College Students and Loan Payback: Lending Agencies Make Profits Preying on Students and Parents

Student lending organizations and collection agencies make money various ways. One of the most profitable is to convince graduates, who have already borrowed to pay tuition and fees for four years, to take out further loans for advanced degrees.

The agencies defer interest payments on the original loans until the student graduates with his or her new degree. Then they add the amount of the interest deferred on the original loans with the interest deferred on the graduate school loans to the principle on both the first four years and the advanced degree to arrive at a massive amount of money owed by the graduate.

Jorge Was Such a Student

I sometimes write about a wonderful young man whose name was Jorge. He was the first of his family to attend college. To do so Jorge had to take out student loans. He could not get a job after his four years so a representative from a collection agency suggested he earn an advanced degree. Although the lending agency deferred his original loans, they accrued interest and, along with his new loans for graduate school, came to an extraordinary amount (over $150,000).

Jorge, as with most students, could not get a professional entry-level position after he earned his graduate degree. The pressure from collection agencies was so great that he felt he had no choice but to take his own life. (I continually counsel graduates in this situation that suicide is never an acceptable alternative.)

Student Loan Organizations Make Lots of Money Off These Unfortunate Students

Many students still cannot get jobs after graduate school, and neither the banks who loaned the students their money, nor the collection agencies are sympathetic to this situation. Quite frankly, this is a successful gambit of the student loan industry: Lend students lots of money, defer these loans for many years during which they earn lots of interest, and charge huge late fees and collection agency charges when the graduates cannot pay them back.

Parents Often Use Their Own Savings to Pay the Loans

If the student does not commit suicide (many lending agencies can collect insurance on the loan) the lending agency (including the Department of Education) passes the loan on to collection agencies who will put an excruciating amount of pressure on these hapless graduates. The unemployed graduates often have no choice but to appeal to their parents to help them out of their predicament. The parents, who are now preparing for their own retirement, are now forced to take out a mortgage or home equity loan. Then the student loan (in many cases in excess of $100,000) is now paid.

Think of what has just happened here. The lending companies and collection agencies have extended exorbitant amounts of debt to students who never had any chance of paying their loan back. When mom and dad pay back the debt with their own retirement savings and home equity loans, the agency makes huge profits on the current interest, deferred interest, collection fees, late fees and various other charges.

Politicians Also Make Money Off Student Loans

No wonder the lending agencies dole out so much PAC money to politicians. They need to keep bankruptcy, as an alternative, out of the picture. If the government passed a law that gave graduates the same right to declare bankruptcy as other citizens, a major form of revenue for the lending industry and politicians would be destroyed.

My point is that there is no excuse to refuse bankruptcy to any graduate who reaches such a point of destitution. When graduates take their own lives or parents lose their life assets and life savings to help their children out of this mountain of debt we must change the laws.

This article was created by J Roberts also known as Professor Roberts. He is a noted counselor to parents and students alike and is the author of the book "Colleges Behind Closed Doors: What You Need to Know (Long) Before You Go." He is an authority on the inner-workings of colleges, college preparation, selection, and finances. Visit him at http://www.ProfessorRoberts.com.

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Don't Let The Average College Tuition Cost Stop You

Is there a legitimate way to beat the average college tuition cost these days?

That was a question my wife and I had as our son was close to completing his senior year of high school.

We did some painful research and discovered that average college costs had increased "a little" from 30 years ago when we attended college.

When I say " a little", I mean a little too much to believe. State college tuitions for 1 year in 1978 was around $1000 in the South. Now, you are looking at $6000 - $8000 a year.

This is outrageous. And I am not even including room and board or miscellaneous expenses.

It gets even more unbelievable. If you look at the private universities, tuition shoots even higher to around $30,000 a year or more. Harvard University, here I come.

Our son wanted to get a bachelor's degree in business. We didn't know how we could possibly afford it.

We were not going to go the route of student loans either.

We found out that necessity truly brings forth inventive ideas. Maybe it was just stubbornness on our part.

Whatever it was, we were determined to find a way to make this work, and did we get the surprise of our lives.

There is actually a very simple way to slash the average college tuition cost.

You can do this by using 2 testing credit services: CLEP and DANTES.

Both of these testing service programs provide a college student with the opportunity to obtain college credits in a variety of courses.

CLEP offers 33 college level courses in literature, the foreign languages, history and social sciences, science and mathematics, and business.

DANTES originally was developed for military personnel, but is now available to anyone. They offer testing credits in 38 different college level courses. Their courses also cover a variety of subject areas such as math, social sciences, humanities, business, physical science, and technology.

How much can you save with this strategy?

You can easily save more than 50% from the cost of college tuition.

These tests are taken at testing centers across the country. All you need to do is find a center close to you and register to take a test of your choice. These tests are almost all multiple choice, but you definitely need to be well prepared.

We have done it and so can you if you take the right steps to get prepared!

The great news is that today's average college tuition cost is no longer an obstacle to your college degree.

Get more details on how to slash today's AVERAGE COLLEGE COST by more than 50%.

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Can You Put College Tuition Increases on A Crash Diet?

If you haven't noticed, these college tuition increases are really tipping the scales. I think it's time to prescribe some major dietary changes to these bloated college tuition rates.

Does anyone actually have the power to do something about this?

You're about to find out what happened with our family.

Before I do that, let's take a brief look back into tuition prices in the past. Grab the ice cream because this going to be shocking. Almost 40 years ago, the average tuition for 1 year was only $500. By the early 1980's, it doubled. By 1990, it more than doubled again to around $2300. In the year 2000, it was about $4000. Here we are in 2010, and the average college tuition cost is $7000 per year. And this is for the state colleges.

Now my wife and I are raising 8 awesome children with one who recently graduated from high school. He wants a business degree and I'm looking at our savings account. We decided we were not going to keep feeding calories to the college system.

After doing some research, we excitedly found a legal and ethical and moral way to reverse this gluttonous trend of college tuition increases.

Here's what we found:

1) Avoid tuition fees for the first 3 years of college through using 2 awesome testing credit programs called CLEP and DANTES.

2) Enroll in a regionally accredited on-line university for your senior year and transfer up to 90 college credits there.

3) Complete this last year through online classes and graduate with a bachelor's degree.

Not only will you get huge tuition savings, but you will save 10's of thousands of dollars on room and board costs.

College tuition increases can now be a thing of the past for your family, too.

Get the details and help you need to trim all the fat off today's AVERAGE COLLEGE COST now.

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How to Get A College Tuition Loan

Getting a college tuition loan seems hard at first, but it gets easier as you learn how to do it and what to look for in a loan.

Here you'll find several places to look for a loan, and what kind of loans work best. These pointers are guidelines, of course, but can help you get better loans.

First, places to look for a college tuition loan:

1. Your bank or credit union

2. Your school

3. Federal financial aid (using the FAFSA form)

4. State financial aid

5. Independent lenders like Sallie Mae, Citibank, Chase, and so on.

What Makes The Difference in a College Tuition Loan

Borrowing money for school hinges on just a few points. Your credit is important typically in the case of a private loan. Your school mainly becomes a factor because it needs to participate in the government financial aid system if you use government aid. Qualifying for government aid, whether grants or loans, depends on your income or the income of your parents.

Beyond those, you may have to be careful of hitting the ceiling on your government loans, or limiting yourself to less private loans.

The above comprise the top sources for a student loan. I'll give you a few more below, less common.

Get The Best Student Loan You Can

First, look at these things to remember when you look for a college tuition loan. Remember, I list these as guidelines. If you can get all of them, great. If not, get the best you can, and understand how the loan characteristics affect you.

1. Low, fixed interest rate

The benefits here should be obvious - stable and hopefully less interest, lower payment, faster payback. A variable interest rate opens your loan up to a higher rate. Of course, during recent events, many variable rates have dropped, but that is not the rule. With a fixed rate, you can set your payment and not have to worry that it will rise over time.

2. Forbearance and deferment available

These can be very helpful. Deferment and forbearance allow you to miss payments at certain times. You will have to apply for these, but the application is easy.

In many cases, when you do not have a government subsidized student loan, you will your interest capitalized, which is bad and increases the balance of your loan.

However, having the safety valve of deferment and forbearance available is a good idea in any college tuition loan. Just don't use it much. If you have to use it, often you can still pay the interest payment on your loan to avoid capitalization.

3. No capitalized interest

When you use forbearance or deferment, many unsubsidized loans will capitalize your interest. This means that the bank adds it onto the loan, and you then pay interest on the capitalized interest.

Your small loan can become much larger very fast - bad idea. If you can, get a loan that doesn't capitalize interest. This one can cost tens of thousands in your future.

4. Consolidation

When you finish school, you might have more than one loan. If so, consolidation may help you get a lower payment or a longer payoff. This can really help you.

Those are the most important options to look for in a college tuition loan.

Emergency Sources

When you can't find a loan from the tuition sources listed above, consider some less common places. IF you have a 401K, you might want to borrow from it. Understand that this may mean you will not have it to grow for your retirement, but you might finish your degree.

Another place to look, your home equity loan. Many people have used a HELOC to go to school. And finally, if you expect a sizable tax refund, use it for tuition instead of a cruise.

Now get to it!

Need more info? Come to Beat-Tuition.com and download my free ebook on grants and scholarships all over the US. Thousands of students every year get free money for tuition. I can show you several places - I've done it. You'll find tons of sources in my free grants ebook at Beat-Tuition.com

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How To Get Free Money For College Tuition Without Credit Checks Or Student Loans

If you wanting to be successful in school, you are going to have to learn how to get free money for your college tuition. With ways that don't involve credit checks or high interests student loans.

You are going to have enough stress studying new subjects, passing tests and learning how to get around on campus.

So, getting rid of the financial stress is key in you having an enjoyable school life!

Most students find themselves trying to meet all sort of financial aid deadlines. So, what ends up happening, usually, is the government not completely giving you what you need.

So, you end up rushing to get student loans just so you can meet your deadlines and get your books on time. What you didn't do is read the fine print on your loans...

Did you know the average college graduate will end up paying on their student loans for over 30yrs plus?

It's so sad, because if they had just got a little bit more smart, they could have learned countless ways to get money for college tuition, without the loans or extensive credit checks.

Here are a couple very effective tactics you can use today, to insure you get the funding you need without hassles...

First, I know you already know this....Use the internet to its full potential!

If you are reading this article, you are already using the internet to find money for college, but are you using it effectively?

To be the most effective possible, you have to find little known websites that have what you want.

I'm talking about education and financial aid blogs.

These websites are like the control centers for information when it comes to financial aid, techniques to find money and government funding.

You will find links, private parties looking to sponsor students and many other little known aspects of getting money for college fast... And without high interest loans!

Sometimes you might even find a website that has funding programs of their own. With very few people competing for them.

My next tactic involves being a go-getter...

Build yourself a resume, with the benefits of a business sponsoring you.

Many athletes and event planners look to businesses to sponsor them. It's great exposure for the business and at the end of the year they can use it as a tax write-off.

Once you have built a resume and the reason why its a good investment to sponsor your college education. Start by approaching business you and your family know personally.

You will find that 1 out of 3 will be interested and help you in anyway they can. I have personally, witnessed checks of $100 all the way up to $30,000.

Don't take these simple techniques for granite, use them and you will get all the free money for college tuition you will ever need.

All with credit checks, student loans or hassles...

If you are serious about getting money for college tuition, go to our website and find out what you exactly qualify for today,
plus many other resources to little known school funding options, click here

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Paying Full Price for College Tuition - Who Does It Apply To?

Many people ask the question, who has to pay full price tuition, and who gets the discounts? Many people will then assume that since their parents make a certain amount of money that they will not be eligible for grants from the government or from the colleges or universities they are applying to.

If you think about college tuition logically, then the students, who can't afford the maximum tuition, were usually paying the maximum amount. If the college accepts you as a student, but they really do not want you to attend or do not like you, then they will require you to pay the full amount. Believe it or not, there are some students who do not apply for financial aid in any way. The colleges and universities will automatically assume that the students can afford the full tuition price. If you come from a family who is worth millions of dollars, the chances are you will not need the money as much as another student coming from a working-class family whose combined income is $50,000 per year.

By marking up the sticker price for college, then offering higher discounts for students who are in need, everyone thinks that they are getting such a good deal. This is all just part of business in basic psychology. Member, colleges and universities are a business that makes money when you attend. The college admissions officer is the salesman for the college.

Pvt. Colleges that are very expensive, usually about $15,000 per semester, generally offer more of a discount for students in financial need. Many colleges stand behind the only money they offer and forms of assistance to students are the ones who are in need of assistance. Pvt. Colleges can do as they please with their own money, so they make their own rules and break their own rules. Whether this is fair or not, this is totally legal because it is a private institution.

There is a way to get a discount off of the sticker price if you are paying with cash and you have no financial aid assistance. This is where negotiation and bargaining comes into play. You may need the help of your parents, since they will most likely be the ones writing the check. Many colleges and universities offer discounts in the form of merit scholarships, which can be determined on an individual needed basis. Colleges would rather use the word merit scholarship, instead of calling it a discount. It is really all the same, just with different names. Make sure to ask about this discount to save money on your college tuition.

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The Best Investment to Start Saving for Your Child's College Tuition

One of the biggest issues for new, or relatively new, parents is how to pay for their child's future education. It is no secret that the cost of a collegiate education is skyrocketing. The average cost of tuition for four years at a public state university has risen to around fifty thousand dollars. For private schools, this number can exceed two hundred thousand dollars. With a rising percentage of students taking five or more years to graduate instead of the traditional four, this number can be increased by twenty percent or more. And these are 2011 prices - just imagine what they will be in 2029, when today's new children will be at college age! Parents have to prepare as if these costs will continue to rise.

Not long ago, saving for a child's education was a luxury more than a necessity. Students could always take out loans and pay for their own education, then pay it out over a few years after they get a job. In today's world, this leads to students being saddled with a ton of debt coming out into an uncertain job market. This is not an ideal scenario that any parent would want for their child. The ability to pay for an education straight up is more important now than ever before. As loan debts and interest rates on that debt rise over time, this becomes even more important.

So, how should parents save for this huge cost going forward? I am not about to make specific investment advice, especially in this economy. Rather, the best solution is to put a certain amount of money away from each pay check and invest it into safer investments for that have lower returns, but much less risky. This way the number not only will grow with monthly allotments, but the money will also compound on a regular basis growing on itself.

Not to venture into a finance lesson, but this is best displayed through a hypothetical scenario. We will start with the month of a child's birth. Let us assume a take home salary of $3000 per month. Let's put 5% of this ($150) into the college on a monthly basis. For the purposes of this study, we will ignore the possibility of any future raises or escalators. Obviously those would significantly help the contribution. We can put this money into a safe steady growth fund - for the purposes of this hypothetical, we will say 3% annually. This amounts to 0.25% per month.

I will not bore you with the financial equations, but after 1 year, this account will have grown to $1824 on a principal of $1800 monthly installments. Within 2 years, this account will have grown to $3705 (on a principal of $3600). Within 5 years, the investor will have almost $9700 on a principal of $9000. After 18 years have passed, this account will have accumulated almost $43000. Now, that is a pretty nice nest egg to apportion to your child's education. Obviously, if you contribute more or net a higher rate of return - this number will be significantly higher.

How do you intend to save for your child's college education? Or, even more expensive, medical school tuition? Here's an article on the rising numbers from Chicago Tribune. Learn more about financing here.

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