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AVID Prezi

Financial Aid Presentation about Consolidating loans.
by

Brittney Lopez

on 30 March 2011

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Transcript of AVID Prezi

Problems faced by students and parents? What explanations and tips were provided? terms to understand When to consolidate your loans By Amanda Sanchez & Brittney Lopez ? What is it? Consolidating- Student loan consolidation basically means combining multiple student loans into one. You can even consolidate one student loan if you so desire. The benefit of loan consolidation is that instead of making multiple monthly payments that payment will be consolidated into one, and the payment should be significantly lower. Students that never intended to consolidate. How to structure a repayment in federal loans. Being desperate for money. Students are confused about what to do. ? ? ? ? ? Being tricked by false advertising, illegal incentives, and misinformation. examples Being tricked into signing consolidation forms.
If you have both, you should never consolidate federal and private loans together Check out every single detail and every bit of fine print before moving forward, and also keep in mind that many times there are additional fees involved in consolidating private student loans. As with anything, it is important to read the fine print and ask the right questions before moving forward. Keep in mind, too, that if you decide to consolidate, once it is completed, it cannot be reversed. DISADVANTAGES If you decide to “stretch out” your repayment period, you may end up paying more in interest for your loan depending how long it takes you to pay if all off (despite the potential lower interest rate). Many benefits may disappear. ADVANTAGES You will only be making one monthly payment to one financial institution. You will only be making one monthly payment to one financial institution. You should be able to decrease your monthly payment. With federal student loan consolidation, your interest rate will never be higher than 8.25%. And it will be a fixed interest rate.
Loan- A type of financial aid which must be repaid, with interest. The federal student loan programs (FFELP and FDSLP) are a good method of financing the costs of your college education. These loans are better than most consumer loans because they have lower interest rates and do not require a credit check or collateral. The Stafford Loans and Perkins Loans also provide a variety of deferment options and extended repayment terms.
Federal Loans- Subsidized federal loans are loans that are offered to financially needy students by the U.S. government to help pay for higher educational expenses.
Private Loans- Education loan programs established by private lenders to supplement the student and parent education loan programs available from federal and state governments. LOANS FEDERAL Federal Loans- Subsidized federal loans are loans that are offered to financially needy students by the U.S. government to help pay for higher educational expenses.
PRIVATE INTEREST RATES Interest rates- money paid regularly at a particular rate for the use of money lent, or for delaying the repayment of a debt.
FIXED RATE Fixed rate- a loan in which the interest rate does not change during the entire term of the loan. LENDERS Lenders-A bank, credit union, savings & loan association, or other financial institution that provides funds to the student or parent for an educational loan. Note: Some schools now participate in the Federal Direct Loan program and no longer use a private lender, since the US Government provides loan funds. REBATES Rebates- a partial refund to someone who has paid too much money for tax, rent, or a utility. PENALTIES Penalties- a punishment imposed for breaking contract. LOAN FORGIVENESS Loan forgiveness- releases the borrower from his or her obligation to repay the loan, usually due to circumstances within the borrower's control. The most common loan forgiveness programs cancel all or part of the debt for working in a particular field or performing military or volunteer service. Loan forgiveness for working in a particular occupation is tax-free, while other types of loan forgiveness may result in a tax liability. There are two main types of loan forgiveness: up front and back end. Up front loan forgiveness cancels a portion of the debt for each year of service. Back end loan forgiveness cancels any remaining debt after a specified number of years of service.
Loan- A type of financial aid which must be repaid, with interest. The federal student loan programs (FFELP and FDSLP) are a good method of financing the costs of your college education. These loans are better than most consumer loans because they have lower interest rates and do not require a credit check or collateral. The Stafford Loans and Perkins Loans also provide a variety of deferment options and extended repayment terms. Private Loans- Education loan programs established by private lenders to supplement the student and parent education loan programs available from federal and state governments.
Thank you for your time! Amanda Sanchez
Brittney Lopez Why did it used to be good to consolidate loans? You used to get federal loans at very low interest rates; once you graduated, you consolidated them into one neat low interest fixed rate loan. Why should borrowers refrain from consolidating federal and private loans together? It wipes out some benefits of a government loan, such as loan forgiveness for certain types of public service. Consolidating Is No Longer A No-Brainer What has changed to make consolidation less desirable? Why are borrowers complaining about consolidation? How are lenders making consolidation look appealing to borrowers? Future College Cost Estimates 18 years Current Age Public College Private College 18 15 12 9 6 3 newborn $52,269 $60,508 $70,045 $81,086 $93,867 $108,663 $125,791 $125,106 $144,825 $167,653 $194,080 $224,672 $260,085 $301,082
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