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EAT FASTER!!!!!! posted:I mean federal loans have forebearance but they won't forgive the tragedy. If you marry someone with federal student loan debt and they die, that debt haunts you. As a general FYI for the thread, federal loans have three total forgiveness programs that are not related to income (that I'm aware of): 1. Death - of the student for Stafford/Perkins and GradPLUS, of either the student or parent for PLUS 2. Total and permanent disability - of the student for Stafford/Perkins and GradPLUS, of either the student or parent for PLUS. This can be a bitch to authorize but it happens, and can even happen multiple times for a single person in the event of a recurring illness (Cancer was the one I saw) 3. School closure - of the student for Stafford/Perkins and GradPLUS, of either the student or parent for PLUS These are built-in protections. Forgiveness due to death only requires a death certificate be sent to the servicer. Total and permanent disability requires medical paperwork from a doctor, which is where the tricky comes in. I never processed a school closure but I imagine paperwork to verify the closure is involved.
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Dec 1, 2016 12:58
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Double posting from a phone, apologies, but here's the list from the DOE: https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation These are not the only protections I'm thinking of when I recommend against refinancing federal into private (forbearance AND deferment availability, for instance). But this came up often enough that I find them worth mentioning. When parents asked us about federal versus private (why should I get this PLUS loan over this private that says I get a fixed/low APR?), the forgiveness programs were always one of the top incentives. On a funny(?) note, we regularly had elderly parents or adoptive grandparents make cracks about how they'd be dead soon anyway when applying for their PLUS loans. I guess that's one way to beat the system!
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Dec 1, 2016 13:09
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Wiggy Marie posted:As a general FYI for the thread, federal loans have three total forgiveness programs that are not related to income (that I'm aware of): Thanks for this reminder. I actually read this a couple of times last night after having made my assinine post. I don't know where I'd gotten that notion, but these protections are worth the consideration.
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Dec 1, 2016 13:49
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Do private lenders offer repayment plans like the level, extended level, graduated, etc. plans Fed loans do? I had looked into refinancing but the 1-2 percentage points I'd save wasn't worth giving up the flexibility of the extended repayment plan and making additional payments as I'm able.
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Dec 1, 2016 14:24
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A great article about how enormous of a hit student loan forgiveness is going to end up being to the Federal Government. http://qz.com/849584/obamas-policies-mean-that-the-us-will-forgive-108-billion-in-student-debt-wildly-more-than-anyone-thought/ Thanks, Obama! I am actually thankful because I'm one of those high-earners "abusing" the system to get my loans forgiven, but it's not really abuse if it was in the contract I signed
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Dec 1, 2016 14:29
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EAT FASTER!!!!!! posted:Thanks for this reminder. I actually read this a couple of times last night after having made my assinine post. I don't know where I'd gotten that notion, but these protections are worth the consideration. No worries! I should probably add more explicit language to the OP about this since this is a really common question. I would love to do a pro vs con post about refinancing federal into private with someone else's help, particularly someone who is pro-refinance as this is not and never will be me. Besides a fixed lower rate, what are the benefits to this? For me, that one benefit doesn't overcome the built-in federal loan benefits. Such as repayment plan flexibility. Which brings me to... HisMajestyBOB posted:Do private lenders offer repayment plans like the level, extended level, graduated, etc. plans Fed loans do? I had looked into refinancing but the 1-2 percentage points I'd save wasn't worth giving up the flexibility of the extended repayment plan and making additional payments as I'm able. This is very specific to each private loan. Think of private student loans like credit cards: different rates, rules, rebates, payment options, plans...it's all variable. Read deeply into any terms you're given. Also, if you refinance for a fixed low rate, check on the terms of that fixed rate. A lot of the ones I saw would remove the fixed rate based on a late payment. Just like credit cards! EAT FASTER!!!!!! posted:A great article about how enormous of a hit student loan forgiveness is going to end up being to the Federal Government. Thanks for the share, I'll check it out! I wouldn't feel guilty. You're not cheating the system if you're using a built-in benefit, even an added benefit. I'm doing the same. These programs are designed for use so I intend to use them to my fullest advantage.
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Dec 1, 2016 14:56
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potatoducks posted:Maybe. Maybe not. Who knows. This is normally the good sober long term adult BFC advice you want to see and type day to day but right now we're in a historically unique moment, rates are skyrocketing and while it's never a sure thing I can tell you with a high degree of confidence that rates will be substantially higher in the coming months and years then they are right now. That's just reality, doesn't matter how much you zoom out your time scale it's still going to happen. Everyone who wants to and is capable of refinancing should be making those phone calls to get the ball rolling today.
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Dec 1, 2016 15:40
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Pryor on Fire posted:This is normally the good sober long term adult BFC advice you want to see and type day to day but right now we're in a historically unique moment, rates are skyrocketing and while it's never a sure thing I can tell you with a high degree of confidence that rates will be substantially higher in the coming months and years then they are right now. That's just reality, doesn't matter how much you zoom out your time scale it's still going to happen. Sure, interest rates are going to go up in the long run because they can't really go down any more. However, I think you have one thing mistaken. We're not zooming out our time scale. We're zooming in. Everyone also said that interest rates had to go up when I refinanced. And they have. But not by very much, and I still saved a bunch of money. By the time they go up substantially, I'll have paid everything off. When I refinanced, I think I got approximately a 1.5% better rate going with variable versus fixed. So not only do the rates have to go up, but they have to so quickly enough and significantly enough to make fixed a better deal. The key here is that this person has a high income and can rapidly pay down the loan if necessary. If they stay low over 10 years, fine, let it ride. Put more into retirement instead. If they increase rapidly just pay it off.
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Dec 1, 2016 20:02
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Another item I should mention is that federal loans disbursed after July 1st 2006 already have fixed interest rates. https://studentaid.ed.gov/sa/types/loans/interest-rates Congress initially started a stepwise interest rate that increased Stafford rates a bit each July 1st, but each rate itself is fixed. Disbursed loans are no longer annually variable, what varies is the rate on new loans every July 1st. Older loans will still vary on July 1st but there is a maximum cap which I currently don't remember. It wasn't horrific though, certainly not when compared to how high private loans can go.
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Dec 1, 2016 23:12
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Wiggy Marie posted:No worries! I should probably add more explicit language to the OP about this since this is a really common question. I would love to do a pro vs con post about refinancing federal into private with someone else's help, particularly someone who is pro-refinance as this is not and never will be me. Besides a fixed lower rate, what are the benefits to this? For me, that one benefit doesn't overcome the built-in federal loan benefits. Such as repayment plan flexibility. Which brings me to... To be honest, I'm having some trouble understanding why you are so against refinancing. A lot of the benefits that you mention are replicated by SoFi (which is what I use and the only company I'm really familiar with). They discharge in cases of death and total disability, defer for grad school, and forbear for job loss. It may or may not be the case that deferment and forbearance are more difficult to get with a private lender. But death is pretty cut and dry and total disability is a bitch to prove no matter who your loans belong to. School closing is so unlikely that you don't even need to think about it, assuming that you didn't go to a lovely degree mill. I think you are greatly underestimating the effects of a lower interest rate. For a 100k loan over 10 years, a 7% rate ends up being 139k while a 4.5% is 124k. That's a 15k (12%) difference which I think is pretty significant. Is there a 12% chance that not only do you need some sort of loan protection, but also that it's something the federal government would give to you that SoFi would not? For many people, the answer is no. The only people I would unequivocally recommend against refinancing are those who are reasonably sure that they are not going to pay back the full amount of their loan. This includes those pursuing PSLF, who have progressive debilitating medical conditions, and whose debt is so high and earning potential so low that they're never going to get out of IBR. For everyone else, whether to refinance or not is a complex decision involving many personal factors. To unequivocally recommend against it though, I think is a disservice. Edit: From what I remember, the main reason to choose government loans over private when taking them out was because private loans had much higher interest rates. This is a totally different situation from SoFi because they are offering lower rates. potatoducks fucked around with this message at 23:18 on Dec 1, 2016 |
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Dec 1, 2016 23:14
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Would you consider SoFi the rule or the exception? I never saw a private loan program outside of some state-run ones that mimicked so closely, and those aren't universally available to all borrowers. But I have also been out of the industry for over 5 years, so regulations regarding private student loans may have changed. I would love your help with a good post about perks - if you want to write something up I can add it to the OP. I've had more time lately so I'm better able to pay attention to the thread. I have still been out of the industry though, so others who are still in please help! On a personal note, the reason I'm so against them is because I had to call people who couldn't pay and have lots of really horrific conversations where people on TANF/WIC/had been in a car accident/etc. were pleading with me to do anything at all to help them, and I had to say well if you have $50 I can stop your $70 payment for one month... One example I tend to remember most clearly was a cosigner father who just broke down because his son couldn't pay because he was in a coma in the hospital and he couldn't pay either and both of their credit was ruined with a default on the way. Nothing I could do. I had started in the federal loan servicing side, where there is almost always SOMETHING you can do. It was awful and I felt like scum. I completely understand that private loans are a necessity for a lot of students, but if there's a choice I will never recommend them over federal loans. Too much bad blood for me. But I also try not to argue with those who do recommend them, and just say I wouldn't for X reasons. Hopefully I haven't made you or others feel as though your opposite opinions aren't acceptable!
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Dec 1, 2016 23:34
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I think there's some misunderstanding going on here. Taking out private loans in order to go to school is totally different from refinancing with a private company. SoFi doesn't lend money to dumb college freshmen with undecided majors who may or may not flunk out after 2 semesters. They take people who have already graduated with proof of income. They are selective in who they take and make money though very low default rates. For example, physicians are big business for them because they have very high loans but are also very unlikely to default. This is a fair article from them on some of the basic issues including the downsides of refinancing government loans. They're not trying to trick anyone here. https://www.sofi.com/blog/before-you-refinance-federal-student-loans-heres-what-you-should-know-faqs/
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Dec 1, 2016 23:50
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Thanks for the article, I'll check it out! To be clear, I'm aware that these are two different scenarios for private loans, but the ultimate loan is still a private loan. I did work with private loan consolidations as well. I've also done amortization schedules, so I know the monetary difference can be significant. We actually had a spreadsheet to use for this back when we did consolidation loans that I could just plug numbers into. Based on my personal experience, however, I do not feel comfortable recommending private loans, specifically in the case of a choice between federal and private. I don't think the companies are evil, but for example, Sallie Mae used to have a private loan literally called a "student Stafford" loan. We dealt with those borrowers because they would call us to handle their federal loans and get angry/upset when they realized they didn't have a federal loan we could help them with. Disclaimer: I didn't work for Sallie Mae. On the other hand, Wells Fargo used to have a good reputation and I always recommended them for people who had to do private loans. Wells Fargo uh...isn't exactly trustworthy anymore. I'll switch them out with SoFi. I just read through the OP and there's some bits that need revamping. Do you mind if I add your example, slightly edited, under the consolidation bit? I'm glad you've had such a good experience with them! Are they nationally available? I'll add their link to the OP when I get to a proper computer if so.
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Dec 2, 2016 00:12
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My wife and I have a combined ~160k of student debt, or at least that's how much we expect to have when she graduates in about 5 months, both of us having MS degrees at that point. We have no problem consolidating or whatever, like from a relationship standpoint, if that's the best option. About 25k of that is private loans. What's the best way to minimize our monthly payments so we can focus our income on the best target for repayment between all our accounts. We have an upcoming federal loan bill of about 1100$ that we'll be able to pay, but that I'm not at all comfortable with.
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Dec 2, 2016 15:07
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Wiggy Marie posted:Thanks for the article, I'll check it out! Sure I don't mind. SoFi is available everywhere except for Nevada for some reason. I'm certainly not an expert on the subject, just someone who did the appropriate amount of research before making an important decision. I just think that like everything else in personal finance, the answer to "Should I refinance?" is "It depends." rather than a simple yes or no.
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Dec 3, 2016 01:52
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So a quick bit of Googling has convinced me that I'm probably pretty hosed, but I'd like to get some (hopefully more informed) feedback from goons who may know better on this. Apologies in advance for textwall but it's Sunday morning, I just found out about this, and I'm freaking out more than a little bit. I have around 36,000 dollars in student loan debt through Wells Fargo. I graduated from college 7 years ago, and in that time have whittled down around half of the principal (it was originally around 70k) on my own with no payments made by anyone else in my family. The only way that I was able to get those loans was by having a grandparent cosign -- neither of my parents earned enough money / had good enough credit to do it, and after much reluctance, my grandma cosigned for me (who had a very solid head on her shoulders, a solid income, and was just in general a very good personal accountant). For background, since graduation I have moved to Europe for work, and earn around 55,000 Euros annually pre-tax... my actual post-tax monthly income is around 2400 Euro (in November each year I get an extra month's pay as a bonus). On paper this looks like a totally fine income, but around 1000 of that is used every month for student loan payments alone, and another 1200 or so just for living expenses (rent + food + transportation). In reality, I'm barely making ends meet. As these things tend to go, grandma passed away in September (somewhat unexpectedly... she was only 70 and in good health after giving up smoking over ten years ago). This month I missed a payment due to a delayed transfer from my European bank account, and so a letter landed at my grandparents' house from the bank to remind them of the payment being past due. Grandpa freaked a bit and gave the letter to my aunt, who forwarded it to me. She mentioned that she knew about the forgiveness program offered for Parent Plus loans (I know that this does not apply to me), and encouraged me to do research on what happens to the loan when a cosigner dies. For Wells Fargo, it seems that they will attempt to collect the full amount of the loan upon learning of the death of the cosigner. So I guess my question(s) are:
I guess as a sort of side question, since my fiancé and I have been coincidentally talking about this possibility lately: his parents are pretty well-off. His dad (a business owner) has offered to loan my fiancé startup capital to start his own small business, if he ever decided that was something he wanted to do. We have started thinking about the possibility of using that offer instead to just pay off my student loans in one swoop, which would pretty massively improve our quality of life (it would, in effect, nearly double my monthly take-home, so it would be almost like having another source of income). Of course, this would be a family loan, so I would be saving to pay them back... the upside is of course that there's no interest to worry about, which can be pretty crippling. Aside from the massive amount of guilt and personal qualms I have with even considering this option (I don't even like it when they pay for my plane ticket when we visit them, let alone asking for tens of thousands of dollars), another issue would be a bit more practical: they don't have a bank account in the US, and all of their accounts are abroad. If they were to offer to settle this problem for us, how would transferring that amount of money from a foreign account to my Wells Fargo account work logistically? Would there be any wonky tax implications for me of having the debt wiped out by a benevolent benefactor? Drone fucked around with this message at 10:27 on Dec 4, 2016 |
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Dec 4, 2016 09:58
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Drone I'm a lawyer and would be willing to help you out if you want. The first thing you need to do is look at the note you signed. Feel free to pm me.
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Dec 4, 2016 20:06
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So I graduated about a year ago, with around 21k in debts, and have been paying near the minimum (around $125 a month), for the past 6 months now. It's been slowly coming out of my savings account, which is about $4k of money that I received as a graduation gift. That has worked OK for me, as I am able to get by alright with my part time job at a local boat yard because I am good at keeping the rest of my expenses very low. However, a family member passed away in the last year, and my family is getting an unexpected inheritance, and they want to use part ($14k) of it to help me pay off some loans. I was hoping to get some advice from this thread about the best way to use this money to take some of the weight off of my shoulders. I really like my current lifestyle, my work at the boat yard supports my entrepreneurial endeavors. It's a lifestyle I hope to keep up until I am 26, and will need to figure out a way to have health insurance for myself at that point. My parents just want to throw all of that money at the principal to try to get it down as low as possible, but that also means that I will still be making payments during a time in my life that I will likely be the most financially vulnerable. I have one loan of about $5k at a rate of over 6.5%, and I think it is smart to at least pay off that one, but maybe set the rest aside as a savings account (or maybe invest in the stock market?) that could accrue some interest and I could use that to slowly pay off my loans. However, I don't have a lot of experience as a money manager, I've lived on pretty slim margins my entire adult life. Trying to become more of an adult in that way. What tips do you all have for me? Do you need more info?
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Dec 5, 2016 19:14
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If you lost your job and had no income for 6 to 12 months, how much would you absolutely need to stay in a financial situation you are okay with being in? Enough to cover things like rent, groceries, utilities, the essentials? Set aside that much of your inheritance as an emergency fund. Don't draw from it to pay for loans or hobbies or entrepreneurial endeavors. It's an emergency fund. Keep it in place for emergencies. Use the rest to pay down your highest interest rate loans. Some people might suggest opening a Roth IRA which I think is a good idea too. I'd probably do some combination of the two.
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Dec 6, 2016 03:11
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BAE OF PIGS posted:If you lost your job and had no income for 6 to 12 months, how much would you absolutely need to stay in a financial situation you are okay with being in? Enough to cover things like rent, groceries, utilities, the essentials? Set aside that much of your inheritance as an emergency fund. Don't draw from it to pay for loans or hobbies or entrepreneurial endeavors. It's an emergency fund. Keep it in place for emergencies. I agree with this except for the Roth IRA. With your lifestyle I would establish a 6 month emergency fund for your rent/housing, utilities, groceries, and essentials, and then I would pay off the student loans with the highest interest rates. If you have any money left over after paying off any student loans over 6% then maybe you can think about retirement accounts.
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Dec 6, 2016 21:31
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IBR can change as often as your income does, assuming you submit the proper forms? I'm thinking of starting my own law firm which means I won't be making much, if anything, for at least a few months. Is there a way to get essentially $0 payments during that time (I realize the unpaid interest will capitalize onto the loans)?
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Dec 26, 2016 00:06
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Yes, you generally certify income with pay stubs. Not sure how self employment works
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Dec 26, 2016 00:14
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Is this the place for advice on how to improve your situation with a current sally mae/wells fargo private debt?
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Dec 27, 2016 12:42
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Presumably dumb question about paying off a loan: I made a payment yesterday to Nelnet for the full balance of my student loan, well before their 4PM cutoff ("All online payments must be submitted by 4 p.m. (Eastern) on a business day to be effective the same day.") When I logged on to my account this morning, the payment hadn't been applied yet and my balance actually went up by a few cents, presumably due to interest. Is there a way to fully pay this thing off and not accumulate more interest, or do I have to hassle them via phone when they reopen on Tuesday?
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Dec 31, 2016 18:35
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curried lamb of God posted:Presumably dumb question about paying off a loan: I would assume this is a holiday/systems processing thing. Keep an eye on it next week and if it doesn't post properly, give them a call. Also, congratulations! bowmore posted:Is this the place for advice on how to improve your situation with a current sally mae/wells fargo private debt? We can try! There's pretty diverse opinions in here about how to handle these kinds of debts. What's your situation?
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Dec 31, 2016 18:53
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Wiggy Marie posted:We can try! There's pretty diverse opinions in here about how to handle these kinds of debts. What's your situation? My partner is actually with Navient. Her total current balance is $24,662.03 with a past due amount of $1305.80 and a current amount due of $606.86. Her loans consist of: Signature Student loan disbursed in April 2009 with a variable interest rate of 8.125%, a starting balance of 14K and remaining balance of $13,761.73. Sallie Mae Smart Option Student loan disbursed in May 2010 with a variable interest rate 10.625%, a starting balance of 22K and remaining balance of $10,900.30. I believe she has deferred twice already due to financial hardship (in between jobs, ect) and has tried to go through a process to lower her monthly payment in which she had to produce bank statements and an explanation as to how the money is spent. At one point she was told that she could not lower her payments unless she had a balance of 30k or more, which she did not. Her father is a cosigner on both loans but is not willing/unable to make these payments for her. It becomes extremely hard for her as she is the sole worker and provides the only income in our partnership apart from small government benefits I get as I am a full time university student. She has a regular job with fairly decent pay and is paid every two weeks around $1200-$1500. We live in Australia where cost of living is higher and when it does come time to pay loans, we must account for the exchange rate, which is forever changing. We live paycheck by paycheck so she must pay with her bank card which charges about $20 for international use depending on how much the transaction was. We use PayPal to avoid this when we can manage to transfer money ahead of the due date but this is no longer viable at this point. Based on our daily living expenses and other debts we can only afford about $500 per pay - so $1000 every month which is around about $720.00 at the current exchange rate. We've talked about taking a personal loan out here in Australia to cover the amount of both loans to finally close them out and no longer have her father attached to her debt as he claims his credit has been damaged from the recently missed payments and is receiving many phone calls. However, we have only applied for one loan which was denied as she has no collateral built up yet in Australia. Any ideas on other options we can look into would be greatly appreciated. Thanks!
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Jan 1, 2017 05:48
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curried lamb of God posted:Presumably dumb question about paying off a loan: It takes like 2 business days for the payment to be processed and the funds debited from your bank account. However, if you made the 4PM cutoff, the payment is applied effective the day you submitted it and the interest that accrued during the payment processing will get wiped out. That's how it always happened when I paid off one of my NelNet loans online.
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Jan 1, 2017 07:07
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I'm trying to help out my girlfriend with finding a private lender. She needs about 6k a semester. Is simpletuition.com still a good stsrting point like the OP says?
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Jan 17, 2017 15:53
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I would still recommend them because they should give you a few options. Also check out lenders the school recommends, and read the fine print very carefully!
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Jan 17, 2017 17:27
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So she doesn't hsve a cosigner. Her parents are in bankruptcy. She's 24 and makes 6-12k a year. She needs about 12k a year in private loans to cover tuition. Are there any lenders she could look at that will be forgiving about not having a cosigner? She has very little credit history also because of not wanting to be like her parents. Thanks for the help. I never had these problems when I was in school and we're both a bit at a loss as to what the options are.
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Jan 19, 2017 16:05
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Navient is being sued by the CFPB. I won't copy the reasons here, the article is short enough that you should read it. I'm one of the people who were talked into forbearance more than once between the date range (2010 to 2015) because they "couldn't lower my payments". Eventually I got on IBR, I don't remember which year that was exactly - 2013 maybe. It would be nice if I received some sort of portion of the lawsuit since it probably cost me thousands of dollars. https://www.consumeraffairs.com/news/feds-sue-student-loan-servicer-navient-011817.html Edit: reading through it a third time I realized there's two other items on there that affected me. mitztronic fucked around with this message at 16:12 on Jan 19, 2017 |
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Jan 19, 2017 16:09
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packsmack posted:So she doesn't hsve a cosigner. Her parents are in bankruptcy. She's 24 and makes 6-12k a year. She needs about 12k a year in private loans to cover tuition. Other options without a cosigner....ehhhhhhh. She needs to get in touch with her financial aid office to talk through all of this. Physically go in if possible to speak with someone. There's been lots of regulatory changes since I left the biz, so I'd hate to give her bad advice. For example, in the past I would've said: Since it sounds like she has to file as dependent, one of her parents can apply for a parent PLUS in order to be denied. If they are indeed denied, she is then eligible for more aid as an independent student. However, the parent does specifically have to be denied for this. Theoretically they should be, if the bankruptcy shows up on their credit score. I'm not positive these rules still apply though. Have her call the Financial Aid Office/go in to speak with someone and go from there. Other options are the directly contact the department she'll be with at the school to see if they have any little scholarships/stipends/whatever she could apply to. mitztronic posted:Navient is being sued by the CFPB. I won't copy the reasons here, the article is short enough that you should read it. I'm one of the people who were talked into forbearance more than once between the date range (2010 to 2015) because they "couldn't lower my payments". Eventually I got on IBR, I don't remember which year that was exactly - 2013 maybe. I saw this the other day. Back in the day, we never did this kind of thing. I can't speak for the company now, but ugh. I hate this mentality and I hate how it impacted/impacts borrowers like you.
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Jan 19, 2017 18:18
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Let's say I have about $21,000 in student loans from college (graduated in '14) and I want to go to grad school for two years so I can finally have a big girl job. I'm already on a deferment for these loans (another 11 months or so), am I crazy to be considering grad school when I can really only afford my bills and immediate expenses right now, or is that actually feasible? I get that what I'll have to pay after grad school is even more, but the idea is to actually like, have a way to start reasonably paying it off once I've graduated. (I'm wanting to major in toy design in grad school, I graduated with a BFA in animation in college, went to art school because I'm a big idiot)
LemonLimeTime fucked around with this message at 07:18 on Jan 24, 2017 |
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Jan 24, 2017 02:11
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It is a tough choice but if you go back to school you will not have to pay the loans until you are done. If you think you can get a good job out of further schooling and knock them out then it could be worth it. You just have to figure out if that is the case. I don't think you are crazy though. We would have almost no doctors if it wasn't for taking on a ton of loans and the job prospects working out.
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Jan 24, 2017 05:27
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I'm flirting with the lifetime maximum for Stafford loan eligibility as I'm closing in on my final semester of my graduate degree (relax, I work full time, and have no trouble making my payments). My original total disbursed amount, spread over ~10 years, is $119,766. This was eventually followed with a consolidation loan, in the amount of $142,864, which I've been making payments on (ouch interest capitalization). I have two classes to go on my masters, which I'll be finishing this fall. My lifetime borrowing maximum is $138,500. Since the consolidation loan was for more than the lifetime maximum, does this mean I'm maxed out, or do they go by the original ~120k borrowed number, meaning I still have ~18,500 left in eligibility?
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Mar 23, 2017 01:22
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I defaulted on my student loans and that information is now on my credit score. Can I negotiate anything with the collection agencies to have that removed once I start paying them through some sort of agreement or will they only typically be happy once the entire balance is paid off (if I can ever manage that now)? I haven't been employed for three years due to mental health issues so that's why I didn't care about any of my loans going into default at the time. Also, could I get a loan from a credit union to pay some of my student loans, or is this a bad idea? I've never gotten a loan for anything other than going to school so I'm unfamiliar with the terms they usually have.
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Mar 26, 2017 23:10
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ServoMST3K posted:I defaulted on my student loans and that information is now on my credit score. Can I negotiate anything with the collection agencies to have that removed once I start paying them through some sort of agreement or will they only typically be happy once the entire balance is paid off (if I can ever manage that now)? I haven't been employed for three years due to mental health issues so that's why I didn't care about any of my loans going into default at the time. Are they federal student loans? If they are and you haven't done it before, you can apply to rehabilitate your loans with the debt collectors. You'll make income based payments for 9 months, though not less than $5/month, I think, and once you make those 9 monthly payments on time, your federal student loans will be out of default. Rehabilitation should also reduce the amount of collection costs that are added to your loan balance. After rehabilitation, you'll be reassigned to another loan servicer and be eligible to apply for income-based repayment plans, like IBR, PAYE, and RePAYE. It will also remove the default from your credit reports, though all the late payments leading up to the default will remain. You can only rehabilitate federal loans one time, so ideally, don't screw up again and stay on top of your payments and annual income recertifications for the income-based plans. Rehabilitation is not available for private student loans. Whatever agreement you may be able to work out with those collection agencies will be based on how much money they think they can extract from you and how easily.
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Mar 27, 2017 00:14
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alwayslost posted:I'm flirting with the lifetime maximum for Stafford loan eligibility as I'm closing in on my final semester of my graduate degree (relax, I work full time, and have no trouble making my payments). My original total disbursed amount, spread over ~10 years, is $119,766. This was eventually followed with a consolidation loan, in the amount of $142,864, which I've been making payments on (ouch interest capitalization). I have two classes to go on my masters, which I'll be finishing this fall. My lifetime borrowing maximum is $138,500. Since the consolidation loan was for more than the lifetime maximum, does this mean I'm maxed out, or do they go by the original ~120k borrowed number, meaning I still have ~18,500 left in eligibility? You should check the NSLDS to answer this question. Whatever total that has you as is the total the financial aid office can use. This generally doesn't include interest capitalized, but rules might have changed in the past several years.
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Mar 27, 2017 12:41
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Ancillary Character posted:Are they federal student loans? If they are and you haven't done it before, you can apply to rehabilitate your loans with the debt collectors. You'll make income based payments for 9 months, though not less than $5/month, I think, and once you make those 9 monthly payments on time, your federal student loans will be out of default. Rehabilitation should also reduce the amount of collection costs that are added to your loan balance. After rehabilitation, you'll be reassigned to another loan servicer and be eligible to apply for income-based repayment plans, like IBR, PAYE, and RePAYE. It will also remove the default from your credit reports, though all the late payments leading up to the default will remain. You can only rehabilitate federal loans one time, so ideally, don't screw up again and stay on top of your payments and annual income recertifications for the income-based plans. Thanks for the info! I think they're federal loans that were being serviced by Navient so hopefully I can apply like you mentioned.
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Mar 27, 2017 15:46
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Ancillary Character posted:It will also remove the default from your credit reports, though all the late payments leading up to the default will remain.
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Mar 28, 2017 05:25
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