Tag Archives: lenders
Student Associations Lobby for Bill to Revamp Student Loans (Page 1 of 2)
Student governments and organizations at colleges and universities nationwide are pushing lawmakers to pass legislation that supporters say will make acquiring a higher education more accessible and affordable.
The legislative measure, known as the Student Aid and Fiscal Responsibility Act (SAFRA), was passed by the House of Representatives on Sept. 17 in a vote of 253 to 171, largely along party lines. All but four Democrats voted for the bill, and only six Republicans also voted in favor. The bill is expected to be put to a vote on the Senate floor on Oct. 15.
The bill, if passed, would essentially mean an overhaul of the current college financial aid system, eliminating one of the two existing national programs that provides students and parents with federal college loans.
This landmark legislation would shut down the long-standing Federal Family Education Loan Program (FFELP), which issues federally guaranteed student loans to borrowers via banks, state organizations, and other private lenders. The government currently pays these private FFELP lenders a subsidy for the federal parent and student loans these lenders issue.
Under the SAFRA bill, all federal student loans would be issued through the second national student loan program, the Federal Direct Student Loan Program, which issues federal college loans directly to borrowers through the U.S. Department of Education, with no third-party involvement from a bank or other FFELP lender and thus with no government subsidies being paid to a middleman.
SAFRA supporters, which include many college student organizations, say that ending government subsidies to third-party FFELP lenders to originate federal student loans will save taxpayers $87 billion over the next decade which means more funds available for federal college grants and other higher education initiatives.
“FFELP is expensive for the government,” Kathleen Templin, president of the Associated Students of Northern Arizona University, told the NAU online newspaper, JackCentral. “They give money to banks, which in turn gives money to students. But because banks charge interest rates, the government pays a lot of money for lenders to give money out” (“Student Aid Act Passes in U.S. House, Due for Senate,” JackCentral.com, Sept. 24, 2009).
In fact, SAFRA allocates $40 billion of the projected $87 billion in savings to expand the Federal Pell Grant program, which targets low-income students.
Students Applaud Expansion of Federal Pell Grants
Several student governments from across the country have joined forces with the United States Student Association (USSA), the main voice for students on Capitol Hill, to organize meetings with legislators to press the importance of financing higher education in building a better American work force.
“A lot of students are not able to go to school because of funding,” said Teresa Mabry, the chair for the Women of Color Caucus on the USSA board of directors. “If were not getting [our message] out there, its not going to work.”
How To Get A Personal Loan Even With A Low Credit Score
It is important that you understand the role that credit score plays in your ability to obtain finance. It will not only determine whether you get approved or not, but also the interest rate you are going to pay, the loan amount you will be able to get and the length of the loan too.
Credit score is a number that determines your credit situation; it ranges from 450 to 850. The higher the number is, the better your financial situation. If your credit score is below 600 you will probably find it difficult to obtain a loan. However, there are some lenders willing to take the risk and offering options for people with bad credit.
Different Types
There are basically two kinds of personal loans: Secured and Unsecured personal loans. Secured loans imply that the applicant offers some kind of asset as collateral; it may be a house, apartment, car, van, etc. This kind of loans have lower interests since the risk involved for the lender is also lower as he can collect the money obtained from the sell of the asset if the client fails to pay off the loan.
Unsecured personal loans, on the other hand, do not require any collateral, thus, the risk involved for the lender is higher and so is the interest rate. However this kind of loans are the right option for those that are not homeowners and do not have other assets to secure the loan. It needs to be pointed out that though the lender has no direct legal claim over a particular asset when it comes to unsecured loans, he is still entitled to recover his money by taking legal action against the debtor and all of his properties if he stops paying the loans monthly installments. This damages claim usually takes a lot longer than the repossession action associated with secured loans and thats the main reason why secured loans are cheaper. In the event of lack of payment, the creditor will be able to recover his money sooner.
Lately, unsecured personal loans have also become a common choice for home owners. Since the loan industry has become increasingly competitive, the interest rate charged for unsecured loans has been reduced and there is not such a big difference between secured loans and unsecured loans anymore. Those homeowners who are not willing to risk their property are now opting for unsecured personal loans instead of home equity loans which used to be the common financial choice for homeowners in the past.
Online Lenders
There are more and more lenders offering this type of loans, especially online lenders who are particularly fond of the high demand of personal loans. The proliferation of online lenders dealing with personal loans has reduced the interest rate that they are charging to minimums never seen before.
So if youre in need of money, do not hesitate, a personal loan is the right option for you. See in which category of applicant you fit in; and taking that into account make yourself ready for online shopping in search for a lender. You will find out thats the easiest and more comfortable way of obtaining a loan that suits your needs.