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Messages - TheCollegeInvestor

31
1. Doesn't matter unless you need to convert an old FFEL loan to Direct. Actually could harm you by resetting any clock you have accrued to date. Read this: https://thecollegeinvestor.com/21662/student-loan-consolidation/

2. Pick the program that has the lowest monthly payment so you maximize PSLF. Just make sure it qualifies.

3. DIY. It's so incredibly easy to fill out the forms. If you graduated college, you can do it! A third party can't help you with poor loan servicing. What I recommend is that you are diligent in your paperwork. Keep a copy. Send all paperwork each year certified mail with a return receipt. That way you have proof it wasn't just mailed, but received.

Remember, PSLF requires:
1. Qualifying Loans (Direct loans, not old FFEL loans)
2. Qualifying Repayment Plan (10 year standard, IBR, PAYE, RePAYE, ICR)
3. Qualifying & Certified Employment
32
I'm a bit confused why you're dropping the IBR plan? The standard extended plan can be 20 years, but why change - if you've been on IBR for 6 years, you get any balance remaining forgiven at the 20 or 25 year mark (depending on your loans). Either of those is better than switching.

Even more so, If you make this large additional payment of $26,000, your new loan balance will be just $11,000. Where do you get the $22,000 from?

If it were me, I'd take that $26,000 and fully pay off the unsubsidized loan, and then put the remaining $8,000 towards the subsidized loan. At your new remaining balance of $11,000, you can assess your repayment strategy, or even just stay in IBR at the higher payment amount and make additional payments as you can to eliminate the debt.
33
You should read this and consider this approach: https://thecollegeinvestor.com/17807/the-math-behind-married-filing-separately-for-ibr-or-paye/

I don't recommend refinancing as you aren't making progress to pay off the loan in 7 years or less (which is the ideal to refinance).

Finally, you would likely want to get help from a financial planner that understands student loan debt.
34
You can see all the options yourself here: https://studentloans.gov/myDirectLoan/repaymentEstimator.action#view-repayment-plans

There is no "secret" ways to save - it's all setup by the government.

If that $192 is really 15% of your discretionary income, you're probably having an AGI about $45,000 or so. You need to look at other areas of your budget to save.
35
What repayment plan are you on that is $192 per month? If it's an income-driven program, it's based on your income - capped at 10-15% of discretionary income based on your plan.

It also requires you to accurately fill out the number of dependents you have as well.

Read this: https://thecollegeinvestor.com/11856/secret-student-loan-forgiveness/
36
Has your income gone up substantially? The only reason you have that jump is you either got married, or your income has risen.

In either case, it might make the most sense to pay off the loans quickly - maybe even refinance to save interest.
37
You Federal loan will never go away. It will always be waiting for you to earn something, generate income, and they will garnish it.

A better solution (especially if you never plan to earn again), is to get on an income-based repayment plan. Your monthly payment is set at 10-15% of your discretionary income. That means if your income is low enough (or $0 like you said), your monthly payment would be $0.

This is a great solution for you because you will get out of default, and the repayment plan comes with loan forgiveness after 20 years.

Something to consider.
38
Ask a Question / Re: IBR Question
July 19, 2019, 08:29:23 am
It's actually a bigger tax issue than student loan issue. You should speak with a tax professional/CPA and understand how your taxes might change.

Then, while sitting together, run the student loan repayment estimator here: https://studentloans.gov/myDirectLoan/repaymentEstimator.action

You can then compare your tax difference to loan payment savings and see what makes sense.
39
Ask a Question / Re: IBR Question
July 18, 2019, 10:53:51 am
She can totally file for IBR, but you may also consider changing your tax filing status to lower her payments more:
https://thecollegeinvestor.com/17807/the-math-behind-married-filing-separately-for-ibr-or-paye/

Also, realize any amount forgiven under IBR is treated as taxable income, so you could face a "tax bomb" at the end.

You might run some numbers of IBR/Tax Bomb versus refi, and if you're tackling it together, and your income is sizable, maybe you just pay them off?
40
That's a tough situation, but there isn't anything to really be done. Your daughter could have postponed enrollment to avoid paying until this was resolved. Your accountant should have advised you that it can take months to process and amended return - and the school does have a deadline (and it's usually listed on their financial aid website).
41
Parent PLUS Loans aren't eligible loans for PSLF - because you can't get a qualifying repayment plan.

You need to consolidate to a direct consolidation loan, then get on ICR - which does qualify for PSLF.

You can consolidate as long as the only loans in the consolidation loan are the PLUS loans.

Where people get into trouble is that they put other loans types in with the PLUS loan, thus limiting future repayment plan options.
42
General Discussion / Re: 1099-C
July 16, 2019, 10:42:43 am
It's not your relatives that get a 1099-C, it's your estate. It depends on the loan type as well.

Read this: https://thecollegeinvestor.com/9675/student-loans-die/
43
Private Student Loans / Re: Student Loans
July 16, 2019, 09:36:03 am
First, read this guide on how to pay for college. Student loans are the last thing you want to get: https://thecollegeinvestor.com/21877/pay-for-college/

Second, when it comes to loans, the hierarchy should always be:
Federal Direct Subsidized -> Federal Direct Unsubsidized -> Private loans (only if the ROI of your college degree allows for it).

Borrowing too much to pay for college is the worst financial move you can make.

How to do it?

For Federal loans, you fill out the FAFSA, and you'll get an email from your college's financial aid office telling you that you can "accept these loans". Those are just Federal.

If you still need private loans (which should be rare for undergrad at a local state school), you just go to various banks and lenders and apply. Here's our recommended list: https://thecollegeinvestor.com/22108/best-private-student-loans/

Good luck!
44
Remember, you never have to pay to consolidate your loans - it's a free service you can do yourself. You can enlist the services of a third party company, but you never have to. If you do choose to work with them or anyone, make sure you read this first: https://thecollegeinvestor.com/16429/is-your-student-loan-repayment-company-a-scam/