“When kids do graduate, the most daunting challenge can be the cost of college. At a time when Americans owe more in tuition debt than credit card debt, this Congress needs to stop the interest rates on student loans from doubling in July. Extend the tuition tax credit we started that saves middle-class families thousands of dollars. And give more young people the chance to earn their way through college by doubling the number of work-study jobs in the next five years.
Of course, it’s not enough for us to increase student aid. We can’t just keep subsidizing skyrocketing tuition; we’ll run out of money. States also need to do their part, by making higher education a higher priority in their budgets. And colleges and universities have to do their part by working to keep costs down. Recently, I spoke with a group of college presidents who’ve done just that. Some schools re-design courses to help students finish more quickly. Some use better technology. The point is, it’s possible. So let me put colleges and universities on notice: If you can’t stop tuition from going up, the funding you get from taxpayers will go down. Higher education can’t be a luxury – it’s an economic imperative that every family in America should be able to afford.”

What does this mean to those families with students heading to college for the 2012-13 academic year for the first time or those returning college students?

For Undergraduate students, the Federal Direct Subsidized Student Loan fixed interest rate is currently at 3.4% and the interest rate is scheduled to increase to 6.8% on July 1, 2012. Also, the current Federal Direct Unsubsidized Student Loan fixed interest rate is currently at 6.8% and it is scheduled to remain the same.

Increasing the number of college jobs in the Federal Work-Study program over the next five years is a step in the right direction. However, the work-study program has limited positions available per college, students have to be eligible and “hired” for the job. Also, typically students are paid every two weeks for hours worked throughout the academic year. More importantly, unlike grant/scholarship aid awards, being awarded a work-study job does not immediately impact the bottom line cost of the respective college.

Certainly tuition tax credits benefit those taxpayers that qualify but the most important piece of the discussion is the ever increasing tuition costs. College and Universities have significantly raised tuition and fees over the past twenty years, so families need to be more focused on the actual costs of college over the next four years. Focused discussions on the college major, career aspirations, borrowing loans to pay for college and the actual return on the investment are important to students and families striving to make college affordable.

All of your favorite eastern colleges and universities are included in the On Numbers analysis and for more details go to the recent Business Journals article by G. Scott Thomas.

FFELP – Federal Family Education Loan Program which allowed many banks and other private lending institutions to provide the Federal Student and Parent Loans.

FDLP-Federal Direct Loan Program allows the Federal Government to provide the Federal Student and Parent Loans.

ALL new borrowers after July 1, 2010, borrow directly from the Federal Government under the FDLP. Banks and other private lending institutions no longer provide the “guaranteed” Federal Student and Parent loans.

What this means to borrowers entering repayment of their student loans is at the very least, the borrower must know what type of loan(s) they have and under which program they borrowed.

Borrowers can find their Federal Loan information summary at www.nslds.ed.gov.

Once borrowers know their respective Federal Loan information, they should investigate possible deferment or forbearance options and most importantly must select a repayment option. There are a number of different federal student/parent loan repayment options available and the borrower should select the most cost-effective solution.

Within the repayment options are Loan Forgiveness programs which can be realized for certain select occupations, volunteer activities and military employment. These Loan Forgiveness programs have specific eligibility criteria and defined time lines that must be completed to receive some portions or in some cases all of the respective Federal Loans to be forgiven.

The complexity and flexibility of the Federal Student Loan Repayment programs is at a minimum confusing to borrowers and to many borrowers overwhelming when you factor in the current economic situation and the fact that student loan debt has now exceeded credit card debt in America! Let College Financing group’s team of experts guide you and devise the best repayment option for you and your budget.

In the evening, College Financing Group will join hundreds of College Admissions representatives for the Southern Westchester College Fair at the Westchester County Center. This event is for high school students and parents to get information and ask questions regarding financial aid and the admissions process.

Also, in a related online article by NASFAA (National Association of Student Financial Aid Administrators), NASFAA President Justin Draeger said in a statement, “Issues such as unemployment rates and family income can’t be controlled by colleges. However, colleges and universities embrace the concept that they can have a positive impact on student loan repayment rates by helping struggling students succeed academically; helping them set realistic expectations in terms of salary and work goals; and by counseling them on smart borrowing, repayment options and avoiding default.”

Draeger noted that financial aid offices are currently struggling with record workloads and a host of new and challenging regulatory requirements that can leave fewer resources for critical one-on-one counseling.

The experts at College Financing Group provide the critical one on one loan counseling and specialize in guiding student borrowers as well as devising the best repayment plan option for the borrower and their budget. For more information and details about these services, please view our Student Loan Repayment Solutions page.