Having Two Lenders Gives Students More Choice

By Student Lending Works staff

For many college students nearing graduation or having recently graduated, it may seem like there are too many options for consolidating school loans. However, consolidation options are being eliminated for many students.

The Deficit Reduction Act, which was signed into law on Feb. 8, 2006, eliminates the ability of most students and parents to re-consolidate their loans, no matter what other lender offers them a better deal down the road. Borrowers whose loans are owned by a single lender have long been barred from shopping around for better consolidation rates. Although Congress was scheduled to repeal that law, called the Single Holder Rule, the proposal to do so was dropped from the Deficit Reduction Act just before it was signed into law.

A loophole in the law has previously allowed lenders to circumvent the Single Holder Rule by moving an existing federal loan into a federal program, and then moving that loan back into their own consolidation program. However, the Higher Education Reconciliation Act (HERA), part of the Deficit Reduction Act, has also ended the ability to circumvent the Single Holder Rule.

The elimination of the loophole leaves students and graduates who have all of their loans with the same private lender stuck in a non-competitive market without the option to compare benefits from multiple lenders. (This does not apply to borrowers with ALL federal direct loans through the federal government.)

Because of these changes in the law, students who currently have many loans through one lender (excluding the federal direct loan program) and new students who are looking into their options for funding their educations should seriously consider having more than one lender. By having at least one loan from a different lender, students and graduates can still shop around for consolidators when they near graduation or during their six-month grace period between graduation and when their first loan payment is due.

There are many advantages to be had for a student who has the ability to shop around for consolidation lenders, such as principle and interest rate reductions, and lower monthly payments. Lenders like Student Lending Works can sometimes offer incremental reductions, which can be a great benefit for students.

Tips for Managing Your Student Consolidation Loan Debt

By Student Lending Works staff

1) Be proactive; find out what you owe and who you owe

* Find out what your total debt is, what kind of loans you have, where they are held, and who you pay.
* Check nslds.com to get a list of your student loans and the details of each loan. Keep records and important paperwork in a safe place.

2) Make your payments on time

* Paying on time will help establish good credit.

* Paying on time will decrease the total interest that accrues on your loan.

* Delinquencies and defaults on student loans will lower your credit rating, and defaulted loans are turned over to the federal government for collection.

3) Make your payments affordable

* Shop for the best benefits. Many lenders offer borrower benefit programs that can lower your interest rate or reduce your loan principle. Choose the best program for your situation.
* Choose a repayment plan that works for you.

Standard – Monthly payments are fixed with a payment term up to 30 years. This plan yields the lowest overall interest cost compared to other repayment plans.

Graduated – Monthly payments are initially lower for the first 2-3 years and then gradually increase over the repayment term.

Income Sensitive – The monthly payment amount is adjusted annually based on your income.

But watch out for any monthly payments that are lower than the actual interest that accrues on your loan each month. This will increase your debt to such a level that you may never be able to pay off the principle.

* Is Consolidation for you?

Consolidation is the process by which a lender pays off your individual loans and refinances the total balance into a new consolidation loan with a fixed interest rate and one monthly payment. Because the total balance is higher, you will have a longer repayment term and your monthly payments will be lower. In addition, if you consolidate during your 6 month grace period prior to entering repayment, your interest rate will be fixed at the lower grace period rate.

Consolidation Guidelines:

a) You should have more than $10,000 in federal student loans to make it worthwhile.

b) The loans you wish to consolidate must all be under your social security number.

c) Do not consolidate federal student loans with private student loans. If you consolidate your federal loans into a private consolidation loan, you will lose your federal benefits e.g. fixed interest rate, deferments, subsidized interest, etc.



* Have your monthly payments automatically deducted from your bank account. Most lenders offer a .25% or more interest rate discount for choosing the automatic payment method.



4) Make your payments convenient

* Consolidate your loans (if this is the best option for you) so that you have one monthly payment.
* If you do not consolidate, have your lender combine your loan payments on one monthly bill.
* Have your monthly payments automatically deducted from your bank account.



5) Know what you are entitled to

* Some lenders offer you “benefits” that are not unique benefits; they are really just entitlements that all student loan borrowers receive from the federal government. These include:
o Fixed interest rates
o No fees
o No credit checks
o No prepayment penalties, and
o Rates that are “0.6% lower if you consolidate while still in school, or in your grace period.”



* Another entitlement on your federal student loans is the right to have a deferment or forbearance on your loan if you meet the federal requirements. Choosing a certain lender will not affect this entitlement.

6) Know what will cause you to lose the benefit the lender offers

* The benefit offering is what many people use to evaluate a consolidation loan. Equally important is knowing what can cause you to lose the benefit.
* Know what the grace period is for a late payment. Some loans do not provide ANY grace for payments. In that situation, a payment due on Saturday has to be processed on Friday or you will be late.
* Look for benefits that become “permanent.” Some benefits will cease if you have one late payment OVER THE LIFE OF THE LOAN.
* Be careful if the automatic withdrawal (referred to as Automatic Clearing House, or ACH) and the benefit are tied together. If you lose the withdrawal option, the benefit goes away, too. There are some very easy ways to lose ACH, such as:
o The opportunity to sign up for ACH is limited to 30 days from the signing of the application. If the borrower does not follow up with the lender to get ACH WHILE the application is processing, then they can be outside of the sign-up window. ALL benefits are lost before they get their first bill.
o They are required to sign up to receive their bill via e-mail. In addition, every month they must reply to the e-mail, acknowledging receipt. If they do not, they lose ACH, which causes them to lose their benefits.
o Returned e-mails, insufficient funds in their checking account and failure to notify the lender of a change of address are additional ways to lose ACH.

Student Loan Debt Consolidation

Student Loan Debt Consolidation - How To Reduce The Burden Of Student Loan Debt by Brad Jacobsen

It's not enough as a student earning good grades, graduating, and landing a job with a good salary. What makes it more difficult is the rising costs of education, in tuition fees, books and the cost of living during the years being in school. There is no question that the trends of college and university prices have rose steadily over that last decade. During the 2004-2005 academic year about $129 billion in financial aid was distributed to undergraduate and graduate students. In addition, these students borrowed almost $14 Billion dollars from non-federal sources to help finance their education according to the report Trends in Student Aid (2005) from the College Board association. With an adjustment to inflation the total financial aid given to undergraduate and graduate students has increased by almost 100% from 1994 to 2005.

Why have students been borrowing much more today?

There has been a widening gap between the cost of university and college tuition and aid in the form of grants causing students to borrow more. Many students look at taking students loans as a good investment because it allows them to complete their education with better odds of a getting a better job and life. Because Students are borrowing more and often taking out multiple student loans today, however, it could lead to financial burdens. This would delay things like buying a new home, car, getting married, and raising a family.

How can student loan consolidation help?

Also known as a federal consolidation loan, repays some or all of the outstanding eligible federal student loans and replaces the multiple payments that are made with one single payment. The payment terms can even be extended to make the payments more affordable. The interest rates are fixed rate for the entire term and is calculated as the weighted average interest rates of your consolidated loans rounded up to 1/8% not exceeding 8.25%.

Which student loans can be consolidated?

1. Federal and Federal Direct Stafford (subsidized and unsubsidized)
2. Federal and Federal Direct PLUS SLS (Supplementary Loans for Students)
3. Federal Perkins
4. Federal Nursing Student Loans (NSL)
5. Federal Health Education Assistance Loan (HEAL)
6. Federal Health Professional Student Loans (HPSL)
7. Health Professions Student Loans (HPSL) Loans for Disadvantaged Students (LDS)
8. Federal Insured Students Loans (FISL)

If a person has bad credit, can they still consolidate their student loans?

Under the federal student loan consolidation program, no credit checks are necessary, however, if any loans are in default, three consecutive payments must be made prior to consolidating the loans. What lenders consolidate student loans?

The Internet is an excellent resource to compare student loan consolidation lenders rates and offers. It is just a matter to take some time and compare different incentives between lenders.

Lenders may offer added incentives to consolidate student loans. For example, depending on the balance of the current student loans, some lenders may offer a credit or an interest rate reduction if payments were made consecutively on time. Or, if a married couple has individual student loans and want to combine and consolidate their loans.

It should not be a strike against anyone requiring student loans to get through university or college nor having a delayed hardship when a person graduates and gets back into the work force.

All About Student Loans

Let's face it, most of us do not have access to bottomless trust funds or college education accounts. Therefore, financial aid for a college education is an arena a large percentage of people will have to enter at some point in their lives. Not everyone can or will qualify for a scholarship, grant, or fellowship, and even if they do, this type of financial aid may only cover a portion of their educational expenses. With the ever-increasing costs of higher education, even families that save and save for their child's future education can come up short when the time comes.

Whether you are going to college, planning your child's college education, or paying down existing college debt, student loans are the most common and often the most practical way to go.

There is an abundance of student loan sources to be found. The primary question and ultimate goal is to find the one that fits your particular needs and budget.

For future academics there may be a direct student loan or a private student loan program that will suit you.

You may already be in college, be a college graduate, or be in the midst of pursuing a postgraduate degree. And you may be looking to simplify your finances. Student loan debt consolidation can help to ease to your mind and your financial burden.

For those families and/or individuals that have a sketchy credit history, all is not lost. There are sources and financial institutions that can provide a bad credit student loan.

Whatever your respective needs or circumstances, know that financial aid is available for the asking. Although the prospect of doing the research and filling out loan applications may seem daunting, it will be time well spent. There is much to be said for setting out to reach a goal or capture a dream, which for many is just getting to college. When it is all said and done, the rewards can be boundless.

Lead A Debt Free Student Life, Obtain Debt Consolidation Loans

Lead A Debt Free Student Life, Obtain Debt Consolidation Loans by Alex Jonnes

A prompt and timely repayment always keeps you away from falling into a debt trap. But at the time of financial crisis it becomes quite difficult to make all repayments viable especially if you have taken several debts. To overcome this situation a debt consolidation loan would be the best answer for you.

Too many debts always create a problem with your repayments. Debt consolidation loans help you to repay all your existing debts by consolidating them into one. To be more clear, consider this example. Suppose if you have 3 existing debts. Now when you take a debt consolidation loan, you will make repayment for only this loan. All your previous debts will be merged together and will be repaid automatically by the debt consolidation lender. This will help reduce the size of your repayment and you will be bound with only one creditor.

Student debt consolidation loans also offer several benefits. They come with a very low rate of interest and are charged only after you have completed your school and college. There are plenty of rebates also available that you can avail with student debt consolidation loans, Apart from that if you go for this loan, your debt pressure will decrease a lot and you will be able to concentrate on your studies and work.

You will get a student debt consolidation loan mainly from two sources:

* A government agency- These are federal loans offered usually with cheaper interest rate than other sources.

* A federal agency- also known as private student debt consolidation, offer loan to all students who fail to get a government fund.

Student debt consolidation loans are offered to all types of students. As a student, this might be your first loan that you need to repay your tuition fee, boarding fee, travel expense etc. So, you will be offered with a no credit history loan. You will get a student debt consolidation loan also if you have a bad credit history.

The process of student debt consolidation application is as simple as filling any other form. The most ideal and affordable source of application is the internet to which every student is familiar. Internet provides a range of lenders offering student debt consolidation loans. The application form will ask you for certain details about your identity and credit history. Being a student your loan application will be approved quickly without any delay.

But before filling out any form, first research and find the lender offering best loan amount with the lowest interest rates and easy repayments. This way you will get the best deal that will make your financial status good.

NextStudent's PLUS Loans Make It Easy for Parents to Fund Their Children's College Education

By: Marketwire

PHOENIX, AZ -- (MARKET WIRE) -- 09/22/06 -- Parents who use their savings to help pay for their children's college education oftentimes are doing themselves a great disservice. It is important for parents not to deplete funds that are slated for their future or emergency situations, according to NextStudent, a premier education funding company based in Phoenix. Instead, the company suggests parents take out a PLUS Loan -- Parent Loans for Undergraduate Students.

Federal Loans are a perfect option for parents who want to help their children get to and through college. NextStudent's rates start as low as 6.25 percent when coupled with incentives that include a 2 percent rate reduction following the first 48 months of on-time payments and a .25 percent reduction when repayment is made through Auto Debit.

Instead of using hard-earned savings, parent borrowers can easily apply for PLUS Loans and borrow up to the full cost of college, less any financial aid. The loans can cover tuition, fees, housing, transportation, books and supplies. Parents cannot be turned down, as PLUS Loans are not based on financial necessity. In addition, the loans are available throughout the year, and the process for preapproval is quick and simple.

Parent borrowers receive even more benefits and incentives with NextStudent's PLUS Loan program:

-- A 3 percent cash rebate on the remaining principal balance after the
first 12 months of consecutive on-time payments.
-- Easy Application Process featuring E-Signature. Borrowers can be
qualified in minutes with the online application. Borrowers also can take
advantage of NextStudent's "second look" if they initially are denied due
to unresolved credit matters.
-- NextStudent's PLUS Credit Resolution Team has an 87 percent success
rate at resolving credit issues for borrowers, and resolutions result in
funded PLUS Loans.
-- Various options for PLUS Loan repayment include deferred repayment
when a student is enrolled at least half time at school.


PLUS Loan repayment begins within 60 days of final disbursement, and the repayment term typically is 10 years. There are no prepayment penalties and PLUS Loans are eligible for federal student loan consolidation. In addition, the interest may be tax-deductible.

Keeping and growing a savings plan is important for parents. Instead of using savings to help pay for their children's college costs, parents have a great option when they choose PLUS Loans through NextStudent. The aggressive benefits and incentives help make it financially easier for parents to help their children get a college degree while parents continue to save for their own future.

About NextStudent

NextStudent, http://www.nextstudent.com/, federal lender code 834051, is dedicated to helping students and their families find affordable ways to pay for college. NextStudent offers one-on-one education finance counseling and has a portfolio of highly competitive education finance products and services including a free online scholarship search engine, federally guaranteed parent and college loans, private student loans, both federal and private student loan consolidation programs, and college savings plans.

The NextStudent Scholarship Search Engine, one of the nation's oldest and largest scholarship search engines, is updated daily, available free of charge, completely private -- and represents 2.4 million scholarships worth $3.4 billion.

For more information about NextStudent and its student loan programs, please visit the company's Web site at http://www.nextstudent.com/.

Why You Should Consolidate Your Student Loans

Why You Should Consolidate Your Student Loans

ARA) - Graduation is just around the corner for thousands of students, and shortly after they walk down the aisle, many in the Class of 2006 will find themselves facing hardships they didn't anticipate when they began the pursuit of their degree.

The average American student will leave school owing $29,000 in student loans. Unless you plan to pay back all the money right away - which few recent graduates can afford to do - now is the time to come up with a plan. There is a six month grace period after graduation, but it will sneak up on you fast.

You basically have three options. You can opt for a graduated repayment plan in which your payments start out low, and then increase every two years. The repayment period varies from 12 to 30 years and depends on the total amount of direct loans you owe when your loans go into repayment.

Option two is to make the standard payment from the get-go so. With standard repayment, you will make a fixed payment of at least $50 a month for up to 10 years. For some borrowers, this plan results in the lowest total interest paid because the repayment period is shorter than it would be under the other plans.

But with interest rates rising, more and more people are strongly considering going with option three - consolidation. Student loan consolidation can significantly lower your monthly payment by lengthening the term of your loans, with no prepayment penalties.

"This is the time to be thinking seriously about debt consolidation because come July interest rates are definitely going up," says David Beach, chief marketing officer for financialaid.com. He points out that in February, Congress passed a deficit-reduction bill that cut $12 billion from student loan programs. Lawmakers had already approved a steep hike in interest rates for Stafford loans, used by nearly 10 million students each year. Both rate increases take effect July 1, 2006.

People who decide to consolidate their student loans with financialaid.com before the deadline can take advantage of the opportunity to lock in a fixed rate as low as 3.5 percent for the life of the loan.

Other benefits of securing a loan with the company:

* When you consolidate with financialaid.com you are eligible for their Borrower Benefits Package, which can reduce your interest rate by an additional 1.25 percent.

* All borrowers benefit from an additional .25 percent rate reduction when payments are automatically deducted from their checking account.

* Borrowers with $20,000 or more in student loans benefit from an additional 1 percent rate reduction after they make 36 on-time payments.

To learn more about loan consolidation and apply online, borrowers can visit the financialaid.com website at www.financialaid.com or call toll-free, (888) 868-1391.

Copyright © 2006, ARA Content

College Debt Consolidation - Shed College Debts at Low Cost

by Ann Gibson

Having a college education is expensive these days and students therefore incur debts as they have to borrow to meet various expenses. But there is a way out for students. They can get rid of debts through college debt consolidation.

College debt consolidation is useful for students either former or current students, in lessening debt burden. This they can do by taking a college debt consolidation loan from a new lender. The loan is used in immediate pay off of the debts. Since the borrowed amount from the new lender is at least equal to college debts of a student, the loan merges all debts in itself. Now instead of paying installments to number of lenders, the student pays installments to one lender. As college debt consolidation is done at lower interest rate, the student saves lot of money that was going waste in paying higher interest on debts.

College debt consolidation is done by taking a secured or unsecured loan. Secured collage debt consolidation loan is provided on condition of student offering collateral to the lender. The loan is offered at lower interest rate and for a larger repayment period and greater amount can be borrowed. On the other hand the unsecured loan requires no collateral and instead student's repayment capacity plays a crucial role. The unsecured loan comes at higher interest rate with smaller repayment duration and smaller amount.

There are two main sources that a student may have taken previous loans. These sources are federal government and private institutions. Interest rate charged by federal government is always lower than the one charged by private institutions. So if your loans were from federal government, there is no logic in consolidating them with loans to be taken from private institutions.

You may also be labeled as bad credit in the loan market. In such case you should search for lenders who specialize in giving loan for debt consolidation to bad credit students. They may relax terms-conditions.

Make an extensive search on internet for the suitable lender and as you find them in plenty you can compare their interest rate and conditions. For fast approval of the loan for the debt consolidation, prefer applying online to the lender. Online lenders take no fee on loan application processing or offering any information regarding the loan which reduces the loan availing cost.

College debt consolidation enables student in reducing debt burden. Take the loan for the debt consolidation only after taking its different aspects into consideration.

College Debt Consolidation - Shed College Debts at Low Cost

by Ann Gibson

Having a college education is expensive these days and students therefore incur debts as they have to borrow to meet various expenses. But there is a way out for students. They can get rid of debts through college debt consolidation.

College debt consolidation is useful for students either former or current students, in lessening debt burden. This they can do by taking a college debt consolidation loan from a new lender. The loan is used in immediate pay off of the debts. Since the borrowed amount from the new lender is at least equal to college debts of a student, the loan merges all debts in itself. Now instead of paying installments to number of lenders, the student pays installments to one lender. As college debt consolidation is done at lower interest rate, the student saves lot of money that was going waste in paying higher interest on debts.

College debt consolidation is done by taking a secured or unsecured loan. Secured collage debt consolidation loan is provided on condition of student offering collateral to the lender. The loan is offered at lower interest rate and for a larger repayment period and greater amount can be borrowed. On the other hand the unsecured loan requires no collateral and instead student's repayment capacity plays a crucial role. The unsecured loan comes at higher interest rate with smaller repayment duration and smaller amount.

There are two main sources that a student may have taken previous loans. These sources are federal government and private institutions. Interest rate charged by federal government is always lower than the one charged by private institutions. So if your loans were from federal government, there is no logic in consolidating them with loans to be taken from private institutions.

You may also be labeled as bad credit in the loan market. In such case you should search for lenders who specialize in giving loan for debt consolidation to bad credit students. They may relax terms-conditions.

Make an extensive search on internet for the suitable lender and as you find them in plenty you can compare their interest rate and conditions. For fast approval of the loan for the debt consolidation, prefer applying online to the lender. Online lenders take no fee on loan application processing or offering any information regarding the loan which reduces the loan availing cost.

College debt consolidation enables student in reducing debt burden. Take the loan for the debt consolidation only after taking its different aspects into consideration.

Student Loan Consolidation

by Sinta Makah

The best course of action to take sometimes isn't clear until you've listed and considered your alternatives. The following paragraphs should help clue you in to what the experts think is significant.

I trust that what you've read so far has been informative. The following section should go a long way toward clearing up any uncertainty that may remain.

Tired from paying interest on student loans every month, afraid of the deadline of paying back loans, there is a solution of your tensions, STUDENT LOAN Consolidation. In student loan consolidation, a student may enjoy many benefits; some of them are following below.

1. lower monthly payments 2. only one monthly payment rather than paying separately 3. Student loan consolidation rates are very low, fixed interest rate cannot exceed 8.25% at any time, coupled with national interest rates at a 40-year low. 4. For the application of student loan consolidation, you don't have to offer any credit card check or processing fees. 5. the terms and payment plans of student loan consolidation are very flexible, the provider can mode them according to your financial needs 6. While you don't need to consolidate in order to take advantage of this one, you can knock an additional .25% off your rate by making your monthly payment electronically. This electronic debit option does more than save you money - it decreases your chances of forgetting a payment. 7. The option to prepay your loan at any time without incurring a penalty Sometimes a student got confused about the qualification of applying for student loan consolidation. But now government clears that students who are still in their grace period or cannot re pay their owe money on a student loans can qualify to get student loan consolidation or those who are still in school may consolidate their government-guaranteed loans

Today in the market, there are many companies offering student loans to the college students, but when it comes to their interest rates, they are charging very high. A student has to pay interest on their loans, every month, which is quite impossible for some due to lack of money and time. When it comes time to pay back their student loans, it can be a real burden and a distraction from their career. For those, student loan consolidation is a best deal and step to follow. In this, you don't even get low interest rates, but can enjoy other facilities including grace period of six to nine months, only one monthly payments, tension-free mind etc.

Due to existence of government sector, a student has an opportunity to enjoy the offers given by the government as they are quite competitive than private. Student loan consolidation rates is fixed and cant be changed after signing the contracts and whenever student has graduated or ceased to be a full time student, he can also enjoy the benefit of grace period of six to nine months which allows him to get employed and repay their loans easily.

That's the latest from the Loan Consolidation authorities. Once you're familiar with these ideas, you'll be ready to move to the next level.