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The www.FedPrimeRate.com Personal Finance Blog and Magazine

Saturday, May 13, 2006

It's Déjà Vu All Over Again: Student Loan Consolidation Rates Are Set To Increase On July 1, 2006

The good folks @ NextStudent.com (NextStudent.com offers no cost student loan consolidation) issued a press release yesterday to remind everyone that student loan consolidation rates are going to rise on July 1, 2006. July 1ST is almost here, so if you plan on consolidating, now's a good time to do it!

Here's a snippet from yesterday's press release:

"It is a good idea for students and graduate students to consolidate their student loans before July 1, 2006, when interest rates are set to increase, according to NextStudent, the Phoenix-based premier education funding company. With little more than seven weeks remaining until the deadline, students are running out of time before the federal student loan program will be impacted by changes in rules and regulations.

The federal student loan program took some major hits with the passing Feb.8 of the Deficit Reduction Act of 2005, S. 1932. Although programs including Medicare and Medicaid were reduced, the federal student loan program was hit hardest with approximately $12.7 billion in cuts.

If students do not consolidate they likely will end up spending thousands more in total repayment on their student loans. That coupled with the higher cost of college and the decrease in federal student loan programs, students are finding it is more difficult to receive a college education.

Federal student loan consolidation can help. Consolidation collects all of a student’s loans, such as Stafford and PLUS loans, and packages them into one, allowing for one easy monthly payment. In addition, through consolidation the interest rate is locked in for the loan’s lifetime. For the long term, students can save upwards of 60 percent, which adds up to thousands.

NextStudent offers in-school borrowers a 4.75 percent interest rate. Eligible borrowers can receive an interest rate of 2.75 with applied benefits. This rate’s incentives include the .60 percent savings for those students who consolidate after graduation, an Auto Debit incentive equal to a .25 percent reduction, and a 1 percent additional decrease after the first 36 consecutive on-time payments.

Students can help themselves and save money that can be used for other daily expenses when they consolidate before the expected July 1 deadline. With student loan consolidation poised for major changes and interest rate hikes, it is important to consolidate while there still is time.

About NextStudent

NextStudent, student loan consolidation programs, and college savings plans.

The NextStudent Scholarship Search Engine, one of the nation’s oldest and largest scholarship search engines, is updated daily, available free of charge, completely private – and represents 2.4 million scholarships worth $3.4 billion.

For more information about NextStudent and its student loan programs, please visit the company’s Web site at http://www.nextstudent.com/."

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Thursday, May 11, 2006

Is Your Home Insurance Policy Disaster-Ready?

With the hurricane / tornado / fire seasons almost upon us, you may have asked yourself, "is my home insurance policy disaster-ready?"

The good folks at Answer Financial have just released a set of tips that you'll probably find useful. For more, here's a snippet from today's press release:

"Answer Financial alerts homeowners that time is running out to get insurance policies disaster-ready, with tornado season in full swing in the Midwest, and hurricanes getting ready to roar along the coasts. Although property values are up, home insurance coverage is down. Ironically, 80 percent of homeowners do not have enough coverage to withstand a potential disaster, cautions Answer Financial CEO Alan Snyder. This year, homeowners should get educated and take a second look at their insurance plans.

Answer Financial, the nation's leading independent insurance agency, offers these top five tips to ensure homeowners are ready for disaster:

  • Be sure to have adequate coverage for your home. With property values significantly up across the country, make sure your home's replacement value has been updated on your policy since the time of purchase. Particularly with significant structural home-improvement changes, you must notify your insurer to update the home's value. Because insurance policies cover a home's replacement cost rather than its market value, consumers also should not confuse purchase price or assessed value with rebuilding costs.

  • Annually review the replacement value of your home's contents. For many families, a home is their largest investment and most valuable asset. In actuality, the home's contents are usually more difficult to replace. Items like jewelry, art, antiques, furs and other valuables require a separate rider
    for insurance. Homeowners can visit AnswerCenter.com to find out exactly what 'replacement value' means and how much coverage is necessary. Because homeowners' insurance needs are not static, ignoring your coverage limits will present a problem when disaster strikes. Aside from contents, also
    take into account the cost of remodeling, new construction or upgrades to fixtures, appliances or furnishings.

  • Plan accordingly for a separate policy. Certain risks may not be covered by standard homeowners insurance. The more common types of disaster, such as earthquake, floods and hurricane/windstorm, may need a separate policy. Different states run insurance pools to offer policies for particular disasters -- for example, in California, most policies are sold through the California Earthquake Authority (CEA), in New York and Georgia, wind/hail coverage is available through the Fair Access to Insurance Requirements (FAIR), and the federal government runs the National Flood Insurance Program (NFIP). Insurance rates have skyrocketed in regions affected by floods, and some carriers will no longer write policies in states like Florida and Mississippi. And many homeowners discovered too late that their private insurance policies did not cover the extensive water damage caused by these natural disasters.

  • Update your auto insurance policies, too. Disaster survivors also suffered major property losses with their automobiles, which were either swept away in floods or deemed totaled due to the extensive weather damage. Auto insurance holders often will forgo optional coverage items such as collision or comprehensive to save on monthly premiums. However, for disaster-prone areas, comprehensive coverage is the only way to insure losses to your vehicle caused by windstorm, hail, flood or earthquake disasters. Without it, you could be left making payments on a car that is not even drivable. Compare comprehensive coverage, and if making car payments, ask your lender about payment requirements during special circumstances such as these.

  • Do your homework first and consider ways to reduce overall costs. Like car insurance, raising your deductible can save money on premiums. Most insurance companies recommend a deductible of at least $500, while a deductible of $1,000 can save you up to 25 percent of premium costs. Another way to save is to get discounts by making your home more resistant to natural disasters likely in your area. For example, you can save on premium by adding storm shutters, reinforcing your roof or retrofitting for earthquakes. Or by bundling auto and home insurance coverage together with the same carrier, premiums can be cut by 5 to 15 percent. Do extensive shopping before choosing homeowners insurance. Get quotes from different carriers. Since rates can vary, make sure you compare coverage on an apples-to-apples basis so you can realize when a lower price really represents less coverage.

About Answer Financial Inc.

Answer Financial (www.answerfinancial.com) is one of the nation's largest independent insurance agencies, providing consumers with comparative quotes and custom policies from 400 top-rated insurance companies. Since pioneering its automated shopping engine in 1998, the Insurance Answer Center, Answer has delivered more than 20 million quotes for auto, home, life, health, dental and specialty insurance products in all 50 states. Consumers can consult with one of Answer's 400 licensed Insurance Agents by calling 1(800) 233-3028, or they can visit www.answerfinancial.com to receive secure, real-time insurance quotes and buy their insurance policy Online. The Insurance Answer Center is also offered as a voluntary benefit program or cross-selling platform to hundreds of financial institutions, large employers and affinity groups serving millions of American families."

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Wednesday, May 10, 2006

Is H.R. 609 A Good Idea?

On March 30, 2006, the U.S. House of Representatives passed The College Access & Opportunity Act (H.R. 609): H.R. 609 would repeal the so called "Single Lender Rule" which denies student loan debtors the freedom to shop around for the best possible student loan consolidation deal. Is H.R. 609 good for student loan borrowers? Maybe. But H.R. 609 contains language that has many students, citizens and Members of Congress up in arms against it; check out these links:




H.R. 609 is now being considered by the U.S. Senate. If you think the bill is no good, use the following link to contact your Senator and tell him/her how you feel about it:


And, because it's only right to present both sides of the story, here's a snippet from a press release that was issued today:

"For online student loan expert Mike O'Brien, CEO of national student loan marketer EDLoan.com, the drawn-out struggle on Capitol Hill over the repeal of the Single Lender Rule has proceeded at an excruciatingly slow pace. But he's primed and ready to lead the charge for student loan borrowers if the repeal passes, now considered a distinct possibility in 2006.

'The outcry against the Single Lender Rule has been going on since I first entered the industry in 2000,' says O'Brien, who launched financialaid.com that year, a student loan marketing organization that became one of the nation's most successful online loan marketers. 'I've had to tell literally thousands of borrowers that I can't help them get lower interest rates or better terms for their student loan--or we've had to personally work with borrowers to consolidate their loans through long, drawn-out processes--all because of this rule. Now that it finally looks like Congress is hearing the call to action, and we're ready to spread the word to borrowers everywhere.'

The hopes of student loan borrowers and entrepreneurial loan organizations like Edloan.com rest on The College Access & Opportunity Act (H.R. 609), passed March 30 by the House of Representatives and currently under consideration by the Senate. As part of its terms, the Act will allow student loan borrowers to 'shop for the best deals' on consolidation loans by eliminating the Single Lender Rule. This rule limits consumers' ability to consolidate with the lender of their choice by requiring consumers who have all of their loans held by a single lender to consolidate with that lender, even if they could obtain better terms and service elsewhere. Borrowers would now have the ability to consider other lenders for the best terms and services, while ensuring the original holder of their loans can and must compete to retain the loan.

If the Single Lender Rule is repealed, EdLoan.com plans an aggressive online promotional and educational campaign to notify borrowers of their new options."

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Thursday, May 04, 2006

Missouri Hopes to Keep Science, Math and Special Education Teachers In Missouri by Lessening Their Student Loan Debt Burden

Premise: How can a state government keep math, science and special education teachers from leaving the state? Payoff some of their student loan debt, of course!

Further details can found below in the snippet from today's press release:

"The Missouri Higher Education Loan Authority (MOHELA) has announced a grant of loan forgiveness to a group of teachers in Missouri to support the retention of math and science teachers in Missouri schools, and to reverse a shortage of special education teachers in the state. MOHELA identified 339 eligible math and science teachers and 222 special education teachers from 200 school districts in Missouri who hold MOHELA loans, and who have not yet reached five full years of experience. Each has received up to $2500 in loan forgiveness from MOHELA.

Missouri Governor Matt Blunt emphasized at his 2006 Math and Science Summit, held earlier this week, the importance of improving the knowledge and expertise of Missouri's students at all levels specifically in the areas of math, engineering, technology and science if we want to be global leaders in today's economy. During the summit, participants highlighted the importance of expanding the number of teachers with expertise in the areas of math, engineering, technology and science and finding ways to retain teachers in these fields. MOHELA believes its loan forgiveness program can play an important role in assisting Missouri to meet this challenge. This is another good example of how public-private partnerships can work together to focus resources to address a state initiative.

'MOHELA's Spring 2006 loan forgiveness program will help shore up Missouri's efforts to expand and retain teachers in these key fields,' explained Raymond H. Bayer Jr., Interim CEO and Executive Director. 'Eliminating up to $2500 in student loan debt reinforces the valuable role these teachers play in shaping Missouri's future, and acknowledges the personal and financial sacrifice teachers make to do this important work. We especially appreciate the encouragement and support of the Missouri state Departments of Elementary and Secondary Education (DESE), Economic Development (DED) and Higher Education (MDHE) in developing this initiative.'

MOHELA believes that experienced and qualified teachers are vital to improving student performance in math, science and special education. However, many teachers leave the profession before they have completed five years of teaching. This new plan strives to keep them in the classroom longer. MOHELA believes experienced teachers can yield positive improvements on college attendance and graduation rates.

'MOHELA remains committed to its core mission in the face of important and changing issues at the federal and state government level,' added Bayer.

Loan forgiveness is one of many MOHELA borrower benefit programs and is made possible by MOHELA's access to tax-exempt bonding authority granted by the Missouri Department of Economic Development. For more information on this, or other MOHELA services, log on to http://MOHELA.com.

MOHELA is one of the largest nonprofit student loan secondary markets in America, and is a leading holder and servicer of student loans with more than $5.2 billion in assets, and loan purchase activity in excess of $1.2 billion per year. MOHELA advances its benevolent mission of eliminating barriers for students so they can access higher education through local, regional and national partnerships with a variety of educational and financial institutions."

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Wednesday, May 03, 2006

Get Acquainted with Your Home Insurance Policy, Before The 2006 Fire/Storm Season Starts

Here's an interesting statistic from the good folks at the Homeowners Consumer Center: A recent survey of 1,000 U.S. homeowners by the Homeowners Consumer Center found that less than 15% understood their home insurance policy, or the areas of homeowner's insurance coverage they should have. Yikes!

With the 2006 Fire/Storm season just around the corner, homeowners should do their best to prepare themselves for the worst by understanding their policy, and making changes to it, if necessary.

Further details, along with some other great home insurance tips, can be found below in the snippet from today's press release:

"The Homeowners Consumer Center is making and urgent appeal for all US homeowners to check their homeowners insurance policy, before the start of the 2006 hurricane, storm or fire season. After surveying over 1000 homeowners representing every US state, it was discovered that less than 15% of those surveyed, understood their homeowners insurance policy, and or the areas of coverage the typical homeowner should have. From this survey, the Homeowners Consumer Center ( Http://HomeownersConsumerCenter.Com ) has come up with a very simple list of do's & don'ts for every homeowner, when it comes to their homes insurance coverage. as follow:

Do's & Don'ts

1. If you live in a state on or close to the Gulf of Mexico, the Atlantic Coast, Hawaii, a river, stream or an area prone to flooding, get flood insurance coverage, and make certain you get the maximum insurance coverage ($250,000).

2. If you live in a state on, or close to the Gulf of Mexico, the Atlantic Coast, Hawaii, a river, stream or an area prone to flooding, be certain to get the $100,000 supplemental flood coverage. This will cover personal property loss due to flooding. 95% of the homeowners surveyed were not even aware this type of coverage exists. In the event your home is destroyed by flooding, contents coverage will pay up to $100,000 for personal property replacement. The typical homeowners policy & or standard flood insurance exclude personal property. To see if your home is in a flood plain or potential flood plain go to FEMA's web site.

3. Make certain your homeowners policy has at least one years coverage for 'loss of use', for at least $2000 per month. Loss of use will help pay rent, or living expenses in the event your home is rendered unusable as a result of a flood, fire or storm damage.

4. Of the over 1000 homeowners surveyed, only 3% knew if their homeowners insurance policy has 'full replacement' coverage. In other words, if the house was destroyed by wind & rain, fire or flood, they were not sure if the policy called for actual replacement. Further complicating the matter; many homeowners don't understand their insurance coverage because it was added on, when they financed or refinanced their home by the mortgage lender. In other words they have little or no idea of what is covered or what is not covered on the policy.

5. Only 9% of homeowners surveyed knew that certain types of valuables (jewelry, art, guns, etc) must be included on a separate sheet provided by the insurance agent/insurance company. These items must be listed on your policy and agreed to by your agent & insurance carrier. If you do not have this additional documentation, in most instances there is no insurance coverage in the event of a loss. If you have expensive jewelry, art, antiques, collectibles, guns, etc call your insurance agent & get them listed on your homeowners policy.

6. Don't do business with an insurance company you have never heard of before. Before signing on with an insurance carrier, check with your states insurance commissioner about the company, and or check the internet for complaints about your current or proposed company.

7. When looking for an insurance agent for your homeowners coverage ask around to find out who has a good reputation, or a reputation for excellent customer service. If you ever have a significant loss related to your home, make certain you have a good insurance agent/company in your corner.

8. Don't forget to take pictures of every area of your home (exterior & interior-actual building & contents). This way you can prove to the insurance company, you had what you say you had, and special or unique features of the home/contents are shown.

9. Try to keep receipts or proof that you had what you say you had in your home. After Katrina, many homeowners had no way of proving they had an upgraded refrigerator, TV set, computer system, stove, etc. Receipts will help you prove to the insurance company what your homes condition was prior to the loss and or what you had in the house.

10. Don't keep important records like insurance policies, an inventory of your home contents, pictures of your home (exterior & interior), financial documents, receipts, in your home, etc, unless they are in a secure, fire-proof and water-proof container. In this instance the Homeowners Consumer Center strongly recommends a bank safety deposit box.

The Homeowners Consumer Center is dedicated to protecting the American Dream for all US homeowners. Their goal is to educate homeowners in order to protect their assets and to educate the homeowner so they get the right product for their situation or circumstance. Their web site is located at http://HomeownersConsumerCenter.Com. The Homeowners Consumer Center also offers useful consumer information on numerous other aspects of homeownership. Homeowners and or consumers are encouraged to share this information with their friends, co-workers and neighbors."

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