Archive for September, 2007
Thursday, September 27th, 2007
President Bush signed the law into affect. His major focus during the signing ceremony was the impact that it has on low to moderate income families. One of the benefits we love about the bill is that it is increasing the Pell Grant maximum up to $5400 per year. Pell Grants are offered as a need based grant that are not required to be paid back by the student. If you are in the process of consolidating, please check with your lender to make sure they are going to fund your consolidation loan. If not, you may be required to continue making payments on your student loans and begin looking for a new company to consolidate your federal student loans.
If you have any questions or need assistance in making sure that your loans are being handled feel free to email us directly at studentlsc@gmail.com
Posted in Legislation | No Comments »
Thursday, September 27th, 2007
What is a 529 plan?
It’s an education savings plan operated by a state or educational institution designed to help families set aside funds for future college costs. As long as the plan satisfies a few basic requirements, the federal tax law provides special tax benefits to you, the plan participant (Section 529 of the Internal Revenue Code).
529 plans are usually categorized as either prepaid or savings, although some have elements of both. Every state now has at least one 529 plan available. It’s up to each state to decide whether it will offer a 529 plan (or possibly more than one), and what it will look like. Educational institutions can offer a 529 prepaid plan but not a 529 savings plan (the private-college Independent 529 Plan is the only institution-sponsored 529 plan thus far).
Posted in The Basics | No Comments »
Monday, September 24th, 2007
We at the Student Loan Service Center have had a number of inquiries about the ‘end of borrower benefits’ after the recent legislation (H.R. 2669 College Cost Reduction Act of 2007).
Contrary to the popular belief, the borrower will still be able to benefit by consolidating student loans.
Here is an example,
If you had $15,000 in federal student loans and have not yet consolidated your payment would be approximately $175. Even without the borrower benefit rate reductions, you can reduce your payment down to $134. You will save $41 or 24% reduction in payment! Your credit will also benefit, from this consolidation. (We will have a posting on this later).
The borrower though will no longer be eligible for the on time payment rewards or the cash back options so prevalent in the student loan consolidation arena.
Posted in General Discussion, Legislation, Loan Consolidation | No Comments »
Wednesday, September 12th, 2007
Lenders are scrambling to prepare for the end of Federal Consolidation as we know it. I just received word that many of the FFEL consolidation lenders are working overtime, some around the clock, to consolidate student loans before October 1st 2007. If you have applied with a company and have not yet received notification that your loan has funded, I’d advise you call your loan specialist and request them to work on your loan as soon as possible. One thing that we are doing at the Student Loan Service Center to ensure all of our borrowers receive all of their borrower benefits on any loan that has at least 1 eligible LVC (Loan Verification Certificate) and utilize the 180 day add on period to buy us time to complete the process. As the story unfolds, I’ll be sure to keep you up to date on what is going on with current legislation.
Posted in Loan Consolidation | No Comments »
Monday, September 10th, 2007
H.R. 2669 or the College Cost Reduction Act of 2007 has been getting a lot of coverage in the news as of late. In a series of postings, we will try to educate students and parents alike on what this means to them.
To start with, how does H.R. 2669 College Cost Reduction Act of 2007 affect you, the student or the parent paying for college?
For those of you who do not know, H.R. 2669 College Cost Reduction Act was introduced on June 12th by Senator Kennedy. The bill has recently passed through congress and is now awaiting the president’s final signature of approval. The great news is this bill focuses on making college more affordable to you by cutting subsidies to FFEL program loan providers, increasing Pell Grant limits, establishes the Teacher Education Assistance for College and Higher Education Grant program (TEACH), forces Federally backed student loan interest rates to be cut in 1/2, allows for certain armed forces members to obtain special deferment rights, and allows for an income based repayment schedule upon graduating or separating from school.
Is there a negative?
Potentially yes, even though it does sound too good to be true. With the reduction in subsidies paid to lenders and reducing the amount of the loans that are guaranteed many lenders may choose not to offer Federally Backed Student Loans. It is going to make navigating through this crazy world of financial aid just a little more difficult.
We at Student Loan Service Center are still assessing the impact this bill will have on the Financial Aid world and will keep you posted. Meanwhile, please, feel free to contact us at studentloanprimer@gmail.com if you have any questions or comments.
Posted in Legislation | No Comments »
Wednesday, September 5th, 2007
The FFELP represents the largest federal source of financial aid for college. The FFELP is a public-private partnership created by Congress in 1965 to deliver and administer guaranteed education loans for students and their parents. The program has provided more than $567 billion in low-cost loans to tens of millions of students and parents.The FFELP provides the following types of loans for postsecondary education and training:
Stafford loans: Stafford loans represent the largest component of the FFELP, supplying nearly $46.8 billion in aid for college each year. Subsidized Stafford loans are available to students who demonstrate financial need. The federal government pays the interest on these loans while the student is in school, during a six-month grace period after the student leaves school, and during authorized periods of loan deferment. Unsubsidized Stafford loans are available to students regardless of their financial need; however, the student is responsible for all interest that accrues on the loan.
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Posted in Federal Loans | 1 Comment »
