This morning I saw a Facebook post about the Student Loan Debt Forgiveness law that has just passed with a phone number that says “Find out if you’re eligible contact 1-888-732-8191.” Being the curious mind that I am I decided to call. Besides, two Facebook friends I trust liked the post and I am swamped with student loan debt. I have two loans in rehab right now, so why not? I wanted to see if there was anything I else I could do. A fairly friendly woman answered the phone and began helping me right away. She said that she couldn’t see any of my loan information and that I needed to fill in an online form for her to see it. She emailed me the form, I filled in the info, and BOOM, she could electronically see my loans.
BRITTANY JACKSON FROM RIVERWALK DEBT SOLUTIONS SAYS:
- I currently have $57,000 in loans.
- I qualify for an income based repayment program where as long as I make under $35,000 a year I pay $0.
- If I stay in this program for 300 months my loans can be forgiven. I was told that this was my loan term.
- Each year I would verify my income and the amount I am required to pay would be based on my income.
- This income repayment option is based on 15% of your income. So If I were to make $40,000 a year with a household of four, my monthly payments would be $52.
- With this program there’s no added interest for three years.
Brittany then tells me “oh, just to get started you pay $99 a month for four months.” Then things started sounding kinda fishy. I started asking if they were the official company handling this for the Dept. of Ed. She then explained that there are multiple companies but most charge a fee higher than theirs. She informed me that she was giving me the “economic hardship fee” because I am unemployed. The usual fee is $600. I began to ask questions about the difference between me doing this directly through the Dept. of Ed and doing this through her company. She got an attitude and became very passionate in explaining that the Dept. of Ed is not going to hold my hand through this process. That if I want to do all the research myself I would have to fill out mounds of paperwork that the average person can’t handle. She compared it to filling out your taxes without using TurboTax. I reminded her that there was a time when there was no TurboTax and it didn’t take people a year to fill out their taxes.
She got loud and belligerent explaining that if I were to try to do this alone without them I take the risk of getting denied by the Dept. of Ed. and would have to contact them to help me anyway. I told her that I’ve consolidated my loans before without paying any fees. I asked what type of paperwork would be so monstrous that her company could fill it out but I couldn’t. She just kept ranting about how the Dept. of Ed. was not going to help me at all and that I needed a company like theirs to mediate. After she became irate my spidey sense said “something’s not right.” I told her I would call her back and wished her a better day.
I called the Dept. of Ed. directly. They were SUPER DUPER helpful and informative. Here’s what I learned:
- In order to participate in the programs you will have to consolidate your student loans with the Department of Education.
- You do not have to pay any fees to consolidate your loans.
- You can consolidate by answering a few easy question at www.studentloans.gov
- After consolidation you can choose your servicing agent and the repayment option you feel is best.
- In order to research the repayment option that fits you best visit www.studentaid.gov and click repaying your loans.
- Representatives from the Dept. of Ed are available, friendly, and ready to answer any questions you have as well as walk you through the process.
THE TRUTH ABOUT LOAN FORGIVENESS:
To find the repayment method that is best for you visit the student aid website above. Here is the information the Dept. of Ed. gave me as related to the information I got from Brittany….
- The term for the income based plan in general is 25 or 30 years. It is not based on any individual loan term.
- After 25 or 30 years in the income based repayment program the loans are forgiven.
- You may have to pay income tax on loans that are forgiven so you want to be careful of the amount owed at the time of forgiveness.
- I would have to verify my total household income (not just my income) every year. When I get married my student loan payments will be based on income from my spouse and I.
- Some forgiveness options have shorter terms. For example, if you work in public service for 10 years and you have been paying your loans during that time (starting in 2007) you can have your loans forgiven.
- If you have worked for Title I schools as a special needs teacher, math teacher, or english teacher you can have up to $17,000 forgiven after 5 years.
THINGS YOU SHOULD KNOW:
- You don’t have to go through any debt solutions companies or servicing agents that charge you fees to participate in loan repayment or student loan debt forgiveness.
- Student loan debt forgiveness seems like a catch 22 if you have to turn around and pay taxes on the money you’re “forgiven for.”
- The process for student loan debt forgiveness is not a daunting process, but you should read the two websites mentioned above before beginning.
- Student loan debt forgiveness could take any where from 5 to 30 years depending on your situation.
- There are multiple student loan repayment options. Read up on all of them and choose which is best for you.
I hope this information helps someone. Please spread the word. Let your family, friends, colleagues, and acquaintances know that they DO NOT have to pay any fees to participate in the Dept. of Ed’s student loan debt forgiveness programs.