The “Super Committee” also known as The Joint Select Committee on Deficit Reduction is looking for ways to cut $1.2 trillion in deficits over the next decade. To achieve this goal, the Super Committee must watch out for a flaw in the federal student loan program that threatens the federal budget.

The federal government guarantees repayment of most student loans meaning each loan default eventually piles updeficit. Since majority of the graduates were paying loans off, the cost of defaulted loans was negligible.

However, the rising cost of defaulted student loans is now getting more attention. According to The Department of Education the overall default rate for federally guaranteed student loans had risen to 8.8percent, up from 7 percent the previous year. But that 8.8 percent refers only to the 320,000 graduates out of 3.6 million who defaulted within two years of their first payments being due. Four years out will be worse.

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The Department of Education tries to prevent students from falling into the default category by postponing the repayment requirement through deferments and since the repayment requirement begins only when students are out of school, they enroll in graduate or additional undergraduate programs. But in time, the student’s only permanent solution to student-loan debt is obtaining a job that pays well enough to start repaying the loan. However, they can’t find jobs because of the weak economy and a flaw in the student loan program.

Congress provided grants to help kids go to college. These Pell grants give children the chance to prepare at college for rewarding careers. Congress also established numerous guaranteed loan programs as supplementary student aid for college costs – student loans must be repaid after graduation or after leaving school without graduating.

The Super Committee should recommend that student loans require proof of ability to repay them by scrutinizing students’ academic records, credit histories, and other criteria of credit-worthiness. Tightening eligibility for student loans would treat student loans as risky investments and ensure they are given only to student borrowers with a good chance of repaying them.

Related articles

• Congress Cuts, Obama Attempts to Collect as Loan Default Rates Rise (usnews.com)
• A guide to Obama’s student loan plan (AP) (old.news.yahoo.com)

Various Forms of Assistance for Responsible Homeowners

The latest effort of the Obama administration to assist the housing market is aimed at homeowners with solid credit and is making on-time payments on their mortgages but is unable to refinance because they own underwater homes in falling markets.

President Obama is set to announce his plan in Nevada, a primary state that he hopes to win in 2012. Since the peak of the housing market bust, the prices of home in Nevada fell by 53%. In the metro area of Las Vegas, the prices decreased by 59%. It has been reported that there has been no refinancing activity for borrowers who are underwater in the area. The president’s plan is designed to change this.

A series of changes that will lighten the load of responsible borrowers at the moment will be announced. This is to help them take advantage of the good mortgage rates at present. According to the new regulations, homeowners with good credit who has missed a payment for a period of one year can still be considered as a responsible current borrower.

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The advice of the administration officials is that the homeowners will no longer be requested to get an appraisal or required to undergo a full credit check. According to the official, if the payments have been current, it is already the lender who owns the risk. They also plan to get rid of the so called risk based fees that are currently charged on bad credit homeowners. This will raise the benefits of refinancing and eliminate hassle.

The administration official informs the CNN that they have been working out and coordinating the issue with FHFA and the banks. Then, the FHFA will contemplate on the proper guidelines and inform banks about them by November 15. Homeowners can start applying for the refinancing until after the 15th of November.

Between the present days until the 15th, the FHFA can think of including another category of homeowners in the plan. It is possible that the changes will be extended to bad credit homeowners who have home equities and have been current in their payments.

A government official shares that plans are continuously made to address the larger housing problems that affect the entire market. These will be announced in the future.

Previously, the administration already announced the forbearance for homeowners for up to one year if they lost their jobs. This allows homeowners to delay mortgage payments while unemployed.

Related articles

• U.S. throws lifeline to underwater homeowners – Reuters (news.google.com)
• Refinancing plan for US mortgages (bbc.co.uk)

Looking for Bad Credit Installment Loan Finance Companies

Within our everyday life, we spend some money for many kinds of purposes, say for example a medical emergency that will need expensive drug treatments, your car needs urgent repair service or a very expensive school project for your children that will need high-priced equipment. It’s quite common in such cases to deal with a financing loss.

An incredible option for protecting this kind of financial disaster is through installment loaning. There are a lot of installment loan finance companies that provide these financing options despite having bad credit. It is very important to get in to some in-depth research into the nature of these lending options and the nature of the lender to make a contact which will land in a fantastic offer.

Installment loan finance companies give a good deal of loans on their customers based on their various wants. They might need less than a day prior to the application you have submitted. Each and every organization features its own terms of reimbursement and the state exercises its privileges under the terms and conditions of the financial loans. The normal amount of the repayment is just for weeks. Nevertheless, you can still have the option to increase the loan based on what exactly is right for you.

Even though a lot of providers claim that they could give the best installment loan, there are distinctions between services. It is very important that you study and look for the best installment loan service with all the best options for the kind of loan you need. A lot of these lenders have been in competition against each other, which is likely to discover a nice deal with outstanding condition. Several things to research are the interest rates, maximum loan costs and the payment conditions, all of these components get together and separate the most effective installment loan companies.

Is Consolidating a Private Student Loan a Good Option?

Consolidating a private student loan can be a good decision. This will give you more financial options every end of the month. And even if programs on loan consolidation are reflected in your credit report, it is still a better choice than not paying or missing a payment on your student loan. Just make sure that you carefully choose your student loan consolidation program because this is usually something that is rushed by many.

It is really tempting and easy to put off your payment on your student loans. Unlike home mortgages and vehicle loans in which there is a great chance for the property to be repossessed, this cannot happen with your college degree if you do not pay up. However, taking for granted your student loan payment can lead to bad credit and can have a negative mark on your college achievements if you obtain security clearance. Moreover, a default on your student loan can cause a pay cut and tax refund ineligibility later on.

Because of the negative effects of unpaid student loans, it is always best to consider ways to pay them such as a loan consolidation. When doing this, find the perfect agency to help you. Find out their requirements because some of them are very strict. They may use your GPA or payment history as a qualification for a consolidation. Ask as many questions as you can even for queries that you somehow know the answer to.

If you decide to consolidate, it is best to start as early as possible. If you can do it now, then that would be better. You can start the process online. Then, you can communicate with an agent and clarify some questions that you may have. The most important thing is you are able to lower your monthly payments when you consolidate. Usually, consolidating your loans will cut your payment by 50%.

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It is essential that you thoroughly know what consolidation is all about before starting with it. You do not want to waste your time with a wrong consolidation that does not ease your financial burden at all. Find out about the percentage that will be paid to the loan. Know as much as you can. Consolidating your student loan may be what you really need.

Related articles

• Unpaid Student Loans Top $1 Trillion (jhaines6.wordpress.com)
• Student Loans: Bubble, Bubble, Toil & Trouble (skydancingblog.com)

Why Are Credit Unions Better than Banks?

Without the free checking and with the increasing fees of banks, you may benefit more from a credit union.
Credit unions basically have better deals on loans, checking accounts and other products compared to banks. And it is easier to join them at the present times because there are around 7,000 of them nationwide.

However, there are cases when you are only eligible for basic services. This means that you cannot have online banking or other perks that banks offer.

Credit unions are already beating banks nationwide because of their nonprofit nature and their members’ ownership. Because of this, they can offer the best possible deals says Bankrate.com’s senior financial analyst Greg McBride.
Some credit unions also offer free checking which most banks today do not provide. Moreover, overdraft charges are cheaper on the average among credit unions. In addition, out of network ATM transactions are charged about 99 cents in credit unions whereas banks charge $1.41.

Aside from these benefits, a lot of credit unions belong to a network that allows customers to transact with other credit unions and withdraw funds from different ATMs all over the country.

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In terms of interest rates, credit union offer better rates. For example, a one year certificate of deposit is on the average paid at 0.7% whereas banks only pay 0.42%. For credit cards and loans, credit union rates are also much better with an average of 4.67% interest for vehicle loans compared to 5.47% charged by banks. Home equity lines of credit are at 4.16% in credit unions and 5.38% in banks.

A lot of people are also qualified to join credit unions. You can participate in a credit union that is affiliated with your employer or those that accept employees coming from different companies. You also have an option to join community credit unions which are open to people you work, live and go to school with in a specific area. Colleges and religious groups also have their own credit unions that you may be able to join.

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• A 7-step plan to break up with your bank (msnbc.msn.com)
• Four Reasons to Switch to a Credit Union (frugaldad.com)