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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 studentloans.gov.

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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.

 

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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

ScholarshipPoints.com 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

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Tips on Paying for College

What can students do today to help pay for their college tuition? Cedar Education Lending lists 5 tips current students should follow:

1) Start researching for financial aid sooner rather than later. The competition for aid increases when the economy is weak. However, it also helps to check in as the start of the school year gets closer as some schools have emergency funds available as the admissions office gets a better handle on the final attendance numbers as some students withdraw or choose other schools.

2) Take as many AP courses as possible and to excel on the AP exams. High scores on AP exams can save considerably on college tuition. Many colleges award course credits for them, which can significantly reduce your tuition.

3) Apply strategically to colleges. If you exceed the school’s admission criteria, you might be likely to get a better financial aid package than a decent student.

4) Be realistic about how much debt to take on, given the starting salaries for probable majors and career paths. While some students feel they just have to attend pricey, brand-name colleges, a report released by PayScale found that state schools with low tuition offered students the best return on investment, when projected salaries and loans were taken into account.

5) If you have to borrow, pursue federal loans first before taking on private student loans. Also, remember that a private student loan consolidation can help save a significant amount of money after graduation.

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Cedar Ed Lending Shares Pre-College Student Saving Tips for Your Education Fund

Many new parents hope to start immediately putting money away for their child’s college fund, whether it’s dollars in a jar or a slice of savings put into a 529 Plan. Even if they plan far ahead, however, that doesn’t always mean that they’ll be able to cover the full cost of a college education.
In many cases, the kids themselves will pay for most college expenses in the form of student loans taken out each year. These loans go to cover the cost of tuition, as well as room and board, books, health insurance, and other living expense costs that tally up quickly.
However, there are ways that you can save up money ahead of time in order to reduce the amount of loans you have to take out. With these easy saving tips for your education fund, you’ll be able to take some of the stress of your financial needs and be prepared to take full advantage of the college experience.
Start Early
Don’t wait until the last few months of your senior year in high school to start your college fund. You definitely won’t be able to save enough to make a dent on the daily costs of college life. Start your college fund as soon as you can, once you’ve made the decision to attend college or even know which school you want to attend.
You can establish a savings account that will gather interest. As an added bonus, your family members will see how serious you are about saving for college and may shoot you a twenty every once in a while.
Make Sacrifices
The hardest part of saving money is giving up the things you really want. While you’re young you want to have fun by going out at night, but that can be very costly. Sometimes you need to just say no to the expensive nights out or find ways to have fun for free. You’ll be surprised how much money you can save in the long run by renting a movie instead of going out to the theaters. These little sacrifices will add up.
Yard Sale
Over the years you are bound to accumulate tons of junk that you don’t need or use. It’s not going to do you any good piled up in the closet. Instead you can have a yard sale to get rid of all that extra stuff while gaining cash to put towards your college fund. You can also sell items on eBay, Craigslist, or any other online bidding site.
Pack A Lunch
Another one of the great student saving tips is to pack your lunch every day for school. School lunches might not seem that expensive, but it adds up when you’re paying for lunch 5 times a week. Instead you could put a sandwich and snack in a brown paper back in the morning. Over time you’ll save a lot of dough.
No Impulse Purchases
Some people have the bad habit of impulse shopping. When they see a cute bag or awesome pair of jeans, they take out their credit card without really thinking about it. Once in awhile isn’t bad but eventually it can cost you hundreds of dollars because of bad shopping judgment. Instead you can think about the purchase overnight. A good night’s sleep might change your mind.
Public Transit
Although getting a car is important for many high school students, it’s also a huge financial responsibility. You have to pay car payments, auto insurance, and gas costs. That’s thousands of dollars that you can put towards college
Saving money for college is one of the most important things you can do. The money that you save, plus your private student loans, will make your college experience so much easier.

 

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The class of 2015 might be in for a surprise this graduation season

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According to a recent Fidelity survey, between ballooning student loans, credit cards and money owed to family members, they are facing an average $35,200 in college-related debt.
“We’re tending to find people are still surprised at the level of debt they’re graduating with, which suggests we still have a long way to go in terms of having conversations about planning for college, saving for college and figuring out the best place to go [to college],” said Keith Bernhardt, vice president of college planning at Fidelity Investments.
Based on the most recent data, the bulk of the class of 2013’s debt is in government loans, with graduates owing an average of $26,000. They also had an average of $19,000 in private loans, $18,000 in state loans, $13,000 in personal and family loans and $3,000 in credit card debt.
For those that have federal loans, now is the time to consolidate them. The same can be said for private student loans, especially those that carry an unnecessarily high interest rate. Whether you are thinking about a private student loan consolidation or a federal student loan consolidation, remember that by consolidating, you may be increasing the total amount owed if you choose to extend the repayment term.
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It’s Not Too Late To Apply For these 5 Scholarships

School is out, summer is here for many students, college is the next stop. Whether you’re a parent or a student, a first-time freshman or a graduate student, paying that fall tuition bill is on your mind. Don’t let it ruin your summer – there’s still time to apply for a few more college scholarships!

Below is a list of 5 College Scholarships with Summer Deadlines for 2015:

1.The Graduate Programs Foundation Scholarship: Deadline June 30, 2015Description: Just rate & review your graduate program- Rank 15 categories of your program on a scale of 1 to 10. Award: $1,000

2.The BigSun Scholarship Deadline: June 21, 2013 Description: This is an essay contest open to all student athletes from graduating high school seniors through college. Award: $500

3.A GPA Isn’t Everything Scholarship Deadline: June 30, 2015 Description: This scholarship can be applied for on the Cappex college search website after making a student profile on the site. Award: $1000

4.Gen and Kelly Tanabe Scholarship Deadline: July 31, 2015 Description: This is a merit based scholarship named for based-selling authors Gen and Kelly Tanabe who provided the funding for the program. Award: $1000

5.American Fire Sprinkler Association 2nd Chance Scholarship Contest Deadline: August 28, 2015 Description: Applicants will take a ten question “open book” multiple choice test. For every correct answer, students will receive one entry into a random scholarship award drawing. Award: $1000

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Earnings Differential of College and Non-College Graduates

Rich people without a college degree- their stories may sound inspiring and enticing. However, as the professional and business landscape gets more competitive, for most people a college degree now equates with more money.

According to the United States Census Bureau, the average annual income of a graduate with a Bachelor’s degree is $52,200. This is significantly higher than $30,400, the annual earnings of a high school graduate. Income soars even more as you climb up the educational ladder. People with a master’s degree take home an average yearly income of $62,300; those with a doctoral diploma earn $89,400 per annum; while individuals who possess a professional degree (doctors, lawyers, etc.) bank $109,600 annually.
In terms of lifetime earnings, college graduates earn an average of $2.1 million, doubling the $1.2 million lifetime income of a high school graduate . This stark difference is due to the fact that people with Bachelor’s degrees have a more fruitful and profitable career path ahead of them versus the limited opportunities for high school graduates.
It is thus evident that a college diploma or a higher degree is an important determinant of professional and financial success. However, the fact still remains that attending college does not come cheap and not all families have the means of sending their children to tertiary educational institutions.
But as the old mantra goes, if there’s a will, there’s a way. One viable way to pursue college education is by applying for private student loans. A private student loan can be used to augment federal student loan programs, which sometimes cannot cover all the expenses associated with college education.

Sometimes, there can be misconceptions about private student loans such as extraordinarily high interest rates. However, through expert advice, private student loans can be easily managed with a carefully mapped out repayment program. Cedar Education Lending for example, offers fair private student loans and private student loan consolidations A private student loan consolidation merges all student loans a person might have into one single loan. This can substantially lower your monthly payments by extending the repayment terms as well as reducing interest rates.

Private student loans may appear daunting at first. Looking closely, the financial benefits of possessing a Bachelor’s degree definitely justify the costs of going to college. Just think of student loans as your investment for a lifetime of financial stability and a rewarding career.
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Student Loan delinquencies on the rise

A recent report the report by the Federal Reserve Bank of New York says it’s likely that as many as one out of four borrowers are carrying a past-due student loan balance, hence student loan delinquencies are on the rise.

That’s a much higher rate of delinquency than previously thought. By the more conventional measure, the Fed report says, 5.4 million out of 37 million borrowers with student loan balances as of last summer had at least one past-due student loan account — a 14.4% rate. The sum of those past-due balances comes to $85 billion, or about 10% of the total. The same 10% rate applies on average to  other types of consumer delinquent debt, such as mortgages and credit cards.

About 167,000 people, or about one-half of one percent of all student-loan borrowers, owe more than $200,000, the New York Fed said in its report, which drew from Equifax credit data. The average balance per borrower: $26,300.

For those looking to lower their monthly payments and interest rates, a private student loan consolidation might be the answer!

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What Degrees are Hot and Which are Not?

What Degrees are Hot and Which are Not?
Degrees With High Unemployment
Degree #1 – Fine Arts
According to the Georgetown study, employment rates for recent fine arts graduates are at a staggering 12.6 percent.
When times are tough economically, people don’t spend a lot of money or time on fine arts. Also, government funding has tanked in recent years, so fine arts are becoming more and more dependent on individual donations.
Degree #2 – Philosophy and Religious Studies
According to the Georgetown report, 10.8 percent of recent philosophy and religious studies graduates are unemployed. They’re very nice degrees, and people learn a lot in subjects they love – but they don’t necessarily lead to jobs.
Degree #3 – Film, Video, and Photographic Arts
The Georgetown report notes that 12.9 percent of recent film, video, and photographic arts majors are unemployed. And the numbers are even worse for graduate degree holders – 13 percent face unemployment.
Degree #4 – Information Systems
You might be surprised to see this particular degree on the list of the most unemployable degrees. But according to the Georgetown study, 11.7 percent of information systems graduates are unemployed.
Degrees with Low Unemployment:
Degree #1 – Nursing
According to the Georgetown report, the unemployment rate among recent nursing grads is only 4 percent. This won’t change for a while as the healthcare industry continues to expand.”
Potential Career Path: Registered Nurse (RN)**
Median annual salary for RNs: $65,470
Projected job growth from 2010-2020: 26 percent, or 711,900 new jobs
Degree #2 – Elementary Education
Teaching is one field with a promising future, according to the Georgetown report, with an unemployment rate of only 4.8 percent for recent elementary education grads. If you’re willing to go where the jobs are – there are jobs.
Potential Career Path: Elementary School Teacher**
Median annual salary for elementary school teachers: $53,400
Projected job growth from 2010-2020: 17 percent, or 248,800 new jobs
Degree #3 – Finance
According to the Georgetown report, only 6.6 percent of recent finance grads face unemployment.
Potential Career Path: Personal Financial Advisor**
Median annual salary for personal financial advisors: $67,520
Projected job growth from 2010-2020: 32 percent, or 66,400 new jobs
Degree #4 – Communications
According to the Georgetown report, the unemployment rate for recent communications grads is only 7.4 percent, lower than the average for all recent grads.
There are certain branches of communications that are really positive right now, like helping companies establish a social media presence. Also technical writing and technical communication will continue to be a good area, especially if you combine it with video skills.”
Potential Career Path: Technical Writer**
Median annual salary for technical writers: $65,500
Projected job growth from 2010-2020: 17 percent, or 8,500 new jobs
* The Georgetown study defines “recent college graduates” as bachelor’s degree holder between the ages of 22 and 26.
** All potential careers listed from the 2012-2013 U.S. Department of Labor Occupational Outlook Handbook. The Department of Labor cites the associated degrees as common, required, preferred, or one of a number of degrees acceptable as preparation for the potential career