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Archive for March, 2010

Each year millions of kids will graduate from High School and many look to try and get into college. Their parents have worried for years about how to pay for college. Saving for most families is nearly impossible. By most estimates, college costs have increased an average of 14% a year for the last 10 years. Parents stress levels are at an all time high. They know their kids’ future could be at stake because of the money issue. Let’s take a quick review of traditional options when it comes to paying for college.

Your Financing Options

When the Family Share of paying for COLLEGE Is More than You Can Afford

There are a variety of financing options available for families who are concerned about their ability to meet their family share of costs. These alternative sources of aid, most often in the form of loans, can help families cover financial aid gaps, or unmet need in a financial aid package.

Student Loans,
Federal Unsubsidized Loans,
Private Student Loans,
Parent Loans,
Federal PLUS Loans,
Federal Grad PLUS Loans,
Home Equity Loans
IRA Withdrawals,
Tuition Tax Credits

These are all most certainly options for being able to pay for the cost of college BUT…
All these options require at least one of a minimum of five things:

1. Borrowing money
2. Filling out mounds of paperwork
3. Affording the LOAN
4. Saving enough money for an IRA in the first place
5. Good Credit

I keep thinking to myself, all this constant worry, stress and pressure could have been easily prevented if families would have just had the information and knowledge of creating a home business to generate income to pay for college for their kids.

Here are several benefits of having a home business to pay for college;

1. Generate a monthly cash flow to save and pay for college.
2. Congress has passed laws giving Thousands of Dollars in Tax Deductions to average Americans who operate legitimate home-based businesses. Thereby creating additional savings.
3. The average American who runs even a part-time home-based business can now qualify for more Tax Advantages than any other category of taxpayer.
4. Pay less taxes than you do now. Don’t have a home-based business? Then you are definitely paying way too much taxes. This alone will help most families save more than enough to pay for college.
5. The United States has TWO Tax Systems, and You Just Might be in the Wrong One!
6. Hire Your Family Members to Perform Business Services, and Watch Your Deductions SOAR!

There are all kinds of home businesses to get into. Many can help you generate monthly cash flow and potentially reduce income taxes you pay. However, there are many businesses out there that are scams and you have to do your homework on them to make sure they are legitimate.
One of the best methods to finding a home business is already at your fingertips. A hobby, or interest you have can easily be turned into a cash generating machine that would provide cash flow and keep many families from having to borrow money for college.

With higher education costs on the rise, many people these days have several student loans. These are not just medical students with several loans, but average students at public universities. It can help for those trying to pay them off to consolidate student loans into one bill and thus one payment. There are many advantages to having one loan besides the single payment each month though. Some that you may not be aware of are lower interest rates, a way to improve your credit rating, lowering monthly payments.

Applying for an individual student loan can lower the interest rate because places offer incentives to use them for the loan. Some companies offer a lower rate for having the monthly payment automatically deducted from your account. There is also a benefit by making so many consecutive payments, on time, and that showing will lower the interest rate. This of course will make your payoff amount decrease since more money will go to the principle instead of interest.

Having a single student loan can help your credit rating because of how your credit score is figured. Part of the score is made up of how many outstanding debts you have as well as the total amount due to each. Getting a student consolidation loan will give you a higher loan amount due but only for one loan and not the several others that you currently may have. Thus, your score will go up and even get better as you pay off that loan. It will not be an instantaneous fix as credit companies can take up to six months to report a drop of a loan off your report. But if you don’t use your credit unwisely in this time period your score will raise and when you do apply for something at later time you can possibly get a lower interest rate for that loan as well. Which will have you making lower payments on that item and help you pay off that loan faster too?

Of course a single payment with a lower interest rate is going to give you lower monthly payments. Owing several companies with their own payment rates can make the total paid each month much more. One lump payment is going to be lower just for the reason that only one creditor is loaning the money with one rate. And each of these companies will have their own interest rate, which changes the payment. An individual loan will have more of the payment going to pay off that loans interest and principle at once over several loans where it can vary from loan to loan how much is paying it off. And most importantly right now rates are very low and getting a consolidation loan can also have you paying less because your rate can drop tremendously, depending on what it was before. While it can start your loan term back to the length it was when you got the student loan, with lower payments and a lower interest rate, you should be able to pay it off even faster and get out of student loan debt quicker than if you kept the individual loans.