Student Loan Debt
Student loan debt is extended to students to help them fund their college education. These loans, which are granted by a range of different sources have to be repaid with interest in the years following graduation.
These days, borrowing for educational purposes is commonplace. In the US, more than two-thirds of undergraduates use some kind of student loan debt to fund their education. And in 2005 the average amount borrowed per student each academic year was over $20000 (Stafford and/or Perkins Loans). This figure rises to $24000 if PLUS loans are taken into account.
Most student loan debt is repaid over 10 years (although it can be extended to 30 years if the debt is consolidated) and the interest rate is set annually on 1st July.
There are four types of student loan debt available to students in the US.
1) Stafford Loans
Also known as federal loans, these are granted by the federal government to students at approved educational establishments. Their course of study must be at least part time and repayment begins once they graduate.
The interest on the loan can take two different forms;
Subsidized: This means that interest on the loan only begins to mount up once repayment has begun. In other words, the student gets an interest free loan until they start to repay it.
Unsubsidized: Interest starts to accrue on the amount borrowed from the moment the money is lent. This option means that the size of the debt becomes larger than under the subsidized option. From July 2005, the interest rate on Stafford Loans is 5.3% during the repayment period.
2) Perkins Loans
Unlike Stafford Loans, Perkins Loans are granted by the education establishment that the student attents. Again, they must be at least a part time student and the institution has to be approved. The main advantage of these loans, it that the interest rate charged is slightly lower than Stafford Loans (around 5%).
3) Private Loans
These are offered by a wide range of banks and other lenders. And as you would imagine, the interest rates are higher (although different lenders charge different amounts) and the repayment schedule is not so generous.
4) PLUS Loans
Unlike the previous options, these loans are taken by parents to help with their child's education. Again the dependent child has to be enrolled at an approved institution and study at least part time. And this time, it's the parents who are responsible for repaying this student loan debt.
Students can apply for any of these loans, or even a combination of them, to help fund their studies. If they have a number of these loans, they can consolidate them into a single monthly repayment plan (usually at a lower rate of interest, but over a longer period). by Stuart Laing
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Student Debt And Finance: What You Need To Know
Whether you're already in debt, worried about getting into debt or looking for ways to minimise the amount of debt you accumulate, this page has been put together with you in mind. I know all about student debt from personal experience, my other half Louise and I met at University and it took us over 6 years after graduating to finally pay off our student loans. I did some quick research on the topic and it would appear that we were actually quite lucky. USA A recent study by the National Center for Education Statistics shows that about 50% of recent college graduate have student loans, with an average student loan debt of $10,000. The average cost of college increases at twice the rate of inflation; the College Board estimates that public school costs an average of about $13,000 a year and private schools costs $28,000. Parents will pay more, too. The rate on Parent Loans for Undergraduate Students, or PLUS loans, will jump to a fixed rate of 8.5%, from the current variable rate of 6.1%. Canada On average, bachelor graduates with student debt owed about $20,000 to all sources. College graduates owed almost $13,000. Most education debt was to government student loan programs: 41% of college graduates and 45% of bachelor graduates left school with government student loans. College graduates with debt to government student loan programs owed an average of $12,600 and bachelor graduates owed $19,500. UK The average student debt in England and Wales jumped 10% in 2003 as the costs of studying rose. The average student leaves higher education owing £12,069 through credit cards, bank and student loans, research by Barclays bank discovered. Average graduate debt has increased five-fold since 1994. Barclays warned that if the current trend continues average student debt could top £33,000 after a three-year degree by 2010. Taking Control: As with any problem or difficulty, the first step is to acknowledge that it exists and then look for ways to deal with it. If you are about to enter the adult student world, regardless of the type of degree, course or program you intend to do, your first port of call should be your country's education department website. It might not be the most interesting hour or so you ever spend but it could well be one of the most cost effective. If you don't know about all the possible financial assistance on offer, how can you possibly hope to benefit from it? Most colleges and universities offer hardship funds, don't be too proud to apply and make sure you know what else your particular educational establishment provides in the way of financial assistance, scholarships etc. Also don't bury your head in the sand, if you're are drowning in debt, get some advice on how to manage the financial situation you find yourself in. Most countries have free, impartial, non judgemental debt management agencies. For instance in the UK we have the Citizens Advice Bureau, which can help in such circumstances. Remember pride comes before a fall, so swallow your pride and seek the help that's on offer before you go completely head over heels. If you'd like to find out more about student debt and finance, you can do so by visiting http://www.all-about-forensic-psychology.com/student-debt.html Here you'll find links to the education departments of a number of countries including the USA, Canada, UK, New Zeland and Australia; as well as other links that offer free impartial advice. Having worked as a lecturer in psychology in the UK, I recently moved to sunny Spain with my family, where I now work as a distance learning tutor and research dissertation supervisor. Since 2000, I've been involved in collaborative research with teams of forensic scientists in the UK, US and Canada. To find out more about the fascinating world of forensic psychology visit my website http://www.all-about-forensic-psychology.com/ If you'd like to read more information from the world of forensic psychology you can subscribe to my free newsletter. Regular features will include an articles and links section, conference listings, student debt and finance advice, news from the field and study guide. http://www.all-about-forensic-psychology.com/forensic-psychology-newsletter.html
Items covered in this site:
A student loan debt consolidation loan allows you to combine your federal student loans into a
single loan with one monthly payment. The repayments of a student loan debt consolidation loan
can be significantly lower than the payment required under the standard 10-year repayment option.
For American students, the U.S. Government came up with a plan that can help a student manage
their student loan debt. The plan they came up with is called a Federal Direct Consolidation
Loan. It doesn't matter if you're a recent graduate student, well into your career already,
still at school, or in your grace period for repayment of a student loan. For any of those
student categories, a Federal debt consolidation loan may be applied for.
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