by Repayable | Aug 21, 2018 | Ask Jeni
Ask Jeni is brought to you in partnership with tuition.io, a company dedicated to helping the best companies free their employees from student loan debt.
My loan was sold from (Sallie Mae) to a third-party (Navient) that doesn’t seem to have income-based repayment. Are there other options that will allow me to lower my minimum monthly payments?
When your Federal student loans are sold from one servicer (Sallie Mae) to another (Navient), they remain Federal student loans and eligible for all federal student loan benefits including income-driven repayment, unless they’re in default. Navient is another federal student loan servicer.
That’s good news because you have the option to access income-driven repayment plans including the Income Based Repayment plan if your income is low relative to your eligible federal student loan debt.
To get on an income-driven repayment plan you’ll need to complete an application on the Federal Student Aid website. The application is completed through the Dept of Ed not through your specific loan servicer. Here’s the link to the
income-driven repayment plan application.
The process is really short and takes 10 minutes or less. It does require you to submit income information but the website is equipped to pull through information from your most recent tax return and it will automatically pull through your federal student loan information.
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by Repayable | Jul 24, 2018 | Ask Jeni
Ask Jeni is brought to you in partnership with
tuition.io, a company dedicated to helping the best companies free their employees from student loan debt.
My daughter is a Jr in High School. When should we start researching and applying for grants/scholarships and typically how long does it take to receive acceptance or denial responses for scholarship applications? I’d like to plan ahead if I know she won’t qualify for a particular grant/scholarship.
Your daughter will graduate high school in spring 2020 and plans to start college in the fall of 2020.
You can start researching scholarships now. Some scholarships may be accepting applications for Fall of 2020.
Grants are offered by the individual college. Once your daughter fills out the Free Application for Federal Student Aid (FAFSA), which will be available for her to do as early as July 1 2019, the schools she applies to/attends will use that information to determine her eligibility for grants and what her total financial aid package would look like. Financial aid can also include student loans, which have to paid back, and work study.
The time frame for finding out if your daughter received a scholarship will vary by individual scholarship. There’s no standard in terms of when you will find out.
You will find out if your daughter received grant money after the FAFSA is submitted and your daughter has applied to individual schools, the colleges time frame for awarding financial aid will vary by institution.
I’m glad you’re thinking about this early!
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by Repayable | Jun 26, 2018 | Ask Jeni
Ask Jeni is brought to you in partnership with tuition.io, a company dedicated to helping the best companies free their employees from student loan debt.
I have twins that have two more years of college. I’m thinking of taking out a home equity loan. Is this the best way to pay for their college or should I look at Direct student loans?
Deciding which loan type, private or federal, works best to pay for your children’s education comes down to two main thoughts. The first is interest, ideally you would pick the loan option with the lowest fixed interest rate. The second concern is benefits, if you qualify for and are interested in Public Service Loan Forgiveness (PSLF) you would want to consider a federal student loan.
Let’s talk through both choices.
Direct Parent PLUS Loans:
A Parent PLUS loan is the federal student loan option you have available as a parent. Parent PLUS loans will remain in your name until they’re repaid. Your twins won’t be able to consolidate this loan with any of their own federal student loans to transfer ownership. You would take out separate parent PLUS loans for each child.
The benefit of a Parent PLUS loan is that you can be eligible for certain federal student loan benefits like income-driven repayment plans and loan forgiveness. However, Parent PLUS interest rates are pretty high (in 2017-2018 interest rates were 7%).
Private Loans:
If you’re able to secure a home equity loan or an alternative line of credit for a lower fixed interest rate than the Parent PLUS loans this might be a better choice. The main thing to ensure is that you are able to afford the monthly payments on any private line of credit you obtain. There are no repayment benefits and no forgiveness options for these private lines of credit, which is just fine as long as you can afford payments.
A few general things to consider about borrowing to pay for your children’s education:
– If your children can get Direct subsidized loans for their undergraduate degree, those typically have a lower interest rate and don’t accrue interest while they’re enrolled in courses.
– It’s important to consider the ability to borrower for any future children. If you borrow for the twins will you be able to borrow for other children in your family?
– Does borrowing for college education impact your ability to manage your own debt (mortgage, credit card, auto, etc)? Does borrowing impact your ability to save for retirement?
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by Repayable | Jun 19, 2018 | #Millenniallife, Ask Jeni
Ask Jeni is brought to you in partnership with tuition.io, a company dedicated to helping the best companies free their employees from student loan debt.
I am trying to figure out how to balance living and enjoying life now while seeing my student loans as my “mortgage” or deciding to refinance and trying to pay off as much as possible. Is there some middle ground? I don’t want to sacrifice my life now as there is NO guarantee for the future. Do you have any advice on how to evaluate the best move so I can balance the importance of paying off debt but also enjoy life?
This is such a great question and it requires a ton of unpacking! The repayment strategy that fits best with your life is one that meets both your financial goals and your life goals. It can be tough to strike a perfect balance but here are some tips that every borrower can apply.
1. Make an active decision about your repayment strategy.
It often feels like student loan debt is looming over you and try as you might to ignore it, student loan debt nags at your consciousness. If your student loan debt is hanging over you it can often help to make an active decision about your repayment strategy. That means taking a good look at what you want for yourself financially and what you want for your life and finding a strategy that helps you balance those desires. I’ve often seen borrowers who get a lot of relief just from examining their situation and making an active choice, whether that’s repaying student loans slowly and over a long time like a mortgage or repaying student loans aggressively and sacrificing in the short term.
2. Figure out how much an aggressive repayment strategy would cost you each month and what you would have to sacrifice.
If you’re considering repaying aggressively (by refinancing or making extra monthly payments), a good first step is to simply figure out what aggressive monthly payments would look like and see how much that would actually impact your quality of life. You may be surprised to see that although aggressive repayment would require financial sacrifice, you don’t have to sacrifice as much as you thought and that you can still afford to do the most important things that enrich your life.
3. Make sure your financial house is in order before tackling student loan debt aggressively.
Aggressive repayment is just that, aggressive. That means there’s not a lot of margin for error on your part, so you want to have your ducks in a row. You need to have an emergency fund with at least three months expenses. You need to be contributing enough to your employer-sponsored retirement (if you have one) to get the full employer match. If you don’t have an employer-sponsored retirement you need to be contributing to an IRA. If you’re not able to afford to do these things, then I would advise against aggressive repayment.
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by Repayable | Jun 12, 2018 | Ask Jeni
Ask Jeni is brought to you in partnership with tuition.io, a company dedicated to helping the best companies free their employees from student loan debt.
How do I pick the right student loan for graduate courses? What are the benefits of a Direct PLUS federal loan vs a private loan such as Sallie Mae?
If you have access to federal student loans they are almost always your best bet. Here’s why.
- Typically federal student loans, including Direct PLUS loans, have a lower fixed interest rate than private student loans.
- Federal Direct loans are also eligible for loan forgiveness but private student loans aren’t eligible.
- Federal student loans also have the most flexibility during repayment, there are income-driven plans and options to defer payments. Private student loans have less repayment flexibility.
Federal student loans have numerous repayment options, are eligible for loan forgiveness, and typically have lower fixed interest rates than private student loans. If you have access to enough Direct PLUS loans to cover the cost of your graduate courses, pick those over private student loans. If you don’t quite have enough money in Direct PLUS loans, borrow the Direct PLUS loans first then carefully borrow the amount you still need to cover your courses from a private lender.
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by Repayable | May 22, 2018 | Ask Jeni
Ask Jeni is brought to you in partnership with tuition.io, a company dedicated to helping the best companies free their employees from student loan debt.
I’ve been looking at debt reduction companies and wondered about pursuing someone to fight for my loans. I did some research and was not confident to invest in them and not sure if it works. What are your thoughts?
I get a lot of questions about hiring a debt reduction company (or a lawyer for that matter) to attempt to negotiate a reduced payment on student loans.
In general private companies offering to reduce the amount of student loan debt you owe are either:
1. A total scam.
or
2. Not technically a scam but charge you legal fees for unsuccessful attempts to reduce your debt.
Student loan debt is not a particularly negotiable debt, especially federal student loans. For the most part borrowers can’t discharge student loan debt in bankruptcy so there is no incentive for anyone to negotiate. The government can garnish your wages and seize your tax returns to collect their money so there’s nothing driving them to reduce your debt.
I would advise extreme caution in hiring anyone to do any student loan debt reduction work for you.
Here’s an article from the Consumer Finance Protection Bureau about best practices for debt reduction organizations. It’s not specific to negotiating student loan debt but it has a lot of helpful cautions in it. I recommend taking a look at it.
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