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Student Loans

As soon as I graduated college I wanted to know how to repay student loans quickly. I definitely didn’t want them hanging over my head. Another reason is that after the passage of the 2005 bankruptcy reform bill student loans are no longer fall under bankruptcy protection. In other words, if you go broke you still have to pay back your student loan. You would think that interest rates would be lower since the lender has more protection from bankruptcy.

If you are in the early stages of looking for a student loan before going to college be sure to look into alternate sources of student funding. Not to say that all schools may engage in bad behavior, but in 2007 Andrew Cuomo (Attorney General of New York State) investigated several schools that had preferred lenders. Most of these preferred lenders actually charged higher interest rates and were giving kick backs to financial aid staff.

There are also many different types of loans to consider for college. Even within the category of Federal Student Loans there are numerous types.

  • Federal Perkins Loan – Need Based
  • Stafford Loan – No payments while the student is in school. Can be unsubsidized which means you can have a loan not based on need?
  • Federal Family Education Loans – Private loans backed by the government

Lastly, it definitely is to your advantage to shop around and try to find the best rates for yourself. It could save you a large sum of money.

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3 Responses to “Student Loans”

  1. Johanne says:

    You mentioned very sensible advice especially regarding preferred lenders of some post-secondary institutions.

  2. Bob says:

    consolidating bills thru debt consolidation should be your first option and only if all else fails try bankruptcy.

  3. Henry says:

    Don’t forget to check out pell grants, work-study programs and school/community-based grants and scholarships.

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