Stafford Student Loan News

SHHHHH

At some companies, the Holidays bring joy and days off from work….here at Edvisors…it brings bad moods and 14 hour days. JUST KIDDING! We are nearing the time when we draw names for our Secret Santa gift exchange…and the anticipation is killing me. Who will I get? Who will get me? Will I get Vodka? Here are some key questions to ask about the person you are shopping for and of course…my answers for the unfortunate person that gets me this year for Secret Santa:

1. What type of music does s/he like?
My Morning Jacket, My Morning Jacket, and My Morning Jacket
2. What is his/her favorite store?
http://mymorningjacket.shop.musictoday.com/
3. What is his/her favorite color?
Green
4. Is there anything that s/he is allergic to?
not that I know of
5. Does s/he drink?
look under my desk to find out
6. Is there anything s/he feels strongly against?
animal abuse (so… no fur products please)

A few things to consider, while you are trying to figure out what to get this person who you see more than your own family…but have no clue who this person actually is….

1. ask someone who knows them better for help without giving the secret away
2. don’t get them food if they are on a diet
3. don’t get them anything work related…like a three hole punch, or a stapler
4. most importantly….try and get something that person will truly enjoy…if you can’t handle this…dont play!

Happy Shopping

ps: does anyone actually drink Eggnog? If you do, post a comment….I want to make sure you exist.

For prospective or current college students, it is important to know the 2 different types of the Stafford loan. It is not news that if you are going to take out a loan, you should be well educated about the loan, for obvious reasons….but equally as important is realizing what these loans mean for your financial future. Remember it’s your Education and your money…two things that have extreme importance in todays world. Ok so here goes: Subsidized Stafford loan means that no interest accrues on this loan while you are in school at least part time. Interest starts accrueing on it 6 months after you graduate, or withdraw from school…or 6 months after you drop below part time. The goverment puts limits on how much you can borrow, because they are the ones paying the interest for you to the lenders.

Unsubsidized Stafford loan are a bit different. They accrue interest from the moment it is disbursed. You, the borrower, have the option to pay the interest monthly, or let the interest accrue and be capitilized. For a 3500 Unsub Stafford loan, with a rate of 6.8% - this will accrue about $20 per month in interest. So $20 a month for four years will add about $1000 to your original loan balance by the time you graduate….and this will increase if you have the interest capitlized.

So here is the big picture….

Four years of school…you take out as much Sub as you can….you also take out some Unsub to help cover tuition costs….so you have $17125 in subsidized Stafford, and 10,500 in unsubsidized Stafford

Scenario # 1 (you paid the interest monthly for 4 years)

Total loan debt: $27,625

Monthly Payment: $ 318/ month for 10 years

Total Interest Paid: $10,535

Scenario # 2 (you did not pay your interest)

Total loan debt: $29,605

Monthly Payment: #341/ month for 10 years

Total Interest paid: $11,315

As you can see, it is wiser to pay the interest monthly, if you can afford it. If you cannot afford it, thats ok…you can make up for it later by paying not taking the full 10 years to pay the loan. Federal loans have no prepayment penalties. So the sooner you pay them off, the less you will end up paying in interest. Got Questions or Comments…..

Financial Aid Forum

In a recent staff meeting, we discussed the issue of freedom of choice and the Stafford Federal Student Loan.

When you, as a first year student, signed the promissory note for the Stafford Federal Student Loan, you may have signed what’s called a Master Promissory Note, which is essentially a four year loan application. As you may know, recent events in the student loan world have highlighted the very important face that students, parents, and families have a right to choose when it comes to federal student loan providers.

Thus, if you would like to use StaffordLoan.com and the Student Loan Network as your provider of the Stafford Loan, you have the right to do so. Fill out and complete an application on StaffordLoan.com and then speak with your financial aid administrator. Let them know that you would like to switch loan providers for your Stafford Loan, and when your application from the Student Loan Network arrives in the office, to please certify it and cancel the old master promissory note.