Wednesday, February 27, 2008
Student Loan Forgiveness Program
The Congressional Research Service has a nice reference document called Student Loan Forgiveness Program. This is a handy little document to read through during these troubled economic times.
Wednesday, February 20, 2008
Loan Rehabilitation
You may want to consider rehabilitating your defaulted loan(s). Advantages of rehabilitation include:
* Your loan(s) will no longer be considered to be in a default status.
* The default status reported by your loan holder to the national credit bureaus will be deleted.
* You will be eligible for the same benefits that were available on the loans before the loans defaulted. This may include deferment, forbearance, and Title IV eligibility.
* Wage garnishment ends and the Internal Revenue Service no longer withholds your income tax refund.
If you are a Direct Loan Borrower:
To rehabilitate a Direct Loan, you must make at least nine (9) full payments of an agreed amount within twenty (20) days of their monthly due dates over a ten (10) month period to the U.S. Department of Education (Department). Payments secured from you on an involuntary basis, such as through wage garnishment or litigation, cannot be counted toward your nine (9) payments. Once you have made the required payments, your loan(s) will be returned to the Direct Loan Servicing Center.
If you are a FFEL loan borrower:
To rehabilitate a FFEL, you must make at least nine (9) full payments of an agreed amount within twenty (20) days of their monthly due dates over a ten (10) month period to the Department. Payments secured from you on an involuntary basis, such as through wage garnishment or litigation, cannot be counted toward your nine (9) payments. Once you have made the required payments, your loan(s) may be purchased by an eligible lending institution.
If you are a college loan Perkins borrower:
To rehabilitate a Perkins Loan, you must make twelve (12) on-time, monthly payments of an agreed amount to the Department. Payments secured from you on an involuntary basis, such as through wage garnishment or litigation, cannot be counted toward your twelve (12) payments. Once you have made the required payments, your loan(s) will continue to be serviced by the Department until the balance owed is paid in full.
* Your loan(s) will no longer be considered to be in a default status.
* The default status reported by your loan holder to the national credit bureaus will be deleted.
* You will be eligible for the same benefits that were available on the loans before the loans defaulted. This may include deferment, forbearance, and Title IV eligibility.
* Wage garnishment ends and the Internal Revenue Service no longer withholds your income tax refund.
If you are a Direct Loan Borrower:
To rehabilitate a Direct Loan, you must make at least nine (9) full payments of an agreed amount within twenty (20) days of their monthly due dates over a ten (10) month period to the U.S. Department of Education (Department). Payments secured from you on an involuntary basis, such as through wage garnishment or litigation, cannot be counted toward your nine (9) payments. Once you have made the required payments, your loan(s) will be returned to the Direct Loan Servicing Center.
If you are a FFEL loan borrower:
To rehabilitate a FFEL, you must make at least nine (9) full payments of an agreed amount within twenty (20) days of their monthly due dates over a ten (10) month period to the Department. Payments secured from you on an involuntary basis, such as through wage garnishment or litigation, cannot be counted toward your nine (9) payments. Once you have made the required payments, your loan(s) may be purchased by an eligible lending institution.
If you are a college loan Perkins borrower:
To rehabilitate a Perkins Loan, you must make twelve (12) on-time, monthly payments of an agreed amount to the Department. Payments secured from you on an involuntary basis, such as through wage garnishment or litigation, cannot be counted toward your twelve (12) payments. Once you have made the required payments, your loan(s) will continue to be serviced by the Department until the balance owed is paid in full.
Tuesday, February 19, 2008
Can my Stafford Loan ever be discharged (canceled)?
Yes, but only under a few circumstances. Your loan can’t be canceled because you didn’t complete the program of study at the school (unless you couldn’t complete the program for a valid reason—the school closed, for example), or because you didn’t like the school or the program of study, or you didn’t obtain employment after completing the program of study.
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