student loan

Student Loan Consolidation Interest Rates
The interest rates for federal student loan consolidations are based on the weighted average of student loan interest rates. Federal Stafford loans disbursed between July 1, 2006 and June 30, 2008 have an interest rate of 6.8%. Stafford loans disbursed after July 1, 2008 have a rate of 6.0%.
Federal student loans will have different rates depending on type and disbursement dates. For example, rates for Stafford loan disbursed before July 1, 2006 will remain variable until consolidated. Visit StaffordLoan.com or ParentPLUSLoan.com for more details on federal student loan interest rates.
Federal Student Loan Consolidation
Private Student Loan Consolidation Rates
Private student loan consolidation interest rates are variable, based on either the LIBOR (London Interbank Offered Rate) or the Prime rate, plus a margin for borrower and/or co-signer credit. Current LIBOR rate = 4.63%. Which means your first year rate could be as low as 5.63%!-->
Origination fees can range between 1% and 5% depending upon your individual credit or the credit of a co-signer. Any fees that associated with the loan are capitalized (added to the loan) typically at the time repayment begins, which increases the amount borrowed but avoids any out-of-pocket expenses at loan closing.
Undergraduate Private Consolidation Program Description:


Rates


LIBOR + 5% - 8.5%




APR1


7.90% - 11.93%




Fees2


1% - 5%




Max Term


25 years



Max Balance


$150,000


Based upon a $45,000 principal balance, a 300 month term and a LIBOR rate of 2.8% (as of 7/22/08); the Annual Percentage Rate (APR) would be 7.9% for a borrower with excellent credit who received a rate of LIBOR plus 5% and was assessed a fee of 1% of the loan amount.
Private Student Loan Consolidation-->
View interest rate example for graduate private loan consolidation.
Federal Student Loans Overview
Federal student loans supply financial help for students enrolled at schools that participate in federal aid programs. These loans are offered by private organizations under accordance from the U.S. Department of Education through the Federal Family Education Loan Program (FFELP) and the Federal Direct Student Loan Program (FDLP).
Federal student loans generally cover school expenses, including tuition and fees, room and board, books and school supplies, as well as any transportation. Loans can also help pay for technology needs (i.e., a computer) and for necessary dependent care.
Federal Stafford Student Loans
Stafford Student Loans are federal loans made to college and university students to supplement personal and family resources, scholarships, grants, and work-study. They may be subsidized by the U.S. Government or may be unsubsidized depending on the student's financial need.

Federal Student Loan Consolidation
If you're a U.S. college student who is approaching graduation day or a recent college graduate, no doubt you've been contacted by student loan consolidation services. As you wade through all this information, it can be hard to get a straight answer to a simple question: is federal loan consolidation right for you?
First of, what is student loan consolidation? This simply means that if you took out more than one U.S. government loan during your time as a college student, you can combine all of them into one.
If you also owe private student loans that weren't part of your financial aid package, you can consolidate these as well. However, lenders recommend that you don't consolidate federal student loans and private student loans together. If you do this, the new consolidated loan will count as a private loan, and you will lose all the benefits that come with your federal student loans, such as student loan deferment if you go to graduate school.
So what are the advantages and disadvantages of consolidating your federal student loans? This questions depends partly on how much you owe, how much you've already paid, and other personal financial variables.

Stafford Loan(student loan)
Both subsidized and unsubsidized loans are guaranteed by the Department of Education either directly or through guarantee agencies. Nearly all students are eligible to receive a Stafford Student Loan regardless of credit score or other financial issues. Both types offer a grace period of six-months, which means that no payments are due until six-months after graduation or three months after the borrower becomes a less-than-full-time student without graduating. Both types have a fairly modest annual limit. The limit for the academic year beginning in 2007 is $3,500 per year for freshman undergraduate students, $4,500 for sophomore undergraduates, and $5,500 per year for junior and senior undergraduates.
Stafford Loan student loan
Parent PLUS Student Loans
The Parent PLUS Student Loan is available to parents of students enrolled at least part-time in a program included within a formal list of participating post-secondary institutions. PLUS loans differ from other federal student loans like the Stafford and Perkins loans in that it can cover a larger amount of the cost of education, has a higher interest rate and the commitment is undertaken by the parent, rather than the student. PLUS Loans are also available for graduate and professional students
Stafford Loan Frequently Asked Questions
I completed my MPN, what's next?
Once you have signed your Master Promissory Note, we reach out to your school to request certification. The school will then certify the loan for the dollar amount that you were awarded.
How long does it take to get my funds?
It all depends on what date your school sets the disbursement for. Check with your financial aid officer for more information.
Can you tell me what my balance is on my Stafford loan?
If you are wondering how much you owe in Federal Stafford Loans, please call the US Department of Education at 800-433-3243 or you may look up your student loans on the National Student Loan Database.
How much am I eligible for?
To see the loan limits chart for undergraduates, please see above If you are a graduate student, please see above.
Why does the loan need to be certified?
Certification is necessary because Stafford loans are federally guaranteed loans. Your school must verify that you are enrolled in classes, and that you are maintaining satisfactory academic progress in order to continue to be eligible for Stafford loans through the federal government.
What is the interest rate for Stafford Loans?
For the 2009-2010 school year, the interest rate on a Subsidized Stafford Loan is fixed at 5.6%. The interest rate for Unsubsidized Stafford loans is a fixed rate of 6.8%. The Stafford loan for graduate students is at a fixed rate of 6.8% for Unsubsidized and Subsidized Stafford loans. Please note, that interest rates on Federal Stafford Subsidized and Unsubsidized Loans change yearly but will never exceed 8.25%.
What's the difference between unsubsidized and subsidized loans?
Subsidized loans are awarded based on financial need. You will not be charged interest before you begin repayment or during periods of deferment. The federal government "subsidizes" (or pays) the interest during these times.
Unsubsidized loans are not awarded based on financial needs. Any eligible student can take out Unsubsidized Stafford Loans. You will be charged interest from the time the loan is disbursed, to the time the loan is repaid in full.
Are there specific schools that accept Stafford loans?
Yes, Stafford Loans can be used at any eligible school which accepts them. Take a look at the Student Loan Network Eligible Schools Directory for information about which schools accept which loans. If you are unsure or think your school participates in the Direct Loan Program, contact your financial aid officer.
What are the deadlines for Stafford Loans?
Unfortunately, there is no single set deadline for Stafford Loan applications; you will need to contact your school's financial aid office to obtain deadlines for your specific institution.
How much can I borrow under a Stafford Loan?
The amount you can borrow is based on your grade level and your status as a student. Independent students may be eligible to borrow more because they are paying for college without assistance from their family. Please review the current Stafford Loan limits chart for borrowing limits and to determine dependency status.
Based on your award letter, you may not always qualify for the maximum Stafford Loan amount. For additional loan funding, consider alternative student loans which allow you to borrow up to the total cost of education less other financial aid received.
the Stafford Loan
The loan is deferred until graduation; can we pay on the loan during the 4 years?
Yes, but you will need to place your loan into repayment and then defer it while in school.
Are there penalties for early payment, or if the loan is paid in full before scheduled (deferred) payments begin?
There are never early payment penalties for federal student loans.
What are the repayment options for a Stafford Loan?
The standard repayment term for this loan is 10 years. You may be able to extend repayment by deferring or consolidating your Stafford loans.
You can choose one of the following plans:
The Standard Repayment Plan requires you to pay a fixed amount each month based on your principle and interest but will be no less than $50 or the interest that has accrued.
The Graduated Repayment Plan allows you to make lower payments at the beginning of repayment then, over time, your payments begin to increase. Each of your payments must equal the interest accrued on the loan between scheduled payments and initial payments general cover interest only for the first few years.
The Income-Sensitive Repayment Plan bases your monthly payment on your yearly income and your loan amount. Payments may change as your income rises or falls.
The Extended Repayment Plan is for borrowers with FFELP loans totaling more than $30,000. This plan offers a choice of fixed or graduated payments over a period of up to 25 years.
Do I have to reapply every year in order to get the Stafford Loan?
A very common question. You have to apply every year because each year, the amount of aid you are eligible for is determined by your FAFSA. Federal student loans do not "renew" automatically.
Stafford Loan student loan
I was awarded a $3,500 Stafford loan. When I got my final disbursement, the total was less than $3,500. Why did I receive less than what I was awarded?
There may be fees associated with the Stafford Loan. The fees vary by lender and can include a 1% default fee plus a 3% origination fee. The 1% default fee is a fee used by the lender to create a reserve to protect the loan program in instances when borrowers default on their loans. Default and origination fees, if charged, are deducted from the loan funds before they are sent to the school, but you will ultimately be responsible for repaying the full amount of $3,500
How is my EFC Calculated?
The federal government proscribes an official federal EFC calculation. This calculation determines family resources available from a family's income (less allowances for taxes and living expenses) and assets (less allowances for retirement). A percentage of these available amounts are earmarked as EFC. You can calculate an unofficial EFC right on the Internet.
Why do some schools use an EFC that differs from what my Federal EFC (on my SAR) says?
Some schools use an Institutional EFC calculation to determine eligibility for non-Federal sources of financial aid. This calculation usually considers additional family resources, like home equity, that are not part of the Federal EFC calculation. to learn all about the financial aid award process. www.studentloanconsolidationrate
Can I get a Stafford Loan if I have poor credit?
Yes. The Stafford Loan is not a credit-based loan - it is a need-based loan and your eligibility for it is governed by your FAFSA submission, not your credit report.
What are the Stafford Loan cancellation policies?
Your school must notify you in writing whenever your account is credited with your loan proceeds. This notification must be sent to you no earlier than 30 days before and no later than 30 days after the school credits your account. You may cancel all or a portion of your loan if you inform your school within 14 days after the date that your school sends you this notice or by the first day of the payment period, whichever is later. Your school can tell you the first day of your payment period.
Check out our financial aid forum to post questions and engage in conversation with peers and industry leading financial aid experts.
How can I bridge the financial gap between my total cost of education and the amount of financial aid I was awarded?
There are four main options available to students and families:
Contributions from Savings. A family might consider using savings or investments to meet educational costs. Families with assets that can be liquidated for educational expenses generally have less reliance on financial aid and pay less in fees and interest expenses.
Contributions from Income. Some families might be able to meet educational expenses by allocating funds from their current budget. This option requires a family to closely analyze their income and expenses and determine an amount that they can pay on an ongoing basis. Adjustments may have to be made to existing household expenses to afford an amount to allocate from income.
Tuition Payment Plans. If the school participates in a tuition payment plan, a family can pay the remaining tuition balance in monthly installments which can range from a nine to twelve month period of time.
Alternative (Private) Student Loans. Consider alternative loans as a means to meet educational costs not covered by federal aid. For more information, read our page on alternative student loans.
Which student loan programs are best?
While there are no absolute ways to determine which loan programs are best, there are some general guidelines and areas that will help to help you choose the most affordable loan option.
Interest Subsidy -- Subsidized loans (in which the government or other agency) are far better than unsubsidized loans (in which interest must be paid by the borrower from the loan's disbursement).
Lowest Cost -- The loan's interest rates and fee structure determine the amount of a loan's finance charges. Some loans (like mortgages) allow you to pay up-front fees in exchange for a lower interest rate. You should consider this feature in relation to how long you plan to repay the loan. The loans with a longer repayment period are often less expensive with lower interest charges and a slightly higher up-front fee.
Interest rate options -- Programs offer different interest rate options. Some are fixed and stay the same over the life of the loan. Some are variable and tied to the Prime interest rate (or other index). When the interest rate changes also varies among programs. Some change annually, some quarterly and some as often as monthly.
Flexibility -- Consider the repayment options offered. Are payments required during repayment? Can the principal be deferred? Are alternative repayment programs (graduate repayment or income sensitive, for example) offered?
How to choose an alternative loan program?
There are many ways to compare alternative loan programs. And oftentimes, a student's and family's unique circumstances will determine what loan program makes the most sense. Alternative loan programs differ in who the borrower is (the student, parent or other co-applicant). You should refer to the page on Alternative Loans for more information.