President George W. Bush Speaks On The Brewing Student Loan Crisis

In his weekly radio address, President Bush spoke about the brewing
crisis in the student loan markets. WATCH VIDEO

In his address he mentioned the “Lender of Last Resort Program” for
student who cannot secure funding for college. He further mentioned
the need for the ability of the govenment to step in and buy the loans
when necesarry to provide liquidity to the system.

He also signaled to the Senate get something started, as the House of
has already passed the ”Insuring Continuing Accessing Student Loans
Act” and the Senate has yet to act on the issue.

The Presdent would need a bill on his desk, before June 1, 2008 to avoid
any major problems with loans for the September Semester.

Affordable Student Loans Need a Deferment Period

Going to college takes a bunch of money these days! Invariably, most students end up with an amount due after their graduation and this amount will be more than the original borrowed amount. This is due to the fact many student loan include a deferment period. After all, how affordable would a student loan be if the student had to come up with monthly payments while he was in college?

This article talks about the student loan deferments and how they affect the bottom line. Namely, how much the student will be liable for after his education.

What is a deferment period?

When student loans are made, the first payment will not be due until after graduation or until the student quits school. This means the student can spend 4 years in college, graduate, get a job and then start paying back the loan.

One aspect of this type of loan that cannot be overlooked is during the deferment period the loan is accumulating interest. This means a loan of $20,000 can become $30,000 by the time the student starts to pay it off. This is a dirty deal, but it comes under the heading, “there is no such thing as a free lunch.”

The difference between a straight loan and a deferred one

Let’s look at how this works. If a person takes out a regular loan for $20,000 at 7% for 7 years, or 84 payments, and he is going to start paying on the first month, his payment will be $301.85 each month.

If a person takes out a deferred student loan for $20,000 at 7% for 7 years, or 84 payments, but the first payment isn’t due for 4 years, the total amount owed will have become 2,6441.08 by the time the first payment is due and the monthly payment will be $399.07. So, this is another wrinkle the student has to contend with to get that ever-important sheepskin.

It is important to get an accurate idea what the payments will be after graduation, you have to use a student loan calculator that includes an entry for the deferment period or else you won’t be getting the actual amount owed or monthly payment due when the payback period begins.

Another example

Let’s take another example. The student gets a loan for $35,000, which has a 10-year payoff period. The payments start after a 4 years and the interest rate is 7%. Here’s the way the numbers look for this loan. When the payments come due the total loan will have ballooned to $46,271.89 and the payment will be $537.26.

Now let’s complicate things a little more. The student may have to take a separate loan for each of the years he is in school. The lender may allow different deferment periods for each loan. So, he may end up with $20,000 deferred for 4 years, $20,000 deferred for 3 years, $20,000 deferred for 2 years and well, you get the idea.

In short, when dealing with student loans, don’t forget the deferment aspect to it. It can make a huge difference in the final numbers.

Affordable Student Loans Need a Deferment Period

Going to college takes a bunch of money these days! Invariably, most students end up with an amount due after their graduation and this amount will be more than the original borrowed amount. This is due to the fact many student loan include a deferment period. After all, how affordable would a student loan be if the student had to come up with monthly payments while he was in college?

This article talks about the student loan deferments and how they affect the bottom line. Namely, how much the student will be liable for after his education.

What is a deferment period?

When student loans are made, the first payment will not be due until after graduation or until the student quits school. This means the student can spend 4 years in college, graduate, get a job and then start paying back the loan.

One aspect of this type of loan that cannot be overlooked is during the deferment period the loan is accumulating interest. This means a loan of $20,000 can become $30,000 by the time the student starts to pay it off. This is a dirty deal, but it comes under the heading, “there is no such thing as a free lunch.”

The difference between a straight loan and a deferred one

Let’s look at how this works. If a person takes out a regular loan for $20,000 at 7% for 7 years, or 84 payments, and he is going to start paying on the first month, his payment will be $301.85 each month.

If a person takes out a deferred student loan for $20,000 at 7% for 7 years, or 84 payments, but the first payment isn’t due for 4 years, the total amount owed will have become 2,6441.08 by the time the first payment is due and the monthly payment will be $399.07. So, this is another wrinkle the student has to contend with to get that ever-important sheepskin.

It is important to get an accurate idea what the payments will be after graduation, you have to use a student loan calculator that includes an entry for the deferment period or else you won’t be getting the actual amount owed or monthly payment due when the payback period begins.

Another example

Let’s take another example. The student gets a loan for $35,000, which has a 10-year payoff period. The payments start after a 4 years and the interest rate is 7%. Here’s the way the numbers look for this loan. When the payments come due the total loan will have ballooned to $46,271.89 and the payment will be $537.26.

Now let’s complicate things a little more. The student may have to take a separate loan for each of the years he is in school. The lender may allow different deferment periods for each loan. So, he may end up with $20,000 deferred for 4 years, $20,000 deferred for 3 years, $20,000 deferred for 2 years and well, you get the idea.

In short, when dealing with student loans, don’t forget the deferment aspect to it. It can make a huge difference in the final numbers.

The parent’s role on the students’quest for federal loan assistance

A couple decides to get married and then proceeds to have children. Each one of their children will require sustenance, divertimento, and education. It is of this latter part than most parents will devote endless white nights trying to make the right decision and provide their offspring with the best possible education available.

Despite the fact that most basic education begins at home, when parents strive to teach the children the basic rules of moral, ethics and acceptable social behavior. As soon as they grow older and the natural anxiety of the children begins to overwhelm them with needs of exploring the world for themselves as well as their own need of a higher education, parents see themselves relinquished into the background and often shushed.

Even when shushing parents is a regular and quite standard situation amongst all half grown up children since the beginning of teen hood and way deep into adulthood parents should remain present along the way. At least until the child has finally finished his or her schooling and achieve a degree, diploma, certificate or whatever it is that his or her chosen profession issues to the fully prepared professional.

Of course, none of this is easy and it requires additional levels of patience both from the side of the child as from the side of the parent.

This is ever more so evident when the child reaches the high level of education requirements.

Most households realize that their children are already grown up when the need for the child to present his or her applications to the different universities comes. When they realize, in no low degree of horror, that even with all the warning of the years behind, they did not prepare and did not consider the possibility that the child would require them to enter a high-cost educational institution.

As a result, the child might perceive that his or her dreams of a successful and fruitful life have come crashing down and that there is no more hope to revive them. Even if this is not entirely true. In turn, the relationship between parents and children will grow tenser until it bursts in constant quarrels and discussions with the evident death.

The destruction of the family is not a laughing matter. Years of cruel and unbelievable events such as Columbine, Virginia Tech and the like have proved that family life is the angle stone on which most of society’s problems are emerged and counteracted.

The Student Loan Market Hits the Wall

Student loans - those of us who have them would love to get rid of them, and now, those who want them apparently can’t get them.

The credit crunch has now started hitting the student loan markets, and what used to be a no-brainer prospect - financing your secondary education - is becoming as difficult a proposition as qualifying for a mortgage. The split in the analogy, though, is that while housing prices are cooling to the point where a perfectly qualified mortgage applicant can get a really nice deal on a home, tuition prices are as predictably high as ever.

When I was your age, student loan money grew on trees, and all you had to do was pick up a wheelbarrow and stand under one, and wait for a gentle breeze to blow loose those thick, ripe wads of tuition dollars onto the ground. We would laugh and play and cavort in piles of the stuff as the sun dipped below the horizon, then we would pack our harvest into our carriers and stroll off to our college campuses, our bellies filled with hopes and dreams.

Well, okay, so it wasn’t as easy as that. But compared to today’s circumstances, it certainly feels that way.

The root of the problem is this - so many student loan companies have left the industry, either by choice or by just going bankrupt, that the universe of options for financing your college education is much narrower than it was before. In fact, the only big player in the game is now Sallie Mae, which, by virtue of being big, survived the current crisis (brought on by the effects of the subprime collapse, the credit crunch, and a reduction in federal subsidies to student lenders) but is presently losing money on its loans, and is threatening to stop writing federally-backed loans altogether.

If you are to believe Sallie Mae, their loan demand is running at 3 billion dollars a month, and the company has access to only 1 billion dollars in high-cost funds. All of this points to a potential crisis in student loan availability this summer, as students prepare to enter college. There are some horror stories out there about people who are already well into college who had their loan checks bounce as the new semester began.

The implosion of the student loan market not only affects people just starting college and post graduate studies, it also affects people who have already graduated. One of the best things that you can do after graduation is student loan consolidation - it tidies up your loan payments and locks you into a lower interest rate. But now, most lenders, even Sallie Mae, have exited the federal student loan consolidation business, thus removing one of the most viable options for new graduates who are coping, many for the first time, with the demands of budgeting and money management.

I’m not sure how helpful I can be here, other than to wave the red flag and warn everyone who is planning on attending school in the fall and not thinking too heavily about loan availability. For most high school seniors, setting up financing is probably the last thing on their minds right now, and they’re probably relying on their parents to do a lot of the legwork for them. For parents, they may still be thinking that student loans are as easy to obtain as they were, oh, about 12 months ago, and don’t realize how badly impacted the student loan market has become.

Do someone a favor - if you know someone who is planning on going to college this year, or have a coworker whose son or daughter is in such a situation, let them know about the crisis in student loan availability, and tell them to get cracking on it earlier than they would have otherwise.

salliemae Finding a loan - Loans for graduates

Loans for graduates

Wondering how to finance graduate school? You have more options than you may think. Sallie Mae offers loan programs to help graduate students fund their higher education.

Begin your grad school career with Sallie Mae. Our borrowers enjoy a variety of repayment plans, low interest rates, and competitive fees.

• Understanding student loan types
• Comparing student loan options
• Graduate student loans
• Business school loans
• Law school loans
• Medical school loans
• Dental school loans
• Consolidation loans
• International student loans

salliemae Graduate student loans

Graduate student loans

Graduate school is a significant investment for any student. Sallie Mae offers graduate student loan programs to help students achieve their higher education goals.

Federal student loans

Federal student loans, which include Stafford and Graduate PLUS loans, are often the least expensive way for graduate students to borrow. Students should first exhaust their federal Stafford loan eligibility and then consider the Graduate PLUS loan to help cover unmet costs.

Private student loans

For students who do not choose a Graduate PLUS loan to help them meet additional expenses not covered with Federal Stafford and other aid, Sallie Mae also offers private graduate student loan programs with competitive rates and fees as well as great repayment benefits for graduate students attending

• dental,
• business,
• law, or
• medical schools.

In addition to these specialized student loans for graduate school students, we also offer the

• Signature Student Loan^® and
• Tuition Answer Loan^®

as additional private loan alternatives to help fund your graduate degree.

salliemae Graduate student loans

Graduate student loans

Graduate school is a significant investment for any student. Sallie Mae offers graduate student loan programs to help students achieve their higher education goals.

Federal student loans

Federal student loans, which include Stafford and Graduate PLUS loans, are often the least expensive way for graduate students to borrow. Students should first exhaust their federal Stafford loan eligibility and then consider the Graduate PLUS loan to help cover unmet costs.

Private student loans

For students who do not choose a Graduate PLUS loan to help them meet additional expenses not covered with Federal Stafford and other aid, Sallie Mae also offers private graduate student loan programs with competitive rates and fees as well as great repayment benefits for graduate students attending

• dental,
• business,
• law, or
• medical schools.

In addition to these specialized student loans for graduate school students, we also offer the

• Signature Student Loan^® and
• Tuition Answer Loan^®

as additional private loan alternatives to help fund your graduate degree.

About GradLoans.com

Who we are:

GradLoans.com, is a service of The Student Loan Network, a multi-national education services company offering students options for managing the entire education life cycle, from getting into their college of choice to financing their education and beyond. The Student Loan Network is based in Quincy, Massachusetts, United States of America, with offices in Quincy and London, England, and has been in business since 1998.

See our Better Business Bureau profile online!

About Our Graduate Student Loans

Our graduate student loan products have the backing of the most trusted names in the student loan industry. Our loans are backed by PNC Bank, a Member FDIC and Equal Opportunity Lender, and guaranteed by The Education Resources Institute, Inc., a non-profit guarantee agency trusted by schools, programs, and families worldwide.

To Apply, Online, Fax, Phone, or Mail:

The Student Loan Network
1250 Hancock Street, Suite 703N
Quincy, MA 02169

Management Team

Corporate Responsibilities

Employment Opportunities