Taking Out a Student Loan: What You Should Know Before You Sign

application_form-300x199The recent lawsuit in which the Consumer Financial Protection Bureau (CFPB) is suing for-profit college chain Corinthian Colleges for alleged “illegal predatory lending” is a reminder to students: Don’t take out a loan without doing your homework.

CFPB alleges that since June 2013, Corinthian lured thousands of students into taking out high-cost private loans to cover tuition costs by inflating job prospect rates and paying employers to temporarily hire their graduates. Additionally, the federal consumer watchdog agency said that Corinthian charged as much as $75,000 for a bachelor’s degree and pushed students into private loans with approximately 15-percent interest rates (more than double the interest rate for Federal loans). CFPB also alleges Corinthian used illegal debt collection tactics, such as pulling students from class who were late on their loan payments, blocking students from using computers, or even withholding diplomas.

This case painfully illustrates how taking out private loans can leave unsuspecting students in utter financial straits. Before borrowing any money for your education, be sure to research all your financial aid options. When you’ve carefully narrowed down your choices, review the terms of the loans or offers. As with any agreement, read the fine print, ask tons of questions, and know exactly what you’re agreeing to. How much does the loan cost? What will my monthly payments be? Is the interest rate fixed or variable? Do I have to pay any fees? When do I have to start repaying the loan?

It’s also a good idea to reduce how much you need to borrow in the first place. Here are some ways to help bring down your loan amount:

  • Apply for grants and scholarships. Some helpful websites for this search are www.fastweb.com, www.studentsscholarshipsearch.com, and www.collegescholarship.org.
  • Choose a Federal loan vs. a private loan. Fill out the Free Application for Federal Student Aid (FAFSA) form every year you’re in school. FAFSA gives you access to different types of Federal aid such as work-study jobs, grants and scholarships, and loans. Also, Federal loans have many advantages over private loans, such as fixed interest rates, deferment periods, no cosigner requirements, and usually have better repayment terms.
  • Get a cosigner with good credit rating. Remember, however, the cosigner is responsible for the loan if you fail to pay.
  • Do the math. As a rule, do not take on a debt larger than your expected first year’s salary, according to http://www.learnvest.com. Ideally, you want to be able to pay back your loan within 10 years after you graduate.
  • Keep your costs down. Think of different ways to save money during college, such as living at home or with a roommate, buying used textbooks, and cooking at home instead of going out.
  • Consider taking a part-time job, then pay for some of your costs while in college.
  • Do your first two years of school at a community college. You can then get your general education credits completed at a lower cost and work on your GPA to qualify for scholarships. Just be sure to check which courses will transfer to a four-year institution.
  • Try to graduate early. The less time you’re in college, the less you’ll need to borrow.
  • Consider making interest payments while in college. This will help reduce the amount you have to pay later.

For more information on student financial aid, including loans and grants, visit the following websites:

DEA Drug Take-Back is Saturday, Sept. 27

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Keeping prescription drugs out of the wrong hands is one of the goals of this Saturday’s DEA Drug Take-Back.

Last year in California, more than one billion hydrocodone pain pills were dispensed – that’s enough for a month’s supply for every California adult. Many of those narcotics are no longer needed and may be stored in easily accessible medicine cabinets where visitors and teens can easily obtain them to get high.

The DEA’s twice-yearly Drug Take-Back is from 10 a.m. to 2 p.m., this Saturday, September 27, 2014. The event allows you to safely dispose of those pain pills and other unused, unwanted and expired prescription drugs at a location near you.

During the last Drug TakeBack event in April, the three DEA field divisions in California collected 78,495 pounds of prescription drugs.

For more information on the program, CLICK HERE

For a TakeBack location near you, please contact your county supervisor’s office.

California Bureau of Real Estate Issues Valuable Tips for Seniors on how to Avoid Becoming Victims of Real Estate Fraud

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Those who commit fraud often target and exploit senior citizens. According to the FBI, the reason they do is because senior citizens are most likely to have a sizeable “nest egg” that criminals can target, and seniors are typically seen as more trusting of others. Older Americans are also less likely to report fraud because they don’t know who to report it to and are often too ashamed at having been scammed. Sometimes they aren’t even aware they have been scammed.

The California Bureau of Real Estate recently issued an advisory directed at California seniors to offer them essential advice and tips on how to protect themselves from becoming victims of real estate fraud schemes, including those scams involving home loans, rentals, timeshares, and false or fictious deeds.   Check out the advisory here.

 

Got financial aid questions? BPPE has answers

You still have time to get your higher education financial aid questions answered. The Bureau for Private Postsecondary Education is taking your phone calls at KCRA 3’s Call 3: Cash for College going on now.

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If you’re in the greater Sacramento area, call (916) 447-2255 or send an email to college@kcra.com until 7:00pm with your student financial aid questions.


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The Bureau for Private Postsecondary Education has joined the California Student Aid Commission to answer questions about financial aid requirements, application deadlines and resources available to students.

Tune in tomorrow!! BPPE will be on KCRA- Channel 3 taking your financial aid calls

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It’s never too early to start planning your future. If you’re thinking about attending a postsecondary school, community college or university you’ve probably asked yourself, “How am I going to pay for it?”

If that sounds like, and you’re in the greater Sacramento area, you won’t want to miss KCRA 3’s Call 3: Cash for College Day on Tuesday, September 23. Tune in throughout the day to learn about student financial aid.

The Bureau for Private Postsecondary Education will join the California Student Aid Commission to answer your questions about requirements, application deadlines and resources available to students.

The Latest Edition Of The Consumer Connection Is Hot Off The Press

Pages from ConsumerConnection_Summer2014_webNEWSFLASH – The latest edition of the Consumer Connection magazine is now available! This edition of our magazine features:

  • Data breach and password protection and precautions
  • Tips for your end of summer getaway
  • Important must-know tips when hiring a locksmith
  • Covered California and Affordable Care Act information
  • Taking your pet to the Vet
  • …..and much, much more!

Not only is the Consumer Connection magazine full of amazing fun to read articles, but you will become an even more informed consumer with all of the useful information it contains. Check out the magazine HERE.