Posts Tagged ‘student loans’

Student Loans & Obama Health Care Reform-What’s up with that???

Wednesday, March 31st, 2010

Federally guaranteed student loans were changed substantially with the signing of the two health care bills by President Obama this week.  Now why student loan bills were in the health care legislation,  only  those involved can say.

That is way above my pay grade.  And for me to understand it, it would have to make common sense-also unheard of in Washington lately-regardless of your political affiliation.

The Wall Street Journal had this article about the school loans and the Health care law today.

Student Loan Changes in the New Health Care Bill:

  • The money for guaranteed school loans will, as of this fall, be from the Federal Department of Education-no more shopping around at different banks.
  • The maximum amount of repayment/year will  gradually decrease from 15 % of income to 10%,over the next 4 years. (Already true for nurses working for non-profit hospitals and clinics.)
  • The amount of money available for Pell Grants-(which don’t have to be repaid) will go up-although applications are up 20% this year due to the economy.  So apply quickly if you or your parents income levels qualify -(usually less than $50k/yr-but is based on family size.)
  • Provisions for debt management education, for low income recipients, was made to the tune of $750 million……
  • Private loans may still be available between you and your bank-but they will not be guaranteed by the feds.-so good credit will be required-especially in this economic environment.
  • A decrease in annual interest rate of 7.9% under the direct program, compared with 8.5% under the old program.

Finaid, a student loan website,has  good information about the status of student loans of all types, so check it out if you have questions.

Student Loan recommendations from me:

If you have questions or comments, let me hear from you.  Hit the comment button….

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Posted in student loans | 6 Comments »

Student Loans: The Great Lie-5 Ways to Avoid Them!

Tuesday, February 16th, 2010

Student Loans:

Student loan patter:

Student loans are worth the investment.  You will earn a lot more money, with your degree, and it will be no problem to pay back.

These are just a couple of the lies, or at best,  mis-leading statements about student loans.

In this article, in the “Wall Street Journal”,  Mary Pilon reports the case of a student loan, that had ballooned to $555,000.  Yes, that is a cool 1/2 million plus.   The loan belongs to a family doc, so what’s the big deal, they are all rich aren’t they??

Well the average salary for a family practitioner is $145,000 bucks a year-great salary, way above the national average for salary.

However, with a loan that size, with interest accruing, even if half her salary went to pay back the loan, it would take more than 10 years to pay that back.  So great salary, ain’t so great if half of it goes to pay back your student loan.

Do I think it is evil to borrow money to go to college.  No, of course n0t.  Do I think it can be stupid to borrow $100,000 to pay for tuition, room, board, and beer, for a degree that pays on average 40, or 50 grand a year or less-yes!

So, before having a  knee-jerk reaction and borrowing money to go to school.  Check out ways to decrease your burden:

  • Go to a less expensive school.
  • Go to school part-time.
  • Drive a clunker, and use car payment money to pay for food, or books.
  • Join the service, and let them pay for your education.
  • Get your employer to help pay the bill.

The good news is that you can get an associates  (which usually takes 3 years)  RN degree at a public institution for very little investment.  Even a four year BSN at a public school is a good investment-but it can be a great investment, if you limit your borrowing.

So before you call Aunt Sallie Mae, to borrow a hunk of cash, think about it.  Make sure there is not a better way.

And if you do borrow, there are ways to help pay back the money-see this post about one of the federal loan repayment programs -(NELRP)-  for working in an under-served hospital or clinic-as a nurse.

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Posted in Personal Finance 101, Uncategorized, student loans | 1 Comment »

Student Loans: Blessing, or a Big Drag?

Wednesday, October 28th, 2009

I have recently written an article about student loans.  The gist of the article is that in this economy, more and more out of work people are going back to school.  Many of them are choosing student loans to pay for their education.  And a great number of them are choosing nursing.

The value of additional education is rarely challenged.  Most studies show an increase in average salary and lifetime pay for those getting a college degree or finishing a technical program.  However, getting out of school, with an above average paying job, like nurses, with a college loan debt of $100,000-would that be smart?  Of course not.  It will take years of struggle to pay those loans back, with enormous stress along the way.

So what do Millionaire Nurses do when faced with this sort of situation?

  • Check out all scholarship opportunities.  These can include hospitals that will pay for school for a work obligation, financial needs type scholarships, military scholarships, and good student scholarships.
  • Work and school part-time. Pay for school as you go along.  Many folks have worked nights, and finished their education during the day-how is that for dedication.
  • Take a year or two off from school, work, live on nothing, saving up, then going back to school.

All of these options take sacrifice and dedication. But isn’t that what being a nurse is all about. 

I want nurses to excel in their personal finances and begin building wealth as soon as possible.  That cannot happen unless you get out of debt as quickly as possible and learn to begin saving, investing, and growing your net worth.  So student loans are not always a blessing.  But with smart planning you can minimize your student loan debt and make progress towards your goal.

Let me know your thoughts and student loan stories-successes and horror stories alike.  And for a copy of my free e-book, “Emergency Money Resucitation” go to my website.  Signing up will also provide you  with a free mini-course on managing your personal finances.

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Posted in personal finance, student loans | No Comments »