FEDERAL STAFFORD LOAN (SUBSIDIZED OR UNSUBSIDIZED)

Loans are available to students; those with financial need are eligible for a subsidized loan, while those who do not meet financial aid requirements are eligible for an unsubsidized loan.

Description: Federally insured loans available directly from some colleges, banks, other lenders, or state agencies.

Availability: Families must complete the FAFSA to apply.

Eligibility: Students who demonstrate financial need may be offered a
subsidized loan; students who do not meet the criteria for financial aid may
be offered an unsubsidized loan.
Loan amounts: In 2005, annual maximums were:
• $2,625 freshmen
• $3,500 sophomores
• $5,500 juniors and seniors

Students who are not dependent on a parent or guardian, or students
who have been denied a Federal PLUS Loan, may be eligible for additional
amounts of as much as $4,000 for freshmen and sophomores and as much as
$5,000 for junior and seniors.

Disbursement: Direct Stafford Loans come from the U.S. Department
of Education and are delivered to the student through the college; repayment
is made to the federal government.

Federal Family Education Loan (FFEL) Stafford Loans come from banks
or other lending institutions; repayment is made to the lender or to a servicing
agent it appoints.


Tax issues: Interest may be tax-deductible based on income level.
Interest formula: Variable interest rate based on the most recent sale
of ninety-one-day Treasury Bills held prior to June 1 of each year, plus a
margin. Rates become effective on July 1 of each year. In 2006, the margin
above the index was 1.7 percent while the student is enrolled, in a grace
period, or in a deferment period; the margin above the index was 2.3 percent
while the loan was being repaid. The variable interest rate was guaranteed
not to exceed 8.25 percent.

In 2006 actual interest rates were 4.7 percent for students still in school or
still in a grace period, and 5.3 percent for students in the repayment period.
Fees: The guarantee and origination fees cannot exceed 4 percent, and
some lenders will offer lower fees. Fees are deducted from loan proceeds at
the time of disbursement. In other words, if you are borrowing $10,000 and
the fees are 4 percent you (or rather, the college) will receive $9,600, but you
will start out owing the full amount.

Repayment: Differs for the two types of Stafford loans.
• Subsidized Stafford Loans. Repayment of the principal is
deferred and interest is subsidized by the government for as
long as the student is enrolled at least half-time in school and
during deferment periods.
• Unsubsidized Stafford Loans. Repayment of the principal
is deferred and interest payments can be deferred as long as
the student is enrolled at least half-time and during deferment
periods. Any unpaid interest is added to the principal and is the
responsibility of the borrower once repayment begins.

For all Stafford loans, repayment is scheduled to begin six months after
the student graduates, withdraws from college, or drops below a minimum
of half-time status. The repayment period extends for ten years. There is no
prepayment penalty.

Under certain circumstances, including unemployment and illness, a
borrower may request a temporary deferral (or forbearance) of principal and
interest payments, although interest continues to accrue.


Special programs: Some state programs (such as MEFA in Massachusetts)
offer discounts for state residents. In the MEFA program, students receive a
.5 percent reduction during repayment of the loan, an additional .5 percent
reduction if payments are made as automatic withdrawals from a checking or
savings account, and a 2 percent additional interest rate reduction after fortyeight
consecutive on-time payments have been made.

How to apply: Students are automatically eligible for Stafford Loans if they
file a FAFSA. Contact the college’s office of financial aid and your state’s educational
financing agency for additional information about special programs.

Service-Cancelable Stafford Loans
One way to reduce the cost of college—at least the portion of expense
that is paid by a Federal Stafford Loan—is to enroll in a degree program
that is considered a “critical field of study” and then take a job in that field.
A number of states offer a Service-Cancelable Stafford Loan to encourage
trained professionals to meet regional needs.

The loan may be a need-based subsidized loan or an unsubsidized loan
made available to any applicant. For the service-cancelable program, though,
states add residency requirements, a minimum grade point average, and a
commitment to one of the listed fields of study.
Check with your state’s higher education funding authority or the
financial aid office of your school for details.

In many states, the greatest need is for people in the health field.
Acceptable programs of study include those for dental hygienists, laboratory
technicians, nurses in almost any specialty or degree level, occupational or
physical therapists, and physician assistants. Graduate health fields include
dentistry, optometry, pharmacy, and veterinary medicine.

As an example of this sort of program, the Georgia Student Finance
Authority requires participants to be a legal resident of the state under its
definition of that status, be accepted for admission or enrolled at least halftime
in an approved school, maintain at least a “C” average in most programs,
and not be in default on any Federal education loan or owe a refund on any
Federal Pell Grant, Federal Supplemental Educational Opportunity Grant
(FSEOG) or Student Incentive Grant (SIG).


After graduation, students can repay their loan by working in their
field of study in the state where the program is based. In the Georgia plan,
the trade is one-for-one: for each calendar year of full-time qualifying service,
the state will cancel one academic year of assistance in most programs. (If the
original Service-Cancelable Stafford Loan was unsubsidized, the student or
the parents are still responsible for all accrued interest.)
Read More: FEDERAL STAFFORD LOAN (SUBSIDIZED OR UNSUBSIDIZED)

FEDERAL PERKINS LOAN

Administered by the U.S. Department of Education, Perkins Loans are offered to the student at below-market interest rates. No interest is charged while the student is enrolled at least half-time in college.

Although in theory any student is eligible to take out a Perkins Loan, colleges are required to give priority to students with exceptional financial need. In practice, this means that the pool of money available for Perkins Loans is usually emptied well before students with some personal or family assets are reached.

Description
A federal program awarded by colleges, subject to
government funding levels and limitations. The school is the lender.
Availability: Offered to students with exceptional financial need, based on information provided on the FAFSA form.

Eligibility
Students must be enrolled at least half-time at an eligible
college; parents and student must complete and submit the FAFSA form
before the deadline date.

Loan amounts
In 2005, the program allowed for a maximum of
$4,000 per year, not to exceed $20,000 for an undergraduate program. The
amount offered is determined by the college’s financial aid office and may be
less than the maximum. Congress may increase or decrease overall funding
for the program each year, and maximums may change.

Disbursement
Borrowed money is paid directly to the school.
Tax issues: Interest may be tax-deductible based on income level.
Interest formula: Fixed rate set by the U.S. Department of Education.
In 2005, Perkins Loans bore a 5 percent interest rate.


Fees
No application fee.

Repayment
Repayment is scheduled to begin nine months after the
student graduates, withdraws from college, or drops below a minimum of
half-time status. The repayment period extends for ten years.


Under certain circumstances, including unemployment and illness, the
borrower may request a temporary deferral (or forbearance) of principal and
interest payments, although interest continues to accrue.
How to apply: File the FAFSA. Contact the college’s financial aid office
for additional information.
Read More: FEDERAL PERKINS LOAN

Student Loan Primer

In the summer of 2007, the U.S. Department of Education sent letters to 721 colleges, universities, and trade schools where student lending practices seemed fishy. The government determined that the source of most of the student loans at each of these schools came from one lucky lender. At all these schools, a solitary lender held at least 80% of the institution’s federal student loan volume. On some campuses, a single lender presided over a monopoly.

Because many lenders are eager to provide loans to college kids, you’ve got to wonder why any school would allow one competitor to dominate. Some schools explained that one lender was clearly the superior choice, so its students gravitated to it. But the discovery sure seemed to mock the notion of comparison shopping.

In its letter, the federal government didn’t accuse the schools of
lawbreaking, but the list did inflame the worst fears of student loan industry
critics who have watched one school after another get caught
with its hand in the cookie jar. As mentioned in Chapter 44, “The Student
Loan Fiasco,” investigations have revealed that some colleges
and universities—no one knows the exact number—have been selling
out their student and parent borrowers for their own gain.


If you must borrow, there are proven ways to cut your costs. Just
as important, you’ve got to know which loans are worth pursuing.
Here’s what you need to understand to protect yourself:
Use federal loans first. Federal loans are the superior choice for
families. Unlike private loans, federal loans offer lower interest rates
and fixed monthly payments. What’s more, federal loans offer repayment
plans based on a graduate’s income, deferments for financial
hardships, and cancellation provisions if the borrower dies or becomes
totally and permanently disabled.

Here are the main federal loans:
Stafford loans. These loans come in two flavors—subsidized and
unsubsidized. The subsidized Stafford, reserved for needier students,
is more attractive because the government pays the interest while the
student remains in school. To get an idea of who qualifies, about twothirds
of students with subsidized loans have adjusted family incomes
of less than $50,000, while a quarter of students have family incomes
up to $100,000. Less than 10% of students with subsidized Staffords
have family incomes that exceed $100,000. In contrast, the unsubsidized
Stafford is available to students regardless of their parents’ income.

Unfortunately, many families won’t be able to borrow all that they
need through a Stafford loan. The government has received a lot of
flak for maintaining a low Stafford borrowing ceiling. Most freshmen
and sophomores can only borrow up to $3,500 and $4,500, respectively,
while juniors and seniors can obtain $5,500 each year.

PLUS loans. While Staffords are reserved for student borrowers,
the Parent PLUS loan, which is also federally backed, is designed for
moms and dads. Parents can borrow enough to meet the cost of a
school’s attendance that isn’t covered by their child’s financial aid
package. Unlike a Stafford, there is no set borrowing limit. While
Stafford loans provide a grace period before payments are required,
parents must start repaying the PLUS debt up to 60 days after the loan
is fully dispersed.

Parents who own homes should compare the fixed rate of a PLUS,
along with its fees, with another alternative—a home equity line of
credit. They also need to plug potential tax breaks into this equation.

Parents can deduct home equity interest off their taxes if they

itemize, but they may also qualify for an above-the-line tax deduction
for college loan interest even if they don’t itemize.

For parents who don’t own a home or who have little home equity,
the PLUS Loan is a no-brainer compared to signing a private loan,
which should be your last resort.

Let students borrow first. Even if parents intend to borrow for
college, it’s always better for the student to take out a federal loan in his
or her own name first. Why? Stafford loans offer a lower interest rate
than the federal PLUS loans. The maximum rate for a Stafford was recently
6.8% versus 8.5% for a PLUS. Beginning in the summer of 2008,
the rate became even lower for subsidized Staffords and the interest
rates will continue to shrink for these undergraduate borrowers.


Although your son or daughter is responsible for the payments,
you can reimburse the child. Young college graduates are more likely
than their parents to be eligible to deduct student loan interest off
their yearly income tax returns.

Look beyond the preferred list. To make shopping for loans
more manageable, many schools compile a list of preferred lenders. A
school could maintain a list of lenders for Stafford loans, PLUS loans,
private loans, and consolidation loans. Colleges are expected to select
lenders for these lists that offer students the best deals on interest
rates and/or customer service or other factors.

By now, you can probably appreciate why you shouldn’t automatically
assume that these preferred lists are stuffed with tremendous
deals. Ask a school’s financial aid administrator why lenders made the
cut and use these names only as a starting point since you can borrow
from any lender. You’ll want to ask about interest rates, fees, customer

service, and any interest rate discounts. As of July 2008, federal regulations
began requiring that colleges put at least three lenders on their preferred lists.

Understand federal loan differences. Not all colleges generate
preferred lists because they participate in a direct federal loan program.
About 20% of schools offer their students federal guaranteed
loans directly from the U.S. Department of Education through the
Federal Direct Student Loan Program. All other students receive federally
guaranteed loans through private lenders via the Federal Family
Education Loan Program.

Your choice will be easy if the school you attend participates only
in the federal direct loan program. At these schools, there is one loan
option, which is the same for everybody who borrows this way. (About
30% of direct loan schools also participate in Federal Family Education
Loan Program.) In the early days of the direct lending program,
many more schools participated, and this competition worried the private
lenders. To protect their territory, the outside lenders began offering
perks to schools to encourage them to shun the direct program,
and it worked. If a school is in the FFEL program, its students can
borrow money from countless financial institutions that participate in the program.

Direct loans became available in the 1990s when President Bill
Clinton and others concluded that it would save taxpayers a lot of
money if the government lent the cash to students without a middle
man. It costs the government more when students borrow from outside
lenders, but obviously families are worried about their own costs,
not the federal government’s financial problems.

Many students might prefer sticking with direct federal loans for
a compelling reason: Only direct loans provide a financial safety valve
that allows borrowers who choose lower-paying careers to make
monthly payments based on their income, which can be worth its
weight in gold.

What’s more, a feature called the income-contingent repayment
allows the monthly payments to be calculated based on the size of the
loan, as well as the former student’s salary and family size. These loans
can’t drag on for more than 25 years because if they haven’t been paid
off by then, the debt is canceled. If debt is forgiven, you will owe income
taxes on the forgiven amount, but that’s obviously a long way off.


As of July 2009, however, borrowers of Stafford loans and Grad
PLUS loans, which are strictly for graduate students, can also choose
a newer feature called income-based repayments. While it’s similar to
the income-contingent plan, the new alternative results in lower
monthly payments. By choosing income-based repayments, borrowers
will limit their repayments to 15% of their yearly discretionary income,
which is defined as the amount by which adjusted gross income
exceeds 150% of the poverty line. What’s more, direct loan borrowers
who work full time for at least a decade in public service jobs, will have
their loan forgiven after paying it off for 10 years. Other borrowers can
qualify for public service loan forgiveness by consolidating their loans
into the direct loan program.

While outside lenders can offer income-based repayments, it’s unclear
how many of them will. If a private lender doesn’t, however, a
borrower is entitled to obtain a federal direct consolidation loan on the
grounds that his or her lender didn’t provide the new feature.

Evaluate repayment plans. Student loans typically offer a
handful of alternatives to repay the debt. The traditional way requires
a borrower to begin writing checks that cover the loan’s principal and
interest right after the loan has been made. You can usually capture
the lowest interest rates with this option.

Another alternative is simply making interest payments until after
graduation. Borrowers who are saddled with the higher rates and fees
are those who delay paying anything until they’ve graduated. The
monthly payments will also be higher because the unpaid interest
that’s been accruing will be dumped back into the loan.

Be realistic. This may sound cruel, but if you aspire to be a social
worker or a painter, you probably shouldn’t borrow as much as a future
dermatologist or investment banker. Here’s a handy rule of
thumb: Don’t borrow more than your anticipated starting salary after
you graduate. If you borrow more than twice your starting salary, it’s
likely you will be in extreme financial difficulty and will struggle to
make the monthly payments. Borrowing too much for an education
can be even more perilous for students who end up in trade schools.


Action Plan
Always choose federal loans first and avoid private loans.
Source: The College Solution: A Guide for Everyone Looking for the Right School at the Right Price

PARENT LOAN FOR UNDERGRADUATE STUDENT (PLUS) PROGRAM

Any parent is eligible to apply for a PLUS loan without regard to financial need. There is no minimum, and the amount borrowed can be up to the total cost of attendance minus any other financial aid received. These loans come in two types: a Federal PLUS Loan (Direct PLUS Loan), and a FFEL (Federal Family Education Loan Program) PLUS Loan.

Description: A federally insured loan program available from state agencies, banks, lending companies, and directly from some colleges.
Availability: A Direct PLUS Loan is available from the U.S. Department  of Education.

Applications for a FFEL (Federal Family Education Loan Program) PLUS
Loan are submitted by a college financial aid office to banks and other lenders.
Eligibility: Parents or legal guardians of a dependent student enrolled
in an undergraduate program. Loans are not need-based.

Borrowers must not have a history of credit problems; parents cannot
be turned down if they have no credit history at all. If parents or guardians
do not pass the credit check they may still be able to receive a PLUS loan
if a creditworthy family member or friend endorses the loan—promising to
repay the note in case of failure to repay.

Loan amounts: No minimum; maximum amount is up to the cost of
attendance (including tuition, room, board, fees, supplies, and travel) minus
any other financial aid received.

Disbursement: In most situations the funds are sent directly to the
college in at least two installments based on the school’s billing cycle. If the
amount borrowed is greater than the outstanding balance owed the school, the
parents (or the student, if authorized) will receive the extra funds as a check
from the school. Any such excess funds must be used for education expenses.
Tax issues: Limited federal tax deductibility, depending on family
income, under the HOPE Education Tax Credit.


Interest formula: Variable rate based on the most recent sale of ninetyone-
day Treasury Bills held prior to June 1 of each year, plus a margin. Rates
become effective on July 1 of each year. In 2006, the margin above the index
was 3.1 percent and the variable interest rate was guaranteed not to exceed 9
percent. Rates in 2006 worked out to 6.1 percent.

Fees: The guarantee and origination fees cannot exceed 4 percent, and
some lenders will offer lower fees. Fees are deducted from loan proceeds at
the time of disbursement. In other words, if you are borrowing $10,000 and
the fees are 4 percent, you (or rather, the college) will receive $9,600, but you
will start out owing the full amount.

Repayment: Repayment period of as much as ten years with no penalty
for prepayment. Billing for principal and interest begins within sixty days
of final disbursement to the college. Under certain circumstances, including
unemployment and illness, the borrower may request a temporary deferral (or
forbearance) of principal and interest payments, although interest continues
to accrue.

There are several repayment plans:
• A ten-year plan with a minimum monthly payment of $50, with
the amount based on a prorated portion of the total amount due
• A graduated monthly payment plan that starts out low and
increases gradually during the repayment period
• An extended plan that spreads out repayment of the principal
over a longer period
Certain FFEL PLUS lenders will also offer another option:
• A plan that adjusts the monthly payment based on family income
Special programs: Some state agencies, state colleges, and other lenders
may offer interest rates discounted below the official index plus margin. Some
lenders may offer additional interest rate deductions for automatic payment
from a checking or savings account.
How to apply: For a Direct PLUS Loan, a combined application and
promissory note is available through college financial aid offices.


For a FFEL PLUS Loan, parents must fill out an application available
through the college financial aid office; after the school certifies the application,
it is made available to lenders for evaluation.
Read More : PARENT LOAN FOR UNDERGRADUATE STUDENT (PLUS) PROGRAM

The Student Loan Fiasco

Can you imagine ripping off a student for a piece of cake? Or maybe a candy bar or a handful of popcorn? In 2007, the student newspaper at the University of Texas broke the story that its financial aid office was using treats as a criterion for the lenders that the school endorsed.

The staffers in the financial aid office pigged out on free barbecue lunches, after-work cocktails, lasagna, cupcakes, and other goodies that competing lenders provided. Jenny Craig isn’t the only one who would have disapproved. The office workers seemed more keen on filling their own stomachs than finding the best, most competitive lenders to place on their preferred lender list.

The dubious behavior didn’t stop with ice cream and barbecue
beef. The university’s director of financial aid was fired after it was
discovered that he had financial ties to a student loan company that
the school was recommending.

Unfortunately, the Lone Star imbroglio is hardly a fluke. Investigations
into what’s really going on in financial aid cubicles across the
country have uncovered other appalling business practices.

How financial aid offices behave is critical because millions of college
kids and their families can’t pay for a college education without
loans. Families borrow roughly $85 billion a year for college, and this
captive audience has attracted lenders who want to play financial hardball.

Some families began realizing they were being played for patsies
when an upstart lender, My Rich Uncle (www.myrichuncle.com), took
out newspaper ads in 2006 that accused some colleges of accepting
“payola” and “kickbacks.” The schools that engaged in this unscrupulous
activity would pocket the money or various perks after agreeing
to put the bribing lenders on their preferred lending lists and to bar
students from borrowing through competitors. Lenders are extremely
eager to land on a school’s preferred lists because families rely heavily
on them when selecting loans. The lists are supposed to contain loan
companies that will provide the best terms and rates for students.

Ultimately, the New York Attorney General’s office and others began
investigating, which led to a better picture of what was happening.
Here are some of the shenanigans that investigators uncovered:
College administrators were serving on lender boards of directors
and getting paid for their time. In even more extreme cases, lenders
paved the way for college officials to buy shares of their stock at cheap
prices that were later cashed in for tremendous profits.

There was also lots of nickel and dime stuff. Lenders rewarded aid
officers with tickets to the Rose Bowl and other sporting events. One
bank memo uncovered during an investigation by U.S. Sen. Edward
M. Kennedy, chair of the Senate’s education committee, suggested
employees bring a massage therapist to financial aid offices to provide
five-minute massages. The same bank suggested that all-female offices
would love complimentary pedicures and manicures.


In some cases, schools endorsed lenders and in return the schools
received a percentage of loan profits. Here’s how the arrangement still
works: A lender hands a school a large pot of money to lend to students
who wouldn’t otherwise qualify for loans because of credit problems.

These are sometimes called opportunity pools. In return, the college
recommends the lender for its preferred list.
College officials, who participate in this cozy arrangement, argue
that the schools don’t benefit from this influx of dollars, needy students
do. But their spin leaves out some troubling details. When a college
puts a lender on a preferred list in exchange for extra student loan
funds, the question that seems to be lost in this transaction is this: Is
this lender offering the best deals for the students? If not, the students
and their parents are getting saddled with inferior loans just so the
school can grab some extra cash.

And the questions don’t end there. The money in these opportunity
pools are private loans, which, as you’ll soon learn, are the worst
type of debt. The interest rate on these loans is rarely capped, and
there are few consumer protections.

These incestuous, hidden relationships extend beyond placing
lenders on preferred lists and making it difficult for students to look
elsewhere for loans. At some schools, financial institutions have
manned campus call centers that field inquiries from students asking
questions about financial aid. In many cases, students have no idea
that a lender, rather than a school financial aid officer, is providing the advice.

Lenders don’t seem to have overlooked any opportunity to reel in
potential customers, which is why lenders are just as interested in students
when they are on the verge of graduating. At some schools, for
instance, graduating seniors are required to attend an information session
that discusses loan consolidation and other concerns that could be
relevant to new graduates. In fact, some schools won’t allow students
to graduate until they sit in on a session. What these kids could be attending,
however, is a thinly disguised infomercial.

It is not hard to figure out why lenders want to talk with departing
graduates. The industry makes money on consolidating the debt that
students have accumulated over several years.


Obviously, the behavior mentioned in this chapter is despicable.
Some of the culprits have cleaned up their act, but others haven’t. If
you must borrow money to pay the college tab—and most families
do—you’ll learn how to protect yourself in the next four chapters.


Action Plan
Unfortunately, you can’t assume that a school will always make the
best recommendations for families who need to borrow money. Remain skeptical.
Source: The College Solution: A Guide for Everyone Looking for the Right School at the Right Price

Facing Your Student Debt Demons

If you pay your student loan bills every month, and then try to forget the giant pile of debt to which your loans are attached—stop! In order to work toward paying off your student loan debt, you need to be aware of the existence and the amounts of each loan.

You no longer should think about whether you borrowed too much, or if you should have rejected the part of your student loan you used for spring break. Your new focus is on making small changes to pay off your loans faster without impacting your life. The first step on this path is looking up the specifics of all your federal loans in the National Student Loan Data System.

Facing Your Student Debt Demons
Where do you begin when it comes to dealing with your debt? Figure out what your starting point is by taking the following pop quiz to find out how much you really know about your student loans. If you don’t know some of the answers, don’t worry. This quiz comes with instructions for creating a kind of “cheat sheet” for getting the details on your loans.
1. How many different federal student loans do you have? _____
(You could have two or more per semester you were in school, and don’t forget loans for graduate school or for any community college or summer courses at other universities.)
2. Are they all consolidated into one loan? ___ yes ___ no
3. How many are subsidized? _____

4. How many are unsubsidized? _____
5. Who are the servicers on each student loan? (Use an additional sheet of paper if you have more servicers than can fit in the spaces provided.)
_________________________________________________________
_________________________________________________________

6. Do you have the contact information in a file? ___ yes ___ no
7. Do you know where the file is? ___ yes ___ no
8. Do you know your interest rates on every single loan?
___ yes ___ no
9. If you put one loan in forbearance or deferment—temporary hold on making payments—did you remember to hold others?
___ yes ___ no

How did you do? If you didn’t know all the answers, you are not alone. Whether you just graduated from college or you’ve been out of school for a decade, it’s not always easy to keep tabs on eight semesters of loans—or more if you went to grad school or took five or six years to graduate—when each could be with a separate servicer. Luckily, the federal government offers a free Web site (www.nslds.ed.gov) where you can locate all of your federal loans, what servicer they are with, and the details of how much you owe. By accessing this information you can build a kind of cheat sheet to help keep track of your loans.
Read More : Facing Your Student Debt Demons

The National Student Loan Data System (NSLDS) PIN

With the information in the National Student Loan Data System, you can find out your interest rates and get copies of your loan contracts by calling and requesting the necessary information from your current servicers with the phone numbers provided within your financial aid review. Using the National Student Loan Data System Web site will involve taking the following steps.

FIND YOUR PIN
The National Student Loan Data System requires a PIN (personal identification number) to access your federal student loan information. You have a PIN to access your student loan information for the same reason you have one to access your bank or credit card information. You have an account with the federal government and/or accounts with the lenders backed by the federal government. What’s contained in the Student Loan Data System is a large part of your student loan information.

If you received aid since the beginning of electronic financial aid applications, you created a PIN for retrieving your FAFSA (Free Application for Student Aid) that was your first step in getting federal loans to attend college. The best way to get started on finding your loan information is getting or recovering your PIN at the PIN Web site: https://pin.ed.gov/ PINWebApp/appinstr.jsp. If you’ve used your PIN in the last 18 months to check on your student loans and you still remember it, you have all the information you need to log in to the National Student Loan Data System.

You can jump to the next section of this chapter. If you don’t remember your PIN and you have used it in the last 18 months, you have to go to the PIN Web site: www.pin.ed.gov, which you can use to generate a PIN or retrieve your PIN. You will have to answer a question based on information you provided on your FAFSA for security.

For example, if you selected “What is your mother’s maiden name?” as your challenge question when you received your PIN, you would need to provide your mother’s maiden name in order to get a duplicate PIN. If you don’t have one, you can create a 4-digit PIN at https://pin.ed.gov/PINWebApp/appinstr.jsp. You will need to provide your Social Security number, full name, address, e-mail address, and security question (a question about yourself for security purposes). Select a question that you can always answer and spell the same, such as your mother’s maiden name, the name of your elementary school, or the name of the hospital you were born in. But you still want to be careful about capitalization and abbreviations. The PIN Web site is case sensitive. Also, don’t fill in an answer that you sometimes abbreviate. For example, if your challenge question is “What is the name of your high school?” and you attended Century High School, you won’t be able to access your account if you type in CHS. Name changes will not affect your PIN for all of your previous loans. Your PIN is attached to the name you had when you borrowed the money. However, if you return to college, you need to create a new PIN under your new legal name.
Checklist for Finding Your Student Loan PIN

• Remember that your student loan PIN is the same PIN you used when you filled out your FAFSA when applying for student aid. Now, it is the number that identifies you for retrieving all your federal student loan information.
• If you don’t have your PIN, you can request a new one at the PIN Web site: www.pin.ed.gov.
• Use the last name you had when you were in college with your PIN.
• You will need to request a new PIN if you haven’t used your PIN for applying for student loans or retrieving your student loan information in the last 18 months.

Read More : The National Student Loan Data System (NSLDS) PIN

Default Rehab Student Loan

Whether you went to graduate school, medical school, or law school, organizing four years of student loans is hard. By the end of college, you could have two or three loans per semester for your bachelor’s degree—totaling a whopping debt if you finished in four years instead of five or six. You could have even more loans if you went on to graduate school.

While organizing a mountain of debt might seem like an uphill battle, you have some advantages. Your federal student loans can be easily located if you forget one or two. You have more possible payment plans to make your loans affordable within your budget, options for temporary payment reprieves, and ways to recover financially from late or missed payments than nearly any other kind of loan.

Default Rehab
You were just turned down for a mortgage, and you don’t understand why. You’ve maintained steady employment for the last five years, you pay all of your bills on time, and the required down payment is sitting in your bank account. When you ask the banker what happened, you are told you defaulted (failed to pay) on a student loan. It doesn’t make sense to you because you’re shelling out hundreds of dollars every month to your student loan servicers.

What happened? Odds are you forgot about one of your student loans and it went into default. This is fairly common. In a ten-year study conducted by the National Center for Education Statistics that followed the graduating class of 1993, 20 percent of those who had at least $15,000 in Stafford Loans had defaulted on at least one of their education loans. Others, including myself, thought they were making payments on all their loans but misplaced information on one loan and ended up in default.

We were further saddled with penalties in addition to seemingly neverending interest. If payments had been organized, this never would have happened. That’s why it is crucial to stay organized and up to date on your student loans, and repair a default situation as quickly as possible. When you look at your chart, pay attention to any loans that are in default status and the ones you forgot about that could go into default status. After all, if you can catch them before the default is official, you can contact your servicer and start making payments before you have to go through default rehab.
Read More : Default Rehab Student Loan

How Defaults Rehab Affect Your Loans

Whether you are currently in default or on the brink, you need to know what the penalties are. This way you can contact your servicer to set up payments if you haven’t fallen off the cliff yet. If you have, you’ll need to contact your guaranty agency so you can bounce back from your default.
Based on information from www.studentaid.ed.gov, possible penalties for defaulting on a student loan include the following:

• Your college transcripts could be held.
• Student loan repayment program options become more limited.
• You may become ineligible for additional federal student aid.
• Your account may be turned over to a collection agency and you’ll have to pay additional charges, late fees, and collection costs, all of which become part of your debt.
• The default could show on your credit reports—and affect your credit scores—for years into the future.
• The drop in credit scores could cause you problems qualifying for credit cards, a car loan, a mortgage, or renting an apartment. 
• Federal and state income tax refunds could be withheld and applied to student loan debt on defaulted loans.
• Portions of your wages could be garnished.
• Employers who check credit may reject you as a job candidate.
• You could get turned down for a government job.

But what can you do you about it? Find out the status of your defaulted loans. According to Martha Holler from Sallie Mae, which services both private and federal loans, there are two initial steps you should take if you are delinquent and nearing default:

1. It takes 270 days of making no payments to default on your federal student loans. However, you could have a loan listed as seriously delinquent because you have missed a few payments but haven’t missed enough to reach default yet. If this is the case, talk with your servicer and arrange to start making payments again immediately. Whew! Crisis averted.
2. After 270 days of nonpayment, federal regulation says that your lender may consider your loan in default. At this point, your loan is transferred to a guaranty agency that works on behalf of the U.S. Department of Education to collect your loan. If you are past the 270-day mark but still in the first 60 days of the default collection stage, you can avoid the collection fee if you contact your guaranty agency and pay the balance in full.

But what if you don’t have a few thousand dollars lying around to pay off your defaulted loan immediately? Don’t despair. There are ways to rehabilitate your default.
Read More : How Defaults Rehab Affect Your Loans

Student Loan | Tips and Parent Guide

When you put the keyword in google form to find “The Best Student Loan” and do enter then you will find results sites which provide a lot information about such as Bush Student Loan, Edsouth Student Loan, Edfinancial student loans, student loan data base, student loan products and etc. But how to make these information to find the best student loan as what you want and give you understanding about do you really need a student loan or not.

Here’s some tips to find out , these tips also work as parent guide which looking for the best student loan for their children:

1. Learn pros and cons of student loans
You need to learn this subject first to having complete opinion about it. How the pro and cons debate about. Subject “pros and cons of student loans” will give you basic information about student loan and this is a must subject to learn before it’s too late.

2. Student loan data base
There are a lot of places on net which provide student loan data base. And all what you should do is put keyword “student loan data base” and you will find tons of information about student loan data base.

Observe the information from student loan data center and find out the best for you.

3. Student loan products
Learn and find the best student loan product that fit for you , concern to requirement , payment, interest rate and how you apply it. But you must care a lot about student loan products because each company who offer student loan products usually have special requirement about special product which may you choose.

4. Talk to someone you know who have student loan
If you know someone have student loan, come and make discussion with them. Ask their experience and their opinions, may you will have a good guide or directions from them.

5. Discuss with your parent
Talk to them about it, discuss and ask their opinions also their support then whatever your choice will be, it will not be your 100% responsibility because your choice has approval from your parents at least your choice is the best choice of yours and parents.

The key is do not make hasty decision quickly, observe and observe. You must have the best decision before it’s too late and talk into financial consultant may be a way for you but you also must consider the cost. Or you can learn how to find alternatives to student loan from this book:




This book talk and describe completely about student loan from beginning how to find until how to pay also others subject that may happened associated with your student loan in the next day.

But if you want to know about personal finance , you can read this books :



To continue your observations and learn about education you can read the articles and go to the links that I provide in this blog, thanks for welcome and comment.This is dofollow blog.