if you aren't eligible for deferment, you may be able to use forbearance which is a temporary postponement or reduction of payments for a period of time because you are experiencing financial difficulty. Forbearance may be granted by your lender for 12 months at a time up to a maximum of three years.

Student loan forgiveness may be possible in exchange for service in various organizations such as Peace Corps, VISTA, Military Service and also by agreeing to teach in certain underprivileged or low income areas as defined by the Department of Education.

Bankruptcy is probably not a very good option. Not only will it hinder you going forward since it remains on your credit reports for years, but the student loans are not usually discharged in a bankruptcy and you will still end up owing the loans.

Bottom line...if you are having trouble paying your student loans, talk to your lender as soon as possible. Don't wait until you are already months in arrears.

Technorati Tags: College Loans Financial AidPaying for College Ensuring Continued Access to Student Loans Act of 2008 Stafford Loans

KFC Colonel's Scholars Program Scholarships

You will have to hurry for this one. The KFC Colonel's Scholarship application deadline is February 10, 2010. This scholarship awards up to $5,000 per year towards tuition, fees, books, room and board. You may be eligible if you are graduating high school between 12/1/09 and 8/31/10 and are carrying at least a 2.75 GPA. For more information on this scholarship, check out KFC Colonel's Scholars

Recently added and updated pages at College Scholarships, Loans & Grants
KFC Colonel's Scholars
ACG Academic Competitive Grant
Stafford Loans

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FAFSA - The time to prepare is now.

We're almost through January and you should be preparing your FAFSA now. Though the Department of Education allows you to submit through June 30, 2011, for the 2010-11 academic year, many states and colleges have a deadline in February or March. The sooner you get it in, the better your chances of receiving college funding. The reason for this is many colleges have a limited amount of funding and they will begin doling it out to qualifying students early. Once the money is gone, you're out of luck.

A couple of things to remember...

The Federal FAFSA website is at http://www.fafsa.gov. If you come across sites with a .com or other ending, you are at a commercial site and they will probably charge you to do your FAFSA. Go to the site above and you can submit for FREE.

If you don't have your W2's or 1099's yet, you can still do your taxes with estimated numbers and file. Should the numbers change significantly, you can go back and submit an amended FAFSA when you get the final numbers.

Here is a listing of states with early deadlines for FAFSA:

February - Connecticut, Tennessee.
March - California, Idaho, Indiana, Kentucky, Maryland, Michigan, Mississippi, Montana, North Dakota, Oregon, Rhode Island.

Some of these are the 1st of the month, so check it out and start filling out now. There are other states who haven't posted definite deadlines, make sure you check with your financial aid administrator.

For more information, you can check www.college-loans.us/fafsa.html.

The American Recovery and Reinvestment Act of 2009

As President Obama pushes his economic spending package, what will it mean for college students and their families? Though the bill could still see amendments, here are a few of the possibilities:

Hope Scholarship

For 2009 and 2010, the Hope Scholarship Credit shall be an amount equal to the sum of (A) 100 percent of so much of the qualified tuition and related expenses paid by the taxpayer during the taxable year (for education furnished to the eligible student during any academic period beginning in such taxable year) as does not exceed $2,000, plus
(B) 25 percent of such expenses so paid as exceeds $2,000 but does not exceed $4,000.
So, the Hope may increase temporarily to a maximum of $2,500 per year.

Pell Grant

The maximum Pell Grant for the 2009-10 school year will be $4,860, an increase of $500 over the 2008-09 Pell. But, the College Cost Reduction & Access Act (CCRAA) added $490 to that top award so the maximum award should be $5,350. The program will be fully funded, so there will be no award reductions to applicants meeting the requirements.

Stafford Loans

Unsubsidized Stafford Loan limits could increase by $2,000. This will allow students to have a lesser need for private loans which might be at a significantly higher cost.

Federal Work-Study Program

Federal Work-Study will be funded with $490 million to be distributed to colleges. These must be 25% matched with non-Federal funds.

Special Allowance Payment (SAP)

Lenders who participate in the Federal Family Education Loan (FFEL) program, receive a subsudy known as a Special Allowance Payment (SAP) to ensure lender participation. During the current economic crisis, the SAP decreased to the point where lenders dropped out of the program. In the American Recovery and Reinvestment Act of 2009, the SAP calculation will be tied to the London Interbank Offered Rate (LIBOR), which should boost it back to levels that will provide stability in the student loan market.


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Kentucky Scholarships, Oklahoma Scholarships, Delaware Scholarships, West Virginia Scholarships, North Carolina Scholarships, West Virginia Loans and Grants

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Department of Education Announces College Loan Plan

Secretary of Education Margaret Spellings, along with Secretary of the Treasury, Henry Paulson, announced that the Administration has approved a plan that will ensure that any qualified student will have access to student loans during the upcoming school year.

Building upon the recently passed Ensuring Continued Access to Student Loans Act of 2008, the plan will insure short term liquidity for those lenders unable to procure lending capital through their regular means, as well as a loan purchase commitment, where the Department of Education will purchase new federal loans originated for the 2008-09 year. Lenders will have until September 30, 2009, to decide if they will sell the loans to the Department of Education. So, if economic conditions improve, the lenders may still decide to hold the loans themselves.

The DOE will also utilize, if necessary, the Lender of Last Resort program, which would provide federal advances to guaranty agencies if theere are students unable to get FFELP loans to students otherwise unable to get them.

The Department has also committed to doubling Direct Loan origination volume from $15 billion to $30 billion, if necessary.

Technorati Tags: College Loans Financial AidPaying for College Ensuring Continued Access to Student Loans Act of 2008 Stafford Loans Lender of Last Resort Program Margaret Spellings

Pennsylvania Students Scramble for School Money

Pennsylvania college students will be scrambling to fund their educations this year. The Pennsylvania Higher Education Assistance Agency (PHEAA) announced earlier that they would not be participating in the Federal FFEL program during the upcoming year. This means that they will no longer be making Stafford, Parent PLUS, Graduate PLUS, and Consolidation loans. While PHEAA says this is temporary, there is no date set for a return to the program.

There are still many lenders taking part in the KeystoneBEST loan program and PHEAA will pay the 1% federal default fee for lenders taking part in the program. This includes the Stafford Loan, the Parents Loan and the Graduates Loan.

PHEAA also announced recently that student grants for the 2008-09 school year may be reduced by up to $750 and fewer students may receive the grants. While there is talk about the legislature coming up with some money to make up the difference, don't hold your breath. Many there don't seem happy with PHEAA.


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May 1, 2008 - House and Senate Pass Ensuring Continued Access to Student Loans Act of 2008

The House of Representatives and the Senate this week passed the Ensuring Continued Access to Student Loans Act of 2008 and cleared it to the White House where President Bush is expected to sign it into law. Some of the highlights of the legislation are:

There will be an increase of $2,000 to the maximum annual unsubsidized Stafford loan amounts that may be provided to undergraduate students under the Federal Family Education Loan (FFEL) program. Dependent undergraduates will be allowed to borrow up to $31,000 in total and independent undergraduates up to $57,500 through their college years.

Parents who borrow through the Federal PLUS Loan program will be able to defer loan principal repayment for up to six months after their student has graduated or stops carrying at least one-half the normal full-time academic workload.

More news for PLUS borrowers. Those who are no more than 180 days delinquent on their home mortgages, and no more than 89 days delinquent on the repayment of any other debt, who normally would be ineligible for the loans due to their adverse credit history will be able to meet a specified extenuating circumstances requirement making them eligible for the loans. This section will cover loans made between July 2008 and June 2009.

The Department of Education may designate certain guaranty agencies to be lenders-of-last-resort and appropriate the necessary funding to them.

The bill passed the Senate by unanimous consent on April 30 and the House by a vote of 388-21 on May 1.

Recently updated pages at college-loans.us include College Loan News

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Cornell University and Northwestern University to Eliminate Student Loans for Needy Students.

This past week found both Cornell and Northwestern announcing plans to eliminate student loans from some financial aid packages starting next year.

Cornell will be eliminating student loans this year to students with a family income below $60,000 and next year will extend it to those incomes below $75,000. Students with family incomes up to $120,000 will find their student loans capped at $3,000 per year.

Northwestern will be eliminating student loans to the neediest students. This program will not be tied to a specific family income. Even ungrads who still need to take out subsidized Stafford Loans or Perkins Loans will find those loans capped at $20,000 over four years.

Holy Cross to Offer Free Tuition to Worcester Residents
Qualified Worcester, Mass, residents wil receive free tuition to the College of the Holy Cross. Beginning in the 2008-09 school year, Worcester students with a family income under $50,000 who are accepted as students at Holy Cross, will qualify for the free tuition program.

Cal Grants Available

California students should be applying now for the Cal Grants. March 2nd is the deadline for the FAFSA and the Cal Grant GPA Verification Form. This is free money and it belongs to you, so don't wait until the last minute. More info at CalGrants.org


Recently updated pages at College Scholarships, Loans and Grants

Latest College Loan News
California Scholarships
Utah Scholarships

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AAA Student Loans

So I'm reading the AAA(American Automobile Association) monthly paper, Horizons, and I came to an ad which I should have noticed long ago, but didn't. AAA has a Student Lending Program and as an AAA member, you can qualify for a AAA Federal Plus Loan at a rate as low as 6.50% and a AAA Federal Stafford Loan at 3.80%.

The standard Federal Plus Loan rate is 8.5% and AAA members can save 1.0% upon disbursement and another 1.0% for setting up automatic electronic payments.

The standard Federal Stafford Loan rate is 6.80%. AAA members can save 1.0% for setting up automatic electronic payments and another 2.0% after 36 consecutive on-time payments.

You can check it out at AAA Student Loans or call them at 1-888-422-2536. Note that it is for AAA members, but in my opinion, the AAA membership is well worth it anyway. It costs me about $120 per year for my whole family. Individual memberships are quite a bit cheaper.

Here are a few pages on College Scholarships, Loans and Grants that have been updated recently:

Alabama Scholarships
Arkansas Scholarships
Montana Scholarships
Nebraska Scholarships
Nevada Grants and Loans
New York Grants and Loans

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