Monday, 27 August 2012

Student Loans Different Collections Rules

Student loans are a different kind of debt. These loans are unsecured, which means they were given out on good faith that they will be paid back. When applying for school loans, the borrower is essentially asking for money in order to pursue their higher education with the promise that once finished with school, and after a set number of months to find a job, payments will begin. Most people who are looking for a way into into colleges and universities are not thinking about all the difficulties or possible causes for this type of loan to be a hardship. Student loan debt is something that will never go away on its own. Only in rare circumstances will a student loan be forgiven, even bankruptcy will not bring relief to this debt.
Why are student loans so different?
For starters, the funding behind your loan is from the government. These loans are not affiliated with any bank and therefore are not subject to the same collections rules. There are similar ways in which each can go about collecting the money owed, but the Department of Education, which funds these loans, have an unlimited amount of time to collect.
Regular bank loans and credit card debt have a statute of limitations. Depending on the state you live, these creditors will have a certain amount of time to try to get their money back. This time period is usually 7 years, but some states differ. Once the time limit is up, there can be no more attempts to collect the money. Student loans do not have a statute of limitations. In other words, the Department of Education can continue to attempt to collect on your loan until it is paid off.
The creditor will usually make attempts to collect on unpaid loans for a few months and then use an outside collections agency to continue the process. Some companies will have their own inside collections departments who will try for a longer period of time before it processes out to a third party. The Department of Education does not always use third party collections, but when they do, the outsourced party earns more money per dollar collected from these loans and have been known to be more assertive with their collection attempts. No matter what creditor is behind your debt, the collections agencies are governed by the same Fair Debt Collections practices Act. This guidance protects consumers' rights. No one may threaten, mislead, or harass as a means to collect debt. If you ask them to stop calling your work, they must comply. Collectors are not allowed to deliberately embarrass as a collections practice. Know your rights when it comes to third party collections. Report agencies who are not following proper procedures.
Creditors do have the right to take you to court to get a judgement which would allow them to place a lien on property, garnish your wages, or freeze your bank accounts.
Filing for bankruptcy will help a person find relief with debt... but not with student loan debt. Only under rare conditions, for example, being totally and permanently disabled would a student loan be excused.
In addition to other collections practices, the Department of Education can take money from your tax return, Social Security payments or garnish your wages to begin collecting on your debt. Since there is no statute of limitations procedures will continue to happen until your debt is paid in full.
You can dispute your student loan obligation. The Department of Education has extremely limited legitimate reasons to comply with your request. You may dispute your obligation by proving extreme hardship, theft of identity, promissory note was not signed, or if the debt was all ready settled in another way. There are also rare instances that could also allow you to be forgiven.
To dispute the loan amount or to claim financial hardship there will be legal work involved. Hiring a collection attorney to work with your student loan debt will be the best possible avenue to assist you under these circumstances.

Student Loan Forgiveness For Teachers - How Does It Work

Its common knowledge and an agreed sentiment among many American citizens that the hard working teachers of our country are underpaid for the vital role they play in educating this nations' youth. However getting the education needed to become a teacher is not cheap and requires many aspiring teachers to take out student loans.
Thankfully there are options put in place that teachers can take advantage of to get relief of these student loans. There is a lot of mystery surrounding how student loan forgiveness and student loan consolidation programs work and how they can help financially struggling teachers. Currently the government is offering assistance with these programs from the Department of Education. In this article I will explain how the three student loan relief programs work and how teachers can best take advantage of it.
Student Loan Consolidation: Right now if you have federally backed student loans you more than likely qualify for a consolidation. The benefits of consolidation are one monthly payment and lower interest. The vast majority of teachers who have federally backed loans will qualify and in most cases will be able to save a considerable amount of money each month on what they are currently paying.
Income Based Repayment: The IBR plan is another consolidation program for people who are struggling financially. The same benefits as a standard consolidation apply with the exception that your monthly payments are based on two factors, your income/budget and number of dependants. Depending on how bad your current financial situation is you may qualify to pay $0 per month and still stay in good graces with your lender. Each year there is an income review and your payments can be adjusted either up or down depending on where you are with your income.
Student Loan Forgiveness: For people working in the public service field, which teachers do, there is a student loan forgiveness program. Once you qualify for this program you will only have to make 120 more payments (10 years) and then the remainder of your loan is forgiven; this saves years off of most people's current payment plan. Also keep in mind the forgiveness plan can be combined with the income based plan.
So for a struggling teacher getting on the IBR plan combined with the forgiveness plan will be very helpful; you may qualify to pay $0 or very little per month and if you remain a teacher than in ten years your loans are forgiven. The one caveat to the forgiveness plan is that you must remain employed in the public service field for the entirety of the plan, so if you think you are going to stop teaching before than this may not be for you.
Common Misconception: When people hear the word forgiveness they assume that means their loans will be completely written off and they will have to pay nothing. Unfortunately that is not the case, as beneficial as all of the above mentioned programs are they are not a forgiveness in the sense where people pay nothing (unless you qualify for the IBR).
Possible Problems: For some reason the government makes getting these consolidation and forgiveness plans an extremely hard task. The majority of people cannot figure out the how to correctly get this loan underwritten to receive the maximum benefits possible. And the loan could take up to 90 days to process so if anything is done wrong you either have to do it over again or will get a loan that may not be best suited for you.
Solution: Thankfully there are companies that can be of assistance in helping make sure teachers get approved for the best consolidation or forgiveness program available. Typically these companies charge a nominal fee for the in-depth underwriting process that must take place to ensure approval goes through. It is highly recommended to use such a company and avoid complication while ensuring you are getting the maximum benefits possible. These programs were designed with the teacher's best interest in mind so if you find yourself struggling than take advantage of the options that you have.

Student Loan For Teachers

Every year Texas Education Agency (TEA) transmits a record of areas where the teachers are lacking especially on areas, which has low - income collages to the U.S. Department of Education (U.S.D.E). Instructors with certain types of student education loans may be eligible for a partially bank financial loan forgiveness for teachers, deferment or termination advantages. Eligibility for these advantages depends upon the interest rate the teacher has, the date of his/her bank financial loan, and whether the teacher has assists in a specific low-income university or the teacher lack area in which he/she should work in. Designated low-income colleges are those with greater than 30% of signed up students from low-income family members in regions that are qualified for Headline I funds. The financially deprived position of an excellent does not ensure eligibility- please check to make sure your university is eligible
A teacher may apply for all the four programs if the balance of their unpaid federal student loans exceeds the forgiveness amount and if they meet the requirements. Moreover, Private loans are not eligible. For the teacher who fall under the Funding for 2011-2912 serving period this is an important notice, the State had a budget shortfall presented an extraordinary task for the 82 Texas Legislature, this resulted into the removal of the funding for many programs and other significance removal, the Teachers Education Loan Repayment Program, which is funded at approximately $ 11.5 million for the 2010-2011 biannual, this was funded at $ 1 million for the 2012-2013 biannual which represent 9% decrease in funding and only renewed applications will be allowed for the next remaining two years and enough funding will be provided to help in repaying to all the legible teachers submitting the renewal for applications. In addition, the information concerning the process and the priority of acceptance application for the renewals are to be posted on the website page of the Students Loan forgiveness for teachers.
The requirements for one to be legible for this loan include;
· One must not have had any outstanding balance on a Federal Family Education Loan Program (F.F.E.L.P) or Federal Direct Loan Program (F.D.L.P) loan as of October 1, 1998, or on the date, you obtained a F.F.E.L.P or F.D.L.P loan after October 1, 1998.
· One must have been employed as a full-time teacher for five complete, consecutive academic years at a qualifying location (effective for teacher loan forgiveness applications received on or after August 14, 2008) or a low-income eligible school. An eligible school is considered "low-income" according to certain criteria for funding under Title I of the Elementary and Secondary Education Act and is listed in the Annual Directory of Designated Low-Income Schools for Teacher Cancellation Benefits. At least 30 percent of an eligible school's enrolled students must qualify for services provided under Title. If the school where you performed your teaching service meets the criteria of an eligible school for any year of your employment, that year and all subsequent years of service at that school continue to qualify you for forgiveness - even if the school is no longer eligible. However, if the school where you performed your teaching service meets the eligibility criteria of an eligible school after you have started your service, you
In addition to meeting the general eligibility requirements for teachers loan forgiveness, you must also obtain certification from your school's chief administrative officer (usually your principal, assistant principal, or district superintendent) or the chief administrative officer of your educational service agency (effective for teacher loan forgiveness applications received on or after August 14, 2008) that you meet the requirements outlined in one of the charts below. Each chart provides the maximum amount of loan forgiveness for which borrowers meeting each set of requirements are eligible.

Student Education Loan Average College Debt Is $24,000

Without addressing average college debt from the student education loan, President Obama recently declared that America remains the country to beat. "We are home to the world's best colleges and universities... where more students come to study than any other place on Earth." I tend to believe the President on that statement.
Later in the speech he told us that "America has fallen to ninth in the proportion of young people with a college degree."
I can't help but wonder -- is that necessarily such a bad thing?
Can I Get A Job To Pay My Student Education Loan?
What concerns most of us is jobs -- jobs that enable a college graduate to enter the workplace at an income level where he or she can make ends meet and manage student loan repayment without parental financial support or more government subsidies.
According to the report by The Project On Student Debt, for graduating students the average college debt is $24,000. After adding in the interest, the payback can escalate to over $31,000.
These days it's tough to find a job to cover basic overhead, and most young people don't factor in the cost of their student education loans until reality sets in. College tuition and fees have risen four times that of the median income since 1982. Graduates are not getting jobs and cannot pay off their college debt.
Teach Student Loan Finance
At 18 years old, most have no idea what field or career will fulfill them. High schools should teach student loan finance first, before these young adults take on the crushing burden of college debt for dreams of a future they cannot foresee.
According to Richard Arum and Josipa Roksa, authors of the new book, "Academically Adrift," 45% of students fail to show any improvement in critical thinking, complex reasoning, or written analysis after two years of college, dropping to 36% for seniors.
I believe it is not colleges that are failing 46 percent of the students, but rather, many of these failing students should not be there in the first place.
A senior college faculty member made the point that course expectations have declined for decades, leaving many college graduates unprepared for their future careers. Such emphasis is placed on college education in favor of the trades that inflated high school and college grades reward mediocre scholastic achievement.
Many young people who would have been more productive in a skilled trade that fulfills them are funneled through the higher academic system, but even top-tier doctors or lawyers may not be able to keep up the student loan repayment on their tab of $100,000 or more.
Student Education Loans -- Follow The Money
Current statistic show there are over 11 million enrolled in colleges and universities. Approximately 2/3 graduate with college debt.
If average student loan principle is $24,000, students must pay back college debt of $31,000.00, including the 36% of seniors who maybe should not have been there in the first place. That is approximately 1,980,000 students who have shown no progress in thinking, reasoning, or analytical skills yet have taken out student loans totaling about $47.5 billion U.S. dollars, PLUS an additional $13,860,000,000 in interest.
You read it right -- these students owe $13.8 billion in interest.
Who gets this $13.8 billion interest income? Who took over the student loan program? The federal government. The administration has a big incentive to get every young man, woman and their parents convinced they need to attend college and in debt themselves.
Reducing The Student Education Loan
Whether a young adult should attend college must be answered on a personal level. Here we seek the answer to lowering national average college debt.
One solution gaining in popularity is online classes. Usually some on-campus participation is required, while core lectures are provided by an instructor, online.
Returning students have been able to complete college educations through online degree programs. Younger students can reduce their housing and commuting expenses by taking classes at home on their computers, to avoid starting their career with a student education loan.
To download a FREE report, Unravelling The Maze Of Student Loans visit, where you can access hundreds of free articles on credit issues such as what to do when you have bill collectors calling, DIY loan modification success, business loans, home improvement loans, real estate mortgages and of course, student loan repayment.

Private Education Loan Consolidation - 3 Tips

Whether you attended a public or a private college or university, you probably owe tens of thousands of dollars or more in student loan debt. If you are like millions of other graduates, you chose to fund your education with private student loans.
Private student loans differ from federal loans in that the private loans are issued by private banks and other lending institutions. Private loans may be offered at variable or fixed rates and come with a range of possible repayment periods (terms) like 5, 10 or more years.
If you have multiple private loans, you may be interested in consolidating your loans into a single private consolidation loan.
Advantages To Loan Consolidation
The main benefit of consolidation is that it gives you the opportunity in most cases to reduce your monthly payment obligations. Being able to save money each month on student loans offers a huge benefit to graduates who hold a lot of debt. Most graduates - especially those in their 20s and early 30s - are busy trying to pay their monthly expenses while building a small nest egg. High loan payments but a serious damper on that goal.
Another benefit of consolidation is the opportunity to simplify one's financial life. Having to make multiple payments to different banks each month - which are due on different dates and in different amounts - is no piece of cake to manage.
Comparing Private And Federal Consolidation Options
Note that if your current student loans are federal loans, you should opt for federal consolidation. Otherwise, private consolidation is the way to go.
3 Tips For Private Education Loan Consolidation
If you are considering consolidation, here are 3 tips for you to consider:
1. Shop The Best Bank Rate: Just shaving a point or two off of your interest rate can save you a lot of money in your future consolidation loan payments. It is always worth it to spend a bit more time now shopping the rates from multiple lenders before settling upon one.
2. Check Each Company Out: Do research on each lender to make sure they are viable and represent a company you would want to do business with. For example, ask these questions: Do they have the ability to service your loans? Do they allow for easy online application? Are their repayment plans simple and easy to understand? Do they offer any benefits to borrowers who pay on time? Keep meticulous notes about each lender you evaluate.
3. Get The Payment Terms You Want: Before contacting lenders, make sure you know what your idea payment terms are. Remember: a longer term of, say 20 or 30 years means lower monthly payments now but much more paid over the life of the loan in interest costs. Tip: choose the shortest term possible while still leaving you with a monthly payment you can afford now.
Follow these 3 tips to a more successful loan consolidation.

National Student Loan Consolidation

While the national cost of a higher education continues to rise, federal support in the form of grants and scholarships remains the same. Most students find that they must take out several educational loans to cover the rising costs of a college education. After graduation, if the borrower cannot find a well-paying position or has other financial difficulties, repaying his educational credits can become a cumbersome and nearly impossible task. You're life doesn't have to consist of dodging creditor's phone calls and deciding which accounts should be paid this month while all other bills fall into default. Using a national student loan consolidation program will allow borrowers to gain control over their debt and take charge of their financial future.
Opportunities Provided by National Student Loan Consolidation Programs
National student loan consolidation programs can provide a plethora of repayment prospects and opens the door to several recompense options. Most borrowers utilize such programs to decrease their monthly payment; this is easily accomplished after one lender essentially buys a borrower's credits from their current lenders and merges these accounts into one loan. Under this new credit, a borrow will have options for nearly any loan aspect ranging from fixed or variable interest rates to various repayment plans. Repayment plans are the foundation on which a loan is repaid and include the following plans: standard, graduated, income sensitive, income based, and an extended repayment plan. These also provide loan repayment length options ranging from periods of 10 to 30 years and up.
Which Loans Qualify for these Programs?
For any educational credit to qualify for national student loan consolidation it must be either in the six month grace period following graduation or currently in repayment and in good standing with the existing lender. Not all loans can be combined and federal loans must be kept separate from private loans. It is possible to merge federal loans, but this must be done through the federal government; keep in mind that not all federal loans are eligible to be consolidated together into one federal loan. Typically, private educational loans may be consolidated into one lump sum regardless of which lender originated the credit.
Loans that usually qualify for national student loan consolidation include, but are not limited to:
1. Stafford Loans (including both subsidized or unsubsidized loans)
2. Federal Perkins Loans (PERK)
3. Federal Parent Loans for Undergraduate Students (PLUS)
4. Health Industry Loans including: Health Professions Student Loan (H.P.S.L), Health Education Assistance Loan (HEAL), and Nursing Student Loan (N.S.L)
5. Federal Supplemental Loans for Students (S.L.S), formerly known as Auxiliary Loans to Assist Students (ALAS) Loans
6. Federal Insured Student Loan (F.I.S.L)
Eligibility for Student Loan Consolidation
If a borrower has one or more of the above listed loans and can benefit from the consolidation process, there are a few factors that will determine his admissibility into a national student loan consolidation program; these include, but are not limited to:
1. The borrower must be a US citizen or a qualifying non-citizen
2. The borrower must have either graduated or enrolled less than half-time at an accredited institution - he cannot consolidate while still enrolled within the program for which he is borrowing
3. All the of the borrower's existing educational credit must be in good standing with the current lender
Utilizing a national student loan consolidation program allows the borrower to more accurately regulate his finances while in educational credit repayment. Any use of this program is typically beneficial to the borrower and will result in an increased credit rating and positive relationship with financial lenders.

How To Choose Student Loans

When you choose the "correct" Student Loans Lenders, you certainly can lower your monthly loan payment by up to 60%. Then, how to choose the right lenders for students?
We should consider interest rates, loan amount, loan terms, payment fees for each term, easy approval and good service. By consolidating loans, we can save a lot of money.
1. Interest Rates
Of course, we should choose the lowest interest rates for student. Compare more loans companies to find out which one provide the lowest interest rate for students. At the same time, we should notice interest rates may change. Education Loan Interest Rates on Federal education loans change on July 1, and are based on the 91-day rate from the last Treasury auction in May and the average one-year constant maturity Treasury yield (CMT) for the last calendar week ending on or before June 26th.
2. Loan Amount
The total loan amount is a key factor in choosing the loans companies for students who want to apply a loan with large amount. If you want to borrow much, you need spend more time to find those lending companies who are willing to lend much money. You can borrow up to the total cost of your education. Students borrowing a Federal Direct Student Loan, including subsidized and/or unsubsidized, are subject to maximum allowable loan limits. It depends on which grade, freshman, sophomore, junior or senior, and graduate student. For example, one dependent freshman student can borrow $5,500, while one independent freshman student can borrow $9,500.
3. Loan Terms
Some loans companies can take up to 15 years to repay, with a 6-month grace period, plus any periods of deferment or forbearance. You can choose lending companies which allow you pay interest while in school and there's never a penalty for paying early or prepaying. Sometimes, you earn a lot of money, you may need revision of loan terms so that to reduce your payment.
4.Payment Fees for Each Term
We should choose the proper payment fees for each term. If you only need to borrow a little amount of money and you have the ability to pay off in short term, you can choose large payment fee for each term. Most of important, we should choose those lenders who can reduce our monthly loan payments.
5.Easy Approval and Good Service
In the same conditions mentioned above, we should choose those loans lenders which support applying online, instant approval, minimum forms and quick decision. Their online application should be easy to fill out and they can let you know almost immediately if you are eligible for student loan consolidation. Some lenders can even answer in less than one hour. After approval, they should have convenient online account management and exceptional customer service through dedicated and highly-trained experts.