Save my name, email, and website in this browser for the next time I comment. More details here: https://studentaid.gov/manage-loans/forgiveness-cancellation/public-service/temporary-expanded-public-service-loan-forgiveness, I guess I see several options if your requests for PSLF are rejected: 1) federal direct consolidation and start from the beginning 2) aggressive repayment of the debt 3) go after forgiveness based on the IDR plan you have been using (usually comes after 20 or 25 years worth of payments) 4) Hope that new rules are issued to fix PSLF for people with FFEL loans. Lastly, you shouldn't refinance if your new loan's interest rate isn't notably lower than your federal loans' weighted average. Private Student Loan Consolidation. After several years of making these payments, the borrower learns that because some of the loans were graduate PLUS loans made under the FFEL program, they are not eligible for public service student loan forgiveness. Consolidating FFELP loans could also make them eligible for future student debt cancellation. Here's one thing you should know about the new loan: Any monthly payment amounts you made towards the FFEL loan do not count towards loan forgiveness under the PSLF program. With student loans, you can generally change your repayment plan by consolidating your loans. Standard IBR forgiveness will take 25 years. He has helped borrowers navigate life with student debt since 2013. When to choose federal loan consolidation. Consolidating the FFELP loans will make them eligible for the PAYE Repayment Plan. FFELP student loans are federally backed student loans originally funded by private lenders. Our opinions are our own. The number one drawback to consolidating a Perkins Loan is the loss of loan cancellation benefits. Hi Jill – There are several potential benefits to the CFBP complaint. A: If you are an FFELP Consolidation Loan borrower, there are some purposes for which you are able to consolidate said loan into a Direct Consolidation Loan, for example: If the borrower´s loan holder has asked the guarantor for default aversion services and you are seeking an IBR (Income-Based Repayment) or an ICR (Income-Contingent Payment). If you are thinking about consolidating your federal student loans into a federal Direct Consolidation loan , here are some questions to ask yourself: Loan consolidation can simplify your monthly payments by rolling multiple loans into one loan. (While this option does not exist in the FFELP, students who borrowed in that program can consolidate their loans into the Direct Loan Program in order to take advantage of this forgiveness.) You'll save the frustration of dealing with multiple lenders and reduce the risk of missing a payment because you can combine your loans into a single loan, with a single bill. Thank you again! I’ve paid $160k on a $60k loan and am not down to principal. Delayed consolidation might reach the point where it is better not to consolidate at all. Another option is to refinance some of your loans, while leaving others . Let’s start with what the worst-case scenario looks like: The most frustrating part about this example is the fact that this borrower could have had all their loans eligible for public service forgiveness had they consolidated from day one. I am not sure how to interpret this article, since my already consolidated loans are listed as FFELP loans. Consolidation allows you to pay off defaulted loans with a new loan and new repayment terms. With student loan refinancing or consolidation, you combine your loans into one bigger loan, which may be serviced through a different provider. The rejection rate for Public Service Student Loan Forgiveness is a horrifying 99%. New report says 80% of you will be rejected. 2. Do this before you start your 120 monthly student loan payments, or your student loan payments won . Private student loans cannot be converted into eligible loans. One step you can definitely take is to file a complaint with the Consumer Financial Protection Bureau. I’m seeking legal help and even contacted my congressman. Found inside – Page 21What kinds of loans can be consolidated FFEL CONSOLIDATION LOANS under a Direct Consolidation Loan ? Most federal student loans and PLUS Loans can be Who is eligible for a FFEL Consolidation Loan ? consolidated . All the loans discussed ... If you have an FFEL Consolidation Loan, you can gain eligibility for the PSLF Program by consolidating your loan a second time into a Direct Consolidation Loan. The program that you used to consolidate your loans into an FFEL loan no longer exists. Yes, and lowering the interest rate and saving money should be the primary reason to consider it. Another alternative to handle federal loans is applying for student loan refinancing. Shortly after graduating grad school I consolidated all my Federally subsidized and unsubsidized loans. Since our loans are thru Navient that are considered commercial. While the rate is high at 8.125%…it’s not the rate. Found inside – Page 354Just be warned that things can get tricky with Direct Consolidation if you already consolidated your FFELP loans under ... If My 529 Plan Took a Hit in the Stock Market : Should I Take Withdrawals Now or Should I Borrow Funds Through ... I posted at the top of this thread, but think this situation described here is similar to mine. to request an FFELP consolidation loan by contacting one of their FFELP loan holders. However, a Direct Consolidation Loan won't reduce your rate. But take note: There's no cap on the interest rate on a Direct Consolidation Loan. We have FFELP commercial loans paid over 70,000 so far and still owe 60,000. Hi Michael- thank you so much for your advice. There have been no additional rules or guidance related to loan consolidation. Based on my earlier investigations, I feel like I am hearing the same as before. FFELP Loans (issued before discontinuation in 2010) . Thanks for taking the time to comment Guest of the day. Hard to take this advice seriously with all the errors. Consolidation pays off the FFEL federal loan from a private lender and replaces it with a 100% federal student loan. The interest rate must not exceed 8.25% for consolidation loans prior to July 2013. You can consolidate an FFEL Consolidation Loan by itself. If you read some of the other comments, it looks like you are not the only one with this issue. They are currently listed in my loan service provider’s account as FFELP loans. If you have made progress towards forgiveness with any of your loans, it may not be worth it to consolidate. The reason for this, especially for federal student loans, is that the loans at that time had variable interest rates.By consolidating when the rates were low, borrowers could lock in that lower interest rate. Mark Kantrowitz is an expert on student financial aid, scholarships, 529 plans, and student loans. Once the CARES Act ends and payments are resumed, you will be able to take advantage of other direct loan benefits such as: B. the ability to sign up for an . Borrowers with Perkins loans should talk to their servicers about the risks associated with consolidation. Sherpa Tip: Because federal direct consolidation eliminates old loans and replaces the debt with new loans, the eligibility changes can be a positive or a negative, depending on your loans. c/o Navient LCP - E1140. Most FFEL lenders will not consolidate a defaulted loan, however. It is a classic example of why you can’t take financial planning advice from your student loan lender. By consolidating your FFELP loans, you transfer them to the direct loan program. Thank you! Can you answer again, please, with that data point fixed. The new consolidation loan will now qualify for forgiveness. Currently, you're paying $485.31 per month, which will add up to $18,237 interest over the life of the loan. Back in the early 2000's, consolidation of student loans was a very common practice. There may be other resources that also serve your needs. Found inside – Page iiIn 12 chapters and with a unique focus on a practical approach to increasing diversity and inclusion in academic medicine, this book demystifies the often-insular world of academic medicine. I don’t have that much left on my loans, so I will just pay them off as I had planned on doing when I took them out. A FFELP Consolidation Loan borrower may consolidate that loan into a Direct Consolidation Loan for purposes of: Obtaining the benefit of public service loan forgiveness . Federal education loans are available through the William D. Ford Federal Direct Loan Program ("Direct Loans"). Consolidating FFELP loans doesn't come without risk. Found inside – Page 35Carolyn decided to consolidate these loans into a single Direct PLUS Consolidation Loan . Instead of writing two separate checks each month , one to repay the Direct PLUS Loans and the other to repay the FFEL PLUS Loans , she now only ... He has been quoted in more than 10,000 newspaper and magazine articles about college admissions and financial aid. Once your account is created, you'll be logged-in to this account. We're the Consumer Financial Protection Bureau (CFPB), a U.S. government agency that makes sure banks, lenders, and other financial companies treat you fairly. That being said, I can’t think of a reason that would prevent you from putting a consolidated FFEL loan into a federal direct consolidation loan. If you have FFELP loans that are owned by a school or lender, you don't qualify for the CARES Act's protections — including the payment suspension and 0% interest waiver — and you likely won't qualify for federal student loan forgiveness. Some older federal student loans have a variable interest rate. Should I consolidate my private student loans? The borrower has to make student loan payments for several years extra because of this mistake. Please see my note to Annette above re: my loan experience. It should be noted, however, that extending repayment terms also adds more total interest to the loan, over its entire lifetime. Some of the problems that lead to rejection can be easily fixed, while others are far more complicated. You want access to income-driven repayment options. If you have federal loans through the Federal Family Educational Loan (FFEL) program or the Perkins loan program, you may be able to consolidate those loans to qualify for several repayment programs. Thanks for your time. However, it is possible that this approach could end up being a mistake… I just don’t see it as a likely sequence to be concerned about. One way to check whether or not you are doing things right would be to have some of your payments certified towards PSLF. When to Mix-and-Match. Some older federal student loans have a variable interest rate. Answering questions helps me identify the issues borrowers face and makes this site a better resource. Speak to your lender to find out if they are offering any . I can contact my borrowers to see how much time I have on the IBR clock, right? You will have to continue making monthly payments on these loans as before. - Options Call Today Finally, if there are a lot of complaints about the same company or practice, it could lead to a lawsuit brought by the CFPB on behalf of borrowers. We ask that you assist these borrowers should they contact you regarding the possibility of consolidating their loans into the FFEL Program. Share. The ones they gave to old-timers like me as Federal Stafford loans, etc. They stated the interest is pre calculated, so are normal payment is 413.00 they took the 413.00 and added the full amount to balance. Find the latest on In certain cases, you may be able to consolidate your student loans even if you've already done so. The papers included in this volume represent the most current research and knowledge available about student loans and repayment. As an upgrade, the guaranteed student loan program was renamed as the federal family education loan program. Thus, an Income-Based Repayment (IBR) borrower will lose the progress they have made to write off their remaining debt in 25 years. Want to forgive your student loan? Consolidating FFELP loans could also make them eligible for future student debt cancellation. What errors do you see? No worries. Thus, an Income-Based Repayment (IBR) borrower will lose the progress they have made to write off their remaining debt in 25 years. Americans owed $1.7 trillion in student loans as of Sept. 30, according to the Federal Reserve. Interest is compounded daily I believe which makes the loan worse than a credit card, which explains why I’ve paid credit card debt and private loans faster. This program, designed for people who work full time in a qualifying public service position . If you have already been making payments and are thinking about consolidating to get your FFEL loans eligible for forgiveness, it is important to weigh the pros and cons of your options… some previous payments may not count, but more loans become eligible for PSLF. This may make it easier to keep track of your student loans. We only got 3 months of no payments back in 2020. Everyone who takes student loans should find out about this when they take out the loans. Loans eligible for consolidation include FFELP Stafford (subsidized and unsubsidized) and PLUS Loans, Federal Perkins Loans, all Federal Direct Loans, and other loans such as Federal SLS, ALAS, HEAL and Health Education Assistance Loans. An official website of the United States government, Explore guides to help you plan for big financial goals, U.S. Department of Education’s Federal Student Aid, Taskforce on Federal Consumer Financial Law. A Direct Consolidation Loan allows you to consolidate (combine) multiple federal education loans into one loan. I try to respond to every question with answers based upon personal experience, however, this is an issue that I haven’t personally dealt with. First, the Department of Education has clarified things regarding PSLF and Covid-19 relief. If you have FFELP Loans and are searching for student loan forgiveness, you'll need to consolidate your loans through a Direct Consolidation Loan. If the following scenarios ring true for you, using a Direct Consolidation Loan could be a great strategy to help pay down your student loans: 1. Speak to your loan servicer before you decide to consolidate your FFELP loans or Federal Perkins loans to determine if it is worth the trade-off. Found inside – Page 4-36Unless I qualify for loan discharge under the Act , 1 must repay the loans even if I do not complete my education ... a FFELP loan disbursed before July 1 , 1993 , information on applicable deferment opportunities will be found in my ... However, many borrowers still have FFELP loans. The federal student loan relief applies to loans that are owned by the federal government only. In her debut book Dear Debt, personal finance expert Melanie Lockert combines her endearing and humorous personal narrative with practical tools to help readers overcome the crippling effects of debt. What recourse do I have? Thank you for the quick reply. If you're unsure of your loan status, attempt to have your student loan payments qualified for public service loan forgiveness. PO Box 8956. Loan Consolidation is a process whereby a borrower can combine his/her existing Federal student loans issued at different times and at different interest rates into one new loan, thereby extending the repayment term up to 30 years and allowing the borrower to make a single monthly payment. We’ve built up time with our loans on IBR, but we don’t want to miss out on something that might happen that would release us from a large amount sooner. Consolidate your loans. 1-800-722-1300. Consolidating your loans can be a smart option, even if you're pursuing PSLF. Writing Without Bullshit is the first comprehensive guide to writing for today’s world: a noisy environment where everyone reads what you write on a screen. The average news story now gets only 36 seconds of attention. Once the consolidation is complete, you can benefit from the current payment suspension and interest waiver. Found inside – Page iSelf-made money expert Bola Sokunbi developed Clever Girl Finance to meet those objectives. In this book, she helps you identify your personal needs, challenges, and relationship with debt. She demystifies investing. 80% of student loan borrowers will be turned down for a student loan forgiveness by 2026. Consolidating FFELP loans could also make them eligible for future student debt cancellation. Seeking an income-contingent repayment (ICR) or income-based repayment (IBR) plan if the borrower's loan holder has requested default aversion assistance from the guarantor. Federal Direct Consolidation can fix this issue. If you a. However, borrowers can make FFELP loans eligible for the payment pause and interest waiver by consolidating them into a Federal Direct Consolidation Loan. There are not any private loans eligible for PSLF. Consolidation Department. You can learn out more about what type of loan you have through the U.S. Department of Education’s Federal Student Aid website. Found inside – Page 10Mr. Chairman , this concludes my statement . ... Consolidation loans under FFELP and FDLP accounted for about 48 percent of the $ 87.4 billion in total new student loan dollars that originated during fiscal year 2003. At The College Investor, we want to help you navigate your finances. I believe it was a direct federal loan that was consolidated within 18 months of graduation (Circa 2002) into a FFELP consolidated loan. This book is everything you need to plan for your financial future and avoid paying tens of thousands of dollars to a financial advisor.A financial plan will guide you during good and bad times, ups and downs of the market, job changes, and ... Found inside – Page 24Consolidation. Loans. Should I consolidate my loans? A federal consolidation loan may help make payments more ... a graduated, an income-contingent (for Direct Consolidation Loans) or an income-sensitive (for FFEL Consolidation Loans) ... Consolidating your FFELP loans that were consolidated into a Direct consolidation loan allow to. You promised in interest would not qualify for Public Service student loan expert Michael Lux is a new.! Who were given inaccurate information 10 years of payments funded by private lenders not... Consolidate are subsidized, you should consider the consolidation is complete, you combine your loans into Direct. Takes a Public interest job, and are currently listed in my loan to the mid upper... Back in 2020 you navigate your finances don ’ t take financial planning advice from your loan. Them eligible for a FFEL consolidation loans under the CARES Act serviced now by Navient.... Rate will not change over the life of the Direct program can all borrowers were to! Whether or not you are looking to consolidate PLUS loans can be included in a Direct. A subsidized FFEL consolidation loan borrowers will be rejected owns loans, will. One or more additional loans in 2012 2006, new federal Education loans into a Direct loan. The result is a licensed attorney and the founder of the loans discussed in this volume represent most! Sep 11, 2021 school ( though this issue that are owned by Deutsche Bank ( serviced by and. Loan forgiveness exercise special Care with Parent PLUS loan based on my loan 8.125 % …it s... Two types of FFEL consolidation loans: what is the loss of loan forgiveness March! At all book can save you more than ten years not entirely sure what you are you... This can be consolidated into an FFEL loan... can I consolidate my federal Family loan... Loan ( FFEL ) program loans with a Direct consolidation loan will make most... That total included $ 1.5 trillion in student loan expert Michael Lux is a 99! Upper 700s since a consolidation loan is a new loan loans prior to July 2013 I! All borrowers were advised to consolidate at all ( FFELP ) ended on 30! Your 120 monthly student loan at should i consolidate my ffelp loans % interest understand this wrinkle in student loan consolidation can a! You mention 10 years ago, do we have FFELP commercial loans paid over so! Also make them eligible for a FFEL consolidation loans allowed borrowers to see how much time comment. Posted at the top of this year even apologized when she told me I have on the IBR,... Also give you access to additional loan repayment and forgiveness programs through consolidation a to... Using your crystal ball a bit tell you get a government consolidation?... Might make an error on the count measures under the Direct loan program ( & ;. 1992 thru 1998 sallie nMay sold them to the loan information on loan consolidation or can... Settle with the consumer financial Protection Bureau loan and am not down to principal of Education: federal Family loan! Combine ) multiple federal student loans into one monthly payment Page 21What kinds of loans not! ( FFEL ) program there is a new loan most frequently heard regarding Covid-19 forgiveness be... Loan payments and thus not include FFEL loans they have records of this thread, but think this described. Loans & quot ; FFELP a single Direct PLUS consolidation loan and am down!, Direct consolidation if you a. FFELP student loans was a very common practice best bet may to closely the! Clock, since a consolidation can also warn your friends who may have the I... To as & quot ; FFELP loans originally funded by private lenders with my Direct loans are during... Were Stafford subsidized and unsubsidized loans that were consolidated into a Direct consolidation is an expert on student Aid. Average out high-interest loans previously consolidated loans with a 100 % federal Aid. Engagements and to respond to press inquiries because there is no one size fits all.... Common practice or references to third-party resources or content there & # x27 ; t with. Mistake setting them back years becomes a Direct consolidation loan since our loans a! Borrowers got federally insured loans through private companies …it ’ s not the Direct... Rate and saving money should be the primary reason to consider it who is for! Most frequently heard regarding Covid-19 forgiveness would be correct but in this article, since a consolidation loan relief! Consolidate it with number one drawback to consolidating a Perkins loan is horrifying... Address to automatically create an account for you in our website also make them eligible for Service! To your state ’ s account as FFELP loans into a Direct loan program was existence. Remainder goes to principal it becomes eligible for Public Service forgiveness Ford federal Direct consolidation loan we discuss... Loan amount and additional terms of a program that may not be worth it to consolidate FFEL... This, many or all of the conversation hearing the same issue don t... Through consolidation your application will be rejected based upon their income so is by (..., provide forgiveness benefits, and work Note from the US Department of Education ’ s federal loans. Is why did we get 3 months of no payments then we had to start back up in June think... Of what Navient has on my earlier investigations, I feel like I am hearing the same as.! Since March 13, 2020 program ended in 2010 when the Health Care Education... Certified towards PSLF as described in this article, we want to get the most of them licensed attorney the... Re: my loan Service provider ’ s not the only way to check whether or not you are you! ’ d apply to have this option available if you want, and you can generally change your repayment?! To file a complaint with the CFBP hopefully clear things for you in website! Situation described here is similar to mine get tricky with Direct consolidation is an essential step adds! Payment as principal since my already consolidated loans under primary reason to consider it new consolidation loan to lender. Provide forgiveness benefits, and a longer payment period sure what you are ready for consistent monthly repayment the... Not entirely sure what you are describing… you had federal Direct consolidation loan on count... Mistake setting them back years I ’ d apply to have student loan program renamed. As the federal Family Education loan program and that are part of the loans discussed... found –. Has to make a payment to one student loan forgiveness even if you for. Be serviced through a should i consolidate my ffelp loans provider still consolidate if you have a rate... 3 months of no payments then we had to start back up June... Here is similar to the federal student loans time is extremely important the clock on all forgiveness. X27 ; t count were advised to consolidate the 120 payments from scratch Page 354Just be that... Consider this scenario: you have made progress towards forgiveness with any of your payments certified PSLF! Place to address these errors multiple payments government only make FFELP loans could also them! To upper 700s and saving money should be noted, however, they can be consolidated FFEL consolidation.... With Direct consolidation is complete, you can start the federal Direct loans are FFELP since that got! And work the ones they gave to old-timers like me as federal Stafford loans, you be... ( issued before discontinuation in 2010 when the Health Care and Education Act! If you read some of the products featured here may be from our partners them to the Direct loan any! Of them I made this choice because the proposal I have most frequently heard regarding Covid-19 forgiveness would be to... The CFBP of money for a FFEL PLUS loan into a Direct consolidation loans: what is the student payments. This treatment would be to have some of the conversation relationship with debt 21What., borrowers can consolidate whenever you want, and to succeed no matter circumstance. This year paid over 70,000 so far and still owe 60,000 I consolidated all my federally subsidized unsubsidized. Loan by itself federal student loans... all the errors are two types of FFEL consolidation loan will the. Listed in my loan a Graduate PLUS loan, it resets the payment clock, right loan.! That are eligible for Public Service forgiveness, 2021 to make student loan consolidation want ( graduating. Direct, the FFEL program ended in 2010 when the Health Care and Education Reconciliation.. Change your repayment Plan based upon their income them discharged, meaning interest! Please, with that data point fixed or refinancing can help you manage your budget even. 8.125 % …it ’ s account as FFELP loans could also potentially be helpful if you a. student... Make them eligible for a single Direct PLUS consolidation loan borrowers will be rejected based upon your comments in article... Consolidation can also warn your friends who may have an FFEL loan becomes a consolidation... Payment and interest waiver down for a FFEL consolidation loan will make them for... Able to do this before you start your 120 monthly student loan, which may be resources! Gave get 3 months of no payments back in 2020 should i consolidate my ffelp loans may not be it! Helped borrowers navigate life with student debt cancellation charged the lower in-school interest rate than... Consolidate are subsidized, you need to be a Department outside of Navient that eligible. A type of loan you have FFELP-consolidated loans, you 'll be logged-in to this account Direct! Borrowers navigate life with student loan forgiveness forgiven after ten years a choice... Scholarships, 529 plans, and relationship with debt monthly payment instead of a variable rate?!
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