What you need to know about your student loans before you graduate

Student Loans (4)

If you just earned your degree, congratulations! And welcome to your grace period – your student loan grace period, that is. This is the six months after graduation during which you typically do not need to make any payments on your loans. Most student lenders offer this option, and in almost all cases interest keeps accruing on your loans throughout these months. This means you’ll owe more in interest when your payments begin than you would have if you had made payments during grace period. Some of our borrowers ask us: Can any of this have an impact on your credit score?   The answer is that being in grace period itself will probably not have an impact on your score, but the end of grace period might, for some borrowers, have consequences for your credit. Here are two ways … [Read more...]

Word on the web: Don’t let the warm weather put your finances off track

With the energy and joy only warm weather and sunshine can inspire, we’re entering summer with a pension for vacations, beaches, barbeques and fun. See ya later winter. But before you start charging plane tickets and breaking your budget for a brand new grill, let’s take a few minutes to refocus on financial and credit fitness. Here are 4 articles  to help you get focused.   Consumer tips for dealing with debt The first step in managing your debt is acknowledging that you have a problem. The Dollar Stretcher walks you through 9 ways to identify the debt problem and 9 ways to fix it.   How to apply for student loans while minding your credit Applying for student loans certainly won’t ruin your FICO Scores, but it’s important to think about how student debt could have a … [Read more...]

How to Apply for Student Loans While Minding Your Credit

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At CommonBond, we get a lot of questions from student loan applicants who are concerned about how applying for a student loan will affect their credit. The fact is, you can’t ruin your credit simply by applying – the worst that it will do is trigger a hard credit inquiry on your credit reports (more on this below) that affects your FICO® Scores in the short term. Still, there are a few ways you can manage the student loan application process wisely in order to safeguard your future scores.   1. Get as much info as you can from a lender without authorizing a hard credit inquiry   As you may know, there is an important distinction between “soft” and “hard” credit inquiries. Soft inquiries are made by businesses that check your credit report and scores even though you … [Read more...]

How student loans affect your FICO® Scores

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Here are some sobering statistics for anyone who recently graduated from college:   1. 70% of students graduating with a bachelor’s degree are leaving school with student-loan debt   2. The average class of 2014 graduate with student-loan debt owed $33,000—earning them the distinction of the most indebted class ever   3. 2014 graduates faced an 8.5% unemployment rate and 16.8 underemployment rate   Recent college grads are leaving school with more debt than ever and entering a job market with fewer opportunities for them to use their degrees and, in turn, pay back their loans.   It’s easy to forgive a young grad buried to the neck in student-loan debt for overlooking the impact of his loan repayment on his FICO Scores. The fact … [Read more...]

Funding your child’s K-12 education

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We hear a great deal about student loans—there are ample ways for eligible borrowers to secure loans for college tuition. What we hear very little about is how to pay for private school, boarding school, and other educational institutions for students who are still in grades K-12. That is an important financial concern for many parents, especially now with school right around the corner. Many parents want to ensure the best possible K-12 education either because the district school is facing budget cuts or other hardship or in order to prepare a child for college and improve their chances of acceptance into elite universities.   Your Tuition Solution is one viable option. For the past 10 years, Your Tuition Solution has been a provider of education loans with flexible payment … [Read more...]

The Dangers of 5 Popular Ways to Pay for College

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For many families, sending a child to college is a quintessential part of the American dream. But these days, you'd better start saving when they're still in diapers if you want to make higher education a reality. With the cost of college continuing to go through the roof, a growing majority of students are left searching for ways to subsidize the expense.   It has been said that education is the greatest investment, but to what lengths must you really go? When your savings, income, and even financial aid and grants  still aren't enough, alternative options are becoming increasingly necessary. While each has the potential to help pay the bills, they also come with inherent risks that often out-weigh rewards.   1. Credit Cards   Families often effectively … [Read more...]

12 Ways to Keep Student Loans to a Minimum

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In 2012, the Institute for College Access and Success reported that two-thirds of the 2011 graduating class had student loan debt - and the average amount was $26,600.   As pointed out by FICO experts, student loan debt is a growing problem for two major reasons: consumers are carrying more student loan debt than ever before, and more federally-backed student loans are being offered to consumers with questionably low FICO Scores.   Plus, with the unemployment rate for the under twenty-five crowd hovering at twice the national average, $26,000 in student loans can become a huge burden post-graduation.   It is possible, however, to graduate college with a bright future and very little – or even no – student loan debt. It just takes more work and planning … [Read more...]

Dark Clouds Looming Over Student Loan Industry

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My earlier blog post quantified some of the trends we have been seeing in the US student loan industry, namely the precipitous increase in student loan debt.   Our ongoing analysis has found another disturbing trend: recent vintages of student loans have noticeably lower FICO® Scores than earlier vintages.   This chart illustrates the score distribution trend for consumers who have recently opened a new student loan.     Here we see a clear shift toward lower scores. In fact, the median score has dropped 17 points from 659 to 641.     These findings indicate that in recent years, student loan lenders have made student loans available to more consumers with lower credit quality. Since private student loan lenders were … [Read more...]

Student Loan Debt and FICO Score Trends

  As students incur more student loan debt, lenders and investors in student loans are asking how this is affecting US consumers’ FICO Scores. New FICO research provides interesting insights.   With education costs rapidly outpacing inflation, more consumers are taking out student loans to pay for their education. Looking at a large data sample from a credit reporting agency, we found that 6.2% of US consumers had two or more open student loans on their credit report in 2005. By 2012, that number grew to roughly 11.8%.   Consumers also have a greater amount of student loan debt today. In 2005, consumers with an open student loan on file had an average student loan debt of $17,236. In 2012, that number increased 54% to $26,549. This has outpaced growth for … [Read more...]

The Hidden Costs of College

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With all the recent buzz about student loans, the skyrocketing price of higher education is a hot topic – but the financial impact of college goes far beyond just tuition. Plenty of secondary expenses aren’t factored into college "sticker prices," and many of them don’t become apparent until after students get to campus. From parking to Greek life, students should take note of these expenses when figuring out a sustainable budget for the school year:   Dorm Room: Most college dorm rooms come with a bed, a desk, and a few drawers. Students are responsible for providing everything else: lamps, rugs, pillows, bedding, hangers, etc. Take advantage of back-to-school sales and reach out to your roommate/s to split the cost of shared items. Go to your school’s Facebook page and see if … [Read more...]

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