Student Loan Consolidation Lowdown

Imagine accumulating more than $30,000 in debt to study something that may seem useful, only to find out post college graduation that your degree is almost worthless. This is a challenge many college graduates are facing today. It seems like employers are looking for experience first and education second. This, among other things, is a leading cause for deterring recent high school grads from attempting the college life.

On the other hand it seems like in order to be branded as successful one must go to and graduate from college. After all it’s what we’ve been told since we were young: going to college equates to making lots of money! Whatever the case may be one thing’s for sure, with enough ambition almost anything is possible.

Which path is right for you? Are you a go getter that’s ready for a shot at financial independence now, or do you strive to further your education in hopes of obtaining a brighter future? Whatever the case may be, we’ve prepared a brief guide highlighting both sides of the argument.

Hopefully with this information you’ll be able to decide which course of action is right for you: attending college, or joining the workforce.

Viewpoint A: High school is not enough

Job security: Today’s dramatically changing job market maintains competitive entry-level requirements – options that may have been available to your parents no longer hold true for you. For instance, when the baby boomers flooded America’s job market, a high school diploma was enough to assure employers that job seekers could handle the basic tasks in their organizations. Once recruited, most large companies ensured that the baby boomers were provided with internal training and development programs. This meant that the generation which is now enjoying its well-deserved retirement usually worked for just one or two companies during their entire career.

Unfortunately the global job market doesn’t allow for such luxuries anymore – yes, stability in one company is a luxury! In fact, most workers entering their first job today are expected to change career paths at least seven times before they find their niche. This could be one reason why there is such a heavy emphasis on education – few companies can afford to invest heavily in employee development. Instead they expect job seekers to develop their own skills before they come aboard. The most obvious way to go about doing this: obtain a college degree.

Increased earning power: It is generally accepted that greater level of education you peruse, the more money you will make… and well the figures don’t lie. According to the U.S. Census Bureau, workers with a college degree make nearly $25,000 more per year than workers with only a high school education. When compounded, this figure amounts to more than $1 million more in lifetime earnings — how’s that for retirement?

So, how big a burden is the average loan for college graduates? Actually, pursuing degrees in high-paying professions helps you earn much more – at least threefold more than what you must pay back. For instance, if the average law student graduates with over $80,000 in debt, s/he can easily expect to earn an average of $100,000 once s/he graduates. Or take business-school grads. They may have to take loans to the tune of $40,000 and above, but upon graduation, they get jobs that pay at least $90,000 a year. (Graduate Management Admissions Council figures)

Viewpoint B: Attending college is a waste of time

A world of opportunity: Not everyone can afford to invest the amount of time and money required to becoming a full time student right after high school. For many people the lure of having a few extra dollars in their pockets and being offered a chance at financial independence is too much to tie them down for at least four more years of classes. Instead these people choose to live in the now and wish to have full time jobs that prepare them for real-world challenges. In fact many professionals start their careers in retail sales, customer service, and various other jobs that offer immediate training. As ironic as it sounds, some people are just too ambitious for college.

College degrees don’t cater to real-world challenges: Yes, a college degree program does refine your critical thinking skills; however, very few colleges and universities can actually prepare you for the majority of real-world challenges. In most colleges, the closest parallel to the working world you’ll be exposed to is being required to complete and submit your assignments on time. In short, most college experiences rarely match the demands of a regular full-time job.

Moreover, if the regulated method of teaching doesn’t suit you, you may find that though you didn’t do too well in high school, you are quite comfortable once you enter the workforce. These environments don’t have the tedium of the classroom, and can actually encourage you to succeed on your own terms. Just look around, you’ll find MBA graduates for sure, but the entrepreneurs – the guys who actually make it big – may not have those much coveted degrees. Many successful entrepreneurs and business leaders have achieved success with little more than a high school diploma.

The price of the degree may not be worth paying: Numerous degrees in low-paying fields are really not worth the effort and money we spend on them. Some of these degrees are actually quite useless as you can get the job you desire if you simply remain in the workforce. You really don’t need to spend all your time and money on a course that brings you no monetary benefits.

A job allows you to plan your future: Most youngsters are unaware of the career paths they wish to take, many of them use college as a self-seeking quest; some even have to stay until grad school before they figure out what they’re suppose to do. However, in this process these youngsters end up collecting a huge debt. Instead if they had worked for sometime before going to college, they could not only have built their education fund, they would also have a better idea of what they want to do.

While we cant advise you on an individual basis to determine what’s right for you, hopefully we’ve given you some insight into making the decision that will maximize your earning power and give you a lifestyle you’re comfortable with.

Today, most students rely on loans to fund their education. This strategy can allow students to earn degrees that they otherwise would not be able to afford, but it leaves them open to changes in laws and regulation of their funding. Here are 5 of the laws that students can’t afford to not know about.

1. Bankruptcy issues

The Bankruptcy Abuse Prevention and Consumer Protection Act was made in 2005 to include private student loans as one of the 10 debts that can’t be forgiven. Federal bankruptcy laws now make it very difficult for borrowers to discharge student loans.

How this law affects you:

• Student loan borrowers who fall behind are now subject to garnished wages, income tax seizure, even withholding of professional certifications in addition to the standard damage to credit records and other collection activities. A Supreme Court decision even allows the government to withhold Social Security money to collect on old student loans.

2. Increased Rates

The Deficit Reduction Act of 2005 hit the federal student loan program hard with $12 million in cuts. Higher interest rates for student loans kicked in on July 1, 2006. Interest rates for new loans disbursed on or after July 1, 2006 also grew as a result of earlier legislative action in 2002 and 2006.

How this law affects you:

• First and foremost, you’ll pay more interest for the same amount of money. As a result, you may choose to refinance your loan and stretch out your repayment period. The ensuing fall in attractiveness of federal loans means that you may want to step up your efforts in a search for grants and scholarships, which will help you avoid or reduce your debts considerably.

3. Relief Act

To combat the fallout from the aforementioned Deficit Reduction Act, the US House of Representatives recently voted to reduce interest rates for student borrowers. The College Student Relief Act of 2007 was passed with a massive majority in favor of the bill. This new law will apply to the 5.5 million Stafford loans given to students whose families earn between $26,000 and $68,000 per year. The bill establishes gradual reductions in the interest rate over a five-year period, bringing the rate down from 6.8 percent to 3.4 percent.

How this law affects you:

• With attractive rates for qualifying families, Stafford loans will be harder to come by. If you qualify, you’ll reap the rewards of an average savings of $2,300 in interest payments on a 15-year loan. If you don’t qualify, you’ll still suffer under the interest rate hike of the Deficit Reduction Act.

4. A Federal-State Partnership Program

The Taxpayer Relief Act enacted into law in 1997 created education IRAs. This allows taxpayers to save $500 per year tax-free for the higher education expenses of a named beneficiary under 18 years of age. In 2001, these IRAs were renamed Coverdell. With Education Savings Accounts, the annual tax-free contribution limit was raised to $2,000. The provisions passed in 2001 are set to expire in 2011.

How this law affects you:

• This law allows your family to accumulate tax-free savings which can go into your future education, providing an incentive to save as much as you can. It will help you reduce the total amount of loan you need to take, which will clearly have a reductive effect on your loan debt.

5. New Rules

The Higher Education Reconciliation Act (HERA) and the Emergency Supplemental Appropriations Act changed some of the terms of Federal Consolidation Loans made under the Federal Family Education Loan Program (FFELP). Thanks to these acts, your loan has been subject to some changes. For instance, the Emergency Supplemental Appropriations Act effectively ends the single-holder rule for student loans.

How this law affects you:

• Now, borrowers who have student loans with just one Federal Family Education Loans Program (FFELP) lending company can choose to consolidate those loans with another FFELP lender.

Gone are the days when geeks were the only ones with gadgets. Now, just about everyone has some sort of hot tech accessory and the college crowd is no exception. Students need tools for note-taking, communicating and entertaining, so we’ve compiled a list of 20 gadgets that are designed to make a college student’s life easier. 

1. Notebook computer: Small, sleek, powerful laptops are quickly edging out their space-consuming desktop counterparts and becoming an essential part of every student’s toolkit. Instead of working on a computer at home, a computer in the library and a computer in the lab, you can have the same system no matter where you are. Your documents, music, calendars, and reminders are all on one machine, accessible at the touch of a button. Apple’s MacBook is a surefire favorite, while Toshiba’s Satellite line and Dell’s Inspiron series are affordable. Sony’s VAIO and IBM’s ThinkPad products also good for those willing to spend a little more.

2. PDA: Personal digital assistants are increasingly being seen as all-in-one devices, a smaller and more compact alternative to notebook computers. Often, they can connect to the Internet, allow you to work on documents and spreadsheets, transfer files using Bluetooth technology and more, all in the palm of your hand. If you prefer to keep your phone and PDA separate, the Dell Axim is a great choice. Alternatively, you can chose from the PalmOne series of PDAs from Palm. For those who want the features of a cell phone bundled in, T-Mobile’s Sidekick and Palm’s Treo Smartphone are two good options. Samsung and O2 also offer a range of high-end mobile digital all-purpose devices. 

3. Recorder: A good recorder is a must for students who have trouble taking down notes or remembering lectures. This device also comes in handy when you’re unable to attend class: just have a friend record what’s going on, and it’s like you’ve attended the lecture in person. There are various models available, starting from those with micro cassettes like Sony’s M570V recorder to those with built in memory like the ones from Olympus. Some even connect to your computer’s USB port so you can transfer files and clear internal memory.

4. MP3 player: Portable music players are very hot on college campuses these days. They’re used to stream podcasts, watch videos of lectures, play back MP3 files, listen to audio lessons on the go, or to just chill out with some cool music downloaded from iTunes or the Internet. If you’re not interested in the iPod, consider alternatives like Creative’s Zen Vision and Samsung’s YP-Z5.

5. Scientific calculator: Students enrolled in college courses like advanced mathematics and science may find that they require a lot of algebraic, trigonometric and calculus calculations. They can add computing power to their arsenal by choosing a good scientific calculator. A few good options are the advanced graphing calculator from Texas Instruments and HP’s 33s model.

6. Flash drive: These small devices have virtually rendered CDs obsolete because of their extreme portability and convenience. They’re a must-have if you need to transfer files from one system to another. They really come in handy if you don’t have your own laptop: carry around your presentation for class or transfer files easily from the library to your home computer. Storage sizes start at 16 MB and go up to 4 GB. Prices vary according to the brand. SanDisk, Kingston, Memorex and USB Drive are some of the more popular names in the business. If you store sensitive information on your device, the password-enabled USB drive from Thanko can help you keep files private.

7. Digital dictionary: Handy to carry around in your tote bag, these nifty gadgets effectively replace heavy paper dictionaries. They can come bundled with MP3 players or PDAs, offering definitions as well as translations from English to various foreign languages. Digital dictionaries are extremely useful when you’re working on term papers or foreign language assignments.

8. Alarm clock: Do you have trouble waking up on time to attend your morning classes? Check out these cool wakeup machines to find one that suits your style. After all, it’s important to be punctual to class on a regular basis.

9. Mini refrigerator: Perfect for not only storing drinks, but also for keeping healthy, homemade meals and snacks in your dorm room. After all, you can’t always depend on cafeteria food. Prices start from just below $100 and move higher as the size becomes larger. The top-selling models include those from ThermoKool, BebeSounds, and Vector, but your best bet for under $100 would be GE’s GMR02BK model.

10. Smoothie makers/blenders: Are you in such a rush to get to class every morning that you tend to skip breakfast? Or worse, grab an unhealthy, fat-loaded snack on the way to your lecture? Stop right there and buy yourself a good smoothie maker. A mix of fruits and yogurt is just what you need to kick-start your morning the healthy way. Try out any of the various models from Kenwood, Back to Basics, Hamilton Beach, Juiceman and Villaware.

11. Vacuum cleaner: Don’t let your dorm room turn into a pig sty. Invest in a good vacuum, preferably one that does the cleaning for you. The iRobot Roomba cleans your room at the press of a button, gathering up dust from almost all floor textures and medium pile carpet, then returns to its base unit when it’s done.

12. Microwave oven: Keeping a microwave in your dorm room allows you to eat more versatile food than what’s being offered at the cafeteria. Go out and get one with an built in toaster to save space and money. Check out models from Sanyo, Sears, LG Electronics and Samsung.

13. All-in-one printer/copier/scanner/fax machine: With one of these machines, you won’t have to leave your room for any printing, scanning, copying or faxing needs. These machines also come in handy when you need printouts outside of normal working hours, like late at night or early morning before your class. They retail for under $200 from HP, Canon, Epson and Lexmark. 

14. Video game consoles: Take time off from your grueling schedule and unwind with the latest in gaming consoles. Sony’s PSP and Nintendo’s DS Lite are two hot handheld favorites with the gaming crowd. The Sony PSP doubles as a TV or DVD player, while the Nintendo DS allows you to play games online.

15. Boom-box: An iPod is ok if you want to go solo, but when playing music for a crowd, it’s best you turn to Cisco’s Linksys Wireless Music System. This boom-box allows you to play songs on your PC through its speakers using a built in wi-fi connection and also plays radio stations from the Internet. It’s also a great way to relax and unwind as you work on assignments and papers for the following day’s classes.

16. Voice Recognition Software: Voice recognition software provides an easy way to get your notes and lessons typed. All you have to do is voice your words out loud. For those who don’t want to type or are tired of hand-written notes, try the voice recognition software Naturally Speaking 8.0 from Dragon.

17. Digital pen: Are you too tired to transfer your hand-written notes to your computer? Just invest in digital software from Logitech and get the job done in a hurry. The set, which includes a digital pen, digital paper and related software, allows you to jot notes that are directly transformed into word or spreadsheet documents on your computer. The best part is that you can catalog your notes into search-friendly files for easy retrieval at a later date. The cost may be an inhibiting factor for some, however: the digital paper does not come cheap, especially if you take a lot of notes in class.

18. Web camera: If you’re homesick, you’ll want to keep in touch with friends and family. Make frequent calls and chats home more personal by using a webcam. Windows users can do well with offerings from Logitech, while Mac owners can grab the Apple iSight.

19. Portable bike: Biking is the most cost-effective way to get around campus. Your bike can be an ultra-convenient accessory, especially if you can fold it and carry it around wherever you go. Sinclair’s A-Bike, weighing in at just 12 pounds, is the perfect solution for your transportation needs. It is extremely portable and can be folded or unfolded in around 10 seconds. 

20. Backup solution: If you lose your phone, chances are you’re not going to be able to remember most of the phone numbers you’ve got stored on it. Don’t be left without a way to get in touch with your friends, find help with coursework or get together for a weekend party. Get a solution that allows you to create a backup of the stuff you store on your phone. One option is Advanced Wireless Solutions’ Backup Pal. Just plug it into your mobile and download all of your contacts, numbers and email addresses at the press of a button.