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Changes with the Student Loans

Student loans and the change from private to government managed lending is the spotlight of an editorial in Ventura County Star. Schools will have to switch their systems in order to work with the student loans made available by the Federal Direct Loan Program.

Calculations estimate that the direct student loans, with no payments to the private lenders, will bring savings of $4 billion yearly.

One of the problems with the private lending offering the government backed student loans was the fact that there were profits made with no risks for lenders. On the other hand, the private lenders offered additional services such as loan counseling.

It is expected that the new legislation will be effective starting at the end of this year, with the change of the system taking place until the middle of the next year.

In order to be ready to advise the students on the new way of borrowing money cash for education, will be necessary the help of specialists to change the systems and instruct the personnel.

Survey for 2006-2007 reports that 60% of students graduate with debt.

Around 4,000 universities will be required to switch to the new program. Private companies will also service the direct student loans.

One difficulty can be the relatively short time to change the loan system, which could convey delivery setbacks, which in turn could translate into trouble to register for the students.

Additional services offered by Department of Education include a

• reimbursement plan based on borrowers’ earnings.
• loan forgiveness program for students who work in public service.

Loans are simply tools, part of the education process in many cases. Tools are made to simplify work. We always try to simplify our tools. Students, parents and schools hope for easier loans.

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Personal Finances and Farm Families

How farm families are saving money, dealing with personal medical health and farm loans in the recession in rural Nebraska is the issue of a column in Press & Dakotan.

Job loss is one of the frequent financial difficulties nowadays and for those with health problems in need, in some cases critical, of treatments and monthly prescriptions the unemployment is not enough without a health insurance.

Reports note that although on one side people hold back spending on extras, on the other they cover their daily expenses with credit card debt and postpone paying out medical treatments and similar required services. Statistics show that:

• 44% belated medical treatments
• 27% use credit cards to pay for everyday bills

Postponing medical services is not a way to save money as the untreated health conditions can build up complications, or even in extreme cases costing life.

Statistics show following percentages concerning households in which:

• Someone lost a job, 11%
• Someone’s normal work hours reduced, 35%
• Someone obtained an extra job, 27%

Financial crisis affect the families of farmers with their income, loans for agricultural tools and retirement plans and all this in turn affect the agriculture.

Nebraskans approach to save money indicated in the report include:

• 69% reduce spending on entertainment and dining out
• 44% delay major acquisitions
• Around 50% abandoned holiday arrangements

A positive aspect is the number of 34% people that are trading goods and services to avoid exchanging cash that they do not have.

The concluding word is to manage sensibly the finances by maintaining low expenses and spending nothing or as little as possible on extras.

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New Loan Alternative to Payday Loan

An article in Richmond Times-Dispatch writes about a new loan program launched in Virginia, program commended by Consumer advocates groups and meant to support state workers’ financial emergencies two times a year with up to $500 loan. Basically it is a short-term loan alternative to payday loans.

The loan is part of Virginia State Employee Loan Program (VSELP) and Virginia Credit Union manages it.

VSELP loan features:

• The APR (Annual Percentage Rate) is at 24.99%.
• The repayment period is 6 months.
• Loans are obtainable in increments of $100, up to an upper limit of $500.
• Eligible employees can apply for up to two loans per calendar year.

To qualify it is required employment for no less than 12 months, membership with Virginia Credit Union, savings or checking account, receiving payment on a monthly or semi-monthly basis and to complete an online financial fitness course.

A similar program, Salary Advance Loan with a maximum amount of $500 and APR of 12.00%, it is accessible to state employees in North Carolina.

Consumer advocates working with the regularization of the payday lending industry promote generally a 36% APR limit and harder restrictions.

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Personal Finances and Stress Release

“Financial adjustments bring stress relief” writes an editorial in The News-Press. Many, due to different circumstances such as recession, get into the situation where they need to manage their life with a lower budget.

What you can do? Assume control of your personal finances, perform the best you can and work for the future. Need to adapt your life style to your earnings; increase savings, cut off debt, live more economically. Also with a financial expert’s help, you can make low risk investment of different kinds. Helps too if you simply have a discussion concerning your finances. Also, realize that you are not alone in this recession and that the people are helping each other.

An AP-GfK poll shows that financial related stress was approximately 12% lower in 2009 compared with last year.

Financial Related Stress

Here are some tips to help you and your family deal with the financial stress:

• act immediately
• take a constructive approach
• discuss coping strategies
• write down and talk about the basic values you believe in
• prioritize: essentials and nonessentials items
• buy only item you really need
• keep children involved
• take care of your health
• maintain routines
• continue outside activities
• get a handle on the situation
• talk with someone trusted
• solve one thing at a time
• learn new skills
• keep busy, dynamic and involved

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