Stop the Deception — Educate Yourself!

Student loans and personal finances are a lot like life. The more you know, the better off you'll be.

Take a few minutes now to learn some basic strategies. Avoiding the pitfalls to funding your future will save you time and heartache in the long run.

College is just the beginning! Educate yourself! Don’t give in to the glitz, get straight answers.

Let experienced, nonprofit lender Student Assistance Foundation help you do your homework when it comes to deciding which student loans are right for you. Call (866) 869-0567 to talk to one of our loan education counselors about your questions and to receive a free review of your current student loan program.

Student Assistance Foundation is a nationally recognized, nonprofit organization dedicated to providing students and families with the knowledge and tools to finance and pursue their postsecondary education. SAF does this by offering a range of programs that include grants, community outreach, counseling and training on education finance planning. For more information about our company, visit www.safservices.org.

Steps for Deception Rejection!

Knowledge is your best defense against deceptive advertising tactics in student loan services! Provided below are some examples of sales pitches to question:

  • Some lenders offer low, low rates. Often these rates apply, but only to a very select few applicants.

  • Other companies offer amazing benefits, but they fail to mention how easy it is to lose them. For example, one company requires on-time payments, with “on time” defined as before the due date.

  • Some lenders make sure you open their mail by making it look really, really important — U.S. Government important, even. Read your mail closely. Don’t get tricked!

  • Some lenders sell your loan without telling you. That can adversely affect your benefits. Plus, it’s in your best interest to know the companies with which you are doing business.

  • Some lenders don’t take the time to make sure they consolidate all of your eligible student loans at once. That means more money for them, and more hassle for you! You could even lose your benefits and interest rate!

  • Some companies promise cash or gift cards in return for consolidating with them. If this promise seems too good to be true, take the time to check it out! Call us and we can check the regulations for you!

  • Some telemarketers misrepresent which company they work for in order to get students to consolidate with them. Check their facts! Take the caller’s name, look up the correct number for the company with which you want to do business and call them back. Or, if they send you materials or documents to sign, make sure the logo and contact information belonging to your company of choice appears on the pages.

  • Certain companies send completed applications in the mail, asking for the recipient’s signature on the documents. This tactic is used to get the attention of potential customers. Do your research about the company if you didn’t initiate the contact!

  • Sometimes student loan companies try to scare you into acting by sending postcards that warn "You have 10 days to complete your consolidation or you’ll lose your low interest rate." Don’t let them scare you! Take the time to get the details. Rushing important financial decisions is a bad idea.

  • Lenders might ask you to sign papers so they can "switch servicers" because the current servicer isn’t doing a good job. In many cases, this is a refinance, and it’s important for you to understand the full implications of taking that step before you commit to it. In reality, the lender creates a new loan and sells your existing loan in order to collect a fee.

  • Some companies may try to lure you in by suggesting that you can consolidate your loans in a way that you won’t have to make a payment for the first six months, even though you waived your grace period. Often, these companies achieve this by giving you a forbearance when you might have qualified for a deferment from your original lender. (With a deferment, you wouldn’t need to pay additional interest to the government.) It’s just more hassle that you don’t need!

Don’t give in to the glitz! Get straight answers!
Call (866) 869-0567 to talk to one of the loan education counselors at Student Assistance Foundation about your questions and to receive a free review of your current student loan program!

Hints for Deception Protection!

Graduating from college is a hectic time and making student loan payments is probably pretty far down your list of things to worry about. However, grace periods on loan repayments come to an end six months after you drop from in-school status!

If making those student loan payments is too much for your checkbook right now, you do have options. However, don’t get hooked by deceptive tactics practiced by some lenders! Get honest advice from a loan education counselor about deferments, forbearances and consolidation versus extended repayment. Don’t rush your decision!

If monthly student loan payments are taking too big of a bite out of your paycheck, you may need to consider a different method of managing your student loan debt. Each option has its own advantages and disadvantages, so you’ll need to take some time to evaluate them and decide which would work best for your unique financial situation. On these occasions, your lender is your most important contact and should be willing to work with you to resolve the issue. Don’t give up!

Extended Repayment:
Extended repayment plans are available to anyone with a minimum of $30,000 in total federal student loan debt. As their name indicates, extended repayment plans extend the amount of time that borrowers have to pay their student loans. These loans remain separate from other loans.

Advantages include:

  • Smaller installment payments
  • Extended period in which to pay back loans (usually 25 years)
  • Borrower benefits associated with loans are preserved
  • Flexibility to switch back to a standard repayment plan at any point

Disadvantages include:

  • Each loan and lender must be managed separately.
  • Increased interest costs because the loan is stretched over a longer period of time.

Student Loan Consolidation:
Student loan consolidation allows borrowers to combine outstanding federal student loans into a single loan. The outstanding loans are considered paid in full and a new loan is issued in their place. The interest rate on the loan is determined by calculating the weighted average of the interest rates of the loans being consolidated rounded to the nearest 1/8 percent.

Some advantages of consolidation:

  • One lender, one loan and one payment.
  • One fixed interest rate.
  • The possibility of lower monthly payments, extended repayment terms, rebates and reduced interest rate.

Some disadvantages of consolidation:

  • Loans can be consolidated only once. If you already have a consolidation loan and no other student loan debt outstanding, you do not qualify for a new consolidation loan.
  • Extended payment terms take longer to pay off and may cost more in interest. 

Don’t give in to the glitz! Get straight answers!
Call (866) 869-0567 to talk to one of the loan education counselors at Student Assistance Foundation about your questions and to receive a free review of your current student loan program!

Calculation Contemplation

When it comes to your future, make sure the numbers add up!

Student loan debt calculators and comparison charts may seem like the latest, greatest thing when it comes to helping students select a lender, but they’re not all that!

Students and their parents should be on the lookout for confusing advertising tactics and be selective when it comes to choosing a student loan lender.

Student Assistance Foundation provides these tips for seeing through the smokescreen:

  • The answers some student loan calculators and charts give depend on who programmed them. So, it’s no surprise that the company that sponsors the calculator often rises to the top in comparisons.
  • Accurate student loan calculation involves a complex formula that calculators on many student loan Web sites don’t use.
  • These accurate calculations take into account a long list of factors including:
    • Fees
    • Interest rates
    • Interest capitalization
    • Qualification for benefits
    • Repayment terms
    • Deferments and forbearances
    • Penalties related to late payments, etc.
    • Borrower benefits based on:
      • Signing up for ACH
      • On-time payments
      • And much, much more.

There’s More to Student Loans than the Rates!
Student Assistance Foundation encourages students and their parents to thoroughly evaluate a variety of companies before choosing a lender. Some less obvious factors to consider include:

  • Quality of customer service. A responsible student loan company will provide students with the best advice possible, even if it means acknowledging that another company’s product is best in a certain instance.
  • Life-of-the-loan servicing. Companies that don’t sell their loans can better assure their customers that the benefits they receive when they get their loans will remain intact.
  • Commitment to the community. Some companies — particularly those that are nonprofit — return their earnings to the students and their communities in the form of borrower benefits, grants, scholarships, outreach programs and more.

You Are Unique!
To sum up, student loans and loan consolidation packages are as unique as the people applying for them. It’s difficult for an online calculator to correctly take into account all the factors that will affect your loan payments. To receive a free student loan assessment based on your individual circumstances, call (866) 869-0567 to talk to one of our loan education counselors.

In the News!

Student Loans Feel the Crunch (Business Week) — Shopping for a loan in today's market is more challenging than it used to be. Here is some advice on how to go about finding a loan that's right for you.
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Loan Crisis Goes to College (CNNMoney) —The effects of the recent credit crunch will likely be noticed by students looking to finance their college education in the form of higher rates, limited choice of lenders and more.
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House, Focusing on Cost, Approves Higher Education Act (Inside Higher Ed) — The House recently approved legislation that would toughen regulation of the student loan industry and simplify the process of applying for federal financial aid.
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College Loan Investigation Expands to Direct Marketing Companies — Students are warned about fraudulent and illegal business practices by student loan marketing companies.
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Private Loans for School – Read the Fine Print (Bozeman Daily Chronicle) — Finance experts, including nonprofit Student Assistance Foundation, warn students to read the fine print and borrow cautiously, especially when it comes to private loans to pay for college.
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Student Loan Program Has High Standards — In light of the recent press being given to questionable business practices employed by companies within the student loan industry, Student Assistance Foundation and Montana Higher Education Student Assistance Corporation would like to take this opportunity to weigh in on the issue. We are operating in an industry under fire and believe we owe it to our customers to clarify the business practices and beliefs that set us apart.
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