Financial Aid News, July 2007 Issue

A Publication of the Student Loan Network

This month, we investigate federal student loans, plenty of scholarships and new scholarship communities, and more. We've also got two new Facebook communities you can join:

• Scholarship Points on Facebook
• The Financial Aid Podcast Loyalists on Facebook

If you have comments or questions about the newsletter, please email me at: FinancialAidPodcast@GMail.com and I'll do my best to respond as quickly as I can. Please call our toll-free number at (877) 328-1565 if you have a specific question about how we can help you pay for college.

Christopher Penn, Editor
http://www.FinancialAidNews.com
http://www.FinancialAidPodcast.com

Featured SLN Announcement

Beat the certification rush! Colleges and universities tend to get swamped with Stafford loan certifications later in the summer - apply for a federal Stafford student loan today and beat the rush. Get your fall semester funding squared away now. Visit:

http://www.StaffordLoan.com

Featured Article: Federal Student Loan Overview

Federal student loans began more or less in 1965 with the Higher Education Act. Since then, they've become an industry in their own right. Some characteristics of federal student loans are that loan funds are sent to the school directly, students with drug offenses are not eligible for the loans if the offenses occurred while receiving federal aid, most federal loans require the FAFSA to have been filed, and most require you to demonstrate financial need.

There are three fundamental types of federal student loans - the Stafford Loan, the PLUS loan, and the Perkins Loan. Let's review each quickly.

First and foremost, to qualify for most federal loans, you must have filed your FAFSA.

The Perkins Loan is a 5% fixed rate loan which is awarded to students based on financial need. Perkins loans have no fees and a 9 month grace period, or period between when you're in school and when the first payment is due.

The Stafford Loan is a 6.8% fixed rate loan which comes in four types - subsidized or unsubsidized, and undergraduate or graduate. Stafford loans are by far the most popular of the federal student loans. Subsidized Stafford loans are loans in which the interest on the loan is paid by the government while you're still in school. Unsubsidized Stafford loans accrue interest while you're in school. There is a limited amount of funding available for subsidized Stafford loans, which is why it's important to file your FAFSA quickly at the beginning of each year. The difference between undergraduate and graduate Stafford Loans is mainly in loan limits. Graduate students, because of the cost of graduate school, can borrow more than undergraduates. Stafford loans also require no cosigner and no credit check. You can get more details at StaffordLoan.com

The PLUS Loan is an 8.5% fixed rate loan which comes in two types - parent and graduate student. Both types share rates and terms, but the graduate PLUS loan requires a FAFSA on file, while a parent PLUS loan does not. PLUS loans have no loan limits - you can borrow up to the cost of attendance. PLUS loans are also credit-based; while your credit score is not used, an adverse history with defaults, judgements, liens, or other significant negative credit events in your history.

Let's talk now about the process of getting a federal student loan. First and foremost, you need to have filed your FAFSA. Your school's financial aid award letter will detail how much of each loan you can borrow. Once you know that, you can apply for the Stafford and PLUS loans online at www.StaffordLoan.com, www.ParentPLUSLoan.com, or www.GradLoans.com, depending on which loan you want to apply for. Your application is received by a lender like the Student Loan Network, and your application is sent to your school's financial aid office for certification. The school effectively certifies that you're a student at the school and that you're borrowing the maximum amount you're allowed to borrow, and not more, as a way of protecting you from overborrowing beyond what you need to attend the school. Many schools certify loans differently - some certify loan applications as they come in, while others put them in a pile and certify batches at a time.

After the school certifies your loan, it's sent back to the lender for processing and funding. The lender then sends a check to your school's financial aid office, where they apply the loan proceeds to your account at the school. If all of the school's bills are paid, such as tuition, room and board, and other fees, then any remaining money is delivered to you by the school as a check or account credit for your use with miscellaneous educational expenses.

After school is over, repayment begins, in 6 or 9 months for Stafford or Perkins loans respectively. Most federal student loans have a 10 year repayment term. If you find that you have trouble making payments, you can apply for deferment, forbearance, or consolidation. Consolidation reduces your monthly payment. Deferment and forbearance are essentially pause buttons for your loan payments - interest continues to accrue, but you are not held liable for any payments while your loan is deferred or placed in forbearance. Deferment and forbearance must be applied for through the lender.

For an overview of student loan services, visit:

http://www.StudentLoanNetwork.com/apply

Last Words: Selections from Student Loan Network Experts

• Monique Leonard tackles the various legislative pieces currently being debated
• Brooke Rickard has a short case study of loan consolidation
• Katie Dexter addresses graduate school tuition for new grad students
• Kristin Popsie details student loan rate changes
• David Bonvie has some fun poking at common political campaign marketing
• Two from me. First, an opportunity to net a $10,000 bounty.
• And second, I just rolled out a miniseries on the basics of financial aid in a five part audio series. If you or someone you know needs a primer they can listen to, grab the Starter Pack from the Financial Aid Podcast.

Scholarships

Be sure you've registered for Scholarship Points, our free college scholarship awards site. Every 3 months, we draw 3 winners for $1,000, $500, and $250 scholarships. The next drawing will be July 2; winners will be announced on the Financial Aid Podcast. Visit:
http://www.ScholarshipPoints.com

We've also got a new scholarships community on Facebook. Join in the discussions there about how to raise money for tuition!

Join today for free:
http://www.facebook.com/group.php?gid=2356742560

• Apprentice Ecologist Scholarship
• Illinois Future Teacher Corps (IFTC) Program
• Richard A. Herbert Memorial Scholarships
• MIssouri Western State University Non-Traditional Student Scholarships
• Department of Homeland Security Video Interoperability Grant
• University of Tennessee, Knoxville, School of Journalism Alex Haley/Playboy Interview Scholarship in
• Common Knowledge Public Relations Scholarship
• Global Automotive Aftermarket Symposium Scholarship
• Swedish Institute Scholarships
• American Swedish Institute
• International Education Financial Aid Scholarship Search
• Graduate scholarship, fellowship, and grant directory
• Grand Valley State University Video Scholarships
• Seton Hall University Martin Luther King Jr. Scholarship

Remember, you can get daily scholarship updates by listening to the Financial Aid Podcast and visiting the Student Scholarship Search web site!

http://www.StudentScholarshipSearch.com
http://www.FinancialAidPodcast.com

A Word from our Sponsors

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http://www.FAFSAonline.com

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http://www.edvisors.com/about/employment.html

The Very Last Word

Missed an issue? Did you remember a scholarship but can't find the back issue? Want to tell a friend about the newsletter? You can always find back issues of the Financial Aid Newsletter at:

http://www.FinancialAidNews.com

The Student Financial Aid News is a publication of the Student Loan
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