To use the IBR Calculator you will need to know your estimated adjusted gross income, the amount that you owed on your eligible federal student loans when you entered repayment, the estimated average interest rate on your eligible federal student loan, and your family size. You plug these figures into the IBR Calculator, and this gives you the payment amount your would pay on your government student aid through the Income Based Repayment plan. If that payment is lower than the monthly payment under a 10-year standard repayment plan, then you are eligible to repay your loans under IBR.

During this time of economic hardship and mounting student debt, this federal student loan program could be a lifesaver for many students and their families. Check it out at the Federal Student Aid website.

Blessings,
Bonnie

On a personal note, the most important thing that’s happened to me is that my son Chris got married. It was a beautiful wedding and my son and his new wife Nicole are very happy. Here’s a photo of the lovely couple.

In addition to my son’s wedding, I’ve been writing two ebooks on financial aid for students, as well as working on some other projects for Christian College Parents. The writing is going well, but it hasn’t left much time for other things, like my blog!

Several things over the last few weeks have caught my attention, however, and I wanted to share them with you.

FIRST THE GOOD NEWS:

President Bush has signed legislation to help parents and college students with their student loans.

HIGHLIGHTS of the College Cost Reduction and Access Act:

· Monies received by institutions from selling their student loans must be used to provide more loans for students

· Temporarily removes medical bill payment delinquencies up to 180 days as a reason to reject parent applying for PLUS loans for their children’s tuition

· New subsidized Stafford loans interest rate dropped to 6%

And that’s just the beginning!

· The new maximum Pell Grant scholarship is now $4,731, up $490 from last year. This is the first in a series of increases to eventually raise the grant by $1090 by 2012.

· The interest rates for unconsolidated student loans taken out before July 1, 2006 has now dropped to 4.21 percent. You can get a fixed rate of 4.25 percent and combine all your student loans into one payment by getting a consolidation loan now. (Those loans taken out after July 1, 2006 won’t be eligible for this rate because they are at a fixed rate of 6.8 percent.)

· Even if your local bank has stopped issuing consolidation loans, you can still get one through the federal government’s Direct Loan program.

THE NOT-SO-GOOD NEWS:

Although government undergraduate student loans should be available to people who have filled out the FAFSA and qualify, private loans and loans through the Parent Loan for Undergraduate Students (PLUS), available to parents and graduate students are harder to come by.

Why is that?

· PLUS loans require a credit check, something the undergraduate student loans through government programs do not. Higher credit scores are required for these loans as a result of the subprime mortgage crisis.

· Credit score requirements for private loans will be even higher since they are not guaranteed by the federal government.

· Lenders make more money on loans for four or more years of college than they make on loans for two years of college.

This means that people with less than wonderful credit scores, low to moderate income, and/or plan to attend trade schools or community colleges will be the ones that have a harder time paying for college.

These are the very people who need the most help. If we want an educated citizenry with the knowledge and skills needed in today’s world, we need to make education easier to get, not harder.

If you are still trying to figure out how to finance this fall’s college education, here are some things to try:

· Contact your financial aid office. If you have not filled out the FAFSA, ask them if your child could still get government aid, if you did fill it out now.

· Ask the financial aid office if any scholarships or grants have become available that your child might qualify for.

· Ask if your child could get in the work/study program.

· Ask them if you could pay with an installment program over several months.

· PRAY

I don’t guarantee that any of those options will result in new funding, but it doesn’t hurt to ask. You just might be pleasantly surprised.

What about you?

Have you been affected by the student loan crunch? If so, please leave me feedback on how you’re coping with the situation.

Blessings,

Bonnie