Subsidized Loan » College Loans

Bad Credit College Loans

admin — Tue, 13 Apr 2010 05:32:23 +0000

Your bad credit rating need not stop you from putting your finances back on track and getting the best refinancing deals, such as college-loan consolidation. Yes, even with less-than-perfect credit, many companies are willing to help you simplify your college loan repayment terms and enjoy lower interest rates

Consolidation can work wonders in getting your finances back on track. By combining all your loans and paying them with from your different creditors, loan consolidation companies simplify your payment terms so that you only have to deal with one creditor (them) and one interest rate. And because you now only have one creditor, your overall FICO credit rating significantly improves.

With consolidation, you can decrease your monthly payables by as much as fifty percent by extending the standard repayment plan to up to thirty years, so that you can slowly rebuild your credit. Interest rates imposed by consolidation companies are now as low as ever – and even with bad credit, you can qualify for as low as 3.50%!

Before you apply, it is best to personally talk to representatives from consolidation companies in order to get answers to your specific questions, such as how much you can actually save monthly, deference and forbearance terms, and special conditions for individuals with bad credit.

Be prepared with a list of your concerns and demand straight facts, not sugarcoated marketing statements. It is a good idea to ask for a detailed payment schedule before you sign up for anything. Finally, compare the terms and conditions imposed by different consolidation companies until you arrive at the best one.

Remember that college loan consolidation should help you manage your debt and avoid loan default, not make your life even harder. Do not immediately sign up for consolidation if you do not know how it works and what implications it has on your long-term financial health. Consult several experts before making a decision.

By: Thomas Morva

College Loans

admin — Mon, 22 Mar 2010 21:26:36 +0000

Many people face great financial difficulties when it comes to funding college education. A feasible option for such people is college loans. Individuals in the U.S. have been given a chance to continue with their studies, with the help of college loans, even if their earnings are modest.

It is advisable for people to give due consideration to their expenses if they are interested in covering them with college loans. There are various kinds of college loans available. However depending on their expenses, they will have to choose a loan that suits them the best. A majority of students take college loans to pay their tuition and course fees. Part of this loan can also be used to pay for room rent, supplies, and books.

People can opt for federal student loans, which is the most usually used and can be of two types, subsidized and unsubsidized. In case of subsidized loan, the government, not students, pays interest on the loan. However, these loans are granted to only those individuals who are already facing huge debts. In case of unsubsidized loans, interest is paid by students and is not delayed until after the student graduates.

Private student loans are another type of college loan that can be provided to any person who has a good credit score; it can be used for any expenses. It is important for students to know that this type of loan is unsecured. This implies that it needs no collateral, but instead has very high interest rates.

Parent loans are also a type of college loan, which can be obtained by parents, and since they have good credit, the payoff and the interest rates are reasonably lower.

College loan consolidation is made use of to consolidate all student loans. With the help of college loan consolidation, individuals can pay off to only one lender. Students can opt for consolidation regardless of their credit rating. When applying for a college loan consolidation, it is very necessary for students to research and then choose a reliable company to handle their monetary troubles.

If students are not able to pay their monthly installments, they can also consider a college loan deferment. This means that they get a suspension of payments under special circumstances, such as if they are unemployed or suffering from financial hardship.

By: Thomas Morva

Low Interest College Loans – Where to Look for a Suitable Deal

admin — Tue, 15 Dec 2009 11:22:04 +0000

Now that you are aspiring to pursue college studies, you would need financing various expenses through a loan. And surely the loan must come at lower interest rate so that you are not at all under any stress of repaying it. Well, there are many sources wherefrom a student can find low interest college loans depending on his or her personal circumstances.

The best considered source of Low Interest College Loans are federal student loans. These loans can be categorized under Perkins loan, subsidized or unsubsidized Stafford loans. A student can choose these loans as per his or her prevailing circumstances. But one common feature of these loans is their lower interest rate as these loans are federal loans. Perkins loans are made to students in greatest needs. Such a student does not repay the loan until he or she completes education. Perkins loans are of lowest interest rate. Stafford subsidized loans are funded by the government and hence interest rate is very low. Unsubsidized Stafford loans are meant for all type of students and interest payment continues throughout the loan repayment duration.

Those who fail to avail Federal loans; they can borrow money through private lenders. These lenders offer college loans at low interest rate on certain condition. For instance, secured loans are of lower rate. Parents will have to pledge home or any valued asset as collateral of secured student loans to get it at low rate. Also, parents past credit history should be good. There are many online lenders providing low interest college loans. You can search them on internet.

In case a student is tagged bad credit, he or she should take private student loan with a co-signer who has excellent or good credit history. The lender may reduce interest rate as the repayment responsibility is with the co-signer. These are some of the aspects of low interest college loans that you should keep in mind prior to applying for it.

By: Julia Russell

How Student Loans Work

admin — Sun, 13 Dec 2009 05:39:57 +0000

by: Gray Rollins

Students have many options for financing the cost of college. Loans are just some of those options. However, all avenues for securing scholarships and grants should be pursued before trying to find a loan. This is because scholarships and grants do not have to be paid back, while loans do. There are many different types of loans available for consideration, and many factors of which you should be aware.

First of all, it’s best to get your Free Application for Federal Student Aid (FAFSA) in early. In fact, it should be turned in as soon as you or your parents have mailed in your annual income tax forms. While the federal government uses this information in order to assess your need for aid, state governments also offer grants based on your form. Most of the time these state grants are first come first served, so the earlier you apply the better chance you have of receiving this type of financial aid. Also, this is the method in which you apply for government loans as well.

If you find you did not receive enough aid to cover your expenses, move on to applying for a loan. There are several types of government loans to consider. The first is a Parent Loan for Undergraduate Students (PLUS) which puts the responsibility of repayment on parents, at an interest rate that’s currently 8.5 percent. There is no limit on the funds, and repayment must begin 60 days after disbursement with no grace period. There is a credit check involved. If the parents are denied the loan, the student will have an increased limit when they apply for Stafford loans.

Stafford loans are either disbursed by banks or directly by the federal government. There are subsidized loans, meaning the government pays the interest while you are in school. They are based on need. There are also unsubsidized loans in which you are responsible for the interest which accrues. They are not need based. However, you can elect to defer the interest payments until after graduation. Students are not required to repay these loans until six months after they graduate. Loan caps differ depending upon how far along you are in your schooling. Freshmen can borrow up to $3,500, sophomores up to $4,500, and juniors and seniors $5,000. The limits increase if you are an independent student, your parents were denied a PLUS loan, or if you are a graduate student. These loans currently have a fixed interest rate of 6.8 percent, but some lenders may offer rate reductions based upon your career path, such as for teachers or nurses.

A school based loan, offered with funds provided by the government, is called the Perkins Loan. It is need based, subsidized, and currently has a fixed interest rate of 5 percent. Undergraduates are eligible to receive up to $4,000 per year, while graduate students can receive up to $6,000. Your school’s financial aid office determines if you are eligible to receive this type of loan.

A first time borrower can expect his or her loan funds to be delayed by about a month after those of someone who has borrowed before. This means you should apply for your loan as soon as possible. You will also be required to take an entrance interview in order to receive your payments. You will probably be able to take this interview online. Your financial aid office will assist you in completing the interview.

If you know you are going to need loan money to cover college expenses, check with your school’s financial aid office. Some schools do not accept Stafford loans, so you would need to make other arrangements for a loan or find a school that will accept one. Private loans from banks are an option, but be aware that most of the time you will be required to repay them without a grace period. There are some, such as one offered through U-promise, that can be deferred until after graduation. Also, since they are based upon credit scores, many students may not qualify due to a lack of credit history.

Don’t wait until the last minute. Get your FAFSA filled out, and explore all of your options regarding paying for college. This will ensure a smooth transition and better prepare you for any setbacks that may come along. To find out more about loans go to the best loan site on the web at http://www.loaninfocentral.blogspot.com/

By: keevisr

The Keys to Obtaining and Refinancing Your College Loan

admin — Fri, 11 Dec 2009 13:31:33 +0000

How many of you are biting your nails trying to figure out what you should do to get your college paid for? You know you need a loan… but what kind? What are the differences? Would it be a good idea to refinance or consolidate any loans you already have? Is this the right time? How much do you really need? What do college loans cover? If you’re wondering about these things, please read on.

Before you run out and get a college loan, you first need to know how much of a loan you are going to need. Of course, the obvious part of the loan is your tuition and the cost of your courses. But there are many other things that you may need to have covered through your college loan. This can be your room and board, school supplies, lab supplies, books, etc. But this just pertains to your actual schooling. There are other things you need to take into consideration. This can be car insurance, gas, transportation, health insurance, food, etc. You need to add all of these factors up for each year. Then, multiply it by how many years you are to be in college. This will give you a rough estimate of how much money you will need.

Some college loans can be used for anything. The lender couldn’t care less as long as you pay it back. If you plan on getting a part time job, you can count on part of your paycheck being used towards things that your college loan does not cover. However remember you’ll need to keep part of your paycheck to pay your monthly college loan payment!

Now we shall go over the several types of college loans out there. A little later, I will explain about refinancing a college loan.

First, we will go over federal student loans. These college loans can either be subsidized or unsubsidized.

Subsidized loans are when the government pays the interest of the loan for the students. You must show that you are in great financial need in order to get this type of loan.

Unsubsidized loans are when the student must pay the interest, but the interest is not deferred until after graduation. Anyone can get an unsubsidized loan. Both of these types of federal student loans are the most commonly used.

The next are private student loans. Private student loans are given to someone with a good credit score. They can be used for anything, not just the cost of tuition. They are also unsecured. This means they require no collateral, but they have extremely high interest rates.

Now, we go to for parent loans. As you guessed, this is a loan that parents can take for the full amount of the college tuition. You just have to hope mommy and daddy are willing to do this for you! The payoff rate and interest rate is much lower with this type of loan, often because parents have good credit and the funds to pay the loan off.

Now we come to consolidation loans. This type of loan is used to consolidate all of a student’s loans together so they can be paid off in one easy payment plan to one lender, rather than having several payments to several lenders. Many students end up getting this type of college loan after they made the mistake of getting too many college loans at once.

Those of you, who do already have a loan, may be interested in refinancing. Refinancing college loans often seems like a good idea, and it is…if you use it to your advantage. I’ll explain that in a minute. First, you need to understand a few things. Most college loans are of a variable percentage rate until the rate is locked. You lock a rate by means of a loan consolidation or by refinancing. When rates are very low, it generally is a good idea to attempt to get your loans or loan consolidated or refinanced.

Before you can even think of refinancing, you must know that is only offered to you good people that have always made their monthly loan payment on time. If this does not sound like you, then I wish you good luck trying to refinance!

Refinancing rates are usually one or two percent lower than your original college loan rate. Refinancing rates can save you up to 60 percent. But this is where the possible drawback is – and most people simply don’t realize.

The “drawback” is a hidden one – that most people never see. In order to get your college loan payment lower through refinancing, you are given a much longer time period to pay the loan off. Instead of 5 years to pay it off, it can turn into 20 years to pay it off! This may sound good to you in the beginning. At the time, it will leave you with extra money that you may be in need of for other bills. But in the long run, it just costs you more money because you will be paying interest much longer to the lender. In fact, it can cost you thousands more!

The smart way to do it is after you refinance and obtain the lower rate; pay more towards the monthly bill. This way you will pay off your loan much quicker than normal and at a cheaper rate. But only put more towards paying it off when you can afford it. Remember you refinanced your college loan because you couldn’t afford the payment to begin with. So now you’ve refinanced just pay off your loan as best you can at your own pace, bearing the above in mind.

I hope I didn’t scare you too much. The important thing you have to remember is that most lenders gain money from you through the interest you pay them. If you pay your college loan off faster, you will make the lender less rich! Take a breather and use your head before you jump into anything. In other words “look before you leap”.

© Luke Sharp 2005

By: Luke Sharp

Bad Credit College Loans: Know Your Options

admin — Wed, 25 Nov 2009 03:45:41 +0000

Finishing up your education is a memorable happy moment in your life. But this moment also tags along the fear of funding the education process. There are scenarios when, the student won’t be having credit history at this stage. If you have a credit history then there is typically no problem for you to get the college loan. But if your credit history is not very good and you are afraid how you will be funding your college education; even then you need not to worry. Now there are many options available for bad credit collage loans.

The government thinks at this stage when the student is directly coming from high school and he might not have enough credit history so they do not take into consideration the bad credit or no credit history. So they are providing the facilities for the students so that their studies are not hampered.

The US Department of Education provides the facility of Stafford loan. It is further categorized as subsidized and unsubsidized. For subsidized Stafford loan, the government classifies the students based on their economic conditions. This loan is kind of an award for the student as accruing interest is paid by the government.

Whereas an unsubsidized Stafford loan is granted to any student and the student himself will be bearing the interest. Sometimes the amount is also much less which might not cover all the expenses for the student. So in the end students end up having multiple loans.

The other option available is the Federal Perkins Loans. These loans are again government subsidized loans which do not consider the bad or no credit history of the student. To avail this loan, the student has to be registered with a school/college or say the student should have enrolled for a course in the institute, only then he will be considered for the Perkins Loan. This loan is usually sponsored by the institute.

These grants are on a first come first serve basis. If a student is borrowing from multiple lenders with different interest rates, then he has the option to combine all the loans to one. He will be paying one installment only with comparatively less interest rate as compared to cumulative interest rate.

There is one more option available for students with bad credit history; scholarships. If a student has a good school record, he can get the full scholarship on the fees. But for this you a bit of luck on your side. In some cases the student is granted partial scholarships only and the rest he has to fund through loans.

If you have to avail the bad credit college loans, consider all the options by the government and start planning from your last year of school itself.

By: Adam Hefner

Consolidate Loans And Eliminate Debt

admin — Mon, 23 Nov 2009 01:52:12 +0000

As children, most individuals can hardly wait to grow up and become independent. The idea of not having to answer to Mom or Dad, and doing whatever they please is a worthy goal. Unfortunately, young people entering adulthood soon learn: if it seems too good to be true, it probably is not a reality.

Now, instead of Mom and Dad taking care of all the living details youngsters usually take for granted, the car payment is due, the credit card bills are piling up, and student loans are going to plague the budget for at least the next ten years. Instead of being frustrated with the task of keeping track of all the various bills, and the difficulty of establishing a workable budget, consider consolidating loans and eradicate debt in a timelier fashion.

As with any major decision, the choice to consolidate loans should only be made after considering both the drawbacks and the benefits. First, decide if consolidating is necessary.

For individuals with a mountain of debt, a consumer credit counseling agency will greatly help in making the proper financial decisions. Unless the debt is almost paid off, professionals will probably being the process to consolidate loans, helping an individual eradicate his/her debt sooner.

Probably the most frequent reason to consolidate loans is college. Student loans are costly, and the recent post-secondary graduate will be required to start repaying the debt six months following graduation. Many students will have acquired two types of loans: subsidized and unsubsidized loans. The unsubsidized loan starts accruing interest from day one. Conversely, the subsidized loan starts accruing interest after graduation. Either way, two separate loans, two separate payments, unless the individual decides to consolidate.

However, if the money lent is less than $7500, or scheduled to be paid in full, in the near future, consolidation may not be possible, or even worth the effort. In order to consolidate loans, students should meet specific criteria. According to the information found on the web, the following must apply:

* You are in your six-month grace period following graduation or you have started repaying your loans

* You have eligible loans totaling over $7,500

* You have more than one lender

* You have not already consolidated your student loans, or since consolidation you have gone back to school and acquired new student loans

Once the determination is made concerning the qualifications for consolidated loans, the individual needs to understand the benefits of consolidating loans, even if juggling the bills is not a problem. Consolidated loans are simply as smart move for many individuals, especially the graduated student who is struggling to pay off student aid while support a family.

Consolidated loans are often the answer to financial stress. As a result of the high cost of living, poor budgeting, and the availability of buying on time, many Americans soon find themselves struggling to meet each month’s financial obligations. One extra car part, trip to the doctor, or any other unexpected expense, and people begin floundering in a sea of bills. So, other than bankruptcy, and seven years of bad credit, consolidated loans can eradicate debt faster and help individuals find some financial relief.

For example: a person has maxed-out his/her credit cards, the winter months have been exceptionally cold, and the heating bill has truly taxed the budget. Now, a major illness has left a mound of hospital bills, and no money is left in savings or the checking account. Before the individual throws in the towel, credit counselors can often provide services to ease the stress of debt, by granting a consolidated loan.

How? Counselors have connections with the creditors. If counselors can assure the lender bills will be paid in a timely manner, most companies will gladly forgive most, if not all, of the interest and penalties attached to a bill, since a consolidated loan is pending.

Why? When an individual receives a consolidated loan from a counseling service, he/she will pay one set amount to the service. After receiving the payment, consumer credit establishments divide up the monies, and pay all the lenders a pre-established amount monthly. Thus, the company is assured the money owed will be paid. Now, the individual only has to remember one bill, usually at a lower interest rate, leaving enough money for the day-to-day living expenses.

Now, for the former student faced with paying for financial aid used during college, consolidated loans are the answer to impending financial hardship. For example, many students have used both unsubsidized and subsidized student loans. Six months after graduation, the bills start arriving every month, for the next 10 years, if necessary. The mere thought is depressing!

However, by consolidating the loans, before the sixth month grace period is up, not only will one bill arrive monthly, the loan can be extended for 10-20-30 years, depending on the amount and the circumstances. In addition, the interest rates are lower. Thus, for some borrowers, the loan repayment may be reduced by as much as 54%. One bill to pay; half the payment is required each month; the loan can be extended for a longer period of time, if needed. What more needs to be said?

So, whether an individual has simply gotten too deep in debt, or facing the inevitable repayment of student aid, consolidated loans can eradicate debt faster or with less financial strain, no bankruptcy necessary.

By: Erol Orderland

Important Facts on Federal Stafford Student Loans

admin — Fri, 06 Nov 2009 02:04:48 +0000

One thing you will agree with me is that everyone would like to join a good college or university where all your interests will be met. But many people articulate that these learning institutions are very expensive and can not be afforded. Well I do not agree with them because, you can get to this specific university or college you aspire to join. All you need to know is that student loans offering institutions are available for you.

The best and the most affordable student loan one should consider is the Federal Stafford Student Loan. The Federal Stafford Student Loan is very popular and is changing the lives of many people around the world who are taking the step of applying for it. This is the only one of a kind loan offering loans with or without financial need. It does not care about how much you and your family can afford or put in to help pay for your education. That means anyone can apply for it regardless of the financial status.

Federal Student Loan is a low cost loan secured by the federal government and it comes along with so many other benefits that one would dream for. For instance eligibility for federal loan consolidation, repayment is postponed until you are done with college, the loans are given to students under their own names therefore you do not need any co-signer and again no security or credit check is required at all. Another good thing about Federal Stafford loans is that you will receive a certain grace period to allow you settle down after college and start paying when you can most comfortably pay for the Stafford loan. In the Federal Stafford loans website you will be in a position to learn about repayment terms available for you according to the kind of a Stafford loan you decide to take like standard repayment, graduated repayment terms etc. Get more information about this and you will understand what I am talking about.

To kick-start the application process for a Stafford Student Loan you will need to fill a FAFSA form, submit it and be accepted. Do this as early as possible to avoid rushing with the deadlines. If you are accepted the federal government will confirm your eligibility to the Stafford Student Loans officials who in turn will guide you on what to do. Having passed all the requirements like being a U.S. permanent resident or eligible non-citizen, enrolled or planning to enroll at least half time etc., then decide on applying for a Stafford Loan. One thing you will need to know is that you need to choose any of the available Stafford Loans according to your choice. You will need to decide between subsidized loans and unsubsidized types of Stafford loans. For the subsidized Stafford loans the federal government pays the interests for you while school. However you must have financial need determined by your School. For the unsubsidized Stafford loans you are required to pay the interest for yourself for an agreed payment period.

If you do not qualify for the subsidized loan which is based on need, you may qualify for the unsubsidized loan. There is no cause for alarm since the two loans have similar terms except for the differences aforementioned. So go for this wonderful and considerate Federal Stafford Loan and enjoy the great benefits.

Poly Muthumbi, a Web Administrator, Has Been Researching and Reporting on Student Loans for Years. For More Information on Stafford Student Loans, Visit Her Site at Federal Stafford Student Loan

By: Poly Muthumbi

Low Interest College Loans – Where To Look For A Suitable Deal

admin — Sat, 24 Oct 2009 13:54:14 +0000

Now that you are aspiring to pursue college studies, you would need financing various expenses through a loan. And surely the loan must come at lower interest rate so that you are not at all under any stress of repaying it. Well, there are many sources where from a student can find low interest college loans depending on his or her personal circumstances.

The best considered source of low interest college loans are federal student loans. These loans can be categorized under Perkins loan, subsidized or unsubsidized Stafford loans. A student can choose these loans as per his or her prevailing circumstances. But one common feature of these loans is their lower interest rate as these loans are federal loans. Perkins loans are made to students in greatest needs. Such a student does not repay the loan until he or she completes education. Perkins loans are of lowest interest rate. Stafford subsidized loans are funded by the government and hence interest rate is very low. Unsubsidized Stafford loans are meant for all type of students and interest payment continues throughout the loan repayment duration.

Those who fail to avail Federal loans; they can borrow money through private lenders. These lenders offer college loans at low interest rate on certain condition. For instance, secured loans are of lower rate. Parents will have to pledge home or any valued asset as collateral of secured student loans to get it at low rate. Also, parents past credit history should be good. There are many online lenders providing low interest college loans. You can search them on internet.

In case a student is tagged bad credit, he or she should take private student loan with a co-signer who has excellent or good credit history. The lender may reduce interest rate as the repayment responsibility is with the co-signer. These are some of the aspects of low interest college loans that you should keep in mind prior to applying for it.

By: Julia Russell

New Repayment Break on Student Loans Begins July 1

admin — Sun, 11 Oct 2009 11:34:18 +0000

It’s not an easy time to be graduating from college with student loans. With the unemployment rate soaring toward 10 percent and the average starting salary for college graduates down 2.2 percent this year, student loan borrowers – whose average debt from student loans tops $22,000 – are now having an even tougher time affording their student loan payments.

The good news? Starting July 1, 2009, graduates with federal college loans may be able to qualify for a new government program that can reduce the monthly payments on their student loans based on their income.

Income-Based Repayment for Federal Student Loans

The income-based repayment program, created by Congress in 2007 as part of the College Cost Reduction and Access Act, will cap a borrower’s monthly student loan payments at a percentage of her or his income, when the borrower’s income is at least 50 percent higher than the current federal poverty line for the borrower’s family size.

These income-based student loan payments will be calculated as 15 percent of the amount by which a borrower’s adjusted gross income exceeds 150 percent of the poverty line.

(For individuals, the 2009 poverty line is $10,830 in all states except Alaska and Hawaii. The complete federal poverty guidelines for 2009 are available on the website of the U.S. Department of Health and Human Services.)

For example: 150 percent of the current individual poverty line of $10,830 is $16,245. If a borrower’s annual adjusted gross income is $25,000, the monthly payments on her or his eligible student loans would be capped at $109.44 – 15 percent of the difference between $25,000 and $16,245, divided by 12 months. If a borrower’s annual adjusted gross income is $40,000, the monthly payments on any eligible student loans would be capped at $296.94 ($40,000 – $16,245, multiplied by 15 percent, divided by 12).

Income-based monthly payments will be adjusted annually, based on a borrower’s federal tax return from the previous year. As a borrower’s income rises, the income-based repayment cap will also go up. If the income-based repayment cap reaches a level higher than what a borrower’s monthly payment would be under a standard 10-year student loan repayment plan, the borrower will no longer qualify for income-based repayment for her or his student loans.

Borrowers whose adjusted gross income falls below 150 percent of the poverty threshold won’t be required to make any payments on those student loans that qualify for income-based repayment.

Even if no payments are due, however, interest will continue to accrue on those college loans . Unpaid interest will also accrue if a borrower’s income-based monthly payments aren’t sufficient to cover the full monthly interest on the qualifying college loans. Any accrued unpaid interest will be added to the student loan principal and capitalized when the borrower no longer qualifies for income-based repayment.

Subsidized Interest and Student Loan Forgiveness

For those borrowers who hold subsidized student loans or a federal consolidation loan that included subsidized Stafford loans or Perkins loans, the government will cover any unpaid interest on those subsidized loans (or on that portion of a student loan consolidation that’s comprised of subsidized loans) for the first three years that a borrower is in income-based repayment.

The longest that a borrower can remain on the income-based repayment plan is 25 years. After 25 years of income-based payments, the government will forgive any remaining principal and unpaid interest – although borrowers should note that under current tax law, this forgiven student loan debt would be taxable.

Borrowers who are employed full-time in qualifying jobs in the public service sector may have their remaining student loan debt forgiven after just 10 years in the income-based repayment program, and this forgiveness would be tax-free, thanks to a ruling from the U.S. Treasury last year.

Qualifying for Income-Based Repayment

To find out if you qualify for income-based repayment on your federal college loans, you’ll need to contact your lender and provide information about your financial situation – you’ll need to demonstrate “partial financial hardship,” as defined by federal regulations.

Only federal Stafford and Grad PLUS student loans in good standing, along with consolidations of these college loans, are eligible for income-based repayment. Federal Perkins loans are eligible only if they’ve been included in a federal student loan consolidation. Other college loans are ineligible:

Private student loans. The income-based repayment program applies only to federal student loans. If you’re having problems meeting the monthly payments on your private student loans , you should contact the lenders to see if they’re willing to work out more affordable repayment plans for you. Keep in mind, though, that private student loans typically have less flexible repayment options than federal student loans.

Federal PLUS loans. If your parents took out PLUS parent loans to help you pay for college, they won’t be able to take advantage of income-based repayment on their PLUS loans. Consolidation loans that included PLUS parent loans are also excluded from income-based repayment. Any Grad PLUS loans you took out as a graduate student, however, as well as consolidations of Grad PLUS loans, are eligible.

Defaulted student loans. Your student loans don’t have to be new to be eligible – even long-time graduates may be able to qualify for income-based repayment on college loans taken out years ago. But you can’t be in default on your loans. To qualify for an income-based repayment plan, any federal college loans you have in default will need to be rehabilitated first.

By: Jeffrey Mictabor