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A Guide on Student Loans and Federal Government Grants

Credit has become scarce and more expensive everywhere. Even student loans are no longer easily or cheaply available. However, it is not true that student loans at low interest rates are not available anymore. Parents and students need to enhance their awareness and explore all possible options to fund education at an affordable cost.

Student Loans Without Cosigner

College education costs have become very high. But there are parents who wish their son or daughter to become independent and manage their college education entirely on their own. Sometimes the financial condition of the family is such that becoming a cosigner to the loan may put more pressure on the family’s finances. Therefore, parents should know that it is possible to receive student loans without cosigner. All they need to know is where to look for such loans.

Federal Grants and Loans for Education

It is possible to obtain student loans without cosigner through federal assistance. Federal government grants and loans at low cost can be received by applying with Free Application for Federal Student Aid (FAFSA). All undergraduate and graduate students enrolled in minimum half time to full time courses are eligible for this financial assistance.

Pell Grant for Students

This grant is offered to students who have not completed their bachelor’s degree. This grant takes into consideration the financial status of the student and his family, the actual tuition fee, and whether the student is undergoing a full time or a part time course.

Perkins Education Loans

Perkins loans for students are given out with fairly liberal terms and conditions. A fixed low rate of interest is charged on the principal amount of loan, and the loan must be paid back as per the specific conditions laid out in advance.

Fixed Interest Rates for Federal Student Loans

The federal government is doing everything to support education for students in times of a general credit crisis. The rates of interest on federal student loans have been made fixed instead of variable. The most deserving candidates for these loans can expect to receive them at very low interest rates. The federal government has also raised the borrowing limits to extend better credit for education. Even for the parents who have their own federal loans are allowed to defer their payments till the time their children are studying at school.

Student Loans Consolidation

The U.S. Department of Education has a dedicated website catering to loan consolidation. Federal student loans can be consolidated through the federal government. With consolidation it is possible to make a single consolidated payment instead of many small payments, and the re-payment terms also become more relaxed.

Student Loans for Bad Credit

There are several student loans and grants that do not take into account the student’s credit history, no credit, or bad credit. Pell Grants and Perkins loans are two such examples. However, the most popular one is the federal Stafford Loan for undergraduate and graduate students. It comes in two categories – subsidized and unsubsidized. It is applicable to all students, irrespective of their credit history.

Federal Loan Forgiveness for Students

Students are eligible for federal student loans forgiveness under specific conditions. It helps to write off a part or whole of the loan taken by the student. Volunteer work, military service, and community teaching are some of the common conditions to qualify for student loan forgiveness.

Student Loan Bankruptcy

It must be noted clearly that student loans are not easy to discharge in bankruptcy. However, under certain circumstances it is possible to write off the loan. The basic pre-requisite for such bankruptcy is to demonstrate that the loan “will impose an undue hardship on the student and his family.” Different courts will use different evaluation methods to determine whether the borrower has been able to demonstrate “undue hardship” convincingly.

Private Student Loans from Citibank and Other Institutions

Private lending institutions such as the Citibank offer Student Loans. It is relatively easier to procure these loans, but the downside is the higher rates of interest and the tough re-payment terms that the private lenders impose on such loans. It is always advisable to first explore the options of federal student loans before going ahead with expensive private loans.

Do Gas Reward Credit Cards Provide a Way to Make Some Extra Cash?

The Federal Reserve Survey of Consumer Finances revealed that 11.9 percent of people with charge cards now had fuel credit cards. Signing-up to the best gas rewards credit card means that it is possible to make some extra cash from transactions that previously went unrewarded. That said, it is very important to balance any potential cashback gained from a rewards scheme against the debt interest payments on unpaid credit card debt. Those who stand to benefit most from a gas rebate credit card are the ones who clear their full balance during the 30-day grace period.

Make Some Extra Cash with a Gas Rebate Credit Card

A gas reward credit card enables the customer to benefit from up to a 5 percent cash rebate on fuel, not to mention smaller cash rewards on other purchases. For example, Chase offers a BP fuel credit card with 5% cashback on all gas purchases made at BP stations. Although benefiting from this saving may result in a change to the way we shop for gasoline, it is regularly regarded as the best gas reward credit card. Jim Mallery of MSN Money stated that: “The Chase Visa BP Visa Rewards card scores high on most every card-rating Web site.”

The T&C’s of Gas Rewards Cards May Change

  • Certain offers appear more favorable than they really are, but these cards generally offer introductory rate for x months before lapsing. For example, the PerfectCard MasterCard from Chase offers a rebate of 6%, but only for the first 90-days. The rate then reverts to 3%.
  • The MBNA offered what was a very popular AAA credit card providing 5 percent cashback on all fuel purchases. However, the lender subsequently changed this rate to 2% if that card was only used to buy gasoline.

Gas Reward Credit Cards and High APR Revolving Debt

A gas card application benefits consumers who only use their card for essential purchases and settle the full balance at month. Robert Manning, author of Credit Card Nation: The Consequences of America’s Addiction to Credit, stated: “Accruing debt and then paying interest to save a few dollars at the pump doesn’t make any sense.” Although spending a $1,000 on fuel leads to a cash rebate of $50, the median rate of interest is 14.31%, according to the Federal Reserve’s G.19 report on consumer credit. This not only means unpaid debt, it also leads to $93.10 of extra debt interest after factoring-in any cash rebate savings.

Pros and Cons of Gas Reward Credit Cards

A gas rebate credit card enables the consumer to enjoy up to 5 percent cashback on his or her gas purchases. This is beneficial to anybody who regularly uses a card to purchase gasoline, but doesn’t benefit from the transaction. The danger of any reward card is the it is often used to make unnecessary purchases. Failing to clear the balance at month end will also lead to debt interest accruing quickly. Only the most disciplined consumers stand to benefit financially.