Your Questions About Federal Student Loans Repayment
Linda asks…
3 of my student loans have 14.5% intereste rate!scared!?
and another private loan is 11.25%:( All of these are private loans, and I have another 10K in federal loans with really low interest rates. I have $20,000 in private loans at this interest rate, and I’m started to panic! I have a few semesters left, then my 6 month grace period, and I’ll begin repayment. I wish I could just find a sugar mama to help me pay this off. I’m a geography/GIS major, so I should have a good job making 50-60K/year starting out, but I can’t rely on that hopefulness. Is there a way to consolidate all these private loans together? They are through sallie mae, btw.
andrew
BestLoanRateFinder.com answers:
I have you asked Sallie Mae if you can consolidate through them, I did with my Staffords and got a rate <5%. I must say, those are some awful loans you have, those interest rates are robbery in todays market. I really feel for you, pay those off ASAP or you will end up paying the 20,000 many times over
Daniel asks…
Tell me about the Federal Perkins Loan?
The college I’m thinking of going to is offering me a Federal Perkins Loan. I’ve tried to avoid loans (relying on grants/scholarships instead) up till now, but if I go here it looks neccessary.
Have any of you had experience with this loan? How does the interest compare with other student loans? How does the repayment process work?
HELP!!!
BestLoanRateFinder.com answers:
Pros of the Federal Perkins Loan Program:
Rates:
Perkins Loan interest rates are fixed at 5%; this is incredibly unlkely to change. Beginning July 1st, 2006, Stafford loan rates will become fixed at 6.8%, so you can see that Perkins is a great option, even compared to other federal student loans. A few years ago, when Stafford rates were variable and had dropped below 3%, a lot of students were declining their Perkins awards. Now that Stafford rates have risen and Perkins rates have remained the same, many students are wishing they had chosen Perkins instead…
Perkins loans are subsidized, meaning that the government pays any interest that accrues (a) while you are in school, (b) during the 9-month grace period you receive once you graduate/leave school, and (c) during any deferments you are granted.
Standard repayment for Perkins loans is 10 years. However, you may be able to request a longer repayment term and Perkins Loans are also eligible for to be included in a Federal Consolidation Loan.
Benefits:
As you may know, some student loans carry forgiveness benefits. Stafford loans have a few (for teachers, mostly). Perkins Loans actually carry a much longer list of forgiveness/cancellation benefits, including:
* Law enforcement or corrections officers
* Peace Corps, AmeriCorps, VISTA
* those employed in a Head Start program
* Teachers in low-income schools, special education teachers, teachers in designated subject shortage areas, teachers of handicapped students
* Providers of early intervention services
* Nurse or medical technicians providing health care services
* those in the US armed forces
So, if you do accept your Perkins loan and end up working in any of these areas, you may not have to pay back your Perkins Loan at all!
Perkins Loan deferment options also tend to be more flexible than those of Stafford Loans.
Your school is the lender for any Perkins loans that they offer you. You might find that having a loan held by the school makes things much simpler when it comes time to repay — if you have any questions, you’ll know who to contact! Essentially, the school receives a limited pool of funds from the federal government, which they match (partially) and then allocate at their discretion (in keeping with the regulations set forth by the DOE). Perkins loans are meant for the school’s neediest students. Students must demonstrate financial need to qualify.
Lizzie asks…
Private Student Loan problem…they want $670/mo. and I make very little.?
I was on the phone with Sallie Mae this afternoon. I have a private loan through them for $45,000+-. The loan just entered the repayment period this month (after 2 6-month forbearances) and they are asking for $670.00/month. Here are my monthly finances as of today (I live in CA):
rent: $1025.00
utilities: $150.00
food: $200
transportation: $150
fed. student loan: $50
clothes/etc..: $50
misc.: $200
Total: $1825
This doesn’t leave much money for private student loans. Is there a maximum (by law) that they can expect based on my income? Do I have any other options? Please help!!
I take home $2000 per month.
BestLoanRateFinder.com answers:
The student loan legislation that recently was passed in September 2007 does not include any income-contingent repayment options for private loans at this time. I hope when you talked to Sallie Mae, the representative reviewed repayment options with you:
“Select Step” is an option that allows you to make interest-only payments for up to four years followed by level repayments of principal and interest. The benefit of this plan is that you can make reduced monthly payments during the initial years of loan repayment.
Since your current loan balance is over $45,000, you also would be eligible for an extended repayment term of up to 30 years. This option would allow you to lower your monthly payments, but keep in mind that it would also increase the overall cost of your loan, as would the Select Step option.
As you know, forbearance allows you to suspend monthly payments temporarily. However, interest continues to accrue during this time. To avoid having interest added or “capped” to your principal balance, you may want to consider paying accrued monthly interest if you decide to request another forbearance period.
If you have more than one loan, your best bet to get repayment relief is to consider refinancing your private loan with a Private Consolidation Loan (PCL). Roughly 75 percent of our customers lower their interest rates when they refinance and obtain a Private Consolidation Loan. You must have graduated from school or be within 30 days of completing your degree or certificate program to be eligible for this loan option.
Also, you may be able to get a lower interest rate on your Private Consolidation Loan if you apply with a credit-worthy cosigner. You are welcome to contact the Private Consolidation Loan team toll free at 866-380-5005 to see whether this option would work for you. Customer service representatives are ready to assist you Monday to Friday, 8 a.m.-11 p.m.
For tips on managing debt and using credit wisely, a resource you may find helpful is “Be Debt Savvy” at http://www.salliemae.com/before_college/planning-wisely/debtsavvy/repayment/.
Just remember to keep making regular payments on your loan. This helps prevent your loan balance from getting any higher.
Chris asks…
Is $60,000 too much debt for student loans?
I am currently pursuing my A.A. in Mass Communications, and am considering pursuing my B.A. in English once I finish my Associates. However, I will end up owing the federal government $57,000 in student loans, which is the cap, even with the assistance from Pell Grants.
I work at a public library, and the pay is not good. We are struggling to pay our bills as it is and having to depend on food stamps. All was fine until my husband (who is only 34 years-old) had his second heart attack when I was pregnant with our first child. Our son is now 19 months-old, and I am definitely not planning to have anymore children because of our situation.
My educational background also includes English Honors & Creative Writing courses, which I took in high school; I graduated with a cumulative GPA of 3.8. I started at a state university, but I had to drop out and move; my GPA was 3.6.
I am *desperately* seeking a good-paying career so I can provide for my family WITHOUT government assistance. I am trying to do everything I can to boost my résumé and market myself, but is being $60,000 in debt worth it? I know the federal government offers an income-sensitive repayment plan, but I do NOT want to borrow all that money for that reason.
Should I pursue my B.A. in English, despite the money, or will I find a good-paying career with an A.A. in Mass Communications?
My career goal is to be a writer / editor.
BestLoanRateFinder.com answers:
OUCH! That IS too much in loans. Student loan debt, even by income, NEVER goes away. In fact, you could wind up paying $100,000 or more on that loan.
Mary asks…
should i take additional private loans???
Hi I have completed law school and have been trying to pass the bar for almost 2 years without succeeding. I have about 90,000 in federal student loan and only about 200 left in my bank account. I need more money for bar prep and to live on. I was granted a15,000 bar prep loan from citi student loans and I’m debating on whether to take it or not. If I do not take it I would move back to my parents’. My parents are also in great debt and will not be able to support me in any way. I have fear towards taking up another loan especially since I dont have plans for employment and if I continue to fail the bar exam I really might end up in the streets. Another thing that worries me about this new loan is that it is a private loan from a private company and they might not be as tollerant and generous as the government. I have been able to defer my repayments but if I take up this private loan and they are up at my door demanding repayment when I’m still unemployed then I would rather try to work my way around without taking up the loan. So should I take up the loan or not? Please help!
Does anyone have a solution to a financial crisis like this? I get so scared that I cannot concentrate on my study and cannot sleep either. I worked for awhile but earn less then 500 dollars a month working crazy hours so I am thinking that takin up a job is not worth it at all. What do you all think? Can anyone suggest a way to live through this crisis, get myself on track to lowering my debt and start saving up for the future? Thank you any help will be greatly appreciated!!
thank your for your answers. i would like to add that the reason that im considering this is because i have been working for the past 2 years. i am thinking that maybe it was because that i wasn’t fully concentrating on my studies that got me into this situation. i feel strongly about this profession so quiting is not an option for me. thank you
BestLoanRateFinder.com answers:
Right now I would take that loan out but make sure you get all the necessary information on the loan. Such as the interest rate, length period to pay back etc… PLEASE CONCENTRATE ON THE BAR AND REALLY STUDY FOR IT. Really study hard on the parts that you have a trouble on, like the memorandum, essays, and mc questions. Because this is your last chance to take it. I know 5x’s is the limit from what I have been told.
I know the BAR is an extremely hard exam to pass but they make it difficult so that they have a smart individual as a lawyer and not a dumb one.
William asks…
If you are having your taxes taken due to defaulted student loans, do they take your state too? I got state.?
I got my state taxes last week. IRS site says that my federal will be deposited the 6th. I set up for repayment of my loans and they accepted it and set up to take it off my debit card for like the next 120 months. lol. So does that mean I am not going to have my taxes offset? I got comformation from the Student loan company that they had accepted my payment plan and debit card set up.
Thanks!
Ed Fund website says that my loans are in default, but they just accepted payment arrangments and to take it off my debit card today. IRS site says that my refund is suppose to be deposited tomorrow (6th) and I got my state taxes last week. Anyone know if that means that they are lifting the offset they had tried to get? Now IRS site says they dont have any information on my taxes at this time. Acting like they are updating my stuff. Thanks!
I just got off the phone with EDFUND, they said that my taxes are getting offset this year, but the nice lady I got (noy the jerk that I talked to first) in Post Default department helped me to figure out what paperwork I needed to file for extream hardship. I should be getting it back from them, just going to take a few more weeks to a month to get it. She was so nice and made me feel alot better. So even if your taxes were offset and you are getting eviced or have shut off notices or medical situations you can still possibly get your tax return, but she said that I needed to be sure to make the payments that I had arranged with them on time while I am waiting to get the money from them. I guess its one of those things that I did this to myself, but I need to get myself out of it. 
EDFUND helped me alot. If you have to talk to someone there about this type of stuff, DEFFINITLY talk to the POST DEFAULT DEPARTMENT. If you show you are willing to pay them, they WILL help.
BestLoanRateFinder.com answers:
If your taxes are being offset, you should have gotten a letter in the mail stating so. However, it could have been lost in the mail, as the P.O. Is fairly useless, just like the rest of the government.
If you moved, you may not get the letter as well.
There is a phone number than you can call to determine if you are going to have your federal return offset for any reason. The number is:
1-800-304-3107
You will need your Social Security Number to check if there are any debts that will reduce your federal refund, including student loans.
Because student loans are a federal debt, they will rarely be taken out of your state refund.
Also, you must be 270 behind in order for loans to default and be taken out of your return.
Mark asks…
consolidate student loans?
I recently graduated and have around 20k in federal perkins and stafford loans. I’m not exactly clear on what the interest rate for all of them is but some are fixed, some are variable. I will be entering the repayment period for most of these in the next few months.
If I consolidate, what kind of interest rate can I get? what are the fees? what are the options?
I am not interested in an extended payment plan or anything.
BestLoanRateFinder.com answers:
The main advantage of consolidating is to make one payment instead of several. That said, you need to find out what the interest rates are currently for your loans, both fixed and variable. Then check around and see what kind of consolidation loan interest rate you can get. I had all of my student loans through Citibank, so I consolidated through them and got a fixed 5.5% interest rate. Their website is www.studentloan.com. There are a ton of other companies out there, so shop around and see what’s available. For me, the 5.5% fixed rate was the best deal since many of my loans were variable. It keeps my payments at a managable level. I didn’t have to pay any fees to consolidate my loans and I don’t think that you will either. Good luck!
Ruth asks…
If I use the William D. Ford Federal Direct Subsidized loan for this fall semester….?
my first time ever taking out a federal student loan at a undergraduate university and plan to transfer to some other university the next semester, (spring 2010) does that mean I have to start the repayment once I transfer, because it states that “No interest accrues while in school at least half-time, but repayment begins six months after dropping below half-time”…I’m a little confused does it count if I transfer to another university the next semester, or does it mean I have to at least stay in school in order to avoid the repayment just yet…I don’t want to start doing the repayment now, I want to repay them back once I graduate with a undergrad degree….HELP I am soo confused.
BestLoanRateFinder.com answers:
As long as you don’t have a gap of six months where you’re not in school AT ALL, you will not go into repayment. If you transfer seamlessly to another approved college, you’re fine.
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