Student Loan Show | Overcoming Debt from College a

Does the Dept of Education have to provide copies of the Promissory Notes? If not, how can I confirm the debt? What if they don’t have all the pages? You’re entitled to copies of your student loan promissory notes. Still, the Department of Education isn’t the only place to get them. In fact, there are 6 ways to find information about your federal student loans. How to get your federal student loan documents The Department of Education has copies of all of your master promissory notes you signed so you could get your federal student loans. You can get a copy of your Master Promissory Notes by going to studentloans.gov and entering your FSA ID. Click on “Completed Master Promissory Notes” under the menu bar heading that says “My Loan Documents.” The completed Master Promissory Notes will appear, and you can download them directly. If what you’re really looking for is a copy of your entire federal student loan file – not just the promissory note but also any other information the Department of Education has for you – take a look at the Freedom of Information Act. The Freedom of Information Act allows you to get records and information from the Federal government so long as it doesn’t fall into one of the exemptions related to privacy or national security. Because your student loan information doesn’t fall into any of these exemptions, you should be fine. At this point, you should be able to confirm the fact that the debt is yours through either StudentLoans.gov or using a Freedom of Information Act request. However, there are other ways of confirming the debt. The third way would be to login to the National Student Loan Data System or NSLDS. NSLDS is the US Department of Education’s central database for student aid, and it lets you see everything about your federal loans and grants. It’s like a credit report for your federal student loans, and it should give you a pretty good sense of what’s outstanding. The fourth way to get your loan information is by getting in touch with your school. Your school may be able to give you information on your cost of attendance and how charges were paid. Your loan servicer, the company that sends you bills every month, may be able to provide you with documents about your federal student loans. The servicer’s job is to administer the loan so long as it’s not in default. The servicer would have information about the accounting of your loan, how charges were assessed, payments received, forbearances and deferments, and other account-related events. If your loan is in default, call the Default Resolution Group of the Department of Education at 800-621-3115. Default resolution Group will tell you which servicer was handling your loans when they were in good standing. Borrowers of defaulted loans may demand the loan information from the debt collector. You may not get it, but it’s a possibility. What if the Department of Education doesn’t have a complete copy of the Promissory Note? If you’re being sued by the government for an unpaid loan, you can demand copies of your documents during pre-trial discovery. If the government can’t produce the complete note, they’ll likely argue that you received the benefit of the loan funds un tuition was paid. If you can prove that you or somebody else paid the tuition and fees, that would defeat the Department of Education’s argument. Without such proof, however, this argument may not go far. If the Department of Education hasn’t filed a lawsuit and they’re using an administrative collection remedy, you can demand an administrative hearing to request the loan information. As in litigation, you should be prepared to prove that you or somebody else paid the tuition and fees. Avoid the temptation It’s tempting to demand a copy of the promissory note, but refusing to pay the federal student loan is usually a bad idea in the absence of a valid concern. There are administrative ways to get a federal student loan discharged if you’ve been the victim of identity theft or some other unauthorized action. If those requests are denied, then you might need to file a lawsuit against the Department of Education. The post Getting Your Federal Student Loan Promissory Note appeared first on Student Loan Podcast.

If they don’t give you a copy of the note, does the student loan go away?Demanding a copy of the student loan promissory note – is it the newest scam, the oldest trick in the book, or something else entirely? Student loan counselors, negotiators and other so-called “debt relief services” tell you they can wipe out your student loan by demanding proof that the collector has proof of ownership. For borrowers, this sounds like a miracle – and who wouldn’t spend a few thousand dollars on something like this that could change your life forever? If this is such an effective way to solve a student loan problem, why aren’t more people talking about it? The post Student Loan Debt Validation – Legit, Scam, or Something Else? appeared first on Student Loan Podcast.

Chelsea has a question about her defaulted student loansI was in default and garnishment of wages was put in place. I am now in rehabilitation with an agreement and making payments. I requested hardship to end garnishment, filed the paperwork for it and was told it would take 30-60 days for hardship decision. It is now day 90+ with no decision and I am in a bad financial bind due to the garnishment. The request has been escalated to region twice due to number of days and I was told decision could come any day but this is day 90+. Is there anything else I can do? Administrative Wage Garnishment – There Are Ways to Ease the PainOn today’s show we tackle Chelsea’s question and help her better understand her options. Student loan default doesn’t need to be a financial death sentence – you’ve got choices, but you need to be careful to sure that you’re making the best one for your situation. Some of what you’ll hear today includes: When requesting a hearing will stop an administrative wage garnishment – and when it won’t The meaning of financial hardship, and what you’ll need to prove when using this argument as a shield against wage garnishment Why the government doesn’t always need to grant a hearing on a claim of financial hardship How to get a rehabilitation agreement with the lowest monthly payment The post How (and when) to stop an Administrative Wage Garnishment with a hardship hearing appeared first on Student Loan Podcast.

In the world of student loans, a lot can happen in a very short period of time. In the past 1,022 days we’ve seen a new President and Secretary of Education who seem intent on dismantling student loan protections as quickly as possible. Colleges have failed. Regulations have been put on hold, reinstated by court order, and subsequently ignored. A Presidential campaign has taken shape based largely on the question of solving the student loan crisis. Has the entire world gone crazy? Is the student loan system broken forever? Fear not – I’ve got your back on this one. Have a Question About Your Student Loans?I’ll be answering YOUR student loan questions on the show. Just head over to the contact page! The post 1022 Days in the World of Student Loans appeared first on Student Loan Podcast.

Welcome to the new season of the show! This episode was recorded live at FinCon 18 with Joshua R.I. Cohen, a fellow student loan lawyer. The post Student Loan Repayment Strategies for Doctors appeared first on Student Loan Podcast.

October is ADHD Awareness Month and the 2016 theme is “Knowing is Better.” So we’re going to talk about knowing the best way to keep your student loans under control using accommodations to maximize your chances for success. ADHD is a brain syndrome that has impairs the functioning of what are called “executive functioning skills.” Those include attention, concentration, memory, motivation and effort, learning from mistakes, impulsivity, hyperactivity, organization, and social skills. Two-thirds of children with ADHD continue to grapple with the condition throughout adulthood. Of the 6.4 million children diagnosed with ADHD, nearly 4 1/2 million will remain part of their lives forever. ADHD also affects about nine million adults in the United States. Adults with ADHD have a limited ability to stay on task at work, have difficulty concentrating on what others were saying, following through on tasks, completing projects, or maintaining organization at home and at work. They are less able to get along with others at work and in social situations, suffer from relationship problems, and often feel like failures. They are more prone to depression, anxiety disorders, drug and alcohol addiction, divorce and suicide. When it comes to money, adults with ADHD are more likely to file for bankruptcy, fall into foreclosure, have greater credit card debt, and go through more prolonged periods of unemployment. On today’s show, I’ll go through my top strategies to help you successfully manage your student loans if you have ADHD. Self-Screener for ADHD Many adults have been living with Attention-Deficit/Hyperactivity Disorder and don’t recognize it because its symptoms are often mistaken for a stressful life. The World Health Organization developed a self-screener to be used as a starting point to help you recognize the signs/symptoms of Adult ADHD. you can find a link to that screener on our site as well. It is not meant to replace consultation with a trained healthcare professional. An accurate diagnosis can only be made through a clinical evaluation. Regardless of the questionnaire results, if you have concerns about diagnosis and treatment of Adult ADHD, please discuss your concerns with your physician. Resources Adult ADHD Self-Report Scale (ASRS-v1.1) Symptom Checklist Instructions CHADD: The National Resource on ADHD American Academy of Child & Adolescent Psychiatry – ADHD Resource Center National Resource Center on ADHD The post How to Manage Your Student Loans When You Have ADHD appeared first on Student Loan Podcast.

Kiarra has three student loans – one is private and two are federal. She’s had the loans for nearly a decade and, though she started making payments, she went into default because her income didn’t cover the payments. She filed for bankruptcy and now she’s got to start making payments on the loans again. She began her federal student loan consolidation online at www.StudentLoans.gov and worries that she may not be approved. But her biggest concern is the adjustable rate private loan, held by EDMC Discount. With no college degree and no financial ability to go back to complete her education, Kiarra is depressed and confused about her options. Listen in to hear my advice on how to handle her private student loan payments. Are Student Loan Defaults Going Down? According to recent reports, student loan defaults are on the decline. But look a little deeper and you’ll see that the default rate is actually higher now than it was last year. About 593,000 former college students out of 5.2 million total borrowers defaulted on their federal debt as of Sept. 30, 2015, according to the US Department of Education. Default rates at public and for-profit colleges dipped, while private, nonprofit schools experienced a slight increase. Data analyzed by researchers at the Federal Reserve Bank of New York and the Treasury Department suggest that student loan defaults within the first three years of repayment account for only about half the total number of eventual defaults. In fact, more than twice as many borrowers who entered repayment in 2009 had defaulted by their fifth year than by their third year, according to research published last year by the Brookings Institution. Resources Student Loan Default Rates Continue To Drop (Fox Business) Student Loan Default Rates Decline, But A Record Number Of Borrowers Are In Default (Consumerist) Official Cohort Default Rates for Schools (US Department of Education) The post Private Student Loans Won’t Work With You – Now What? appeared first on Student Loan Podcast.

Jay Fleischman is joined by Adam Minsky, a fellow student loan lawyer based in Boston. During this episode, recorded live at FinCon16 in San Diego, we talk about: Why only 40% of federal student loan borrowers are in an active repayment plan; The reason why most people student loan borrowers rely on forbearance rather than repayment through one of the income-dependent repayment plans; Understanding what kind of student loans you have; The role of the servicer – and who else may be controlling your federal student loan; Why servicers make so many errors; The heartbreaking conversation we have with people trying for Public Service Loan Forgiveness; and Why you should submit an Employment Certification Form – and the best time to do it. Resources Law Office of Adam Minsky Student loan servicing: Analysis of public input and recommendations for reform (CFPB Report – September 2015) Public Service Loan Forgiveness (PSLF): Employment Certification Form The post Adam Minsky and Jay Fleischman Live at FinCon16 appeared first on Student Loan Podcast.

Our next new show will be released on July 12, 2016. To keep things moving, I’ll be highlighting some of the interviews I’ve done on other podcasts. It’s a way of introducing you to different shows from other interesting and smart folks – I hope you enjoy the change of pace. For today, I present to you The His & Her Money Show with Talaat and Tai McNeeley. They’re a husband-and-wife team who reflect so many of the people I meet every day. When they got married: One had debt and the other did not. One made poor money decisions while the other made better money decisions. One had a low credit score and the other had a stellar credit score. They asked one another some difficult questions and climbed their way out of debt not once, but TWICE . . . TOGETHER. It was not always pretty and glamorous, but they turned it around by being honest and working really hard. Talaat and Tai are some of the nicest people I’ve met in a long time, and I was thrilled when they asked me to be on their show to talk about ways to tackle your student loans. What We Talked About The current state of the student loan crisis in America. The role that organization plays in order to pay off your student loans. Strategies to pay off your student loans effectively and quickly. Pros and cons of refinancing your student loans. Whether or not student loan consolidation is worth your while. Resources Mentioned During the Show StudentLoans.Gov Sofi Common Bond Earnest 6 Days to Student Loan Success One Tactic Per Day, Delivered By Email Enter Your Email Address To Get It FREE The post SLS056: Talking Student Loans with His and Her Money Show appeared first on Student Loan Podcast.

What do you do when you’re 3 years into income-based repayment and realize there might be a better way to pay off your student loan debts? Most people would jump at it, but that wouldn’t be the best move. Especially when it comes to Revised Pay-As-You-Earn, the federal government’s newest income-dependent repayment plan for Direct Loans. Revised Pay-As-You-Earn, or REPAYE, comes with some great benefits – a lower monthly payment, better interest subsidies, and often a shorter time to loan forgiveness. But with those benefits come burdens, such as problems that may arise for certain married couples. The question of whether to remain in Income-Based Repayment or switch to REPAYE is made all the more difficult when a borrower is also working to pay down private student loan debts while employed in a position that will ultimately lead to Public Service Loan Forgiveness. On today’s episode we meet Leo, who asks the following question: Currently, I owe just over $72,000 in Federal Student Loans, plus about $26,000 in private student loans. Right now all of my efforts are going into paying off my private student loans as I am enrolled in Public Service Loan Forgiveness (PSLF) at about the 3-year mark (7 years left of qualifying repayment). I just recertified my income and my payment is almost doubling to $300 on Income-Based Repayment (IBR). Since Pay-As-You-Earn (PAYE) is not an option due to loan disbursement date, if I switch to Revised Pay-As-You-Earn (REPAYE), I can lower my payment to $200 as it requires 10% of income instead of the old 15%. The other great advantage to switching is the interest would be subsidized, right now I am accruing interest faster than I am making payments. My hesitation comes from the unforeseeable future and the stipulations that come with REPAYE. The biggest issue is if I get married, I lose the option to file taxes separately and only pay based on my salary. Right now, I have no plans on getting hitched but I am already in Public Service because of my loans and don’t want PSLF to dictate my marital status also. Other drawbacks that I consider but worry much less about is the lack of cap to REPAYE dollar amount and the fact that if you switch to another plan, all of that interest is put back in retroactively. While I would enjoy a lower payment, the real advantage would be faster payment of my private student loans and not have a higher balance due to unpaid interest standing on my credit report for the next 7 years. I am pretty sure my question answers itself until you put the marriage stipulation in there. Just wondering what your thoughts are on this; do I keep IBR or switch to REPAYE? Any insight you could provide is greatly appreciated. Listen to the episode and find out what I’ve got to say to Leo about his decision – and why he should take the leap right now. 6 Days to Student Loan Success One Tactic Per Day, Delivered By Email Enter Your Email Address To Get It FREE Resources For This Episode Basics of Income-Based Repayment Public Service Loan Forgiveness Revised Pay-As-You-Earn Financial Rock Star Podcast The post SLS055: Is REPAYE a Better Fit for Public Service Loan Forgiveness? appeared first on Student Loan Podcast.

In order to win a student loan lawsuit, the lender needs to prove that it owns the debt and that the amount claimed is correct. That first part, the lender’s ability to establish title to the student loan debt, is known as standing. Unless the plaintiff is the same lender you borrowed the money from, it must prove purchase of the loan in order to win the case. For private student loan companies such as Navient (click here for an article explaining the relationship between Sallie Mae and Navient), this is a major headache. That’s because most of the time, you’re not being sued by Navient – you’re being sued by someone else. In order to win the case, Navient has to prove that it has legal ownership of the loan. That would be a problem for most corporations – but for private student loans, it’s even tougher because they go through a number of transfers, and sometimes re-transfers. Follow Your Private Student Loan For example, if you have a private student loan from Navient, your actual lender may have been one of a number of entities including: Sallie Mae Bank; SLM Education Credit Finance Corporation; NM Education Loan Corporation; SLM Education Credit Management Corporation; or SLM Education Loan Corp. Some private student loans are held by the lender, but many others are transferred to wholly-owned subsidiaries of Navient with names such as: VG Funding LLC; Blue Ridge Funding LLC; SLM National Funding LLC; and VL Funding LLC. The loans are then transferred to SLM Funding LLC, which is yet another wholly-owned subsidiary of Navient. SLM Funding LLC holds the loan for a few minutes and then transfers it to a company with a name such as: Navient Private Credit Student Loan Trust SLC Student Loan Trust SMS Student Loan Trust SLM Student Loan Trust This is known as securitization, the process of taking a group of assets that otherwise can’t be sold for immediate cash and, through financial alchemy, transforming them into a security that can be sold on the financial markets. You Think You Owe the Money to Navient (But You Don’t) That security, known as a trust, hires a company to send you bills and collect your payments. That company, known as a servicer, is usually Navient. Navient sends your money to the trust that owns the loan, and the trust divides the money among the investors. It’s easy to see why you think you owe money to Navient, but that’s not the case. Instead, you owe money to this shadow entity you’ve never heard of. And that’s the company that will ultimately file a lawsuit against you. 6 Days to Student Loan Success One Tactic Per Day, Delivered By Email Enter Your Email Address To Get It FREE Proving Ownership of a Navient Private Student Loan The transfer of your private student loan from Navient to the trust involves a number of complex documents that requires the participation of various other entities. For example, the SLM Student Loan Trust 2007-8 (a trust that includes federally-guaranteed student loans originated by Sallie Mae before July 2010) involves all of these companies: The original lender, SLM Education Credit Finance Corporation. Subsidiaries of the lender, including VG Funding LLC, Mustang Funding I LLC, and Mustang Funding II LLC. The company that took the loans from the lender and its subsidiaries, SLM Funding LLC. The trust, SLM Student Loan Trust 2007-8, which took the loans from SLM Funding LLC. As you can see, the private student loan was transferred at least 2 times – possibly 3. In order for SLM Student Loan Trust 2007-8 to prove ownership of a particular loan, it must show all of the purchase and sale agreements as well as the lists of loans that were transferred as part of each of those agreements. Though this particular trust doesn’t involve private student loans, the scheme is largely the same for all of the Navient and Sallie Mae trusts. Screenshot from the Prospectus Supplement to Base Prospectus dated October 16, 2007 for SLM Student Loan Trust 2007-8 Other Agreements Are Also Important The trust documents refer to other agreements – and each of them plays a vital role in how Navient handled your loan. According to documents on file with the US Securities and Exchange Commission, The Bank of New York Trust Company, N.A., holds legal title to the student loans for SLM Funding LLC under an interim trust agreement. The Bank of New York Trust Company, N.A. also enters into guarantee agreements with agencies that guaranteed payments of the loans in the event that a borrower defaults. Sallie Mae, Inc. (now known as Navient) acts as the administrator of the trust under an administration agreement. But Navient is allowed to transfer its obligations as administrator to another company. Navient is also the servicer of the loans, responsible for servicing, maintaining custody of and making collections on the trust student loans under a servicing agreement. It also bills and collects payments from the companies that guarantee payment of the loans. If Navient fails to perform its duties, it may be required to buy the loans Each of these agreements is important because they outline how the loans are to be handled. Rights and responsibilities such as rehabilitation options and collection procedures are clearly spelled out, and understanding those duties can help you determine whether your loan was managed properly. Don’t Settle, Don’t Surrender If you fall behind on a Navient or Sallie Mae private student loan, don’t settle without proper documentation. Though you have no right to copies of the agreements unless you’re defending an active court case, this isn’t bad news. A student loan lawyer with a deep understanding of student loan securitization can determine not only whether the loan was properly and validly transferred, but also whether Navient followed its own rules for properly managing your loan. Fighting the lawsuit may well put you in a position for a better outcome than any settlement. Why settle for settling? The post SLS054: Sued by Navient for a Student Loan? This Could Help You Win. appeared first on Student Loan Podcast.

When you go into default on your student loans, information is hard to come by – yet it’s of vital importance for getting back on track with payments. Suddenly you’re getting bills and collection calls from companies you’ve never heard of, and they’re asking for far more than you think you owe. Most experts will tell you to demand copies of your loan documents before agreeing to make any payments, but what they don’t tell you is just how difficult it can be to track down what you need. On today’s show we have a question from Rita, a listener who’s having a tough time getting information from the debt collector handling her student loans. Rita sent in this question: Dear Jay, I’ve had it up to here with these student loans and I can’t seem to get rid of them. I had all my student loans with Sallie Mae when I left school in 2011, and I owed about $35,000. Sallie Mae sold the loans to a company called Navient but they didn’t give me any warning. Then one day I get this letter from Navient telling me to send them money – I never heard of these people before, so I didn’t pay them anything. That was in 2014 I think. Now I’m getting letters and phone calls from a company called Performant and they say I owe $45,000 with collection fees. I’ve been asking them since last June to show me proof that the debt in my name is valid but they’re not giving me anything. I called Navient but they’re not helpful, so I even submitted a complaint to the Consumer Financial Protection Bureau over it. This looks suspicious to me, and I’m thinking they don’t have the documents to prove I owe them anything. Is there a way I can make them send me the documentation proving my debt is valid? Does the fact they didn’t send it mean they don’t have the promissory note? Can I get my loan back to Sallie Mae? How deep does this scam go, and how can I sue them? 6 Days to Student Loan Success One Tactic Per Day, Delivered By Email Enter Your Email Address To Get It FREE Resources Federal Student Loan Ombudsman FSA Loan Servicing, Consolidation and Servicing Records National Student Loan Data System Records Retention Policies Recordkeeping and Disclosure Rules for Schools FSA Handbook: Recordkeeping, Privacy, & Electronic Processes Fair Debt Collection Practices Act (text of the law) Privacy Act of 1974 (text of the law) A Citizen’s Guide on Using FOIA and the Privacy Act to Request Government Records   The post SLS053: Debt Validation and Your Student Loans appeared first on Student Loan Podcast.

Home ownership is The American Dream, at least to some people. The good news is that with proper planning and a goal-oriented mindset, you can qualify for a mortgage even if you’ve got what feels like a crushing amount of student loan debt on your shoulders. In fact, a 2015 study done by TransUnion found that in only three to six years, student loan consumers in their 20s are able to pass similarly aged consumers without a student loan in overall loan participation rates on mortgages, auto loans, and credit cards. The road to a mortgage is a pretty straight one that requires you to take only 5 steps. They are: Minimize your federal student loan payments Make your student loan payments on a timely basis Maximize your ability to save money for a downpayment Look for ways to bring down the balance of your private student loans Maximize your income On today’s episode we look at each of the 5 steps more closely to help you devise your strategy for getting a mortgage. Minimize Your Federal Student Loan Payments It used to be the case that if you deferred your student loans, they wouldn’t count when it came time to apply for a mortgage. Not so anymore. Under new FHA guidelines that went into effect in September 2015, applicants who had been granted a temporary deferment from making monthly student loan payments for at least 12 months are required to include that debt ignored in their debt-to-income ratios. Debt-to-income is used by lenders to determine whether you’ve got the ability to pay your mortgage. If your debt-to-income ratio is too high (typically 43 percent), the lender will see you as more likely to default on the mortgage. FHA rules require that 2 percent of your outstanding student loan balance be counted toward your debt-to-income ratio if your loan is in deferment. But if you’re in repayment then the FHA looks at your actual loan payment in figuring debt-to-income ratios. The solution, then, is simple. For your federal student loans, you should opt into one of the income-dependent repayments immediately. This will keep you out of deferment and minimize your student loan payments. Make Your Payments On a Timely Basis As I’ve said in the past, a credit score is a number that reflects your historical repayment patterns and infers your present ability to make payments. It’s calculated based on five categories, including: The amount you owe on your outstanding debt Your payment history The percent of your credit that is new, as opposed to longstanding Length of your credit history Mix of different types of credit When you make your student loan payments on time, you show your ability to pay and build a positive payment history. You also lower your debt-to-income ratio to the extent that you’re reducing your balance. The longer you keep it up, the better your credit score. Maximize Your Ability to Save Money Making your student loan payments on time is bound to reduce the amount you’ve got left over to save for a downpayment. But without that down payment, your chances of getting a mortgage are slim at best. In order to build your down payment, you need to start with a determination of how much money you can afford to spend on a house based on your income and bills. If you need help figuring out what you can afford, try a home calculator like the one from Bankrate. From there, you can begin to save money. In fact, you want to shoot for more than 20% of the purchase price because it will make it easier to get approved for a mortgage. A 20% down payment also helps you  avoid Private Mortgage Insurance, the additional charge you’ll pay for your mortgage company’s insurance policy that gets added if you owe more than 80% of the value of your home. If you live in a place where 20% is going to be more than you can reasonably save in the next 5 years due to property values, don’t worry too much. Fannie Mae and Freddie Mac will now buy mortgages with as little as 3% down, which means some mortgage loans are now easier to get with a lower down payment. Now that you’ve got that number in hand, you can start saving. To do that, you need a budget and a savings plan. Use a spreadsheet to deduct your monthly expenses from your monthly income, and then start cutting out unnecessary expenses ruthlessly. Any money left over in your budget should be saved, ideally automatically so you’ve got less of an ability to cheat yourself. Have your payroll company deduct a fixed amount from each paycheck and have it direct deposited to a saving account. You can supplement your savings by using a service like Digit, which automatically moves money from your checking account to a separate savings account based on your income and spending patterns. If you’ve got an IRA you should know about an IRS tax benefit for first-time home purchases through your IRA account. Though you’ll have to pay income taxes on the withdrawal, you won’t have to pay an early distribution penalty if you need to take up to $10,000 for a first-time home purchase or for building a home. If you’re dealing with a Roth IRA, the investment account has to be at least five years old before it can be tapped for this qualified distribution. Taking a withdrawal from your IRA should always be your last option because it’s like stealing from your future in order to pay for your present. Still, it’s something to consider. Reduce Your Private Student Loan Balance The biggest roadblock to your ability to get a mortgage is your private student loan. These loans don’t offer any income-dependent repayment options, and often come with variable interest rates and guarantors.without IDR, usually with variable interest rates, and often with guarantors and cosigners. You want to bring them down as fast as you can.Refinance with a company like SoFi, Common Bond, or others. Get a better rate so you can pay it off faster. If you can, consider refinancing with a company like SoFi, Common Bond, or other banks that offer private student loan refinancing. Get a better rate so you can pay off the private student loan more quickly. For many people, refinancing isn’t an option. If you’re in that position, consider selling belongings that aren’t absolutely necessary. It’s going to hurt, but the pain is lessened by keeping your eye on your long-term goal of getting a mortgage. Maximize Your Income There are only two ways to get out of debt and save money – spend less or make more. Ideally, you’re going to do both as you look to achieve your goal of getting a mortgage. Consider taking on a second job. Sacrifice your leisure time for the money that comes with working more. With so many options for making more money – from Task Rabbit to Uber and Lyft to short-term gigs on Craigslist – there’s no shortage of opportunities. It may not be glamorous work, but it’s an honest and ethic way to bring in more cash. Even if You Don’t Want a Mortgage Maybe you don’t want to buy a home now. You may never want to take on the responsibilities of home ownership, in fact. But when you work towards a lower student loan debt and a fatter savings account, you have the freedom of choice that isn’t otherwise available to you. The post SLS052: How to Get a Mortgage If You Have Student Loans appeared first on Student Loan Podcast.

We rely on our credit score for everything from getting a mortgage or a car loan, to renting an apartment and even things like insurance and getting a new cell phone. Though we may not always have the best credit scores, we want to do whatever we can in order to maximize that number. Outside your mortgage, your student loan debt is probably the biggest outstanding loan you’re carrying. So if you get a better handle on how your student loan impacts your credit score, you can make some smarter choices. Your FICO Score The most widely used credit scores are FICO Scores, the model created by Fair Isaac Corporation used by most lenders to help them make lending decisions. Your score, which has a range of 300-850, is calculated solely on information in consumer credit reports maintained at the credit reporting agencies. Your FICO Scores are calculated based on five factors; the importance of any one depends on the overall information in your credit report. It’s difficult to measure the exact effect of a single factor on your credit score is calculated without looking at your entire report because it will differ based on your entire credit profile. That said, it’s certain that the higher your credit score, the more competitive the interest rate you will receive. Here’s a rule of thumb: How Student Loans Build Your Credit Student loans are good to build credit for new borrowers. Once you’re out of school, you want to pay them down. Many students in college do not have a long credit history. Student loans can be a way to begin building that history because they don’t require a track record. These loans will also negatively impact your debt-to-income ratio, which may make it difficult for you to finance large purchases once you’re out of school. For that reason, you’re going to want to start making efforts to tackle the balance as soon as possible. This will not only allow you to finance larger purchases but will also allow you to start building a more diverse credit profile that includes revolving debt such as credit cards. This will further improve your credit score because installment loans such as student loans aren’t as heavily weighted in your credit score as credit cards. Paying Student Loans Maintains Good Credit Remember, a credit score is a numeric way of gauging your ability to repay debt. By making student loan payments on time, you’re showing the world that you not only CAN make payments, but you ARE doing just that. Paying your student loans builds your good credit history by establishing a positive payment history, lowering your debt-to-income ratio, and proving an ability to make payments. The Credit Impact of Deferment, Forbearance and Income-Dependent Repayment Many borrowers worry that using repayment assistance, such as forbearance, could hurt their credit scores during the time they are not making payments. But that’s not the case. Your credit score won’t suffer so long as you make the required payments. No payments are due during periods of deferment and forbearance, so there’s nothing negative going on. When you’re in an income-dependent repayment plan your payments are reduced – you’re not making less than what’s required of you. So if you need to take advantage of forbearance, rest easy — it will not negatively affect your credit score. Delinquencies Your Credit Score If you account goes a few days or weeks past due, don’t panic: It is unlikely that this will lower your credit score. Many federal loan lenders will not report your account past due to the credit bureaus until your account is 60 days past due at the end of the month. Just be sure to get your payment in as fast as you can. If there is a delinquency on your credit report due to a late student loan payment, bringing your account current will reflect positively on your credit history and raise your score. A continued delinquency will drag your credit score down and the only way to improve it will be to eliminate the past due status. How About Settlement? When you settle a student loan debt, your credit report will be updated to show that the balance is zero and that the account has been settled for less than the full balance owed. The account and history of delinquencies will still remain on the report for 7 years from the original delinquency date. Anytime you settle an account for less than the full balance, it is considered negative because the creditor agreed to take a loss and accept less than the full amount owed. Settling the debt won’t help your credit scores immediately, but it will give you the opportunity to end the prior delinquency and establish a new payment stream on other debts. Remember that new lenders look for a pattern of positive credit management. The longer you have paid your other bills on time, and the further in the past the collection account was paid, the more positive your credit history becomes. In that respect, settling your student loans will let you start to show that new positive pattern the lenders look for. I don’t usually recommend settlement if you’re nearing the statute of limitations on your private student loans. In that situation, settlement may involve paying a debt for which you are no longer legally liable. The negative credit information should automatically fall off your credit report 7 years after the account with the original creditor was first reported late. Paid accounts continue to report for 10 years. By paying an old debt, you’re adding years to the reporting. The Impact of Student Loans on Your Credit Depends on You How your student loans impact your credit score is largely in your hands. If payments are currently being made, that’s good. If payments aren’t being made and the account is delinquent or in default then you want to take steps to eliminate the debt or, at the very least, get back into timely repayment. Using the tips in this episode will help you keep your credit score as high as possible – and in our society, that’s often the most important consideration. The post SLS051: How Student Loans Affect Your Credit Score appeared first on Student Loan Podcast.

An increasing number of private student lenders are rolling out private student loans directed at parents. Sallie Mae’s parent loan will allow mom and dad to borrow at interest rates ranging from about 3.75% to 13%, with 10 years to pay it off. These loans will join the $150 billion of private student loan debt already in the marketplace, much of it cosigned and guaranteed by adults. Private student loans lack flexible repayment options and forgiveness opportunities that federal loans have. Because the government does not subsidize private student loans, the rates and terms are not regulated the way they are for federal loans, which makes private loans more risky and expensive. The default rate on these private student loans is far higher than that of federal loans, precisely because of the lack of repayment options. On today’s rewind episode I tell you everything you need to know about private student loans default – and how to get yourself out of a bad situation. The post REWIND: Here’s What To Do If You Default on Your Private Student Loans appeared first on Student Loan Podcast.