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Messages - TheCollegeInvestor

511
As a teacher, you qualify for PSLF - Public Service Loan Forgiveness.  If you teach for 10 years you can have your loans forgiven. The 10 years starts after 2007, but you have to get your teaching certified, so if you didn't already, that could be a challenge.

This applies to your husband too.

As for your payment amount, you can switch to an income based repayment plan, PAYE or IBR. It will lower your payment to less than 10 or 15% of your discretionary income. Then, combined with PSLF, you'll get forgiveness after 10 years.

Sorry that the FedLoan servicing representative didn't communicate that better to you. If you don't want to talk to them, you can sign up for all these programs on StudentLoans.gov. It's usually easier to do it this way.

You can learn more here:
- PSLF: http://www.forbes.com/sites/robertfarrington/2015/04/27/understanding-public-service-loan-forgiveness-pslf/
- IBR or PAYE: https://thecollegeinvestor.com/11856/secret-student-loan-forgiveness/
512
I've never heard of them, but that doesn't mean anything. What really matters is what are you looking to do, and what are they charging you for? Share and we can help!

**If you want to cancel, you need to call them and cancel, and ALSO call your lender and revoke any power of attorney they may have filed.
513
Yes, if her loan is in default and passed to a creditor, then it means she hasn't been paying it. But you said she is paying $13 per month? So a little confused there.

If she wants to get back on track, she needs to rehabilitate her loans. There's a specific process she needs to follow, outlined here: https://studentaid.ed.gov/sa/repay-loans/default/get-out

Once she rehabilitates her loans, she can get back on an income-based payment.
514
Given that her income is so low, if she's on IBR (Income-Based Repayment) or PAYE (Pay As You Earn), her payments could be as low as $13. What makes you think they will garnish her wages or tax refund?

They only garnish if her loan goes into collections, and as long as she is making payments, they won't do that.

Plus, if she's on IBR or PAYE, she will get loan forgiveness after 20 or 25 years. She'll owe taxes on the amount forgiven, but that's still a good deal.

Finally, bankruptcy won't help because you can rarely (i.e. in 99.9% of situations) get student loans discharged because as long as you have any potential to earn income, you'll be able to make some type of student loan payment.
515
Want to follow an interesting discussion on medical school student loan debt? Here's a great reader question and what to do with your loans:

Dealing With Medical School Debt
516
If you're looking at private loans, which isn't recommend right away, the best way to do it is to use a service like Credible, which compares student loan lenders to get the best rate.

With private loans, it's all based on your credit score. The better your credit score, the better your loan.

But you're absolutely correct about how awful private loans are. They don't make sense for most people.
517
Student Loan Scams / FedLoan Class Action Lawsuit
July 23, 2015, 02:10:16 pm
I wanted to share this comment because a lot of readers have asked about contacting a lawyer.

If you've been mislead by FedLoan Servicing when it comes to your loan, and are considering a lawyer, this firm is looking for people who've specifically have issues with FedLoan.

Check out the comment here: https://thecollegeinvestor.com/157/fedloan-servicing-the-worst-student-loan-servicer/#comment-274479
518
Well, as it sounds like they tried to explain, they are a paperwork processing company. Somehow you were on their list of people to call (the company buys your name and phone number from other companies), and based on what they think your income is, you might qualify for $0 payments under a plan called IBR.

The truth is, you don't have to pay this company anything to get that same payment. If you sign into your student loan account on StudentLoans.gov, you can sign up for IBR for free. The website will calculate what your payment will be based on your AGI from your taxes you filed. If it's low enough, it will be $0. Either way, your maximum payment will be 10% of your discretionary income.

Don't pay for a service you don't need.
519
Earn More Money / Re: Jobs for SAHM
July 20, 2015, 09:24:57 pm
Not my forte, but check out this awesome post from another blogger I trust: http://singlemomsincome.com/50-legitimate-work-home-job-opportunities/
520
Investing / Re: How to Invest $250 per month
July 20, 2015, 09:24:00 pm
This is really a personal preference question. I personally prefer to invest by putting the amount into my account, and then investing it in a lump sum. I typically use that lump sum to rebalance my portfolio once or twice a year, but I've also used it to take advantage of market opportunities as well.

Here's a full breakdown of the pros and cons of investing monthly versus lump sum investing: https://thecollegeinvestor.com/1332/invest-lump-sum-small-chunks-dollar-cost-averaging/

If you want to invest monthly, there are ways to do it without incurring large fees. The two most popular ways to do it are through Betterment and Capital One Investing.

Betterment is what's called a Roboadvisor, where they will setup an ideal portfolio for you. If you commit to investing $100 per month, you pay no monthly fees, just a 0.35% annual fee on your account value until you reach $10,000, then 0.25% after.

Capital One Investing (formerly Sharebuilder) is an online broker that has an automated investing plan, where if you commit to automatically invest each month, you can have $3.95 commissions for each investment. However, they also offer a lot of no-cost ETFs and mutual funds, in which case the investment is free.
521
For Parents / Re: Saving for Kid's College
July 20, 2015, 09:08:24 pm
I think it all depends on your own goals. If saving for your children's college is really important to you, a 529 is the best way to save for college. If you have other goals, such as  buying a house or will need a car soon, saving and investing in a taxable account makes sense.

Remember, it never has to be an either/or issue - balance works well too. Split the difference into both a 529 and taxable account if you have competing priorities and can't choose.
522
Sorry, but once you've graduated, you aren't eligible for any type of loan cancellation for school closure.

The fact that it closed after you attended, regardless of the reason, doesn't change the fact you have to repay your loans.

The only time you're possibly eligible is if your school closes and you can't transfer any of your coursework or move schools. It's very very rare.

As for the company, I've never heard of them. Anything they are offering to do, you can do for yourself for free at StudentLoans.gov.
523
It's still a proposal open for public comment. There hasn't been anything official beyond that. If it does happen, though, it will take place retroactively to all loans after July 1, 2015.
524
There are a few student loan repayment programs that can dismiss your student loan debt after making payments of 20 or 25 years - Income-Based Repayment (IBR) and Pay-As-You-Earn (PAYE).

As for the new legislation, President Obama recently proposed changing the way all income-based plans work, merging them all into PAYE and changing the forgiveness amounts as well. Here's a full breakdown of how that looks.
525
Ask a Question / Re: Drowning in Debt - Next Steps?
July 19, 2015, 01:39:01 pm
The best place to start is to make sure that you're on the best repayment plan for your income. If you've never touched your repayment plan, you get defaulted in the Standard 10 year plan. If that's too expensive, you could look into an income based plan, such as IBR or PAYE.

You didn't say what your job was, but if it is in public service at all, you should look at Public Service Loan Forgiveness. Your husband won't have any forgiveness plans available in his field, but you might.

Hopefully by changing your repayment plan you can set yourself up for success.