WASHINGTON -- Sen. Sherrod Brown has a new plan to help Americans refinance to make costly private student loan debt more affordable.
In a teleconference call with reporters Wednesday, Brown outlined how his "Debt Swap" bill will help people reduce their debt by moving private loans to federal loans, at no cost to taxpayers.
"Ohio students shouldn't sign away their economic futures when they start college," said Brown, who noted the proposal would have no cost for taxpayers.
Brown, D-Ohio, gave a regional analysis of student loan debt in Ohio and difficulties faced by private borrowers.
More than 67 percent of Ohio college graduates carry debt. The latest figures, from 2007, show the state ranks in the top 15 for highest percentage of grads with debt.
According to Brown, 63 percent of Ohio's public college students graduated with at least $27,000 of loan debt while a quarter of those who graduated from private institutions carry debts averaging $22,700.
Nationally, the number of students with private loans, which have higher interest rates and are often more difficult to refinance than federal loans, has grown at a rate of 24 percent over the past decade.
The new legislation would cut interest rates in half, Brown said, resulting in lower monthly payments over the life of a loan.
In addition to private loans, he said students with Federal Stafford Loan debt, Federal Family Education Loan Program and Plus Loans of up to $31,000 (the current federal limit) are eligible.
"The length of terms to repay the refinanced loan are the same as federal loans existing today, with rates no higher than 6.8 percent," Brown said.
Brown likened the bill to the Higher Education Act of 1965, reauthorized in August 2008.
On a national level, the House is weighing whether to do away with federal subsidies for private student loans, replacing them with direct federal loans.
CitiBank, Wachovia, Bank of America and other lenders have yet to absorb the implications of the possible end of federal student loan subsidies and Brown's new "Debt Swap" bill.
In northeast Ohio, Mary K. Dean of Chase's student loans division declined to comment. She said the group has not had time to evaluate the proposed legislation.
Source
Monday, October 12, 2009
Monday, September 28, 2009
NextStudent Offers One-Stop Access to Network of Student Loan Providers
PHOENIX, AZ--(Marketwire - August 3, 2009) - As new and returning college students gear up for the school year about to get underway, NextStudent Inc., one of the country's longtime premier sources for college financing,with easier than ever one-stop access to a wide array of education financing options and information.
Since the spread of the post-subprime credit freeze into the student loan marketplace a year ago, non-government channels of student loan financing have shrunk to few and far between. Credit-based private student loans -- which families have often relied upon to supplement their federal financial aid -- have become especially difficult to come by, as several lenders of private student loans have gone out of business. The few lenders that remain have restricted their qualifying criteria to borrowers with superior credit or stopped offering private student loans altogether.
Even federal student loans, however, can be hard to find for those students whose schools have not yet transferred over to the Department of Education's Federal Direct Loan Program but remain in the government-subsidized Federal Family Education Loan Program. Students enrolled at a FFELP school must obtain their federal college loans through a bank, state agency, or other third-party lender rather than directly from the government.
NextStudent, however, offers a simple online solution for those students and their families trying to find available student loans and other viable financial aid options.
The NextStudent website offers one-stop access to a network of multiple student loan providers. With just one click, students and parents can access a portal that allows them to compare dozens of student loans from various lenders and shop for the financing option that best fits the family budget. This portal puts students directly in contact with available lenders and allows students and parents to apply for student loans right then and there via these lenders' online applications.
Throughout the NextStudent website, students and families researching their college financing options will also find extensive information on financial aid and on parent and student loans -- both federal college loans and non-federal private student loans.
To try to minimize their need for federal and private student loans, students visiting the NextStudent website can search for free money for college using NextStudent's award-winning Scholarship Search Engine. Continually updated and available for anyone to use, the NextStudent Scholarship Search Engine offers free round-the-clock access to one of the largest online databases of scholarship information available, currently listing nearly 6 million individually awarded scholarships, valued at over $16 billion.
Source
Since the spread of the post-subprime credit freeze into the student loan marketplace a year ago, non-government channels of student loan financing have shrunk to few and far between. Credit-based private student loans -- which families have often relied upon to supplement their federal financial aid -- have become especially difficult to come by, as several lenders of private student loans have gone out of business. The few lenders that remain have restricted their qualifying criteria to borrowers with superior credit or stopped offering private student loans altogether.
Even federal student loans, however, can be hard to find for those students whose schools have not yet transferred over to the Department of Education's Federal Direct Loan Program but remain in the government-subsidized Federal Family Education Loan Program. Students enrolled at a FFELP school must obtain their federal college loans through a bank, state agency, or other third-party lender rather than directly from the government.
NextStudent, however, offers a simple online solution for those students and their families trying to find available student loans and other viable financial aid options.
The NextStudent website offers one-stop access to a network of multiple student loan providers. With just one click, students and parents can access a portal that allows them to compare dozens of student loans from various lenders and shop for the financing option that best fits the family budget. This portal puts students directly in contact with available lenders and allows students and parents to apply for student loans right then and there via these lenders' online applications.
Throughout the NextStudent website, students and families researching their college financing options will also find extensive information on financial aid and on parent and student loans -- both federal college loans and non-federal private student loans.
To try to minimize their need for federal and private student loans, students visiting the NextStudent website can search for free money for college using NextStudent's award-winning Scholarship Search Engine. Continually updated and available for anyone to use, the NextStudent Scholarship Search Engine offers free round-the-clock access to one of the largest online databases of scholarship information available, currently listing nearly 6 million individually awarded scholarships, valued at over $16 billion.
Source
Monday, September 14, 2009
Fitch Publishes the Second Quarter Edition of the Student Loan Report Card
NEW YORK--(BUSINESS WIRE)--In the second quarter of 2009, student loan asset-backed securities (ABS) performance continued to show some resilience to the weak economy according to Fitch Ratings in its latest edition of 'The Student Loan Report Card'.
Most FFELP and private student loan ABS performance has been within expectations, with negative rating actions primarily limited to transactions with variable rate demand obligations where Fitch had assigned an 'AAA' underlying rating. TALF participation has been minimal compared to other asset classes and the proposal to end FFELP (now referred to as the Student Aid and Fiscal Responsibility Act of 2009) began its legislative journey.
In this edition, Fitch provides a recap of the income based repayment option, and the new interest rates now effective for some Stafford loans. Trust performance is also discussed.
Source
Most FFELP and private student loan ABS performance has been within expectations, with negative rating actions primarily limited to transactions with variable rate demand obligations where Fitch had assigned an 'AAA' underlying rating. TALF participation has been minimal compared to other asset classes and the proposal to end FFELP (now referred to as the Student Aid and Fiscal Responsibility Act of 2009) began its legislative journey.
In this edition, Fitch provides a recap of the income based repayment option, and the new interest rates now effective for some Stafford loans. Trust performance is also discussed.
Source
Tuesday, September 1, 2009
Student Loans Consolidation Advice; Consolidate And Save Money
Completing a college education is very expensive. Even with scholarships and grants most students and or their parents will have seek student loans to pay all the education expenses. The average American college or university graduate will have a student loan debt in excess of $18,000 and a good many will incur more than $40,000 in student loan debt.
In many cases a student will receive several student loans during their collegiate career. These will include both public and private funded loans with different interest rates. Shortly after graduation you will be expected to begin making payments on your student loans Many people are surprised at how much the monthly payments will be. All at a time when a new graduates income levels are relatively low. One possible solution to this problem is a student loan consolidation.
A student loan consolidation will combine all the eligible student loans In most cases you will be required to apply for a loan consolidation package from the lender that first provided your federal student loan There are some exceptions to this requirement. If the interest rate is too high or you are unable to combine all your student loans with the lender then you have the option to shop around for a better loan package,
Not all student loans are eligible to be combined into a loan consolidation. It would be a good idea to visit the university financial aid office for student loan consolidation advice prior to making any loan application. In many cases they will be able to tell what the best approach is for combining all your student loans Contacting several different student loan providers that offer student loan consolidation packages is also a wise investment in time and effort.
The points that need to be considered when comparing student loan consolidation packages include amortization period, interest rates, income sensitive payment options and payment grace periods. Most student loans must be repaid within 10 years of graduation. Lengthening out your payment period or amortization to 20 or more years will greatly lower your monthly payments. However you will pay more in interest over the life of the loan An income sensitive payment option will tie payment amounts to your level of income. This feature will give you lower initial payments when you need them most.
Ignoring or failing to pay your student loans can result in serious long term problems including a reduced credit score, dealing with online debt collection agencies and even the IRS. Not dealing with your student loan debt problem is really not a sensible option. Seek good financial advice and take take the steps necessary to manage your student loans.
Doing your homework and seeking good student loan consolidation advice before applying for a consolidation loan may save you considerable amount of money over the length of the loan In many cases you may find loan packages that have lower interest rates as well. Using a consolidation loan to bring all your student loans into a single loan package is a wise choice for most recent college graduates.
Source
In many cases a student will receive several student loans during their collegiate career. These will include both public and private funded loans with different interest rates. Shortly after graduation you will be expected to begin making payments on your student loans Many people are surprised at how much the monthly payments will be. All at a time when a new graduates income levels are relatively low. One possible solution to this problem is a student loan consolidation.
A student loan consolidation will combine all the eligible student loans In most cases you will be required to apply for a loan consolidation package from the lender that first provided your federal student loan There are some exceptions to this requirement. If the interest rate is too high or you are unable to combine all your student loans with the lender then you have the option to shop around for a better loan package,
Not all student loans are eligible to be combined into a loan consolidation. It would be a good idea to visit the university financial aid office for student loan consolidation advice prior to making any loan application. In many cases they will be able to tell what the best approach is for combining all your student loans Contacting several different student loan providers that offer student loan consolidation packages is also a wise investment in time and effort.
The points that need to be considered when comparing student loan consolidation packages include amortization period, interest rates, income sensitive payment options and payment grace periods. Most student loans must be repaid within 10 years of graduation. Lengthening out your payment period or amortization to 20 or more years will greatly lower your monthly payments. However you will pay more in interest over the life of the loan An income sensitive payment option will tie payment amounts to your level of income. This feature will give you lower initial payments when you need them most.
Ignoring or failing to pay your student loans can result in serious long term problems including a reduced credit score, dealing with online debt collection agencies and even the IRS. Not dealing with your student loan debt problem is really not a sensible option. Seek good financial advice and take take the steps necessary to manage your student loans.
Doing your homework and seeking good student loan consolidation advice before applying for a consolidation loan may save you considerable amount of money over the length of the loan In many cases you may find loan packages that have lower interest rates as well. Using a consolidation loan to bring all your student loans into a single loan package is a wise choice for most recent college graduates.
Source
Thursday, August 20, 2009
National Lending Associates Offers TuitionFlex Payment Plan to Schools Using TuitionU.com
New Solution Allows Schools to Offer Students and Families an Option to Pay Tuition Up to 120 Months
SCOTTSDALE, Ariz., Aug. 5 /PRNewswire/ -- TuitionU.com today announced a partnership with National Lending Associates, Inc. (NLA) to offer TuitionFlex(SM), a tuition payment program designed to help schools, colleges and universities provide custom solutions that help students and their families manage tuition costs not covered by student loans and other financial aid.
TuitionFlex enables schools to create a tuition payment plan lasting 12 months or less or extending up to 120 months, whichever best suits a school's individual needs and financial objectives. Schools can take advantage of two flexible product options:
TuitionEase is a short-term, interest-free tuition payment plan designed to let students pay tuition and fees in equal monthly installments over a period not to exceed 12 months.
TuitionExtend provides a long-term payment plan where students can pay tuition and fees over 12 to 120 months with the ability to charge interest.
TuitionFlex is in use by over a dozen schools today and is available to virtually all schools nationwide. Schools can find out more about creating a tailored tuition payment plan by visiting http://www.tuitionu.com/schools.
"TuitionU.com and NLA share a common vision of providing students and their families with low-cost solutions for financing higher education," said Douglas Feist, Chief Executive Officer of NLA. "As financial gaps for students grow larger and options become fewer, TuitionFlex is the perfect way for schools to work with their students to create a solution that works for everyone."
"Paying for college is an increasingly daunting task, as more students are faced with fewer traditional options and less available capital," said Brian Cox, EVP Chief Business Development Officer at TuitionU.com. "TuitionFlex is a powerful new resource for schools seeking innovative and affordable solutions for their students. This new payment plan, combined with TuitionU.com's other low-cost private loans and peer-to-peer lending programs help students meet their entire college funding needs."
The new payment plan is the latest solution to be offered in the TuitionU.com network furthering its mission to provide students, families and schools with access to a community of low-cost college financing resources. This announcement comes as TuitionU.com continues to expand its low-cost private student loan solutions, including not-for-profit credit unions and peer-to-peer lending. Together, these resources are providing hundreds of millions of dollars in education financing to thousands of students nationwide.
Source
SCOTTSDALE, Ariz., Aug. 5 /PRNewswire/ -- TuitionU.com today announced a partnership with National Lending Associates, Inc. (NLA) to offer TuitionFlex(SM), a tuition payment program designed to help schools, colleges and universities provide custom solutions that help students and their families manage tuition costs not covered by student loans and other financial aid.
TuitionFlex enables schools to create a tuition payment plan lasting 12 months or less or extending up to 120 months, whichever best suits a school's individual needs and financial objectives. Schools can take advantage of two flexible product options:
TuitionEase is a short-term, interest-free tuition payment plan designed to let students pay tuition and fees in equal monthly installments over a period not to exceed 12 months.
TuitionExtend provides a long-term payment plan where students can pay tuition and fees over 12 to 120 months with the ability to charge interest.
TuitionFlex is in use by over a dozen schools today and is available to virtually all schools nationwide. Schools can find out more about creating a tailored tuition payment plan by visiting http://www.tuitionu.com/schools.
"TuitionU.com and NLA share a common vision of providing students and their families with low-cost solutions for financing higher education," said Douglas Feist, Chief Executive Officer of NLA. "As financial gaps for students grow larger and options become fewer, TuitionFlex is the perfect way for schools to work with their students to create a solution that works for everyone."
"Paying for college is an increasingly daunting task, as more students are faced with fewer traditional options and less available capital," said Brian Cox, EVP Chief Business Development Officer at TuitionU.com. "TuitionFlex is a powerful new resource for schools seeking innovative and affordable solutions for their students. This new payment plan, combined with TuitionU.com's other low-cost private loans and peer-to-peer lending programs help students meet their entire college funding needs."
The new payment plan is the latest solution to be offered in the TuitionU.com network furthering its mission to provide students, families and schools with access to a community of low-cost college financing resources. This announcement comes as TuitionU.com continues to expand its low-cost private student loan solutions, including not-for-profit credit unions and peer-to-peer lending. Together, these resources are providing hundreds of millions of dollars in education financing to thousands of students nationwide.
Source
Monday, August 3, 2009
Other Benefits of Private Student Loan Consolidation:
- Lower Monthly Payments: With private student loan consolidation, most borrowers can reduce their monthly payment by extending the repayment term of their private student loan debt.
- Reduced Interest Rates: Borrowers with improved credit may often lower their interest rate. Existing loan holders will not reduce your interest rate if your credit has improved.
- Rate Reductions: Borrowers may apply on their own or with a credit-worthy co-signer for private student loan consolidation. Borrower and Co-signers with superior credit may receive lower APR loans.
- Internship/Residency & Military Deferment: A 48 month deferment for medical/dental residents and a 36 month deferment for all active-duty military personnel is available through the Graduate Leverage Private Student Loan Consolidation Program.
- Repayment Term: Undergraduate borrowers may receive up to a 25 year repayment term which offers the lowest possible monthly payment, and graduate student borrowers may receive up to a 30 year repayment term.
- No Prepayment Penalties: All payments in excess of scheduled payments go directly to principal.
Monday, July 20, 2009
Best Private Student Loans
As a general rule, students should only consider obtaining a private education loan if they have maxed out the Federal Stafford Loan. They should also file the Free Application for Federal Student Aid (FAFSA), which may qualify them for grants, work-study and other forms of student aid. Undergraduate students should also compare costs with the Federal PLUS Loan, as the PLUS loan is usually much less expensive and has better repayment terms.
The fees charged by some lenders can significantly increase the cost of the loan. A loan with a relatively low interest rate but high fees can ultimately cost more than a loan with a somewhat higher interest rate and no fees. (The lenders that do not charge fees often roll the difference into the interest rate.) A good rule of thumb is that 3% to 4% in fees is about the same as a 1% higher interest rate.
Be wary of comparing loans with different repayment terms according to APR, as a longer loan term reduces the APR despite increasing the total amount of interest paid. FinAid's Loan Analyzer Calculator may be used to generate an apples-to-apples comparison of different loan programs.
The best private student loans will have interest rates of LIBOR + 2.0% or PRIME - 0.50% with no fees. Such loans will be competitive with the Federal PLUS Loan. Unfortunately, these rates often will be available only to borrowers with great credit who also have a creditworthy cosigner. It is unclear how many borrowers qualify for the best rates, although the top credit tier typically encompasses about 20% of borrowers.
Generally, borrowers should prefer loans that are pegged to the LIBOR index over loans that are pegged to the Prime Lending Rate, all else being equal, as the spread between the Prime Lending Rate and LIBOR has been increasing over time. Over the long term a loan with interest rates based on LIBOR will be less expensive than a loan based on the Prime Lending Rate. About half of lenders peg their private student loans to the LIBOR index and about 2/5 to the Prime lending rate.
Some lenders use the LIBOR rate because it reflects their cost of capital. Other lenders use the Prime Lending Rate because PRIME + 0.0% sounds better to consumers than LIBOR + 2.80% even when the rates are the same.
It is not uncommon for lenders to advertise a lower rate for the in-school and grace period, with a higher rate in effect when the loan enters repayment.
Private Student Loan Comparison Chart
The following table provides information about the annual and cumulative loan limits, interest rates, fees, and loan term for the most popular private student loan programs. Often the interest rates, fees and loan limits depend on the credit history of the borrower and co-signer, if any, and on loan options chosen by the borrower such as in-school deferment and repayment schedule. Loan term often depends on the total amount of debt.
Most lenders that require school certification (approval) will cap the annual loan amount at cost of education less aid received (COA-Aid). They may also have an annual dollar limit as well.
Source
The fees charged by some lenders can significantly increase the cost of the loan. A loan with a relatively low interest rate but high fees can ultimately cost more than a loan with a somewhat higher interest rate and no fees. (The lenders that do not charge fees often roll the difference into the interest rate.) A good rule of thumb is that 3% to 4% in fees is about the same as a 1% higher interest rate.
Be wary of comparing loans with different repayment terms according to APR, as a longer loan term reduces the APR despite increasing the total amount of interest paid. FinAid's Loan Analyzer Calculator may be used to generate an apples-to-apples comparison of different loan programs.
The best private student loans will have interest rates of LIBOR + 2.0% or PRIME - 0.50% with no fees. Such loans will be competitive with the Federal PLUS Loan. Unfortunately, these rates often will be available only to borrowers with great credit who also have a creditworthy cosigner. It is unclear how many borrowers qualify for the best rates, although the top credit tier typically encompasses about 20% of borrowers.
Generally, borrowers should prefer loans that are pegged to the LIBOR index over loans that are pegged to the Prime Lending Rate, all else being equal, as the spread between the Prime Lending Rate and LIBOR has been increasing over time. Over the long term a loan with interest rates based on LIBOR will be less expensive than a loan based on the Prime Lending Rate. About half of lenders peg their private student loans to the LIBOR index and about 2/5 to the Prime lending rate.
Some lenders use the LIBOR rate because it reflects their cost of capital. Other lenders use the Prime Lending Rate because PRIME + 0.0% sounds better to consumers than LIBOR + 2.80% even when the rates are the same.
It is not uncommon for lenders to advertise a lower rate for the in-school and grace period, with a higher rate in effect when the loan enters repayment.
Private Student Loan Comparison Chart
The following table provides information about the annual and cumulative loan limits, interest rates, fees, and loan term for the most popular private student loan programs. Often the interest rates, fees and loan limits depend on the credit history of the borrower and co-signer, if any, and on loan options chosen by the borrower such as in-school deferment and repayment schedule. Loan term often depends on the total amount of debt.
Most lenders that require school certification (approval) will cap the annual loan amount at cost of education less aid received (COA-Aid). They may also have an annual dollar limit as well.
Source
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