Federal Student Loans

 Federal Student Loans

Student Loans

When free aid isn’t enough to pay for college, it’s time to take advantage of the Federal Student Loan Program.

Student loans are low-interest, federally guaranteed loans, most of which don’t have to be repaid until after graduation. The amount and type of parent plus loan for which you’re eligible will be outlined in your Student Aid Report — the form that’s generated by the Department of Education in response to your Free Application for Federal Student Aid (FAFSA) — and could include:

Federal Stafford Student Loans

Federal Stafford student loan are taken out in the student’s name with no collateral, no credit checks, and no co-signers required.

Federal PLUS Parent Loans

If student loan aid doesn’t fill the gap, your parents could be eligible for a Federal Parent Loan for Undergraduate Students (PLUS). Under this program, creditworthy parents can borrow up to 100% of the total cost of a college education for dependent children, less other financial aid awarded.

Private Student Loans

When Federal student loans are not enough, unsecured, credit-based private student loans may be available to undergraduate, graduate, and continuing education students. If you don’t qualify for a private student loan on your own, your parent or guardian may be able to co-sign for you.

Visit Us:https://studentloandaddy.com/

Why Paying Student Loans With Credit Cards Is a Bad Idea

 Student credit debt and credit card debt rank as two of the highest forms of consumer debt in the United States. Outstanding debt from student loans surpassed debt from credit cards for the first time ever last year and now stands ready to eclipse the $1 trillion mark. Sometime soon, if borrowing and spending trends continue, debt from education loans and credit cards combined will probably start pushing an unprecedented $2 trillion.

Together, debt from college loans and credit cards is so potentially toxic that it seems outlandish to even suggest any notion of mixing the two. That’s why we were so puzzled to read an article posted by U.S. News & World Report’s Student Loan Ranger that describes two programs by student loan giant Sallie Mae that encourages borrowers to repay their private student loans with credit cards issued by the lender that almost assuredly have far higher interest rates than the loans themselves.

The article, written by Equal Justice Works, a nonprofit organization that helps remove financial barriers for law students and lawyers seeking public service careers, was quick to point out Sallie Mae’s apparent contradiction. On the one hand, the article says, Sallie Mae offers good advice on how to avoid spiraling debt from credit cards. On the other hand, Sallie Mae encourages borrowers to use credit cards by linking them to student loan repayments, which, the article notes, “seems to encourage a vicious cycle of spiraling debt.”

Going Into Debt to Get Out of Debt Is Never a Good Idea

Under the Sallie Mae Cash Back Visa Card program, borrowers can redeem the rewards they earn from using the card to make extra payments on their Sallie Mae private student loans. According to the program’s pricing and terms disclosure, the variable rate on the card ranges from 11.99 percent to 15.99 percent. Of course, like many other credit cards, if a borrower makes a single late payment, goes over the credit limit, or makes a payment that is returned, the APR climbs to 29.99 percent. Like other credit cards, there is also a collection of transaction fees and late fees and over-the-credit limit fees that can pile up if a borrower isn’t careful.

Combine high interest rates with paltry cash-back rewards of between 1 percent and 3 percent and it’s hard to see how amassing credit card debt at higher interest rates than the student loans the card purports to help pay will actually be beneficial.

A second, perhaps even more perplexing Sallie Mae program offers a credit card to parents who cosign private education loans for their college students. The card offers cash-back rewards when parents use it to make student loan payments on behalf of their kids. In other words, parents who cosign a line of credit (the student loan) can get a second line of credit (the credit card) that can be used to pay off the first line of credit at, in all likelihood, a much higher interest rate.

In the end, the article concludes, the Sallie Mae credit card programs are just one example of why borrowers should avoid using credit cards to pay off student loans. Instead, the article recommends that students borrow frugally and wisely and start with federal student loans, which have lower interest rates and offer more borrower protections than private student loans. The article also recommends that students who need help paying their student loans should explore repayment options like Income-Based Repayment and Public Service Loan Forgiveness, which help students pay back education loans without going into further debt.

Visit Us:https://studentloandaddy.com/

Surviving the Economy: 8 Tips for Living on a Grad Budget

 Graduating from college and getting your first job is a huge accomplishment, but it also starts you on a path toward financial independence, whether you’re prepared for it or not. Cashing in that first paycheck can be exciting but scary once Federal student loan consolidation see how quickly it gets eaten up by rent, food, gas, utilities, and student loan payments. You might be making more money than you were in college, but you’re probably having to spend more money too.

To help you out now that you’re living on your own, here are eight tips for managing your expenses, so you can cover your bills, stay within your grad budget, and still have some spending money left over to enjoy.

How to Make It on Your Own

1) Know what you need.

If you’re still interviewing for jobs, get a rough estimate of what your cost of living is going to be. Use a budget calculator that goes beyond just the basics and allows you to punch in detailed income and obligations like salary, savings, taxes, insurance, living expenses, and monthly payments for your car, credit cards, and student loans. This way, you’ll know what salary range you’ll need to look for in order to be able to cover all your monthly expenditures.

*In-Case-of-Emergency Rule: Don’t forget to factor in a monthly allowance that you can put toward an emergency fund to cover unexpected expenses like car repairs or doctor’s visits.

2) Lower your student loan payments.

Student loans can take a big piece of your paycheck each month. By consolidating your federal student loans, you could get up to 20 more years to repay and cut your monthly payments in half. You can also call your lender and ask about alternative repayment options: Extended, income-sensitive, and graduated repayment plans could lower your monthly payments.

*Pay Later Tip: If you’re in a jam and having trouble making your student loan payments, even on a reduced-payment plan, call your lender ASAP. Ask about your deferment and forbearance benefits, which may allow you to temporarily postpone your payments altogether — without your credit taking a hit.

3) Make sure you’re covered.

Once you’ve graduated, you’ll most likely have only a limited amount of coverage time left under your parents’ insurance plans. You want to make sure you’ve got health insurance, car insurance, and renters insurance; you can use sites like Insurance.com, eRenterPlan, and eHealthInsurance to compare policies. A couple hundred bucks a month is a small price to pay to make sure that if you end up in the hospital, in a car accident, or having your apartment broken into, you won’t be left without wheels, belongings, or with tens of thousands of dollars in medical bills.

*Keeping-It-in-the-Family Tip: When you start insurance shopping, call your parents’ providers first to see if they can offer you a simple and affordable transition into your own plan, along with a family or referral discount.

4) Monitor your minutes.

If you’re transitioning from your parents’ cell phone plan to your own, you may actually have more coverage than you really need. Check with your provider to see if you can drop down to a less expensive plan with fewer minutes.

*Texting Tip: If you text a lot, it may be more cost-effective to sign up for an unlimited text messaging plan to avoid paying overage charges.

5) Make your own meals.

You may not like to cook, but add up how much you spend each week when you eat out, and you may realize where all your money’s going. The $15.00 you spend on two large sandwiches at Quizno’s, for instance, could buy you enough ingredients to make your own subs at home for a week. Bringing your lunch to work will save you time and money, and you’ll probably end up eating healthier too.

*Splurge Rule: Allow yourself one dinner or lunch out a week, whether it’s with friends or your significant other.

6) Make your own cleaning products.

Save money on pricey household cleaners by making your own from common pantry items like baking soda, vinegar, lemon juice, and hydrogen peroxide.

*Go Green Tip: Besides being a lot less expensive than commercial cleaners, natural homemade cleaning products are more eco-friendly, free of harsh and toxic chemicals.

7) Buddy-buy in bulk.

What worked in college will still work now: Team up with friends or family who have a Costco or Sam’s Club membership, and make monthly trips to buy groceries and household necessities in bulk. Split the cost, split the goods, and save big.

*Two-for-One Tip: Your trip to a warehouse chain can double as a free meal if you take advantage of all the food samples.

8) Shop discount.

Thrift shops, outlets, and stores like Big Lots, Ross, and TJ Maxx are great places to get clothes and household and personal items at discounted prices. You can also find deals on used furniture and electronics online at sites like Craigslist and Overstock.com.

*Library Rule: If you chuck it, check it out. Instead of paying to buy or rent movies, video games, books, or magazines that you’ll end up reselling, returning, or recycling, check them out at your local library for free.

How to Make It on a Budget — Without Hating It

When you start keeping track of every single thing you buy in a week — your daily coffee, the soft drinks you get from the vending machine at lunch — you’ll be surprised at how easy it is to spend a lot of money on little things. The trick to living on a budget is to find a balance and cut back on the extras without giving up everything.

Use your newfound savings to treat yourself to little joys every once in a while: In addition to your weekly meal out, allow yourself one small monthly reward for sticking to your spending plan — a night out at the movies, a new outfit, a baseball game, anything that feels like a present to yourself.

Visit Us:https://studentloandaddy.com/

Federal Student Loans

 Federal Student Loans

Student Loans

When free aid isn’t enough to pay for college, it’s time to take advantage of the Federal Student Loan Program.

Student loans are low-interest, federally guaranteed loans, most of which don’t have to be repaid until after graduation. The amount and type of student loans for which you’re eligible will be outlined in your Student Aid Report — the form that’s generated by the Department of Education in response to your Free Application for Federal Student Aid (FAFSA) — and could include:

Federal Stafford Federal student loan

Federal Stafford student loan are taken out in the student’s name with no collateral, no credit checks, and no co-signers required.

Federal PLUS Parent Loans

If student loan aid doesn’t fill the gap, your parents could be eligible for a Federal Parent Loan for Undergraduate Students (PLUS). Under this program, creditworthy parents can borrow up to 100% of the total cost of a college education for dependent children, less other financial aid awarded.

Private Student Loans

When Federal student loans are not enough, unsecured, credit-based private student loans may be available to undergraduate, graduate, and continuing education students. If you don’t qualify for a private student loan on your own, your parent or guardian may be able to co-sign for you.

Visit Us:https://studentloandaddy.com/

6 Strategies for Slaying the Student Loan Dragon

 For recent college graduates, facing debt from consolidate federal student loans can feel like squaring off against a fire-breathing dragon of ancient myth, armed only with a metal trash can lid for a shield and a toothpick for a lance. In fact, the Class of 2011 is the most indebted ever, with average loan balances close to $27,000, a harsh reality for graduates who are trying to find jobs that earn them enough so they can stay current on student loan payments. But all is not lost. Here are six strategies to help you slay the student loan dragon.

1. New tools can help you understand your repayment options

The first thing you should do is check out a new website called PaybackSmarter.com, which will help you see your student loan options in graphic detail. For example, you can consolidate your loans to get longer terms with a higher total repayment but smaller monthly minimums, or you can pay more each month to pay off your loans earlier and lower your total repayment but increase your monthly minimums.

2. Look into federal student loan repayment programs

If you can afford your monthly payments, stand pat. But if you can’t because you don’t have a job or the job you have doesn’t pay enough, then you should consider enrolling in the federal Income Based Repayment program, which will allow you pay an affordable percentage of your monthly income over a certain number of years, after which any remaining student loan balance is forgiven — and if your income is zero because you’re unemployed, then you pay nothing.

You should also consider federal loan forgiveness programs and state loan forgiveness programs that help pay off your student loan in exchange for working in a particular field in a certain part of the country for a few years.

3. Manage your private student loans

If you have private student loans, you may be able to refinance them at lower interest rates through a local credit union or through a bank or private lender’s private student consolidation loan. Your parents will probably have to co-sign for a refinance, but since they probably had to co-sign your private student loans in the first place, that shouldn’t be a problem.

4. Don’t rush to consolidate

Even though we just suggested you look into private student loan consolidation, don’t rush blindly into the fray. In many cases, consolidation won’t actually save you any money — and may end up costing you even more — so investigate your consolidation options carefully, do your homework, and ask lots of questions.

Avoid mixing in your low-interest student loans with your high-interest loans, because you’ll lose your low interest rate. Instead, aim to consolidate your high-interest loans into lower-interest loans and leave your low-interest loans alone. And watch out for low-interest consolidation loans with variable interest rates. Once interest rates rise, your variable-rate consolidation loan could end up costing you more than your original fixed-rate loan that was 4 or 5 percent higher.

5. Seek help from your family

You can always ask mom, dad, and the grandparents to help if things are looking bleak. If you and your family is good with money and you’re good at paying your bills on time, try to work out a deal for an intra-family loan to help pay off your debt. With interest rates on CDs and savings accounts abysmally low, your parents and grandparents stand to make out even if they loan you money at half the interest rate of your student loan, Just make sure everyone is happy with the terms and signs a contract.

Alternatively, instead of getting financially involved with family — which can be tricky thing to pull off for many people — you can ask that birthday and holiday gifts be given as cash so you can use them to pay off your student loans.

6. Keep careful records

Keep copies of everything. Student loans and the rights to service them get bundled and sold, often more than once, and a lot of chefs can end up in the kitchen. Consolidations can get improperly recorded, siblings can get each other’s bills, and things can get generally out of whack. It’s up to you to keep accurate records, and to get everything in writing, so that you have official documentation when you have to dispute something or argue with the billing department or — and this happens more often than you can imagine — you have to provide some loan servicer with documentation that they should already have.

The student loan dragon is big, menacing, and has an insatiable appetite, even if you can’t afford to feed it. Thankfully, these six strategies for paying off your student loans will help you sooth the savage beast and get out of debt as safely as possible.

Visit Us:https://studentloandaddy.com/

Why Paying Student Loans With Credit Cards Is a Bad Idea

 Student loan debt and credit card debt rank as two of the highest forms of consumer debt in the United States. Outstanding debt from student loans surpassed debt from credit cards for the first time ever last year and now stands ready to eclipse the $1 trillion mark. Sometime soon, if borrowing and spending trends continue, debt from education loans and credit cards combined will probably start pushing an unprecedented $2 trillion.

Together, debt from college loans and credit cards is so potentially toxic that it seems outlandish to even suggest any notion of mixing the two. That’s why we were so puzzled to read an article posted by U.S. News & World Report’s Student Loan Ranger that describes two programs by student loan giant Sallie Mae that encourages borrowers to repay their private student loans with credit cards issued by the lender that almost assuredly have far higher interest rates than the loans themselves.

The article, written by Equal Justice Works, a nonprofit organization that helps remove financial barriers for law students and lawyers seeking public service careers, was quick to point out Sallie Mae’s apparent contradiction. On the one hand, the article says, Sallie Mae offers good advice on how to avoid spiraling debt from credit cards. On the other hand, Sallie Mae encourages borrowers to use credit cards by linking them to student loan repayments, which, the article notes, “seems to encourage a vicious cycle of spiraling debt.”

Going Into Debt to Get Out of Debt Is Never a Good Idea

Under the Sallie Mae Cash Back Visa Card program, borrowers can redeem the rewards they earn from using the card to make extra payments on their Sallie Mae private student loans. According to the program’s pricing and terms disclosure, the variable rate on the card ranges from 11.99 percent to 15.99 percent. Of course, like many other credit cards, if a borrower makes a single late payment, goes over the credit limit, or makes a payment that is returned, the APR climbs to 29.99 percent. Like other credit cards, there is also a collection of transaction fees and late fees and over-the-credit limit fees that can pile up if a borrower isn’t careful.

Combine high interest rates with paltry cash-back rewards of between 1 percent and 3 percent and it’s hard to see how amassing credit card debt at higher interest rates than the student loans the card purports to help pay will actually be beneficial.

A second, perhaps even more perplexing Sallie Mae program offers a credit card to parents who cosign private education loans for their college students. The card offers cash-back rewards when parents use it to make Private student loan payments on behalf of their kids. In other words, parents who cosign a line of credit (the student loan) can get a second line of credit (the credit card) that can be used to pay off the first line of credit at, in all likelihood, a much higher interest rate.

In the end, the article concludes, the Sallie Mae credit card programs are just one example of why borrowers should avoid using credit cards to pay off student loans. Instead, the article recommends that students borrow frugally and wisely and start with federal student loans, which have lower interest rates and offer more borrower protections than private student loans. The article also recommends that students who need help paying their student loans should explore repayment options like Income-Based Repayment and Public Service Loan Forgiveness, which help students pay back education loans without going into further debt.

Visit Us:https://studentloandaddy.com/

6 Strategies for Slaying the Student Loan Dragon

 For recent college graduates, facing debt from student loan consolidation service can feel like squaring off against a fire-breathing dragon of ancient myth, armed only with a metal trash can lid for a shield and a toothpick for a lance. In fact, the Class of 2011 is the most indebted ever, with average loan balances close to $27,000, a harsh reality for graduates who are trying to find jobs that earn them enough so they can stay current on student loan payments. But all is not lost. Here are six strategies to help you slay the student loan dragon.

1. New tools can help you understand your repayment options

The first thing you should do is check out a new website called PaybackSmarter.com, which will help you see your student loan options in graphic detail. For example, you can consolidate your loans to get longer terms with a higher total repayment but smaller monthly minimums, or you can pay more each month to pay off your loans earlier and lower your total repayment but increase your monthly minimums.

2. Look into federal student loan repayment programs

If you can afford your monthly payments, stand pat. But if you can’t because you don’t have a job or the job you have doesn’t pay enough, then you should consider enrolling in the federal Income Based Repayment program, which will allow you pay an affordable percentage of your monthly income over a certain number of years, after which any remaining student loan balance is forgiven — and if your income is zero because you’re unemployed, then you pay nothing.

You should also consider federal loan forgiveness programs and state loan forgiveness programs that help pay off your student loan in exchange for working in a particular field in a certain part of the country for a few years.

3. Manage your private student loans

If you have private student loans, you may be able to refinance them at lower interest rates through a local credit union or through a bank or private lender’s private student consolidation loan. Your parents will probably have to co-sign for a refinance, but since they probably had to co-sign your private student loans in the first place, that shouldn’t be a problem.

4. Don’t rush to consolidate

Even though we just suggested you look into private student loan consolidation, don’t rush blindly into the fray. In many cases, consolidation won’t actually save you any money — and may end up costing you even more — so investigate your consolidation options carefully, do your homework, and ask lots of questions.

Avoid mixing in your low-interest student loans with your high-interest loans, because you’ll lose your low interest rate. Instead, aim to consolidate your high-interest loans into lower-interest loans and leave your low-interest loans alone. And watch out for low-interest consolidation loans with variable interest rates. Once interest rates rise, your variable-rate consolidation loan could end up costing you more than your original fixed-rate loan that was 4 or 5 percent higher.

5. Seek help from your family

You can always ask mom, dad, and the grandparents to help if things are looking bleak. If you and your family is good with money and you’re good at paying your bills on time, try to work out a deal for an intra-family loan to help pay off your debt. With interest rates on CDs and savings accounts abysmally low, your parents and grandparents stand to make out even if they loan you money at half the interest rate of your student loan, Just make sure everyone is happy with the terms and signs a contract.

Alternatively, instead of getting financially involved with family — which can be tricky thing to pull off for many people — you can ask that birthday and holiday gifts be given as cash so you can use them to pay off your student loans.

6. Keep careful records

Keep copies of everything. Student loans and the rights to service them get bundled and sold, often more than once, and a lot of chefs can end up in the kitchen. Consolidations can get improperly recorded, siblings can get each other’s bills, and things can get generally out of whack. It’s up to you to keep accurate records, and to get everything in writing, so that you have official documentation when you have to dispute something or argue with the billing department or — and this happens more often than you can imagine — you have to provide some loan servicer with documentation that they should already have.

The student loan dragon is big, menacing, and has an insatiable appetite, even if you can’t afford to feed it. Thankfully, these six strategies for paying off your student loans will help you sooth the savage beast and get out of debt as safely as possible.

Visit Us:https://studentloandaddy.com/

Surviving the Economy: 8 Tips for Living on a Grad Budget

 Graduating from college and getting your first job is a huge accomplishment, but it also starts you on a path toward federal student loan consolidation whether you’re prepared for it or not. Cashing in that first paycheck can be exciting but scary once you see how quickly it gets eaten up by rent, food, gas, utilities, and student loan payments. You might be making more money than you were in college, but you’re probably having to spend more money too.

To help you out now that you’re living on your own, here are eight tips for managing your expenses, so you can cover your bills, stay within your grad budget, and still have some spending money left over to enjoy.

How to Make It on Your Own

1) Know what you need.

If you’re still interviewing for jobs, get a rough estimate of what your cost of living is going to be. Use a budget calculator that goes beyond just the basics and allows you to punch in detailed income and obligations like salary, savings, taxes, insurance, living expenses, and monthly payments for your car, credit cards, and student loans. This way, you’ll know what salary range you’ll need to look for in order to be able to cover all your monthly expenditures.

*In-Case-of-Emergency Rule: Don’t forget to factor in a monthly allowance that you can put toward an emergency fund to cover unexpected expenses like car repairs or doctor’s visits.

2) Lower your student loan payments.

Student loans can take a big piece of your paycheck each month. By consolidating your federal student loans, you could get up to 20 more years to repay and cut your monthly payments in half. You can also call your lender and ask about alternative repayment options: Extended, income-sensitive, and graduated repayment plans could lower your monthly payments.

*Pay Later Tip: If you’re in a jam and having trouble making your student loan payments, even on a reduced-payment plan, call your lender ASAP. Ask about your deferment and forbearance benefits, which may allow you to temporarily postpone your payments altogether — without your credit taking a hit.

3) Make sure you’re covered.

Once you’ve graduated, you’ll most likely have only a limited amount of coverage time left under your parents’ insurance plans. You want to make sure you’ve got health insurance, car insurance, and renters insurance; you can use sites like Insurance.com, eRenterPlan, and eHealthInsurance to compare policies. A couple hundred bucks a month is a small price to pay to make sure that if you end up in the hospital, in a car accident, or having your apartment broken into, you won’t be left without wheels, belongings, or with tens of thousands of dollars in medical bills.

*Keeping-It-in-the-Family Tip: When you start insurance shopping, call your parents’ providers first to see if they can offer you a simple and affordable transition into your own plan, along with a family or referral discount.

4) Monitor your minutes.

If you’re transitioning from your parents’ cell phone plan to your own, you may actually have more coverage than you really need. Check with your provider to see if you can drop down to a less expensive plan with fewer minutes.

*Texting Tip: If you text a lot, it may be more cost-effective to sign up for an unlimited text messaging plan to avoid paying overage charges.

5) Make your own meals.

You may not like to cook, but add up how much you spend each week when you eat out, and you may realize where all your money’s going. The $15.00 you spend on two large sandwiches at Quizno’s, for instance, could buy you enough ingredients to make your own subs at home for a week. Bringing your lunch to work will save you time and money, and you’ll probably end up eating healthier too.

*Splurge Rule: Allow yourself one dinner or lunch out a week, whether it’s with friends or your significant other.

6) Make your own cleaning products.

Save money on pricey household cleaners by making your own from common pantry items like baking soda, vinegar, lemon juice, and hydrogen peroxide.

*Go Green Tip: Besides being a lot less expensive than commercial cleaners, natural homemade cleaning products are more eco-friendly, free of harsh and toxic chemicals.

7) Buddy-buy in bulk.

What worked in college will still work now: Team up with friends or family who have a Costco or Sam’s Club membership, and make monthly trips to buy groceries and household necessities in bulk. Split the cost, split the goods, and save big.

*Two-for-One Tip: Your trip to a warehouse chain can double as a free meal if you take advantage of all the food samples.

8) Shop discount.

Thrift shops, outlets, and stores like Big Lots, Ross, and TJ Maxx are great places to get clothes and household and personal items at discounted prices. You can also find deals on used furniture and electronics online at sites like Craigslist and Overstock.com.

*Library Rule: If you chuck it, check it out. Instead of paying to buy or rent movies, video games, books, or magazines that you’ll end up reselling, returning, or recycling, check them out at your local library for free.

How to Make It on a Budget — Without Hating It

When you start keeping track of every single thing you buy in a week — your daily coffee, the soft drinks you get from the vending machine at lunch — you’ll be surprised at how easy it is to spend a lot of money on little things. The trick to living on a budget is to find a balance and cut back on the extras without giving up everything.

Use your newfound savings to treat yourself to little joys every once in a while: In addition to your weekly meal out, allow yourself one small monthly reward for sticking to your spending plan — a night out at the movies, a new outfit, a baseball game, anything that feels like a present to yourself.

Visit Us:https://studentloandaddy.com/

Surviving the Economy: 5 Realistic Reasons to Move Back Home With Mom and Dad

 Congratulations! You got your college diploma, and you’re officially an adult.

Adult, say hello to rent, groceries, insurance, water bills, electric bills, gas bills, and don’t forget about those student loans bad credit.

Before you find yourself buried under a pile of bills you can’t afford on your entry-level salary (that is, if you’ve even been able to find a job yet), you may want to bring yourself to consider whether that not-exactly-coolest of options — moving back home — might be your best bet right now.

We won’t pretend it’s a perfect answer. You may have to forgo the overnight guests and having a denful of buddies over for pizza, drinks, and the UFC pay-per-view fight. You’ve fought hard for your independence, done your required 18 years’ time at home, and now it may feel like you’re giving it all back up.

But if the alternative is being broke and living out of your car, that may be a price you want to pay. Besides, retracing your steps home doesn’t have to be all bad. There are at least five major advantages to moving back in with your parents, at least until you get on your financially independent two feet:

Free rent

In order to help you out financially, especially if you haven’t been able to find a job yet, mom and dad may let you live at home rent-free. They might ask for a little something, maybe $50 a month, to help with groceries, but that’s still a better deal than you’re likely to find anywhere else. Just don’t use living at home as an excuse to watch TV or play Guitar Hero all day. In exchange for free rent privileges, make sure you’re hitting the pavement, getting your résumé out there, and keeping your parents up-to-speed on your job search.

Free groceries, laundry, utilities, cable, Internet, and other things that cost money

All that stuff adds up, even when you’re splitting it with roommates. To avoid being a total bum, you can make a small contribution each month to help your parents with bills. Or if you’re short on cash, offer to help them with yardwork, errands, or things that need to be done around the house.

You’ll actually be able to start a savings account

If you’re working and have money coming in, take what you’d pay for rent and utilities, and put it toward savings and paying off your student loans plus any credit card debt you racked up in college. With a good chunk of your debt paid off, a history of on-time payments on your credit report, and a decent emergency savings fund built up, you’ll be better equipped to get out on your own that much more quickly.

The food and accommodations are a lot better

No air mattresses. No schlepping your bags of clothes to the laundromat. No cramming yourself into a rickety one-bedroom apartment with a med student, an aspiring actor disguised as a waiter, and their three cats. Actual food. Your parents may be busy professionals who aren’t inclined to prepare gourmet meals, but whatever they are eating, it probably still beats canned ravioli and Pop-Tarts.

No newly annoying roommates or unexpected whack-jobs

You never know what you’re going to end up with off Craigslist when you’re looking for someone to split the rent with. Your parents and siblings are more than likely not your ideal post-college roommates, but think of it this way: At least all their craziness and annoying habits aren’t anything new. You know what you’re getting into. You spent 18 years of your life learning how to deal with your family — why invite any new crazies in when you’re already a pro at living with the ones who love you that you’ve got back home.

Visit Us:https://studentloandaddy.com/

Surviving the Economy: 8 Tips for Living on a Grad Budget

 Graduating from college and getting your first job is a huge accomplishment, but it also starts you on a path toward financial independence, whether you’re prepared for it or not. Cashing in that first paycheck can be exciting but scary once you see how quickly it gets eaten up by rent, food, gas, utilities, and Federal student loan consolidation payments. You might be making more money than you were in college, but you’re probably having to spend more money too.

To help you out now that you’re living on your own, here are eight tips for managing your expenses, so you can cover your bills, stay within your grad budget, and still have some spending money left over to enjoy.

How to Make It on Your Own

1) Know what you need.

If you’re still interviewing for jobs, get a rough estimate of what your cost of living is going to be. Use a budget calculator that goes beyond just the basics and allows you to punch in detailed income and obligations like salary, savings, taxes, insurance, living expenses, and monthly payments for your car, credit cards, and student loans. This way, you’ll know what salary range you’ll need to look for in order to be able to cover all your monthly expenditures.

*In-Case-of-Emergency Rule: Don’t forget to factor in a monthly allowance that you can put toward an emergency fund to cover unexpected expenses like car repairs or doctor’s visits.

2) Lower your student loan payments.

Student loans can take a big piece of your paycheck each month. By consolidating your federal student loans, you could get up to 20 more years to repay and cut your monthly payments in half. You can also call your lender and ask about alternative repayment options: Extended, income-sensitive, and graduated repayment plans could lower your monthly payments.

*Pay Later Tip: If you’re in a jam and having trouble making your student loan payments, even on a reduced-payment plan, call your lender ASAP. Ask about your deferment and forbearance benefits, which may allow you to temporarily postpone your payments altogether — without your credit taking a hit.

3) Make sure you’re covered.

Once you’ve graduated, you’ll most likely have only a limited amount of coverage time left under your parents’ insurance plans. You want to make sure you’ve got health insurance, car insurance, and renters insurance; you can use sites like Insurance.com, eRenterPlan, and eHealthInsurance to compare policies. A couple hundred bucks a month is a small price to pay to make sure that if you end up in the hospital, in a car accident, or having your apartment broken into, you won’t be left without wheels, belongings, or with tens of thousands of dollars in medical bills.

*Keeping-It-in-the-Family Tip: When you start insurance shopping, call your parents’ providers first to see if they can offer you a simple and affordable transition into your own plan, along with a family or referral discount.

4) Monitor your minutes.

If you’re transitioning from your parents’ cell phone plan to your own, you may actually have more coverage than you really need. Check with your provider to see if you can drop down to a less expensive plan with fewer minutes.

*Texting Tip: If you text a lot, it may be more cost-effective to sign up for an unlimited text messaging plan to avoid paying overage charges.

5) Make your own meals.

You may not like to cook, but add up how much you spend each week when you eat out, and you may realize where all your money’s going. The $15.00 you spend on two large sandwiches at Quizno’s, for instance, could buy you enough ingredients to make your own subs at home for a week. Bringing your lunch to work will save you time and money, and you’ll probably end up eating healthier too.

*Splurge Rule: Allow yourself one dinner or lunch out a week, whether it’s with friends or your significant other.

6) Make your own cleaning products.

Save money on pricey household cleaners by making your own from common pantry items like baking soda, vinegar, lemon juice, and hydrogen peroxide.

*Go Green Tip: Besides being a lot less expensive than commercial cleaners, natural homemade cleaning products are more eco-friendly, free of harsh and toxic chemicals.

7) Buddy-buy in bulk.

What worked in college will still work now: Team up with friends or family who have a Costco or Sam’s Club membership, and make monthly trips to buy groceries and household necessities in bulk. Split the cost, split the goods, and save big.

*Two-for-One Tip: Your trip to a warehouse chain can double as a free meal if you take advantage of all the food samples.

8) Shop discount.

Thrift shops, outlets, and stores like Big Lots, Ross, and TJ Maxx are great places to get clothes and household and personal items at discounted prices. You can also find deals on used furniture and electronics online at sites like Craigslist and Overstock.com.

*Library Rule: If you chuck it, check it out. Instead of paying to buy or rent movies, video games, books, or magazines that you’ll end up reselling, returning, or recycling, check them out at your local library for free.

How to Make It on a Budget — Without Hating It

When you start keeping track of every single thing you buy in a week — your daily coffee, the soft drinks you get from the vending machine at lunch — you’ll be surprised at how easy it is to spend a lot of money on little things. The trick to living on a budget is to find a balance and cut back on the extras without giving up everything.

Use your newfound savings to treat yourself to little joys every once in a while: In addition to your weekly meal out, allow yourself one small monthly reward for sticking to your spending plan — a night out at the movies, a new outfit, a baseball game, anything that feels like a present to yourself.

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Quick Guide to Federal Student Loan Repayment Options

 When you borrow a federal student loan, Student PLUS loan, or Parent PLUS loan through the Federal Direct Loan Program you may be eligible for one or more options when it comes time to start repaying your loan. Here’s a quick rundown of the different repayment options.

Standard Repayment

With standard repayment, you pay a set amount each month until your Direct Loans are paid in full. You have 10 years to repay tour loans with a minimum monthly payment of $50. The standard repayment plan is designed to get you to repay your loans in the shortest amount of time with the least amount of cost due to interest payments.

The government recommends standard repayment if you can afford to make more than the minimum monthly payment, as you’ll be able to pay off the loans early and save on interest payments.

Eligible loans: Student loans, Student PLUS loans, Parent PLUS loans

Extended Repayment

Extended repayment gives you 25 years to pay back your federal student loans and offers two repayment options: fixed or graduated. Fixed payments, like with standard repayment, are the same every month. Graduated payments, like with graduated repayment below, start low and increase every two years. To be eligible for extended repayment, you must have more than $30,000 in federal student loan debt and no outstanding balance on a federal student loan as of October 7, 1998.

Extended repayment is recommended if you need to make smaller monthly payments. However, it’s important to remember that while the loan payment itself may be easier to make under extended repayment, you’ll probably end up paying significantly more in interest if you take 15 years longer to repay your loans.

Eligible loans: Student loans, Student PLUS loans, Parent PLUS loans

Graduated Repayment

Graduated repayment allows you to start out low when you beginning to pay back your student loans, with minimum loan payments (which will never be less than the amount of interest that accrues between payments) increasing every two years, presumably as you begin to earn more money. As with standard repayment, you’ll have up to 10 years to repay your loans, so you can expect some pretty expensive monthly loan payments towards the end of your 10-year term. However, no single payment under the graduated repayment plan will be more than three times greater than any other payment. In other words, if your first payment is $300, your last payment won’t be more than $900.

Eligible loans: Student loans, Student PLUS loans, Parent PLUS loans

Income Contingent Repayment

The idea behind income contingent repayment (ICR) is to allow you to meet your student loan obligations “without causing undue financial hardship.” Under ICR your minimum monthly payments will be calculated each year based on your adjusted gross income (plus your spouse’s adjusted gross income, if you’re married), the size of your family, and the total remaining balance on your federal college loans. You have 25 years to repay your loans (not including time spent in deferment or forbearance), after which any remaining unpaid portion is discharged, which means you won’t have to repay it.

The plan determines minimum monthly payment by the lesser of two calculations:

Either the amount that you would pay if you repaid your loan over 12 years multiplied by a percentage that varies with your annual income, or 20 percent of your monthly discretionary income, which is figured by taking your adjusted gross income, subtracting the poverty level for your state of residence and family size, and dividing the result by 12

If your monthly payments aren’t big enough to cover the interest that’s accumulated on your loans, any unpaid interest will be capitalized once each year, which means it will be added to the balance that you owe (but capitalization won’t exceed 10 percent of the original amount you owed when you entered repayment).

Eligible loans: Student loans, Student PLUS loans

Income-Based Repayment

Under income-based repayment (IBR), the amount you owe each month will be based on a percentage of your income and adjusted annually. Currently, the plan allows low-income students — based on income and family size — to cap monthly student loan payments at 15 percent of their discretionary income for a maximum of 25 years. After 25 years, any remaining loan balance is forgiven. If you are currently enrolled in college — and borrowed your first student loan in or after 2008 and will take out another loan in 2012 — you can qualify for better IBR terms if you apply to the program before June 30, 2012, including a reduction of the loan payment cap from 15 percent of discretionary income to 10 percent and a reduction of the repayment term from 25 years to 20 years.

Eligible loans: Student loans, Student PLUS loans.

Visit Us:https://studentloandaddy.com/

6 Strategies for Slaying the Student Loan Dragon

Consolidate federal student loans For recent college graduates, facing debt from student loans can feel like squaring off against a fire-breathing dragon of ancient myth, armed only with a metal trash can lid for a shield and a toothpick for a lance. In fact, the Class of 2011 is the most indebted ever, with average loan balances close to $27,000, a harsh reality for graduates who are trying to find jobs that earn them enough so they can stay current on student loan payments. But all is not lost. Here are six strategies to help you slay the student loan dragon.

1. New tools can help you understand your repayment options

The first thing you should do is check out a new website called PaybackSmarter.com, which will help you see your student loan options in graphic detail. For example, you can consolidate your loans to get longer terms with a higher total repayment but smaller monthly minimums, or you can pay more each month to pay off your loans earlier and lower your total repayment but increase your monthly minimums.

2. Look into federal student loan repayment programs

If you can afford your monthly payments, stand pat. But if you can’t because you don’t have a job or the job you have doesn’t pay enough, then you should consider enrolling in the federal Income Based Repayment program, which will allow you pay an affordable percentage of your monthly income over a certain number of years, after which any remaining student loan balance is forgiven — and if your income is zero because you’re unemployed, then you pay nothing.

You should also consider federal loan forgiveness programs and state loan forgiveness programs that help pay off your student loan in exchange for working in a particular field in a certain part of the country for a few years.

3. Manage your private student loans

If you have private student loans, you may be able to refinance them at lower interest rates through a local credit union or through a bank or private lender’s private student consolidation loan. Your parents will probably have to co-sign for a refinance, but since they probably had to co-sign your private student loans in the first place, that shouldn’t be a problem.

4. Don’t rush to consolidate

Even though we just suggested you look into private student loan consolidation, don’t rush blindly into the fray. In many cases, consolidation won’t actually save you any money — and may end up costing you even more — so investigate your consolidation options carefully, do your homework, and ask lots of questions.

Avoid mixing in your low-interest student loans with your high-interest loans, because you’ll lose your low interest rate. Instead, aim to consolidate your high-interest loans into lower-interest loans and leave your low-interest loans alone. And watch out for low-interest consolidation loans with variable interest rates. Once interest rates rise, your variable-rate consolidation loan could end up costing you more than your original fixed-rate loan that was 4 or 5 percent higher.

5. Seek help from your family

You can always ask mom, dad, and the grandparents to help if things are looking bleak. If you and your family is good with money and you’re good at paying your bills on time, try to work out a deal for an intra-family loan to help pay off your debt. With interest rates on CDs and savings accounts abysmally low, your parents and grandparents stand to make out even if they loan you money at half the interest rate of your student loan, Just make sure everyone is happy with the terms and signs a contract.

Alternatively, instead of getting financially involved with family — which can be tricky thing to pull off for many people — you can ask that birthday and holiday gifts be given as cash so you can use them to pay off your student loans.

6. Keep careful records

Keep copies of everything. Student loans and the rights to service them get bundled and sold, often more than once, and a lot of chefs can end up in the kitchen. Consolidations can get improperly recorded, siblings can get each other’s bills, and things can get generally out of whack. It’s up to you to keep accurate records, and to get everything in writing, so that you have official documentation when you have to dispute something or argue with the billing department or — and this happens more often than you can imagine — you have to provide some loan servicer with documentation that they should already have.

The student loan dragon is big, menacing, and has an insatiable appetite, even if you can’t afford to feed it. Thankfully, these six strategies for paying off your student loans will help you sooth the savage beast and get out of debt as safely as possible.

Visit Us:https://studentloandaddy.com/

This article has written by Miss Money Belle

Student Loan Daddy Private Student Loans

 Unfortunately, Private student loan is not currently offering any direct private student loans.

Fortunately, you can apply for a private student loan from one of our trusted partners. 

Click here for more information.

Fees 

There are no application fees or origination fees for a Student Loan Daddy Private Student Loans. There may be a repayment finance charge depending on your (or your co-signer’s) creditworthiness, as determined by the Lender. This repayment fee would be assessed at the time that your Private Loan goes into repayment. Applying with a creditworthy co-signer may help you qualify for a lower repayment fee, if any.

Interest Rates 

The interest rates on Private Student Loans are variable rates based on the one-month LIBOR index, as published in The Wall Street Journal. Your variable rate will be calculated by adding the current one-month LIBOR index to a margin and then rounding up to the nearest 0.125%.

The margin used to calculate your variable rate will depend on your (or your co-signer’s) creditworthiness, as determined by the Lender. The current margin ranges from 2% to 8%. Applying with a creditworthy co-signer may help you qualify for a lower margin and thus a lower interest rate.

Your interest rate will fluctuate as the one-month LIBOR index changes, resetting on the first day of every month, based on the one-month LIBOR index in place on the 25th day of the previous month. A change in your interest rate may result in a change in your monthly payments. Any increase in the one-month LIBOR index will result in an increase in your interest rate, which, in turn, will result in higher monthly payments and/or an increase in your number of scheduled payments.

Any accrued interest will be added to your principal balance and capitalized only once, at the time that your Private Loan enters repayment.

Please note that the actual rates and fees on a Private Loan will vary depending upon the borrower’s (or co-signer’s) credit history and other underwriting criteria. Your promissory note and Truth-in-Lending disclosure statement will contain the actual terms and conditions of your Private Loan. Upon receipt of your Truth-in-Lending disclosure statement, it will be up to you to decide whether or not to accept the Private Loan you applied for. If you don’t accept the proceeds of the loan, you’ll owe nothing. If you do accept the proceeds of the loan, you’ll be responsible for repaying the full amount of all disbursements, principal, fees, and applicable interest in accordance with the terms of your promissory note.

Some of our borrowers may have obtained their Private Student Loan under a previous Private Loan program different than the one described above. To view repayment examples and the rates, fees, and terms for Private Student Loans offered previously, please click here.

Important Information: 

Since federal student loans generally offer more attractive terms than private student loans, you should always use your federal financing options first. You should only consider taking out a private student loan if you find that, even after your federal loans and grants, your school costs still exceed your available scholarships and financial aid. In that case, a private student loan could provide the remaining money you need.

In order to provide you with a student loan, it will be necessary for us to share the information you’re providing here with certain third parties, such as a lender or servicer. Any personal information you provide to us on this form may be shared with a third party as outlined in our privacy policy, for the purposes of providing you either with a student loan or with other products or services.

Student Loan Daddy is a marketer of student loans and is not the lender for the Private Loan. All loans are subject to credit approval. Private Loans may not be available in all states. Borrower benefits, terms, and conditions are subject to change without notice.

Visit Us:https://studentloandaddy.com/

This article has written by Miss Money Belle

The Empty Nest: 6 Tips for Rekindling Your Romance After Your Kids Leave for College

 You’ve shipped off all the kids to college, and now that they’re gone, you and your spouse or partner may start to notice a vacuum in parent plus loan lives that you weren’t exactly prepared for.

Without your kids at home to bring you together every day as parents, you may find yourselves at a loss: You’ve been so used to relating to each other as parents that you’ve lost sight of how to relate to each other as a couple.

The empty nest can be disconcerting, often lonely, but it also gives parents the chance to rediscover one another. As the two of you adjust to life without your kids, going back to spending time with just each other, here are six tips to help you bring new life to your relationship.

1) Refocus.

For the past 18 or 19 years, your life has revolved around your kids. Now, suddenly, it’s just you and your spouse, and you may find that you’ve drifted apart or that you no longer have much in common. Take this opportunity to get to know each other all over again, and make a commitment to shift your relationship back to being about each other instead of about your kids.

2) Let go.

Part of getting to know each other a second time around may mean addressing painful relationship issues, like past hurts and disappointments. Holding on to bitterness, anger, or resentment will eat away at your relationship, especially without your kids there to distract you from your feelings. Instead, try to talk these things out so you can come to an understanding and get to a point where you can let them go and forgive each other. Addressing the issues together, listening without judging, and admitting fault where you need to can help you both heal and move your relationship forward.

3) Communicate.

Without your kids around to divert your attention and fill up your time, you could suddenly notice a lot of dead air around the house. You and your spouse may have been so busy talking to and about your kids that you may have forgotten how to really talk to each other. Work on re-establishing communication: Start up meaningful conversations, ask questions, make an effort to turn off any auto-pilot responses, and listen. You may find yourself reclaiming both your best friend and lost ground that’s been missing for years.

4) Make time for each other.

When you’ve been together for eighteen-plus years, raising the kids who are now in college, it’s easy to fall into a routine where things become predictable and you’re so used to one another that you’re both looking past each other, even when you’re face to face.

One way to break out of the marriage rut is to go back to when things were new and start dating each other all over again. Pick one night a week and designate it your date night. Make it one of your highest priorities, and don’t let work, chores, or anything else get in the way. Focus on developing your friendship, really paying attention to each other, and having fun together again: Have a romantic candlelit dinner at home or at a nice restaurant, learn to tango, visit a museum, take in a concert or play, work out together at the gym, go hiking, go for a long walk in the park — anything that lets you spend time together doing something you both enjoy.

5) Travel.

Experiencing a new place together for the first time can help bring you and your spouse closer together. After college bills and parent loans, you may not have the budget to jet off to an exotic location, but you can try to arrange inexpensive getaways closer to home. Start taking long weekends together to the mountains, the beach, a nearby bed and breakfast, or a town or city within driving distance you’ve always wanted to see. If you’d like to venture farther and go overseas, start planning and saving now for a trip in the next year or two.

6) Volunteer.

Look for opportunities to serve others through local civic groups or national organizations. Besides allowing both of you to give back to your community, volunteering can help strengthen your relationship through a common purpose and by giving you a joint sense of fulfillment.

Visit Us:https://studentloandaddy.com/

6 Strategies for Slaying the Student Loan Dragon

For recent college graduates, facing debt from student loans bad credit can feel like squaring off against a fire-breathing dragon of ancient myth, armed only with a metal trash can lid for a shield and a toothpick for a lance. In fact, the Class of 2011 is the most indebted ever, with average loan balances close to $27,000, a harsh reality for graduates who are trying to find jobs that earn them enough so they can stay current on student loan payments. But all is not lost. Here are six strategies to help you slay the student loan dragon.

1. New tools can help you understand your repayment options

The first thing you should do is check out a new website called PaybackSmarter.com, which will help you see your student loan options in graphic detail. For example, you can consolidate your loans to get longer terms with a higher total repayment but smaller monthly minimums, or you can pay more each month to pay off your loans earlier and lower your total repayment but increase your monthly minimums.

2. Look into federal student loan repayment programs

If you can afford your monthly payments, stand pat. But if you can’t because you don’t have a job or the job you have doesn’t pay enough, then you should consider enrolling in the federal Income Based Repayment program, which will allow you pay an affordable percentage of your monthly income over a certain number of years, after which any remaining student loan balance is forgiven — and if your income is zero because you’re unemployed, then you pay nothing.

You should also consider federal loan forgiveness programs and state loan forgiveness programs that help pay off your student loan in exchange for working in a particular field in a certain part of the country for a few years.

3. Manage your private student loans

If you have private student loans, you may be able to refinance them at lower interest rates through a local credit union or through a bank or private lender’s private student consolidation loan. Your parents will probably have to co-sign for a refinance, but since they probably had to co-sign your private student loans in the first place, that shouldn’t be a problem.

4. Don’t rush to consolidate

Even though we just suggested you look into private student loan consolidation, don’t rush blindly into the fray. In many cases, consolidation won’t actually save you any money — and may end up costing you even more — so investigate your consolidation options carefully, do your homework, and ask lots of questions.

Avoid mixing in your low-interest student loans with your high-interest loans, because you’ll lose your low interest rate. Instead, aim to consolidate your high-interest loans into lower-interest loans and leave your low-interest loans alone. And watch out for low-interest consolidation loans with variable interest rates. Once interest rates rise, your variable-rate consolidation loan could end up costing you more than your original fixed-rate loan that was 4 or 5 percent higher.

5. Seek help from your family

You can always ask mom, dad, and the grandparents to help if things are looking bleak. If you and your family is good with money and you’re good at paying your bills on time, try to work out a deal for an intra-family loan to help pay off your debt. With interest rates on CDs and savings accounts abysmally low, your parents and grandparents stand to make out even if they loan you money at half the interest rate of your student loan, Just make sure everyone is happy with the terms and signs a contract.

Alternatively, instead of getting financially involved with family — which can be tricky thing to pull off for many people — you can ask that birthday and holiday gifts be given as cash so you can use them to pay off your student loans.

6. Keep careful records

Keep copies of everything. Student loans and the rights to service them get bundled and sold, often more than once, and a lot of chefs can end up in the kitchen. Consolidations can get improperly recorded, siblings can get each other’s bills, and things can get generally out of whack. It’s up to you to keep accurate records, and to get everything in writing, so that you have official documentation when you have to dispute something or argue with the billing department or — and this happens more often than you can imagine — you have to provide some loan servicer with documentation that they should already have.

The student loan dragon is big, menacing, and has an insatiable appetite, even if you can’t afford to feed it. Thankfully, these six strategies for paying off your student loans will help you sooth the savage beast and get out of debt as safely as possible.

Visit Us:https://studentloandaddy.com/

As College Savings Decline, Students Must Borrow More Money for College

 More than four years into the recession, many Americans have started using credit cards and money from their savings to make ends meet, including education savings accounts like state-managed 529 plans, which are designed to help families pay for Federal student loan consolidation themselves and avoid debt from student loans.

Overall, personal, retirement, and college savings are down across the country, a trend caused in large part by the housing crisis. Since their peak in 2006, home prices have fallen 33 percent, resulting in a staggering $7 trillion in household wealth losses and about 12 million homeowners who have mortgages worth more than their properties. As families compensate for losses by acquiring more credit card debt and raiding savings and retirement funds, more students are being forced to borrow more education loans to pay for college.

According to Mark Vitner, managing director and senior economist at Wells Fargo Securities, before the housing bust households were similarly spending more and taking on more debt but it was voluntary. Families believed then that their homes represented an adequate investment.

“When the stock market and the housing market were booming, we saw that a lot of people would take on more debt and save less. They felt the saving was being done for them,” Vitner said. “Today, the saving rate is falling out of necessity. Food and energy prices have risen and folks don’t have as much money to spend on the things that they would like.”

Now the personal savings rate has fallen back to its lowest level since the recession began in Dec. 2007. In November, the personal savings rate fell to 3.5 percent, down from 5.1 percent a year before, according to the U.S. Commerce Department. Currently, a third of 401(k) retirement savings account holders have outstanding loans borrowed from their accounts, a 20 percent increase among all 401(k) participants and a 60 percent increase among 401(k) participants with lower earnings. The vast majority of borrowers reported needing money for college or to pay off essential expenses like bills and car repairs (“U.S. Recovery at Risk as Americans Raid Savings,” Reuters, Jan. 17, 2012).

Money for College Is Increasingly Used to Pay Living Expenses

Popular state-managed 529 college savings plans were hit particularly hard by outflows in 2011. Assets in 529 plans fell more than 10 percent in the third quarter alone. Between July and September, 529 plans nationwide lost $354 million as parents withdrew money to help cover non-educational expenses. During the same period in 2010, 529 plans grew by $927 million.

According to investment firm Vanguard, parents of younger children are continuing to save “but they may be concerned about the economy and market conditions and have cut back a little.” Contributions to 529 plans managed by Vanguard dropped 1 percent in 2011 after climbing 17 percent from 2009 to 2010.

The decline in college savings is already causing an increase in the amount of education loans that students must borrow to pay for college. According to the Federal Reserve, household borrowing on student loans, credit cards, car loans, and other forms of installment debt jumped almost 10 percent from October to November, the biggest increase in a decade.

Overall, students are borrowing twice as much money for college as they did a decade ago, when adjusted for inflation, according to the College Board, and Americans owe more than $1 trillion on student loans, which is greater than the nation’s total outstanding credit card debt.

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Top 9 Colleges With the Lowest and Highest Student Loan Debt

 In the world of Federal student loan debt, some colleges are doing a pretty good job of keeping it under control and some have simply dropped the leash and let the dog run amok. To help you get a better idea of where certain colleges stand, we’ve put together a list of the top schools where students borrow the least amount of student loans and the top schools where students borrow the most, according to recently released data from U.S. News & World Report.

The data takes a look at the percentage of students who borrowed at a particular school and what the average student debt load was. The data doesn’t examine for-profit schools, which produce some of the highest debt loads in the nation — as well as the highest default rates. The average debt figures also aren’t broken down by things like how much is due to higher out-of-state tuition or international student tuition, but the numbers are a good indication of how much effort a school places in minimizing the weight of student loans that’s placed on the backs of its students.

Colleges with the Least Debt From Student Loans

While these colleges produced some pretty affordable student loan numbers, some of the schools had in excess of 70 percent of students borrowing loans to pay for college.

1. Alice Lloyd College (Kentucky)

Percent of 2012 graduates who borrowed: 32 percent

Average student debt: $3,108

2. Princeton University (New Jersey)

Percent of 2012 graduates who borrowed: 24 percent

Average student debt: $4,385

3. Anna Maria College (Massachusetts)

Percent of 2012 graduates who borrowed: 77 percent

Average student debt: $5,152

4. College of the Ozarks (Missouri)

Percent of 2012 graduates who borrowed: 11 percent

Average student debt: $5,389

5. Berea College (Kentucky)

Percent of 2012 graduates who borrowed: 73 percent

Average student debt: $5,836

6. Reinhardt University (Georgia)

Percent of 2012 graduates who borrowed: 62 percent

Average student debt: $6,131

7. Clearwater Christian College (Florida)

Percent of 2012 graduates who borrowed: 51 percent

Average student debt: $6,365

8. California State University, Bakersfield

Percent of 2012 graduates who borrowed: 72 percent

Average student debt: $6,730

9. East-West University (Illinois)

Percent of 2012 graduates who borrowed: 80 percent

Average student debt: $7,000

Colleges With the Most Debt From Student Loans

Not only do these schools produce graduates with debt burdens equal to the price of a couple of new cars, but they double-down with some of the highest rates of student borrowing in higher education.

1. Eastern Nazarene College (Massachusetts)

Percent of 2012 graduates who borrowed: 87 percent

Average student debt: $51,336

2. Ohio Northern University

Percent of 2012 graduates who borrowed: 85 percent

Average student debt: $48,886

3. Holy Names University (California)

Percent of 2012 graduates who borrowed: 79 percent

Average student debt: $48,833

4. University of New England (Maine)

Percent of 2012 graduates who borrowed: 88 percent

Average student debt: $47,293

5. Mount Ida College (Massachusetts)

Percent of 2012 graduates who borrowed: 80 percent

Average student debt: $46,393

6. La Salle University (Pennsylvania)

Percent of 2012 graduates who borrowed: 84 percent

Average student debt: $45,888

7. Kettering University (Michigan)

Percent of 2012 graduates who borrowed: 78 percent

Average student debt: $45,570

8. St. Joseph’s University (Pennsylvania)

Percent of 2012 graduates who borrowed: 62 percent

Average student debt: $45,530

9. Clark Atlanta University (Georgia)

Percent of 2012 graduates who borrowed: 93 percent

Average student debt: $45,227

Overall, among the 1,028 schools that submitted data to U.S. News & World Report, about 68 percent of graduates borrowed student loans in 2010. The average student who borrowed took out $25,000 in college loans.

Last year, students borrowed over $1 billion in student loans for the first time in history and total outstanding student loan debt — which is now nearing $1 trillion — surpassed total outstanding credit card debt for the first time ever.

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Why Paying Student Loans With Credit Cards Is a Bad Idea

Private student loan consolidation debt and credit card debt rank as two of the highest forms of consumer debt in the United States. Outstanding debt from student loans surpassed debt from credit cards for the first time ever last year and now stands ready to eclipse the $1 trillion mark. Sometime soon, if borrowing and spending trends continue, debt from education loans and credit cards combined will probably start pushing an unprecedented $2 trillion.

Together, debt from college loans and credit cards is so potentially toxic that it seems outlandish to even suggest any notion of mixing the two. That’s why we were so puzzled to read an article posted by U.S. News & World Report’s Student Loan Ranger that describes two programs by student loan giant Sallie Mae that encourages borrowers to repay their private student loans with credit cards issued by the lender that almost assuredly have far higher interest rates than the loans themselves.

The article, written by Equal Justice Works, a nonprofit organization that helps remove financial barriers for law students and lawyers seeking public service careers, was quick to point out Sallie Mae’s apparent contradiction. On the one hand, the article says, Sallie Mae offers good advice on how to avoid spiraling debt from credit cards. On the other hand, Sallie Mae encourages borrowers to use credit cards by linking them to student loan repayments, which, the article notes, “seems to encourage a vicious cycle of spiraling debt.”

Going Into Debt to Get Out of Debt Is Never a Good Idea

Under the Sallie Mae Cash Back Visa Card program, borrowers can redeem the rewards they earn from using the card to make extra payments on their Sallie Mae private student loans. According to the program’s pricing and terms disclosure, the variable rate on the card ranges from 11.99 percent to 15.99 percent. Of course, like many other credit cards, if a borrower makes a single late payment, goes over the credit limit, or makes a payment that is returned, the APR climbs to 29.99 percent. Like other credit cards, there is also a collection of transaction fees and late fees and over-the-credit limit fees that can pile up if a borrower isn’t careful.

Combine high interest rates with paltry cash-back rewards of between 1 percent and 3 percent and it’s hard to see how amassing credit card debt at higher interest rates than the student loans the card purports to help pay will actually be beneficial.

A second, perhaps even more perplexing Sallie Mae program offers a credit card to parents who cosign private education loans for their college students. The card offers cash-back rewards when parents use it to make student loan payments on behalf of their kids. In other words, parents who cosign a line of credit (the student loan) can get a second line of credit (the credit card) that can be used to pay off the first line of credit at, in all likelihood, a much higher interest rate.

In the end, the article concludes, the Sallie Mae credit card programs are just one example of why borrowers should avoid using credit cards to pay off student loans. Instead, the article recommends that students borrow frugally and wisely and start with federal student loans, which have lower interest rates and offer more borrower protections than private student loans. The article also recommends that students who need help paying their student loans should explore repayment options like Income-Based Repayment and Public Service Loan Forgiveness, which help students pay back education loans without going into further debt.

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3 Tips for Getting the Most Financial Aid When Filling Out the FAFSA

 The Free Application for Federal Private student loan Aid (FAFSA) is the single most important document for determining your eligibility for student loans, grants, and other forms of financial aid. The form needs to be filled out each year, and how you fill it out can make a big difference when it comes to your financial aid award. Here are three tips for completing the form that will help you get as much money for college as possible.

1. Complete the FAFSA as early as possible

Deadlines for submitting the FAFSA can vary by state and institution. Some deadlines can be as early as February or March, but most schools begin accepting the FAFSA on Jan. 1. Since most financial aid, including federal, state and institutional grants, are awarded on a first-come, first-served basis, you’re better off sitting down, filling out the form, and turning it in as close to the beginning of January as possible.

Even though the FAFSA for the fall 2012 semester uses information from you and your family’s 2011 tax returns, you shouldn’t wait until you complete your taxes to submit the FAFSA. In fact, the FAFSA process is designed to allow you to estimate your 2011 assets so that the application process doesn’t stall as families hurry to calculate this year’s taxes first. Simply fill out the FAFSA using your 2010 tax filings and then go back and update your FAFSA application later with your finalized tax information.

You can get a list of FAFSA deadlines by state at www.fafsa.ed.gov/deadlines.

2. Opt for filling out the online version of the FAFSA

Although you can get a paper copy of the FAFSA, fill it out, and mail it in, it’s probably a better idea to hop on the internet and fill out the online version instead. Opting for the online version of the FAFSA will allow you to immediately get an estimate of your expected family contribution, which is used by the federal government, state governments, and colleges and universities to determine your eligibility for federal student loans, federal and state grants, and institutional financial aid. Otherwise, you’ll have to wait two or more weeks if you fill out the paper version. And the online version makes it easier to correct or update your FAFSA later on with your finalized 2011 tax return information.

The online version of the FAFSA can be found at www.fafsa.ed.gov/options.

3. Take advantage of how the FAFSA looks at assets to maximize your financial aid

The FAFSA looks at you and your family’s assets in particular ways, such as weighting student assets more heavily that parent assets. To maximize the amount of financial aid you qualify for, it’s important to take advantage of FAFSA’s blind spots and shield as many assets as possible from the income calculators:

Since the FAFSA counts financial gifts form relatives and friends as income — and weighs your income and assets more heavily than your parent’s — it’s in your best interests to have gifts transferred to a parent’s checking or savings account.

Since the FAFSA doesn’t count pensions and retirement funds as income, families should think about contributing as much money to them as possible.

Distributions from 529 college savings plans owned by your grandparents will count as student assets. To prevent this, have your grandparents transfer their 529 college savings plan to you or your parent’s name so that it counts as parent assets.

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