Student Loan Deferment and Forbearance

You graduated last May and you still haven't found that job paying the big bucks, and now Uncle Sam wants his money for all those great student loans you got to get you through college.

The one thing you don't want is to fall into default. If you know you won't be able to keep up with the payments due to financial hardship, get in touch with your loan servicer and find out how to apply for either deferment or forbearance. Don't let it get to default, because then your options become very limited.

Upcoming Scholarship Deadlines

Kohl's Cares® Scholarship Program is open for nominations from February 1 through March 15, 2012. Children from 6-18 who are not yet in college may be eligible for this scholarship. Winners will be children who have volunteered and made their hometowns a better place to live. Scholarships range from $1,000 for regional winners to $10,000 for national winners.

Recently updated pages on College Scholarships:

Deferments and Forbearance
Student Loan Offset

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New Federal Budget Could Mean Trouble for College Loans and Grants

When President Obama sends his proposed budget to the Congress on Monday, there could be changes included for Pell Grants and Perkins Loans.

According to cnn.com, the administration is looking to save $100 billion over ten years by making a couple of changes. These changes would first allow only one Pell Grant per year instead of the two now available (one for the regular school year and another for the summer session) and also stopping the subsidy on loan interest for graduate students. Implementing these changes would allow the maximum Pell Grant to be held at the current $5,500.

The Boston Globe reported there is concern over the Perkins Loan program which is set to expire in 2014. Without the program, hundreds of thousands of students would be forced to find alternative funding, which would probably mean higher cost private loans. Hopefully there will be good news about the program when the President's budget hits the hill.

Upcoming Scholarship Deadlines

Buick Achievers Scholarship Application deadline: March 31, 2011. However, students getting their applications in by 11:59 p.m. CT, February 25, 2011 may receive early consideration for five of the Buick Achievers National Scholarships.

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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

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.

Connecticut Announces New Student Loan Program

Governor Rell announced a new partnership between Connecticut and it's credit unions that will provide student loans at a low rate of interest. As much as $17.5 million could be devoted to the program which will offer interest rates as low as 6% and 5.75%.

Those institutions offering loans at 6% per year will also be able to defer payment for one year, those offering at 5.75% will not have deferred payments.

Drink Milk? Get a Scholarship

This one is called a contest, but the winners (25 of them) will receive scholarships of $7,500 and a trip to the awards weekend in Orlando or another place to be named by the sponsors. The contest is called the SAMMY's (SCHOLAR ATHLETE MILK MUSTACHE OF THE YEAR) and one of the requirements is to write an essay of up to 250 words about "How Milk Has Helped In My Academics and/or Athletics".

Get more information on the SAMMY's at SAMMY's Rules Page.

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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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Kentucky Higher Education Student Loan Corp may stop Student Loans

The Kentucky Higher Education Student Loan Corp, also known as the "Student Loan People", is a non-profit organization offering student loans to Kentucky students. According to www.courier-journal.com, they announced Friday that as of May 1, the KHESLC would no longer be making loans to first time borrowers. Those with applications in by May 1 would still be able to get their loans, though no word on what would happen to these borrowers next year if the KHESLC remains out of the market.

With more and more student lenders dropping out of the college loan arena, students are going to have to be going to private loans that may run at much higher interest rates, thus raising the overall cost of a college education at a time when many students are already finding it difficult to pay.

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New Hampshire Higher Education Loan Corporation Suspends Alternative Loans

In a press release dated March 4, the New Hampshire Higher Education Loan Corporation (NHHELCO) announced that they would suspend their alternative student loan program as of March 11, 2008.

NHHELCO stated that they would be focusing on the Federal Student Loan Programs. Previously, in January, NHHELCO suspended the Federal Consolidation Loan program. Many agencies have had to cut back on programs due to difficulty in securitizing their student loan debt.

Last year there were 4769 New Hampshire students who took advantage of NHHELCO private student loans. All those students will have to find alternative funding this year, most likely at a higher cost.

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Stanford University Announces Plan to Pay Tuition For Lower Income Students

If you've been putting off applying to Stanford because of the $47,000 price tag, take another look. Stanford recently announced a new plan that will pay the tuition ($36,000) for students with family incomes below $100,000. Students with a family income below $60,000 will not be expected to pay anything for tuition, room or board. The program will also eliminate the need for student loans.

As the latest entry to the number of colleges and universities dipping into the endowment to try and bring the cost of education back to the realm of possibility for most, Stanford has upped the ante with this far-reaching plan. Hopefully many other institutions with huge endowments will follow suit.

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College Loan Market Tightens

As the 2008-09 school year approaches, many students may end up paying more for their college loans, if they are available. There will be fewer lenders in the student loan market and the ones that remain won't be prone to giving discounts for autopay or ontime payments as in previous years.

The MI-LOAN alternative loan program of the Michigan Higher Education Student Loan Authority was temporarily suspended this week as sufficient funding for the program was not available.

The Montana Higher Education Student Assistance Corp failed to sell about $390 million in bonds for student loan financing. Though the failure to sell should not impact Montana student loan financing for the 2008-09 school year, it certainly will raise costs for the MHESAC.

According to the Des Moines Register, the Iowa Student Loan Liquidity Corp. will be unable to fund student loans properly in 2008-09.

Several other state student loan programs have reported difficulty in funding their programs in the usual way and several major school loan lenders like College Loan Corp and Sallie Mae will be either curtailing student loan programs or tightening loan qualification requirements. All of this points to lower availability and higher costs for student loans.

Be sure to get your financial aid applications in as early as possible this year. You don't want to be at the end of this line.

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Wellesley College Announces Plan to Reduce or Eliminate Loans

Wellesley College announced on February 7 a new financial aid plan that would eliminate loans for students with family incomes below $60,000. The plan would also reduce by one third the loans for those students with a family income between $60,000 and $100,000, which would in effect limit student loans to these students to a totla of $8,600 over four years.


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Dartmouth College Announces Tuition and Loan Elimination Plan

Dartmouth College President James Wright announced today several major additions to the school's financial aid program. Beginning with the 2008-09 school year:

All students with a family income below $75,000 will go tuition-free. They may also be eligible for scholarships to help cover other expenses such as room, board, books and miscellaneous expenses.

Scholarships will be replacing grants for incoming scholarship students beginning with the Class of 2012. Current students will see their loans cut by 50%.

Starting with the Class of 2012, Dartmouth will extend it's need-blind admission policy to all international students. Currently students from the US, Canada and Mexico are covered by the policy.

Financial aid recipients will be eligible for a $2,950 scholarship in their junior year to assist them in taking advantage of possible research or internship opportunities.

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Bowdoin College to Eliminate Student Loans

Bowdoin College of Brunswick, Maine, announced Friday that beginning with the 2008-09 school year, they will replace student loans for all new and current students receiving financial aid.

Bowdoin's program is among the most ambitious of the schools that have anounced similiar no loan plans. Many others have reduced loans for current students, without eliminating them altogether. Still others have capped the family incomes that would be eligible.

Bowdoin's plan may allow gradsuates to make a job choice based on desire, rather than making enough money to repay the student loans.

Florida May Eliminate College Grants for Thousands

With budget issues reaching crisis levels, the governor's budget proposal seeks to eliminate grants for Florida students attending private colleges and universities under the Florida Resident Access Grant Program (FRAG).

Technorati Tags: College Grants Financial AidPaying for College Student LoansCollege LoansFlorida GrantsBowdoin College

2008-09 Free Application for Federal Student Aid (FAFSA)

OK, it's time to start thinking about the FAFSA again. If you (or your child) are planning on going to college in the fall, and you will be looking for financial aid, the FAFSA is your first stop. All of the following programs require a FAFSA, as well as many state run programs and privately funded grants and scholarships.

• Federal Pell Grants
• Federal Stafford Loans
• Federal PLUS Loans
• Campus-Based Programs
• Federal Supplemental Educational Opportunity Grants
• Federal Work Study
• Perkins Loans

You can either fill out a paper FAFSA or do it online. For the 2008-2009 school year, you can submit it any time after Jan 1, 2008 up until June 30, 2009. You will want to fill it out and submit as soon as possible. Many programs have limited funding and the earlier you apply, the better chance of getting your share.

Before you can fill out the FAFSA online, you will need a PIN (Personal Identification Number). If you have one from last year, it should still be good. If you don't remember or this will be your first year in college, you can get one at http://www.pin.ed.gov/. After you get your PIN, you will also need your income tax forms as soon as you have them done. If you are still your parent's dependent, you will need their tax forms as well. Employers are supposed to get your W-2 forms out by January 31, but you can get a head start by checking your final paystub of the year. It will usually have your unofficial yearly totals of income and taxes.

Once submitted, as long as everything is in order, you will receive an Student Aid Report (SAR) which shows all the answers that you submitted on the FAFSA. Make any corrections necessary, or if ok you may submit either electronically or sign the SAR and mail back. Your SAR will also include your EFC (Expected Family Contribution) which is used to determine your eligibility for federal financial aid.

Now is a good time to start preparing for next year. Get your PIN now if you haven't already.

Good luck

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Wisconsin Students to Benefit from $175 Million Gift to Fund for Wisconsin Scholars

On December 18, the Fund for Wisconsin Scholars, Inc. (FFWS) announced a gift of $175 million from John P. and Tashia F. Morgridge to provide grants for eligible, lower-income, Wisconsin public school graduates who will be attending a Wisconsin public post-secondary school.

The FFWS estimates that during the 2008-09 academic year about 2,000 grants will be awarded, ranging from $1,000 to $5,000. In ensuing years, more than 3,000 grants should be awarded. You can get more information at the Fund for Wisconsin Scholars website.

Denver Public School Students | DSF Scholarships

The Denver Scholarship Foundation was begun last year with the purpose of providing scholarships to any Denver students who needed them. Last year 170 kids received scholarships and more than 200 received a free laptop computer fro the DSF.

The Foundation is in the process of raising enough funds to allow the awarding of scholarships to all needy Denver high school graduates who meet the requirements. The application deadline will be March 31, 2008 and the applications should be on the DSF website by the end of January. Get more information about the DSF grants and the requirements at the Denver Scholarship Foundation website.

Haverford College Eliminates Student Loans From Their Financial Aid Packages

In a letter from President Stephen G. Emerson, Haverford College of Haverford, PA, announced that it will eliminate all student loans for incoming freshmen and will reduce the loans of continuing students.

The program is being funded by a new endowment fund called the Next Generation Fund. Haverford graduates who benefit from the new grants will be asked to contribute in the future as they are able to allow future student to benefit as they have.

Here are the latest updates on College Scholarships, Loans and Grants.

Wisconsin Grants
Colorado Grants
College Loan News


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Tufts University to Replace Some Loans With Grants

Tufts University in Medford, MA, announced today that they would begin replacing loans with grants for all undergraduates whose family income is below $40,000. Members of the Class of 2011 will be the first to benefit from the new program.

University of Pennsylvania to Replace Loans with Grants

On December 17, the University of Pennsylvania announced that they would be replacing all student loans in financial aid packages with grants. There are about 4000 undergraduates and about 50% of them currently have student loans included in their aid packages.

Beginning in September, 2008, students with a family income below $100,000 will receive grants in place of loans. Those with family incomes above $100,000 will receive a 10% reduction in their loan amount.

By the fall of 2009, all students will be receiving loan-free financial aid packages.

Here are the latest updates on College Scholarships, Loans and Grants.

Ben Carson Scholarships
College Loan News


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Student Consolidation Loan Checklist

If you are graduating college soon, now is the time to begin preparations for your student consolidation loan. You have a six month grace period after graduation before payments begin, but the consolidation loan application process can take several weeks, especially if you haven't gathered all your loan information and decided on a lender.

Inventory your student loans. Make a list of all your loans, including type of loan, lender, the amount of your loans, interest rates and the amount of your payments. Review your loan documents, contact your lenders or loan servicers or go to the National Student Loan Data System (NSLDS) website. If you don't know your PIN (Personal Identification Number) to log in, you will have to request a new one and it will be mailed to you. Expect to wait a week or two for the PIN to arrive, so best to get it done early.

Read the rest of this article at Student Consolidation Loan Checklist

Oregon to Double Oregon Opportunity Grant Funding

The Oregon Legislature has more than doubled the funding for Oregon College Grants for the 2008-09 school year meaning there will be many more students eligible to receive Oregon Opportunity Grants. Check requirements at http://www.getcollegefunds.org/ong.html.



Here are the latest updates on College Scholarships, Loans and Grants.

Louisiana Grants and Loans
Maryland Grants and Loans
North Carolina Scholarships
Maryland Scholarships

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