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Getting a Grip on Your Student Loan Picture

There’s really no secret on getting a grip on your student loan debt. It’s really all about getting the right information and acting on it.

It’s a good time to be looking for information, too. With the advent of the Internet, Google and real-time technology, getting your hands on the information you need is as easy as flipping open your laptop and firing up the World Wide Web.

It wasn’t always so. In 1805, news of the British Fleet’s victory at Trafalgar didn’t reach New York City for six weeks. Nowadays you might see 5,000 accounts of the battle and 50 web blogs dedicated to Admiral Nelson within six weeks.

So, thanks to the Information Age, where information is as much a commodity as vacuum cleaners or Viagra, we now have the most powerful weapon for learning right there at our fingertips, just seconds away from being absorbed by our minds.

Lessons On Loans

There are many different kinds of education loans, but they fall into two main categories: need-based loans, which are designed to help meet part of a family's remaining need (as determined by the federal government or your school); and non-need based loans, which are designed to help pay part of the expected family contribution when the family doesn't have the cash on hand.


The loans that will be offered as part of your aid package in the award letter are primarily need-based loans.

The best need-based loans (the federal Perkins and subsidized Stafford loans) are such good deals that we feel families should always accept them if they are offered. No interest is charged while the student is in school, and repayment does not begin on Perkins or subsidized Stafford loans until the student graduates, leaves school, or drops below half-time status. Even if you have money in the bank, we would still counsel your taking the loans. Let your money earn interest in the bank. When the loans come due, you can pay them off immediately, in full if you like, without penalty. Most loans with the exception of the Perkins loans have some kind of an origination fee (a one-time-only cost that averages about 3% of the value of the loan) and perhaps an insurance fee as well. These fees are deducted from the proceeds of the loan itself; you will never have to pay them out of your pocket.


Published Jan 16 2007, 02:36 PM by moneycoach
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