Free Resources for Student Loan Help

There are free resources out there to help you with your student loans. For many people, these resources are enough to set them in the right direction.

Are you trying to figure out how much you owe and how to pay it back?

If all your loans are federal loans, you can can set up an Federal Student Aid account and see all your federal loans at one time. Within this account you can use their repayment estimator to get a sense of what you might owe.  You can also use the estimator without an FSA login to ballpark repayment amounts.

However, the repayment estimator has its limitations, and may not be that helpful if you are already in repayment and looking to switch plans or if you have complex questions about the best income-driven repayment plan for you.  If you want to run the calculations for yourself, you can check out my series on the various repayment plans

Student Loan Repayment Plans – Part 1, Fixed Balance-Driven Plans

Student Loan Repayment Plans – Part 2, Graduated Balance-Driven Plans

Student Loan Repayment Plans – Part 3, Introduction to Income-Driven Plans

Student Loan Repayment Plans – Part 4, PAYE (Pay As You Earn Plan)

Student Loan Repayment Plan – Part 5, IBR (Income Based Repayment)

Student Loan Repayment Plan – Part 6, RePAYE (revised pay as you earn)

There’s a lot of detail there, but if you’re looking for even more, Equal Justice Works has an excellent free ebook for public interest attorneys that works just as well for every other type of borrower.

You can also check out Student Loan Borrower Assistance, a project of the National Consumer Law Center or The Institute for Student Loan Advice (TISLA).

You should also consider calling your servicer (NelNet, Navient, FedLoans, etc.) and asking them for options.  But be aware that we have seen servicing issues throughout the industry, so be sure to verify what they tell you with independent resources.

If you have private loans, you will have to talk to your lender / servicer to learn about repayment options.  Under private loans, you won’t have as many options as under the federal plan.

Are you having an issue with your servicer?

If you have called and re-called your servicer over a dispute and not gotten anywhere, it may be time to try a different approach.  The Department of Education has an Ombudsman office that you can use to escalate a dispute with your student loan servicer.  Write a clear letter explaining the issue and submit it here.  In the past, my clients have had the most success with using the online portal option — response times seem to be faster that way.

Are you worried about qualifying for Public Service Loan Forgiveness?

The basic PSLF checklist is (a) right type of loan on (b) the right type of plan while working (c) the right type of job.  Learn ore about each of these requirements with the PSLF FAQ here.

If you were paying on the wrong type of repayment plan, you can potentially qualify for forgiveness under the Temporary Extended PSLF Program.  You can learn more of the details and apply for that program here.

Are you in default?

When you are in default it’s important to bring the loans back into good status so that you don’t get a wage garnishment. Although you may have to pay some amount of money (it can be as little as $5) for the initial months, it may be possible to get your loans into a $0 repayment plan depending on your income.  Typically your options are either consolidation or rehabilitation to get out of default.  You can read about the pros and cons of these options here.

Be aware that your servicer is paid money to bring you out of default and that the payment amount depends on the option you choose.  In other words, your servicer may not suggest the option that’s in your best interest.  Do your own research on the best way to get out of default.

Are you considering refinancing?

Private refinance companies are increasingly reaching out to federal borrowers to entice them to refinance into private loans at lower interest rates.  Be sure you understand the tradeoff before you agree to refinance.  You lose all federal benefits and cannot take those balances back into the federal system.  Still, some people find it to be the best option in the long run.  I’m not against refinancing, I just want borrowers to know exactly what they are signing up for before they do it.

Do you have issues with your for-profit school?

You may want to speak to the Harvard Project on Predatory Student Lending, or your local legal aid society.

If you’ve submitted a borrower defense application and are waiting to hear back, you can share your experiences here as part of a lawsuit arguing that the Department of Education needs to begin processing applications.

Do you want to learn more details on the economics and disparities in student loans? 

Student loans are the consumer finance issue of our times.  Whether you have student loans or not, you are likely affected by mounting debt loads, which topped 1.5 trillion this year.  Moreover, student loans mirror the disparities of race and gender that we see across the economy.  You can read more about the economics of student loans here, here, here, here and here.

Student Loan Support as a Human Resources Benefit

Top employers are increasingly offering student loan support as part of their benefits package.  Student loan resources and one-on-one consultations can seal the deal for prospective employees in particularly tight labor markets like technology.  Non-profits may also want an in-house resources available to make sure their employees will qualify for Public Service Loan Forgiveness.

Maurer Law offers a suite of customizable services for employers, especially those who want to offer a student loan benefits package that goes beyond a partnership for refinancing.  In fact, offering employees private refinance options without additional context may push them towards giving up federal protections that employees will later regret.

By arming employees with the best information possible for how to handle their student loans, employers can ease stress and let their top talent focus on the work that truly matters.

 

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Contact Maurer Law LLC if you would like to learn more.

 

 

Changes to PSLF in the Omnibus Spending Bill

In late March 2018, Congress passed H.R. 1625, the Consolidated Appropriations Act, 2018 otherwise known as the omnibus spending bill.  Contained deep in the thousand-page document was a provision that could potentially change how Public Service Loan Forgiveness is handled.  If you want to follow along with me, the relevant text of the spending bill is available here by searching for “Sec. 315”.

Before we get into the weeds on what Congress actually did, you need to remember that to qualify for the elusive Public Service Loan Forgiveness a borrower must make 120 on-time payments on qualifying loans under a qualifying plan.

Only income-driven plans and the 10-year standard repayment plan qualify.  (Of course, if you made 10 years worth of payments on the 10-year standard plan, you would have no loans left to forgive).

This limitation left many borrowers unknowingly out of luck.  They made low monthly payments on, for instance, the graduated extended plan and didn’t realize they were not making qualifying payments towards their 120 for forgiveness.  In one high-profile case, a teacher made 120 payments under a graduated plan only to learn she was not eligible for forgiveness.

Some members of congress have been interested in changing this obvious loophole — after all, what’s the point in excluding graduated repayment plans rather than income-based plan? The payments can be similar.  If anything, borrowers on graduated plans can often end up paying back more.

Now the omnibus bill does something about it.  The loan provides $350 million

for borrowers of loans . . . who would qualify for loan cancellation . . . except some, or all, of the 120 required payments . . . do not qualify for purposes of the program because they were monthly payments made in accordance with graduated or extended repayment plans

Congress does put in some caveats.  I’ll translate each of these into English as we go:

Provided that the monthly payment made 12 months before the borrower applied for loan cancellation as described in the matter preceding this proviso and the most recent monthly payment made by the borrower at the time of such application were each not less than the monthly amount that would be calculated under, and for which the borrower would otherwise qualify for, clause (i) or (iv) of section 455(m)(1)(A) regarding income-based or income-contingent repayment plans, with exception for a borrower who would have otherwise been eligible under this section but demonstrates an unusual fluctuation of income over the past 5 years

In English: For the 12 months before an application for PSLF, the borrowers monthly payment must be at least as much as he or she would have paid under an eligible income-driven plan.  This is supposed to stop people with higher incomes from utilizing PSLF without making at least 1 years worth of payments at the amount required by an IDR plan

Provided further, That the total loan volume, including outstanding principal, fees, capitalized interest, or accrued interest, at application that is eligible for such loan cancellation by such borrowers shall not exceed $500,000,000:

The max cancellation under this program is $500,000 (there’s a comma rather than a decimal, nominally making the limit $500 million.  But this may be changed as a ministerial error during the codification process)

Provided further, That the Secretary shall develop and make available a simple method for borrowers to apply for loan cancellation under this section within 60 days of enactment of this Act

There should be an application process available within 60 days.  Once I find out about it I will post an update.

Provided further, That the Secretary shall provide loan cancellation under this section to eligible borrowers on a first-come, first-serve basis, based on the date of application and subject to both the limitation on total loan volume at application for such loan cancellation specified in the second proviso and the availability of appropriations under this section:

This one at least is straight forward and important.  The money is first-come-first-serve.  

Provided further, That no borrower may, for the same service, receive a reduction of loan obligations under both this section and section 428J, 428K, 428L, or 460 of such Act

These citations refer to loan forgiveness for teachers, loan forgiveness for service in areas of national need, loan repayment for civil legal assistance attorneys and a separate loan cancellation for teachers program, respectively.  So, no double dipping.

All things considered, this is great news for borrowers who were near the end of the process when they realized they’d made the wrong payment under the wrong plan.  Unfortunately because the money is first-come-first-served, there will need to be a more permanent solution before borrowers who are years away from PSLF-eligibility can be assured that their years on graduated plans will count.

DISCLAIMER: THIS BLOG POST IS NOT LEGAL ADVICE AND DOES NOT CREATE AN ATTORNEY-CLIENT RELATIONSHIP BETWEEN THE READER AND MAURER LAW LLC.  SEEK LEGAL ADVICE IF YOU HAVE PARTICULAR QUESTIONS ABOUT YOUR STUDENT LOANS.

Public Service Loan Forgiveness FAQ

Public Service Loan Forgiveness (PSLF) is the number one thing I am asked about when I tell people that I’m a student loan lawyer.  Unfortunately there are too many stories out there of people getting years and years into their repayment plans only to learn that they do not qualify for PSLF as they once thought.  You should seek the advice of an expert if you have particular questions about your situation, but here are the most important things to keep in mind:

  1. Do all federal loans qualify?  No, not all federal loans qualify.  Your loans must be Direct Loans in order to qualify for PSLF.  If you aren’t sure what type of loans you have, you can go to the National Student Loan Data System to find out.  For instance, Perkins or old FFEL loans do not quality.
  2. What repayment plans qualify? Only income-driven plans or the standard 10-year fixed plan qualify for Public Service Loan Forgiveness.  (Though, of course, if you make standard 10-year payments for 10 years, you will not have anything left to forgive).  Even if you are making a low payment, always check which plan you are on, because low payments under the graduated or extended repayment plans do not count.
  3. What type of job do I have to have? Generally speaking you need to either work for a governmental agency or a registered 501(c)(3).  Under certain circumstances, entities that have the primary purpose of providing qualifying public services will also count.
  4. How long until my loans are forgiven? You must make 120 on-time payments, so generally 10 years.
  5. Who will service my loans while I make my 120 payments? All borrowers who indicate their interest in PSLF by submitting an employment certification will be transferred to FedLoan Servicing.  As any student loan lawyer will tell you, FedLoan is the most difficult of the servicers to work with.  I always recommend that you keep your own copies of all paperwork you send them, including documentation of your on-time monthly payments.
  6. What do I need to do to enroll in PSLF?  You cannot “enroll” in PSLF.  You can only wait until your 120 payments are complete and you actually apply for forgiveness.  In the meantime, you can complete yearly certifications of your employment status to tell your servicer of your intention to apply for PSLF and indicate where you have been employed.  However, these annual certifications do not guarantee your participation in PSLF.
  7. Will PSLF be discontinued?  We do not know.  Removing the PSLF program for future cohorts of borrowers has been discussed in recent months.  However, no action has been taken so far and even the proposed plans do not remove PSLF for current borrowers.
  8. Will forgiveness under PSLF cause a tax bill? No.  While forgiven debts can sometimes incur tax liabilities, loans forgiven through PSLF will not be counted as taxable income.