If you're a current or future college student, chances are good that you're considering a student loan. Before you make any decisions, it pays to understand the basic principles behind borrowing. All loans consist of three components: The interest rate, security component and term. The Interest Rate The interest rate is the lender's charge for the use of their money. The ...

This is a cautionary tale of the consequences of defaulting on education debt, based on the experiences of seven borrowers of federal and private student loans. The stories are all true, but names and inconsequential details have been changed to protect the borrowers. Education debt is a necessary evil. Most students graduate from college with debt. For example, seven out of ...

Suppose you've made the required payments on all your loans and want to use some extra money to pay off your debt quicker. How do you choose which loan to pay off first? There are two main strategies for accelerating the repayment of debt. One involves paying down the loan with the highest after-tax interest rate first. The other, popularized by ...

My nephew has asked me to cosign a private student loan for college. He's on his own since he lives independently from his mother, his parents are divorced, and his father is completely out of the picture. He's made it through 2 years of college with great success. I'd like to help him. I have very good credit. What would be ...

My daughter will be starting college in the fall (hopefully). The full cost for each year is approximately $50,000. She received a scholarship for $35,000 and she has enough saved for books ($1,000), leaving her needing $14,000. When we filled out the FAFSA it said her family contribution would be too high. Unfortunately my husband and I filed for bankruptcy in ...

This article discusses the need to minimize student loan debt and provides more than a dozen practical tips on ways to reduce borrowing for college costs. Try to avoid overborrowing for your college education. Do not treat loan limits as targets. A good rule of thumb is that your total education debt for your entire college education should be less than ...

I recently decided to go back to school for a degree in software engineering. My short terms goal after school is to apply for a job with one of the top software application companies. My long term goal is to eventually start my own business specializing in creating custom apps for businesses and/or individuals. I am in debt from previous undergraduate ...

The Consumer Financial Protection Bureau (CFPB) and the US Department of Education released a report to Congress about private student loans on July 20, 2012 as mandated by section 1077 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (P.L. 111-203, 7/21/2010). The report discusses the growth and changes in the private student loan marketplace, the use of private student ...

Newspaper headlines suggest that many students graduate from college with hundreds of thousands of dollars in student loan debt. But is this really the case? A new report, Who Graduates College with Six-Figure Student Loan Debt?, finds that only 0.2% of undergraduate students and 6.4% of graduate students graduated with $100,000 or more in student loans in 2007-08. Far from being ...

How does a chapter 13 bankruptcy affect financial aid? Would it be difficult to get financial aid for my child because my husband and I filed chapter 13 about 2 years ago? — C. F. A previous bankruptcy can affect eligibility for some education loans but it does not affect eligibility for other forms of financial aid. The Bankruptcy Reform Act ...

I have a question about filling out a FAFSA form for my child. If we fill out the form and my child is granted a loan for college, will the parents be cosigners or responsible in any way for their child's loan either now or in the future? — D.F. No. The Free Application for Federal Student Aid (FAFSA) is the ...

I'm a soon-to-be college freshman. My tuition is close to $40,000 but financial aid only covers $19,000. My mother is a single parent making only $18,000 a year and I was wondering if there are any other options I can get besides loans that financial aid can help me with. — D.V. Something doesn't add up. The amount of financial aid ...

My parents have a Federal Direct PLUS Loan they got while I was an undergraduate student several years ago. Due to their current financial hardship, they haven't been keeping up with the payments. I also had some college loans which I am paying regularly without problems. I would like to know if my parents' financial situation will impact my credit, since ...

Rep. Hansen Clarke (D-MI-13) introduced the Student Loan Forgiveness Act of 2012 (H.R. 4170) on March 8, 2012. If enacted, this legislation will provide student loan forgiveness for federal education loans, allow private student loans to be refinanced into federal direct consolidation loans and cap all federal student loan interest rates at 3.4%. This legislation would address some of the calls ...

I am 47 and recently divorced single parent of two children, ages 7 and 8. I spent the last 9 years as a stay-at-home parent. As a result of the divorce, I am re-entering the job market. My last position, as a training and development specialist for a bank, earned roughly $45,000. It has been somewhat difficult obtaining full-time employment and ...

As a guidance counselor, I have many families asking me if there's any downside to taking out a federal unsubsidized loan. They need loan money either way and the rates for the private loans are much higher than the government loans. Most advice sites and articles are very general in nature. Can you provide any specifics on what would be the ...

The student loan debt clock reached the $1 trillion milestone at about 6:40 am ET on Tuesday, May 8, 2012. Although the student loan debt clock is for entertainment purposes only, reaching this milestone demonstrates that student loan debt is a macroeconomic factor, with the potential to affect the economy, albeit modestly at present. Student loan debt will not derail the ...

My 17-year-old daughter is eager to begin college. We have some difficult financial situations to contend with and could use your advice and direction. Her dad and I are divorced. I have poor credit due to excessive debt, and late payments. I am considering a debt settlement plan right now on two of my debts. I have outstanding student loans, and ...

Student loan pricing goes through cycles. When fixed interest rates are high but variable interest rates are heading downward, borrowers prefer variable interest rates. When variable interest rates are low but likely to head higher, borrowers prefer fixed-rate options. A little over a year ago only one commercial lender, SunTrust, offered a fixed-rate option on its loans. Today there are eight, ...

I'm a first year and I'm searching for student loans with my mom and I'm not sure which one is the best one I should take out. Do you have any suggestions? — Joanna P. When comparing student loans, consider both the cost of the loan and the other benefits of the loan program. The cost of a loan is based ...