• Home
  • Business
  • Finance
WEALTHUSER: Helping blog for finance managers
  • Home
  • Business
  • Finance
  • Insurance
  • Investment
  • Contact us
No Result
View All Result
  • Home
  • Business
  • Finance
  • Insurance
  • Investment
  • Contact us
No Result
View All Result
WEALTHUSER: Helping blog for finance managers
No Result
View All Result

New Student Loan Program Pays 100% of Loans Back

by wealthuser
January 20, 2017
in Loan
0
New Student Loan Program Pays 100% of Loans Back
0
SHARES
69
VIEWS
Share on FacebookShare on Twitter

Once the Department of Education completes the evaluation of the applicant’s FAFSA, and determines the Financial Need amount available to an applicant, a Student Aid Report, or SAR, is issued to the applicant. The SAR contains the EFC. There are options for requesting a review of the Financial Need determination.

Once the applicant has qualified for a student loan, the student and his/her family must decide on what type of loan is best for their situation. Loans are differentiated by amounts, whether interest payments are subsidized or not, and the funding source of the loan. Loan amounts must also be evaluated in terms of what other financial assistance is available to the applicant.

Direct Loans are student loans made directly by The Department of Education (“DOE”) to students and the parents of students. No banks or financial institutions are involved. There are four types of direct loans offered by DOE:

Subsidized Stafford loans eliminate interest payments while the student is enrolled in school and during the six-month grace period following graduation before re-payment of the loan begins. These are available only to Independent Students.

Unsubsidized Stafford loans charge interest on the loan principle from the day the loan is issued. Repayment of the loan doesn’t start until six months after the student has either graduated or left college. But like a credit card balance left unpaid, the interest adds up each and every day the student attends school.

PLUS loans are available to students in graduate or professional school or to the parents of undergraduates.

The amount of money available through Stafford loans varies with each year of college.

College Year Amount of loan available

Freshman $ 3,500.00

Sophomore 4,500.00

Junior 5,500.00

Senior 5,500.00

All of the above amounts are for Dependent Students. The amounts for Independent Students are greater, but since very few applicants qualify for Independent Student status they are not included.

Interest rates and loan fees charged on Direct Student Loans are set by Congress. Interest rates are adjusted once a year, on July 31st. Current Stafford loan rates are 6.8% and loan fees are 4%.

The PLUS Program, or Parent Loans for Undergraduate Students, is a distinct and separate type of educational loan, which can be used to finance an undergraduate education. Because Stafford loans have limits that fall below the needs of many students, Stafford loans may need to be supplemented by PLUS loans obtained by their parents. Parents may apply for Direct PLUS loans from the DOE or from a second source of loans guaranteed by the DOE but funded by private banks and financial institutions. These loans are labeled FFEL or Federal Family Educational Loan Program.

PLUS loans carry a higher interest rate, currently 7.9% if the loan is a Direct loan from the DOE, and 8.5% for FFEL PLUS loans made by private banks or financial institutions. PLUS loans require separate applications available from the financial aid office of the student’s school. PLUS loans require good credit ratings and are subject to a more rigorous financial scrutiny than Stafford loans. PLUS loans carry origination fees like every other type of consumer loan. PLUS loans allow parents to borrow up to the complete cost of their child’s four years of college, less any other Direct loans or financial aid received.

Direct Plus loans are fairly straightforward. FFEL PLUS loans are made with private lenders. FFEL loans are guaranteed by the government, which means that the government agrees to, in effect, co-sign the loan. For this reason just about every type of financial institution offers PLUS loans. Most of these institutions are legitimate, but there are some predatory lenders. Caution must be exercised when choosing a lender. The Financial Aid Office of your child’s school should, in theory, be able to guide you to an honest lender. But there have been some scandals involving conflict of interest on the part of school financial aid departments, so independent investigation of lenders is a good idea.

Investigating PLUS loan lenders is much like investigating credit card offers. Some cards offer a low introductory rate, but the fine print shows that even one late or missed payment results in a skyrocketing interest rate. Other fine print reveals that a late or missed payment, even for a different credit card, can cause massive interest increases and penalties. For the period 2005 – 2006 student loans of all types amounted to over four hundred billion dollars. After home mortgages and credit cards, student loans are the larger source of business for the personal finance industry.

Terms for loans vary from ten to twenty-five years. But since interest is accruing from the moment the loan is made, interest charges are accumulating from fourteen to twenty-nine years. The amounts add up quickly. Applicants receiving federal student loans are now required by the government to take a financial counseling class before the money is released to the student. It makes sense to investigate financial aid that doesn’t require repayment.

Previous Post

Student Loan Repayment Tips - 8 Tips to Keep Your Loan Under Control

Next Post

5 Ways Drake Cloud Can Enrich Your Business Productivity

Related Posts

Discover Everything Associated with Vacant Property Loans Right here
Loan

Discover Everything Associated with Vacant Property Loans Right here

March 15, 2018
Car Title Loans: Choosing the Right Financial Service
Loan

Car Title Loans: Choosing the Right Financial Service

October 20, 2017
Student Loan Repayment Tips – 8 Tips to Keep Your Loan Under Control
Loan

Student Loan Repayment Tips – 8 Tips to Keep Your Loan Under Control

January 20, 2017
Guide To The Types Of Home Loans In Australia
Loan

Guide To The Types Of Home Loans In Australia

January 5, 2017
Best School Loan Consolidation Options
Loan

Best School Loan Consolidation Options

January 5, 2017
Next Post
5 Ways Drake Cloud Can Enrich Your Business Productivity

5 Ways Drake Cloud Can Enrich Your Business Productivity

Please login to join discussion
No Result
View All Result

Recent Posts

  • SOME ESSENTIAL FINANCIAL TIPS CRUCIAL FOR COLLEGE GRADUATES
  • Discover Everything Associated with Vacant Property Loans Right here
  • Understanding and Saving on Alberta Car Insurance
  • Small Business Health Insurance – The Best Policy Is A Great Agent
  • Car Title Loans: Choosing the Right Financial Service

Recent Comments

    Archives

    • October 2018
    • March 2018
    • January 2018
    • November 2017
    • October 2017
    • August 2017
    • July 2017
    • June 2017
    • April 2017
    • February 2017
    • January 2017

    Categories

    • Business
    • Finance
    • Insurance
    • Investment
    • Loan
    • Real Estate

    Meta

    • Log in
    • Entries feed
    • Comments feed
    • WordPress.org

    About Me

    WEALTHUSER: Helping blog for finance managers

    Finding car insurance can be a difficult and stressful process, especially for those who don't have much experience when it...

    Business

    • All
    • Business
    SOME ESSENTIAL FINANCIAL TIPS CRUCIAL FOR COLLEGE GRADUATES

    SOME ESSENTIAL FINANCIAL TIPS CRUCIAL FOR COLLEGE GRADUATES

    by wealthuser
    October 18, 2018
    0

    Soon, there will be a transition from state in life and status for many college graduates. This is a translation...

    Discover Everything Associated with Vacant Property Loans Right here

    Discover Everything Associated with Vacant Property Loans Right here

    by wealthuser
    March 15, 2018
    0

    Some people would rather buy the vacant prevent of property released easily obtainable in new real estate estates or even...

    Understanding and Saving on Alberta Car Insurance

    Understanding and Saving on Alberta Car Insurance

    by wealthuser
    January 4, 2018
    0

    Finding car insurance can be a difficult and stressful process, especially for those who don't have much experience when it...

    Loan

    • All
    • Loan
    SOME ESSENTIAL FINANCIAL TIPS CRUCIAL FOR COLLEGE GRADUATES
    Finance

    SOME ESSENTIAL FINANCIAL TIPS CRUCIAL FOR COLLEGE GRADUATES

    by wealthuser
    October 18, 2018
    0

    Soon, there will be a transition from state in life and status for many college graduates. This is a translation...

    Read more
    • Home
    • Business
    • Finance
    • Insurance
    • Investment
    • Contact us

    © 2018 Wealthuser - Premium WordPress news & magazine theme by wealthuser.

    No Result
    View All Result

    © 2018 Wealthuser - Premium WordPress news & magazine theme by wealthuser.