Yielding Mutual Benefits by Strategically managing Student Loans Debt

After a BA in economics in 1994, White managed to finance the degree through scholarships and work-study, running a debt of $6,000 in student loans. Working in a nonprofit housing agency in Philadelphia followed for three years after which she enrolled at Clark Atlanta in 1997, heavily depending on loans for living expenses. By the time she got her MBA her student loans debt rose to $50,000. Without a doubt costs of higher education are skyrocketing. If the last two decades are any indication, the price of two and four-year public and private colleges are exceeding inflation and family income. Last year the average tuition and fees for four-year public colleges increased almost thrice as fast as the national inflation rate.
Thus, students of all economic levels are compelled to borrow for financing education. The time is ripe for getting the better of your debt with interest rates for Federal Stafford Loans at an all-time low. The debt incurred for education should be seen as a major investment in oneself.
An example of the benefits of investing in education is Fern Williams White, 31, a 1999 graduate of Clark Atlanta University with an MBA in finance. As account associate for an Atlanta financial services firm, her salary has doubled thanks to the degree.
White got her student loans bills under control shortly after graduation by consolidating all her Federal Stafford Loans. In place of the five payments to separate lenders her monthly payment is now $391 with a saving of $150 a month.
Her consolidated Stafford Loans amount to $280 with a fixed interest rate of 7.375% over 20 years. The remainder goes into a private.
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How to Reduce the Origination Fee for Student Loans

A loan origination fee covers the cost incurred by the lender in the process of issuing your loan. This may include paying a loan agent, filing paperwork with the county or simply printing and storing documents. It is not typically possible to completely eliminate the fee. In fact, even low-cost federal loans carry an origination fee up to three percent. However, there are some things you can do to reduce the fee on your student loan so you owe less money up front on your new loan.
Prepare Applications Diligently
If you have problems with your application, you may need to resubmit them. Frequent problems include having the wrong Social Security number or wrong phone number. Every time you withdraw and resubmit an application you could be subject to another fee. Further, if there is misinformation on your application, the loan agent may have to look for your background check or credit report more than one time, increasing potential fees. Eliminate this possibility by double-checking your information before you submit. This is particularly important if you are applying online where there tend to be more errors due to lack of proofreading.
Pay Attention to Deadlines
Loans come with deadlines for applications and funding. This is particularly relevant with federal loan options. Because federal loans are often subsidized or carry grant funding, the earlier you apply the better. Missing a deadline can mean you need to rush the application through, and this will cost extra money. For example, if you are using a private loan and seeking a government guarantee, the private lender will have to file your loan documents with the US Department of Education after you have submitted them to the private lender. This can take weeks, and you will run the risk of needing to pay to rush the documents through the private lender if you wait too long.
Provide Income Statements
You may not have an income, and you will not need to submit personal income statements. However, if you are seeking loans as a dependent student, meaning your parents will pay a portion of your tuition, then you will need to provide information on their income. The same is true if your parents are the ones seeking the loans which is the case with the federal PLUS loan program. The lender may charge you a fee if the lender has to independently contact an employer or bank for income verification. Cut out this step by providing tax schedules or other verification.
File Paperwork Personally
You may not have the option to file your paperwork personally. However, if you are using collateral on your student loans, you may be able to file the lien on your own with the county registrar to reduce the loan origination fee on the debt. This is not a typical requirement on a federal loan. Some private lenders may use collateral. Simply ask about fees for filing paperwork, and then ask if you can file yourself to cut back on those fees.
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Student Loans: How to Get the Funding You Need

Many times student loans are key to whether a young adult will be able to attend college. Without them, getting a higher education may remain an unattainable dream. Luckily, many people can get a student loan without a co-signer and even if your are not financially needy.
The first step to getting a student loan is to know how to apply for one. The very first thing you need to do is fill out the Free Application for Federal Student Aid, otherwise known as the FAFSA. You can do this at http://www.fafsa.ed.gov/. This application will help qualify or disqualify you for a federal Pell grant, which needs to be done for all students — whether they will qualify or not — before looking for any other student loans. The great thing about the FAFSA is that, even if you don’t qualify for a Pell grant, it can help you qualify for a subsidized Stafford student loan where the US Department of Education pays all of the interest on the loan until repayment begins (6 months after you have left school — whether it is because you graduated or dropped out).
What kind of loan or grant you get, and how much you are offered, will depend on your Expected Family Contribution — otherwise known as EFC. If you can get a grant for some of your expenses, but not all of them, you will likely be able to obtain either a subsidized or unsubsidized student loan to pay for the rest. Even if you do not think that you will qualify for a grant or subsidized loan, you can still be offered one that is unsubsidized. This means that you will have to pay the interest from the start of the loan, but it may be easier to obtain a loan this way rather than by going to a private lender — especially if you are a young student who does not yet have a credit rating and no other adult will co-sign for you.
Whether you get a grant, subsidized student loan, or an unsubsidized student loan, if you have money left over after all of your classes and books are paid for, you can use the remainder for living expenses. You can use it to pay the school for meals and a dorm for the year or to help pay for your own apartment and groceries. This may come in handy if you are not able to work enough hours while taking a heavy load of classes.
If you cannot get any funding after review of your FAFSA, or you are not offered enough, you can always try to get student loan funding through a private lender. This may be harder to accomplish and you may need to line up a co-signer — such as your parents, spouse, or an older sibling — who has a good credit record. These student loans should also be deferred until you leave school and include a 6 month grace period.