May 3, 2012

Student Loan Interest Rates

Posted in Legislation Affecting Students, Stafford Loans, Student Loan News tagged , , , at 10:08 PM by Joe From Boston


There has been a lot of news about student loan interest rates recently.  Specifically, the Stafford Loan Rates, which are currently at 3.4%, are scheduled to increase to 6.8% on July 1.  What does this mean for you?

In short, it seems both parties are in agreement to keep the rates as in for the next year (until elections are over).  The disagreement is on how to pay for this during that period.  The reality is that the government does not have additional costs to provide these low rates.  The government is able to raise funds at a low fixed rate and should be able to pass these savings on to students.  They just won’t make as much interest on the loans as they were expecting.  This is a concern as the amount of debt they are carrying for student loans continues to increase.

What should be a greater concern to students is what will happen a year from July – after the elections.  The bigger problem is the cost of education, which continues to rise at twice the rate of inflation.  Contact your representatives and ask them to help lower tuition costs to lower the costs for all students.

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December 28, 2011

Student Loan Options for 2012

Posted in Legislation Affecting Students, Parent PLUS Loans, Private Loans, Scholarships, Stafford Loans, Student Loan News, The Financial Aid Process tagged , , , at 1:32 PM by Joe From Boston


Looking into our crystal ball, we see tuitions continuing to rise.  At the same time, state and federal governments are reducing the amount of funding available to pay for college.  For a quick refresher on your financial aid options, check out our Financial Aid Roadmap to get some insight.

The bottom line, you are going to have to be creative in funding your child’s education going forward.  Search for scholarships, talk with your financial aid office, ask friends and family for help.  As a last options, consider loans.  Some tops student loan sites include:

July 8, 2009

New GI bill – benefits vary by state???

Posted in Graduate Students, Grants, Legislation Affecting Students, Saving for College, Student Loan News, The Financial Aid Process tagged , , , at 12:52 PM by Joe From Boston


Yup, you read that right.

The feds decided to provide veterans with a stipend equaling the cost of the most expensive public state school.  Which is great if you live in New Hampshire – that’s $25K.

In California, it’s a whopping $0.  Turns out, it’s illegal to charge tuition at public schools in California (though the thousands of dollars in fees seems to be legal… but that’s another story).

I grant you, it’s still a lot better than the old bill – it provides full in-state undergraduate tuition and fees as opposed to the old monthly stipend.

But what sounds like a great deal – providing the equivalent about to a private school- turns out to be a crappy lottery depending on where you live.  I’m in Massachusetts.  Veterans here will get about $2200 a year which is useless in a state that has some of the highest tuition and cost-of-living expenses.

Veterans are being penalized by states that have worked hard to keep tuition low.

And what about veterans pursuing graduate degrees?

Looks like Congress created a monster… again…

July 1, 2009

July 1, 2009 – Big Changes Take Effect Today

Posted in Graduate Students, Legislation Affecting Students, Parent PLUS Loans, Saving for College, Stafford Loans, Student Loan News, The Financial Aid Process at 1:13 PM by Joe From Boston


Welcome to the next fiscal year, and along with it come some great changes for borrowers.

  • The maximum Pell Grant amount  increases to $5,350 for the 2009-10 school year, a 13% increase from last year.
  • The fees to originate a new loan fall by half of a percentage point. Next year, it will fall by that much again. The changes will free more money for those students to use for tuition.
  • “IBR” plans come into effect – income based repayment.  Borrowers may be eligible to reduce their monthly payments based on their income.   Also, teachers or those working in other forms of public service can reduce their payments based on their public service salary.

June 24, 2009

Finally – a simpler FAFSA

Posted in FAFSA, Legislation Affecting Students, Saving for College, Student Loan News, The Financial Aid Process tagged , , , at 6:17 AM by Joe From Boston


Education Secretary Arne Duncan is expected to unveil a new, simpler FAFSA form at today’s daily White House press briefing.  This is great news for frustrated parents and students everywhere.

We don’t have too many details yet beyond the following:

  • Online form will shrink from 30 screens to 10
  • Obscure questions that target a tiny fraction of students have been dropped, such as the question about “special combat pay”
  • Questions re-phrased to sound less encyclopedic.  CNN cites the following example:
    “At any time… did your high school or school district homeless liaison determine that you were an unaccompanied youth who was homeless?” will now be, “Are you homeless?”

Click here to read CNN’s article.  I’ll update as more news arrives.

May 19, 2009

New Income-Based-Repayment Plan for Student Loans July 1, 2009

Posted in Consolidation, Graduate Students, Legislation Affecting Students, Stafford Loans, Student Loan News tagged , , , , , , , at 7:30 AM by Joe From Boston


While this won’t help parents as it doesn’t apply to PLUS Loans, this will help your students. Starting July 1, 2009 a new Income-Based-Repayment (IBR) plan will be offered to students for Stafford, GradPLUS and Consolidation loans that are not used to pay back Parent PLUS Loans.

According to the Team FFELP IBR Workgroup, “A borrower must have a partial financial hardship to qualify for an income-based repayment plan. A borrower who at one time had a partial financial hardship, but ceases to have a partial financial hardship may remain in the IBR plan.”

Partial Financial Hardship is calculated with the equation:
Standard Payment > 15%[AGI – (150% Poverty line applicable to family size)]

This means, partial financial hardship occurs when the standard repayment plan based on a 10-year repayment period at the time the borrower initially starts repayment is greater than 15 percent of the difference between the borrower’s adjusted gross income and 150% of the poverty line for the borrower’s family size.

Family size is defined as members of your household, such as spouse, children, grandparents who live in your residence with you and receive more than half their support from you. So a parent with Alzheimer’s that you take care of would count, but a roommate would not. It does include unborn children that will be born over the next year.

To qualify, you will need to authorize your loan company to receive the current year and past 3 years worth of tax returns from the IRS using IRS Form4506-T.  Contact your lender to learn more!

March 25, 2009

Private Colleges unsure how they will be affected by new GI Bill

Posted in Legislation Affecting Students at 7:34 AM by Joe From Boston


Public colleges have a pretty clear-cut path ahead of them, but the fine print just isn’t there for private colleges and universities.  USA Today is reporting that many schools want to participate, of course, but given the deadline looming so soon, they really want clarification on how exactly all his will work.

“For public colleges and universities, the terms of the new bill appear to be relatively clear-cut. It essentially covers tuition and fees for any eligible veteran pursuing an undergraduate degree in his or her home state.

…[For private college], the federal government will pay up to what it would have cost to enroll in the highest-priced undergraduate program at an in-state public school. Schools that charge more and agree to put up a certain amount of money toward the difference can get federal matching money to help close the gap.

Federal lawmakers, too, question whether the federal government will be able to resolve all of its concerns in time to meet the Aug. 1 deadline.

“I think it is fair to say that getting the new GI Bill up and running is proving to be a far more complex task than anyone thought,” Rep. John Boozman, R-Ark., said at a hearing last month of a House Veterans’ Affairs subcommittee, where he is the ranking Republican member.”

March 23, 2009

Americorp set to expand

Posted in Legislation Affecting Students, Stafford Loans, Student Loan News tagged , , , , at 7:34 AM by Joe From Boston


Want to do a year of service after graduation?  Then you’re in luck!  Americorp and other service programs are set to expand from 75,000 positions to 225,000 positions.  The house passed the bill last Wednesday, and the Senate is expected to pass a nearly identical bill very soon.

In addition to doing a lot of good, you may also qualify for some help paying your student loans.  Visit the Americorp website to learn more.

March 13, 2009

Student Loan Forgivenes as of Feb. 2009

Posted in Consolidation, Legislation Affecting Students, Parent PLUS Loans, Stafford Loans, Student Loan News, The Financial Aid Process tagged , , , , , at 9:46 AM by Joe From Boston


Last month, the federal Dept. of Education released new guidelines about qualifying for Public Service student loan forgiveness program.

Eligibility Requirements:

  • The borrower must not be in default on the loans for which forgiveness is requested.
  • The borrower must be employed full time by a public service organization –
    • When making the required 120 monthly loan payments (certain repayment conditions apply – see below);
    • At the time the borrower applies for loan forgiveness; and
    • At the time the remaining balance on the borrower’s eligible loans is forgiven.

loan repayment requirements:

  • The borrower must have made 120 separate monthly payments beginning after October 1, 2007 on the Direct Loan Program loans for which forgiveness is requested. Earlier payments do not count toward meeting this requirement.  Each of the 120 monthly payments must be made for the full scheduled installment amount within 15 days of the due date
  • The 120 required payments must be made under one or more of the following Direct Loan Program repayment plans–
    • Income Based Repayment (IBR) Plan (not available to parent Direct PLUS Loan borrowers)
    • Income Contingent Repayment Plan (not available to parent Direct PLUS Loan borrowers)
    • Standard Repayment Plan with a 10-year repayment period
    • Any other Direct Loan Program repayment plan, but only payments that are at least equal to the monthly payment amount that would have been required under the Standard Repayment Plan with a 10-year repayment period may be counted toward the required 120 payments.

Eligible jobs:

The borrower must be employed full time (in any position) by a public service organization, or must be serving in a full-time AmeriCorps or Peace Corps position. For purposes of the Public Service Loan Forgiveness Program, the term “public service organization” means –

  • A federal, state, local, or Tribal government organization, agency, or entity (includes most public schools, colleges anduniversities);
  • A public child or family service agency;
  • A non-profit organization under section 501(c)(3) of the Internal Revenue Code that is exempt from taxation under section 501(a) of the Internal Revenue Code (includes most not-for-profit private schools, colleges, and universities);
  • A Tribal college or university; or
  • A private organization that is not a for-profit business, a labor union, a partisan political organization, or an organization engaged in religious activities (unless the qualifying activities are unrelated to religious instruction, worship services, or any form of proselytizing) and that provides the following public services –
    • Emergency management;
    • Military service;
    • Public safety;
    • Law enforcement;
    • Public interest law services;
    • Early childhood education (including licensed or regulated health care, Head Start, and state-funded pre-kindergarten);
    • Public service for individuals with disabilities and the elderly;
    • Public health (including nurses, nurse practioners, nurses in a clinical setting, and full-time professionals engaged in health care practioner occupations and health care support occupations);
    • Public education;
    • Public library services; and
    • School library or other school-based services.

March 11, 2009

Simplify the Financial Aid process

Posted in FAFSA, Grants, Legislation Affecting Students, Student Loan News, The Financial Aid Process tagged , , , , at 6:53 AM by Joe From Boston


President Obama yesterday clarified some point on his higher education plan in a speech before the US Hispanic Chamber of Commerce’s annual legislative conference.

Given that this is a student loan blog, I got a chuckle out of his comment that it currently requires a PhD to figure out student loan aid – and I”m sure many of you would agree!  The process most definitely needs simplification.

Read an excerpt of the president’s comments below:

“The fifth part of America’s education strategy is providing every American with a quality higher education – whether it’s college or technical training. Never has a college degree been more important. And never has it been more expensive. At a time when so many of our families are bearing enormous economic burdens, the rising cost of tuition threatens to shatter dreams. That is why will simplify federal college assistance forms so it doesn’t take a PhD to apply for financial aid. And that is why we are already taking steps to make college or technical training affordable.

For the first time ever, Pell Grants will not be subject to the politics of the moment or the whims of the market – they will be a commitment that Congress is required to uphold each and every year. Further, because rising costs mean Pell Grants cover less than half as much tuition as they did thirty years ago, we are raising the maximum Pell Grant to $5,550 a year and indexing it above inflation. We are also providing a $2,500 a year tuition tax credit for students from working families. And we are modernizing and expanding the Perkins Loan Program to make sure schools like UNLV don’t get a tenth as many Perkins Loans as schools like Harvard. To help pay for all of this, we are putting students ahead of lenders by eliminating wasteful student loan subsidies that cost taxpayers billions each year. All in all, we are making college affordable for seven million more students with a sweeping investment in our children’s futures and America’s success. And I call on Congress to join me – and the American people – by helping make these investments possible.”

You can read the complete text of his address at the Wall Street Journal’s blog, Washington Wire.

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