How to Repay Student Loans When You Don’t Know Where to Start

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How to Repay Student Loans When You Don’t Know Where to Start
If you graduated from college this year, congratulations!  Also, your first student loan payment is due. (Cue sad trombone.) If you borrowed federal student loans to cover your college expenses, you get a six-month grace period from Uncle Sam before he starts pestering you for payment. If it’s any comfort (I know, it isn’t), you’re not the only one who owes. Outstanding student loan debt clocked in at $1.48 trillion in the second quarter of 2019, according to the New York Federal Reserve. It’s easy enough to feel overwhelmed — you just graduated, started that first job (hopefully), moved out of your parents’ place and into your own (maybe).  But besides the obvious benefit — getting out of debt — making on-time student loan payments will reflect well on your credit score, which will follow you long after your dorm life memories have faded.  Ready to tackle that student loan debt? Good, let’s get started. A Guide to Student Loan Repayment  When you’re ready to start repaying your student loans, it’s best to create a plan to avoid wasting time, money and energy. Here’s what you need to do before you make that first payment. 1. Know How Much You Owe and Who You Owe If you’re like most grads, you took out multiple student loans over your multi-year college career — the average borrower has 3.7 student loans, according to a 2017 Experian report.  So it’s best to start organizing by figuring out who you owe, how much you owe and when it’s due. Oh, and interest rate is important, too. Need some help figuring it all out? Then check out this article that explains how to find out how much you owe in student loans. 2. Pay Off Your Interest Before the End of Your Grace Period If you have the cash, pay off at least the accrued interest on your federal student loans before your grace period runs out. It can save you a bundle of money by helping you avoid interest capitalization — when the interest gets lumped in with your principal amount and you start getting charged interest on the total amount. Wondering where to find extra money before the deadline? Consider taking up a side hustle to make some extra cash to throw toward the payment. 3. Come Up With a Plan… a Repayment Plan Didn’t land that six-figure job — or maybe any job? Rather than sticking your head in the sand and avoiding your student loan payments, you need to ask for help. That means getting yourself on an income-driven repayment plan. These plans cap your monthly payment typically somewhere between 10% and 20% of your discretionary income. Contact the loan servicer for your loan to find out which plans you can qualify for. 4. Think About Forgiveness It’s possible that you can get your student loans forgiven. But it’s not easy or fast… or likely (cue the second sad trombone). But if you work in specific fields — like teaching or nursing — you could be eligible for loan forgiveness after a set number of years. There are typically a lot of hoops to jump through — including making sure your loan repayment program and your employer qualify — so be sure you know the requirements of your forgiveness program. FROM THE DEBT FORUM Balance transfer credit card 11/27/19 @ 6:39 PM Credit card Debt 11/19/19 @ 3:56 PM Student loans 11/20/19 @ 2:17 PM Debt collections 11/23/19 @ 5:57 PM See more in Debt or ask a money question 5. Avoid Delinquency and Default Remember that part where I told you not to stick your head in the sand? This is why: If you miss your payment by even one day, your federal loan becomes delinquent. If you’ve missed payments on your Federal Family Education Loan (FFEL) or direct student loan for 270 days, your loan is considered to be in default. If you can’t afford your monthly payment due to unemployment or an approved economic hardship, you might qualify for deferment or forbearance. You can also qualify for deferment if you’re enrolled in an approved graduate fellowship program. During deferment, you won’t owe monthly payments on your federal loans and your subsidized loans won’t accrue interest (but all the rest will).  A high or good credit score allows you to qualify for better loans and credit cards with lower interest rates and more favorable terms. A poor credit score may not even qualify you for a loan. If you don’t qualify for deferment, the other option is forbearance, during which your lender allows you to stop making payments or reduces your monthly payments for up to one year. However, during forbearance, interest will continue accruing on all of your loans. Both options are only temporary fixes, and you’ll probably end up owing more money in the end. But at least you won’t wreck your credit score. 6. Consider Life After College (and Student Loans) It can be tough to see beyond that soul-crushing debt, but remembering that there is more to life than student loans is important for your financial future. First, while throwing every available dollar at your student loan might help you feel like you’re making progress in that arena, don’t sacrifice your present financial state by pillaging your emergency fund (you have one, right?). It’s there to cover those unexpected expenses — like a new set of tires or unexpected vet bill — without sending you into credit card debt.  Additionally, you shouldn’t sacrifice your future for today’s debts. Instead of paying every dollar toward student loans, start saving for your retirement now. With plenty of years to go, you’ll be able to build an impressive nest egg future you will thank you for.  Bonus: Socking away your money in a 401(k) or IRA reduces your taxable income. So if you do decide to apply for an income-driven repayment plan, the federal government won’t count the money you’re saving for retirement. Cue the big brass band. You deserve it. Tiffany Wendeln Connors is a staff writer/editor at The Penny Hoarder. Read her bio and other work here, then catch her on Twitter @TiffanyWendeln. This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017. [...]
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Over 50 and Still Owe on Student Loans? Here’s How to Get Debt Free

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Over 50 and Still Owe on Student Loans? Here’s How to Get Debt Free
Student loan debt isn’t reserved for the young. In fact, it’s becoming a bigger problem for those well beyond the traditional campus quad years. Of the $1.5 trillion student debt Americans owe, people age 50 and older owe 20% of it — $289.5 billion. And borrowers 62 and older held $72.9 billion in outstanding federal student loans, up $10.4 billion from the previous year, according to the U.S. Department of Education. Why so much? The majority of the loans are for children’s and grandchildren’s education, although some of it is also for career changers taking out later-in-life loans for their own education. Unfortunately, with the prospect of retirement on the horizon, there’s a lot less time to pay off those student loans, and there can be painful consequences if you don’t — including having your Social Security wages garnished. If you’re among those who are closer to retirement than the legal drinking age, we have solutions for dealing with student loan debt when you’re over 50. Paying Off Student Loan Debt After Age 50 Everyone has their own reasons for staring down student loans when they’re on the verge of retirement. And while we have plenty of strategies for paying off student loans in general, we’re here to address some of the most common scenarios that lead to student loan debt after 50 and offer tips on how to pay them off. 1. You Took Out Federal Student Loans  You may have heard this before: Your kids can borrow for college, but you can’t take out loans to retire. Regardless of whether you took out federal loans for your own education or your kid’s, saving for retirement should still be a priority. In fact, it could potentially save you thousands on student loan repayments.  If you have federal student loans, you can qualify for an income-driven repayment plan, which calculates your monthly student loan payments based on your income. But your contributions to a 401(k) or IRA are pre-tax dollars, which reduce your salary in the eyes of the federal government. And a smaller salary reduces your monthly student loan payment. Depending on the repayment plan, after 20 to 25 years of on-time payments, the remaining balance will be forgiven, although that amount will be counted as taxable income. “If that’s the case, you’re in your 70s — your income traditionally is lower,” said Amy Irvine, a Certified Financial Planner and founder of Rooted Planning Group. “So you may end up paying less income tax on the amount that’s forgiven with the income-driven plan than you would have if you had made the full payment.” Pro Tip If you’re 50 or older in 2020, you can contribute up to $26,000 to your 401(k) and up to $7,000 to your IRAs. Another option for socking away money to lower your taxable income: a Health Savings Account. In 2020, you can contribute up to $3,550 as an individual or $7,100 as family to an HSA if you have a high-deductible health plan. And as a bonus, you’ll probably appreciate the extra money for health care as you continue to get older. “One of the biggest reasons that a financial plan ‘fails’ in retirement is because of medical expenses,” Irvine said. 2. You Took Out (or Co-Signed) Private Student Loans If you have a private student loan staring you down — either ones you took out or that you cosigned for your student — you’ll need to get a little more creative when it comes to paying it back. Because it isn’t a federal loan, you typically do not have the income-driven options that the federal loans offer. However, it doesn’t hurt to call your lender and ask about extended payment plans. Other options: Consider refinancing the loan or taking out a personal loan with a lower interest rate, which can save you money over the life of your loan.  Pro Tip If you’re married and one partner earns significantly more, ask your tax adviser whether filing your taxes as “married filing separately” could help you qualify for an income-driven plan. If you own your home and car, consider using a home equity loan rather than taking out a loan against your vehicle, Irvine advised.  “[Your home] is a more stable asset than a car that’s depreciating,” she said. Regardless of the strategy you choose, the ultimate goal should be to get the payment low enough so the student can take over the payments — and eventually the loan — themselves. 3. You Have Multiple Loans With High Interest If you have federal and private loans, you may be looking for a one-stop solution, like consolidation. However, that could negate some of the benefits you get with federal loans. “Federal loans are dischargeable if the borrower is permanently disabled or dies,” said Joseph Valenti, senior policy advisor with the AARP Public Policy Institute. “Doing the private refinancing means losing some of those rights and options.” However, that doesn’t always mean holding onto high-interest loans for death and disability benefits is the best option financially, Irvine noted. “Let’s say you’re paying 7% on those direct loans, and you can go out and refinance those into a private loan for 3%,” she said. “Then you may want to up your disability policy so that you know you have the money to repay that loan or take out a life insurance policy so that if something happens to you, the loan can be paid off.”  4. You’re Paying Your Child’s Federal Student Loans So there’s the obvious answer to this one: Tell your kid to start footing the bill for their own student loans. But you’re a parent (or grandparent), not some heartless thug. You want to help your kids if they can’t afford those astronomical student loan payments. But your offspring can still do their part to help by getting themselves on an income-driven repayment plan. “Even if the parent or grandparent has to make that minimum payment, it’s still much better than the full payment,” Irvine said. FROM THE DEBT FORUM Debt collections 11/23/19 @ 12:57 PM Student loans 11/20/19 @ 9:17 AM Paid off Debt, however Credit Score stayed the same....Why? 4/23/19 @ 7:10 PM Credit card Debt 11/19/19 @ 10:56 AM See more in Debt or ask a money question 5. Your Kids Are Heading to College and You Still Owe on Your Own Student Loans If your kids have dreams of campus life, but you’re still paying for your own college years, it’s best to come up with a strategy before they start applying. Scholarships and part-time jobs during the school year and summer jobs can help your child put a dent in their debt, giving them a better chance to manage their repayment without your help. But your strategy for paying off loans could also require a little creativity — and working with your kid’s prospective school. “One of my clients had a really high interest rate student loan that they were repaying,” Irvine said. “We actually used the Plus loan to pay off their loan, and then figured out how to do an installment payment to the college to get the student’s tuition covered.”  6. You’re Ignoring the Problem This one is on you. It’s stressful, it’s confusing and sometimes unfair, but ignoring the debt is the worst mistake Irvine said she sees clients make. “They don’t know what th [...]
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How Do Bank Loans Work?

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How Do Bank Loans Work?
Bank loans work similarly to personal loans you get from online lenders: After you apply, the bank will review your credit score, history and income to determine how much money to loan you and what annual percentage rate you qualify for. Once you get the loan, you’ll pay it back in monthly installments. Bank loan... Annie Millerbernd is a writer at NerdWallet. Email: amillerbernd@nerdwallet.com. The article How Do Bank Loans Work? originally appeared on NerdWallet. [...]
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Can You Transfer Private Student Loans to Federal Loans?

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Can You Transfer Private Student Loans to Federal Loans?
Federal student loans can become private loans via refinancing. But there’s no way to transfer private student loans to federal. Borrowers who refinance federal student loans into private loans cannot undo this move and should understand its risks. Can you combine federal and private student loans? You can combine federal and private student loans, but... Ryan Lane is a writer at NerdWallet. Email: rlane@nerdwallet.com. The article Can You Transfer Private Student Loans to Federal Loans? originally appeared on NerdWallet. [...]
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Overwhelmed by Student Loans? Find Some Relief With Debt Forgiveness

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Overwhelmed by Student Loans? Find Some Relief With Debt Forgiveness
Ever wonder what life would be like if you could make your student loans disappear? It’s possible, but it isn’t magic.  Or immediate. Or easy. Or likely. (Sorry.) But considering the mounting pile of outstanding student debt in U.S. — at $1.5 trillion, student loans were the largest non-mortgage source of household debt in 2018 — we should at least consider every option for wiping it out, right? If your student loans have become more than you can handle, seeking forgiveness or discharge of your debt could be an option. Check out this Penny Hoarder guide to student loan forgiveness so you’ll know all your options. Understanding Student Loan Forgiveness, Cancelation and Discharge Before we dig into individual programs, let’s cover the ground rules. First, a word about words: Forgiveness, discharge and cancellation essentially mean the same thing when you’re thinking about your student debt — they mean you no longer have to pay the remaining balance on your loan — but the terms are usually applied in different circumstances: Forgiveness is usually used in cases where you qualify because of your job or employer.  Discharge typically refers to other reasons for not paying the debt, such as your financial situation.  Cancellation is a more general term that often covers both. All of the programs covered here are only available for federal student loans, not private student loans. And depending on the program, there are requirements for which types of federal loans qualify. Additionally, these programs typically take years to qualify for — sometimes as much as 25 years. There’s one exception to this rule, but it’s probably the least desirable way for getting rid of your debt. (Spoiler alert: It’s death.) Many of the options depend on your job. If you work in public service or choose a specific profession, you can receive forgiveness for a loan after a specified amount of time, during which you must document your employment. If you don’t have a job through which you can receive loan forgiveness, your other choices for forgiveness or discharge become limited to income-driven options or extreme circumstances, like becoming permanently disabled or your school closing. Additionally, although you might celebrate wiping out your student loans, understand that you might be trading your student loan debt for a big tax bill, depending on the program.  Pro Tip If you borrowed before July of 2010, you’ll need to consolidate your loans to qualify Public Service Loan Forgiveness and some income-driven repayment plans. In general, if your loan is wiped out because you worked in public service, you won’t owe federal taxes. And if you die or are permanently disabled, you don’t owe taxes on the forgiven amount (and neither do your survivors). Pretty much everyone else can expect to get a bill from Uncle Sam. But even if your forgiveness isn’t subject to federal taxes, you could still be on the hook at the state level, so find out beforehand whether you’ll be liable for taxes and plan accordingly. We’ve broken down the programs by work and non-work qualifications. We’ve also included “scam alerts” throughout since, unfortunately, there are plenty of unscrupulous individuals and companies out there who prey on the unsuspecting and often desperate people overwhelmed by student loan debt.  With that in mind, let’s dive in. Student Loan Forgiveness Based on Your Job If you’re committed to a life of helping others, whether it’s by working for the government or a non-profit or by choosing a public service profession, you could qualify for student loan forgiveness. This is not a commitment to be taken lightly, as it means you’ll have to ensure that your loans qualify, stay current on your payments throughout the process and stick with a job that qualifies for forgiveness.  And while you may graduate ready to give back through a career in public service, a lot can change over those qualifying years — whether it’s adding family responsibilities to the mix or simply realizing you don’t like your job. Pro Tip Scam alert! It’s illegal for anyone — including companies that offer to “help” you repay your student loans — to ask for your federal student aid user name and id. Never give that info out. “There is danger and risk with that because you don’t know what is necessarily going to occur,” said Melinda Opperman, executive vice president at Credit.org. “What if you change professions halfway through and you don’t do the whole 10 years? Circumstances change.” If you do change your mind and switch to a non-qualifying job, you’ll be responsible for paying the remaining amount you owe. Public Service Loan Forgiveness The Public Service Loan Forgiveness program is probably the most well known, but for all the wrong reasons. Out of the approximately 76,000 PSLF applications that were processed by March 2019, 518 applications were approved. For those who didn’t major in math, that’s less than 1%.  And the program that was supposed to fix the problem — Temporary Expanded Public Service Loan Forgiveness (TEPSLF)? Yeah, it turns out the acceptance rate for that one nearly matches the original. Pro Tip Scam alert! When it comes to federal student loan repayment applications, there’s nothing a company can do for you that you can’t do for free on your own. But if you have your heart set on serving the public at a government or non-profit entity and are facing a mountain of student loans, then the Public Service Loan Forgiveness (PSLF) program may be the way to wipe out your debt. Be prepared for a long wait — it takes a minimum of 10 years to qualify — and to follow a lot of rules in regards to your loan and employment eligibility. To help you navigate the process, check out these seven essential questions to ask about Public Service Loan Forgiveness. Teacher Student Loan Forgiveness No one goes into teaching for the money. But when student loans leave you thousands of dollars in debt, scraping out the payments on a teacher’s salary can be downright overwhelming. Fortunately, there’s a specific Teacher Student Loan Forgiveness program for those who work in underserved communities and/or subject areas.  Forgiveness will be dependent upon where you teach, what you teach and how long you teach, and the maximum amount you can receive is $17,500. But you can discover additional options for graduating from student debt with these teacher student loan forgiveness programs. Nursing Student Loan Forgiveness Medical debt can be an additional burden for students, so nursing student loan forgiveness offer some help with the debt.  In addition to a couple of specific loan-forgiveness programs for nurses, you can also find debt relief through programs at some hospitals. Eligibility requirements can include holding an advanced degree, having a specific loan type or working in a specialized department.  Other medical professionals, including doctors, can find student loan relief at the national and local level through the Association of American Medical Colleges. Perkins Loan Forgiveness The Perkins loan program program ended on Sept. 30, 2017, but you’re still on the hook for paying off any of the Perkins loans you took out. That said, if you work in public service — including teaching, law enforcement and the military — you could qualify for a partial or total discharge of your Perkins loan.   Depending on your career, you could receive 100% loan cancellation for five years of service, which is distributed in annual increments. FROM THE DEBT FORUM Student loans!! 8/9/19 @ 1:07 PM J My debt 9/23/19 @ 12:05 PM [...]
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Got Perkins Loans? Here’s How 5 Years in Public Service Could Wipe Them Out

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Got Perkins Loans? Here’s How 5 Years in Public Service Could Wipe Them Out
The Perkins loan program may be history, but that doesn’t stop it from haunting your present. Perkins loans were student loans designed for undergraduate and graduate students who showed exceptional financial need — the loans charged 5% interest, and you had 10 years to pay them off.  The program ended on Sept. 30, 2017, but you’re still on the hook for paying off any of the Perkins loans you took out.  But if you’re working in public service, you could potentially have your Perkins loans canceled.  Like other student loan forgiveness programs, obtaining Perkins loan forgiveness is not an easy or quick process. But if it could mean the difference between paying back thousands of dollars in student debt, it could be worth your effort. How to Find Out If You’re Eligible for Perkins Loan Forgiveness To be eligible for Perkins loan cancellation, you must be working full time in a qualifying public service role (we’ll explain the discharge option a little later) and your loans cannot be in default. To default on federal loan repayment means you’ve failed to make your monthly payment for 270 days (nine months). Additionally, if you refinance or consolidate your Perkins loans, you are not eligible for this forgiveness program. We’ve broken down the options into categories based on how much of your loan can be forgiven and type of service. 1. Up to 100% Forgiveness The most comprehensive in terms of job options is for up to 100% loan cancellation for five years of service. The amount forgiven is granted in increments: 15% for the first and second years. 20% for the third and fourth years. 30% for the fifth year. This category includes the following professions: Teacher. To qualify for the Perkins Loan Teacher Cancellation, you must either teach at a low-income school or teach one of the following subjects: mathematics, science, foreign languages, bilingual, special education or another subject area that is facing a shortage of qualified teachers in your state. Employee at a child or family services agency. Faculty member at a tribal college or university (for service that began on or after Aug. 14, 2008). Firefighter (for service that began on or after Aug. 14, 2008). Law enforcement or corrections officer. Librarian with a master’s degree working at a Title I-eligible elementary or secondary school or at a public library that serves Title I-eligible schools (for service that began on or after Aug. 14, 2008). Nurse or medical technician. Professional provider of early intervention disability services. Public defender (for service that began on or after Aug. 14, 2008). Speech pathologist with master’s degree working at a Title I-eligible elementary or secondary school (for service that began on or after Aug. 14, 2008). If you’re an educator at a pre-K or licensed childcare program (for service that began on or after Aug. 14, 2008) or a Head Start program, it will take seven years to forgive the loan, which is granted in the following increments: 15% for the first six years. 10% for the seventh year. 2. Up to 70% Forgiveness AmeriCorps VISTA or Peace Corps volunteers can get up to 70% of their loans forgiven for four years of service. Cancelation is also granted in increments: 15% for the first and second years. 20% for the third and fourth years. 3. Forgiveness for Military Service Those who serve in the U.S. armed forces in a hostile fire or imminent danger pay area qualify for Perkins loan cancellation according to the following classifications: Up to 50% for four years for borrowers whose active duty service ended before Aug. 14, 2008. Up to 100% for five years for borrowers whose active duty service includes or began on or after Aug. 14, 2008. 4. 100% Discharge Discharge and forgiveness essentially mean the same thing — they wipe out your student loan — but a discharge is due to circumstances, while forgiveness is dependent upon your line of work. The following conditions are eligible: The school closed before the borrower could complete the program of study (applies to loans received on or after Jan. 1, 1986). The borrower is totally and permanently disabled. The borrower died. (Read more about a student loan death discharge here.) The borrower filed for bankruptcy — but only if the bankruptcy court rules that repayment would cause undue hardship. (That’s rare.) FROM THE DEBT FORUM Credit card debt 7/29/19 @ 5:18 PM F How to pay off medical bills? 8/29/19 @ 2:39 PM N Student loans!! 8/9/19 @ 1:07 PM J Payday loans - essential or evil? 2/27/19 @ 4:52 PM F See more in Debt or ask a money question How Do I Apply? To qualify for a Perkins loan cancellation or discharge, you’ll need at least one year of professional experience before applying (or one academic year for teachers).  Because your school is considered the lender (the federal government subsidizes the loan), you should contact your school (or its loan servicer) to obtain the forms and instructions for your Perkins loan forgiveness. Pro Tip Schools must automatically defer loans during periods when you are performing service that will qualify for loan cancelation — you do not need to apply for concurrent deferment.  Every school has its own application, but in general, you’ll need to fill out your personal information, your type and length of service, and certification from your employer. What Happens if I Receive Forgiveness? If you’re approved for Perkins loan forgiveness, the principal amount of your loan will be canceled incrementally according to the schedule associated with your forgiveness classification. Any interest that the loan accrued during that year will also be forgiven. What Happens if I Don’t Receive Forgiveness? If you’re denied Perkins loan forgiveness, all is not lost, particularly if you have other federal loans to consolidate. Consolidation disqualifies your loans for the Perkins loan forgiveness program, but by consolidating your Perkins loans, they then qualify for Public Service Loan Forgiveness. However, keep in mind that your Perkins loans must be paid in 10 years, so there’s a good chance you’d have your loans paid off before you reached the 10 years of service the Public Service Loan Forgiveness program requires.  Tiffany Wendeln Connors is a staff writer/editor at The Penny Hoarder. Read her bio and other work here, then catch her on Twitter @TiffanyWendeln. This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017. [...]
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How to Wipe Out Student Loans You Took Out Before You Became Disabled

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How to Wipe Out Student Loans You Took Out Before You Became Disabled
Tackling student loans is tough enough, but doing it when you have a disability adds another element of stress to an already difficult situation. However, if you develop a total and permanent disability after taking out federal student loans, you are eligible to have your debts forgiven.  The process for getting forgiveness isn’t easy and can take years to finalize, unless you’re disabled veteran (more about that later). But if you’re struggling to pay, the discharge of your student debt could be worth your effort. Here’s what you need to know before you apply. How to Get a Student Loan Disability Discharge The government isn’t going to wipe out your student loan for a minor car accident — and maybe not even a major one, according to Melissa Opperman, executive vice president at Credit.org. “If you have a significant disability that can be documented — and I mean documented — sometimes federal student loans can be forgiven,” said Opperman, who noted that you’ll be responsible for providing updated documentation throughout the monitoring period.  “If somehow you miraculously heal, then it’s not forgiven.” Which Loans Are Eligible? The total and permanent disability discharge (TPD) program is available for the following loans: Direct Loans (aka William D. Ford Federal Direct Loan Program) Federal Family Education Loans (FFEL) Federal Perkins Loans If any of your loans are in default and the government is garnishing your wages, the garnishment will continue until your TPD discharge is approved. Additionally, you can apply for the TPD program to forgive a Teacher Education Assistance for College and Higher Education TEACH Grant service obligation. Who’s Eligible for Disability Discharge? To qualify for the TPD discharge, you must provide official proof that you are totally and permanently disabled. There are three ways:  Veteran Affairs  Veterans who become totally and permanently disabled during their service automatically have their student loan debt discharged. Prior to August 2019, veterans still had to fill out the TPD Discharge application, but the process recently changed. Veteran Affairs will alert the Federal Student Aid office as to who are eligible veterans. The office will then notify eligible veterans, who will have 60 days if to decide if they want to decline the loan relief.  Why would you decline? Although the discharge isn’t subject to federal taxes, the discharged amount may still be considered income for state tax purposes. Additionally, accepting the disability discharge could make is more difficult to take future student loans. If you do not opt out of the program, your remaining student loan balance will be discharged and you’ll be reimbursed for payments made following the date of the discharge. Social Security Administration If you qualify for a discharge based on the Social Security Administration’s (SSA) requirements, the agency will notify the Federal Student Aid office.  The office will then send you the determination letter indicating your eligibility as well as a discharge application.  Along with your application, you’ll need to provide a copy of your SSA notice of award or your Benefits Planning Query indicating that your next scheduled disability review is within five to seven years from the date of your most recent disability determination. Physician’s certification A doctor of medicine or doctor of osteopathy/osteopathic medicine who is licensed to practice in the U.S. can certify that you are permanently physically or mentally unable to earn money in any field of work. How to Apply To apply for a TPD discharge, you’ll need to submit an application with accompanying documentation to Nelnet, the servicer that assists the U.S. Department of Education with the discharge process. After you contact Nelnet to request an application, the company will reach out to your loan holders to stop collections for up to 120 days.  This is considered your grace period to give you time to fill out and submit your application and supporting documentation, but if you do not submit your paperwork in the allotted time frame, your lender can resume collection activity. Pro Tip You only need to submit one TPD application to apply for a discharge of all your federal student loans and TEACH Grant service obligations. You can download a PDF of the application or you may request a TPD discharge application by email at disabilityinformation@nelnet.net or by phone at (888) 303-7818 Monday through Friday from 8 a.m. to 8 p.m. ET. Although the application is eight pages, the form that you are required to fill out is only about half a page, asking questions like your name, date of birth, contact info and Social Security number. The remainder of the application depends on how you received your proof of disability: If your determination came from the SSA, you’ll need to attach a copy of that documentation. You also do not need to provide a physician’s certification. If you are submitting a physician’s certification, your doctor must complete and sign Section 4 of the form. What If You Need Help Filling Out the Application? Dealing with all the paperwork can be an overwhelming burden to someone with a disability, so you can assign someone to help with the application. If you want to designate another person or an organization to represent you, you’ll need to complete the Applicant Representative Designation: Total and Permanent Disability form. FROM THE DEBT FORUM Guide to on-line debt consolidation 7/24/19 @ 11:19 PM Debt Reduction Plans? 7/31/19 @ 1:05 PM Student loans!! 8/9/19 @ 1:07 PM J STUDENT LOAN DEBT 8/5/19 @ 1:32 PM See more in Debt or ask a money question If you don’t have someone you can trust, reach out to a reputable source for professional assistance — and be aware of offers that allow the organization to profit off your misfortune, advised Heather Jarvis, a North Carolina attorney who specializes in student loans. “There are people who are professional financial advisers or attorneys or who work for non-profit counseling companies who might be able to help,” she said. “They aren’t in the business of trying to make money on people who owe money.” Once you submit your application via the website, email address, fax number or mailing address listed on the form, Nelnet begins the review process. What Happens After You Submit Your TPD Application? Three things will happen after Nelnet receives your application: Nelnet will tell the holders of your federal student loans or TEACH Grant service obligation to suspend collection activity; you will not be required to make payments at this time. However, if your loans are in default and your wages are being garnished, that will continue until your TPD discharge is approved. It will review the application and supporting documents. If you meet the eligibility requirements, Nelnet will forward your request to the U.S. Department of Education for a final decision. If your application is approved, Nelent will notify you that your loans and/or TEACH Grant service obligation have been discharged.  It will also instruct your lenders to return any loan payments received after the date Nelnet received the SSA docume [...]
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New Grad? This 6-Step Guide Will Help You Determine What You Owe in Loans

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New Grad? This 6-Step Guide Will Help You Determine What You Owe in Loans
If you’re a recent graduate, the last thing you want to think about is the past, right? It’s all about the future. However, if you took out student loans, the time to look back is now (actually, it probably should have been sooner, but let’s not quibble over semantics). If you’re like most grads, you took out multiple student loans over your four(ish)-year career as a college student — consumers with educational debt had an average of 3.7 student loans, according to a 2017 Experian report.  Unfortunately, 11.4% of aggregate student debt was 90 or more days delinquent or in default in the fourth quarter of 2018, according to the Federal Reserve. That means there are a lot of people not paying their student loans on time — or perhaps at all. But you won’t be one of them, right? You just need a little help figuring out who you owe… and how much… and when it’s due. Oh, and how long before these loans are paid off and out of your life (spoiler alert: you might get a temporary reprieve on payments if your loan has a grace period). Fortunately, you have The Penny Hoarder to help you organize your student loan debt in way to pay it off in a timely, cost-effective way so you can get back to that future thinking. How Much Do I Owe in Student Loans? It would be nice if you could put a simple, smallish figure down on paper and be done. But student loans can get complicated, and you should have all the essential information before you formulate a plan of attack for paying them off. We’ve come up with the list of questions you should be able to answer about both your federal and private student loans to truly know how much you owe. That could mean a few trips to the interwebs, a close reading of your loan agreement and/or a call to your lender. Let’s get started. 1. Who Is My Student Loan Servicer? There’s no sense in knowing how much you owe if you don’t know who you owe it to, right? Federal Student Loans  Dig out your FAFSA (Free Application for Federal Student Aid) login and password to sign onto studentloans.gov. Here you will find a list with your federal student loans.  Each entry will also indicate the company hired by the federal government to service the loan — look for names like Navient, Great Lakes or FedLoan, three commonly used loan servicers. Any further interaction in regards to your loan should go through your loan servicer. If you need more info about your loans  — such as when your loan was disbursed — log into the National Student Loan Data System (NSLDS.ed.gov).  “Use that same federal student aid login and password to login,” said Heather Jarvis, a North Carolina attorney who specializes in student loans. “That site is much less formatted and is less easy to read than studentloans.gov, but it does have more information.” Private Student Loans Private student loans are more difficult to track — especially if you accepted them without much thought as a 17-year-old … and you lost any paperwork four moves ago … and your loan’s been sold.  If you’re at a total loss for who to contact, start with your alma mater.  “The college admissions office is going to know who paid the tuition,” said Melinda Opperman, executive vice president of credit.org. She recommended asking for a duplicate copy of the loan agreement, which the college should have in its records.  “If they can’t provide that, at least [ask for] the phone numbers of who to get in touch with,” Opperman said. No luck with your college? There’s one more source that will have your private loan info: your credit report, which you can order online for free from annualcreditreport.com. “Look for all the education loans listed on your credit report, and then compare the loans on your credit report to the loans that you’ve identified as federal,” Jarvis said. “If there are any loans on your credit report that are not on studentloans.gov, it’s because they’re private student loans.  “And your credit report will list the name of the lender.” 2. What Is the Principal Amount? Regardless of the type of loan, it’s important to know two things about the principal:  What is the amount you initially borrowed? What is the current amount of principal you owe? If you’ve made any payments toward your loan, you should be aware of whether the payments were going toward interest or principal. These totals should reflect that. Knowing both the initial loan amount and current principal will be important for calculating interest. Federal Student Loans The fed’s information about your loan balance could be up 120 days old, so you should contact the lender directly for the updated amount.  Private Student Loans For private loans, it’s best to contact the lender directly for the current principal, although your most recent statement should also have this information. 3. What Is the Interest Rate? Knowing the interest rates can help you prioritize which loans to tackle first. Paying off in order of the highest to lowest interest using the debt avalanche method will save you money in interest over the long term. Federal Student Loans The feds don’t consider your college career collectively — each academic year you start anew. The same goes for your interest rates. “The interest rates set for federal student loans are set annually for the upcoming academic year, and they’re not always the same from one year to the next,” Jarvis said. “So people might have a variety of interest rates.” The good news about federal loans? Unless the loans were issued before 2006, your interest rate will be fixed. So that rate will remain the same over the life of the loan. Private Student Loans Private student loans are less likely to have fixed interest rates, so you’ll have a little more homework to do with them.  “Often, private loans are at variable interest rates, so they can change over time,” Jarvis said. “Everyone who has a private loan at a variable rate should know a couple of things: They should know how often the rate changes and they should know whether there’s any cap on how high the rate can go.” Pro Tip Making an extra payment—using a tax refund, perhaps—lowers the amount of interest you pay over the life of the loan. Specify to your lender that the extra money should be applied to your loan balance. If your interest rate seems really high, that’s probably because it was based on your credit score — and lack of credit worthiness as a college student. Once you have a career with a steady income, you may consider refinancing your loans since you could qualify for lower interest rates.  4. What Are My Payment Plan Options? Now that you know the amount you owe and the interest rate, you should find out how to start paying it off.  Ask your lenders what the estimated payoff dates are to help set your goals and prioritize payments. Federal Student Loans If you let the government decide, it will automatically base your payments on the standard 10-year loan repayment plan. But that isn’t your only option. “Folks tend to have the misunderstanding that they have a monthly payment that’s the required payment on a student loan,” Jarvis said. “And with federal student loans, that’s not the case.” If you’re unable to make the proposed amount, you have four main options for lower payments that take your income and expenses into account: Income-Based Repayment Plan (IBR) Income-Contingent Repayment Plan (ICR) Pay as You Earn (PAYE) Revised Pay as You Earn (RPAYE) You can learn more details about income-driven repayment plans in this article, but Opperman warns that these plans come with conditions that you should discuss with your lending service provider before you sign. “When the student starts making smaller payments, it’s going to take significantly longer for them to pay,” she said. “And the balance may be growing — much like what happened for some people with the to [...]
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RV Loans: How to Finance an RV Purchase

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RV Loans: How to Finance an RV Purchase
If your family dreams of open-road adventures in a new recreational vehicle, but you’re unsure how to pay for that fifth wheel or pop-up camper, consider an RV loan. RV loans can be unsecured personal loans that you get from online lenders, or secured vehicle loans from banks and credit unions. Rates and terms vary... Steve Nicastro is a writer at NerdWallet. Email: steven.n@nerdwallet.com. Twitter: @StevenNicastro. The article RV Loans: How to Finance an RV Purchase originally appeared on NerdWallet. [...]
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Here’s How to Pay Off Student Loans 5 Years Faster Without Getting a Second Job

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Here’s How to Pay Off Student Loans 5 Years Faster Without Getting a Second Job
Let’s be honest with ourselves. We’re so ready to fire off an angry Tweet at Netflix every time our bill goes up a buck. So why is that so many of us won’t take a mere seven minutes right now to chop thousands of dollars off our student loans. Here’s the thing: You’ve probably had the same student loan company since you had acne and were eating ramen in the dorm room. And we get it. It’s easy to just let these things slide. But chances are, your student loan company is overcharging you. And something as simple as switching loan companies could help you shave hundreds of dollars off your monthly payments. The best way to find a better deal is to use Credible. It’s sort of like Kayak — but for student loans. It looks at your options from up to eight companies to make sure you have a loan that will give you the lowest monthly payment and the fastest payoff time. If you’re even a little curious, it only takes two minutes to see if Credible can help you pay off your student loans faster. Chances are, you’re going to find a better deal than what you originally signed up for. And that could mean saving as much as $350 a month — and paying your loans off five years faster. How She Shaved $350/Month From Her Student Loan Payments Sarah Ann Stanley, a 32-year-old product manager in Minnesota, was forking over $500 a month in student loan payments. Plus, she was paying close to 8% interest on multiple loans. Then, about two years ago, she looked into other options and decided to refinance — or replace her multiple loans with a single new one. Her interest rate was now 6.22%. Yes, that’s less than a 2% difference, but it shaved $350 a month from her monthly bills. Oh, and now she only had to manage one bill — not several. “I didn’t want to be 45 and still paying student loans,” Stanley says. “Now that won’t happen.” After a second refinance, Stanley is now able to pay off her loans five years ahead of schedule and save even more on interest. “Because so much of our money goes to this, it’s worth pushing the envelope and fighting for yourself and finding a better deal,” she says. Luckily, Credible makes it easy to fight for yourself — and who doesn’t want to get out of student loan debt a few years sooner? This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017. [...]
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8 First-Time Home Buyer Loans and Programs

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8 First-Time Home Buyer Loans and Programs
Buying a home is so hard, they should make it an Olympic event. It’s not just the paperwork; it’s the terminology, the fees and the number of people involved. It’s natural to want to agree to whatever, sign everything and just get through the process as fast as you can. While that may make you... Hal M. Bundrick, CFP is a writer at NerdWallet. Email: hal@nerdwallet.com. Twitter: @halmbundrick. The article 8 First-Time Home Buyer Loans and Programs originally appeared on NerdWallet. [...]
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8 Ways to Pay for College Without Student Loans or Your Parents’ Help

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8 Ways to Pay for College Without Student Loans or Your Parents’ Help
Parents aren’t perfect. Shocking, I know. So even though you may have been planning out your college career, your family’s financial situation may not have kept up with your dreams of campus life. On average, 34% of college costs were paid from parents’ income and savings, according to a national study by Sallie Mae. But families who have a limited income and haven’t been saving may not be able to help cover a higher education price tag. Including tuition and applicable fees, the cost per credit hour at a four-year institution is $301.23, according to a Penny Hoarder analysis of National Center for Education statistics. If an average bachelor’s degree requires 120 credit hours, the total price comes to $36,148 — not including room and board. Whether it’s by necessity or by choice, your parents could end up saying you’re on your own if you want to go to college. But that doesn’t mean you should resign yourself to a mountain of student loan debt or to skipping college altogether. But you do need a plan of attack, which is where we come in. How to Pay for College Without Your Parents’ Help You may not want to hear this right now, but paying for your own college education can actually be good for you (just like brussels sprouts or liver). Taking on the responsibility can teach you budgeting techniques and saving strategies that you might not have learned if your parents were picking up the tab. You can start saving on college by choosing a less-expensive school — here’s our list of the best college bargains by state. Once you’ve narrowed your choices, check out these eight ways to pay for college without money from your parents — or student loans. 1. Scholarships and Grants From Your School Already have a college in mind? Then the first place to start looking for scholarship money is the school’s financial aid office. If you’re still in high school, ask your guidance counselor for their help reaching out to the college. It’s important to know what money is available, so ask the financial aid officials about deadlines for applications, opportunities for need- vs. merit-based funding and options for renewable scholarships and grants. Pro Tip Some schools won’t consider you for any of their scholarships until you’ve submitted a Free Application for Federal Student Aid (FAFSA). Transferring from another college? Whether you started at another four-year institution or you’re continuing your education after completing your associate’s degree at a community college (a great way to save money, BTW), transfer scholarships offer a niche option. Here are 25 transfer scholarships we’ve found. 2. Federal Pell Grant Federal Pell Grants are need-based awards that are awarded on an annual basis (meaning you need to reapply every year). Use the Free Application for Federal Student Aid (FAFSA) to apply — here’s a step-by-step guide for filling out FAFSA. The maximum Federal Pell Grant award is $6,195 for the 2019–20 award year (July 1, 2019, to June 30, 2020). The amount you get will depend on the four following factors, according to the Federal Student Aid office: Your Expected Family Contribution (EFC). The cost of attendance at your school and your specific program. Whether you’re a full-time or part-time student. If you plan to attend school for a full academic year or less. Filling out FAFSA requires your tax information, and unless you’re no longer a dependent, that means you’ll need your parents’ most recent tax returns. Providing this information doesn’t leave them on the hook for your college bill, but it could affect your financial aid package. Pro Tip To avoid debt, don’t take more money than you need. Accept free money (scholarships and grants) and earned money (work-study) in your financial aid package first, then student loans only as needed. If your parents won’t provide these details, there are a few options that you can explore. One option is to claim yourself as an independent, but that’s typically only allowed if you are over 24 years old, are married, have kids, are a veteran or can claim special circumstances. 3. Grants From Your State States use your FAFSA to determine your eligibility for state financial aid, so you get a two-for-one with that application (actually, it’s more like a three-for-one, since your school will probably use it, too). But some states require additional documentation, and their deadlines are not always the same as the federal ones. Note that most state grants are only applicable for in-state schools, but there are some state grants and scholarships you can use for out-of-state tuition. Check out your state’s FAFSA requirements for rules and deadlines. 4. Work-Study Program Federal aid doesn’t stop with scholarships and grants. If you’re able to work on campus part time while attending classes, you can apply for federal work-study (FWS), which is essentially federal aid you receive for working. Pro Tip IRS Publication 970 outlines 10 tax benefits that students can claim to reduce the income tax they owe. Read more about it on irs.gov. Work-study jobs typically allow you to earn extra money without having to leave campus — that’s helpful if you’re without a car or if making the hike from campus to a job would be cost prohibitive. But don’t expect a work-study program to cover all your costs. Under the FWS program, students typically work no more than 20 hours a week during a semester. And you won’t be allowed to exceed the allotted hours from your financial aid award, so don’t bank on overtime to cover extra costs. Learn more about on-campus job opportunities here. 5. Other Scholarships After you’ve talked to your college’s financial aid office and filled out your FAFSA, it’s time to get a little creative in your scholarship search. Start with your intended career. Corporations and professional associations often offer grants and scholarships for students pursuing degrees in related fields. As a bonus, researching and contacting these organizations early in your college career will help you make connections that can come in handy when you’re applying for jobs when you graduate. Pro Tip Some scholarship deadlines are as early as a year before college starts, so start applying during the summer between your junior and senior years. Also check out nationwide databases like Career One Stop, sponsored by the U.S. Department of Labor, and The Penny Hoarder, which has its own compilations of awesome scholarships — and weird scholarships. 6. Part-Time Job On-campus work isn’t the only way to make extra cash — and off-campus jobs don’t require you to qualify for federal work-study.   Among the other benefits of an off-campus job is the potential to earn more money than at a FWS job since you can work more hours and keep the job year-round. Additionally, you can potentially turn a part-time gig into a job upon graduation. Here are six tips to help you move from part-time to full-time employee. And if you don’t want to leave campus but still want to earn part-time or full-time money, check out our handy work-from-home portal for legit ways to make money from your dorm. 7. Paid Internship Internships provide on-the-job experience, which can help bolster your resume as your college career draws to a close. Not only does a paid internship offer the same potential experience as an unpaid version, it could actually improve your chances of finding a post-graduation job. Among the 2019 graduates who had an internship, 66.4% of paid interns received a job offer, while just 43.7% of unpaid interns were offered a job, according to the survey conducted by the National Association of Colleges and Employers. You can start your internship search at your own college, whether it’s contacting the career services department, attending on-campus career fairs, reaching out to your alumni network or asking professors within your o [...]
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