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Should You Consolidate Your Student Loans?

refinance student loansThe Federal Reserve Bank of New York estimates that Americans owe $1.2 trillion in student loans.

According to the most recent numbers from the U.S. Department of Education, approximately 1 in 6 borrowers, are defaulting on their student loans and haven’t made a payment in at least a year. For those of you that are in good standing, now may be the time to consider your loan options.

There are many important things to consider when attempting tackling your student loans. First off is whether to consolidate or refinance your loans. Consolidation is combining your student loan payments into one while refinancing is reconstructing your existing loans into new ones. Consolidation simplifies the payment process as you are only cutting once check or ACH debit a month. Refinancing more often than not results in your payments having a lower interest rate and thus a lower monthly payment

The decision process does not end here, however.

Another thing to consider is time and how long you want to be paying off your student loans. Appropriately spacing out your payments is a crucial part in the process. You need to find a plan that best suits you and your life. Having your payments stretched over a longer period of time will mean lower payment amounts, but you are also responsible for them for a much longer period of time. On the other hand, you can pay them off in a shorter amount of time but with a much higher cost.

In addition to time you must consider the interest rate of your loans. It would be an easy decision to refinance your loans so that they have a lower interest rate but it is not always that simple. Things like having a poor credit score could inhibit you from doing so. Also, if you have a federal loan, the only option of refinancing is through a private lender, who are much more complex than the federal government.

Ultimately, the path you wish to take when solving your student loan dilemma is based on how best you can handle the situation. You need to understand and decide how long you want to be paying your loans while still actually being able to pay them.

The Bank of Mom & Dad- Rising Tuition Costs

Parent Loans


As rising tuition costs pile mounting debt on students, lenders and colleges are asking for additional alternatives: Load more debt on their parents.

A rising number of private student loan lenders are introducing parent loans, which allow borrowers to fund their kid’s education without putting their student on the hook. The loans mirrors a similar federal program (Parent Plus Loans) but don’t charge the hefty upfront fee levied by the government (4.3%), which could make them cheaper and encourage more use.  Parents will be able to borrow at interest rates ranging from about 3.75% to 10%, with 5 or 10 years to pay it off, depending on the lender.

The average student debt for graduates with a bachelor’s degree is projected to be $37,000 for 2016, up 78% from a decade ago, according to a recent WSJ article.

This is mostly due to the fact that the average annual cost of a four-year, private college, including room and board, has climbed 53% in the past 10 years, to $43,921, according to the College Board.  For public schools, it is up 61%, to $19,548 for in-state students.

3 Top Excuses Why You Are Not Saving

1) I Don’t know where to get started when is coming to savings?

About 50% of millennials and nearly 40% of Generation X feel they do not know what their best investment options are, according to a survey by Schwab Retirement Plan Services.

A good place to start is your workplace retirement account — likely a 401k plan.  Ideally, set aside 15% of your annual pay but contribute at least enough to get the full matching contribution from your employer, if it offers a match.

2) I Have Too Much Student-Loan Debt

More than 1/3 of millennials say they cannot set aside more money for retirement because they are still paying off student loans, according to the Schwab Retirement Plan Services survey.  Look into loan consolidation and refinancing programs so you can lower your monthly payments and save money by doing so. Take that savings and set up a savings or investment account.

3) I Need to Save for a House

Homeownership still is a big part of the “American dream.” In fact, nearly 2/3 of adults view homeownership as either “an accomplishment to be proud of” or “a dream come true,” according to a survey by Wells Fargo. However, if you aspire to own a home, you likely dream of retiring someday, too.

In fact, you should start saving for retirement as soon as possible, then start putting money away for a home when you can afford to do both.  Another option is to look for ways to earn extra income and cut unnecessary expenses in order to save for the down payment.

What You Should Know About Student Loans and Marriage

It’s that time of year again when wedding bells start ringing a little more loudly! Spring heralds the beginning of “wedding season,” and with that comes a union of more than just two lovebirds. Newly wedded couples will share families, a home and (perhaps a bit less romantically) any accrued debt. If you’re tying the knot, make sure you look objectively at your options for money management, such as student loan debt consolidation. Read on in the infographic below for our tips and tricks on merging wedded bliss with student debt, so there won’t be any reason that these two can not be wed!

Tying the knot




How To Consolidate Your Student Loans

College students who rely on student loans to pay for their education will often find themselves with several, if not a dozen or more, separate loans upon graduation.

The complication of managing multiple loans has made loan consolidation an appealing service to many cash-strapped graduates. However, like many things involving finances, deciding whether consolidation is right for you and determining how to go about it can seem complicated on the surface.

This guide explains how to consolidate your student loans online. As we explore the process, you will learn about the benefits and guidelines for determining if consolidating your loans is right for your financial situation.

How to Consolidate

What is student loan consolidation?

Student loan consolidation is where you take two or more of your unpaid student loans and combine them into one. This option is most appealing to the student who has become buried in multiple loan payments that have become due.

When you consolidate your student loans, this means that a lending institution pays off your loans for you and replaces them with a new single loan. Now, instead of making multiple monthly payments to each of your lenders, you would make a single monthly payment to your new lending institution.

What are the benefits of student loan consolidation?

The primary benefit of consolidating is that it frees up more cash for other expenses. What often happens is that graduates will be stuck with so many different loan payments, that they can’t even afford to make all of the minimum payments without sacrificing on the necessary expenses of independent living such as rent, food, and utilities.

The timing is often unfortunate for the recent graduates: they must make the most payments when they are just starting their careers and probably have the lowest income they will ever have in their lives. For many, consolidating their loans can be an effective way to get the breathing room they need while they figure out how to raise their income and manage their finances.

How do I know if consolidation is right for me?

Generally speaking, it is wise to use about 20% of your income to pay off your long-term debts no matter what your income level. This insures that you will not be burdened by debt for too long yet leaves enough income to live on without having to make unreasonable sacrifices.

You can use this “20% Rule” as a guideline. Sometimes, by having multiple loans, you will be forced to pay more than 20% of your income towards your debts because of the sum of all the minimum payments and because of the fact that you have a relatively low income because you are just starting out in your career.

However, simplifying doesn’t guarantee savings. If your only reason for consolidating is because you have a hard time keeping track of all the payments you may want to consider using auto-debit and using a service like Personal Capital to track all of your debt in a single location.

The goal of consolidation should be to reduce the monthly payment requirements by eliminating the need for multiple minimum payments. Do the math. If the numbers work then it may be a good option for you.

What if I have a poor credit score?

If you have a “fair” or “poor” credit score you may want to focus on improving your credit score before you try to consolidate your loan. You will likely not be able to get a good interest rate or even a loan at all. If you have a poor credit score and can’t afford to make your payments, applying for forbearance on your federal loans may be a better option for you. You can use the extended grace period to save some money and get a better paying job.

saving money

Understanding Your Student Loans

You likely have multiple student loans. To make matters more complicated, you might even have several types of loans. Each type of loan has it’s own rules. Here’s the basic of what you need to know:

Federal Loans

This type of loan is funded with government money. Typically, they come with low interest rates and flexible repayment options. These loans do not require any collateral or credit check, making them very popular with students. Federal student loans come in one of three forms:

  • Stafford Loans (subsidized and unsubsidized)
  • Perkins Loans
  • PLUS Loans

Private Loans

These loans are provided by private lenders and do not use government funding. Students usually turn to these loans if the financial aid offered through their school was not enough to cover tuition. The interest rate on these loans is determined by your credit score and will typically be higher than federal loans but lower than credit card interest. In all likelihood, any loan you have that is not a Stafford, Perkins, or PLUS is a private loan.

Choosing Federal vs. Private Consolidation

You have two basic options for combining your student loans: federal consolidation or consolidating into a private loan (refinancing).

Federal Consolidation

This option is available only for federal loans (e.g. Perkins, Stafford). The government combines your separate loans into a single loan and your new interest rate is a weighted average of your previous rates.

Federal consolidations offers two key advantages:

  • Income-driven repayment plans – if your monthly student loan payment is more than 10% of your income you can lower your payments by providing proof of your income.
  • Public service loan forgiveness – if you consolidate your direct loans (e.g. Stafford and Perkins) you can have your remaining loan balances dissolved after 10 years in a public service job.

However, there are a couple of drawback you need to be aware of:

  • Longer loan repayment schedule – while you can get your monthly payments reduced based on your income, this means that you may need to add additional years to your repayment plan because of all the extra interest you will be paying.
  • Loss of Perkins loan forgiveness – The Perkins loan has its own loan cancellation programs for teachers and other public service employees. You may lose these benefits if you consolidate your Perkins loan into other loans. Read the requirements carefully and make a decision that is best-suited for your plans.

Private Refinancing

Refinancing offers you a new interest rate based on your financial condition. If you have a good credit score and a steady income you could combine all your loans and get a lower interest rate. You can consolidate both your federal and private loans through a private loan consolidation firm.

Of course, the drawback of using a private loan consolidation firm is that you will forfeit the protections you had with your federal loans such as forbearance and loan forgiveness programs. Also, you will need a good credit score to benefit from a private loan refinance.

piggy bank

Deciding on a Repayment Plan

The simplest way to pay off your debts is to allocate 20% of your income towards debt payments. Calculate what that number is and pay that every month by using auto-debit. If your income increases then you increase your monthly payments accordingly. This plan will insure that you pay off your debts in a timely manner yet still have enough income leftover where you won’t have to make unreasonable sacrifices.

Bundling Your Loans With Your Spouse’s Loans

Many debt-ridden graduates find themselves in a position where they are married to a spouse who has student loans as well. It is possible to consolidate both persons loan into a single loan. Just don’t take this decision lightly. If you should ever divorce your spouse you will be responsible for the entire loan if the other is unable to pay. If you are going to consolidate your loans together you need to be intensely committed to staying married through life’s ups and downs and never divorcing.

Gathering the Needed Information

Once you’ve decided to consolidate your loan, you need to gather all the essential info. You will typically be required to complete the application in one sitting so you don’t want to be shuffling around trying to find the information during the application.

You should have the following items ready:

  • Loan servicer names, addresses, and phone numbers
  • Loan types (e.g. Stafford, Perkins, PLUS, etc.
  • Account numbers
  • Balances
  • Federal Student ID
  • Personal information: driver’s license, address, phone number, email address
  • Employer’s name, address, and phone number
  • Two references (full names, addresses, phone numbers, and relationships to you)
  • Your last 2 paystubs

The actual application requirements may vary slightly depending on the institution and your financial circumstance, but it’s best to be over prepared than trying to scramble to find the right document before you run out of time.

Applying for a Consolidation Loan

If you’d like to apply for a federal loan consolidation, you can do that at If you’d like to apply for a private loan consolidation you can take advantage of Cedar Education Lending’s consolidation application. We work with a lot of different lenders to provide the best rates and repayment options available.

Can Love Conquer Debt? 5 Questions for the Serious Dater to Consider

Conquer Debt
Meeting that special someone is one of the most exciting experiences in life. Finally, you’ve found someone who understands you, someone who shares the same interests and passions as you.

But at some point in the relationship, finances will become an issue of concern. Many people rarely consider finances until after they’re married. This is bound to lead to trouble though, as finances are the #1 cause of conflict between married couples.

Now, you don’t need to sit down and cross every “t” and dot every “i” in regards to money before you get married. But if you sense the relationship is getting serious, there are some important questions that you will want to discuss with your significant other before you can confidently move forward towards marriage.

1. Do you have a similar philosophy when it comes to handling money?

Undoubtedly, you will have at least slightly different opinions on handling money. Your partner may be more willing to tolerate risks (or vice versa). You may be a deal hunter while they prefer specific brands, or perhaps one person has an expensive hobby.

These differences in preferences is inevitable. Part of maturing in a relationship is learning to understand the other person’s needs and wants and being willing to accommodate them.

However, while different preferences can be tolerated, what is extremely difficult to overcome is having fundamentally different philosophies on money-handling. For example, you will want to make sure that you are on the same page with the following questions:

Does your partner believe in saving/investing for the future?
If you’re religious, does your partner believe in tithing to your local church?
Is your partner willing to cut back expenses if needed to ensure your income remains higher than your expenses?
If either one of you brings debt to the relationship, do you have similar views on the best way to pay off the debt? (e.g. a fixed percentage of your income, consolidation, a debt forgiveness program, etc.)

If you can come to an agreement on these fundamental questions, then it’s just a matter of discussing definitions. What may seem like an “investment” to one person may be seen as an “expense” to the other. Or what one may be seen as being “thrifty” might be seen as “stingy” to the other.

These are not always easy issues to resolve, but if you have the same fundamental views of money-handling you can at least agree on the basic purpose of your money.

Hidden Debts

2. How is your significant other financing their current lifestyle? Do they have hidden debts?

At the point you start dating, your significant other will have a certain lifestyle that they have grown accustomed to. It is worth asking yourself how they finance their lifestyle.

For example, consider these common causes of debt to find out if your partner is living in a bubble that will pop sooner or later:

Reduced income/same expenses – A very common source of debt stems from simply not bringing in enough income to pay regular expenses. Someone might lead a modest lifestyle but may be relying on credit cards to make up the difference in their basic expenses like groceries, rent, utilities, cell phone, etc. If your significant other does not seem to be working much yet lives a “normal” lifestyle, you may want to raise this concern to find out where they are getting their income.

Gambling – This can be a serious issue and one that might be difficult to detect. There are many ways to gamble and most can be easily hidden or even seem harmless on the surface. Obviously, if you’re concerned you should just ask your partner. If you (or your friends or family) still suspect there might be a problem you will want to keep your eyes open–it will become apparent soon enough. You may want to reconsider the relationship if a gambling problem becomes evident.

Medical expenses – This is an unfortunate form of debt that many people struggle with. The good news is that medical expenses usually don’t indicate a character problem, but nevertheless debt is debt and must be dealt with accordingly. If your partner requires frequent operations or expensive medications you will want to make sure that they have a definite plan for paying off that debt and securing enough income to be able to afford the needed medical expenses.

Education – A very common source of debt, especially among Millennials. Experts argue whether or not student loan debt is “worth it” but if you have it you will need to make sure that you can find a market demand for your abilities and can market yourself so you can quickly turn your experience and expertise into a reasonably high income.

Lack of savings – If your partner seems to constantly “get in trouble” financially you may need to ask them if they regularly save. You do not need to bring this up during the moment of the crisis, but perhaps after things settle down you can ask how they approach saving money. We can expect life to give us trouble from time to time and having some money set aside can give us a cushion for these “expected surprises” rather than having to get into debt every time.

3. Are they willing to undergo financial training with you?

Mastering your finances takes time and discipline so you shouldn’t expect your partner to have everything perfectly together financially. However, you do want to make sure that they are willing to learn. If they willing to learn and correct their mistakes then all of the above problems can be overcome. But if they seem to shrug off financial education as something “boring” or “stupid” then this may an early warning sign: they may never come around.

Here are a few financial training resources that many people have benefited from:
The Richest Man in Babylon – a classic book on financial wisdom written as a series of parables. It was written in 1926 and is still a bestseller today!
Dave Ramsey – a very popular financial advisor and author. Good for those who feel they need the “tough love” approach.
Ramit Sethi – very popular with Millennials. Shows you how to rely more on automation and less and willpower to make your money go where it needs to go.

4. Are they future-oriented?

Handling money requires a future-orientation of some degree. Most of the material things in life that matter most (e.g. house, education, passive income, career advancement, etc.) require thinking ahead and making plans. Very often, to obtain these things we must sacrifice some things that we might want in the moment (e.g. eating out, entertainment, hobbies, etc.).

Much of life is a balancing act between future-orientation and present-orientation. On the one hand, if we spend all our money on pleasures in the here-and-now we will still be poor and maybe even worse off when we are older. On the other hand, if you neglect the present, you may find yourself with more money but also a career that you hate, an unhappy family life, and very few real friends.

The reason you want to know if your significant other is future-oriented is because future-orientation is a result of maturity. Present-orientation is a natural childlike state (that we sometimes lose if we obsess over material success.) You want to marry someone who both enjoys life and can make good life decisions!

Emotions of Debt

5. Do they let their emotions determine their financial decisions?

In a manner of speaking we usually make financial decisions based on emotions. We pay for what we value. We exchange our money for things we believe will make our lives happier.

However, it is dangerous if one is unable to check those emotional desires with logic. There will always be some shady salesman or marketer that will peddle useless products by appealing to the buyer’s emotions.

It’s perfectly fine to get excited and purchase things that will bring pleasure and betterment to our lives. We just have to be able to discern, to the best of our ability, both if something is “legit” and if it is an appropriate purchase given the present situation.
Does your significant other pass the test?
The compatibility of your financial philosophies doesn’t need to be viewed as a “pass/fail” test. Nobody’s perfect and true love and trust can overcome financial problems. But financial problems don’t go away overnight and you can expect to be in it for the long haul. So before you “tie the knot” be sure that, in addition to simply enjoying each other, there is a foundation of general agreement and transparency when it comes to finances.

Degrees with the Best/Worst Employment Opportunities

Finding the right career involves a lot hard work and research. Take a look at this infographic highlighting the best bachelor’s degrees. We list the best and worst careers according to salary, projected job growth, and, current job environment.

STEM (science, technology, engineering, and math) fields, not shocking, are high up on the list. Actors and oil rig workers, unfortunately, are among the occupations at the bottom of the list

best degrees



How Federal Loan Consolidation Works

How federal loan consolidation works

If you choose to consolidate your federal loans, the federal government pays off your existing loan balance and replaces your loans with a direct consolidation loan. What should you expect?

1. A new interest rate, which is the weighted average of all your prior loans’ rates rounded up to the nearest one-eighth of 1%. (If the average comes to 4.36%, for instance, your new interest rate will be 4.475%.) Interest rates on direct loans are fixed, which is different from a variable rate, which can fluctuate based on market conditions.

2. The government then will assign you a new repayment schedule based on your loan balance. Below if a table that lists how the government determines the length of your repayment term:
Federal Student Loan Consolidation

What are some of the advantages? For one, you can postpone payments on a loan during times of economic hardship. You are also given theopportunity to take advantage of plans that allow you to make payments tied to your income.

Remember, consolidating your loans with the federal government is free. You can consolidate your loans through

What is Refinancing vs. Consolidation?

What is the difference between refinancing vs. consolidation and which option (if either) is better for you?

Let’s see if we can break it down for you.

Federal loan consolidation

As its name suggests, consolidating means combining multiple federal loans into just one loan. Federal student loan consolidation is offered by the government and is available for most types of federal loans:

  • Direct Subsidized Loans
  • Direct Unsubsidized Loans
  • Subsidized Federal Stafford Loans
  • Unsubsidized Federal Stafford Loans
  • Direct PLUS Loans
  • PLUS loans from the Federal Family Education Loan (FFEL) Program
  • Supplemental Loans for Students (SLS)
  • Federal Perkins Loans
  • Federal Nursing Loans
  • Health Education Assistance Loans

Since you are generally charged the weighted average interest rate of the loans being combined, this option typically does not save you much money. There are some benefits though:

  1. Fewer bills and payments to keep track of each month.
  1. Locking in a fixed rate especially helpful if you are consolidation variable rate loans as it offers some protection from having to pay higher rates should interest rates go up.
  1. Lower monthly payments. But this is usually means lengthening your payment term, which means you’ll have to pay more interest over the life of the loan.

Student loan refinancing

Refinancing is when you apply for a loan under new terms and use that loan to pay off one or more existing student loans. A refinance loan often allows you to:

  1. Lower your monthly payment.
  1. May reduce the time it takes to pay off your loan.
  1. Save money paying over the life of your loan.
  1. Enjoy the benefits of consolidation (e.g., one monthly check).

Unlike consolidation, refinancing is available from private lenders, and allows for federal loans and private ones to be combined,

It’s important to note that Federal loans offer certain benefits and protections (such as Public Service Loan Forgiveness and income-driven repayment plans) that do not transfer should you refinance.  If you’re considering refinancing, you should first take a look at your federal loans to see if any of these benefits apply to you.


Scholarships expiring at the end of July

Below Cedar Education lists 7 Scholarships that are about to expire-hurry up and act fast!

Media Fellows Scholarship Program
Eligibility:for rising college juniors and seniors who have a minimum GPA of 3.0 in their major concentration

Deadline: July 30, 2015

Amount: Up to $5,000 Scholarships

Eligibility: for high school freshmen, sophomores, juniors and seniors, undergraduate, graduate, and continuing education students

Deadline: July 31, 2015

Amount: Up to $10,000

Platt Family Scholarship Essay Contest

Eligibility: Scholarships for undergraduate college students

Deadline: July 31, 2015

Amount: Up to $1,500

Heritage Scholarship

Eligibility: for high school seniors and undergraduate college students

>Deadline: July 31, 2015

Amount: $500

FastWeb Refer A Friend Scholarship

Eligibility: for high school students, undergraduate students, and graduate students

Deadline: July 31, 2015

Amount: $500

Courage to Grow Scholarship

Eligibility: Scholarships for high school juniors, high school seniors, and undergraduate students

Deadline: July 31, 2015

Amount: $500

$2,000 “No Essay” College Scholarship

Eligibility: Scholarship for current students and those planning to enroll within 12 months

Deadline: July 31, 2015

Amount: $2,000