affordable snow – Manderfeld http://manderfeld.info/ Tue, 12 Oct 2021 09:04:11 +0000 en-US hourly 1 https://wordpress.org/?v=5.8 https://manderfeld.info/wp-content/uploads/2021/10/icon-9-120x120.png affordable snow – Manderfeld http://manderfeld.info/ 32 32 Student Loan Consolidation Cottage Industry Grows With Targeted Ads https://manderfeld.info/student-loan-consolidation-cottage-industry-grows-with-targeted-ads/ Tue, 12 Oct 2021 08:40:23 +0000 https://manderfeld.info/?p=184 Student loan consolidation companies are kicking up their efforts to target struggling borrowers.  From Facebook ads to prime-time commercials and radio spots, promises of student loan forgiveness, lower interest rates and lower monthly payments have been plastered before people’s eyes for months. With more than $1 trillion in outstanding student loan debt in the U.S., companies offering […]]]>

Student loan consolidation companies are kicking up their efforts to target struggling borrowers. 

From Facebook ads to prime-time commercials and radio spots, promises of student loan forgiveness, lower interest rates and lower monthly payments have been plastered before people’s eyes for months. With more than $1 trillion in outstanding student loan debt in the U.S., companies offering debt relief also appear to be taking advantage by targeting borrowers directly through the mail – and with surprisingly accurate knowledge about how much they owe.

An example of a sponsored Facebook advertisement promoting a student debt scam.Screenshot/Facebook

“We don’t know exactly how they’re getting some of that really specific borrower information,” says Deanne Loonin, director of the National Consumer Law Center’s Student Loan Borrower Assistance Project.

The Department of Education began more proactively reaching out to borrowers in recent months, after debt relief companies began advertising services such as an “Obama Forgiveness Program” and claiming Congress passed a new bill to forgive student loan debt for qualified people. The congressional claim is blatantly false, and while a federal loan forgiveness program does exist, it was established before President Barack Obama took office and not all borrowers are eligible.

The department’s Federal Student Aid office launched a social media outreach campaign to inform borrowers that certain services charged for by debt relief companies – such as applying for loan consolidation or enrolling in different types of repayment plans – can be done for free through the government. The department’s student loan ombudsman, Joyce DeMoss, also published a blog post urging borrowers to keep certain information, such as Personal Identification Numbers, to themselves. “If you give your PIN away, you give others the power to perform actions on your student loan on your behalf,” DeMoss wrote.

“We’ve seen similar things where companies would charge you to fill out the FAFSA, and the department is just now starting to crack down on people illegally charging people for that,” says Chris Hicks, the Debt-Free Future campaign organizer for Jobs With Justice, a workers’ rights nonprofit. “It’s definitely gotten worse over the last few months, where it went from just the commercials to now they’re proactively reaching out to these people.”

A spokeswoman for the Education Department tells U.S. News that the student loan ombudsman receives complaints about these types of companies. Some borrowers are simply asking about a company’s legitimacy, while others have signed a contract or paid a fee. 

“Over the years, consistent with our informal problem resolution role, it’s our standard practice to determine whether the nature of the issue is something that falls within the scope of Ed’s authority or elsewhere,” the spokeswoman says. Depending on the situation, department officials may advise a borrower to consider loan consolidation or income-driven repayment plans, or refer them to the Federal Trade Commission or Consumer Financial Protection Bureau to make formal complaints about deceptive practices.

“We also let customers know that securing legal assistance may be an option they have to take to secure redress if other avenues prove unsatisfactory,” the spokeswoman says.

An example of a misleading letter sent to student loan borrowers about federal loan assistance programs.

Click for a larger image. 

An example of a misleading letter sent to student loan borrowers.
USN&WR

The letters mailed out to student loan borrowers – three of which were obtained by U.S. News – present information about federal loan assistance programs in a misleading way, Loonin says. 

The letters tell borrowers that due to the amount of their outstanding student loan debt they “are now eligible to receive benefits from a new law that has passed regarding federal student loans including TOTAL FORGIVENESS in some circumstances.” At first glance, one could conclude borrowers are being offered refinancing or consolidation services. But buried disclosures – one at the bottom of the letter and another in fine print, upside-down on the back – say the services are fee-based and not endorsed by or associated with the government, and that the company is filing paperwork on behalf of borrowers applying for or enrolling in certain loan programs.

“It’s all very scammy, but they try to make it look as official as possible,” Hicks says. “They put in all these false deadlines to make you nervous. And if you’re just a regular person working and you get this in the mail, it seems legitimate enough that you might call.”

The letters continue to say federal student loan programs may change, and urge borrowers to call within 30 days. They also warn borrowers that without “department approval for further program extensions,” student loan interest rates will likely increase next year – failing to mention that any increases will only apply to new loans. 

“Where do you start with the inaccurate information?” Loonin says. “First, there’s no new program for forgiveness. There are programs out there, but none of them are brand new. None have a 30-day deadline. That’s all wrong.”

Loonin adds that research conducted by her organization also has shown debt relief companies have tried to steer borrowers away from dealing with their loan servicers – the companies that handle federal loan repayments – and create a sense of distrust with the agencies.

It’s not the first time debt relief companies have been put in the hot seat for their marketing tactics. In 2013, a report from the National Consumer Law Center identified numerous problems with such companies’ marketing and sales practices: They mischaracterized federal programs as their own, charged high fees for free services and provided inaccurate information about consolidation and other topics. The report also identified several potential violations of consumer protection laws. 

In January, New York Gov. Andrew Cuomo announced that his Student Protection Unit had issued subpoenas to 13 student debt relief companies over concerns about misleading advertising and other consumer protection problems.

A graphic reading: "Where do you start with the inaccurate information? First, there's no new program for forgiveness." by Deanne Loonin, director of the National Consumer Law Center's Student Loan Borrower Assistance Project.

Diana Soliwon for USN&WR

In July, Illinois Attorney General Lisa Madigan filed lawsuits against two debt relief companies – First American Tax Defense LLC and Broadsword Student Advantage LLC – accusing them of deceptive marketing practices and illegally charging borrowers as much as $1,200 for “bogus services” to reduce or eliminate their debt.

But at least one company that’s mailed letters to borrowers says it’s offering a legitimate service.

Tim Myers – a sales manager for the Student Loan Education Center, which has mailed the type of letter in question to student borrowers – describes his company as “the H&R Block of federal student loans.” 

Myers says that for $300, the company will prepare and file paperwork on behalf of borrowers who seek its services. Much like taxpayers go to accountants or tax preparation companies to save time and money, student loan borrowers have the same option through companies like his, Myers says. 

Many have highlighted the fact that federal student loan forgiveness and repayment plans are underused, and that borrowers often have a difficult time navigating the application processes for enrolling. Obama has said increasing awareness about student loan repayment options would be a priority of his larger college affordability agenda, and the Education Department teamed with the Treasury Department and tax software company Intuit during tax season to raise awareness about income-driven repayment options. 

The president in June also announced he would expand the federal Pay As You Earn program to all federal student loan borrowers.

“We’ve actually done quite a lot to educate borrowers about loan consolidation and loan repayment options,” the department spokeswoman says.

More than 500,000 borrowers have taken advantage of a loan consolidation option the department implemented last year, and more than 2.5 million Direct Loan borrowers were enrolled in income-driven repayment plans as of July, the spokeswoman says. An August 2013 analysis from the Consumer Financial Protection Bureau showed 1.58 million borrowers were enrolled in an income-driven repayment plan at the time.

But student advocates, including Hicks, have said the government and its contracted student loan servicers still aren’t doing enough to promote repayment options, and that borrowers may turn to fee-based debt relief companies out of confusion. The Debt-Free Future campaign and other organizations – such as the American Federation of Teachers, the National Education Association and the United States Student Association – have begun developing a community-based training program through which individuals can present free information about student loan repayment and forgiveness in workplaces, places of worship or college campuses.

“The No. 1 thing we’ve come up against in the work we’ve done is people are just really confused and no one is there to help them,” Hicks says.

Myers says processors at the Student Loan Education Center all receive certification through the International Association of Professional Debt Arbitrators, and borrowers are initially informed of free options through the government when they call and speak to the company’s processors.

“We offer to educate students out there on what’s available,” Myers says. “We help them prepare the paperwork, and submit it on their behalf.”

But Mike Cagney – co-founder and chief executive officer of SoFi, an online lending pool that also refinances and consolidates student loans – says charging for the services is still wrong.

“From an ethical standpoint, what these businesses are doing is not right,” Cagney says. “The company is promising to help you, but it’s the government’s program that’s helping you. I don’t think that’s clear. If people were better educated about that, then these businesses wouldn’t exist.”

The direct mail throws a wrinkle in the mix. Several consumer advocates and legal experts could not pin down exactly how such exact student loan data was obtained.

Nicole Hochsprung – a 2010 graduate of the College of St. Benedict in St. Joseph, Minnesota, who now works for the American Federation of Teachers – received a letter and says it was “disheartening” to see how accurate her outstanding loan balance was. Hochsprung says she was also suspicious that the letter prominently displayed the Department of Education’s name, but didn’t include an official seal. 

“So immediately my antenna went up of, ‘OK, this is not from any of my servicers, so who is this really from?'” Hochsprung says, adding she suspected the loan information must have come from a credit reporting agency.

Depending on how the data is obtained, it could be in violation of the Fair Credit Reporting Act, says Joel Reidenberg, a law professor at Fordham University and an expert on data privacy. 

It’s possible that a business could buy the information from credit reporting agencies such as Experian, TransUnion or Equifax, or through a middleman lead generation company. The Fair Credit Reporting Act prohibits consumer reporting agencies like credit bureaus from providing individuals’ information to those without a valid need, such as a bank offering a line of credit or a company using it for employment purposes. Both the seller of the data and the recipient have legal obligations under the law, Reidenberg says, and because the letters are not offering a line of credit, they could violate those obligations.

A compliance supervisor with the Student Loan Education Center tells U.S. News the company compiles its information from multiple lead-generating marketing companies to come up with a “guesstimate” of an individual’s loan balance. 

But a potentially gray area comes up with document preparation and the possible role of marketing companies in distributing loan balance data.

“It depends on the nature of the pitch you receive, and it also depends on how the marketing company is getting the data,” Reidenberg says. “If they’re laundering it for a credit reporting agency, then even if they’re selling it for marketing purposes, not underwriting, it won’t matter because they’re a data launderer.”

The expansion of the cottage industry around student loan debt relief isn’t just a problem for borrowers, though. Hicks says it also poses an obstacle for loan servicers, who are allocated loans from the Education Department based in part on customer satisfaction. If borrowers can’t distinguish debt relief companies from their loan servicers, the Education Department or a debt collector, they may think the entities are one agency working together, he says.

“For people that are seriously in financial distress, to then have to worry about these predatory actors that are trying to squeeze every penny out of you that they can, it’s going to create larger distrust in the government, and it’s going to create larger distrust in the servicers,” Hicks says. “People are starting to distrust higher education, and that’s a problem.”


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Best Student Loan Consolidation & Refinance Lenders of 2021 https://manderfeld.info/best-student-loan-consolidation-refinance-lenders-of-2021/ Tue, 12 Oct 2021 08:36:38 +0000 https://manderfeld.info/?p=178 If you’re saddled with student debt and worried about making payments on your federal loans during the coronavirus pandemic, you can breathe a sigh of relief. An executive order in January extended the pause in payments on federal loans and set interest rates at 0% through September. Private lenders may offer their own special relief […]]]>

If you’re saddled with student debt and worried about making payments on your federal loans during the coronavirus pandemic, you can breathe a sigh of relief. An executive order in January extended the pause in payments on federal loans and set interest rates at 0% through September. Private lenders may offer their own special relief programs, or you can refinance your private student loans to save money.

Whether you have federal, private or both types of student loans, consolidating or refinancing them might help you reduce your student debt, better manage payments and work toward other financial goals. Too much student debt can hamper your ability to save for retirement or qualify for other loans, such as a mortgage. This guide explains the differences between refinancing private student loans and consolidating federal student loans, the pros and cons of each, and the best options for different situations.

The Best Student Loan Refinance Companies of 2021

No student loan refinancer is perfect for every borrower. These lenders are a good starting point for most people, but you should read student loan reviews and research each company on your own.

Earnest

2.48% to 5.79% with autopay* Fixed APR
Up to $500,000 Max. Loan Amount
650 Min. Credit Score

Laurel Road

2.25% to 5.75% Fixed APR
No maximum Max. Loan Amount
Not disclosed Min. Credit Score

Splash Financial

2.49% to 6.31% with autopay Fixed APR
No maximum Max. Loan Amount
640 Min. Credit Score

Citizens Bank

2.69% to 9.15% Fixed APR
Up to $750,000 Max. Loan Amount
Not disclosed Min. Credit Score

SoFi

1.99% to 6.94% with autopay Fixed APR
No maximum Max. Loan Amount
Not disclosed Min. Credit Score

College Ave

2.99% to 6.84% with autopay Fixed APR
Up to $300,000 Max. Loan Amount
Mid 600s Min. Credit Score

CommonBond

2.59 to 6.74% with autopay Fixed APR
Up to $500,000 Max. Loan Amount
Not disclosed Min. Credit Score

LendKey

2.49% to 7.63% with autopay Fixed APR
Up to $300,000 Max. Loan Amount
Not disclosed Min. Credit Score

Find the Best Student Loan Refinance Lenders

Best for fair credit

Earnest is an online lender offering private student loans to current college and graduate students and student loan refinancing to graduates. The company was founded in 2013. Borrowers can choose their loan terms to fund up to the full cost of their education.

Before You Apply

  • Loan types: Undergraduate, Graduate, Parent Loans, Refinance, MBA, Law School, Medical School.
  • Minimum FICO credit score: 650.
  • Co-signer required: No.
  • Better Business Bureau rating: A.

Best Features

  • There are no origination, application or late fees.

  • You can choose your monthly payment and loan term length.

  • You can use a co-signer on undergraduate or graduate student loans, and student loan refinancing is available.

See full profile

Best for graduate health care program loans.

Laurel Road originates graduate student loans and offers refinancing for undergraduate, graduate and certain associate degrees. In 2019, Laurel Road became part of KeyBank, which offers community and corporate banking services.

Laurel Road’s student loans are serviced through the Higher Education Loan Authority of the State of Missouri, also known as MOHELA, and the company is headquartered in New York City.

Before You Apply

  • Loan types: Refinance, Graduate, Medical School, Dental School.
  • Minimum FICO credit score: Not disclosed.
  • Co-signer required: No.
  • Better Business Bureau rating: A.

Best Features

  • Loans are available from $5,000 up to 100% of the student’s school-certified cost of attendance.

  • Borrowers can make full payments while in school or choose to pay interest only, pay a flat fee or defer payments.

  • Laurel Road student loans have no application, origination, disbursement or prepayment fees.

See full profile

Best for speedy credit decisions

Splash Financial is a student loan refinance lender marketplace based in Cleveland, with its own lender network of banks and credit unions. Splash Financial gives borrowers quotes from its partner lenders with loans available in all 50 states. Refinancing is available for federal, private and Parent PLUS loans. A specialized refinance program is designed for doctors completing residencies or fellowships.

Before You Apply

  • Loan types: Refinancing, Parent Refinancing.
  • Minimum FICO credit score: 640.
  • Co-signer accepted: Yes.
  • Better Business Bureau rating: A-.

Best Features

  • Refinancing is available for a range of student loans.

  • Splash Financial works with a network of banks and credit unions to provide the best possible rates.

  • There are no application fees, origination fees or prepayment penalties.

See full profile

Best for streamlined approval process

Citizens Bank was founded in the 1800s in Rhode Island. Today, it’s one of the largest commercial banks in the U.S., with branches in 12 states in New England, the mid-Atlantic and the Midwest. U.S. citizens and permanent residents can apply for Citizens Bank student loans, as can non-citizens with creditworthy citizen or permanent resident co-signers.

Before You Apply

  • Loan types: Undergraduate, Graduate, Refinance, Parent Loan, MBA, Medical School, Dental School, Law School, International Student Loan.
  • Minimum FICO credit score: Not disclosed.
  • Co-signer required: No.
  • Better Business Bureau rating: A+.

Best Features

  • Citizens Bank offers multiyear approval loans, meaning that once you get started, you will continue to secure funding for subsequent years in school without needing to go through a credit check every year.

  • Borrowers who sign up for automatic payments can reduce their interest rates by 0.25 percentage points.

  • If you have a qualifying Citizens Bank account, you can earn an additional 0.25 percentage point discount.

  • International students can apply if they have a co-signer who is a U.S. citizen or permanent resident with good credit.

See full profile

Best for customer service

Education Loan Finance, also known as ELFI, is a student loan refinancing program offered by SouthEast Bank. Options are available in all 50 states to refinance private and federal student loans, including undergraduate, graduate, parent and MBA loans, as well as loans for law, dental and medical school.

Before You Apply

  • Loan types: Undergraduate, Graduate, Parent Loan, Refinance, Medical School, Dental School, MBA, Law School.
  • Minimum FICO credit score: Not disclosed.
  • Co-signer required: No.
  • Better Business Bureau rating: A-.

Best Features

  • There’s no maximum loan amount.

  • All types of student loans are eligible for refinancing.

  • Borrowers with up to a 50% debt-to-income ratio may be approved.

See full profile

Best for multiple repayment options and no fees

SoFi is an online lender founded by Stanford business school students in 2011. Originally focused on student loan refinancing, the company added private student loans in 2019. Its student loans for undergraduates, graduates and parents start at $5,000 and charge no fees.

Before You Apply

  • Loan types: Undergraduate, Graduate, Parent Loan, MBA, Medical School, Law School, Refinance.
  • Minimum FICO credit score: Not disclosed.
  • Co-signer required: No.
  • Better Business Bureau rating: A+.

Best Features

  • Zero fees: You won’t have to pay origination fees, application fees, late fees or insufficient funds fees.

  • Flexible repayment options: SoFi offers co-signer release options, plus borrowers hit by financial hardship can access programs and benefits.

  • Prequalify: Whether seeking undergraduate, graduate or parent loans, you and your co-signer can check rates and terms before submitting a full loan application without hurting your credit scores.

See full profile

Best for instant approval

College Ave exclusively offers student loans. Founded in 2014 and based in Wilmington, Delaware, College Ave offers undergraduate, graduate and parent loans for students enrolled at schools affiliated with College Ave in all 50 states and the District of Columbia. College Ave’s advantage is speed, with applications that take a few minutes to complete and instant decisions.

Before You Apply

  • Loan types: Undergraduate, Graduate, Parent Loan, Refinance, MBA, Law School, Dental School, Medical School, International Student Loan.
  • Minimum FICO credit score: Not disclosed.
  • Co-signer required: Yes.
  • Better Business Bureau rating: A+.

Best Features

  • Rapid application and approval process.

  • Career loan programs with a completion incentive available.

  • College Ave Student Loans have no origination fees.

See full profile

Best for forbearance options

Founded in 2011, CommonBond has funded more than $2 billion in student loans. The lender offers undergraduate, graduate, medical, dental and Master of Business Administration loans, along with student loan refinancing.

You need a co-signer for undergraduate and graduate loans, but not for medical, dental and MBA loans. It can take from five days to three weeks for your school to confirm your loan amount and enrollment status after CommonBond approves your loan. Fees are generally low, though there is an origination fee for MBA, dental and medical loans.

Before You Apply

  • Loan types: Undergraduate, Graduate, Refinance, MBA, Dental School, Medical School.
  • Minimum FICO credit score: Not disclosed.
  • Co-signer required: Yes.
  • Better Business Bureau rating: B+.

Best Features

  • Loans are available from $1,000.

  • Borrowers can defer payments while in school or elect to make up to full payments each month, depending on their loan type.

See full profile

Best for online refinancing

PenFed Credit Union has been originating refinanced student loans and refinanced parent loans since 2016 via a partnership with fintech company Purefy. PenFed does not originate traditional student loans, but it does refer customers to student loans issued by Sallie Mae Bank. Established in 1935, PenFed – which is short for Pentagon Federal Credit Union – has more than 1.6 million members, and serves customers in all 50 states, Washington, D.C. and U.S. territories.

Before You Apply

  • Loan types: Refinance.
  • Minimum FICO credit score: 670.
  • Co-signer required: Yes.
  • Better Business Bureau rating: A+.

Best Features

  • No origination fees or application fees.

  • Spouses can refinance their loans together.

  • Get a co-signer release after 12 consecutive months of on-time payments.

  • Phone or email consultations are free.

See full profile

Best for minimal fees

LendKey’s digital platform connects borrowers who need private student loans or student loan refinancing with credit unions and community banks. Since 2009, LendKey has helped more than 120,000 people by funding $4.1 billion in loans. The company offers fixed- and variable-rate loans for undergraduate and graduate students.

Before You Apply

  • Loan types: Undergraduate, Graduate, Refinance.
  • Minimum FICO credit score: Not disclosed
  • Co-signer required: No.
  • Better Business Bureau rating: A.

Best Features

  • Borrowers can receive a 0.25 percentage point interest rate discount by signing up for automatic monthly payments from a checking or savings account.

  • Co-signers are not required but may improve your chances of approval or help you obtain better terms that could save you money.

  • LendKey does not charge origination or application fees.

See full profile

What Does It Mean to Refinance or Consolidate a Student Loan?

Refinancing means getting a new (lower) interest rate on an existing loan. Consolidating student loans means combining multiple loans into one monthly payment. Federal loans can only be consolidated. Private loans can be consolidated and refinanced together.

You can consolidate loans through the U.S. Department of Education. The consolidation will give you one monthly payment with a new loan term and fixed interest rate that is the weighted average of your previous rates.

When you refinance student loans, a private lender repays your loans and issues a new loan based on your creditworthiness. If you can qualify for a better interest rate, you could save money and get lower monthly payments when you refinance student loans.

How Can You Refinance or Consolidate Student Loans?

Refinancing terms for your new private student loan are based on many factors, including your annual income, debt, employment and credit.

You can refinance federal student loans through private lenders, but it’s not always a good idea. That’s because you’ll lose access to flexible repayment options, including federal income-based repayment plans and student loan forgiveness programs.

Consolidating your federal loans neither changes the interest that accrues on them nor your ability to get more federal student loans. Consolidating your federal student loans requires no hard credit check and could offer you access to more flexible repayment options or forgiveness programs.

Rather than consolidate your loans, you could consider changing repayment plans to extend your loan terms and get lower monthly payments. But this also won’t reduce the cost of borrowing.

U.S. News Survey

U.S. News Survey: Student Loan Payments Can Hinder Retirement Savings and Personal Goals

Many borrowers don’t regret their student loans and haven’t explored refinancing them for savings, according to a U.S. News survey of consumers with federal or private student loans. They revealed how much they borrowed, whether their payments are affordable and other details about how their student loans have affected their lives.

Among the survey’s key findings:

More than 11% of respondents have student loan balances more than $50,000.

Seventy-three percent of respondents have had to postpone significant life goals, including 37.9% of people who have put off buying a house. Only 27% of respondents haven’t had their plans significantly delayed because of student loans.

Survey Results

Are You Eligible to Consolidate or Refinance Student Loans?

Before you proceed with consolidating or refinancing, check that your loans are eligible and make sure your choice is the right fit.

Federal student loan consolidation eligibility

Private student loan refinance eligibility

Eligibility can vary by lender, but many private student loan refinancing companies look at these factors:

  • Minimum credit score. You’ll usually need a minimum credit score of 670 or higher, which falls in FICO’s good range. But even if you qualify for refinancing, you may not get a lower interest rate than you have now.
  • Credit history. Lenders typically review your credit history for derogatory marks, such as late payments, and consider this information to determine your creditworthiness. You can order free copies of your credit reports – now weekly through April 2022 – at AnnualCreditReport.com to monitor for errors and dispute them, says Mark Kantrowitz, publisher and vice president of research for Savingforcollege.com, a resource for saving and paying for college.
  • Proof of stable work and income. Some lenders may have minimum annual income requirements.
  • Debt-to-income, or DTI, ratio. This is the percentage of your total monthly income that goes toward debt payments, and it can help lenders determine if you’ll have trouble making your loan payments. A lower DTI ratio is better because it indicates that you have more room in your monthly budget. The maximum DTI ratio is typically 40-50%, according to the lenders that disclose it. You can reduce your DTI ratio by switching to longer repayment plans, Kantrowitz says.

Also, lenders may require you to meet other conditions for refinancing student loans. If you can’t qualify on your own, some lenders might approve you with a creditworthy co-signer.

Lenders could restrict refinancing to those who:

  • Complete degrees
  • Have certain types of degrees, such as law or medicine
  • Live in certain states

How soon can you refinance student loans? You’re not likely to get approved for refinancing while still in school, unless you have income. Once you graduate and find a job, you should be able to refinance.

Parent PLUS loan refinance eligibility

Parents can refinance student loans, too. Parent PLUS refinancing is available with private lenders. When you refinance Parent PLUS loans or private parent loans, you could lower your interest rate, transfer the debt to your child or both.

Kantrowitz says, “You don’t lose as many benefits when refinancing a federal Parent PLUS loan into a private loan since parent borrowers are not eligible for income-driven repayment plans and Public Service Loan Forgiveness.”

Should You Consolidate or Refinance Student Loans?

Use this chart to compare consolidating federal student loans with refinancing private student loans.

Federal Direct Consolidation Loan

Private Student Loan Refinancing

Are federal loans eligible?

Yes Yes

Are private loans eligible?

No

Yes

Can you lower your monthly payments?

Yes

Yes
Is a hard credit check needed? No Yes
Can you lower your interest rate? No Maybe, if you have good credit
Can you use a federal repayment plan? Yes No
Can you qualify for federal student loan forgiveness programs? Yes No

Consolidation does nothing for your interest rate, but it does make your loans easier to manage, says Travis Hornsby, founder of Student Loan Planner, a consulting firm that helps borrowers manage student loans.

Consolidation could make sense if:

  • You’re having trouble making payments. Consolidating and increasing your loan’s term could give you a lower monthly payment. You’ll keep access to federal loan repayment plans as well as deferment or forbearance, which can offer a safety net.
  • You’re struggling to manage multiple loans. By consolidating, you will combine all of your federal student loans into one new loan and one monthly payment.
  • You plan to work in a profession eligible for student loan forgiveness. If you have federal loans that aren’t eligible for a federal student loan forgiveness program, consolidating those loans could make them eligible. But don’t consolidate loans that are eligible for forgiveness if you’ve been making payments on them, because that will restart the clock on forgiveness.
  • You have a loan in default. You may be able to consolidate your loan and bring it out of default.

On the other hand, choose refinancing “if you’re trying to reduce your interest rate and you need to pay off your balance in full,” Hornsby says. Refinancing your student loans with a private lender could be a good idea, as long as:

  • You qualify for better terms. If you have good credit and meet the loan refinance lender’s minimum income requirement and other requirements, you may qualify for a better interest rate that can decrease your monthly payment and the cost of the loan.
  • You want to combine your federal and private student loans. You’ll have to refinance student loans with a private lender to combine private and federal loans.
  • Your income is stable. Refinancing federal student loans means you’ll no longer be eligible for income-driven repayment plans or federal hardship programs.
  • You don’t plan to use federal student loan forgiveness options or alternative payment plans. Private loans aren’t eligible for these federal loan programs.

Could You Save by Consolidating or Refinancing?

Congratulations! You just graduated and were hired for your first job earning $65,000 a year in San Francisco.

You have three federal direct subsidized loans: one for $10,000, one for $6,000 and the other for $5,000. To pay down your student debt under the standard repayment plan, you will spend 10 years and roughly $24,000, including interest.

Here’s how this scenario could change by either consolidating your federal loans or refinancing them with a private lender.

New APR

New monthly payment

Interest paid

Total paid

Consolidate with a 20-year term

5.53%

$145 $13,755

$34,755

Refinance with a five-year term

4.99%

$396

$2,772

$23,772

Refinance with a 10-year term

5.25%

$225 $6,038

$27,038

Refinance with a 15-year term

5.5%

$172

$9,886

$30,886

Be sure to compare the monthly payment with the total cost when you are considering consolidating or refinancing student loans, Kantrowitz says. Your monthly payment could be lower – sometimes much lower – but you could pay thousands of dollars more in interest.

Of course, you’ll want to compare more than just your monthly payment and interest rate to determine whether consolidating or refinancing your student loans might make sense.

What to Consider When Choosing the Best Student Loan Refinancing Company

You can select the right loan refinance company for your needs by reviewing eligibility requirements and these key factors:

Loan refinance rates

Low interest rates are key. When you compare student loan refinance companies, look for competitive interest rates so you can pay the lowest annual percentage rate possible. You can choose between fixed rates and variable rates, depending on the lender.

  • Fixed-rates range. Loan refinance rates will vary based on your lender and credit, as well as loan terms and market rates. Fixed-interest-rate loans have a rate and monthly payment that doesn’t change over the life of the loan.
  • Variable-rates range. Variable-rate loans may initially have lower interest rates than fixed-rate loans.

Student loan companies usually advertise interest rate ranges on their websites, so that’s a good place to start. Some lenders offer a rate check option. This allows you to prequalify or see estimated loan refinance rates and terms using a soft credit check, which won’t hurt your credit. It’s a good idea to check rate options before you formally apply.

Loan and refinancing terms

Make sure a student loan refinancing company offers terms that meet your needs. Compare loan amounts and repayment terms to determine a good fit.

  • Maximum loan amount. Most people won’t need to worry about maximum loan amounts. Loan amounts range from $75,000 to $500,000. In some cases, lenders don’t have maximums. But this could be a concern for some borrowers with an exceptionally high student loan balance.
  • Minimum loan amount. Many student loan refinancing companies will require you to refinance at least $1,000, and some may expect you to refinance more. If you have a small amount of student debt, you might not be able to refinance it.
  • Loan repayment term. Most refinancing lenders offer loan repayment terms of 10, 15 and 20 years. Choosing a shorter repayment term could increase your monthly payment but reduce the interest you pay and get you out of student debt sooner.
  • Autopay deduction. Many lenders offer borrowers a 0.25-point APR discount if you sign up for autopay.

Repayment and hardship options

If you need flexible repayment or want hardship options available in case of emergency, find out what lenders offer. Some lenders may have flexible repayment options, perhaps allowing you to make interest-only payments for a certain period of time. Deferment, forbearance and other hardship options may be available, too.

Fees

Interest rate isn’t the only cost you’ll face. Refinanced student loans may come with origination, late or returned payment fees.

Customer service

Learn about how well a student loan refinancing company does with customer service by reading student loan reviews. You’ll want to know what experts and other consumers have to say about a loan refinance lender before you sign on the dotted line.

Overall, interest rate and ease of refinancing are the most important considerations when refinancing, Hornsby says, and that can guide your decision-making. Also, take a look at how generous the forbearance terms are and which servicer the company uses.

“That said, student loan refinancing is really a commodity,” Hornsby says. “You’re looking for the lowest interest rate with the least amount of pain in the application process. Luckily, that process is generally pretty fast and easy.”

View More Best Student Loan Refinance Companies

Best for fixed APR

The Rhode Island Student Loan Authority is a nonprofit quasi-state authority that provides college financing to students and parents. The lender specializes in providing loans to Rhode Island residents and students, though not all loans have residency requirements.

Before You Apply

  • Loan types: Undergraduate, Graduate, Refinance, Parent Loan.
  • Minimum FICO credit score: 680.
  • Co-signer required: No.

Best Features

  • Students can be enrolled less than half time and still qualify.

  • Refinancing loans do not have residency requirements.

See full profile

Best for small loan amounts

EDvestinU is a nonprofit student loan lending and refinancing organization. It offers student loans to borrowers in all 50 states. Undergraduate and graduate loans and student loan consolidation are available.

Before You Apply

  • Loan types: Undergraduate, Graduate, Refinance, International Student Loan.
  • Minimum FICO credit score: 675 with co-signer.
  • Co-signer required: No.

Best Features

  • Loans are available from $1,000.

  • Borrowers can make full payments while in school, pay the interest only or defer payments.

  • EDvestinU student loans have no application or origination fees.

See full profile

Best for ACH discount

PNC Bank was established in 1845 and operates in all 50 states. The bank is engaged in a number of community efforts, including its Grow Up Great program in conjunction with Sesame Workshop and various financial literacy efforts. For students, PNC offers opportunities to win $2,000 scholarships toward education expenses. PNC provides a range of loans for students at all stages of postsecondary education, including professional training loans and refinancing.

Before You Apply

  • Loan types: Undergraduate, Refinance, Medical.
  • Minimum FICO credit score: Not disclosed.
  • Co-signer required: No.
  • Better Business Bureau rating: A+.

Best Features

  • No co-signer or collateral is required to apply.

  • Loans are available to students in 150 countries.

  • Borrowers can get discounts on housing and phone plans.

See full profile

Best for co-borrowers

The Massachusetts Educational Financing Authority offers private student loans to undergraduate and graduate students nationwide who are enrolled at least half-time at an eligible nonprofit college or university. Student loan refinancing is also available for qualified U.S. borrowers.

Before You Apply

  • Loan types: Undergraduate, Graduate, Refinance.
  • Minimum FICO credit score: Not disclosed.
  • Co-signer required: Not disclosed.

Best Features

  • Offers co-borrower release on the 15-year student deferred repayment option

  • Defers loan repayment for up to five years while you're in school

  • Allows students to borrow up to the cost of attendance minus financial aid

See full profile

Advertising Disclosure: Some of the loan offers on this site are from companies
who are advertising clients of U.S. News. Advertising considerations may impact
where offers appear on the site but do not affect any editorial decisions,
such as which loan products we write about and how we evaluate them. This site
does not include all loan companies or all loan offers available in the marketplace.


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These borrowers are excluded from Biden’s new expanded student loan consolidation https://manderfeld.info/these-borrowers-are-excluded-from-bidens-new-expanded-student-loan/ Mon, 11 Oct 2021 18:32:05 +0000 https://manderfeld.info/these-borrowers-are-excluded-from-bidens-new-expanded-student-loan/ WASHINGTON, DC – OCTOBER 08: US President Joe Biden delivers remarks in the South Court Auditorium … [+] in the Eisenhower Executive Office Building on October 08, 2021 in Washington, DC. (Photo by Chip Somodevilla / Getty Images) Getty Images Last week, the Department of Education announced huge changes to the Public Service]]>

Last week, the Department of Education announced huge changes to the Public Service student loan consolidation"}” data-sheets-userformat=”{"2":8705,"3":{"1":0},"12":0,"16":10}”>student loan consolidation Forgiveness (PSLF), a federal loan forgiveness program for distressed students.

Through systematic reforms, the Biden administration is temporarily relaxing requirements that limited PSLF eligibility to certain types of federal student loans and certain repayment programs. Once the changes are implemented, the PSLF program will effectively be temporarily expanded to include more types of federal student loans (such as FFEL loans and federal Perkins loans) and most types of payments made under any plan. refund available. The result will be a major expansion of the program that could ultimately benefit nearly 600,000 student loan borrowers, according to the Department of Education student loan consolidation

But despite the importance of the Biden administration’s actions, a number of borrowers and student loans will still be excluded from the PSLF changes. Here is a preview.

Parent PLUS loans excluded from the new PSLF relief

Parent PLUS loans are a type of federal student loan granted to the parent of an undergraduate student. While the loan benefits the student (the child), the borrower is the parent. Parent PLUS loans generally have higher interest rates and fewer repayment plan options compared to other types of federal student loans.

Parent PLUS loans may be eligible for Public Service Loan forgiveness if they are bundled into a Federal Direct Consolidation Loan and repaid under an Income-Conditional Repayment Plan (ICR) (Note that this is not the optimal solution for all Parent PLUS borrowers). However, while the new changes to Biden’s PSLF will allow payments made before the direct loan consolidation to potentially qualify for the PSLF, Parent PLUS loans are expressly excluded from this new reform. As a result, payments made on Unconsolidated Federal Parent PLUS Loans will continue to not count against the PSLF.

FFEL consolidation loans for a spouse excluded from the changes to the PSLF

One of the hallmarks of the new PSLF program expansion is that payments made on FFEL program loans (a former type of federal student loan issued by commercial lenders) are now eligible for student loan forgiveness. This was not the case under the original eligibility rules. However, FFEL borrowers still need to consolidate their FFEL loans through the Federal Direct Consolidation Loan program before October 31, 2022 to qualify for the new benefit.

One type of FFEL student loan is a joint or joint consolidation loan – a now defunct program that allowed two spouses to combine their federal student loan balances into a single loan, with both spouses jointly responsible for its repayment. The program was halted, but some borrowers, including those who have since divorced, are stuck with these types of loans. Joint FFEL Consolidation Loans cannot be reconsolidated into a Federal Direct Consolidation Loan under current federal law and therefore may not qualify for PSLF. It would probably take an act of Congress to fix this problem.

Payments made before October 2007 do not count for the PSLF

The PSLF program was promulgated in October 2007, and any payments made prior to the inception of the program cannot count toward the program’s student loan waiver term. The Biden administration’s new PSLF changes do not (and cannot, legally speaking) change this rule. Therefore, payments made prior to the creation of the civil service loan forgiveness in October 2007 will continue to be excluded.

Private student loans excluded from PSLF modifications

Private student loans are not covered by the new administration changes to the PSLF. This is because the PSLF is a federal student loan program and Biden’s legal authority is limited to actions under federal law. The Biden administration relied on the HEROES Act of 2003 to enact sweeping changes to the PSLF program, but that law only governs federal student loan programs. It does not authorize Biden to provide relief to private student loan borrowers, and federal law does not allow consolidation of private student loans into a federal loan.

Borrowers who have already paid off their student loans will not benefit from the changes to the PSLF

Student loan borrowers who could have gotten relief from the new PSLF changes, but who paid off their student loans before last week’s announcement, will not be eligible for any benefits under the new Ministry of Education rules. .

Further reading

Biden to transform civil service loan forgiveness with huge changes: key details

Student Loan Forgiveness Changes: Who Qualifies and How to Apply for Biden’s Relief Extension

What Navient and FedLoan borrowers should know as major changes in student loan service loom

Biden administration describes potentially sweeping changes to student loan forgiveness and repayment programs


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5 Best student loan consolidation Refinancing Companies of October 2021 | Personal finance https://manderfeld.info/5-best-student-loan-refinancing-companies-of-october-2021-personal-finance/ Fri, 08 Oct 2021 20:44:45 +0000 https://manderfeld.info/5-best-student-loan-refinancing-companies-of-october-2021-personal-finance/ Most, if not all, lenders require that you be a U.S. citizen or permanent resident in order to refinance your student loans. If your]]>

Most, if not all, lenders require that you be a U.S. citizen or permanent resident in order to refinance your student loans. If your student loan consolidation"}” data-sheets-userformat=”{"2":8705,"3":{"1":0},"12":0,"16":10}”>student loan consolidation are foreign, it is recommended that you build up sufficient credit in the United States to qualify for refinancing.

Best Student Loan Refinance FAQs

Can You Refinance Federal Student Loans?

Yes, you can refinance federal student loans even when these types of loans offer a consolidation option. However, note that you will lose the benefits of the Federal Student Loan, including repayment options student loan consolidation

How to refinance a student loan?

First, decide if refinancing is the right option for you, as choosing to refinance your federal loan will eliminate various advantages of the federal loan, including low interest rates, repayment grace periods, and options to pay off. abstention / adjournment. Once you have made up your mind, you can research the rates online and choose the one that works best for you.

Should You Refinance Your Student Loans?

Refinancing your federal student loan is not the best option for everyone. Since federal loans generally have nice terms and benefits, switching to a private lender will eliminate all federal benefits. Therefore, it is important to check whether refinancing benefits you more than consolidating your federal student loan. If refinancing lowers your interest rate further and saves you money, it may be worth it.


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eligibility and how to apply https://manderfeld.info/eligibility-and-how-to-apply/ Thu, 07 Oct 2021 23:31:36 +0000 https://manderfeld.info/eligibility-and-how-to-apply/ A federal program broke its promise to provide student debt relief to thousands of public servants, including teachers, police and firefighters. Now the government is trying to do it right. On Wednesday, the U.S. Department of Education announced sweeping changes to its civil service loan forgiveness program after thousands of borrowers requested forgiveness, almost all […]]]>


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4 credit unions for refinancing student loans October 2021 https://manderfeld.info/4-credit-unions-for-refinancing-student-loans-october-2021/ Thu, 07 Oct 2021 20:38:50 +0000 https://manderfeld.info/4-credit-unions-for-refinancing-student-loans-october-2021/ Our goal is to give you the tools and the confidence you need to improve your finances. While we do receive compensation from our partner lenders, whom we will always identify, all opinions are ours. Credible Operations, Inc. NMLS # 1681276, is referred to herein as “Credible”. If you are considering refinancing a student loan, […]]]>

Our goal is to give you the tools and the confidence you need to improve your finances. While we do receive compensation from our partner lenders, whom we will always identify, all opinions are ours. Credible Operations, Inc. NMLS # 1681276, is referred to herein as “Credible”.

If you are considering refinancing a student loan, there are several lender options to choose from, including credit unions. Because credit unions are not-for-profit organizations, a credit union student loan refinance may come with lower interest rates than banks.

Here’s what you need to know about refinancing student loans with a credit union:

4 credit unions for refinancing student loans

Here are some credit unions that offer student loan refinancing. Note that PenFed is a credible partner lender.

Lender Fixed rates from (APR) Variable prices from (APR) Min. credit rating Eligibility
First Tech Federal Credit Union Check with the lender Check with the lender Check with the lender
  • Become a member of First Tech
  • Have federal or private student loans from a qualified school
  • Be a U.S. citizen or permanent resident
Federal Navy Credit Union Check with the lender Check with the lender Check with the lender
  • Be a federal member of the Navy
  • Have federal or private student loans
  • Be a U.S. citizen or permanent resident
PenFed*

2.89% +

N / A 670
  • Be a PenFed member
  • Have private or federal student loans
  • Be a U.S. citizen
  • Have at least $ 7,500 in student loans
Credit union services Check with the lender Check with the lender Check with the lender
  • Be a member of Service Credit Union
  • Have private or federal student loans during repayment or grace period
  • Be a U.S. citizen or permanent resident
  • Graduate from an accredited public or private non-profit school

All APRs reflect auto-pay and loyalty discounts where applicable

* To note: This lender is a credible partner.

First Tech Federal Credit Union

First Tech Federal Credit Union offers student loan refinancing for private and federal student loans, including Parent PLUS loans.

Refinancing with First Tech might be a good option if you expect to earn more income in the future. You can start with lower monthly payments with the First Tech Balloon Loan or Interest-Only Loan, then make larger payments later.

Federal Navy Credit Union

With Navy Federal Credit Union, you can refinance private and federal student loans. Parents also have the option of combining loans for several children.

If you have a small income, refinancing with Navy Federal might be easier to qualify – you must earn at least $ 24,000 per year (or $ 1,200 if you have a co-signer).

PenFed

PenFed offers both fixed rate refinancing for any federal or private student loan. As of 2020, PenFed is also the only lender that allows spouses to refinance their loans together.

PenFed could also be a good option if you are looking for a short co-signer release period – you can apply for the co-signer release after 12 months of consecutive on-time payments.

Credit union services

If you graduated from a public or private non-profit school, you may be eligible to refinance your student loan with Service Credit Union. Refinancing your loans through Service Credit Union can be a good idea if you are looking for flexible repayment terms.

Learn more: When to refinance student loans

How to refinance student loans with a credit union

If you’re wondering how to refinance student loans with a credit union, follow these four steps:

  1. Shop and Compare Credit Unions: Make sure you compare as many credit unions as possible to find the loan that’s right for you. Consider not only interest rates, but also repayment terms and fees charged by the credit union. Remember that you will also need to join the credit union to be eligible for refinancing, so make sure you are eligible for membership.
  2. Choose the loan option you prefer: After comparing credit unions, choose the loan option that suits your needs.
  3. Complete the request: At this point, you will need to complete a full application and submit all required documents, such as pay stubs or tax returns. The lender will examine your credit and your debt-to-income ratio (DTI) to determine your eligibility and ability to repay the loan. Keep in mind that each lender has their own minimum credit score for refinancing.
  4. Sign for your loan: If you are approved for refinancing, you will need to sign up for the loan. Make sure you keep making payments on your old loans until your new loan is processed.
Keep in mind: While you can refinance federal student loans, you will lose your federal benefits and protections, including access to income-based repayment plans and student loan cancellation programs.

On the other hand, refinancing private student loans might be a good option. You may qualify for a lower interest rate on student loans through refinancing, which will lower the overall cost of your loan. Since private student loan forgiveness unfortunately does not exist, refinancing could be an easy way to pay off your loans more easily.

You can use our calculator below to see how much you can save by refinancing your student loans.

Step 1. Enter your loan balance

Step 2. Enter the current loan information

Step 3. Enter your new loan information to start calculating your savings

Lifetime savings
Increased lifetime cost
$

New monthly payment
$

Monthly savings
Increased monthly cost
$

If you are refinancing your student loan at
%
interest rate, you
can save
will pay extra
$

monthly and repay your loan in
. The total cost of the new loan will be
$.


Does refinancing make sense to you?
Compare offers from major refinance lenders to determine your actual savings.

Consult the personalized rates

Checking rates will not affect your credit score.

To verify:

How Credit Unions Are Different From Other Lenders

While credit unions may seem similar to banks and online lenders, there are also a few important differences to keep in mind.

Credit unions Banks Online lenders
For profit No Yes Yes
Physical branches available Yes Usually yes No
Site Local or national Local or national At national scale
Banking services available Yes Yes Depends on the lender
Online loan available Depends on the lender Depends on the lender Yes

One of the most positive things about credit unions is that they are not-for-profit organizations. Unlike banks and online lenders, credit unions operate primarily to serve their members. This means that credit unions could offer lower interest rates and lower fees than other lenders.

However, credit unions also have their own drawbacks. For example, credit unions are often smaller organizations, which means you might not take advantage of as wide a range of services as a bank.

They also sometimes lag behind online banks and online lenders specializing in technology and online user experience.

Learn more: Pay off student loans

Compare multiple lenders to get the best student loan refinance rate

Before refinancing your student loans, it is essential to consider as many lenders as possible to find the loan that is right for your needs. It will also help you get a rate that works best for you.

Advice: If you have already decided to refinance with a credit union, it is a good idea to research local credit unions in your area, as they may offer more perks and benefits.

If you are wondering how competitive your loan is and whether refinancing is a good idea, the loan appraisal tool below can help. Simply enter your APR, credit score, monthly payment, and remaining balance (estimates are good) to see how your loan compares.

Loading the widget – Loan-score-tool

Keep reading:

About the Author

Eric Rosenberg

Eric Rosenberg is an expert in personal finance. His work has been featured in Business Insider, Investopedia, The Balance, The Huffington Post, MSN Money, Yahoo Finance, Mint.com and more.

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Major changes to student loan forgiveness could come this week https://manderfeld.info/major-changes-to-student-loan-forgiveness-could-come-this-week/ Sat, 02 Oct 2021 07:00:00 +0000 https://manderfeld.info/major-changes-to-student-loan-forgiveness-could-come-this-week/ President Joe Biden (Photo by SAUL LOEB / AFP via Getty Images) AFP via Getty Images Major changes to the forgiveness of student loans could come this week. Here’s what you need to know – and what it means for your student loans. Student loans As first reported by NPR, the U.S. Department of Education […]]]>

Major changes to the forgiveness of student loans could come this week.

Here’s what you need to know – and what it means for your student loans.

Student loans

As first reported by NPR, the U.S. Department of Education is expected to announce a major overhaul of the civil service loan forgiveness program this week. The program – which helps officials get their federal student loans canceled – has been hampered by allegations of mismanagement, low approval rates and widespread confusion among student loan borrowers. Major changes should include two main approaches:

  1. Simplify student loan cancellation: Simplify the cancellation of long-term student loans through the federal rule-making process; and
  2. More student loan discount: Use executive action to make it easier for student loan borrowers to get their student loan forgiveness through relaxed rules and requirements retroactively.


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Biden administration describes potentially sweeping changes to student loan forgiveness and repayment programs https://manderfeld.info/biden-administration-describes-potentially-sweeping-changes-to-student-loan-forgiveness-and-repayment-programs/ Thu, 30 Sep 2021 07:00:00 +0000 https://manderfeld.info/biden-administration-describes-potentially-sweeping-changes-to-student-loan-forgiveness-and-repayment-programs/ WASHINGTON, DC – SEPTEMBER 24: US President Joe Biden delivers remarks from the State Dining Room … [+] from the White House on September 24, 2021 in Washington, DC. (Photo by Anna Moneymaker / Getty Images) Getty Images The Biden administration is preparing to move forward with a process to enact potentially sweeping changes to […]]]>

The Biden administration is preparing to move forward with a process to enact potentially sweeping changes to key federal student loan cancellation, repayment and relief programs.

The US Department of Education has released draft proposals to reform federal student loan programs as part of Negotiated Rules Development, which is a process of rewriting federal regulations. The Ministry also finalized the negotiated rule-making committee, which is made up of key stakeholders who will work together to find consensus during several rounds of public hearings. The proposals were originally published by POLITICO.

The administration’s proposals call for significant changes in a number of federal student loan programs.

Total and Permanent Disability (TPD) Release Reforms for Federal Student Loans

The Total and Permanent Disability Release (TPD) program cancels federal student loan debt for disabled borrowers. The Department proposes several reforms:

  • Eliminate post-discharge surveillance. Under current law, borrowers must report their employment status and employment income for three years after release from TPD. If they don’t respond or earn too much, the canceled loans can be reinstated. The Biden administration recently temporarily removed the surveillance period through executive action and is now asking that the change be made permanent.
  • Facilitate the eligibility of borrowers receiving Social Security disability benefits for TPD discharge by increasing the number of SSA categories that would lead to automatic discharge, and expanding the type of SSA documentation that can be accepted for discharge approval.
  • Facilitate the eligibility of recipients of a disability pension not covered by social security asking a health care provider other than a doctor to certify that they are disabled. Currently, only a physician or DO can certify a PDT discharge request. Nurse practitioners, physician assistants and therapists cannot.

Reforms to the remission of public service loans (PSLF)

The Public Service Loan Forgiveness Program (PSLF) allows borrowers to obtain forgiveness of their federal student loans after working for at least 10 years in an eligible job in the public service. But the PSLF program has specific, and often opaque, eligibility criteria that limit the program to only direct federal student loans and income-based repayment plans. These criteria have historically not been well communicated to borrowers, which has contributed to a very low approval rate.

The administration proposes many reforms of the PSLF:

  • Automatic PSLF applications. Currently, borrowers must confirm their application to the PSLF or certify their employment. The department proposes to use data matching tools between various federal agencies to automatically determine eligible jobs and payments, reducing the risk of human error with manual reviews of claims.
  • More flexibility in payments. The ministry is proposing to relax the strict requirements for a PSLF payment to “account” by allowing many more payments to qualify, “even if the payment is made in installments or outside the 15-day payment window. »Authorized under the PSLF program. Lump sum payments would also count toward multiple PSLF payments, overriding previous policies that prohibited this.
  • Allow certain postponements and abstentions to count as payments in cases where this status would otherwise count for qualifying PSLF employment, such as postponement of graduate scholarship.
  • Correct the trap of direct consolidation. Currently, federal student loan consolidation effectively restarts the clock on a borrower’s PSLF repayment term. The Department proposes to change this, including for consolidation loans which contain FFEL loans, which do not count for the PSLF. It is not entirely clear whether the Department is also proposing to allow FFEL payments to be recorded in the PSLF following a direct loan pool.
  • Create an appeal or reconsideration process for rejected PSLF applications. This does not currently exist.
  • Develop eligible employment to include other private organizations that provide a public service but are not necessarily 501 (c) (3) registered non-profit organizations.

Student loan interest capitalization reforms

One of the most common issues with federal student loans is the accumulation and capitalization of interest, especially for borrowers who are paying off their student loans under an income-based repayment plan.

According to a Congressional Budget Office report released last year, 75% of borrowers on an income-based repayment plan owed more than their original borrower due to the accumulation of interest. This interest can be periodically capitalized – added to the principal balance – through a number of trigger events such as the non-renewal of a repayment plan on time each year, a request for abstention, a default or a change in repayment plan. The capitalization of interest can have a cumulative effect, causing the balance to grow rapidly.

The Ministry of Education “proposes to eliminate capitalization events when it has the power”, including for each of the above events. The Department notes, however, that it would not be able to eliminate interest capitalization for borrowers specifically in Income Based Repayment (IBR), one of the many income based repayment options available. because the capitalization of IBR interests is enshrined in law. This means that Congress would have to pass a law to make associated changes.

New Income-Driven Repayment Plan for Federal Student Loans

The Biden administration is proposing the creation of a new income-based repayment plan. Currently, there are four income-focused plans, each with its own formula and eligibility criteria: Income-Conditional Repayment (ICR), Income-Based Repayment (IBR), Pay As You Go you earn (PAYE) and the revised payment as you earn (REPAYE).

Unlike its other proposals, however, the Education Department is formulating its proposal for a new income-driven plan on a more open basis by asking questions rather than offering a firm plan. The ministry suggests a more affordable, income-oriented option, primarily for undergraduate borrowers, with a larger income waiver and shorter repayment term for low-income borrowers, and a potentially longer repayment term for low-income borrowers. borrowers receiving loans for graduate studies.

Other student loan relief programs

The ministry is also calling for reforms to the Closed Schools Exit Program, which allows borrowers to apply for the cancellation of their federal student loans if their school closes and they were unable to complete their degree program or certificate accordingly.

The ministry is also proposing significant changes to the Borrower Against Repayment Defense, a program that allows borrowers defrauded by their schools to request the cancellation of their associated federal student loans. The Biden administration wants to relax the standards of proof and timing previously adopted by the Trump administration and streamline the application process, especially for groups of borrowers who all have similar claims.

Next Steps for Changes to the Student Loans Program

At this point, the Ministry’s proposals are just that – proposals. The proposals will be reviewed, evaluated and potentially modified during the next negotiated rule-making sessions. The development of negotiated rules is a long process involving several rounds of public hearings by a rule-making committee made up of key stakeholders. It may take a year or two (or more) to finalize new regulations.

The first negotiated rule-making sessions begin next week, with subsequent hearings scheduled for November and December. All sessions will be virtual and open to the public. More information can be found here.

This article has been updated to reflect the ambiguity regarding the ministry’s proposals for the reform of the PSLF, particularly regarding whether payments made on FFEL loans would be eligible for the PSLF after the direct loan consolidation.

Further reading

Biden urged to fix civil service loan forgiveness by automatically forgiving civil servants’ debt

What Navient and FedLoan borrowers should know as major changes in student loan service loom

These student loans are excluded from Biden’s forgiveness and loan relief programs – here’s why

Student loan borrowers: expect these 4 things by January


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Best Student Loan Refinance Lenders For Parents August 2021 – Forbes Advisor https://manderfeld.info/best-student-loan-refinance-lenders-for-parents-august-2021-forbes-advisor/ Thu, 30 Sep 2021 07:00:00 +0000 https://manderfeld.info/best-student-loan-refinance-lenders-for-parents-august-2021-forbes-advisor/ PenFed, short for Pentagon Federal Credit Union, offers student loan refinancing through a partnership with Purefy, an online-only student loan provider. Students can refinance their parents’ loans and take responsibility for repayment, or parents can refinance their own loans. You will need to become a member of PenFed Credit Union in order to refinance once […]]]>

PenFed, short for Pentagon Federal Credit Union, offers student loan refinancing through a partnership with Purefy, an online-only student loan provider. Students can refinance their parents’ loans and take responsibility for repayment, or parents can refinance their own loans.

You will need to become a member of PenFed Credit Union in order to refinance once you have been pre-approved for a loan, but there are no membership restrictions for refinancing clients and there is a minimal cost to join. You will then have access to other financial products as a PenFed member.

Additional details

Loan conditions : 5, 8, 12 and 15 years old

Loan amounts available: $ 7,500 to $ 300,000

Eligibility: The student must have obtained a bachelor’s degree. The borrower must have a minimum credit score of 700 and a minimum income of $ 42,000 if you are refinancing less than $ 150,000. (You should use a co-signer if your credit score is 670-699 and your income is between $ 25,000 and $ 41,999).

If you are refinancing $ 150,000 or more, you will need a minimum credit score of 725 and a minimum income of $ 50,000. (You should use a co-signer if your credit score is 670 to 724 and your income is $ 25,000 to $ 49,999).

Opt-out options: PenFed does not disclose a specific forbearance limit, but borrowers applying for repayment assistance have the option of receiving temporary (six months or less) or permanent assistance depending on their circumstances. After completing a support request, PenFed indicates that it will provide a personalized solution.


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What to do if you’re one of 16 million student loan borrowers left in limbo after your maintenance department closes https://manderfeld.info/what-to-do-if-youre-one-of-16-million-student-loan-borrowers-left-in-limbo-after-your-maintenance-department-closes/ Wed, 29 Sep 2021 07:00:00 +0000 https://manderfeld.info/what-to-do-if-youre-one-of-16-million-student-loan-borrowers-left-in-limbo-after-your-maintenance-department-closes/ Navient, the largest student loan company in the United States, is not renewing its government contract. Almost 16 million borrowers in total will have their loans transferred to new businesses by next year. Keep copies of all relevant student loan documents now in case they get lost during the transition. Learn more about Personal Finance […]]]>
  • Navient, the largest student loan company in the United States, is not renewing its government contract.
  • Almost 16 million borrowers in total will have their loans transferred to new businesses by next year.
  • Keep copies of all relevant student loan documents now in case they get lost during the transition.
  • Learn more about Personal Finance Insider loan coverage here.

Navient, a student loan company that manages federal student loans, this week announced plans to end its service contract with the government. The plan is still pending approval, but it is likely that around six million borrowers currently served by Navient will be transferred to the Maximus company.

Two other federal loan managers, Granite State Management and Resources and the Pennsylvania Higher Education Assistance Agency, are also not renewing their federal contracts. This brings the total number of borrowers in flow to nearly 16 million.

To find out if your loans are managed by one of these companies, check the initial correspondence you received from the federal government when you took out your loan.

Fortunately, there are several things you can do to prepare for the change – or avoid it altogether if you choose to do so.

Document all your current documents

One of the biggest issues you might face when your loans are transferred from one student loan manager to another is the lack of consistent record keeping. You’ll want to make sure that you can prove that you made timely payments on your loans, so that you can print or download your payment history from your lender’s website and keep it in a safe place.

It is especially important to keep track of your payment history if you participate in the civil service loan forgiveness program or follow an income-based repayment plan, as the time spent repaying these loans is crucial to possibly get a student loan discount.

You should also keep copies of all correspondence between you and your loan manager, including anything that refers to your enrollment in the PSLF or an income-based repayment plan. Save hard copies if you can and upload digital copies to the cloud.

Keep track of your credit report

When your loan is transferred from one manager to another, you may come across bad negative credit reports, such as an incorrect missed payment. It can continue to hurt your credit score if you don’t understand it, so get a copy of your credit report and know where your account is currently.

You can find your free credit report on annualcreditreport.com from any of the three major credit bureaus each week until April 20, 2022. Although this report does not give you your credit score, it will show you information. on your credit and payment history. , which lenders use to decide whether or not to give you a loan. Examining your credit report can help you figure out what you need to improve.

Get a New Manager with a Federal Direct Consolidation Loan

If you have multiple Federal Student Loans from your lender, you may want to consider consolidating them into one monthly payment with a Direct Consolidation Loan and bringing in a new loan manager. Here are the pros and cons of consolidation:

Refinance your loan with a private company

If you want to refinance your student loans, you can only do so with a private company. The government does not have a refinancing program.

This should be an option you are considering with extreme cautionbecause you will lose major federal protections when you refinance with a private lender. You will not be eligible for the coronavirus forbearance, which is currently in effect until January 31, 2021. Additionally, the Biden administration continues to consider forgiving student loans, which would not apply to loans. private.

Refinancing will allow you to choose a new supplier without waiting for the government to reassign you. You may qualify for a lower interest rate or a term better suited to your needs with a private company. You might also have the option of getting a variable rate loan from a private lender, while you can only get a fixed rate loan from the government. You can find our list of the best private student loans here.

Contact your repairer for any additional questions

As the federal government decides how to transfer nearly 16 million borrowers to new agents, your agent will likely have the most recent information about the future of your loan and likely be able to answer all of your questions.

If you don’t want to go through the tedious process of switching student loan companies, you can take steps to switch providers now. Otherwise, just keep a close eye on your documentation to make sure that errors don’t occur during the transition.


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