Last post by Kady_Draper - November 06, 2020, 01:04:26 am
First, six months in an emergency fund is nothing. Bump it up to nine or 12 months. Many experts throw this 6-month number around, but it's not realistic. If, God forbid, something really adverse happens to you (job loss, disability, a relative needing help, etc.), you wouldn't survive with 6 months.
Second, go with ETFs and do automatic investment. The fees are way lower than on mutual funds, and ETFs give you great diversification. You're in your 30s, so you got plenty of time to enjoy double digit returns over, say, 20-30 years until retirement.
Last post by Kady_Draper - November 06, 2020, 12:57:19 am
Maybe you need to seek help on your case: either a (free) student loan counselor or pro bono attorney, so you can see things clearly. Normally, qualified (and non-qualified) education loans can be discharged, depending on your circumstances. It looks like you took out the loan around the financial crisis of 2008. Who was the lender?
It's important to know because bankruptcy laws don't make it easy to get your student loan debt eliminated, but it's possible to discharge student loans in bankruptcy if you meet a high bar. Specifically, you have to prove repaying your loans would be an undue hardship.
While different courts use different tests to evaluate whether repayment is an undue hardship, many use a version of the Brunner test. There are a few parts to it, including whether you've made a good faith effort to pay your loans, whether you'll be able to maintain a reasonable quality of life if you're made to repay them, and whether repayment difficulties are likely to persist for a long time.
Who did you borrow from? Most loans are qualified education loans IF they are only used to fund education. Examples of non-qualified education loans are credit cards, personal loans with other uses, etc.
Technically, any private loan that was only used to fund education is considered a qualified education loan.
Finally, even qualified education loans can be discharged in bankruptcy. It's just rare because you have to pass the Brunner Test for undue hardship. See this: Bankruptcy and Student Loan Debt.
Last post by mdarby - October 22, 2020, 05:04:11 pm
So I made a terrible choice to take out private students loans in 2008-09 and now they have of course ballooned to being huge. One is 175k and the other is 50k. Ive been doing research and have been finding information on Qualified Education Loans and how not all student loans are qualified education loans and I believe my student loan may fit that. I filed a bankruptcy in 2012 and was just told "student loans cant be discharged" so I didn't question anything. Now Im being told that only Qualified Education Loans can not be discharged and that not all private student loans qualify as that. It seems as if my student loans do not meet the criteria for Qualified Education loans based on what Ive researched. NOw i need to know what to do next. Does anyone have any information on this?
Last post by navientsux - October 22, 2020, 08:08:17 am
You've been very helpful in narrowing down my options. I am left with getting a Direct Loan or knocking most of it out with my 403B. I have no dependents, and I can't help but think about the chance that I don't even live to retirement. Live for the moment type stuff. Thanks for everything!
Oh man... that breaks my heart you're eligible for PSLF. Your FFEL loans don't qualify for PSLF, and you could have had your debt forgiven already (based on it being more than 10 years since PSLF existed)...
With that said, if you want to go for PSLF, you must consolidate. You need Direct Loans.
Also, if any forgiveness program does come to pass (it likely won't, but hey, we can hope), it also will likely only apply to Direct Loans.
Last post by navientsux - October 21, 2020, 08:24:48 am
This is all great information. Thank you so much! I work for a non-profit, but I have been lax in getting PSLF. Would I be eligible for the potential 10,000/year forgiveness proposed by Joe Biden if I got a Direct Loan and initiated PSLF?
Well, remember, you owe the debt to the US Taxpayer. Navient is just a servicer. The technical way Navient (and all loan servicers get paid) is roughly $2 per loan per month. That's it. They don't get paid your interest or anything.
With that being said, you can re-consolidate your loans today. They'll become Direct Consolidate Loans. They'll be eligible for the current Covid-19 pause. They'll also become eligible for programs like PSLF.
However, based on your repayment plan, you could be on the road to loan forgiveness already (plans like IBR include loan forgiveness after 25 years). When you consolidate, you're taking out a new loan. Any past history goes away, so any payments you made prior no longer count.
There are trade-offs with both, and the choice is personal based on your situation, income, etc.