Student Loans

A student loan, also called an education loan, helps students pay for college tuition, books, and living expenses. The student loan carries a much lower interest rate. Repayment starts about a year after the student leaves school.

 

Student loans come in three major formats: student loans (like Stafford and Perkins loans), parent loans (like PLUS loans), and private student loans.

 

Private student loans are also called alternative student loans. A distinct type of education loan called consolidation loan is also available. Here, the borrower can consolidate all the loans into a single loan. This makes it easier to repay the loan. New student loan products are introduced periodically - like the peer-to-peer education loans.

 

Federal education loans are available in the form of direct loans or federally-guaranteed student loan programs. Federally-guaranteed loans limit the interest rate and the fee the lender can charge. Deduction is allowed in federal income tax returns in respect of interest on student loans taken under the federal program.

  

Students should tap the federal government loans first. These loans carry a lower interest rate. They do not involve credit checks or collaterals. The repayment schedule can suit the student's convenience. Extended repayment periods are possible. Federal Stafford and Federal Perkins loans are also student loans.

 

Federal loans for students come in two formats:

 

The Federal Family Education Loan Program or FFELP under which loans are provided by private lenders like banks, credit unions, savings, and loan associations. These loans are guaranteed by the federal government.

 

The Federal Direct Student Loan Program or FDSLP, under which the loans are provided by the U. S. government directly to the students and their parents.

 

Stafford loans may be subsidized (the government pays the interest as long as you are in school) or unsubsidized (you pay the interest but you start making the payments only after you graduate).

 

Stafford loans are available for undergraduate programs and beyond.

 

Sources of Educational Loans for Students:

Colleges generally publish their own preferred lender lists for each loan format. Thus, the lender lists can furnish sources for undergraduate Stafford loans, parent PLUS loans, graduate Stafford loans, graduate PLUS loans, consolidation loans, and private student loans.

Debt Consolidation Loan: The Answer To A Worry Free Future

While some consumers may have one specific type of debt which is causing trouble in their financial life, like credit cards, others may have problems with numerous debts like credit cards, car loans, or even student loan debt, but for those who are in a financial position to benefit from consolidating, many often work to acquire this debt consolidation loan so that they will avoid doing damage to their credit score if they are overwhelmed by payments that are due from month to month over a long period of time.

Beware Of Secured Consolidation Loans

However, consumers also must be careful when seeking out secured consolidation loans due to the fact that collateral which is presented to acquire a secured loan may be lost if the borrower is not careful with their repayments or in a financial position to advantageously use a secured loan to their benefit. Again, consolidating a loan to lower overall debt repayment obligation costs may not be possible for all borrowers as a higher principle amount on a secured consolidation loan, or any type of consolidation loan for that matter, may take longer to repay and even if a low interest rate is associated with this type of debt it could cause overall costs to be higher.

Credit Card Debt

– Credit card debt can become out of hand when you have charged too much and the minimum payments are adding up to more than they have available to pay each month. That is why some people may consider settling their debt with a debt consolidation loan. What happens is the person takes several credit card balances and then refinances it into a new loan that is often at a lower interest rate and a lower monthly payment.

 

Saving Money Over All

Debt consolidation could save you money in the long run if you are consolidating high-interest debts, such as credit cards. A debt consolidation loan can have a significantly lower rate than certain forms of credit, and as long as your loan`s rate is lower than most or all of the debts you`re consolidating, you could well save money in the long run. However, a longer repayment term will reduce the likelihood of this.

Consolidation Loans For Erasing Consumer Debt–Borrowers Lower Monthly Debt Repayment Obligation

Consolidation loans for erasing consumer debt can come in a variety of options, but when it comes to simply a traditional, personal consolidation loan, consumers have found that borrowing to consolidate debts have been one way of lowering monthly payment obligations when repayment has become problematic in the lives of certain individuals. Understandably, there are numerous reasons as to why consumers have found it difficult to repay debts that are owed, but consolidating these debts have been one method that has allowed these individuals to avoid multiple payments and combat multiple interest rates associated with these debts, in the hopes of erasing their debt faster and at lower overall cost.

While some consumers may have one specific type of debt which is causing trouble in their financial life, like credit cards, others may have problems with numerous debts like credit cards, car loans, or even student loan debt, but for those who are in a financial position to benefit from consolidating, many often work to acquire this debt consolidation loan so that they will avoid doing damage to their credit score if they are overwhelmed by payments that are due from month to month over a long period of time.

Obviously, there are specific types of consolidation options, like those specifically for student loans as an example, but when consumers use a general debt consolidation loan, there are some factors that advisers often suggest consumers research before rushing into a particular debt consolidation opportunity. While consolidating debt can provide more affordability, there are consumers who may be in a position concerning their debts where they can find lower overall costs by erasing their debts one source at a time.

Numerous financial advisers often suggest running the numbers to see whether a consolidation loan will be more affordable than simply forming a budget and repaying debt separately, but of course there are factors which must be considered in this equation. Consolidation loans can take longer to repay and thanks to a higher principle amount on which interest is building, overall costs can be more expensive if only minimum monthly payments are met.

However, some consumers have been able to make minimum payments on all of their debts except one source and focus as much money as they can on erasing that particular debt source and then proceeding on to subsequent debts in a similar fashion. With smaller principal amounts, some consumers have been able to erase their debts sooner than had they used a consolidation loan at lower cost.

Yet, whether this is an option for certain consumers or the most affordable route will be dependent upon one's personal financial situation and the amount of debts that are owed. It has been advised, though, for consumers to weigh these options so that they can avoid meeting higher overall costs on their debt or entering into a repayment plan that could take longer to repay.

Student Loan Consolidation Center Student Loan Trust I Announces Commencement of Dutch Auction Tender Offer for a Portion of its Student Loan Asset-Backed Auction Rate Notes

 Student Loan Consolidation Center Student Loan Trust I, a Delaware statutory trust ("SLCC I"), today announced that it has commenced a cash tender offer (the "Tender Offer") to purchase up to $500,000,000 aggregate principal amount (as such amount may be increased in SLCC I's sole discretion, the "Tender Cap") of its outstanding Auction Rate Student Loan Asset-Backed Notes, Senior Series 2002A and 2002-2A (the "Notes").  The terms and conditions of the Tender Offer are set forth in SLCC I's Offer to Purchase dated January 14, 2011 (the "Offer to Purchase"), and the related Letter of Transmittal.

The Tender Offer expires at 8:00 a.m. (New York City time) on March 2, 2011, unless it is extended or earlier terminated (the "Expiration Time"). Tenders of the Notes may be made at any time prior to the Expiration Time.  

The Notes and other information relating to the Tender Offer are listed in the table below:

Auction Rate Notes - Total Amount Outstanding: $858,150,000 (As of November 30, 2010)
Auction Rate Student Loan Asset-Backed Notes, Senior Series 2002A and 2002-2A
Series	Initial Principal  Amount	Outstanding Principal Amount (As of  November 30,  2010)	CUSIP	"Early Tender Payment"(1)	"Tender Offer Consideration"  (Acceptable Bid Price  Range)(1)	"Total  Consideration"(1)(2)
Series 2002A-1	$75,000,000.00	$40,300,000	86386MAA2	$2,500	$42,500 - $44,500	$45,000 - $47,000
Series 2002A-2	$75,000,000.00	$66,650,000	86386MAB0	$2,500	$42,500 - $44,500	$45,000 - $47,000
Series 2002A-3	$75,000,000.00	$48,700,000	86386MAC8	$2,500	$42,500 - $44,500	$45,000 - $47,000
Series 2002A-4	$75,000,000.00	$74,200,000	86386MAD6	$2,500	$42,500 - $44,500	$45,000 - $47,000
Series 2002A-5	$75,000,000.00	$75,000,000	86386MAE4	$2,500	$42,500 - $44,500	$45,000 - $47,000
Series 2002A-6	$75,000,000.00	$53,800,000	86386MAF1	$2,500	$42,500 - $44,500	$45,000 - $47,000
Series 2002-2A-9	$75,000,000.00	$75,000,000	86386MAK0	$2,500	$42,500 - $44,500	$45,000 - $47,000
Series 2002-2A-11	$75,000,000.00	$69,000,000	86386MAM6	$2,500	$42,500 - $44,500	$45,000 - $47,000
Series 2002-2A-13	$75,000,000.00	$75,000,000	86386MAP9	$2,500	$42,500 - $44,500	$45,000 - $47,000
Series 2002-2A-14	$75,000,000.00	$46,500,000	86386MAQ7	$2,500	$42,500 - $44,500	$45,000 - $47,000
Series 2002-2A-15	$75,000,000.00	$74,500,000	86386MAR5	$2,500	$42,500 - $44,500	$45,000 - $47,000
Series 2002-2A-16	$75,000,000.00	$53,300,000	86386MAS3	$2,500	$42,500 - $44,500	$45,000 - $47,000
Series 2002-2A-17	$75,000,000.00	$59,200,000	86386MAT1	$2,500	$42,500 - $44,500	$45,000 - $47,000
Series 2002-2A-18	$75,000,000.00	$47,000,000	86386MAU8	$2,500	$42,500 - $44,500	$45,000 - $47,000

(1) Per $50,000 principal amount of Notes that are accepted for purchase.

(2) Includes the Early Tender Payment.

The "Tender Offer Consideration" payable in the Tender Offer for each $50,000 principal amount of Notes validly tendered (and not validly withdrawn) pursuant to the terms of the Tender Offer will be determined pursuant to a "Dutch Auction" procedure.  

Each holder that tenders Notes in the Tender Offer will specify a "Bid Price," within a range specified in the table above, which represents the minimum consideration such holder is willing to receive for those Notes.  Holders who tender Notes without specifying a Bid Price will be deemed to have specified $42,500 per $50,000 principal amount of Notes.  In addition, Goal Financial, LLC (f/k/a Route 66 Ventures, LLC) ("Goal") will pay (or will cause one or more of its affiliates to pay) an "Early Tender Payment" of $2,500 for each $50,000 principal amount of Notes.  Holders will only be eligible to receive the Early Tender Payment for Notes that such holders have validly tendered (and not validly withdrawn) at or prior to 5:00 p.m., New York Citytime, on January 28, 2011, unless extended (the "Early Tender Deadline").  

Promptly following the expiration of the Tender Offer, Notes validly tendered at the lowest Bid Price will be accepted first and will continue to be accepted, if necessary, at the related Bid Price in ascending order of such Bid Prices.  SLCC I will only purchase a principal amount of Notes in the Tender Offer up to the Tender Cap.

In addition, SLCC I will pay accrued and unpaid interest on all Notes tendered and accepted for payment in the Tender Offer from the last applicable interest payment date to, but not including, the settlement date for the Tender Offer ("Accrued Interest").  SLCC I currently anticipates that the settlement date will be between March 3, 2011 and March 7, 2011, unless the Tender Offer is extended by SLCC I.

Except in limited circumstances set forth in the Offer to Purchase, withdrawal rights for the Tender Offer will expire at 5:00 p.m.,New York City time, on January 28, 2011, unless extended (the "Withdrawal Deadline"). Holders of Notes who tender their Notes after the Withdrawal Deadline, but on or prior to the Expiration Time, may not withdraw their tendered Notes.  SLCC I reserves the right, in its sole discretion, to increase the Tender Cap.  SLCC I currently expects that the maximum principal amount of Notes to which the Tender Cap may be increased in the Tender Offer is $750,000,000. If the Tender Cap is increased to an amount equal to or less than $750,000,000, SLCC I does not plan to amend or extend the Tender Offer, or to extend the Withdrawal Deadline or the Early Tender Deadline or otherwise reinstate withdrawal rights.

The Tender Offer is subject to certain conditions, including (i) SLCC I having closed, on terms that SLCC I concludes, in its discretion, are commercially reasonable to SLCC I, and received net proceeds from its offering of its Student Loan Asset-Backed Notes, Series 2011-1 in one or more series (the "New Notes") that, together with certain additional funds available to SLCC I as specified in the Offer to Purchase, are sufficient to fund the purchase of the Notes in the Tender Offer, for any Early Tender Payments for such Notes to be paid by Goal (or its affiliate), for SLCC I to pay Accrued Interest on such Notes, and for other costs and expenses related to the Tender Offer and the offering of the New Notes and credit enhancement, if any, required by the rating agencies in connection with the offering of the New Notes, (ii) Goal Triple B Funding 2, LLC, the residual equity holder of SLCC I, having obtained consent from certain lenders under an existing loan agreement in connection with issuing the New Notes and (iii) the satisfaction of certain other customary conditions.

SLCC I has retained Barclays Capital Inc. to act as the dealer manager for the Tender Offer.  Questions related to the terms of the Tender Offer should be directed to Barclays Capital at (800) 438-3242 (toll-free) or (212) 528-7581 (collect).  Global Bondholder Services Corporation will act as the information agent and depositary. Noteholders or their representatives may request copies of the Offer to Purchase and related Letter of Transmittal, which contain the full terms and conditions of the Tender Offer, and submit any requests for assistance to:

Debt Consolidation Loans and Rates

Digital News Report – Low rates have prompted more borrowing while tight credit has put a hold on credit card debt. The inability to transfer credit card balances to other cards has prompted an interest in debt consolidation loans.

Online holiday spending broke records this year, up an estimated 12 percent over last year. Americans are looking for ways to lower their payments and at the same time as lower their overall obligation.

While interest rates are at historic lows, some are recommending the consolidation of student loan debt. Deborah Lucas of the Northwestern University says that there are advantages to consolidating student loans right now.

Consolidating student loan debt might make sense for some borrowers, especially if a lower "fixed" rate loan is available. Talk to a professional advisor or counselor before making any decisions with student loan debt.

There are two basic types of debt consolidation loans: Secured and unsecured. Personal unsecured loans are riskier and usually carry a higher interest rate. Chase Bank encourages customers to use their "home's equity to replace credit card, auto loan and other high-interest debt".

Many money experts don't believe it is a good option, but Chase made their case in a recent statement. The bank said that borrowers could lower their outstanding interest rate by 7 to 10 percent or more. Besides writing only one check per month, there may also be tax savings.

The bank offers a calculator to determine overall savings (not including taxes). We input a $5,000 car loan, two credit card loans totaling $3,800, and a few thousand in other miscellaneous loans. The bank said they could lower our payments from $1,173 to $547 a month. Over the 24 month term we would save $1,981.

Always check with a professional advisor before making changes to your outstanding debt.

Student Loan Debt Consolidation Loans May Offer Lower Monthly Payments–Do Graduates Benefit With Consolidation Loans?

Student loan debt has become a more common presence in the lives of graduates as there are students who continually need funding to meet college tuition costs and, as a result, have turned to student loans as a way to either supplement costs which are not met through scholarships and loans, or simply to meet their college expenses. Obviously, students who are exiting college with student loan debt may have multiple student loan debt obligations and, as a way to lower monthly payment obligations, many have turned to student loan consolidation plans as a result.

Student debt consolidation loans are seen to be beneficial by many graduates who have multiple debts as it can be easier to make one monthly payment rather than many and, for those who are combating multiple interest rates, a consolidation loan only requires that a graduate overcome costs related to one interest rate on their consolidation loan. While practicality and affordability are some of the main factors behind student loan consolidations, there are those who feel that not all students may benefit from a student loan consolidation plan.

Obviously, there are some who are unable to meet multiple student loan debt repayment obligations on various loans due to economic and employment difficulties which have been present for many graduates, so consolidation is the only way that they can affordably combat their debt at the present time. There have also been some students who have consolidated debt and simply began paying more than their minimum monthly requirement in the hopes of erasing their debt in a timely manner, but again this is not always an affordable options for graduates.

However, financial aid counselors and advisers have suggested that graduates take stock of their student loan debt situation and make sure that there is no alternatives to student loan debt consolidation before proceeding. Some students may be able to erase debts separately in a faster amount of time and at lower overall costs since a consolidation loan typically requires that a student make more payments over a lengthier period of time and, during this timeframe, interest will build on a higher principle and end up increasing costs.

Advisers also suggests that students seek out as much funding from scholarships and grants as possible so that student loan debt may be avoided altogether, but when a graduate exits school with debt, repayment options beyond student loan consolidations need to be considered as opportunities from federal lenders like income-based repayment programs or forbearance are also available, but again, it will depend on a student’s particular situation as to which of these options are available and affordable.

Paying Back Your Student Loans May Be Overwhelming: There Are Some Options

Obviously, there are some who are unable to meet multiple student loan debt repayment obligations on various loans due to economic and employment difficulties which have been present for many graduates, so consolidation is the only way that they can affordably combat their debt at the present time. There have also been some students who have consolidated debt and simply began paying more than their minimum monthly requirement in the hopes of erasing their debt in a timely manner, but again this is not always an affordable options for graduates.

Student Loan Consolidation

Student loan consolidation is a way for borrowers to manage multiple loans with varying interest rates by combining them all into one lump sum with one rate. Borrowers usually decide to consolidate when doing so will result in paying a lower interest rate. However, consolidation does not equal a lower rate; it's possible to consolidate multiple loans into one but end up with a higher rate of interest on the new principal amount.

Loans Will Be Paid Back

Whether it's an 85% recovery rate or north of 100%, the fundamental issues are basically the same. Student lending has developed into a system where no one other than the borrower really loses when people are saddled with excessive debt. Colleges don't care because easily available borrowing smashes the natural ceiling on college affordability — and allows colleges to continue raising prices at breakneck speed.