You have a $120,000 college degree and no job. That won’t stop your student loan bills from arriving.

The six-month grace period on student loans for the class of 2009 is about to expire, meaning this year’s graduates will soon start getting their monthly statements. It could be a problem for those who have yet to find full-time work. Others who graduated earlier may also be struggling.

One option for anyone in a financial squeeze is deferment or forbearance, which allow for the postponement of payment under select circumstances.

“These are really important options for people who are struggling,” said Edie Irons, a spokeswoman for the Project on Student Debt, an advocacy group based in Berkeley, Calif.
There will likely be repercussions, but none as damaging as if you consistently make late payments or let loans lapse into default. So if you need extra time to pay your loans, here’s what you need to know.

Who’s eligible?

A deferment or forbearance is a period when payments on a loan are not required, although interest generally continues accruing. The difference between the two is that the term “deferment” is used in specific situations with federal loans.

Most people know federal student loans can be deferred if you enroll in graduate school or the military. But you can also get a deferment for unemployment or economic hardship.

To qualify for the latter, you can’t earn more than $16,245 a year in the continental United States. You’re also automatically eligible if you get public assistance.

If you don’t qualify for a deferment, you might still be able to postpone payments if you’re dealing with health issues or other circumstances. The government calls this a forbearance; private lenders use the term for any type of postponement they grant.

With private loans, the lender has the discretion to grant forbearance.

Sallie Mae, the biggest issuer of private student loans, says its agents interview borrowers to assess whether forbearance is an appropriate solution.

It’s worth noting that Sallie Mae is granting forbearance less frequently than in the past. At the end of the second quarter, 6.5 percent of its private loans were in forbearance, compared to 13 percent the same time a year ago.

Patricia Christel, a Sallie Mae spokeswoman, said the company is trying harder work out payment arrangements rather than immediately using forbearance as a solution.
How long will it last?

Economic hardship deferments are granted one year at a time, while unemployment deferments are granted in six-month increments. You can reapply as needed for a total of three years each.

That means you could get an unemployment deferment for three years, then an economic hardship deferment for another three years. The deferments don’t have to be used continuously.

You could also reset the time limits on deferments if you consolidate a loan, since it’s essentially a new loan, said Irons of the Project on Student Debt.

The terms for federal loans are tailored to specific situations, so there are no set rules on how long they last. Expect less leniency on private loans. Sallie Mae grants them in one- to three-month increments, typically for no more than two years.

What are the drawbacks?

These measures should be used as a last resort, since interest generally continues accruing on the loan.

One way to minimize the financial impact is to pay the interest costs while your loan is in deferment or forbearance. Otherwise, it will be added to the loan amount and push up what you ultimately owe.

For example, let’s say your principal loan amount is $15,000 with a 9 percent interest rate.
Your monthly payments after a 12-month deferment would be $207 if you didn’t pay interest during the deferral, versus $190 a month if you did. That’s assuming you’re repaying the loan over 10 years.

The exception is if you have a subsidized federal loan, which is when the government picks up the cost of interest on the loan while you’re in school.

The government will also pick up the interest costs during a deferment on these loans, although it won’t for a forbearance.

Are there other options?

One alternative is picking a payment plan that reduces your monthly bill. Of course, this means it will take longer to pay off your loans, which in turn pushes up how much interest you pay.
Another relatively new option for federal loans is the Income-Based Repayment program. The program caps monthly payments at 15 percent of your earnings above a certain threshold, currently around $16,000. Those who earn less than that may not have to make any monthly payments.

Any debt remaining after 25 years is forgiven. Eligibility is determined by weighing your debt level against your income. A calculator at www.ibrinfo.org can help assess whether you qualify.

You can also change payment plans with private loans. Or your lender may be willing to rework the terms of your loan, perhaps with a lower interest rate.

What if i ignore bills?

The benefit of getting a deferment or forbearance is that your loan remains in good standing, and there is no impact on your credit report.

Otherwise, federal loans usually go into default if you don’t make payments for nine months. Sallie Mae says its private loans typically go into default after seven months.

Either way, a default sets off a chain of repercussions. It’s a black mark on your credit report, meaning it will be difficult for you to get a credit card, mortgage, or any other type of loan.
In default the entire balance of your loan becomes due. Your loan might be turned over to a collection agency, and you’ll be liable for the costs of collection.

Your wages could also be garnished, and your tax refunds could be intercepted. Student loans typically aren’t discharged with a bankruptcy, either. And once the loan is in default, you can’t get a deferment or forbearance. So don’t let it reach that point.

source: http://www.chron.com/disp/story.mpl/business/6673798.html

Amid worries about job losses and problems paying the mortgage, many American families are facing another financial crisis: How to pay for college.

There’s no doubt a college education will be a necessity in the economy that emerges from the current recession. Even though a college degree can’t prevent a layoff, it will give an edge for the jobs of the future.

But what if American families can’t afford college? After all, in spite of the economy, college costs continue to rise. It’s now estimated that the four-year cost of college will be $124,000 for today’s high school seniors, with many private schools costing much more.

The College Board, which tracks average college costs, won’t release its report for the 2009-2010 school years until late October. But in 2008-2009, public college costs increased an average of 6.4 percent, and private school costs rose 5.9 percent. For years, these costs have risen far more than the most traditional measures of inflation.

A new survey by Fidelity Investments finds more parents have started saving for college. Even so, families can cover only 11 percent of the total cost of their children’s college education this year, down from 15 percent in 2008.

Families are resorting to drastic measures, according to the survey. Seventeen percent plan to have a nonworking spouse return to work, while an equal number hope to take on a second job. Half plan to have their child live at home and commute. And 43 percent of parents say they will have to delay retirement to help pay for a child’s education.

Even students are changing their tune, with 90 percent saying they believe they should help pay for at least some college costs, either out of their own savings (42 percent) or by working while in school (76 percent).

The good news, according to the survey, is that parents and students are more aware of the need to save, many taking advantage of tax-free 529 college savings plans. (A reminder here that if you want to invest outside your state’s savings plan, you can go to Fidelity or Vanguard and open an account there. You simply forgo any deduction on your state income tax for your contribution if you invest in an out-of-state plan.)

What are colleges doing?

If families are doing their best to save for college, it’s only fair to ask what colleges and universities are doing. State university tuition increases have been rising faster than those for private colleges. And the outlook is gloomy. Every state is facing budget nightmares because of the recession. The big allocations to public universities are a tempting target. In fact, many parents complain that their rising tuition bills are just being used to make up for cuts in state support.

Private schools rely on income from their endowment funds, many of which have shrunk dramatically in the market decline. They’re usually loathe to dig into principal — especially when they’re hoping for more of a stock rebound.

Colleges have not traditionally been run as a business. Few businesses offer job security like “tenure” — except for federal bureaucrats and the U.S. Postal Service (two “businesses” that continually lose money).

And few businesses can survive without reacting to market forces by cutting less-profitable product lines. Yet universities continue to offer marginal courses in the name of a “broad and diverse” education. Take a look at your child’s course catalog, and you’ll see what I mean.

Certainly, universities have rising costs of maintaining their buildings, classrooms and libraries. But university “management” and board supervision may be more focused on the profitability of the football team than the kind of prudent cost-cutting every other business faces these days.

In an era when “everyday low prices” or discount stores are the only places consumers will shop, why don’t colleges get the message that their customers cannot afford their rising prices?

How long will it take until universities recognize that their “customers” are no longer willing, or able, to go into debt to buy their educational product?

Only when market forces teach the lesson of responsible pricing will college become more affordable. Let’s hope that will not be too late for a generation of students who will be sidelined because they simply can’t afford college now.

Losing today’s students would have a terrible impact on America’s future economic growth. And that’s The Savage Truth.

source: http://www.speroforum.com/site/article.asp?idCategory=34&idsub=127&id=20612&t=Colleges+Must+Cut+Costs

Many Americans are finding themselves wondering about their futures as the list of companies that are reducing their workforces grow. As more people enter the job market, competition is growing for unfilled positions and the average applicant must have a little something extra to get the attention of prospective employers. One thing that is a plus for any resume is a college degree, especially for older workers who find themselves back in the job market. These workers are in competition with a younger and better educated group of applicants. Many older workers are intimidated by the prospect of going back into a classroom to earn that degree that will put them back on an even playing field in today’s job market. With the flexibility of the internet, there is a good alternative; attending college online.
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There was once a cloud over online degree programs because some employers did not accept online schools as “real colleges”. With more and more colleges adding online degree programs as part of their academic offerings those prejudices are disappearing. An older worker can get degrees from well known colleges and universities in fields like business management, accounting, education, criminal justice, human resources, and the list goes on. The best part is they need never step into a classroom. Many of these degree programs are done by a combination of online chats and lectures, lectures on CD or DVD that can be viewed at the student’s convenience, chat sessions with the professor for one on one instruction, and the use of standard text books.
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If someone finds themselves in a position needing a degree to boost their resume finding a reputable online degree program is not hard. The best place to start is with the local college or university. Inquire at the admissions office and see if they offer online degrees or classes and if not many will be glad to provide resources to point you in the right direction. Research on the internet is also very informative. Look for several things when considering an online degree program.
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• What school offers it?
• Is the program accredited?
• What degrees do they offer?
• If you are still employed, does my employer offer any tuition assistance?
• Will they accept any college credit I may already have?
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Armed with the right information any worker, regardless of age can find a degree program that works well for them.
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With competition increasing in today’s job market it is essential that applicants stand out so that they can be noticed by perspective employers. Nothing catches an employer’s eye like education and experience. Older workers now have the tools at their disposal to show off both. The time has never been better for people who are already in the job market to enhance their resume and a great place to start is a reputable online degree program.
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source: http://financetips4u.com/

The economic stimulus plan that was passed earlier in 2009 increases the maximum Pell Grant, from $4,731 currently to $5,350 starting July 1 and $5,550 in 2010-2011. This Federal Financial Aid Grant is intended to help the lowest-income students attend colleges or universities. The maximum grant should cover about 75% of the average cost of a four-year college. The plan also increases the number of students who will be eligible. In fact, now, 800,000 more students, or about 7 million, may qualify for Pell Grants.

In addition, the 2009 economic stimulus package increases the tuition tax credit to $2,500 and makes it 40 percent refundable. Due to this boon, families and individuals who don’t make enough to have to pay income tax could still get as much as $1,000 in extra tuition help.

Better yet, computer expenses are now an allowable expense for 529 college savings plans – a big positive for online degree seekers!

The package spends an estimated $32 billion on higher education – so don’t get left behind. Take advantage of the benefits offered to help you get ahead.

Unemployed? Think you may be out of a job soon? It makes sense to start increasing your credentials now. When you have earned your college degree, you’ll be able to find better jobs with higher pay.

Find out more about what is available for you and get started earning your college degree.

source: http://www.toparticlesdir.com/reference-education/economic-stimulus-plan-increases-help-for-college-tuition/953

Here at the Middle Class Task Force, we have been working on ways to make college more affordable for families in America. The President, the Vice President and the Middle Class Task Force are committed to making sure that every student has the opportunity to earn a college degree.

In April, the Vice President hosted a Middle Class Task Force Meeting on college affordability in St. Louis, Missouri to discuss ways to expand opportunities and help make the dream of a college education a reality for more families. In Missouri, we released a staff report on ways that the administration can work to increase college affordability.

For high school seniors or aspiring college students facing the daunting task of applying for financial aid, the FAFSA (Free Application for Federal Student Aid) form can be a needlessly difficult obstacle on the path to higher education. Previous versions of the FAFSA have included as many as 153 questions, most of which had no relevance to financial aid packages.

On Wednesday, Secretary of Education Arne Duncan – a Task Force Member – followed up on our Missouri findings and announced a shorter, simpler, and more user friendly FAFSA form that will make it easier to apply for financial aid.  Starting this summer, students will be able to access the new web based FAFSA that dramatically simplifies and shortens the application form, and by next January, the FAFSA application will be streamlined with the IRS for a one stop, easy and pain free application.

The new version will make it easier and less intimidating to apply for aid, and will increase access for hundreds of thousands of students who are eligible, but do not apply for aid.

Simplifying the financial aid application is a policy that members of the Middle Class Task Force believe will help families benefit from important resources to cover the cost of college. We are continuing to work with Congress, the Treasury Department, the Department of Education, and the Administration to strengthen and affirm the opportunity for every student to pursue higher education.

source: http://www.whitehouse.gov/blog/Blogging-to-the-Middle-Simplifying-Financial-Aid-Applications/

There are many advantages for you if you do choose to earn your college degree. It helps to enrich many parts of your life, but it also has its disadvantages as well. A big part of being able to earn an online college degree is being well aware of all the advantages and disadvantages and how they affect you and your situation before you begin.

Advantages For You When You Earn Your Online Degree

The advantages for anyone willing to earn your degree reach into your life farther than you would expect. The obvious advantages are to your income earning potential. Almost immediately upon registering to earn your degree you have a certain prestige. You have taken the steps toward beginning to earn your associate degree online, online bachelor degree or online master degree. You are officially a student in the program of study you have chosen. Making sure that your boss and administration is aware of this gains you an upper hand in many positions and workplaces. Each year you gain knowledge from your choice to participate in higher education and gain the earning potential that you have dreamed of having at your disposal.

Another advantage is entirely personal. When you make that choice to earn your online degree you give yourself a pat on the back. You are helping yourself to a better life and this sinks in your subconscious after a while. You begin to expand your mental and educational horizons and you see yourself learning as you earn your online degree. It is a boost of self esteem that goes a long way in changing your life.

Yet another advantage is the ability you gain to move up the ranks at work and even go into a private practice. There are many more opportunities for you when you get a degree online, in business and career venues. Many online degree holders go into consulting positions in addition to their job or after retirement.

Disadvantages For You When You Earn Your Online Degree

The most important and most notable disadvantage of the choice to acquire an academic degree may be the time factor. This is especially true when you have been out of school or any learning environment for a length of time. It is not always an easy task to get back into a routine where you make specific time for study and class time. It is often the hardest part of your choice to attend college.

Make sure the school you choose to earn your online degree from is accredited and recognized. This can also be a huge disadvantage. Some colleges and universities do not transfer credits from online schools. Make sure you are aware of any other schools you may choose to go to. Earn your online degree to further your career, but do not forget to choose one that is going to help you and not harm you. Ask the administrative office about the schools accreditation and make sure you understand what you are being told.

One final disadvantage that may occur when you choose to go to college online is the money factor. Education does not come cheap. It takes a toll physically, mentally and economically. It can take time away from work and family as well. Fortunately, financial aid is a big help for those that qualify. It is also not as hard as you might think to qualify. There are many programs to help students of all ages earn an online degree.

The advantages and disadvantages for you if you choose to attend online college courses are wide and varied. Make sure to consider it from all angles. It may be a good idea but not the right time to earn your online degree. Take the time to research your choices and actually consider what life will be like when you make that step to earn your online degree.

source: http://ezinearticles.com/?Earn-Your-Online-Degree-to-Expand-Your-Income&id=2449889

Online education is a dramatic development in the advancement of distance learning. A century ago, a person without access to a school or training program could sometimes get the information that they desired through a correspondence course. It was not a particularly efficient way to get an education but it did open doors that might otherwise have been closed. The quantum leaps in technology during the latter part of the 20th century have altered the profile of distance learning.

Students that cannot attend classes at a traditional college campus can now participate in the same course of study as those attending day or evening school. Online education programs are structured such that a student can integrate lessons into their unique daily schedules. Participants have the flexibility to complete their work when it is convenient but communicate with instructors whenever it is necessary. You can now pursue a college degree at your own pace with a course load that is appropriate for you.

Online education is rapidly evolving and courses are available for a variety of subjects. It is possible for someone to finish their high school studies and obtain a GED online. Courses and certifications are also available in a variety of technical areas. An ever-expanding number of degree programs are available. Students can earn a bachelor’s degree, master’s degree or doctorate degree for an impressive list of disciplines.

The Internet is moving well beyond e-mails and e-commerce. Predictions of an Information Age are proving prophetic as the information superhighway carries more and more vehicles transporting ideas opening the door to an education that may have been denied to many. Online education has resulted in thousands of virtual classrooms that offer the possibility for accomplishment and advancement for all.

In an age where everyone and everthing is stretched too thin it is refreshing to know that the Internet provides legitimate resources that allow almost anyone to learn about almost anything. You can now feel confident that life and opportunity are not passing you by. Higher education is noiw available to any person with the drive, the desire and a personal computer.

source: http://ezinearticles.com/?Online-Education-Has-the-Power-to-Transform-Lives-and-Fulfill-Dreams&id=45790