Some of the comments we've been receiving as of late—and I haven't been able to publish them all because they don't meet our Comment Guidelines—indicate that the Student LoanDown blog hasn't been spending enough time discussing student loans.

I'm not going to argue with that—we have diversified our content a bit this summer, adding new bloggers and broadening our topics. But here's what I would argue: that we're here to talk with you about financing college and managing debt, and that includes much more than just student loans.

These days, what I hear from so many young people is that their student loans feel like Monopoly®  money—abstract, unreal amounts with no consequences attached. That they're not even sure how much they owe. That they have no idea how they'll pay it back. Wait, you mean I have to pay it back?

Earlier this week I read an article quoting a 22-year-old college grad who said something along the lines of "we're too young to understand that we're going to owe this much" and that "it doesn't feel real until later."

I don't want to be judgmental here, but it's this kind of attitude that frustrates me. You're not too young to grasp the concepts of borrowing—you're just not doing it.

That's why we discuss the broader topics of debt and credit and wants and needs and budgeting and saving on a "student loan blog." We share our personal experiences for the same reason. If we can get any of these financial concepts to resonate with you in any way, we will have built a better educated, more responsible community of past, present and future student loan borrowers.

Because, my friends, it's not Monopoly money—it's as real as it's ever going to be. So do not pass Go, do not collect an unnecessary $200 at 6.80% interest, and, above all, do not claim ignorance. You're old enough to know.

Posted by Staci at 10:39 AM |  Contact Staci |  Permalink  |  Comments (10)
Found in Back to school, Banking, Budgeting, Credit cards, Debt, Federal loans, Financial education, Lenders, Money management, Online banking, Paying, Post-college, Preparing, Private loans, Student loans, Wells Fargo Bank

At the risk of sounding like a total nerd, I've never had an issue with debt and have always had good credit. Somehow, Mom and Dad got the message through to live within my means and pay off debts quickly.

Maybe it was because I saw my parents living simply, budgeting their money, balancing their checkbook, and not buying many of the big-ticket luxuries that their friends were indulging in. I can remember hearing my father say to my mother, "When you see me driving around a Mercedes , I won't be worrying about making payments." I guess I took that to heart and didn't want to worry about making payments, either.

I was the older of two kids from immigrant parents and grew up in a middle-class neighborhood. My dad was in the Navy , and my mom worked in the banking industry. My parents bought their first home when I was about 10 years old, and my mom managed the household finances.

When I was old enough, Mom gave me money management “training wheels” by putting me on her credit card account. But she didn't just hand the card to me without instructions—she taught me the basics like credit limits, balances, minimum payments, and payment due dates. And, while I didn't completely understand its value at the time, she emphasized how proud she was of her good credit rating . She said that I should try to build my own good credit by paying back my debts and always paying on time.

Now that I work in the credit card industry, I recognize the value of these lessons. And, from talking to friends, I've learned how uncommon it is for parents to give their kids the basic financial guidance I was lucky enough to get. By the time I got a credit card in my own name, I understood that each purchase I made was actually a little loan that needed to be paid back—so I really thought long and hard before using it.

Thanks to my folks, when I ventured out on my own I did so with a good credit history. This signaled to lenders that I was a good risk to buy a car or to rent an apartment. I was surprised to learn that even employers were interested in my credit rating. And, when it came time to buy a house of my own, I was able to qualify for a mortgage with a lower interest rate, which saved me a considerable amount of money.

What money management lessons—good or bad—have you learned? And who have been your teachers?

Editor's note: Please welcome Dinna as the newest member of the Student LoanDown blog team!

Posted by Dinna at 09:02 AM |  Contact Dinna |  Permalink  |  Comments (0)
Found in Banking, Budgeting, Cars, Credit cards, Debt, Financial education, Lenders, Looking back, Money management, Parents, Paying, Post-college, Preparing, Remember, Student loans, Wells Fargo Bank

So I'll be completely honest with you: Closing on my house was very anticlimactic. It wasn't an event loaded with great excitement—certainly no balloons or party horns. And it didn't leave me with a feeling of deep responsibility while a rendition of Chopin's Funeral March  played in the background.

Really, it was kind of "eh." I went, signed/initialed, shook some hands, and headed out a homeowner.

There was only one thing that gave me pause: the Truth in Lending disclosure . It's the document that lays out exactly what your loan entails, basically:

• Here's what you're borrowing.
• Here's what we're charging you.
• Here's what you'll end up paying us when all is said and done.

If you've borrowed a student loan, you likely saw something similar when you entered repayment.

I've told you before that I had calculated what I'd be paying in the long run. But seeing the number on a very official-looking document and initialing that piece of paper to signify my commitment? It was a wee bit intense. And even more intense was seeing the tens of thousands of dollars in debt automatically displayed in my online banking session after I closed on my loan!

Remember when I was first looking at loans? The number was what really scared me. And in the end, it kind of did—at first. Yes, I had to take some deep breaths when faced with the number at closing and online, but now the number doesn't really scare me. It keeps me grounded.

Every time I log in to check my account balances (I check them a lot, but mainly before I go shopping), I'm faced with that number. Thus far, it's helped me stay on the frugal side. You see, as I'm browsing the aisles, I recall not only my checking account balance but also the number two accounts down: my mortgage balance. So I find myself putting back that full-priced item and instead opting for an equally effective clearance or generic item—or sometimes, no item at all.

For the sake of my bottom line, I'm hoping this trend continues!

What does your debt number do for you?

Posted by Barbara at 09:24 AM |  Contact Barbara |  Permalink  |  Comments (0)
Found in Budgeting, Financial education, Housing, Independence Day, Lenders, Moving, Paying, Post-college, Preparing, Student loans, Wells Fargo Bank

This week I'm in our nation's capital—Washington, D.C.—attending the National Association of Financial Aid Administrators  conference.

It's unbearably hot and humid. The weather is triggering memories of the two Julys I lived here—when I'd walk the four blocks to my Capitol office in shorts and a T-shirt and change into hosiery and a suit after I arrived, drenched in sweat; when there was a brownout in my northeastern D.C. neighborhood and I sweltered through a sleepless, 100-degree night without air conditioning; when my friends and I would drive to Rehoboth Beach  in the middle of a weekend afternoon just to get some relief from the heat.

When I was much, much younger.

On Sunday afternoon I attended a seminar on the legislative and regulatory changes happening in the student loan industry. Here at the conference, it's a topic as hot as it is outside.

I've mentioned before that lately there's been a lot of media attention given to inappropriate relationships between some financial aid directors and some student loan lenders. But the operative word is some. The majority of those who work in financial aid aren't in it for money or glory. In their profession, there isn't much of either to be had. Rather, financial aid counselors, directors and administrators are doing this work for one reason: to help students and families pay for college educations. And it's complicated, stressful work.

So I'd ask this: Instead of believing all the negative stuff you see in the media about financial aid professionals, give 'em the benefit of the doubt. When you enter their offices, don't automatically be skeptical about their motives or intentions. Remember that they have knowledge to share, experience upon which to draw, and compassion beyond compare.

If they didn't, they wouldn't do what they do. And they certainly wouldn't be sweating it out here at the conference, trying to learn new information about how to help families navigate the choppy waters of financial aid. They really are good nuts, here to help. Let them.

Posted by Staci at 08:42 AM |  Contact Staci |  Permalink  |  Comments (2)
Found in Federal loans, Financial aid, Financial education, Grants, Lenders, Looking back, Paying, Preparing, Private loans, Refinancing, Remember, Student loans, Wells Fargo Bank, Work-study

After July 1, you'll have an even bigger reason to apply for federal aid—increased Federal Stafford Loan  limits.

In case you need a couple of reminders why it's a good idea to max out your federal funding before turning to private loans, check out some discussions we've had earlier on this blog.

• They're guaranteed: What's so special about federal loans?
• Almost everyone qualifies for some kind of aid: Is financial aid for you?
• They can be consolidated: Raising my hand with consolidation questions

I know you're wondering how much you could be able to borrow. So, see the chart below with the new Stafford Loan limits for dependent and independent students.

Remember two things:

1. An independent student is someone who meets one of these criteria:

• A graduate or professional student
• A married person
• An individual with legal dependent(s) other than a spouse
• A veteran of the U.S. Armed Forces
• An orphan or a ward of the court
• At least 24 years old by December 31 of the award year
• Deemed independent by the school's Financial Aid Office due to special circumstances

2. A subsidized Stafford Loan:

• Is need based
• Means any interest that accrues during school or deferment paid by the government

Posted by Barbara at 08:29 AM |  Contact Barbara |  Permalink  |  Comments (0)
Found in Consolidation, Federal loans, Financial education, Lenders, Paying, Preparing, Private loans, Student loans, Wells Fargo Bank

I'm a sucker for breaking the awkward silence. If a professor waited long enough after asking a question in college, I would always pipe up. Well, if I kind of knew the answer.

I asked y'all for questions about student loan consolidation, and so far you haven't asked any! Well, the awkward silence is getting to me—so I'm going to raise my hand and ask (as well as answer) questions that I've been asked in the past.

What exactly is consolidation?

Consolidating means taking out one new student loan that combines your other student loans. Your consolidation loan lender will pay off the loans you are combining, so you'll have one new loan for the total amount. BTW, when people talk about student loan consolidation, they're usually referring to federal loan consolidation. Some lenders also offer options for private loan consolidation.

Am I eligible?

If you have federal student loans—no matter which lender holds them—you can consolidate them with any lender. Here are the federal loans that I'm talking about:

• Federal Family Education Loan Program loans (Stafford, PLUS, SLS, and Consolidation Loans)
• Federal Direct Loan Program loans (Stafford, PLUS, and Consolidation Loans)
• Federal Insured Student Loans (FISL)
• Federal Perkins Loans
• Health Professions Student Loans (HPSL)
• Nursing Student Loans (NSL)

And yes, you read that right. If you already have a federal consolidation loan and take out another federal loan (say you go back to school after a couple years to get a master's degree), you can "reconsolidate" and add more federal loans.

You can also consolidate a single Federal Stafford or Federal PLUS loan if you want to lock in the rate.

Why should I consolidate?

Consolidation offers a couple key benefits:

• You might see a lower payment each month—which can help when you're trying to manage other monthly payments while paying back your loan.
  
  
• Instead of making several payments, you'll only have to make one.
  
  
• Your loan will have a fixed interest rate—this is a big one, especially if you have variable-rate federal loans. The next questions tell you why.

What kind of rate will I get?

For federal loan consolidation the rate is an average of the rates on all the loans you are consolidating, rounded to the nearest one-eighth of a percent. But it won't get higher than 8.25%. Speaking of rates …

When should I consolidate?

This is an important question right now because students with variable-rate federal loans will see an interest-rate increase on July 1, 2007. If you have a federal loan that was issued before July 1, 2006, you're in this boat. These loans also increase by 0.60% when your grace period ends, so it's better to consolidate while in grace.

Why shouldn't I consolidate?

In some situations, there may be a better option to ease your loan repayment—like different payment options.

Also, you need to be aware of the disadvantages of consolidation. Since you might be extending your repayment term, you could end up paying more interest in the long run. And, it's possible you might lose any borrower benefits you've been reaping on your loans.

Here's a good checklist  that walks you through your decision.

What else should I know about consolidation?

• You can't "unconsolidate" your loans. Once you consolidate, your old loans don't exist anymore—your consolidation lender paid them off.
  
  
• Until your lender tells you your consolidation is complete, you need to continue making payments on all your separate loans.

OK, now that the silence is broken, is there anything else that you're wondering? If so, raise your hand.

Posted by Barbara at 07:52 AM |  Contact Barbara |  Permalink  |  Comments (5)
Found in Consolidation, Federal loans, Lenders, Paying, Post-college, Preparing, Private loans, Refinancing, Student loans, Wells Fargo Bank

Remember the self-absorbed, spoiled Veruca Salt from "Willy Wonka and the Chocolate Factory" ? In the first film adaptation of Roald Dahl's book (which I was a wee bit obsessed with in my youth), Veruca sang my favorite song, "I Want It Now!" 

(Note: The following links to a video from a non-Wells Fargo website )

While I doubt anyone has golden egg-laying geese or Oompa-Loompas  on their wish list, there are a lot of things that we want NOW—like a car, a home, or an education. But unlike young Veruca, we don't all have a rich father willing to pay whatever price for whatever we want.

Enter the lending industry: entities that will pay for what you want NOW, if you pay them back later—plus some. Sometimes that "plus some" (we're talking money in interest here, not your first-born child) can be pretty hard to swallow.

Take my home purchase. Each month, I'll be paying an average of $370 in interest on my mortgage. If I actually had my loan for the entire 30-year term without paying more than what's required toward the principal, that's almost $120,000 in interest.

Bleh. Just typing that number makes me a little sick.

But here's the deal: I'm choosing to pay the interest because, like Veruca, I want it NOW! I don't want to wait until I've saved enough to simply write a check for a house—I'd be waiting a long, long time. Instead, I'm relying on a lender to help me, and I'm willing to pay for it.

Sometimes I get frustrated by people—myself included—complaining about the debt they've taken on and the amount of interest they owe. When I become one of the complainers, two reminders help put things into perspective:

1. Borrowing to get things NOW is a privilege—not a right, and
2. Had I not taken on debt, I'd still be saving for many of the things I enjoy NOW.

My fellow Verucas, what frustrations do you have with borrowing to get what you want NOW?

Posted by Barbara at 09:18 AM |  Contact Barbara |  Permalink  |  Comments (0)
Found in Financial education, Lenders, Paying, Post-college, Preparing, Private loans, Student loans, Veruca Salt, Wells Fargo Bank, Willy Wonka

Have you noticed that there's been a lot of scrutiny surrounding the student loan industry lately? We certainly have—and as a result, Wells Fargo decided it was time to make our student loan business policies public. Earlier this week, on May 29, we announced our Responsible Lending Principles and Marketing Practices for Education Financing.

What do we mean by these principles and practices, exactly? Well, essentially it's our commitment to our customers—both our borrowers and our schools.

As part of our own lending principles for borrowers, Wells Fargo will:

• Promote responsible borrowing by encouraging students to consider all education financing options available to them and borrow only what they need.
  
  
• Offer attractive financing solutions, which include competitive interest rates and other incentives.
  
  
• Provide consumers with full disclosures about loan options and costs on our website.
  
  
• Provide superior customer service to students and families.
  
  
• Use our best efforts to ensure that borrower benefits offered during loan origination continue even if the loan is transferred, purchased, sold, or the servicer is changed.
  
  
• Disclose to a borrower any agreement to sell a loan if Wells Fargo will no longer service the loan. Wells Fargo wants to establish long-term relationships with our customers and has only rarely sold its loans in the past.

I know it probably goes without saying, but we're very proud of our record of following responsible business practices and our history of providing high-quality educational loan products and customer service to the schools, students and families we serve.

We welcome the recent changes in the student lending industry because we believe it's important that all lenders follow the same set of rules.

Posted by Staci at 09:18 AM |  Contact Staci |  Permalink  |  Comments (6)
Found in Financial education, Lenders, Paying, Post-college, Preparing, Private loans, Student loans, Wells Fargo Bank

Recently we had a good question from one of our readers, Pam:

How do I go about contacting my lenders?? I see the "notify your lender(s)" things everywhere, but nobody actually tells me how to do this!!

Sometimes we do forget to cover the most basic questions! That's why we're glad Pam asked it.

Contacting your lender sounds simple enough, but it's possible—especially if you have multiple student loans—that you may not know who your lender is. It's common for student loans to get sold, so the lender you originally borrowed from may not be the lender you contact when you're in repayment.

So what to do?

1. Check your student loan paperwork. Anything your lender has sent you in the mail should have contact information on it. If your student loan has been sold, you should have received notification in the mail with contact information for your new lender. (If you haven't been saving your paperwork all along, start now!)
   
   
2. Do some research. If you don't know who your lender is, and you don't have any paperwork with contact information, it's time to do some research. It might be easiest to contact the financial aid office at your school and ask them who your lender is. (You can probably find the phone number for the financial aid office on your school's website.)
   
   If you have federal student loans, you can also learn who your lender is by checking the National Student Loan Data System (NSLDS)  website. If you have private student loans , you won't be able to research them on this site, so you may have to rely on your school to let you know who your private loan lender is.
   
   
3. Find your lender online. Once you know who your lender is, look them up online to find their phone number(s). Many student loan lenders offer their phone number pretty prominently online (proof that they really do want you to stay in touch!). Some lenders offer a way to email them as well.

If Wells Fargo happens to be your lender, you can reach a student loan representative by calling 1-800-658-3567.  Here are some other ways to contact us as well.

Posted by Caroline at 02:35 PM |  Contact Caroline |  Permalink  |  Comments (0)
Found in Federal loans, Financial education, Lenders, Paying, Post-college, Private loans, Student loans, Wells Fargo Bank