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The New Income-Driven Repayment Form is Here – And It’s a Mess

December 8, 2015 | Adam S. Minsky, Esq. Articles Current Events Income-Based Repayment Income-Driven Repayment Pay-As-You-Earn Policy & Reform

Federal student loan servicers are in the process of releasing a new application form for all income-driven repayment plans, including ICR, IBR, PAYE, and the “Revised Pay As You Earn” (REPAYE) plan, which is the latest income-driven repayment option available to borrowers. Not all servicers have released the application yet; it is being phased in this month as REPAYE is being rolled out. Some servicers are ahead of others.

Note: REPAYE is not yet formally available – servicers are saying REPAYE will be available to borrowers by the third or fourth week of December.

The good news? The new form provides an option for borrowers to select REPAYE.

The bad news? Everything else, basically.Read More

Articles Current Events Income-Based Repayment Income-Driven Repayment Pay-As-You-Earn Policy & Reform

Who Should Switch to REPAYE?

November 10, 2015 | Adam S. Minsky, Esq. Articles Current Events Income-Based Repayment Income-Driven Repayment Pay-As-You-Earn Policy & Reform

A couple of weeks ago, the U.S. Department of Education released final regulations governing its newest income-driven repayment plan, the “Revised Pay-As-You-Earn” plan, or “REPAYE.” Because of the nature of our student loan system, the new program is complicated, confusing, and in many ways contradictory to its original intent. It has some good features that will undoubtedly help many borrowers, but it also has some twists and caveats that will exclude others, or at the very least, make it a less desirable option than some had hoped.

So, can or should you switch to REPAYE? The answer, as is all-too-often the case, is “it depends.” I hope my analysis below is helpful, but please understand that this is not intended as legal advice, and this is not a substitute for getting a personalized recommendation from a qualified student loan expert.Read More

Articles Current Events Income-Based Repayment Income-Driven Repayment Pay-As-You-Earn Policy & Reform

BREAKING: New REPAYE Federal Student Loan Repayment Plan Details and Release Date Announced

October 28, 2015 | Adam S. Minsky, Esq. Articles Current Events Income-Driven Repayment Loan Forgiveness Policy & Reform

Yesterday, the U.S. Department of Education announced that it has released final regulations governing the newest income-driven repayment plan, called the Revised Pay-As-You-Earn (“REPAYE”) plan. This new income-driven plan may provide substantial relief to millions of federal student loan borrowers who are currently ineligible for the Pay-As-You-Earn plan due to that plan’s strict eligibility requirements.

The final regulations for the REPAYE plan essentially reflect the draft regulations that were released a few months ago. Here are the key details:Read More

Articles Current Events Income-Driven Repayment Loan Forgiveness Policy & Reform

Senator Introduces Bill to Waive Taxability of Loan Forgiveness

October 13, 2015 | Adam S. Minsky, Esq. Articles Current Events Income-Driven Repayment Policy & Reform Taxes

Federal income-driven repayment plan programs such as Income-Based Repayment (IBR) and Pay As You Earn (PAYE) are imperfect but much-needed plans that allow many student loan borrowers to repay their loans using formulas based on their income and family size. For many student loan borrowers, they are the only affordable repayment plans available, and they help prevent default, which can be disastrous.

These programs also have an important safety net: after completing the plan’s repayment term (25 years under IBR, and 20 years for PAYE), borrowers can get any remaining balance on their student loans forgiven. Most borrowers are expected to repay their loans in full before they reach the end of their repayment term. But if a borrower’s income is insufficient to repay their loans in full, loan forgiveness means they won’t have to spend the rest of their life pouring a percentage of their income into a black hole. There is an eventual light at the end of the tunnel.

But of course, there’s a caveat. Read More

Articles Current Events Income-Driven Repayment Policy & Reform Taxes

“Earnest” Student Loan Refinancing: The Inside Scoop

October 6, 2015 | Adam S. Minsky, Esq. Articles Default Income-Driven Repayment Private Student Loans

Student loan refinancing is the process by which a borrower can obtain a lower interest rate on their student loans, usually by taking out a new student loan that pays off the old one. If this new loan comes with a lower interest rate and better repayment terms, the borrower may save substantially, both on a monthly basis and in total.

During the past few years, up-and-coming private student loan refinancing companies have been offering various options to student borrowers. These programs are relatively new, and they tend to be restricted to people with good income and excellent credit, so we don’t know much about them. But as more and more borrowers turn to these programs in the absence of federal student loan refinancing options, I’ve been trying to find out more information about them.

Last week, I wrote a review of “SoFi” student loan refinancing based on a borrower’s experience and my analysis of their loan contract.

This week, I’m taking a look at “Earnest” student loan refinancing. Like SoFi, Earnest offers student loan borrowers with various refinancing options. However, Earnest seems to focus more on its technology-based application process and customer-service-oriented approach.

I recently had the opportunity to talk with a borrower (we’ll call her “Amanda”) who refinanced her student loans through Earnest. Like “Aaron” (who refinanced his loans through SoFi), Amanda graciously answered my barrage of detailed questions about her experience, and also provided me with a copy of her Earnest loan contract so I could write this article. Here’s what I found. Read More

Articles Default Income-Driven Repayment Private Student Loans

An Exclusive Look at “SoFi” Student Loan Refinancing

September 29, 2015 | Adam S. Minsky, Esq. Articles Default Income-Driven Repayment Private Student Loans

Student loan refinancing is the (somewhat elusive) process by which a borrower can obtain a lower interest rate on their student loans, often by taking out a new student loan from a different lender. If this new loan comes with a lower interest rate and more favorable repayment terms, the borrower may save a good deal of money, both on a monthly basis and in total over the course of repayment.

Right now, there’s unfortunately no way to refinance federal student loans within the federal student loan system, which is troublesome for many borrowers who have high-interest federal student loans. Private student loan refinancing largely dried up during and after the financial crisis of 2007-2009. However, in the past few years, new and somewhat unique private student loan refinancing companies have begun offering some options to borrowers. Because these companies and their programs are relatively new, and student loans generally must be repaid over a long period of time, we don’t yet know enough about these companies to say with certainty whether they provide viable long-term solutions for borrowers. What we do know is that these programs tend to be geared towards borrowers with excellent credit and good earning potential, which effectively locks out many borrowers who need the most relief.

One of these new student loan refinancing companies is called SoFi (short for “Social Finance”). SoFi offers student loan borrowers with various refinancing options through a unique investor-based funding mechanism. It’s one of the leaders in this nascent industry.

I recently had the opportunity to sit down with a borrower (we’ll call him “Aaron” to protect his privacy) who refinanced his student loans through SoFi. Aaron agreed to share his experience with me, and he even let me review his loan contract with SoFi. As a student loan attorney, this was an exciting opportunity for me to get an inside look at a new type of student loan.Read More

Articles Default Income-Driven Repayment Private Student Loans

Four “Secrets” About Income Based Repayment

September 16, 2015 | Adam S. Minsky, Esq. Articles Income-Based Repayment Income-Driven Repayment Pay-As-You-Earn Student Loans 101

Income-driven repayment plans such as Income-Based Repayment (IBR) and Pay As You Earn (PAYE) offer millions of federal student loan borrowers the opportunity to have a uniquely tailored monthly payment based on their income and family size. The programs also offer forgiveness of any remaining loan balance at the end of their respective repayment terms (20 or 25 years, depending on the program). Although far from perfect, for many borrowers these programs are the only thing standing between them and default, as “regular” repayment plans based on the loan balance would be unaffordable.

Income-driven repayment plans can be complicated to navigate, however, and not everyone knows some of the features that can provide even more relief. Here’s a short list of the most glaringly lesser-known programmatic features of income-driven repayment:Read More

Articles Income-Based Repayment Income-Driven Repayment Pay-As-You-Earn Student Loans 101

Student Loan Benefits for Military Service Members

July 1, 2015 | Adam S. Minsky, Esq. Articles Income-Driven Repayment Loan Forgiveness Student Loans 101

There was a time when serving in the military could essentially guarantee a young American a free college education. Not anymore. Today, many people who serve in our armed forces are also student loan borrowers. Luckily, there are some important student loan benefits and programs that are specifically geared towards military service members, although too few people are aware of them:Read More

Articles Income-Driven Repayment Loan Forgiveness Student Loans 101

Adam S. Minsky is Lead Presenter at Student Loan Webinar

June 23, 2015 | Adam S. Minsky, Esq. Articles Default Income-Driven Repayment Site & Practice News Student Loans 101

I am thrilled to be the lead presenter tomorrow at the National Consumer Law Center’s webinar, “Federal Student Loan Repayment Options and Default Resolution.”

Tune in on Wednesday, June 24 at 2:00pm for an overview of options available to borrowers to repay their federal student loans and get out of default. The webinar is FREE and open to the public.

Articles Default Income-Driven Repayment Site & Practice News Student Loans 101

BREAKING: Expanded “Pay As You Earn” Program Details Released

May 14, 2015 | Adam S. Minsky, Esq. Articles Current Events Income-Based Repayment Income-Driven Repayment Loan Forgiveness Pay-As-You-Earn Policy & Reform

Last year, the President announced that he intended to expand access to the “Pay As You Earn” (PAYE) plan, an income-driven repayment plan that is significantly better than the widely-available Income-Based Repayment (IBR) plan, but is presently restricted to only the newest federal student loan borrowers. That means that most federal student loan borrowers currently in repayment cannot select the PAYE plan.

For months, the U.S. Dept. of Education has been engaged in what we call “negotiated rulemaking,” working with key stakeholders to flesh out the details of the expanded program and draft proposed regulations. Here are some key components of the program from the negotiating rulemaking committee:Read More

Articles Current Events Income-Based Repayment Income-Driven Repayment Loan Forgiveness Pay-As-You-Earn Policy & Reform

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Books by Adam S. Minsky

The Student Loan Handbook for Law Students and Attorneys

The Student Loan Handbook for Law Students and Attorneys

Student Loan Debt 101

Student Loan Debt 101: The Definitive Guide to Understanding and Managing Your Student Loans

Student Loans for Parents and Cosigners

The Student Loan Guide for Parents and Cosigners

617-936-2788
asminsky@minsky-law.com
By Appointment Only 265 Franklin Street, Suite 1702
Boston, MA 02110

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