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9 Ways to Managing Your Student Debt

With the increasing costs associated with attending college, more students are turning towards student loans. Financing college without borrowing any money can be a challenge today. Fortunately there are several ways in which students can keep their debt under control.

Apply for more scholarships and grants

Scholarships and grants do not need to be repaid. For students, the best thing to do would be to contact the financial aid office to ask for grants available, fill out the necessary forms and try to get as much grant as possible to reduce the need of depending entirely on student loans.

Understand your loan

Private loans today offer very low interest rates. However, some of them require students to start making payments as soon as the loan is taken. Federal student loans offer the lowest possible interest rates and have very flexible repayment options. Payments usually do not start until education is completed so they tend to be the better choice for students.

The grace period

For each loan, the grace period would be different so it is important to keep this in mind. For example, Perkins loans have a grace period of 9 months after graduation while Stafford loans have a grace period of 6 months. For private loans, the grace periods vary widely so contact the lender or check the paperwork to ensure you don’t miss the first payment.

Lower the interest rate

The interest rate on the loan will determine the amount to be paid in total. Rates may go down or up during the life of a loan and each lender will have different rules on which it will ultimately depend. If you have a lower interest rate, talk to the lender to lock it in when possible. All payments made will first go towards covering the interest and the fees of the loan and not the principal.

Lower the principal

Try to pay more than the minimum monthly payment required on the loan since it will allow you to lower the principal amount. This will ultimate reduce the interest that has to be paid on the loan. Send a letter along with the payment, asking the lender to apply the extra payment to the principal and not the future payments. Always keep copies of all extra payments sent to ensure they are correctly applied.

Expensive loans

If you have several different loans, consider paying extra towards the most expensive loan first. Private loans tend to have a higher interest rate so start with those loans. Paying them off ahead of schedule will allow you to save a considerable amount of money in interest.

Loan consolidation

If you have multiple loans that you’re struggling to manage and successfully pay each month, consider consolidating them into a single payment with a fixed rate of interest. There are several advantages and disadvantages of a loan consolidation so weigh them against each other carefully. Look for a fixed low interest rate and carefully read all the terms and conditions. Avoid consolidating federal loans in a private loan since you’ll then lose out on borrower benefits such as loan forgiveness and unemployment deferments.

Loan forgiveness

Several different programs will forgive part of or the entire federal student loan for those who work with certain employers or work in specific fields. Federal loan forgiveness programs are usually available for nurses, teachers, those working in public services, nonprofit or government organizations. Private, school and state loan forgiveness programs are also available.

Do not ignore the problem

If you are facing serious debt issues, do not ignore the problem. Stay in touch with the lender since they can work with you to help you find solutions to your problems. Serious debt problems can lead to several long term, severe consequences and it can also put your co-signer at risk. Consult a debt counselor if you cannot find a solution to your problem.

Important facts every applicant should know about online degrees

Online degrees offer a very flexible alternative to on-campus classes for those who are working or are busy parents. However, there are several things you should know about online education before you can decide if it is suitable for you:

Some online degrees are better than others

There are certain study areas that are more suitable for online learning than others. For example, if you plan to get degrees that would normally require a lot of practical study instead of theory, you would be better off enrolling in a traditional college. However, degrees in business, nursing and education offered by online schools are quite popular because they are easier to accomplish through online classes.

Class requirements

Many students choose to enroll in an online program because they think that these programs are easier and not as demanding as traditional classes. However, this is incorrect. In fact, online classes are just as demanding, sometimes even more than the traditional classes. Online education requires a lot of time commitment as well as discipline. In order to be successful, students often have to spend up to 15 hours a week for a single course. A typical course often requires a student to devote up to 6 hours of study after class each day. Students have to set aside time for assignments, tests and for reading.

Education format

In online degrees, education format is quite different than traditional classrooms. Students need a computer and reliable internet connection. Work is typically done at home or any other quiet location where they can complete their papers, written assignments and read. They need to take several online tests and quizzes throughout the year. These assignments are then graded and feedback is posted online for students. Students communicate with their instructors through email and participate in discussions with students online.

Accreditation

A large number of online degrees today are accredited. In most cases, regional accreditation tends to be most recognized. Online degrees offered by accredited schools are also accepted by most employers. Employers today consider online degrees to be just as valuable as traditional degrees. Students that want to transfer their credits or want to apply in a regular university will have no problems with their online degrees.

Federal loans and scholarships

If the school is accredited, there will be no problem for students to use government sources like federal loans and scholarships to fund their tuition fees for online degrees, just like traditional students.

Enrollment age

Perhaps one of the best things about online colleges is that they generally do not have an age restriction for enrollment. Students of any age can earn an online degree. In fact, an increasing number of seniors today are taking various degrees online for subjects they always wanted to learn.

Although online degrees were looked down upon initially, today the general attitude of employers and students towards online education has changed. With the flexibility, range of choice and affordability that online schools offer, it is a good alternative to traditional education.

Funding Your College Education

In USA, finding a way to pay for college is a big concern for many people who want to further their education. Everyone knows that a college education is not cheap, and many people graduate owing thousands in student loans. Annual tuition can run anywhere from an average of $8,000 to $30,000. Costs could be higher if student is from out-of-state or an International student.

Thankfully, there are ways to pay your college education that will leave you owing less money. Some creative graduates have even completed their education debt-free. While some of the options are not easy to access and are definitely not for everyone, they are worth trying. Following even one of the steps below can help you with paying for college.

Minimizing Student Loan Debt

It is possible to leave college without a lot of debt hanging over your head. The good thing is that you can start planning and working towards a debt-free college education while still in high school.

Advanced Placement (A.P.)

This is a great way for a high school student to earn college credits before actually going to college. This means that you will need fewer credits in college. Check with a few colleges to see if the courses you want to take in A.P. will count towards your major or general courses. This will help you decide which courses to take in Advanced Placement.

Of course, there are other ways such as taking some college courses while you are still attending high school. Taking online courses can build up college credit and you can even be exempted from some courses. Online study might also work for you since you won’t have to worry about expenses like transportation or accommodation.

Scholarship

Don’t feel that only the brilliant kids can get scholarships. Even students who don’t have the top grades can get scholarships and bursaries for college. The wide variety available will surprise you, but you need to search for them. Your school counselor will probably know about scholarships that you can apply for. One website that is very useful in helping people find suitable scholarships is FastWeb.com.

Accelerated programs

These kinds of programs help you complete college sooner than the normal three to four years. It does mean more school work, but if you are organized enough to manage the increased workload, this is a good option. The longer you remain in college the more you pay and the longer you will take to start working.

Working While Studying

This is an age-old method of paying for college. Again, it is not for everyone as some people will not be able to juggle a job and schoolwork. However, if you know how to manage your time, you can work your way through college. You will end up with less debt after completing your studies.

Finally, after you graduate, think about programs that can help to shrink your student loan debt. One of these is the College Cost Reduction and Access Act of 2007 for full-time public service workers. If you have ever thought about working for the government, you should explore this option.

Choosing the Right College

Depending on the college you choose, you can significantly reduce the cost of your education. Some people apply only to big name schools, overlooking great colleges that charge lower tuition fees. They also avoid community colleges which are cheaper than traditional colleges, even though they offer similar programs.

With the right approach and some planning, it is definitely possible to leave college without a huge debt hanging over your head. For those who have the right grades and students who are willing to work hard, it is possible to go through college almost for free.

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