Recent Posts

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Ask a Question / Navigating the Best Repayment Plan

« Last post by brefern20 on February 20, 2019, 08:47:37 AM »

Hey there 

I'm looking for the best repayment strategy to pay off my student loans in a stress-free manner over a period of time. I'm not the type to lose sleep over paying off my student debt in the quickest amount of time. I would say I'd like to focus on a strategy that allows me to live comfortably, and gives me a plan of attack I can stick to. Thus far, I have paid my IBR payments on time, but would like to make sure this is the best course of action. I'm well aware that I can be forgiven after 25 years if I pay consistently, but I'd like to cut this time in half.

Here are the specifics: I am 27 years old/Married/ 130k in debt/all federal loans (12 in total)/highest interest is 7.21% at 27k/lowest interest 3.4% at 4k/if were to consolidate all loans the interest would be 6.25%/My IBR payment is 179$ based on my previous 55k income/My new income is 80k and plan to make 120k within 3 years/I have 25k in assets (401k/investments/savings).

WWYD, factoring in refinancing/IBR/consolidation/snowball method/avalanche method and all that jazz.

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Student Loan Forgiveness / Re: Start Here: Student Loan Forgiveness

« Last post by TheCollegeInvestor on February 18, 2019, 06:57:57 AM »

These loan forgiveness programs only apply to American Federal student loans.

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Ask a Question / Re: My Significant Other's Secret

« Last post by elsegundo on February 16, 2019, 01:00:54 PM »

Okay that gives me some much-needed perspective. Budgeting could work wonders.

We've been better about cutting corners and finding little ways to save over the last month or so. So definitely want to do more of that.

I haven't heard about Mr. Money Mustache, but I will check out the link. Advice from someone who's been through a situation like this is what I need.

Thanks for posting!

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Ask a Question / Re: My Significant Other's Secret

« Last post by TheCollegeInvestor 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: https://www.mrmoneymustache.com/2018/12/31/divorce/

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

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Ask a Question / My Significant Other's Secret

« Last post by elsegundo on February 16, 2019, 08:35:32 AM »

I’m almost 10 months into one of the best relationships I’ve ever been in and my girlfriend recently revealed a dark secret. She has about $60k in student loans.

What’s even more shocking is that she’s just paying the minimum monthly payment. While she takes full responsibility for her debt and isn’t asking me to help, I’ve suggested to her that she should be attacking them more aggressively and saving on interest.

I see a bright future for us long-term and I really don’t want this cloud hanging over us. I don't have any student loans, but this situation stresses me out and I want to help. I am virtually debt-free (outside of about $1,500 in credit card debt). My uncle is a financial advisor, but I definitely don’t feel like it’s my place to share her financial situation with him and it would be awkward if I referred her.

She definitely needs a plan. Should she just call Navient and get some advice?

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Ask a Question / Re: Defaulted Student Loans in Collections - Really Need Help

« Last post by TheCollegeInvestor on February 13, 2019, 10:21:59 AM »

Is all of the above correct?

Yes, you have a pretty solid grasp of it. See this article: https://thecollegeinvestor.com/22174/student-loan-default/

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.

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Ask a Question / Defaulted Student Loans in Collections - Really Need Help

« Last post by CuldesacElephant on February 12, 2019, 04:00:13 PM »

My student loans (all federal) have been in default for a long while (since April 2016), and I am extremely scared about my current situation. I’d really appreciate some confirmation and any other help.

Yesterday I got a letter in the mail from a company called Alltran (it was dated Feb 5, 2019) about my student loans, specifically the Perkins loans I got from my university. I did some research and found out they are a collections company that my university gave my loans to. They said I have 30 days (Mar 7, 2019) to “dispute the validity of the debt”. I have not responded to them yet.

I’ve been up reading random articles for about 12 hours now, and I think I now understand how to get out of default.

From what I understand, there are two ways to get out of default (aside from paying everything in full): consolidation or rehabilitation.

Consolidation doesn’t cost money, but can take 2 to 3 months to process, and you aren’t eligible if you have wage garnishment. Your defaulted loans will stay on your credit report.

Rehabilitation is where you contact your loan servicers, tell them you want to rehabilitate the loan, and agree to a monthly payment that you must make on-time 9 months in a row, after which your loans are out of default. Your defaulted loans are removed from your credit report.

After using one of those two methods and your loans are out of default, you are then eligible for IBR (or other income-driven repayment programs) and can get a monthly payment as low as $0.

Is all of the above correct?

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.

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

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.

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?

I will try to respond to any questions that come up, but I have been up for a very long time stressing out and reading about all this, so it is likely that I will fall asleep very soon and won’t see any responses until tomorrow.

Below is my background/situation if anyone is interested. You can ignore it if you want.

I don’t have a job, my family is poor, and I have $50,000 in defaulted federal student loans (none of them are private). I made some really stupid decisions in college and hung out with some people who had a negative influence on me. I dropped out of college in 2014 and couldn’t find a job, and I soon spiraled into deep depression. Part of the depression came from my student loans. No one in my family went to college, and no one in my family knew anything about finances, loans, or anything like that. Since I had zero clue about anything and I had no one to guide me, I ended up defaulting. I didn’t know what the word default meant until I was in it. Of course, if I knew what I do now, I would have applied for IBR after dropping out. I ended up with a minimum wage job a while back that treat me like crap that made my depression worse, and after about two years I quit and moved in with my grandma. That was in 2016, so I’ve been living with her for almost three years now. My depression kept getting worse and worse, and I kept getting rejected from jobs. Fast forward to today, and I’ve decided to become a web developer to lift myself out of poverty. I’ve been learning programming for a couple months now, I’m really enjoying it, I’m actually sticking with it, and I haven’t been depressed since I now have a goal to strive towards. But now I have this collections company looming over me, I’m extremely stressed out, and I’m starting to get extremely depressed again.

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Ask a Question / Re: Parent plus loan

« Last post by TheCollegeInvestor 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: https://thecollegeinvestor.com/17101/options-if-you-cant-afford-your-parent-plus-loans/

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.

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Ask a Question / Parent plus loan

« Last post by Cg020763 on February 11, 2019, 06:02:08 PM »

We are in. Oh trouble, we have 140k I parent plus loan from our kids.  They can barely survive and we only make 90k with car loans mortgage 60 and 56 years old and  no savings.  How could we ever make the payments well over 1k a month at best case scenario.  What can we do?

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General Discussion / Great Lakes invoice looks like junk mail

« Last post by frawleym on February 11, 2019, 06:33:23 AM »

I'm looking for advice on how to make Great Lakes print "This is your student loan invoice" on the envelope the invoice arrives in.  Our daughter lives elsewhere but receives tons of junk mail at our (her parents') home.  For two months we ignored an envelope that arrived with nothing more than the Great Lakes logo and a return address.  Just the logo with the two words:  Great Lakes.  We thought it was a donation request from a conservation organization. It turns out the envelopes contained our daughter's loan invoice and we didn't realize what was happening until we received a default notice.  We paid off the loan immediately but now our daughter has a "borrower serious delinquency" notice on her record, her credit is ruined, and she is unable to get a loan anywhere.  I am not naïve enough to think Great Lakes will do anything to help us restore our daughter's credit rating.  My goal is simply to get Great Lakes to put the words "This is your student loan invoice" on the front of the envelope so that other unsuspecting junk mail recipients don't ruin their credit rating, too.  My power company and others put "This is your invoice" on the front of their envelopes; what is Great Lakes hiding from and why are they hiding?