Federal scholarships and financial assistance are not sufficient to cover the rising cost of education.

In spite of various initiatives by government organizations, dependence on alternative sources of finance has become inevitable. While some of the loans offered by Federal Agencies are subsidized and are need based loans, the rest are based on the credit score of the borrower. Except for certain benefits relating to interest rate and repayment options, both federal as well as private student loans turn to be a huge burden on the students.

Refinancing as an Option

Students end up taking a number of loans to finance their education. The real test lies at the time of their repayment. Most of the repayment terms begin at the fag end of their studies or immediately after completing their education. For students who have just begun earning, repayment poses a heavy burden to tackle. Any effort to reduce the cost of their borrowing will be very useful. Refinancing option come to the rescue of students who are willing to reduce the intensity of their student loan liability. While loan forgiveness programs offered by the government and other private agencies help in totally wiping away the loan liability, it is not that easy to qualify for the loan forgiveness program.

Consolidation of Student Loan

Options such as consolidation and a new refinance loan come to the rescue of students in managing their finances more confidently and efficiently. Several loans are consolidated into one single loan liability by repaying their existing loans, creating a single new loan. This loan comes at a lower interest rate and flexible repayment term. The repayment terms are of three types namely extended payment, graduated payment and income – sensitive payment. While extended payment reduces the monthly liability with the increase in the number of years of repayment, graduated payment increases the liability gradually. Income sensitive payment increases and with the increase in income and therefore easily manageable.

Article Source
Mark C Brown

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Varney: Dems to Use Healthcare Reconciliation to Sneak In “Stalinist” Govt Takeover of Student Loans

If 0bama is focusing on jobs, why did he take over student loans, which will cost about 30,000 jobs?

Obama is not focusing on jobs. He is focusing on getting as much business as he can under gov Control. You think any insurance co. will exist in 3 years? They will be bankrupt, b/c no one is going to buy insurance from them b/c it costs an employer $6,500 per person to stay with the insurance plan he has. Who is going to do that? Everyone will go to the gov, therefore there will be no customers for ins companies.

Caterpillar said the healthcare bill will cost them $100 million a year. (And the CEO supported Barry.)

http://dailycaller.com/2010/03/19/caterpillar-health-care-bill-would-cost-it-100m/

Here is latest on Sallie Mae

http://higheredwatch.newamerica.net/blogposts/2010/what_sallie_mae_won_t_tell_you_about_its_proposal-27975

take over home loan


Does it make sense to take a loan on a 401K to buy a home?

I have $60K in my 401K and can take a loan at 3.8% over 10 years on half of it. Have no debt and $25K in savings. Looking at buying a house between $100K – $175K. Does it make sense to borrow my own money and pay myself interest? What are the drawbacks?

The drawback is the money that you take out does not grow in the fund.

Furthermore, normally, as you put money in the 401(k), it is not taxed. However, when you make loan payments back into the fund, you are doing it with after tax dollars.

So basically, the money does not grow as quickly as it normally would and you lose the tax benefit associated with 401(k) for that amount.

Having said that, I did take out a loan on my 401(k) to help with the down payment of the home. In my mind I thought obtaining a home at this time was a better move than allowing this particularl money to grow. I also did so at a releative short pay back period (4 years I think) and I only took out the minimum amount needed.

My only recommendation would be to keep any 401(k) loan to a minimum and to ensure any pay-back amounts you have will not affect your ability to pay your mortgage. Meaning don’t use the loan to buy “too much house”

Additionally, remember if you lose your job, the loan needs to be paid back in its entirety immediately. If you can’t do it personally, they may deduct it from your 401(k) balance which wil be viewed as an early withdrawal and it will be subject to tax and penalties.

PS…check your interest rate. I believe mine was at 8.5% yours seems pretty low.