What Happens If I Default on My Student Loans?

More than 1.1 million Americans defaulted on their federal student loans for the first time last year. When you default on federal student loans, the consequences are severe and can affect several areas of your life. You may experience consequences that include:

  • Wage garnishment: The Department of Education can garnish up to 15 percent of your disposable pay. Unlike private collectors, the Department of Education does not need a judgment to garnish your income.
  • Your balance increases: Your remaining balance immediately becomes due once you default. Unpaid interest and collection fees may also be added to your balance. The latter is especially true for borrowers with FFEL loans.
  • Reduced credit score: Loan servicers will report you to the three credit agencies if your loans remain delinquent for too long. You are also reported to the three credit agencies after defaulting. This can significantly lower your credit score. Having a low credit score can make it more difficult to secure employment, housing or other lines of credit.
  • You lose eligibility for financial aid: You are not eligible for federal financial while your loans are in default. Defaulting on your loans may cause problems if you plan on returning to school.
  • You lose eligibility for repayment plans: One of the major benefits of most federal student loans is that you can take advantage of income-driven repayment plans. You lose these options after defaulting on your student loans. In addition, you also no longer qualify for economic hardship deferments or forbearance.

Can I Get My Student Loans Out of Default?

Depending on your situation, it may be possible to get your federal student loans out of default. Borrowers generally have two options available – the Education Department’s loan rehabilitation program or converting your loans into a Direct Consolidation Loan. Both options may have pros and cons that are dependent on your individual situation.

If you choose loan rehabilitation, you must make nine monthly payments within 20 days of the due date for 10 consecutive months. For Perkins Loans, the requirement is nine payments for nine consecutive months. You can only use the loan rehabilitation program once. Once your loans are taken out of default, you can qualify for helpful repayment programs. In addition, records of the default are removed from your credit report.

Your second option is to consolidate your defaulted loans into a Direct Consolidation Loan. This will consolidate your loans into a single loan with a fixed interest rate. By consolidating your loans, you can exit default within a period of weeks instead of months. However, you may pay more over the life of your loan if your prior interest rate was lower.

How to Easily Pay Off Student Loans

No one said that paying off a student loan or getting a college education is easy. Everyone encourages us to go to school and get a great education, but, where are those same people when it is time to pay for it all? As we start to research aspects of getting our college education, we quickly see that every university worth going to requires us to pay a hefty sum. Many new university students must take on college loans to pay for school. There are many ways to pay off these loans, but, having a rich uncle or a rich father figure sure could help. Where is that sugar daddy that will help pay off the student loan? If you are the sugar daddy type, you already know that the sugar daddy and sugar baby relationship is extra special. As a sugar daddy who is seeking arrangements starts to do his research, he will see that there are many benefits to establishing a sugar daddy and sugar baby relationship. A sugar baby who is going to college will appreciate the allowance her sugar daddy gives her to help her pay off student loans. If there is one thing we can count on, the cost of tuition will continue to get higher each year.

When it comes to a world class education, financial aid and student loans seem to be how most students get through the university year. Every school suggests that the students get financial aid. As an example, Berkeley talks about the cost to attend which is around $40,000 as a base rate. As with every university there are more costs that get added into that figure. Some of those costs are tuition and fees, books and supplies, room and board, personal costs, transportation, health insurance and more. Students apply for financial aid and they get it, but, it is limited and the student has to take out more loan to pay for the education. Looking at all of these figures and the staggering cost, you start to wonder how the university student makes it without a sugar daddy in the first place. It is not uncommon for a university student to graduate with honors and experience a delay in getting their dream job or any job at all for that matter. The worst part is that these student loans and the money borrowed still drag on long after the graduate has left the university.

During the college education years, many young students look for a father figure that they can relate to. This figure head or Mentor can help them with financial issues like paying off debt associated with student loans or buying new clothes, school supplies and more. Most often this father figure, often called a sugar daddy, will establish a set amount of money for the student he is helping out. Many people wonder why this type of relationship is so easy for both parties to work with and the answer is fairly simple. Just like any relationship, the secret is open communication between the two people. For example, the sugar baby says to the sugar daddy something like, “I would like $300.00 spending money and I need $800.00 to help pay rent and $1000.00 per month for my student loan repayment.” The daddy suggests a figure he can live with based on his needs and the needs of the sugar baby. A winning situation is created with crystal clear communication and everyone is happy. Perhaps the reason these types of relationships work so well is that everything is talked about and agreed upon. Why shouldn’t it be? It is so much easier to plan your life when you have all the facts.

As with everything in life, including college, there can be a learning curve. As the student is experiencing this learning curve associated with adapting to university life, it is much easier for the student to adjust if that student does not have to worry about financial pressures. Many sugar daddy’s love seeking arrangements that allow them to help pay off student loans and get an inside look at the sugar baby’s university life style. Sometimes the sugar daddy is called a guardian and the sugar baby is called a brat. The term brat is often used because the guardian loves to take great care of the brat and spoil their brat rotten with all kinds of gifts, money and more. Both the brat and the guardian become very happy with the fact that they can set their own relationship standards and come up with any arrangement that suits them. There are many times when details of the arrangements are kept solely between the two consensual parties. However, there are also times when some issues are openly aired. One of the many issues that are freely talked about is that the two people involved are highly satisfied with the terms of the agreement. The guardian loves being able to spoil the brat and the brat loves to be spoiled by her guardian. They both love the fact that the relationship is on their terms and they are in complete control.

Having a drama free relationship that has no strings attached might be in the best interest of both people. Every year more and more university students are seeking arrangements that offer a beneficial circumstance for everyone concerned. A brat often looks to her guardian like he is a father figure. She will come to him for advice and offer him clear communication. She will often send him photos and video chat that will be a real treat for the guardian. A reality show this good cannot be scripted and is meant to be an enjoyable experience that becomes limited only by the imagination of the people involved. It is more fun to create your own real life show without all the drama that is associated with the wonderful world of television reality shows.

One of the greatest experiences that a college student can have is the experience of paying off student loans without the stress and worry. The real experience in getting the education is not in the stresses of loan payments and expenses. The real joy of the experience starts with the friends that are made and the fun that is being had by the student during their university years. For many young students, the experience of being around older, more experienced people helps to enrich the real world experience.

Having a sugar daddy or guardian is such a blessing, not just because of financial support. The guardian takes on the role of a father figure who is helpful to the university student in several ways. As a guardian you play a lot of roles. A guardian is a friend, a daddy, a support system and company for the student. A guardian helps a university student secure their potential and helps to save them from occurring debt and encouraging them to have some fun and gain some experience that is helpful in the world. Some of the social experiences that a guardian can help with are helpful for a university student later on in their dating years. It is the dream of every male to date a girl who is rich in worldly experience and well educated. Helping a student pay off student loans and enjoy life is an important part of the overall college experience, but, the experience goes so much deeper.

Much of the experiences that the guardian helps the brat with are going to become helpful in the working world too. The guardian helps to teach financial management skills because the brat must manage the allowance given to her. There are also the skills of time management. When the guardian tells the brat that he is sending a car to pick her up, be ready by eight o’clock, it teaches the brat to manage time, another important worldly skill. Other patterns come up that involve choices, like buying a red dress or a black one and weighing all the options that go with these choices. Just because the guardian is helpful and supportive that does not mean that the relationship is all fun and games, often the relationship is helping to teach important life lessons while keeping the brat in a protective environment. This type of education helps to establish the pattern that learning life lessons can and should be fun.

An important life lesson that is instilled throughout this whole process is that people help other people whenever they can. The brat knows that with daddy’s support she can worry about her studies and passing tests that are required of her. The daddy knows that he can reach out to the brat and she will send him some photos to give him an in-depth look into her personal and university life. This relationship of sugar daddy and sugar baby creates what everyone is looking for, that is, a creative, co -supportive relationship.

If you need to pay off your student loans, maybe the sugar baby lifestyle is right for you. On the other hand, if you love to adopt a brat and have the means, why not become a guardian? There are rewards on both sides of this relationship and there is way less drama. You owe it to yourself to check it out for yourself and see where you want to take it.

Education Loans – How to Get One?

It is needless to say that education is compulsory to everyone around. A man with no education suffers a lot of humiliations and negligence. However, with soaring prices of every commodity and services, receiving a good higher education has become an expensive affair. This is true many of you are not born with a silver spoon; you need to consider several times your financial status before you apply to study abroad for higher education. In the absence of any amenity you might have to suspend your educational plans.

However, now you can put all your worries at bay; education loans have been designed to fund your education and complete your studies without any financial difficulty. Now, you need not have to discontinue your studies due to the lack of money. A lot of financial institutions and local government authority aid you to seek educational loan for higher studies. You can apply for education loans despite of the fact you have a poor credit history. You need to get in touch with some lenders in the market who tackle with bad credit loans but they charge a high interest rate on such loans.

Education loans bear your tuition fees, accommodation fees, meal charges, transportation expense etc.

Today lots of universities provide its students financial assistance which is a great monetary help for finishing education. For a bright and hard working student scholarship programs are also launched by the college every year. This financial assistance depends upon the department, University and the course or program you are doing. Usually there is more financial aid for graduate levels rather than under- graduate programs and the degrees like Engineering, medical and physical science are given more preference as compared to management or social studies.

The federal loans or government loans are another option to complete your higher education and secure your tomorrow. Today government of many countries gives its students an incredible opportunity to go abroad for higher education without compromising with their dreams and future. To apply for government loans, you minimum age should be 18 year and must have a clean background. You can apply for government loans for seeking education in Medical, Engineering, Commerce or Management studies.

You can apply for education loan from the private banks as well but you should have a good credit record for that. These private banks have higher interest rate and they keep a very strong background check.

Once your loan is approved you may relax and finish your education without any worry of repaying the loan installments. It is mentioned on the document that your loan repayment starts once you have finished studies and have started working in a company. However, if due to some personal or professional reason you are not able to find a job immediately then you are given a grace period which could be between one to two year. Therefore, you get plenty of time to repay your bank loan and focus on your career.

Educational loan is provided for basic education and professional or technical education. The education loans have become an effective tool for the students to finish their education and make their career secured and safe. This is true education in US and UK lures most of the youngsters for world class environment and excellent job placements. You can now enjoy this quality education and global exposure by applying for education loans.

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.