September 12, 2012

Student Loan Repayment and Consolidation

Posted in Graduate Students, Parent PLUS Loans, Private Loans, Stafford Loans, Student Loan News tagged , , , , , at 4:44 PM by Joe From Boston


We often get questions about repayment of student loans and loan consolidation options.  Here is a quote from the Student Loan Network website:

Student loan repayment should be seriously considered prior to taking on debt. Typically, it will take students 10 to 20 years after graduation before they are able to repay their student loans in full.”

Review all of your loan documents to insure you know how much you owe.  Talk with your lenders about repayment plans.  Do a budget and figure out where you are spending your money and if there are ways you can save.

The general advice is to make sure you pay off your high interest debt first. Generally federal loans have more favorable repayment terms than private loans – so weigh your options carefully.  Finally, consider consolidating your loans to reduce the number of payments you have to make.  (note: you will want to keep your private and federal loans in separate consolidation.  Consolidating private loans with federal loans may eliminate the benefits of the federal loan programs).

For more information, visit: http://www.consumerfinance.gov/students/repay/

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May 19, 2009

New Income-Based-Repayment Plan for Student Loans July 1, 2009

Posted in Consolidation, Graduate Students, Legislation Affecting Students, Stafford Loans, Student Loan News tagged , , , , , , , at 7:30 AM by Joe From Boston


While this won’t help parents as it doesn’t apply to PLUS Loans, this will help your students. Starting July 1, 2009 a new Income-Based-Repayment (IBR) plan will be offered to students for Stafford, GradPLUS and Consolidation loans that are not used to pay back Parent PLUS Loans.

According to the Team FFELP IBR Workgroup, “A borrower must have a partial financial hardship to qualify for an income-based repayment plan. A borrower who at one time had a partial financial hardship, but ceases to have a partial financial hardship may remain in the IBR plan.”

Partial Financial Hardship is calculated with the equation:
Standard Payment > 15%[AGI – (150% Poverty line applicable to family size)]

This means, partial financial hardship occurs when the standard repayment plan based on a 10-year repayment period at the time the borrower initially starts repayment is greater than 15 percent of the difference between the borrower’s adjusted gross income and 150% of the poverty line for the borrower’s family size.

Family size is defined as members of your household, such as spouse, children, grandparents who live in your residence with you and receive more than half their support from you. So a parent with Alzheimer’s that you take care of would count, but a roommate would not. It does include unborn children that will be born over the next year.

To qualify, you will need to authorize your loan company to receive the current year and past 3 years worth of tax returns from the IRS using IRS Form4506-T.  Contact your lender to learn more!

March 13, 2009

Student Loan Forgivenes as of Feb. 2009

Posted in Consolidation, Legislation Affecting Students, Parent PLUS Loans, Stafford Loans, Student Loan News, The Financial Aid Process tagged , , , , , at 9:46 AM by Joe From Boston


Last month, the federal Dept. of Education released new guidelines about qualifying for Public Service student loan forgiveness program.

Eligibility Requirements:

  • The borrower must not be in default on the loans for which forgiveness is requested.
  • The borrower must be employed full time by a public service organization –
    • When making the required 120 monthly loan payments (certain repayment conditions apply – see below);
    • At the time the borrower applies for loan forgiveness; and
    • At the time the remaining balance on the borrower’s eligible loans is forgiven.

loan repayment requirements:

  • The borrower must have made 120 separate monthly payments beginning after October 1, 2007 on the Direct Loan Program loans for which forgiveness is requested. Earlier payments do not count toward meeting this requirement.  Each of the 120 monthly payments must be made for the full scheduled installment amount within 15 days of the due date
  • The 120 required payments must be made under one or more of the following Direct Loan Program repayment plans–
    • Income Based Repayment (IBR) Plan (not available to parent Direct PLUS Loan borrowers)
    • Income Contingent Repayment Plan (not available to parent Direct PLUS Loan borrowers)
    • Standard Repayment Plan with a 10-year repayment period
    • Any other Direct Loan Program repayment plan, but only payments that are at least equal to the monthly payment amount that would have been required under the Standard Repayment Plan with a 10-year repayment period may be counted toward the required 120 payments.

Eligible jobs:

The borrower must be employed full time (in any position) by a public service organization, or must be serving in a full-time AmeriCorps or Peace Corps position. For purposes of the Public Service Loan Forgiveness Program, the term “public service organization” means –

  • A federal, state, local, or Tribal government organization, agency, or entity (includes most public schools, colleges anduniversities);
  • A public child or family service agency;
  • A non-profit organization under section 501(c)(3) of the Internal Revenue Code that is exempt from taxation under section 501(a) of the Internal Revenue Code (includes most not-for-profit private schools, colleges, and universities);
  • A Tribal college or university; or
  • A private organization that is not a for-profit business, a labor union, a partisan political organization, or an organization engaged in religious activities (unless the qualifying activities are unrelated to religious instruction, worship services, or any form of proselytizing) and that provides the following public services –
    • Emergency management;
    • Military service;
    • Public safety;
    • Law enforcement;
    • Public interest law services;
    • Early childhood education (including licensed or regulated health care, Head Start, and state-funded pre-kindergarten);
    • Public service for individuals with disabilities and the elderly;
    • Public health (including nurses, nurse practioners, nurses in a clinical setting, and full-time professionals engaged in health care practioner occupations and health care support occupations);
    • Public education;
    • Public library services; and
    • School library or other school-based services.

March 3, 2009

Can you still consolidate student loans?

Posted in Consolidation tagged , at 3:28 PM by Joe From Boston


I’ve heard this question alot recently – during the current economic crisis, more and more lenders will not offer consolidations, and students hold up their hands in frustration and shout that no one will consolidate their loans.

Well, that’s not entirely accurate.  There is at least one place that will still consolidate loans that are not in default – Direct Loans, also known as the federal Department of Education.

Yes, Virginia, there is a Santa Clause and yes you can consolidate your loans if they’re still in good stnading.

So get your butts over to their website, ASAP and request information:

http://loanconsolidation.ed.gov/