The investment bank also agreed to extend a $1 billion credit line to First Marblehead, providing a crucial source of financing for the company. Shares of First Marblehead surged 66.4 percent on Friday, their largest one-day gain ever.
The sale will give Goldman a 16.7 percent stake in the company, which, along with the student-loan giant Sallie Mae, has been battered by the turmoil in the credit markets. The deal marks a homecoming of sorts for Goldman: the Wall Street bank helped take First Marblehead public in 2003.
First Marblehead and other servicers do not lend money to students. Instead, they bundle loans made by universities and banks into securities for sale to investors. Rising default rates and the spreading credit squeeze, however, have made it difficult to repackage these loans, sapping the company’s finances.
Even after the surge on Friday, shares of First Marblehead were still down almost 66 percent this year. Sallie Mae’s stock has dropped 59.3 percent.
Under the the deal, Goldman Sachs Capital Partners, the bank’s private equity arm, will pay $59.8 million to acquire securities that will convert into 5.3 million common shares at $11.24 each. After regulatory clearance, the firm will spend as much as $200.7 million to buy additional securities that will convert to 13.4 million shares at $15 each. The securities will pay no interest.
The investment bank will hold no more than 9.9 percent of First Marblehead’s voting shares at any given time, though it will have the right to name a director.
Separately, First Marblehead said it would eliminate its dividend after Friday. It also will take a charge of $170 million to $185 million after changing the way it accounts for its service receivables.
source:http://www.nytimes.com/2007/12/22/business/22goldman.html
Sunday, December 23, 2007
Student Aid Changes Could Ripple
When it comes to paying for college, cash-strapped families have had a few good tidings of late. A string of elite, private colleges have announced major boosts in financial aid.
Duke kicked things off two weeks ago with a plan to spend an extra $13 million on aid by capping loans and eliminating any required parental contribution from families earning under $60,000. Two days later, Harvard said it would tap its $35-billion endowment to eliminate loans entirely from its student aid and replace them with scholarships. It will also spend millions helping families that are better-off, even those earning well into six figures.
Now, nobody wants to be left behind.
The University of Pennsylvania, Pomona, Swarthmore, Haverford and Tufts all announced they would eliminate loans — more than doubling the small number of schools promising all students a debt-free graduation.
About time, some say. At four-year private colleges, average tuition and fees rose 6.3 percent this year to $23,712, according to the College Board.
At elite private schools, the full list price, with room and board, is typically double that. Meanwhile, endowments at those places have soared. Harvard's increased nearly $6 billion last year — more than all but about a half-dozen schools have altogether. Michael Dannenberg, a scholar at the New America Foundation, notes that's also approximately the figure Congress spent this year to cut student loan interest rates from 6.8 percent to 3.4 percent — for the whole country.
So what's making elite schools more generous now?
Pressure to act on affordability has been building from several quarters, including parents, lawmakers, and alumni, some of whom think their alma maters have gotten greedy with their pricing power. And colleges jumped at once in part to grab attention during the season when high school seniors are making final decisions about where to apply.
The next question is how many families will feel the benefit. After all, the schools involved enroll the tiniest sliver of American college students. Fewer than one in five college students attend private institutions, and most of those attend less selective and expensive institutions than those lately in the news.
Says David Warren, president of the National Association of Independent Colleges and Universities: "There's no question when Harvard acts on any issue it has an impact. It's the stone in the pond and it will reach every institution."
The Harvards of the world set the tone for what other institutions will do, once they can afford it. And these latest announcements reflect a recognition in the top circles of higher education that college costs a lot even for middle- and even upper-middle-class families.
The latest initiatives clearly target that group. Most of these schools had already eliminated loans for the poorest students, so the benefits of these policies come further up the income scale. In Harvard's case, families earning more than 90 percent of the national average will see thousands of dollars in savings.
The colleges say they have grown increasingly convinced that there is an educational value in sparing students — at all levels — any worry about loan repayments. Jim Bock, who heads Swarthmore's financial aid and admissions offices, remembers what it was like to have fewer choices than his classmates because of his loan debt when he graduated from Swarthmore in 1990.
"Two people in the $120,000 range, they could both be factory workers, first-generation (immigrants), with no retirement savings," Bock said. "They could be two school teachers."
The announcements could pressure less well-off schools to start spending more on aid, too. That sounds like good news, and it is — for students and parents. But some experts worry it won't prove good for the overall cause of college affordability.
The problem is the money to appease and attract upper-income students may come from those who need it more. To boost their rankings and intellectual life on campus, colleges outside the highest echelon typically offer big discounts to some top students, even if they don't need it. Some worry these latest announcements will accelerate the trend towards "merit aid."
"The minute Harvard does that, a competitive scramble perforce is created," said Jack Maguire, a college consultant who says that — to his regret — he will likely be advising clients they'll have to make more use of non-need-based aid. "Folks have to use financial aid strategically in order to compete."
Donald Heller, a higher education expert at Penn State University, says the moves won't even be good for Harvard and its peers. He worries they will attract more upper-income students and crowd out poorer ones, who are already rare (about half of Harvard students pay the full price there, meaning their families earn more than the aid ceiling of approximately $180,000-$200,000 per year).
"If other institutions start to mimic what Harvard is doing, we may see poorer students crowded out at elite private institutions across the country," he said.
Ultimately, however, other factors will play a much bigger role in college affordability for most people than Harvard's policies for its 6,600 undergraduates.
For instance, maximum Pell Grants — the main federal aid program for low-income students — are set to rise from $4,310 to $4,731 this year under a spending bill passed Wednesday by Congress — though that's a $69 cut from what students had been promised.
But the biggest factor is the economy, says Dannenberg of the New America Foundation. Historically, when the economy falters, state funding for higher education is first to take a hit, and public college tuition soars.
source:http://ap.google.com/article/ALeqM5g4pfkSsPxbWscjlD8IXc9wiyQucwD8TMKA100
Duke kicked things off two weeks ago with a plan to spend an extra $13 million on aid by capping loans and eliminating any required parental contribution from families earning under $60,000. Two days later, Harvard said it would tap its $35-billion endowment to eliminate loans entirely from its student aid and replace them with scholarships. It will also spend millions helping families that are better-off, even those earning well into six figures.
Now, nobody wants to be left behind.
The University of Pennsylvania, Pomona, Swarthmore, Haverford and Tufts all announced they would eliminate loans — more than doubling the small number of schools promising all students a debt-free graduation.
About time, some say. At four-year private colleges, average tuition and fees rose 6.3 percent this year to $23,712, according to the College Board.
At elite private schools, the full list price, with room and board, is typically double that. Meanwhile, endowments at those places have soared. Harvard's increased nearly $6 billion last year — more than all but about a half-dozen schools have altogether. Michael Dannenberg, a scholar at the New America Foundation, notes that's also approximately the figure Congress spent this year to cut student loan interest rates from 6.8 percent to 3.4 percent — for the whole country.
So what's making elite schools more generous now?
Pressure to act on affordability has been building from several quarters, including parents, lawmakers, and alumni, some of whom think their alma maters have gotten greedy with their pricing power. And colleges jumped at once in part to grab attention during the season when high school seniors are making final decisions about where to apply.
The next question is how many families will feel the benefit. After all, the schools involved enroll the tiniest sliver of American college students. Fewer than one in five college students attend private institutions, and most of those attend less selective and expensive institutions than those lately in the news.
Says David Warren, president of the National Association of Independent Colleges and Universities: "There's no question when Harvard acts on any issue it has an impact. It's the stone in the pond and it will reach every institution."
The Harvards of the world set the tone for what other institutions will do, once they can afford it. And these latest announcements reflect a recognition in the top circles of higher education that college costs a lot even for middle- and even upper-middle-class families.
The latest initiatives clearly target that group. Most of these schools had already eliminated loans for the poorest students, so the benefits of these policies come further up the income scale. In Harvard's case, families earning more than 90 percent of the national average will see thousands of dollars in savings.
The colleges say they have grown increasingly convinced that there is an educational value in sparing students — at all levels — any worry about loan repayments. Jim Bock, who heads Swarthmore's financial aid and admissions offices, remembers what it was like to have fewer choices than his classmates because of his loan debt when he graduated from Swarthmore in 1990.
"Two people in the $120,000 range, they could both be factory workers, first-generation (immigrants), with no retirement savings," Bock said. "They could be two school teachers."
The announcements could pressure less well-off schools to start spending more on aid, too. That sounds like good news, and it is — for students and parents. But some experts worry it won't prove good for the overall cause of college affordability.
The problem is the money to appease and attract upper-income students may come from those who need it more. To boost their rankings and intellectual life on campus, colleges outside the highest echelon typically offer big discounts to some top students, even if they don't need it. Some worry these latest announcements will accelerate the trend towards "merit aid."
"The minute Harvard does that, a competitive scramble perforce is created," said Jack Maguire, a college consultant who says that — to his regret — he will likely be advising clients they'll have to make more use of non-need-based aid. "Folks have to use financial aid strategically in order to compete."
Donald Heller, a higher education expert at Penn State University, says the moves won't even be good for Harvard and its peers. He worries they will attract more upper-income students and crowd out poorer ones, who are already rare (about half of Harvard students pay the full price there, meaning their families earn more than the aid ceiling of approximately $180,000-$200,000 per year).
"If other institutions start to mimic what Harvard is doing, we may see poorer students crowded out at elite private institutions across the country," he said.
Ultimately, however, other factors will play a much bigger role in college affordability for most people than Harvard's policies for its 6,600 undergraduates.
For instance, maximum Pell Grants — the main federal aid program for low-income students — are set to rise from $4,310 to $4,731 this year under a spending bill passed Wednesday by Congress — though that's a $69 cut from what students had been promised.
But the biggest factor is the economy, says Dannenberg of the New America Foundation. Historically, when the economy falters, state funding for higher education is first to take a hit, and public college tuition soars.
source:http://ap.google.com/article/ALeqM5g4pfkSsPxbWscjlD8IXc9wiyQucwD8TMKA100
School Loan Victory for Law Students on Capitol Hill
In late September, aspiring public interest lawyers nationwide scored a major victory in the battle against ever-increasing student loan debt. After years of negotiations and debate on loan repayment assistance programs, Congress passed, and President George W. Bush signed, the College Cost Reduction and Access Act of 2007 (CCRAA). In part, the CCRAA allows recent law school graduates who work in "public service" to pay off their qualified federal loans at a reduced rate, and have the balance of these loans completely forgiven after 120 monthly payments, or ten years.
"This is a decisive victory for law students," said Daniel Suvor, Chair of the American Bar Association (ABA) Law Student Division. "Over the past several years, law student leaders aggressively lobbied for this change, prompting law students nationally to write thousands of letters and hold hundreds of meetings with their Senators and members of Congress."
According to the ABA, eighty-seven percent of law students borrow money to attend law school. The average law student graduates with $83,181 in total educational debt from a private law school, and $54,509 from a public law school. Additionally, according to the National Association of Law Placement, the median gross starting salary at a non-profit public service organization is approximately $40,000.
"With standard loan repayment schedules, some young lawyers were being forced to opt out of public interest work to stay above the poverty line," said American Association of Law Schools Executive Director Carl Monk. "This law will allow public interest entities to compete with the big firms and successfully lure the best and brightest into their ranks."
The new law offers substantial loan forgiveness for "public service" attorneys that make ten years of payments toward their qualifying federal student loans.
After the ten-year period, "public service" attorneys will be eligible for total forgiveness of their remaining federal loans, regardless of the remaining balance owed. It is also noteworthy that the ten years of "public service" do not have to be consecutive.
"I have wanted to be a public defender since Criminal Law during my first year of law school," said Rachel Raymond, a 3L at Southwestern Law School in Los Angeles. "This law will allow me to pursue my dream, and not just for a year or two, but as a lifetime career."
Per the current language of the CCRAA, "public service" includes all full-time employment by government agencies and "501(c)(3) organizations (among other categories). Over the next year though, the Department of Education will issue regulations that determine how broadly (or narrowly) this term will be interpreted.
The new law also allows borrowers to enter into a reduced payment program that ties monthly payments to an affordable percentage of monthly income, which could potentially reduce monthly payments by two-thirds.
As written though, the CCRAA has potential pitfalls with regard to tax payments and marriage disincentives. Specifically, forgiveness at year ten might be construed as taxable income under the law, and the Department of Education might add both spouses' incomes together to determine how much the borrower must pay, conceivably tripling or even quadrupling the borrower's monthly repayment. Congress is currently in discussions over these very issues.
Students can learn more about these issues by visiting abanet.org/lsd/legislation and by consulting their school's Financial Aid Department.
source:http://media.www.hlrecord.org/media/storage/paper609/news/2007/11/29/News/School.Loan.Victory.For.Law.Students.On.Capitol.Hill-3123946.shtml
"This is a decisive victory for law students," said Daniel Suvor, Chair of the American Bar Association (ABA) Law Student Division. "Over the past several years, law student leaders aggressively lobbied for this change, prompting law students nationally to write thousands of letters and hold hundreds of meetings with their Senators and members of Congress."
According to the ABA, eighty-seven percent of law students borrow money to attend law school. The average law student graduates with $83,181 in total educational debt from a private law school, and $54,509 from a public law school. Additionally, according to the National Association of Law Placement, the median gross starting salary at a non-profit public service organization is approximately $40,000.
"With standard loan repayment schedules, some young lawyers were being forced to opt out of public interest work to stay above the poverty line," said American Association of Law Schools Executive Director Carl Monk. "This law will allow public interest entities to compete with the big firms and successfully lure the best and brightest into their ranks."
The new law offers substantial loan forgiveness for "public service" attorneys that make ten years of payments toward their qualifying federal student loans.
After the ten-year period, "public service" attorneys will be eligible for total forgiveness of their remaining federal loans, regardless of the remaining balance owed. It is also noteworthy that the ten years of "public service" do not have to be consecutive.
"I have wanted to be a public defender since Criminal Law during my first year of law school," said Rachel Raymond, a 3L at Southwestern Law School in Los Angeles. "This law will allow me to pursue my dream, and not just for a year or two, but as a lifetime career."
Per the current language of the CCRAA, "public service" includes all full-time employment by government agencies and "501(c)(3) organizations (among other categories). Over the next year though, the Department of Education will issue regulations that determine how broadly (or narrowly) this term will be interpreted.
The new law also allows borrowers to enter into a reduced payment program that ties monthly payments to an affordable percentage of monthly income, which could potentially reduce monthly payments by two-thirds.
As written though, the CCRAA has potential pitfalls with regard to tax payments and marriage disincentives. Specifically, forgiveness at year ten might be construed as taxable income under the law, and the Department of Education might add both spouses' incomes together to determine how much the borrower must pay, conceivably tripling or even quadrupling the borrower's monthly repayment. Congress is currently in discussions over these very issues.
Students can learn more about these issues by visiting abanet.org/lsd/legislation and by consulting their school's Financial Aid Department.
source:http://media.www.hlrecord.org/media/storage/paper609/news/2007/11/29/News/School.Loan.Victory.For.Law.Students.On.Capitol.Hill-3123946.shtml
Student Loan Forgiveness
Normally once a student has graduated college, they have about six months before they need to begin paying back their student loans. However, it is possible to have some or all of your student loans forgiven. It will usually involve trading your time in a variety of different ways.
To qualify, you must be involved in volunteer work, serve in the military, teach in a designated secondary or elementary school for low-income or special education students or other “teacher shortage areas”, and meet other various requirements.
Peace Corps volunteers may be able to defer payment on their Stafford, Perkins, direct and consolidation loans. Also, they can receive forgiveness for their Perkins Loans. For each of the first two years of service, 15% can be canceled. Then, for the next two years, 20% can be canceled for each year for a total of 70% for a four year commitment.
Partial student loan forgiveness through volunteer work can also be achieved through VISTA (Volunteers in Service to America), a private non profit group dedicated to the eradication of poverty in the United States. A one year commitment to VISTA will allow you a $4,725 education award. Your student loans may be placed in deferment or forbearance while you are serving.
The Army National Guard has a program called Student Loan Repayment Program (SLRP)which will provide for forgiveness of up to $20,000 in student loans. It's available to those who have existing student loans when enlisting or those who get the loans
after joining. This program is in addition to the Montgomery G.I. Bill benefits and tuition assistance program. The downside to this is there is a six year commitment.
If the military isn't for you, and you don't really want to be a volunteer for years just to get rid of your loans, there are a few other options available.
Student loan forgiveness for either Perkins Loans or Stafford Loans can be achieved through full-time teaching positions at a low-income school as designated by the U.S. Department of Education or teaching in certain subject areas such as special education, mathematics, science, foreign languages and bilingual education. The chief administrator of the qualified school at which you taught will have to verify your participation and completion. Depending on your qualifications, you could earn forgiveness of from $5,000 to as much as $17,500 in loans.
Certain health care professionals can also have their payments deferred or totally forgiven with participation in the Nursing Education Loan Repayment Program. The NELRP will repay 60 percent of the qualifying loan balance of registered nurses who are selected for funding in exchange for 2 years of service at a critical shortage facility. Those selected may be allowed to work a third year and receive repayment for an additional 25 percent of their qualifying loan balance. Only about 15% of the total number of applicants were selected to participate in the program for the last two years.
The National Health Service Corps Loan Repayment Program provides for up to $50,000 in forgiveness for qualifying educational loans in exchange for two years service in a underserved communities. Areas of need currently are primary care professionals, including dental and mental and behavioral health clinicians.
There are other, less common ways to become eligible for partial or total student loan discharge. For example, if the school happened to close within 90 days of your enrollment and you were unable to finish your course(s), you may be eligible for a
partial discharge of your loan, dependent on the amount of your expenses. If you did not receive an expected refund, you may be eligible for forgiveness of the amount of that refund. If your signature was forged on your loan agreements, your loan can be forgiven. If you die or find yourself temporarily or permanently disabled, you may receive student loan cancellation.
If you are thinking about a student consolidation loan, check first because by consolidating, you may lose the opportunity to have certain loans forgiven.
source:http://www.americanchronicle.com/articles/viewArticle.asp?articleID=46317
To qualify, you must be involved in volunteer work, serve in the military, teach in a designated secondary or elementary school for low-income or special education students or other “teacher shortage areas”, and meet other various requirements.
Peace Corps volunteers may be able to defer payment on their Stafford, Perkins, direct and consolidation loans. Also, they can receive forgiveness for their Perkins Loans. For each of the first two years of service, 15% can be canceled. Then, for the next two years, 20% can be canceled for each year for a total of 70% for a four year commitment.
Partial student loan forgiveness through volunteer work can also be achieved through VISTA (Volunteers in Service to America), a private non profit group dedicated to the eradication of poverty in the United States. A one year commitment to VISTA will allow you a $4,725 education award. Your student loans may be placed in deferment or forbearance while you are serving.
The Army National Guard has a program called Student Loan Repayment Program (SLRP)which will provide for forgiveness of up to $20,000 in student loans. It's available to those who have existing student loans when enlisting or those who get the loans
after joining. This program is in addition to the Montgomery G.I. Bill benefits and tuition assistance program. The downside to this is there is a six year commitment.
If the military isn't for you, and you don't really want to be a volunteer for years just to get rid of your loans, there are a few other options available.
Student loan forgiveness for either Perkins Loans or Stafford Loans can be achieved through full-time teaching positions at a low-income school as designated by the U.S. Department of Education or teaching in certain subject areas such as special education, mathematics, science, foreign languages and bilingual education. The chief administrator of the qualified school at which you taught will have to verify your participation and completion. Depending on your qualifications, you could earn forgiveness of from $5,000 to as much as $17,500 in loans.
Certain health care professionals can also have their payments deferred or totally forgiven with participation in the Nursing Education Loan Repayment Program. The NELRP will repay 60 percent of the qualifying loan balance of registered nurses who are selected for funding in exchange for 2 years of service at a critical shortage facility. Those selected may be allowed to work a third year and receive repayment for an additional 25 percent of their qualifying loan balance. Only about 15% of the total number of applicants were selected to participate in the program for the last two years.
The National Health Service Corps Loan Repayment Program provides for up to $50,000 in forgiveness for qualifying educational loans in exchange for two years service in a underserved communities. Areas of need currently are primary care professionals, including dental and mental and behavioral health clinicians.
There are other, less common ways to become eligible for partial or total student loan discharge. For example, if the school happened to close within 90 days of your enrollment and you were unable to finish your course(s), you may be eligible for a
partial discharge of your loan, dependent on the amount of your expenses. If you did not receive an expected refund, you may be eligible for forgiveness of the amount of that refund. If your signature was forged on your loan agreements, your loan can be forgiven. If you die or find yourself temporarily or permanently disabled, you may receive student loan cancellation.
If you are thinking about a student consolidation loan, check first because by consolidating, you may lose the opportunity to have certain loans forgiven.
source:http://www.americanchronicle.com/articles/viewArticle.asp?articleID=46317
Sunday, December 9, 2007
A student loan consolidation feels like instant freedom
When you can not easily manage your debt, bundling it all up seems like a good idea. The most common way to do this is a student loan consolidation. This loan takes all of your education debts and wraps them into one loan. Don't confuse it with bankruptcy, though. You still have to pay this money back. You are simply refinancing the money that you have borrowed. Before you do this, you should know both sides of the story.
On The Good Side
Manage your money much easier with just 1 bill to pay each month. Gone is the anxiety as each bill comes in, like a Chinese water torture. Instead of incompressible statements from many different lenders, schools, and government agencies it can seem a blessing to get them down into one payment. You'll get lower monthly payments. Since everything is tied into one payment, the amount that you need to pay monthly can be quite a bit lower. Your interest rate is often lowered too, especially with federal student loan consolidation loans. Probably the biggest benefit is that you will not have to deal with multiple creditors anymore and you can cut your monthly payments in half.
On The Bad Side
It is crucial to realize that your debt is still your debt. It hasn't lessened and it hasn't gone away. You still have to pay it off. It may take longer to pay off the debt. Because you have a lower monthly payment, you are likely to pay longer to get the loan down. You will pay more in the long run. Finance charges and interest rates add up and they stretch out the amount that you owe for a longer period of time. It may let you believe that you are more secure than you actually are. You may think that your debt is under control. And, you may think that you can keep spending now. That is not a good idea at all.
The Balance
When it comes to deciding on student loan consolidation, look at all of the pros and cons. You should shop around to find the lender who will offer you the best student consolidation loan. You should examine the interest rate, the amount loaned, and whether it is a fixed or an adjustable rate loan. You should know the type of student loan consolidation loan that you qualify for and what the underlying factors are. Make sure to include whether you have a good credit rating, if you own equity, and whether you have a good amount of income coming in. This is all relevant for private student loan consolidation as well and there are other forms of debt consolidation as well. One good one is a credit counseling service. These organizations help by working between you and the creditor. They can help to negotiate a lower interest rate from some lenders, as well as teach you how to more effectively manage your money.
Whichever path you choose, do it before the choices are taken away from you. At Student Financial Advisors we can show you how to consolidate student loans.
Source:http://www.transworldnews.com/NewsStory.aspx?id=29082&cat=15
On The Good Side
Manage your money much easier with just 1 bill to pay each month. Gone is the anxiety as each bill comes in, like a Chinese water torture. Instead of incompressible statements from many different lenders, schools, and government agencies it can seem a blessing to get them down into one payment. You'll get lower monthly payments. Since everything is tied into one payment, the amount that you need to pay monthly can be quite a bit lower. Your interest rate is often lowered too, especially with federal student loan consolidation loans. Probably the biggest benefit is that you will not have to deal with multiple creditors anymore and you can cut your monthly payments in half.
On The Bad Side
It is crucial to realize that your debt is still your debt. It hasn't lessened and it hasn't gone away. You still have to pay it off. It may take longer to pay off the debt. Because you have a lower monthly payment, you are likely to pay longer to get the loan down. You will pay more in the long run. Finance charges and interest rates add up and they stretch out the amount that you owe for a longer period of time. It may let you believe that you are more secure than you actually are. You may think that your debt is under control. And, you may think that you can keep spending now. That is not a good idea at all.
The Balance
When it comes to deciding on student loan consolidation, look at all of the pros and cons. You should shop around to find the lender who will offer you the best student consolidation loan. You should examine the interest rate, the amount loaned, and whether it is a fixed or an adjustable rate loan. You should know the type of student loan consolidation loan that you qualify for and what the underlying factors are. Make sure to include whether you have a good credit rating, if you own equity, and whether you have a good amount of income coming in. This is all relevant for private student loan consolidation as well and there are other forms of debt consolidation as well. One good one is a credit counseling service. These organizations help by working between you and the creditor. They can help to negotiate a lower interest rate from some lenders, as well as teach you how to more effectively manage your money.
Whichever path you choose, do it before the choices are taken away from you. At Student Financial Advisors we can show you how to consolidate student loans.
Source:http://www.transworldnews.com/NewsStory.aspx?id=29082&cat=15
Tuesday, December 4, 2007
Student Loan Consolidation - Finding Lenders With The Lowest Interest Rates
Every year, millions of high school seniors anticipate going to college. They apply for their student loans and choose their courses and look forward to the day when they graduate. However that dream can quickly turn into a nightmare when they are hit with the sudden realization that they are so far in debt that it will takes many years to see the light of day.
Some panic when they realize just how far in student loan debt that they are. Fortunately, there is a way to minimize the payments you will make each month and still maintain a comfortable lifestyle.
Student loan consolidation is a process where all of the student loans and consolidate them into one. This can be very useful especially when the student has multiple loans with different interest rates. There are many benefits to student loan consolidation:
1. You will only have to make one payment each month and it will be the same amount each month
2. The interest rate will only reflect the consolidation loan amount
3. Builds your credit up back up to a good level because it will show that all of your loans are paid off and that the consolidation loan payment is on time each month
4. The previous loans will be paid in full, however you will still need to pay the consolidation loan
5. The interest rate will be less than you would have if you had several loans out
When you decide to apply for a student consolidation loan, you must first decide if you want to use a private lender or a federal student loan consolidation.
A federal loan requires you to be at least ten thousand dollars in debt and you must be a graduate, and also you cannot have any defaulted federal loans. The major disadvantage to a student consolidation loan is that once you consolidate, it is a done deal. If the federal interest rates fall, your rate will stay the same.
Student consolidation loans are not difficult to find, there are many lenders who will work with you to set up a payment plan that allows to maintain a good lifestyle. It is however critical that you find a lender with the lowest interest rates. This can be done very quickly by using the Internet. You just need to research any lender you find thoroughly -- not only to ensure that it is a reputable company, but also to find the lowest rates.
Some panic when they realize just how far in student loan debt that they are. Fortunately, there is a way to minimize the payments you will make each month and still maintain a comfortable lifestyle.
Student loan consolidation is a process where all of the student loans and consolidate them into one. This can be very useful especially when the student has multiple loans with different interest rates. There are many benefits to student loan consolidation:
1. You will only have to make one payment each month and it will be the same amount each month
2. The interest rate will only reflect the consolidation loan amount
3. Builds your credit up back up to a good level because it will show that all of your loans are paid off and that the consolidation loan payment is on time each month
4. The previous loans will be paid in full, however you will still need to pay the consolidation loan
5. The interest rate will be less than you would have if you had several loans out
When you decide to apply for a student consolidation loan, you must first decide if you want to use a private lender or a federal student loan consolidation.
A federal loan requires you to be at least ten thousand dollars in debt and you must be a graduate, and also you cannot have any defaulted federal loans. The major disadvantage to a student consolidation loan is that once you consolidate, it is a done deal. If the federal interest rates fall, your rate will stay the same.
Student consolidation loans are not difficult to find, there are many lenders who will work with you to set up a payment plan that allows to maintain a good lifestyle. It is however critical that you find a lender with the lowest interest rates. This can be done very quickly by using the Internet. You just need to research any lender you find thoroughly -- not only to ensure that it is a reputable company, but also to find the lowest rates.
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