Thursday, April 6, 2006
More Bang for Your Buck: Loans
For most kids, it is their first true taste of adulthood. Before they go college, they must take out student loans. But in tonight's More Bang for Yhe Buck, new federal laws - starting this summer - may change the way you pay for your education.
WSVN--Not long after they take their first step.
And drive their first car.
Our children will take out their first loan, usually to pay for the rising cost of college.
Daniel Linfield: "The college I'm going to is very expensive. It's about 44-grand."
Like most high school seniors, Daniel Linfield is focusing on his future.
In the fall, he's going to Sarah Lawrence College in New York.
But he knows earning a diploma means graduating with a degree of debt.
Daniel Linfield: "If I can't pay for school, I'm not going to be able to go. Whatever will help me get there is a very important to me."
Starting July 1st, the rules are changing for students to get the money they need.
Etta Fleischer: "That's going to create a more of a hardship for students."
Etta Fleischer of Nova Southeastern says first and foremost students need to be aware interest rates will be reaching a five-year high... Going from three percent to over six percent.
Etta Fleischer: "Now the increase rates are going to be fixed, which means they are not going to go down."
But the government is also trying to help students save by introducing a new smart grant.
It will give an extra four-thousand dollars to third and fourth year students studying math, science or certain foreign languages.
Etta Fleischer: "These are fields that are necessary for growth in critical areas."
And if you plan on going to graduate school, the government is giving you an added incentive.
The new plus loan offers a lower interest rate for grads.
Etta Fleischer: "It's an additional loan that really will assist students in meeting the cost of the school."
Just remember, you will no longer be able to consolidate your loans if you're married or still in school. That's because the government wants to keep better track of your payments.
Nicole Velasco: "I've thought about consolidating because I think it will generally make things easier as far as paying everything back."
Nicole Velasco is graduating from law school this spring but she plans on consolidating before the deadline.
She knows without her student loans she would never be able to go to college.
One more idea - if you take out a loan and you don't need it, put the money in the bank and let it build up interest.