It's graduation time! Congratulations to those of you who are finishing your degree this month. Take time to celebrate, but don't forget your student loan payments will be here before you know it (wah wah!) .

Luckily your Federal Stafford Loans will likely have a 6 month grace period before your first payment. Have you thought about how you're going to use that time?

If you have unsubsidized Federal Stafford Loans, where all the interest accrued is your responsibility, you could use your grace period to pay off interest you've accrued during school. Otherwise, that interest will be capitalized (added to your principal balance) once your grace period ends.

That means you'd pay interest on interest. Paying even just a portion of your interest off could make sizeable difference in the total amount you pay.

If the government is paying your accrued interest with a subsidized Federal Stafford Loan or if you've already paid interest off yourself (nice work!), here's another idea for your grace period: practice making your payments. This way, you get used to making a payment each month AND you'll have a nice stash of cash once repayment does begin.

One other thing to think about: If you're finishing graduate school and dealing with Federal PLUS Loans for graduate students as well, know that you won't have a grace period on those loans. Repayment begins immediately even if you had your payments deferred while you were in school. However, some lenders will give you the option to align the repayment start dates of your PLUS and Stafford loans through a forbearance.

Posted by Barbara at 10:37 AM |  Contact Barbara |  Permalink  |  Comments (0)
Found in College, Federal loans, Money management, Paying, Post-college, Preparing, Student loans, Wells Fargo Bank

For many of you who will graduate from college any day now, you're starting one of the most fun, scary and challenging times of your life. You're facing a huge change — and you may have a hard time coping, whether you're moving to a new city to start your career, or moving back in with your parents to job-hunt.

I recently came across a fabulous article  about how to handle those first 30 days after graduating from college. The tips range from the simple and practical (make sure you have a professional-sounding email address) to the deeper, emotional stuff (how to handle the loss of your college support system).

I wish I'd read a guide like this when I graduated. The months following my college graduation were probably much more stressful than they needed to be.

What will your first 30 days after graduation bring?

Posted by Caroline at 09:44 AM |  Contact Caroline |  Permalink  |  Comments (0)
Found in Financial education, Post-college, Preparing, Wells Fargo Bank

If you're graduating from college this spring, you probably can't imagine not being on campus — hanging out in the dorms, roaming the library stacks, playing Frisbee  on the green. But once you graduate, why would you go back?

That's a question I've struggled with for a long time.

I've been out of school for awhile, and until recently I hadn't set foot on my college campus in about five years. Considering that I live in the city where my college is located, that's pretty sad. But I figured I'd already had my four years, and there was a whole new generation of students to whom the campus now belonged. I guess I didn't think I was welcome.

A few months ago, though, things changed: I was recruited for a leadership board at my alma mater . Since then I've had a chance to spend some time on campus, with recent graduates, and with this year's graduating class. I've reconnected with some of my own college classmates on Facebook . And I've been asked to help with a Class of '93 tailgate at homecoming — my 15-year reunion, gasp! — this fall.

After all this time away, it feels good to be back.

As you're graduating, you're probably experiencing two emotions, maybe even simultaneously: that you can't wait to get out of there, and that you're so sad to go. I think that's completely normal.

But I also think that as you move on, it's important for you to stay connected to your college in the ways that matter to you, whether it's through your relationships with friends and professors, your support of arts or athletics, your gifts to the annual fund, or your participation in the alumni association.

So my advice to you, new graduates, is this: After giving yourself some necessary time and space away from college, you can — and should — go back. You are welcome, and you belong there. Don't wait as long as I did.

Congratulations to the Class of 2008!

Posted by Staci at 12:58 PM |  Contact Staci |  Permalink  |  Comments (0)
Found in College, Looking back, Post-college, Wells Fargo Bank

I'm older today. Well, you are, too. But I have to jump numbers today. Last year I did some evaluating when I turned 23. And I figured I'd do so again to see where a year older and (supposedly) wiser has gotten me.

To the naked eye, it may seem that I'm even farther from crossing "organize my finances" off my to-do list.

While the year has taken a toll on my finances — from major purchases to unexpected medical bills — I'd like to think the organization piece is there. I might not be in the green, but I am aware of where my money is being spent and how to use my income wisely.

I have to admit that 24 is one of my scary ages. The label "early 20s" is now off limits and full-fledged adulthood is required — at least that's how it works in my mind. So, it feels good to have my financial adulthood on the right track.

I've slowly come to accept my entrance into financial adulthood — however, I keep wondering when it's going to feel real. There are times when I'm sitting down working on my budget, or clipping coupons, or sorting through insurance statements, or transferring money to pay my mortgage when I sit back and think: Am I seriously doing this?

According to an older Money Magazine article , I have the mentality of a financial grown-up.

So why don't I feel like one?

Even a salaried job, mortgage, and 401k don't help me adjust my senses. Some days it seems like I'm dreaming and will wake up to find myself a teenager whose only financial responsibility is making enough tips as a waitress to stay remotely fashionable.

So what will it take? Joint finances with a spouse? Financial responsibility for dependent children? Will the way I feel ever reflect my financial maturity?

What helped you feel financially mature? Taking on student loans...or perhaps repaying them? Your first big paycheck?

Or maybe you feel the same way I do. You tell me: At what point do you really feel financially grown-up? Or do you ever?

Posted by Barbara at 10:00 AM |  Contact Barbara |  Permalink  |  Comments (0)
Found in Budgeting, Debt, Financial education, Money management, Paying, Post-college, Wells Fargo Bank

It arrived in late December: a legal-sized envelope from my alma mater . At first, I thought it was just the usual fundraising letter, but then I saw the bolded, capped outer envelope message: CLASS AGENT LETTER ENCLOSED!

To quote Liz Lemon , my heroine from 30 Rock , "Blurg."

I dread the biannual letter from my class agent, which, according to my school, is supposed to "help to build informed, unified, and motivated classes for a stronger Augustana. Class Agents send a fall and winter letter to their classmates, keeping them informed of moves, marriages, family changes, new jobs, and awards."

Don't get me wrong. The agent for my own college class is a lovely person. Actually, she and I were friends — at least until we had a bit of a falling out during our senior year. It's just that all of my insecurities come rushing out whenever I open the envelope and read about my fellow alums' achievements.

"So-and-so moved to Dubai  and bought a palace!"
"So-and-so had her fifth child, and her entire family is in the Mensa®  program!"
"So-and-so received three Ph.D.s  and won the Nobel Prize !"

Okay, maybe I'm exaggerating just a little. But you get the idea.

I guess you never really stop competing with your classmates, even after you've been out of college for 15 years. And you never stop comparing yourself to them, either. Someone is always going to be smarter or richer or more fulfilled than you are, whether you open the envelope or not.

So I shouldn't let it get to me, right? The fact that my former classmates are doing well now is a testament to the quality of our education. It doesn't take anything away from my own success. And ultimately, it's cause for celebration, not angst.

How do you feel when you compare yourself to your fellow students (or don't you)? Does the competition throw you for a loop, or does it motivate you to work harder?

Posted by Staci at 04:00 PM |  Contact Staci |  Permalink  |  Comments (2)
Found in Looking back, Post-college, Wells Fargo Bank

Student LoanDown readers, I’m pleased to share another question and answer series with you from Ask the Expert:

I am starting graduate school in the Srping of 2008 and going full time. My intended graduation date is May, 2009. I applied for financial aid. I am awaiting my award package.

The maximum amount of federal stafford loans (subsidized and unsubsidized) for grad students is about $18,000 per academic year. So my question is, will I get $18,000 starting this spring (2007-2008 school year), and another $18,000 starting in the fall (2008-2009) school year? Or will I get screwed and only get half ($9,000) for the spring, and then like the whole amount for the next school year ($18,000) in the fall???

It is pretty important because I have to take summer classes also, so my average cost per academic year is about $23,000, which is more than the aid I will receive. So depending on the timing of their disbursements, upfront for each academic year, or they split it in half, makes a big difference to the kind of leverage I can have with that money and determine wether I can move out, have some breathing room, etc.

Hmmm, a bit of a quandary. What do you do when the cost of your graduate school education and the amount of financial aid don’t add up? Fortunately for this reader, the math had changed slightly:

Generally, school certified student loans are disbursed in multiple installments throughout the academic year—not just in one lump sum. So you should receive separate disbursements for the spring semester of 2008, the fall semester of 2008, and the spring semester of 2009. Check with your school's financial aid office to be sure. Your school also might have a special financial aid application process for summer classes, so I'd recommend you ask about that now.

The good news is that the maximum annual Federal Stafford Loan limit for graduate students has increased a bit—to $20,500. That will give you some breathing room!

There was also a change to the Federal PLUS Loan program last year that extended eligibility to graduate students. You can apply for this loan after you've applied for your Federal Stafford Loan if you still need additional funding. There's no annual maximum, so you can borrow up to the cost of education (tuition, rent, books, etc.) minus other financial aid you've received. This loan has a fixed interest rate and after the Federal Stafford Loan, it's one of the most affordable loan options available. If this loan isn't included in your award package, ask your financial aid office if it's an option for you.

One last bit of advice: Borrow only what you really need, because you have to pay it back—with interest.

Got a question for us? We’ve probably got an answer (or can find one), so don’t be shy!

Posted by Staci at 11:15 AM |  Contact Staci |  Permalink  |  Comments (2)
Found in Back to school, College, Federal loans, Financial aid, Graduate school, Paying, Post-college, Student loans, Tuition, Wells Fargo Bank

Right now, student loan consolidation may be on the minds of many student loan borrowers. If you graduated in May, your loans are probably coming out of their grace period right about now. Some of you may already have made your first payment.

I received an email question recently about consolidation—specifically, if borrowers would be better off waiting to consolidate their loans—and I wanted to share my response with all the Student LoanDown readers. The short answer is: It depends.

If you’re just entering repayment on your student loans, it’s likely some of the loans are variable-rate federal loans. The rate of these loans is adjusted annually each July 1  based on the 91-day T-bill rate. If you’re a borrower with these loans, it’s possible your rate may go down in July.

Remember, the rate on a consolidation loan is based on the weighted average of your current interest rates rounded up to the nearest one-eighth of a percent. Lower interest rates on variable loans could mean a lower consolidation loan interest rate.

So, should you wait?

There are a number of reasons you may decide to consolidate your loans, and many variables play into whether consolidation is the right choice. It depends on what you’re hoping to accomplish by consolidating:

• If you’re looking to reduce your monthly payment by consolidating, chances are your monthly payments might be more than you can handle. If that’s the case, you would likely benefit more from an immediate ease on your monthly cash flow. Otherwise you’d still have to make those higher payments each month until the July rate change.
• If you want to lock in your rate by consolidating—which is more of a factor for those with a large amount of variable rate loans—it could be beneficial to wait until July. Right now variable interest rate Federal Stafford Loans are at 7.22% during repayment. It is possible that next July variable interest rate loans might be lower, but there is no guarantee. There’s always the chance that the rate might not decrease.

For some borrowers, consolidation may not be the right option at all:

• Depending on your interest rate and loan balance, it might not make sense to consolidate. For example, if you have a large amount of debt at one interest rate and a smaller portion of debt at a higher rate, it might not be the best choice to combine those debts. You could be paying a higher interest rate in the long run on a portion of the balance that originally had a lower rate.
• Another option to consider in lieu of consolidation is an extended repayment plan. This option is generally available if you have more than $30,000 in student debt through the Federal Family Education Loan Program (FFELP) . With extended repayment, your monthly payment would decrease without having to take out a new loan.

So that’s the skinny on waiting to consolidate. Any questions?

Posted by Barbara at 10:02 AM |  Contact Barbara |  Permalink  |  Comments (7)
Found in College, Consolidation, Debt, Federal loans, Paying, Post-college, Student loans, Wells Fargo Bank

Calling all parents of high school seniors!

It's now time to take on a not-so-fun parental duty. It's time to have "the talk" with your senior: that uncomfortable discussion about college costs and their future ability to repay their student loans.

In almost every article I read these days about student debt, there are a few anecdotes about students who spent thousands upon thousands of dollars on college, only to find upon graduation that their salary is completely out of whack with their debt load.

I'm always left wondering if the student either: 1) had no idea of the earning potential in his/her chosen career; 2) knew the earning potential but just didn't realize how that would translate in a practical sense; 3) just chose not to think about finances at all until it was time to pay.

It's easy to understand why 18 year-olds would have a tough time understanding how their salary translates in the real world. That's where parents need to step in during the college-selection process and give the following short, but pointed speech:

I know you're very interested in attending "Really Expensive College," but we're going to have to consider what kind of financial aid package they offer you. Because you plan to study XYZ, you'll probably start out at a salary of around $25,000. Once we see your financial aid package, we'll have to figure out how much money you'll need to borrow, and what your monthly payments will be once you graduate. If it's going to be too much to handle on your salary — and I can help you figure that out — you're going to have to consider "Less Expensive College ."

Of course, the discussion may not be that simple — especially if your child is very attached to the idea of attending an expensive school and following a career path that doesn't justify the price tag. But hang in there, parents, and keep them focused on financial reality. They'll thank you one day.

Parents: are you talking with your kids about college costs?

Posted by Caroline at 09:33 AM |  Contact Caroline |  Permalink  |  Comments (1)
Found in College selection, Debt, Financial aid, Financial education, Jobs, Money management, Parents, Paying, Post-college, Preparing, Student loans, Tuition, Wells Fargo Bank

For a number of my friends, formal education didn't stop at our undergraduate commencement. Many are now taking graduate level classes towards a master's degree. Some are taking classes on top of a full-time job, some are working part-time and some aren't working at all.

I'm always interested to see which of those options grad students choose. What are you, your friends or your family doing?

Each option has its perks and pitfalls. There's not a singular best option for all graduate students – it depends on the individual situation. The choice can be based on a number of variables, like what kind of program the student is in, the need for a steady income, or how much money the student wants to borrow. Caroline addressed the financing piece in an earlier post back in May.

Here are a couple things to consider:

Tuition assistance: For those students who choose to work full-time, many employers offer a tuition reimbursement program  so employees can continue their education part-time while they are working.

Grants and assistantships: Sometimes instead of working part-time outside of school, graduate students can get financial assistance through assistantships  in their own department. Usually students must be attending full-time to qualify for a GA position.

Attending school part time : Even if your employer doesn't offer tuition assistance, having the income and benefits from a job may give you the ability to take a class here and there, working slowly toward an advanced degree.

Working part time: Working part time while attending school full-time may mean borrowing less money through student loans, which could save you money in the long run.

Workload: For many programs, there really isn't an option to work. With heavy loads of homework, some graduate students just need to focus on their studies.

Are there any graduate students or former graduate students out there with advice for those facing the work conundrum?

Posted by Barbara at 11:06 AM |  Contact Barbara |  Permalink  |  Comments (0)
Found in Back to school, Banking, Budgeting, Financial education, Graduate school, Grants, Jobs, Money management, Paying, Post-college, Preparing, Student loans, Tuition, Wells Fargo Bank

Most students head off to college full of anticipation. Your life's finally getting started, you've got a newfound independence and you're on way to a real career.

I hate to be a Debbie Downer  here, but despite all those high hopes, by the end of freshman year about 30 percent of students have dropped out. And according to the Department of Education, around 50 percent never graduate at all.

I'm only bringing this up because I don't want it to happen to you. If money is the problem , consider this: college graduates earn roughly twice as much  as non-graduates over a lifetime. You really don't want to leave school with the double whammy of debt and no degree. If you're struggling with money, get yourself to your school's Financial Aid Office right away. They're the best people to help figure out your options.

Unfortunately, many students drop out of school because they simply don't know what it takes to stay in college — I've seen this with my own eyes. Here are some simple suggestions that will go miles toward keeping you in college:

1. Go to class. You know how they say "90 percent of life is just showing up"? This definitely applies in college. No one's there to make you go, and it's going to be tempting to skip sometimes, but you have to show up for class. When you get there, if it's a big lecture hall, sit up front. You'll be less distracted, you'll hear better, and you'll automatically pay more attention because the professor can actually see you.

2. Study . Study between classes whenever you can. Even if you've just got an hour, you can review your notes, read a chapter or outline a paper. In the evenings, find a quiet place away from distractions. If you're struggling in a class, see your professor, teaching assistant or advisor — they may be able to help you get a tutor.

3. Stay on campus on the weekends. During your first year of school, it can be really tempting to run back home on the weekends, but don't give in. Finding yourself at loose ends on a weekend may feel strange, but there are plenty of other freshmen in the same boat. Stick it out — you've got to commit to making friends and finding a life at school if you want to succeed

4. Don't go out on weeknights. This ties directly to point #1. Simply put, you'll be less-inclined to skip class if you weren't out the night before. You don't have be a hermit during the week — have a TV night   with your friends, go for study snacks, whatever keeps you sane. But treat college like a full-time job: Take it seriously and save going out for the weekends.

What do you think? What does it take to stay in college these days?

Posted by Caroline at 11:44 AM |  Contact Caroline |  Permalink  |  Comments (3)
Found in Back to school, Jobs, Post-college, Preparing, Remember, Wells Fargo Bank

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

Oh, the Joneses. You know the saying about keeping up with them . It's something we've probably all dealt with at some point. Wanting the same things your peers have is likely a constant struggle—at least it is for me.

My most recent battle is with my next-door neighbor. Since I first moved in, the neighbor to my right has kept an immaculate lawn—green and lush. I've been super jealous.

My lawn was on its last legs when I moved in. Add a couple more days before I got a hose and, well, it was pretty much brown. But eventually I started watering for about an hour on my designated night (following the necessary guidelines  in the city), and the grass started to perk up.

It wasn't long before I came to my senses and realized that watering could get expensive, so I decided to cut back—Joneses or not.

It's really easy to get caught up in keeping up with others. You tell me: What's the worst when it comes to your Joneses?

And BTW: Thankfully, we've been getting lots of rain lately, so I haven't needed to water and still have grass jam-packed with chlorophyll . I wish the rain could help my other Joneses problems, though—I'll keep hoping that a size 10 designer shoe tree will sprout up in the backyard.

Posted by Barbara at 09:17 AM |  Contact Barbara |  Permalink  |  Comments (2)
Found in Budgeting, Financial education, Housing, Money management, Moving, Paying, Post-college, Preparing, 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

It's official: I'm a married woman. And big changes are happening, starting with my name. I opted to take my husband's last name. My husband. I'm still getting used to that word and also introducing myself as Rachel Curran.

Speaking of big changes—I have a hot tip for those of you who are preparing to leave home and move to college soon. Contact your friends and family members who are getting married this summer and let them know your plans to move. More than likely, they will welcome you to their endless supply of boxes, packing material, and a slew of used household goods (especially kitchen supplies).

Like many couples, we decided to register for some new household items and upgraded from plastic to stainless, glass to crystal and dull to Wüsthof . Most of our wedding guests shipped gifts directly to our home, which were expertly wrapped with yards and yards of paper and bubble wrap.

As we opened these wonderful gifts, I began a new phase of married life—"nesting." This involves me running around our house for two straight days having a Feng shui  attack. I now have a solid Goodwill  pile going (which my brother has already raided), a garage full of boxes, and a heart full of gratitude.

Now, one can only be entertained by cardboard forts with bubble wrap driveways for so long. (Who says marriage has to equal maturity?) Eventually, the materials will need to be taken to the curb or recycled through a friend. Save some money on your moving supplies and ask the newlyweds if you can help them recycle their packing material. Your friends, the environment, and your budget will thank you for it.

What budget-friendly moving tips do you have?

Editor's note: The former Rachel Statham married Jim Curran on June 24, 2007. Congrats to the newlyweds!

Posted by Rachel at 09:28 AM |  Contact Rachel |  Permalink  |  Comments (1)
Found in Budgeting, Financial education, Housing, Marriage, Moving, Newlyweds, Post-college, Preparing, 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

I am happy to share my big news with you, Student LoanDown readers—I've officially put the label "apartment dweller" behind me!

That's right: I'm a homeowner. And as proof, I'm sharing some pictures of the steps I took to get into my first house.

Step 1: Sign your name about 50 times on several very important documents.

Step 2: Take the obligatory "receiving the key to your new home" photo with your real estate agent.

Step 3: Solicit help from your family (pictured are my oldest sister and my nephew) to move all your worldly belongings (might I add that I picked the hottest day of the year to move—smart).

Step 4: Enjoy the fruit of your new debt.

More on my transition to homeownership to come.

Posted by Barbara at 09:13 AM |  Contact Barbara |  Permalink  |  Comments (3)
Found in Budgeting, Financial education, Housing, Independence Day, Moving, Paying, Post-college, Preparing, Student loans, Wells Fargo Bank

For me, the answer isn't as easy as it was when I was a 10-year-old. Back then, I wanted to be a marine biologist —never mind my inability to swim without a nose plug and the obvious geographical hindrance, being in landlocked Nebraska .

My answer changed over the years—to teacher, nurse, lawyer, writer and more. Frankly, I haven't quite solidified a final answer.

For those trying to answer that question, there are a couple of other logical questions to consider: What should I major in? Where should I go to school?

When it comes to paying for an education, those questions can have a very large effect on your financial future. Obviously, your college price tag varies depending on what and where you're studying. When you're making these decisions, you should also be thinking about what you'll be doing after graduation—and asking yourself: "Will I be earning enough money to repay what I borrowed?"

Most advisers suggest  not exceeding monthly student loan payments over 10% to 15% of your expected salary .

I'll give you an example. Let's say our student:

• Has a major in psychology—both a bachelor's and master's degree
• Eventually wants to teach psychology at a university
• Is taking on about $40,000 of Federal Stafford loan debt

Is that decision financially sound?

Well, if the expected salary is around $50,000 out of college, our student will have a monthly income of about $4,200. By using a payment calculator (at 6.8% interest rate for 10 years), you can see that the monthly loan payment is $460—about 11% of the estimated monthly income. Our student is pushing their suggested borrowing amount. In this case, it might make sense for our student to get extra income from a part-time job during school instead of borrowing so much.

Seems to me that the question to answer isn't what do you want to be when you grow up, but can you afford it?

Posted by Barbara at 09:12 AM |  Contact Barbara |  Permalink  |  Comments (0)
Found in Budgeting, College selection, Federal loans, Financial education, Jobs, Paying, Post-college, Preparing, Private loans, Student loans, Tuition, Wells Fargo Bank

When your friends are at different life stages—or different economic stages—than you are, sometimes it’s a bit of a struggle.

Twelve and a half years separate me and Barbara (it’s true—I could’ve been her babysitter). So I’m a little older, a little more established career wise, and a little less nervous about my mortgage payment. Basically, I have more disposable income  than she does. I’m always suggesting stuff for us to do, and that stuff—shoe shopping, a concert, a weekend in Des Moines to visit Caroline—usually costs money.

To her credit, Barbara’s really good at saying no:

Me: Hey, let’s go to lunch!

Barbara: I can’t—I only have $100 left in my budget for the week. I’m going to go home and eat oatmeal instead.

Me: Seriously?

With only a few weeks to go before she closes on her house, Barbara is committed to her budget—and I applaud her for that. Fortunately, for the sake of our friendship, we’ve managed to compromise. If we go to the movies, we hit the discount matinee or the second-run theatre and smuggle in our own treats (shhh!). Or for lunch, we’ve discovered that we can get a gigantic pizza slice and an even larger soda for less than three bucks at Sam’s Club .

Actually, I can’t complain. This thriftiness is good for my own bottom line. Plus, with the money I’ve saved, I’m more than willing to treat Barbara once in awhile—whether it’s to a real restaurant lunch or something for her new home. When she protests, I just remind her that one day, she’ll be the older, wiser friend and can pay it forward  to someone else.

I hope she will.

Posted by Staci at 07:38 AM |  Contact Staci |  Permalink  |  Comments (0)
Found in Budgeting, Post-college, 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,