Opportune Time for Student Loan Consolidation

Students and families look into consolidating and refinancing their federal student loans to take advantage of the record-low interest rate. Federal student loan consolidation rates are now the lowest they have been in history. Students and families are able to consolidate and refinance their federal student loans one time under current law to take advantage of lower rates, which could save them thousands of dollars over the life of their loan.

Any student or parent who has not yet applied for the one-time loan consolidation should be alerted to the fact that interest rates for these loan consolidations have dropped to record lows for the student and for parents who borrowed to help their children with school. According to a recent survey, more than half of students graduating this year are unaware of this opportunity, which could help thousands of local students and families.

More students are graduating with debt, and the average debt per student has been increasing steadily. Students need to be able to take advantage of what’s available to them financially — but surveys show that they may not know about it.

Under student loan consolidation, people can simply lock in a lower rate or can extend their payment period for as long as 30 years depending on how much they owe.

Beware of Scholarship Scams

Need money for college? Doesn’t everybody? With tuition bills skyrocketing, and room and board going through the roof, students and their families are looking for creative ways to finance a college education. Unfortunately, in their efforts to pay the bills, many of them are falling prey to scholarship and financial aid scams.

According to the Federal Trade Commission, unscrupulous companies guarantee or promise scholarships, grants or fantastic financial aid packages. Many use high pressure sales pitches at seminars where you’re required to pay immediately or risk losing out on the “opportunity.”

Some unscrupulous companies guarantee that they can get scholarships on behalf of students or award them “scholarships” in exchange for an advance fee. Most offer a “money back guarantee”- but attach conditions that make it impossible to get the refund. Others provide nothing for the student’s advance fee – not even a list of potential sources; still others tell students they’ve been selected as “finalists” for awards that require an up-front fee. Sometimes, these companies ask for a student’s checking account to “confirm eligibility,” then debit the account without the student’s consent. Other companies quote only a relatively small “monthly” or “weekly” fee and then ask for authorization to debit your checking account – for an undetermined length of time.

The FTC cautions students to look and listen for these tell-tale lines:

“The scholarship is guaranteed or your money back.”

“You can’t get this information anywhere else.”

“I just need your credit card or bank account number to hold this scholarship.”

“We’ll do all the work.”

“The scholarship will cost some money.”

“You’ve been selected” by a “national foundation” to receive a scholarship – or “You’re a finalist” in a contest you never entered.

If you attend a seminar on financial aid or scholarships, follow these steps:

-Take your time. Don’t be rushed into paying at the seminar. Avoid high-pressure sales pitches that require you to buy now or risk losing out on the opportunity. Solid opportunities are not sold through nerve-racking tactics.

-Investigate the organization you’re considering paying for help. Talk to a guidance counselor or financial aid advisor before spending your money. You may be able to get the same help for free.

-Be wary of “success stories” or testimonials of extraordinary success – the seminar operation may have paid “shills” to give glowing stories. Instead, ask for a list of at least three local families who’ve used the services in the last year. Ask each if they’re satisfied with the products and services received.

-Be cautious about purchasing from seminar representatives who are reluctant to answer questions or who give evasive answers to your questions. Legitimate business people are more than willing to give you information about their service.

Ask how much money is charged for the service, the services that will be performed and the company’s refund policy. Get this information in writing. Keep in mind that you may never recoup the money you give to an unscrupulous operator, despite stated refund policies.

The FTC says many legitimate companies advertise that they can get students access to lists of scholarships in exchange for an advance fee. Other legitimate services charge an advance fee to compare a student’s profile with a database of scholarship opportunities and provide a list of awards for which a student may qualify. And, there are scholarship search engines on the World Wide Web. The difference: Legitimate companies never guarantee or promise scholarships or grants.

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