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Breaking Down Student Loan Options

Student loan options

The cost of education has increased dramatically over the past few decades, often forcing students and parents to consider taking out loans to pay for tuition, fees and room and board. While grants and scholarships are available, they may not cover the cost of a student’s final bill. Fortunately, there are several different types of student loan programs available. The eligibility for these programs, as well as loan terms, differ by program, so it’s important that students, and their families, do some research before making the decision to borrow. Student Loan Types Federal Direct Loans Previously known as “Stafford Loans,” the Direct Loans program provides loans to students based on need. There is no credit check required to apply for a direct loan There are two subtypes of direct loans available: Subsidized and unsubsidized. The government pays the accruing interests on a subsidized loan while the student is still in school. Unsubsidized loans begin to accrue interest as soon as they are disbursed. One major advantage to choosing federal direct loans is that there are several programs that can help borrowers manage repayment, particularly if the borrower is unemployed or doesn’t make a lot of money. These include the ability ...

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Should You Choose Student Loan Default?

student loan debt never goes away

I read a controversial op-ed piece recently from a writer who made the conscious decision to default on his student loans. The main reason was to pursue a low paying career he was passionate about rather than take a job he loathed to afford paying back borrowed money. His rationale was that if everyone followed suit then universities, lenders, and the government would have to change the policies regarding student loan repayment or make higher education more affordable or even free to all. While he makes some interesting points, I don’t think anyone should choose student loan default, and here’s why. No One Forces Students To Borrow Money First of all, humans of sound mind possess something called free will. Obviously in some parts of the world, choices are fewer and further between, but here in the U.S., no one can put a gun to our heads and make us borrow money. This is true of mortgage, credit card, or consumer debt. While people like to go on and on about evil lenders or trickery employed by credit companies, we are not lemmings. Somewhere along the line, personal responsibility has gotten lost. Everyone has the power and obligation to educate ourselves ...

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The Dangerous Student to Doctor Transformation

financing an expensive luxury car

This post is from fellow optometrist and personal finance blogger, Syed at The Broke Professional. Thanks for helping me out while I navigate the no wifi land of rural Kentucky! When I was in school, nothing else mattered.  Life was all about doing well on the next test, and then doing well on the one after that.  This was true both during undergrad and optometry school, and it seemed like no end was in sight.  Though I knew it would end at some point, it was always “how do I get ready for the next test or practical?” Many of my classmates in optometry school felt the same way.  Professional school is similar to undergrad in that you want to get good grades and do the best you can, but it’s different because you and every other student in your class is there for one reason and one reason alone.  And you attend classes and take board exams with the same group of people for four years.  This can build a lot of camaraderie and produce a sort of “us against the world” mentality over time. A Whole New World But then after four years, it’s finally over.  We dealt ...

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Be Smart About Student Loan Consolidation

using a company to consolidation loans

Student loans can be a necessary evil. In many cases, students have to take loans to establish careers, but loan repayment can be really hard on new graduates. It was a long time ago, but I still remember the anxiety that came with getting our first loan repayment bills. Added to that was the knowledge that our interest rates would be going up soon. We panicked and consolidated as soon as possible. Because we didn’t know any better, our consolidation was through private loan companies. In my case it didn’t matter because my job was not and will probably never be eligible for government student loan forgiveness. However, in Jim’s case, we missed out on $6000 he could have gotten in teacher loan forgiveness. Because we were not smart about student loan consolidation, he consolidated the wrong loans with the wrong company, and we were out of luck. Sharks In The Water It has been over a decade since we finished school, and there are now all kinds of new rules and options for student loan consolidation and forgiveness. With no guarantee of a high paying job after college, it’s very easy to see why new graduates would jump at ...

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What If My Kid Wants To Go To Stanford?

Hoover Tower at expensive Stanford University

I had a continuing education class in Durango last weekend, and we used it as a family day trip, treating ourselves to dinner at our idea of gourmet; Applebee’s. As we sat there waiting for our food, Jim was watching college football on the many TV’s that are scattered about this four star establishment. Stanford was battling someone on one of the screens, and our daughter asked who was playing. Jim looked at her and said, “That’s Stanford, where you are going to college.” We kind of laughed since she doesn’t know Stanford from Pueblo Community College,  but that got me to thinking. What if my kid does want to go to Stanford? She is only 7, and I’m not a tiger Mom who has been planning her educational future from conception, but let’s just for a minute consider it as a possiblity. Could we do it, and would it make sense? Could She Get Accepted? Because I’m a geek well rounded parent, I checked out some stats on getting accepted to Stanford University. We’ll assume today’s statistics because I have no idea what the next decade will bring. For fall 2014, There were 42,167 applicants, of which 2,145 or ...

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