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Christie_1Lots of federal student loan borrowers are in the same boat now.  Have you consolidated your loans in an effort to get onto SAVE for the lowest possible payment?  But it seems to have backfired because your payment is now enormous?

Here’s some tips that you may want to be aware of:

  • A new consolidation will always provide an initial payment based upon the 10 year standard.  A client today reported her payment was to be $2,000!  She knew not to be concerned however because the SAVE review hadn’t yet occurred.  It’s a two step process:  first, consolidation, then evaluation for SAVE.
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Well folks, it appears that the Department of Education may have just closed the loophole which led to Borrowers double consolidating Parent Plus loans in an effort to get onto the more payment friendly SAVE program rather than the much higher ICR – Income Contingent Plan.  By doing a double consolidation, often the code showing an underlying loan to be a Parent Plus loan was removed.

We’ve just learned of a new entry on the NSLDS report:  the “Parent Plus Consolidation Indicator.”

Our guess is they’ve done this to close the “glitch”. It will now be readily apparent if any underlying loan within a consolidation contained a PLUS loan.

 

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Christie_1Lots of people are doing the mental gymnastics to determine whether they qualify for a Public Service Loan Forgiveness (PSLF) now under the IDR recount for Direct loans.  More time will count under this program than ever before such as extended forbearances, extended or even graduated payment plans or even just weird payments made from time to time.  Re-dating of all the loans in a Direct consolidation to the earliest date etc.  For many, this IDR recount will be a back door to PSLF after having missed the October 31, 2022 deadline to apply for PSLF.  Once 120 months are accumulated under PSLF, any remaining balance will be forgiven.  It’s 20-25 years for non-public service.

Remember though, any months of employment before October 2007 won’t count toward public service.  PSLF was instituted in October 2007 and didn’t even exist before then.

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I just received this from someone who benefitted from our You Tube Channel:

  • After finally conquering my fear of addressing my massive student loan debt, I came across several of your videos on YouTube. On numerous occasions I felt as if you had my case right in front of you! The hope I immediately felt was indescribable!

Wow.  Love this.

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Christie_1If someone needs to consolidate their FFEL or Perkins, or even Direct loans on different timelines for forgiveness, we normally assist by walking someone through this during a phone call or zoom strategy session.  That way it is done and immediate.  There are times where a paper application is needed however and here are the addresses for this (send certified return receipt or FedEx/UPS with tracking number):

Aidvantage

PO Box 300005

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arkovich_law-narrowLots of folks bought second properties with a plan to do short term rentals through Airbnb or VRO — and now occupancy rates are dwindling, maintenance expenses are increasing, consumer disposable income is declining, and interest rates continue to soar.  While not yet an Airbnb bust, it is not the easy market it was back in 2020 and 2021.  Bloomberg covers some of the problems in its story this week Airbnb Hosting Isn’t What It Used to Be.

So far Florida’s short term rental market hasn’t been impacted all that much – despite the heat this summer.  But if the trends don’t reverse soon, many homebuyers will need to make some hard choices to get out from under the debt in a way that creates as much value as possible and with an intact balance sheet and credit report, before the decision may be made for them.

If this is you and you need help making a plan forward, please reach out to us.  Our practice areas make us uniquely able to find solutions – and the earlier the better in our opinion.  If times get tougher, it’s best to be one of the first out the door as opposed to getting trampled later.

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Christie_1How is it possible to wait too long to address student loan debt?

Right now, with the IDR recount working to forgive six figure debt for clients (yes, we are now seeing this occur – check your studentaid.gov site for your loan balance b/c servicers are running behind in getting the emails out), we strongly recommend that everyone with a FFEL or Perkins loan consider consolidating to a Direct loan.  Do that now.  If a lawsuit is filed that gains transaction to put a hold on the IDR recount, this relief may no longer be available.  It really is a race against time for the IDR recount I fear.

But what should you do if you have a private student loan?

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Christie_1The new IDR account adjustment going on right now may require that you consolidate your FFEL loans to Direct.  You may also want to consolidate differently dated Direct loans to one consolidation that will re-date all the loans to the earliest repayment date so you get as much credit toward your income driven plan forgiveness as possible.  This is particularly important for anyone who bifurcated their education and had a gap – no matter how small – between degrees.

There is much more information online and at your fingertips than you may believe.

You need to login to studentaid.gov & download your TXT file covering all of your federal loans.  Each loan is listed and for FFEL loans, the Servicer, Lender & Guarantor are listed so you can tell if FFEL is owned by ED or not.  FFEL loans owed by ED are covered by the IDR waiver/account adjustment.  Generally though, if you have a FFEL loan with anyone, including the Department of Education, it usually is best to change it to Direct for multiple reasons such as PSLF, SAVE etc.  There can be reasons not to though – and we’d recommend a strategy session with us where we can go over whether you should consolidate, how to do it, and often be by your side talking you through it.

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Christie_1There are a few of us student loan attorneys around the nation that have dedicated a good portion of their lives and practice areas to understanding the student debt landscape and how to use it to our advantage to solve problems.  It shouldn’t be that complicated to repay a debt; but, alas it is.  The Department of Education has done more things over the past year than it has in the past 20 years to address student loan debt.  Because things have moved both rapidly and glacierly (if that isn’t a word, it should be), and various court filings have been all over the place, it’s hard to keep up with recent events.  And it takes time.

  • We get basic questions such as how do I know what loan types I have?
  • We also get questions on more complicated issues such as how can I best lower my payment while on an income driven plan – or what does double consolidation mean and how can it help lower payments on a Parent Plus loan?
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