Tuesday, June 2, 2009

Direct Student Loans Draw Fire

The United Negro College Fund (UNCF) has serious reservations about the Clinton Administration's national volunteer service and direct student loan programs.
In the keynote speech at the annual Council for Advancement and Support of Education (CASE) national assembly in Washington, D.C., William
"Instead of concentrating resources on motivating young people to serve and providing more opportunities before, during and after college for people of all ages," said Gray, "H.R. 2010 provides costly subsidies to select individuals engaged in full-time national or community service.
"In our view," Gray continued, "H.R. 2010 needlessly limits opportunities for service while expending extraordinary costs per volunteer--150,000 slots over about a four- or five-year period at a cost of $7.4 billion. Under the existing Pell grant program, you could provide 5 million more people opportunities for higher education."
Gray told the assembly, "We don't need to provide my child or Jay Rockefeller's child subsidized public service to pay off his school debt. What we'd better be doing is investing the limited dollars we have where they will do the most good, and that means giving it to people based on need. The proposed program provides economic assistance precisely where we don't need it."
Gray also criticized the direct lending concept that has been proposed to fund the national service program, noting that having the loan program administered on college campuses rather than through outside lending institutions would present a hardship for small- to medium-size colleges.
"The United Negro College Fund presidents have been on record for the last three years in opposition to direct lending as it's constituted because we're not sure that the Department of Education, even under its capable new leadership, would be able to effectively administer a program such as this," he said.
* In a session entitled, "Building Community Ties After a Natural Disaster," Daniel Kalmanson, director of media relations, Florida Atlantic University, urged fund raisers to follow five steps in dealing with a natural disaster: 1. Review and update your crisis plan on an annual basis. 2. Update your emergency contact list. 3. Make sure you have a battery-operated computer and a cellular phone for use in an emergency. 4. Be flexible. 5. Don't forget the human element.

Local Student Loan Business a Family Affair

With a June 30 deadline looming to lock in lower fixed rates on consolidated student loans, the people at Goal Financial LLC are busier than ever.
The San Diego-based tender specializes in making federal guaranteed student consolidation loans, essentially refinancing multiple student loans at variable rates and converting it to a fixed rate over the full term.
"We had a record week last week and this one coming up we should break that record in terms of loan applications," said Ryan Katz, Goal Financial's chief executive and co-founder.
Three-year-old Goal Financial fielded about $100 million in loan applications for the week beginning June 13, he said.
Coincidentally, Ryan's older brother, Cary, is in the same business. He heads up another privately held student loan company in San Diego called College Loan Corp., which is also seeing a surge in business in recent weeks, driven by the impending increase on interest rates charged for student loans.
Mark Brenner, College Loan Corp.'s president, said with the interest rates on student loans ratcheting up nearly 2 percent starting July 1, many student borrowers are eager to lock in a fixed rate that could save them a considerable amount of money during the life of the loan.
According to a spreadsheet assembled by College Loan Corp., a student borrower with $20,500 in outstanding principal could save at least $2,272 over 10 years, compared with maintaining the variable rate loan.
The savings are even better if a borrower consolidates the loan within six months of graduation, or agrees to have the loan payments withdrawn automatically from their accounts, said College Loan Corp. spokeswoman Tracy Neumann.
As College Loan Corp.'s loan portfolio has expanded, so has its employment. It now has 505 staffers, compared with 450 at the end of 2004, Neumann said.
"We have about 37 openings right now in a range of positions in operations to sales and marketing," Brenner said.
Goal Financial said its loan portfolio today is more than $5 billion, making it the ninth largest of all student lenders. The largest, by far, is SLM Corp., better known as Sallie Mae. The former government agency and now publicly traded firm holds more than $100 billion in student loans.

Student Loan Changes

The first of July is an important date for federal student loans, when interest rates and other terms change. This year, besides the drop in costs for many loans, borrowers in public service professions can take a major step toward student loan forgiveness. Among the July 1 changes:
The fixed interest rate for new, subsidized Stafford loans will drop from 6.8% to 6.0% for undergraduates. Subsidized Stafford loans go primarily to students with family incomes under $80,000, and the government pays the interest while the student is in school (or in deferment). Also, the origination fees for all Stafford loans (subsidized and unsubsidized, undergraduate and graduate) will drop by half a percentage point, to 2% of the amount borrowed.
* More Loans Available. Undergraduates can borrow an additional $2,000 each year in unsubsidized Stafford loans at a fixed rate of 6.8%. Therefore, the total amount of Stafford loans (including subsidized and unsubsidized) that undergraduates can borrow increases to $31,000 for dependent students and $57,500 for independent students. Moreover, students who are interested in teaching and have good grades can receive another $4,000 each year for up to four years via the TEACH program. (TEACH grants become unsubsidized Stafford loans if students do not fulfill a teaching obligation.).

Public Service Loan Forgiveness (PSLF). PSLF is a new federal program that will forgive remaining federal student loan debt after 10 years of qualifying payments and eligible full-time employment. The program is designed for borrowers whose income is low relative to their debt for at least some of their time while in a public service job. (Public service includes employment by federal, state, local, or tribal governments, including the military and public schools and colleges, and by non-profit entities.).
However, PSLF only forgives debt in the Direct Loan program. Thus, to begin making qualifying payments: (1) borrowers who have already consolidated their federal loans with a private lender can reconsolidate into the Direct Loan program to become eligible; (2) once in the program, borrowers can choose one of three repayment plans to qualify: income-contingent repayment, income-based repayment (available in July 2009), or standard (10-year) repayment; and (3) borrowers who have not consolidated their federal loans can apply for a Direct consolidation loan at any time, and those who already have Direct Loans can switch repayment plans at any time.

Student loans and the credit crisis

The news earlier this month that the New Hampshire Higher Education Loan Corp., or NHHELCO, was suspending its alternative student loan programs may have seemed like just a small part of a seemingly interminable spate of bad-to-worse news about the health of the nation's credit system.In some ways,it may be. But in one very important way, it is not.
NHHELCO--a conservatively run student loan organization that's respected by its peers throughout the country--has found itself a victim of the turmoil and uncertainty that are afflicting the nation's credit and capital markets. Normally--meaning just months ago--NHHELCO would find itself paying about 3 percent to bondholders in order to help fund its loan portfolio. Not a giant return, but one in line with an organization that was disbursing loans averaging about 6 percent annual interest.

At this point, student loans still average about 6 percent, but because a recent auction of student loan bonds flailed to attract suitable bids, NHHELCO and others participating in the bond issue will be forced to pay 18 percent to their bondholders. In short, the loan organizations now find themselves in an impossible situation.
Alternative loans are loans that are not backed by the federal government. They are made directly to students who need resources beyond that of the assistance they receive from the college itself, through the federal Stafford Loan program and from their families. In other words, if a year's college tuition is $18,000 and a student's aid package totals $10,000, the student would have had the option of taking out an alternative loan to fund the difference.
In 2007-08, NHHELCO disbursed 4,769 alternative loans to New Hampshire residents, and another 1,500 were disbursed to non-residents. Without the alternative funding, it's anyone's guess how many of those more than 6,000 college students will be able to continue pursuing their education. And that's only in the small state of New Hampshire.

This is an issue that must be addressed sooner rather than later. For years, we have been told about not just the importance, but the necessity, of education in the future of the American economy. The failure to enable tens or even hundreds of thousands of students to pursue their education because of an overheated, greed-fueled adventure into sub-prime mortgage lending would be nothing short of a national disgrace. A nation that can spend hundreds of millions, if not billions, on funding Iraq and Afghanistan's education systems has the moral responsibility to find a way to resolve this deplorable situation at home.

House lowers rates on student loans

The U.S. House of Representatives voted to reduce interest rates on federal loans for college. The College Student Relief Act of 2007 (H.R. 5) was part of the Democrats' first 100 hours initiatives.
The legislation would cut interest rates on need-based federal loans
for undergraduate students to 3.4 percent from 6.8 percent between now and 2011. U.S. Rep. George Miller (D-Calif.), who introduced the bill, said the rate reductions will be funded by "making the program more efficient and effective tor students and the government, at no new cost to taxpayers." Fees for lenders would increase. Tuition and tees at four-year public colleges and universities have risen 41 percent after inflation since 2001.

Social Security Payments Can Offset Student Loans

The government can offset a portion of a debtor's Social Security benefits against student loans that have been outstanding for over 10 years, the U.S. Supreme Court has ruled.
The plaintiff took out federally guaranteed loans in the 1980s, but couldn't repay them because of health problems and economic difficulties. His only income was Social Security disability benefits, which the government used to offset his loan payments.
The plaintiff filed for bankruptcy, and argued that the collection of his student loans was time-barred by the 1982 Debt Collection Act's ten-year statute of limitations.
The 9th Circuit disagreed, allowing the offset.

It said that while the Debt Collection Act created a ten-year statute of limitations, the 1991 Higher Education Assistance Act eradicated that time limit, and a 1996 amendment to the Debt Collection Act specifically allowed for the offset of Social Security benefits.

In a unanimous decision, the U.S. Supreme Court agreed.

Student Loan Survival Guide

Drowning in student loans?
Save yourself from debt using our simple step-by-step plan.

Philip Jones wanted nothing more than to marry his fiancee, fly away to Costa Rica, and embark on the rest of his life. But something was holding him back--the $40,000 in student loans he owes to Direct Loans and Sallie Mae.
Jones, 30, was stressed out because he knew that if he fell .
behind on his loan payments, the U.S. Department of Education could provide offsets against Social Security payments and garnish his wages and tax refunds, without a court order. Until recently, only the Internal Revenue Service wielded such power.

Luckily, the 2004 graduate of Rutgers University College of Engineering knew a little something about forbearance, a temporary suspension of loan payments that most lenders will allow when times are tough. For Jones, his wallet was being pulled in too many directions; he was trying to pay for a house, a wedding, and a honeymoon within a six-month period.
"I didn't have to make a payment for six months, so that money went toward the wedding and honeymoon. It's easing the financial stress," says the mechanical engineer, who works for Hayes Pump Inc., an industrial equipment distributor in Fairfield, New Jersey.

For the class of 2002, the most current information available, the median student debt was $16,500, according to Sallie Mae, the nation's leading provider of education funding. And with the average college debt burden increasing, many recent grads are finding it hard to manage when the bills are due.
While Jones opted for forbearance, there are plenty of other ways to stay on track with student loan payments without breaking the bank. Erin Korsvall, spokeswoman for Sallie Mae, offers a few tips for taking the pain out of repayment.

Student-loan market adjusts to rising interest rates

Student-loan rates will jump July 1. The meaning of that for borrowers is clear: Consolidate your loans now, or go to financial detention for the next few years.

Lenders also are affected by the rate increases.
The Pennsylvania Higher Education Assistance Agency has hired 300 new staff members in its Harrisburg offices in the last 12 months, mostly to handle consolidation business that has boomed as interest rates move up, said spokesman Keith New.
"It was top of mind for ever), body," New said.
When they consolidate, borrowers bundle multiple loans into one at a fixed interest rate. A single loan can also be consolidated for die interest-rate benefit.
The impending interest-rate increase comes in two main parts.
Student loans issued before July 1 have variable interest rates that adjust annually. Those will jump to reflect the general rise in shortterm interest rates over the last year. By consolidating these loans by June 30, borrowers can lock in this year's interest rates for good.

Can I Get My Debt Forgiven?

Sometimes you can take out a student loan and not have to pay back any of it. This sounds too good to be true and that is probably because it is. Yo have to do some work but not the traditional kind. You borrowed money form the government so they want something from the deal too, you would be the same, right? There are lots of kinds of jobs that you can do to pay back your student debt without physically paying back the money.

Peace Corps

- The Peace Corps is a civilian organization that is sponsored by the United States government that helps developing countries who are less fortunate than we are. You can sign up to help this cause and because you are helping them they will cut some of your student debt away. I think it is a great experience to do this because you get to humble yourself and work for someone else which can teach you great lessons when you are young.

Exceptional Circumstances

- If you are under some exceptional circumstances the you may be forgiven your student loan, probably all of it. These really do have to be extreme though like becoming disabled or having to file for bankruptcy. You may find that some organizations will reduce your payments for a while if you are struggling financially. Make sure you talk to them constantly because lots of people avoid talking to their bank because they are scared but you need to sort something out or they will just file for a meeting in court. I speak from experience there.

What are the top ten tips to avoid being scammed by student loan consolidation lenders?

If you want to avoid being scammed by student loan consolidation lenders, it is advisable to know your turf.

Follow the below mentioned top ten tips to avoid scams by student loan consolidation lenders.

  1. First and foremost, check the reputation of student loan consolidation lender. Most of the lenders have their own websites so you can go there and check the profile of the lender. If the lender does not have any website, it clearly means that lender is not reputed in nature
  2. .Only go for a student loan consolidation lender who has an experience of more than 10 years in dealing with student loan consolidation program. There is no point opting for a lender who has just entered into the field of student loan consolidation.
  3. Most of the time, lenders will advertise lucrative student loan consolidation deals in the newspapers and television. If the deal does not sound practical, stay away from it because there is a good chance that it is a scam.
  4. If the lender is charging you upfront fee for student loan consolidation, it is recommended that you stay away from them. This is because of the simple reason that reputed lenders do not charge any kind of fee in their student loan consolidation program.
  5. Customer services are also quite an important factor in student loan consolidation program. If the lender is not giving you good enough services, there is a strong possibility that they are a scam.
  6. Go to the office of student loan consolidation lender before availing their student loan consolidation program. This will give you a feel of how they operate and what kind of staff they possess.
  7. If the lender is promising you huge discounts in terms of interest rates, it means that they are scam because they only get a limited amount of income from you and if they give huge discounts in interest rates, what they are going to earn.
  8. Take the help of your financial adviser before signing an agreement.
    If the lender is not giving you a grace period in initial stages, it means that something is wrong with them.
  9. Check the profile of lender with national lender association.

Top 10 student loan consolidation tips

Below You Will Find Top 10 Student Loan Consolidation Tips

The rates of student loan consolidation program vary from one lender to another. Therefore, if you are interested in getting best rates shopping around is the key.
By paying your monthly installments of student loan consolidation program on time, you can not only improve your credit score but also lender can give you discount on interest rates thinking that you are not a risk to him.
Instead of going for a variable interest rate plan, it is advisable that you choose fixed interest rate plan. The main advantage of fixed interest rate plan is that you will know well in advance what monthly payment you need to pay to the lender.
Only opt for a student loan consolidation program whose monthly payment schedule is not that high. There is no point going for a student loan consolidation program that you cannot afford.
Give first preference to federal student loan consolidation program. This is because of the simple reason that interest rates in these programs are quite low as compared to the private student loan consolidation program.
Read the terms and conditions of the loan agreement carefully before signing it.
There are some lenders operating in the market that charges processing fee when offering student loan consolidation program. If the lender you have chosen is also asking the same, it is better to look out for another lender.
If you are not able to find a consolidation program of your choice, you can take the assistance of online lenders. The best part about them is that their application procedure is quite easy.
Most of the time, you do not need to submit any documents when availing student loan consolidation program. But if your lender is asking for your driving license, passport or a salary slip, you should submit otherwise he could reject your loan application.
Check the reputation of your lender first before signing any agreement with them. If the lender you have opted for has a limited experience in dealing with student loan consolidation program, it is advisable that you go for another lender.

How can you resolve a student loan debt consolidation?

Student loan debt consolidation can help you immensely in repaying your student loans.

Why Student Loan Debt Consolidation Works


Lots of students find it real tough paying their student loans. Because of this, not only their personal life gets affected but also their studies. If you are one of those students, there is good news for you.
Student loan debt consolidation works because there are loads of creditors who are interested in modifying the repayment agreement. In some cases, they also lower the interest rate on the installments. To get all these benefits you have to hire a student loan debt consolidation company first. It’s the responsibility of these companies to meet with your creditors and talk to them regarding interest rates and repayment schedule.
Before appointing any such company, check their credential first. It has been noticed that loan settlement normally varies from company to company therefore it is quite important that you know before hand what kind of relationship they have with your creditors. Most of the reputed student loan debt consolidation companies offer you detailed counseling after looking at your financial condition.
You should take decision, which is going to help you in the long run. There is no point taking decision just to attain some short-term goals. For example, some students go for a bankruptcy filing instead of going for a debt consolidation. This is a wrong way of thinking because when you file for bankruptcy, creditors are not going to approve your loan application in the future.
The best part about student loan debt consolidation is that it often leads to lower monthly payments. Even better, you only have to deal with one creditor instead of five or six. In some cases, creditors also reduce interest rates on the loan but this will only happen when you pay monthly installments on time. If you miss any of your payment, creditors are not going to give you any discount in terms of interest rates. Therefore, it is quite important that you pay all your dues on time. By following this route, your credit score is also going to improve.

What can student loan consolidation services offer to students with bad credit?

The answer of this question is quite simple. To start with, student loan consolidation services ensure that students with bad credit get a loan.

Student Loan Consolidation Services and Students with Bad Credit:

It is worth mentioning in this regard that loan application of students with bad credit often gets rejected by the lender because of bad credit. Most of the lenders think of students with bad credit as a risk. Therefore, they are not willing to give them the loan.
Another good thing about student loan consolidation services is that they makes sure that students with bad credit get a loan at low interest rates and easy repayment schedule. This is important because if the interest rates are high, credit record of these students can get even worse. Repayment schedule is also quite an important factor for students with bad credit, as they don’t want to pay huge monthly installments.
Student loan consolidation services normally analyze the financial condition of the student first. On the basis of their analysis, they tell students which consolidation program can be advantageous for them. Only opt for that consolidation program, which you can afford. If you choose consolidation program that you cannot afford, not only your credit score will suffer but also you will face plenty of difficulty in paying the monthly installments.
Finding a reputed lender is also quite critical when availing student loan consolidation program. Student loan consolidation services play a prominent part in helping out students find a lender that is willing to give loan on easy terms and conditions. In addition, they also make sure that students understand the terms and conditions of the loan before signing it.
Students with bad credit often go for bankruptcy filing instead of consolidation. This is a wrong way of thinking because when students go for bankruptcy filing they cannot apply for loan application in the future. On the other hand, when they go for consolidation not only they can get approval for the loan but also they can easily improve their credit situation, which in turn would mean lower interest rates in the loan consolidation program.

Student Loans can help Students Control their Monthly Payments


With the help of student loan consolidation loans, you can easily pay off all your student loans that you taken in the past.

How students benefit from student loan consolidation loans :

When students go for these kinds of loans, monthly payments get reduced. This is because of the simple reason that interest rates gets reduced and they only have to deal with one lender. With only one monthly payment to make, students can easily manage their finances.
But all this will only happen when you manage to find a student loan consolidation at low interest rates and easy repayment schedule. Before you start the process of finding a student loan consolidation, it is of paramount importance that you analyze your financial condition first.
Basically there are two types of student loan consolidation loans, namely, private student loan consolidation and federal student loan consolidation. If your financial condition is really bad, it is advisable that you go for a federal student loan consolidation because interest rates in this consolidation program is much lower as compared to the private student loan consolidation.
On the other hand, if you have just joined a new job and there is a chance of promotion in the six months time, you should go for a private student loan consolidation. The best part about this consolidation is that it gives you a grace period of six months if your financial condition is not up to the mark. During this grace period, you do not have to worry about giving monthly payment to the lender.
If your main objective is to reduce your monthly payments, it is advisable that you go for a fixed rate student consolidation loan. When you do that, you only have to pay a fixed monthly payment, which is not the case when you have selected variable rate student consolidation loan.
Your monthly payment can reduce appreciably if you manage to improve your credit rating. To improve your credit rating, pay your monthly payment on time and save some money in your bank account. In some cases, lenders will give you discount on interest rates by taking a look at your bank statement.

Student Loan Consolidation Review

Below is a student loan consolidation review. When your main objective is to lower your monthly payment and combine all your student loans into one loan then student loan consolidation is the way to go.

There are two types of student loan consolidation programs:

Federal student loan consolidation program
Private student loan consolidation program.
There are some differences between federal student loan consolidation program and private student loan consolidation program. Take a look.
There is a 6 per cent discount during grace period in federal student loan consolidation program, which is not the case in private student loan consolidation program.
You can go for a fixed interest rate in federal student loan consolidation program whereas in private student loan consolidation program you only have a choice of variable interest rate.
Some of the benefits of student loan consolidation are mentioned below:
In an ideal scenario, student loan consolidation program minimizes your present monthly payment in half.
You do not need to pay any sort of fee when availing these consolidation programs.
There is no prepayment penalty associated with these programs. In case if you are interested in repaying the loan amount much before the deadline, you can do it without being charged with any penalty.
When you opt for student loan consolidation program, your credit rating improves. But for that to happen, it is of utmost importance that you pay all your dues on time.
You only need to deal with one lender instead of five or six lenders with student loan consolidation program. This not only gives you peace of mind but also makes your task of managing finances lot easier.
If your financial condition is not up to the mark at present, you can request for a grace period. More often, you will be given a grace period of around six months. In this period, you do not have to give any payment to the lender.
Your monthly payments are designed after taking a look at your financial condition. This in turn makes sure that you will not face any problem in repaying the loan amount.

Top 5 student loan consolidation scams

No doubt, student loan consolidation programs is quite a useful tool for students in terms of repaying the student loans but if you are not careful it can cost you dearly.

Below you will find top 5 student loan consolidation scams.

Lots of students who are facing problem in repaying their loan commit the mistake of doing business with lenders that steal money from them instead of helping them out. It has been noticed that these kinds of scams are normally directed at students who are suffering from bad credit. Those students who are filing for bankruptcy is more at risk for these scams. It is advisable that you check the profile of the lender first before working with them.
Most of the time, lenders ask for money up front when offering student loan consolidation programs to the students. Do not opt for such lenders because their only aim is to get the money out from you at any cost. It is worth mentioning in this regard that there is no up front or processing fee associated with student loan consolidation programs.
Some lenders give advertisement in the newspaper and magazine that they are going to give loan at 1 per cent interest rate. Beware of these kinds of lenders because in reality no lender is going to give you loan at 1 per cent interest rate. Once you see these kinds of advertisements, just treat them as scams.
Read the terms and conditions part of your loan carefully before signing it because number of times lenders take the advantage of the fact that students has a limited knowledge about the loan consolidation program. For example, lenders can increase the interest rates or monthly payment without letting you know.
In some cases, lenders gives you variable interest rate instead of fixed interest rate thinking that when interest rate will increase they can get the extra money. Therefore, it is quite pivotal that you tell lender well in advance that you are only interested in fixed interest rate program not variable interest rate program.

How Much Effort Should Go into Consolidation Application?

Thanks to the advent of Internet, you don’t need to do much in terms of student loan consolidation application.

Steps to take when Filling a Student Loan Consolidation Application

1. There are plenty of online lenders operating in the market that offers student loan consolidation. You just need to go to their website and fill an online application form, which includes your name, your father’s name, permanent address and some details about your monthly income.
2. Once you give these details to the lender, he will then cross check the information given by you. If the information provided by you is correct, there is a good chance that your loan consolidation application will get an approval in a matter of two or three days. The best part about online lenders is that you can do all this at the comfort of your home. Apart from that, no credit check is going to be implemented on you.
3. Some people believe that online lenders charges hefty amount of fee in their student loan consolidation program. This is baseless because in reality they just charge processing fee, which is also quite minimal.
4. Before you fill student loan consolidation application, it is of paramount importance that you check the reputation of the lender first. This will go a long way in making sure that you get the student loan consolidation at a low interest rate and easy repayment schedule.
5. Shopping around is the key when your main objective is to find a lender who is willing to give you loan on a low interest rate. When you take quotes from five or six lenders you get a rough idea of what the market condition is at this moment of time. This in turn helps you in making an informed decision.
6. When filling up the student loan consolidation application it is quite important that you fill the application form correctly. Any mistake in this regard will delay the whole process. In addition, it will also create a wrong impression on the mind of a lender. In an ideal scenario, you should read the application form carefully before filling it.

What is the Best Advice that can be Offered?

With the help of student loan consolidation, not only you can lower your monthly installments but also you can increase your repayment term. The federal government normally backs student loan consolidation. When opting for consolidation program, it is quite mandatory that you take a closer look at the terms and conditions of the loan.


Student Loan Consolidation Advice:

If you are not happy with the terms and conditions of the loan, it is always better to negotiate it with the financial institution. In case if financial institution is not willing to modify terms and conditions, you always have a choice of selecting another financial institution, as there are thousands of financial institutions operating in the market.
You will only be able to avail the benefits of student loan consolidation when the interest rates are quite low. There is no point going for a student loan consolidation program whose rate of interest is quite high. If you are interested in getting a loan at low interest rate, you have to shop around and take quotes from number of financial institutions. When you take quotes from financial institutions, you will realize what the standard interest rate prevailing in the market at present.
There are some financial institutions in the market that offers discount to students opting for consolidation program. But finding these institutions is not that easy because they are very few in numbers. On the other hand, there are lots of financial institutions that charge huge upfront fee when giving loans.
This is ridiculous because students normally choose student loan consolidation, as their financial condition is not up to the mark. But when they have to pay huge sum of money as an upfront fee, what benefit they are going to get through consolidation. Taking this into account, it is quite critical that you work hard and come up with a financial institution, which is willing to give you loan on a low interest rate and most importantly not charging any sort of fee. Also take into consideration the repayment schedule before signing an agreement.

How Soon Can Student Loan Consolidation Repayment be Made ?

Students can start repaying their student loans whenever they want to. However, in some cases, lenders give students a grace period of around six months to start repaying the loan. This grace period is normally given to those students who have not been able to find a job.

When you go for a student loan consolidation, the lender on the basis of your financial condition sets repayment schedule. If you are not happy with the repayment schedule set by the lender, it is quite important that you ask your lender to modify repayment schedule. If he is not willing to modify repayment schedule, it is advisable that you opt for another lender.
The main advantage of student loan consolidation is that you only need to make one monthly payment. Some students commit a mistake of repaying the loan slowly. If your financial condition is quite good, make sure that you repay the loan fast. By following this route, you can save plenty of money in the form of interest rates.
On the other hand, if your financial condition is not that good make sure you repay the loan amount slowly. If you show desperation in repaying the loan amount just because of saving some money, you can face lots of difficulties in the future. For example, if you miss one or two of your monthly payments, your credit score is going to get worse. Furthermore, lenders will not approve your loan application in the future thinking that you are a risk to them.
Before opting for any student loan consolidation program, it is of utmost importance that you take into consideration the terms and conditions of the loan. There is a direct relation between student loan consolidation repayment and terms and conditions of the consolidation program. The terms and conditions of the consolidation program are flexible in nature, you will face no problem in repaying the loan amount. Conversely, if the terms and conditions of the loan are bit tight, you will face lots of difficulty in repaying the loan amount.

Student Loan Consolidation Rebate is Most Common ?

Rebate is normally given in federal student loan consolidation program. The best part about this consolidation program is that you have a choice of extending your repayment term. By extending repayment term, you can easily improve your credit score.

The kind of rebate you are going to get in this consolidation program is set by the U.S. Department of Education. Therefore, you do not have to worry about any kind of partiality, as the terms and conditions are equal for all the students. This is not the case with private student loan consolidation where terms and conditions vary from one lender to another.
If you are interested in getting a private student loan consolidation program, shopping around is the key. Make sure that you take quote from at least five or ten lenders. Checking the reputation of the lender is also quite important in private student loan consolidation, as there are thousands of private lenders operating in the market.
The best way to do this is in the form of reduction in interest rates. This benefit is normally offered to students in two parts. First and foremost, a .25 per cent reduction for auto debit and secondly a 1 per cent interest rate reduction after three years of on-time payments. In other words, it is of paramount importance that you pay all your dues on time because then only you will be able to get concession in interest rates.
In case if you are struggling in financial front, it is advisable that you go for a grace period. When you opt for a grace period, you do not need to pay any money to the lender. Your repayment term will start once again when your grace period is over. Point to be noted here is that no financial penalty is going to impose on you during the grace period.
You will get more benefits in your student loan consolidation program when your credit situation is up to the mark. Therefore, it is recommended that you improve your credit situation first before going for a student loan consolidation rebate.