Grants And Scholarship FAQs

Student Loans


How Do You Get Out Of Repaying Your Loans?

Easiest two ways I can think of…

Stay in school forever

If you never stop going to school and are earning degrees in your 80s you dont have to pay.

get out of student loans by getting hit by a bus

You may have to die but if you go owing them 200K you spent that money smartly and when ya should have.

But honestly those are about it.  You can’t “discharge” them in bankruptcy.  You can’t simply not pay because they’ll take wage garnishments and your tax refund each year.

The next best thing is to accept a lower paying government job and if you make all of your payments for ten years the remainder is forgiven.  Now if you’d been in the private sector who know if you’d have been promoted up to the point your wages made working for the government look like a bad idea…but you can work for a nonprofit and after 10 yrs of repayment the rest is forgiven.

In those ten years you’ll have plenty of time to pay a large portion of your debt off.  This program is …

Public Sector Loan Forgiveness

The Public Service Loan Forgiveness (PSLF) Program forgives the remaining balance on your Direct Loans after you have made 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer.

If you want to qualify for Public Service Loan Forgiveness now or in the future, complete and submit the Employment Certification form as soon as possible. Too many borrowers wait to submit this important form until they have been in repayment for several years, at which point they learn that they have not been making qualifying payments. In order to ensure you’re on track to receive forgiveness, you should continue to submit this form both annually and every time you switch employers.

Category: Student Loans

Student loan payments (at least public ones…private loan people you’re basically screwed) but public loans can be kicked down the sidewalk through two terms .. Deferment and Forbearance. Same immediate benefit…you don’t have to pay towards your loan, different long term outcome and different requirements.

Deferment is your friend. Your loans are in deferment when you are in school. Basically the clock is not ticking and you’re expected to focus on school rather than your loans. You can pay towards your loans and this is a great time to see how repaying them is going to affect your budget. It’s low stakes cause if you miss a month it doesn’t matter.

But if you leave school, enroll less than part-time or graduate deferment is over. You still have the option of Forbearance. You usually need to show a hardship though as you are not in school and expected to be making money and paying your loan. If your job doesn’t pay you as much as you needed, you get laid off, hours cut or have a medical condition that hits your wallet you can apply for forbearance. During this time you do not have to make payments, but unlike with Deferment the interest clock is still ticking. So you are not paying and your debt is growing. This can be a God send though if you find yourself jobless.

Generally speaking Forbearance and Deferment can be made retroactive. So if you had a payment in January and February that you missed and applying for Deferment in March the deferment covers the previous months and that mark is removed from your credit report.

So simply Deferment puts off loan payments and interest while you are in school and Forbearance puts off loan payments while you are experiencing a crisis.

Category: Student Loans

Student Loans

Student loans are a means to pay for college that you generally have to repay.  The repayment period may be immediate or delayed till after you graduate.  Student loans are divided into two very distinct groups.  When we discuss “Student debt” generally we are referring to student loans.

Private Student Loans

Private student loans are loans from private banks or other lenders for educational expenses.  These are generally the worst form of paying for your education.  Generally these have higher interest rates, less flexible repayment terms and may require co-signers who are themselves responsible for repaying the loan if the student fails to make payments.

These kinds of loans should be generally avoided.  The APR associated with a private student loan is generally higher than the APR associated with a public loan.  Private student loans can range between 4% to 13% interest.

Private student loans are applied for through the lending institution generally or through the college or university.  Private student loans do not necessarily require the student to meet performance levels or for the school to meet certain criteria.  An institution that is not recognized by the US Department of Education can not receive Public Student Loans but can receive Private Student Loan money.

Public Student Loans

Public student loans are loans that do not require a co-signer because the federal government is officially backing the loan essentially acting as a co-signer.  Because these loans are backed by the government the risk of default to the lender is low so the interest rates for these loans are generally very low.

Federal student loan interest rates rose for the 2018-19 school year and apply to loans disbursed or made between July 1, 2018, and July 1, 2019. The interest rate for federal direct undergraduate student loans increased to 5.05%, up from 4.45% in 2017-18

There are multiple federal student loan programs available but generally all of these loans are applied for through FAFSA

Category: Student Loans

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