Unsolicited advice: Cosigning a loan

•March 11, 2010 • Leave a Comment

Sallie Mae offers a lower interest rate for students with a cosigner, or someone with a longer financial history and sometimes better credit. Usually a parent.
A cosigner is someone who agrees to be legally responsible for a borrower’s debt in case of default, bankruptcy or death. It’s actually quite a big responsibility.
And student loans are different than other loans, because they still need to be paid off even if a borrower declares bankruptcy, and a cosigner can still be responsible for them if the borrower dies.

On my loans, my dad is my cosigner. He is also the cosigner of my sister’s loans. This puts him at a huge financial risk if something tragic happens to us.

So what he did was take out term-life insurance policies from All State for like, $12/month, for the amount of our loans. That way, if either she or I die, the policies will activate and he will have enough money to pay off the loans. And when we pay off the loans, he can cancel to policies or let us start to pay for our own life insurance (if we have dependents, etc).

Kind of smart guy, my dad.

Some more information: here and here

Life update

•March 11, 2010 • Leave a Comment

Another six months and I haven’t done a single thing with my blog. The rest of my life has been exciting, however.
So an update from July 31:

I worked as a student fellow at the Omaha World-Herald’s Lincoln bureau. I interviewed my second CEO, went to the state fair, learned about new cuts of steak, wrote about ritual cat sacrifice and of course, asked about financial aid.  I met with some very cool people like Josefina Loza, a prolific and fun features reporter, and even got my friend Dakin’s amazing investment fund profiled (not because he’s my friend, but because he’s doing some amazing things as a 20 year old).

Over breaks, I visit newsrooms. This year, I visited the St. Paul Pioneer Press, the Minneapolis Star-Tribune, the Omaha World-Herald (always good to check back in) and the Des Moines Register.

And something amazing happened.

I was accepted to be a business reporting intern at the Chicago Tribune through the Chips Quinn Scholars during the spring semester. That’s where I am now.
For the Trib, I’ve written about Toyota recalls, the Chicago Cubs, paying to get an internship and the post office. I have a three stories waiting to be edited and thought I would take this time for an update.

I leave the Tribune at the end of April, right when Chicago is starting to get nice.
I will be heading down to the Arizona Republic in Phoenix and work at a community bureau for the summer.
This summer, I will also be traveling to Lyon, France and Casablanca, Morocco with friends, and Bolivia for some backpack journalism with UNL’s J-school.

Student loans, pt. 3

•March 11, 2010 • Leave a Comment

This is the third and final entry in a three-part series about my experience with student loans for my junior year.
Entry three: shopping and applying for private student loans

There are many financial institutions that offer student loans, but since the recession, applying and attaining have become a little bit harder. For one, there are fewer lenders, with the collapse of Lehman Brothers, which supplied some financing for student loans. And the lenders that do remain may not be so excited to lend: groups like Citigroup, Bank of America and Wells Fargo may be more selective as they look to accumulate capital and give loans to the most-likely-to-repay.
I have private loans from two lenders: Wells Fargo and Sallie Mae.
Note: I’m not advocating Wells Fargo or Sallie Mae over any other bank or services; I’m just sharing my personal experience and thoughts. Open to suggestions.

Wells Fargo: I have three loans through Wells Fargo for less than $4,000. I took out these loans so I could visit England with one of my class and two loans for online summer classes, one each summer ($700/class at UNL!).
Some reasons why I picked Wells Fargo:
1. I bank there, so the bank can see I am a good customer who uses a variety of their products, such as a credit card (boo), checking/savings, rewards and overdraft protection.
2. I also trust them – they’ve helped me with fraud twice, they’ve reversed overdraft charges because I was getting screwed and I love the online banking and mobility.
3. They’re also fast, which is really why I used them. These loans were all made with speed: I needed a small amount for England travel in May, I was approved in January. I needed small amounts for online classes in April, I got the loan in March. And it can right into my account instead of my university, so I could write the personal check, rather than wait for my school to do it for me.

Note: It looks like I’ll be taking out a loan again for summer classes, and I was a little worried about applying for a loan because the nearest Wells Fargo branch is 1 hour and 12 minutes away + $10 in tolls. But I found out the phone operations stay open until 10pm, which is perfect because that’s when I get home sometimes.
More info here.

Sallie Mae: Sallie Mae is public company that specializes in private student loans. I use Sallie Mae to make up for education loan deficits, not incidental education expenses. The federal government, through UNL, offered me only $7,000. I made the rest up through Sallie Mae.
Sallie Mae’s Smart Option Student Loan requires me to pay interest while in school, usually $50-100 a month.  Six months after I finish schooling, I will begin paying back on the capital of the loan, which I think is about $12,000 (for the last three years).My Sallie Mae loan went to my financial aid office. Through my payment setup, my rent and tuition were taken care of in those 2 payments (fall and spring semester), and the office disbursed the rest to me. This way takes a little while longer to get the money.
Sallie Mae’s Web site is kind of awkward to navigate sometime, but I’ve never had a problem with it. I receive reminders to pay my interest, whereas I don’t for Wells Fargo.
More info here.

Applying for loans to both of these places is pretty easy, though I think I did the Sallie Mae one with my dad over the phone, and needed some information on my FAFSA. I use my dad as a cosigner on all my

Entry Three: the difference between public and private student loans.

Student loans, pt. 2

•July 31, 2009 • 1 Comment

This is the second t in a three-part series about my experience with student loans for my junior year.
Entry Two: the difference between public and private student loans.

In the case of student loans, money’s not just money, and where the loan comes from makes a big difference in terms of amount, interest rate and repayment period.
The government does a pretty good job providing reasonable amounts for students to borrow at a low interest rate (5 or 6 percent) with a long repayment period. But the problem that I ran into is that it’s not enough for me to go to school.

Even after all the scholarships I received, I was still $7000 short of the amount I needed for school. Now, every student has to make choices when it comes to paying for school: lifestyle, school, work. I’ve made those choices too: I want to live in an on-campus apartment (as opposed to a dorm or a cheaper off-campus apartment), school is my absolutely number one priority and I work for the experience (both as a student journalist and as a referee). I refuse to work the hours necessary to pay for the rest of my schooling so I can focus on my classes. (And at about $20 a story, I would have to write 350 stories for the Daily Nebraskan. That’s 9 articles a week, and I definitely see that Not Happening.)
So the choice I ended up making is a private student loan.

I compiled ways and reasons private student loans differ from federal student loans:

Federal Student Loans:
Repayment on these loans is guaranteed, so it cannot be “discharged” even in bankruptcy.
The repayment guarantee results in a lower interest rate.
The interest may be federally subsidized.
Longer repayment period.
Require completion of the FAFSA.
May be issued through an educational institution

Private Student Loans:
Variable amounts that the borrower can determine.
Repayment is not guaranteed, so the interest rate is higher.
Usually don’t require completing the FAFSA.
Can have the funds issued directly to the borrower.
Interest rates and fees are determined by the lender and dependent on credit ratings
May require a cosigner if the student doesn’t qualify alone (A cosigner can lower the interest rate).
May or may not have deferment and forbearance options depending on the lender

And everything I’ve read and seen and heard recommends to go with federal student loans first and use private student loans as supplementary or to build and complete a financial aid package.

Information from here and here.

Students Loans, pt. 1

•July 23, 2009 • Leave a Comment

This is the first in a three-part series about my experience with student loans for my junior year.
Entry One: my initial options and choices

Yesterday, I turned down one of my offered financial aids and accepted another.  The two loans were offered hrough the University of Nebraska-Lincoln office of scholarship and financial aid. As a reporter for the Daily Nebraskan, I visited this office fairly frequently to write about the student loan market, financial aid and the Pell Grant (it was a big year for the Pell Grant).

The two loans offered to me were a Stafford Unsubsidized Loan and a Federal Direct PLUS loan.
A Stafford Unsubsidized Loan “is a federally guaranteed loan that is not based on financial need, but you do not have to make interest or principal payments until six months after graduation, or six months after you drop below a half time status.” (from here)

A Fed. Dir. PLUS loan is a loan that parents take out. I turned this down for that very reason. I accidentally accepted one freshman year and my dad was none-too-happy about it. My dad said repayment begins immediately, even if the amount is (relatively) small – $10,000 or so for my freshman year.

There are other types of financial aid out there; some, like the Pell Grant, are need-based and others, like scholarships, are based on criteria such as academics, ethnicity or performance (I have several scholarships). Here’s a good Web site to learn about financial aid.
Turning down the PLUS loan means I have to find $8,394 on my own. Soooo it looks like I’ll have to use a private lender.

Entry Two: the difference between public and private student loans
Entry Three: shopping and applying for private student loans

A resurrection!

•July 10, 2009 • Leave a Comment

I recently sign up with twitter and decided it was time to resurrect the long-forgotten story blog.  Only, since I’m not writing stories this summer, I can take this time to expand into trend discussion, perhaps some story ideas and media observation. It’s now a media blog. What a novel idea. =D

Since I last updated, I wrote a bunch more stories. Some that got some outside-UNL Web play are: Ayers On Short List Of Canceled Speakers At U. Nebraska; Desire Bigger Factor Than Money in Travel Abroad Destinations; and ISU Officials Take Weeklong Furloughs to Fill Budget Gaps.

I was No. 2 on a couple of internships, but was hired as summer media intern by the Nebraska Wheat Board, a state agency funded by producer checkoff fees. It’s been a neat experience so far: I’ve learned a lot more about agriculture, wheat, state government, rural communities, the state of Nebraska and design. I’ve gotten to dress up as a mascot, make play dough and bread and traveled to Scottsbluff, Neb., a seven-hour drive to the other end of the state. I am responsible for the weekly crop report in addition to other special projects I do for the board.

Fall semester, I will be working at the Omaha World Herald Lincoln bureau as a fellow. I am so excited to be writing for my beloved hometown paper. I’m accumulating story ideas and trying to feel my way outside the university campus and downtown area to open my horizons.

In order to be more media and beat-saavy and keep up with the business news of the day AND fill my day with one more thing to update, I’m reopening up this beast of a blog. Be excited.

National novel-writing contest challenges UNL students

•December 11, 2008 • Leave a Comment

I thought this was a neat story idea. I really enjoyed interviewing the primary source, Mr. Nick Marten. He was even so kind as to give me the prolouge of his NaNoWriMo novel and I included excerpts in the story.

Read it here: National novel-writing contest challenges UNL students