Last-Minute Student Loans Are Still Available

Students and parents have had to search harder, wait longer, pay more, and—in at least a few cases—post pleas for funding on the Web.

At least 130 lenders, including big banks such as Washington Mutual and Wachovia, shut down some or all of their student lending departments this year. Quick fixes by Congress appear to have stanched the exodus of lenders and freed up cash for borrowers. "We are not aware of any students whose borrowing difficulties have blocked their ability to enroll," says Bob Cohen, spokesman for the Career College Association, whose membership of for-profit trade schools lost the most lenders of any type of college. "Without Congress stepping in, the crunch would be a crisis," he added.

Students who can't cover their tuition bills from their savings are benefiting from the newly raised maximums on the amount they can borrow through the federal Stafford program. This spring, Congress raised the ceiling by $2,000 to at least $5,500 (but upperclassmen and adults can get more). Congress also trimmed a little off the Stafford costs, setting the top Stafford annual percentage rate this year at 7.25. Those who qualify as needy or who find lenders willing to offer discounts can borrow for as little as 6 percent.

In May, Congress also relaxed the credit standards for parents having mortgage troubles. Although PLUS loans still charge a maximum fixed annual rate of 9.4 percent, this year's versions are more attractive because they allow parents to defer payments until the student leaves school.

Parents with home equity or good credit are also finding reasonable deals. Home equity lines of credit are currently hovering around 5 percent. And employed adults with FICO scores in the 700s can find private loans below 7 percent. The rates on those alternatives are at a higher premium over benchmarks than they were last year and are variable, notes Student Lending Analytics; they are likely to get pricier when interest rates return to their historical norms.

Nonprofits. Best off are students or parents in states where nonprofits were able to get funding, such as North Carolina and Texas. "Last year, we turned people away," says Dan Weaver, assistant commissioner of the Texas Higher Education Coordinating Board, about Texas's alternative education loan charging a maximum fixed APR of 7.1 percent. But thanks to increased funding, the state still has more than $50 million ready to lend to Texas residents, he says.

Colleges propose student loans instead of new fees

A radical plan for a 'deferred loans' scheme for thousands of students has been drawn up by university heads, the Irish Independent can reveal.

Under the plan, students would start to pay back the 'loan' within a few years of graduation, after they have reached a certain salary level.

It will be put to Education Minister Batt O'Keeffe as an alternative to the straightforward return of tuition fees when university chiefs meet him tomorrow.

The 'income contingent loan' would pay for part of undergraduate third-level education which, at the moment, is paid entirely by the State.

Students would have the option of either availing of the 'deferred loan' or else paying what would be known as 'top-up' fees up-front when they enter college.

Reduction

No figure has yet been put on the amount of the top-up fee but it would not cover the full economic cost of a course and would likely be of the order of €3,000 or €4,000.

The proposal is basically a variation of the arrangements that exist in the UK where students get a reduction if they pay the fees up-front when they register for university.

Much of tomorrow's meeting will be spent discussing the current funding arrangements for the universities and the effect of cutbacks.

Ireland's seven university heads will point out that the institutions are now at a 'tipping point' and that the likely impact of the reduction of State funding would include:

l Closure of some courses.

l Larger classes and lectures.

l Reduction in student support services.

l A gradual erosion in the quality of the learning experience.

Mr O'Keeffe has stated publicly that the universities have seen their funding increase by one third over the past few years, and that he wants to ensure value for money.

But the universities are expected to point to the recommendation by the international think-tank OECD which called for a 'quantum leap' in funding for higher education.

They are expected to press for clarity on the funding of higher education. One of their concerns is ensuring that, if fees are introduced, State grants will not be cut accordingly.

Crisis

But they are likely to point out that no matter what new scheme is agreed, colleges are still facing a crisis.

They will also argue that a deferred loans scheme is fairer and that it is justifiable on the basis that graduates have a higher earning 'premium' than non-graduates.

No More Hurdles In Your Education

Curious and serious enough to build up a successful career? For achieving a successful future and bright career you must be well educated. Presence of education has become so immense that nowadays without it no one is regarded as capable of doing anything. However, for a better and higher education you must have money otherwise affording education in best institutes is impossible. For economically weak students several plans have also been undertaken which aims at making them self-dependant both financially and mentally. Among these the Personal Education Loans are one and are quite helpful to all.

Based on the ability of the students these loans use to offer secured and unsecured two forms of loans. This is because borrowers can be of several types. Those who have their own home or any other valuable property to offer as collateral will go for the secured loans. As these loans seek collateral from the borrower so, it will beautifully suit such borrowers. Even you would get to enjoy several benefits by going for it. Lower interest rate, large amount and longer repayment term are the factors that are being offered to such borrowers. Therefore, people like to go for these loans mostly.

Penn for Obama The education candidate

Sure - he's a fresh face on the scene who talks about a new kind of politics for America. But Obama's popularity runs deeper than vague ideas about change. College students like Obama because he stands for the issues they care about.

One of those issues is education, and the American public school system needs reform. Thirty percent of new teachers quit within their first five years on the job. College costs have skyrocketed by nearly 40 percent over the last five years. And No Child Left Behind fell flat because of poor design, funding and implementation.

Obama's commitment to education goes back to 1985, when he became a community organizer in Chicago. In 1995, he was elected chairman of the Chicago Annenberg Challenge, which financed enrichment projects at 200 of the city's schools. It wasn't until Obama wrote two best-selling books a few years ago that he and his wife, Michelle, could pay off their own debt in student loans.

Drawing on all that experience, Obama is offering a 20-page plan for education reform. Here are some highlights:

• Reform No Child Left Behind - starting with adequate funding and better measurements of progress - so that teachers don't spend entire academic years preparing students to take standardized tests.

• Create 200 new teacher residency programs, which will supply 30,000 well-prepared teachers to high-need schools each year.

• Double federal funding for public charter schools and hold low-performing ones accountable.

• Put $10 billion into early childhood education, because every dollar invested in early learning yields a $7-$10 return to society, in measures such as decreased need for special education services, higher graduation and employment rates, and less crime.

• Make college affordable with a new American Opportunity Tax Credit, which will ensure that the first $4,000 of a college education is completely free. And simplify the application process for financial aid by eliminating the current application - its five pages and 127 questions - altogether.

Those are all bold commitments, and they'd be enough in and of themselves to make Obama the "change," "youth" and "education" candidate in this election.

But what's most remarkable about Obama's education plan is its emphasis on the human spirit of public education - the teacher, the student, the parent - which could only have come from someone who has experienced the troubles of inner city schools and the burden of college debt firsthand.

Instead of measuring teacher quality based on the raw test scores of their students, for example, Obama's comprehensive reward system also recognizes teachers who serve as mentors to other teachers, work in under-served schools, have deep knowledge of subjects or offer additional skills.

Parents are written into the policy with the same seriousness as the funding proposals. A mandatory parent report card will help parents monitor their child's academics, a school-family contract will lay out expectations for attendance and behavior, and a new $500 million technology investment fund will finance not only learning in the classroom but also correspondence between teachers and parents.

Compare that to John McCain, who wants to keep No Child Left Behind's emphasis on filling in bubbles on standardized tests. McCain consistently voted against increased funding for after-school programs, providing grants to local education agencies and adjusting educational funding in 2005, in a bill which would have restored educational programs, increased the maximum Pell Grant and increased teachers' student loan forgiveness - and still reduced the deficit by $5.4 billion.

But that's what you'd expect from a candidate, who, during the primary season, didn't even have an education policy on his Web site.

The average college graduate's diploma comes at a price of more than $19,000 in debt. Barack Obama has a 23-year record of fighting for that student; his opponent has a 30-year record of indifference.

College students like Obama because he's the candidate who stands up for their issues, with a commitment that's grounded in real life.

FISC Lenders Commit to Offering Student Loans

Both banks and credit unions, in Maine, have renewed their commitment to student lending to ensure that Maine families have options in regards to Stafford and PLUS Loans for the fall 2008 semester.
During the past year, changes in the Federal Family Education Loan (FFEL) Program have made the environment increasingly challenging for financial institutions. Recent changes to federal regulations as well as the on-going credit crunch has resulted in many large lenders scaling back their participation or dropping out of the FFEL Program altogether.

“Community lenders in Maine have always supported the FFEL Program through the Maine Advantage Education Loan Program and the HELPP Program,” said Jill Parker, Senior Vice President of Operations. “Through partnership with the Finance Authority of Maine, these lenders are truly making a difference to ensure that loans are available to Maine families in the fall.”

There are over 20 local lenders who currently participate in these loan programs. “These are loans originated in Maine, by Maine lenders and serviced by Maine people,” said Jill Parker. This commitment to the program is nothing new. The majority of these lenders have been participating in the FFEL Program for more than 20 years. “I just think it’s tremendous that when so many large national banks and student lending companies are backing away from this program due to profitability concerns, Maine lenders are jumping in with both feet. That’s what community lending is all about.”

To find out if your local lender participates in the program, visit www.maineadvantage.com

Headquartered in Lewiston, Maine with offices in Portsmouth, New Hampshire, FISC has provided services and solutions to financial institutions and corporations for more than 30 years. The company designs and implements full-service outsourcing solutions that make the operations of financial, insurance, government, not-for-profit, and other organizations more efficient and more affordable. FISC’s core services include item processing and electronic clearing, software solutions,

Student loan stocks mixed amid broader rally

Shares of student loan lenders and originators were mixed Friday even after a government plan to rescue the banking sector sent the broader markets surging on confidence that the credit markets will open up, allowing lenders to boost business.
Rescue plan would see the government buy, probably at auction, all of the bad mortgage loans that are clogging banks' balance sheets and spooking lenders from doing business with virtually any party because there is little transparency on which companies are affected and to what extent.

Partners LP Michael Taiano also noted that last night, the Senate voted in favor of the House bill voted on earlier this week to extend a government credit facility and put option for new Federal Family Education Loan Program (FFELP) loan originations by one year, effectively providing financing for FFELP loans originated for the 2009/2010 academic year. Which given the state of the credit markets, has become more critical," wrote in a note to clients. FFELP is a private sector student loan program, which includes Stafford, PLUS and other loans.

While the stock has rebounded since the credit crisis almost forced the company it out of business last year, but shares are still down more than 80 percent this year.

First Marblehead, for example, had trouble selling packages of student loans that it initiated because investors were leery of buying any debt. That took away a large part of the company's business. It differs from Sallie Mae because it does not lend money itself and instead collects fees for processing loans.

Nelnet Inc. also rose sharply at the market open was has since retreated 15 cents to $15.10.

The price volatility could also have to do with a quarterly event known as a "quadruple-witching" day. On quadruple witching days, investors often unwind positions in their futures and options contract before those contracts expire.

O'Keeffe to discuss student loan plan with universities

MINISTER FOR Education Batt O'Keeffe has reacted positively to the proposed introduction of a student loan system.

But he wants university presidents to "flesh out" their proposals at a key meeting between both sides today.

A ministerial spokesman said the plan for an Australian style loan system was a "constructive contribution" to the debate on tuition charges.

The seven university presidents and Ned Costello, chief executive of their representative body, the Irish Universities Association (IUA), will also detail the funding crisis at third level during today's meeting.

UCD president Dr Hugh Brady - the current chairman of the IUA - will tell the Minister how the colleges face debts totalling almost €20 million this year.

Earlier this week TCD Provost Dr John Hegarty warned staff of the deepening financial crisis facing the college.

Today, the IUA will propose a combination of top-up fees and student loans. Students would repay these loans when they started working - provided they reach a designated income threshold. The meeting will tease out how the new system will work.

Last night the Union of Students in Ireland (USI) said it strongly opposed the introduction of the "flawed" Australian system - known as the Higher Education Contribution Scheme (HECS) - in this State.

It pointed out that the Australian model has been slated by many critics and is under review in Australia.

Australia's education minister, it said, had questioned its credibility and described the scheme as "at best complex and at worst anomalous, inconsistent and irrational".

USI president Shane Kelly said: "We now find ourselves in an outrageous situation: not only is the Minister's plan to reintroduce fees based on flawed mathematics, but now the university presidents want to implement a flawed Australian loan system that the Australians themselves don't want anymore.

"This latest move by the university presidents further illustrates their commitment to raising money and not to student welfare or equity of access to education."

Angus McFarland, the president of the National Union of Students in Australia, said: "If our system is introduced in Ireland, you are going to see poorer students being extremely financially disadvantaged.

"Free education guarantees fair access, HECS or any payment scheme does not. Everyone should be able to access education if they want it. Clearly, the importation of such a broken and flawed system would be of no benefit to Irish students."

Siptu economist Marie Sherlock accused university presidents of sidestepping the fundamental question of how to "fund, incentivise and support students".

The free fees scheme, she said, has played a crucial part in increasing access to third-level education across all the socio-economic groups.

FISC Lenders Commit to Offering Student Loans

A group of FISC lenders, both banks and credit unions, in Maine, have renewed their commitment to student lending to ensure that Maine families have options in regards to Stafford and PLUS Loans for the fall 2008 semester.

During the past year, changes in the Federal Family Education Loan (FFEL) Program have made the environment increasingly challenging for financial institutions. Recent changes to federal regulations as well as the on-going credit crunch has resulted in many large lenders scaling back their participation or dropping out of the FFEL Program altogether.

“Community lenders in Maine have always supported the FFEL Program through the Maine Advantage Education Loan Program and the HELPP Program,” said Jill Parker, Senior Vice President of Operations. “Through partnership with the Finance Authority of Maine, these lenders are truly making a difference to ensure that loans are available to Maine families in the fall.”

There are over 20 local lenders who currently participate in these loan programs. “These are loans originated in Maine, by Maine lenders and serviced by Maine people,” said Jill Parker. This commitment to the program is nothing new. The majority of these lenders have been participating in the FFEL Program for more than 20 years. “I just think it’s tremendous that when so many large national banks and student lending companies are backing away from this program due to profitability concerns, Maine lenders are jumping in with both feet. That’s what community lending is all about.”

To find out if your local lender participates in the program, visit www.maineadvantage.com

About FISC
Headquartered in Lewiston, Maine with offices in Portsmouth, New Hampshire, FISC has provided services and solutions to financial institutions and corporations for more than 30 years. The company designs and implements full-service outsourcing solutions that make the operations of financial, insurance, government, not-for-profit, and other organizations more efficient and more affordable. FISC’s core services include item processing and electronic clearing, software solutions, loan servicing, lockbox and disaster recovery services. In addition, FISC offers comprehensive statement and invoice printing, delivery, design and management.

The Way to Work: Finding Your Financial Footing

You spend the better part of your life at work. Our weekly feature, The Way to Work, offers tips and guidelines to help you succeed in the office. This week, figure out to manage all that money you earn at your job, so that your hard work will pay off for years to come.

A college education is no route to easy street, warns The New York Times. Researchers at MIT found that while college graduates make slightly more than people who don’t go to college, recent college grads don’t immediately start reaping the financial benefits of education. Furthermore, the formula for gaining wealth is a more complicated than “driven kid + bachelor’s degree = cash.” A small percent of the population still holds most of the wealth, and it doesn’t flow easily into the hands of young people.

Although wealth takes work, don’t automatically assume that work should happen in an institution of higher learning. For many, graduate school seems like a logical next step, or at the very least, an escape from the tedium and stress of the so-called “real world.” But unless you plan to be a doctor or lawyer, or want an MBA, the professional school you attend might be an unnecessary financial burden. SmartMoney interviewed one young man who attended grad school, ended up $10,000 in debt and got the same job he would have gotten if he’d remained an intern. Make sure that graduate school is absolutely necessary in your field before you accrue more debt.

Speaking of debt, what makes you feel you’re still in college, but provides no intellectual stimulation, Frisbee or beer? Yes. It’s your student loan bill. It seems pretty horrendous that you’ve got to devote a chunk of that early paycheck to keep paying for school, but it would be even worse if you got scammed into paying even more. Sometimes, student loan consolidation programs that promise to help you get discounts can include something Young Money calls “gotchas.” For example, if you consolidate your credit card debt and student debt into one, you’ll save a bit of headache, but you’ll also lose your low student loan interest rate. On other plans, making a single late payment will disqualify you from your discount. Always read the fine print.

Types of Loans

First you will need to know about the different types of loans you may have. Let's start with the Federal Perkins Loan. This type of loan is generally granted by your college's financial aid office. Since it's a need-based loan, the university's financial aid office must determine who qualifies for the loan and how much they will receive. Universities only have a limited amount of funds to distribute, however, so these loans are awarded on a very selective basis.

The majority of college students have Federal Stafford Loans instead. This is the most common loan available to both undergraduate and graduate students. If a Stafford Loan is subsidized, the federal government pays your accrued interest while you're in school and during the grace period after graduation. If your Stafford is unsubsidized, however, you'll be footing the entire bill.

Lastly, you may have one or several private education loans. There are a variety of lenders that provide private education loans. Most banks and financial institutions offer private student loans to help supplement the costs that other financial aid resources won't cover.

Australian university fees: how student loan scheme works

AS THE debate on university fees reopens, Progressive Democrats leader Senator Ciarán Cannon has suggested the Government examine the merits of an Australian fees system which was introduced in 1989.

Under the system, all students who enter third-level institutions are charged higher education fees, with several measures in place to relieve the costs incurred in their studies.

Most Australian students are Commonwealth supported, which means they are required to pay about 25 per cent of the cost of tuition, called the student contribution, with the government covering the balance.

The majority of students defer payment of the contribution by applying for support under the Commonwealth's Higher Education Loan Programme. But there is the incentive of a 20 per cent reduction for those who can pay the contribution up front.

Under the programme, which is administered by the Department of Education, Science and Training and the Australian Taxation Office, the contribution is paid directly to the course provider by the government on behalf of the student. Upon completing their course the student is given some leeway which allows them to get established and repaying the debt is not compulsory until their income rises above a government set minimum repayment threshold.

The loan does not generate interest, instead all loans are indexed each year to reflect changes in the Consumer Price Index (CPI), which is generally between 2 and 4 per cent.

Mr Cannon said the system is by no means perfect, but is something the Government should examine. He said the requirement to pay no fees upfront removes a major disincentive in entering third level. "It is an inherently fair system with the well qualified and presumably financially secure graduates supporting the cash strapped students of the present," he said.

US state sues UBS on student loan auction-rate debt

New Hampshire's securities regulator accused Swiss bank UBS AG on Thursday of defrauding the state's leading issuer of student loans, in a scandal that prevents the agency from raising $70 million to fund 6,500 loans.
New Hampshire Higher Education Loan Corp (NHHELCO) had issued auction-rate securities as a low-cost way to fund its operations, but the $330 billion market collapsed in February.
New Hampshire's Bureau of Securities Regulation said UBS Securities LLC had urged the agency to keep issuing the debt even though it knew the market was on the verge of collapse.
New Hampshire wants UBS to pay an undisclosed fine, costs for the investigation and restitution to NHHELCO, Jeff Spill, the state's deputy director of securities regulation said in a telephone interview.
Because of the market freeze, NHHELCO had to shut down two loan programs in March affecting about 6,500 students, NHHELCO President Rene Drouin said.
"We are sitting here with no liquidity for alternative loans and this is a crisis because many parents won't be able to turn to home equity lines to fund their children's education," he said.
NHHELCO will still be able to make loans funded by the federal government. These loans accounted for the bulk of its $250 million program last year that served 80 percent to 85 percent of New Hampshire students.
UBS said it plans to fight the allegations.
"We will vigorously defend ourselves against this complaint as we believe that we worked in the best interests of our investor and issuer clients," UBS said in a statement.
Switzerland's largest bank has worked with NHHELCO since 1997 and has since underwritten $1.5 billion in NHHELCO auction-rate securities.
A number of U.S. states including Massachusetts and New York began investigating auction-rate securities after the $330 billion market seized up in February as the global credit crisis spread.
In separate deals with New York state, UBS and U.S. bank Citigroup Inc have agreed to buy back billions of dollars of the securities from investors.
The Texas securities commissioner said on Wednesday that U.S. and state regulators were close to settling with other banks accused of mishandling sales of auction-rate securities.
This case is different because it focuses on the student loan agency which issued auction-rate securities in order to raise capital that it then loaned to families. The other probes focused on how UBS targeted investors directly to put their money into these securities.
"This is very dramatic and it will have a reverberating effect on students and their parents," Spill, said explaining that NHHELCO has not been able to make private loans this year and thus left many families unable to raise funds private funds to help pay for college.
For years, rates on auction-rate securities were reset at weekly or monthly auctions, which drew investors looking for returns slightly better than money market funds. But on Feb. 13, auction markets all shut down, as trouble in the credit markets spooked investors and Wall Street's giants all decided to stop supporting the trades.

Making the Most of Your Money

If you’re debating whether you should begin saving money in your 20s, just stop. A little simple math makes it quite clear what you need to do. According to MSN Money, “If you are able to sock away $4,000 a year into a Roth for 40 years, and if it earns 8% annually, you'll be a tax-free millionaire at retirement.” Of course, for some, $4,000 is not a feasible amount. But even if money is tight, think about skipping a few frills and putting $20 or $100 in the bank whenever you have it. But once you’ve piled up a nice chunk of savings, don’t limit yourself to putting all into a savings account or government bonds.

Before you can plan your future, you need to understand your present. Start by asking yourself: How am I doing financially? Money Answers, a blog by financial journalist Jordan E. Goodman, will help you start to answer that question and start making improvements in a section called “Smart Money Strategies: 20s and 30s.” The tips are most useful for those already drawing a steady paycheck as they focus on “establishing your financial foundation.” Get comprehensive answers to questions about taxes, investing, owning vs. renting and how to make the most of what your company offers you.

Wi$eUp targets women in Generations X and Y, but anyone can benefit from the numerous financial planning tutorials on the site. Wi$eUp will teach you how to start thinking about your financial future, analyze your current financial situation and employ tools to help you reach them. Wi$eUp is thorough, interactive and cuts to the chase. Get more help from the site’s financial expert Q &As, seminars and webcasts.

Finally, if you were the kid in college who just scraped by looking up answers from the back of the book or borrowing from friends, never fear. You can be financially successful using the same strategy with Money Smart Life’s “Cheatsheet for Managing Your Money.” Get tips for budgeting, understanding health insurance, managing your loans, investing wisely and choosing the best credit card for you.

Guv backs student loan plan

We are the largest urban state that doesn't have these loans, the only large state in the union that doesn't have them, the only state in the Northeast that doesn't have them," Paterson said. With the economic downturn, "this is the kind of remedy that we're going to need during this crisis."
The loan program, a version of which was approved by the State Senate last month, is among the recommendations from the state Commission on Higher Education, which delivered its report yesterday. Paterson endorsed those, including the loans, that would cost the state little, such as giving SUNY and CUNY more flexibility to lease property.
Others, including hiring 2,000 faculty and creating a $3-billion science research grant program, are unlikely to get far, given the state's budget crisis.
There are obviously some proposals that would be of high cost," Paterson said. "There are many we won't be able to do, but a lot that we're going to have to consider doing." He said he would introduce legislation for the loans as part of next year's budget plan.
The loan program would be funded by tax-exempt bonds, and could cut interest rates by as much as half, according to Sen. Kenneth P. LaValle (R-Port Jefferson), chairman of the Higher Education Committee. "The savings for parents on this would be huge," said LaValle, sponsor of the "I Live New York" student loan bill passed by the Senate in June.
He called on Paterson to push the Assembly to return to Albany this summer and approve his bill. A spokeswoman for Paterson, Marissa Shorenstein, said the governor's plan differs slightly from LaValle's, including which agency would administer the loans and the structure of the bonds.
In its final report, the state panel, created by former Gov. Eliot Spitzer, sidestepped a controversial proposal advanced by Spitzer: designating Stony Brook University and the State University at Buffalo as SUNY's flagship campuses. They are the only SUNY schools in the Association of American Universities, a group of top research schools.
Still, the panel's intention was for the state to invest most heavily in the four university centers, said its chairman, Hunter Rawlings, president emeritus of Cornell University.
"Flagship, schmagship," Rawlings said. "We're not using the word 'flagship' because it's just a hot-button word [but] when you address the questions 'Where are you going to focus your resources and your money and your top talent,' I think we're pretty clear on those matters."

Benefits of Consolidating

What are the benefits of consolidating your loans? The main benefit of consolidation is that it allows you to lock in a low fixed interest rate for the life of the loan. Understand though, that not everyone gets the lowest rate on consolidation. While some can lock in a very low rate close to 3.5%, others may pay slightly more depending on the original loan rates. So check with your lenders (or one of the Web sites listed on page 34) for information on how much your rate will decrease. Each Web site has online calculators, and you can even apply for a consolidation loan online. Note also that there is no fee for you, the borrower, to consolidate.

Another benefit to consolidation is that now you only have to make one monthly payment and to only one lender-saving you a headache each month from sorting out to whom and what you owe. There are also added bonuses, for instance, many lenders offer interest rate and payment reductions if you pay on time over a period of months and/or have your monthly payments automatically withdrawn from your checking or savings account.

Check out the Web sites, do a little homework and in the end you'll save yourself a nice sum of cash for consolidating your loans. Start the process now, so you can relax, get some sleep and focus on what's really important, your first real job!

Consolidating Your Loans

Now that you better understand what kind of loans you have, you're probably wondering what's next. Pay off time! It may sound daunting to have to payback all of those loans, but don't even think about attempting to dodge your bills.

Not paying your loans back will cause your credit rating to plummet. And remember, declaring bankruptcy is not an option. Student loans are immune to bankruptcy. You may also face IRS penalties and possible garnishment of wages if you hold off on payment--so make those monthly payments on time.

So what's a good plan-of-action when beginning to repay your loans? A smart move is to look into consolidating your existing loans now while interest rates are still low.

Consolidation involves refinancing one or more of your student loans. The original balance is paid in full, and a new loan is originated for the combined amount and for a new term--all with a low fixed interest rate. Consolidation loans often reduce the size of your monthly payment by extending the term of your loan beyond the 10-year repayment plan that is standard with federal loans.
Depending on the loan amount, the term of the loan can be extended from 12 to 30 years. The reduced monthly payment may make the loan easier to repay. However, by extending the term of a loan the total amount of interest paid is increased. You can always make more than the minimum payment each month to cut the repayment period down and reduce the amount of interest paid.

Secured Loans
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Get a Head Start

For those of you that haven't graduated yet, there's something new this year. Under a new interpretation of the rules, students don't have to wait until they graduate to consolidate. Students still in school can consolidate existing loans. If you subsequently take on more student loans, then you can consolidate those loans either separately from the initial low-rate consolidation, or as part of a blended package. If you've just graduated and are in your six month grace period, you can get an extra one-half of one percent cut off the consolidation rate if you consolidate within the first six months after graduation. And by consolidating during the grace period, you may also be able to retain the entire grace period. If the lender delays disbursing the consolidation loan until the end of the grace period, you get the benefit of the grace period and are also able to lock in current interest rates. Not too shabby!

Which loans should you consolidate? You can consolidate Perkins, Stafford and PLUS loans (parent loans for students) and even some previously consolidated loans. Unfortunately, you cannot consolidate private loans that are not federally guaranteed. Also, most lenders will only consolidate loans for students with loan balances of at least $7,500. For most of you, this threshold won't be a problem. According to a recent Nellie Mae study, the average student upon graduation owes an average of $18,900 in student loans.

Deduction for Higher Education Loan 80E

1) In computing the total income of an assessee, being an individual, there shall be deducted, in accordance with and subject to the provisions of this section, any amount paid by him in the previous year, out of his income chargeable to tax, by way of interest on loan taken by him from any financial institution or any approved charitable institution for the purpose of pursuing his higher education or for the purpose of higher education of his relative.

from above main points to avail the deduction are

1. Eduction loan should be taken by Assessee.
2. The repayment should be out of income chargeable to income tax means if repayment is made from income exempted from income tax than deduction will not available.
3. The amount eligible for deduction is repayment of eduction loan interest.
4. There is no limit for amount of repayment of interest ELIGIBLE FOR DEDUCTION
5. This deduction is available in respect of the initial assessment year and seven assessment years immediately succeeding the initial assessment year or until the interest is paid by the assessee in full, whichever is earlier.
6. Initial Assessment year means previous year in which assessee starts paying the interest amount.
7. The loan should be taken for the purpose of higher eduction,and higher eduction means
   
   1. full-time studies for
      
   2. any graduate or post-graduate course in
      
      1. engineering,
         
      2. medicine,
         
      3. management or for
      4. post-graduate course in applied sciences or pure sciences including mathematics and statistics;
8. The loan should be taken from any financial institution or any approved charitable institution.
9. The loan should be taken for higher study of himself or studies of relative
10. Relative under this section means the in relation to an individual, means the spouse and children of that individual.
11. Earlier to previous year 2006-07 the above deduction is available for loan taken and repaid by the assessee only but after finance act 2007 ,"the or for the purpose of higher education of his relative"
12. There is no deduction available for repayment of principal ,this deduction is available to only for interest.
13. This deduction is available for individual only and not for other type of assessee .
14. The loan should be for pursuing higher studies means its includes loan taken not only for tuition or college fees only but other incidental expenses for pursuing such studies like hostel charges,transport charges etc etc,
15. There is no condition that the course should be in India .

College Admissions: Hard times to get loan

Temple University junior Reava Potter never expected the crumbling housing market to affect her college education.

But the fallout has led to a credit crunch that has made it harder for students like Potter to get the student loans she needs.

"What is now happening in our economy has made it harder to take out a loan and it now takes a longer time to get a loan than normally," Potter said. "They have such high standards for credit that it’s ridiculous. I can’t do it myself, and my parents can’t do it due to their credit score. It’s almost impossible."

A spokeswoman for Sallie Mae said some loan companies have stopped giving to students altogether.

"Some lenders have stopped providing private education loans due to the credit crunch," company spokeswoman Patrica Nash Christel said. "[They] have dropped out of the federal student loan program or cut back on the types of schools they would lend to."

Despite the problem, Elizabeth Reap, director of student financial services at Temple, said she has not seen a real influx in students not coming to Temple due to financial dilemmas.

But another finance official at the university said incoming freshmen classes are increasingly made up of higher-income families.

"Too many people want to come to Temple. Tuition raises yearly to keep up with inflation technology and other schools. It’s hard to see Temple doing anything like that," the official said, referring to lowering tuition for students who can't get enough financial aid to pay for Temple.

While Potter requested a certain amount this year, she said loan companies are being stingier than in the previous three years.

"Now, I have to find another loan to cover my other expenses," Potter said. "It’s frustrating and especially for students who are trying to better themselves. This should be the last of my concerns."

Controversial Admissions Policy Proposal Could Shake Up University of California System

The biggest change in how the University of California system evaluates prospective applicants in 10 years could come from a major administrator-proposed revision to the system’s admissions policy, allowing schools to depend less on test scores and more on individual student evaluations when making admissions offers, according to an article in The Chronicle of Higher Education (“U. of California Proposes Sweeping and Controversial Admissions Changes”).

The new policy would give more discretion to admissions officials at each school, David Longanecker, president of the Western Interstate Commission for Higher Education, told the Chronicle. Longanecker also said that the move would bring the state’s college admissions policies more in line with those of private and public research universities.

Advocates say that the system’s current strict eligibility formula doesn’t adequately consider deserving students from minority or low -income backgrounds who have high GPAs, but who didn’t take the correct college-prep classes or the SAT II.

Under the newly proposed rules, students would no longer have to take this additional test or as many required college-prep courses. Administrators would be allowed to evaluate applicants on an individual basis and would be able to forego the system’s current formulaic admissions methods that depend solely on test scores or other pre-set criteria.

Those administrators who are in favor of the change say that while the new policy would only marginally affect the largest campuses, such as U.C. Berkeley and UCLA, those like the U.C. Riverside and U.C. Merced campuses, which are less selective, may see a significant shift in the composition of their freshmen class.

Critics contend that fewer students with the highest grades and test scores would be guaranteed a spot at a California state school; a factor that may violate the state’s constitution which requires that the UC system admit the top 12.5 percent of California’s high school students.

“It's a change in substance as well as in symbol,” said William Drummond, a Berkeley journalism professor. “Ever since the 1960s and the master plan, we’ve been telling kids from primary school on up that if you work hard, we will guarantee you a place. Now we’ll just guarantee that you’ll be reviewed.”

College Offers Students a No-Cost, No-Student-Loan Education With Funds From Its $1.1-Billion Endowment

Berea College is drawing the attention of lawmakers for its no-frills approach to education and its free tuition policy.
The private Kentucky college — founded 150 years ago to educate freed slaves and “poor white mountaineers” — accepts only applicants from low-income families and charges no tuition, according to an article in The New York Times (“With No Frills or Tuition, a College Draws Notice,” July 21, 2008).
Every Berea student is awarded a four-year tuition scholarship and the school doesn't offer student loans.
School Spends Endowment on Students, Not on High-End Amenities
Despite its $1.1 billion endowment Berea, unlike other colleges with large endowments, has no football team, coed dorms, hot tubs, or rock climbing walls. Students eat food from the college’s own farm, make the furniture used to furnish the school, and are required to work 10 hours a week in an on-campus job.
Although Berea keeps costs down with its streamlined approach to higher education, without tuition revenue to supplement its funding, Berea relies on endowment income to cover 80 percent of its $43 million education and general budget, and about two-thirds of its $55 million operating budget.
“You can literally come to Berea with nothing but what you can carry, and graduate debt free,” says Joseph Bagnoli, the school’s associate provost for enrollment management. “We call it the best education money can’t buy.”
A Push to Use Endowments for the Public Good
News of Berea’s unusual approach to higher education is spurring debates about whether the nation’s wealthiest universities are doing enough for the general public to warrant their tax-exempt status, or if they’re simply hoarding money to serve an elite few, writes New York Times reporter Tamar Lewin.
In January, the Senate Finance Committee requested detailed endowment and spending data from the 136 colleges and universities with endowments of at least $500 million, with an eye toward possibly forcing them to spend at least 5 percent of their assets each year, as foundations are required to do.
Dozens of wealthy colleges have since increased their financial aid to low- and middle-income students, in some cases, replacing loans with grants. More than three-quarters of the students at Berea already receive Pell Grants.
“You see some of these selective liberal arts colleges building new physical education facilities with these huge sheets of glass and these coffee and juice bars, and charging students $40,000 a year, and you have to ask, does this contribute to the public good, or is it just a way for the college to keep up with the Jones?” says Berea’s president Larry Shinn.
He adds, “We are a tax-exempt institution, so I think the public has a right to demand that out educational mission be at the heart of our expenditures.”

Student Loan Rate Likely to Exceed 8 Pct.

Despite the government’s effort to alleviate the financial burden coming from college tuition fees, the student loan interest rate for the second semester of this year is expected to exceed 8 percent.

The Ministry of Education, Science and Technology said yesterday that the student loan rate, which stood at 7.65 percent in the first semester, is likely to hit the 8-percent mark in the next semester, as the five-year treasury bond, which has a decisive impact on student loan rates, recently soared.

The five-year treasury bond rates jumped from around 4 percent in the first half of this year to about 6 percent recently, with little sign of going down again. Korea Housing Finance Corporation, responsible for student loans, is also adding pressure to raise loan rates, citing the need to compensate for the accumulated losses.

Against this backdrop, the ministry believes that the student loan rate is most likely to go up as much as 8 percent.

A ministry source said, “We cannot cut the student loan rate because it is decided by the market rates, rather than by the government, but we’re working to reduce the increase margin.”

Normally, the ministry announces the student loan rate for the second semester in early July every year. It is, however, planning to determine the rate late July this year, after watching the financial market situation.

In June, the ministry disclosed its plan to expand government assistance to reduce the financial burden that students and their families suffer from paying high interest.

It promised to expand interest-rate assistance from 2 percent to 3 percent for the bottom 30 to 50 percent of the income deciles, and extend 1-percent assistance to the bottom 60 to 70 percent, which has been excluded from state assistance.

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Student Loans For People With Bad Credit – For Sustained Studies

Student loans for people with bad credit include in their fold all those applicants who have damaged their record of making payments due to some cases of late payments, arrears or defaults or may not be at all having a credit history yet. These are easier loans as there are many options in borrowing the money for sustained higher studies in collages. If you apply for Federal loans, your bad credit history will not at all come in the way because of governmental policy of providing higher education to all the people. Federal loans come in the options of Stafford loans, Perkins loans and PLUS loans. No enquiries of past payments on loans or credit cards will be made on the applicants. Moreover, low interest rate also is ensured. An added advantage is that the applicant has a flexible repayment schedule and will start repaying only after completing the collage education and starts earning.

In case you do not qualify for these loans, then you can take out Student Loans For People With Bad Credit from online private lenders. They also give you the option of repaying an amount after you starting earning from a regular job after your collage term. These lenders will offer you a persona loan in secured or unsecured option.

If you intend to borrow the money from private lenders, then also your bad blemished history will not a big hurdle, if you take out the loan along with a co-signer having an excellent or good credit history for low rate of interest and fast approval.From a bunch of such lenders select one in keeping terms and conditions in mind. Surely your collage studies are not going to suffer due to the availability of the loan.

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