Q. My wife and I are retired, but we have student loans for putting our two children through university. We have been diligent in our payments. My wife retired from nursing three years ago, but was called into retirement as a COVID contact tracer. She has 10 years of student loan repayment. Is there a way for her to cancel her student loans? In addition, I am a retired high school principal with two student loans. One of the loans was for $ 79,000 and with no missed payments we found it had climbed to over $ 105,000. How is that possible, and is there any action I can take to challenge loans that are skyrocketing like this?
– Paying too much
A. University debt is a huge burden on so many people.
Let’s take your questions one by one.
First of all, it seems you are talking about loans for your children, some for your wife, and some for you.
On the loans that have been used for your children’s education, you should discuss with them whether the repayment has a significant impact on your retirement, said Evan Drury, chartered financial consultant at US Financial Services in Fairfield.
“We all want to give our children everything, but we have to give what is reasonable and know that there are other solutions to help your children beyond paying everything properly,” he said. “For example, you could help with monthly payments in a way that doesn’t significantly impact your retirement. Remember, your kids have their whole life to pay off their loans when you can’t get a loan to retire.
Regardless of the name of the lender, there are a number of factors that could allow a loan to grow over time, even if you’ve never missed a payment.
This includes income-based refunds, Drury said:
“This relates to federal income-driven plans that allow borrowers to make payments based on what they can afford rather than what they owe,” he said. “The monthly interest on the loan can be higher than the monthly payment. In this case, the total student loan balance could actually increase each month.
If you’ve ever opted for a postponement or forbearance on your loan, even though you haven’t had to make a payment, interest continues to rise, he said.
“Sometimes private lenders allow borrowers to have a temporary reduction in the amount they are supposed to pay each month,” he said. “While this can help the borrower in the short term, the interest usually continues to rise.”
You should review your statements and see when and how the balance increased.
“Look at your statements or contact your loan provider to determine the cause of the increase in the value of the loan,” he said. “Once that is understood, you can better handle the situation. It could be something as simple as increasing your payout, but that hasn’t been determined at this point. “
Now on to your wife’s loan and any possibility of forgiveness.
She may have her student loans canceled through Public Service Loan Cancellation (PSLF) if they are direct loans canceled and she qualifies, he said. declared.
She must: · Be employed by a US federal, state, local, or tribal or non-profit government; · Work full time for that agency or organization; · Have direct loans or consolidate other federal student loans into a direct loan; · Repay loans under an income-based repayment plan, and; · Make 120 eligible payments.
Contact your lender to see if their loans can qualify, he said.
“Most of the payment rules eligible for the PSLF have been suspended until October 31, 2022. Under this temporary exemption, you can get credit for the payments you have made on loans that would not normally be eligible for the PSLF “said Drury. “These payments will count even if you haven’t paid the full amount or on time.”
Only payments made after October 1, 2007 can be considered eligible payments, he said.
Nurses with private student loans may want to consider the Nurse Corps loan repayment program.
Also, keep in mind that you may have to pay tax on loan relief depending on the program, so talk to your tax preparer before making a decision.
Email your questions to [email protected].
Karin Price Mueller writes on Bamboo column for NJ Advance Media and is the founder of NJMoneyHelp.com. Follow NJMoneyHelp on Twitter @NJMoneyHelp. Find NJMoneyHelp on Facebook. Sign up for NJMoneyHelp.com‘s weekly electronic newsletter.