How to Reduce The Cost of Education

Student-loan debt is reaching incredible heights. Last year, total student-loan debt passed total credit card debt for the first time. And this points to a somewhat disturbing milestone.

Before you take on your college loan, here are a number of practical tips for minimizing debt and reducing the cost of education financing,

1. Borrow federal first. Federal loans are cheaper, more available and have better repayment terms than private student loans. The unsubsidized Stafford and PLUS loans are available without regard to financial need, so you don't have to be poor to qualify.
2. Live like a student while you are in school so you don't have to live like a student after you graduate.
3. Do not borrow more for your entire education than your expected starting salary after you graduate. Otherwise you will find it difficult to repay the debt and will be at higher risk of default.
4. If you are borrowing more than $10,000 per year for college, switch to a less expensive school.
5. Submit the Free Application for Federal Student Aid (FAFSA) at www.fafsa.ed.gov to apply for federal and state grants and search the Fastweb scholarships database to find scholarships for which you are eligible. Every dollar you get in grants and scholarships is a dollar less you will need to borrow.

via finaid.org

Agency Wants to Hear Private Student Loan Horror Stories

If you have a private student loan -- and you are upset about what you've gotten yourself into - there's a government agency that wants to hear your story.

The Consumer Financial Protection Bureau is asking students, families, the higher education community and the student loan industry - both lenders and servicers - to address a number of issues.

The bureau is particularly interested in hearing about schools with specific programs or practices that educate students about their debt loads and ability to afford their loan payments, as well as any evidence concerning the impact of such initiatives.

The new agency is also creating a one-stop shopping sheet to help students better understand the type and amount of financial aid they qualify for so they know how much they'll owe before choosing a college.

via heraldnet.com

Kathy Dittrich: Incoming Students Need a Reality Check

How can Wisconsin make higher education more affordable?

I don't think it's realistic to expect the University of Wisconsin or the state or federal government to make higher education more affordable. I do, however, think a lot can be done to better inform students about what it means to take out $20,000 or more in student loans.

We need to start telling young people the truth — that a college education does not ensure a high salary and a "better life" (whatever that means), that massive student loan debt makes you an indentured servant, and that all of the jobs you are qualified for or interested in might offer salaries equivalent to your student loan debt.

— Kathy Dittrich, Madison

7 Most Common Credit Card Myths Dispelled

Many people believe that checking your credit report will hurt your credit score. Sadly, that's a myth - as is the idea that paying off your debts will immediately raise your credit score.

New Steps by Obama Administration to Help Student Borrowers

On October 25, 2011, the Obama Administration announced important and timely new steps to help struggling student loan borrowers.

The Federal government introduced the "Pay As You Earn" proposal which will allow up to 1.6 million current students to cap their loan payments at 10 percent of their income starting as early as next year, with forgiveness after 20 rather than 25 years of responsible payments

This proposal that will give borrowers the chance to better manage their student debt by consolidating their federal student loans into a single Direct Consolidation loan and receive an interest rate reduction of up to 0.5 percent.

For more information
http://www.IBRinfo.org

Herman Cain Opposes Federal Student Aid

The day after President Obama said he’d be using executive authority to enable some students to refinance their student loans, Herman Cain suggested that the federal government shouldn’t be involved at all.

He did not believe that, with its limited resources, it is the responsibility of the federal government to help fund a college education. He argued that the people within the state, the people within the communities are the ones who have that responsibility.

Ultimately, everyone who want an education, a college education in America, can get it if he is determined to get it. It's just that they might have to work a little longer, a little harder.

via abcnews.go.com

Same-Sex Parents & Paying for College

When applying for financial aid for college, having two same-sex parents can be an asset or a disadvantage, depending on the circumstances, as the following infographic illustrates.

The expected family contribution, used by colleges to determine financial aid packages, takes into account the student’s household size, family income and assets, and the number of students in college, among other factors.

[read more]

Obama's "Know Before You Owe" Relief Plan Aims to Ease Student Debt

President Obama announced a new student loan relief plan intended to help ease the financial hardship of student debt late last month which could benefit as many as 1.6 million low-income borrowers nationally.

Though experts are unsure how much the plan, called "Know Before You Owe," will have any effect, debt remains a pressing issue for students hoping a college degree will give them an advantage in a tough job market.

Starting in January, the "Know Before You Owe" plan will limit repayment of federal student loans to 10 percent of college graduates' discretionary incomes.

The new plan also means that — assuming borrowers adhere to their repayment schedules — all of graduates' remaining federal loan debt would be forgiven after 20 years. Under current law, loan debt is forgiven after 25 years.

via browndailyherald.com

State Higher Education Agencies

The procedures for applying for state loan, grant and scholarship programs may differ from state to state. Some states provide comprehensive amount of information about state financial aid programs. Others provide minimal information.

Here’s a list of state higher education agencies provided by U.S. Department of Education for your perusal. We recommend that you visit the site for both your state of residence and the state of the colleges to which you are applying.

via freefafsagov.com

Does Filing a FAFSA Result in a Hard Inquiry Through the Credit Bureaus?

A FAFSA is not an application for credit. It is merely a tool to help the government determine what your financial needs are to attend school. If you apply for student loans, such as Stafford Subsidized and Unsubsidized, they will not run your credit, ever.
The only time you would have a pull on your credit report would be if you applied for a private student loan.

via ficoforums.myfico.com

A New Online Tool for Prospective Students Helps to Weight College Costs

An online tool helps prospective students get a better idea of college costs. The net-price calculator is a part of the Higher Education Opportunity Act –– a nationwide initiative by the U.S. Department of Education to get all post-secondary institutions to offer an attendance cost estimate tool.

“I think it’s a good step forward to understand what the cost of school is,” said Kris Wright, director of the University’s Office of Student Finance.

The calculator asks a series of questions about family income and then predicts expected family contributions — what the family can expect to pay and how much will be covered by grants, work study and loans.

“[It’s] a shortcut for FAFSA,” Wright said in reference to the Free Application for Federal Student Aid. But the calculator doesn’t account for possible scholarships.

via mndaily.com