Repaying Your Student Loans

You’ve attended college or received other education beyond high school, and you received federal student loans* from the US Department of Education (ED) along the way. You’re now about to deal with paying them back. You’ll need to know how to manage your student loan debt to avoid repayment problems. This publication explains available repayment options so you can successfully repay your debt. It will also tell you what steps to take so you won’t get behind in payments or go into default.

Federal student loans are real loans, just like car loans or mortgage loans. You can’t just get out of repaying a student loan if your financial circumstances become difficult, unless you qualify for bankruptcy. But, it’s very difficult to have federal student loans discharged in bankruptcy; this happens only rarely. Also, you can’t cancel your student loans if you didn’t get theeducation you expected, didn’t get the job you expected, or didn’t complete your education, unless you leave school for a reason that qualifies you for a discharge of your loan**. Remember, your student loans belong to you; you have to pay them back.

*1)Federal Perkins Loans

2)Federal Family Education Loans (FFELs), consisting of subsidized and unsubsidized Federal

3)William D. Ford Federal Direct Loans (Direct Loans), consisting of subsidized and unsubsidized Federal Direct Stafford/Ford Loans, Federal Direct PLUS Loans (for parents who borrow for their children), and Federal Direct Consolidation Loans

** For example, you might have left school because

1)You became totally and permanently disabled. However, your condition cannot have existed before you applied for your federal loan, unless a doctor certifies that your condition substantially deteriorated since the loan was made.

2)Your school falsely certified your eligibility or signed your application or promissory note without your approval.

3)Your school closed, and you couldn’t complete your program of study. In this case, you cannot have withdrawn from the school more than 90 days before it closed. (The day the school closed is defined as the day it stopped providing educational instruction in all programs.) You don’t qualify for a loan discharge if you withdrew before your school closed, but you completed the program of study for which the loan was intended either by transferring academic credits or hours earned at the closed school to another school, or by any other means. Note that the state agency or other nonprofit agency that guaranteed the loan makes the final decision on whether your loan is eligible for discharge.

Students Loan - Tell me more

Are you seeking funds to finance your education at a college or university?
Do you need funds to pay for your degree or non-degree courses?

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Rise in student loan over-repayments

Thousands of graduates are unknowingly being overcharged for their student loans every year, according to figures obtained by the Conservative party.

Government figures show that more than 21,000 people continued making payments to the Student Loans Company last year even though they had already repaid their debt.

The figures, obtained by the Tories in a parliamentary question, show that 21,774 graduates paid too much last year compared to 12,638 overpayments in 2004, 7,686 in 2003, 2062 in 2002 and 267 in 2001.

David Willetts, the shadow education secretary, said the "Kafkaesque'" system was not fit for purpose. It is estimated that about 1.4 million people are repaying loans but that figure is expected to balloon following the introduction of tuition fees this year.

Once graduates earn £15,000, the tax office automatically deducts 9% of their salary. When a loan is close to being repaid, the Student Loans Company sends a letter to the graduates, requesting them to send their P60 or pay-slips for the current tax system. The company then sends a "stop notice" to the HM Revenues & Customs.

A spokesman for the Student Loans Company told the Daily Telegraph that all additional payments were refunded with interest at the end of the financial year.
However, Mr Willetts told the Telegraph: "It should be simple to redesign the system so that the loans company is regularly informed about repayment progress."

Student Loans

Leaving their university education with a debt average of £12,000, it seems to look as if students, who are finished with their education, don’t seem too worried about having to pay off student loans payments for a few years after leaving.

And there seems like there is not going to be any let up in the amount of students who are following in behind the ones who have left university with the same type of attitude to student loans. With this in mind a rise in this figure for the coming year is also expected.

Every student who starts on the road to a university education this year, is due help on the cost of it, and the help that they get has seen a increase in the help that they receive from the government for tuition fees, though they have set aside a little more for less well off students.

Don't Let Finances Get In The Way Of Education
The thought of going to university can be an exciting time for any student who is considering it and one of the main thoughts on the decision is always going to be about money and how will they cope financially. If it is something that you really want to do and to be honest it will be worth it in the long haul of life, then you should go for it. Though dealing with the cash issue won’t make it easy, but if you do apply for a student loan, then you will have to show that you have grown up and let it help you get the education that you are there for, by being responsible with it.

This is not to say that you can’t enjoy that infamous student life and stop you having some fun, but make sure that the loan you get is first and foremost for your degree and if you have any spare then the world is your oyster. Since, once you are finished with your education, you don’t want to be paying off a student loan for years to come that is nothing more than a bar bill. Or maybe you do..

So how does a student loan work? Well first of all the financial situation of a students household will be taken into account and the college or university that you have set yourself on going to, also makes a difference.

Qualify for Student Loans
For students who come from a family that has an income under £22,010 will not have to pay any fees at all and families who have an income in the region of £22,010 and £32,744 will receive some help, with a contribution to help them start out. Only students with a household income of more than £32,000 will not receive help and will have to pay full fees.

But extra help is on hand for students who are coming from a household where they are earning less than £15,580, where a grant is paid by the government, to help them get as much chance of the right education as the better off, this grant will be in the amount of £1,000 for each year that they are there. With even more help made available, for students who have disabilities, came from care or are dependants.

All students who start up in college or university are eligible to apply for a student loan, which can be anywhere up to a maximum of £5,175 for every year that you stay in education and will be deposited into your bank account by the Student Loans Company (SLC).

So how and when do you start to repay your student loan? This is made easy for you as you will not be required to pay anything back while you are still in education, it will only be paid back, when you have got what you went there for by graduating or simply if you leave the college or university to take up work, though you will only have to pay it back if your earnings exceed £15,000.