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Everything You Need to Know About Student Loans
Are you shopping around for student loans? Maybe just looking for student loan rates and information? Whether you are a current student, prospective student, the parent(s) of a student, or someone that already has student loans, you need to take time to research all of the various options available.
There are two main categories of student loans: government student loans and private student loans. Generally, government loans (many are called Stafford Loans) will offer the best interest rates and terms. This is because the government loans are issued on a need basis up to the allowable maximum. Private Student Loans are issued based on credit thus carrying higher interest rates.
Parents of students should look carefully at PLUS loans, which are also government student loans. Again, the interest rate is likely to be better than the rate you can secure from a private lender for student loans, since the government takes much of the risk of default, thereby subsidizing your low rates.
If you are already carrying student loans and have started making payments, you should take a careful look at consolidating your student loans. Consolidating your student loans can help you lower your monthly payment and lock in an interest rate, so you are not exposed to a potential rise in rates which could affect your payment greatly.
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Student Loan Success Stories
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Student Loan FAQs
- Are student loans a good way to finance my education?
Many students use student loans to finance their education. Student loans are a reasonable solution to paying for school. You just need to make sure you understand the repayment requirements before you take on a loan.
- What is a Federal Perkins Student Loan?
The Federal Perkins Student Loan is a low interest loan for undergraduate and graduate students that demonstrate financial need where the school is the lender. However, the loan comes from government funds. When it comes time to repay the loan, you repay the school, not the government.
- If I consolidate my student loans will I still be able to defer my loan?
Yes. Even if you consolidate your student loans, you can still defer your payments. Standard deferment and forbearance options are core attributes of your student loan and are not lost when you consolidate student loans.
Glossary of Student Loan Terms
Award Letter: a notice from a financial aid provider that spells out the specific financial aid programs and dollar amount of each financial aid award.
Default: A student loan is in default when the borrower fails to make several regular scheduled payments on time (i.e., payments overdue by 270 days) and/or fails to meet the terms and conditions of the loan. If a borrower defaults on a student loan, the university, the student loan lender, the state, and the federal government may take legal action to recover the money, including garnishing your wages and withholding income tax refunds. A borrower may only be eligible for future government financial aid if satisfactory arrangements have been made to repay the loan. Defaulting on a student loan will adversely affect your credit rating. As well, all student loans can not be included in a bankruptcy.
Deferment: the period when a borrower does not have to make payments. Deferments are common in Federal loans rather than alternative/private loans. Some deferments are unsubsidized. This means the interest on the loan must be paid by the borrower.
Delinquent: If the borrower fails to make a payment before the due date has passed, the borrower is considered delinquent. If a borrower is delinquent on their student loans, they may be charged late fees. If the borrower misses several payments, the loan goes into default.
Forbearance: If you are unable to make payments due to a temporary financial strain, your lender or servicer may agree to grant forbearance. Forbearance will postpone payments due on your student loan accounts. Your lender or servicer may also permit forbearance if you are able to satisfy current payments, but not able to make up past payments in one lump sum. While in forbearance, you will remain responsible for the interest that accrues on your student loans.
Stafford Loans: Stafford loans are Federal loans available in two forms: subsidized and unsubsidized. Subsidized loans are need based; unsubsidized loans are not. The interest on the subsidized Stafford Loan is paid by the federal government while the student is in school and during the six month grace period and during any deferment periods.
Dependent: A student in considered a dependent if they live with parents and the parents provide the student with more than half of their support. Both parents can not claim the same child as a dependent.
Independent: A student is considered independent if he/she is at least 24 years old as of January 1 of the academic year, is married, is a graduate or professional student, has a legal dependent other than a spouse, is a veteran of the US Armed Forces, or is an orphan or ward of the court (or was a ward of the court until age 18). A parent refusing to provide support of their childs education is not sufficient for the child to be declared independent.
Average Mortgage Rates
| program | apr |
|---|---|
| 30 Yr Fixed | 6.17% |
| 15 Yr Fixed | 5.88% |
| 30 Yr Fixed Jumbo | 7.33% |
| 15 Yr Fixed Jumbo | 6.79% |
| 3/1 ARM | 5.98% |
| 5/1 ARM | 6.13% |
| 7/1 ARM | 6.34% |
| 10/1 ARM | 6.7% |
| 3/1 ARM (I/O) | 6.01% |
| 5/1 ARM (I/O) | 6.21% |
| 7/1 ARM (I/O) | 6.46% |
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