student loans

More college dropouts fail to repay their student loans – What are the reasons?

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The researchers have delved into the best predictors of whether or not students are able to repay their student loans – college completion. Although there are several factors which influence the education loan repayment rates, yet whether or not a student has a credential post attending college is said to be the strongest predictors of whether or not the student will repay the loan. 5 years post entering the cycle of student loan repayment, 70% of the borrowers who passed out college with a certificate and a degree have made some kind of progress while paying down the principal amount on the loan. However, for the borrowers who couldn’t complete college, the rate of repayment is also 45%.

The link or the relation between repayment of loans and completion of college has become established and you must be wondering as to why and how it exists. Read on the remaining concerns of this article to know more on the mutually exclusive explanations which establish the link between the two.

#1: Graduates of colleges usually make more money

The income made by 4 year college graduates surpass by around 50% than those people who have earned college experience but who don’t hold any degree. People who earn a big amout are more capable of meeting monetary obligations like making repayments towards their student loans. Although it is true that college graduates accumulate more debt than the dropouts, they are also able to handle their payments in a better way.

#2: College dropouts usually have less urge to pay off their loans

There’s noone who will love to pay off their student loans and it is especially more grating and saddling for those who think that they’ve not received any benefit from their education. Due to the fact that a dropout doesn’t own any credential which he can use for advancement in his career, the benefit that he got from his college education will certainly be minimum. Although several dropouts will afford such payments, who will wish to pay for anything that is just not worth it? The immediate consequence of inability to pay student loans is not serious enough. Being delinquent on you rent payments will mean eviction but not being able to pay your student loan won’t repossess your college degree. As the upshot is lenient enough, this is one more reason for defaulting.

#3: Dropouts and graduates differ in different ways

The factors which cause the gap in repayment rate between dropouts and graduates actually start existing whenever the students set their foot on the campus. Researchers can usually account for the factors like financial resources, family background, and income post-college and few observable differences always exist between all those who complete college and those who don’t.

All the three explanations usually play a vital role in deciding the repayment gap between the dropouts and the college goers. However, the decision about which one is the most important point is still a topic of debate among the policymakers.

What Types of Loans Can You Get Without a Credit Check?

When it comes time to get a loan, many people fear the credit check that goes along with it. For some people, they do not have much of a credit history; but for others, their credit score is low due to mistakes they have made. Making mistakes in the past does not get rid of the need for money now, so there are a few types of loans you can get without having to go through a credit check.

Student Loans

If you are looking for a loan to go to school, you will want to consider applying for student loans. These loans rarely require a credit check, and are based on financial need. You will need to be able to show proof of your income (through pay stubs or filing your taxes) and where you intend to go to school. These sizable loans are awarded each year, and can be used for any expense that is for your education (such as books, tuition, and rent). Finally, when you are applying for student loans, look for the loans that do not need to be paid back until after you have finished college. This will allow you to concentrate on your studies, and not the growing interest rates.Loans

Secured Loans

Many institutions will allow you to borrow money without checking your credit, if you are applying for a secured loan. These loans will not be as much as a loan with a credit check; however, they will have better interest rates than a payday loan location. Most banks will offer a secured loan with proof of income and good banking history. There are a few banks that will even offer secured loans if you complete a budgeting or credit information class. Finally, many banks will allow you to borrow against your savings account without a credit check.

Unsecured Loans

The final type of no credit check loans are unsecured personal loans. These personal loans are unsecured, and often have a high interest rate. Depending on where you apply for your loan, you may be able to make payments instead of having to repay the entire amount by a specific date. However, the interest rates may make it so that it is better to pay off the entire amount. Payday loans should be used as a last resort, and only when you need a few hundred dollars. In addition, you want to make sure the location reports to the credit bureau so your timely payments help build good credit.

Unsecured loans can often be found online, as well as in person. Money can be put directly into a checking account within 24 hours, or you can walk out of a building with cash in hand. Be careful of taking a loan out that you cannot repay. Secured loans can take your belongings in lieu of your payment, while student loans can go after your taxes. When you are building your credit, you want to make sure you take out what you can pay back, and make your payments on time.

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Tips for Student Loan Applications

Tips for Student Loan Applications

When you are applying for student loans, it is important to learn more about interest rates and find student loan information on your own. The only way that some students can attend college is by taking out the loans that they need to finance an education. College loans provide students with the tremendous ability to be able to pursue their own education at the school of their choosing. Before you fill out applications for student loans, be sure to keep these tips in mind.

Remember to Be Accurate

First, remember to provide accurate information to the lender. If you fail to disclose the other loans that you have or any discrepancies in your credit report, then a lender may find that you have acted in a fraudulent manner. It is important for you to be as honest as possible when you are filling out student loans applications. It is important for you to disclose any foreclosures or bankruptcies that you have experienced in the past.

Take Out What You Need

When you apply for student loans, you may qualify for a larger amount than what you need. You can learn more about the anticipated expenses of your education from a financial aid website or even better, from a trained professional like President and CEO Brian F Prince of Aozora Bank or others in the banking industry. Always be sure to know what the living expenses will be for the particular school that you attend. If you attend school in a large city, then you can expect your living expenses to increase due to rent that is more expensive.

If you attend school in a rural area, then you will not need to pay as much for a rental unit or for groceries. You should only take out the loans that you need. If you take out additional loans, you will have to repay those loans and interest fees. You do not want to have to repay high interest fees when you graduate from college.

Gather Your Documents

When you apply for loans from the government, you may be asked about your income level. It is helpful if you have your last year’s tax returns right next to you as you apply for loans. This will help you fill out figures for your adjusted gross income as fast as possible. You will not have to try to estimate this figure and can provide honest information to the government for your loans.

Get a Co-Signer if Necessary

Some people may be denied from student loans due to poor credit history. If you have bad credit, then you will need to find someone who can co-sign for your loans. You should try to find someone who is reliable to serve as a co-signer for your loans. People will usually choose a close friend or relative to serve as a co-signer on one’s student loans.

Just remember that if you file for bankruptcy, then your co-signers could become liable to repay your student loans. Make sure that all of your co-signers for your loans understand the risks that they are taking on by signing off on your student loans.

What Does Obama’s Student Loan Forgiveness Plan Mean For You?

What Does Obama’s Student Loan Forgiveness Plan Mean For You?

Last fall when President Obama announced his plan to ease student loan burdens, it meant that student borrowers who have made their monthly student loan payments for a period of at least 20 years after leaving college may be eligible to have the remaining balance forgiven – and for those who have worked for at least ten years in public service positions, their loans may be forgiven once they reach their ten year anniversary of public service employment.

In addition, due to the fact that recent grads are not making the kind of money that was available to them several years ago, Obama’ program also calls for the capping of monthly student loan payments at ten percent of a student borrower’ take home pay.

For those who are members of the military, there is also some good news. Anyone who works for any of the five branches of the service and who also possesses a college degree may be able to also obtain forgiveness of their student loans.

Why This Is Important Today

Anyone who has ever taken on a student loan is well aware that this obligation can become a huge burden – especially for those who are not obtaining immediate employment upon graduation.

Years ago, it was easier for those who had their pick of post-graduation jobs to segue their student loan repayments into their other living expense budgets. Today, however, things have changed a great deal and even the smallest of expenses can become a big deal for those who are unemployed or even underemployed.

What Does This Mean for Student Borrowers?

In today’ economy, many people could breathe easier by saving even just a couple hundred dollars per month on expenses – and this is exactly what this program aims to do. According to the President, even though the student loan forgiveness plan doesn’t actually create jobs or even help in boosting the economy, it will make a big difference to millions of people who are having to make the decision every month regarding which bills to pay and which to hold off on.

For those who may not fall into any of the above categories, there is another possible option available in the student loan forgiveness program. This is to sign up for income based repayment loan terms.

The good news here is that this may be available not just to those with newer loans but also older loans as well. In any case, it is a good idea to compare the type of loan possessed with the best repayment and / or forgiveness option that is available to that particular borrower.

The Bottom Line

The bottom line on President Obama’ plan is to help ensure that those who choose to continue their education beyond high school do not end up broke because of the financing that is required in order to obtain that education.

When it’ all been said and done, even though President Obama may be remembered for his health care reform, the Student Loan Forgiveness Program will likely have affected a far larger number of people overall.

George Gallagher is a writer and blogger for the financial sector of the web. He is also a consultant to graduates concerning their student loan consolidation needs.

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