Student loans
Postsecondary
education is an investment in your future. College can be expensive and often
you or your family will have to take out loans to help pay for them.
Student loans are divided into two categories,
federal loans and private loans.
Federal loans, which are subject to supervision
and regulation of the federal government, include:
Direct loans in which the US Department of
Education It acts as a provider.
FFEL loans (Federal Family Education loans) that are made by private lenders
and the federal government are supported.
The federal
Perkins loans.
Private loans, sometimes called "alternative loans" are offered by private
providers and do not offer the same benefits and protections that federal loans.
Whether it
is releasing a new student loan or consolidate your existing student loans, the Federal Trade Commission (FTC,
for its acronym in English), the national consumer protection agency and the US
Department of Education (ED, for its acronym in English), the agency that
oversees federal student loans, you want to know how to detect
potentially misleading statements or business practices that can use some
private companies to get you opt for loans.
Private loans
There are
private companies that can provide loans or other forms of financial
assistance to meet the costs of their education. These companies often promote
their products through the system of direct mail, telemarketing, and
advertising on television, radio or internet.
Paying
college is a serious and long-term financial obligation; therefore, it is very
important to compare the costs of different means of funding available to pay
for their education. Private loans tend to apply higher rates and loans from the federal government charges.
In addition, private loans do not offer the same opportunities
cancellation or loan forgiveness brindadas several federal loan programs.
Therefore, before considering the loans offered by private companies, it is
reasonable and convenient options to exhaust federal loans (as well as grants and
scholarships).
To learn more detail about federal student loans, visit
www.FederalStudentAid.ed.gov.
How to
detect the deceptive practices of private
student loans
If you are
thinking of taking out a private student loan, it is important to know who you
are dealing and understand the terms of the loan. The FTC and ED offer the
following recommendations to acknowledge claims and questionable practices
related to private student loans.
Some
private providers and their promoters use names, seals or logos or similar to
those of government agencies representations to generate a misleading or false
impression that part of the government or are affiliated with it and its
student loan programs. The Department of Education does not send ads or postal
correspondence, nor provides loans to consumers by any other means. If
you receive an offer of a student loan, not from the Department of Education.
Do not
distract or confuse with promotions or incentives such as gift cards, credit
cards and prize drawings that prevent evaluated if the key terms and conditions
of the loan are reasonable.
Do not give
your personal information by phone, mail or online unless you know who you are
dealing with. Usually, private lenders that offer student loans ask your
student account number which often is your Social Security number (SSN) or
personal identification number or PIN - arguing that the need to determine your
eligibility. But con artists who pose as alleged representatives of private
providers that offer student loans may use your information
inappropriately, it is essential that you disclose these or other personal
information only when trust private lender with whom you are trying .
Check the
history of private providers that offer
student loans at the office of your
state Attorney General and your local consumer protection agency.
Special
considerations for consolidating federal loans
The student
loan consolidation is the combination of several loans into a single loan
with a new term of repayment and a new interest rate. Generally, consolidation
is related to federal loans. Here are some tips to help identify
potential problems related to consolidation loans:
Avoid
providers and promoters student loan sales tactics using high pressure. Some
promoters say, "If you do not consolidate your loan immediately their
interest rates may rise." The possibility and time that will change
interest rates to consolidate your loans depend on the type of loan you have
taken. Check your loan documents to determine whether interest rates are fixed
or variable:
If all your student loans have fixed interest rate, possibly
there is no limit to consolidate term.
If some or
all of their loans have variable interest rate and you
consolidates them into a single fixed rate loan, the interest rate of the loan
may be impaired. On 1 July each year, the Department of Education publishes new
variable rates of some federal loans. Annual changes in interest rates
may increase or decrease the interest rate offered on a consolidated loan
because the interest rate applicable to the consolidation will be the weighted
average of all loans consolidated.
With or
without limit to consolidate your loans, take your time to determine whether
it is a good choice for you.
Some
lenders impose restrictions on discounts they promise. Keep in mind that some
lenders only report these restrictions in the fine print. To find these types
of conditions, read the fine print of your loan documents:
Some
lenders will lower the interest rate on the consolidated loan, but only if you
agree that the payments are automatically deducted from your checking account.
Other
entities will lower the interest rate on the consolidated loan but only if the
balance of your loan within a specified minimum.
There are
also other lenders who granted a reduction of the interest rate on the
consolidated loan, but only if you keep the payments up to date throughout the duration
of the loan. You may want to consider a type of loan that offers immediate
discounts, or a shorter period payment date for discount interest rates, or an
additional discount granted by payments automatically deducted from your
account.
Some lenders
sell them to other companies consolidated loans. But as the benefits of consolidated
loans - such as the promised discounts -
may not automatically transfer to the transfer of your loan, you could lose
benefits when your lender sell your loan. Ask your lender if the terms of your
loan if you sell it to another company will change.
Be careful
if you are considering private loans consolidate federal loans into a single private loan. As a
result of the consolidation of all loans in a non-federal private loan you
will lose all the benefits and protections offered to borrowers by federal
programs.
Consolidate
a Perkins loan may be inconvenient for you since you could lose exclusive
rights to extension and cancellation available for borrowers of loans Perkins. For more detailed
information on these rights, go www.myeddebt.com/borrower.
Make
frequent consolidations after borrowing money can impact the waiting period
necessary to fulfill the requirements for these benefits.