3 Student Loan Tips for Borrowers Returning to School in 2015

In a few hours, we’ll close out 2014 and ring in the New Year. While New Year's Eve is all about champagne, noisemakers and celebration, tomorrow marks the beginning of New Year’s resolutions. That’s a decidedly more serious topic, especially if your plan is to head back to school.

Study Loan

Study Loan  

People often splurge to kick-start their resolutions, only to lose steam by in the months that follow. Usually, that’s not a big deal, but it can be if you’re borrowing student loans to complete your degree. Like your unwanted gym membership from last year, student loans stick around, and they can really cost you if managed incorrectly.

​If returning to school is your goal for 2015, great, let us help you achieve it in the smartest financial way possible. Here are three ways nontraditional students can do just that:

1. Understand the difference between federal and private student loans: If you’re eager to restart your education, you may be tempted to sign up for any loan that will help you get started. That’s a mistake.

Student loans fall into two buckets: federal loans and private loans. Federal loans come from the government. These feature fixed interest rates and entitle you to specific repayment benefits, such as alternate payment plans, postponements and loan forgiveness options, should you qualify.

Private loans come from private lenders, like a bank or credit union. The details for these debts differ, which can make things tricky for borrowers.

Private loans may come with repayment benefits, or they may not. If they have options, you may have to pay to use them. Simply put, many variables exist with private loans, including their interest rates.

If you cannot take out enough money in federal loans to cover your education costs, private loans can be a viable option. However, be sure to exhaust your federal options first, and then shop around for the best deal.

2. Get any previous loans in order: If you borrowed loans previously to attend school, find out their status in the National Student Loan Database System. You may need to address some issues that pop up before you can take on additional debt, such as if you have federal student loans in default.

Borrowers with defaulted loans are ineligible for additional federal aid. They may have trouble getting state aid as well. In addition, a loan default is one of the toughest marks to have in your credit history.

So, if you end up turning to private loans, you’ll likely need a co-signer and even then, the loan’s interest rate and other terms may not be favorable due to your history.

However, don’t cast aside that resolution yet. You can pull your loan out of default in a few different ways, including loan rehabilitation. To rehabilitate your loans, you need to make nine on-time monthly payments to your loan holder. After making six payments, you will regain federal student aid eligibility, and once you complete all nine, your loan will be sold to a new lender and the default will be removed from your credit history.

As long as this is completed before the last day of classes for the school year, you can usually get financial aid for that entire year retroactively.​ Rehabbing your Study loan may delay the start of your actual resolution. However, by doing so, you’ll have the maximum and best financial options available to you when you do enroll.

3. Choose your program wisely: Since it’s the resolution time of year, expect to hear and see advertisements for degree programs all over the place. Your mission is to know what you’re getting into before signing up for any of these.

Sure, it’s easier to call that phone number on the TV or grab that flier off the subway, but that advertised school may not make sense for you, financially or otherwise.

Every student’s plan should always be to borrow responsibly for the best education. If you’re returning to school, that could mean taking an alternate route to your degree, like attending community college to complete your lower-level requirements – just make sure they’ll transfer. You could also look into online programs, but again, do your research.

Ultimately, these options may cost you the immediacy of a new year’s resolution. However, that won’t matter when you’re successful in 2015 and beyond.

Source: (https://educationloansinindia.wordpress.com/2016/01/30/3-student-loan-tips-for-borrowers-returning-to-school-in-2015/)

Education loan

Tips for Using Student Loans for Online Education

You’ve seen the ads on television encouraging students to get a degree online, work at their own pace and save time and money. For some students, online courses are a great way to earn a degree or certificate, especially if their work or family schedules make it difficult to commit to a class that’s held at the same time every week.

Student Loans in India

Student Loans in India 

But just like choosing a traditional brick-and-mortar college, choosing an online program means doing your homework before starting classes, including making sure you know how to pay for them.​

Studies show that the number of students who complete, or graduate, from their online degree or certificate program is lower than those who enroll in traditional college courses. But while you might not finish your degree, the student loan debt will remain, as well as a higher risk of default.​

In many cases – but not always – an online program may be a cheaper alternative to obtaining a degree at a school’s physical campus. Just as with any big purchase, it’s important to shop around to see which school offers the best value for the credential you are seeking. The luxury of online learning options is that the location of the institution is no longer a restriction to the choices available.

While you can obtain federal financial aid for many online education programs, there are some restrictions. The most significant restriction is attending a school outside the U.S. While you can obtain federal student loans to attend some foreign schools, regulations do not allow any part of that program to be online, even if it’s just a single class.

If you do need to dip into federal or other financial aid resources to afford college, it’s all the more important to ensure the quality of the program is high. Ensuring the program has been accredited by recognized regional or national accreditors is one way to verify that the program meets at least minimum standards – and increases the chances of your credits being transferable if you should decide to attend a different school midway through. Some schools are starting to refuse to accept online

transfer credits, regardless of accreditation, due to what they say is low standards in some online programs.

It’s also important to note that you must be enrolled at an accredited institution to receive federal financial aid and most other state and private aid. Your schools should be able to tell you right away if they are accredited and if so by whom.

Online education may also offer a higher risk of overborrowing than a traditional program. Even though your tuition and fees may not be any cheaper, the remainder of your cost of attendance should be significantly cheaper as you won’t be incurring additional transportation or room and board expenses than you had prior to enrolling in school.

While that is usually the case, schools are required to offer similar cost of attendance totals to online students as they do to students attending the same program on campus, which means a high possibility of being offered more loan funds than you’ll need to pay the cost of the program. While it can be tempting to hang on to those extra funds, they can add up quickly to a higher student loans in India debt than you expected.

The Department of Education’s College Navigator is a great tool to help consumers evaluate all these traits as they research online programs. The site includes statistics on a school’s graduation rate, debt level, student loan default rates and net cost, among other items, and can be valuable for comparing schools and their online – and other – offerings.

Source: (http://educationloanformba.tumblr.com/post/138210185955/tips-for-using-student-loans-for-online-education)

How Transferring Schools Can Affect Student Loans

If you’re planning on switching schools, there are likely a number of reasons behind the decision. Some people transfer after realizing a different academic program will better fit their long-term career goals, while others simply want to be closer to their families.

Education Loan in India

Education Loan in India 

No matter their reason for transferring, all of these students should think about their student loans. Unlike credits, which may or may not follow a student to a new institution, student loans never transfer between schools. As a result, prospective transfer students need to be aware of a number of things to ensure they can fund their education at a new school and take care of what they've already borrowed.

Resubmit Your FAFSA

When you transfer, you have to resubmit your Free Application for Federal Student Aid to your new school. Fortunately, resubmit does not necessarily equal redo.

Each academic year has its own FAFSA. If you transfer midyear, the FAFSA you completed for that year is still good. Simply list your intended transfer school or schools in the form and resubmit it at FAFSA.ed.gov.

Because the other information on your FAFSA remains the same, your eligibility for financial aid will be the same as well. That means there shouldn’t be any surprises when it comes to your expected family contribution.

In addition, the government regulates the amount of federal student aid a borrower can receive. That means you can’t get more than the annual maximum in Pell Grants – $5,730 –  or subsidized Stafford loans – $3,500, if it’s your first year in school – no matter the school or schools you attend.

Despite these rules to standardize processes, transfer students still have to resubmit their FAFSAs. That’s because these borrowers won’t necessarily receive the same exact award at different schools. You have to go through a school’s financial aid process, including receiving a new student aid report, so they can calculate that themselves.

Your Financial Award May Be Less

Odds are, your awards won’t differ greatly from school to school, particularly when it comes to your federal student aid. As mentioned above, your expected family contribution is the same no matter which school you attend. Still, your overall award may differ and your new one could potentially be less than you thought. There could be a few reasons for this.

First, your new school may award you less institutional aid. This could be due to your financial situation or theirs. Some schools simply have less money to give out. Much campus-based aid, including Perkins loans, is limited and disbursed on a first-come, first-served basis.

So, it’s possible that funds that were once available to you are no longer an option. Unfortunately, like federal loans, any campus-based aid you previously received won’t transfer with you either.

In addition, if you transfer midyear, you may qualify for less financial aid than you did as a first-time or returning student. This will depend on how much aid you earned at your previous school. In general, you don’t fully earn financial aid until you’re 60 percent through a semester.

Leave before then, and your school returns the unearned aid, loans first, to the federal government. This could affect your borrowing maximums at your new school.

Finally, your school’s cost of attendance can affect your award. Transfer to a less expensive school, and your aid may shrink as well. If your federal aid amounts shift greatly, it will likely be because of a big cost

differential between your old and your new school. Then again, going to a cheaper school and having fewer loans to repay isn’t necessarily a bad thing.

Don’t Forget About Any Existing Loans

Your Education loan in India may not transfer with you, but that doesn’t mean they disappear. When you leave your old school, your loans from there will begin their grace period. That means you may have to make payments on them in as little as six months.

If you plan to immediately re-enroll in a new school at least half time, you can file for an in-school deferment to pause these payments. This will allow you hold off on making them until you graduate from your new school or drop below half-time enrollment again.

In addition, remember to check out your new school’s satisfactory academic progress policy to find out how they measure transfer credits. If you fall below SAP, you can become ineligible for aid.

You should also be sure to understand how transferring affects your eligibility for subsidized Stafford loan interest payments. If you transfer from a four-year program to a two-year program, this can greatly affect how much aid you're eligible for as well.

Source: (http://studyabroadln.tumblr.com/post/138015635939/how-transferring-schools-can-affect-student-loans)

College Student Dept

Education loan

Education loans: Student Loan Borrowers Delaying Other Life Decisions

Student loan debt is having a profound impact on the daily lives and spending habits of young Americans, regardless of the type of institution they attended or the level of credential they earned, according to the latest "Life Delayed" report from American Student Assistance, the organization that writes the Student Loan Ranger blog.

​According to the survey, 62 percent of respondents said their student debt posed a hardship on their personal budget when combined with all other household spending. Specifically, 35 percent said they found it difficult to buy daily necessities because of their student loans; 52 percent said their debt affected their ability to make larger purchases such as a car; and 55 percent indicated that student loan debt affected their decision or ability to purchase a home.

A lot of recent research has pointed to student debt as being a crisis for only certain portions of the student population, such as those who attend for-profit institutions or drop out before completion. However, large swaths of our "Life Delayed” survey respondents from all institution types reported having difficulty with their debt.

The study, which gathered information from student loan borrowers who have graduated or left school,​analyzes responses not only in the aggregate but also by school type and credential earned.

Results are provided for borrowers who attended community college and four-year public and private school for undergraduate study, as well as for graduate borrowers and those with professional degrees like law school and medical school degrees.

Community college students faced the biggest challenge, with 49 percent saying it is difficult or very difficult to make student loan payments, while 48 percent of private institution borrowers and 40 percent of public school borrowers said they faced similar challenges, according to the study. Forty-three percent of graduate school borrowers said they find it difficult to pay student loans each month.

While many student debt studies focus only on borrowers in the direst of circumstances – those in default or severely delinquent with payment – this study examines more broadly how education debt causes borrowers to sacrifice other aspects of their financial well-being.

For example, a majority or near-majority of alumni who borrowed for undergraduate study said their student debt has affected their ability to put savings aside for an emergency fund or for retirement. Similarly, 41 percent of graduate borrowers said they do not have any emergency savings, and 61 percent of graduate school borrowers say that student debt has affected their ability to save for retirement.

On a positive note, the study found that 65 percent of borrowers still believe a college education is worth the investment, despite the debt. A majority of borrowers, though, said they were either unsure they would have made the same college choice or definitively would not have made the same choice to attend their alma mater, if they knew then what they know now about loan repayment.​

So what does all this tell us about the state of student debt in the U.S. today, and what can we do about it? First, while higher education is still a great investment, we should recognize that there are downsides if a more highly educated generation becomes a more indebted one.

The impact of student debt goes far beyond whether individual borrowers can keep up with their student loan payments; there are ramifications for borrowers' short-term personal finance decisions and long-term financial security – which in turn broadly affects our consumer-based economy.

Second, just as student debt affects us all, solving the student debt challenge will require input from all walks of life. The study​ puts forth a number of solutions, from colleges doing more to control costs and providing better financial education during and after school, to state governments investing more in higher education, to the federal government lowering student loan interest rates, and to employers stepping up to help employees pay down their education debt.

Consumers have a role to play, too, in the solution – and they don't have to wait for any of the above policies to take hold.

Respondents overwhelmingly reported not being prepared for borrowing student loans. Only 38 percent said that, prior to entering school, they fully understood the amount of debt they would be taking on. If you're thinking about borrowing in the near future, make a commitment to become a proactive, empowered consumer of higher education rather than a passive financial aid recipient.

Use tools that the Education Loans has highlighted to find the best college fit academically and financially, and learn ways to maximize free money and federal aid before borrowing.

If you already have student debt, explore all your options to make repayment more bearable.​

Ultimately, the more you understand how to take control of your education debt, the less you'll have to sacrifice in your overall financial security.

Source: (https://educationloansinindia.wordpress.com/2016/01/21/education-loans-student-loan-borrowers-delaying-other-life-decisions/)

The true size of the student debt crisis

Education loans 

High Balance Student Loan Borrowers Skirt Default, Still Struggle

Recent numbers from the Federal Reserve Bank of New York have spurred lots of stories about the fact that low-balance student loan borrowers, those with debts less than $5,000, struggle more with repayment than high-balance borrowers. High-balance borrowers, those with $50,000 and more in education loan debt, tend to be those who borrowed for both undergraduate and graduate school study.

It’s true that borrowers with less student debt actually default in higher numbers. Borrowers who drop out of college rack up less debt because they’re not in school for as long. Without a degree or certificate, these borrowers are less likely to earn the income needed to retire the debt and, therefore, are at a higher risk for default.

The Federal Reserve numbers show that more than 30 percent of borrowers who left school in 2009 owing less than $5,000 in student loans experienced a default. On the other hand, that same study shows only about 15 to 20 percent of the high-balance borrowers of the 2009 cohort have defaulted.

But just because these individuals don’t default, it doesn’t exactly mean repayment comes easy.

In fact, according to the Federal Reserve, "borrowers who start out owing more than $50,000 are at risk for bad outcomes almost to the same extent as small-balance borrowers owing less than $5,000." That’s because default, which doesn’t officially occur for federal student loans until 270 days of nonpayment, isn’t the only bad outcome.

Being behind on your monthly payments can damage your credit record, making it harder to secure employment, rent or buy a home, purchase a car, or access other forms of credit. The Federal Reserve

study of the 2009 cohort shows between 10 and 15 percent ​of high-balance borrowers fell behind on payment for four months or more.

Another not-so-great outcome for borrowers is the failure to pay down debt. According to the New York Federal Reserve, "of high-balance borrowers, 22 percent have student loan balances higher in 2014 than they did in 2009, even without ever falling into severe delinquency or default." It also noted that balances continue to grow as borrowers make payments that don't keep up with the accruing interest.

That’s not always a worst-case scenario for the borrower. More and more high-balance borrowers are beginning to take advantage of income-based repayment programs that require only small payments tied to income and forgive any outstanding balance after 10, 20 or 25 years.

Taking advantage of income-based repayment plans ​can help borrowers more effectively balance education debt payments with other financial priorities. It’s definitely better than letting student loans slip into delinquency and default. But it can also mean holding an increasing load of debt on your credit record, which could diminish your chances of securing other types of credit.

The use of deferments and forbearances to postpone payment of a federal student loan is another reason a borrower’s balance could be increasing over time, but not going delinquent. Deferments and forbearances can be lifelines to borrowers facing imminent delinquency or default, but they can also result in added interest over time, as well as capitalization – the process whereby accrued interest is added to the principal balance and interest is then charged on the new larger balance.

Deferments, and especially forbearances are, often the path of least resistance as far as requirements and paperwork, but they’re also not usually the best long-term solution.

If you’re using a forbearance to stall repaying your loan because you can’t afford it – and you don’t expect your financial situation to change in the near future – contact your servicer and switch to a different payment plan. As mentioned above, the income-based repayment options may still not amortize your loan, but at least you’ll be working toward that forgiveness.

All this isn’t to say that borrowing for graduate school is a bad idea. That’s a personal decision that every potential graduate student must weigh carefully and consider all the pros and cons, financially and otherwise.

But it does mean that graduate students need to be aware about the ramifications that go into increasing their overall education loan balance. And policymakers need to look at the entire range of study loan repayment outcomes and not limit their definition of struggling to only those borrowers in deepest distress.

According to the New York Federal Reserve, nearly 10 years out of college the 2005 cohort of student loan borrowers has paid down only 38 percent of its original student debt. Those are numbers that could impact us all if they stunt our economic recovery.

Source : 

https://educationloansinindia.wordpress.com/2016/01/19/high-balance-student-loan-borrowers-skirt-default-still-struggle/

Explore Congressional Budget Proposals' Impact on Student Aid

It’s that time of year again – budget season. In the last week or two, both the House of Representatives and the Senate have released and passed budget blueprints for the 2016 fiscal year.

While this may not seem remarkable, if you consider the last few years of continuing resolutions, fiscal cliffs and government shutdowns, the fact that the Senate passed their first budget in six years is pretty noteworthy. Here's what this means to current students and federal student loan borrowers:

Before any changes can take place, the House and the Senate will have to work out the differences between their two budget proposals. Those negotiations will likely begin after the two-week recess, which started this week.

The resulting budget resolution does not require President Barack Obama’s signature – more on that later – and therefore is not binding. But it does set a blueprint for the appropriations process over the coming year.

Both the House and Senate proposals contain reconciliation instructions, which require one or several Congressional committees to pass legislation to meet budgetary goals. This is where there is likely to be significant changes to federal aid programs if there were going to be any.

Education Changes Are on the Table

Both the House and Senate have stated goals to reduce and eventually eliminate the federal deficit over the next 10 years or so. Most of this is achieved through cuts in discretionary spending and an overhaul of entitlement programs, including higher education.

Both the House and Senate proposals, for example, would freeze the maximum Pell Grant award at $5,775 for the next 10 years. While the Pell program is currently in a surplus, a freeze could mean fewer grants available to students in future years.

The House also indicated that ending the in-school interest subsidy on Stafford loans, rolling back the expansion of the Pay As You Earn program and terminating the Public Service Loan Forgivenessprogram were on the table. Such cuts would save an estimated $60 billion.

While not explicit, the proposal also seeks to "streamline programs that provide aid to make them more effective," an indication that the House may seek to consolidate aid programs deemed duplicative and that serve the same constituencies.

New Amendments and Proposals

During the Senate’s 15-hour voting session last week, several amendments were passed related to higher education. Senator Richard Burr, R-N.C., offered an amendment to streamline the myriadincome-driven repayment options to either a 10-year or single income-based repayment option. The simplification of income-driven repayment options is an idea we also saw in the president's budget proposal, released in February, and in several Higher Education Reauthorization Act proposals.

Other amendments recommend allowing additional Pell Grant payments during an academic year and simplifying higher-education-related tax credits. A few other proposals, while not explicitly mentioned in either the House or Senate blueprints, may be up for grabs as the budget goes through that reconciliation process.

For example, the president’s budget proposal recommends capping the Public Service Loan Forgiveness program at the federal borrowing limit for independent undergraduate students, which is currently $57,500. It also suggests streamlining higher education tax credits and deductions to a single credit and/or deduction rather than the multiple options available now.

What This Means for Borrowers

Before Educational loans borrowers panic, it’s important to remember that some of these proposals have been on the agenda for years without gaining any traction. With that said, the climate is different this time around as the Republicans currently hold a large House majority while also leading the Senate. There is also a significant push to reduce the federal deficit – which is rarely good news for entitlement programs.

Still, don't panic. Historically, any changes made that affect borrowers’ eligibility for forgiveness, lower payment or deferment options grandfather in borrowers who are already eligible for those programs. This means that any changes made as a result of this or any other Congressional action will likely only affect future borrowers.

But this doesn't meant that if you are borrowing now you can rest easy and take the maximum allowed, assuming you’ll be eligible for forgiveness in the future. Even with the rules written as they are now, taking on debt assuming forgiveness later is always a terrible strategy. But borrowers in these programs now can almost certainly be confident that they won’t be taken away.

Source: (http://educationloanformba.tumblr.com/post/137544397215/explore-congressional-budget-proposals-impact-on)

Understand Financial Aid, Payment Options for Summer Classes

Congratulations, undergraduates. You made it to April!

Now, you’re likely bracing for finals, finishing semesterlong projects or sweating how little time you have for either task. Classes are the first thing on your mind, yet enrolling in more of them may be the last thing you’re thinking of. That could be a mistake.

While April is an important milestone in the spring semester, it’s also the gateway to the summer college semester. If you’re interested in taking summer classes at your school or a different location, you should get everything in order now. And that includes how you plan to pay for them.

The Value of Summer Classes

A lecture hall is likely near the bottom of your list of preferred summer destinations. After a long year in school, many students prefer to use their breaks to recharge, not re-enroll. In addition, the summer months offer a great opportunity to work a full-time job and earn money to pay for the upcoming year.

However, enrolling in summer classes can actually be a smart way to decrease college costs. For one, the classes themselves can be cheaper, especially if you opt to attend a less expensive community college. You'll just need to make sure any credits transfer.

Additional costs could be less expensive too. For instance, since fewer people enroll in the summer, you’ll likely have an easier time finding affordable, used textbooks.

The biggest potential savings come from accelerating your graduation date. By taking summer credits throughout college, you could shave a term or even an entire year off your education. That not only

equals savings in the form of tuition payments, but it also cuts down on room, board, and other living expenses, not to mention getting you into the workforce and earning a salary faster.

Ways to Pay for Summer Classes

While classes may be less expensive in the summer, they still won’t be cheap. To pay for them, you’ll first want to exhaust your free money options. Scholarship providers offer opportunities year-round, and your school or state may have grants just for summer classes. For example, Pennsylvania has a summer grant program for in-state students.

In addition, you may be able to receive federal Pell Grant funding. While the year-round Pell Grant program was eliminated in 2011, you may be able to use this aid for a summer semester. However, this will depend on whether you’ve already received your full annual award amount or maxed out the full 12 semesters allowed.

Other types of federal student aid, such as Perkins, Stafford and PLUS loans, work similarly. The amount of each you received in your award letter is meant to cover a full academic year. If you already reached the annual maximums for these different types of aid, you won’t be able to use them to fund a summer semester. If that happens to you, you can shop around for a private student loan to cover your enrollment costs.

Your Next Steps

Ask your school’s financial aid office about its different summer funding options, whether they require a separate summer loan application – many do – and its definition of an academic year. For most schools, the academic year begins with the fall semester and ends with the summer semester, though some begin with the summer semester and end with the spring.

Depending on their answer to that last question, you’ll need to complete either the 2014-2015 or the 2015-2016 Free Application for Federal Student Aid if you haven't already. This will allow you to receive your federal student aid for the summer, either the amount remaining on your 2014-2015 award or the amount you’re eligible for in the upcoming year.

This information will also help you figure out how to best allocate your aid in the future. That’s because if attending summer classes is part of your larger college plan, you’ll want to review your annual federal Education loans maximums and plot out how much you’ll need for each semester.

Remember, you don’t have to accept the full amount that your school awards you. Consider turning part of that aid down, replacing it with a different funding source and saving the remainder for a future semester. If you’re unsure how much federal student aid you’ve received in a given year or overall, you can find out by visiting the National Student Loan Data System.

Source: (https://educationloansinindia.wordpress.com/2016/01/16/understand-financial-aid-payment-options-for-summer-classes/)

What to Expect Filling out the FAFSA for the First Time

If you're a high school senior, or the parent of one, January is when you should start thinking about filling out your first Free Application for Federal Student Aid, or FAFSA. Having an idea of what to expect in a financial aid package can go a long way in making the decision as to which college will be the best fit. While state and institutional aid options vary significantly, you can at least get an idea of what you can expect to receive under the various federal student aid programs.

Some, but not all, federal aid types are based on "need." Need is defined in federal statute as the difference between the FAFSA-calculated expected family contribution and the school's cost of attendance. So if your school of choice has a cost of attendance of $20,000 and your expected family contribution is $15,000, your "need" will be $5,000.

Need-Based Aid

There are three types of federal need-based aid: grants, subsidized loans and work-study. If you have need as defined above, you may be awarded one or all of these types of aid, but you cannot be awarded more than what shows in the need calculation.

Grants are some of the best kinds of student aid in that they do not need to be repaid. The Pell Grant is the most well-known federal grant and is awarded at the undergraduate level, with exceptions for some higher-level teaching certificates, to students who have not yet achieved an undergraduate or professional degree. The annual limit for the Pell Grant for the current academic year of 2015-2016 is $5,775. ​​The amount you receive will depend on your financial need, the cost of attendance at your school of choice and whether you are a full- or part-time student.

A lesser-known type of grant is the Federal Supplemental Educational Opportunity Grant. Unlike the Pell Grant, which is awarded to every eligible student, these funds are given to schools in limited and varying amounts. The grant is awarded in amounts between $100 and $4,000 to the neediest Pell Grant-eligible students. Because of the limited nature of this grant, it's important to get your aid applications into your school of choice by the posted deadlines, to ensure that if you are eligible, money is still available.

If you must borrow to attend school, Perkins and subsidized Stafford loans are often the most desirable loans in that they do not accrue interest while the student is in school at least half time. All Perkins, and most subsidized Stafford loans, also do not accrue interest while in their grace period or while in deferment.

The Perkins loan program is another limited funds program, and not all schools participate. Congress is intent on winding down this loan program, so if you haven't been awarded a Perkins loan in the past, the chance of being awarded one now is much slimmer. Every school has different income criteria, and generally award funds to only those with the greatest need. Undergraduate students may receive up to $5,500 per year, while graduate students may be eligible for up to $8,000 per year. Aggregate loan limits are $27,500 and $60,000, respectively.

The subsidized Stafford is not a limited funds program, so if you are an eligible undergraduate, you will receive the maximum allowed. ​You must be attending at least half time to receive Stafford loans of any kind, like with Perkins loans,​ and the amount awarded depends on your​ need, grade and dependency status.

Non-Need-Based Aid

One of the big myths about federal student aid is that there's an income cutoff,​ and that's simply not true. If you have no financial need according to the FAFSA calculations, or if you've maxed out the need-based aid you are eligible for, unsubsidized Stafford, graduate and Parent PLUS loans can fill the gap.

Unsubsidized Stafford loans have almost the exact same terms as their subsidized brother, but interest does accrue from the moment these are disbursed. While not required, you can pay that interest while in school. All Stafford loans become due six months after the student becomes less than half time in school or graduates. ​You cannot receive student aid beyond the cost of attendance of the school you are attending.

Graduate PLUS loans are for graduate students only. There is no aggregate limit, and the annual limit is the cost of attendance minus other aid. There is a mild credit check required for these Education Loan in India, but unqualified borrowers can obtain an endorser to gain access to this resource.

Unlike the loans we've talked about so far where the student is the borrower, Parent PLUS loans are different in that, as the name suggests, the parent of the undergraduate student is the borrower. There is also no aggregate limit and the annual amount is only limited to the cost of attendance minus other financial aid.

Before accepting any type of financial aid, it's important to fully understand the details on the terms and the full requirements for each program. If borrowing is part of a financial aid plan, families should also think about the total borrowing needed to achieve the desired credential, and understand what that will translate into for monthly payments down the line.

Source: (http://educationloanformba.tumblr.com/post/137341452820/what-to-expect-filling-out-the-fafsa-for-the-first)

Things you should know about student loan dept

4 Things to Think About When Refinancing Student Loans

If you want to take out a student loan, you need to sign a promissory note. This is essentially a contract. By signing it, you promise to repay the amount you owe plus interest, among other terms and conditions.

Students often sign their promissory notes without thinking too much about this promise. Of course, when they go from borrowing that money to actually repaying it, their point of view often shifts. Their goal becomes changing the previously agreed-to terms, especially that interest rate increasing the amount they owe.

Seemingly, the most straightforward way to do this is refinancing the loan at a lower interest rate. A lower rate means less interest, which sounds great. However, it’s far from the only consideration when refinancing. Here are four others to know.

1. There is no federal refinancing. Congress sets the interest rate for federal student loans, and most of these rates are fixed by law, no matter how solid your credit or income becomes postgraduation.

You may be able to refinance your federal student loans into a private loan. The same goes for refinancing a private loan into a new private loan, too. However, you cannot refinance federal or private student loans into a federal loan.

Some legislators have proposed making this an option, but it does not currently exist. You may think you’re doing this by consolidating your federal student loans, but that’s not the case.

2. Consolidation and refinancing are different. Many borrowers think consolidating their loans will lower their interest rate the same way that refinancing would. This confusion is common because these

options are similar: Both replace your old loans with a new loan with new terms. However, a federal loan consolidation won’t lower your interest rate, even if it seems like it did.

Federal consolidation loan interest rates are the weighted average of the interest rates of their underlying loans, rounded up to the nearest one-eighth of a percent. The result is a rate that may be likely lower for some of your previous loans, while also being higher for others. In short, the weighted average means that things mostly just balance out.

Consolidation has its benefits. For instance, you can choose the servicer you wish to work with, as well as potentially qualify for additional repayment and forgiveness options. But you won’t get a lower interest rate.

3. Refinancing will change your loan's terms. When you refinance a loan, your interest rate may decrease, depending in part on your credit score or whether you have a cosigner. That drop is the large font headline for choosing this option. However, other changes are in the fine print.

As mentioned above, a refinanced loan is a new loan, with new terms and new conditions. That means your new, low interest rate could increase. It also means your old loans go away. And the latter is important with federal student loans.

Federal student loans come with protections that can help you if you’re struggling with your payments. You may be able to use repayment plans that decrease these amounts or put them on pause altogether.

You also may qualify to have loans forgiven under certain criteria. Most private loans do not offer options like these, and once you replace your federal loans with a private loan, you cannot move or consolidate the loan back into a federal loan to get these benefits.

Postponements and forgiveness may not seem as important as slicing your interest rate, but take the long view. Calculate how much you’ll save with a lower interest rate. Is it hundreds or even thousands?

Next, consider how much those protections are worth to you, not only right now but also if you lost your job or faced a different financial emergency. Think about if you would you sell them for the amount you’ll save or whether you have a large emergency fund saved. Your answer can help you figure out if refinancing is right for you.

4. There are other ways to reduce interest. If you have federal student loans and want to keep their protections, you may have options other than refinancing to lower your interest rates, so explore those first. Many servicers will reduce your rate if you enroll in automatic payments.

They also may do the same if you make a set number of on-time payments in a row. Call your servicer, and ask it they offer these benefits or others.

In addition, consider paying extra every month. There is no penalty for prepayment with federal Educational loan, and paying off your loans faster can reduce the amount of interest you pay overall, even if your rate stays the same.

Ultimately, these reductions may not subtract as much from your monthly payments as refinancing would. Still, add these benefits to those from keeping your loans in the federal student loan program. The result may end up making more sense for you overall.

Source: (http://educationloanformba.blog.com/2016/01/13/jayant-2/)

What Borrowers Can Expect From the New Income-Driven Repayment Plan

Back in the spring of 2014, President Barack ​Obama's budget request proposed expanding the Pay As You Earn​ income-driven repayment program, with some caveats, to more federal student loan borrowers.

Several months later, the president strengthened that request by issuing an executive order requiring the Department of Education to promulgate regulations to implement that expansion no later than the end of December 2015.

To fulfill that order, the Department of Education initiated a process called negotiated rulemaking this past fall. This process is required under the Higher Education Act and entails a series of public hearings, meetings with constituents of the parties that will be affected by the proposed regulatory changes and a sometimes extensive public comment period. This Student Loan Ranger attended these sessions. The goal is to obtain consensus on several proposed regulatory changes although consensus is not required.

A consensus was reached at the most recent session. Here's what will be offered for public comment, and likely implemented, later this year or early next year.

Currently, all federal loan borrowers other than Parent PLUS and Perkins borrowers are eligible for the traditional income-based repayment plan that caps payments at 15 percent of their discretionary income and forgives any balance remaining after 25 years.

Direct loan borrowers who only have loans made after October 2007 and who have borrowed since October 2011 are also eligible for Pay As You Earn, which caps the payments at 10 percent of discretionary income and forgives the balance after only 20 years. The new plan, tentatively called

Revised Pay As You Earn – or REPAYE – will likely feature the following attributes, though things could change due to public comment expected to be solicited sometime this summer.

All direct loan, ​Stafford and Graduate PLUS borrowers will be eligible for Revised Pay As You Earn, regardless of when they took out their loans. Parent PLUS loans or consolidation loans containing Parent PLUS loans will not be eligible. Other federal loans, other than parent PLUS loans, will in most cases be able to consolidate into the direct loan program to use the new plan. This option is allowed today for Perkins Loans under income-based repayment and Pay As You Earn.

• Payments under Revised Pay As You Earn will be no more than 10 percent of the borrower's adjusted gross income, minus 150 percent of the poverty guidelines for their family size. Borrowers with negative results from this calculation will have a payment of $0 per month.

• If a borrower is married, both spouses' incomes will be taken into consideration, whether they file their taxes as married or separately. Other income-driven plans exclude the spouse's income if the couple files taxes separately. Exceptions will be made for victims of domestic violence.

• If a borrower only has undergraduate loans under the new plan, forgiveness of any remaining balance will occur after 20 years on the Revised Pay As You Earn plan. Borrowers with graduate loans, or both undergraduate and graduate loans, will enjoy forgiveness after 25 years. Both forgiveness benefits will be taxable as income, as with the other income-driven repayment plans.

• If borrowers' Revised Pay As You Earn payments do not satisfy monthly interest accrual, any interest not covered by the payment will be reduced by 50 percent.

• Payments made under the revised plan count toward the 120 payments needed for Public Service Loan Forgiveness. There were no other changes made to the forgiveness program during this negotiated rulemaking.

Speaking of the PSLF, last week the House and Senate passed a conference agreement on the 2016 budget resolution that sets tax and spending priorities for the upcoming fiscal year. While the PSLF was not mentioned specifically, the agreement does reduce spending over the next 10 years on education, social services, training and employment by $162 billion.

There is speculation that these savings may come from eliminating the expansions to the income-driven plans, the in-school subsidy for undergraduate Stafford loans and public service loan forgiveness – remember that this is only speculation and historically, Congress has grandfathered in existing eligible borrowers whenever they have changed or eliminated a program or benefit in the federal aid programs. We'll be sure to keep you posted.

There was discussion at the negotiated rulemaking meetings that at some point in the future, the desire is for Revised Pay As You Earn to be the only income-driven repayment plan offered to new borrowers. There is currently no discussion of eliminating the current plan availability to existing borrowers.

What the Educational Loan Ranger loves about the negotiated rulemaking process is the fact that anyone can participate. If you have an opinion about these proposed changes, keep an eye out this summer for a Federal Register Notice of Proposed Rulemaking that will outline these proposals and ask for public comment. The process rules require the Department of Education to read and respond in a later publication to all comments and questions received, so your opinion does matter.

Source: (https://educationloansinindia.wordpress.com/2016/01/12/what-borrowers-can-expect-from-the-new-income-driven-repayment-plan/)

The facts you need to know about Student loan

3 Surprising Student Loan Repayment Facts

We've reached the end of another school year, which is always a great time for any student to look ahead. One topic perfect for this is student loans, especially if you're not returning to school in the fall.

Federal student loan borrowers receive a grace period before their first payments are due. Yet, when that first bill arrives, many have the same reaction: surprise. They're not only surprised that their payments are due, but they're also surprised at just how expensive they are.

The idea of how interest works challenges many people – not just student loan borrowers. But in short, while you were in school working on your degree, interest was hard at work too, potentially increasing the amount you owe. Understandably, this is not a fun surprise for students. However, that doesn't mean that "fun" student loan surprises don't exist – although they may be just "fun" to the Student Loan Ranger.

SALT recently pulled together an infographic of 25 surprising student loan facts. Let's dig into three of the most interesting ones. If you're surprised as to how much you owe, these facts can help you successfully manage your debt – whether you just started repayment or not.

Fact 1: If you have an unresolved federal student loan conflict, you can contact the federal Ombudsman for neutral help.

Dealing with student loan issues can feel overwhelming. So much information is out there, and so many resources can help you make sense of it all – or do the exact opposite.

Fortunately, as a borrower, you have an ace up your sleeve. One place will always offer you neutral assistance: the federal student loan ombudsman. OK, two places — the ombudsman and the Student Loan Ranger.

According to the U.S. Department of Education, the ombudsman is "a neutral, informal, and confidential resource to help resolve disputes about your federal student loans." If you have a loan dispute that you simply can't resolve in any other fashion, contact the ombudsman. Such disputes could include discrepancies about federal loan balances; issues related to default, bankruptcy, tax offsets and other concerns; and questions about postponement, discharge and forgiveness requirements.

Fact 2: Some employers offer benefits that can help you manage your student loan debt after college.

Odds are, you're familiar with companies helping pay for their employees to gain additional schooling. Employers see this as a way to invest in their people, with the return on that investment being employees who improve their skills, move up in the organization and do more work for them. However, some employers will pay for your education after you complete it – and not just via tuition reimbursement.

Some employers offer loan repayment assistance programs, known as LRAPs, or other loan repayment benefits as part of their total compensation. These plans may provide a stipend to employees to help cover their loan costs, or they may reimburse employees for loan payments they've already made.

To find out if your company participates in such a program, contact your human resources team. This benefit is something this Student Loan Ranger has used firsthand, and based on that experience, we can vouch for just how helpful it can be.

Fact 3: In extreme cases, student loan borrowers can reduce their payments to as little as zero dollars per month.

Federal student loan borrowers may be eligible to take advantage of a number of different income-driven repayment plans.​ These plans can seriously shrink your payments, based on your income and your family size.

What some borrowers might not realize, though, is just how small a payment can actually be. If you qualify for income-based repayment or Pay As You Earn, you could actually pay zero dollars per month – but you don't have to send in a check or anything.

Qualifying for zero dollar payments has its pros and cons. On the downside, paying less each month means you could pay more overall, as your loan will have more time to accrue interest. On the bright side, IBR and Pay As You Earn both offer Education loan for MBA forgiveness after you make a specific number of eligible payments, and zero dollar payments are considered eligible.

When deciding to switch repayment plans, you'll want to calculate how exactly it will affect you, now and in the long run. Decreasing your payments ultimately may not make sense for you, but it's still a nice, surprising option to have if you need it.

Source: (http://educationloanformba.blog.com/2016/01/11/jayant/)

Pay now, Save later

Limit Student Loans with Tuition Plans to Pay for College

For students heading back to school in the fall, summer vacation is a great opportunity to take a break from all of college's in-classroom stuff. Unfortunately, it's not as easy to get away from all of the out-of-the-classroom responsibilities – especially how you're going to pay for school.

At this point in the year, you should have received your financial aid award letter​ for the upcoming academic year. Hopefully, it includes enough scholarships, grants and federal student loans to cover 100 percent of your costs. If it doesn't, you're going to have to figure out how you want to fill the much-dreaded tuition gap.

Many students turn to private or alternative student loans from banks to bridge their gaps, and these are certainly a viable option provided you ask the right questions before signing on the dotted line. However, the Student Loan Ranger wants you to know you may have other options to avoid loans altogether. Yes, it's ironic. We know.

While fewer loans might mean less to write about for us, it would definitely mean a lot more happy college graduates. So, with that in mind, let's run through a few different options students and parents should consider before turning to student loans to cover a tuition gap.

Tuition Installment Plans

Many schools offer tuition installment plans to their students. Colleges sometimes call these tuition payment plans. These plans will split students' bills into equal monthly payments, often over a 10-month period or on a per-semester basis.

Some people use these plans to pay their entire tuition costs. For instance, let's say your school costs $18,000 a year. Instead of paying that lump sum through loans, you'd pay the school $1,800 a month for 10 months.

Of course, $1,800 a month is a lot of money. However, your monthly bills won't be as large if you use these plans to cover a tuition gap, rather than the entire tuition.

Let's say your school costs $18,000 but you've covered $12,000 of it through grants, scholarships and federal loans. That leaves you with a $6,000 tuition gap. Instead of borrowing a private loan and potentially paying interest and fees on that amount, you could opt for a tuition installment plan which would cost you $600 a month over the 10 month period.

Is It Worth It?

So $600 is still a decent amount of money to pay each month. However, it's also a more attainable amount, especially compared with what a private loan would cost you in repayment down the line.

For comparison, let's say you took out a $6,000 loan with a 9 percent interest rate and a 10-year repayment term. When you entered repayment on this loan, your payments would be about $76 a month.

Of course, that number isn't the key thing to look at in this equation. You want to pay attention to your time in repayment. You'd pay the $600 over 10 months and the $76 over 120 months. Over that duration, the private loan would cost you more than $9,000, meaning you'd pay your 150 percent of the original balance thanks to interest.

What to Watch For

Most tuition installment plans are interest free, but some do have fees or other charges. Before you commit to a plan, talk to your school about these costs.

Also, be aware of possible penalties if you fall behind on your payments. Make sure you know how much extra the school charges you, or if they will block you from registering for the next semester.

In addition, you may be able to have these bills directly debited from your bank account. Whether you choose that option or not, you will want to be sure you have a plan for covering your monthly payment amounts.

Additional Funding Options

When it comes to paying for school, you can't beat scholarships, since you don't have to repay them. Many scholarship organizations cut their winners a check, allowing them to use the funds toward eligible costs as they see fit. That means you could even use this funding toward loan payments if you already went that route.

In addition, you could consider putting the money owed on a credit card, with a few caveats in mind. First, you have to have a credit limit to support the amount you owe. Second, you'll want to choose the card wisely.

Sign up for one with a zero percent interest promotion, and have a plan to pay off the debt before that limited-time rate spikes. Otherwise, you could end up owing more than if you'd borrowed a Student loan, only much sooner and without potential repayment benefits.

Not all schools accept credit cards for tuition payments. And if they do, they may come with a 2 percent to 3 percent fee. On the plus side, the cardholder may earn reward points that defray those costs; you'd want to check your cardholder agreement to see if these payments would be eligible.

This is a risky option, and it likely makes more sense for parents with steady incomes and credit histories who are helping their children with tuition.

Source: (http://www.usnews.com/education/blogs/student-loan-ranger/2015/06/17/limit-student-loans-with-tuition-plans-to-pay-for-college)

How to get an Education Loan in India

Many of us are used to the idea that our parents are going to pay for our education. However, this may be difficult in many cases if you are opting for super expensive professional studies. A model has emerged now under which students go to expensive colleges that lead to good recruitment, making it easy to pay for the educational loan when the student is finally employed.

Education has been commoditized and studying from the top-notch B-school or law school adds to the professional skills in your portfolio and gets you a placement for a good desk job. But often such placement-guaranteed education comes at a great price. The only option when you don’t have the moolah then is to take an education loan, with the hope that you shall be in a position to pay it back from your earnings after graduation.

Understanding Education Loan

An education loan is a form of credit advanced to scholars and students; it is designed to help students pay for college tuition, books, laptops, hostel fees and other living expenses. It differs from other types of loans in that the interest rate is often substantially lower than most other loans and the repayment schedule is deferred while the student is still in school. It is priority sector lending for bank and also often relatively profitable – so most banks offer educational loans in large numbers.

An educational loan looks like a noble endeavour, but banks cannot afford to grant you the loan without assessing risks involved. Since you aren’t going to start repaying the loan for at least 3 years (5-6 years in case of law students) from the issuance date, the bank is investing in something that isn’t going to start repayment for quite some-time in the future. So, they will be cautious and extra careful when someone asks them for an education loan.

And still, getting an education loan should be a piece of cake compared to the effort you shall put into getting through a good college, B-school or law school. It can be a blessing for those who want to study and achieve their goals but do not have the money to pay.

Where does it come from?

Good question indeed.

Not everyone can offer a credit which you are going to return after n number of years. Here in India almost all the Public Sector banks offer Education Loan.

Some of the nationalized banks such as SBI group have special programmers, some of them are:

Lower interest rates for girls, SC, ST, disabled.

Lower interest rates for toppers, etc.

Taking education loan in India from government bans like SBI, Corporation Bank or UCO Bank is advisable because private banks impose stricter and more difficult conditions for educational loans.

Requirements:

Some banks have restrictions like:

The student or the guarantor should have a valid bank account for at least 6 months,

or the residence must be within 2 km from the bank branch, and so on.

The documents required may change from bank to bank, time to time. Usually the following will be asked for:

Mark sheets of your last qualifying exam

Proof of admission into the college

Schedule of expenses for the course

Photographs (Usually passport size)

Bank Account Statement of the Borrower for the last six months (If Applicable)

Income tax Assessment statement of the guardian (Parents or Guardians)

Statement of Assets & Liabilities of the co-borrower (Parents or Guardians)

Proof of Income of the Guardian

Identity Proof like Driving License, Passport or Voters ID for both the student and the Guardian

Address Proof like Ration Card or Electricity Bill etc.

The list above is not exhaustive but it covers most of the documents that may be required to get an education loan. So, it is your responsibility to perform the entire requisite due diligence to ensure that you know what the bank will ask for when you go to them for the loan.

Important Do’s and Don’ts for Education Loans

An education loan is a long term financial commitment, certain things are important and you need to remember them. They are:

Do thorough research while applying for an education loan.

See if your requirements match with the requirements of the bank.

[Source: http://blog.ipleaders.in/how-to-get-an-education-loan-in-india/]

The finer points of the deduction on educational loans

There are tax benefits available to an individual on an education loan but while the overall benefits are simple there are a lot of details that need to be understood while actually claiming the benefit. It should not be that the individual is denied the benefit due to some technical point or some smaller condition not being fulfilled. The overall benefit is that there is a deduction for interest paid on education loan. There is no ceiling on the interest benefit though the principal repayment does not qualify for the tax benefit. Here is a look at the other details that will help the individual to get the tax benefit.

Individual taking the benefit

The first thing is that the benefit of the education loan interest deduction is available only to an individual and not some other entity. Often the education loan in India is taken by an HUF or some other entity but in this case the tax benefit will not be available as only an individual can make use of its benefit. The other point is that the loan should be taken for the pursuit of studies by the individual and his family. This will include the individual plus the spouse and children. Also the children for whom the individual is a legal guardian would be covered under the conditions.

Income chargeable to tax

There is an important condition with respect to the repayment of the loan for the deduction to be available. This is that the amount has to be repaid from the income chargeable to tax. In simple words this means that the individual cannot repay the amount from some tax free receipts and claim the benefit. It has to be paid out the income that is taxable. This is a tricky detail because often there could be a situation wherein some lump sum that is not taxable is used for the repayment in which case the amount can be disallowed. This is one area where some care has to be taken.

 Entity from whom taken

There is also a condition with respect to the entity from whom an education loan will be eligible for a deduction. This has to be taken from a financial institution or an approved charitable institution. This will cover all the banks and other big financial institutions and also the charities that are registered with the Income Tax Department so the choice is quite wide on this front. This however excludes friends and relatives from whom often a loan is taken as the amount of interest paid to them would not be covered for the deduction. The individual can take a loan from them but the tax benefit would not be available so this needs to be considered.

Higher studies

It is also not that any kind of course or study would be covered for the purpose of the education loan for ensuring that the tax benefit is present. This has to be higher studies which is defines as a course after the completion of Senior Secondary Education or its equivalent from any school , board or university that is recognized by the central government, state government or local authority. This definition is quite wide and it will include most of the professional and other post graduate courses for which a lot of people take loans. Once these detailed conditions are known then the individual can ensure that they are able to plan and take the loan properly that will give them comfort as well as convenience.

[Source: http://www.moneycontrol.com/news/tax/the-finer-pointsthe-deductioneducational-loans_4784581.html]