Tag Archives: Student loan debt

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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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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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Tips to ease the pain of student loan debt

According to consumerfinance.gov, the amount of student-loan debt has surpassed $1 trillion. Below is list of tools that can help you cut down the payments and interest rates.
1)Consolidate your loans.
By consolidating, you are combining a number of loans into one monthly payment. The pros are you have one payment at one interest rate. You may be able to lower your overall interest rate, but keep in mind that if you increase the repayment period, that’s more payments and potentially more money being paid out.
You an consolidate your federal loans or your private loans. There are a few options for a private student loan consolidation, such as cedaredlending.com
2)Increase the frequency of your payments.
This is an easy way to cut down on your interest payments. For example, If you have a student-loan payment of $800 a month, pay $400 every two weeks. This will help cut down on your interest and end up saving you in the long run.
By doing this, you wind up making the equivalent of an extra monthly payment each year.
For example, $800 a month equals payments of $9,600 each year. But $400 every two weeks equals payments of $10,400 each year.
3)Work for a service organization.
Whether it’s the military, Peace Corps or Teach for America, many service organizations offer grants that you can use toward student loans.
Teach for America says it will pay 100 percent of the interest on qualified student loans while you’re in the organization.
Peace Corps members are eligible to receive an $11,100 grant.
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What To Do Before You Refinance Student Loans from a Private Lender

You’ve just graduated with your bachelor’s degree or maybe even a post-graduate degree and the dreams that led to your path of higher education are now met with a frigidly austere economy. Sadly, after your grace period ends, all of your earnest intentions won’t wash with hungry creditors, but don’t despair.
A whole industry of debt consolidation has risen to meet exactly these challenges. Here are some things to ponder if you think refinancing student loans might be the best option for you.
Be Clear About Why You’re Consolidating
If you’re on the verge of defaulting on your loans, you’ll most likely be looking for solutions, and the opportunity to refinance refinance student loans is one of your prime options. Yet before you move forward with this option, you have to be sure that this is the right option for you.
If you have both federal and private student loans, for example, be aware that these loans cannot be consolidated together. You can consolidate federal loans through the Department of Education, but private loan consolidation companies will only be able to consolidate private loans.
Weigh the Pros and Cons
If you decide to refinance your student loans, one possible drawback is that you might end up paying more in the long-term. This is because by signing on for a longer payback period, the interest on your balance has more time to rack up.
On the other hand, your monthly payment could drop considerably. For example, if you owe a combined total of $50,000, you could save less than $1000 annually. Additionally, by consolidating your loans you’ll have the security of having a fixed interest rate, rather than having a number of loans whose interests fluctuate according to the current whims of the market. Considering the highly precarious state of the global economy, this is an incomparable asset.
There’s also the added convenience of only having to make one payment per month. Finally, although some people think that consolidation is a similar process to bankruptcy, it doesn’t cast any shadows on your credit rating whatsoever. (For similar reasons, student loans are the one debt that is not forgiven in a bankruptcy proceeding.)
Be Aware Of Your Credit History
Your potential for refinancing student loans may depend on your past record of paying back debts, so get a rating from at least one of the Big Three ratings companies, a process that should cost less than fifty dollars.  People often assume that having had few credit cards or making a few late payments will tank your credit, but this isn’t true. Making steady car or rent payments, for example, can give you upstanding ratings, so seek out the actual numbers rather than second-guessing yourself.
If you discover your rating issub-par, all is not lost. You can almost always refinance with the aid of a reliable co-signer.
Feel Confident in Your Ability To Repay
Signing up for a refinanced student loan won’t do any good if you’re not sure of the road to repayment. As a rule, you should have at least $2000 per month in documented income to apply for consolidation, so if your job status is uncertain, you may want to hold off.
This is an even greater concern if you’re bringing a cosigner into the picture, as defaulting will negatively affect their credit rating. On the other hand, making a year of payments on time will relieve your co-signer of any liability, so if you feel solid in your imminent earning power, let your possible co-signers know.
Arm Yourself With the Necessary Paperwork
There are a number of services out there to help you get back onto your feet, but count on having at least the following documentation on the ready:

-Names and contact info of all relevant schools

-Detailed personal contact information.

-Social security and driver’s license numbers.

Whether you only took out a few thousand for community college or went in deep for a Ph.D., chances are debt consolidation may work for you. Make sure you do your homework and avoid rushing towards a hasty decision and you’ll be back on a steady course in no time.
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2013 Degrees That Earn the Best Starting Salaries

Research from the National Association of Colleges and Employers (NACE) reported the 10 highest-paid majors for recent college grads.
Without much further ado, they are:
Chemical Engineering: $66,400
Computer Science: $64,400
Aerospace/Aeronautical/Astronautical Engineering: $64,000
Mechanical Engineering: $62,900
Electrical/Electronics and Communications Engineering: $62,300
Civil Engineering: $57,600
Finance: $57,300
Construction Science/Management: $56,600
Information Sciences and Systems: $56,100
Overall, the study found that the average starting salary of all new college grads is $44,455, up 3.4% from a 2011.

When thinking about taking on student loan debt, it might be helpful to also take into account your potential starting salary and what industry is currently hiring.

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Student Loan Debt for Grandparents?

Through March 2012, the number of borrowers of student loans age 60 and older was 2.2 million, a figure that has tripled since 2005. That makes them the fastest-growing age group for college debt. All told, those borrowers owed $43 billion, up from $8 billion seven years ago, according to the Federal Reserve Bank of New York.

Almost 10 percent of the borrowers over 60 were at least 90 days delinquent on their payments during the first quarter of 2012, compared with 6 percent in 2005. And more and more of those with unpaid federal student debt are losing a portion of their Social Security benefits to the government, nearly 119,000 through September, compared with 60,000 for all of 2007 and 23,996 in 2001, according to the Treasury Department’s Financial Management Service.

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How to chip away at your Student Loan Debt without making additional payments

Below is a list of states, companies and services that will make your loan payments or forgive your Student Loan Debt
1)Kansas offers as much as $15,000 toward student-loan repayment for people who relocate to areas beset by population declines. In Kansas, the perk has attracted 411 applicants representing 33 states.
2)The city of Niagara Falls, New York, offers a loan repayment plan to attract young people, and Nebraska is looking into creating one, partly out of concern that the Kansas program would lure college graduates across their shared border.
3)The broadest, most comprehensive path to loan forgiveness may also be one of the nation’s newest: the Public Service Loan Forgiveness Program (PSLF). Passed by Congress in 2007, the program promises to absolve remaining balances on the federal student loans of qualifying borrowers who make 120 monthly loan payments under eligible plans. To meet the program requirements, you must be working full-time for a public service employer at an organization in the public sector, 501(c)(3) or other nonprofits while you make each of the 120 payments.
4)Since 2006, Boston-based American Student Assistance has offered full-time employees as much as $2,400 a year for loan repayment, while part-timers can get a smaller benefit.
5)Student-loan assistance is more common in health care than in other professions. Thirty states and Washington, D.C. have repayment or consolidation plans for dental or medical workers, according to a 2011 American Dental Association report. Several private health-related companies also offer the incentive.
6)Health-care providers, including St. Louis- based BJC Medical Group, has begun to offer repayment plans in compensation packages for physicians over the past few years.
7)Tenet Healthcare Corp., which owns or operates hospitals and health-care facilities across the U.S., promotes loan-repayment incentives in its job ads.
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Cedar Education Lending Endorses Proposed New Senate Legislation

Cedar Education Lending endorses the Know Before You Owe legislation introduced March 29 by Senators Dick Durbin (D-Ill.) and Tom Harkin (D-Iowa). According to Durbin, “two-thirds of students with private loans are unaware of the dramatic difference between Federal student loans and risky, higher-interest, private student loans.” The senators are particularly concerned that students apply for and exhaust all efforts to receive Federal aid before they apply for private student loans.

The Know Before You Owe Act of 2012 would empower students to exhaust their Federal financial aid options, which are more reasonable than the terms of private loans. Federal student loans have fixed interest rates and offer an array of consumer protections and favorable terms, including deferment and forbearance in times of economic hardship, manageable repayment options such as the income-Based Repayment and Public Service Loan Forgiveness programs.

The Act would specifically require private lenders to: certify with the school that the student is enrolled and the amount the student is eligible to borrow in Federal loans; provide the borrower with quarterly updates on their loans, including accrued but unpaid interest and capitalized interest; and, report information to the Consumer Financial Protection Bureau about their student loans. In addition, institutions of higher education would have to inform students about their Federal financial aid availability and their ability to select a private lender of their choice, as well as inform them about the terms and conditions of Federal and private student loans.

“Cedar Education Lending is ahead of the curve on this legislation,” says Harvey Berkey, COO. Unfortunately, the Federal government doesn’t have sufficient funds to supply necessary financial aid and support to all needy students. Students often require private loans to supplement their Federal aid. Cedar Ed supplies Private Student Loans and, after graduation, Private Student Loan Consolidationw to enable students to completely fund their education.

From inception, Cedar Ed has been completely transparent with regard to its lender policies, terms and provisions. Students are clearly cautioned to review all Federal aid prior to seeking a Cedar Ed private loan. All terms related to potential Cedar Ed loans are made clear to the student in advance. Cedar Ed already makes sure its lender certifies with the borrower’s school that the student is enrolled and provides the loan funds to the student through the school, not directly to the student. The student receives timely reports providing information including accrued but unpaid interest and capitalized interest.

“We feel we have already been complying with this legislation and we endorse it completely,” added Mr. Berkey.

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In For A Penny, In For A Pound With Private Student Loans

There are certain things in life that once you start on it, there’s no turning back. One of these is attending college financially backed by a private student loan. Not graduating after taking out an educational funding can wreak long-term havoc on a person’s finances.
First, students who enter college without finishing their degree are still required to pay off their debt. It is important to note that private student loan or any kind of college financing are usually not dismissible, even during bankruptcy. So technically, college drop outs need to pay for something that they did not exactly benefit from.
This financial quandary is amplified by the fact that non-degree holders earn significantly lower than those with a college diploma. Modern job roles, especially the high paying ones, include a Bachelor’s degree as one of the minimum qualifications. In terms of annual salary, college graduates earn an average of $52,200 versus the $30,400 of high school graduates. At this point, it’s really just simple math: the more you earn, the more money you can use to pay off debt.
Many experts set the point of no return at two years. If you are an incoming junior college student and have financed your freshman and sophomore years with a private student loan, you better make sure that you will march on graduation day.
Taking a private student loan to obtain a Bachelor’s degree is a good investment; just make sure that you’re in it until the end. It will boost your earning potential and a great foundation in building a financially stable life. Certain education lending experts, such as Cedar Educational Lending, can offer several options for private student loans.
When taking out a private student loan, be sure to know what repayment choices are available to you. For example, private student loan consolidation is an efficient and cost-effective way to write off your student loan debts. By combining all your student loan debts into one, private student loan consolidations can offer lower interest rates and extended payment terms. In this case, taking out a private student loan can jump start your way to becoming financially responsible.

An age-old mantra constantly reminds people that in life, quitters never win. This strongly resonates when it comes to finishing college, especially if you have a student loan to pay off.

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How To Avoid Private Student Loan Bankruptcy

 

Student Loan Bankruptcy
With the current economic crisis that all of us are experiencing, certain problems like unpaid debts are not uncommon. Unlike before, the cost of living has skyrocketed into heights that left us all uncertain and struggling. One commonly unpaid debt is private student loan. Almost 50% of students who graduated from college owe money to private loan companies, and with the increase in the unemployment rate, some are having a hard time paying off their student loans, and some have no other choice but to file for a private student loan bankruptcy.
What is private student loan bankruptcy?
A student who fails to pay their debts after the usual grace period (which is usually six months) has elapsed. One can file for a student loan bankruptcy if he or she can prove that they are not capable of paying their debt, or that paying off the debt can cause them to live without even the bare necessities. One must prove that his or her income is not enough to pay off the loan. You can also request for an easier payment term from the court, which still shows that you are willing to settle your debts.
Tips to avoid private student loan bankruptcy:
  • be more responsible when it comes to borrowing money. Know all the fees, the rates and the conditions attached to the loan before pushing through with your application. Seek the help of your guidance counselor or the school personnel assigned to explain student loans.
  • find a resolution as early as possible. If you feel that you are not that successful when it comes to managing your finances, seek help as early as possible. Consider doing a private student loan consolidation, to make it easier for you to pay off your debts. Seek help from your guidance counselor, or even your parents. You should not let things get worse for you and your debts.
  • live frugally and within your means. It may be a heady feeling to be able to spend your first paycheck, but it is also more practical to pay off your debts first before splurging. Manage your finances well, and make sure that you pay your monthly dues religiously, since this can also help you build a good credit score, which could be of great help for you in the future. 
Starting off after graduating from college can be really exciting, especially when it comes to sacking that first job. But it also opens you up to the reality of life, which is clearly represented by the private student loan that you have to pay off.