What To Know Before Cosigning a Student Loan

HomeFinanceFinancial aidWhat to Know Before Cosigning a Student LoanThis page may contain affiliate links.Nov 8, 2019Thinking of cosigning a student loan for your child or spouse? Before signing on the dotted line and saying â€Å"yes, there are some important things to consider first. What Is a Cosigner? A cosigner is someone who agrees to sign for another borrowers loan. That borrower may be your child or spouse, and as a cosigner you’re legally responsible for repaying the debt if payments are not made. Cosigners typically have good credit and can score the primary borrower a better interest rate. Although that’s great for the primary borrower, make sure it’s the right situation for you. Federal vs. Private Student Loans In many cases, federal student loans don’t require a cosigner. However, there are some exceptions. One instance is if the primary borrower is applying for Direct Parent PLUS loans and has not-so-great credit. In that case, an â€Å"endorser† — basically a cosigner — can endorse the loan and agree to pay it back in case of non-repayment. Private student loans, on the other hand, often require a cosigner. In fact, the most recent data shows that 90 percent of private loans have cosigners. Since many young adults have no or limited credit history, having a cosigner can help the primary borrower get approved for a private loan and potentially get approved for a better interest rate. Additionally, refinancing student loans may require a cosigner — or at least help the borrower get a lower rate and save money on interest. But cosigning a refinancing loan can be a bad idea. Since the primary borrower is not eligible on their own (not good) and even then, if they only score a 1% to 2% interest rate reduction, it’s likely not worth the risk for the borrower or cosigner. Refinancing federal loans means that borrowers are giving up federal protections. And as a cosigner, the minimal interest savings might not be worth being on the hook for the entire loan if the borrower fails to make payments. Cosigning a Student Loan: Pros and Cons If you’re going to be legally on the hook for a student loan balance, carefully look at the pros and cons of cosigning first. Pros: Helping the primary borrower get approved for student loans Helping the primary borrower secure a lower interest rate Cons: Legally responsible for the debt if the primary borrower stops making payments Late payments also end up hurting your credit In many ways, being a cosigner is an act of generosity toward the primary borrower. Whether you want to help out your child or your spouse, the main benefits of cosigning goes to them and you’re stuck with most of the risk. This financial risk can strain the best of relationships — even between a parent and child, and among spouses. When It Makes Sense to Cosign a Student Loan If your child or spouse is applying for private student loans with a high interest rate of 8% or higher and they have a good payment record, being a cosigner can be a good idea. If you have great credit, acting as a cosigner can help them lower their interest rate, which lowers overall costs of the loan. In an ideal world, you’re simply using your good credit to score a better rate and boost approval odds and that’s it. The reality is that life happens, and you and the primary borrower can’t anticipate a job loss or costly expense that might impact loan payments in the future. If a worst case scenario comes up, you should feel entirely comfortable with the idea of essentially â€Å"gifting† the loan amount to the primary borrower, if it comes to that. When Cosigning Student Loans Gets Complicated When you are a loan cosigner, you might just think that you’re using your credit to help your child or spouse get a loan. But there are situations that can complicate the matter. For example, if you cosign a spouse’s student loan and get divorced, you’ll still be on the hook, even after you part ways. Your name will still be on the loan and if your ex misses a payment, your credit could take a hit. It can get messy. If the primary borrower unexpectedly dies and you cosigned a federal student loan, the good news is there will be a death discharge. But if you cosigned a private student loan and the primary borrower dies, it may be a different story. You may be on the hook for a private student loan that you cosigned, even after the primary borrower passes away. This varies by lender so you will want to check for a death discharge option from the lender. [Check our comparison of private student lender features to see which lenders have a death discharge option and which do not.] One way to protect yourself is by getting a life insurance policy on the primary borrower for the sum of the student loans, and in the case of death, you’ll have life insurance to cover the loans. Also, at some point, you will want to see if the primary borrower qualifies for cosigner release. Each lender has various requirements, but typically the primary borrower needs to demonstrate ability to pay and have good credit to be approved for cosigner release. Cosigner release relieves the cosigner from the loan so they’re no longer responsible Use Caution As a Cosigner If after calculating different repayment options, you find that cosigning on a student loan makes sense despite the risks, use caution and read the fine print so you know what you’re getting into. Make sure the savings are worth years of financial responsibility on your end.

A Project Management Assignment Focusing On The Project Scheduling - 2750 Words

A Project Management Assignment Focusing On The Project Scheduling (Coursework Sample) Content: INSTITUTION: TOPIC: ASSIGNMENT 1-50% STUDENT NAME: STUDENT ID NO: DATE: Assignment Outline This assignment is based on a project case study to be undertaken by Air Control Company. It explore the construction, and use of network diagram in project scheduling. Firstly, this assignment involved constructing the network diagram based on the precedence table given. Secondly, from the constructed diagram different project times are determined namely; earliest start (ES), earliest finish (EF), latest start (LS) and latest finish (LF). Thirdly, the slack/float for each of the activities is determined and then the total project effort and duration is calculated. Fourthly, the critical path in the network diagram is computed and effect of delaying this path on project timeline explored. Fifthly, significance of having a network diagram in a project is illustrated. Sixthly, a number of ways of reducing project duration are enumerated and explained. Lastly, different ways of projects acceleration when resources are constrained and when resources are not constrained are critically discussed. SOLUTION 1 Using the precedence table provided a network diagram is constructed as shown. His network diagram is drawn based on critical path method(CPM) CITATION Cha17 \l 1089 (Rayadurg, 2017). B (15) 17862551079500 23958558699500 9189573241300 C (10) 29959301460500024911054127500 1021513666750050038018071700A (2) 340550515811500 F (15) G (10) 1069340148590004691380698500 39674807493000 898748196290029688194949500507238016192500 D (13) 24149059080500 483425515684500 E (18) H (5) 2367280889000 2948724107240051631855016500 498348014478000 I (0) Note that I have introduced the activity I in the network diagram, which has a duration of zero to symbol end of the project. 1 Earliest Start (ES) – 5 marks Let ESi be the earliest start the project will commence for any activity i when all that activities before it have been completed. The values of the earliest start ESi (i=A, B,†¦,I) are determined by moving forward, from left to right, in the network diagram CITATION Ale17 \l 1089 (Puscasu, 2017) CITATION JEB16 \l 1089 (Beasley, 2016). Also let Ti be the time it takes to complete any activity i ( e.g. TB ). Also assume the start time of the project is zero days.Then the ESi are calculated as: ESA=0 ESB= ESA+ TA=0+2=2 ESC= ESA+ TA=0+2=2 ESD= ESA+ TA=0+2=2 ESE= ESA+ TA=0+2=2 ESF=max[ESC+ TC, ESD+ TD =max2+10,2+13=15 ESG=max[ESB+ TB, ESF+ TF =max2+15, 15+15=30 ESH=max[ESG+ TG, ESE+ TE =max30+10,2+18=40 ESI= ESH+ TH=40+5=45 2 Earliest Finish (EF) Note that the earliest finish time is calculated from the earliest start time of a particular activity. It is given by: EFi= ESi+ Ti i.e. the activity duration in each of network path are added to the early start( ES+ Duration= EF) EFA=0+2=2 EFB= ESB+ TB=2+15=17 EFC= ESC+ TC=2+10=12 EFD= ESD+ TD=2+13=15 EFE= ESE+ TE=2+18=20 EFF= ESF+ TF=15+15=30 EFG= ESG+ TG=30+10=40 EFH= ESH+ TH=40+5=45 EFI= ESI+ TI=45+0=45 3 Latest Start (LS) Let LSi be the earliest start the project will commence for activity i such that all its preceding activities have been finished. We calculate the values of the LSi (i=A, B,†¦,I) by going backward, from right to left, in the network diagram CITATION JEB16 \l 1089 (Beasley, 2016). The earliest start time is therefore given by LS of previous activity – Duration of activity. LSI=45 LSH=LSI-TH=45-5=40 LSG=LSH-TG=40-10=30 LSF=LSH-TF=40-15=25 LSE=LSH-TE=40-18=22 LSD=LSF-TD=25-13=12 LSC=LSF-TC=25-10=15 LSB=LSG-TB=30-15=15 LSA=min⠁ ¡[ LSB-TA,LSC-TA,LSD-TA,LSE-TA] LSA=min15-2,15-2,12-2,22-2=10 4 Latest Finish (LF) The latest finish(LF) is taken as the latest start(LS) of the prior activity to the current activity in the network diagram. Therefore, using the latest starts obtained in part c the latest start for he activities are as indicated below: LFI=45 LFH=LSI=45 LFG=LSH=30 LFF=LSH=30 LFE=LSF=25 LFD=LSE=22 LFC=LSD=12 LFB=LSG=15 LFA=LSB=15 5 Slack/Float on each activity From a and c we know the earliest start time and latest start time therefore we can determine slack or float time for any activity given by Fi=LSi-ESi . Where float is the time a particular task or activity can be delayed without a resultant on the successive activities connected to it. Therefore, float will show the increase that can be made on the duration of any particular activity without any change in the project completion time. From formula of float time the table below is formulated. As a check all float values should be = 0. Activity Latest start time(LSi) Earliest Start time(ESi) Float Fi=LSi-ESi A 10 0 10 B 15 2 13 C 15 2 13 D 12 2 10 E 22 2 20 F 25 15 10 G 30 30 0 H 40 40 O 6 Total effort and duration of the project -5marks The total project duration may be obtained by determining the path with the longest duration, this will give us the shortest possible time the project will take. Determining, the length of each path as: Path A,B,G,H=2+15+10+5=32 Path A,C,F,G,H=2+10+15+10+5=42 Path A,D,F,G,H=2+13+15+10+5=45 Path A,D,H=2+18+5=25 The total duration= 45 days Total Effort Total Effort = Number of work hours or man-hours Assuming the maximum work hour per day is 8 hours. Therefore, Total effort = Duration* workhours= 45Ãâ€"8=360 work hours 7 Compute critical path and discuss impacts of activities on critical path being delayed The critical path refers to the network path(s) that has(have) the least slack/float From the float table in e the critical path is A, D, F, G, H. Also by using the network diagram, the critical path can be computed by determining the longest path. By tabulation: Path A,B,G,H=2+15+10+5=32 Path A,C,F,G,H=2+10+15+10+5=42 Path A,D,F,G,H=2+13+15+10+5=45 Path A,D,H=2+18+5=25 From the tabulation above the critical patch is Path A, D, F, G, H. This is because it has the longest duration. Delaying any activity on the critical path lead to the project being delayed hence deadline not met. This is because the activities on the critical path has no float or slack and it has the longest duration in the project hence cannot be delayed. The delay of any activity on the critical however can be compensated for by using different duration reduction techniques such as fast-tracking, crashing and compression of schedule tools. 8 Provide a brief interpretation of the network diagram explaining what does it indicate, what significance does it have on the entire project etc. The network diagram makes it easy to visualize the important tasks of the project. The network diagram provides a visual indicator of the overall project separated in predecessor and successors which are vital for the completion of the particular project. The network diagram helps to determine the critical path which has the activities that cannot be delayed. It also helps in determining the free float and total float in a project. Therefore, the network diagram helps us to ensure all the project is completed within stipulated timeline. There network diagram is significant as it enables the project managers and team to know which activity may lag behind, are they on the right track, if not how best can they adjust the schedule to maintain the project duration. Therefore, the network diagram is important in meeting the entire project timeline. 1 Normally, when projects are finished on the agreed project deadline, all stakeholders are generally very happy. However, in certain situations, it is required to shorten the project duration, and that means the deadline has to be preponed. Assuming you are managing such a project, critically discuss the different ways of reducing the project duration. [750 words] (30 marks) Reducing Duration of Project There are different ways of reducing project duration as numerated and discussed below; * Establishing the project scope prior to project commencement time CITATION Ala14 \l 1089 (Zucker, 2014) This is important because it minimises the non-productive time during project commencement time. It is usually done before the project team is assembled. This ensure when the team is assembled to commence on the project productive is guaranteed from first day. This also ensure some project requirements start prior to the first day of the project starting. * Elimination of False Dependencies CITATION Ala14 \l 1089 (Zucker, 2014) For any project activity there must be a predecessor and successor which create dependencies during the project. This is because the first task must be completed before the commencement of the second activity. In the actual project implementation, much of the activity is carried out in parallel with others. They are usually expressed as finish to finish or lagged finish-to-start tasks CITATION Ala14 \l 1089 (Zucker, 2014) For instance, assuming I have involved in software projects, dependencies are usually experienced between the phases of the project. Requirement approvals are done before starting the design, design has to be finished before initiating coding activity etc. Therefore, if the dependencies documentation is properly done reflecting the actual activities overlap, the project duration can be reduced without negative impact on project execution. * Shave Days Managing long projects involve cheating Parkinson’s law by shaving days from the longer tasks/phases CITATION Ala14 \l 1089 (Zucker, 2014). Therefore, project duration can be reduced by asking each of the project team to determine ways or options available for reducing the duration of their long project phases and tasks. This will help to reduce the project duration wi...