Student Loans – Which One Is For You?

Students and families are often confused with the variety of options available when it comes to financing a college education. There are a myriad of options, from college scholarships and grants to federal and private student loans.

As part of the Higher Education Act of 1965, President Lyndon Johnson created this law which was intended “to strengthen the education resources of our college and universities and to provide financial assistance for students in postsecondary and higher education.” This increased all sources of federal funding provided to universities and added in grants and other forms of financial aid.

The Federal Stafford Loan is available to both undergraduate and graduate students enrolled at least half-time at a college or university accepting federal aid. This is a need-based program in which undergraduates may borrow up to $5,500 per year in subsidized funds based on academic level and graduate level students may borrow up to $18,500 per year (up to $8,500 in subsidized funds and the remainder in unsubsidized funds). The funds are sent directly to the school and are applied to the student’s account. To ease the financial burden, payments are not required until six months after the student graduates. When looking to apply for a Stafford Loan, students should see what types of borrower benefits each lender is offering. As these student loans are all fixed at the same interest rate set by the U.S. Government, lenders are offering incentives to borrow by way of discounts, such as waived fees, rate reductions for early payment and cash back.

While a Federal Stafford Loan is certainly a necessary start, it doesn’t always cover the entire cost of education. A Parent PLUS Loan is a common way that parents contribute to their child’s education. This credit-based loan allows parents to borrow the total cost of undergraduate education including tuition, room and board, supplies, college fees and more, minus any other aid received. Once the loan has been put into the student’s account at the school, repayment begins shortly thereafter, at which time the student loan consolidation process can be performed. At a fixed interest rate, the Parent PLUS Loan is an easy and cost effective solution to help bridge the gap between Stafford Loan funding and the cost of education.

For many years, graduate students were only given Stafford Loans as a federal loan option for funding their often costly education. The difference was made up through home equity, savings, salaries and private loans. However, the Graduate PLUS Loan is a new product that became available to graduate students in 2006. Graduate students with good credit can apply on their own signature for a loan up to the cost of education, minus any other aid received. The Graduate PLUS Loan can be applied to tuition, room and board, education supplies, lab and travel expenses. The interest rate is fixed and payments are not required while enrolled in school. Upon graduation, borrower benefits kick in to help students save money during repayment. Or a student may save even more by consolidating this loan using the federal loan consolidation program. The Graduate PLUS Loan truly provides graduate students with a great option to making their graduate education dreams a reality.

The Perkins Loan is another federal loan available to both undergraduate and graduate students offered on the basis of financial need, other aid received and availability of funds at each school. The federal government lends schools funds for distribution to its neediest students. The school, therefore, is the lender, and undergraduates may be awarded up to $4,000/year and graduates may be awarded up to $6,000/year. These loans need to be repaid directly to the school and have a fixed 5% interest rate since the program was started. Students can take advantage of a nine-month grace period and a ten-year repayment term. However, if consolidated with any existing federal student loan, including Stafford or Graduate PLUS Loans, this can extend the repayment term. Consolidation has been mentioned a few times and it’s really in the best interest of students to take advantage of this upon graduation. Each federal loan, on its own, has a 10 year repayment term, regardless of total loan debt. Consolidation fixed the interest rate and extends the repayment term, allowing more time to repay an often hefty federal loan debt.

Named for Senator Claiborne Pell, the Pell Grant was established to provide funds that don’t need to be repaid directly to the neediest students. This is because it is a grant and not a federal student loan. However, like the Stafford and Perkins Loan, eligibility is based on need, as determined by the cost of attendance and expected family contribution. Since 2003, the maximum Pell Grant award has been $4,050 per academic year. However, due to the rising cost of education, many question why the Pell Grant award has not also increased. The Pell Grant covers, on average, one-third of the yearly cost of education at a public four-year institution. However, twenty years ago, it covered close to 60%. On February 15, 2007, in an attempt to slowly combat this issue, President Bush signed legislation into law that would increase the Pell Grant to $4,310 for the 2007-08 academic year. The following year, the grant will increase to $4,600 and up to $5,400 by the year 2012. These advances are certainly helping students and families fund the cost of education, especially as tuition costs continue to rise

Private student loans have gained popularity over recent years as federal funding hasn’t quite met the entire cost of education. There are many other costs associated with education, besides just tuition. Commuting students need to cover transportation costs somehow. City campuses don’t always guarantee housing, which forces students to find an off-campus apartment, often with high rent costs. There are costly textbooks to purchase, lab supplies and flights home that aren’t always covered by traditional financial aid. Private loans originate to students by a bank or other financial institution, unlike federal loans. Private student loans also offer similar benefits to students as a federal loan, such as deferred payment until graduation, different loan repayment terms, and borrower benefits. The interest rates on private loans vary from company to company and are, usually, on a basis of credit. Co-signers are a great way for a student who may have limited or no credit at all to get this loan. Because of the varying private loans available, most parents and families “shop around” until they find their ideal solution.

How To Get A Student Loan With Bad Credit

Tough economic conditions and rising prices have led more individuals to accumulate debt before they have even started their studies. While bad debts can place limitations on a number of financial options, it does not have to prevent you from furthering your education. A fair amount of research can aid in finding reputable service providers offering a bad credit loan.

Bad credit does not only refer to those with outstanding and unmanageable debts, but also persons with no repayment history. Although reputable companies will not advertise loans to individuals with debts, there are alternatives that are made available to cover the funds for college fees. Some of the options for those looking to borrow such finances include scholarships, financial aid, private lenders, and federal aid among others.

One has the option to apply for funding from the federal government as credit checks are not required. A number of application requirements will need to be met and receiving aid may be lengthy and difficult due to the number of individuals often seeking such aid. There are alternative choices available if such options are not applicable for your needs.

There is the option to seek loans from a private lender such as a bank. Your credit score will be used to determine whether you qualify for funding where higher scores are considered more favorable and trustworthy when it comes to repayments. Unfortunately if you possess bad debts or your financial history is non-existent, these scores will be significantly lower and you may not be approved.

An alternative is to use a cosigner who will agree to pay the loan for you if payments are not made regularly. It is important to select a parent, guardian or other trusted individual with a good FICO score to ensure that the finances are approved. This is one of the most common methods for obtaining the necessary funds to provide for your education.

If you are able to wait for a period of time before pursuing your studies consider obtaining finances from a financial lender to pay off debts and improve FICO scores. A personal loan may be obtained whether secured or unsecured depending on your financial situation. The aim is to pay off debts to prove to lenders that you are capable of responsible financial practice and fund approval.

A bad credit loan can be obtained with a fair amount of research into the options available. Consider a cosigner when applying for funds through a bank or work towards improving debts and payment history. It is important to assess the most applicable solutions before making a final decision.

Finding Scholarships For Hispanics and Latinos

A college education is something that people of all nationalities seem to value. This is made evident by the increase in the number of Hispanic students applying for college scholarships and grants. Funding for scholarships for Hispanics are provided by a number of private organizations as well as Fortune 500 companies.

Hispanics are Americans originating from Hispanic countries in Spain or Latin America. Scholarships and grants for Hispanics are provided by private organizations and the government to provide monetary aid for those who seek higher education but lack the financial capability. You can start your search for scholarships for Hispanics by checking out the Minority Affairs Office of the college or university where you plan to seek admission. At the same time, you may also apply for regular college scholarships.

The Hispanic Scholarship Fund (HSF) provides scholarships for Hispanics. This organization receives millions of dollars in donations from big corporations including Procter & Gamble, McDonald’s and Wal-Mart. In collaboration with Procter & Gamble, HSF provides financial aid to Hispanics and Latinos who have an interest in the fields of science, technology, mathematics and engineering. The scholarship is worth $2500. HSF also partners with Macy’s to help Hispanic students who excel in academics. The scholarship amount is $5000. In addition, students who qualify for the scholarship have the opportunity to take part in a summer internship program at Macy’s.

There is also a special scholarship for Hispanic women called the HSF/Goldman Sachs 10,000 Women Business Leadership Awards. This scholarship awards $10,000 and is offered to Hispanic women with an interest in business and entrepreneurship.

The Gates Millennium Scholars Program aims to promote academic excellence and provide minority students with the opportunity to reach their highest potential. To accomplish this, the scholarship program provides financial aid to minority students. Applicants can belong to any minority group, including Hispanics and Latinos. Their GPA must be at least 3.3. The scholarship is open to students enrolling full-time in their first year at an accredited university.

Other scholarships for Hispanics are available. The Congressional Hispanic Caucus Institute Scholarship Program offers financial aid for students with an interest in public service and who have done community services. Another scholarship is the First in My Family Scholarship program for Hispanic students who are first in their family to seek higher education.

Various scholarships are also available for Latinos and Hispanics who want to study journalism, law, or other fields of study. A scholarship provides money that does not have to be paid. Obtain as many scholarships and grants as you can to lessen the financial burden of a college education.

Need Free Money for College? Avoid These 3 Mistakes

Do you know the 3 biggest mistakes both parents and students make when looking for free money for college that destroys their results? If you want to dramatically increase your chances of having your child’s college tuition and fees covered by scholarships and other college financial aid while avoiding these 3 college funding mistakes, read this immediately because the mistakes and what to do instead are inside this article.

Mistake #1: Starting Too Late

What is the mistake? The mistake here is to believe that students need to wait until they reach their junior or senior year in high school before locating different sources of free money for college.

Why is it a mistake? This one is a mistake because the longer a student waits before getting started, the less time they actually have to research awards they will qualify to receive.

What you should do instead? Regardless of how old your child is, start now by creating a list of college funding opportunities. As your children grow up, that list will grow over time as well.

Mistake #2: Doing The Work Themselves

What is the mistake? The mistake here is to push yourself to find all the money for college you need by yourself. This leads to overwhelm and before you know it, you and your child have given up hope.

Why is it a mistake? This is a big mistake because to win at the game of finding free money for college, you will want to identify ways to accomplish this without having to do all of the legwork yourself.

What you should do instead? Relationships are key here. Try building a relationship with the college advisor at your child’s school and ask for email updates if any new scholarship award should cross their desk. This person is usually your greatest resource.

Mistake #3: Not Knowing The Numbers

What is the mistake? The mistake here is to find and apply for 30 or less scholarship awards to help you pay for college.

Why is it a mistake? This is a mistake because even the very best student will win less than 3% to 5% of awards for which they apply. With that said, if a student locates and applies to 3 college scholarship or college funding opportunities that is 90 or so over the course of the month.

What you should do instead? Get aggressive about finding as many credible sources of free money for college. Set a daily or weekly goal and stay with it until the question of how to pay for college quickly becomes a thing of the past.