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Get your questions answered! Find the latest news on student loans, consolidation & forgiveness
How to create a hard-hitting plan to get rid of those student loans for good.
Student loans are easy to get, but hard to understand, and even harder to repay.
Recent grads and their professors say it isn’t, and your kids may not be able to cover the costs after they graduate.
It may be easier to get rid of your student loans than you ever thought possible!
Here are all of the avenues to consider before taking out student loans.
As student loan debt continues to climb, students and parents alike aren’t using all available resources to save money on college.
Paying your student loans can take a long time. Here are a few unusual ways to speed up the process.
FAFSA got a makeover, and the process is simpler for low-income families.
Nearly everyone thinks college is worth it, but that doesn’t mean you need to go into debt to get a degree.
Picking a career that makes you happy is important, but so is financial stability.
Colleges are like buying real estate property, some will pay out more than others over time.
Forget sex, drugs, and cash. Songs mentioning student loan debt are on the rise.
They’re most willing to work in poverty-stricken areas.
A missed payment is the No. 1 way to lose points on your credit score.
She even analyzes her smallest purchases.
The Empire State forks out more money per student than any other in the U.S., but that’s not necessarily paying for the best.
He also paid it all off — but it cost him some memories.
He works two full-time jobs and still makes time to write about money.
He and his wife “took action” after receiving a year-end tax document.
Private student debt consolidation loans allow you to combine both federal and private student loans into a single monthly payment, but you give up eligibility for federal relief programs and student loan forgiveness. Here’s what you need to know!
What do Halloween and Graduation Day have in common? Both are frightening.
When you owe money to a debt collector, there’s a chance they can sue you and get a court order for garnishment that could affect your accounts.
These days, “tuition assistance” is a popular perk. Find out which companies are legit when it comes to paying your loans.
When companies try to get young people hired with the promise of ‘tuition assistance,’ here’s what they don’t tell you.
No matter how old you are or where you are in life, as a woman you need a personalized financial strategy that helps you avoid issues and reach your goals.
From marriage to kids to downsizing in your golden years, we’ll show you what you need to know to make sure your family is financially successful.
Short or tall, left-handed or red-headed, duck caller or Trekkie, there’s a college scholarship for you.
Including: You didn’t apply for a scholarship no one else did, either.
If we think of the government at all, we usually think about the money they take away in taxes. But it taketh and giveth away, too.
We help you get on top of your student loan debt payments by answering the top questions about student loan debt, consolidation and forgiveness. Get answers to the most common questions about student loans.
A young artist named Christopher Kosek draws a comic book about student debt, but it sure ain’t funny.
Learn how dropped classes could start the clock on your federal student loan debt payments if you fall below a certain number of hours. It’s crucial to stay above half-time enrollment unless you want your loan payments to start soon.
As many problems as there are with student debt, there can be a good side to these loans as long as you maintain control of the debt. Learn why student loan debt is considered “good” debt and how it can benefit you.
If you don’t have money available to make your student loan payments, it doesn’t necessarily mean you’re headed for default. We explain how to avoid default and what you can do to keep your loans current until you can afford to pay.
Not all student loans can use the same repayment strategies. That means you should really break your repayment strategy into two categories; you have one strategy for federal student loan debt and another for private.
This allows you to use federal repayment plans and loan forgiveness programs if you qualify. Those don’t apply to private student loans and you can’t include private debts in federal programs. Although you can use private loan consolidation on both types of debt, don’t do it! This converts federal debt to private, meaning you have fewer options available for relief.
If you have both types of loans, keep them separate and figure out the right repayment strategy for each.
With many types of debt reduction – credit cards, private student loans and even tax debt – reducing the interest rate applied to your debt is a big part of seeking debt relief. The more you can reduce interest charges, the easier it is to repay your debt quickly. So, a higher credit score means lower interest rates and faster repayment.
But that really doesn’t work with federal student loans. Interest rates are not dependent on your credit score. Instead, rates are set based on which academic year you took out your loans. The Department of Education announces new rates each year; in the current system, rates are based on the 10-year Treasury Note Index.
When you consolidate your debt or enroll in a federal repayment plan, the new rate is set by taking a weighted average of the loans you include in the program. Unless you convert your federal loans to private (which we advise against above), rate reduction should not be your goal. Instead, you should aim for:
As with any federal relief program, student loan repayment plans and forgiveness programs are subject to change. Both Congress and the executive branch through the Department of Education can change or cancel these programs.
Congressional changes tend to be more drastic, but they take longer. Meanwhile the DOE can make small changes at their discretion, meaning adjustments happen much faster. But even those small changes can have a significant impact on how you repay your debt. For example, the DOE under Betsy DeVos have “tweaked” the eligibility requirements for Public Service Loan Forgiveness. This led to people who had previously certified their eligibility receiving notices that they were no longer eligible.
The moral of the story is that you can’t wait around or procrastinate when it comes to student loan repayment. In most cases, if you enroll in a program that gets changed or cancelled, you stay in under the rules that were there when you signed up. But if you sign up the day after a rule change, things may be different. With that in mind, never wait on solving your student loan debt. If a program fits, get in before they have time to change it.
No matter whether you hold private student loans or federal, it doesn’t matter -neither can be discharged through bankruptcy. The federal government changed bankruptcy filing regulations to prohibit student loan discharge except in cases of extreme hardship. This is extremely rare.
Once those rules were in place, private lenders made sure that limitation would extend to private student loans as well. As a result, even private student loans taken out through a traditional lender can’t be easily discharged. You must prove that repayment of your loans will cause extreme financial distress – and given that you’re already sitting in bankruptcy court, you can imagine how hard that would be. Essentially, you have to show your loans would put you right back into bankruptcy and keep putting you there. And that no amount of payment restructuring or settlement is possible.
For what it’s worth, Rep. John K. Delaney (D-Maryland) proposed an amendment this year that would change this rule. It’s called the Discharge Student Loans in Bankruptcy Act of 2017. Unfortunately, we checked with our Senior Policy Editor Brandon Ballenger; after some checking, he says that the bill has a less than 1% chance of passing.
On a normal debt, when you default it leads to a negative item in your credit report; this occurs once the creditor moves your debt to “charge off” status. You also incur negative items for each payment you missed leading up to the charge off. These negative marks decrease your credit score, and they stick around for seven years from the date you incur them.
Federal student loans are different (again). But here the difference works in your favor. If you fall behind on a federal student loan, simply make payments on time for six consecutive months. This moves your loan back to a “current” status and erases any missed payments as if they never happened. You can eliminate the credit damage so it’s easier to borrow and get approved for new credit.
This only works on federal student loans. It’s also important to note that you lose that ability to erase credit damage by using a debt consolidation loan. You can use Federal Direct Consolidation Loan to consolidate student loan debt; it brings defaulted debt current automatically. However, it does not erase the credit damage caused by missed payments.
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