Federal Student Loan FAQs and Summary

When do I start repaying my loan?

After you graduate, leave school, or drop below half-time enrollment at a participating school, generally you have a “grace period” before you have to begin repayment.

• For Federal Perkins Loans, the grace period is nine months.
• For FFEL Stafford Loans and Direct Stafford Loans, the grace period is six months.
• If your parents borrow a FFEL PLUS Loan or a Direct PLUS Loan for you, there is no grace period. The first payment on these loans is generally due within 60 days after the final loan disbursement for the period of enrollment for which your parents borrowed.
  

During the grace period on a subsidized Stafford Loan, you don’t have to pay any principal, and no interest will be charged (the federal government pays the interest). During the grace period on an unsubsidized loan, you don’t have to pay any principal, but interest will be charged. You can either pay the interest or it will be capitalized (added to your principal balance).

If you should return to school at least half time before the grace period ends, you again may postpone loan repayment while you’re in school, and you’ll be entitled to a full grace period when you terminate enrollment or drop below half-time enrollment status. You must understand, however, that once the grace period ends, you are in repayment status and must request a deferment if you want to postpone repayment.

Effective October 1, 1998, the six-month grace period for a Stafford Loan excludes a period of up to three years if you’re called, or ordered, to active duty in a reserve component of the U.S. Armed Forces. The active duty must be for a period of more than 30 days and would include any period of time necessary for you to resume enrollment in school at the next available regular enrollment period.

When you graduated, left school, or dropped below half-time enrollment status, the financial aid administrator at your school provided counseling to inform you of your rights and responsibilities as a borrower. The aid administrator also provided information about the types of loans you received, the address where you must send your payments and the way to contact your lender, your repayment amount, repayment options and
other debt management strategies, the date repayment was to begin, and the consequences of default.

At the same time the financial aid administrator provided this information, your loan holder (the financial institution you received the loan from) should have sent you information about repayment, including payment due dates. If your grace period is almost over and you haven’t received this information, contact your lender as soon as possible.

Remember, though, you’re responsible for beginning repayment on time, even if you don’t receive this information.

Why is the amount the school told me I must repay more than the amount I actually received?

Mainly because interest accumulates on your loan. Interest is a percentage of the original loan amount (the loan principal) that’s added to what you have to pay. It’s a charge for using borrowed money. Everyone has to pay interest, no matter what type of loan they have; education loans are no different. The interest rate for a Federal Perkins Loan is fixed at 5 percent. The interest rate for FFEL and Direct Loans is variable but does not exceed 8.25 percent. The rate is adjusted each year on July 1. You’ll be notified of interest rate changes throughout the life of your FFEL or Direct Loan.

As mentioned earlier, if you received an unsubsidized Stafford Loan, interest starts accruing (accumulating) from the time the funds were disbursed to you, and you’re responsible for paying that interest. You chose to either pay it while you were in school or let it accrue. If you let the interest accrue, it has been “capitalized” (that is, added to your principal balance). This means the total amount you repay will be greater than if you paid the interest all along.

Also, there’s a fee charged for Federal Stafford and Direct loans of up to 4 percent of the loan. This fee is deducted proportionately from each loan disbursement you received. This means the loan amount you received was less than the amount you actually borrowed. You’re responsible for repaying the entire amount you borrow, however, not just the amount you received in loan disbursements.





How is interest calculated?

Interest on all loans borrowed under ED’s programs is calculated on a simple daily basis. The following formula demonstrates how the simple interest is calculated between payments:

Average daily balance between payments

x Interest rate

x (Number of days between payments / 365.25)

How interest accrues between payments made on April 15 and May 15,
for example:

Average daily balance:	$10,000
Interest rate:	x .08
Days between payments (30/365.25):	x .08214
	_________
Monthly interest:	$65.71

The loan holder first applies your payment to late charges or collection costs on your account (if any), then to the interest that has accumulated (accrued interest). The remainder of the payment is then applied to the principal balance. Just as the accrued interest varies monthly (depending on how many days elapse between the receipt of payments), the amount of a payment applied to accrued interest and the amount applied to principal also will vary monthly.

A breakdown of how your payments are applied should be on your billing statement. If not, ask your loan holder or servicer for that information.

How do I know where to send payments?

Before you graduated, left school, or dropped below half time enrollment status, your school should have given you information about who to repay. Also, your loan holder should be listed on your promissory note.

• You’ll repay a Federal Perkins Loan to the school that made the loan or to an agency the school hires to service the loan.
• You’ll repay a Direct Stafford Loan, or your parents will repay a Direct PLUS Loan, to ED’s Direct Loan Servicing Center.
• Generally, you’ll repay a FFEL Stafford Loan (and your parents will repay a FFEL PLUS Loan) to the lender that made the loan. Sometimes a loan holder contracts with a loan servicer to administer student loans. If that’s the case, you’ll make loan payments to the servicer. Also, FFEL Stafford Loans are often sold to another lender or secondary market. The loan holder is required to notify you by mail if your loan is sold and give you the name and address of the new loan holder. Even if your loan is sold—which is a common practice—your rights, responsibilities, and repayment obligation won’t change.

Generally, you’ll receive billing statements or a coupon book from your loan holder. But, you’ll have to make all payments on time even if you don’t receive these.




What if I’ve forgotten what type of loan I have or who my loan holder is?

This information should be on the bill you receive from your loan holder. But, if you have questions about what loans you have, you can review your federal student loan history through the National Student Loan Data System (NSLDS). Note that NSLDS has information only about loans ED administers (the loans listed in the footnote on page 1 of this publication). If you obtained a private or nonfederal loan, you’ll need to contact
the loan holder or your school for more information. You can obtain information
about your NSLDS record by contacting the Federal Student Aid Information Center at
1-800-4-FED-AID (1-800-433-3243).

You can also check NSLDS at www.nslds.ed.gov

To access your records, you’ll need a PIN (Personal Identification Number). With your PIN, you can review the type and amount of the ED loans you borrowed, the status of each loan, and the name, address, and telephone number of the loan holder. If you need a PIN, want to receive another copy of your current PIN, change your PIN, or restrict access to your personal information, go to www.pin.ed.gov.

How you can make a buck out of rising interest rates

The recent run-up in interest rates may be a letdown to someone looking for a home loan, but it could spell dollar signs for investors with money to lend.

Four years ago, when rates were around 1 percent, loan-based investments like certificates of deposit (CDs) and money market funds weren't attractive because their payoffs rise and fall along with rates.

Current Savings Rates

Type	Overall avgs

MMA	3.61%
$10K MMA	4.05%
6 month CD	4.64%
1 yr CD	4.88%
5 yr CD	4.89%
Find personalized rates:

But now they're looking a lot better as interest rates have risen above 5 percent on inflation concerns.

CDs are loans that consumers make to a bank for a set period of time, while money market funds are mutual funds that invest in short-term debt.

Investors don't expect huge returns from these investments, because they're low-risk. You get all the money you invested back, plus the interest it's earned. With safety though, you give up risk and the potential payoff that stocks can deliver over the long term.

If you're afraid of the stock market or want a safe, short-term investment, now is a perfect time to lock in a high interest rate on CDs or bond funds, said Eric Tyson, author of Personal Finance for Dummies.

Greg McBride, Senior Financial Analyst with Bankrate.com said they finally look like a safe way to make money while avoiding a roller coaster stock market.

"The top-yielding CDs are over the 5.4 percent mark right now," he said, "which means there's a big difference between what the average bank is paying and what you can get.

Investors want to keep an eye on government-issued Treasury bonds because they influence interest rates on CDs and money market funds. But they're not directly tied to these investments, so there is some lag between the two. Bond rates are up now, but rates on CDs and money markets have yet to follow.

Rates can change quickly, but you can compare current yields on Bankrate's CD & Money Market Rates page, and bank account rates on itsChecking & Saving Rates page. Bankrate also offers an alert system that emails users when CD rates reach a level they specify.

Timing is everything

When trying to decide where to put your money, the most important consideration is how soon you'll need it, said McBride.

If you're investing emergency money that you may need quickly, rule out the CDs, he said. Despite their more attractive recent returns, they have large withdrawal penalties that cut into your payout.

A money market fund is the ideal place to put your money if you plan to use it in the next year or so, said Tyson.

"You're not putting your principal at risk, and you will get a higher return than on most CDs," he said. Tyson cited Vanguard's Prime Money Market Fund, which currently yields 5.12 percent and has low fees.

Betting on even higher rates

Tyson said that a unique kind of bond called Treasury Inflation-Protected Securities (TIPS) could be right for investors who believe rates will go even higher and stay there.

"If you're really afraid of higher inflation and higher rates, then TIPS are probably a good way to go," he said. "They'll protect against rates climbing again."

But he warned he sees no signs that inflation is going to jump in the near future.

If you think rates are near their peak now, Tyson said, then TIPS would be a mistake, because their payout would actually decline with inflation. Instead you should try to lock in a good rate on a money market fund or CD.

The Social Security Scam

How millions of Americans are being robbed by The Government

It is sad how the American people don't read beyond the daily newspaper. One of my favorite statements was made by Thomas Jefferson, "The man who reads nothing is more educated than the man who reads nothing but newspapers." So true! The average person believes just about everything they read in the newspaper or hear on the news, without ever really question the source and validity of these stories.

Who owns and controls the media? Rich, greedy men and women (Big Business)!
Who controls the government? Big business!

If you don't believe me, just look closely at the whole Enron ordeal. You'll find that a whole bunch of high powered politicians and rich people were involved in the hundreds of millions of dollars that disappeared before Enron filed for bankruptcy protection. Plus another 50,000,000 in promotions and bonuses for company execs right before they filed for bankruptcy. The investigation continues. There should be no protection for any people who deliberately break the law, especially when they knew thousands of innocent people were going to suffer. How horrible! So ask yourself, who controls the media?

Anytime you read a newspaper article or listen to the news about anything concerning government, ask yourself, "Why do the rich people governing over us want us to think this way?" "What are they conditioning our minds to accept?" "What is the truth?" "Is this the truth?"

The Government has been telling people that Social security payouts will have to be reduced by 27% in 2040 just to keep the system afloat. What next? What a joke! People can't barely survive on the measly social security money given to them today. They're surviving on peanuts (and many of them aren't surviving, they're rotting in poorly-run government nursing homes). One-third of state nursing homes don't meet up to government standards and are at the end of the government's list of priorities. I dread the thought of being trapped in a state-run nursing home from what I have seen, I'd rather die on the street. The government has no constitutional right to force me to pay into their money-grabbing scam.

The scam is that there is plenty of money in the government, but they keep telling us OUR social security may be reduced or even bankrupt when we retire. This is wrong in every sense! Look at all the money collected for social security annually by the government from over 100,000,000 working people in this country (hundreds of billions of dollars annually). That's just for ONE YEAR! There should be more than enough (MORE THAN ENOUGH!) money in the social security system for those who are entitled to it. So where did the trillions of dollars go? Something is very wrong within our government! It is a SCAM when you forcefully take my money, use it for purposes other than for which it was intended, and then tell me you might not be able to give it back to me when I am entitled to it. Social security is a money-grabbing scam! The government should NOT have touched that money to begin with, it's not theirs...It belongs to the working citizens of the United States.

So if social security is in fact in deep trouble, it is only because of the irresponsibility of our own government leaders. However, I believe the persistence of negative news being released to the public about social securities problems are deliberately created to MISLEAD us concerning our social security. The government knows that we won't tolerate a sudden loss of our money, so they break it to us a little at a time over a couple of decades until social security is gone. I don't believe there is an unfixable problem, I do believe that the evil and rich elite are deliberately stealing our money. They are preparing (conditioning) our minds for what is ahead...very hard times in this country (hard times that they are going to be responsible for). Ultimately, it is the fault of the American people FOR BEING APATHETIC! Don't expect to much, if any, of your social security. The government only gets away with what we allow them to get away with. They've squandered our social security, and yet we keep voting for them (not anymore). If there is any social security in the future, it will only be because Uncle Sam is going to make the working people pay MORE. Now the irresponsible bureaucrats will have even MORE money to splurge with. Either way, we are going to be the ultimate LOSERS! I calculated that if you were to invest just $3,000 a year (beginning at age 18) in government bonds compounded annually at only 3% interest, by the time you reached retirement at 62 you'd have $271,976.80! Not too bad a nest egg! By placing that same $3,000 into social security, you'd have accumulated NOTHING!. Uncle Sam gives you back under $10,000 a year in MOST cases. This is a raw deal!!! Here's the kicker...do you know how much interest you'd get each year at 3% on $271,976.80 invested in government bonds? You'd get $8,159.15!!! (that's without touching the $271,976.80). Think about it, you could leave all that money to your children (and that's exactly what the rich elite who control government don't want). It is ungodly for the government to hinder parents from leaving an inheritance to their children, but the government gets away with it anyway. If you do leave a big sum of money to your kids, Uncle Sam automatically confiscates 50% of it in the form of an "inheritance tax."

So by the government FORCEFULLY taking your money in the form of "social security," you are wrongfully hindered from accumulating any of YOUR OWN money. This is wrong! Let's go back to what would happen if you invested on your own (NO social security). Even if you lived to be 100, the $271,976.80 would generate $8,159.15 a year (that's about all the government plans to give you). That's if you just invested $3,000 a year. If you stashed away $6,000 a year, you'd have close to one million dollars when you retired. Now you'd receive $30,000 to $50,000 a year to live on (without ever touching the principal). Your children would have a great start in life. You could buy them (or at least help them) buy their own home. Today, it is almost impossible for young people to even think about buying a house without going into serious debt for a lifetime. Unfortunately, the rich elite has decided that we must pay for three houses to buy just one.

Is the Average Joe Moneymaking plan a scam?

The Average Joe Income Package promises to help make you money by using your computer and the internet to market a product for a large company or to market your own product. Now the question is: "Do they deliver on what they are promising or is this just another money making scam"? Read on for the answer.

The Average Joe Income Package program gives you a lot of great information on how to make money online. This information is constantly updated on the website or through emails. Not only is there a lot of information for you to read through, but there are also a bunch of instructional videos. These instructional videos are videos of the authors computer screen as he goes through the program showing you exactly what you have to do on your own computer to start making money. There also are a lot of links to click on with different free programs to sign up for which will help you make money easier.

The only tip I have for anyone who is serious about trying out this program is to first watch all the videos and read all the easy to understand information before putting it to use and you will definitely be making money in a short time. Personal I printed out all the printable information that I could and put together a binder. I used dividers in my binder to divide each of the steps of the program. Then I read through all the information I printed out and highlighted the main points which were made in each section. I also took a lot of notes on loose-leaf paper which I added into the binder. Taking notes on the videos is also important. After I did all my studying I put what I learned to use and I started making money by the end of my first week.

Now to answer the question: "Does the Average Joe Income Package deliver on what they are promising or is this just another money make scam"? Well I'd have to say it definitely is not a scam and they do deliver on what they promise. The only thing is that you have to be serious about taking the time to make the program work for you. If you study the program and take notes it will work. If you get the program and think you do not have to put any effort into it then you are wasting your time. Another great feature of the program is that they offer an 8 week full money back guarantee with no questions asked.

With two or three online sales you should be able make more money than the little bit of money which you payed for the program. Now if you do not make those two or three sales within the first 8 weeks because you can not grasp the concept of program or you just do not have the time then return the program and lose no money. Also everything is done online so your not losing any shipping and handling fees if you decide to return the program.

In conclusion I would have to confirm that the Average Joe Income Package is a good way for a person to make money at home using their computer and the internet as long as they are willing to take the time to read, watch, study, and put to use what they learn in the program. Also the 8 week full money back guarantee with no questions asked makes it that much easier for someone to try out the Average Joe Income Package without having to worry if they wasted their money.