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The federal government and colleges allocate financial aid based on the information reported on the Free Application for Federal Student Aid (FAFSA). There is no hard maximum income for aid eligibility because the FAFSA takes many factors into account. You may qualify for several types of aid, some of which have no income requirement at all. You'll need to understand which factors impact your eligibility and which types of aid are available to best plan for financing your college education.
Non-subsidized student loans, also referred to us unsubsidized student loans, are a category of student loans guaranteed by the federal government. BusinessDictionary.com defines a non subsidized student loan as “a loan in which interest is applied as soon as money is dispersed to a borrower. With an unsubsidized loan, the borrower will be charged interest on top of interest that has already accrued on the account.” Non-subsidized student loans are not based on financial need; they are availed to those students who do not require a subsidy on the interest levied on the student loan. A non-subsidized student loan cannot…
As college tuition continues to soar, more perspective students need financial aid to even think about going to school. However, it is not as easy as just needing the money, applying for it and getting it. A lot of it depends upon your academic standing as well as the financial status of your family and yourself. There are certain things that can disqualify you from getting different types of student aid. Note that each state and each college may have different rules about who qualifies for student aid and why.
The dates for financial aid disbursements of student loan money vary by lender. Financial aid disbursed through the federal government runs on a set schedule, whereas private lenders work case by case. A student's college or university is usually more willing to ignore or relax a deadline for tuition payment when waiting on a disbursement of federal aid as opposed to private lenders.
If you've had your financial aid suspended, it's likely because your grades slipped and you're not making satisfactory progress. If your grades have plummeted or you've had to briefly withdraw from school due to personal hardship, your petition for reinstatement should succinctly explain what led to your current situation, while assuring the financial aid committee that you're going to excel in the future.
A defaulted student loan can wreak havoc on your finances, particularly if your loan agency is pursuing you for the funds via aggressive collection tactics. In some instances, the defaulted loan should have a cancelled status, generally because of a serious matter. This might be a physical issue -- such as a severe disability -- or because the school in question became unaccredited or closed while you were attending.
A student who has separated or divorced parents often needs to discuss the college financial aid application process with both parents. They need to decide whether each parent will help to pay for college. The conversation may become complicated if the parents aren't on the same page. Even if the parents don't agree on who will contribute toward the student's college tuition and expenses, the student often must still include parental information on the financial aid documents for loans and scholarships.
Students who have limited credit history or low income must sometimes include a cosigner to obtain a student loan. However, when a cosigner dies, the lender no longer can rely on him to repay the loan if the primary borrower defaults. Depending on the type of lender, the primary borrower may or may not retain liability for the loan.
Financial aid can open the door to a college education. College tuition is costly and continually rises. Some parents pay for their child's education so the child doesn't have to worry about student loans. But when a child must take out a loan to acquire financing for school, obtaining an approval might necessitate a cosigner.
It can be stressful to take on large loans to pay for things such as a college education or a house, but it's important to always make your payments on time for the loans you have under your name. Failure to make loan payments on time can affect your future access to credit, which may close significant doors for you later on in life. If you are unable to keep up with your monthly loan payments, you could choose to defer your loan. Before making that decision, however, there are a number of things to consider.
A college education can, in some cases, exceed the cost of a new home. It follows that, without financial aid, many children won't have the option to attend college. Whether your bankruptcy will affect your child's financial aid will depend on the type of financial aid your child is seeking. It may also depend on the type of bankruptcy you filed and how long ago you filed.
Approximately 67 percent of all undergraduates attending college full time receive financial aid of some type, according to Sallie Mae. Student aid may consist of loans, scholarships, work-study programs or grants. Other than certain merit-based scholarships, student aid programs require proof of financial need, and assets are one factor considered. However, being a homeowner will not automatically disqualify you or your child from student aid programs.
The Internal Revenue Service offers a tax credit to encourage employers to sponsor college programs for their employees. Employers are allowed to deduct all payments for college expenses as a form of compensation. Employees may have to report college benefits from their employer as income, depending on the amount of the benefit and the purpose of the college courses.
The National Center for Education Statistics (NCES) estimates that the cost for undergraduate tuition, room and board for the 2009-2010 academic year was $12,804 for students in public institutions. The cost for students attending private institutions was $32,184. The NCES reports that in the 2007-2008 academic year, 80 percent of full-time undergraduate students received financial aid to assist with their college costs. Money for college is available via three basic forms of funding: scholarships, grants and loans.
Due the cost of a college education, some college students must take out student loans that are paid back once the student gets a job after college. If you cannot pay the student loans based on the repayment schedule you are assigned when you take out the loan, the loan goes into default and damages your credit. Even if you file for bankruptcy, you are still responsible for paying back your student loans. Once your student loan goes into default, it is up to you to begin the process of fixing it.
When you co-sign on a student loan, you assume the responsibility for repaying that debt if the student that signed for the loan proves unwilling or unable to do so. You can co-sign on federal loans such as Sallie Mae, or federal direct loans, but you can also co-sign on state backed loans and private loans from banks or credit unions. If you fail to repay the debt after the student defaults on the loan, this can have adverse consequences for you as well as the primary borrower.
Student loans can represent a severe financial burden, particularly if you have difficulty finding a job after you leave school. However, inability to secure a lucrative job does not prevent you from having to repay your student loans. If you fall 180 days or more behind on your loans, your lender will likely consider your loan in default and may take aggressive action to recover your unpaid student loan debt, including garnishment of your wages. If you are an Illinois resident and your student loans are in default, you may still have options available to negotiate repayment.
Many students borrow for their education through the federal government's Stafford student loan program. When you are nearing your graduation date or otherwise leaving school, begin thinking about how you are going to repay your Stafford loans. The process varies slightly depending on when you got your loans, how much you borrowed and how quickly you want to repay the debt.
The most common type of federal student loan is the Stafford loan, which is available to all students who meet the government's basic eligibility guidelines. These include being a citizen, national or permanent resident, attending an accredited school and being enrolled at least half-time. However, students can only borrow a limited amount per year. Funds can only be used to pay for school, so students cannot borrow more than the difference between other financial aid and the cost of attendance. In addition, the federal government caps a student's borrowing each year, depending on the student's year in school.
Many student loans are granted by the federal government, but sometimes private lending firms lend money insured by the government against default. Whichever type of entity the borrower must repay, if default occurs, the collection process is similar; the government eventually pursues the borrower to collect. Defaulted loans can negatively affect income and credit scores for a lifetime. To avoid this unpleasant consequence, borrowers can take advantage of options including loan consolidations and forbearance.
One way students are able to lower the cost of their college education is through financial aid. Many institutions offer this aid, including the federal government, state governments and colleges. Businesses and groups make financial aid available, as well. Some of the aid is specifically for students from families with an income below a specified level.
When you default on a federal student loan, the government has the power to withhold your tax refund. This hold is referred to as a tax refund "offset." The withheld refund is used to offset the balance of your student loan. Student loan tax offsets are handled by the U.S. Treasury Offset Program. Once the U.S. Treasury authorizes an offset, you will receive an offset notification letter. The offsets continue each tax year until your debt is satisfied. Depending upon your circumstances, it is possible to get a release on the offset hold on your income tax return.
Applying for financial aid to fund your college education can seem complex and the paperwork is detailed, however you can receive financial aid if you are a married student. Usually your parents are considered primarily responsible to help you out financially during college, so FAFSA forms always ask for parental information. If you are married, you will be asked for different financial information, but you are still potentially eligible for financial aid, depending on the income level in your family.
An administrative forbearance is a temporary postponement of your student loan payments, granted by your lender. There are two types of administrative forbearances -- general and mandatory. A forbearance can be granted by your lender in conjunction with several different Department of Education programs or for a temporary financial difficulty. Mandatory forbearances are initiated by the Department of Education and are not subject to the lender's discretion.
If another business sells your business supplies or equipment on credit, it may offer you a sales discount for paying off the invoice early. (See References 1, Purchase Considerations For Merchandising Businesses) The amount you owe is called an account receivable from the seller’s perspective. An invoice that offers a sales discount typically shows its credit terms in the following format: 1/10, n/30. The “1” represents the percentage discount. The “10” represents the number of days in which you must pay in order to receive the discount. The “n/30” means the net balance is due within 30 days if you…
Settling credit card debt for less than the full balance is a well-known way to get out of debt, but settling on an auto loan is far more difficult. A car loan is a secured debt, meaning that if you don't make good on your payments, the lienholder can simply take back the car. This gives you very little leverage with which to negotiate a settlement. It is possible to make a deal with the bank to settle on your car loan, but doing so usually requires you to be behind on your payments to the point that the bank…
Student loans are a ubiquitous part of higher education: the average college senior graduates with a student loan debt of $24,000, as of 2009. With mounting student loan debt and dim job prospects, it can become difficult to pay the minimum due on your student loan, resulting in late payment penalties. In addition, interest charges can add up to hundreds of dollars a month, making paying down your loan seem impossible. While you can't eliminate student loan interest, you can lower the interest and eliminate penalties.
Most private student loans offer fewer borrower protections than government-funded student loans. Private student loan lenders follow the same rules and strategies for collections as most other unsecured debts. You are in technical default on your private student loan if you fail to make one or more payments in a timely fashion.
The high cost of college tuition prevents many people from attending school. However, federal aid is available to students in the form of grants and loans. Federal lenders take several factors into consideration when approving applicants for funding, such as the applicant's income and his parent's income. Some student loans allow a cosigner, but before approaching your parents to cosign your loan, understand the income and credit requirements for federal loans.
When acquiring funding for college, you have the option of applying for federal aid or getting a private student loan from a bank. Private student loans are different from federal loans. Federal loans do not require a credit history or credit score, while private loan lenders do examine credit. Another difference is the ability to settle these loans. The U.S. Department of Education seldom works out settlement agreements on federal loans, but if you have a private student loan and are unable to make the payment, you can possibly negotiate and settle for less than you owe.
It is not unusual to have difficulty paying back student loans, especially if your monthly payments are high compared to your other monthly bills. Before formally reducing the payment, go over your budget and see if there are other places you can make cuts. If you are spending a lot on eating out, cable television or cellphones, for example, cut these back before going after your student loan payments. However, if you are having trouble just paying your rent and utilities with your student loan payment, there are ways to reduce the payment.
If your spouse dies, one of the last things you want to have to think about is repaying thousands of dollars of student loan debt your spouse incurred getting an education. Some types of student loans are discharged when the borrower dies, while other types of loans require that you pay, even though the borrower died.
A Coverdell Education Savings Account, called a Coverdell ESA, allows your child to receive tax-free savings to pay for college education expenses. The tax benefits are enforced by the IRS, and there are many expenses which won't be covered under the rules for allowable expenses under the Coverdell account. A student loan is one of those disallowed expenses.
College students need to report their income on a variety of documentation, from their tax returns to applications for next year's financial aid, an apartment rental or a credit card. Whether or not you include your student loan proceeds as income depends on the context and the policies of the organization that is asking for the information.
When you finish school with student loan debt, the large monthly payments can be a burden for your budget. Making many small monthly payments can help you manage your cash flow, plus reduce your balance more quickly. When a lender calculates interest on a daily basis, applying payments to your account on a more-frequent basis reduces your interest charges and decreases your payoff amount.
Federal student loans do not require cosigners, but you may need a cosigner to qualify for a private student loan. Private student loan lenders base your eligibility for loans on your income and credit history. If you do not meet the lender’s minimum requirements, a cosigner can help you qualify for a loan and continue your education. In the event that your cosigner dies, your payment obligations may change.
If you default on a debt secured by collateral, such as a car, appliance, boat or furniture, your lender can typically repossess the collateral to recover some or all of the loan balance. Not only will a repossession deprive you of the collateral securing the loan, it can also carry other penalties and consequences.
Lenders and creditors report your credit data to the credit bureaus. The credit information on your report determines your FICO credit score. How well you manage your credit accounts impacts how high or low this score will be. If you have a defaulted student loan, paying that loan will help your credit score.
Many students choose to offset their living expenses with student loan overpayments, as working while going to school is often challenging. Because most private student loans allow you to use the money from your loans for any school-related expense, including textbooks and room and board, getting a student loan overpayment is sometimes as simple as requesting an amount greater than the tuition you owe from your private student loan company.
The Internal Revenue Service developed the tax-sheltered annuity plan with a number of tax advantages to help employees of tax-exempt organizations save for retirement. While the TSA plan is meant to be a retirement program, you can withdraw money for your daughter's college tuition through a hardship withdrawal. Only consider a hardship withdrawal if you have no other options as these withdrawals are taxed and penalized.
Filing bankruptcy affects your finances in several areas, including your credit score. However, a student or parent bankruptcy filing is not likely to have a large effect on financial aid packages. This is because very few types of financial aid consider an applicant's credit and bankruptcy history when making awards.
Student loans paid for your education, but what happens when you can't pay them back? Student loans can't be discharged in a bankruptcy, so they are often the last debt standing when times are hard. For monthly payers, a student loan enters default after 270 days without a payment. Defaulted loans reflect badly on your credit report and prevent you from being able to borrow any further student loans. A defaulted student loan can be approached in several ways, including repayment and rehabilitation. To begin the process of getting your student loan out of default, you'll need to fill out…
The death of a spouse is extremely stressful. That stress can be compounded if your spouse's creditors are hassling you to pay his debts. Whether or not you are responsible for your deceased spouse's debts depends largely on the type of debt being sought. Each state has laws in place dealing with this matter, but the basic guideline is that you may be responsible for some types of debt, including credit card bills.
Grandparents can give their grandchildren the gift of a college education and receive a little something back themselves from Uncle Sam. However, education tax breaks often do not apply to grandparents because they fail to meet the requirements for dependency. Instead, grandparents are more likely to avoid just gift taxes by paying for a grandchild's tuition bill.
Aside from home loans, student loans are one of the largest debts that most consumers will incur in their lifetime. Financing a college education with bank or government funds has become a societal norm. With the rising cost of college tuition and fees nationwide, student loans can grow to tens of thousands of dollars in just a few semesters. One advantage, if any, of students loans is that the timely repayment of the such loans will help your credit score.
The criteria for applying for a guaranteed student loan depend primarily on a student's financial need, proof of U.S. citizenship and enrollment in college. Guaranteed student loans are offered by the federal government and state governments, according to CollegeScholarships.org. The loans provided through the Federal Direct Student Loan Program include The Stafford Student Loan and Parent PLUS Student Loans, the Graduate PLUS Loan. States provide their own student loans based on financial need. The states work with lenders to provide insurance for the student loans through the Federal Family Education Loan Program, according to CollegeScholarships.org.
It’s no secret that college is expensive. Even with a college fund, scholarships and financial aid, you may still need additional help to cope with the rising costs of a higher education. This is where student loans come in. If you’ve exhausted your federal loans or simply don’t like the idea of being in debt to the federal government, private lenders also offer education loans. Defaulting on private loans, however, carries severe consequences.