Expand Your Student Loan Knowledge
This is material I thought would be worth sharing courtesy of my Financial Planning Software Provider RightCapital. We believe it is important to be an informed consumer of college education and want people to have an education on these programs with the hope of minimizing or even avoiding take on debt to pay for college. This article includes facts and information that will help you to understand the nuances of college debt.
Federal Student Loans
Federal student loans are offered by the government, with terms and conditions that are set by law. These loan types include many beneﬁts such as a ﬁxed interest rate, income driven repayment plan options and eligibility for Public Service Loan Forgiveness (PSLF) not typically offered with private loans.
Private Student Loans
Private loans are offered by private organizations such banks, credit unions, and state- based or state-afﬁliated organizations. These loan types have terms and conditions that are set by the private lender. Private student loans are generally more expensive than federal student loans.
Below is a graph that outlines different types of student loans and categorizes them by federal and private lenders.
A loan servicer is a company that is assigned to handle federal student loan debt on the government’s behalf. The loan servicer will assist you with tasks related to your federal student loans. You can contact the loan servicer to obtain standard 10 year payment, new borrower status information or any other relevant information. If your circumstances change at any time during their repayment period, the loan servicer will be able to help. If you are unsure of your loan servicer look for the most recent communication from the entity sending bills for the loan payments.
Below is a list of loan servicer’s and their contact information. These contacts can be used to gather additional details needed for an in-depth student loan analysis.
Loan Servicer Contacting Information
Federal Student Aid Information Center (FSAIC) at 1-800-433-3243.
|FedLoan Servicing (PHEAA)||1-800-699-2908|
|Granite State – GSMR||1-888-556-0022|
|Great Lakes Educational Loan Services, Inc.||1-800-236-4300|
Loan Servicer Contact
1-800-621-3115 (TTY: 1-877-825-9923 for the deaf or hard of hearing)
Student Loan Repayment Plans
Student Loans can be repaid in a variety of different methods depending on the your situation. The different plans may seem similar, but each has distinct pros and cons. Note that if you didn’t choose a repayment plan, the loan servicer will automatically place you on the Standard Repayment Plan.
Income-driven repayment (IDR) plans are designed to make student loan debt more manageable by reducing the monthly payment amount. If you need to make lower monthly payments or if your outstanding federal student loan debt represents a signiﬁcant portion of your annual income, one of the following income-driven plans can be used. After 20 to 25 years of steady repayment, the remaining balance is forgiven
Income Driven Repayment Plan
REPAYE Generally 10% of discretionary income
PAYE Generally 10% of discretionary income
IBR Generally 10% of discretionary income if you’re a new borrower on or after 7/1/2014, but never more than the 10-year Standard repayment plan amount. Generally 15% of discretionary income if you’re not a new borrower on or after 7/1/2014, but never more than the 10-year Standard repayment plan amount
Budgeting might seem overwhelming at first, but hear this: You can do it. How? By breaking down the process a bit.
What Is a Budget?
Real quick though, let’s define the word budget. A budget is just a plan. It’s not a restriction on spending—it’s a plan for what you’ll do with your money. It’s a plan for what’s coming in and what’s going out.
When you learn how to make a budget—and do it every month—you’re giving your money purpose. You’re taking control. Goodbye, money anxiety. Hello, money goals. Learn the 7 Baby Step Process
Small companies shouldn’t forgo retirement savings just because a 401(k) plan can be expensive to set up and maintain. There are options specifically for smaller businesses: a Savings Incentive Match Plan for Employees (SIMPLE) plan, a Simplified Employee Pension (SEP) plan, and a SOLO 401 (k).
“How do I get my money out of my retirement plan and into my checking account?”
The question is not as simple as it appears – that’s why people ask it. They’re not asking about the mechanics of a 401(k) withdrawal. They want to understand the switch from saving to spending, and it’s an entire cascade of questions covering how to decumulate assets in retirement. These include:
• When should I take social security?
• How can I ensure I’ll have enough income for my needs?
• How can I invest for growth without taking too much risk?
• What about taxes?
At University Financial Strategies our mission is to help families think beyond just saving for college, but helping leverage strategies that leverage your unique situation to help you save on college costs. We take into consideration topics like specialized college-planning strategies for business owners, planning for financial aid, school-specific scholarships, coordinating college planning with grandparents, cash-flow strategies and options for covering shortfalls, to name just a few.
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