Today student loans are almost a given for college kids heading off to school. Few parents have the financial resources to pay all of the tuition for their children, and so most students fill out a FAFSA and apply for loans. This has not always been the case, however. Student loans are quite a modern invention.
The first recorded student loan program was developed by Harvard University in 1840. These early student loans were private loans that were not funded by the government. In 1935 the state of Indiana's General Assembly passed a law that provided student aid to students who had high test scores on their college entrance exams. This led to the formation of the Indiana State Financial Aid Association, or ISFAA, which was followed by the opening of the first Financial Aid office in Indiana University. Soon other colleges joined the ISFAA, and Indiana students had a new way to pay for school.
On October 4, 1957, Russia launched the first successful satellite into space. This had a huge impact on the history of financial aid in America, because the American government suddenly realized that they were in a race to put the first person in space. They realized that they only way to succeed in this race was to ensure that as many high school graduates as possible attended college, a feat which was out of the financial resources of many. With guidance from the ISFAA, the federal government created a working financial aid program.
After World War II, Congress passed the National Defense Education Act. This act introduced the Perkins Loan, a low-interest student loan that is provided to low-income students and has a 10-year repayment period. This was the first federally backed student loan, and more would soon follow. In 1963 the Health Education Assistance Act provided loans for students pursuing degrees in medical and health fields. This was followed by what is now known as the Federal Work-Study Program, a program that allows the federal government to pay the wages of working students.
By the end of 1965, Most of the student loan programs we use today, such as the Stafford Loan, Work-Study Program, and Perkins Loan, were in place. As the cost of education continued to rise, the government introduced the Parent's PLUS loan program in 1981, a program that allowed higher-income families to get assistance in paying for school. Today, these loan programs allow many students to pursue an education when they would otherwise be unable to, making them a valuable resource to our country as we strive to continue as a global leader.
Home > Archives for July 2009
How Student Loans Came To Be
The Great Student Loan War
There is currently a great schism going on in the student loan industry - a war if you will. The question is how funds will be allocated and who will benefit.
For such a noble purpose, the student loan industry has certainly had an overtone of negativity. It is a highly profitable business to be in and competition has resulted in many scandals. The question now is whether the entire system needs to readjusted or not. In the opinion of President Obama, it does. The banks in the industry feel the opposite.
To understand the war underway on student loans, you first have to understand a key factor in how the government promotes their use. As with many financial tools, the government does not primarily give money directly to students. It does a bit, but mostly subsidies the lenders to make sure there is money on the market. This is a hugely profitable situation for lenders.
President Obama has noted that it ends up costing taxpayers far more to use this middleman process versus just making direct loans to students. Some estimates put the cost of using lenders at roughly $9 per $100 loaned versus a cost of less than $2 per $100 lent with direct loans. With this in mind, President Obama wants to end subsidies to lenders and reconfigure the scenario to a situation where loans are made directly to students.
As you can imagine, the banks and lenders are up in arms over this. They face the loss of their golden goose and are hiring lobbyist right and left to fight the measure. There is really no good reason for the subsidies, so the banks have fallen back on the claim that the new approach will cost jobs. Sallie Mae went so far as to pull back 2,000 jobs it had sent overseas to show how concerned it was. Of course, the company didn't really get into the fact it had sent those jobs overseas in the first place, but there you are!
The student loan plan of President Obama is expected to save between $90 and $200 billion dollars if he can get it passed. That money is earmarked to be converted into direct loans to students. In short, the question is whether we should give the money to the banks or to the students. I know where I come down on that one.
Private Student Loan Consolidation, Is There A Best One?
Private student loan consolidation cannot be generally mixed with federal student loans due to the low interest rate on the latter. However, there are several options open to refinance the private student loans by replacing them with another.
The main advantage of doing this is that instead of making several monthly payments, only a single payment is made every month that may be reduced although this will cost one in terms of higher interest amount paid because the single loan may be for a longer period of time.
There is a way to secure a lower interest rate. The private student loan is based on the credit score. If the credit score has improved by 50 to 100 points due to the fact that you have graduated and have a job, then you will be rewarded with a low interest rate.
Another way of getting a better deal when considering a private student loan consolidation is to talk to the holders of your debts. They may be willing to negotiate with you and cut down your interest rate so that they can keep you as their customer.
This type of loan also incurs the same interest that the home equity loan has. You can have a home equity loan at a fixed rate, thus locking in the low interest rate. However sometimes a variable rate looks attractive as long as you can watch it and lock it the moment it is on an upward trend.
Study carefully the terms of the agreement. Find out if the interest rate is variable or fixed. Ask also about fees and if there are prepayment penalties. Find out how much they are for each of the following lenders. Write them down so you can get the best deal from among the following list and whatever other companies willing to do the private student consolidation loan with you:
Key Education Consolidation Loan - $75,000 maximum for non-key debt, $7500 minimum, 10, 15, 30 year repayment term, no prepayment penalty and no fees
Citi Student Loans - $75,000 maximum, $7500 minimum, choose fixed or variable rate, up to 30 year term rate, rate reduction after 48 monthly on time payments, no prepayment penalty
Study carefully the terms of the agreement. Find out if the interest rate is variable or fixed. Ask also about fees and if there are prepayment penalties. Find out how much they are for each of the following lenders. Write them down so you can get the best deal from among the following list and whatever other companies willing to do the private student consolidation loan with you:
Key Education Consolidation Loan - $75,000 maximum for non-key debt, $7500 minimum, 10, 15, 30 year repayment term, no prepayment penalty and no fees
Citi Student Loans - $75,000 maximum, $7500 minimum, choose fixed or variable rate, up to 30 year term rate, rate reduction after 48 monthly on time payments, no prepayment penalty
Study carefully the terms of the agreement. Find out if the interest rate is variable or fixed. Ask also about fees and if there are prepayment penalties. Find out how much they are for each of the following lenders. Write them down so you can get the best deal from among the following list and whatever other companies willing to do the private student consolidation loan with you:
Key Education Consolidation Loan - $75,000 maximum for non-key debt, $7500 minimum, 10, 15, 30 year repayment term, no prepayment penalty and no fees
Citi Student Loans - $75,000 maximum, $7500 minimum, choose fixed or variable rate, up to 30 year term rate, rate reduction after 48 monthly on time payments, no prepayment penalty
Educated Borrower Private Consolidation Loan - $300,000 maximum, $7500 minimum, up to 30 year repayment term, no prepayment penalty and 0 to 5% origination fees
Sallie Mae Private Consolidation Loan - $275,000 maximum, $5000 minimum, 15 to 30 year repayment term, choose between fixed and variable rate, no prepayment penalty and no fees
SC Student Loan - PAL Consolidation Loan - $150,000 maximum, $5000 minimum, 10 to 30 year repayment term, choose between fixed and variable rate, no prepayment penalty and no fees
Next Student Private Consolidation Loan - $300,000 maximum, $7500 minimum, up to 30 year repayment term, no prepayment penalty and 0 to 5% origination fees
Make sure when you are considering to go this route that you clarify all the terms of the agreement as the above may have changed and that all are put in writing and signed by both parties. The best one is the one that fits your needs. There you have some of the possible lenders and the other options when considering to do the private student loan consolidation.
UK Financials Ltd Introduce Loans for non homeowners - Simple cash despite being non homeowners
UK Financials Ltd Introduce Loans for non homeowners - Simple cash despite being non homeowners
Loans for non-home owners are the loans for those who don’t own their own house and stay as a tenants in other’s house by paying rent. Are you a non home owner, council tenant, renting or living with your parents and going through from cash crisis? Non homeowner loans could be the perfect financial solution to opt for as you can get easy external funds with ease without any hurdles in the application and approval. These loans gives you fast access to the cash you need at highly competitive interest rates. It arranges you simple and hassle free cash with mere hassles. You can use the borrowed amount for any of the purpose like home improvements, debt consolidation, new car, dream holiday, cosmetic surgery or a deposit on your first home.
Non homeowner unsecured loans are offered to the populace without collateral. Hence, by taking this loan assistance, the borrowers are allowed to enjoy complete redemption from making arrangement for submitting security against their loan demand and this probably stand as the most popular reason for which people like to opt for this loan plan. Moreover, as no property or valuable asset is provided by the borrower, no time is wasted in assessing its value and clearing the clause of collateral verification. In fact, it even facilitates the processing mechanism of non homeowner unsecured loans and allows the borrowers to have the advantage of securing a good amount of funds in the shortest possible duration.
Nowadays, securing non-home owner loans has become quite easy with non-home owner debt consolidation loan. A chance is provided to the non-home owners now by charging lower interest rates in these loans. They are made to pay only the principal amount and a single monthly bill. Apart from this, the borrower has now to deal with a single lender instead of so many of them. This saves a lot of time and the paperwork of borrowers. Also, there is an advantage in this type of loan as this is an unsecured one. This in turn, means that now you don’t have to offer collateral such as land, house etc. The lender after duly analyzing your repayment abilities asks the applicant to supply details of his income and other personal information. Thereafter, they provide you with the non-home owner debt consolidation loan which re-establishes your credit ratings in the market. Acting on the advice of your lender, you can thus get loan on easier terms in the future.
UK Financials Ltd has years of work that he has put in the finance industry; we are expert in financial matters. We can arrange such loans for you in the least period of time by following less paperwork. You can get the easy loans service which is completely online and takes your few minutes to get applied with. Undergoing financial crisis is a worst issue with being a tenant and thereby you will face difficulty in getting the loan service, these loans are exclusively made for non-homeowners in order to empower them to solve their financial crunch and fulfill their all-personal wishes. You don’t have to face any risk of pledging your collateral as security. No credit checking is concerned therefore all the borrowers are welcome to avail quick funds. Online application removes all the hassle of faxing the documents and extensive paper works which usually involves lots of wastage of time and efforts. These loans are offered at flexible rates and come with the time elasticity.
Requirements:
Homeowner unsecured loans helps acquiring you quick cash with quick and without hassle by qualifying the following terms and conditions:
1. The applicant should be having a legal age of eighteen years or more.
2. Borrower should be a UK resident and hold a permanent residential address in UK itself from the past twelve months.
3. Candidate should be a salaried employee earning steady source of income so that will be able to repay back the loan money on time within the stipulated period of time.
4. He should earn at least the minimum of £1000 per month.
5. The applicant should possess a valid and active checking account which should not be more than three months old and should be under the name of the borrower.
UK Financials Ltd is one of the UK's fastest upcoming finance broker - we have successfully arranged hundred of loans for non-homeowners throughout the UK.
UK Financials Ltd Introduce Unsecured Loans For Unemployed Also Unsecured Loans For Tenants And Non Home Owner
UK FINANCIALS LTD introduce unsecured loans for unemployed also unsecured loans for tenants and Non Home Owner: Raise Funds Easily with Cheap Unsecured Loan
Say farewell to all your worries with easy funds
Unemployed people can access financial demands at anytime with unsecured loans for unemployed. These loans helps revitalize the life of the unemployed by getting the best support in their deserted life and with that they can feel ecstasy inspire of being an unemployed and can live their life with pleasure. For the non homers, the filling of the unsecured loans is important if one craves to rent their respective homes, whether its housing association, the private or the council. Most of the times, it is difficult for the private tenants or council tenant to file for the unsecured home loans if they are living with their parents or what to give their house on rent. There are several hindrances which are created for the applying for the unsecured loans and these are the country court judgments, the missed payments, the rent arrears and the defaults. At times, these hindrances are more problematic. Thus, the entire concept of the unsecured loans for the home owners emerged to give financial assistance to the populace.
Usually, people without employment are against using their home as security against loans, they prefer unsecured loans which do not need any collateral. As secured loans are always risky for borrower similar is the case with lenders when they offer an unsecured loans. As an unemployed, you may be on any government support, income, benefits, or any other living allowance, it will be considered your total income. Now, the loan amount in loans for unemployed is decided on the basis of income support that unemployed person might be getting. Also, the loan amount is decided by lenders after they decide about the repayment abilities of the borrowers. However people of U.K. can get a personal loan of around £1,000 to £15,000. Rate of interest is usually cheaper, in order to help the unemployed borrowers. Rate of interest for loans for unemployed usually typically vary from 7.9% APR Variable to 19.9% APR Variable. However, it is advised that borrower take care of the repayment term if not supported by any fixed income. For unemployed borrowers, flexible repayment term is considered better than that of fixed one. Anyway lenders are lenient to the unemployed and generally charge no or less penalty for repayments.
Unsecured loan for tenant is now easily available; in fact they are available at a lot less hassle than when people used to put up property as collateral. The unsecured loans for tenants cover a wide range of offerings such as payday loans, loans for individuals who are receiving benefits and even for the unemployed. A thing to bear in mind while you opt for an unsecured loan is that since the bank is not getting any security from you for the money you borrow, you are likely to pay a higher interest rate. That being said, there is such great competition in the financial sector and lenders are locked in such neck and neck competition that you’ll be seeing things more in your favor than against you. One of the chief requirements for availing the feature of the non home owner loans is that they should meet with the requirements and should be more than eighteen years of age. At the same time, it’s necessary to have a bank account for availing the loan. At the same time, different kinds of tenants can apply for the non home owners’ loan which includes those who are living with friends, family members, the parents and the council tenants. Some of the reasons for which the unsecured loan non home owner is passed are the medical purposes, the debt consolidation and the home improvement plans.
If you are unemployed and needs money for different expenses, loans for unemployed is most suited for you. However, the advice is to be judicious to select the UK FINANCIALS LTD witch suits your needs and workout the suitable repayment term for yourself. Be ready to have all the pleasures of life weather it be purchasing a car or planning a weekend trip because your unemployment can’t stop you from all these any more. Apply unemployed unsecured loans from UK FINANCIALS LTD & get you the fast cash advance without hassle of lengthy documents and extensive paper works removing the stress. These loans are the ideal solution of your current standing of unemployment. These loans are very helpful and easy to avail via internet. No matter whether you have bad credit or good credit, you can also get the benefit of these loans. It helps to fulfill all your needs to a great extent without any obligations.
UK peoples can also apply for unsecured loans for tenants and Non Home Owner. UK FINANCIALS LTD can provide these loans to the tenants having a poor credit record. They need not pledge any asset with the lenders even if they are having the bad records like CCjs, bankruptcy, delayed payments, etc. To conclude, unsecured loans for tenants are the specially customized loans for non-homeowners (the tenants) and therefore offer multiple benefits to the tenants. You are not required to submit any documentation along as it is a no faxing procedure. With in the duration of 24 hours you receive call from customer care executives who after the verification of the details furnished in the form approves your loan instantly. And, the money is debited to your personal banking account.
UK FINANCIALS LTD can be the best solution for your need. Applying unsecured unemployed and Tenant Loan online from UK FINANCIALS LTD is the instant and most convenient way. Ravi Mishra is associated with loans, he is a senior author in loans where visitors can get useful information and apply for any type of loans online. For further information about unsecured unemployed and Tenant Loan visit http://www.ukfinancials.com
UK Financials Ltd,
501, International House,
223 Regent Street, London - W1B 2QD
0203 051 4841
Loan Officer Sales and Marketing Plan Targets First Time Home Buyers
The housing market, combined with the recent tax incentive, has created a new target audience for Realtors and Loan Officers. The need for a sales and marketing plan to address education, building relationships, and communication will generate increased business for the Loan Officer and Realtor to provide assistance to first time home buyer.
The housing downturn has created significant demand for homeownership, especially among first-time home buyers (FTHB), according to a survey on Realtor.com. That is great news for the real estate market, but there are some significant challenges that Realtors and Mortgage Professionals will face.
First challenge: Looming Deadline with NO PLAN
November 30th, 2009 is the date the tax credit goes away. That's 5 months from the day this article was written, which seems like a long time but the reality is that it will be here before we know it. Those who plan on taking advantage of this opportunity need to have a well thought out, fool-proof plan to execute. The sad reality is that people have been/were so busy with refinance business that they didn't have time to build a plan. Others are starving for direction and want a plan but don't have the "know-how" to build one. A strategic sales and marketing plan includes tactics that keep your plan within the necessary timeline.
Second challenge: Weak Relationships
FTHBs are tricky and require a strong relationship and good communication between the Realtor and Loan Officer. As a result of the recent low interest rate environment or "mini refi-boom, mortgage companies focused much of their efforts and time on capturing the refinance opportunities, not building relationships with Realtors. The result: many Realtors were left unattended. Relationship marketing tactics are needed to generate a successful partnership to meet this challenge.
Third challenge: Weak Value Propositions
Everyone knows that Loan Officers need to partner with Realtors but the question is , "why would they partner with you?" Good service and low rates are overused clichés and don't differentiate. Relationships are great, but at the end of the day the relationship needs to lead to "value creation" for both parties for it to be sustainable. A sales marketing plan will outline the strategy needed to create value for the Loan Officer and Realtor.
Fourth challenge: Education Gap
The Obama administration is hoping that a recently enacted tax credit can generate housing demand and help mop up the existing unsold inventory. But according to a survey by Move, Inc.--which operates Realtor.com--nearly half (47%) of home buyers don't even know the tax credit exists! A marketing communication plan is needed to target the first time home buyer educating them about this tax incentive.
Fifth challenge: Fear in the Marketplace
-52% of Americans are concerned that they or someone they know will face foreclosure in the next six to 12 months.
-18.9% (one out of five) of homeowners plan to take advantage of the administration's new program to help prevent foreclosures.
-21% of all homeowners with a mortgage contacted a lender to restructure their loan in the last 12 months.
-Half (10.6%) of those homeowners that contacted their lender experienced success while 5% still await an answer.
-27.1% of adults believe that they or someone they know may default on their mortgage because of unemployment or because they owe more on their home than it's worth.
I won't even begin to mention the media's contribution to this fear. The reality is that people are scared and need guidance. The question is , "who will they trust?" They will trust those whom they have a strong relationship with and/or those who have unshakeable credibility. To meet this challenge create a marketing plan that brands you as experienced in your field and a knowledgeable professional that can be trusted.
The good news in all of this is that there is a ton of opportunity out there. Take a look at the statistics of when Americans are planning on buying:
-23% of all adults plan to purchase a home in the next five years
-5.8% within next 12 months,
-12.8% within the next two years
Here is the opportunity -
First-time Home Buyers make up over half (53.5%) of the market, and the government is offering them an $8,000 tax credit to purchase a house. But here's the kicker: 47.6% of Americans don't know about the tax credit! That's almost half the American population! What this means to you is that a lot of people want to buy a home in the next 12 months and most of them are FTHBs who aren't even aware of a huge incentive ($8,000 tax credit).
Okay, so now you see the opportunity, and the question that should be going through your mind is, "how do I maximize this opportunity given the challenges outlined above?" Great question!
It is for this reason that The Million Dollar Challenge was created. The Million Dollar Mortgage Challenge is a call to action for Loan Officers to partner together with Realtors in helping First Time Home Buyers receive $1,000,000 in tax credits. It provides sales and marketing plan information that will produce the desired results for the Loan Officer, Real Estate Agent, and the home buyer.
