This presentation explains the ABCs of student loans which are very important to understand if you're about to graduate from college or have a son or daughter that's college bound

1. Helpful Financial Information from National Debt Relief …
Understanding The
ABCs Of Student
Loans
Maybe you're about to graduate from high school, you're
already in college or you're the parents of an about-to-be
college student. Whichever of these categories you might fall
into, you're undoubtedly facing the big question of how
you're going to pay for that higher education. If you're like
most of us, you'll need some type of loan to finance it. But
the whole issue of student loans can be very confusing.
There are some things that you need to understand and here
to help you are the basics or ABCs of student loans.
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Direct and FFEL loans
These are loans made under the Federal Family Education Loan program (FFEL
Program) and the William D. Ford Federal Direct Loan (Direct Loan) Program.
Both of these programs have about the same conditions and terms. You may
receive Direct Loans, FFEL Loans or both – depending on the school that you are
attending and the program in which it participates.
The William D. Ford Federal Direct Loan Program – these are loans provided by
the US Department of Education (DOE). Their purpose is to enable students to
pay for their education after high school. If you were eligible for one of these
loans you would borrow directly from the US Department of Education. Direct
Loans include the following kinds of loans: Direct Unsubsidized Loans, Direct
PLUS Loans, Direct Subsidized Loans, and Direct Consolidation Loans.
Federal Family Education Loan (FFEL) Program – these are loans that come
from private lenders but are guaranteed by the federal government. This includes
the following kinds of loans: Federal Plus Loans, Subsidized Stafford Loans,
Unsubsidized Stafford Loans and Federal Consolidation Loans. If you get one of
these loans, you’ll pay it back to the secondary market, the actual lender,
guaranty agency or the US Department Of Education. In the event your loan is
sold to the US Department of Education, you will repay it to he DOE.
To be eligible for a federal loan you must complete the FAFSA (Free Application
for Federal Student Aid) and must meet academic progress as determined by
your Financial Aid Office and have a cumulative GPA of at least 2.0. You must be
enrolled in school at least halftime, which is defined as six semester hours in a
term and must be either a citizen or eligible non-citizen. You must also not be in
default on any federal loan or owe a refund back to a Federal program. Finally,
you must not have already exceeded your combined loan limits.
What are the limits on federal loans?
Here are the Federal Loan Maximums for loans first disbursed on or after July 1,
2008
Classification Dependent
Undergraduate
Independent
Undergraduate
Freshman (0 to 30 credit
hours)
$5,500 – No more than
$3,500 of this amount
may be subsidized
$9,500 – No more than
$3,500 of this amount
may be subsidized
Sophomore (31 to 72
credit hours)
$6,500 – No more than
$4,500 of this amount
may be subsidized
$10,500 – No more than
$4,500 of this amount
may be subsidized
NOTE: The amounts shown in the chart above are the maximum amounts that

3. Helpful Financial Information from National Debt Relief …
you may borrow as a full-time student (12 hours per semester) for the academic
year. All annual loan limits are subject to proration and cannot exceed the Cost of
Attendance
A definition of terms
There are several terms associated with student loans and it is important you
understand their meanings. Here's a list of those terms.
Principal
This is the amount of your loan plus any capitalized interest. When you repay
your loan, your principle is generally referred to as your outstanding (unpaid)
principal balance.
Disbursement
This is a portion of your student loan that your school pays out by either applying
the money to your school account or by paying you directly. Generally speaking,
students get their federal student loans in several disbursements.
Interest
Interest is what it costs you to borrow the money. It's calculated as a percentage
of your outstanding principal balance.
Repayment
This is paying back the money you borrowed by making scheduled payments to
the loan servicer.
Repayment Period
Your Repayment Period is the maximum amount of time you can take to repay
your student loan. Your Repayment Period can range anywhere from 10 years to
30 years, depending on your loan amount, repayment plan and loan type.
Repayment guidelines
• You are expected make payments on a monthly basis • Your minimum monthly
payment must be at least $50 unless your lender agrees otherwise. • The
maximum time you will have for repayment is generally 10 years • Your

4. Helpful Financial Information from National Debt Relief …
minimum annual payment won’t be less than the amount of interest due and
payable. • You can repay your loan at any time with no penalty. This will reduce
the total amount of interest you will be required to pay on your loan. Your lender
will offer you the opportunity to choose from among these options: A standard, a
graduated, an income-sensitive, or extended repayment schedule.
Loan Fee
This is a fee that's charged for every federal student loan you get and will be a
percentage of the total amount you are borrowing (gross amount). This is
deducted equally from each disbursement you receive. It reduces the actual loan
amount you receive (net amount). However, you must pay back the gross amount.
Your loan fee amount will be in the disclosure statement you receive after the first
disbursement of your federal student loan.
Capitalized Interest
This is interest that you have not paid and that has been added to your
outstanding principal balance. And you pay interest on the increased outstanding
principal balance. In other words this means you’re paying interest on interest as
well as your principle balance. Under most repayment plans this will increase
your monthly payments and the total amount you will be required to pay over the
life of your loan.
Loan Holder
Your loan holder is the financial entity that has or holds your loan promissory
note and has the right to collect from you. In the case of Direct Loans, your loan
holder will be the US Department of Education. In some cases a reference to your
loan servicer might mean the federal loan servicer, your loan servicer or your loan
holder.
Loan Servicer/Federal Loan Servicer
This is the financial entity that collects payments from you on your loan,
responds to any questions you might have and performs other administrative
tasks that are associated with maintaining a loan on your behalf. A federal loan
servicer is a loan servicer for the US Department of Education.
Subsidized loans vs. Unsubsidized loans
If you were to choose an Unsubsidized Loan, you would not be required to prove
financial need. The US Department of Education does not pay interest on these
loans and you will be paid by your school through at least two installments per

5. Helpful Financial Information from National Debt Relief …
semester. The school will use this equation in order to determine the amount of
your unsubsidized loan.
Cost of attendance minus Federal Pill Grant (if you're eligible), minus subsidized
Stafford/Direct Loan amount (if eligible), minus any other financial aid you are
receiving.
In comparison a Subsidized Stafford/Direct Stafford Loan is for students who
have proved a financial need through their FAFSA. With one of these loans you
would be paid through your school in at least two installments per semester. Plus,
the US Department of education will pay the interest on your loan so long as you
are a half-time student, for a grace period of six months after you leave school
and during a period of deferment, which an approved postponement of your
payments.
If you’re having a problem with student loan debt
National Debt Relief will consult with you to evaluate your financial situation,
outstanding federal loan debt and your employment situation. If you’re struggling
to pay back your student loans, you should go to
http://www.studentloandebtconsolidation.com/. One of our experts will
recommend a program to help you deal with those debts and do all document
preparation. You will be charged a one time, flat fee that will be completely
performance-based. This fee will be deposited into an escrow account and we will
not withdraw our fee from that account until you have approved all the
paperwork. If we aren't able to get you into a program, we will not charge you a
cent. Once you pay your initial one time fee, there will then be no monthly
maintenance fees. This is unlike our competitors that charge upfront fees and
monthly maintenance fees as well – even after the job is done.

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Does this sound familiar?
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