Student Loans

“I just completed grad school a few months ago. I have consolidated my student loans from both my undergrad and grad school. The time has come to start repayment on my student loans. However I’m going to have trouble with my repayment even with the consolidation. I am contemplating either deferment or forbearance. How many times can you defer your student loans?”

You’ve recently completed graduation and may have already completed your loan exit counseling. Your student loan repayment will start immediately or in about 6 months depending on the type and terms of your loan. Finding a job immediately after school might not be a luxury that all people will have and soon the reality of making your loan payments will start to hurt.

It is often at this juncture that students will think of consolidating and or look at loan deferment as an option to buy themselves a lower rate of interest and monthly payment or as in the case of loan deferment, some additional time.

Loan deferment is a process where the lender and you agree to hold off payments for a fixed period of time thereby giving you the additional opportunity for sorting out your finances. Lender’s will always be willing to work with you to avoid delinquency, the lender in this case since it is a federal student loan, is the U.S Government.

Typically you have close to 36 months where you can defer your federal student loan. This deferment period can be taken in either 6 months or 12 months increments. So if you should choose to go the 6 month route, you will be able to defer your loan 6 times, each time for a period of 6 months.

In the case of private loans, the term and the number of times is usually specific to a particular lender and contacting them is your best option.

What are food stamps?

Food stamps allow people to buy food in groceries and stores. It is like using a credit card or a debit card. It is a federal programme which works throughout the United States.

Can a college student be eligible for food stamps?

Yes, students between the ages of 18 to 49 are eligible to receive food stamps and you have to prove that you are:

• Having a 20 hours week with the least minimum wage
• Working under a state or federally funded study-work program for the period of the school year
• Provide evidence to show that you are disabled
• Taking care of people in your household who are under the age of 6 years or unable to take care of themselves
• Taking care of children between the ages of 6 to 11 years, where sufficient child welfare is not available
• A single parent and a full-time student taking care of a child under the age of 12
• Receiving benefits pertaining to Family Assistance (FA)
• Attending school under the act called Jobs Training Partnership Act (JTPA).

Will financial aid be considered income for food stamps?

Any federal financial aid received by a student will not be counted as income.

Will Food Stamps Affect My Financial Aid?

Food stamps do not affect your eligibility for financial aid and, also getting financial aid will not affect your eligibility for food stamps. In fact, food stamps help one for becoming eligible for federal grants. On the FAFSA, there is a spot that will enquire if you are receiving any food stamps. When you check the box for food stamps, you pretty much get done with most of your FAFSA questions.

Is Private Loan Considered Income For Food Stamps?

Personal loans not considered as income. They are not even considered as income when you file your FAFSA or your taxes. Therefore, private loans will not be considered as income when you apply for food stamps. You do not even need to report the same to your financial aid office as it is not income.

Does Going To School Affect Food Stamps?

No, going to school will not affect eligibility for food stamps. As a matter of fact, financial aid is intended to facilitate the covering of student expenditures such as travel and living costs. Therefore, going to school should not be related to food stamp eligibility.

For more details on food stamps, visit – http://ssa.gov/pubs/10101.html#food

We get several questions around studying in Canada and particularly around the financial aid system in Canada and the availability of scholarships and grants for students studying in Canada.  Generally most questions center around showing proof of funds to support oneself while studying in Canada, what are the options to work while studying in Canada, how to cover tuition costs and living costs while studying and working part time in Canada and finally the chances, procedure to apply for a student loan to cover tuition and other student expenses while in Canada and what are the immigration requirements as far as funding, tuition, student loans etc.

Studying in Canada is increasingly becoming popular with a large number of students applying to universities in Canada to do their graduation or post graduation courses. What is attractive is the relative cost of education when compared to the Unites States, the quality of education and the value and recognition that a degree from a Candaian University holds. Apart from these reasons you also have financial help and scholarships that are available to students considering studying in Canada. Below are some of the scholarship, financial aid options you should look into to help you out financially during your courses.

Financial help in Canada is available. As with everything it requires you to do your research and plan well in advance to apply for financial aid.

What is Student Loan Consolidation?

Student loan consolidation is a process where you take your existing student loans and combine them into one single loan, a master loan if you want to call it and in the process significantly reducing your monthly loan payments. There are wide variations on how much you can save by consolidating your loans and is completely dependent on each individual’s situation, students loans, rate of interest of the loans, variable or fixed student loans and so on.

Student Loan Consolidation Types

There are basically two types of student loan consolidation programs. One offered by the government or Federal Student Loan Consolidations program and the other offered by private financial institutions such as banks called as Private Student Loan Consolidation.

Why Consolidate My Student Loans?

Student loan consolidation offers tremendous benefits to a borrower. Imagine by consolidating your loans you can reduce your monthly payments up to 50% in some cases. You have the opportunity to significantly reduce your monthly payment outflow and reduce your overall interest payments on your loan. Apart from reducing your payments, consolidating your loans will also reduce and simplify your payments. Imagine have to deal with one lender rather than a bunch of lenders.

Can I Consolidate Student Loans taken by two different people?

A very common questions asking if one person can combine or consolidate their student loan with their wife or husband. Unfortunately you now can no longer consolidate yours and your spouses student loans anymore. There are many reasons but the main four reasons why it is impractical to for spousal student loan consolidation is Divorce, Death, Disability and Deferment.

There used to be a time when married couples could consolidate their individual student loans. However that is no longer possible. I believe since 2006, this provision has been withdrawn and you no longer can consolidate your student loans with your spouse. Why? Well, should you consolidate your student loan with your spouse then both of you are now responsible for the loan amount and in the event of the marriage dissolving it becomes difficult for the loan to be split.

With this in mind, federal consolidation of spousal student loans is no longer an option. We get many questions asking if consolidating his or her loan with their wife or husband is possible. Below are a sampling of these questions

• “My wife and I are due to graduate from college very shortly, will we be able to consolidate our student loans into one loan or will we have to each consolidate individually?”
• “Can both me and my spouse consolidate our loans to one single loan?”
• “How can I get the best rates? I plan to consolidate all my loans with my wife”
• “Can you tell me the best consolidation company where me and my husband can consolidate our student loans?”
  

First of all, I’m assuming that you are receiving statements from one or more loan companies every month. If not, you must at least be receiving a statement from one (or several companies) in January of each year – that’s when they send you a summary. The first thing you’ll need to do is find all of these statements and look them over.

Many of the actual lenders may not be contacting you directly, because it’s very common for lenders to use another type of company, called a “loan servicing agency” to help them stay in touch with you. The largest loan servicing agency, and one that you’re almost certainly dealing with is a company called “Sallie Mae”. Check and see if you have correspondence from Sallie Mae.

When you have found as many of the statements as you can, you can call the customer service number on your statements for more information, particularly about your loan balances.

You should also have copies of the “Promissory Notes” that you signed every time you agreed to a new loan. The lenders are required to send you a copy, and you should have kept these in a very safe place, because these are the legal contracts that you signed – the terms of the loan(s). Each promissory note will tell you how much the loan is for, and they’ll also tell you how much you will eventually have to pay back on each loan.

As for consolidation – this is a very complicated lending question that I would REALLY REALLY REALLY recommend that you discuss with a knowledgeable financial advisor. Your mom and dad are fine if they know a lot about loans and interest rates and repayment schedules and things like that, but if they’re also a little intimidated by loans, you should make an appointment to speak to a family friend, or an accountant, or a loan officer at your bank.

Consolidation loans are promoted with the “pitch” that they make your life easy by allowing you to take a bunch of loans from different lenders and gather them all together into a single loan with just one lender and one payment. They are also “sold” with the suggestion that consolidation can save you a lot of money by lowering your monthly payment.

Whether a consolidation loan is right for you depends on a lot of factors that the consolidation lenders don’t always tell you about in their ads and emails. You asked me to keep this simple, so I won’t go into a lot of detail about what those factors are.

Just keep a few things in mind:

Consolidation loans do not cut your monthly payments because they are “nicer” loans. Consolidation loans cut your monthly payments because you will make many, many more payments over a longer period of time.

Suppose you owed me $100 and promised to pay me back $50 a week this week and $50 a week next week. Your car broke down and you had some other bills due, and you come back to me and say that you can’t pay me the $50 this week – is there any way we can make another arrangement?

“Oh, absolutely.” I say. “Let’s do this. Instead of paying me $50 the next two weeks, you can pay me $10 a week for the next 15 weeks.” You think “Wow, only $10 a week. That’s much better than $50. I can afford that!”.

But look what’s happening – I’m not just being ‘nice’. You’re only going to pay me $10 a week now, but you’ll be paying me $10 a week for the next 15 weeks. What’s that mean? It means you’ll be paying me back $150, not the $100 that you originally owed me. I did you a “favor” by letting you pay me less, but we stretched it out over more weeks, and you wound up paying me a lot more for the “privilege”.

That’s how a consolidation loan works – your payments will go down, but you’ll pay the loan for a lot longer and you’ll almost certainly wind up paying a lot more in the end.

That’s why I say – make sure you understand just how much it’s going to cost you to make lower payments for a longer time. Then decide if the consolidation loan is worth it for you.

It might be, but it might not.

Good luck!

In general, you can’t simply “get rid of” your student loans. Repaying your student loans will continue to be your responsibility and there are no easy answers for anyone looking to shake off this burden.

It isn’t exactly possible to “negotiate” a lower payoff, but it is possible to arrange an alternative payment plan — some of these plans require very minimal payments for your first few years of repayment. Among the plans to ask your lender about: interest-only repayment; graduated repayment; income sensitive/contingent repayment, extended repayment, etc.

Federal Loan Consolidation is often the fastest way to lower your monthly payment and, sometimes, even your overall costs. It’s a good option for borrowers looking to extend their repayment term which, in turn, lowers the monthly payments, often significantly.

Will filing for bankruptcy get rid of my student loans?

Federal Stafford Loans cannot be forgiven, even if the borrower files for bankruptcy. Perkins Loans can sometimes be forgiven/cancelled/discharged when the borrower has filed for bankruptcy. However, I DO NOT recommend filing for bankruptcy on the off-chance that your Perkins might be discharged. It generally does more harm than good.

The only legal way to get rid of your student loans is through a Loan Forgiveness program. If you work for 5 years as a teacher in a low-income or subject-shortage area, all of your Perkins Loans and some of your Stafford Loans can be forgiven. Teaching is pretty much the only way to have your Stafford loans forgiven, but if you have Perkins Loans, there may be other careers such as law enforcement, corrections officers, those in the HeadStart program, early intervention service providers, PeaceCorps and ACTION volunteers, nurses, military personnel etc. can all have their Perkins Loans forgiven in part or in full. We’ve explained this a bit more in our article on how to get rid of student loans legally.