Messages

I responded to your other question, but what is the real company's name? It's not Fedloans. It's likely Federated Loan Servicing, which is not associated with the Department of Education at all.

Remember, the Department of Education and FedLoans or Navient will NEVER call you - they will only contact you my mail or via the secure electronic messaging system on their website. Anyone claiming otherwise on the phone is a big red flag.

The DOE uses FedLoan Servicing, a specific company. Federated Loan Services is a company that uses a similar name, but isn't associated with the Department of Education in any way.

IBR is a Federal program, and you can sign up for it for free on StudentLoans.gov.

PSLF is another program, and you can get the forms you need on StudentLoans.gov, but you can't apply for forgiveness until you've made 10 years of qualifying payments.

The difference is this 3rd party company will charge you to do it, while StudentLoans.gov is free. Why pay $799 when you can do it for free? If you have that much to spend so easily, put it towards your student loans!

Please don't give them your email or do anything with them. What are you looking to do?

Anything this company is offering you, you can do for free by logging into StudentLoans.gov. So what were they offering and what are you looking for?

All of these companies should be avoided!

You can do the same thing yourself by logging onto StudentLoans.gov and clicking "Income-Contingent Repayment" on the sidebar. You'll fill out some information, and they will lower your payment to the IBR or PAYE plan, if you qualify.

These companies literally charge you $799 and other fees to simply do that.

Have you logged onto StudentLoans.gov yet and tried?

Is real in regards that they want you to pay $599 - but that program is just something they made up as a label for their product.

If you want to switch to IBR, you just login to StudentLoans.gov and click the link on the left sidebar. It's free, and it takes about 15 minutes.

So, bottom line, just do it yourself.

Wow a processing fee of $1,400 is in the top 3 of most expensive fee's I've ever seen (and I've helped hundreds of people). Don't do it!

All you have to do is go to StudentLoans.gov and select Income-Contingent Repayment plan application on the sidebar. If your income is low enough, you'll qualify for IBR or PAYE, and your payments will be $0 per month and you'll get forgiveness after 20-25 years.

Read more about these plans here.

Bottom line = not worth it.

True student loan consolidation doesn't require any type of fee. This means she signed up with a company, not the Department of Education. I would cancel anything she is doing with them, and go to StudentLoans.gov to sign up for consolidation for free.

Before you go through with any type of company offering to help you with your student loans, please read through this checklist:

How To Tell If Your Company Is A Student Loan Scam

The guide will walk you through the most common scams, the typical words and phrases they use, and more.

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/

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.

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.

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.

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

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.

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