Jun 162014
 
student loan debt, student loans, carrying student loan debt

The Effects of Student Loan Debt on College Graduates
By Christine Wilton

It’s June and it seems like graduation season is in full swing. In the mean time, student loan debt is on the rise and is currently more than $1.16 trillion dollars, exceeding credit card debt in the United States by $305 billion. There seems to be a domino effect that this enormous debt has on college grads. Tuition continues to rise and jobs are scarce. It’s holding back our economy and here’s why.

Economic markets that have been impacted thus far are the mortgage market, small businesses, retirement security and consumer spending. When grads are having their entire paycheck evaporate from debt repayment, they can’t buy a home, start a business or save for retirement. We need to rethink how we pay for college, and how much we’re willing to pay for an education in America. In the meantime, the debt load on our future leaders is forcing them to live in abject poverty during repayment.

Living in poverty may be a long-term condition as these graduates pay off a student loan debt that looks more like a mortgage in the total amount due. While a present undue hardship is one step toward getting these loans discharged in bankruptcy, alone it is not enough for bankruptcy to help. Bankruptcy courts around the country differ in their approach to determining the dischargeability of student loans, but most will use a totality of the circumstances approach. Until Congress takes action to change the current rules in Bankruptcy, the economic will continue to drag along carrying an increasing pile of debt.

It’s a perverbial ‘ball and chain’ for the Millenials. They’re stuck at home with their parents, working part-time at minimum wage jobs; maybe several just to pay their loans. With no room left for discretionary spending, which is a true sign of economic recovery, the drag continues. We see a failure to launch having social implications for Millenials. Even students who have thoroughly prepared themselves for the repayment period are finding hard times. For a complete report on the student loan crisis, click here. Graduates should not be carrying the financial burdens for greedy for profit colleges and our federal government’s ability to collect on this debt indefinitely.

It looks like criminals have more rights than our college grads. There is little incentive to make changes in Congress because the government is making money off the backs of our children and our country’s future through default collections costs, servicer fees, and the ability to garnish wages and intercept income tax refunds without a court order. This student loan lawyer believes it’s time for revolution.

About Law Offices of Christine A. Wilton
Consumer protection and bankruptcy lawyers of Law Offices of Christine A. Wilton represent families facing financial difficulties, burdened by debts including taxes, student loans, credit cards, medical bills, law suits, fallen behind on home mortgage payments, or facing auto loans they can no longer afford. The firm has helped clients eliminate student loan debt and helped reduce principal mortgages through the bankruptcy process. The law firm is passionate about helping clients achieve financial freedom from their debts and fights oppressive debt collectors.
For more information please call 714-533-9210 or visit their website http://www.attorneychristine.com/ for a free consultation.

Article Source: http://EzineArticles.com/?expert=Christine_Wilton

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(5)

Feb 242014
 

student debt, student loans, college loans,

Student Debt

By [http://ezinearticles.com/?expert=Paul_Anacki]Paul Anacki

In 1969, Elisabeth Kubler-Ross introduced the five stages of grief in her book “On Death and Dying”: Denial, Anger, Bargaining, Depression, and Acceptance. If you have a large student debt balance, then you’ve probably experienced some “grief” and are no stranger to the five stages. If you are in the “Acceptance” stage, this article is for you!

Being in the Acceptance stage is a good place to be. It means that: you have discovered that deferrals and forbearances are not forever (Denial stage), you have stopped blaming others for getting what you assumed to be a “free ride” (Anger stage), you have learned that you can not discharge your student debt through bankruptcy (Bargaining stage), you have stopped drinking heavily and watching re-runs of the Gilmore Girls (Depression stage), and you now accept your financial responsibility and are prepared to do something about it. You are not going to find any “magic bullets” in this article, but you will find an effective strategy for paying off your student debt in the shortest amount of time.

Step 1 - Organize All Your Student Debt in a Spreadsheet

To better manage your student debt, you must completely understand what you are up against. Creating a spreadsheet will give you insight into how your loan works and show you the positive results of making extra principal payments. To create a functional spreadsheet, you must understand the terms of your student debt and know how to organize this information into a spreadsheet. If you are not a spreadsheet user, you will find that learning the basics is easy.

To begin building your spreadsheet, you will need the following information about your loan: current balance, interest rate, payment amount, and how the interest is calculated. This will allow you to create an interactive spreadsheet that will calculate how much interest accrues daily and provide you with a daily balance.

How the interest is calculated may require some digging. You will find this information by reviewing your loan documents, going to the lender’s website, or calling your lender’s customer service number. The number of days used to calculate interest on a loan is known as basis. For example, a mortgage is typically calculated using “30/360″, which means a year is assumed to have 360 days and a month is assumed to have 30 days. Thus, when you make a mortgage payment, your interest will be based on 30 days. Student loans typically use the actual number of days in the month and a year with 365 days (actual/365). Some loans may use an actual/365.25 convention; each student debt loan is different. On a loan with an actual/365 basis, you will pay less interest in a short month (one that has less than 31 days) than in a month with 31 days.

Feeling lost yet? Don’t worry, because once we put it all together it will make sense. I’ll also explain how to test your spreadsheet to make sure it’s functioning properly. The initial setup of a spreadsheet is the most challenging step.

On the top of your spreadsheet, insert the key pieces of information regarding your student debt, such as: beginning balance, interest rate, monthly payment, payment due date, and the interest rate factor. The interest rate factor is the interest rate divided by the number of days in the year. Again, every lender and type of loan is different in terms of how many days in the year are used. The informational part of the spreadsheet is important because you want to clearly see the variables that impact your student debt.

After you input the key pieces of information, you can begin the construction of your interactive spreadsheet. Your goal is to create a spreadsheet that shows when each payment is posted, how much of each payment is applied to principal and interest, and what the ending (or current) balance is. The column names that you will create are (from left to right): Payment Date, Principal, Interest, and New Balance. Below is a more detailed explanation of these columns:

Payment Date - This is the date that your payment is actually posted to your account. This is critical since the interest on your student debt is likely based on the actual number of days between payments.

Principal - This will be a formula that equals your payment amount less the interest portion of your monthly payment. It’s the part of your payment that will be applied to reduce your balance.

Interest - You need to know how your lender calculates interest on your loan. Typically, it is based on the actual number of days multiplied by the previous month’s balance multiplied by the interest rate factor. Your Excel formula will be: (current payment date minus previous payment date) x previous month’s balance x the interest rate factor.

New Balance - This is equal to your previous month’s balance less the principal portion of your current payment.

If your lender has a website that allows you to see information about your loan and/or make payments, establish online access immediately. Print the balance history of your loan and begin building your spreadsheet using your first payment as the starting point. The balance history should show how much of each payment was applied to principal and interest. This is how you can test your spreadsheet to make sure it is working properly. Check to see if your formula results match the history on the website. If they do not match you will need to troubleshoot to figure out why. It could be that the lender made an error, but more than likely the error is on your spreadsheet. If you have a friend or family member who is an Excel user, see if they can give you some assistance. The web is a great resource as well.

The real power of a spreadsheet is that you can simulate what-if scenarios easily. For example, let’s say that you receive a large cash windfall. You can input this figure into your spreadsheet and easily see what the results of such a big pay-down would be. You might learn that if you made this extra principal reduction payment your student debt would be paid off in ten years instead of 15. You may find this very motivating. However, if you don’t have a tool such as a spreadsheet to generate this type of information, then you might choose do something else with your money.

Step 2) - Strategies to Accelerate Payoff

Congratulations on building a spreadsheet where you can track your student debt balances and payments. Tracking a loan in this manner gives you control over the loan. Getting a statement in the mail every month and not really understanding why your balance moved so little is not motivating and adds to a sense of hopelessness (and you really don’t want to go back to the cheap beer and Gilmore Girls re-runs). Here are some specific strategies to help you pay off your student debt quickly:

Pay a little extra each month - We’ve all heard this before, especially when talking about mortgages. Well, the same holds true for student debt too. When you make a monthly payment, part of that payment is applied to interest, and the rest to principal. My suggestion: Pay the amount of extra principal that will result in your loan balance having two zeros at the end of it. For example, if your balance will be $37,845.21 after you make your next payment, pay an extra $45.21 to make you principal balance $37,800. Getting your loan to an even hundred dollar figure is a strategy to encourage you to pay extra each month.

To facilitate this strategy, I suggest you make your student debt payments electronically. You have no control over when your payment is posted when you mail it. When you make an online payment, you typically select the payment post date. In addition, there will likely be a section to input the extra amount of principal you wish to pay.

The benefit of paying more than your minimum payment is that when you make your next payment, a bigger portion will be applied towards the principal and less towards the interest (compared to if you did not pay extra the prior month). If you continue to pay more than the minimum due, this effect will be compounded each month. The result is that you will pay off your student debt significantly faster than if you only made the minimum payment. That is because as your balance decreases, the amount of interest you pay decreases. More of each payment will be applied to reducing the principal. This effect is easy to see when you track it on a spreadsheet, which is why doing so is an effective strategy.

Make a plan to pay “a lot extra” on a regular basis - If you get a tax refund each year, apply it to your student loan balance. This will have a tremendous impact on how quickly your student debt is repaid. If you get a bonus each year, apply that as well. Any windfall, or instance of “found money”, should be used to reduce your balance. It is not uncommon for people to treat “found money” differently. “Found money” is often wasted on “splurge” items. Resist this urge! Use any extra money, no matter where or how you got it, to pay down your student loan balance!

In summary, the steps needed to help you pay off your student debt faster are:

1) Utilize a spreadsheet to track your loan so that you can see how much of each payment goes to principal and interest. Perform what-if scenarios so that you can see the impact of paying down your student debt and formulate a strategy for doing so.

2) Pay a little extra each month. One strategy is to pay an extra amount such that your balance is an even increment of $100.

3) Commit to making large payments when you have a cash windfall, such as an income tax refund or bonus. While this may not provide an immediate reward, the long-term consequences will be sizeable. Time truly does fly, and what may seem like a huge balance now can be reduced to zero in a lot less time than you think, but only if you make it a priority and a goal.

Paying off your student debt can seem overwhelming. However, if you employ the strategies provided here, you’ll learn you can succeed more quickly than you ever imagined. You can apply these same ideas to your mortgage and other loans. Gaining control of your finances is empowering. And by the way, I started this article by referencing the five stages of grief. If you die, please know that in most cases your unpaid student debt will die with you - unless you consolidated with a spouse. In that case, unfortunately, the loan will live on.

For more helpful information on student loans and other personal finance topics, visit my blog [http://www.icantgetahead.com]http://www.icantgetahead.com.

Article Source: [http://EzineArticles.com/?Student-Loans---Getting-to-Paid-in-Full&id=8337375] Student Loans - Getting to “Paid in Full”

Student Debt: Pay it Off Early

(91)

Dec 312013
 

student loans, student loans repayments,Student loans are a very important part of getting a higher education. Make sure to understand the impact of student loans repayment will have on your future. Here are some of the basics that you need to know.

Make sure you stay on top of applicable student loans repayment grace periods. This is generally the period after graduation when the payments are due. You can use this time to start saving up for some initial payments, getting you ready to avoid any penalties.

Always know all the information pertinent to your loans. Keep a running total on the balance, knows the repayment terms and be aware of your lender’s current information as well. These three things will affect future repayment forgiveness and plans options. You have to have this information if you want to create a good budget.

Communicate often with the lender. Always let them know when you change your phone number, mailing address or email address, and these things can happen often when you are in college. Do not put off reading mail that arrives from the lender, either. Take action right away. Failing to miss any deadlines or regulations can mean risking losing quite a bit of money or time.

Face financial issues or some other bump in the road comes up; don’t worry about missing a payment, if you lose your job. Generally speaking, you will be able to get help from your lender in cases of hardship. Make sure you realize that going this route may result in increased interest.

Don’t be driven to fear when you get caught in a snag in your student loan payments. There is always something that pops up in a person’s life that causes them to divert money elsewhere. Do know that you have options like deferments and forbearance available in most loans. Keep in mind that interest often continues accruing, so do your best to at least make interest payments to keep from having a larger balance.

It is important to know how much time after graduation you have before your first loan payment is due. Stafford loans typically give you six months. Perkins loans offer a nine-month grace period. Other loan types are going to be varied. Understand when your first payments will be due so that you can get on a schedule.

Millions of people have to put up with student loans to achieve their dreams. It is important however that anybody who is thinking about taking out a student loan be well-versed in how to understand the terms of one. Use the pointers in this piece, and everything can go much more smoothly.

Student Loans Repayment

(108)

Mar 292013
 

Going to college may be exciting, but it can be an intimidating time as well. You will be furthering your education and learning how to live. It is not easy for a young person to learn the skills of adulthood while learning a field of study at the same time. But that is the challenge of college life.

It is crucial that you make the effort to go to your classes on time. It can be hard to drag yourself out of bed, but it is necessary. You will find out soon that tardiness can result in a lower grade and lost learning time. Don’t let your professor see you in a negative light.

If you attend a community college for your first two years, you will save a great deal of money. You can get an associates in two years in your field of interest and then transfer some of your credits to a four-year institution in order to complete your bachelor’s degree. This will reduce the number of loans you must take out to pay for your education.

When buying or selling college textbooks on the Internet, do price comparisons between various websites. Make sure that you test all sites to get the best deal possible.

Eating meals on campus can help you save money. Eating all the time at restaurants or fast food places can really start to cost you financially and physically. Student meal plans are usually the best deal, even if the food is not top-notch. Get some healthy, cheaper groceries with the money you would spend on fast food.

College shouldn’t be scary! There is a lot of freedom, but you must make sure you stay on the ball with work. Remember that you are going to college to learn and become an adult.

Do not rely on notes from other students. You may have it in your mind that the person that wrote them is a fantastic student, but you really don’t know if they’re great at taking notes. Thus, you may be getting the short end of the stick.

Make good use of the campus gym. There are many people to meet up with to walk with or workout with. You will make new friends at the gym that you would not have met otherwise.

Hopefully after reading this article you have a better understanding of what college is all about and how to properly balance your life and studies. By using the tips from this article, you can succeed while you attend college. (172)

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