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Money

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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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:

http://www.aacrao.org/federal_relations/Vote_No_HR609.pdf

http://as.sdsu.edu/govt/council/pub_notice/notices/Archive/05-06/CB_F05-02.html

http://www.civilrights.org/issues/affirmative/details.cfm?id=41784



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:

http://www.yourcongress.com/MemberSearch.asp


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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