Well, 2017 has been quite an explosive year, hasn’t it? And there’s been a lot going on in the world of student loan law – so much, in fact, that it can be a bit overwhelming to keep everything straight. So as we wrap up this year, here’s an overview of what went down for student loan borrowers, and some hints of what’s to come in 2018.Read More
News outlets are reporting that the House GOP has drafted legislation that could reshape the entire federal student loan system.
The bill is called the “Promoting Real Opportunity, Success and Prosperity Through Education Reform Act,” or the “PROSPER Act.” The full text of the proposed bill has not yet been released, but an outline of the proposal was released to the media. Here’s what we know (and what we don’t know):Read More
Student loan forgiveness is not a myth or a fairy tale. There are actual, legitimate programs that can provide partial or full forgiveness of your student loans – if the right conditions are met.
But it’s those conditions that often trip people up. A recent New York Times article provided real-world examples of student loan borrowers who thought they are on the path to loan forgiveness, only to find out later that they weren’t at all. I see this all the time in my practice, and it’s usually because people don’t fully understand the required criteria for student loan forgiveness programs (mostly due to the fact that these programs tend to be complicated, and student loan servicers do a pretty terrible job explaining them).
It’s important to take the time to understand these programs and determine whether or not you meet their requirements – because if you don’t, you may be in for some major disappointment later on. Here are the most common mistakes I see people make when it comes to student loan forgiveness. Read More
It’s time to start liberating yourself from your student loan debt.
We’ve got a true student loan crisis – there’s over $1.4 trillion in student debt, and that number keeps on rising. The average undergrad leaves college with nearly $40,000 in student loans, and over 7 in 10 recent graduates are in the red. Twenty-five percent of student loan borrowers are in distress – meaning they are in a suspended status, behind in payments, or in default. And things only seem to be getting worse.
With this as a backdrop, it’s easy to become paralyzed. The loan balance figures and payment amounts can be distressing. Figuring our your repayment options can be overwhelming. It doesn’t help that loan servicers often provide incorrect or misleading information. It’s easy to feel like you’re lost.
But ignoring the problem isn’t going to make it go away; student loans don’t just disappear. Even if there are only imperfect solutions out there right now, it’s important to take stock of your situation, figure out what your options are, and optimize your student loan management approach. Only then can you start getting on the path to student debt freedom. Here’s how you can get started.Read More
If you have multiple student loans, all with different loan balances, interest rates, and lenders, it can feel overwhelming to manage. Should you pay just your minimum monthly payments, or should you pay extra when you can? Which loan should you pay off first? How do you prioritize?
Here are some general rules to consider.
Private Student Loans Before Federal
On the whole, federal student loans have a lot more repayment options and many more consumer protections compared to private loans. Federal loans have discharges available due to death or disability; there is a right to cure federal student loan default; and federal loans typically have flexible repayment options, including income-driven repayment. Private student loans typically don’t have these options or protections. So even if the interest rates on your federal student loans are relatively high, it still might make more sense to pay off your private loans first. You never know what could happen in the future, or when you might need those federal student loan protections.Read More
It’s a scary time for millions of Americans right now. Much of eastern Texas has been declared a disaster area following Hurricane Harvey. Puerto Rico and the U.S. Virgin Islands have been declared disaster areas as well following Hurricane Irma, and the southeastern U.S. (especially Florida) may be next. The last thing anyone in those areas is thinking about right now is student debt. But what happens to your student loans when a disaster strikes?Read More
Yesterday, Massachusetts Attorney General Maura Healey filed a lawsuit against loan student servicing giant FedLoan Servicing (formally known as the Pennsylvania Higher Education Assistance Authority, or “PHEAA” for short). The lawsuit alleges widespread loan servicing problems that have harmed thousands of borrowers. The allegations against FedLoan Servicing are entirely unsurprising to me, as I’ve written extensively about ongoing problems with this student loan servicing company. But this is a major development and represents an important step in holding student loan servicers accountable for their actions.
Here are some common questions I’m getting about the lawsuit – and my answers.Read More
It’s been a whirlwind week. Last week’s leaked budget documents from the Trump administration showed proposed cuts to critical student loan programs including Public Service Loan Forgiveness, as well as major changes to income-driven repayment plans. The proposals sparked panic; hundreds of thousands of student loan borrowers have made major life decisions – selecting specific careers and specific repayment plans – in reliance on the continued existence of these programs. To have the rug pulled out from under them would be disruptive and unfair, and would likely be the basis of viable legal challenges.
After just a few days, we have some important updates on some of these reforms. Some good news, and some bad. Read on.Read More
President Trump’s budget proposal calls for the elimination of funding for the Public Service Loan Forgiveness (PSLF) program. The program allows for borrowers who are repaying their Direct federal student loans under an income-driven repayment plan while working full time for a public service employer to have any remaining balance forgiven after 10 years of qualifying payments. The first wave of borrowers eligible for forgiveness under this program will be applying later this year.
While this is certainly a time to be extremely vigilant, there are two things to keep in mind before panicking:Read More
There’s a lot going on right now in student loan news. Let’s get right to it.
New York State Will Offer Free College – With a Catch
New York is poised to become the first state in the country to offer free college tuition to its residents. Families who make $125,000 or less would be eligible for tuition-free college at all SUNY and CUNY campuses. This has the potential to benefit up to a million families. But there’s a catch – students who benefit from this initiative will have to live and work in New York for several years after graduating. If they don’t, the “free” tuition will be converted into loans that must be repaid. This has some borrower advocates concerned.Read More