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The Student Loan Repayment Handbook: A Comprehensive Guide to Avoiding Modern Day Serfdom by Jason Spencer Student Loan

Jason Spencer

Written by Jason Spencer Student Loan

Table of Contents

Student Loans in the United States: A Guide to Understanding Student Loan Borrowing 0 Introduction: 10 Chapter 1: The Demand for Student Loans Rises – The U.S. Student Loan Problem 11 Drastic Changes in Three Decades 11 What Caused This to Happen? 12 The Challenges of Repaying the Loans 12 Reforms Helpful 13 Still Not Enough 13 Problems are Paramount 14 Understanding the Loans is the First Step 14 Chapter 2: Understanding the Types of Federal Student Loans 16 Stafford Loans 16 FFELP is Gone but Direct Loans Remain for Stafford Loans 18 Are You Dependent or Independent? 19 Applying for Stafford Loans 20 Repaying the Stafford Loans 21 PLUS Loans 22 Who Can Apply for the PLUS Loan? 22 Paying Back PLUS Loans 23 What Makes a Student Eligible for PLUS Loans 24 Canceling the Loan 24 Perkins Loans 24 How Much is Lendable in Perkins Loans? 25 Who Receives the Perkins Loans? 25 Tax Deductible? 25 Repayment of the Perkins Loan 26 Perkins Loans Do Have Benefits 26 Consolidation Loans 27 Chapter 3: What is Federal Loan Consolidation? 28 What Does Federal Loan Consolidation Do? 28 What Types of Loans Can One Consolidate? 28 The Benefits of Federal Loan Consolidation 29 Disadvantages of Federal Loan Consolidation 31 How to Apply for Consolidation 32 The Latest Rules for Consolidation and Payment with FFELs 34 Chapter 4: Understanding Private Student Loans 36 Private Loans Could Be an Option 36 BEFORE Applying for the Private Loans 36 How Does the FWS Program Work? 37 Now that You’ve Exhausted Your Other Options… 40 What Should You Look for in the Private Student Loan 41 The Interest Rates 41 Getting a Better Deal 42 Understand the Repayment Plans 42 Know the Terms – Vocabulary and Financial! 43 Things to Remember 43 Getting an Early Start 43 What are the Biggest Issues with Private Student Loans? 44 Chapter 5: Charitable and Other Types of Loans 47 Charitable Interest-Free Loans 47 No More Interest Worries with Charitable Interest-Free Loans 48 Will Interest-Free Loans Pay for Everything? 48 What Does Expected Family Contributions Mean? 49 Federal Nursing Student Loans 49 Health Professions Student Loans 51 Chapter 6: Bad Credit Loans for School and Dealing with Bankruptcy 54 Your First Stop: Federal Loans 54 The Next Stop: Private Loans 55 It Could be a Trap! 55 Always Vet the Lender 56 Working with a Cosigner 57 What if You Do Get a Personal Loan? 58 Tips for Dealing with a Private Loan with Bad Credit 58 Getting Student Loans after Bankruptcy 60 Bankruptcy and Federal Loans 61 Bankruptcy and Private Student Loans 62 What are the Types of Bankruptcies? 63 The Impact of Bankruptcy with Private Student Loans 64 What About Discharging Student Loans with Bankruptcy? 64 The Chance of an Undue Hardship Discharge 66 What about Unpaid Tuition Bills? 66 You Have Hope 66 Chapter 7: Which Federal Student Loans are Best? 68 Why are Federal Loans a Better Choice? 68 Choose the Best Federal Student Loans 70 Federal Stafford Loan: The Second Best Choice 71 Federal PLUS Loans for Parents: The Third Choice 71 Private Student Loans: The Last Choice 72 What are You Going to Choose? 73 Lower Your Cost of Going to School 73 Chapter 8: What about State Loans for School? 75 The Basics of Getting the Student Loans 75 Loans: Alabama 76 Loans: Alaska 76 Loans: Arizona 76 Loans: Arkansas 77 Loans: California 77 Loans: Colorado 77 Loans: Connecticut 78 Loans: Delaware 79 Loans: Washington, D.C. 79 Loans: Florida 80 Loans: Georgia 80 Loans: Hawaii 80 Loans: Idaho 81 Loans: Illinois 81 Loans: Indiana 81 Loans: Iowa 82 Loans: Kansas 82 Loans: Kentucky 82 Loans: Louisiana 83 Loans: Maine 83 Loans: Maryland 84 Loans: Massachusetts 84 Loans: Michigan 85 Loans: Minnesota 85 Loans: Mississippi 85 Loans: Missouri 85 Loans: Montana 86 Loans: Nebraska 86 Loans: Nevada 86 Loans: New Jersey 87 Loans: New Hampshire 87 Loans: New Mexico 87 Loans: New York 88 Loans: North Carolina 88 Loans: North Dakota 89 Loans: Ohio 89 Loans: Oklahoma 89 Loans: Oregon 90 Loans: Pennsylvania 90 Loans: Rhode Island 90 Loans: South Carolina 91 Loans: South Dakota 91 Loans: Tennessee 92 Loans: Texas 92 Loans: Utah 92 Loans: Vermont 93 Loans: Virginia 93 Loans: Washington 94 Loans: West Virginia 94 Loans: Wisconsin 94 Loans: Wyoming 95 The Tip of the Iceberg 95 Chapter 9: How to Prepare to Apply for a Student Loan 97 Long Before Applying 97 Filling Out the FAFSA for Federal Loans 97 What is a Federal Student Aid PIN? 98 What Documents Do You Need? 99 The Schools 100 Who Fills Out the FAFSA Form? 100 Determining Dependency Status 101 Which Parent’s Info Should You Use on the FAFSA 103 Other Things to Consider with the FAFSA Form 104 Special Circumstances 105 Filling Out the Form Without Parental Support 105 Not Always Difficult 106 What Does Expected Family Contribution Mean? 107 Getting a Private Student Loan 108 Make Sure It is the Last Resort 108 Only Borrow What You Need 110 Looking for Lenders 110 A Word of Advice on Private Loans 113 Chapter 10: Paying Back Your Student Loans: Types of Repayment Plans 114 How Much Do You Need to Pay? 114 You Have Options with Federal Repayment Plans 114 The Standard Repayment Plan 115 Graduated Repayment Plan 115 Extended Repayment Plan 116 Income Based Repayment Plan 116 Pay as You Earn Repayment Plan 117 Income-Contingent Repayment Plan 118 Income Sensitive Repayment Plan 118 Understanding How to Pay Back Your Loans and Manage Them 119 What About Personal Loan Repayment Plans? 121 Chapter 11: Consider Delaying Your Payments 123 It Doesn’t Have to End in Disaster 123 What is Student Loan Deferment? 124 What is an Economic Hardship Student Loan Deferment? 125 Military Service Deferment 125 Student Loan Forbearance 126 Benefits of Deferring and Forbearance 126 What about Forgiveness, Cancellation, and Discharge? 127 When can Federal Loans be Forgiven, Canceled, or Discharged? 127 Total and Permanent Disability Discharge 127 Death Discharge 128 Discharge in Bankruptcy 128 Closed School 129 False Certification of Student Eligibility or Unauthorized Payment 129 Unpaid Refund Discharge 130 Public Service Loan Forgiveness 130 Perkins Loan Cancellation and Discharge 130 Teacher Loan Forgiveness 131 Chapter 12: Penalties for Not Paying Your Student Loans 132 What Does Defaulting Mean? 132 Possibility of Getting Sued 133 Loss of Federal Benefits 134 Demolish Your Credit Rating 134 Tax Refund Offsets 134 Garnishment of Wages 135 Collection Agencies 136 Trouble Renting 136 Trouble Getting Loans of Any Type 137 No More Federal Financial Aid 137 Extra Fees 138 Chapter 13: Counseling and Help for Understanding and Dealing with Student Loans 139 Counseling Now Helps Life Later 139 The Course 140 Better Counseling Needed 140 Ideas for Debt Counseling and Preparation 141 Check the Debt Annually 141 If You See Trouble 142 Chapter 14: Tips to Help Students Pay Expenses in College 143 Beware Credit Cards 143 Get a Job 144 Pay Bills 144 Learn to Budget 144 Buying Used 144 Live Smartly 145 Do It Right 145 Chapter 15: Glossary of Handy Terms to Help Understand Student Loans 147 Accreditation 147 Administrative Wage Garnishment 147 Associate’s Degree 147 Award Letter 147 Bachelor’s Degree 147 Cost of Attendance (COA) 148 Default 148 Deferment 148 Dependency Status 148 Direct Consolidation Loan 148 Direct Loan 148 Direct PLUS Loan 148 Disbursement 148 Eligible Noncitizen 148 Expected Family Contribution (EFC) 148 FAFSA 148 Federal Perkins Loan 148 Federal Student Aid PIN 148 Federal Student Loan 148 Financial Aid Office 148 Forbearance 148 Interest 148 Loan Forgiveness 148 Loan Servicer 148 PLUS Loan 149 Principal 149 Private Loan 149 Promissory Note 149 Subsidized Loan 149 Tax Offset 149 Unsubsidized Loan 149 Work Study 149

Jason Spencer Student Loan

Introduction: Times are tough for many people, and this is making it more important than ever to understand student loans, their terms, and what borrowing really means. Throughout this book, we shall look at many of the different aspects of the loans, from the various types that are available, which ones are the best option, how to get them, and more. Perhaps most importantly, we’ll look at some of the issues with loans today, and the penalties that people will face if they do not pay their loans back on time. The guide should help to provide readers with more knowledge and insight into student loans in general, as well as how to keep a good handle on their borrowing. Chapter 1: The Demand for Student Loans Rises – The U.S. Student Loan Problem by Jason Spencer Student Loan Many people in the United States dream of having a good job that will allow them to take care of their family and to pay their bills. This dream is one that should be attainable for everyone, but more and more, the costs of going to college are simply too high for many people to afford to pay outright. This is causing them to consider taking out large loans to help pay for much or all of their schooling. Most parents today do not have the money to pay for all of their children’s educational needs while at college, so loans really are the only viable option in addition to grants and scholarships. However, with grants and scholarships, not all people are going to be able to qualify. This leaves loans as the most viable option for people who are looking for a way to pay for their schooling. Drastic Changes in Three Decades Over the past thirty years, the cost of just about everything has gone up according to Jason Spencer Dallas. However, when you look at the cost of getting a college degree, the amount that it’s increased might be a bit shocking. Today, the cost of a degree is 1000% higher than it was thirty years ago! When the majority – two-thirds – of students who graduate with a bachelor’s degree have debt that averages more than 25k. Many borrowers owe much more than this, and the debt always is higher to students who come from lower incomes and have to borrow more with their student loans. Student debt in the United States is now more than a trillion dollars! Approximately $864 billion of that is in federal loans, while around $150 billion is in private loans. What Caused This to Happen? Like most people, you probably want to know what happened to cause this drastic increase. Quite a few things are to blame, actually, including the recession that effected most economies around the world in 2008. More students were enrolling in college at that time, and because of the economic downturn, it meant that more of those students had to borrow money to pay for schooling. State funding, which once helped to keep tuitions at an affordable level, is just about gone now too. Without the funding, more and more schools had to raise their costs, naturally. The colleges had less endowment money, so that meant that they were not able to offer the grants and scholarships that they once did for students who needed them to pay for their schooling. Students needing to borrow more heavily followed suit. The rising cost of items on the grocery shelves, gas to put into the car, and the skyrocketing price of decent healthcare also contribute to the difficulty that people are having when it comes to paying for school. For most people, savings are dwindling, and that means that they can’t rely on that money to help themselves or their children pay for the traditional school items even outside of tuition, such as books. Again, this leads to greater borrowing. You can start to see just how the debt was able to rise so quickly. The Challenges of Repaying the Loans Whether a student is taking out a private loan or a federal loan, he or she still needs to pay the loan back and on time. This can be quite a challenge, as even after graduating with a degree it is not always possible to find good work in the right field right away. One of the issues that seem to be happening for quite a few borrowers is the fact that they have their loans handled by other companies and groups rather than the people from whom they initially borrowed. Loans assigned to a new company are not always a good thing, because that company that is now handling your loan might be less than responsive. Some borrowers do not even realize that they are no longer working with the initial lender until well after the debt changed hands. This can result in confusion as well as changes in the payments, which is simply not fair. Reforms Helpful In 2010, President Obama signed student loan reforms that helped in some areas. The reforms were able to eliminate about $60 billion on subsidies to private lenders deemed unnecessary. The money then went into providing grants for low-income students. At this time, the government started to make loans with low interest rates available to low income students like Jason Spencer Student Loan. Still Not Enough While reforms are helpful, they may not be enough. The amount of debt that students are carrying today is going to be with them for many years. The amount they owe is going to be a drain on them for many years, and in some cases even decades. People who graduate realize that they have to pay for their loans, and they can’t wait for a good paying job to come along to do it. They often take the first job they can find – even if it is not in their field – just so they can pay back their loans without incurring any of the penalties. The penalties can be quite severe too. We will go into them later in the book. Some who borrow with federal loans can use income-based repayment, which can put a cap on the amount that the borrower has to pay each month. This can make the payments more affordable based on income and family size. However, many do not realize these programs exist. Even if they can help with federal loans, they are not able to help with private loans that a student may have had to take. This means that the vicious cycle could well continue if we do not have even more reforms and changes. These borrowers will not be able to pay for their own children’s college, which leads to more borrowing and even more debt. It also means that people are not going to be able to save for their future and their retirement. Problems are Paramount Some students have to turn down the opportunity to get into the school of their dreams because they know they will not be able to qualify for or pay for a student loan. Others go to school and have to drop out without getting a degree, and they still have to pay back the costly loans. This proves to be more difficult when it is hard to find a high paying job. Those who don’t have college degrees usually find it much more difficult to get work, and when they can find the work, it does not always pay as well. Many people today are behind on their student loans, and it can be a rather scary time for them. In fact, many people – about 11% of them – are more than 90 days behind on their loans. With all of these problems, you would think that people would be doing more to get at the cause and fix things. However, bureaucracy and change move slowly, and that means we are still a ways off from a good solution. Understanding the Loans is the First Step Using loans might be the only way that you or your children can go to college. You do not want to turn down an opportunity to enter a great school and get a great education if you can help it, and sometimes student loans are the only way to go. You do not have to let student loans get the better of you. Take the time to understand the loans, the various options that you have, as well as what you need to do to be able to afford to pay off your loan. This is not going to make the loans easier to get or easier to pay back, but it will ensure that you are at least able to make informed decisions when you are shopping for a good loan for school.

Chapter 2: Understanding the Types of Federal Student Loans Many people around the country are going to find that they need to utilize student loans at some point simply to have the money to make it through all of their schooling. Some of the most common types of loans for which many people will be able to qualify are federal student loans. When one starts to delve into student loans and Stafford Loans in particular, it can seem quite confusing. This guide will help to shed some light on the differences as well as what one needs to know about all of the different types of loans available. One can find a number of different types of FFELs (Federal Family Education Loans), and the following are the four basic types of federal student loans available today. Stafford Loans When most students are looking for loans and financial aid, the Stafford Loan is going to be a part of the package. They are generally going to be the main component in loan packages for undergraduate as well as graduate students. These federal loans, also called Direct Stafford Loans, have government backing. This means that the lender still has some sort of protection in case you were to default on the loan. Even though the lender might have protection, you do not want to default. In a later chapter, we’ll discuss some of the problems that you will face if you don’t pay back student loans. One of the benefits of having government backing for your loan is the fact that they are generally going to be cheaper than private loans would be. The interest rate is generally going to be a bit lower, so you are going to be able to save over the life of the loan. This is one reason that they are so popular amongst students who are struggling to find a way to pay for their college. It still takes some explaining to understand all of the nuances and features of these types of loans though. We will start shedding some light on these loans in this chapter so that you will have a better idea of what it is that you are going to be getting when you choose a Stafford Loan. Unsubsidized and Subsidized Loans When you start looking into Stafford Loans, you will find that there are two different types – unsubsidized and subsidized. It is important to know the distinction, as they refer to just how much interest they are going to charge you on the loan while you are still in school. In 2012, the interest rate for a subsidized Stafford Loan was 3.4%, and an unsubsidized loan was 6.8%. As you can imagine, the rates are going to vary from year to year, and it is always in your best interest to check and see the current interest rate whenever you are applying for a loan. Many people choose to have subsidized loans because it can be better for them from a financial standpoint. With a subsidized Stafford Loan, the government is going to take care of the interest payments while you are in college or graduate school. As you can imagine, this saves students quite a bit of money since they are only going to have to pay the amount they borrowed and not all of the built up interest in their student loan. Of course, you do have to consider any of the lender fees that you are going to have to pay. Still, this is a good option for those who can’t afford to pay the interest while in school. With unsubsidized loans, you are going to be responsible for paying the interest while you are in school. It is possible to defer the payments of this interest, and that’s what some students do. However, this could cause some issues later. If you wait until after graduation to pay them by deferring them, they are going to capitalize the interest. This adds it to the principal of the loan and increases the overall cost. You might be wondering why anyone would choose an unsubsidized loan. They do have some benefits, actually. Every student is going to be able to receive one of these types of loans. Your financial situation does not matter. With subsidized loans, you are still going to have to qualify in order to be able to receive the loan. FFELP is Gone but Direct Loans Remain for Stafford Loans Some of the other things that you will want to look at when examining the Stafford Loans is the term FFELP, as well as Direct Loans. These methods were the ones by which different schools are offering the Stafford Loans. Several years ago, schools were able to choose either of these methods, or both in some cases. Today, things are different, but it’s good to understand what FFELP was. FFELP stood for Federal Family Education Loan Program. With this option, students would have had to find a lender. From 1965 to 2010, millions of students used this method. However, it no longer exists. Colleges would have a list of lenders with whom they often worked. Students could go through this list, look at the benefits and drawbacks of each of the lenders, and then choose the best option. If they found that none of the lenders on their list was right for them, they had the option of looking for another lender of their own that meets their needs better. With the passage of the Health Care and Education Reconciliation Act of 2010, the program stopped, which leave only Direct Loans. With these loans, you will find that your lender is going to be the government. The loans come directly from the government and the U.S. Treasury. This means that they no longer have to worry about paying for lenders for loans where students defaulted. Limits to the Stafford Loans You will find that you do have limits when it comes to just how much you are going to be able to offer when it comes to Stafford Loans. The limits are going to vary based on your year at your school, as well as whether the student is independent or dependent. Here is a quick breakdown of what one can expect. • Freshmen – $3,500 (Dependent) and $7500 (Independent) • Sophomore – $4,500 (Dependent) and $8,500 (Independent) • Junior Year and Senior Year – $5,500 (Dependent) and $10,500 (Independent) • Graduate Students – $20,500 (Independent) It is very important that you know your funding limits with these loans when you are looking for a loan to be able to determine how much additional money you may need to pay for your schooling needs. Are You Dependent or Independent? When you are looking at the above, you can see that there are two different amounts based on whether you are a dependent student or an independent student. You are probably wondering what it is that makes one independent. If you are not relying on any of your parents’ financials to receive your loan and to go to school, you are an independent. Here are a few questions that you can ask yourself to see if you are going to qualify as an independent student. If you are able to answer yes to any of the following questions, it means that you are going to be an independent. • Is your birth date before January 1, 1990? • Are you working on your master’s degree or doctorate? • Are you married? Consider the question a yes if you are separated but not yet divorced. • Are you a veteran from the U.S. Armed Forces? • Are you currently serving in the U.S. military? • Do you have dependents that are living with you (not children or a spouse) who receive more than half of their support from you? • Do you have children who are going to be receiving more than half of their support from you during the school year? • Were you, or are you, an emancipated minor in your state of residence? • After you were 13, were both parents deceased and were you in foster care or a ward of the court? The above are only a portion of the things that could cause you to qualify as an independent student. When you are applying for a loan, you are going to want to make sure that you look up all of the rules and regulations to see just where you stand. Something else that you have to consider is that you may not qualify for the maximum amount of the loan. Certain factors could provide you with less than the maximum. You will know how much you are going to receive when you get your award letter. Some people find that the amount is not going to be enough to cover the cost of their education. To help supplement and pay for the cost, many students are getting private loans in addition to their Stafford Loan. This is going to lead to having more debt, which is something that would be avoidable in an ideal world. Consolidation of loans could be a good option down the road to help when making payments. Applying for Stafford Loans Those who want to receive one of the loans need to make sure that they complete an application for federal student aid. This is true whether they are choosing a subsidized or unsubsidized Stafford Loan. In Chapter 9, we’ll discuss more about what people need to do when they are applying for a loan. While many people are going to qualify for a Stafford Loan, some people are not. The school is going to make the determination of whether a student has the financial need to receive one of the loans. Students are going to need to reapply for the loan each year. Different schools have different application dates, so it is important for students to determine the dates for their college. Repaying the Stafford Loans If you graduate, drop out, or have less than half time status at your school, you will need to start repaying the loans within six months. If you have a subsidized loan, you are not going to have to worry about additional interest during the six months before you have to start repaying the loan. However, if you have an unsubsidized loan, the interest is going to accrue. One of the nice things about the loans is the fact that you can choose from different types of repayment plans. The ability to choose is going to help give you a bit more control when it comes to how you pay off the loan. Many students choose to have an even repayment plan over the course of ten years. This means that each month, you are going to know just how much you have to pay. You could also choose to have increasing payments over ten years. Why would you want to do this? If you believe you are going to be making more money at the end of ten years than you do right after graduation, this makes sense. You aren’t going to have a high income when you first enter the workforce, so lower payments in the beginning could be a very good option for you. However, chances are that you will have a higher income in the future, making those larger payments easier on you. Another option that some students are choosing in order to help make it a bit easier for them to pay off their loans is to extend the life of the loan beyond ten years. Some choose to have a 25-year loan payment plan. This is possible for loans that are over $30,000. You will be able to choose steady or increasing payments with this option as well. A payment option that could work for others is one based on income. A payment plan that will consider one’s income can work out in your favor. Those who have trouble finding quality, high paying jobs will not have to worry about their loan payments being higher than your income. Students can find other installment agreements that might work better for them. The minimum payment is $50 a month. PLUS Loans PLUS stands for Parent Loan for Undergraduate Students, and these are loans that will go under the parents’ name rather than the student’s name. These are still federal student loans, but the fact that they are in the parents’ name is what really sets them apart from the other federal options, such as the Stafford Loans and the Perkins Loan, or even private loans. Who Can Apply for the PLUS Loan? Parents and adoptive parents of dependent students will be able to get these loans for their children’s schooling. Stepparents could be eligible for the loans as well, as long as they report their income and assets to FAFSA. The government is going to set the interest rate of the loans each year, and the rate is going to remain the same for the life of the loan. Currently, the rate is 7.9% for the 2012-2013 year. You will also have to consider the loan fees. The U.S. Department of Education charges a 4% loan origination fee when they process the loan. It is possible to for people to borrow up to the full cost of education minus the other financial aid that they receive. Those who apply for the loans are going to need to pass a credit check in order to receive any loan. If the student is unable to find any other type of financial aid to offset the cost, they can borrow the full amount for their education via a PLUS Loan. However, the lender has to approve someone for that amount. Most schools are going to accept these PLUS loans as long as they accept federal funding. Some schools today do not have this kind of funding, so you always have to check to see whether the school you are considering will accept them. Paying Back PLUS Loans Most of the time, recipients are going to have to start paying back their PLUS Loan 60 days after the second disbursement of the year. However, it is sometimes possible to defer the payments for up to four years. Some lenders may not offer deferment, however. Those who use the PLUS Loan need to reapply for the loan each year and request the amount that they are going to need for that particular year. It is possible to decline the PLUS Loan, which is going to let the student then borrow unsubsidized loans in the student’s name. Parent borrowers are going to be able to request deferment when the child is enrolled at least half time, and for an additional six months after the child is no longer enrolled at least half time. Interest can still accrue on the loan during the deferment. Parents can choose to pay the interest during the deferment, or they can wait until the deferment period ends. When you are choosing a repayment plan, you will find that you have just as many repayment choices as you do if you were to have a Stafford Loan. You can choose to have even payments, a payment plan with lower payments in the beginning and larger payments near the end, an extended loan that lasts 25 years, income based plans, and more. Go over the various options when you are looking at the PLUS Loans to see what it going to work the best for you. What Makes a Student Eligible for PLUS Loans In order for parents to receive the loans, the student needs to be enrolled as at least a half time student, and they need to be enrolled in a degree program. They also have to be doing well in school and making SAP – Satisfactory Academic Progress. Parent borrowers are not going to be able to transfer the loan to their child. The parent who took out the loan is going to be the one who is responsible for the repayment of the loan. Canceling the Loan If you find you no longer need the loan for whatever reason, it is possible to cancel the loan before disbursement. Those who have extra money, from inheritance, added income, or any other reason, might find that they don’t need money from a PLUS Loan. It is possible to cancel all or a portion of the loan simply by contacting the school at different times. When you take out the loan, you will receive information regarding when you are able to cancel the loan. In some circumstances, it is possible to qualify for forgiveness of a portion of the loan or even the entire loan. Perkins Loans Yet another option for those who are looking for funding for school is a Perkins Loan. The loan is low cost and has a guarantee from the government. Colleges are able to provide these loans to low income students who need help covering the cost of their education. How Much is Lendable in Perkins Loans? Undergraduates are going to be able to borrow up to $5,500 per year. Graduate students are going to be able to borrow up to $8,000 a year. However, the college is going to determine just how much someone is able to borrow. The actual amount that one receives could be less. One of the things that many like about Perkins Loans is the fact that they are cost effective. As long as the student remains in school, they do not charge any interest. When the students are entering the repayment phase of the loan nine months after they graduate, the interest rates remain fixed at 5%. Who Receives the Perkins Loans? Independent students are going to be able to fill out an FAFSA form as long as you are an independent student. Those who are dependent students will be able to have their parents keep apply for the Perkins Loan for them. Not everyone who applies for one of these loans is going to receive it. For the most part, only those people who are in need of financial aid and show that they have exceptional need for one of these loans is going to be able to qualify for them. Another thing that you have to keep in mind is that different schools have different amounts of Perkins Loan money that they are able to lend each year. Some schools will have more money than others have. Some schools also have different limits when it comes to income level for the loans. Tax Deductible? One of the questions that many people have is whether they are going to be able to deduct the loan from their taxes. This depends on the income of the borrower when they begin repayment. For those who are single, the only time that you are going to be able to deduct the loan interest is if you make more than $70,000 annually. Repayment of the Perkins Loan Borrowers are going to have to start repaying the loan nine months after graduation, as mentioned. However, if the student stops attending the school, or attends less than half time, the borrower is going to start repaying the loan. Those who have trouble repaying the loan do have an option. For example, if the borrower loses his or her job, it is possible to request forbearance and skip some of the payments. This can be helpful. However, the interest is going to keep accruing during those months. When you start to repay the loan again, you will find that you own more than you did previously because of this interest. Perkins Loans Do Have Benefits One of the good things about the Perkins loan is that they are ideal for students who are working with a low income and who really need help for school. Because they have such a low interest rate, the payments and the overall loan are going to be easy enough to manage. They also offer free insurance, so if the student becomes disabled or if the student dies, they cancel the debt. Deferment is possible as well. Although, as mentioned, the interest can continue to build. Of course, even though it does have a low rate of interest, that doesn’t mean there aren’t any drawbacks to the loan. You aren’t able to cancel student loans if you file for bankruptcy, which makes them different from loans that you might get for a mortgage or your credit card debt. Most of the time, the courts are still going to require that you pay the education loans back. Consolidation Loans In the next chapter, we will go into detail about the federal consolidation loans and look at the pros and cons associated with them, as well as how they are going to work. They are complex enough that they warrant a full chapter, and they are not like the traditional loans in the preceding sections.

Chapter 3: What is Federal Loan Consolidation? When you receive all of your financial aid for schooling, you might have several different loans that you have to use. This is common, as a single loan may not be able to cover all of the expenses at college or graduate school today. However, having a number of federal loans is going to be a hassle. Sometimes, you might find that it’s a better option for you to consolidate your federal loans. This might not be the right solution for everyone out there, but it can help quite a few to get a better handle on the loans. What Does Federal Loan Consolidation Do? Consolidating your loans will help you take all of your outstanding loans and combine them into a single loan that you have to repay. This has some advantages, which we will discuss later in the chapter. This is not the same as private loan consolidation, and it is important to differentiate between the two. Private loan consolidation helps with things such as credit cards or private loans. What Types of Loans Can One Consolidate? With federal loan consolidation, you will find quite a few different types of loans that you could consolidate. Here’s a quick rundown. • Subsidized Federal and Federal Direct Stafford Loans • Unsubsidized Federal and Federal Direct Stafford Loans • Perkins Loans • Federal Nursing Student Loans • Health Professions Student Loans • Federal Consolidation Loans • Federal Direct Consolidation Loans • Federal Insured Student Loans • Supplementary Loans for Students When you choose to consolidate, you do not have to consolidate all of your loans. You can choose the ones that you want to consolidate into a new loan. You do not have to consolidate all of your federal loans if you do not want to, and one of the reasons that you may choose not to is for the interest rate. If you happen to have some loans that have a very low rate, then it might not make as much sense for you to consolidate. The interest rate on a consolidated loan is going to be the average of all of the loans that you are going to include, rounded to the nearest 1/8 of a percent. The cap for the interest rate with these types of loans is going to be 8.25%. Always do a bit of legwork and math when you are thinking about consolidation, just so you can make sure that it truly will be in your best financial interest to do so. The Benefits of Federal Loan Consolidation What are some of the advantages that you are going to find when you consolidate your loans? This is what everyone who considers this action wants to know. Fortunately, you will find some advantages that could make it an ideal choice for you. Here are some of them. Single Payment Each Month Having bill after bill coming into the house is something that everyone detests. Having several loans that you have to pay could be a bit confusing as well. If you do not have a good system of keeping track of everything, it could be very possible that you could miss paying a bill. Missing payments on your federal student loans will cause all sorts of headaches, which we will discuss in a later chapter. By consolidating, you will only have to worry about paying a single payment each month for your loan. This makes it easier to remember and far more convenient. A Fixed Interest Rate You are also going to be able to lock in a fixed interest rate for your entire repayment. The interest rates change yearly, but when you lock in a rate now, that will be the rate that you pay, even if the interest for consolidation loans were to rise over the remainder of your repayment period. This is a nice benefit because it means you do not have to worry about rising interest rates hitting your wallet a few years from now. It Might Lower the Monthly Payment When you are consolidating, it is sometimes possible to extend the period of your repayment. Depending on just how much you borrowed, you could even extend the period up to 30 years. Doing so means that you are going to have payments for the next three decades, but it means that the payment is usually going to be quite a bit lower than it would be otherwise. You do have some other options that you might be able to choose other than consolidation to reduce your monthly payments too. You could find extended payment plans and income-based payment plans instead. In addition, you might find that the loan you have is forgivable. The Public Service Forgiveness provisions are only for Federal Direct Loans. Those who may be eligible will first need to consolidate their loans and then see if they are going to qualify to have the debt removed. In a later chapter, we’ll discuss more about Public Service Loan Forgiveness as well as how it could apply to your repayments. It’s nice that consolidation does provide some benefits for those who choose to go that route. However, it might not be right for all, and consolidation could have some drawbacks as well. Disadvantages of Federal Loan Consolidation It is very important that you look at the possible drawbacks that consolidation could cause for you before you make your decision. You will want to research the good and the bad so you make the choice that’s right for you. Let’s look at the cons of consolidation. Loss of Lender Specific Benefits on Direct or Direct Grad PLUS Loans When you receive some loans, the lenders may have certain benefits that they offer. These could be reductions in your interest rate or your payments. This could lower your overall amount for repayment, and you might find that keeping these types of loans is going to be a better option. When you consolidate your loans, you will find that the benefits of those individual lenders will no longer apply. This means that the consolidation could actually cause you to spend more money. Losing Cancellation Benefits Another one of the benefits that you might lose is the ability to cancel underlying loans. Perkins Loans, for example, have cancellation provisions, as do some Direct Loans. It is important to look at and review cancellation policies on the loans before you choose to consolidate. Loss of Grace Periods With most federal student loans, you have a grace period after graduation before you have to start paying the loans. This time varies based on the type of loan that you have. The Direct Loans have grace periods of six months, while the Perkins Loans have grace periods of nine months. This grace period is there to help ensure that you have time to find a job and have an income before the first payment. When you consolidate, you are going to need to start paying your consolidation loan immediately. How to Apply for Consolidation Applying for a federal consolidation loan is not hard, but you have to make sure that you have everything in order. Once again, make sure that you research and choose the right option for your particular situation. The First Step You have to make sure that you have all of your student loan information ready for all of your different loans that you want to consolidate. Here is the information that you are going to want to have available. • Type of loan • Current balance on the loans • Name and address of all of the lenders • Account numbers • Current interest rate on all of the loans Of course, some people might have trouble locating all of the information. After a few years, it could be possible to lose some of your information or misplace it. If you have trouble finding your federal student loan records, you can always visit www.nslds.ed.gov in order to find the information. Having the information is going to make things far easier for you when you are applying for your loan. The Second Step Your personal information is important as well, so have it on hand. • Address • Phone number • Email address • Address • Social Security Number • Driver’s license number • Date of birth • Two references • Employer information The Third Step Look for a lender that would be right for you. You might have lenders that already offer consolidation loans, and one of those lenders could be the right solution. If you aren’t already working with a lender, then you are going to have to find one that offers consolidation. Make sure that you have a high quality lender too. The Fourth Step Different lenders have different minimum requirements in order for someone to obtain a consolidation loan. Some lenders are going to require that you have at least $7,500 for you to consolidate. Others are going to require a substantial amount more, such as $15,000. Since different lenders do have different requirements this is one of the things that you are going to want to find out while you are researching. The Fifth Step Now that you have a lender in mind, and you have all of your federal loan and personal information, you can complete your actual loan consolidation application. Some lenders will have online applications, while others may have paper applications that you need to complete. The Sixth Step After choosing your lender, you are going to be able to choose a repayment plan. Most lenders will have several options from which you can choose. Take some time to look at each of the plans that they offer and compare them. Choose the one that works well for your current situation. The Latest Rules for Consolidation and Payment with FFELs Over the past few years, things have been changing when it comes to federal consolidation loans, as we talked about earlier. Only the Federal Family Direct Loan Program is available now. However, quite a few people still happen to have the older FFEL (Federal Family Education Loans) on which they are continuing to pay. In addition, millions of people out there actually have at least one FFEL loan as well as a Direct Loan, which can start to make things confusing when one is trying to look for consolidation. Having so many loans makes the possibility of defaulting on one of the loans more likely. The loan consolidation initiative from the President will allow you to consolidate FFEL loans in a Special Direct Consolidation Loan. These are great for getting everyone who is currently on board with an FFEL onto a Direct Loan. However, you will not be able to transfer your private loans. This makes things easier for you since you will have just a single payment. You could also get a 0.25% reduction in the interest rate when consolidating. Even though this might not sound like much, it can save quite a bit in interest costs over the life of the loan.

Chapter 4: Understanding Private Student Loans You may find that you simply can’t get all of the money that you need for your college education with federal student loans. Even though they are often going to be a much better choice than other types of loans, the federal loans might fall a bit short. Private Loans Could Be an Option When that happens, one of the other options that many people consider is private student loans. You know that a college degree is something that has the potential to help make your future a bit brighter, and you are often willing to do just about anything to get the money that you need for an education. You do have to make sure that you are smart about the loans that you choose though. Private loans might be able to make up the difference in the costs so that you can go to college. However, you need to be aware that the loans are often going to have higher interest rates and fees associated with them. This means that choosing the wrong loan could end up costing thousands extra. You must always make sure that you read all of the paperwork and the fine print before you choose any type of loan. BEFORE Applying for the Private Loans Before you decide that the only way that you can pay for your school is to use private loans, make sure that you check all of your other options. You should check through all of the different federal programs for loans first. Determine the overall cost of your college expense and then see the difference so that you do not end up getting a private loan that is far more than what you really need. In addition, make sure that you look for all of the other options available to provide you with more funding. For example, you should look for grants, as they can be one of the best ways to get money for school. The nice thing about using grants is the fact that you do not have to pay that money back. The federal loans typically have better rates, so exhaust the possibility of a federal loan first. Another option that you might want to consider is a work-study program to help you offset the cost of college. The Federal Work Study Program could be a fine choice to help you reduce or even eliminate the need to get a private student loan. How Does the FWS Program Work? This program helps students to earn money that goes toward their education. Formerly the College Work Study Program, the FWS will let students earn rewards that go toward postsecondary schooling. Several different factors are going to determine whether one gets into the program or not. The students who are able to become a part of the program will need to work through their college in order to earn the money for their tuition or other expenses. Because of the many schools that offer this, students are able to find a host of different types of work that they can do. Often, the work that the student does will have some relation to their field of study, but this is not always going to be the case. It should be possible for both graduate students and undergraduate students to become a part of the program. Those who choose to partake in the program are going to be earning at least the minimum wage for their efforts. This program is a good way to help those students who truly have a financial need. Where Do The Funds Originate? The funding for the Federal Work Study program comes from the government, but not all colleges and universities are part of the program. To receive funding, the university must first request it. Each of the organizations receives a certain amount of money for their funding, and once they allocate that to students, no other students will be able to join the program for that year. Students are going to be able to apply if they demonstrate financial need. They have to fill out the FAFSA (Free Application for Federal Student Aid) as well. The organizations all have their own methods by which they choose to disburse and allocate the funding. Universities are going to provide jobs through their school, as well as with private employers. At least 7% of the jobs need to give back to the community in some way. Becoming a tutor in the community is one of the options that many students will find with work-study programs, but it is just one of the options. Working in the library or working as admin in one of the office areas are some others. Restrictions Some of the universities might have restrictions and rules that you have to follow. For example, some may limit the number of hours that you are able to work per week. They want to make sure that you are not spending so much time at the job that you are not concentrating on getting a quality education. Keeping up good grades is important. If you drop below a certain GPA, they could pull you from the program. Qualifying for the Program All students who have a financial need can apply. However, not all students are going to get into the program, and not all students will get all of the financial help that they need. The program is going to determine just how much you are eligible to receive. Keep in mind that some schools do not participate. Check with yours to see if this is even going to be an option for you. For the most part, foreign students are not going to qualify for the Federal Work Study Program. However, that might not always be the case, as you will see. Qualifications: • U.S. Citizen • U.S. National • U.S. Permanent Resident who has a Permanent Resident Card Still, if you do not fall into one of the above categories, you could still qualify. You would need to have an Arrival-Departure Record (I-94) from U.S. Citizen and Immigration Services (USCIS) that shows that you: • Are a refugee • Have been granted asylum • Are a conditional entrant (valid if issued prior to 1980 • Are a Cuban or Haitian entrant with a pending status Certain other conditions could also qualify you for the FWS program. However, it is always a good idea to look for the latest information on the program to see what changes it might have. Applying for FWS Those who believe that they are going to qualify for Federal Work Study will need to fill out the application form. When completing the FAFSA from, look for the box that asks whether you want to be under consideration for the program and check it to let them know. If you do not check the box, you still have a chance of getting into the program. Schools will have deadlines by which you are going to need to apply though, so it is important to talk with someone at the organization as soon as you are able to do so. The program will determine whether you meet the financial requirements and will then let you know how much you qualify for if they do approve you. It is a good idea to apply as early as possible. Once the funds are gone for the year, no other students are going to be a part of the program. Now that You’ve Exhausted Your Other Options… Once you get everything that you can through the FWS program and federal loans for your schooling, you still might find that you are just able to pay for all of your college expenses. This could mean that a private loan is the only way that you are going to be able to get the rest of the financial help you need. However, you do not want to run out and choose the first lender that you find. You have to make sure that when you are borrowing money you do so as intelligently as possible. How Much Do You Need Check your financial situation and determine how much you are going to need for school. Never borrow more than you actually need, as the interest and the debt are going to accrue far more quickly than is going to be comfortable. This makes it far too easy to get in over your head with student loan debt, and that situation is affecting millions of people right now. Do Your Research Before you choose a loan, you have to do a bit of research so that you know about the lender that you are choosing. Learn about the loan process, the rates, as well as the fees that you are going to have to pay when get a loan. The more you know now the fewer surprises you are going to have to face down the line. What Should You Look for in the Private Student Loan You have to think about quite a few things when you are getting a private loan. Remember that you are going to have to pay for more than just the cost of the loan. You also have to think about the interest rate on the loan and the fees that you are going to have to pay. The Interest Rates It is true that the interest rates are very important. Getting a good and low interest rate is a good thing, and it has the potential to help you save some money. However, a loan that has a low interest rate is not the only thing that you have to look for when you are choosing. Some of those low interest rates may have high fees associated with them. Check to see what the fees are going to be. You want to find something that has the right balance along with the right interest rates. Low interest rates seem almost to be the bait with which lenders are able to draw in people, particularly students in search of loans. They advertise low rates and promise that they will do everything that they can to help you find a low rate, but so many factors are going to determine your rate that you can’t simply trust the advertisements of a lender. With private lenders, many things are going to affect the interest rate, and they can fluctuate often. On the other hand, the federal student loans are able to offer locked in rates. In addition, the interest rate is going to be the same with federal loans regardless of the credit score. This can make them a bit easier to get for some people. Of course, some private lenders are actually able to offer fixed rates, and this is something that you are going to want to look into when you are getting your loan. Fixed rates are nice because you always know how much you are going to be paying. Variable rates aren’t necessarily bad though. For those students who believe that they can pay the loan back in a relatively short period, variable rates could be a better solution. Getting a Better Deal One of the best ways to ensure that you are going to get a good rate on your loan is to have a cosigner who has good credit. Sallie May reports that in 2011, more than 90% of the people applying for private student loans were using a cosigner to help them get a better rate. A history of good credit is important too. Since most students have only a recent or “shallow” credit history, it often isn’t enough to inspire confidence in the lender. Having someone who has many years of good credit history, such as a parent, is important. This could potentially help you to save thousands of dollars over the life of the loan. Understand the Repayment Plans Different lenders have different repayment plans, and you have to make sure that you really understand. You might find there are some loans that have longer repayment plans and lower rates, and they might seem as though they are easier for you to afford because the payments are lower. You have to look at the length of the loan and figure out just how much you are going to have to pay. These loans with long repayment terms could actually cost you more money. You should also make sure that you compare all of the plans that the lender is able to offer, and compare the plans of other lenders as well. Know the Terms – Vocabulary and Financial! More knowledge is always going to lead to you making better choices. Thus, knowing the terms involving loans is a good idea. Whenever you are speaking to lenders regarding your loans, make sure that you ask questions. If you are uncertain of any of the terms or vernacular that they are using, then you will want to make sure that you ask them to clarify. In addition to knowing the terms associated with loans, you will also need to make sure that you know and understand the actual terms of the loan. Know what it is that you are signing and agreeing to pay. Things to Remember Sometimes, you might not get all of the details for the loan terms until you actually apply for the loan. This is because they need to check credit and other factors to be able to determine the exact rates for which you are going to qualify. You do not have to accept a loan just because they offer it to you though. Never sign any paperwork for a loan with terms that you find disagreeable or that could cause you some financial hardship in the future. Always make sure that you are working with lenders who have good reputations and who are going to be able to provide you with good customer service. Remember that this is a long-term relationship. You want to have a lender who is actually going to be working for you and who will be able to help you when you have any questions or concerns. Getting an Early Start You should also consider getting an early start on paying back your private loans. Instead of waiting until you are out of school to pay the loans, it could be a good option to get a part time job and pay off some of your debt early. This can help to offset the amount of interest that you are paying. Interest will push up the amount that you owe, and anything that you can do to cut that interest down is going to be helpful for you. What are the Biggest Issues with Private Student Loans? Sometimes, you need them, but they are not always the ideal choice. You will find that quite a few people have some issues with these types of loans. One tends to hear similar types of complaints from different borrowers too. Here are five of the biggest issues with private student loans, and they are things that you are going to have to consider when you are weighing the pros and cons of these types of loans. Some deal directly with the private loans while others are ancillary problems connected to them. • Not enough income to pay the loan each month after graduation and trying to get a job • Not enough repayment options through the lender • Lender didn’t offer enough help • Poor customer service in the financial aid office at the school • Not enough knowledge about the different types of loans to make the right decisions We will go over each of these problems in a bit more detail now. Poor Income While it might not directly be the fault of the lender, a poor economy often means that getting a job that will help to pay off the loans upon graduation is not always an easy feat. Those who get out of school and cannot get work in their field – or any field for that matter – are going to have trouble paying off their debt. It is easy for them to slip into having late payments, which leads to deeper financial trouble. Limited Options If the lender through which you are borrowing is not able to offer you all of the different repayment options that you want, then they might not be the right lender for you. When you are making a deal and getting your loan, make sure that you look at the terms in writing so that you are getting what you want. Most lenders are going to be honest, but they could mislead you by mistake or on purpose, simply to get you into the loan. Check out all of the options that they have, and if you aren’t able to find anything that works for your repayment needs, then you should look for another lender. Poor Service with the Lender Some lenders have better customer service than the others do, and this is something that you will certainly want to consider. Many people find that they do not have quality customer service and they can’t find the answers to things that they need. When you are getting a loan, it is a huge deal and a huge financial commitment. You have to have a lender who is willing to walk you through everything slowly and who will explain things to you in terms that make sense. Rushing you or pressuring you into a loan that isn’t right are sure signs that you need to walk out of the lender’s office and find someone else. Poor Service at the School’s Financial Aid Office One of the sources that you should be able to trust when you are getting your information regarding paying for school is the college’s financial aid office. They should work to help you understand the differences in the types of loans, and they should strive to explain the pros and cons of different types of loans, grants, work-study programs, and more. They have the knowledge, but in some schools, they do not provide that knowledge to incoming students. You can do research on your own, as you are with this book, but the financial aid office should be a veritable treasure trove of information on how you can get funding for your college education. Lack of Knowledge Here is yet another area where people have disappointments with private loans. They simply don’t have enough knowledge when it comes to understanding the differences between federal loans and private loans. This often leads people to seeking private loans prematurely. We’ve already talked about some of the other options that you have before you get a private loan. Make sure that you take all of these under advisement, and ask peers, parents, and everyone else in your life if they have other suggestions on how you can get money for school without needing to take out a loan!

Chapter 5: Charitable and Other Types of Loans When you begin your journey of looking for different types of loans that will help you pay for college, the ones mentioned in the preceding chapters are the ones that you are going to hear about most often. They are going to help many students, but they are by no means the only loan options out there today. In this section, we’ll look at some of the other options that you have, including some other types of federal loans that might work for you depending on the type of schooling you are going through. Charitable Interest-Free Loans We know that interest is one of the biggest problems when it comes to student loan and paying them off. How nice would it be if you didn’t have to pay the interest at all? This is actually a possibility when you start looking into some colleges and charities that are actually offering loans that charge no interest. This has the potential to help students save thousands of dollars. Some of these charitable loans have geographic conditions attached to them. For example, some organizations are only offering loans for students that are going to attend a school in Texas, while others might only offer interest-free loans for students who go to school in a certain city. Other programs are a bit more open about where the student will be able to receive an education. They can offer loans for students no matter where they are in the country. It all depends on the school or organization that is offering the loan. When looking for financing for your schooling, check to see if you can find any charitable loans for which you might qualify in your area or a loan that applies to students all around the nation. No More Interest Worries with Charitable Interest-Free Loans When someone is just starting out in school, the concept of interest might not really feel important. Paying the loan still seems as though it is a lifetime away, and the interest rates might even appear small. However, over the life of a loan, the rates are what can cause problems later. By getting loans that cut out the interest entirely, you are going to be able to save thousands of dollars. Will Interest-Free Loans Pay for Everything? Loans without the possibility of interest sound great, and they really are. However, one of the questions that many people have when it comes to these loans is whether they are going to be able to pay for all of the educational expenses that a student might have. Let’s look at a few current examples of these types of loans to see just how much they are able to offer. This is going to give you a much better idea of what you can expect if you are fortunate enough to qualify for and receive one of the loans. The Central Scholarship Bureau of Maryland Each year, they offer loans of up to $10,000 for 150 students in Maryland. They require that the borrower have a cosigner who will commit to repaying the loan. In most cases, this is going to be a parent or a guardian who will cosign for the loan. The student should still be the one responsible for ensuring payback though. The Evalee C. Schwarz Charitable Trust for Education They are able to offer loans of up to $15,000 for students with grates that are in the top 10% of their class. They have to have Expected Family Contributions less than $4,600, and they can’t be trying to obtain a law degree. In addition, they have to attend schools that are in the state. The Massachusetts No Interest Loan Here is a loan that’s for undergraduates who are permanent residents of the state of Massachusetts, and who are attending school there. They can make loans that are up to $5,000. These are just three different options when it comes to these no interest loans, and you may be able to find something that it going to work for you. However, it might take a bit of digging and research. You can see that the amount of money offered via these interest-free loans varies as well. The loans that you receive could well be enough to pay for all of your educational needs. However, you could find that the loan still needs some sort of supplement to work for you. What Does Expected Family Contributions Mean? The EFC is simply the amount of money that a student can expect their family to contribute when they are going to school. This varies by family, naturally. In Chapter 9, we will learn much more about EFC and how one will be able to calculate it when preparing to apply for loans and school. Federal Nursing Student Loans If you are going to school for nursing, then you can also find some loans specific to getting an education in that field. These can help with the costs of the programs that you are attending, and they have some nice benefits. The federal nursing student loans typically have a low interest rate. Undergraduates and graduates alike will be able to apply for the loans, but they do have to be able to prove that they have a true financial need for the loans. How Do the Loans Work Students will be able to speak with the financial aid representatives in their school, who will then be able to provide more information about qualifying for the loans. Since they are federal loans, the government is going to fund the loan for you. The school in this case will act as the lender. One of the things that you need to realize though it that not all schools are going to participate in this program. If you need one of these loans, it is a good idea to check to make sure that the school you want to attend actually offers this program. Great Interest Rates Another one of the good things about these types of loans is that you are not responsible for paying interest while you are in school. You do not have to pay interest during the grace or deferment periods either. When the interest does kick in, you will be happy to note that it is a fixed rate, so you do not have to worry about it jumping to a higher rate a few years down the line. This makes the loan much easier to pay for many students who need the financial help to get through nursing school. What are the Loan Limits? As with all loans, these have their limits. Nursing students are going to be able to borrow $2,500, although this rises to $4,000 during the last two years of study. However, these limits are not set in stone. Schools can increase the max amount offered to students enrolls in a school that has a course of study in a 12-month period that is more than 9 months long. This means that the actual amount allowed per year could be more than $4,000 in some cases. Again, this is something that you will want to discuss with the financial aid office in the school that you are attending, as different schools may have different policies on who will be able to receive the funding. The world needs more quality nurses, and the federal nursing student loans are a great way to help those students who need a bit more money to finish school so they can get into the workforce. Health Professions Student Loans While this might sound as though it is similar to the federal nursing student loans above, they are actually quite a bit different. These low interest loans are available to graduate students and undergraduates. However, the students of these programs do have to be in a doctoral program in order to qualify for the loan. They need to be in one of the following programs: • Dentistry • Allopathic medicine • Osteopathic medicine • Podiatric • Veterinary medicine • Pharmacy • Optometry These loans also come from government funding, and you can inquire about them through the school’s financial aid office. The school is actually going to act as the lender in these cases, and this is actually similar to the nursing student loans discussed in the previous section. Students do not have to worry about paying interest on the loan while they are in school, as well as during the grace period and any deferment periods. Qualifying for and Applying for the Loan Those who borrow need to be United States citizens or eligible non-citizens. Income of the parents will also be one of the considerations for these loans. It does not matter if you are currently a dependent of your parents or not. Your financial aid office will be able to let you know if you qualify. To apply for one of the loans, you have to make sure that you complete the FAFSA by the deadline at your school. Make sure that you include information on your parents on the sheet. Dependency status does not matter. The Interest Rate Those who receive these loans are actually quite fortunate, as the rate is relatively low. The current 5% interest rate on these loans, like the nursing loans, is not going to rise. You receive a fixed rate so you know what your payments are going to be over the life of the loan. The Limits of the Loan Borrowers will be able to borrow up to the difference between the education costs minus the total of any need-based financial aid and the expected family contribution. Different schools may have different annual loan limits for students. This is something that they base on their funding. If they do not have enough money for more loans that year, then you are not going to be able to receive one even if you qualify. This means that applying early is always going to be your best bet. It also means that you do not want to have any errors or omissions on your application that could delay the process. Going through school to become a doctor is not going to be cheap, and most students really do need all of the help that they can get. It’s nice to know that you could receive a loan with a decent interest rate that can help to make paying off your massive debt later at least a bit easier.

Chapter 6: Bad Credit Loans for School and Dealing with Bankruptcy The economy has been unkind to many of us over the past few years, and even though things seem as though they are starting to turn around, it’s too late for many. The damage to their credit is already there, and that means that getting a loan for your own schooling or for your kids to go to school, is going to be difficult. From job layoffs to increases in the cost of living, quite a few things were ravaging the wallet. It does not have to be impossible to get a loan for school though, and you can find some bad credit loans for those who need them. You do not have to give up on your dream of going to college, but you do have to use your head and be careful when you are considering using one of the bad credit loans out there today. Your First Stop: Federal Loans Federal loans are great if you have bad credit because they have some loans that you can get without a credit check. Even better, these are low interest loans, so you don’t have to worry about having high interest looming over the loan. These loans are the Stafford and Perkins Loans we went over earlier, but we’ll reiterate their benefits for you here: • Lower interest rates and fees than private loans • The government pays your interest while you are in school • You probably won’t have to make any loan payments while you are in school • The repayment terms have better options, and they often have longer repayment periods The Next Stop: Private Loans Aren’t private loans going to be difficult – almost impossible in some cases – to get since you need to have good credit to approach most financial institutions that provide loans? These aren’t necessarily impossible to get, but they are difficult. It can be exceedingly hard to find a loan from a lender that has a decent reputation. The only way that most people who have bad credit are going to be able to get one of these types of loans is if the loan also has a terribly high interest rate attached to it. They are likely to have a plethora of restrictions as well. These restrictions and rules are so fewer people default on their loans. In addition, the fees associated with the loans for bad credit are usually higher as well. It Could be a Trap! Con artists are never far away, always lurking and waiting for the moment to strike. That’s certainly true when it comes to student loans. The scammers like bad economies and people who have bad credit because they know that those things breed desperation. People are willing to take chances to get a loan that they would not be willing to take before. The con artists know that they can rip people off in these conditions. They simply have to dangle the promise of a private loan in front of those people, telling them that the loan is a perfect solution for them. They show off loans with agreeable terms and low interest rates. They promise the world, including a wide range of simple repayment options from which you can choose. Everything seems great, but you have to be careful. Too Good to Be True If you provide these people with your information or any money for the “loan fees”, then you are likely going to be in for a world of hurt down the line. They aren’t going to provide you with a loan. They just wanted to take the fee money from you and then they vanish into the ether. Whenever you see a private loan that seems too good to be true, chances are that you are right. It is too good to be true and it does not exist. Another Ruse Another thing that some con artists might to in order to dupe people into handing over information and money is to pretend that they are offering federal loans rather than private loans. They may even tell you that you have a guaranteed loan awaiting you and use vernacular that makes it seem as though they are legitimate. Always be careful whenever someone promises you the world and “just needs a bit of personal information and some money”. Always Vet the Lender When you are searching for a lender for a personal loan for your educational expenses, you need to make sure that you do the proper amount of legwork. Look up several different lenders that say they are able to offer student loans to those who have bad credit. Look at the reputation of the company that is doing the lending, and then look for any complaints about that company on the web. You want to have as much information about the companies as possible, as it can help you when you are making your decision. Find companies that have a good reputation, and then submit applications. Because the application process can take some time, it’s generally a good idea to solicit information and apply to as many of the lenders as you can find that pass the vetting. Apply to several quality lenders and see what they are able to offer you. If you really need the money for your schooling, and the federal loans are not able to cover all of your expenses, this could be the only option. Just make sure that you look closely at the terms and read all of the fine print. You don’t want to work with a lender that seems to have a great interest rate in the beginning of your loan and is then going to double it in three to six months. This is just going to make the payments so high that they can become nearly impossible to pay. The only thing that it is going to accomplish is making your credit even worse than it already is. Working with a Cosigner If you have bad credit, you do have another option that can help you to get a loan and make the payment more affordable for you. You will want to get a cosigner for your loan. This is often a parent or another family member. However, it does not have to be a relative. As long as you have someone in your life who has good credit and who is willing to sign on the dotted line to ensure that you are going to get a good education, then you could get a loan. Make sure that you choose someone that you trust and someone who trusts you. When you have a cosigner, he or she is not going to be the only name on the loan. They are cosigning, and that means that your name is going to go on the promissory note as well, and you are in charge of making sure that you pay your debt on time each month. If you have trouble making your payments, it also means that the lenders are going to come after the cosigner. Make sure that you do not put your cosigner in this position. It isn’t fair to them, and it can worsen both peoples’ credit. What if You Do Get a Personal Loan? Even though it might not be as advantageous to have a personal loan when you have bad credit, it is still possible to get one. If you do have one of these loans, you have to make sure that you pay your bill on time and that you look for ways that you can pay off your loan early. Tips for Dealing with a Private Loan with Bad Credit We’ve said it before; interest is how lenders really get you. This is why the personal loans with high interest rates are a bad idea and should always be one of your last resorts. Still, if you have one of the loans, you are going to want to know some things that you can do to help make your life a bit easier. Here are a few. • Improve your credit • Refinance your loan • Consolidate loans • Pay the loan off early Improving Your Credit While you are in school and you are working toward your degree, you have to make sure that you do not do anything that is going to make your credit worse. Do not take out more credit cards and more debt. Make sure that you are making payments to your current debt on time. Even though you don’t have to work on paying back your student loans while you are still in school, you probably have other bills. Always do your best to make sure that you are making those payments on time each month. What is this going to do for you? You will find that you are starting to improve your credit so that by the time you finish with school, you will have a much better score, and this really can help, as you will see. Refinance the Loan Now that you have started to rebuild your credit over the past few years, you can always consider talking with the lenders about refinancing your private bad credit loan. The loan that they gave you was one based on your bad credit. Now that you have better credit, you might find that you have a much better possibility of getting a good deal by refinancing. Some lenders might not be willing to work with you quite yet, and that’s understandable. Start paying your private student loan off each month, and approach them again in a few months. Eventually, chances are that they will look at refinancing your loan and giving you a better interest rate, which could help you to save several thousand dollars over the course of your loan. Consolidate Loans Here is another option for those with loans that have high interest rates. Look at a consolidation plan. Just as you can consolidate federal loans, you are going to be able to do the same thing with the private loans, as long as you are able to find a willing lender. By improving your credit, you will find that getting a lender that will provide a consolidation loan for your private loans is going to be much easier. When you consolidate, you could qualify for a better interest rate, and you will only have to worry about a single bill each month. Of course, if you also have federal loans, you have to pay those as well, and you will not be able to consolidate federal and private loans into one. Pay off the Loan Early Here’s another idea if you are able. Consider saving some money during your college years. Getting a part time job and saving can come in handy later. You could use the money that you save to pay off a large chunk of your loan as soon as the first payment is due. Start making payments that are higher than the minimum too. Even though it might mean a bit more scrimping and saving when you are just out of school, you will be able to pay off the loan earlier. Getting Student Loans after Bankruptcy Bad credit is one thing, but bankruptcy is another. One of the biggest questions that people who have gone through one of these proceedings have is how their bankruptcy is going to affect their chances of getting student loans as well as other types of financial aid. Of course, as with so many things when it comes to loans, it all depends on several factors. You have to consider what types of loans you want or need to use – federal or private, as well as the type of bankruptcy. Regardless of the reason behind the bankruptcy, one of the first things that the student is going to want to do is talk with the financial aid office at the school he or she hopes to attend. During the conversation, it will give the student the chance to explain the bankruptcy and the reasoning behind it. This also helps to give the financial aid office more insight into the student’s current financial situation. It might then be easier for the financial aid specialist to help the student find some lenders and options that might be able to work for their specialized needs. Let’s look a bit deeper into the differences between bankruptcies when trying to get different types of loans – federal and private. Bankruptcy and Federal Loans Most of the time, a bankruptcy really isn’t going to affect a student’s eligibility when it comes to getting financial aid from a federal loan. This was not always the case, however. Years ago, any student that had bankruptcy would have to reaffirm their debt if they hoped to have further federal student aid. In 1994, the Bankruptcy Reform Act changed all of that. For example, if a borrower already had FFELP loans, and those loans were discharged in a bankruptcy, the student no longer has to reaffirm the loans to receive more financial aid. Perkins Loans Those who are hoping to receive the Perkins Loan will find that bankruptcy is not sufficient reason to disqualify someone from getting the loan. The administrators who are making the determinations can’t cite bankruptcy as evidence that the student will default on the loan and not repay. However, many schools are going to look at the credit worthiness of the student after they filed bankruptcy to help them determine just how willing the student is likely going to be to repay the debt. You Should Qualify for the Perkins If the student does not have defaults or delinquencies on any loans they are currently trying to repay, then it should not be too much of a problem when it comes to getting another loan despite having filed for bankruptcy. One of the things that could cause you not to be able to get a loan though is if you have other federal student loans not discharged with the bankruptcy and if they are in default. If you have loans in this situation currently, it’s important to contact the lender so that you can set up a repayment plan. PLUS Loans Parents who are trying to get a PLUS Loan for their children might have a bit of trouble if they have bad credit history. In this case, bankruptcy is definitely going to count against them if it was in the last five years. However, if they can find an endorser for the loan who has good credit history, they may still be able to qualify for the PLUS Loan. Another thing to consider is that if the parent’s aren’t able to get the PLUS Loan because of a bankruptcy or other issues with their credit history, is a Stafford Loan. The student will be able to apply for an unsubsidized Stafford Loan, which can give them the money that they need for school. This way, they do not have to worry about their parent’s poor credit history. Bankruptcy and Private Student Loans Private loans are very different, and because so many different types of bankruptcies exist, it can become complicated rather quickly. Once again, the best bit of advice for students who find themselves in this type of situation is to set up an appointment with a financial aid administrator at the school they are hoping to attend. Students are also going to want to talk with the lenders they are considering and try to show them that they are not risky borrowers. Always have information and facts about your bankruptcy so that you will be able to show the reasoning and circumstances behind why it occurred. The lender might actually be more willing to provide a loan if the borrower can secure it. This makes it safer for the lender. If there are still issues, it might even be a good idea to speak with the lawyer who went through the bankruptcy process with you for some more advice. What are the Types of Bankruptcies? As mentioned earlier, a number of different types of bankruptcies exist. You don’t have to know everything about them, but having at least some knowledge of what they are can help you. Chapter 7 This is a complete liquidation of all personal assets in order to repay money owed to debtors. Chapter 11 Another term for this is reorganization bankruptcy. With this option, the debtor files a plan with the court to repay creditors. Most of the time businesses are the ones who will use this type of bankruptcy. Debts that fall into this category must reach over $1 million total. Chapter 12 Chapter 12 is a type of bankruptcy that farmers use. Chapter 13 This is another type of reorganization bankruptcy. Again, one would file this with the courts. The main difference is that this type of bankruptcy is for debts totaling less than a million dollars. Most of the time, it will be consumers who are going to be filing this and not businesses. The Impact of Bankruptcy with Private Student Loans With private loans, the bankruptcy is going to have much more of an impact than it will with federal loans. Most of the time the private loans are going to have specific and detailed lender requirements. Bankruptcy in the past 7 to 10 years often means that you are going to have trouble getting a loan unless you have a cosigner who has great credit. However, you will find some exceptions to this. If the reason for the bankruptcy was something that was out of the control of the borrower’s hands, lenders might be more willing to understand. Some of the reasons that might qualify as exceptions include unexpected medical costs and natural disasters. If your parents went through the bankruptcy, then you should not have trouble getting private loans. The only time that this could affect you is if the parents have to sign the loans as well. If the bankruptcy a student filed for included any type of payout plan, even if it was a discounted payout plan, it could be good news for the student applying for a private loan. Most lenders are going to see these people as a better risk than someone who filed Chapter 7 and had to pay nothing. What About Discharging Student Loans with Bankruptcy? Another question many may ask is whether it is possible to discharge their loans with a bankruptcy. Perhaps they’ve had trouble getting work or have had other financial issues slam into them that are making it difficult or impossible to be able to pay their bills, including student loans. Most of the time, student loans are going to fall into the category of things that you will not be able to dismiss from your debts. Along with things such as child support, alimony payments, and income tax, you are going to have to pay. Once more though, exceptions can come into play. The only time that one would be able to discharge FFELP or FDSLP loans for education would be if they file an undue hardship petition. Even after filing the petition, it is going to be up to the judge to determine whether it will be possible to discharge the loan. Getting Help If you find that you are in a situation where it becomes impossible to make the payments, then you are going to want to set up an appointment with an attorney to see what it is that you might be able to do to help climb out of the situation. Filing for bankruptcy could be the right choice, and the right attorney can let you know if you have any hope of being able to discharge your student loans. Some of the things that you will likely have to show and prove if you are going to be filing an undue hardship petition are the following: • Show the court that you are living at, or below, poverty level. Courts are usually going to look at all of your income and expenses to see where you stand and whether or not you will qualify. • The debtor also has to provide proof of other additional hardship circumstances. Some of these could include being disabled or having a mental illness or physical illness. The courts are looking for a certainty of hopelessness. • The debtor must have tried to pay back the loans and demonstrated good faith in doing so. If one were to file for bankruptcy immediately upon graduation, it would not show that the person was at least trying to make the payments to the creditor on time. The Chance of an Undue Hardship Discharge If you believe that you could receive this type of discharge, there is a very good chance that you are wrong. Those who file for this type of discharge will rarely receive it. One of the reasons that it is so hard to qualify is that when this became law, Congress did not have a clear definition of what “undue hardship” really meant. In fact, there is still no real and true definition. This means that the decisions of the courts are somewhat arbitrary. Few cases that go through the court system today will have the debts discharged. This is true for federal student loans as well as for private student loans. What about Unpaid Tuition Bills? Unpaid tuition bills are different from loans, and it is sometimes possible to have these debts discharged. If the family didn’t sign any promissory note with the university, it is possible that unpaid tuition bills could be discharged in a bankruptcy. However, that’s not always the case. This will often depend on whether they are an actual loan or contractual obligation. If they classify it as a loan for education, then it is going to be very difficult to discharge. If it is a contractual obligation, it should be much easier for you to include them in your bankruptcy. You Have Hope No one likes the thought of having bad credit or needing to file for bankruptcy. They are things that can affect you financially, emotionally, and that can cause you to have a lower sense of self worth. That’s a horrible feeling to have, and it becomes even worse when you think that there is no way out and that you could never get the college education that you want. Fortunately, you can now see that you do have options and that you do have hope when it comes to getting an education and thriving.

Chapter 7: Which Federal Student Loans are Best? At this point in the book, you should have a bit of a better understanding of what types of loans are out there and what types of loans you should try to get. Federal loans, simply by the benefits they offer, are the way to go. Of course, we’ve seen that private loans are an option as well. Why are Federal Loans a Better Choice? Let’s look at and compare all of the favorable points and benefits of the federal loans one more time. Federal Loans • You don’t have to start paying your federal student loans off until you graduate, leave school, or start attending school less than half time. • You will have a fixed interest rate that is usually lower than what you will find with private loans. • It is possible to choose subsidized loans so that the government is paying for the interest while you are in school • No need for a credit check with the majority of federal loans that are out there right now, and using these loans can help you to build or rebuild your credit score. The only type of loan that you will need to have a credit check is for PLUS Loans. • Most students find that they do not need to have a cosigner when they are applying for these loans. • It could be possible to deduct the interest on the federal student loans from your taxes. • You could choose a Direct Consolidation Loan to consolidate your federal loans so that you have just a single payment each month. • Those who have trouble paying their bills sometimes have the option of deferring their payments, or even renegotiating so that they can have lower payments each month. • You have a wide range of repayment options when you choose to use federal student loans. • You do not have to worry about having to pay a prepayment penalty fee if you are able to pay off your debt early. • It could be possible to have part of your loans forgiven if you happen to work in the field of public service. Private Loans • With some of the private student loans out there, you have to start paying the loans even while you are still in school. • The loans will often have variable interest rates, and they can sometimes exceed 18%! These variable rates have the potential to cost you thousands of extra dollars over the course of the loan. • It is not possible to have a subsidized private loan. You are the sole person responsible for paying the interest. • Most of the time, you need to have an established credit record in order to be able to get favorable terms on a loan via a private lender. This means that the rate and the overall cost of the student loan are going to rely on your current credit score. • If you have newly established credit or bad credit, you are going to need a cosigner. In fact, many private loans require a cosigner, even for those who have decent credit. • It might not be possible to deduct the interest amount on your income taxes with the private loans. • Different lenders have different payment options, and that means that you need to check with your specific lender to see just what options you have with your particular loan. • If things are going well and you are able to pay off your loan early, you might be in for a bit of a surprise. You could actually end up owing a prepayment penalty fee. These lenders really want you to accrue interest, and if you are paying early, it dashes their plans! • Most of the private lenders out there aren’t going to have any type of lender forgiveness program. They are in the business to make money off you and not to hand out charity. Hopefully, this served as a good and quick refresher regarding the differences between the federal and private student loans. Now that we’ve established fully that a federal loan is a good choice, another question remains. Which federal loan is going to be the best option for you? Choose the Best Federal Student Loans Of course, different people are going to be in different situations financially, and some choices might stand out as better than others might be. We’ll do a further breakdown of the different types of loans and lay bare their essentials so that you can get a better look at what each one has to offer. You will easily be able to see which of these loans is best as well. In fact, we’ll even put them in order for you and rank them from the best down to the worst. Federal Perkins Loan: The Best Choice The Federal Perkins Loan is the top-notch choice for a few reasons. What is it that makes them the best choice though? • Fixed interest rate at 5% • No payments until you finish school With this type of loan, you can get up to $5,500 per year. While it might not be the largest amount of money via federal loans, the interest rate is going to be the lowest, and that’s a great feature of the loan. If you have a low income, you could qualify for the Perkins Loan. That’s one of the kickers with this type of loan though. You have to make sure that you fall below a certain income bracket if you hope to qualify. Federal Stafford Loan: The Second Best Choice This is one of the most popular options for federal loans, and it really should be in a tie for first place when it comes to the best federal loan. They have quite a few things going for them. • 6.8% fixed rate, sometimes lower • No payments until out of school With this type of loan, the interest rate appears higher, but it is only a small amount higher. In some cases, it is even possible to have lower rates. In addition, students are going to be able to borrow up to $9,500 during their first year. Graduate students, undergraduates, and professional degree students will be able to qualify for the Stafford Loan. You will also have two choices with this type of loan – subsidized and unsubsidized – which we went over earlier in the book. As a reminder, subsidized loans will have the government pay for the interest that accrues on the loans during certain periods. You have to be able to qualify as being in financial need to receive a subsidized loan. With the unsubsidized loans, you will have to pay your own interest that accrues. Federal PLUS Loans for Parents: The Third Choice These types of loans aren’t bad as long as you have a parent who is going to be willing to help you pay for your school costs. • 7.9% or 8.5% fixed rate loan • Up to the total cost of education Parents are actually going to have to be the ones who apply for these loans. While the interest rate is quite a bit higher on these loans, it is possible to borrow a substantial amount more. This could be good or bad. If you have no other means of getting the financial aid that you need, then the PLUS Loan could be the only, and therefore best, option that you have. However, since the interest rates are going to be higher, it means that the overall cost of your loan is going to be much higher. Parents generally like this option better than getting private loans or getting home equity loans. This loan is not going to put their home at risk. It is also a better option than borrowing against retirement money. Private Student Loans: The Last Choice You probably already know why this one is in last place. The private loans should always be a last resort, something that you fall back to if you still need help or if you have no other way to pay for your school. They have pros and cons, as we’ve seen throughout this guide. • Need to have good credit or a cosigner • Interest rate is variable • Possible to receive all money needed for education. One of the things that you should think about when you are considering private loans as your last choice is how they are going to disburse the money. You are generally going to want to make things easier by getting one that the school can certify, and have the lender send the money for tuition right to the school. This is sometimes quite a bit cheaper than choosing a private loan where you are the one who receives the money. If you take out one of these loans, try not to take out a single loan to cover all of your costs. This could end up being too much money to try to pay back, especially if you attempt to defer payments. You will at least want to have the money available to pay down the interest while you are still in school. That way, you can attempt to keep things a bit more under your control. Of course, the best option is to avoid these loans always if you are able. What are You Going to Choose? Just because you now know which of these federal loans is best, it does not mean that you are necessarily going to qualify. With some of the loans, you have to be able to show that you are in a financial hardship and that you truly need the money in order to be able to get your education. This means that for you the best choice might not be the Perkins or the subsidized Stafford Loan. It could be that your best choice is going to be the unsubsidized Stafford Loan. Lower Your Cost of Going to School You should also remember to look at all of the other options out there for paying for college with what is essentially “free money”, such as grants and scholarships. The more you can do to lower your overall cost of tuition the better. It is going to mean that you can offset the amount of money that you might need to borrow. Even if you are only able to get a few thousand or even a few hundred dollars in grant money, every little bit is going to help. Just as you are able to find federal student loans, you can find federal grants, and private grants and scholarships that you can use to help pay for school. Another option is to work full or part time before you start to attend school, and to try to find a part time job – even something such as tutoring – when you are at school. By working here and there and saving money, you can have some cash in your accounts when you graduate that should be able to pay off a decent chunk of your student loan debt. The last thing you need is to go through life saddled with a mountain of debt from your college days.

Chapter 8: What about State Loans for School? Here is yet another option that you might be able to use to help to pay for your schooling. State student loans are very easy to access, and you will find that they are an affordable solution as well. Never overlook the possibility of getting a loan through the state, as they can offer some of the best possibilities of getting the money you need for your education. In this chapter, we’ll look at the things you need to know when it comes to getting these loans. Keep in mind that not all states are going to offer student loans. You have to check with your individual state. The Basics of Getting the Loans Many state governments, along with colleges and universities, are starting to work with student loan providers and agencies. They are working toward getting better quality loans for students within the state, and they are succeeding in many cases. They can present loans that have lower interest rates, loans that have forgiveness programs, and even special loans for those who are training to go into certain vocations. They often have loans that are going to work well for graduates and undergraduates, people in the military and even vocational students. When you start looking at the programs within your state, there is a good chance that you will find something that will be suitable for you. Of course, you do have to make sure that you will be able to qualify for the loan first. Requirements do not tend to be very difficult. You can often qualify for loans in the state where you are going to school. However, you have another option for more financing in some cases. With some programs, you will be able to qualify for state student loans from your home state and then use them in another state. Now, let’s look at the individual states and learn a bit about the different state loan programs that they offer. We won’t go too deep into detail with each state, but will provide you with enough information so that you can seek out more detail on your own. Loans: Alabama In Alabama, prospective students are going to want to visit the Kentucky Higher Education Assistance Authority. Why would students in Alabama want to visit the KHEAA website? Strangely, even though Kentucky created the program, it now offers help with understanding financial aid for students who are in Alabama. Alabama is a state that does not offer state student loans. However, the KHEAA can guide you to other options. Loans: Alaska The Alaska Commission on Postsecondary Education handles both the federal and the state loans. The department is able to help students find a number of different and alternate options when it comes to getting loans. They even have their own brand of private loans, such as the Alaska Supplemental Education Loan that you can find through the Alaska Advantage Program. The loans are credit-based, but they have the potential for some good interest rates. Anyone who is going for a four-year degree or a graduate degree can apply. You will also be able to find a number of other special loan programs in Alaska, such as the Professional Student Exchange Loan Program, or the A.W. Brindle Memorial Education Loan. Loans: Arizona In Arizona, you can contact the Arizona Higher Education Loan Authority (AHELA) for help in learning about loans and how to plan finances for college. They do not have specialized loans through the state, however. Loans: Arkansas In Arkansas, the Arkansas Student Loan Authority is an agency that once dealt with loans, but the Direct Loan Program in 2010 changed that. Still the ASLA is able to provide students with information about financial aid assistance. You will also find the Arkansas EdLoan Program, which is a loan incentive program useful for some types of professions, such as teaching and nursing. They offer low interest loans, and if the recipient stays in the state and goes into that profession, it is possible that they may even waive the loan. Loans: California You are going to be able to find some loan alternatives in California as well. One of the options is the Campus Door Loan. This will offer students that qualify for the loan enough funding for the remainder of their tuition after all of their other federal loans are applied. This can work for graduate and postgraduate students. Loans: Colorado Colorado has some great programs for helping students to pay for their schooling. Rather than sending the financial help right to the state universities, as some other states might do, they pay the money to universities who have students who apply for the financial aid program called the College Opportunity Fund or COF. One of the best things about this program is that the state does not expect reimbursement. It is not so much a loan as it is a gift. It is also quite easy to get the money as long as you qualify. The state has two sets of criteria, one for public schools and one for private schools. For those in public college, you have to: • Be an in state student and receive the tuition rate of an in state student • Apply to and be accepted by the COF, and use the COF account with 145 credit hours to request a payment to your school. • Have some hours remaining on the original 145 hours. Some private schools – Colorado Christian University, the University of Denver, and Regis University – are a part of the program as well. The eligibility requirements for these schools are a bit different. At the private school, you need to: • Qualify as an in state student • Have graduated from high school in Colorado or; • Have completed home schooling and earned a GED • Be eligible for a Pell grant • Must not have used all 145 credit hours Everyone who applies, regardless of the school they are attending, needs to be able to provide proof of lawful presence, showing that they have the right to be in the country. You can use: • Colorado driver’s license or Colorado state ID • Military ID • Military dependent ID • Native American tribal ID Loans: Connecticut Connecticut has some good programs for schooling as well. The state has been running a low cost student loan option for more than 30 years, and it can work as a great supplement for students who still need help paying for school. They can check out the Connecticut Higher Education Supplemental Loan Authority, or CHESLA. Always try to use federal funding first, but make use of CHESLA when you need just a bit more to make sure that you are able to pay for all of your expenses. You will have to: • Be attending school in the state and pursuing a degree or certificate. • Be enrolled at least half time • Have good grades • Have good credit, or have the person who applies with you have good credit • Have at least $20,000 in adjusted gross annual income between you and the person who applies with you • Be a U.S. citizen of an eligible non-citizen Loans: Delaware The Higher Education Commission, HEC, manages the resources and access to financial aid in the state. Students in Delaware may want to contact the HEC for more information about the financial options. They can help to guide students through the federal loan process, as well as illuminate the private and alternative loan options that are available. Loans: Washington, D.C. The Office of Postsecondary Education and Research Assistance, OPERA, helps to disseminate the federal loans, as well as state college aid programs such as the DC College Access Program, DC-CAP. If you have federal loans and they do not cover all of your expenses, you also have the option of choosing this state-funded program to help. Those who are graduates from DC public high schools could be able to receive the DC-CAP Last Dollar Aware, which offers $2000 per year. They offer this to any college or university in the country. The D.C. Tuition Assistance Grant Program can provide up to $10,000 per year for up to 5 years. Loans: Florida In Florida, the Florida Department of Education Office of Student Financial Assistance (OFSA) is the guaranty agency for FFELP. The agency is going to help those who need financial aid look at their federal options, as well as alternative and supplemental student loans. Loans: Georgia The Georgia Student Finance Commission helps students learn more about their different options when it comes to loans on the federal level, as well as alternative loans. An option that students who need some extra funding might want to consider is the GACollege Alternative Loan. This alternative to private loans that might have higher interest rates is a good option, and the GSFC will let you know if you qualify for the loan. They are going to need to do a credit check, so you or the person borrowing with you will need to have good credit. Borrowers will be able to borrow up to $25,000 via this loan. Loans: Hawaii You have a couple of options to find out more about loans in Hawaii. You could check the University of Hawaii System or SMS Hawaii. They can offer assistance with the federal loans that you are going to need for schooling, as well as assistance when it comes to looking for quality private and alternative loans. Loans: Idaho When you need financial aid assistance in Idaho, you are going to want to check with the Idaho Student Loan Finance Association (SLFA). They have a partnership with Sallie Mae, which allows for more options for supplemental loans, but one always has to be careful with those types of loans. Another option that might work for some is a Signature Loan, which uses your signature as collateral. These long-term Idaho First Loans have low interest and could be a good option for those who are eligible. A good credit score is important for those who want to get this loan. Most students are going to need to have someone apply with them, such as a parent. Loans: Illinois The Illinois Student Assistance Corporation and the Illinois Designated Account Purchase Program, IDAPP) work together in order to help students in the state learn about and access the different types of financial funding that they might need to have for school. One of the alternative loan options that you will find in the state is the Capstone Loan Program that is for seniors who are going to colleges and universities in Illinois. They must have completed their request for federal aid first. The loan has no upfront fees, low interest, and flexible repayment terms. Loans: Indiana Those who are in Indiana will find a few different sources that they will be able to use to find out more about federal loans, state programs, and private loans. The Indiana Secondary Market for Education and the State Student Assistance Commission of Indiana has quite a bit of information. They can help students find out more information about loans, and choose the best loans for their needs. Loans: Iowa The Iowa Student Aid Commission, ISAC, helps students in the state find the funding that they need to go to college. They have the tools to help with federal loans, as well as private loans and alternatives through other types of lenders. They provide all of the lender information to the student, who will then be able to choose the loan that is best for his or her needs. Loans: Kansas In Kansas, the Kansas Board of Regents is where you will be able to find out information on a wide range of different types of loans for students. The state does not offer any of their own loans unlike some other states. However, they are able to provide students with all of the information they need on federal loans, institutional loans, and more. Loans: Kentucky The Kentucky Higher Education Assistance Authority is helping students who are in the state find the financing they need. While they aren’t offering loans, the Kentucky Higher Education Student Loan Corporation is able to offer help. You should be able to find some long-term, low interest loans that will be able to help cover the costs that the federal loans and other financial funding you have are unable to cover. Loans: Louisiana The Louisiana Education Loan Authority, LELA, has been around since the 1980s, and they provide students in the state with the best possibility for finding the funds needed for their education. Nurses and teachers will find special loans available in Louisiana, just as they will in many other states. It is sometimes even possible to have waivers so that the students do not have to pay the loans back, or they could have the interest waived. This is because teachers and healthcare professionals are in high demand in the state of Louisiana. Loans: Maine The Maine Educational Loan Authority, MELA, is a part of the state government working independently to help students ensure that they have the financial aid they need to get through college. The state has a program that offers a low interest loan that will cover the amount of college that the federal aid is not able to cover. Students are going to be able to borrow as little as $1000 if that is all they need. Of course, they can also borrow more than $10k if they still need that much to pay for their schooling. As always, it’s a good idea to look for your alternative means of funding first. The Maine Loan program is available to those who have good credit only. It is good for out of state students who are attending approved schools at least half time in Maine. The Maine Medical Loan is for those who are going through medical schooling, and eligible applicants are going to be able to be in one of the following programs to qualify including: • Doctor of Medicine • Doctor of Osteopathic • Doctor of Dental Medicine • Doctor of Dental Surgery • Doctor of Dental Science • Doctor of Veterinary Medicine • Doctor of Chiropractic • Doctor of Optometry • Doctor of Podiatric Medicine Loans: Maryland The state of Maryland does not provide student loans. However, they work with a national guarantor that will be able to help with a number of different loans, both federal and private. Loans: Massachusetts One of the first steps in looking for financial aid in Massachusetts is the Massachusetts Department of Higher Education. They offer quite a bit of information on the loan and aid options available to students who are in the state. The state has a great program for loans as well. They have no interest student loans that you will be able to find through the Office of Student Financial Assistance. The Massachusetts No Interest Student Loan Program is a great program, and students do not have to qualify with a credit check. Borrowers can qualify to receive up to $4,000 each year. Those who borrow with the no interest loan have to be residents of the state, and they need to be in a college or university in the state. Loans: Michigan Like other states, those who are going to school in Michigan will be eligible for most of the federal loan programs that are out there. However, the state does not have any state loan programs as some other states have. Loans: Minnesota Those who are going to school in Minnesota will find quite a bit of help when they are looking for loans. One of the options that they can choose is the SELF Loan. The Minnesota Student Educational Loan Fund has similarities to federal loans, as well as to private loans. Those who are going to borrow with this loan need to have good credit and a low debt to income ratio. This is why many choose to have cosigners with them on the loan, as it can increase their chance of getting it. Students will be able to take out between $500 and the entire amount that they need for college. It’s generally a good idea to look at the federal funding options and then look at these types of supplemental loans though. Loans: Mississippi The Education Services Foundation, started in 1995, strives to ensure that students in the state are able to find the funding they need for higher education. The Foundation can help students to find the funding that they need through federal and private loan programs. Loans: Missouri The state of Missouri does not offer any special state loans for students, but it is possible to find plenty of lenders in the state who will be able to offer this help. Students should look at the Missouri Department of Higher Education to find out all of the information that they need when it comes to various types of loans for college. Loans: Montana The Montana Higher Education Student Assistance Corporation offers quite a bit of information when it comes to the various types of loans and funding available for students. Those in the state can learn about federal funding and alternative funding for college. The state offers the Student Assistance Foundation of Montana, SAFMT, which offers state funds that could be used for loans to students in need. These loans have quite a few benefits, and they could be a great solution for those who need to have a bit of extra help paying for their school expenses. Loans: Nebraska In Nebraska, you will find special loans and incentives for those who are entering certain types of professions. They have great student health loans in the state for those who are looking for schooling in the medical field. Sometimes the federal loans are simply not enough. Students who are going through medical programs in the state can apply for the Nebraska Student Loan Program. They will have to agree to practice for one year in an area the state designates for every year the student receives a loan. Thus, if the student receives this loan for three out of the four years he or she is in school that means that they owe the state three years of service in the area the state chooses. Loans: Nevada Through USA Funds, students who are in Nevada will be able to find out quite a bit of information about the loan options in the state. Today the federal loans come from the Direct Loan Program, and you can find alternative loans as well. If you are going to use an alternative, it makes more sense to look at all of the federal options first, as they have better terms. The state does not have specific programs especially for loaning directly to students from any of the state coffers. Loans: New Jersey Students in New Jersey are going to be able to have access to the information they need about state funding and loans, as well as federal information, right through the New Jersey Higher Education Student Assistance Authority. The NJClass Loan is an option that offers a low fixed rate, and has varying repayment terms, which is something that many students are looking for in their loans. Loans: New Hampshire The New Hampshire Higher Education Assistance Foundation offers information on federal loans, alternative loans, consolidation, and more. The NHHEAF is also able to make available some affordable loans to state students, as well as some students who originate from another state but who are going to school in New Hampshire. They use tax-exempt education bonds for this. When you are looking for some additional funding because the federal loans aren’t enough and do not want to have a private loan, these could be a great alternative for you. Loans: New Mexico New Mexico Student Loans helps to bring more information to students about the different types of financial aid available. They are also able to offer the Link Education Loan, which is similar to a private loan. The money that students are able to receive from the loan helps them to cover the costs that the funds from their federal loans are not able to cover. The Link Education Loan, because it is not a federal loan, will need to have someone with good credit applying to get it. Loans: New York The state government of New York backs the New York State Higher Education Services Corporation, and guarantees federal loans. They are also able to offer information on the various types of loans, federal and private, to students who need to know more about them. Loans: North Carolina The College Foundation of North Carolina is an organization that provides students in the state with the information needed about federal loans, as well as alternative loans and other sources of funding. The state has some great options available. The North Carolina EXTRA Loan from the state is able to help cover the costs that the federal funding is unable to cover. The minimum amount that one can borrow is $200. As with so many alternative types of loans, you are going to have to show that you are creditworthy in order to receive it. Since many students have only a short credit history, it is a good idea to ask a parent or guardian with good credit to apply with you. You can also find some special loans available specifically for certain types of careers, such as healthcare, education, and the fields of math and science. Those who could qualify for a career specific loan might even be able to have full loan waivers in return for service in the state, so they do not have to repay the loan. Loans: North Dakota The state actually owns the Bank of North Dakota, and that can offer residents some nice options when they are looking for loans that will help to supplement the cost of their education. Dakota Education Alternative Loans are options for undergraduate and graduate students who are going to school at least half time in the state. You will also be able to find medical DEAL Loans, which are financial aid for students in the medical field and who need more help. Credit history is important, and having a second borrower on the loan is generally going to be a good idea. The state also has a unique loan called the Driver Education Student Loan. Those who are in a truck-driving program could qualify for the loan. These loans also have a basis in your creditworthiness. Loans: Ohio The state of Ohio sanctions Student Lending Works to help students learn all they need to know about the various types of loans and funding that they need and could use for school. They are able to offer special loans for state borrowers. These loans, based on credit, are typically going to have better rates and better repayment terms than many of the other private or alternative loans that are out there. Loans: Oklahoma The Oklahoma Board of Regents sanctions the OGSLP, or Oklahoma Guaranteed Student Loan Program. Today, they are able to offer information to students regarding loan options from federal lenders as well as private lenders. The state does not have the same state loans that some other states have, but the OGSLP is able to help students find information on lenders. It’s always in the best interest of the student to take the federal funding and loans first. It’s often easier to get, and offsets the cost of education. The private and alternative loans are for supplemental funding to make up the difference. Loans: Oregon In Oregon, the Student Loan Finance Association can help students understand more about their financial aid options for loans. One of the options that you will find in the state is Signature Loans. You may need to have a cosigner for this credit-based loan, but it is a great way to supplement the amount that you will receive from the federal loans. Loans: Pennsylvania The Pennsylvania Higher Education Assistance Agency, PHEAA, is a loan agency in the state that can help students to learn about and find help with federal and private loans. It is even possible to find some special loans through the company for students who are in the state. These customized loans can be great alternatives. As with other states, you are going to want to make sure that you exhaust the possibilities with federal loans and grants before trying to obtain the alternative types of loans. Loans: Rhode Island Students in Rhode Island will find that the Rhode Island Student Loan Authority makes it easy and convenient to learn about all of the different student financial aid options that are available. RISLA is able to offer help and information on more than merely the federal loans. The Rhode Island Family Education Loan is a great option for students who are in the state. Borrowers should have a cosigner with good credit. It’s best if they have good credit as well. Better credit will mean better interest rates. The students are going to be able to borrow up to $35,000 per year for students. The loans also have a fixed interest rate. The Bar Review Loan is for RI residents who are attending eligible in state and out of state law schools, as well as non-RI residents who are at eligible law schools in Rhode Island. The state is also able to offer some good career specific loans, such as for those in the nursing or dental fields. Loans: South Carolina South Carolina Student Loan, SCSL, is able to help students to understand everything that they need to know about funding for college. They even offer the Palmetto Assistance Loan, which is a fixed rate loan for students. To qualify for this, you have to meet certain requirements. • Enrolled at least half time • Good credit • Good grades • U.S. Citizen Loans: South Dakota South Dakota’s EAC, or Educational Assistance Corporation wants students in the state to look at all of their options when it comes to finding help paying for their education. They let students know about the loans that are available through federal programs, and they can help to provide information on alternative loans. They don’t have the same type of state sponsored loans that some of the other states out there might have. Loans: Tennessee The state of Tennessee has the Tennessee Student Assistance Corporation sanctioned by the state to help students to learn more about the different options when it comes to funding for school. The state is able to offer loans as well when they free bond money to be used for educational purposes, and it can be possible for students to access this money. The TSAC will be able to help students get the information they need to make better decisions when it comes to getting supplemental loans to help fund their college. Loans: Texas The Texas Higher Education Coordinating Board, THECB, is a place where parents and students are going to find out everything they need to know about federal funding and other types of college funding in the state. The state can offer the HH Loan Program as well. This program is a special type of private loan called the College Access Loan Program. The loan is credit-based. The Health Education Loan is another HH Loan, which is a nice alternative for those students who are looking for a career in the healthcare field. Loans: Utah In Utah, the Utah Higher Education Assistance Authority is the state agency that helps students and parents to understand and find the loans they need. The agency is able to offer information on federal and private loans. They do not influence the student to choose one lender over another when it comes to the private loans. They merely provide them with the information they need. Loans: Vermont The Vermont Student Assistance Corporation has been around since 1965, and they provide those who are getting ready to attend college with the knowledge and advice that they need to find the funding for their education. They also offer a private loan called Vermont Advantage, and you can apply for this after you’ve applied for your federal funding. The Vermont Advantage loan does have some specific requirements though. • Be a Vermont resident or be enrolled in a Vermont university (Vermont residents can receive the loan if they go to school out of state, and out of state residents attending a school in Vermont can receive the loan as well) • At least half time attendance • U.S. Citizen or eligible non-citizen • Cosigner with good credit • Must be an undergraduate, or an enrolled graduate or someone in professional training • Can’t be in default of any other VSAC loan Loans: Virginia The Educational Credit Management Corporation in Virginia is where students and parents are going to be able to go when they need to learn more about the financing choices that are available to them. The ECMC will be able to provide needed information about the various types of loans, including the federal loans that you will want to use before you consider applying for any type of private funding. Loans: Washington In the state of Washington, the Northwest Education Loan Association, NELA, is a state-sanctioned program that helps students learn more about loans that they need for school. The Student Loan Finance Association is another organization that will be able to help. Washington First Alternative Loans from the SLFA are Signature Student Loans. They are low cost options that are good for college students. They can be a perfect option for students who need to have some type of supplemental funding that goes beyond the amount that the federal loans are going to be able to offer. Undergraduate and graduate students need to be in school at least half time in order to be eligible for these loans. Credit is important with these types of loans, and you are likely going to need to have a cosigner. Loans: West Virginia The West Virginia Higher Education Policy Commission, WVHEPC provides important information to students and parents who are in need of advice about loans and financial aid for college. They provide students in the state with information on federal loans, which should always be the first stop when it comes to funding. They also have information on state sanctioned alternative student loans. The state offers one subsidized loan called the Medical Student Loan. This lets students borrow up to $10,000 per year to help cover the cost of their education. Loans: Wisconsin The Great Lakes Higher Education Corporation and the Wisconsin Higher Educational Aid Board help to clear away the confusion for resident students who are searching for a good option when it comes to funding their schooling. They have information on federal and private loans. The state even has some special loans available for those who are in certain fields. Those loans include: • Nursing Loan • Minority Teacher Loan • Teacher Education Loan • Visual Impairment Teacher Loan Loans: Wyoming The Wyoming Student Loan Corporation is going to offer the information you need about the various types of funding, including federal funding, that you will be able to find for your education. They can provide all of the information that you need when it comes to making the choices regarding your loans. As with other groups, they suggest that you thoroughly exhaust all of the options that you have for federal funding before trying to apply for a loan through a private lending firm. The Tip of the Iceberg You can see that many of the states have some other options that can make for a nice supplement when you are going to be getting school funding. Once you start to look at all of the options in your own state, you may be able to find even more alternatives. Of course, you have to remember that when you are using funding from private lenders, or through state programs that have their own lending options, you need to be as careful as possible. You should: • Only borrow money from private lenders as a last resort • Always make sure that you are borrowing from lenders who have a good reputation • Stay away from loans that have a high interest rate • Be careful of penalties that you might have with an early repayment • Make sure that you understand the final cost of the loan

Chapter 9: How to Prepare to Apply for a Student Loan The thought of actually applying for your student loans can seem a bit intimidating and nerve wracking, even if you have someone such as your parents helping you. For those who might be applying for a student loan on their own, it can be even worse. It doesn’t have to be quite so troubling though, at least not when you have a basic set of guidelines regarding the things that you are going to need to do. Long Before Applying It really does help if you have some type of plan in place. Even though you might not know concretely what type of classes you want to take and what type of degree you want to get quite yet, having at least a semblance of a plan is going to make preparing for the loan – and for college – quite a bit easier. Knowing the school that you want to attend, as well as whether you plan to stay for an associate’s degree or a bachelor’s degree, and whether you are going to be attending full time are all things that you will want to know. Even if you have not been accepted to a school yet, it is still possible to fill out many of the forms that you will need to have for your federal loans. Filling Out the FAFSA for Federal Loans Remember that federal aid is first come first served, and they are not going to wait for you to get your information together, and you want to apply as early as you are able to do so. Some schools have printed FAFSA forms available, but you can always visit the website at www.fafsa.gov in order to download what you need, or you can even file the form on the Internet. Most of the questions that you are going to have to answer on the FAFSA are going to be financially related, so you will want to make sure that you have this info readily available. What is a Federal Student Aid PIN? You are going to need to have a Federal Student Aid PIN, or personal identification number, so that you will be able to sign your FAFSA paperwork electronically. The pin will also let you digitally sign loan contracts, and even to get information on the web. You can get your number as you fill out the FAFSA, or you can get it in advance. The PIN is a 4-digit number that you will use along with your Social Security Number, your name, and your date of birth to act as identification so that you can access your info on federal student aid sites. Parents are going to need to have their own PIN if they are going to sign their children’s FAFSA electronically. If you have more than one child, you will be able to use the same PIN when you sign all of their forms. You can apply for the PIN at any time. If you don’t have one before you fill out the FAFSA, they will prompt you to get one during the process. In order to get the PIN, you can go to www.pin.ed.gov, and provide information such as your: • Name • Date of birth • Social Security Number • Address You will be able to create your own PIN or have the site create one for you. If they create the PIN for you, you can choose to have the PIN immediately displayed on the screen, or they can e-mail you and provide you with a link to where you can get the PIN. They do not send the actual PIN in emails because it is not always secure. Expiration If you do not use the PIN for 18 consecutive months, it is going to expire. To prevent the PIN from expiring, you can do any of the following in the 18-month timeframe. • Change the PIN • Update personal information • Request a duplicate PIN If it does expire, don’t worry. You just have to apply for a new PIN the same way as you received the first. Forgetting the PIN With all of the numbers that people have to remember, it’s no wonder that so many forget their PIN. It is always possible to request a duplicate PIN. While you can have them create the number for you, it really is a much better idea to create it yourself, as you will have a better shot of remembering it. Lost or Stolen If you lose the PIN, or if you believe that someone stole your number, you are going to want to request a new PIN. You also want to disable the old PIN so that no one else is going to be able to use it. What Documents Do You Need? You need to make sure that you have as much information as possible, as well as all of the documents you need when you are filling out the FAFSA form. Here are some of the things that you will need. Make sure you have them handy. • Your Social Security Number • Social Security Number of Your Parents if you are still a dependent • Driver’s license number, if you have a driver’s license • If you are not a U.S. Citizen, you will need to have an Alien Registration Number • Federal tax information or tax returns including IRS W-2 information. If you are married, then you need to have this information for your spouse as well, and for your parents if you are a dependent student • Records of untaxed income you have, such as child support received, interest income, etc. • Information on any cash that you might have, including your savings and checking account balances, investments, real estate, stocks and bonds, and more Having this information on hand is going to be very useful for you when you are filling out the FAFSA. The Schools When you log in and you are completing your FAFSA, you do have to make sure that you are listing at least one college to receive the information. The schools that you list are going to use the information that you provide with the FAFSA to determine just how much aid you can receive, as well as what type of aid you receive. If you are filling out the FAFSA on paper, you will be able to list up to 4 schools. If you are filling out the form on the web, you will be able to list up to 10 schools. It is possible to add more to the FAFSA later. All of the schools that you list will receive the FAFSA information and results, and then you will be able to contact the financial aid offices in the school to determine just how much you are going to be able to receive for your schooling. Who Fills Out the FAFSA Form? Those who are filling out the form for the first time often wonder whether they or their parents are going to be the ones who have to fill out the FAFSA. With this form, the person who is going to be receiving the aid – the student – is going to be the one who files. The student is going to be eligible or ineligible based on his or her information, and not on that of the parents. However, in some cases, it might be necessary to have the parent’s financial information. This all depends on the status of the dependency for the child. No matter who does the actual filing, the student must always sign. If the student is a dependent, he or she must sign along with a parent. How do you know what the dependency status is going to be though? Determining Dependency Status One of the mistakes that many people make when they are filing is believing that they already know the dependency status. They simply believe that it will be the same thing as their tax status. If they claim the child as a dependent for taxes, then they believe child must be a dependent in this case too. That’s not always the case. You will find a special worksheet through the FAFSA site that you will be able to complete in order to determine the correct dependency status. This is an important part of ensuring that you are filling out the paperwork correctly. If you don’t put down the correct dependency status, then it could skew the financial aid reward that the student is going to receive. Look at the guidelines for determining the status and use them. You can’t choose which dependency status to use just so that you can get a higher financial aid award. Doing so could actually cause some huge repercussions. The form is simple to fill out and has many of the same, or similar questions from year to year. Here are some of the questions that you will expect to have to answer so that you can determine whether you are a dependent or not. We’ve gone over some of them before, but it makes sense to go over them once more as you start to fill out your forms for federal aid. These questions come right from the form, so this worksheet is going to help you get ready to fill out the actual form. • Were you born before Jan 1, 1989? This question changes from year to year. For example, on the 2011-2012 FAFSA forms, they asked if you were born before Jan 1, 1988. • Are you married? You will answer yes it you are separated, but you are not divorced. • Are you currently serving on active duty in the military for purposes other than training? • At the beginning of the 2012 – 2013 school year, are you going to be working on a doctorate or master’s degree? These years will change on this question as well, naturally. • Are you a veteran of the U.S. Armed Forces? • Do you have children that are going to receive more than half of their support from your between July 1, 2012 and June 30, 2013. Again, the years are going to change with this question. • Do you have dependents other than your children or spouse who are living with you? Will they receive more than half of their support from you now through June 30, 2013? • At any time since you turned age 13, were both parents deceased and you in foster care, or were you a ward of the court? • Has a court in your state of legal residence stated that you are an emancipated minor or that you are in a legal guardianship? • At any time on or after July 1, 2011, were you determined to be an unaccompanied youth who was homeless, as determined by (a) your high school or district homeless liaison or (b) the director of an emergency shelter or transitional housing program funded by the U.S. Department of Housing and Urban Development? • At any time on or after July 1, 2011, did the director of a runaway or homeless youth basic center or transitional living program determine that you were an unaccompanied youth who was homeless or were self-supporting and at risk of being homeless? While some of these questions might seem a bit out of the normal realm for some, they are quite encompassing. If you are able to answer ‘Yes’ to any of the questions posed above, then it means that you are an independent student, and that you will not have to provide any information about your parents on the FAFSA form. If you answer ‘No’ to all of the questions posed on the form, then it means that you have dependent status at least when it comes to federal aid. You will have to provide information about your parents on the FAFSA. Which Parent’s Info Should You Use on the FAFSA If you are a dependent, you now have to determine which parent’s information you are going to need to include on the form. Here are some tips that will help make it easier for you to determine. • Are both of your parents alive, and are they still together and married? If so, you will answer the questions about them and their finances with both of them in mind. • If they are living together and not married, yet they meet requirements for a common law marriage, you can also answer questions about both of them on the form. If you live in a state that does not have common law marriage, and the state does not recognize them to be married, then you can fill out the information as though they are divorced. • If your parent is single or widowed, answer the question about that parent. If they remarried, you can answer the questions about the parent as well as your stepparent. • If your parents are divorced, or if they have separated, you will want to answer questions using information from the parent with whom you spend the most amount of time during the past 12 months. Again, if they remarried in that time, you can answer questions about that parent along with information about the stepparent. • If you happened to live with each parent for the same amount of time, you can give answers about the parent who provided the most financial support during the last 12 months, or the most recent 12 months when you received support from the parent. Another question is going to be about the education level of your parents. For this purpose, you will want to answer using information from your birth parents or your adoptive parents. They do not consider your stepparent when they are asking this question. Other Things to Consider with the FAFSA Form Even if you do not live with your parents, if you are still a dependent, you have to include information on them and answer the questions about them on the FAFSA paperwork. Of course, family life is not always a picnic, and you might run into a bit of trouble. If you have parents who are unwilling to help you pay for college and will not provide information for you to use on the FAFSA, it could cause some issues. If you do not provide the information needed, they are going to reject the application, and that could mean that your chance of getting student aid vanishes. Your college’s financial aid office may be able to help you to get one of the unsubsidized loans, but that’s not always the case. You should try your best to get the information you need from your parents. If you don’t have any contact with your parents and you are unable to find them, or if you’ve left your home to get out of an abusive situation, you may have more help. Fill out the form and then talk with the financial aid personnel at your college to let them know the situation. They should be able to help you and let you know what you are going to have to do. Special Circumstances Sometimes, the circumstances surrounding your life and your situation are a bit different from the norm. Special circumstances could cause it to be just about impossible for you to get the information needed for the FAFSA. In some situations, such as those shown below, you may be able to get turn in the FAFSA without parental info even though you may technically still be a dependent. • Parents are incarcerated • You are unable to located your parents – and you have not been adopted • You left home because it was an abusive environment • You are older than 21 but not yet 24, and you are unaccompanied and homeless or self-supporting and at risk of being homeless. Filling Out the Form Without Parental Support If you are unable to supply information about your parents because of some of the reasons as indicated above, you will want to check the box that lets them know this. You can then indicate that you have special circumstances, and will then be able to submit your application without entering the data about your parents. You then have to contact the financial aid office at the school you hope to attend and let them know more about the situation, as the FAFSA is not going to be processed normally. Letting the school know can give you a better chance of getting the loan that you need. The financial aid office at the school is likely going to ask for more information so they can determine whether you are an independent and have Expected Family Contribution data calculated without relying on your parent’s information. You are going to want to gather as much evidence as possible to show them that these circumstances are real. Some good examples of evidence that you can provide include court documents, letters from social workers or school counselors, and anything else that would be relevant to your particular situation. The financial aid office will then be able to make a determination about your dependency status. Not Always Difficult We’ve gone over some of the worst case scenarios in the preceding section, but most people are not going to have to worry about such things. Most of the time, getting the federal student aid loan is actually quite simple. Filling out the information is fast and easy, and you really do not have to worry about too many surprises. As long as you fill out the FAFSA and turn it in early, you should have no problems when it comes to getting your loans for school. Here are some tips to make sure that everything goes according to plan. • Make sure you sign with your PIN • Fill out all information • Always have your documents handy, and double-check any information that you are going to be adding to the form • In some cases, the state may require an additional form for state aid – make sure you check with the rules for your state. The FAFSA site can even help you with this. What Does Expected Family Contribution Mean? Expected Family Contribution, or EFC, is a special term that you will often see when you are looking for financial aid for your schooling. This is an estimate of the parents’ or student’s ability to contribute to schooling expenses. If the EFC that you can expect is lower, then the amount that you are going to be able to receive in financial aid is usually going to be higher. They determine the EFC based on the answers that you provide on the FAFSA. Some schools may have their own methods of determining the EFC, but most rely on the FAFSA. The CSS Profile is another one of the common methods, but this method considers one’s home equity as well. FAFSA does not, and it tends to be a better and safer option for families. They usually subtract the EFC from the cost of attendance to the school, and this will determine the student’s needs financially. If the cost of attendance is higher than the EFC, they are going to need to have financial help. The difference between the two will usually determine just how much help they need. What Lowers the EFC? You will find that some things will actually lower the EFC, which means that the financial aid is going to be higher. Here are a few of the things that could affect your EFC. • Brothers and sisters who are also in college • Other family members supported by the head of household • Low income • Fewer assets • Loss of employment • Loss of child support or alimony • Divorce or separation • Death of a spouse or a parent • Medical and dental expenses not covered with insurance The last 5 items on the above list are special circumstance items, and some schools many not actually lower the EFC because of them. You can talk with the school you are going to attend about your situation. Getting a Private Student Loan Even though the private loan should always be a last resort, sometimes you really do have no choice but to use them. Even when you have grants and federal loans paying for a portion of the cost of education, it is often difficult to pay for everything that you need. Sometimes, alternative and private loans are the only choice that you have available to you. If you are going to be using one of these types of loans for your schooling, you have to make sure that you are doing things the right way and that you use your head when you are looking for a lender and applying for a loan. Make Sure It is the Last Resort Have you tried all other methods of getting funding for school before going the route of the private loan? Make sure that you are applying for all of the possible grants and scholarships out there for which you might be eligible. Look for a part time job during the summer that can help to offset the cost of your schooling. Do everything possible to lower the amount of money that you have to borrow from a private lender. These lenders do not have your best interest in mind. They are looking at their bottom line. When you choose a private lender, even those that do have a good reputation, you still have to be careful. The interest rates can be higher than you might be able to handle, and the fees could be astronomical as well. Look in some unexpected places to see if you might be able to come up with a bit more money. Look at any savings bonds that you might have, old coin collections that you might be able to sell, and work-study programs we discussed earlier. Even if you find you are only able to add a few hundred extra dollars this way and pay for a few books, it really can help. Borrowing from a Relative Borrowing money from a relative can be a tricky situation, and it is something that most people are not going to want to do. Money borrowed between relatives has a way of causing family issues unless you are careful. However, it could have some benefits. If you have quite a bit in federal loans, and you do not need to have nearly as much money from a private loan, then you might find that it is advantageous to see if you are able to borrow from an aunt, uncle, or another relative who has the money available. When you do this, you are not going to have to pay any exorbitant fees or interest rates, which is nice. Just make sure that you always pay your relative back. Set up a payment plan for when you get out of school – or even while you are still in school. Make those payments just as you would make payments to a bank. Do not be late. If you don’t pay the loan back, it is going to make for some rather awkward family reunions. Only Borrow What You Need One of the issues that some people, especially young students, have when they are getting the loans is that they borrow more than they really need. They are borrowing for more than merely tuition in some cases. They might be borrowing so that they have money for incidentals and cost of living. Borrowing more than you truly need and spending unwisely is going to be a surefire way to get into some serious financial issues down the line. Make sure that you only borrow what you need to make up the difference with your federal loans. Looking for Lenders A good reputation is important, but it isn’t everything with lenders. Even those lenders who have known names in the industry still may have high interest rates. Remember that the rates you receive are going to be credit based. If you or your cosigner does not have excellent credit, you could be spending thousands of extra dollars just on the interest alone. Interest, Fees, and More Get a list of all of the lenders that you are considering, and then look at your principal, or how much you are borrowing. Now, look to see what kinds of fees the lender is going to deduct when you get the loan. If it is a percentage, as it usually is, you are going to want to look to see what that translates to in actual dollars. Simply multiply the percentage by the principal to find out how much your fees are going to be. Use this as one of the items that you compare amongst the various lenders. You will also want to know the interest rate that the lenders are going to charge for your loan. Then, compare the annual percentage rates. Lower APRs means that you are going to have lower interest and less in fees that you have to pay. Will the rate be fixed, or is it going to vary? If the rate is going to vary, make sure that you know the cap if there even is one. Repayment Terms This area is one that can be a bit tricky. When you have longer repayment periods, it is going to cost more for the loan overall simply because you are going to be paying that interest longer. Even with a lower interest rate, you could spend more than you would if you had a shorter repayment period. Of course, one of the things that some people like about the longer repayment periods is that each of the monthly bills is going to be smaller, so it can seem more manageable. Check to see if you have a grace period as well. With federal loans, you are going to have a grace period where you do not have to start paying the loan immediately upon graduation. With the private loans, this is not always the case. They may offer a grace period, but you have to be certain that you know the exact dates when you have to start paying your loan back. Know the term of the loan as well, so you can see how long you are going to have to pay. Beware the Early Payment Penalties You also have to consider early repayment penalties that you might face if you decide that you want to pay off your loan early. That’s right; with many loans, they will actually penalize you if you find that you have the money and decide to pay off the loan early. The lenders really do want to get as much out of you as they possibly can, and since they aren’t going to be getting all of that interest, they figure that a penalty should do the trick nicely. Will the Payments be Affordable? Another of the issues that many people are facing with their private student loans is that they simply aren’t going to be affordable for people. Getting a job that will allow you to pay off your loans and still have enough money for the cost of living is not always easy to do. Try to keep your loans at an affordable level so that you do not have to worry about not being able to pay them. One of the reasons that the loans are not affordable for many is because of that high interest rate. Your credit is what will affect that rate the most, so it is always a good idea to make sure that you try to improve your credit a bit before you start applying for these loans. Since many students need to have cosigners, it is a good idea to choose someone who has very good credit to help you. Make sure that you trust the person, and make sure that you do not betray his or her trust. Pay your loan back on time so that it does not negatively affect your credit in the future. Plan for Trouble No one likes to think that bad things can happen, but they can. Having a plan in place for these crises can help make them more manageable. Different life and family situations mean that everyone’s emergency plan is going to be different. Even as you are paying off your debt, you should have an emergency fund started just in case something was to happen. Try to set aside a bit extra each month, so you can have an additional cushion on which you can rely. Lenders are not always willing to be lenient, and we already know that discharging the loans through bankruptcy is very difficult. Having some savings that can help to see you through lean times is nice. A Word of Advice on Private Loans Private loans for your college education might not be all doom and gloom. Sometimes, they are just what you need to get through school. Still, you have to realize that these types of loans do have a dark side, and you have to tread carefully when you are choosing them.

Chapter 10: Paying Back Your Student Loans: Types of Repayment Plans Thus far, we’ve really hit upon everything that you need to do in order to get your student loans so that you can go to school. You’ve seen that you really do have quite a few options when it comes to getting the funding that you need. While the current system for getting student loans might not be perfect, and you might find that you still have to deal with private loans in addition to federal loans, this system is the only one that we currently have. This means that you need to learn to play by the rules within the system, and you have to make sure that you take your loan repayment seriously. In this chapter, we are going to look at all of the different options that you have when it comes to repayment plans. In Chapter 12, we will look at all of the penalties and problems that you could face if you decide that you don’t want to or cannot pay back your student loans. How Much Do You Need to Pay? The amount that you have to pay back is going to vary. You can generally have a good idea of what you are going to have to pay when you take into account all of the following. • The type of loan you have • The amount of money you borrowed • The interest rate on the loan • The type of repayment plan you have You Have Options with Federal Repayment Plans When you get your loan, you will start to learn about the different repayment options that you have. It’s a good idea to understand a bit about each of these choices so that you will have a better idea of what you can expect and which if the payment plans is going to be right for you. The Standard Repayment Plan Those who have direct subsidized and unsubsidized loans and subsidized and unsubsidized Stafford Loans, or PLUS Loans, are eligible for the standard repayment plans. With these plans, you are going to have a fixed amount that you have to pay on a monthly basis. The minimum amount is going to be $50 per month, and these payment plans can last for up to 10 years. This is the payment plan that most people are going to use. It’s nice because you will find that you have to pay less interest with this plan than with many of the other options out there. Graduated Repayment Plan All of the same types of loans eligible for the standard repayment plan are going to be eligible for this plan as well. Once again, you can have this type of repayment plan for up to 10 years. Here is where they really differ though. The payments are going to be lower in the beginning, and then they are going to rise. You will see incremental increases in the cost of your payments just about every two years. You will pay more for your loan this way, since the amounts that you pay in the beginning are so low. However, this could be a good option for some who feel that they are going to be making more money down the road and who will be able to afford the plan. Extended Repayment Plan All PLUS Loans, subsidized and unsubsidized Direct Loans, and subsidized and unsubsidized Stafford Loans are eligible for this type of repayment plan. With this type of plan, you will be able to have either fixed or graduated payments. This means that the plan could have a fixed monthly amount just as you will find with the standard repayment plan, or a variable and increasing amount that you see with the graduated repayment plan. One of the differences with this option is that you have the ability to extend the life of the payment plan for up to 25 years. With this type of plan, the monthly payments are going to be lower than the standard 10-year plan, naturally. However, the plan could cost you quite a bit more in the end simply because of the interest. You could be eligible to choose this type of plan if you are a Direct Loan borrowers and you have more than $30,000 in outstanding Direct Loans, or if you are an FFEL borrowers with more than $30,000 in FFEL Program Loans. Income Based Repayment Plan Those who have Direct subsidized or unsubsidized loans, subsidized or unsubsidized Stafford loans, PLUS Loans made to students, or consolidation loans that don’t include loans made to parents could be eligible for this type of repayment plan. The maximum monthly payments that you have to pay are going to be 15% of your discretionary income. The discretionary income is the difference between the adjusted gross income and 150% of the poverty guideline. The poverty level will be for a family of your size as well as your location. If you do not pay your loan back in full after making the equivalent of 25 years of qualifying monthly payments, they will forgive any outstanding balance on your loan. While this might seem generous, it is a bit scary that the cost of schooling could actually cause you to have 25 years of payments and still not be able to pay them completely! In addition, they’ve more than made up the money you borrowed thanks to the interest that they charge. If you have any amount forgiven, you are going to have to make sure that you pay income tax on that amount as well. Pay as You Earn Repayment Plan This option could be a possibility for those who have Direct subsidized or unsubsidized loans, those who have Direct PLUS Loans made to students, or Direct Consolidation Loans that don’t include any PLUS Loans made to parents. The maximum on your monthly payments with this plan will be 10% of your discretionary income. In the above repayment plan, we’ve already seen how they will arrive at this number. With this type or repayment plan, the amount of money that you have to pay will change as your level of income changes. If your income rises, the amount is going to rise along with it. If your income drops, you will see the monthly price of your loan payment drop. This type of repayment plan can be helpful for some. The life of this repayment plan is going to be 20 years. For eligibility, you have to be a new borrower on or after Oct 1, 2007, and you must have received a disbursement of a Direct Loan on or after Oct 1, 2011. You need to have a partial financial hardship to show that you need this type of student loan repayment plan. While your monthly bills might be lower than they would with the standard 10-year plan, you are going to pay more over the life of your loan. As with the income based repayment plan, if you still owe after making more than the equivalent of 20 years of payments, the will forgive the rest of the debt. Still, make sure that you are paying income tax on this amount. Income-Contingent Repayment Plan You could be eligible for this type of repayment plan if you have a Direct subsidized or unsubsidized loan, Direct PLUS Loans made to students, or if you have Direct Consolidation Loans. They calculate the payments each year, and they base the payments on your adjusted gross income, the size of your family, and the amount of Direct Loans that you have. As your income changes, your payments are going to change. Since they adjust this each year, the payments could rise or fall based on several factors, such as having more members added to your family and getting a raise at your place of employment. The income-contingent repayment plan can last for up to 25 years. You will be paying more for the loan with this plan than you would if you were on the standard repayment plan. Again, with this type of loan, if you don’t repay the loan after making the equivalent of 25 years of payments, they will forgive the loan. You still have to pay income tax on the amount they forgive. Income Sensitive Repayment Plan Those who have subsidized and unsubsidized Stafford Loans, FFEL PLUS Loans, or FFEL Consolidation Loans will be eligible for this type of repayment plan. They are going to base your monthly payments on your annual income. The payments with this plan are going to change as your income changes. Again, when your income goes up, the payments go up. This could help you to pay off the loan faster if you have a nice bump in salary. You can utilize this payment plan for up to 10 years, and it isn’t a terrible option for those who need it. However, you will find that it will still be costlier than if you were to be on the standard repayment plan. One of the things that you are going to want to consider with this type of plan is the fact that the formula for determining how much you are going to have to pay each month can vary based on the lender. Understanding How to Pay Back Your Loans and Manage Them Understanding the repayment process for your federal student loans and taking them seriously is going to go a long ways in making sure that you have a good and stable foundation when it comes to finances. Too many people simply neglect to realize just how important this is. These are real loans, and you have to take them just as seriously as you would a loan for a vehicle or a home. Once you have the loan, you can’t simply cancel it and walk away from it without facing some serious problems, which we will discuss in a later chapter. Payments to the Loan Service Provider You will send your payments to your loan servicer. Keep in mind that different ones may have different payment processes, so you have to make sure that you know what they require as to when and how you will pay. Even if you do not receive a bill for some reason, you have to make sure that you make your payments. The government has several different loan servicers, so check to see which one is going to be handling your loan and learn about their processes as well as how you will be able to contact them. With Direct Loans and FFEL Loans owned by the U.S. Department of Education, you will make your payments to your loan servicer as described above. If you have FFEL Loans not owned by the U.S. Department of Education, you make the payments to the lender who made the initial loan. In this case, the lender is going to give you the information you need about when, how, and where to pay. Those who have Federal Perkins Loans will usually pay the loan servicer, and the loan servicers in these cases are usually the school. Sometimes, however, they are a separate entity that will take care of the billing and any other problems or issue that you might have regarding the loan. You will be able to contact your school about making the payments on your Perkins Loans. How Do They Accept Payments? You will find that you are usually going to have several options when it comes to how you will be able to make your payments. You can receive your loan statements electronically, and you can make your payments electronically as well. This is a good solution for many who want to have a nice and simple way to pay. They can even set up recurring payments so that they do not have to worry about missing a payment. Just make sure that you have enough money in an account to pay for the loan each month. Of course, you can still go the traditional route and choose to send the payment through the mail. You have to make sure that you mail your payments before the due date so that they are not late, and mail them directly to your loan servicer. Paying Extra You could also pay extra on your loan each month. Paying just a little bit extra on the principal is going to lower what you owe and it will lower the amount of interest that is building up. Consider Consolidation, Deferment and Forbearance You might find that it’s more advantageous to you if you were to consolidate your loan into a single payment each month. This has pros and cons, which we discussed earlier in the book. Deferment and forbearance are some methods by which you can delay the payment or lower the loan payment when you are back in school, in the military, or experiencing a bout of financial hardship. In the following chapter, we will go into detail about these options as well as how they might apply to you. Forgiveness, Cancellation, and Discharge In some instances, it is possible to have the lender forgive your debts. If you went to school for a certain field of study and promised service after graduation, it could be possible to remove the obligation to repay the student loan. Another way in which some loans are discharged is if the borrower has a permanent disability that is going to prevent them from being able to make a living and pay back their debt. Do Not Default Times might be hard, but you never want to default on your loans. If you are delinquent on the loans, they could go into default, which will cause many problems for you financially. If you believe that you are at risk of becoming late on some payments, your best option is to contact the lender and talk with them about it. See what options you might have available. What About Personal Loan Repayment Plans? With personal loans, things are going to be a bit different. The interest rate that you have on the loan could be quite high, the fees could be high, and you might not have the same types of payment plan options outlined above. They are for federal loans, and you are working with a private lender in this case. You will also not be able to consolidate your private loans along with your federal loans, so you have to make sure that you know the deal that you have with each of the lenders you are using. Different lenders will have different payment options and plans, and you want to find something that is going to be affordable for you. In addition, you have to make sure that you honor the agreement and know when to start making your payment. If you have questions about the private loans that you have, you have to make sure that you speak with representatives from that lender directly.

Chapter 11: Consider Delaying Your Payments You know that paying your student loan payments on time each month is very important if you hope to be able to live a life free from financial burden and trouble one day. Of course, financial woes beset everyone sometimes, and having large student loan debt looming over you is just going to add to the stress. A layoff at work means that you are going to have some serious financial issues in the coming months. It means that you might start missing mortgage or car payments, and it means that you will miss credit card bills and other bills. You have to start changing the way that you live, and even that is not enough to stem the tide of money bleeding from your bank account. The thought of paying the student loans is enough to add even more fear, and soon it might feel as though you have no way to climb out of the hole you are in. It Doesn’t Have to End in Disaster Just because times are bad and you are having trouble with debt, it doesn’t mean that it has to continue and get worse. You can find that student loan deferment will help make sure that you are able to cover your cost of living without having to worry about paying your student loan debt right now. Those who are struggling to repay their student loans do have some options. If you are having trouble making your student loan payments, and you are nearing 90 days of delinquency on those payments, you are going to be getting close to defaulting on the loan, which is the last thing you want to happen. The first thing that you have to do is get into contact the lender so that you can speak with them about the issue. Doing this before it becomes too late can help to show them that you have the intention to pay but circumstances are making it difficult. You will be able to explain the financial hardship that you are suffering, and it might be able to qualify you to have a loan deferment or student loan forbearance. Other types of relief will be available as well. You just need to make sure that you speak with your lender as soon as you see signs of trouble so that you can start the process before you have any late fees on your loan, and long before you default on it. What is Student Loan Deferment? When you have a deferment, it will put a hold on the loan repayment. This means that you will not have to repay your loan during that time. Some of the things that can qualify you for this deferment include: • Economic hardship • Unemployment • Reenrollment in school (this happens with graduate students often) Those who have a subsidized Stafford Loan or a Federal Perkins Loan will not have to worry about accruing more interest during this time either. The government is actually going to pay for the interest on the loan during the deferment. Those who have an unsubsidized Stafford Loan are going to be responsible for paying the interest during the deferment. If you aren’t able to pay the interest, it is going to accrue and will become a part of the loan balance. This is going to make the amount that you will have to pay after the deferment ends much higher. If you are able, it is always a good idea to pay the interest when you have one of these unsubsidized loans in deferment. You will have to file a request for deferment with the loan provider, but make sure that you keep up with your payments until they let you know that you’ve received the determent. It would be horrible to wait to pay and go into default right before they allow for deferment! What is an Economic Hardship Student Loan Deferment? It could be possible for borrowers who have Stafford or Perkins Loans to have a loan deferment for up to three years if they are suffering from economic hardship. They have to be able to prove that they are suffering hardship based on the actual federal regulations. Here are some of the guidelines. • The student loan payments are equal to more than 20% of your gross monthly income • You are receiving payment under a state or federal assistance program, such as food stamps, or SSI If you have any of these issues, or other issues that you believe could cause you to fall under the category of “economic hardship”, then you need to make sure that you contact your lenders soon. Military Service Deferment If you are active duty military, you have a Stafford or Perkins Loan, and you are called to service during a war or other military operation, or for a national emergency, then you could defer payments. The rules that will qualify personnel for this type of deferment can vary, so it is always a good idea to speak with your lender about the possibility of deferment. The rules here can be quite complex, and it is better to speak with your lender to make sure that you have the most current information. Student Loan Forbearance What about those who do not qualify for a deferment? What is going to happen to all of them? You might still find that you are eligible for another program. Consider student loan forbearance. With this option, you are still going to be able to delay your repayment of the student loan. However, it is a bit different from deferment. With forbearance, you still have to be the one who pays your interest on the loan, even if you have a subsidized student loan. The lenders are going to grant forbearance for 12-month chunks for up to 3 years. Again, you are going to apply for forbearance through your lender, and you have to keep making those payments until they let you know that you are now in forbearance and you do not have to pay. Benefits of Deferring and Forbearance While no one wants to be in a situation where they have to think about deferring loans and making hard choices about what they can pay each month, the truth is that financial hardship can strike anyone. Even if you have a great job right now, you might find that you have some issues later with unemployment, the rising costs of your other bills, and more. Health issues could cause you to become late on your payments too. The biggest benefit that you will find when it comes to deferment and forbearance is actually the peace of mind that you have. Knowing that you are going to be able to pay your other bills and maintain some semblance of a normal life while you get back on your feet and start earning more is nice. It can help to reduce some of the stress and fear that you and your family might be under right now. If the bills are piling up, you can’t simply default on your student loans. It would cause far too many issues, as you will see in the next chapter. Contact your lenders right away to get things started and to find the help that you are going to need to make it through this difficult time. What about Forgiveness, Cancellation, and Discharge? This would mean that you no longer have to repay your loans at all, and that you are free and clear of the obligation. Of course, it’s not as easy as requesting that they forgive the loan. It is only going to be possible to have forgiveness or cancellation under certain sets of circumstances. When can Federal Loans be Forgiven, Canceled, or Discharged? You have to repay your loans even if you do not complete your education or if you can’t find a job in the field that you studied while you were in school. If you are unhappy with the education that you received, you are still going to be the one responsible for paying the loan. Still, it is possible to find some forms of loan forgiveness that you are going to be able to use under certain, strict sets of circumstances. Let’s look at them so you can determine if you may be eligible for loan forgiveness. Total and Permanent Disability Discharge People could be eligible for this type of discharge on their federal loans if they find that they are not able to work or engage in an activity that would help them to make money. This would include a medically discovered mental or physical disability. However, the rules for discharge go a bit further. With this type of discharge, the impairment would: • Have to have lasted for at least 60 months • Is expected to last for a continuous period of at least 60 more months • Can be expected to result in death This type of discharge needs to have certification from a physician in order to have the possibility of discharge. Death Discharge The death discharge is when the borrower dies. When this happens, the federal student loans will be discharged. Those who are parent PLUS borrowers can have the loan discharged if they die, or if the student who was using the loan passes away. Someone in the family is going to have to provide a certified copy of the death certificate to the school, if they had a Perkins Loan, or to the loan servicer if they had a Direct Loan or a FFEL. Discharge in Bankruptcy We’ve touched on this earlier. It is not easy to have a discharge of student loans when you are going through a bankruptcy. While it might not be easy to do, it is not impossible. You have to be able to prove that paying back the loans is going to cause an undue hardship. The court is going to determine whether you are facing an actual undue hardship if you were to have to repay the school loan. They want to determine: • If you had to pay the loans, you would not be able to maintain a minimal standard of living • If there is evident that the hardship is going to continue for a large chunk of your repayment time • If you made good faith efforts to repay the loan before you filed for bankruptcy – for most courts, this is going to mean that you were paying for a minimum of five years on the loans. If you can’t satisfy all three of the above criteria, then the court is not likely to discharge your student loans in your bankruptcy. Closed School Another one of the possibilities for discharging the Direct Loan and FFEL Loan could be if the school was to close while you were still enrolled. In this case, you would be able to have a discharge of the loan because you weren’t able to go to the school through no fault of your own. In addition, if the school were to close within 90 days after you withdraw, you could also receive a discharge. However, you will not be eligible if you were to withdraw more than 90 days after school closure. If you were completing a program at another comparable school after the discharge of your loan, you may have to pay back the amount discharged. If you completed all of the coursework but you have not received a diploma or a certificate, you are not eligible for a discharge either. False Certification of Student Eligibility or Unauthorized Payment You could have a discharge of your loans in some other circumstances as well. False certification of student eligibility for training programs in order to get the loan money, even though the student was not able to meet the eligibility requirements is an issue that some unlucky students have had. If the school actually signed your name on the promissory note or application without your authority, of they endorsed a check for your loan without authority, it could be possible to apply for and receive a discharge. Loans falsely certified because of identity theft are dischargeable as well. In addition, if the school certified your eligibility, but you weren’t able to find employment in the occupation in which you were trained because of a physical or mental condition, or because of age or a criminal record, discharge could be possible. Unpaid Refund Discharge Refund policies can vary based on the school, so you will want to make sure that you speak with those in charge about your Direct Loan of FFEL Program Loan. This kind of discharge is possible if you were to withdraw from school and the school did not provide a refund to the lender. The only amount that you can discharge with this type of loan is going to be the amount of the unpaid refund. Public Service Loan Forgiveness Those who are employed in certain types of public service jobs and who have made 120 payments on their Direct Loans may be able to have the remaining balances on their loans forgiven. This can be confusing though, as only payments made under certain payment programs are able to count towards the required 120 payments. In addition, you can’t be in default on any of the student loans that you want to have forgiven. Perkins Loan Cancellation and Discharge Those who are working in certain types of public service will find that they are sometimes eligible for cancellations of their Perkins Loans as well. With these loans, for every full year of service, a percentage of the loan may be cancelled. The total amount canceled is going to vary based on the type of public service, when the loan was taken, and much more. This is something that you are going to need to discuss with the lender. In general, those who are eligible for this type of cancellation include: • Teachers • Members of the U.S. Military serving in dangerous areas • Peace Corps Volunteers • Nurses • Medical technicians • Professional Provider of Early Intervention Services • Head State Workers • Child or Family Services Worker Teacher Loan Forgiveness Teachers could find loan forgiveness with more than just the Perkins Loan though. Those who are new borrowers and have been working as a teacher fulltime in a low income elementary or secondary school, or an educational service agency for at least five consecutive years could have up to $17,500 of their subsidized or unsubsidized loans forgiven. You can’t include PLUS Loans, however.

Chapter 12: Penalties for Not Paying Your Student Loans We’ve seen that making payments on student loans is no picnic, and that sometimes unfortunate turns in life can make someone late on payments. Those who are chronically late with their student loan payments are at a high risk of defaulting, and when that happens, it could mean terrible trouble for their finances. The trouble even has the potential to follow them for many years down the road, and possibly even for the rest of their lives. You will find that the lenders, whether they are private lenders or the government, are not going to take defaulting on loans lightly. Even though the government and banks seem to have their fair share of issues when it comes to repayment, they do not look kindly of people when they are the ones who are supposed to be receiving money! In this chapter, we’ll dive into some of the different things that could happen if you were to default on your loan. First, however, we’ll want to get a bit of a better understanding of what defaulting really means. What Does Defaulting Mean? One of the fears that many people have today who are getting their student loans is that they are not going to be able to pay off their debt fully ever. They realize that the interest rates can make paying difficult, and a rough economy can make finding the money to pay those bills almost impossible. In some cases, people are actually choosing not to pay their bills for these reasons, but this will really only compound the trouble. As mentioned earlier, it’s always good to keep the lines of communication open with the lenders so that they know what is happening with the payments. To default means that you failed to repay the loan according to the agreement that you made in the promissory note. This means that you made a promise to pay, and you did not do it. In most cases, you are going to be in default if you are more than 90 consecutive days late on your payments. If you believe that you are getting close to defaulting, or if you are just now starting to have trouble when it comes to paying your bills each month, contact your lenders right away. If you are able to contact them and show them that you are trying to take some measure of proactive action against defaulting, they may be more willing to work with you and come up with a solution, such as possible deferment of the loan. If you neglect to get in touch with them though, you will find that you have a host of different problems that are going to be coming for you. Here are just 10 of the big problems that you might have to deal with if you don’t pay your student loans. Possibility of Getting Sued Whether you are dealing with private lenders or the government, you could find yourself in the midst of a lawsuit if you do not pay your loans on time each month and instead default on them. They are going to do everything that they can in order to regain the money they lent you for your education. One of the things that you have to realize about student loans is that there is no limitation as to when the lender will be able to sue you. Even if several years pass and you believe they’ve forgotten the debt that you owe then you could be in for a bit of a surprise instead. They have the ability to sue indefinitely. Loss of Federal Benefits Perhaps you have other federal benefits that are coming to you for some reason. These could be things such as your retirement benefits through social security, or they could be disability benefits. If you owe the federal government for your student loans, they can take that money and use it as a way to pay off the money that you owe. If you rely on those benefits, as so many people do, then you could be in for a very unwelcome shock. Demolish Your Credit Rating Of course, whenever you do not pay back your debt, your credit score is going to take quite a hit. Not paying your student loans back and defaulting on them has the potential to trash your credit rating and drop it to an abysmal score. If this were to happen, you are certainly going to start feeling the repercussions that come along with it. You are going to have difficulty doing things that you once took for granted, such as getting a car loan. You are not going to be able to get a loan for a home either. Even getting a credit card is going to be a huge problem for those who default. These problems are going to follow you around too, and it can take a number of years before they are able to fix themselves. It could topple your credit rating for seven years, so if you had plans to buy a home during that time, you are definitely going to want to think again. Tax Refund Offsets Until you pay off your student loans, the IRS has the ability to take any of the tax refunds that the government owes to you when you are in default on your student loans. If you rely on a nice return each year for things such as a vacation, a nice new electronic gadget, or even just as savings, you can say goodbye to it until you pay off all of those loans. Tax offsetting is one of the methods that the U.S. Department of Education uses quite often, actually. They are able to collect quite a bit of owed money each year by doing this. While it might be an inconvenience, it does have some merit even for those who are in default though. It will help you get out from under debt quite a bit faster this way. Even if you aren’t yet in default on your loans, and you receive a decent amount on your tax return yearly, it might be a good idea to take all or at least a substantial portion of that money and pay down your student loan debt. Taking some off the principle is going to help to lower the overall payment as you are going to be paying interest on much less. Garnishment of Wages The government even has the ability to take a portion of your wages if you owe money on your federal school loans. They are able to take up to 15% of your disposable income in order to help pay down your loan debt. While this might not sound like much, it can be a huge inconvenience. It means that you are not going to be able to have as much money to do things with your family, or to put in the bank for your savings. They are able to continue garnishing your wages until you are able to pay back the full amount that you owe. This is certainly not an ideal way to pay back your loans. Before you default, try to make as many good faith payments as possible. It is for your good and the good of your paycheck! Collection Agencies No one likes the thought of dealing with collection agencies. Even with supposed rules in place when it comes to these types of agencies, they have the potential to annoy you greatly. Sometimes, they can add so much to the stress level that people are already feeling about their bills that it can start to cause health problems. They are going to call relentlessly – dozens of times a day, and they can often leave messages that are harassing and may sound vaguely – or overtly – threatening – even though they are not supposed to. They will call your cell phone, your home phone, your work phone, members of your family, and anyone and anywhere else that they believe they could possibly get a hold of you. Even those who have had severe or traumatic experiences that have caused them to lose their financial stability have little sympathy from these agencies. Talking rationally seems almost impossible. Collection agencies are the worst of the worst, and you do not want to have to deal with them for even a minute. Trouble Renting People who are renting an apartment are going to want to stay in their current apartment as long as possible. Why would this matter when you are late on your student loan payments? If you default on your loans, you have to remember that this is going to cause a hit on your credit score. A damaged credit score is going to make it just about impossible to rent an apartment. Most of the time, realtors, rental agencies, and apartment complexes are going to run a credit check on you. Even if you are renting a home or condominium from a private owner, he or she will generally do some type of credit check to see if it is worthwhile to rent to you. Even if you have good references, and even if you have cash in hand for a deposit and first and last month’s rent, you could find that you are in quite a bit of trouble. Many times, simply finding a place to live is going to be difficult. Hopefully, you enjoy the apartment where you are living now because, until you are able to repair your credit, that apartment might just be the only place that you are going to be able to stay. Trouble Getting Loans of Any Type That credit trouble if going to ensure that you can’t get a loan either. Whether it is a small loan or a large loan, you aren’t going to be able to have the freedom that you once did financially. Even if you were to pay off the rest of your debt tomorrow, you will have trouble since you already went into default. Your trustworthiness as a borrower is shot, and finding anyone who will lend you money is going to be hard. This can take quite a toll on your personal and private life, as well as your social life. No More Federal Financial Aid What if you wanted to go back to school? Perhaps you dropped out the first time and weren’t able to finish. Maybe something else got in your way. If you didn’t pay back your student loan debt then, there is no way that you are going to qualify for more financial aid now. The only way that you are going to be able to go back to school is if you pay for all of the costs out of pocket. This is something that’s simply not feasible for most people. If it were, you never would have borrowed money for your schooling in the first place most likely. Extra Fees In addition to paying what you already owe including interest, you are likely going to have to pay fees to the collection agencies that are harassing you for the money you borrowed. Not only that but also the collection agencies are often going to charge the lender a commission for getting the money owed. Guess who is going to pay that commission. As you can see, the possible penalties and trouble that you can find when you do not pay back your student loans are quite severe. Always do everything in your power that you can in order to stay on top of your loans. It is in the best interest of your future.

Chapter 13: Counseling and Help for Understanding and Dealing with Student Loans Going to college is a huge step, and is one that many young people take each year. They head off to their school with hopes, dreams, and ambitions and many of them never fully understand just how much fulfilling those dreams can cost. Too often, the loan process is something that the financial aid office and even parents gloss over. Everyone is excited to get to school and the last thing that they want to do is think about loans that they aren’t going to have to start paying for several years. It seems so far away. However, those young people who are going to school usually have very little knowledge when it comes to understanding loans, debt, and credit. Even many parents do not fully understand the dangers associated with these types of loans. High school certainly doesn’t properly prepare students so it is no wonder that they really have little knowledge about the implications of these loans and the issues they could face in life when they aren’t able to pay them. Counseling Now Helps Life Later If you are a parent of a student who is going to go into college soon, or if you are a student who wants to take a proactive approach to understanding these loans, getting counseling now is a great idea. The Department of Education requires that students go through initial counseling whenever they take out a federal loan for the first time. This counseling can be helpful, but it might not be enough. Let’s see what this initial counseling course is supposed to cover. The Course The college where the student is going to attend will teach the course, but they might not include all of the information needed. The class should cover information on the contract as well as how it binds them legally to pay for the loan. Students should also learn about the things that we went over in the last chapter regarding the consequences of not paying back their loans. While this is well and good, it does little to help students actually learn how to avoid getting into this type of trouble. Students might be in the class, but they might not be paying much attention. They have too many other things on their mind, and the courses really don’t do anything more than the governmental minimum. If the number of people who are in danger of defaulting on their loans right now is any indication, then the courses are not doing their job. In addition, some of the initial counseling courses are online. The student simply heads to a website and takes a course. Better Counseling Needed The courses at the college might be a decent start, but they really do need to do more in order to prepare students for the real world of paying back those loans after graduation. The information should go into detail a bit deeper than what it does right now. It should be to the point and it should be easy to understand. One of the things that you may want to do is take a separate counseling course on your own to help you understand more about debt as well as how you can get out of it. Even if you do not have any debt now and it is years before you have to start paying fully on your loans, knowing how debt can affect you and how you can damage your life if you do not. While the material needs to be honest, and a bit blunt, it should also provide students with hope. One doesn’t want a student to come out of the counseling scared that they are going to be an indentured servant the rest of his or her life. Ideas for Debt Counseling and Preparation Before one starts school, it’s a good idea for the student, as well as his or her parents or guardians, to take a credit and debt-counseling course together. This course should be a supplement to the course the school offers, just so that you will be able to get a better perspective on it. Having student and parents aware of the dangers as well as how to avoid them is going to make paying for those debts quite a bit easier down the road. They could set up a savings plan where they all start to contribute a small amount of money to an account each month during the four years of school. Saving just $100 each month for four years would net $4800. If both the parents and the students did this, they could save close to $10,000 in that time. This means that they could then use that money to pay down the principal on the loan or loans. They would be paying less interest because the principal is smaller, and that can save quite a bit of money over the life of the loan. It also means that the monthly payments are going to be smaller and more manageable. Check the Debt Annually You should make sure that you check your debt at least once a year to see just what you owe. Make sure that you have a place where you are able to keep all of your loan documents safe. Make sure that lenders know about any changes in your life – even small ones. If you move, change your phone number of your email address, or make any other changes that could make it more difficult for the lender to reach you, you have to let them know about it. If You See Trouble Students who see trouble with their loans might not react the way that they should. They might do as many have done before them and simply bury their head in the sand, hoping the problem will go away. These debts are going to follow you for life though, and they are not going to be remedied simply because you bury them. You have to face your problems and face your debt. The first step in doing that is in understanding it. Get the counseling you need now so that you can reduce the possibility of trouble later.

Chapter 14: Tips to Help Students Pay Expenses in College How are you possibly going to be able to pay for all of your expenses in college and be able to save money for your loans? Everything costs money when you are out on your own, and it can seem as though you have to live like a pauper. With some of the following tips though, you can live well in college and perhaps even start saving some money to pay off your student loan debt. Learning to manage your money while you are in school and you have less of it is a lesson that can serve you well the rest of your life. If you simply spend on all of the things that you want to have, then you are going to find trouble. If you learn to be smart with your money though, you may find that it’s easier to deal with your loan debt after school. Let’s look at some smart money tips that you can use while you are in school. Beware Credit Cards When you go to school, just about everyone is going to try to give you a credit card. They see you as fresh credit and a way to make money, and if you aren’t careful, you could wind up with credit card debt that rivals your school loans. Try to keep away from the credit cards. While they could be a good way to start building your credit, you will find that they are going to cause some issues if you are not careful. It is far too easy to overspend on your card. This means that you could be in for high interest and another pile of debt. Avoid credit cards unless necessary. You could get a card for emergencies, but you will want to be exceedingly careful about using it. Get a Job Your studies are demanding and they should come first. However, most students are going to have some downtime where they are not studying. This means that getting a job is a good idea. Having a job while in school has the potential to teach you to save money and to use that money rather than putting everything on credit. When you want something, save for it and then use cash rather than using credit. It’s a smarter way to get what you need without going deeper into debt for it. Having a job also means that you could put a bit of money aside for your student loans while you are in school, as mentioned in the last chapter. Pay Bills You probably have a few bills that you have to pay each month as a college student. This could be your phone bill, a credit care bill, or anything else. Make sure that you always pay those bills on time. This is another reason to get a job in school and to start saving. Learn to Budget If you learn to budget and keep track if your expenditures now, you will find it much easier to continue with this when you are out of school. Ingraining the importance of this in your head now will serve you well the rest of your life. Track your spending and save your receipts, make a budget and make sure that you stick to it each month. Buying Used Textbooks are a huge expense for college students. With luck, the coming years will start to see these prices drop as more schools start moving toward digital textbooks. Instead of buying brand new books, buy used books. When the term is over, sell those books. When you do this, you are saving money on the initial cost of the book, and you are even able to recoup some of that money when you sell to the next batch of students that are coming through. Live Smartly College students love the concept of Spring Break and they are going to hate hearing this bit of advice. Skip Spring Break. Unless you have tons of disposable income, you do not need to go on a long trip and spend hundreds, or thousands of dollars. Stay close to the campus or to your home instead. Do this for at least three out of your four years, and it might surprise you just how much you will be able to save. Living smartly applies to more than merely Spring Break. You should try to avoid splurging on things that you do not need. Try to live without a car, as they can be expensive to maintain. You may need it to get to and from work but even then, you might be able to find alternate transportation. Look at the different on campus activities that you might be able to find. They can be a great alternative to heading out each night and spending money on the town. You could find sports, an onsite fitness center, lectures, music, movies, and much more. Most will be cheap or even free. Do It Right Make sure that you go to class. You are paying for your education, and the last thing you want to do is fail a class because you couldn’t haul yourself out of bed in the morning. College students are on their own and no one is going to tell them when to sleep and when to wake up. They do not have the luxury of having parents take care of everything either, so it is more important than ever that they learn to live as smartly as possible if they hope to succeed.

Chapter 15: Glossary of Handy Terms to Help Understand Student Loans Just as the title of the chapter promises, here’s a concise and handy glossary that you can use to refresh your memory about some of the different terms you need to know when you are dealing with all types of student loans. Some you will know already, some you will have learned in this book. All of them are important. Accreditation Schools that have accreditation meet at least the minimum standards from an accrediting body that the Department of Education recognizes. In order for a school to be able to participate in the federal student aid programs, they need to have accreditation. Administrative Wage Garnishment This is a tool that the federal government is able to use in order to withhold up to 15% of your disposable income in order to pay off any federal student loans that you have that are currently in default. Associate’s Degree This is a two-year degree. You will most often find these at career colleges or even in community colleges in your area. Award Letter The award letter comes from a school and it provides you with the type and the amount of money that you are able to receive from federal financial aid if you choose to go to that school for your studies. Bachelor’s Degree This is a four-year degree awarded for courses of study at colleges and universities around the country. Cost of Attendance (COA) The COA is the total amount that it is going to cost a student to go to school. This amount includes the tuition, room and board, book allowances, and other costs that the student will have while in school. Knowing the COA is important when determining just how much money the student is going to need for school. Default When you do not repay your loan according to the terms you signed off on in the promissory not, you are going to be in default. Deferment To defer a loan is to postpone your payment of the loan. You will still have to pay the loan; you simply have a bit more time to do it. Some loans are going to keep accruing interest. Dependency Status You are going to be either dependent or independent, which can affect the type of loan that you receive. Direct Consolidation Loan With this federal consolidation loan, you are able to take several of your existing federal loans and roll them into one so you have just a single payment to make each month. Direct Loan With this type of federal student loan, you are going to be borrowing directly from the Department of Education. Direct PLUS Loan This loan from the Department of Education is made to parents of dependent undergraduate students as well as graduate or professional students. Disbursement This is the payment of the loan funds from the school to the borrower. Most of the time, the money comes in at least two, and possibly more, disbursements. Eligible Noncitizen An eligible noncitizen could be a refugee, a parole in the country for at least a year, a conditional entrant, a victim of human trafficking, or a Haitian or a Cuban entrant. Expected Family Contribution (EFC) The EFC is the amount of aid a student is going to be able to expect from family. The FAFSA worksheet will help to determine this number. FAFSA Free Application for Federal Student Aid Federal Perkins Loan Here is a loan made to graduate and undergraduate students who have a desperate need for financial aid to make it through school. Federal Student Aid PIN The electronic PIN is an identifier that is going to give you access to information on your loans. You will need it when you fill out the FAFSA. Federal Student Loan This type of loan comes from the federal government. As with most loans, it does come with interest. Financial Aid Office This office at your school is where you will be able to learn about all of the different possibilities with financial aid. Forbearance During this period, you can have monthly loan payments suspended. This option, for which some people with financial hardships may be able to qualify, can help relieve some debt pressure for a while. Loan Forgiveness Loan forgiveness is a cancellation of some or all of your debt. You will not be responsible for paying this amount. Loan Servicer The loan servicer is the company that collects the loan. PLUS Loan Loan that parents will take out for their undergraduate students. Graduate students may also take out a PLUS Loan on their own behalf. Principal The principal is the full amount of money that you owe to the lender, including the interest. Private Loan Private loans come from non-federal lenders. This could be a credit union or a bank. Promissory Note When you take out a loan, you will have to sign a promissory note, which is a binding legal document that shows that you agree to pay the loan back according to certain terms. Subsidized Loan The government will pay the interest on a subsidized loan while you are still in school, as well as during the grace period and in case of deferment. Tax Offset The government is able to take income tax refunds with this option. Any income tax refund money that you receive goes to the government if you are in default on your student loans. Unsubsidized Student Loan With this type of loan, borrowers are the ones who are responsible for paying their interest no matter the status of the loan. The interest is going to accrue from the date of the disbursement until the borrower finally pays off the loan. Work-Study The work-study program offers part time employment for students enrolled in college. This helps to pay the other educational expenses that a student might have while in school.

Conclusion: Taking out loans carries with it quite a bit of risk, as we’ve seen throughout the course of this guide. While the federal loans have better terms that what most people are going to find with private loans, they are still not ideal. The best way to pay for school would simply be with cash. Of course, this is not a reality for most people. Most of the time, loans are going to be necessary in order to make it through school. Hopefully, the information in this book will serve to illuminate the various types of loans and make people want to ask more questions when they head into the financial aid office. The more information you have the better off you are going to be. Do not let your student debt control you!

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whimsicallyenchantedrose · 8 years ago

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Fluffy Fridays—Chapter 83: New York Christmas Serenade (pt. 4 of 4)

Pairing: Captain Swan

Summary: A series of unrelated, fluffy one shots featuring Killian Jones and Emma Swan and the relationship that makes us all swoon. Will contain both canon and AU stories. My contribution to Operation Rainbow Kisses and Unicorn Stickers (aka, my attempt to drown out the season 4 finale angst with ridiculous levels of fluff.)

Other Chapters: ( 1) (2) ( 3) ( 4) ( 5) (6) ( 7) ( 8) ( 9) ( 10) ( 11) ( 12) (13) (14) (15) (16) (17) (18) (19) (20) (21) (22) (23) (24) (25) (26) (27) (28) (29) (30) (31) (32) (33) (34) (35) (36) (37) (38) (39) (41) (42) (43) (44) (45) (46) (47) (48) (49) (50) (51) (52) (53) (54) (55) (56) (57) (58) (59) (60) (61) (62) (63) (64) (65) (66) (67) (68) (69) (70) (71) (72) (73) (74) (75) (76) (77) (78) (79) (80) (81) (82) (84) (85) (86) (87) (88) (89) (90) (91) (92) (93) (94) (95) (96) (97) (98) (99) (100) (101) (102) (103) (104) (105) (106) (107) (108) (109) (110) (111) (112) (113) (114) (115) (116) (117) (118) (119) (120) (121) (122) (123) (124) (125) (126) (127) (128) (129) (130) (131) (132) (133) (134) (135) (136) (137) (138) (139) (140) (141) (142) (143) (144) (145) (146) (147) (148) (149) (150) (151) (152) (153) (154) (155) (156) (157) (158) (159) (160) (161) (162) (163) (164) (165) (166) (167) (168) (169) (170) (171) (172) (173) (174)

(ao3) (ff.net)

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CS Genre: Canon Divergence (missing year between 3a and 3b)

“Hey Hook,” Henry said from his spot at the kitchen table a week later. “Tonight’s the big night! The moment of truth!”

Killian looked around in alarm, afraid Swan had overheard the lad’s impetuous words.

“Don’t worry,” Henry said, noting the direction of his gaze. “She’s not here. She had a quick bowl of cereal and then headed out after her latest skip. She said she had a really promising lead.”

Killian nodded in relief. Tonight might be the moment of truth; the moment he took a chance; the moment he tested the lad’s theory that Swan had feelings for him as well, but he wished to remain as circumspect as possible until the big moment.

One week prior, on Christmas Eve, Killian and Henry had remained awake long after Swan retired for the night.

“You remember, Henry?” Killian asked, as soon as Emma entered her bed chamber. “Truly?”

“Yeah!” Henry said. “I remember everything—Storybrooke, my other mom, Neverland, Pan’s curse, everything! Killian how did you get to us?”

“Never mind the details, lad,” Killian said, waving off the question he was not yet ready to answer. “Suffice it to say it’s a wonder what one can accomplished when he is sufficiently motivated.”

“And you wanted to get back to mom.”

“In part,” Killian said, “but I’m afraid there’s a far more pressing concern. A curse.”

“Again?” Henry asked, with a sigh. “Who cast it this time?”

Killian shrugged. “I’ve no idea. I…found myself separated from the group quite soon after our return to the Enchanted Forest. I’ve no idea what your grandparents and the others got mixed up in after I left.”

“Then how did you know to come for us?”

“I received a missive, perhaps from your grandmother,” Killian said. “I set about securing passage back to your realm the moment I read the news. I know nothing aside from the fact that the entire realm has once again been transported to Storybrooke. I can only assume the need for your mother’s savior services is quite urgent.”

“So let’s wake mom up, tell her what’s going on,” Henry said. “We could be headed back to Storybrooke as soon as this snowstorm stops.”

Killian shook his head. “I’m afraid it’s not as simple as all that, Henry. What do you imagine would be your mother’s reaction should I tell her she’s the daughter of Snow White and Prince Charming and she must go back to a town called Storybrooke to break a curse, no doubt cast by a fairy tale villain?”

Henry grimaced. “Good point.”

The two were silent for a moment, and then Henry brightened once again. “I know how you can make mom remember!” he said.

“Aye? What do you propose?”

“True Love’s Kiss.”

Killian sucked in a long breath. “Come again lad?”

“True Love’s Kiss! It can break any curse. It’s perfect! All you have to do is kiss her and she’ll remember who she was,” Henry said.

“Henry…” Killian began.

“No, really!” Henry said. “You love my mom, don’t you?”

“Aye, more than you know, but at present your mother doesn’t even know me, let alone love me.”

“Well that’s no problem,” Henry said. “I think she was starting to have feelings for you back in Storybrooke. All you have to do is get her to fall in love with you again! We could call it…Operation Captain Swan!”

Was that all he must do?

Killian had to admit to more than a bit of skepticism in his ability to win Swan’s heart in a short period of time, but as no other solution occurred to either of them, Killian finally agreed to the plan.

It was a two-pronged approach.

Over the ensuing week Henry and Killian worked in tandem to help Emma remember her true identity. It was little things—short vignettes from their true lives. Discussions of the storybook. Talk about home and family.

While this was occurring, Killian wooed Emma as tenderly as the most ardent lover—procuring her flowers and small trinkets, preparing her meals, giving her a listening ear, supporting her, praising her, spending quality time with her and Henry.

He was making headway; he knew he was. Sometimes he’d look up and find her gaze on him—happy, speculative, ardent. He knew that look. It was the look of someone falling in love.

Then, of course there was their sleeping arrangement. Killian had spent the first three nights on the couch in Swan’s living quarters, but just after dinner on the evening of the fourth day, Emma approached him, her eyes looking anywhere but at him.

“Look, Killian,” she’d said, after being sure that Henry was otherwise occupied, “I know that couch can’t be comfortable. If you want, you can, you know, share my bed.”

His eyes had widened in shock. Had she just suggested….?

“Just to sleep!” she quickly clarified. “I wasn’t, you know, propositioning you. I just thought..” She shrugged. “I just thought there’s plenty of room in my queen sized bed. If we each keep to our own side it doesn’t have to be awkward.”

Killian grinned slowly, ducked his chin and swaggered in her direction. “Oh I assure you, darling. There would be nothing awkward about it. If you wished to share your bed with me, you needn’t use the excuse of my discomfort on your couch. You need only ask.”

“Killian!” she growled.

He grinned and then sobered. “Thank you for your offer, Swan. I swear to be a perfect gentleman. I’m always a gentleman.”

For a moment, Killian could swear Emma remembered the last time he’d uttered those words—at the top of the beanstalk where their story had begun, but then her eyes had cleared and she’d nodded. “Good,” she said.

But despite her words about remaining separate, the next morning, Killian had woken with Emma in his arms, her head pillowed on his chest, her arms around him, her hair spilling over his arm.

It was pure bliss.

The next night when they retired for bed, Swan had made no mention of the arrangement—or any changes she wished for it. She’d merely lain on her side, reached for his hand and pulled his hand around her middle. He’d had the luxury of holding her through the night, this time with her full knowledge and desire.

Aye, Killian was making progress in fulfilling his vow to win her heart; there was no mistake about it, but his progress was far too slow.

“You need to make a big gesture,” Henry finally said on the morning of New Year’s Eve. “Really put all your cards out there. I’ve got the perfect idea.”

“Aye? And what might that be?”

“A New Year’s kiss!” Henry said. “It’s a tradition here in our realm. People kiss each other just as it turns midnight on New Year’s Day. The person you share your New Year’s kiss with is supposed to be with you all year long. It’s perfect.”

Killian had put forth a token protest at first, but he couldn’t deny the idea had merit. He knew his Swan. He knew that she was afraid to give her heart—but he knew she craved love and commitment even more. She held herself at a distance because she feared the people she allowed herself to care for would leave her. Perhaps if he bestowed this “New Year’s kiss” on her, it would show her that he was in this for the long haul; that he would never willingly leave her.

Aye, tonight would be the night.

~c~s~c~s~c~s~c~s~c~s~

Emma settled on the sofa, pulled her legs up beneath her, and ducked under Killian’s arm. It should scare her how comfortable she’d become with him, how much she’d opened up to him, how very close she was to giving her heart to him. It should terrify her and make her run as fast as she could in the opposite direction.

The thing was…it didn’t scare her. Not at all. It simply felt right.

The room was bathed in darkness save for the twinkling lights on the Christmas tree, the light from the TV.

“So, I’ve been to Time’s Square for the ball drop a time or two,” Emma explained, “but, I don’t know. It’s overrated. It’s so crowded you can barely move, and it’s freezing…and then trying to get out of the crowd and go home afterward…just more of a headache than it’s worth. Why go through all the trouble when I can just catch it from the comfort of my own living room?”

“I must admit,” Killian said, shooting her a warm look. “I’d far prefer watching these events unfold here, with you in my arms than in that crush of humanity.”

Emma felt her stomach swoop. It was uncanny how Killian Jones managed to say these things—that would sound like the worst of clichés if spoken by anyone else—and make her melt like a pile of goo at his feet. She caught his eye and held it for long moments—she had no idea how long, until Henry caught her attention.

“Hey guys!” he said, “pay attention! They’re going to start the count down any second!”

“Ten! Nine! Eight! Seven! Six!...”

The excited crowd had just finished chanting “five” when Emma’s entire world turned on its axis.

“Emma,” Killian said softly, urgently, “I’m in love with you. I love you with everything within me. I’d like nothing better than to spend the remainder of the year, the remainder of my life with you.”

And as the ball dropped amid the shouting crowd, Killian leaned over and joined his lips with hers. For a moment, Emma sat frozen, and then she was kissing him back, caressing his stubbled cheek, running a hand through his hair, moving so close she was nearly in his lap.

Emma felt the strangest energy bubble up within her, and suddenly it burst from her—burst from both of them, forming something resembling a rainbow colored shock wave.

Emma pulled away with a gasp, memories rushing in one after another. “Hook!” she said, finally. “I remember!”

On the other side of the room Henry cheered, pumping his fist in the air. “Yes!”

Beside her, Killian grinned. “Miss me?”

“What do you think?” Emma asked…just before kissing him so thoroughly Henry was soon making gagging sounds on his side of the room.

Over the next several years there would be plenty of curses to break, villains to defeat, even time to travel through, but during that night, that magical night when Emma and Killian shared True Love’s Kiss, nothing could have dampened their spirits. With the magic of the night and the magic of their love, Emma knew whoever cast the latest curse didn’t stand a chance.

Notes: Happy New Year! I hope you enjoyed this New Year’s Eve version of New York City Serenade!

--Next week I’ll start in on regular once-a-week Friday updates like normal. I’m not sure where I’m headed next, but I know it will be fluffy and it will be about CS!

NEXT CHAPTER -->

#cs ff #cs christmas fluff #cs canon divergence #fluffy fridays on sunday #new york christmas serenade #my fanfiction

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anatara3 · 8 years ago

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The Student Loan Repayment Handbook: A Comprehensive Guide to Avoiding Modern Day Serfdom by Jason Spencer Student Loan

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jasonspencerstudentloan · 8 years ago

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The Student Loan Repayment Handbook: A Comprehensive Guide to Avoiding Modern Day Serfdom by Jason Spencer Student Loan

Jason Spencer

Written by Jason Spencer Student Loan

Table of Contents

Jason Spencer Student Loan

Dallas Better Business Bureau BBB Jason Spencer DFW CBS News

Originally from Student Loan Relief | Jason Spencer Dallas http://ift.tt/2uwjpjo

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daisyjade3 · 8 years ago

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The Student Loan Repayment Handbook: A Comprehensive Guide to Avoiding Modern Day Serfdom by Jason Spencer Student Loan

Jason Spencer

Written by Jason Spencer Student Loan

Table of Contents

Jason Spencer Student Loan

Dallas Better Business Bureau BBB Jason Spencer DFW CBS News

Originally from Student Loan Relief | Jason Spencer Dallas http://ift.tt/2uwjpjo

from http://www.jason-spencer-student-loan.com/blog/the-student-loan-repayment-handbook-a-comprehensive-guide-to-avoiding-modern-day-serfdom-by-jason-spencer-student-loan

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aporlaundethima · 8 years ago

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The Student Loan Repayment Handbook: A Comprehensive Guide to Avoiding Modern Day Serfdom by Jason Spencer Student Loan

Jason Spencer

Written by Jason Spencer Student Loan

Table of Contents

Jason Spencer Student Loan

Dallas Better Business Bureau BBB Jason Spencer DFW CBS News

from Student Loan Relief | Jason Spencer Dallas http://ift.tt/2uwjpjo via IFTTT

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the-shadowvengers · 8 years ago

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The Student Loan Repayment Handbook: A Comprehensive Guide to Avoiding Modern Day Serfdom by Jason Spencer Student Loan

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jctt · 8 years ago

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The Student Loan Repayment Handbook: A Comprehensive Guide to Avoiding Modern Day Serfdom by Jason Spencer Student Loan

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Written by Jason Spencer Student Loan

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grues0mee · 8 years ago

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The Student Loan Repayment Handbook: A Comprehensive Guide to Avoiding Modern Day Serfdom by Jason Spencer Student Loan

Jason Spencer

Written by Jason Spencer Student Loan

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Jason Spencer Student Loan

Dallas Better Business Bureau BBB Jason Spencer DFW CBS News

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