LOWER SCHEDULED MONTHLY PAYMENT:
✓ INTEREST PAYMENT BENEFITS]
✓ 20-YEAR CANCELLATION
✓ 10-YEAR PUBLIC SERVICE LOAN FORGIVENESS
Unfortunately not. You must first consolidate your loans into a direct consolidated loan before being considered for PAYE. The good news is we can help you with that.
Pay as you earn is a repayment plan for eligible Direct Loans that is designed to limit your required monthly payment to an amount that is affordable based on your income and family size?
Yes, once you consolidate, the subsidized portion of your loans will continue to receive benefits. In fact, by consolidating, the federal government will pay the interest on the subsidized portion of your loans for the first 3 years on qualifying plans.
No, you must first consolidate your loans in a Direct Consolidated loan before you are considered for PSLF. The good news is we can help you with that.
No. Student Loan Service is not affiliated with the Department of Education, or any academic or governmental entity. Student Loan Service is a for-profit business and all of the services provided by Student Loan Service can be performed without paid assistance if you have the time and energy to learn and complete the procedures and obtain the paperwork necessary to do so.
Student loans are difficult, but not impossible, to discharge in bankruptcy. To do so, you must show that payment of the debt “will impose an undue hardship on you and your dependents.”
Courts use different tests to evaluate whether a particular borrower has shown an undue hardship.
The most common test is the Brunner test which requires a showing that 1) the debtor cannot maintain, based on current income and expenses, a “minimal” standard of living for the debtor and the debtor’s dependents if forced to repay the student loans; 2) additional circumstances exist indicating that this state of affairs is likely to persist for a significant portion of the repayment period of the student loans; and 3) the debtor has made good faith efforts to repay the loans. (Brunner v. New York State Higher Educ. Servs. Corp., 831 F. 2d 395 (2d Cir. 1987). Most, but not all, courts use this test.
If you can successfully prove undue hardship, your student loan will be completely canceled. Filing for bankruptcy also automatically protects you from collection actions on all of your debts, at least until the bankruptcy case is resolved or until the creditor gets permission from the court to start collecting again.
Assuming you can discharge your student loan debt by proving hardship, bankruptcy may be a good option for you. It is a good idea to first consult with a lawyer or other professional to understand other pros and cons associated with bankruptcy. For example, a bankruptcy can remain part of your credit history for ten years. There are costs associated with filing for bankruptcy as well as a number of procedural hurdles. There are also limits on how often you can file for bankruptcy.
Yes, there are three income-driven options, the Pay As You Earn, Income-Contingent Repayment Plan and the Income-Based Repayment Plan. Read our eBook, “Eight Secrets Every College Graduate Should Know About Lowering Student Loan Payments,” or call us to discuss which plan may be available to you.
Borrowers can choose from multiple repayment plans (with various terms) to repay consolidation loan(s), including the Income-Contingent Repayment Plan and the Income-Based Repayment Plan. These plans are designed to be flexible to meet the diverse and changing needs of borrowers. With a consolidation loan, borrowers can switch repayment plans at anytime. However, if you select the Income-Based Plan and wish to change at a later date, your only option will be the Standard Plan.
No. If your financial situation changes, and you are able to increase your monthly payment to pay off your loans more quickly, you may do so without penalty.
Federal student loans are granted deferrals on a case-by-case basis. The most common reasons for deferral include:
- Unemployment or demonstrated economic hardship
- Enrollment in college, career school or graduate program
- Active military service
No, a private loan cannot be consolidated with your federal student loans. It can only be consolidated with other private loans.
Your federal student loans are considered in default after 270 days (nine months) of non-payment. Consequences include:
- Immediate increase in the interest rate of your student loans to 18.5 percent in addition to any collection agency fees.
- Immediate loss of your Title IV financial aid benefits.
- Negative reporting to the three credit bureaus, which could result in difficulties obtaining credit cards or home and auto loans.
- Withholding of your federal income tax return by the IRS to repay the defaulted student loans.
- Administrative wage garnishment of up to 25 percent of your paycheck.
