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
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
Many federal student loans are eligible for income-driven repayment – a type of student loan repayment program that uses a formula to create a uniquely-tailored monthly payment for borrowers based on their income and family size. For most of these plans, borrowers can enroll for up to 20 or 25 years (depending on the specific plan), at which point any remaining balance gets forgiven. This repayment period can be reduced through programs like the Public Service Loan Forgiveness program.
There are currently four major income-driven repayment plans, each with their own unique programmatic requirements and quirks: there’s Income-Contingent Repayment (ICR), Income-Based Repayment (IBR), Pay As You Earn (PAYE), and Revised Pay As You Earn (REPAYE). Each plan uses a different formula for calculating monthly payments; but some of the plans also have unique characteristics that differentiate them even further from each other.Read More
A “forbearance” allows student loan borrowers to temporarily postpone payments on their student loans. It’s a great – and important – option available to people who cannot afford their regular monthly payments, because it allows you to stay in good standing on your student loan and avoid default. But forbearance is not without its consequences, and when used improperly, it can cause major problems.Read More
Tax time is a stressful time, I know. And if you have student loans, there’s even more to think about. Here are are some tax-related tips to help guide you.
Deduct Your Student Loan Interest
Some of the student loan interest that you paid during 2016 may be tax deductible, which could lower your tax bill. Watch for a 1098-E statement issued by your student loan lenders, which will show the total amount of interest payments during 2016. Just keep in mind that the amount of this deduction is capped, and it is phased out entirely for higher income earners. Be sure to talk to your accountant to see if you’re eligible for this deduction.Read More