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Difference Between Subsidized and Unsubsidized Federal Loans

The following article states the difference between subsidized and unsubsidized Federal loans. These loans which are primarily, student loans, are lent as financial aid by the government. To know more about the differences in subsidized loans and ones which are not subsidized, read on…

The difference between subsidized and unsubsidized loans is same as the difference between subsidized and unsubsidized federal loans. The following paragraphs provide some insights into the subsidized and unsubsidized Federal loans along with a brief explanation on 'subsidized loan vs unsubsidized loan'. To be honest, the difference is not much, the interest rate is all that differs.

Federal Loans and Subsidy in the United States

The concept of Federal loans basically, implies the loans that are given to people as financial aid. The most common loan that is given by the Federal government is a student loan. These loans are given so that students, can fulfill their academic ambitions, without having to face the hurdle of sky high cost of eduction. The Federal student loans are arranged for through U.S. Department of Education and almost all students become eligible for these loans. There are two channels through which the federal loans for students are disbursed to the students, namely, they are given to students directly or they are given to parents. Stafford, Perkins, and Direct student loans are given to students who are financially challenged, and also any other student irrespective of their financial condition. The amount that is disbursed depends upon the year that the students are attending and their financial conditions. Now the repayment schedule and the interest for subsidized and unsubsidized loans differ from one another. Subsidized student loans are usually given to the students who are not able to afford the educational costs.

It must be noted that other loans, that is the ones that are not student loans can also be subsidized and unsubsidized loans. Here's the difference in the two…

What is the Difference Between Subsidized and Unsubsidized Federal Loans?

As mentioned above the difference is found in the repayment schedule and the interest payment rates and procedures. Here's the basic definitions:

Subsidized Loan: Any subsidized loan that is provided by the federal government, indicates that the government would bear the cost of the interest rate for a certain time period. This process is known as subsidizing the interest rates. The basic rule for all federal loans (especially for students) is that the government undertakes the cost of the interest till the student passes out of the educational system. Following this, a small grace period is provided, after which the student is supposed to pay off the installments plus the interest on installments and the interest that had been subsidized by the government. The process of repaying after the course work is finished, is often referred to as deferment of the loan.
Unsubsidized Loans: Unsubsidized loans of course do not have the provision where the interest is taken by the government. Here the interest payment starts as soon as the loan is sanctioned or as soon as the prescribed time period starts off. Installations start after the student graduates. Most of private loans are unsubsidized. There are some federal loans such as PLUS, Stafford and Perkins, which are also given out as unsubsidized loans.

The amount of the loan that is lent out by the government also depends upon the application of the subsidiary. For example, freshmen who qualify for the subsidized loan get $3,500 annually where as dependent freshmen, get $2,000, where as independent independent freshmen get $6,000. Eligibility and disbursement is bound to differ from loan to loan. However almost every student is eligible for some or the other financial aid. To know more about subsidized vs unsubsidized loans, you may refer to difference between subsidized and unsubsidized loans.

The best way to manage both subsidized and unsubsidized federal loans is to accumulate and save the amount as soon as the interest accrues. In case of unsubsidized loans, pay off the same as soon as the amount accrues or becomes payable. I hope that the difference between subsidized and unsubsidized federal loans is resourceful. Good luck.

By Scholasticus K
Published: 1/14/2011
Source by : http://www.buzzle.com/articles/difference-between-subsidized-and-unsubsidized-federal-loans.html

APR vs Interest Rate

Whenever I wished to compare loan quotes, I was always baffled by the confusing financial jargon, like APR, interest rate, points, closing costs, etc. For all those that go through the same trauma while loan hunting, I have an article explaining 'annual percentage rate vs interest rates'. Here's a low down on Annual Percentage Rate or APR vs interest rates...

Till I started my full fledged finance studies, I always thought that Annual Percentage Rates (APR) and interest rates were one and the same thing, just results of different calculation methods. Now I know that such is not the case. So here I am, trying to relieve you of all your similar doubts about APR and interest rates, through this 'APR vs interest rate' article. This APR vs mortgage interest rate article should help you in understanding the APR and interest rate difference as well as the annual percentage rate formula. Read more on loan calculators.

Simple Mortgage Interest Rates
Interest rate is a simple percentage figure that stands as the basic borrowing cost on the principal borrowed. The interest amount is a direct percentage of the actual amount of borrowed funds. In other words, interest rate is the rent compensation paid by the borrower to the lender to compensate for his opportunity cost of lending you that money, as opposed to investing it elsewhere. Interest rates are usually the ones taken into account when making initial comparisons between various loans, as they directly affect the monthly payments of the borrower, something that most debtors are most concerned with.

Though low interest rates are the first thing that people look for when hunting for good deals on loans, interest rates are usually not the only monthly expense that goes towards the loans. As there is usually a trade-off between interest rates and other upfront costs of acquiring the loan, i.e. lower the interest rates, higher the associated costs and vice versa, just hunting for a low interest rate deal is not always the most beneficial option. This is where the APR comes into the picture.

Annual Percentage Rate (APR)
The best way to explain an APR to a layman, is to say that it represents the 'true cost of his loan'. The basic difference between APR and interest rate happens to be just this - while the interest rate is just the intrinsic borrowing cost, calculated as a percentage of the loan amount, the APR includes the other associated loan expenses that usually cannot be seen from the actual interest rate figures. In simple terms, APR is nothing but another representation of the effective rate of interest that the borrower will be burdened with, and so, the APR is always higher than the normal interest rate.

Theoretically, all fees required to finance the loan are incorporated into the calculation of APR, but as different lenders incorporate different fees and leave out different ones, not all lenders with similar loan terms and conditions reach to the same APR. Either way, whatever the expenses to be taken into account, the APR calculation requires that all such amounts be totaled and amortized over the entire loan period. The new rate calculated after included all such additional payments into the interest rate calculation is what is known as an APR. Know more on amortization.

While the APR covers all the drawbacks of the normal mortgage interest rates, APR in itself also has a few limitations of its own. For one thing, as already mentioned earlier, as there are now clearly cut out rules as to which expenses to include and which to leave out in the APR calculation, most lenders choose the expenses to suit their ends. Expenses usually not considered in the APR formula are home appraisal expenses (home loans), title fees, and credit reporting fees. It is always better to ask your lender for a disclosure of expenses included and excluded in the calculation. Secondly, APR does not work well for adjustable rate loans as all calculations are usually based on future interest rate forecasts which may not be so accurate.

Last but not the least, before you go out and grab a loan at a lower APR, consider this. Since APR amortizes all associated expenses as well as the original interest payments over the entire life of the loan, the only way such a deal is profitable is when the loan is actually held all the way to maturity. For example, if you have a plan in mind to settle a loan of 10 years in 5 years itself, looking for a low interest rate (despite a little higher APR) may be viable in your case. If you plan to refinance or retire your loan early, higher up front cost may actually turn out to be a bad deal for you, as these will unnecessarily be amortized over the entire loan period. Know more on mortgage refinance.

APR vs Interest Rate
Here are a few APR vs interest rate facts:

'Truth in Lending Act', a federal law requires that both, the APR and the interest rates, be simultaneously disclosed to the borrowers, to protect them in credit transactions through a full and fair disclosure.
In financial terminology, while the interest rate is just the 'pure cost of money', APR includes all additional costs that make it the 'true cost of money'.
While traditional interest rates exclude transaction costs and other fees in their calculations, the APR includes most of them. This makes APR a better indicator of how much the borrower is actually ending up paying to the lender, in compensation for his loan.
Because of the inclusion of additional costs, the APR is always higher than the nominal mortgage interest rates.
Loan comparisons using APR are more accurate than comparisons made on interest rates, for a low interest rate loan usually has higher other associated costs and vice versa.
Judging a book (loan) only by its cover (APR) is also not a prudent strategy, as an APR analysis does not reveal things like balloon payments, prepayment penalties and rate lock-in periods.

Anyways, this was all the information I had on the topic of 'APR vs interest rate. Hope it helps you make wise loan decisions. Remember, always be prudent when raising large amounts of debt. Be prudent and remember my 'APR vs interest rate' article, every time you go loan hunting.

By Sayali Bedekar Patil

source by : http://www.buzzle.com/articles/apr-vs-interest-rate.html

Jim Carrey to Emma Stone: I Love You!

Jim Carrey wishes he were a much younger man. That way, he could have passionate sex with Emma Stone and produce "chubby little freckle-faced kids."

So the actor himself says in a new video, which is making its way around the Internet and creating a bit of a controversy. Not because Carrey is misguided in his affection for Stone - seriously, have you seen Crazy, Stupid Love or The Help?!? - but because Carrey is 49 and the object of his desire is 22.

A rep for the star says the video is "intended to be comical," and we certainly laughed. But watch for yourself and then vote below.

Jim Carrey Hearts Emma Stone

Radio is an important tool for hurricane preparedness

I was listening to NPR this morning as I got ready for work and during the headlines at the top of the hour heard a short story about communities preparing for Hurricane Irene. It featured a quick actuality from a sheriff in South Carolina saying that a battery operated radio will be a vital tool to stay informed when Irene’s force hits. To me that advice sounds obvious, and not just because I’m such a radio enthusiast. Growing up on the East Coast it seems like I always heard about having a radio and plenty of batteries on hand whenever a severe storm threatened. As well, when I moved to the Midwest in the 1990s having a portable radio with fresh batteries on hand was advised to be ready for a tornado.

However, now that we rely so heavily on cell phones and other networked devices it’s easy to forget that they’re much more susceptible to failure during power outages brought on by natural disasters. Even if your mobile phone still has battery life, the closest cell tower might not. No power in the house probably means no power for your cable modem or wireless router, either. Of course, radio transmitters also require power, but many broadcasters maintain backup generators so that they can remain on air during blackouts and emergencies.

Hurricane Irene on Aug. 24

Unlike other natural disasters, a hurricane can be predicted days before it hits, giving responsible broadcasters an opportunity to prepare. The radio industry site All Access talked to several stations along the coast about their plans. One station group in Norfolk Beach, VA said it is sure to have accommodations for staff and their families so they can remain working on-air. Another station in South Carolina said that it’s prepared to “all hands on deck 24/7,” along with airing simulcasts from an affiliated TV station. Going “24/7″ is now exceptional for the majority of commercial stations, since most are automated at least part of the day, especially overnights.

Even if not every radio station is able to remain on air during a severe storm, the odds are high that at least one will keep broadcasting. Very powerful stations further inland with broadcast ranges of 100 miles or more can provide vital emergency info to coastal areas that are harder hit.

Luckily a perfectly capable portable AM/FM radio that runs on inexpensive AA batteries can still be had for under $20 at discount and department stores, as well as major drug store chains. It’s an even better idea to buy one of the emergency radios that can be powered by a crank or solar energy. Then you can stay reliably tuned in even if you run out of batteries.

Outside the broadcast band, for nearly a century amateur radio operators have provided vital assistance to communities and civil authorities during disasters. A Wall Street Journal story notes that, “Maine has squads of amateur-radio clubs statewide ready to provide back-up communication if cell towers topple.”

Since 1965 the Hurricane Watch Net has organized radio amateurs to operate and provide communication lines during every hurricane that threatens land in the Atlantic, Caribbean and Gulf of Mexico. Participating HWN operators transmit and relay information on 14.325 MHz, asking other operators not to use that frequency when an alert is activated. In particular HWN provides important weather info, like local wind speed, to the National Hurricane Center, which monitors that frequency.

Fundamentally, radio is a comparatively inexpensive, robust and proven communications technology. Having internet and digital mobile communications will undoubtedly provide great assistance to first responders and average people during this hurricane. But when the power is out for more than a few hours that radio will provide important communication and solace. When wired lines are cut by falling trees, wireless radio communications will still transmit through the air. I’m certainly glad that radio is still a viable, living technology.

Source from : http://www.radiosurvivor.com/2011/08/24/radio-is-an-important-tool-for-hurricane-preparedness/

Rare earthquake shakes New York, sending residents scrambling

A 5.8 earthquake centered in Virginia jolted much of the East Coast Tuesday, giving New York City its biggest shaking in decades as surprised office workers scrambled down to the streets from swaying towers and countless residents marveled at what they’d just experienced.

The quake, whose epicenter was just outside of Richmond, Va., was one of the most powerful ever recorded on the East Coast. It rocked Gotham at 1:51 p.m. and lasted for about 30 seconds. That was long enough to temporarily shutter the city's airports and delay flights along the East Coast, prompt crack inspections of the Holland Tunnel, snarl cell-phone service — and put the lie to the idea that big quakes are the sole province of the West Coast.

Photo credit: People stand in a square outside the NY courthouse after evacuating.(NICHOLAS KAMM/AFP/Getty Image)

"It was crazy, the first thought I had was that the building was crumbling down," said Frank Schulterbrand, 62, who was inside a building on 34th Street during the afternoon temblor. Indeed, office floors swayed, overhead lamps swooned, and New Yorkers wondered what to do.

"I looked at the blinds and they were moving, and I said to myself, 'It was time to get out of there,' " Schulterbrand added.

Rattled East Coasters rushed to file dispatches on Twitter, with Tweets hitting 5,500 per second, more than after the death of Osama bin Laden and similar to the Japan quake and tsunami.

City Hall was evacuated, as were buildings across the city, but no injuries or deaths were reported, officials said. The MTA said there were no service disruptions, and FDNY said that aside from a water tower in Red Hook, it didn't get reports of other damage in the city.

Buildings in the nation's capital were also evacuated, including the White House and the Pentagon, and spires at the National Cathedral were damaged. Some injuries were also reported in D.C.

Two nuclear plants in Virginia shut down automatically as a precaution, as they would during any earthquake. Up in Martha’s Vineyard, the vacationing President Barack Obama was playing golf when the quake happened, though reported he didn’t feel it.

Mayor Michael Bloomberg was at work in City Hall when he felt the quake that, among other things, brought an abrupt end to District Attorney Cy Vance’s news conference about Dominique Strauss-Kahn.

"For many people this was a stressful afternoon, but so far we've been lucky to avoid any major harm," Mayor Michael Bloomberg said.

(with Marc Beja, Erik Ortiz and Reuters)

SOURCE

Hoping to Contact Extraterrestrials? Think Again!

Astronomers who have been searching for extraterrestrial intelligence for decades are suddenly saying such an encounter might not be a happy one.

Aliens might destroy life on Earth or plan to eat or enslave humans if they sense our civilization was expanding too rapidly and could harm others, according to a latest study.

The scenario was brought up in a joint study by Seth Baum, Jacob Haqq-Misra and Shawn Domagal-Goldman.

(Photo: Cheryl Ravelo / REUTERS)
O Alien, Where Art Thou?

Researchers say extraterrestrials might behave the way we humans have behaved whenever we have discovered other previously unknown intelligent beings on Earth, like unfamiliar humans or chimpanzees and gorillas.

"Just as we did to those beings, the extraterrestrials might proceed to kill, infect, dissect, conquer, displace or enslave us, stuff us as specimens for their museums or pickle our skulls and use us for medical research," according to the study, which was published in the journal Acta Astronautica.

Why should we worry about aliens? The simple reason is that if they can find us, they would be more advanced than humans.

"A core concern is that ETI will learn of our presence and quickly travel to Earth to eat or enslave us," the study says.

The authors speculate that extraterrestrials might try to spread their beliefs through evangelism or to use humans for entertainment.

Just because an ETI civilization holds universalist ethics does not mean that it would never seek our harm. This is because ETI may be quite different from us and could conclude that harming us would help maximize whatever they value intrinsically.

For example, if ETI place intrinsic value on lives, then perhaps they could bring about more lives by destroying us and using our resources more efficiently for other lives. Other forms of intrinsic value may cause a universalist ETI to seek our harm or destruction as long as more value is produced without us than with us.

Aliens also could harm or destroy us if they believe we are a threat to other civilizations. Rapidly expanding civilizations may have a tendency to destroy other civilizations in the process, just as humanity has already destroyed many species on Earth.

Though this scenario might seem unlikely given the likelihood of our technological inferiority relative to other civilizations, we would be at the receiving end if ET thinks that our resources could be used more efficiently to generate or retain other civilizations.

Perhaps ETI is observing rapid and destructive expansion on Earth and could become concerned at our trajectory.

ETI might prefer that our civilization change its ways to survive, but if it doubts that our course can be changed, it may seek to preemptively destroy us to protect other civilizations from us.

A preemptive strike would be particularly likely in the early phases of our expansion because a civilization may become increasingly difficult to destroy as it continues to expand.

"Humanity may just now be entering the period in which its rapid civilizational expansion could be detected by an ETI because our expansion is changing the composition of Earth's atmosphere (e.g. via greenhouse gas emissions), which therefore changes the spectral signature of Earth," the study's authors say,

Human civilization affects ecosystems so strongly that some ecologists have begun calling this epoch of Earth's history the anthropocene, a new and unprecedented phase in the planet's history.

If the goal is to maximize ecosystem health, then perhaps it would be better if humanity did not exist, or at least if it existed in significantly reduced form. Since at least some humans believe so, invoking universalist ethical principles, then it is likely that ETI might agree.

But since we don't know what kind of aliens we will end up meeting, there are certain steps humans should take when making contact, the authors urge. Those steps include not sharing details of our biology and DNA structure, and not appearing as if we are rapidly expanding off the Earth.

SOURCE