Federal PLUS loans are offered to parents to complement other student loans provided directly to the students. These loans are usually awarded because Federal student loans are granted with the idea that parent will contribute to the student’s studies financing and thus, the amount offered on students loans isn’t usually enough. Therefore, for parents who can’t complement student loans with savings, PLUS loans come in very handy.

Yet, this was the original idea of PLUS loans. However, since these loans are not awarded according to the needs of the applicant, there is no particular requirement as regards to the purpose. Therefore, using them for financing study abroad programs is an excellent choice and they have proven to serve the purpose very well. More and more parents are requiring these loans to pay for these programs every year.

Including Study Abroad Programs On PLUS Loans

It is possible to include study abroad programs on plus loans. (more…)

New York Attorney General Andrew Cuomo has launched an investigation into deceptive student loan marketing by issuing subpoenas to 33 lenders. The investigation extends the scrutiny of the student loan industry into how lenders communicate directly with students.

As U.S. News reported in April, dozens of lenders use mailings that mimic government documentation. Calling themselves official-sounding names such as “Student Loan Department,” some lenders stamp their envelopes and letters with eagle insignia or a book and leaves inside a circle within a circle, which is similar to the federal Education Department’s insigne.

Interviewed this spring, Greg Hassell, spokesman for Collegiate Funding Services—part of JPMorgan Chase, which received a subpoena from Cuomo—said its letters were not deceptive and that the insignia and “Student Loan Department” wording did not suggest the letters were from the government. (more…)

If savings, grants, scholarships, and federal loans don’t cover the cost of your education, it’s time to turn to private loans. But young college students can’t qualify for a private loan, can they Wrong! This article addresses this and other myths about student loans that you may run into. I don’t have any collateral, so I can’t get a private loan.

Private loans are usually unsecured, which means no collateral is required. On the downside, this may also mean a higher interest rate.

I don’t have a good credit history or no credit history at all

Since the government doesn’t back private loans, your credit history is a consideration in being approved for a loan. If your credit history is bad or non-existent, you may be subject to a higher interest rate. And remember, you can always get a co-signer. Pay your loan off on time, and soon you will have a good credit history!

I have enough funds for tuition and fees, so I can’t get a private loan

In addition to paying tuition and fees, funds from private loans can be used to cover living expenses, supplies, computers, and other everyday living needs. (more…)

On Spetember 27th, 2007, President Bush signed the College Cost Reduction and Access Act of 2007, which will make college more affordable for low-income students by increasing funding for Federal Pell Grants by more than $11 billion.

The Pell Grant program helps ensure low-income students have access to higher education by providing need-based grants to help students meet education costs. The bill the President signed today will expand this program by increasing funding for Pell Grants by $11.4 billion over the next five years and allowing the maximum Pell award to increase from $4,310 in 2007 to $5,400 by 2012.

* Since 2001, the Administration has increased funding for Pell Grants by nearly $5 billion dollars. The number of students receiving Pell Grants has increased by more than one million since the President took office. In addition, President Bush last year signed legislation creating Academic Competitiveness and SMART Grants to further reward Pell Grant-eligible students who completed rigorous high school programs of study, or who are majoring in math, science, engineering, or critical foreign languages. (more…)

According to a recent study, student loan debt is rising faster than starting salaries for new college graduates. The Project on Student Debt found that while average starting salaries from 2006-07 rose by 4 percent, student debt rose by 8 percent during the same time period.

“This study represents what is going on in the economy, as well as increasing college costs,” said
Esther Manogin, director of student financial aid.

The study found the average debt for North Carolina was $17,760 with 55 percent of college students in debt.

However, Appalachian State University students are in debt an average of $14,838 when they graduate and 49 percent have some form of debt.

The Project on Student Debt urged Congress to pass legislation that would help alleviate the cost of college and the amount of debt that college graduates would have. The legislation has been passed and signed into law by President George Bush. (more…)

September always means Back To School, and for thousands of families it also signals Off To College. In addition, more and more young people are opting to continue their education with post-graduate studies. Once a student is past the Mandatory - Freshman - Year - In - The - Dorm Policy that many colleges have, parents face an interesting dilemma: should they continue to shell out rent, or considering buying a property for their children to occupy while attending school.

Here is a TRUE Story.

In 1994, A young man decided to attend North Carolina State University. He enrolled in a combination Master/Ph.D. program. This meant he would be in Raleigh, NC for the next four -six years. After investigating the rental options in the area, his parents decided to help him purchase a townhouse.

This was the deal. A 3 bedroom, 2½ bath townhouse in close proximity to the school was bought for $72,500. Because the young man would occupy the property, he qualified for a minimum down payment, FHA mortgage. Because he had very little income of his own, a small living stipend offered by the University, he needed his parents to co-sign the mortgage. The total outlay of cash down payment and closing costs was approximately $5000, which the parents provided. The total mortgage payments were around $760. With the help of a local rental agent, the young man was able to quickly identify two other graduate students who wanted to share the house. They each paid $400 a month, and all shared the utilities. (more…)

According to the Bureau of Labor Statistics, the tuition component of the Consumer Price Index (CPI) increased by 8% per year, on average, from 1979 to 2001. This means that children born today will face college costs that are 3 to 4 times current prices by the time they matriculate.

Parents should expect to pay at least half to two-thirds of their children’s college costs through a combination of savings, current income, and loans. Gift aid from the government, the colleges and universities, and private scholarships accounts for only about a third of total college costs.

Accordingly, it is very important that parents start saving for their children’s education as soon as possible, even as early as the day the child is born. Time is one of your most valuable assets. The sooner you start saving for college, the more time your money will have to grow. (more…)

You need some more money for college expenses this semester. Do you whip out a credit card to pay for your books, or do you apply for a federal or private loan? Well, consider the options –

With a federal loan, your interest rate will be low around 5% and your payments will be deferred until 6-9 months after graduation.

With a private loan, the interest rate will be slightly higher than with a federal loan but will still be lower than average. In addition, you will only need to make interest payments until after graduation. (more…)