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Repaying a Grant Overpayment Debt

admin — Fri, 22 Jan 2010 20:48:27 +0000

Federal Pell Grants, Federal Supplemental Educational Opportunity Grants (FSEOG), Academic Competitiveness Grants and National Science and Mathematics Access to Retain Talent Grant (National SMART Grants). Once a school notifies you that you must repay part of a grant, you will have 45 days to either pay that portion of the grant back in full or enter into a satisfactory repayment arrangement with the school. If you do not carry out one of these options, you will lose your eligibility for further Title IV Federal financial aid, and the school will assign the overpayment debt to the U.S. Department of Education (Department) for collection.If you choose to enter into a satisfactory repayment arrangement, the school may assign the debt to the Department for collection or may keep the debt and allow you to make payments directly to them.

Teacher Education Assistance for College and Higher Education (TEACH) Grants. Through the College Cost Reduction and Access Act of 2007, Congress created the TEACH Grant Program that provides grants of up to $4,000 per year to students who intend to teach in a public or private elementary or secondary school that serves students from low-income families. If you have been awarded a TEACH Grant, and then it is determined that all or a portion of your grant(s) has been over-awarded, the amount declared an overpayment will be assigned to the Department for collection.

You may restore your eligibility for Title IV Federal financial aid by entering into an acceptable repayment plan with the Department. As long as you make the payments as agreed the grant-originated debt will not affect your eligibility for further aid. However, if you fail to make the agreed-upon payments, your eligibility will be permanently lost until the debt is paid in full.

Grant overpayment debts are not eligible for either consolidation or rehabilitation.

Source: US Department of Education

Why You May Have to Repay Part of a Grant

admin — Fri, 22 Jan 2010 20:46:23 +0000

Unlike loans, grants do not usually have to be repaid. However, there are two reasons why you may have to repay part of a Federal grant:

1) The amount given to you was more than you were eligible to receive (this is called an over-award). This can happen if the school makes an error when calculating your eligibility for financial aid, or if an audit of your financial records reveals that some of the information you provided was incorrect (for example, your income was higher than what you reported on your application for financial aid).

2) You withdrew early from the program for which the grant was given to you.

Source: US Education Department

Consolidate Private Student Loans

admin — Thu, 18 Jun 2009 20:32:00 +0000

By Michael Wai W

Just to let you know, you are not the only graduate who has to deal with multiple private student loans. It is difficult to manage your financial condition with multiple loans on your back and other expenses to take care of. How can you remedy the situation? Have you ever thought of going to consolidate your private student loans?

When you are doing so, there are 3 things you need to look out for.

1. Loan consolidator

Unlike federal student loan consolidation, private loan consolidators charge various interest rates for your loans. The interest rate charged is according to the market rate. So, when the market rate is low, you can enjoy low interest rate. But when the market rate shoots up to the maximum cap, you will have to bear the burden.

And to get your business, different loan consolidators will offer different benefits when you consolidate your student loans with them. Some of them may offer higher interest rate but they might offer lucrative packages that can benefit you in the long run and vice versa. So, you have to look into your need before you talk to the loan consolidators.

Lastly, you have to be extra careful when you are applying for online private student loan consolidation. This is because there are a lot of agencies which claim to consolidate your loans are actually referring your loans to firms that really consolidate student loans. You can actually get better interest rate when you deal directly with the responsible firms.

2. Extra cost and penalties

When you are consolidating your private student loan, you will also want to be clear of the extra cost that is involve in your consolidated loan. Some loan consolidators might charge you for an application fee and some might charge you processing fee for credit history check.

And to let you know, many loan consolidators are withdrawing their pre-payment penalty (penalty that you need to pay when you settle your loan before the agreed loan period). So, be sure that you ask the loan consolidators about this and if they are unwilling to withdraw this for you, you can always look for another loan agency.

Although you can enjoy incentive with on-time payment, what if you are late with your monthly payment? How much penalties are they going to charge you? You have to be clear on every detail of your loan consolidation.

3. Promotions

And since the loan consolidators are competing for your business, it is common that they will run promotions once in a while to draw in new business. So, when you are talking to the loan agencies, remember to ask them about the promotions. It will be good to have some incentive to lighten your burden.

Sometime the loan agency will not inform you about the promotions. After all, they are affecting their profit when they run the promotions. So, you have to take the initiative and keep yourself update so that you can get on the boat before the expiry date.

To learn much more about student loan consolidation, visit StudentLoanConsolidationHowTo.blogspot.com where you will find this and much more including student loan consolidation comparison.

Article Source: EzineArticles.com

Bankruptcy and a Federal Student Loan

admin — Thu, 18 Jun 2009 20:30:15 +0000

By Richard Shelmerdine

If you are looking for information on bankruptcy and a federal student loan then you have come to the right place. You may feel that your federal student loan is making your financial life hell at the moment but it does not have to be like that. Bankruptcy is and should always be a last option. What will happen if you decide to go bankrupt though is not as bad once you think about it. It means that you will have a totally fresh slate financially. Although you may be marked by a few financial organizations for a couple of years and will struggle to get money from banks lent to you.

Firstly the main thing that you need here is communication with your federal student loan company. If you do not talk to the they will not know what you want and lots of people do this. Do not be one of them and you will find a way through this difficult financial time. Talk to them and mention your financial woes and that you may even consider bankruptcy. Because they will definitely get no money if you go bankrupt because you start over again they will let you pay at a highly discounted rate just so they get something from you. Sad but true.

Then when you have completed this stage you might want to look into something like debt consolidation. This is where you get all of your student loan and other debts that you are struggling to pay and you give them to a student loan debt consolidation organization and they pay it off for you and you pay one single monthly payment over time. The charge is surprisingly small too.

To learn how to pay of your student loan and get the great feeling of freedom that comes with paying off your student loan, Click here for Bankruptcy Federal Student Loan

Article Source: EzineArticles.com

Refinance Your Student Loans

admin — Tue, 09 Jun 2009 20:05:25 +0000

Article by: Sarah Russell

If you’ve recently graduated from college, you’ve probably been bombarded with mailings and advertisements urging you to refinance (or consolidate) your student loans right away. But wait, what is loan consolidation? And why should you do it?

If you’ve just graduated from college, you’ve probably got a number of different student loans, all in different amounts from different lenders at different interest rates. Loan consolidators (which can be private banks, lenders or government agencies) pay off all your individual loans in exchange for a single loan in the same amount issued to you. So now instead of all those different loans, you’ve got one loan that you repay to the consolidator.

Refinancing your student loans reduces your monthly payments and locks in a fixed interest rate. In most cases, student loans have variable interest rates set a few points below prime. As interest rates go up, so will the interest rate on your loans. When you refinance your loans, you lock in an interest rate based on the current market conditions that will be set for the life of your loan. Therefore, it’s important to evaluate the market before making the decision to consolidate. Right now, interest rates are low, but they’re going up and most economists predict that they’ll continue to go up for awhile. So for many people, this is a good time to refinance.

Your credit history will also determine your eligibility for loan consolidation programs. Loan consolidators can be picky in who they accept for their programs, so the option to refinance is usually only available to individuals who have established good credit by paying their loans back on time. If you’ve missed payments or made payments consistently late, you may not be offered the best terms, if you’re accepted at all. If your application is denied the first time, call the consolidator and talk to a loan officer about the reason for your rejection. The officer may offer you advice on how to qualify for their program at a later date.

If you decide to refinance, be sure to consolidate federal loans and private loans separately from each other. When you consolidate your loans, you’re typically offered a rate that’s 1-2% lower than the average rate of your loans. Federal student loans often carry much lower interest rates than private loans, so consolidating them together can bring up the average interest rate of your loans and leave you with a higher fixed rate locked in. If you only have one private loan, it may not make a difference, but it’s important to assess your options before committing to refinance.

Is there anyone who shouldn’t consolidate? Let’s look at a scenario. Tracy has 2 loans for $5,000 each that are scheduled to be paid off within 5 years. She can afford to make her monthly payments but wants to see if she can save a little extra cash each month by consolidating. She finds out that she can refinance the loans into a $10,000 consolidation loan to lower her monthly payments and she’ll be eligible to extend her payments over 8 years. But because she’s extended the life of her loans, she’ll be paying interest over a longer period of time and may wind up paying more overall than if she had kept her loans as they were.

It is tempting to pay less per month but if you can afford to pay off your loans in a shorter period of time, then you’ll likely save money on interest in the long run. Obviously every situation is different and you won’t find all your answers in a short article like this. But if you think loan consolidation might be right for you, check out the Student Loan Network’s site at Studentloanconsolidator.com for more information or speak with a loan officer or financial planner to see what your options are.

About The Author

This article was published by Sarah Russell on Smart Young Money – a collection of money management resources for teens and young adults. For great information on using credit, managing debt and more for young people, visit http://www.smartyoungmoney.com.

Student Loan Cancellation & Discharge

admin — Sun, 10 May 2009 01:10:06 +0000

All loans received under programs authorized by Title IV, of the Higher Education Act can be canceled for several different circumstances including: (1) in the event of your death; or (2) if you become totally and permanently disabled after the loan is disbursed.

In addition, some loan types may qualify for loan discharge under a variety of conditions. Some of the most common cancellation provisions are listed for you below:

* the school you attended improperly certified your ability to benefit from the training given.
* the school you attended closed while you were in attendance or within 90 days after you withdrew from the school.
* A National Defense Student Loan can be canceled in 2 additional circumstances: (1) full-time teaching and (2) military service.
* Finally, your obligation to repay your loan may be discharged in bankruptcy.

Source: U.S. Department of Education

Federal education loans that are eligible for consolidation into a Direct Consolidation Loan

admin — Wed, 29 Apr 2009 17:30:14 +0000

The following federal education loans are eligible for consolidation into a Direct Consolidation Loan:

Direct Subsidized and Unsubsidized Loans
Federal Subsidized and Unsubsidized Stafford Loans
Direct PLUS Loans and Federal PLUS Loans
Direct Consolidation Loans and Federal Consolidation Loans
Guaranteed Student Loans
Federal Insured Student Loans
Supplemental Loans for Students
Auxiliary Loans to Assist Students
Federal Perkins Loans
National Direct Student Loans
National Defense Student Loans
Health Education Assistance Loans
Health Professions Student Loans
Loans for Disadvantaged Students
Nursing Student Loans

Your student loan may be discharged (forgiven) if you become totally and permanently disabled

admin — Tue, 28 Apr 2009 16:33:33 +0000

* Your student loan may be discharged (forgiven) if you become totally and permanently disabled. If a physician (doctor of medicine or osteopathy) certified that you are totally and permanently disabled and you meet other requirements during a 3 year conditional discharge period your loan(s) may be discharged. It is important to note that: You may receive Social Security, VA or other disability benefits and still not meet the definition of total and permanent disability that applies to student loan discharges.

* You do not qualify for discharge if the medical condition or impairment existed at the time you applied for the loan, unless after that time, the condition significantly deteriorated and then you became totally and permanently disabled. In other words, an individual who was already totally and permanently disabled when he or she applied for a loan cannot have that loan discharged for that condition.

Note that PLUS loans obtained by a parent on behalf of a student are not dischargeable on the basis of the student’s disability.

What to Do:

If you believe you qualify for a disability discharge, you and your doctor must complete, and sign, a discharge application form. You can request this form from the party that holds your loan, or you can download it now. Check a recent demand letter or bill for this loan; if the address to which you are requested to send payment is the National Payment Center in Greenville, TX, you should submit your completed form to:

U.S. Department of Education
P.O. Box 5609
Greenville, Texas 75403-5609

You may request a copy of the discharge application form by calling 1-800-621-3115. Note: in order to guard against fraud, the U.S. Department of Education (Department) will contact your doctor directly to confirm the nature and severity of your disability if you apply for a disability discharge.

Source: U.S. Department of Education

What is Federal Pell Grant?

admin — Thu, 23 Apr 2009 15:52:23 +0000

A Federal Pell Grant, unlike a loan, does not have to be repaid. Pell Grants are awarded usually only to undergraduate students who have not earned a bachelor’s or a professional degree. (In some cases, however, a student enrolled in a post-baccalaureate teacher certification program might receive a Pell Grant.) Pell Grants are considered a foundation of federal financial aid, to which aid from other federal and nonfederal sources might be added.

How much can I get?

The maximum Pell Grant award for the 2008-09 award year (July 1, 2008 to June 30, 2009) is $4,731. For the 2009-10 award year (July 1, 2009 to June 30, 2010), the maximum award is $5,350. The maximum amount can change each award year and depends on program funding. The amount you get, though, will depend not only on your financial need, but also on your costs to attend school, your status as a full-time or part-time student, and your plans to attend school for a full academic year or less.

If I am eligible, how will I get the Pell Grant money?

Your school can apply Pell Grant funds to your school costs, pay you directly (usually by check), or combine these methods. The school must tell you in writing how much your award will be and how and when you’ll be paid. Schools must disburse funds at least once per term (semester, trimester, or quarter). Schools that do not use semesters, trimesters, or quarters must disburse funds at least twice per academic year.

What are Health Professions Loans?

admin — Wed, 22 Apr 2009 18:30:31 +0000

Loan programs authorized by the Public Health Services Act and administered by the U.S. Department of Health and Human Services (HHS) rather than the U.S. Department of Education. Although health professions loans can be included in consolidation loans, borrowers should be aware of the advantages and disadvantages of consolidating these loan types because of the differences between the programs.

HHS loans include:

Health Professions Student Loans (HPSL)
Loans for Disadvantaged Students (LDS)
Health Education Assistance Loans (HEAL)
Nursing Student Loans (NSL)

Source: U.S. Department of Education