How Much Money Can You Save With A Student Loan Settlement
How much money settling your student loans can save you depends on several factors, such as:
- How much you owe.
- Outstanding collection charges and late fees.
- How far behind you are on payments.
Sometimes, a settlement waives the late fees, collection costs or a portion of your interest. In some instances, you could get a small percentage of your principal balance waived as well. Depending on the circumstances, you might save 10 percent to 50 percent of your loan balance.
We Reduce Private Student Loan Debt
When you enrolled in college, you probably thought you were making an investment in your future, and you were. What you hadnt planned on was that the economy would tank, jobs would disappear and your student loans would become a huge burden following you around for the rest of your working life. Unfortunately, that is the reality many find themselves in today. With the economic downturn and recessions of the 2000s and 2010s, many went to college or pursued higher education to help their chances of landing a good paying job. Consequently, student loan debt has soared, higher than ever before. In particular, many were forced to take out higher interest rate private student loans, not backed by the federal government. Some less scrupulous schools lured people into education programs with promises of high paying jobs that never materialized. With tuition costs also soaring, private student loan debt has ballooned to crisis levels in this country. If you find yourself with less income than you anticipated and unable to keep up with student loan payments, there is help with an attorney negotiated student loan debt settlement.
Circumstances For Student Loan Discharge
- Permanent disability or death
- Unauthorized signature of the loan by the school without your knowledge
- False certification of student eligibility
- Unpaid refund, which is when you withdrew from school and it didnt return the required loan funds to your loan servicer
- School closure while you were enrolled
Discharging student loans through bankruptcy is extremely rare. It is technically not impossible, but demonstrating undue hardship is very difficult. Read more about the differences between forgiveness and discharge.
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How Much Does It Cost
This can be the scariest part of potentially working with a lawyer for student loan borrowers. How much are you going to have to pay and is it worth it? Given that student loan borrowers are already in debt, many feel that paying a lawyer for help simply doesn’t make sense.
However, it’s important for borrowers to know that there are a variety of fee structures and ways to pay a lawyer so that it can make financial sense.
According to Adam Minsky, there are four basic fee structures for working with a lawyer.
1. Consultation Fee: You might be able to pay an attorney for a limited session to obtain advice or counsel, or to get assistance with a specific issue . The fee would depend on the location, length of the consultation, and the attorneys pricing.
3. Flat Fee: Some attorneys provide specific services for a set fee, no matter how long it takes the attorney to complete the service. This is also known as project-based work. This can provide some protections for the client, so that if something takes longer than expected, the client isnt on the hook for additional fees. But the fee would likely only cover a specific task or set of tasks that the attorney has been hired to perform. A good example of this might be completing an income-driven repayment application.
How To Explore Federal Loan Repayment Options On Your Own
Step 1:Create your FSA ID and log in to studentaid.gov to review information about your loans.
Step 2: Learn aboutincome-driven repayment plans. Under income-driven repayment plans, payments are based on income and family size and can be as low as $0 per month. Income-driven repayment plans also offer potential interest subsidies and the possibility of loan forgiveness after 20 or 25 years of qualifying payments.
Step 3: If you work for the government or a qualifying nonprofit organization, learn about Public Service Loan Forgiveness and Temporary Expanded Public Service Loan Forgiveness . These programs have many detailed requirements but enable public servants to receive forgiveness of their remaining loan balance after 10 years of qualifying payments in a qualifying repayment plan. On October 6, 2021, the U.S. Department of Education announced a temporary period in which borrowers can receive credit for payments that did not previously qualify for PSLF or TEPSLF. However, you may have to take action by October 31, 2022. Learn more about this time-limited opportunity.
Step 4: Use the U.S. Department of Educations Loan Repayment Plan Simulator to estimate your monthly payments, the projected total costs, and potential forgiveness amounts under income-driven repayment plans and/or the PSLF program.
Step 5: Apply for an income-driven repayment plan through studentaid.gov or mail the application to your federal loan servicer with your income documentation.
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What People Say About This Service
“The prospect of contacting someone for help and acknowledging my problem was scary, daunting and intimidating. I thought the process would be lengthy and complicated I thought Id be condemned and shamed. But from my very first meeting with my financial counselor and each one after that, I was treated with respect. He didnt come down from an ivory tower to tell me what to do and talk down to me. He was just another member of the community who had answers and tools. He was there to assist me, not fix me.
“In just two weeks after that first meeting, I was firmly on the road to a future free of student loan debt. Instead of facing payments well into retirement, I can now erase my debt within 10 years something I believed would never happen.”
– Chris H. from Minneapolis, MN
“I just wanted to thank you for your assistance with my student loans. A few years ago, one of your counselors helped me refinance my student loans and get into an affordable payment plan. This year during my automatic annual recalculation, my student loan payment went up from $500 to $1,000 a month — an amount that would have been impossible for me to afford.
“The same counselor assisted me again. She provide me information on how to request an immediate recalculation, including how to submit it and what documentation I needed to include. I just received my recalculation, and my payment is back down to an affordable amount.
Include Payments In Your Budget
Build your student debt payments into your budget and make payments that are larger than the minimum payments. You can also speak with your financial institution about setting up automatic payments.
When planning your budget and automatic payments, make sure you know when your payments are due. Remember that if you have more than one loan or line of credit, you may have more than one payment due date.
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John R Justice Repayment Program
The John R. Justice Student Loan Repayment Program will pay up to $60,000 in student loans for lawyers who go into public defense.
These payments will be up to $10,000 per year and require a three year commitment as either a state prosecutor or a state public defender. You can also check-in with your law school about other repayment grants for public service. Many law schools, including top programs like the Yale School of Law, offer loan forgiveness grants to alumni who go into public interest law.
Which Loans Are Eligible
ICR offers forgiveness on the following loans:
- Direct subsidized and unsubsidized loans
- Direct PLUS loans made to grad students
- Direct consolidation loans
- FFEL Stafford loans, if consolidated
- FFEL loans made to parents, if consolidated
- parent PLUS loans, if consolidated
- Federal Perkins loans, if consolidated
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How To Find Free Grants And Programs To Pay Off Student Loan Debt
Know where to look for free grants that can help you pay for your student loan debt. Here are some places that have loan repayment programs:
- Organizations that promote certain professions or skills
- State and federal governments
- Colleges and universities
Check the eligibility requirements to know if you qualify in a loan repayment program. Prepare all the necessary documents and send your applications. Make sure that you understand all the terms and conditions. Some grants can become a loan if you dont meet service requirements, for example.
Understanding Student Loan Forgiveness
One source of federal student loan debt help are loan forgiveness programs. These programs essentially forgive a remaining portion of federal student loan debt after you meet certain requirements.
One of the most well-known loan forgiveness programs is the Public Service Loan Forgiveness program. This program offers federal student loan forgiveness for some people working full-time in qualifying public interest fields for 10 or more years.
The Public Service Loan Forgiveness Program program offers federal student loan forgiveness for some people working full-time in qualifying public interest fields for 10 or more years.
Public Service Loan Forgiveness, which is sometimes known as PSLF, offers federal student loan forgiveness for certain public servants and non-profit employees who qualify after 120 on-time qualifying payments .
Unfortunately, PSLF isnt available to everyone. To qualify for Public Service Loan Forgiveness, you must work for a qualifying employer.
Generally, government organizations and certain non-profits will be considered qualifying employers for the purpose of PSLF, but to be sure that your job counts for the PSLF program, you can submit a PSLF employment certification form to verify your employers eligibility for the program.
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What Do I Need For Counseling
In order for your financial counseling session to be most productive, it is helpful to have the following information available:
- Your monthly income
- Any other information you believe would be helpful in understanding your financial situation.
Don’t have everything? Don’t worry. Call us and we help guide you through the process.
Grants To Pay Off Student Loans And End Your Debt
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Grants can be a great way to pay for college even after youve left school.
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What Happens When The Student Loan Statute Of Limitations Ends
If your debt is outside of the statute of limitations, this doesnt mean you no longer owe the money. It just means that the lender has fewer collection options and can no longer sue you to collect the balance.
Lenders can still try to collect the debt by calling you and sending letters, as long as they dont violate the Fair Debt Collection Practices Act.
If a creditor or debt collector sues you after the statute of limitations has expired, dont ignore it. A court may still award a judgment against you if you dont raise the statute of limitations as a defense, according to the CFPB. For that reason, its a good idea to discuss your situation with a lawyer familiar with debt collection laws in your state.
Qualify For A Federal Student Loan Forgiveness Program
The first way to eliminate your student loan debt applies to people with Federal student loans. These are student loans that are typically handled by the Department of Education or one of the student loan servicing companies. These include many different student loan programs handled by the Federal government.
There are three major, and several smaller student loan forgiveness programs. The most popular Federal student loan forgiveness program is Public Service Loan Forgiveness. This program offers student loan forgiveness to people who work in public service for 10 years. Public service not only includes government jobs, but it also includes many non-profit jobs, education jobs, and service jobs like law enforcement or public safety.
The other two common ways to get Federal student loan forgiveness is to be a teacher, which has it’s own Teacher Loan Forgiveness Program , and military service loan forgiveness .
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How Much You Need To Repay
Verify your loan or line of credit contract to figure out the following:
- the total amount you owe
- the interest rate that will be applied to your debt
- how youll repay your debt
- how much youll pay
- how long it will take to pay back your debt
Contact the organization that provided your student loan or line of credit if you dont have the information listed above.
If I Qualify What Steps Do I Need To Take
Changes to the loan forgiveness program will take place in two parts.
The agency will first loosen some of the rules that had prevented eligible borrowers from discharging their loans, via a limited waiver. The government, for example, will allow payments on any of a person’s loans to count toward the total number required for forgiveness.
The Public Service Loan Forgiveness waiver will be available to borrowers who have direct loans, Federal Family Education Loans and Perkins Loans.
Parent PLUS loans are not eligible under the limited waiver.
The department said it would automatically credit borrowers who already have direct loans and have proved they work in an eligible field. Others who haven’t enrolled in the program or have ineligible federal loans will have to apply for forgiveness, which may require them to consolidate their loans. Borrowers will have until October 2022 to apply.
To find out more about loan consolidation, visit StudentAid.gov/Manage-Loans/Consolidation.
The Education Department also plans to review all Public Service Loan Forgiveness applications that had been denied and to give federal employees automatic credit toward forgiveness.
Other changes will come about more slowly via regulations made by “rule-making,” a lengthy and complicated bureaucratic back-and-forth between the government and other stakeholders.
For more information, visit StudentAid.gov/PSLFWaiver.
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These Programs Can Help You Wipe Out Student Debt
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A Tea Reader: Living Life One Cup at a Time
How can people get rid of their student loan debtand, specifically, when is loan forgiveness an option? We don’t need another statistic to tell us how deep in student loan debt U.S. college graduates are. Total debt and average debt figures don’t mean much, except to say that if the sums you owe keep you up at night, you’re in good company. What really matters is finding a solution.
What Is Public Service Loan Forgiveness How Did It Originate
The Public Service Loan Forgiveness is a program that was launched in 2007 in an effort to steer more college graduates into public service. As long as they made 10 years of payments on their federal student loans, the program promised to erase the remainder.
The program, however, has proved anything but forgiving. Before Wednesdays announcement, only 16,000 borrowers had seen their debt forgiven via the program, according to the Education Department. About 1.3 million people are trying to have their debts discharged through the program.
One of the most problematic pieces of Public Service Loan Forgiveness: Many borrowers had the wrong type of loan and didn’t realize they weren’t eligible for relief.
When the loan forgiveness program was first introduced, many of the loans offered from the federal government were Family Federal Education Loans , or loans made through private entities but insured by the federal government.
The government stopped offering those loans in 2010 and now relies on direct loans the kind eligible for forgiveness. The Education Department said about 60% of borrowers with an approved employer hold FFEL loans.
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Faculty Loan Repayment Program
The Faculty Loan Repayment Program from the Health Resource and Services Administration helps recruit and retain health professions faculty members by encouraging students to pursue faculty roles in their respective health care fields. This is vital for preparing and supporting the next generation of educators.
You can receive up to $40,000 in student loan repayment, along with extra money to help offset the tax burden of the program.
You can learn more about this program here.
Air Force College Loan Repayment Program
The main Air Force College Loan Repayment program is paused in 2018 . This program allowed you to get up to $10,000 in student loan debt paid off in 3 years.
However, the Air Force JAG student loan repayment program is still active. You can receive up to $65,000 in student loan forgiveness if you go into JAG in the Air Force.
You can learn more about this program here.
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