Your Questions About Direct Loan Servicing

Nagesh answers:

(Reads over your inquiry), uh oh, what happened?!? I see that you have gotten in over your head with student loan debt. I myself am in that boat . . . The trade school that I attended back in January-July 2003 is holding me responsible for a $1.6K accounts receivable balance while Sallie Mae once held me responsible for a $4.35K balance and threatened me with default as well even though I was paying them what I could when I could pay it as a show of good faith.

I also see that you have engaged the option of loan consolidation . . . Good move. It is much easier to make headway on a loan that has a fixed interest rate. In my case, I have successfully whittled both balances down to $660 and $3.71K respectively. The moral of the story — it is possible to resolve this debt if you are willing to reorganize your economy to operate at a profit. It seems that you are having this lesson played out before you with disastrous results. Remember that interchanging creditors WILL NOT abolish your debtor status!!!

What will abolish your debtor status, you ask? Reorganizing your economy to operate at a profit is your only recourse. Is there another locale where you can reside cheaply that is relatively safe, sanitary, and sane? Is there a way for you to contain your utility expenditures? Is there a mass transit system nearby that you can avail . . . And how pricey is the privilege? Is it possible to have a reliable Internet connection that is not too costly? Look at your home phone service; is there not a way to scale it back or (if it serves no purpose) to abolish it altogether? Your personal micro-economy needs to be a lean, mean fighting machine because you cannot afford denial. Air fare over to Egypt is insane these days. All jesting and puns set aside, I will not lie to you and say that streamlining your economy will be easy. Your sanity is priceless like survival is and personal solvency will accomplish both sanity and survival. There is just no reason to not streamline your economy; just do it!!!

Unfortunately, it seems that your volition about whether or not to pay has been overridden, so negotiating with your creditor is not going to have the efficiacy that it normally would have if you had kept this matter under control. I would not consent to any repayment program a creditor offers because it is not to your advantage. Ditto for electronic compensation. Like I said, streamline your economy and determine what monthly profit that you can make and then offer that to the creditor. Keep at the fight for solvency and sanity, for it is worth your while. Good luck!!!

Nagesh answers:

40,000 is a total for the entire school year which is July to July. Of each year. And most loan companies will based upon the school set the amounts you can borrow from them. Be sure to apply for any and all other financial aid for which you qualify for.

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Paying for college with private loans
By Lucy Lazarony • Bankrate.com

For some college students, federal aid just isn’t enough.

After maxing out federal loans, more and more college students are turning to private loans to finance their college educations.

To get a good deal on a credit-based private loan you’ll need to shop carefully. Interest rates and fees vary widely. And you may need the help of a creditworthy co-borrower, such as a parent, to snag one of the better deals.

“It’s important for students to be as informed as possible,” says Ronald W. Johnson, financial aid director at the University of California at Los Angeles. “Don’t assume one private loan is like another.”

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College students borrowed over $56 billion in federal loans in the 2003-04 school year, and $11.3 billion in non-federal loans, according to the College Board.

Nellie Mae reports that while private loans make up only 9.2 percent of student aid, students that do turn to private loans are borrowing quite heavily. The average debt level of a student who borrowed with a private loan in their undergraduate years is a whopping $41,900.

“Many students are being compelled to take out private loans by outdated and insufficient federal student loans,” says Marie O’Malley, a vice president of marketing at Nellie Mae.

Rising cost, rising debt
Many students turn to private or alternative loans after exhausting federal borrowing options. Despite climbing college costs, the borrowing limit on federal Stafford loans has not increased in a decade. The Stafford program is the largest source of student loan funds in the country.

“It’s just simple math,” says Carl Buck, vice president of financial aid services for Peterson’s. “The cost of attendance, particularly at private institutions, has gone up significantly and you don’t have the federal aid programs increasing their maximum borrowing lines at all.”

Undergraduate students that depend on their parents for financial support may borrow $2,625 in Stafford loans in their freshman year, $3,500 in their sophomore years and $5,500 in their junior and senior years.

“Many students simply need to borrow more than that so they turn to private loans,” says Sandy Baum, a professor of economics at Skidmore College and co-author of a recent study on student loans. “They’re also turning to credit cards.”

Federal student loan borrowing limits may have been fine over 10 years ago. Back in 1992-93, public universities charged $2,334 in tuition and fees and private colleges charged $9,340.

Today, public universities charge an average of $5,132 (up 10.5 percent from last year) in tuition and fees. Four-year private colleges charge $20,082 (up 6 percent from last year) in tuition and fees. Toss in room-and-board expenses, and the total cost for a student, at a public university, averages $11,354 and at private colleges, $27,516. It’s easy to see how a college student could be stuck with a steep education bill even after taking out a federal loan.

PAGE 1 | 2

— Updated: July 15, 2005

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Nagesh answers:

You don’t say what kinds of loans you’re talking about. So I’ll be general.

Make connections.

Actively join in community service organizations and keep an eye out for opportunities among the other volunteers.

Help others solve their problems. I.e. Realtors are having a tough time moving houses in my area of Florida some enterprising realtors have arranged a bus tour of available houses to give potential buyers a chance to see a lot of places in a short with low pressure. If you were to help something like this up in your area there’d probably be the opportunity to originate some mortgages out of the deal.

Provide local data to other businessmen in your area. If you help them suceed they’re gonna need capital to expand. You can gather your own data via on-line surveys and such or just provide data that you have access to to businessmen that you think will need it.

Network in areas that you already love. I know of one loan officer in Florida that made several boat loans simply because he was a sailor in his own right and folks came to him for help when they needed cash. Being something of a local expert he was perfectly positioned to separate the good opportunities from the bad and even the boat inspections that he had to do were not a real chore for him as much as checking up on friends.

Bankers used to be considered “Pillars of the Community” maybe that was because they supported their communities even when profit was not a direct motive.

Nagesh answers:

What might happened is that you went to pay your loan, but not through loan payoff. If you went to loan payoff or say you are going to pay the loan in full, it will calculate the total principle + interests you would have to pay. Then it would be 2 days to process and shown that amount you paid.
During those 2 days, the loan status / interest could be shown that you still own them. But since you paid the loan in full amount, those 2 days of interests – it will be deleted later on once they confirm that you paid the loan in full.

If you believe you paid the full amount on Wednesday, then you could call Direct Loans customer service line to ask them for details.

Nagesh answers:

A lot of students who are gradating from college are then left holding a huge amount of student loans. Regardless of whether you have a PLUS loan, a Stafford Loan, a Federal Perkins loan, or private student loan, there are a wide variety of student loan consolidation services which are available to help consolidate all student loans into one single debt. By consolidating your student loans, this can result in a much lower interest rate, and in some cases this can also dramatically reduced monthly loan payments and help people pay off their debts much quicker. The good news is, many of the consolidation services will offer a fixed interest rates for the life of the loan, which allows you to lock that interest rate for as many years as it takes to pay off your student loans and you do not have to worry about the interest rates skyrocketing on you.

One of the first things you should look for when choosing a student loan consolidating company is their cost of service. There are various services available and the type of service you may need will depend on your particular debt situation. The cost of the debt consolidating service will greatly depend on whether your bills are current , slightly passed due or if they have been past due for months, or even years. It is important to check into more than one debt consolidating company and to be as open with them about your situation as you can. By exploring more options, you will ensure yourself you are working with a company with whom you feel comfortable with and feel you are getting a great day with at the same time.
Another thing you should consider when choosing a student loan consolidation company is the length of time it will take you to become debt free. The amount of time it takes will depend on your individual situation, so there is no set time frame which can be given up front. Once you have explained your financial situation to the debt consolidators, they will be able to give you an estimation of how long it will take to pay off the debt and for you to become debt free.
Some Benefits to Consolidating Your Student Loans:

You can receive as much as a 50% lower monthly payment obligation.
There are never going to be any penalties for paying off your student loans early.
You are able to consolidate your student loans without having to run a credit check and without having a co-signer
If you choose a federal loan consolidation there are no fee.
Your consolidation loan interest is also going to be deductible on your federal taxes.
Consolidation Companies:

Below are a few recommended resources to check into if you are seriously considering consolidating your student loans. These companies will be able to help direct you and answer questions you may have and will get you started on paying off your student loans in no time.

Student Loan Consolidator
Chase Loan Consolidator
My Student Loan Page

Good luck!hope this helped.