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  • February 20, 2019, 09:24:53 PM

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Messages - TheCollegeInvestor

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Ask a Question / Re: Navigating the Best Repayment Plan
« on: Today at 09:48:26 AM »
The absolute best thing is to pay what you can afford and never miss a payment. I definitely wouldn't consolidate. If you told me you were on the standard 10 year plan and were paying more than the minimum comfortably, I'd say refinance and keep doing what you're doing. Especially since you're looking to be debt free in 12 years anyway.

However, as it stands with your income at $80k, you're not even projected to get loan forgiveness, as the loan will be totally paid off before 25 years (you can use this tool to play with yourself:

So, anyway, back to it - there's no magic bullet. Just pay as much as you possibility can as extra principal payments on your loans. That's how you'll do it. Honestly, you could probably do it in 5 years or less if you really tried. Pay until it hurts.

Do you have any shot at PSLF? Does your wife have income? Does she have loans too? Do you have kids?

Student Loan Forgiveness / Re: Start Here: Student Loan Forgiveness
« on: February 18, 2019, 06:57:57 AM »
These loan forgiveness programs only apply to American Federal student loans.

Ask a Question / Re: My Significant Other's Secret
« on: February 16, 2019, 09:04:33 AM »
Two things - it's not about calling Navient, it's about what she can afford. It's budgeting and income.

If she's making the minimums and not missing payments, she's already doing things right. If she can pay more, cool, but don't hate on her if she can't. But this is where you can maybe come in and help with the budget (i.e. suggest you stay home and eat frugally vs. fancy dinners out).

Second, be aware of her mindset and your mindset. I don't know how familiar you are with Mr. Money Mustache, but he recently divorced and wrote about it here:

Basically, his frugality and drive for FIRE was a big issue.

Is all of the above correct?

Yes, you have a pretty solid grasp of it. See this article:

I also have five short follow-up questions:

If I know I’m not going to be able to get money to pay the loans for 9 months in order to rehabilitate, should I consolidate ASAP? I’m assuming yes, before Alltran tries to garnish my wages.

We always recommend rehabilitation, but as you said, you don't know if you can afford it. And, the garnishments and tax offsets can still happen. So, it could be better to consolidate. This is really on you.

If I do go ahead and consolidate ASAP, will I still owe the collections fees that the collections company charged me with?

Yes, any accrued interest and collection fees will be rolled into your new loan. Expect it to add around 10% or more to the loan balance.

How long before student loan collections companies try to garnish your wages (specifically Alltran if you know about them)? If it makes any difference, remember I’ve been in default since April 2016, and the letter is dated Feb 5, 2019.

You've received a lot of "bonus" time. Companies can start to garnish your wages as soon as you're in default, which happens after being late for 270 days (9 months or so). So, you basically got a free ride for a couple years until today.

If I am able to get money to pay the loans for 9 months and can rehabilitate, after I’m out of default can I then consolidate and not be in collections anymore? If yes, after I consolidate will I still owe the collections fees that the collections company charged me?

After you rehabilitate, you don't need to consolidate, as you're already out of collections. Consolidation may help, but for most people it hurts rather than help. If you rehabilitate (versus consolidate), you escape some of the collection fees.

The bottom line, at this point, stop worrying about fees and interest. Either consolidate or rehabilitate (if you can swing it), then get on an income-driven repayment plan you can afford every month.

Ask a Question / Re: Parent plus loan
« on: February 11, 2019, 08:14:14 PM »
It's not going to be easy, but the sooner you take action, the better.

Here are your options:

It will involve a combination of significant budgeting, earning more, and working with your kids (meaning they need to do the same, but even more so). It sounds like a burden now, but being broke in retirement and having your Social Security garnished will burden your kids even more.

Student Loan Scams / Re: Doan Solutions
« on: February 05, 2019, 09:19:19 PM »
The only 10 year forgiveness program is Public Service Loan Forgiveness. Read about this and see if you qualify here:

You should be able to mimic any repayment plan promise on the Student Loans website. Check it here:

If you cannot recreate it, you should check to ensure that accurate numbers are being used for your estimate.

At the end of the day, even if you pay a third party service for help, you're still 100% responsible for your loans and the accuracy of the information you provide.

Student Loan Forgiveness / Re: Loan forgiveness and taxes
« on: February 04, 2019, 10:13:07 AM »
If you stay on an income-driven repayment plan, that is taxable forgiveness (versus PSLF, which is tax free).

Now, a lot can change between now and then, including changing it to be tax free. But as of now, what happens is you get a 1099-C for all the debt that was cancelled, and that is treated like ordinary income. So, you report $500k as ordinary income, which bumps you up to a pretty high tax bracket.

However, not all hope is lost. Most borrowers like you will likely qualify for insolvency - which makes it partially or totally tax free.

Read this:

Each loan is treated differently.

Your subsidized loan includes an interest subsidy, which would cover you during your in-school deferment. Interest would accrue other times, especially if you weren't making payments.

The unsubsidized loan was always accruing interest.

Student Loan Scams / Re: National Student Loans
« on: January 24, 2019, 09:23:39 AM »
We don't know anything about this company or presume to make assumptions.

It does sound like they are simply enrolling you in an income-driven repayment plan like IBR or PAYE. The program you describe is your payment is based on your income and anything left at the end of the repayment term is forgiven.

Learn more here:

Keep us posted.

Also, whenever you make extra payments, do it through their website and directly assign it to the loan principal. Never just send extra in.

Navigating Repayment / Re: Refinance/Consolidate Unaccredited School
« on: January 19, 2019, 08:13:37 AM »
If you have solid income, and are in their service areas, check out First Republic:

Also, maybe PenFed:

That's more math than I can do right now, but my gut tells me to keep the auto-pay discount AND make additional payments beyond that if you can afford it.

With that amount of debt, I'm assuming you are in medicine. If you have good income and expect that to rise, then definitely keep the auto-pay and save. If you're going for PSLF, that's moot.

I would also look at refinancing (once again, assuming you're in medicine or similar with high income) - highly qualified borrowers can get 1.95% fixed rate loans at First Republic. But even other places might save you 1% or more. Check this:

If you've had your loans since 2010, you likely had FFEL loans which don't qualify. Also, the extended graduated plan doesn't qualify. You needed to be on IBR, PAYE, RePAYE, or ICR.

Without your loan history, it's impossible to know if the consolidation was needed to get PSLF or not. It sounds like it may have been, in which case your previous payments would have never been eligible.

Now, if you had Direct Loans prior to your consolidation (which would be very rare based on your date), then you should have never consolidated. Do you know what your loans were prior to your consolidation?

Student Loan Forgiveness / Re: I am confused about repayment options ...
« on: January 08, 2019, 09:53:40 PM »
The "best" plan is the one you can reasonably afford to never miss a payment - which will probably be PAYE, RePAYE, or IBR.  You can apply by calling your lender or going to and selecting "Apply for Income Driven Repayment Plan".

Student Loan Forgiveness / Re: I am confused about repayment options ...
« on: January 08, 2019, 09:04:39 AM »
Correct - if your income is low enough, being on an income driven plan (IBR, PAYE, etc) can make your monthly payment legally $0 per month.

Check this out:

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