Student Loans-All about Scholarships

Scholarships differ from student loans, in that the money granted does not need to be repaid. Scholarships are usually awarded to athletes or academic high-achievers or children of local widows. Basically, there are various kinds of scholarships for various circumstances.

Most scholarships focus mostly on academics, so excellent grades are a must. But that isn’t all. In order to beat out everyone with the similar SAT scores and GPAs, students also have to have other elements in their background, like an award from Westinghouse or another science competition. However, it could also be a background of excellent community service. The options have no ends.

The easiest ways to find out what is out there is by speaking to a school counselor, but do not take everything they say to heart. Usually, they find themselves to be overworked and may not always be aware of important updated information. Do some research on the internet and try to dig out hundreds of potential scholarship programs in the process.

Some scholarships have basic initial criteria like being a citizen of the United States of America and having a high school, while some require a sure acceptance at a university, as well as a set place of residence.

Scholarships are available for the children of veterans, for residents of Virginia, for those who want to major in Health Sciences – and those are just some examples. Most, but not all, require good grades, while a lot simply require the student to come from a family with low income; others may take ethnicity into consideration.

Amazing GPAs, great test scores, and an interesting personal background may not be enough for various scholarships. Some choose to grant scholarships to people because of their written essay, which can sometimes be as short as 250 words or as long as 5,000 words. The essay usually focuses on a list of the student’s merit or personal achievements, while it may also focus on the student’s world views.

The majority of scholarships are completely free; this means that money does not have to be repaid, unlike with student loans. This isn’t always the case though, since some scholarships are taxable. The IRS states that, in order to quality for tax-free scholarships, a variety of conditions must still be met. Find out what they are at: http://www.irs.gov/faqs/faq4-8.html

The only way to if you fit any of the qualifications and actually have the chance of receiving a scholarship is by digging into various programs and start applying as soon as possible. It may take a lot of effort, but it is worth it in the long run.

Student Loans-All about PLUS Student Loans

Within the past few decades, the cost of education has risen dramatically and students who have started to rely on Stafford student loans have failed in trying to cover for most of their expenses. That’s what the Parent Loans for Undergraduate Students (PLUS) student loan program is here for.

Although the interest rate may be higher than those of other student loan programs, PLUS student loans are far more flexible and the student loans are not based on needs.

With the Federal Family Education Loan (FFEL) student loan program, private lenders pay for the student loan and the interest rate is 8.5%. Direct loan students are funded by the United States Department of Education with a direct student loan at 7.9%. This slight 0.6% difference can amount to a lot, though, even in average student loans. In just one year, a decade-long student loan of $25,000 can amount to $2050; that’s $130 in interest.

For exact calculations, play around with your own sample scenarios by using the student loan calculator at: http://www.bankrate.com/brm/mortgage-calculator.asp

With PLUS student loans, the total education cost can be borrowed, minus the amount that the student has already been awarded. PLUS money may not come cheap, but it can make a difference, depending on which school the student wishes to attend.

However, since PLUS student loans are not based on needs, they make a credit check. This does not mean that the student’s credit is taken under consideration, but the parents’ credit since they will be co-signing the promissory note. The parents hold the sole responsibility of paying back the student loan.

There are rare cases, however, where the parents’ credit history makes them ineligible; in these cases, another co-signer (a relative, perhaps) can help with the student loan. The co-signer must, however, take full legal responsibility as a co-borrower.

Interest rates aside, another change that student loan programs have gone through is the eligibility of graduate and professional students to apply for PLUS student loans. The same eligibility criteria and interest rates now apply for these students, as well; they, too, must be in an eligible institution and student loan program at least part-time.

Unlike a lot of Stafford student loan programs, PLUS student loans are repaid straight away, usually within two months after the student loan has been given. Interest starts to pile up right away, as well. Student loans are paid to the private lender, in case of FFEL student loans and to a United States Department of Education servicing center, in case of direct student loans.

Be sure to carefully and thoroughly calculate every cost involved with a PLUS student loan, and choose this student loan only as a last resort since any other student loan is sure to be less expensive.

Student Loans-All about Private Student Loans

A lot of federal student loan programs do not make credit checks and provide ample sums of student loans. Unsubsidized student loans, where interest is accumulated while the student is studying, are those that are most wanted.

However, these student loan programs are based on needs and come with various criteria that might make qualifications a bit difficult. And even when students do qualify; in most cases, the granted student loans will only pay for a small amount of the total education cost. In this case, students should turn to private student loans, in order to make up for the difference.

Private student loans have their share of advantages and disadvantages, too, though. A credit check is strictly required and if a good credit history is found, then there is never a problem. However, ‘good’ is a relative term, and borrowers might find themselves paying for more than ideal interest rates.

Interest rates aside, there are also several other financial implications that come with private student loans. Additional fees are usually asked for with nominal student loan amounts. A simple student loan of $4,000 may get 4% in fees added before it is granted, meaning that the borrower never sees $160 of the total amount, but pays for it anyway.

But, there are certain benefits that come with private student loans, as well; most obviously, that the funds are available. Private lenders are there to gain profit from interest and fees that they ask for. They want to make money available to those who need it. Consequently, they will work hard to make sure that the applicant is qualified. On the other hand, federal lenders have inflexible criteria and there is no point in trying again once you have been rejected.

With private student loans, you will also not have to deal with such illogical and impersonal bureaucracy. Private lenders have customer service departments that are there to answer any questions asked. Usually, federal student loan programs also have contacts available for help, too. Unfortunately, the answers cannot always be relied upon.

There are other convenient considerations apply that make private student loans more desirable.

Private student loans are much simpler, making the entire process much easier. For instance, there is no need to fill out the Free Application for Student Aid (FAFSA) forms and no need to supply additional documents. Interest rates and fees could be lower or higher, depending on the student loan program.

The most wanted private student loans simple have no interest rates or fees that are 1%. Make sure you check for any fees since they could add a lot of money to the student loan.

To get a great student loan, it would be ideal to have an impeccable credit history or to get a student loan with a co-signer who does. To find out what is available for you, this website is great place to start: http://www.finaid.org/loans/privatestudentloans.phtml

You can also use a student loan calculator, if you wish to run through your own sample scenarios. You can find one at: http://www.bankrate.com/brm/rate/calc_home.asp
Make sure you include all the actual costs through the entire lifetime of the student loan, in order to get a proper picture of the real cost.

Understanding Student Loans

Student loans are a very complicated area within the realm of credit subject matter. Several different types of student loans exist, whether subsidized or unsubsidized, and this affects the amount available, conditions and rates of these loans. You’ll need to be aware of these differences before choosing the best way to finance your all-important education as part of a long-term debt management plan.

Your school advising office and general government websites may help to answer some of your initial questions. A Stafford Loan is a popular choice in student loans. These may be able to partially or fully finance your education, and have the added advantage of no prepayment penalties. This means that balances can be paid off at any time with no added charge to you – when you land that new, six-figure job after graduation!

Stafford Loans require no payments while you’re still in school, which is great if you’re going full-time and want to dedicate 100% of your time and energy toward your studies versus getting a job. No credit check is required, but you do need to maintain half-time status as a student at all times. Upon graduation, the government allows you six months before having to start make payments on the amount you owe, giving you time to find a well-paying job and plan for your future debt reduction.

This type of loan does limit the amount you may borrow each year. They also include additional charges not found in other financing options, such as 3% in federal origination and default fees. Again, these amounts will vary between loans and different borrowers.

After the 6-month grace period, payments are relatively low compared to the amount financed, but are planned over a 10-year repayment period. This can result in a very expensive education with added interest paid over this time!

Other options for student loans may include personal loans through a third-party financier, in addition to unsubsidized loans, grants and scholarships. Some of these options will require repayment immediately, interest payments while the student is still in school, or securing a piece of property.

These options may save significant funds in added interest charges over time, but will require either help from mom and dad or finding a part-time job to cover current charges. Of course, the age-old option of simply saving well ahead of time can also help to pay for an expensive education later in life.

Starting sooner rather than later, no matter which vehicle you choose, can help to pay for your formal education when the time comes. 529 plans exist just for this purpose, and can also provide the added incentive of tax deductions for contributions made on a yearly basis.

These investment and savings vehicles should be well-diversified to reach your goals. Always consult a professional investment advisor to determine the best way to invest these funds for future education costs.

Also consider the many options available through employers today: finding a full-time job that helps to pay for part of your education will still leave you with time to attend classes in the evening, and make money in the meantime before graduating debt-free.

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