Graduate and professional students can borrow under the PLUS Loan Program. The terms and conditions applicable to Parent PLUS Loans also apply to Graduate PLUS loans. You may borrow up to your cost of attendance (determined by your graduate or professional school) minus other financial aid including other loans. You must not have an adverse credit history and repayment begins after the loan is fully disbursed. If you are still enrolled you can qualify for an In-School Deferment to avoid making payments. Contact your school or your servicer once the final year's disbursement is made to request the deferment. The loan carries a fixed rate of 8.5 for FFEL loans and 7.9% for a Direct loans. The standard repayment term is 10 years, but can be up to 25 years depending on your total borrowing.
In order to receive a Graduate PLUS Loan, you must first complete the Free Applicaton for Federal Student Aid (FAFSA) and have used your maximum annual loan eligibility under the Federal Subsidized and Unsubsidized Stafford loan program.
You can use our LoanFinder to compare and apply for a Graduate PLUS loan
source:estudentloan.com/
Saturday, June 14, 2008
Federal Graduate PLUS Loan Review
Thursday, June 5, 2008
Student Loan Xpress Closes; Is Sallie Mae Leaving the Federal student loan program?
According to the San Diego Business Journal, CIT has closed down it’s student lending company Student Loan Xpress.
Also, there are rumors swirling around that Sallie Mae may drop out of the FFELP lending program, leaving millions of students in the lurch.
The Chronicle of Higher Education is reporting that executives at Sallie Mae are eagerly waiting new lender rules from the Department of Education which are expected to be unfavorable to lenders. They report that:
“Sallie Mae executives, including the company’s president, C.E. Andrews, and chief executive, Albert L. Lord, have scheduled a conference call with colleges for Wednesday to discuss “critical information” about the lender’s participation in the federally guaranteed student-loan program, according to a company announcement.
Sallie Mae officials have not explicitly described any plan to stop issuing government-backed federal loans, though several officials involved in student lending who asked not to be identified by name because of the uncertainty, highly fluid nature, and huge stakes involved รข€”have described company officials as promising to take that step if the Education Department offers terms they deem inadequate today. Sallie Mae officials declined to comment on the record.”
Friday, May 9, 2008
Credit Unions Offer Themselves as Partial Solution to Looming Student Loan Crisis
In the last six months alone, since legislators eliminated over $21 billion in subsidies to student loan lenders in the Federal Family Education Loan Program, at least 44 FFELP lenders have stopped originating federal student loans.
This exodus of lenders from the federal student loan program, combined with the current credit and liquidity crunch resulting from an epidemic of defaulted mortgages, may leave many college students scrambling for money for school this fall.
In an effort to help avoid a student loan crisis before it starts, a group of credit unions serving students in California, Texas, and Wisconsin is lobbying for federal subsidies that would allow credit unions to provide significantly more loan capital for students.
Last September, federal legislation set two lender subsidy rates on federally guaranteed student loans, one rate that applies to for-profit lenders and a second for state-chartered nonprofit agencies, explains Paul Basken of The Chronicle of Higher Education.
When those rates were set, credit unions, which are essentially nonprofit banks, were left out of the picture, neither subject to the for-profit lender rate nor eligible for the nonprofit rate which is guaranteed only to state-chartered lenders.
Now, writes Basken, as more for-profit bank and nonbank lenders abandon the FFEL program each week, the credit unions seek legislation that would make them eligible for the nonprofit subsidy rate (“Credit Unions Will Lobby Congress for Loan-Subsidy Benefits Accorded to Nonprofit Lenders,” April 4, 2008).
A Viable Source for More Student Loans?
Credit unions currently provide less than 1 percent of all FFELP loans, according to Mark Kantrowitz, publisher of FinAid.org, a financial aid website.
However, credit unions could offer significantly more volume at some institutions, Michael K. Kim, vice president for student services at the USC Credit Union, told The Chronicle.
The USC Credit Union provided 30 percent of all federal student loans at the University of Southern California last year, and Kim believes the USC Credit Union could double its student loan lending to $200 million to provide financing for any students unable to find another lender.
Although Kim thinks the credit union might find a way to double its student loans even without the nonprofit subsidy, the nonprofit rate would help.
One of the key selling points in the credit unions’ lobbying efforts, Basken writes, may be the fact that credit unions have a ready pool of capital — their customer deposits — from which to lend. In contrast, nonbank lenders, who don’t hold funding capital, must find external funding sources for their student loans and thus have been more vulnerable to the liquidity crisis that’s followed the fallout in mortgage lending.
Joining Kim’s Southern California credit-union group in lobbying Congress next week for the nonprofit subsidy rate are the UW Credit Union, serving universities in Wisconsin, and the University Federal Credit Union, which serves more than 100 colleges and employers in central Texas.
More, but Still Not Enough
An advisor from Senator Edward Kennedy’s office recently expressed support for the credit unions’ request that their proposal for inclusion in the nonprofit subsidy rate be added to the legislation for reauthorization of the Higher Education Act currently before Congress.
Kantrowitz believes that the credit unions’ subsidy proposal is reasonable since they’re nonprofit entities whose earnings don’t benefit outside investors.
On the other hand, he says, the additional loan volume credit unions could provide for the federally backed student loan program will likely not be enough to staunch the tide of students that may potentially be unable to find lenders this fall.
Kantrowitz further points out that among the 100 largest lenders in the federal student loan program, only three are credit unions.
“If credit unions can double their volume, that’s a 5-percent solution,” Kantrowitz says. “It could be part of the solution, but not even close to the entire solution.”
Thursday, May 8, 2008
Bank of America Backs Out of Private Student Loan Business
On April 17, Bank of America Corp. notified student-loan packager First Marblehead Corp. that it would no longer offer private student loans, focusing instead on providing federal student loans. Bank of America’s announcement comes amid increasing unsteadiness in the federal student loan market, where nearly 50 non-government lenders in the last six months have suspended their federal student loan programs.
Bank of America exercised its right to terminate its agreement with First Marblehead after The Education Resources Institute, the Boston-based nonprofit that guaranteed the loans packaged by First Marblehead, voluntarily filed for Chapter 11 bankruptcy protection on April 7, 2008.
Bank of America’s decision delivered yet another financial blow to First Marblehead, whose shares have already been on a downward spiral over the past few weeks, tumbling 37 percent on April 8 alone, the day after TERI filed its bankruptcy petition.
Shares in First Marblehead fell another 17 percent to $3.37 on the heels of Bank of America’s announcement, with the stock down nearly 91 percent over the past year. The loans originated by Bank of America accounted for about 15 percent of First Marblehead’s total revenue for the 2007 fiscal year, according to a Boston Business Journal article (“First Marblehead Loses Major Customer, Revenue Source,” April 18, 2008).
Kennedy to Colleges: Have Back-Up Plan for Students
In a letter sent to the American Council on Education on April 15, Sen. Edward Kennedy, D-Mass., the chairman of the Senate Education Committee, urged colleges to sign up for the Department of Education’s Federal Direct Loan Program as a preventive measure against the potential funding inadequacies within the Federal Family Education Loan Program.
His recommendation to colleges and universities to enroll in the direct-lending program as a backup option for student loan funding is yet another one of Kennedy’s attempts to help protect students against a federal funding nightmare this fall.
Kennedy has also introduced the Strengthening Student Aid Act of 2008 into the Senate that would, in part, allow the federal government to inject liquidity into the student loan market and enable the Department of Education to purchase FFELP loans from failing lenders.
Kennedy’s efforts to help secure the federal student loan sector come at a time when almost 50 FFELP lenders have suspended their federal student loan programs in recent months, including 21 of the top originators of federal student loans and five of the largest holders of student loan portfolios, according to FinAid.org.
Several schools had already made the move to the Direct Loan Program before Kennedy sent his letter to the ACE, including Pennsylvania State University, which, at $276 million, has a substantial federal student loan volume. Secretary of Education Margaret Spellings has assured schools that the Education Department is equipped to handle double the volume within the Direct Loan Program, if necessary.
Saturday, May 3, 2008
The Private Student Loan vs The Federal Student Loan
Federal Student Loan is the most common college student loan. There are mainly two kinds of federal student loans.
Subsidized college student loan: Government pays the interest whilst the student is attending the college.
Unsubsidized college student loan: there is no interest free period and you will have to pay the interest with principal amount, after completion of education.
Not all students qualify for a federal student loan. In case when students are unable to grab a federal
student loan, there is another kind of student loan known as private student loan. Many lenders offer private student loans and the rate of interest vary greatly.
Private student loan also known as personal student loan or alternative student loan will help you paying the college fees, hostel rent, stationary and other expenses, at much competitive interest rates than credit cards. Nevertheless, private student loan should be only used when there is no option left. You should be very cautious while borrowing money from the lender, as you will have to pay it back with interest.
Qualifying for private student loan depends upon the credit criteria established by the lender. Credit criteria mainly differs with private student loan, whether the borrower is a parent or a student.
Here are some factors, which decide eligibility for a private student loan.
1. Your credit report
2. Your parents credit report
3. Excessive debt loads
4. Delinquency problems
5. A cosigner will be an advantage in getting a private student loan because when primary borrower fails to repay, that responsibility falls to the cosigner.
Before applying for a private student loan you should study the offers at your local financial institutions. Then compare this search with the offers made by the online student loan companies. Only then you will be able to know the best one tailored for you.
By Oliver Turner
