Why not say what Astrive Monticello or about your student loan!
At that time, the scores of all students in Florida (where in vivo) and across the country are bombarded with advertisements for companies such as student loans and Astrive Monticello: "$ 40,000 in two days! "Best interest rates if their parents co-sign!
This coincides, of course, by college acceptances. Many parents and students are called open letters that were admitted to the college of their choice, only to have the euphoria that met briefly with the harsh reality not have the slightest idea how the hell is going to pay college.
One is funding. Unfortunately, the "rules" behind how to maximize the money you are eligible to be complicated, to say the least. Most families (78-90% according to some estimates industry) to complete the FAFSA and other forms incorrectly. This results in students who receive less aid than they would normally have qualified for, or sometimes no help.
Too often, the student becomes an alternative means of financing universities: private student loans. However, think twice if you plan on financing their college education this way.
Before signing your life, take a deep breath and consider what may be getting into.
Most parents and college-bound students do not realize that borrowers are not so distant cousins how to make high-risk mortgage borrowers. Many experts, including existing businesses, we believe that the student loan market is ready to experience the devastation currently affecting the industry subprime mortgages.
To be sure, when I rant on the similarities between high-risk loans and predatory lending students, I am funny, not exactly in most rooms. I am, and let me tell you, the similarities are startling.
To begin, Student borrowers and holders of subprime mortgages are poorly informed about the financial affairs of the company (now excluded, of course) – more specifically, the consequences of their decisions to borrow.
Not exactly the news that mortgages adjustable rate (ARM) reset to higher interest rates are the main perpetrators of crimes, defaults, foreclosures and credit ruined.
Here's how – companies offering low mortgage rates teaser for homeowners in the door, but often funds are not even required not sufficient to pay interest on loans. It gets worse.
Then, after the "arm resets" The owners are stuck with wage increases and to the alternative unpleasant and costly refinancing. This has worked well for years, because he was relatively easy to qualify for new mortgages, but this optimistic scenario has frozen any collapse of secondary market mortgages, falling property values and a slowing economy.
The result: the appropriation of high-risk borrowers are denied, were forced to remain in their non-refundable and has produced outstanding or, unfortunately, foreclosure. Right here in Florida and across the country, college graduates in charge of student loans face similar problems. While mortgage companies, lenders offer a rate that adjusts upwards ridiculous (almost always up, not down, alas) after the introductory period.
Then comes the inevitable late payments, defaults, breaches and credit problems that followed. It's a slippery slope! The result – the payments get some Jacked years after the loan originated. And payment of the needle almost always catch new borrowers by surprise. Like their counterparts in of high-risk borrowers, holders of student loans are not capable of payments once the loan is adjusted upward.
In most cases, student borrowers of loans "subprime" and asks the time they were misled about the conditions of their loans. They cry that Lenders have vital information hidden or overlooked important information.
The good news is that Congress has begun call for greater regulation and disclosure in the student loan industry.
Do not hold your breath, though. This could take years. Your best option to protect yourself is to use your own brain – ask the right questions, listen to the answers. "What is the interest rate? "When the loan is adjustable, anyway? "" If I can not make a payment, which is the consequence? "?"
To be fair, the student lenders provide this information voluntarily, which helps borrowers make better decisions. But it is the exception than the rule.
Another positive trend is that many colleges and universities have become more proactive in supporting education students about all the details surrounding student loans. Many schools have made available a loan of "consultation" provided by your financial advisor. And in some cases, especially among the elite institutions of higher education, financial aid, property of little or no loans, opting instead for the money "free money – grants and scholarships. The best schools, including Harvard, Princeton and Yale are the leaders in this field.
There is clearly no easy solution to this problem. However, it is imperative to consider the example set by the collapse of subprime mortgages and avoid consequences that accompany credit and irresponsible lending.
College Pete and I are debt-adverse, and we urge all do to minimize or eliminate the house through the window, ready for college. Think twice before signing the loan!
About the Author
The author, Andrew Lockwood, J.D. is co-owner of College Planning Specialists of Florida, Inc. For information such as “7 Deadly Mistakes All Parents Make When Applying for Financial Aid,” visit his website, http://www.CollegePlanningAdvice.com .
Arthur R. van der Vant, President of Major Enterprises, Inc.
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