Explore All Your Options For Paying Off Student Loans
Depending on where you live and work, you could qualify for partial or total forgiveness of your student loans. If you arent eligible, look into other options for dealing with your student loans, and check for any new developments or programs.
Even if you started out on a certain plan, you dont have to stick with it forever. Instead, feel free to adjust your plan as your circumstances and goals change over the years.
By exploring all your options, you can find the best student loan solution for you, and move towards a debt-free life.
You’ve Got Options If You Were Denied Pslf
If your application for Public Service Loan Forgiveness was denied, you may be able to receive loan forgiveness under the Temporary Expanded Public Service Loan Forgiveness opportunity.
As part of this opportunity, the Department of Education reconsiders your eligibility using an expanded list of qualifying repayment plans.
This TEPSLF opportunity is temporary, has limited funding, and will be provided on a first come, first served basis. Once all of the funds are used, the TEPSLF opportunity will end.
Visit StudentAid.gov for detailed information on how to be reconsidered for loan forgiveness.
How Do You Apply For Public Service Loan Forgiveness
Fill out and submit the Employment Certification Form each year, or as you change jobs.
FedLoan Servicing will review your information and let you know if you qualify. They might ask for more information, like pay stubs, W-2s or other documentation.
FedLoan Servicing will let you know how many qualified payments you have made, and how many payments you will need to make until you qualify for forgiveness.
Currently, there is no limit on the amount forgiven under PSLF. The full amount of your federal student loans is eligible for forgiveness.
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If You Need Student Loan Help
If youre struggling with your student loan debt, first speak with your servicer or lender to:
Discuss repayment options.
Take a temporary payment pause.
Temporarily reduce your monthly payments.
If your problem is with your lender or servicer or youre not getting the help you need, look for a legitimate student loan help organization that offers counseling. Consider these vetted resources for student loan help they are established organizations with verified histories:
Student loan help resource
Advice on debt settlement, bankruptcy, default and forgiveness. Licensed in Missouri and Illinois.
Many of these organizations offer advice for free. In some cases, you may need to pay a fee, as with a certified nonprofit credit counseling agency or if you hire an attorney.
None of the organizations above calls, texts or emails borrowers with offers of debt resolution.
Offers of help that you have not sought out are likely to be scams. While its not illegal for companies to charge for services such as consolidation or enrollment in a payment plan, those are steps you can do yourself for free.
Avoid any debt relief companies that demand money upfront.
Help For Student Loan Relief Is Free
You may have seen Google or social media ads making outrageous claims of providing immediate relief from student loan debt. Generally, these private companies offer help with consolidating loans and other basic student loan services.
For federal student loans, most of these advertised services are things you can actually do for free. The Department of Education and your federal student loan servicer can help you with a variety of tasks, including:
- Consolidating your federal student loans
- Lowering your monthly student loan payments
- Applying for student loan forgiveness programs
- Getting your loans out of default
- Applying for forbearance or deferment
Although you can do many of these tasks yourself, some people arent aware of this or think its more difficult than it is. Forms can also seem confusing to fill out. With so many options to consider, some borrowers cant tell the difference between real student loan repayment strategies and scams.
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Being Required To Pay An Application Fee
Real debt relief organizations do not require that you pay them an application fee to review your account and determine what they can do to help deal with your debt.
If youre being told that you need to pay some sort of application fee, or review fee, to get started on working toward debt relief, then its almost assured that youre speaking with the student loan scammer, and that you need to start looking elsewhere for assistance.
There is no reason, at all, whatsoever, for a company to charge you money without promising to deliver a specific service.
Ive even received horror stories from readers who spend hundreds or thousands of dollars on these so-called Application Fees, only to be told that theyre not eligible for any assistance from the company.
Why does that happen? Because the companies arent legitimate! Theyre claiming that theyll perform the review, then prepare to get some work done on their behalf, but the reality is that theyre just trying to collect as much cash from you as possible before abandoning you and hoping that you give up on pursuing them for a refund.
Student Loan Scams To Avoid
With little regulation, new student debt relief companies pop up all the time. Theyre often offering relief that seems too good to be true which likely means it is too good to be true.
Student loan scams come in many forms, making different claims for service that sound attractive. Here are some of the more common scams weve come across:
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Are Those Student Loan Forgiveness Calls Real Here’s What You Need To Know To Avoid Getting Scammed
With skyrocketing student debt and the Biden administration’s extension of loan forgiveness plans, watch out for scammers cold-calling to capitalize on your sense of hope.
Student debt is a nationwide plight, one that has an impact on 42.9 million Americans , according to the Department of Education’s most recent report. As a nation, we carry a total of $1.71 trillion of student debt nationwideat an average of $37,693 each, according to recent reporting by EducationData.org. This means, of course, that it takes decades for borrowers to pay off the principal and the accrued interest.
Whatever your stance when it comes to loan forgiveness, the fact that this form of debt dominates a huge swath of the United States population is indisputable. And those who carry student debt aren’t only 22-year-old college grads they’re also middle-aged and older adults. While, according to the report, 25- to 34-year-old Americans are the largest group of borrowers and 35- to 49-year-old Americans hold the largest amount of debt total , there are still 2.4 million people over 62 who owe a collective $92.7 billion in student debt. In other words: There are millions of grandparents out there who are still paying off the cost of their higher education.
Overpaying For Education Is Irony Of Ironies In America: Dave Ramsey
Best-selling author and personal finance expert Dave Ramsey reacts to a new report that in-state tuition has skyrocketed 211% over the past 20 years.
The Borrowed Future producer further emphasized that politicians and the higher education system have overlooked trade programs and vocational schools.
“America put its nose in the air and snubbed anyone who didn’t get a four-year degree for the last five generations,” he argued adding that “and it became a thing that if you didn’t go to college, you weren’t going to be successful.”
He insisted that the societal need for higher education is a “culture-wide con.”
Teachers get free access to the new documentary, “Borrowed Future,” produced by Dave Ramsey.
“The victims are 18-year-olds in this, and it’s sad,” Ramsey said.
“They’re delaying having kids. They’re delaying getting married. They’re delaying buying houses because they’re swamped and covered up and overwhelmed with this debt that they signed up for and did what everybody told them to do,” he continued.
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Law Firm Lawsuit Scams
Law firms are another way to scam students. In this case, the law firm that you go to states that they can settle your student loan debt. There are various ways that these law firms deceive students. The most common way is the cooperation between two scammer agencies. For example, you, as a student, go to the student aid company, and they advise you to get help from some law company. They also argue that a specific company can help you to deliver the same results by paying less money. After you agree on terms and conditions with the law company, the agency asks you to pay your student loan debt to their bank account so that they can negotiate with the loan lender.
Most frequently, the particular scammer law firm does not make any payment while negotiating with the lender. So, your loan debt goes into the default. It is not the only drawback that you will experience from those scammers. As they took thousands of dollars from you, your credit score will get worse. Therefore, you will leave off with additional debts. As you have a bad credit score, there will be no chances for you to consolidate the loan debt with credible agencies. So, before you make any serious meeting with the law companies, make sure to check the background and be hesitant if they ask for fees.
Personalized Student Loan Consultations
There are numerous student loan specialists offering personalized advice for individual student loan circumstances. This is a gray area in the world of student debt.
It probably isnt fair to label these individuals and companies as scams but, for many, calling them a reputable service would also seem like a stretch. I will add that much of what Im about to say about these consultants is my personal opinion developed from years of researching and blogging about student loan issues.
The Cause for Concern For most student loan borrowers, there shouldnt be a need to hire a specialist. Unlike preparing your taxes, where programs and eligibility can be extremely complicated, student loans are something that any borrower can manage. It may be a bit confusing at first and take some time to sort out, but you can do it.
Hiring a student loan specialist is like paying someone to clean your house. Even though it isnt a pleasant task, it is something that doesnt require outside help. Not only does going this route cost money, but you expose yourself to theft. Plus, you will likely do a better job when you do it yourself because you are more invested. It might take you longer, but you wont cut any corners.
Paying an attorney can be a costly option, but the rules and codes of conduct for attorneys are far more strict and closely supervised than for student loan consultants. It doesnt guarantee that you wont be duped, but it will dramatically reduce the chances.
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The Caller Prompts You To Sign A Document To Act On Your Behalf
Some of these phony companies will ask you to sign a document to authorize them to renegotiate your student loan payments.
Theyll even use phrases like well take care of everything, so you dont have to contact your servicer, to make you think this is done as a convenience to you. But in reality, what youre signing is a power of attorney, giving them the right to act on your behalf, legally.
Once they have this document, they can do anything from changing your accounts contact information to consolidating your loans to putting them in forbearance. And, in the worst of cases, they can use this power of attorney to get access to your bank account or other sensitive information.
Public Service Loan Forgiveness
Countless stories describe borrowers meeting eligibility requirements for several years until for some reason they dont. There are many reasons this can happen not the least of which because this is the most complicated student loan program available but it often stems from the Employment Certification forms borrowers are encouraged to submit yearly.
Borrowers planning on applying for PSLF send in Employment Certification forms to make sure their employment meets the requirements. Receiving approval based on that form may appear like a green light, but it doesnt give you the whole picture.
The problem is that the yearly certification only checks the eligibility of your employment, not of your loans. Because PSLF requires that your loans are Direct Loans in one of a few repayment plans, the optional yearly certification forms dont give an accurate representation of eligibility.
Here are the things that can disqualify you from PSLF even if your employment is approved:
Disqualifying payments: A qualifying payment is one made to the full amount due once a month. If you overpay, the amount due next month will not be the full amount, so it will not count, even if you pay what is normally considered the full amount due.
Disqualifying loan type: Only Direct Loans are eligible. If you consolidate certain loan types to Direct Consolidation Loans, they may not be eligible, and you cant reverse consolidation.
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Orders To Stop Making Payments
NO legitimate debt relief agency would tell you to stop making payments to your lender, student loan servicing company, or anyone else that you still owe money to.
You can rest assured that ANY reliable organization would have you continue making payments not just up until the point that the two entities are communicating with each other and attempting to find a resolution to your problem, but ever, period.
The only time youd ever want to even considering stopping making payments to a student loan debt lender is after youve received an official approval letter from the Department of Education, or from the student loan servicing company whos responsible for processing your monthly payments.
If you arent being told directly by DOE or your servicer to stop issuing payments, then its vital that you continue making them, because all it takes to Default on a Private Student Loan is a single missed payment, and you definitely dont want to go into default.
Here’s What To Do If You’ve Been Scammed
The first thing to know about being scammed is that it happens to everyone, and doesn’t mean anything about a person’s abilities. Tricksters and thieves are honing their skills and coming up with new tactics every day, so there’s no shame in clicking the wrong link or answering the wrong text. If someone has fallen victim, the next steps will depend on what, exactly, the losses look like.
“There is no risk minimization or recovery program that’s suitable for all circumstances,” says Velasquez. If a person’s SSN has been compromised, the first step is to freeze their credit so that no new lines of credit can be opened in that person’s name. If a scammer gets a person to create a new username and password, and that person has used the same password elsewhere, the next step is to change it on all other websites.
It’s not likely that someone who has been scammed will recoup their funds, unless it’s possible to cancel a credit card charge or a bank transfer before it goes through. “If you paid them in Bitcoin, or a wire transfer, or a money order, or gift cards, the reality is you’re not going to be able to recover that money,” said Velasquez.
Beyond these avenues of protection, it’s also possible to file a complaint with your state’s Attorney General as well as with the Consumer Finance Protection Bureau . While these avenues aren’t likely to take action on individual cases, the more complaints they receive, the more possible it is that they may shut down nefarious companies.
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Student Loan Debt Help
Before you take any serious action, keep in mind that none of the students need to pay for third parties while trying to solve the federal student loan debt issues. In private student loans, the case is a little bit different than this. However, if you have a federal loan, you can apply for forgiveness programs by yourself. It is a matter of choice for students. The process is harsh, and it takes time for students to get loan forgiveness. Cooperating with professionals is a great way to handle the case. However, you need to be careful about those companies because they might be student loan scammers. Before losing any hard-earned money, keep in mind the following points for further notice.
Student Loan Discharge For Special Circumstances
While student loan discharge isnt the same as forgiveness, it could leave you debt-free. In rare circumstances, borrowers can get their student loans completely canceled.
There are several situations when you could qualify for student loan discharge, including:
- Closed school
If you think you could qualify or want to learn more, speak with your loan servicer.
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What To Do If You Have Been A Victim Of A Student Loan Forgiveness Scam
Student loan scams are unfortunately very common. If you needed help and handed over your money or personal information to a fraudulent company, heres what you should do next:
- Contact your servicer immediately. Call your servicer right away if you think your information has been compromised. Your servicer can help you revoke any third-party authorizations.
- Contact your bank or credit card company. Next, notify your bank and credit card companies. They can place fraud alerts on your account to stop scammers from making transactions. You might also be able to get a refund for any fees you paid.
- File a report with the appropriate agencies. Its important to file a complaint with the FTC, CFPB, and your State Attorney General. When you report fraudulent activity to the FTC, it will give you a list of steps you can take to protect your identity, too.
- Monitor your credit report. Its a good idea to freeze your credit report with the three major credit bureaus: Experian, Equifax, and TransUnion. A credit freeze prevents scammers from opening accounts in your name. Be sure to keep an eye on your credit report to make sure nothing slips through the cracks.
- Change your passwords. Change your passwords for your FSA ID, student loan account, and bank or credit union accounts. Make sure to use strong passwords that will be difficult for scammers to guess. This way, they wont have access to your information.