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FDIC Consumer News – Summer 2007 – Research Your Options When Paying for School


Related Financial Services - The following list of company and services directories offer a wide variety of programs for consolidating bills and other similar services, such as a getting a mortgage refinance interest rate quote from a lender or an online quote for life or car insurance.

  • Credit Card Debt Consolidation - Learn about the debt consolidation process and review detailed listings for lenders and services offering to help consolidate your debts.
  • Consumer Debt Management - Having trouble keeping up with your monthly credit payments? Compare debt management companies in this online list that can try amd help you get a grip on your personal financial situation.
  • Personal Loan Rates - Shopping for a personal loan online? Need to consolidate debt, but do not want to put up collateral (such as your home or car) as security? These loans are typically referred to as unsecured or signature loans, because only your signature may be required.

Paying for College ... the Smart Way

Loans for higher education can be costly so take the time to research your options


41. Take the time to research your options for a loan. If you think you need a loan, do your homework and ask lots of questions before settling on one. Among the many options are federal government loan programs, including "PLUS" loans for parents and Perkins and Stafford loans for students (usually with fixed interest rates and some form of deferment on repayment until after graduation). Also available are loans from private financial institutions and state government agencies.


Of course, you'll want to know whether a loan is fixed- or variable-rate and what could trigger a rate increase. But student loans may have unusual features to consider. In particular, ask about any options for delaying payment until after graduation and any policies on "forbearance" (temporarily reducing or postponing payments from a borrower in financial distress). Also find out about any rebates for on-time payments and other incentives for good performance.


"There are often substantial differences between private loans and student loans guaranteed or insured by the government," noted Luke Reynolds, an FDIC Community Affairs Specialist. "A private lender likely will offer both types of loans, so be sure to ask questions to fully understand the pros and cons of any loan product."


Your state's department of education and the college's financial aid department may be good resources. Don't depend on your school to pick the right loan or lender, though. Some colleges and private lenders have been scrutinized for conflicts of interest in steering students toward "preferred lenders."


Summer 2007 | Try to Save and Not Borrow | Research Loan Options | Think Before Borrowing Against Your Home | Shop for a Good Price on a College | Youth is Not an Excuse for Defaulting on a Loan


FDIC Consumer News is published by the Federal Deposit Insurance Corporation


FDIC Consumer News is produced quarterly by the FDIC Office of Public Affairs in cooperation with other Divisions and Offices. It is intended to present information in a nontechnical way and is not intended to be a legal interpretation of FDIC or other government regulations and policies. Mention of a product, service or company does not constitute an endorsement.


Find current and past issues of FDIC Consumer News at http://www.fdic.gov/consumernews. Refer to this same index to locate the issues that are specially formatted for being reprinted in any quantity.


To receive an e-mail notice about each new issue of FDIC Consumer News posted on the FDIC Web site, with links to stories, follow instructions posted at www.fdic.gov/about/subscriptions/index.html.


Last updated on 8/10/2007

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