August 28, 2011

How do I Fill the Gap between what College Costs and the Financial Aid Awarded?

Posted in Graduate Students, Grants, Parent PLUS Loans, Private Loans, Saving for College, Scholarships, Stafford Loans, Student Loan News, The Financial Aid Process tagged , , , , , , , at 12:48 PM by plusloans


Struggling with finding the last dollar to pay that college tuition bill???  Here is a good overview of the challenges and some options to manage them…

It is no secret that college is expensive and tuition costs are continuing to rise. We put together the infographic below to examine the costs associated with a college education, including the hidden costs you may not be factoring in like health fees, gas money, entertainment and all the Red Bull you’ll consume during finals. The graphic also outlines how funding occurs and how students can fill the gaps left in paying for college. Feel free to share with your fellow students, friends and family!

Link: http://www.privatestudentloans.com/fill-the-gap/

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September 12, 2007

Stafford Loan Certification

Posted in Stafford Loans, Student Loan News, The Financial Aid Process tagged , , , , , at 3:17 PM by Joe From Boston


This is a topic I’ve mentioned a lot recently, but it’s critical to understanding Stafford Loans, and it will affect any student getting a Stafford Loan, so I’m devoting another post to it.  Here’s an FAQ with questions I’ve heard our Customer Service Reps asked a lot recently.

Stafford Loans must be certified by your school

What does that mean?

It means that your school has the final say in whether you get a college loan and in how much money you actually get.

What does the school do?

The school confirms to the lender that they have awarded you the money in your award letter the previous spring, and they confirm to the lender that you were allocated a certain dollar amount to receive.

Why does my school have to certify the loan?

Stafford Loans are FEDERAL financial aid – Federal is the key word here.  Schools are only allowed to give out a certain amount of money in Stafford Loans, and students must qualify for the loan by filling out the FAFSA.  The certification process ensures that the money was awarded properly.

Does it affect the loan’s time frame?

YES. It’s another step in the process, and another party involved, so it will affect how long your loan takes to fund.  If you apply at the last minute when your school is swamped, you will encounter long delays.

If you have any questions about the loan you want answered, leave a comment here or visit StaffordLoan.com – it’s a great resource for learning about the Stafford Loan, who qualifies, the maximum you might be awarded, etc.

April 27, 2007

Sallie Mae under investigation for illegal practices

Posted in Consolidation, Legislation Affecting Students, Stafford Loans, Student Loan News tagged , , , at 11:44 AM by Joe From Boston


The largest student loan company in America is now under fire for potentially illegal and aggressive tactics. You can read the entire article at the Washington Post.
Probe Launched on Sallie Mae Collection Tactics

By Amit R. Paley

Sallie Mae, the nation’s largest student loan company, may have violated federal laws by repeatedly using aggressive tactics to collect loans from student borrowers, Senate investigators said yesterday.

Aides to Sen. Edward M. Kennedy (D-Mass.), chairman of the Senate education committee, said they believed the Reston lending giant tried to collect debts that were not owed, fired employees who attempted to help borrowers and intentionally sent payment notices to an incorrect address to force a borrower into default.

“I am concerned that several student loan lenders may be engaging in harsh and inappropriate tactics” that “are prohibited by federal law and regulations,” Kennedy wrote in letters sent yesterday to Sallie Mae and Nelnet, a Nebraska student lender, that requested documents about their collection practices.

Both companies defended their policies and said they would cooperate with the inquiry. “We are proud of our record of helping more than 20 million Americans pay for college,” Tom Joyce, a Sallie Mae spokesman, wrote in an e-mail.

Kennedy’s probe of improper loan collection practices comes in the midst of a nationwide investigation into the $85 billion-dollar-a-year student loan industry. The unfolding scandal has revealed kickbacks and conflicts of interest among lenders, universities and government officials, prompting pledges from lawmakers of both parties to reform the system.

One of the stories highlighted by Kennedy centered on Britt Napoli, 48, a former special education teacher whom Sallie Mae put into default after he lost his home in a 1994 California earthquake. Investigators said the company violated Education Department policy.

Napoli said in an interview that he did not receive letters from Sallie Mae telling him he was going into default because he was living in a tent city without access to mail and surviving on help from the Red Cross. He said the company refused to negotiate with him and insisted that he immediately pay the $26,000 balance of his loan. Napoli said that over the past decade Sallie Mae has improperly taken $32,000 by garnishing his wages and seizing his tax refunds. The company has added interest and fees and says he still owes $72,000, Napoli said. His payments do not reduce the principal of the loan, he said.

“This is a nightmare,” said Napoli, now a college professor in Sacramento. “The people at Sallie Mae won’t compromise or listen. And at this rate, I’ll be paying them the rest of my life.”

Asked to respond, Sallie Mae provided a letter from the Education Department’s Office of Federal Student Aid, which indicated that the company had the right to put Napoli in default.

Napoli and Kennedy aides disagreed with the letter’s conclusions.

In its investigation of loan collection practices, Kennedy’s office interviewed about a dozen borrowers and former Sallie Mae employees, an aide said. Investigators said that Sallie Mae threatened a borrower would be sent to jail if he did not pay his loan. It also harassed the neighbors, family and co-workers of borrowers, the investigators said.

Joyce, the Sallie Mae spokesman, said the company followed the law and had “an excellent compliance record in performing post default collection activity.” He also attacked Kennedy’s office for publicizing the inquiry. “It raises the question as to whether the facts are important in this inquiry, and whether the matter has been pre-judged,” Joyce said in the e-mail.

In his letter to Nelnet, Kennedy said the company may have refused to provide loan and payment history information to defaulted borrowers and inappropriately consolidated loans with the borrower’s consent.

Ben Kiser, a Nelnet spokesman, said the company has “extensive systems, policies and procedures in place to stay in compliance with the law.”